



COURT OF APPEAL FOR ONTARIO

CITATION: Hutton v. The Manufacturers Life Insurance Company
    (Manulife Financial), 2019 ONCA 975

DATE: 20191212

DOCKET: C66558

Strathy C.J.O., Sharpe and Roberts JJ.A.

BETWEEN

Leisa Hutton

Appellant

and

The Manufacturers Life Insurance Company c.o.b.
    as Manulife Financial

Respondent

John Philp and Aron Zaltz, for the appellant

Amir Tamari and Sophia Zaidi, for the respondent

Heard: October 28, 2019

On appeal from the order of Justice Alfred J. OMarra of
    the Superior Court of Justice, dated January 16, 2019, with reasons reported at
    2019 ONSC 279.

Strathy C.J.O.:

[1]

The issue on this appeal is whether the court
    has jurisdiction over the appellants claim against her long-term disability
    (LTD) insurer or whether the claim is subject to grievance and arbitration
    under her unions collective agreement with her employer.

[2]

The motion judge found that the court had no
    jurisdiction and granted the insurers summary judgment motion to dismiss the
    action. For the reasons that follow, I agree, and would dismiss the appeal.

I.

Factual background

[3]

The appellant was employed full-time as a laboratory
    technician at Quinte Healthcare Corporation (QHC). She was a member of the
    Ontario Public Service Employees Union (OPSEU), the exclusive bargaining
    agent on behalf of all employees in her bargaining unit. QHC and OPSEU were
    parties to a collective agreement governing the terms and conditions of
    employment of all unionized employees of QHC.

[4]

QHC contracted with the respondent, The
    Manufacturers Life Insurance Company (Manulife), to provide group benefits,
    including life insurance and LTD benefits, to eligible employees.

A.

The appellants accident and LTD claim

[5]

The appellant was injured in an automobile
    accident in August 2011. She claimed that she was disabled as a result of her
    injuries and sought long-term disability benefits under the terms of the
    collective agreement. As explained in more detail below, she received benefits
    for about 17 months before Manulife determined that she was no longer eligible
    for LTD benefits. After Manulife denied her benefits, she filed a formal grievance
    against her employer. The grievance settled in September 2015. Prior to the
    settlement, however, the appellant commenced this action against Manulife.

[6]

As the collective agreement is central to the
    issue on this appeal, I will set out its key provisions before returning to the
    narrative.

B.

The collective agreement

[7]

The collective agreement between OPSEU and QHC provides
    that an eligible QHC employee is entitled to LTD benefits under the Hospitals
    of Ontario Disability Income Plan (HOODIP) or an equivalent plan (Art. 15.02).
    QHC pays 75% of the premiums and the employee pays the balance. Any disputes are
    to be resolved by grievance and arbitration (Art. 15.04(a)). It also provides
    for resort to the insurance companys appeal process prior to filing a
    grievance (Art. 15.04(b)). The material provisions are:

ARTICLE 15  SICK LEAVE AND LONG-TERM
    DISABILITY

NOTE: Articles 15.01  15.09 apply to full time employees only.

15.01 The Hospital [QHC] shall provide a
    short-term sick leave plan at least equivalent to that described in the 1992
    Hospitals of Ontario Disability Income Plan (HOODIP) brochure.

Copies of the HOODIP brochure will be made
    available to employees upon request.

15.02 The Hospital will pay seventy-five
    percent (75%) of the billed premium towards coverage of eligible employees
    under the long term disability plan (HOODIP or equivalent); employees shall pay
    the balance of the billed premiums through payroll deduction.

15.03 No sick pay benefit is payable under HOODIP
    for the first fifteen (15) hours of absence for the sixth (6
th
) and
    subsequent period(s) of absence in the same fiscal year (April 1
st
through
    March 31
st
).

15.04 (a)
Any dispute which may arise
    concerning an employee's entitlement to short-term or long-term benefits under
    HOODIP may be subject to grievance and arbitration under the provisions of this
    Agreement.

(b)
If a claim for long-term disability is
    denied, the employee must fully comply with the carrier's Medical Appeal
    Process prior to filing a grievance, provided that the Process is completed
    within sixty (60) days of its inception, unless that time is extended by mutual
    agreement of the Hospital and OPSEU.
[Emphasis added].

C.

HOODIP

[8]

A copy of the OPSEU Guide to the Hospitals of
    Ontario Disability Income Plan (HOODIP) (the OPSEU Guide) was produced on
    the motion and was referred to by the motion judge in his reasons. The motion
    judge found that HOODIP, although separate from the collective agreement, had
    been incorporated by reference in it.

[9]

The OPSEU Guide indicates the following:

·

HOODIP
    was created in 1968 to provide uniform disability income protection for all members
    of participating employers;

·

hospitals
    that are members of the Ontario Hospital Association can participate in the
    HOODIP plan;

·

OPSEU
    members are eligible to be plan members of HOODIP if their employer is a member
    of the Ontario Hospital Association and participates in HOODIP;

·

in
    general, an employer will contract with an insurance company or a third party
    administrator to assist in the adjudication of short term and long term HOODIP
    benefits;

·

if
    an employee moves to another hospital that does not participate in the plan,
    his or her coverage will terminate;

·

an
    employer who does not participate in HOODIP is required to guarantee equivalent
    benefits to its members;

·

the
    LTD part of HOODIP is funded by the employer as an insured benefit  the
    insurance company signs a contract with the employer to provide the program at
    a certain cost; and

·

if
    an LTD claim is denied, the employee is required to follow the insurance
    companys internal appeal process, before grieving the dispute.

[10]

The OPSEU Guide also provides:

You have the right to grieve any dispute on
    whether you are entitled to short or long term benefits under the HOODIP plan
    (Article 15 of the Central Collective Agreement).

D.

The appellants LTD claim

[11]

In January 2012, the appellant applied to
    Manulife for LTD benefits. Her claim was initially approved, and she received
    benefits from March 19, 2012 to August 22, 2013. However, after a review of her
    file by Manulife in 2013, she was advised that her condition no longer met the
    definition of total disability under the Manulife policy. The definition
    stipulated that an employee would be entitled to LTD benefits where their
    injury or illness prevented them from performing the essential duties of their
    own occupation during the two years immediately following the date of
    disability, and any occupation they were qualified for or could reasonably
    become qualified for after two years. At the two-year mark, the appellants
    disability was determined not to prevent her from performing the essential
    duties of any occupation. She was therefore no longer eligible to receive LTD
    benefits.

[12]

On December 17, 2013, the appellant filed a
    grievance with QHC, following the grievance procedure set out in the collective
    agreement. Her grievance stated: I grieve that the Employer has violated
    Article 15 of the collective agreement by denying my claim for long term
    disability benefits. Her desired settlement was [f]ull redress, including
    approval for LTD benefits as well as anything else an arbitrator deems
    appropriate.

[13]

On September 2, 2014, OPSEU requested that
    Manulife reconsider its decision to terminate the appellants LTD benefits.
    Manulife agreed, despite the fact that the deadline for appeal had passed. However,
    on November 10, 2014, Manulife advised the appellant that the termination of
    benefits was upheld and that its decision was final.

[14]

Almost a year later, on August 19, 2015, with
    her grievance still outstanding, the appellant commenced this action against
    Manulife. She claimed, among other things, breach of contract, entitlement to LTD
    benefits, and punitive damages of $500,000 for bad faith.

[15]

A few weeks later, on September 1, 2015, the day
    her grievance was scheduled to be heard, the appellant settled her grievance
    with QHC and OPSEU. The settlement provided, among other things, for $30,000
    for general damages and not for loss of income, and $31,800 less statutory
    deductions, allocated over three years. The motion judge found that the $31,800
    was for loss of income. The terms of the settlement did not prevent the
    appellant from pursuing her claim against Manulife. In September 2017, she also
    commenced an action against her union, OPSEU, and the two OPSEU lawyers who
    represented her in the grievance and settlement, claiming damages for
    negligence in the amount of $1,500,000.

[16]

Manulife brought a summary judgment motion to
    dismiss the appellants action on the ground that the court lacked jurisdiction
    over the claim, as it arose out of the collective agreement between QHC and
    OPSEU. The claim was subject to exclusive arbitral jurisdiction under the
    collective agreement.

II.

The motion judges reasons

[17]

On summary judgment, the motion judge agreed
    with Manulife, holding that the appellants entitlement to LTD benefits fell
    within the exclusive grievance and arbitration provisions of the collective
    agreement and was, therefore, subject to arbitral jurisdiction.

[18]

The motion judge undertook an analysis of
    whether or not the appellants dispute about LTD benefits was within the
    exclusive arbitral jurisdiction under the collective agreement, or in the
    circumstances of this case, the inherent jurisdiction of the court. The test,
    set out in
Weber v. Ontario Hydro
, [1995] 2 S.C.R. 929, requires the
    court to determine whether the dispute, in its essential character, arises
    from the interpretation, application, administration or violation of the
    collective agreement: at para. 52. If it does, the dispute is solely within
    the jurisdiction of the arbitrator.

[19]

The motion judge concluded that the appellants entitlement
    to LTD benefits, and QHCs obligation to provide them, were rooted in Article
    15 of the collective agreement. The dispute involved the interpretation, application,
    or administration of the collective agreement. The fact that the benefits were
    paid or administered under the Manulife policy did not change that
    determination.

[20]

He found that the collective agreement
    incorporated HOODIP by reference, and expressly provided for the resolution of
    LTD disputes under Article 15. On this point, he stated, at para. 44 of his
    reasons:

HOODIP, separate from the collective agreement, although
    incorporated by reference, sets out the terms required for benefits, such as
    the qualifying criteria of "total disability" for LTD and the amount
    of income receivable depending on length of service of the employee. The
    specific Manulife policy contracted by QHC is not referenced in the collective
    agreement because, as the central collective agreement notes, local employers
    may change the insurance carrier at any time. It is also noted in the OPSEU
    Guide to HOODIP, that the employee has the right to dispute any grievance about
    entitlement to LTD under Article 15.

[21]

In undertaking his analysis, the motion judge
    referred to the categories set out in Donald J.M. Brown and David M. Beatty,
Canadian
    Labour Arbitration
, 3rd ed. (Aurora, Ont: Canada Law Book, 1998) (
Brown
    and Beatty
), which were adopted and applied in the decisions of this court
    in
Barber v. Manufacturers Life Insurance Company (Manulife Financial)
,
    2017 ONCA 164, 136 O.R. (3d) 198, at para. 9, leave to appeal refused, [2017]
    S.C.C.A. No. 150, and
London Life Insurance Co. v. Dubreuil Brothers
    Employees Assn.
(2000), 49 O.R. (3d) 766, at para. 10, leave to appeal
    refused, [2000] S.C.C.A. No. 496.

[22]

The
Brown and Beatty
categories are set
    out below. The motion judge found that the claim fell within
Brown and
    Beatty
category 2, where the collective agreement stipulates that the
    employer is obliged to provide certain medical or sick-pay benefits, but does
    not incorporate the plan into the agreement or make specific reference to it. He
    thus concluded that any dispute as to [LTD] entitlements under the collective agreement
    was properly within the jurisdiction of an arbitrator to determine.

III.

Submissions of the Parties

[23]

The appellant submits that the motion judge
    erred in finding that QHC was contractually liable to pay the LTD benefits. She
    claims this was an error because, not only was there no evidence that QHC was
    responsible for payment of benefits, its only contractual obligation under
    Article 15 was to provide an LTD plan equivalent to HOODIP and to pay a portion
    of the premium. In contrast, there was evidence that Manulife was responsible
    for the administration of the policy and the payment of claims. This misapprehension
    led the motion judge to incorrectly categorize the claim as falling within
Brown
    and Beatty
category 2, rather than category 3. Category 3 was more
    appropriate because the collective agreement only obliged the employer to
    procure the policy and pay a portion of the premium. Further, as the collective
    agreement did not provide any details of the Manulife benefit plan, it cannot
    reasonably be held that QHC agreed to pay those benefits itself.

[24]

The appellant also contends that, for a benefit
    entitlement dispute to be arbitrable under the terms of the collective
    agreement, it must arise under HOODIP or an equivalent plan. However, in this
    case, as HOODIP and the Manulife policy have different definitions of total
    disability, they cannot be considered to be equivalent plans. Thus, while a
    claim as to whether QHC failed to provide the benefits promised under HOODIP
    would be arbitrable, her claim about whether she meets the definition of total
    disability under the Manulife policy is inarbitrable because it arises under
    the terms of the policy, not the collective agreement. The Manulife policy is
    distinct from the collective agreement, and disputes arising from it should be
    dealt with by the courts.

[25]

Manulifes answer, in substance, is that,
    pursuant to Article 15.04 of the collective agreement, LTD disputes are to be
    resolved first through the insurers appeal process and, if not resolved, then by
    grievance and arbitration under the collective agreement, not through the
    courts. The appellant followed that process. She invoked the grievance
    procedure and settled her claim against QHC. She has no right to access the
    court.

IV.

Analysis

[26]

There are two issues on this appeal: (a) the
    standard of review; and (b) whether the motion judge erred in finding that the
    appellants claim was subject to exclusive arbitral jurisdiction.

A.

Standard of review

[27]

Neither party addressed the standard of review
    applicable to this appeal.

[28]

In
Barber
, this court affirmed the
    dismissal of an employees lawsuit against Manulife for LTD benefits because
    the claim was subject to arbitration under the collective agreement. The court observed,
    at para. 7, that since the resolution of the appeal turned on the
    interpretation of the collective agreement, which was a negotiated agreement rather
    than a standard form contract, the question was one of mixed fact and law and
    the palpable and overriding error standard of review applied:
Sattva
    Capital Corp. v. Creston Moly Corp.
, 2014 SCC 53, [2014] 2 S.C.R. 633, at
    paras. 50-55;
Ledcor Construction Ltd. v. Northbridge Indemnity Insurance
    Co.
, 2016 SCC 37, [2016] 2 S.C.R. 23, at paras. 21, 24. See also
Morriseau
    v. Sun Life Assurance Company of Canada
, 2017 ONCA 567, 70 C.C.L.I. (5th)
    11, at para. 9, leave to appeal refused, [2017] S.C.C.A. No. 361.

[29]

However, while, like
Barber
, this
    appeal can be regarded as involving issues of contract interpretation, it can
    also be viewed as asking whether the dispute in question is subject to the
    jurisdiction of the court or an arbitrator. Determinations of jurisdiction
    under rule 21.01(3)(a) of the
Rules of Civil Procedure
, R.R.O. 1990,
    Reg. 194, are legal determinations and are subject to a correctness standard of
    review:
Grand River Enterprises Six Nations Ltd. v. Attorney General (Canada)
,
    2017 ONCA 526, at para. 18. In
London Life
, this court applied a
    correctness standard in circumstances similar to this: at para. 14.

[30]

Despite the potential tension between the two
    tests, as I conclude that the motion judges decision was correct, and in the
    absence of full argument, I do not find it necessary to determine the appropriate
    standard of review.

B.

Did the motion judge err in finding the claim was arbitrable?

[31]

Section 48(1) of the
Labour Relations Act,
    1995
, S.O. 1995, c. 1, Sched. A, provides that disputes arising from a
    collective agreement shall be resolved through binding arbitration:

Every collective
    agreement shall provide for the final and binding settlement by arbitration,
    without stoppage of work, of all differences between the parties arising from
    the interpretation, application, administration or alleged violation of the
    agreement, including any question as to whether a matter is arbitrable.

[32]

In
Weber
, the Supreme Court confirmed
    that mandatory arbitration clauses, such as s. 48(1) (then s. 45(1)),
    generally confer exclusive jurisdiction on labour tribunals to deal with all
    disputes between the parties arising from the collective agreement: at para.
    67.

[33]

In determining whether a matter falls within the
    exclusive arbitral jurisdiction under a collective agreement, the Supreme Court
    of Canada has outlined that the key question is whether the dispute, in its
    essential character, arises from the interpretation, application,
    administration or violation of the collective agreement:
Weber
, at
    para. 52.

[34]

Elaborating on the nature of this inquiry, the
    Supreme Court in
Regina Police Assn. Inc. v. Regina (City) Board of Police
    Commissioners
, 2000 SCC 14, [2000] 1 S.C.R. 360, at para. 25, held:

To determine whether a dispute arises out of the collective
    agreement, we must therefore consider two elements: the nature of the dispute
    and the ambit of the collective agreement. In considering the nature of the
    dispute, the goal is to determine its essential character. This determination
    must proceed on the basis of the facts surrounding the dispute between the
    parties, and not on the basis of how the legal issues may be framed. Simply,
    the decision-maker must determine whether, having examined the factual context
    of the dispute, its essential character concerns a subject matter that is
    covered by the collective agreement. Upon determining the essential character
    of the dispute, the decision-maker must examine the provisions of the
    collective agreement to determine whether it contemplates such factual
    situations. It is clear that the collective agreement need not provide for the
    subject matter of the dispute explicitly. If the essential character of the
    dispute arises either explicitly, or implicitly, from the interpretation,
    application, administration or violation of the collective agreement, the
    dispute is within the sole jurisdiction of an arbitrator to decide. [Internal
    citations omitted.]

[35]

In order to aid in the application of these
    principles within the context of benefit entitlement disputes, this court has
    adopted the
Brown and Beatty
categories:
Barber
, at para. 9;
London
    Life
, at para. 10.

[36]

The categories are helpful in assisting
    decision-makers to determine whether agreements, such as pension, insurance,
    and other benefit plans provided by employers can be appropriately considered
    to form part of the collective agreement. The authors of
Brown and Beatty
,
    echoing the Supreme Courts language in
Regina Police Assn.
, have suggested
    that whether such plans form part of a collective agreement, depends upon the
    surrounding circumstances, together with the specific language used in the
    collective agreement:
Brown and Beatty
, at 4:1400
.
The four
    categories are:

1.

where the
    collective agreement does not set out the benefit sought to be enforced, the
    claim is inarbitrable.

2.

where the
    collective agreement stipulates that the employer is obliged to provide certain
    medical or sick-pay benefits, but does not incorporate the plan into the
    agreement or make specific reference to it, the claim is arbitrable;

3.

where the
    collective agreement only obliges the employer to pay the premiums associated
    with an insurance plan, the claim is inarbitrable; and

4.

where the
    insurance policy is incorporated into the collective agreement, the claim is
    arbitrable.

[37]

The
Brown and Beatty
categories were
    described in
London Life
as helpful. However, while the categories
    can indeed be helpful, they should not mask the essential question, which is to
    determine whether benefit plans that are ancillary to the collective agreement
    can be characterized as constituting or forming part of a collective
    agreement so as to be enforceable by arbitration. This is primarily a question
    of interpretation of the collective agreement. As
Brown and Beatty
acknowledge,
    it is necessary in every case to assess the particular provisions of the
    collective agreement which the parties themselves have negotiated, and to
    understand them in the general context of the collective agreement:
Brown and
    Beatty
, at 4:1210, 4:1400 (citing
Coca-Cola Bottling Ltd. v. U.F.C.W.
(1994), 44 L.A.C. (4th) 151, at p. 155). While the categories can be of
    assistance in helping decision-makers understand the impact of their
    conclusions regarding the interpretation of a collective agreement, they must
    not distract from the primary exercise at hand: determining whether the essential
    character of the dispute arises either explicitly, or implicitly, from the
    interpretation, application, administration or violation of the collective
    agreement:
Regina Police Assn
., at para. 25.

[38]

In my view, as a matter of contract
    interpretation, the motion judge was correct in his conclusion in this case.
    The collective agreement referred only to HOODIP and contemplated that
    employees would be entitled to the level of coverage provided by HOODIP. The employers
    obligations under the HOODIP plan formed part of the collective agreement. This
    alone is enough to conclude that the grievance and arbitration provisions of
    the collective agreement apply to LTD disputes.

[39]

A helpful decision on this point is
Pilon v.
    International Minerals and Chemical Corp. (Canada) Ltd.
(1996), 31 O.R.
    (3d) 210 (C.A.), a case that bears some similarity to this one. In that case,
    the collective agreement between Mr. Pilons employer and his union provided
    for a group insurance plan, which included short- and long-term disability benefits.
    The cost of all benefits, other than LTD benefits, were to be paid for by the
    employer. LTD benefits were to be provided by the insurer through a plan
    administered by the employer and paid for by the employees through salary
    deductions. The collective agreement did not define the eligibility for
    disability benefits, but the collective agreement incorporated by reference the
    terms of a benefits handbook that was distributed to employees, which set out
    the definition of total disability and the terms of the coverage.

[40]

When the employer refused to process Mr. Pilons
    claim against the insurer for LTD benefits, he claimed directly from the
    insurer. When his claim was denied, he commenced an action against the insurer.

[41]

Relying on
St. Anne Nackawic Pulp &
    Paper v. CPU
, [1986] 1 S.C.R. 704, which, as it noted, was confirmed in
Weber
,
    this court affirmed the dismissal of the action. It held that Mr. Pilons
    entitlement to the LTD benefits arose from the collective agreement. The court
    noted, at p. 214, that:

The Supreme Court of Canada has clearly held that it would
    subvert the collective bargaining relationship, and the statutory scheme under
    which it arises, to hold that matters addressed and governed by the Collective
    Agreement may nevertheless be the subject of action in the courts at common
    law.

[42]

Mr. Pilon had no right at all to the benefits in
    the absence of the group insurance scheme established by the collective
    agreement. The grievance and arbitration mechanism in the collective agreement
    governed the resolution of the matter.

[43]

Similarly, here, the language of the dispute
    resolution clause in the collective agreement puts the question beyond dispute.
    Article 15.04(a) expressly provides that any dispute concerning an employees
    entitlement to short-term or long-term benefits under HOODIP may be subject to
    grievance and arbitration under the provisions of this Agreement.

[44]

I would not accept the appellants submission
    that, because her dispute arises under Manulifes policy and not under HOODIP, Article
    15.04(a) is inapplicable. In my view, the words or equivalent in Article
    15.02 must be read into Article 15.04(a) to make all claims for LTD benefits
    arbitrable. QHC is contractually obliged to provide those benefits and must
    therefore be a party to any dispute concerning an employees entitlement.

[45]

HOODIP is a widely used benefit plan and submissions
    similar to those made by the appellant have been made before. In
Trenton
    Memorial Hospital v. Ontario Nurses Assn.
, [2000] O.L.A.A. No. 506, a
    hospital argued that the absence of the words or equivalent in the grievance
    clause meant that an arbitrator did not have jurisdiction to consider a
    grievance for LTD benefits under any plan except HOODIP itself. This was
    rejected by the arbitral board on the basis that the specific provision must be
    considered in the context of the section as a whole: at para. 13. The decision was
    affirmed by the Divisional Court: [2001] O.J. No. 2965.

[46]

The arguments were also rejected in
Woodstock
    General Hospital v. Ontario Hospital Nurses Assn.
, [2001] O.L.A.A. No.
    500. In the case, the employer argued that arbitration was available only for
    disputes under HOODIP and not for disputes under an equivalent plan. The arbitrators
    rejected the submission, in language I find persuasive, at paras. 12 and 13:

In our view, having reviewed both the disputed provisions and
    the article as a whole, the only interpretation which makes sense is one in
    which the words "or an equivalent plan" is read into Article 12.07.
    Indeed, if these words were not read into Article 12.07 then the plan could not
    be equivalent - something which the employer is obligated to provide - for
    there would be no collective agreement mechanism for the adjudication of
    disputes dealing with coverage. The language, of course, is central and it is
    the well-known intention of the parties that coverage be uniform. Our
    conclusion about the proper interpretation of the provision is independently
    arrived at following a review of the provision. However, it is also a
    conclusion in complete compliance with existing authority.

In that respect, we are in agreement with Arbitrator Thorne's
    decision, and reasons for decision, in
Trenton
, a finding recently
    upheld by the Divisional Court. As Arbitrator Thorne found, there was no need,
    in Article 12.07 to specifically refer to "an equivalent plan" for
    the provision, read as a whole clearly incorporates any equivalent plan. While
    employer counsel takes the position that the issue is still alive - the
    Divisional Court having dismissed the application purely on the basis of its
    finding that the decision was not patently unreasonable - we read the Court's
    endorsement somewhat more broadly. The Court, significantly in our view,
    concluded: "To give the collective agreement the meaning suggested by the
    applicant would be to ignore the provision of article 12.07." We reach the
    exact same conclusion.

[47]

Further support for these conclusions can be
    found in the decision of Lax J. in
Campos v. Sun Life Assurance Company of
    Canada
(2009), 77 C.C.P.B. 301 (Ont. S.C.). The case was a proposed class
    action, in which the putative representative plaintiff, a registered nurse,
    made a claim for LTD benefits provided under a policy obtained by her employer
    pursuant to a collective agreement which incorporated HOODIP. Only a portion of
    the collective agreement is reproduced in the judgment, but the terms are
    substantially the same as Articles 15.01, 15.02 and 15.04(a) of the collective
    agreement between OPSEU and QHC. Lax J. dismissed the action, finding that the
    plaintiffs claim was subject to arbitration.

[48]

In the course of her reasons, Lax J. reviewed
    the history of HOODIP at length at paras. 10-21. She noted, at para. 16, that
    the provisions of the collective agreement providing for grievance and
    arbitration of short-term or long-term benefits under HOODIP had been described
    by some labour arbitrators as strange, startling, unusual or unique.  She
    noted that there was no provision in the collective agreement providing for
    arbitration of disputes regarding other benefits provided in the group
    insurance policy, including life insurance and accidental death and
    dismemberment benefits.

[49]

The same is true here. In my view, the
    provisions of the collective agreement are strange and unique, because the
    employer has contractually bound itself to provide employees with the coverage
    described in HOODIP and to resolve coverage disputes by arbitration, even
    though the LTD coverage itself is provided by a third party. Were it necessary
    to do so, I would characterize this case as falling within
Brown and Beatty
category 4: the employer bound itself to provide the short-term and long-term
    disability coverage set out in HOODIP, which was incorporated into the
    collective agreement. While Manulifes policy provided the administrative and
    financial backstops to that coverage, the employees recourse was to the
    employer, under the collective agreement.

[50]

While the provisions of the collective agreement
    may be described as strange and unique, I can well understand why OPSEU may
    have negotiated terms such as these on behalf of hospital employees. It permits
    disabled employees to resolve their LTD disputes by grievance and arbitration
    with their employer, rather than by litigation against the insurer. The
    arbitration process is faster, more cost effective, and engages the experience
    of expert arbitrators.

[51]

In this case, while the appellant phrases her
    claim as a disagreement over whether she meets the definition of total
    disability under the Manulife plan, the true substance of her dispute is a
    disagreement with her employer over her entitlement to LTD benefits as outlined
    in the collective agreement. This clearly arises from the collective agreement
    and falls within the purview of an arbitrator to decide. Here, the dispute was
    resolved through the appeals and grievance process stipulated in the agreement.
    The appellant has no entitlement to resort to the court for additional
    compensation from the insurer.

V.

Order

[52]

For these reasons, I would dismiss the appeal,
    with costs to the respondent fixed at $7,500, inclusive of disbursements and
    applicable taxes.

Released: GS  DEC  12 2019

George R. Strathy C.J.O.

I agree. Robert J. Sharpe J.A.

I agree. L.B. Roberts J.A.


