If a unionized employer develops a policy that is inconsistent with the relevant collective agreement, the union may challenge it through the grievance arbitration process. This can be costly and force changes to the policy. For example, policies relating to sick leave and measures taken to accommodate disabilities upon return to work must strictly comply with the terms of the collective agreement.

In a recent decision from the Ontario Divisional Court in Metrolinx v Amalgamated Transit Union, the union challenged the employer’s sick leave policy. After the union prevailed in the grievance arbitration, the employer sought judicial review in the court system. This case raised the issue of whether unionized employers can outsource dealing with sick leave claims to third-party administrators.

Union challenged sick leave policy in grievance arbitration

In Metrolinx v. Amalgamated Transit Union, the union challenged the employer’s sick leave policy in an arbitration before the Grievance Settlement Board. Specifically, the union disagreed with the employer’s approach of requiring employees:

• requesting sick leave to first approach a third-party benefits administrator;
• away for at least five days to complete a medical form created by the administrator; and 
• seeking an accommodation upon return to work to complete a form used by the administrator and to pay for its completion.

Union claimed employees were entitled to first deal with their supervisors

The union argued that the requirement for employees to deal with a third-party administrator in the first instance breached the terms of the collective agreement. The union noted that the provision of the collective agreement titled “Medical Certificates” envisaged a role for the employee’s supervisor:

“When a Supervisor requires verification, the Supervisor may request an employee to provide a medical certificate from a qualified Ontario medical practitioner for absences of five (5) days or less…

The medical certification must … state … the date the employee was first seen … prognosis of return to work date and confirmation that employee cannot work…

When an employee is absent for a period of more than five (5) consecutive work days, he/she shall provide his/her Supervisor with a satisfactory medical certificate…

The employer may require that the employee submit to a medical examination at the expense of the employer, where for reasons of health, an employee is frequently absent or unable to perform his duties.”

Collective agreement specifically provided a role to the employee’s supervisor

The Arbitrator agreed with the union that the reference to “supervisor” in the collective agreement meant that employees were entitled to provide information to their supervisor at least in the first instance of a sick leave absence.

The employer claimed before the Divisional Court that this conclusion was unreasonable because the reference to “supervisor” should be construed as the person to whom employees should give their medical certificates. The Court decided that the Arbitrator’s conclusion that the employer could not require communication with the third-party administrator was open to her.

More extensive medical form for longer absences not permitted

The union claimed that the third-party administrator’s medical form for absences of at least five days was not permitted under the collective agreement which envisaged only “a satisfactory medical certificate”. The employer argued that it was not restricted to collecting a medical certificate as defined in the agreement.

The Arbitrator decided that the use of the same phrase “medical certificate” to describe the document required for both absences of less than, and more than, five days meant that the same requirements for the document as listed in the collective agreement applied. As such, more comprehensive documents for absences of more than five days were not permitted.

The Court agreed that the Arbitrator’s decision was reasonable.

Accommodation form was too onerous 

Finally, the union claimed that the form which employees were required to complete when seeking an accommodation upon their return to work was overly broad as it was not limited to the current absence or to an assessment of the employee’s own job duties. It also argued that the employer was required to pay for the form in some circumstances.

The relevant provision of the collective agreement provided that employees may return to work in their own classification with modified duties. If the employee cannot continue to fulfill their classification requirements, they may be placed in another classification. 

As a result of this provision, the Arbitrator explained that the first inquiry was about whether the employee can be accommodated in their own classification. The Arbitrator decided that requests for information could first only focus on the employee’s current duties and current absence. The Court decided that the Arbitrator’s decision was reasonable.

The Court found that the Arbitrator’s conclusion, which was simply completing the accommodation form did not require payment by the employer to be reasonable. However, due to the requirement in the collective agreement that the employer was to pay for an examination where the employee is unable to perform their duties, if a new examination was required to complete the accommodation form, the employer must pay.

Can employers use third-party administrators to deal with sick leave claims?

This case demonstrates that the specific terms of the collective agreement are very important.

The employer argued that contracting out the administration of sick leave claims better protected employee privacy and resulted in the assessment of claims by people qualified to do so.

Importantly, the Arbitrator did not decide that the employer was prevented from contracting out the administration of sick leave benefits generally. In this case, using a third party to assess accommodation requests was allowed even in the context of the particular collective agreement at issue. However, one thing prevented by this agreement was outsourcing communications at the start of an employee’s sick leave.

Contact Grosman Gale Fletcher Hopkins LLP in Toronto for Assistance with Collective Agreement Interpretation or Representation at a Grievance Arbitration

If you are an employer faced with a collective agreement interpretation issue or are facing a potential grievance arbitration, contact one of the experienced Toronto labour lawyers at Grosman Gale Fletcher Hopkins LLP. Disputes relating to the language in collective agreements can be disruptive and costly, but we have extensive experience assisting unionized employers with their labour relations issues. To schedule a confidential consultation, contact us at 416-364-9599 or reach out to us online.