Legal News

Court Dismisses Action to Have LTD Benefits Reinstated

In Graham v Great West Life et al, 2003 BCSC 198, February 6, 2003, a disabled employee received benefits under the LTD plan in her collective agreement. After two years, the claims paying agent (Great West Life) terminated the benefits on the basis that the employee was no longer totally disabled. A claims review committee confirmed Great West Life’s decision. The employee applied to the Labour Relations Board for review of the committee’s decision. The Board dismissed the employee’s application. The employee then filed a claim in the BC Supreme Court to have her LTD benefits reinstated.

Relying on Weber v. Ontario Hydro, [1995] 2 SCR 929, the defendant employer and Great West Life argued that the Court was without jurisdiction to hear the matter. Weber established that the courts lack jurisdiction where the essential character of a dispute arises out of an alleged violation of a collective agreement, the agreement provides a comprehensive resolution scheme, and the scheme provides an effective remedy for the dispute in issue.

The plaintiff employee maintained that although the review processes set out in the collective agreement provided a general mechanism to address entitlement disputes, it did not provide an effective remedy in her case. She had attempted to return to work following the decision to terminate benefits. The attempt failed because (she alleged) she was totally disabled. She claimed there was no procedure to bring that information forward and to seek to have the decision reversed.

The Court held that it did not have jurisdiction and dismissed the action. The essential character of the dispute arose out of the collective agreement in that the employee alleged the employer had breached its obligation to provide LTD benefits. The collective agreement contained a comprehensive resolution scheme, including review by the claims review committee and the Labour Relations Board. The issue of the failed attempt to return to work following the decision to terminate benefits could be effectively addressed through Section 141 of the Labour Relations Code, which allows for reconsideration of decisions where the Board is satisfied that new evidence exists that was unavailable at the time of the original decision. Thus, the Court determined, the collective agreement did provide the plaintiff with an effective remedy.


(click here for full text of judgment)