BC Human Rights Tribunal Confirms Bona Fide Employee Insurance Plans Are Not Discriminatory
Previously printed in the LexisNexis Labour Notes Newsletter.
British Columbia’s Human Rights Code (“Code”) prohibits an employer from discriminating against an employee on the basis of certain protected characteristics with respect to employment or any term or condition of employment. However, section 13(3)(b) of the Code exempts bona fide employee insurance plans and other specified plans from allegations of discrimination on the grounds of marital status, physical or mental disability, sex and age.
The purpose of section 13(3)(b) is to accommodate the actuarial requirements of employee benefits plans and aims to maintain flexibility for workplace parties to make arrangements which respect the financial viability of the plans.
For an employee insurance plan to be bona fide and come within section 13(3)(b), it must meet the test from New Brunswick (Human Rights Commission) v. Potash Corporation of Saskatchewan Inc. The test requires the employee insurance plan to be a legitimate plan and adopted in good faith by the employer and not for the purpose of defeating rights protected by the Code. The plan is assessed for legitimacy as a whole and not on the basis of its individual provisions.
The BC Human Rights Tribunal (the “Tribunal”) in Barker v. Molson Coors Breweries and another (“Barker”) dismissed a complaint of discrimination on the basis of age after concluding that the employer’s employee insurance plan was bona fide.
The complainant brought a complaint against his employer and his union alleging that the employer’s benefits plan was discriminatory on the basis of age because his benefits were significantly reduced after he reached age 65.
The issue in Barker was whether the reduction in the complainant’s benefits as a result of his age arose from a bona fide group or employee insurance plan and was therefore exempt from a claim of discrimination under section 13(3)(b) of the Code.
The Tribunal applied the test from Potash to the employee insurance plan as a whole. It did not engage in a piecemeal examination of particular terms of the plan or the actuarial details or mechanics of the terms and conditions of the plan.
The evidence was that the employer and the complainant’s union had negotiated benefits as an entire package, and within the package they had made trade-offs and compromises. It was the entire package that was subject to scrutiny and not its constituent components. This was fatal to the complainant’s argument that the Tribunal should find the plan not bona fide because with respect to dental benefits, for example, there was no correlation between the cost of dental benefits and age 65.
The complainant argued that it was significant the employee insurance plan did not originate from the insurer but out of bargaining between the employer and the union. The Tribunal rejected this argument and held that if it concluded the plan had to originate from the insurer, it would deprive employers of the discretion which section 13(3) is intended to confer.
The Tribunal concluded that it was not necessary for the employer and the union to establish the bona fides of the plan based on actuarial evidence and, as a result of the Supreme Court of Canada’s decision in Potash, it was not necessary to prove that the plan’s scheme was a reasonable one.
The Tribunal held that in considering the application of section 13(3), it had to do so in a manner which proportionately balanced the purposes of the Code with protections conferred by the Charter. However, the Tribunal did not consider Charter values in this case because Potash and other court decisions had previously considered the application of section 13(3) to plans which discriminate on the basis of age. The Tribunal noted, however, that in a different kind of case, it might be necessary to consider Charter values. The example provided by the Tribunal is a case in which an employer decides to terminate benefits for people with mental illness, without any social, business or actuarial explanation.
As part of the Potash test, the Tribunal considered the motives of the employer and the union in adopting the benefits plan. The Tribunal held that there was little dispute about the motives of the parties. The employer’s objective was to keep costs down, both as they related to insurance premiums (which were 100 percent paid by the employer) and the value of each employee’s total compensation package. The union’s objective was to negotiate the most valuable benefits package it could for all members, including retirees, and this required trade-offs.
The Tribunal accordingly dismissed the complaint and concluded that the plan was bona fide because it was adopted in good faith and not for the purpose of defeating protected rights.
At the end of its decision, the Tribunal commented that the constitutionality of section 13(3)(b) remains an open question which must eventually be answered by the courts.
Employer insurance plans are generally exempt from claims of discrimination under the Code. However, employers must remain cognizant of the human rights implications of any changes they make to their insurance plans and consider the reasons for such changes because the Tribunal will look to the employer’s motives when considering the application of section 13(3)(b).
As the Tribunal noted in Barker, there will likely be further decisions from the Tribunal and the courts regarding the interpretation and application of section 13(3)(b) of the Code, what the Tribunal should consider as part of its assessment when applying this section, and perhaps even the constitutionality of the section.
Natalie Cuthill is a lawyer with Roper Greyell LLP, an employment and labour law firm based in British Columbia. Natalie practises in all areas of provincial and federal employment and labour law, with an emphasis on employment litigation, human rights law, labour arbitration, defamation law and workplace privacy matters. Natalie can be reached at (604) 416-1792 or email@example.com. For more information about her and the lawyers at Roper Greyell, please visit www.ropergreyell.com.
While every effort has been made to ensure accuracy in this article, you are urged to seek specific advice on matters of concern and not to rely solely on what is contained herein. This article is for general information purposes only and does not constitute legal advice.
 Human Rights Code, R.S.B.C. 1996, c. 210.
 Barker v. Molson Coors Breweries and another (No. 3), 2019 BCHRT 192 [Barker] at para. 25.
 New Brunswick (Human Rights Commission) v. Potash Corporation of Saskatchewan Inc., 2008 SCC 45 [Potash].
 Barker, citing Duncan v. British Columbia (Human Rights Tribunal), 2016 BCSC 2375 at paras. 102 to 106.