Okanagan College: A Win for Employers in the Labour Landscape
February 19, 2026
Article by:
Brandon HillisKailey Hubele
In Okanagan College v. Okanagan College Faculty Association (“Okanagan College”), the arbitrator found that the College’s long-term disability plan was contrary to the B.C. Human Rights Code as it terminated coverage and benefits at age 65 and could not be protected by the exceptions provided at s. 13(3)(b) of the Code. In so doing, the arbitrator departed from long-established jurisprudence which held that such plans could be so protected.
Fortunately for employers across British Columbia, on February 9, 2026, the B.C. Labour Relations Board issued its review of Okanagan College, overturned the decision and reaffirmed what is known as the Potash test, which held that the bona fides of an LTD plan will be determined by assessing whether the plan is a legitimate one, adopted in good faith, and not for the purpose of defeating protected rights. Crucially, the assessment is based on the overall bona fides of the plan, rather than actuarial details or mechanics of its terms or conditions.
The Arbitration Award
In a grievance filed in September 2013, the Union alleged that the College’s LTD Plan discriminated against employees on the basis of age by virtue of ceasing to provide coverage at age 65, a standard requirement of many, if not most, employer LTD plans.
The College argued that Section 13(3)(b) of the Code, which provides an exception to the prohibition against age discrimination for a bona fide group insurance plans, applied and in so doing relied on the Potash test developed by the Supreme Court of Canada (the “SCC”).
The Arbitrator, notwithstanding that he affirmed the applicability of Potash, departed from the majority ruling in that decision, undertook an assessment of whether the “post-65 exemption was reasonably necessary to maintain the functionality and sustainability of the pension plan.” [1] The Arbitrator ultimately concluded that the post-65 exception was not necessary because plans that would have covered employees older than 65 were available and, thus, that the plan was not bona fide. In the result, the College was ordered to take all reasonable steps to amend the LTD Plan to provide benefits to those 65 and older.
The British Columbia Labour Relations Board Decision
The College appealed the matter to the Board.
After a lengthy review, the Board found the Arbitrator to have incorrectly applied the Potash test and confirmed the College’s LTD plan to be a “bona fide” plan and one protected by s. 13(3)(b) of the Code. As noted in the decision:
145 I find the error in the Award arises because its analysis extends beyond the approach [set out in Potash] to find the Employer did not reasonably believe the LTD Plan was not being adopted for the purpose of defeating protected rights because it was possible to obtain some form of LTD plan with provisions applicable to those over the age of 65 without meeting a financial hardship threshold … this form of analysis was specifically rejected by the Majority. When that portion of the Award that is in error is removed, I find the Employer has met the standard required to demonstrate it has not breached section 13(3)(b) of the Code.
In the result, the Board set aside the decision and concluded that the plan was a bona fide one.
Key Employer Takeaway
While a question about the constitutionality of s. 13(3)(b) of the Code remains to be decided, this decision amounts to an important reaffirmation of the Potash case and one that provides the employer community with clarity as to how their LTD plans will be assessed under the Code and in arbitration decisions.
[1] Ibid at para. 82.
February 19, 2026
In Okanagan College v. Okanagan College Faculty Association (“Okanagan College”), the arbitrator found that the College’s long-term disability plan was contrary to the B.C. Human Rights Code as it terminated coverage and benefits at age 65 and could not be protected by the exceptions provided at s. 13(3)(b) of the Code. In so doing, the arbitrator departed from long-established jurisprudence which held that such plans could be so protected.
Fortunately for employers across British Columbia, on February 9, 2026, the B.C. Labour Relations Board issued its review of Okanagan College, overturned the decision and reaffirmed what is known as the Potash test, which held that the bona fides of an LTD plan will be determined by assessing whether the plan is a legitimate one, adopted in good faith, and not for the purpose of defeating protected rights. Crucially, the assessment is based on the overall bona fides of the plan, rather than actuarial details or mechanics of its terms or conditions.
The Arbitration Award
In a grievance filed in September 2013, the Union alleged that the College’s LTD Plan discriminated against employees on the basis of age by virtue of ceasing to provide coverage at age 65, a standard requirement of many, if not most, employer LTD plans.
The College argued that Section 13(3)(b) of the Code, which provides an exception to the prohibition against age discrimination for a bona fide group insurance plans, applied and in so doing relied on the Potash test developed by the Supreme Court of Canada (the “SCC”).
The Arbitrator, notwithstanding that he affirmed the applicability of Potash, departed from the majority ruling in that decision, undertook an assessment of whether the “post-65 exemption was reasonably necessary to maintain the functionality and sustainability of the pension plan.” [1] The Arbitrator ultimately concluded that the post-65 exception was not necessary because plans that would have covered employees older than 65 were available and, thus, that the plan was not bona fide. In the result, the College was ordered to take all reasonable steps to amend the LTD Plan to provide benefits to those 65 and older.
The British Columbia Labour Relations Board Decision
The College appealed the matter to the Board.
After a lengthy review, the Board found the Arbitrator to have incorrectly applied the Potash test and confirmed the College’s LTD plan to be a “bona fide” plan and one protected by s. 13(3)(b) of the Code. As noted in the decision:
145 I find the error in the Award arises because its analysis extends beyond the approach [set out in Potash] to find the Employer did not reasonably believe the LTD Plan was not being adopted for the purpose of defeating protected rights because it was possible to obtain some form of LTD plan with provisions applicable to those over the age of 65 without meeting a financial hardship threshold … this form of analysis was specifically rejected by the Majority. When that portion of the Award that is in error is removed, I find the Employer has met the standard required to demonstrate it has not breached section 13(3)(b) of the Code.
In the result, the Board set aside the decision and concluded that the plan was a bona fide one.
Key Employer Takeaway
While a question about the constitutionality of s. 13(3)(b) of the Code remains to be decided, this decision amounts to an important reaffirmation of the Potash case and one that provides the employer community with clarity as to how their LTD plans will be assessed under the Code and in arbitration decisions.
[1] Ibid at para. 82.