Jackson And Associates
Current Trends

Bill 66 Becomes Law in Ontario

The impact of Bill 66, which was passed by the Ontario government on April 2, 2019, has become clearer over the following months.

Of particular note to employers are the following changes to the Employment Standards Act (the ESA):

  • Employers are no longer required to have the ESA poster displayed in workplaces
  • Employers no longer have to apply to the Director of Employment Standards for approval to enter into agreements with employees to work more than 48 hours per week,
  • Employers no longer need Director approval to enter into overtime averaging agreements with employees

While media outlets have reported this Bill enables employers to pay employees less overtime, employers still need to obtain employees’ written agreement to average overtime and are still obligated to track hours of work and pay overtime at time and a half when it is earned.

Employers are encouraged to review and update their overtime policies to ensure they align with the new law

Why Data Analytics are Important to Benefit Plans

There is an abundance of data available to an employer to help them determine what elements of its benefit plan are adding costs and what future initiatives can be taken to better manage these costs.

This information is being captured by the company responsible for eligibility and claim management (usually a Canadian Life & Health insurance company) but is often not presented to the employer in an integrated format that will highlight trends and enable the employer to make informed decisions geared to their specific plan’s experience. For example, a strategy used for managing disability costs should include a review of short term absences (including short term disability claims), long term disability claims, WSIB incidents, paramedical claims, drug costs and the top drug claim numbers. All of these sources are available but not necessarily from one source but will, in our opinion, paint a complete picture of cost drivers as well as potential areas for preventive measures to “get in front of a claim”.

Data analytics is a good tool to identify areas of fraud and these reports should be available from the company managing eligibility and claims including how your plan compares to others in your Industry sector.

In the Sanofi Canada Healthcare Survey of 2018, there were several findings indicating how employers are using their data, including:

  • 58% of employers reported receiving claims data analysis identifying the main disease states in their workforce
  • 91% of these companies indicate it helps them understand how their benefit plan is being used
  • Of the same group, 39% are more concerned about how their drug plan is impacting costs

Much of this data is available to the employer online through a secured portal with the company managing their benefit plan but some needs to be ordered from that company in order to have all pertinent and relevant information to support decisions on the plan’s future design and communication requirements

Drug Claims to Rise in 2019

According to the annual Buck’s Canadian healthcare trend survey, plan sponsors can expect to see an increase in the costs for prescription drugs of three to five per cent. The survey also indicates that most insured plans also add a factor for inflation and trend which increases this percentage to 10.99% which is actually down from the 12.45% reported in their 2018 survey.

The survey also found the cost for dental is expected to increase over the prior two years to 5.86% in 2019.

With the entrance of younger generations into the workforce, our firm has noticed a marked increase in paramedical benefits which are being used by plan members in a preventive manner to maintain a state of good health and remain active at work.

Statscan Report Balances Younger, Older Workers

As of 2018, the number of workers over the age of 55 was equal to the number between ages 25 to 34 based on a report by Statistics Canada.

This is a dramatic change from their 1996 report when there were 2.7 workers between ages 25 and 34 for every worker over age 55.

There are numerous reasons for the aging workforce , including the large cohort of baby boomers entering their retirement years. While the ratio of older to younger employees does vary by industry sector, there is a challenge common to all benefit plans to ensure the coverage has adapted to a much broader age band among their plan members.

Ontario Court Caps Settlement

On June 19, 2019, the Ontario Court of Appeal made a decision reversing an earlier one from the Motion Judge reducing the notice period to 24 months from the initial award of 30 months. The decision in Dawe v. Equitable Life Insurance Company of Canada (Equitable) is of interest as it addresses both the entitlement to notice and the amount of the award.

The key points in the case are that Mr. Dawe was employed as the Senior Vice President and employed by Equitable for 37 years. At the time of his termination, he was age 62. An initial offer from Equitable included 24 months notice as well as other benefits. Mr. Dawe brought a motion for summary judgement alleging the 24 months was insufficient.

The Court of Appeal reduced the decision indicating the Motion Judge should have applied the traditional line of authority restricting Plaintiffs to 24 months. It’s important to note that the Court acknowledged the Plaintiff’s lengthy employment service along with his loyalty and dedication to the Employer’s business but they were not the type of “exceptional circumstances” that might drive the notice period beyond 24 months, rather, the base factor of 24 months recognized and rewarded these factors, and constituted the “high=end of the appropriate range of reasonable notice for long term employees

Duty To Accommodate and Termination of Employment on a Disability Claim

The Divisional Court recently rendered a decision in Katz Group Canada Ltd v. Clarke that provides employers guidance on the scope of duty to accommodate and the employee’s obligation to participate in the accommodation process.

Mr. Clarke was a store manager and, in July 2008, began a leave of absence due to depression. While on leave, he suffered serious knee injuries in two separate incidents reducing his mobility such that he remained unable to work. Disability benefits were paid by Great West Life (GWL) and, in 2013, they and the employer received a note from the family physician indicating he was “totally disabled” and that there was “no job he would be able to perform”. GWL wrote the employer that there was no reasonable expectation Mr. Clarke would be able to perform the essential duties of his position in the foreseeable future. In July 2013, the employer notified Mr. Clarke to advise his employment had been frustrated and would terminate on December 31, 2013 and confirmed he would receive the statutory entitlement to all benefits. In September 2013, Mr. Clarke’s legal counsel wrote the employer advising he was “working very hard to get well”. The employer responded by requesting, on two separate occasions, updated medical information outlining prognosis for recovery and estimated return-to-work date. Mr. Clarke did not respond and the employer terminated his employment as planned.

The Motion Judge initially ruled in favour of Mr. Clarke however the Divisional Court set aside that order for a number of reasons including:

  • The doctrine of frustration applies when there is evidence the employee’s disability is permanent, which the family doctor’s information supported,
  • The employee must provide evidence of their ability to return to work and any disability related accommodations that would allow them to do so, and
  • An employee on a leave of absence has a duty to participate in the accommodation process

An employer cannot consider accommodation without medical evidence outlining the employee’s restrictions and, where the employee has been on leave for an extended period, and the employee fails to produce medical evidence suggesting they are able to perform any job for the foreseeable future, an employer may conclude the employment contract has been frustrated.