Summary of Arbitration Decision:
Issue
The Brampton Professional Fire Fighters Association filed a grievance against the City of Brampton. They argued that the imposition of a Reasonable and Customary Limit (RCL) on eye exams violated the collective agreement.
Background
A firefighter’s claim for an eye exam was partially paid due to the application of an RCL by Manulife, the plan administrator. The Association argued that the collective agreement provided for full coverage without such limits, while the City maintained that RCLs were standard and permissible under the agreement’s terms.
Decision
The arbitrator found that RCLs are generally considered part of benefit plans unless explicitly excluded by the collective agreement. In this case, the collective agreement specified that benefits were subject to the rules and regulations of the plan, which included RCLs. The arbitrator ruled that the RCL did not violate the agreement because it was consistent with the plan’s terms and not explicitly excluded.
Key Takeaways
- RCLs are standard in benefit plans and apply unless clearly excluded by collective agreement language.
- The application of RCLs to vision care benefits does not inherently violate the agreement.
- The Association can still challenge the reasonableness of the $145 RCL amount for eye exams separately.
Next Steps
The Association has 30 days to decide if it will pursue an argument that the specific RCL amount is unreasonable or destructive of the benefit. If no action is taken, the grievance will be dismissed.
Why It Matters?
RCLs limit costs for employers and limit entitlements for employees. Unless the collective agreement prohibits a limit, some limit is normal and is not a violation of the collective agreement. Arbitrator Nyman left the door open to challenge if the RCL is reasonable. Both parties to a collective agreement are expected to act reasonably. While Unions will not generally be successful in asserting that no limit should be applied to negotiated benefits without specific collective agreement language, Employers and insurers need to apply reasonable limits.