Monday, December 17, 2012

Sometimes it is better to start work on the first day of the month

Sometimes I come across decisions that while on the surface don't seem to have much to do with labour law, they can have huge consequences for working people.  For example, disability benefits and group life benefits are often provided as a result of a collective agreement obligation, but recovering those benefits will involve suing the insurance company in court.  In those circumstances, it will be insurance law that applies.

In Jackson v. Standard Life, the BC Court of Appeal ruled that where a disability insurance policy has a rider or provision that states that eligibility for coverage is the  "1st of the month coincident with or immediately following employment date" it means that a worker hired on the second of month onwards is not eligible for insurance coverage until the first day of the  following month.

In the Jackson case this interpretation had disastrous consequences for Ms. Jackson. Ms. Jackson, a vice-principal, started work on August 15, became seriously ill on August 27 and underwent major surgery on August 28 and never returned to work.  The court agreed with the insurance company that she did not become covered until September 1 and since she did not have insurance coverage on the date of her disability, she was not entitled to benefits.

In the lower court the judge had been concerned about the unfairness that the plain meaning of the provision created and had found another "reasonable" interpretation.  However the Court of Appeal confirmed that when it comes to interpreting insurance policies, " there is no reason to consider unfairness if no ambiguity has been identified. As stated in Progressive Homes Ltd., “[t]he primary interpretive principle is that when the language of the policy is unambiguous, the court should give effect to clear language...” (paragraph 46).

No comments: