Arbitrator dismissed employee's pension contribution grievance, citing lack of jurisdiction under collective agreement
October 06, 2025
The labour arbitration process is not the proper forum for an employee to challenge her employer’s cessation of pension contributions following her termination for frustration of contract, an Ontario arbitrator has ruled.
According to the decision, the Canadian Blood Services employee went off work on long-term disability benefits in 2017. Her employment was terminated almost four years later for frustration of contract after a treating physician indicated that she had no anticipated return-to-work date, at which point the employee’s pension accrual ceased and her employer stopped paying pension contributions after her eight-week statutory notice period.
The union filed a grievance on the employee’s behalf. It alleged that both the termination and the halt to pension contributions violated the collective agreement, arguing that the employer was obliged to continue paying pension contributions until she was no longer disabled, or until she elected to retire or reached her normal retirement date in 2028.
However, following a hearing on the employer’s preliminary objection, the arbitrator only allowed the portion of the grievance relating to termination for frustration of contract to proceed in arbitration.
The arbitrator indicated that the pension contribution issue fell outside her jurisdiction because it did not engage the collective agreement. The “essential character” of that matter involved an interpretation of the pension plan, she added, rejecting the union’s claim that the plan was incorporated by reference into the agreement.
The arbitrator also emphasized that it was still open to the employee to raise the pension contribution issue with the plan’s third-party administrator, and, if that proved unhelpful, to escalate the matter to the pension regulator.
“While this may seem like a daunting and challenging process compared to labour arbitration, that fact does not empower a labour arbitrator to decide a dispute that does not arise under the collective agreement” the arbitrator concluded.
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