B.C. Labour Relations Board overturns arbitration decision on age cut-off for LTD benefits
March 10, 2026
The British Columbia Labour Relations Board (the “Board”) has overturned an arbitration award that required an employer to extend long?term disability (“LTD”) benefits to faculty members working past age 65, finding that the arbitrator applied the wrong legal test under the BC Human Rights Code.
The employer, Okanagan College (the “College”), maintained an LTD plan under which benefits terminate at age 65. Although mandatory retirement was eliminated under the Human Rights Code in 2008, the age-65 cut-off for LTD coverage remained in place.
In 2013, the Okanagan College Faculty Association (the “Faculty Association”) filed a grievance challenging the age-65 cut-off of LTD coverage. After litigation, an arbitrator ruled in September 2024 that the exclusion of employees over 65 for LTD coverage was discriminatory because the plan did not qualify as a bona fide group insurance plan. The arbitrator ordered the College to amend the plan. More information on the September 2024 arbitration decision can be accessed here: B.C. college must provide long-term disability coverage to all faculty members after an arbitrator found that excluding those over 65 was discriminatory .
The College then applied to the Labour Relations Board to set aside the award, arguing that the arbitrator had misapplied the legal test set out in previous Supreme Court of Canada decision. Relying on New Brunswick (Human Rights Commission) v. Potash Corporation of Saskatchewan Inc. (“Potash”), the College maintained that a benefit plan is exempt from age-discrimination claims if it is legitimate and adopted in good faith (i.e. a bona fide plan) — without any requirement to justify the reasonability or proportionality of the age limit.
The Faculty Association defended the award, arguing that the arbitrator had properly considered evolving insurance options and the significant impact of denying LTD benefits to post age-65 employees. The Faculty Association also argued that Charter equality values supported a contextual, proportionality-based analysis to the bona fide exemption under Potash.
The Board allowed the employer’s application, holding that the arbitrator erred by importing a proportionality analysis that considered the reasonableness of the restriction into the bona fide plan test. Because the LTD plan was legitimate and adopted in good faith, it qualified for the bona fide plan statutory exemption from age-discrimination claims. The Board substituted its own decision - finding that the LTD plan as a bona fide plan - and remitted the matter back to the arbitrator only to address the unresolved constitutional challenge to section 13(3)(b) of the Human Rights Code, which permits age-based distinctions in bona fide group insurance plans.
Click on ‘More information’ below to view the decision:
