Civil Service Arbitration Decisions: STI Policy Grievances

The NSGEU, along with CUPE Local 1867, have been engaged in a long-standing arbitration regarding the administration of short-term illness (STI) benefits within the Civil Service.

NSGEU recently received two arbitration decision on that issue, which will provide useful guidance for members and the employer.

In the first decision, Arbitrator Lorraine Lafferty made an order related to the Employer’s practice of clawing back what it deemed to be STI overpayments from members’ pay cheques. The Public Service Commission argued it had the common-law right to claw back any monies owed to the Province and had the authority to do so under the Finance Act. However, the Arbitrator sided with the Unions and was clear in her decision that the Employer does not have the unilateral right to claw back from pay cheques and cannot rely on the Finance Act as their authority to do so. NSGEU considers this to be an important win for members. Here is Arbitrator Lafferty’s conclusion:

“In conclusion, I have found that in the circumstances described, the Employer does not have a common law right to recover overpayment of STI benefits based on mistake of fact. Further the Employer cannot rely on s. 65(1) of the Finance Act to act unilaterally to deduct from an employee’s wages an amount to off-set STI benefits paid pending appeal of the plan administrator’s decision to disallow a claim. Finally, the Employer cannot rely on management rights to act unilaterally to deduct the overpayment from wages or enter into a repayment schedule out of wages without Union consent.”

The Employer must now negotiate with the union and the employee in the event of a valid overpayment of STI benefits. This will ensure repayment plans are affordable for members.

Arbitrator Lafferty decided two other matters in her second award. The Arbitrator agreed with the Unions’ objections to the Employer‘s STI application form amendments introduced after May 13th, 2020. The Employer is now not permitted to amend the STI application form to include an optional LTD medical information consent and is not permitted to add a request to the application form that the employee and the employee’s medical advisor identify factors that may delay the employee’s return to work date or affect the period of impairment.

However, the Arbitrator sided with the Employer on the issue of their use of an initial telephone assessment (“ITA”) when assessing an application for STI benefits. The Arbitrator decided the Employer does not violate the respective collective agreements when it requires employees to engage in an ITA at the initial stage of the application for benefits. The Employer must however use reasonable discretion in waiving the ITA requirement where circumstances warrant. If the Employer does not exercise its discretion reasonably to waive the ITA, the Unions may grieve accordingly.

If you have further questions or concerns about these arbitrations, please contact us at 902-424-4063 (toll-free 877-556-7438) or

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