COURT OF APPEAL FOR ONTARIO
CARTHY, ROSENBERG AND O'CONNOR JJ.A.
B E T W E E N :
GLENN RATHWELL ON HIS OWN BEHALF AND ON BEHALF OF ALL OTHER MEMBERS AND FORMER MEMBERS OF THE RETAIL WHOLESALE/CANADA CANADIAN SERVICES SECTOR DIVISION OF THE UNITED STEEL WORKERS OF AMERICA, LOCAL 416, UNIT 1
Plaintiffs
(Respondents)
and
HERSHEY CANADA INC.
Defendant
(Appellant)
William J. Hayter and Rita Samson for the appellant
Judith L. Allen for the respondent
Heard: May 16, 2000
On appeal from the order of Manton J. dated August 24, 1999.
CARTHY J.A.:
[1]
Overview
The Employment Insurance Act, S.C. 1996, c. 23, and the regulations thereunder, S.O.R./96-332, permit an employer to seek a reduction of premiums if it provides a wage loss plan to employees and undertakes that the employees will benefit from the premium reduction to the extent of at least five twelfths of the reduction (the ratio of contribution to premiums). From 1975 to 1987, the collective agreement with Hershey provided that the medical plan was in lieu of the five twelfths rebate. All reference to the rebate was removed from the agreement in 1987, but the medical plan has continued. This class action seeks to recover five twelfths of all rebates since 1987 as an unpaid statutory benefit. The fundamental lis between the parties is whether the plan continued to be the replacement for the rebate notwithstanding the deletion of any reference to the rebate in the 1987 and subsequent agreements.
[2] The two issues before this court are, first, whether the above question is solely within the jurisdiction of the Commission under the Act and, second, whether a ruling under the regulations has created an issue estoppel.
[3] Manton J. refused to make an order under Rule 21 dismissing the action and the defendant appeals that order. His reasons read in part:
I find that the statement of claim discloses a reasonable cause of action.
I also find that this Court has jurisdiction to hear this action because the Employment Insurance Act requires that part of the reduction given to the employer (Hershey) must benefit the employee. The regulations under the E.I.A. require only that the employer undertake to share the benefit with the employee but there is no mechanism to ensure that the employer is meeting his undertaking. The employees allege that they did not receive the benefits they are entitled to. A trial of the issues will determine this.
I also find that the Plaintiffs are not estopped from going ahead with their claim and that the doctrine of res judicata cannot be invoked by the Defendant because the parties in this action are not the same parties who communicated with Human Resources Development Canada.
[4]
Statutory Framework
The Act provides that the Commission shall annually set the premium rate (s.66) and then provides for the collection of those premiums from the employer and employee (ss.67 and 68). There is a further provision for a reduction of the employer’s premium if, what is called, a wage loss plan is in place and if the employees will benefit from the premium reduction in an amount equal to five twelfths of the reduction (s.69).
[5] The Commission is authorized to make regulations to provide a system for effecting premium reductions (s.69(2)), and specifically for the making of decisions relating to premium reductions and appeals from such decisions (s.69(3)(e)).
[6] The regulations provide that an application for a reduction may be made to the Commission by an employer (s.68(1)) and, inter alia, shall be accompanied by the employer’s undertaking that the employees will benefit in the required amount (s.68(1)(c)). An officer (not defined) of the Commission is empowered to decide whether the requirements have been met (s.72). This provision is at the centre of the present debate and reads:
- Where an application for a reduction of the employer’s premium has been made by an employer, an officer of the Commission shall decide whether the employer meets the requirements for receiving a premium reduction under this Part and shall notify the applicant of the decision and of the rate at which premiums are to be remitted.
[7] There is then a provision (s.75) that an employer may appeal the officer’s decision to the Commission.
[8] It should be noted that this entire procedure concerns the employer’s premiums and there is no involvement contemplated by employees or the union. In each year since 1987, the employer, Hershey, made application for and was granted a rebate and on each occasion filed the required undertaking as to the benefit to the employees.
[9]
Background
Prior to 1987, the collective agreement contained the following wording:
The Medical Plan will continue as at present and in recognition of this, any rebates as a result of unemployment insurance premium reduction will accrue to the Company.
[10] That clause disappeared in the 1987 version of the agreement without any change in the employer’s medical plan. An issue first arose in negotiating the 1994-97 agreement when the union sought recognition of the alleged entitlement to the employees’ statutory benefit. The employer resisted the change and the union filed a grievance. The arbitrator found that the dispute was outside of the terms of the agreement and thus beyond his jurisdiction.
[11] The union then wrote to the Premium Reduction Program complaining that the employer had given false information on its applications under s.68(1)(c) of the regulations and invoking s.39(1) and s.136 of the Act. These latter provisions give the Commission authority to impose a penalty for a false or misleading statement and do not reflect what the plaintiffs presently seek – reparation – nor how the complaint was dealt with by the officer in the Premium Reduction Program. He, officer Landry, simply ruled that so long as the medical plan remained in place, the employer is to be regarded as complying with the sharing requirement. That is the very issue which the plaintiff wishes to litigate as a class action on behalf of all those since 1987 who might have been entitled to a benefit.
[12]
Analysis
On the above recital of facts and statutory provisions, the analysis flows without complication to a conclusion. The only jurisdiction of officer Landry is under s.72 of the regulations and that is to make a decision on an application for reduction by an employer, subject to the employer’s right of appeal to the Commission. That decision, so far as it relates to this appeal, is as to whether the employer has given an undertaking that the employees will benefit from the reduction. It is not a decision, which this one purported to be, as to whether the employer has satisfied the undertaking, or will satisfy it. Subject to s.39(1) of the Act, giving the Commission power to impose penalties for false statements, there is no provision in the statute or regulations for enforcement of the regulation.
[13] Since the officer’s decision under s.72, where properly made, is appealable to the Commission, his decision in this case cannot be read as a decision of the Commission that no false or misleading statement was made. Nor is there a basis for applying s. 132(1) of the Act which reads:
- (1) If a question that could be decided by the Commission arises in any legal proceedings, the justice, judge or court before whom the question arises shall refer the question to the Commission and defer further proceedings until the Commission’s decision is received.
The question that has arisen in this proceeding as to compliance with the undertakings, or legal obligations arising therefrom, is not a question that could be decided by the Commission.
[14] Thus, there is no ruling or decision extant that has been made within the jurisdiction established by the Act and its regulations and, if there be legitimacy in the plaintiff’s plea, it would constitute a right which should not stand without a remedy. I conclude that the motions judge was right and the appeal should be dismissed with costs.
Released: July 7, 2000 “JJC”
“J.J. Carthy J.A.”
“I agree M. Rosenberg J.A.”
“I agree D. O’Connor”
