Court File and Parties

CITATION: A.G. Simpson Automotive Inc. v. National Automobile, Aerospace, Transportation and General Workers of Canada (CAW-Canada) and Local 124, 2012 ONSC 1139

DIVISIONAL COURT FILE NO.: 333/11

DATE: 20120305

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: A.G. SIMPSON AUTOMOTIVE INC., Applicant

AND:

NATIONAL AUTOMOBILE, AEROSPACE, TRANSPORTATION AND GENERAL WORKERS OF CANADA (CAW-CANADA) AND LOCAL 124, Respondent

BEFORE: Swinton, Pepall, Harvison Young JJ.

COUNSEL: Wallace M. Kenny, Hillary E. Jarvis for the Applicant

Lewis Gottheil, for the Respondent

HEARD at Toronto: February 15, 2012

ENDORSEMENT

Overview

[1] This is an application for judicial review by the applicant A.G. Simpson Automotive Inc. for an order quashing the grievance arbitration award of arbitrator Pamela Cooper Picher, dated April 20, 2011 (the “Award”).

[2] In her Award, the arbitrator allowed the grievances filed by National Automobile, Aerospace, Transportation and General Workers of Canada (CAW-Canada) and Local 124 (the “respondent union”), finding that it was possible for the grievors to be entitled to both severance pay pursuant to the Employment Standards Act, 2000, S.O. 2000, c. 41 (the “ESA”) and retirement benefits pursuant to the collective agreement. The retirement benefits in issue consist of health and life insurance benefits.

[3] The applicant submits that this conclusion was unreasonable because an employee can only end his or her employment in one way: either by way of (a) abandoning recall rights and accepting ESA severance pay, or (b) by retiring. Those who chose to accept severance pay were not, it argues, “retirees” for the purposes of the benefits provisions of the collective agreement.

[4] The respondent union argues that an employee can choose to abandon recall rights and end his or her employment under the ESA, and retire at the same (coincident or concurrent) time, submitting that none of the grievors fell within article 10.03(f) of the collective agreement, because none had been laid off for a continuous period of 48 months.

Background and Legal Framework

[5] The applicant and respondent union were parties to a collective agreement in effect from March 31, 2006 to June 30, 2009.

[6] The respondent union filed two individual grievances and one policy/group grievance. The grievances all related to the applicant’s denial of health and life insurance benefits available to retirees under articles 18 and 19 of the collective agreement (the “retirement benefits”) for those employees who received severance pay in accordance with the ESA.

[7] The grievors had been laid off by the applicant for 35 weeks or more, and had elected to sever their employment and accept severance pay entitlements under the ESA. The relevant portions of s.67 of the ESA read as follows:

67. (1) This section applies if an employee who has a right to be recalled for employment under his or her employment contract is entitled to,

(a) termination pay under section 61 because of a lay-off of 35 weeks or more; or

(b) severance pay. […]

(3) The employee may elect to be paid the termination pay or severance pay forthwith or to retain the right to be recalled. […]

(5) An employee who elects to be paid shall be deemed to have abandoned the right to be recalled.

[8] The grievors had amassed 20 or more years of service each, and therefore also claimed the retirement benefits as provided in the collective agreement. Article 10.03 specifies different ways in which employment is terminated under the agreement. It provides as follows (please note that the bold print in the following quotations is contained in the collective agreement):

10.03 Seniority standing shall be cancelled and employment terminated if an employee:

(a) voluntarily leaves the employ of the Company;

(b) does not report back to work when recalled;

(c) overstays an authorized leave of absence without a valid reason;

(d) is discharged for just cause and not reinstated under the terms of this Agreement;

(e) is absent from work for three (3) consecutive working days without a valid reason;

(f) is laid off for a continuous period of 48 months, including those employees on layoff as of July 29, 1998;

(g) retires;

(h) is placed on a Labour Market Re-entry program by the WSIB and in accordance to the WSIB regulations. Eligible termination of employment payments, if any, and where eligible under Employment Standards, severance if any, will be in accordance with the Employment Standards Act (2000);

(i) is no longer eligible to receive LTD income replacement benefits and is able to furnish satisfactory evidence to the Company that he/she is still unable to work as a result of illness or injury. Eligible termination of employment payments, if any, and where eligible under Employment Standards, severance if any, will be in accordance with the Employment Standards Act (2000).

[9] Articles 18 and 19 of the collective agreement establish entitlements for life insurance and health insurance for certain retirees:

ARTICLE 18 – GROUP LIFE INSURANCE

18.03 Effective July 29, 1995 retirees shall be eligible for Life Insurance of $5,000.00. Those who retire on or after July 29, 1998 shall be eligible for Life Insurance of $6,000.00. Effective March 31, 2006, future Retirees with 20 or more years of credited service, shall be eligible for Life Insurance of $6,000.

ARTICLE 19 – HEALTH INSURANCE

The Company will provide the following benefits to employees on the active payroll (including spouses and dependents) who have completed the probationary period as per Article 10 of this Agreement. Additionally, certain benefits will also be extended to retired employees and surviving spouses as outlined in this Article (Weekly Indemnity and Extended Disability benefits are excluded). Current Retirees & Future Retirees with 20 or more years of credited service (current retirees with less than 20 years of credited service will continue to receive medical benefits as described below.) […]

The Arbitrator’s Decision

[10] The arbitrator held that Article 10.03 as set out above does not contemplate the circumstances of an employee who is laid off for more than thirty-five weeks and less than forty-eight months, and renounces his or her right of recall. There was nothing in the collective agreement that precluded both retiring under art. 10.03(g) and electing to receive severance pay under the ESA, when these are done generally concurrently (Award, pages 77-78). She acknowledged that retirement and renunciation of recall rights under the ESA may be distinct methods of terminating the employment relationship, but indicated that they are not mutually exclusive methods of terminating the employment relationship when a worker elects to take both actions within the same time frame. She also held that both the severance pay and the retirement benefits in issue are earned benefits and are the results of voluntary steps taken by the employees.

[11] The arbitrator also considered the issue of the admissibility of extrinsic evidence. She concluded that it was not admissible in light of the total agreement clause which was contained in the collective agreement. In addition, she noted that the evidence upon which the applicant employer sought to rely was not reliable in light of subsequent changes to the collective agreement.

Issues

[12] The applicant argues that the arbitrator’s decision is not rationally supportable. Its principal submission is that the arbitrator’s refusal to find that retirement and acceptance of ESA severance pay constitute mutually exclusive methods of terminating the employment relationship, along with her interpretation of the collective agreement in relation to the ESA, renders the award unreasonable. It submits that the arbitrator’s decision is inconsistent with the collective agreement, and, in addition, is in conflict with arbitral authority on the issue.

[13] The applicant also argues that the arbitrator should not have considered extrinsic evidence in the form of the previous collective agreement, further underlining the unreasonableness of the award.

Standard of Review

[14] There is no dispute that the standard of review is that of reasonableness: Dunsmuir v. New Brunswick (2008), 2008 SCC 9, 291 D.L.R. (4th) 577 (S.C.C.) at para. 47.

Analysis

The Interpretation of the Collective Agreement

[15] In submitting that the arbitrator’s interpretation of the collective agreement is unreasonable, the applicant argues, in effect, that s. 67(5) of the ESA must be read into art. 10.03 so that exercising one’s right to renounce recall rights and to receive severance pay becomes a form of termination within art. 10.03. We disagree.

[16] The arbitrator considered both the provisions of the collective agreement and the ESA. She gave detailed reasons for rejecting the applicant’s argument that the two methods of ending the employment relationship are mutually exclusive according to the collective agreement governing the parties. She concluded, rather, that the parties could have specifically provided that employees who had been laid off for more than 35 weeks and less than 48 months and have elected to renounce their recall rights under the ESA are “terminated” within that article and therefore they are not eligible to claim retiree benefits pursuant to articles 18 and 19, but that the parties had not done so (Award, page 66). She found that both the entitlement to retiree benefits and the election to be paid severance pay (and renounce recall rights) are the results of voluntary steps taken by the employee and are not inconsistent with one another.

[17] In addition, she noted that both are earned benefits (Award, page 73). In short, she considered the arguments presented by the parties as well as the ESA and the collective agreement and gave detailed reasons for rejecting the applicant’s submissions on the issue.

[18] The applicant also submits that the arbitrator failed to apply the relevant arbitral authority which, it argues, holds that an employee may only terminate his or her employment by one method. Again, we disagree.

[19] The arbitrator considered the jurisprudence provided to her by the parties. She gave extensive reasons for distinguishing the cases which she did not consider to apply to the present situation. In doing so, she reiterated her view that the routes chosen by the grievors were neither inherently mutually exclusive or inconsistent (see Re Siemens VDO Automotive Inc. v. CAW-Canada Local 35, (2007), 162 L.A.C. (4th) 43 (Etherington)) nor precluded by the agreement between the parties (see Re Cryovac and CAW Local 252, (2007), 91 C.L.A.S. 217 (Hunter)).

[20] In our view, the arbitrator’s reasons meet the standard of intelligibility, transparency and justification and fall within the range of possible outcomes, and we find no basis for interfering with her interpretation of the collective agreement and her application of the arbitral jurisprudence on the issues.

Extrinsic Evidence

[21] The applicant also submits that the arbitrator’s treatment of extrinsic evidence further undermined the reasonableness of the decision, particularly in light of her conclusion that extrinsic evidence was not admissible. In particular, the applicant points to the arbitrator’s reference to the earlier collective agreement (Award, page 68).

[22] In our view, the reference to the earlier agreement was incidental and not material to the decision. As the respondent noted, the current agreement before her included new provisions in bold type, which highlighted changes from the former agreement. In any event, we do not find any reference to the former decision to be material to the decision she reached.

[23] For these reasons, the application is dismissed.

Costs

[24] The parties are agreed that costs in the amount of $7,500 should follow the event. Accordingly, costs in the amount of $7,500 inclusive of disbursements and HST are payable by the applicant to the respondent.

Swinton J.

Pepall J.

Harvison Young J.

Date: March 5, 2012