CITATION: Milk and Bread Drivers et al. v. Gate Gourmet Canada Inc. et al., 2014 ONSC 4139
DIVISIONAL COURT FILE NO.: DC-13-276
DATE: 20140724
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
THEN, ASTON AND HARVISON YOUNG JJ.
BETWEEN:
MILK AND BREAD DRIVERS, DAIRY EMPLOYEES, CATERERS AND ALLIED EMPLOYEES, LOCAL UNION NO. 647
Applicants
– and –
GATE GOURMET CANADA INC. AND ONTARIO LABOUR RELATIONS BOARD
Respondents
Douglas J. Wray, for the Applicants
Michael Sherrard and Katherine Ford for the Respondent, Gate Gourmet Canada Inc., and Leonard Marvy, for the Respondent, Ontario Labour Relations Board
HEARD: June 12, 2014
harvison young j.
[1] This is an application for judicial review brought by the Applicant, Milk and Bread Drivers, Dairy Employees, Caterers and Allied Employees, Local Union No. 647 (“Local 647”) of a decision issued by the Ontario Labour Relations Board (“Board”). The Board dismissed an unfair labour practice complaint brought by the Applicant which alleged that the Respondent, Gate Gourmet Canada Inc. (the“employer”) had breached section 86(2) of the Labour Relations Act, 1995 (“Act”) by reducing benefits to its employees during the freeze period.
The Factual Background
[2] The facts may be briefly summarized. The employer had been bound to a collective agreement with Teamsters Local 419 (“Local 419”), another union not a party to this application, with an expiry date of March 31, 2012. Pursuant to that collective agreement, employees in the bargaining unit were eligible for benefits provided through Teamsters Benefit Programme Trust Fund (TTF). TTF unilaterally determined the actual benefits provided under the Teamsters Plan. The employer did not provide the benefits to employees. Rather, its only obligation was to contribute a monthly premium to the TTF. The relevant provision of the collective agreement provided as follows:
Benefits Programme Trust Fund
(a) Full-Time Bargaining Unit Employees
The Company agrees to contribute to the Teamster Benefits Programme Trust Fund. The benefits will be determined by the Board of Trustees of the Teamster Benefits Programme Trust Fund.
Effective June 1, 2011 the Company contributions is increased to $434.00 dollars per month plus any applicable taxes …..
The Company shall forward all Trust Fund contributions monthly, together with a list of all eligible members being reported each month within twenty (20) days of the end of the work month. The Union may file a grievance with the Company if contributions are not remitted by the due date. (emphasis added)
[3] It is common ground that the actual benefits to employees had, in fact, been changed a number of times between 2010 and late 2011 due to the financial constraints on the fund. During this period, certain benefits were removed, varied, and reinstated and the record contains a series of memos to employees from Local 419 advising them of these changes. In an October 2011 memorandum to employees, Local 419 advised of the reinstatement of certain benefits. That same memo put employees on notice that another union was seeking to displace it and that in the event that it was successful, the benefits under the Teamsters Plan would cease. This position was reiterated in a letter to the Company dated November 28, 2011.
[4] Local 647 was ultimately successful in its attempt to displace Local 419. It filed an Application for Certification on January 3, 2012, as did another organization. On Jan 12, 2012, the Company advised employees that it had received notice from Local 419 that it would not be on the ballot for the representation vote. It also advised employees that Teamsters had provided notice that employees would no longer be covered by the benefit plan as of January 31, 2012. By notice dated January 12, 2012, the employer advised that effective Feb 1, 2012, employees would be provided with coverage under the Gate Gourmet Canada plan for non-represented hourly employees. A vote was held on January 13, 2012.
[5] There is no dispute that the benefits under the employer’s substituted plan were inferior to the benefits under the Teamsters Plan as at January 31, 2012. In particular, no short term disability insurance was provided. Local 647 applied to the Board pursuant to s. 96 of the Act asserting that the Company was under an obligation pursuant to s. 86 of the Act to maintain the benefits at the same levels enjoyed by the employees while represented by Local 419.
[6] The applicant argued before the Board, as it does before this court, that the benefits that the employer announced on January 12, 2012, being inferior to those provided under the Teamsters Plan, had constituted an alteration of the terms and conditions of employment for members of the bargaining unit and had thus violated the “statutory freeze” provisions of the Act. In particular, the applicant pointed to the fact that, unlike the Teamsters Plan, the employer plan did not provide for short term disability benefits.
The Issues
[7] The central issue in this application is the Board’s interpretation of s. 86 of the Act, and its application to the circumstances of this case. Section 86 is colloquially known as the “statutory freeze” provision, and provides as follows:
86(1) Where notice has been given under section 16 or section 59 and no collective agreement is in operation, no employer shall, except with the consent of the trade union, alter the rates of wages or any other term or condition of employment or any right, privilege or duty, of the employer, the trade union or the employees, and no trade union shall, except with the consent of the employer, alter any term or condition of employment or any right, privilege or duty of the employer, the trade union or the employees,
(a) until the Minister has appointed a conciliation officer or a mediator under this Act, and,
i. seven days have elapsed after the Minister has released to the parties the report of a conciliation board or mediator, or
ii. 14 days have elapsed after the Minister has released to the parties a notice that he or she does not consider it advisable to appoint a conciliation board, as the case may be; or
(b) until the right of the trade union to represent the employees has been terminated,
whichever occurs first.
(2) Where a trade union has applied for certification and notice thereof from the Board has been received by the employer, the employer shall not, except with the consent of the trade union, alter the rates of wages or any other term or condition of employment or any right, privilege or duty of the employer or the employees until,
(a) the trade union has given notice under section 16, in which case subsection (1) applies; or
(b) the application for certification by the trade union is dismissed or terminated by the Board or withdrawn by the trade union.
The Standard of Review
[8] As the parties both acknowledge, the applicable standard of review is reasonableness: Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190 (S.C.C.); Greater Essex County District School Board v. IBEW, Local 773 [2012] O.J. No. 241 [Affirmed at 2012 ONCA 791]. The statute in this case is the “home” statute of the Board, and the issues under consideration lie at the heart of its expertise: see Warren v. Ontario Labour Relations Board, 2013 ONSC 847.
The Positions of the Parties
[9] There is no real dispute that the “statutory freeze” period was in effect between January 3, 2012 when when Local 647 applied for certification, and February 6, 2012, when it served notice to bargain a renewal of the collective bargaining agreement, respectively. The central issue, however, is whether the plan announced by the employer on January 12, 2014 constituted a change in the rights and privileges of the employees in violation of s. 86, or, more particularly, whether the Board’s decision that the new plan did not violate s. 86 was reasonable.
[10] In submitting that the Board’s decision was unreasonable, the applicant makes two principal submissions. First, it submits that the Board erroneously relied on the Alberta Labour Relations Decision in Summit Care Corporation (Calgary) Ltd. [2010] A.L.R.B.D. No. 8 which led the Board to come to its unreasonable conclusion. Second, it submits that the Board wrongly and unreasonably applied an incorrect test in considering whether the new plan amounted to a violation of s. 86.
[11] The respondent employer submits that the Board’s decision was reasonable, that it was reasonable in its application of the Summit Care decision, and that its articulation and application of the test for assessing whether there has been a violation of s. 86 was reasonable.
[12] I will address the two central submissions in turn. Before doing so, it will be useful to summarize the Board’s decision.
[13] The Board began by reviewing the chronology and the history of the changes in the benefits under the Teamsters Plan that had taken place since 2010, as well as the company’s announcement on January 12, 2012 of the new plan. It then considered the arguments of both parties. As it did before this court, the applicant submitted that it was not open to the company to provide no benefits when the TTF coverage ceased on January 31, 2012, and that paying anything less than the $434 per month per employee violated s. 86.
[14] The respondent employer submitted that the employer’s obligation under the collective agreement fell within the third category of benefits entitlements: that is, not to provide the benefits per se, but to pay the premiums as stipulated in the collective agreement. This was no longer possible after January 31, 2012. The company further submitted that, given the notices provided by Local 419 that benefits would cease, along with the period between 2010 and the fall of 2011 when the TTF varied and removed certain benefits and then reinstated some but not all of them, it could not be said that the employees had any reasonable expectation that their benefits would remain unaffected if they voted to change unions.
[15] The Board went on to consider principles underlying s. 86 at para. 31 of its reasons:
The provisions continue to be commonly referred to as the “freeze” provisions, despite some concluding that this is “somewhat of a misnomer” as all matters are literally not “frozen”. Rather, the “Board has interpreted these provisions as operating to preserve a ‘pattern of employment’ which exists when they come into effect, rather than specific terms, conditions, and other circumstances of employment.
[16] Having commented that both the “business as usual” and (more recently) “reasonable expectations” tests have been employed in assessing whether s. 86 has been violated, the Board continued at para. 34:
Underlying the varying approaches over the years is the core principle that s. 86 is intended to preserve the status quo (and determining what that is perpetually begs the question) so as to facilitate bargaining. It is not intended to maintain features of the relationship that could not be secured in bargaining. The intent is, as far as is feasible, to permit the union to commence bargaining on a theoretical “level playing field” in as much as it should not have to play “catch-up” resulting from a unilateral alteration by the employer of terms, conditions and other aspects of employment when commencing the bargaining cycle.
[17] The Board, noting that there was no dispute that this type of employer obligation to pay only the benefit contributions fall within the recognized “third category” of benefit entitlements, stated that it was clear that there was no obligation upon the company to provide the benefits themselves. It rejected the applicant’s argument that it should have continued to pay the amount of $434 to Local 647, or the individual employees, for two reasons. First, there was no evidence in the record before it indicating that it would have been possible for either Local 647 or the employees themselves to replace the benefit coverage that they had previously had.
[18] Second, the Board stated that the obligation in article 15, which sets out the employer’s obligation to make the monthly payments to the TTF, could not be performed after January 31, 2012. It considered the “reasonable expectations” test and concluded that the company had “satisfied the “pattern of employment” approach, when viewed alongside the “reasonable expectations of the employees”.
[19] Article 15 did not impose an obligation on the employer to provide any particular benefit, or to pay any sum to the new union. It merely required Gate Gourmet to pay a fixed sum per employee to the TTF. As the TTF no longer provided the employees’ benefits, Gate Gourmet’s obligation under Article 15 was impossible to fulfill. In light of this impossibility, the Board found that a strict “business as usual” approach had little applicability to the case before it.
[20] For that reason, the Board turned to the “reasonable expectations” approach to assess whether s. 86 had been violated. There had, as outlined above, been a number of changes to the employees’ health and welfare benefit coverage during the tenure of Local 419. In addition, Local 419 notified its members that should a change in union representation occur, it would no longer provide health and welfare coverage. Relying on these two facts, the Board found that Gate Gourmet’s employees would reasonably expect some form of coverage, but would not reasonably expect an identical benefits program to the one they were receiving from Local 419 at the time of its ouster. Therefore, the Board reasoned, if the Hourly Employees Plan was reasonably comparable to the Trust Fund plan, there would not be a s.86 violation. Given that the only material difference in the Hourly Employees Plan was the loss of short term disability coverage, it was reasonably comparable to the Trust Fund plan in the Board’s view.
[21] In reaching its conclusion, the Board held that this case was factually similar to Alberta Union of Provincial Employees v. Summit Care Corporation (Calgary) Ltd and Christian Labour Assn. of Canada Health and Welfare Trust Fund, [2010] A.L.R.B.D. No.8/No.30, in which a new union displaced an old union that had been responsible for health and welfare benefits. The Alberta Labour Relations Board found that the employer was not required to continue paying healthcare benefit premiums to the new union, even though it had been paying them to the old one.
Did the Board erroneously rely on the Alberta Labour Relations Decision in Summit Care Corporation (Calgary) Ltd. [2010] A.L.R.B.D. No. 8 (Summit Care)?
[22] The applicant submits that the Board erroneously relied on the Summit Care decision and that this led it to reach an unreasonable conclusion.
[23] I disagree. The applicant made essentially the same submissions on this point before the Board.
[24] With respect to the argument based upon the difference in the legislative language, the Board assessed the similarities and differences between the applicable legislation in Alberta and Ontario and concluded, contrary to the submissions of the applicant, that the essential wording of the Alberta statute being interpreted in Summit Care “mirrored” the applicable Ontario provisions. Moreover, the Board noted that the underlying purpose of the Alberta provision is the same as that of Ontario’s. I find nothing erroneous or unreasonable about the Board’s consideration and conclusion on this point.
[25] The applicant also submits that the difference in the facts as between the two cases warrant a different conclusion. The difference relied on is the fact that in Summit Care, both the displacing union and the incumbent union agreed that if the displacement succeeded, the benefits, which (as in this case) were tied to the incumbent union’s trust fund, would end. Here, there was no agreement between the unions on this point.
[26] The Board held that this was a “distinction without a difference” on the basis that notwithstanding the absence of any agreement, Local 419 had stated very clearly that the benefits provided by TTF would end if it was displaced. The Board further held that while Local 647 never agreed to this, it was fully aware that the benefits would end, and that the absence of agreement on that issue did not render the Summit Care decision less applicable. There is nothing unreasonable about that conclusion.
Did the Board apply the wrong test?
[27] The applicant submits that the Board articulated and applied the wrong test to the question of the adequacy of the new plan. In its submission, the Board asked whether the benefits offered were “reasonably comparable”, a test which has never been recognized as a test in such circumstances.
[28] I do not agree that the Board applied a “reasonably comparable” test as the applicant asserts.
[29] As outlined above, the Board turned to the “reasonable expectations” approach in light of its view that the “business as usual” case was inapplicable in these circumstances. Neither party challenged the reasonableness of that view. In my view, read as a whole, the Board’s reasons consider the similarities and differences between the previous benefits in the context of considering whether the new plan met the “reasonable expectations” of the parties. Given the number and nature of the changes to the benefits given to the employees in the period before the ouster, it was entirely reasonable for it to compare the benefits as part of this analysis.
[30] The applicant emphasizes the fact that, under the employer plan, the employees did not have short term disability benefits which they had previously and continuously had before the outster. While this is true, the employees did receive long-term disability coverage under the new plan which had been withdrawn (though subsequently restored) in the 2010-2011 period. The Board was alive to the various changes made to the plans, and the applicant made the same submission on this issue before the Board. It was reasonable for the Board to conclude that because the new plan was “reasonably comparable” it met the reasonable expectations of the employees.
Disposition
[31] For the foregoing reasons, the application is dismissed. The applicant and respondent employer agreed that costs of this application would be fixed in the amount of $5000.00, and accordingly, costs are payable by the applicant to the respondent in the amount of $5000.00.
Then J.
Aston J.
Harvison Young J.
Released: July 24, 2014
CITATION: Milk and Bread Drivers et al. v. Gate Gourmet Canada Inc. et al., 2014 ONSC 4139
DIVISIONAL COURT FILE NO.: DC-13-276
DATE: 20140724
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
THEN, ASTON AND HARVISON YOUNG JJ.
BETWEEN:
MILK AND BREAD DRIVERS, DAIRY EMPLOYEES, CATERERS AND ALLIED EMPLOYEES, LOCAL UNION NO. 647
Applicants
– and –
GATE GOURMET CANADA INC. AND ONTARIO LABOUR RELATIONS BOARD
Respondents
REASONS FOR JUDGMENT
Harvison Young J.
Released: July 24, 2014