City of Toronto v. CUPE, Nairn 2015 ONSC 1123
CITATION: City of Toronto v. CUPE, Nairn 2015 ONSC 1123
DIVISIONAL COURT FILE NO.: 370/13
DATE: 20150219
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
J. WILSON, HARVISON YOUNG AND TZIMAS JJ.
BETWEEN:
CITY OF TORONTO
Applicant
– and –
CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 79 and MARILYN A. NAIRN
Respondents
Darragh H. Meagher and Justin O. Basinger, for the Applicant
Douglas J. Wray, for the Respondent, CUPE, Local 79
HEARD at Toronto: February 19, 2015
HARVISON YOUNG J. (ORALLY)
[1] This is an application for judicial review of an award of Arbitrator Marilyn Nairn. She found that the City is required to potentially adjust and top-up the grievor’s pension when she retires, as if she had been an employee on the active payroll of the City for the entire period that she has been entitled to WSIB.
[2] The City asserts that in reaching this conclusion, the Arbitrator committed reviewable error and it asserts that to the extent that she was applying the OMERS statute, the standard of review is correctness.
[3] The City concedes that to the extent that she was interpreting the Collective Agreement, it is reasonableness.
[4] In our view, the standard of review is reasonableness. We do not agree that the Arbitrator was interpreting the OMERS statutory provisions. She found that she did not have jurisdiction over OMERS, noting that it was not a party to the proceedings: Arbitrator’s Award, para. 87. Her reasons and conclusions were based entirely on her interpretation of the Collective Agreement and the standard of review is therefore clearly reasonableness: Dunsmuir v. New Brunswick, (2008) 9 S.C.C. para. 68.
[5] The applicant’s central submission is that the Arbitrator mischaracterized the City’s obligations with respect to the treatment of the pension deductions while a disability waiver is in effect. In particular, the City argues that the Arbitrator unreasonably imposed an obligation on it for potential future benefits as the employee has not yet retired.
[6] This is a highly unusual, if not unique case, as both counsel acknowledge. It arises out of a combination of unfortunate circumstances which include the fact that the grievor was injured at work in 2001, applied for and received WSIB benefits, which were subsequently terminated effective May 20, 2003, after which she applied for and ultimately received long-term disability benefits. She then appealed the refusal of her WSIB benefits. Her appeal was ultimately successful on April 15, 2008 and she was found to have been entitled to full WSIB benefits retroactive to the improper termination date of May 20, 2003.
[7] A series of accounting issues arising from the reconciliation of amounts owing between the parties form part of the grievances before the Arbitrator which were heard in the course of a six day hearing. None of those issues are before us in this application.
[8] In the normal course, pursuant to the OMERS plan, an employee is required to make contributions deducted from their wages to the pension fund and these contributions are matched by employer contributions which are also remitted to OMERS: Award, paras. 39-40.
[9] The Collective Agreement also provides that when that employee is disabled and in receipt of WSIB, the City deducts the applicable pension contributions from the top-up amount it owes to the employee and remits it to OMERS on behalf of the employee and matches it. This is a feature of the Collective Agreement and has the effect of preserving the pension entitlement that the employee would otherwise have had on retirement had they remained actively at work.
[10] The complication in this case arises from the fact that while she was on WSIB, the grievor applied for and was granted a disability waiver of her pension contributions to OMERS on the recommendation of the City.
[11] There is no dispute that such a disability waiver, while permitted, did and does not make sense for a person in receipt of WSIB benefits as their income is made whole by the WSIB scheme and the employer top-up: Award, para. 47.
[12] As none of the terminating events has taken place as set out in the OMERS scheme, there is no mechanism for reversing or terminating the disability waiver. It is irrevocable: Award, para. 50.
[13] The effect of the disability waiver is that the employee would be entitled to their pension calculated as of the date of the disability, plus cost of living adjustments as opposed to the active employee whose pension is determined at the date of retirement. Although the pension amounts are uncertain at this point because the grievor has not yet retired, the Arbitrator concluded that based on the evidence, the grievor’s pension will likely be less than it would have been but for the waiver: Award, para. 53.
[14] In the result, the grievor’s normal pension contributions are being deducted by the City from her top-up and withheld by the City, but the City is not remitting it to OMERS, which it cannot do pursuant to the OMERS scheme as a result of the waiver.
[15] As the Arbitrator noted at para. 54 of her Award, as of the end of 2012 the City had deducted from the grievor’s top-up but not remitted to OMERS on her behalf, a total of $40,453.43, nor had the City remitted its matching contributions. (As I have already indicated, the OMERS scheme does not permit the City to remit its contributions for employees on disability waiver).
[16] The City takes the position that it is entitled to make these deductions and cannot be obliged to potentially top-up or make whole the pension as if she had been an active employee throughout, and was not obliged to do so by the Collective Agreement.
[17] In our view, the Arbitrator’s decision was reasonable. She conducted a careful and detailed analysis of the relevant positions of the two Collective Agreements in issue. She carefully considered the arguments made by the applicant. She began by considering Article 22.05 and 22.07 of the Collective Agreement.
[18] Article 22 addresses employees in receipt of WSIB and the theme that runs through the Article is that such employees are to be considered as employees on the active payroll. We find that her interpretation of the term “benefit” as used in Article 22.07, as including pension benefits, is entirely reasonable read in the context of that Article.
[19] With respect to Article 13.07, the 2002 to 2004 Collective Agreement provided that, in the case of an employee on a disability waiver “the City will provide the difference between the employee’s pension and the pension to which the employee would have been entitled had the employee not been on said disability waiver of premium benefit.”
[20] This provision is absent in the 2005 Collective Agreement and the City relies on that as the basis for its position that there can no longer be any obligation to make the grievor whole in terms of her pension. We disagree.
[21] The Arbitrator carefully considered this submission along with relevant provisions as the Collective Agreement and she rejected the City’s position. She found that Article 13.07 was a remedial provision and that the fundamental obligation is grounded at Article 22 which did not change across the agreements. She found that the City’s position is inconsistent with that fundamental obligation to treat the employee on WSIB as an active employee.
[22] We find this to be reasonable and we do not agree that the Arbitrator was effectively amending the Collective Agreement. Rather, she was required to apply the Collective Agreement to an unusual and unique set of circumstances not expressly contemplated by the Collective Agreement.
[23] Finally, we do not agree that it was effectively premature to raise this issue before the vesting of the pension. This was reasonable because, while the calculation cannot accurately be made at this point, this determination resolves the central issue between the parties at this time. As the respondent submitted, had it not addressed the issue raised now, it would likely have been faced by timeliness arguments at such later date.
[24] In short, the Arbitrator’s reasons are intelligible, transparent and justified and her decision falls within the range of possible acceptable outcomes (Dunsmuir, para. 47).
[25] The application is therefore dismissed.
[26] As agreed by the parties, costs are payable to the successful party, that is, by the City to CUPE Local 79 in the amount of $5,000, inclusive of HST and disbursements.
___________________________ HARVISON YOUNG J.
J. WILSON J.
TZIMAS J.
Date of Reasons for Judgment: February 19, 2015
Date of Release: March 4, 2015
CITATION: City of Toronto v. CUPE, Nairn 2015 ONSC 1123
DIVISIONAL COURT FILE NO.: 370/13
DATE: 20150219
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
J. WILSON, HARVISON YOUNG AND TZIMAS JJ.
BETWEEN:
CITY OF TORONTO
Applicant
– and –
CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 79 and MARILYN A. NAIRN
Respondents
ORAL REASONS FOR JUDGMENT
HARVISON YOUNG J.
Date of Reasons for Judgment: February 19, 2015
Date of Release: March 4, 2015