Court File and Parties
CITATION: United Steelworkers, Local 13292-01 v. Sensient Flavors Canada Inc., 2017 ONSC 1874
DIVISIONAL COURT FILE NO.: 553/16
DATE: 20170322
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
KITELEY, NORDHEIMER and LEMAY JJ.
BETWEEN:
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (United Steelworkers), Local 13292-01 Applicant
– and –
Sensient Flavors Canada Inc. and Marilyn Nairn Respondents
Shaheen Hirani, for the Applicant Kristin Taylor and Pamela Hinman, for the Respondent Sensient Flavors Canada Inc.
HEARD at Toronto: March 22, 2017
Oral Reasons for Judgment
LEMAY J. (Orally)
[1] This is an application for judicial review of a decision made by Arbitrator Marilyn Nairn under the Labour Relations Act, 1995, S.O. 1995, c. 1, Sched. A. The Applicant, the United Steelworkers of America, held collective bargaining rights at the Cornwall plant of the Respondent, Senisent Flavors Inc. The bargaining unit contained approximately fifty (50) employees.
[2] The most recent collective agreement between the parties commenced April 1st, 2011 (“the 2011 Collective Agreement”). It was originally set to expire on March 31st, 2014. However, the Respondent announced that it was closing the Cornwall plant in early 2014, with the closure to take effect in early 2015. As a result, the 2011 Collective Agreement remained in place until the closure of the Cornwall plant.
[3] Retiree benefits were included within the benefits provided under the 2011 Collective Agreement as part of Article 26 of the 2011 Collective Agreement, which covers benefits. The opening phrases of that Article read as follows:
The Company will provide each employee insurance benefits as summarized below. Each employee will receive a document detailing the benefits. The summary is intended to provide you with a convenient outline of the more important terms and conditions of our benefits; however, the respective insurance company master contracts are the governing documents and are hereby incorporated into the Collective Agreement by reference.
[4] There was an agreement during the currency of the 2011 Collective Agreement with Industrial Alliance Insurance and Financial Services that set out the specific terms of all of the benefits that employees and retirees were eligible to receive, as well as provisions under which those benefits would not be provided. One of those provisions was entitled the “Minimum Participation” provision, and it stated that, in order for the benefits plan to continue, there had to be a minimum of 100% of the eligible employees participating and no less than 26 participants in the plan.
[5] After the closure of the Cornwall plant in 2015, there were eight employees who were continuing to receive retiree benefits. The parties, who had a long-standing bargaining relationship, are agreed that the language in the 2011 Collective Agreement was applicable to all of the retirees, regardless of when they retired.
[6] The Respondent had another plant in the Greater Toronto Area, which they closed at the end of 2015. Subsequent to the closure of the Respondent’s other plant in Ontario, Industrial Alliance advised that it was no longer prepared to continue the benefits plan because the number of participants had dropped below the minimum of 26 required by the contract.
[7] The Union grieved the termination of retiree benefits, and the matter was heard by the Arbitrator on June 3rd, 2016. On August 2nd, 2016, the Arbitrator released her decision denying the Union’s grievance on the basis that the terms and conditions of the benefits plan were incorporated into the 2011 Collective Agreement, and that the employer had the right to terminate the retiree benefits as a result of the “Minimum Participation” provision.
[8] The Union has sought judicial review of this decision on the basis that it is unreasonable. The parties are both agreed that the decision is subject to a reasonableness standard of review. As set out in Dunsmuir v. New Brunswick 2008 SCC 9, [2008] 1 S.C.R. 190, in order for the Court to be satisfied that a decision is reasonable, justification, transparency and intelligibility must exist within the decision making process. The decision must also be defensible in respect of the facts and the law.
[9] The case before us concerns the vesting of retiree benefits. The leading case on this issue is the Supreme Court’s decision in Dayco v. C.A.W., 1993 144 (SCC), [1993] 2 S.C.R. 230. In that decision, LaForest J. stated at para. 45 that in part:
My second proviso is with respect to the use of the term “vested right” by the arbitrator. I will consider this term in some detail below, but I would for now mention that the term must be used advisedly, as it can carry many different meanings. In the end, I agree with the arbitrator’s finding to the extent that retirement benefits can (depending on the wording of the collective agreement) vest in a collective sense for the benefit of retired workers, and any reduction in those benefits would be grievable at the instance of the union. Whether this vesting also creates a personal right actionable by individual retirees is a question that need not be decided in this appeal.
[10] He repeats this statement at a number of other points in the judgment.
[11] A key part of the finding in Dayco is the fact that the vesting of retiree benefits can be limited by the parties through clear language in the 2011 Collective Agreement. This finding has been supported by arbitrators in a number of cases. In this regard, we were directed to Allen Industries Canada Ltd v. UAW Local 525 [1994] O.L.A.A. No. 368 and TRW Canada Ltd. and Thompson Products Employees’ Association 2012 Carswell Ont. 4903 (Kaplan), aff’d 2012 ONSC 6796.
[12] The Applicant argued that the language of 26.01(f) required the Respondent to provide and maintain retiree benefits. The Applicant also argued that the “Minimum Participation” provision did not provide the Respondent with the right to terminate retiree benefits, and that it was unreasonable for the Arbitrator to conclude that this “Minimum Participation” provision allowed for the termination of retiree benefits.
[13] I reject this argument for the following reasons:
(a) The Arbitrator clearly explains, at paras. 78 to 87 of her decision, the reasons for her conclusions on this point.
(b) The Arbitrator’s reasons clearly articulate a basis for concluding that the “Minimum Participation” provision permits the termination of benefit coverage for retirees. In particular, the Arbitrator notes that the “Minimum Participation” provision is a stand-alone provision incorporated into the Collective Agreement, and that it does not create any ambiguities in the overall language of the Benefits provision.
(c) The Arbitrator clearly sets out her reasons for finding that the “Minimum Participation” provisions applied to permit the termination of benefits even given the language in Article 26.01(f) that the Applicant relies upon.
[14] When all of these points are considered, it is clear that the Arbitrator’s decision is defensible in respect of the facts and the law. As a result, while I have sympathy for the impact of the Arbitrator’s decision on the retirees, I would dismiss the application for judicial review.
[15] On agreement of the parties, the costs in this matter are fixed at $8,000.00 inclusive of HST and disbursements.
___________________________ LEMAY J.
I agree
KITELEY J.
I agree
NORDHEIMER J.
Date of Reasons for Judgment: March 22, 2017
Date of Release: March 24, 2017
CITATION: United Steelworkers, Local 13292-01 v. Sensient Flavors Canada Inc., 2017 ONSC 1874
DIVISIONAL COURT FILE NO.: 553/16 DATE: 20170322
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
KITELEY, NORDHEIMER and LEMAY JJ.
BETWEEN:
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (United Steelworkers), Local 13292-01 Applicant
– and –
Sensient Flavors Canada Inc. and Marilyn Nairn Respondents
ORAL REASONS FOR JUDGMENT
LEMAY J.
Date of Reasons for Judgment: March 22, 2017
Date of Release: March 24, 2017