FINANCIAL SERVICES TRIBUNAL

2001 ONFST 11

Decision No. P0099-2000-1

Date: 2001/04/10

IN THE MATTER OF the Pension Benefits Act, R.S.O. 1990, C.p.8, as amended (the “Act”);

AND IN THE MATTER OF a refusal by the Superintendent of Financial Services (the “Superintendent”) to make an order in response to a complaint regarding the Brewers Retail Pension Plan for Bargaining Employees Registration Number 0336081 (the “Plan”);

AND IN THE MATTER OF a Hearing in accordance with subsection 89(8) of the Act;

BETWEEN:

UNITED FOOD AND COMMERCIAL WORKERS UNION LOCAL 375W represented by MR. PATRICK J. MOORE Applicant

-and-

SUPERINTENDENT OF FINANCIAL SERVICES (the “Superintendent”), BREWERS RETAIL INC., and UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION/UNITED BREWERS’ WAREHOUSING WORKERS’ PROVINCIAL BOARD (the “Union”) Respondents

BEFORE: Ms. Elizabeth Greville, Chair of the Panel and Member of the Tribunal Ms. Heather Gavin, Member of the Tribunal Mr. Kit Moore, Member of the Tribunal

APPEARANCES: For the Applicant: Mr. Thane Woodside Mr. Patrick Moore Mr. Jim Smith

For the Superintendent: Ms. Shemin Manji Ms. Deborah McPhail

For the Union: Mr. John Evans Mr. John Montgomery

For Brewers Retail Inc.: Mr. Dirk Van de Kamer

HEARING DATE: March 7, 2001 Toronto, Ontario

REASONS FOR DECISION

The Background

On February 24, 2000, the Applicant, now identified as United Food and Commercial Workers Local 375W represented by Mr. Patrick J. Moore, requested a hearing before the Tribunal, under section 89 of the Act. This request arose as a result of the Superintendent’s refusal to make an order requested by the Applicant regarding the constitution of the Plan’s advisory committee, as provided for in the Act.

At a pre-hearing conference held May 17, 2000, it was agreed that the Tribunal would hear a pre-hearing motion regarding its jurisdiction to hear this matter. In a second pre-hearing held by telephone conference on November 16, 2000, it was agreed that the Tribunal would first rule on the need for separate notice of the jurisdictional hearing to be sent to former members of the Plan. Following written submissions, the parties argued the notice issue at the hearing held March 7, 2001.

The Notice Issue

The Tribunal’s Rules governing its proceedings include a requirement that the Tribunal provide written notice of hearings. Rule 22.02 of the Tribunal’s Interim Rules of Practice and Procedure for Proceedings Before the Financial Services Tribunal (the “Interim Rules”) reads as follows:

“The Tribunal shall provide written Notice of the Hearing to the parties and others as required by law, and as the Tribunal considers necessary.”

The issue to be decided at this hearing is whether separate notice of the hearing on the Tribunal’s jurisdiction needs to be provided to former members of the Plan.

The Facts

1At the pre-hearing conference, the Superintendent raised the issue of notice to former members, based on the Superintendent’s understanding that the Union represented only active members of the Plan. This issue was not resolved during the pre-hearing conferences.

2Following the pre-hearing conferences, the Tribunal received a letter dated January 26, 2001 from the Union, including the following statements:

Our client confirms that in the present proceeding it acts on behalf of and represents all active and non-active [members] (deferred vested and retirees/pensioners).

Our client confirms that in addition to any statutory obligation, the Union acknowledges that it has a fiduciary duty to represent all members and beneficiaries of the pension plan.

3The Tribunal received a letter dated February 7, 2001 from the Applicant, confirming receipt of the Union’s letter dated January 26, 2001, and stating the Applicant’s agreement that the Union “has a fiduciary duty to represent the interests of all members and beneficiaries of the pension plan including deferred vested and retired members”. In its letter, the Applicant also stated its position that

the acknowledgement by the Union “that it has fiduciary duties vis-à-vis the deferred vested and retirees/pensioners does not obviate the need to ensure that adequate notice of the jurisdictional hearing is provided to the members of these groups”.

4The Tribunal also received a letter dated February 19, 2001 from the Superintendent acknowledging that the Union “is now stating that it represents all active and non-active or former members of the Plan in this proceeding”. This letter included a statement by the Superintendent agreeing “that no additional notice to former or non-active members is warranted in the circumstances”.

The Arguments

The Applicant argued that:

(a) the Tribunal is responsible for ensuring that adequate notice is provided to any person who may have an interest in the Tribunal’s proceedings;

(b) the Tribunal must satisfy itself that notice has been served properly, in its manner, its scope, and its content;

(c) differences between active and former members, and their differing relationship to the Union, lead to inherent conflicts of interest between these two groups of members, as recognized by the Supreme Court in Dayco (Canada) Ltd. vs National Automobile, Aerospace and Agricultural Implement Workers Union of Canada (CAW-Canada) 1993 144 (SCC), [1993] 2 S.C.R. 230 (the “Dayco Decision”);

(d) despite the Union’s declaration that it has a fiduciary duty to represent the interests of all members and beneficiaries, it is not enough for the Tribunal to rely on the Union to represent the differing interests of active and former members; and

(e) the only way to ensure that former members have been properly notified is for the Tribunal to order that proper notice be given to former members.

The Superintendent, who had originally raised the issue of notice to former members, argued that the Union’s statement contained in its letter of January 26, 2001, that the Union represents all members of the Plan in this proceeding, meant separate notice to former members is not warranted in the circumstances of this case. In the Superintendent’s view, the Act contemplates a trade union representing former members of a pension plan, and provides no mechanism for the Tribunal to look behind the Union’s statement that it represents all members of the Plan.

The Union stated its position that it represents all active and former members of the Plan, with the result that separate notice of the Tribunal’s proceedings need not be provided to any member or group of members. The Union submitted that it has a fiduciary obligation to represent these former members, as supported by the Supreme Court’s views expressed in the Dayco Decision, and that failure to consider the interests of these members might form the basis of a claim against the Union for a breach of that fiduciary duty. The Union also noted that it routinely represents former members, for example through collectively bargained improvements for retired members.

The Respondent employer, Brewers’ Retail Inc., supported the positions taken by the Union in this matter, noting that the employer has always understood that the Union represents all active and former members.

The Decision

In reaching its decision, the Tribunal panel considered the parties’ correspondence and submissions, in the light of its responsibility under Interim Rule 22.02 to provide notice “as the Tribunal considers necessary”. Of particular significance was the Union’s letter dated January 26, 2001, stating that the Union represents all members in this proceeding, and that the Union acknowledges its fiduciary duty to do so. The panel also noted that the employer, Brewers’ Retail Inc., has always understood the Union to be acting on behalf of all members.

Despite these statements by the Union and Brewers’ Retail Inc., the Applicant has argued that inherent conflicts of interest between active members and former members require separate notice of the Tribunal’s proceedings to be given to former members. The panel has considered this argument, but takes the view that any such conflicts of interest would be a matter for the Union to take into account in its representation of the Plan members. The panel agrees with the position of the Superintendent, that the Act contains no mechanism for the Tribunal to look behind the Union’s statement that it represents all members of the Plan.

In this matter, the panel has determined that the Tribunal will consider adequate notice to have been served if notice is provided, in accordance with the Act and Regulation, to the existing parties in these proceedings - the Union, the Applicant, Brewers’ Retail Inc., and the Superintendent. Given this decision, the panel found it unnecessary to decide the other issues argued in the hearing, such as costs and form of notice.

The panel declines to make any additional notice requirements for former members of the Plan, in the circumstances of this case.