CAW v. Kitchener Frame Ltd., 2010 ONSC 3890
CITATION: CAW v. Kitchener Frame Ltd., 2010 ONSC 3890
DIVISIONAL COURT FILE NO.: 370/09
DATE: 20100709
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Reilly, Molloy and Dambrot JJ.
BETWEEN:
NATIONAL AUTOMOBILE, AEROSPACE, TRANSPORTATION AND GENERAL WORKERS’ UNION OF CANADA (CAW-CANADA) and its LOCAL 1451
Applicant
– and –
KITCHENER FRAME LTD. and PAULA KNOPF
Respondents
Lewis Gottheil, for the Applicant
Michael Watson and Edward Majewski, for the Respondent Kitchener Frame
HEARD at Toronto: February 26, 2010 and in writing
MOLLOY J.:
REASONS FOR DECISION
A. INTRODUCTION
[1] The applicant union seeks judicial review of an arbitration award made by Arbitrator Paula Knopf on June 22, 2009, dismissing a union grievance seeking severance pay for several hundred employees. The central issue is whether those employees are still eligible for severance pay under the Employment Standards Act, 2000[^1] (“ESA 2000”), notwithstanding the value of the pension benefits they received upon termination. The Arbitrator ruled they are not eligible for severance pay in addition to their pensions.
[2] The facts are not in dispute. This case turns entirely on the interpretation of the words “pension benefit” in the regulations under the ESA 2000.
B. BACKGROUND
[3] Until it went out of business on April 22, 2009, Kitchener Frame Ltd. was a manufacturer of automobile parts. Kitchener Frame knew the end was approaching. It issued a notice of plant closure on April 22, 2008 and by July 31, 2008 had started issuing termination notices to its employees. These were issued in a gradual process, as provided for in the collective agreement. By mid January 2009, the only employees left were those engaged in the process of closing down operations.
[4] There were two collective bargaining units at Kitchener Frame; one for office workers and one for plant workers. The applicant CAW-Canada (“the Union”) represented both.
[5] Kitchener Frame had a generous pension plan designed to encourage workers to leave employment early with some income security, thereby permitting younger workers to work more regularly without being affected by indefinite layoffs. There were a number of routes to retirement under the pension plan, and the plan specifically contemplated early retirement eligibility upon plant closure.
[6] Many terminated employees were also eligible for a supplementary pension payment designed to bring the pension payment up to the equivalent of what the person would later receive pursuant to the public Old Age Security program. This supplementary benefit is payable only to the age of 65, at which point the Old Age Security starts.
[7] In addition, some employees were entitled to a special early retirement allowance payable up to the age of 60, designed to generate the same level of pension benefit as employees who were already 60 years old.
[8] Kitchener Frame and the Union had a supplemental agreement (in addition to the collective agreement), which included an income security program. That agreement provided for various pension benefits upon plant closure. It also provided for voluntary termination of employment payments (“VTEP”) for employees with more than five years of service. The agreement stipulated that employees entitled to receive a pension or retirement benefit were not eligible for VTEP.
C. LEGISLATIVE SCHEME
Governing Legislation — ESA 2000
[9] Upon closing its plant, Kitchener Frame was subject to the severance pay requirements under s. 64 of the ESA 2000. However, those provisions are minimum standards only. The parties agree that the lump sum VTEP requirement in the agreement between Kitchener Frame and the Union exceeds the payment required under the Act. Therefore, it is clear that employees who received a VTEP were not eligible for severance pay under the ESA 2000.
[10] The ESA 2000 also exempts employers from providing severance pay to certain employees. For purposes of this case, the critical provision, which is in s. 9(1) of the Regulation,[^2] exempts:
An employee who, on having his or her employment severed, retires and receives an actuarially unreduced pension benefit that reflects any service credits which the employee, had the employment not been severed, would have been expected to have earned in the normal course of events for purposes of the pension plan.
[11] The issue in this case is whether the Kitchener Frame employees who received pension benefits upon plant closure come within the terms of this exemption. If so, they are not eligible for severance pay under the ESA 2000.
Previous Version of the Employment Standards Act
[12] Under the previous version of the legislation,[^3] there was also an exemption for employees receiving pension benefits, but the provisions are different both structurally and in the language used. Section 58(2) of that Act provided for the payment of severance pay by certain employers upon the discontinuance of the business (similar to s. 64 of the current legislation). In determining the application of that provision, s. 58(5)(g) specifies that it applies to “an employee who, upon having his or her employment terminated, retires and is entitled to receive a reduced pension benefit.” However, s. 58(6)(d) then states that the severance pay entitlement does not apply to “an employee who, upon having his or her employment terminated, retires and receives an actuarially unreduced pension benefit.”
[13] Thus under that legislation, there is a specific entitlement to severance pay for terminated employees who receive a “reduced pension,” but that is stipulated to not include a person who receives an “actuarially unreduced” pension.
Other Legislative Provisions
[14] “Pension benefit” is not a defined term in the ESA 2000. It is, however, defined in s. 1 of the Pension Benefits Act[^4] as “the aggregate monthly, annual or other periodic amounts payable [under the pension plan] to a member or former member… during the lifetime of the member.”
[15] Section 40(2) of the Pension Benefits Act provides:
An ancillary benefit for which a member has met all eligibility requirements under the pension plan necessary to exercise the right to receive payment of the benefit shall be included in calculating the member’s pension benefit of the commuted value of the pension benefits. [Emphasis added.]
[16] “Ancillary benefits” is a broad concept defined to include such things as: “bridging benefits” (periodic payments made on a temporary basis to bridge the period from retirement to the point when the person is eligible for Old Age Security); other supplemental benefits payable for a temporary period; and early retirement and postponed retirement options and benefits.[^5]
Useful Definitions
[17] Before proceeding further, it is useful to bear in mind the difference between the terms “commuted value” and “actuarially reduced pension.”
[18] The “commuted value” of a pension is its lump sum present value. It is the amount of money that would have to be invested today to generate the income to be paid over the life of the pension.
[19] An “actuarially reduced” pension is one in which the benefit payments are reduced because they are being paid early. The person taking early retirement essentially receives a percentage of the total retirement benefit based on how early the benefits are being taken. This reflects the fact that the actuarial reserves for the pension plan will not earn interest for as long a period as would be the case if no benefits were taken until the normal retirement age. The pension benefits received by Kitchener Frame employees upon plant closure were not actuarially reduced.
C. THE POSITION OF THE PARTIES
[20] Upon plant closure, Kitchener Frame took the position that all employees that became eligible for pensions fell within the exemption in the Regulation and no severance pay was due. The Union took the position that on a proper valuation of those pension benefits, the exemption did not apply and those employees were entitled to severance.
[21] The essential difference between the two positions is that Kitchener Frame argues that the comparison under the exemption provision is based upon the commuted value of the pension and that for this purpose the supplementary and ancillary benefits are included within the pension benefit value. The Union argues that commuted values cannot be used and that only the basic pension benefit is included in the value calculation.
D. THE DECISION OF THE ARBITRATOR
[22] Arbitrator Knopf found in favour of the employer. The first 52 paragraphs of the award contain the evidence, the statutory framework and findings of fact. None of these are challenged. The reasons for the decision reached are set out at paragraphs 93-110.
[23] At the outset of her reasons for decision, Arbitrator Knopf recognized that under the previous legislative scheme, clear arbitral jurisprudence established that in valuing pension benefits: the use of commuted value was inappropriate in determining whether a pension benefit had been reduced; ancillary or bridging benefits should not be considered; and “normal retirement” age was not a measure of reasonable expectations that might be truncated by a plant closure. She did not accept the employer’s submission that these cases had been wrongly decided. However, she held that they must be looked at afresh because of changes to the legislation.
[24] The Arbitrator also noted that care must be exercised in considering previous jurisprudence that applied the old legislation in the context of a particular pension plan and particular employees.
[25] Arbitrator Knopf concluded that the changes in the ESA 2000 were such that the old case law no longer applied. In particular, she looked at the addition of the condition that, to qualify for the exemption, the actuarially unreduced pension must reflect “any service credits which the employee, had the employment not been severed, would have earned in the normal course of events for the purposes of the pension plan.” She held that this provision was designed to protect benefits employees would have earned in the normal course of events for purposes of the pension plan. This, she reasoned, must refer to an employee’s normal expectation for accumulating service credits and requires some calculation of how plant closure might prejudice the value of their pension plan. She held that this comparative analysis should take into account both the basic pension entitlements and other components or benefits to which the employee is eligible upon termination, because “to do otherwise would be to ignore the facts and specifics of the pension plan in this case and to ignore the real effect of the termination on the affected employees.”[^6]
[26] Given the change in wording of the legislation, the Arbitrator held that the term “pension benefit” should be “considered in light of what the person would have expected to earn in the normal course ‘for purpose of the pension plan.’”[^7] She took into account s. 40 of the Pension Benefits Act to assist in the application and interpretation of the ESA 2000 and Regulations and found support in the Pension Benefits Act for including bridging and ancillary benefits in calculating the value of the pension benefit. She determined that the two statutes should be read together and concluded, “[t]herefore, it is difficult to see how the ancillary benefits achieved in this pension plan and the commuted value of the pension benefit can be ignored in the analysis applicable to this case.”[^8]
[27] The Arbitrator reasoned that the language in s. 9(1) of the Regulation with respect to a pension that “reflects service credits” an employee would have earned in the normal course must mean something. Otherwise, it would not have been added to the statutory language. Everyone who is terminated, by definition, has their opportunity to earn service credits cut short. If, as argued by the Union, anyone whose service credits are cut short is entitled to severance pay, then the words in the exemption would never apply. This, she concluded, supported using a pension valuation that would include benefits designed to compensate for lost service credits.
[28] Having interpreted “pension benefit” in the ESA 2000 in this manner, the Arbitrator went on to identify the issue to be determined. She ruled that she must first consider the effect of the plant closure on pension benefits, including bridging and supplemental benefits for employees who became eligible on plant closure and then compare that result to the pension benefits they would have expected to have earned in the normal course if the plant had not closed. She then noted that the actuaries who testified for both parties did not disagree on what such a comparison would yield. If bridging and ancillary benefits are taken into account, employee pension benefits are not prejudiced; if bridging and ancillary benefits are not part of the equation, the opposite conclusion would be reached.[^9]
[29] As part of her analysis on this point, the Arbitrator took into account the intention of this particular pension plan as negotiated between the parties. She held that the pension plan “was designed to make up for the losses of future service credits or pension accrual by imposing significant financial responsibilities upon the employer in the event of a plant closure.” She referred in this regard to the plan being “front end loaded” in the sense that it “grants ‘up front’ benefits to make up for future potential being taken away from those forced to retire.” Referring to this front end loading, the Arbitrator then concluded:
The Employment Standards Act and Regulations are designed to provide severance pay to employees who do not have those benefits. It also provides exemption from liability to severance pay to employers who have accepted the financial responsibility of providing equal or better benefits to their employees. The affected employees in this case are receiving benefits equal to or greater than what they would have received if the plant had not closed. This is clearly the result of the Union’s foresight and bargaining acumen, securing for its members a very valuable asset.[^10]
[30] The Arbitrator concluded by noting that the bridging and supplemental benefits triggered under the plan in the event of plant closure were put in place for the very purpose of making up for the loss of future service credits. The actuarial evidence confirmed that this purpose was in fact accomplished and that the benefits received exceeded what the employees would have obtained as severance pay. (There was one category of employee for which this conclusion did not apply, but the employer had conceded that severance pay was payable to employees in that category.) She observed, “[i]n a sense the Union already ‘won’ this ‘fight’ for its members at the bargaining table by achieving these valuable pension entitlements.”[^11]
E. STANDARD OF REVIEW
[31] It is well-settled law that a decision of a labour arbitrator within her expertise is entitled to the highest level of deference accorded to administrative tribunals and is therefore reviewable on a reasonableness standard.[^12]
[32] That general proposition does not apply if an arbitrator is interpreting a statute outside her area of expertise or determining pure questions of law on a point of general application. On such questions, a correctness standard applies.[^13]
[33] In this case, Kitchener Frame submits that the standard of reasonableness applies to all aspects of the Arbitrator’s decision. The Union argues that Arbitrator Knopf is required to be correct in her interpretation of the Pension Benefits Act, which the Union characterizes as a statute of general and public importance outside the specialized expertise of labour arbitrators. Apart from that issue, the Union acknowledges that the appropriate standard of review is reasonableness.
[34] Section 48(12)(j) of the Labour Relations Act[^14] gives labour arbitrators the power “to interpret and apply human rights and other employment-related statutes.” The expertise of labour arbitrators is therefore generally accepted to extend to all employment-related legislation. In London Machinery[^15] the Ontario Court of Appeal held that a deferential standard is required when a labour arbitrator is involved in interpreting an external statute that is “intimately connected with the mandate of the tribunal and is encountered frequently as a result.”[^16] At issue in London Machinery was a labour arbitrator’s interpretation of the termination pay provisions of Regulation 288/01 under the ESA 2000 (the same regulation that was interpreted by Arbitrator Knopf in this case). The Court of Appeal was unanimous in applying the highest standard of deference to the arbitrator’s decision (at that time, patent unreasonableness, now since Dunsmuir, reasonableness). Laskin J.A. held at para. 109:
. . . The ESA 2000 may be a new Act, but the interpretation of employment standards legislation has always been intimately connected to a labour arbitrator’s mandate, and labour arbitrators encounter this legislation often in resolving grievances under a collective agreement. Indeed, although the arbitrator was required to interpret the ESA 2000 as well as the collective agreement, what was ultimately at stake was whether the grievor was entitled to termination pay – a pure labour relations or employment matter. Moreover, s. 99 of the ESA 2000 makes the Act a part of the collective agreement so that any contravention of the statute is enforceable against the employer. This incorporation under s. 99 serves to strengthen the case for deference. Thus, in my view, the pragmatic and functional approach calls for the arbitrator’s decision to be reviewed against a standard of patent unreasonableness.
[35] Cronk J.A., writing for the majority in London Machinery, applied a similar analysis on the standard of review issue, as follows (at para. 37):
The arbitrator’s decision in this case concerned the interpretation of the collective agreement between the parties and various provisions of the [ESA 2000] and the Regulation. The legislation in issue lies at the core of the work of labour arbitrators in the employment law sector. It is both centrally related to their expertise and intimately connected to their mandate. Moreover, the interpretive issues in play here have important implications in the labour relations and employment law domains. They arise in the context of a powerful, although not full, privative clause under the [Labour Relations Act] and employment standards legislation that itself invites strong deference to the arbitral process. These factors militate in favour of a high degree of deference to the arbitrator’s award.
[36] In Tembec Enterprises Inc. v. United Steel Workers IWA Council 1-1000[^17] a labour arbitrator had to determine whether an employee had been terminated, whether he was entitled to severance pay under s. 64 of the ESA 2000, and whether he fell within the exemption under s. 9 of the Regulation because the employment contract had become frustrated or impossible to perform. On judicial review, the Divisional Court held that a reasonableness standard of review applied to all issues, including the interpretation of the ESA 2000 and its Regulations. In coming to that conclusion, Swinton J. described the ESA 2000 at para. 24 as a statute “with which arbitrators are particularly familiar and within their statutory mandate to apply.” It is worth noting that the issue before Arbitrator Knopf here also involved the interpretation of a severance pay exemption under s. 9(1) of the same Regulation.
[37] Based on these authorities, it seems clear that a reasonableness standard applies to an arbitrator’s interpretation of the ESA 2000. The question then is whether the Arbitrator’s reference to and interpretation of the Pension Benefits Act attracts the less deferential standard of correctness. I find it does not, for three reasons.
[38] First, Arbitrator Knopf’s interpretation of the Pension Benefits Act was not a stand-alone analysis. Rather, she referred to certain provisions of that Act only to assist in the interpretation of the ESA 2000. The central issue she had to determine was what “pension benefit” meant in that context. As such, she was not determining a broad question of pension law with general application, but rather was interpreting similar language used within a statute (the ESA 2000) that was squarely within her expertise.
[39] Second, in addition to considering the Pension Benefits Act provisions to assist her interpretation, the Arbitrator considered the intention of the parties in drafting the pension plan and in particular the intention as to what benefits would be triggered upon plant closure. The latter consideration is a matter squarely within an arbitrator’s core area of expertise. However, the two considerations are inter-connected, making it difficult to apply one standard of review for one aspect, and a different standard of review for the other.
[40] Third, in any event, I consider the particular terms of the Pension Benefits Act to which the Arbitrator made reference to be employment-related and intimately connected to the arbitrator’s mandate. These concepts of pensions, benefits, severance pay, and other employment rights upon plant closure are familiar to labour arbitrators as part of their normal work. Arbitral jurisprudence confirms that labour arbitrators are routinely called upon to decide pension-related disputes and have found the Pension Benefits Act to be an employment-related statute within the meaning of s. 48(12)(j) of the Labour Relations Act.[^18]
[41] Accordingly, I conclude that the deferential standard of reasonableness applies to all aspects of the arbitrator’s decision under review in this application.
[42] In coming to that conclusion I have not ignored the decision of the Ontario Court of Appeal in Trent University Faculty Assn. v. Trent University.[^19] In that case, the issue before the arbitrator was whether the university was entitled to take a contribution holiday under its contributory pension plan by using the plan surplus to fund its annual contributions. The majority of the Court of Appeal held that this was not an issue within the special expertise of an arbitrator and that the arbitrator’s decision was therefore required to be correct. Finlayson J.A., in dissent, would have applied a standard of patent unreasonableness.
[43] In my view, the decision in Trent University is distinguishable because of the nature of the issue involved, the sole issue before the arbitrator being the interpretation of rights under the pension plan. Laskin J.A. (for the majority) held at para. 14 that “contribution holidays and similar issues of pension law raise a hybrid of trust law and contract law questions under the umbrella of a statutory regime entirely outside labour relations legislation.” As such, he found that a court was as well suited and perhaps better suited to decide this issue. The nature of that issue is to be contrasted with the issue here, which involved the application of a definition section in the Pension Benefits Act only as an aid to the interpretation of a statutory provision in the ESA 2000, a statute which is squarely within the arbitrator’s mandate and upon which the standard of review is clearly reasonableness. I therefore do not find the decision in Trent University to be determinative of the standard of review to be applied in this case.
F. ANALYSIS
The Nature of the Reasonableness Standard
[44] The reasonableness standard is rooted in recognition of the special expertise of labour arbitrators and respect for the legislative choice to have matters within that area of expertise decided by specialized arbitrators rather than courts. That does not mean that decisions of arbitrators are immune from judicial review. However, it is not the role of the court to substitute its view of what is reasonable if the labour arbitrator’s decision is a rational and supportable one. As stated by the Supreme Court of Canada in Dunsmuir at para. 47:
Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.
[45] The question for me in this case is not what I consider to be a reasonable result, but rather whether the decision of Arbitrator Knopf can be said to fall within a range of acceptable and rational conclusions. In my view, the Arbitrator’s decision is reasonable. It is logical, articulate and rational, both in its process of reasoning and in its result.
Was the decision not to follow precedent reasonable?
[46] Arbitrator Knopf demonstrated a thorough understanding of the prior arbitral jurisprudence, much of which had been approved by the courts on judicial review. She did not simply disagree with or refuse to follow this line of authorities. Rather, she provided rational reasons for why those cases were no longer applicable. She noted that much depended on the application of particular facts within the context of particular legislation. However, her primary reason for considering the issues afresh was the change in the applicable legislative provisions. It was eminently reasonable for her to take that approach.
[47] Indeed, in Ahdoulrab v. Ontario (Labour Relations Board)[^20] the Ontario Court of Appeal referred to the fact that the ESA had been “substantially rewritten” in 2000 and advocated caution in relying upon referees’ decisions prior to those significant changes. This is precisely the approach taken by Arbitrator Knopf. She analyzed the prior decisions and then considered whether the changes to the legislation warranted departing from them.
[48] The leading authority under the prior legislation is the 1987 decision of Referee Swan in Re Goodyear Canada Inc.[^21] That decision was upheld by the Ontario Divisional Court[^22] and has been followed by labour arbitrators ever since. The Divisional Court decision was delivered orally and is only a few sentences long. Essentially, the Divisional Court said that Referee Swan’s interpretation was correct. It is therefore necessary to refer to Referee Swan’s reasons to understand the basis for the decision. Referee Swan commented on the awkward language used in the version of the Employment Standards Act then in force. In particular, he noted that s. 40a(2)(g) (“the entitlement provision”) provided that severance pay was payable to terminated employees who retired and received a “reduced pension benefit,” whereas s. 40a (3)(d) (“the exemption provision”) stated that severance pay was not payable to terminated employees who retired and received “an actuarially unreduced pension.” He considered why the legislation would use the term “reduced pension” in the entitlement provision and the term “actuarially unreduced pension” in the exemption provision and determined that this must be presumed to be deliberate. At p. 14 of his reasons, he described this difference as being significant and stated, “[t]he effect of that difference in language is the central theme of the dispute between the parties.”
[49] Referee Swan concluded that in order to give meaning to the distinction in these provisions, it was necessary to read the entitlement provision as applying to employees whose pensions were reduced “actuarially or otherwise.” It was this interpretation that then led him to conclude that the loss of the opportunity to choose the time of one’s retirement and to continue to accrue credited service constituted a reduced pension and entitled an employee to severance pay.
[50] Thus, the ultimate conclusion in the case was directly linked to the unusual distinction in wording as between the entitlement provision and the exemption provision in the legislation. That distinction is no longer in the ESA 2000 and Regulation. Furthermore, the exemption provision under the new legislation refers not only to an “actuarially unreduced pension,” it adds the modifier “that reflects any service credits which the employee, had the employment not been severed, would have been expected to have earned in the normal course of events for the purposes of the pension plan.”
[51] I agree with Arbitrator Knopf’s conclusion that the language used in the new legislation is significantly different. Given the extent to which the prior case law turned upon the particular wording of the legislation in place at the time, it was reasonable for the Arbitrator to consider the matter before her afresh and to make her decision based on the application of the new legislation to the pension plan in this case, unrestricted by the case law interpreting the old legislation.
Was the interpretation of “pension benefit” as including supplementary benefits reasonable?
[52] Arbitrator Knopf concluded that in determining whether the employees were entitled to severance pay she should determine whether the total pension benefits they received compensated them for the loss of service credits they could have earned in the normal course if the plant had not closed. She decided that this required including the bridging benefits and other supplementary benefits in the valuation of the pension benefits received. In coming to that conclusion she had regard to the intention of the parties in the negotiation of the terms of the pension plan, the purpose of the legislation, and the language used in the particular exemption provision. All of those factors pointed towards including the ancillary benefits. The Arbitrator also considered how the term “pension benefits” is used in the Pension Benefits Act and concluded that s. 40(2) of that Act also supported including ancillary benefits when determining the true value of a pension.
[53] In my view, the conclusion reached by the Arbitrator on this issue is reasonable. Her reasoning process is transparent and intelligible. Her conclusion is rational and supported by relevant factors. Her interpretation of the Pension Benefits Act provision is also a reasonable construction of it and it was reasonable to have applied that interpretation to assist in understanding the use of the same language in the ESA 2000 Regulation. Her conclusion is consistent with logic, as well as with the purpose of the legislation, the statutory language used, and the intention of the parties in negotiating the benefits they did. I see no basis upon which to intervene.
[54] I do not agree with the submission of the applicant Union that the interpretation given to the term “pension benefit” by the Divisional Court in Baxter v. Ontario (Superintendent of Financial Services[^23] is determinative of the appropriate interpretation of those same words in the ESA 2000. As was noted by the Arbitrator, the issue in Baxter was the impact of merger of two pension plans and it was necessary to value the plans for that purpose. In that case, there was no basis for including ancillary and bridging benefits; they simply were not relevant. The analysis in that case is therefore of no assistance in interpreting the ESA 2000.
Was the use of commuted values reasonable?
[55] The simple answer to this question is that there is no reason not to use commuted value in order to compare the value of one pension benefit to another. It is standard accounting and actuarial practice to do so.
[56] The Arbitrator correctly observed that the issue of whether to use commuted value was not delved into in the Goodyear case because it made no difference to the result. Those cases are therefore not authority for the proposition that commuted values should not be used in this analysis.
[57] Both actuaries who testified at the hearing, one for the employer and one for the Union, used commuted values in comparing the value of the pension benefits in various scenarios. The Arbitrator noted (at para. 45 of her decision) that the actuary who gave expert evidence for the employer testified that “proper accounting principles demand that one take into account the ‘commuted value’ of the pension benefits if one is undertaking a comparison.”
[58] Accordingly, I consider it reasonable for the Arbitrator to refer to commuted values in order to compare the pension benefits employees would receive on plant closure to what they would receive in the “normal course” and to therefore determine if they had been prejudiced by the plant closure.
G. CONCLUSION
[59] In my view, the decision of Arbitrator Knopf is a thoughtful analysis of the prior and current legislative regimes as they apply to the particular pension plan and employees here. Her decision is well-reasoned and articulate. It is entitled to deference. There is no basis upon which it could be said to be unreasonable and no basis for this court to intervene.
[60] I would therefore dismiss this application.
[61] If costs cannot be agreed upon by the parties, written submissions may be addressed to the court within 30 days of the release of this decision.
MOLLOY J.
I agree:
REILLY J.
I agree:
DAMBROT J.
Released: July 9, 2010
CITATION: CAW v. Kitchener Frame Ltd., 2010 ONSC 3890
DIVISIONAL COURT FILE NO.: 370/09
DATE: 20100709
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Reilly, Molloy and Dambrot JJ.
BETWEEN:
NATIONAL AUTOMOBILE, AEROSPACE, TRANSPORTATION AND GENERAL WORKERS’ UNION OF CANADA (CAW-CANADA) and its LOCAL 1451
Applicant
- and –
KITCHENER FRAME LTD. and PAULA KNOPF
Respondents
REASONS FOR JUDGMENT
Molloy J.
Released: July 9, 2010
[^1]: Employment Standards Act, 2000, S.O. 2000, c. 41 [^2]: O.R. 288/01, s. 9(1) at para. 3 [^3]: Employment Standards Act, R.S.O. 1990, c. E.14 [^4]: Pension Benefits Act, R.S.O. 1990, c. P.8 [^5]: Pension Benefits Act, s. 40(1) [^6]: Reasons of the Arbitrator at para. 105 [^7]: Reasons of the Arbitrator at para. 104 (emphasis in original) [^8]: Ibid [^9]: Reasons of the Arbitrator at paras. 106-107 [^10]: Reasons of the Arbitrator at para. 107 [^11]: Reasons of the Arbitrator at paras. 109-110. [^12]: Dunsmuir v, New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190,at para. 54; Imperial Oil Ltd. v. Communications, Energy and Paperworkers Union of Canada, Local 900, 2009 ONCA 420, 249 O.A.C. 270 at para. 26; Maystar General Contractors Inc. v. International Union of Painters and Allied Trades, Local 2008 ONCA 265, 1819, 90 O.R. (3d) 451 (C.A.) at paras. 42-43 [^13]: Dunsmuir at paras. 54 and 60 [^14]: Labour Relations Act, 1995, S.O. 1995, c. 1, Sch.A [^15]: C.A.W., Local No. 27 v. London Machinery Inc. (2006), 2006 8711 (ON CA), 264 D.L.R. (4th) 428 (Ont.C.A.) [^16]: Ibid at paras. 106 and 108, citing Toronto Board of Education v. Ontario Secondary School Teachers' Federation, District 15, 1997 378 (SCC), [1997] 1 S.C.R. 487 and Toronto Catholic District School Board v. Ontario English Catholic Teachers’ Assn. (2001), 55 O.R. (3d) 727 (C.A.). [^17]: 2009 30451 (Ont. Div. Ct.) [^18]: Great Lakes Power Ltd. and C.U.P.E. Loc. 3033, Re, [1995] O.L.A.A. No. 55 at paras. 20-22 (Ontario Labour Arbitration); B.F. Goodridge v. United Steelworkers of America (Pension Grievance), [2007] O.L.A.A. No. 352 at paras. 1, 71 and 87 (Ontario Labour Arbitration) [^19]: (1997), 1997 1067 (ON CA), 150 D.L.R. (4th) 1 (Ont. C.A.) [^20]: 2009 ONCA 491, 95 O.R. (3d) 641 [^21]: E.S.B. File No. 033417 [^22]: Goodyear Canada Inc. v. United Rubber, Cork, Linoleum and Plastic Workers of America and Kenneth P. Swan, (Ont. Div. Ct. File 73/89, unreported, November 22, 1989) [^23]: 2004 45494 (ON SCDC), 192 O.A.C. 293, [2004] O.J. No. 4909 (Div. Ct.)