CITATION: Nova Chemicals (Canada) Limited v. Unifor Local 914, 2022 ONSC 5861
DIVISIONAL COURT FILE NO.: 043/22
DATE: 20221019
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: nova chemicals (canada) limited, Applicant
AND
Unifor local 914, Respondent
BEFORE: McWatt A.C.J.S.C., Swinton and J. McCarthy JJ.
COUNSEL: Frank Cesario and Gabrielle Lemoine, for the Applicant
Douglas Wray and Sukhmani Virdi, for the Respondent
HEARD at Toronto (by videoconference): October 13, 2022
ENDORSEMENT
Swinton J.:
[1] Nova Chemicals (Canada) Limited has brought an application for judicial review of an arbitration award of Matthew R. Wilson dated December 27, 2021. In this award, he held that the applicant had the authority to change the pension plan pursuant to article 27.01 of the collective agreement with the respondent Union. (The arbitrator erred in citing article 27.01, as the correct article is actually 21.01, but nothing turns on this error.) The arbitrator then concluded that the applicant was estopped from implementing the proposed changes that would freeze the Defined Benefits component (“DB Plan”) of the pension plan scheduled for December 31, 2021 until the expiry of the collective agreement in March 2023.
[2] The applicant submits that the determination respecting estoppel was unreasonable and should be quashed. For the reasons that follow, I would dismiss the application for judicial review, as the applicant has not demonstrated that the decision was unreasonable.
[3] The applicant argues that the award lacks coherency and rationality. More particularly, the applicant argues that the arbitrator unreasonably found that it had made a representation about the continuation of the DB Plan that was detrimentally relied upon by the Union.
[4] The applicant does not take issue with the test for estoppel set out by the arbitrator at para. 54 of the award:
that the other party to the collective agreement made a clear and unequivocal representation concerning the interpretation or application of the agreement;
that the representation was intended to and does in fact affect the legal relations between the parties to the agreement;
that it relied upon the representation by doing something, or foregoing the opportunity to do something, and that it would have acted otherwise but for the representation;
that its reliance is detrimental because the situation cannot be restored to what it was when the representation was made.
[5] The applicant argues that the arbitrator did not apply the test. I disagree. The arbitrator carefully considered the evidence before him and applied the elements of the test that he had set out correctly.
[6] The arbitrator found that there was a clear representation by the applicant in September 1999 to employees, including two witnesses for the Union, by a member of the applicant’s human resources staff. This was made at the time that the employees were being asked to opt to continue in the DB component of the Plan or to move to the Defined Contribution (“DC”) component. The Union witnesses testified that they were told that if they chose the DB Plan, they would stay in that Plan until they retired.
[7] The applicant takes issue with the finding that there was a representation, as any statement was made to employees and not to Union officers, and there was no indication that the person who made the statement was authorized to do so. In effect, the applicant seeks to have this court interfere with the arbitrator’s finding of fact.
[8] As the Supreme Court of Canada stated in Canada (Minister of Employment and Immigration) v. Vavilov, 2019 SCC 65 at para. 125:
It is trite law that the decision maker may assess and evaluate the evidence before it and that, absent exceptional circumstances, a reviewing court will not interfere with its factual findings. The reviewing court must refrain from “reweighing and reassessing the evidence considered by the decision maker” …
Here there was ample evidence to support the arbitrator’s conclusion that there was a representation by the applicant, and there is no basis for judicial intervention with respect to the finding of a representation.
[9] The applicant also takes issue with the finding that there was reliance on the representation to the Union’s detriment, arguing that these conclusions are illogical and unreasonable.
[10] Again, I disagree. The arbitrator carefully set out why he found there was detrimental reliance. For example, at para. 72, he stated:
The evidence leads me to conclude that Mr. Grunte, first in his capacity as an employee and then as the Unit Chair, came to rely on the company’s representation that the DB Plan would be maintained until the retirement of those individuals who had decided to remain in the DB Plan. He was the lead negotiator in the most recent round of collective bargaining and had no indication that his DB pension would be frozen or that he would be forced to participate in the DC pension. It is not necessary for me to deal with whether an estoppel can be established by a representation to employees (See the discussion in Ontario (Ministry of Labour)) since Mr. Grunte attended three rounds of collective bargaining as a member of the Union executive where the pension issue was never raised. It would be artificial to ignore Mr. Grunte’s employment history with the DB Plan – that is both his experience in the 1999 meeting and his reliance on the continuation of the DB Plan – simply because he was not part of the union executive at the time the promise to employees was made in 1999. The fact is that he made decisions on behalf of the union in the prior three rounds of collective bargaining and assumed, reasonably based on the promises made in the 1999 meeting as well as the continuation of the DB Plan, that there were no pending changes to the DB Plan in this current term of the collective agreement. I accept Mr. Grunte’s evidence that had the company raised the issue, the union would have pursued the issue more forcefully in collective bargaining.
[11] The arbitrator found that the Union relied on the 1999 representation to its detriment, as it lost the opportunity to negotiate protections around the DB Plan. He acknowledged that the Union did not grieve other changes to the pension plan, and it did not take steps in response to the applicant’s repeated assertions of its right to change the pension plan. However, he concluded that the Union did so because, given the representation, it did not think the DB Plan was in jeopardy. Similarly, the arbitrator accepted that the Union did not pursue proposals to amend the applicant’s right to change the pension plan because freezing the DB Plan was not within its contemplation. Deference is owed to the arbitrator’s findings of fact and his weighing and assessment of the evidence.
[12] As well, I agree with the Union’s submission that the detriment found was not the loss of an opportunity to bargain about changes to the pension plan generally; rather, it was the loss of the opportunity to bargain over the employer’s unilateral right to freeze the DB Plan prior to the affected employees’ retirements. As the arbitrator stated at para. 77:
I accept that the union relied on the company’s inaction, whether that be a promise from 1999 left undisturbed or silence at the bargaining table and did not pursue the issue. Consequently, the union lost the opportunity to negotiate protections around the DB plan for those employees still enrolled. The detriment is that its members will have their DB pension frozen and be forced into enrolling in the DC pension without the opportunity to address it in collective bargaining.
[13] Finally, the applicant argues that the arbitrator unreasonably relied on estoppel because there is an entire agreement clause in article 4.03 of the collective agreement. There is no merit to this argument. The arbitrator was applying the equitable doctrine of estoppel, as have many other arbitrators, in a situation where he found that the employer should not be permitted to insist on its strict legal rights because it would be unfair to do so, given the employer’s representation and the Union’s reliance on it.
[14] In my view, the arbitrator has clearly and logically explained why he applied the doctrine of estoppel, and his treatment of the evidence and findings of fact were reasonable. Accordingly, I would dismiss the application for judicial review.
[15] Costs to the Union are fixed at the agreed amount of $6,000.00.
Swinton J.
I agree _______________________________
McWatt A.C.J.S.C.
I agree _______________________________
J. McCarthy J.
Date: October 19, 2022