Sunday, December 11, 2011

Summaries of British Columbia Arbitration Awards issued in October

The following summaries are provided by Diane MacLean.  For ease of reference I have added the links to CanLii and suggested why you might want to read them:

The first, Summit Logistics Inc v. Retail Wholesale Union, Local 580, a decision by Arbitrator Mark is a good example of why it is so very important for both parties to a collective agreement to be very clear about what they have agreed to

Date: October 3, 2011

Arbitrator: Mark J. Brown
Grievance: Severance/Retirement Policy (grievance dismissed)


This arbitration was about whether an employee can receive both severance and post-retirement benefits upon a plant closure.

The employer provided distribution services for Canada Safeway. In August 2010, Canada Safeway awarded its distribution services contract to competitor of the employer and the employer announced that it would be closing effective February 28, 2011. The employer then provided notice of termination to the bargaining unit employees by one of three letters reflecting three possible termination dates. The union and the employer then took part in discussions as provided for under s. 54 of the Labour Relations Code. The union filed three grievances claiming: a) special severance; b) for employees taking early retirement, both severance pay and post-retirement benefits (“Sev/Rev” grievance); and c) vested retirement benefits. The s. 54 discussions resulted in two agreements, one of which was referred to as the “Stand-Alone Agreement” (SAA).

The “Sev/Rev” grievance was initially heard in December 2010 and resulted in an award finding the following: a) that the collective agreement did not confer an entitlement to both severance and post-retirement benefits upon a closure and b) that the SAA itself conferred an entitlement to both severance and post-retirement benefits for employees taking early retirement in the context of a closure.

The employer applied to the B.C. Labour Relations Board for a review of this decision under S. 99 and it found that the arbitrator had denied the employer a fair hearing. The grievance was remitted back to the arbitrator to determine whether he had the jurisdiction to determine whether the SAA conferred the benefits in issue and, if so, the proper interpretation of the agreement following a hearing and argument. The employer also applied for a reconsideration of the S. 99 decision which upheld the S. 99 decision. The arbitrator considered these issues and found that the interpretation of the SAA was not within the scope of the Sev/Rev grievance so he could not make a finding on whether that agreement created an entitlement to both severance and post retirement benefits. Then, the union filed this present grievance under the SAA alleging that the employer’s failure to pay both severance pay and post-retirement benefits was a breach of the “Stand-Alone Agreement”.

In addition to the documents that constituted the collective agreement, two representatives of the parties, who had been present when the SAA was negotiated, testified at the arbitration. The union representative testified that the dual entitlement issue had been raised early in the discussions. He also testified that after the SAA had been signed, he phoned the employer representative stating that he would be telling people that the SAA conferred retiree benefits (not sure if the arbitrator actually meant severance pay) to all employees and if the employer’s representative did not agree, he should call him back. He testified that the employer representative never called him back. The union representative “agreed in cross-examination that he never said to the Employer in discussions that the language gave them dual benefits. He stated he advised his committee but then said to the Employer it was very good language on the bridge” (this referred to using unused sick leave as a retirement bridge).

The employer’s representative testified that dual benefits were not discussed in the context of the section of the SAA granting the bridge. He also said that the union representative left a message, but it was simply a message to call him. He asked another employee representative to call him back.

The arbitrator stated that the onus is on the union to establish that the parties agreed to a dual entitlement. This would be established either by the language of the collective agreement itself or in conjunction with extrinsic evidence such as past practice or bargaining history.

In regard to the SAA, the arbitrator said:

The Union has not pointed me to any specific language in the Stand Alone Agreement that it says expressly provides for a dual benefit [entitlement?] to severance and retirement benefits.

I conclude that the August 16th letters to employees do not contain a representation that employees will receive both severance and retirement benefits. The letter notes the employee “must continue to work up to the end of your last scheduled shift in order to qualify for severance”. It goes [on?] to note that “Employees who resign, retire or are discharged for cause prior to their final scheduled shift will not receive severance.

While an employee may have read the letter and assumed that if they retired on their final shift, as opposed to prior to their final shift, they would be entitled to severance, the parties did not agree with that conclusion based on the conduct. It is clear based on discussions during the Stand Alone Agreement discussions that the parties were at odds on this matter.

The arbitrator then considered the extrinsic evidence provided by the parties. The arbitrator referred to the discussion of extrinsic evidence in Coquitlam School District 43 v. Coquitlam Teachers’ Assn., [1993]B.C.C.A.A.A. No. 360, in particular that:

…it is the language selected by the parties that dominates in any disputed interpretation and that any departure from the apparent meaning of the language requires “very persuasive and unequivocal parole evidence”…

It is only where extrinsic evidence discloses mutuality between the parties with respect to a particular meaning inconsistent with the written language that “a bona fide doubt” will arise about what the parties meant in their selection of language which appears clear on its face…

While the arbitrator agreed that severance payments and retiree benefits can be combined by agreement and that the parties had expressly agreed to do so in the past, he did not view it as a “past practice” as the term is used in arbitral jurisprudence, just that the concept was not new to these parties.

The arbitrator concluded that the intrinsic evidence was not helpful and that while the employees and union may have believed that they had achieved the dual entitlement, without express language, the grievance must be dismissed.

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