Alberta Teachers ’ Association Applicant - v. -, 2013 ABQB 268

Court of Queen ’ s Bench of Alberta Citation: Alberta Teachers ’ Association v. Buffalo Trail Public Schools Regional Division No. 29, 2013 ABQB 268 Date: 20130503 Docket: 1103 15584 Registry: Edmonton Between: Alberta Teachers ’ Association Applicant - and - Buffalo Trail Public Schools Regional Division No. 29 Respondent _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice M.

David Gates _______________________________________________________ Introduction [ 1 ] This is an application by the Alberta Teachers’ Association (the ATA) for judicial review of the Majority decision of a three- person arbitration board (the Board), issued on September 7, 2011.

The decision dealt with an individual grievance brought by the ATA against Buffalo Trail Public Schools Regional Division No. 29 (BTPS) pursuant to Clause 9 and the implied terms of the collective agreement between the parties. [ 2 ] For the reasons that follow, the application is granted, the decision of the Majority is set aside and the matter is remitted to the Board.

Agreed Facts [ 3 ] Before the Board, the parties relied on the following agreed facts. [ 4 ] The ATA and BTPS are both corporate bodies. The ATA local that represents teachers employed by BTPS is Park Plans East Local #31. [ 5 ] The collective agreements made between the ATA and BTPS covering the period 2003 until the hearing are contained at tabs 4 through 7 of the parties’ Agreed Documents.

Each of these agreements was executed and made effective for the terms referenced therein. [ 6 ] The Alberta School Employee Benefit Plan (ASEBP) is a health and welfare trust governed by 10 trustees, 5 of which are appointed by the Alberta School Boards Association, and 5 of which are appointed by the ATA. [ 7 ] ASEBP provides comprehensive group health benefits and related services to non-retired and retired school employees in Alberta, including to teachers and retired teachers under the age of 65.

ASEBP provides these benefits both by facilitating group insurance plans with other insurance providers, and by underwriting self-insured group insurance plans. [ 8 ] The parties agreed that copies of the current ASEBP Master Policy plan documents (tabs 14-19 of the binder of Agreed Documents) would go into evidence in the arbitration hearing. Those Master Policies have been amended from time to time.

However, the parties agreed that for the purpose of the arbitration, the provisions of the Master Policies contained in the Agreed Documents binder accurately reflect the provisions in effect at all times from September 1, 2006 until the hearing. [ 9 ] In September and October, 2003, Mr.

Doug Coffin, then BTPS Director of Human Resources, sent correspondence to six teachers who had previously retired, but who had returned to work as teachers with BTPS (the 2003 Early Retirees) and to representatives of the ATA, concerning their participation in ASEBP group insurance plans, and the payment of premiums for participation in those plans. [ 10 ] The correspondence sent at that time which the parties agreed to admit into evidence was included in the binder of Agreed Documents at tabs 24 through 27. [ 11 ] In January 2004, Stephen McKenzie, then the Assistant Superintendent of BTPS, sent common correspondence to each of the 2003 Early Retirees (an example of which, pertaining to one of the 2003 Early Retirees, Stanley Fox, was included in the binder of Agreed Documents at tab 28) addressing arrangements with respect to the payment of premiums for enrollment in ASEBP group insurance plans as “early retirees”. [ 12 ] After January 2004, the 2003 Early Retirees made their initial premium payments directly to ASEBP, and forwarded a statement of premiums paid to BTPS in August of each year.

On receipt of a statement of premiums paid, BTPS would reimburse the 2003 Early Retirees the percentage share of ASEBP premiums referenced under Clause 9 of the collective agreement at the relevant time. BTPS continued to reimburse premiums to each of the 2003 Early Retirees in accordance with this procedure in years subsequent to 2003-2004, for so long as each of the 2003 Early Retirees remained employed as a teacher with BTPS. As of the date of the Statement of Agreed Facts, one of the 2003 Early Retirees, Stanley Fox, remained employed as a teacher with BTPS.

BTPS had continued to reimburse a share of ASEBP premiums for Mr. Fox in accordance with the foregoing procedure. [ 13 ] Other teachers who have taken early retirement and returned to teach under contracts at BTPS subsequent to 2004, and who have enrolled as “early retirees” in ASEBP benefit plans, have not had premiums paid for them, or been reimbursed for them, by BTPS.

[ 14 ] The grievor, Ms. Arvida Horpestad, was 60 years old at the time of the Statement of Agreed Facts. From May 1972 until June 30, 2006, Ms. Horpestad was employed as a teacher by BTPS (and its predecessor entity) on a full-time, continuing contract - with the exception of the period of September 1975 to January 1976, during which she worked as a teacher in St. Albert, Alberta. [ 15 ] Ms. Horpestad retired from her continuing contract with BTPS effectively July 1, 2006. Ms. Horpestad was 55 years old at that time. [ 16 ] Immediately prior to Ms. Horpestad’s retirement from her continuing contract, Ms.

Horpestad was required to be enrolled in ASEBP. She was eligible for enrollment and was enrolled in the following ASEBP group insurance plans: (

i) Life and Accidental Death and Dismemberment, Plan 2; (ii) Extended Disability Benefit, Plan D (iii Extended Health Care, Plan 1 (iv) Dental Care, Plan 3 (

v) Vision Care, Plan 3. [ 17 ] As a result of her retirement on July 1, 2006, Ms. Horpestad applied for and began to receive pension benefits from the Alberta Teachers’ Retirement Fund (ATRF), and was eligible for and enrolled in the above ASEBP group insurance plans, with the exception of the ASEBP Extended Disability Benefit, Plan D. As a retiree, she was no longer eligible to participate in that particular plan. [ 18 ] Ms.

Horpestad has remained eligible for enrollment in and enrolled in the four ASEBP group insurance plans at all times from July 1, 2006 until the time of the Statement of Agreed Facts. [ 19 ] After her initial retirement on July 1, 2006, Ms.

Horpestad returned to work as a teacher for BTPS under a series of Temporary Contracts (contained at tabs 9-13 of the Agreed Documents binder) which ran for terms covering: August 28, 2006 to June 28, 2007; August 29, 2007 to June 27, 2008; August 27, 2008 to June 29, 2009; and (as extended) October 1, 2009 to January 29, 2010. [ 20 ] From September 2006 until the end of January 2009, Ms.

Horpestad paid premiums to ASEBP on account of the above-noted group insurance plans, in the following monthly amounts: August 28-2006-June 28, 2007 $146.00/month August 29, 2007-June 27, 2008 $150.07/month August 27, 2008-June 29, 2009 $151.64/month October 1, 2009-January 29, 2010 $159.89/month [ 21 ] BTPS did not pay any amount to ASEBP on account of Ms. Horpestad’s benefit premiums, and did not pay any amount to Ms.

Horpestad on account of those premiums during the period of September 2006 through January 2010. [ 22 ] From September 2006 until December 31, 2008 (the date of government elimination of Alberta Health Care premiums), BTPS paid Ms. Horpestad the share of Alberta Health Care premiums provided for under Clause 9 of the ATA - BTPS collective agreements. [ 23 ] Starting in September 2008 and continuing up to January 2010, BTPS has paid $300.00 per year towards Ms. Horpestad’s Health Spending Account provided for under clause 9.3.1 of the 2007-2012 BTPS-ATA collective agreement.

[ 24 ] The provisions of the ATRF pension plan provide that a teacher cannot collect an ATRF pension until the age of 55. The Majority Decision [ 25 ] Various issues were argued during the course of the arbitration.

However, this application for judicial review relates to only one issue, namely whether Clause 9 of the collective agreement requires the Respondent to pay group insurance premiums for early retirees working under temporary contracts of more than three months. [ 26 ] The Majority dismissed the grievance, finding that the Respondent was under no obligation to provide group insurance contributions for early retirees. One member of the Board, dissenting, would have allowed the grievance, finding that the Respondent was obliged to provide group insurance contributions for early retirees.

Procedural History [ 27 ] This Application was heard on March 14, 2012 in Edmonton. At the conclusion of oral argument, the Court reserved its decision. Subsequent to the hearing, on May 1, 2012 the parties provided the Court with further written submissions relating to the decision of Germain J. in Alberta Health Services v Alberta Union of Public Employees , 2012 ABQB 243 , 538 AR 295.

On January 9, 2013, the parties also provided the Court with further written submissions dealing with two further decisions: the Supreme Court’s decision in Construction Labour Relations - Alberta Association v Driver Iron Inc , 2012 SCC 65 , 437 NR 202, and the decision of Acton J. of the Court of Queen’s Bench of Alberta, in Meleshko v Alberta , 2012 ABQB 787 , [2012] AJ No 1418. On April 23, 2013, counsel for the ATA provided submissions relating to Lethbridge Regional Police Service v Lethbridge Police Association , 2013 ABCA 47 , [2013] AJ No 97.

Counsel for BTPS did not concur in providing this last decision. Issues [ 28 ] The Court must determine the following: 1. What is the appropriate standard of review? 2. Did the Board Majority err in finding that Clause 9 of the collective agreement does not require BTPS to pay group insurance premiums for early retirees working under temporary contracts of longer than 3 months, and who are enrolled in benefit plans listed in Clause 9.3(a)? 1. What is the appropriate standard of review? ATA ’s Position [ 29 ] The ATA concedes that the standard of review is reasonableness.

It argues that reasonableness does not mean absolute deference. It relies on Law Society of New Brunswick v Ryan , 2003 SCC 20 , [2003] 1 SCR 247 [ Ryan ] for the proposition that there must be a line of analysis within the tribunal’s reasons that could reasonably lead the tribunal from the evidence before it to its conclusions.

The ATA argues that the Supreme Court in Newfoundland and Labrador Nurses ’ Union v Newfoundland and Labrador (Treasury Board) , 2011 SCC 62 , [2011] 3 SCR 708 [ Newfoundland Nurses ’ Union ], did not say that a decision-maker’s reasons are no longer important, only that insufficiency of reasons is not a stand-alone basis for bringing judicial review. The process of reasoning

affects whether the outcome is reasonable. [ 30 ] The ATA cites several Alberta Court of Appeal cases regarding adequacy of reasons: Foothills Provincial General Hospital v United Nurses of Alberta, Local 115 , 1998 ABCA 358 , 228 AR 122 at paras 26 to 32 [ Foothills ], United Nurses of Alberta, Local 121R v Calgary Health Region (Rockyview Hospital) , 2007 ABCA 341 , 417 AR 348 at paras 27 to 32 [ Rockyview ] and United Food and Commercial Workers ’ Union, Local 401 v The Real Canadian Superstore , 2008 ABCA 210 , 432 AR 212 at paras 15 to 19 [ Superstore ] . In these cases, the Court of Appeal held that a board cannot arbitrarily adopt one

interpretation of a provision in a collective agreement and describe its approach as a “literal

interpretation”. A board must engage in some analysis that should include, at least, some use of principles of contractual

interpretation, such as an examination of the purpose of the provision, a consideration of the context of the provision in the agreement, a review of similar words elsewhere in the agreement, the impact of other provisions, and a determination of whether a particular

interpretation leads to an absurdity, internal inconsistency, or a result contrary to the provision’s purpose. [ 31 ] The ATA argues that the Board Majority’s reasons in this case do not indicate that it approached the

interpretation of the provision in question as mandated by the Court of Appeal. [ 32 ] The ATA takes the position that the fact that this case involves an arbitration board, instead of a true specialized tribunal like the Alberta Labour Relations Board, does not affect the amount of deference owed to the decision-maker. However, the ATA argues that if an arbitrator is going to depart from general principles s/he should give some reasons for doing so, citing Nor-man Regonial Health Authority Inc v Manitoba Association of Health Care Professionals , 2011 SCC 59 , [2011] 3 SCR 616 [ Nor-man ].

BTPS ’ Position [ 33 ] BTPS agrees that the standard of review is reasonableness. However, it argues that reasonableness requires a more deferential approach than the one advanced by the ATA.

BTPS emphasizes several points from Newfoundland Nurses ’ Union : 1) the adequacy of a decision-maker’s reasons is not a stand-alone reason for quashing a decision; 2) courts should analyse the reasons and the outcome together, not separately; and 3) the reasons and the outcome must be looked at in the context of the evidence, the parties’ submissions, and the process. [ 34 ] BTPS submits that a court reviewing for reasonableness must examine the decision-maker’s reasons as a whole, rather than parsing individual elements or undertaking a “microscopic”, line-by-line analysis of the reasons.

The court must look for any line of reasoning sufficient to reasonably support the outcome. [ 35 ] BTPS emphasizes that the ultimate focus should be on the outcome. The Court may look at the Board’s accounting of the evidence and the arguments, and its describing and explaining of its conclusions to determine whether the decision fell within a range of reasonable outcomes. However, the real question is whether the Majority reached a reasonable conclusion which the Court can understand and analyze in order to determine whether or not it falls within a range of reasonable outcomes.

Analysis [ 36 ] As a general rule, reasonableness is the standard of review governing arbitral awards under a collective agreement: Nor-Man at para 42. A review for reasonableness focuses on justification, transparency, and intelligibility in the decision making process, and a result that falls within a range of acceptable outcomes given the facts and law: Dunsmuir v New Brunswick , 2008 SCC 9 , [2008] 1 SCR 190 at para 48 [ Dunsmuir ]. [ 37 ] The parties agree that the reasonableness standard of review applies in this case.

They disagree, however on the application of that standard. [ 38 ] The Supreme Court of Canada in Ryan held that there must be a line of analysis which supports the conclusion of the

decision-maker: 55 A decision will be unreasonable only if there is no line of analysis within the given reasons that could reasonably lead the tribunal from the evidence before it to the conclusion at which it arrived. If any of the reasons that are sufficient to support the conclusion are tenable in the sense that they can stand up to a somewhat probing examination, then the decision will not be unreasonable and a reviewing court must not interfere (see Southam , at para. 56).

This means that a decision may satisfy the reasonableness standard if it is supported by a tenable explanation even if this explanation is not one that the reviewing court finds compelling (see Southam , at para. 79). [ 39 ] In Newfoundland Nurses ’ Union , the issue was whether time spent as a “casual” employee could be credited towards vacation entitlement if the employee became “permanent”. Under the collective agreement, casual employees were given 20 percent of their basic salary in lieu of vacation entitlement.

The arbitrator’s decision set out the facts, the parties’ positions, the relevant provisions of the collective agreement, and a number of applicable interpretive principles. The arbitrator found that casual employees were excluded from vacation entitlement and, therefore, permanent employees were not allowed to include hours worked while they were casual employees when determining their vacation entitlement.

The chambers judge held that the arbitrator’s decision was unreasonable because the reasons focussed on the benefits available to casual employees when the issue before him was the vacation entitlement of permanent employees.

Further, the arbitrator did not interpret the provision of the collective agreement which established the procedure for determining permanent employees’ vacation entitlement. [ 40 ] In reversing the chambers judge’s decision, Abella J. discussed the meaning of the phrase “justification, transparency and intelligibility” in Dunsmuir : 12 It is important to emphasize the Court's endorsement of Professor Dyzenhaus's observation that the notion of deference to administrative tribunal decision-making requires "a respectful attention to the reasons offered or which could be offered in support of a decision".

In his cited article, Professor Dyzenhaus explains how reasonableness applies to reasons as follows: "Reasonable" means here that the reasons do in fact or in principle support the conclusion reached. That is, even if the reasons in fact given do not seem wholly adequate to support the decision, the court must first seek to supplement them before it seeks to subvert them .

For if it is right that among the reasons for deference are the appointment of the tribunal and not the court as the front line adjudicator, the tribunal's proximity to the dispute, its expertise, etc, then it is also the case that its decision should be presumed to be correct even if its reasons are in some respects defective. [Emphasis added.] (David Dyzenhaus, "The Politics of Deference: Judicial Review and Democracy", in Michael Taggart, ed., The Province of Administrative Law (1997), 279, at p. 304) [ 41 ] Abella J. further explained that the adequacy of reasons is not an independent basis for quashing a decision, and the Court should not engage in discrete analyses of the reasons and the results.

Rather, the review is an“organic exercise” in the sense that the reasons must be read together with the outcome and serve to show whether the result falls within a range of reasonable outcomes: para 14. Abella J. noted that it is not fatal if reasons do not include all the arguments, statutory provisions, jurisprudence or other details the reviewing judge would have preferred.

Nor is a decision-maker required to make an explicit finding on each element leading to its final conclusion: para 16. [ 42 ] The requirement in Ryan that reasons contain a line of analysis can be reconciled with the remarks in Newfoundland Nurses ’ Union . On a review for correctness, the court must engage in its own reasoning to determine whether the decision-maker reached the correct result. However, when reviewing for reasonableness, the court does not reach its own result and work backwards.

Instead, the court examines the reasons given by the tribunal and decides if the outcome reasonably follows from them, even if the explanation is not one which the court finds to be compelling. The reasons are read along with the outcome because it is usually through an understanding of the rationale that the court then determines whether the outcome itself is reasonable.

Examining the outcome separately would tend to lead the court into a correctness review. [ 43 ] Therefore, Newfoundland Nurses ’ Union does not eliminate the requirement in Ryan that reasons must contain a line of analysis that could reasonably lead to the conclusion reached by the decision-maker. Newfoundland Nurses ’ Union does provide further guidance: the court should consider the reasons offered or which could be offered , and if reasons do not appear to be adequate the court should supplement them rather than subvert them: para 12.

In other words, gaps in reasons will not necessarily render the decision unreasonable.

[ 44 ] Newfoundland Nurses ’ Union does not necessarily undermine the proposition in Foothills that arbitrators cannot arbitrarily adopt one

interpretation and call it “a literal

interpretation”. When it comes to

interpretation of a provision in a collective agreement, an arbitrator cannot simply choose one among several possible

interpretations without providing any indication as to how it was reached. However, Abella J.’s comments in Newfoundland Nurses ’ Union suggest that if the arbitrator’s

interpretation is consistent with the rest of the contract, or could be consistent, the decision should not be quashed on the basis that the arbitrator did not explain how the

interpretation is consistent. Similarly, if the result accords or could accord with principles of contractual

interpretation, the decision should not be quashed because the reasons do not contain a discussion of the application of all applicable principles. The court should supplement the reasons by considering how the application of the principles would lead to the decision reached by the arbitrator. [ 45 ] Therefore, I will review the decision to determine whether the reasons illustrate a line of analysis allowing me to conclude that the outcome was reasonable. I will not look for the absence of particular considerations in order to determine whether the reasons are unreasonable or insufficient.

However, the decision, as a whole, may be unreasonable if the outcome is inconsistent with principles of contractual

interpretation or other provisions in the collective agreement. 2.

Did the Majority err in finding that Clause 9 of the collective agreement does not require BTPS to pay group insurance premiums for early retirees working under temporary contracts of longer than 3 months, and who are enrolled in benefit plans listed in Clause 9.3(a)? [ 46 ] Clause 9 provides: 9.1 When enrolment is satisfactory to the insurers, the Member Employer will make available the Alberta School Employee Benefit Plan, which provides life, accidental death, dismemberment, and extended disability insurance, dental, vision and extended health care insurance. 9.2 Subject to the provisions of the master policies, all teachers shall be required to enroll in the Alberta School Employee Benefit Plan, except that teachers on contracts which do not exceed three months shall not be eligible for enrollment in the Plan.

A teacher may be exempted from participation in Extended Health Care, Dental, Vision and the Alberta Health Care Plan where they receive coverage through their spouse. 9.3 Benefit coverage provided by the Member Employer will be 93% towards the premiums payable for the following group insurance plans: (

a) Alberta School Employee Benefit Plan: (

i) Life and Accidental Death and Dismemberment

Schedule 2 (ii) Extended Disability Benefit Plan D (iii) Extended Health Care Plan 1 (iv) Dental Care Plan 3 (

v) Vision Care Plan 3 (

b) Alberta Health Care Plan Effective September 1, 2008, the Member Employer contributions towards the benefit premiums increase to 95%. Effective September 1, 2009, the Member Employer contributions towards the benefit premiums increase to 96%.

Effective September 1,2010, the Member Employer contributions towards the benefit premiums increase to 97o/o. Effective September 1,2011, the Member Employer contributions towards the benefit premiums increase to 98%. 9.3.1 Effective September 1, 2008, the Member Employer will establish and contribute annually to an individual Health Spending Account for each eligible teacher under contract in the amount of $300 annually. In this

article 'eligible teacher' means any teacher on a continuing, probationary or temporary contract during the year. For temporary contract teachers, 1/12 of the annual contribution will be deposited for each full month the teacher is under contract. Teachers leaving the employ of the Member Employer for any reason will forfeit any remaining balance.

The account will be administered by ASEBP as allowed by CRA and the Income Tax regulations for the benefit of that teacher and his/her spouse and dependant(s). 9.4 The Member Employer agrees to apply the premium contributions under clause 9.3 in the most tax advantageous manner based on a teacher's eligibility for participation in the plans. It is understood that the Member Employer's contribution to the Alberta School Employee Benefit Plan and Alberta Health Care premiums is applicable only where the teacher participates in the respective plan.

ATA ’s Position [ 47 ] The ATA examines specific statements in the decision in support of its argument that the decision is unreasonable. It defends this “line-by-line” analysis on the basis that in order to be reasonable, there must be something in the decision that supports the result, and the only way to determine this is by going through the decision line by line. [ 48 ] According to the ATA, the decision in this case does not indicate that the Majority considered the purpose of Clause 9. The ATA asserts that the purpose is to provide benefits to teachers on long-term contracts.

Providing group insurance plans to early retirees who return to teaching, on the same or similar terms to other teachers, accords with the purpose of the provision. The ATA also argues that where a collective agreement expressly provides employees with a general benefit or right, the removal or restriction of that benefit or right must be expressed in clear and unequivocal language.

In this case, the collective agreement does not expressly limit that right, and limiting it would be inconsistent with the purpose of the provision. [ 49 ] With respect to the context in which the disputed words appear, the ATA acknowledges that the Majority says that “the starting point of [the Board’s] task of

interpretation is the actual words used by the parties in the context of the agreement in which they are found.” However, it argues that nothing in the decision shows that the Majority ever applied that principle. The decision does not indicate that the Majority looked at the wording of the agreement, nor did it explain how other provisions of the collective agreement lead to the selected

interpretation of the provision. The ATA argues that the Majority’s

interpretation of Clause 9 takes up only four paragraphs, consisting of restatements of the provision, bare conclusions, an analysis of the Master Policies - documents that contain the terms of the insurance benefits - and the past practice of the parties. [ 50 ] The ATA submits that the context supports an

interpretation whereby the provision required BTPS to pay the stipulated amount of the insurance premiums for all teachers, including early retirees who return to teaching on contracts of longer than three months. There are provisions in the collective agreement which restrict the benefit to other groups, including teachers on a contract of less than three months, and people on maternity or parental leave. However, nothing restricts the benefit for early retirees. [ 51 ] The ATA argues that the Majority relied on inadmissible extrinsic evidence. This reliance was not only wrong in law, it is also inconsistent with other statements in its decision that indicate such evidence is unnecessary.

[52] The ATA recognizes that s. 143(2) of the Alberta Labour Relations Code, RSA 2000, c L-1, s 143(2) [the Code] provides thatlabour arbitration boards are not bound by the strict rules of evidence. However, it cites R v Barber, ex Parte Warehouseman andMiscellaneous Drivers’ Union Local 419, (ON CA), [1968] 2 OR 245, 68 DLR (2d) 682 (CA) [Barber], and UnitedBrotherhood of Carpenters and Joiners of America, Local 579 v Bradco Construction Ltd., (SCC), [1993] 2 SCR 316,153 NR 81 [Bradco], for the general rule that use of extrinsic evidence in the

interpretation of a collective agreement is prohibited ifthere is no ambiguity. The ATA also cites Inland Cement Industries Ltd v United Cement, Lime and Gypsum Workers, Local 359,1981 ABCA 7 , 27 AR 135 [Inland Cement], and Amalgamated Transit Union Local 1374 v Greyhound CanadaTransportation Corporation, 2009 ABQB 166, 7 Alta LR (5th) 104 [Amalgamated Transit], for the principle that relying on extrinsicevidence in the absence of an ambiguity is essentially the same as altering the collective agreement in contravention of s. 142 of theCode.

In addition, the Court in CAW-Canada, Local 127 v Eaton Yale Ltd (1995), (ON SC), 22 OR (3d) 598, 1995CarswellOnt 842 (Div Ct) [Eaton Yale] quashed a decision of an arbitrator on the basis that the arbitrator relied upon a life insurancebooklet when interpreting an unambiguous provision of a collective agreement concerning employee life insurance benefits.

The Courtfound two errors rendering the decision patently unreasonable: referring to extrinsic evidence when interpreting an unambiguousprovision; and improperly amending the terms of the collective agreement by reading in terms from the life insurance booklet. [53] The ATA argues that the Master Policies are extrinsic evidence because they exist outside the collective agreement. TheMajority expressly stated that the Master Policies help determine what benefits are provided by Clause 9.

It also found a number ofdifferences between the benefits provided to regular teachers and early retirees on the basis of the Master Policies. The ATA accepts thatthe Master Policies may be used to provide context for the

interpretation, but they cannot be used to displace the terms of the collectiveagreement. [54] The ATA also alleges that in addition to the Master Policies, the Majority relied on an insurance handbook and past practice tointerpret Clause 9. [55] The ATA argues that the Majority in its decision says it will examine the words of the collective agreement, but does notmention them. It also says that it will not rely on extrinsic evidence, but then makes several findings on the basis of extrinsic evidence. [56] The ATA submits that the purpose of Clause 9 is to provide a benefit.

When the purpose of a provision is to provide abenefit, the removal or restriction of that benefit must be expressed in clear and unequivocal language. The ATA argues that no suchlanguage appears on the face of the collective agreement.

On the other hand, providing the benefit to early retired teachers working ontemporary contracts of more than three months accords with the purpose of Clause 9. [57] The ATA argues that in order for the Board to reasonably reach its decision, it had to reach two conclusions: (1) the words“Alberta School Employee Benefit Plan” in Clause 9 mean a singular plan comprised of multiple group insurance plans provided by theASEBP; and (2) during the time that early retirees are employed on temporary contracts, they are not participating in such a singular“plan of plans” or package of plans.

The Board never determine the meaning of “Alberta School Employee Benefit Plan”, which,according to the ATA, undermines its conclusion. In addition, the Board never explains how the words in the collective agreementsupport the “single plan” conclusion.

In oral argument, BTPS provided an explanation of how such a conclusion could be reached, butnothing indicating that reasoning process appears in the decision. [58] The Majority found that the early retiree teachers are not participating in the benefits contemplated by Clause 9 due toeligibility and administrative differences between the benefits provided to regular teachers and to early retirees. The ATA argues thatthese differences do not rationally support the conclusion that there are different “plans” or that early retirees are excluded from thebenefits provided in Clause 9.

If administrative differences resulted in the existence of different plans, then that would lead to the absurdconclusion that if men and women had to fill out different forms to apply for insurance, they would be enrolled in different plans. BTPS’ Position [59] BTPS argues that the Majority clearly articulated a fundamental principle of contractual

interpretation when it said that “thestarting point of its task of

interpretation is the actual words used by the parties in the context of the agreement in which they are found”.It applied this principle when it found that “Alberta School Employee Benefits Plan” can mean different things in different contexts, andin Clause 9 it had the specific meaning determined by the Board.

[60] BTPS acknowledges that the Majority never specifically addressed the ATA’s argument that early retirees are not one of thegroups expressly excluded from the benefits, and, based on principles of contractual

interpretation, should be included. [61] BTPS also recognizes that the Majority never expressly stated the purpose of Clause 9, but it argues that failure to state thepurpose of the provision it is interpreting does not render the decision unreasonable. [62] BTPS does not take issue with the law presented by the ATA on the use of extrinsic evidence. However, it argues thatarbitrators are not expected to operate in an artificial vacuum and completely ignore the surrounding factual context, particularly wherethe

interpretation of language in a collective agreement involves an interplay with provisions found in ancillary group benefit plandocuments that are referenced, but not fully reproduced, within the collective agreement. [63] BTPS cites D Brown and D Beatty, Canadian Labour Arbitration, 4th ed (Aurora: Canada Law Book, 2006-) at 4:2250 for theproposition that extrinsic evidence may be used to establish the context of the agreement and, in some situations, related documents maybe relevant in interpreting the collective agreement.

The authors use the example of interpreting the meaning of terms relating toinsurance benefits, and note that arbitrators have considered the actual policy taken out by the employer. Brown and Beatty state:“related documents may be relevant in interpreting the collective agreement. For example in determining the meaning of terms in theagreement relating to insurance benefits, arbitrators have considered the actual policy taken out by the employer” (footnotes omitted).That

section refers to an arbitration decision, Re Thompson Products Employees Association and Thompson Products (1970), (ON LA), 21 LAC 125, [1970] OLAA No 5 [Thompson Products]. [64] The board in Thompson Products considered the extent to which it could consider the disability insurance policy taken out bythe employer when interpreting the benefits available to an employee. In that case, the employee suffered from varicose veins whichprevented her from standing and working for prolonged periods of time.

As a result, she had to miss work for an extended period of time.Although she had suffered from varicose veins previously in her life, a doctor testified that her condition at the time was partly as a resultof being pregnant. The collective agreement stated that the “Weekly Sick Benefit Plan” would cover benefits for illness for 26 weeks.The actual insurance plan said that no benefits were payable for “any disability absence which is caused or contributed to by, or as aconsequence of, pregnancy...” Instead, the plan provided pregnancy benefits, but only for six weeks.

The union grieved the employer’sdecision to only provide the employee with six weeks of benefits for her varicose veins. [65] The board in Thompson Products stated at 129-130: [T]he basic source of employee rights must be the collective agreement to which its bargaining agent is a party. On the other hand, theinterpretation of these rights may be clarified by looking at the policy which has been taken out by the company, especially where it hasbeen in existence and administered between the parties for some time. However, in case of conflict between the meaning of the collectiveagreement and the

definitions in the policy, the former must govern. This is clearly required by the decision of the Ontario Court ofAppeal in the Steinberg case [Barber]. [66] The board then dealt with what constituted a conflict. It said that it would be appropriate to consider the policies in order tosupplement or give detail to a bare framework of a weekly benefit plan. However, it could not use the insurance plan to justify paying$80 per week when the collective agreement said that employees would be entitled to $85.

The board found that “illness” wassufficiently broad that it could refer to the insurance policy to determine whether “pregnancy” was an illness, and determine, on the basisof the policy, that it was not. However, it held that there is no doubt that varicose veins are an illness. The board said “[i]f there were nosuch special definition in the policy, and we were left only with the wording of the plan in the agreement, there could be no doubt thatMrs.

Gibson could claim benefit for the varicose vein conditions as an ‘illness’.” [67] BTPS argues that the Majority’s statement that it need not resort to extrinsic evidence referred to extrinsic evidence about pastpractice and negotiating history. The Majority expressly stated that it considered the Master Policies. Although the decision contains areference to the handbook, BTPS argues that the information referred to was also in the Master Policies. [68] BTPS argues that the Majority’s reasons sufficiently explain how it reached its decision. BTPS argues that the detailed

recitation of the parties’ positions is an important part of the reasons. The Majority explained that it examined the collective agreement and the Master Policies. It provided an analysis of how it would use extrinsic evidence. The Majority found that although Clause 9 is difficult to interpret, it is not ambiguous, and, therefore it did not need to consider extrinsic evidence. It described how it interpreted the collective agreement in light of the Master Policies, explaining the differences between the benefits for regular teachers and for early retirees.

The Majority then accepted the argument of BTPS. [ 69 ] BTPS acknowledges that the Majority did not set out its reasons for preferring BTPS’s position as opposed to the ATA’s position. However, the Board was not required to expressly reject the ATA’s argument. Citing Newfoundland Nurses ’ Union , BTPS argues that the Court must presume that the reasons are correct, and supplement them if necessary.

Therefore, the Court should assume that when the Majority said that it accepted BTPS’s position, it adopted that position as its reasons for rejecting the ATA’s position; the focus must remain on the outcome and not on the reasons themselves. [ 70 ] BTPS presented a hypothetical means of how the Majority could have come to its conclusion. This involved substituting the ATA’s definition of the phrase “Alberta School Employee Benefit Plan” whenever that phrase appeared in the collective agreement. BTPS argued that such an exercise proved the ATA’s

interpretation to be incorrect. BTPS argues that if the Court accepts BTPS’s hypothetical means of arriving at the decision, then so long as the outcome itself is in the range of reasonable alternatives, it is possible to understand how the Majority might reasonably have come to its conclusion. [ 71 ] BTPS further argued that the Majority reasonably found that the collective agreement contemplated that BTPS would pay a portion of the premiums for a single package of benefit plans available only to non-retired teachers, and that benefits for early retirees involved separate plans or packages of plans.

The Master Policies referenced in the collective agreement list a series of benefit plans, including separate benefits for early retirees. A benefit handbook referenced by the Majority in its decision also highlights the differences in the benefit plans available for non-retired and early retiree teachers. The Master Policies show that the benefits, the process of application, eligibility requirements, and termination periods are different for early retirees. Moreover, “Life Insurance Plan 3" is only available to early retirees, not non-retired teachers.

The Master Policies also allow early retirees to pick and choose which package of plans they want to participate in, and in some cases to pick and choose which particular plans they want. [ 72 ] Clause 9.3 lists several named plans for which BTPS will pay a portion of the premiums: (

i) Life and Accidental Death and Dismemberment,

Schedule 2; (ii) Extended Disability Benefit, Plan D; (iii) Extended Health Care, Plan 1; (iv) Dental Care, Plan 3; and (

v) Vision Care, Plan 3. Early retirees may choose to participate in these named plans, but they can also choose to participate in other plans not listed in Clause 9.3. [ 73 ] Clause 9.2 requires all teachers, subject to certain exceptions, to enroll in the Alberta School Employee Benefit Plan. One of the exceptions is for teachers whose spouses have insurance through their employers. Clause 9.2 also contains the words “[s]ubject to the provisions of the master policies”, which the ATA argues also allows the Master Policies to create exceptions.

The Master Policies allow early retired teachers to choose which, if any, plans they want to participate in. [ 74 ] BTPS argues that Clause 9.2 does not provide this exemption to early retirees, but rather the phrase “subject to the master policies” is meant to acknowledge that there will be many details about the plans included in those documents and not in the collective agreement. According to BTPS, it is common for collective agreements to reference specific benefit plans and say that participation in the benefit plans is subject to the actual policies.

This prevents collective agreements from becoming several hundred pages long. BTPS also argues that Clause 9.2 specifically exempts teachers whose spouses have insurance through their employer, but the

Article does not specifically exempt early retirees from the obligation of enrolling. Analysis [ 75 ] Sections 142(1) and 143(2) of the Code are at the heart of this issue: 142(1) Subject to subsection (2), no arbitrator, arbitration board or other body shall by its award alter, amend or change the terms of a collective agreement. ...

143(2) An arbitrator, arbitration board or other body (

a) may accept any oral or written evidence that it considers proper, whether admissible in a court of law or not, (

b) is not bound by the law of evidence applicable to judicial proceedings... [ 76 ] A general common law rule, originating from the parol evidence rule, prohibits the use of extrinsic evidence to interpret collective agreements. In Bradco at 341, Sopinka J. referred to this rule and its origins. He also noted that one of the exceptions to the parol evidence rule is that extrinsic evidence may be admitted to clarify an ambiguity in the written terms of a contract. The arbitrator in that case found, and the Supreme Court agreed, that there was an ambiguity, and so admitted extrinsic evidence.

However, in obiter Sopinka J. noted at 343 that s. 84(1) of the Labour Relations Act, 1977 , SN 1977, c 64 , which allowed arbitrators to hear evidence whether admissible according to the rules of evidence or not (similar to s. 143 of the Alberta Code ), permitted arbitrators to admit extrinsic evidence regardless of whether there was an ambiguity. [ 77 ] In Barber , a case decided prior to Bradco , the Ontario Court of Appeal held that a provision in a labour relations statute that allowed arbitrators to admit otherwise inadmissible evidence did not alter the rule of construction that extrinsic evidence should not be used to interpret a collective agreement in the absence of an ambiguity.

The Court held that the arbitrator’s admission of extrinsic oral evidence of past practice and of a master policy of insurance entitled the employee to certiorari : Barber at 690. [ 78 ] Similarly, in National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW-Canada) v Bristol Aerospace Ltd , 2006 MBQB 51 , 202 Man R (2d) 287, aff’d 2006 MBCA 111 , the Court held that extrinsic evidence - in that case a letter from the respondent to the applicant - was not admissible for the purposes of interpreting an unambiguous provision of a collective agreement. [ 79 ] The Alberta Court of Appeal in Inland Cement held that admitting extrinsic evidence when no ambiguity exists is equivalent to altering the collective agreement, contrary to the Code : 19 ...When evidence of a course of conduct in relation to an agreement is admissible to resolve an ambiguity, it is looked at not to add to or vary its terms but to arrive at the true intent and meaning of the words in question....

But when evidence is admitted under an assertion of latent ambiguity when none is found to exist on a proper view of the collective agreement and the surrounding circumstances, and is then acted upon to give a construction to the agreement which departs from the meaning of the words used, there is plainly error on the face of the record....

In effect, irrelevant evidence has been admitted and acted upon with the result that the agreement has been varied by the award... [ 80 ] In Amalgamated Transit at para 19 , Erb J. cited Sopinka J.’s comments in Bradco and held that s. 143 of the Code allows arbitrators to admit extrinsic past practice evidence even where there is no ambiguity. However, she also followed Inland Cement , and held that arbitrators must not use such extrinsic evidence to change the terms of a collective agreement, contrary to s. 142.

As she explained at para 24, courts are reluctant to favour past practice evidence over the written words of an agreement where there is no ambiguity, because the agreement is seen as a more fitting representation of the parties’ common intentions. [ 81 ] In Eaton Yale , an arbitrator found that a clause of the collective agreement was not ambiguous. He nevertheless admitted evidence in the form of a life insurance handbook to interpret the clause which stated “[e]ffective February 6, 1989 for all employees, life insurance will be $21,000”. The employee in that case died shortly after being laid off.

There was no question that he was still an employee at the time he died. The company argued that the life insurance handbook required employees who had ceased active work to inquire about making arrangements to continue insurance benefits, otherwise benefits would end. The employee did not do so in that case. The insurance plan itself was not in evidence before the arbitrator. The life insurance handbook was expressly and impliedly referred to in other parts of the collective agreement, but not in the clause at issue. [ 82 ] The Ontario Divisional Court held that the arbitrator committed two reviewable errors.

First, the arbitrator should not have

referred to extrinsic evidence once he found that the clause was unambiguous. The Court distinguished Sopinka J.’s comments in Bradco , stating that even if the comments were not obiter they relate only to the admission of extrinsic evidence, and not to the use extrinsic evidence to interpret unambiguous provisions of collective agreements: Eaton Yale at para 11 . The Court went on to find that reading the terms of the handbook into the clause at issue effectively amended the terms of the terms of the collective agreement.

The Court remitted the matter to the arbitrator. [ 83 ] Sopinka J.’s comments in Bradco are clearly obiter , and with great respect to those who conclude otherwise, I do not view the remarks as relating to the mere admission of extrinsic evidence. The comments contemplate the use that may be made of the evidence as well.

For example, Sopinka J. stated at 344 that the Court is not apt to intervene if the arbitrator uses the evidence to assist in determining the true intention of the parties. [ 84 ] However, arbitrators are statutorily prohibited under the Code from altering, amending, or changing the terms of a collective agreement.

The Courts in Inland Cement , Amalgamated Transit , and Eaton Yale all found that using extrinsic evidence to interpret an unambiguous provision effectively changes the terms of the agreement. [ 85 ] I conclude that the Majority’s decision will have been unreasonable if it found Clause 9 to be unambiguous, but nevertheless relied on extrinsic evidence to interpret that clause, as this would constitute alteration of the collective agreement in contravention of s. 142 of the Code . [ 86 ] The Majority stated on page 15 of its decision: The Board has carefully reviewed the entirety of the

article 9, and the master policies of ASEBP, which are incorporated by reference. There is no doubt that the words used by the parties create difficulties of

interpretation. But difficulties of

interpretation do not equate to an ambiguity which permits resort to extensive extrinsic evidence. The Board is satisfied that in this case it can ascertain the intention of the parties from the words used in the agreement. [ 87 ] Having reviewed Clause 9, I find that the Majority reasonably concluded that it was possible to ascertain the intention of the parties from the words used in the collective agreement. [ 88 ] However, despite having reached this conclusion and making a vague reference to “difficulties of

interpretation”, the Majority did not undertake any real examination of the meaning of the words used in Clause 9. Rather, it referred to three different kinds of extrinsic evidence: the Master Policies, the insurance handbook, and past practice. [ 89 ] The Majority took the position that the Master Policies of ASEBP are incorporated by reference.

However, the only express mention of the Master Policies in Clause 9 is in sub-Clause 9.2: “Subject to the provisions of the master policies, all teachers shall be required to enroll in the Alberta School Employee Benefit Plan, except that teachers on contracts which do not exceed three months shall not be eligible for enrollment in the Plan”. [ 90 ] Having reviewed Clause 9, I find that the Majority reasonably concluded that the Master Policies may be consulted to determine which teachers must enroll in the Benefit Plan.

In fact, the Majority found that the reference to the Master Policies did not assist in a determination with respect to whether the early retiree teachers who were teaching after retirement were required to enroll in the Plan. [ 91 ] There is no further reference to the “Master Policies” in Clause 9. [ 92 ] The Majority embarked on a discussion of what constituted “the Plan”, referred to in sub-Clause 9.3 simply as the “Alberta School Employee Benefit Plan”.

The Majority did not refer to the following description in sub-Clause 9.1: ...Alberta School Employee Benefit Plan, which provides life, accidental death, dismemberment, and extended disability insurance,

dental, vision and extended health care insurance. [ 93 ] Even assuming that this description of “Alberta School Employee Benefit Plan” is ambiguous, the Master Policies also contain a concise definition: 1.3 Alberta School Employee Benefit Plan is the trade name owned by the Trustees and under which This Plan and other employee benefit plans operate... [ 94 ] Neither of these descriptions or

definitions narrows the “Alberta School Employee Benefit Plan” to specific categories of coverage or mechanisms for obtaining coverage detailed in the Master Policies. [ 95 ] The Majority concluded, based on details as to availability of certain types of coverage and modalities described in the Master Policies, that the Plan in which the early retirees would enrol was not the “Alberta School Employee Benefit Plan” referred to in Clause 9.3. [ 96 ] I find that the Majority, having expressly and reasonably found that it could ascertain the intention of the parties from the words used in the collective agreement, unreasonably relied on extrinsic evidence in order to interpret the wording in Clause 9 of the collective agreement. [ 97 ] In other words, while the Board was entitled to admit extrinsic evidence under s. 143(2) of the Code , s. 142(1) barred it from altering, amending or changing the terms of the collective agreement by unnecessarily resorting to such extrinsic evidence to interpret Clause 9 in the absence of a finding of ambiguity. [ 98 ] The Respondent argued that the recitation of the parties’ arguments informs the decision, and the result is key.

However, in my view, without extensive resort to, and analysis of, the extrinsic evidence it is difficult to see how the Majority would have reached its conclusion. The parties agreed that as a result of Ms. Horpestad’s retirement on July 1, 2006, she was eligible for and did enroll in four of the five ASEBP group insurance plans in which she had been enrolled prior to her retirement. Sub-Clause 9.3 provides: 9.3 Benefit coverage provided by the Member Employer will be 93% towards the premiums payable for the following group insurance plans: (

a) Alberta School Employee Benefit Plan: (

i) Life and Accidental Death and Dismemberment

Schedule 2 (ii) Extended Disability Benefit Plan D (iii) Extended Health Care Plan 1 (iv) Dental Care Plan 3 (

v) Vision Care Plan 3 [ 99 ] There is nothing on the face of Clause 9 which would appear to lead to the conclusion that sub-Clause 9.3 would not apply to Ms. Horpestad with respect to premiums payable for one or more of the group insurance plans listed, and in which she had enrolled according to the Agreed Facts. [ 100 ] Therefore, even recognizing the considerable deference due to the Board, I conclude that the decision did not fall within a range of reasonable outcomes .

Conclusion [ 101 ] The application is granted, the Majority decision is set aside and the matter is remitted to the Board. Heard on the 14 th day of March, 2012. Dated at the City of Edmonton, Alberta this 3 rd day of May, 2013. M. David Gates J.C.Q.B.A. Appearances: Jeremy Taylor for the Applicant Craig Neuman, Q.C. for the Respondent