Ironworkers Shopmens Local Union No. 805 v Evraz Inc. N.A., 2013 ABQB 375

Court of Queen ’ s Bench of Alberta Citation: Ironworkers Shopmens Local Union No. 805 v Evraz Inc. N.A., 2013 ABQB 375 Date: 20130704 Docket: 1201 12813 Registry: Calgary Between: Ironworkers Shopmens Local Union No. 805 Applicant - and - Evraz Inc. N.A. Respondent _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice R. J.

Hall _______________________________________________________ [ 1 ] This is a Judicial Review of the decision of Arbitrator John Moreau, Q.C. released September 18, 2012, in which he held that past service by employees of Ram Steel was not included as “service” or “credited service” under the collective agreement between IPSCO Inc. and Shopmens Local Union No. 805 of the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers (“the Union”), or “continuous service” under the IPSCO/Ironworkers (Red Deer) pension plan. Evraz Inc.

N.A. is the successor employer, having purchased the business from IPSCO. [ 2 ] The facts are summarized in the Applicant’s brief. Ram Steel commenced its manufacturing operations in Red Deer in 1982. On June 21, 1982 the Union was certified as a bargaining agent for Ram Steel employees in Red Deer. The first collective agreement was to be in place from April 19, 1982 to February 29, 1984. Ram Steel stopped production at the plant and went into receivership in 1983. No pension plan existed between Ram Steel and the Union.

[ 3 ] In late 1983, approximately 3 months after Ram Steel went into receivership, the Interprovincial Steel and Pipe Corporation Ltd. ( “International”) acquired the assets of Ram Steel from the receiver. Production at the plant resumed in late December, 1983 or early January 1984. The Union and International entered into a further collective agreement for the period of December 2, 1982 to December 31, 1985. [ 4 ] On June 6, 1985 the Alberta Labour Relations Board varied the June 21, 1982 certification to recognize the Interprovincial Steel and Pipe Corporation as the successor employer to Ram Steel. Therefore, the provisions of

section 46 of the Labour Relations Code apply. The company changed its name to IPSCO. A further collective agreement was entered into for the period of April 1, 1985 to December 31, 1988. [ 5 ] On December 2, 1988 the Union and IPSCO entered into a letter of understanding regarding the introduction of a pension plan. [ 6 ] The collective agreement for the period of January 1, 1992 to December 31, 1994 is the first to refer to the pension plan.

The pension plan is continuously referred to in subsequent collective agreements, including the 2008 collective agreement. [ 7 ] The IPSCO/Ironworkers (Red Deer) pension plan was implemented and the official text appears to have been released in 1994. Several subsequent amendments were made. [ 8 ] IPSCO was purchased by Evraz Inc. N.A., and on February 23, 2012, the Labour Relations Board released a certificate recognizing Evraz as the employer. [ 9 ] The Brief of the Respondent adds to those facts.

It notes that the current collective agreement expressly recognizes Ram Steel service in the provisions relating to vacation entitlement and employees have continued to be credited with Ram Steel service for seniority purposes. However, it makes no mention of Ram Steel time counting with respect to pension contribution or calculation. [ 10 ] The December 2, 1988 letter of understanding set out a list of terms to be included in the pension agreement.

Pursuant to the letter of understanding, “continuous service/employment” was defined as “the period of active service rendered by an employee to the Company from his date of employment to the date of termination of service or retirement”. “Company” is not therein defined. [ 11 ] The employee benefits booklet issued in 1990 provided that “continuous service is your uninterrupted active service with IPSCO starting with your date of hire. . .” Between 1992 and 2008, several more collective agreements were entered into between IPSCO and the Union containing virtually identical provisions in respect of the pension plan. [ 12 ] The pension plan itself contains several

definitions. At paragraph 1.06 it indicated that “Company shall mean IPSCO and such subsidiary, affiliated and associated company or companies as may be designated by the Board of Directors from time to time.” At paragraph 1.07 it indicates “continuous service and continuous employment shall mean a period of uninterrupted active service rendered by a member to the company. . .”. The pension plan makes no mention of Ram Steel, or time worked there by employees of IPSCO.

Standard of Review [ 13 ] Both the Applicant and the Respondent agree that the standard of review applicable to a labour arbitration decision interpreting and applying the terms of a collective agreement is the deferential standard of reasonableness. The Respondent also argues that the same standard should apply where an arbitrator, in the course of interpreting and applying the terms of a collective agreement is required to consider the terms of a pension plan granted thereunder by the employer. The Applicant does not take serious issue with that standard of review for those purposes.

However, the Applicant states that one of the requirements of pensionable service, as defined in the pension plan, is that it be eligible service within the meaning of paragraph 8503(3)(

a) of the Income Tax Regulations . The Applicant

says that, when the Court is called upon to interpret those Regulations as they apply to the plan, the standard of review should be correctness. The Respondent does not disagree with that proposition, and I accept it to be accurate. [ 14 ] Parties submit issues arising under an agreement to arbitration because arbitration is quicker, more economical, and decisions are rendered by people chosen by the participants and who are expert in the area being considered. As a quid pro quo , the parties agree that there shall be no appeal taken from the decision of the arbitrator.

Only where the arbitrator’s decision, if within his area of expertise, is unreasonable; or, if his decision includes an area outside of his expertise, is incorrect; will a Court interfere. The Arbitration Decision [ 15 ] The Arbitrator issued written reasons and decision on September 18, 2011. He noted that the issue in the grievance was whether the time worked by 9 employees at Ram Steel should count toward their earned pension time. He set out a

summary of the facts and noted that on December 2, 1988, in connection with the negotiations leading up to the January 1, 1989 to December 31, 1991 collective agreement, the Union and IPSCO entered into a letter of understanding regarding the introduction of a pension plan, which states in part: THE PARTIES HEREBY agree to meet during the term of this agreement to negotiate a pension plan that will include comparable terms to those which exist in the agreement of their sister plants within IPSCO Inc. [ 16 ] Attached to the letter of understanding was a document entitled “Terms To Be Included In The Pension Agreement”.

That document set out the basic pension and supplemental pensions, eligibility and retirement dates. It provided: Continuous Service/Employment is the period of active service rendered by an employee to the Company from his date of employment until the date of termination of service or retirement.

Past Service – Red Deer past service is to be credited, less normal 1 years waiting period. [ 17 ] The attachment went on to define “continuous service” as follows: Continuous Service is your uninterrupted active service with IPSCO starting with your date of hire. [ 18 ] The Arbitrator noted that the Collective Agreement for the period January 1, 1992 to December 31, 1994 contains the first reference to a pension plan at

Article 14(

h) which reads: The Company agrees to provide a Pension Plan with the following benefits: (

a) The basic pension will be twenty-eight (28) dollars per month per year of credited service. (

b) A supplement pension will be sixteen (16) dollars per month per year of credited service to age sixty-five (65). (

c) Employee will be required to contribute twenty-five (.25) cents per hour. [ 19 ] He noted that the above collective agreement provisions have not changed substantially in subsequent collective agreements, except as to the level of pension benefits.

[ 20 ] The Arbitrator goes on to discuss the pension plan itself and notes that “continuous service and continuous employment” is defined at

Article 1.06 of the Pension Plan as follows: 1.06 Continuous service and continuous employment shall mean a period of uninterrupted active service rendered by a member to the Company from the Member’s date of employment to the date of the Member’s termination of service, death or retirement, whichever first occurs. [ 21 ] He notes that, at paragraph 1.05 of the Pension Plan it is provided: Company shall mean IPSCO Inc. and such subsidiary, affiliated and associated company or companies as may be designated by the Board of Directors from time to time, . . .. [ 22 ] He notes paragraph 1.11 of the Pension Plan provides: Employee means an individual employed by the Company on an hourly-paid basis and who is a member of the collective bargaining unit with whom the Company has negotiated participation in the Plan for the particular plant location.

At 1 December 1991 Local 805 (Red Deer) of the International Association of Bridge, Structural and Ornamental Ironworks is covered by the Plan. [ 23 ] He notes at paragraph 1.17 of the Pension Plan it is provided: 1.17 Pensionable Service shall mean:

(1) All Continuous Service to the credit of the Employee before the effective date of the Plan, not including the Employee’s first year of employment with the Company.

(2) All Regular Hours worked by a Member during the Member’s Continuous Service with the Company from the Effective Date or the date the member joins the Plan, whichever is later. Member will be determined by the ratio of the Regular Hours worked by the Member (subject to a maximum of 1800 in a calendar year) to 1800 hours.

(3) Notwithstanding the above, periods of Continuous Service that are in respect of temporary layoffs, leaves of absence or other absences from employment that are counted as Pensionable Service shall not exceed the limits on “prescribed compensation” as determined in the Income Tax Act .

(4) The maximum number of years of Pensionable Service for which a Member shall receive credit is thirty-five (35) and a Members’ years of Pensionable Service shall not exceed the Member’s years of Continuous Service.

(5) Notwithstanding the above provisions, Pensionable Service shall not include any periods of Total and Permanent Disability during which the Member is in receipt of a disability pension from the Plan in accordance with

Section 8. Also, Pensionable Service shall include the other periods of disability where the Member is Disabled, as defined herein.

(6) To qualify as “Pensionable Service”, such service, both before and after the Effective Date of the Plan, must be eligible service as defined in paragraph 8503(3)(

a) of the Income Tax Regulations (italics added for emphasis). [ 24 ] The Arbitrator sets out many more terms of the Pension Plan in his decision. I have just highlighted those bearing some

relevance to this Judicial Review. [25] The Arbitrator noted that on June 30, 2011 the Employer responded to issues raised by the Union at a meeting of June 14,2011 regarding whether service with Ram Steel (prior to the receivership of 1983) is to be considered as part of an employee’s“continuous service” under the Pension Plan. The Employer’s letter recognizes that the Ram Steel service “is important to employeesbecause they would be able to retire after thirty (30) years of continuous service without an actuarial reduction”.

The Employer,however, concludes by stating that Ram Steel service cannot be counted as pensionable service time. [26] Mr. Tom Karashowsky had worked for Ram Steel starting September 22, 1981, and thereafter worked for Interprovincial Pipeand Steel Company and IPSCO. On March 30, 2010 Mr. Karashowsky wanted to know what his pension would be if he retired onOctober 1, 2011. Shieliah Loutit of IPSCO provided a response on April 7, 2010 indicating that his work with Ram Steel countedtowards his continuous service calculation. That statement was in discord with the Company’s previously stated position.

However, onJuly 28, 2012 the Company corresponded with Mr. Karashowsky advising him that Ms. Loutit’s position was incorrect, and that hewould not be credited with time worked for Ram Steel. [27] Dealing with these representations, the Arbitrator notes that the Union did not advance an argument of estoppel onKarashowsky’s behalf, but rather a general argument of negligent misrepresentation.

The Arbitrator considered the decision of theSupreme Court of Canada in the case of Queen v Cognos, (SCC), [1993] 1 SCR 87 and found that there was no clearevidence that Karashowsky placed full reliance on the representation when he decided to retire, and that he was informed of theemployer’s position that he would not be entitled to an unreduced pension if he elected to retire, two months before he actually retired.Accordingly the claim for negligent misrepresentation damages failed.

No application has been made to review that decision. [28] The Arbitrator, in his decision, noted that there is common ground between the parties that the Employer is required toprovide a pension plan which incorporates the benefits listed in the collective agreement.

A failure to meet the requirements set out inthe collective agreement with respect to the pension plan will give rise to a breach. [29] He notes that in the letter of agreement dated December 2, 1988 the terms “continuous service” and “pensionable service” areintroduced and that “Red Deer past service” is to be credited, less the one year waiting period. [30] He notes that the first time the pension provisions appear is in the fifth collective agreement covering the period 1991 to 1994in

Article 14, set out above. [31] He notes that the meaning of the term “credited service” is where the parties join issue. He notes that in the absence of adefinition of the term it is necessary to turn to other methods to ascertain the intention of the parties. He states the express and consistentreference to Ram Steel service since the earliest collective agreements, right up to the present day for vacation and seniority purposesindicates that the parties had specifically addressed the circumstances where Ram Steel service counts.

He noted that in the letter ofagreement of the subsequent collective agreements, however, Ram Steel service was never stated to be applicable to the pension plan. Henotes that the evidence before him showed that the employer would be put to significant cost should the finding be made that Ram Steelservice was to be included in the pension calculations. He notes it to be an accepted principle of arbitral jurisprudence that an intention toconfer a monetary benefit must be rooted in language that is clear and specific.

He found, therefore, that in the absence of clear languagethat included Ram Steel service within the definition of “credited service” or “service” within

Article 14, it would be inappropriate fromboth the perspective of construction of the entire collective agreement, and for the reasons set out by Arbitrator Burkett in Sudbury vC.U.P.E. Local 4705 [2005] O.L.A.A. 616, to read the time served with Ram Steel into the pension plan provisions of the collectiveagreement.

He referred to arbitral decisions dealing with similar situations such as that of Douglas Memorial Hospital v C.U.P.E., Loc.1531 (1991), (ON LA), 19 LAC (4th) 14 and Sudbury, supra. [32] The Arbitrator noted that the parties had identified the “company” in the pension plan as being IPSCO, and decided that, hadthe parties intended to include Ram Steel service as part of “company” service they would have said so expressly. [33] The Arbitrator also noted that the Union had argued that the pension plan defines “pensionable service” to mean “allcontinuous service to the credit of the employee before the effective date of the Plan, not including the employee’s first year ofemployment with the Company”.

The Union went on to point out that

Article 1.18(6) incorporates Federal Regulation 8503(3)(a):

1.18(6) To qualify as “pensionable service”, such service, both before and after the Effective Date of Plan, must be eligible service as defined in paragraph 8503(

a) of the Income Tax Regulations . [ 34 ] He notes that the Union submits that “eligible service” under Regulation 8503(a), requires a registered pension plan to include service with a predecessor employer in the calculation of “pensionable service”. In the absence of that inclusion, the Union submits that the Plan is invalid, according to the Regulations. He sets out the Regulation as follows: Conditions Applicable to Benefits 8503(3) For the purposes of subsection 8501(2) and subparagraph 8502(c)(

i) the following conditions are applicable in respect to the benefits provided under each defined benefit provision of an pension plan: Eligible Service (

a) The only lifetime retirement benefits provided under the provision to a member (other than additional lifetime retirement benefits, provided to a member because a member is totally and permanently disabled at the time the member’s retirement commenced to be paid) are lifetime retirement benefits provided in respect of one or more of the following periods (other than a portion of a period that is after the calendar year in which the member attains 71 years of age), namely: (

i) A period throughout which the member was employed in Canada by, and received remuneration from, an employer who participates in the plan, (ii) A period throughout which the member was employed in Canada by, and received remuneration from, a predecessor employer to an employer who participates in the plan, (iii) An eligible period of temporary absence of the member with respect to an employer who participates in the plan or a predecessor employer to such an employer, (iv) A period of disability of the member subsequent to a period described in subparagraph (

i) where, throughout such part of the period of disability as is after 1990, the Member is not connected with an employer who participates in the plan, (

v) A period in respect of which (

A) Benefits that are attributable to employment of the member with a former member accrued to the member under a defined benefit provision of another registered pension plan, or (

B) Contributions were made by or on behalf of the member under a money purchase provision of another registered pension plan, Where the member has ceased to be a Member of that other plan, (vi) a period throughout which the member was employed in Canada by a former employer where the period was an eligibility period for the participation of the member in another registered pension plan, and (vii) a period acceptable to the Minister throughout which member is employed outside Canada;

(emphasis added) [ 35 ] The Union argued that, because one of the scenarios listed in Article 8503(3) above contemplated inclusion of a period worked for a previous employer, the Pension Plan and its incorporation of

Article 8503 should be read as including time worked by employees for Ram Steel. [ 36 ] The Arbitrator disagreed with the Union’s position. The Arbitrator stated that the words “one or more” indicates that in order to satisfy the “ eligible service ” requirement set out in

Article 1.18(6), a registered pension plan need not include all periods listed in 8503(3)(a)(

i) to (vii). It must include, however, at least one of the enumerated “periods” contained in that provision. The list incorporates various periods that a registered pension plan can recognize as pensionable service. Issues [ 37 ] The Applicant states the issues as follows: 1. The Arbitrator’s analysis should have focussed only on the terms of the collective agreement, rather than the terms of the pension plan. 2. The Arbitrator’s

interpretation of the terms “credited service” and “service” in the collective agreement was unreasonable. 3. The Arbitrator’s analysis of the terms “continuous service” and “pensionable service” in the pension plan was incorrect and his conclusion unreasonable. Decision [ 38 ] While the Applicant suggests that the Arbitrator focussed on the terms of the pension, and not on the collective agreement between the parties, I cannot accede to that suggestion. His decision focussed on what had been agreed upon between the parties, and how that agreement was to be interpreted. He looked to the pension plan to see if there was any contrary

interpretation contained therein, and found that there was not. It was necessary for him to do so. If the employer in fact provided greater coverage under the Pension Plan than what it had contracted to provide, the employer might be held to the coverage under the Plan. The Arbitrator was called upon to decide whether the employer had done so. He found that it had not. [ 39 ] The Arbitrator’s decision as to whether previous employment with Ram Steel was to be credited under the pension plan followed other arbitral decisions, was logical in its analysis, and, in my view, was reasonable. So also was the Arbitrator’s

interpretation of the terms “credited service” and “service” in the collective agreement. [ 40 ] The Applicant argues that

Section 1.17 of the Pension Plan says that “Pensionable Service” shall mean All continuous service, and should therefore be read as including service with Ram Steel. However, the Pension Plan makes it clear that the service contemplated is service with the “Company”, and the plan defines the “Company” as being IPSCO. Therefore this argument fails. [ 41 ] Dealing with the third issue raised by the Applicant, the standard of review is correctness. [ 42 ] In my view, the decision of the Arbitrator was clearly correct. Regulation 8503(3)(

a) provides a number of periods under which benefits can be provided. The Respondent satisfies the requirements of 8503(3)(a)(i). The Respondent is not required to satisfy all of the requirements of 8503(3)(a); nor has the employer incorporated all of the possible listed scenarios into the pension plan by referencing

Article 8503. The employer provides pensionable benefits where “one or more” of the enumerated periods applies. The decision of the Arbitrator on this issue is correct in law. It would not be correct to read in all of the scenarios listed, as being applicable to

this pension plan; neither would such an

interpretation be a “reasonable expectation” of the employee. [ 43 ] The Court finds nothing in the decision of the Arbitrator justifying judicial intervention. Accordingly, the application is dismissed. [ 44 ] If the parties cannot agree upon costs, they may make submissions before me. Heard on the 30th day of May, 2013. Dated at the City of Calgary, Alberta this 4th day of July, 2013. R. J. Hall J.C.Q.B.A. Appearances: Mr. Murray D. McGown, Q.C. For the Applicant Mr. Rob Beeman for the Respondent