2011 NBCA 31, 2011 NBCA 31

COURT OF APPEAL OF NEW BRUNSWICK 73-10-CA THE CITY OF SAINT JOHN APPELLANT THE CITY OF SAINT JOHN APPELANTE - and - - et - SAINT JOHN FIREFIGHTERS’ ASSOCIATION,INTERNATIONAL ASSOCIATION OF FIREFIGHTERS, LOCAL 771 RESPONDENTS SAINT JOHN FIREFIGHTERS’ ASSOCIATION,INTERNATIONAL ASSOCIATION OF FIREFIGHTERS,

SECTION LOCALE 771 INTIMÉES The City of Saint John v. Saint John Firefighters’Association, International Association of FireFighters, Local 771, 2011 NBCA 31 The City of Saint John c. Saint John Firefighters’Association, International Association of FireFighters,

Section locale 771, 2011 NBCA 31 CORAM: The Honourable Justice Turnbull The Honourable Justice Robertson The Honourable Justice Green CORAM : L’honorable juge Turnbull L’honorable juge Robertson L’honorable juge Green Appeal from a decision of the Court of Queen’sBench: April 30, 2010 Appel d’une décision de la Cour du Banc de la Reine: Le 30 avril 2010 History of Case: Historique de la cause : Decision under appeal: 2010 NBQB 159 Décision frappée d’appel : 2010 NBBR 159 Preliminary or incidental proceedings: Court of Appeal: (NB CA), [2010] N.B.J.

No. 241(QL) Procédures préliminaires ou accessoires : Cour d’appel : (NB CA), [2010] A.N.-B. no 241(QL) Appeal heard: November 10, 2010 Appel entendu : Le 10 novembre 2010 Judgment rendered: April 7, 2011 Jugement rendu : Le 7 avril 2011

Reasons for judgment by: The Honourable Justice Robertson Motifs de jugement : L’honorable juge Robertson Concurred in by: The Honourable Justice Turnbull The Honourable Justice Green Souscrivent aux motifs : L’honorable juge Turnbull L’honorable juge Green Counsel at hearing: For the appellant: John L. Nugent and Scott A. Brittain For the respondents: Joël Michaud and Daniel P.L. Léger Avocats à l’audience : Pour l’appelante : John L. Nugent et Scott A. Brittain Pour les intimées : Joël Michaud et Daniel P.L. Léger THE COURT The appeal is allowed.

The order dismissing the application for judicial review is set aside as is the arbitration board’s decision. The grievance is dismissed. Termination of employment is a condition precedent to the granting of a permanent disability pension under the Pension Act . The appellant is entitled to costs of $2,500 on the application in the Court of Queen’s Bench and $2,500 in this Court, including costs on the motion to adduce further evidence. LA COUR L’appel est accueilli. L’ordonnance rejetant la requête en révision est annulée, ainsi que la décision du conseil d’arbitrage. Le grief est rejeté.

La cessation d’emploi est une condition préalable de l’octroi d’une rente d’invalidité permanente en vertu de la

Loi sur le régime de retraite . L’appelante a droit à des dépens de 2 500 $ pour la requête à la Cour du Banc de la Reine et de 2 500 $ pour l’appel à notre Cour, y compris les dépens de la motion en présentation de preuves additionnelles. The judgment of the Court was delivered by ROBERTSON, J.A. I. Introduction [ 1 ] Between 1999 and 2003, five unionized firefighters with the City of Saint John applied to the board of trustees of the City of Saint John Pension Plan for a permanent disability pension under the City of Saint John Pension Act , S.N.B 1994, c. 112.

The applications were made in accordance with the provisions of the applicable collective agreement and were accepted. Benefits were paid until 2007. In that year, the trustees determined the pensioners were no longer totally and permanently disabled. Those findings have never been challenged. Having lost their disability pensions, four of the five pensioners were eligible to receive a regular pension under the Pension Act, but they wanted to return to the workplace. The fifth was ineligible, but in fact was re-employed by the appellant City in a newly created position as a safety technician.

[ 2 ] The respondent Association filed a policy grievance claiming the former pensioners had a right to return to active service or to be placed on sick leave under the collective agreement until accommodated in the workplace. The City maintained that, under the Pension Act , the employment relationship is severed once an employee is granted a permanent disability pension, thereby negating any duty to accommodate the former firefighters. The majority of the arbitration board (hereinafter the “arbitration board” or “board”) accepted the grievance. The dissent declined the opportunity to offer reasons.

The board reasoned that loss of employment status because of a permanent disability is not in keeping with modern human rights legislation and protections commonly found in collective agreements. Having regard to what it considered “past practice”, the board construed the provisions of the collective agreement broadly and concluded employment status was not lost under the collective agreement once a disability pension issued.

As to the relevant provisions of the Act , the board reasoned that as the Act does not expressly terminate employment status upon receipt of a permanent disability pension, the provisions of the collective agreement prevailed. This is true even though s. 15(1) speaks of a person who “ceases to be an employee” and who because of a permanent disability qualifies for an annual disability pension for “life”.

The board would go on to explain its interpretative decision by recognizing a distinction between “active” and “passive” employment and by holding that s. 15(1) speaks only of persons who cease to be actively employed. [ 3 ] The application for judicial review was dismissed. The application judge held the review standard of reasonableness applied to the arbitration board’s

interpretation of the collective agreement, while the standard of correctness applied to its

interpretation of the Pension Act . The application judge held the board’s

interpretation of the collective agreement, when seen through the eyes of “past practice”, was reasonable. He went on to hold that, as the Act is private legislation, it must be construed strictly as against its promoters, the City. The application judge found the board’s

interpretation of the Act to be consistent with this approach. [ 4 ] I agree with the application judge’s decision regarding the applicable standards of review. In particular, I agree with his conclusion that the arbitration board’s

interpretation of the Pension Act is to be reviewed on the standard of correctness. The general rule is that no deference is owed to a tribunals’

interpretation of an “external statute”. On the facts of this case, the general rule is applicable. However, I respectfully disagree with the application judge’s finding that the arbitration board’s

interpretation of the collective agreement was reasonable and that its

interpretation of the Act was correct. [ 5 ] Briefly, the arbitration board’s

interpretation of the collective agreement hinges on

Article 11.01, a solitary provision which deals with the matter of “seniority”. However, to accept the board’s

interpretation and its underlying reasoning would lead to an absurdity: every firefighter and former firefighter, including retirees in receipt of a regular pension, would effectively maintain a life-time right to a job. This is why the board’s interpretative decision does not fall within the “range of possible, acceptable outcomes which are defensible in respect of the fact and law” and why the board’s

interpretation fails the review standard of reasonableness. [ 6 ] Both the arbitration board and the application judge interpreted the Pension Act narrowly/strictly, but for different reasons. The board effectively interpreted the Act narrowly so as to accommodate a broad but mistaken

interpretation of the collective agreement. With great respect, this is akin to having the tail wag the dog in circumstances where there is no tail – the tail being the collective agreement. The application judge’s decision to interpret the Act strictly, and as against the City, rests on the interpretative principle that private statutes of the Legislature are to be interpreted strictly against its promoters. In my view, this interpretative principle is of limited application in the modern law and has no application in the present case.

The notion that any private statute, such as those governing professional bodies, should be construed against its promoters (the governing body) speaks loudly of the need to keep an almost forgotten principle of statutory

interpretation confined to its original purpose. [ 7 ] As to the concept of “past practice”, it has no application in the present case. Past practice is tied to the parties’ mutual understanding or

interpretation with respect to the provisions of the collective agreement. The “ Collier decision”, on which the plea of past practice allegedly rests, involves the 1970 version of the Pension Act and the provisions of a collective agreement no longer in force. Once it is recognized that past practice is a manifestation of the estoppel doctrine, and once it is recognized that the estoppel doctrine cannot trump a legislative enactment, the plea of past practice falls to the wayside. [ 8 ] All of the above leads to the conclusion that the Pension Act is a stand-alone document to be interpreted in accordance with accepted principles of statutory

interpretation. Applying those principles (the contextual/purposive approach), one is led to the inevitable conclusion that, under the Act , employment status is lost once a permanent disability pension issues and, therefore, there can be no duty to accommodate the former firefighters. The distinction which the arbitration board drew between “active” and “passive” employment wilts away in the face of a contextual analysis of provisions that, in the end, admit no ambiguity. II. Background [ 9 ] The applications for permanent disability pension benefits were made pursuant to the provisions of the

applicable collective agreement then in force. As the arbitration board’s decision refers to the provisions of the 2004-2007 collective agreement, it is assumed no substantive differences exist between that collective agreement and those in force at the time the pension applications were made. Under

Article 14.03(13), any employee absent from the workplace for an extended period and in receipt of workers’ compensation or sick leave benefits was required to submit to a medical assessment by a medical board. If that board found the employee unable to perform his or her duties, on a permanent basis, the employee was obligated to apply for a disability pension under the Pension Act .

Pursuant to s. 15(1) of the Pension Act , any member of the plan who has not reached retirement age and “ceases to be an employee” by reason of “having become totally and permanently disabled” is entitled to receive an annual disability pension for “life”.

The expression “totally and permanently disabled” is defined, in s. 1 of the Act as a physical or mental impairment that prevents a member from engaging in employment for which he or she is reasonably suited by virtue of education, training or experience, and the disability is such that it can reasonably be expected to last for the remainder of the member’s “lifetime”. Each of the firefighters underwent medical assessments performed by the Pension Board’s physician in consultation with the firefighters’ physicians. All five applications were accepted.

Had their applications been denied, the employees would have been required to continue under the provisions of the sick leave bank entitlement in accordance with the collective agreement. [ 10 ] The following changes occurred after the disability pensions were awarded. Each pensioner ceased making contributions with respect to Employment Insurance, Canada Pension and the Pension Plan in question. Correlatively, the employer ceased making contributions on their behalf. Each pensioner received a lump sum payment for unused vacation time and each ceased accumulating vacation time going forward.

Each pensioner ceased being a member of the Association and ceased payment of union dues. The position each pensioner held in the Fire Department became available and was filled by members of the Association whose names appeared on the Fire Department’s promotional roster. Each pensioner’s name was removed from the Department’s “seniority list” and “promotional roster”.

Each pensioner became eligible for membership in the employer’s Retired Members Association. [ 11 ] Prior to 2007, no disability allowance under the Pension Act (1970) or disability pension under the current Act (1994 as amended) had ever been terminated, even though the legislation expressly contemplates such an occurrence should it be established that the pensioner is no longer totally and permanently disabled.

In 2006, the administrator of the pension plan took the unprecedented step of ordering a comprehensive review of the status of all those in receipt of disability pensions in order to determine whether they continued to qualify on the basis of a total and permanent disability, as provided for under s. 17(1) of the Pension Act (1994). However, the Act expressly excludes a review with respect to those pensioners in receipt of Canada Pension Plan disability benefits.

Section 20 of the Act states that a disability pension shall cease on the date at which the disabled person ceases to be totally and permanently disabled. Of the 99 pensioners not in receipt of Canada Pension Plan disability benefits, 80 were found to meet the eligibility requirement for total and permanent disability.

With respect to those employees who were found to be no longer disabled, City Council passed and subsequently implemented a resolution with the following effect: (1) persons who were eligible for retirement without actuarial penalty were permitted to do so; (2) if, however, their regular pension was less than their disability pension, the employer paid the differential such that there was no loss of pension income; (3) for those who did not qualify for regular retirement (under age 55), the City agreed to make good faith efforts to re-employ them having regard to their health and other relevant considerations.

With respect to category (2), there was a diminution in benefits which the City acknowledged and which was partially off-set by a yearly lump sum payment made by the City to the retirees. This resolution was passed as a gratuitous gesture to ease the financial transition for those who were migrating from a disability pension to another pension available under the Act . [ 12 ] As it happens, the four former disability pensioners, who qualified for regular pensions, were not offered the opportunity to be re-employed. The fifth pensioner did not qualify for a regular pension, but he wanted to return to work.

After assessing his abilities and interests the City accommodated him to the extent of creating a new position of safety technician. The record reveals two other pensioners were re-employed but they were not members or former members of the Association (Sandra Gregg and James Dudley, who were re-employed by the Police Commission, a distinct legal entity). I should also note the decision to “re-employ” a former disability pensioner has an impact on the worker’s regular pension. Pursuant to s. 21(2) of the Pension Act , time spent in receipt of permanent disability benefits is counted as pensionable service.

Hence, it would appear that our four former firefighters, who were not offered employment, would not be able to count the years while in receipt of pension benefits towards pensionable service, even though they otherwise qualified for a regular pension. III. The Majority Decision of the Arbitration Board [ 13 ] The arbitration board identified the central issue as whether the employment relationship is automatically severed when an employee, covered by the collective agreement, is granted a disability pension.

The Association advanced four arguments in support of its position. [ 14 ] First, the Association turned to

Article 11.01 of the collective agreement which deals with “seniority”. It reads, in part: “For employees who have completed the probationary period, seniority shall be effective from the employee’s initial date of hire by the Fire Department. Service shall be broken by resignation , discharge or failure to return to work when recalled from lay-off” (emphasis added). Based on that provision, the Association argued that as none of the former firefighters’ service with the City had been broken by any of the events listed, this was an indication that their employment status remained intact following the grant of the disability pensions.

[ 15 ] Second, the Association relied on the Collier decision in support of its “past practice” argument. The 1986 case involved a former City police officer who was in receipt of a disability allowance under an earlier version of the Pension Act , S.N.B. 1970, c. 63 . In that case, the City had refused to pay 75% of the cost of coverage for life insurance, health and dental benefits being incurred by those in receipt of disability pensions. With respect to existing workers, the City was obligated to pay that portion under the terms of the collective agreement.

The City took the position pensioners were “retired” and thus ceased to qualify as employees within the meaning of the collective agreement and the Pension Act . The arbitration board, chaired and authored by the late Mr. Collier, held that pensioners did not lose their employment status for all purposes. Based on a provision of the collective agreement and a provision of the Act , the board ruled in favour of the pensioners.

After the Pension Act (1970) was repealed and replaced in 1994, the City continued to act as it had in the past by paying the employer’s contribution for continuing life, health and dental benefits for those in receipt of disability pensions. [ 16 ] Third, the Association argued the essential elements of equitable estoppel had been established. The Association alleged it had relied on representations in the form of statements, made by City representatives (Messrs.

Beckett and Totten) prior to the signing of the 2006 collective agreement, that the City considered disability pensioners to be employees. [ 17 ] Fourth, the Association argued the City was guilty of discrimination under s. 3 of the Human Rights Act , R.S.N.B. 1973, c. H-11, by failing to accommodate disabled employees and by treating individuals who are 55 or older differently from those under 55.

The allegation of age discrimination was based on a policy statement of the City to the effect it would try to assist those who were in receipt of a disability pension but were ineligible for a regular pension because they were under age 55.

Apparently, the four former firefighters, who are over 55 and eligible for a regular pension, claimed discrimination because they were not being accommodated in a fashion similar to former pensioners who were under 55. [ 18 ] With respect to the appropriate remedy, the Association argued the former firefighters had the right to continue with their employment, under the provisions of the sick leave bank entitlement (Article 14:03(13) of the collective agreement) until such time as the City could conduct a proper assessment to determine if they could be accommodated in the workplace. [ 19 ] The City’s primary position was succinct.

The five firefighters ceased to be employees the day their disability pensions were approved by the board of trustees. The City relied on ss. 15(1) and 21(2) of the Pension Act . Section 15(1) states that a member who has not reached retirement age and “ceases to be an employee” by reason of having become totally and permanently disabled is entitled to receive a disability pension.

Section 21(2) states that, where a person ceases to be totally and permanently disabled by reason of “being re-employed” by the City, the period during which the person was in receipt of a disability pension shall count as pensionable service when that person becomes eligible for a regular pension. Read together, the City maintained that loss of employment status was a condition precedent to the granting of a disability pension. [ 20 ] The City also argued the doctrine of estoppel has no application because of the provisions of the Pension Act . The doctrine cannot trump a legislative enactment.

With respect to the argument of past-practice, the City maintained the practice extended only to the City’s obligation to contribute to the cost of providing former employees who are pensioners with certain benefits. The City went on to argue a duty to accommodate, tied to an alleged breach of the Human Rights Act , could not be extended to former employees. [ 21 ] The arbitration board framed the pivotal issue in terms of whether “the employment relationship is severed when a firefighter covered by the collective agreement is granted a disability pension under the Pension Act” .

The board also acknowledged that while its primary mandate is to interpret and apply the collective agreement, the power to interpret and apply statutes exists. However, when addressing the issue of employment status, arbitrators must first look to the collective agreement. The board went on to hold: “It is only where the rights of the parties as derived from the collective agreement are contrary to some legislative enactment that arbitrators can decline to give effect to them.” [ 22 ] Based on

Article 11.01, the seniority provision, the board concluded that as the firefighters were neither discharged nor did they resign or fail to return to work after lay-off, they did not lose their seniority and, therefore, they retained their employment status under the collective agreement. The board reasoned that if the parties had intended an employee’s service to be broken on receipt of a disability pension under the Pension Act , they could have easily made the termination of service explicit. The Board also noted the only provision in the collective agreement dealing with disability pensions,

Article 14.03(13), could have easily stated that an employee who is granted a disability pension loses his or her employment status, but the parties did not choose to frame it that way.

Article 14.03(13) merely states that if an employee is deemed to be unable to perform his or her duties on a permanent basis, the employee must apply for a disability pension and, if the application is denied, the employee is to continue under the provisions of the sick leave bank entitlement. Based on the plain and ordinary meaning of those two provisions of the collective agreement, the Board concluded that a firefighter who is awarded a disability pension under the Pension Act does not thereby lose his or her employment status.

[ 23 ] For greater certainty, the arbitration board also held its

interpretation was bolstered by consistent past practice based on the 1986 Collier decision. Despite changes in collective agreements and differing bargaining units, the City had continued to provide the same group life insurance, health and dental benefits on the same terms as other employees covered by the collective agreement. In the circumstances, the board said it was reluctant to reach a decision which would have the effect of setting aside a long- standing practice. [ 24 ] Next, the arbitration board dealt with the employer’s reliance on ss. 15(1) and 21(2) of the Pension Act .

The board’s interpretative approach is expressed in the following passage: The notion that an employee would completely lose his or her employment status immediately upon becoming totally and permanently disabled is simply not in keeping with modern human rights legislation and the protections commonly found in collective agreements, including the agreement under consideration here.

In the Board’s view, section 15(1) establishes two pre-conditions which a member must meet in order to qualify for a disability pension – the member must not have reached retirement age and must be considered as being totally and permanently disabled. The reference to a member ceasing to be an employee is passive in nature and does not purport to effectuate termination of employment.

More likely than not, the legislative intent was to identify persons who had ceased to be actively employed by reason of becoming totally and permanently disabled. [ 25 ] In short, the arbitration board interpreted the provisions of the Pension Act as speaking to “passive” and not “active” employment. The board also noted that neither s. 15(1) nor s. 21(2) of the Act expressly terminates employment status.

The inference one draws from the following passage is that the board viewed an implicit termination was not sufficient for purposes of defeating the provisions of the collective agreement: …we have found, for reasons already stated, that the fire fighters do not lose their employment status under the collective agreement when they are granted a disability pension. The Board recognizes that this

interpretation would have to give way if it was contrary to the provisions of the Pension Act . However, sections 15(1) and 21(2) of the Pension Act did not expressly purport to terminate the employment of persons granted disability pensions. Further, in the Board’s view, such a result does not flow by necessary implication from the language found in these provisions. [ 26 ] While the arbitration board ruled its finding on the issue of employment status was dispositive of the case, it ruled on the remaining issues should its interpretative decision be found “wrong” on judicial review.

With respect to the plea of equitable estoppel, the board held it had not been persuaded that the essential elements of reliance and detriment had been established. The board also rejected the age discrimination argument based on the City’s policy of assisting those who lost their disability pensions and were under 55 years of age. As these two issues were not raised before the application judge, there is no need to outline the board’s full reasoning. IV. The Application Judge’s Decision [ 27 ] Applying the review standard of reasonableness, the application judge found the arbitration board’s

interpretation of the collective agreement (Article 11.01) fell within the range of possible and acceptable outcomes, as articulated in Dunsmuir v. New Brunswick , 2008 SCC 9 , [2008] 1 S.C.R. 190. With respect to the plea of past practice and the Collier decision, the application judge found no basis for interfering with this aspect of the board’s ruling. Turning to the provisions of the Pension Act , the application judge ruled “correctness” was the proper standard of review.

He also upheld the reasoning of the board’s finding that the provisions of the Act are to be interpreted strictly: since the Act does not expressly terminate employment status, such status is not lost on the granting of a disability pension. [ 28 ] The application judge went one step further to cite Pierre-André Côté, The

Interpretation of Legislation in Canada , 3 rd ed., (Scarborough: Thomson Canada Limited, 2000) (Côté) for the proposition that private statutes invite a strict

interpretation, and that the same restrictive approach must be taken in regard to enactments that deprive persons of their individual rights and freedoms. The application judge focused on Professor Côté’s assertion that private Acts which create special rules for their “promoters” are to receive a restrictive

interpretation. The application judge also ruled that the Pension Act falls within this category because the City had control of its drafting. This unexpected ruling is challenged on this appeal by way of motion to introduce evidence to the contrary. [ 29 ] At the judicial review hearing, the City argued for the first time that if the arbitration board’s decision was

allowed to stand, the pension scheme may be no longer recognized as a registered plan under the Income Tax Act, R.S.C. 1985, c. 1 (5thSupp.). The same issue presented itself in an Alberta precedent: Calgary (City) v. International Association of Firefighters (Local 255),2006 ABQB 133, [2006] A.J. No. 266 (QL), aff’d 2008 ABCA 77, [2008] A.J. No. 190 (QL). The application judge refused to considerthis issue as it did not form part of the record under review. V. Standard of Review & The

Interpretation of External Statutes [30] Both parties agree the review standard of reasonableness applies to the arbitration board’s

interpretation of thecollective agreement. However, they cannot agree on the review standard applicable to the board’s

interpretation of the Pension Act. TheAssociation filed a Notice of Contention challenging the application judge’s ruling that correctness is the proper standard. The issuerequires us to retrace the relevant jurisprudence of the Supreme Court of Canada pertaining to the application of the deference doctrine inthe context of an administrative tribunal’s

interpretation of an “external statute”. [31] The first relevant decision is Bradburn v. Wentworth Arms Hotel, (SCC), [1979] 1 S.C.R. 846,which involved the decision of an arbitration board interpreting a collective agreement and a provision of the Ontario The LabourRelations Act, R.S.O. 1970, c. 232. In that case, Laskin C.J.C. indicated that deference to an arbitration board’s

interpretation of a statute,as opposed to the collective agreement, would not be warranted (at 849). In United Brotherhood of Carpenters and Joiners of America,Local 579 v. Bradco Construction Ltd., (SCC), [1993] 2 S.C.R. 316, [1993] S.C.J. No. 56 (QL), the Supreme Courtadopted a different tack. Writing for the Court, Sopinka J., noted that the rationale for deferring to an arbitrator’s

interpretation of acollective agreement (relative expertise) does not necessarily apply to questions of law involving the

interpretation of a statute or a rule ofthe common law (para. 31). He drew a distinction between arbitrators appointed on an ad hoc basis to decide a particular dispute arisingunder a collective agreement and a labour relations board’s responsibility for overseeing the ongoing

interpretation of its enablinglegislation and the development of labour relations policy. Sopinka J. concluded that

interpretations offered by the specialized boardswith respect to their enabling statutes were still owed deference, notwithstanding the absence of a privative clause (para.33). Theinference to be drawn from that ruling is that no deference should be granted to interpretative decisions of ad hoc labourarbitrators/arbitration boards tied to any statute, be it external or otherwise. With the passage of time this understanding of the law woulddissipate. [32] With respect to whether deference should be accorded to a tribunal’s

interpretation of an external statute, thelead decision of the Supreme Court is Canadian Broadcasting Corp. v. Canada (Labour Relations Board), (SCC),[1995] 1 S.C.R. 157, [1995] S.C.J. No. 4 (QL). In that case, the Court stated, as a general rule, curial deference need not be shown to anadministrative tribunal’s

interpretation of a “general public statute” except perhaps where the “external statute” is linked to the tribunals’mandate and is frequently encountered. This finding was made in the context of a decision made by a federal tribunal, the CanadaLabour Relations Board. The next decision is Toronto (City) Board of Education v. O.S.S.T.F., District 15, (SCC),[1997] 1 S.C.R. 487, [1997] S.C.J. No. 27 (QL). In that case, an ad hoc board of arbitration was asked to consider whether an employerhad just cause for dismissal. The arbitration board ruled “no”.

In reaching its conclusion, the board made reference to standards ofconduct mandated under the Education Act, R.S.O. 1990, c. E.2. The Supreme Court concluded deference was owed to the board’sruling. With respect to the

interpretation of the Education Act, the Court noted that the expert skill and knowledge that an arbitrationboard exercises when interpreting a collective agreement does not usually extend to the

interpretation of “outside legislation”, and thatthe

interpretation of a statute or the common law are generally reviewable on the correctness standard (para. 39). On the facts of the case,however, the Court ruled the standards mandated by the Education Act did not come into play. [33] The next relevant case is Dunsmuir v. New Brunswick, 2008, in which the Court stated: “Deference willusually result where a tribunal is interpreting its own statute or statutes closely connected to its function, with which it will haveparticular familiarity” (para.54).

Recall that in Dunsmuir the adjudicator’s interpretative decision of the enabling legislation, the PublicService Labour Relations Act, R.S.N.B. 1973, c. P-25, was granted deference. However, the adjudicator’s

interpretation failed to meet thethreshold standard of reasonableness. Hence, when it comes to interpreting their enabling statute, the distinction which Sopinka J. drewin Bradco between ad hoc labour arbitrators and administrative tribunals disappears. As a general rule, the interpretative decisions ofboth types of decision-maker are owed deference. [34] In short, Dunsmuir stands for the general proposition that deference is owed to a labour arbitrator’sinterpretation of the enabling statute and statutes closely connected to the arbitrator’s functions, with which he or she has familiarity.

Atthe same time, it must be recognized that correctness is the proper standard when the case involves “true questions of jurisdiction orvires”. However, the Court in Dunsmuir cautions that true questions of jurisdiction “will be narrow” (paras. 54 & 59). In Nolan v. Kerry(Canada) Inc., 2009 SCC 39, [2009] 2 S.C.R. 678, the Supreme Court took the opportunity to explain what was meant by the notion of“jurisdictional error” as discussed in Dunsmuir. Review courts must generally defer to the tribunal’s

interpretation of its own statute andonly exceptionally apply a correctness standard when the

interpretation of that statute raises a broad question of the tribunal’s authority.This qualification on Dunsmuir was a response to the fear of returning to the jurisdiction/preliminary question doctrine that plagued thejurisprudence for too many years.

[35] For the sake of completeness, I must refer to the Supreme Court’s most recent pronouncement which deals onlywith the question of whether deference is owed to an administrative tribunal’s “home statute”: Smith v. Alliance Pipeline Ltd., 2011 SCC7, [2011] S.C.J. No. 7 (QL).

Writing for all but one of the justices, Fish J. affirmed the proposition that, under Dunsmuir, when it comesto an administrative tribunal interpreting its home statute, the decision will be “usually” or “normally” reviewed on the standard ofreasonableness, except where the question raised is constitutional, of central importance to the legal system, or where it demarcates thetribunal’s authority from that of another specialized tribunal (paras. 28 and 37). The ninth judge, Deschamps J., offered concurringreasons which add a further dimension to the analytical framework.

She maintained that the courts should look to the jurisprudence or tothe enabling statute to determine whether the decision-maker actually has a particular familiarity with the statute. In other words, doesthe decision-maker have a particular expertise or experience relative to the court (para. 100)?

Deschamps J. goes on to elaborate that it isimperative that if deference is to be granted to a decision-makers home statute, it is either because a privative clause is found in thatstatute or because the decision-maker has a “specialized expertise” (para. 106). [36] The above analysis leads me back to the question originally posed: Did the application judge err in adoptingthe correctness standard of review in regard to the arbitration board’s

interpretation of an external statute, the Pension Act? Thejurisprudence of the Supreme Court directs that the review court must determine whether that external statute is closely connected to thearbitration board’s functions and whether the external statute is one with which the board has familiarity. In this instance, the answer hasto be “no”. Labour arbitrators in New Brunswick are not regularly called on to interpret provisions of the Act. Not only is the Act anexternal statute, it is a private statute that applies only to one employer and one group of employees.

Hence, only those few arbitratorswho are called on to resolve pension disputes between the City and its unionized employees will be presented with the opportunity tointerpret the Act. In point of fact, this is only the second reported case where an arbitration board has been called on to look at theprovisions of the City’s Pension Act. The only other case cited to this Court was the Collier decision, which is discussed below. [37] By contrast, the Court of Queen’s Bench has been called on to interpret the provisions of the Pension Act onseveral occasions.

This is so because the Act is applicable to both unionized and non-unionized workers of the same employer. Hence,any claim by ad hoc labour arbitrators or arbitration boards to possessing a relative expertise lacks a proper foundation (see Trainor v.Saint John and Board of Trustees of City of Saint John Pension Act (1984), (NB KB), 54 N.B.R. (2d) 1, [1984] N.B.J.No. 119 (Q.B.) (QL), Thorne et al. v. Board of Trustees of the City of Saint John Pension Act (1987), (NB CA), 84N.B.R. (2d) 343, [1987] N.B.J. No. 1042 (C.A.) (QL); Brien v. City of Saint John Pension Board, [1994] N.B.J.

No. 147 (Q.B.) (QL)and Amalgamated Transit Union Local 1182 v. The City of Saint John et. al., 2006 NBCA 70, [2006] N.B.J. No. 255 (QL)). See alsoBowater Maritimes Inc. v. Communications, Energy and Paperworkers Union Locals, 117,146,164 and 263, 2011 NBCA 22, [2011]N.B.J. No. 69 (QL), where this court applied the reasonableness standard to a labour arbitrator’s

interpretation of a collective agreementand a pension plan that had been negotiated between the employer and the employees’ unions, in circumstances where the provisions ofthe pension plan were deemed to be part of the collective agreement. This decision is consistent with Canadian Broadcasting Corp. v.Canada (Labour Relations Board), (SCC), [1995] 1 S.C.R. 157, [1995] S.C.J. No. 4 (QL) per Iacobucci J., at para. 49. [38] There is also a valid policy reason for refusing to grant deference to a tribunal’s interpretative decisionsconcerning the Pension Act.

In theory, an arbitration board could interpret a provision of the Act one way and yet, in the next case, theCourt of Queen’s Bench could interpret the same provision differently. Consistency as a goal is a valid reason for declining the invitationto extend deference to interpretative decisions, rendered by labour arbitrators, in regard to the provisions of the Act. For this reason andthose discussed earlier, the application judge was correct in applying the correctness standard in regard to the

interpretation of thePension Act and the reasonableness standard to the arbitration board’s

interpretation of the Collective Agreement. VI. Analysis & Application of Review Standards A.

Interpretation of the Collective Agreement [39] I turn first to the arbitration board’s interpretative decision pertaining to the collective agreement which attractsthe review standard of reasonableness. The impact of Dunsmuir on the deference doctrine continues with the Supreme Court’sacknowledgment that the sole deferential standard of review, reasonableness, is both an attitude of the court and a requirement of thelaw.

Writing for the Supreme Court, Bastarache and Lebel JJ. stated: The move towards a single reasonableness standard does not pave the way for a more intrusive review by courts and does not represent areturn to pre-Southam formalism. In this respect, the concept of deference, so central to judicial review in administrative law, has perhapsbeen insufficiently explored in the case law. What does deference mean in this context? Deference is both an attitude of the court and arequirement of the law of judicial review.

It does not mean that courts are subservient to the determinations of decision makers, or thatcourts must show blind reverence to their

interpretations, or that they may be content to pay lip service to the concept of reasonablenessreview while in fact imposing their own view. Rather, deference imports respect for the decision-making process of adjudicative bodieswith regard to both the facts and the law. The notion of deference "is rooted in

part in a respect for governmental decisions to create

administrative bodies with delegated powers" (Canada (Attorney General) v. Mossop, (SCC), [1993] 1 S.C.R. 554, atp. 596, per L'Heureux-Dubé J., dissenting). [para. 48] [40] Once the reviewing court is convinced that deference is due, the task of applying the reasonableness standardis at hand. Again, Dunsmuir provides meaningful guidance. The reviewing court must inquire into those qualities that make a decisionreasonable.

There are two: (1) reasons that reveal “justification, transparency and intelligibility” within the decision-making process; and(2) whether the decision falls within a range of “possible, acceptable outcomes which are defensible in respect of the facts and law”.

Thisis what the Court said: Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards ofreasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result.Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range ofacceptable and rational solutions.

A court conducting a review for reasonableness inquires into the qualities that make a decisionreasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concernedmostly with the existence of justification, transparency and intelligibility within the decision-making process.

But it is also concernedwith whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.[para. 47] [41] There can be no doubt that the arbitration board’s reasons for decision meet the test of “justification,transparency and intelligibility”. The reasons are comprehensive and there is no allegation of a failure to address an argument properlyraised and intelligently pursued. This leads one to ask whether the board’s

interpretation of the collective agreement falls within a rangeof “possible, acceptable outcomes which are defensible in respect of the facts and law”. In my respectful view, it does not. [42] There are only two provisions of the collective agreement which come into play in this case: Articles 11.01 and14.03(13).

Article 14.03(13) is neutral when it comes to the issue of whether the granting of a disability pension severs the employmentrelationship. It merely states that if an employee is deemed to be unable to perform his or her duties on a permanent basis, the employeemust apply for a disability pension under the Pension Act, but if the application is denied the employee is to continue under theprovisions of the sick leave bank entitlement. This leaves us with

Article 11.01, dealing with the preservation of “seniority” rights. [43]

Article 11:01 of the Collective Agreement defines “seniority” and states that “service shall be broken byresignation, discharge or failure to return to work when recalled from lay-off”. The arbitration board found that the former firefighters:(1) never resigned; (2) were never discharged, and (3) never failed to return to work when recalled from lay-off. The board thenreasoned that as the former firefighters did not fall within these three exceptions, they must be deemed to have retained their seniorityand, hence, they must be deemed to have retained their employment status under the collective agreement. The application judge foundthat the arbitration board’s

interpretation of the

Article was “a reasonable outcome expected based on the evidence presented to theArbitration Board”. With great respect, I disagree. [44] The first problem with the arbitration board’s interpretative conclusion is the lack of consistency between theconclusion and what actually transpired when the firefighters were awarded disability pensions. Their names were removed from theFire Department’s “seniority list” and “promotional roster”, and the positions that each occupied in the Fire Department immediatelyprior to their respective “retirements” became vacant and were filled, all without grievance or objection.

Indeed, one of the firefighters,Blake Crawford, had received a promotion prior to his being awarded a disability pension, due to a vacancy in the Fire Departmentcreated by another firefighter who had been awarded a permanent disability pension. However, these concerns raise the matter of “pastpractice” and, as will be explained, this type of argument has no application in cases where the rights of parties are governed by a statuteas opposed to a collective agreement. [45] The truly fatal aspect of the arbitration board’s

interpretation of the collective agreement is tied to itsreasoning. Recall, the board reasoned that as

Article 11.01 does not expressly state seniority is lost once a person is awarded a permanentdisability pension, neither is the worker’s status as employee. Employee status is only lost through resignation, discharge or the failure toreturn to work after a re-call. Accepting this to be so, it should follow that those firefighters who retired in the normal course of eventsbecause of service and age do not lose their seniority rights because they too are not expressly referred to in

Article 11.01. Applying theboard’s reasoning, so too do retirees retain their status as employees and maintain their seniority rights under the collective agreement. Inother words, because “retirement” is not expressly set out in

Article 11.01, all former members of the Association who have retired fromthe City remain employees of the City until the day they die. Taking this reasoning one step further, the board’s

interpretation of Article11.01 would require that the names of each retiree remain indefinitely on the seniority list. All of these conclusions are absurd. This iswhy the board’s

interpretation of the collective agreement fails the review standard of reasonableness. [46] I agree with the City’s contention that one cannot be both a “lifetime” pensioner and an employee, just as one

cannot be a retiree and an employee at the same time. This explains why

Article 11.01 makes no reference to those who are receiving a regular pension or a permanent disability pension. Indeed, there is support in the jurisprudence for the general proposition that employees who apply for and are awarded a disability pension are, in essence, taking “early retirement”: Calgary (City) v. International Association of Firefighters (Local 255). I should note that the City advanced an alternative argument based on arbitral jurisprudence. The City argued the very act of applying for and being granted a disability pension under the Pension Act constitutes a “resignation” within the meaning of

Article 11:01. In the circumstances, I do not find it necessary to deal with the argument and the decision of Arbitrator Teskey in Re: Inco Ltd., Manitoba Division , [1997] M.G.A.D. No. 55 (G.A.D.) (QL) (“ Inco ”). B. Past Practice and the Collier Decision [ 47 ] Strictly speaking, it may seem unnecessary to deal with the issue of past practice and the precedential significance of the Collier decision.

I choose to do so because too much has been made of its significance by both the arbitration board and the application judge, and because it is helpful to contrast the relevant provisions of the Pension Act (1970) with those in force under the Pension Act (1994). The relevant differences will be referenced in the next

section of my analysis. [ 48 ] Past practice is one of the most frequently asserted bases for the application of the estoppel doctrine. Typically, an argument with respect to past practice arises in circumstances where the parties have engaged in a long-standing practice that deviates from the terms of a collective agreement. The deviation may arise in one of two ways: either the practice is clearly in violation of the collective agreement, or there is a provision in the collective agreement which is ambiguous. In the latter context, the past practice is used to interpret the ambiguous provision.

Generally speaking, however, labour arbitrators are cautious when applying the estoppel doctrine where the basis of the representation has been past practice (Donald J.M. Brown, Q.C. and David M. Beatty, Canadian Labour Arbitration: Commentary and Current Notes , vol. 1, 4 th ed. (Aurora: Thomson Reuters Canada Ltd., 2010) (“ Brown & Beatty ”) at 2-86). It is also important to realize that the doctrine of estoppel is inoperative against legislation. In other words, the collective agreement cannot attempt to contract out of or contradict legislation ( Brown & Beatty at 2-85).

As well, if past practice is based on a “wrong”

interpretation of a statute, the wrong

interpretation cannot make law. As was stated in Imperial Oil Ltd. v. Canada; Inco Ltd. v. Canada , 2006 SCC 46 , [2006] 2 S.C.R. 447: “Estoppel by

interpretation has not yet become a recognized doctrine of statutory construction” (para. 59). [ 49 ] The Collier decision ( Saint John Policemen’s Protective Association, Canadian Union of Public Employees, Local 61 v. City of Saint John ) also involved a narrow question: whether the City was obligated to contribute 75% towards the cost of life insurance, dental and health benefits with respect to the those policemen who were in receipt of a permanent “disability allowance”, as it was then labeled under the provisions of the Pension Act (1970). It was common ground that under

Article 19.02 of the collective agreement, then in force, the City was obligated to pay 75% of the monthly premiums for permanent employees. The disagreement arose out of

Article 19.03(

d) which provided that “[i]n the case of absence for illness or disability” the City was to pay its share of the cost of the benefits. The

Article went on to state that it only applied to those employees who qualified under the Article. The Association argued that the City’s obligation to contribute towards the cost of the life insurance, dental and health benefits for those in receipt of disability allowances was clear. The majority of the arbitration board agreed and held that in these circumstances it was unnecessary to look at evidence of estoppel and past practice.

So far so good. [ 50 ] Next, the majority looked to the provisions of the Pension Ac t (1970) to determine whether those in receipt of disability allowances remained employees or, as the City argued, should be classified as retirees. In short, did receipt of a disability allowances terminate the employment relationship? To answer that question, the majority first turned to the common law rule that a permanent disabling illness has the effect of frustrating the contract of employment, thereby bringing it to an end.

The majority acknowledged the rule was a general one that could be defeated by the provisions of a statute. Hence, the majority turned to s. 9(1) of the Pension Act (1970). It provided that any participant who had completed one year of service who, due to a physical or mental disability, not of a temporary nature, and was no longer able to work, was entitled to a disability allowance for life. However, eligibility for the allowance was not only conditional on the person being permanently disabled, but section 9(1) also made it a requirement that the applicant be “retired on the order of Council”.

Despite the apparent clarity of that requirement, the same provision went on to deal with the possibility of the retiree recovering from his disability in the following terms: “Such allowance shall cease if and when such participant shall subsequently recover, and resume his duties or receive an equivalent or better office or employment with the City” (emphasis added). [ 51 ] As one can readily appreciate, the notion of a person being retired and the notion of that same person subsequently resuming their duties, raises an interesting question as to whether the participant’s employment status was suspended during the period the participant was in receipt of a disability allowance.

The majority of the arbitration board seized on that ambiguity to hold that the granting of a disability allowance did not sever the employment relationship completely. [ 52 ] Following the release of the Collier decision, the City complied with the ruling and eventually extended the same benefit to non-unionized persons who were in receipt of a disability allowance: re-designated a disability “pension” under the Pension Act (1994).

This leads one to ask whether the City’s practice of contributing towards the costs of life, health and dental benefits for both unionized and non-unionized employees amounts to a past practice giving rise to an estoppel. In effect, the Association is

arguing the City is now estopped from asserting the employment relationship is terminated once a disability pension issues. But this cannot be so because estoppel (past practice) cannot be used to circumvent an express provision of a statute. The City has every right to maintain its legal position that the Pension Act (1994) brings about a termination of employment once a disability pension issues. [ 53 ] A final point with respect to this issue.

Section s. 9(1) of the Pension Act (1970) appears to have obligated the City to accommodate those who subsequently lost their disability allowance because they were no longer totally and permanently disabled. That speaks of a person in receipt of disability allowance who recovers and who either resumes his or her old job or receives an equivalent or better one. If the City did not accommodate the participant, arguably the allowance did not cease. At least that is the way I read s. 9(1). However, the Pension Act (1994) reads differently. I shall come back to this point below. C.

Interpretation of the Pension Act (1994) - A Narrow/Strict Construction? [ 54 ] At this juncture, the only way the Association can succeed is by establishing that the provisions of the Pension Act (1994) support its contention that the issuance of a disability pension does not terminate, but rather preserves the employment relationship between the City and the recipient. At this point, the Association’s argument rests on the interpretative decision of the arbitration board. As stated earlier, the standard of review with respect to the board’s

interpretation of the Pension Act is correctness which, according to Dunsmuir , means: “When applying the correctness standard, a reviewing court will not show deference to the decision maker’s reasoning process; it will undertake its own analysis of the question” (para. 50). [ 55 ] The first issue I must deal with is the question of whether the Pension Act (1994) is to be construed narrowly/strictly as against the City. Both the arbitration board and the application judge took that position, but for different reasons.

The board reasoned that loss of employment status because of a permanent disability is not in keeping with modern human rights legislation and protections commonly found in collective agreements. Hence, the board adopted what it thought to be a broad

interpretation of the collective agreement and, correlatively, a narrow or strict

interpretation of the Pension Act so as to make the latter meld with the former. With great respect, the reasoning is defective. In effect, the board assumed that the tail (the collective agreement) could wag the dog (the Pension Act ) in circumstances where it has been shown that the dog does not even have a tail (the seniority provision). Of course, in law and fact, it is the dog (the Pension Act ) which wags the tail (the collective agreement). I say no more of the board’s reasoning. [ 56 ] The application judge’s decision to adopt a strict

interpretation of the Pension Act is problematic to the extent its legal foundation rests on a principle of statutory

interpretation which, according to the reported decisions, is rarely invoked. Relying on Professors Côté’s work, the application judge held that private statutes of the Legislature invite a strict

interpretation because they are drafted by their “promoters” and, therefore, must be construed, contra proferentem , to their disadvantage (p. 504, see also p. 227). Based on this understanding of the law, the application judge held that if the Pension Act were intended to eliminate an individual’s right to maintain employment status, an express provision was required to achieve this outcome. The application judge reasoned: The City had control over the drafting of the Pension Act in 1994 and its subsequent amendments in 1996, 1998 and 2000.

It failed to include a specific and clear termination [of employment] in its legislation. [ 57 ] It is interesting to note the other leading text on statutory

interpretation makes no mention of the strict

interpretation rule applicable to private statutes: Ruth Sullivan, Sullivan and Driedger on the Construction of Statutes , (Markham: Butterworths Canada Ltd., 2002.) However, Professor Côté’s work does address the topic. He posits that private statutes invite a strict

interpretation because they are drafted by their promoters. Professor Côté goes on to explain that the legislation is to be considered a contract between the Legislature (Parliament) and the promoter of the private legislation and for this reason should not be deemed to infringe upon the rights of third parties. If third parties are not mentioned in the statute, it is presumed that the Legislature did not hear from them at the time of the enactment, and therefore did not intend to infringe upon their rights. Professor Côté reveals that the “principle of limited effect of private statutes” has been codified in Quebec, and in the federal

Interpretation Act , R.S.C. 1985, c. I-21, s. 9, which reads: “No provision in a private Act affects the rights of any person, except as therein mentioned or referred to.” The New Brunswick

Interpretation Act , R.S.N.B. 1973, c. I-13, offers no equivalent. [ 58 ] Professor Côté also explains that, for the most part, judicial

interpretation of such enactments has focused on the charters of private firms operating in the public interest. Apparently, many companies at the turn of the 19 th century had arranged to have privileges and monopolies bestowed upon them by private statute. In the lead decision of the Supreme Court, decided in 1895, the principle of restricted effect was invoked to shelter the rights of a municipality from a company that had been given, by private act, certain privileges relating to the distribution of electricity: Compagnie pour l’éclairage au gaz de St-Hyacinthe v.

Compagnie des pouvoirs hydrauliques de St-Hyacinthe (1895), 1895 CanLII 69 (SCC) , 25 S.C.R. 168, at 173-174. Professor Côté explains that “private acts which create special rules for their promoters receive a restrictive

interpretation [and] are also sometimes subject to a rule of

construction whereby the text is interpreted to the detriment of its promoter: contra proferentem” (p. 504). In the accompanying footnote,he states: “[t]his is not considered to be a strong argument” and cites B.C. Electric Railway Co. v. Pribble, (UK JCPC),[1926] A.C. 466, for that proposition. [59] The legal understanding that private Acts of the Legislature are somehow subject to a strict

interpretation suchthat the legislation is construed against its promoter has far reaching consequences if one looks to the number of private statutes thathave been brought into force over the years. In 2010, retired Justice R.C. Stevenson prepared an Index to the Private Statutes of NewBrunswick 1987-2010, now on file with the New Brunswick Law Society Library, located in Fredericton. That document reveals over200 enactments and amendments. Many of the private statutes are directed at the governance of professional groups operating throughoutthe Province, including the Law Society Act, 1996, S.N.B. 1996, c. 89.

Are these enactments to be strictly construed against theirpromoters, the governing professional body, in favour of individual members whose livelihood is affected by decisions taken by thegoverning body or in favour of clients unhappy with the quality of the legal service received? Of course, the governing body is obligatedto act in the bests interests of the public, just as the Saint John City Council must act in the best interests of its citizens in circumstanceswhere the interests of both unionized and non-unionized employees are in play.

This is why the application judge’s understanding of therule of strict construction in the context of private statutes remains problematic. [60] To the extent that the law recognizes the rule of strict construction, applicable to private Acts of the NewBrunswick Legislature, the rule must be confined to cases falling within its historical origins: the granting of privileges or monopolies toprivate companies. The law says that in these cases there is a need to ensure that the rights of third parties are not infringed, except to theextent the infringement is clearly authorized.

Now is the time to dispel the mistaken notion that private enactments are somehownegotiated behind closed doors and, therefore, outside the purview of public scrutiny. Private Acts, like public Acts, are adopted inaccordance with the procedures applicable to public statutes, such as the Standing Committee on Private Bills. If a private Act bestows abenefit on its promoters at the expense of third parties (for example, by taking away common law rights), then it is for the courts todecide on a case by case basis the interpretative outcome based on the conventional rules of statutory

interpretation. [61] The rule of strict

interpretation applied in the context of private statutes has no application to the facts at hand. Ireach the conclusion that the application judge erred in accepting the Association’s interpretative argument based on a limited reading ofProfessor Côté’s respected text. In response to this particular finding, the City brought a motion in this Court to adduce evidence as towho in fact did draft the Pension Act (1994) so as to counter the application judge’s finding that the City was the one in control. I wouldallow the motion.

The City did not and could not anticipate the application judge ruling that the City was the promoter of the 1994 Actand its amendments.

For greater certainty, I would like to dispel the mistaken notion that the Pension Act (1994) was drafted at the handsof its promoters (the City). [62] Pursuant to s. 2, the Pension Act (1994) is administered by a board of trustees, designated the “PensionBoard”, which is composed of 12 trustees: the Mayor, two members of Council, the Commissioner of Finance for the City, the CityClerk, the City Manager, one member from each of the four bargaining units (including the Association), one person representing non-unionized employees of the City and, finally, one member of the City of Saint John Retired Members Association.

Except for the Mayor,the two Councilors and the member of the Retired Members Association, all of the board members must be employees of the City. Thecomposition of the Pension Board is divided equally between management/elected officials and workers. The Pension Act (1994) wasdrafted by the late Deno Pappas, Q.C., at that time solicitor for the Pension Board. The belief that the City was the promoter of the Actdoes not accord with the establishment of an independent board of trustees.

Hence, it would be improper to insist that the City used theAct as a vehicle for promoting its self-interest at the expense of its unionized and non-unionized workers. D. A Contextual/Purposive Approach to the

Interpretation of the Pension Act (1994) [63] The interpretative question to be addressed is whether the Pension Act (1994) automatically severs theemployment relationship between the City and an employee, once a permanent disability pension issues under that Act. Alternativelystated, is the loss of employment status a condition precedent to the granting of a disability pension? The question arises by virtue of thefact that, while the Act speaks of a permanent disability pension, the Act also states that a disability pension shall cease on the date thedisabled person ceases to be totally and permanently disabled.

The definition of “totally and permanently disabled” refers to thoseemployees who are members of the pension plan and who are no longer engaging in any employment for which the member isreasonably suited, by reason of a physical or mental impairment that can be expected to last for the remainder of the member’s life.Within this narrow context, the former pensioners assert that they did not lose their employment status simply because they were paid adisability pension.

This leaves us to consider what the Act says or does not say. [64] The City provided us with a comprehensive contextual analysis of the relevant provisions of the Pension Act(1994) in support of its thesis that entitlement to a disability pension is conditional on the person losing his or her employment status.Indeed, the City attempted to persuade us that, if we reached a contrary conclusion, the pension plan scheme would fail to meet theregistration requirements of the Income Tax Act.

Fortunately, I do not have to travel that far down the road to reach the conclusion Iexpressed at the beginning of these reasons.

[ 65 ] My analysis starts with s. 15(1) of the Pension Act (1994), which reads: “Subject to this Act, a member who has not reached retirement age and ceases to be an employee by reason of having become totally and permanently disabled, is entitled to receive an annual disability pension for life calculated in the manner set forth in subsection 10(2).” In my mind, there is no ambiguity in this provision. You must cease to be an employee if you are to receive a disability pension. But that is not the end of the matter. A contextual and purposive analysis to the

interpretation of legislation, as mandated by the Supreme Court of Canada, requires the decision-maker to see if there are other provisions of the Act which may contradict or raise a question as to whether loss of employment status was intended in all circumstances. Neither the arbitration board nor the Association was able to identify such a provision. On the other hand, the City turned to s. 21(2) of the Pension Act (1994) which reinforces its

interpretation of s. 15(1). Section 21(2) reads: “Where a person ceases to be totally and permanently disabled by reason of being re-employed by the City and subsequently becomes entitled to a pension under

section 10 or 11, the period during which that person was in receipt of a disability pension shall count as pensionable service.” The significance of the word “re-employed” is glaring. It signifies that the former holder of a disability pension can only be credited with pensionable service for the time spent in receipt of a disability pension if in fact that person is re-employed. To be re-employed you must first lose your employment. [ 66 ] There are other provisions of the Pension Act (1994) which also support the City’s

interpretation. The composition of the Pension Board is one example. As stated earlier, except for the mayor, the two Councillors and the member of the Retired Members Association, all of the board members must be employees of the City. The implication is that members of the Retired Members Association, which includes those in receipt of disability pensions, are not employees. I admit this is not a particularly compelling argument, even if I were to factor in all of the other related provisions which the City cited to this Court. But it is an argument which the Association failed to refute.

A stronger argument is found in the definition of total and permanent disability which refers to a disability which is expected to “last for the remainder of the member’s lifetime”. Surely the inference that one can draw from that definition is that the applicant’s tenure as an employee must come to an end. Then there is s. 15(1) which speaks of those who are entitled to receive an “annual disability pension for life” because of a permanent and total disability. Once again the reference to lifetime is telling.

It signals, if not reinforces, the notion that the employment relationship is over. [ 67 ] Finally, we must turn back the clock to the Pension Act (1970) and recall the ambiguity that was being addressed in the Collier decision. Section 9(1) made it a requirement that the applicant be “retired on the order of Council”.

Despite the apparent clarity of that requirement, the same provision went on to deal with the possibility of the retiree recovering from his disability in the following terms: “Such allowance shall cease if and when such participant shall subsequently recover, and resume his duties or receive an equivalent or better office or employment with the City.” The equivalent provisions in the Pension Act (1994) are ss. 20 and 21, and none of the ambiguous language discussed in the Collier decision is present.

Specifically, the “duty to accommodate” language found in the 1970 Act, which I referred to earlier in these reasons, has vanished from the Pension Act (1994). [ 68 ] The above analysis leads me back to the arbitration board’s way of dealing with what otherwise appears to be unambiguous wording of the Pension Act (1994). The Board’s response is to recognize a distinction between “active” and “passive” employment.

These concepts do not appear to exist in the arbitral jurisprudence and no valid and persuasive policy has been advanced which would justify an interpretative approach to an otherwise unambiguous provision. Accordingly, the arbitration board’s

interpretation of the Pension Act (1994) fails the correctness standard of review, subject to the Association`s final two arguments. [ 69 ] The Association argues the City’s

interpretation of the Pension Act (1994) is inconsistent with the Human Rights Act and the Workers’ Compensation Act R.S.N.B. 1973, c. W-13. The Association argues under the Human Rights Act , employers are required to accommodate an employee’s physical disabilities to the point of undue hardship, while under the Workers’ Compensation Act employers are required to maintain an employee’s position for up to a maximum of two years following a workplace injury.

My response to these arguments is relatively brief as they were not fully explored in either the Association’s written or oral submissions to this Court. [ 70 ] As to the application of the Workers Compensation Act , the Association referred us to s. 42.1 of the Act which deals with the obligation of employers to accommodate workers who were in receipt of compensation benefits but who have recovered from their injuries and are now capable of returning to their old job or other suitable employment with the same employer.

Depending on the circumstances and the type of employment, the employer is effectively obligated to keep the worker’s job open for a maximum of up to two years. I assume the Act is being cited as an example of accommodation of the disabled in the workplace. In my view, it is significant that the period of employer accommodation is limited to a maximum of up to two years. This suggests that accommodation for a longer period would impose an undue hardship on employers.

In the present case, the former pensioners left their jobs some five to eight years earlier. [ 71 ] As to the application of the Human Rights Act , the Association has abandoned its age discrimination argument and argues that the Pension Act should be interpreted so as to be consistent with the Human Rights Act under which a duty to accommodate may arise at law. Frankly, it has not been explained how it is that the Pension Act is being interpreted in a manner which is inconsistent with the provisions of the Human Rights Act.

Perhaps, the argument is that if the Human Rights Act requires the accommodation of workers so too does the Pension Act and it matters not what that Act clearly states. What the Association fails to

acknowledge is that, in fact, the City did take steps which could be viewed as acts of reasonable accommodation. The City might well argue that the resolution (discussed earlier) gratuitously extending certain benefits and advantages to former pensioners, together with access to other existing pension benefits, does in fact and law provide meaningful accommodation up to the point of undue hardship. There is also the potential plea that it is simply unrealistic to expect this employer to find comparable jobs for persons who have been out of the workplace for between five and eight years.

From the outset, the Association has taken the stance that loss of employment status because of a permanent disability is not in keeping with modern human rights legislation. However, it should be apparent that an employer’s duty to accommodate has its limits (the point of undue hardship). [ 72 ] Finally, this leads one to acknowledge the Association’s claim for alternative relief.

If the City is unable presently to accommodate the former pensioners by finding comparable jobs, the Association maintains that the City must allow the former pensioners to draw down from the sick leave bank built up by those who have been working for the last five to eight years. This argument raises the question of whether the Association has abandoned its obligation to look after the legitimate interests of all of its members at the expense of a few (former disability pensioners). Fortunately, I do not have to answer that question in the circumstances of the present case. VII.

Disposition [ 73 ] Termination of employment is a condition precedent to the granting of a permanent disability pension under the Pension Act . I would allow the appeal, set aside the order dismissing the application for judicial review and grant an order setting aside the arbitration board’s decision. It follows that the grievance is to be dismissed. The City is entitled to costs of $2,500 on the application in the Court of Queen’s Bench and $2,500 in this Court, including costs on the motion to adduce further evidence. ____________________________________ J.T. ROBERTSON, J.A.

WE CONCUR: ____________________________________ WALLACE S. TURNBULL, J.A. ____________________________________ BRADLEY V. GREEN, J.A.