Date: 20091022
Docket: A-75-09
Citation: 2009 FCA 306
CORAM: SHARLOW
J.A.
RYER
J.A.
TRUDEL
J.A.
BETWEEN:
HAROLD MACNEIL
Applicant
and
CANADA EMPLOYMENT INSURANCE
COMMISSION
Respondent
REASONS FOR JUDGMENT
RYER J.A.
[1]
This is an
application for judicial review of a decision (CUB 71590) of the Honourable
David G. Riche, acting as an umpire, in which he allowed the appeal of the
Employment Insurance Commission (the “Commission”) from a decision of the Board
of Referees, dated May 8, 2008.
[2]
The central
question in this application is whether the monthly payments that Mr. Harold
MacNeil received from the United Association of Plumbers, Pipefitters and
Welders, Local 682 Pension Plan (the “Pension Plan”) constitute earnings,
within the meaning and for the purposes of sections 35 and 36 of the Employment
Insurance Regulations, SOR/96-332 (the “Regulations”), that must be
deducted from the benefits payable to Mr. MacNeil on the basis provided for in
section 19 of the Employment Insurance Act, S.C. 1996, c. 23 (the
“Act”).
[3]
In the
circumstances of this application, the resolution of this issue depends on
whether the pension to which Mr. MacNeil is entitled under the Pension Plan is
a retirement pension arising out of Mr. MacNeil’s employment, as contemplated
by the definition of pension in subsection 35(1) of the Regulations.
[4]
The
relevant provisions of the Act and the Regulations are reproduced in the
appendix to these reasons.
BACKGROUND
Mr. McNeil’s Circumstances
[5]
Mr.
MacNeil was a member of the United Association of Plumbers, Pipefitters and
Welders, Local 682 (the “Union”) from November 1, 1966 to September 1, 2007. He
became a member of the Pension Plan on January 1, 1982.
[6]
Mr.
MacNeil left his employment with Lockerbie and Hole Industrial Inc. (the
“Employer”) on July 7, 2007 and established a benefit period effective November
18, 2007.
[7]
In his
application for benefits, Mr. MacNeil advised the Employment Insurance
Commission (the “Commission”) that he was receiving a monthly pension from the
Pension Plan of $995.53. In response, the Commission determined that these
monthly amounts constituted earnings that would reduce the benefits payable to
him under the Act. Dissatisfied with that determination, Mr. MacNeil appealed
to the Board of Referees.
The Collective Agreement and the Pension
Plan
[8]
The
Pension Plan was established in 1979 as a result of negotiations between a
number of Cape Breton unions, including the Union, and the employers of the day. The
Pension Plan is registered under the Nova Scotia Pension Benefits Act, R.S.N.S.
1989, c. 340, under registration number 0925834 (applicant’s record page 75).
[9]
The
specific agreement that mandated the establishment of the Pension Plan is not
in the record. However, excerpts from agreements stipulating the terms and
conditions of Mr. MacNeil’s employment for various years (each a “Collective
Agreement”) were put into evidence before the Board of Referees.
[10]
The
versions of the Collective Agreement in the record contain provisions agreed
upon between the Employer and the Union with respect to the Pension Plan. In
particular, those provisions stipulate that:
(a) the
Pension Plan is to be governed by a trust agreement under which the Pension
Plan is to be controlled by trustees, half of whom are to be appointed by the
Union and half by the employers;
(b) contributions
to the Pension Plan under the Collective Agreement covering industrial
projects, effective July 1, 2005 to June 30, 2008, which counsel for Mr.
MacNeil confirmed to be applicable to Mr. MacNeil, are as follows:
(b)
The employer shall make contributions for Journeymen at the rate per
hour paid as follows:
● Five dollars and twenty-five
cents ($5.25) for Journeymen; and
● Three dollars and
seventy-five cents ($3.75) for Apprentices
(Applicant’s record pages 52 and
53)
and;
(c) if the
Pension Plan is discontinued, the prospective contributions that would
otherwise have been made to the Pension Plan are to be added to the employees’
hourly wages and shall then become part of the wage package.
[11]
A letter
dated February 8, 2008, from a representative of the employers (the “February
8, 2008 Letter”) indicates a practice that certain amounts payable by employers
can be allocated by the Union among the various benefit packages that are
available to employees, including the Pension Plan. This is evident from
paragraph 2 of that correspondence (applicant’s record page 63) which reads as
follows:
In every
round of bargaining there has been an agreed monetary package increase, and the
employers have consistently told the unions that they may distribute the
increase amongst the various elements of the hourly wage package as they see
fit, provided only that the total negotiated hourly package does not increase
by a sum greater than that agreed to in the bargaining process. By way of an
example, if the parties agreed that the wage package should increase by one
dollar ($1.00), then each union would have the choice as to how they wished to
distribute that dollar amongst the elements of their wage package. They could
place ninety-one cents ($0.91) on their hourly wage rate and nine cents ($0.09)
on their holiday and vacation pay to account for the dollar. Alternatively,
they could place the entire dollar onto their health and welfare package, or
onto their pension package. Or they could distribute it in whatever amounts
they wished between the hourly rate, the holiday and vacation allowance, health
and welfare package, the pension and/or the assorted training funds that
various unions have incorporated into their collective agreements.
(Applicant’s
record page 63 -- Emphasis added)
The record contains no excerpt from any Collective Agreement
that sanctions this apparent practice.
[12]
The
Pension Plan is summarized in a booklet entitled “U.A. Local 682 Cape Breton
Plumbers & Pipefitters Pension Plan Members’ Booklet, January 2001” (the
“Pension Booklet”). The introduction to the Pension Booklet states the purpose
of the Pension Plan as follows:
It was
established to provide you with a measure of financial security upon your
retirement.
(Applicant’s
record page 84)
[13]
The
Pension Booklet stipulates that a member of the Union automatically becomes a member of the
Pension Plan after working 1,000 hours. However, if the employee leaves the
Union before completing two years of continuous service, no pension benefits
are payable to him. In addition, the Pension Booklet specifies the benefits to
which a retiree is entitled as follows:
● $.0015
per month for each hour worked from January 1, 1979 to December 31, 1982,
plus
● $.0252
per month for each hour worked from January 1, 1983 to June 30, 1990,
plus
● $.0186
per month for each $1.00 of contribution made on your behalf by your Employer
from July 1, 1990 to December 31, 1996,
plus
● $.0169
per month for each $1.00 of contribution made on your behalf by your Employer
from January 1, 1997 forward.
(Applicant’s
record page 87)
THE DECISION OF THE BOARD OF REFEREES
[14]
The
majority of the Board of Referees determined that the Pension Plan is a private
pension fund and, for that reason, it does not fall within the definition of a
pension in subsection 35(1) of the Regulations. While the majority did not
spell out what they meant by the term private pension fund, they referred to
two decisions of umpires (CUB 15310 and CUB 16101) that indicate that a private
pension plan is one voluntarily established by an employee that is in the
nature of a savings account that might or might not be funded out of employment
earnings. The majority of the Board of Referees based their conclusion upon the
following findings:
It is our
understanding from reading Ex 9-19 that the Union entered into an agreement
with the employer. Information from Ex 9-19 indicates that the policy from 1979
up to the filing of benefits dealing with Harold MacNeil is that contributions
to the Union pension were made in wage packages and it was up to the Union to disperse
the moneys as they saw fit. The Union put money in a pension package and
administered the pension in the same way from 1979 up to the present time 2008
until an appeal from Harold MacNeil was received. The Union has
administered the plan consistently over the years and there was only one.
(Applicant’s
record page 104)
[15]
The
reference in these findings to Ex 9 – 19 is to a letter from a representative
of the Union that refers to “an agreement with the employer”. In that letter,
the representative refers to the “collective agreement” (applicant’s record
page 66), thus indicating that certain of these findings of the Board are
interpretations of the Collective Agreement. These findings also refer to the "pension"
and the "plan", and can be taken as interpretations of the Pension
Plan.
THE DECISION OF THE UMPIRE
[16]
The Umpire
allowed the Employment Insurance Commission’s appeal, stating:
. . . It is
my view that this pension is not a private pension but one that arises out of
employment and should be allocated. If there was no employment, there would be
no pension. The pension arises out of employment because this was negotiated by
the union whereby the claimant’s earnings would be partially put into a pension
fund by the employer. These monies would only become available to the claimant
if the pension fund was discontinued. Then presumably he would receive a larger
hourly rate. It does not, however, provide for him to own the specific amount
that he has deposited into it. The pension fund presumably is for all of the
workers and it arises out of his working arrangements within the union with his
co-workers.
(Applicant’s
record tab 2, page 3)
[17]
This
excerpt from the Umpire’s decision indicates that he concluded that the amounts
received by Mr. MacNeil constituted earnings that had to be allocated in
accordance with sections 35 and 36 of the Regulations because those amounts
were paid to him out of a Pension Plan that fell within the definition of
pension in subsection 35(1) of the Regulations. In allowing the Commission’s
appeal, the Umpire disagreed with the findings of the Board of Referees, quoted
in paragraph 14 of these reasons, and concluded that the Pension Plan is not a
private plan. In holding that the Pension Plan arose out of Mr. MacNeil’s
employment, the Umpire determined that the Pension Plan was put in place as a
result of negotiations undertaken between the Union and the employers that established the
terms of Mr. MacNeil’s employment. He went on to find that if Mr. MacNeil had
not been employed as he was, he would not have been able to join the Pension
Plan. In addition, the Umpire found that unlike an RRSP or a savings account, Mr.
MacNeil did not own or control the specific amounts that had been put into the
Pension Plan on his behalf.
ISSUE
[18]
The issue
in this application is whether the Umpire erred in reversing the decision of
the Board of Referees on the basis of his conclusion that the Pension Plan arose
out of Mr. MacNeil's employment and therefore fell within the definition of
pension in subsection 35(1) of the Regulations.
DISCUSSION
1. Did the Umpire select the correct standard
of review?
Standard of Review by this Court
[19]
This Court
is required to determine if, in his review of the decision of the Board of
Referees, the Umpire erred in the selection of the correct standard of review
and its application to that decision. (See Stone v. Canada (Attorney
General), 2006 FCA 27, [2006] 4 F.C.R. 120; Meechan v. Canada (Attorney General), 2003 FCA 368, 126
A.C.W.S. (3d) 267.
[20]
It is well
settled that the selection of the standard of review is a question of law (see Dr.Q
v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R.
226, 2003 SCC 19). It is also well settled that this Court will review
determinations by Umpires on questions of law using the correctness standard
(see Canada (Attorney General) v.
Sveinson (C.A.),
2001 FCA 315, [2002] 2 F.C. 205; Canada (Attorney General) v. Kos, 2005 F.C.A. 319, [2005] F.C.J. No. 1650
(QL)).
The Umpire’s Selection of the Standard of
Review
[21]
The Umpire
did not stipulate the standard of review upon which he reviewed the decision of
the Board of Referees on the question of the classification of the Pension
Plan. It would have been helpful if he had done so.
[22]
In my
view, the Umpire reviewed that question on the correctness standard, as argued
by counsel for Mr. MacNeil. Nothing in the reasons of the Umpire indicates that
he showed any degree of deference to the Board of Referees in his review of its
conclusion that the Pension Plan did not arise out of Mr. MacNeil’s employment
and the findings upon which that conclusion was based.
Did the Umpire Err in Selecting the
Correctness Standard?
[23]
Counsel
for Mr. MacNeil argues that the Umpire should have applied the reasonableness
standard because the question that the Umpire was reviewing – whether the
Pension Plan arose out of Mr. MacNeil’s employment – is a question of mixed
fact and law. I do not agree.
[24]
The
application of a legal standard to a set of factual findings is typically
regarded as a question of mixed fact and law which is reviewed on a standard of
reasonableness, unless there is a readily extricable question of law (see Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190, 2008 SCC 9, at para. 52).
[25]
In this
application, it is undisputed that the legal standard is the definition of
pension in subsection 35(1) of the Regulations. It is equally clear that the
monthly payments that the Commission classified as earnings for the purposes of
sections 35 and 36 of the Regulations were received by Mr. MacNeil under the
Pension Plan, a contractual agreement that was put in place as a result of
another contractual agreement, the Collective Agreement, both of which were
binding upon Mr. MacNeil and the Employer. As a result, the application of the
statutory definition in these circumstances is essentially determined by
interpretations of the Collective Agreement and the Pension Plan.
[26]
In my view,
interpretations of contracts such as these are questions of law (see Signature
Plaza Sport Inc. v. Canada (F.C.A.), [1994]
F.C.J. No. 253, 169 N.R. 321 at para. 14; Alberta
Giftwares Ltd. v. The Queen, [1974] S.C.R. 584 at p. 588, 36 D.L.R.
(3d) 321 at p. 324; and in the context of a collective agreement Voice Construction Ltd. v. Construction & General Workers' Union,
Local 92, [2004] 1 S.C.R. 609, 2004 SCC 23 at paras. 27 and 29).
[27]
Accordingly,
it follows that the Umpire was required to review the Board of Referees’
determination of whether the Pension Plan arose out of Mr. MacNeil’s employment
on the standard of correctness and in selecting that standard, he made no error.
2. Did the Umpire properly apply the
correctness standard of review?
Standard of Review by this Court
[28]
Having
determined that the Umpire correctly chose the correctness standard as the
basis for his review of the decision of the Board of Referees, it is now
incumbent upon me to determine whether the Umpire properly applied that standard
of review. Accordingly, the question is whether the Umpire was correct in
deciding that the Pension Plan arose out of Mr. MacNeil’s employment.
[29]
In the
circumstances under consideration, the Umpire essentially substituted his view
for that of the Board of Referees on matters of interpretation of two contracts,
the Collective Agreement and the Pension Plan. As previously indicated,
interpretations of contracts are questions of law. Accordingly, in reviewing
the application of an umpire’s determination of these questions of law, it is
my view that the applicable standard of review is correctness.
[30]
In interpreting
the provisions of the Collective Agreement and the Pension Plan, the Umpire found
that the Pension Plan was not a private plan that was in the nature of a
savings plan or an RRSP and that Mr. MacNeil had no legal right to control
contributions made to the Pension Plan on his behalf. I agree with these legal
conclusions and that they support the Umpire’s determination that the Pension
Plan arose out of Mr. MacNeil’s employment.
[31]
In my view,
the Umpire’s determination that the Pension Plan arose out of Mr. MacNeil's
employment is further supported by other provisions of the Collective Agreement
and the Pension Plan.
[32]
First, the
provision of the Collective Agreement that is reproduced in paragraph 10 of
these reasons stipulates that the employer must contribute a specific amount to
the Pension Plan for every hour worked by Mr. MacNeil. This provision admits of
no discretion or control on the part of Mr. MacNeil or the Union as to whether or not the stipulated
amounts actually go into the Pension Plan or are otherwise deployed. While the
February 8, 2008 Letter might be interpreted as indicating a contrary practice,
that letter is merely an attempt to demonstrate that the Collective Agreement
has been altered by the suggested practice. In my view, that letter cannot be
accepted as contradicting the legal substance and clear wording of the
Collective Agreement. Furthermore, the “practice” referred to in the February
8, 2008 Letter simply refers to negotiated increases in the monetary package. Thus,
even if that letter were to be considered, it does not contradict the specific contractual
obligation of the Employer to contribute a specific amount to the Pension Plan
for each hour worked by Mr. MacNeil. The specific contractual obligation demonstrates
that contributions made by the Employer into the Pension Plan on Mr. MacNeil’s behalf
vary directly with the amount of work that he does. In my view, this contractual
obligation provides a clear causal connection between Mr. MacNeil’s employment
and the Pension Plan out of which he received the monthly payments in issue.
[33]
Secondly,
as indicated in the excerpt from the Pension Plan that is reproduced in
paragraph 13 of these reasons, the amount of Mr. MacNeil’s pension depends upon
the number of hours that he worked over the years that he was a member of the
Pension Plan. This also provides a clear and direct linkage between Mr.
MacNeil’s employment and the Pension Plan.
[34]
The legal interpretations
of the Collective Agreement and the Pension Plan made by the Umpire together
with my additional interpretations of those contracts that I have made lead me
to conclude that the Umpire made no error in applying the correctness standard
to his review of the decision of the Board of Referees and that he was correct
in reversing that decision.
[35]
I would
add that even if the standard of review of the question of whether the Pension
Plan arose out of Mr. MacNeil's employment was reasonableness, as contended by
counsel for Mr. MacNeil, in my view, the findings of the Umpire, together with
my additional findings, are more than sufficient to demonstrate that the Board
of Referees made an unreasonable decision in concluding that the Pension Plan
did not arise out of Mr. MacNeil's employment.
DISPOSITION
[36]
For the
foregoing reasons, I would dismiss the application for judicial review, with
costs.
"C. Michael Ryer"
"I
agree
K. Sharlow J.A."
"I
agree
Johanne Trudel J.A."
APPENDIX
Employment
Insurance Act,
S.C. 1996, c. 23
|
Earnings in periods of unemployment
19. (2)
Subject to subsections (3) and (4), if the claimant has earnings during any
other week of unemployment, there shall be deducted from benefits payable in
that week the amount, if any, of the earnings that exceeds:
(a) $50, if the claimant’s rate
of weekly benefits is less than $200; or
(b) 25% of the claimant’s rate
of weekly benefits, if that rate is $200 or more.
…
|
Rémunération au cours de périodes de chômage
19. (2)
Sous réserve des paragraphes (3) et (4), si le prestataire reçoit une
rémunération durant toute autre semaine de chômage, il est déduit des
prestations qui lui sont payables un montant correspondant à la fraction de
la rémunération reçue au cours de cette semaine qui dépasse 50 $, ou
vingt-cinq pour cent de son taux de prestations hebdomadaires si celui-ci est
de 200 $ ou plus.
[…]
|
|
Regulations
54. The
Commission may, with the approval of the Governor in Council, make
regulations
…
(s) defining and determining
earnings for benefit purposes, determining the amount of those earnings and
providing for the allocation of those earnings to weeks or other periods;
…
|
Règlements
54. La
Commission peut, avec l’agrément du gouverneur en conseil, prendre des
règlements:
[…]
(s) définissant et déterminant
la rémunération aux fins du bénéfice des prestations, déterminant le montant
de cette rémunération et prévoyant sa répartition par semaine ou autre
période;
[…]
|
Employment
Insurance Regulations, SOR/96-332
|
Determination of Earnings for Benefit
Purposes
35. (1)
The definitions in this subsection apply in this section.
…
"pension" means a retirement
pension
(a) arising out of employment or
out of service in any armed forces or in a police force;
…
(2) Subject to the other provisions of
this section, the earnings to be taken into account for the purpose of
determining whether an interruption of earnings has occurred and the amount
to be deducted from benefits payable under section 19 or subsection 21(3) or
22(5) of the Act, and to be taken into account for the purposes of sections
45 and 46 of the Act, are the entire income of a claimant arising out of any
employment, including
…
(e) the moneys paid or payable
to a claimant on a periodic basis or in a lump sum on account of or in lieu
of a pension;
…
|
Détermination de la rémunération aux
fins du bénéfice des prestations
35. (1)
Les définitions qui suivent s’appliquent au présent article.
[…]
« pension » Pension de retraite provenant
de l’une des sources suivantes :
(a) un emploi ou un emploi à
titre de membre des forces armées ou de toute force policière;
[…]
(2) Sous réserve des autres
dispositions du présent article, la rémunération qu’il faut prendre en compte
pour déterminer s’il y a eu un arrêt de rémunération et fixer le montant à
déduire des prestations à payer en vertu de l’article 19 ou des paragraphes
21(3) ou 22(5) de la Loi, ainsi que pour l’application des articles 45 et 46
de la Loi, est le revenu intégral du prestataire provenant de tout emploi,
notamment :
[…]
(e) les sommes payées ou
payables au prestataire, par versements périodiques ou sous forme de montant
forfaitaire, au titre ou au lieu d’une pension;
[…]
|
|
Allocation of Earnings for Benefit
Purposes
36. (1)
Subject to subsection (2), the earnings of a claimant as determined under
section 35 shall be allocated to weeks in the manner described in this
section and, for the purposes referred to in subsection 35(2), shall be the
earnings of the claimant for those weeks.
(2) For the purposes of this section,
the earnings of a claimant shall not be allocated to weeks during which they
did not constitute earnings or were not taken into account as earnings under
section 35.
...
(14) The moneys referred to in
paragraph 35(2)(e) that are paid or payable to a claimant on a
periodic basis shall be allocated to the period for which they are paid or
payable.
…
|
Répartition de la rémunération aux fins
du bénéfice des prestations
36. (1)
Sous réserve du paragraphe (2), la rémunération du prestataire, déterminée
conformément à l’article 35, est répartie sur un nombre donné de semaines de
la manière prévue au présent article et elle constitue, aux fins mentionnées
au paragraphe 35(2), la rémunération du prestataire pour ces semaines.
(2) Pour l’application du présent
article, la rémunération du prestataire ne peut être répartie sur les
semaines durant lesquelles elle n’avait pas valeur de rémunération ou n’avait
pas été comptée comme rémunération selon l’article 35.
[...]
(14) Les sommes visées à l’alinéa
35(2)(e) qui sont payées ou payables au prestataire par versements
périodiques sont réparties sur la période pour laquelle elles sont payées ou
payables.
[...]
|
Email this Content