Canada: Quebec's Bid To Reform Municipal Pension Plans Will Have To Wait For The Superior Court To Determine The Validity Of Bill 15

On June 1, 2016, arbitrator Claude Martin rendered a highly anticipated decision in the area of municipal pension plans, in the matter of Ville de Montréal and Fraternité des policiers et policières de Montréal.1

The arbitrator essentially concluded that a statutorily mandated arbitration between the City of Montreal and the union representing its police officers (the "Brotherhood") should be suspended pending a decision by the Quebec Superior Court on the constitutionality of the Act to foster the financial health and sustainability of municipal defined benefit pension plans ("Bill 15", formerly referred to as Bill 3).

Bill 15

One of the objectives of Bill 15 is to ensure the sharing in equal measure by plan participants and municipalities of costs and any deficits for service after December 31, 2013.

Following the adoption of Bill 15 on December 4, 2014, each municipality was required to negotiate an agreement on amendments to its pension plan with all active plan members. If no agreement is reached, Bill 15 provides that an arbitrator must be appointed to resolve the impasse, which proved to be necessary in the case of many municipalities.

Those were the circumstances in which lawyer Claude Martin was appointed as the arbitrator in the City of Montreal case. The Brotherhood thereupon petitioned the tribunal to suspend the arbitration pending the Superior Court's ruling on a number of legal actions brought by several municipal unions regarding the validity of Bill 15 and whether or not their pension plans were even subject to it.

The parties' positions

The arguments raised by the Brotherhood to suspend the arbitration included the following:

  • there is an obvious connection between the actions pending before the Superior Court and the debate that would ensue before the arbitrator;
  • failure to suspend the arbitration would result in a needless plurality of proceedings and unwarranted costs;
  • failure to suspend the arbitration would increase the likelihood of contradictory judgments;
  • the outcome of the arbitration depends to a great extent on the Superior Court's decision on the actions brought by the various unions;
  • suspending the arbitration would be in keeping with the proportionality rule and the objectives of the proper administration of justice.2

The Brotherhood also argued that the arbitrator's jurisdiction was necessarily limited to examining the constitutional issues in the narrow context of a single dispute, whereas the Superior Court will have to decide on all the actions contesting Bill 15 that have been brought by several municipal unions.

The City's arguments were essentially the following:

  • the arbitrator does not have the power to stay the arbitration proceedings;
  • in the alternative, the grounds put forward by the Brotherhood are not those on which the arbitrator should base his decision.

In his decision, the arbitrator summarized the arguments of an intervenor in the proceedings, Quebec's Attorney General, who essentially argued the following:

  • the arbitration mandated by Bill 15 was not really a "dispute arbitration", as its purpose was not to resolve a dispute between the parties but to find a solution if the parties are not able to agree on changes to a pension plan;
  • the Brotherhood's request was tantamount to a motion to suspend the application of Bill 15, which only the Superior Court can do;
  • in the alternative, the criteria for ordering a stay have not been met.

In light of all the foregoing arguments, the arbitrator concluded that the following two fundamental questions first had to be answered: does an arbitrator appointed under Bill 15 have the power to order the suspension sought by the Brotherhood, and if so on what conditions?

How the arbitrator answered those questions

To answer those questions, the arbitrator followed these analytical steps:

  • His role as a tribunal:

He determined that he was acting as a statutory tribunal exercising an adjudicative function in order to resolve a dispute between the parties. A grievance arbitrator, a dispute arbitrator and a statutory arbitrator all have similar roles, but the structure of the provisions assigning the arbitrator his or her powers and jurisdiction under Bill 15 is distinct.

  • His power to decide on a question of law:

The arbitrator reached the conclusion that Bill 15 did not expressly give him the power to decide a question of law, but rather gave him a specific and limited mission which he defined as being to decide on the restructuring of a pension plan so that it satisfies the legislative norms and requirements, given that the parties have been unable to reach an agreement to amend the plan, despite negotiations entered into and carried on pursuant to Division I of Chapter IV of the Act.3

  • His jurisdiction over constitutional law questions:

He stated that Bill 15 does not allow him to decide constitutional law questions.4

  • His jurisdiction over whether the union's pension plan is subject to Bill 15 or whether Bill 15 is valid:

He agreed with the Attorney General's argument to the effect that he does not have such jurisdiction.5

  • His discretionary power to order the suspension of the arbitration until the Superior Court has determined whether or not the impugned provisions of Bill 15 are valid:

In this regard the arbitrator applied the test developed by the Supreme Court of Canada in Metropolitan Stores.6 It should be pointed out that for the purposes of rendering his decision the arbitrator had the benefit of only a limited number of exhibits filed by the Brotherhood. The parties called no witnesses and filed no affidavits in support of their arguments.7

The arbitrator first of all concluded that the matter before him raised serious issues directly related to the actions before the Superior Court. He was of the view however that the Brotherhood would not suffer serious or irreparable harm were the suspension not ordered. The Brotherhood raised fears that were legitimate but groundless, such as those concerning the solvency or funded status of the plan. The arbitrator nevertheless concluded that the arbitration could result in serious harm or could give rise to a state of fact or law that could not be remedied if the arbitrator's decision was issued before a final judgment is rendered in the cases before the Superior Court. Finally, the balance of convenience would favour the Brotherhood.8

In light of all of the foregoing, the arbitrator ultimately concluded that the exceptional circumstances of the matter justified the suspension of the arbitration until a decision is rendered by the Superior Court on the constitutionality of Bill 15 and whether the Brotherhood's pension plan is even subject to it.

Impact of the decision

With this decision, arbitrator Martin has paved the way for other municipalities that are also engaged in the arbitration process under Bill 15. However, the decision could result in a flurry of activity, as the parties have only 30 days to apply for judicial review before the Superior Court on a jurisdictional question (s. 49 of Bill 15).

If this decision is not judicially reviewed, the debate surrounding municipal pension plans will become focused solely on the pending judgment of the Superior Court, which will inevitably decide on the issues of the constitutionality of Bill 15 and whether or not municipal pension plans, including that of the Brotherhood, are even subject to it.

One thing is certain – the outcome of these proceedings will have a major impact on labour relations in the municipal arena.

Footnotes

1 Ville de Montréal and Fraternité des policiers et policières de Montréal et al., June 1, 2016, arbitrator Claude Martin.
2 Ibid. at 8.
3 Ibid. at 64.
4 Ibid. at 64.
5 Ibid. at 65.
6 Manitoba (Attorney General) v Metropolitan Stores Ltd., [1987] 1 SCR 110.
7 Ville de Montréal at 18.
8 Ibid. at 67-87.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Geneviève Beaudin
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions