Court of Appeal dismissed an appeal by employer from decision dismissing its application for judicial review of arbitration board’s decision finding appellant was required to pay certain employees overtime at vacation entitlement rate

Administrative law – Decisions of administrative tribunals – Labour and employment boards – Labour law – Collective agreements – Vacation pay – Arbitration – Judicial review – Estoppel and res judicata

Viterra Inc. v. Grain Services Union, [2013] S.J. No. 535, 2013 SKCA 93, Saskatchewan Court of Appeal, September 10, 2013, R.G. Richards C.J.S., R.K. Ottenbreit and N.W. Caldwell JJ.A.

The appellant, Viterra Inc., appealed a decision dismissing its application for judicial review of an arbitration board’s decision finding the appellant was required to pay certain employees overtime at the vacation entitlement rate.

The appellant’s predecessor had negotiated a collective agreement (the Old Agreement) with the respondent, the Grain Services Union, which was silent on the issue of vacation pay for overtime. The practice had been for some groups of employees within the Union to be paid vacation pay on overtime based on individual employee’s vacation rates. At no point did the Old Agreement deal expressly with the question of vacation pay on overtime earnings. The appellant continued the established practice of providing vacation pay on overtime on the same basis as the former employer, which resulted in non-standardized vacation entitlement rates among the employees. Further, the issue was not dealt with specifically in the Collective Agreement reached between the Appellant and the Union (the New Agreement). When the appellant became aware of the different practices, it decided to standardize the approach for all employees covered under the New Agreement. It reached this decision without consulting with or providing notice to the Union. The obvious effect of the policy change, as found by the Court, was that the overtime compensation for some employees were lowered.

The Union filed grievances alleging that Viterra had unilaterally changed the administration and payment of vacation pay on overtime contrary to past practices and the terms of the New Agreement. The majority of the Board of Arbitration found in favor of the Union and found that the accepted practice came about as a result of the direct understanding of the parties to the Old Agreement. Further, the language used in the New Agreement had the same effect. Further, under the doctrine of promissory estoppel, the Board found that Union had entered into the New Agreement under the assumption that vacation pay on overtime would not change.

The appellant brought an application for judicial review seeking to quash the decision of the Board. The Chambers judge concluded that both the Board’s interpretation of the New Agreement and its application of the doctrine of promissory estoppel satisfied the standard of reasonableness. The appellant appealed the Chambers judge’s decision.

The Court of Appeal dismissed the Appeal. The Court found the Board’s interpretation of the New Agreement to be unreasonable as there was no contractual language in either of the Agreements regarding an obligation to pay overtime at vacation pay rates, the obligation to do so did not flow directly from them. However, the Court did find the Board’s conclusion regarding promissory estoppel to be reasonable. The appellant’s silence at the bargaining table, against the background of its past practice was a representation it would continue to compensate the employees in the same manner and the respondent relied on this representation to its detriment.

The Court concluded that, while the Chamber’s judge’s decisions presented some problems, her decision not to overturn the Board’s decision was nonetheless reasonable.

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