Saskatchewan Court of Appeal rules that lower court judge exceeded jurisdiction by ordering mediation between union and employer committees of Saskatchewan Healthcare Employees’ Pension Plan
January 20, 2025
The Saskatchewan Court of Appeal ruled that a lower court judge exceeded his jurisdiction by ordering mediation between the union and employer committees of the Saskatchewan Healthcare Employees’ Pension Plan (the “Plan”). The dispute centered on a union-sponsored proposal to add indexation provisions to the Plan.
The Plan’s trust agreement provides for the establishment of union and employer committees. According to the trust agreement, if either committee wishes to increase the rate of contributions to the plan, whether to bring the contribution rate up to the Plan’s current service costs or to fund a benefit improvement, the committee shall notify the other of its desire to meet to discuss such changes. If no agreement is reached within 30 days of such notice, the matter progresses to mediation and, if necessary, arbitration. Notably, the trust agreement provides that such notices must align with triennial anniversaries of January 1, 2004.
On February 13, 2023, an employee acting on behalf of the union committee proposed adding indexation to benefits, funding the improvement through plan surpluses. The employer committee opposed the proposal, arguing that the union committee did not meet the requirements of the trust agreement to bring notice of such proposal, specifically that such notice did not meet the triennial timing requirements, did not mention a contribution rate increase, and was not served by a member of the union committee.
On December 5, 2023, 3sHealth, representing employers who are contributors to the Plan, and members of the employer committee (collectively the “employer”) brought an application under The King’s Bench Rules, Rule 3-49(1)(a) for direction of the Saskatchewan Court of King’s Bench on questions affecting the rights of a person with respect to the execution of a trust. The Respondent’s were the relevant employee unions and members of the union committee (collectively the “union”).
The Court rejected the employer’s argument regarding timing, ruling that the union could give notice at any time, and that the three-year reference in the trust agreement was meant to limit the frequency of changes to contribution rates and benefits to once every three years. The Court also ruled that the trust agreement does not require the proposal to contemplate a contribution rate increase. Lastly, the Court rejected the employer’s argument that the notice had to be delivered personally by a member of the union committee. With this, the Court directed that the parties proceed to mediation and, failing agreement, to arbitration.
The employer appealed the lower court’s interpretation of the trust agreement to the Saskatchewan Court of Appeal, which allowed the appeal. The employer’s appeal also asks whether the lower court judge erred by ordering the parties to proceed to mediation since that relief was not sought by the employer or the union.
In its November 19, 2024 decision, the Court of Appeal agreed that notice could be issued anytime, however, it clarified that its effect would only trigger the dispute resolution process at the next third-year anniversary of January 1, 2004. The Court of Appeal also found that lower court erroneously interpreted the trust agreement as permitting notice without proposing an increase in the rate of contributions, however, went on to find that the union’s proposed indexation changes would inevitably require the committees to consider increasing the rate of contributions, thus sufficiently contemplating a contribution rate increase. Lastly, the Court of Appeal agreed with the lower court that there is nothing in the trust agreement that prevents an agent or employee from authoring or sending notice on behalf of a committee.
Following the determination of these three points, the Court of Appeal held that, in any case, the lower court had overstepped by ordering mediation. The Court of Appeal noted that the union had only sought judicial clarification on whether the union’s notice complied with the trust agreement. Neither party sought injunctive relief or to convert their contractual commitments under the trust agreement into court-ordered obligations.
The Court of Appeal thus set aside the order for mediation and directed that the trust agreement be interpreted in line with its findings.
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