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Employer’s Grievance Seeking LTD Plan Contribution Holiday Denied

West Fraser Mills v. United Steelworkers, Locals 1-424 and 1-425 (Long Term Disability Contributions Grievance), [2017] B.C.C.A.A.A. No. 125 (McPhillips).

The employer brought a policy grievance concerning the interpretation of Collective Agreement provisions dealing with employer and employee contribution levels related to the IWA – Forest Industry Long Term Disability plan (the “Plan”).

Citing a surplus in the Plan, the employer sought a declaration that a lower contribution rate should be retroactively reinstated and a contribution holiday should be allowed.

The disputed clause read:

If at any point during the term of the Agreement, the Plan Actuary should determine that the full amount of the increase in contributions is no longer required to amortize the unfunded liability over the 10 year period contemplated by this Agreement, the excess contributions will be discontinued by each party accordingly.

The arbitrator applied various interpretation principles including: all words in a collective agreement must be given effect; a collective agreement must be interpreted in a manner that does not produce impractical or unintended results; and a purposive approach to interpreting collective agreement language should be used: at para. 83.

The purpose of the clause at issue was to ensure the financial integrity of the plan and to protect against unnecessary contributions being made.

After canvasing potential meanings for the phrase “excess contributions” the arbitrator concluded “considerable uncertainty” existed as to the application of the clause.
Ultimately he noted the condition precedent requiring a determination by the Plan Actuary had not been met.

Accordingly the employer’s grievance was denied. The appropriate place to address the employer’s concerns was at the bargaining table (an actuarial report had been commissioned for upcoming collective bargaining).

The arbitrator noted he had no jurisdiction to make an order directing the Plan Trustees to commission an actuarial report as they were not parties to the arbitration.