Mandatory dispute resolution could only be triggered by a proposal to increase contribution rates
The Court of Appeal for Saskatchewan has overturned a lower court decision concerning the dispute resolution provisions of the trust agreement governing the Saskatchewan Healthcare Employees’ Pension Plan (SHEPP).
In 3sHealth v Canadian Union of Public Employees, 2024 SKCA 106, the court resolved key questions about when and how mandatory mediation and arbitration processes can be invoked under the agreement, which is jointly managed by Health Shared Services Saskatchewan (3sHealth) and major healthcare unions.
The dispute began when the unions issued notices under the agreement seeking to initiate discussions about proposed benefit improvements. In February 2023, the unions proposed indexing pension benefits for retirees and introducing guaranteed indexing for active members, suggesting these changes could be funded through projected surpluses. After discussions failed, a mediation notice was issued. However, 3sHealth challenged the validity of these notices, arguing that the union’s actions did not comply with the trust agreement’s requirements.
The Court of King’s Bench had upheld the validity of the union’s notices and ordered the parties to proceed to mediation and arbitration. 3sHealth appealed this decision, asserting that the lower court misinterpreted the trust agreement and exceeded its authority by mandating participation in the dispute resolution process.
The Court of Appeal clarified that while the trust agreement allows notices for partner meetings to be issued at any time, such notices only take effect on the next triennial anniversary of January 1, 2004, as required by the agreement’s schedule. This ensures that proposals for changes to contribution rates and benefits align with the timeline specified by the agreement.
The appellate court also held that the mandatory dispute resolution process could only be triggered by a proposal to increase contribution rates, which was a necessary precondition under the agreement. The court found that the unions’ proposal, while suggesting that funding could potentially come from surpluses, raised the possibility of increased contribution rates, thereby meeting the requirement.
Additionally, the appellate court rejected the argument that the mediation notice was invalid because it was served by a union representative who was not a member of the union partner committee. The court found no evidence that the employer committee was misled or confused by this procedural issue.
The Court of Appeal concluded that the lower court overstepped its jurisdiction by ordering the parties to proceed with mediation and arbitration. This relief had not been requested by either side and was imposed without providing the parties an opportunity to address it. The appellate court emphasized that judges must remain within the boundaries of the remedies sought by the parties unless additional relief is properly noticed and argued.
