Following the publication of our last article, entitled Quebec’s Bid to Reform Municipal Pension Plans Will Have to Wait for the Superior Court to Determine the Validity of Bill 15, which concerned the decision rendered by arbitrator Claude Martin in the matter of Ville de Montréal v. Fraternité des policiers et policières de Montréal1,a second interlocutory decision in a similar case was rendered barely one month later in the matter of Ville de Montréal v. Syndicat des professionnelles et professionnels municipaux de Montréal2.

While this latest decision deals with the same issue as the decision rendered by arbitrator Martin, it arrives at the opposite conclusion. Arbitrator René Beaupré ultimately dismissed the union’s request to suspend the hearing of the arbitration while the constitutionality of the Act to foster the financial health and sustainability of municipal defined benefit pension plans (“Bill 15”) is being contested before the Quebec Superior Court, and convened the parties to the hearing on the merits.

Distinctions between the decisions of arbitrators Martin and Beaupré

Arbitrator Beaupré begins his analysis with an overview of the objectives of Bill 15, i.e. restoring the financial health of defined-benefit pension plans in the municipal sector in order to ensure their sustainability. His analysis of the provisions of Bill 15 aimed at restructuring such pension plans revealed, in his view, the legislature’s concern to achieve the objectives of the bill as soon as possible3. It is evident that the narrow time constraints imposed by the legislature for implementing the restructuring process played a major role in the arbitrator’s analysis of the request submitted to him.

At the outset, arbitrator Beaupré concluded, as did arbitrator Martin, that he did not have the power to decide constitutional questions, such as the compliance of Bill 15 with the Canadian and Quebec charters of rights and freedoms.

In this matter, the unions argued that their request was not for a stay of the application of a statute, such that the criteria established by the Supreme Court of Canada in the Metropolitan Stores4 decision did not apply. In their view, they were not asking for the suspension of the application of Bill 15 but merely for a case-management decision, akin to a request for a postponement, for the sake of the proper administration of justice and in order to avoid a plurality of proceedings pending the Superior Court’s decision on the validity of Bill 15. They thus asked the arbitrator, pursuant to article 632 of the new Code of Civil Procedure, to suspend the proceedings on the basis of the criteria established in the Manioli Investments5 decision. Article 632 CCP provides that “arbitrators conduct the arbitration according to the procedure they determine”.

This argument was rejected by arbitrator Beaupré.

On the one hand, arbitrator Beaupré’s analysis led him to conclude that there was a great deal of similarity between the matter before him and that dealt with by the Supreme Court of Canada in Metropolitan Stores. In both cases, one of the parties was asking that the hearing be suspended pending a decision by a superior court on the constitutionality of legislation. In arbitrator Beaupré’s view, granting the union’s request would effectively delay the application of Bill 15, which imposes a six-month deadline for rendering a decision once an arbitrator has been seized of the matter. According to arbitrator Beaupré, this deadline is indicative of the legislature’s intent to act expeditiously, if not urgently6. In his view, Bill 15 must be presumed to be valid, and it is not within the arbitrator’s purview to make that determination.

The union’s request can be likened in substance to a provisional request to suspend the proceedings. In arbitrator Beaupré’s view however, the power to order provisional measures pursuant to article 638 CCP, such as a stay or a suspension of proceedings, does not apply to arbitrations under Bill 157, as the legislation does not expressly give such a power to an arbitrator appointed pursuant thereto.

On the other hand, arbitrator Beaupré is of the view that even if the legislature had given him the power to suspend the arbitration, the union’s request should nevertheless be dismissed. Despite applying the same three criteria from the Metropolitan Stores decision as arbitrator Martin did in his decision, arbitrator Beaupré nevertheless came to the opposite conclusion. Evidently the evidence led by each of the parties in the two matters had a decisive role in this divergence of opinion.

Before arbitrator Beaupré, the first criterion, the existence of a colour of right, was met, as was acknowledged by the parties. However, the evidence did not show that if the request for a suspension were not granted, the unions would suffer irreparable harm. While some inconvenience to them might be presumed, it was only hypothetical and not supported by the evidence. On that basis alone, their request should be denied.

In this regard it must be noted that in their motion to institute proceedings filed in Superior Court contesting the constitutionality of Bill 15, the unions seek the conclusion that their pension plans be restored to the state they were in prior to the coming into force of Bill 15. This conclusion seems incompatible with the “irreparable” nature of the harm the unions could allegedly sustain if their request for a suspension of the arbitration were dismissed.

Arbitrator Beaupré noted on the contrary that if he suspended the arbitration as requested by the union, the Superior Court could not remedy any adverse effects caused by the failure to remedy the pension plans within the time limits imposed by Bill 158.

Moreover, regarding the criterion of the balance of inconvenience, arbitrator Beaupré pointed out that the public interest demands that Bill 15’s goals be achieved in order to ensure the sustainability of municipal pension plans9, which is for the benefit of both municipal taxpayers and municipal employees.

In light of all the foregoing, arbitrator Beaupré dismissed the request to suspend the proceedings and convened the parties to a resumption of the arbitration hearing.

Current status of these files

With respect to the decision rendered in June by arbitrator Martin, an application for judicial review by the Superior Court has been made by the City of Montreal, the Quebec government (Ministry of Finance) and the union representing the City’s police officers.

An application for judicial review has also been made regarding arbitrator Beaupré’s decision.

Several arbitrators appointed pursuant to Bill 15 will also have to take a position soon on whether or not to suspend the arbitrations they are seized with. It will be interesting to see what decision they come to in general, and on what grounds.

The Superior Court will thus be called upon over the next few months to decide on the issue of whether or not an arbitrator appointed under Bill 15 has jurisdiction to suspend the arbitration.

For the sake of expediency, in light of the goals sought to be achieved by Bill 15, in his decision arbitrator Beaupré convened the parties to a resumption of the hearing in mid-July.

As for the hearing before the Superior Court on the constitutionality of Bill 15 and whether pension plans are therefore subject to it, it is not slated to begin before the fall of 2017 at the earliest. The hearing is expected to last anywhere between 60 and 135 days, according to information provided to arbitrator Beaupré. This factor was an important element taken into consideration by him in his decision, whereas arbitrator Martin appears not to have been in possession of that information when he rendered his decision.

All in all, these are decisions that will be very interesting to follow in 2017.