Navistar Canada Inc.; RE: Unifor and its Locals 127 and 35, 2015 CanLII 16341 (ON LRB)

Navistar Canada Inc. (Navistar) sponsored the Navistar Canada Inc. Non-Contributory Retirement Plan (Plan), a defined benefit pension plan covering former employees who were represented by the Canadian Auto Workers, Locals 35 and 127 (Union) and were employed at its Chatham and Burlington, Ont., plants. In 2008, Navistar began developing a reorganization strategy. Over the next several years, multiple rounds of layoffs took place and plant operations were reduced. On July 28, 2011, the Chatham plant was permanently closed. Negotiations for the renewal of a collective agreement were replaced with negotiations for a closure agreement. Many items were resolved; however the issues relating to pensions and severance pay remained outstanding. A final closure agreement was not negotiated.

In March 2013, the Ontario Deputy Superintendent of Financial Services (Superintendent) issued a notice of intended decision (NOID): (1) to order that Navistar partially wind-up the Plan effective July 28, 2011; (2) to include certain members in the wind-up group who had ceased to be employed, whether voluntarily or involuntarily, after June 30, 2009 when the collective agreement expired; and (3) to include in its partial wind-up report the full value of certain benefits under the Plan. Navistar filed a request for a hearing before the Financial Services Tribunal (FST) in respect of the NOID. The FST issued a decision on July 11, 2014, largely upholding the decision of the Superintendent. The FST’s decision was discussed in the September 2014 Pensions Newsletter. Navistar has appealed the FST’s decision to the Divisional Court of the Ontario Superior Court of Justice (Divisional Court).  In July 2015, the Divisional Court dismissed the appeal.

The Union brought an application under section 96 of the Labour Relations Act, 1995 (LRA) against Navistar alleging that Navistar was in violation of section 17 of the LRA: the duty to bargain in good faith and to make every reasonable effort to make a collective agreement. The parties had failed to agree on a process to determine entitlements to severance pay; however the pension issues were still the subject of litigation and would have some impact on statutory severance pay entitlements. The Union alleged that Navistar failed in its duty to make every reasonable effort to make a collective agreement by refusing to agree to arbitration to determine the outstanding severance pay issue. The Ontario Labour Relations Board (Board) held that Navistar always intended to pay statutory severance entitlements and that it was not objectively unreasonable for Navistar to refuse to arbitrate. The Board held that there was no violation of section 17 of the LRA by Navistar and dismissed the Union’s application.

Ontario Labour Relations Board Decision