We still see attempts by unions to argue that an employer must continue an overpayment, or a generous past practice of some kind, even though it is not required by the collective agreement or it is more generous than the collective agreement requires. The legal answer to this argument has been clear in Alberta for some time but the Court of Appeal put the issues beyond doubt in an April decision involving the City of Calgary and one of its unions.
The City had sent notices to the union of its intention to unilaterally alter a number of workplace practices. At least some of these practices were not governed by the terms of the collective agreement. The union grieved, arguing that the city was estopped from making any such alterations at least until the union had full opportunity to negotiate about them at a later time. The arbitrator rejected the claim, relying on the 1985 Smoky River Coal decision of the Alberta Court of Appeal. To get around the decision, the union took a novel approach. It went to the Court of Appeal to ask them to “reconsider” the Smoky River Coal decision. It refused to do so, thereby reaffirming that Smoky River Coal is solid law in Alberta.
Smoky River Coal says that before there can be an estoppel: “What is necessary is an assurance that pre-existing rights will not be relied upon – it is not enough that the subject ‘relate to’ some pre-existing legal relationship.” The case therefore means that past acts of employer generosity, whether deliberate or by error, are not binding and can end, unless the collective agreement says they cannot be. Cases from other provinces have gone the other way but we can be very confident that in Alberta gratuitous promises or practices can be unilaterally discontinued.