Pension LOA Enforceable

After a strike, the union and management signed a letter of understanding that deemed that the time lost by the strikers was pensionable. The LOA had a condition, and the company argued that the condition had not been met.
|Canadian Labour Reporter|Last Updated: 02/09/2011

What the Arbitrator Said: There are three issues: 1. Timeliness of the grievance. 2. Did the [union] comply with the terms of the LOAs thereby entitling members of the [pension plans] to have service lost due to the work stoppage deemed pensionable? 3. If the [union] failed to comply with the terms of the LOAs, were they unenforceable? If so, what is the result? [1.] The timeliness issue was not raised here until the time of the hearing, and … I conclude the facts here fall within the cases on waiver and [the company] must be found to have waived this objection. [2. The condition was the abandonment of a pension action by several members of the union. The union was not a named member of the plaintiffs and tried unsuccessfully to convince them to end their action.] Reading all of these provisions [of the Letters of Agreement] together, I conclude the LOAs are ambiguous, with the result that extrinsic evidence is admissible as an aid to interpretation of the agreement. In summary, I am satisfied it was mutually intended, as reflected in the language of the LOAs, that the [union] would submit the necessary documentation to the applicable Court for consent dismissal. If that was not granted, it was committed to filing a discontinuance and providing a release. The obligation to provide no financial or other assistance was in addition to these obligations. Because the representative plaintiffs refused to withdraw the actions, the [union] did not submit documents to Court nor did it provide a discontinuance. I conclude it did not comply with the terms of the Dismissal LOA. [3.] The [union] submits that the representative plaintiffs could not be bound by an agreement to which they were not parties, citing various authorities in support of the principle that two parties by agreement cannot impose a contractual obligation on a third. There is nothing unusual about a party making a commitment in a contract contingent upon obtaining something from a third party to enable it to meet that commitment. Transactions of this kind are common. The language relating to the Alberta actions is definite; it requires the [union] to submit the necessary documents to the applicable Court, or if that is not possible to discontinue the proceedings. I am satisfied the Union made this commitment in good faith believing it could fulfill it. [T]he actions were commenced at the initiation of the Union, it funded the lawsuits and the representative plaintiffs all held [union] positions. … I accept that [the company] assumed the [union] considered its ability to perform the obligation before it signed the LOAs and could deliver. This was a proper and enforceable agreement, that in the end, the [union] was unable to perform. The grievance is accordingly dismissed.