This post was contributed by Philippe Levac (Norton Rose Fulbright’s Montréal office)

Norton Rose Fulbright’s Employment and Labour Team in Montréal raised a preliminary objection against an arbitrator’s jurisdiction on the basis of orders rendered pursuant to the Companies’ Creditors Arrangement Act (“CCAA“), which was upheld and led to the dismissal of the grievance.

In Syndicat Unik La Tuque and Rocktenn – Container Canada L.P./LAT, Rocktenn’s predecessor filed for protection under the CCAA, under which the Ontario Superior Court (“Court“) rendered a number of orders in 2009-2010. One of these orders provided that creditors who had not delivered a “Proof of Claim” in accordance with the orders would have their claim forever extinguished. The grievance, claiming a premium pay for hours worked on Sundays, filed in 2007 prior to the CCAA proceedings, was considered a claim under the Court orders. Given that no “Proof of Claim” had subsequently been filed by the union pursuant to the grievance, the arbitrator concluded, in a very concise decision, that the orders rendered under the CCAA had extinguished the claim the grievance was based on. The grievance was therefore dismissed.

The notion of “claim” under the CCAA is defined as “any indebtedness, liability or obligation of any kind that would be a claim provable within the meaning of section 2 of the Bankruptcy and Insolvency Act”. Pursuant to Section 2 of the Bankruptcy and Insolvency Act (“BIA“) such a notion “includes any claim or liability provable in proceedings under this Act by a creditor“. In essence, the arbitrator construed the grievance as a provable claim given its level of seriousness, certitude and probability and the wording of Section 19 CCAA which provides that claims under the CCAA may relate to debts or liabilities, present or future.

The arbitrator also rejected the union’s argument based on the continuing nature of the grievance, which consists of repetitive breaches of a collective agreement. Indeed, the union had argued that if its claim was extinguished for the period preceding the Court’s order, the subsequent portion was not, given its continuing nature. The arbitrator overruled this argument and confirmed the employer’s position that where a claim is extinguished, the grievance filed to obtain such a claim no longer exists, for the past, present and future.

The arbitrator concluded that the Court orders were clear as to their effect on the grievance. In accordance with the CCAA and the case law, the arbitrator considered that his role in such circumstances was to aid in carrying out the orders rendered by the Court and not to review the orders, as would an appellate court.

The interest of such decision essentially lies in that the arbitrator construed the grievance, although challenged and unliquidated, as a provable claim under the CCAA and the BIA.