Safeway workers win appeal on wage rollbacks

Back in November 2024, I wrote an article that exposed how Sobeys Capital wanted to roll back wage increases that some of their Alberta workers had won the year before.

Sobeys Capital owns Safeway stores in Calgary, Banff, Brooks, Camrose, Canmore, Edmonton, Fort McMurray, Grande Prairie, Hinton, Lethbridge, Lloydminster, Medicine Hat, Red Deer, and Wetaskiwin.

The workers are represented by 3 collective agreements and are unionized with Local 401 of the United Food and Commercial Workers.

In these collective agreements, the workers and the employer included a wage reopener, which would allow either party to initiate negotiations as of February 2023 on wages for workers who were at the top of their pay range or above it.

These negotiations could be for pay increases, lump sum payments, or to keep things as is.

According to a bad faith bargaining complaint filed by Local 401 of the United Food and Commercial Workers, which represents these workers, the workers’ bargaining team notified the employer that they wanted bargain wage increases.

The two parties scheduled negotiations for the beginning of June, and when those negotiations didn’t result in an agreement, they met again at the end of the month.

When the second round of negotiations failed to produce an agreement, they went to final offer selection interest arbitration, which would result in a binding settlement.

The workers proposed a 5% increase in each of the last 2 years of the collective agreements. The employer offered a 1.5% increase in the second to last year and a 2% increase in the final year, as well as a $1000 lump sum payment for 2023.

Remember, these would be increases to just the workers who had already topped out at their pay scales.

Mia Norrie, the arbitrator, selected the workers’ offer in her final offer interest arbitration decision, which she released in November 2023.

A final offer interest arbitration differs from rights or grievance arbitration, which involves the interpretation of a collective
agreement and is adjudicative in nature. Interest arbitration, on the other hand, allows the arbitrator to decide the terms of the collective agreement itself. In such arbitration, the arbitrator must choose one of the proposals in their entirety: they cannot decide a compromise position.

Unexpectedly, Sobeys Capital was not too happy with that, so just a few weeks later, in the first week of December 2023, they applied for a judicial review of Norrie’s decision. They were granted a review, which was scheduled for September 2024.

G.H. Poleman, the justice who oversaw the judicial review, released his decision on 18 October 2024, siding with the employer and granting an order to quash Norrie’s decision and refer the wage reopener dispute to a new arbitrator.

Poleman argued in his decision that Norrie “acted unreasonably by giving [competitive climate] no discernible weight”. He argued that “rather than using comparators drawn from grocers in Alberta, . . . she relied on recent wage settlements from one Ontario grocer, one BC grocer, and one grocery warehouse business in Calgary”, none of which, he claimed, were part of Sobey’s competitive climate.

As well, he proposed that Norrie had “cast doubt on the reliability of current wage information for Superstore based on facts not supported by the evidence”. As such, no one could determine “with any confidence” how this affected her decision, resulting in a lack of transparency, which “constitutes unreasonableness”.

Naturally, Local 401 disagreed with this ruling and took it to the Court of Appeal of Alberta, arguing that “he arbitrator’s decision was reasonable and [Poleman] erred in setting it aside”.

Specifically, they presented 4 arguments on why they felt Poleman was incorrect in his reasonableness standard of review:

1. Misinterpreting the letters of understanding included with the collective agreement
2. Reweighing evidence regarding Superstore wages
3. Reweighing evidence regarding comparator collective agreements
4. Ignoring Norrie’s expertise regarding Sobey’s competitive climate.

The 3 appellate judges who heard the appeal released their judgement earlier this month.

They agreed with Local 401 in the sense that they found Poleman had “erred by reweighing and reassessing the evidence before the arbitrator, overstepping the court’s institutional role in conducting reasonableness review”. They reminded the parties in the case that “the role of courts is to review, and . . . at least as a general rule, to refrain from deciding the issue themselves”.

As well, they reiterated that Norrie’s interpretation of the LOUs in her arbitration was reasonable:

In summary, the arbitrator interpreted the LOUs as a whole, considering the principles applicable to interest arbitration, the enumerated factors set out at paragraph 5 of the LOUs, and the constraints imposed by the final offer selection nature of the dispute resolution process as well as the fact that she was tasked with determining the wages solely of a subset of employees rather than all the employees under the collective agreement. All these factors reasonably arose from the text of the LOUs.

Finally, they also found that Norrie was reasonable in her review of the competitive climate evidence:

the arbitrator’s weighing of the evidence was reasonable, and her reasons justify the outcome she reached. While the dispute between the parties to this appeal focuses on the arbitrator’s treatment of the employer’s competitive climate, she structured her analysis around all three enumerated factors, and it is helpful to review her reasons holistically to understand her treatment of the employer’s competitive climate

Regarding Norrie’s use of out-of-province comparators in her decision, the appellate judges pointed out that she did so “because the large, unionized grocery retailers in the province have not been to the table since the start of the inflationary pressures and interest rate increases” and the Calgary warehouse collective agreement was between Sobeys Capital and Local 401 anyhow.

In other words, “out-of-province retail grocery settlements should be considered because of the “extraordinary circumstances” of the case.”

At the end of their decision, just before their conclusion, the appellate judges stated the following:

[Sobey’s] bottom-line complaint is that the arbitrator failed to give due weight to the Superstore and other Alberta retail grocery settlements. The arbitrator considered and explained why she accorded each piece of evidence the weight that she did. Considering her cogent and thorough reasons for decision, the respondent’s argument boils down to a request for this Court to reweigh the evidence and adopt their preferred outcome. That is simply not our role, nor was it the role of [Poleman], who erred by doing precisely that.

As a result, the appellate judges allowed the appeal and reinstated Norrie’s decision.

In a statement released earlier this month, Local 401 welcomed the decision.

We thank the Alberta Court of Appeal, the highest court in Alberta, for its wisdom and sensibility in seeing this circumstance clearly. Each province has a court of appeal to ensure that, at the end of the day, the best judgment and the wisest eyes are brought to bear on complex situations.

Even though this decision looks like Sobeys cannot follow through with their threat to roll back wage increases that workers have already received, it does not mean they actually will. They do have the option of appealing to the Supreme Court of Canada, for example.

Local 401 is not to confident that Sobey’s will keep their hands off of worker wages.

Keep in mind that their most recent collective agreements (here, here, and here) expired last summer. So these workers still have a lot of work to do.