C.A. No. 102043
NOVA SCOTIA COURT OF APPEAL
Cite as: Maritime Telegraph and Telephone Company v. Atlantic Communication and Technical Workers' Union, 1994 NSCA 211
Freeman, Jones and Pugsley, JJ.A.
BETWEEN:
MARITIME TELEGRAPH AND )
TELEPHONE COMPANY, LIMITED ) Jan McKenzie
) for the Appellant
Appellant )
)
)
- and - )
)
) Ronald A. Pink, Q.C.
) for the Respondent
)
ATLANTIC COMMUNICATION AND )
TECHNICAL WORKERS' UNION and )
MILTON J. VENIOT )
)
Respondents )
)
) Appeal Heard:
) September 27, 1994
)
) Judgment Delivered:
) November 15, 1994
)
Revised Decision: This decision has been corrected according to the attached erratum (undated).
THE COURT: The appeal is allowed; the order of the Chambers judge be set aside; an order be issued in the nature of certiorari quashing the award of the arbitrator and costs to be fixed at $1,000.00 plus disbursements per reasons for judgment of Freeman, J.A.; Jones and Pugsley, JJ.A. concurring.
FREEMAN, J.A.:
The employees of Maritime Telegraph and Telephone Company Limited are divided into three bargaining units, known as crafts, clerical and traffic, with three separate collective agreements; all three bargaining units are represented by the Atlantic Communication and Technical Workers' Union and are governed by the Canada Labour Code, R.S.C. 1985, c. L-2. The traffic unit is not involved in this appeal.
Dispatchers belong to the craft bargaining unit. They have the responsibility of assigning workers to jobs in the field. Dispatchers are assigned to two functions.
Installation dispatchers assign the workers who install new telephones and other services; they are assisted with the service order related to each job and other paper work by dispatch clerks who belong to the clerical union.
The repair dispatchers assign workers to deal with customer problems. Until 1991 they did their own paper work, recording the times involved and other information on work orders called "troubles." The company found the increasing paper work required of the repair dispatchers created a bottleneck. It had good results when a dispatch clerk was assigned to assist the dispatcher in the district including New Glasgow, and in 1991 it assigned dispatch clerks to the repair dispatchers in all four of the districts into which it divides Nova Scotia. This resulted in the hiring of four dispatch clerks and upgrading their classification from six to seven.
The clerical bargaining unit filed two grievances:
1. Clerical staff being directed to perform duties of dispatcher without proper pay treatment.
2. Clerical staff being directed to perform work of another bargaining unit contrary to collective agreement.
The craft union filed the following grievance:
Bargaining unit work under certification order L.R.B. No. 30923 being given to members of another bargaining unit--contrary to collective agreement.
Milton Veniot, Q.C., was appointed as sole arbitrator of the grievances on August 31, 1992. Hearings were held at Halifax on April 23, April 29, April 30, June 2, June 3 and July 12, 1993. His 67 page award was filed August 27, 1993. He ordered the following remedy:
1. This Board declares that as and from June 21, 1991, the employer has been in violation of the craft agreement and the clerical agreement by virtue of the assignment of bargaining unit work to non-members of the bargaining unit to such an extent as to bring those non-bargaining unit employees within the bargaining unit.
2. This Board orders that the employer appropriately compensate those clerical unit employees referred to in (1) above from June 21, 1991. I will retain jurisdiction to settle amounts and to determine any related issues if the parties are unable to agree.
3. The employer, if it wishes to continue to use the Installation and Repair dispatchers in the functions they performed at the material times referred to herein, conform in all respects to the agreements.
The conclusions underlying the remedies are expressed at pages 54-55 of Arbitrator Veniot's award decision:
The assignments of bargaining unit work to non-bargaining unit employees violate the agreement. They are substantial, day to day, and permanent. These new duties, and the actual blurring of the lines between the two positions were inevitable concomitant of the employer's decision to split the dispatchers' function as it existed in the bargaining unit prior to the changeover. In my opinion, the performance of these tasks have the effect of taking these dispatch clerks into the bargaining unit. They perform work that was substantially that of bargaining unit members. What occurred in this case is that the employer, having formed and operated on one view of what constituted the repair dispatcher's job, then changed its mind, not on what had to be done, but on who would do it. To effect its purpose, it in effect exported a substantial portion of the work out of the bargaining unit.
In my view, this action goes to the heart of what constitutes the craft unit and does undermine its integrity. Although the employer points out that there was no loss of dispatch jobs, it is undeniably true that all of these dispatch clerks are fully occupied, and I find that the greater part of their work is work formerly done by the repair dispatcher. The employer could have resolved this within the bargaining unit by hiring new dispatchers, or negotiating a new classification within the bargaining unit, under the "new additional jobs covered by this agreement " as per Article 7.4 of the (craft) agreement.
This appeal is from the dismissal of an application by the company to the Supreme Court of Nova Scotia for a certiorari order to quash the award. The chambers judge found that "arbitrator Veniot has not exceeded his jurisdiction and has not made any decisions which were patently unreasonable."
He had found, however, that Arbitrator Veinot had mistakenly referred to the Trade Union Act R.S.N.S. 1989 c. 475 and the Arbitration Act, R.S.N.S. 1989 c. 19 in determining the source of his jurisdiction. He stated:
In this case Arbitrator Veniot properly took jurisdiction, although he made an error by referring to provincial legislation. This technical error does not justify, in my opinion, the quashing of the decision.
The grounds of appeal are as follows:
1. That the Learned Trial Judge erred in law in finding that Arbitrator Veniot's error in relying on the Trade Union Act of Nova Scotia R.S.N.S. 1989, c. 475, and the Arbitration Act of Nova Scotia R.S.N.,S. 1989, c. 19 was a technical error only which did not justify the quashing of the Arbitrator's decision.
2. That the Learned Trial Judge erred in law in finding that Arbitrator Veniot had not committed reviewable error in his decision that the craft Bargaining Unit has an inherent and exclusive right to perform work even when there is no express or implied limitations on management's right to assign work under the relevant collective agreement;.
3. That the Learned Trial Judge erred in law in finding that Arbitrator Veniot had not committed reviewable errors in his determinations that the appellant was prohibited from assigning work to one bargaining unit solely because the work had been performed in the past by another bargaining unit and the nature of the work was an irrelevant consideration to a determination of whether the work assignment was proper.
These grounds are restated by the parties as the issues on appeal. The respondents additionally list the standard of review as issue no. 1.
THE STANDARD OF REVIEW
The parties are agreed that Arbitrator Veniot sat as a statutory arbitrator under the Canada Labour Code, R.S.C. (1985) c. L-21, and in particular, s. 57(1) and s. 58 which provide:
"57 (1) Every collective agreement shall contain a provision for final settlement without stoppage of work, by arbitration or otherwise, of all differences between the parties to or employees bound by the collective agreement, concerning its interpretation, application, administration or alleged contravention.
58 (1) Every order or decision of an arbitrator or arbitration board is final and shall not be questioned or reviewed in any court.
(2) No order shall be made, process entered or proceeding taken in any court, whether by way of injunction, certiorari, prohibition, quo warranto or otherwise, to question, review, prohibit or restrain an arbitrator or arbitration board in any of his or its proceedings under this Part.
Section 60 (1)(b) provides that an arbitrator or arbitration board has
(b) Power to determine any question as to whether a matter referred to the arbitrator or arbitration board is arbitrable.
With respect to the s. 58 privative clause the respondent union submits that:
. . . the award of Arbitrator Veniot can only be disturbed if this Honourable Court finds that he exceeded his jurisdiction in that the award rests on an interpretation of the collective agreement which is clearly irrational or patently unreasonable.
It further submits that
. . . Arbitrator Veniot was acting within the primary jurisdiction conferred on him by Section 60 of the Canada Labour Code when he determined that the matters before him were arbitrable. He had the right to be wrong.
In Cape Breton Development Corp. v. C.B.R.T., Local 504 (1986), 71 N.S.R. (2d) 378 (N.S.C.A.) Chief Justice Clarke considered the decision of an arbitrator under the Canada Labour Code and concluded:
Therefore his decision is not patently unreasonable and is shielded from review by the court. He acted within his jurisdiction. Whether I agree or disagree with the decision of the arbitrator does not matter.
Chipman, J.A. reached a similar conclusion in Canada Post Corporation v. Public Service Alliance of Canada (1988), 50 D.L.R. (4th) 543 (N.S.C.A.) In Cape Breton Development Corporation v. The United Mine Workers of America District No. 26. (Unreported-- March 23, 1994, N.S.C.A.) he cited Paccar of Canada Ltd. v. Canadian Association of Industrial Mechanical and Allied Workers Local 14, et al. (1989), 62 D.L.R. (4th) 437 (S.C.C.), in which McIntyre, J., explaining the deference with which courts view the decisions of labour arbitrators, stated:
"Our experience with labour relations has shown that the courts, as a general rule, are not the best arbiters of disputes which arise from time to time. Labour legislation has recognized this fact and has created other procedures and other tribunals for the more expeditious and efficient settlement of labour problems. Problems arising in labour matters frequently involve more than legal questions. Political, social, and economic questions frequently dominate in labour disputes. The legislative creation of conciliation officers, conciliation boards, labour relations boards, and labour dispute‑ resolving tribunals, has gone far in meeting needs not attainable in the court system. "
Also in Paccar, LaForest J. held that a tribunal had the right to be wrong so long as there was a rational basis for its decision:
Where, as here, an administrative tribunal is protected by a privative clause, this court has indicated that it will only review the decision of the Board if that Board has either made an error in interpreting the provisions conferring jurisdiction on it, or has exceeded its jurisdiction by making a patently unreasonable error of law in the performance of its function; see Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227. The tribunal has the right to make errors, even serious ones, provided it does not act in a manner "so patently unreasonable that its construction cannot be rationally supported by the relevant legislation and demands intervention by the court upon review." (p.237). The test for review is a "severe test"; see Blanchard v. Control Data Canada Ltd., [1984] 2 S.C.R. 476, 84 C.L.L.C. 14, 070. This restricted scope of review requires the courts to adopt a posture of deference to the decision of the tribunal. Curial deference is more than just a fiction courts resort to when they are in agreement with the decisions of the tribunal. Mere disagreement with the result arrived at by the tribunal does not make that result "patently unreasonable". The courts must be careful to focus their inquiry on the existence of a rational basis for the decision of the tribunal and not on their agreement with it. The emphasis should be not so much on what result the tribunal has arrived at, but on how the tribunal arrived at that result. Privative clauses, such as those contained in ss. 31-34 of the Code are permissible exercises of legislative authority, and to the extent that they restrict the scope of curial review within their constitutional jurisdiction, the court should respect that limitation and defer to the board.
Paccar has been frequently followed in this court, which accords a high degree of deference to the decisions of arbitrators. See Canadian Broadcasting Corporation v. Canadian Wire Service Guild (1990), 99 N.S.R. (2d) 419 (N.S.C.A.) and Nova Scotia Government Employees Union v. Civil Service Commission (Nova Scotia) (1992) 112 N.S.R. (2d) 444 (N.S.S.C.A.D.0; and (1993), 123 N.S.R. (2d) 217 (N.S.C.A.).
Paccar was preceded by U.E.S. Local 298 v. Bibeault, [1988] 2 S.C.R. 1048 in which Beetz J. considered the limits of curial deference. His conclusions were more recently affirmed by the Supreme Court of Canada in Attorney General (Can.) v. Public Service Alliance of Canada (PSAC) 93 CLLC [14,022] 12,124 at 12,130, as follows:
"He set out the two instances in which an administrative tribunal will have exceeded its jurisdiction in this way, at p. 1086:
1. if the question of law at issue is within the tribunal's jurisdiction, it will only exceed its jurisdiction if it errs in a patently unreasonable manner; a tribunal which is competent to answer a question may make errors in so doing without being subject to judicial review;
2. if however the question at issue concerns a legislative provision limiting the tribunal's powers, a mere error will cause it to lose jurisdiction and subject the tribunal to judicial review."
Beetz J. made a similar statement in Syndicat National des Employes de la commission Scholaire Regionale de L'Outaouais (C.S.N) v. Union des Employes de Service, Local 298 (F.T.D.), 95 N.R. 161 (S.C.C.) in which he considered the distinction between analyses based on patent unreasonableness and earlier concerns with the "preliminary or collateral question". He stated at p. 204 ff.:
The idea of the preliminary or collateral question is based on the principle that the jurisdiction conferred on administrative tribunals and other bodies created by statute is limited, and that such a tribunal cannot by a misinterpretation of an enactment assume a power not given to it by the legislator. The theoretical basis of this idea is therefore unimpeachable--which may explain why it has never been squarely repudiated: any grant of jurisdiction will necessarily include limits to the jurisdiction granted, and any grant of a power remains subject to conditions. . . .
The concept of the preliminary or collateral question diverts the courts from the real problem of judicial review: it substitutes the question "is this a preliminary or collateral question to the exercise of the tribunal's power?" for the only question which should be asked, "Did the legislator intend the question to be within the jurisdiction conferred on the tribunal?" . . .
However by limiting the concept of the preliminary or collateral question and by introducing the doctrine of the patently unreasonable interpretation, this Court has signalled the development of a new approach to determining jurisdictional questions.
The formalistic analysis of the preliminary or collateral question theory is giving way to a pragmatic and functional analysis, hitherto associated with the concept of the patently unreasonable error. At first sight it may appear that the functional analysis applied to cases of patently unreasonable error is not suitable for cases in which an error is alleged in respect of a legislative provision limiting a tribunal's jurisdiction. The difference between these two types of error is clear: only a patently unreasonable error results in an excess of jurisdiction when the question at issue is within the tribunal's jurisdiction, whereas in the case of a legislative provision limiting the tribunal's jurisdiction, a simple error will result in a loss of jurisdiction. It is nevertheless true that the first step in the analysis necessary in the concept of a "patently unreasonable" error involves determining the jurisdiction of the administrative tribunal. At this stage, the Court examines not only the wording of the enactment conferring jurisdiction on the administrative tribunal, but the purpose of the statute creating the tribunal, the reason for its existence, the area of expertise of its members and the nature of the problem before the tribunal. At this initial stage a pragmatic or functional analysis is just as suited to a case in which an error is alleged in the interpretation of a provision limiting the administrative tribunal's jurisdiction: in a case where a patently unreasonable error is alleged on a question within the jurisdiction of the tribunal, as in a case where simple error is alleged regarding a provision limiting that jurisdiction, the first step involves determining the tribunal's jurisdiction.
In Canada (Procureur General) v. Alliance de la Fonction publique du Canada (1991), 123 N.R. 161 (S.C.C.) Sopinka J. stated at p. 174:
In this appeal it is necessary to consider whether the Board, in concluding that it could entertain the application made to it by the appellant, was interpreting a statutory provision which confers or limits jurisdiction. Essentially, this requires a determination as to whether the interpretation of s. 33 of the Staff Relations Act and, in particular the word "employees" contained therein, was intended by Parliament to be left to the Board or whether it was a provision limiting jurisdiction. If it is the latter then the Board's interpretation is reviewable if it is wrong. If, however, the interpretation of s. 33, and more specifically the meaning of the term "employees" was intended to be left to the Board then its decision is not reviewable unless the interpretation placed upon those provisions is patently unreasonable and the Board thereby exceeded its jurisdiction.
In Dayco (Canada) Limited v. National Automobile, Aerospace and Agricultural Implement Workers Union of Canada (1993), 152 N.R. 1 (S.C.C.) LaForest J., considered the related issues of arbitrability and jurisdiction, and the scope of judicial review of an arbitrator's findings that he had jurisdiction. The respondent union cited from his judgment at p. 32-33:
I have no doubt that the power to determine arbitrability will for many "matters" connote a grant of jurisdiction stricto sensu. Specifically, when the "matter" must be measured against the collective agreement to determine if it is arbitrable, the arbitrator will have the right to be wrong. This takes account of the entire purpose of the provision, which is to empower the arbitrator to deal with differences between the parties relating to the agreement. Moreover, this is in accord with the arbitrator's core area of expertise. After all, the most frequent challenge to an arbitrator's jurisdiction is an assertion by one of the parties that the incident underlying a grievance is not contemplated by the collective agreement. These issues are resolved by the arbitrator's application of the facts to the agreement as he or she interprets it, and this process is clearly intended to be left to the expertise of the arbitrator. However, when it comes to determining whether a collective agreement governs the rights and obligations of the parties irrespective of the interpretation of that agreement, the arbitrator has no benchmark; the existence or subsistence of the collective agreement itself is called into question. Although the arbitrator has the power to decide these questions, he or she must be correct in doing so.
LaForest J. stated at p. 34:
. . . [A]n arbitration board can properly take jurisdiction over grievances as they pertain to the collective agreement under which it is appointed, but when there is a dispute over whether the grievance pertains to some other agreement (or as the company alleges here, that it pertains to no agreement at all) then the board must determine its jurisdiction, and it must be correct in so doing.
He stated at p. 39:
The jurisprudence of this court, along with others, is clear on the purpose behind statutory arbitration of collective agreements--it is to provide for the speedy resolution of disputes over the administration of a collective agreement with minimal judicial intervention; see P.S.A.C., supra, at pp. 634 and 661 S.C.R. More generally, administrative tribunals exist to allow decisions to be made by a specialized tribunal with particular expertise in a relevant area of law; see National Corn Growers, at p. 1346 S.C.R. What, then, is the expertise of a labour arbitrator? Undoubtedly it is the interpretation of collective agreements, and the resolution of factual disputes pertaining to them. An arbitrator's expertise is in a limited sense related to labour relations policy, but it must be conceded that it falls short of the wide ranging policy-making function sometimes delegated to labour boards, as in Paccar, supra. In short, an arbitration board falls toward the lower end of the spectrum of those administrative tribunals charged with policy deliberations to which the courts should defer. Similarly, tribunals vested with the responsibility to oversee and develop a statutory regime are more likely to be entitled to judicial deference: see Paccar at p. 1003 S.C.R. and P.S.A.C. at pp 662-663 S.C.R. By contrast, in Bibeault the labour commissioner whose jurisdiction was at issue was not charged with implementation of a statutory scheme, a factor mitigating against the commissioner's jurisdiction.
The appellant makes the following additional points:
Using a functional and pragmatic approach, the Supreme Court of Canada has determined that Arbitration Boards are not entitled to the same judicial deference as Labour Relations Boards vested with the responsibility of overseeing and developing the statutory regime.
(Reference: Dayco, supra)
A statutory arbitrator exceeds his jurisdiction when he amends or makes additions to a collective agreement.
(Reference: Douglas Aircraft of Canada
Limited v. McConnell (1979),
99 D.L.R. (3d) 385 (S.C.C.) at
pp. 406-407).
On this point, this Honourable Court said in Nova Scotia Liquor Commission v. Nova Scotia Government Employees Union, Local 470 (1990), 97 N.S.R. (2d) 55 (N.S.C.A.):
Thus, in applying the test it is, in the last analysis, for the Court to make a judgment call on the reasonableness of the decision under review. In doing so, it must exercise restraint and the jurisdiction to set aside such a decision will be sparingly used. Where, however, the Court's evaluation of the decision leads to the conclusion that rather than having interpreted the agreement, the arbitrator has amended it, added to it or overlooked material provision in it, the threshold is reached. (pp 57-58)
The Company submits that the Arbitrator exceeded his jurisdiction:
(a) by relying on the Nova Scotia Trade Union Act and the Arbitration Act
(b) by amending the Collective Agreement to find that the Craft Bargaining Unit has an inherent and exclusive right to the work in question.
While "mere errors of fact and law" are not reviewable, "patently unreasonable errors fall within the scope of a Court's power of review on certiorari
(Reference: Blanchard v. Control Data
Limited (1984), 14 D.L.R. (4th) 289 (S. C.C.) at p. 291.
Canada Post Corporation v. PSAC, supra;
Chipman, J.A. at p. 551.) . . .
In T.W.U. v. British Columbia Telephone Companies, [1988] 2 S.C.R. 564 the Supreme Court of Canada adopted the reasons of Lambert, J.A. of the British Columbia Court of Appeal, (at p. 568), including the following statement (which was explicitly cited by the minority in TWU at p. 587) concerning the scope of review of a statutory tribunal:
A statutory tribunal should follow its own previous decisions and for that reason, ought to be required to be right in its interpretation of general public enactments and general legal principles, and ought to arrive at its decision, even on matters particularly within its special expertise and function, on the basis of a demonstrably rational process."
A finding made by a statutory tribunal in the absence of supporting evidence is patently unreasonable.
(Reference: Planet Development Corporation v. Plumbers and Pipefitters Union, Local 740
(1990),123 N.R. 241 at p. 292.)
The Applicant submits that the Arbitrator committed patently unreasonable errors as follows:
(a) in finding that the Nova Scotia Trade Union Act and Arbitration Act were relevant to his jurisdiction;
(b) in finding that the Craft Bargaining Unit had an exclusive and inherent right to the work in question; and
(c) in finding that the work in question was Craft Bargaining Unit work simply because it has historically been performed by members of the Craft Bargaining unit and that the nature of the work was an irrelevant consideration to a determination of what is bargaining unit work.
The respondent union's analysis of the standard of review as it applies to the decision of the arbitrator in the present case is as follows:
The Union submits that Arbitrator Veniot was acting within the primary jurisdiction conferred on him by Section 60 of the Canada Labour Code when he determined the matters before him were arbitrable. He had the right to be wrong: Dayco, supra.
Accordingly, Arbitrator Veniot then had a right to be wrong in his interpretation of the Collective Agreements. His interpretation can only be reviewed if it was patently unreasonable.
The wording of the privative clause found in Section 58 of the Canada Labour Code indicates a desire to shield the decisions of arbitrators from judicial intervention. The Canada Labour Code conferred on Arbitrator Veniot a broad authority to arbitrate all differences between the parties to the collective agreements. Arbitrator Veniot did not exceed his jurisdiction when he answered the questions put to him by the parties. He interpreted the provisions of the collective agreements before him in order to determine whether the assignment of work by the appellant violated the provisions of the Craft and Clerical Collective Agreements. That interpretation can only be interfered with if it was patently unreasonable.
Arbitrator Veniot undertook a comprehensive and rigorous review of the whole of both Collective Agreements and the six days of evidence presented to him. This process was not clearly irrational. Arbitrator Veniot's findings of fact are beyond judicial reach. They were well supported by the evidence: Douglas Aircraft of Canada Ltd., supra.
The Union submits that far from being patently unreasonable Arbitrator Veniot's interpretation of the Collective Agreements was entirely correct. It has a clear, rational basis. His findings rest on an interpretation of the whole of the Collective Agreements before him which is not patently unreasonable and should not be disturbed by this Honourable Court.
In my view Arbitrator Veniot was within jurisdiction conferred by the Canada Labour Code in determining that the questions raised by the grievances were arbitrable within the terms of the craft and clerical collective agreements. He was not charged with policy deliberations nor was he a tribunal vested with the responsibility to oversee and develop a statutory regime. The jurisdiction conferred by the Code was not diminished nor abridged by his mistaken references to the Trade Union Act and the Arbitration Act, as will appear below. Two collective agreements, each a separate entity, were involved, but their separate effects was not a basis for dispute. The "matter" of the grievances was to be "measured against the collective agreement to determine if it is arbitrable," and in doing so the arbitrator had the right to be wrong. Having correctly determined that his primary jurisdiction is to interpret the collective agreements to answer the questions before him, he is entitled to judicial deference and subject to review only if he commits errors which are patently unreasonable. This is true even if alleged errors arising out of his interpretation of the provisions of the agreements can be characterized as jurisdictional in nature. While the arbitrator of a labour dispute is not entitled to as high a degree of judicial deference as a board interpreting a statutory regime, the interpretion of collective agreements is within his particular expertise and he is clearly entitled to deference. (See Pezim v. British Columbia (Superintendent of Brokers) S.C.C., June 23, 1994 No. 23107, 23113.) He will be subject to judicial review only if he commits errors as to fact or law, including errors of law relating to the jurisdiction conferred upon him by the collective agreements, which are patently unreasonable, that is, irrational in the sense that they are illogical.
THE FIRST GROUND
The Clerical Bargaining Unit, but not the Craft Bargaining Unit, has been formally certified by the Canada Labour Relations Board. The appellant's factum provides the following explanatory note:
In the case of the Craft Bargaining Unit, to date there has not been a Certification Order issued by the Canada Labour Relations Board. In accordance with the Board's practice, there is a voluntary recognition of the existing bargaining unit that had been earlier certified by the Nova Scotia Labour Relations Board. The Union has applied to the Board for certification of an expanded bargaining unit. This matter is currently before the Canada Labour Relations Board.
It appears that Arbitrator Veniot found his jurisdiction with respect to the Craft Agreement under ss. 41 and 43(1)(a), (b), (c) and (e) of the Trade Union Act R.S.N.S. 1989 c. 475, which he set out at length, and with respect to the Clerical Agreement under the Canada Labour Code. The Supreme Court of Canada established in CNCP Telecommunications v. Alberta Government Telephones et al. (1989), N.R. 151 that the labour relations of all telecommunications companies in Canada falls exclusively under federal jurisdiction. The parties are in agreement on this. They also agree that Arbitrator Veniot sat as a statutory arbitrator under s. 57 of the Canada Labour Code, not as a consensual arbitrator to whom the Arbitration Act, R.S.N.S. 1989 c. 19, particularly the privative clause in s. 5(h), would apply.
The first ground of appeal is that the chambers judge erred in law in finding that Arbitrator Veinot's error in relying on the two Nova Scotia Acts "was a technical error only which did not justify the quashing of the Arbitrator's decision."
The appellant argues:
Questions of constitutional jurisdiction were not intended by the legislators to be matters within the exclusive jurisdiction conferred on the arbitrator. Thus when considering such issues, the arbitrator must be correct or his decision is subject to being overturned on judicial review. On this basis alone, Arbitrator Veniot's errors should result in the quashing of his award.
I would agree with the trial judge that little turns on the mistake in identification of the source of the arbitrator's jurisdiction in and of itself. A reviewable jurisdictional error will be apparent only if the arbitrator purports to exercise authority found only in the provincial legislation or, conversely, fails to exercise relevant powers provided by the federal legislation. The appellant argues that such a jurisdictional error occurred with respect to the identification or definition of the bargaining units because the approach to work assignments varies between the Canada Labour Code and the Trade Union Act.
The appellant cites Communication Workers of Canada and Bell Canada et al. (1982), 50 di 105 in which the Canada Labour Relations Board stated at p. 114-115:
. . . The Board realizes that sometimes after certification has been granted, the parties may extend the bargaining unit with respect to the certified unit through the act of voluntary recognition or restrict it by excluding certain job categories mentioned in the certificate issued. . . . This practice, accepted in other jurisdictions, is not recognized by this Board because of its policy on determining appropriate bargaining units in the case of the applications filed under s. 124 of the Code:
In the federal jurisdiction the Board assumes an active role in determining appropriate bargaining units. . . . the practice of accepting units agreed upon by the union and employer was set aside in favour of the Board's exercise of its wider mandate and responsibility. This was a marked departure from the practice in several provinces where the Board also operates and where our approach is frequently condemned because it differs from the local tripartite board or court approach. . . . to underline the Board's approach the parties are reminded in each case that, regardless of any agreement they may reach, the Board has sole authority to determine the appropriateness of the bargaining unit. . . .
With this authority, the Board which fashions the unit and does not accept that the parties may negotiate it initially or its modification, must continue to shape the unit as the employer's enterprise changes and be the arbiter of its boundaries. . . .
The respondent union compared provisions of the Trade Union Act and the Code to show general similarities. It argues that if existence of the collective agreement or the identification of the parties had been an issue it could have been referred to the Canada Labour Relations Board pursuant to s. 65 of the Code, which was not done. It cites Northern-Loram-Joint Venture and Canadian Brotherhood of Railway, Transport and general Workers et al. (1985), 9 C.L.R.B.R. (N.S.) 218 (C.L.R.B.) and General Teamsters Local Union No. 362 v. Canada Labour Relations Board (1986) 67 N.R. (F.C.A.) in support of its proposition that the Canada Labour Relations Board does not have exclusive jurisdiction to determine the work jurisdiction of bargaining units.
The trial judge accepted the position of the respondents. I do not find it was an error of law for him to have done so. Therefore the arbitrator was within his primary jurisdiction in addressing the questions raised by the grievances. It remains relevant in determining the other two issues in this appeal whether the arbitrator's reasoning was unduly influenced by the Trade Union Act rather than the Code, but that does not go to his jurisdiction to arbitrate the grievances. I would dismiss this ground of appeal.
THE SECOND AND THIRD GROUNDS
As the respondent union states these grounds (issues # 3 and #4 in the respondent's factum) they are very similar:
Issue #3 Did the Trial Judge err in refusing to quash the finding of the Arbitrator that Craft Bargaining Unit work was identifiable and could not be assigned to employees outside the Craft Bargaining Unit
Issue #4 Did the Trial Judge err in refusing to quash the finding of the Arbitrator that the work in question was Craft Bargaining Unit work which could not be assigned to employees outside the Craft Bargaining unit.
The appellant states these issues as follows:
Issue #2 That the Learned Trial Judge erred in law in finding that Arbitrator Veniot had not committed reviewable error in his decision that the Craft Bargaining Unit has an inherent and exclusive right to perform the work in question even though there is no express or implied limitation on management's right to assign work under the Craft Agreement.
Issue #3 That the Learned Trial Judge erred in law in finding that Arbitrator Veniot had not committed reviewable error in his decision that the Company was prohibited from assigning work to the Clerical Bargaining Unit solely because the work had been performed in the past by the Craft Bargaining Unit and that the nature of the work was an irrelevant consideration to a determination of whether the work assignment was proper.
While it will be necessary to be mindful of the distinctions between the approaches of the two parties, the two issues, in large measure, may be conveniently considered together.
The repair dispatchers had historically done their own paper work incidentally to the work of dispatching, and they were doing it at the time the relevant collective agreements were entered into. Was management thereby precluded from assigning that paper work, which it identified as clerical in nature, to members of the clerical bargaining unit?
The appellant argues that the "nature" of work is more important under the Code than under the Act, citing Bell Canada, and was too lightly dismissed by the arbitrator. If the question was merely one of deciding whether the history of certain work should prevail over the nature of the work as a basis for further determinations, the arbitrator would have been clearly within his jurisdiction in deciding the matter either way, and it would have been difficult to fault either answer as "patently unreasonable."
On this point the arbitrator stated:
I have no difficulty in concluding that the change in function involved the transfer of bargaining unit work from the craft unit to the clerical unit. I see no possibility for any other conclusion on the evidence. The fact of the matter is that the dispatch clerk in the interests of the employer's objectives noted above began to and still does perform functions hitherto performed only by repair dispatchers. The position advanced by the employer--that the repair dispatcher's "real job" was "dispatching"--and that prior to the changeover they were really doing things that were clerical in nature--can be conceded without damage to this conclusion. This is so because the test on whether something is "bargaining unit work" is not the "nature" of the work--a slippery concept--but is whether it is work normally and actually performed by members of the bargaining unit. There is no question that repair functions taken on by the dispatch clerk were tasks normally performed by members of the bargaining unit. See Brown and Beatty, cited above at p. 24, 25.
The repair dispatchers were clearly doing the paper work in question before the appointment of the dispatch clerks; the gist of the matter is whether management had the right to reassign the work. The arbitrator found there was no express provision in the collective agreements limiting management's right to do so. He found that any limitation on that right had to be expressed, not implied. He thereupon conducted an analysis with the result that he did imply such a term in the interests of "maintaining the integrity of the collective agreement." In my view in doing so he exceeded the jurisdiction conferred by the agreements by implying a term that amended the agreements and arrived at a patently unreasonable result.
The statutory jurisdiction conferred on the arbitrator by s. 57 of the Code is modified by that provided under the collective agreements; Articles 25.1 and 25.4 of the Craft Collective Agreement provide:
25.1 Whenever a difference relating to the interpretation, application, administration or alleged violation of this Agreement arises between the Company and Union, either party may, after complying with the provisions as set forth in the Grievance Procedure, submit the matter to arbitration.
25.4 The arbitrator shall not have any power to alter or change any of the provisions of this agreement, or to substitute any new provisions for any existing provisions thereof, and in reaching his decision he shall be bound by the terms and provisions of the agreement.
The appellant argues:
It is a matter of fundamental principle that the rights and benefits obtained under a collective agreement are those which have been the subject of collective bargaining and collective agreement.
(Reference: Shell Canada Products Limited
and Energy and Chemical Workers
Union, Local 848 (1990), 10 L.A.C. (4th) 39 at p. 46;
and
Re Markham Hydro-Electric Commission and I.B.E.W., Local 636 (1992) 24 L.A.C. (4th) 412 at p. 418.)
Management maintains the inherent right to assign work to persons outside the bargaining unit unless there is an express or implied provision in the collective agreement to the contrary.
For example, Brown and Beatty, supra, states on this point:
. . . [I]t is now generally conceded that whether or not an express provision giving management the power to initiate such changes [i.e. to assign certain aspects of its work to persons or firms outside the bargaining unit]. . . . is included in the Agreement, inherently management possesses this power or ability to initiate such changes. Very simply, Arbitrators have recognized that such authority flows from management's function and responsibility to manage the enterprise."
(Reference: Brown and Beatty, Canadian
Labour Arbitration, supra, at p. 5-1.)
Where there is no express prohibition in the collective agreement against the assignment of work, arbitrators, in some of the more recent arbitral jurisprudence, have implied a fetter on management's right to assign work. On this point, Brown and Beatty, supra, states:
In early awards, Arbitrators frequently treated the assignment of bargaining unit work to employees who were excluded from the scope of the Agreement on the same basis as they did sub-contracting. Accordingly, in the absence of express language in the Agreement to the contrary, these Arbitrators concluded that employers were not fettered in their ability to assign work to their employees who were excluded from the bargaining unit, provided that, as in all instances involving the reallocation and reassignment of work, the assignment was made in good faith, for valid business purposes, and in a manner that was neither discriminatory or arbitrary. However, in later awards, Arbitrators have distinguished such assignments from those in which the work was contracted out, and have implied, from the seniority, classification, recognition and wage clauses, a fetter on management's discretion to make such assignments.
(Reference: Brown and Beatty, Canadian Labour Arbitration, supra, at p.5-18.)
Under the Craft Agreement, there is no express provision which would prevent the Employer from reassigning work to employees of another bargaining unit. This is to be contrasted with the Clerical Agreement, negotiated by the same parties, which does contain an express prohibition as follows:
Article 20.1 Persons not covered by this collective agreement shall not do work normally performed by clerical employees except in emergencies and except where such work may be performed by such persons as part of bona fide management training. . . .
(Reference: Clerical Agreement ...)
Furthermore, the parties have agreed in Article 5.1 of the Craft Agreement that the Arbitrator cannot imply such a term.
5.1 The Union recognizes and agrees that the Company has the right and authority to operate and manage its assets and business, and direct the working forces of the Company, and to hire, suspend, demote, transfer, lay-off, or discharge employees for proper and sufficient cause, and these rights and authority are abridged or limited only by the express provisions of this Agreement. (Emphasis added in Appellant's Factum.)
(Reference: Craft Agreement . . . )
Arbitrator Veniot recognized that the Craft Agreement contains no express prohibition against the reassignment of work and that he had no jurisdiction to imply such a provision. On this point, Arbitrator Veniot stated:
These Articles preserve the right and authority to operate the undertaking, including the right to direct the work forces. These rights are subject to abridgement or limitation "only by the express provisions of this agreement." The difficulty is this: assuming that the assignment of work is a management right, and that there are no express provisions preventing the exercise of that right, what is wrong with the employer making the assignment? If there is a limitation, it cannot be an implied limitation, because the agreement requires an express limitation.
In this sense, the case is distinguishable from well-known cases such as Re Orenda Ltd. and International Association of Machinists, Lodge 1922 (1972), 1 L.A.C. (2d) 72 (Lysyk, Chair). See also my award in Re Nova Scotia Department of Transportation and Communications and CUPE, Local 1867 (1991), 19 L.A.C. (4th) 23, where a number of authorities are discussed. This line of cases deals with situations in which a term limiting the ability to make work assignments is implied. These agreements, in my opinion, prohibit the implication of any such term."
In the Department of Transportation case Arbitrator Veniot had found that in the absence of an express clause fettering the right of management to assign its tasks as it saw fit, "it would have to arise under the agreement by implication."
Not having identified an express provision limiting management's right to assign work, and having found that the agreement requires an express limitation, not an implied one, Arbitrator Veniot stated:
Despite the language used, however, I do not think Article 5 should, or more importantly, can be read so as to require an affirmative provision in the agreement which takes away the right of management to assign work as it pleases.
He then embarks upon an analysis of the "duty to maintain the integrity of the collective agreement, referring to Re United Steelworkers of America, Local 817 and Fittings Ltd. (1969), 20 L.A.C. 249. at p. 255-256 and Re International Association of Machinists, Lodge 717 and Hawker Siddeley of Canada Ltd. (1963), 14 L.A.C. 197.
He stated:
In the context of the language of Article 5, the reference to the duty to maintain the integrity of the collective agreement is a most important observation. I think this observation rests on the bedrock of the law. It is divorced, in my opinion, from anything which is peculiar to labour law or to any particular collective agreement. The collective agreement is a contract, albeit one which has many special characteristics. Our law requires a contract to be supported by consideration. In my view, the interpretation proposed by the employer would destroy the intended legal effect of the contract. . . .
The craft agreement is a bilateral contract--promise for promise. It is the mutuality of promises which constitutes the legal consideration. These promises create the mutual obligations which bind the parties and constitute the contract. A theory of interpretation which held that it was one term of the contract that the employer could promise nothing - for that is where the argument inevitably leads - -and walk away from any obligation simply by assigning all work outside the bargaining unit, would create legal problems of a most fundamental nature. One way or another, there would be no contract at all because the consideration is illusory. In the result, there would be no legal obligation. This result could find expression in a number of legal ways - there is no consideration, no real offer and acceptance, the contract has been frustrated, there has been a failure of consideration, etc.
In endeavouring to found his conclusions in contract law rather than labour law, Arbitrator Veniot appeared to leave the shelter of judicial deference, although little may turn on this. It is however difficult to conclude that the interpretation urged by management would leave the collective agreement so bereft of consideration as to be void as a contract. Indeed, the concept of integrity of the collective agreement may well have been stillborn; counsel were unable to point to its use in arbitral jurisprudence since the 1960s.
Brown and Beatty state at pp. 5-12.1 and 5:13:
A determination that certain tasks fall within the class of work normally performed by employees within the bargaining unit does not imply that the employees have a proprietary right to that work. To the contrary, in the absence of specific language in the collective agreement providing otherwise, it is now universally accepted that bargaining unit work may be sub-contracted to non-employees, provided that the sub-contracting is genuine and not done in bad faith. Whatever the view may have been in the earlier awards, it is now settled that to prohibit sub-contracting the agreement must expressly so provide.
The appellant asserts that this principle "has been confirmed in an Arbitration between the Company and the Telephone Employees Union, a predecessor union to the respondent, in Re Maritime Telegraph and Telephone Company Limited and Telephone Employees Union, Union Grievance on contracting out, (1989), 8 L.A.C. (4th) 22, Arbitrator Bruce Archibald. The appellant refers to this as the "Archibald Decision."
In that decision Arbitrator Archibald set out the history of Article 20.1 to show that it had been negotiated between the parties. He stated:
The evidence of negotiating and conciliation history demonstrates that in agreeing to the present wording of Article 20.1, both parties intended the clause to prohibit encroachment upon the jobs in the TEU Bargaining Unit by assignment of that work to supervisory personnel or employees who were members of other bargaining units.
The appellant argues, with respect to Arbitrator Veniot's conclusion that the consideration for the contract would be illusory if management retained the right to reassign work, that:
However, Arbitrator Veniot's reasoning is erroneous. A finding that there is no inherent fetter on Management's right to assign work does not have the effect of destroying the binding nature of the contract between the parties as suggested by Arbitrator Veniot. Management's right to reassign work, even in the absence of an express or implied provision of a collective agreement, must be exercised in good faith, for valid business purposes, and in a manner that is not discriminatory or arbitrary. (Brown and Beatty, Canadian Labour Arbitration, supra, p. 5-17; see also Archibald Decision, supra, at p. 41). Clearly, the concerns raised by Arbitrator Veniot could be addressed through a consideration of these factors rather than by the fiction of finding an inherent right to the work not expressly or implicitly found within the terms of the Collective Agreement but based on a so-called "duty to maintain the integrity of the collective agreement."
The Arbitrator acted outside his jurisdiction by amending the Craft Agreement to provide to the Craft Bargaining Unit a proprietary right to the work in question that it did not obtain either expressly or by implication through negotiation of the Craft Agreement.
Furthermore, the reasoning of the Award is patently unreasonable. The Arbitrator's decision on this point is contrary to the arbitral jurisprudence on management's right to assign bargaining unit work to non-bargaining unit employees. It is contrary to Arbitrator Veniot's own decision in Department of Transportation, supra. It is also contrary to the understanding of these parties as evidenced by the specific inclusion of a provision addressing the reassignment of Bargaining Unit work in the Clerical Agreement.
The respondent union submits
. . . that the interpretation and application of the Craft and Clerical Collective Agreements were matters within the sole jurisdiction of Arbitrator Veniot which cannot be interfered with unless they are patently unreasonable.
After an extensive review of the provisions of the Craft Collective Agreement, Arbitrator Veniot concluded that the Craft Collective Agreement did define bargaining unit work, and further, that the Collective Agreement when read as a whole, significantly and expressly fettered the ability of the Appellant to assign this work to non-members of the Craft bargaining unit. (Emphasis added.)
Arbitrator Veniot interpreted and applied the management rights clause as set out in Article 5 of the Craft Collective Agreement and Article 27.1 of the Clerical Collective Agreement. The language is identical in both Collective Agreements. Article 5.1 of the Craft Collective Agreement reads as follows:
5.1 The Union recognizes and agrees that the Company has the right and authority to operate and manage its assets and business, and direct the working forces of the Company, and to hire, suspend, demote, transfer, lay-off, or discharge employees for proper and sufficient cause, and these rights and authority are abridged or limited only by the express provisions of this agreement (emphasis added in Respondent's Factum).
Arbitrator Veniot concluded that this clause meant that limitations on management rights must be express. Accordingly, a term limiting management's right to assign work could not be implied.
Arbitrator Veniot then concluded that limitations on management's rights to assign bargaining unit work to other employees were expressly set out throughout the whole of the Collective Agreements. (emphasis added in Respondent's Factum.) Article 5.1 did not require "an affirmative provision in the agreement which takes away the right of management to assign work as it pleases": Appeal Book, Part I, Tab 5, at p. 37. This interpretation is not patently unreasonable, and in fact is correct.
CONCLUSION
I would agree that the arbitrator's result can only be justified by the existence of an express limitation on management's rights to assign bargaining unit work. I cannot agree with the respondent's submission that the arbitrator was successful in finding one. An inference drawn from an agreement as a whole is not an express provision, although it may be an implied term. It cannot be made an express provision of the agreement merely by calling it that.
The adjective "implied" is defined as:
Contained or included but not directly stated.
~The New Illustrated Webster's Dictionary
Involved, indicated or suggested without being directly or explicitly stated; tacitly understood.
~The Random House Dictionary of the English Language
"Express" means
To put (thought) into words; utter or state.
~The Random House Dictionary of the English Language
Article 25.4 of the Craft Agreement provides:
25.4 The arbitrator shall not have any power to alter or change any of the provisions of this Agreement, or to substitute any new provisions for any existing provisions thereof, and in reaching his decision he shall be bound by the terms and provisions of the Agreement. (Emphasis added.)
It will be recalled that Arbitrator Veniot found:
These Articles preserve the right and authority to operate the undertaking, including the right to direct the work forces. These rights are subject to abridgement or limitation "only by the express provisions of this agreement." The difficulty is this: assuming that the assignment of work is a management right, and that there are no express provisions preventing the exercise of that right, what is wrong with the employer making the assignment? If there is a limitation, it cannot be an implied limitation, because the agreement requires an express limitation. (Emphasis added.)
The result of the arbitrator's analysis of the "duty to maintain the integrity of the collective agreement", was to find that the collective agreement implicitly limited management's rights to assign work. An implied term cannot be an "express provision of this agreement", nor can it operate as a limitation on that right of management, as Arbitrator Veniot himself had found.
Arbitrator Veniot stated:
Despite the language used, however, I do not think Article 5 should, or more importantly, can be read so as to require an affirmative provision in the agreement which takes away the right of management to assign work as it pleases.
He thereby altered Article 5.1 to give it a meaning other than the obvious meaning conveyed by the words arrived at by collective bargaining. It is a logical impossibility for an implied term to be an express term, or for an express term to be implied into an agreement. By purporting to amend the agreement contrary to Article 25.4 he exceeded the jurisdiction defined by the collective agreement. Moreover, because he chose to amend the agreement in the face of the very clear and specific language of Article 5.1, and his stated understanding of it, his jurisdictional error must be seen as a patently unreasonable one, irrational in the sense that it is illogical. It is an error going to the heart of the questions raised by the grievances. His result was dependent upon finding an express limitation on management's rights to assign work. In the absence of an express limitation, it is patently wrong.
Arbitrator Veniot purported to deal with the questions before him, but by committing a patently unreasonable error in the interpretation of the agreement, giving it a meaning it could not reasonably bear, he exceeded his jurisdiction in a patently unreasonable way. See CPAA v. Canada Post Corporation (1993), 121 N.S.R. (2d) 112 (N.S.C.A.) For these reasons the chambers judge was in error in refusing certiorari.
Without deciding on the existence of such rights, it follows that any proprietary rights of the Craft Bargaining Unit to aspects of work, incidental or otherwise, that have been historically performed by its members must be subject to the rights of management to manage the undertaking and assign work pursuant to Article 5.1. In making any reassignment of work management is bound to do so in good faith, for valid business purposes, and in a manner that was neither discriminatory nor arbitrary. In addition, there is an implied term in every collective agreement that an employer must act reasonably: Civil Service Commission (N.S.) v. N.S.G.E.U. (Wexler) (1993), 123 N.S.R. (2d) 217 (N.S.C.A.).
I would allow the appeal, set aside the order of the Chambers judge and issue an order in the nature of certiorari quashing the award of the arbitrator and fixing costs at $1,000.00 plus disbursements.
J.A.
Concurred in: Jones, J.A.
Pugsley, J.A.
C.A. No. 102043
NOVA SCOTIA COURT OF APPEAL
Cite as: Maritime Telegraph & Telephone Co. Ltd. v. Atlantic
Freeman, Jones and Pugsley, JJ.A.
BETWEEN:
MARITIME TELEGRAPH AND )
TELEPHONE COMPANY, LIMITED ) Jan McKenzie
) for the Appellant
Appellant )
)
)
- and - )
)
) Ronald A. Pink, Q.C.
) for the Respondent
)
ATLANTIC COMMUNICATION AND )
TECHNICAL WORKERS' UNION and )
MILTON J. VENIOT )
)
Respondents )
)
) Appeal Heard:
) September 27, 1994
)
) Judgment Delivered:
) November 15, 1994
)
)
)
E R R A T U M
Page 7, first full paragraph, 4th line down, the citation should read "Nova Scotia Government Employees Union v. Civil Service Commission (N.S.) et al. (1992), 112 N.S.R. (2d) 444 (N.S.S.C.A.D.); and (1993), 123 N.S.R. (2d) 217 (N.S.C.A.).