Supreme Court of Nova Scotia
Citation: Public Service Alliance of Canada v. Sydney Airport Authority, 2015 NSSC 38
Date: 2015-02-03
Docket: Syd. No. 428419
Registry: Sydney
Between:
Public Service Alliance of Canada
Applicant
v.
Sydney Airport Authority
Respondent
Decision on Judicial Review Application
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Judge: |
The Honourable Justice Robin C. Gogan |
|
Heard: |
January 8, in Sydney, Nova Scotia |
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Counsel: |
Andrew Astritis, for the Applicant Eric Durnford and Isabelle French, for the Respondents |
By the Court:
Introduction
[1] The Public Service Alliance of Canada (the “Union”) applies for judicial review of an Arbitrator’s Award (the “Award”) dated May 8, 2014. The Award dismissed a grievance brought by the Union on behalf of Greg MacIsaac (the “employee”). Greg MacIsaac is a former employee of the Sydney Airport Authority, (the “employer”).
[2] The Union seeks to have the Award quashed. It is of the view that the decision of the Arbitrator is unreasonable and cannot be sustained.
[3] The employer contests this Application. It takes the position that the Award was reasonable and ought not be disturbed.
[4] Broadly speaking, this matter involves the issue of whether the Collective Agreement in question permits the accumulation of vacation credits while an employee is on sick leave with pay. Both the employer and the Arbitrator were of the view that it does not. It falls to this Court to review the Arbitration Award under the requisite standard of review and determine whether this application shall be granted or dismissed.
[5] The employee is a plumber/pipefitter. He first began employment with the Sydney airport in August of 1988. In the early years of his employment, the airport was the responsibility of Transport Canada. The employee worked there continuously until 1995 when he took a position with Parks Canada at the Fortress of Louisburg. He worked with Parks Canada until 2000 when he returned to the Sydney airport. By then, the airport had been divested from Transport Canada and was under the control of the Sydney Airport Authority.
[6] On October 20, 2011, the employee requested leave from work to have knee replacement surgery. The request was for indefinite leave. The employee had accumulated a significant amount of sick leave credits during his employment. Sick leave was approved by the employer on October 28, 2011. His last day of work was October 25, 2011.
[7] Near the end of his sick leave period, the employee raised the issue of vacation leave with the employer. The terms of his Collective Agreement allowed for the accumulation of vacation credits for each month that he received at least 10 days pay. It was his view that he qualified for vacation credits as he had received pay during his sick leave. He therefore asked the employer for vacation credits for the entire period that he had been on sick leave with pay.
[8] The parties met on October 4, 2012 to discuss the issue. The employer subsequently sent a letter to the employee on October 9, 2012 informing him that he would not be receiving vacation leave credits for the period he was on sick leave.
[9] As a result of the employer’s decision, the employee filed a grievance on October 15, 2012. He sought vacation credits for the period November 2011 to September 2012. The employer denied the grievance by further letters dated October 23, 2012 and November 2, 2012. The employer took the position that the employee could not accumulate vacation credits while on sick leave.
[10] The employee has not returned to his job and commenced long term disability benefits in February of 2012.
[11] The employee’s grievance was referred to arbitration. The hearing was held on October 17, 2013. The Arbitrator’ Award was issued on May 8, 2014 and dismissed the grievance. It was the Arbitrator’s view that the Collective Agreement did not allow the employee to accumulate vacation credits while they were on sick leave with pay.
[12] The union now seeks judicial review of the Arbitrator’s Award. The hearing was held on January 8, 2015.
Issue
[13] The one issue before this Court is whether the Arbitrator’s Award is reasonable.
[14] The focus of the reasonableness review is on the Arbitrator’s interpretation of the Collective Agreement and specifically on his interpretation of the word “pay”.
[15] The focus of the judicial review hearing was on whether the Arbitrator’s Award fell within the range of possible rational outcomes. The facts and issues before the Arbitrator were not complex. His reasons were not lengthy. The apparent simplicity of the matter belies a now challenging review for this Court given the robust submissions made by the parties.
Decision Under Review
[16] The grievance was submitted to Arbitration pursuant to Article 27.03 of the Collective Agreement between the parties. The parties agreed upon a single Arbitrator to hear the Arbitration. Pursuant to Article 27.05, it was the parties’ intention that the decision of the Arbitrator be final and binding. Article 27.07 provides that the Arbitrator has no authority to change, modify or alter the terms of the Collective Agreement. The Arbitrator was required to provide a decision to the parties based upon his interpretation of the Collective Agreement. Section 58(1) of the Canada Labour Code provides that such decisions are final and “shall not be questioned or reviewed in any court”.
[17] The focus of the hearing was the meaning of Article 13.02 of the Collective Agreement which provides:
13.02 An employee shall earn vacation leave credits for each calendar month during which the employee receives at least ten (10) days pay at the following rates:
…
Employees not working in a full time capacity will earn vacation credits on a pro-rated basis according to the number of hours worked.
[18] At Arbitration, the union took the position that the employee was entitled to accumulate vacation leave credits while on sick leave with pay by virtue of the wording of Article 13.02. This Article provided that an employee was entitled to accumulate vacation leave for every month in which he received a minimum of 10 days pay. While on sick leave, the employee received “pay” under Article 15 of the Collective Agreement (“Sick Leave”) and in particular Article 15.02. Accordingly, it was the union’s view that the employee qualified for accumulation of vacation leave credits under Article 13.02 for the period of his approved sick leave with pay.
[19] The employer disagreed. It was its view that sick leave pay was not “pay” for the purpose of Article 13.02. Sick leave was insurance against illness. It must be earned in the sense that an employee must work to accumulate these credits. If the union’s interpretation of “pay” was preferred then an employee would be able to accumulate sick leave credits while on sick leave under Article 15 and holiday pay under Article 12. In the employer’s view, such a result would be “highly anomalous”.
[20] The employer noted that the employee had not advanced claims for sick leave credits or holiday pay for the period of his sick leave. The employer submitted that the principle of expressio unius est exclusion alteruis applied and supported the interpretation sought.
[21] In reply, the union argued that the wording of Article 13.02 was clear. The word “pay” was not qualified in any way and could have been if that is what the parties intended. The Article, plainly read, requires only that the employee receive “pay”.
[22] After reviewing the evidence presented, and the positions of the parties, the Arbitrator made the following succinct decision (which is fully reproduced here for convenience):
Analysis and Award
39. Despite the Union’s persuasive arguments, I am of the view that the Employer’s position is correct and consequently the grievance must be denied.
40. The fundamental question to be answered is whether or not sick leave is considered “pay” for the accumulation of vacation leave credits. I find that it is not. To agree with the Union’s position, would mean that not only would an employee accumulate vacation leave credits while on sick leave, but would also accumulate sick leave credits while on sick leave as Article 15.01 has essentially the same wording as Article 13.02. Accumulating additional sick leave credits while not in the workplace on sick leave is anomalous and I find no evidence form (sic) the Collective Agreement that this was the intention of the parties.
41. I note that (sic) do find it interesting that the Grievor did not make a claim for sick leave benefits as well, notwithstanding the fact there is nothing requiring a person to grieve, or make a claim for a loss of a benefit, the fact that a seasoned Union employee knowledgeable in the grievance process would not make a claim begs the question why and his answer to said question that “he missed it” seemed unusual given the fact the Grievor was turning his mind to the loss of benefits under the Collective Agreement. Notwithstanding that, the case does not turn on whether or not the Grievor made a claim for sick leave benefits but instead what is the nature of the sick leave benefits and if the Collective Agreement provides for the accumulation of benefits while an employee is on sick leave and not actively in the work place.
42. I find that pay is earned while actively working. Sick leave “pay” is not regular pay. It is not earned. It is an insurance or indemnity against illness; a benefit provided to Employees under the Collective Agreement. Vacation leave credits are the same. They are a benefit accumulated while earning pay.
43. To find for the union would be in my mind an unreasonable interpretation of the Collective Agreement and would create an absurdity whereby an Employee could accumulate benefits while not working, resulting in an accumulation of vacation leave credits and sick leave credits while out of the workplace on prior accumulated sick leave credits.
45. I have reviewed the authorities surrounding the issue and the case law supports this interpretation. The prevalent arbitral jurisprudence is that sick leave benefits are not considered “pay” in the ordinary sense of the word, unless the Collective Agreement expressly provides for such an interpretation.
46. I find no evidence that the intention of the parties was to provide for the accumulation of vacation leave and given the similar wording of the Collective Agreement, by default sick leave while out of the workplace on sick leave.
47. For these reasons I must find that the Union has not established that the Grievor is entitled to the vacation leave credits in question.
[23] Accordingly, the Arbitrator went on to dismiss the grievance.
[24] The Union is of the view that the Award is unreasonable. It submits that the Award contains a number of errors. First, the Arbitrator failed to apply the plain meaning of the word “pay”. Second, the Arbitrator mistakenly concluded that the employee’s sick pay is not earned contrary to the express wording of the Collective Agreement. Third, the Arbitrator misinterpreted or mischaracterized the arbitral jurisprudence and then used this as the basis for his interpretation. Finally, the Arbitrator failed to undertake any textual analysis of the Collective Agreement.
[25] The Employer says that the Arbitrator’s decision is reasonable and entitled to a “high level” of deference given that the Arbitrator was interpreting the terms of a Collective Agreement. The Employer reminds the Court that this review is not an appeal and the applicable standard of review requires that Arbitrator’s analysis to be “understandable and transparent” and his conclusion “within the range of reasonable outcomes”. In the submission of the employer, the decision of the Arbitrator survives review under the requisite standard.
The Union Reply
[26] In reply, the Union acknowledges that the reviewing Court must first seek to supplement reasons before they subvert them. However, it submits, a reviewing court cannot ignore errors or irrelevant considerations that form the foundation of the Arbitrator’s decision to depart from the plain and ordinary meaning of the Agreement. It asserts that there is nothing in the case law to support that it is anomalous for an employee to accrue vacation credits while they are not actively at work.
[27] Finally, the Union argues that the Arbitrator asked himself the wrong question. The question was not whether “sick leave is considered pay for the accumulation of vacation leave credits” but rather whether an employee receiving “pay” while on sick leave received “pay” for the purpose of Article 13.02. Implicit is this argument is that the Arbitrator, in asking himself the wrong question, failed to appreciate or analyze the distinction between sick leave with pay and sick leave without pay.
[28] I will say more about the position of the parties under my analysis of the issues before me.
The Standard of Review
The Standard of Review
[29] The parties submit that the standard of review in this case is reasonableness. I agree.
[30] Our Court of Appeal dealt with the applicable standard of review in Communications, Energy and Paperworker’s Union, Local 1520 v. Maritime Paper Products Ltd., 2009 NSCA 60. In that case, the appeal court considered the appropriate standard of review of an arbitrator’s interpretation of a collective agreement. Fichaud J.A., reviewed the standard at para. 20:
In Dunsmuir v. New Brunswick, 2008 SCC 9 (CanLII), [2008] 1 S.C.R. 190, at paras 62,54, 57, Justices Basterache and Lebel said that, if existing jurisprudence has satisfactorily established the standard, the formal standard of review may be abridged. I refer to this court’s summary of the Dunsmuir principles in Casino Nova Scotia v. NSLRB, 2009 NSCA 4 (CanLII), 2009 NSCA 4, at paras 24-28. For the application of the standard of review principles to a labour arbitrator’s interpretation of a collective agreement, I refer to: Cape Breton (Regional Municipality) v. CUPE, Local 933, 2006 NSCA 80 (CanLII), 2006 NSCA 80 at paras 28-70; Nova Scotia Government and General Employee’s Union v. Capital District Health Authority, 2006 NSCA 44 (CanLII), 2006 NSCA 44 at paras 36-48; Nova Scotia Teacher’s Union at para 15; and the authorities cited in those decisions. Clearly, the reviewing court should apply reasonableness to an arbitrator’s interpretation of the collective agreement. (Emphasis added)
[31] Many decided cases have now established that reasonableness is the appropriate standard to apply to a labor Arbitrator’s interpretation of a collective agreement. Recently, this was confirmed by the Supreme Court of Canada in Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp and Paper, Ltd., 2013 SCC 34, at para. 7.
Applying the Standard of Review
[32] If the appropriate standard of review is reasonableness, then how is that standard to be applied?
[33] In Dunsmuir, supra, the Supreme Court of Canada explained that reasonableness is a deferential standard and one which recognizes that the questions before administrative tribunals may have the potential for a number of reasonable conclusions. Reviewing courts must respect the decision-making process of adjudicative bodies with regard to both facts and law as well as the reasons offered in support of a decision.
[34] In Casino Nova Scotia, supra, the Nova Scotia Court of Appeal elaborated on Dunsmuir’s reasonableness test;
[29] In applying reasonableness, the court examines the tribunal’s decision, first for process to identify a justifiable, intelligible and transparent reasoning path to the tribunal’s conclusion, then second and substantively to determine whether the tribunal’s conclusion lies within the range of acceptable outcomes.
[30] Several of the Casino’s submissions apparently assume that the “intelligibility” and “justification” attributed by Dunsmuir to the first step allow the reviewing court to analyze whether the tribunal’s decision is wrong. I disagree with that assumption. “Intelligibility” and “justification” are not correctness stowaways crouching in the reasonableness standard. Justification, transparency and intelligibility relate to the process (Dunsmuir, para. 47). They mean that the reviewing court can understand why the tribunal made its decision, and that the tribunal’s reasons afford the raw material for the reviewing court to perform its second function of assessing whether or not the Board’s conclusion inhabits the range of acceptable outcomes. Nova Scotia (Director of Assessment) v. Wolfson, 2008 NSCA 120 (CanLII), 2008 NSCA 120, para. 36.
[31] Under the second step, the court assesses the outcome acceptability, in respect of the facts and the law, through the lens of the deference to the tribunal’s “expertise or field sensitivity to the imperatives or nuances of the legislative regime”. This respects the legislators’ decision to leave certain choices within the tribunal’s ambit, constrained by the boundry of reasonableness. Dunsmuir, paras 47-49; Lake, para 41; PANS Pension Plan [Police Association of Nova Scotia Pension Plan v. Amherst (Town), 2008 NSCA 74, leave to appeal denied by the SCC Jan. 22, 2009], para. 63; Nova Scotia v. Wolfson, para. 34.
[35] More recently, Fichaud, J.A. in Egg Films Inc. v. Nova Scotia (Labour Board), 2014 NSCA 33 elaborated on the standard of reasonableness:
[26] Reasonableness is neither the mechanical acclamation of the tribunal’s conclusion nor a euphemism for the reviewing court to impose its own view. The court respects the Legislature’s choice of the decision maker by analysing that tribunal’s reasons to determine whether the result, factually and legally, occupies the range of reasonable outcomes. The question for the court isn’t – What does the judge think is correct or preferable? The question is – Was the tribunal’s conclusion reasonable? If there are several reasonably permissible outcomes the tribunal, not the court, chooses among them. If there is only one and the tribunal’s conclusion isn’t it, the decision is set aside.
[36] In the present case, the Respondent asserted that an Arbitrator’s interpretation of the terms of a Collective Agreement attracted a high level of deference. As to whether there exists a spectrum of deference, Fichaud J. A. confirmed in Egg Films Inc., supra:
[29] As to degrees of deference – since Dunsmuir there is only one deferential standard. In Canada (Citizenship and Immigration) v. Khosa, [2009] 1 S.C.R. 339, para 59, Justice Binnie for the majority said “[r]easonableness is a single standard that takes its color from the context.
[37] As to the application of the reasonableness standard, Justice Fichaud provided further direction:
[30]…Reasonableness isn’t the judge’s quest for truth with a margin of tolerable error around the judge’s ideal outcome. Instead, the judge follows the tribunal’s analytical path and decides whether the tribunal’s outcome is reasonable. Law Society v. Ryan, supra, at paras 50-51. That itinerary requires a “respectful attention to the tribunal’s reasons, as Justice Abella explained in the well-known passages from Newfoundland and Labrador Nurse’s Union, paras 11-17.
[31] In Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd, 2013 SCC 34, Justice Abella for the majority reiterated:
[54] The board’s decision should be approached as an organic whole, without a line by line treasure hunt for error (Newfoundland Nurses, at para 14). In the absence of finding that the decision, based on the record, is outside the range of reasonable outcomes, the decision should not be disturbed.
[32]…Nobody suggests that the reviewing judge should just ponder the internal circuitry of the tribunal’s reasons, and disregard the statutory environment….the reviewing judge tests the connection between the tribunal’s conclusion and the statute’s plain wording or ordinary meaning, context or scheme, and objectives channelled under the accepted principles of legislative interpretation. While doing this, however, the judge doesn’t drift into correctness review – i.e. the judge remains attentive to the range of reasonable interpretations, instead of focusing on the judge’s preference among them.
[38] Finally, Justice Fichaud then went on to provide authorities to further explain the application of the reasonableness standard.
Analysis
[39] It has been said in many cases that the reviewing judge must not set her own course in assessing reasonableness. Rather, the first task is to chart the decision maker’s reasoning. See Law Society of New Brunswick v. Ryan, 2003 SCC 20 (CanLII), at paras 47-55; Granite Environmental Inc. v. Nova Scotia (Labour Relations Board), 2005 NSCA 141 (CanLII) at paras 42-44; CBRM v. CUPE, supra, and more recently, Communications, Energy and Paperworker’s Union, Local 1520 v. Maritime Paper Products Ltd., supra at para. 24 and Halifax Regional Municipality v. Canadian Union of Public Employees, Local 108, supra, at para. 14.
[40] I now turn to the review of the Arbitrator’s reasons in the present case and the application of the reasonableness review.
(a) The Arbitrator’s Reasoning
[41] In the present case, the Arbitrator concluded that an employee could not earn vacation leave credits while on sick leave with pay. His decision began by identifying the issue before him with reference to the grievance filed by the employee. The Arbitrator then reviewed the evidence adduced during the hearing and the submissions of both parties. He referred to the jurisprudence offered by each party and the relief sought. He concluded with his analysis and decision. The Arbitrator’s analysis is brief, amounting to a total of 6 substantive paragraphs.
[42] In response to the brevity of the reasons offered by the Arbitrator, the Respondent urged this Court to give “expressional latitude” to the Arbitrator. The Respondent referred to the decision of Justice Estey in Douglas Aircraft Co. of Canada v. McConnell, [1980] 1 S.C.R. 245 at para. 292:
…Courts must, in examining awards of arbitrators, particularly in the field of labour relations, do so in the awareness of the role of the arbitrator. Usually, he is a technician of considerable expertise in a specialized field. His terminology will not always or perhaps ever be that of the traditional courts, nor should it be. Precision of conclusion and the contractual or statutory provisions will be closely scrutinized by the courts. Expressional latitude must, however, be accorded to the arbitrator as he applies the law of the contract or the statute to the facts as he finds them. The parties have selected him for specifically for this task. The state speaking through the statute requires that his decision be final and binding. The whole atmosphere of the industrial – commercial arena requires that such differences be quickly and fairly settled by this summary procedure, designed as it is to be economical of time and expense.
[43] There is, of course, much sense in this passage from the Supreme Court of Canada, even more than 2 decades later. The context of labour relations no doubt still requires decisions to be “economical of time and expense” and arbitrators will strive to provide decisions that meets the exigencies of the parties. Arbitrators do carry specialized knowledge and are clearly entitled to deference. However, I do not read this excerpt to suggest that arbitrators should be excused for less than adequate reasons, either in form, or substance. The adequacy of reasons will be determined by the application of the reasonableness standard.
[44] One must also remember that the foregoing passage cited by the Respondent comes from a decision released almost 2 decades before the decision of the Supreme Court of Canada in Dunsmuir v. New Brunswick, 2008 SCC 9. Following Dunsmuir and more recently, Newfoundland and Labrador Nurses Union v. Newfoundland and Labrador (Treasury Board), 2011 SCC 62 it is now well settled the standard of the reasons expected of the Arbitrator interpreting a Collective Agreement. As set out in Dunsmuir and oft quoted since:
[47]…A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to the outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.
[45] What remains is an assessment of the Arbitrator’s reasons in the present case under the requisite standard
(b) The Process
[46] Keeping in mind the overall organic nature of the required assessment, the first step is a review of the Arbitrator’s reasons to determine if there is sufficient justification, transparency and intelligibility. In other words, is it possible to determine why the Arbitrator concluded as he did. Although brief, I find that the Arbitrator did provide sufficient reasons to explain the basis of his conclusion.
[47] The Arbitrator, at para. 40, begins his reasons by framing the issue to be determined. In his view, the “fundamental question…is whether sick leave is considered “pay” for the accumulation of vacation credits”.
[48] To answer this question, the Arbitrator looked at the language of Article 13.02 and the comparable language of Article 15.01. He reasoned that if the employee could accumulate vacation leave credits under Article 13.02, a consistent interpretation of the word “pay” would also entitle the employee to accumulate sick leave credits while on sick leave. The Arbitrator found that it would be anomalous for the employee to accumulate sick leave credits while on sick leave. He found no “evidence” in the Collective Agreement that it was the intention of the parties for employees on sick leave to accumulate sick leave credits.
[49] In coming to his conclusion that collecting sick leave credits while on sick leave was an anomaly, the Arbitrator noted that the employee did not make a claim for sick leave credits. The Arbitrator found the failure to make such a claim in the circumstances “unusual”.
[50] The Arbitrator then turned his mind to the nature of sick leave benefits. He asked himself whether the Collective Agreement provided for the accumulation of benefits while on sick leave as opposed to an employee who is “actively in the work place”. His conclusion on this point was that “pay” was something “earned while actively working” and that sick leave “pay” was not the same as “regular pay” for this reason. Sick leave pay and vacation leave pay was not “pay” but rather a benefit provided to employees under the terms of the Collective Agreement. Accordingly, sick leave and vacation leave could only accumulate while earning pay by working. In his view, an interpretation that permitted an employee to accumulate benefits while not working would be “absurd”.
[51] In arriving at this conclusion, the Arbitrator reviewed the authorities and made 2 concluding points:
(a) That the prevalent arbitral jurisprudence established that sick leave benefits are not considered “pay” in the ordinary sense of the word, unless the Collective Agreement expressly provides; and
(b) That there was no evidence to support that it was the intention of the parties that an employee out on sick leave should be able to accumulate vacation and sick leave while out of the workplace on sick leave.
[52] In my view, the reasoning path of the Arbitrator on this issue is sufficiently transparent. His conclusion was based upon his interpretation of the word “pay” as it was found in Articles 13.02 and 15.01 and his resulting observation that the employee’s interpretation of the word results in the anomaly and absurdity. He further found such an interpretation contrary to the jurisprudence which, in his view, supported that sick leave was a benefit and not a form of pay. Pay is something that you earn while working. Benefits are also earned while working.
[53] The Arbitrator’s reasons also provide justification for his decision and those reasons have can be followed and understood. They are sufficiently intelligible. They provide a basis for the Arbitrator’s reasoning to be reviewed. Accordingly, I find that the decision survives the first stage of the reasonableness analysis.
[54] In terms of the brevity of the reasons, the present case presents similar issues to those raised by the Arbitrator’s decision in Newfoundland Nurses, supra. In that case, an Arbitrator was asked to interpret the terms of the parties’ Collective Agreement. On judicial review, the judge found the Arbitrator’s decision unreasonable on the basis that the reasons were inadequate to support the conclusion. The decision of the reviewing judge was overturned by the Newfoundland Court of Appeal who found the reasons “minimal” but sufficient to satisfy the requirement for justification, transparency and intelligibility in the decision-making process.
[55] The Supreme Court of Canada upheld the appeal decision finding that the arbitrator was alive to the issue before him and came to a result within a range of reasonable out comes. In so finding, Abella J. referred to Dunsmuir and a number of other authorities and directed:
[16]…if the reasons allow the reviewing court to understand why the tribunal made its decision and permit it to determine whether the conclusion is within the range of reasonable outcomes, then the Dunsmuir criteria are met.
[56] I am of the view that the reasons provided by the Arbitrator in the present case are sufficient to show why he concluded that the employee was not entitled to accumulate vacation leave credits while on sick leave with pay. The remaining inquiry is whether this interpretation falls within the range of reasonable outcomes.
(c) The Outcome
[57] For the reasons that follow, I conclude that the Arbitrator’s interpretation of the terms of the Collective Agreement is unreasonable. By way of introduction to my explanation, I find the following extract from Egg Films Incorporated, supra, instructive:
[33] In Canada (Canadian Human Rights Commission) v. Canada (Attorney General), [2011] 3 S.C.R. 471, Justices LeBel and Cromwell for the Court, analyzed the context and purpose of the pertinent legislation, then affirmed the quashing of a Human Rights Tribunal’s costs award because:
[64]…Faced with a difficult point of statutory interpretation and conflicting judicial authority, the Tribunal adopted a dictionary meaning of “expenses” and articulated what it considered to be a beneficial policy outcome rather than engage in an interpretive process taking into account of the text, context and purpose of the provisions in issue. In our respectful view, this led the tribunal to adopt an unreasonable interpretation of the provisions.
[58] Likewise, in the present case, I am of the view that the Arbitrator preferred a policy choice over an interpretive exercise which resulted in an unreasonable conclusion. There are a number of reasons that direct me to this conclusion.
[59] As a starting point, I am of the view that the Arbitrator asked himself the wrong question. In his decision at para. 40, the issue was framed as “whether or not sick leave is considered pay for the accumulation of vacation leave credits”. This led the Arbitrator quickly to a consideration of the nature of sick leave and away from an interpretation of the plain meaning of the words in the Collective Agreement.
[60] Before me, the Applicant argued that the proper question was whether an employee who receives sick leave with “pay” is entitled to accumulate vacation credits under Article 13.02. Article 13.02 provides that employees who receive “pay” for at least 10 days in a calendar month shall accumulate vacation credits. Put more succinctly, the issue is whether “pay” an employee receives while on sick leave with pay, is “pay” for the purpose of vacation leave credit. I agree with the Applicant that the framing of the question is significant.
[61] The reframing of the question mandates a fulsome interpretation of the Collective Agreement, at least as the first step in the analysis. By contrast, having asked himself the wrong question, the Arbitrator only explored the meaning of the word “pay” with reference to one other Article of the Collective Agreement, Article 15.01 which deals with the accumulation of sick leave credits. The Arbitrator considered the plain meaning of the word “pay” in the context of Article 15 and readily concluded that the Union’s interpretation would create an anomaly and something not intended by the parties. With respect to the Arbitrator, I am of the view that he came to this conclusion without any analysis of the meaning of the word “pay” and its context throughout the remainder of the Collective Agreement. This lead to a failure to fully consider the intention of the parties as reflected in their use of the word “pay” in Article 13.02.
[62] As I interpret the authorities, an absurd or anomalous interpretation may only be disregarded if there is more than one interpretation from which to choose. If there is only one reasonable interpretation and it produces an anomaly, the parties are taken to have agreed to it. In the present case, the Arbitrator dispensed with the Union interpretation because it produced an anomaly preferring instead to accept a more complex interpretation that, in his view, didn’t produce the anomaly. In my view, he worked his way backward from the desired result. The Arbitrator failed to establish, as a predicate, that there was more than 1 reasonable interpretation of the relevant provisions of the Collective Agreement.
[63] I hasten to add that the foregoing analysis assumes that the Union interpretation produces an anomaly. An anomaly is something which makes the agreement or bargain struck by the parties unworkable. One example in the jurisprudence is where a proposed interpretation would see senior employees paid less than junior employees. The fact that an interpretation seems counter-intuitive or unfair to one of the parties does not make it anomalous. The Arbitrator is charged with interpreting the bargain, not renegotiating it. In my reading of the jurisprudence, there is no support for the general proposition that accumulating sick benefits while on sick leave with pay is anomalous. Whether or not it actually is will be revealed by reference to the particular agreement.
[64] Nonetheless, in his reasoning path, the Arbitrator concluded that an employee accumulating sick leave credits while on sick leave (or not actively at work) was “anomalous”, and an “absurdity”. In support of this conclusion, he referred to 3 points.
[65] First, the Arbitrator noted that the employee had not made a claim for lost sick benefits and found this both “interesting” and “unusual” in the circumstances. A considerable portion of his analysis was devoted to this observation. In my view, the employee’s decision not to claim such benefits was an irrelevant consideration.
[66] Second, the Arbitrator noted that the authorities supported his interpretation that sick leave was a benefit only “earned” by an employee who was actively working. In coming to the conclusion that sick benefits were not “earned”, he made no attempt to reconcile that conclusion with the language of Article 15 which provides:
15.01 An employee shall earn sick leave credits at the rate of one and one-quarter (1¼) days for each calendar month for which the employee receives pay for at least ten (10) days. Employees not working in a full time capacity will earn sick leave credits on a pro-rated basis according to the number of hours worked. (emphasis added)
[67] Article 15.01 contains the words, “earn”, “pay” and the phrase “not working”. There is no indication that the Arbitrator considered the possible interpretations of “earn” or “pay” with reference to this Article or in keeping with the interpretive principle that all words are to be given meaning.
[68] Third, the Arbitrator claimed support for his interpretation in the case law. At para. 45 he states:
45. …The prevalent arbitral jurisprudence is that sick leave benefits are not considered “pay” in the ordinary sense of the word, unless the Collective Agreement expressly provides for such an interpretation.
[69] A review of the jurisprudence provided to the Arbitrator reveals that the authorities equivocate on this issue depending on the words used by the parties in the collective agreement. There is no case which has given meaning to the word “pay” in circumstances similar to the present case.
[70] If a universal principle can be extracted from the arbitral jurisprudence it would be that careful attention is required to the words of the agreement to determine the intention of the parties. In some instances, Arbitrators have disposed of the issue with reference to the plain meaning of the words and the standard principles of interpretation. In other cases, Arbitrators considered the jurisprudence but do not conclude the analysis without consideration as to whether the words of the agreement support another interpretation.
[71] In making the foregoing points, I am mindful of the direction of the Supreme Court of Canada that reviewing judges are not to engage in a treasure hunt for error. However, these points exemplify that the Arbitrator in this case, for various reasons, did not carry out the required interpretive analysis.
[72] This leads to main reason that that the Arbitrator’s conclusion is unreasonable. The Award discloses little analysis of the intention of the parties within the four corners of the Collective Agreement and fails to apply some of the basic principles applicable to the interpretation of Collective Agreements.
[73] The interpretive principles have been reviewed time and time again in the jurisprudence. A helpful summary is contained in the decision of the Newfoundland Court of Appeal in Newfoundland Nurses, supra:
[21]…First, the arbitrator’s responsibility is to ascertain the intention of the parties by construing the agreement, giving effect to what the parties have stated in writing. Where there is more than one possible interpretation of the written provisions, the arbitrator will be guided by the purpose of the provision, the reasonableness of competing interpretations, and whether an interpretation will result in an anomaly or contradiction. In general, the language of the agreement will be construed in its ordinary sense and so as to avoid conflict, inconsistency or absurdity when considered in the context of the whole agreement.
[74] And in Complex Services Inc. v. O.P.S.E.U. (Local 278), 2011 CLB 14070 at para.23:
The fundamental rule of collective agreement and statutory interpretation is the words used must be given their plain and ordinary meaning unless it is apparent from the structure of the provision or the collective agreement read as a whole that a different or special meaning is intended. All words must be given meaning, and different words are presumed to have different meanings unless the result would be absurd or inconsistent with the overall scheme and structure of the agreement. As a matter of general principle…collective agreements and statutes must be interpreted with a view to ensuring that the spirit and intent of the collective agreement and the legislation are given the intended effect.
[75] See also DHL Express (Canada) Ltd. V. CAW-Canada, Locals 4215, 144 & 4278 (2004) 124 L.A.C. (4th) 271 at paras 51-54 and Massey-Harris Co. v. U.A.W., Local 458 (1953), 4 L.A.C. 1579 (Ont. Arb. Bd.) (Gale) at para. 1580.
[76] In the present case, the Arbitrator was charged with determining the intention of the parties. Did the parties intend that an employee on sick leave with pay would accumulate vacation credits? Is the “pay” an employee receives while on sick leave with pay the same “pay” referred to in Article 13.02? Does the word “pay” in Articles 13.02 and 15.01 demand a special definition by virtue of the context or purpose of those provisions?
[77] The starting point for this analysis is the words of the Collective Agreement. The meaning of the word pay as intended by the parties is determinative but its meaning cannot be ascertained without reference to its use throughout the agreement, the use of other words throughout the agreement and a consideration of the overall purpose and context of the various places that the word “pay” appears in this Collective Agreement.
[78] Not surprisingly, the word “pay” is used frequently throughout the Collective Agreement. In some instances, the word pay is used on its own in various contexts and for a variety of purposes. There are also variations of the word pay used throughout (i.e. “paid”, “earnings”, “salary”, “allowance”, “monies”). In other instances, the word appears with adjectives or qualifiers (i.e. “rate of pay”, “with pay”, “without pay”, “regular pay”, “monthly pay”, “severance pay”, “holiday pay”, “acting pay”). The Arbitrator makes no inquiry into these words and phrases in their context to resolve the question before him.
[79] Article 14 of the Agreement provides for various types of leave which are available to an employee, with or without pay. Article 14.03(b) uses the phrase “regular pay” unlike Articles 13.02 and 15.01 which just refer to “pay”. The Arbitrator made no attempt to reconcile his finding that “sick leave pay is not regular pay” with the use of the phrase “regular pay” in Article 14 or the unqualified presence of the word “pay” in Articles 13.02 or 15.01.
[80] In addition, the Arbitrator’s analysis does not consider the impact of the difference between sick leave granted “with pay” and sick leave without pay. Nor is there consideration as to why Article 14.08(v) specifically provides for the accumulation of benefits during a period of maternity leave without pay. In this latter case, one could conclude that this specific expression of the parties’ intention was required because this Article deals with a period of leave without pay. Finally, there is no consideration to the meaning of the phrase “not working in a full time capacity” in the concluding portion of Article 13.02.
[81] It is my view that the failure to use the fundamental interpretive tools at his disposal lead this Arbitrator to an unreasonable result.
[82] Before concluding my analysis, I return to the Arbitrator’s reasons once more to highlight a final point. At para.40 of his reasons, the Arbitrator concludes:
40. … Accumulating additional sick leave credits while not in the workplace on sick leave is anomalous and I find no evidence form (sic) the Collective Agreement that this was the intention of the parties.
[83] And at para.45:
45. … I find no evidence that the intention of the parties was to provide for the accumulation of vacation leave ….
[84] My reading of the above-noted extracts suggests that the Arbitrator, having concluded that accumulating vacation leave credits while on sick leave was anomalous, directed himself to nonetheless look for some indication in the Agreement of a contrary intention. Having so directed himself, he concluded there was no evidence of a contrary intention. In my view, this approach ignores the plain meaning of the words used and runs afoul of established interpretation principles. In so finding, I return to Complex Services v. O.P.S.E.U., supra, at para.23:
The fundamental rule of collective agreement and statutory interpretation is the words used must be given their plain and ordinary meaning unless it is apparent from the structure of the provision of the collective agreement read as a whole that a different or special meaning is intended.
[85] In my view, the proper approach would be to determine the plain meaning of the word “pay” and then look to the broader agreement to determine if this meaning reflects the intention of the parties. In this case, the Arbitrator worked backwards, concluding that the plain meaning was anomalous without looking at the broader agreement. He then placed the burden on the employee to establish that the “anomalous” interpretation reflected the parties’ intention. I find this approach, and its outcome, unreasonable.
[86] Accordingly, I find it necessary to set aside the Arbitrator’s Award and order that the matter return to arbitration before a different Arbitrator to resolve the question between the parties.
Conclusion
[87] For the foregoing reasons, I find the Arbitrator’s Award in the present case unreasonable.
[88] The application of the Union is allowed and the Award is set aside. The matter is remitted back to Arbitration before a different Arbitrator.
[89] The parties shall endeavor to agree on costs, failing which written submissions shall be filed no later than 30 days from the release of this decision.
J.