Date: 20120130
Docket:
T-1344-11
Citation:
2012 FC 110
[UNREVISED
ENGLISH CERTIFIED TRANSLATION]
Ottawa, Ontario, January 30, 2012
PRESENT: The
Honourable Mr. Justice Martineau
BETWEEN:
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CANADIAN UNION OF
POSTAL WORKERS
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Applicant
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and
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CANADA POST
CORPORATION
AND
ATTORNEY GENERAL OF
CANADA
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Respondents
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AMENDED REASONS FOR JUDGMENT AND JUDGMENT
[1]
On
June 26, 2011, the Restoring Mail Delivery for Canadians Act, SC 2011 c
17 (special Act) was given Royal Assent. Under section 8 of the
special Act, on July 22, 2011, the Minister of Labour (Minister) appointed the
Honourable Coulter A. Osborne arbitrator for final offer selection in the interest
arbitration between the Canada Post Corporation (employer) and the Canadian
Union of Postal Workers (union).
[2]
The
union is now asking the Court to quash this decision on the grounds that the
Minister unreasonably exercised her discretionary power by ignoring two
essential qualifications required of the arbitrator, that is, that he or she be
bilingual and have a certain amount of recognized expertise in labour relations.
[3]
On
October 20, 2011, the Court ordered a stay of proceedings before the arbitrator
until a final determination could be made on the application for judicial
review (2011 FC 1207), which was appealed by the employer (A-414-11). The
merits of the application for judicial review were to be heard on January 24 and
25, 2012. However,
the arbitrator quite elegantly resigned on November 1, 2011, leaving
the Minister to appoint a new arbitrator.
[4]
Almost
three months have passed, and the Minister has not yet appointed a new
arbitrator. In fact, on January 24, 2012, the Court concurrently heard a motion
to dismiss filed by the Attorney General of Canada (respondent) and the
union’s application for judicial review.
[5]
The
employer chose not to take a position on the merits of the application for
judicial review whereas the respondent asked for its dismissal, maintaining,
first, that the application had become moot and, in terms of its merit, if the
Court exercises its discretionary power to hear and determine the issue, that
the Minister’s decision was not unreasonable. Incidentally, the employer
submitted to the Federal Court of Appeal that [translation]
“a live controversy still exists between the parties” (employer’s written
submissions dated December 16, 2011, docket A‑414-11).
Respondent’s
application for dismissal
[6]
The
legal principles underlying the application of the mootness doctrine are set
out in Borowski v Canada (Attorney General), [1989] 1 S.C.R. 342. They
involve a two-step test that calls for the Court to exercise its discretion.
[7]
The
Court first determines whether an actual dispute still exists between the
parties or whether the tangible and concrete dispute between the parties has in
fact disappeared.
[8]
In
the latter case, the Court will examine the appropriateness of determining the
issue on the merits, taking into account the existence of an adversarial
context, concern for judicial economy and the law-making function of the Court.
The Court may also attribute more or less weight to each factor and may also
take into account any other relevant factors depending on the particular
circumstances of the case.
[9]
There
are three parties in this matter: the union, the employer and the respondent.
All have distinct interests, whether as bargaining agent, company or government.
[10]
The
union submits that quashing the Minister’s decision, despite the arbitrator’s
resignation, would be useful and constitutes an appropriate remedy under the
circumstances. The union also maintains that it has already suffered greatly by
having the proceedings conducted under a unilingual arbitrator and that the
only remedy for this is to quash the Minister’s decision and start everything
afresh before a new arbitrator.
[11]
We
are talking about having a third party that is not proposed by the employer and
the union imposing a collective agreement that will govern the parties until
January 31, 2015, through a final offer arbitration process. I am in agreement with
the respondent that the arbitrator’s resignation does, to a certain degree,
render moot the preceding ministerial appointment. However, there continues to
exist between the parties a dispute on the legality and judicial effects of
decisions rendered by the arbitrator. In any case, whether or not a tangible
dispute still exists, in looking at the second part of this test, this is an
issue of national significance for which the Court must exercise its discretion
to hear the case, taking into account the adversarial context involved, concern
for judicial economy and the overall role played by the Court.
[12]
As
of the date of this ruling, since the Minister has opted not to appoint a new
arbitrator, a mystery still exists regarding the scope of ministerial discretion
and the overall qualifications of the person to be appointed as final offer
arbitrator. In fact, at the hearing held on January 24, 2012, the
respondent’s counsel was unable to confirm to the Court whether the future
arbitrator would or would not have labour relations experience or be bilingual.
Given this uncertainty, a gamble cannot be taken. It will therefore be
necessary to start the judicial process anew in the very short term in order to
make a final determination on ministerial discretion if the Minister should ignore
any proposals of qualified, bilingual arbitrators who might be confidentially
suggested by the employer or the union, and choose someone who may not have any
recognized labour relations expertise or be bilingual.
[13]
However,
the Court has already done its utmost to hear the application for judicial
review and has made considerable efforts to determine the issue on its merits
within a short three‑month period. From the outset, the employer has
taken the position that the issue of the legality of the arbitrator’s
appointment is within the ambit of the respondent, given that the latter had previously
expressed the desire to no longer be named in the proceedings as a respondent,
while, at the same time, being strongly opposed to the stay of the arbitration
proceedings. This strongly favours having the issue of ministerial discretion
and the arbitrator’s qualifications determined earlier rather than later so as
to avoid another motion for a stay of proceedings before another arbitrator.
[14]
In
the interests of justice and given the fact that the Court is now able to
determine issues relating to the constitutionality and legality of ministerial
decisions, there is reason to dispose of the matter on its merits since the
Court has had the benefit of reading the union’s and the respondent’s written
submissions and of hearing their counsel for an entire day. Moreover, counsel
for the employer attended the hearing on January 24, 2012.
[15]
Consequently,
the respondent’s motion for dismissal is dismissed, with costs.
Legality of the
privative clause
[16]
First,
with respect to the Court’s power to examine the legality of the arbitrator’s
appointment and of any of the arbitrator’s actions or decisions, section 12 of
the special Act has all of the characteristics of a classic privative clause.
However, the respondent submits that the privative clause must be interpreted
narrowly in order to respect the rule of law, which protects the courts’
constitutional role of reviewing the legality of actions taken by governments
and administrative tribunals.
[17]
I agree with the respondent’s approach.
[18]
Consequently,
there is no reason to issue an order striking down section 12 of the special Act
or to declare the section constitutionally inapplicable, as urged by the union.
Standard of
review
[19]
The
Minister does not have decision-making power as such since she does not
determine the parties’ rights under the collective agreement. In fact, the duty
to choose the final offer of either the employer or the union rests exclusively
with the arbitrator appointed by the Minister under section 8 of the special Act.
[20]
However,
it is the Minister who appoints the final offer arbitrator, and, in this
regard, it can be said that the decision has a concrete impact on the
arbitration process. The selection of a “qualified” arbitrator is not a trivial
or gratuitous exercise. Otherwise, the Minister would choose the first person
who comes along or would merely choose among the names of qualified arbitrators
submitted by the employer or the union.
[21]
It
should be said in passing that the Minister often has to appoint arbitrators
under the provisions of the Canada Labour Code, RSC 1985, c L-2, when
the parties to a collective agreement do not agree on an arbitrator. In such a case,
the Minister chooses someone whose name appears on a list of arbitrators drawn
up by the Labour Program. In the case at hand, the Minister did not choose from
among the names proposed by the parties or from among the names of arbitrators
listed in the collective agreement or on the Labour Program’s list.
[22]
Given
the nature of the decision involved, the Minister’s institutional expertise and
the existence of a privative clause, the Court agrees with counsel for the union
and the respondent that the appropriate standard for this decision is
reasonableness (Dunsmuir v New Brunswick, 2008 SCC 9).
Scope of ministerial
discretion
[23]
It
goes without saying that the arbitrator appointed under section 8 of the special
Act must be independent and impartial. The arbitrator must also be “qualified”
according to the Minister. In this case, the respondent would like the exercise
of ministerial power, which it considers discretionary, to not be subject to
any constraints, limits or criteria regarding the arbitrator’s qualifications
or competence. In other words, the Minister would merely have to act in good
faith and deem the person “qualified” for the Court’s judicial review exercise
to end there.
[24]
The
Court disagrees with the respondent. This is not what is indicated by common
sense, case law, the scheme of the special Act or the specific labour relations
context that govern the parties to the collective agreement. However
discretionary a ministerial appointment may be, there is no such thing as
absolute discretion (Baker v Canada (Minister of Citizenship and
Immigration), [1999] 2 S.C.R. 817).
[25]
In
exercising her power to appoint an arbitrator of her own choosing, the Minister
must not give way to gross unfairness or unduly penalize the employer or the
union, or create such uneasiness or uncertainty as to call the credibility of
the final arbitration process into question.
[26]
However,
this is in fact what could happen if the Minister were to ignore all of the
candidates proposed by the parties to the collective agreement, thus prima
facie acceptable, and appoint someone whose language qualifications or
recognized labour relations expertise are highly disputed by either party to
the collective agreement, i.e., the union, in this instance.
[27]
In
such a case, the Court must be able to examine the reasonableness of the
Minister’s decision, which implies a review of the grounds, if any, in light of
all of the evidence on record and of the parties’ submissions.
[28]
In
the case at hand, the lack of transparency inherent in the appointment process
followed by the Minister, the limited evidence or supporting grounds provided
by the Minister and the laconic nature of her communications raise serious
questions and indicate that the Minister appears to have failed to analyze, as
relevant criteria, the person’s previous labour relations experience and the
bilingualism requirement stemming from the specific context under which the
final offer arbitrator would have to make his or her final decision.
[29]
The
Court finds that the decision dated July 22, 2011, is unreasonable and must be
quashed.
Experience in labour
relations
[30]
The
respondent suggests that the special Act does not require the appointed
arbitrator to necessarily be familiar with the postal sector or have recognized
experience in labour relations. However, to argue that the law allows the
Minister to choose, as she pleases, an individual who has no recognized
expertise in labour relations is to suggest that, ultimately, the eventual
decision of the final offer arbitrator should not warrant any deference. The
final offer arbitrator is either a specialist or a generalist. In this case,
the Court believes that the arbitrator must be a specialist with relevant
experience in labour relations.
[31]
The
respondent argues that, because the special Act does not explicitly empower the
final offer arbitrator to interpret or apply work-related legislation, it must
therefore be assumed that the arbitrator does not need relevant expertise in
labour relations or to be familiar with working conditions or the postal
sector. I disagree. As far as the Court is concerned, the scheme of the special Act
and, more particularly, the privative clause, calls upon higher Courts to not
substitute their opinion for that of the arbitrator concerning the final offer
that is to constitute the next collective agreement.
[32]
By
its very nature, the current interest arbitration requires the final offer
arbitrator be able to exercise exceptional and specialized expertise, since she
or he will have to write a decision that will serve as the next collective
agreement (subsection 11(4) of the special Act). The postal workers’ collective
agreement contains a complex set of various provisions that govern the full
range of working conditions of the workforce, which is composed of some 50,000
postal workers. Both parties to the collective agreement must provide the
arbitrator with a list of unresolved issues, among other things.
[33]
In
making the selection of a final offer, “the arbitrator is to be guided by the
need for terms and conditions of employment that are consistent with those in
comparable postal industries and that will provide the necessary degree of
flexibility to ensure the short- and long-term economic viability and
competitiveness of the Canada Post Corporation, maintain the health and safety
of its workers and ensure the sustainability of its pension plan” (subsection
11(2) of the special Act).
[34]
Such
a legislative framework suggests that, from the start, the decision-maker will have
some expertise pertaining to issues mentioned in sections 10 and 11 of the special
Act before accepting a mandate from the Minister. Moreover, the answers the
Minister gave before the Senate during the discussions on the special bill seem
to suggest that the selected individual would have some recognized labour
relations experience that is relevant to the numerous narrow issues the
arbitrator would have to decide before choosing a final offer.
[35]
In
the workplace, the collective agreement is the highest law, the constitution
binding the employer, bargaining agent and employees of the bargaining unit.
According to the traditional model, a collective agreement, freely negotiated
and agreed to, must ensure security for all parties, ensure that industrial
peace is maintained and that the company will be able to complete its projects
while respecting the legitimate aspirations of the workers. Of course, a
collective agreement is never perfect and is not a panacea. A product of
numerous compromises, the collective agreement is revised and amended by the
parties during each collective bargaining process. Reciprocal concessions that
each party makes, in secret, behind closed doors, are all part of the
intricacies of collective bargaining.
[36]
Over
time, and after many years, grievance arbitrators who in turn interpret a collective
agreement can gain a privileged outlook on the customs and practices of the
parties. Nevertheless, in spite of the expertise they acquire over the years,
grievance arbitrators must earn their appointment as interest arbitrators.
Claiming the rights of any legislator, the parties to the collective agreement
do not really appreciate sorcerer’s apprentices. To be able to decipher the
codes and use the keys to labour relations that are specific to the parties and
the company, a whole universe must be known and discovered. This can require
years of experience. This is why both parties to a collective agreement are
generally very reluctant to have a third party intervene and establish the
content of the agreement. When this happens, the parties usually expect a
seasoned third party who possesses recognized experience in the field of labour
relations, and preferably someone who has some knowledge of the company and the
challenges of the industry in which the company operates.
[37]
In
CUPE v Ontario (Minister of Labour), 2003 SCC 29 (CUPE), Justice Binnie,
writing for the majority of the Supreme Court of Canada, wrote about the binding
arbitration process used in the hospital sector in Ontario under the Hospital
Labour Disputes Arbitration Act (HLDAA):
108 Compulsory arbitration is a fairly
well-understood beast in the jungle of labour relations. Dickson C.J.,
dissenting on other grounds in Reference re Public Service Employee
Relations Act (Alta.), [1987] 1 S.C.R. 313, pointed out, at p. 380:
The purpose of such a mechanism [compulsory
arbitration] is to ensure that the loss in bargaining power through legislative
prohibition of strikes is balanced by access to a system which is capable of
resolving in a fair, effective and expeditious manner disputes which arise
between employees and employers.
109 Labour arbitration as a dispute-resolution
mechanism has traditionally and functionally rested on a consensual basis, with
the arbitrator chosen by the parties or being acceptable to both parties. The
intervener, National Academy of Arbitrators (Canadian Region), contended that
“[a]rbitration which is, or is seen to be, political rather than rigorously
quasi-judicial is no longer arbitration”. Moreover, the intervener contends:
If arbitrators are, or are perceived to be, a surrogate
of either party or of government, or appointed to serve the interests of either
party or of government, the system loses the trust and confidence of the
parties, elements essential to industrial relations peace and stability. . . .
A lack of confidence in arbitration would invite labour unrest and the
disruption of services, the very problem impartial interest arbitration was
designed to prevent.
.
. .
111
I conclude, therefore, that, although the s. 6(5) power is expressed in broad
terms, the legislature intended the Minister, in making his selection, to have
regard to relevant labour relations expertise as well as independence,
impartiality and general acceptability within the labour relations community.
By “general acceptability”, I do not mean that a particular candidate must be
acceptable to all parties all the time, or to the parties to a particular
HLDAA dispute. I mean only that the candidate has a track record in labour
relations and is generally seen in the labour relations community as widely
acceptable to both unions and management by reason of his or her independence,
neutrality and proven expertise.
112 I do not consider these criteria to be vague or
uncertain. The practice of labour relations in this country has developed into
a highly sophisticated business. The livelihood of a significant group of
professional labour arbitrators depends on their recognized ability to fulfill
these criteria. Some of them not only enjoy national reputations for their
skills in resolving industrial conflicts but are retired judges. From the
Minister’s perspective, there exists not only a large pool of recognized
candidates, but the HLDAA allows generous latitude to his selection
(i.e., a candidate “who is, in the opinion of the Minister, qualified”). The
result is a perfectly manageable framework within which the legislature
intended to give the Minister broad but not unlimited scope within which to
make appointments in furtherance of the HLDAA’s object and purposes.
[38]
The
general principles outlined above by the Supreme Court of Canada apply with
equal force in the case of a final offer arbitration process under the special Act.
Let us recall that, in CUPE, the appointment of retired judges as chairpersons
of interest arbitration boards was problematic even though two arbitrators
respectively designated by the union and the employer already sat on those
arbitration boards. Consequently, they did have some institutional expertise. What
is more, in this case, the assignment the final offer arbitrator will have to
carry out on his or her own will be even more perilous and risky. Indeed, the
arbitrator will not be called to arbitrate a dispute, but to choose a final
offer—consisting of a global package—based on a set of technical, possibly
differing elements stemming from section 10 or listed in section 11 of the special
Act.
[39]
It
should be pointed out that, in the context of the traditional interest
arbitration process, compromise possibilities are not eliminated and the
concept of equity is not completely excluded. However, final offer arbitration
leads to one-sided law-making. As a result of the special Act, we are
dealing with a judicialized labour dispute where the operation of the usual balance
of power no longer guides the final offers that will be presented by both
parties. It is the prevailing party, as designated by the final offer
arbitrator, that will dictate to the unsuccessful party, for the next three
years (and perhaps retroactively) the working conditions of postal workers and
the limitations, if any, to the employer’s management rights (subsection 11(4)
and section 14 of the special Act). Therefore, the weight of responsibility is
enormous. This is a high-wire act, probably more political than legal, because this
case is concerned with legitimacy, and not legality.
[40]
In
the end, in the arbitrator’s decision, which will immediately become binding,
the final offer arbitrator will have to convince the unsuccessful party that
the final offer presented by the prevailing party is ultimately more reasonable
given the constraints and the criteria dictated to him or her by Parliament, in
this case, section 11 of the special Act, political determinism oblige. Thus,
it will be easy to turn the final offer arbitrator into a scapegoat. The
rhetoric of labour relations will invariably link the prevailing party to its
messenger. This can only be detrimental to the company, the workers and the
government itself. In this case, if the arbitrator’s appointment is deemed
problematic for or unacceptable to the unsuccessful party right from the outset,
this will completely undermine confidence in this extraordinary process for
determining working conditions. Caution is required to avoid the deterioration
of the labour relations environment for years to come.
[41]
In
that regard, the evidence provided by the union and the labour relations history
between both parties to the collective agreement confirm that the grievance or
interest arbitrators previously designated by the parties or appointed by the
Minister or her predecessors all had a certain relevant relative expertise in matters
of labour relations. Their acceptability in the field of labour relations was
not disputed. The same can be said of their language skills in instances when
the hearing of a case required the testimony of witnesses and oral submissions
in both official languages, which brings us to the last point raised by the
union.
Bilingualism at
the Canada Post Corporation
[42]
The
evidence on record does not support the respondent’s allegation that the union
has waived any quasi-constitutional right arising out of the Official
Languages Act, RSC, 1985, c 31 (4th Supp) (OLA), but I do not need to opine
on whether or not the final offer arbitrator constitutes a “federal court”
within the meaning of the OLA.
[43]
Indeed,
even if I assume, for the purposes herein, that OLA provisions do not apply to
final offer arbitrators, the Minister’s decision to not appoint a bilingual
individual is still unreasonable in this case.
[44]
We
must bear in mind that the employer is a crown corporation subject to the obligations
imposed by the OLA and that the working languages of its employees are English
and French, which have equal status under the OLA. Moreover, the postal
workers’ collective agreement states that both the English and French versions
shall be regarded as official.
[45]
Since
the special Act calls directly for a careful review by the final offer
arbitrator of the official provisions of the collective agreement currently in
effect in light of the final offers that could potentially significantly amend
the current texts, it is inconceivable in this case that the Minister would
appoint someone who is not bilingual.
[46]
I
think that the final offer arbitrator must be capable of reading the collective
agreement and the final offers in both official languages. Finally, forcing one
of the parties to the collective agreement, its representatives and its
witnesses to proceed with or testify at the hearing in the other official
language against their will is not only unfair and prejudicial, but in the end,
could give the Court reason to quash the final decision rendered by the final
offer arbitrator appointed by the Minister.
Conclusion
[47]
In
conclusion, this is not a matter of imposing a particular individual on the
Minister. However, the decision rendered by the Minister on July 22, 2011, is
unreasonable and must be quashed by the Court. This seems to be the only
possible remedy given the problems already raised by the parties, who do not
agree on the effects of Judge Osborne’s resignation.
[48]
As
of the date of this ruling, the parties have not advised the Court of the
appointment of a new final offer arbitrator whose selection by the Minister
would be mutually acceptable to the parties to the collective agreement.
[49]
Consequently,
the Minister is requested to take these grounds into consideration and ensure
that the person selected have a certain degree of recognized labour relations experience
and be bilingual before appointing the new final offer arbitrator.
[50]
Giving
these findings, the union is entitled to costs throughout against the
respondent. Since the employer has not taken a position on the merits of the
application for judicial review, but has only challenged the motion for an
injunction and a stay of proceedings, the costs against the employer shall be
limited to that motion.
JUDGMENT
THE
COURT ORDERS AND ADJUDGES:
1.
The
respondent’s motion for dismissal is dismissed and the union’s application for
judicial review is allowed in part;
2.
The
application to declare inoperable or strike down section 12 of the special Act
is dismissed;
3.
The
Minister’s decision dated July 22, 2011, to appoint the Honourable Coulter A. Osborne
is quashed;
4.
Before
appointing a new final offer arbitrator, the Minister shall take into account
the grounds of the Court’s decision and ensure that the person selected has,
namely, some degree of recognized labour relations experience and is bilingual;
5.
The
union is entitled to all costs against the Attorney General of Canada. The
union is entitled to costs against the employer in respect of the motion for an
injunction and a stay of proceedings only.
“Luc
Martineau”
Certified
true translation
Janine
Anderson, Translator
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