SUPREME
COURT OF CANADA
Citation:
Nor-Man Regional Health Authority Inc. v. Manitoba Association of
Health Care Professionals, 2011 SCC 59, [2011] 3 S.C.R. 616
|
Date:
20111202
Docket:
33795
|
Between:
Nor-Man
Regional Health Authority Inc.
Appellant
and
Manitoba
Association of Health Care Professionals
Respondent
-
and -
Attorney
General of British Columbia
Intervener
Coram: McLachlin C.J. and LeBel, Deschamps, Fish, Abella, Rothstein
and Cromwell JJ.
Reasons for
Judgment:
(paras. 1 to 62)
|
Fish J. (McLachlin C.J. and LeBel, Deschamps, Abella,
Rothstein and Cromwell JJ. concurring)
|
Nor‑Man Regional Health Authority Inc. v. Manitoba
Association of Health Care Professionals,
2011 SCC 59, [2011] 3 S.C.R. 616
Nor‑Man
Regional Health Authority Inc. Appellant
v.
Manitoba
Association of Health Care Professionals Respondent
and
Attorney
General of British Columbia Intervener
Indexed as: Nor‑Man Regional Health Authority Inc. v.
Manitoba Association of Health Care Professionals
2011 SCC 59
File No.: 33795.
2011: October 20; 2011: December 2.
Present: McLachlin C.J. and LeBel, Deschamps, Fish, Abella,
Rothstein and Cromwell JJ.
on appeal from the court of appeal for manitoba
Labour
relations — Grievances — Arbitral award — Standard of review — Arbitrator
imposing estoppel on union’s claim for redress under collective agreement —
Whether arbitral award applying common law or equitable remedy is reviewable on
standard of reasonableness or correctness.
P
contended that she was entitled, upon 20 years of employment, to a bonus week
of vacation pursuant to the terms of the collective agreement between Nor‑Man
and P’s Union. Her request was denied by Nor‑Man. The arbitrator decided
that the employer’s practice of excluding casual service in calculating
vacation benefits breached the terms of the collective agreement. However, the
Union was barred by its long‑standing acquiescence from grieving the
employer’s application of the disputed provisions of the collective agreement.
The arbitrator held that the Union was estopped from asserting its strict
rights under the disputed provisions of the collective agreement until the
expiry of the agreement. The Union’s application for judicial review was
dismissed on the basis that the arbitrator’s award was reasonable. The Court
of Appeal held that correctness was the governing standard of review and it set
aside the estoppel imposed by the arbitrator.
Held:
The appeal should be allowed.
Broadly
stated, the issue is whether arbitral awards that apply common law or equitable
remedies are for that reason subject to judicial review for correctness. It is
well established that, as a general rule, reasonableness is the standard of
review governing arbitral awards under a collective agreement. The equitable
remedy of estoppel imposed here by the arbitrator does not involve a question
of central importance to the legal system as a whole that was beyond the
expertise of the arbitrator. It therefore cannot be said to fall within that
established category of question ― nor any other ― subject to
review for correctness. Furthermore, a contextual analysis confirms that
reasonableness, not correctness, is the appropriate standard of review.
Deference is appropriate in this case.
Rigidity
in the dispute resolution process risks not only the disintegration of the
relationship, but also industrial discord. Labour arbitrators require the
flexibility to craft appropriate remedial doctrines when the need arises.
Labour arbitrators are not legally bound to apply equitable and common law
principles ― including estoppel ― in the same manner as courts of
law. Labour arbitrators may properly develop doctrines and fashion remedies
appropriate in their field, drawing inspiration from general legal principles,
the objectives and purposes of the statutory scheme, the principles of labour
relations, the nature of the collective bargaining process, and the factual
matrix of the grievances of which they are seized. The broad mandate of
arbitrators flows from the broad grant of authority vested in arbitrators by
collective agreements, statutes such as The Labour Relations Act (“LRA”),
and from their distinctive role in fostering peace in industrial relations.
They are well equipped by their expertise to adapt the legal and equitable
doctrines they find relevant within the sphere of arbitral creativity. The
domain reserved to arbitral discretion is by no means boundless. An arbitral
award that flexes a common law or equitable principle in a manner that does not
reasonably respond to the distinctive nature of labour relations necessarily
remains subject to judicial review for its reasonableness.
Here,
the labour arbitrator’s award can hardly be considered unreasonable. His
reasons are not just transparent and intelligible, but coherent as well. The
arbitrator adapted and applied the equitable doctrine of estoppel in a manner
reasonably consistent with the objectives and purposes of the LRA, the principles
of labour relations, the nature of the collective bargaining process, and the
factual matrix of P’s grievance. The arbitrator’s reasons are amply sufficient
to explain why he imposed the remedy of estoppel in this case.
Cases Cited
Applied:
Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190; Smith v.
Alliance Pipeline Ltd., 2011 SCC 7, [2011] 1 S.C.R. 160; referred
to: Agassiz School Division No. 13 (Re), [1997]
M.G.A.D. No. 61 (QL); Manitoba (Department of Family Services and
Housing) and C.U.P.E., Loc. 2153 (Murdock) (Re) (2005), 142 L.A.C. (4th)
173; Ryan v. Moore, 2005 SCC 38, [2005] 2 S.C.R. 53; Toronto (City)
v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77; Toronto (City)
Board of Education v. O.S.S.T.F., District 15, [1997] 1 S.C.R. 487; Parry
Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324,
2003 SCC 42, [2003] 2 S.C.R. 157; Re Corporation of the City of Penticton
and Canadian Union of Public Employees, Local 608 (1978), 18 L.A.C. (2d)
307; Montréal (City) v. Montreal Port Authority, 2010 SCC 14, [2010] 1
S.C.R. 427; Maracle v. Travellers Indemnity Co. of Canada, [1991] 2
S.C.R. 50.
Statutes and Regulations Cited
Labour Relations Act, R.S.M. 1987,
c. L10, ss. 121, 128(2).
APPEAL
from a judgment of the Manitoba Court of Appeal (Monnin, Steel and Freedman JJ.A.), 2010 MBCA 55, 255 Man. R. (2d) 93, 486 W.A.C. 93, 319 D.L.R.
(4th) 193, 194 L.A.C. (4th) 193, 5 Admin. L.R. (5th) 291, 85 C.C.E.L. (3d) 163,
[2010] 7 W.W.R. 1, 2010 CLLC ¶220‑034, [2010] M.J. No. 166 (QL),
2010 CarswellMan 217, reversing a decision of Bryk J., 2009 MBQB 213, 243 Man. R.
(2d) 281, 98 Admin. L.R. (4th) 266, 2009 CLLC ¶220‑048, [2009] M.J.
No. 289 (QL), 2009 CarswellMan 386. Appeal allowed.
Bryan P. Schwartz, William S. Gardner and Todd C. Andres, for
the appellant.
Jacob Giesbrecht,
for the respondent.
Jonathan Eades and Meghan
Butler, for the intervener.
The
judgment of the Court was delivered by
Fish J. —
I
[1]
An experienced labour arbitrator endorsed in
this case the union’s interpretation of vacation benefit clauses in its
collective agreement with the employer ― but imposed an estoppel on the
union’s claim for redress.
[2]
Essentially, the arbitrator held that the union
was barred by its long- standing acquiescence from grieving the employer’s
application of the disputed provisions. Given the employer’s consistent and
open practice of calculating vacation entitlements as it did, and the
employer’s detrimental reliance on the union’s acquiescence, it would be
unfair, the arbitrator found, for the union to now hold the employer to the
strict terms of the collective agreement in that regard.
[3]
The union’s application for judicial review was
dismissed in the Manitoba Court of Queen’s Bench on the ground that the
arbitrator’s award was reasonable (2009 MBQB 213, 243 Man. R. (2d) 281). The
Manitoba Court of Appeal held that correctness ― not
reasonableness ― was the governing standard of review (2010 MBCA 55, 255
Man. R. (2d) 93). Applying that standard here, the Court of Appeal set aside
the estoppel imposed by the arbitrator.
[4]
In my respectful view, the Court of Appeal erred
in reviewing the arbitrator’s decision for correctness: reasonableness is the
applicable standard.
[5]
Labour arbitrators are not legally bound to
apply equitable and common law principles ― including estoppel ― in
the same manner as courts of law. Theirs is a different mission, informed by
the particular context of labour relations.
[6]
To assist them in the pursuit of that mission,
arbitrators are given a broad mandate in adapting the legal principles they
find relevant to the grievances of which they are seized. They must, of
course, exercise that mandate reasonably, in a manner that is consistent with
the objectives and purposes of the statutory scheme, the principles of labour
relations, the nature of the collective bargaining process, and the factual
matrix of the grievance.
[7]
The arbitrator’s decision in this case falls
well within those bounds. I would allow the appeal and restore his award.
II
[8]
At the time of her grievance in July 2008,
Jacqueline Plaisier had been employed continuously for 20 years ― though
at times only on a casual basis ― by Nor-Man Regional Health Authority
Inc. (“Nor-Man”).
[9]
Ms. Plaisier contended that she was entitled
upon 20 years of employment to a “bonus” week of vacation pursuant to arts.
1104 and 1105 of the collective agreement between Nor-Man and Ms. Plaisier’s union,
the Manitoba Association of Health Care Professionals (the “Union”). Nor-Man
denied her request on the ground that, in its view, Ms. Plaisier’s time as a
casual employee did not count for the purposes of art. 1105.
[10]
Articles 1104 and 1105 of the collective
agreement provided during the relevant period as follows:
1104 Employees
shall be entitled to paid vacation, calculated on the basis of vacation earned
at the following rates:
Length
of Employment
In
the first (1st) to third (3rd) year inclusive
In
the fourth (4th) to [tenth] (10th) year inclusive
In
the eleventh (11th) to twentieth (20th) year inclusive
In
the twenty-first (21st) and subsequent years
|
Rate
at which vacation earned
Twenty
(20) working days per year*
Twenty-five
(25) working days per year
Thirty
(30) working days per year
Thirty-five [(35)] working days per
year
|
*for
employees hired prior to August 31, 1989, the rate shall be “twenty-one” (21)
days instead of “twenty” (20).
. . .
1105 An additional week of paid vacation
shall be granted to an employee in the year of her twentieth (20th) anniversary
of employment, and at five (5) year intervals thereafter. Such additional
vacation shall be taken in the vacation year during which the anniversary will
occur. This provision shall apply to all employees employed on August 31,
1989. It ceases to apply to employees hired after August 31, 1989.
[11]
In denying her request, Nor-Man advised Ms.
Plaisier that her “anniversary of employment” under art. 1105 was, at the
earliest, May 30, 1999 ― the date she began to accrue seniority. Under
the collective agreement, her casual employment did not count toward
seniority. It therefore had no bearing, according to Nor-Man, on Ms.
Plaisier’s eligibility for a bonus week of vacation.
[12]
Since 1988, Nor-Man had consistently applied
arts. 1104 and 1105 according to the “seniority date” of its employees. And the
Union had never challenged this practice until Ms. Plaisier’s grievance ―
some twenty years and at least five collective agreements later.
III
[13]
Ms. Plaisier’s grievance went to arbitration
under The Labour Relations Act, R.S.M. 1987, c. L10 (“LRA”),
before a sole arbitrator, R. A. Simpson. Two main issues were dealt with at
the grievance arbitration: (1) What is the correct interpretation of arts.
1104 and 1105 of the collective agreement? and (2) Is the Union estopped from
asserting its rights accordingly? ([2008] M.G.A.D. No. 30 (QL)).
[14]
On the first issue, the arbitrator endorsed the
Union’s interpretation of arts. 1104 and 1105. He explained his conclusion
this way:
Length
of employment is not necessarily synonymous with seniority, but is the period
of time during which the employee has been continuously employed by the employer.
. . . There are employment settings where each casual engagement may reflect a
new employment relationship. There are employment settings where a change in
status to or from casual and permanent will cause a break in the employment
relationship. Here, no such break occurs. . . . Although there have been
many changes in [Ms. Plaisier’s] status throughout her career, she has been
employed by the Employer since July 12, 1988. That would be her employment
date for determining length of employment and anniversary of employment under
Articles 1104 and 1105 of the Collective Agreement. [para. 89]
[15]
After concluding that the Union’s interpretation
of arts. 1104 and 1105 was correct, the arbitrator declined to enforce them
accordingly.
[16]
On this branch of the grievance, the arbitrator
reasoned as follows:
Having
regard to the Statement of Agreed Facts, the accompanying exhibits, and the
viva voce testimony, the Employer’s practice has been long standing,
consistent, and open. All employees were made aware of the practice through
the annual Employees Confirmation of Vacation Sheets, and all employees and the
Union were made aware of the practice through the annual Seniority Reports,
both provided and posted. Questions pertaining to the practice have been asked
and answered. If the Union was not aware, it certainly ought to have been
aware of the Employer’s application of Articles 1104 and 1105. It would be
unfair to permit the Union to enforce its interpretation of Articles 1104 and
1105. The Employer was entitled to assume that the Union had accepted its
practice, and to rely on that acceptance in not seeking to negotiate a change
or to exercise a right to effect a service break with a change in employment
status. [para. 96]
[17]
The arbitrator cited with approval two arbitral
precedents in which the doctrine of estoppel was similarly applied in a labour
relations context (Agassiz School Division No. 13 (Re), [1997]
M.G.A.D. No. 61 (QL) (Arbitrator Graham) (“Agassiz”), and Manitoba
(Department of Family Services and Housing) and C.U.P.E., Loc. 2153 (Murdock)
(Re) (2005), 142 L.A.C. (4th) 173 (Arbitrator Peltz) (“Murdock”)).
[18]
In both instances, the employer was found by the
arbitrator to have applied the relevant clauses of its collective agreement
incorrectly ― in Agassiz, for at least twenty-five years; in Murdock,
for at least three. And in both instances, estoppel was imposed against
the union for reasons that in essence mirror the arbitral award in this case.
[19]
Both arbitrators were alive to the foundational
principles of estoppel. Essentially, they both found that the union was fixed
with knowledge ― constructive, if not actual ― of the employer’s
mistaken application of the disputed clauses throughout the relevant time; that
the union’s silence amounted to acquiescence in the employer’s practice; that
this sufficiently fulfilled the intention requirement of estoppel; that the
employer could reasonably rely on the union’s acquiescence; that the employer’s
reliance was to its detriment; and that all of this had the effect of altering
the legal relations between the parties.
[20]
Thus, in Murdock, the arbitrator first
reviewed in detail the essential elements of an estoppel, its effects, and the
arbitral award in Agassiz. He then concluded as follows:
.
. . there was a representation by silence in this case, sufficient to meet the
test for an equitable estoppel and barring the Union from asserting its strict
legal rights under Article 15.03(a) of the collective agreement. While the
Union did not know about the practice, it had constructive or imputed notice.
Under all the circumstances, it would be inequitable to allow the Union to
enforce its rights against the Employer after a period of acquiescence which
extended into collective bargaining. [p. 192]
[21]
The arbitrator in this case applied Agassiz
and Murdock to the facts as he found them and, as I have already
mentioned, imposed an estoppel against the Union. This estoppel was to
terminate upon the expiry of the collective agreement, on March 31, 2010.
[22]
The Union’s application for judicial review was
dismissed in the Manitoba Court of Queen’s Bench, where Bryk J. held that the
appropriate standard of review was reasonableness. In his view, this followed
from the existence of a privative clause in the LRA and the nature of the
disputed issue ― a mixed question of fact and law that was neither of
central importance to the legal system as a whole nor beyond the expertise of
the arbitrator.
[23]
Bryk J. then concluded that the arbitrator’s
decision was not unreasonable. He found that it was intelligible, justifiable
and “f[ell] within a range of possible, acceptable outcomes which are
defensible in respect of the facts and law” (Dunsmuir v. New Brunswick,
2008 SCC 9, [2008] 1 S.C.R. 190, at para. 47).
[24]
The Manitoba Court of Appeal held that Bryk J.
had erred in applying the reasonableness standard of review to the arbitrator’s
finding of estoppel. In the court’s view, correctness was the applicable
standard since the arbitrator’s finding of estoppel raised a question of law
that was of central importance to the legal system as a whole and did not fall
within the expertise of labour arbitrators (Dunsmuir, at paras. 55 and
60).
[25]
The Court of Appeal then concluded that the
arbitrator had misconstrued the doctrine of promissory estoppel. It held that
promissory estoppel, as a matter of law, requires a finding that the promisor
intended to affect its legal relations with the promisee. Yet here, the
arbitrator had found only that the promisor (the Union) ought to have known how
the promisee (Nor-Man) was calculating employees’ vacation entitlements, and
had made no finding as to the Union’s intent.
[26]
On this ground alone, the Court of Appeal set
aside the arbitrator’s finding of estoppel.
[27]
For the sake of clarity, I pause here to mention
that the arbitrator never mentioned “promissory estoppel”. Nor did he purport
to apply the doctrine of promissory estoppel as a matter of law. Rather, like
the precedents on which he relied, the arbitrator simply referred to the remedy
he awarded as an “estoppel”.
[28]
In fairness to the Court of Appeal, I
acknowledge that the estoppel applied by the arbitrator resembles promissory
estoppel more closely than any of the other estoppels identified by this Court
in Ryan v. Moore, 2005 SCC 38, [2005] 2 S.C.R. 53, at para. 52. It
nonetheless remains an arbitral remedy and not a strict application by
the arbitrator of the doctrine of promissory estoppel applicable in courts of
law.
IV
[29]
The standard of review applicable in this case
is governed by Dunsmuir.
[30]
Dunsmuir makes
clear that “[a]n exhaustive review is not required in every case to determine
the proper standard of review” (para. 57). A reviewing court should therefore
first inquire “whether the jurisprudence has already determined in a
satisfactory manner the degree of deference to be accorded with regard to a
particular category of question” (Dunsmuir, at para. 62; Smith v.
Alliance Pipeline Ltd., 2011 SCC 7, [2011] 1 S.C.R. 160, at para. 24). Only
where this “first inquiry proves unfruitful, [must courts] proceed to an analysis
of the factors making it possible to identify the proper standard of review” (Dunsmuir,
at para. 62).
[31]
Prevailing case law clearly establishes that
arbitral awards under a collective agreement are subject, as a general rule, to
the reasonableness standard of review.
[32]
Stated narrowly, the issue on this appeal is
whether the arbitrator’s imposition of an estoppel brings his award within an
exception to that general rule. Stated more broadly, the issue is whether
arbitral awards that apply common law or equitable remedies are for that reason
subject to judicial review for correctness.
[33]
Stated either way, the issue comes before us
squarely for the first time in this case. And, as we have seen, the courts
below reached opposing conclusions as to the governing standard of review.
[34]
In this light, I think it best to adhere, in
substance if not in form, to the analytical template set out in Dunsmuir
and adopted in Smith. This will serve to explain why reasonableness
― not correctness ― is the appropriate standard in cases such as
this. And it will help to determine whether the award conforms to that
standard.
V
[35]
An administrative tribunal’s decision will be
reviewable for correctness if it raises a constitutional issue, a question of
“general law ‘that is both of central importance to the legal system as a whole
and outside the adjudicator’s specialized area of expertise’”, or a “true
question of jurisdiction or vires”. It will be reviewable for
correctness as well if it involves the drawing of jurisdictional lines between
two or more competing specialized tribunals (Dunsmuir, at paras. 58-61; Smith,
at para. 26; Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3
S.C.R. 77 (“Toronto (City)”), at para. 62, per LeBel J.).
[36]
The standard of reasonableness, on the other
hand, normally prevails where the tribunal’s decision raises issues of fact,
discretion or policy; involves inextricably intertwined legal and factual
issues; or relates to the interpretation of the tribunal’s enabling (or “home”)
statute or “statutes closely connected to its function, with which it will have
particular familiarity” (Dunsmuir, at paras. 51 and 53-54; Smith,
at para. 26).
[37]
In this case, the Court of Appeal held, as
mentioned earlier, that correctness was the governing standard because, in its
view, the issue involved a question of central importance to the legal system
as a whole that was beyond the expertise of the arbitrator.
[38]
With respect, I see the matter differently. Our
concern here is with an estoppel imposed as a remedy by an arbitrator seized of
a grievance in virtue of a collective agreement. No aspect of this remedy
transforms it into a question of general law “that is both of central
importance to the legal system as a whole and outside the adjudicator’s
specialized area of expertise” within the meaning of Dunsmuir (para.
60). It therefore cannot be said to fall within that established category of
question ― nor any other ― subject to review for correctness
pursuant to Dunsmuir.
[39]
Moreover, the second step of the standard of
review inquiry mandated by Dunsmuir ― a contextual analysis
― confirms that reasonableness, not correctness, is the appropriate
standard of review.
[40]
In proceeding to a contextual analysis,
reviewing courts must remain sensitive to the tension between the rule of law
and respect for legislatively endowed administrative bodies (Dunsmuir,
at para. 27). Four non-exhaustive contextual factors have been identified in
the jurisprudence to guide courts through this exercise: (1) the presence or
absence of a privative clause; (2) the purposes of the tribunal; (3) the nature
of the question at issue; and (4) the expertise of the tribunal (Dunsmuir,
at para. 64).
[41]
These contextual guideposts confirm that
deference is appropriate in this case. As I noted earlier, they are of
assistance as well in assessing the reasonableness of a contested arbitral
remedy.
[42]
As a starting point, it is well established
that, as a general rule, reasonableness is the standard of review governing
arbitral awards under a collective agreement: “This Court has often recognized
the relative expertise of labour arbitrators in the interpretation of collective
agreements, and counselled that the review of their decisions should be
approached with deference” (Dunsmuir, at para. 68).
[43]
In this case, as we have seen, the Court of
Appeal found that the arbitrator’s imposition of an estoppel was an aspect of
the award that fell outside the protected zone of deference. With respect, I
disagree.
[44]
Common law and equitable doctrines emanate from
the courts. But it hardly follows that arbitrators lack either the legal
authority or the expertise required to adapt and apply them in a manner more
appropriate to the arbitration of disputes and grievances in a labour relations
context.
[45]
On the contrary, labour arbitrators are
authorized by their broad statutory and contractual mandates ― and well
equipped by their expertise ― to adapt the legal and equitable doctrines
they find relevant within the contained sphere of arbitral creativity. To this
end, they may properly develop doctrines and fashion remedies appropriate in
their field, drawing inspiration from general legal principles, the objectives
and purposes of the statutory scheme, the principles of labour relations, the
nature of the collective bargaining process, and the factual matrix of the
grievances of which they are seized.
[46]
This flows from the broad grant of authority vested
in labour arbitrators by collective agreements and by statutes such as the LRA,
which governs here. Pursuant to s. 121 of the LRA, for example,
arbitrators and arbitration boards must consider not only the collective
agreement but also “the real substance of the matter in dispute between the
parties”. They are “not bound by a strict legal interpretation of the matter
in dispute”. And their awards “provide a final and conclusive
settlement of the matter submitted to arbitration”.
[47]
The broad mandate of arbitrators flows as well
from their distinctive role in fostering peace in industrial relations (Toronto
(City) Board of Education v. O.S.S.T.F., District 15, [1997] 1 S.C.R. 487
(“O.S.S.T.F., District 15”), at para. 36; Parry Sound (District)
Social Services Administration Board v. O.P.S.E.U., Local 324, 2003 SCC 42,
[2003] 2 S.C.R. 157, at para. 17).
[48]
Collective agreements govern the ongoing
relationship between employers and their employees, as represented by their
unions. When disputes arise — and they inevitably will — the collective
agreement is expected to survive, at least until the next round of
negotiations. The peaceful continuity of the relationship depends on a system
of grievance arbitration that is sensitive to the immediate and long-term interests
of both the employees and the employer.
[49]
Labour arbitrators are uniquely placed to
respond to the exigencies of the employer-employee relationship. But they
require the flexibility to craft appropriate remedial doctrines when the need
arises: Rigidity in the dispute resolution process risks not only the
disintegration of the relationship, but also industrial discord.
[50]
These are the governing principles of labour
arbitration in Canada. Their purpose and underlying rationale have long been
well understood by arbitrators and academics alike. More than 30 years ago,
Paul C. Weiler, then Chairman of the British Columbia Labour Relations Board and now Professor Emeritus at
Harvard University, underlined their importance in a
dispute of particular relevance here. He explained in the following terms why
the doctrine of estoppel must be applied differently in a grievance arbitration
than in a court of law:
. . . a collective bargaining relationship is
quite a different animal. The union and the employer deal with each other for
years and years through successive agreements and renewals. They must deal with
a wide variety of problems arising on a day-to-day basis across the entire
spectrum of employment conditions in the workplace, and often under quite
general and ambiguous contract language. By and large, it is the employer which
takes the initiative in making operational decisions within the framework of
the collective agreement. If the union leadership does not like certain
management actions, then it will object to them and will carry a grievance
forward about the matter. The other side of that coin is that if management
does take action, and the union officials are fully aware of it, and no
objection is forthcoming, then the only reasonable inference the employer can
draw is that its position is acceptable. Suppose the employer commits itself on
that assumption. But the union later on takes a second look and feels that it
might have a good argument under the collective agreement, and the union now
asks the arbitrator to enforce its strict legal rights for events that have
already occurred. It is apparent on its face that it would be inequitable and
unfair to permit such a sudden reversal to the detriment of the other side. In
the words of the Board in [Corporation of the District of Burnaby and
Canadian Union of Public Employees, Local 23, [1978] 2 C.L.R.B.R. 99, at p.
103], “It is hard to imagine a better recipe for eroding the atmosphere of
trust and co-operation which is required for good labour management relations,
ultimately breeding industrial unrest in the relationship ― all contrary
to the objectives of the Labour Code” . . . .
(Re
Corporation of the City of Penticton and Canadian Union of Public Employees,
Local 608 (1978), 18 L.A.C. (2d) 307 (B.C.L.R.B.), at p. 320)
[51]
Reviewing courts must remain alive to these
distinctive features of the collective bargaining relationship, and reserve to
arbitrators the right to craft labour specific remedial doctrines. Within this
domain, arbitral awards command judicial deference.
[52]
But the domain reserved to arbitral discretion
is by no means boundless. An arbitral award that flexes a common law or
equitable principle in a manner that does not reasonably respond to the
distinctive nature of labour relations necessarily remains subject to judicial
review for its reasonableness.
[53]
Other contextual factors favour judicial
deference to labour arbitrators as they adopt and apply common law and
equitable principles within their distinctive sphere: Section 128(2) of the LRA
contains a privative clause in respect of labour arbitrators and boards of
arbitration. They benefit from institutional expertise in resolving
disputes arising under a collective agreement (O.S.S.T.F., District 15,
at para. 37), even if they lack personal expertise in matters of law. Dunsmuir
makes clear that, “at an institutional level, adjudicators . . . can be
presumed to hold relative expertise in the interpretation of the legislation
that gives them their mandate, as well as related legislation that they might
often encounter in the course of their functions” (para. 68 (emphasis added)).
VI
[54]
The respondent argues that the flexible
application of estoppel in the field of labour relations is a matter best left
to the legislature. I would reject that submission. The requisite legislative
authority already exists: It is inherent in the statutory scheme of the LRA
and similar statutes across the country that labour arbitrators are already
authorized ― subject to the constraints I mentioned earlier (at para. 6)
― to apply general legal principles flexibly in resolving disputes
arising under collective agreements. More particularly, arbitrators have a
“statutory mandate . . . to fit the principle of estoppel into the special
setting and policy objectives of the world of industrial relations” (Re
Corporation of the City of Penticton, at pp. 319-20).
[55]
The respondent also argues that Toronto
(City) stands for the proposition that a labour arbitrator’s application of
common law doctrines must be correct. In my view, it does not. As we have seen,
the application of general rules or principles of law will not automatically be
reviewed for correctness unless they raise legal issues “both of central
importance to the legal system as a whole and outside the adjudicator’s
specialized area of expertise” (Toronto (City), at para. 62, per LeBel
J.; Dunsmuir, at para. 60; Smith, at para. 26).
VII
[56]
The labour arbitrator’s imposition of estoppel
in this case can hardly be considered unreasonable.
[57]
As LeBel J. stated in Montréal (City) v.
Montreal Port Authority, 2010 SCC 14, [2010] 1 S.C.R. 427, at para. 38,
“[t]he concept of ‘reasonableness’ relates primarily to the transparency and
intelligibility of the reasons given for a decision. But it also encompasses a
quality requirement that applies to those reasons and to the outcome of the
decision-making process”. Similar guidance can be found in Dunsmuir, at
para. 47.
[58]
In my view, the labour arbitrator’s reasons are
not just transparent and intelligible, but coherent as well. They set out in
detail the evidence, the submissions of the parties, and the arbitrator’s own
analysis. The arbitrator reviewed the decisions relied on by the parties, and
he identified and applied the precedents he found relevant and persuasive. They
are consistent with his decision, and his reasons are amply sufficient to
explain why he imposed the remedy of estoppel in this case.
[59]
With respect to substance, the respondent
submits that the labour arbitrator did not make a factual finding that the
Union intended to affect its legal relationship with Nor-Man, as required by
the test for promissory estoppel laid down by this Court in Maracle v.
Travellers Indemnity Co. of Canada, [1991] 2 S.C.R. 50, at p. 57.
[60]
I would reject that submission as well. The
question is not whether the labour arbitrator failed to apply Maracle to
the letter, but whether he adapted and applied the equitable doctrine of
estoppel in a manner reasonably consistent with the objectives and purposes of
the LRA, the principles of labour relations, the nature of the collective
bargaining process, and the factual matrix of Ms. Plaisier’s grievance.
[61]
I am satisfied that he did.
VIII
[62]
For all of these reasons, I would allow the
appeal with costs and restore the labour arbitrator’s award in its entirety.
Appeal
allowed with costs.
Solicitors
for the appellant: Pitblado, Winnipeg.
Solicitors
for the respondent: Inkster, Christie, Hughes, Winnipeg.
Solicitor for the
intervener: Attorney General of British Columbia, Victoria.