Berry v. Pulley, [2002] 2 S.C.R. 493,
2002 SCC 40
Patrick Berry, James Deluce, Jeffrey Karelsen,
Robert James Simerson and Ernest Zurkan Appellants
v.
Chris Pulley, Tom Fraser, Lars T. Jensen,
James Griffith and Kent Hardisty Respondents
and
Canadian Labour Congress Intervener
Indexed as: Berry v. Pulley
Neutral citation: 2002 SCC
40.
File No.: 27992.
2001: October 30; 2002: April 25.
Present: McLachlin C.J. and L’Heureux‑Dubé,
Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour and LeBel JJ.
on appeal from the court of appeal for ontario
Labour relations —
Trade unions — Members — Nature of obligations existing between
members of a trade union — Action for breach of contract brought by
union members against other union members — Whether union member may be
personally liable to other members in breach of contract action based on terms
of union constitution — Whether web of contracts exists between union
members and, if so, whether it can form the basis for a breach of contract
claim against union members.
The appellants brought an intended class proceeding on
behalf of all Air Ontario pilots who were members of the Canadian Air Line Pilots
Association (“CALPA”), on March 28, 1995, the day a crucial arbitration
award was handed down. The proposed respondent class consists of all Air Canada
pilots who were members of CALPA, a trade union that was the certified
bargaining agent for over 4000 pilots across Canada, on that same date. In
March 1991, pursuant to the merger policy appended to the CALPA constitution,
the CALPA president issued a merger declaration that affected the Air Canada
pilots, who were then members of CALPA, and the pilots of five regional
airlines, including Air Ontario. The effect of the declaration was to trigger
a process whereby the separate seniority lists covering the pilots of all six
airlines were to be integrated. This process resulted in an arbitration award,
the “Picher Award”. The Air Canada pilots took exception to the award, refused
to present a merged seniority list to Air Canada, and voted to reject the
Picher Award. On May 19, 1995, the Air Canada pilots left CALPA and
formed their own union. The appellants sued the proposed class of Air Canada
pilots personally in tort and for breach of contract. The appellants contended
that the respondents’ refusal to advance the Picher Award during the collective
bargaining with Air Canada constituted a breach of the contract contained in
the union constitution. The respondents moved for summary judgment to dismiss
the action. The motion for summary judgment was granted in part. The
appellants’ claim in contract was dismissed, but there was determined to be a genuine
issue for trial with respect to the claims in tort. The appellants appealed
the dismissal of the contractual claim and the respondents cross‑appealed
the dismissal of the motion to dismiss the tort claims. The appeal and cross‑appeal
were both dismissed.
Held: The appeal
should be dismissed.
Historically, at common law trade unions were
unincorporated associations lacking legal status. To overcome this status
problem, courts developed the theory that union members were joined together by
a web of individual contracts, the breach of which could give rise to group
liability. This allowed individual members to seek remedies for acts committed
against them by their union. Since these early cases, the field of labour
relations has become increasingly sophisticated and regulated, with the
granting of significant statutory powers and duties to trade unions. As a
result, trade unions have come to be recognized as legal entities at least for
the purpose of discharging their functions and performing their role in the
field of labour relations. As such, it is no longer necessary to maintain the
concept that union members are bound to each other through a complex of
contracts. The recognition of the legal status of trade unions enables the
adoption of a more common sense approach, namely, that each union member has a
contractual relationship with the union itself. When a member joins a union, a
relationship in the nature of a contract arises between the member and the
trade union as a legal entity. Although the relationship includes at least
some of the indicia of a common law contract, the terms of the contractual
relationship between the union and the member will be greatly determined by the
statutory labour relations regime and labour law principles. This contractual
relationship is unique in both character and context, since it is essentially
an adhesion contract with a statutory labour relations scheme superimposed over
it.
The legal fiction that union members are bound to each
other through a complex of contracts should be discarded because it is both
unnecessary and impractical. A member wishing to sue his or her union for
breach of the constitution is not impeded by a lack of legal status. On
grounds of both law and policy, there is no contract between union members
based on the terms of the union constitution. It is not within the reasonable
expectations of union members that they could be held personally liable to
other members for breaching the union constitution. If courts were to allow
disagreements between union members to result in claims against their personal
assets absent the existence of an identifiable wrongdoer in breach of some
duty, like the required elements of a tort action, this would have a chilling
effect on union democracy, and it would interfere with the ability of unions to
manage their internal affairs and conflicts.
Cases Cited
Referred to: Orchard
v. Tunney, [1957] S.C.R. 436; Astgen v. Smith, [1970] 1 O.R. 129; Bimson
v. Johnston, [1957] O.R. 519; United Mine Workers of America, Local
Union No. 1562 v. Williams (1919), 59 S.C.R. 240; Society Brand Clothes
Ltd. v. Amalgamated Clothing Workers of America, [1931] S.C.R. 321; Taff
Vale Railway Co. v. Amalgamated Society of Railway Servants, [1901] A.C.
426; Bonsor v. Musicians’ Union, [1955] 3 All E.R. 518; International
Brotherhood of Teamsters v. Therien, [1960] S.C.R. 265; International
Longshoremen’s Association, Local 273 v. Maritime Employers’ Association,
[1979] 1 S.C.R. 120; Hornak v. Paterson (1966), 58 D.L.R. (2d) 175; Tippett
v. International Typographical Union, Local 226 (1975), 63 D.L.R. (3d) 522.
Statutes and Regulations Cited
Canada Labour Code, R.S.C. 1985, c. L‑2, s. 35 [repl. 1998,
c. 26, s. 17], 37, 103(1), (2).
Civil Code of Québec, S.Q. 1991, c. 64, arts. 2267 to 2279.
Code of Civil Procedure, R.S.Q., c. C‑25, art. 60.
Industrial Relations Act, R.S.N.B. 1973, c. I‑4, s. 114(2).
Labour Act, R.S.P.E.I. 1988, c. L‑1, s. 44(1).
Labour Code, R.S.Q., c. C-27.
Labour Relations Act, R.S.M. 1987, c. L10, ss. 146(1), 150(3).
Labour Relations Act, R.S.N. 1990, c. L‑1, s. 141(1).
Labour Relations Act, 1995, S.O. 1995, c. 1, Sched. A, ss. 107(1), 108 [am. 2000,
c. 38, s. 16].
Labour Relations Code, R.S.A. 2000, c. L‑1, s. 25(1).
Labour Relations Code, R.S.B.C. 1996, c. 244, s. 154.
Professional Syndicates Act, R.S.Q., c. S‑40, ss. 1, 9.
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 20.04(4).
Trade Union Act, R.S.N.S. 1989, c. 475, s. 79(1).
Trade Union Act, R.S.S. 1978, c. T‑17, s. 29 [am. 1983, c. 81,
s. 9].
Authors Cited
Perrins,
Bryn. Trade Union Law. London: Butterworths, 1985.
APPEAL from a judgment of the Ontario Court of Appeal
(2000), 48 O.R. (3d) 169, 186 D.L.R. (4th) 311, 131 O.A.C. 337, 2 C.C.L.T. (3d)
103, 46 C.P.C. (4th) 62, 2000 C.L.L.C. ¶ 220‑042, [2000] O.J. No. 1401
(QL), affirming a decision of the Superior Court of Justice (1999), 45 O.R.
(3d) 449, 99 C.L.L.C. ¶ 220‑052, [1999] O.J. No. 1965 (QL). Appeal
dismissed.
Frank J. C. Newbould, Q.C., Benjamin T. Glustein and Joseph M. P.
Weiler, for the appellants.
Steve H. Waller and Eric
Pietersma, for the respondents Chris Pulley, Tom Fraser, Lars T.
Jensen and James Griffith.
Brian Shell and Barry E. Wadsworth, for the respondent Kent
Hardisty.
John Baigent, for the
intervener.
The judgment of the Court was
delivered by
Iacobucci J. —
I. Introduction
1
This appeal raises the basic question of whether a union member may be
personally liable to other members in a breach of contract action based on the
terms of the union constitution. This requires an analysis of the nature of
the obligations that exist between members of a trade union.
2
The idea that union members are contractually bound to each other by the
union constitution has its roots in the historical development of the union at
common law. Early decisions dealing with actions brought by and against trade
unions held that trade unions were unincorporated associations lacking legal
status. As a result, a member who had been wronged by his or her union could
not bring suit against the association directly. To overcome this status
problem, courts developed the theory that union members were joined together by
a web of individual contracts, the breach of which could give rise to group
liability. This allowed individual members to seek remedies for acts committed
against them by their union.
3
Since these early cases, the field of labour relations has become
increasingly sophisticated and regulated, with the granting of significant
statutory powers and duties to trade unions. In light of these developments,
unions have come to be recognized as entities which possess a legal personality
with respect to their labour relations role. This status not only allows a
union member to bring suit against his or her union directly, but also enables
the union to enter into contracts of membership with each of its members.
4
In this modern context, it is no longer necessary to maintain the
concept that union members are bound to each other through a complex of
contracts. The notion that every union member has a contract with every other
member should be discarded, not only because it is unnecessary, but also
because it is largely impractical. Further, on a policy level, to allow a
breach of contract action to be maintained on this basis would be detrimental
both to individual members and to their unions.
5
Instead, the recognition of the legal status of trade unions enables the
adoption of a more common sense approach, namely, that each union member has a
contractual relationship with the union itself. This relationship is based on
the constating documents of the union, although it must be read in light of the
statutory labour relations regime and governing principles of labour law which
regulate unions and their activities.
6
Accordingly, as will be discussed further, I agree with the judgments
and basic reasoning of the motions judge and the Ontario Court of Appeal to
disallow the action brought against the respondent union members. I would
dismiss the appeal.
II. Facts
7
This appeal relates to an intended class proceeding brought on behalf of
the appellants, all Air Ontario pilots who were members of the Canadian Air
Line Pilots Association (“CALPA”), an unincorporated trade union, on March 28,
1995, the day a crucial arbitration award was handed down. The proposed
respondent class consists of all Air Canada pilots who were members of CALPA on
that same date.
8
CALPA was the certified bargaining agent for over 4,000 pilots
across Canada, including pilots employed by Air Canada and Air Ontario. CALPA is governed by a constitution and appended
administrative policy (“constitution”). Under the constitution, CALPA is organized into
five sub-units:
(a) local councils at each base of
the member airlines;
(b) local executive councils of each
local council;
(c) master executive councils (“MEC”) for
each member airline pilot group;
(d) the board of directors of CALPA;
and
(e) the convention assembly of CALPA.
The convention assembly is the highest governing
body of CALPA. However, on matters exclusively affecting the members of its
bargaining unit, the MEC for that bargaining unit is the highest governing
authority. Each MEC chairman was a member of the CALPA board of directors.
9
Contained in the administrative policy was a merger policy pursuant to
which the President had the power to declare that employer airlines had merged,
even though they had not yet merged in the corporate sense. The purpose of
this merger policy was to prevent pilot employee groups from bidding against
one another for work.
10
On March 1, 1991, pursuant to the merger policy, the CALPA President
issued a merger declaration that affected the Air Canada pilots, who were then
members of CALPA, and the pilots of five regional airlines, including Air
Ontario. The effect of the declaration was to trigger a process whereby the
separate seniority lists covering the pilots of all six airlines were to be
integrated. The process contemplated an initial attempt to negotiate an
integrated seniority list, and failing agreement, a determination by final and
binding arbitration.
11
No agreement was reached through negotiation, which led to an
arbitration conducted by Michel Picher. The Air Canada pilots requested an
“endtail merger” that would result in all Air Ontario pilots being ranked after
the Air Canada pilots in seniority. On March 28, 1995, the arbitrator released
his decision on the integration of the seniority list (“Picher Award”). He rejected
the Air Canada pilots’ position and directed that the bottom 15 percent of the
Air Canada pilots should be “dovetailed” with the most senior regional airline
pilots.
12
The CALPA President officially accepted the Picher Award on April 5,
1995, as required by the merger policy. Captain Pulley, Chairman of the Air
Canada pilots’ MEC, advised the CALPA President that the Air Canada MEC had
reviewed the decision and found the award unacceptable. Captain Pulley attended
but refused to participate in a meeting to fashion the seniority list in
accordance with the Picher Award.
13
The Air Canada pilots were in negotiations with Air Canada for a new
collective agreement at the time that the Picher Award was released. They
refused to present a merged seniority list to Air Canada. The Picher Award had
no practical force or effect without the agreement of the employer.
14
The Air Canada pilots voted to reject the Picher Award. On May 19,
1995, they left CALPA and formed their own union, the Air Canada Pilots
Association (“ACPA”). ACPA was certified as the bargaining agent for the Air
Canada pilots on November 14, 1995. The membership of all Air Canada pilots in
CALPA was automatically terminated when ACPA was certified as their bargaining
agent.
15
On March 20, 1996, CALPA filed an application under s. 35 of the Canada
Labour Code, R.S.C. 1985, c. L-2 , asking the Canada Labour Relations Board
(“CLRB”) to declare Air Canada and the five regional airline subsidiaries a
single employer and to consolidate the six separate pilot bargaining units into
one. Also on March 20, CALPA brought an unfair labour practice complaint before
the CLRB against ACPA seeking remedies for CALPA and the members of the five
connector bargaining units. The CLRB consolidated these proceedings and on
December 22, 1999 released its decision dismissing both the
single employer declaration and the unfair labour practice complaint.
16
The appellants sued the proposed class of Air Canada pilots personally
in tort, alleging conspiracy, interference with economic relations and
interference with contractual relations. They also sued for breach of
contract. The appellants contended that the refusal of the respondents to
advance the Picher Award during the collective bargaining with Air Canada was a
breach of the contract contained in the union constitution. The respondents
moved for summary judgment to dismiss the action.
17
Winkler J. of the Ontario Superior Court of Justice granted the
respondents’ motion for summary judgment under subrule 20.04(4) of the Rules
of Civil Procedure, R.R.O. 1990, Reg. 194, with respect to the claim for
damages arising from breach of contract. He dismissed the motion with respect
to the tort claims finding that those claims raised a genuine issue for trial.
18
The appellants appealed the dismissal of the contractual claim and the
respondents cross-appealed the dismissal of the motion to dismiss the tort
claims to the Court of Appeal for Ontario. The appeal and cross-appeal were
both dismissed with costs.
III. Judgments
Below
A. Ontario
Superior Court of Justice (1999), 45 O.R. (3d) 449
19
The motions judge, Winkler J., commenced his analysis by examining the
theories of legal status regarding unions. He noted that the appellants’ case
was based on the concept that a union is a complex of individual contracts. He
thus framed the motion with respect to the breach of contract claim in terms of
the following two issues:
(1) what is the nature of the contract of union
membership; and,
(2) is it an incident of the contract that
individual members of the union can be personally liable in damages to other
union members based on an alleged breach of the union constitution?
20
The motions judge concluded, on the authority of Orchard v. Tunney,
[1957] S.C.R. 436, Astgen v. Smith, [1970] 1 O.R. 129 (C.A.), and Bimson
v. Johnston, [1957] O.R. 519 (H.C.), that unions are unincorporated
associations bound together by the contractual bonds between the members, and
that the contracting parties are the member and every other member of the
union, as opposed to the member and the other members as a group.
21
The motions judge observed that the issues raised in the proceeding were
a matter of first impression, since no other Canadian case had involved
individual union members suing other members for breach of the union contract.
The determination of the motion thus required an examination of first
principles.
22
In Winkler J.’s opinion, the view that a union is a complex of
individual contracts was “a legal fiction adopted to create an identifiable
legal personality for a construct which otherwise has neither common law nor
statutory status” (para. 80). He stated that the main purpose of imposing
legal status on unions was to enable individuals to seek remedies for acts
committed against them by or through the auspices of the union.
23
He found that the assertion that the appellants were entitled to the
remedy of damages from each defendant individually was “fundamentally flawed”.
Because the failure to advance the Picher Award was a result of the resolutions
of the local councils and because the “vast majority” of the Air Canada pilots
opposed the award, the appellants were essentially seeking individual remedies
from a group action. Not only was this contrary to the principle stated in Orchard,
supra, namely that “liabilities incurred in group action are group
liabilities”, but Winkler J. also found that there was an inherent
contradiction in seeking an individual remedy for a group action taken by a
majoritarian organization.
24
Aside from the question of liability, Winkler J. also found problematic
the contention that there existed a remedy of damages as an incident to the
union membership contract. He noted that the union contract was essentially
an “adhesion” contract, that is, a form of “take it or leave it” arrangement which
could not be assigned the same attributes as a commercial contract between two
parties of equal bargaining power.
25
He held that union contracts were relational as opposed to transactional
and were predicated on a determination of the reasonable expectations of the
parties. He found that it could not have been contemplated by individual union
members when they joined the union that they would be exposing their personal
assets to this type of claim.
26
The motions judge concluded that to give effect to the appellants’
contention would “require a disregard for the realities of labour relations and
union membership” (para. 95) and “produce an injustice rather than promote the
cause of justice”. In conclusion, Winkler J. wrote at paras. 94 and 97:
An extension of the contract theory of union membership to provide a
remedy in damages against union members in their personal capacity would be to
take the legal fiction well beyond its original purpose and dramatically alter
the landscape of labour relations.
.
. .
In conclusion, it is not an incident of a contract
of union membership that individual members of the union may be held personally
liable to other union members as a result of the collective action of the
bargaining unit. The remedy of damages as against individual members is not
available for the breach of contract of the nature asserted to exist between
the union members.
27
The motion for summary judgment was granted in part. The appellants’
claim in contract was dismissed, as the judge found that it raised no cause of
action known in law; however, he found, without giving reasons, that there was
a genuine issue for trial with respect to the claims in tort.
B. Ontario
Court of Appeal (2000), 48 O.R. (3d) 169
28
Sharpe J.A., for the court, held that the motions court judge was
correct in granting the respondents’ motion for summary judgment. The court
agreed with the motions judge that the appellants’ proposed action could not be
sustained upon close analysis of the contractual construct of the CALPA
constitution and the case law.
29
After reviewing the three leading cases – Orchard, supra, Astgen,
supra, and Bimson, supra – the court concluded that the
rights and obligations of the individual union member are not held or owned vis-à-vis
other individual members. As well, it would be a distortion of the very nature
of the complex of contracts between each and every member to suggest that
members are individually contractually liable to each other. It followed that
the contractual right of an individual member to damages lies against the
membership as a whole and not against other individual union members.
30
The court also agreed with the motions judge that it would not be within
the reasonable expectations of the union members to expose themselves to a
claim for damages in contract. The court was further of the view that it could
not be said that the denial of the right of action in contract could produce a
situation where there was a wrong without a remedy because of the ability to
pursue a remedy through the CLRB (now the Canada Industrial Relations Board),
as well as the existence of disciplinary measures contained in the CALPA
constitution for members who breached the obligations imposed by the constitution.
31
With respect to the tort claims, the court was not certain that the tort
claims asserted would be tenable, since they were significantly dependent upon
the same contract. However, the court noted that it is well recognized that
the acts of individual union members may attract tort liability for conspiracy,
interference with economic relations and interference with economic interests,
and thus the court could not be certain that the appellants would be unable to
make out their tort claims.
32
In conclusion, the Court of Appeal dismissed the appeal, upholding
Winkler J.’s decision which dismissed the appellants’ claim in contract but
found that there was a genuine issue for trial with respect to the tort claims.
IV. Issue
33
The issue on this appeal is whether a union member who breaches or
causes the breach of a union constitution may incur personal liability in
breach of contract to another union member who suffers damage as a result.
V. Analysis
A. A Brief
Overview of the Historical Development of the Union Contract and Union
Status
34
The use of a contractual model to characterize union membership arose in
the early part of the 20th century as a consequence of the rising prominence of
trade unions in England. The general rule at common law was that unions, as
unincorporated associations, had no legal status. As a result, members could
not bring suit against the union itself and courts would normally only engage
in union affairs in order to protect the property interests of the members,
refusing to interfere to enforce the rules of the association: see B. Perrins,
Trade Union Law (1985), at p. 90; see also United Mine Workers of
America, Local Union No. 1562 v. Williams (1919), 59 S.C.R. 240; Society
Brand Clothes Ltd. v. Amalgamated Clothing Workers of America, [1931]
S.C.R. 321. As the role of trade unions became more significant, and unions
were able to exercise significant control over employers and employees alike,
common law courts sought to establish a basis for a legally enforceable
obligation on unions to follow their internal rules, thereby protecting the
rights of individual union members.
35
In Taff Vale Railway Co. v. Amalgamated Society of Railway Servants,
[1901] A.C. 426, the House of Lords held that an action in tort lay against a
union for the actions of its agents. The reasoning of the court was that the
statutory rights of trade unions (for example to be registered, hold property,
and enter into contracts) granted to them by the Trade Union Act, 1871
(U.K.), 34 & 35 Vict., c. 31, and the Trade Union Act Amendment
Act, 1876 (U.K.), 39 & 40 Vict., c. 22, brought with them
corresponding obligations to the unions’ members. As such, a trade union
possessed the legal status to be sued in its registered name and could be held
liable to the extent of the property of the union. The House of Lords was
unanimous in its approval and adoption of the reasons of the trial judge,
Farwell J., who, at p. 429, rationalized the legal personality of a trade union
as follows:
Now, although a corporation and an individual or individuals may be the
only entity known to the common law who can sue or be sued, it is competent to
the Legislature to give to an association of individuals which is neither a
corporation nor a partnership nor an individual a capacity for owning property
and acting by agents, and such capacity in the absence of express enactment to
the contrary involves the necessary correlative of liability to the extent of
such property for the acts and defaults of such agents. It is beside the mark
to say of such an association that it is unknown to the common law. The
Legislature has legalised it, and it must be dealt with by the Courts according
to the intention of the Legislature.
36
In Bonsor v. Musicians’ Union, [1955] 3 All E.R. 518 (H.L.), an
expelled union member brought an action against the union in breach of
contract. Lords Morton, Porter and Keith agreed that the reasoning in Taff
Vale, supra, was applicable, and held that a trade union had the
status to be sued in a breach of contract action brought by a member against
the union for expelling the member in contravention of the union’s rules. At
p. 524, Lord Morton characterized the relationship between the member and the
union as follows:
When Mr. Bonsor applied to join the respondent union, and his
application was accepted, a contract came into existence between Mr. Bonsor and
the respondent union, whereby Mr. Bonsor agreed to abide by the rules of the
respondent union, and the union impliedly agreed that Mr. Bonsor would not be
excluded by the union or its officers otherwise than in accordance with the
rules. . . . The respondent union broke this contract, by wrongfully expelling
Mr. Bonsor and Mr. Bonsor sued the union as a legal entity. He did not sue
either all the members of the union at the date of the writ other than himself,
many of whom must have joined since the breach of contract, or all the members
of the union including himself.
Although Lord
Morton recognized that the facts in the Taff Vale case differed from the
case before him in that the former involved a tort action which was not brought
by a member of the union, he held that these were not “vital differences” (at
p. 523) and employed similar reasoning in coming to the conclusion that the
union had the status to contract with Mr. Bonsor, and could therefore be sued
for breaching that contract.
37
In the seminal Canadian case of Orchard, supra, a union
member sued members of the union’s executive board in tort for infringing his
rights under the union constitution. In addressing the character of the rights
and obligations relating to union membership, Rand J. (for the majority) looked
to the Taff Vale and Bonsor decisions for the basis of his judgment;
however he noted that those decisions were grounded in the fact that the
English Trade Union Acts had granted significant rights to trade unions,
and that there was no comparable legislation in Manitoba. Thus, with no basis
upon which to follow these English decisions, Rand J. was unable to find that
trade unions in Manitoba had legal status or personality.
38
In light of this statutory difference, Rand J. did not wholly adopt the
reasoning of the House of Lords from Bonsor, supra, to the effect
that there existed an enforceable contract between the union per se and
each individual member. Instead he held at p. 445 that, although union
membership was contractual in nature, the contract was between the members inter
se:
There is no
legislation in Manitoba similar to that of the Trade Union Acts,
1871-1876; and it was not argued that The Labour Relations Act, supra,
had any wider effect than as already stated. Apart, then, from statute, that a
union is held together by contractual bonds seems obvious; each member commits
himself to a group on a foundation of specific terms governing individual and
collective action, a commitment today almost obligatory, and made on both sides
with the intent that the rules shall bind them in their relations to each
other. That means that each is bound to all the others jointly. The
terms allow for the change of those within that relation by withdrawal from or
new entrance into membership. Underlying this is the assumption that the
members are creating a body of which they are members and that it is as members
only that they have accepted obligations: that the body as such is that to
which the responsibilities for action taken as of the group are to be related.
By the contract,
therefore, liabilities incurred in group action are group liabilities and it is
this unexpressed assumption that warrants the conclusion of several of the
Lords in Taff Vale and in Bonsor in limiting execution of the
judgments in those cases recovered to the property of the union. That such a
limitation can be effected contractually as between the parties is undoubted
and its attribution to the agreement is simply making explicit what is implicit
in their act of organization. The contractual rights of a member are, then,
with all members except himself, otherwise it would be the group as one that
contracts; and what ordinarily is complained of as a breach toward a member
must, in the light of the rules and the agreement to be bound by a majority, be
such as at the same time is a violation in respect of all the other members and
not of one or more only. [Emphasis added.]
Although he characterized the contract slightly
differently, the effect of Rand J.’s
statement accords with the thrust of the Bonsor decision. The essence
of both judgments is that the act of joining a union is contractual in nature.
By becoming a member, the individual accepts responsibility as a member of the
group; however, liability arising from the union’s breach of the constitution is of a group nature and is therefore
limited to the property of the union.
39
Since the Orchard
decision, legislatures have granted
statutory rights to trade unions similar to those acknowledged by the House of
Lords in Taff Vale, supra. Recognizing these statutory
developments, this Court has come to hold the view that a trade union is a legal entity that can be
sued in its own name. In International Brotherhood of Teamsters v. Therien,
[1960] S.C.R. 265, at pp. 277-78, the Court held through the judgment of Locke
J. that:
The granting of these
[statutory] rights, powers and immunities to these unincorporated associations
or bodies is quite inconsistent with the idea that it was not intended that
they should be constituted legal entities exercising these powers and enjoying these
immunities as such. . . .
.
. .
In my opinion, the appellant is a legal entity
which may be made liable in name for damages either for breach of a provision
of the Labour Relations Act or under the common law. [Emphasis
added.]
40
Although Therien is arguably restricted in its application
owing to the fact that the Court relied on specific provisions of the British
Columbia Labour Relations Act, S.B.C. 1954, c. 17, and Trade-unions
Act, R.S.B.C. 1948, c. 342, in International Longshoremen’s Association,
Local 273 v. Maritime Employers’ Association, [1979] 1 S.C.R. 120, at pp.
135-37, Estey J. speaking for the Court made a more general statement with
respect to the legal status of trade unions:
Federal and
provincial labour relations statutes alike have been interpreted by the courts
in the same general way as Farwell J. interpreted the United Kingdom
legislation in the Taff Vale case, supra, and over the years
the concept has crystallized in our law whereby trade unions and employer
organizations are deemed to have been constituted by the Legislature as legal
entities for the purpose of discharging their function and performing their
role in the field of labour relations. . . .
. . . The [Canada Labour] Code
introduced by Parliament in 1972 . . .
establishes in modern form an elaborate and comprehensive pattern of labour
relations in all its aspects within the federal jurisdiction. The exercise of
the rights and the performance of the obligations arising under that statute
can only be undertaken efficiently and conveniently by those groups acting as
legal entities. The reasoning in the Taff Vale decision, supra,
and the subsequent cases in this country apply with equal force and effect in
the case of the Code. It is not necessary to decide as has been done in some of
the judgments cited above whether any action might be maintained in the courts
by or against these entities in respect of conduct outside the discharge of
their obligations or the exercise of their rights under the Code. It would
take the clearest possible language in my view on the part of Parliament when
enacting the Code to show that Parliament did not wish to establish the
bargaining agent and the employer as legal entities for the purpose of employer
relations regardless of the status of each under pre-existing statute law or
the common law generally. In the result, the Association is a legal entity
fully capable of bringing these proceedings; and the three Locals are likewise
each legal entities fully capable at law of being added as a party defendant.
[Emphasis added.]
41
I note that neither Therien nor International
Longshoremen’s Association involved a breach of contract action. Therien
considered union status in relation to actions brought against the union by a
third party in tort and for breach of the British Columbia Labour Relations
Act, and International Longshoremen’s Association involved an
injunction application brought against the union. However, in Hornak v. Paterson (1966), 58 D.L.R.
(2d) 175, McFarlane J.A. of the British Columbia Court of Appeal held, at p.
181, that the reasoning in Therien was equally applicable to a breach of
contract claim by a union member against the union:
Respondents’ counsel sought to distinguish the Therien
case on the ground that it involved an action for damages in tort. In my view
this is not a valid distinction. I think when Locke, J., referred to damages
under the common law he meant to include damages for breach of contract such as
the contract of union membership here invoked, as well as damages for tort.
Locke, J., referred to the rights, powers and immunities conferred upon trade
unions by the Labour Relations Act of this Province, now R.S.B.C. 1960,
c. 205, as amended by 1961 (B.C.), c. 31, which defines a trade union as an
organization that has as one of its purposes the regulation in the Province of
the relations between employers and employees through collective bargaining.
The right to bargain collectively and to enter into agreements for that purpose
involves necessarily the creation of contractual obligations as between the
union and the employees for whom the Legislature has empowered it to act when
certified as the statute provides. Locke, J., said also at p. 11:
In the absence of anything to show a contrary
intention . . . the Legislature must be taken to have intended that the
creature of the statute shall have the same duties and that its funds shall be
subject to the same liabilities as the general law would impose on a private
individual doing the same thing. Qui sentit commodum sentire debet et onus.
. . . For these reasons I am of
the opinion that Local 97 may be made liable in name for damages for breach of
its contract of membership with the appellant.
42
In addition to the judicial recognition of the legal status of trade
unions, labour relations legislation in this country has expressly acknowledged
the legal status of trade unions to varying degrees. For example, ss. 103(1)
and 103(2) of the Canada Labour Code, R.S.C. 1985, c. L-2 , provide that:
103. (1) A prosecution for an offence under
this Part may be brought against and in the name of an employers’ organization,
a trade union or a council of trade unions.
(2) For the purpose of a
prosecution under subsection (1),
(a) an employers’ organization, trade union or council of trade
unions shall be deemed to be a person;
Similarly, ss.
107(1) and 108 of the Ontario Labour Relations Act, 1995, S.O. 1995, c.
1, Sched. A, allow for prosecutions for
offences under that Act and proceedings to enforce the decisions of arbitrators
or the Ontario Labour Relations Board to be brought against the union in its
own name.
43
Section 154 of the British Columbia Labour Relations Code, R.S.B.C.
1996, c. 244, has a broader recognition of legal status:
154 Every trade union and every employers’
organization is a legal entity for the purposes of this Code.
Substantially
similar provisions can be found in Alberta, Saskatchewan, Manitoba, New
Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland labour
legislation: see Alta. Labour Relations Code, R.S.A. 2000, c. L-1, s.
25(1); Sask. Trade Union Act, R.S.S. 1978, c. T-17, s. 29; Man. Labour
Relations Act, R.S.M. 1987, c. L10, ss. 146(1) and 150(3); N.B. Industrial
Relations Act, R.S.N.B. 1973, c.
I-4, s. 114(2); N.S. Trade Union Act, R.S.N.S. 1989, c. 475, s. 79(1);
P.E.I. Labour Act, R.S.P.E.I. 1988, c. L-1, s. 44(1); Nfld. Labour
Relations Act, R.S.N. 1990, c. L‑1, s. 141(1).
44
Under Quebec legislation, a union of fifteen or more members can
incorporate under s. 1 of the Professional Syndicates Act, R.S.Q., c.
S-40, and s. 9 of that Act grants extensive powers to such associations,
including the right to appear before the courts and enter into contracts. As
well, by art. 60 of the Code of Civil Procedure of Quebec, R.S.Q., c.
C-25, an unincorporated union may be a party
to legal proceedings in its own name provided that, where the association is
bringing the action, it deposits with the court a certificate of the labour
commissioner-general attesting that it is an association of employees within
the meaning of the Quebec Labour Code, R.S.Q., c. C-27. Other aspects
of legal personality are granted to unincorporated associations by the section
on Associations of the Civil Code of Québec: see
S.Q. 1991, c. 64, arts. 2267 to 2279.
45
As can be seen, there have been numerous statutory developments
aimed at enhancing the legal status of trade unions. In addition to these
specific provisions, I agree with the view expressed by Estey J. in International
Longshoremen’s Association, supra, at p. 137 that, regardless of the
status of trade unions under statutory law, “[i]t would take the clearest
possible language” to show that legislatures did not wish to establish the
bargaining agent as a legal entity for labour relations purposes.
B. The Union Contract and Union Status in the
Modern Context
46
As the above cases and statutory provisions suggest, the world of
labour relations in Canada has evolved considerably since the decision of this
Court in Orchard, supra. We now have a sophisticated statutory
regime under which trade unions are recognized as entities with significant
rights and obligations. As part of this gradual evolution the view has
emerged that, by conferring these rights and obligations on trade unions,
legislatures have intended, absent express legislative provisions to the
contrary, to bestow on these entities the
legal status to sue and be sued in their own name. As such, unions are legal
entities at least for the purpose of discharging their function and performing
their role in the field of labour relations. It follows from this that, in
such a proceeding, a union may be held liable to the extent of its own assets.
47
Viewed in this modern context, the proposition that a trade union
does not have the legal status to enter into contracts with its members is
implausible. The impediments that prevented
Rand J. in Orchard, supra, from holding that by joining a union,
the member contracts directly with the union as a legal entity, have been
overcome. In order for trade unions to fulfill their labour relations
functions, it is essential for unions to control and regulate their internal
affairs. Since the regulation of union membership is a fundamental part of the
role of trade unions, it is only logical that it should fall within the sphere
of activities for which unions have legal status. It follows that unions must
have sufficient legal personality to enter into contracts of membership, and
that this is an aspect of union affairs for which legislatures have impliedly
conferred legal status on unions. In addition, I agree with Lord Morton’s statement in Bonsor, supra, that
there are no “vital differences” between an action in tort and an action in breach
of contract brought by a member against the union, and to draw a line between
the legal status to be sued in tort and the legal status to enter into
contracts with its members is arbitrary and illogical.
48
In light of the above, the time has come to recognize formally that when a member joins a union, a relationship in
the nature of a contract arises between the member and the trade union as a
legal entity. By the act of membership, both the union and the member
agree to be bound by the terms of the union constitution, and an action may be
brought by a member against the union for its breach; however, since the union
itself is the contracting party, the liability of the union is limited to the
assets of the union and cannot extend to its members personally. I say that
this relationship is in the nature of a contract because it is unlike a
typical commercial contract. Although the relationship includes at least some
of the indicia of a common law contract (for example offer and acceptance), the
terms of the contractual relationship between the union and the member will be greatly
determined by the statutory regime affecting unions generally as well as the
labour law principles that courts have fashioned over the years. With this in
mind, for ease of reference I will refer to the membership agreement between
the individual member and the union as a contract.
49
Having said that there exists an enforceable contract between
union members and the union, I believe it is worth elaborating on several factors which make this contract unique.
First, it is essentially an adhesion contract as, practically speaking, the
applicant has no bargaining power with the union. Moreover, in many
situations, union membership is a prerequisite to employment, leaving the
individual with little choice but to accept the contract and its terms. Finally,
it must be borne in mind that a statutory labour relations scheme is
superimposed over the contract between the member and the union, and can create
legal obligations. Consequently, the contract must be viewed in this overall
statutory context. For example, the statutory right of members to be
represented by the union of their choice implies that the contract only exists
as long as the members maintain that union as their bargaining agent, and no
penalty could be imposed by the contract against members for exercising this
statutory right. As it is not necessary to interpret the terms of the
membership contract or determine its scope on the facts of this case, I decline
from elaborating further on these matters. I simply note that the unique
character and context of this contract, as well as the nature of the questions
in issue, will necessarily inform its construction in any given situation.
50
In my view, the above characterization not only fulfills the practical
purpose of providing a basis from which the terms of the union constitution may
be enforced, but it also serves as an accurate and realistic description of the
nature of union membership. The individual applies for membership with the
union. It is the union, represented by its agents, that accepts the
individual as a member, and this individual agrees to follow the rules of
the union. Aside from the fact that the relationship between the union and
its members fits naturally into the contractual model, in today’s labour
relations context, the public has come to view unions as associations with the
responsibility to discharge their obligations to members; it would be
inconsistent with this view to deny unions the right to enter into legally
enforceable contracts with these members.
51
I emphasize that the above recognition of the legal status of
trade unions does not automatically extend to other unincorporated
associations. The unique status of trade unions is a consequence of the
complex labour relations regime governing their existence and operations. By
statute, labour unions have been endowed with significant powers and
corresponding duties. They are granted the monopoly power to act as the
exclusive bargaining agent for a group of employees, and they have a
corresponding duty to bargain fairly on their behalf. As well, union
membership is often a prerequisite to employment, forcing members to join the
union based on its prescribed terms. By acceding to union membership, the
individual agrees to be bound by the union constitution, the terms of which
will almost inevitably include internal disciplinary provisions in the event of
a breach by the member. In light of the significant powers and duties of the
union vis-à-vis its members, and in particular its ability to enforce the
terms of the membership agreement internally,
it is only logical to hold that the legislature has intended unions to have the
status at common law to sue and be sued in matters relating to their labour
relations functions and operations.
C. Existence of a Contract Inter Se Between
Union Members
52
Given the recognition of the
special form of contractual relationship which exists between a trade union and
each of its members, the question remains whether there is any basis for maintaining
the proposition that there exists a web of contracts between each of the union
members inter se, and, if so, whether this relationship can form the
basis for a breach of contract claim against union members.
53
As discussed above, the idea that union members were joined to each
other through a web of contracts arose as a legal fiction designed by courts as
a way to exert jurisdiction over the internal affairs of a trade union. It
allowed courts to circumvent the lack of legal status of unions and hold unions
liable through the medium of their membership. By characterizing the liability
as that of the group, the execution of the judgment was limited to the assets
of the union.
54
With the acknowledgment of the legal status of unions relating to the fulfilment
of their labour relations role, I agree with the view that the legal fiction of
a web of contracts between members is no longer necessary. A member wishing to
sue his or her union for breach of the constitution is not impeded by a lack of
legal status. Since the underlying problem which led to the establishment of
the fiction has been resolved, in the absence of some compelling reason to
maintain it, the idea that union members are contractually connected to each
other should likewise be abandoned.
55
As an initial matter, I would find it difficult, if not impossible, to
conclude that the traditional indicia of a contract exist between the members
of a union. For example, it stretches the imagination to suppose that each and
every member of a union makes an offer of membership to an individual who then
accepts these various offers, or vice versa, or that there takes place some
mutual exchange of consideration between and among perhaps thousands of
members. This is in contrast with the ease with which the relationship between
the member and the union fits into the contractual model. In my view, it is
simply unrealistic to posit that such a web of contracts exists between union
members. Moreover, I agree with the courts below that it is not within the
reasonable expectations of union members that they could be held personally
liable to other members for breaching the union constitution. As well, the
union constitution does not generally set out obligations which exist between
individuals. It is mainly concerned with the obligations of the individual to
the union (e.g. to pay dues, to participate in job action, etc.) as well as
laying out how the union will be governed and conduct its affairs.
56
The respondents argue that the concept of a contractual relationship
between the members should be maintained and enforced in this case in order to
fill a gap that would otherwise exist in the labour relations scheme. In my
view, there is no gap in this case that needs to be filled; if the appellants
were in fact wronged, there are remedies that were and are available to them
that appear to be fair and reasonable.
57
First, although the Air Canada pilots subsequently left CALPA, at the
time the alleged wrongs were committed, they were still members of CALPA and
internal remedies were available to the Air Ontario pilots. For example,
Article II, s. 7 of the constitution allowed the Board or any MEC to bring a
charge against any member for, among other misdemeanours, a willful violation
of the constitution. As well, by Article VI, s. 1(b), the Board had the power
to intervene in the affairs of an MEC if the Board was of the opinion that the
MEC was contravening the constitution or policies of the union.
58
In addition to these internal procedures, if the appellants were of the
opinion that CALPA was not adequately addressing the alleged misdemeanours by
the Air Canada MEC, the appellants may have been able to bring a complaint
before the CLRB against CALPA for failing in its duty under s. 37 of the Canada
Labour Code , to fairly represent the appellants in the bargaining of
seniority rights. Although the appellants and respondents disagreed on whether
the duty of fair representation was broad enough to encompass this situation,
the essential point here is that the appellants failed to pursue any of these
internal or CLRB procedures. In this connection, the appellants conceded at
trial that there were internal remedies available to them which they elected
not to pursue (para. 92). In addition, aside from the availability of internal
procedures and CLRB proceedings, it is well established that tort claims may
lie between union members, and in this case, the tort actions have been allowed
to proceed.
59
However, apart from the fact that there were and are remedies available
to the appellants in these particular circumstances, on a more general level,
it seems problematic for a court to fill legislative gaps in the labour
relations scheme by contorting what is essentially a contractual metaphor into
a basis for a breach of contract action. Absent an independent basis for
recognizing a breach of contract action between members, the mere argument that
there exists a legislative gap is insufficient justification for transforming
this contractual metaphor, initially created to provide a foundation for
finding group liability, into a concrete basis which allows for personal
liability to exist between union members.
60
On a policy level, if courts were to allow disagreements between union
members to result in claims against their personal assets absent the existence
of an identifiable wrongdoer in breach of some duty, like the required elements
of a tort action, this would have a chilling effect on union democracy. The
importance of the democratic rights of union members, including the right to
dissent, was pointed out in Tippett v. International Typographical Union,
Local 226 (1975), 63 D.L.R. (3d) 522 (B.C.S.C.), at p. 546:
All members of trade unions have the unqualified
right to speak out against the manner in which union affairs are conducted.
There is a right of dissent. There is a right to seek decertification, subject
to the condition that no member of a union shall conspire with his employer to
injure his union. I point out, moreover, that dual unionism is a fact of life
in this Province. No person can be expelled or penalized by a trade union for
insisting on his rights.
Exposing the
personal assets of dissenting union members to liability would be antithetical
to this “unqualified right” of union members to speak out against the agenda of
their bargaining agent. The result would be to discourage member participation
in union affairs and to erode union democracy.
61
As well, I agree with Winkler J. that trade unions would find it
difficult to recruit members or obtain certificates to bargain collectively if
the act of joining a trade union exposed individuals to personal liability in
damages to other members for alleged breaches of provisions of the
constitution. Further, if union members were permitted to bring suit against
other members instead of resorting to internal dispute resolution mechanisms
where breaches of the constitution were alleged, the ability of unions to
resolve internal conflicts would be hindered. This loss of control over
internal affairs would undermine the ability of unions to present a united
front to employers and pursue the collective interests of their members.
62
To summarize, on grounds of both law and policy, I conclude that there
is no contract between union members based on the terms of the union
constitution. In light of the finding that the union itself can be held liable
in breach of contract, there is no need to maintain the “complex of contracts”
model. In addition, to interpret this model so as to allow for personal
liability between union members would be contrary to its purpose and intent and
would have negative consequences on the operation of the labour relations
scheme in this country.
63
However, this is not to say that union members do not have some
obligations inter se. By joining a union, the member agrees to follow
the rules of the union, and, through the common bond of membership, union
members have legal obligations to one another to comply with these rules. If
there is a breach of a member’s constitutional rights, this is a breach by the
union, and the union may be liable to the individual. Similarly, the
disciplinary measures in the constitution can be imposed by the union on a
member who contravenes the union’s rules. A failure by the union to follow
these disciplinary procedures may cause it to breach its contractual
obligations to the other members, giving rise to corresponding contractual
remedies.
64
In addition to potential internal procedures, a failure by the union
to insist on compliance with the constitution or impose disciplinary measures
for its breach may allow members to initiate proceedings either at the Canada
Industrial Relations Board, or the courts, depending on the nature of the
complaint. Aside from actions against the union, a member who is harmed by the
breach of the union’s rules by another member may, if the requisite elements
are present, have an action in tort against that member.
VI. Conclusion
65
For these reasons, I would dismiss the appeal with costs.
Appeal dismissed with costs.
Solicitors for the appellants: Borden Ladner Gervais,
Toronto; Faculty of Law, University of British Columbia, Vancouver.
Solicitors for the respondents Chris Pulley, Tom Fraser, Lars T.
Jensen and James Griffith: Nelligan O’Brien Payne, Ottawa.
Solicitors for the respondent Kent Hardisty: Shell
Jacobs, Toronto.
Solicitors for the intervener: Baigent & Jackson,
Enderby, B.C.