Via Rail Canada Inc. v. Cairns, 2001 FCA 133

Date: 20010502

Docket: A-369-00

A-749-99

                                                                                                                Neutral citation: 2001 FCA 133

CORAM:           STRAYER J.A.

SEXTON J.A.

SHARLOW J.A.

BETWEEN:

                                                          VIA RAIL CANADA INC.

Applicant

-and-

GEORGE CAIRNS

Respondent

                                                                          -and-

INTERNATIONAL BROTHERHOOD OF

LOCOMOTIVE ENGINEERS

Respondent

-and-

UNITED TRANSPORTATION UNION

Respondent

-and-

CANADA INDUSTRIAL RELATIONS BOARD

Intervener

Docket: A-747-99

between:

INTERNATIONAL BROTHERHOOD OF

LOCOMOTIVE ENGINEERS

Applicant

-and-

GEORGE CAIRNS

Respondent

                                                                          -and-

VIA RAIL CANADA INC.

Respondent

-and-

UNITED TRANSPORTATION UNION

Respondent

-and-

CANADA INDUSTRIAL RELATIONS BOARD

Intervener

Heard at Ottawa, Ontario, March 21 and 22, 2001

Judgment rendered at Ottawa, Ontario, on Tuesday, May 2, 2001

REASONS FOR JUDGMENT BY:                                                                                        SEXTON J.A.

CONCURRED IN BY:                                                                                                STRAYER J.A.

                                                                                                                                  SHARLOW J.A.

Date: 20010502

Docket: A-369-00

A-749-99

                                                                                                            Neutral citation: 2001 FCA 133

CORAM:        STRAYER J.A.

SEXTON J.A.

SHARLOW J.A.

BETWEEN:

                                                        VIA RAIL CANADA INC.

Applicant

-and-

GEORGE CAIRNS

Respondent

                                                                          -and-

INTERNATIONAL BROTHERHOOD OF

LOCOMOTIVE ENGINEERS

Respondent

-and-

UNITED TRANSPORTATION UNION

Respondent

-and-

CANADA INDUSTRIAL RELATIONS BOARD

Intervener

Docket: A-747-99

BETWEEN:

INTERNATIONAL BROTHERHOOD OF

LOCOMOTIVE ENGINEERS

Applicant

-and-

GEORGE CAIRNS

Respondent

                                                                          -and-

VIA RAIL CANADA INC.

Respondent

-and-

                                            UNITED TRANSPORTATION UNION

Respondent

-and-

CANADA INDUSTRIAL RELATIONS BOARD

Intervener

REASONS FOR JUDGMENT

SEXTON J.A.

Introduction

[1]                These three related applications for judicial review of decisions of the Canada Industrial Relations Board ("CIRB") raise two important issues: does the duty of fair representation owed by a union to its members extend to its approach to collective bargaining after the expiry of a preceding collective agreement; and, if it does, are the Board's remedial powers broad enough to require a union and employer to reopen certain aspects of the agreement arrived at in the event that the union has failed in its duty of fair representation. These reasons apply to all three applications.

Facts

[2]                    Traditionally, Canadian railway employees in the "running trades" - those engaged in the on-board operation of trains - were grouped, for purposes of collective bargaining, into two broad categories: locomotive engineers and conductors.^[1]    For decades, these bargaining units were represented by different bargaining agents; the engineers by the International Brotherhood of Locomotive Engineers (the "BLE") and the conductors by the United Transportation Union (the "UTU"). They were each party to a series of collective agreements and other arrangements negotiated with the Canadian Pacific Railway (CP), Canadian National Railway (CN), and their successor in providing passenger services, VIA Rail. Among these arrangements were special transfer agreements involving VIA, CN (from which most of VIA's running trades employees had transferred) and each of the unions. These two agreements allowed VIA employees in the running trades to retain their seniority rights at CN and vice versa. Thus, engineers and conductors could bid for vacant positions at both VIA and CN and "flow" back and forth between the other with no loss of seniority.

[3]                In 1997, VIA initiated a "crewing initiative" (also referred to in some documents as the New Era Passenger Operations or "NEPO" initiative) whereby it proposed to reclassify the running trades by consolidating the duties of the locomotive engineer trade with most of the duties of the conductor trades into a new classification of "operating engineer."^[2]    The goal of the initiative was to eliminate up to 250 operating positions and save up to $15 million annually.

[4]                In March, 1997, VIA informed the bargaining units of its intention by providing them with material change notices required by the collective agreements then in place.^[3] Simultaneously, it applied to the Canadian Labour Relations Board (the "CLRB" - predecessor of the CIRB) for a review of the certification of the two separate bargaining units and an order merging them.    The Board held hearings on the matter.

[5]                During those hearings, a number of potential problems with the merger of the bargaining units became evident. The most important of these were related to the impact of the consolidation (of both positions and bargaining units) upon the conductors, who were to be a minority in the merged bargaining unit, albeit by a narrow margin. Specifically, while all engineers were qualified to perform the functions of the "operating engineer" classification with only minimal additional training, only a small percentage of the conductors were in a similar situation. The remainder would require significant training.

[6]                The Board, recognizing VIA's right to decide to consolidate duties and finding that a single bargaining unit for running trades employees was appropriate, allowed the merger of the two units and ordered that a representation vote be held to determine which of the two unions would represent the new unit. In doing so, it seems to have understood the difficulties and accepted that the parties would be able to resolve them:

Whatever the outcome of the vote in this matter, the employer, the successful trade union and many of the employees will be placed in difficult positions, and negotiations between the employer and the successful trade union (which will then be representing many employees whose qualifications to perform the functions of the combined classification of "operating engineer" differ) will necessarily be difficult and delicate. It is important to note that the employer has recognized that significant and expensive training - in particular, training of many conductors to carry out the tasks of engineers - will be required in order to ensure, in as much as this is possible, that members of both groups of affected employees will be afforded comparable employment opportunities.^[4]

[7]                The result of the representation vote was along trade lines, with the BLE winning 286-260.   

[8]                The Board certified the BLE as bargaining agent for the new, merged bargaining unit on October 31, 1997. The BLE was thereby substituted for the UTU as a party to the collective agreement under which the conductors were employed by VIA.^[5]    It was thus faced with the task of negotiating with VIA with respect to both the material changes to the two existing collective agreements and with respect to the terms of a new collective agreement for the merged unit. VIA had given notice to both the BLE and UTU to bargain collectively on October 1, 1997 and had renewed its notice following the merger. Although material changes are usually negotiated outside the collective bargaining process, and can be dealt with through binding arbitration or even strike action, the BLE chose to negotiate the material changes during the collective bargaining process.

[9]                The BLE negotiating committee represented the contractual concerns of the conductors by forwarding an additional list of demands to VIA and appointing a subcommittee of three conductors to assist them. This subcommittee's major role seems to have been in advising the negotiating committee with respect to the numbers of conductors interested in the various career options (apply for selection for engineer training, pension, severance, return to CN, etc.).^[6]

[10]            The negotiations were difficult and no agreement had been reached when the existing collective agreements expired on December 31, 1997. An attempt at conciliation was unsuccessful. VIA attempted to impose the crewing initiative unilaterally in April, 1998, only to have the CLRB hold that the essential content of the expired collective agreements (including crewing arrangements) remained in operation by virtue of a statutory "freeze" imposed by s. 50(b) of the Labour Code and that VIA's action amounted to an illegal lock-out.^[7] Eventually, in June, 1998, the parties reached a tentative agreement, including an appended Crew Consist Adjustment Agreement (the "CCAA") which set out the manner in which the crewing initiative would be implemented.

[11]            The CCAA was, for all intents and purposes, identical to the terms that VIA had attempted to impose unilaterally in April, 1998. It provided for an increase in pay for locomotive engineers, in recognition of the additional duties and responsibilities to be imposed upon them.^[8] Those employees previously qualified as locomotive engineers retained their seniority under the previous collective agreement.

[12]               To "minimize the adverse effects" of the consolidation of positions upon the conductors, the CCAA provided for the development of a locomotive engineer training program. Conductors could apply to be selected by the employer for training under this program. Successful trainees would be granted seniority as of October 31, 1997. They would then be eligible to compete for VIA engineer positions on a seniority basis. Thus, with the exception of a brief "waiver" period , the former conductors would receive lower priority for vacant VIA engineer positions than the previously-qualified engineers as well as the 1,500 engineers employed by CN who were eligible to "bid" for positions at VIA by virtue of the 1987 transfer agreement between VIA, CN and the BLE.^[9]    The CCAA also gave conductors a number of other career options, including voluntary retirement, a severance payment or, for those conductors who had transferred to VIA from CN, return to CN under the terms of a different 1987 transfer agreement negotiated by VIA, CN and the UTU.^[10]

[13]            The tentative agreement was ratified by a majority of the new bargaining unit, again, roughly along previous trade lines, although by a much wider margin.^[11] The CCAA went into effect in July, 1998. The agreement seems to have had a significant impact upon the former conductors. Relatively few were selected for locomotive engineer training.^[12] Most were forced to return to CN or to retire against their will.

Procedural History

[14]             The individual respondents in the present application were conductors at VIA. They complained to the CIRB that the BLE had violated s. 37 of the Canada Labour Code (the "Code") by acting in a manner that was arbitrary, discriminatory or in bad faith in representing them. The focus of their attack was upon the CCAA negotiated by the BLE and VIA. The specific allegations that are relevant to the present application were with respect to:

1.              The requirement that conductors be selected for training as engineers rather than being automatically eligible;

2.            The loss of seniority rights due to the adoption of a "bottom down" seniority list for re-trained conductors; and

3.            The agreement that conductors would be eligible to "flow back" to CN without first ascertaining whether CN would allow such transfers.

Original Decision

[15]            The panel hearing the matter was composed of a single Vice-Chairperson. The Board added VIA as a party to the complaint since its interests could be affected by the outcome of the complaint. It also granted the UTU status as an interested party.

[16]            The Board held that it had jurisdiction to consider the complaint. The Board noted that while there was nothing unlawful about a union favouring one group of employees over another, it nonetheless has a duty to achieve a certain fairness between the groups. In this case, however:

The benefits obtained on behalf of the conductors and assistant conductors, which [were] for the most part directed at terminating their employment, pale[d] in comparison to the generous benefits obtained for the locomotive engineers.^[13]

[17]            The Board held that the BLE had failed to act objectively and responsibly with respect to the concerns of the conductors and that it had failed to protect their job security and seniority interests.

[18]            To remedy the situation, the Board ordered that VIA and the BLE reopen negotiation of the CCAA with respect to:

1.              the selection process for conductors and assistant conductors;

2.              seniority provisions as they affect conductors and assistant conductors who qualify as locomotive engineers; and

3.              the application of the transfer agreement negotiated between the UTU, VIA and CN.

In preparation for these negotiations, the BLE was required to hire, in consultation with the conductors, a professional to assist it in designing and executing a consultative process to determine the interests of the conductors and to represent them in the reopened negotiations on an equal basis with BLE representatives.

[19]            Both BLE and VIA asked the Board to reconsider its decision and each sought judicial review in this Court.^[14] In the interim, they sought a stay of the Board's order. The Board refused to grant a stay. However, on January 17, 2000, this Court ordered that the Board's decision be stayed pending the outcome of the applications for judicial review. As a result of the adjournment of those applications on May 8, 2000, that stay has remained in effect up to the present time.

The Reconsideration Decision

[20]            The application for reconsideration was considered by a panel of three members of the Board.    The Board considered the following issues:

1.              Were the two applicants' natural justice rights obstructed by the Board's alleged preliminary rulings concerning the nature of the evidence to be presented at the hearing and concerning the standing conferred upon the employer;

2.              Did the Board err in law and exceed its jurisdiction in its application of section 37 of the Code to the negotiation of the Crew Consist Adjustment Agreement; and

3.              Did the Board err in law and exceed its jurisdiction in the remedy it provided by ordering the said agreement to be reopened?

[21]            With respect to the second issue, the Board undertook an extensive review of the manner in which it and its predecessor, the CLRB, had interpreted s. 37. It rejected the view that the wording of the provision precluded the Board from considering issues arising from negotiations for a collective agreement. Considering the circumstances of the case before it, where the essential rights contained in the previous (and expired) collective agreements had been held to continue in force by virtue of s. 50 of the Code, the Board held that interpreting s. 37 so as to prohibit any inquiry into the termination of those rights by the negotiation of a new agreement would be inconsistent with a reasonable interpretation of that provision.

[22]            The Board found that the evidence supported the original panel's finding that the BLE had failed to fulfil its duty of fair representation.^[15] It held that the remedy was both rationally connected to the breach and consistent with the policy objectives of the statute.

[23]            With respect to the natural justice issue, the reconsideration panel reviewed the transcripts of the original hearings. It held that, notwithstanding their allegation to the contrary, the applicants had not been denied the opportunity to present evidence that might have resulted in different findings. However, recognizing that the union and employer had, in good faith, misinterpreted the Board's remarks on the subject of their ability to lead evidence, the Board remitted the matter to the original panel to provide them with further opportunities to present evidence.

[24]            VIA Rail sought judicial review of this decision. It is supported, in part, by the BLE.

Further Developments

[25]            The re-hearing ordered by the reconsideration panel was held in September, 2000 with the BLE presenting the evidence of one witness. VIA did not present any evidence. In reasons released on March 13, 2001, the Board noted that the new evidence showed that the collective agreement was ratified by a wider majority than previously thought. In any event, survey evidence filed by the BLE highlighted the fact that the BLE appeared to have premised its approach to collective bargaining on the assumption that the conductors would not be integrated but rather eliminated. The Board concluded that:

... the simple knowledge that there was a greater majority support does not translate into establishing that the BLE had thereby fulfilled its duty of fair representation to all members of the newly merged group. In fact, the evidence still points to the fact that the interests of the locomotive engineers were preferred and protected over the interests of the conductors. While the evidence shows that some efforts were made, such efforts were focussed on attempting to improve the compensation and benefits for the conductors who were forced out, rather than on attempting to save their positions. The Board is not persuaded by the evidence heard that its original findings should be reversed. ^[16]

Relevant Legislation

[26] Canada Labour Code^[17]

Issues

[27]            The only two issues addressed by the parties before this Court were:

1.              Does the duty of fair representation codified in s. 37 of the Labour Code extend to collective bargaining during a statutory freeze period following the expiry of a previous collective agreement; and

2.              Does subs. 99(2) of the Labour Code grant the Board the authority to fashion the remedies that it ordered.

Analysis

Scope of the Duty of Fair Representation

Standard of Review

[28]            The central inquiry in determining the standard by which a Court will review decisions of administrative actors such as the CIRB is whether the ultimate decision was one which Parliament intended to be left to the Board.^[18] The Supreme Court's decisions from U.E.S., Local 298 v. Bibeault^[19] to Pushpanathan v. Canada(Minister of Citizenship and Immigration)^[20] have articulated and developed a "pragmatic and functional" approach to carrying out this inquiry. InPushpanathan, the Court summarized its recent jurisprudence, dividing the factors to be considered into four classes: the existence and wording of a privative clause, the relative expertise of the decision-maker, the purpose of the Act as a whole and the relevant provision in particular and the nature of the problem to be decided.^[21] All of the factors must be considered together. No single factor is determinative.

[29]            The presence of a "full" privative clause - "one that declares that decisions of the tribunal are final and conclusive from which no appeal lies and all forms of judicial review are excluded"^[22] - provides a powerful indication that the Court ought to show deference to a tribunal's decision. Decisions of the Canada Industrial Relations Board are protected by the same "clear and strongly worded"^[23] privative clause that protected the decisions of its predecessor. Section 22 is a full privative clause. Its effect is to insulate CIRB decisions from review except upon grounds of fraud, jurisdictional error or violation of the rules of natural justice.^[24]

[30]            The second factor to consider is the expertise of the Board in relation to that of the Court. The CIRB has been entrusted by Parliament to administer a highly complex labour relations structure which seeks to balance the interests of employers, unions and employees so as to maintain labour peace. As Cory J. commented:

It has often been very properly recognized that labour relations boards exemplify a highly specialized type of administrative tribunal. Their members are experts in administrating comprehensive labour statutes which regulate the difficult and often volatile field of labour relations. Through their constant work in this sensitive area, labour boards develop the special experience, skill and understanding needed to resolve the complex problems of labour relations.^[25]

[31]            The courts have recognized the role given by Parliament to the Board in applying its expertise so as to administer the provisions of the Labour Code. As Iacobucci J. has noted:

The Canada Labour Relations Board must develop a coherent and workable structure for the application of the numerous statutory provisions which govern the labour relations of the employers and employees whose operations fall within federal jurisdiction. In order for these workers and their employers to receive rapid resolution of their disputes in a manner which can be rationalized with their other rights and duties under the Canada Labour Code, the decisions of the Board cannot routinely be overturned by the courts whenever they disagree with the Board's treatment of an isolated issue.^[26]

[32]            In contrast, the expertise of the judiciary with respect to the issues in most labour disputes is more limited. LaForest J. wrote that:

Our experience with labour relations has shown that the courts, as a general rule, are not the best arbiters of disputes which arise from time to time. Labour legislation has recognized this fact and has created other procedures and other tribunals for the more expeditious and efficient settlement of labour problems. Problems arising in labour matters frequently involve more than legal questions. Political, social, and economic questions frequently dominate in labour disputes. The legislative creation of ... labour relations boards, and labour dispute-resolving tribunals, has gone far in meeting needs not attainable in the court system. The nature of labour disputes and grievances and the other problems arising in labour matters dictates that special procedures outside the ordinary court system must be employed in their resolution. Judges do not have the expert knowledge always helpful and sometimes necessary in the resolution of labour problems. ... In my view, it is scarcely contested that specialized labour tribunals are better suited than courts for resolving labour problems, except for the resolution of purely legal questions.^[27]

[33]            The third class of factors set out in Pushpanathan addresses the purposes of the statute and the particular provision at issue. The relevant purposes of the Labour Code can best be derived from its preamble:

Whereas there is a long tradition in Canada of labour legislation and policy designed for the promotion of the common well-being through the encouragement of free collective bargaining and the constructive settlement of disputes;

...

And Whereas the Parliament of Canada desires to continue and extend its support to labour and management in their cooperative efforts to develop good relations and constructive collective bargaining practices, and deems the development of good industrial relations to be in the best interests of Canada in ensuring a just share of the fruits of progress to all

...

[34]            While recognizing and supporting free collective bargaining as the best way of ensuring that both employers and employees receive a "just share of the fruits of progress," Parliament has also recognized the power of the union as sole bargaining agent for its members and has acted to make bargaining agents accountable for the manner in which they represent the interests of their members. Thus, s. 37 imposes upon the union a duty to represent its members fairly - in a manner that is not arbitrary, discriminatory or in bad faith. This duty is not unlimited. Rather, in keeping with the purposes and objectives of the Code, it limits the duty to that area where the union might most easily abuse its monopoly over bargaining with the employer - the representation with respect to the employees' rights under the collective agreement that is applicable to them.

[35]            The main area of disagreement between the parties is with respect to the final factor listed in Pushpanathan - the nature of the question before the Board.    There is no dispute that the question is one of interpretation of s. 37. VIA and the BLE characterize the question as whether, under the circumstances, the Board could consider a complaint about the manner in which a union represented its members during collective bargaining. This, they say, was a "jurisdictional question" that is to be reviewed on a correctness basis. The other parties argue that the interpretation of s. 37 and determination of whether the scope of the duty of fair representation extends to capture the particular circumstances of the complaint before it is a matter squarely within the jurisdiction of the Board and should be reviewed on a patent unreasonableness basis.

[36]            Recent Supreme Court jurisprudence seems to establish that the characterization of a question as "jurisdictional" as an initial step of analysis is not particularly helpful to the determination of the appropriate standard of review. Bastarache J., writing for the majority of the Supreme Court, recently addressed this point directly:

Although the language and approach of the "preliminary", "collateral" or "jurisdictional" question has been replaced by this pragmatic and functional approach, the focus of the inquiry is still on the particular, individual provision being invoked and interpreted by the tribunal. Some provisions within the same Act may require greater curial deference than others, depending on the factors which will be described in more detail below. To this extent, it is still appropriate and helpful to speak of "jurisdictional questions" which must be answered correctly by the tribunal in order to be acting intra vires. But it should be understood that a question which "goes to jurisdiction" is simply descriptive of a provision for which the proper standard of review is correctness, based upon the outcome of the pragmatic and functional analysis. In other words, "jurisdictional error" is simply an error on an issue with respect to which, according to the outcome of the pragmatic and functional analysis, the tribunal must make a correct interpretation and to which no deference will be shown.[emphasis added]^[28]

Indeed, as Professor MacLauchlan recently summarized, "The new functional approach suggests that the jurisdictional principle should fade into the background."^[29]

[37]            The Board, in interpreting s. 37, was required to take a broad and contextual approach. The determination of the meaning of legislation "in its total context, having regard to the purpose of the legislation, the consequences of proposed interpretations, the presumptions and special rules of interpretation, as well as admissible external aids,"^[30] is a task for which the courts are generally well-suited. However, the complexity of the labour relations regime embodied in the Code adds an additional element that the Court may be less equipped to deal with. In the context of a comprehensive statutory scheme that seeks to balance the interests of employees, their unions and employers, the implications of a particular interpretation might not be immediately clear to a decision-maker with less specialized experience and knowledge than the Board. This is particularly so in a situation such as the one at bar, where the factual circumstances require that the decision-maker have regard to a number of other provisions of the Code.

[38]            Thus, having completed a pragmatic and functional analysis of all of the relevant factors, I find that the appropriate standard of review with respect to the Board's interpretation of s. 37 is that of patent unreasonableness. In doing so, I adopt the reasoning of McLachlin J., as she then was, writing for the majority of the Supreme Court in W.W. Lester (1978) Ltd. v. United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, Local 740,^[31] a case that involved review of a decision of the Labour Relations Board of Newfoundland. In summarizing her analysis of the issue of standard of review, she wrote:

Courts should exercise caution and deference in reviewing the decisions of specialized administrative tribunals, such as the Labour Board in this case. This deference extends both to the determination of the facts and the interpretation of the law. Only where the evidence, viewed reasonably, is incapable of supporting a tribunal's findings of fact, or where the interpretation placed on the legislation is patently unreasonable, can the court interfere.^[32]

[39]            I turn, then, to an analysis of whether the Board's interpretation of s. 37 was patently unreasonable.

The Board's Interpretation

[40]            Section 37 of the Code codifies the union's duty of fair representation. The critical portion of the enactment, for the purposes of this case, is that which limits the duty to the union's representation of any of its employees "with respect to their rights under the collective agreement that is applicable to them." The French version of the text similarly restricts the duty to the employees' "... exercice des droits reconnus à ceux-ci par la convention collective." The Board held that, in the circumstances of this case, where the previous collective agreement had expired but where the "term[s] or condition[s] of employment or any right or privilege" of the conductors were protected by a statutory "freeze" provision, this restriction did not relieve the union of its duty of fair representation when bargaining collectively.

[41]            The question, then, is whether the Board, in finding that the freeze provisions of s. 50(b) gave the conductors "rights under the collective agreement that [was] applicable to them," interpreted s. 37 in a manner so patently unreasonable that its construction cannot be rationally supported by the relevant legislation.^[33]

[42]            The BLE and VIA attack the Board's interpretation on a number of grounds. They assert that s. 37's legislative history indicates Parliament's intention to restrain unions from acting in a manner that is arbitrary, discriminatory or in bad faith in representing its members only with respect to administration of a collective agreement and not with respect to its negotiation. They say that the CLRB recognized this intention in a series of decisions rendered shortly after the current wording of the provision came into force, only to improperly extend its reach in subsequent decisions. In any event, they argue that the union's duty under s. 37 can only apply during the currency of a collective agreement.    Pressed as to how the union can be made accountable for the manner in which it represents its members' rights under the collective agreement that is applicable to them following the expiry of a collective agreement, they suggest that a common law duty might fill the void left by their interpretation or that an employee might make a complaint against the union for bargaining in bad faith.

[43]            Since I am only concerned with whether or not the Board's interpretation was patently unreasonable, I will approach the matter in the manner proposed by La Forest J. in Paccar:

The tribunal has the right to make errors, even serious ones, provided it does not act in a manner "so patently unreasonable that its construction cannot be rationally supported by the relevant legislation and demands intervention by the court upon review". The test for review is a "severe test"... This restricted scope of review requires the courts to adopt a posture of deference to the decisions of the tribunal. Curial deference is more than just a fiction courts resort to when they are in agreement with the decisions of the tribunal. Mere disagreement with the result arrived at by the tribunal does not make that result "patently unreasonable". The courts must be careful to focus their inquiry on the existence of a rational basis for the decision of the tribunal, and not on their agreement with it. The emphasis should be not so much on what result the tribunal has arrived at, but on how the tribunal arrived at that result. Privative clauses ... are permissible exercises of legislative authority and, to the extent that they restrict the scope of curial review within their constitutional jurisdiction, the Court should respect that limitation and defer to the Board. [emphasis added]^[34]

Thus, I will focus upon the manner in which the Board arrived at its interpretation.

[44]            Prior to 1985, the duty of fair representation was codified in the following words:

Where a trade union is the bargaining agent for a bargaining unit, the trade union and every representative of the trade union shall represent, fairly and without discrimination all employees in the bargaining unit.^[35]

[45]            The section was amended in July, 1985. It has remained unchanged since.

A trade union or representative of a trade union that is the bargaining agent for a bargaining unit shall not act in a manner that is arbitrary, discriminatory or in bad faith in the representation of any of the employees in the unit with respect to their rights under the collective agreement that is applicable to them.

[46]            Shortly thereafter, the CLRB considered the new wording of the provision. In the case of George Parsley,^[36] a complaint involving renewal of a collective agreement where no statutory freeze was in effect, the Board commented:

In dealing with the phrase 'the collective agreement,' it is the view of the Board that the phrase presupposes the existence of a collective agreement and, when used in conjunction with the word 'applicable,' it presupposes the existence of a collective agreement that is, at the appropriate time, already applicable to the employees in the bargaining unit. Further it is the view of the Board that the use of the word 'rights' must deal with those matters contained in a duly negotiated collective agreement; that is, in order for an employee to have 'rights' under the collective agreement, there must already be a collective agreement in effect. ... As a result, when section 136.1 [now s. 37] talks about the rights under the collective agreement, the Board concludes that what the legislator intended, and in fact passed into law, was that the section deal with an existing collective agreement, one that has already been negotiated and not one which is the subject of negotiations. As a result, the Board concludes that section [37], as currently drafted, does not permit the Board to deal with a complaint arising directly from the negotiation of a collective agreement. Effectively what it does, in the view of the Board, is to restrict its application to matters which arise from the administration, as opposed to the negotiation of the collective agreement. ...

[47]            Not long afterward however, under different factual circumstances, the Board took a more nuanced approach to the provision, holding that the duty of fair representation did extend to negotiations related to rights under a collective agreement during the life of that agreement.

... It is clear that what was intended by Parliament was to ensure that a collective agreement negotiated freely between the parties would not be put at risk by a section [37] complaint; what the legislators were intending to protect was the integrity of the collective bargaining process.

There had to be some assurance that a freely negotiated collective agreement applying to a bargaining agent and an employer could not be annulled by a section [37] complaint.

In the instant case, where the negotiations resulted in the currency of a collective agreement, that same risk does not exist. Should the Board find a violation of section [37] with regard to the negotiation of the Memorandum [of agreement], all that is at risk is the Memorandum itself. The status quo, that is the collective agreement as originally negotiated, would continue to remain in full force and effect until its expiry. The danger of the Board annulling the whole of the collective agreement does not exist.

It is our determination that mid-term collective bargaining, which does not put at risk the whole of the collective agreement, does not benefit from the exception under section [37] and the Board is empowered to find that a violation of section [37] has resulted from said negotiations, although no such finding was made in this case.^[37]

[48]            The Board revisited the interpretation of s. 37 the following year in Peter Reynolds et. al.^[38] After reviewing its post-1985 comments on the issue, it made the following statements:

It seems to us that the rationale behind the Parsley and the Harris decisions is basically sound considering what Parliament was attempting to legislate, i.e., to avoid collective agreements being placed in jeopardy via proceedings before the Board under section [37]. The Harris decision is a sensible step away from the broad assertion made in the Parsley decision and the other decisions which followed to the effect that negotiations in general have been removed from the ambit of section [37]. Having said that, however, we are only too well aware that the present construction of section [37] is open for a broader interpretation than given in Parsley and Harris. To rely upon the words, "in the representation of any of the employees in the unit with respect to their rights under the collective agreement that is applicable to them," to remove negotiations from the scope of section [37] is to skate on pretty thin ice. Every time a bargaining agent sits down at a bargaining table it is representing the employees in the bargaining unit. A compelling argument could therefore be made that only negotiations for a first collective agreement have been excluded. Once employee rights have been established in a first collective agreement it is not a big step to construe that thereafter a bargaining agent is representing employees in the bargaining unit, "with respect to their rights under the collective agreement that is applicable to them," each time those rights are up for renewal. More often than not collective agreements themselves provide that they continue in effect while negotiations are proceeding for their renewal. ... It is not uncommon then for negotiations to be going on while the collective agreement is still in effect. It requires a very narrow interpretation of the wording of section [37] to say that in those circumstances the bargaining agent is not representing the employees in the bargaining unit with respect to their rights under the collective agreement that is applicable to them.

...

We have no wish to stray any further than we have from the issues before us but we do feel obliged to make one brief comment on one aspect of the Parsley decision ... The comment is in regard to the inference which may be drawn from the Parsley decision that a collective agreement must be in effect before section [37] can be operative. We are sure that the panel in that case did not intend to say that [,] but throughout the paragraphs of that decision ...we note the use of phrases such as "in order for an employee to have 'rights' under the collective agreement, there must already be a collective agreement in effect," and "was that the section deal with an existing collective agreement, one that has already been negotiated and not one which is the subject of negotiations." In case those comments are construed to mean that a collective agreement must be in effect before section [37] can be operative, we would like to dispel that notion.

If an existing collective agreement was a requirement the converse would then be that the duty of fair representation would not apply, even to the administration of a collective agreement once the collective agreement has terminated. That is not so, the obligation continues for a bargaining agent to represent employees in grievance-arbitration proceedings even when the collective agreement has technically terminated.

[49]            Thus, the CLRB, as the full implications of various interpretations of what is now s. 37 became clear, moved beyond its initial narrow interpretation of the provision to a more contextual one.    The CIRB, in the reconsideration decision reviewed this approach and referred specifically to the importance of interpreting s. 37 within the context of the Code and the values it represents:

In many cases the protection of the negotiation process may be the determinative value. But it is not the only value in the Code and the words of section 37 must be interpreted in the context of other applicable provisions as they are understood in consideration of the realities of industrial relations...^[39]

[50]            The Board went on to consider the meaning to be given s. 37 in the context of the complaint before it:

It is important that in the present matter, the Board take care to ensure that section 37 is given meaning in its statutory context, in consideration of the facts of the present case and industrial relations considerations. In VIA Rail Canada Inc. [(1998),107 di 92] the CLRB noted that while the collective agreement had technically expired, its essential content continued in force pursuant to the freeze provisions of the Code until effective negotiations to resolve the very outstanding issues now in dispute had been concluded. It is very doubtful, if in these circumstances, and in the context of the other relevant statutory provisions, including section 50 of the Code, the Board's concern about the ensuing negotiations could ever be reasonably construed as a concern with the negotiation of an agreement outside of the Board's proper jurisdiction. Importantly, on the evidence now before the reconsideration panel, it is impossible to conclude that the anticipated effective negotiations have occurred. On this basis alone, this aspect of the request for reconsideration should be refused.

The reconsideration panel is, nevertheless, also of the view that the decision of the initial panel in the instant case is in keeping with the appropriate interpretation to be given to section 37 of the Code. Workplace relationships in federal industries in Canada are generally, at the present time, founded on the expectation that the rights under applicable collective agreements are of a continuing nature. The notion that seniority rights, essential working conditions, the right to employment and other rights of minority employees already in existence under one collective agreement could be arbitrarily and conclusively terminated by a collective agreement supported by a narrow majority and that any inquiry by the Board as to whether this was done fairly would be prohibited by section 37's wording appears to this Board to be inconsistent with a reasonable interpretation of that section of the Code in the light of its statutory context as is indicated by the authorities cited above. The present Board does not feel that it can apply the present Code in a manner to so limit its jurisdiction on the basis of the text of section 37 in its statutory context. The argument on authority that the Board should so limit its jurisdiction appears therefore to the reconsideration panel to be without merit as the authorities do not appear to provide the unequivocal support contended for such a position. More importantly, it appears that no such intention to limit the scope of the Board's inquiry is manifest in the text of the section itself. ^[40]

[51]            In my opinion, the interpretation of s. 37 adopted by the Board in this case was not patently unreasonable.

[52]            Section 37 imposes upon a union a duty to fairly represent its members in the representation of the rights that they have acquired by virtue of the collective agreement that is applicable to them. This does not necessarily relieve the union from such a duty outside the term of a collective agreement. Indeed, once notice of collective bargaining has been given, the terms or conditions of employment or any right or privilege of the employees in a bargaining unit are frozen by subs. 50(b) until the parties gain the right to strike or lockout in accordance with s. 89. The statutory freeze would have no meaning unless those terms, conditions, rights or privileges which are its object have a source. That source is the former collective agreement. Thus, the union has a duty, during a freeze period, to fairly represent its members with respect to the terms, conditions, rights or privileges that are protected from alteration by subs. 50(b).

[53]            I have no doubt that the duty of fair representation extends to the administration of the frozen matters. The question is whether this duty can extend to the union's actions during collective bargaining that takes place during the freeze period.

[54]            VIA and the BLE argue that extending the duty of fair representation to collective bargaining offends the principle of free collective bargaining. They argue that such an extension would destroy the necessary give and take of contract negotiations by restraining the union from bargaining away any existing rights. I disagree. The existence of a duty of fair representation does not preclude a union from making concessions with respect to existing rights or privileges of its members in order as part of the bargaining process. What it does do, is to require that the union, in making those concessions not act in a manner that is arbitrary, discriminatory or in bad faith during the collective bargaining process.

[55]            To hold otherwise would be to allow a union to simply put off dealing with controversial matters such as the crewing initiative in this case, so as to address them with the employer during collective bargaining instead of during the term of the collective agreement. While dealing with the matters during the term of the collective agreement would give rise to a duty under s. 37, delaying negotiations would shelter the union from scrutiny under s. 37. In my opinion, an interpretation that allowed such a result would be irrational and absurd.

The Board's Remedy

[56]                In light of my finding that the Board's interpretation of s.37 was not patently unreasonable, it is necessary for me to consider the order devised to remedy the contravention of the Code by the BLE.

Standard of Review

[57]            In deciding upon the appropriate standard by which to review the Board's remedial order, I base my analysis upon the discussion at paragraphs 29 to 40 of these reasons, to the extent that that discussion deals with the Code's privative clause, the Board's expertise and the purposes of the Code. The Board's remedial order was an equitable one, fashioned under the authority of subs. 99(2) of the Code. The Board's authority under that provision is exceptionally broad. The impact of exceptionally broad authority granted to the Board under that provision was discussed. in Royal Oak Mines v. Canada (Labour Relations Board),^[41] a case involving a remedy that encroached upon the principle of free collective bargaining. Writing for the majority, and in the context of a pragmatic and functional analysis of the provision, Cory J. held:

The breadth of the remedial section gives a clear indication that it was the intention of Parliament that the Board should be given the necessary flexibility to fashion remedies which will best address the entire spectrum of problems and of factual situations which it must confront. It is noteworthy that the section was amended in 1978. Prior to that date, the Code allowed the Board to impose only those remedies which were specifically enumerated. Section 189 (now s. 99(2)) was added in 1978. This provision authorizes the Board to make orders based on the principles of equity. The section now gives the Board both the flexibility and the authority to create the innovative remedies which are needed to counteract breaches of the Code and to fulfil its purposes and objectives. The granting of such a broad discretion to the Board demonstrates that Parliament wished the courts to defer to the Board's experience and expertise in making remedial orders so long as they were not patently unreasonable.^[42]

[58]            In the circumstances of this case, the Board's order will only be patently unreasonable if there was no rational connection between the breach, its consequences and the remedy or if the remedy was inconsistent with the objects or policy of the Code.^[43]

[59]            In my opinion, the Board's order was rationally connected to the union's breach and to its consequences. The Board found that the BLE had failed to represent the conductors fairly with respect to three specific matters dealt with in the CCAA. It was only with respect to those matters that new negotiations were ordered. The Board found that the union's breaches were the result of its failure to determine or consider the interests of the conductors during the process of negotiating the CCAA. It ordered the BLE to design a process to consult with the conductors and to hire a professional who would have an equal voice with the locomotive engineers' representative during negotiations. These measures were a rational and proportional response to the contraventions of the BLE.

[60]            I am unable to conceive of any more appropriate remedy, nor were VIA or the BLE able to propose one. It is true that the order will have an impact upon VIA, even though there was no finding of any contravention of the Code on its part. However, this impact is a necessary and inevitable result of the Board's finding against the BLE. The employer was made a party to the original complaint, and permitted to make submissions before the Board, at least in part due to the recognition that its interests might be impacted by the any eventual order.

[61]            The reasoning process engaged in by the Board in determining the scope of the union's duty under s. 37 and in deciding if the duty had, in fact, been complied with, demonstrate conclusively that the Board had in mind the objects and policy of the Labour Code. The Board carefully reviewed its previous approach to the section. It considered other, related provisions, such as s. 50. It considered the implications of various interpretations of s. 37 in light of the continuing nature of rights under collective agreements. I believe that the resulting order is wholly consistent with the Code's purpose of balancing the encouragement of free collective bargaining with the protection of employees who are represented by a bargaining agent.

Conclusion                                                                                          

[62]            In conclusion, I believe that neither the Board's interpretation of s. 37 nor its remedial order was patently unreasonable. I would, therefore, dismiss the applications with costs to Mr. Cairns et. al. and to the UTU. I would also vacate the stay of the Board's remedial order.

[63]            The matter is remitted to the Board for the sole purpose of setting a new time limit for the negotiation of amendments to the Crew Consist Adjustment Agreement referred to in paragraph 1 of the order.

                                                                                 "J. Edgar Sexton"     

                                                                                                      J.A.

"I agree

B.L. Strayer J.A."

"I agree

K. Sharlow J.A."