Date: 20040517
Docket: A-273-03
Citation: 2004 FCA 194
CORAM: ROTHSTEIN J.A.
EVANS J.A.
PELLETIER J.A.
BETWEEN:
VIA RAIL CANADA INC.
Applicant
(Employer)
and
GEORGE CAIRNS
Respondents
(Employees)
and
BROTHERHOOD OF LOCOMOTIVE ENGINEERS
Respondent
(Union)
and
CANADIAN NATIONAL RAILWAY COMPANY
Respondent
(Intervener)
and
UNITED TRANSPORTATION UNION
Respondent
(Intervener)
Heard at Toronto, Ontario, on November 3 and 4, 2003.
Judgment delivered at Ottawa, Ontario, on May 17, 2004.
REASONS FOR JUDGMENT BY: EVANS J.A.
CONCURRED IN BY: ROTHSTEIN J.A.
DISSENTING REASONS BY: PELLETIER J.A.
Date: 20040517
Docket: A-273-03
Citation: 2004 FCA 194
CORAM: ROTHSTEIN J.A.
EVANS J.A.
PELLETIER J.A.
BETWEEN:
VIA RAIL CANADA INC.
Applicant
(Employer)
and
GEORGE CAIRNS
Respondents
(Employees)
and
BROTHERHOOD OF LOCOMOTIVE ENGINEERS
Respondent
(Union)
and
CANADIAN NATIONAL RAILWAY COMPANY
Respondent
(Intervener)
and
UNITED TRANSPORTATION UNION
Respondent
(Intervener)
REASONS FOR JUDGMENT
EVANS J.A.
A. INTRODUCTION
[1] In 1999, the Canada Industrial Relations Board ("the Board") upheld a complaint by a group of conductors employed by VIA Rail Canada Inc. ("VIA") that their union, the Brotherhood of Locomotive Engineers ("BLE"), breached its statutory duty of fair representation in negotiating three items of a collective agreement with VIA. When the parties' attempts to resolve the disputed items in accordance with the Board's order were not progressing to the satisfaction of the conductors, the conductors returned to the Board for assistance.
[2] After a hearing, the Board imposed terms of employment on VIA and the BLE. This order supplanted the provisions in the collective agreement on which the Board had based its finding that the BLE had failed fairly to represent the conductors: George Cairns et al., [2003] CIRB no. 230 ("Decision 230").
[3] VIA and the BLE have applied to this Court for judicial review of Decision 230, alleging that it is beyond the Board's jurisdiction. They assert that the order violates a fundamental principle of labour relations in Canada, namely the right of a union and an employer to settle the terms and conditions of employment through free collective bargaining.
[4] The applicants say that the duty of fair representation is procedural in nature and does not mandate any particular outcome to negotiations between a union and an employer. They argue that, if the Board was not satisfied that VIA and the BLE had effectively remedied the union's breach of the duty of fair representation, it should have required them to continue with the mediation-arbitration process ordered by the Board, to which they and the conductors had agreed.
[5] Whether the Board has the power to impose terms to remedy a breach of this essentially procedural duty is, the applicants submit, a jurisdictional question, which the Board must therefore answer correctly if its decision is to withstand judicial review. Moreover, VIA argues, the Board had no authority to impose a remedy on it in proceedings in which it had not been found in breach of any provision of the Canada Labour Code, R.S.C. 1985, c. L-2.
[6] The conductors, on the other hand, argue that the principle of free collective bargaining is not absolute, but must be weighed against other objectives of the Code, including the constructive settlement of labour disputes and the protection of employees from their bargaining agent's failure to fairly have regard to the interests of all members of a collective bargaining unit without discrimination, bad faith or arbitrariness. The conductors also say that, because the Board's powers to remedy a breach of the Code are very broad and Board decisions are protected by strong preclusive clauses, the Court should interfere with a remedial order made by the Board only if it is patently unreasonable.
[7] In my opinion, patent unreasonableness is the standard of review applicable to the Board's interpretation and exercise of its remedial powers. The administration of the statutory scheme, including the design of appropriate remedies, requires the Board to balance the various and sometimes competing policy objectives of the Code. This is at the very heart of its mandate to regulate labour relations. I am not persuaded that the remedy granted by the Board in this case contains the kind of egregious error that warrants judicial intervention on the ground of patent unreasonableness. Accordingly, I would dismiss the applications for judicial review.
B. FACTUAL BACKGROUND
[8] Two applications for judicial review are before us, which we heard together: VIA is the applicant in Court file A-273-03, and the BLE in Court file A-277-03. These reasons apply to both, and a copy will be inserted in each file. The issues with which these applications deal can be understood without a detailed chronicle of all the administrative and judicial proceedings that preceded the Board order now under review. A severely edited account will suffice for present purposes.
[9] The origins of the story behind this litigation go back to 1977 when a Crown corporation, VIA Rail, was created to operate passenger train services previously provided by Canadian National and Canadian Pacific. Initially, VIA contracted for the services of CN employees to run its trains, namely, locomotive engineers and conductors, known collectively in the industry as running trades. In 1987, however, VIA decided to hire its own running trades in order to cut costs.
[10] The running trades at VIA formed two bargaining units and were represented by different unions: the locomotive engineers by the BLE, and the conductors by the United Transportation Union ("UTU"). Each union had its own collective agreements with VIA and CN governing, among other things, the transfer of employees from CN to VIA and their return to their former classification at CN if they were unable to retain a position at VIA within their classification.
[11] In 1997, VIA issued a document, the New Era Passenger Operations Initiative ("NEPO"), which announced that, to enable VIA to cut costs by reducing its workforce, the position of conductor would be eliminated. The abolition of this position would result in the creation of a new craft of operating engineers. Operating engineers would perform the functions of both locomotive engineers and conductors, except for the non-operational duties of conductors, which would be performed by on-board service employees.
[12] The NEPO stated that employees who had already qualified as locomotive engineers would require only two days of training for the additional duties previously performed by conductors. It would thus be relatively easy for locomotive engineers to qualify as operating engineers. However, because conductors would require extensive training to be able to assume the duties of locomotive engineers, for which not all conductors might be suited, it would be more difficult for conductors to qualify as operating engineers.
[13] An attempt by VIA unilaterally to effect these changes provoked a successful complaint by the BLE to the Canada Labour Relations Board, as it then was, alleging an unfair labour practice. Meanwhile, VIA had applied to the Board under section 18 of the Code for the collective bargaining certificate to be amended by consolidating the two bargaining units of the running trades. The Board granted VIA's application and ordered a representation vote among members of the new bargaining unit to determine which union would represent them. Members of the BLE outnumbered members of the UTU, and the BLE won the vote by a very small majority.
[14] After negotiations and legal proceedings, in June 1998 VIA and the BLE entered into a memorandum of agreement on the implementation of the NEPO, to which was appended a Crew Consist Adjustment Agreement ("CCAA"). The memorandum was ratified by the membership of the BLE. Subsequently, however, a group of conductors, including George Cairns, the first named respondent in these applications, filed a complaint with the Board under section 37 of the Code. The conductors alleged that, in negotiating the CCAA with VIA, the BLE had not fairly represented their interests.
[15] On October 22, 1999, the Board upheld the conductors' complaint in a decision reported as Georges Cairns et al., [1999] CIRB no. 35 ("Decision 35"). Because it is of central importance in these applications, I set out below the terms of the Board's order in Decision 35 (at paras. 130-31):
Therefore the Board orders the following.
1. VIA and the BLE are to reopen the Crew Consist Adjustment Agreement on the following:
a. the selection process for conductors and assistant conductors;
b. seniority provisions as they affect conductors and assistant conductors who qualify as locomotive engineers;
c. the application of the Special Agreement negotiated between UTU, VIA and CN;
and any other related issues as the parties see fit with a view to providing for the interests and needs of the group of conductors and assistant conductors. The parties are to conclude the negotiations of such amendments no later than December 15, 1999.
2. The BLE will design and hold an internal consultative process to determine these interests and needs and will hire an appropriate professional to assist the conductors and assistant conductors in this process.
3. The choice of such a professional is to be made in consultation with the conductors and assistant conductors.
4. The BLE is to bear, without the assessment of further union dues, the cost of the services of this professional.
5. The chosen professional will represent the conductors and assistant conductors for the purposes of the reopening and negotiation of the Crew Consist Adjustment Agreement, as provided above, and will share an equal voice with BLE representatives in coming to an agreement.
6. The BLE will assume, with respect to the instant proceedings, the fees of the complainants' legal counsel on a solicitor-client basis.
The Board reserves its jurisdiction should the parties be unable to resolve matters concerning the remedies ordered by the Board.
[16] VIA and the BLE unsuccessfully applied for judicial review of this order: VIA Rail Canada Inc. v. Cairns, [2001] 4 F.C. 139, 2001 FCA 133 ("VIA I"); application for leave to appeal to the Supreme Court of Canada was dismissed: [2001] C.S.C.R. no. 338. Accordingly, the propriety of the remedy granted by the Board in Decision 35 is not open to challenge in the present proceedings.
[17] Because this Court did not render its decision in VIA I until May 2, 2001, it remitted the matter to the Board "for the sole purpose of setting a new time limit for the negotiation of amendments" to the CCAA (at para. 63). The Board had originally ordered that amendments to the CCAA be negotiated by December 15, 1999, but when the matter was remitted, the Board extended the date to July 20, 2001.
[18] The parties attempted to negotiate an agreement on the three disputed items in the CCAA identified in Decision 35: the process for selecting conductors to become locomotive engineers; the seniority provisions for conductors who became locomotive engineers; and the application of the agreement concerning employees' transfer rights between VIA and CN.
[19] No agreement was reached, however, and the parties returned to the Board, which ordered a facilitation process with a Board employee and, if that failed, a mediation-arbitration process. With the parties' consent, the Board appointed Mr. Michel Picher, a widely respected arbitrator of great experience in the rail transportation industry, to undertake the mediation-arbitration and directed him to issue an award on the disputed items in the CCAA no later than October 31, 2001.
[20] On October 22, 2001, the mediator-arbitrator asked the Board to extend the time for completing his work because encouraging progress was being made. In view of Mr. Picher's confidence that the prospects of a settlement would be enhanced by an extension, and in the absence of an objection from the parties, the Board granted an extension until January 31, 2002. However, on January 15, 2002, Mr. Picher requested another extension, this time until May 31, 2002. After consulting the parties and interveners, the Board granted an extension, but only to February 11, 2002, in order to enable scheduled mediation sessions to be held.
[21] The mediation-arbitration process did not resolve the outstanding issues and, on February 11, 2002, the Board decided not to extend Mr. Picher's mandate, since it was not satisfied that adequate progress was being made or that further delay would assist the conductors. The Board pointed out that, in the two and a half years since it issued Decision 35, not one of the items in its order had been implemented, including the BLE's obligation to pay the conductors' solicitor-client legal fees incurred as a result of their participation in the mediation. VIA and the BLE opposed the Board's decision not to extend Mr. Picher's mandate, while the conductors opposed the request for an extension.
[22] The Board decided not to grant a further extension to Mr. Picher and set dates for a hearing on two issues. However, the Board also made it clear that this did not preclude the parties from continuing to attempt to resolve the outstanding issues, with or without help from Mr. Picher.
[23] The first issue was the payment by the BLE of the conductors' legal fees and other expenses associated with the mediation-arbitration process in accordance with items 4 and 6 of the order in Decision 35. The Board made an order on this topic on March 22, 2002. The second, and much more difficult and important, issue concerned the appropriate remedies for implementing the rest of the order in Decision 35. The Board did not decide this until May 15, 2003, when it issued Decision 230. This decision is the subject of these applications for judicial review.
[24] In addition to the events described above, other negotiations were taking place, in some of which Mr. Picher was involved as mediator. In particular, on April 22, 2002, a Memorandum of Understanding ("MOU") was concluded between VIA and the BLE which, the parties to it claimed, resolved the principal CCAA items of concern to the conductors that had been identified in the remedial order in Decision 35. The parties advised the Board that the MOU included recommendations for settlement made by Mr. Picher and contained their best position on the disputed items. The conductors objected to the admission of the MOU in the Board proceeding under review in the current applications, principally because they had not participated in its negotiation. The Board admitted the MOU and ultimately considered it in Decision 230.
C. DECISION 230
[25] The Board made four important findings in Decision 230 which informed its order. First, the Board held that, in deciding how to implement the order in Decision 35, it was bound to take into account the effect of the more than three years that had elapsed since it had issued Decision 35.
[26] Second, the Board reviewed the principles enunciated in the jurisprudence governing the award of remedies. In particular, the Board stated (at para. 57):
... the objective to be achieved is to remove the harmful effects of the union's failure to properly represent the conductors and to place them in the position they would have enjoyed had their rights under the Code not been breached.
The Board reiterated that, in order to achieve this objective, it would take into account the changed circumstances since it issued Decision 35 and shape its order accordingly.
[27] Third, the Board addressed the objection raised by VIA that, since it had not been found guilty in Decision 35 of a breach of the Code, it could not be the subject of a remedial order. The Board acknowledged that only a union could commit a breach of the duty of fair representation. However, it also noted that VIA had been a party to the CCAA, which had given rise to the conductors' complaints, and had participated actively in the many proceedings before the Board, the mediator-arbitrator, and the courts. Accordingly, the Board held (at para. 71):
While the BLE bears the responsibility towards its membership for the breach to the Code, both the BLE and VIA must share in the consequences of the Board's decision since both parties were instrumental in producing the effects of the CCAA, though perhaps not to the same degree. In the circumstances of this case, the imposition of financial consequences on VIA is a necessary conclusion to give effect to the Board's orders where the object is to resolve the discriminatory effects of the CCAA.
[28] Fourth, the Board found that the MOU did not satisfactorily address the conductors' grievances and had been negotiated by VIA and the BLE without the participation of the conductors, the UTU or the professional person that Decision 35 had required be appointed to assist the conductors in the negotiation of terms that would have proper regard to their interests.
[29] The Board was not satisfied in three respects with the changes to the CCAA made by the MOU. First, the criteria in the MOU by which conductors would be selected for training as locomotive engineers were likely to mean that few opportunities for selection would arise for several years. Second, the MOU preserved the seniority of pre-NEPO locomotive engineers over that of all former conductors who qualified as locomotive engineers under the NEPO arrangements, regardless of when they were first hired. Third, conductors trained as locomotive engineers as a result of the NEPO did not have the same flow-back rights to CN as other locomotive engineers.
[30] On the basis of these findings, the Board issued a complex order designed to remedy the BLE's breach of the Code and the failure of the parties to implement Decision 35 to the satisfaction of the Board. Among other things the order: (i) extended to all conductors the right to take the test to enable them to qualify as locomotive engineers; (ii) provided that conductors who passed the test must be ranked in "seniority order" and be eligible for training as locomotive engineer positions became available; (iii) required the BLE and VIA to provide monetary compensation to conductors who had sustained loss as a result of the CCAA, in lieu of the redress offered by the order; and (iv) directed VIA and the BLE to make written submissions to the Board so that it could apportion between them responsibility for paying the compensation.
D. LEGISLATIVE FRAMEWORK
Canada Labour Code
|
18. The Board may review, rescind, amend, alter or vary any order or decision made by it, and may rehear any application before making an order in respect of the application.
22. (1) Subject to this Part, every order or decision of the Board is final and shall not be questioned or reviewed in any court, except in accordance with the Federal Court Act on the grounds referred to in paragraph 18.1(4)(a), (b) or (e) of that Act.
(2) Except as permitted by subsection (1), no order, decision or proceeding of the Board made or carried on under or purporting to be made or carried on under this Part shall
(a) be questioned, reviewed, prohibited or reserpine, or
(b) be made the subject of any proceedings in or any process of any court, whether by way of injunction, certiorari, prohibition, quo warranto or otherwise,
on any ground, including the ground that the order, decision or proceeding is beyond the jurisdiction of the Board to make or carry on or that, in the course of any proceeding, the Board for any reason exceeded or lost its jurisdiction.
37. 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.
99. (1) Where, under section 98, the Board determines that a party to a complaint has contravened or failed to comply with subsection 24(4) or 34(6), section 37, 47.3, 50 or 69, subsection 87.5(1) or (2), section 87.6, subsection 87.7(2) or section 94, 95 or 96, the Board may, by order, require the party to comply with or cease contravening that subsection or section and may
...
(b) in respect of a contravention of section 37, require a trade union to take and carry on behalf of any employee affected by the contravention or to assist any such employee to take and carry on such action or proceeding as the Board considers that the union ought to have taken and carried on the employee's behalf or ought to have assisted the employee to take and carry on;
(b.1) in respect of a contravention of the obligation to bargain collectively in good faith mentioned in paragraph 50(a), by order, require that an employer or a trade union include in or withdraw from a bargaining position specific terms or direct a binding method of resolving those terms, if the Board considers that this order is necessary to remedy the contravention or counteract its effects;
...
(2) For the purpose of ensuring the fulfilment of the objectives of this Part, the Board may, in respect of any contravention of or failure to comply with any provision to which subsection (1) applies and in addition to or in lieu of any other order that the Board is authorized to make under that subsection, by order, require an employer or a trade union to do or refrain from doing any thing that it is equitable to require the employer or trade union to do or refrain from doing in order to remedy or counteract any consequence of the contravention or failure to comply that is adverse to the fulfilment of those objectives.
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18. Le Conseil peut réexaminer, annuler ou modifier ses décisions ou ordonnances et réinstruire une demande avant de rendre une ordonnance à son sujet.
22. (1) Sous réserve des autres dispositions de la présente partie, les ordonnances ou les décisions du Conseil sont définitives et ne sont susceptibles de contestation ou de révision par voie judiciaire que pour les motifs visés aux alinéas 18.1(4)a), b) ou e) de la Loi sur la Cour fédérale et dans le cadre de cette loi.
(2) Sauf exception prévue au paragraphe (1), l'action - décision, ordonnance ou procédure - du Conseil, dans la mesure où elle est censée s'exercer dans le cadre de la présente partie, ne peut, pour quelque motif, y compris celui de l'excès de pouvoir ou de l'incompétence à une étape quelconque de la procédure_:
a) être contestée, révisée, empêchée ou limitée;
b) faire l'objet d'un recours judiciaire, notamment par voie d'injonction, de certiorari, de prohibition ou de quo warranto.
37. Il est interdit au syndicat, ainsi qu'à ses représentants, d'agir de manière arbitraire ou discriminatoire ou de mauvaise foi à l'égard des employés de l'unité de négociation dans l'exercice des droits reconnus à ceux-ci par la convention collective.
99. (1) S'il décide qu'il y a eu violation des paragraphes 24(4) ou 34(6), des articles 37, 47.3, 50 ou 69, des paragraphes 87.5(1) ou (2), de l'article 87.6, du paragraphe 87.7(2) ou des articles 94, 95 ou 96, le Conseil peut, par ordonnance, enjoindre à la partie visée par la plainte de cesser de contrevenir à ces dispositions ou de s'y conformer et en outre_:
...
b) dans le cas de l'article 37, enjoindre au syndicat d'exercer, au nom de l'employé, les droits et recours que, selon lui, il aurait dû exercer ou d'aider l'employé à les exercer lui-même dans les cas où il aurait dû le faire;
b.1) dans le cas de l'alinéa 50a), enjoindre, par ordonnance, à l'employeur ou au syndicat d'inclure ou de retirer des conditions spécifiques de sa position de négociation ou ordonner l'application d'une méthode exécutoire de règlement des points en litige, s'il est d'avis que ces mesures sont nécessaires pour remédier aux effets de la violation;
...
(2) Afin d'assurer la réalisation des objectifs de la présente partie, le Conseil peut rendre, en plus ou au lieu de toute ordonnance visée au paragraphe (1), une ordonnance qu'il est juste de rendre en l'occurrence et obligeant l'employeur ou le syndicat à prendre des mesures qui sont de nature à remédier ou à parer aux effets de la violation néfastes à la réalisation de ces objectifs.
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Federal Courts Act
|
18. (1)(4) The Federal Court may grant relief under subsection (3) if it is satisfied that the federal board, commission or other tribunal
(a) acted without jurisdiction, acted beyond its jurisdiction or refused to exercise its jurisdiction;
...
|
18. (1)(4) Les mesures prévues au paragraphe (3) sont prises si la Cour fédérale est convaincue que l'office fédéral, selon le cas_:
a) a agi sans compétence, outrepassé celle-ci ou refusé de l'exercer;
...
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D. ISSUES AND ANALYSIS
ISSUE 1: Standard of review
(i) standard of review and "jurisdiction"
[31] Counsel for VIA argued that the Board had committed three errors of a jurisdctional nature in Decision 230. First, it had reopened Decision 35 for purposes other than simply amending the latest date for implementing the remedial order and, in fashioning a remedy, the Board had taken into account events subsequent to Decision 35. Second, it had imposed terms of employment on the parties in place of those to which they had agreed. Third, it had imposed the terms on VIA and ordered it to pay compensation, even though VIA had not been found in breach of the Code in Decision 35.
[32] Because these were "jurisdictional issues" or "preliminary questions", counsel for VIA argued, the Board's conclusions were automatically reviewable on a standard of correctness, without the need for a functional and pragmatic analysis. In the alternative, to the extent that the Board had jurisdiction to give any of the remedies awarded in this case, the exercise of its remedial power was patently unreasonable.
[33] I do not accept counsel's "jurisdictional" approach to determining the standard of review. Recent decisions of the Supreme Court of Canada make it clear that the standard of review applicable to decisions of an adjudicative administrative agency must always be determined on the basis of a pragmatic and functional analysis. Conceptual abstractions, such as "jurisdictional question", now play a much reduced role in determining the standard of review applicable to the impugned aspect of a tribunal's decision.
[34] Thus, in Dr. Q. v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226, 2003 SCC 19">2003 SCC 19, at para. 21, McLachlin C.J., writing for the Court, said:
In every case where a statute delegates power to an administrative decision-maker, the reviewing judge must begin by determining the standard of review on the pragmatic and functional approach. In Pushpanathan [v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982], this Court unequivocally accepted the primacy of the pragmatic and functional approach to determining the standard of judicial review of administrative decisions.
Further, she said (at paras. 24-25):
... The nominate grounds, language of jurisdiction, and ossified interpretations of statutory formulae, while still useful as familiar landmarks, no longer dictate the journey.
For this reason, it is no longer sufficient to slot a particular issue into a pigeon hole of judicial review and, on this basis, demand correctness from the decision-maker.
[35] Thus, labelling the interpretation of a particular provision in an agency's enabling statute as a "jurisdictional question" does not provide a "shortcut past the components of the pragmatic and functional approach": Law Society of New Brunswick v. Ryan, _[2003] 1 S.C.R. 247, 2003 SCC 20">2003 SCC 20, at para. 21 (per Iacobucci J.). Indeed, as McLachlin C.J. indicated in Ryan, this very point had been made in Pushpanathan, where Bastarache J. said (at para. 28):
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.
[36] Nonetheless, "jurisdiction" is still part of the vocabulary of administrative law. In this case, it appears in two contexts: jurisdictional error is the ground of review and the jurisdictional nature of subsection 99(2) is a factor in the pragmatic and functional approach for determining the standard of review. I deal with each in turn.
[37] First, jurisdictional error is a ground upon which this Court reviews decisions of federal administrative agencies: paragraph 18.1(4)(a) of the Federal Courts Act, R.S.C. 1985, c. F-7. Indeed, as a result of the preclusive clause in subsections 22(1) and (2) of the Canada Labour Code, this is the only ground on which the Board's decision in this case can be reviewed. Breach of the duty of fairness or perjury is not alleged.
[38] However, identifying the relevant ground of review as jurisdictional error is not determinative of the standard of review that the court must apply when deciding whether the applicant has established that the tribunal has erred as alleged. Thus, when, as is the case here, a decision is challenged under paragraph 18.1(4)(a) on the ground that the Board "acted without ... , acted beyond ... or refused to exercise its jurisdiction", and the error alleged involves the interpretation of a provision of the Code, the Court must still use the pragmatic and functional analysis to determine the standard of review applicable to the interpretation of the provision in dispute.
[39] If the pragmatic and functional analysis leads the Court to conclude that correctness is the standard applicable to reviewing the Board's interpretation of the provision of the Code in dispute, the Board will have exceeded its jurisdiction if the Court disagrees with its interpretation. Conversely, if the pragmatic and functional analysis points to patent unreasonableness as the applicable standard, the Board will only be found to have acted without or beyond, or failed to exercise its jurisdiction, if its interpretation is patently unreasonable.
[40] Second, "jurisdiction" is still relevant to determining the standard of review because it is one of the factors to be considered as part of the pragmatic and functional analysis. Whether or not a question is jurisdictional is part of the inquiry into the nature of the question decided by a tribunal: Chieu v. Canada (Minister of Citizenship and Immigration), [2002] 1 S.C.R. 84, 2002 SCC 3">2002 SCC 3, at para. 24.
[41] The Supreme Court of Canada has recently endorsed this view in2004 SCC 28">Alberta Union of Provincial Employees v. Lethbridge Community College, 2004 SCC 28, where Iacobucci J. stated (at para. 19) that a statutory provision conferring remedial authority on a labour arbitrator was jurisdictional in nature and that this was a factor indicating that its interpretation by the arbitrator should be reviewed on a standard of correctness. This is because, according to Iacobucci J., "administrative bodies are entirely statutory and must be correct in assessing the scope of their mandate."
[42] However, despite the jurisdictional nature of the statutory provision in dispute, Iacobucci J. concluded that other pragmatic and functional considerations required that the arbitrator's decision be afforded judicial deference. For a similar conclusion, see also Canada (Attorney General) v. Georgian College of Applied Arts and Technology, [2003] 4 F.C. 525, 2003 FCA 199, at paras. 21-2.
(ii) standard of review and remedial powers: "a jurisdictional enclave"?
[43] At an earlier stage of the pragmatic and functional era of the law of judicial review of administrative action in Canada, there was authority for the proposition that the scope of the Board's remedial powers in section 99 of the Code is a "jurisdictional question" and that the Board's interpretation of the provision must therefore be reviewable on the correctness standard.
[44] Thus, in Royal Oak Mines Inc. v. Canada (Labour Relations Board), [1996] 1 S.C.R. 369, Cory J. said (at para. 59):
... the question as to whether the Board may or may not impose remedies on the parties is jurisdictional in nature. If the Board concluded that it could not impose a remedy to counteract a breach by one of the parties, the aggrieved party would have the right to argue before a reviewing court that the Board had incorrectly interpreted its enabling statute. The court, in addressing this jurisdictional question, would then be entitled to review the Board's decision, on a correctness standard, to determine whether in fact the Board did have the power it claimed to lack.
[45] Cory J. also went on to say in the same paragraph that, "once it has been established by the provisions of the empowering legislation that the Board does, in fact, have the jurisdiction to order certain remedies", the standard of patent unreasonableness determines whether the Board exceeded its jurisdiction by awarding, in a given case, one of the remedies available to it.
[46] However, in my respectful view, the idea that the interpretation of the Board's remedial provisions is reviewable on a correctness standard solely because it is a jurisdctional question has been washed away by the torrent of standard of review jurisprudence emanating from the Supreme Court of Canada in the eight years since Royal Oak Mines was decided.
[47] I have already quoted from Dr. Q, Ryan and Pushpanathan for the view that the law now is that the pragmatic and functional approach must always be used by a reviewing court to determine the standard of review applicable to decisions of adjudicative administrative agencies. In addition, two other cases bear directly on the standard of review applicable to labour tribunals' interpretation of their remedial powers.
[48] First, in Canadian Union of Public Employees, Local 301 v. Montreal (City), [1997] 1 S.C.R. 793, a case decided soon after Royal Oak Mines, the Court applied the pragmatic and functional approach to determine the standard of review applicable to a labour board's interpretation of its powers, even though they "appear to limit a tribunal's jurisdiction" (at para. 44).
[49] Applying the pragmatic and functional approach to the case before her, L'Heureux-Dubé J., writing for the Court, concluded that patent unreasonableness was the applicable standard. While L'Heureux-Dubé J. said (at para. 46) that, in so holding, her decision was consistent with Cory J.'s analysis in Royal Oak Mines, she also repudiated the notion that an administrative agency's interpretation of its remedial powers is automatically reviewable for correctness as it is a "jurisdictional" question whether an agency can ever grant a particular kind of remedy: see paras. 44 and 47.
[50] Second, in the recent 2004 SCC 28">Lethbridge Community College case, the Court held that, while the scope of arbitrator's remedial powers is a jurisdictional question, "its remedial nature ... militates broadly in favour of greater deference" (at para. 18), because its interpretation "presupposes an understanding and analysis of labour law issues" (at para. 19). The Court concluded in that case that both the interpretation and exercise of the remedial powers by the arbitrator should be reviewed on the intermediate standard of unreasonableness simpliciter.
(iii) applicable standard of review
[51] Since the standard of review applicable to the Board's conclusion that it may award a particular remedy must be determined on the basis of a pragmatic and functional analysis, I must now apply that analysis. Both the Supreme Court of Canada and this Court have regularly concluded that decisions of the Canada Industrial Relations Board (and of its predecessor, the Canada Labour Relations Board) turning on the interpretation of the Code are normally reviewable only for patent unreasonableness. It is therefore unnecessary for me to reinvent the wheel by conducting a comprehensive pragmatic and functional analysis.
[52] Suffice it to say that the following considerations have led to a high degree of judicial deference towards decisions of labour relations boards, including the Board: strong preclusive clauses, the broad scope of their expertise and the relevance of that expertise to the interpretation of their enabling legislation, and the legislative intention that labour disputes should be resolved expeditiously by specialist agencies with tailor-made processes and remedial powers.
[53] Thus, to the extent that Decision 230 involves the interpretation of the Board's remedial powers, the question is this: is the Board's interpretation of section 99 reviewable on a less deferential standard than applies to its interpretation of most other provisions of the Code. In my view, it is not.
[54] First, the remedial powers of the Board are framed very broadly. Indeed, subsection 99(2) could hardly be more comprehensive:
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99. (2) For the purpose of ensuring the fulfilment of the objectives of this Part, the Board may, in respect of any contravention of or failure to comply with any provision to which subsection (1) applies and in addition to or in lieu of any other order that the Board is authorized to make under that subsection, by order, require an employer or a trade union to do or refrain from doing any thing that it is equitable to require the employer or trade union to do or refrain from doing in order to remedy or counteract any consequence of the contravention or failure to comply that is adverse to the fulfilment of those objectives.
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(2) Afin d'assurer la réalisation des objectifs de la présente partie, le Conseil peut rendre, en plus ou au lieu de toute ordonnance visée au paragraphe (1), une ordonnance qu'il est juste de rendre en l'occurrence et obligeant l'employeur ou le syndicat à prendre des mesures qui sont de nature à remédier ou à parer aux effets de la violation néfastes à la réalisation de ces objectifs.
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[55] Second, as I have already noted, labour tribunals' interpretation of their remedial powers attracts particular deference: see 2004 SCC 28">Lethbridge Community College at para. 18. The cogent reasons advanced by Cory J. in Royal Oak Mines (at paras. 50-60) to support judicial deference to the exercise by the Board of its remedial powers are, in my opinion, equally applicable to the Board's interpretation of those powers. This is because, whether the legislation can be taken to permit the Board's award of a particular remedy requires a consideration, and a contextual balancing, of the objects of Part I of the Code, and an appreciation of the variety of labour relations situations that may call for effective remedial action.
[56] These are matters on which the Board has more expertise than the courts. Since the Board's remedial powers are very different from, and much wider than, the more limited remedial choices typically available to courts, the interpretation of section 99 cannot be said to involve any concept of general law on which the Court can claim an expertise that is at least equal to that of the Board.
[57] While 2004 SCC 28">Lethbridge Community College requires the "jurisdictional" nature of a statutory provisions conferring remedial discretion to be factored into a functional and pragmatic analysis, I conclude that this consideration is outweighed by the other elements of the analysis which, in my opinion, point to a high degree of judicial deference.
[58] In 2004 SCC 28">Lethbridge Community College, the Court held that unreasonableness simpliciter, not patent unreasonableness, was the standard of review applicable to the arbitrator's interpretation of his remedial powers. However, there are two important differences between our case and 2004 SCC 28">Lethbridge Community College which explain why the more demanding standard of unreasonableness simpliciter imposed in 2004 SCC 28">Lethbridge Community College is not appropriate here.
[59] First, when considered generally, the preclusive clause in the Alberta Labour Relations Code, R.S.A 2000, c. L-1, is weaker than that in the Canada Labour Code, because it does not purport to restrict the scope of judicial review at all if an application is made no more than 30 days after the impugned decision. Judicial review is only precluded outside that period.
[60] Second, 2004 SCC 28">Lethbridge Community College concerned the review of a decision by a labour arbitrator, whereas our case concerns a labour relations board. In Dayco (Canada) Ltd. v. CAW-Canada, [1993] 2 S.C.R. 230 at 166, La Forest J. stated that labour arbitrators have a smaller range of expertise than labour relations boards, a factor that militates in favour of affording less judicial deference to arbitrators' decisions. While legislation typically gives to labour boards a general supervisory role in the field of labour relations, labour arbitrators appointed to adjudicate grievances have the narrower function of determining whether the grievor has established a breach of the collective agreement.
[61] Consequently, despite the jurisdictional aspect of the question, I see no sufficient reason to conclude that the Board's interpretation of its remedial powers should be reviewed on a standard other than that applied by the courts to its interpretation of other provisions of the Code. Hence, I am of the opinion that the Board's interpretation of subsection 99(2) is reviewable on a standard of patent unreasonableness.
(iv) patent unreasonableness and the exercise of remedial powers
[62] Royal Oak Mines provides some specific guidance on the application of the patent unreasonableness standard to the exercise of remedial powers by a labour relations board. Indeed, it was accepted by the applicants' counsel that, if patent unreasonableness is the standard of review, the tests formulated in Royal Oak Mines apply.
[63] Cory J. described as follows (at para. 68) the errors that would warrant judicial intervention with a remedy ordered by the Board:
There are four situations in which a remedial order will be considered patently unreasonable: (1) where the remedy is punitive in nature; (2) where the remedy granted infringes the Canadian Charter of Rights and Freedoms; (3) where there is no rational connection between the breach, its consequences, and the remedy; and (4) where the remedy contradicts the objects and purposes of the Code.
It was not argued that the remedy awarded by the Board in this case infringed the Charter rights of either VIA or the BLE.
ISSUE 2: Did the Board exceed its jurisdiction in Decision 230 by amending the order in Decision 35?
[64] Counsel for VIA argued that the Board's remedial order in Decision 230 is invalid because, without legal authority, it amends and broadens the scope of the Board's order in Decision 35. He put the argument in three ways.
[65] First, after the Board rendered Decision 35 it was functus officio. Second, whatever power the Board may have had to reopen Decision 35 was overtaken by the decision of this Court in VIA I when it dismissed the applications for judicial review of Decision 35 and remitted the matter to the Board (at para. 63)
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. [emphasis added]
Third, the Board exceeded its jurisdiction when it fashioned the remedy in Decision 230 in light of facts occurring after the events on which the Board in Decision 35 had held that the BLE was in breach of the duty of fair representation. The breach was committed in or prior to June 1998 when VIA and the BLE signed the collective agreement that included the CCAA.
[66] For the reasons given above, to the extent that these issues involve the interpretation of the Board's statutory powers, patent unreasonableness is the applicable standard of review. However, correctness is the standard of review for determining the effect of the order of this Court in VIA I dismissing the applications for judicial review of Decision 35.
(i) was the Board functus officio when it rendered Decision 35?
[67] The starting point of the analysis must be the nature of the Board's order in Decision 35 and what the Board purported to do to it in Decision 230. The order in Decision 35 was not self-contained because it required the parties to renegotiate the three disputed items in the CCAA in a manner consistent with the BLE's duty to fairly represent the interests of the conductors.
[68] Decision 35 also prescribed certain steps to bring this about: in particular, consultation by the BLE with the conductors and the appointment of a professional person, to be paid for by the BLE, as the adviser and representative of the conductors in the renegotiation of the CCAA. The Board expressly reserved jurisdiction in the event that the parties could not resolve the issues arising from the remedial order in Decision 35.
[69] In my opinion, the Board's express reservation of jurisdiction, exercisable if the parties could not resolve the outstanding remedial issues, authorized the Board to implement the order that it had granted in Decision 35, and to make any consequential amendments. Moreover, since the Board granted extensions of time at the request or with the consent of the parties, VIA and the BLE cannot now complain that these amendments were made without legal authority.
[70] VIA does not deny that the Board's expansive remedial powers include the power to reserve jurisdiction in order to deal with the parties' inability to agree on the implementation of a remedial order. Indeed, since the applicants' challenge to Decision 35 was dismissed in VIA I, they cannot now impugn this aspect of it.
[71] In light of the above considerations, I cannot accept VIA's functus argument.
(ii) effect of this Court's decision remitting Decision 35
[72] In my opinion, there is no inconsistency between the limited purpose for which this Court in VIA I remitted Decision 35, and the Board's order in Decision 230. When a reviewing court upholds an administrative agency's decision, it normally dismisses the application for judicial review without any further order or direction. However, when the Court decided the applications for judicial review in VIA I, the date last set by the Board for the parties to resolve the outstanding issues had passed. Accordingly, in order to take account of the lapse of time, the Court directed the Board to set a later date, which the Board did in Letter Decision No. 464 by amending the completion date to July 20, 2001.
[73] It is true that in VIA I the Court used the words "sole purpose" when it remitted Decision 35 to the Board. However, this was merely to indicate the limited extent to which the Court required the Board to modify Decision 35, namely, by extending the deadline for the completion of negotiations. In all other respects, the application for judicial review was dismissed. In these circumstances, VIA I cannot be taken to have precluded the Board from exercising the jurisdiction that it reserved for itself in Decision 35.
[74] Hence, in remitting the matter for an amendment to the date for the conclusion of negotiations, the Court in VIA I did not purport to address the question of whether, or the extent to which, the Board was at liberty subsequently to adjust its order in other respects, or to give effect to it if the parties did not. The applications for judicial review in VIA I did not put in question the Board's power to implement the order in Decision 35 in the event that the outstanding issues were not resolved by negotiation. There is therefore no basis for VIA's argument that the Court curtailed whatever powers the Board otherwise had to give effect to its order in Decision 35.
(iii) could the Board take account of events subsequent to Decision 35?
[75] Counsel for VIA stressed that the only breach of the Code that Decision 35 was designed to remedy occurred in the period leading up to the CCAA. Accordingly, the Board exceeded its jurisdiction when, in framing the remedial order in Decision 230, it took into account events that had occurred after the date of the BLE's breach of the Code.
[76] I do not agree. In the "dynamic, complex and sensitive field" of labour relations (Royal Oak Mines at para. 57), labour relations boards must be able to take account of changing circumstances if they are to discharge their statutory mandate with respect to "the constructive resolution of labour disputes for the benefit of the parties and the public" (ibid. at para 56). Thus, referring to the wide powers conferred on the Board by subsection 99(2), Cory J. said in Royal Oak Mines (at para. 55):
In my view, this was done to give the Board the flexibility necessary to address the ever changing circumstances that present themselves in the wide variety of disputes which come before it in the sensitive field of labour relations.
[77] To confine the Board's ability to craft a remedy by reference to the facts as they were when the breach was committed would encourage the filing of multiple complaints covering different periods of time. To put the Board into this kind of a straitjacket would thwart Parliament's purpose in granting broad and flexible remedial powers to the Board, namely, to enable it to bring about the constructive resolution of industrial disputes in fluid labour relations situations.
[78] Counsel provided no authority for the proposition that, in fashioning a remedy for a breach of the Code, the Board may not take into account events occurring after the date of the breach. In my view, it was not patently unreasonable for the Board in Decision 230 to have had regard to events subsequent to the BLE's breach of the Code.
(iv) conclusion
[79] I am not persuaded that any of the above arguments demonstrates that Decision 230 exceeds the Board's jurisdiction. The Board did not act patently unreasonably by committing any of the errors identified in Royal Oak Mines. That is, there was a rational relationship among the breach of the Code, its consequences and the remedy, and Decision 230 did not contradict the objects and purposes of the Code.
ISSUE 3: Was it patently unreasonable for the Board to remedy the BLE's breach of the duty of fair representation in the negotiation of the CCAA by imposing terms on the parties respecting the disputed items of the CCAA?
(i) Is it always patently unreasonable for the Board to impose terms as a remedy for a breach of the duty of fair representation?
[80] As applied to a union's negotiation of a collective agreement, the duty of fair representation does not require that particular terms be included in an agreement to protect the interests of all members of a bargaining unit, or that the union attempt to satisfy all the demands of a particular group of members. Rather, the duty obliges the union to have proper regard to the interests of all members of the bargaining unit when bargaining with the employer, and not to conclude an agreement whose terms reveal that the union acted arbitrarily or in bad faith towards, or discriminated against, particular individuals or groups.
[81] Consequently, labour relations boards normally remedy breaches of this kind of the duty of fair representation by sending the union back to the bargaining table, not by imposing terms of employment on the union and the employer.
[82] Much the same may be said of the duty to bargain in good faith imposed by paragraph 50(a) of the Code. Nonetheless, as already noted, the majority of the Supreme Court of Canada in Royal Oak Mines held that, in exceptional situations, the Board may remedy a breach of this duty by imposing terms. Added after the Board issued its remedy in Royal Oak Mines, paragraph 99(1)(b.1) of the Code expressly incorporates a power in the Board to impose terms in order to remedy bad faith bargaining.
[83] If, as was held in Royal Oak Mines, subsection 99(2) is sufficiently broad to enable the Board to impose terms to remedy a breach of the duty to bargain in good faith, it was not, in my opinion, patently unreasonable for the Board to have concluded that subsection 99(2) also empowers it to impose terms to remedy a breach of the duty of fair representation, which, in this context, also focuses upon process. Restricting collective bargaining in this way, in order to end a labour dispute, does not necessarily contradict the objects and purposes of the Code.
[84] Nonetheless, two arguments can be advanced for the proposition that a breach of the duty of fair representation in the bargaining process cannot be remedied by the imposition of terms.
(a) VIA not in breach of the Code
[85] A breach of the duty of fair representation can only be committed by a union, and the employer may not be aware of, or in any way implicated in it. In such circumstances, it might well be thought unfair to impose terms of employment which would bind the employer as well as the party in breach of the Code, the union.
[86] In my opinion, however, while this consideration may limit the circumstances in which terms may be imposed to remedy a breach of the duty of fair representation, it does not make it patently unreasonable for the Board to have concluded that, in some situations at least, it can impose terms that bind an employer, even though the complaint did not name the employer as a party to the breach of the Code.
[87] First, in VIA I this Court upheld Decision 35, even though the Board had directed both the BLE and VIA to reopen the CCAA on the designated items and to conclude the renegotiation by a prescribed date. Sexton J.A noted (at para. 60) that the impact of the remedy on VIA
... 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 [sic] eventual order.
Indeed, VIA itself acknowledged that orders made against a party who had breached the Code almost always have an incidental affect on third parties. The question is thus not whether a remedy can ever be awarded against a party that is not in breach of the Code, but whether the imposition of terms on VIA is justifiable under subsection 99(2).
[88] Second, the Board only imposed terms after the parties had failed to implement the remedy ordered in Decision 35, as amended. The Board's order that VIA and the BLE renegotiate the CCAA not only imposed process duties on VIA, but also potentially subjected it to less favourable terms than it would otherwise have negotiated had it not been for the union's breach of the Code.
[89] Third, the statutory provisions conferring the Board's remedial powers are sufficiently broad to support the grant of a remedy against VIA. True, the Code only permits the Board to award an "equitable" remedy under subsection 99(2) when it has found that a contravention of the Code has occurred. However, in the present case, a contravention of the Code had occurred: the BLE's breach of the duty to fairly represent the conductors.
[90] In my opinion, it was not patently unreasonable for the Board to conclude that the power to make a remedial order under subsection 99(2) "in respect of any contravention of or failure to comply with any provision" of the Code enumerated in subsection 99(1), permitted it to include VIA in its remedial order. The Board had found that VIA was implicated in the breach, had participated actively in all the proceedings spawned by the conductors' initial complaint to the Board of the BLE's breach of the duty of fair representation, and had not complied with Decision 35.
(b) paragraph 99(1)(b.1)
[91] Since paragraph 99(1)(b.1) expressly confers on the Board a power to impose terms in defined circumstances, it may be argued that Parliament should be taken to have intended this provision to be exhaustive of the Board's authority to grant this particular remedy. On this assumption, the imposition of terms was unauthorized in this case because, among other things, paragraph 99(1)(b.1) enables the Board to impose terms only to remedy a breach of the duty to bargain in good faith, not a breach of the duty of fair representation.
[92] However, paragraph 99(1)(b.1) was added to the Code in 1999 specifically to confirm the broad view of the "equitable" remedial power in subsection 99(2) that the Board had taken in Royal Oak Mines. In these circumstances, I do not accept that paragraph 99(1)(b.1) was intended to be exhaustive of the Board's power to impose terms and thus to narrow the scope of subsection 99(2) so as to preclude the Board from ever resorting to that provision in order to impose terms to remedy a breach of the duty of fair representation.
(ii) was the award of the remedy in this case patently unreasonable?
[93] For the reasons explained above, I am not persuaded that, in exceptional circumstances, it is necessarily patently unreasonable for the Board to impose terms of a collective agreement on an employer and a union to remedy the union's breach of the duty of fair representation.
[94] Royal Oak Mines provides the broad framework within which to consider whether it was patently unreasonable for the Board to impose the terms that it did in this case in order to remedy the BLE's breach of the Code. Thus, the question is whether the Board's imposition of terms to resolve the long running dispute was patently unreasonable on the facts of this case because "... the remedy is punitive in nature, ... there is no rational connection between the breach, its consequences and the remedy, [or] ... the remedy contradicts the objects and purposes of the Code": Royal Oak Mines at para. 68.
(a) "no rational relationship between the breach, its consequences and the remedy"
[95] Counsel for VIA argued that, since Decision 230 was intended to remedy a breach of the Code committed by the BLE, there was no connection between the imposition of terms on VIA and the breach.
[96] I do not agree. Counsel's attempt to portray VIA as an innocent bystander caught up in an intra and inter union conflict is far removed from reality. The evidence indicates that, from soon after issuing the NEPO, VIA engaged in a course of conduct with respect to the conductors that was censured by the Board.
[97] Thus, after VIA originated the move to abolish the position of conductor as a cost-cutting measure and applied for the merger of the bargaining units, but before it negotiated the CCAA with the BLE, VIA was found to have breached paragraph 50(b) of the Code by attempting unilaterally to abolish the position of conductor: see VIA Rail Canada Inc. (1998), 107 di 92; 25 CLRBR (2d) 150. The Board subsequently found that VIA and the BLE had engaged in "improper collaboration", and had breached the Code, in negotiating the CCAA: Decision 35 at para. 126. Finally, the Board found that, contrary to Decision 35, VIA had concluded the MOU with the BLE without any input from the conductors, the UTU, or the professional person appointed pursuant to Decision 35 to assist the conductors.
[98] Consequently, I cannot agree that Decision 230 is patently unreasonable because there was no rational relationship between the imposition of terms on VIA and the BLE's breach of the Code. This argument is considered further in connection with the compensatory component of the Board's order.
(b) "the remedy contradicts the objects and purposes of the Code?/p>
[99] The encouragement of free collective bargaining is one of the objectives of the Canada Labour Code (Royal Oak Mines at para. 73, per Cory J.) and, according to Lamer C.J. (at para. 2), the fourth member of the 4-3 majority in Royal Oak Mines, "one of the most important". Consequently, a remedial order of the Board that curtails parties' ability to decide for themselves the terms of employment merits careful judicial scrutiny: indeed, Lamer C.J. said (at para. 2) that the Board may impose terms of employment only in "exceptional and compelling circumstances".
[100] However, Royal Oak Mines also says that the encouragement of free collective bargaining is not the only object and purpose of the Code, and does not necessarily trump all others: ibid. at paras. 2 and 74. As Cory J. said (at para. 74):
The Board is required to balance all the goals of the Canada Labour Code and fashion an order that, in the context of the particular situation presented gives a carefully balanced consideration to all the important factors outlined in the preamble.
[101] One of the other objects contained in the preamble that was relevant in Royal Oak Mines was the encouragement of the constructive settlement of disputes. This object is equally relevant in the present case since the parties have been unable to resolve their dispute by agreement, despite previous interventions by the Board ordering the parties to renegotiate the specified items in the CCAA.
[102] I would also note that fair representation is one of the assumptions on which the principle of free collective bargaining rests: employees who can only bargain with their employer through an agent that disregards their interests and aspirations have effectively been denied their right to free collective bargaining. In our case, the conductors were denied this right by the BLE. As the Board observed in Decision 35 (at para. 122):
The union's behaviour is tantamount to the absence of representation within the context of collective bargaining.
Hence, in an important sense, the Board's ability to effectively enforce the duty of fair representation strengthens, not undermines, the principle of free collective bargaining.
[103] Counsel for VIA also suggested that, even if there was no real prospect that the parties would agree on the implementation of Decision 35, it would have been more consistent with the Code if the Board had allowed the differences to be resolved through industrial action. In my opinion, this is not a viable option in a case where a minority of the members of the bargaining unit, the conductors, have been the subject of discrimination by the union. As long as VIA and the BLE remain essentially on the same side on the disputed items, the conductors will never realistically be in a position to resort to lawful strike action to protect their interests.
[104] In stating that an order would be patently unreasonable if it contradicted the objects and purposes of the Code, Cory J. did not, in my view, thereby intend a reviewing court to decide for itself how the various objects and purposes of the Code should be balanced in a given factual context. Because such an exercise will often, as here, involve an assessment of a complex and fluid labour relations situation with a substantial history, the balancing exercise would seem clearly to be more within the province of the Board than of the Court and, as such, entitled to considerable curial deference.
[105] In reviewing the legality of Board-imposed terms of employment, the Court's role is to ensure that the Board recognized that the imposition of terms is a significant interference with the important principle of free collective bargaining and that, consequently, it is a remedy that must be reserved for exceptional cases in which attempts to resolve a serious dispute consensually have foundered and there is no practicable alternative to Board intervention.
[106] Nonetheless, the policy of judicial deference requires that the Board be given latitude in determining how competing statutory objectives should be balanced in the context of particular facts. Hence, the Court must not substitute its view for that of the Board on when it will unduly jeopardise the attainment of other statutory objectives and purposes to force the parties further along a consensual path. In my view, the Court should only set aside a decision on the ground that the Board's order contradicted the objects and purposes of the Code by striking an improper balance among relevant objects and purposes if the order was patently unreasonable, in view of both the importance of encouraging free collective bargaining and the facts of the case.
[107] I turn now to the facts of the present case in order to answer the following question: given the importance attached by the Code to the principle of free collective bargaining, was it patently unreasonable for the Board, in all the circumstances, to have imposed terms dealing with the three contentious items in the CCAA, rather than permitting the consensual mediation-arbitration process conducted by Mr. Picher to run its course?
[108] In answering this question, I have considered three aspects of the dispute: its context, the feasibility of the parties' settling the disputed issues without further undue delay, and the terms imposed by the Board on VIA and the BLE.
1. Context
[109] A review of the circumstances in which the Board made the remedial order in Decision 230 cannot start with the appointment of Mr. Picher as mediator-arbitrator. It will be recalled that the BLE's breach of the Code was committed in the period leading up to the conclusion of the CCAA in 1998 and that, on October 22, 1999, Decision 35 sought to remedy that breach by, among other things, ordering the parties to renegotiate three items of the CCAA dealing with the consequences of the merger of the two bargaining units.
[110] None of these items had been resolved by renegotiation among the parties as required by Decision 35. Nor had the BLE complied with that provision in the Board's order obliging it to pay the costs incurred by the conductors in participating in the mediation-arbitration. In its reconsideration decision not to extend Mr. Picher's mandate, the Board took into account its view that, in the time that had elapsed since it had it issued Decision 35, the BLE and VIA seemed to have devoted a great deal of time and effort to litigious skirmishing, but relatively little to implementing Decision 35: VIA Rail Canada Inc., [2002] CIRB no. 163.
2. The feasibility of a timely settlement
[111] The seriousness of the situation with which the Board was faced in Royal Oak Mines was virtually unparalleled in the history of labour relations in Canada in the degree of violence and bitterness that it engendered. Nine miners who crossed the picket lines were murdered. The strike also had devastating economic and social consequences on the local community, where the mine provided a major source of employment. The issues in dispute were extremely complex, the strike had been very long, and the company adamantly refused to reinstate dismissed striking employees. In these extraordinary circumstances, the Board concluded, there was no prospect of an agreement between the parties and an early return to work was essential for all concerned, including the community.
[112] Fortunately, nothing as extreme exists in the present case. Nonetheless, the dispute that the Board sought to resolve in Decision 230 involved difficult and seemingly intractable labour relations issues arising from the amalgamation of two crafts: job reductions, eligibility and retraining for the new craft, the transfer of employees between two employers and the integration of the seniority lists of the former conductors and of the existing locomotive engineers.
[113] In dismissing a motion to reconsider its decision not to extend the mandate of Mr. Picher beyond February 11, 2002, the Board provided a full account of the considerations that had persuaded it not to grant a third extension, but to order a hearing on the outstanding issues.
[114] First, in the two and a half years that had elapsed since Decision 35 was issued on October 22, 1999, the parties had been unable to reach an agreement on any of the outstanding issues identified by the Board in Decision 35, despite facilitation efforts by an officer of the Board, and Board-ordered mediation-arbitration. Indeed, four and a half years have now elapsed since the Board rendered Decision 35 and the conductors have still received no redress for the BLE's breach of the Code in 1998.
[115] The Board particularly observed in Decision 230 (at para. 27) that the BLE had not complied with the provision of the order in Decision 35 requiring it to pay legal costs incurred by the conductors during the mediation-arbitration, a provision which was outside Mr. Picher's mandate. In its reconsideration decision, the Board noted (at para. 19) the conductors' submission that they had exhausted their personal financial resources and would be unable to participate in the mediation sessions.
[116] Second, the Board also stated in the reconsideration decision (at para. 18) that the focus of the mediation seemed to have shifted from resolving the unresolved remedial issues in Decision 35 to
a much larger issue between VIA and CN, with regard, inter alia, to the effect of the Quebec Superior Court's decision on the triggering of the special agreement's provisions. This issue, while worthwhile in terms of longer-term labour relations objectives, appears to have taken on a life of its own, to the point of displacing the central issue, which was the subject of the Board's remedial order.
[117] Third, in its reconsideration of the decision not to give Mr. Picher more time, the Board noted (at para. 19) that it was difficult to square an imminent resolution of the issues through the mediation-arbitration process with the "vitriolic tone" of the parties' submissions and the BLE's apparent unwillingness to accept that part of the order in Decision 35 providing a role for the conductors' representatives in developing a common position to put to VIA on the CCAA. Negotiations could not be permitted to drag on indefinitely if conductors were ever going either to secure reasonable opportunities for qualifying as locomotive engineers with appropriate levels of seniority, especially given an aging workforce, or to receive compensation in lieu.
[118] Finally, the process of successfully negotiating an agreement was no doubt made more difficult by the order in Decision 35 for the appointment of a professional person who would assist the conductors and "share an equal voice with BLE representatives in coming to an agreement". Nonetheless, in dismissing the applications for judicial review of Decision 35 in VIA I, this Court summarized the principal elements of the remedy ordered by the Board, including the words that I have just quoted, and concluded (at para. 59): "These measures were a rational and proportional response to the contraventions of the BLE."
[119] It is unnecessary for the purpose of the present applications to determine precisely what role the Board envisaged for the conductors' independent representative in the renegotiation process. Suffice it to say that it was not patently unreasonable for the Board to have concluded that the exclusion of the conductors and their appointed representative from the negotiation of the MOU was contrary to Decision 35.
3. The terms imposed
[120] The terms that the Board imposed in Royal Oak Mines had been put forward by the employer earlier in the negotiations and were acceptable to the employees. Despite the tentative agreement that the parties in that case appear to have reached, and the continuing acceptability of the terms to the employer, the employer subsequently withdrew them. To remedy the employer's failure to bargain in good faith, the Board ordered it to bring those terms forward again, so that they could be the subject of a ratification vote by the union members. On the other hand, on those items in the tentative agreement on which the employer had changed its position, the Board only ordered the parties to negotiate.
[121] There is no doubt that Decision 230 goes further than the Board decision considered in Royal Oak Mines, in the sense that most of the terms imposed by the Board in Decision 230 had never been proposed by VIA and/or the BLE, and were not subject to ratification by members of the bargaining unit. On the other hand, the terms imposed by the Board represented a relatively small portion of the total collective agreement. "Dovetailing" of the seniority lists of the former conductors and the existing locomotive engineers had in fact been proposed by VIA during the bargaining in 1998, but had been rejected by the BLE.
[122] More important, the Board only imposed terms with respect to items on which it had based its finding in Decision 35 that the BLE had breached the Code, and which it had ordered the parties to renegotiate. Further, in a case where the breach of the Code involved a failure by the union fairly to represent a minority group, it was not patently unreasonable for the Board to have decided that a ratification vote was not appropriate. Finally, I would note that the parties had agreed to have the issues in dispute resolved by mediation-arbitration, albeit by an arbitrator on which all agreed.
(c) conclusions
[123] The Board may only impose terms to remedy a breach of the Code in very unusual circumstances: when there is no other reasonably practicable alternative if a serious breach of the Code is to be effectively remedied. In my view, the Board's remedy cannot be said to be patently unreasonable in the circumstances of this case.
failure to reach consensus
[124] In dealing with this lengthy and difficult labour dispute, the Board has clearly recognised the importance of free collective bargaining. From the release of Decision 35 in October 1999, until the issue of Decision 230 in May 2003, the Board actively encouraged the parties to remedy the BLE's breach of the Code by settling the disputed items in the CCAA by negotiation. Even when the Board announced that it would hold hearings on the conductors' legal expenses and the disputed items on the CCAA, it invited the parties to continue to try to resolve their dispute consensually, with or without Mr. Picher's assistance.
[125] In light of the failure of all these attempts to produce tangible results, it was not patently unreasonable for the Board to decide that the parties were unlikely to reach a timely resolution of their dispute in accordance with the Board's order in Decision 35, despite the assistance of Mr. Picher. While Mr. Picher's appointment and the terms of his mandate were agreed to by the parties, including the first two completion dates, the order setting up the mediation-arbitration process expressly reserved the jurisdiction of the Board over unresolved matters concerning the remedies.
[126] The situation facing the Board in the present case raised labour relations issues of complexity and intractability that have continued to give rise to great antagonism among the parties. Mr. Picher is the eighth person brought in to attempt to settle the dispute. In view of the limited progress that was being made on the mediation of the issues, and of the length of time that had elapsed since the Board ordered the parties to resolve their differences through negotiation, it was not patently unreasonable for the Board to conclude that there was no realistic possibility that the dispute would soon be resolved.
[127] The principle of free collective bargaining does not demand that the Board require the parties to continue in a process which it reasonably believes to have been derailed by issues other than those that the mediation-arbitration was established to resolve. The Board must be able to impose terms as a last resort if it is to discharge its statutory duty to facilitate the constructive resolution of disputes, to ensure the integrity of the bargaining process by effectively remedying breaches of the duty of fair representation, and to oversee the due implementation of its remedial orders.
Picher's process
[128] In his thoughtful reasons, Pelletier J.A. says that the Board-ordered terms impinge much more on the principle of free collective bargaining than any terms that Mr. Picher might have imposed if he had been unable to resolve the dispute by mediation. I agree that, because all parties consented to the Board's order appointing Mr. Picher and prescribing his mandate, his award would have had a consensual aspect that the unilateral order of the Board in Decision 230 lacked.
[129] However, in my respectful view, my colleague overstates the differences between Decision 230 and terms that Mr. Picher might have imposed. The Board's order creating the mediation-arbitration process provided that any award made by Mr. Picher would itself be an order of the Board, as was, of course, the order made in Decision 230. Presumably, the parties could elect to incorporate terms into the collective agreement, whether they had been imposed by the Board itself or by a Board order containing an award by Mr. Picher. However, unless the Board varied the order establishing the Picher process and the order in Decision 230, both sets of terms would also remain orders of the Board, and employees who were not satisfied with the BLE's handling of grievances through the normal arbitration process could always return to the Board for a remedy.
[130] Moreover, whether the Board order comprised Picher-imposed terms or Board-imposed terms, it would not be subject to ratification by members of the BLE. And, whether the Board-imposed terms will have more negative effects on the future labour relations of the parties than any terms that Mr. Picher might have imposed must, in my opinion, be a matter of pure speculation and hence an inadequate basis for concluding that Decision 230 is patently unreasonable.
no reviewable error
[131] Nor can it be said that the Board in Decision 230 obviously misinterpreted a provision of its enabling statute, made a material and totally unsupported finding of fact, ignored a factor that Parliament obviously intended the Board to consider, or took into account a manifestly irrelevant consideration.
[132] The Court is not being asked by VIA and the BLE to review the exercise of the Board's discretion not to extend Mr. Picher's mandate. However, the rationality of the Board's conclusion that the mediation-arbitration process no longer provided a suitable forum for the resolution of the parties' differences is relevant to the overall determination that the Court must make on the legality of the Board's imposition of terms.
[133] The Board was entitled to take into consideration the interests of the conductors in deciding not to grant another extension to Mr. Picher, but to resolve the matter itself. After all, the conductors were the victims of BLE's breach of the Code and of the parties' failure to implement the Board's order in Decision 35. Nor can I assume that, because the Board did not expressly refer to the fact that Mr. Picher's mandate included arbitrating the disputed items that it had forgotten this aspect of the terms of his appointment that the Board itself had approved.
[134] Finally, it is important to reiterate the very limited role assigned to the Court's review function by the standard of patent unreasonableness, a standard which it was said in Ryan (at para. 52) focuses on "the immediacy or obviousness" of the defect in the decision under review which makes it "so flawed that no amount of curial deference can justify letting it stand." More recently, patent unreasonableness has also been said to invalidate only those administrative decisions that "almost border on the absurd": 2004 SCC 23">Voice Construction Ltd. v. Construction & General Workers' Union, Local 92, 2004 SCC 23 at para. 18 (per Major J.).
[135] On the facts of this case, I am not persuaded that, even given the importance of free collective bargaining, the Board's imposition of terms pursuant to the broad powers conferred by subsection 99(2) is patently unreasonable in either of the senses described above. Decision 230 therefore cannot be said to contradict the objects and purposes of the Code.
ISSUE 4: Was it patently unreasonable for the Board to order VIA to pay compensation when it had not been found to have breached the Code?
[136] VIA says that the Board's order is punitive in nature and thus patently unreasonable by virtue of Royal Oak Mines. Counsel argues that, since the Board had not found VIA to be in breach of the Code, it was punitive to make an order against it. Although this argument was made with respect to the order as a whole in Decision 230, it seems particularly apt as regards the provision making VIA jointly and severally liable with the BLE for the payment of compensation to some conductors. In civil litigation, a court can only order the payment of damages by a party whom it has found liable of unlawful conduct.
[137] Those entitled to monetary compensation under the terms of the Board's order in Decision 230 include: conductors from the eligibility list who elected to receive compensation in lieu of the redress offered by the part of the order dealing with eligibility to qualify as a locomotive engineer; conductors who were unable to qualify or apply for locomotive engineer training because of a medical disability; and conductors who qualified as locomotive engineers after July 1, 1998, but who had lost earnings and benefits because they were given less seniority than they were entitled to under the Board's order.
[138] In addition, the Board ordered VIA to pay the wages and expenses of conductors while undergoing training to qualify as locomotive engineers. VIA will also bear the cost of training the conductors to fill the 75 locomotive engineer vacancies likely to occur in the foreseeable future.
[139] The Board did not put a dollar amount on the compensation payable to members of each group, nor did it fix a maximum sum for the total liability. VIA was given until July 15, 2003, to respond to individual claims for compensation. VIA had identified 249 conductors who would be entitled to compensation under the Board's order, although some may choose specific redress in lieu of compensation. The record is unclear on the total amount that VIA could be required to pay as a result of the Board's order, but it is clearly substantial. No determination has yet been made of the proportions in which the amount of VIA and the BLE's joint and several liability should be allocated between them.
[140] VIA had estimated that the workforce reductions announced in the NEPO would save it approximately $15 million a year. However, it was always clear that this was not a net saving. When reconsidering the decision to grant VIA's application under section 18 of the Code to amend the bargaining certificate by merging the two units, the Board noted that VIA would have to pay for "significant and expensive training - in particular, training of many conductors to carry out the tasks of engineers ... 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": VIA Rail Canada Inc. (1997), 104 di 67, 38 CLRBR (2d) 124, at para. 16.
[141] In my view, the compensation award in Decision 230 is not patently unreasonable. The analogy with civil litigation is misplaced. It is a necessary consequence of the Board's order in Decision 35 that the contract between VIA and the BLE would have to be renegotiated, with the possibility that VIA's obligations would thereby be increased.
[142] When the contract was not renegotiated in compliance with Decsion 35, I cannot regard the Board's imposition of liability on VIA as punitive. Nothing in Decision 230 suggests that financial obligations were imposed on VIA as "punishment". The order required VIA to shoulder the costs to conductors of retraining them to be locomotive engineers, as well as the cost of the training itself, and to share with the BLE some of the adverse financial consequences sustained by conductors as a result of the CCAA and the parties' failure to implement Decision 35. In the absence of reliable evidence about the amount that VIA was potentially liable to pay, it cannot be said that the Board's order was punitive rather than compensatory.
[143] [1984] 1 S.C.R. 269">National Bank of Canada v. Retail Clerks' International Union, [1984] 1 S.C.R. 269, provides an example of an order that was set aside because it was punitive. Having found an employer in breach of the Code for interfering with its employees' representation by a union, the Board required the employer to write to each of its employees a "humiliating" letter, which recipients might think had been written by the employer on its own initiative and represented its views. Writing for the majority, Beetz J. said (at 296):
This type of penalty is totalitarian and as such alien to the tradition of free nations like Canada, even for the repression of the most serious crimes.
Decision 230 could not be so characterised.
[144] It is equally clear that there is a rational relationship between the compensation ordered by the Board, and the union's breach of the duty of fair representation and its consequences. Conductors were being compensated for losses that they had suffered by virtue of the CCAA and the parties' failure to implement the Board's order in Decision 35.
ISSUE 5: Was the remedy patently unreasonable in providing for the "dovetailing" of the seniority lists, the portability of seniority, and the selection of the date from which seniority is established?
[145] The BLE argues that the Board exercised its remedial powers in a patently unreasonable manner when it resolved the dispute over the seniority provisions by imposing on the parties terms providing, in effect, that locomotive engineers' seniority dates from the start of their initial employment as "trainmen", not from the time that they qualified as locomotive engineers. Counsel submitted that this "dovetailing" of seniority lists was both contrary to tradition in the railway industry and was inappropriate for conductors and locomotive engineers, because the qualifications for these crafts are very different.
[146] In my view, the persuasive power of history is much diminished in the new labour relations context created at the instance of VIA: the abolition of two separate crafts and the creation of one new craft. Working out the seniority consequences of the amalgamation of two crafts is a complex, technical and delicate exercise in the regulation of labour relations. While the Board's solution may not be perfect, it is not so manifestly devoid of reason, or so plainly contrary to the objects and principles of the Code, as to be patently unreasonable.
[147] The same is also true, in my view, of those provisions in the Board's order dealing with the portability of seniority rights.
F. CONCLUSION
[148] For these reasons, I would dismiss the applications for judicial review with costs.
"John M. Evans"
J.A.
"I agree
Marshall Rothstein J.A."
PELLETIER J.A. (dissenting)
[149] I have read the careful reasons of my colleague Evans J.A. and find that I must respectfully disagree with his conclusion as to whether the order under review is patently unreasonable.
[150] I do not disagree with my colleague's conclusion as to the standard of review to be applied, patent unreasonableness. I disagree with his application of that standard to these facts.
[151] In Canada (Director of Investigation and Research, Competition Act) v. Southam Inc., [1997] 1 S.C.R. 748 at para. 57 (Southam), Iacobucci J. dealt with the application of the standard of patent unreasonableness to difficult questions:
[57] The difference between "unreasonable" and "patently unreasonable" lies in the immediacy or obviousness of the defect. If the defect is apparent on the face of the tribunal's reasons, then the tribunal's decision is patently unreasonable. But if it takes some significant searching or testing to find the defect, then the decision is unreasonable but not patently unreasonable. ... This is not to say, of course, that judges reviewing a decision on the standard of patent unreasonableness may not examine the record. If the decision under review is sufficiently difficult, then perhaps a great deal of reading and thinking will be required before the judge will be able to grasp the dimensions of the problem [citations omitted]. But once the lines of the problem have come into focus, if the decision is patently unreasonable, then the unreasonableness will be evident.
[152] This is a difficult question. It will be brought into focus through the lens of Royal Oak Mines Inc. v. Canada (Labour Relations Board), [1996] 1 S.C.R. 369 (Royal Oak Mines). That case provides guidance as to what constitutes a patently unreasonable decision in the context of decisions of the Canada Industrial Relations Board (the CIRB) or its predecessor, the Canada Labour Relations Board (the CLRB). It also provides an example of an intervention in collective bargaining which, by reason of its measure and balance, was found to be sheltered from judicial review.
[153] In [1979] 2 S.C.R. 227">Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227, the Supreme Court of Canada held that a patently unreasonable decision is one which "cannot be rationally supported by the relevant legislation" (at 273). One finds a specific application of that principle in Royal Oak Mines, supra, when Cory J. identifies the types of errors which would render a decision of the CLRB patently unreasonable:
[68] There are four situations in which a remedial order will be considered patently unreasonable: (1) where the remedy is punitive in nature; (2) where the remedy granted infringes the Canadian Charter of Rights and Freedoms; (3) where there is no rational connection between the breach, its consequences, and the remedy; and (4) where the remedy contradicts the objects and purposes of the Code...
The decision under review is one which cannot be rationally supported by the relevant legislation because it is contrary to the objects and purposes of the Code.
[154] The circumstances which led the CLRB to make the order it did in Royal Oak Mines, supra, are so tragic as to be well known. The employer and the union bargaining committee had agreed to a tentative collective agreement which was taken to the union membership for ratification. The membership rejected the proposed agreement. This led to a lockout by the employer and the hiring of replacement workers, with the predictable picket line violence which such a strategy inevitably entails.
[155] The specific issue which led to the finding of a breach of the duty to bargain in good faith was the employer's refusal to consider any proposal which included a mechanism for adjudicating the dismissal of some 40 employees who had been discharged for misconduct in the course of the work stoppage. By the time that the matter came before the CLRB, the union had twice agreed to mediated proposals for settlement. The employer rejected both proposals because of its objection to any possibility of reinstatement of the discharged workers. It was clear that the employer's intransigence on this issue effectively precluded any possibility of the parties coming to an agreement.
[156] Having concluded that the employer was in breach of its duty to bargain in good faith, the CLRB intervened in a very measured way. It ordered the employer to table an offer which except included the terms of the original offer which had been rejected by the union membership, with four relatively minor exceptions. The CLRB's order required the employer to include in its offer a process for dealing with the discharged workers which was specifically crafted by the CLRB. The employer's offer was to be put to the union membership for ratification and, in the event that the offer was not accepted, the parties were directed to return to the bargaining table. The offer was accepted by the union membership and the work stoppage ended.
[157] Notwithstanding Major J.'s conclusion that the CLRB had imposed a collective agreement upon the parties, its intervention was limited to dictating to the party in breach of the duty to bargain in good faith the terms of an offer which it was to table for the union's consideration. Those terms were without effect, as between the parties, until they were accepted by the union membership. Only then did they become enforceable against the employer, not by virtue of having been the subject of an order of the CLRB, but as a result of becoming a part of the collective agreement. The union's recourse, in the event of a breach, was to invoke the grievance and arbitration provisions of the collective agreement, not to return to the CLRB for assistance in enforcing its order.
[158] Did the CLRB's order further the objects and purposes of the Code? It did. The parties had a collective agreement and the tools by which to resolve disputes in its application and interpretation. The parties were moved from their deadly economic warfare back into a relationship governed by a collective agreement. While the proposal with respect to the discharged workers was forced upon the employer, it was put to the union for ratification. As a result, the union was committed to the proposal, and willing and able to enforce it using the normal dispute resolution tools under the collective agreement. No further recourse to the CLRB was required. The bargaining relationship between the union and the employer was undoubtedly strained, but at least the parties were operating within the familiar confines of a relationship governed by a collective agreement.
[159] What is the situation in this case as a result of the CIRB's intervention? The CIRB's order has effectively removed the subject of the integration of the conductors into the ranks of the locomotive engineers from collective bargaining in the sense that the employer and the union cannot agree that they will depart from the terms of the order. While the parties could, in theory, approach the CIRB to amend its order, such a request would presumably be subject to the intervention of the conductors, which is antithetical to the status of the union as the exclusive bargaining agent for the bargaining unit and to free collective bargaining. To the extent that the objects and purposes of the Code favour the resolution of disputes by collective bargaining whose results are reflected in a collective agreement, those objects have not been satisfied.
[160] As for the issue of the representation of the conductors by their union, the alienation of the conductors from their union has been institutionalized. The appointment of a special representative for the conductors with a voice equal to the union's in negotiations with the employer freed the union from the obligation to integrate the conductors' position in its own since the conductors now had the status to advance their own position. It is not surprising that the employer complained that it had never received a common proposal from the union and the conductors. It is not obvious how future negotiations are to be conducted.
[161] The enforcement of the CIRB's order will now be a matter between the conductors and the CIRB since the order will not be enforceable through the grievance/arbitration procedure found in the collective agreement. Even if the order were to be incorporated in the collective agreement, it is unlikely that it could be enforced to the conductors' satisfaction since neither the employer nor the union has any interest in enforcing the order according to its terms. Any foot dragging by either party would inevitably lead to further applications to the CIRB by the conductors. In the result, the order has done nothing to integrate the conductors into their union.
[162] Finally, the parties are no closer to returning to a normal collective bargaining relationship than they were when the finding of a breach of duty of fair representation was made. The employer and the union have had subjects of significant interest to both of them removed from the ambit of collective bargaining. The union remains deeply divided, and the ability of the union to speak and act as the exclusive bargaining agent for all members of the bargaining unit has been impaired. The employer is in an unenviable position with respect to any issue involving the conductors.
[163] This comparison highlights the deficiencies of the order under review. Far from advancing collective bargaining, it has removed certain subjects from bargaining altogether. Rather than integrating the conductors into their union, it has institutionalized their adversity in interest. The employer and the union cannot know how they are to conduct themselves in the future in any matter involving the conductors. Clearly, the parties have not been assisted to return to a normal collective bargaining relationship. To the extent that the objects and purposes of the Code include the advancement of collective bargaining and the constructive resolution of disputes within a collective bargaining context, the order under review contradicts those objects and purposes.
[164] One need look no further than the Preamble to the Code for an articulation of its objects and purposes:
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 Canadian workers, trade unions and employers recognize and support freedom of association and free collective bargaining as the bases of effective industrial relations for the determination of good working conditions and sound labour-management relations;
AND WHEREAS the Government of Canada has ratified Convention No. 87 of the International Labour Organization concerning Freedom of Association and Protection of the Right to Organize and has assumed international reporting responsibilities in this regard;
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;
[165] It is clear that the advancement of collective bargaining and the constructive resolution of disputes are the foundations upon which the balance of the Code rests.
[166] When one holds the decision under review up to the light provided by the Preamble to the Code, and the measured response of the CLRB in Royal Oak Mines, supra, its defects are obvious. To use Iacobucci J.'s phrase, it is a decision "so flawed that no amount of curial deference can justify letting it stand" (Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247, 2003 SCC 20">2003 SCC 20 at para. 52). It ought to be set aside.
[167] Having shown that the CIRB's decision is patently unreasonable, it is not necessary for me to show as well that there existed reasonable alternatives to that decision. Specifically, the validity of my conclusion as to the patent unreasonableness of the CIRB's order does not depend upon proof that it would have been reasonable to allow the process underway before Arbitrator Picher to run its course. Even if one assumes that the CIRB was required to intervene at the time it did, it does not follow that the CIRB was required to intervene in the way it did. To that extent, the merits of the CIRB's decision to terminate Arbitrator Picher's mandate do not impinge upon my conclusion.
[168] On the other hand, if it were shown that the process underway before Arbitrator Picher had the potential to bring the dispute between the conductors and their union to a conclusion which was consistent with the objects and purposes of the Code, then the patent unreasonableness of the CIRB's order would be that much more obvious. In other words, the patent unreasonableness of the decision would come into focus even more sharply. It is in that light that I broach the subject of Arbitrator Picher's mandate.
[169] It will be recalled that Arbitrator Picher was selected by the parties with a mandate to attempt to mediate an agreement and, if unsuccessful, to proceed to interest arbitration and to render an award resolving the matters in issue.
[170] Had Mr. Picher been able to mediate a settlement, then the incorporation of that settlement into the collective agreement would have satisfied all of the objectives of the Code. The parties would have had a viable collective agreement, enforceable in the ordinary way by the union on behalf of all its members, including the conductors. Even if mediation had failed and the matter had proceeded to interest arbitration, the results of that arbitration would also have been incorporated into the collective agreement, notwithstanding the CIRB's determination to incorporate the award into an order. Once again the parties would have had a viable collective agreement, and their collective bargaining could return to a normal state. The process before Mr. Picher had the potential to resolve the matters in dispute in a way which would have remedied the original breach and left the parties in a position to resume a normal collective bargaining relationship.
[171] The element which distinguishes the process before Mr. Picher from that upon which the CIRB subsequently embarked was that the former led to the conclusion of a collective agreement and the resumption of a normal bargaining relationship. It must be kept in mind that the CIRB's original order was that the parties should renegotiate portions of their collective agreement. When they were unable to do on their own, the Board ordered a facilitated bargaining process, initially with the assistance of its executive officer and, if that failed, before Mr. Picher. Both mediation and interest arbitration are techniques for concluding a collective agreement. The fact that those processes are undertaken by virtue of a CIRB order does not change the nature of the exercise.
[172] This brings me to the decision to terminate Mr. Picher's mandate. When the CIRB terminated Mr. Picher's mandate, it was not simply substituting its own coercive order for any order which Mr. Picher might make in his capacity as an interest arbitrator. It was terminating the negotiations, at the request of the conductors, for the purpose of imposing its view of an appropriate result. That decision was unreasonable for two reasons.
[173] The first is that Arbitrator Picher's failure to meet the CIRB'S deadlines was of no consequence because the deadlines were simply arbitrary. While everyone agrees that a timely resolution was desirable, all were well aware of the complexity of the issues. While the CIRB may have been justified in imposing deadlines as a means of maintaining a sense of urgency, it ought to have been clear to all that the problems which the mediator/arbitrator was called upon to resolve did not lend themselves to rigid deadlines. Any hesitation on this point is resolved when one considers that the CIRB itself, in taking the matter back, was not able to render a decision until one year after the date of the extension requested by Mr. Picher. The CIRB was unable to live within the deadlines it imposed on Mr. Picher, which simply makes the point that the deadlines were arbitrary.
[174] The second reason is that the CIRB appears to have simply overlooked the fact that Mr. Picher's mandate included not only mediation but also interest arbitration. The parties and the CIRB had agreed to put the dispute in the hands of an experienced labour relations professional with particular expertise in railway labour relations. While the CIRB may have believed that the prospects of a mediated solution were remote, Mr. Picher's optimism was entitled to some deference by the CIRB due to his expertise and his experience with the parties. But quite apart from that, if the CIRB thought that mediation had run its course, at a minimum it should have directed Mr. Picher to proceed to the arbitration phase of his mandate, rather than simply terminating his mandate.
[175] The CIRB's decision to intervene in the way it did is not made patently unreasonable by the mere fact that the process underway before Arbitrator Picher was a viable alternative to the order under review. The CIRB could have chosen to intervene when it did without intervening in a way which was contrary to the objects and purposes of the Code. But the presence of an alternative makes it clear just how unreasonable the CIRB's intervention was. It was in a very real sense, patently unreasonable.
[176] The CIRB's order is so flawed that it cannot be allowed to stand. It has removed the whole issue of the integration of the conductors into the ranks of the locomotive engineers from collective bargaining. The order and the process leading to it have institutionalized the conductors' alienation from their union. The union's status as exclusive bargaining agent for the bargaining unit is impaired. The parties have lost the ability to resolve their difficulties with respect to the subject matter of the order by invoking the grievance and arbitration provisions of the collective agreement. The CIRB has locked itself into a continuing supervisory role over all aspects of the implementation of its order, largely at the behest of the conductors. It is hard to conceive a result which could be more at odds with the objects and purposes of the Code.
[177] For these reasons, I would allow the application for judicial review and set aside the decision of the CIRB.
"J.D.Denis Pelletier"
J.A.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-273-03
STYLE OF CAUSE: VIA RAIL CANADA INC. v. GEORGE CAIRNS ET AL
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: NOVEMBER 3 & 4, 2003
REASONS FOR JUDGMENT: EVANS J.A.
CONCURRED IN BY: ROTHSTEIN J.A.
DISSENTING REASONS BY: PELLETIER J.A.
DATED: MAY 17, 2004
APPEARANCES:
Mr. John A. Campion
Mr. Jean H. Lafleur
Mr. Robert J. Cooper
Ms. Louise Béchamp FOR VIA RAIL CANADA INC.
Mr. Douglas J. Wray FOR UNITED TRANSPORTATION UNION
Mr. Michael A. Church
Mr. Philippe Hunt FOR INTERNATIONAL BROTHERHOOD
Mr. Graham E. S. Jones OF LOCOMOTIVE ENGINEERS
Mr. Michael Horvatt FOR CANADIAN NATIONAL RAILWAY
COMPANY
Ms. Pascale-Sonia Roy FOR CANADA INDUSTRIAL RELATIONS
Ms. Susan Nicholas BOARD
SOLICITORS OF RECORD:
Fasken Martineau DuMoulin LLP
Toronto, Ontario
Fasken Martineau DuMoulin LLP
Montreal, Quebec FOR VIA RAIL CANADA INC.
Caley & Wray
Toronto, Ontario FOR UNITED TRANSPORTATION UNION
Shield & Hunt FOR INTERNATIONAL BROTHERHOOD
Ottawa, Ontario OF LOCOMOTIVE ENGINEERS
Ogilvy Renault FOR CANADIAN NATIONAL RAILWAY
Montreal, Quebec COMPANY
Legal Services FOR CANADA INDUSTRIAL RELATIONS
Ottawa, Ontario BOARD
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