Supreme Court of Canada
Warehousemen and Helpers Union, Local 979 v. General Drivers, [1983] 1 S.C.R. 382
Date: 1983-04-26
General Drivers, Warehousemen and Helpers Union, Local 979 Appellant;
and
Brink’s Canada Limited Respondent.
File No.: 16819.
1983: March 14; 1983: April 26.
Present: Laskin C.J. and Ritchie, Beetz, Estey and Chouinard JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR MANITOBA
Labour law—Arbitration—Jurisdiction—Collective agreement provision deeming certain offences just cause for dismissal—Lesser penalties available at employer’s discretion—Whether or not penalty specific so as to deprive arbitrator of jurisdiction under s. 157(d)(ii) of the Canada Labour Code—Canada Labour Code, R.S.C. 1970, c. L-1, s. 157(d).
The grievor and two co-workers, employees of respondent, stopped at the grievor’s home while en route with a bank deposit that later disappeared. An investigation disclosed no defalcation by any of the employees. All three employees were suspended, but respondent later reinstated two and dismissed the grievor. The arbitrator ordered that the grievor be reinstated, but that award was quashed by an order of the Court of Queen’s Bench that was affirmed on appeal. The issue was whether the arbitrator exceeded his powers in ordering the grievor’s reinstatement.
Held: The appeal should be allowed.
The wide range in which dismissal was cast under Article XI(b) embraced the ultimate penalties where merited but yet did not deprive the arbitrator of reading it down to fix some penalty proportionate to the gravity of the violation. It would be patently unreasonable to deny alleviation for minor offences. A specific penalty must be assigned to the particular infraction in the collective agreement for an arbitrator to be deprived of jurisdiction under s. 157(d)(ii). A penalty is not specific where it can be chosen indiscriminately by the employer. Here, the employer’s asserted right to impose at its discretion a range of penalties for different infractions pursuant to its rule book contained no specific penalty since the penalty was not contained in the collective agreement.
[Page 383]
Re Hamilton Street Railway Co. and Amalgamated Transit Union, Division 107 (1971), 22 D.L.R. (3d) 658; Valley Rite-Mix Ltd. v. Teamsters Local Union 213, [1975] 1 W.W.R. 685; Dairy Producers Co-Operative Ltd. v. Lyons, [1982] 1 S.C.R. 338, distinguished.
APPEAL from a judgment of the Manitoba Court of Appeal (1981), 127 D.L.R. (3d) 765, 13 Man. R. (2d) 314, affirming an order of the Manitoba Court of Queen’s Bench made on the employer’s application for certiorari and quashing an arbitration award. Appeal allowed.
Alvin McGregor, Q.C. and David Shrom, for the appellant.
R.J. Scott, Q.C. and W.D. Hamilton, for the respondent.
The judgment of the Court was delivered by
THE CHIEF JUSTICE—The issue in this case is whether the arbitrator appointed to adjudicate a dismissal grievance exceeded his powers in substituting a suspension and ordering consequent reinstatement, although without compensation (since the grievor made up elsewhere for loss of earnings), but without loss of seniority. The matter arose in this way. The grievor and two other employees of the company, a firm providing armoured vehicle courier service, had picked up a bank deposit in Dryden, Ontario for eventual delivery to Winnipeg. The grievor had stopped off at his home during the trip and the deposit later disappeared. An investigation did not disclose any defalcation by any of the employees. The company suspended the three employees and two of them were reinstated after suffering, respectively, a one-week and two-week suspension. The grievor was dismissed.
It was the arbitrator’s view that the grievor was discharged as much for his refusal to submit to a polygraph test as for the infraction. He did not think that otherwise there was any reason to treat the grievor differently from the two suspended co-workers with whom he was associated in the shipment.
[Page 384]
On an application by the employer by way of certiorari to quash the award, an order to quash was made by the Manitoba Court of Queen’s Bench and the order was affirmed by the Manitoba Court of Appeal. Leave to appeal has brought the case here.
The Collective Agreement and the Canada Labour Code
The governing collective agreement between the appellant Union and the employer provides as follows in Article XI(b):
(b) Rules: The employees agree to observe all rules and regulations of the EMPLOYER which may now be in force or which at any time hereafter may be promulgated and which shall not conflict with the terms of the Agreement. Failure to observe such rules and regulations shall be deemed just cause for dismissal.
Arbitration is prescribed for the determination of grievances where not resolved by the parties, and Articles XII(c) and (d) deal with the powers of the arbitrator. These articles are as follows:
(c) The arbitrator so selected or appointed shall have the authority to adjust and settle the controversy submitted to him, but he shall be confined to the subject submitted for decision and may in no event as a part of any such decision rendered thereon impose upon either party any obligation which has not been agreed to by the parties under the terms of this Agreement or any provisions thereof.
(d) The decision of the arbitrator shall be made in writing and shall be final, conclusive and binding upon the parties to this Agreement.
Relevant to an arbitrator’s remedial authority is s. 157(d) of the Canada Labour Code to which the Union and company are subject. It is in these terms:
157. An arbitrator or arbitration board
…
(d) where
(i) he or it determines that an employee has been discharged or disciplined by an employer for cause, and
(ii) the collective agreement does not contain a specific penalty for the infraction that is the subject of the arbitration,
[Page 385]
has power to substitute for the discharge or discipline such other penalty as to the arbitrator or arbitration board seems just and reasonable in the circumstances.
Although Article XI(b) of the collective agreement speaks of rules and regulations of the employer to be observed by the employees, they are not included as terms of the collective agreement. They are, however, part of a handbook which, to put it generally, lists rules of behaviour but without specifying, save in some cases, the various disciplines attaching to any breach of the rules. It would appear, and this was confirmed by company counsel, that the company relies on the overall terms of Article XI(b) which may involve an inconsequential violation, to direct, according to its discretion, dismissal from service. The contention was that its discretion to impose a lesser penalty is unassailable, but that if it decides to impose the extreme sanction of removal from service there is no power in an arbitrator to soften the penalty whatever be the violation.
This must be an overdrawn proposition, certainly as related to violations which should not court dismissal. However, it is unnecessary to explore this matter because we are concerned here with an ultimate penalty upon which the company rests.
There is much to be said for the view that, as a matter of construction, the wide terms in which dismissal is cast under Article XI(b) must be read as embracive of ultimate penalties where merited but without depriving the arbitrator of reading it down to fix some penalty proportionate to the gravity of the violation. To say then that there can be no alleviation, even, say, for reporting late, would be a patently unreasonable construction and cry for relief. The company would have it that its own discretion operates where exercised, but its discretion is not subject to an arbitrator’s reassessment if the company stands on an ultimate penalty.
This brings one to consider the effect in this case of s. 157(d) of the Canada Labour Code. Both the Manitoba Court of Queen’s Bench and the
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Manitoba Court of Appeal held that there was here a specific penalty for the infraction, both Courts relying on the judgment of Hughes J. in Re Hamilton Street Railway Co. and Amalgamated Transit Union, Division 107 (1971), 22 D.L.R. (3d) 658, and the judgment of the British Columbia Court of Appeal in Valley Rite-Mix Ltd. v. Teamsters Local Union 213, [1975] 1 W.W.R. 685. I cannot agree that these cases are applicable here.
In my opinion, the employer’s asserted unilateral right to impose a range of penalties for different infractions pursuant to its rule book cannot be said to contain a specific penalty since the penalty is not contained in the collective agreement. Nor can I agree that a penalty is specific where it can be chosen indiscriminately by the employer. To fall within s. 157(d)(ii) a specific penalty must be assigned to the particular infraction in the collective agreement.
A comparison with the judgment of this Court in Dairy Producers Co-Operative Ltd. v. Lyons, [1982] 1 S.C.R. 338, is apt. There the Saskatchewan legislation provided by s. 25(3) that where the collective agreement does not contain a specific penalty for the infraction, the arbitrator is given powers of substitution of penalty. As Noble J. of the Saskatchewan Court of Queen’s Bench said in that case, the collective agreement, to bind the arbitrator to the given penalty, must contain a specific penalty for the particular infraction. A random specification of penalty will not do to bind the arbitrator.
In the Dairy Producers Co-Operative case there was reference to a collective agreement provision which shows the distinction between a specific penalty and that exhibited here. The agreement contained the following clause: “Dismissal for cause: drunkenness, dishonesty, abuse of equipment, absence without good reason and permission where practicable and possible to obtain the same shall be reason for dismissal.”
[Page 387]
That is not this case. I would allow the appeal, set aside the judgments below and restore the order of the arbitrator. The appellant is entitled to costs throughout.
Appeal allowed with costs.
Solicitors for the appellant: Simkim, Gallagher, Winnipeg.
Solicitors for the respondent: Thompson, Dorfman, Sweatman, Winnipeg.
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