Volvo Canada Ltd. v. U.A.W., Local 720, [1980] 1 SCR 178

SUPREME COURT OF CANADA

Volvo Canada Ltd. v. U.A.W., Local 720, [1980] 1 S.C.R. 178

Date: 1979-06-28

Volvo Canada Limited Appellant; and

International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), Local 720 Respondent.

1978: October 18; 1979: June 28.

Present: Laskin C.J. and Martland, Ritchie, Spence, Pigeon, Dickson, Beetz, Estey and Pratte JJ.

ON APPEAL FROM THE SUPREME COURT OF NOVA SCOTIA, APPEAL DIVISION

Labour relations — Arbitration — Judicial review — Standard for judicial review — Grievance — Ambigui­ty — Extrinsic evidence — Nature of arbitration — Consensual or otherwise — Collective agreement — Justifiable reason for absence from work — Whether correct question addressed by arbitrator.

Following expiry of a Collective Agreement between the parties the employees were on a lawful strike be­tween June 21 and September 16, 1974. The strike ended when a new collective agreement was made retroactive to March 31, 1974. In this agreement there were provisions for paid holidays which referred to accumulated seniority. The Company took the position that seniority did not accumulate during the strike with regard to holiday pay. The matter was submitted in accordance with the Collective Agreement to a Sole Arbitrator who found that under the agreement employees did not accumulate seniority during the period of the strike. The Union's motion to have the award set aside was dismissed in the Trial Division. The Appeal Division however held that, because the arbitrator failed to consider whether the employees were absent for a "justifiable reason" as provided for in the agreement, there was reviewable error and the arbitration award was invalid.

Held: The appeal should be allowed.

Per Martland, Ritchie, Pigeon, Beetz and Pratte JJ.: The trial judge was correct in holding that there was enough ambiguity to justify the reception of extrinsic evidence. This left only two questions on the appeal, the proper construction of the agreement (or the "correct question") and whether interference with the award is precluded because "the parties have referred a specific question of law to the arbitrator".

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As to the second question the Bell Canada case, [1974] S.C.R. 335, applies. The question came up in the ordinary course of a grievance against the decision of the Company and it turned out that the disagreement depended entirely on the proper construction of the agreement. This was not, any more than in the Bell Canada case, an agreement to refer a specific question of law to the arbitrator and did not become so just because both parties agreed what the issue raised was.

In a collective agreement grievance the grievor does not choose arbitration, neither party has a choice, but such commitment to arbitration is not meant to be an additional step before the matter goes to court. It is meant to be final and it is therefore imperative that decisions on such matters be approached by a court asking the question whether the arbitrator's conclusion is a "patently unreasonable" interpretation of the agreement.

Judged by the standard "that respecting the validity of the construction of a collective agreement by an arbitrator the question is whether it is one which the agreement would reasonably bear", the construction here adopted cannot be rejected. The arbitrator did not put the wrong question but properly stated it as "Did the employees accumulate seniority during the strike?" The matter of a "justifiable reason" was just something to be considered in answering that question, the arbitrator did consider it and clearly did not find that the strike came within what he called "the situations in the Agreement which extend seniority."

Per Laskin C.J. and Spence and Dickson JJ. (concurring in the result): While the arbitrator failed to determine explicitly whether the legal strike provided "other justifiable grounds" he did consider the no-strike clause and in referring to the article dealing with "justifiable reason" obviously ruled out its application. He did not answer the wrong question. It was in the Appeal Divi­sion that another question, a question within the main question, was raised and the majority there purported to make it the issue for determination. The term "wrong question" first arose in the Court in the Metropolitan Life case, [1970] S.C.R. 425, which took the term and concept from the Anisminic case, [1969] 2 A.C. 147, however talk about the right or wrong question is merely a euphemism for addressing the issue before the arbitrator. The arbitrator here met and determined the main and only issue before him. It is not for a Court to go behind such an issue before, as here, a consensual arbitrator to whom a specific question of law has been referred. The suggestion that such an award may be

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impeached if the arbitrator has given clauses of the collective agreement an interpretation which they will not reasonably bear is equally untenable. This has been a ground of review, open but cautiously approached, when statutory arbitration is concerned but to introduce it into consensual arbitration is to strike at the founda­tion of such arbitration.

The majority in the Appeal Division while agreeing that review was not open on the question of proper construction of the collective agreement were of opinion that review was open on the grounds set out by Viscount Cave in Kelantan, [1923] A.C. 395: " ... But where a question of construction is the very thing referred for arbitration, then the decision of the arbitrator upon that point cannot be set aside by the Court only because the Court would itself have come to a different conclusion. If it appears by the award that the arbitrator has proceeded illegally—for instance, that he has decided on evidence which in law was not admissible or on princi­ples of construction which the law does not countenance, then there is error in law which may be ground for setting aside the award; but the mere dissent of the Court from the arbitrator's conclusion on construction is not enough for that purpose."

This passage however must be considered in light of the common law development of arbitral review. In that light it would seem that Viscount Cave's grounds, which did not even at the time carry the majority of the Lords, have been laid to one side in favour of the views expressed in Absalom. The adoption of Viscount Cave's approach would eliminate any telling distinction be­tween review of an award on a general question or issue and review on a specific question of law. There is here a good case for affirming the hands-off policy of the Courts on awards of consensual arbitrators, subject to bias or fraud or want of natural justice and to jurisdic­tion in the strict sense which makes it indistinguishable from questions of law, In any event Viscount Cave's observations should not be followed. They are much too broad in respect of an award on a reference of a specific question of law.

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Per Martland and Ritchie JJ.: Although the case was dealt with in the Court below as a question of law submitted to the arbitrator as to construction of the collective agreement, the case is rather one in which a grievance has been referred to arbitration pursuant to the collective agreement as in Metro Toronto Police Association v. Metro Toronto Board of Commissioners, [1975] 1 S.C.R. 630. Even if the submission was as to a specific question of law while accepting the disposition of the appeal by the Chief Justice, his obiter dictum concerning the statement of the law in Government of Kelantan v. Duff Development Company, Limited, [1923] A.C. 395, is not accepted. In that case Viscount Cave held on the facts that there had been a specific reference and was not prepared to hold that the arbitrator had acted illegally. None of the members of the Court expressed any dissent from Viscount Cave's statement of the law. The subsequent case F. R. Absalom Ltd. v. Great Western (London) Garden Village Society, Ltd., [1933] A.C. 592, (H.L.) held that, while recogniz­ing the distinction between cases where a question of law has been specifically referred and those where it is involved incidentally, there had not in that case been a reference of a specific question of law and set aside the award because there had been an error of law on the face of the award. That case did not state a proposition of law different from that of Viscount Cave, whose statement should not be flatly rejected.

Per Estey J.: The arbitration board in this case was a consensual board as indicated by the Chief Justice. However, as stated in the reasons delivered by Pigeon J., the question referred was not a specific question of law. The standard of review of an award of a consensual board is as stated by the Chief Justice. The scope of review for error of law on the face of the record entails a review of the dicta of Viscount Cave in Kelantan.

[Bell Canada v. Office and Professional Employees' Union, [1974] S.C.R. 335; Bradburn v. Wentworth Arms Hotel, [1979] 1 S.C.R. 846; Air-Care Ltd. v. United Steel Workers of America et al., [1976] 1 S.C.R. 2; McLeod v. Egan, [1975] 1 S.C.R. 517; Stimpson v. Emmerson (1847), 9 L.T. (O.S.) 199; Canadian Union of Public Employees Local 963 v. New Brunswick Liquor Corporation, [1979] 2 S.C.R. 227; Metropolitan Toronto Police Association v. Board of Commissioners, [1975] 1 S.C.R. 630;

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Kelantan v. Duff Development Company Limited, [1923] A.C. 395; F.R. Absalom Ltd. v. Great Western (London) Garden Vil­lage Society, Ltd., [1933] A.C. 592; City of Vancouver v. Brandram-Henderson of B.C. Limited, [1960] S.C.R. 539; Hodgkinson v. Fernie (1857), 3 C.B. (N.S.) 189; The King v. Duveen, [1913] 2 K.B. 32; Toronto v. Thompson, [1930] S.C.R. 120; Re International Nickel Co. of Canada Ltd. and Rivando, [1956] O.R. 379; R. v. Barber et al., ex parte Warehousemen and Miscel­laneous Drivers' Union, Local 419, [1968] 2 O.R. 245; Howe Sound Company v. International Union of Mine, Mill and Smelter Workers (Canada), Local 663 (1961), 29 D.L.R. (2d) 76, aff'd [1962] S.C.R. 318; Metropoli­tan Life Insurance Co. v. International Union of Oper­ating Engineers, [1970] S.C.R. 425; Anisminic Ltd. v. Foreign Compensation Commission, [1969] 2 A.C. 147; Bradley v. Canadian General Electric Co. Ltd., [1957] O.R. 316; L'Alliance des Professeurs Catholiques de Montréal v. Labour Relations Board of Quebec, [1953] 2 S.C.R. 140; Re Canadian Westinghouse Co. Ltd. and Local 164, Draftsmen's Association of Ontario, [1962] O.R. 17; International Association of Machinists and Aerospace Workers et al. v. Hudson Bay Mining and Smelting Co. Ltd., [1968] S.C.R. 113; Faubert and Watts v. Temagami Mining Co. Ltd., [1960] S.C.R. 235; N.S.W. Mining Pty. Ltd. v. Hartford Fire Ins. Co. (1972), 46 A.L.J.R., 391; Rex v. Northumberland Compensation Appeal Tribunal, ex p. Shaw, [1952] 1 K.B. 338; Kent v. Elstob (1802), 3 East 18, 102 E.R. 502; Hodgkinson v. Fernie (1857), 3 C.B. (N.S.) 189; John A. McRae & Co. v. Lemay (1889), 18 S.C.R. 280; Doe d. Stimpson v. Emmerson (1847), 9 L.T. (O.S.) 199; Re King and Duveen, [1913] 2 K.B. 32; Melbourne Harbour Trust Commissioners v. Hancock (1927), 33 A.L.R. 245; Attorney-General for Manitoba v. Kelly, [1922] 1 A.C. 268; City of Vancouver v. Brandram-Henderson of B.C. Ltd., [1960] S.C.R. 539; Hitchens v. British Coal Refining Processes, Ltd., [1936] 2 All E.R. 191; Taylor v. Barnett, [1953] 1 All E.R. 843; Darlington Wagon Co., Ltd. v. Harding, [1891] 1 Q.B. 245; Barton v. Blackburn (1934), 150 L.T. 327 referred to.]

APPEAL from a judgment of the Supreme Court of Nova Scotia, Appeal Division[1], allowing an appeal from a judgment of Macintosh J.[2] dismissing an application on motion for an order to set aside and quash an arbitral award on a griev­ance under a collective agreement. Appeal allowed, judgment of Maclntosh J. restored.

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John Merrick and Daniel Potter, for the appellant.

G. J. McConnell and Ronald A. Pink, for the respondent.

The judgment of Laskin C.J. and Spence and Dickson JJ. was delivered by

THE CHIEF JUSTICE (concurring in the result)—This is an appeal, which is here by leave of the Nova Scotia Court of Appeal, from a judg­ment of that Court, Cooper J.A. dissenting, allow­ing an appeal from a judgment of Maclntosh J. who dismissed an application by the respondent Union under s. 13(2) of the Arbitration Act, R.S.N.S. 1967, c. 12 to set aside an award made by a consensual arbitrator under the authority of a collective agreement between the appellant Com­pany and the respondent Union. The Nova Scotia Court of Appeal, in setting aside the award, directed that the matters in issue be remitted to the arbitrator for reconsideration, as permitted by s. 12(1) of the Arbitration Act.

Although the question whether the Nova Scotia Court of Appeal could properly grant leave to come here was not raised by the parties when this case came on for argument, there was, in my opinion, grave doubt whether the judgment in appeal was a "final judgment" under ss. 2(1) and 38 of the Supreme Court Act, R.S.C. 1970, c. S-19: see Toronto v. Thompson[3]. Nothing was finally determined by the judgment in appeal when the case was remitted for reconsideration. In the circumstances, the appeal having been argued on both sides in good faith and without counsel rais­ing the question or being alerted by the Court to the point that I have mentioned, I would grant leave nunc pro tune, pursuant to s. 41(2) of the Supreme Court Act. There are, in my view, impor­tant— issues in this case respecting the reviewability

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of awards of consensual arbitrators.

The case was argued below and in this Court on the footing that what was in issue was an award of a consensual arbitrator. The underlying principle in that respect has been that the parties, having chosen to have their dispute determined without recourse to the Courts, indeed, having contracted on that basis and being entitled to do so and to have their agreement carried out, there should be a minimum of interference by the Courts with the ultimate award. Of course, legislative intervention to prescribe areas of review, beyond what was open under the common law, would have to be accepted; in Nova Scotia, as in other jurisdictions in Canada which adopted the model of the English Arbitra­tion Act of 1889, provision exists for setting aside an award for "misconduct", this being provided by s. 13(2) of the Arbitration Act. Bias and fraud are among the categories of misconduct, and I would think a failure of natural justice, as for example, a refusal to hear submissions, is also included. How much further review is open has come to depend on the nature of the submission to arbitration: was a specific question of law referred to the arbitrator or a broader more general question in the course of which questions of law arise?

I leave this point for later mention in these reasons because what prompted the previous paragraph was considerable doubt on my part that the arbitration in this case fell into the class of consen­sual arbitration rather than statutory arbitration. The Nova Scotia Trade Union Act, 1972 (N.S.), c. 19, s. 40 provides that differences or grievances under a collective agreement, touching its meaning or violation, shall be dealt with through provision in the collective agreement for final settlement by "arbitration or otherwise" (the underlining is mine). The words "or otherwise" are not found in the Ontario Labour Relations Act, now R.S.O. 1970, c. 232, and it has long been held that the Ontario Act prescribes statutory arbitration, a conclusion reinforced by the fact that a statutory arbitration procedure is prescribed if a collective

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agreement fails to provide for compulsory arbitra­tion of grievances as final settlement thereof: see Re International Nickel Co. of Canada Ltd. and Rivando[4] and see also R. v. Barber et al., ex parte Warehousemen and Miscellaneous Drivers' Union, Local 419[5].

Strictly speaking, what was in issue in the Rivando case was whether certiorari lay to an arbitration board because alternative recourse to the provincial Arbitration Act was precluded by a statutory exclusion of this Act from any applica­tion to labour-management arbitration under a collective agreement. Some years later, the British Columbia Courts and this Court had to consider the question whether certiorari lay to an arbitra­tion board established under a collective agreement in British Columbia: see Howe Sound Com­pany v. International Union of Mine, Mill and Smelter Workers (Canada), Local 663[6]. The rele­vant British Columbia Statute at the time was the Labour Relations Act, 1954 (B.C.), c. 17 which by s. 22(1) provided for final and conclusive settlement of differences under a collective agreement through provision therein for "arbitration or other-wise", the same formula found in the Nova Scotia Act. The parties in the Howe Sound case did provide for arbitration under their collective agreement. The British Columbia Act, unlike that in Ontario considered in the Rivando case, did not exclude the application of the provincial Arbitra­tion Act nor did it prescribe a statutory arbitration clause for the parties if they failed to provide for a means of final and conclusive settlement under their collective agreement. What the statute did say, in s. 22(2), was that if the parties did not provide a means of settlement by arbitration or otherwise, the responsible Minister was required to prescribe a provision for them, that is a provision for settling grievances by arbitration or otherwise.

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It was, accordingly, held in the Howe Sound case that certiorari did not lie, despite the fact that the parties had opted for arbitration. Section 22 was not apt, so it was held, to give the arbitration board in that case statutory status, especially when the Minister had not been required to act under s. 22(2). Recourse for review had to be, as Cart­wright J. (as he then was) said for this Court, to the provincial Arbitration Act. The implication was, therefore, that the parties in the Howe Sound case had consensual arbitration.

The Nova Scotia Trade Union Act stands in between the Ontario Act above-mentioned and the British Columbia Act considered in the Howe Sound case. Although it does provide, as in the Howe Sound case, for "arbitration or otherwise", nonetheless it goes on in s. 40(2) to provide for an arbitration clause which is to be deemed to be included in the collective agreement if the parties themselves fail to provide a means of final settlement of grievances under their collective agreement. In this respect, it is similar to the Ontario legislation.

It may be that there should be a reconsideration of the procedural issue on which the Howe Sound case turned, and it would be desirable to bring into account legislation such as the present Nova Scotia Trade Union Act. I do not, however, think it should be done here. The Courts below have treated the present case as one of consensual arbi­tration and so have counsel in the case. In these respects this case is similar to Metropolitan Toronto Police Association v. Metropolitan Toronto Board of Commissioners of Police[7] and as in that case so in this one, I am content to proceed on the footing that what is under review is the award of a consensual arbitrator. I turn therefore to the issues on this basis.

The parties agreed upon the arbitrator and agreed upon his jurisdiction to entertain and determine a policy grievance. It was filed by the Union

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under article 6.07 of a collective agreement, which was executed in fact on or about September 16, 1974 but was declared to be effective for a three-year period as of March 31, 1974, that being the date following the expiry date of the predecessor collective agreement between the parties. Upon expiry of the previous agreement the parties had negotiated for a new agreement but were then unable to conclude one, and a legal strike followed which endured until the consummation of an agreement on or about September 16. The issue submitted to arbitration revolves around the effect of the legal strike upon holiday pay entitlement of employees as provided by article 19 of the collec­tive agreement and, particularly, articles 19.04 and 19.05.

I would have expected the grievance in the exact form in which it was filed to be part of the record. It is nowhere reproduced in any of the judgments, nor in the award of the arbitrator. Cooper J.A. in his dissenting reasons notes that "the issue before the arbitrator was whether employees accumulated seniority during the period of the strike so as to entitle them to paid holidays under articles 19.04 and 19.05 of the collective agreement". Later on in his reasons he says this:

It appears, as I understand it, to be common ground here that the parties have referred a specific question of law to the arbitrator as found by Mr. Justice Maclntosh. The arbitrator was asked whether or not employees accumulate seniority during the period of a strike there-by entitling them to paid holidays under articles 19.04 and 19.05 of the collective agreement. There was no dispute as to the facts.

MacKeigan C.J.N.S., whose disposition of the appeal was concurred in by Coffin J.A., also took the view that what was referred to the arbitrator was a pure or straight question of law, one con­cerned with the construction of the collective agreement. Coffin J.A., in his short reasons, did not address himself to the point but I think it is implicit in what he said that he too proceeded on the basis that the arbitrator was seized of a specif­ic question of law.

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Although all four judges before whom this case came were agreed that a specific question of law was put before the arbitrator (as contrasted with an issue in the course of whose determination questions of law arise), they differed as to the reviewability of the arbitrator's award. The judge of first instance was of the opinion that even if there be error of law on the face of the award, the arbitrator's answer, whether right or wrong, is not reviewable, unless there be jurisdictional error. Maclntosh J. then was faced with submissions of the Union that there was jurisdictional error, an excess of jurisdiction, in the improper admission and consideration of extrinsic evidence and, also, in failure to take into account material relevant to the making of the award. He rightly, in my opin­ion, rejected this second alleged ground of jurisdic­tional error as being nothing more than an allega­tion of misinterpretation of the collective agreement and this was an unreviewable error of law. It is not clear, however, whether he viewed the issue of an alleged improper admission of extrinsic evidence as going to jurisdiction—in my opinion, it does not—because he evaded the question by find­ing that there was an ambiguity in the collective agreement so as to make extrinsic evidence, in this case an instance of past practice, admissible. In the result, he rejected the Union's attack on the award.

MacKeigan C.J.N.S. and Cooper J.A. took a different view as to the scope of review of the award of a consensual arbitrator concerned with answering a specific question of law. They agreed that review was not open on the question of proper construction of the collective agreement which lay at the base of the referred question of law, but both were of the opinion that review was open on the grounds set out by Lord Cave in Government of Kelantan v. Duff Development Co.[8], at p. 409 where he said this:

… But where a question of construction is the very thing referred for arbitration, then the decision of the arbitrator upon that point cannot be set aside by the Court only because the Court would itself have come to a different conclusion. If it appears by the award that the arbitrator has proceeded illegally—for instance, that

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he has decided on evidence which in law was not admis­sible or on principles of construction which the law does not countenance, then there is error in law which may be ground for setting aside the award; but the mere dissent of the Court from the arbitrator's conclusion on con­struction is not enough for that purpose.

I shall return to this passage later in these reasons. It is enough to say at this point that the passage appears to me to negate what is said to be the governing principle where a consensual arbitrator's task is to decide a specific or straight question of law, namely, that his award is not reviewable for error of law on the face of the record.

MacKeigan C.J.N.S. and Cooper J.A., having adopted Lord Cave's position on reviewability of an award such as the one here, then differed as to how far review should go in this case. MacKeigan C.J.N.S. was of the opinion that review was open if the arbitrator committed "any legal or jurisdic­tional error" in deciding or failing to decide the question before him, such error being "so relevant and substantial as to invalidate the award". He included in such errors "failure to take relevant considerations into account, taking irrelevant ones too much into account, or just answering the wrong question". He also introduced as two other grounds of attack, indeed of direct attack on the arbitrator's determination of the specific question referred to him, namely, where a gross error has occurred in the decision of the very question referred and, second, where the arbitrator's inter­pretation of the collective agreement clauses which he is to construe is not one which the language of the clauses will reasonably bear. This latter ground of attack seems to me to blur the distinction between statutory arbitration and consensual arbi­tration, and I shall also return to this issue later in these reasons.

Cooper J.A. addressed himself only to the ques­tion whether the arbitrator wrongly considered extrinsic evidence and he agreed with Maclntosh

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J. that there was latent ambiguity in the relevant clauses of the collective agreement and that, accordingly, extrinsic evidence was admissible. Not without doubt, he concluded that the arbitrator had related the extrinsic evidence to the ambiguity. In the result, he affirmed the decision of Maclntosh J. that the award was not reviewable. Coffin J.A. agreed that there was ambiguity in the collective agreement but he also agreed with Chief Justice MacKeigan on the main point taken by the latter, namely, that the arbitrator had asked himself the wrong question and had failed to answer what the Chief Justice said was "the key and only question that needs to be answered".

I turn therefore to the reasons of MacKeigan C.J.N.S. on this issue. I should note, before doing so, that the Chief Justice also held the opinion, not shared by the other judges who heard the case, that the arbitrator had "also permitted himself to be influenced by extrinsic evidence which was wrongly admitted". MacKeigan C.J.N.S. was of the opinion that the arbitrator had not used the extrinsic evidence to resolve an ambiguity but rather, erroneously, to help him draw an inference against the position of the Union on the main issue. In the Chief Justice's opinion, there was no ambiguity to support the admissibility of extrinsic evidence.

Coming then to the basis of the majority judg­ment in the Court of Appeal that the wrong question was asked, I must repeat at the outset the agreement of all judges in the case (implicit though it be in Coffin J.A.'s reasons) that the arbitrator was required to determine a specific question of law which was whether the employees of the Company accumulated seniority during the period of their legal strike so as to entitle them, if they otherwise qualified, to paid holidays under articles 19.04 and 19.05 of the collective agreement. The arbitrator dealt with this question in a far from crisp fashion. He relied on, as extrinsic evidence, a back-to-work agreement of 1969, which was made part of the collective agreement then entered into and under which it was agreed that the employees who had been on strike would

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be considered as having been laid off, and thus entitled to continue to accumulate seniority during the strike period. The arbitrator emphasized that there was no such agreement made in respect of the 1974 strike. For him, the important question revolved around the meaning of the word "service", being time spent on the job for which pay was received, and he concluded that unless an employee was working he did not accumulate seni­ority save as express provision was made otherwise as under articles 9.04, 9.05 and 9,06 of the 1974 agreement. In the result, the arbitrator determined (to use his own words) "that seniority does not accumulate during the period of the strike with regard to holiday pay". This was a clear answer to the question before him.

The relevant terms of the collective agreement are articles 9.01, 9.02, 9.04, 9.05, 19.04, 19.05 and 25.03. They read as follows:

9.01 For the purpose of this agreement and unless otherwise stipulated herein, "seniority" means the length of service in the bargaining unit.

9.02 Seniority of an employee shall not count until he has completed an accumulated period of thirty-eight (38) days worked in the employ of the Company.

9.04 Whenever an employee with acquired seniority rights is away from work on a leave of absence or because of a disciplinary suspension or illness or injury or any other justifiable reason, his seniority shall accumulate during such absence, unless otherwise stipu­lated within the present agreement.

9.05 Whenever an employee is laid off, his seniority continues to accumulate during such period of time that his name appears on the recall list.

19.04 Subject to the provisions of Article 19.05, an employee is qualified to receive pay for the above hol­idays if he has attained seniority through completion of his probationary period and he has worked seven (7) hours on the work day immediately prior to, and seven (7) hours on the day after, each of the above-named holidays. Absence from work for reasonable cause on the day before or after the holiday will be counted as time worked in qualifying for holiday pay.

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19.05 In no case shall the number of consecutively paid holidays (Christmas Holiday Period) exceed the number of full months of accumulated seniority attained on the day prior to commencement of said consecutively occurring holidays.

25.03 For the purposes of this agreement, the word "service" includes any period of time during which an employee accumulates seniority as well as any period of employment with the Company in any capacity whatsoever.

It is obvious from a reading of articles 19.04 and 19.05, taking these provisions alone, that employees on strike could not qualify for pay for any designated holiday occurring during the strike period. Certainly, the notion of a strike, a legal strike, taking place during the currency of a collec­tive agreement is alien to the collective agreement in this case under which the arbitration proceeded; article 7.01 is express on this point. Should it not then have been necessary, if the strike period was to be characterized as a lay-off or was otherwise to be regarded as not interrupting the accumulation of seniority, that express provision be made to that effect? None was made, but it was the view of the Court of Appeal majority that the retroactive effect given to the collective agreement made article 9.04 applicable and obliged the arbitrator to focus attention on its provision for continuing accumulation of seniority if an employee with seniority was away from work "on a leave of absence or because of a disciplinary suspension or illness or injury or any other justifiable reason". The Court of Appeal majority concluded that, there having been a legal strike during the speci­fied agreement period, although arising from the retroactive dating and effect of the agreement, the arbitrator ought to have considered whether it provided "other justifiable reason" for absence from work, and he failed to do this.

True, he failed to do this explicitly but he did consider the no-strike clause article 7.01, and he did refer to article 9.04 but obviously ruled out its application. Chief Justice MacKeigan states that the arbitrator asked himself "the wrong question" but I cannot find anywhere in his reasons what this

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wrong question was. It seems to me, and it is patent on the face of the award, that the arbitrator, not very elegantly perhaps, addressed himself to the very question he was asked to consider. In my opinion, it was Chief Justice MacKeigan and as well Coffin J.A. who raised another question, a question within the main question, and purported to make it the essential issue for determination, an issue which, in my opinion, the arbitrator con­sidered and decided against the Union's conten­tion.

I think it important to say a word here about the "wrong question" syndrome. The term "wrong question" first came into the vocabulary of this Court in Metropolitan Life Insurance Co. v. International Union of Operating Engineers[9]. This Court took the term and the concept that it repre­sented from the judgments of the House of Lords in Anisminic Ltd. v. Foreign Compensation Commission[10], especially the reasons of Lord Reid at p. 171, the reasons of Lord Pearce at p. 195 and those of Lord Wilberforce at p. 210. The Anismin­ic case was concerned, inter alia, with an ouster clause, a privative clause as it is usually called in Canadian case law, protecting "determinations" by a statutory tribunal from being questioned in any court. According to the majority of the House of Lords, there may be "determinations" in fact which are not so under the law governing the tribunal's exercise of authority. Considerable sub­tlety may be involved in the road to such a conclu­sion, as is evident when one considers the different view taken in the Anisminic case in the English Court of Appeal as reflected in the reasons of Diplock L.J., as he then was: see [1967] 3 W.L.R. 382 at pp. 391-413. Answering the "wrong ques­tion" according to the House of Lords amounts to a departure from jurisdiction, and Cartwright C.J.C. who delivered the judgment of this Court in the Metropolitan Insurance case, supra, at p. 435, adopted this view against the operation of a priva­tive clause which he said could not avail as protection.

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I am not concerned here to re-examine the Metropolitan Insurance case, which was con­cerned with the decision of a statutory tribunal, the Ontario Labour Relations Board, and not with that of a consensual arbitrator. In my opinion, talk about the right or wrong question is merely a euphemism for addressing the issue which is prop­erly before the arbitrator. It provides a form of judicial control which goes beyond error of law, as that has been hitherto understood, and it is fraught with the danger of substitution of judicial opinion for that of the tribunal which the Legislature has put in place or for that of the arbitration board or arbitrator selected by the parties. There may, of course, be cases, rare ones I would think, in which an arbitration board or an arbitrator in labour-management relations matters has completely misunderstood or misconceived the task before it or him; in short, it or he has not addressed the issue—I mean here, the main issue and not sub­sidiary or ancillary considerations—which has been committed for determination. That is not true in the present case. The arbitrator, whether cor­rectly or incorrectly, has met and determined the main issue, indeed the single question before him, and there is no room for interference on the ground that he had failed to address himself to the right question.

In my opinion, for a Court to go behind the issue before a consensual arbitrator to whom a specific question of law has been referred for determina­tion, which is the present case, and to find that a subordinate question has not been explicitly addressed, again as in this case, is to enlarge the scope of review open in respect of such consensual arbitration when it has been limited by judgments of this Court. Otherwise, there would be an equivalence with the scope of review generally open in the case of a statutory tribunal. This is subject, of course, to the operative effect of a privative provision which would exclude review of alleged errors of law but not of errors of jurisdic­tion, of which the typical one in the cases is a denial of natural justice: see Bradley v. Canadian General Electric Co. Ltd.[11]; L'Alliance des Pro­fesseurs Catholiques de Montreal v. Labour Relations Board of Quebec[12].

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There are no such issues here.

In my opinion, equally untenable is the sugges­tion of Chief Justice MacKeigan that the award of a consensual arbitrator under a collective agreement, to whom a specific question of law has been referred, may be impeached if he has given clauses of the collective agreement an interpretation which their language will not reasonably bear. This has been a ground of review, open but cautiously approached, where statutory arbitration is con­cerned: see Re Canadian Westinghouse Co. Ltd. and Local 164, Draftsmen's Association of Ontario[13] To introduce it into consensual arbitra­tion is to strike at the very foundation of such arbitration when it is concerned with a specific question of law, that is of construction of the collective agreement. It may be different where an ordinary grievance is submitted to consensual arbi­tration, but even in such cases there has been a reluctance to interfere with the arbitrator's award in so far as it involved interpretation of a collective agreement: see International Association of Ma­chinists and Aerospace Workers et al. v. Hudson Bay Mining and Smelting Co. Ltd.[14] This Court has said quite plainly, and has followed English cases to the same effect, that even if the construc­tion put upon the collective agreement be, in the view of a Court, a wrong one, the award must stand: see Faubert and Watts v. Temagami Mining Co. Ltd.[15], referring to F.R. Absalom Limited v. Great Western (London) Garden Vil­lage Society, Limited[16]; and see also N.S.W. Mining Pty. Ltd. v. Hartford Fire Ins. Co.[17], per Barwick C.J. at pp. 391-392.

I turn, finally, to the passage from the reasons of Lord Cave in the Kelantan case, referred to earlier. The passage must be considered in the

[Page 196]

light of the common law development of review of arbitration awards, a development which was necessarily adopted by Canadian courts when they were subject to the overriding authority of the Privy Council and, through it, of the House of Lords until appeals to the Privy Council were abolished in late 1949. As Lord Denning noted in his reasons in Rex v. Northumberland Compensa­tion Appeal Tribunal, ex p. Shaw[18], at p. 351, error of law on the face of the award as a ground for challenging the award, for example, by motion to set it aside or by resisting an action upon it, came into the common law through Kent v. Elstob[19], which added that ground of attack to corruption or fraud, which had theretofore been the recognized grounds for challenging awards of consensual arbitrators. Error of law on the face of the award was accepted, with regret, as a ground of challenge but held to be established in Hodg­kinson v. Fernie[20], at p. 202 C.B. (N.S.), at p. 717 E.R., per Williams J. This enlarged scope of review was accepted by this Court in John A. McRae & Co. v. Lemay[21], but in that case the award was good on its face and hence was not set aside.

An exception developed, however, to this by the middle of the nineteenth century, as appears from Doe d. Stimpson v. Ernmerson[22], where Wilde C.J. spoke as follows:

The Court has no more authority to review the arbitra­tor's decision upon a point of law referred to him than upon a point of fact. Whatever may have been formerly the understanding, it is enough to say that in modern times the decisions are distinct and uniform; that if parties choose to refer a matter of Iaw to an arbitrator, his decision upon the matter is final.

The exception was regarded as established in Re King and Duveen[23], in the following words of Channell J. (at p. 35):

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It is no doubt a well-established principle of law that if a mistake of law appears on the face of the award of an arbitrator, that makes the award bad, and it can be set aside ... but it is equally clear that if a specific question of law is submitted to an arbitrator for his decision, and he does decide it, the fact that the decision is erroneous does not make the award bad on its face so as to permit of its being set aside. Otherwise it would be futile ever to submit a question of law to an arbitrator.

The scope of the exception (which, in a sense, was an exception to an exception from the original common law) came to be considered in two judg­ments of the House of Lords, the Kelantan case and the Absalom case, which I find difficult to reconcile. Both cases show that there may be an initial difficulty in determining whether a specific question of law has been referred to consensual arbitration. The Law Lords in Kelantan differed on the matter, Viscount Cave holding that a spe­cific question of law had been referred, Lord Trevethin holding that there was no such specific reference and Lord Parmoor holding that it was unnecessary to decide the question. In the Absa­lom case, the House of Lords differed from the Court of Appeal which had held that a specific question of construction of a provision of a contract had been specifically referred to arbitration. Cases in Canada which have reached this Court have also exhibited a difference of opinion between the Court appealed from and this Court on wheth­er or not a specific question of law had been referred. In both Bell Canada v. Office and Professional Employees' International Union, Local 131[24] and Metropolitan Toronto Police Association v. Metropolitan Toronto Board of Commissioners of Police, supra, this Court reversed the Ontario Court of Appeal which had held that specific questions of law had been referred to consensual arbitrators, and concluded otherwise, namely, that what was before the arbi­trators were grievances which had come up in the ordinary way, and hence the awards were more broadly reviewable than they would otherwise have been.

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However difficult it may be at times to determine whether a specific question has or has not been referred, I think it is more likely to be such a question where, as here, a policy question has been put to the arbitrator. Moreover, as Barwick C.J. put it in the N.S.W. Mining Co. case, supra, it is the nature of the question that determines the matter and that is not altered even if the arbitrator has to find some facts in order to decide it. I am satisfied in this case, as were the Courts below, that the arbitrator was faced with answering a specific question of law.

In the passage from Viscount Cave's reasons in the Kelantan case quoted above, and setting out the scope of review of an award on a specific question of law, being a question of construction, the learned Law Lord draws what is to me a perplexing distinction between immunity from review of what the Court would consider an erroneous construction and vulnerability of the award to review if the arbitrator proceeded on erroneous principles of construction or if he made his award by acting on evidence not admissible in law. It seems to me that construction is enveloped in guides thereto—"principles" is to me too strong a word when one considers how wide are the choices of canons of construction—and if the arbi­trator is to be the master of his decision on con­struction he must be given equal leeway in determining his approach to that decision. So it should be also on issues of evidence if there are any facts to be found in order to arrive at a decision on construction. In the present case, it was only Chief Justice MacKeigan of the four judges concerned with reviewability of the award who took objection to the arbitrator's reference to an antecedent set­tlement of a strike, and I need say no more on this point, even if Viscount Cave's evidence qualifica­tion is accepted.

In addition to the views expressed by Viscount Cave in the passage quoted above, he had something further to say on the question of reviewabili­ty in a later passage of his reasons, as follows (at p. 411):

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I come therefore to the conclusion that the award in the present case cannot be set aside only because the arbitrator may be thought to have been mistaken in his construction of the Deed of Cancellation, but only if it appears on the face of the award that he has proceeded on evidence which was inadmissible or on wrong princi­ples of construction, or has otherwise been guilty of some error in law.

This passage appears to extend review beyond what was said in the first passage previously quoted. I refer to the words above-quoted "or has otherwise been guilty of some error in law". If this is the rule, where is the difference between review of statutory arbitration and of consensual arbitra­tion, either of a general issue or of one concerning a specific question of law? Small wonder then that Starke J. of the High Court of Australia observed in Melbourne Harbour Trust Commissioners v. Hancock[25], at p. 251:

And what, may I ask, is covered by the words "otherwise been guilty of some error in law"? Some day, no doubt, the passage will be elucidated, but a decision can be reached in this case without endeavouring to expound the qualification .. .

The fact is, moreover, that Viscount Cave's opinions in the passages that I have quoted did not carry the majority of the House of Lords. Only Lord Shaw or Dunfermline agreed with him. Lord Sumner agreed in the disposition only. Although the Court was unanimous in the result, Lord Parmoor was content to view the matter either as relating to a specific question of law or not, and Lord Trevethin said that a general question was referred. All agreed that there was no error of law on the face of the award. I find it difficult, moreover, to square Viscount Cave's position with his approval of the passage from the reasons of Chan­nell J. in Re King and Duveen, supra, which I have quoted above, a passage also quoted with approval by Lord Parmoor when he was discussing reviewa­bility of an award where a specific question of law had been referred.

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Ten years after the Kelantan case, the House of Lords decided F.R. Absalom Ltd. v. Great Western (London) Garden Village Society Ltd., supra. There it was of the view, as I have already indicat­ed, that there was not a reference of a specific question of law. There was a majority opinion in that case, delivered by Lord Russell of Killowen. Separate reasons were delivered by Lord Warrington of Clyffe and by Lord Wright, and the former agreed also both with Lord Russell of Killowen and Lord Wright. In his own reasons he stated the distinction between the two types of consensual arbitration and then, referring to the Kelantan case, he said (at p. 602) that "I think it is clear that this case decides that, in order to come within the rule that a decision of an arbitrator on a point of law is final, it must be shown that the point is specifically referred".

Lord Russell of Killowen, in stating the distinc­tion, says at p. 607 that where a specific question of law is referred "no ... interference is possible upon the ground that it so appears that the deci­sion upon the question of law is an erroneous one". In mentioning a series of cases in which the dis­tinction is made, including the Kelantan case, Re King and Duveen and the Privy Council's judg­ment in Attorney-General for Manitoba v. Kelly[26] which, at p. 283, finds the position as it was stated in Re King and Duveen, he does refer to Viscount Cave's statement of permissible interference where the arbitrator has proceeded illegally (e.g. on inad­missible evidence) but without making any par­ticular point of it. Similarly, he refers to Lord Parmoor's acceptance of the distinction and to Lord Trevethin's as well quoting the latter as saying that on a submission of a specific question of law, the decision cannot be questioned though the law be bad on the face of the award. Lord Wright, in his concurring reasons, in distinguish­ing between a reference of what he called "the whole question" and a reference of a specific question of law, referred in the latter connection to the Kelantan case and quoted Viscount Cave (saying, wrongly in my view, that his opinion was that of the majority) to the following limited

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extent, being only the first part of the passage on p. 409, supra, as follows:

But where a question of construction is the very thing referred for arbitration, then the decision of the arbitrator upon that point cannot be set aside by the Court only because the Court would itself have to come to a different conclusion.

Lord Wright did not include the grounds of inter­ference stated by Lord Cave in respect of an award on a reference of a specific question of law.

When this Court came to consider the reviewa­bility of awards of consensual arbitrators in the Faubert and Watts case, supra, Chief Justice Kerwin, for the Court, adverted to the distinction in the nature of the submission to arbitration, as above-mentioned, and relied on what was said in the Absalom case on the reviewability of awards under a reference of a specific question of law, namely, that in such a case there can be no interference by the Courts with an award on the ground of an error of law on the face of the award. There was no mention of the Kelantan case, but I am bound to say that it may have been because this Court was concerned with an award on a whole question and not with an award on a refer­ence of a specific question of law. City of Vancou­ver v. Brandram-Henderson of B.C. Ltd.[27], heard a few days after this Court's decision in the Faub­ert and Watts case and by the same Bench, likewise did not involve review of an award on a specific question of law (it related to proper indemnity for damage to certain property), and Locke J.'s reference there to Viscount Cave's words, in speaking also for three other members of this Court, was made without any reference to the distinction in the types of consensual arbitration.

In the Bell Canada case, supra, the majority of the Court held that the issue before the arbitrator concerned a grievance which came up in the ordi­nary way and hence the award was reviewable for error of law on its face, in this case in a misinter­pretation by the arbitrator of his powers under the

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collective agreement. The Court did not have to inquire into the scope of review where a specific question of law was referred. So too in this Court's majority judgment in the Metropolitan Toronto Police Association case. Martland J., speaking for the majority, referred to Viscount Cave's words on reviewability where a specific question of construc­tion is submitted to arbitration and, although on his view of the case before him there was no submission of a specific question of law so that he did not have to consider those words, he did say, in a statement which was obiter, that he would not be prepared to hold that the Court of Appeal of Ontario (which had characterized the submission as one of a specific question of law) erred in applying Viscount Cave's principles of review.

Both Russell on Arbitration (18th ed. 1970) at pp. 359-60, and 2 Halsbury (4th ed. 1973), at p. 60, accept Viscount Cave's views on reviewability of consensual award on a reference of a specific question of law. There is no discussion of the matter in Russell and I find puzzling the opening statement of the paragraph where the matter is mentioned, puzzling because it is immediately followed by a quotation of Viscount Cave's qualifica­tions. The opening statement reads as follows:

The rule that an error of law, if it appears on the face of the award, is a ground for remitting it or setting it aside, is an exception to the general rule that an award is final as to both fact and law, and will not be applied where the parties have specifically referred a question of law to arbitration.

Then come the words: "In such cases an award will stand, notwithstanding that it is erroneous, unless" and Viscount Cave is quoted. The facts of three cases are given in the material that follows, all dealing with references of specific questions of law and in each case there is the unqualified assertion that there could be no interference with the award because of error of law on its face. The three cases are also included in the treatment of the matter in 2 Halsbury, supra, and they are, respectively Hitchens v. British Coal Refining Processes, Ltd.[28],

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Re King and Duveen, from which I have already quoted earlier in these reasons, and Taylor v. Barnett[29] (holding it to be "misconduct" to make an award enforcing an ille­gal contract, an obvious limitation). Two other cases are mentioned in Russell, namely, Darlington Wagon Co., Ltd. v. Harding[30], which con­cerned a general reference to consensual arbitra­tion and the award was nonetheless held to be unreviewable, and Barton v. Blackburn[31], where the English Court of Appeal was divided on whether there was a reference of a specific ques­tion of law (the majority said there was not) but it preferred to follow and apply the Absalom case rather than the Kelantan case although Viscount Cave's words were urged upon it.

It seems to me that Viscount Cave's views have been politely laid to one side in the English cases in favour of the views expressed in the later Absa­lom case, and repetition of them in the two texts above-mentioned is not supported by the cited authorities. I have already indicated my own view, which I risk repeating, that to adopt Viscount Cave is to eliminate any telling distinction between review of an award on a reference of a general question or issue and review of an award on a specific question of law. Certainly, in the field of labour-management arbitration, which is an ongo­ing process and not the episodic process under which the common law rules of review have devel­oped, there is a good case for affirming a hands-off policy by the Courts on awards of consensual arbitrators, subject to bias or fraud or want of natural justice and, of course, to jurisdiction in the strict sense and not to the enlarged sense which makes it indistinguishable from questions of law. At least this should be so where specific questions of law are referred. In other cases of a reference to consensual arbitration, the approach to review ought also to be marked by caution in the light of the fact that the parties to a collective agreement have thereby established their own legislative framework for the regulation of the work force engaged in the enterprise, have designated their

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own executive and administrative officers to apply the agreement on an ongoing basis and have pro­vided for their own enforcement machinery to resolve and, if need be, to effect a final and binding settlement of all differences arising under the terms of the agreement.

This Court is not, of course, bound by the Kelantan case but, in any event, I do not think that Viscount Cave's observations, which have been canvassed in these reasons, should be followed by this Court. They are much too broad in respect of an award on a reference of a specific question of law, and I much prefer the more restrained view expressed in Re King and Duveen, supra, and in the Absalom case, supra. Of course, the present case involves none of the points of vulnerability of an award to review that Viscount Cave advanced, but I felt it to be important to canvass the matter because Courts below have been wont to rely on them.

In the result, I would allow the appeal, set aside the judgment of the Nova Scotia Court of Appeal and restore the judgment of Maclntosh J. dismiss­ing the respondent's application to set aside the award. The appellant is entitled to costs through-out.

The reasons of Pigeon, Beetz and Pratte JJ. in which Martland and Ritchie JJ. also concurred were delivered by

PIGEON J.—Following expiry on March 30, 1974 of the Collective Agreement between the parties, the employees were on a lawful strike between June 21 and September 16, 1974. The strike ended when a new collective agreement was made retroactive to March 31, 1974. In this agreement, provisions for paid holidays make reference to accumulated seniority, in particular article 19.05 reads:

19.05 In no case shall the number of consecutively paid holidays (Christmas Holiday Period) exceed the number of full months of accumulated seniority attained on the day prior to commencement of said consecutively occurring holidays.

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The Company took the position that seniority did not accumulate during the strike with regard to holiday pay. The matter was submitted to arbi­tration before Judge G. Hughes Randall as Sole Arbitrator appointed by mutual consent of both parties under the provisions of the agreement which include the following:

ARTICLE 6—GRIEVANCE PROCEDURE

6.01 A grievance is any disagreement arising out of this agreement or its application or interpretation, including any disciplinary action or discharge. Both parties agree that grievances should be submitted and dealt with as promptly as possible and during working hours.

6.05 THIRD STAGE: If the answer of the Production Superintendent is not satisfactory or if no written answer is forthcoming within the time stipulated above, the grievance shall be submitted to the Plant Manager by the Union Plant Committee. The Plant Manager shall answer in writing to the Chairman of the Union Plant Committee within ten (10) working days following submission of the grievance.

6.06 If the answer of the Plant Manager is not satisfac­tory or if the written answer is not forthcoming within the time stipulated above, the grievance may be submit­ted within a further ten (10) working days, to an arbitrator chosen by mutual consent of the parties hereto. Unless there is agreement on the choice of the arbitrator within the following five (5) working days, the arbitrator shall be designated by the Minister of Labour of the Province of Nova Scotia. Alternatively, the parties hereto may agree, at any time during the term of this agreement, to appoint an arbitrator chosen by mutual consent to serve as arbitrator for any and all grievances arising out of this agreement during the balance of the term of this agreement.

6.07 The Company may submit a grievance to the Union and the Union may submit a grievance to the Company. Such grievances will be of a general policy nature and will be submitted directly to the third step of the grievance procedure. Failing agreement, the griev­ance will be subject to the arbitration procedure herein provided.

6.11 In the case of a grievance related to the application of seniority provisions or related to disciplinary action or discharge, the burden of proof rests with the Company.

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6.14 The arbitrator shall not have any jurisdiction to alter or change this agreement, to decide on issues not mentioned in the written grievance or to render a deci­sion inconsistent with the terms and provisions hereof.

Although on the motion by the Union to set aside the award, the Company put in an affidavit of its solicitor stating his "opinion and belief that the issues (sic) submitted to the arbitrator was a specific question of interpretation or construction of the Collective Agreement", neither party pro­vided the Court with a copy of the actual submis­sion, that is, the policy grievance submitted by the Union to the Company and it is unfortunately not reproduced in the award. However, at the outset, the arbitrator recited that the parties, before the hearing commenced, had agreed among other things:

(b) That as Sole Arbitrator I was properly constituted as the Impartial umpire in accordance with the terms of the Collective Agreement.

(c) That I had jurisdiction and that this was a policy grievance under Article 6.07.

Later on, the Arbitrator stated the issue as follows:

The issue in this arbitration is whether or not employees accumulate seniority during the period of the strike or not, thereby entitling them to paid holidays under Article 19.04 and .05 and benefits under the SUB Plan.

In fact the arbitration dealt only with the enti­tlement to paid holidays because on the following page, we read:

Although the Company was prepared to waive Article 23.03 the Union were not, and therefore my decision in no way affects the SUB Plan.

The provisions of the collective agreement deal­ing with seniority which were relevant to the issue before the Arbitrator include the following:

9.01 For the purpose of this agreement and unless otherwise stipulated herein, "seniority" means the length of service in the bargaining unit.

9.04 Whenever an employee with acquired seniority rights is away from work on a leave of absence or

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because of a disciplinary suspension or illness or injury or any other justifiable reason, his seniority shall accumulate during such absence, unless otherwise stipu­lated within the present agreement.

9.05 Whenever an employee is laid off, his seniority continues to accumulate during such period of time that his name appears on the recall list.

25.03 For the purposes of this agreement, the word "service" includes any period of time during which an employee accumulates seniority as well as any period of employment with the Company in any capacity whatsoever.

The Arbitrator heard evidence from both sides including evidence of past practice and of what had occurred after a previous strike. In this respect he said in his award:

Mr. Merrick (Solicitor for the Company) has placed great relevance to the back-to-work agreement in 1969, being part of the Collective Agreement negotiated at that time. In 1974 no such agreement was entered into between the parties. In 1969 it was agreed that for the period of the strike all employees would be considered laid off during the strike, thereby specifically bringing all employees within Article 9.05 and seniority would continue for that period. I find that I also place the same relevance to this fact.

The Arbitrator upheld the Company's decision, the essential part of his reasons being:

The whole issue, in my opinion, involved the meaning to be given to the word 'service'. The word 'service' in relation to this Agreement means time spent on the job for which an employee is receiving pay from his employ­er while being a member of the bargaining unit. Therefore, unless an employee is working, he does not gain seniority unless he comes within the situations in the Agreement which extend seniority, such as Articles 9.04, 9.05 and 9.06.

In the Nova Scotia Supreme Court, Trial Divi­sion, the Union's motion to set aside the award was dismissed by A. M. Maclntosh J. In the Appeal Division, MacKeigan C.J. held that the arbitration award was invalid. He said in part:

I respectfully suggest that the key and only question that needs to be answered is: Does absence from work on a legal strike constitute an "other justifiable reason"

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within the meaning of article 9.04? The learned arbitrator unfortunately did not answer or attempt to answer this question. He instead answered a "wrong question" and also permitted himself to be influenced by extrinsic evidence which was wrongly admitted.

The question has not been argued, and we need not decide, whether "accrued benefits" mean only benefits of a pension nature or include other fringe benefits accrued during a lawful strike, such as the seniority accumulation in issue in the present case. That question would accurately arise here if a collective agreement had not been made after the strike and had not been made retroactive to cover the hiatus between the expiry of the old agreement and the signing of the new one.

Where, as here, that hiatus or intervening period disappears because of the full retroactivity of the new agreement, all rights or benefits under that agreement, including fringe benefits such as the accumulation of seniority rights, must prima facie continue to have accrued during that retroactive period. Specific lan­guage would be required now to divest an employee of any such right merely because he participated in a lawful strike. In such circumstances, being in a lawful strike must be a "justifiable reason" for being absent from work.

Coffin J.A. agreed with MacKeigan C.J. that absence from work on a legal strike constituted "other justifiable reason", he did not agree that the Arbitrator had erred in admitting evidence of the 1969 agreement. He agreed with Cooper J.A. that the trial judge was correct in holding that there was enough ambiguity to justify the recep­tion of such evidence. In my view, this conclusion is unchallengeable and this leaves only two ques­tions on this appeal:

1) The proper construction of the agreement or as MacKeigan C.J. preferred to put it, the correct question;

2) Whether any interference with the award is precluded because as Maclntosh J. and Cooper J.A. held, "the parties have referred a specific question of law to the Arbitrator".

Taking the second question first, it appears to me that the proper rule was stated by Judson J. speaking for the majority in Bell Canada v. Office and Professional Employees' Union[32].

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In that case, the Ontario Court of Appeal had held affirming Morand J., that the grievance submitted to arbitration was a specific question of law. It had arisen when an employee was retired under Bell Canada's Pension Plan. He submitted a grievance that he had been dismissed without sufficient and reasonable cause. Bell replied that he had been retired, not dismissed. Pursuant to the Collective Agreement, the Union gave notice that it was submitting the name of an arbitrator. He was agreed to without prejudice to the contention that the grievance was not a proper grievance for arbi­tration unde [sic] the Collective Agreement. I am now quoting from Judson J. (at pp. 339-340):

The company and the union agreed that the only matter that the arbitrator would deal with at the first hearing would be the preliminary objection of the com­pany that the grievance was not arbitrable. The arbitrator determined that retirement was a form of dismissal; that the grievance was covered by art. 8 of the collective agreement and was therefore arbitrable. The company appealed from this decision. Both the judge of first instance and the Court of Appeal dismissed the appeal on the very narrow ground that the case was one in which a specific question of law had been referred to an arbitrator for decision and that the Court could not intervene even if it appeared to the members of the Court that the arbitrator's decision upon this question of law was erroneous.

... This is not a case where the parties by agreement ousted the jurisdiction of the courts to determine a question of law by choosing to have that question determined by a judge of their own making. This matter came up in the ordinary course on the hearing of a grievance which was characterized by the employee as a dismissal and by the company as a retirement on pen­sion. It is obvious from the letter which the company wrote when it consented to the appointment of the arbitrator that there would be a preliminary objection to jurisdiction. This was all that was done on the first hearing before the arbitrator. He made his decision to proceed with the arbitration. There was nothing to prevent the company from asking the Court for an immediate review of this decision. The arbitrator's decision

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was one which the Court ought to have reviewed and reversed. (Emphasis added.)

In my view, the situation in the present case is exactly the same. The question came up in the ordinary course of the hearing of a grievance by the Union against the decision of the Company with respect to the computation of seniority for entitlement to paid holidays and it turned out that the disagreement over this computation depended entirely on the proper construction of the agreement. In my view this is not, any more than in the Bell Canada case, an agreement to refer a specific question of law to an arbitrator; it was there held that the parties had not agreed to refer a specific question of law to the arbitrator when agreeing that it was proper for the arbitrator to determine first whether the grievance arose out of a dismissal within the meaning of the agreement. The griev­ance in the present case never became an agreement to refer a specific question of law just because both parties agreed what the issue raised was.

I will point out that in the recent case of Bradburn v. Wentworth Arms Hotel[33] the unanimous judgment of this Court quashed an arbitration award on a grievance which, as in the present case, raised only a question of law, namely, the con­struction of a collective agreement. In that award the issue was stated in the following terms:

On February 1, 1972, employees of the company went on strike. A new collective agreement was executed and the employees returned to work on March 8, 1972. However, prior to the strike on January 29, 1971, the company served notice on the employees and the union that the company considered the collective agreement remained in effect pursuant to the provisions of Article 13.02 and that any strike would be unlawful.

This arbitration therefore is concerned with the issue of whether the strike that took place between February 1, 1972, and March 8, 1972, was an unlawful strike, and in order to answer that question it must be determined whether the collective agreement entered into between the parties on February 15, 1969, remained in effect during that period and until March 8, 1972, when the new agreement was signed.

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The Arbitration Board on the construction of the Collective Agreement which had been in exist­ence prior to the strike determined that, in spite of the notice given at the proper time by the Union, the agreement had remained in force and the strike was illegal. Our conclusion contrary to this view was expressed as follows by Estey J. speaking for a majority (at p. 861):

It would take the clearest possible language in my view to drive a court to an interpretation which would find the parties voluntarily stripping themselves of the oppor­tunity to call to their aid the provisions of the statute to change a collective agreement, and to substitute for those proceedings so traditional now in the labour rela­tions of our community, a permanent agreement con­tinuing until both parties agree upon a replacement agreement.

Other members of the Court reached the same conclusion on a different basis but no one held that, because the employer's grievance raised only a question of law, the construction of a collective agreement, the arbitration award could not be interfered with. In fact, it was set aside.

In Air-Care Ltd. v. United Steel Workers of America et al.[34] the grievance that went to arbitra­tion was in the following terms:

[TRANSLATION] The company has reduced the work week on October 9, 1970 for employees in Plant No. 1 and on October 23, 1970 for all employees in Plants Nos. 1 and 2.

The union maintains that the company had no right to reduce the work week.

We are requesting the company to restore the normal 40-hour week, and to reduce the work force if there is a shortage of work.

We are requesting the company to make good the wages lost to all employees concerned.

The arbitration award upheld the grievance by virtue of the clause in the collective agreement requiring that lay-offs because of shortage of work be made in order of seniority. This was construed as prohibiting shut-downs and as requiring that the work force be reduced by lay-offs in order of seniority. Quashing the award, Dickson J. said (at p. 7):

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The Company had the right, in my view, under the terms of the agreement, to reduce the hours of work for a period, rather than impose a lay-off. When the Arbi­tration Board held otherwise it added to the agreement by imposing upon the Company a duty, not assumed through collective bargaining, to lay off employees whenever there was a shortage of work, and in doing so the Board acted in violation of Art. 7.03 which expressly limited the jurisdiction of the Board to deciding the matter within the existing provisions of the agreement and explicitly denied it the power to add to, subtract from, alter or amend the agreement in any respect. Bell Canada v. Office and Professional Employees' Interna­tional Union Local 131 ([1974] S.C.R. 335).

In McLeod v. Egan[35] the grievance submitted to arbitration was the propriety of disciplinary action against an employee who had refused to work overtime on the basis that having already worked 48 hours in a particular week, he could not, by virtue of The Employment Standards Act of the Province of Ontario, be required to work if he did not consent. The grievance was dismissed by the arbitrator on the view that the required consent was to be found in art. 2.01 of the Collective Agreement covering the employees. In the majori­ty judgment by Martland J. I read (at pp. 523-524):

The Court of Appeal was of the opinion that the arbitrator had construed the collective agreement, par­ticularly art. 2.01, in the light of s. 11(2) of the Act, that the construction he had placed upon it was one which it would reasonably bear, and, accordingly, could not be impeached.

... By the operation of the statute, the right to require overtime beyond 48 hours per week from any individual employee had been taken away from the employer and became subject to the rights of the employee under s. 11(2). There is nothing in the agreement that can possibly be construed as having met the requirements of that subsection and, therefore, it is unnecessary to determine whether this particular consent can be given by a collective agreement.

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In a separate concurring opinion, the Chief Jus­tice said (at pp. 518-519):

... Although the issue before the arbitrator arose by virtue of a grievance under a collective agreement, it became necessary for him to go outside the collective agreement and to construe and apply a statute which was not a projection of the collective bargaining rela­tions of the parties but a general public enactment of the superior provincial Legislature. On such a matter, there can be no policy of curial deference to the adjudication of an arbitrator, chosen by, the parties or in accordance with their prescriptions, who interprets a document which is in language to which they have subscribed as a domestic charter to govern their relationship.

It will be noted that neither opinion expressed disagreement with the test adopted by the Ontario Court of Appeal respecting the validity of the construction of a collective agreement by an arbi­trator, namely, that the question is not whether the construction reached is the correct one in the view of the Court, but whether it is one which the agreement would reasonably bear. In my view judged by this standard, the construction of the agreement adopted by the Arbitrator cannot be rejected.

I cannot agree with MacKeigan C.J. that the Arbitrator in this case put the wrong question. With respect, the proper question was as the Arbi­trator stated it, namely, "Did the employees accumulate seniority during the strike?" Whether absence from work on the legal strike constituted a "justifiable reason" within the meaning of art. 9.04 just was something to be considered in answering the question, it was not the question. The Arbitrator did consider that provision of the agreement as appears from the last sentence I have quoted from his reasons, and from that sentence it is clear that he did not consider that the strike came within what he called "the situations in the Agreement which extend seniority". I do not think I need consider whether I would reach the same conclusion, it is enough that I have no doubt that this is not an unreasonable conclusion.

It does not appear to me that the submission of a grievance under a collective agreement may be said to be a submission of a specific question of

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law because the parties agree that the outcome depends on some question of law or because they agree on the facts so that only a question of law is left to be decided. In my view the decision in the Bell Canada case is conclusive on that point. The extent of the remedies available to the parties should not be dependent on whether they agree or disagree on the facts and they should not be discouraged from agreeing on the facts by fear of prejudicing their remedy against an award which cannot be considered as coming within any reasonable view of the terms of the agreement, such as in the cases I have reviewed. It must be remembered that the basis on which the rule evolved that there was no remedy against an arbitrator's decision upon a specific question of law referred to him, was that the parties had chosen to have the ques­tion so decided. In the early case of Stimpson v. Emmerson[36], the judgment of Wilde C.J. was expressed in the following words:

The Court has no more authority to review the arbitra­tor's decision upon a point of law referred to him than upon a point of fact. Whatever may have been formerly the understanding, it is enough to say that in modern times the decisions are distinct and uniform, that if parties choose to refer a matter of law to an arbitrator, his decision upon the matter is final.

On a grievance under a collective labour agreement, the grievor does not choose arbitration, he has no other remedy. The other party has no choice either but to submit to his obligation to allow the grievance to be arbitrated. On the other hand, the arbitration is not meant to be an addi­tional step before the matter goes before the courts, the decision is meant to be final. It is therefore imperative that decisions on the con­struction of a collective agreement not be approached by asking how the Court would decide the point but by asking whether it is a "patently unreasonable" interpretation of the agreement. The recent judgment of this Court in Canadian Union of public Employees Local 963 v. New Brunswick Liquor Corporation[37], applied this cri­terion in respect of an administrative board order based on the New Brunswick Public Relations Act. It is apparent that this was not considered a

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"general public enactment" as the Chief Justice put in in McLeod v. Egan.

I have thus far made no reference to Metropoli­tan Toronto Police Association v. Board of Commissioners[38] because, although in that case the majority did not agree that the grievance was to be treated as the submission of a specific ques­tion of law, they went on to hold that even then the award was subject to review on the basis of the principle stated by Viscount Cave in Kelantan v. Duff Development Company Limited[39], at p. 409. In my view this question does not arise in this case, but even if it did, I would not agree that the availability of such grounds of review, including the improper admission of evidence, was put in doubt by the more recent decision of the House of Lords in F.R. Absalom Ltd. v. Great Western (London) Garden Village Society, Ltd.[40]

I would allow the appeal with costs throughout, set aside the judgment of the Appeal Division and restore the judgment of Maclntosh J. dismissing respondent's application to quash the award.

The reasons of Martland and Ritchie JJ. was delivered by

MARTLAND J.—I have had the advantage of reading the reasons of the Chief Justice and those of my brother Pigeon with respect to this appeal. The Chief Justice has pointed out that the record in this appeal does not contain the policy grievance which initiated the proceedings before the arbitra­tion, nor is it reproduced in any of the judgments below, nor in the award of the arbitrator. The arbitrator did state the issue before him in the following terms:

The issue in this arbitration is whether or not employees accumulate seniority during the period of the strike or not, thereby entitling them to paid holidays

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under Article 19.04 and .05 and benefits under the SUB Plan.

The Chief Justice has noted that the case was dealt with in the Court below on the basis that a specific question of law had been submitted to the arbitrator as to the construction of the collective agreement. I am not, however, satisfied that the Court was correct in so doing. In my opinion, this is a case in which a grievance has been referred to arbitration pursuant to the collective agreement as was the case in The Metropolitan Toronto Police Association v. The Metropolitan Toronto Board of Commissioners of Police[41]. That being so, I agree with the reasons of my brother Pigeon.

However, even assuming that the submission to the arbitrator was a specific question of law which the parties had determined to have decided by the arbitrator, I would agree with the disposition of this appeal as proposed by the Chief Justice, but, with great respect, I am not prepared to agree with his obiter dictum concerning the statement of the law on this matter made in the Privy Council by Viscount Cave, L.C., in Government of Kelantan v. Duff Development Company, Limited[42].

After stating that the reference to arbitration in that case was as to the construction of a deed, Viscount Cave said, at p. 409:

If this be so, I think it follows that, unless it appears on the face of the award that the arbitrator has proceeded on principles which were wrong in law, his conclu­sions as to the construction of the deed must be accepted. No doubt an award may be set aside for an error of law appearing on the face of it; and no doubt a question of construction is (generally speaking) a question of law. But where a question of construction is the very thing referred for arbitration, then the decision of the arbitrator upon that point cannot be set aside by the Court only because the Court would itself have come to a different conclusion. If it appears by the award that the arbitrator has proceeded illegally—for instance, that he has decid­ed on evidence which in law was not admissible or on principles of construction which the law does not counte­nance, then there is error in law which may be ground for setting aside the award; but the mere dissent of the

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Court from the arbitrator's conclusion on construction is not enough for that purpose.

After stating in this passage that where a ques­tion of construction is the very thing referred for arbitration the award cannot be set aside by the Court only because the Court would have come to a different conclusion, he goes on to add that if, in his reaching his conclusion, the arbitrator has pro­ceeded illegally there may be ground of setting aside the award. In other words, the Court will not set aside an award on a reference to arbitration of a specific question of law because its own conclu­sion on that issue differs from that of the arbitrator, but it may, if it appears that the procedure followed by the arbitrator in reaching his decision was illegal, set aside the award for that reason.

On the facts of the Kelantan case, Viscount Cave held that there had been a specific reference of a question of construction to the arbitrator and he was not prepared to hold that the arbitrator had acted illegally. Lord Shaw of Dunfermline agreed with this judgment. Lord Sumner agreed with the disposition of the appeal made by Viscount Cave. Lord Parmoor wrote separate reasons. He held that there had been a specific question of law submitted to the arbitrator. Lord Trevethin was of the view that on the facts of the case there had not been a reference of a specific question of law.

None of the members of the Court expressed any dissent from Viscount Cave's statement of the law.

In F. R. Absalom Limited v. Great Western (London) Garden Village Society, Limited[43], the House of Lords decided, on the facts of the case, that, while recognizing the distinction between cases in which a question of law has been specifi­cally referred for decision and those in which such a question is involved incidentally, there had not been a reference of a specific question of law, and so the Court set aside the award because it held that there had been an error of law on the face of

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the award. There was no issue in that case as to the arbitrator having followed an illegal procedure and, consequently, there was no need to invoke Viscount Cave's statement as to the effect of ille­gal procedure being followed by the arbitrator. That part of the statement is, however, referred to by Lord Russell of Killowen without any expres­sion of dissent from it. What Lord Russell of Killowen said is found at pp. 607-08:

My Lords, it is, I think, essential to keep the case where disputes are referred to an arbitrator in the decision of which a question of law becomes material distinct from the case in which a specific question of law has been referred to him for decision. I am not sure that the Court of Appeal has done so. The authorities make a clear distinction between these two cases, and, as they appear to me, they decide that in the former case the Court can interfere if and when any error of law appears on the face of the award, but that in the latter case no such interference is possible upon the ground that it so appears that the decision upon the question of law is an erroneous one.

In the Kelantan case Lord Cave made this distinction clear, and came to the conclusion, after considering the submission and the pleadings there in question, that specific questions of construction had been submitted to the arbitrator for his decision, with the result that his decision could not be interfered with merely on the ground of its being wrong. He adds, however, that if it was apparent on the face of the award that the arbitrator in arriving at his decision had proceeded illegally (e.g., on inadmissible evidence) that would be ground for interference.

I do not construe this passage in Absalom as stating any proposition of law different from that stated by Viscount Cave. Lord Russell of Killowen was not purporting to eliminate the qualification which Viscount Cave attached to his statement.

Viscount Cave's statement in Kelantan has been considered as a proper enunciation of the law on this subject in Russell on Arbitration (18th ed.), pp. 359-60, and in Halsbury's Laws of England (4th ed.), p. 334, para. 623.

There was at least tacit approval of the statement by this Court in City of Vancouver v. Bran dram-Henderson of B. C. Limited[44]

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at p. 550. In The Metropolitan Toronto Police Association case, the majority of this Court stated that it was not prepared to hold that the Court of Appeal of Ontario had erred in applying, in that case, the principle enunciated by Viscount Cave.

For the foregoing reasons I am not prepared to concur in a flat rejection of Viscount Cave's statement. I agree with the Chief Justice that the application of the statement in the circumstances of the present case would not entitle the Court to set aside the award. The arbitrator did not proceed illegally. He did answer the question of law put to him, as he was required to do.

The following are the reasons delivered by—

ESTEY J.—I agree with the Chief Justice that the arbitration board here is consensual and with Pigeon J. that the question referred to such board is not a specific question of law but is, within the meaning adopted for that term in the cases decid­ed in this Court, a general question in the determi­nation of which questions of law incidentally arise. I agree with the Chief Justice that the standard of review of an award of a consensual board is the combination of the two principles enunciated in Hodgkinson v. Fernie[45] and in The King v. Duveen[46]. There remains to be elaborated in a proper case the scope of review for an error of law on the face of the record mentioned in the former authority and this will entail a determination of the applicability of the dicta Lord Cave in Kelan­tan v. Duff Development Co.[47] in Canadian law. On principle I am in accord with the tenor of the general observations of the Chief Justice on the limited scope of judicial review of consensual awards in our law.

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I have considerable doubt that the older authori­ties in the United Kingdom have any application in our law of judicial review in the field of labour relations. Judicial review of the award of a consen­sual board in my view should not be predicated upon the tenuous and artificial distinction between a general question and a specific question of law, but should be limited to review only when the arbitrator in answering the submission does something he is not by statute or contract authorized to do.

Appeal allowed with costs.

Solicitors for the appellant: Burchell, Jost, MacAdam & Hayman, Halifax,

Solicitors for the respondent: Kitz, Matheson, Green & Mclsaac, Halifax.