Newfoundland Association of Public Employees v. Attorney General (Newfoundland), [1978] 1 SCR 524

Supreme Court of Canada

Newfoundland Association of Public Employees v. Attorney General (Newfoundland), [1978] 1 S.C.R. 524

Date: 1977-05-17

The Newfoundland Association of Public Employees Appellant;

and

Attorney General for the Province of Newfoundland Respondent.

1977: March 9; 1977: May 17.

Present: Laskin C.J. and Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ.

ON APPEAL FROM THE SUPREME COURT OF NEWFOUNDLAND, APPEAL DIVISION

Arbitration—Labour relations—Arbitration awards—Dismissal for cause—Grievance submitted to arbitration—Right of arbitration board to alter penalty—Arbitral awards to be set aside only on basis of clear error in law.

Seven members of appellant association, employed on the staff of an institution for retarded children, were dismissed, allegedly for cause. A grievance was filed under the collective agreement between the Government of Newfoundland and the association. The question of justification for the dismissals of the employees for ill-treatment of certain children in the institution was subsequently referred to arbitration. The arbitration board upheld the grievance of three of the employees and affirmed the dismissals of the other four. The board added the finding that once an employer has cause to assess discipline against an employee, an arbitration board has no jurisdiction, unless the collective agreement has specified otherwise to alter or modify the penalty. Appellant unsuccessfully attacked the board’s decision by originating summons in the Supreme Court of Newfoundland and the dismissal of the application was affirmed on appeal by a majority. The two issues raised on further appeal were whether the Courts below had erred in law in holding (1) that there was no error in law on the face of the record of the arbitration award and (2) that the board has no jurisdiction to alter or modify the penalty imposed by the employer once cause for discipline had been established.

Held: The appeal should be dismissed.

Per curiam: The board had not bound itself by any preclusive view of the regulations that foreclosed proper consideration of the issue to which the award was directed and further had not failed to determine whether the

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discharge was justified on the ground of ill-treatment of the children.

Per Laskin C.J. and Ritchie J.: An arbitration award should not be read unduly strictly, especially one made by a tripartite board which is very likely to use compromissory language in some portions of its reasons. In the present case an overall reading did not reveal reversible error. The board on the record answered the only question put to it, and, in the absence of any indication of a request to it to substitute a lesser penalty its added comment on the Port Arthur Shipbuilding Case, [1969] S.C.R. 85, was an afterthought which only indicated what its position would have been had the issue been raised. The issue dealt with in that case might, on an appropriate occasion be reconsidered by the full Court. An arbitration board empowered to consider and decide whether a discharge is for just cause may as part of its remedial authority, unless expressly precluded by the collective agreement or by statute, properly decide that the cause assigned for discharge did not justify such a penalty but did merit some other form of discipline.

Per Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ.: As to the board’s finding that it lacked jurisdiction to alter or modify the penalty, the board was not requested or required to make that decision. Had that question been submitted to the board and the board decided that it was, as it purported to decide, bound by Port Arthur Shipbuilding then this Court would have had to determine whether that case was applicable and also whether the authority should be reconsidered. In the circumstances reconsideration of that authority was not appropriate.

[Port Arthur Shipbuilding Co. v. Arthurs et al., [1969] S.C.R. 85; Zeller’s (Western) Ltd. v. Retail, Wholesale and Department Store Union, Local 955 et al., [1975] 1 S.C.R. 376; Imbleau et al v. Laskin et al., [1962] S.C.R. 338 referred to.]

APPEAL from a judgment of the Supreme Court of Newfoundland, Appeal Division[1], dismissing an appeal from a judgment of Higgins J. dismissing an application to set aside an arbitration award. Appeal dismissed.

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R. Halley and E.M. Hearn, for the appellant.

James A. Nesbitt, Q.C., for the respondent.

The judgment of Laskin C.J. and Ritchie J. was delivered by

THE CHIEF JUSTICE—Two issues are raised in this appeal which is here by leave of the Newfoundland Court of Appeal. Both issues arise out of an arbitration award made by a domestic, consensual board acting by appointment under and in pursuance of authority given by a collective agreement. What was submitted to the board of arbitration were the grievances of seven employees of a publicly-operated institution for retarded children, complaining that they were unjustly dismissed from their employment. The submission to arbitration is not itself in the record of proceedings brought before this Court, but the board’s award stated the issue for its determination in the following words:

The single issue which the Board had to decide was whether there was justification for the dismissal of the seven employees at Exon House on the grounds that they ill-treated certain children of that institution. The issue of “ill-treatment” is the main and only issue to be decided by the Board.

The basis upon which the board of arbitration approached its task is shown in the following excerpts from its award:

While the Board was not sitting with the powers and reference of a Royal Commission or Court of Law, yet, it faced the grave responsibility of judging the actions of these employees in a most fair and impartial way, respecting as it should, the accepted principles of evidence, and the long established principle of reasonable doubt. Where there is conflict of evidence between witnesses, the Board has the right and duty to judge the reliability of witnesses, and, to decide what evidence is most reliable in the light of the statements, demeanour, and conduct of the witnesses giving it.

…

Concerning the charges of “ill-treatment” laid against the seven dismissed employees of Exon House, it is our feeling, that with such a grave charge, the one judging must be satisfied that the evidence presented by the

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accuser is reliable and has been corroborated in a material particular by other evidence.

Having heard the evidence of numerous witnesses and the submissions made to it, the board determined that the “discipline” imposed by the public employer was justified in the case of four of the grieving employees and not justified in the case of the other three. (I have put the word discipline in quotation marks because the board used that word in arriving at its conclusions rather than the word “dismissal” and, although some issue was taken with it, I do not think anything turns on it.) Proceedings were thereupon taken by the bargaining representative of the employees to set aside the award in respect of the four persons whose discharge was sustained, alleging error of law in the finding that there was just cause for “discipline” (here the appellant union used this term) and further, that there was error of law in holding that if there was just cause for “discipline” the board did not have authority to alter or modify the penalty imposed by the employer. These contentions were rejected by Higgins J. and an appeal was dismissed, Noel J. dissenting on the ground that the award was ambiguous and “does not clearly and directly state with regard to each of the four employees, whether or not there was justification for dismissal on the grounds that they ill-treated certain children”. He would have remitted the award for reconsideration accordingly.

The two issues raised on the further appeal to this Court were framed by the appellant as follows:

(1) The learned Court erred in law in holding that there was no error of law on the face of the record of the Arbitration Award and erred in upholding the Order of the late Mr. Justice Higgins;

(2) The learned Court erred in law in holding that the Arbitration Board had no jurisdiction to alter or modify the penalty imposed by the employer once cause for discipline had been established and erred in upholding the Order of the late Mr. Justice Higgins to the same effect.

A large number of alleged errors of law were enumerated under the first of the above‑mentioned issues, some of them turning on contentions that

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certain regulations or directives relating to the operation of the institution, including provisions for disciplining the children under care in the institution, were wrongly treated by the board of arbitration as prohibiting any physical contact between the employed staff and the children under their care, and that the board did not distinguish between physical contact or force to restrain and force to punish the children, nor did it properly consider whether the physical acts against the children amounted to ill-treatment. Another matter advanced as an error of law under the first issue in appeal was that the board did not answer the specific question referred to it. This Court did not call on the respondent to deal with the contentions of the appellant under the first issue in appeal, being of opinion that the board had not bound itself by a preclusive view of the regulations that foreclosed proper consideration of the issue to which its award was directed and, further, that the board had not failed in the duty laid on it to determine the question whether discharge was justified on the ground of ill-treatment of the children.

I have had occasion to comment in other cases on the undesirability of reading an arbitration award strictly, especially one made by a tripartite board which is very likely, whatever be its decision, to use compromissory language in some portions of its reasons. This is borne out by the terms of the award in the present case. Here the board set itself a standard of required proof beyond legal necessity, and although it could be faulted for the way it dealt with one or two of the grievances, an overall reading does not reveal reversible error in terms of the challenge made by the appellant under the first issue raised in this appeal.

The second issue raises different considerations. It rests primarily on a passage of the board’s reasons under the title “Summary” wherein the board simply listed the dispositions it had made of the respective grievances and then added this:

Once it has been determined that an employer has cause to assess discipline against an employee, unless the

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Collective Agreement specifies otherwise, an Arbitration Board has no jurisdiction to alter, amend or modify the penalty. In this instance, the Board does not have the authority to alter or modify the penalty imposed, once cause for discipline has been established, under the principles set out in Port Arthur Shipbuilding Ltd. vs. Arthurs et al. [1969] S.C.R. 85.

What can be taken from this, according to the appellant, is that the board precluded itself from considering a lesser disciplinary penalty than discharge simply because there was some cause for the employer to discipline the grieving employees. The appellant contended that the collective agreement authorized such consideration and also that reliance on Port Arthur Shipbuilding Co. v. Arthurs[2], was unjustified in the present case.

In Port Arthur Shipbuilding, in contrast to the present case, the board of arbitration had concluded that the dereliction of duty by certain employees did not justify discharge but did justify a lesser form of discipline and it thereupon set aside the discharge imposed by the employer and substituted certain periods of suspension. Here the board of arbitration considered only discharge, and the record is bare of any indication that the board was invited to exercise its alleged authority to substitute a less draconian penalty for the employees’ breach of duty. It may be, and this was certainly urged by the appellant, that the board foreclosed itself from considering a lesser penalty suo motu. Again, there is nothing in the record to show this, save the comment in its summary, already quoted.

Counsel for the respondent at first took the position that a board of arbitration, and the particular board here, could not interfere with the penalty of discharge once cause for some discipline existed, but he receded from it on realizing that this could work to the serious disadvantage of an employer if a board was required by say either yes or no to discharge and, if it said no, the discharged employees would have to be reinstated with the consequent entitlement to lost pay (perhaps for a long period) and any fault on their part would

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have gone unpunished. Equally, he conceded that it could not be that an employer, having some basis for disciplining an employee for a minor infraction, say, lateness in reporting for work on one or two occasions, could impose discharge and defend the penalty against interference by an arbitration board empowered to adjudicate on whether the dismissal was for just cause. What counsel for the respondent did ultimately submit was that on the record the board answered the only question put to it, and, in the absence of any indication of a request to it to substitute a lesser penalty, the board’s comment on the Port Arthur Shipbuilding case was an afterthought which only indicated what its position would have been had the issue in the comment been raised.

I am prepared in this case to accept this contention and to dismiss the appeal accordingly. Nonetheless, I would not leave this case without saying that the issue dealt with in the Port Arthur Shipbuilding case might, on an appropriate occasion, be reconsidered by the full Court. Subject, of course, to particular collective agreement provisions which lead in another direction, I am of the opinion that an arbitration board empowered to consider and decide whether a discharge is for just cause may as part of its remedial authority, unless expressly precluded by the collective agreement or by statute, properly decide that the cause assigned for discharge did not justify such a penalty but did merit some other form of discipline.

Cause and penalty are intertwined, especially in discharge cases. I hold the view that arbitration boards, as domestic tribunals of the parties, should be given latitude, no less than that given by Court decisions to statutory governmental tribunals, to exercise their powers so as best to effectuate their raison d’être. For a court to say that a penalty substituted by a board is beyond its powers is no different from interfering with a finding that either upholds or sets aside an assigned penalty without more. If the latter is generally invulner-

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able to judicial review, as I think it is, so should be the former. This view is supported by the unanimous decision of this Court in Zeller’s (Western) Limited v. Retail, Wholesale and Department Store Union, Local 955[3], which was also a discharge case where the board of arbitration had found that the discharge was not for just cause. Dickson J. speaking for this Court said this (at p. 380):

…The arbitration board stated: “There is not the slightest doubt that the Company dismissed Mrs. Bonsai for what it tried to prove was ‘just cause’.” I agree. If the dismissal of Mrs. Bonsai was dismissal for cause, then the decision of the arbitration board that no good cause was shown is conclusive against Zeller’s. Counsel submitted there was error when the board held the acts of Mrs. Bonsai did not constitute just cause for discharge. It is not the function of this Court to enter upon such an assessment. That was the task of the arbitration board. If the board, upon entering the inquiry, is free of jurisdictional error and, in the course of the inquiry, acts in reasonable consonance with the powers which it may properly exercise under the statute or agreement from which its powers flow, the Court will respect both the autonomy and the conclusions of the board: International Association of Machinists and Aerospace Workers, Flin Flon Lodge No. 1848 et al. v. Hudson Bay Mining and Smelting Co. Ltd., [1968] S.C.R. 113.

It is in the sense of the recognition of the necessary power of a board of arbitration, under commonly prescribed arbitration clauses, to effectively dispose of grievances justly, as the board sees the matter after a hearing, that this Court’s decision in the Polymer case (sub nom. Imbleau v. Laskin[4], urged here by the appellant, takes on significance.

In the result, I reach the conclusion arrived at by my brother Spence, whose reasons I have had the advantage of reading and would, accordingly, dismiss the appeal but without costs as proposed by my brother Spence.

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The judgment of Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré was delivered by

SPENCE J.—This is an appeal from the judgment of the Supreme Court of Newfoundland On Appeal pronounced on December 9, 1975 taken by leave of that Court given on March 19, 1976. By that judgment, the Supreme Court of Newfoundland On Appeal, Mr. Justice Noel dissenting, gave judgment dismissing an appeal from the judgment of the late Mr. Justice Higgins pronounced on March 27, 1974.

Mr. Justice Higgins was considering a petition of the present appellant for a hearing for:

1. An Order that an Arbitration Award arising out of a dispute between the Plaintiff and the Defendant finding that there was just cause to discipline four employees, be set aside on the ground that such decision is contrary to law and fact.

2. An Order that the Arbitration Board erred in law in holding that the Board did not have the authority to alter or modify the penalty imposed, once cause for discipline has been established.

3. Such other Order or relief as in the circumstances shall ascertain.

Seven members of the appellant Association had been employees of Exon House, an institution for retarded children. They had been dismissed, allegedly for cause. The collective agreement between the Government of Newfoundland and the appellant Association provided for the filing of a grievance and the processing thereof. Article 8.04 of the said collective agreement provided:

In the case of dismissals, the grievance may be submitted in the first instance at Level IV of Clause 8.03.”

Article 8.03 provided for submission of the grievance to arbitration in accordance with Article 9, and Article 9 provided:

9.01 Where a difference arises between the parties to or persons bound by this Agreement or on whose behalf it has been entered into and where that difference arises out of the interpretation, application, administration, or alleged violation of this Agreement and including any question as to whether a matter is arbitrable, either of

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the parties may within seven (7) days after exhausting the grievance procedure notify the other party in writing of its desire to submit the difference or allegation to arbitration and the notice shall contain the name of the person appointed to be an arbitrator by the party giving notice.

Although the actual submission to arbitration does not appear on the record, the parties appearing before Higgins J. on the originating summons agreed as to admission of facts and admission No. 3 therein is as follows:

3. The question to which the Board of Arbitration was referred to and which it was asked to arbitrate was—“Whether there was justification for the dismissal of the seven employees at Exon House on the grounds that they ill-treated certain children of that institution.”

The Arbitration Board of three members heard much evidence and argument and submitted their decision dated June 13, 1973. The Board, in its report, sets out the standard of proof which it determined it would put upon the Government of Newfoundland and I quote excerpts from the early pages of the report:

The single issue which the Board had to decide was whether there was justification for the dismissal of the seven employees at Exon House on the grounds that they ill-treated certain children of that institution. The issue of “ill-treatment” is the main and only issue to be decided by the Board.

The charge of “ill-treatment” is a most serious one. Its implication for the accused is widespread. At stake for them in this issue is their employment, their reputation and other aspects of their future.

While the Board was not sitting with the powers and reference of a Royal Commission or Court of Law, yet, it faced the grave responsibility of judging the actions of these employees in a most fair and impartial way, respecting as it should, the accepted principles of evidence, and the long established principle of reasonable doubt. Where there is conflict of evidence between witnesses, the Board has the right and duty to judge the reliability of witnesses, and, to decide what evidence is most reliable in the light of the statements, demeanour, and conduct of the witnesses giving it.

CORROBORATION

Evidence of a witness that is corroborated to a material degree by another witness is of course the most reliable.

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Corroboration can be provided either directly or by circumstantial evidence. Corroborative evidence must be independent, that is to say, outside and apart from the person whose evidence has to be corroborated. It can be indirect in that a reasonable inference may be drawn from a person’s proven conduct or action. It must relate to the accused, something in his conduct inconsistent with his profession or innocence.

Concerning the charges of “ill-treatment” laid against the seven dismissed employees of Exon House, it is our feeling, that with such a grave charge, the one judging must be satisfied that the evidence presented by the accuser is reliable and has been corroborated in a material particular by other evidence.

It will, therefore, be observed that the Arbitration Board deemed it proper to place upon the Government of Newfoundland the very heavy burden of proof in that it fixed a standard closely akin to that required in a criminal charge and moreover required corroboration of evidence showing mis-treatment of the children before it would accept such evidence as a basis for its decision. The Board, after examination of much evidence in argument and the consideration of the same, rendered its lengthy and detailed decision, part of which I have quoted above, and made its own summary which I quote in full:

SUMMARY

The above constitutes the Board’s findings in this issue as it applies to the seven individuals involved.

The Board finds that the Department did not have just cause to discipline the following employees of Exon House and upholds their grievances:

1. Mrs. Judy Newhook, Certified Nursing Assistant

2. Miss Clara Keating, Certified Nursing Assistant

3. Mr. Thomas Clarke, Parental Care Supervisor

The Board finds that the Department had just cause to discipline the following employees from Exon House and dismiss their grievance, [sic]

1. Mrs. Doris Lindsay, Parental Care Supervisor

2. Mrs. Mahatable Howse, Parental Care Supervisor

3. Mrs. Kathleen Walsh, Parental Care Supervisor

4. Mr. Ronald Rickert, Certified Nursing Assistant

Once it has been determined that an employer has cause to assess discipline against an employee, unless the Collective Agreement specified otherwise, an Arbitration Board has no jurisdiction to alter, amend or modify

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the penalty. In this instance, the Board does not have the authority to alter or modify the penalty imposed, once cause for discipline has been established, under the principles set out in Port Arthur Shipbuilding Ltd. vs. Arthur et al., [1969] S.C.R. 85.

The Board followed that summary with a part of its report which it designated “Further Conclusions” and to which I shall refer hereafter. It will be seen that the Board found that there was just cause for what it termed the “discipline” of four employees but that there was not just cause for the “discipline” of the other three employees. Although the Board, in its conclusion, used the word “discipline” the Board in setting out its task had, as I have already quoted, determined that the single issue was as to whether there was justification for the dismissal and, in fact, the Board seems to have kept to that issue, that is, whether there was just cause for dismissal.

In the originating summons, the appellant attacked the Board’s decision on many grounds alleging errors in law including allegations as to the effect and proper interpretation of certain regulations or directives relating to the operation of the institution known as Exon House.

This Court was of the opinion that the Board had not bound itself by any preclusive view of the regulations and had not prevented itself from the proper consideration of the issue nor had it failed to determine the question whether the dismissal of these seven grievors was justified on the ground of ill-treatment of the children. In coming to that conclusion, this Court had in mind that an arbitration award and particularly one made by a tripartite tribunal may well express its conclusions in perhaps informal and probably compromissory terms and that it is desirable to read the award keeping in mind that factor.

The Court, therefore, did not call upon the respondent to answer the appeal in so far as it dealt with the appellant’s first ground of appeal. The second ground was as follows:

(2) The learned Court erred in law in holding that the Arbitration Board had no jurisdiction to alter or modify

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the penalty imposed by the employer once cause for discipline had been established and erred in upholding the Order of the late Mr. Justice Higgins to the same effect.

As will readily be seen, this ground arises from the last paragraph of the summary which I have quoted above. In my opinion, that placing in the arbitrator’s award is of considerable significance. The record shows no application by the appellant to the arbitrator to consider whether there should have been any lesser degree of discipline imposed by the Government of Newfoundland. The collective agreement, in Article 8.04 which I have quoted above, deals only with dismissal. The petition for the originating summons refers to Article 8.04 and to the so-called “suspension” of the seven grievors and in other parts thereof spoke of “dismissal”. The first mention of the position that the Board could have altered or modified the penalty is in the said petition for an originating summons. It is, therefore, the position taken by the respondent in answer to ground of appeal number 2, as I have quoted it above, that the final paragraph of the summary in the Board’s award is no part of the actual award and is, in fact, an afterthought. I think that submission is supported by reference to the paragraphs which follow and which, as I have said, the Board labelled “further conclusions” part of which read:

The Board is confident from hearing the statements of the various witnesses, including several of the professional personnel at Exon House, that there is no cruel treatment, as such, to any of the children of this institution by any of the staff in the sense of a revengeful, spiteful, and insensitive attitude, on the part of the staff members. The nurses and others who testified firmly stated that they have never experienced or had reported to them any cruelty to any child in that sense of the word.

The actions of the staff members whose dismissal the Board approves, though unacceptable in an institution such as Exon House, and towards a very special type of child cared for there, were more in the nature of over-reaction, a failure to think, perhaps momentarily, about the possible consequences of their actions, and a general lack of adherence to the strict regulations at Exon House respecting physical force with these children. It was perhaps a combination of one or more of these factors rather than any insensitivity to the children’s conditions, bordering on ill-treatment, or, cruelty, as one

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commonly understands that word.

In view of the above circumstances, I am in agreement with this submission by the respondent. In short, the Board of Arbitration was requested only to consider whether there was justification for the dismissal of the grievors and found on all the evidence that there was such justification as to four of the grievors and not as to the other three. Had it been submitted to the Board that it should find that there was justification for some lesser degree of discipline but not justification for dismissal and that it should find that a lesser degree of discipline should be assessed then the Board would have had to decide whether, under the terms of the collective agreement, it could act on such submission or whether it was, as the Board purported to determine, barred by the decision of this Court in Port Arthur Shipbuilding v. Arthurs et al.[5]. Had that question been submitted to the Board and the Board made its decision in reference to the applicability of such authority, then this Court would have had to determine whether the said Port Arthur case is applicable and also whether the authority should be reconsidered.

For the reasons I have outlined, the Board was not requested or required to make that decision and I do not think that this is an appropriate vehicle for the determination of whether this Court should now reconsider that authority.

I would, therefore, dismiss the appeal.

Although the formal order of Higgins J. does not appear in the record, his reasons ended with the sentence “The application is dismissed” with no reference as to costs but the formal judgment of the Supreme Court of Newfoundland On Appeal dismissed the appeal with costs. I have come to the conclusion that there should be no order as to costs in this Court.

Appeal dismissed, no order as to costs.

Solicitor for the appellant: Raymond J. Halley, St. Johns.

Solicitor for the respondent: James A. Nesbitt, St. John’s.