Present: Dickson C.J. and Estey*, Lamer, Wilson, Le Dain*, La Forest and L'Heureux‑Dubé JJ.
on appeal from the court of appeal for british columbia
Judicial review ‑‑ Jurisdiction to review ‑‑ Consensual labour arbitration ‑‑ Arbitrator ordering employees rehired after dismissal for wrongful conduct during strike ‑‑ Whether arbitrator erred in law ‑‑ If so, whether error jurisdictional in nature and subject to judicial review ‑‑ Canada Labour Code, R.S.C. 1970, c. L‑1, ss. 107(2), 184(3)(a)(vi), as amended.
The parties herein were involved in a long and bitter labour dispute. During the course of the strike, the employer dismissed 24 of the striking employees for alleged misconduct. Notwithstanding their agreement on the terms of a new collective agreement, the parties could not settle the strike because of their disagreement over the fate of the 24 dismissed strikers and referred the issue to arbitration. The arbitrator found the use of disciplinary powers during a strike to be an offence and directed that all 24 employees be returned to work immediately with no penalty of any kind. The Court of Appeal upheld a decision to set aside this award and to remit it to the arbitrator for reconsideration. At issue are: (1) whether or not the arbitrator erred in law when he found that an employer has no power to impose discipline during a legal strike, and (2) if in the affirmative, whether the arbitrator's error of law was jurisdictional in nature and therefore subject to review.
Held (L'Heureux‑Dubé J. dissenting): The appeal should be allowed.
Per Dickson C.J. and Lamer, Wilson and La Forest JJ.: Assuming, without deciding, that the arbitrator did err in law, the error was not of a jurisdictional nature and therefore was not open to review.
Per L'Heureux‑Dubé J. (dissenting): The arbitrator erred in law when he decided that s. 107(2) of the Canada Labour Code removed the employer's right to discipline employees during the course of a strike. That section permits disciplinary actions by employers for activities carried on during the course of a strike if those actions are not aimed at punishing employees for union activities and participating in a lawful strike. Both the French version and jurisprudence support this interpretation.
Error of law in an arbitration must be jurisdictional in nature to be subject to judicial review. Where an arbitrator errs in defining his jurisdiction to decide a particular question, and chooses to answer a different question, the answer cannot be said to be within the contemplated jurisdiction. Here, the arbitrator's error in interpreting s. 107(2) of the Canada Labour Code to mean no employer‑employee relationship existed resulted in a refusal to exercise the jurisdiction accorded him by the parties. The decision that the employer had no right to impose disciplinary sanctions upon striking employees was fundamental to all of the arbitrator's conclusions and hence jurisdictional in nature.
The principles of non‑intervention within jurisdiction and of judicial review of excess of jurisdiction are of equal importance in the area of administrative law, and one cannot be allowed to override the other. Claims which are nothing more than "appeals" from otherwise valid administrative decisions should rightly be dismissed. It is wrong, however, to dismiss claims which raise valid jurisdictional questions simply because they come from administrative decision making bodies and not from the courts. The true focus for decision making is not on the degree of restraint to be exercised, but on the existence and nature of the error, be it a consensual arbitration or not.
There is no need for a particularly restricted scope for judicial review in the case of consensual arbitrations. Notwithstanding differences as to who or what sets the parameters of the arbitrator's jurisdiction, judicial review is available whenever an arbitrator exceeds his or her jurisdiction for the award rendered will not reflect the will of the parties or respect the terms of the statute.
A non‑interventionist approach is acceptable as long as it protects the rights and interests of individuals, but it must not be extended to denying recourse to courts of justice on the sole ground that such courts are reluctant to "interfere". When an arbitrator fails to act within jurisdiction, the court does not have the discretion to intervene; it has a duty to intervene at the behest of one or another of the parties.
Cases Cited
By L'Heureux‑Dubé J. (dissenting)
Canadian Pacific Railway Co. v. Zambri, [1962] S.C.R. 609; Re Allanson (1971), 20 D.L.R. (3d) 49; Dumais v. Champoux Automobile Inc., [1970] T.T. 120; Commission des normes du travail c. Manufacture Sorel Inc., [1984] C.S. 747; Firestone Tire & Rubber Co. v. N.L.R.B., 449 F.2d 511 (1971); N.L.R.B. v. Hartmann Luggage Co., 453 F.2d 178 (1971); Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corporation, [1979] 2 S.C.R. 227; Syndicat des employés de production du Québec et de l'Acadie v. Canada Labour Relations Board, [1984] 2 S.C.R. 412; Service Employees' International Union, Local No. 333 v. Nipawin District Staff Nurses Association, [1975] 1 S.C.R. 382; Douglas Aircraft Co. of Canada Ltd. v. McConnell, [1980] 1 S.C.R. 245; Volvo Canada Ltd. v. U.A.W., Local 720, [1980] 1 S.C.R. 178.
Statutes and Regulations Cited
Canada Labour Code, R.S.C. 1970, c. L‑1, ss. 107(2), 184(3)(a)(vi), as am.
Labour Code, R.S.Q., c. C‑27, s. 110.
Labour Relations Act, R.S.O. 1960, c. 202, s. 1(2).
Authors Cited
Gagnon, Robert, Louis LeBel et Pierre Verge. Droit du travail en vigueur au Québec. Québec: Les Presses de l'Université Laval, 1971.
MacNeil, Michael. "Recent Developments in Canadian Law: Labour Law" (1986), 18 Ottawa L.R. 83.
Nadeau, Gaston. "Le contrôle judiciaire des tribunaux du travail ‑‑ Quelques commentaires sur la révision des sentences arbitrales par la Cour Suprême du Canada" in Meredith Memorial Lectures, 1980, Faculty of Law, McGill University. New Developments in Federal and Provincial Labour Law. Don Mills, Ont.: Richard De Boo, 1981.
Nadeau, Gaston. Le statut juridique du salarié‑gréviste québécois. Québec: Les Presses de l'Université Laval, 1981.
Sack, Jeffrey and C. Michael Mitchell. Ontario Labour Relations Board: Law and Practice. Toronto: Butterworths, 1985.
Wade, H. W. R. Judicial Review‑‑Comment, in response to Peter A. Gall, "Judicial Review of Labour Tribunals: A Functional Approach", in Proceedings of the Administrative Law Conference, University of British Columbia, 1979. Vancouver: U.B.C. Law Review, 1981.
APPEAL from a judgment of the British Columbia Court of Appeal (1985), 65 B.C.L.R. 145, dismissing an appeal from a judgment of Esson J. in chambers (1981), 127 D.L.R. (3d) 697, setting aside an arbitration of H. A. Hope and remitting it for reconsideration. Appeal allowed, L'Heureux‑Dubé J. dissenting.
Morley Shortt, Q.C., and Shona Moore, for the appellant.
Jack Giles, Q.C., and Alison Narod, for the respondent.
The following is the judgment delivered by
1. The Chief Justice and Lamer, Wilson and La Forest JJ.‑‑We are of the view that this appeal succeeds. The two issues in this Court were:
(1) whether the arbitrator erred in law when he found that an employer has no power to impose discipline during a legal strike, and,
(2) whether the arbitrator's error of law was jurisdictional in nature and therefore subject to review.
2. Lambert J.A., of the British Columbia Court of Appeal, agreed with the majority by answering in the affirmative the first question, but then, dissenting, would have allowed the appeal as he was of the view that the error committed was not of a jurisdictional nature.
3. Assuming, without deciding, that the arbitrator did err in law, we agree with Lambert J.A. that the error was not in any event of a jurisdictional nature and therefore not open to review.
4. In that regard, we adopt his reasons for judgment, (they are conveniently reported as, British Columbia Telephone Co. v. Telecommunication Workers Union (1985), 65 B.C.L.R. 145, at pp. 146‑59), as we feel we could not usefully add to them, except to say as follows. Like Lambert J.A., we consider it significant that the matter was referred to the arbitrator in highly imprecise terms; it is not possible to conclude from the terms of reference that both the union and the employer were in agreement that the employer had the right to discipline striking employees and that the sole question for the arbitrator was the appropriate disciplinary action; it is clear from the union's submissions throughout that they did dispute the employer's right to impose any disciplinary measures; in light of the broad terms of reference put to him, it was squarely within the arbitrator's jurisdiction to consider whether the employer had the right to discipline workers participating in a lawful strike, and if the answer to that question was in the affirmative, what discipline was appropriate in the circumstances.
5. We would therefore allow the appeal and restore the award of the arbitrator, with costs throughout.
The following are the reasons delivered by
6. L'Heureux‑Dubé J. (dissenting)‑‑This case raises two main issues which arise out of an arbitral decision made during the course of a labour dispute between the two parties in appeal. The issues are:
1. Did the arbitrator err in law when he found that an employer has no power to impose discipline during a legal strike?
2. In the affirmative, was the arbitrator's error of law jurisdictional in nature and therefore subject to review?
7. An answer to these questions necessarily involves a consideration of the meaning of s. 107(2) of the Canada Labour Code R.S.C. 1970, c. L‑1, amended by S.C. 1972, c. 18; S.C. 1977‑78, c. 27; S.C. 1980‑81‑82‑83, cc. 47, 121; S.C. 1984, cc. 39, 40, which reads:
107. ...
(2) No person ceases to be an employee within the meaning of this Part by reason only of his ceasing to work as the result of a lockout or strike or by reason only of his dismissal contrary to this Part.
8. It also involves an inquiry into the proper scope of judicial review of consensual arbitrations.
9. The majority of this Court assumed without deciding that the arbitrator erred in law. They answered the second question in the negative, and allowed the appeal. I cannot agree with the conclusions of the majority. Furthermore, I feel that the questions raised merit greater discussion.
Facts
10. The parties to this appeal were involved in a long and bitter labour dispute between September 1980 and March 1981. The terms of the collective agreement between them expired in 1979. When negotiations were unsuccessful, the union commenced a limited strike involving several hundred of the company's employees. This was soon followed by a full strike of all bargaining unit employees, who numbered about ten thousand. The day to day operations of the company during the strike were carried out by supervisors and other non‑bargaining unit personnel. The arbitrator described the strike as antagonistic. He commented:
On the evidence before me all employees involved committed acts that would be deserving of discipline in a normal employer‑employee relationship. The acts ranged from minor acts of sabotage, such as letting the air out of tires, to criminally stupid acts such as threats of bodily harm to supervisors and their families.
11. During the course of the strike, the employer dismissed 24 of the striking employees for alleged misconduct. On March 2, 1981, the parties reached an agreement on the terms of a new collective agreement but could not settle the strike due to a disagreement over the fate of the 24 strikers who had been dismissed. On March 14 it was agreed that the issue would be referred to arbitration. The arbitral award was handed down on April 2 and in it the arbitrator directed that all 24 employees be returned to work immediately with no penalty of any kind. It is this award which is the subject of this appeal.
Decisions of the Arbitrator and the Courts Below
1. The Arbitral Award
12. The arbitrator, H. A. Hope, discussed the background to the dispute and summed up the positions of the parties. He then went on to consider what he felt to be the "essence" of the employer‑employee relationship. His conclusions on this point are crucial to the question of the right of an employer to impose discipline during a strike. The arbitrator decided that during the strike the normal employer‑employee relationship is almost completely severed. He concluded that:
The Employer has no inherent right to discipline and the preservation of the status of employee under the statute does not confer any such right either expressly or implicitly.
13. The arbitrator felt that the limited purpose of s. 107(2) was to "preserve the employment status in order to permit the Union in its role as bargaining agent to continue to bargain on behalf of the striking employees." He concluded that the normal relationship between employer and employee could not exist during a strike. In consequence of this determination, he decided that any "use of disciplinary powers during a strike is an offence." It is this interpretation of the Canada Labour Code, particularly of s. 107(2) and s. 184(3)(a)(vi), which forms the basis for his decision not to impose any disciplinary sanctions upon the 24 employees. The arbitrator summed up his decision in jurisdictional terms:
...I must consider if I have any jurisdiction to assess the conduct of the employees in question. The position of the Union is clear. It urges that in the absence of an employer‑employee relationship I have no more jurisdiction to impose discipline on the employees in question than the employer itself.
14. The arbitrator then went on to formulate a test to evaluate the conduct of the 24 employees. The test centred around an inquiry as to whether the conduct of the employees was directly related to the labour dispute. The approach of the arbitrator, based upon his conclusion as to the status of the employer‑employee relationship, was to dismiss from consideration for discipline any conduct directly related to the labour dispute. He stated: "On an application of that test I have concluded that all the employees should be returned to work immediately."
2. British Columbia Supreme Court (1981), 127 D.L.R. (3d) 697
15. Esson J. considered at length the question of the status of employees during a strike. He rejected the conclusion of the arbitrator, at p. 705:
Termination of the relationship is not inherently inconsistent with the concept of a strike. No one, I think, would question that an employee who decides he no longer wants the job can terminate his relationship with the employer during a strike. Different considerations obviously apply to termination by the employer, but clearly the survival of that power is not inherently inconsistent with the existence of a strike in the same way as, say, the survival of the obligation of the striking employee to report for work.
The arbitrator's view, which he puts forcefully, is that to allow an employer to terminate during a strike is inconsistent with the concept of a strike because it is unfair to give such a "unilateral" power to one party. That is a subjective view as to what, as a matter of policy, is necessary to maintain a proper balance between conflicting interests and, as such, is a matter for Parliament.
16. In Esson J.'s view, the right to dismiss an employee is retained so long as the dismissal is for cause, and does not constitute an unfair labour practice as prohibited in s. 184 of the Canada Labour Code.
17. After reaching his conclusion as to the error of law of the arbitrator, Esson J. went on to find that the error was jurisdictional (pp. 709‑10):
...from cl. 5 of the submission, it is clear that the arbitrator was also called upon to decide whether, if dismissal was found inappropriate there should be the lesser penalty of suspension. That much, at least, was included in the question.
The arbitrator's answer to the question whether the employees should "remain dismissed" was, in effect, to say that the question could not arise because, as a matter of law, the employer had no power of dismissal. So he did not consider, in relation to the merits of each case as disclosed by the evidence, whether the employee should remain dismissed.
18. Esson J. concluded, at pp. 711 and 712:
I accept that the question whether the employees should return to work is in substance the same as the question whether they should remain dismissed. But the question answered must be defined as including the criteria applied and the remedies held to be available. When those matters are considered, it is clear that the question answered was fundamentally different from that which was asked, and that that difference flowed from the error in law.
...
It would be entirely within his jurisdiction to have regard, as a relevant circumstance, to the question whether the conduct complained of was related to the strike. But that is not the way in which the arbitrator applied the test. Rather, he concluded, as a matter of law, that, where the acts complained of were directly related to the labour dispute, no discipline or sanction of any kind could be imposed.
19. Thus Esson J. held that the arbitrator had erred in his conclusions as to the relationship between employer and employee during a strike, and that such an error was jurisdictional in nature, given the effect it had upon his determination of the question submitted to him for resolution.
3. British Columbia Court of Appeal (1985), 65 B.C.L.R. 145
20. The majority of the B.C. Court of Appeal chose to follow the reasoning of Esson J. In a brief opinion, Anderson J.A. added only one point to the general conclusions of Esson J. Anderson J.A. chose to deal with the following submission of counsel for the appellant, at p. 162:
Assuming that the arbitrator erred in law in determining that the "employer‑employee" relationship ceased to exist after the commencement of the strike, his selection of the "three‑part test" was unrelated to the above described error in law and therefore it is not open to the courts to set aside the award.
21. The majority disagreed with this proposition. They found, on the contrary, that this test was directly related to the error of law. Anderson J.A. summarized the arbitrator's decision to show how the determination of the nature of the employer‑employee relationship affected subsequent conclusions. He held, at p. 163, that:
It will be seen from the above review that the selection of the "three‑part test" was not made in isolation but was tied directly to the erroneous conclusion reached by the arbitrator that the "employer‑employee" relationship ceased to exist after the strike commenced.
22. Thus the majority of the Court of Appeal found that the arbitrator's decision as to the status of employees during a strike was erroneous, and that this error permeated the entire award in such a way that it constituted a jurisdictional error.
23. Lambert J.A. was in dissent in the Court of Appeal. His reasons for judgment are those accepted by the majority of this Court. Lambert J.A. agreed with Esson J. and the majority of the Court of Appeal that the arbitrator's interpretation of the status of employees during a strike was erroneous. He wrote, at p. 150:
The use of the word "only" in s. 107(2) supports the conclusion that the relationship may cease during the strike, for reasons other than the strike itself. I think that an employee, while on strike, may resign as an employee and so terminate the relationship completely. I think that the employer may dismiss an employee for conduct that is inconsistent with the resumption of the full relationship when the strike ends.
24. However, Lambert J.A. did not find this error to be jurisdictional. He stressed that the arbitration was governed by a "privative clause" and that it was a consensual arbitration. On the question of the privative clause, Lambert J.A. found that where such a clause exists, an arbitral decision cannot be reviewed for mere error of law. He also stated at p. 152 that, with a consensual arbitration, the court "must look to the terms of the submission and not to the provisions of a statute in deciding on the scope of the "jurisdiction" conferred by the parties on the arbitrator". Lambert J.A.'s second concern with respect to consensual arbitrations was that such awards are expressly tailored to the needs of the parties. He observed, at p. 152:
The significant fact about a consensual arbitrator is that the parties have picked the arbitration process, and they have picked the arbitrator, because they want that process and that arbitrator in preference to any other process or any other decision maker. And they want the arbitrator to do what they ask him to do in the way they ask him to do it and not to do something else in some other way.
25. In Lambert J.A.'s view, therefore, a different approach is required when judicial review of a consensual arbitration is requested. He suggested that judicial restraint receive its maximum scope in such circumstances.
26. Lambert J.A. at p. 159, defined the question asked in this case as:
"What is to be done about the 24 employees who were dismissed during the strike, and who, by agreement, reported back to work on Monday, 23 March, 1981: Should any or all of them be dismissed or suspended?"
27. In the opinion of Lambert J.A., that was the question answered by the arbitrator when he decided that the employees should all return to work.
Error of Law
28. The first step in this inquiry is to determine whether the arbitrator erred in law when he decided that s. 107(2) of the Canada Labour Code removed the employer's right to discipline employees during the course of a strike. This question concerns the proper determination of the status of the employer‑employee relationship during a legal strike. Two sections of the Canada Labour Code are relevant, and I will reproduce them here:
107. ...
(2) No person ceases to be an employee within the meaning of this Part by reason only of his ceasing to work as the result of a lockout or strike or by reason only of his dismissal contrary to this Part.
184. ...
(3) No employer and no person acting on behalf of an employer shall
(a) refuse to employ or to continue to employ or suspend, transfer, lay off or otherwise discriminate against any person in regard to employment, pay or any other term or condition of employment or intimidate, threaten or otherwise discipline any person, because the person
...
(vi) has participated in a strike that is not prohibited by this Part or exercised any right under this Part,
29. The arbitrator concluded, after considering these provisions, that s. 107(2) preserved only enough of the employer‑employee relationship to allow the union to act as a bargaining agent during the strike.
30. Esson J. and all three judges of the Court of Appeal found that this conclusion erroneously and unduly restricted the meaning of s. 107(2). Lambert J.A., who dissented in the Court of Appeal on the question of the jurisdictional nature of the error, wrote at p. 150:
The employer‑employee relationship is not in full flower during the strike but, at the very least, there must remain a continuing obligation on each party to the relationship not to do anything that so damages the root of the relationship that the relationship will never be able to flower again.
31. I agree that the arbitrator erred in interpreting s. 107(2) This Court has had the opportunity to discuss the status of employees during a strike with respect to the bargaining agent in Canadian Pacific Railway Co. v. Zambri, [1962] S.C.R. 609. In that case, the Court was considering a provision of the Ontario Labour Relations Act, R.S.O. 1960, c. 202, similar to s. 107(2) of the Canada Labour Code. The Ontario provision read:
1. ...
(2) For the purposes of this Act, no person shall be deemed to have ceased to be an employee by reason only of his ceasing to work for his employer as the result of a lock‑out or strike or by reason only of his being dismissed by his employer contrary to this Act or to a collective agreement.
32. In determining the meaning of this section, Cartwright J. wrote, at p. 617:
It is not necessary to decide the exact nature of the relationship of employer and employee the existence of which this subsection preserves, or creates, during the continuance of a strike; two of the main features of the ordinary relationship are absent, the employee is not bound to work and the employer is not bound to pay wages. Whatever the relationship be, it is obvious that if the employer is entitled to terminate it on the sole ground that the employee refuses to work while the strike continues, the subsection is rendered nugatory. [Emphasis added.]
33. I emphasize the words "on the sole ground" because in my view Cartwright J., at the very least, left open the possibility that there would be other grounds available for dismissal during the course of a strike. His conclusion as to the meaning of s. 1(2) contains a similar limitation (pp. 617‑18):
...it appears to me that the effect of s. 1(2) is (i) to provide that while the strike continues the employees on strike do not cease to be employees of the appellant, and (ii) to prevent the employer from terminating that employer‑employee relationship by reason only of the employee ceasing to work as the result of the strike. [Emphasis added.]
34. In dealing with the same section, Arnup J.A. for the Ontario Court of Appeal, (Re Allanson (1971), 20 D.L.R. (3d) 49), wrote at pp. 56‑57:
For the purpose of the construction of this trust agreement I am prepared to accept the proposition that employees of the Company who were engaged on December 31, 1969, in a lawful strike are not, by reason only of the strike, to be regarded as having ceased to be "employed by the Company" on that date.
35. In their work Ontario Labour Relations Board: Law and Practice (1985), Sack and Mitchell comment on the interpretation given to s. 1(2) by the Ontario Labour Relations Board. They write, at pp. 425‑26:
Finally, it should be noted that, while the discharge of or refusal to reinstate strikers for reasons of anti‑union animus or for engaging in proper strike or picketing activity is a violation of the Act, the discharge and refusal to reinstate a striker for cause during the currency of a strike or the refusal to arbitrate such issues is not a violation of the Act. Indeed, the employer retains the right to lawfully discipline the employee after the employee is reinstated . . . .
36. The Quebec Labour Code, R.S.Q., c. C‑27, contains a similar disposition. The first paragraph of article 110 reads:
110. No person shall cease to be an employee for the sole reason that he has ceased to work in consequence of a strike or lock‑out.
37. This provision has been discussed on several occasions by the Labour Court and the Superior Court. In Dumais v. Champoux Automobile Inc., [1970] T.T. 120, the Labour Court was called on to give an interpretation of s. 98 of the Labour Code (currently art. 110). The court stated at p.122 that:
[TRANSLATION] Section 98 guarantees employees that their individual contracts will not be broken solely because of a lockout or strike; but at the same time the words "for the sole reason" indicate that this protection is not absolute. An employer may break the individual contract if he has other reasons for doing so.
38. In Commission des normes du travail c. Manufacture Sorel Inc., [1984] C.S. 747, the Quebec Superior Court considered the meaning of s. 110 of the Labour Code. The court found, based on that article, a strike did not end the individual contract of employment, and that therefore, an employer wishing to dismiss an employee during the course of a strike was required to meet the notice requirements elsewhere in the Code. The court cited with approbation the following passage from R. Gagnon, L. LeBel and P. Verge Droit du travail en vigueur au Québec (1971), at p. 206:
[TRANSLATION] A strike suspends the payment of benefits resulting from the employment tie. The employee no longer has to provide his services. In return, he loses his salary and fringe benefits. His seniority, for example, ceases to accumulate during a strike. He will however retain his employment, unless he goes to work somewhere else or commits an individual wrongful act during the strike.
39. Finally, in his detailed study entitled Le statut juridique du salarié‑gréviste québécois (1981), Gaston Nadeau writes at p. 74:
[TRANSLATION] It is quite clear from reading the Code that when he enacted it in 1964 the legislator intended to elevate the legal strike to the level of a right . . . . An employee wrongfully dismissed for the exercise of this right may thus properly claim an order of reinstatement and compensatory damages for the losses suffered while he was out of work. However, the fact that an employee is dismissed during a legal strike does not automatically mean he was dismissed because he was exercising a right conferred by the Code.
40. American jurisprudence can also offer some assistance in this matter. Although obviously dealing with a different statute, many of the fundamental labour law principles remain the same. For this reason I find it persuasive that in the United States, as a general principle, an employer can dismiss employees who commit criminal or violent acts in the course of a strike. (See Firestone Tire & Rubber Co. v. N.L.R.B., 449 F.2d 511 (5th Cir. 1971), at p. 513.)
41. This position is further explained by N.L.R.B. v. Hartmann Luggage Co., 453 F.2d 178 (6th Cir. 1971), at pp. 183‑84:
The employee's right to engage in concerted activity may permit some leeway for impulsive behaviour, which must be balanced against the employer's right to maintain order and respect (Citation omitted). Initially, the responsibility to draw the line between these conflicting rights rests with the Board, and its determination, unless illogical or arbitrary, ought not to be disturbed.
42. Of course, while I use the American case law to illustrate the general principle of the continuance of the employer‑employee relationship during a strike, I am mindful that the American system and labour statutes are significantly different in many respects from our own. However, the above quoted passage does serve to demonstrate that an employer maintains the right to discipline employees during a strike for cause unrelated to union activity.
43. All of the above quoted authorities contribute to the understanding that s. 107(2) should be interpreted to still permit disciplinary actions by employers for activities carried on during the course of a strike, so long as these actions are not aimed at punishing employees for nothing more than union activities and participating in a lawful strike. This interpretation is further supported by the French version of s. 107(2) which reads:
107. ...
(2) Aucune personne ne cesse d'être un employé au sens où l'entend la présente Partie du seul fait qu'elle cesse de travailler par suite d'un lock‑out ou d'une grève ni du seul fait qu'elle a été congédiée en violation de la présente Partie.
44. The words "du seul fait" clearly express the idea that participation in lawful strike activities alone cannot justify an employee's dismissal. However, the section leaves open the possibility that other reasons may arise for which the employer would be entitled to dismiss a striking employee. The dismissal of an employee during a strike is only unlawful where such dismissal would also constitute an unfair labour practice as set out in s. 184.
45. In light of this interpretation, it is clear that the arbitrator erred in law when he decided:
‑‑ "...that the Code presumes that interference in the conduct of the strike by the Employer is deemed to be an unfair practice"
‑‑ "...that the legislation provides that the use of disciplinary powers during a strike is an offence."
46. The next step is to decide whether these errors of law are jurisdictional in nature, so as to leave open the door for judicial review.
Jurisdictional Error
47. It is well accepted that a mere error of law in an arbitration is not sufficient to open the door to review by the courts. The error must be jurisdictional in nature.
48. In Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corporation, [1979] 2 S.C.R. 227, Dickson J., as he then was, formulated the "patently unreasonable test" as an aid to determining whether a jurisdictional error has occurred. He sets out the question to be asked at p. 237:
Did the Board here so misinterpret the provision of the Act as to embark on an inquiry or answer a question not remitted to it? Put another way, was the Board's interpretation so patently unreasonable that its construction cannot be rationally supported by the relevant legislation and demands intervention by the court upon review? [Emphasis added.]
49. In Syndicat des employés de production du Québec et de l'Acadie v. Canada Labour Relations Board, [1984] 2 S.C.R. 412, Beetz J. explained jurisdictional error in these terms, at pp. 420‑21:
A jurisdictional error results generally in an excess of jurisdiction or a refusal to exercise jurisdiction, whether at the start of the hearing, during it, in the findings or in the order disposing of the matter. Such an error, even if committed in the best possible good faith, will result nonetheless in the decision containing it being set aside . . . .
50. As discussed earlier, in a consensual arbitration where a particular question is posed by the parties to the arbitrator, that question determines the jurisdiction of the arbitrator. In this case, the question posed has been formulated in different ways.
51. The arbitrator does not set out any one statement of the question posed to him. At one point he attempts this formulation:
The question before me is whether the Employer, having surrendered that matter to arbitration, can assert in the arbitration itself that the conduct of the employees during the strike can be measured by arbitral principles that presume the existence of a normal relationship.
52. With all due respect, I cannot accept his formulation. In my view the arbitrator was being asked to determine what, if any, disciplinary sanctions the 24 employees should face. This can be determined from other parts of his reasons. In discussing the strike and its settlement, the arbitrator expresses the issue which eventually fell to him to be decided as follows:
Left outstanding was the issue of the 24 employees who had been dismissed and whether they would be returned to work or would remain dismissed.
53. In discussing the submission made to him by the parties, the arbitrator states: ". . . I have the jurisdiction to determine the fate of the 24 employees" [emphasis added].
54. Esson J. of the British Columbia Supreme Court found that the arbitrator was called upon to decide if the employees would return to work or would remain dismissed, and also to determine whether, "if dismissal was found inappropriate, there should be the lesser penalty of suspension" (p. 709).
55. Lambert J.A. of the Court of Appeal phrased the question as follows, at p. 159:
It seems to me that the question asked in this case was: "What is to be done about the 24 employees who were dismissed during the strike, and who, by agreement, reported back to work on Monday, 23 March, 1981: Should any or all of them be dismissed or suspended?
56. I find that both of these formulations of the question set out the same general terms of jurisdiction. The arbitrator was to decide what disciplinary sanctions were appropriate in the case of each of the 24 employees due to the conduct during the strike. The arbitrator, in his findings of fact, concluded that:
On the evidence before me all employees involved committed acts that would be deserving of discipline in a normal employer‑employee relationship. The acts ranged from minor acts of sabotage, such as letting the air out of tires, to criminally stupid acts such as threats of bodily harm to supervisors and their families.
57. The error of the arbitrator in interpreting s. 107(2) of the Canada Labour Code to mean that no employer‑employee relationship existed resulted in his flat refusal to exercise the jurisdiction accorded to him by the parties. He even expressed his refusal in jurisdictional terms:
...I must consider if I have any jurisdiction to assess the conduct of the employees in question.
And later:
...I do not see it as open to me to consider alternate forms of discipline such as a suspension or a reprimand. To do so would be to return to the disciplinary approach that I have concluded is inapplicable.
As Esson J. stated in his reasons for judgment, at p. 709:
The arbitrator's answer to the question whether the employees should "remain dismissed" was, in effect, to say that the question could not arise because, as a matter of law, the employer had no power of dismissal. So he did not consider, in relation to the merits of each case as disclosed by the evidence, whether the employee should remain dismissed.
58. Lambert J.A. disagreed with the determination that the error was jurisdictional. He placed great emphasis on the fact that the question put to the arbitrator was phrased in broad terms (pp. 158‑59):
...if the arbitrator adopts a rational process of applying principles to facts, and acts judicially, then, in my opinion, the Anisminic principle does not require anything more. If the arbitrator sticks to the task he is given, he is, in Lord Reid's words, as much entitled to decide the question submitted to him wrongly, as he is entitled to decide it rightly. Where the terms of reference are broad and imprecise, the scope for both right and wrong decisions within jurisdiction is correspondingly broad and imprecise. [Emphasis added.]
59. While I agree with Lambert J.A.'s observations about broad and imprecise mandates, the crucial issue still remains whether "the arbitrator sticks to the task he is given". Where an arbitrator errs in deciding that he or she does not have jurisdiction to decide a particular question, choosing to answer a different question cannot be said to be within the jurisdiction accorded to the arbitrator by the parties.
60. I also accept the conclusions of Esson J. with respect to the arbitrator's formulation of a three‑part test to evaluate the conduct of the employees. The test was designed to remove from consideration any conduct which was directly related to the labour dispute. Esson J. wrote, at p. 712:
It would be entirely within his jurisdiction to have regard, as a relevant circumstance, to the question whether the conduct complained of was related to the strike. But that is not the way in which the arbitrator applied the test. Rather, he concluded, as a matter of law, that, where the acts complained of were directly related to the labour dispute, no discipline or sanction of any kind could be imposed.
61. I am therefore in agreement with the majority of the Court of Appeal in finding that the test applied by the arbitrator was also directly related to the error of law. Thus, the decision of the arbitrator that the employer had no right to impose disciplinary sanctions upon striking employees was fundamental to all of his conclusions in the arbitration. It was not a minor error or one which takes on insignificant proportions. It was a substantial error affecting the outcome of the arbitration.
62. When a consensual arbitrator declines to answer the question posed to him because, due to an error of law, he declares he does not have the jurisdiction to do so, and instead answers a different question, there is no doubt in my mind that the error of law is one going to jurisdiction. Here, the arbitrator declined to answer the question of appropriate discipline for the 24 employees. He did so because his interpretation of s. 107(2) supposedly left him without jurisdiction to make this decision. This is a patently unreasonable interpretation of his jurisdiction. Instead, he decided to answer the question of whether the employees should remain dismissed, that is, whether the employer had any "right" to discipline them in the first place. This was not the question put to him by the parties. In answering that question, and in refusing to consider the appropriate discipline for the 24 employees, the arbitrator committed an error going to jurisdiction, and his award is subject to judicial review.
Reviewability of the Arbitrator's Award
63. Over the past number of years, this Court has developed a non‑interventionist approach to judicial review of administrative bodies. The rationale for this approach has to do with the Court's deference to the "expertise" of statutorily established and administered tribunals. In the field of labour law, the concentration of decision making power among labour tribunals and arbitrators is designed for efficiency, and is tailored to the development of a coherent labour law policy. The general idea is that courts should decline to review decisions of administrative boards or tribunals unless such a body has rendered a decision in excess of jurisdiction. Dickson J. (as he then was) commented on the reasons behind this policy in New Brunswick Liquor Corporation, supra. He wrote at pp. 235‑36:
The rationale for protection of a labour board's decisions within jurisdiction is straightforward and compel‑ling. The labour board is a specialized tribunal which administers a comprehensive statute regulating labour relations. In the administration of that regime, a board is called upon not only to find facts and decide questions of law, but also to exercise its understanding of the body of jurisprudence that has developed around the collective bargaining system, as understood in Canada, and its labour relations sense acquired from accumulated experience in the area.
64. Of course, this does not mean that the courts do not have the power to review a decision made by a board or arbitrator where such decision is made outside of the jurisdiction of the decision‑maker. The principle has been clearly expressed by this Court. In Service Employees' International Union, Local No. 333 v. Nipawin District Staff Nurses Association, [1975] 1 S.C.R. 382, Dickson J. (as he then was) wrote, at pp. 388‑89:
There can be no doubt that a statutory tribunal cannot, with impunity, ignore the requisites of its constituent statute and decide the questions any way it sees fit. If it does so, it acts beyond the ambit of its powers, fails to discharge its public duty and departs from legally permissible conduct. Judicial intervention is then not only permissible but requisite in the public interest. [Emphasis added.]
65. The same principle can be applied to the decisions of the consensual arbitrators. They must answer the question put to them by the parties, without ignoring its "requisites".
66. The duty of courts to intervene in matters of jurisdictional error is also explained by Beetz J. in Syndicat des employés de production du Québec et de l'Acadie v. Canada Labour Relations Board, supra, at p. 441:
Once a question is classified as one of jurisdiction, and has been the subject of a decision by an administrative tribunal, the superior court exercising the superintending and reforming power over that tribunal cannot, without itself refusing to exercise its own jurisdiction, refrain from ruling on the correctness of that decision, or rule on it by means of an approximate criterion.
67. The non‑interventionist stance is not being challenged in the present case. What is in issue, however, has a great deal to do with the question of when to intervene. I am in general agreement with the non‑intervention approach, particularly with respect to specialized tribunals or boards which have established a philosophy and developed expertise. However, just as there are limits to the courts' power to review administrative bodies, there must also be limits to the courts' disinclination to involve themselves in issues arising from consensual arbitrations. It seems to me that in some cases the principle of non‑intervention is used to discourage a finding of jurisdictional error. While this approach might be of limited relevance in situations where it is almost impossible to determine whether a jurisdictional error has occurred (that is, where there exists an element of judicial discretion), it cannot be used to evade intervention in cases where a jurisdictional error is manifest. Improperly applied, the policy of non‑intervention runs the risk of watering down the concept of jurisdictional error. Such an approach could encourage the development of a body of clearly erroneous precedents instead of providing guidance where boards are clearly divided. The two principles of non‑intervention within jurisdiction, on the one hand, and judicial review of excess of jurisdiction, on the other, are principles of equal importance in the area of administrative law, and one cannot be allowed to override the other. It is right to dismiss claims which are nothing more than "appeals" from otherwise valid administrative decisions. However, it is wrong to dismiss claims which raise valid jurisdictional questions simply because they come from administrative decision‑making bodies and not from the courts. To adopt this approach would be to ignore the principles of administrative law which entitle courts to review for violations of natural justice or jurisdictional findings including patently unreasonable error.
68. There must be some controls over administrative bodies. As H. W. R. Wade wrote in his Comment on Peter A. Gall's "Judicial Review of Labour Tribunals: A Functional Approach", in Proceedings of the Administrative Law Conference, University of British Columbia (1979), at p. 375:
Judicial power can be abused, and so for that matter can legislative power, but I feel no doubt at all that the power which demands most attention from lawyers is administrative power. Judicial power is restrained by a most elaborate system of rules, precedents, appeals, etc. Legislative power is restrained by responsibility to the electorate. But administrative power is restrained by little unless by law. Personally I believe that judicial review is necessary to prevent abuse and to preserve fairness, and that if not carried to excessive lengths it is perfectly compatible with efficient administration.
69. An individual with a claim for judicial review should not be discouraged from seeking relief from the courts on the sole basis that the courts have formulated a non‑interventionist "policy" in matters arising from decisions of administrative bodies. It is true that the courts ought to defer to the expertise of these specialized bodies as the final decision‑makers within their areas of expertise, but this does not oust the duty of the courts to evaluate the decisions for procedural fairness or jurisdictional error.
70. I do not mean to say that courts must begin to review each and every case submitted to them. Where there is no error going to jurisdiction, there is no scope for review. I would agree with the majority that if there is no jurisdictional error, we ought to defer. But, contrary to the opinion of the majority, in my view, a jurisdictional error exists in this case, and there is a duty to intervene. As I have stated above, where the error is jurisdictional in nature, the court must intervene. Thus, the true focus for decision making is not on the degree of restraint to be exercised, but on the existence and nature of the error, be it a consensual arbitration or not.
71. Lambert J.A., and the majority of this Court by implication, place a great deal of weight on the fact that this was a consensual arbitration. In the words of Lambert J.A., at p. 152:
A statutory tribunal should follow its own previous decisions and, for that reason, ought to be required to be right in its interpretation of general public enactments and general legal principles, and ought to arrive at its decisions, even on matters particularly within its special expertise and function, on the basis of a demonstrably rational process. Those requirements do not have quite the same force in the case of a consensual arbitrator. The significant fact about a consensual arbitrator is that the parties have picked the arbitration process, and they have picked the arbitrator, because they want that process and that arbitrator in preference to any other process or any other decision maker. And they want the arbitrator to do what they ask him to do in the way they ask him to do it and not to do something else in some other way.
In short, the Anisminic principles apply to a consensual arbitrator, but there is maximum scope for curial deference, and for judicial restraint, in the determination of whether the arbitrator contravened his terms of reference, and so made a "jurisdictional" error. [Emphasis added.]
72. With deference, I do not see how this elaboration of distinction between the two types of arbitrations establishes a need for a particularly restricted scope for judicial review in the case of consensual arbitrations. Without putting too fine a point on it, judicial review is judicial review. Where there is an error going to jurisdiction, judicial review is the proper remedy. There is no different standard for review in consensual arbitrations.
73. The difference between consensual and statutory arbitrations, in terms of judicial review, has been discussed by this Court in Douglas Aircraft Co. of Canada Ltd. v. McConnell, [1980] 1 S.C.R. 245, where the question of consensual and statutory boards was raised by Estey J. The case involved judicial review of a statutory tribunal, the decisions of which were not protected by a privative clause. Estey J. discussed the history of judicial review of arbitrations, and in doing so touched upon the standard of review in cases of consensual arbitration. He wrote, at pp. 265‑66:
By 1857 it was well settled that a consensual board's decision could be set aside for fraud and by reason of an error of law appearing on the face of the record of the board. Hodgkinson v. Fernie and Another. It is also clear that in such a proceeding, a court would set aside an award where the arbitrator determined matters outside the area of his authority as described in the constituting contract. See Halsbury's Laws of England, 4th ed., Vol. 2, p. 330, para. 622. Finally, there evolved the sub‑rule, or at least a clarification of the old rule, in the judgment of Channell J. in In the Matter of an Arbitration Between King and Duveen and Others, at pp. 35‑6:
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.
In the case of R. v. Barber et al., Ex parte Warehousemen and Miscellaneous Drivers' Union Local 419, the Ontario Court of Appeal found that the rule applicable to the review of awards of consensual tribunals denying the courts authority to review the correctness in law of a decision on the very question of law specifically referred to the board, but at the same time permitting the court to review an error of law made by the consensual board with reference to material matters `arising but not specifically referred,' does not apply to the review of a decision by a statutory board.
74. This Court again considered the question of consensual arbitration in Volvo Canada Ltd. v. U.A.W., Local 720, [1980] 1 S.C.R. 178. In that case, a specific question of law had been referred to a consensual arbitrator. The main issue in that case, with respect to the reviewability of the arbitrator's decision was whether the arbitrator had in fact answered the question put to him. Chief Justice Laskin, writing separate reasons concurring in the result of the case, enunciated a strict standard for review of consensual arbitration cases. The concern of Laskin C.J. appeared to be with broad review powers which would unduly interfere with the method of dispute resolution chosen by the parties. Laskin C.J. drew a distinction between consensual arbitrations where a specific question of law is submitted to the arbitrator, and ordinary grievances. In the former case, there can be no review, unless the answer given was not to the question posed. In the case of grievances, Laskin C.J. wrote at p. 195:
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 . . . .
75. Given the rather obvious room for confusion between all of these distinctions and categories, Laskin C.J. attempted to provide some guidelines, at p. 198.
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.
76. Laskin C.J. summarized his position at p. 203:
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.
77. In separate reasons in Volvo Canada, supra, Estey J., while agreeing with Laskin C.J. as to the limited scope of judicial review of consensual arbitrations, differed as to the approach to review. He writes, at p. 220:
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.
78. This is a more basic and simplified approach which essentially allows for review whenever the arbitrator exceeds his or her jurisdiction.
79. The distinction in treatment of statutory and consensual arbitrations seems to me to be illusory. The position is the same as that which exists with respect to judicial review in general. The only difference with consensual arbitration is the way in which jurisdiction is defined. To a large extent it is the parties, rather than a statute, which give the consensual arbitrator his or her jurisdiction. The bottom line, however remains jurisdiction. As Gaston Nadeau writes in his article "Le contrôle judiciaire des tribunaux du travail ‑‑ Quelques commentaires sur la révision des sentences arbitrales par la Cour Suprême du Canada" (1980), Meredith Lectures 138, at p. 140:
[TRANSLATION] In the case of statutory tribunals covered by a privative clause, the superior courts could only intervene on questions of jurisdiction, but on such questions the power of review was to be exercised without limitation. The same rule applied to the decision of a consensual tribunal when the parties had asked it to settle a pure question of law.
When the statutory tribunal was not covered by a privative clause, its decisions were also reviewable for error of law on the face of the record. The same rule applied to the decision rendered by a consensual tribunal when it had a general issue before it (as opposed to a pure question of law).
80. The reason why there is limited review of the answer to the question specifically referred to the arbitrator for decision is because such a question defines the jurisdiction of the consensual arbitrator. Any answer which is truly a response to the question posed must necessarily be within jurisdiction. However, scope for review remains when the answer given is not appropriate to the question, or where there is "an error of law made by the consensual board with reference to material matters `arising but not specifically referred'" (Douglas Aircraft, supra, p. 266).
81. In his article "Recent Developments in Canadian Law: Labour Law" (1986), 18 Ottawa L.R. 83, Michael MacNeil comments on the similarity in approach to the statutory and consensual arbitrations. He observes, at p. 102:
Another indication of this unifying trend is the now almost meaningless distinction between statutory and consensual tribunals. At one time it was believed that the characterization of a tribunal as consensual would lead to greater judicial deference when an error was made with respect to a specific question of law presented to the tribunal. However, the Supreme Court has applied a very restrictive test to determine what is a specific question and, despite the objections of Laskin C.J.C., appears to have held that even an error on a specific question could be reviewed on certain grounds.
82. A similar observation has been made by Gaston Nadeau, supra. Nadeau discusses the development of the law respecting review of consensual arbitrations at p. 139:
[TRANSLATION] Canadian courts had developed a number of quite specific rules over the years determining the scope of the power of review. First, it had to be decided whether the tribunal below had been created by statute or whether it was a consensual or private tribunal. In the case of a statutory tribunal, the scope of the judicial review depended on whether there was a privative clause. When a consensual tribunal was in question, the nature of the dispute before it was what determined the degree of judicial intervention.
83. In Nadeau's view, there is a tendency towards an elimination of the distinction between the two types of dispute resolution for the purposes of judicial review: [TRANSLATION] "There is therefore a clear tendency as well to eliminate the distinction between statutory and consensual arbitration." (p. 142)
84. It is my view that the standard of judicial review of arbitrations, whether consensual or statutory is essentially the same. I see no valid reason for a distinction. Certainly, the question of who or what sets the parameters of the jurisdiction of the arbitrator may be different in each case. It may be the legislator or it may be the parties themselves. But, fundamentally, judicial review is available whenever an arbitrator exceeds his or her jurisdiction. Courts should naturally be careful to respect the will of the parties in a consensual arbitration, but, as in the case of a statutory arbitration, jurisdictional matters are subject to review. In a case where an arbitrator has exceeded his or her statutory or consensual jurisdiction, the award rendered will not reflect the will of the parties or respect the terms of the statute. A complaining party is, in such circumstances, entitled to judicial review. I accept a deferential approach to expertise but it must not be so interpreted as to deny recourse to the courts where natural justice or jurisdictional issues are involved.
85. In a case such as this one it would be manifestly unjust for the courts to refuse to exercise their own powers of judicial review. The deferential approach is not a licence to refuse review. It is merely a caution to courts to recognize the proper role and function of administrative bodies. When such bodies fail to act within jurisdiction, the court does not have the discretion to intervene, it has a duty to intervene at the behest of one or another of the parties.
86. In the result, I would dismiss the appeal.
Appeal allowed with costs, L'Heureux‑ Dubé J. dissenting.
Solicitors for the appellant: Shortt & Company, Vancouver.
Solicitors for the respondent: Farris, Vaughan, Wills & Murphy, Vancouver.
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