Centre Hospitalier Régina Ltée v. Labour Court, [1990] 1 SCR 1330

 

Centre hospitalier Régina Ltée v. Labour Court, [1990] 1 S.C.R. 1330

 

Centre hospitalier Régina Ltée                                                                                       Appellant

 

v.

 

Judge Bernard Prud'homme

and the Labour Court                Respondents

 

and

 

Cécile Montigny, Syndicat national

des employés de l'Hôpital Régina

(C.S.N.) and Raynald Fréchette,

in his capacity as Minister of Labour                                                                              Mis en cause

 

indexed as:  centre hospitalier régina ltée v. labour court

 

File No.:  20746.

 

1990:  January 26; 1990:  May 31.

 

Present:  Lamer, Wilson, L'Heureux‑Dubé, Sopinka, Gonthier, Cory and McLachlin JJ.

 

on appeal from the court of appeal for quebec

 

    Labour relations ‑‑ Union ‑‑ Duty of representation ‑‑ Withdrawal by union of employee dismissal grievance following general agreement settling grievances when collective agreement renewed ‑- Whether union breached its duty of representation ‑‑ Limits on union discretion to take grievance to arbitration ‑‑ Scope of Labour Court's power of redress where union breaches its  duty of representation -- Interpretation of ss. 47.2 to 47.6 of Labour Code, R.S.Q., c. C‑27.

 

    Labour relations ‑‑ Labour Court -- Jurisdiction -- Scope of Labour Court's power of redress ‑‑ Withdrawal by union of employee dismissal grievance following general agreement settling grievances when collective agreement renewed ‑‑ Breach by union of its duty of representation ‑‑ Whether Labour Court exceeded its jurisdiction by referring employee's claim to arbitration ‑‑ Interpretation of ss. 47.2 to 47.6 of Labour Code, R.S.Q., c. C‑27.

 

    As a result of many absences from work due to illness, an employee was notified by her employer that it regarded her behaviour as an abandonment of her position.  At the employee's request, the union filed a grievance dismissal against the employer, and following numerous delays this grievance was entered on the social affairs arbitration roster.  When the collective agreement was renewed, the employer and the union signed a general agreement to settle grievances, including the grievance relating to the employee's dismissal.  A member of the union stated that it did not realize one of the grievances concerned a dismissal.  When notified several months later that her grievance had been withdrawn, the employee filed a complaint with the Minister of Labour alleging a breach by the union of its duty of representation.  As no settlement was reached between the employee and the union within fifteen days of the appointment of an investigator by the Minister, the employee filed an application with the Labour Court under s. 47.4 of the Code, asking that the Labour Court order that her claim be referred to arbitration.  The Court held that ss. 47.2 et seq. of the Code were applicable since this was not an abandonment of a position but rather a dismissal.  Characterizing the union's conduct as cavalier and arbitrary, the court concluded that it had failed in its duty of fair representation, allowed the application and referred the employee's claim to an arbitrator appointed by the Minister.  The employer then applied to the Superior Court for a writ of evocation against the Labour Court's decision.  The Superior Court dismissed the application and this judgment was affirmed by the Court of Appeal.  This appeal concerns the interpretation of ss. 47.2 to 47.6 of the Code, and in particular, is to determine whether these sections are applicable to the claim of an employee whose grievance against her dismissal was the subject of an agreement between her employer and her union, when the matter was before an arbitrator but there had not yet been any decision on the grievance.

 

    Held:  The appeal should be dismissed.

 

    By adopting ss. 47.2 to 47.6 of the Labour Code in 1977 the Quebec legislator codified the duty of representation and gave the employee a remedy in certain cases where the union breaches its duty.  The duty of representation as codified in s. 47.2 of the Code does not differ greatly from that formulated by the courts prior to 1977.  In a grievance proceeding, the union must (1) carefully consider the merits of the grievance to decide whether it should be taken to arbitration; (2) if the union decides that the grievance has merit, it must represent the employee without serious negligence, discrimination or bad faith at all subsequent stages of the grievance procedure.  Although the union is acting as a defender of an employee's rights, it must take into account the interests of the bargaining unit as a whole in exercising its discretion whether or not to proceed with a grievance.  However, this discretion is not unlimited.  A union may not "sacrifice" any grievance which it feels is valid during negotiations with the employer in order to obtain a concession of better working conditions or other benefits for the bargaining unit as a whole.  Though the union must have some discretion in collective bargaining to "swap" grievances, in exercising its discretion the union must take into account the nature of the rights which the employee is seeking to enforce by his grievance.  There will be situations where the abandonment of an apparently valid grievance by the union will have such consequences for the employee in question that it will substantially restrain the union's discretion.  The wording of ss. 47.2 et seq. of the Code is consistent with the view that the union's discretion is limited when confronted with a choice between its duty of care toward an employee and that of representing the members of the bargaining unit.  The legislator has clearly indicated his preference by specifying in s. 47.3 the cases in which arbitration of a grievance may survive its abandonment by the union:  namely, cases of dismissal and disciplinary sanctions.  In this case, the union infringed its duty of representation as defined in s. 47.2 of the Code.  The union, which disposed of the employee's grievance regarding dismissal without even telling her, exercised its discretion not on serious grounds, taking into consideration advantages beneficial to the employees as a whole, but rather on grounds completely unrelated to the facts of the grievance, in a case where the nature of the latter did not permit this approach.

 

    Where a union which has filed a grievance regarding an employee's dismissal subsequently concludes an agreement with the employer by which it withdraws the grievance in violation of its duty of representation, the Labour Court has jurisdiction under s. 47.5 of the Code to refer the matter to arbitration.  Section 47.5 applies because there had been no decision by an arbitrator on the merits of the case, as the arbitration process was interrupted by the conclusion of an agreement between the union and the employer before the grievance was heard.  Such an agreement cannot be likened to an arbitral award (s. 101 of the Code) or a civil transaction (art. 1920 C.C.L.C.) so as to deprive the Labour Court of its jurisdiction under s. 47.5.  The filing of the agreement with the arbitrator under s. 100.3 of the Code has a purely procedural purpose and is only intended to technically terminate the dispute between the employer and the union as well as to inform the arbitrator of the existence of the agreement.  It does not have the effect of making the agreement final.

 

Cases Cited

 

    Applied:  Canadian Merchant Service Guild v. Gagnon, [1984] 1 S.C.R. 509; considered:  Gendron v. Municipalité de la Baie‑James, [1986] 1 S.C.R. 401; Milhomme v. Aubé, [1984] C.A. 1; Collège d'enseignement général et professionnel de Dawson v. Baena (1987), 7 Q.A.C. 153; referred to:  Bell Canada v. Canada (Canadian Radio-Television and Telecommunications Commission), [1989] 1 S.C.R. 1722; Steele v. Louisville & Nashville Railroad Co., 323 U.S. 192 (1944); Vaca v. Sipes, 386 U.S. 171 (1967); Gendron v. Supply and Services Union of the Public Service Alliance of Canada, Local 50057, [1990] 1 S.C.R. 000; Asselin v. Travailleurs amalgamés du vêtement et du textile, local 1838, [1985] T.T. 74; Bachiu and United Steelworkers of America, Local 1005, [1976] 1 Can. L.R.B.R. 431; Reference Re Public Service Employee Relations Act (Alta.), [1987] 1 S.C.R. 313; Syndicat des agents de la paix de la Fonction publique v. Richer, [1983] C.A. 167.

 

Statutes and Regulations Cited

 

Act respecting remuneration in the public sector, S.Q. 1982, c. 35.

 

Act respecting the conditions of employment in the public sector, S.Q. 1982, c. 45.

 

Civil Code of Lower Canada, art. 1920.

 

Code of Civil Procedure, R.S.Q., c. C‑25, art. 846.

 

Labour Code, R.S.Q., c. C‑27, ss. 47, 47.1, 47.2 to 47.6, 63(a), 72, 100.0.2, [ad. 1983, c. 22, s. 62], 100.3 [am. 1983, c. 22, s. 67], 101, 101.6, 109.1 et seq., 139; repl. 1982, c. 16, s. 5; am. 1983, c. 22, s. 93].

 

Authors Cited

 

Blumrosen, Alfred A.  "The Worker and Three Phases of Unionism:  Administrative and Judicial Control of the Worker‑Union Relationship" (1963), 61 Mich. L. Rev. 1435.

 

Clark, Julia Penny.  "The Duty of Fair Representation:  A Theoretical Structure" (1973), 51 Tex. L. Rev. 1119.

 

Gagnon, Jean-Denis.  "Le devoir de représentation des associations de salariés en droit canadien et québécois" (1981), 41 R. du B. 639.

 

Gagnon, Robert P.  Droit du travail.  Dans Cours de la formation professionnelle du Barreau du Québec 1988‑1989, vol. 6.  Cowansville, Que.:  Yvon Blais, 1988.

 

Gagnon, Robert P., Louis LeBel et Pierre Verge.  Droit du travail.  Québec:  Presses de l'Université Laval, 1987.

 

Mailhot, Louise.  "La liberté syndicale:  droits collectifs et droits individuels ‑‑ commentaires", dans Rodrigue Blouin et autres (ed.), Le Code du travail, 15 ans après ... Québec:  Presses de l'Université Laval, 1979.

 

Matteau, Colette.  "La liberté syndicale:  droits collectifs et droits individuels ‑‑ commentaires", dans Rodrigue Blouin et autres (ed.), Le Code du travail du Québec, 15 ans après ... Québec:  Presses de l'Université Laval, 1979.

 

Morin, Fernand et Rodrigue Blouin.  Arbitrage des griefs.  Montréal:  Yvon Blais, 1986.

 

Morin, Fernand.  Rapports collectifs du travail.  Montréal:  Thémis, 1982.

 

Weiler, Paul.  Reconci­lable Differences:  New Directions in Canadian Labour Law.  Toronto:  Carswells, 1980.

 

    APPEAL from a judgment of the Quebec Court of Appeal, [1988] R.J.Q. 253, affirming a judgment of the Superior Court[1], declining to issue a writ of evocation against a decision of the Labour Court, D.T.E. 85T‑254.  Appeal dismissed.

 

    Louis Gagnon and Carmelle Marchessault, for the appellant.

 

    André Fauteux, for the respondents and the mis en cause Fréchette.

 

    Jean‑Yves Brière and P. Gonneville, for the mis en cause Montigny.

 

    Maurice Sauvé, for the mis en cause Syndicat national des employés de l'Hôpital Régina (C.S.N.)

 

//L'Heureux-Dubé J.//

 

    English version of the judgment of the Court delivered by

 

    L'HEUREUX‑DUBÉ J. -- This appeal requires the interpretation of ss. 47.2 et seq. of the Quebec Labour Code, R.S.Q., c. C‑27 (hereinafter "L.C."), which govern the duty of fair representation of an employee association (or union) in labour relations and determine the consequences of noncompliance.

 

    In particular, this case puts in question the finality of the settlement of grievances between an employer and a union in light of an employee's right to arbitrate a grievance filed against his dismissal.  In the present case the settlement in question was concluded without the employee's participation and was part of a general agreement to settle grievances on the occasion of the renewal of a collective agreement.

 

The Legislation

 

    This appeal essentially turns on the interpretation of the mechanisms established by ss. 47.3 to 47.6 L.C., regarding a union's duty of representation covered by s. 47.2 L.C.  At the time this dispute arose, these provisions, as well as the provision relating to the filing of the collective agreement, read as follows:

 

47.2 [Behaviour of certified association] A certified association shall not act in bad faith or in an arbitrary or discriminatory manner or show serious negligence in respect of employees comprised in a bargaining unit represented by it, whether or not they are members.

 

47.3 [Complaint to Minister] If an employee who has been the subject of dismissal or of a disciplinary sanction believes that the certified association is, in that respect, violating section 47.2, he shall, if he wishes to invoke this section, submit a written complaint to the Minister within six months.  The Minister shall appoint an investigator who shall endeavour to settle the dispute to the satisfaction of the interested parties and of the certified association.

 

47.4 [Application to Court] If no settlement has been reached within fifteen days of the appointment of the investigator or if the association does not carry out the agreement, the employee shall, if he wishes to invoke section 47.2, apply to the Court within the fifteen ensuing days to request that his claim be referred to arbitration.

 

47.5 [Authorization of Court] If the Court considers that the association has violated section 47.2, it may authorize the employee to submit his claim to an arbitrator appointed by the Minister for decision in the manner provided for in the collective agreement, as in the case of a grievance.  Sections 100 to 101.10 apply mutatis mutandis.  The association shall pay the employee's costs.

 

[Other order] The Court may, in addition, make any other order it considers necessary in the circumstances.

 

47.6 [Non‑observance of delays] If a claim is referred to an arbitrator pursuant to section 47.5, the employer shall not allege the association's non‑observance of the procedure and delays provided for in the collective agreement for the settlement of grievances.

 

72.  [Agreement in force upon filing] No collective agreement shall take effect until the filing at the office of the labour commissioner‑general of five exemplars or copies, true to the original, of such collective agreement and of a true copy of its schedules.  The same rule applies to any amendment subsequently made to such collective agreement.

 

                                                                          . . .

 

These provisions remain unchanged to date apart from s. 47.4, where the time within which a settlement may be reached has been extended from fifteen to thirty days (S.Q. 1983, c. 22, s. 24).

 

    The procedural framework used here is the motion in evocation pursuant to art. 846 of the Quebec Code of Civil Procedure, R.S.Q., c. C‑25:

 

    846.  The Superior Court  may, at the demand of one of the parties, evoke before judgment a case pending before a court subject to its superintending and reforming power, or revise a judgment already rendered by such court, in the following cases:

 

    (1) when there is want or excess of jurisdiction;

 

    (2) when the enactment upon which the proceedings have been based or the judgment rendered is null or of no effect;

 

    (3) when the proceedings are affected by some gross irregularity, and there is reason to believe that justice has not been, or will not be done;

 

    (4) when there has been a violation of the law or an abuse of authority amounting to fraud and of such a nature as to cause a flagrant injustice.

 

    However, in the cases provided in paragraphs 2, 3 and 4 above, the remedy lies only if, in the particular case, the judgments of the court seized with the proceeding are not susceptible of appeal.

 

    Mention should be made here of s. 139 L.C., which prohibits recourse to art. 846 C.C.P.:

 

139.  [Prohibited recourses] Except on a question of jurisdiction, no extraordinary recourse contemplated in articles 834 to 850 of the Code of Civil Procedure shall be exercised and no injunction granted against any arbitrator, certification agent, labour commissioner or the Court acting in their official capacities.

 

    It is well settled law, however, that such a privative clause is not a bar to the exercise by the ordinary courts of their superintending and reforming power in cases of excess of jurisdiction by a statutory tribunal subject to that power.  Following ample earlier authority by this Court, Gonthier J. recently reiterated this principle for the Court in Bell Canada v. Canada (Canadian Radio‑Television and Telecommunications Commission), [1989] 1 S.C.R. 1722, at p. 1744:

 

Where the legislator has clearly stated that the decision of an administrative tribunal is final and binding, courts of original jurisdiction cannot interfere with such decisions unless the tribunal has committed an error which goes to its jurisdiction.  . . .  Decisions which are so protected are, in that sense, entitled to a non‑discretionary form of deference because the legislator intended them to be final and conclusive and, in turn, this intention arises out of the desire to leave the resolution of some issues in the hands of a specialized tribunal.  [Emphasis added.]

 

These principles are not at issue here and, as ss. 101 and 139 L.C. clearly indicate that Labour Court decisions are final, this Court will only intervene in the circumstances if the Labour Court has "committed an error which goes to its jurisdiction", according to the criteria established in earlier cases.

 

Facts

 

    The appellant, Centre hospitalier Régina Ltée, is an employer operating a private institution within the system of the Quebec Ministère des Affaires sociales, which was at all times relevant to the case associated with the Syndicat national des employés de l'Hôpital Régina by the terms and conditions of a collective agreement in effect since March 27, 1980.  During this period the mis‑en‑cause Cécile Montigny was an employee of the appellant, with her name on the recall list as a beneficiaries clerk.  On July 30, 1981 the appellant notified Cécile Montigny in writing that, as a result of her many absences from work due to illness, it regarded her attitude as an abandonment of her position as of July 27, 1981.  On August 12, 1981 the mis en cause union filed a grievance challenging what it alleged was a dismissal.  As the result of various delays this grievance was not entered on the social affairs arbitration roster until June 16, 1982.  Meanwhile the collective agreement, which would ordinarily have expired on December 31, 1982, was renewed until April 1, 1983 as a consequence of the Act respecting remuneration in the public sector, S.Q. 1982, c. 35, and the Act respecting the conditions of employment in the public sector, S.Q. 1982, c. 45.

 

    The new collective agreement applicable to the parties provided that various matters would be the subject of local agreements, which meant that certain advantages and benefits were no longer automatically available to the employees affected.  In March 1983, therefore, negotiations were begun between appellant and the mis en cause union with a view to concluding a general agreement enabling employees represented by the union to receive various benefits provided for in the agreement.  On March 20, 1983 the parties agreed that the union would receive the various benefits set out therein.  On the same day the parties signed a document prepared for the arbitration tribunals office of the social affairs sector, in which they stated that grievances then pending, including Cécile Montigny's grievance of August 12, 1981, were henceforth settled in return for a general payment of $1,672 by the employer.  These agreements were filed with the office of the labour commissioner‑general in accordance with s. 72 L.C.  A member of the union local stated that it did not realize one of the grievances concerned a dismissal.  Cécile Montigny, who had not been told of this settlement or been involved in it, was not notified that her grievance had been discontinued until several months later.

 

    On October 24, 1983 Cécile Montigny filed a complaint with the Minister of Labour pursuant to s. 47.3 L.C., alleging a breach by the union of its duty of fair representation, whereupon the Minister in fact appointed an investigator as provided for in that section.  As no settlement was reached between Cécile Montigny and the union within the time specified by the Act after the appointment of the investigator, she filed an application under s. 47.4 L.C. asking that the Labour Court order that her claim be referred to arbitration.  Judge Prud'homme granted this application on February 12, 1985, D.T.E. 85T‑254, and authorized Cécile Montigny to submit her claim against her employer to an arbitrator appointed by the Minister for decision as in the case of a grievance.  It is this decision which the appellant evoked to the Superior Court pursuant to art. 846 C.C.P.  The motion in evocation was dismissed by the Superior Court and that judgment was affirmed by the Court of Appeal, [1988] R.J.Q. 253:  hence the present appeal.

 

The Arguments

 

    The appellant makes two principal arguments in support of its appeal, one concerning jurisdiction and the other concerning interpretation.

 

    First, it submits that the Labour Court lacked jurisdiction to order the referral to arbitration of a grievance settled by an agreement between the union and the employer.  Relying on the judgment of this Court in Gendron v. Municipalité de la Baie‑James, [1986] 1 S.C.R. 401, which held that the Labour Court could not order a second arbitration of a grievance on the basis of s. 47.5 L.C., the appellant argued that the agreement settling the grievance should be given the same force as a transaction in civil law.  That is, it should have the force of res judicata between the parties, so that under the rule stated in Gendron the Labour Court would lose all jurisdiction to order arbitration of the grievance.  It based this comparison of the agreement to a civil transaction on the fact that the settlement must be filed by the arbitrator with the office of the labour commissioner‑general as in the case of a decision (s. 100.3 L.C.), and on the fact that labour law encourages the settlement of grievances by mutual agreement.  The appellant added that the Labour Court, whose jurisdiction stricto sensu must be limited to the powers with which it is clearly vested, has no jurisdiction to set aside this bilateral civil contract and disregard the rights it confers on the employer.  In the appellant's submission, the Labour Court made an error of jurisdiction in assuming this power, paving the way for intervention by the ordinary courts in the exercise of their superintending and reforming power.

 

    Second, the appellant analyses the provisions of the Labour Code and concludes that they could not support the Court of Appeal's interpretation.  Under these provisions, the union is the exclusive representative of the employees' rights and the employer's only interlocutor.  Giving an employee individually the right to challenge an agreement signed by the union and to take a grievance to arbitration himself would be directly contrary to the two‑sided nature of collective labour relations.  The appellant argues that ss. 47.2 to 47.6 L.C. do not support such an interpretation, which would in any case have a significant destabilizing effect on collective labour relations in general.  The appellant accordingly concludes that for these reasons the decision of the Labour Court was null and void and asks that its appeal be allowed.

 

    The respondents and the mis en cause, Cécile Montigny and the Syndicat national des employés de l'Hôpital Régina, argue on the contrary that the Labour Court had complete jurisdiction to order arbitration, even of a grievance already settled by agreement between the union and the employer.

 

    They contend that a union's duty of fair representation exists at all stages of the negotiation and implementation of a collective agreement.  According to the respondents the agreement becomes part of an independent legal system created by the provisions of the Labour Code.  The rules of mandate and civil representation therefore have no application and should not be used as a guide in interpreting the provisions of this Code.

 

    As regards the interpretation of ss. 47.2 et seq. L.C., the respondents note that the legislator intended to provide employees with an appropriate remedy to ensure performance of the union's duty set out in s. 47.2 L.C.  They argue that there is no provision of the Labour Code giving the settlement of a grievance the same effect as an arbitral award and that the rules of a civil transaction clearly cannot be applied to the special situation of a union settling the grievance of an employee with an employer.

 

    The respondents conclude that the Labour Court's decision was a valid exercise of its powers and that, in the absence of any excess of jurisdiction, there is no basis for intervention by the courts.

 

Judgments

 

Labour Court (Judge Prud'homme)

 

    The Labour Court dismissed in limine litis the appellant's objection that the provisions of ss. 47.3 et seq. L.C. are not applicable here since the case does not involve a dismissal or disciplinary sanctions.  The Court found on the contrary that this was not an abandonment of a position but rather a dismissal.

 

    The Court had this to say regarding the argument that the settlement of grievances reached between union and employer is final:

 

[TRANSLATION] It should first be noted that in ss. 47.3 et seq. the legislator has not excluded from the process which may lead to a s. 47.5 authorization the situation in which there is a settlement of a grievance between the association and the employer; . . . .  It is simply that the pith and substance of the jurisdiction conferred on the Court requires it to verify whether or not s. 47.2 was infringed at the time of a dismissal or disciplinary sanction, and if it finds that there has been such an infringement, to authorize the special remedy provided by s. 47.5.  It can thus be seen that the setting aside of a settlement reached between the association and the employer can only take place as a result of the exercise by the Court of its jurisdiction; it cannot be in itself a subject of its jurisdiction.

 

It concluded:

 

    [TRANSLATION] The Centre also vigorously argued, with supporting authority, that it must be recognized that a grievance settlement reached between the association and the employer, as here, was final and binding on the parties.  The undersigned is well aware that in the normal course of events an agreement, a grievance settlement, is finally binding on the parties and closes the matter; however, it has to be admitted that since the adoption by the legislator of ss. 47.2 et seq. it is possible to force the reopening of a matter which was considered closed.

 

Before authorizing the remedy provided by s. 47.5 L.C., the Court weighed the merits of the complaint by Cécile Montigny against the union.  It found the latter's account that it did not realize the grievance was one involving dismissal rather inconceivable.  Characterizing the union's conduct as cavalier and arbitrary, the Court concluded that it had failed in its duty of fair representation, allowed the application and referred Cécile Montigny's grievance against her dismissal to an arbitrator appointed by the Minister.

 

Superior Court (Arsenault J.)

 

    On a motion in evocation from the decision of judge Prud'homme, Arsenault J. concluded that the Labour Court made no [TRANSLATION] "patently unreasonable error" when it characterized the departure of the mis en cause as a dismissal rather than an abandonment within the meaning of s. 47.3 L.C.  The judge held that this was not a preliminary question but one of the Labour Court's very jurisdiction and refused to review the trial judge's conclusion.

 

    Arsenault J. rejected the argument that the "transaction" has the force of res judicata, and was of the view that the agreement concluded between the appellant and the union was not binding on Cécile Montigny.  On the contrary, he said, the purpose of ss. 47.2 et seq. L.C. was to create a mechanism for controlling the union's actions to ensure that the employee's grievance was carried through to its conclusion.  He wrote:

 

    [TRANSLATION] The civil law concept binds the parties to a transaction, in this case the employer and the union, but the provisions of ss. 47.2 et seq., which are privative in nature, to some extent exclude the mandate of the union in favour of the employee, which justifies the application of the said ss. 47.2 et seq.

 

                                                                          . . .

 

    The Court considers that the Labour Court did not have to be concerned with the legal effects of the agreement (R‑8) in order to exercise its jurisdiction and allow the remedy provided for in ss. 47.2 et seq.

 

    The Superior Court accordingly concluded that the Labour Court's decision was valid and dismissed the motion in evocation.

 

Court of Appeal (Bisson, LeBel and Lévesque (ad hoc) JJ.A.)

 

    Bisson J.A., for the Court of Appeal, classified the respective points at issue as preliminary, fundamental and subsidiary.

 

    He resolved the preliminary issue, concerning the way in which the termination of Cécile Montigny's employment should be characterized, by adopting in its entirety the reasoning of the Superior Court judge that this was not a pre‑jurisdictional question.  The trial judge's finding could therefore only be revised if it was patently unreasonable, which was not the case here.

 

    On the fundamental matter, the only one at issue in this Court, regarding the finality of the agreement reached between the union and the employer, which the appellant characterized as a transaction having the force of res judicata, the Court of Appeal distinguished Gendron v. Municipalité de la Baie-James, supra, and rejected the applicant's argument as follows (at p. 257):

 

    [TRANSLATION] This is adopting a very civilist approach in an area where the legislator intended to provide a remedy where an employee feels he has not been treated properly by his union.

 

    One of the purposes of the 1977 legislation was specifically that an employee should not be bound, as to a grievance involving him, by an agreement signed by the employer and the union without his concurrence.

 

    No parallel can be drawn between Gendron and the case at bar.

 

    In Gendron there was an arbitration that had been heard and disposed of by an impartial arbitrator.

 

    In a case where before the arbitration the union and the employer settle a grievance, no third party is required to intervene and arbitrate.

 

    I am of the view that agreement R‑8 cannot be invoked against the mis en cause.

 

    Finally, like the Labour Court and the Superior Court, the Court of Appeal summarily rejected the appellant's subsidiary argument that Cécile Montigny had discontinued her grievance and therefore dismissed the appeal.

 

Analysis

 

    The crux of the problem here, as I have already indicated, is to determine whether ss. 47.2 to 47.5 L.C. are applicable to the claim of the employee whose grievance was the subject of an agreement between the employer and the union, when the matter was before an arbitrator but there had not yet been any decision on the grievance.  According to the wording of s. 47.5 L.C., the essential prerequisite for the right to arbitrate the claim is a failure by the union to perform its duty of fair representation.  Only in cases where the court feels that the association has acted in bad faith or in an arbitrary or discriminatory manner, or has shown serious negligence, may it refer the claim to arbitration where there has been a dismissal or disciplinary sanction, as is the case here.  The union's conduct must thus first be examined in light of the criteria set out in the Labour Code, before we discuss the applicability of the mechanism for referring the matter to arbitration as such.

 

    I would note at the outset that the employee's claim referred to in ss. 47.4 to 47.6 L.C. is in fact his grievance against the employer.  In my opinion, by using the word "claim" instead of "grievance" the legislator meant to distinguish the situation where a union is proceeding with an employee's complaint as it wishes (the "grievance") from the situation where the employee has full control over his complaint (the "claim"), and can decide, among other things, whether or not to ask that it be referred to arbitration. However, this does not mean there is any distinction as to the substance of the complaint in these two situations (Gendron v. Municipalité de la Baie‑James, supra, at p. 409  (per Chouinard J.)).

 

1.  Duty of Fair Representation

 

(a)  Sources of the Duty of Fair Representation

 

    Even before the amendments to the Labour Code, including ss. 47.2 to 47.6, were introduced in 1977, an employee association had a duty of fair representation in respect of its members.  This duty emerged in the decisions of the U.S. Supreme Court in mid‑century, first in Steele v. Louisville & Nashville Railroad Co., 323 U.S. 192 (1944), and culminating in Vaca v. Sipes, 386 U.S. 171 (1967).  In these decisions, the Court set out the principle that an employee association's duty of fair representation is the necessary corollary of its right to exclusive representation of the employees comprised in the bargaining unit.  The admission of this theory into Canadian labour law was the subject of a more detailed review in Gendron v. Supply and Services Union of the Public Service Alliance of Canada, Local 50057, [1990] 1 S.C.R. 000, (appeal heard on the same day), and it is therefore unnecessary to repeat the analysis here.  Suffice it to say that the existence of such a duty imposed on unions was recognized and applied by Canadian courts before its codification, inter alia by this Court in Canadian Merchant Service Guild v. Gagnon, [1984] 1 S.C.R. 509.

 

(b) Codification in Labour Code

 

    The Quebec Labour Code brings together all or most of the principles and rules applicable to collective labour relations in Quebec, such as the formation and certification of unions, the principle of exclusive representation, the procedure for negotiating collective agreements, the settlement of grievances, and finally, available recourses to specialized administrative tribunals.  This Code is in fact an exhaustive document which, when it was adopted, replaced a heterogeneous collection of legislation and which has anchored the collective agreements containing most of the substantive rights of employees (see F. Morin, Rapports collectifs du travail (1982), at pp. 19‑26).

 

    In 1977 the Quebec legislator undertook a significant reorganization of collective labour relations, giving increased rights both to unions ‑- for example, prohibiting strikebreakers (ss. 109.1 et seq. L.C.) and introducing a system of compulsory check‑off of union dues by source deductions (s. 47 L.C.) -‑ and to employees individually -‑ for example, the right to see the union's financial statements (s. 47.1 L.C.) and the guarantee of employment for an employee who is not a member of the union when a closed shop clause comes into effect (s. 63(a) L.C.)  One of the major changes, which is of particular importance here, was the introduction of ss. 47.2 to 47.6 L.C., codifying the union's duty of fair representation and in return giving the employee a remedy in certain situations when this duty is breached.

 

    The duty of fair representation as codified in s. 47.2 L.C. does not differ greatly from that formulated by the courts prior to 1977.  In Gagnon, supra, Chouinard J. analyzed the duty of fair representation as it had developed at common law, and the duty as it was later codified in the Canada Labour Code, R.S.C. 1970, c. L‑1 (s. 136.1), the British Columbia Labour Code, R.S.B.C. 1979, c. 212 (s. 7(1)), the Ontario Labour Relations Act, R.S.O. 1980, c. 228 (s. 68) and finally s. 47.2 L.C. of Quebec.  He concluded that s. 47.2 L.C. is identical in content to what the courts and authors had developed before its codification in various Canadian statutes.  As Robert P. Gagnon wrote in his recent work (Droit du travail (1988), in Cours de la formation professionnelle du Barreau du Québec, 1988‑1989, vol. 6, at p. 104:

 

    [TRANSLATION] By adopting s. 47.2 of the Labour Code in 1977 the Quebec legislator finally, after several others had done so, codified the law resulting from court judgments regarding a certified union's legal duty of representation.

 

    In my opinion the scheme established by ss. 47.3 to 47.6 L.C. provides the method which the legislator felt was necessary to enforce a union's duty of fair representation, thereby ensuring a proper balance of reciprocal obligations and rights.  While the Canada Labour Relations Board enjoys some leeway regarding remedies when a union breaches its duty of fair representation (ss. 187 to 189 of the Canada Labour Code), the Quebec legislator has established a specific structure setting out the stages in any remedy based on such a breach.  The first stage consists of a complaint to the Minister of Labour, who then appoints an investigator to try to settle the dispute between employee and union by mutual agreement (s. 47.3 L.C.)  It should be noted that the legislator has limited the use of this procedure to cases of dismissal or disciplinary sanction, in other words the most serious interferences with an employee's rights.  In the second stage, if no agreement is reached within fifteen days of the investigator's appointment (a period increased to thirty days by S.Q. 1983, c. 22, s. 24), the employee may file an application with the Labour Court asking that his claim be referred to arbitration (s. 47.4 L.C.)  Finally, if on reviewing this application the Court finds that the union has acted in an arbitrary or discriminatory manner, been seriously negligent or acted in bad faith, the burden of proof of which is on the employee, it may authorize arbitration of the claim (s. 47.5 L.C.)  A finding that the duty of fair representation has been breached is thus the central feature of such a remedy.  Section 47.6 L.C. provides that in such a case an employer cannot invoke against the employee the failure to observe the time limits provided for in the collective agreement.

 

(c)  Fair Representation and Settlement of Grievances

 

    The duty of fair representation raises thorny problems when, as here, by its very function the union has an obligation to defend the interests of members of the bargaining unit as a whole, as well as those of an individual employee.  These interests can be and often are indeed divergent.

 

    In this connection I should say at the outset that a union's duty of fair representation does not cease in relation to a grievance proceeding once the grievance has gone to arbitration.  It may continue even after the arbitrator's final decision (for example, in Asselin v. Travailleurs amalgamés du vêtement et du textile, local 1838, [1985] T.T. 74, at p. 93, where the Labour Court concluded the union had a duty to evoke the arbitrator's erroneous decision), subject to Gendron v. Municipalité de la Baie‑James, supra, which held that in such a case the s. 47.5 L.C. procedure could not be applied.  As Gagnon, LeBel and Verge point out, this duty of fair representation, as a corollary of the exclusive right of representation, must inform all the union's action throughout (Robert P. Gagnon, Louis LeBel and Pierre Verge, Droit du travail (1987), at p. 311):

 

[TRANSLATION]  The duty of representation will end with the loss of certification.  Until that happens, the union will be held to it at all stages of the collective representation, both in negotiating the content of the collective agreement and in its implementation as it affects one or other of the employees.

 

    There is thus no question that at the stage the grievance was at in the case at bar, that is, set for hearing but not yet heard by the arbitrator, the union's duty of diligence still existed.

 

    In Gagnon, supra, this Court announced the general principles that should govern an employee association (or union) when it is acting as the representative of an employee in a grievance proceeding.  The case involved the Canada Labour Code (before the introduction of s. 136.1 expressly imposing a duty of fair representation on unions).  As we have seen, however, there is no difference between this duty and the one codified in s. 47.2 L.C.  Examining the rules applicable to the duty of fair representation, Chouinard J. wrote for the Court (at p. 527):

 

    The following principles, concerning a union's duty of representation in respect of a grievance, emerge from the case law and academic opinion consulted.

 

1.  The exclusive power conferred on a union to act as spokesman for the employees in a bargaining unit entails a corresponding obligation on the union to fairly represent all employees comprised in the unit.

 

2.  When, as is true here and is generally the case, the right to take a grievance to arbitration is reserved to the union, the employee does not have an absolute right to arbitration and the union enjoys considerable discretion.

 

3.  This discretion must be exercised in good faith, objectively and honestly, after a thorough study of the grievance and the case, taking into account the significance of the grievance and of its consequences for the employee on the one hand and the legitimate interests of the union on the other.

 

4.  The union's decision must not be arbitrary, capricious, discriminatory or wrongful.

 

5.  The representation by the union must be fair, genuine and not merely apparent, undertaken with integrity and competence, without serious or major negligence, and without hostility towards the employee.  [Emphasis added.]

 

    A union's duty of fair representation in the handling of a grievance may be divided into two distinct stages.  First, the union must carefully consider the merits of the grievance to decide whether it should be taken to arbitration.  At this stage, the existence of a conflict between the interests of the employee involved in the grievance and those of the employees in the bargaining unit as a whole would seem unlikely.  At the second stage, if the union decides that the grievance has merit, it must represent the employee without serious negligence, discrimination or bad faith at all subsequent stages of the grievance procedure.  The case at bar is at this second stage and it is here that conflicts between an employee and the bargaining unit represented by the union are most likely to occur.

 

    As Gagnon pointed out, even when the union is acting as a defender of an employee's rights (which in its estimation are valid), it must take into account the interests of the bargaining unit as a whole in exercising its discretion whether or not to proceed with a grievance.  The union has a discretion to weigh these divergent interests and adopt the solution which it feels is fairest.  However, this discretion is not unlimited.  Simply saying that the union has the right or power to "sacrifice" any grievance, which it feels is valid at that stage, during negotiations with the employer, in order to obtain a concession of better working conditions or other benefits for the bargaining unit as a whole, would be contrary to the union's duty of diligent representation of the employee in question.  On the other hand, completely rejecting the possibility that the union and the employer may settle a great many grievances in negotiations for a new collective agreement, or on other occasions, would be to ignore the reality of labour relations.  The Canada Labour Relations Board considered this point in Bachiu and United Steelworkers of America, Local 1005, [1976] 1 Can. L.R.B.R. 431, at p. 439:

 

    The complainant also submitted that the procedure adopted by the respondent was inherently arbitrary.  This was so because the grievance had been inserted into the negotiation process and because the complainant had not been apprised of the additional grounds upon which the company was relying.  We cannot accept this submission either.

 

    The bargaining unit in which the complainant works is very large by any standard.  Given grievance arbitration as we now know it, it is almost inevitable that in such a bargaining unit more grievances will arise during the life of the collective agreement than can be resolved before the contract expiration date.  . . . This reality is forcing parties to fashion dispute resolving alternatives to grievance arbitration in order to prevent the administration of an agreement from becoming bogged down in a quagmire of unresolved disputes.  . . . The Board cannot be oblivious to the very real pressures that have spawned this search for alternatives and we are of the opinion that neither procedure is inherently unfair or arbitrary.

 

    However, we want to state that there was no evidence that the complainant's grievance had been traded off against the unrelated grievances of other employees or had been exchanged for a promise that was of value to the entire bargaining unit.  And this being the case, the union's authority to "swap" individual grievances is not before us.  [Emphasis added.]

 

This passage clearly illustrates the necessity for a union to have some discretion in collective bargaining to "swap" grievances, even when they appear to be valid.

 

    Hence it is apparent that the negotiation and the administration of a collective agreement are two ongoing and closely related processes.  The difficulty of defining the boundary between the negotiation and the administration of a collective agreement should not however lead us to deny its existence.  As Professor A. W. Blumrosen noted with respect to U.S. law, similar in this regard to Canadian law, in "The Worker and Three Phases of Unionism:  Administrative and Judicial Control of the Worker‑Union Relationship" (1963), 61 Mich. L. Rev. 1435, at pp. 1475‑76:

 

    Obviously, the distinction is artificial.  Negotiation looks to the future, but may settle matters which have been raised in the past.  Administration deals with existing disputes, but may also establish a pattern for future settlements.  Both processes are part of a spectrum of methods of dispute settlement which ranges from formal contract negotiations, on the one hand, to informal grievance settlement, on the other.  The fact that all such activities are on a single continuum does not require similar legal treatment of individual rights all along the continuum.  [Emphasis added.]

 

    Clearly the expectations of employees in the course of negotiations, particularly for the renewal of a collective agreement in which the union and employer have complete latitude, and the expectations of an employee whose grievance is governed by the provisions of an applicable collective agreement cannot be viewed in the same way.  This distinction will necessarily impact on union discretion (id., at p. 1476).

 

    The exercise of this discretion by the union will also depend on the nature of the rights which the employee is seeking to enforce by his grievance.  There will be situations where the abandonment of an apparently valid grievance by the union will have such consequences for the employee in question that it will substantially restrain the union's discretion.  When, for example, the purpose of the grievance is to challenge a dismissal, the employee will not accept any half measures:  only reinstatement will be a suitable remedy.  Some have suggested that in such a case the union has no discretion and the employee's right to have his grievance arbitrated is absolute.  Professor P. Weiler, for example, commenting on the duty of fair representation, writes (Reconcilable Differences:  New Directions in Canadian Labour Law (1980), at p. 139):

 

I just think that there are limits to the sacrifice which can be made to individual rights in the pursuit of decent collective bargaining relationships, and that that limit is reached here.  What is distinctive about this situation is that the dismissed employee who is denied access to his day in arbitration will not share any of the future benefits of that spirit of union‑management cooperation.  He should not have to pay the price of sacrificing his chance to keep his job.

 

    This proposition was considered by this Court in Gagnon, supra, where Chouinard J. noted that the Canada Labour Relations Board had rejected such an approach (p. 521).  Gagnon itself appears to sanction a more flexible rule.  In "The Duty of Fair Representation:  A Theoretical Structure" (1973), 51 Tex. L. Rev. 1119, at pp. 1175‑76, Julia Clark proposes a compromise position recognizing the union's discretion to evaluate the merits of a dismissal grievance as well as the extreme repercussions dismissal poses for the employee.  However, given the harsh consequences of dismissal, "swapping" apparently valid grievances of this nature for a collective benefit is prohibited altogether:

 

    In addition, there is some support for giving unions less leeway in dealing with discharge grievances than in other matters.  The consequences of discharge ‑‑ loss of the employee's job as well as the pension and seniority benefits he may have built up over years of employment ‑‑ are drastic enough to impose stricter restraints on union discretion.  The concern for job security might warrant a rule that would prohibit swapping discharge grievances altogether.  [Emphasis added.]

 

    Accordingly, without necessarily accepting this statement in absolute terms, a union must recognize the importance of an employee's individual interest when exercising its discretion whether or not to proceed with a grievance against a dismissal or disciplinary sanctions.  Of course, it goes without saying that if the employee consents to the agreement reached between the union and the employer, the validity of such a "swap" would be viewed differently.

 

    It is against this background that the provisions of the Quebec Labour Code in this regard must be considered.  It should be noted at the outset that none of the provisions at issue are at variance with the general principles enunciated by the courts and doctrinal authorities.  On the contrary, I consider that the wording of ss. 47.2 et seq. L.C. is admirably consistent with the view that the union's discretion is limited when confronted with a choice between its duty of care toward an employee and that of representing the members of the bargaining unit.  Professor Jean-Denis Gagnon observes in this connection ("Le devoir de représentation des associations de salariés en droit canadien et québécois" (1981), 41 R. du B. 639, at p. 675):

 

    [TRANSLATION] The precarious position in which an employee may find himself after being laid off or dismissed, or when severe disciplinary action has been taken against him, was expressly recognized by the Quebec legislator in ss. 47.2 et seq., which deal with the duty of representation imposed on associations.  While recognizing that this duty is imposed on unions in all cases where they are acting as spokesmen or representatives of an employee group, the legislator has nevertheless created a specific remedy to ensure that this duty is observed, only in cases of "dismissals" or "disciplinary action".  In all other cases an employee who wishes to complain of his association's attitude and force it to act or change its attitude must use various general remedies contained in the Labour Code and other legislation.  [Emphasis added.]

 

    I agree.  The legislator has clearly indicated his preference here by specifying in s. 47.3 L.C. those extreme cases in which arbitration of a grievance may survive its abandonment by the union:  namely, cases of dismissal and disciplinary sanctions.  Collective labour relations are an area of socio‑economic law where the legislator is continually making adjustments in an attempt to achieve a desirable balance between union, employee and employer.

 

    This choice is consistent with the general recognition that it is important for an employee to retain his employment, in view of the potentially devastating effects on him.  Jean‑Denis Gagnon emphasizes this aspect in a passage preceding the one cited above (at p. 674):

 

    [TRANSLATION] It is difficult to deal with the duty of representation incumbent on the union in implementing the collective agreement without making distinctions between the various grievances that can be filed by employees as a consequence of decisions made by the management of a business or department . . .  For an employee whose employment comes to an end the challenge to the employer's decision is of considerable importance.  His immediate future, his well‑being and perhaps also that of his family are tied to his action and whether it succeeds.  [Emphasis added.]

 

    Professor Weiler is emphatically of the same opinion (op. cit., at p. 138):

 

    The real reason for singling out discharge grievances for a special legal limitation to the unions' authority is simply that discharge is different.  At several points on earlier pages, I have touched on the reasons why the protection against unjust dismissal is perhaps the critical job interest provided by the collective agreement.  Especially in the case of the long service employee, being fired as a result of an immediate contretemps with his employer can have a devastating impact on his life.  Not only is it difficult for older workers to find another job of any kind, but it is just about impossible to replace the benefits and amenities that are associated with lengthy seniority. [Emphasis added. Italics in original.]

 

    The Quebec legislator's choice to distinguish the rights of an employee facing dismissal from other less serious situations is thus in accordance with a consistent line of scholarly and judicial authority.

 

(d)Infringement of the Duty of Fair Representation in the Case at Bar

 

    This having been said, the question here is whether, applying these principles, the union has infringed its duty of fair representation, as defined in s. 47.2 L.C, with respect to Cécile Montigny.  It seems clear that the union disposed of her grievance without her consent, indeed without even telling her.  It is equally clear that the grievance was one regarding dismissal, and thus covered by s. 47.3 L.C.  The rest is a question of fact, which the Labour Court judge had jurisdiction to assess in his sovereign power as the trier of fact who saw and heard the witnesses.  As the Labour Court was acting within the boundaries of its jurisdiction and made no error in doing so, the Superior Court and Court of Appeal were right not to intervene, especially as the union admitted its lack of care.  I also share the view taken by the Labour Court, which found serious negligence on the part of the union and concluded that the latter had based its discretion ‑‑ a discretion which it undoubtedly had ‑‑ not on serious grounds, taking into consideration advantages beneficial to the employees as a whole, but rather on grounds completely unrelated to the facts of the grievance.  As this was a case where the nature of the grievance did not permit this approach, the union's duty of fair representation was thereby infringed.

 

2.  Availability of a s. 47.5 L.C. Remedy Where There is a Settlement

 

    This infringement by the union of its duty of fair representation however does not necessarily provide a basis for the remedy set out in ss. 47.3 et seq. L.C.  First, this remedy is not automatic since the Labour Court "may" order arbitration of the claim (s. 47.5 L.C.)  Second, unlike the duty of fair representation, which is general in nature, the employee's remedy is expressly limited to cases of dismissal or disciplinary sanctions which have not been the subject of an arbitral award on the merits (Gendron v. Municipalité de la Baie‑James, supra).  Finally, the claim must deal with a decision of the employer which can be the subject of a grievance arbitration under the collective agreement (Robert P. Gagnon, op. cit., at p. 110).  Are there other limitations on the availability of the s. 47.5 L.C. remedy, namely, as the appellant argued in the case at bar, when a settlement or "transaction" has been reached between the employer and the union?  Before answering this it will be necessary to review the situations where this remedy has been granted by the courts.

 

    I note in passing that as the question of a remedy for the employee against her union in the ordinary courts of law has not been raised here, I therefore will not discuss it.

 

(a) Section 47.5 L.C. Remedy

 

    Whenever a situation involved dismissal or a disciplinary sanction, s. 47.5 L.C. has been invoked to remedy an infringement of the duty of fair representation.  This invocation has occurred at various stages of the grievance settlement process, stages that may be classified as follows:

 

1.the employee has made a complaint but the union refuses to file a grievance;

 

2.the union has filed the grievance but withdraws it unilaterally;

 

3.the union filed a grievance but concluded an agreement with the employer by which it withdrew the grievance;

 

4.the union filed a grievance, which was dismissed by the arbitrator on a preliminary basis for a formal defect;

 

5.the union filed a grievance which was the subject of a decision, but provided the employee with inadequate representation in the arbitration.

 

    It should be noted that the Labour Code makes no distinction between these various stages of the grievance settlement process.

 

    To begin with, there appears to be no question that at the first stage the Labour Court has jurisdiction to order that a grievance the union has refused to take any further be referred to arbitration if it appears that the union's refusal resulted from an infringement of its duty of fair representation.  This jurisdiction emanates from the very wording of ss. 47.2 and 47.5 L.C.

 

    With regard to the second stage, where the grievance to be arbitrated is withdrawn by the union in violation of its duty of fair representation, this situation was considered by the Quebec Court of Appeal in Milhomme v. Aubé, [1984] C.A. 1.  In that case the union had submitted to arbitration an employee's grievance against his dismissal.  After numerous delays and a misunderstanding between the employee and the union, the latter decided unilaterally to withdraw the grievance, leading to its dismissal.  Bisson J.A. wrote, Nolan and Vallerand JJ.A. concurring (at pp. 5‑6):

 

    [TRANSLATION] In closing, I wish to point out that the Court definitely could not accept respondent S.E.C.S.N.'s argument that ss. 47.2 to 47.6 of the Labour Code no longer apply once the arbitration process has begun.

 

    Apart from the fact that the legislator has made no distinction, it must be noted that one of the situations necessarily contemplated by s. 47.2 is for arbitration for "dismissal or disciplinary sanction" to be underway when the employee decides to file a complaint that his association has failed in its duty under s. 47.2.  [Emphasis added.]

 

    The Court of Appeal concluded that the Labour Court had complete jurisdiction to order arbitration in such a situation.

 

    I shall deliberately pass over the third stage, which is the one at issue in this appeal, and return to it later.

 

    The fourth stage has also been the subject of a decision by the Quebec Court of Appeal in Collège d'enseignement général et professionnel de  Dawson v. Baena (1987), 7 Q.A.C. 153, where the union had failed to sign the grievance before submitting it to arbitration.  The arbitration tribunal dismissed the grievance without examining its merits on the ground that it had not been validly brought before the tribunal.  Noting that the Labour Court had complete jurisdiction to order arbitration, I wrote in that case (at p. 156):

 

[TRANSLATION]  . . . while it is true that the arbitrators had to make a ruling, they did so simply to say that there were no parties before them competent to proceed to arbitration.

 

    In my opinion, it cannot be said that this was an arbitration.  The grievance was not considered and not disposed of either on a preliminary basis or on the merits.  Neither did the tribunal refuse to hear the grievance.  It simply said that there was no grievance legally before the arbitrators.

 

    The Court of Appeal accordingly dismissed the motion in evocation against the decision of the Labour Court to order arbitration of the claim under s. 47.5 L.C.

 

    Finally, in Gendron v. Municipalité de la Baie‑James, supra, the Supreme Court considered the scope of the Labour Court's jurisdiction at the fifth stage of the arbitration process, after a decision had been rendered on the merits.  In that case the employee had brought an action under ss. 47.3 et seq. L.C. on the ground that the union had made an incorrect admission at the hearing of a dismissal grievance.  The arbitrator had dismissed the grievance, finding it untenable, because of this admission, which later in fact proved to be mistaken.  The employee's subsequent application under s. 47.5 L.C. was allowed by the Labour Court, which ordered arbitration of the claim.  The employer filed a motion in evocation with respect to this decision of the Labour Court, which was dismissed by the Superior Court but allowed by a majority of the Court of Appeal.  This Court, per Chouinard J., affirmed the Court of Appeal's judgment and quashed the referral of the employee's claim to arbitration (at pp. 407‑8):

 

    In my view the Labour Court did not have the power to refer a case to arbitration in such a situation, when it had already been arbitrated and the grievance disposed of.

 

    It is manifest that s. 47.5 applies when there has been no arbitration because the association refused to take the grievance that far.

 

                                                                          . . .

 

    When there has been no arbitration s. 47.5 is readily understandable and ss. 47.2 to 47.6 can be reconciled with each other and with the other provisions in the Code.

 

    This power is part of the general scheme of the Code which is that every grievance shall be submitted to arbitration (s. 100).  It favours access to arbitration.

 

    The Court noted that referral to arbitration once the arbitrator has already ruled on the grievance would be inconsistent with s. 101 L.C., which dictates that an arbitrator's decision is final, without appeal and binding on the parties, including the employee concerned.  Allowing a second arbitration would amount to creating an exception to this section, an exception not provided for in the legislation.  In this regard the Court distinguished the facts of this case from those in Milhomme v. Aubé, supra, where there had not been a decision by an arbitrator (at p. 412):

 

However, that case [Milhomme] was quite different from the case at bar.  The arbitration had begun, but the association had withdrawn the grievance before the arbitration was complete.

 

                                                                          . . .

 

    There is no inconsistency between the judgment of the Court of Appeal in the case at bar and Milhomme, where there was no arbitration.  That case does not apply.

 

    The Court accordingly concluded that ss. 47.2 to 47.6 L.C. cannot be construed so as to authorize arbitration of a grievance which has already been arbitrated.

 

(b)  Section 47.5 L.C. and the Grievance Settled

 

    From this brief overview of four of the stages at which the provisions of ss. 47.3 et seq. L.C. have been relied on it appears that the common denominator for determining the scope of the Labour Court's jurisdiction to order arbitration of a claim is whether or not a decision has been made by the arbitrator on the merits of the case.  Clearly there was no such decision by the arbitrator at the third stage of the grievance arbitration procedure, which is where the matter stands in the case at bar.  The arbitration process was interrupted by the conclusion of an agreement between the union and the employer before the grievance was heard.  The appellant submits, however, that this agreement can be likened to a transaction under ordinary law, and so has the force of res judicata between the parties (art. 1920 C.C.L.C.), since it can be filed with the arbitrator under s. 100.3 L.C.:

 

    1920.  Transaction has between the parties to it the authority of a final judgment (res judicata).

 

100.3.  [Award:  settlement or discontinuance] If the arbitrator is notified in writing of the total or partial settlement or of the discontinuance of a grievance of which he has been seized, he shall commit it to writing and file his award in accordance with section 101.6.

 

    The appellant argues that as s. 101.6 L.C. provides for the filing of the arbitrator's decision with the office of the labour commissioner‑general, the agreement concluded between the union and the employer must be treated like a final decision made by an arbitrator, thereby depriving the Labour Court of any jurisdiction to order further arbitration.

 

    This argument cannot succeed.  First, the filing contemplated by ss. 100.3 and 101.6 L.C. has a purely procedural purpose.  It is intended to technically terminate the dispute between the employer and the union as well as to inform the arbitrator of the existence of the agreement.  Since the matter is only before him so long as there is a grievance, it is even possible that he may be called on to decide the scope of the agreement or how it is to be implemented (F. Morin and R. Blouin, Arbitrage des griefs (1986), at pp. 223‑24, par. V.13).  It is also necessary to place the rule established in Gendron v. Municipalité de la Baie‑James, supra, prohibiting a second arbitration, in the context of the philosophy underlying it.  The decision‑making process of arbitration, that is the making of a decision on the merits by an impartial third party, must be respected regardless of whether it is right or wrong.  This is a degree of respect and confidence not necessarily commanded by a simple agreement between an employer and the union.  Attempting to liken an agreement between a union and an employer to an arbitrator's decision on the merits amounts to ignoring this fundamental difference.  Recourse to the impartiality of an arbitrator seems to me to be essential in the distinction between the various stages at which arbitration can be ordered; i.e. whenever there has been an infringement of the duty of fair representation and if the employee has been the subject of a dismissal or disciplinary sanctions.  I can only concur with Bisson J.A. that giving this type of agreement the same force as a civil transaction would be [TRANSLATION] "adopting a very civilist approach" in the specialized field of labour law.  Moreover, a civil law transaction can only be set up against the parties to the dispute (art. 1920 C.C.L.C.), whereas here the employee was not a party to the agreement between the union and the employer.  Finally, I would note that under the wording of s. 100.3 L.C., simple discontinuance of a grievance by the union is also subject to the same filing procedure, and that the Court of Appeal, in my opinion correctly, has recognized that the s. 47.5 remedy would be available in such a case (Milhomme v. Aubé, supra), thus denying this procedure the meaning which the appellant would like it to have.

 

    In the same vein, the appellant argues that allowing recourse to the procedure in ss. 47.3 et seq. L.C. in such cases would have the unacceptable consequence of casting doubt on, and even overturning, both any agreement that might be concluded between a union and an employer at the expense of the employer's rights, and the stability of collective labour relations in Quebec generally.  An employer could no longer assume that agreements made with a union were final.

 

    I myself regard such apprehension as greatly exaggerated, in view, inter alia, of the limited number of cases covered by the legislation, cases of dismissal or disciplinary sanctions in which the union has failed in its duty of fair representation.  However, such concerns cannot be ignored as they reflect a fear that the delicate balance existing in collective labour relations will be upset.  I adopt here the description of the situation given in another context by McIntyre J. in Reference Re Public Service Employee Relations Act (Alta.), [1987] 1 S.C.R. 313, at p. 414:

 

Labour law, as we have seen, is a fundamentally important as well as an extremely sensitive subject.  It is based upon a political and economic compromise between organized labour ‑‑ a very powerful socio‑economic force ‑‑ on the one hand, and the employers of labour ‑‑ an equally powerful socio‑economic force ‑‑ on the other.  The balance between the two forces is delicate and the public‑at‑large depends for its security and welfare upon the maintenance of that balance.  One group concedes certain interests in exchange for concessions from the other.  There is clearly no correct balance which may be struck giving permanent satisfaction to the two groups, as well as securing the public interest.  The whole process is inherently dynamic and unstable.  [Emphasis added.]

 

    The union's credibility as a valid and exclusive spokesman for the employees included in the bargaining unit continues to be one of the essential elements of this process.  However, it must be recognized that the legislator is fully competent to adjust the balance between employee rights and union monopoly on representation as against the rights of the employer within the framework of collective labour relations, so as to make them as harmonious as possible.  This is the interpretation which has been given to the 1977 amendments to the Labour Code (Colette Matteau, "La liberté syndicale:  droits collectifs et droits individuels ‑‑ commentaires", in R. Blouin et autres (ed.), Le Code du travail du Québec, 15 ans après . . . (1979), at p. 91):

 

    [TRANSLATION] Accordingly the adoption of ss. 38b et seq. [now 47.2 et seq.] with their limits and s. 88e [100.5] giving the employee concerned the right to an arbitration hearing seems to me to adequately reconcile the need to give the union the final decision‑making power over implementation of the agreement and the need to control certain union decisions that have a major impact on the employee's personal interests.

 

    Further, as Professor Blumrosen points out, op. cit., the protagonists in this area have to demonstrate flexibility in view of this ever‑shifting equilibrium (at p. 1494):

 

There is no evidence that the collective bargaining process would grind to a halt if individual employees were allowed legal protection for their critical job interests.  The possibility of legal protection might make union and management officials more cautious in disposing of employee claims, but this would not mean the ruination of collective bargaining.  It is as reasonable to assume that union and management would learn to accommodate to a rule which prohibited them from informally waiving employee rights in connection with discharge and seniority claims.  The history of collective bargaining demonstrates the basic flexibility of union and management.  [Emphasis added.]

 

    Accepting the appellant's arguments in this regard would ignore the legislative intention, indicated here by the adoption of ss. 47.2 to 47.6 L.C., to adapt labour relations to the ever‑changing power struggle in this area.

 

    The legislator's decision that the right of employees to retain their employment should be given preference is a conclusion which fits in with the general framework of Labour Code provisions, in which the legislator is constantly seeking to provide protection for employee rights.  This does not mean serious hardship for the employer.  First, as regards the referral to arbitration of a grievance settled with the union, it will be in a position comparable to that following a unilateral discontinuance by the union (Milhomme v. Aubé, supra) or a preliminary dismissal of the grievance (Collège d'enseignement général et professionnel de Dawson v. Baena, supra).  In the latter case, it was similarly "entitled" to expect that the grievance would be terminated but the courts have nevertheless recognized the possibility of recourse to ss. 47.3 et seq. L.C.  Second, as regards the quid pro quo for the agreement to settle the grievance, if any, the latter may be the subject either of an eventual action by the employer against the union, or of an order by the Labour Court under the second paragraph of s. 47.5 L.C., but we do not have to decide that point here.  Section 47.6 L.C. also creates an exception in favour of the employee by preventing the employer from relying on non‑compliance with time limits.  Finally, the Labour Code expressly limits the finality of an agreement in s. 100.0.2:

 

100.0.2.  [Referral of grievance] Where the parties have settled a grievance before it has been referred to arbitration and one of the parties refuses to give effect to the settlement reached, the other party may refer the grievance to arbitration notwithstanding any agreement to the contrary and notwithstanding the expiry of the periods provided for in sections 71 and 100.0.1 or in the collective agreement.

 

    Although this provision is not directly applicable to the case at bar, it makes it clear that a settlement in collective labour relations is not of the same nature as a transaction in civil law, and it would be futile to try to treat them in a like manner.

 

    It was stressed at the hearing that this interpretation risks conferring impunity on a union which breaks the law and incurs no penalty for doing so.  Louise Mailhot (now a member of the Quebec Court of Appeal) took such a position ("La liberté syndicale:  droits collectifs et droits individuels ‑‑ commentaires", in Le Code du travail, 15 ans après . . ., at p. 84):

 

    [TRANSLATION]  That is not all, however:  this beginning, though small, is made at the expense of the employer.  It seems inconceivable that the employer should be the one who in the final analysis pays for the fault or negligence of the union.

 

    She then referred to the fact that, in the event of reinstatement, it is the employer who would pay the salary arrears.  Against this argument, however, there is the second paragraph of s. 47.5 L.C., which allows the Court to order the union to pay costs and other non‑pecuniary penalties that may result.  A civil action for damages by the employer against the union may also exist.  However, the Court does not have to decide these issues in the case at bar.  I would further note that the employer will only be prejudiced if it has unlawfully dismissed the employee and has not admitted the validity of the grievance from the outset.

 

    The conclusion I have reached seems to me to be consistent with the legislator's desire to make both employer and union responsible to employees and to ensure that the rights of the latter will not be sacrificed with impunity, without both the union and the employer bearing the consequences.  That is only fair.

 

    The Labour Court's ancillary power to ignore in whole or in part the agreement concluded between the union and the employer by ordering arbitration is based on the second paragraph of s. 47.5 L.C., which gives it the power to "make any other order it considers necessary in the circumstances".  I would note in closing that the only effect of ss. 47.2 to 47.6 L.C. coming into force in 1977 was to confirm a jurisdiction which the ordinary courts already possessed.  Even before the introduction of this statutory remedy, it was possible to set aside an agreement between a union and an employer whereby the grievance submitted to arbitration was settled in contravention of the union's duty of fair representation (Syndicat des agents de la paix de la Fonction publique v. Richer, [1983] C.A. 167).

 

    It follows from this analysis that the Labour Court's power to refer to arbitration a grievance already settled between the employer and the union in contravention of s. 47.2 L.C. is firmly based not only on the wording of ss. 47.2 to 47.6 L.C., but also on the provisions of the Labour Code as a whole, and is consistent with current judicial and scholarly opinion in labour relations in North America.

 

Conclusion

 

    In conclusion, I am of the view that the Labour Court did not in this case [TRANSLATION] "make an error going to jurisdiction", according to the criteria laid down by the courts, and that both the Superior Court and the Court of Appeal properly refused to exercise their superintending and reforming power.

 

    Accordingly, for all these reasons I would dismiss the appeal with costs throughout.

 

    Appeal dismissed with costs.

 

    Solicitors for the appellant:  Robert, Dansereau, Barre, Marchessault & Lauzon, Montréal.

 

    Solicitors for the respondents and the mis en cause Fréchette:  Bernard, Roy & Associés, Montréal.

 

    Solicitors for the mis en cause Montigny:  Brière, Gonneville, Montréal.

 

    Solicitors for the mis en cause Syndicat national des employés de l'Hôpital Régina (C.S.N.):  Sauvé, Ménard & Associés, Montréal.