Appellant claimed damages from respondent for the
losses flowing from the virtual shutdown of its plant when its mill employees
walked out in sympathy with a legal strike by its office employees,
notwithstanding the fact that the mill unit was bound by a collective agreement
banning strikes and lock‑outs. The claim was based on the fact that the
walkout had violated both the collective agreement and the Industrial
Relations Act. Prior to trial, the trial judge raised the preliminary
question of whether the court had jurisdiction to hear a claim arising out of a
collective agreement, given the comprehensive provision in the Industrial
Relations Act for the submission to arbitration of all differences between
parties to a collective agreement. That question was answered in the negative
at trial and the conclusion upheld on appeal.
Held: The appeal should
be dismissed.
The grievance and arbitration procedures provided
for in labour relations statutes generally provide the exclusive recourse open
to parties to a collective agreement for its enforcement. This is true whether
or not the questions in issue might have arisen under the common law of master
and servant in the absence of a collective bargaining regime, if the collective
agreement binding the parties provides for the matters in issue. It is also
true whether or not the meaning or application of a collective agreement's
terms are disputed.
Judicial deference to the arbitration process is
present whether the board in question is a statutory tribunal or a private
tribunal not created by statute. This deference springs from the idea that,
were the courts available as an alternative forum, violence would be done to a
comprehensive statutory scheme designed to govern all aspects of the
relationship of the parties in a labour dispute setting.
The power of the court to enjoin illegal strike
activity, nevertheless, is not diminished where the grievance and arbitration
process can provide no adequate remedy in the circumstances. This power is not
to enforce collective agreements per se but to enforce the general law
embodied in the statute, including an express prohibition on strikes during the
currency of a collective agreement and provision for binding and enforceable
arbitration. While an injunction might incidentally enforce rights and
obligations under a collective agreement, these incidental effects are not sufficient
to deny an injunction to prevent immediate harm arising out of a clearly
illegal act where no alternative remedy exists.
The equitable jurisdiction to award damages in
substitution for or in addition to an injunction cannot provide the basis for the
relief sought here. The damages sought were not in substitution for an
injunction because an injunction had been issued. The failure of the injunction
to operate was corrected by contempt orders ‑‑ the proper means of
enforcing an injunction. Civil damages are not part of the weaponry of the
court in ensuring compliance.
Section 91 of the Industrial Relations Act
did not establish a cause of action for damages. It is simply one of a series
of restrictive provisions forming part of a complex structure governing labour
relations. Burdening that structure with collateral actions for damages is
hostile to the purpose and philosophy of such legislation. Damages, where they
are appropriate compensation for action in breach of both the legislation and
the collective agreement, are properly available in an arbitration based on the
terms of the collective agreement, and not in a court action based on the terms
of the statute.
Cases cited
International Brotherhood of Electrical Engineers,
Local Union 2085 v. Winnipeg Builders’ Exchange,
[1967] S.C.R. 628; Winnipeg Teachers’ Association v. Winnipeg School
Division No. 1, [1976] 2 S.C.R. 695; McGavin Toastmaster Ltd. v.
Ainscough, [1976] 1 S.C.R. 718; General Motors of Canada Ltd. v. Brunet,
[1977] 2 S.C.R. 537, considered; Shell Canada Ltd. v. United Oil Workers of
Canada, [1980] 2 S.C.R. 181; Hamilton Street Railway Co. v. Northcott,
[1967] S.C.R. 3; Woods v. Miramichi Hospital (1966), 59 D.L.R. (2d) 290;
Logan v. Board of School Trustees District No. 14 (1973), 40 D.L.R. (3d)
152; Foisy v. Bell Canada (1984), 18 D.L.R. (4th) 222, [1984] C.S. 1164;
Shank v. The KVP Co., [1966] 2 O.R. 847; Close v. Globe & Mail Ltd.
(1966), 60 D.L.R. (2d) 105; Acadia Pulp and Paper Ltd. v. International
Brotherhood of Pulp, Sulphite and Paper Mill Workers (1970), 15 D.L.R. (3d)
227; Ford v. Trustees of the Ottawa Civic Hospital, [1973] 3 O.R. 437; Binder
v. Halifax County Municipal School Board (1978), 84 D.L.R. (3d) 494; Bergeron
v. Kingsway Transports Ltd. (1979), 23 O.R. (2d) 332; Campbell v. East‑West
Packers (1969) Ltd. (1982), 142 D.L.R. (3d) 90; Lawn v. Algonquin
College of Applied Arts and Technology (1982), 39 O.R. (2d) 377; Hooper
v. Wellington County Board of Education (1984), 46 O.R. (2d) 680; Bourne
v. Otis Elevator Co. (1984), 45 O.R. (2d) 321; Caines v. Cape Breton
Development Corp. (1973), 39 D.L.R. (3d) 606; Downey v. Scotia Square
Hotel Ltd. (1974), 55 D.L.R. (3d) 300; Drogt v. Robson‑Lang
Leathers Ltd., [1971] 3 O.R. 488; Perini Pacific Ltd. v. International
Union of Operating Engineers, Local 115 (1961), 28 D.L.R. (2d) 727; Roberval
Express Ltée v. Transport Drivers, Warehousemen and General Workers Union,
Local 106, [1982] 2 S.C.R. 888; Howe Sound Co. v. International Union of
Mine, Mill and Smelter Workers (Canada), Local 663, [1962] S.C.R. 318; International
Longshoremen’s Association, Locals 273, 1039, 1764 v. Maritime Employers’
Association, [1979] 1 S.C.R. 120; British Columbia Maritime Employers
Assn. v. International Longshoremen’s and Warehousemen’s Union‑‑Canadian
Area, [1972] 5 W.W.R. 738; Saint John Shipbuilding and Dry Dock Co. v.
Industrial Union of Marine and Shipbuilding Workers, Local 3 (1979), 26 N.B.R.
(2d) 179; New Brunswick Electric Power Commission v. International
Brotherhood of Electrical Workers, Local 1733 (1978), 22 N.B.R. (2d) 364; Re
International Nickel Co. of Canada and Rivando, [1956] O.R. 379; Barraclough
v. Brown, [1897] A.C. 615; Young v. Canadian Northern Ry. Co.,
[1931] A.C. 83; Textile Workers v. Lincoln Mills of Alabama, 353 U.S.
448 (1957); Steelworkers v. American Mfg. Co., 363 U.S. 564 (1960); Transport
Labour Relations v. General Truck Drivers & Helpers Union, Local No. 31
(1974), 54 D.L.R. (3d) 457, referred to.
Statutes and Regulations Cited
Canada Labour Code, R.S.C. 1970, c. L‑1.
Chancery Amendment Act (Lord Cairns' Act), 21 & 22 Vict., c. 27.
Courts of Justice Act,
1984, 1984 (Ont.), c. 11, s. 115.
Industrial Relations Act, R.S.N.B. 1973, c. I‑4, ss. 53(1), 55(1), (2), 56(2), 91(1),
102(3), 109(4), 111(1).
Judicature Act, R.S.N.B. 1973, c. J‑2.
Labour Relations Act, R.S.N.B. 1952, c. 124, s. 18(3).
Labour Relations Act, R.S.O. 1980, c. 228.
Rights of Labour Act, R.S.O. 1980, c. 456, s. 3(3).
Trade‑unions Act, R.S.B.C. 1960, c. 384, s. 4.
Authors Cited
Adams, George W. Canadian
Labour Law, Aurora, Ont., Law Book Inc., 1985.
De Smith, S. A. De
Smith’s Judicial Review of Administrative Action, 4th ed. by J. M. Evans,
London, Stevens & Sons, 1980.
APPEAL from a judgment of the New Brunswick Court of
Appeal (1982), 142 D.L.R. (3d) 678, 44 N.B.R. (2d) 10, 116 A.P.R. 10, 82 CLLC
¶14, 216, dismissing an appeal from a judgment of Higgins J. declining
jurisdiction. Appeal dismissed.
J. Gordon Petrie, Q.C.,
and Donald E. MacPherson, for the appellant.
Brian Neill
and Robert Breen, for the respondent.
The judgment of the Court was delivered by
1. Estey
J.‑‑This case raises for the first time in this Court the
question whether a court of otherwise competent jurisdiction is authorized to
receive a claim by an employer for damages against a trade union, the
bargaining agent for its employees, by reason of a strike which was allegedly,
and on the record before this Court, apparently, illegal under the applicable
labour relations statute, and which was at the same time a breach of a
collective agreement to which the employer and the trade union are parties. In
earlier proceedings, the details of which are not disclosed in the record in
this appeal, the employer obtained an interlocutory injunction enjoining the
continuance of a strike by this group of employees. Apparently the claim for
damages, the issue now before the Court, arose in the same proceedings,
although there is no mention of a claim for injunction in the prayer for relief
in the statement of claim issued some months after the interlocutory
injunction.
2. The issue in this appeal was expressly
left open by this Court in Shell Canada Ltd. v. United Oil Workers of Canada,
[1980] 2 S.C.R. 181, per Chouinard J., at p. 189. There are numerous
instances where the courts have issued injunctions in such circumstances, and
the jurisdiction to do so was settled in International Brotherhood of
Electrical Engineers, Local Union 2085 v. Winnipeg Builders’ Exchange,
[1967] S.C.R. 628. The courts have also awarded damages in similar
circumstances (i.e., Winnipeg Teachers’ Association v. Winnipeg
School Division No. 1, [1976] 2 S.C.R. 695) but in those cases the issue of
the jurisdiction of the court to do so was not challenged by the parties.
3. The respondent is a trade union
certified to represent the workers at the appellant's pulp and paper mill
situated in the town of Nackawic, New Brunswick. There are three bargaining
units, two of which concern us here, the mill unit and the office unit. On May
29, 1981, their collective agreement having expired, the office unit workers
commenced a legal strike and set up picket lines at entrances to the mill. The
mill unit workers, whose collective agreement was still in force, withdrew
their services in sympathy on the same day. The appellant commenced the present
action in the Court of Queen's Bench on June 1, 1981, and obtained an
interlocutory injunction on June 3, 1981. The claim for damages is found in the
statement of claim issued on September 21, 1981 and relates to compensation
sought for the considerable daily losses resulting from what was effectively a
plant shut‑down caused by the mill workers' strike. Although the
interlocutory injunction was issued on June 3, 1981, the mill unit workers did
not return to work until June 7, the Court having on June 6 made a contempt
order against the respondent and three of its officers. The mill workers again
withdrew their labour on June 22, 1981. A second contempt order was made on
June 27, but the mill workers did not return to work until July 3, 1981, when a
new collective agreement was signed by the office workers. The court imposed on
the respondent fines of $15,000 and $25,000 on the successive findings of
contempt. There was no issue raised as to the jurisdiction of the court on
return of the interlocutory motion for injunction or at the time of the
contempt proceedings.
4. In its pleadings, the appellant based
its claim on the following ground:
The said unlawful strike
referred to in paragraph 6, was in breach of the Collective Agreement between
the Plaintiff and the Defendant and in violation of the Industrial Relations
Act.
The collective agreement referred to was the one between the mill unit
and the appellant. It had an expiry date of July 31, 1982, and provided that,
"There shall be no strike, lockout, stoppage, slowdown or restriction of
output during the life of this Agreement." The relevant sections of the Industrial
Relations Act, R.S.N.B. 1973, c. I‑4, as amended, are as follows:
53(1) Every collective agreement shall provide that there shall be no
strikes or lock‑outs so long as the agreement continues to operate.
91(1) Where a collective agreement is in operation, no employee bound by
the agreement shall strike and no employer bound by the agreement shall lock‑out
such an employee except as permitted in subsection (3) [which is not relevant
to the present case].
The Act further provides, however, and this is what led to the trial
judge's reservation of the question of the court's jurisdiction as a
preliminary matter, that:
55(1) Every collective agreement shall provide for the final and binding
settlement by arbitration or otherwise, without stoppage of work, of all
differences between the parties to, or persons bound by, the agreement or on
whose behalf it was entered into, concerning its interpretation, application,
administration or an alleged violation of the agreement, including any question
as to whether a matter is arbitrable.
Where a collective agreement does not so provide, a very comprehensive
arbitration clause is, by s. 55(2), deemed to be a provision of the agreement.
The collective agreement between the appellant and respondent in this case did
provide for arbitration. Clause 8 provided a procedure to be followed in the
"Adjustment of Complaints" which culminated in the appointment of a
three member arbitration board whose decision would be "final and binding
upon both parties to the Agreement". The clause further provided,
It is understood that the
function of the Arbitration Board shall be to interpret and apply the
provisions of this Agreement....
To the extent that the clause may not require that all
differences between the parties concerning the matters mentioned in s. 55(1) of
the Act would be subject to binding settlement through arbitration, the
provisions of the statute in s. 55(2) would in any case require all such
differences to be settled by arbitration without stoppage of work.
5. The preliminary question raised by the
trial judge prior to trial, put simply, is whether, given the comprehensive
provision for the submission to arbitration of all differences between the
parties to a collective agreement, the court has any jurisdiction to hear a
claim arising out of that agreement. This question was answered in the negative
at trial, and the trial judge's conclusion was affirmed on appeal, per
La Forest J.A., then a member of the New Brunswick Court of Appeal.
6. La Forest J.A. considered several
alternative bases for the appellant's action. He concluded that in so far as
the damage claim was based on a breach of the collective agreement, no action
in the courts for damages at common law was available. Secondly, he considered
the availability of a cause of action based on the provisions of the Industrial
Relations Act. It was decided that the courts are given no jurisdiction by
this Act to deal with the settlement of differences arising under collective
agreements. Furthermore, no action lay for the breach of s. 91(1) of the Act.
The legislation provided adequate sanctions, both civil (through arbitration)
and penal (see s. 109(4)) for breach of statutory duties. In the circumstances,
there was no room to assume that the legislature intended the parties to a
collective agreement to have in addition recourse to the civil courts. Finally,
La Forest J.A. rejected the contention that damages could be sought
in this case by invoking the tort of conspiracy.
7. An early consideration of the relative
jurisdictions of court and arbitration board to entertain claims for breach of
a collective agreement is found in McGavin Toastmaster Ltd. v. Ainscough,
[1976] 1 S.C.R. 718, where the employees claimed severance pay under their
collective agreement after their employer had closed the plant during an
illegal strike. Laskin C.J., writing for the majority, raised the issue of the
Court's jurisdiction to hear a claim based on interpretation of a collective
agreement which provided for grievance procedures and binding arbitration of
such issues. He wrote at p. 721 that:
There was no contention in
defence that the appropriate proceedings should have been by way of arbitration
under the collective agreement, and it does not appear that any such position
was taken either before the trial judge or in the British Columbia Court of
Appeal. This Court refrained therefore in this case from taking any position on
this question and is content to deal with the legal issue or issues as having
been properly submitted to the Courts for adjudication.
The same approach was taken in the Winnipeg Teachers’ Association
case, supra, per Martland J. at p. 718. The majority of the Court
in that case acknowledged as well founded an employer's claim for damages
arising out of the employees' "work to rule" under the collective
agreement. Laskin C.J., however, writing in dissent, took the position that if
the parties had raised the issue, he would have allowed the appeal solely on the
basis that (pp. 706‑07):
...the machinery for
determining contract disputes as prescribed by the collective agreement is not
only better suited than resort to the Court, but ought to have been resorted to
here for resolving what emerged as a difference about the nature or scope of
the contractual obligation of the appellant's members and of the appellant
itself.
...
Article 11 of the
agreement establishes both adjustment and arbitration machinery to resolve
differences as to the interpretation or application of the provisions of the
agreement. Arbitration...is the resort specified when there is "any
difference between the parties to, or persons bound by the agreement or on
whose behalf it was entered into, concerning its content, meaning application
or violation". In fine, what the parties brought before the Court in this
case was a matter which should have been submitted in the first place to
adjustment and, if not adjusted, to arbitration under art. 11. Their consent or
choice to go to the Courts cannot of itself command the Courts' intercession by
way of original adjudication.
8. The later case of General Motors of
Canada Ltd. v. Brunet, [1977] 2 S.C.R. 537, involved an employee's claim
that, under a collective agreement between his union and his employer, he was
entitled to have been offered a less strenuous job after an accident. The union
had decided not to take his grievance to arbitration. This Court held it had no
jurisdiction to entertain the plaintiff's claim. Pigeon J. wrote at p. 542:
To admit of a right to go
to the Superior Court instead of having recourse to arbitration whenever a sum
of money is claimed under a collective agreement would make totally ineffective
the provision of s. 88 of the [Quebec] Labour Code, which reads as
follows...:
88.
Every grievance shall be submitted to arbitration in the manner provided in the
collective agreement if it so provides....
9. The Quebec statute considered in Brunet
enabled the employer and the bargaining agent to establish rights for the
benefit of employees which could only be realized by the procedure specified in
the collective agreement. It is apparent from other passages in the judgment
that the foundation for Pigeon J.'s decision was the idea that the rights
asserted by the employee could not, under terms of the collective agreement in
which they originated, have been asserted by him in a court in any case.
Carriage of grievances was conferred by the collective agreement exclusively on
the union (see pp. 548‑49). Similarly, s. 56(2) of the New Brunswick
statute provides that a collective agreement is binding upon the parties
thereto and the employees in the bargaining unit, but does not provide an
affirmative right of status to grieve to the bound employees. Brunet is
not, therefore, a case on all fours with the present appeal, where a party
otherwise having standing to assert a right is said to have chosen an
inappropriate forum in which to assert it.
10. There are a significant number of
decisions doubting the jurisdiction of the courts to hear claims based on the
interpretation or application of collective agreements containing provision for
binding arbitration. The earlier cases seemed to establish two exceptions to
this principle. First, the courts have been held in a number of cases to have
jurisdiction in a case where, although the claim depends entirely upon a right
created by the terms of a collective agreement, the court is not required, in
enforcing the right, to interpret the agreement. An example is Hamilton
Street Railway Co. v. Northcott, [1967] S.C.R. 3, in which a prior arbitration
had established the right of a group of employees to unpaid wages, but had not
settled the amounts owing to each member of the group. The latter issue was
held to be within the Court's jurisdiction.
11. The second exception consists of cases
where the claim can be characterized as arising solely under the common law,
and not under the collective agreement. An example is Woods v. Miramichi
Hospital (1966), 59 D.L.R. (2d) 290 (N.B.C.A.), a case involving a claim by
an employee, a member of a bargaining unit, for damages for wrongful dismissal:
see also Logan v. Board of School Trustees District No. 14 (1973), 40
D.L.R. (3d) 152 (N.B.C.A.) In Foisy v. Bell Canada (1984), 18 D.L.R.
(4th) 222, [1984] C.S. 1164, the court denied its jurisdiction to hear the
plaintiff's claim in so far as it depended on contractual rights addressed by
the collective agreement, but confirmed its jurisdiction to deal with her
claims sounding in delict.
12. In cases where the claim concerned an
entitlement originating in the collective agreement, and the proper
interpretation of the agreement was disputed, the courts uniformly have denied
that they have jurisdiction: see Shank v. The KVP Co., [1966] 2 O.R. 847
(H.C.), Close v. Globe & Mail Ltd. (1966), 60 D.L.R. (2d) 105 (Ont.
C.A.), Acadia Pulp and Paper Ltd. v. International Brotherhood of Pulp,
Sulphite and Paper Mill Workers (1970), 15 D.L.R. (3d) 227 (N.B.Q.B.), Ford
v. Trustees of the Ottawa Civic Hospital, [1973] 3 O.R. 437 (H.C.), Binder
v. Halifax County Municipal School Board (1978), 84 D.L.R. (3d) 494
(N.S.C.A.), Bergeron v. Kingsway Transports Ltd. (1979), 23 O.R. (2d)
332 (Div. Ct.)
13. Recent cases, of which Campbell v. East‑West
Packers (1969) Ltd. (1982), 142 D.L.R. (3d) 90 (Man. C.A.), is an example,
have tended to view restrictively the availability of recourse to the courts
despite the fact that the claim could conceivably be characterized as depending
on common law principles, as opposed to arising solely under the collective
agreement. In that case, the majority of the court, per Hall J.A.,
dismissed an employee's claim to damages for wrongful dismissal where the
collective agreement expressly addressed, as most such agreements do, the
question of dismissal. Hall J.A. noted at p. 97 that the employee was seeking
at common law a broader remedy than would have been available to him through
the grievance procedure, and wrote (at p. 95) that:
A plain
reading of this legislation reveals a clear legislative intention that all
collective agreements shall contain a provision for final settlement of all
disputes or differences between the parties, including employees, concerning
its meaning, application or violation. The collective agreement in question
does contain such a provision and it expressly provides that dismissal of an
employee is confined to the process of grievance and, if necessary,
arbitration. Nothing in that agreement preserves or confers the remedy of
litigation.
Similarly, in Lawn v. Algonquin College of Applied Arts and
Technology (1982), 39 O.R. (2d) 377 (H.C.), the court denied its
jurisdiction to hear the plaintiff's claim for damages for wrongful dismissal:
see also Hooper v. Wellington County Board of Education (1984), 46 O.R.
(2d) 680 (Div. Ct.), Bourne v. Otis Elevator Co. (1984), 45 O.R. (2d)
321 (H.C.), Caines v. Cape Breton Development Corp. (1973), 39 D.L.R.
(3d) 606 (N.S.S.C.), Downey v. Scotia Square Hotel Ltd. (1974), 55
D.L.R. (3d) 300 (N.S.S.C.) The court in Lawn, supra, relied on
Laskin C.J.'s statements in McGavin Toastmaster, supra, about the
nature of the relationship between individual contracts of employment and
collective agreements. In the latter case, one of the arguments made by the
defendant employer was that the common law doctrine of fundamental breach
applied in the circumstances, so that the employees, by their illegal strike,
had forfeited any right to the benefits required to be provided by the
employer. This argument was soundly rejected. Laskin C.J. wrote (at pp. 724‑27):
I do not think that in the
face of labour relations legislation such as existed at the material time in
British Columbia, in the face of the certification of the union, of which the
plaintiffs were members, as bargaining agent of a specified unit of employees
of the company and in the face of the collective agreement in force between the
union and the appellant company, it is possible to speak of individual
contracts of employment and to treat the collective agreement as a mere
appendage of individual relationships. The majority of this Court, speaking
through Judson J. in Syndicat catholique des employés de magasins de Québec
Inc. v. Compagnie Paquet Ltée [[1959] S.C.R. 206], at p. 212, said this in
a situation where a union was certified for collective bargaining under Quebec
labour relations legislation:
There is no room left for
private negotiation between employer and employee. Certainly to the extent of
the matters covered by the collective agreement, freedom of contract between
master and individual servant is abrogated. The collective agreement tells the
employer on what terms he must in the future conduct his master and servant
relations.
...
The
reality is, and has been for many years now throughout Canada, that individual
relationships as between employer and employee have meaning only at the hiring
stage and even then there are qualifications which arise by reason of union
security clauses in collective agreements. The common law as it applies to
individual employment contracts is no longer relevant to employer‑employee
relations governed by a collective agreement which, as the one involved here,
deals with discharge, termination of employment, severance pay and a host of
other matters that have been negotiated between union and company as the
principal parties thereto. To quote again from the reasons of Judson J. in the Paquet
case, at p. 214:
If the
relation between employee and union were that of mandator and mandatary, the
result would be that a collective agreement would be the equivalent of a bundle
of individual contracts between employer and employee negotiated by the union
as agent for the employees. This seems to me to be a complete misapprehension
of the nature of the juridical relation involved in the collective agreement.
The union contracts not as agent or mandatary but as an independent contracting
party and the contract it makes with the employer binds the employer to
regulate his master and servant relations according to the agreed terms.
...
In my
view, therefore, questions such as repudiation and fundamental breach must be
addressed to the collective agreement if they are to have any subject‑matter
at all. When so addressed, I find them inapplicable in the face of the
legislation which, in British Columbia and elsewhere in Canada, governs labour‑management
relations, provides for certification of unions, for compulsory collective
bargaining, for the negotiation, duration and renewal of collective
agreements.... Neither this Act nor the companion Labour Relations Act
could operate according to their terms if common law concepts like repudiation
and fundamental breach could be in‑ voked in relation to collective
agreements which have not expired and where the duty to bargain collectively
subsists.
14. If there were nothing more than the
collective agreement between bargaining agent and employer, the courts might
still have applied the common law to its enforcement at the suit of the
bargaining agent or the employer. The collective agreement embodies a holding
out, a reliance, a consent and undertaking to perform, mutual consideration
passing between the parties, and other elements of contract which would expose
the parties to enforcement in the traditional courts. There would be, of
course, a basic difficulty as to the status of the absent third party, the
employee, and perhaps the absence of an identifiable benefit in the bargaining
agent. All this is overcome by the statute, and the question whether worthwhile
enforcement could be realized at common law is, therefore, of theoretical
interest only. The missing elements are the status of the members of the
bargaining unit and the appropriate forum. The legislature created the status
of the parties in a process founded upon a solution to labour relations in a
wholly new and statutory framework at the centre of which stands a new forum,
the contract arbitration tribunal. Furthermore, the structure embodies a new
form of triangular contract with but two signatories, a statutory solution to
the disability of the common law in the field of third party rights. These are
but some of the components in the all‑embracing legislative program for
the establishment and furtherance of labour relations in the interest of the
community at large as well as in the interests of the parties to those labour
relations.
15. The above‑quoted passages illuminate
the profound impediments to reaching the conclusion that rights which at common
law would flow from a master‑servant relationship would survive under a
collective bargaining regime and continue to qualify for enforcement in the
traditional courts. The problem raised by attempts to escape the contract
tribunal so as to seek enforcement in the courts of rights arising under a
collective agreement negotiated within the framework of a collective bargaining
regime, solely on the grounds that the agreement does not explicitly address
the jurisdictional question, is an equally profound difficulty.
16. The collective agreement establishes the
broad parameters of the relationship between the employer and his employees.
This relationship is properly regulated through arbitration and it would, in
general, subvert both the relationship and the statutory scheme under which it
arises to hold that matters addressed and governed by the collective agreement
may nevertheless be the subject of actions in the courts at common law. These
considerations necessarily lead one to wonder whether the Miramichi
case, supra, and cases like it, would survive an objection to the
court's jurisdiction if decided today. The more modern approach is to consider
that labour relations legislation provides a code governing all aspects of
labour relations, and that it would offend the legislative scheme to permit the
parties to a collective agreement, or the employees on whose behalf it was
negotiated, to have recourse to the ordinary courts which are in the
circumstances a duplicative forum to which the legislature has not assigned
these tasks.
17. In some cases, additional statutory
provisions have also been considered. Thus, in Ontario the Rights of Labour
Act, R.S.O. 1980, c. 456, s. 3(3) provides:
3. ...
(3) A
collective bargaining agreement shall not be the subject of any action in any
court unless it may be the subject of such action irrespective of any of the
provisions of this Act or of the Labour Relations Act.
However, this section has not been the decisive factor in the great
majority of the cases (for an exception, see Drogt v. Robson‑Lang
Leathers Ltd., [1971] 3 O.R. 488 (Co. Ct.)) Section 125(3) of the Canada
Labour Code, R.S.C. 1970, c. L‑1, provides:
125. ...
(3)
Every party to and every person bound by the agreement, and every person on
whose behalf the agreement was entered into, shall comply with the provision
for final settlement contained in the agreement and give effect thereto.
This section was important in Caines v. Cape Breton Development
Corp., supra. The predecessor of the New Brunswick Industrial
Relations Act in issue in this appeal contained an identical section: Labour
Relations Act, R.S.N.B. 1952, c. 124, s. 18(3). The present Act does not
repeat the wording, but s. 55 taken in context is to the same effect, in that
it requires provision for binding arbitration or some other means of
settlement of disputes, and the Act requires obedience to the terms of the
collective agreement. (See Acadia Pulp and Paper, supra, where
the court considered s. 18(3) but based its decision on the fact that the whole
section, which was otherwise virtually identical to s. 55 of the present Industrial
Relations Act, clearly required recourse to arbitration.)
18. The appellant has relied on the case of Perini
Pacific Ltd. v. International Union of Operating Engineers, Local 115
(1961), 28 D.L.R. (2d) 727 (B.C.S.C.), where the court awarded damages against
a union for participating in an illegal strike in the face of the British
Columbia Trade‑unions Act, R.S.B.C. 1960, c. 384, s. 4, which
expressly provided that a trade union which "does, authorizes, or concurs
in anything prohibited by the Labour Relations Act" would be
"liable in damages to anyone injured thereby". In view of this
provision, it was not open to the court to find in the Labour Relations Act
provision for binding arbitration, a clear legislative intent to oust its jurisdiction
to deal with such a claim.
19. From the above survey of the cases, a
general consensus is evident. The courts have no jurisdiction to consider
claims arising out of rights created by a collective agreement. Nor can the
courts properly decide questions which might have arisen under the common law
of master and servant in the absence of a collective bargaining regime if the
collective agreement by which the parties to the action are bound makes
provision for the matters in issue, whether or not it explicitly provides a
procedure and forum for enforcement. There is, therefore, little practical
scope left to the second general exception identified above. As to the first
exception, that is, that the court may enforce the terms of a collective
agreement where its meaning is not disputed, this Court decided in Brunet,
supra, and Shell Canada Ltd. v. United Oil Workers of Canada, supra,
that there is no difference in principle between a dispute over the
"application" of a collective agreement and one relating to its
"violation". The jurisdiction of the courts ought not, therefore, to
depend on whether the parties dispute the meaning or application of the terms
of a collective agreement. It is accordingly not necessarily determinative of
the question of the courts' jurisdiction that in this appeal, the strike
apparently amounted to a breach of a clear term of the collective agreement.
There is also an apparent breach of the statute, a consideration to be examined
later in these reasons.
20. What is left is an attitude of judicial
deference to the arbitration process. This deference is present whether the
board in question is a ‘statutory’ or a private tribunal (on the distinction in
the labour relations context, see Roberval Express Ltée v. Transport
Drivers, Warehousemen and General Workers Union, Local 106, [1982] 2 S.C.R.
888, Howe Sound Co. v. International Union of Mine, Mill and Smelter Workers
(Canada), Local 663, [1962] S.C.R. 318, affirming (1961), 29 D.L.R. (2d)
76, Re International Nickel Co. of Canada and Rivando, [1956] O.R. 379
(C.A.)) It is based on the idea that if the courts are available to the parties
as an alternative forum, violence is done to a comprehensive statutory scheme
designed to govern all aspects of the relationship of the parties in a labour
relations setting. Arbitration, when adopted by the parties as was done here in
the collective agreement, is an integral part of that scheme, and is clearly
the forum preferred by the legislature for resolution of disputes arising under
collective agreements. From the foregoing authorities, it might be said,
therefore, that the law has so evolved that it is appropriate to hold that the
grievance and arbitration procedures provided for by the Act and embodied by
legislative prescription in the terms of a collective agreement provide the
exclusive recourse open to parties to the collective agreement for its
enforcement.
21. This, however, appears to conflict with
the long‑settled jurisdiction of the courts to issue injunctions
restraining illegal strike activity during the currency of a collective
agreement: International Brotherhood of Electrical Engineers, Local Union
2085 v. Winnipeg Builders’ Exchange, supra, International Longshoremen’s
Association, Locals 273, 1039, 1764 v. Maritime Employers’ Association,
[1979] 1 S.C.R. 120. It can be surmised that many, if not all, of the cases in
which injunctions have issued, started life as claims for an injunction
together with other relief, including damages to compensate an employer for
losses suffered during an illegal strike (for example, British Columbia
Maritime Employers Assn. v. International Longshoremen’s and Warehousemen’s
Union‑‑Canadian Area, [1972] 5 W.W.R. 738 (B.C.S.C.), Saint
John Shipbuilding and Dry Dock Co. v. Industrial Union of Marine and
Shipbuilding Workers, Local 3 (1979), 26 N.B.R. (2d) 179 (S.C.), and see New
Brunswick Electric Power Commission v. International Brotherhood of Electrical
Workers, Local 1733 (1978), 22 N.B.R. (2d) 364 (S.C.), where general and
punitive damages were awarded to an employer after the defendant union had
engaged in an illegal strike). The history of labour law in our country since
World War II reflects a rather straightforward pattern whereby the parties
would take recourse to the superior courts by an action for injunction,
declaration and damages in which an interlocutory or interim injunction was
sought with a view to driving the other party back to the labour relations
process prescribed by statute. Rarely would the action proceed beyond the
interlocutory injunction stage.
22. An injunction is as much an action to
enforce the no‑strike clause in a collective agreement as is an action
for damages. If the former is available, so in principle should be the latter.
Thus, if it is confirmed that the courts have no business interpreting,
applying or enforcing collective agreements in any way, the jurisdiction to
enjoin strikes illegal by virtue of their occurrence during the term of a
collective agreement, unquestioned since Winnipeg Builders’ Exchange, supra,
is called into doubt. This would have the unfortunate result of putting an employer
whose assent to a collective agreement indicates his willingness to bargain in
good faith with the union and to fulfill the expectations of the collective
bargaining regime, in a more restricted position than an uncooperative employer
who may never have signed an agreement, and who is not therefore subject to
binding arbitration. This prejudice may be more apparent than real, however, as
in fact it entails only a shift of forum and procedure, but not necessarily a
real deprivation of ultimate remedy.
23. The statutory context may be viewed as
ambiguous on this issue. Though setting out a scheme in which arbitration plays
a central role, the legislation does not enact any privative clause explicitly
ousting the jurisdiction of the courts to deal with breaches of collective
agreements which clearly, under the legislation, regulate the legal rights of
the parties and are binding and enforceable in the proper forum. This is in
contrast to the practice in all provincial and federal labour relations
statutes of expressly excluding the courts from any power of review by any
procedure of the determinations by the statutory labour relations board. The
absence of such legislative action in the case of the boards of arbitration
established by contract, even in the provinces where such boards have been held
to be statutory and not private, is perhaps revealing of the presence of a
legislative intent to continue some role for the traditional courts in the
labour relations pattern. What the statute does is to establish a preference
for arbitration of a particular sort over other means of dispute settlement, by
establishing a procedure to be followed where the parties do not expressly
provide for any other method of resolving their differences. Where the parties
so choose, however, the New Brunswick Act, in common with most of the other
Canadian labour relations statutes, does not actually require the parties to
resort to arbitration (the Ontario Labour Relations Act, R.S.O. 1980, c.
228, is an exception in this respect; see Rivando, supra). It
requires a provision in the collective agreement for "final and binding
settlement by arbitration or otherwise, without stoppage of work".
The emphasized words indicate that, if they so choose, the parties may validly
provide for a variety of other sorts of settlement mechanisms, including
recourse to the courts (see Acadia Pulp and Paper, supra). Thus,
even where the parties, as here, have chosen arbitration, it may be argued that
s. 55(1) of the New Brunswick Act is insufficient to oust the inherent
jurisdiction of the superior courts. This is not a case like Barraclough v.
Brown, [1897] A.C. 615 (H.L.), where the statute "appoints a specific
tribunal or other body" for the enforcement of rights or duties created by
the statute, such that "recourse must be had to that body alone": see
De Smith’s Judicial Review of Administrative Action (4th ed., 1980), at
pp. 358‑60.
24. There is the further consideration that
the Act appears to recognize concurrent jurisdiction to deal with aspects of
illegal strikes in the statutory board, the courts, and arbitrators acting
under the provisions of collective agreements. Section 102(3) provides:
102(3) A declaration made under this section does not affect any
proceeding in any court or any proceeding under the provision of a collective
agreement, where the question of a lawful or unlawful strike...is in issue.
25. This may be seen to accord with the reason
for enactment of the arbitration provisions. As suggested by Lord Russell in Young
v. Canadian Northern Ry. Co., [1931] A.C. 83, the appropriate course of
action for workers who had a grievance under a collective agreement at common
law was to engage in concerted action, usually a strike, in order to force the
employer's compliance. Labour legislation was enacted largely to regulate
industrial relations with an eye to preserving industrial peace: per
Cartwright J., as he then was, in Winnipeg Builders’ Exchange, supra,
at p. 640. A cornerstone in this legislative edifice was to make strike action
or lock‑out illegal during the currency of a collective agreement. In
exchange for restricting the right to strike and lock‑out, the
legislation made collective agreements binding and enforceable. In the United
States, the no‑strike clause and the arbitration clause have been viewed
as the quid pro quo for each other: Textile Workers v. Lincoln Mills
of Alabama, 353 U.S. 448 (1957), at p. 455, and Steelworkers v. American
Mfg. Co., 363 U.S. 564 (1960), at p. 567.
26. This, in the Canadian context, may be
taken as indicated by the fact that grievances are directed to be settled by
arbitration "without stoppage of work". It would, accordingly, be
illogical to permit a union to plead in defence to court proceedings brought to
restrain an illegal strike that the employer should have resorted to
arbitration, when the conduct in issue is the very conduct which the provision
for arbitration and the statutory prohibition were designed to prevent. Thus,
in Transport Labour Relations v. General Truck Drivers & Helpers Union,
Local No. 31 (1974), 54 D.L.R. (3d) 457 (B.C.S.C.), involving an illegal
work slowdown during the currency of a collective agreement, Meredith J. at pp.
459‑60 denied that the employer was required to resort to arbitration. He
said, "The union has adopted the very course that it was the whole purpose
of the agreement to prevent and is in flagrant violation of its commitment to
preserve peace while the agreement is in effect."
27. The avoidance of the disruptive effect of
cessation of production of goods and services except in well defined
circumstances is one of the basic design features of labour relations
legislation. Another feature of labour legislation is the provision for rapid
restoration of normal bargaining relations. Long or repeated abstentions of the
parties from participation in the remedial processes of collective bargaining
and grievance processing defeats the program. Slow and expensive processes of
dispute resolution likewise render the statutory scheme less beneficial and
perhaps unavailable to the community. The labour arbitration board came into
being because of this reality.
28. In a limited role, the ready access by the
parties to the court system provided by the community for the disposition of
differences however arising in the community, can itself be another bulwark
against the deterioration of employer‑employee understanding. The
interlocutory injunction by summary process but of limited life, for example as
governed by the Judicature Act of Ontario, now the Courts of Justice
Act, 1984, 1984 (Ont.), c. 11, s. 115, finds its origin in this reality. It
is, of course, open to the legislature to close this access, as it has done in
the case of the privative clauses relating to the labour relations boards
themselves. Where the legislature resolves to narrow the forum and the remedies
otherwise available to the parties, the interpretive rules applied by the
courts should require the legislature to express its intent clearly. Where the
legislature does not do so, the duty remains in the court to respond to a
proper request to enjoin an activity such as a strike or lock‑out which
offends the statute and the collective agreement, in short the entire system of
labour relations as established by the legislature.
29. When a court issues an injunction to
restrain illegal strike activity, the courts have based such relief in both the
breach of collective agreement and the breach of statute: Winnipeg Builders’
Exchange, supra. However, it is clearly the breach of statute that
is most significant. It is the statutory scheme to which the courts have
deferred, not the single provision for arbitration in a collective agreement.
Thus, in the court below, La Forest J.A. (as he then was), after discussing the
statutory scheme, wrote:
To allow a party to a
collective agreement, at its whim, to bring an action for damages for what
really constitutes a difference arising out of a collective agreement would, as
it appears to me, be to set up a remedy in substitution for that established by
the Legislature.
He concluded with respect to the power to enjoin illegal strikes,
however, that
...this power has been
used with the intention of supporting the legislative scheme, not to supplant
it. As Cartwright C.J.C. stated in...[Winnipeg Builders’ Exchange, supra],
"the purposes of the...Act would be in large measure defeated if the Court
were to say that it is powerless to restrain the continuation of a strike
engaged in in [sic] direct violation of the terms of a collective
agreement binding on the employees and in breach of the express provisions of
the Act".
30. When viewed from this perspective, it is
apparent that the cases affirming the courts' injunctive power do not purport
to create a power in the courts to enforce the terms of collective agreements.
Rather, they enforce the general law as embodied in the statute, which includes
both an express prohibition on strikes during the currency of a collective
agreement and provision for binding and enforceable arbitration which, in many
cases, would resolve the dispute underlying illegal strike activity. An
injunction restraining a strike also upholds incidentally the rights of an
employer under a collective agreement, and specifically enforces the individual
obligations of the employees on whose behalf the collective agreement was
negotiated pursuant to the Industrial Relations Act of New Brunswick, supra.
Such incidental effects, as the Winnipeg Builders’ Exchange case, supra,
demonstrates, are not sufficient reason to deny an injunction to prevent
immediate harm arising out of a clearly illegal act, where no adequate
alternative remedy exists.
31. In this case, an interlocutory injunction
was sought in and granted by the New Brunswick courts. No objection was then
taken to the court's jurisdiction. Breach of this injunction was later the
subject of contempt proceedings against the respondent union and several of its
officers. In imposing a $15,000 fine in the first of these proceedings, the
Chambers Judge observed at (1981), 35 N.B.R. (2d) 211, at p. 215, that
"The fine cannot of course be waived by the employer; it is not in the
nature of damages; it is a fine imposed by the court." It is, indeed, clear
that the New Brunswick Judicature Act, R.S.N.B. 1973, c. J‑2,
which carries forward the equitable jurisdiction established in England by Lord
Cairns' Act (Chancery Amendment Act, 21 & 22 Vict., c. 27) to award
damages in substitution for or in addition to an injunction, cannot provide the
basis for the relief sought in this appeal. Damages in these circumstances are
not "in substitution for" the abortive injunction, because the
injunction was in fact issued. The failure of the injunction to operate has been
corrected by the contempt orders, which are the proper means for the
enforcement of an injunction. Civil damages are not part of the weaponry of the
court in ensuring compliance with its injunctions.
32. Nor can s. 91 of the Industrial
Relations Act reasonably be considered to establish a cause of action for
damages in civil law. It is simply one of a series of restrictive provisions
which have been erected by the legislature as part of a complex structure
within which labour relations in the province shall be conducted. It is hostile
to the purpose and philosophy of such legislation to burden it with collateral
actions in the courts for damages against persons who become party to these
relations. Damages, where they are the appropriate compensation for action in
breach of both the legislation and the collective agreement, are properly
available in an arbitration based directly on the terms of the collective
agreement, not in an action in the courts based on the terms of the statute.
33. On the other hand, where the conduct of
one party or the other to the collective agreement goes beyond the agreement
and offends the independent statutory edict prohibiting strikes during the
terms of a collective agreement, the entire application of the labour relations
process as laid down by the legislature is brought into question. The wrong is,
fortuitously, a mixture of breach of statute and breach of contract. There is
no clear directive from the legislature that the courts may not entertain a
plea for injunctive relief where the entire statutory system of labour
relations is brought into the confrontation, for example in cases where
employees strike during the currency of a collective agreement. While cessation
of work, either collective or individual, may be the subject of grievance
procedures and arbitration and may lead to an arbitration award requiring the
party in breach to cease the conduct in question, there is nothing in the
statute to indicate exclusivity in this role. Indeed, the statute, by not
limiting the edict in s. 91 by any procedural stipulation, and by not
explicitly stating that the monetary penalty for breach of a statutory term in
s. 111(1) is the only remedy available for breach of s. 91, has left the public
interest, in the avoidance of wild‑cat strikes and illegal lock‑outs,
to be served by the courts where the conduct complained of warrants community
involvement through the courts. Similarly, s. 102(3), supra, clearly
contemplates a continuing jurisdiction in the courts, notwithstanding a
declaration by the Labour Relations Board that a strike is unlawful, to deal
with such an issue where it arises in proceedings before a court. The comments
of the learned author of Canadian Labour Law (1985), George W. Adams,
Q.C., are appropriate (p. 703):
Injunctions
granted by the courts may be used to restrain breaches of a collective
agreement unless there is legislation preventing access to the courts for
actions on a collective agreement. Therefore, in the absence of such
restrictive legislation, injunctions have been issued where the courts have
been satisfied such action is necessary, most commonly in the cases of unlawful
strikes.
The learned author goes on to say that the courts will decline
intervention where "equally effective" remedies are available
elsewhere. The lack of such remedies in the reality of an expensive stoppage of
production is indeed the prime reason for the continued availability in the law
of the judicial remedy of injunction, at least in the case of illegal strikes.
34. I therefore conclude that the courts do
have a limited residual presence in the labour relations scheme as it has
evolved in the legislative program where the conduct amounts to illegal strike
or lock‑out, and that the general jurisdiction to issue injunctions under
the Judicature Act is unimpaired in this context. The court below does
not appear, as is evident from the passage cited supra, to have taken
the position that an otherwise competent court may not intervene by injunction
alone, but rather centred its attention upon the primacy of the arbitration
board in resolving disputes through the grievance process. Of course, if
arbitration is pursued, the remedies may be damages or reinstatement, or other
remedial procedures known to labour law.
35. The facts of this case are very similar to
those in the Maritime Employers case, supra. There, the picket
line was put up by another union which was on strike against a different
employer, but the work situs was common to the striking union and the
union and employer involved in the Maritime Employers proceedings. Here
the union which put up the lawful picket line is a different local of the same
union representing the mill workers who refused to cross it, and the employer
and situs of employment is common to both units. In the result,
therefore, we have in each case a lawful picket line surrounding a common site
of employment and a wrongful refusal to cross the lawful picket line.
36. In both cases the offended employer took
action in the courts for an injunction. Here the employer has asked for damages
as well. No doubt this was true in the Maritime Employers case, supra,
but the record does not reveal the extent of the initial claim. Here the trial
judge, on his own motion, rejected the action as it pertained to damages. In Maritime
Employers presumably the parties did not press their claim and the court,
considering the matter closed upon the issuance of the interlocutory
injunction, did not address the question of damages. It should be noted,
however, that the issuance of the injunction was challenged in that proceeding
at each level of appeal on several grounds, but not because of any lack of
jurisdiction in the court to issue the injunction.
37. Therefore, I conclude that the courts
below were correct in law in recognizing that the claim for damages must be
advanced in the contractual forum of an arbitration board. This is so where
legislation requires the parties to establish a mechanism for dispute
resolution, and whether the arbitration board so established is `statutory' or
is private in nature. This appeal does not require comment upon the question of
the range or remedies the board may apply in disposing of differences arising
under the collective agreement, as we are here concerned only with a claim for
damages. On the other hand, it should be said for clarity and completeness,
because the issue of the availability of a court injunction and other judicial
remedies was ever present in the arguments presented by the parties to this
Court, that the initial process in injunction undertaken by the court in these
proceedings was within the jurisdiction of the court, and that this
jurisdiction has not been reduced by the labour relations statute or indeed by
the presence of the collective agreement and its provision for arbitration.
38. I therefore would dismiss the appeal with
costs.
Appeal dismissed with costs.
Solicitors for the appellant: Petrie & Richmond,
Fredericton.
Solicitors for the respondent: Neill, Breen &
Miller, Fredericton.
Email this Content