Royal Oak Mines Inc. v. Canada (Labour Relations Board), [1996] 1 SCR 369

[1996] 1 S.C.R.

Royal Oak Mines Inc. v. Canada (Labour Relations Board)

369

---

Royal Oak Mines Inc.      Appellant

v.

Canada Labour Relations Board and
Canadian Association of Smelter and Allied
Workers (CASAW), Local No. 4      Respondents

Indexed as: Royal Oak Mines Inc. v. Canada (Labour Relations Board)

File No.: 24169.

1995: October 30; 1996: February 22.

Present: Lamer C.J. and L'Heureux-Dubé, Sopinka, Gonthier, Cory, McLachlin and Major JJ.

ON APPEAL FROM THE FEDERAL COURT OF APPEAL

      Labour law -- Tribunals -- Judicial review -- Jurisdiction -- Remedy -- Labour Board requiring employer to table last offer -- Issues in dispute subject to limited bargaining period before imposition of binding arbitration -- Whether Board's decision going to jurisdiction and so requiring a correct decision -- If decision within Board's jurisdiction, whether remedy patently unreasonable -- Canada Labour Code, R.S.C., 1985, c. L-2, s. 99(2) .

      Labour law -- Collective bargaining -- Duty to bargain in good faith -- Employer refusing to consider re-instatement of employees discharged for picket-line violence -- Whether employer failing to bargain in good faith -- Whether Board's finding of failure to bargain in good faith patently unreasonable.

      Labour law -- Collective agreements -- Allegation of imposed agreement -- Labour Board requiring employer to table last offer -- Issues in dispute subject to limited bargaining period before imposition of binding arbitration -- Whether Board had jurisdiction to make remedy ordered -- If so, whether remedy patently unreasonable.

     The unionized workers of Royal Oak Mines voted overwhelmingly to reject a tentative agreement put forward by the appellant. A bitter and violent 18-month strike, which affected the whole community, occurred. Various attempts to effect a settlement were made during the strike, from the appointment of an industrial commission to the naming of very experienced mediators. The Canada Labour Relations Board, on an application made by the union, unanimously found that the appellant employer had failed to bargain in good faith. The employer refused to bargain until the certification issue had been resolved. Further the employer wished to impose a probationary period on all returning strikers. Despite the employer's position on these issues the Board's finding was based on the employer's refusal to negotiate until the issue of re-instatement and discipline of several employees accused of picket-line violence had been resolved. In light of the long history of intransigence and the bitterness of the parties the Board directed the appellant employer to tender the tentative agreement which it had put forward earlier (and which had been rejected) with the exception of four issues about which the appellant employer had changed its position. The parties were given 30 days of bargaining to settle those issues and, if they remained unresolved, then compulsory mediation was to be imposed. At issue is the jurisdiction of the Board to make this order.

     Held (Sopinka, McLachlin and Major JJ. dissenting): The appeal should be dismissed.

     Per L'Heureux-Dubé, Gonthier and Cory JJ.: Several factors should be taken into consideration in determining whether the scope of remedial orders should be left to the Board or whether the section went to jurisdiction rendering the Board's decision reviewable by the courts if it was not correct: (a) the wording of the enactment conferring jurisdiction on the tribunal; (b) the purpose of the statute creating the tribunal; (c) the reason for the tribunal's existence; (d) the area of expertise of the tribunal's members; and (e) the nature of the problem before the tribunal. Deference should be accorded by the courts to remedial orders made by the Board. Once it has been established by the provisions of the empowering legislation that the Board does, in fact, have the jurisdiction to order certain remedies, the question of which of these remedies the Board chooses to impose in any given situation is a question within the Board's jurisdiction.

     The legislation gave the Board a wide and flexible remedial role. The wording of s. 99(2)  of the Canada Labour Code  (the "Code ") did not place precise limits on the Board's jurisdiction and the fact that the Board could fashion equitable remedies indicated that Parliament intended the Board to have wide remedial powers. Furthermore, a broad privative clause in s. 22(1)  provided that both the Board's decisions and orders were final.

     The Board's decision fell within its jurisdiction and must not be interfered with unless it is patently unreasonable. Several factors indicate that the patently unreasonable standard should be followed, as opposed to the correctness standard going to jurisdiction: (a) the presence of a clear and strongly worded privative clause; (b) the provisions of the Code  demonstrating the decision to be one falling within the board's jurisdiction; (c) the finding of lack of good faith (essentially a finding of fact to be left to the Board); (d) the Board's expertise and experience in dealing with precisely this type of question; and (e) the courts' high degree of deference to the decisions of labour relations boards.

     The duty to bargain in good faith was breached in three ways. First, the appellant refused to bargain with the respondent union, the exclusive bargaining agent of the employees, pending the outcome of a competing employee association's certification application. The employer is obliged to recognize the certified union and bargain exclusively with it. Second, the appellant's demand for a probationary clause for all returning employees breached this duty -- attempts to penalize those who had participated in a lawful union activity undermines the operation and basic principles of the labour relations statute. Third, the appellant failed to bargain in good faith when it refused to agree to a provision for any type of arbitration or consideration of questions arising from its discharge of several employees. This outright refusal to discuss this issue completely blocked the bargaining process.

     The duty to enter into bargaining in good faith must be measured on a subjective standard, while the making of a reasonable effort to bargain should be measured by an objective standard which can be ascertained by a Board looking to comparable standards and practices within the particular industry. This latter part of the duty prevents a party from hiding behind an assertion that it is sincerely trying to reach an agreement when, viewed objectively, it can be seen that its proposals are so far from the accepted norms of the industry that they must be unreasonable.

     The Code  granted the Board jurisdiction to decide whether the appellant failed to bargain in good faith. Its decision should not be set aside by the courts unless patently unreasonable. That decision, given the overwhelming evidence supporting the Board's finding that the appellant breached its duty to bargain in good faith by imposing an unreasonable condition to the collective bargaining process, was not unreasonable.

     The remedy directed by the Board was not patently unreasonable; rather, it was eminently sensible and appropriate in the circumstances. A remedial order will be considered patently unreasonable where: (1) the remedy is punitive in nature; (2) the remedy granted infringes the Charter; (3) there is no rational connection between the breach, its consequences, and the remedy; (4) the remedy contradicts the objects and purposes of the Code . A rational connection did indeed exist between the breach, its consequences and the remedy and the remedy affirmed the objects and purposes of the Code .

     The Board did not exceed its powers by imposing closure on the parties instead of allowing them to arrive at a settlement themselves. Section 99(2) grants the Board remedial authority for the purpose of ensuring the fulfilment of the objectives of the Code .

     Free collective bargaining is fundamental to the Code and labour relations and as a general rule should be permitted to function. Nonetheless, situations will arise when that principle can no longer be permitted to dominate a situation. A Board will be justified in exercising its experience and special skill in order to fashion a remedy where: the dispute has been bitter and lengthy; the parties have been intransigent and their positions intractable; one of the parties has not been bargaining in good faith and this failure has frustrated the formation of a collective bargaining agreement; and a community is suffering as a result of the strike. This will be true even if the consequence of the remedy is to put an end to free collective bargaining. This follows in part because it is the lack of good faith bargaining by a party which is frustrating the bargaining process and in part because of the other principles and factors the Board is required to consider pursuant to the provision of the Code .

     In the circumstances, it was appropriate that the Board fashion a remedy. This strike had been bitter and long. The intractable position of appellant that it would not consider some form of due process for dismissed employees put an end to any possibility of true bargaining and was properly found to constitute lack of good faith. The community was obviously suffering. The remedy put forward did not impose a collective agreement. Rather the Board used the tentative agreement drafted and put forward by the appellant as its last offer as a basis for the bulk of its remedy. The four matters on which there was no agreement were left to the parties for a further 30 days' bargaining and became subject to binding arbitration only in the event of failed negotiations. Once the basic statutory ground rules have been broken by a party, the parties can no longer expect to have the same unbridled freedom to bargain. Given the past history of the parties' intransigence, no other solution was feasible. Indeed, the fact that the Board applied its experience and skill to design a remedy that was eminently fair and sensible was beneficial to both parties and the community.

     The Board did not impose the tentative agreement or the additional terms and conditions on the parties without first ensuring that all the other options which could realistically be expected to bring an end to the dispute had been exhausted. Given appellant's lack of cooperation and good faith bargaining and the damage to the community which the parties' dispute had caused, the Board properly exercised its discretion to impose a remedy which would put an end to the impasse.

     The remedial order directly related to the effect of the failure to bargain in good faith and in so far as was possible complied with the aims and objects of the Code . The remedy struck an appropriate balance between the public interest and the interests of the parties and was beyond reproach. The order made came within the Board's jurisdiction. Therefore applying the appropriate degree of deference, the order was not patently unreasonable and could not be set aside. Had it been necessary to so find, the order would have met the standard of correctness.

     Section 80  of the Code , which empowers the Board to impose a first contract, applies to a situation completely different from that addressed by s. 99(2). Section 99(2) need not be read restrictively as a result of the provisions of s. 80.

     Per Lamer C.J.: The Board's finding that the employer had failed to bargain in good faith as required by s. 50 (a) of the Code  fell within its specialized jurisdiction, and this finding was not patently unreasonable under the circumstances. As well, the Board's choice of remedial order, directing the employer to table an offer with a number of imperative terms, fell within its specialized competence given the broad equitable discretion delegated by s. 99(2). In light of the bitter and intractable nature of this dispute, the Board's affirmative remedial order was not patently unreasonable. Such an extraordinary order, while justified in these circumstances, runs against the established grain of federal and provincial labour codes by overriding the cherished principle of "free collective bargaining" which underlies both federal and provincial labour codes. In the absence of exceptional and compelling circumstances such as those prevailing in this case, it will normally be patently unreasonable for a labour board to impose such an invasive remedial order in light of the core value of free collective bargaining enshrined in the Code .
Per Sopinka, McLachlin and Major JJ. (dissenting): The question of whether a particular party has been guilty of bad faith bargaining is a finding of fact within the particular expertise of the Board and must be upheld unless it is found to be patently unreasonable. Section 50 (a)(i) and (ii) of the Code , taken together with ss. 98 and 99, clearly clothes the Board with the authority to determine whether a particular party has bargained in good faith and whether a party has made "every reasonable effort to enter into a collective agreement". In addition, the Board is protected by a clear and strongly worded privative clause in s. 22(1). The Board's decision on this issue can only be set aside if patently unreasonable.

     Three considerations, taken collectively, indicate that the Board's finding of bad faith should not be interfered with on a standard of patent unreasonableness: (1) the position characterized as unreasonable by the Board concerned a non-monetary issue; (2) the appellant was insisting on the objectively unreasonable position to the point of impasse; and (3) this finding of bad faith was found in the context of the Board's correct finding that the appellant was bargaining in bad faith by making resolution of the issue a precondition to any further bargaining.

     The question of the Board's power to grant a particular form of remedy is a question of jurisdiction. Section 99(2) grants jurisdiction and is the sole source of the Board's authority to order remedies beyond the simple "compliance orders" provided for in s. 99(1). It authorizes the Board to make "equitable" orders to remedy the consequences of breaches of the Code and grants jurisdiction to make orders that the Board would otherwise not have the power to make. The true effect of the Board's order must be determined in deciding whether the Board's order was within the jurisdiction granted under s. 92(2). The order not only required the appellant to table an offer but also set out in detail many of the specific terms that the offer had to contain. The inclusion of clauses unrelated to the alleged "bad faith" forced the conclusion that the Board's order constituted the imposition of a full collective agreement.

     The wording of s. 99(2) clearly imposes at least two limitations on the remedies which can be granted under the authority of this section: (1) a rational connection must exist between the breach of the Code , a consequence which is adverse to the fulfilment of the objectives of the Code , and the remedy; and (2) the remedy must ensure the fulfilment of the objectives of the Code . Even if the "requisite nexus" between the breach, the consequences and the remedy is set as low as "a rational connection", the nexus is missing in this case. The fundamental purpose of the Code  is the constructive settlement of labour disputes by the parties to the dispute through the medium of "free collective bargaining". Other important objectives mentioned in the preamble are only to be achieved by the promotion of free collective bargaining.

     The breach which caused the Board's intervention was the appellant's bad faith bargaining regarding the claims of dismissed employees. The Board did not hold that this bad faith bargaining caused the parties not to reach a collective agreement. Rather it held that the consequence of the failures of both parties to bargain in good faith over the course of the negotiations was that no collective agreement had been reached. The fact that the historic failures of both parties to bargain in good faith over the long course of negotiations led to the lack of a collective agreement does not justify the imposition of the complete terms of a collective agreement on one of those parties which happens to now be in breach of its good faith bargaining duty in only one particular respect.

     Section 99(2) requires that the consequence which the Board seeks to remedy be one adverse to the objects of the Code . The Board incorrectly concluded that the failure to reach a collective agreement was adverse to the objects of the Code . The objects of the Code  are the encouragement of free collective bargaining and the constructive settlement of disputes by the parties through the collective bargaining process. The obligations of the bargaining parties under the Code  are to bargain in good faith and to "make every reasonable effort". Parties are not required to reach an agreement. It is perfectly consistent with the objects of the Code  for parties to negotiate to impasse provided that the good faith obligation is met.

     Binding mediation and arbitration may be effective mechanisms for resolving disputes but they are mechanisms to be chosen by the parties as an alternative to free collective bargaining. The Board does not have jurisdiction to impose binding arbitration on the parties where the parties have opted to resolve their dispute through free collective bargaining. The Board's order not only lacked the requisite nexus to the breach of the Code  but was also antithetical to the Code 's objects.

     The Board's duty, when a party breaches its obligation to bargain in good faith during free collective bargaining, is to ensure that the party properly exercises that obligation. The Board is not to deprive the party of any further opportunity to participate in the bargaining process. The conclusion the parties were not likely to resolve certain issues on their own did not justify the Board's imposing an agreement even where the Board relied on a third party mediator to impose the final terms of that agreement. Parties to free collective bargaining are entitled to continue to bargain to impasse unless Parliament chooses to intervene.

     The Board had jurisdiction to impose an effective remedy even if it did not have jurisdiction to impose closure on this labour dispute by dictating the terms of a new collective agreement. It could order the employer (1) to table within a specified time a collective agreement which it was willing to honour, and (2) to cease and desist from its unreasonable position with respect to the dismissed employees (or even impose a specific term to deal with this issue alone). Such a solution would have displayed the necessary "nexus" and would have respected the fundamental objective of the Code of allowing each of the parties to engage in collective bargaining. The Board would once again be entitled to intervene if another impasse were to result because of further instances of "bad faith".

Cases Cited

By Cory J.

     Applied: U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048; National Bank of Canada v. Retail Clerks' International Union, [1984] 1 S.C.R. 269; distinguished: Canadian Union of Public Employees v. Labour Relations Board (Nova Scotia), [1983] 2 S.C.R. 311; considered: Rogers Cable T.V. (British Columbia) Ltd. (1987), 69 di 17; Eastern Provincial Airways Ltd. v. Canada Labour Relations Board (1984), 65 N.R. 81, aff'g in part Eastern Provincial Airways Ltd. (1983), 54 di 172; Brewster Transport Co. (1986), 66 di 1; referred to: Canada (Attorney General) v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941; Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227; Iberia Airlines of Spain (1990), 80 di 165; Canadian Broadcasting Corp. v. Canada (Labour Relations Board), [1995] 1 S.C.R. 157; Teamsters Union, Local 938 v. Massicotte, [1982] 1 S.C.R. 710; Canada Labour Relations Board v. Halifax Longshoremen's Association, [1983] 1 S.C.R. 245; Reference re Public Service Employee Relations Act (Alta.), [1987] 1 S.C.R. 313; Brewster Transport Co. (1986), 66 di 133; Re Tandy Electronics Ltd. and United Steelworkers of America (1980), 115 D.L.R. (3d) 197.

By Major J. (dissenting)

     Royal Oak Mines Inc. (1993), 92 di 153; Canadian Union of Public Employees v. Labour Relations Board (Nova Scotia), [1983] 2 S.C.R. 311; Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557; U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048; Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227; Canadian Broadcasting Corp. v. Canada (Labour Relations Board), [1995] 1 S.C.R. 157; National Bank of Canada v. Retail Clerks' International Union, [1984] 1 S.C.R. 269; British Columbia Telephone Co. (1977), 24 di 164; Re Tandy Electronics Ltd. and United Steelworkers of America (1980), 115 D.L.R. (3d) 197; Eastern Provincial Airways Ltd. (1983), 54 di 172; Brewster Transport Co. (1986), 66 di 1; Iberia Airlines of Spain (1990), 80 di 165.

Statutes and Regulations Cited

Canada Labour Code , R.S.C., 1985, c. L-2 , preamble, ss. 22 [am. 1990, c. 8, s. 56], 25, 50, 80, 94(3)(a)(vi), 97(1) [am. 1991, c. 39, s. 2], 98(1), 99 [am. idem, s. 3], 108.

Authors Cited

Adams, George W. "Labour Law Remedies". In Kenneth P. Swan and Katherine E. Swinton, eds., Studies in Labour Law. Toronto: Butterworths, 1983, 55.

     APPEAL from a judgment of the Federal Court of Appeal (1994), 167 N.R. 234, [1994] N.W.T.R. 179, dismissing an application for judicial review of a decision of the Canada Labour Relations Board (1993), 93 di 21, 94 C.L.L.C. ¶16,026, allowing respondent union's complaint. Appeal dismissed, Sopinka, McLachlin and Major JJ. dissenting.

     Edward C. Chiasson, Q.C., and M. A. Coady, for the appellant.

     Leo McGrady and Gina Fiorillo, for the respondent Canadian Association of Smelter and Allied Workers, Local No. 4.

     Chris G. Paliare, Andrew K. Lokan and Dominique Launay, for the respondent Canada Labour Relations Board.

     The following are the reasons delivered by

     I.LAMER C.J. -- I have had the benefit of reading the thoughtful and considered reasons of both my brethren in this appeal. While I share some of the concerns expressed by Justice Major with respect to the dramatic and intrusive nature of the Canada Labour Relations Board's choice of remedy in this instance, I ultimately find myself in agreement with the reasons and conclusions of Justice Cory. More specifically, I agree both that the Board's finding of bad faith bargaining by the employer under s. 50 (a) of the Canada Labour Code , R.S.C., 1985, c. L-2 , fell within the specialized jurisdiction of the Board, and that this finding was not patently unreasonable under the circumstances. Additionally, I share his view that the Board's choice of remedial order in this instance, affirmatively directing the employer to table an offer with a number of imperative terms fashioned by the Board, fell within the specialized competence of the labour tribunal in light of the broad equitable discretion delegated by s. 99(2)  of the Code . Given the bitter and intractable nature of this dispute, I agree with the Board's conclusion that a traditional cease-and-desist remedial order would be an "unrealistic and even a cruel waste of time" ((1993), 93 di 21, at p. 28). As such, similar to Cory J., I would find that the affirmative remedial order crafted by the Board was not patently unreasonable.

     II.However, I have chosen to write separately because I wish to stress that such an extraordinary order, while justified in these circumstances, runs against the established grain of federal and provincial labour codes by overriding the cherished principle of "free collective bargaining" which animates our labour laws. While Cory J. is correct in emphasizing that the principle of "free collective bargaining" is not the only policy interest advanced by the Code , it is undoubtedly one of the most important and one of the most sacred. Labour movements in Eastern Europe have fought for decades to resist state-imposed collective agreements, and it would be an ironic and tragic development in our labour law if the principle of free collective bargaining were to be regularly subordinated to the societal goal of the "constructive settlement of disputes". With those thoughts in mind, I find that in the absence of exceptional and compelling circumstances such as those prevailing in this case, it will normally be patently unreasonable for a labour board to impose such an invasive remedial order in light of the core value of free collective bargaining enshrined in the Code .

     III.Subject to these comments, I concur with the judgment of Cory J. and I would dismiss the appeal.

     The judgment of L'Heureux-Dubé, Gonthier and Cory JJ. was delivered by
IV.CORY J. -- In May of 1992, the unionized workers of Royal Oak Mines voted overwhelmingly to reject a tentative agreement put forward by the appellant. A strike of 18 months' duration followed. It was marked by tragic violence, and a cancerous ill will that divided workers from management, workers from workers and indeed the whole community of Yellowknife. The Canada Labour Relations Board unanimously found that the appellant employer had failed to bargain in good faith: (1993), 93 di 21, 94 C.L.L.C. ¶16,026. In light of the long history of intransigence and the bitterness of the parties the Board directed the appellant to tender the tentative agreement which it had put forward earlier with the exception of four issues about which the appellant employer had changed its position. The parties were given 30 days of bargaining to settle those issues. If they remained unresolved then compulsory mediation was to be imposed. At issue is the jurisdiction of the Board to make this order. To understand what impelled the Board to make the order and to determine if it was within its jurisdiction to do so it is necessary to set out the factual background in some detail.

     I. Factual Background

     V.The Giant Mine is located in Yellowknife, N.W.T., a town of some 15,000 inhabitants. In November 1990, the appellant, Royal Oak Mines Inc., acquired the Giant Mine. This gold mine had been in operation for over 50 years. It has rightly been called one of the most complex mines in Canada. Certainly it magnifies many of the inherent dangers of mining. During the 1940s and 1950s, when the price of gold was high all was well. Thereafter the mine became well known for both its poor productivity and poor labour relations. The appellant ultimately purchased it out of what was termed a soft receivership. In spite of this unhappy history the appellant was determined to turn things around and make the operation viable. Through the introduction of a new management style and a concerted effort to reduce costs wherever possible the appellant managed to reduce losses significantly in the first full year of operation. The company was less successful in improving its labour relations.

     VI.The hourly paid employees of Royal Oak employed at the Giant Mine are represented by the respondent Canadian Association of Smelter and Allied Workers, Local No. 4 (the "Union"). The Union has been the certified bargaining agent for some 240 employees at the Giant Mine since 1976. At the time the appellant acquired the mine it voluntarily recognized the Union and that it was bound by the existing collective agreement.

     VII.The Union was highly critical of the appellant's new management style and policies. In light of the tense nature of the working relationship the appellant was concerned about the difficult situation that would arise when the existing collective agreement expired in 1992 and hard bargaining would have to take place to reach a new agreement. In February 1992 the parties began the negotiations for a new collective agreement and in March the Federal Government appointed a conciliator to assist them.

     VIII.Despite its initial concern, the company was pleasantly surprised by the reasonable approach taken by the union bargaining committee. The result was that, with the assistance of the conciliator, a tentative agreement was reached on April 18, 1992. However, the union membership voted by a margin of 83 percent to reject this agreement. This rejection "shocked and outraged" the appellant, whose management was not experienced in collective bargaining. The outcome of the rejection was that the employees voted to strike and were subsequently given notice of a lock-out. On May 22, 1992, work stopped at the mine and the next day, the appellant hired replacement workers to continue operations. The long and bitter dispute began. It continued for 18 months rancorously dividing the parties and seriously damaged the entire Yellowknife community.

     IX.During the course of the strike the appellant employed Pinkerton's of Canada as a private security force to deal with the frequent violence on the picket line which, on one occasion, developed into a full riot. Unfortunately, the sight of these guards in camouflage gear, accompanied by attack dogs, inflamed and maintained the passionate enmity of the strikers. In June 1992, an experienced federal mediation officer was appointed to assist the parties. However, attempts at mediating a resolution of the dispute in June and July were unsuccessful.

     X.After it had studied reports and videos of the incidents of violence which occurred between June and September 1992, the appellant decided to terminate the employment of approximately 42 employees for their activities on the picket line. The number of dismissed employees eventually rose to 49. Most of the alleged misconduct occurred on June 14, 1992 when there was a brawl at the mine site. Some 151 charges were laid as a result of that day's events. Yet by November 2, 1993 only eight convictions had been entered, 16 matters remained pending and 127 of the charges had been either stayed, or withdrawn, or the accused persons had been acquitted or had been discharged at the preliminary inquiry.

     XI.The appellant took the position that it would not consider a process whereby the dismissed employees could be returned to work, nor was it willing to accept the inclusion of any form of a grievance arbitration clause for these workers in the new collective agreement. As a result, the issue of the dismissed employees became the greatest obstacle to the collective bargaining.

     XII.On September 18, 1992, there was an explosion in the mine and nine workers were killed. This act stretched to the limit the sorely tried patience of the people of Yellowknife. The far-reaching effects of the dispute, which extended well beyond just the parties involved, must be understood in the context of the community. Yellowknife, a relatively isolated town, has a population of roughly 15,000. Some of the employment in the area is transient. Yet, there exists a core of residents who have deep roots in the community. Mining comprises a very significant part of the industry and economy of the area and the miners and their families tend to form a close knit social group. The Mayor of Yellowknife, Pat McMahon, described her community as "a community of neighbourhoods". A professor, Dr. Nightingale, who prepared a report on the dispute, concluded that "[m]inor events in the community are felt by many; significant events, such as the strike at Royal Oak touch the lives of everyone". He further observed that the hostile climate which permeated the situation was such that "beatings, murders, death threats and bomb threats have ruptured the life of the mine and the community". The severity of the dispute's impact on the community ultimately led the Mayor to write to the then Prime Minister, requesting her to do whatever it would take to get the dispute settled.

     XIII.Following the explosion a striking member of the bargaining unit was charged and convicted of murder. Approximately a week after the explosion, the Minister of Human Resources and Labour suggested that the parties agree to a process of voluntary binding arbitration as a way of resolving the dispute. Despite all the violence and tragedy, the parties remained intransigent and rejected this suggestion. Accordingly, on September 30, 1992, the Minister appointed two special mediators, Messrs. Ready and Munroe, to inquire into the labour dispute and assist the parties in negotiating a settlement of the dispute and the renewal of the collective agreement. The special mediators met with representatives of the parties and, on October 30, 1992, they submitted an interim report to the Minister and the parties.

     XIV.On November 25, 1992, these very experienced special mediators submitted a second interim report, identifying six special circumstances which made this the most difficult labour dispute they had ever witnessed. The Union accepted the report and the recommendations of the mediators, but the appellant rejected it. The next strategy adopted by the Minister was to appoint, on December 22, 1992, Messrs. Ready and Munroe as an Industrial Inquiry Commission, pursuant to s. 108  of the Canada Labour Code , R.S.C., 1985, c. L-2 .

     XV.Meanwhile, an employee association (the "GMEA"), composed of replacement workers and a small number of members of the respondent Union who had crossed the picket line, had begun an organizing effort in an attempt to displace the respondent Union. On January 11, 1993, the GMEA filed an application for certification with the Canada Labour Relations Board to replace the respondent as the certified bargaining agent. On January 29 and 30, 1993, the Industrial Inquiry Commission held formal hearings. The appellant refused to advance a bargaining position until the Board issued its determination of the employee certification application. Accordingly, the bargaining process led by the Industrial Inquiry Commission was adjourned from February 24, 1993 until May 14, 1993. On May 5, 1993, the Board dismissed the application for certification: 92 di 1. The GMEA later filed a second application for certification, but it too was rejected by the Board on June 30, 1993. On October 26, 1993 the Board issued a third decision explaining that the GMEA's certification application was rejected on the basis that the Board found the association to be employer dominated within the meaning of s. 25  of the Canada Labour Code : 93 di 14. The repeated attempts to have GMEA certified delayed the collective bargaining process and must have further aggravated the rancorous situation.

     XVI.On May 25, 1993, with the dispute still continuing, the respondent Union filed a complaint against the appellant pursuant to s. 50 (a) of the Canada Labour Code , alleging that the appellant had failed to bargain in good faith and to make every reasonable effort to enter into a collective agreement. While the complaint was pending, the Industrial Inquiry Commissioners proposed to the parties a process of binding recommendation to facilitate the resolution of the labour dispute. While the Union agreed to the process, the appellant took the position that the only matter it would agree to submit to binding recommendation was the duration of the collective agreement which it hoped would be for five to seven years or for the balance of the life of the mine.

     XVII.As a result of the appellant's rejection of the Industrial Inquiry process the Commissioners twice requested the appellant to provide a detailed written statement of its current position on all outstanding issues. The Commissioners indicated that without some submission or position put forward by the appellant they could go no further and that a final report would be forthcoming. The appellant refused to provide the requested statement or submission. As a result, on September 13, 1993, the Industrial Inquiry Commissioners issued their final report to the Minister and the parties. It included comprehensive recommendations for the resolution of the dispute. On September 28, 1993, the Union notified the Minister that it accepted the final report and recommendations. However, the appellant rejected it.

     XVIII.On November 11, 1993, the Canada Labour Relations Board found that the appellant had failed to bargain in good faith as required by s. 50 of the Code and therefore, allowed the Union's complaint. This marked the fifth decision of the Board arising from the dispute. As a remedy, the Board directed that the appellant table an offer based on the tentative agreement which the appellant had offered on April 18, 1992, excluding the four issues on which the appellant had changed its position and the issue as to the term of the agreement. As well, the Board added a back-to-work protocol encompassing a standard grievance arbitration procedure for the dismissed employees. With respect to the unresolved issues the parties were given an additional 30 days to bargain with the aim of resolving the issues, following which there would be mediation to finality. The Board ordered the appellant to offer the collective agreement for a term of three years.

     XIX.The labour dispute ended when the collective agreement tabled by the appellant was ratified by the Union's membership. In December 1993, the locked out and striking employees, except those who had been dismissed, were recalled to work at the mine site. The grievance arbitration process for the dismissed employees commenced in January 1994 and lasted five months. The result of the hearing was that 44 employees were reinstated and/or awarded severance pay, or were simply awarded severance pay, only three dismissals were upheld and two cases were adjourned indefinitely.

     XX.On March 24, 1994, the Federal Court of Appeal dismissed the appellant's application for judicial review of the decision of the Canada Labour Relations Board: (1994), 167 N.R. 234, [1994] N.W.T.R. 179. The appellant brought this appeal from that decision.

     II. Decisions Below

     Canada Labour Relations Board (1993), 93 di 21

     XXI.After eight days of evidence, the panel of the Board hearing the matter unanimously concluded that the employer had failed to fulfil its obligation required by s. 50  of the Canada Labour Code  in three ways. Firstly, the appellant, by refusing to agree to any provision for the arbitration of questions arising from the discharge of the 45 employees, and the refusal to permit them to return to work under any circumstances, placed an improper precondition on bargaining. The Board found that the appellant's position on this issue had "blocked bargaining completely" (p. 27). Secondly, the appellant had breached the duty to bargain in good faith by demanding a probationary clause for returning employees. The Board found that this demand was contrary to public policy and offended established labour principles. Finally, the appellant's refusal to negotiate with the respondent Union pending the results of the GMEA certification application was also found to be unlawful and that it had delayed collective bargaining between the parties. The Board chose to intervene on the first violation only. The members concluded (at p. 28) that:

     One of the consequences of the parties' failures to comply with section 50 is that no collective agreement has been reached, where one could have been reached, and in our view would have been reached were it not for those failures, and that consequence is, in the instant case, one that is adverse to the fulfilment of the objectives of the Code .

     XXII.The Board found that the usual procedure following the dismissal of employees for misconduct during a strike is to provide a procedure in the new collective agreement for determining the claims that the dismissals were not for just cause. The Board determined that, by refusing even to negotiate on this important issue, the appellant had placed "an improper precondition on the resumption of bargaining" (p. 24). This constituted a failure to bargain in good faith.
XXIII.The Board noted that the appellant's concern for the safety of the other employees, if the dismissed employees were to return to work, was a "sincerely and deeply held" position. Nevertheless, the Board decided that it was inappropriate, in the collective bargaining context, for the appellant to be both accuser and judge of the dismissed employees' claims. Instead, a proper grievance arbitration process was required.

     XXIV.The Board noted that the Union, too, had been guilty of bad faith bargaining, but found that it was not necessary to deal with this, as no complaint had been brought by the appellant against the Union. The Board, in considering the issue of remedy and its powers under s. 99(2)  of the Code , acknowledged that it should be careful to limit its intervention in the parties' negotiations. However, in this case, the Board decided that to issue the usual remedy of a cease and desist order, or a direction to the parties to bargain, would be "unrealistic and even a cruel waste of time" (p. 28). It put forward the position in this way (at p. 29):

     Given that these parties have exhausted all possible sources of assistance -- conciliation, mediation, ministerial intervention and an industrial inquiry commission, and given the damage to the community which their intransigence has caused, we consider that it would be wrong to prolong this agony further.

     XXV.The Board will normally order the company to present to the Union, for ratification, an offer similar to its "last offer" from which any improper or illegal demands are removed. In this case, no complete last offer by the parties could be clearly identified. The main component of the remedial order which the Board issued was that the appellant table, with the respondent Union as its formal offer of a collective agreement, the tentative agreement, which constituted the last offer which it made to the Union. Four items of the tentative agreement were excepted. The Union had initially rejected the tentative agreement of April 18, 1992, but had since accepted it. The Union was to be given an opportunity to ratify this offer. Failing ratification, the parties were directed to meet and make every reasonable effort to enter into a collective agreement.

     XXVI.The four items excluded from the agreement, dealt with transportation, statutory holidays, an aspect of wages and safety inspections. They were to be the subject of negotiations between the parties for 30 days. Failing agreement on these items, the matters would be referred to the special mediators for mediation to finality. Two other items included in the formal offer were a three-year duration clause for the collective agreement with a provision to facilitate the establishment of a successor agreement; and a back-to-work protocol, with a process for expedited grievance arbitration for the dismissed employees.

     Federal Court of Appeal (1994), 167 N.R. 234

     XXVII.The Federal Court of Appeal dismissed the appellant's application for judicial review of the decision of the Canada Labour Relations Board. Hugessen J.A., writing on behalf of the court, considered the manner in which the Board arrived at the remedial order. He noted that the Board took into account the long and bitter history of the negotiations, and gave careful consideration to the report and recommendations of the Industrial Inquiry Commission. Hugessen J.A. also observed that this panel of Board members "had acquired an intimate knowledge of the course of negotiations between the parties" (p. 237) through the four other decisions it had already rendered during the dispute. Hugessen J.A. noted further that the Board did not lightly approach its task of fashioning an appropriate remedy; rather, it paid particular attention to the powers ascribed to it under s. 99 for addressing violations of the Code . Hugessen J.A. then reviewed the particulars of the Board's final order.

     XXVIII.With respect to the Board's finding that the appellant had breached the duty to bargain in good faith and make every reasonable effort to reach a collective agreement Hugessen J.A. concluded that the Board's conclusions were not so patently unreasonable as to amount to an excess of jurisdiction. He reasoned that a finding of bad faith "necessarily involves drawing inferences from conduct and interpreting words and gestures as having a meaning and a purpose different from what would appear on the surface" (p. 237). He added that no party will admit that it bargained in bad faith. Therefore, the Board, which heard the evidence, must be left to decipher the true intentions and state of mind of the parties. He therefore refused to interfere with the Board's findings in this regard.

     XXIX.As far as the remedy granted by the Board was concerned, Hugessen J.A. was satisfied that there was a rational connection between the consequence of the breach, namely, the failure to reach an agreement, and the remedy provided by the order. He deferred to the Board's expertise and experience in fashioning remedies and held that the specific order imposed by the Board was a matter falling within the tribunal's discretion. Hugessen J.A. was sensitive to the broad nature of the Board's order, and observed that (at p. 237):

     Certainly, there can be no doubt that the Board was extremely conscious that its intervention was at the extreme limits of the permissible and that it was only because of the unique, and indeed, tragic history of the relations between the parties that it was prepared to place such serious restraints upon their ability to bargain freely.

     XXX.He noted that, ultimately, the Board's order resulted in the appellant's having to table an agreement based on the recommendations of the Industrial Inquiry Commission. The principal reason for the appellant's rejecting the recommendations of the Commission was the presence of an arbitration clause which could be utilized by the dismissed employees. This was the very basis on which the appellant had breached the duty to bargain in good faith. Therefore, an agreement which was substantially agreeable to both parties, but included a term which eliminated the bargaining obstacle, was a remedy with a clear linear connection to the breach and its consequences.

     III. Relevant Statutory Provisions

     Canada Labour Code , R.S.C., 1985, c. L-2 

     [Preamble]

     WHEREAS there is a long tradition in Canada of labour legislation and policy designed for the promotion of the common well-being through the encouragement of free collective bargaining and the constructive settlement of disputes;

     AND WHEREAS Canadian workers, trade unions and employers recognize and support freedom of association and free collective bargaining as the bases of effective industrial relations for the determination of good working conditions and sound labour-management relations;

     . . .

     AND WHEREAS the Parliament of Canada desires to continue and extend its support to labour and management in their cooperative efforts to develop good relations and constructive collective bargaining practices, and deems the development of good industrial relations to be in the best interests of Canada in ensuring a just share of the fruits of progress to all;

     22. (1) Subject to this Part, every order or decision of the Board is final and shall not be questioned or reviewed in any court, except in accordance with the Federal Court Act on the grounds referred to in paragraph 18.1(4)(a), (b) or (e) of that Act.

     (2) Except as permitted by subsection (1), no order, decision or proceeding of the Board made or carried on under or purporting to be made or carried on under this Part shall

     (a) be questioned, reviewed, prohibited or restrained, or

     (b) be made the subject of any proceedings in or any process of any court, whether by way of injunction, certiorari, prohibition, quo warranto or otherwise,

     on any ground, including the ground that the order, decision or proceeding is beyond the jurisdiction of the Board to make or carry on or that, in the course of any proceeding, the Board for any reason exceeded or lost its jurisdiction.

     50. Where notice to bargain collectively has been given under this Part,

     (a) the bargaining agent and the employer, without delay, but in any case within twenty days after the notice was given unless the parties otherwise agree, shall

     (i) meet and commence, or cause authorized representatives on their behalf to meet and commence, to bargain collectively in good faith, and

     (ii) make every reasonable effort to enter into a collective agreement;

     97. (1) Subject to subsections (2) to (5), any person or organization may make a complaint in writing to the Board that
(a) an employer, a person acting on behalf of an employer, a trade union, a person acting on behalf of a trade union or an employee has contravened or failed to comply with . . . section . . . 50 . . . .

     98. (1) Subject to subsection (3), on receipt of a complaint made under section 97, the Board may assist the parties to the complaint to settle the complaint and shall, where it decides not to so assist the parties or the complaint is not settled within a period considered by the Board to be reasonable in the circumstances, hear and determine the complaint.

     99. (1) Where, under section 98, the Board determines that a party to a complaint has contravened or failed to comply with subsection 24(4) or 34(6) or section 37, 50, 69, 94, 95 or 96, the Board may, by order, require the party to comply with or cease contravening that subsection or section . . . .

     (2) For the purpose of ensuring the fulfilment of the objectives of this Part, the Board may, in respect of any contravention of or failure to comply with any provision to which subsection (1) applies and in addition to or in lieu of any other order that the Board is authorized to make under that subsection, by order, require an employer or a trade union to do or refrain from doing any thing that it is equitable to require the employer or trade union to do or refrain from doing in order to remedy or counteract any consequence of the contravention or failure to comply that is adverse to the fulfilment of those objectives.

     IV. Analysis

     XXXI.This appeal raises two key issues:

1     Was the respondent Board's finding that the appellant had engaged in bad faith bargaining patently unreasonable?

2     Did the respondent Board exceed its jurisdiction in respect of its remedial order?

     A. The Jurisdiction of the Canada Labour Relations Board
(1) Standard of Review on the Finding of Bad Faith Bargaining

     XXXII.What should be the standard of review of the finding of the Canada Labour Relations Board that the appellant failed to bargain in good faith? There are several grounds which can be used as the basis for concluding that the decision of the Board on this issue need not be correct. Rather, it must be upheld, unless it can be found to be patently unreasonable. This is properly a very deferential standard. See Canada (Attorney General) v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941. The first and primary indication that this is the requisite degree of deference is given by the provisions of the Canada Labour Code . Section 50 (a) of the Code  provides that the parties have a duty to bargain in good faith and to make a reasonable effort to enter into a collective agreement. Section 97(1) of the same Code  provides that either party may make a complaint to the Board that the other parties failed to comply with the requirement to bargain in good faith. Section 98(1) provides that the Board may assist the parties to settle the complaint or hear and determine the complaint. Lastly, s. 22(1)  of the Code  provides that the decision of the Board is final and is not to be questioned or reviewed in any court subject to the exceptions set out in s. 18.1(4)(a), (b) or (e) of the Federal Court Act which are not applicable in this case.

     XXXIII.It is clear then that the question as to whether or not the parties bargained in good faith is one which falls squarely within the jurisdiction of the Board. This is a matter that has been assigned to the Board by Parliament in its enabling legislation. This would be sufficient in itself to determine that the Board's decision should not be the subject of court interference unless it is patently unreasonable.

     XXXIV.Yet, there are other factors which also point to this degree of deference being appropriate. The expertise and experience of the members of the Board in the difficult and sensitive field of labour relations demonstrates that the Board is best suited to resolve this very issue. Moreover, whether or not a party has bargained in good faith is primarily a question of fact which the Board is well qualified to determine. See for example the reasons of Dickson J. (as he then was) dissenting, but not on this point, in Canadian Union of Public Employees v. Labour Relations Board (Nova Scotia), [1983] 2 S.C.R. 311 (the "Digby School Board" case), at p. 342.

     XXXV.Further, the importance and significance that should be attached to the Board's expertise has been recognized by Parliament in the wording of the strong privative clause set out in s. 22. Ever since the decision was rendered in Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227, it has been recognized that the existence of a privative clause serves as a clear indication to the courts that decisions of a labour relations board made within its jurisdiction are protected and sheltered from strict judicial scrutiny. A consideration of these factors leads inexorably to the conclusion that the decision of the Board on this issue cannot be subject to judicial review unless it is patently unreasonable.

     XXXVI.In summary, there are a number of factors which lead to the conclusion that the Board's decision on this issue must not be interfered with unless it is patently unreasonable. These factors include (a) the presence of a clear and strongly worded privative clause; (b) the provisions of the Canada Labour Code  which demonstrate that the decision is clearly one which falls within the jurisdiction of the Board; (c) the decision that there was a lack of good faith is essentially a finding of fact which should be left to the Board; (d) the Board has expertise and experience in dealing with precisely this type of question; and (e) the courts have very properly shown a high degree of deference to the decisions of labour relations boards.

     (2)Is The Board's Finding of Lack of Good Faith Bargaining by the Appellant Patently Unreasonable?

     XXXVII.The Board found that the appellant had breached the duty to bargain in good faith in three ways. First, the appellant refused to bargain with the respondent Union, the exclusive bargaining agent of the employees, pending the outcome of the competing employee association, GMEA's, certification application. It is a basic principle of any labour code that the employer is obliged to recognize the certified union and bargain exclusively with that association. The GMEA was refused certification twice, and ultimately found, by the Board, to be employer dominated within the meaning of s. 25  of the Code . It could thus be readily inferred that the appellant was attempting to circumvent the bargaining agent which the employees had chosen to represent their interests. The appellant would obviously assume that if the GMEA were certified it would be easier for it to obtain important concessions in the negotiation of a new agreement. This course of action was clearly a violation of the duty to bargain in good faith.

     XXXVIII.The second breach found by the Board was the appellant's demand for a probationary clause for all returning employees. The employees had engaged in a lawful strike. They had every right to do so. For the appellant to try to penalize those who had participated in a lawful union activity undermines the operation and basic principles of the labour relations statute. Section 94(3)  of the Canada Labour Code  specifically provides that:

     94. . . .

     (3) No employer or person acting on behalf of an employer shall

     (a) refuse to employ or to continue to employ or suspend, transfer, lay off or otherwise discriminate against any person with respect to employment, pay or any other term or condition of employment or intimidate, threaten or otherwise discipline any person, because the person

     . . .

     (vi) has participated in a strike that is not prohibited by this Part or exercised any right under this Part; [Emphasis added.]

     XXXIX.This position taken by the appellant was as well a breach of the duty to bargain in good faith. However the Board chose not to intervene on these two issues since bargaining did continue after the GMEA certification application was rejected, and the appellant ultimately withdrew its proposal for a back-to-work protocol for all returning employees.

     XL.The third violation found by the Board was the most serious. It concluded that the appellant demonstrated a failure to bargain in good faith when it refused to agree to a provision for any type of arbitration or consideration of questions arising from its discharge of the 49 employees. The Board found that this outright refusal to discuss the issue completely blocked the bargaining process. Both the Industrial Inquiry Commission and the Board noted that it must have been obvious to the appellant that no union could accept a collective agreement which lacked a grievance arbitration clause on this issue. Although the Board based its finding on this last violation, I would note that the cumulative effect of all the breaches could properly have been considered by it.

     XLI.Every federal and provincial labour relations code contains a section comparable to s. 50  of the Canada Labour Code  which requires the parties to meet and bargain in good faith. In order for collective bargaining to be a fair and effective process it is essential that both the employer and the union negotiate within the framework of the rules established by the relevant statutory labour code. In the context of the duty to bargain in good faith a commitment is required from each side to honestly strive to find a middle ground between their opposing interests. Both parties must approach the bargaining table with good intentions.

     XLII.Section 50 (a) of the Canada Labour Code  has two facets. Not only must the parties bargain in good faith, but they must also make every reasonable effort to enter into a collective agreement. Both components are equally important, and a party will be found in breach of the section if it does not comply with both of them. There may well be exceptions but as a general rule the duty to enter into bargaining in good faith must be measured on a subjective standard, while the making of a reasonable effort to bargain should be measured by an objective standard which can be ascertained by a board looking to comparable standards and practices within the particular industry. It is this latter part of the duty which prevents a party from hiding behind an assertion that it is sincerely trying to reach an agreement when, viewed objectively, it can be seen that its proposals are so far from the accepted norms of the industry that they must be unreasonable.

     XLIII.Section 50(a)(ii) requires the parties to "make every reasonable effort to enter into a collective agreement". It follows that, putting forward a proposal, or taking a rigid stance which it should be known the other party could never accept must necessarily constitute a breach of that requirement. Since the concept of "reasonable effort" must be assessed objectively, the Board must by reference to the industry determine whether other employers have refused to incorporate a standard grievance arbitration clause into a collective agreement. If it is common knowledge that the absence of such a clause would be unacceptable to any union, then a party such as the appellant, in our case, cannot be said to be bargaining in good faith. On this it is significant that the special mediators made the following observation in their second interim report:

     . . . the employer must restrain itself from taking bargaining positions which it surely must know would be unacceptable to virtually any organization of workers. It is one thing to say that circumstances have changed such that the content of the tentative agreement is no longer good enough. It is another to construct unmanageable bargaining gaps.

     B. The Appellant's Refusal to Negotiate About the Dismissed Employees
XLIV.In some cases a party's behaviour may be so egregious that it can be reasonably inferred that there is an unwillingness to make a real effort to reach an agreement. In those circumstances, while a party may express a desire to reach a collective agreement their actions may clearly indicate that they do not wish or intend to reach an agreement. A refusal to include such basic and standard terms in an agreement as a requirement of a just cause for dismissal clause, or a refusal to negotiate about pensions, or as in this case, a refusal to consider a grievance arbitration clause, leads to the inference that despite any "sincerely and deeply held" beliefs the party claims to have, by taking a rigid stance on such a widely accepted condition, it becomes apparent that the party (here the employer) has no real intention of reaching an agreement. In other words, the employer is breaching the duty to "make every reasonable effort to enter into a collective agreement".

     XLV.If a party proposes a clause in a collective agreement, or conversely, refuses even to discuss a basic or standard term, that is acceptable and included in other collective agreements in comparable industries throughout the country, it is appropriate for a labour board to find that the party is not making a "reasonable effort to enter into a collective agreement". If reasonable parties have agreed to the inclusion of a grievance arbitration clause in their collective agreement, then a refusal to negotiate such a clause cannot be reasonable. The grounds on which an employer may dismiss an employee is of fundamental importance for any association of employees. For an employer to refuse an employee a grievance procedure or some form of due process, by which the employee can challenge his or her dismissal on the ground that it was not for just cause, is to deny that employee a fundamental right. In those circumstances it would be reasonable for a board to infer that no reasonable union would accept a collective agreement which lacked a grievance arbitration clause and that the employer's failure to negotiate the clause indicated a lack of good faith bargaining.

     XLVI.To echo the finding of the Canada Labour Relations Board in Iberia Airlines of Spain (1990), 80 di 165, at p. 203, the appellant's bargaining position, in the case at bar, was "inflexible and intransigent to the point of endangering the very existence of collective bargaining". The Board, in Iberia Airlines, stated further (at p. 203) that:

     The employer was not engaged in hard bargaining with the aim of protecting its legitimate interests within the framework of collective and negotiated labour relations. The employer was engaged in surface bargaining. At the formal level, it adopted an approach that was at first glance above reproach, as the usual motions are. On closer view, this approach was unlawful, unjustifiable and contrary to what is permitted in good faith bargaining. [Emphasis in original.]

     In my view, this conclusion is correct and applicable to the case under consideration.

     XLVII.The unreasonableness of the appellant's position, in this case, can be objectively measured by looking at other cases involving similar fact situations. In Rogers Cable T.V. (British Columbia) Ltd. (1987), 69 di 17, the union claimed that the employer had unlawfully disciplined some of its members who were employed by the company, by suspending them from employment for acts they were alleged to have committed on the picket line while they were participating in a lawful strike. The Board dismissed the union's complaint finding that once a strike or lock-out is over and when the full employer-employee relationship is restored there is nothing in the Code  preventing an employer from using its restored disciplinary powers to deal with acts of employees that occurred during the work stoppage. However, contingent on this conclusion was the Board's finding that the employer had no improper motive arising from the employees' participation in lawful union activities. The Board stated (at p. 38) that:

     By using the free collective bargaining system to settle the return-to-work arrangements and by assuring the rights of the employees to grieve and arbitrate any penalties assessed [against] them, the employer has erased any hint of anti-union animus. [Emphasis added.]

     XLVIII.The same cannot be said for the appellant in the case at bar. The more appropriate approach would have been for the appellant to agree to the inclusion in the new collective agreement of some form of a grievance arbitration clause for the dismissed employees. It is certainly significant that after the Board decision, once a grievance arbitration process for the dismissed employees had concluded, the process resulted in 44 of the 49 employees being reinstated and/or awarded severance pay.

     XLIX.In summary, on the issue of the Board's finding that the appellant failed to bargain in good faith, I am of the view that this precise issue was by the provisions of the Canada Labour Code  granted to the Board to decide, and that the courts should not set aside the Board's decision unless it was patently unreasonable. There is overwhelming support for the Board's finding that the appellant breached its duty to bargain in good faith by imposing an unreasonable condition to the collective bargaining process. Accordingly, the decision was clearly not patently unreasonable and the Federal Court of Appeal, recognizing this, properly deferred to the Board's finding. It is now necessary to consider the more complex issue of the Board's jurisdiction to make the remedial order.

     C. The Board's Jurisdiction To Make Remedial Orders

     L.The appellant argued that the question, as to the appropriate remedy for the Canada Labour Relations Board to have imposed in this case, involves the jurisdictional limits of the powers granted to the Board and that, accordingly, the standard by which this Court must review the order is one of correctness. I cannot agree. There is an abundance of case law which cautions courts against too easily identifying a statutory provision as jurisdictional. The words of Dickson J. in New Brunswick Liquor Corp., supra, at p. 233, provide the clearest example of the recognition of this principle:

     The question of what is and is not jurisdictional is often very difficult to determine. The courts, in my view, should not be alert to brand as jurisdictional, and therefore subject to broader curial review, that which may be doubtfully so.

     LI.Recent support for this view is found in Canadian Broadcasting Corp. v. Canada (Labour Relations Board), [1995] 1 S.C.R. 157, at p. 181, where Iacobucci J. observed that:

     . . . when dealing with a tribunal as specialized as the Canada Labour Relations Board, inherent in whose functioning is the need to resolve disputes quickly and with finality, courts should be reluctant to characterize a provision as jurisdictional unless it is clear that it should be so labelled. . . .

     LII.In Eastern Provincial Airways Ltd. v. Canada Labour Relations Board (1984), 65 N.R. 81, the Federal Court of Appeal, in considering whether the Board exceeded its remedial authority under the Code  pointed to the decisions of this Court in Teamsters Union, Local 938 v. Massicotte, [1982] 1 S.C.R. 710, and Canada Labour Relations Board v. Halifax Longshoremen's Association, [1983] 1 S.C.R. 245, which held that courts should normally show deference for the manner in which the Board chooses to exercise the broad powers conferred by s. 189 (now s. 99(2)). Pratte J.A. continued at p. 84: ". . . in other words, as I interpret those two decisions, it is only in the clearest of cases that the court should set aside a decision of the Board on the ground that it is not authorized by section 189". In Teamsters Union, at p. 724, Laskin C.J. had observed that:

     . . . mere doubt as to correctness of a labour board interpretation of its statutory power is no ground for finding jurisdictional error, especially when the labour board is exercising powers confided to it in wide terms to resolve competing contentions.

     LIII.The basis for this approach is the concept that administrative tribunals are set up to replace courts in areas where specific expertise and experience are required. It has been recognized that a labour board is a specialized tribunal which administers a comprehensive statute regulating the complex field of labour relations. The courts are expected to show deference to the expert knowledge and experience acquired by the board through its involvement and participation in developing the collective bargaining regime established by labour codes. If courts too easily characterize powers accorded to the board as provisions which limit jurisdiction then courts effectively usurp the role which Parliament, after careful consideration, accorded to the labour tribunal.

     LIV.The case of U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048, fashioned a functional and pragmatic approach to ascertaining whether Parliament intended that the scope of remedial orders included within s. 99(2)  of the Canada Labour Code  should be left to the Board or whether the section was a provision intended to limit the Board's jurisdiction. To resolve the question Beetz J. for the Court set out the following factors which should be taken into consideration: (a) the wording of the enactment conferring jurisdiction on the tribunal; (b) the purpose of the statute creating the tribunal; (c) the reason for the tribunal's existence; (d) the area of expertise of the tribunal's members; and (e) the nature of the problem before the tribunal. A consideration of these factors makes it readily apparent that deference should be accorded by the courts to remedial orders made by the Board.

     LV.In examining the legislation itself it is apparent that Parliament has clearly given the Canada Labour Relations Board a wide remedial role. The wording of s. 99(2) does not place precise limits on the Board's jurisdiction. In fact, the Board may order anything that is "equitable" for a party to do or refrain from doing in order to fulfil the objectives of the Code . In my view, this was done to give the Board the flexibility necessary to address the ever changing circumstances that present themselves in the wide variety of disputes which come before it in the sensitive field of labour relations. The aims of the Canada Labour Code  include the constructive resolution of labour disputes for the benefit of the parties and the public. The expert and experienced labour boards were set up to achieve these goals. The problem before the Board was one which Parliament intended it to resolve.

     LVI.The requirement that the Board's order must remedy or counteract any consequence of a contravention or failure to comply with the Code  imposes the condition that the Board's remedy must be rationally connected or related to the breach and its consequences. This requirement is also consistent with the test established in National Bank of Canada v. Retail Clerks' International Union, [1984] 1 S.C.R. 269, which required that there be a relation between the breach, its consequences and the remedy. Section 99 also provides that the Board may remedy breaches which are adverse to the fulfilment of the objectives of the Code . This empowers the Board to fashion remedies which are consistent with the Code 's policy considerations. Therefore, if the Board imposes a remedy which is not rationally connected to the breach and its consequences or is inconsistent with the policy objectives of the statute then it will be exceeding its jurisdiction. Its decision will in those circumstances be patently unreasonable.

     LVII.Labour boards have a high degree of expertise and experience in a dynamic, complex and sensitive field. Courts generally cannot equal that expertise and experience in this difficult and constantly changing area. Recognizing this, courts in judicial review have deferred to the findings of labour boards who are usually in the best position to interpret and apply their enabling legislation. The comments of McIntyre J. in this regard in Reference re Public Service Employee Relations Act (Alta.), [1987] 1 S.C.R. 313, at pp. 416-17, are apposite and well worth repeating:

     Our experience with labour relations has shown that the courts, as a general rule, are not the best arbiters of disputes which arise from time to time. Labour legislation has recognized this fact and has created other procedures and other tribunals for the more expeditious and efficient settlement of labour problems. Problems arising in labour matters frequently involve more than legal questions. Political, social, and economic questions frequently dominate in labour disputes. The legislative creation of conciliation officers, conciliation boards, labour relations boards, and labour dispute-resolving tribunals, has gone far in meeting needs not attainable in the court system. The nature of labour disputes and grievances and the other problems arising in labour matters dictates that special procedures outside the ordinary court system must be employed in their resolution. Judges do not have the expert knowledge always helpful and sometimes necessary in the resolution of labour problems. The courts will generally not be furnished in labour cases, if past experience is to guide us, with an evidentiary base upon which full resolution of the dispute may be made. In my view, it is scarcely contested that specialized labour tribunals are better suited than courts for resolving labour problems, except for the resolution of purely legal questions.

     LVIII.In my view remedies are a matter which fall directly within the specialized competence of labour boards. It is this aspect perhaps more than any other function which requires the board to call upon its expert knowledge and wide experience to fashion an appropriate remedy. No other body will have the requisite skill and experience in labour relations to construct a fair and workable solution which will enable the parties to arrive at a final resolution of their dispute. Imposing remedies comprises a significant portion of the Board's duties. Section 99(2)  of the Canada Labour Code  recognizes the importance of this role and accordingly, gives the Board wide latitude and discretion to fashion "equitable" remedies which it feels will best address the problem and resolve the dispute. By providing that the Board may fashion equitable remedies Parliament has given a clear indication that the Board has been entrusted with wide remedial powers. Furthermore, a broad privative clause in s. 22(1) provides that, not only are the Board's decisions final, but so too are its orders. This provision lends support to the position that the court should defer to the remedial orders of the Board which are made within its jurisdiction. That is to say there should be no judicial interference with remedial orders of the Board unless they are patently unreasonable.

     LIX.The Canada Labour Relations Board has been granted the power to impose remedies by s. 99(2)  of the Code . Thus, the question as to whether the Board may or may not impose remedies on the parties is jurisdictional in nature. If the Board concluded that it could not impose a remedy to counteract a breach by one of the parties, the aggrieved party would have the right to argue before a reviewing court that the Board had incorrectly interpreted its enabling statute. The court, in addressing this jurisdictional question, would then be entitled to review the Board's decision, on a correctness standard, to determine whether in fact the Board did have the power it claimed to lack. However, once it has been established by the provisions of the empowering legislation that the Board does, in fact, have the jurisdiction to order certain remedies, the question of which of these remedies the Board chooses to impose in any given situation is a question within the Board's jurisdiction. Since the Board's order falls within its jurisdiction, it should be assessed on a patently unreasonable basis.

     LX.To require "correctness" would require the substitution of the courts view of what remedy was required for that of the Board. It would mean that the Boards experience and expertise were set at nil by the courts. The scheme of the Canada Labour Code  including the privative clause would be rendered meaningless. It must be remembered that applying a standard of patent unreasonableness does not give a board free rein to impose any remedy it wishes. For example, if a court determined that the remedy imposed by the Board bore no relation to the breach found, or was purely punitive in nature, or was adverse to the policy objectives of the Canada Labour Code  the order could be properly found to be patently unreasonable. However, none of those issues arise in the remedial order to be considered in this case.

     D. The Remedial Order in This Case

     LXI.In my view, the remedy directed by the Board was not patently unreasonable, rather it was eminently sensible and appropriate in the circumstances presented by this case. A judicial review of the order must take into consideration both the complex factual background, and the prior involvement of the Board in this dispute. In this case, the factual background presented to the Board was such that it cried aloud for the imposition of a remedial order.

     LXII.The unparalleled severity of this labour dispute was well articulated by Dr. Nightingale, a professor at Queen's University who was commissioned by the appellant to study the dispute and advise it as to whether to accept the recommendations of the mediators. He described the course of the dispute in the following terms:

     The complexities of this dispute -- including failed conciliation, failed mediation, the rejection of a tentative agreement, a representational dispute within the union, a decertification drive while the strike continues and the continued operation of the mine by replacement workers -- are unusual enough. Add to these, the murder of 9 workers, an ongoing RCMP investigation, intimidation and death threats directed toward miners and their families, violence, including beatings which have spilled over into the community and the Mayor of Yellowknife discussing the possible need for martial law and we have a tragedy without precedent in Canadian labour history. The Black Tuesday clash in the Souris, Saskatchewan coal fields in 1931, the 1969 Inco strike, the 1990 Placer Dome strike and the more recent Brunswick Mining and Smelting strike pale in comparison.

     LXIII.In fashioning an order the Board was obliged to take into account the long violent and bitter history of the dispute. Moreover, the facts in this case are so extraordinary that, if it were necessary, the Board was justified in going to the limits of its powers in imposing a remedy. The appellant's suggestion, that the Board should have rectified the breach by simply ordering the appellant to cease taking such an intractable position on the issue of the dismissed employees and then requiring the parties to recommence bargaining, is hopelessly inadequate. In light of the long and turbulent history of the parties' attempted negotiations the typical "cease and desist" order would have been, as the Board described it, "unrealistic and even a cruel waste of time" (p. 28). It was clear that the parties would never come to an agreement on their own with respect to the issue of the dismissed employees. In fact, the Industrial Inquiry Commissioners concluded in their final report that everyone had to be realistic enough to acknowledge that on some of the matters in dispute, "the parties are not likely ever to come to an agreement on their own". Therefore, taking into account this prediction, the unfortunate bargaining history and the effect of the dispute on the community, the Board was correct in recognizing that a more effective remedy was required.

     LXIV.Section 99(2)  of the Canada Labour Code  gives the Board jurisdiction to require an employer "to do or refrain from doing any thing that it is equitable to require the employer . . . to do or refrain from doing in order to remedy or counteract any consequence of the contravention or failure to comply that is adverse to the fulfilment of [the] objectives" of the Code . (Emphasis added.) The duty of the parties to bargain in good faith and make every reasonable effort to reach an agreement is an important precondition to achieving the larger purposes of the Code . The appellant was found by the Board to have failed to comply with this duty. Accordingly, the Board had authority to remedy the effects of that violation. It is significant that the wording "to do or refrain from doing" bestows broad powers on the Board which enables it to impose both positive and negative duties on the party in breach.

     LXV.The breadth of the remedial section gives a clear indication that it was the intention of Parliament that the Board should be given the necessary flexibility to fashion remedies which will best address the entire spectrum of problems and of factual situations which it must confront. It is noteworthy that the section was amended in 1978. Prior to that date, the Code  allowed the Board to impose only those remedies which were specifically enumerated. Section 189 (now s. 99(2)) was added in 1978. This provision authorizes the Board to make orders based on the principles of equity. The section now gives the Board both the flexibility and the authority to create the innovative remedies which are needed to counteract breaches of the Code and to fulfil its purposes and objectives. The granting of such a broad discretion to the Board demonstrates that Parliament wished the courts to defer to the Board's experience and expertise in making remedial orders so long as they were not patently unreasonable.

     (1) The Appellant's Objections to the Board's Order

     LXVI.The appellant's prime objection to the Board's remedial order is based on the premise that the Board imposed a collective agreement on the parties, and that in so doing, the Board exceeded its remedial jurisdiction. I cannot accept this contention. The Board did not impose a collective agreement. Instead, the Board made its best effort to identify what the appellant's last offer to the Union had been. The tentative agreement offered by the appellant and thus acceptable to the appellant in April 1992 was the last identifiable proposal put forward by the appellant. While the Union had initially rejected this agreement by an overwhelming majority, the membership had subsequently reconsidered the offer and was prepared to accept it. Therefore, the Board used this tentative agreement, drafted by the appellant, on terms which the appellant was obviously willing to accept as the foundation of its order. The Board ordered the appellant to offer this agreement to the Union, at which time the Union could decide whether or not to ratify it. The Board recognized that the appellant had changed its position regarding some aspects of the tentative agreement. On these, the Board directed the parties to bargain for 30 days and if they failed to reach agreement, they were to be subject to binding arbitration.

     LXVII.It cannot be said that the requirement of the Board that the employer tender the tentative agreement subject to the issues to be negotiated constituted the imposition of a collective agreement. A board is ordinarily acting within its remedial authority in ordering a party to present once again its last offer from which any improper or illegal demands have been deleted. As examples of this sensible and customary practice see Eastern Provincial Airways Ltd. (1983), 54 di 172; Brewster Transport Co. (1986), 66 di 1; and Iberia Airlines, supra. In this case the customary requirement was accomplished by the Board's reinvoking the tentative agreement. Similarly, a Board generally acts within its remedial jurisdiction when it imposes upon the parties certain terms and conditions of a collective agreement. These two legitimate remedies cannot be added together in order to contend that they constitute an illegal order. There is nothing to suggest that the two remedies are alternatives to each other. In the usual case, one of these remedies would suffice. However, since other efforts to resolve the dispute had been exhausted, the Board concluded that both facets of the order were needed in order to effect a constructive settlement of the dispute.

     LXVIII.There are four situations in which a remedial order will be considered patently unreasonable: (1) where the remedy is punitive in nature; (2) where the remedy granted infringes the Canadian Charter of Rights and Freedoms ; (3) where there is no rational connection between the breach, its consequences, and the remedy; and (4) where the remedy contradicts the objects and purposes of the Code . The appellant argued that the Board's order, in this case, failed on both the third and fourth of the above prohibited grounds. Namely, that the order failed both the "rational connection" test and the "policy consistency" test respectively.

     (a) Rational Connection

     LXIX.The case of National Bank, supra, held that there must be a relation between the breach, its consequences and the remedy. However, the necessity for a rational connection is evident from the wording of s. 99(2) which requires that the remedy imposed by the Board be designed to counteract any consequence of the contravention or failure to comply found by the Board. In other words, the Board must be concerned about remedying a specific breach of the Code , and in so doing there must be a relationship between the unfair practice which has occurred, its consequences to the bargaining process, and the remedy imposed.

     LXX.In the case at bar, there was a clear causal connection between the breach, its consequences and the remedy imposed by the Board. To begin with, the Board identified the breach as being the appellant's intractable position with respect to a form of due process for the dismissed employees. The consequence of this breach was that bargaining was blocked so completely that no collective agreement could ever be reached. As a result of the impasse the serious damage to the community of Yellowknife continued unabated. The nature, extent and effect of the failure to bargain in good faith may in certain circumstances justify, in itself, the imposition of a remedial order. To be valid, such an order must deal with the effect of the breach and comply with the aims and objects of the Canada Labour Code . Perhaps more often it will be the failure to bargain in good faith coupled with other factors which will justify a remedial order.

     LXXI.Yet a further consequence of the appellant's intractable position was the frustration of the efforts of the Industrial Inquiry Commission to achieve a settlement. The Commission had recommended that the parties reach an agreement similar to the appellant's April 1992 offer (the tentative agreement), and also suggested that in the four unresolved areas where the appellant had changed its position that the parties should continue to negotiate, with the possibility of binding arbitration if the negotiations failed. The Commission also recommended that the fate of the dismissed employees should be determined in the usual way by third party arbitration. While the Union agreed to the Commission's proposals, the appellant rejected them, primarily because it refused to consider any proposal which would result in the dismissed employees returning to work. Were it not for this the appellant would have, in principle, accepted the recommendations. Accordingly, the Board ordered the appellant to table an agreement based on its own tentative agreement and the final report of the Commission, including a grievance arbitration clause. This achieved the result that the parties were put back in the position they would have been in were it not for the appellant's violation; namely, with a collective agreement tabled for the Union's consideration. Therefore, there is a clear relation between the appellant's breach of its duty to bargain in good faith, the consequences of that breach and the remedy imposed by the Board.

     (b) Policy Consistency

     LXXII.The appellant also contended that the Board's order was too extreme and was contrary to the policy underlying the Code . Specifically, the appellant focused on the importance of free collective bargaining and maintained that the Board was obliged to alleviate the obstacle blocking the bargaining process, but then should have sent the parties back to continue to bargain until an agreement was reached. The appellant argued that the Board exceeded its powers by imposing closure on the parties instead of allowing them to arrive at a settlement themselves.

     LXXIII.The preamble in Part I of the Canada Labour Code  sets out its purposes and objectives. These include (a) the promotion of the common well-being; (b) the encouragement of free collective bargaining; (c) the constructive settlement of disputes; (d) freedom of association and free collective bargaining as the bases of effective industrial relations; (e) good working conditions and sound labour-management relations; and (f) good industrial relations which are in the best interests of Canada in ensuring a just share of the fruits of progress to all.

     LXXIV.Section 99(2) provides that the Board is granted remedial authority for the purpose of ensuring the fulfilment of the objectives of the Code . Moreover, the remedies the Board imposes are meant to counteract the consequences of the parties' transgressions which are adverse to the fulfilment of those objectives. Therefore, an integral part of the Board's remedial duty is to strive to accomplish the Code 's purposes. This cannot mean that in all circumstances such emphasis must always be placed on one objective that all the others suffer. The Board is required to balance all the goals of the Canada Labour Code  and fashion an order that, in the context of the particular situation presented gives a carefully balanced consideration to all the important factors outlined in the preamble.
LXXV.The appellant contends that the promotion of free collective bargaining supersedes all the other objectives of the statute and that the Board's remedial order did not respect the principle of free collective bargaining. This position is untenable. It fails to take into consideration all the other factors which made this dispute in the opinion of two very experienced mediators the worst they had known. The impact of the dispute had extended well beyond the company and the Union involved. Therefore, the order had to take into account the very real public interest in resolving the dispute fairly yet expeditiously. The Board's order gave effect to the objectives of promoting the common well-being and encouraging the constructive settlement of disputes. It demonstrated a balanced and carefully considered approach to the particular situation confronting it.

     (2) The Community Interest

     LXXVI.It is essential to understand the impact which this strike had on the community of Yellowknife. This was a factor which the Board of necessity had to consider in fashioning its remedy. The Industrial Inquiry Commission was concerned about the toll the dispute was taking on the people of Yellowknife. In their second interim report, it warned the parties of the effect their intransigence was having on the surrounding community. They put it this way:

     We will be blunt. As a matter of law, the dispute between these parties is essentially private in nature. But as a matter of fact, the public fallout from the dispute has been enormous and, at least in our experience, unprecedented. Both sides owe it to the surrounding community to take a serious and tangible step toward a resolution of this seemingly intractable dispute.

     LXXVII.The Board noted this warning, and in addition it had before it the observations made by Dr. Nightingale in his report, which concluded that the consequences of the strike and ongoing dispute had seriously disrupted the life of the community. Accordingly, the Board realized that it was imperative that it devise a remedy which would not only mend the working relationship at the mine, but also, restore some measure of harmony to the community.

     LXXVIII.The unrest and unease in the community, caused by the dispute, compelled the Mayor to write to the Prime Minister in the hope that she could settle the matter. This attempt to have Parliament legislate an end to the strike provides some indication of the frustration and despair of the community.

     LXXIX.The effect of the dispute on the community was clearly in the minds of the Board members when they made the order. This is evident from their reasons (at p. 29):

     Given that these parties have exhausted all possible sources of assistance -- conciliation, mediation, ministerial intervention and an industrial inquiry commission, and given the damage to the community which their intransigence has caused, we consider that it would be wrong to prolong this agony further. [Emphasis added.]

     LXXX.As important as free collective bargaining is, it is not the only factor the Board must consider in fashioning a remedial order. It cannot be said that the Board ignored the principle of free collective bargaining. The dispute had dragged on for 18 months while a conciliator, two specially appointed mediators, and commissioners tried to assist the parties to reach their own settlement through free collective bargaining. All efforts had proved futile. The Industrial Inquiry Commission twice asked the appellant to outline in writing what its position was with respect to the outstanding issues, rather than forcing a position on them. Yet, the appellant refused to provide the requested information. Certainly, free collective bargaining had been given every opportunity to function over 18 long months. By then, this approach had taken such a grave toll on the Yellowknife community, that the Board had a responsibility to take into account the interests of others. And so it did, with the result that it imposed what appears to be a fair and equitable order which was successful in resolving the dispute. This exceptional situation called for exceptional measures.

     LXXXI.In the Digby School Board case, supra, this Court had occasion to consider whether it would be appropriate for a labour board to specify the contents of a collective agreement. It must be remembered that the case came before the Court by way of an appeal from a stated case to the Nova Scotia Court of Appeal and turned upon the interpretation of the remedial section of the Nova Scotia Trade Union Act.

     LXXXII.The reasons contrasted the broad remedial powers granted by the Ontario statute to the Ontario board with the restrictive provisions of ss. 33 and 34 of the Nova Scotia Act. It was determined that the broad power bestowed on the Ontario board supported the result reached in Re Tandy Electronics Ltd. and United Steelworkers of America (1980), 115 D.L.R. (3d) 197 (Ont. Div. Ct.). Similarly it was found that the much narrower powers granted to the Nova Scotia board to make remedial orders were so restrictive that it could not require an employer to make the collective agreement proposals which the board had specified. The powers granted to the Canada Labour Relations Board under s. 99(2) are much broader than those contained in the Nova Scotia Act. It follows that the Digby School Board decision cannot be perfunctorily applied to resolving the case at bar. However, the reasoning of Dickson J. in dissent is in my view applicable to the interpretation of the wide provisions of s. 99. He recognized that the board did not have jurisdiction under the Nova Scotia Act to impose a collective agreement on the parties. Nor could the board order a party to make a proposal to the other side simply because it thinks that it would be a fair settlement of the dispute. At page 344, he wrote:

     That does not mean, however, that the Board is precluded from making orders which specifically relate to the content of the proposals. Once it is assumed, as I have said it must be, that the content of the proposals can form the basis for a finding of a breach of the duty to bargain in good faith, it should follow that the remedy can make reference to the content of proposals in order to "secure compliance" with s. 33(a) [in our case, s. 50].

     LXXXIII.In the Digby School Board case the order which the Nova Scotia board imposed was in positive rather than negative terms; specifically, that the employer would promise not to contract out the driving of buses and that a union security clause would be included in the new agreement. Dickson J. concluded that such a remedy was the minimum proposal which the Nova Scotia board considered would constitute hard bargaining, as opposed to surface bargaining. He concluded that the board was acting within its powers to secure compliance with s. 33(a) of the Act. In my view, the wording of s. 99(2)  of the Canada Labour Code  is certainly broad enough to encompass anything that falls within the phrase "secure compliance".

     LXXXIV.In a number of cases the Canada Labour Relations Board has ordered, correctly in my view, that an employer make a specific offer, including an offer of a complete collective agreement, in circumstances where the Board has concluded that such a remedy is necessary to counteract the effects of the employer's failure to bargain in good faith. The remedy imposed in Eastern Provincial Airways, supra, was very much like the remedy ordered by the Board in the present case. As in the case at bar, the Board found that the employer had failed to bargain in good faith, and in addition, had committed other unfair labour practices. The Board issued an extensive remedial order which required the employer to resubmit an earlier proposed collective agreement, and an order that all the striking employees were to be returned to work in order of seniority. In addition, all promotions during the strike were declared null and void and reprisals against striking and non-striking pilots were prohibited. Thus, it can be seen that the Board in the Eastern Provincial Airways case, as in the instant one, ordered the employer to table its last offer to the union for ratification and added specific terms and conditions which dealt directly with the breach.

     LXXXV.The Federal Court of Appeal varied the order of the Board by reinstating the promotions on the ground that they had not been illegal and thus, the Board lacked the authority to declare them null and void. However, the Court of Appeal very properly concluded that the Board's order could not be characterized as imposing a collective agreement on the parties. Rather it was simply a measure designed to return the parties to the position they would have been in if there had not been bad faith bargaining. This reasoning is in my view correct and is equally applicable to the case at bar.

     LXXXVI.Similarly, in Brewster Transport, supra, the Board again found that the employer had bargained in bad faith. As a consequence of this breach, part of the remedial order required the employer re-offer its collective agreement proposal without the illegal terms. The employer brought an application for reconsideration of the order on the grounds that the Board had exceeded its jurisdiction by imposing a collective agreement on them. The review panel dismissed the application ((1986), 66 di 133) on the basis that the order was consistent with previous remedies imposed by the Board and which had been upheld by the Federal Court of Appeal. The panel reasoned correctly that the Board had not imposed a collective agreement, but had only reinstated one already proposed by the employer. As in the case at bar, the employer was ordered to table an agreement while the union was still given a choice as to whether or not it wished to ratify the new agreement. The panel explained that since the union had not committed a breach of the Code  it could not be ordered to accept the agreement. The Board was simply endeavouring to place, before the union, a proposal which would have been tabled for its consideration had the employer not breached the duty to bargain.

     LXXXVII.The Board observed (at p. 65) that in determining an appropriate remedy the Board should first ask itself: "What would have been the likely results of collective bargaining if both parties had conducted themselves reasonably and in good faith?". In the case at bar, the Board considered this question and determined that if the appellant had not taken such an uncompromising position with regard to the dismissed employees, an agreement, akin to the earlier tentative agreement, would have been tabled for the Union's consideration. The Board fashioned its remedy accordingly.

     LXXXVIII.The employer in the Brewster Transport case also argued that the Board's order was contrary to the principles of free collective bargaining which underlay the Code . In response, the panel noted that once the basic statutory ground rules have been broken by a party, for example the s. 50 duty to bargain in good faith, then the parties can no longer expect to have the same unbridled freedom to bargain. I agree with that reasoning.

     LXXXIX.One final case illustrating that the Board has properly and validly designed remedies akin to that which was ordered in the case at bar is Iberia Airlines, supra. After finding that the employer had bargained in bad faith the Board intervened with a remedy. It took this action in light of the nature of the violations of the Code and based on its conviction that the employer had no intention of changing its bargaining position unless a third party intervened. It concluded that if the employer had not taken the position of paying lower wages to unionized staff than to those who were non-unionized, the union members would have been in a position, over one year ago, to vote on a complete draft collective agreement. Accordingly, the Board ordered that, among other things, the employer table, in writing, within two weeks, a complete collective agreement for the union's consideration, which was to include certain specific conditions drawn up by the Board which resolved four of the most contentious issues.

     XC.Support for the types of remedies imposed by the Board in Eastern Provincial Airways, Brewster Transport and Iberia Airlines can be found in an article by George W. Adams (now Mr. Justice Adams), "Labour Law Remedies", in K. P. Swan and K. E. Swinton, eds., Studies in Labour Law (1983), 55. He observes at p. 69, that while a collective agreement cannot be imposed as a remedy for bad faith bargaining, specific terms of an agreement or the agreement itself may still be the subject matter of a remedial order. In his opinion it may be "indirectly or obliquely imposed on a violator of the statute". Ultimately, the remedial principle is that the successful complainant should be put in the position he would have been in had the breach not occurred.

     XCI.In my reasons in Tandy, supra, at p. 214, I made the following comment:

     There can be no doubt that the Board cannot impose a collective bargaining agreement upon parties and should not, in the usual course of events, impose a term of a collective agreement upon the parties. [Emphasis added.]

     XCII.It is trite to observe that the factual situation which has given rise to the case at bar could never be described as the "usual course of events". On the contrary, the length, violence and community consequences make this dispute one of extraordinary circumstances. I still hold to the view that the Board should not readily intervene in the free collective bargaining process. Nor should it routinely impose a collective agreement or key terms of an agreement on the parties. However, it would be wrong to say that a situation will never arise where more extreme measures will have to be taken in fashioning a remedial order. This is precisely such a case. In fact, even in Tandy, notwithstanding the general cautionary statement, it was concluded that even though the Board's order had the indirect effect of imposing a term of a collective agreement on the parties it was appropriate in light of the Board's findings.

     XCIII.Next, the appellant argued that s. 80  of the Canada Labour Code , which gives the Board a special power to impose a first collective agreement on parties where none has been reached, would be redundant if s. 99(2) already grants the Board this power. I cannot accept this contention. To begin with a s. 80 remedy can be applied at the Minister's discretion. The remedy may be imposed even where there is no finding of an unfair labour practice. Furthermore, in the context of a first collective agreement, the Board can fashion its own collective agreement, which it believes to be in the best interests of the parties. This final agreement is then imposed on both parties without any requirement that it be ratified by either side. It is a final order binding on the parties. Instead of drafting the principal agreement themselves, under the provisions of s. 80, the parties may present evidence for the Board to take into account. However, the Board has a discretion as to the extent it will act upon it. By contrast, the tentative agreement was one which the appellant drew up itself, and which the Union was given a chance to ratify. It was ordered as a means of counteracting the consequences of the appellant's breach of the duty to bargain in good faith. It is apparent that s. 80  of the Code  applies to a different situation altogether. It follows that there is no need for s. 99(2) to be read restrictively as a result of the provisions of s. 80.

     XCIV.Another objection to the Board's order raised by the appellant was that the Board had fixed a three-year term for the duration of the new collective agreement. This seems to be a somewhat specious and unacceptable argument in light of the appellant's earlier specific request that the Board fix a term for the duration of the agreement. In fixing a three-year term, the Board was simply complying with the appellant's request. The chief negotiator for the company had written a letter to the Industrial Inquiry Commission stating that: "[t]he Company has not made a secret of the fact that it wishes a long term collective agreement of five or even seven years or better yet for the balance of the life of the mine". Further on, he continued:

     While the terms of the collective agreement should be privately negotiated, a duration of sufficient length should be imposed to guarantee that a strike (or a lock out) would not be legally possible for a number of years to come.

     XCV.In light of this, the appellant's contention that the Board did not have the power to impose a term in this regard cannot be accepted.

     XCVI.There were four other outstanding issues which the Board referred back to the parties to negotiate for a period of 30 days, following which there would be a process of mediation to finality. These four issues covered transportation, statutory holidays, wages ("Gold Scale Adjustment") and safety inspections. While the appellant objected to the Board's intervening on these unresolved issues, which were not the subject of the bad faith finding, it is important to note that the appellant actually received greater concessions through the Board's order than it had previously put forward in the tentative agreement. Furthermore, the Industrial Inquiry Commissioners had received written submissions from both parties as to what they would be willing to accept with respect to the four outstanding issues. The Commission's final recommendations, which became the basis of the Board's order, took into account the parties' submissions and were ultimately, very favourable to the appellant.

     XCVII.Indeed, the company issued a press release in which they acknowledged that they were pleased at having obtained further concessions. In particular, the special mediators' recommendations, which were incorporated into the Board's order, provided that the two-day Miner's Day weekend should be discontinued and replaced with only one floating holiday. This resulted in a $126,000 saving for the appellant. Other concessions favourable to the appellant included: the adoption of some of the wage scale which was currently in place for the replacement workers, a term which the appellant had requested; the discontinuation of the practice of providing money in lieu of airfares for miners and their families until the third year of the collective agreement, which translated into a savings of three-quarters of a million dollars for the company and; finally, a cap was imposed on the number of days available for safety tours each month.

     (3) A Summary Pertaining to the Remedial Order

     XCVIII.Clearly it can never be forgotten that free collective bargaining is a corner stone of the Canada Labour Code  and of labour relations. As a general rule it should be permitted to function. Nonetheless, situations will arise when that principle can no longer be permitted to dominate a situation. Where the dispute has been bitter and lengthy; the parties intransigent and their positions intractable; when it has been found that one of the parties has not been bargaining in good faith and that this failure has frustrated the formation of a collective bargaining agreement; and where a community is suffering as a result of the strike then a Board will be justified in exercising its experience and special skill in order to fashion a remedy. This will be true even if the consequence of the remedy is to put an end to free collective bargaining. This follows in part because it is the lack of good faith bargaining by a party which is frustrating the bargaining process and in part because of the other principles and factors the Board is required to consider pursuant to the provision of the Canada Labour Code .

     XCIX.In the case at bar, the strike had been bitter and long. The intractable position of appellant that it would not consider some form of due process for dismissed employees was found to constitute lack of good faith. This position of the appellant certainly put an end to any possibility of true bargaining between the parties. The community of Yellowknife was obviously suffering. In those circumstances it was appropriate for the Board to fashion a remedy. The remedy put forward did not impose a collective agreement on the appellant. Rather the Board used as a basis for the bulk of its remedy the tentative agreement drafted and put forward by the appellant. Obviously this agreement was acceptable to the appellant in April 1992. It is true that it had changed its mind with regard to four matters. On those matters the parties were directed to bargain for 30 days and if they failed to reach agreement they would be subject to binding mediation on those issues. In light of the past history of the intransigence of the parties, no other solution was feasible. Indeed the press release of the appellant expressed its pleasure with the result of the mediation on the four matters.

     C.In the circumstances of this case it was beneficial to the parties and to the community that the Board applied its experience and skill to design a remedy that was eminently fair and sensible.

     CI.The Board did not impose the tentative agreement or the additional terms and conditions on the parties without first ensuring that all the other options which could realistically be expected to bring an end to the dispute had been exhausted. The Board had tried conciliation, mediation, ministerial intervention and the appointment of an Industrial Inquiry Commission. The Commission had issued a number of reports and recommendations to no avail. The Commissioners went so far as to twice request the appellant to provide a detailed written statement of its current position on all the outstanding issues. The appellant did not comply with either request. Therefore, in light of both the lack of cooperation and the lack of good faith bargaining by the appellant and the damage to the community which the parties' dispute had caused, the Board properly exercised its discretion to impose a remedy which would put an end to the impasse.

     CII.The remedial order directly related to the effect of the failure to bargain in good faith and in so far as was possible complied with the aims and objects of the Canada Labour Code . The Board considered the objectives of the Code and, accordingly, devised a constructive settlement to the dispute. The remedy struck an appropriate balance between the public interest and the interests of the parties. In my view, the Board's order is beyond reproach. The order made came within the jurisdiction of the Board. Therefore applying the appropriate degree of deference I find that the order was not patently unreasonable and therefore cannot be set aside. Yet if it were necessary I would go further and state that if the standard the order had to meet was one of correctness then it would meet that standard as well. In the circumstances of this case the order was correctly made.

     V. Disposition

     CIII.The appeal should be dismissed with costs.

     The reasons of Sopinka, McLachlin and Major JJ. were delivered by

     MAJOR J. (dissenting) --

     I. Introduction

     CIV.This case involves a bitter labour dispute involving the Giant Mine located in Yellowknife in the Northwest Territories. On a review of the history of the lengthy negotiations between the parties, the Canada Labour Relations Board (the "Board") concluded that both parties had acted in an obtuse and intransigent manner and committed numerous instances of bad faith bargaining over the course of the negotiations.

     CV.The Board chose to intervene, however, on a single instance of bad faith bargaining committed by the employer who it found took an unreasonable position with respect to employees dismissed for participating in a riot on the picket line. The employer insisted on its position to the point of impasse and made resolution of this issue a precondition to bargaining on other issues.

     CVI.The remedy imposed by the Board was to order the employer to offer the union a collective agreement substantially similar to one which it had presented almost two years earlier but which had been rejected by the union membership at that time. The Board also ordered that the four most contentious monetary issues be subjected to binding mediation if no agreement were reached between the parties within 30 days.

     CVII.The effect of the Board's order was to impose the terms of a new collective agreement upon the employer. This was a form of compulsory interest arbitration which was outside the remedial jurisdiction granted to the Board in s. 99(2)  of the Canada Labour Code , R.S.C., 1985, c. L-2 .

     CVIII.The order imposed by the Board did not exhibit the requisite nexus between the breach, consequences adverse to the objects of the Code and the remedy. As well, the order failed to promote the primary object of the Code  which is to encourage the constructive settlement of disputes by the parties through the process of free collective bargaining.

     CIX.It is easy to sympathize with the desire of the Board to impose closure on a rancorous dispute which had divided a community and led to loss of life. Nevertheless, the power to bring this dispute to an end lay with the executive and legislative branches of government and was not delegated to the Board under the wording of s. 99(2)  of the Code .

     II. Facts

     CX.In 1990, the appellant, Royal Oak Mines Inc. acquired the Giant Mine in the Northwest Territories. The respondent Canadian Association of Smelter and Allied Workers, Local No. 4 (the "Union") represented the workers at the mine, and had been their certified bargaining agent since 1976.

     CXI.The appellant undertook a significant risk, and a considerable entrepreneurial challenge in acquiring the Giant Mine, given its nature, age and the grades of gold ore remaining in the mine. This gold mine, which has been in operation for over 50 years, is a highly complex and dangerous one.

     CXII.At the time of the purchase, the mine had become known for its poor productivity and troubled labour relations. It was not clear that the mine would ever be financially viable. The appellant purchased the mine out of soft receivership and through a concerted effort to reduce costs managed to reduce the losses significantly in the first year of operation.

     CXIII.The collective agreement existing between the parties was set to expire on March 31, 1992. In February 1992, negotiations for a new collective agreement began between the parties. A federal conciliation officer was appointed to assist the parties in arriving at an agreement. Conciliation meetings were held in April 1992, eventually resulting in a tentative agreement.

     CXIV.The Union bargaining committee recommended acceptance of the offer put forward by the employer. However, the offer was overwhelmingly rejected by the membership of the Union. The employer informed the Union that it would be willing to alter the terms of the tentative offer, but not in a way that would increase the costs of the agreement to the employer. The Union, however, insisted on several changes that would result in considerably higher costs than the proposed agreement.

     CXV.A total impasse was eventually reached and the employees voted to strike. When it became clear that the strike was imminent, the employees were locked out. The strike began on May 23, 1992, and continued unabated for 18 months.

     CXVI.An atmosphere of hostility prevailed during the strike, it was marked by illegal picketing of company property, violence and finally an explosion that killed nine miners. The appellant continued its mining operations using replacement workers, management staff, and a small number of union members who had crossed the picket line.

     CXVII.From June to September 1992, the appellant dismissed approximately 45 employees, strikers and members of the Union. Each of the dismissed employees had allegedly been involved in violent strike activities between June and September 1992, including a riot on June 14, 1992. On September 18, 1992 there was an explosion in the mine which killed nine people. A member of the Union was charged in connection with this explosion.

     CXVIII.On September 30, 1992, the Minister of Human Resources and Labour appointed two special mediators to inquire into the labour dispute and assist the parties in negotiating a settlement. On November 25, 1992, the mediators submitted an interim report, identifying six special circumstances of the dispute which made it the most difficult they had ever witnessed. The report stressed the need for a change in the behaviour of both parties.

     CXIX.On December 22, 1992, the special mediators were appointed Industrial Inquiry Commissioners and they conducted their first formal proceedings on January 29 and 30, 1993.

     CXX.The appellant refused to advance a bargaining position until the respondent Board issued its determination of a raid application that had been filed by an employee association seeking to replace the respondent Union. The association in question was composed of replacement workers and a small number of union members who had crossed the picket lines. The Industrial Inquiry Commission adjourned the proceedings pending the outcome of the raid application. On May 5, 1993, the respondent Board dismissed the application for certification, finding that the employee association had not established majority support: 92 di 1.

     CXXI.On May 14, 1993, the Commission process resumed. The most significant point of disagreement between the parties concerned some 45 workers that had been fired for participation in illegal strike activity and riots. The Union wished to have some mechanism for handling the grievances of those former employees, allowing those problems to be considered by an impartial third party. The employer, however, refused to entertain any provision for the arbitration or independent determination of questions arising from the discharge of the employees. The Commissioners identified this issue as "perhaps the biggest obstacle to meaningful collective bargaining".

     CXXII.On May 25, 1993, the respondent Union filed a complaint with the Board pursuant to s. 50 (a) of the Canada Labour Code  alleging that, after notice to bargain collectively was given, the appellant had failed to bargain in good faith and to make every reasonable effort to enter into a collective agreement.

     CXXIII.On November 11, 1993, the Board allowed the Union's complaint, concluding that the appellant had failed to bargain in good faith as required by s. 50  of the Code . On the basis of this finding the Board ordered the appellant to offer a collective agreement which contained terms specified by the Board: 93 di 21.
CXXIV.Under the Board's order, four terms of the agreement were to remain the subject of further bargaining for 30 days and then be mediated to finality. These issues were transportation, statutory holidays, wages and safety inspections. All of these issues were eventually mediated successfully with the result that the appellant ironically obtained terms more beneficial to it than those which it had been willing to offer the Union in 1992.

     CXXV.On March 24, 1994, the Federal Court of Appeal unanimously dismissed the appellant's application for judicial review of the Board's decision: (1994), 167 N.R. 234, [1994] N.W.T.R. 179.

     III. Decision of the Canada Labour Relations Board

     CXXVI.The Board held that it was unnecessary to deal with all of the Union's allegations of misconduct. In the opinion of the Board, it was clear on the evidence that on at least one of the points raised by the Union, "the company was, in effect if not in words, placing an improper precondition on the resumption of bargaining" (p. 24).

     CXXVII.Thus, the Board based its decision to intervene on a single instance of bad faith bargaining by the appellant, which it characterized as the most serious matter raised in the case. The Board concluded that the employer's refusal to consider any provision for the arbitration of claims arising from the discharge of 45 striking employees for alleged misconduct on the picket line amounted to "bad faith" within the meaning of s. 50(a).
CXXVIII.The Board described the situation as follows (at pp. 25-26):

     There is no doubt that there was considerable violence on the picket line, and that on one occasion, this developed into a full riot. After studying reports and videos of those events, the company decided to terminate the employment of those of its striking employees whom it considered to have misconducted themselves in a serious way. Employees on strike remain employees, and where they damage company property or injure other employees, they may be subject to disciplinary measures, including the termination of their employment. Where such action is taken, employees would generally have no recourse to a grievance procedure, because a collective agreement providing for such procedure is not in force. It is usual, however, where a strike is settled and a new collective agreement made, to provide, explicitly or implicitly, a procedure for determining claims that the exercise of such disciplinary powers during the strike was not for just cause. In the instant case, the company has taken the position that it will not agree to any provision for the arbitration or other independent determination of questions arising from its discharge of the 45 employees, and that it will not permit them to return to work under any circumstances.

     CXXIX.The Board determined that the employer had made the refusal to consider any form of arbitration for the claims of the dismissed employees "a precondition of bargaining ... [which] constitutes a failure to bargain in good faith" (p. 26).

     CXXX.The Board agreed that the position taken by the employer merited serious consideration and that it was sincerely and deeply held. The Board stated (at p. 26):

     This aspect of the matter calls for some elaboration, since we consider that the company's position is sincerely and deeply held, and since we consider as well that it is a position for which serious -- but not persuasive -- arguments can be made. If indeed the discharged employees have committed the acts of vandalism or assault which the company believes they have committed, if these were serious offenses and perhaps if the employees had previous disciplinary records, then there would of course be just cause for the termination of their employment. The company has said it will not permit their return to work because of the danger created by having such persons working together with other workers who did not share their views on the strike, and that this is particularly important where work is to be performed in a mine, where opportunities for undetectable assaults or worse are innumerable, and where confidence in one's fellow workers is essential. This is a serious argument.

     CXXXI.However, the Board did not accept that it was legitimate for the appellant to assert the jurisdiction of the company to be both the accuser and the judge of the dismissed strikers. On this point it concluded (at pp. 26-27):

     The fallacy in [the appellant's] argument, in the present context, is that it assumes the guilt of the persons concerned or, perhaps, more precisely, it asserts the jurisdiction of the company to be both accuser and judge. An employer may indeed have that jurisdiction in a non-collective bargaining situation, but this is not such a situation. Questions of identification and of course of evaluation of acts committed and the circumstances in which they were committed are best determined by an objective third party, and this is particularly so the more emotional the circumstances.

     CXXXII.As a result, the Board held that the appellant had bargained in bad faith by taking a position with respect to the dismissed employees which was objectively unreasonable and which blocked bargaining completely.

     CXXXIII.In addition to the bad faith involving the issue of the dismissed employees on which the Board chose to intervene, the Board identified two other areas in which the appellant had previously acted in bad faith but was no longer doing so.

     CXXXIV.The first example of prior bad faith concerned the employer's refusal to continue bargaining until a raid application had been resolved. Although the Board agreed that there may have been "a cloud over the incumbent union's right to represent the employees in the union" (p. 25), the Board was of the view that "the juridical fact is that the incumbent, CASAW, was at all material times the certified bargaining agent" (p. 25). The Board held that "[a]n employer cannot refuse to negotiate with the certified bargaining agent" pending the results of a raid application. It concluded that "[u]nderstandable as the company's hesitation on this point may have been, failure to bargain on this ground constituted a failure to bargain in good faith" (p. 25).

     CXXXV.The Board, however, explicitly rejected the respondent Union's argument that the appellant had acted in bad faith by creating the employee association which was the subject of the raid application. It noted that the October 1993 decision of the Board (Royal Oak Mines Inc., 93 di 14) that the employee association was "employer dominated" had to be understood in light of the strict criteria set out in an earlier decision from August 1993 (92 di 153). The Board held that "[i]t cannot be stretched into a conclusion that the employer itself `created' the [employee] Association, as counsel for the union has argued" (p. 25).

     CXXXVI.The second example of prior bad faith was a differentiation between those who had been at work during the strike and returning strikers in respect of a proposed probation clause. The Board concluded that the probation clause was improper, contrary to public policy and one which the appellant must have known any union could not accept. However, the Board concluded that the company had withdrawn itself from its improper position on the probation clause prior to the Board hearing.
CXXXVII.Before turning to the matter of remedy, the Board made it clear that, on a number of prior occasions, the respondent Union had also failed to bargain in good faith by taking positions which were obviously unacceptable (at pp. 27-28):

     Before we turn to the matter of remedy, we must note that the union, too, has on a number of occasions failed to bargain in good faith, although it would appear by now to have retreated from what can only be called the irrationally optimistic -- and obviously unacceptable -- positions it put forward from time to time. An instance of this occurred in May 1993, when the union put forward the quite unrealistic demand that the parties return to the previous collective agreement, thus seeking even more than they had sought in January of the same year. This proposal was obviously one which had no chance of acceptance, and would tend only to reinforce the company's view that the union was not bargaining seriously.

     CXXXVIII.The Board described its remedial powers for situations such as the case at bar in the following terms (at p. 28):

     In a matter of this sort, the Board's remedial powers are very broad. Section 99(2)  of the Code  provides that for the purposes of ensuring the fulfilment of the objectives of Part I of the Code  -- objectives set out in the preamble to Part I -- the Board may, in respect of any contravention of or failure to comply with any provision to which subsection (1) applies ... "require an employer or a trade union to do or refrain from doing any thing that it is equitable to require the employer or trade union to do or refrain from doing in order to remedy or counteract any consequence of the contravention or failure to comply that is adverse to the fulfilment of those objectives".

     CXXXIX.According to the Board one of the consequences of failures of both parties to bargain in good faith was that no collective agreement had been reached, a consequence adverse to the fulfilment of the objectives of the Code  (at p. 28):

     One of the consequences of the parties' failure to comply with section 50 is that no collective agreement has been reached, where one could have been reached, and in our view would have been reached were it not for those failures, and that consequence is, in the instant case, one that is adverse to the fulfilment of the objectives of the Code .

     CXL.In the opinion of the Board, this was a proper case for the intrusive remedy of requiring the employer to table an offer, several terms of which would be imposed by the Board. The Board noted that the "obtuse intransigence" of both parties was such that further bargaining between them would be a "cruel waste of time" (at p. 28):

     In most cases where there has been a finding of failure to bargain, the Board has been careful to limit its intervention, and we agree that that should be the Board's usual stance. In the instant case, however, to issue a cease and desist order, or to direct the parties to bargain would, we consider, be unrealistic and even a cruel waste of time. These parties, both of them, have repeatedly demonstrated the degree of obtuse intransigence which led the very experienced special mediators ... to state that this has been the most difficult labour dispute either of them had witnessed. The pathetic history of the parties' negotiations, and the tragic events which have attended the failure of those negotiations lead us to share the pessimism which the mediators and others have expressed.

     CXLI.The Board noted that it would normally have required the employer to present an offer similar to its last offer, after removing any illegal or improper demands. However, as no last offer could be identified in this case, the Board instead imposed the recommendations of the Industrial Inquiry Commission, which in the Board's opinion would satisfy the "reasonable demands" of each party (at p. 29):

     In the normal course, the Board would order that the company present to the union, for ratification, an offer similar to its "last offer", from which any improper or illegal demands were removed. In the instant case, the course of negotiations does not permit the reliable identification of any complete last offer, but it is clear to us that the recommendations of the Industrial Inquiry Commissioners would satisfy, in most respects at least, the reasonable demands of either party.

     CXLII.The Board therefore ordered the appellant to table as its formal offer of a collective agreement the proposed agreement offered on April 18, 1992, but rejected by the union membership.

     CXLIII.As previously stated, the Board directed that four issues on which the appellant had changed its position since April 1992 be removed from the collective agreement. These issues were transportation, statutory holidays, wages (including "Gold Scale Adjustment") and safety inspections. These issues were to remain the subject of negotiations for 30 days only and then, in the event that agreement was not reached, to be referred to mediators or arbitrators for mediation to finality within a further 20 days.

     CXLIV.The Board also dictated the term of the agreement (three years) and the specific content of a back-to-work protocol, including the manner in which the claims of employees dismissed during the strike were to be arbitrated.

     IV. Analysis

     CXLV.The appellant raises two objections to the decision of the Board. First it argues that the Board's finding of bad faith bargaining by the appellant is unsupportable. Second it argues that the Board exceeded the remedial jurisdiction granted by s. 99(2)  of the Canada Labour Code  when it imposed the terms of a collective agreement on the appellant.

     A. Standard of Review on the Finding of Bad Faith Bargaining

     CXLVI.I agree with Cory J. that the question of whether a particular party has been guilty of bad faith bargaining is a finding of fact within the particular expertise of the Board and must be upheld unless it is found to be patently unreasonable.

     CXLVII.The starting point for determining the standard of review with respect to the Board's decision on any particular issue is the enabling statute.

     CXLVIII.Section 50 (a)(i) and (ii) of the Canada Labour Code , taken together with ss. 98  and 99 , clearly clothes the Board with the authority to determine whether or not a particular party has bargained in good faith and whether a party has made "every reasonable effort to enter into a collective agreement":

     50.Where notice to bargain collectively has been given under this Part,

     (a) the bargaining agent and the employer, without delay, but in any case within twenty days after the notice was given unless the parties otherwise agree, shall

     (i)meet and commence, or cause authorized representatives on their behalf to meet and commence, to bargain collectively in good faith, and

     (ii)make every reasonable effort to enter into a collective agreement;

     ...

     99. (1) Where, under section 98, the Board determines that a party to a complaint has contravened or failed to comply with ... section ... 50 ..., the Board may, by order, require the party to comply with or cease contravening that subsection or section....

     CXLIX.These jurisdictional grants are clear, placing findings of bad faith bargaining within the specialized jurisdiction of the Board. This conclusion is consistent with the holding of Dickson J. (as he then was), in Canadian Union of Public Employees v. Labour Relations Board (Nova Scotia), [1983] 2 S.C.R. 311 (the "Digby School Board" case), at p. 342, that "[t]he determination of the scope of the duty to bargain in good faith is within the exclusive jurisdiction of labour boards."

     CL.In addition, as noted by Cory J., the Board is protected by a clear and strongly worded privative clause in s. 22(1)  of the Canada Labour Code .

     CLI.The Board's decision on this issue can only be set aside if it was patently unreasonable: Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557, per Iacobucci J., at p. 590:

     Having regard to the large number of factors relevant in determining the applicable standard of review, the courts have developed a spectrum that ranges from the standard of reasonableness to that of correctness. Courts have also enunciated a principle of deference that applies not just to the facts as found by the tribunal, but also to the legal questions before the tribunal in the light of its role and expertise. At the reasonableness end of the spectrum, where deference is at its highest, are those cases where a tribunal protected by a true privative clause, is deciding a matter within its jurisdiction and where there is no statutory right of appeal. See Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227; U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048, at p. 1089 (Bibeault), and Domtar Inc. v. Quebec (Commission d'appel en matière de lésions professionnelles), [1993] 2 S.C.R. 756.

     B. Is the Board's Finding Patently Unreasonable?

     CLII.The Board based its decision to intervene in this case solely on the basis of its findings of bad faith by the appellant with respect to the issue of the dismissed employees. The Board characterized the appellant's position as bad faith bargaining in two respects. First, the appellant was in bad faith by making the resolution of the dismissal issue a precondition to further bargaining. Second, the appellant was in bad faith by taking a bargaining position with respect to the dismissed employees which was objectively unreasonable and insisting on it to the point of impasse.

     CLIII.I agree with Cory J. that the Board's decision that the employer acted in bad faith with respect to the issue of the dismissed employees cannot be characterized as patently unreasonable.

     CLIV.Section 50(a) imposes a requirement on each party to bargain in good faith and to make every reasonable effort to enter into a collective agreement. It is fundamental to the fulfilment of this requirement that a party be willing to at least discuss all of the issues in contention between the parties. By making the resolution of the grievance procedure for dismissed employees a precondition to further bargaining on any issue, the appellant was bargaining in bad faith.

     CLV.There is also the question of whether the appellant's insistence on an objectively unreasonable position to the point of impasse constitutes bad faith bargaining.

     CLVI.In this case, the Board made no explicit finding of surface bargaining nor did it make any finding that the appellant had been bargaining with improper motives. The Board took pains to stress that the position of the appellant with respect to the dismissed employees was based on "sincerely and deeply held" beliefs which were grounded in concern for the safety of the workers. It also noted that serious arguments could be made for this position.

     CLVII.The Board did, however, conclude that the appellant's position was objectively unreasonable and that the appellant's insistence on the position to the point of impasse constituted bad faith bargaining.

     CLVIII.There are three considerations, which taken collectively, satisfy me that this finding of bad faith by the Board should not be interfered with on a standard of patent unreasonableness:

     (1)the position characterized as unreasonable by the Board concerned a non-monetary issue;

     (2)the appellant was insisting on the objectively unreasonable position to the point of impasse; and

     (3)this finding of bad faith is found in the context of the Board's correct finding that the appellant was in bad faith by making resolution of the issue a precondition to any further bargaining.

     CLIX.The Federal Court of Appeal was correct in its decision on this issue when it stated:

     ... quite unable to say that the Board's conclusions, reached after a full canvas of that evidence, were so patently unreasonable as to amount to an excess of jurisdiction. It is rare, indeed, that an employer will admit to bargaining in bad faith and we should be very reluctant to interfere with a finding of fact reached by a panel which, as was the case here, had acquired an intimate knowledge of the course of negotiations between the parties.

     ((1994), 167 N.R. 234, at p. 237.)

     CLX.Since the Board chose to intervene only on its bad faith findings with respect to the grievance arbitration issue, it is not necessary to consider the other instances of bad faith by both the appellant and the Union throughout the prior history of the negotiations. The Board was right to base its intervention solely on the issue of bad faith which was still outstanding at the time of the hearing. Only where prior bad faith continues to have an ongoing effect on the collective bargaining process would the Board be justified in intervening on the basis of bad faith bargaining which is no longer taking place.

     C. The Standard of Review of the Board's Remedial Jurisdiction

     CLXI.The next question is whether the remedy granted by the Board was within its jurisdiction. To do so, the Court must determine whether fashioning the remedy it did was a matter of jurisdiction, or the exercise of powers within the Board's statutory authority.

     CLXII.If fashioning the remedy was the exercise of powers that are within the Board's authority, then the Board is entitled to deference in the exercise of that function owing in part to the strong privative clause contained in s. 22  of the Canada Labour Code  and the Board's decision can only be interfered with if it is patently unreasonable.

     CLXIII.However, if fashioning the remedy is a question of jurisdiction, the Board must be correct that it has the jurisdiction to grant the remedy.

     CLXIV.Previous decisions of this Court make it clear that, in interpreting a grant of jurisdiction in a tribunal's enabling statute, the tribunal is not entitled to the deference of the Court. A tribunal must be correct in order for its interpretation of a jurisdictional grant to be upheld: U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048. According to the Court in Bibeault at p. 1086, where the question before an administrative tribunal "concerns a legislative provision limiting the tribunal's powers, a mere error will cause it to lose jurisdiction and subject the tribunal to judicial review". (Emphasis added.)

     CLXV.This point was recently affirmed in Pezim, supra, where Iacobucci J. held at p. 590:
Having regard to the large number of factors relevant in determining the applicable standard of review, the courts have developed a spectrum that ranges from the standard of reasonableness to that of correctness. Courts have also enunciated a principle of deference that applies not just to the facts as found by the tribunal, but also to the legal questions before the tribunal in the light of its role and expertise....

     At the correctness end of the spectrum, where deference in terms of legal questions is at its lowest, are those cases where the issues concern the interpretation of a provision limiting the tribunal's jurisdiction (jurisdictional error)....

     CLXVI.Although it is clear that an error in interpreting a jurisdictional clause will subject the board in question to review before the courts on a correctness standard, it is not always easy to determine which legislative provisions should be characterized as grants of jurisdiction.

     CLXVII.This Court has consistently cautioned against too easily characterizing a statutory provision as jurisdictional: see Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227, at p. 233. As pointed out in Canadian Broadcasting Corp. v. Canada (Labour Relations Board), [1995] 1 S.C.R. 157, at p. 181:

     ...when dealing with a tribunal as specialized as the Canada Labour Relations Board, inherent in whose functioning is the need to resolve disputes quickly and with finality, courts should be reluctant to characterize a provision as jurisdictional unless it is clear that it should be so labelled....

     CLXVIII.I agree that the Court should maintain its traditional reluctance to characterize provisions as "jurisdictional" in nature. Nevertheless, the question of whether the Board is empowered to grant a particular form of remedy is a question of jurisdiction.

     CLXIX.In determining whether it had the jurisdiction to issue the order in question in this appeal, the Board relied on s. 99(2)  of the Code  which provides:

     99....

     (2) For the purpose of ensuring the fulfilment of the objectives of this Part, the Board may, in respect of any contravention ... to which subsection (1) applies and in addition to or in lieu of any other order that the Board is authorized to make under that subsection, by order, require an employer or a trade union to do or refrain from doing any thing that it is equitable to require the employer or trade union to do or refrain from doing in order to remedy or counteract any consequence of the contravention or failure to comply that is adverse to the fulfilment of those objectives.

     CLXX.It is clear that s. 99(2) is a jurisdiction granting section. It is the sole source of the Board's authority to order remedies beyond the simple "compliance orders" provided for in s. 99(1). Section 99(2) authorizes the Board to make "equitable" orders to remedy the consequences of breaches of the Code . Section 99(2) grants the Board jurisdiction to make orders that it would otherwise lack the power to make. It follows that s. 99(2) is a jurisdiction granting clause.

     CLXXI.The jurisdictional nature of s. 99(2) was at least implicitly recognized in National Bank of Canada v. Retail Clerks' International Union, [1984] 1 S.C.R. 269.

     CLXXII.In National Bank, the Board had issued an order requiring the National Bank of Canada to pay $48,000 per annum to the union. The question on appeal was whether the Board had jurisdiction under s. 99(2) to impose this form of remedy.

     CLXXIII.Chouinard J., writing for a unanimous Court, noted that "[t]he caution which the courts must exercise whenever the jurisdiction of an administrative tribunal is questioned has been repeatedly emphasized" (p. 288). He also referred to the case law which notes that courts must be cautious before determining that a section is a jurisdiction granting clause. However, he concluded (at p. 288):

     The fact remains that a remedy ordered pursuant to s. 189 [now s. 99(2)] must be one authorized by that section.

     CLXXIV.It would appear, on a fair reading, that National Bank stands as authority for the proposition that s. 99(2) is a jurisdiction granting clause which must be interpreted according to a correctness standard.

     CLXXV.This conclusion is supported by the application of the "pragmatic and functional" approach advocated in Bibeault. The purpose of the statute and the reasons for the tribunal's existence are two of the key considerations for the reviewing court under the Bibeault test for determining whether a section is jurisdictional. Therefore, a section which restricts remedies to the objects of the Act is jurisdiction granting in the interpretation of those objects. Section 99(2) specifically restricts remedies to those which "ensur[e] the fulfilment of the objectives" of the Code .
CLXXVI.With respect, I cannot agree with the conclusion of Cory J. that the only jurisdictional question which the Board faces is whether or not it may impose remedies on the party. The Board must also answer the question of whether it lies within the jurisdiction of the Board to grant the particular remedy or remedies which the Board intends to impose. Obviously, the Board cannot impose a remedy which it lacks the jurisdiction to impose and therefore its decision as to whether it has the jurisdiction to impose a specific remedy must be correct.

     CLXXVII.Conversely, where the Board has correctly identified a range of remedies which lie within its jurisdiction to grant, the Board's determination of which of those remedies to impose on a specific party lies within the special role granted to it by statute. The Board's decision to grant one remedy in preference to another is therefore a question which can only be reviewed on the deferential standard of patent unreasonableness.

     D. Did the Remedy Lie Within the Jurisdiction of the Board?

     CLXXVIII.The question remaining in this appeal is whether the order of the Board was within the jurisdiction granted to it under s. 99(2). To determine that, it is necessary to consider what the true effect of the Board's order was.

     CLXXIX.The appellant's submission is that the Board "imposed a collective agreement" upon the parties, and therefore exceeded its remedial jurisdiction. The respondents, by contrast, claim that the Board did not impose a collective agreement upon the parties, but merely placed the parties into the positions they would have occupied had the employer's "bad faith bargaining" never occurred.

     CLXXX.It will be recalled that the Board's order required the appellant to "table as its formal offer of a collective agreement ... the tentative agreement dated April 18, 1992, save and except as it may be amended hereunder" (p. 30). The "amendments" imposed by the Board included the following:

     (1)Issues related to transportation, statutory holidays, wages and safety inspections were referred to the parties for further negotiations. If an agreement could not be reached within 30 days, the issues would be subject to binding arbitration.

     (2)The term of the collective agreement was set at three years from the date of ratification. The order further provided for binding arbitration for further collective agreements "as an alternative to a strike or lockout".

     (3)Dismissed employees, including those dismissed for participation in illegal strike activities, were given the right to have their cases heard by mediators "for review and binding determination".

     CLXXXI.There were also a number of less significant amendments dealing with such minutiae as the parties dropping lawsuits against each other, the date of return to work and the manner in which the mediators' fees were to be paid. If the Union failed to accept the new collective agreement, the parties were directed to then bargain in good faith.

     CLXXXII.In my view, it would be difficult to characterize this order as anything other than the imposition of a collective agreement upon the employer. The order technically requires the employer merely to "table an offer". However, as noted by the Board, the "offer" contained in the order closely parallels the Industrial Inquiry Commission recommendations endorsed by the union membership. Quite clearly the order does not only require the appellant to table an offer but also sets out in detail many of the specific terms that the offer must contain.

     CLXXXIII.In deciding that the order is not the imposition of a collective agreement, Cory J. relies in part on the fact that the Union is given a chance to ratify or reject this offer made by the employer. This position fails as it does not matter whether the Union was prepared to ratify the offer or not, the fact is that the order forces the appellant, as the employer, to accept the terms of the collective agreement fashioned by the Board.

     CLXXXIV.Counsel for the Board has urged that the primary difference between the "imposed collective agreement" and the initial tentative offer concerns the concessions regarding dismissed employees. According to the Board and the Union, the offer represents the collective agreement that the parties would have reached but for the "bad faith" position of the employer regarding the dismissed employees.

     CLXXXV.In my view, the inclusion of clauses unrelated to the alleged "bad faith" forces one to the conclusion that the order of the Board constitutes the imposition of a full collective agreement. In particular, the four significant monetary issues which were subjected to binding mediation (transportation, statutory holidays, wages and safety inspections) did not call for the Board's intervention. Nor did issues regarding the seniority of employees, mediators' fees and the length of the agreement (for example) relate to the finding of bad faith in relation to arbitration of the claims of dismissed employees.

     CLXXXVI.Given my conclusion that the Board was required to be "correct" in interpreting the scope of its remedial jurisdiction, it must be determined whether the Board's decision met that test.

     CLXXXVII.With respect, I think the interpretation of s. 99(2) adopted by the Board is incorrect. I arrive at this conclusion on an examination of the language of s. 99(2), the object and purpose of the Code , the application of the test in National Bank and the decision of this Court in the Digby School Board case, supra.

     CLXXXVIII.In assessing the Board's interpretation of s. 99(2), the place to begin is the language of the section. Section 99(2) provides as follows:

     99....

     (2) For the purpose of ensuring the fulfilment of the objectives of this Part, the Board may, in respect of any contravention ... to which subsection (1) applies and in addition to or in lieu of any other order that the Board is authorized to make under that subsection, by order, require an employer or a trade union to do or refrain from doing any thing that it is equitable to require the employer or trade union to do or refrain from doing in order to remedy or counteract any consequence of the contravention or failure to comply that is adverse to the fulfilment of those objectives.

     CLXXXIX.The wording of s. 99(2) clearly imposes at least two limitations on the remedies which can be granted under the authority of this section:

     (1)there must be at least a rational connection between the breach of the Code , a consequence which is adverse to the fulfilment of the objectives of the Code , and the remedy.

     (2)the remedy must ensure the fulfilment of the objectives of the Code .

     CXC.The first limitation was considered by this Court in National Bank, supra.

     CXCI.In National Bank, the Board had issued an order requiring the National Bank of Canada to pay $48,000 per annum to the union. The Court held that the requirement that the employer contribute to a fund to promote the objects of the Act was found to be outside the jurisdiction granted by the section because there was an insufficient nexus between the Bank's decision to close a unionized branch and merge it with a non-unionized branch and the establishment of the fund.

     CXCII.In National Bank, Chouinard J. stated at p. 288 that, "it is essential for there to be a relation between the unfair practice, its consequences and the remedy". Thus one test for determining whether a particular remedy falls within the jurisdiction granted by the section is, at a minimum, whether "a relationship can be seen between the act alleged, its consequences and the thing ordered as a means of remedying it" (p. 291).

     CXCIII.The remedy imposed by the Board in National Bank did not meet the minimal standard of having "a relationship" to the breach of the Code and the consequences of that breach. This case raises the question of how close a nexus there must be between the breach, the consequences and the remedy. It also involves the specific statutory requirement that the consequences which the Board seeks to remedy must be "adverse to the fulfilment of [the] objectives" of the Code .

     CXCIV.The second requirement also flows from the language of s. 99(2). According to that section, any remedy issued by the Board must be made "in order to remedy or counteract any consequence of the contravention or failure to comply that is adverse to the fulfilment" of the objectives of the Code . As a result, a pre-condition for any exercise of the Board's remedial power is that the remedy must pursue the objects of the Code . In my opinion, the order of the Board fails to meet either of the requirements set out above.

     CXCV.The objectives of the Canada Labour Code  are clearly stated in the preamble to Part I which provides as follows:

     WHEREAS there is a long tradition in Canada of labour legislation and policy designed for the promotion of the common well-being through the encouragement of free collective bargaining and the constructive settlement of disputes;

     AND WHEREAS Canadian workers, trade unions and employers recognize and support freedom of association and free collective bargaining as the bases of effective industrial relations for the determination of good working conditions and sound labour-management relations;

     ...

     AND WHEREAS the Parliament of Canada desires to continue and extend its support to labour and management in their cooperative efforts to develop good relations and constructive collective bargaining practices, and deems the development of good industrial relations to be in the best interests of Canada in ensuring a just share of the fruits of progress to all; [Emphasis added.]

     CXCVI.It is obvious from these provisions that the fundamental purpose of the Code  is the constructive settlement of labour disputes by the parties to the dispute through the medium of "free collective bargaining". Although other important objectives such as "the common well-being" and "good industrial relations" are also mentioned in the preamble, these are only to be achieved by the promotion of free collective bargaining.

     CXCVII.The Board has previously recognized the fundamental importance of free collective bargaining in several of its decisions, for example, in British Columbia Telephone Co. (1977), 24 di 164. It addressed the question of whether or not the Board should impose terms of a collective agreement upon an employer, and arrived at the following conclusion (at p. 180):

     It is a fundamental purpose of Part V of the Code  that "free collective bargaining" be encouraged "as the bases of effective industrial relations for the determination of good working conditions and sound labour-management relations" (Preamble). It is self-evident that such an intrusion by the Board into the arena of collective bargaining runs counter to this purpose. By so acting we would be engaged in an undisguised act of compulsory interest arbitration, a method of dispute resolution not authorized in any of the provisions of the Code . [Italics in original; underlining added.]

     CXCVIII.The courts have affirmed the principle that a labour relations board cannot engage in compulsory interest arbitration by imposing the terms of a collective agreement.

     CXCIX.The leading case in this respect is the decision of the Ontario Divisional Court, per Cory J. (as he then was), in Re Tandy Electronics Ltd. and United Steelworkers of America (1980), 115 D.L.R. (3d) 197.

     CC.In the Tandy case, the Ontario Labour Relations Board dealt with a union complaint that the employer Tandy was not bargaining in good faith because of the position it had taken on a voluntary union dues check-off scheme which was allegedly undermining the status of the union.

     CCI.The board found for the union and ordered the employer to table a collective agreement satisfactory to the employer. The board also required the employer to cease and desist from the one unreasonable demand it was making which the board found to be a failure to bargain in good faith.

     CCII.Cory J. stated the following (at pp. 213-14):

     Section 14 of the Act imposes an obligation upon the union and the company that they

     14.... shall bargain in good faith and make every reasonable effort to make a collective agreement.
It is apparent that the duty to bargain in good faith is imperative but that there is no obligation to reach agreement. There can be no doubt that the Board cannot impose a collective bargaining agreement upon parties and should not, in the usual course of events, impose a term of a collective agreement upon the parties. [Emphasis added.]

     CCIII.In my view, the order of the Ontario Labour Relations Board in Tandy is a model which could have been followed in this case. The holding in Tandy has subsequently been affirmed by this Court in the Digby School Board case.

     CCIV.The Digby School Board case involved a long-standing and bitter labour dispute which was referred to the Nova Scotia Labour Relations Board following a complaint that the respondent School Board had failed to make every reasonable effort to conclude and sign a collective agreement as required by ss. 33 and 34 of the Nova Scotia Trade Union Act. The board held that the School Board had failed to bargain in good faith and ordered that the parties submit proposals and responses by specified dates and set minimum requirements as to the content of these proposals and responses.

     CCV.The majority reasons of Laskin C.J. held that the board had no authority to specify the contents of the proposals submitted by the parties. However, even the broader jurisdiction favoured by Dickson J. in dissent is not sufficient to cover the order made by the board in this case.

     CCVI.In Digby School Board, as in this case, the result turns on the interpretation of a provision of the statute. That case involved ss. 33 and 34 of the Trade Union Act of Nova Scotia. Section 33 of that Act was almost identical to the provisions of s. 50  of the Code  applicable here. The section required parties to bargain in good faith and make every effort to reach a collective agreement. Section 34(2) granted the board the power to grant remedies for the breach of s. 33.

     CCVII.Section 34(2) is analogous to s. 99(2) in the present case:

     34 ....

     (2) . . .the Board shall inquire into the complaint and may dismiss the complaint or may make an order requiring any party to the collective bargaining to do the things that in the opinion of the Board are necessary to secure compliance with Section 33....

     CCVIII.Although s. 99(2) is worded more expansively than s. 34(2), the differences in wording are not sufficiently broad to make the principles set out in the Digby School Board case inapplicable here.

     CCIX.Laskin C.J. for the majority referred to the Tandy case, and made the following comments (at pp. 324-25):

     What is common to the decision of the Ontario Labour Relations Board in the Tandy case and that of the Nova Scotia Labour Relations Board in this case are findings in each case that the employer did not bargain in good faith to reach a collective agreement. Though that results in a breach of the relevant legislation in each case it does not give power to impose a collective agreement. In the Tandy case the Ontario Divisional Court was concerned with an order of the Ontario Board directing the employer to cease and desist from the bargaining position it had taken with respect to a union dues check-off clause. This order was upheld by the Court because the Board had specifically found that the employer's position was aimed at fostering the demise of the Union and constituted one of the significant elements of bad faith in its bargaining conduct. In the instant case, Nova Scotia Board was not content to order the employer to cease and desist from pressing its position on a particular term. Its order required the employer to propose terms the content of which was fixed by the Board itself.

     The Court in the Tandy case stated plainly that there was no statutory power to impose or direct the terms of a collective agreement. That is so here. [Emphasis added.]

     CCX.Dickson J. dissented and interpreted the jurisdiction of the board somewhat more broadly. However, he also held, at p. 344, that the board could not impose the terms of a collective agreement on the parties:

     I accept the general proposition that it is not open to the Board under s. 34(2) to impose a collective agreement on the parties. The Board is not entitled to engage in interest arbitration. The Board cannot order a party to make a proposal simply because it thinks that would be a fair settlement of the dispute. Section 33(a) does not impose an obligation to reach any collective agreement; a fortiori, it does not impose an obligation to reach a collective agreement on what objectively might be considered to be fair terms.

     That does not mean, however, that the Board is precluded from making orders which specifically relate to the content of the proposals. Once it is assumed, as I have said it must be, that the content of the proposals can form the basis for a finding of a breach of the duty to bargain in good faith, it should follow that the remedy can make reference to the content of proposals in order to `secure compliance' with s. 33(a). [Emphasis added.]

     CCXI.The difference between Laskin C.J. and Dickson J. in Digby School Board is a narrow one. Laskin C.J. assumed without deciding that Tandy was rightly decided but holds that the ratio in Tandy is not sufficient to allow the imposition of terms in a collective agreement on a broad scale. Dickson J. explicitly held that Tandy was rightly decided and on that basis held that a board can impose specific terms, but only where there is a direct connection between the term imposed and the breach of the duty to bargain in good faith.
CCXII.In my view, Digby School Board is on all fours with this case. This Court should not interfere with either the ratio of that case or the more liberal holding of Dickson J. that a finding of failure to bargain in good faith does not allow the imposition of the terms of a collective agreement on one or more of the parties unless there is a direct connection between the bad faith and the specific term imposed.

     CCXIII.The test found in National Bank which requires a clear nexus between the breach, the consequences and the remedy imposed is a logical extension of the Digby School Board principle that a connection between the bad faith and an imposed term is a sine qua non.

     CCXIV.Even if the "requisite nexus" from National Bank between the breach, the consequences and the remedy is set as low as "a rational connection" as proposed by Cory J., it is apparent that the nexus is missing in this case.

     CCXV.The breach which caused the Board to intervene in this case was the bad faith bargaining of the appellant regarding the claims of dismissed employees. Cory J. holds that there was a clear causal connection between this breach and the failure to reach a collective agreement.

     CCXVI.With respect, the Board did not hold that the bad faith bargaining of the appellant with respect to the dismissed employees caused the parties not to reach a collective agreement. Rather it held that the consequence of the failures of both parties to bargain in good faith over the course of the negotiations was that no collective agreement had been reached (at p. 28):

     One of the consequences of the parties' failures to comply with section 50 is that no collective agreement has been reached, where one could have been reached, and in our view would have been reached were it not for those failures, and that consequence is, in the instant case, one that is adverse to the fulfilment of the objectives of the Code .

     CCXVII.The fact that the historic failures of both parties to bargain in good faith over the long course of negotiations has led to the lack of a collective agreement does not justify the imposition of the complete terms of a collective agreement on one of those parties which happens to now be in breach of its good faith bargaining duty in only one particular respect.

     CCXVIII.Section 99(2) requires that the consequence which the Board seeks to remedy must be one which is adverse to the objects of the Code .

     CCXIX.The Board concluded that the failure to reach a collective agreement was adverse to the objects of the Code . With respect, this conclusion is incorrect.

     CCXX.The objects of the Code  are the encouragement of free collective bargaining and the constructive settlement of disputes by the parties through the collective bargaining process. It has been repeatedly noted that the obligations of the bargaining parties under the Code  are to bargain in good faith and to "make every reasonable effort".

     CCXXI.Parties are not required to reach an agreement. It is perfectly consistent with the objects of the Code  for parties to negotiate to impasse provided that the good faith obligation is met. As was stated in Tandy (at p. 214):

     It is apparent that the duty to bargain in good faith is imperative but that there is no obligation to reach agreement.

     CCXXII.The Board attempted to rely on cases in which it has ordered a party to present again its last offer with improper or illegal provisions removed. These exceptional exercises of the Board's jurisdiction include Eastern Provincial Airways Ltd. (1983), 54 di 172; Brewster Transport Co. (1986), 66 di 1, and Iberia Airlines of Spain (1990), 80 di 165.

     CCXXIII.These cases do little to advance the position of the Board since they can all be distinguished from the present case in at least three respects.

     CCXXIV.First, in each of the cases except Iberia Airlines the Board was able to clearly identify the contents of the offending party's most recent offer. The true effect of the order of the Board in these cases is not that the party must offer a new collective agreement but that it must keep its previous offer on the table once the improper demands have been removed. The party may not use the Board's removal of the improper terms as an excuse to withdraw an offer from the table.

     CCXXV.Second, in each of the three cases, the collective agreement which the Board ordered the offending party to offer was one which the other party had not yet had the opportunity to decide upon.
CCXXVI.Third, as in Tandy, the specific terms imposed by the Board in these cases were directly related to the issue on which the party had been found to be bargaining in bad faith. In other words, the Board respected the "requisite connection" test set out in National Bank.

     CCXXVII.None of these three prerequisites to this extraordinary use of the Board's jurisdiction was present in this case.

     CCXXVIII.The Board recognized that it could not identify the last offer of the company. This was not a novel situation. Nevertheless, rather than follow the remedy established in Tandy and Iberia Airlines, the Board chose to engage in compulsory interest arbitration by crafting an offer that met what it considered to be the reasonable demands of either party (at p. 29):

     In the normal course, the Board would order that the company present to the union, for ratification, an offer similar to its "last offer", from which any improper or illegal demands were removed. In the instant case, the course of negotiations does not permit the reliable identification of any complete last offer, but it is clear to us that the recommendations of the Industrial Inquiry Commissioners would satisfy, in most respects at least, the reasonable demands of either party.

     CCXXIX.The collective agreement which the Board ordered the appellant to offer was substantially similar to one which the appellant had offered almost two years previously and which the union membership had rejected. Thus, this was not an agreement which the Union had been deprived of the opportunity to vote on as a result of the bad faith of the employer.

     CCXXX.Finally, and most seriously, many of the terms which the Board chose to impose in the collective agreement bore no relation to the specific instance of bad faith identified by the Board. There is no rational connection between issues regarding the seniority of employees, mediators' fees and the length of the agreement (for example) and the finding of bad faith in relation to arbitration of the claims of dismissed employees.

     CCXXXI.Nor was there any rational connection between the issue of the dismissed employees and the four significant monetary issues which were subjected to binding mediation (transportation, statutory holidays, wages and safety inspections) by the Board.

     CCXXXII.Binding mediation and arbitration may be effective mechanisms for resolving disputes but they are mechanisms which may be chosen by the parties as an alternative to free collective bargaining. It does not lie within the jurisdiction of the Board to impose binding arbitration on the parties where the parties have opted to resolve their dispute through free collective bargaining. In this regard, the Board's order not only lacked the requisite nexus to the breach of the Code , it was also antithetical to the objects of the Code .

     CCXXXIII.Cory J. would conclude that once a party has breached its obligation to bargain in good faith under s. 50, the Board is entitled to deprive the party of its right to bargain freely. With respect, there is no support for this approach in the Code .

     CCXXXIV.When, in the course of free collective bargaining, a party has breached its obligation to bargain in good faith, the duty of the Board is to ensure that the party properly exercises that obligation, not to deprive the party of any further opportunity to participate in the bargaining process. This follows from the requirement of s. 99(2) that the remedy imposed must promote the objects of the Code , paramount among which is the encouragement of free collective bargaining.

     CCXXXV.Cory J. places significant emphasis on the public interest in bringing this acrimonious labour dispute to an end. It is incontrovertible that the bad feeling between the union and the employer had caused significant damage to the Yellowknife community, including loss of life. Much as one can sympathize with the desire of the Board to put closure on a bitter dispute, it did not lie within their jurisdiction to do so.

     CCXXXVI.The Board's conclusion (at p. 28) that there were issues in dispute about which "to direct the parties to bargain would ... be unrealistic and even a cruel waste of time" does not justify the imposition of an agreement by the Board even if the Board relies on a third party mediator to impose the final terms of that agreement. Parties to free collective bargaining are entitled to continue to bargain to impasse unless Parliament chooses to intervene.

     CCXXXVII.In this case, the Mayor of Yellowknife wrote to the Prime Minister urging a legislated end to the labour dispute. Parliament chose not to intervene in a dispute centring around a non-essential operation which was barely economically viable. The Board cannot usurp a power which would be extraordinary even if imposed by Parliament however much it may believe that to do so is in the public interest.

     CCXXXVIII.The Code  provides only one instance where the Board may impose the terms of a collective agreement. Section 80 allows the Board to impose a first collective agreement in limited circumstances:

     80. (1) Where an employer or a bargaining agent is required, by notice given under section 48, to commence collective bargaining for the purpose of entering into the first collective agreement between the parties with respect to the bargaining unit for which the bargaining agent has been certified and the requirements of paragraphs 89(1)(a) to (d) have otherwise been met, the Minister may, if the Minister considers it necessary or advisable, at any time thereafter direct the Board to inquire into the dispute and, if the Board considers it advisable, to settle the terms and conditions of the first collective agreement between the parties.

     CCXXXIX.The specific grant of jurisdiction to impose a first collective agreement in s. 80(1) militates against the Board's contention that this power can be found in the general wording of s. 99(2). Furthermore, s. 80 preserves the principle that the legislative and executive branches of government retain the power to determine the circumstances when the Board may impose closure on the process of free collective bargaining. The Board may not exercise its power to impose a first collective agreement under s. 80 unless directed to do so by the Minister.

     CCXL.My conclusion that the Board lacked the jurisdiction to impose closure on this labour dispute by dictating the terms of a new collective agreement does not mean that the Board lacked the jurisdiction to impose an effective remedy.
CCXLI.An order requiring the employer to table within a specified time a collective agreement which it was willing to honour and to cease and desist from its unreasonable position with respect to the dismissed employees (or even the imposition of a specific term to deal with this issue alone) would have displayed the necessary "nexus" to satisfy the National Bank test. In addition, it would have respected the fundamental objective of the Canada Labour Code , allowing each of the parties to engage in collective bargaining.

     CCXLII.If another impasse resulted owing to further instances of "bad faith", the Board would once again be entitled to intervene. However, I can conceive of no situation in which the Board would be entitled to impose an entire collective agreement upon the parties, including terms settling issues that are unrelated to any findings of bad faith.

     CCXLIII.I conclude that the Board was incorrect to interpret s. 99(2) as it did and that the Board lacked the power to impose a collective agreement upon the parties.

     V. Disposition

     CCXLIV.I would allow the appeal and set aside the decision of the Board.

     Appeal dismissed with costs, SOPINKA, MCLACHLIN and MAJOR JJ. dissenting.

     Solicitors for the appellant: Ladner, Downs, Vancouver.

     Solicitors for the respondent Canadian Association of Smelter and Allied Workers, Local No. 4: McGrady, Askew & Fiorillo, Vancouver.

     Solicitors for the respondent Canada Labour Relations Board: Gowling, Strathy & Henderson, Toronto.

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