Re Canada Post Corporation and Canadian Union of Postal Workers et al.

[Indexed as: Canada Post Corp. v. C.U.P.W.]

50 O.R. (3d) 448 [2000] O.J. No. 2709 Court File No. 143/2000

Ontario Superior Court of Justice Divisional Court Coo, Somers and Molloy JJ. July 4, 2000

Employment -- Labour relations -- Grievance arbitration -- Evidence -- Collective agreement providing that no report relating to employee's conduct or performance may be used against employee in grievance procedure or at arbitration unless report is part of employee's personal file and that no report may be placed in file unless copy of report is sent to employee within ten days of employee's alleged infraction -- Employees grieved dismissal for theft -- Arbitrator interpreting provisions of collective agreement to mean that no evidence could be led against any grieving employee unless there was report in file of which notice was given to employee -- Arbitrator's interpretation not patently unreasonable -- Employer's application for judicial review dismissed.

Twenty-nine employees of the applicant employer were dismissed for theft. The fired employees grieved. The arbitrator ruled that no evidence of the thefts could be introduced or considered because the employee had breached Article 10.02 of the collective agreement. Article 10.02(a) provided that no report relating to an employee's conduct or performance may be used against the employee in the grievance procedure or at arbitration unless the report is part of the employee's personal file. Article 10.02(b) provided that no report may be placed in the file or constitute a part of it unless a copy of the report is sent to the employee within ten days after the date of the employee's alleged infraction. The arbitrator interpreted Article 10.02 to mean that there could be no evidence led against any grieving employee unless there was a report in the file of which notice was given to the employee. The employer brought an application for judicial review of that decision.

Held, the application should be dismissed.

Per Coo and Somers JJ.: The standard of review of the arbitrator's decision was that of patent unreasonableness. The interpretation given to Article 10.02 by the arbitrator was consistent with that given to the article by arbitrators for 20 years. The provision, as universally interpreted, had stood in the collective agreement for 20 years through several collective bargaining processes. The arbitrator's decision was not patently unreasonable.

Per Molloy J. (dissenting): The standard of review of the decision of the arbitrator was that of patent unreasonableness.

The employer has a statutory obligation to protect the security of the mail. This is an important public interest function, which cannot be bargained away. At the very least, it must be assumed that during the course of negotiating the collective agreement, it cannot have been the intention of the employer to ignore its statutory obligations. Therefore, if at all possible, the collective agreement should be interpreted in a manner that would not put the employer in breach of its statutory obligation and public duty to protect the security of the mail.

The employer had reasonable grounds for believing that there was widespread criminal activity at one of its facilities involving thefts from the mail. It had a statutory duty to take steps to solve that problem. When it was informed that the police did not have sufficient resources to conduct an investigation, the employer had no alternative but to conduct the investigation itself. It was reasonable in the circumstances for the employer to conduct the investigation covertly. Notifying the first identified wrongdoer that he or she had been identified and was being dismissed would have compromised that investigation, perhaps fatally. The arbitrator's interpretation of the collective agreement left the employer with no realistic ability to investigate criminal activity involving a large number of perpetrators. It either had to conclude its investigation within ten days of identifying the first wrongdoer (knowing that other wrongdoers remained employed and undetected) or continue its investigation, identify all of the criminals in its employ and then be forced to continue their employment. This was an absurd result.

There were two other possible interpretations of the collective agreement which protected the right of an employee to receive notice of an alleged infraction in a reasonable time while at the same time allowing the employer to complete a full investigation of wrongdoing by numerous employees before delivering dismissal notices to individual employees. One such interpretation involved a plain and literal reading of the contract language. There was nothing in the language of Articles 10.01 and 10.02 that required the notice of discipline to be served and filed within the times stipulated for "reports" under Article 10.02 in order to validate the discipline. It was still open to the employer to call evidence to support the disciplinary action taken, provided that the protections afforded by Article 10.01 were observed. The other possible interpretation was consistent with, but expanded upon, a line of arbitral jurisprudence interpreting Article 10.02 as providing protections that go beyond its literal meaning. That interpretation involves a flexible interpretation of the phrase "within ten (10) days after the date of the employee's alleged infraction . . . coming to the attention of" the employer as it is used in Article 10.02(b). Previous arbitral decisions have held that the ten-day notice period does not begin to run during the period in which the employer is conducting an ongoing investigation. As there were other possible interpretations of the collective agreement which did not give rise to an absurd result, the decision of the arbitrator was patently unreasonable.

APPLICATION for judicial review of a decision of an arbitrator.

Cases referred to Canada (Attorney General) v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941, 101 D.L.R. (4th) 673, 150 N.R. 161, 93 C.L.L.C. 14,022; Canada Post Corp. v. C.U.P.W., [1992] B.C.J. No. 333 (S.C.); Canada Post v. C.U.P.W. Re: Fitzgerald, Arbitrator Swan, September 7, 1983 (unreported); Canada Post v. C.U.P.W. Re: Joong, Arbitrator Burkett, March 7, 1994 (unreported); Canada Post Corp. v. C.U.P.W. Re: Marini (1987), 26 L.A.C. (3d) 403 (Arbitrator Swan); Canada Post Corp. v. C.U.P.W. Re: Nelson, Arbitrator Byrd, September 27, 1994 (unreported); Canada Post Corp. v. C.U.P.W. Re: Ortman, Arbitrator Norman, April 13, 1998 (unreported); Canada Post v. C.U.P.W. Re: Paradis, Arbitrator McCaffrey, May 30, 1997 (unreported); Canadian Assn. of Industrial, Mechanical & Allied Workers, Local 14 v. Paccar of Canada Ltd., [1989] 2 S.C.R. 983, 40 B.C.L.R. (2d) 1, 62 D.L.R. (4th) 437, 102 N.R. 1, [1989] 6 W.W.R. 673, 89 C.L.L.C. 14,050; Codin v. Binsky, [1973] 2 W.W.R. 146 (Man. C.A.); Consolidated-Bathurst Export Ltd. v. Mutual Boiler & Machinery Insurance Co., [1980] 1 S.C.R. 888, 112 D.L.R. (3d) 49, 32 N.R. 488, [1980] I.L.R. 1-1176; C.U.P.W. v. Canada Post Re: MacKinnon, Arbitrator Jolliffe, January 6, 1989 (unreported); Gascon v. Treasury Board, Arbitrator Lachappelle, June 10, 1977 (unreported); National Grocers Co. v. Teamsters (1983), 11 L.A.C. (3d) 193 (Arbitrator Lagille); Ottawa Fibre Inc. v. Energy and Chemical Workers Union, Local 1541, Arbitrator Abbott, December 7, 1992 (unreported); Sunrype Products Ltd. v. Teamsters Union, Local 213 (1988), 4 L.A.C. (4th) 62; United Brotherhood of Carpenters & Joiners, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316, 106 Nfld. & P.E.I.R. 140, 102 D.L.R. (4th) 402, 153 N.R. 81, 334 A.P.R. 140, 93 C.L.L.C. 14,033; Université du Québec à Trois Rivières v. Larocque, [1993] 1 S.C.R. 471, 101 D.L.R. (4th) 494, 148 N.R. 209, 93 C.L.L.C. 14,020 (sub nom. Université du Québec à Trois Rivières v. Syndicat des Employés Professionnels de l'Université du Québec); Williams v. Treasury Board (Post Office Department), Arbitrator Mitchell, August 13, 1979 (unreported)

Statutes referred to Canada Labour Code, R.S.C. 1985, c. L-2, s. 58(1) Canada Post Corporation Act, R.S.C. 1985, c. C-10, s. 5(2)(c)

Authorities referred to Brown and Beatty, Canadian Labour Arbitration, 3rd ed. (Aurora, Ont.: Canada Law Book, 1999)

Robert P. Armstrong, Q.C., Julia E. Holland and John A. Terry, for applicant. Paul J.J. Cavalluzzo, for respondents.

1COO AND SOMERS JJ.: -- This application for judicial review is focused on the language of Article 10.02 of the collective agreement.

2There were substantial losses suffered by Canada Post customers as a result of thefts from one of its major bulk mail facilities. Surveillance by a security team put in place by Canada Post revealed large-scale thievery, allegedly on the part of 29 employees who were discharged from their jobs. The evidence generated by the team was turned over to the police who laid charges. The employees were fired in reliance on the evidence put into the possession of the police and there was reference in the notices of discharge to the fact that charges had been laid.

3The fired employee grieved and the matter came before a very experienced arbitrator who has been dealing with this collective agreement for about 20 years. He ruled that no evidence of the thefts could be introduced or considered because there was a breach by Canada Post of the obligations cast upon it by Article 10.02 which is as follows:

(a) the Corporation agrees that there shall be only one personal file for each employee and that no report relating to the employee's conduct or performance may be used against him or her in the grievance procedure or at arbitration unless such report is part of the said file,

(b) no report may be placed in the file or constitute a part thereof unless a copy of the said report is sent to the employee within ten (10) calendar days after the date of the employee's alleged infraction, or of its coming to the attention of the Corporation . . .

4The Union at the arbitration urged, and the arbitrator found, that the section meant that there could be no evidence led against any grieving employee unless there was a report in the file and of which notice was given to him or her, in accordance with 10.02(b).

5The Union takes the position that this interpretation is consistent with that given to the article over a period of about 20 years by arbitrators. The Union relies on the provisions of Article 9.103 which state that the final decision of an arbitrator binds the Corporation, the Union and the employees in all cases involving identical and/or substantially identical circumstances. This clause has been in the agreement since 1981. The Union also makes the point that this well-known and understood interpretation has not been the subject of collective bargaining in all those years.

6Canada Post takes the position in this court, although it did not do so before the arbitrator, that Article 10.02 means simply that there can be no reliance as proof of misconduct on a report, unless it qualifies for consideration under the section, but that there is no agreement language standing in the way of the employer offering evidence, independent of any report, to sustain discharge or other disciplinary action.

7The assailed decision of the arbitrator must be shown to have been patently unreasonable and his interpretation of the agreement something that the words cannot reasonably bear before this court will intervene. Those things have not been shown here.

8We have considered the following factors as particularly important:

-- the clear and sensitive awareness of the arbitrator to the difficulties caused by the language of the collective agreement in the factual circumstances as they existed here;

-- the deference owed to a labour arbitrator acting under the Canada Labour Code, R.S.C. 1985, c. L-2 and the privative clause in Article 9.102 of the collective agreement;

-- the uniform history of arbitration decisions on the very point that is at the heart of this application, measured against what has been called the stare decisis clause of the collective agreement;

-- the fact that the provision as universally interpreted has stood in the agreement for close to 20 years through several collective bargaining processes;

-- the fact that while some arbitrators have seemingly arrived at their decisions based on the stare decisis clause, many others have independently come to identical conclusions on the same words, bringing to their conclusions decades of labour arbitration experience;

-- the practical logic and legitimacy in regard to employee rights, if discomfitting in its application to some specific situations, of the interpretation given to the provision over those years;

-- the fact that it was not suggested, as a point distinguishing it from the arbitration decisions over the years, that this was a case of possible joint, concerted or conspiratorial action in which there might, of necessity, have to be the absence of a report about revealed events in regard to a particular person until the possibility of links had been canvassed and a report became possible. The only point made here is that revelation of information fully gathered about one employee could and likely would stand in the way of discovery of misconduct by others -- an entirely practical and legitimate concern.

9All these speak dramatically against court intervention. One must of course start with the understanding that something patently unreasonable does not cease to have that quality through repetition, but that approach adopted here would be to close one's eyes to two decades of specialized arbitration experience and collective bargaining.

10There was evidence before the arbitrator to support his factual conclusions on the subject of when the time under section 10.02(b) of the collective agreement began to run. We cannot agree that the language of the provision permits an interpretation that would postpone its obligations in the case of a broad-based investigation of a number of employees.

11The arbitrator's decision on the subject of the use to which he was willing to put evidence already introduced about Union conduct at the time of events at the Canada Post establishment at Saint-Laurent, Quebec was sensibly not determinative in any way or even helpful. There was nothing that he could have made of that evidence that could realistically have been expected to advance the position of Canada Post. There was nothing patently unreasonable or in breach of the principles of natural justice in the arbitrator's decision on the point, no matter how generously one might read the language of Université du Quebec à Trois Rivières v. Larocque, [1993] 1 S.C.R 471, 101 D.L.R. (4th) 494.

12The alleged uncertainty of the applicant with respect to the use to which it might put videotape evidence showing the criminal activities of persons ultimately fired in light of its uncertainty about the impact of Article 41.02 of the agreement, while hard to understand in view of the wording of the section, does not support the argument that the interpretation placed by the arbitrator on Article 10.02(b) was one that the words cannot reasonably bear, or that some special exception should be read into the words to take care of such a situation.

13The language of Article 10.02 defines the consequences of failure to abide by its terms, so that, as the arbitrator concluded, it is difficult to interpret it as procedural, thus opening the door to arguments having to do with prejudice, good faith and the like.

14The applicant did not seek to categorize the agreement terms in issue as void as against public policy. It did seek to place the interpretive process in a public service and duty context that is not required and seems not the have been raised before the arbitrator.

15The applicant's remedy lies in the collective bargaining process. Its obligations under s. 5(2)(c) of the Canada Post Corporation Act, R.S.C. 1985, c. C-10 to have regard to the security of the mail not inconsistent with the provisions of the collective agreement. Limits on its managerial authority accepted in the collective agreement should not result in court action contrary to the principles under which judicial review must take place.

16The results flowing from the arbitrator's decision may sit uncomfortably in the mind, but that is not a reason for making insupportable judgments about what he did and why.

17This application will be dismissed with costs to the respondent fixed at $4,500.

1MOLLOY J. (dissenting): -- Canada Post applies for judicial review of the decision of Arbitrator Kevin Burkett dated February 21, 2000. The arbitrator upheld the grievances of 29 Canada Post employees who had been dismissed for misconduct relating to theft from the mails. There was no hearing on the merits. Rather, the arbitrator ruled that it was not open to Canada Post to present evidence in support of the dismissals because of its failure to give notice to the employees as required under Article 10.02 of the collective agreement. I have read the reasons for decision of Coo and Somers JJ. I agree with them as to the appropriate standard of review from the decision of the arbitrator in this case. I also agree with the conclusion at para. 11 [p. 452 ante] that there is no basis to interfere with the arbitrator's ruling in respect of the evidence about the Saint-Laurent, Quebec arbitration. However, I do not agree with their finding that the decision of the arbitrator in other respe cts is not patently unreasonable. I would have set aside the decision of Arbitrator Burkett and sent the grievance back for a determination on its merits.

2These reasons are organized under the following headings:

A. INTRODUCTION

B. RELEVANT PROVISIONS OF THE COLLECTIVE AGREEMENT

C. THE DECISION UNDER REVIEW

D. STANDARD OF REVIEW

E. ANALYSIS

1. General Principles

2. Does the Arbitrator's Interpretation Create an Absurd Result?

3. Is there a Possible Reasonable Interpretation of the Collective Agreement that does not Create an Absurd Result?

(a) Plain meaning interpretation

(b) Interpretation consistent with arbitration decisions

4. Is the Arbitrator's Decision Patently Unreasonable?

(a) Plain meaning interpretation

(b) Other reviewable error -- Failure to apply existing arbitration decisions

F. CONCLUSION

A. INTRODUCTION

3In 1996, Canada Post received a number of complaints from its bulk mail customers about thefts at its Gateway postal facility in Mississauga. The Gateway facility includes a bulk mail operation and a letter processing plant. The bulk mail operation processes between 300,000 and 500,000 parcels each day, including items such as credit cards, videotapes, CDs, books, magazines and other consumer products. The losses were significant. One bulk mail customer reported the loss of approximately 16,000 CDs and 845 videos, with a value of $188,000 over a five-month period. Another customer traced the loss of $200,000 in product to the Gateway facility. Security concerns led the Canadian Banker's Association to lease its own plant from Canada Post to process credit cards with enhanced third party security at a loss to Canada Post of $50,000 per month. There were also serious problems in the letter processing plant. In April 1996, approximately 50 to 100 pieces of depredated mail were being found within the plan t each day. In the fall of 1996, the value of missing remittances, which are sent from postal offices across the country for deposit in Toronto, was $100,000.

4Because of these serious concerns, Canada Post conducted a four-month internal investigation in which hidden cameras were used to record the activities of employees at the Gateway facility. On June 8, 1997, upon the completion of its investigation, Canada Post's security team turned over its evidence to the police. The police laid criminal charges against 29 employees. Canada Post then dismissed all 29 employees, giving each of them written notice within a matter of days that they were being discharged due to the circumstances surrounding their arrest and the charges laid. Those notices were given within ten days of the completion of Canada Post's internal investigation.

5The arbitrator's interpretation of the collective agreement requires Canada Post to provide written notice to an employee within ten days of Canada Post becoming aware of an infraction by that employee. This was held to be a substantive right accruing to the individual, such that failure to comply with it would void any discipline. The arbitrator found that although the collective agreement could be interpreted flexibly to allow the employer a reasonable time to complete its investigation against an individual employee, there was no basis for allowing a large-scale investigation of multiple employees to continue before individual notices were given. Therefore, the employees were entitled to reinstatement.

6Canada Post argues that this is a patently unreasonable interpretation of the collective agreement. Canada Post also objects to the arbitrator's rulings in respect of the admissibility of evidence about the union's position on a similar investigation in Saint-Laurent and in respect of the relevance of Canada Post's concerns about the admissibility of the videotape evidence.

7The Union argues that the arbitrator's decision was reasonable, was consistent with 20 years of arbitral jurisprudence directly on point and is entitled to deference from this court.

B. RELEVANT PROVISIONS OF THE COLLECTIVE AGREEMENT

8Article 10.02 of the collective agreement deals with an employee's personal file. The combined effect of Articles 10.02(a) and (b) is that a report about an employee's conduct cannot be used at an arbitration unless it has been given to the employee within ten days of the alleged infraction coming to the attention of Canada Post and placed in that employee's personal file. The text of Article 10.02(a) and (b) is set out above in para. 3 of the reasons of the majority.

9Service on the employee of a notice of disciplinary measure is dealt with in Article 10.01 which states:

10.01 (a) -- No disciplinary measure in the form of a notice of discipline, suspension or discharge or in any other form shall be imposed on any employee without just, reasonable and sufficient cause and without his or her receiving beforehand or at the same time a written notice showing the grounds on which a disciplinary measure is imposed.

10Surveillance of employees is prohibited except for the purpose of protecting the mail against criminal acts and cannot be used to support disciplinary action unless the employee is being disciplined because of criminal activity. Article 41.02 provides:

41.02 -- The watch and observation systems cannot be used except for the purpose of protecting the mail and the property of the State against criminal acts such as theft, depredation and damage to property. At no time may such systems be used as a means to evaluate the performance of employees and to gather evidence in support of disciplinary measures unless such disciplinary measures result from the commission of a criminal act.

11The collective agreement has a built in stare decisis clause in Article 9.103 which states:

9.103 -- The final decision rendered by an arbitrator binds the Corporation, the Union and the employees in all cases involving identical and/or substantially identical circumstances.

C. THE DECISION UNDER REVIEW

12The decision under review is a ruling on a preliminary point of law raised by the Union. Arbitrator Burkett held that as soon as Canada Post had knowledge of criminal misconduct by any one employee, the ten-day notice provision in Article 10.02 was triggered. He further held that unless a report about that conduct was served on the employee and placed in his or her personal file within that ten-day period, the employee was immune to discipline in respect of that conduct. Not only would any report about the employee's conduct be inadmissible, no other evidence of any kind could be called to establish the alleged grounds for dismissal. The Article 10.02 notice provision was found to be a substantive individual right of all employees, compliance with which is a precondition to any disciplinary action against them. The arbitrator acknowledged that the result of his ruling was that Canada Post would be unable to hold off providing notice to one employee pending a larger scale investigation, even when it had reason to believe that the first employee caught was not the only one involved. He further recognized that giving notice to the first dishonest employee detected by surveillance would likely compromise the secrecy of the employer's ongoing investigation and make it impossible to identify other wrongdoers. However, the arbitrator felt that he was required to reach the conclusion he did in light of the terms of the collective agreement, as interpreted over many years of arbitral jurisprudence. In the result, therefore, the employees were reinstated without a hearing as to the merits of the alleged grounds for dismissal.

13Canada Post had argued that, given the criminal nature of the conduct being investigated, it was entitled to wait until a decision had been made by the police about the laying of criminal charges before the requirement of providing notice to the employees was triggered. Canada Post cited concerns about the admissibility of the videotaped surveillance evidence in the absence of criminal charges. The arbitrator ruled that all of the cases in which the time for providing notice to employees had been extended to allow the completion of a criminal investigation had involved investigations by the police. Those cases were not applicable to this case because here Canada Post had done its own investigation. He further held that concerns about the videotape evidence were irrelevant because the videotape evidence was admissible regardless of whether criminal charges were laid (referring to his interim earlier ruling on that point a few months earlier).

14Canada Post sought to introduce evidence of a similar investigation into criminal conduct in a postal facility in Saint-Laurent, Quebec in 1994. After an investigation of several months Canada Post handed its evidence over to the police and a number of employees were charged with criminal offences. Canada Post dismissed those employees. Although the employees filed grievances, the Union did not complain that they were not subject to discipline because the ten-day notice period in Article 10.02 had not been met. It was conceded that the Saint-Laurent case did not create estoppel or waiver against the Union. The arbitrator held the evidence of what happened in Saint-Laurent was not relevant to his decision and refused to hear further evidence on the matter.

D. STANDARD OF REVIEW

15It is clear that the standard of review in this case is at the highest level of judicial deference. There is a privative clause in the legislation as well as in the collective agreement: Canada Labour Code, R.S.C. 1985, c. L-2, s. 58(1); collective agreement Article 9.102. The tribunal was dealing with the interpretation of a collective agreement, an issue at the core of its specialized expertise. The standard of review is therefore that of patent unreasonableness. In these circumstances, the court will not intervene unless the arbitrator has given the words in the collective agreement an interpretation they cannot reasonably bear or has committed an error that goes to jurisdiction: United Brotherhood of Carpenters & Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316, 102 D.L.R. (4th) 402; Canada (Attorney General) v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941, 101 D.L.R. (4th) 673; Canadian Assn. of Industrial, Mechanical & Allied Workers, Local 14 v. Paccar of Canada Ltd., [1989] 2 S.C.R. 983, (1989), 62 D.L.R. (4th) 437.

E. ANALYSIS

1. General Principles

16There are two fundamental and overlapping principles of contract interpretation that apply to this case. The first is that contract language should be given its plain and ordinary meaning unless the context requires otherwise or unless to do so would result in an absurdity. The second is that, if at all possible, contracts should be construed in a manner so as to avoid an absurd result. In an oft-quoted excerpt from Consolidated-Bathurst Export Ltd. v. Mutual Boiler & Machinery Insurance Co., [1980] 1 S.C.R. 888 at pp. 901-02, 112 D.L.R. (3d) 49 at pp. 58-59, Estey J. held:

Even apart from the doctrine of contra preferentum as it may be applied in the construction of contracts, the normal rules of construction lead a court to search for an interpretation which, from the whole of the contract, would appear to promote or advance the true intent of the parties at the time of entry into the contract. Consequently, literal meaning should not be applied where to do so would bring about an unrealistic result or a result which would not be contemplated in the commercial atmosphere in which the insurance was contracted. Where words may bear two constructions, the more reasonable one, that which produces a fair result, must certainly be taken as the interpretation which would promote the intention of the parties. Similarly, an interpretation that defeats the intentions of the parties and their objective in entering into the commercial transaction in the first place should be discarded in favour of an interpretation of the policy which promotes a sensible co mmercial result.

(Emphasis added)

17Collective agreements are contracts; contracts of a special nature, but contracts nevertheless. Basis principles of contract interpretation apply to the interpretation of collective agreements: Brown and Beatty, Canadian Labour Arbitration, 3rd ed. (Aurora, Ont.: Canada Law Book, 1999); Sunrype Products Ltd. v. Teamsters Union, Local 213 (1988), 4 L.A.C. (4th) 62 at p. 83; Codin v. Binsky, [1973] 2 W.W.R. 146 (Man. C.A.) at p. 148.

2. Does the Arbitrator's Interpretation Create an Absurd Result?

18Canada Post has a statutory obligation to protect the security of the mail. Section 5(2)(c) of the Canada Post Corporation Act, R.S.C. 1985, c. C-10 provides:

5(2) While maintaining basic customary, postal service, the Corporation, in carrying out its objects, shall have regard to . . . . .

(c) the need to conduct its operations in such manner as will best provide for the security of the mail;

This is an important public interest function, which cannot be bargained away. At the very least, it must be assumed that during the course of negotiating the collective agreement, it cannot have been the intention of Canada Post to ignore its statutory obligations. Therefore, if at all possible, the collective agreement should be interpreted in a manner that would not put Canada Post in breach of its statutory obligation and public duty to protect the security of the mail.

19In the face of reasonable grounds for believing that there was widespread criminal activity at the Gateway facility involving thefts from the mail, Canada Post had a statutory duty to take steps to solve the problem. The extent of the problem indicated that there must have been more than one employee involved. It was therefore reasonable and necessary to conduct the investigation covertly. Canada Post, wisely, attempted to have the police conduct the investigation but was informed that the police did not have sufficient resources to do so. Therefore, Canada Post had no alternative but to conduct the investigation itself. As a result of the investigation done by Canada Post, the police laid criminal charges against 29 employees, thereby confirming the reasonableness of Canada Post's concern about the widespread nature of the criminal activity involved.

20Having undertaken an intensive surveillance investigation designed to identify the extent of problem and all of the individuals involved, it would be ridiculous to compromise that investigation by notifying the very first wrongdoer identified that he/she had been identified and was being dismissed. If Canada Post had done that, it is most unlikely that other wrongdoers would subsequently have been detected. This, however, is the procedure dictated by the arbitrator's decision. Canada Post took reasonable and proper steps to deal with a serious problem as it was required to do by law. Having done so, and having identified 29 employees it believes to have been involved in theft from the mail, Canada Post is left in a position where it is unable (under the arbitrator's interpretation of the collective agreement) to take any disciplinary action against those employees. This is so even in the absence of any prejudice to any individual employee as a result of the delay in being given notice and even though s ome of those employees have since been convicted of the criminal charges against them. As a result of the arbitrator's interpretation of the agreement, those employees are required to be reinstated and cannot be disciplined in any way. This leaves Canada Post with no realistic ability to investigate criminal activity involving a large number of perpetrators. It must either conclude its investigation within ten days of identifying the first wrongdoer (knowing that other wrongdoers remain employed and undetected), or it can continue the investigation, identify all of the criminal elements in its employ, but then be forced to continue their employment. To me, and I would suggest to any rational thinker, this is an absurd result.

21Not only is the result absurd, it is inconsistent with the statutory obligation of Canada Post to protect the mail and inconsistent with what must have been the intention of Canada Post in respect of the collective agreement. One should only be driven to such an interpretation if it is the only reasonable interpretation of the terms of the contract.

3. Is there a Possible Reasonable Interpretation of the Collective Agreement that does not Create an Absurd Result?

22There are two other possible interpretations of the collective agreement which protect the right of an employee to receive notice of an alleged infraction in a reasonable time while at the same time allowing Canada Post to complete a full investigation of wrongdoing by numerous employees before delivering dismissal notices to individual employees. One such interpretation involves a plain and literal reading of the contract language. The other is consistent with, but expands upon, a line of arbitral jurisprudence interpreting Article 10.02 as providing protections that go beyond its literal meaning. Both of these interpretations avoid what I have described above as the "absurd" result created by Arbitrator Burkett's interpretation.

(a) Plain meaning interpretation

23I will deal first with the "plain meaning" interpretation of the collective agreement. Article 10.01 deals with notices of discipline, suspension or discharge. The provision is silent as to the time within which such notices must be given to the employee, other than that it must be before or at the same time as the discipline imposed. However, there is established jurisprudence interpreting this provision (and others like it) as requiring the employer to give notice to the employee within a reasonable time after the alleged infraction so that the employee is not prejudiced by any delay: Williams v. Treasury Board (Post Office Department), August 13, 1979 (Arbitrator Mitchell); C.U.P.W. v. Canada Post Re: MacKinnon, January 6, 1989 (Arbitrator Jolliffe); Ottawa Fibre Inc. v. Energy and Chemical Workers Union, Local 1541, December 7, 1992 (Arbitrator Abbott). This provision, as interpreted by the case law, protects the employee's right to timely notice of an infraction serious enough to warrant disciplinary action.

24Article 10.02 deals with "report(s) relating to the employee's conduct or performance". Not all "reports" will involve incidents deemed by the employer to be sufficient in and of themselves to warrant discipline. For example, a "report" might refer to incidents of late attendance or poor job performance which by themselves are not serious but which, when combined with other similar incidents, might warrant discipline. It is clear from the different language used in Articles 10.02 and 10.01 that the "report" contemplated by 10.02 is not limited to the notices of discipline referred to in 10.01. However, a notice of discipline is a document "relating to an employee's conduct or performance". Therefore, if Canada Post wishes to place a notice of discipline in an employee's personal file, it must comply with the mandatory language of Article 10.02 by first sending it to the employee within ten calendar days of when the alleged infraction came to the attention of Canada Post.

25Article 10.02(a) dictates the result of failing to put a "report" in an employee's personal file. It is at this point that my "plain and ordinary meaning" interpretation parts company with the interpretation placed on the provision by Arbitrator Burkett (and others). Article 10.02(a) states that "no report relating to the employee's conduct or performance may be used against him or her in the grievance procedure nor at arbitration unless such report is part of the said file" (emphasis added). The plain and ordinary meaning of this provision is that the report itself cannot be used at the arbitration. This does not mean that no other evidence with respect to an incident giving rise to discipline is admissible at an arbitration. The section deals only with the admission of reports from the personal file. In particular, there is no provision in the agreement that prohibits disciplinary action unless a "report" was served on the employee within ten days and then placed in th e personal file. Thus, on a literal (or plain meaning) interpretation of Articles 10.01 and 10.02, the failure of Canada Post to give notice under Article 10.02 with respect to the criminal activity it discovered in its investigation would not be an impediment to proceeding to discipline against an employee with respect to that incident (provided that reasonable notice under Article 10.01 is given). Although the "report" itself would not be admissible evidence unless the Article 10.02 notice provision was observed, the employer would be entitled to call other evidence to prove its case.

26This "plain meaning" interpretation I have described is the one that was adopted by the British Columbia Supreme Court in the only judicial decision on point to which I was referred: Canada Post Corp. v. C.U.P.W., [1992] B.C.J. No. 333 (S.C.). In that case, Meiklem J. dealt with a provision of the C.U.P.W. letter carriers' collective agreement that is virtually the same as Article 10.02(a) in this case (which involves the C.U.P.W. inside workers). The relevant letter carriers' provision stated:

9.12(a)(i) . . . No disciplinary report, notice or document relating to an employee's conduct or performance may be used against him in the grievance procedure or at arbitration unless such report is part of the employee's file.

Meiklem J. held that the failure of Canada Post in that case to place documents in the employees file meant that the documents themselves were not admissible and that secondary oral evidence as to contents of the documents was also inadmissible. However, this did not preclude witnesses from testifying as to their independent recollection of events, even if the events described were part of the subject-matter of the documents. Meiklem J. found that the arbitrator's refusal to allow Canada Post to introduce independent viva voce evidence as to employee misconduct with respect to the incident giving rise to dismissal was a breach of the rules of natural justice giving the parties the right to be heard.

27There is also arbitral jurisprudence supporting an alternative "plain meaning" interpretation. One of the earliest decisions interpreting Articles 10.01 and 10.02 of this collective agreement was the 1977 decision of Arbitrator Lachapelle in Gascon v. Treasury Board (June 10, 1977). The arbitrator held that Article 10.02(a) governing the submission of a "report" at an arbitration proceeding did not deal with the validity of a report that is the subject of the arbitration itself. Rather, it applied only to the use of reports already in the employee's personal file when a grievance or arbitration was already underway. Arbitrator Lachapelle therefore concluded (at p. 13) that an employee's dismissal "is not invalidated by the fact that the dismissal report did not constitute part of his personal file".

28In the late 1970s there were other decisions that did not follow Gascon on this point. In 1979, Arbitrator Mitchell in Williams v. Treasury Board (Post Office Department), supra, considered the two lines of authority and opted not to follow Gascon. Since then, bound by Article 9.103 of the collective agreement (the stare decisis clause), other arbitrators have followed Williams (this issue is discussed further at paras. 47-50 below [pp. 472-475 post]). This, however, has not been entirely without protest. For example, Arbitrator Swan in two 1983 decisions (O'Brien and Fitzgerald) followed the Williams decision but only because he was bound to do so. He stated in Canada Post v. C.U.P.W. Re: Fitzgerald (unreported, September 7, 1983) at p. 6:

As I observed in O'Brien, were I looking at this matter for the first time, I would be of the opinion that the provisions of Article 10.02 are not designed to deal with matters which have been the subject of formal discipline, but only with reports "relating to the employee's conduct or performance" which are to be used for the purpose of building a file rather than to support some immediate disciplinary action. Other arbitrators have not taken this approach, however, and I therefore feel constrained to the distinction set out in the Williams decision . . .

29Therefore, there is a rational, plain meaning interpretation of the collective agreement that does not create the absurd result reached by Arbitrator Burkett. There is nothing in the language of Articles 10.01 and 10.02 that requires the notice of discipline to be served and filed within the times stipulated for "reports" under Article 10.02 in order to validate the discipline. It is still open to the employer to call evidence to support the disciplinary action taken, provided that the protections afforded by Article 10.01 are observed. As will be more fully explored below, there are two problems in applying this "plain meaning" interpretation: (1) it is contrary to many years of established arbitration jurisprudence; and (2) it was not argued before Arbitrator Burkett. I do not see these as insurmountable problems, for reasons set out below. However, because of these problems I consider it important to address an alternative interpretation of the collective agreement which is consistent with the arbitral jurisprudence, but which nevertheless does not produce the same result as that reached by Arbitrator Burkett.

(b) Interpretation consistent with arbitration decisions

30The alternative interpretation consistent with established jurisprudence involves a flexible interpretation of the phrase "within ten (10) days after the date of the employee's alleged infraction . . . coming to the attention of the Corporation" as it is used in Article 10.02(b). There is ample arbitral authority for interpreting this phrase in a flexible manner. To understand the evolution of this concept, it is useful to look at the history of arbitration decisions on this issue. As I noted above, the Gascon decision issued in 1977 was one of the first on point. At the time of Gascon, Article 9.103 did not exist and subsequent arbitrators were not bound to follow the principles established in Gascon. In the 1979 Williams decision, the arbitrator reviewed the existing authorities and specifically declined to follow Gascon. Article 9.103 came into the collective agreement in 1981, requiring arbitrators to follow precedent established by other arbitrator s in cases involving identical and/or substantially identical circumstances. Thereafter, the Williams case emerged as the seminal decision on the interaction between Articles 10.01 and 10.02 and the rights of both the employer and employees under Article 10.02. All cases since then have followed and applied the principles established in Williams (although not without reservations, as I have noted above).

31At para. 55 of the Williams decision, Arbitrator Mitchell summarized his conclusions with respect to Article 10 in the following oft-quoted passage (to which I have added emphasis with respect to the issues most relevant in this case):

I would summarize my interpretation of Article 10 as follows:

(a) If the employer has cause for complaint against an employee by reason of his conduct or performance it must prepare a report on that perceived misconduct or unsatisfactory, performance and send a copy to the employee within the stipulated time frame set out in Article 10.02 (b).

(b) Hence the entire record of misconduct or unsatisfactory performance of an employee must be in reports which are properly part of an employee's personal file.

(c) Only reports properly in the personal file can be used against an employee in the grievance procedure or at adjudication whether such reports reflect the culminating incident or the past record of an employee.

(d) I would define a report as a document prepared by the employer which relates to a complaint regarding the conduct or performance of an employee.

(e) The evidence admissible at adjudication is limited to the grounds stated in the discharge or discipline notice and it is the employer's duty to set out those grounds in that notice. These grounds are limited to the infractions set out in reports which are properly part of the employee's personal file. Where grounds stated in the discipline notice lack sufficient specificity it is the duty of the grievor or his counsel to request the employer to furnish particulars before the commencement of the hearing to avoid delay at adjudication. The employer should respond to such a request forthwith.

(f) The conclusion as to whether an alleged infraction occurred may require an investigation by the employer of the alleged misconduct. The circumstances surrounding an incident may or may not lead the employer to conclude that the misconduct warrants a report of an infraction. If the employer decides that an infraction did occur then it must also decide whether or not disciplinary action is warranted but this latter decision is a separate matter.

(g) The time within which an alleged infraction can be deemed to have come to the attention of the employer depends on the particular circumstances surrounding the incident. In normal circumstances it ought not to take longer than a few days. However, in the context of an illegal strike in which thousands of employees participate and perhaps a hundred or more are involved in a variety of incidents of apparent misconduct, the employer should not be expected to be able to assess the apparent misconduct as constituting an infraction within the same time frame as is required in isolated cases of misconduct during normal operations. Furthermore, if the employer decides to impose disciplinary penalties on a hundred or more employees much more time is required to avoid discriminatory results in such circumstances than in isolated cases warranting discipline.

(h) There is no time limit set out in Article 10 within which the employer must send a discharge or discipline notice to an employee. I would conclude only that the employer must do so within a reasonable time having regard to the circumstances in each case.

(Emphasis added)

32Under the Williams decision, employees have more protection than had been the case under the Gascon interpretation of the agreement. In particular, the culminating incident giving rise to a dismissal was found to fall within Article 10.02. Therefore, any notice of discipline is limited to matters that have been subject to a report served within the time required under Article 10.02. It would appear that subsequent decisions clarified this to be a substantive right with the result that non-compliance will nullify discipline. In my view, this interpretation grants more protection to employees than is suggested by the plain meaning of Article 10.02. However, Williams does provide a balanced approach in that an important (and countervailing) protection for the employer is also read into Article 10.02(b). Arbitrator Mitchell held that the ten-day time period in Article 10.02(b) would only begin to run after the employer had a full opportunity to investigate the alleged infraction and had time to pursue a reasonable decision-making process as to what discipline might be appropriate. Williams, and other cases since, recognize a distinction between the time required to deal with an isolated incident of poor performance as compared to a serious incident warranting discipline. There is also consistent recognition of the need for the employer to conduct a full investigation, particularly where there are a number of incidents or complex facts: Canada Post v. C.U.P.W. Re: Paradis, May 30, 1997 (Arbitrator McCaffrey); Canada Post v. C.U.P.W. Re: Joong, March 7, 1994 (Arbitrator Burkett). Arbitrator Mitchell stated in Williams at p. 19:

The date of an incident is readily determined in most instances. A question as to whether the circumstances involved in the incident support an allegation that an infraction warranting the disciplinary action against an employee is quite a different matter. Such a conclusion requires an investigation including an opportunity to the employee to explain his conduct. In my opinion, the parties must have intended to give the employer a reasonable time in which to conduct such an investigation. Therefore, the ten days following which an alleged infraction came to the attention of the employer can only begin from the date the investigation resulted in the conclusion by the employer that an infraction warranting disciplinary action did occur.

(Emphasis added)

33In order to extend the ten-day notice period, the onus is on the employer "to demonstrate when it was reasonably able to proceed with disciplinary action": see Canada Post Corp. v. C.U.P.W. Re: Marini (1987), 26 L.A.C. (3d) 403 (Arbitrator Swan) at p. 422 and cases referred to therein. In Williams, the arbitrator held that the time required by the employer to complete its investigation and make a decision would depend "on the particular circumstances surrounding the incident". Among the particular circumstances that operated to extend the ten- day period in Williams was the fact that numerous employees and infractions were involved and the need for the employer to engage in a centralized and consultative decision-making process because the incidents involved took place during an illegal strike. Since Williams there have been numerous decisions dealing with special circumstances that would extend the time restrictions under Article 10.02(b). For example, arbitrators have consistently held that where there is a criminal investigation by the police, the ten-day notice period does not begin to run until the investigation has been completed and charges laid. In Marini, which involved an undercover RCMP drug investigation at a Canada Post facility, Arbitrator Swan held that the ten-day notice period was not triggered until Canada Post was informed by the RCMP that they were going to lay charges. Arbitrator Norman made a similar ruling in Canada Post Corp. v. C.U.P.W. Re: Ortman (April 13, 1998), wherein the employer did not take disciplinary action until several days after the alleged incident because of ongoing police investigations of other employees involved in the same incident, and because of the employer's decision to consult with the head of Labour Relations for the Mid-West Region before scheduling a formal disciplinary interview. Also see: Canada Post Corp. v. C.U.P.W Re: Nelson, September 27, 1994 (Arbitrator Byrd) ; and Canada Post Corp. v. C.U.P.W. Re: Joong, supra, wherein the arbitrator concluded that the time limit set out in Article 10.02(b) does not begin to run during the period in which the employer is consumed in an ongoing investigation designed to identify a suspect or suspects involved in an alleged fraud.

34There were many factors in this case that could reasonably be found to fall within the category of "special circumstances" as that concept has developed in the case law.

-- The problems being experienced by Canada Post at its Gateway facility were serious, widespread, and likely involved multiple offenders.

-- The activity of the wrongdoers was a serious threat to the security of the public mail system and Canada Post was therefore under a statutory obligation to correct the problem.

-- Canada Post made repeated, but unsuccessful attempts, to persuade the police to investigate. If the investigation had been conducted by the police, there was ample precedent for the ten-day notice period only beginning to run when the investigation was complete or criminal charges had been laid: see Marini and other cases cited by Arbitrator Burkett at p. 25 of his decision).

-- The only effective method of investigating this kind of activity was by covert surveillance.

-- It was not possible to give earlier notice to employees without compromising the integrity of the investigation, which would have allowed other wrongdoers to escape undetected.

-- In order to maintain secrecy Canada Post management in key decision-making roles were not advised of the ongoing investigation. Some additional time was therefore required after the evidence had been assembled to consult management and make decisions as to the appropriate action to be taken.

-- It was reasonable to consider the nature and extent of the wrongdoing and the number of employees involved before making a decision as to the disciplinary steps to be taken.

-- Given the nature of the allegations being made against the employees, Canada Post considered it important to receive confirmation from the police that the evidence it had assembled supported an allegation of criminal activity against the specific employees identified.

-- Canada Post was concerned about the admissibility of the videotape evidence in the absence of criminal charges.

-- Given the nature of the conduct and the number of employees involved, the covert investigation was completed in a relatively short period of time.

-- Notices of dismissal were given to the employees and placed in their personal files within ten days of the completion of Canada Post's investigation.

35Thus, there is a second possible interpretation of the collective agreement, consistent with existing precedent, which when applied to the facts of this case does not give rise to the result reached by Arbitrator Burkett. It is not my intention to suggest that either of the two interpretations of the agreement I have described is the right one. My point is that there are two possible interpretations of the agreement that do not create an absurd result. As I have stated above, an agreement should not be interpreted so as to create an absurd result if there is another rational or reasonable alternative. The next question to be answered, therefore, is whether in that context the arbitrator's decision can be said to be "patently unreasonable".

4. Is the Arbitrator's Decision Patently Unreasonable?

36Arbitrator Burkett was sympathetic to the dilemma confronted by Canada Post under his interpretation of the collective agreement. He stated at pp. 43-44 of his decision:

I have a full understanding of the predicament faced by the Corporation in this matter; a predicament which, on the evidence, was concerning to those in charge of this investigation. On the one hand, the Corporation, governed by its statutory mandate to protect the integrity of the mail, was required to respond to what appeared to be a widespread theft problem at the Gateway facility and to do so by the only effective means available; covert video surveillance. On the other hand, cognizant of the 10 day notice requirement that had been a part of the collective agreement for some 18 years, it understood that the practical effect of responding to individual acts of misconduct within 10 calendar days would be to prejudice the secrecy of the ongoing investigation and thereby its objective.

37There are two aspects of Arbitrator Burkett's decision that would prevent him from reaching either of the two alternative interpretations I have suggested above. First, he could not adopt the "plain meaning" interpretation because of his ruling that Article 10.02 applied to the incident giving rise to the dismissal and that it prevented any evidence whatsoever from being called if no report had been placed in the file. His finding in that regard is based on 20 years of arbitral jurisprudence. Second, he did not apply the interpretation based on extending the ten-day notice period to accommodate the employer's investigation because of his conclusion that the right to notice accrued to the individual employee and could not be reduced in order to accommodate the investigation of other employees. In reaching this conclusion he also relied upon the stare decisis clause in the collective agreement but in my view, improperly.

(a) Plain meaning interpretation

38As I noted in para. 45 above [p. 472 post], in dealing with whether the arbitrator's failure to apply the "plain meaning" interpretation was patently unreasonable, I must address the fact that the possibility of this interpretation was not argued before the arbitrator (having been raised for the first time in this court) as well as with the fact that the arbitrator was bound by Article 9.103 to apply existing case law. The answer to the first point is bound up in the second. It is clear that since the Williams decision in 1979 arbitrators have applied an interpretation of Articles 10.01 and 10.02 that is not consistent with the "plain meaning" interpretation I have suggested. Arbitrator Burkett was bound by Article 9.103 to apply that interpretation. It would have been useless for counsel for Canada Post to have argued otherwise before the arbitrator. Since there was no point in raising the argument before the arbitrator, the applicant should not be faulted for having raised it fo r the first time in this court. The crux of the problem, therefore, is whether this court on review is prevented from finding the arbitrator's decision to be patently unreasonable in light of the 20 years of jurisprudence behind it.

39It is clear that a long history of consistent arbitral jurisprudence on a particular point does not oust the jurisdiction of this court on judicial review. It is also clear that Article 9.103 does not restrict, or purport to restrict, the review powers of this court. Therefore, the real question is not whether this court can find the interpretation to be patently unreasonable in light of its long history, but rather whether the court should do so. Although there is a long history of arbitral jurisprudence on this point, this is the first time a court has been called upon to review the issue. This is, therefore, a case of first impression as far as the courts are concerned. If the interpretation is a patently unreasonable one, it remains patently unreasonable notwithstanding the fact that it has been applied by other arbitrators. A decision is either patently unreasonable or it is not. It doesn't become reasonable because others have done the same thing. That is not to say that the court is not guided by the decisions of arbitrators over the years or by the fact that notwithstanding the interpretation placed on the provision it has remained in the agreement unchanged over many renegotiations of the collective agreement. These are factors to be taken into account in assessing whether the decision is patently unreasonable. However, they cannot be determinative of that issue.

40Looking at the decision of Arbitrator Burkett in isolation, I conclude that his interpretation of Article 10.02 is patently unreasonable. The arbitrator interpreted the agreement by reading into Article 10.02 rights for both employees and the employer that go beyond the words of the agreement itself, by expanding the right of an employee to the protection of the ten-day notice of a report under Article 10.02 to incidents giving rise to discipline under Article 10.01; by prohibiting the use of any evidence about an incident rather than simply the use of the report and by interpreting the ten-day notice period as only commencing after the employer has had a reasonable period of time to investigate and make a decision. Such an interpretation is precluded by Article 9.100 of the collective agreement which states that "the arbitrator shall not modify the provisions of this collective agreement". The arbitrator's decision also flies in the face of the plain meaning of the language used in the agreement. The interpretation placed on the agreement by the arbitrator creates an absurd result in that the employer is rendered unable to combat widespread criminal activity in the workplace and is required to continue in its employ a large number of individuals whom it believes to have committed crimes in the course of their employment (many of whom have already been convicted of such crimes by a criminal court). All of this is, in the absence of any prejudice to the employees, as a result of the delay in their receiving notice of the accusations against them. The absurdity of this result is easily avoided by simply giving the words used in the agreement their ordinary, plain meaning. The result reached is, therefore, contrary to Article 9.100 of the agreement, inconsistent with the statutory obligation of Canada Post to protect the security of the mail, contrary to what must be taken to be the intention of the parties, and inconsistent with fundamental principles of contract interpretation. I therefore conclud e that the arbitrator's decision is patently unreasonable and that he has given the words of the collective agreement a construction that they cannot reasonably bear.

41In the circumstances of this case, I do not find the 20 years of arbitral jurisprudence to be a persuasive factor supporting the reasonableness of the decision under review. Although some of the arbitrators might well have come to their interpretations independently, the fact remains that they were required to do so by Article 9.103. Therefore, the effect of consistent arbitral jurisprudence extending over 20 years loses its force. It is consistent because it is required to be so. Further, this is the first occasion where this extreme effect of the interpretation has been felt. Since the repercussions of the interpretation placed on the agreement on Canada Post's ability to deal in an effective manner with widespread criminal activity in the workplace were not apparent until this case arose, the fact that the parties did not see fit to renegotiate the relevant provisions before now is less significant than might otherwise be the case.

42In any event, in my view it is no answer to say that it should be left to the parties to resolve this anomaly through the collective bargaining process. First, that could be said in every case and belies the existence of judicial review at all. Second, that is a solution that may be more theoretical than practical. Third, it doesn't solve Canada Post's dilemma in this particular case. Canada Post continues to employ 29 employees whom it has reason to believe are dishonest and to have breached the security of the mails. Several of those individuals have already been convicted of criminal offences arising from the evidence upon which Canada post seeks to terminate their employment. Continuing to employ these people is not a good situation. This very serious ongoing problem cannot be solved by amending the terms of the collective agreement in future bargaining sessions with the Union.

(b) Other reviewable error -- failure to apply existing arbitration decisions

43In any event, quite apart from the error in failing to apply the plain and ordinary meaning of the terms of the collective agreement, Arbitrator Burkett erred in the application of existing arbitral jurisprudence. As discussed above, there are a number of cases dealing with what constitutes "special circumstances" for the purpose of determining when the ten-day notice requirement under Article 10.02 is triggered. It was open to the arbitrator to extend the principles established in those cases to encompass the investigation undertaken by Canada Post in this case. Therefore, assuming that the interpretation of Articles 10.01 and 10.02 developed since the Williams decision is reasonable (although in my view it was not), it was still possible to stay within that line of cases without producing the absurd result created here.

44The source of the problem is the determination by Arbitrator Burkett that an employee's right under Article 10.02 to timely notice is an individual substantive right and cannot be balanced against the employer's right to complete its investigation of other suspects. There is no specific case to that effect. Indeed, Arbitrator Burkett's reasoning is devoted to distinguishing the cases cited by Canada Post as being contextually different from the case before him. He does not refer to any case specifically refusing to extend the employer's right to fully investigate where the investigation is with respect to other employees, nor was any such case cited by the Union on the hearing before us. There is no case specifically on point supporting Canada Post's argument, but neither is there a specific case refuting it. Therefore, it would appear that this is the first case to deal with this particular issue. That being so, Article 9.103 does not compel any particular result because it applies only to "cases invo lving identical and/or substantially identical circumstances".

45All arbitrators return to Williams as the seminal case of the interaction between Articles 10.01 and 10.02 and the rights created under Article 10.02. Williams interpreted Article 10.02(a) as providing to an employee a substantive right that is not part of the plain meaning of the words used. The actual language of Article 10.02(b) imposes on an employer a strict ten-day requirement for notice without any flexibility to allow the employer time to investigate. However, at the same time as the employee's rights were expanded, Williams introduced a countervailing protection for the employer by reading into Article 10.02(b) a flexible standard to take into account special circumstances of the employer and to allow for investigation and decision-making prior to the ten-day notice period commencing. Even if that interpretation is accepted as reasonable, Arbitrator Burkett's decision became patently unreasonable when he read in the employee protection added by Williams to Article 10.02(a) but failed to recognize the countervailing employer protection that Williams read into Article 10.02(b).

46Canada Post relied upon a line of cases in which the employer was not subject to the ten-day notice requirement until after a criminal investigation involving more than one employee had been completed. Arbitrator Burkett distinguished those cases on the grounds that those were police investigations whereas the investigation here was done in-house by Canada Post.

47Canada Post relied upon a line of cases in which the ten-day time period did not begin to run until after the completion of the employer's investigation. Arbitrator Burkett distinguished those cases on the grounds that "with two exceptions, the in-house investigation focused on the identification of a single suspect". The two exceptions he noted were Williams and Ortman. Arbitrator Burkett distinguished Williams and Ortman on the grounds that the employer's right to investigate in those cases was within the context of an illegal strike involving many acts of misconduct and that more time was therefore required to investigate the misconduct than would be the case for isolated acts of misconduct during normal operations. He held that Williams and Ortman did not suggest that "even though the Corporation has made a determination as to the identity of an individual suspect who, in its mind, has engaged in disciplinable conduct, it is free to ignore the article 10.02 requirement in respect of that individual". In my view, this is not an entirely fair description of Williams or Ortman. In Ortman during the course of a series of illegal rotating strikes, the grievor had thrown a piece of concrete at a bus carrying replacement workers, breaking a window in the bus and injuring a passenger inside. The police arrested him on the spot and he was criminally charged that same day. Canada Post failed to place a report in the employee's file within ten days of the incident, although it clearly had knowledge of the incident that day and suspended the employee the next day. The arbitrator extended the time for notice by taking into account "the unusual circumstances of a witnessed egregious act of mob inspired violence", the reasonableness of local management consulting the Head of Labour Relations for the Mid-West Region before scheduling an interview with the employee and the need to coordinate discipline to be imposed on numerous em ployees to avoid discriminatory results": Ortman at p. 6. In Williams the incident giving rise to discipline had also arisen in the context of a national strike. The infraction involving this particular grievor was witnessed on the day it occurred and reports were prepared by two supervisors. The delay that occurred before these reports were placed in the employee file was caused by the reports being passed up the chain of command. The arbitrator held that in the circumstances of illegal picketing by hundreds of employees it was reasonable for the employer "to require a high degree of centralization of the decision-making process" so as to avoid "discriminatory results". I agree with Arbitrator Burkett that neither of these decisions is directly applicable to the facts of this case. However, neither do they support the Union's position that only delays referable to identification of the particular employee and investigation only with respect to that employee can extend the ten-day notice p eriod. In my view, both Williams and Ortman stand for the proposition that the particular special circumstances of the employer can be taken into account in determining whether the notice period should be extended. This is a proposition which, although not dispositive of Canada Post's argument in this case, is certainly supportive.

48Canada Post argued that it was reasonable for it to await the laying of criminal charges in order to validate the admissibility of video surveillance evidence, without which it would have no means of proving its allegations against the employees. Arbitrator Burkett refused to take this factor into account on the grounds that Canada Post was "mistaken" as surveillance videotape is admissible regardless of whether criminal charges are ever laid. With respect, this misses the point entirely. The point is not whether, as a matter of law, Canada Post was required to wait for criminal charges to be laid before it would be entitled to use the videotapes as evidence. The issue before the arbitrator, which he failed to consider, was whether in the circumstances it was reasonable for Canada Post to be concerned about the admissibility of this evidence without criminal charges. If it was reasonable to get confirmation from the police that there was a prima facie case of criminal conduct, then the time necessary to get that police confirmation should arguably be taken into account in determining when the employer's investigation was complete. This applies to individual employees as well as to the group of 29 as a whole. There was no case law on point and the videotape clause in the agreement is not a model of clarity. Canada Post's expectation that this issue would be raised by the Union at the subsequent arbitration was not only reasonable, but true. Even in the face of criminal charges the Union took the position that there had to be findings of guilt before the tapes were admissible. The issue obviously wasn't clearcut. It was raised as a preliminary point before Arbitrator Burkett at an early stage. He reserved on the point and took 33 typewritten pages to set out his reasons. In those reasons, he noted at p. 27 that"This is an issue of first impression which is made more difficult by language which, in hindsight, is not as clear or specific as it could have been." Surely in such a circumstance it was reasonable for Canada Post, with respect to each individual employee, to consider as part of its investigation and decision-making process, the admissibility of its only evidence of wrongdoing. At the very least, this was a relevant factor for the arbitrator to have considered and he failed to do so.

49Canada Post relied upon a number of cases in which similar provisions in other collective agreements had been interpreted as requiring a balancing of interests and a consideration of the reasonableness of the employer's delay in providing notice to the employee: Ottawa Fibre Inc. and Energy and Chemical Workers Union, Local 1541, supra; National Grocers Co. v. Teamsters (1983), 11 L.A.C. (3d) 193 (Arbitrator Langille). Arbitrator Burkett distinguished those cases on the grounds that the collective agreements involved were worded differently and did not impose consequences for non-compliance, such that the provisions were properly characterized as procedural rather than substantive. Again, I agree that these decisions are not directly on point. However, in my view, Williams imports a reasonableness type standard into Article 10.02 and the cases cited by Canada Post are relevant, although not dispositive, on the issue of what may constitute "special circumstances" for the purpose of extending the time for serving notice.

50There is nothing in the language of the collective agreement or in the decisions of arbitrators interpreting that agreement that prevents a consideration of rational and important circumstances of the employer as a factor extending the time for delivery of a notice under Article 10.02. Neither is there anything specific in the agreement or in the case law prohibiting a consideration of factors unrelated to the circumstances of the individual employee involved. There was no direct precedent for allowing Canada Post to delay putting one identified employee on notice in order to preserve the secrecy of an ongoing covert investigation vital to the operation of Canada Post and to the security of the Canadian mail system. Neither was there any direct precedent preventing it. As stated above, if there is a reasonable interpretation that protects the interests of the parties and their reasonable expectations under the agreement and which does not unduly strain the language of the agreement, it is to be preferred over an interpretation that produces an absurd result. This is even more the case with respect to determining when the company had knowledge since it does not require overriding, or even distinguishing, existing precedent.

F. CONCLUSION

51In the result, therefore, under either of the two analyses above, I would have found the arbitrator's decision to have been patently unreasonable and I would have directed that the arbitration proceed to a determination on its merits before a different arbitrator.