COURT FILE NO.: 376/04

DATE: 20050223

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

LANE, JARVIS AND SWINTON JJ.

B E T W E E N:

TORONTO TRANSIT COMMISSION

Applicant

• and -

THE AMALGAMATED TRANSIT UNION, LOCAL 113

Respondent

Christopher G. Riggs, Q.C., for the Applicant

Ian J. Fellows, for the Respondent

HEARD at Toronto: February 11, 2005

Swinton J.:

[1] This is an application for judicial review of an award of the majority of a board of arbitration dated May 20, 2004. The majority held that it was not reasonable in the circumstances for the Toronto Transit Commission (“TTC”) to impose an automatic two-year lockout on reapplications for a position subject to Subway Yard Operator (“SYO”) training or Subway Rule Book (“SRB”) training as a consequence of an employee’s failure to complete the applicable training successfully.

[2] In response to a fatal subway accident in 1995, the TTC introduced a comprehensive scheme of subway safety training and testing. The SYO training is a 15-day programme that covers rules and signals pertaining to subway train operations, equipment and troubleshooting. The SYO Recertification Program involves a three-day program with training and a written and practical test.

[3] The SRB training is a two-day program that involves training all employees who work at track level on rules for safe work in the subway system. The SRB Recertification Program is a one-day program.

[4] If an employee failed to complete one or both of those training programs, where the training was a requirement for his or her job, the employee was required to vacate the job. The individual was then barred for two years from reapplying for any position which required the successful completion of the training. According to the arbitration award, the objective behind the two year “lockout” was to “ensure a safe operation for employees and passengers”. Moreover, TTC management was of the opinion that “to be a good gatekeeper, the tests had to carry consequences.”

[5] As a result of a union policy grievance, the arbitration board had to determine whether the TTC had the authority to impose the two year lockout. The majority stated, at pp. 23-24 of the award:

Although we agree that generally it is not our role to try and draw fine lines or second-guess a management decision, in this case it is our role to determine whether in imposing a lockout the Commission violated the collective agreement. We must assess the reasonableness of management’s decision to impose a two-year lockout in the circumstances before us, particularly in light of the potential consequences that the lockout holds for individual employees.

[6] The majority went on to hold that a two year lockout was too long and was not reasonable, basing the conclusion on several considerations. First, they held that it was unfair to impose a very serious consequence on employees who failed the training based on the need to ensure that the employees would take the training seriously, when the reason for the lax approach resulted, at least in part, from a permissive attitude on the part of management. Second, the majority considered the potentially onerous consequences for an employee who failed the training. Third, they mentioned the ability of the TTC to design the training programmes so as to reduce the expense of retraining for those who failed. Finally, they referred to the ban of six months on bidding for vacancies when there has been unsatisfactory job performance, found in Article 6.4 of the Maintenance Seniority Regulations, which is intended to be disciplinary. As a result, the majority concluded that a six month lockout was reasonable.

[7] The TTC has sought judicial review on the basis that the majority decision is unreasonable, given the terms of the management rights clause in the collective agreement. Section 8, the management and discipline clause, reads in part as follows:

Except as otherwise provided in this Agreement, the management, supervision and control of the Commission’s operations and the direction of the working force remains an exclusive Management function. This right of Management shall, without limiting the generality of the foregoing, include the right to plan, schedule and direct and control operations, to study or introduce new or improved methods, equipment and facilities; to maintain or establish new or improved regulations covering the operation of the system ….

Section 6 of the collective agreement provides that an arbitration board “shall not be entitled to make any decision inconsistent with the provisions of this Agreement, or to alter, modify, add to or amend any part of the Agreement.”

[8] Both parties agreed that the standard of review of the decision of the board is reasonableness, given Voice Construction Ltd. v. Construction & General Workers’ Union, Local 92, 2004 SCC 23, [2004] 1 S.C.R. 609 at para. 30.

[9] The Court of Appeal made it clear in Re Metropolitan Toronto Board of Commissioners of Police and Metropolitan Toronto Police Association (1981), 33 O.R. (2d) 476 that a management rights clause like the one in the current collective agreement gives management the exclusive right to determine how it shall exercise the powers conferred on it by that clause, unless those powers are circumscribed by express provisions of the collective agreement (at pp. 478-9).

[10] In cases which have held that management has an obligation to act reasonably, the obligation has arisen because the exercise of management’s discretion under one article of the collective agreement may have a serious impact on another article. See, for example, Re Council of Printing Industries of Canada and Toronto Printing Pressmen (1983), 42 O.R. (2d) 404 (C.A.) at 411 and Stelco Inc. v. United Steelworkers of America, Local 1005 (1994), 17 O.R. (3d) 218 (Div. Ct.) at 228. In such cases, arbitration boards have determined whether the employer has acted honestly or in a bona fide manner (Council of Printing Industries at p. 411).

[11] In this case, the majority of the board found it unnecessary to determine whether the actions of management contravened the seniority provisions of the collective agreement. Nor did they consider the applicability and impact of the provisions in the collective agreement dealing with working conditions. Finally, they did not decide whether the two year lockout was so punitive that it constituted a disciplinary penalty contrary to the collective agreement. Had they done so, there is a line of arbitration cases which have considered the reasonableness of an employer’s rules, when the breach of those rules can lead to disciplinary consequences (see, for example, Metropolitan Toronto (Municipality) v. Canadian Union of Public Employees (1990), 74 O.R. (2d) 239 (Ont. C.A.) at 257).

[12] Given that the majority made reference to no express language in the collective agreement that limited the exercise of management rights under Section 8, and given that there was no allegation of bad faith nor a finding of disciplinary action, the majority acted unreasonably in implying a duty on the employer to act reasonably. For this reason, the arbitration award should be quashed.

[13] However, the majority of the board failed to deal with whether the lockout intruded on the provisions of the collective agreement dealing with working conditions and seniority and failed to determine whether the lockout should be characterized as disciplinary, given its length. Therefore, the appropriate remedy is to refer the matter back to the arbitration board to consider these issues.

[14] For these reasons, the application for judicial review is granted. The decision of the arbitration board is set aside, and the matter is referred back to the board to address the remaining issues set out above in paragraph 13. Costs to the applicant are fixed at $4,000.00.

Released: February , 2005

Swinton J.

D. Lane J.

Jarvis J.