COURT FILE NO.: 442/06
DATE: 20070911
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: Complex Services Inc. c.o.b. Casino Niagara
Applicant
-and-
Ontario Public Service Employees Union and its
Local 278 Respondent
HEARD: At Toronto, June 5, 2007.
BEFORE: Lane, Swinton and Bryant JJ.
COUNSEL: Christopher Riggs, Q.C., for the Applicant
Roman Stoykewych, for the Respondent
R E A S O N S F O R J U D G M E N T
LANE J.:
[1] The applicant seeks judicial review of the decision of a Board of Arbitration (“the Board”) dated June 15, 2006 in which the Board, by a majority, found that the applicant, as Employer, had discriminated against the Grievor, Rose Murrell, contrary to the collective agreement (“CBA”). The applicant asks that the decision be quashed, and for costs.
[2] The Grievor works for the Employer as a unionized security officer. Article 2.02 of the CBA provides that the Employer may on occasion ask a security officer to fill the management role of Temporary Shift Supervisor (“TSS”) at a higher rate of pay. This position is outside of the Bargaining Unit, but Article 2.02 provides that an employee temporarily filling the position:
will not lose any seniority under this agreement while working outside the bargaining unit in this capacity.
[3] In order to be eligible to perform supervisory duties in a gaming premises, a person must obtain a “key licence” from the regulator. Thus, such employees have a sort of “dual status”. The Grievor had such a licence and had filled the TSS position on a number of occasions before the incident which triggered the grievance.
[4] Historically, the Grievor had not held Union office nor been very active in Union affairs. In the spring of 2005, the Employer became aware that the Grievor had attended a Union convention as an “observer” and had been seen wearing a Union T-shirt. The Employer’s Security Manager met with the Grievor and informed her that her increased Union involvement created a conflict with her ability to be a TSS and therefore her “dual status” was to be “put on the back burner”. The Grievor resigned her dual status in protest and launched a grievance.
[5] Article 3 of the CBA provides:
3.01 The Employer, Union and employees agree that there will be no intimidation, harassment, discrimination, interference, restraint or coercion exercised or practiced by their representatives because of membership or non-membership in the Union, or because of activity or lack of activity in the Union.
[6] The majority of the Board held that this clause constrained management’s discretion under Article 2.02 in choosing the employees to be offered the TSS work. By declining to continue to offer the TSS work to the Grievor because of her modest Union involvement, the Employer had discriminated against her contrary to Article 3.01. Although the position was outside the Bargaining Unit, the opportunity to fill it was a privilege enjoyed by the employees and specifically referred to in the CBA.
[7] The management rights clause, 4.01 (b) contains an acknowledgement by the Union that it is the exclusive function of the Employer to:
(b) hire, assign, direct, promote, demote, classify, transfer, lay off, recall and to suspend, discharge or otherwise discipline employees for cause in accordance with this agreement, subject to the right of the employees to grieve ….. if the provisions of this agreement are violated in the exercise of these rights;
[8] The majority held that this language recognizes that the Employer cannot discriminate on grounds of Union involvement in selecting the Bargaining Unit employees who are to be invited to fill the TSS positions. It is important, the majority said, to understand that the distinction is not between Bargaining Unit employees and excluded employees, but between Bargaining Unit employees themselves as to which may be selected. These employees do not leave the Bargaining Unit upon selection. They retain and accumulate seniority within the Unit and return to their jobs within the Unit on completion of their temporary assignment.
[9] The majority concluded that, while there may be types of union activity that would be truly incompatible with the position of TSS, arbitral jurisprudence showed that the Employer could not assume that all union activity was necessarily incompatible with a particular job, and the Employer would have to show a compelling business reason why the two activities were incompatible:
However, where as here, the Employer’s conduct is so obviously and overtly discriminatory and on a prohibited ground, there is at the very least a significant onus on the Employer to demonstrate why its actions are objectively necessary from a business point of view – which is to say, that in balancing competing concerns, there is a demonstrable and compelling business interest which must be given preference over the employee’s statutorily and contractually protected right (rather like the “bona fide occupational qualification” defence which can “justify” or “excuse” distinctions on a prohibited ground under the Human Rights Code).
And in the instant case, the evidence does not demonstrate that at all; nor is it a reasonable (let alone likely) inference from the modest union activities in which the Grievor has been engaged.[^1]
[10] The applicant adopts the position of the dissenting member of the Board who held that the Board had no jurisdiction to concern itself with a position outside the Bargaining Unit and no jurisdiction to direct the Employer as to how it should fill a TSS position. She emphasized the entitlement of the Employer to require a duty of fidelity and loyalty from persons being selected as part of management.
Standard of Review
[11] There is no serious issue as to three of the four factors in the “pragmatic and functional” analysis mandated by the Supreme Court in a number of cases, of which Pushpanathan[^2] is a prominent example. There is a privative clause that the Court of Appeal has characterized as “reasonably strong” and as signalling “a large measure of deference to the arbitrator’s decision”[^3]. The expertise of the Board relative to the interpretation and application of CBAs is not contested, although the applicant submits the Board has no advantage in expertise in broad policy issues. The purpose of the legislation is the resolution of labour disputes in a timely fashion, a matter on which the Board has expertise. All of these factors tend towards a high degree of deference from this court to the decisions of the Board.
[12] The applicant submitted that the issue here was a question of law, relating to the jurisdictional boundaries of the CBA and the applicability of the CBA to the Employer’s decision-making in filling positions outside the Bargaining Unit. Counsel submitted that this issue did not centre on the expertise of the arbitrator in the interpretation of the CBA and that the court possessed at least as much expertise as the arbitrator to address the question. The applicant conceded that the normal standard of review of the decision of a labour arbitrator is that of patent unreasonableness and submitted that, even by that standard the decision should be quashed. But counsel’s primary position was that it is a question of law and the standard was correctness.
[13] The respondent submitted that the standard was patent unreasonableness because the arbitrator was concerned with the scope of one of the provisions of the CBA: does the prohibition against discrimination on grounds, inter alia of union membership and activity, apply to decisions of the Employer to deny access to the privilege of assignment as a TSS? This depended on the scope of article 3.01 viewed in the context of the entire CBA. The deference due to the arbitrator construing and applying provisions of a CBA is appropriate even where the arbitrator is considering the scope of its jurisdiction so long as that jurisdiction rests on an interpretation of the CBA.[^4] That is the situation in the present case. The references to the Labour Relations Act are not because it is dispositive but as a guide only. The dispositive reasoning depends upon the CBA. In any event, the Act is central to the work of labour arbitrators and even if the decision involved a reading of the Act, it would still be entitled to a high degree of deference from the court.[^5] Therefore, the standard of review is that of patent unreasonableness.
[14] In my view, all of the four factors tend towards a high degree of deference by this court to the decision of the arbitrator. The key factor is the nature of the question. The Board in this case was interpreting the breadth and scope of Article 3 of the collective agreement in the context of the agreement as a whole and in light of the activity of the Grievor. These are matters within the specialized expertise of the arbitrator. The court is not as well equipped to deal with these matters as the arbitrator and owes a high degree of deference to the decision.
[15] As all four of the factors tend towards a high degree of deference, the standard of review is that of patent unreasonableness.
Is the Decision Patently Unreasonable?
First Point: Jurisdiction to Hear the Grievance
[16] The applicant submits that the decision is patently unreasonable because the Employer was dealing with the Grievor as a supervisor and therefore she has no grounds to grieve under the CBA. The applicant drew our attention to the case of Jarvis[^6], where the Supreme Court upheld the decision of the Court of Appeal for Ontario which had quashed the decision of the O.L.R.B. reinstating Mrs. Jarvis to her managerial position. Mrs. Jarvis was dismissed on February 2, 1961, for participation in Union activities on company premises during working hours. She had been employed in a managerial capacity for nearly a year at the time of her discharge and the Board so found. Nevertheless, it ordered her reinstated. The courts set aside the Board’s order on the basis that its authority did not extend, under the Act, to persons employed in management. It was submitted by the applicant that the Grievor was in a comparable position.
[17] The Board recognized that the facts do not support this contention. The Employer’s concern, as recorded by Mr. Conhiser in his memo[^7], was not the conduct of the Grievor as a supervisor, but her union activity as a bargaining unit member and its relationship to her chances of being appointed in the future to act as a TSS. The relationship between the Grievor’s conduct as a Union member and her future appointment is clearly within the scope of the CBA. The Board rationally concluded that it had jurisdiction to hear the grievance.
Second Point: Conflict of Interest
[18] The applicant further submitted that the Board committed “jurisdictional error” in failing to appreciate the “inherent conflict of interest” between those within the Bargaining Unit and those outside of it who are engaged in supervising them.
[19] I begin the discussion by observing, as did the Board, that this conflict has not deterred the Employer in the past from routinely appointing Bargaining Unit members to act as TSS; nor did it, apparently, deter the Employer from agreeing to incorporate the process into the CBA. No doubt, as the Board recognized, this is because there are advantages to the Employer in this arrangement, including the availability of a pool of employees experienced and licensed to perform supervision while not being permanent management personnel with salaries.
[20] Nor does the decision fail to recognize this conflict. The Board did not state that the Employer had no right to take into account potential conflict of interest between union activity and the role of a supervisor. On the contrary, the Board recognized the problem, stating:
“…that the right to engage in lawful union activity may sometimes conflict with the legitimate interests of the employer, and thus may sometimes be legitimately taken into account by that employer, in the way that it conducts its affairs. The suggestion is that what might otherwise appear to be “invidious discrimination” should not be so regarded, … when there is a bona fide and compelling business reason for limiting, or responding to, a purported exercise of protected employee rights.[^8]
[21] In short, the Board expressly recognized that there may be occasions when the extent of the Union activities of a potential appointee as TSS may legitimately be considered of sufficient weight so as not to contravene the prohibition against discrimination on the basis of union activity. It found, however that there was no such activity in the present case. The wearing of the T-shirt and attendance as an observer at the Union convention did not provide a factual foundation for the argument.[^9]
Third Point: The Decision Overall
[22] A decision is patently unreasonable when it can be said to be “clearly irrational” and “evidently not in accord with reason”[^10]. The reasons of the majority proceed in a logical fashion to consider the CBA, particularly the articles referred to above; and to consider certain related sections of the Act, including section 72 prohibiting discrimination in regard to employment on the basis of union activity, as aids to the interpretation of the CBA. After detailing the factual background and the positions of the parties, the majority examined arbitral jurisprudence to the effect that an Employer must exercise management rights in accordance with the law, and internal CBA provisions, with Article 3 providing a contractual basis for the same finding. The Board discusses Article 3 in some detail as providing a standard independent of the Act, but in supplement to the legislation. It observed that Article 4 states that the exercise of management rights is subject to the provisions of the CBA, and noted that Article 3.01 is thus included as a provision to which Article 4.01(b) is subject. It then considered the conduct of the Employer and found that it was discriminatory: an invidious distinction had been drawn between those employees who support the union and those who do not.
[23] Continuing with the analysis, the majority rejected the Employer’s argument that it is entitled to discriminate in selecting employees to be assigned to TSS work because the positions are outside the Bargaining Unit. It noted that the Employer argued that because the CBA does not apply to the employees while they are acting as TSS, it equally cannot apply to the selection process. It concludes that such a narrow reading of Article 3.01 is inconsistent with the language and the context and also with the provisions of the Act protecting employees from discrimination on account of union activity. It does not matter that there is no right to be appointed as a TSS; the possibility is a privilege recognized by the CBA and the Employer cannot discriminate in its choices on the prohibited basis of union activity, regardless of the type of union activity.
[24] The majority recognized that there can be certain types of union activity which, while protected, nevertheless demonstrably interfere with the duties of the position and in such a case the application of Article 3.01 could call for a balancing exercise, such as was conducted by Arbitrator Beck in the “Toronto Star” case[^11]. In the instant case the conduct of the Employer was so obviously discriminatory that there was an onus on it to demonstrate some compelling business interest to justify the discriminatory conduct. The evidence did not demonstrate any such interest, nor was it a reasonable inference from the modest union activities in which the Grievor had engaged. Accordingly, the majority found that the Employer had contravened Article 3.01 of the CBA.
[25] Overall, the decision survives scrutiny and is logical and rational, showing a clear line of argument from point to point based on the language of the CBA and the evidence actually before the Board. The decision is not patently unreasonable.
[26] The application is dismissed with costs of $4000 to the respondent, all-inclusive, as agreed by the parties at the hearing.
Lane J.
Swinton J.
Bryant J.
DATE:
[^1]: Reasons of the majority; Application Record, tab 2, page 32.
[^3]: Lakeport Beverages v Teamsters Local 938 (2005), 77 O.R. (3rd) 543 (C.A.) at paragraphs 27-33.
[^4]: O.P.S.E.U. v Seneca College (2006), 80 O.R. (3rd) 1, (C.A.) paragraphs 47 to 60.
[^6]: Jarvis v Associated Medical Services Ltd. (1964), 44 D.L.R. (2nd) 407 (S.C.C.)
[^7]: Reasons of the majority; Application Record, tab 2 page 14.
[^8]: Reasons of the majority; Application Record, tab 2, page 31.
[^9]: Reasons of the majority; Application Record, page 32.
[^11]: No citation was given.