COURT FILE NO.: 08-DV-1394
DATE: 2009-08-05
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
LEITCH, METIVIER and HAMBLY JJ.
B E T W E E N:
The Ottawa Fertility Centre Inc.
Stephen Bird, for the Applicant
Applicant
- and -
Ontario Nurses’ Association, Ontario Public Service Employees Union, Canadian Union of Public Employees, Local 4000, The Ottawa Hospital and Ontario Labour Relations Board
Elizabeth McIntyre, for the Respondent, Ontario Nurses’ Association
David Wright, for the Respondent, Ontario Public Service Employees Union
Colleen Bauman, for the Respondent, Canadian Union of Public Employees Local 4000
Voy T. Stelmaszynski, for the Respondent, Ontario Labour Relations Board
Respondents
HEARD AT OTTAWA: April 8, 2009.
INTRODUCTION
[1] This is an application for judicial review of a decision of the Ontario Labour Relations Board (the Board) dated January 10, 2008 under the Public Sector Labour Relations Transition Act, 1997 S.O., 1997, c.13 (the Act).
Overview
[2] The Ottawa Hospital (the Hospital) provided both insured and uninsured reproductive services from 1988 through the Ottawa Hospital Fertility Clinic (OHFC). The Hospital did not employ the doctors who worked there. It did employ the nurses and other support staff who worked at the OHFC. The employment relationship of the staff who worked at the OHFC was governed by collective agreements with the Hospital negotiated on their behalf by the Ontario Nurses’ Association (ONA), by the Ontario Public Service Employees Union (OPSEU) and the Canadian Union of Public Employees (CUPE). The OHFC used the space and equipment provided to it by the Hospital. The doctors paid the Hospital 50% of the revenue that they received from the provision of uninsured services.
[3] In 1988 the doctors incorporated The Ottawa Fertility Centre Inc. (OFC).
[4] In the Fall of 2005 the OFC announced that it would move out of the Hospital into rented space at another location. The doctors hired staff to work at their new location. The OFC and the Hospital entered into an agreement that the Hospital would supply to the OFC documents and laboratory and human material that was relevant to ongoing care of patients. The OFC purchased equipment from the Hospital.
[5] The OFC moved out of the Hospital on May 31, 2006. The Hospital terminated its employment relationship with the nurses and other staff who had worked at the OHFC. Some of the nurses and staff took employment with the OFC at its new location after they terminated their relationship with the Hospital. They were hired by the OFC at lower wages and with fewer benefits than they had had with the Hospital. The Board found in its decision that of the 52 employees of the OFC, 21 were former employees of the Hospital.
[6] After the OFC opened in its new location, the Hospital did not provide reproductive services. In August 2006 the ONA brought an application before the OLRB for a declaration that a health services integration had taken place within the meaning of the Act and for an order that the Act applied to the integration. This would have the effect of requiring the OFC to recognize the ONA, CUPE and OPSEU as being bargaining agents for former employees of the Hospital whom they had hired from the Hospital to work at their new location and for employees whom they had hired to replace employees of the Hospital who had worked at the OFC. It would also require the OFC to comply with the collective agreements which had been in place with the Hospital for such employees.
[7] The Board declared that a health services integration had taken place and exercised its discretion to order that the Act applied to the integration.
The Legislation
[8] The Act was passed in 1997 to regulate labour relations and collective bargaining consequences flowing from restructuring in the public sector. It replaced the successor rights scheme under s. 69 of the Labour Relations Act, S.O. 1995, c.1. Its purposes are as set out in s. 1 as follows:
To encourage best practices that ensure the delivery of quality and effective public services that are affordable for taxpayers.
To facilitate the establishment of effective and rationalized bargaining unit structures in restructured broader public sector organizations.
To facilitate collective bargaining between employers and trade unions that are the freely-designated representatives of the employees following restructuring in the broader public sector and in other specified circumstances.
To foster the prompt resolution of workplace disputes arising from restructuring. 1997, c.21, Sched. B, s.1.
[9] When the Local Health System Integration Act, 2006, S.O. 2006, c. 4. was enacted, the Act was amended to include the following definition of a “health services integration” in s. 2:
- In this Act,
“health services integration” means an integration that affects the structure or existence of one or more employers or that affects the provision of programs, services or functions by the employees, including but not limited to an integration that involves a dissolution, amalgamation, division, rationalization, consolidation, transfer, merger, commencement or discontinuance, where every employer subject to the integration is either,
(a) a health service provider within the meaning of the Local Health System Integration Act, 2006, or
(b) an employer whose primary function is or, immediately following the integration, will be the provision of services within or to the health services section; (“intégration des services de santé”)
[10] The general scheme of the Act was concisely described by the ONA in paragraph 56 of its factum as follows:
- The general scheme of PSLRTA is to provide for a detailed three phase transitional process to determine bargaining and other rights following restructuring. The first phase preserves, on an interim basis, the status quo for affected employees in relation to bargaining rights and the terms and conditions of employment. In the second phase the bargaining unit(s) and rights appropriate to the successor employer are determined, either by agreement or Board order (including procedures for employee voting in appropriate cases). In the third and final phase, if the successor employer remains unionized, a new collective agreement is reached between the ultimate bargaining agent(s) and successor employer.
[11] As noted by the Board, in paragraph 7 of its factum, the Board “has been given exclusive jurisdiction to consider and interpret the various configurations and relationships that arise from public sector amalgamations or mergers of employers or bargaining agents, to identify successor employers and fashion new bargaining arrangements as necessary.” (S. 37(1), (9) and s. 114(1) and 116 of the Labour Relations Act, 1995.
[12] When a restructuring occurs in the public health sector, the question of whether the Act applies is determined by an application under s. 9 of the Act which provides as follows:
9.1 (1) An employer that is or will be subject to a health services integration or a bargaining agent that represents employees of such an employer may request the Board to make an order declaring that this Act applies to the health services integration in question. 2006, c. 4, s. 42 (4).
Board Order
(2) The Board may by order declare that this Act applies to a health services integration if requested to do so under subsection (1). 2006, c. 4, s. 42 (4).
Factors to consider
(3) When deciding whether to make an order under this section, the Board shall consider the following factors and such other matters as it considers relevant:
The scope of agreements under which services, programs or functions are or will be shared by employers subject to health services integration.
The extent to which employers subject to the health services integration have rationalized or will rationalize the provision of services, programs or functions.
The extent to which programs, services or functions have been or will be transferred among employees subject to the health services integration.
The extent of labour relations problems that have resulted or could result from the health services integration. 2006, c. 4, s. 42 (4).
Order-timing and terms
(4) The Board may make an order,
(a) before or after the health services integration in question occurs; and
(b) on such terms as it considers appropriate. 2006, c. 4, s. 42 (4)
The Decision Under Review
[13] The issues before the Board were whether a health services integration had occurred and, if it had, whether the Board should exercise its discretion and declare that the Act applied to the integration. For there to be an integration it was necessary that the Hospital and the OFC satisfy the description of employer in the definition of health services integration. The OFC conceded that the Hospital was an employer described in section 2(a) of the Act. The Board held that the OFC satisfied the definition of employer in section 2(b). It stated the following:
- I conclude that the events described, and the parties, meet the definition of a “health services integration” within the meaning of section 2 of the PSLRTA. First, it is agreed that the Ottawa Hospital meets the definition in subsection 2(a). I find that The Ottawa Fertility Centre Inc. meets the definition in subsection 2(b). With respect, there is no reason to interpret subsection 2(b) as applying only to a subsidiary or secondary health service support, such as laundry and food service functions. The Legislature could have chosen narrow or particular language to achieve that result if it wanted. Instead, it chose language that is capable of capturing a range of employers in the health care sector, who may not be health care providers as that term is defined in the Local Health System Integration Act, 2006, but whose primary function is to provide health care services within or to the health care sector. It seems to me that The Ottawa Fertility Centre Inc. neatly meets that definition. It is an employer. It only provides services within the health care sector, in this case, assisted reproductive services.
[14] In paragraphs 7 and 33, the Board found that the OFC had been “an integrated component of the Hospital”. The Board held that there had been a health services integration between the two employers. It found that number 3 of the factors set out in section 9(3) of the Act applied. It stated the following:
- Section 9(3) of the PSLRTA sets out the factors the Board should consider in deciding whether or not to exercise discretion:
When deciding whether to make an order under this section, the Board shall consider the following factors and such other matters as it considers relevant:
The scope of agreements under which services, programs or functions are or will be shared by employers subject to the health services integration.
The extent to which employers subject to the health services integration have rationalized or will rationalize the provision of services, programs or functions.
The extent to which programs, services or functions have been or will be transferred among employers subject to the health services integration.
The extent of labour relations problems that have resulted or could result from the health services integration.
It is common ground that there are no agreements under which services, programs or functions will be shared. All assisted fertility treatments will be provided by The Ottawa Fertility Centre Inc. All the equipment, doctors, patients, embryos, sperm and much of the paraprofessional and support staff have become employed by The Ottawa Fertility Centre Inc. As the unions pointed out, employees of the Ottawa Hospital with expertise in assisted reproductive treatment will not be able to work in that field unless they leave the Ottawa Hospital. So, to the extent that the third point asks the Board to consider whether the health services integration involves dislocation of employees from one employer to another, yes, that is a factor in this case.
[15] With respect to labour relations problems that have resulted from the health services integration as referred to in number 4 of the factors in section 9(3) it stated the following:
In response to The Ottawa Fertility Centre Inc.’s assertion that there have been no labour relations consequences as a result of the closure of the Hospital clinic, and the opening of The Ottawa Fertility Centre Inc., the unions retort that there have been no problems because The Ottawa Fertility Centre Inc. has completely ignored the collective agreements and treated the employees as new hires in a non-union setting. From the unions’ point of view, that is a very serious labour relations problem that has resulted from this health services integration. They note that the Board has previously determined that even the possibility that a new employer would fail to recognize a union’s bargaining rights after a health care restructuring was a serious labour relations problem (see Children’s Hospital of Eastern Ontario, [2004] OLRB Rep. May/June 519, at paragraph 39).
Without oversimplifying the case, that really is the nub of the issue. Should The Ottawa Fertility Centre Inc. operate without any regard to its roots in a division of a public hospital, with a sophisticated labour relations infrastructure, and acquired rights and obligations under long-standing collective agreements? I think the answer is no. The PSLRTA was designed to provide mechanisms to manage the labour relations consequences of the changes in the delivery of health care as they arise in a wide range of contexts.
[16] With respect to the exercise of its discretion to declare that the Act applied to the health services integration it stated the following:
It is not accurate to characterize the movement of the clinic from the Hospital to The Ottawa Fertility Centre Inc. as merely a set of doctors closing up shop in one location, and moving to another. As set out in paragraph 7, the clinic at the Ottawa Hospital was an integrated component of the Hospital, whose loss was anticipated to affect the delivery of women’s health care; education opportunities for physicians, nurses and technicians; the Hospital’s accreditation as a teaching hospital; and research excellence. The move had a significant impact on people, patients, existing staff and future professionals.
The PSLRTA was designed specifically to address the impact of such changes on the employment of existing staff, union bargaining rights and the web of collective agreements that arise from such relationships. As the Board noted in Central Care Corporation, (Board Files 4294-O5-PS and 0160-06-PS, July 31, 2007), because the PSLRTA makes clear that sale of business provisions in the Labour Relations Act, 1995, do not apply to health services integration, there is no other statutory mechanism “… under which these types of changes can be managed in an orderly and predictable fashion” (paragraph 69). From a labour relations policy perspective, it is preferable to find a structure under which to manage the changes. In the absence of a very clear case that application of the Board’s discretion would be inappropriate, the PSLRTA should apply.
The unions have asked the Board to simply make a declaration at this point. Having regard to the factors set out in section (9)(3) of the PSLRTA, and in particular, a consideration of the labour relations problems arising out of this health services integration, I declare that the PSLRTA applies to the integration.
Position of the Parties
[17] OFC submits that the Board’s decision that a health services integration had occurred should be reviewed according to a standard of correctness. While the OFC acknowledged the Board has expertise with respect to labour relations, it submitted that expertise does not extend to the question of whether the Act applies to this restructuring.
[18] The OFC submits that the Board erred in law in finding that it was an employer described in the definition of health services integration under the Act and in its finding that such an integration had occurred and that the standard of review of this part of its decision is correctness. Assuming that its decision that the OFC was an employer and that a health services integration had taken place is correct, it submits that the Board erred in law and was incorrect, or in the alternative it made an unreasonable decision in exercising its discretion to declare that the Act applied.
[19] The OFC submits that the meaning given to section 2(b) of the Act by the Board would capture the Hospital as well as the OFC. This means that there would be no need for section 2(a). Therefore, section 2(b) must be given a narrow meaning which would capture only employers that provide non health care support and/or services to the health services sector, such as laundry and food service suppliers.
[20] Further, it submits that assuming the OFC is an employer described in s. 2, the Board erred in finding that a health services integration had occurred. The OFC submits that while it was at the Hospital it paid the Hospital a fee for the equipment, space and facilities that the Hospital provided to it and that it provided a service for patients of the Hospital. In oral submissions it drew an analogy to a lawyer who shared space with a law firm and used some of its equipment for a fee paid as part of his rent and maintained an independent practice. When it moved out, there was no transfer of employees or services and the move created no labour problems. None of the factors set out in the definition of health service integration applied. There was no integration. It was simply a severance of a relationship.
[21] Finally, assuming the Board was correct in finding that there was a health services integration, the OFC submits that the Board erred, or in the alternative, made an unreasonable decision in exercising its discretion to apply the Act to the health services integration. It states that none of the factors in section 9(3) apply. The OFC hired new employees, albeit some of the former employees of the hospital who had worked at the OFC when it was located at the hospital. There were no labour relations problems that resulted or could result from the health services integration.
[22] The ONA, CUPE and OPSEU and the Board submits that the standard of review that the Divisional Court should apply to the decision of the Board is reasonableness. This was the standard of review that the court had applied to the judicial review of Board decisions before the Supreme Court of Canada released the decision of Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, and it was mandated by Dunsmuir. The ONA, CUPE and OPSEU submit that given that the standard of review is reasonableness, there was nothing unreasonable about the Board’s decision, as that term has been defined by Dunsmuir.
Analysis and Disposition
Standard of Review
[23] Prior to the release by the Supreme Court of Canada of its decision in Dunsmuir, there were three standards of review that a court could apply to review the decision of an administrative Board. A court would give increasing deference to the decision of the Board depending upon whether it applied a standard of correctness, reasonableness or patent unreasonableness. Dunsmuir decided that there were only two standards of review, namely, correctness and reasonableness. In the majority judgment of Justice Bastarache, the Supreme Court held as follows:
45 We therefore conclude that the two variants of reasonableness review should be collapsed into a single form of “reasonableness” review. The result is a system of judicial review comprising two standards correctness and reasonableness. But the revised system cannot be expected to be simpler and more workable unless the concepts it employs are clearly defined.
46 What does this revised reasonableness standard mean? Reasonableness is one of the most widely used and yet most complex legal concepts. In any area of the law we turn our attention to, we find ourselves dealing with the reasonable, reasonableness or rationality. But what is a reasonable decision? How are reviewing courts to identify an unreasonable decision in the context of administrative law and, especially, of judicial review?
47 Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of [page 221] justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.
[24] The Supreme Court of Canada held that there is a two-step procedure to be applied by a court in undertaking a judicial review of an administrative board described as follows:
- In summary, the process of judicial review involves two steps. First, courts ascertain whether the jurisprudence has already determined in a satisfactory manner the degree of deference to be accorded with regard to a particular category of question. Second, where the first inquiry proves unfruitful, courts must proceed to an analysis of the factors making it possible to identify the proper standard of review.
[25] Following that process, the first question is whether the standard has already been decided for the review of a decision of the Board.
[26] It is clear from prior case law that the Board is entitled to a high degree of deference when it interprets the Labour Relations Act. In Maystar General Contractors Inc. v. International Union of Painters and Allied Trades, Local 1819 (2008), 2008 ONCA 265, 90 O.R. (3d) 451 (Ont. C.A.), the Ontario Labour Relations Board had refused to allow an extension of time to an employer to file a response to an application by a union for certification. In reviewing the decision, the Divisional Court applied a standard of review of correctness and set aside the decision. The employer appealed to the Ontario Court of Appeal. By the time that the appeal was heard, the Ontario Labour Relations Board had applied the decision of the Divisional Court and had rescinded the certification order. The Court of Appeal held that the appeal was moot. However, in the decision of Justice Gillese, the court held the following:
[42] I conclude, however, with the following caution. Nothing in these reasons should be taken as affirming the Divisional Court’s view that the appropriate standard of review of the Board Decision was correctness and that no deference was owed to the Board in its interpretation of the relevant certification provisions in the LRA. The decisions of the Supreme Court of Canada, over the course of many decades, show an unbroken commitment to affording labour relations boards the highest levels of judicial deference on matters within their exclusive jurisdiction. See, for example, Canadian Union of Public Employees Local 963 v. New Brunswick Liquor Corp., 1979 23 (SCC), [1979] 2 S.C.R. 227, [1979] S.C.J. No. 45, Canada (Attorney General) v. Public Service Alliance of Canada, 1993 125 (SCC), [1993] 1 S.C.R. 941, [1993] S.C.J. No. 35 and Royal Oak Mines Inc. v. Canada (Labour Relations Board), 1996 220 (SCC), [1996] 1 S.C.R. 369, [1996] S.C.J. No. 14.24 Issues which arise in implementing the LRA provisions governing the certification process in the construction industry are such matters.
[43] In the nomenclature of old, Board decisions were not to be set aside unless they were patently unreasonable or clearly irrational. Dunsmuir v. New Brunswick, [2008] S.C.J. No. 9, 2008 SCC 9, has simplified the standard of review analysis with the result that there are now only two standards of review: correctness and reasonableness. However, both the result and the reasoning in Dunsmuir affirm a continuing stance of deference in the field of labour relations. In Dunsmuir, a standard of reasonableness was held to apply when reviewing the decision of an adjudicator made under the Public Service Labour Relations Act, R.S.N.B. 1973, c. P-25. The majority in Dunsmuir notes that an exhaustive analysis is not required in every case to determine the proper standard of review: if the jurisprudence has already determined in a satisfactory manner the degree of deference to be accorded a decision maker with regard to a particular category of question, the search for the appropriate standard is over. If not, then the usual factors are to be considered. Deference will “usually result” where a decision maker is interpreting its own [page462] statute, with which it will have particular familiarity. Deference is also warranted where the decision maker has particular expertise in the application of legal rules in a specific statutory context. The majority also noted that a question of law of central importance to the legal system as a whole and which is outside the specialized area of expertise of the decision maker will always attract a correctness standard. I do not see the Procedural Issue as raising a question of that nature.
[27] We are of the view that the case law has established that the standard of review is reasonableness.
[28] However, even if we were not satisfied that the standard of review had been established in prior case law, and were obliged to proceed with the second step in the Dunsmuir analysis to determine the appropriate standard of review by the pragmatic and functional approach, we are of the view that based on that approach, the standard of review is reasonableness considering the factors described in Dunsmuir – the existence of a privative clause, the expertise of the decision-maker, the purpose of the Act, and the nature of the problems to be determined.
[29] We agree with the OLRB that the key question is whether a “health services integration” occurred which requires an interpretation of the Act and engages key concepts of labour employment relationships.
[30] In addition, in a case where the Act was found to be an external statute rather than a home statute, the standard of review was found to be patent on reasonableness (which post-Dunsmuir has been subsumed in the standard of reasonableness (see Ottawa-Carleton Public Employees Union, Local 503 v. Ottawa (City) Transition Board [2004] O.J. No. 1508 (Div. Ct.).
[31] Further, in another pre-Dunsmuir decision, the court held that a high degree of deference was due to the OLRB in interpreting the Act (see Greater Essex County District School Board v. International Brotherhood of Electrical Workers, Local 773 (2007), 2007 741 (ON SCDC), 83 O.R. (3d) 601 (Div. Ct.), application for leave to appeal to the Ontario Court of Appeal dismissed May 23, 2007, application for leave to appeal to the Supreme Court of Canada dismissed [2007] S.C.C.A. No. 384).
[32] Finally, our conclusion is consistent with a post-Dunsmuir decision, Horochowski v. Ontario English Catholic Teachers Assn (Div Ct) [2008] O.J. No. 4287 (Ont. Div. Ct.) in which the court concluded at para. 12:
Previous case law determined that the Board’s decisions were subject to a standard of patent unreasonableness. In the recent case of Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] S.C.J. No. 9, the Supreme Court re-examined the concept of standard of review, and determined there are only two standards: correctness and reasonableness. The previous standard of patent unreasonableness was collapsed within the “reasonableness” standard. Dunsmuir also held that once a standard of review had been established in the jurisprudence, it was not necessary to do an exhaustive analysis. We are therefore satisfied that reasonableness is the appropriate standard of review with respect to the merits of the decision.
[33] In applying the Act, the OLRB is interpreting a home statute in the field of labour relations which is its expertise. Its purpose is to resolve labour disputes arising out of the restructuring of municipalities, school boards, hospitals and other public sector employers. The nature of the question before it was whether or not there had been a health services integration between two entities and if there had, whether the Act should apply. The question of who is an employer is within the expertise of the Board. These factors all suggest deference to be given to the decision of the Board and a standard of review of reasonableness.
[34] We find that the standard of review of the Board’s decision is reasonableness and this standard applies both to a review of how the Board interpreted and applied s. 2 of the Act and to a review of the exercise of its discretion under s. 9 of the Act.
Was the Board’s Decision Reasonable?
[35] We agree with the respondents that the decision of the Board is reasonable as that term is defined in Dunsmuir and at a minimum it falls “within a range of possible acceptable outcomes which are defensible in respect of the facts and law”. The OFC argues that the definition of employer under section 2(b) only applies to employers who provide non health care services to the health services sector, such as laundry or food services. This is contrary to a plain reading of the section and ignores that part of the definition which states that it applies to an employer whose primary function is the provision of services within the health services sector. In arguing that there was not a health services integration by way of an analogy to the lawyer with an independent law practice sharing space with a law firm who decides to move, the OFC ignores the finding of fact of the Board that the OFC was an “integrated component of the hospital”. The OFC did not challenge the findings of fact by the Board, nor could it because they were well supported by the evidence. There was ample evidence to support the proposition that there was a dissolution, transfer, continuance and discontinuance of services provided by the OFC as a result of its move out of the hospital as set out in the definition of health services transition in the Act. The Board’s decision to exercise its discretion by applying the Act to the integration is entirely consistent with its purpose.
Conclusion
[36] The application is dismissed.
L.C. LEITCH RSJ.
M. METIVIER J.
P.B. HAMBLY J.
Released: August 5, 2009.
COURT FILE NO.: 08-DV-1394
DATE: 2009-06-30
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
LEITCH, METIVIER and HAMBLY JJ.
B E T W E E N:
The Ottawa Fertility Centre Inc.
Applicant
- and –
Ontario Nurses’ Association, Ontario Public Service Employees Union, Canadian Union of Public Employees Local 4000, The Ottawa Hospital and Ontario (Labour Relations Board)
Respondents
Released: August 5, 2009.