CITATION: R. v. Ontario Public Service Employees Union (OPSEU), 2010 ONSC 4006
COURT FILE NO.: 480/09
DATE: 2010/09/16
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
SACHS, SWINTON and WILTON-SEIGEL JJ.
B E T W E E N:
THE CROWN IN THE RIGHT OF ONTARIO as represented by the Ministry of Children and Youth Services
Sean Kearney and Michelle Dobranowski, for the Applicant
Applicant
- and -
ONTARIO PUBLIC SERVICE EMPLOYEES UNION (OPSEU)
-and-
GRIEVANCE SETTLEMENT BOARD
David Wright and Adrienne Liang, for the Respondent, OPSEU
Respondents
HEARD at Toronto: April 23, 2010
H. Sachs J.
INTRODUCTION
[1] This is an application for judicial review by the Crown in Right of Ontario, as represented by the Ministry of Children and Youth Services (the “Ministry”) of the decision of Vice-Chair Bram Herlich of the Grievance Settlement Board (the “Board”) dated July 16, 2009.
[2] The decision arose out of a grievance filed by the Ontario Public Service Employees Union (OPSEU). That decision answered a threshold question that the parties had agreed to place before the Board, namely, whether the failure of the Ministry to create or fill even one Probation Officer 3 (“PO3”) position was a breach of the collective agreement between the parties.
[3] The Vice-Chair answered the question in the affirmative. In other words, he found that the Ministry had breached the collective agreement between the parties. I would uphold that decision and dismiss the application. I would do so because the Board’s decision is entitled to significant deference from this Court and the decision was a reasonable one.
FACTUAL BACKGROUND
The Parties
[4] The Ministry is the provincial ministry responsible for assisting youth “to become productive adults” and assisting families with access to services they need. Probation Officers in the Ministry are responsible for supervising and assisting youth who are subject to court orders under the Young Offenders Act and Youth Criminal Justice Act. OPSEU is the exclusive bargaining agent for about 45,000 employees in the provincial public sector. As such, OPSEU represents all the employees at the Ministry who fall within the Probation Officer classifications. The Board is the statutory tribunal enacted under the Crown Employees Collective Bargaining Act,1993, S.O. 1993, c. 38 that hears disputes under the collective agreement between the Ministry and OPSEU.
The Collective Agreement-COR5
[5] In 2002, the parties negotiated the 2002-2004 collective agreement. They added Appendix COR5 to the agreement that provided for two things – a review and update of the current classification system for Probation Officers and the establishment of a new classification for Probation Officers – PO3. This classification would provide for a higher salary than the existing classifications of PO1 and PO2. The first paragraph of Appendix COR5 states:
The Employer shall undertake a review and update of the Probation Officer class standards and shall establish a Probation Officer 3 classification effective January 1, 2002. The salary rates for the Probation Officer 3 level shall be: [rates omitted].
[6] As COR5 required, the Ministry reviewed and updated the Probation Officer class standards and in June of 2004 it established the PO3 classification, effective January 1, 2002. However, the Ministry did not create or fill any positions within the PO3 classification.
[7] In 2007 OPSEU filed 24 grievances that raised the “threshold question” of whether the Ministry’s failure to create and fill a single position within the PO3 classification violated the terms of COR5.
THE BOARD’S DECISION
[8] The Board heard the grievances as a group. OPSEU argued that it could not have been the intent of the parties at the time that the PO3 classification would simply be created and not filled. The Board summarized OPSEU’s position as: “whatever the proper number of PO3s which should have resulted, none is simply not enough.” (Board Reasons, para. 7). The Ministry, on the other hand, submitted that the plain language of COR5 obligated it only to review class standards and establish a PO3 classification. They had complied with these obligations.
[9] The parties did not call viva voce evidence. The parties’ representatives provided some uncontroversial factual background. The Ministry provided the only other evidence, which was Order in Council 1361/2004. This Order in Council provided for the revocation of the two existing Probation Officer classifications and the establishment of three new classifications.
[10] The Board found that by failing to create and fill a single PO3 position the Ministry was in violation of its obligations under COR5. The essence of the Board’s decision can be found at paragraphs 17 and 18 of its reasons, which state:
[17] It is true that a bare literal reading of COR5 makes the employer’s approach a plausible one. In my view, however, that approach is incorrect.
[18] The employer’s approach makes it difficult to divine any sensible purpose to the parties’ agreement. Indeed, the employer finds itself in the less than enviable position of asserting that the parties agreed to the creation of a new classification with no legitimate and certainly no enforceable expectation that the new classification would ever be populated.
[11] The Board also rejected the argument that the Ministry could rely on its management rights. According to the Board, the Ministry is free to negotiate away its management rights. Here, the parties’ agreement “implies and necessitates the creation and filling of (at least some) positions in the newly negotiated classification. In that context, the employer similarly cannot rely on its management rights to never create and fill a single PO3 Position.” (Board’s Reasons, para. 20).
STANDARD OF REVIEW
[12] The Ministry argues that the standard of correctness applies to the Board’s decision because the Board exceeded its jurisdiction by effectively amending, rather than interpreting, the collective agreement. Absent a jurisdictional error, the Ministry agrees that the standard of review is reasonableness.
[13] In Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190 at para. 59 the Supreme Court of Canada expressly cautioned that “reviewing judges must not brand as jurisdictional issues that are doubtfully so” and that the correctness standard only applies to determinations of “true questions of jurisdiction or vires”, not to questions that are capable of being labeled as jurisdictional. The Court held:
Administrative bodies must also be correct in their determinations of true questions of jurisdiction or vires. We mention true questions of vires to distance ourselves from the extended definitions adopted before CUPE. It is important here to take a robust view of jurisdiction. We neither wish nor intend to return to the jurisdiction/preliminary question doctrine that plagued the jurisprudence in this area for many years. “Jurisdiction” is intended in the narrow sense of whether or not the tribunal had the authority to make the inquiry. In other words, true jurisdictional questions arise where the tribunal must explicitly determine whether its statutory grant of power gives it the authority to decide a particular matter.
[14] In this case, on the agreement of the parties, the Board was asked to determine whether the Ministry had breached the terms of Appendix COR5 to the collective agreement between the parties by failing to create and fill a single position in the PO3 classification. The parties thus expressly agreed that the Board had the jurisdiction to make the inquiry in question. The question put to the Board by the parties required the Board to interpret the language of Appendix COR5, an exercise that falls squarely within its jurisdiction.
[15] Given this finding, the standard of review that is applicable to the Board’s decision is reasonableness.
[16] The Supreme Court of Canada has recognized that the decision of a labour arbitrator engaged in the interpretation of a provision of a collective agreement should be treated with significant judicial deference. As put by the Supreme Court in Dunsmuir v. New Brunswick, supra at para. 68:
This court has often recognized the relative expertise of labour arbitrators in the interpretation of collective agreements, and counseled that the review of their decisions should be approached with deference.
[17] Questions that come before labour arbitrators can give rise to a number of possible reasonable conclusions. A reasonable decision is one that comes within the range of “acceptable and rational solutions” and that demonstrates “justification, transparency and intelligibility within the decision making process.” (Dunsmuir, supra at para. 47)
WAS THE BOARD’S DECISION REASONABLE?
[18] The main thrust of the attack on the Board’s decision is that it goes against the clear and unambiguous language contained in Appendix COR5 (“COR5”). According to the Ministry, that language only obligated them to do three things: (1) review and update Probation Officer classes; (2) establish a PO3 classification effective January 1, 2002 and (3) set the salary rates for the PO3 classification at the amounts specified in COR5. They argue that they have fulfilled those obligations and that nowhere does COR5 or the collective agreement require them to do anything more. In other words, they had to create the PO3 classification, but they had no obligation to create or fill positions within that classification.
[19] The Board essentially found that to interpret COR5 in this way would lead to a result where there was no sensible purpose to the agreement in question in the labour relations context. Why bargain for a new classification if there is no intention to ever create or fill a position within that classification? To do so is to achieve nothing of substance. In reaching this conclusion the Board did not find that the language of COR5 was ambiguous, it did not rely on extrinsic evidence, nor did it purport to amend the collective agreement between the parties. Rather, what it did was say that there are two plausible interpretations to COR5, one of which gives a sensible purpose to the agreement and one of which does not. The Board then chose the former.
[20] The Board also found that their interpretation of COR5 did not derogate from the management rights clause as that clause expressly holds that the rights set out therein are subject to the provisions of the collective agreement between the parties. Thus, if a provision of the collective agreement imposes an obligation on the Ministry, the Ministry cannot seek to override that obligation by resort to the management rights clause.
[21] The Board’s reasons provide a justifiable, transparent and intelligible explanation for its conclusions. To use the language of Iacobucci J. in Law Society of New Brunswick v. Ryan, 2003 SCC 20, [2003] 1 S.C.R. 247 at para. 55 there is a “line of analysis within the given reasons that could reasonably lead the tribunal from the evidence before it to the conclusion at which it arrived.”
[22] Furthermore, the Board’s interpretative approach is entirely consistent with the Supreme Court of Canada’s direction and comments on contract interpretation in Consolidated Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., 1979 10 (SCC), [1980] 1 S.C.R. 888. At page 9 of the Quicklaw version of that case Estey J. states:
…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 that would promote the intention of the parties.
[23] The parties do not dispute that these comments are applicable to contracts negotiated in the labour relations context such as the collective agreement in question. The Board found that to interpret COR5 literally would bring about an unrealistic result, one that would not be contemplated in the collective bargaining atmosphere in which the collective agreement was negotiated. They found that the more reasonable construction, the one that was fairer and would promote the intention of the parties at the time of the entry into the agreement was the one advanced by OPSEU.
[24] In my view, the Board’s decision fell “within a range of possible, acceptable outcomes which are defensible in respect of the facts and the law” (Dunsmuir at para. 47). As such, as a reviewing court, we owe it deference, regardless of how compelling we may find it (Law Society of New Brunswick v. Ryan at para. 55).
[25] For these reasons, I would dismiss the application.
H. Sachs J.
Swinton J.
Wilton-Siegel J. (concurring):
[26] I concur in the decision of Sachs J. and Swinton J. However, I differ with the majority with respect to the manner in which the Court should review the Board’s interpretation of the relevant collective agreement on a reasonableness standard.
The Board’s Interpretation of the Collective Agreement
[27] As the majority notes, the Board was presented with two competing interpretations of Appendix COR5 of the collective agreement. The Board accepted the interpretation that it considered to be the more commercially reasonable. The Board did not offer any principle of contractual interpretation as the basis for its conclusion.
Analysis of the Board’s Interpretation
[28] The issue of reasonableness in this proceeding is whether the Board was entitled to reach this conclusion in accordance with the accepted body of principles of contractual interpretation. This question involves both issues of law, being the applicable principles of contractual interpretation, and findings of fact relating to the operation of such principles.
[29] There are two possible grounds on which the Board could have proceeded to interpret the agreement in accordance with its view of the more commercially reasonable interpretation – an ambiguity or an interpretation that results in an absurdly, a repugnancy, or “a very unreasonable result”.
Is the Collective Agreement Ambiguous?
[30] It is well-established that where the words of an agreement may bear two constructions, the one that produces the more commercially reasonable result should be assumed, other things being equal, to represent the intentions of the parties. This is the circumstance in respect of which the oft-cited comments of Estey J. in Consolidated Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., 1979 10 (SCC), [1980] 1 S.C.R. 888 at p. 901 were made. The relevant passage is as follows:
“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 which 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 commercial result. It is trite to observe that an interpretation of an ambiguous contractual provision which would render the endeavour on the part of the insured to obtain insurance protection nugatory, should be avoided. [emphasis added]
[31] The principle in Consolidated Bathurst is not, however, an unqualified principle of contractual interpretation to be applied in every instance of competing contractual interpretations. From the italicized words, it is clear that Estey J. directed himself only to circumstances of ambiguity. Before the principle can be applied in the interpretation of an agreement, the decision-maker must first find that the language of the agreement is ambiguous on its face.
[32] In the present matter, as the majority notes, the Board did not find that the language of Appendix COR5 in the collective agreement was ambiguous. Therefore, it was not open to the Board to interpret Appendix COR5 in terms of its view of the more commercially reasonable interpretation in reliance on the principle in Consolidated Bathurst, as the majority decision suggests. The standard of reasonableness does not have the result that the Court should defer to an interpretation that is based on an incorrect application of principles of contractual interpretation in a collective bargaining context, even if the decision-making body has recognized expertise in the interpretation of the agreement.
Does a Plain Reading Produce a Very Unreasonable Result?
[33] Another well-recognized principle of contractual interpretation is that, although the plain and ordinary meaning of a contractual provision is the starting point for identification of the common intention of the parties, that approach must be displaced if it results, among other things, in an absurdity, a repugnancy, or “a very unreasonable result”. In such circumstances, it is also appropriate to construe an agreement with a view to giving effect to the more commercially reasonable interpretation.
[34] In the present proceeding, the Board did not expressly find that the Employer’s interpretation of Appendix COR5 in accordance with its plain and ordinary meaning would result in an absurdity, a repugnancy, or a very unreasonable result. The Board described the Employer’s interpretation as “plausible”.
[35] On the other hand, the Board stated that, using the Employer’s interpretation, it was “difficult to divine any sensible purpose to the parties’ agreement”. These two statements appear, on a first reading, to be contradictory. However, reading the Board’s decision as a whole, I am of the opinion that this latter statement of the Board constituted, in substance, a finding that, in the collective bargaining context, the Employer’s interpretation would result in “a very unreasonable result”.
[36] This is a factual determination of the Board. The Court must give deference to that determination unless, in reaching that conclusion, the Board acted unreasonably. Among other reasons, such deference reflects the Board’s expertise in the collective bargaining domain. While I might have reached a contrary conclusion, it cannot be said that the Board determination was unreasonable.
[37] On the basis of this finding, the Board was entitled to interpret the collective agreement by searching for the interpretation of Appendix COR5 that gives the more commercially reasonable outcome.
[38] In the judgment of the Board, the Union interpretation was the more reasonable interpretation. This is also a factual determination or a determination of mixed fact and law. Again, recognizing the Board’s expertise in the collective bargaining context and the deference due to the Board in this area, the Court must show deference to that determination unless it concludes that, on the evidence, such determination was unreasonable. While opinions may differ regarding the more commercially reasonable result, it cannot be said that the Board’s determination on this issue was unreasonable.
Conclusion
[39] Based on the foregoing analysis of the Board’s approach to the contractual interpretation of Appendix COR5, I conclude that, in addition to satisfying the requirement of justification, transparency and intelligibility within the decision-making process, the Board’s decision also satisfies the criterion of reasonableness in Dunsmuir set out above.
[40] Accordingly, I would also dismiss the application.
Wilton-Siegel J.
Date: September 16, 2010
CITATION: R. v. Ontario Public Service Employees Union (OPSEU), 2010 ONSC 4006
COURT FILE NO.: 480/09
DATE: 2010/09/16
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
SACHS, SWINTON and WILTON-SEIGEL JJ.
B E T W E E N:
THE CROWN IN THE RIGHT OF ONTARIO as represented by the Ministry of Children and Youth Services
Applicant
- and -
ONTARIO PUBLIC SERVICE EMPLOYEES UNION (OPSEU)
-and-
GRIEVANCE SETTLEMENT BOARD
Respondents
REASONS FOR JUDGMENT
H. Sachs J.
Released: September 16, 2010