CITATION: Dollar Thrifty Automotive Group Canada Inc. v. United Food and Commercial Workers Union, Local 175, 2011 ONSC 661
DIVISIONAL COURT FILE NO.: 413/10
DATE: 20110120
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
JENNINGS, ASTON and HERMAN JJ.
BETWEEN:
DOLLAR THRIFTY AUTOMOTIVE CANADA INC.
Applicant
– and –
UNITED FOOD AND COMMERCIAL WORKERS UNION, LOCAL 175
Respondent
Frank Cesario
for the Applicant
Paul J. J. Cavalluzzo and
Jo Anne Pickel
for the Respondent
HEARD: JANUARY 11, 2011
JENNINGS J.:
[1] Dollar Thrifty Automotive Group Canada Inc. (“the Company”) seeks judicial review of arbitration awards made by arbitrator William Marcotte on March 31, 2009, November 19, 2009 and July 22, 2009. The awards allowed a policy grievance brought by the Union, finding that the grievance was properly arbitrable and that the Company had breached the party’s collective agreement when it made changes to the Union members’ health plan coverage.
[2] The Company takes the position that the grievance was wrongly characterized by the arbitrator as a policy grievance and should have instead been launched as an individual grievance by an employee and as a result the arbitrator should have found that he was without jurisdiction to arbitrate the issue. The Company further submits that the Union had improperly expanded the scope of grievance to include matters not originally grieved. With respect to the merits of the grievance, the Company submits that the arbitrator’s decision was unreasonable because he read the Collective Agreement “in a way that the words cannot reasonably bear” to find that article 19.01 of the Agreement had been violated.
[3] The Union submits that the arbitrator’s awards should not be disturbed, as his conclusions on all points fall within a range of acceptable outcomes and are therefore reasonable.
[4] For the reasons which follow I would dismiss this application.
background
[5] The Union represents certain employees of the Company, which carries on business as a vehicle rental company. The Company and the Union entered into a collective agreement dated November 2007 (“the Agreement”).
[6] Article 7 of the Agreement establishes the grievance procedure agreed upon. Individual grievances are governed by one procedure, and policy grievances by a variation of the individual grievance procedure.
[7] Article 7.05 pertains to policy grievances which have two distinctive features as follows:
Policy grievances are grievances “arising directly between the Company and the Union concerning the interpretation, application or alleged violation of [the] Agreement” and;
The provisions of article 7.05 “… must not be used with respect to a matter upon which an employee or employees would be personally entitled to grieve and the regular grievance procedures shall not be thereby by-passed”.
[8] Article 8 of the Agreement provides in part that “no matter may be submitted to arbitration which has not been properly carried through all the requisite steps of the grievance procedure”.
[9] On July 8, 2008, the Company advised the Union that it had decided to make changes to the benefit plans of the employees governed by the Agreement. The changes reduced co-insurance from 100% to 75% and set caps on various heads of coverage provided. The changes would become effective September 1, 2008.
[10] Benefits are covered by article 19 of the Agreement which provides in part as follows:
19.01 Full Time Employees
The Company agrees to contribute one hundred percent (100%) of the billed premiums towards the coverage of eligible regular full-time employees in the employ of the Company under the benefit plans currently in place. Life Insurance, Dependent Life Insurance, Accidental Death and Dismemberment, Long term Disability, Supplemental Health Care, Dental Care and Vision Care Expense Insurance.
19.03 The Company will inform regular full-time employees thirty (30) days in advance of any changes to the Health and Welfare program.
[11] Representatives of the Company and the Union met in July 2008 to discuss the upcoming changes. The Company’s notes from this meeting characterize the Union’s concern as relating to the reduction of the co-pay coverage. The Company’s notes also suggest that the Union representatives were concerned that benefits were being reduced for these employees because they are unionized.
[12] The day after the proposal came into effect the Union launched a policy grievance alleging “discrimination on benefits due to association, (also ethnicity)”. In the grievance the Union indicated the articles or sections violated as being “Human rights Code, article 22 and all relevant and pertinent articles and legislations”. Article 22 is the provision in the Agreement prohibiting discrimination.
[13] At a meeting between Company and Union representatives on October 1, 2008, the Union clarified its concern as recorded by the Company’s notes that as the Union’s benefit plan was not the same as the corporate employees’ plan the Union members were being discriminated against because of Union association.
[14] On October 24, 2008, the Company replied to the grievance stating in part “we are in compliance with our obligations under Article 19”.
[15] The Union submitted the grievance to arbitration on December 18, 2008.
[16] On February 23, 2009, counsel for the Company informed the Union that it would be raising a preliminary objection to the grievance on the grounds that it was improperly filed as a policy grievance under article 7.05, because the matter “could have been raised by any one or all of individual employees who claimed to have been discriminated against”.
[17] On March 2, 2009, the Union’s counsel advised that the Union’s position would be that the grievance was properly filed and that the Company had violated article 19.01 of the Agreement by making changes to the “benefit plans currently in place”. Counsel for the employer responded that the Union was “attempting to improperly expand or alter the grievance filed to include grievance on matters not previously grieved”.
[18] At the commencement of the arbitration in March 2009 the Company raised these two matters as preliminary objections, challenging the arbitrator’s jurisdiction to hear the grievance because:
(a) the grievance was not a proper policy grievance, and;
(b) the Union had improperly expanded and altered the grievance so that it no longer related to “discrimination” but instead related to an interpretation of article 19.
[19] The arbitrator dismissed the preliminary objections and went on to hear the arbitration on its merits, concluding that the Company had violated article 19(1) of the agreement.
issues
[20] The issues presented to this Court were:
Did the arbitrator err in concluding that the grievance was properly brought as a policy grievance?
Did the arbitrator err in concluding that the Union had not expanded the scope of the grievance?
Did the arbitrator err in unreasonably interpreting article 19.01 of the Agreement?
standard of review
[21] The Company and the Union agree that a reasonableness standard of review applies to the arbitrator’s interpretation of article 19.
[22] During the hearing counsel for the Company conceded that a reasonableness standard should also apply to the analysis of the arbitrator’s conclusion as to arbitrability.
[23] It is trite to say that this Court owes a very high degree of deference to a labour’s arbitrator’s interpretation of a collective agreement.
[24] In beginning the analysis of this arbitral decision it is helpful to return to the frequently cited concluding sentences of paragraph 47 of the judgment of the Supreme Court of Canada in Dunsmuir v. New Brunswick, [20008] 1 S.C.R. 190 where the Court discussed the concept of reasonableness as follows:
In judicial review, reasonableness is concerned mostly with the existence of 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.
(Emphasis added)
[25] As recently stated by the Court of Appeal of this province in Abdoulrab v. Ontario (Labour Relations Board) 2009 ONCA 491, 95 O.R. (3d) 641 at paragraph 42:
Judicial review on a standard of reasonableness recognizes there is no single outcome that must be regarded as the correct one. Rather there is a range of outcomes that are acceptable and the function of judicial review on a standard of reasonableness is merely to determine whether the decision falls within that range.
[26] I turn to a discussion of the issues.
was the grievance a proper policy grievance?
[27] The arbitrator concluded that there was no doubt that the changes to the benefit plans affected Union members on an individual basis. However, he concluded that the allegation raised in the grievance “is that the Company’s changes to the benefit plans are prohibited by the language of the Collective Agreement that provides for “benefits”. Since the grievance challenges the Company’s interpretation of the “benefits” language, he found the grievance was one “arising directly between the Company and the Union” and therefore it is properly a Union policy grievance.”
[28] There is arbitral authority for the proposition that where an issue affects an individual but at the same time affects the interests of all employees, a policy grievance is permissible (See e.g. Weston Bakeries Ltd. (1970), 21 L.A.C. 308).
[29] Although there is arbitral authority for a stricter approach, as urged in this case by the Company (See e.g. Burlington Board of Education (1967), 18 L.A.C. 347), the arbitrator’s decision in this case to apply the wider standard is, in my opinion, a reasonable one and supported by law and the facts he found, and on that account I may not revisit his decision.
was the scope of the grievance expanded?
[30] The Company submits forcefully the attractive argument that on its face, the grievance alleges discrimination and raises no suggestion that the proposed change to the benefits plan is prohibited by the language of article 19.01 of the Agreement. Counsel points out that there is a world of difference between an action that is discriminatory and one that is per se prohibited. Counsel submits that no reading of the grievance, however generous, would allow the Company to conclude that the Company could make no change to the plan at all.
[31] At pages 17 through 20 of his decision of March 31, 2009, the arbitrator reviewed the authorities on the particularity required in grievances. He reminded himself that adhering unduly to technicalities in considering grievances would have an unwelcome impact on the speedy and informal process provided by arbitration. It is conceded by counsel that grievances are not pleadings.
[32] The arbitrator concluded that the grievance by alleging violation regarding “benefits” brought article 19 of the Agreement into play, being the article that dealt with benefits. The Company acknowledged that article 19 was an issue in its reply to the grievance where it referred to that article and stated that it has complied with it. The arbitrator found that in its pre-hearing discussions with the Union representatives, the Company was well aware that what was at issue was the reduction of coverages in the benefit plans. The arbitrator concluded that there could be no prejudice to the Company given that background, in the Union’s decision to advance a legal argument based upon facts that were well known to both parties.
[33] In my opinion it was appropriate for the arbitrator to consider the discussions between the parties surrounding the grievance, and the lack of prejudice to the Company, in determining whether the grievance had been impermissibly expanded. Although standing alone the arbitrator’s conclusion that by referring to “benefits” in the grievance the Company was made aware that the grievance concerned a breach of article 19, is in my opinion a bit of a stretch, I am not prepared to conclude that against the background informing his decision as referred to by the arbitrator, his decision was unreasonable.
was the interpretation of article 19 UNREASONABLE?
[34] Article 19(1) of the Agreement is clear and unambiguous. The Company is required to contribute 100% of the billed premiums towards the coverages “currently in place”, as listed.
[35] The problem is caused by article 19.03. Standing alone, it is also clear and unambiguous. If read literally, as is urged by the Company, it would mean that notwithstanding the requirement to maintain coverages in article 19.01, the Company could unilaterally reduce (or even terminate) all coverages at any time simply by giving 30 days notice. That would be an extraordinary result which cannot have been intended by the parties. For all practical purposes it would render article 19.01 meaningless. How then to reconcile these unambiguous, but apparently contradictory, provisions? In coming to his conclusion the arbitrator held that the term “Health and Welfare program” used in article 19.03, which is nowhere defined in the Agreement, has a broader meaning than “benefit plans”. That broader meaning could include the administration of benefit plans, but not the substantive provisions of the benefits in place in November 2007. By interpreting the provisions in this manner, article 19.03 would not negate the provisions of article 19.01 which requires maintenance of the benefit plans in place at the time the agreement came into force.
[36] The arbitrator was faced with the task of resolving the apparent conflict between the two subsections, in order to fulfill his obligation to interpret the Agreement.
[37] In an effort to determine what the parties intended in their drafting of article 19 the arbitrator referred to a memo from the employer dealing with previously made administrative changes to the Company’s Health and Welfare Program which did not involve changes to the benefit plans themselves. By using the memo of what had previously transpired, the arbitrator was able to resolve any inconsistency between articles 19.01 and 19.03 and do that which he was charged to do, interpret the language of the agreement. An arbitrator may refer to extrinsic evidence if it will assist him in determining the parties’ true intent (See Noranda Metal Industries Ltd. v. IBEW, Local 2345 (1983), 44 O.R. 2d 529 (C.A.).
[38] The arbitrator accordingly concluded that whereas article 19.01 required the benefits to be maintained by the Company at the level existing when the Agreement came into effect, article 19.03 enabled the Company to make changes of an administrative nature (for example, a change of carriers) upon giving thirty days’ notice which, given the history referred to, must have been the intention of the parties.
[39] In my opinion, this was a reasonable conclusion, which permitted the two subsections of article 19 to exist in harmony.
conclusion
[40] Notwithstanding the reasoned and ably presented submissions made on behalf of the Company, I would dismiss the application for judicial review.
[41] The parties have agreed on costs fixed at $5,000 inclusive payable to the successful party and that is so ordered.
JENNINGS J.
ASTON J.
HERMAN J.
RELEASED: January 20, 2011
CITATION: Dollar Thrifty Automotive Group Canada Inc. v. United Food and Commercial Workers Union, Local 175, 2011 ONSC 661
DIVISIONAL COURT FILE NO.: 413/10
DATE: 20110120
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
JENNINGS, ASTON and HERMAN JJ.
B E T W E E N :
DOLLAR THRIFTY AUTOMOTIVE CANADA INC.
Applicant
– and –
UNITED FOOD AND COMMERCIAL WORKERS UNION, LOCAL 175
Respondent
REASONS FOR JUDGMENT
JENNINGS J.
RELEASED: January 20, 2011