Communications, Energy and Paperworkers Union of Canada v. Sanofi Pasteur Limited, 2012 ONSC 7173
CITATION: Communications, Energy and Paperworkers Union of Canada v. Sanofi Pasteur Limited, 2012 ONSC 7173
DIVISIONAL COURT FILE NO.: 195/12
DATE: 20121214
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
KITELEY, DUCHARME AND DALEY JJ.
BETWEEN:
COMMUNICATIONS, ENERGY AND PAPERWORKERS UNION OF CANADA, LOCAL 1701
Applicant
– and –
SANOFI PASTEUR LIMITED and HOWARD D. BROWN
Respondents
Douglas J. Wray, for the Applicant
Richard J. Charney and Brian Gottheil, for the Respondents
HEARD at Toronto: December 14, 2012
ORAL REASONS FOR JUDGMENT
KITELEY J. (orally)
[1] This is an application for judicial review brought by CPU of Canada, Local 1701 seeking to quash the arbitration award made by Howard D. Brown, dated March 26, 2012. The arbitrator held that the doctrine of equitable estoppel applies to bar the union from proceeding with its grievance that the company had violated the contracting out provision of the Collective Agreement.
Background
[2] An employee who worked as Mail Clerk Driver had been on sick leave and asked to take early retirement. Although she did not qualify for the early retirement program, the company agreed to her retirement effective February 8, 2010 and agreed to pay severance of almost $50,000. In the context of her request, there were some communications between Mr. Byrne, the President of the Union Local and Mr. Mederios, the company’s Global Head of Engineering and Maintenance.
[3] On February 8, 2010, the company made an internal job posting for a new position of Utility Person. On February 12, 17 and 19, there were emails exchanged between the Union Local President and the Director of Human Resources over the request by the Union to post the mailroom position, rather than contract it out. On February 22, 2010, the Union filed a policy grievance alleging a violation of the contracting out provision of the Collective Agreement.
[4] At the outset of the arbitration on January 26, 2012, the company took the position that the grievance was not arbitrable because:
(a) there was an oral agreement between Mr. Byrne and Mr. Medeiros to the effect that in consideration of the arrangements made with the retiree, the Union agreed that the position of Male Clerk Driver would be contracted out and a new position would be created for a Utility Person and, as a result, the head count would not be affected; or
(b) the Union was estopped from proceeding with its grievance in the circumstances of the background and conclusion of its arrangement with the retiree as well as the consideration provided to the Union of maintaining the headcount in the bargaining unit.
[5] The Reasons for Decision of the Arbitrator are 16 pages in length. The Arbitrator reviewed the evidence of Mr. Medeiros, Mr. Calvo, the Director of Human Resources and Mr. Byrne. On pages 14 and 15, the Arbitrator concluded that the company had failed to prove that there was an oral agreement that would bar the grievance from arbitration. He held that the alleged oral agreement was unenforceable. At the bottom of page 15 and until the middle of page 17, the Arbitrator’s reasons addressed the alternative argument:
It was also submitted by the Company that in any event, the union was estopped from proceeding with its grievance in the circumstances of the background and conclusion of its arrangement with [the Mail Clerk Driver] allowing her early retirement outside of [the Voluntary Leavers Program) with a $50,000 severance payment as well as the consideration provided to the Union of maintaining the headcount in the bargaining unit. I accept the evidence of witnesses for the Company in that respect that the payment to [the Mail Clerk Driver] would not have been made if it was believed that the issue of contracting out would end up at arbitration following the filing of a grievance. The grievance referred to by Mr. Byrne and as filed by the Union relates to an issue arising under the collective agreement.
I find on the evidence that Mr. Byrne’s conduct in his discussions with Mr. Medeiros and in other correspondence clearly lead to the Company’s reliance on the terms of the settlement of the consideration for [the Mail Clerk Driver] resulting in the severance payment to her and of the filling of the Mail Clerk position with a third party and posting a job in General Services, to maintain the head count in the bargaining unit. While Mr. Byrne indicated to Mr. Medeiros that a grievance may be filed as to the Mail Clerk position, if contracted out, there was no indication that the grievance would proceed to arbitration although that is the Union’s right under Article 6.07 of the collective agreement. Mr. Medeiros however, testified that he understood that if a grievance was filed, it would go through the grievance procedure but then disappear. Mr. Byrne did not clarify his intent but in the usual course of consideration of issues between the parties as set out in the evidence, it is fair to conclude that the union which directly benefitted in these circumstances, did not intend to apply its strict rights under the collective agreement.
On the evidence, I find that Mr. Byrne clearly lead Mr. Medeiros to understand the terms of a settlement of the severance issue and that the Mail Driver position would be subcontracted and the head count of the bargaining unit would be maintained. I have found that the potential of a grievance to be filed meant that the deal in totality could not be enforced as an oral agreement. By conduct, I am satisfied that Mr. Medeiros and subsequently Mr. Calvo relied on Mr. Byrne’s conduct in concluding the transaction with [the Mail Clerk Driver]. Further I find that it is clear that consideration would not have been completed without reliance on Mr. Byrne’s conduct to assist in the completion of the resolution of [the Mail Clerk Driver’s] retirement and the understanding that a grievance would not proceed if filed. That matter would have I find, remained as an issue had the terms concerning her retirement had not been satisfied and in which both parties benefited.
Therefore, I find in these circumstances that by conduct the Company was lead by the Union to rely on its stated conditions for the severance payment to its detriment. In these circumstances, the equitable doctrine of estoppel applies to bar the Union from proceeding with its grievance which I find is not thereby arbitrable and is dismissed.
Standard of Review
[6] The parties agree that the standard of review is reasonableness.[^1] Courts must afford considerable deference to labour arbitrators who have the legislative authority and expertise necessary to adapt and apply equitable doctrines, including estoppel, in a manner more appropriate to the arbitration of disputes and grievances in a labour relations context.
Positions of the Parties
[7] The Union argues that the Arbitrator’s Award does not satisfy the reasonableness test because it fails to meet the justification, transparency and intelligibility standard. The Arbitrator arrived at conclusions without any explanation as to the factual and/or legal basis which led to the conclusion. There was no evidence to support the Arbitrator’s factual findings, particularly the finding that by his conduct, Mr. Byrne had represented that the Union would not pursue a grievance if the Mail Clerk Driver position was contracted out. His findings on the estoppel issue were inconsistent with his own earlier factual findings. The Union argues that this was clearly not a case of representation by silence or acquiescence since the Union expressly put the Company on notice that it would grieve if the Company contracted out the Mail Clerk Driver job.
[8] The Company argues that the Union’s position is flawed because the Arbitrator did have the evidence of Mr. Medeiros in which he agreed that Mr. Byrne said that a grievance would be filed but that he “understood” that it would be filed as a “policy only” and would not be pursued. Second, the finding was based on conduct. Third, there was “ample evidence” on which he could reasonably conclude that Mr. Byrne, both through words and conduct, represented that the Union would not refer a contracting-out grievance to arbitration.
Analysis
[9] The doctrine of equitable estoppel is described by Brown & Beatty:[^2] Thus, the essentials of estoppel are:
• a clear and unequivocal representation, particularly where the representation occurs in the context of bargaining;
• which may be made by words or conduct;
• or in some circumstances it may result from silence or acquiescence;
• intended to be relied on by the party to whom it was directed; although that intention may be inferred from what reasonably should have been understood;
• some reliance in the form of some action or inaction; and
• detriment resulting therefrom.
[10] In this judicial review, the factors that are relevant are whether there was a clear and unequivocal representation and whether it was reasonable for Mr. Medeiros to assume there was. To consider the reasonableness of the conclusions the Arbitrator drew in the four paragraphs quoted above, we refer to the findings he made in the context of the submissions that there was an oral agreement. At page 14 appears the following:
Mr. Medeiros considered Mr. Byrne’s statement to be of little concern as a policy grievance would be dealt with in the normal course of events but that assumption overlooks the right of the Union firstly to file such a grievance under the terms of the collective agreement and that in so doing has a right to proceed with all steps in that procedure including arbitration. In the result, a conditional term of an oral agreement vitiates its enforcement to preclude the Union from proceeding with its grievance.
On the evidence, I find that there was an incorrect assumed mutuality by the Company representatives as to the alleged deal with Mr. Byrne as the circumstances do not accord in the totality of an understanding reached by both parties and does not fall within the substance and support of a factual conclusion of a deal as represented by a handshake or other means but rather by a statement by Mr. Byrne that potentiality a grievance concerning contracting out may be filed by the Union. The assumption of Mr. Medeiros that the Union would not proceed with such grievance to arbitration is not sufficient to conclude the existence at that time of an enforceable oral agreement between the parties.
[11] These findings of fact were made in the context of whether the parties had an oral agreement to modify the collective agreement. They are inconsistent with the finding of fact with respect to estoppel and are not supported by the evidence.
[12] Having found that Mr. Medeiros was making an assumption, the Arbitrator could not reasonably have found that Mr. Byrne made a “clear and unequivocal representation.” Further, having found that the assumption overlooked the right of the union to proceed from grievance to arbitration, the Arbitrator could not reasonably have found that Mr. Medeiros reasonably had inferred the Union would forego arbitration.
[13] We accept that the Arbitrator was uniquely placed to respond to the exigencies of the relationship between the Union and the Company in the broader labour relations context. However, in reviewing the decision of the Arbitrator in the context of the justification, intelligibility and transparency in the decision-making process, we are not satisfied that the outcome on the issue of estoppel is within the “range of possible, acceptable outcomes which are defensible in respect of the facts and law.”
[14] The Award of the Arbitrator dated March 26, 2012 is quashed. The grievance, including the preliminary objections will be remitted to be heard by a different Arbitrator.
[15] I have endorsed the back of the Application Record, “The application is allowed. Grievance is remitted to another arbitrator. Respondent shall pay costs of the appellant fixed at $4,500, all inclusive.”
KITELEY J.
DUCHARME J.
DALEY J.
Date of Reasons for Judgment: December 14, 2012
Date of Release: December 21, 2012
CITATION: Communications, Energy and Paperworkers Union of Canada v. Sanofi Pasteur Limited, 2012 ONSC 7173
DIVISIONAL COURT FILE NO.: 195/12
DATE: 20121214
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
KITELEY, DUCHARME AND DALEY JJ.
BETWEEN:
COMMUNICATIONS, ENERGY AND PAPERWORKERS UNION OF CANADA, LOCAL 1701
Applicant
– and –
SANOFI PASTEUR LIMITED and HOWARD D. BROWN
Respondents
ORAL REASONS FOR JUDGMENT
KITELEY J.
Date of Reasons for Judgment: December 14, 2012
Date of Release: December 21, 2012
[^1]: Dunsmuir v. New Brunswick, 2008 SCC 9, 2008 S.C.C. 9; Nor-Man Regional Health Authority Inc. v. Manitoba Association of Health Care Professionals (2011), 2011 SCC 59, 340 D.L.R. (4th) 1 (S.C.C.)
[^2]: Brown & Beatty, Canadian Labour Arbitration, Fourth Edition, Canada Law Book, 2012 at paragraph 2:2210