CITATION: Canadian Union of Public Employees Local 1974 v. Kingston General Hospital, 2013 ONSC 6054
DIVISIONAL COURT FILE NO.: 116/13
DATE: 20130927
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
PARDU, HIMEL AND RAMSAY JJ.
BETWEEN:
CANADIAN UNION OF PUBLIC EMPLOYEES LOCAL 1974
Applicant
– and –
KINGSTON GENERAL HOSPITAL
Respondent
Andrew Astritis, for the Applicant
Frank Cesario and Carolyn Cornford Greaves, for the Respondent
HEARD: September 25, 2013
Himel J:
Overview
[1] C.U.P.E. Local 1974 ("the Union") applies for judicial review of an arbitrator's award dated January 3, 2013. The award upheld the approach of the Kingston General Hospital ("the Hospital") for calculating Early Retirement Allowances ("ERA") and Voluntary Exit ("VEO") options for certain eligible part-time employees who were affected by the decision to move the Hospital's Ambulatory Clinic to another hospital and were offered ERA and VEO options. The dispute between the parties involves the interpretation of provisions in the collective agreement for part-time employees concerning the calculation of "two (2) weeks' salary for each year of service" which is the formula used to calculate the amount of the ERA and the VEO. The Union moves to set aside the award as unreasonable arguing that the interpretation of the provisions produces absurd results.
Background
[2] The Hospital announced it would be moving its Ambulatory Clinic to another hospital and employees affected were given ERA or VEO options. The Union and the Hospital are parties to two collective agreements: one for full-time employees and the other for part-time employees. The provisions regarding ERA and VEO are virtually identical. The agreement for part-time employees provides as follows:
18.02(a) Retirement Allowance
An employee who elects an early retirement option shall receive, following completion of the last day of work, a retirement allowance of two (2) weeks' salary for each year of service, plus a prorated amount for any additional partial year of service, to a maximum ceiling of fifty-two (52) weeks’ salary.
18.02(b) Voluntary Exit Option
An employee who elects a voluntary exit option shall receive, following completion of the last day of work, a separation allowance of two (2) weeks' salary for each year of service, to a maximum of fifty-two (52) weeks’ pay.
[3] For full-time employees, the Hospital calculated benefits by multiplying each employee's "years of service" by the standard two weeks' salary for a full-time employee. For part-time employees, the Hospital prorated each employee's years of service to determine the equivalent in full-time years of service and went on to multiply the "full-time equivalent" years of service by a reduced salary that reflected the part-time employee's actual earnings. The Union filed a grievance challenging the Hospital's approach to calculations for part-time employees and argued that this approach would pay part-time employees significantly lower benefits than full-time employees for the same number of hours worked. The parties filed an agreed statement of facts and the service, work hours and wage details for two part-time employees as examples.
The Arbitrator's Award
[4] Arbitrator Larry Steinberg dismissed the Union's grievance and held that the Hospital's approach in calculating ERA and VEO for part-time employees was a reasonable interpretation and application of Articles 18.02 (a) and 18.02 (b) of the collective agreement for part-time employees and that the Hospital had reasonably calculated "years of service" for those employees. The term is not defined in Article 18 or in the collective agreement for part-time employees. Several provisions in the agreement convert service or seniority using the rate of one year of service for each 1725 hours worked and he did not "see any reason why such a method is not acceptable for the purposes of Article 18". He also held that the plain language of Article 18 indicates that the Hospital had chosen a reasonable approach in determining "two weeks’ salary". He held that the Hospital properly calculated "two weeks' salary" for part-time employees as the actual salary of each employee receiving ERA or VEO. He held that it was not reasonable to use two weeks' salary of a full-time employee to calculate a part-time employee's benefits. He concluded that the Hospital's averaging approach was rational because the employees had not been working for a considerable period and had varied weekly hours. He found that both elements of the Hospital's approach were reasonable and that the formula was within the range of reasonable options and dismissed the grievance.
Positions of the Parties
[5] The Union submits that it was unreasonable for the Arbitrator to interpret Article 18.02(a) and Article 18.02(b) in a manner that it says reduced part-time employee benefits disproportionately to the same benefit provided to full time employees pursuant to a different collective agreement. It takes the position that calculation of the benefit should be made by multiplying calendar years of service times actual part time earnings, or alternatively, by multiplying the equivalent of years of work, that is to say, hours worked divided by 1725 hours times the full time equivalent hourly salary. The Union submits that the Arbitrator's approach which determines a part-time employee's benefits by multiplying the equivalent in full-time years of service by the part-time salary penalizes part-time employees as the calculation has the effect of double prorating so that a part-time employee working half of full-time hours is only entitled to a quarter of full-time benefits. Moreover, a long service part-time employee in this scenario who worked the same total number of hours as a shorter service full-time employee would get only half the benefits. It used the scenarios of two employees to demonstrate what it says are absurd results. It submits that these results are unreasonable and, therefore, the award should be set aside.
[6] The Hospital argues that the Arbitrator's interpretation of Article 18 is reasonable and that "years of service" should be interpreted in the same manner as "service" in other provisions of the collective agreement. Those provisions say that service is calculated "on the basis of one (1) year for each seventeen hundred and twenty-five (1725) hours worked". It also argues that "two weeks' salary" must be interpreted as the actual two weeks' salary of the relevant employee and not the full-time equivalent of that employee's salary. Further, it submits that it is a rational approach to average hours of work over a 26 week period to account for variations in weekly hours and periods in which the employees had not worked. The Hospital asks that the Arbitrator's award be upheld as reasonable and the application for judicial review be dismissed.
Analysis and Decision
[7] The standard of review for a labour arbitrator's interpretation of a collective agreement is reasonableness and such a decision attracts deference from a reviewing court: see Imperial Oil Limited v. Communications, Energy & Paperworkers Union of Canada, Local 900, 2009 ONCA 420 at para. 26; Canadian General-Tower Ltd. v. U.S.W., Local 862, 2008 ONCA 404 at paras. 18-20. In Dunsmuir v. New Brunswick, 2008 SCC 9, the Supreme Court said at para. 47:
…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 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.
[8] In Newfoundland and Labrador Nurses' Union v. Newfoundland and Labrador (Treasury Board), 2011 SCC 62, [2011] 3 S.C.R.708, Justice Abella wrote at para. 17:
The fact that there may be an alternative interpretation of the agreement to that provided by the arbitrator does not inevitably lead to the conclusion that the arbitrator's decision should be set aside if the decision itself is in the realm of reasonable outcomes….
[9] A review of a decision on the basis of reasonableness must take into account the question of context: see Alberta (Information and Privacy Commissioner) v. Alberta Teachers' Association, 2011 SCC 61, [2011] 3 S.C.R. 654 at para. 47. A reviewing court will intervene where an arbitrator's interpretation of a provision fails to give effect to the intentions of the parties or is one which the provision cannot reasonably bear: see Donald J.M. Brown and David M. Beatty, Canadian Labour Arbitration, 4th ed. (Toronto; Thomson Reuters Canada Ltd. 2012) at para. 4:2100. If the interpretation gives rise to absurd results, then a court may intervene.
[10] Applying these principles, we conclude that the labour arbitrator's interpretation of the phrase "two weeks' salary for each year of service" used to calculate the ERA and VEO is reasonable in that he interpreted the phrase in the context of a collective agreement relating to part-time employees. The Arbitrator agreed that the calculation used by the Hospital was logical and a common sense approach to the meaning of those words in the agreement. The Arbitrator considered the Union's argument that the interpretation and calculation of the Hospital involved a "double proration", that is, prorating for years of service and prorating for two weeks' salary. He held that was not correct as the Hospital's calculation did not involve prorating for "two weeks' salary" but was based on the actual hours worked over the course of two weeks and multiplies that number of hours by salary. We are of the view that it cannot be said that the Arbitrator's interpretation was not within the range of reasonable, acceptable interpretations. That there may be an alternative interpretation of the agreement does not lead to the conclusion that the award should be set aside. The Union's argument is based on the assumption that the parties intended that part-time employees be treated in the same way as full-time employees who are covered by a different collective agreement. That assumption is not one that the Arbitrator was required to accept. The decision is in the realm of reasonable outcomes.
[11] For these reasons, the application for judicial review is dismissed. Costs are fixed in the agreed upon amount of $4,000.
Pardu J.
Himel J.
Ramsay J.
Released: September 27, 2013
CITATION: Canadian Union of Public Employees Local 1974 v. Kingston General Hospital, 2013 ONSC 6054
DIVISIONAL COURT FILE NO.: 116/13
DATE: 20130927
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
PARDU, HIMEL AND RAMSAY JJ.
BETWEEN:
CANADIAN UNION OF PUBLIC EMPLOYEES LOCAL 1974
Applicant
– and –
KINGSTON GENERAL HOSPITAL
Respondent
REASONS FOR JUDGMENT
Himel J.
Released: September 27, 2013