The Ontario Refrigeration and Air Conditioning Contractors Association v. United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada Local 787, 2015 ONSC 1121

CITATION: The Ontario Refrigeration and Air Conditioning Contractors Association v. United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada Local 787, 2015 ONSC 1121

DIVISIONAL COURT FILE NO.: 198/14 DATE: 20150319

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

LEDERMAN, SACHS and LEDERER JJ.

BETWEEN:

The Ontario Refrigeration and Air Conditioning Contractors Association Applicant

– and –

United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada Local 787 and Norm Jesin Respondents

COUNSEL: Richard J. Charney, for the Applicant, The Ontario Refrigeration and Air Conditioning Contractors Association Ronald Lebi and Laurie Kent, for the Respondent, United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada Local 787

HEARD at Toronto: February 13, 2015

Lederman J.

Nature of Proceeding

[1] This is an application for judicial review of an interest arbitration award (the “Award”) of Arbitrator Norman Jesin (the “Arbitrator”).

[2] The Arbitrator was appointed by the Minister of Labour, pursuant to section 150.4(7) of the Labour Relations Act, 1995, S.O. 1995, c. 1, Sched. A as amended (the “Act”) to resolve the outstanding bargaining issues in dispute between the respondent union (“UA Local 787”) and the applicant (“ORAC”).

[3] At the hearing before the Arbitrator, ORAC and UA Local 787 disagreed about the scope of the Arbitrator’s jurisdiction pursuant to his appointment under s. 150.4(7) of the Act. ORAC took the position that the Arbitrator’s jurisdiction was restricted by the geographic boundaries outlined in s. 150.1(1) of the Act. UA Local 787, on the other hand, argued that the Arbitrator was empowered and authorized under the Act to issue an award in respect of the province-wide bargaining unit.

[4] The Arbitrator decided that he was empowered, and indeed required to arbitrate a renewal of the entire agreement on a province-wide bargaining unit.

Background

[5] UA Local 787 is a trade union representing all air conditioning mechanics and maintenance mechanics employed in the air conditioning, refrigeration and mechanical systems industry in the Province of Ontario.

[6] ORAC is a multi-employer agency accredited to represent all employers in the residential sector of the construction industry throughout Ontario in contractual relations with UA Local 787 and received that status from the Ontario Relations Board in November, 2005. Employer members of ORAC must adhere to all the collective agreements that ORAC negotiates on their behalf.

[7] ORAC and UA Local 787 have in the past, negotiated a succession of residential sector agreements. The most recent residential construction collective agreement between ORAC and UA Local 787 expired on April 30, 2013.

[8] Collective bargaining toward a renewal collective agreement began in September, 2013 and continued until February 28, 2014. The parties reached agreement on a number of collective agreement terms; however, a number of bargaining issues remained unresolved between the parties, including the monetary wage packages for employees in the bargaining unit.

[9] On March 3, 2014, UA Local 787 notified the Ministry of Labour that it requested, under s. 150.4(4) of the Act, that the bargaining issues and dispute between the parties be settled by mandatory interest arbitration.

[10] On March 14, 2014, the Arbitrator was appointed by the Minister of Labour pursuant to s. 150.4(7) of the Act to resolve the outstanding bargaining issues in dispute.

[11] At the interest arbitration hearing, the Arbitrator considered the respective bargaining positions of the parties and selected UA Local 787’s position. ORAC does not challenge the decision of the Arbitrator to rule in favour of UA Local 787’s final offer position. Rather, ORAC is challenging the Arbitrator’s determination as to the scope of his jurisdiction.

Relevant statutory and regulatory framework

[12] A summary of the relevant provisions in the Act (“the GTA provisions”) and associated Regulation is as follows:

The Act:

s. 150.1 states that ss. 150.2-150.4 “apply only with respect to the geographic areas of jurisdiction” of Toronto and surrounding areas (“the GTA”).

s. 150.2 provides that residential construction agreements in the geographic areas described in s. 150.1 are required to expire every third April 30 commencing in 2007.

s. 150.2(7) states that “[n]othing in this section shall be interpreted to affect the validity of a collective agreement to which this section applies with respect to work other than residential work performed in the geographic areas described in subsection 150.1(1).”

s. 150.3 outlines the limited terms of striking and locking out for the GTA area. The parties may not conduct strikes or lockouts beyond June 15th in a year in which an agreement expires.

s. 150.4(1) mandates that “either party to negotiations for the renewal or replacement of a collective agreement that expires on April 30 in a given year according to section 150.2 may, by notice, given in accordance with subsection (4), require that the matters in dispute between them be decided by arbitration.”

s. 150.4(7) states that “the Minister shall appoint an arbitrator” upon receiving this notice.

Arbitration – Residential Sector of the Construction Industry, O. Reg. 522/05 (“the Regulation”):

s. 3(1) states that “[t]he arbitrator has the exclusive jurisdiction to determine all matters that he or she considers necessary to conclude a new collective agreement, including whether a matter in dispute is a monetary item.”

Legislative background

[13] As can be seen from the Hansard Debtates of April 25, 2000, November 3, 2004 and March 29, 2005, the GTA provisions were enacted to address the problem of rolling strikes that halted or interfered with residential construction in the GTA for several months in the late 1990s. The legislative purpose was to limit residential construction delays in the GTA. The legislature implemented a special bargaining regime for the residential construction industry exclusively in the GTA by which unions and employers operating in the GTA could resort to interest arbitration as an alternative to the economic threat of strike or lockout. Initially, the GTA provisions were enacted on an interim basis in 2000, and re-enacted in 2002. They ultimately became permanent provisions, in the Act, in 2005.

The Award Relating to Scope of Jurisdiction

[14] The Arbitrator first addressed whether he could or should determine the collective agreement dispute for the existing province-wide bargaining unit or whether he should establish a collective agreement for the Greater Toronto Area only. In this respect, the Arbitrator stated:

“I begin by noting that the Employer operates under an accreditation order issued in 2005 in which it is accredited for a province-wide bargaining unit. The Employer had been bargaining with the Union under this authority since that time and has continued to reach agreements on a province-wide basis since that time. Since the first agreement the parties have agreed to the same expiry dates as those mandated in s. 150.2 and indeed in the present round of bargaining, the parties have agreed that the bargaining unit in the renewal agreement remain province-wide.

Yet if I am restricted to issuing award for Toronto only, that would be inconsistent with the agreement to have a single province wide bargaining unit. If I were to award terms and conditions for Toronto only, there would be a binding agreement for Toronto, but no agreement outside Toronto. According to Employer counsel, the Employer could continue a lock-out outside Toronto and the Union could continue a strike. This would essentially divide the collective agreement into two bargaining units with two ultimate agreements, contrary to the practice and agreement of the parties to maintain one province-wide bargaining unit.

I am troubled by the notion that I should divide the bargaining unit in this way and do not think I should do so unless I find clear intent in the language of the Act that this be the result. . .

S. 150.4 (1) requires me to decide the “matters in dispute between [the parties]” for the “renewal or replacement of a collective agreement that expires on April 30 in a given year according to section 150.2 . . .” I do not think this legislation empowers me to arbitrate a renewal of only part of the agreement in these circumstances, effectively dividing this longstanding bargaining unit into two against the stated wishes of the parties. In my view I am empowered, and indeed required to arbitrate a renewal of the entire agreement on a province-wide bargaining unit.”

Position of ORAC

[15] ORAC submits that the Arbitrator’s decision was wrong or unreasonable because

(1) Section 150.1 of the Act limited the Arbitrator’s authority to the GTA only;

(2) The Arbitrator incorrectly or unreasonably concluded that determining the dispute in the GTA only, would fracture the existing bargaining unit and create two bargaining units and two collective agreements; and

(3) the Arbitrator’s decision deprived ORAC of the right to lock out its employees outside of the GTA.

Position of UA Local 787

[16] Counsel for UA Local 787 argued that s. 150.1 merely provides a gateway to the Arbitrator’s jurisdiction in that there did exist a dispute within the GTA. However, once the Arbitrator was appointed, his jurisdiction was not circumscribed by that provision as he was required to create a collective agreement which contemplated resolution of the whole dispute, i.e. the dispute both within and outside the GTA. The Arbitrator thereby was able to create a province-wide collective agreement that was consistent with the statute, the pre-existing collective bargaining structure and the parties’ agreement prior to arbitration.

[17] Counsel for UA Local 787 submits that to restrict the Arbitrator’s jurisdiction to solely within the GTA, would result in a collective agreement in the GTA only. That would require the Arbitrator to ignore the parties’ agreement as to the scope of the bargaining unit and would have created a new issue to be decided or dispute between the parties. It would also create two collective agreements where there had been one before and in a context where the parties wanted a single province-wide collective agreement.

[18] The Arbitrator read s. 3 of the Regulation in accordance with what he saw as its plain meaning and settled the non GTA issues. This was the only practical way in which the Arbitrator could put the parties in a position to have a single collective agreement that resolved the whole dispute and preserved the whole bargaining structure.

[19] Counsel for UA Local 787 submits that when ss. 150-1 – 150.4 of the Act and the Regulation are read together, it is apparent that the end result of the Arbitrator’s task is meant to be a completed collective agreement. In other words, the regulatory scheme contemplates that the whole dispute between the parties will be resolved by arbitration and the result will be a single collective agreement.

[20] What the Arbitrator did was to reasonably settle the dispute both within and outside the GTA together. Counsel submits that this is consistent with the public policy objective (limiting strikes and lockouts within the GTA) and is also consistent with the Arbitrator’s mandate under the Regulation.

Analysis

[21] Under the GTA provisions (ss. 150.2–150.3), the legislature deviated from the normal strike/lockout rules and created a restricted 45-day window (between May 1 and June 15) in which employers and unions in the residential construction sector of the GTA, were permitted to strike or lockout. Outside of that 45-day window, the rights to strike and lockout are rescinded and any unresolved disputes at collective bargaining must be resolved by binding interest arbitration in accordance with the provisions of the Act.

[22] With respect to the authority of an Arbitrator appointed pursuant to s. 150.4, that authority is expressly circumscribed by s. 150.1 of the Act, which clearly states that ss. 150.2, 150.3 and 150.4 apply only with respect to the GTA geographic areas.

[23] The GTA provisions use the clearest of language to limit the Arbitrator’s jurisdiction to the geographic territory of the GTA as set out in the Act. This is the case regardless of the geographic scope of the prior collective agreement.

[24] Section 3 of the Regulation cannot override s. 150.1 of the Act. Although the powers given by s. 3 of the Regulation are expansive, empowering the Arbitrator to determine all matters that he or she considers necessary to conclude a renewal collective agreement by selecting final offer terms and conditions, the Arbitrator’s power under s. 3 is restricted by the geographic constraints placed upon it by s. 150.1 of the Act. Section 150.1 transcends and governs the intent and scope of the Regulation. In other words, as stated by the Supreme Court of Canada, “The scope of the regulation is constrained by its enabling legislation” (see Bristol – Myers Squibb Co. v. Canada (Attorney General), 2005 SCC 26 at para. 38).

[25] In finding that he had jurisdiction over the non-GTA issues, however, the Arbitrator is utilizing the expansive language of s. 3 of the Regulation to extend his jurisdiction beyond that which s. 150.1 of the Act restricts him to. It should be remembered that the source of the Arbitrator’s jurisdiction is the Act and not the Regulation.

[26] On a plain reading, one can infer that s. 150.2 addresses only those collective agreements with the geographic scope entirely within the territory of the GTA. The Arbitrator is therefore to arbitrate only that part of the agreement to which s.150.2 applies, namely for residential construction in the Greater Toronto area and not any part of the agreement outside of that territorial scope.

[27] Further, it is entirely permissible for there to exist a collective agreement to determine terms and conditions of the employment for the GTA within a broader provincial bargaining unit. In fact, the language of the prior collective agreement expressly contemplated that the province-wide bargaining unit be divided into geographic zones within the Province of Ontario. That collective agreement contains wage packages that vary depending on job classifications, work location and work zone. Accordingly, it is a province-wide collective agreement that sets out separate and distinct terms and conditions of employment in different geographic zones. The fact that the Arbitrator could not assume jurisdiction over the non GTA will not necessarily result in the creation of two separate collective agreements.

[28] That being said, there is no question that the immediate (and possible long term effect) of the Arbitrator’s limited jurisdiction under s. 150.1 of the Act is to leave that portion of the bargaining unit that is located within the GTA area with a collective agreement and the remaining members of the bargaining unit without a collective agreement. While this may not be the most desirable outcome, it is the one that is mandated by the legislation.

[29] In considering the impact of the legislation in this instance it is important to remember that the rights to strike and lockout are corner stones of the institution of labour relations in Canada. The revocation of the right to strike or lockout can only be established by express limitations imposed by the Act or by clear agreement of the parties. It is a fundamental principle of the labour relations regime that parties to a labour dispute who are unable to conclude a collective agreement, acquire the legal right to strike or lockout and only in exceptional and compelling circumstances can there be any interference with that right. (The Supreme Court of Canada in a series of cases including Saskatchewan Federation of Labour v. Saskatchewan, 2015 SCC 4, has in fact elevated the right to strike, as an essential component of collective bargaining, to constitutional status.) Apart from the question of whether the GTA provisions would now pass constitutional muster (which is not in issue in this case), in any event, it would take the clearest of statutory language to allow an Arbitrator to interfere with free collective bargaining and the parties’ legal right to strike or lockout outside the GTA by imposing a binding arbitration order.

[30] The Act reflects the legislature’s decision to provide a historic compromise regarding when unions and employers have the right to strike or lockout. That restriction was directed only at the geographical area of the GTA. The Arbitrator acted contrary to the letter and spirit of the GTA provisions. He improperly expanded his jurisdiction in respect of the non GTA and infringed the parties’ statutory rights to freely negotiate terms and conditions of employment and to resort to their rights of strike and lockout in the non GTA.

Conclusion

[31] Whether the standard of review in this case is correctness because it engages a true question of jurisdiction (which the Supreme Court of Canada has stated would only exist in the most narrow and exceptional of cases when a decision-maker is interpreting its home statute: Alberta (Information and Privacy Commission) v. Alberta Teachers Association, 2011 SCC 61 at para. 34), or is reasonableness (which the weight of authority favours particularly for decisions by labour boards and arbitrators in the interpretation of their enabling legislation: Attorney General of Canada v. Public Service Alliance of Canada, 2011 FCA 257 at para.29), the Arbitrator’s decision in this case was neither correct nor reasonable.

[32] For these reasons, an order will go declaring that the Award in respect of the non GTA is without legal force and effect and quashing that portion of the Award.

[33] Counsel have agreed that the costs of this application be fixed at $5,000, all inclusive. Accordingly, UA Local 787 is to pay that amount to the applicant, ORAC within 30 days.

___________________________ Lederman J.

___________________________ Sachs J.

___________________________ Lederer J.

Released: March 19, 2015