The Society of Energy v. Ontario Power Generation, 2015 ONSC 167
CITATION: The Society of Energy v. Ontario Power Generation, 2015 ONSC 167
DIVISIONAL COURT FILE NO.: DC-577/12
DATE: 20150109
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Sachs, Harvison Young, D.M. Brown J.J.
BETWEEN:
The Society of Energy Professionals Applicant
– and –
Ontario Power Generation Inc. Respondent
P. Cavalluzzo, A. Telford, for the Applicant
T. Moutsatsos, for the Respondent
HEARD: November 25, 2014
Harvison Young J.:
[1] The Society of Energy Professionals (“Society”) seeks judicial review of a grievance arbitration award by Arbitrator Robert Herman dated October 25, 2012. The Arbitrator determined that the collective agreement does not require Ontario Power Generation (“OPG”) to reimburse employees for meals purchased while those employees are required to commute daily to and from a location at which they are working for a short period unless they are required to engage in a legitimate business function during their meal periods.
[2] Two grievances formed the basis of the arbitration in this case. The first was a policy grievance asserting that OPG improperly refused to pay a meal allowance to workers assigned to Temporary Work Headquarters in accordance Articles 86 and 55.1 of the collective agreement and OPG’s Business and Travel Expenses Policy.
[3] The second was an individual grievance of Diana Baum submitting that OPG refused to pay her meal expenses when she worked outside regular headquarters. Baum’s regular work headquarters is in Pickering and her daily commute is 16 km long. She also performs audits at the Darlington site, which is 6 km farther away from her home than her regular work headquarters. Baum claims travel mileage expenses when auditing at sites that require her to drive any more than 5 km further than her regular commute. Until 2009, Baum also claimed her meal expenses when at Darlington. When her supervisor changed in 2009, her meal expense claims were refused. She then filed her grievance.
Issues on Appeal
[4] The applicant submits that the decision should be set aside on two grounds: first, that the Arbitrator breached the rules of natural justice by basing his determination on an interpretation of the collective agreement that was not argued before him and was more restrictive than even the parties’ own submissions, without notice to the parties; and second, that the Arbitrator’s decision was unreasonable.
[5] For the reasons that follow, I would dismiss the application.
Standard of Review
[6] There is no dispute between the parties with respect to the applicable standard of review.
[7] First, in reviewing a decision on the grounds of procedural fairness, a court need not determine the standard of review. Rather, the task of the court is to determine whether the appropriate level of procedural fairness has been accorded: see Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339, at para. 43; London (City) v. Ayerswood Development Corp. (2002), 167 O.A.C. 120 (C.A.), at para. 10.
[8] Second, with respect to the Arbitrator’s interpretation of the applicable provisions of the collective agreement and his decision dismissing the grievances, the standard of review is reasonableness: Dunsmuir v. New Brunswick, 2008 SCC 9, 1 S.C.R. 190, at para. 68.
Relevant Provisions of the Collective Agreement
[9] Article 86 sets out the general rule in the collective agreement with respect to meals:
86 Meal Expenses
Normally, employees are required to provide their own meals. Where there is a requirement for a meal as the result of legitimate business functions, employees will be entitled to be reimbursed for reasonable out-of-pocket expenses.
[10] Article 55 contains more detailed and specific provisions;
55 Compensation When Assigned to Temporary Work Headquarters
55.1 Intent
d) Employees will be reimbursed for all reasonable out-of-pocket expenses associated with being assigned to the Temporary Work Headquarters
e) Employees will be reimbursed for any additional travel costs beyond their normal travel costs to their Regular Work Headquarters
55.2 Definitions
“Regular work headquarters”: The location to which the employee normally reports in order to receive work assignments or to perform regular duties.
“Temporary work headquarters”: The location to which an employee is directed in order to carry out assigned duties away from Regular Work Headquarters.
55.5 Compensation for Daily Commuting To, and From, Temporary Work Headquarters
a) When an employee and supervisor have mutually agreed that the employee may commute to the TWHQ on a daily basis, the employee shall be compensated for his/her travel time in accordance with the provisions of Article 58.
55.6 Exception
This Article does not apply to employees who on a daily or short-term basis may be required to work at a number of different work headquarters. In these cases, local management will determine the appropriate compensation treatment, but such compensation will not be less than that applicable to other employees under this article.
[11] The following provisions of OPG’s Business and Travel Expenses Policy were also relevant to the arbitration and the Arbitrator’s decision:
Section 1.2
… The Procedure, as documented, forms the basis of Management direction to all Employees, unless specific direction is documented in the collective agreement(s). Where specific direction as to reimbursement of business expenses is provided in the collective agreement(s), those directions take precedence… Where the collective agreement(s) are silent, this procedure will take precedence.
Section 1.9.6 Meals
Reasonable and appropriate actual meal expenses will be reimbursed, subject to approval by the claimant’s Manager, if the expenditure is incurred while the claimant is required to work during or through normal meal periods or when, during a normal meal period, the claimant is away from his or her regular work headquarters area on OPG business, and/or where provided in the respective collective agreement(s)…
The Arbitrator’s Decision
[12] The Arbitrator dismissed both grievances. He found that the OPG was not obligated under the collective agreement to compensate employees for meal expenses when they are required to work away from their normal work headquarters and must commute daily, either because they have been assigned to a different location as a Temporary Work Headquarters or because they have been assigned to work away from their Regular Work Headquarters at a different location, unless they are required to engage in a legitimate business function during their meal periods.
[13] In so finding, he first looked to Article 55 to see if it contained any exceptions to the general rule set out in Article 86 that typically employees are not reimbursed for the costs of their meals. He held that because Article 55.1(d) did not explicitly mention “meal expenses,” its general provision that “employees [who do not reside at a Temporary Work Headquarters] shall be reimbursed for all reasonable out-of-pocket expenses associated with being assigned to the Temporary Work Headquarters” does not include meals.
Procedural Fairness
[14] The applicant’s central argument in relation to procedural fairness is that, in adopting an interpretation of collective agreement that was not advanced by either party, the Arbitrator violated the applicant’s right to procedural fairness.
[15] First, the parties had agreed that Article 55 provides a meal benefit to employees who reside at a temporary work headquarters. The applicant argues that the Arbitrator ignored this agreement.
[16] Second, the parties had agreed that Article 86 provides a meal benefit to an employee who is required to travel to a different work headquarters in certain circumstances, but disagreed about when those circumstances arose. The Society had submitted that these circumstances arose whenever OPG requires an employee to be away from regular work headquarters on OPG business during a normal meal period. OPG argued that Article 86 would not apply if an employee is “assigned” to a temporary work headquarters and is commuting daily. The Arbitrator interpreted Article 86 to conclude that employees who commute daily to temporary work headquarters are not entitled under any circumstance to a meal benefit under the collective agreement. This position was not advanced by either party.
[17] I do not agree that there was any breach of the rules of natural justice and procedural fairness in this case. This grievance arose from a dispute about the interpretation to be accorded to the collective agreement. The issue before the Arbitrator was whether the employer was required to reimburse employees for meals purchased while employees were required to commute daily to and from a location at which they work for short periods. In the case of the individual grievor Baum, the additional commute amounted to 6 km per day.
[18] Both parties were given full and fair opportunity to call evidence, to outline their interpretation of the applicable collective agreement provisions and to make submissions. The interpretation reached by the Arbitrator was well within the range of possibilities open to him in light of the provisions of the collective agreement, the applicable OPG policy, the evidence he heard and the submissions of the parties. A labour arbitrator is not bound to choose between the interpretations advanced by the parties: see Ontario Public Service Employees Union v. Ontario (Liquor Control Board) [2008] O.J. No. 1163 (Div. Ct.) (“OPSEU”).This is not a situation in which the Arbitrator came up with a theory of his own invention, or pulled a principle from case law that had not been mentioned by the parties or pleaded: see Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3d) 74 (C.A.); Labatt Brewing Co. v. NHL Enterprises Canada, 2011 ONCA 511, 106 O.R. (3d) 677. Rather, as in OPSEU, he found that neither party’s position was entirely correct. His conclusion was based on the provisions and submissions made before him and neither party can claim to be taken by surprise in any meaningful way. The applicant submits at para. 51 of its factum that
The Arbitrator’s conclusion that employees who commute daily to a temporary work headquarters are not entitled – under any circumstances – to a meal benefit under the collective agreement, was directly contradicted by OPG’s position that in certain circumstances a meal benefit may arise and that it would depend on the facts of each case. Rather than dismissing the policy grievance on this basis (as requested by OPG), the Arbitrator instead eliminated any possibility of a meal benefit for employees who are required to travel to a temporary work headquarters, regardless of the distances. This was fundamentally unfair.
[19] There are a number of difficulties with this submission. First, and most importantly, the arbitrator was careful to frame his reasons in terms of the particular policy and individual grievances before him. This is reflected in his conclusion at para. 21 of the decision:
In the result, employees who commute daily to and from the location they are working at for a short period, either on the basis that they have been assigned the location as a TWHQ or because they are assigned to work away from their RWHQ at the location in question, are not entitled to be reimbursed from meal expenses, unless they are required to engage in a legitimate business function during their meal periods.
[20] This does not “eliminate any possibility of a meal benefit for employees who are required to travel to a temporary work headquarters, regardless of the distance,” because it expressl y addresses employees who commute and not those who reside at the temporary headquarters. It is also subject to the exception applicable when employees are required to engage in “legitimate business functions” during meal periods, such as a working lunch meeting.
[21] Second, OPG’s submission that entitlement to meal benefits would depend on the facts of each case was not inconsistent with the Arbitrator’s decision in that the facts of particular cases would determine, for example, whether certain circumstances constituted “a legitimate business function.”
[22] In the course of oral argument, counsel was asked what the Society would have submitted had it known how the Arbitrator would interpret the provisions and that the Arbitrator did not intend to rely on the parties’ agreement that Article 55 provides a meal benefit to employees who reside at a temporary work headquarters.. Counsel for the Society responded that the Society would have led evidence showing that OPG has had a past practice of reimbursing for meal expenses. The record does include some evidence as to past practice, including the fact that the practice with respect to reimbursement for meals for commuting employees such as Ms. Baum had not been consistent. It was entirely open to the applicant to lead more evidence of past practice. It chose not to do so.
[23] The key point is that the parties disagreed as to the interpretation of the collective agreement provisions governing meal expenses for commuting employees. There is a risk inherent in the exercise of two parties to a contract inviting a third party to interpret it. The result may be an interpretation with which neither side is happy. As the OPSEU case pointed out, an arbitrator is not tied to the precise positions advanced by the parties. These experienced and sophisticated parties adduced the evidence they considered relevant and made the submissions they considered appropriate in support of the interpretation of the relevant provisions of the collective agreement governing reimbursement for meal expenses for commuting employees. There was no surprise in the Arbitrator’s reasons that could constitute a breach of procedural fairness.
Reasonableness
[24] The applicant submits that there are a number of “fundamental flaws” in the Arbitrator’s reasons that render it unreasonable. The first and most central is the Arbitrator’s interpretation of Article 86, which is set out above.
[25] According to the Society, the Arbitrator unreasonably ignored the last sentence of Article 86, that is, the line that reads:
Where there is a requirement for a meal as the result of legitimate business functions, employees will be entitled to be reimbursed for reasonable out-of-pocket expenses.
[26] I disagree. First, the Arbitrator did not ignore the last sentence. Rather, he interpreted it differently from the manner advanced by the applicant. In other words, he did not accept the Society’s submission that travel is necessarily a legitimate business function for the purposes of determining the entitlement to reimbursement for meal expenses. This was a reasonable interpretation. Moreover, this interpretation is not inconsistent with the parties’ agreement that Article 86 is a standalone provision. The Arbitrator agreed with OPG’s interpretation of Article 86, that is, that employees are entitled to reimbursement for meals when they are required to work through lunch, whether they are at their regular work headquarters or elsewhere.
[27] Second, in complaining that the Arbitrator “rewrote” the provision, the applicant is essentially reiterating its disagreement with the interpretation of the provision. The parties disagreed as to the interpretation of the last sentence. In deciding that issue, it was entirely reasonable for the Arbitrator to express the provision in language that, in his view, clearly expressed the meaning that he attributed to the words of the provision. That does not constitute rewriting the collective agreement. Rather, such “translation” or description is inherent in the exercise of the interpreting a disputed provision.
[28] The application is dismissed. Costs are payable by the applicant to the respondent OPG in the amount of $7500 inclusive of disbursements and HST.
Sachs J.
Harvison Young J.
D. Brown J.
Released: January 9, 2015
CITATION: The Society of Energy v. Ontario Power Generation, 2015 ONSC 167
DIVISIONAL COURT FILE NO.: DC-577/12
DATE: 20150109
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Sachs, Harvison Young, D.M. Brown J.J.
BETWEEN:
The Society of Energy Professionals Applicant
– and –
Ontario Power Generation Inc. Respondent
REASONS FOR JUDGMENT
Harvison Young J
Released: January 9 , 2015