CITATION: Canadian Staff Union v. Canadian Union of Public Employees, 2016 ONSC 7292

DIVISIONAL COURT FILE NO.: 015/16 DATE: 20161123

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

DAMBROT, NORDHEIMER and KING JJ.

BETWEEN:

CANADIAN STAFFF UNION

Applicant

– and –

CANADIAN UNION OF PUBLIC EMPLOYEES and MAUREEN SALTMAN, ARBITRATOR

Respondents

Raj Anand and S. Priya Morley, for the Applicant

Ronald A. Pink, Q.C., for the Respondent, Canadian Union of Public Employees

HEARD at Toronto: November 23, 2016

KING J. (orally)

1The Canadian Staff Union (“Union”) is the bargaining agent for employees of the Canadian Union of Public Employees (“CUPE” or “Employer”). The Union is applying for judicial review of a labour arbitrator’s decision (dated October 15, 2015), which found that the Employer did not violate the collective agreement when it made a pro-rata reduction in the number of vacation days and vacation bonus payment of employee Mervis White (“Grievor”) for the vacation year 2010. The Union brought the grievance on behalf of the Grievor.

2The Applicant asks this Court to set aside the award and grant the grievance or, alternatively, remit the matter to a different arbitrator. The Applicant initially sought costs and any further relief this Court deems just.

Background

Background

3The Grievor was employed by CUPE as a Worker’s Compensation Services Representative. Between April 1, 2009, and May 31, 2009, the Grievor went on an approved leave of absence, without pay, for reasons related to her Canada Pension Plan entitlements. The leave was taken under Article 15.05 (general leave provision) of the applicable collective agreement. The Grievor personally paid for her benefits and purchased back her pension service for the period of time she was on this unpaid leave.

4Article 14.01 of the collective agreement prescribes yearly vacation entitlements and vacation bonus entitlements commensurate with “years of service.” The Grievor’s anniversary date for determining seniority was January 20, 1997. There is no dispute that but for the leave of absence the Grievor would have been entitled to 6 weeks of vacation and a $1,200 vacation bonus in 2010 pursuant to Article 14.01.

5In February 2010, the Employer gave the Grievor a Vacation Leave Statement which indicated the proration of her entitlements and included the following statement: “Your entitlement may be adjusted if there were any periods of leave of absence that could affect your accrual.” In subsequent correspondence, the Employer’s position was that when an employee is on unpaid leave no vacation benefits accrue. Moreover, while the Employer took the position that while vacation entitlement is based on “service” an employee must be actively at work to accrue same.

6Accordingly, the Grievor’s available vacation time and bonus were reduced by one-sixth due to her two-month leave of absence to 25 vacation days and a $1000 vacation bonus.

7The grievance process did not resolve the dispute, and the Union referred it to arbitration.

The Decision under Review

The Decision under Review

8The Arbitrator accepted that case law favoured the Union and, significantly, that absent “clear expression to the contrary,” the accrual of vacation entitlements stemming from employee service was not paused during authorized leaves of absence.

9However, based on an interpretation of the various leave of absence provisions in Article 15 of the collective agreement, the Arbitrator determined that the period of leave was not to be counted in determining vacation entitlements. After an analysis of Article 15, the Arbitrator found that “a pattern of sorts emerges”, such that long, unpaid leaves generally did not accrue vacation benefits. The Arbitrator concluded that since general leaves did not accrue vacation benefits, there was no violation of the collective agreement.

10The grievance was dismissed notwithstanding that the Arbitrator did not agree with the position advanced by the Employer that employees had to accrue “active service” to qualify for vacation entitlements.

Issues

Issues

11The issues on this application are:

1. Is the arbitration decision unreasonable?

2. Was the Arbitrator’s delay in releasing the decision a violation of natural justice and one which resulted in an unreasonable decision?

Standard of Review

Standard of Review

12The parties agree that labour arbitrator decisions are subject to a standard of review of reasonableness. Both parties relied on Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd., 2013 SCC 34, [2013] 2 S.C.R. 458, at para. 7, where among other cases, the Supreme Court stated, “It cannot be seriously challenged, particularly since Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, that the applicable standard for reviewing the decision of a labour arbitrator is reasonableness.”

Is the arbitration decision unreasonable?

Is the arbitration decision unreasonable?

13Vacation entitlements are provided to employees pursuant to various schemes in collective agreements. In some instances, vacation days and pay beyond that prescribed by statute law must be earned based on hours worked, or compensated hours. Some collective agreements such as the one before this Court base entitlement on “service”. Article 14 establishes a system of entitlement based only on length of service.

14There is a presumption in the case law such that employees who are on leave continue to accrue vacation entitlements, absent wording to the contrary. At para. 8:3220 of Canadian Labour Arbitration, 4th ed. (Aurora. Ont.; Canada Law Book, Inc.) sets out the general proposition as follows:

In most agreements, the parties include specific provisions to deal with the issue of which periods that an employee remains off work can be counted in computing his or her vacation entitlement. It is very common, for example, for the amount of vacation pay or duration of vacation to be calculated on the period of time a person has been “continuously employed” or “in service.” In the absence of some clear expression of intention to the contrary, most arbitrators have interpreted such words to mean that employees who were off work on a…leave of absence…were entitled to count such periods when they were not actively working in calculating their vacation entitlement. [Emphasis added.]

15This is confirmed in the Arbitrator’s own words on page 10 of the decision:

I accept that the preponderance of the jurisprudence favours the Union; namely, that, absent clear expression to the contrary, vacation entitlement based on “service” (or some iteration thereof) is not broken by an authorized leave of absence. Put another way, employees are usually entitled to count leaves of absence in calculating vacation entitlement; see by way of example, Re Air Canada and Canadian Airline Employees’ Association 1976 2124 (ON LA), [1976] O.L.A.A. No 111, 13 L.A.C. (2d) 225 (H. D. Brown).

16The Arbitrator then effectively ignores this presumption by finding for the employer in the clear absence of language in the collective agreement expressly discontinuing the accrual of service during a leave of absence. The Arbitrator went on to consider other provisions in the collective agreement and the other portions of Article 15 that dealt with other types of leaves. Some of these articles referenced accrual of benefits and vacation entitlement in different leave situations.

17In the end, and presumably because no such express language was contained in Article 15.05, the Arbitrator concluded that “it would seem” that vacation entitlement did not accrue during a general leave of absence. The Arbitrator concluded that this was the “implication” that flowed from her analysis.

18There was no reasonable basis for the Arbitrator to conclude that the parties expressed a clear intention to the contrary in the collective agreement. Something that is unstated cannot be a “clear expression”. The language of the agreement as a whole does not reasonably support such an interpretation. The very words of the Article clearly and unequivocally indicate that the only thing that an employee forfeits while on a leave of absence is pay. There is no clear reference anywhere in the collective agreement to a “break in service”. Given the clear intention of the parties to exclude pay for a leave under Article 15.05, I find that had the parties intended to also break or suspend the accumulation of service they could have specifically provided for that outcome. They did not.

19The Arbitrator’s flawed analysis has the effect of answering a different question. Instead of assessing whether the collective agreement provision expressly excludes vacation entitlement, the analysis shifts to assessing whether the parties expressly intended that there be a vacation entitlement. It is directly at odds with the very presumption that the arbitrator acknowledged applied to this type of situation. In the circumstances that leads to an unreasonable interpretation of the collective agreement. It is not a conclusion that falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law: Dunsmuir v New Brunswick, 2008 SCC 9, [2008] 1 S. C. R. 190 at para. 47.

Was the Arbitrator’s delay in releasing the decision a violation of natural justice and one which resulted in an unreasonable decision?

Was the Arbitrator’s delay in releasing the decision a violation of natural justice and one which resulted in an unreasonable decision?

20Given my conclusion that the Arbitration decision is unreasonable it is not necessary for me to embark on an assessment of whether the delay in issuing this decision constitutes a denial of natural justice.

CONCLUSION

Conclusion

21The application for judicial review is allowed and the award of the Arbitrator is set aside. The matter is remitted to a new arbitrator to hear and determine the applicant’s grievance.

COSTS – DaMBROT J.

Costs

22I have endorsed the Application Record as follows: “This Application is allowed for oral reasons delivered today. On agreement, no costs.”

___________________________ KING J.

I agree