City of Guelph v. Guelph Professional Fire Fighters Association, 2018 CanLII 87 (ON SCDC)

DIVISIONAL COURT FILE NO.: 17-171-00 DATE: 20180105

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

SACHS, SPIES and FITZPATRICK JJ.

BETWEEN:

The Corporation of the City of Guelph Applicant

– and –

The Guelph Professional Fire Fighters Association Local 467, International Association of Fire Fighters Respondent

Counsel: Frank Cesario and Anna Karimian, Counsel for the Applicant Sean McManus, Counsel for the Respondent

HEARD at Toronto: September 21, 2017

D. FITZPATRICK J.

1The Applicant is the municipal employer of 166 full-time fire fighters who form the Respondent bargaining unit.

2The Applicant and the Respondent have a collective agreement. The parties engaged in bargaining when the collective agreement came up for renewal. The parties were unable to negotiate an agreement on wages and other issues covering the years 2015 to 2017. As a result, the wages issue for that period, among others, was the subject of an interest arbitration before a three-member panel, chaired by James Hayes, (collectively the “panel”).

3The panel released its decision dated February 21, 2017 (the “Award”). The Award was written by Chair Hayes.

4The Applicant seeks an order quashing the wages portion of the Award and requests that the issue be remitted to a differently constituted panel.

The Award

5The Applicant argued before the panel that the fire fighters should receive wage increases similar to those of other Guelph municipal employee groups or, alternatively, that the wage rate for the Guelph police should guide the determination of the upper limit of Guelph’s fire fighters’ wages.

6The Respondent’s position at the initial hearing was that Guelph’s fire fighters’ wage rates should match those of similar municipal fire departments. Alternatively, the Respondent posited that the wages be determined by relying primarily on fire fighter wage settlements in other jurisdictions, with some weight given to Guelph police wage settlements.

7Both parties agreed that there was a historical practice of linking fire fighters’ wages to police wages in Guelph. In other words, the parties agreed that the wage rates for the City of Guelph police department were an appropriate comparator for the panel to consider when determining Guelph’s fire fighters’ pay rate.

8Both parties also agreed that the freely-bargained collective agreement reached by the Kitchener fire fighters was an appropriate comparator for the panel to consider. It is worth noting that the agreed-upon wages of the Kitchener fire fighters surpassed the Guelph police wage rates.

9The Award described the conflict between the historic police wage linkage in Guelph and recent, freely bargained fire fighters’ wages as a “dilemma.” The Award focused on answering the following question: whether Guelph’s historical practice should override, to the point of exclusion, comparator fire fighter settlements freely bargained elsewhere without recourse to interest arbitration (see: Award paragraphs 5 and 6).

10The Award noted both that evidence concerning fire fighter comparators “will always be highly relevant” and that police wages also serve as persuasive comparators to determine Guelph’s fire fighters’ wages (see: Award paragraph 23). In other words, both comparators were considered in arriving at the Award.

11The Award rejected the Applicant’s argument that fire fighter wages should generally be similar to those of other municipal workers. The Award also rejected the Applicant’s alternative argument that fire fighter wages should match police wages, reasoning that if the panel were to embrace that position then “collective bargaining in the fire sector would be effectively eliminated” (see: Award paragraphs 24 and 29-31).

12The Award also rejected the Respondent’s position that Guelph’s fire fighters’ wage rates should match the Kitchener’s fire fighters’ freely bargained wage settlement for 2015-2017 (see: Award paragraph 47).

13The Award blended the wages of the two comparators, namely the Guelph police and the Kitchener fire fighters. In doing so, the Award referenced arbitral and judicial case law submitted by the parties, along with a small number of other cases not disclosed to the parties prior to the Award and upon which the parties did not make submissions.

The Positions of the Parties

14The Applicant before this court argues that the basic principles of procedural fairness were breached where the Award adopted a blended wages approach that was not advanced by either party with reliance partially upon jurisprudence that was not filed by either party. Related to this, the Applicant submits that this blended or averaging approach using only two comparators is novel and unanticipated such that it amplifies the need for an opportunity for the parties to make submissions specific to that approach. The Applicant submits procedural fairness required that the parties be granted the opportunity to make submissions with respect to the blended approach and any new case law in these circumstances.

15The Applicant also argues that the wages payable to the Guelph fire fighters as determined in the Award was unreasonable.

16The Respondent in this hearing submits that the panel had no obligation to give the parties an opportunity to make submissions where the Award adopted a position other than one suggested by a party. The Respondent argues that the principles of procedural fairness are not otherwise breached where a decision-maker considers additional jurisprudence not submitted by the parties where the jurisprudence raised no new principles of law.

17The Respondent submits that the wages portion of the Award is reasonable.

Analysis

i. Procedural Fairness

18The Applicant’s argument that it was denied procedural fairness is rejected for the reasons that follow.

19The parties each suggest a different framework for the standard of review on this issue. The Applicant submits that a correctness standard applies whereas the Respondent argues there is no standard. Regardless of the review label or lack thereof, the parties agree that this court must determine, without deference, whether this arbitration was conducted in accordance with the principles of procedural fairness.

20The starting point is to consider the statutory framework. The Fire Protection and Prevention Act, 1997, S.O. 1997, c. 4 (the “FPPA”) guides interest arbitration in the fire sector. Section 50.5(2) of the FPPA provides that the panel “shall take into consideration all factors the board considers relevant”, including five enumerated criteria. One of the listed criteria is the comparison between the fire fighters and “other comparable employees in the public and private sectors.”

21Section 50.5(2) of the FPPA obligates the panel to consider the enumerated criteria applicable to the case before it along with all other relevant factors. These criteria direct but do not displace the discretion vested in the panel to determine an award.

22The parties acknowledge that interest arbitration in the context of collective bargaining is premised on replication theory. Parties participate in interest arbitration given that limits have been placed on their ability to bargain freely. The objective of interest arbitration is to replicate the outcome that the parties likely would have achieved had they been able to engage in a free collective bargaining negotiations process where the possibility of strike, lockout, and other available sanctions are in play. Consideration of wage rates for comparable groups achieved through free market bargaining as well as through arbitration awards have been a long recognized method to achieve a replicated award (see: Re York Regional Board of Health and Ontario Nurses’ Association (1978), 1978 3478 (ON LA), 18 L.A.C. (2d) 255 (Ont. Arb.) at 269).

23Both parties accept that the two comparators relied on in the Award were appropriate and relevant.

24The panel was not required to adopt the argument of either party. This was an interest arbitration, not a final offer hearing where the arbitrator is obliged to accept the position of one of the parties. Similarly, there is nothing in the legislation obligating the panel to accept the position(s) advanced by one of the parties before it.

25The panel was obligated to consider other comparable employees pursuant to section 50.5(2) of the FPPA. There is no doubt the panel did so.

26The Award acknowledged and adopted the historic practice of arbitrators relying on wages for local police and fire fighters in similar communities as the most relevant comparator to determine fire fighter pay (see: para. 13 of the Award, referencing the decision in City of Windsor, September 17, 1982).

27The Award also cited decisions deviating from this historic practice. As such, it is not novel for an arbitrator to deviate from the practice of achieving parity between local police and fire fighter wages. Arbitrators have awarded fire fighters wages higher and lower than those of the local police (see: City of Windsor, September 17, 1982; City of Thunder Bay, November 23, 1993 and Re Kingston (City) and Kingston Professional Fire Fighters Assn., Local 498 (Renewal Collective Agreement) (2011), 108 C.L.A.S. 296 (Ont. Arb.)). The Applicant does not argue against this more general point. The Applicant submits that the Award is novel because it adopted a blended approach not argued by either party using only two comparators.

28The positions suggested by the two parties formed the basis for the blended approach ultimately adopted in the Award – namely, that the Guelph police and Kitchener fire fighters were the two appropriate comparators to average or blend. Again, the Applicant suggested the Guelph police wage as the highest amount that could be given. The Respondent offered the freely bargained wages for the Kitchener fire fighters as the most relevant point of reference. In other words, the parties’ positions established a range between two comparators for the panel to consider.

29There is nothing novel about an arbitration award that falls within the range between the two points representing each party’s respective position. Judges in criminal and other matters are typically provided with the competing positions of the parties and left to make the appropriate determination within or sometimes outside of the outcomes suggested by the parties.

30Finally, the Applicant in the course of its argument before this Court notes that the Award cites and relies on five cases where arbitrators had adopted the blended model. Contrary to the Applicant’s position, the mere existence of five cases that adopt the blended approach strongly suggests that said approach is not novel.

31The Applicant’s argument respecting the novel nature of the Award might have more heft had the determination been for amounts outside of the range suggested by the parties but that did not occur here. However, even that scenario is not without precedent (see: City of Windsor, September 17, 1982, City of Thunder Bay, November 23, 1993 and City of Kingston, November 23, 2011).

32The Applicant’s primary position would have the panel determine fire fighter wages relying on a presumably large, heterogeneous unit including bargaining units other than police and fire fighters whereas the Award only relied on police and fire fighter comparators. An Award that provides fire fighters with the same general increases as other, varied employee groups of the municipality would represent a much more radical deviation than the fire fighter and police paradigm ultimately adopted in the Award. This view was reflected by Arbitrator Burkett in Re Toronto (City) and IAFF, Local 3888 (Renewal Collective Agreement) (2013), 116 C.L.A.S. 117 (Ont. Arb.).

33For all of these reasons, I do not consider the averaging/blended approach adopted in the Award to be novel.

34The Applicant’s argument that it was denied procedural fairness must also fail. The Applicant not only had the opportunity to but did in fact make submissions to the panel respecting the similar blended approach adopted in City of Mississauga, October 30, 2014. The Award specifically referenced the Applicant’s argument that the “blended approach adopted by Arbitrator Swan in City of Mississauga” was irrelevant because the parties in that case agreed to use that approach as opposed to the arbitrator unilaterally doing so (see: Award paragraph 31).

35The point germane to this appeal is that the Applicant was aware of the blended approach being used in a prior case(s) and made submissions against its applicability in this arbitration.

36On this appeal, the Respondent filed an affidavit sworn by its advocate, Mr. Watson. This affidavit was sworn on August 24, 2017 and sets out the Respondent’s alternate position at the arbitration – namely, that the Guelph fire fighter wages should be determined by relying primarily on fire fighter wages in comparable communities with some weight given to Guelph police. The Respondent’s alternate position itself suggests a blended approach between fire fighter wages in comparable communities and those for the Guelph police. The obvious point is that the Respondent suggested a blended approach to the panel and this would have been known to the Applicant at the arbitration.

37Consequently, there can be no meaningful argument that the Applicant was surprised that the Award considered and adopted a blended approach. Further, it cannot be said that the Applicant was deprived of an opportunity to make submissions to the Respondent’s position.

38There is also no merit to the Applicant’s argument that procedural fairness was breached where the panel relied on jurisprudence not filed by either party. These additional cases did not raise any new point of law or principle outside of what was addressed by the parties in their materials and submissions during the hearing.

39The additional cases referenced in the Award simply added to the jurisprudence on the issues already before the panel, including whether to implement a blended wages model. It is not unusual or inappropriate for a decision maker to research and rely upon case law not submitted by a party addressing the extant issues. This happens regularly. There is no obligation to provide the parties with an opportunity to make submissions on case law sourced and relied upon by the panel where nothing new is raised. Proceedings would become unnecessarily cumbersome if it were otherwise.

40In conclusion, the panel did not breach the principles of natural justice or fairness. Both sides were aware of each other’s positions at the arbitration, including the Respondent’s alternate position that a blended approach between fire fighter wages and that of Guelph police should be embraced by the panel. Both parties had the opportunity to make full submissions. As noted above, the Applicant did in fact make submissions on the blended approach that the Award ultimately adopted.

ii. Reasonableness of Award

41Both parties agree that the standard of review on this issue is reasonableness.

42The analysis of the reasonableness of the Award overlaps significantly with the analysis of the procedural fairness issue.

43As noted above, the blended approach adopted by the panel does not present a novel outcome. The Award cited decisions following and deviating from the historic local police to fire fighter linkage. The Award referenced decisions providing for fire fighter wages that were both higher and lower than those of the local police.

44Both parties accept that the Guelph police’s wages and those of the Kitchener fire fighters were appropriate comparators for the panel to consider. The panel relied on both of these comparators in the Award, thereby satisfying its obligations under FPPA section 50.5(2).

45The parties crafted a range of reasonable outcomes by providing the panel with their respective positions. The parties simply disagreed about which end of the range between the Kitchener fire fighters’ and Guelph police’s wages the decision should gravitate toward. The Award falls within the range of reasonable outcomes suggested by the parties. Given that these comparators were either freely negotiated or historically relied on in setting wages, the Award represents a compromise that replicates the outcome the parties likely would have achieved through free market negotiations, namely a wage determined by free negotiation but tempered by historically persuasive wage comparators.

46Given all of the above, it cannot be said that the Award represents an unreasonable outcome.

Conclusion

47For these reasons I find that the application should be dismissed. As the successful party the Respondent is entitled to its costs of the application, which the parties agreed should be fixed in the amount of $6000.00, all inclusive.

___________________________ FITZPATRICK J.

I agree