GSB# 1495/00, 1569/00, 1609/00, 1614/00, 0376/01
Union # 01U008, 01U017, 01U013, 01U014, 01F446,
01F447, 01F0448, 01F449, 01F450, 01F451
IN THE MATTER OF AN ARBITRATION
Under
THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT
Before
THE GRIEVANCE SETTLEMENT BOARD
BETWEEN
Ontario Public Service Employees Union
(Union Grievance)
Grievor
- and -
The Crown in Right of Ontario
(Ministry of Health and Long-Term Care)
Employer
BEFORE Richard M. Brown Vice-Chairperson
FOR THE GRIEVOR David Wright
Counsel
Ryder Wright Blair & Doyle
FOR THE EMPLOYER John Smith
Senior Counsel, Legal Services Branch
Management Board Secretariat
FOR THE HOSPITALS Roy Filion Counsel
Filion Wakely Thorup Angeletti LLP
HEARING December 3, 2001.
DECISION
These grievances concerning pensions arise out of the recent transfer of psychiatric facilities, complete with employees, from the provincial government to four hospitals in the broader public sector. This interim decision deals exclusively with the standing of third parties to participate in the hearing.
I
Psychiatric facilities formerly operated by the Ministry of Health in London/St Thomas, Hamilton, Kingston and Brockville have been transferred to St. Joseph’s Health Centre in London, St. Joseph’s Health Care Hamilton, Providence Continuing Care Centre in Kingston and Royal Ottawa Health Care Group respectively. When the psychiatric institutions were operated by the Ministry, employees there were represented by OPSEU and were members of the OPSEU Pension Trust (OPT). Since becoming employees of the receiving hospitals, these people have been covered by the Hospitals of Ontario Pension Plan (HOOPP).
OPSEU contends the Crown, when negotiating transfer agreements with the receiving hospitals, violated the collective agreement by not making sufficient efforts to persuade the receiving hospitals to leave transferred employees in OPT, pending a determination as to which bargaining agent would represent them and, for those who continued to be represented by OPSEU, until the union had an opportunity to negotiate with the receiving hospitals.
In particular, OPSEU alleges Appendix 9 and Appendix 18 required the province to use “reasonable efforts”, including financial incentives, to persuade the receiving hospitals to keep former crown employees in OPT. OPSEU also contends the province was required to use “best efforts” to the same end by Appendix 11 which incorporates article 3.3(6) of OPT. The employer denies the existence of such obligations and, in the alternative, contends any such obligation was fulfilled.
The remedies sought by OPSEU, as clarified in a letter from counsel dated December 7, 2001, are:
A declaration that the collective agreement was violated in the manner alleged.
An order directing the crown to use “best efforts” and/or “reasonable efforts”, including financial incentives as contemplated by article 6.2.1 of Appendix 18, to persuade the receiving hospitals to allow former crown employees still represented by OPSEU to participate in OPT until OPSEU has a chance to negotiate with the hospitals about pensions.
Compensation for any losses incurred by former crown employees who continue to be represented by OPSEU. Counsel suggested a ruling on compensation should be postponed because there may be no losses if the order sought is issued and the crown’s efforts at persuasion are successful.
The declaration proposed relates to all former crown employees who have been transferred to the receiving hospitals. The order and compensation sought is limited to only those transferred employees who are represented by OPSEU at the receiving hospitals. This subset is comprised of all former crown employees at both St. Joseph’s Health Centre in London and Providence Continuing Care Centre in Kingston, paramedical staff transferred to St. Joseph’s Health Care Hamilton, and both paramedical and service/clerical staff transferred to Royal Ottawa Health Care Group.
OPSEU’s request for an order directing the crown to negotiate with receiving hospitals about pensions has prompted applications for third-party standing from six hospitals falling into two categories. The first is comprised of the four hospitals listed above, to which psychiatric facilities have already been transferred, and to which the province would be directed to make proposals about pensions if the order sought is issued. The second category of hospitals is comprised of two which are slated to receive psychiatric facilities in the coming year, but which have not yet negotiated a transfer agreement with the province. They are St. Joseph’s Care Group Thunder Bay and Northeast Mental Health Centre in North Bay. The Canadian Union of Public Employees also applied for standing but later withdrew its application. All of the outstanding applications for standing are supported by the province but opposed by OPSEU.
II
The six hospitals want all transferred employees to participate in HOOPP for the obvious reason that it is the pension plan for the rest of their workforce.
In relation to the four institutions which have already received psychiatric facilities, counsel for the hospitals submitted OPSEU is attempting to “unscramble the egg” by reopening the transfer agreements between the crown and his clients. These agreements specify in detail the terms and conditions of employment for employees transferring to the hospitals. The manner in which pensions are addressed is illustrated by article 14.01 of the transfer agreement between the crown and St. Joseph’s Health Centre in London:
Subject to decision by the Hospital to become a participating Employer in the OPSEU Pension Trust Plan, the Crown is willing to provide for the continued Membership [in] the OPSEU Pension Trust of former Public Servants who were employed by the PHs [psychiatric hospitals] immediately prior to the Changeover Date and whose exit from the Plan Membership and from the Ontario Public Service occurred as a result of the transfer of the PHs to the Hospital. The Hospital must notify the Crown of the election prior to the effective date of a new Collective Agreement covering former Public Servant employees of the PHs. This Article applies only if OPSEU becomes the Bargaining Agent for the former Public Servant employees of the PHs following the Changeover Date. This Article does not apply when a former Public Servant’s position is subsequently transferred to another employer that is not the Crown.
This provision allows the hospital to decide whether to leave transferred employees in OPT or to enrol them in HOOPP.
If OPSEU succeeds in this case, counsel contended the crown would take the position that future transfers to the remaining two hospitals were conditional upon the participation of the employees concerned in OPT.
As to all six hospitals, counsel suggested experience demonstrates that the crown sometimes presses its “reasonable efforts” obligations to the point of being “unreasonable.” The province is said to have great leverage when dealing with hospitals because it provides their funding. According to this line of argument, the hospitals will not be able to refuse to negotiate with the crown about pensions.
I was referred to five decisions by counsel for the hospitals: Municipality of Metropolitan Toronto and Canadian Union of Public Employees (1989), 1989 CanLII 9416 (ON LA), 5 L.A.C. (4th) 404 (Stanley); Fanshawe College and Ontario Public Service Employees Union (1991), 1991 CanLII 13424 (ON LA), 19 L.A.C. (4th) 162 (Brent); Canadian Union of Public Employees and Canadian Broadcasting Corp. (1990), 1990 CanLII 8078 (ON CA), 70 D.L.R. (4th) 175 (Ont. C.A.) and (1992), 1992 CanLII 8644 (ON CA), 91 D.L.R. (4th) 767 (S.C.C.); Workers’ Compensation Board and Canadian Union of Public Employees, unreported decision dated April 20, 1995, GSB No. 1029/94 (Kaufman); and Canada Post Corp. and Professional Institute of the Public Service, unreported decision dated June 28, 1993. In support of the applications for standing, counsel for the province cited one additional decision: Re Bradley and Ottawa Professional Firefighters (1967), 1967 CanLII 160 (ON CA), 63 D.L.R. (2d) 376 (Ont. C.A.) Counsel for OPSEU relies upon four cases: Ministry of Transport and Ontario Public Service Employees Union (1994), 1994 CanLII 18602 (ON GSB), 43 L.A.C. (4th) 1 (Kaplan); Telecommunications Workers Union v. Canadian Radio-Television and Telecommunications Commission (1995), 1995 CanLII 102 (SCC), 125 D.L.R. (4th) 471 (S.C.C.); Avenor Inc. and I.W.A.-Canada (1995), 1995 CanLII 18435 (ON LA), 52 L.A.C. (4th) 72 (Bendel); and Consumers Glass Ltd. and Teamsters, [1997] B.C.C.A.A.A. No. 376 (Chertkow).
III
The right of a third party to be notified of an arbitration hearing, and the right of such a party to participate in one, were first considered by courts and arbitrators in the context of an employee whose terms and conditions of employment are governed by the collective agreement being interpreted and applied.
In Hoogendoorn and Greening Metal Products & Screening Equipment Co. (1967), 1967 CanLII 20 (SCC), 65 D.L.R. (2d) 641 (S.C.C.), the arbitrator directed the employer to dismiss Hoogendoorn if he continued to refuse to pay union dues as required by the collective agreement. When he challenged this ruling on the ground he had not received notice of the hearing, the Supreme Court of Canada ruled in his favour. Chief Justice Cartwright quoted with approval the following passage from the dissenting opinion of Mr. Justice Judson:
To require that notice and the right to be present be given to each employee on any occasion when a collective agreement having general application to all employees was being interpreted would be to destroy the principle of the bargaining agent and vitiate the purposes of the [Labour Relations] Act. (page 642)
Agreeing an employee is not entitled to notice merely because a contractual provision of general application is being interpreted, the Chief Justice emphasized the unusual position in which Hoogendoorn found himself:
The reason that I differ from the result at which [Mr. Justice Judson] arrives is that I am unable to regard the arbitration which was held as anything other than an inquiry as to a single question, that is, whether or not the employer was bound to discharge [Hoogendoorn]. (page 643)
Chief Justice Cartwright noted employees are not entitled to notice of an arbitration merely because it involves the interpretation of a contractual provision applying to the workforce at large, even though such a ruling may benefit some members of the bargaining unit at the expense of others. Hoogendoorn was entitled to notice because his union sought an order having a direct and substantial adverse impact on him alone.
In Bradley, the union challenged six promotions made under a collective agreement requiring such appointments to be based on the seniority and efficiency of candidates. The arbitrator directed that five of the appointments be revoked. The Ontario Court of Appeal quashed the award because the employees displaced by it had not received formal notification that their jobs were in jeopardy. Mr. Justice Laskin wrote:
A collective agreement is a unique legal institution because, despite the generality of its terms as part of a bargain made between a representative union and an employer, its existence and application result in personal benefits to the employees who are covered by it. Once it is accepted, as it must be, that the benefits running to employees may differ according to job classification or seniority ranking (to take two illustrations), and that the representative union is put to a choice between employees who competed for the same preferment as to which it will support against a different choice made by the employer, substantive employment benefits of particular employees are put in issue and they are entitled to protect them if the union will not.
It follows that they are entitled to notice of arbitration proceedings taken to test their right to continued enjoyment of the benefits. The fact that particular provision for notice is not made either in the statute or in the collective agreement is of no moment. ... The common law has been specially sensitive to deprivation of property or contractual advantages in proceedings of an adjudicative character without previous notice thereof to persons likely to be directly affected, unless there is a clear statutory exclusion of such notice. In the present case, there is none. (pages 381 and 382; emphasis added)
The essence of the reasoning in Bradley is found in the italicized passage and warrants close examination: it begins with the premise that a collective agreement is a “unique legal institution”, negotiated by an employer and union, but governing the working conditions of all members of the bargaining unit; it goes on to note a union sometimes is “put to a choice between employees” competing with one another; and it leads to the conclusion that an employee is “entitled to notice of arbitration” when the union directly opposes the individual’s interests. This conclusion and the basis for it both precede any reference to the common law’s protection of “property or contractual advantages”. The common law is drawn upon for the sole purpose of rebutting the argument that there is no entitlement to notice because it is not mandated by legislation. In other words, the institutional tool used to supply a requirement of notice is the common law rather than statute, but the reason for requiring notice in the first place remains the “unique” legal character of a collective agreement and the position of a bargaining-unit employee whose interests are directly jeopardized by a grievance. The important point, sometimes glossed over in subsequent cases, is that Mr. Justice Laskin’s rationale for demanding notice applies only to employees governed by a collective agreement.
The specific issue in Bradley and Hoogendoorn was notification of a hearing, but the rulings in these two cases generally have been applied by arbitrators as conferring upon employees not only an entitlement to be notified of a hearing, but also a right to participate in one, in appropriate circumstances. Insofar as employees are concerned, no distinction has been drawn between notice and participation. This may explain why the distinction has not received sufficient attention in some later cases involving other types of third parties.
The law relating to third-party unions developed against the legal backdrop of Bradley. The leading decision is Canadian Broadcasting Corp. (CBC) where an arbitrator interpreted a collective agreement between CBC and IASTE and ruled staging and lighting work should be performed by employees governed by this agreement. CBC employees represented by CUPE were doing the staging work and employees of the corporation represented by NABET the lighting work. On judicial review, the two third-party unions successfully challenged the arbitrator’s award because they had not received notice of the hearing. Speaking for the Ontario Court of Appeal, Mr. Justice Carthy wrote:
My thinking starts with the practical common-sense compulsion to put all of these parties in one room, before one tribunal, to obtain one ruling on their differences. Upon analysis I find that legal precedent supports that view.
The practical rationale cannot be better put than in the majority decision in Re Toronto (Municipality) and C.U.P.E., Local 43 (1989), 1989 CanLII 9416 (ON LA), 5 L.A.C. (4th) 404. The grievance was by Local 43 of CUPE complaining that work to which they were entitled was being assigned to Local 79 of CUPE. Local 79 wanted status before the arbitration board and Local 43 objected. In their reasons, the majority said pp. 410-1:
Here we have one employer and two unions, each of which is bound to such a system of dispute settlement with the common employer. It is academically correct, but totally impractical to say that in disputes such as the one before us, the board should deny status to the other union. Having said that, it must also be said that it is totally impractical to say that the intervening union, having sought and been given status, is not bound by the award of this board.
That sort of outcome, as well as being impractical, is not fair to Local 43, who initiated these proceedings, and it is not fair to the employer who is bound by our award. If Local 79 is not bound, the employer might have to go the very same process in reverse, under the Local 79 collective agreement, and could possibly, although one would hope not, be subject to a completely contrary award from another board. We are bound by the rules of natural justice to give the principal parties a fair hearing and to extend to affected parties a similar right to be heard.
It is our ruling that Local 79 does have a right to appear before us and to have status as a party. However, it is our view that we can impose, as a condition to that participation, that they accept the jurisdiction of this board over the issue before us and submit to be bound by our decision.
(pages 177 and 178; emphasis added)
After quoting the sentence from Bradley about common law protection of “property or contractual advantages”, Mr. Justice Carthy turned to the facts at hand and ruled:
In my view, it was unfair and constituted a failure of natural justice to deal with the employment opportunities of the CUPE and NABET union members, in the circumstances of this case, in the absence of notice and an opportunity to seek involvement in the decision-making process. (page 181)
The Court of Appeal held the third-party unions were entitled to “notice and an opportunity to seek involvement in the decision-making process”, even though they would not be bound by an arbitration award unless they agreed to abide by it. The court did not say these unions, if they had received notice, would have been entitled to be heard by the board of arbitration. Instead, Mr. Justice Carthy acknowledged a “practical common-sense compulsion” to resolve the disputes between unions by having all of those involved heard by one tribunal whose ruling would bind all of them. This compulsion lead him to commend the decision in Metropolitan Toronto where Arbitrator Stanley granted standing to a third-party union on the condition that it consent to be bound by his award. Mr. Justice Carthy’s endorsement of this approach suggests he was of the opinion that a third-party union would not be entitled to participate in a hearing unless it agreed to abide by the resulting decision. The court’s opinion about participation at the hearing is obiter because the ruling on notice was sufficient to dispose of the matter at hand.
The Supreme Court of Canada sustained the judgement below which held the third-party unions should have been notified of the arbitration. The court went on to say:
What transpires once notice of the arbitration is given will be up to the parties. For example, they may consent to submit to the jurisdiction of the arbitrator so that the jurisdictional disputes of the union can be resolved. Alternatively, they may wish to take steps to attempt to have the matter determined by the Canada Labour Relations Board. Whatever steps may be taken by the parties, the court cannot, simply by its order, bestow upon the arbitrator jurisdiction that does not flow either from a statutory provision or from the consent of the parties.
The important issue resolved by this appeal is that those significantly affected by the arbitration should receive notice of the proceedings. Fairness and natural justice require no less. No other judicial disposition should be made at this stage. (page 768; emphasis added)
The italized passage expressly restricts the ruling to the issue of notice. The court refrained from expressing any opinion about third-party standing to participate in an arbitration hearing. As the court suggested in the first paragraph quoted, a right to notice is valuable, even without an accompanying right to standing, because notice alone gives a third-party union an opportunity to refer a jurisdictional dispute to the labour relations board or to submit to the authority of an arbitrator and then to seek to participate in the arbitration on this footing.
On the subject of third parties being bound by an arbitral award, the Supreme Court said:
In obiter comments the Court of Appeal went on to indicate that the arbitrator hearing the appellant’s grievance would have jurisdiction, despite the absence of consent of all parties concerned, to determine the jurisdictional dispute involving the three unions. The respondents did not seek to uphold that portion of the reasons of the Court of Appeal. They were right to take that position. (page 768; emphasis added)
In my respectful view, this passage rests upon a misunderstanding of the Court of Appeal’s obiter remarks. Mr. Justice Carthy’s comments about the application of an award to third parties are quoted above. As that quotation demonstrates, he acknowledged a compulsion to fashion a process allowing all concerned to appear before one decision-maker empowered to dispose of the entire dispute, but he never said a third party would be bound by an award without its consent. Rather, he endorsed the approach taken in Metropolitan Toronto where the third-party union’s participation at arbitration was made conditional on it abiding by the outcome. The Supreme Court offered no opinion on the propriety of treating standing in this way.
The decisions in Bradley and CBC provided the legal context for recent developments in the law relating to third-party employers in Fanshawe College and Canada Post. These two cases have much in common. Third-party employers appeared before each board of arbitration asking to participate in the hearing, making the issue one of participation rather than notice. In both cases, the grievance was double pronged: one prong sought to terminate the employer’s contractual relations with the third parties; and the other prong claimed persons nominally employed by them were actually employees of the employer signatory to the collective agreement at issue. In each case, the second prong of the grievance led the arbitrator to allow the third-party employers to take part in the hearing.
Arbitrator Brent in Fanshawe College suggested Bradley could be read narrowly or broadly. According to a narrow reading, the Court of Appeal’s decision would apply only to employees “in danger of losing a benefit” under the collective agreement if their union prevailed at arbitration (page 166). Based on a broader reading, apparently derived from Mr. Justice Laskin’s comments about the common law protecting “property or contractual advantages”, the ruling would apply to anyone who “may be directly affected” by an arbitral award (pages 166-167). In choosing between these divergent views of standing, Arbitrator Brent relied upon the Court of Appeal decision in CBC. She took from this judgement the proposition that “standing is not restricted to those with an interest under the collective agreement under which the grievance arose” (page 167). Coming to the same general conclusion about the state of the law, Arbitrator Emrich in Canada Post relied upon the Supreme Court judgement in CBC which was issued after the Fanshawe College award; she also adopted a broad application of Bradley (pages 49 and 50).
By relying upon the CBC case to allow third-party employers to participate in a hearing, the arbitrators in Fanshawe College and Canada Post failed to recognize the important distinction between notice and participation. As the Supreme Court stated in CBC, notice was the only issue in that case requiring “judicial disposition.” The court said nothing about the right of a third-party union to take part in a hearing without agreeing to abide by the award. Speaking for the Court of Appeal, Mr. Justice Carthy endorsed the ruling in Metropolitan Toronto that a third-party union has no right to be heard unless it voluntarily submits to the authority of the arbitrator. In short, neither judgement in CBC provides a foundation for the proposition that a third party is entitled to participate in an arbitration hearing absent consent to be bound by the resulting award.
Whatever the merits of the legal reasoning in Fanshawe College and Canada Post, the arbitrator in each of these cases clearly stated standing would have been denied to the third-parties if the bargaining agent had sought only to terminate their contractual relations with the employer bound by the collective agreement being applied. Standing was granted in these cases exclusively because of the union’s attempt to treat persons nominally employed by the third-parties as employees governed by its collective agreement. In Fanshawe College, Arbitrator Brent wrote:
If the only relief requested were a cease and desist order [relating to contracting out] ... then we would be disposed to agree with the union that the [third-party] hospitals have no standing in this case. While is true that there is a contractual relationship of some sort between the college and the hospitals which may be affected if a cease and desist order were granted, an award of this board could not affect the legal relations between the hospitals and the college. ... The employer cannot rely upon an award of the board of arbitration as a defence to any suit for breach of contract or any action for damages. Further, in the arbitration proceedings the interest of the outside contractor and the employer are identical because both would only want to see the collective agreement interpreted to allow contracting out of the disputed work. ...
In this case though, the union is not simply asking for a cease and desist order. It is asking for relief that would affect the contract of employment which we are told exists between the hospitals and the individuals. Such an order, if granted, could potentially remove someone from the employ of the hospital and place that person under the direction and control of another employer, or perhaps create a situation where one employee is employed by two employers. In any event, it would change existing employment relationships between the individuals and the hospitals. ... The nature of the relief requested therefore gives the hospitals an interest which is different from the college’s and which cannot reasonably be protected in any another forum but this. Therefore we find that, as in C.B.C., supra, fairness and natural justice dictate that the hospitals be recognized as parties to these proceedings. (pages 168 and 169)
This passage was quoted with approval and applied by Arbitrator Emrich in Canada Post (pages 52 and 53).
In saying a contractor is not entitled to standing at arbitration merely because a grievance objects to this third party doing bargaining-unit work, the arbitrators in Fanshawe College and Canada Post fell into step with the approach taken in two cases cited by counsel for OPSEU. In both Avenor and Consumers Glass, standing was denied to a third-party contractor who would lose business if a contracting out grievance was allowed.
In Avenor, one of the reasons given by Arbitrator Bendel for denying standing was that the contractor, Upsala, could pursue a claim against the employer in court, whereas an employee in a case like Hoogendoorn or Bradley would have had “no effective recourse” if barred from arbitration (page 78). The denial of standing was also based on the fact that the contractor was not attempting to defend any legal interest “grounded in labour or employment law” (page 77). Here Arbitrator Bendel relied upon the Supreme Court’s decision in Canadian Radio-Television and Telecommunications Commission (CRTC). In that case, the CRTC granted Shaw Cable Systems the right to install cables on structures owned by B.C. Tel. As bargaining agent for B.C. Tel employees, the TWU complained it had not been notified of the hearing before the CRTC, even though its collective agreement gave union members the right to perform all work on the structures in question. Madame Justice L’Heureux-Dubé wrote:
The CRTC decision concerned questions of telecommunications policy. The CRTC was required to decide on the best way to regulate a monopoly telephone company in order to preserve the public interest. The purpose behind the CRTC decision was totally unrelated to the “work jurisdiction” of the TWU. In fact, such a consideration would have been irrelevant to the CRTC decision. (page 482)
Just as the Supreme Court treated the TWU’s entitlement under its collective agreement as irrelevant to the subject before the CRTC, Arbitrator Bendel treated Upsala’s contract with the employer as having no bearing on the issue to be arbitrated by him.
IV
What lessons emerge from this review of the cases about third-party notice and standing? The most important lesson is that not all categories of third parties are the same. The differences between one type of third party and another should not be ignored.
Employees covered by a collective agreement are third parties in a sense, because the agreement is between the employer and the union, but these employees have a connection to the agreement which other third parties can never have. As emphasized by Mr. Justice Laskin in Bradley, a collective agreement is “a unique legal institution”, negotiated by representatives of labour and management, but establishing terms and conditions for everyone in the bargaining unit. An employee in the unit is precluded by statute from negotiating and enforcing a personal contract which is inconsistent with the collective agreement. Most such agreements govern all of the important aspects of the employment relationship, leaving little room for individual dealings. These features of our statutory regime of collective bargaining underlie the decision in Bradley. The employees at risk of being displaced if their union’s argument was accepted by the arbitrator were entitled to be notified of the hearing because arbitration was the only legal forum where they could defend their interest in the contested jobs.
In stark contrast to employees governed by a collective agreement, other third-parties have the legal capacity to negotiate and enforce contracts designed to protect interests which might be adversely affected by the outcome of an arbitration. As Arbitrator Bendel remarked in Avenor, the third-party there had access to the courts to uphold any contract already negotiated with the employer party to the collective agreement.
Just as employees stand in a different position than all others, the remaining categories of third parties also differ. The position of a contractor dealing with an employer bound by a collective agreement is unlike both the situation of a union involved in a jurisdictional dispute and the situation of an outside employer whose nominal employees are alleged by the grieving union to fall under its collective agreement. This point can be illustrated by identifying the factual similarities between CBC and Fanshawe College and then contrasting the scenario in these two cases with the setting in Avenor.
In CBC, the grieving union claimed lighting work performed by members of one third-party union and staging work performed by members of another. As neither type of work could belong to two bargaining agents, the claim asserted in the grievance directly contradicted the one made by another union. The legal issues arising from each of these competing claims were matters of labour law. If the jurisdictional dispute in CBC was typical, each union relied upon an ambiguous provision in its agreement, which did not specifically mention all of the tasks in dispute, and could not be interpreted properly without resorting to the history of members of each union doing the contested work. If the two unions pursued their claims in separate arbitrations, there would be a duplication of evidence of the common employer’s past practice in assigning work. There also would be a potential for conflicting awards, with the first arbitrator ruling future work should be assigned to one union, and the second arbitrator awarding the very same work to the other. These characteristics of jurisdictional disputes are the source of the Court of Appeal’s “practical common sense compulsion” to have the competing unions and the employer heard by one tribunal whose decision would bind all of them. The same characteristics led the Supreme Court to remark that notice might prompt a third-party union either to refer its jurisdictional disputes to the labour relations board or to submit voluntarily to the authority of the arbitrator hearing another union’s grievance.
The factual setting in CBC is analogous to the situation in Fanshawe College in several ways. The grievance in that case alleged certain persons, nominally in the employ of a third party, actually were employed by the employer bound by a collective agreement with the grieving union. As a person cannot have two employers in relation to the same work, the employment relationship alleged by the union contradicted the one asserted by the third-party employer. Each of these competing claims involved issues of labour law. The evidence relevant to one claim overlapped substantially the evidence relevant to the other, because the validity of each depended in large measure upon the context in which the contested employees did the work in issue. There was also the potential for dual legal proceedings which would canvass much the same evidence and possibly produce conflicting decisions as to the identity of the true employer. Each of these features of Fanshawe College has an analogue in CBC.
Almost all of the elements common to Fanshawe College and CBC are missing in Avenor where the union sought only to recover work being performed by a contractor. The union’s contention that its collective agreement prohibited contracting out would conflict with any contract, between the employer and the third party, assigning the contested work to it. To the extent the grievance did collide with a legal entitlement asserted by the contractor, the case is analogous to Fanshawe College and CBC, but the analogy ends there. There are a number of significant differences. First, as noted by Arbitrator Bendel in Avenor, no issue of labour law would be posed by any right the contractor might assert. Second, the facts relevant to any legal claim made by the contractor would not be the same as those pertinent to the union’s grievance. Third, there was no chance of irreconcilable decisions about who should do the work in future: if the arbitrator ruled that the disputed work could be done only by members of the bargaining unit, there would be no risk of a judge awarding such work to the contractor, because the remedy available in court would be damages rather than specific performance. These three features distinguish Avenor from CBC and Fanshawe College. The same features also explain why contractors have been treated less favourably in relation to notice and standing than have third-party unions and third-party employers.
A contractor seeking standing at arbitration has a footing no more secure than the union denied notice of a regulatory hearing by the Supreme Court in CRTC. Neither of these third parties have a legal claim which is germane to the issue being adjudicated. They do have a financial stake in the outcome of the adjudication, but this sort of interest does not confer an entitlement to be notified of a hearing or to participate in one.
V
How do the general principles established by the case law apply to the applicants for standing here? If this board grants the relief requested, the province would be ordered to use “best efforts and/or reasonable efforts” to persuade four hospitals to enrol in OPT former crown employees represented by OPSEU, pending the negotiation of a collective agreement. None of the remedies sought would apply directly to the other two hospitals, but the granting of any relief in this case would establish a precedent unfavourable to them.
The temporary enrolment of employees in OPT would entail administrative costs for the hospitals. It might also assist OPSEU in subsequent negotiations over which pension plan would apply in the long-term. If some employees remain in OPT permanently, the hospitals would be faced with the continuing expense of administering two pension plans. These are the ways in which the hospitals stand to lose, if the province’s leverage as their funding agency leads them to agree to temporary enrolment, without them recovering from the province full compensation for all of the resulting costs. In short, the ruling in this case could have significant financial repercussions for the applicants.
The hospitals obviously are in a different position than an employee governed by a collective agreement who is entitled to standing in some circumstances. An employee is bound by the agreement being arbitrated and lacks the legal capacity to engage in dealings inconsistent with it. If barred from arbitration, an employee has no legal recourse to protect interests which might be abrogated by an award. The hospitals do have the legal capacity, if not the financial resources, to negotiate and enforce a contract with the province designed to protect their interests relating to the subject matter of these grievances.
The position of the hospitals also differs from the situation of the third-party unions in CBC and the third-party employers in Fanshawe College, all of whom were held to be entitled to either notice or standing. In each of those cases, the third parties asserted a legal claim which directly contradicted the claim made in the grievance. Those third-party claims raised issues of labour law involving facts also relevant to the grievance. There was a potential for dual proceedings which would canvass the same facts and possibly produce divergent decisions that could not be reconciled. All of these features distinguish those cases from the one at hand where the hospitals assert no legal claim conflicting with the one advanced by OPSEU.
The financial stake of the hospitals in this case is analogous to the interest of a third-party contractor whose business is put at risk by a grievance. When an arbitrator concludes work has been contracted out in contravention of a collective agreement, this ruling may substantially harm the contractor by disrupting its commercial relations with the employer bound by the agreement. If the employer breaches an existing contract in order to comply with the arbitral award, the contractor would be able to obtain compensation for any resulting loss through the courts, but law suits entail their own costs some of which are not recoverable. And the courts would award no compensation for the loss of future business which had not yet been secured by a formal contract. Despite having a significant pecuniary interest in the outcome of arbitration, a contractor is not entitled to standing. I was not referred to a single case suggesting otherwise.
In summary, the case law concerning third-party participation at arbitration does not favour the applicants. The Supreme Court of Canada’s decision in CRTC places another major obstacle in front of them. The economic interest of the hospitals in this proceeding is analogous to the financial stake of the union in CRTC, an interest which the court held did not confer an entitlement to notice.
This analysis leads me to conclude the applications for standing should be denied.
Dated at Toronto, this 20th day of December 2001.