District of Parry Sound Social Services Administration Board v. Ontario Public Service Employees Union, Local 324 et al.

District of Parry Sound Social Services Administration Board v. Ontario Public Service Employees Union, Local 324 et al. [Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324]

54 O.R. (3d) 321

[2001] O.J. No. 2316

Docket No. C34171

Court of Appeal for Ontario

Morden, Rosenberg and Simmons JJ.A.

June 19, 2001

• Application for leave to appeal to the Supreme Court of Canada was granted with costs February 14, 2002 (L'Heureux-Dubé, Bastarache and Binnie JJ.). S.C.C. File No. 28819. S.C.C. Bulletin, 2002, p. 237.

Employment--Employment standards--Grievance arbitration --Jurisdiction--Collective agreement precluded grievance of dismissal of probationary employee and provided that pregnancy and parental leave would be granted in accordance with Employment Standards Act-- Probationary employee dismissed after returning from maternity leave--Employee filed grievance --Board of arbitration had jurisdiction to hear and determine grievance--Section 44 of Employment Standards Act prohibits employer from dismissing any employee because employee has taken pregnancy leave--Section 64.5(1) of Employment Standards Act makes s. 44 part of collective agreement--Statutory provisions conflicted with provision in collective agreement precluding grievance of probationary employee and prevailed over it--Employment Standards Act, R.S.O. 1990, c. E.14, ss. 44, 64.5(1).

A probationary employee filed a grievance when she was discharged a few days after her return from maternity leave, alleging that the discharge involved discrimination on the basis of "family status" contrary to s. 5(1) of the Human Rights Code, R.S.O. 1990, c. H.19. The collective agreement did not give a probationary employee the right to grieve the justness or bona fides of a discharge. The collective agreement also provided that pregnancy and parental leave "will be granted in accordance with the provisions of the Employment Standards Act". Section 48(12)(j) of the Labour Relations Act, 1995, S.O. 1995, c. 1 provides that an arbitrator has the power "to interpret and apply human rights and other employment- related statutes, despite any conflict between those statutes and the terms of the collective agreement". Section 54 of that Act states that a collective agreement must not discriminate against any person if the discrimination is contrary to the Human Rights Code or the Canadian Charter of Rights and Freedoms.

The board of arbitration held that, despite the fact that the grievor was a probationary employee, it had jurisdiction to hear and determine the narrow question of whether discrimination was a factor in the grievor's discharge because of s. 48(12)(j) of the Labour Relations Act. The Divisional Court quashed that interim decision, holding that s. 48(12)(j) confers power on an arbitration board to interpret and apply human rights and other employment-related statutes when and if the arbitration board has jurisdiction to hear a grievance, but not otherwise; that both s. 48(1) of the Labour Relations Act and the collective agreement stipulated that what was to be arbitrated was "differences between the parties arising from the interpretation, application, administration or an alleged violation of the collective agreement"; and that the collective agreement clearly stated that the discharge of a probationary employee did not constitute a difference between the parties. The union appealed.

Held, the appeal should be allowed.

It was unnecessary to express an opinion on the question whether the Divisional Court erred in its application of s. 48(12)(j), as this case could be determined on the basis of the Employment Standards Act.

Section 44 of the Employment Standards Act prohibits an employer from dismissing an employee because the employee has taken pregnancy leave or parental leave, and s. 64.5(1) of the Act makes s. 44 "part of the collective agreement". The provisions of the Employment Standards Act apply to all employees, including probationary employees. Accordingly, the provision in the collective agreement prohibiting a grievance of the discharge of a probationary employee is in conflict with the provisions of the Employment Standards Act, and the provisions of the Act prevailed over it.

APPEAL from a judgment of the Divisional Court (O'Leary, Marchand and Panet JJ.), 2000 C.L.L.C. 220-036 allowing an application for judicial review of a decision of the Board of Arbitration.

McLeod v. Egan (1974), [1975] 1 S.C.R. 517, 46 D.L.R. (3d) 150, 2 N.R. 433, 74 C.L.L.C. 14,220 (sub nom. Re McLeod, U.S.W.A., Local 2894 v. Galt Metal Industries Ltd.), consd Other cases referred to Metropolitan Toronto Reference Library Board v. C.U.P.E., Local 1582 (1995), 46 L.A.C. (4th) 155 (Ont.); Newfoundland Assn. of Public Employees v. Newfoundland, [1996] 2 S.C.R. 3, 140 Nfld. & P.E.I.R. 63, 134 D.L.R. (4th) 1, 196 N.R. 212, 438 A.P.R. 63, 96 C.L.L.C. 230-023 (sub nom. Newfoundland Association of Public Employees v. Newfoundland (Green Bay Health Care Centre)); Queen's University v. Fraser (1985), 51 O.R. (2d) 140, 8 O.A.C. 347, 19 D.L.R. (4th) 240 (Div. Ct.) Statutes referred to Employment Standards Act, 1968, The, S.O. 1968, c. 35, s. 7(1), 11(2) Employment Standards Act, R.S.O. 1990, c. E.14 [as am. 1996, c. 23, s. 18; 1998, c. 8, s. 35], ss. 3, 44, 64.5(1)-(5) Human Rights Code, R.S.O. 1990, c. H.19, ss. 5(1), 10(1) "family status" Labour Relations Act, R.S.O. 1990, c. L.2 [as am. 1992, c. 21, s. 23(3)], s. 45(8)3 Labour Relations Act, 1995, S.O. 1995, c. 1, Sch. A, ss. 48(1), 48(12)(j), 54 Labour Relations Code, S.B.C. 1992, c. 82, s. 89(g) Authorities referred to Adell, "Jurisdictional Overlap Between Arbitration and Other Forums: An Update," (2000) 8 C.L.E.L.J. 179 Surdykowski, G., "The Limits of Grievance Arbitration: Weber and Pilon in Perspective," Labour Arbitration Yearbook, 1999-2000 Swan, K.P., "Legislative Reform of the Grievance Arbitration Process: A Tale of Two Provinces," Labour Arbitration Yearbook, 1994-95

Peggy E. Smith and Kristin A. Eliot, for appellant. William G. Horton, Robert B. Budd and John-Paul Alexandrowicz, for respondent.

The judgment of the court was delivered by

[1] MORDEN J.A.:--This is an appeal by the Ontario Public Service Employees Union, Local 324, from an order of the Divisional Court which, on the application of the respondent, District of Parry Sound Social Services Administration Board, quashed an interim award of a board of arbitration established under a collective agreement between the parties.

[2] The board held in the interim award that it had jurisdiction to consider a grievance based on the discharge of a probationary employee. The facts are straightforward. The grievance in question was brought by a probationary employee of the respondent who alleged:

I grieve that I have been discharged from my position without justification and that the decision was arbitrary, discriminatory, in bad faith and unfair.

[3] The key part of this grievance was the allegation that the discharge was "discriminatory". The Union particularized the grievance with the allegation that the grievor had been discharged a few days after her return from maternity leave. This involved discrimination on the basis of "family status" contrary to s. 5(1) of the Human Rights Code, R.S.O. 1990, c. H.19.

[4] In very general terms, the issue that the board of arbitration and the Divisional Court considered was the proper effect to be given to s. 5(1) of the Human Rights Code having regard to s. 48(12)(j) of the Labour Relations Act, 1995, S.O. 1995, c. 1, Sch. A. Further, this court requested and received submissions on the bearing of ss. 44 and 64.5(1)-(5) of the Employment Standards Act, R.S.O. 1990, c. E.14, as amended by S.O. 1996, c. 23, s. 18 and S.O. 1998, c. 8, s. 35, as an additional possible basis of the board's jurisdiction to consider the grievance.

The Collective Agreement and Relevant Statutory Provisions

[5] The most relevant provisions in the collective agreement are as follows:

5.01 The Union recognizes that the management of the operations and the direction of the employees are fixed exclusively in the Employer and shall remain solely with the Employer except as expressly limited by the clear and explicit language of some other provision of this Agreement and, without restricting the generality of the foregoing, the Union acknowledges that it is the exclusive function of the Employer to:

(b) hire, assign, retire, promote, demote, classify, transfer, direct, lay off, recall and to suspend, discipline or discharge employees who have successfully completed their probationary period for just cause provided that a claim by an employee who has successfully completed his/her probationary period that she/he has been disciplined, suspended or discharged without just cause may be the subject of a grievance and dealt with as hereinafter provided;

8.06 Discharge Grievance

(a) A grievance involving the discharge of an employee who has successfully completed his probationary period must be reduced to writing and originated under Step No. 2 within five (5) working days of the employee being notified of his discharge. The nature of the grievance, the remedy sought, and the section or sections of the Agreement which are alleged to have been violated must be set out in the grievance which shall be signed by the employee. Notwithstanding anything in this Agreement, a probationary employee may be discharged at the sole discretion of and for any reason satisfactory to the Employer and such action by the Employer is not subject to the grievance and arbitration procedures and does not constitute a difference between the parties.

(Emphasis added)

13.02 Pregnancy and Parental Leave

(a) Pregnancy and parental leave will be granted in accordance with the provisions of the Employment Standards Act;

[6] The following statutory provisions are also relevant:

Labour Relations Act, ss. 48(1), 48(12)(j) and 54.

48(1) Every collective agreement shall provide for the final and binding settlement by arbitration, without stoppage of work, of all differences between the parties arising from the interpretation, application, administration or alleged violation of the agreement, including any question as to whether a matter is arbitrable.

48(12) An arbitrator or the chair of an arbitration board, as the case may be, has power,

(j) to interpret and apply human rights and other employment-related statutes, despite any conflict between those statutes and the terms of the collective agreement.

54. A collective agreement must not discriminate against any person if the discrimination is contrary to the Human Rights Code or the Canadian Charter of Rights and Freedoms.

Human Rights Code, s. 5(1)

5(1) Every person has a right to equal treatment with respect to employment without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, age, record of offences, marital status, same-sex partnership status, family status or handicap.

(Section 10(1) defines family status to mean "the status of being in a parent and child relationship".)

Employment Standards Act, ss. 44 and 64.5(1)-(5)

44. An employer shall not intimidate, discipline, suspend, lay off, dismiss or impose a penalty on an employee because the employee is or will become eligible to take, intends to take or takes pregnancy leave or parental leave.

64.5(1) If an employer enters into a collective agreement, the Act is enforceable against the employer with respect to the following matters as if it were part of the collective agreement:

1. A contravention of or failure to comply with the Act that occurs when the collective agreement is in force.

(2) An employee to whom a collective agreement applies (including an employee who is not a member of the trade union) is not entitled to file or maintain a complaint under the Act.

(3) Despite subsection (2), the Director may permit an employee to file or maintain a complaint under the Act if the Director considers it appropriate in the circumstances.

(4) An employee to whom a collective agreement applies (including an employee who is not a member of the trade union) is bound by a decision of the trade union with respect to the enforcement of the Act under the collective agreement, including a decision not to seek the enforcement of the Act.

(5) Subsection (4) does not prevent an employee from making a complaint to the Board that a decision of the trade union with respect to the enforcement of this Act contravenes section 74 of the Labour Relations Act, 1995.

The Reasons of the Board and the Divisional Court

[7] The majority of the board of arbitration recognized that it had no inherent powers and that "[a]ll the power and authority is specified in the collective agreement created by the parties and the legislative scheme in which they operate."

[8] Later it said:

[S]ection 48(12)(j) of the Labour Relations Act obligates and empowers a board of arbitration to interpret a collective agreement in a manner consistent with the Human Rights legislation in this province. The Human Rights Code prohibits discrimination on the basis of family status. This collective agreement must be interpreted and applied in a manner that is consistent with the statutory rights available to all employees, including probationary employees.

This collective agreement does not give a probationary employee the right to grieve the justness or the bona fides of a discharge. Nor does the collective agreement allow a board of arbitration to interfere with the discretion of the Employer in deciding to release a probationary employee. The parties have agreed to leave such matters to the sole prerogative of management. But the Labour Relations Act imposes an overriding requirement upon the parties and their collective agreement that ensures it will be applied in a manner consistent with the Human Rights Code. Further, the power to interpret and apply that duty resides with a board of arbitration constituted under the collective agreement.

The case at hand is distinguishable from all the other cases cited by the Employer in that we have a specific allegation of discrimination in this case. In the Leeming case [Re The Queen in right of New Brunswick and Leeming et al., [1981] 1 S.C.R. 129, 118 D.L.R. (3d) 202], supra, the Supreme Court of Canada was able to conclude that the legislative scheme regarding arbitration did not confer any substantive rights upon employees. Therefore, a board of arbitration could not apply or enforce substantive rights. However, in the case at hand, the Labour Relations Act does import the substantive rights under the Human Rights Code into a collective agreement over which a board of arbitration has jurisdiction. Further, in none of the cases cited by the Employer was there an allegation that the grievor had been treated in a discriminatory manner. Therefore, this case is distinguishable from the case law cited above.

For all these reasons, we have concluded that this Board of Arbitration has the power and the responsibility to hear and determine the narrow question of whether discrimination was a factor in the discharge of the grievor.

[9] The dissenting member of the board of arbitration agreed with the majority that if the terms of the collective agreement conflicted with the Human Rights Code, the Code would prevail. However, this did not mean that the forum for determining such matters was necessarily a board of arbitration. He said:

Had our collective agreement not contained the provision that provided that the discharge of a probationary employee was not to be arbitrated and would not constitute a difference between the parties, I would have agreed with the Chair's decision. However, in my view, the parties are free to determine what constitutes a difference between them, which can then be arbitrated.

There is nothing at all illegal or wrong in the Employer and the Union agreeing that they will not arbitrate the discharge of a probationary employee. If any statutory rights of the probationary employee were infringed by the termination, then she is perfectly free to pursue her rights in the particular forum provided under the statute in issue.

In my view, the majority of the Board has exceeded their jurisdiction by taking jurisdiction in this case when the parties have clearly told us that an Arbitration Board was not to deal with discharge of a probationary employee. Section 48(12)(j) of the Labour Relations Act could only be utilized if a Board of Arbitration had jurisdiction in the first instance to deal with a particular dispute between the parties. In our case, since there was no difference between the parties, that should have been the end of the matter. Our Board has no jurisdiction to deal with this case and section 48(12)(j) of the Labour Relations Act should not even come into play.

[10] O'Leary J. gave the reasons of the Divisional Court for quashing the Board's decision. His reasoning was, essentially, that of the dissenting board member. He said [at paras. 10-12]:

We interpret s. 48(12)(j) to confer power on an arbitration board, to interpret and apply human rights and other employment-related statutes when and if the Board of Arbitration has jurisdiction to hear a grievance, but not otherwise.

Both the Labour Relations Act, s. 48(1) and the collective agreement stipulate what is to be arbitrated is "differences between the parties arising from the interpretation application, administration or an alleged violation of the agreement".

The agreement here states clearly that the discharge of a probationary employee does not constitute a difference between the parties. The grievor has chosen the wrong forum to litigate her claim. It should be before the Ontario Human Rights Commission if she feels her rights under the Code have been violated.

The Effect of s. 48(12)(j) of the Labour Relations Act

[11] As I have indicated, and as the quoted portions of the reasons show, the basic issue with respect to s. 48(12)(j) is just how the board of arbitration should apply the Human Rights Code to the case at hand. I shall address this issue first and then consider the application of the Employment Standards Act provisions to which I have referred.

[12] The legislative history of s. 48(12)(j) may properly be considered to include the important decision of the Supreme Court of Canada in McLeod v. Egan (1974), [1975] 1 S.C.R. 517, 46 D.L.R. (3d) 150. In this case, it was held that s. 7(1) in the Employment Standards Act, 1968, S.O. 1968, c. 35, which limited the number of hours that an employee could be required to work, prevailed over a provision in the collective agreement giving the employer the power to schedule its operations "when and in its sole discretion it may deem advisable to do so . . .". At p. 523 S.C.R., Martland J. said for the court:

The basic provision of the Act is that which places a maximum limit upon the working hours of an employee of eight in the day and forty-eight in the week. Any provision of an agreement which purported to give to an employer an unqualified right to require working hours in excess of those limits would be illegal, and the provisions of art. 2.01 of the collective agreement, which provided that certain management rights should remain vested in the Company, could not, in so far as they preserved the Company's right to require overtime work by its employees, enable the Company to require overtime work in excess of those limits.

[13] The court also held that there was no provision in the collective agreement which amounted to "the consent or agreement of the employee or his agent" within the meaning of these words in s. 11(2) of the Employment Standards Act [, 1968] which would, in the circumstances, have allowed the employer to require hours of work in excess of those provided for in s. 7(1). It was with respect to this issue that Laskin C.J.C. said in his concurring reasons at pp. 518-19 S.C.R.:

Although the issue before the arbitrator arose by virtue of a grievance under a collective agreement, it became necessary for him to go outside the collective agreement and to construe and apply a statute which was not a projection of the collective bargaining relations of the parties but a general public enactment of the superior provincial Legislature. On such a matter, there can be no policy of curial deference to the adjudication of an arbitrator, chosen by the parties or in accordance with their prescriptions, who interprets a document which is in language to which they have subscribed as a domestic charter to govern their relationship.

(Emphasis added)

[14] It should be asked what s. 48(12)(j) has added to McLeod v. Egan. Section 48(12)(j) succeeded s. 45(8)3 of the Labour Relations Act, R.S.O. 1990, c. L.2 as enacted by S.O. 1992, c. 21, s. 23(3). It read:

45(8) An arbitrator or arbitration board shall make a final and conclusive settlement of the differences between the parties and, for that purpose, has the following powers:

3. To interpret and apply the requirements of human rights and other employment-related statutes, despite any conflict between those requirements and the terms of the collective agreement.

[15] While the wording and introductory context of this provision is not exactly the same as those pertaining to s. 48(12)(j), I do not think that the two provisions are intended to have different meanings.

[16] The wording of s. 45(8)3 is similar to legislation in British Columbia, s. 89(g) of the Labour Relations Code, S.B.C. 1992, c. 82, which read:

89. For the purposes set out in section 82, an arbitration board has the authority necessary to provide a final and conclusive settlement of a dispute arising under a collective agreement, and without limitation, may

(g) interpret and apply any Act intended to regulate the employment relationship of the persons bound by a collective agreement, despite that the Act's provisions conflict with the terms of the collective agreement, and

This legislation, in turn, appears to have its root in S.B.C. 1975, c. 33, s. 27 which re-enacted s. 98 of the Labour Code of British Columbia Act, S.B.C. 1973, c. 122 to include the provision which subsequently became s. 89(g). This legislation was introduced before the decision of the Supreme Court of Canada in McLeod v. Egan and so it is difficult to think that it was intended to expand or modify what that case held respecting the interaction of statutory provisions and the terms of a collective agreement.

[17] Commenting on s. 45(8)3 of the Ontario Act, Kenneth P. Swan has said:

The apparent purpose of this change is to deal with those few cases which require arbitral jurisdiction beyond that conferred by the Supreme Court of Canada, in McLeod v. Egan, to interpret statutes of general application in the course of deciding disputes arising under the collective agreement. The additional authority to apply those statutes would seem to include a jurisdiction to give a remedy contemplated by the statute, but not contemplated by the collective agreement, where the matter is otherwise within the arbitrator's jurisdiction.

(Swan, "Legislative Reform of the Grievance Arbitration Process: A Tale of Two Provinces", Labour Arbitration Yearbook, 1994-95, 3 at 14.)

[18] It may be noted that in McLeod v. Egan Laskin C.J.C. appears to have taken it for granted that arbitrators had the power to "construe and apply" (emphasis added) relevant statutory provisions. Notwithstanding this, it may be that there is scope for regarding "interpret and apply" in s. 45(8)3 and s. 48(12)(j) as conferring power to give a statutory remedy not provided for in the collective agreement, as suggested by Mr. Swan. In McLeod v. Egan it would appear that the effect of the application of the Employment Standards Act was fully exhausted when it was applied to override the employer's power in the collective agreement to require employees to perform overtime work beyond 48 hours.

[19] George Surdykowski, a senior arbitrator, has expressed the following, possibly more restrictive, view of the meaning of s. 48(12)(j):

Section 48(12)(j) is but one of ten provisions which delineate the powers of arbitrators, and I suggest that its purpose and effect is the same as it was in Bill 40 [s. 45(8) 3]; that is, to make it clear that collective agreements are subject to legislation of general application, and that arbitrators can take such legislation into account in interpreting a collective agreement.

This does not mean that arbitrators are clothed with independent jurisdiction under "human rights and other employment-related statutes". What it does mean is that arbitrators are not required to give effect to collective agreement provisions which conflict with legislation, something which ought to have been, but apparently was not perceived to be, obvious.

To the extent, that it has been suggested in arbitral jurisprudence that section 48(12)(j) of the Labour Relations Act enables an arbitrator to interpret, apply and give relief under the Labour Relations Act, the Employment Standards Act, the Human Rights Code or the Occupational Health and Safety Act, as though the arbitrator was a tribunal constituted under the particular legislation, whether or not there is a breach of the collective agreement, I respectfully disagree. Neither this nor any other provision of the Labour Relations Act clothes arbitrators with a plenary jurisdiction to adjudicate any and all disputes between the parties to a collective agreement, regardless whether there exists a connection between the dispute and the agreement.

("The Limits of Grievance Arbitration: Weber and Pilon in Perspective," Labour Arbitration Yearbook, 1999-2000 67 at 69.)

[20] Professor Adell has expressed what currently appears to be the generally held view:

Even where the labour relations statute explicitly allows arbitrators to apply human rights legislation in resolving grievances, as in British Columbia and Ontario, the assumption now seems to prevail that this authority only extends to disputes that have some sort of anchor in the collective agreement.

("Jurisdictional Overlap Between Arbitration and Other Forums: An Update", (2000) 8 C.L.E.L.J. 179 at 195-96). Professor Adell notes on p. 196 that "anchor" is his term and that "[i]t is variously referred to in the awards as a 'nexus', a 'hook' or, with a contemporary ring, a 'landing pad'."

[21] Accepting that the interpretation and application of the relevant statutory provisions is dependent on disputes that have some sort of anchor in, or nexus with, the collective agreement, the real difficulty is to determine just when such a case exists. In the present case, the Divisional Court held that, looking at the terms of the collective agreement alone, there was no foundation for considering human rights legislation. The implication of this appears to be that the statute may only be interpreted and applied to modify the terms of a collective agreement under which there is a dispute. With respect, I think that this may give too narrow an effect to the wording of s. 48(12)(j).

[22] I do not think that s. 48(12)(j) contemplates a two-step approach to interpreting the collective agreement: (1) a reading of the collective agreement by itself; and then, only if this reading shows that there is a dispute, (2) an interpretation of the agreement in the context of the relevant statutory provision. I think that a more simple and straightforward approach is contemplated. The provisions in the collective agreement should be read, initially, in the context of the relevant statutory provision or provisions. The resulting interpretation should then be applied to the facts of the case. This one-level approach is consistent with the conferral of a power in s. 48(12)(j) to "interpret and apply" certain legislation "despite any conflict between those statutes and the terms of the collective agreement."

[23] It may be that the terms of the collective agreement alone, isolated from the statutory context, indicate that there is no dispute. However, if they are in conflict with a statutory provision, the statutory provision will prevail. This was the case in McLeod v. Egan and in Queen's University v. Fraser (1985), 51 O.R. (2d) 140, 19 D.L.R. (4th) 240 (Div. Ct.) and it has been held that conflict between the collective agreement and a statutory provision is the "anchor" or "nexus" which gives the arbitrator jurisdiction to interpret and apply the statute. I refer in this respect, to the quotation from Surdykowski above "that arbitrators are not required to give effect to collective agreement provisions which conflict with legislation", to Adell's article in 8 C.L.E.L.J. at pp. 190-94, and to Metropolitan Toronto Reference Library Board v. C.U.P.E., Local 1582 (1995), 46 L.A.C. (4th) 155 at pp. 165-66 (Ont.):

However, prior to this amendment [s. 45(8)3], arbitrators, with the approval of the courts, had relied upon external statutes where such statutes were incorporated into the collective agreement, where such statutes aided in the interpretation and/or intended application of the language of the collective agreement and where such statutes were in conflict with the language of the collective agreement making the language unlawful to enforce (see McLeod v. Egan (1974), 46 D.L.R. (3d) 150, [1975] 1 S.C.R. 512, 74 C.L.L.C. 14,220, and Re Ford Motor Co. of Canada Ltd. and C.A.W., Loc. 1520 (1992), 27 L.A.C. (4th) 257 (Palmer)).

[24] The foregoing inclines me to the view that the dissenting member of the board of arbitration and the Divisional Court took too narrow a view of s. 48(12)(j). The dissenting member said that the effect of a conflict between the collective agreement and the Human Rights Code meant that the Code would prevail, but that the only consequence of this was that the grieving employee was free to assert her rights directly under the Human Rights Code and not that the board of arbitration would have power to apply the agreement in a manner that would comply with the Code. If s. 48(12)(j) had merely said that the statutes would prevail in the event of a conflict between them and the collective agreement, which would be the case even in the absence of s. 48(12)(j), this would be so. However, the fact that the statute expressly gives to arbitrators the power to interpret and apply certain legislation suggests that its effect is greater and is to have some bearing on the arbitrator's jurisdiction.

[25] Applying this reasoning to the facts of this case, the conclusion would be that the right of the employer under the collective agreement to discharge a probationary employee "for any reason satisfactory to the employer" is in direct conflict with s. 5(1) of the Human Rights Code and it should be read down not to include the power to discharge an employee on the ground of family status.

[26] Although the foregoing reflects what I think is the better view of the meaning of s. 48(12)(j), I think that I should indicate that the foundation on which it is based may not be as solid as it should be. The nexus between the statute and the collective agreement which is based on conflict, when considered in a broader context, could involve some incongruity. Professor Adell has observed at p. 197 of the article to which I have earlier referred:

The requirement of an explicit anchor or "landing pad" in the collective agreement has the incongruous result that an arbitrator will find the dispute arbitrable, and will resolve it on the basis of the external statute, where the parties have said something inconsistent with what that statute requires on a particular matter, but not where they have said nothing at all on the matter. If they explicitly reject or contradict what the statutes says, an arbitrator will apply it anyway. If they simply ignore the matter entirely in their agreement, an arbitrator will shunt the dispute off to another forum.

[27] Section 48(12)(j), at least by its wording, stops short of making the statutory provisions referred to in it part of the collective agreements. This feature of the provision results in some uncertainty on the scope of its application.

Sections 44 and 64.5(1)-(5) of the Employment Standards Act

[28] Before returning to s. 48(12)(j), I shall deal now with the case based on ss. 44 and 64.5(1)-(5) of the Employment Standards Act, which are set forth earlier in these reasons. In my respectful view, their meaning, for the case at hand, is much clearer than that of s. 48(12)(j). Section 64.5(1) makes s. 44 "part of the collective agreement" and s. 44 prohibits an employer from dismissing an employee because the employee has taken pregnancy leave or parental leave.

[29] The respondent has submitted that, by reason of the terms of article 8.06 in the collective agreement, "the Appellant cannot grieve the enforcement of the Employment Standards Act in circumstances where the alleged contravention of the Employment Standards Act relates to the discharge of a probationary employee" and that "[a]rticle 8.06(a) precludes the Appellant from grieving the discharge of a probationary employee on any basis." It also submits that "when the Appellant negotiated the Collective Agreement with the Respondent, the Appellant made a decision, enforceable pursuant to section 64.5(4) of the Employment Standards Act, not to seek the enforcement of the Act in connection with the discharge of probationary employees" and that s. 64.5(4) provides that the grievor is bound by the appellant's decision not to seek enforcement of the Act.

[30] I do not accept these submissions. The provisions in the Employment Standards Act apply to all employees, including probationary employees. Accordingly, article 8.06(a) is in conflict with these provisions. The result is that they must prevail over it. It is not open to the parties to contract out of the Employment Standards Act provisions (s. 3 of the Employment Standards Act and Newfoundland Assn. of Public Employees v. Newfoundland, [1996] 2 S.C.R. 3, 134 D.L.R. (4th) 1 at p. 16 S.C.R., p. 9 D.L.R.), particularly where the Act is made part of the agreement.

[31] The respondent has also submitted that this court should not consider the case on the basis of the application of the Employment Standards Act provisions because the appellant had not sought enforcement of these provisions before either the board of arbitration or the Divisional Court and that it is not doing so in this court. This latter submission does not accurately describe the appellant's position. Before this court, the appellant submitted that it clearly preferred that the case be decided on the basis of the application of the Human Rights Code but it also submitted that the Employment Standards Act provisions confer "stand alone" jurisdiction on the board of arbitration to determine the grievance.

[32] Although the respondent has submitted that, because the issue was not raised below, this court should not decide the case on the basis of the Employment Standards Act provisions, it has not submitted that it would be prejudiced if we did so. The jurisdictional issue that was before the board of arbitration and is now before this court is a pure question of law. The "facts" for the limited purpose of deciding this jurisdictional issue are not in dispute. Accordingly, I am satisfied that no prejudice would be occasioned to the respondent if we decided the case on this basis.

[33] In view of this direct statutory incorporation of the Employment Standards Act provisions into the collective agreement, it is not necessary to consider the effect of Article 13.02(a), Pregnancy and Parental Leave, in the collective agreement, on the issue to be decided.

Conclusion

[34] Although, for the reasons I have given, I am inclined to the view that the Divisional Court erred in its application of s. 48(12)(j) of the Labour Relations Act, I prefer not to express a concluded opinion on this question. I take this approach because, on the facts of the case, I regard the Employment Standards Act provisions to be a much firmer basis of decision. In taking this minimalist approach, I have dealt fully with the rights of the parties on the facts but have not foreclosed a different analysis of s. 48(12)(j) on the basis of further consideration given in a future case.

Disposition

[35] For these reasons, I would allow the appeal, set aside the order of the Divisional Court, and make an order dismissing the application for judicial review. Although the case has taken a somewhat different turn in this court, the appellant has had the better part of the argument overall, and I think it appropriate to award it the costs of the application, of the motion for leave to appeal (which, in any event, were to be "in the appeal"), and of the appeal.

Appeal allowed.