Gaignard et al. v. The Attorney General of Canada et al. [Indexed as: Gaignard v. Canada (Attorney General)]

67 O.R. (3d) 611

[2003] O.J. No. 3998

Docket No. C38916

Court of Appeal for Ontario

Morden, Labrosse and Goudge JJ.A.

October 17, 2003

Courts -- Jurisdiction -- Penitentiary employees bringing action against their employer alleging that employer authorized and conducted secret operation to stop flow of contraband into penitentiary -- Methods employed allegedly poisoned work environment and caused plaintiffs physical and emotional harm -- Allegations clearly engaging employer's obligation in collective agreement to make reasonable provisions for occupational safety and health of employees -- If dispute were arbitrated and breach of collective agreement were established, remedy at arbitration would include compensation to injured employees who grieved -- That remedy would be equivalent to award of damages in court action -- Essential character of dispute dictating application of principle of exclusive jurisdiction -- Court's jurisdiction to hear dispute excluded.

The plaintiffs were Correctional Officers covered by a collective agreement between their union and their employer, the Government of Canada. They brought an action against the Government of Canada and senior members of the management team at the penitentiary where the plaintiffs were employed, alleging that the defendants authorized and conducted a secret operation to stop the flow of contraband into the penitentiary in which they recruited inmates to coerce the plaintiffs to comply with illegal demands for contraband. They pleaded that these actions constituted the intentional infliction of emotional distress, breach of the duty of good faith, breach of fiduciary duty, breach of the duty of care and breach of the Canadian Charter of Rights and Freedoms. They sought damages for the physical and emotional injuries they suffered. They also pleaded defamation, alleging that public statements made by the defendants about the operation defamed them. The defendants moved pursuant to rule 21.01(3)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 to strike out all the allegations in the statement of claim except those relating to defamation. The motions judge granted the order on the basis that a grievance concerning the plaintiffs' complaints, had it been presented, would have been one with respect to the application of the provisions of the collective agreement within the meaning of s. 92(1)(a) of the Public Service Staff Relations Act, R.S.C. 1985, c. P-35 ("PSSRA"), and that the arbitration process (called adjudication in the PSSRA) authorized by that section was sufficient to exclude the jurisdiction of the court to entertain the plaintiffs' claims, with the exception of the defamation claim. The plaintiffs appealed.

Held, the appeal should be dismissed.

The conclusion that the court's jurisdiction to entertain the claim was excluded was correct, but the appropriate route to that conclusion was to focus not on the interpretation of the arbitration provisions of the PSSRA, but rather on the essential character of the dispute, to determine if it had to be resolved by arbitration and not by the courts. It is established law that if the dispute between the parties in its essential character arises from the interpretation, application, administration or violation of the collective agreement, it is to be determined by an arbitrator and not by the courts. The question is whether, considering the facts of the dispute, the language of the collective agreement, and the effectiveness of [page612] the remedy provided by the arbitration mechanism, this is the kind of dispute that the parties intended to be finally settled by arbitration. If so, the principle of exclusive jurisdiction applies to exclude court action.

The plaintiffs' complaint was against their employer and its executive team and concerned the way the workplace was run by management. The facts centred on an alleged covert operation to stop contraband entering the penitentiary which employed the plaintiffs, which employed methods that the plaintiffs claimed poisoned their work environment and caused them physical and emotional harm. These allegations clearly engaged the employer's obligation in Article 18 of the collective agreement to make reasonable provisions for the occupational safety and health of the employees. The ambit of Article 18 extended to the facts which the plaintiffs said underpinned the dispute. If the dispute were arbitrated and a breach of the collective agreement were established, the remedy at arbitration would undoubtedly include compensation to injured employees who grieved. That would remedy the wrong in very much the same way as would an award of damages in a court action. The essential character of the dispute entailed that the principle of exclusive jurisdiction apply.

APPEAL by the plaintiffs from an order striking part of statement of claim.

Weber v. Ontario Hydro, 1995 108 (SCC), [1995] 2 S.C.R. 929, 24 O.R. (3d) 358n, 125 D.L.R. (4th) 583, 183 N.R. 241, 30 C.R.R. (2d) 1, 12 C.C.E.L. (2d) 1, 24 C.C.L.T. (2d) 217, 95 C.L.L.C. Â210-027, apld Vaughan v. Canada (2003), 224 D.L.R. (4th) 640, 306 N.R. 366, 2003 FCA 76, [2003] F.C.J. No. 241 (QL), [2003] 3 FC 645 (C.A.), affg (2001), 213 F.T.R. 144, 2001 FCT 1233, [2001] F.C.J. No. 1734 (QL) (T.D.), not folld Other cases referred to Goudie v. Ottawa (City) (2003), 2003 SCC 14, 223 D.L.R. (4th) 395, 301 N.R. 201, 2003 C.L.L.C. Â220-028, 2003 SCC 14, 23 C.C.E.L. (3d) 1, 30 C.P.C. (5th) 207, [2003] S.J. No. 12 (QL); Guenette v. Canada (Attorney General) (2002), 2002 45012 (ON CA), 60 O.R. (3d) 601, 216 D.L.R. (4th) 410, 2002 C.L.L.C. Â220-038, 19 C.C.E.L. (3d) 36 (C.A.); Jadwani v. Canada (Attorney General) (2001), 2001 24157 (ON CA), 52 O.R. (3d) 660, 2001 C.L.L.C. Â220-039, 5 C.C.E.L. (3d) 233 (C.A.), affg (2000), 2000 22333 (ON SC), 47 O.R. (3d) 276 (S.C.J.) Statutes referred to Canadian Charter of Rights and Freedoms Public Service Staff Relations Act, R.S.C. 1985, c. P-35, ss. 91, 92 Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 21.01(3) (a)

Angus J. MacLeod, for appellant. R. Jeff Anderson, for respondent.

The judgment of the court was delivered by

[1] GOUDGE J.A.: -- This case represents yet another debate about the application of the bright line principle laid down in [page613] Weber v. Ontario Hydro, 1995 108 (SCC), [1995] 2 S.C.R. 929, 125 D.L.R. (4th) 583 that disputes which arise out of a collective agreement must be resolved by arbitration and not by the courts.

[2] Cullity J. decided that this was such a dispute. For the reasons that follow I agree with his conclusion.

[3] The appellants are the plaintiffs in this lawsuit. They are Correctional Officers who work at Kingston Penitentiary. As such, they are covered by a collective agreement between their union, the Public Service Alliance of Canada, and their employer, the Government of Canada.

[4] The respondents, the defendants in the action, are the Attorney General of Canada representing the Government of Canada and seven senior members of its management team at Kingston Penitentiary.

[5] The statement of claim alleges that the defendants authorized and conducted a secret operation to stop the flow of contraband into the penitentiary in which they recruited inmates to coerce the appellants to comply with illegal requests for contraband. The appellants allege that as part of this operation, the respondents covertly supplied these inmates with funds, confidential information and contraband. They say that this management conduct poisoned the atmosphere at the penitentiary for the appellants and put their lives at risk. The appellants plead that these actions constitute the intentional infliction of emotional distress, breach of the duty of good faith, breach of fiduciary duty, breach of the duty of care and breach of the Canadian Charter of Rights and Freedoms and they claim damages for the physical and emotional injuries they suffered. In addition the appellants plead defamation alleging that public statements made by the respondents about the operation defamed them.

[6] Pursuant to rule 21.01(3)(a) [Rules of Civil Procedure, R.R.O. 1990, Reg. 194], the respondents moved to strike all the allegations in the statement of claim save those relating to defamation. In granting the order, the motions judge focussed primarily on the relevant provisions of the legislation that governs the union and the employer, the Public Service Staff Relations Act, R.S.C. 1985, c. P-35 ("PSSRA").

[7] Sections 91 and 92 of the PSSRA provide inter alia that an employee can grieve both about the interpretation or application in respect of him or her of a provision of the collective agreement and about the interpretation or application of any other regulation or directive by the employer about terms and conditions of employment, but can take only the former to arbitration. The relevant parts of these sections read as follows: [page614]

91(1) Where any employee feels aggrieved

(a) by the interpretation or application, in respect of the employee, of

(i) a provision of a statute, or of a regulation, by-law, direction or other instrument made or issued by the employer, dealing with terms and conditions of employment, or

(ii) a provision of a collective agreement or an arbitral award . . .

in respect of which no administrative procedure for redress is provided in or under an Act of Parliament, the employee is entitled, subject to subsection (2), to present the grievance at each of the levels, up to and including the final level, in the grievance process provided for by this Act.

(2) An employee is not entitled to present any grievance relating to the interpretation or application, in respect of the employee, of a provision of a collective agreement or an arbitral award unless the employee has the approval of and is represented by the bargaining agent for the bargaining unit to which the collective agreement or arbitral award applies, or any grievance relating to any action taken pursuant to an instruction, direction or regulation given or made as described in section 113.

92(1) Where an employee has presented a grievance, up to and including the final level in the grievance process, with respect to

(a) the interpretation or application in respect of the employee of a provision of a collective agreement or an arbitral award . . .

and the grievance has not been dealt with to the satisfaction of the employee, the employee may, subject to subsection (2), refer the grievance to adjudication.

(2) Where a grievance that may be presented by an employee to adjudication is a grievance described in paragraph (1)(a), the employee is not entitled to refer the grievance to adjudication unless the bargaining agent for the bargaining unit, to which the collective agreement or arbitral award referred to in that paragraph applies, signifies in the prescribed manner its approval of the reference of the grievance to adjudication and its willingness to represent the employee in the adjudication proceedings.

[8] These provisions are in essence repeated in Article 20.01 and Article 20.23 of the collective agreement governing the parties here. They are as follows:

20.01 In cases of alleged misinterpretation or misapplication arising out of agreements concluded by the National Joint Council (NJC) of the Public Service on items which may be included in a collective agreement and which the parties to this Agreement have endorsed, the grievance procedure will be in accordance with Section 7.0 of the NJC By-Laws. [page615]

20.23 Where an employee has presented a grievance up to and including the Final Level in the grievance procedure with respect to:

(a) the interpretation or application in respect of him or her of a provision of this Agreement or a related arbitral award,

or

(b) disciplinary action resulting in suspension or a financial penalty,

or

(c) termination of employment or demotion pursuant to paragraph 11(2)(f) or (g) of the Financial Administration Act,

and the employee's grievance has not been dealt with to his or her satisfaction, he or she may refer the grievance to adjudication in accordance with the provisions of the Public Service Staff Relations Act and Regulations.

[9] The one other article of the collective agreement that is germane to this dispute is Article 18:

18.01 The Employer shall make reasonable provisions for the occupational safety and health of employees. The Employer will welcome suggestions on the subject from the Alliance, and the parties undertake to consult with a view to adopting and expeditiously carrying out reasonable procedures and techniques designed or intended to prevent or reduce the risk of employment injury.

[10] The motions judge held that the central issue was one of statutory interpretation. Could the complaints of the appellants have been made the subject of a grievance within s. 92(1)(a) as one "with respect to the interpretation or application in respect of [these employees] of a provision of a collective agreement"? Keeping in mind Article 18, the motions judge concluded that (although the appellants had not done so) a grievance presented by the appellants concerning their complaints would have been one with respect to the application of the provisions of the collective agreement within the meaning of s. 92(1)(a) of the PSSRA. He further concluded that the arbitration process (called adjudication in the Act) authorized by that section was sufficient to exclude the jurisdiction of the court to entertain the appellants' claims based on the impugned paragraphs of the statement of claim. He therefore struck all the paragraphs from the appellants' pleading save those supporting the defamation claim.

Analysis

[11] I would reach the same conclusion as the motions judge but by a slightly different route. I would focus not on the interpretation of the arbitration provision of the PSSRA, but rather [page616] on the essential character of the dispute, to determine if it must be resolved by arbitration and not by the courts.

[12] Weber, supra, first set out in detail the principle of exclusive jurisdiction -- that certain disputes must be resolved by arbitration and the courts have no power to entertain an action in respect of those disputes.

[13] The principle was designed to apply where there is a collective agreement which is required by legislation to provide for the resolution of disputes by arbitration. McLachlin J. spoke for the court on this issue. At p. 959 S.C.R., she made clear that according exclusive jurisdiction to the arbitration process for certain disputes gives "full credit" to several considerations: the legislation requiring that there be an arbitration procedure to resolve disputes under the collective agreement; the "pattern of growing judicial deference" to the process of grievance and arbitration; and the desire not to allow concurrent actions to duplicate and undermine that dispute resolution process.

[14] The Weber principle requires a determination of when a particular dispute is within the exclusive jurisdiction of arbitration under the collective agreement and therefore is beyond the reach of court action. Binnie J. articulated the general test for this determination in Goudie v. Ottawa (City), 2003 SCC 14, 223 D.L.R. (4th) 395, at para. 23:

Subsequent cases have confirmed that if the dispute between the parties in its "essential character" arises from the interpretation, application, administration or violation of the collective agreement, it is to be determined by an arbitrator appointed in accordance with the collective agreement, and not by the courts.

[15] Weber and cases that have followed it have provided guidance on the considerations for assessing "the essential character" of a particular dispute to determine if the exclusive jurisdiction principle applies and therefore if it must be resolved by arbitration.

[16] First, as McLachlin J. said in Weber, at p. 955 S.C.R., one must look to the facts giving rise to the dispute rather than the legal characterization of the wrong said to be manifested by those facts. The facts must engage the rights and obligations in the collective agreement in order to be arbitrated.

[17] The second consideration is the corollary of the first, namely (in the language of McLachlin J., at p. 956 S.C.R. of Weber), the ambit of the collective agreement. The language chosen by the parties must clearly create rights and obligations that extend to these facts, either expressly or by implication.

[18] The third consideration is whether the arbitration process provided by the collective agreement can furnish an effective [page617] remedy for the dispute. The remedy need not be identical to that which the court would provide, but it must be responsive to the wrong complained of. The arbitration process does not acquire exclusive jurisdiction if the result is a real deprivation of any ultimate remedy. McLachlin J. put this point as follows in Weber, at pp. 958-59 S.C.R.:

It might occur that a remedy is required which the arbitrator is not empowered to grant. In such a case, the courts of inherent jurisdiction in each province may take jurisdiction. This Court in St. Anne Nackawic confirmed that the New Brunswick Act did not oust the residual inherent jurisdiction of the superior courts to grant injunctions in labour matters (at p. 724). Similarly, the Court of Appeal of British Columbia in Moore v. British Columbia (1988), 1988 184 (BC CA), 50 D.L.R. (4th) 29, at p. 38, accepted that the court's residual jurisdiction to grant a declaration was not ousted by the British Columbia labour legislation, although it declined to exercise that jurisdiction on the ground that the powers of the arbitrator were sufficient to remedy the wrong and that deference was owed to the labour tribunal. What must be avoided, to use the language of Estey J. in St. Anne Nackawic (at p. 723), is a "real deprivation of ultimate remedy".

[19] This consideration arises particularly in the context of the PSSRA. In Jadwani v. Canada (Attorney General) (2001), 2001 24157 (ON CA), 52 O.R. (3d) 660, 5 C.C.E.L. (3d) 223 (C.A.), this court applied the exclusive jurisdiction principle and precluded court action in significant measure because, under the statute, the complaint could be remedied at arbitration. On the other hand, in Guenette v. Canada (Attorney General) (2002), 2002 45012 (ON CA), 60 O.R. (3d) 601, 216 D.L.R. (4th) 410 (C.A.), this court declined to apply the exclusive jurisdiction principle, in part because under the PSSRA the complaint could be grieved, but could not be taken to arbitration for final resolution as it arose outside the collective agreement. This court relied on the absence of an ultimate remedy at arbitration as an important factor in concluding that the principle of exclusive jurisdiction precluding court action was inapplicable.

[20] The contrary view is that, at least under the PSSRA, the principle applies even in the absence of an ultimate remedy at arbitration. With deference to this view, most eloquently put by Evans J.A. in his concurrence in Vaughan v. Canada, 2003 FCA 76, [2003] F.C.J. No. 241 (QL), 224 D.L.R. (4th) 640 (C.A.), I would disagree with this approach. To apply the principle of exclusive jurisdiction if the result is that there is no ultimate remedy available either at arbitration or in court risks having a right without an effective remedy. In my view the legislature should be presumed to have effected such a result only if it has said so very clearly. Parliament has not done so in the PSSRA.

[21] These considerations can in effect be consolidated by asking whether, considering the facts of the dispute, the language of [page618] the collective agreement, and the effectiveness of the remedy provided by the arbitration mechanism, this is the kind of dispute that the parties intended to be finally resolved there. If so, the principle of exclusive jurisdiction applies to exclude court action. Determining the essential character of the dispute in this way is consistent with the reality that the terms of the collective agreement both as to substance and as to dispute resolution reflect the shared intention of the parties. It provides some assurance that the disputes to be exclusively resolved by arbitration are ones that the process was designed to deal with.

[22] It remains to determine, in light of these considerations, whether the essential character of this dispute triggers the application of the exclusive jurisdiction principle.

[23] The facts raise a complaint by individuals who are acknowledged to be covered by the collective agreement. Their complaint is against their employer and its executive team and concerns the way the workplace was run by management. The facts centre on an alleged covert operation to stop contraband entering Kingston Penitentiary which employed methods that the appellants say poisoned their work environment and caused them physical and emotional harm. These allegations clearly engage the employer's obligation in Article 18 of the collective agreement to make reasonable provisions for the occupational safety and health of the employees.

[24] The same reasoning makes it equally clear that the ambit of Article 18 extends to the facts which the appellants say underpin this dispute. The employer's obligation under the collective agreement to maintain a safe workplace is directly implicated by the covert operation and its consequences for the appellants as described in the statement of claim.

[25] If this dispute were arbitrated and a breach of the collective agreement were established, the remedy at arbitration would undoubtedly include compensation to injured employees who grieved. That would remedy the wrong in very much the same way as would an award of damages in a court action. There would be no deprivation of ultimate remedy.

[26] Finally, looked at holistically, it seems to me that this is precisely the kind of dispute that the parties intended to be finally resolved by arbitration when they agreed to Article 18. The facts involve a workplace dispute between union members and management. The collective agreement sets out an obligation that fits the problem with some precision. And arbitration can provide an effective remedy. In these circumstances, the essential character of the dispute entails that the principle of [page619] exclusive jurisdiction apply. The court thus has no power to entertain an action based on this dispute.

[27] In summary, I agree with the result reached by the motions judge. I would dismiss the appeal with costs on a partial indemnity basis fixed at $4,000 inclusive of disbursements.

Appeal dismissed.