Court of Appeal for Ontario

Date: February 23, 2018

Docket: C63850

Judges: Sharpe, Epstein and van Rensburg JJ.A.

Parties

Between

Ontario Nurses' Association

Applicant (Respondent)

and

Toronto East General Hospital and Felicity Briggs, Arbitrator

Respondents (Appellant)

Counsel

For the Appellant: Kate A. Hughes, Danielle Bisnar and Simran Prihar

For the Respondent: David A. Stamp and Allan Wells

Hearing

Heard: November 21, 2017

On appeal from: The judgment of the Divisional Court (Justices Michael R. Dambrot, I.V.B. Nordheimer and George W. King), dated November 24, 2016, with reasons reported at 2016 ONSC 7331, granting judicial review of a decision of Arbitrator Felicity Briggs, dated September 16, 2014.

By the Court

Overview

[1] This appeal concerns a labour arbitrator's interpretation of a collective agreement to which the appellant, the Ontario Nurses Association (the "ONA"), and the respondent, the Toronto East General Hospital (the "Hospital"), are parties. The underlying dispute arose out of the Hospital's decision to close a number of beds in one of its units. The closure reduced the number of hours of work available for the Hospital's regular part-time nurses ("RPT nurses"). The Hospital spread the reduction in hours across the schedules of all RPT nurses on the unit, regardless of their seniority. The ONA filed a grievance alleging, among other things, that the Hospital had breached the collective agreement's lay-off provisions, which defined a lay-off as a "reduction in a nurse's hours of work".

[2] A labour arbitrator agreed with the ONA's position and allowed the grievance. The Divisional Court set aside the arbitrator's award on judicial review, reasoning that since the Hospital had no obligation to provide work to RPT nurses, a reduction in their working hours could not amount to a lay-off.

[3] On appeal, the ONA submits the Divisional Court erred in overturning the arbitrator's decision. We agree and would allow the appeal, for the reasons that follow.

Facts

The Collective Agreement

[4] The collective agreement in question consists of two parts: centrally negotiated provisions (the "Central Agreement") and locally negotiated provisions (the "Local Agreement"). The Central Agreement is negotiated between the ONA and the Ontario Hospital Association ("OHA") on behalf of 133 participating hospitals, including the Hospital. The Local Agreement is negotiated directly between the Hospital and the ONA.

[5] Two aspects of the collective agreement are central to this appeal – its classification of nurses, and its lay-off provisions.

Classification of Nurses

[6] The collective agreement distinguishes between full-time, regular part-time and casual nurses. Article 2.04 of the Central Agreement defines a full-time nurse as "a nurse who is regularly scheduled to work the normal full-time hours referred to in Article 13." Article 13, in turn, provides that:

The following provision designating regular hours on a daily tour and regular daily tours over the nursing schedule determined by the Hospital shall not be construed to be a guarantee of the hours of work to be performed on each tour or during each tour schedule.

(a) The normal daily tour shall be seven and one-half (7 1/2) consecutive hours in any twenty-four (24) hour period exclusive of an unpaid one-half (1/2) hour meal period

(c) The regular daily tours of duty of a full-time nurse shall average five (5) days per week over the nursing schedule determined by the Hospital. Full-time schedules shall be determined by local negotiation [Emphasis Added].

[7] A RPT nurse, as defined in Article 2.05, "regularly works less than the normal full-time hours referred to in Article 13 and ... offers to make a commitment to be available for work on a regular predetermined basis … [which] shall be determined in local negotiations." That "regular predetermined basis" is outlined in Article D.4 of the Local Agreement, which stipulates, among other things, that a RPT nurse must be available to work the number of shifts and hours "as stated in the posting notice" advertising the nurse's position issued by the Hospital. Article D.4(7) states that RPT nurses "may be scheduled up to their commitment", and may be offered additional shifts up to full-time hours "[w]hen all part-time nurses have been scheduled to their commitment."

[8] Casual nurses are defined in the collective agreement as part-time nurses that do not meet the criteria for regular-part time status. The Hospital is prohibited under Article D.7(1) of the Local Agreement from utilizing any casual nurses until all RPT nurses have been scheduled up to their commitments.

Lay-Off Provisions

[9] Article 10.08(a) of the Central Agreement defines a layoff as including "a reduction in a nurse's hours of work and cancellation of all or part of a nurse's scheduled shift." The collective agreement places several procedural obligations on the Hospital with respect to lay-offs. Among other requirements, Article 10.09(a) provides that "nurses shall be laid off in the reverse order of seniority provided that the nurses who are entitled to remain on the basis of seniority are qualified to perform the available work." Article 10.09(b)(iii)(C) bars the Hospital from reducing a nurse's hours of work to "prevent or reduce the impact of a layoff", unless it has the ONA's consent.

Events Giving Rise to the Grievance

[10] As noted above, the ONA's grievance stemmed from the closure of eleven beds in a unit at the Hospital, which reduced the hours of work available for RPT nurses. Following the closure, the Hospital scheduled its RPT nurses below their work commitments, without regard for seniority and without complying with the collective agreement's lay-off provisions. The ONA argued that the Hospital's scheduling decisions breached the collective agreement. The matter proceeded to arbitration.

Previous Decisions

The Arbitrator's Decision

[11] The parties agreed to bifurcate the arbitration hearing and elected not to call evidence. At the first stage of the hearing, the parties posed two questions to the arbitrator concerning the proper interpretation of the collective agreement:

(a) Does the collective agreement require the Hospital to schedule a [RPT nurse] up to his/her commitment to be available, regardless of whether the hours of work are available? [the "First Question"]

(b) Where a [RPT nurse] is scheduled less than his or her commitment to be available and has been scheduled up to his or her commitment on a previously posted schedule, does the scheduling of a [RPT nurse] on a subsequently posted schedule below his or her commitment to be available constitute a layoff? [the "Second Question"]

[12] With respect to the First Question, the arbitrator held that the Hospital had no obligation to provide RPT nurses with work that was not available, but noted at para. 38 that "where the Hospital fails to schedule a [RPT nurse] up to her commitment, there may be [c]ollective [a]greement provisions that are triggered." The arbitrator also observed that "the situation in this case ... is not one where there are no available hours of work. There is still work to be done by [RPT nurses]. There is less work because of the bed closures, but there is still available work."

[13] Turning to the Second Question, the arbitrator concluded that the Hospital had triggered the collective agreement's lay-off provisions by reducing the working hours of its RPT nurses without regard for seniority. In reaching this conclusion, the arbitrator rejected the Hospital's submission that the collective agreement provides no "benchmark" to measure a reduction in working hours for RPT nurses, for two reasons.

[14] First, the arbitrator was "not convinced" that a contractual benchmark was necessary – presumably, because the Second Question referred only to nurses who had previously been scheduled up to their commitments.

[15] Second, the arbitrator found that in any event, the collective agreement sets out an appropriate benchmark for measuring a reduction in a RPT nurse's working hours: the "hours for which each RPT [nurse] has committed to work" as reflected in the job postings for regular part-time positions issued by the Hospital. In support of this conclusion, the arbitrator noted that Article D.7 of the Local Agreement obliges the Hospital to schedule RPT nurses to their commitments before using casual nurses. The arbitrator also observed that RPT nurses can be considered for "additional" tours after being scheduled to commitment, suggesting that the commitment constitutes a baseline measure of regular working hours.

[16] The arbitrator found further support for her conclusion in arbitral jurisprudence emphasizing that this particular collective agreement cannot be interpreted so as to remove any meaningful distinction between RPT nurses and casual nurses. Recognizing an unrestricted right for the Hospital to reduce the working hours of RPT nurses would have precisely that effect, in the arbitrator's view. The arbitrator also held that by reducing RPT nurses' working hours to avoid laying off junior nurses, the Hospital had infringed Article 10.09(b)(iii)(C) of the collective agreement, which prohibited any "reduction in the hours of work … to prevent or reduce the impact of a layoff''. In her opinion, the "Hospital's desire for more flexibility … [did] not override the seniority rights or nurses as set out in the [c]ollective [a]greement."

[17] For these reasons, the arbitrator answered the Second Question in the affirmative and allowed the grievance. She agreed to remain seized to reconvene, if necessary, to determine an appropriate remedy.

The Divisional Court's Decision

[18] The Divisional Court acknowledged that the applicable standard of review was reasonableness. The Court found the arbitrator's decision to be unreasonable, for two reasons.

[19] First, the Divisional Court held that the arbitrator's answers to the First and Second Questions were "internally inconsistent". In the Court's view, the arbitrator's answer to the First Question correctly established that RPT nurses were not guaranteed work under the collective agreement. Given that conclusion, the Court reasoned that "an employee cannot be fairly characterized as being laid off, when the employer does not provide work." The arbitrator took a different view in her answer to the Second Question and, in the Court's view, thereby created an "absurdity" where the Hospital would be "saddled with the layoff obligations and costs, prescribed in the collective agreement, for failing to provide the very work that it is not contractually required to provide."

[20] Second, the Divisional Court determined that the arbitrator's answer to the Second Question was "at odds with the deal that the parties made in their collective agreement." The Court reasoned that the arbitrator's ruling nullified the clear intent of Article 2.05 by "elevat[ing] what was clearly intended to be a flexible system, by which the [Hospital] would assign work to part-time nurses, to an absolute entitlement to work." The Divisional Court dismissed, as irrelevant, the fact that RPT nurses had previously been regularly scheduled up to the level of their commitment. In the Court's opinion, "[t]he fact that work has been provided in the past does not alter the clear wording of Article 2.05, or the fundamental nature of the work arrangement .... [t]he fact remains that when it comes to part-time nurses, the [Hospital] is entitled to provide work to them, or not, as the [Hospital] chooses."

[21] The Court therefore set aside the arbitration award, "insofar as it held that the lay-off provisions of the collective agreement were triggered by the actions of the [Hospital]", and remitted the matter to the arbitrator.

Issues

[22] The ONA raises one issue on appeal: whether the Divisional Court erred by finding that the arbitrator's award was unreasonable.

Analysis

Standard of Review

[23] When sitting on an appeal from a judicial review, this court must determine whether the reviewing court properly identified and applied the appropriate standard of review: Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36, [2013] 2 S.C.R. 559, at paras. 45-47.

[24] The parties submit that the arbitrator's decision warranted review on a standard of reasonableness. We agree. The arbitrator's interpretation of the collective agreement falls squarely within her area of expertise and is owed deference: Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, at para. 68; Wilson v. Atomic Energy of Canada Ltd., 2016 SCC 29, [2016] 1 S.C.R. 770, at para. 15; Association of Justice Counsel v. Canada, 2017 SCC 55, 415 D.L.R. (4th) 191, at para. 47. The Divisional Court had to determine whether the arbitrator's decision "falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law": Dunsmuir, at paras. 47; Stewart v. Elk Valley Coal Corp., 2017 SCC 30, [2017] 1 S.C.R. 591, at para. 27. In conducting this inquiry, the Divisional Court had to pay "respectful attention to the [arbitrator's] reasoning process", and consider whether there are any lines of analysis in her reasons that could have reasonably led to her conclusion: Law Society of New Brunswick v. Ryan, 2003 SCC 20, [2003] 1 S.C.R. 247, at para. 55; Elk Valley Coal Corp., at para. 27.

[25] As the Divisional Court correctly identified the applicable standard of review as reasonableness, this appeal turns on whether the Court properly applied that standard.

The Parties' Submissions

[26] The ONA submits that the Divisional Court erred in finding the arbitrator's answer to the Second Question to be unreasonable. The arbitrator's answers to the First and Second Questions are consistent, as the two questions address different scenarios – one, where no work is available, and the other, where there is "less" work to be done. The ONA further contends that the arbitrator's answer to the Second Question is consistent with the terms of the parties' collective agreement. The arbitrator, the ONA argues, reasonably concluded that the Hospital's refusal to schedule RPT nurses up to their commitments constituted a "reduction of … hours of work" that triggered the agreement's lay-off provisions. By substituting its own interpretation for that of the arbitrator, the Divisional Court, in the ONA's view, ignored three lines of analysis reasonably capable of supporting her conclusion:

(a) No contractual benchmark was necessary to apply the lay-off provisions, as the Second Question referred only to RPT nurses who had been scheduled up to their commitment on a previously posted schedule.

(b) A RPT nurse's commitment, as reflected in the job posting advertising his or her position, constitutes an acceptable contractual benchmark. While a RPT nurse's commitment does not amount to a guarantee of work, no nurses – full or part-time – are guaranteed work under the collective agreement. Accordingly, a guarantee of work cannot be a pre-requisite for applying the lay-off provisions.

(c) The Hospital breached Article 10.09(b)(iii)(C) by reducing the working hours of all RPT nurses without regard to seniority, to avoid laying off the most junior RPT nurses.

[27] In response, the Hospital submits that the Divisional Court correctly concluded that the arbitrator's answers to the First and Second Questions cannot be reconciled. Nor, argues the Hospital, can her answer to the Second Question be squared with Article D.4(7) of the Local Agreement, which provides that a RPT nurse " may be scheduled up to their commitment". The permissive language employed in this clause is particularly probative given the mandatory language used in other provisions of the collective agreement, where the parties clearly intended to remove the Hospital's flexibility with respect to scheduling RPT nurses. These considerations, in the Hospital's view, render the arbitrator's decision unreasonable.

Was the Arbitrator's Decision Reasonable?

[28] In our respectful view, neither of the Divisional Court's justifications for overturning the arbitrator's decision can withstand scrutiny.

1. The Arbitrator's Answers are Internally Consistent

[29] The arbitrator answered the First Question in two parts. She found that the Hospital "is not obliged to schedule a [RPT] nurse to the level of her commitment if the hours of work are not available." She then qualified her finding, noting that "where the Hospital fails to schedule a [RPT] nurse up to her commitment, there may be Collective Agreement provisions that are triggered. This is addressed more fully by the second question" (emphasis added).

[30] We see no inconsistency between this answer and the arbitrator's answer to the Second Question. Neither answer imposes on the Hospital an obligation to schedule RPT nurses up to their commitments when there is no work available. We respectfully disagree with the Divisional Court that the arbitrator's refusal to recognize such an obligation in her answer to the First Question precluded her answer to the Second Question. As the arbitrator noted at para. 39, the Second Question addressed a different scenario than the First – one where "less work" was available for RPT nurses, as opposed to "no work".

[31] In any event, we do not read the arbitrator's answer to the Second Question as imposing an "obligation" on the Hospital to schedule RPT nurses to commitment. As we explain below, her answer merely recognizes that if the Hospital exercises its discretion to schedule RPT nurses below their commitment, it must comply with the collective agreement's lay-off provisions – a logical extension of the arbitrator's answer to the First Question, which recognized that "where the Hospital fails to schedule a [RPT] nurse up to her commitment, "there may be [c]ollective [a]greement provisions that are triggered." These answers are entirely consistent and do not create the absurdity described by the Divisional Court.

2. The Arbitrator's Answer to the Second Question is Consistent with the Collective Agreement

[32] In our respectful view, the Divisional Court placed undue focus on whether the collective agreement guarantees work to RPT nurses. Instead, the Court should have considered whether the collective agreement provides a benchmark to measure a "reduction in a [RPT] nurse's hours of work", thereby permitting resort to the lay-off provisions.

[33] The Divisional Court's focus on a guarantee of work was misplaced because, as the arbitrator recognized, the lay-off provisions can apply to nurses who are not guaranteed work under the collective agreement. Both parties agree that no nurses – full or part-time – are guaranteed work under the agreement. Article 13.01, which governs the working hours of full-time nurses, explicitly states that their "normal full-time hours" shall not "be construed to be a guarantee of … hours of work". And yet, there is no dispute that the lay-off provisions will be triggered if a full-time nurse is scheduled below "normal full-time hours". Evidently, while the agreement does not provide full-time nurses with a guarantee of work, neither does it grant the Hospital unfettered discretion to schedule those nurses below their "normal full-time hours". The Divisional Court, with respect, erred by failing to consider whether that logic could reasonably be extended to RPT nurses.

[34] The Hospital's submissions on appeal also place undue emphasis on the absence of a guarantee of work for RPT nurses. This is most evident in the Hospital's primary submission on appeal – that the arbitrator failed to give effect to clear, permissive language within the collective agreement indicating that RPT nurses "may" be scheduled up to their commitment. As explained above, however, the provisions of the agreement relevant to scheduling full-time nurses are also permissive, but nonetheless constrained by the agreement's lay-off provisions. The relevant question, therefore, is whether the lay-off provisions similarly constrain the Hospital's discretion to schedule RPT nurses below commitment. For the lay-off provisions to have such an effect, there must be some benchmark – within the agreement or otherwise – against which to measure a "reduction in a [RPT] nurse's hours of work." In our view, the arbitrator reasonably found that the collective agreement provided such a benchmark. Given this conclusion, we need not consider whether a non-contractual benchmark would also have been suitable in these circumstances.

3. An Appropriate Benchmark

[35] The arbitrator determined that "the hours for which each RPT [nurse] has committed to work" provides a suitable contractual benchmark for applying the lay-off provisions. In our view, this was a reasonable finding.

[36] First, that a RPT nurse's commitment is not a guarantee of work does not preclude its use as a benchmark for applying the lay-off provisions. As explained above, a full-time nurse's "normal full-time hours" provide an appropriate benchmark, even though they are "not to be construed as a guarantee of work". As the Hospital concedes at para. 80 of its factum on appeal, "[a] guarantee of work is not the issue."

[37] Second, the arbitrator's conclusion finds reasonable support in the wording of the collective agreement. To justify her answer to the Second Question, the arbitrator drew upon Article D.7(2) of Local Agreement as well as the posting notices issued by the Hospital, referenced in Article D.4. While these provisions do not guarantee work to RPT nurses, they nonetheless support the conclusion that a RPT nurse's commitment is a meaningful benchmark for the purposes of this agreement, appropriate for use in applying the lay-off provisions. Article 2.05 of the Central Agreement further bolsters the arbitrator's reasoning, as it refers to a RPT nurse's commitment as the "regular pre-determined basis" on which he or she is assigned work. Equating a "regular pre-determined basis" of work with a "benchmark" does not, in our view, give rise to an unreasonable result.

[38] Third, the arbitrator reasonably determined that under the Hospital's proposed interpretation of the agreement, RPT nurses would see their work status "effectively chang[ed] … to casual." The Hospital objects to this finding, noting that RPT nurses, unlike casual nurses, benefit from knowing their work schedules in advance. The fact remains, however, that the Hospital's favoured interpretation of the lay-off provisions significantly erodes the distinction between the two types of nurses, even if it does not eliminate the distinction entirely. As the arbitrator noted, "if the Hospital can – without restriction – reduce or fluctuate the hours of RPT [nurses] there would be nothing prohibiting a reduction of scheduled hours to none." This finding and the inferences the arbitrator drew from it were reasonable and they provide further support for the arbitrator's answer to the Second Question.

[39] Fourth, while not determinative, we note that the arbitrator's approach finds support in other arbitral decisions interpreting analogous lay-off provisions. For example, in St. Vincent de Paul Hospital, Brockville v. C.U.P.E., Local 2491, [2006] O.L.A.A. No. 615, a management rights clause granted the employer hospital the exclusive right to determine the "assignment of working hours" for its employees. Article 14 of the parties' collective agreement stated that full and part-time employees were not guaranteed minimum hours of work. The hospital reduced the hours of work available for three part-time switchboard operators, and spread the reduction in hours among the operators without regard for seniority. The union filed a grievance. The arbitration board found a lay-off had occurred, reasoning at para. 22, that the absence of a guarantee of work was "not determinative of whether the Hospital was required to follow the layoff procedures set out in the collective agreement." The arbitration board's reasoning was subsequently adopted in C.U.P.E., Local 4000 v. Ottawa Hospital (2012), 109 C.L.A.S. 243, at paras. 53-56. These prior decisions "shape the contours of what qualifies as a reasonable decision in this case": Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd., 2013 SCC 34, [2013] 2 S.C.R. 458, at para. 76.

[40] Fifth, we agree with the appellant that the arbitrator's decision reflects appropriate concern for the seniority rights of RPT nurses. Various provisions in the collective agreement underscore the importance of RPT nurses' seniority rights, including clauses addressing negotiations, committee membership, professional development, probation and termination. Under the Hospital's proposed interpretation of the agreement, however, RPT nurses would see the value of their seniority significantly diminished. The arbitrator, in our view, reasonably chose to avoid this outcome in interpreting the agreement's lay-off provisions. As noted in the oft-cited decision U.E., Local 512 v. Tung-Sol of Canada Ltd., [1964] O.L.A.A. No. 9, at para. 4:

Seniority is one of the most important and far-reaching benefits which the trade union movement has been able to secure for its members by virtue of the collective bargaining process … It follows, therefore, that an employee's seniority should only be affected by very clear language in the collective agreement concerned and that arbitrators should construe the collective agreement with the utmost strictness wherever it is contended that an employee's seniority has been forfeited, truncated or abridged under the relevant sections of the collective agreement [Emphasis Added].

[41] Those observations are apposite here. Given the clear importance of RPT nurses' seniority rights to the collective agreement as a whole, it was eminently reasonable for the arbitrator to conclude that those rights are not "truncated or abridged" under the agreement's lay-off provisions.

[42] The Hospital takes issue with this reasoning, arguing that its position "does not erode seniority rights because the Collective Agreement does not require the scheduling of [RPT] nurses up to their commitment on the basis of seniority." With respect, this submission begs the question. What the collective agreement requires in terms of scheduling RPTs up to their commitment was the very question the arbitrator had to decide. Presented with multiple possible answers, she reasonably chose the one that better reflected the high value the collective agreement places on RPT nurses' seniority rights. We see no basis to interfere with that choice.

[43] We add one point on the issue of seniority, relevant to the parties' submissions on Article 10.09(b)(iii)(C) of the collective agreement. We agree with the Hospital that, by itself, this provision does not establish whether RPT nurses were laid off when scheduled below their commitment. However, as we are satisfied that the arbitrator's answer to the Second Question was reasonably based on the wording and purpose of the collective agreement viewed as a whole, we see no reason to disturb her finding that the Hospital's actions contravened s. 10.09(b)(iii)(C).

[44] We conclude by addressing two further objections by the Hospital to the arbitrator's reasoning. Neither, in our view, justifies overturning her decision.

[45] First, the Hospital submits the job posting notices the arbitrator relied on to find a contractual benchmark are ancillary to the collective agreement. We disagree. The posting notices are clearly incorporated into the collective agreement by Article D-4 of the Local Agreement, which, as explained above, states that "the predetermined basis upon which a regular part-time employee's commitment to be available shall be made as follows … (1) [a]vailable to work the number of shifts and hours (day/night/evening) as stated in the posting notice " (emphasis added).

[46] Second, the Hospital argues that the arbitrator's interpretation fails to give effect to Article D.7(1) of the Local Agreement, which specifies that the Hospital must schedule RPT nurses up to commitment before utilizing casual nurses. If RPT nurses must always be scheduled to commitment, the Hospital argues, Article D.7(1) need not have been included in the agreement.

[47] We do not agree with this submission. The arbitrator's answer to the Second Question does not render Article D.7(1) redundant. As explained above, the arbitrator's answer recognizes that the Hospital retains discretion to schedule a RPT nurse below commitment, provided it complies with the lay-off provisions in the collective agreement. However, should the Hospital schedule a RPT nurse below commitment for the purpose of giving shifts to casual nurses, it will presumably be in breach of Article D.7(1) of the collective agreement even if it complies with the lay-off provisions.

[48] Accordingly, we do not agree that the arbitrator's interpretation fails to give effect to Article D.7(1), or any other provision of the collective agreement. Her answer to the Second Question falls well within the range of outcomes "defensible in respect of the facts and the law."

Disposition

[49] The appeal is allowed, the decision of the Divisional Court is set aside and the arbitrator's decision is restored. The ONA is entitled to its costs of this appeal fixed in the amount of $9,000. The ONA is also entitled to $5,000 for the costs of the application before the Divisional Court. Both amounts are inclusive of disbursements and applicable taxes.

Released: February 23, 2018

"Robert J. Sharpe J.A."

"Gloria Epstein J.A."

"K. van Rensburg J.A."

Footnote

[1] See also: Teamsters, Local 938 v. Lakeport Beverages (2005), 77 O.R. (3d) 543 (C.A.), at para. 56.