Ontario Public Service Employees Union v. Seneca College of Applied Arts & Technology et al. [Indexed as: Ontario Public Service Employees Union v. Seneca College of Applied Arts and Technology]
73 O.R. (3d) 185
[2004] O.J. No. 4440
Divisional Court File No. 385/02
Ontario Superior Court of Justice,
Divisional Court
O'Driscoll, MacFarland and Swinton JJ.
November 1, 2004
Administrative law -- Judicial review -- Standard of review -- Standard of review of decision of Board of Arbitration that it did not have [page186] jurisdiction to award aggravated and punitive damages to grievor after finding that employer dismissed him without just cause being that of correctness.
Employment -- Labour relations -- Grievance arbitration -- Jurisdiction -- Grievor seeking aggravated and/or punitive damages for defamation, loss of dignity and injury to personal feelings arising from unjust dismissal -- Board of Arbitration finding that grievor was unjustly dismissed but that it did not have jurisdiction to award aggravated and/or punitive damages -- Union's application for judicial review allowed -- Essential character of dispute before Board being unjust dismissal and appropriate remedy therefor -- Issue of aggravated and/or punitive damages constituting dispute arising directly or inferentially from collective agreement -- Issue being within exclusive jurisdiction of Board.
The grievor was dismissed for allegedly sending anti-Semitic material to the employer's Director of Employee Relations. The union grieved the discharge. The grievance asked that the grievor be reinstated and fully compensated in damages for defamation, loss of dignity and injury to personal feelings. In its First Award, the Board of Arbitration voided the termination of the grievor's employment and ordered his reinstatement with full compensation. The union sought aggravated damages to compensate the grievor for the "special harm, including mental distress" that he suffered in the "egregious circumstances" of his termination and also sought punitive damages to deter the employer from similar conduct, which the union claimed was motivated by the employer's bad faith, malice and anti-union animus. In its Second Award, the Board held that the collective agreement did not expressly prohibit tortious conduct, so that the essential conduct giving rise to the dispute did not arise out of the collective agreement; that the conduct giving rise to the dispute did not arise inferentially out of the collective agreement because the document did not contain a provision that indicated the grievance process covered tortious wrongdoing, and that it had no jurisdiction to award aggravated and/or punitive damages. The union brought an application for judicial review of the Second Award.
Held, the application should be granted.
The decision of the Board that it did not have jurisdiction to award aggravated and/or punitive damages to the grievor following a finding that the employer contravened the collective agreement when it dismissed the grievor without just cause was a question of law and a question of jurisdiction. The Board was required to decide that issue. The standard of review of that decision was one of correctness.
When the grievor was discharged, his only option was to go to the union and have it grieve what was alleged to be a dismissal without cause. The grievance alleged a "contravention" of the collective agreement, as that term is used in s. 46(1) of the Colleges Collective Bargaining Act, R.S.O. 1990, c. C.15, in the form of an unjust dismissal, and sought reinstatement, compensation for lost salary and benefits and compensation for defamation, loss of dignity and injury to personal feelings. The essential character of the dispute was an unjust dismissal and its appropriate remedy. The issue of aggravated and/or punitive damages was a dispute between the parties arising either directly or inferentially from the collective agreement. It was, therefore, within the exclusive jurisdiction of the Board. It is well established that labour arbitrators have broad remedial power, including the power to award damages. [page187]
Allen v. Alberta, 2003 SCC 13, [2003] 1 S.C.R. 128, 5 W.W.R. 193; Dayco (Canada) Ltd. v. National Automobile, Aerospace and Agricultural Implement Workers Union of Canada, 1993 144 (SCC), [1993] 2 S.C.R. 230, 13 O.R. (3d) 164n, 102 D.L.R. (4th) 609, 152 N.R. 1, 93 C.L.L.C. para. 14,032; Gaignard v. Canada (Attorney General) (2003), 2003 40299 (ON CA), 67 O.R. (3d) 611, 232 D.L.R. (4th) 43, 2004 C.L.L.C. para. 220-012, [2003] O.J. No. 3998 (C.A.); Giorno v. Pappas (1999), 1999 1161 (ON CA), 42 O.R. (3d) 626, 170 D.L.R. (4th) 160, 39 C.C.E.L. (2d) 262, 99 C.L.L.C. para. 220-026 (C.A.); Oil, Chemical & Atomic Workers & Polymer Corp. Ltd. (Re) (1959), 10 L.A.C. 51; Parry Sound (District) Social Services Administration Board v. Ontario Public Service Employees Union, Local 324, [2003] 2 S.C.R. 157, 230 D.L.R. (4th) 257, 308 N.R. 271, 2003 SCC 42, 31 C.C.E.L. (3d) 1, [2003] S.C.J. No. 42; Royal Oak Mines Inc. v. Canada (Labour Relations Board), 1996 220 (SCC), [1996] 1 S.C.R. 369, [1996] N.W.T.R. 1, 133 D.L.R. (4th) 129, 193 N.R. 81, 96 C.L.L.C. para. 210-011; Toronto (City) v. Canadian Union of Public Employees, Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77, 232 D.L.R. (4th) 385, affg (2001), 2001 24114 (ON CA), 55 O.R. (3d) 541, [2001] O.J. No. 3239, 205 D.L.R. (4th) 280, 2002 C.L.L.C. para. 220-014, 45 C.R. (5th) 354 (C.A.), affg (2000), 2000 30193 (ON SCDC), 187 D.L.R. (4th) 323, 2000 C.L.L.C. para. 220-038 (Ont. S.C.J.) (sub nom. Toronto v. C.U.P.E., Local 79); Vorvis v. Insurance Corp. of British Columbia, 1989 93 (SCC), [1989] 1 S.C.R. 1085, 36 B.C.L.R. (2d) 273, 58 D.L.R. (4th) 193, 94 N.R. 321, [1989] 4 W.W.R. 218, 42 B.L.R. 111, 25 C.C.E.L. 81, 90 C.L.L.C. para. 14,035; Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595, 209 D.L.R. (4th) 257, 283 N.R. 1, [2002] I.L.R. para. 1-4048, 2002 SCC 18, 20 B.L.R. (3d) 165, [2002] S.C.J. No. 19
APPLICATION for a judicial review of an award of a board of arbitration.
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. 210-027, apld Other cases referred to Statutes referred to Colleges Collective Bargaining Act, R.S.O. 1990, c. C.15, ss. 46(1), (5), 84(1) Labour Relations Act, R.S.O. 1990, c. L.2 [repealed S.O. 1995, c. 1], s. 45(1)
N.S. Coleman and C.V. Jones, for O.P.S.E.U. C.G. Riggs, Q.C., for respondent Seneca College.
The judgment of the court was delivered by
O'DRISCOLL J.: --
I. Nature of the Proceedings
[1] The applicant, Ontario Public Service Employees Union (the "Union"), has brought an application for judicial review and seeks:
(a) an order quashing the "Second Award" of the tripartite grievance Board of Arbitration (the "Board"), dated December 4, 2001, and [page188]
(b) an order remitting the matter back to the Board for reconsideration in accordance with the reasons of the court.
II. Background
[2] Mr. Larry Olivo, a lawyer and a professor at Seneca College ("Seneca"), was discharged on February 10, 1998 for allegedly sending Mr. Melvin Fogel, Seneca's Director of Employee Relations, written material that was personally focused on Mr. Fogel"who describes himself as being of the Jewish faith". The written material was anti-Semitic and disturbing. The delivery of these offensive materials was alleged to have taken place in the years 1990, 1991, 1992 and 1995.
[3] The academic employees of Seneca were and are represented by O.P.S.E.U., Local 560 (the "Union"). Before Mr. Fogel took on his managerial role for Seneca in 1987, he had, for many years, been president of Local 560. From 1996 until his discharge, Mr. Olivo was the Vice-President of the Union.
[4] The relationship between the Union and Seneca had been strained for some time; it deteriorated in 1997. It worsened even more when Mr. Fogel, funded by Seneca, launched a defamation action against Mr. Olivo and others.
[5] The only evidence connecting Mr. Olivo to the offensive written material was the fact that two (2) documents received by Mr. Fogel in 1990 and 1991 were delivered in reusable, inter-departmental envelopes which Seneca alleged were addressed to Mr. Fogel in the handwriting of Mr. Olivo. In their respective positions, the two (2) men had regular written contact through inter-departmental mail.
[6] No action was taken by Seneca against Mr. Olivo until seven to eight years after Mr. Fogel received the offensive material in 1990-1991.
[7] After his dismissal on February 10, 1998, the Union grieved the discharge in a document which said, in part:
STATEMENT OF GRIEVANCE
I have been unjustly dismissed by the College. This action has been taken in bad faith and with malice. It is arbitrary, unfair and motivated in part by my activities as a union member and representative.
SETTLEMENT REQUIRED
-- That I be fully reinstated without loss of salary, benefits, seniority, or employment status
. . . . . [page189]
-- That I be fully compensated in damages for defamation, loss of dignity, and injury to personal feelings.
[8] Commencing in 1998, the tripartite Board held 12 days of hearings over 1 1/2 years.
[9] In its First Award, dated May 25, 2000, the Board:
(a) unanimously voided the February 10, 1998 termination of Mr. Olivo's employment, and
(b) unanimously reinstated Mr. Olivo with "full compensation, inclusive of seniority benefits" and
(c) by agreement of the parties, the Board remained seized with respect to the Union's claim for aggravated damages in the sum of $5,000 and punitive damages in the sum of $5,000 as well as regarding the implementation of the Award.
[10] The Union sought aggravated damages to compensate Mr. Olivo for the "special harm, including mental distress", that he suffered in the "egregious circumstances of his unwarranted termination". The Union also sought "punitive damages" to deter Seneca from similar conduct that the Union claims was motivated by Seneca's bad faith, malice and anti-union animus (see applicant's Factum, para. 12).
[11] On October 29, 2001, the Board heard submissions from the parties respecting aggravated and punitive damages.
[12] In its Second Award, dated December 4, 2001, the subject matter of this judicial review, the majority of the Board:
(a) rejected the Union's claim by concluding that it had no jurisdiction to award aggravated and/or punitive damages, and
(b) held that the Collective Agreement did not expressly prohibit tortious conduct and thus, the essential conduct giving rise to the dispute did not arise out of the Collective Agreement, and
(c) held that the conduct giving rise to the dispute did not arise inferentially out of the Collective Agreement because that document did not contain a provision that indicated the grievance process covered tortious wrongdoing, and
(d) held that the rules set out in the decision of the Supreme Court of Canada in Weber v. Ontario Hydro, 1995 108 (SCC), [1995] 2 S.C.R. 929, 125 D.L.R. (4th) 583 [page190] were not applicable to the Collective Agreement and issues under consideration.
[13] The majority of the Board (P.C. Picher, Chair, and R.J. Gallivan) summarized their position in the "Addendum of Majority", dated December 4, 2001:
Indeed, the decision in Weber expressly confirms that the ability to deal with what might otherwise be a tort must flow from the collective agreement. In that case, the Court placed particular weight on the fact that the employees under that collective agreement had an express right to grieve "unjust treatment", a protection that the Court interpreted as extending to surveillance and the invasion of privacy. In its essence, Weber confirms that if a board of arbitration is to exercise jurisdiction to award damages for tortious wrongdoing, its authority to do so must arise from the collective agreement.
We have been directed to nothing in the instant collective agreement that would ground such extraordinary jurisdiction. Moreover, if, as the dissent suggests, a court might decide to not entertain an action by Mr. Olivo in tort against Mr. Fogel or the College merely because a collective agreement was in place, that court would plainly fail to understand and properly apply the decision of the Supreme Court in Weber.
III. Issues
A. What is the standard of review applicable to the Board's decision in the Second Award that it lacked jurisdiction to award aggravated and/or punitive damages?
[14] In Dayco (Canada) Ltd. v. National Automobile, Aerospace and Agricultural Implement Workers Union of Canada, 1993 144 (SCC), [1993] 2 S.C.R. 230, 102 D.L.R. (4th) 609, at p. 249 S.C.R., p. 619 D.L.R., La Forest J. said:
. . . the real question is whether the arbitrator was acting within his jurisdiction. On this point, I must respectfully differ from the conclusion of Blair J.A. in the court below. In my view the arbitrator was not acting within his jurisdiction stricto sensu. Rather he was deciding upon jurisdiction. As such, he was required to be correct.
[Emphasis in original]
[15] In Royal Oak Mines Inc. v. Canada (Labour Relations Board), 1996 220 (SCC), [1996] 1 S.C.R. 369, 133 D.L.R. (4th) 129, at p. 405 S.C.R., pp. 152-53 D.L.R., Cory J. (for the majority) said:
The Canada Labour Relations Board has been granted the power to impose remedies by s. 99(2) of the Code. Thus, the question as to whether the Board may or may not impose remedies on the parties is jurisdictional in nature. If the Board concluded that it could not impose a remedy to counteract a breach by one of the parties, the aggrieved party would have the right to argue before a reviewing court that the Board had incorrectly interpreted its enabling statute. The court, in addressing this jurisdictional question, would then [page191] be entitled to review the Board's decision, on a correctness standard, to determine whether in fact the Board did have the power it claimed to lack. However, once it has been established by the provisions of the empowering legislation that the Board does, in fact, have the jurisdiction to order certain remedies, the question of which of these remedies the Board chooses to impose in any given situation is a question within the Board's jurisdiction. Since the Board's order falls within its jurisdiction, it should be assessed on a patently unreasonable basis.
[16] In Toronto (City) v. Canadian Union of Public Employees, Local 79 (2001), 2001 24114 (ON CA), 55 O.R. (3d) 541,[2001] O.J. No. 3239 (C.A.), affd 2003 SCC 63, [2003] 3 S.C.R. 77, 232 D.L.R. (4th) 385, Doherty J.A., in giving the judgment of the Court of Appeal for Ontario, said at pp. 554-55 O.R.:
The arbitrator's decision turned on his understanding of the common law principles derived from judge-made law having no special application in the labour law field. While arbitrators are no doubt competent to apply common law principles and must do so on a daily basis, they have no special expertise in that area.
. . . I find nothing in the applicable legislation or in the terms of this collective bargaining agreement that would suggest that the legislature or the parties intended that the courts, as guardians of the common law, should defer to the arbitrator's view of the common law. The court's relative expertise in the determination and application of the principles in issue on this appeal speaks strongly in favour of a correctness standard of review.
[17] In Parry Sound (District) Social Services Administration Board v. Ontario Public Service Employees Union, Local 324, 2003 SCC 42, [2003] 2 S.C.R. 157, 230 D.L.R. (4th) 257, pp. 172-73 S.C.R., p. 268 D.L.R., Iacobucci J. (for the majority) said:
As the Court concluded in Canadian Broadcasting Corp. v. Canada (Labour Relations Board), 1995 148 (SCC), [1995] 1 S.C.R. 157 at pp. 187-88, 121 D.L.R. (4th) 385, there may be instances in which the reasonableness of a tribunal's decision is dependent on it having correctly answered a question of law in the course of reaching that decision. If the critical question that the tribunal must answer is a question of law that is outside its area of expertise and that the legislature did not intend to leave to the tribunal, the tribunal must answer that question correctly.
The question of whether the substantive rights and obligations of the Human Rights Code are incorporated into each collective agreement over which the Board has jurisdiction is not, in my view, a question that the legislature intended to leave to the Board. The Board's expertise does not lie in answering legal questions of general applicability, but, rather, in the interpretation of collective agreements and the resolution of factual disputes related to those agreements. See for example Dayco, supra, at p. 266, and United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., 1993 88 (SCC), [1993] 2 S.C.R. 316 at p. 336, 102 D.L.R. (4th) 402. Determining whether the substantive rights and obligations of an external statute are incorporated into a collective agreement is a legal question of broad applicability that does not fall within an arbitrator's core area of expertise. Although the Board has the power to determine whether the [page192] substa ntive rights and obligations of the Human Rights Code are incorporated into the collective agreement, the Court has the power to interfere if the Board resolved the issue incorrectly.
[18] In my view, based on the authorities cited, the decision of the Board of Arbitration that it did not have jurisdiction to award aggravated and/or punitive damages to the grievor following a finding that Seneca contravened the Collective Agreement when it dismissed the grievor without just cause, is a question of law and a question of jurisdiction. The Board was required to decide the issue. It must be right. The standard of review of that decision is one of correctness.
B. Did the Board have the jurisdiction to award to the grievor aggravated and/or punitive damages?
[19] The Collective Agreement, effective September 1, 1996 to August 31, 2001, has the following articles:
3.02 The Colleges and the Union agree that there will be no intimidation, discrimination, interference, restraint or coercion exercised or practiced by either of them or their representatives or members because of an employee's activity or lack of activity in the Union or because of an employee's filing or not filing a grievance including participation in the workload complaint system.
32.03 Failing settlement of a complaint, it shall be taken up as a grievance (if it falls within the definition under 32.12 C) in the following manner and sequence provided it is presented within seven days of the immediate supervisor's reply to the complaint. It is the intention of the parties that reasons supporting the grievance and for its referral to a succeeding Step be set out in the grievance and on the document referring it to the next Step. Similarly, the College's written decisions at each step shall contain reasons supporting the decision.
In the event that any difference arising from the interpretation, application, administration or alleged contravention of this Agreement has not been satisfactorily settled under the foregoing Grievance Procedures, the matter shall then, by notice in writing given to the other party within 15 days of the date of receipt by the grievor of the decision of the College official at Step Two, be referred to arbitration.
32.07 An employee who claims to have been dismissed without just cause shall, within 20 days of the date of receipt of the written notification of the dismissal, present a grievance in writing to the College President, or in the absence of the College President, the Acting President, commencing at Step Two and the President shall convene a meeting and give the grievor and the Union Steward the President's decision in accordance with the provisions of Step Two of 32.03. [page193]
32.08 If the grievor is not satisfied with the decision of the College President, the grievor shall, within 15 days of receipt of the decision of the College President, or in the absence of the President, the Acting President, by notice in writing to the College, refer the matter to arbitration, as provided in this Agreement.
[20] The parties are governed by the Colleges Collective Bargaining Act, R.S.O. 1990, c. C.15 ("CCBA"). The sections relevant to this case are:
46(1) Every agreement shall provide for the final and binding settlement by arbitration of all differences between an employer and the employee organization arising from the interpretation, application, administration or alleged contravention of the agreement including any question as to whether a matter is arbitrable.
(5) The decision of an arbitrator or of an arbitration board is final and binding upon the employer, employee organization and upon the employees covered by the agreement who are affected by the decision, and such employer, employee organization and employees shall do or refrain from doing anything required of them by the decision.
84(1) No decision, order, determination, direction, declaration or ruling of the Commission, a fact finder, an arbitrator or board of arbitration, a selector or the Ontario Labour Relations Board shall be questioned or reviewed in any court, and no order shall be made or process entered, or proceedings taken in any court, whether by way of injunction, declaratory judgment, certiorari, mandamus, prohibition, quo warranto, application for judicial review or otherwise, to question, review, prohibit or restrain the Commission, fact finder, arbitrator or board of arbitration, selector or the Ontario Labour Relations Board or the proceedings of any of them.
[21] In Weber v. Ontario Hydro, supra, McLachlin J., for the majority of four of a seven-judge court, asked the question: "When and to what extent does s. 45(1) of the Labour Relations Act, R.S.O. 1990, c. L.2 ("LRA") oust the court's jurisdiction?" A comparison of s. 45(1) of the LRA and s. 46(1) of the CCBA shows that one echoes the other.
[22] The now Chief Justice of Canada then reviewed three different views of the effect of final and binding arbitration clauses in labour legislation:
(a) "the concurrent model",
(b) "the model of overlapping jurisdiction", and
(c) "the exclusive jurisdiction model". [page194]
[23] McLachlin J. concludes at para. 49 that models (a) and (b) "fail to meet the test of the statute, the jurisprudence and policy" and said [at paras. 50-59, 61 and 67]:
The final alternative is to accept that if the difference between the parties arises from the collective agreement, the claimant must proceed by arbitration and the courts have no power to entertain an action in respect of that dispute. . . .
On this approach, the task of the judge or arbitrator determining the appropriate forum for the proceedings centres on whether the dispute or difference between the parties arises out of the collective agreement. Two elements must be considered: the dispute and the ambit of the collective agreement.
In considering the dispute, the decision-maker must attempt to define its "essential character" . . . In the majority of cases the nature of the dispute will be clear; either it had to do with the collective agreement or it did not. Some cases, however, may be less than obvious. The question in each case is whether the dispute, in its essential character, arises from the interpretation, application, administration or violation of the collective agreement.
. . . However, a review of decisions over the past few years reveals the following claims among those over which the courts have been found to lack jurisdiction: wrongful dismissal; bad faith on the part of the union; conspiracy and constructive dismissal; and damage to reputation. . . .
This approach does not preclude all actions in the courts between employer and employee. Only disputes which expressly or inferentially arise out of the collective agreement are foreclosed to the courts: . . . Additionally, the courts possess residual jurisdiction based on their special powers, as discussed by Estey J. in St. Anne-Nackawic, [1986 71 (SCC), [1986] 1 S.C.R. 704].
. . . The procedural inconvenience of an occasional application for judicial review is outweighed by the advantages of having a single tribunal deciding all issues arising from the dispute in the first instance. This does not mean that the arbitrator will consider separate "cases" of tort, contract or Charter. Rather, in dealing with the dispute under the collective agreement and fashioning an appropriate remedy, the arbitrator will have regard to whether the breach of the collective agreement also constitutes a breach of a common law duty, or of the Charter.
The appellant Weber also argues that arbitrators may lack the legal power to consider the issues before them. This concern is answered by the power and duty of arbitrators to apply the law of the land to the disputes before them. To this end, arbitrators may refer to both the common law and statutes: . . . .
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.
To summarize, the exclusive jurisdiction model gives full credit to the language of s. 45(1) of the Labour Relations Act. It accords with this court's approach in St. Anne- Nackawic. It satisfies the concern that the dispute resolution process which the various labour statutes of this country have established should not be duplicated and undermined by concurrent actions. It conforms to a pattern of growing judicial deference for the arbitration and grievance process and correlative restrictions on the rights of parties to [page195] proceed with parallel or overlapping litigation in the courts: see Ontario (Attorney-General) v. Bowie (1993), 1993 8638 (ON SC), 110 D.L.R. (4th) 444, 1 C.C.E.L. (2d) 190, 16 O.R. (3d) 476 (Div. Ct.), per O'Brien J.
. . . In applying the law of the land to the disputes before them, be it the common law, statute law or the Charter, arbitrators may grant such remedies as the legislature or Parliament has empowered them to grant in the circumstances.
I conclude that mandatory arbitration clauses such as s. 45(1) of the Ontario Labour Relations Act generally confer exclusive jurisdiction on labour tribunals to deal with all disputes between the parties arising from the collective agreement. The question in each case is whether the dispute, viewed with an eye to its essential character, arises from the collective agreement. This extends to Charter remedies, provided that the legislation empowers the arbitrator to hear the dispute and grant the remedies claimed. The exclusive jurisdiction of the arbitrator is subject to the residual discretionary power of courts of inherent jurisdiction to grant remedies not possessed by the statutory tribunal. . . .
[24] In Gaignard v. Canada (Attorney General) (2003), 2003 40299 (ON CA), 67 O.R. (3d) 611, [2003] O.J. No. 3998 (C.A.), Goudge J.A., for the court, said [at pp. 618-19 O.R.]:
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.
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 exclusive jurisdiction apply. The court thus has no power to entertain an action based on this dispute.
[25] In the case at bar, Mr. Olivo was a member of the Union and was bound by the provisions of the Collective Agreement between the Union and Seneca. When he was discharged by Seneca on February 10, 1998, his only option was to go to the Union and have it grieve what was alleged to be a dismissal without cause. The grievance alleged a "contravention" (s. 46(1) of CCBA) of the Collective Agreement in the form of an unjust dismissal and sought reinstatement, compensation for lost salary and benefits and compensation for defamation, loss of dignity and injury to personal feelings.
[26] The essential character of the dispute before the Board of Arbitration was an unjust dismissal and the appropriate remedy [page196] therefor. In my view, the issue of aggravated and/or punitive damages is a dispute between the parties arising either directly or inferentially from the Collective Agreement and, therefore, within the exclusive jurisdiction of the Board of Arbitration. It is well established that labour arbitrators have broad remedial power, including the power to award damages.
[27] In Allen v. Alberta, 2003 SCC 13, [2003] 1 S.C.R. 128, 5 W.W.R. 193, LeBel J., for an unanimous court, said at p. 137 S.C.R.:
. . . in accordance with the legislative intent evidenced by the labour relations schemes implemented since the Second World War in Canada, such as the Alberta statutes which apply in this appeal, disputes arising out of the interpretation, application or violation of a collective agreement should be dealt with exclusively under the grievance procedure established in accordance with the agreement or the relevant labour legislation. As a general rule, provided though that they fall within the ambit of the collective agreement, such disputes should be disposed of by labour arbitrators and regular civil courts do not retain concurrent jurisdiction over them.
[28] In Re Oil, Chemical & Atomic Workers & Polymer Corp. Ltd. (1959), 10 L.A.C. 51 (Bora Laskin, Q.C., C.L. Dubin, Q.C. and M. O'Brien), the unanimous award stated [at pp. 56-59]:
In short, boards of arbitration were entrusted with a duty of effective adjudication differing in no way, save perhaps in the greater responsibility conferred upon them, from the adjudicative authority exercised by the ordinary Courts in civil cases of breach of contract. That the adjudication was intended to be remedial as well as declaratory could hardly be doubted. Expeditious settlement of grievances, without undue formality and without excessive cost, was no less a key to successful collective bargaining in day to day administration of collective agreements than the successful negotiation of the agreements in the first place. Favourable settlement where an employee was aggrieved meant not a formal abstract declaration of his rights but affirmative relief to give him his due according to the rights and obligations of the collective agreement.
This board, sitting as a civil tribunal to resolve contract interpretation disputes, has no punitive function but is charged only with redressing private wrongs arising from breach of obligations assumed as a result of negotiation. The board's remedial authority, if it has any, must be addressed to the vindication of violated rights by putting the innocent party, so far as can reasonably be done, in the position in which he or it would be if the particular rights had not been violated. The redress, if any can be given, must be suited to or measured by the wrong done.
The submission of counsel for the union invites this board to agree that a reference of an alleged collective agreement violation to arbitration cannot ipso facto include the assessment of damages to redress the violation if established. What this view suggests is that the assessment of damages is no less a substantive issue and no less a separate one than the determination of the [page197] existence of a violation. It is, of course, possible for these matters to be separated, but they are not ordinarily treated in this way in either civil contract litigation or in commercial arbitration. So far as the latter is concerned there is the high authority of the House of Lords in Hayman v. Darwins Ltd., [1942] A.C. 356 (as expressed by Viscount Simon, L.C. at pp. 366-7) that where parties to a commercial contract have agreed to arbitration of differences or disputes thereunder, then "by the law of England (though not, as I understand, by the law of Scotland) such an arbitration clause would also confer authority to assess damages for breach, even though it does not confer upon the arbitral body express power to do so". The view of the House of Lords as to the law of England is not of course binding upon this board in the matter before it but it represents a point of view which is consonant with an appreciation of the desirability of completeness and finality in arbitration. This is certainly a desideratum in labour arbitration, as is emphasized by the legislative direction governing such arbitration.
Counsel for the union put the submission above-noted in an alternative way by alleging that there is no obligation imposed upon or accepted by the union to pay damages. . . . It is an argument which, however put and however rationalized in result, ignores the fundamental fact that the mutual acceptance of arbitration by the parties is not a matter of the undertaking of obligations towards each other but a remission of their disputes to final and binding adjudication by an external tribunal. . . .
The pivotal issue is simply whether the exercise of arbitral authority encompasses the effectuation of the right and the enforcement of the obligation which are submitted for both original and final adjudication.
As good an analogy as can be found on this issue lies in the field of international law and, particularly, in the effect given by international law to the voluntary submission of nations to adjudication of disputes arising under treaties to which they are parties. Thus, in the Chorzow Factory case of 1927 between Germany and Poland, the Permanent Court of International Justice said (Series A, No. 9, p. 21; No. 17, p. 29):
It is a principle of international law that the breach of an engagement involves an obligation to make reparation in an adequate form. Reparation therefore is the indispensable complement of a failure to apply a convention and there is no necessity for this to be stated in the convention itself.
This board would apply the phrase "indispensable complement" to the violation found to exist here. What the Permanent Court saw as a principle of civilized conduct to govern the affairs of "sovereign" nations is certainly no less applicable to parties to a collective agreement. Once the parties have submitted themselves to the jurisdiction of a board of arbitration authorized to adjudicate on an alleged violation of a collective agreement obligation, they have accepted the full range of the tribunal's adjudicative powers (unless expressly limited) which are immanent in such adjudication. To seek to thwart their exercise by appeal to a fictional intention of the parties is to seek indirectly to nullify the duty of observance and performance of collective agreement terms. Nor is the situation changed by any explicit reference to remedial authority in particular cases. To say that this excludes [page198] the general power of reparation is again to try to destroy the collective agreement by a sidewind.
[29] In summary, it is my view that the Board had the authority and exclusive jurisdiction to determine the claim for damages sought by the Union and the Grievor.
[30] The basic dispute was the termination of Mr. Olivo's employment. The manner of termination gave rise to the allegation regarding defamation and injury to feelings.
[31] In my view, the Board erred in holding that Mr. Olivo should bring a civil action regarding two "leftover remedial claims" and in treating them as separate tort claims. The facts underlying the remedial claims have been presented at a 12-day hearing before the Board. As counsel for the Union state in their factum at para. 44: "The claim for aggravated and punitive damages are remedial 'loose threads', not independent claims, and the Board simply left them dangling."
[32] In Giorno v. Pappas (1999), 1999 1161 (ON CA), 42 O.R. (3d) 626, 170 D.L.R. (4th) 160 (C.A.), Goudge J.A., for the court, said [at pp. 630-31 O.R.]:
It is of no moment that arbitrators may not always have approached the awarding of damages in the same way that courts have awarded damages in tort. In Weber, at p. 958 S.C.R., p. 603 D.L.R., McLachlin J. made clear that arbitrators are to apply the same law as the courts. Laskin J.A. put it this way in Piko [Piko v. Hudson's Bay Co., 1998 6874 (ON CA), [1998] O.J. No. 4714 (C.A.)] at para. 22 [p. 736]:
I do not rest my decision on any differences between the power of courts and the power of arbitrators to award damages for a tort, such as the tort of malicious prosecution. I recognize that arbitrators may apply common law principles in awarding damages, and, more importantly, the breadth of an arbitrator's power to award damages does not necessarily determine whether Weber applies.
What is important is that the arbitrator is empowered to remedy the wrong. If that is so, then where the essential character of the dispute is covered by the collective agreement, to require that it be arbitrated, not litigated in the courts, causes no "real deprivation of ultimate remedy". . . . The individual is able to pursue an appropriate remedy through the specialized vehicle of arbitration. He or she is not left without a way to seek relief.
[33] The Collective Agreement inferentially included all aspects of the grievance advanced on behalf of Mr. Olivo with respect to his dismissal without just cause, including the claim for aggravated and/or punitive damages. The Board erred when it declined jurisdiction to address the issue of aggravated and/or punitive damages.
[34] Counsel for the applicant advised the court that in British Columbia arbitrators have, on more than a few occasions, awarded the remedy of damages. [page199]
C. The test to be applied by the Board of Arbitration in awarding aggravated and/or punitive damages arising out of the way and method Seneca carried out the dismissal without cause of Mr. Olivo
[35] In my view, having decided that, in this case, the Board has jurisdiction to award the damages claimed, the matter should be remitted to the Board for its consideration as to whether the requested damages should or should not be granted. It will be for the Board to reconsider the relevance and applicability of:
(a) Vorvis v. Insurance Corp. of British Columbia, 1989 93 (SCC), [1989] 1 S.C.R. 1085, 58 D.L.R. (4th) 193 and
(b) Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595, 209 D.L.R. (4th) 257
IV. Result
[36] An order will issue:
(a) quashing the Second Award of the Board, dated December 4, 2001, insofar as the Board held that it did not have jurisdiction to order aggravated and/or punitive damages, and
(b) remitting the matter back to the same Board for it to decide whether the damages claimed should or should not be awarded and, if "yes", the quantum.
V. Costs
[37] Prior to reserving judgment, counsel were asked for their submissions as to costs. Counsel agreed that the costs should follow the event fixed at $2,000 for the motion under s. 21(5) of the Courts of Justice Act, R.S.O. 1990, c. C.43 to set aside the October 7, 2003 order of Ferrier J., who refused to dismiss the judicial review application on the basis of delay, and $5,500 for the costs on the judicial review application.
[38] Accordingly, Seneca shall pay fixed costs to O.P.S.E.U. in the amount of $7,500, all inclusive.
Application granted.
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