Court File No. 511/03

Date: 20050124

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BETWEEN:

HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO

As represented by the MINISTRY OF COMMUNITY, FAMILY

AND CHILDREN’S SERVICES

Applicant

• and -

CROWN EMPLOYEES GRIEVANCE SETTLEMENT BOARD

• and -

ONTARIO PUBLIC SERVICE EMPLOYEES UNION

Respondents

IN THE MATTER OF an application under s. 2(1) of the Judicial Review Procedure Act, R.S.O. 1990, c. J.1, as amended

• and -

IN THE MATTER OF an arbitration award of the Crown Employees Grievance Settlement Board dated May 15, 2003

HEARD: December 3, 2004

BEFORE: Lane, Matlow and Ground JJ.

COUNSEL: Kelly Burke, Fateh Salim and Benjamin Parry, for the Applicant;

Ed. J. Holmes and David Wright, for the Respondents.

E N D O R S E M E N T

LANE, J.:

[1] On December 3, 2004, we heard this application for judicial review and dismissed it from the Bench for reasons to follow in writing. These are our reasons.

[2] This application is brought by the applicant for judicial review of an award of the Crown Employees Grievance Settlement Board (the “Board”) dated May 15, 2003. The issue before the Board was whether the applicant’s inability to produce certain documents that had been in the possession and control of its agent was fatal to the respondent Union’s ability to advance its case. The documents were notes generated by the applicant’s consultant, of interviews held in the course of an inquiry into working conditions at the grievor’s place of employment. Despite a contractual term making these documents the property of the applicant, the consultant destroyed them in the ordinary course of its business.

[3] The Board determined that, despite the availability of viva voce evidence from the persons interviewed, the case of the grievor had been severely damaged. Those interviewed could no longer be cross-examined on what they had told the consultant about the alleged conduct of the grievor, as compared to their viva voce testimony. In the circumstances of this particular case, the Board held at page 20:

In light of the specific issues raised in this matter, it is critical to go behind the [consultant’s] report to review what was said to the reviewers, and what they relied upon. Therefore, I conclude that the notes and documentation destroyed by [the consultant] were highly relevant, and in fact crucial to the Union’s case.

[4] The Board held that, although there had been no deliberate conduct intended to suppress these documents, the applicant could not escape from the fact that they were destroyed by its agent. The effect was to do irreparable damage to the Union’s case and to defeat the ability of the Board to conduct a fair hearing. After canvassing the possibility of an alternate remedy and finding none, the Board concluded that the only remedy was to allow the grievances. The Board therefore ruled that the grievances should be upheld in their entirety and the grievor granted a full remedy. The Board granted this extraordinary remedy without making any finding of abuse of process and/or finding breach of a substantive right but on the basis that the act of the applicant’s agent irreparably prejudiced the grievor’s case.

[5] The applicant seeks to have this decision quashed and overturned by this Court on the following basis as set out in the factum:

The Board’s decision constitutes a denial of natural justice by upholding the grievance without hearing the relevant viva voce evidence on the merits of the case, and without hearing the necessary evidence to determine if it had jurisdiction; and

i) the Board erroneously applied jurisprudence relating to disclosure in criminal law proceedings to the labour arbitration context;

ii) the Board erroneously granted an extraordinary remedy and exceeded its jurisdiction when it upheld the grievances without making specific findings, which are a condition precedent, to the conclusions it reached.

[6] The grievor is a long-term employee in the respondent Ministry as a probation and parole officer in the St, Catharines office. There is reportedly a history of a poor working environment in this office.

[7] On March 10th and 23rd, 1998, the grievor filed grievances pertaining to certain letters being placed in his personnel file. The grievances proceeded to arbitration before the Board and were settled by the parties on April 14, 1999. The settlement provided that the applicant could not refer to or rely upon these letters in any way in subsequent proceedings, and that the letters would be withdrawn from the file. Additional grievances were filed on June 19 and September 13, 2000, and January 20, 2001. These also proceeded to the Board and were settled on July 19, 2001. The applicant agreed to destroy all documentation related to the grievances and not to rely on the contents of certain documents.

[8] In or about November or December, 2001, the applicant imposed a disciplinary suspension on the grievor without pay and unilaterally transferred him from the St. Catharines office to the Simcoe office. These acts gave rise to grievances on November 16 and December 20, 2001, which proceeded to the Board and were settled by a memorandum of settlement dated February 22, 2002. It is the alleged breach of this settlement that forms part of the basis for the present grievances. That settlement required the applicant to rescind the discipline imposed, to reimburse lost pay and any sick credits utilized, and to place the grievor on a paid leave of absence for a maximum of four months. The settlement also confirmed that the grievor’s home position remained the St. Catharines office. The settlement also provided that the applicant was not permitted to take disciplinary or substantive punitive action against the grievor related to the allegations giving rise to the grievances. Moreover, the investigation report of November, 2001, would not be provided to a workplace review consultant (the “Consultants”) to be engaged by the applicant.

[9] The applicant retained the consultant, whose terms of reference included interviewing staff about whether the workplace was free of harassment, discrimination and violence, reviewing both past and present complaints in the St. Catharines office, and investigating whether the work environment was a positive one conducive to growth and development.

[10] The consultant’s report advised that the grievor should not be returned to his position in St. Catharines and recommended that he be relocated to another office so that all concerned could have a “fresh start”. The report identified the grievor as a person causing difficulties in the St. Catharines office. The applicant reassigned the grievor to the Simcoe office, as it had done in November, 2001, which had given rise to the grievances of late 2001. The grievor filed a grievance on August 2, 2002, alleging unjust discipline, a breach of the February 2002 settlement, and discrimination. The Union considered that the applicant’s actions breached the settlement agreement and requested that the Board reconvene the matter for a hearing.

[11] The Union sought disclosure of all materials and information, notes and documentation in possession of the applicant and the consultant in connection with the grievance and the investigation. The applicant responded that the consultant had destroyed all of their materials related to the matter. The applicant claims to have been unaware of, and to not have authorized, the documents’ destruction. In fact, the contract with the consultant stated that information gathered would be the sole property of the applicant, would be given to the applicant on request, and would not be destroyed without the applicant’s written consent. The Union also pressed for copies of the documents which the applicant had given to the consultants.

[12] The Board held a preliminary hearing on November 19, 2002, at which the Union continued to raise concerns related to disclosure of documents. The applicant informed the Union on April 4, 2003, the business day before the full hearing set for April 7, 2003, that the applicant had destroyed the documents that it provided to the consultant. Based on the applicant’s responses regarding disclosure, at the April 7 hearing the Union gave notice of a motion to grant the grievances due to its inability to have a full and fair hearing in the absence of full disclosure. On April 8, 2003, the next day, the applicant advised that it had erred in its statement that the requested materials were shredded. The applicant claimed to have understood that the materials requested were those that had been destroyed as a result of the July 19, 2001 settlement. The documents provided to the consultant were, the applicant now claimed, not destroyed.

[13] On May 6 and 7, 2003, the Union argued its motion to grant the grievances. It argued that by reason of the applicant’s actions the Union had been precluded from advancing its claims, and that to proceed with the hearing would deny natural justice and constitute an abuse of process. This was alleged to be so due to the applicant’s initial refusals to provide disclosure, the shredding of relevant documents by the applicant’s agent, the consultant, and the applicant having changed its position. The documents provided to the consultant had been shredded and then were suddenly recovered. The applicant submitted that the witnesses interviewed by the consultant could give viva voce evidence as to what they told the consultant, so the Union would have the evidence necessary to challenge the applicant’s decision without having recourse to the actual notes from the interviews. The issue before the Board on the Union’s motion was whether a full and fair hearing, consistent with the requirements of natural justice, could be held, given the destruction of relevant materials and information by the consultant.

[14] On May 15, 2003, the Board released the decision summarized above, in respect of which the applicant seeks judicial review.

[15] The first issue is one of due process: whether the act of the applicant’s agent, the consultant, rendered it impossible to hold a full and fair hearing into the grievance and, as a key part of the inquiry, whether there had been a breach by the applicant of the settlement agreements which bound it not to rely on certain documents and events. In dealing with issues of procedural fairness, courts do not generally recognize other tribunals as having any advantage over the court in relevant expertise which would entitle the tribunal to deference.[^1]

[16] Faced with a similar problem in Air Nunavut, Tremblay-Lamer J.[^2] said at paragraph 47:

Although I recognize the expertise of the Tribunal in matters relating to “aeronautics” the question of determining whether a notice of suspension was issued in accordance with the principles of natural justice does not fall squarely within the expertise of the Tribunal. As a result, low deference should be afforded to the decision-maker. In such a case, I find the standard of review to fall in the middle of the spectrum between “patently unreasonable” and “correctness”. Thus the appropriate standard with respect to this particular issue is reasonableness simpliciter.

[17] In the present case, it is right to acknowledge that a labour arbitration board expressly constituted by statute to adjudicate such disputes as the present, is well placed to assess the impact upon the fairness of the process of a failure to produce relevant documents of a particular kind. It falls squarely within the Board’s expertise to consider the disclosure obligations in the collective agreement and to make the factual determination of the importance of the documents in question and the possibility of holding a full and fair hearing in the light of the destruction of those particular documents.

[18] Having regard to the limited nature of the privative clause, the purpose of the legislation (to create an expert tribunal to resolve labour disputes with a degree of finality), the expertise of the tribunal and the particular nature of the problem (to apply the concepts of natural justice to a case where a party has destroyed important documents), we conclude that some deference is owed to the Board on the issue of the order to be made in these circumstances. Accordingly, the question of whether natural justice has been given is for the court to determine, accepting the Board’s reasonable findings on the facts, and the question of the remedy is for the Board, to be assessed on the basis of the standard of reasonableness.

[19] The applicant submits that natural justice requires that the Board hear all the evidence. Counsel submitted that this was so at common law and also pursuant to section 48(1) of the Board’s Act[^3], (CECBA) which provides:

(1) Subject to the specific requirements in this Part and to any requirements in the Labour Relations Act, 1995, the Grievance Settlement Board shall determine its own practice and procedure but shall give full opportunity to the parties to any proceeding to present their evidence and to make their submissions.

[20] In our view, neither the common law nor this section requires the Board to hear evidence on the merits of a case where a preliminary issue, such as the present fairness issue, is presented to it. It is sufficient that the Board give the parties a full opportunity to present their case on the fairness issue. Otherwise, the provision that the Board shall control its own procedure would be undercut. The Board found that the destruction of the documents prevented the holding of a fair hearing. It makes no sense to stretch section 48(1) to make it into a prohibition of any termination of a grievance proceeding except by a full hearing. We conclude that the Board, having heard what the applicant wanted to say about the fairness issue, did not deprive the applicant of natural justice by confining the hearing to that issue.

[21] The applicant’s submissions thus call into question the concept of a preliminary motion disposing of an issue on grounds other than the merits. However, the CEBCA incorporates certain portions of the Labour Relations Act, 1995, including section 48(12)(b), which gives the Board the power to order any party to produce documents. The consequences of a refusal or failure to obey have been discussed in a leading textbook:[^4]

However, where a timely request is made [for the production of documents] and there is no response to it or to an order for production, it is open to the arbitrator to refuse to admit the document into evidence or to grant an adjournment. And if the party’s refusal continues thereafter, the arbitrator may make an award of costs payable by the recalcitrant party where he has authority to do so, or may convene the hearing and either allow or dismiss the grievance.

[22] The textbook’s reference to allowing or dismissing the grievance is supported by several arbitral decisions cited in footnote 23 to the text cited. These include National Standard[^5], Thompson Products[^6], Budget Car Rentals[^7] and Re Foothills General Hospital[^8]. In Thompson Products it was submitted that there was no explicit statutory authority for an order to produce documents and the Board should refuse to make one. The Board disagreed and held that there was such a power by analogy to the Rules of Practice and the obvious need for disclosure to enable the parties to prepare and the Board to hold a proper hearing. The Board further held that the deliberate refusal of the grievor to produce documents in a timely way should also be dealt with by analogy to the Rules of Practice and therefore could give rise to the dismissal of the grievance. As the failure to include the documents in the document production was deliberate and not in good faith, the Board dismissed the grievance.

[23] In National Standard, the arbitrator ruled that the grievor must produce a tape recording in his possession, but the portion of the tape produced did not contain the crucial conversation. This was discovered and a request was made for the remainder of the tape, which was refused at first, but later the grievor produced a tape which turned out to be an incomplete and edited version of the telephone conversation in question. On these facts, the company sought dismissal of the grievance, relying on the Board’s power to control its own procedure and the powers in the Labour Relations Act[^9] to:

make such orders or give such directions in proceedings as he, she or it considers appropriate to expedite the proceedings or to prevent the abuse of the arbitration process.

[24] The Board, having found that arbitrators have the power to order the production of documents, continued:

The general issue, then, is what one can do if a party fails to comply with such orders. In my opinion, as was ordered in the Thompson Products case, the most reasonable approach is to adopt the procedure of the courts. This is consistent with the philosophy of the Labour Relations Act as expressed in section 45(8.1) para. 5. [quotation omitted: see previous paragraph]

It is also consistent with the old adage of the courts, ibi jus, ibi remedium: where there is a right, there is a remedy. Accordingly, if the arbitrator cannot find an adequate remedy to deal with these situations, the parties are forced back on the recourse of the courts. This, in my view, results in an ‘abuse of the arbitration process’. It is time-consuming and expensive. It is unreasonable to set up a system which is to settle grievances in a relatively expeditious and inexpensive manner and then not give it the power to deal with such procedural matters.

[25] Section 45(8.1) was repealed by the new Act in 1995 and the express power set out in it is no longer in the Act. However, National Standard did not depend entirely upon that section, but followed Thompson Products, a case which predated the enactment of section 45(8.1) in 1992, and relied upon the implicit power to enforce the obligation of disclosure which was necessary for the conduct of the arbitration. In the present case, the applicant conceded that the collective bargaining agreement imposed a duty of disclosure on the parties to a grievance.

[26] Budget was decided in 2000 and arose under the present Act. In it, the arbitrator made an interim order for the production of documents, which was not complied with. The arbitrator wrote:

I also ordered the grievor to produce certain documents relevant to the hearing and the issues in dispute. Logic dictates that if arbitrators have the power to make these types of orders, there must also be authority to enforce the orders made. Arbitral jurisprudence indicates that, as part and parcel of the authority to enforce, an arbitrator has jurisdiction to dismiss a grievance where there has been non-compliance with an order. Thus, a grievance may be dismissed or held to be inarbitrable under the ‘abuse of process’ rubric, where a party fails to produce documents or matters ordered to be produced by an arbitrator …[citations to Thompson Products and National Standard] …

[27] In Foothills, an Alberta case, the Board stated that a failure by the employer to produce documents in compliance with a Board order would be grounds for allowing the grievance.

[28] There is thus significant arbitral jurisprudence, as well as academic opinion, holding that an arbitrator has both the jurisdiction to make a disclosure order[^10] and the jurisdiction to enforce it by an appropriate remedy, including the allowance or dismissal of the grievance.

[29] There is no specific statutory grant of the power to dismiss or allow a grievance for failure to comply with such an order. However, these decisions correctly find that the statutory grant of the power to make an order for production of documents implies the power to penalize for failure to comply. Logic does indeed dictate that if arbitrators have the power to make procedural orders, there must also be a power to fashion a remedy for failure to comply.

[30] All legislation is deemed remedial[^11], but even without that statutory instruction, the Labour Relations Act is such legislation. It is intended to bring peace to the relations between employer and employee by providing a forum for the expeditious, inexpensive, independent and largely final resolution of employee grievances without the high personal, social and economic costs of work stoppages. To perform this function, the arbitrator must have the power to control the process leading up to the actual hearing, and the Act contains sections designed to grant such powers to arbitrators. Such remedial legislation is to be given a wide and liberal construction to enable it to effectively serve this remedial purpose.[^12] In line with this principle, the Legislature cannot be thought to have intended that the arbitrator would have the authority to make an order but not the authority to enforce it by a suitable penalty.

[31] The applicant submits that the Board erred in considering the principles of disclosure in the criminal law context, particularly the decision of the Supreme Court in Carosella[^13]. In that case, the majority of the Court found that the destruction by a sexual assault crisis centre of its notes of an interview with the complainant destroyed the possibility of cross-examining the complainant on her first written recital of the facts and so impaired the accused’s right to present a full answer and defence that a stay of proceedings was imposed. The Court noted the important fact that no alternative remedy could be found that would cure the prejudice.[^14] It was only in such a case that the remedy of a stay was appropriate.

[32] The applicant submits that the reference to a criminal law decision was inappropriate. Carosella was a Charter case and the present one is not. The use of criminal law concepts tends to blur unacceptably the lines between civil and criminal law and to make the applicant subject to the same disclosure obligations as apply to the Crown in a criminal case.

[33] But these submissions greatly overstate the arbitrator’s degree of reliance on Carosella. He did not find the source of the obligation to disclose in the Charter, but in the collective agreement. He noted the caution in Carosella that the remedy of a stay was applicable only in the clearest of cases, the absence of other suitable remedies and the importance of credibility in that case as in the present. He said:

Although R. v. Carosella arose in a criminal law context, the principles explored there do have some applicability in the instant matter. As noted, the right to a fair hearing includes the right to advance one’s case and the right to respond.

[34] Throughout, the arbitrator was concerned with the impact of what had happened upon the fairness of the hearing and that is the context in which he considered Carosella, whose facts were sufficiently similar to the present case to make the analysis helpful. The arbitrator did not in any way introduce criminal standards into labour law. All he did was examine the way a factually similar case had been handled by the Supreme Court.

[35] There was no finding in the present case that there was a deliberate attempt to thwart justice by destroying the documents. The applicant submitted that there was a requirement for such a finding before a stay was permitted. Somewhat ironically, most of the cases cited were criminal cases. In my opinion, the basic issue before the arbitrator was correctly stated by him at page 23, when, after discussing the absence of any finding of abuse of process, he said:

That conclusion, however, does not end the inquiry. The fundamental concern here is whether the right to a fair hearing has been irreparably damaged as a result of the destruction of Mediated Solutions notes and documents. Without knowing the full [sic] extent of what was relayed to the reviewers, the basis upon which Mediated Solutions made its recommendations cannot be determined. Without knowing the complete basis upon which Mediated Solutions made its recommendations, it cannot be determined whether the Employer based its decision to relocate Mr. Larman on prohibited information.

[36] After setting out the issue as above, the arbitrator analysed the impact of the missing documentation and possible alternative remedies and concluded:

A full and fair hearing, which the principles of natural justice require, cannot be held in this matter. Under the specific facts and circumstances of this case, including the fact that it was the Employer’s agent that destroyed the relevant documents, the appropriate remedy is to grant the grievance.

[37] This is a labour relations hearing and the expertise of the arbitrator is directly engaged in determining the impact upon the case of the absence of these documents and in fashioning an appropriate remedy. On those subjects he is entitled to some deference from us on the reasonableness standard. His reasons are cogent and his decision reasonable, both on the impact and on the remedy.

[38] For the reasons set out above, the application was dismissed at the hearing.

Lane J.

Matlow J.

Ground J.

DATE:

[^1]: London (City) v Ayerswood Development Corp. et al., 2002 3225 (ON CA), [2002] O.J. No.4859; 167 O.A.C. pars. 9, 10. [^2]: Air Nunavut Ltd. v. Canada (Minister of Transport) [2001] F.C. 138 (Fed. Ct. Trial Div.) [^3]: Crown Employees Collective Bargaining Act, S.O. 1993 c. 38. [^4]: Brown, D. and Beatty, D. Canadian Labour Arbitration, 3rd edition, 2004 (Canada Law Book) page 3:1421 [^5]: National Standard of Canada Ltd. (1994) 39 L.A.C. ( 4th ) 228. [^6]: Thompson Products Ltd., (1970), 22 L.A.C. 85. [^7]: Budget Car Rentals Toronto Ltd., (2000) 87 L.A.C. (4th ) 154. [^8]: Re Foothills Provincial General Hospital and Civil Service Association of Alberta (1974), 7 L.A.C. (2nd) 436. [^9]: Labour Relations Act, section 45(8.1) para. 5. enacted S.O. 1992 c. 21, section 23(3); repealed by Labour Relations Act, 1995 S.O. 1995 c. 1. [^10]: In Ontario there is statutory power to make such an order: Labour Relations Act, 1995, section 48(12)(b) [^11]: Interpretation Act R.S.O. 1990,c. I11, s. 10. [^12]: Per Doherty J.A. in Elan Corporation v. Comiskey (1990), 1 O.R. (3rd) 289 at 306-07 (C.A.). [^13]: R. v Carosella [1997] S.C.R. 80. [^14]: Ibid. Page 113.