Dynamex Inc. v. Teamsters, Chauffeurs, Warehousemen and Helpers, Local 421

[Indexed as: Dynamex Inc. v. Teamsters, Chauffeurs, Warehousemen and Helpers, Local 421]

Court File No. 02-DV-000780 Ontario Superior Court of Justice, Divisional Court Then, Czutrin and Heeney JJ.

Heard: April 1, 2004 Judgment rendered: February 23, 2005

APPLICATION FOR JUDICIAL REVIEW Of an arbitration award, 111 L.A.C. (4th) 145, 70 C.L.A.S. 276 (Tims), allowing a grievance concerning scope of the bargaining unit.

Richard R Bowles, for applicant, the employer. Sylvia Davis, for respondent, the union.

The judgment of the court was delivered by

[1] HEENEY J.:—The Applicant ("Dynamex") seeks judicial review of the decision of Arbitrator Mary Lou Tims dated August 2, 2002 [reported 111 L.A.C. (4th) 145]. In that decision, the Arbitrator interpreted the scope clause contained in the Collective Agreement between Dynamex and the Respondent ("the Union"), and concluded that the owner-operators operating from Dynamex's Cambridge branch should be included as members of the Union, which is based in London.

[2] Briefly stated, Dynamex submits that the Arbitrator exceeded her jurisdiction by, in effect, expanding the certificate issued by the Canada Labour Relations Board (now the Canada Industrial Relations Board, both of which are referred to herein as "the Board"). That certificate was dated February 21, 1992, and described the bargaining unit as all dependent contractors "working in and out of London, Ontario". It is argued that the Arbitrator had no jurisdiction to interpret the Collective Agreement in a manner that was inconsistent with that certificate, by including geographic areas not specified in the certificate.

[3] The Union, on the other hand, argues that the Arbitrator did nothing more than she is expressly empowered to do, both under the Collective Agreement and under the Canada Labour Code, R.S.C. 1985, c. L-2 ("the Code"), which was to interpret a clause in the Collective Agreement. The parties to a Collective Agreement may expand its scope by mutual agreement, although they do so at their peril, since the Board is not bound by any such agreement should an application be made to the Board to formally amend the certificate. While the Board may, if eventually called upon to do so in an application to amend the certificate, disagree with the inclusion of Cambridge in the bargaining unit, that was immaterial to the task facing the Arbitrator, which was to interpret the language of the Collective Agreement.

The Facts

[4] Dynamex operates a courier/shipping business, with terminals throughout Ontario and across Canada. On February 21, 1992, the Union was certified by the Board as bargaining agent for a bargaining unit described as follows;

All dependent contractors employed by Dynamex Express Inc. working in and out of London, Ontario, excluding supervisors, those above the rank of super-visor, office and sales staff, dispatcher and tracer.

[5] At the time of certification, the Union and Dynamex agreed to also place owner-operators working out of Sarnia and Chatham on the seniority list, making those employees subject to any collective agreement between the parties.

[6] In 1998, the parties bargained for a new collective agreement, in which the Union sought to broaden the scope clause. The Collective Agreement that was reached amended the scope clause to read as follows:

1.01(a) The Company does hereby recognize the Union as the sole and exclusive bargaining agent for all Dependent Contractors contracted by the Company at all company operations save and except supervisors, those above the rank of supervisor, office staff, sales staff, dispatcher and tracer.

1.02 For any new terminal established or any existing terminal, the following conditions shall apply:

Any and all owner-operators contracted shall, as a condition of their engagement, be subject to this Collective Agreement.

[7] During their 1998 negotiations, the Union learned that Dynamex was operating a terminal in Windsor. The Union subsequently filed a policy grievance dated February 1, 1999, asserting that owner-operators working in Windsor should be members of the Union and placed on the London seniority list, thereby making them subject to the Collective Agreement

[8] This grievance was settled on February 3, 1999. Under that settlement, all owner-operators working in Windsor became members of the Union and became subject to the Collective Agreement.

[9] At no time did either party apply to the Board for an amendment to the certificate to include Sarnia, Chatham or Windsor.

[10] During the 1998 negotiations, the Union also learned that Dynamex operated a terminal in Cambridge. Cambridge is approximately 65 miles from London, is closer to London than Windsor, and has between 68 and 100 owner-operators working from that location. On or about March 20, 2000, the Union filed a policy grievance under the Collective Agreement, alleging a violation of the scope clause and asserting that the Cambridge owner-operators should be placed on the London seniority list and be members of the Union, and subject to the Collective Agreement

[11] It is this grievance that came before the Arbitrator, under Article 6.01(b) of the Collective Agreement, which provides for the binding arbitration of any grievance regarding the interpretation or enforcement of the Collective Agreement. The parties engaged Article 6.05(a) of the Collective Agreement, by mutually agreeing upon a single arbitrator to determine the matter.

The Decision

[12] In the hearing before the Arbitrator, both parties agreed that she had jurisdiction to construe the language in the scope clause. However, Dynamex argued, as they have before this court, that the scope clause must be interpreted in light of, and in accordance with, the geographic parameters of the certificate issued by the Board in 1992.

[13] The Arbitrator reviewed sections 3, 16, 18, 18.1, 24, 27, 36 and 65 of the Code, as well as the jurisprudence of the Board, in her analysis. She concluded that the Board has the sole jurisdiction to amend a certificate and that, in an application to amend a certificate under s. 18.1, the Board is not bound by any agreement reached by the parties.

[14] She referred to several authorities, including Communications Workers of Canada and Bell Canada and Canadian Telephone Employees' Association (1982), 50 di 105 (Foisy), National Association of Broadcast Employees and New Brunswick Broadcasting Co. Limited (1988), 75 di 101 (Jamieson), and Brink's Canada Ltd. and General Teamsters, Loc. 363 (1996), 100 di 39 (Handman). Those authorities commented on the situation where, after certification had been granted, the parties extended the bargaining unit through the act of voluntary recognition, which was followed later by an application to the Board by the union to amend the certificate to reflect the current realities of the industrial relations milieu. The Board repeatedly made it clear that an amendment application must not be used to circumvent the certification process, by seeking to enlarge a bargaining unit without the express wish of a majority of the affected employees.

[15] At the same time, however, the Arbitrator observed that an arbitrator, appointed under the Collective Agreement, has the concurrent jurisdiction to interpret and apply the terms of the Collective Agreement. In so doing, she is bound by Article 6.06 not to alter or change any term in the Agreement. Thus, if her interpretation of the scope clause results in the enlargement of the bargaining unit beyond that contemplated by the certificate, she concluded that she was bound by the terms of her mandate to give effect to that interpretation. She said the following at pg. 18 [p. 161 L.A.C.]:

The fact that the parties may have acted at their "peril" in the present case in amending the recognition clause beyond the geographic parameters of the Board certificate, does not in my view constitute any basis upon which I can properly decline to interpret the language to which they agreed.

[16] The scope clause contained in the Collective Agreement was, on the evidence before the Arbitrator, the same clause that was in use in a great number of collective agreements between Dynamex and various union locals across the country. Since, on its face, that same clause in each collective agreement was broad enough to cover all of Canada, she concluded that the language in issue was ambiguous, lacking as it did any geographic parameters. Accordingly, she elected to consider extrinsic evidence to determine the meaning of that clause in the Collective Agreement between Dynamex and the Union. Considering extrinsic evidence is quite appropriate when the language to be interpreted is ambiguous: Brown & Beatty, Canadian Labour Arbitration, 3rd Edition (Aurora: Canada Law Book, April 1997), chapter 4:2250.

[17] In examining the relevant extrinsic evidence, the Arbitrator considered the certificate, as well as the scope clauses in various other collective agreements across the country. She placed heavy reliance on the uncontested evidence of Mr. Taylor, who testified on behalf of the Union, that he expressly advised Dynamex during the 1998 negotiations that the Union viewed the amended scope clause as broad enough to "cover all of Canada". She also observed that the language of the scope clause must be "viewed in light of the evidence here...". This evidence, specifically referred to earlier in her decision, included the voluntary inclusion of the Sarnia, Chatham and Windsor owner-operators in the bargaining unit, as well as the fact that Cambridge is closer to London than Windsor is. She concluded as follows [p. 160 L.A.C.]:

I am convinced that the very broad language of articles 1.01(a) and 1.02 of the collective agreement viewed in light of the evidence here must be regarded as reflecting the parties' shared intention that the bargaining unit be broadened beyond the geographic parameters set out in the Board certificate, at least to the extent that it encompasses the Company's Cambridge owner-operators.

[18] In so doing, she distinguished and declined to follow the decision of Arbitrator Kirkwood in a similar arbitration, Re Dynamex Inc. and Teamsters, Loc. 938 (2001), 102 LAC. (4th) 271, where the Toronto-based local was seeking an interpretation of an identical scope clause to include the northern communities of Sudbury, Timmins and other northern locations. In that decision, Arbitrator Kirkwood declined to interpret the scope clause so as to include individuals outside the geographic area of Toronto specified in the original certificate issued by the Board.

[19] While the decision of Arbitrator Kirkwood does not constitute binding precedent, it was nevertheless considered by the Arbitrator in the decision under consideration here. It was distinguished on the basis that the only extrinsic evidence considered by Arbitrator Kirkwood was the original certificate, whereas in the case before the Arbitrator there was a great deal of additional evidence that led her to a different conclusion. Although the Arbitrator did not mention it, the decision of Arbitrator Kirkwood is also distinguishable by reason of the fact that the union in that case had recently obtained certification from the Board for a new bargaining unit covering the very people it sought to have included in the collective agreement before the arbitrator. Thus, a contrary decision would have flown in the face of the new certificate, and intruded on the rights of the dependant contractors to be represented by the bargaining unit that they had just freely chosen. That is not the situation in the matter before this court. The Cambridge owner-operators are not represented by any other bargaining unit.

The Standard of Review

[20] Mr. Bowles, for Dynamex, submits that, by focusing on the wording of the Collective Agreement, and failing to examine and give effect to the provisions of the Code which give the Board the exclusive jurisdiction to determine the composition of a bargaining unit, the Arbitrator committed an error of law, the test for review of which is "correctness".

[21] Ms. Davis, for the Union, submits that, for a labour arbitrator reviewing an issue that arises under a collective agreement, the standard of review is "patent unreasonableness".

[22] The Supreme Court of Canada recently commented on this issue, in a decision that was released after argument was heard in this appeal. In Voice Construction Ltd. v Construction & General Workers' Union, Local 92, [2004] S.C.J. No. 2 (QL), 126 L.A.C. (4th) 129, released April 8, 2004, the union dispatched a union member to the respondent construction company, despite their request that she not be sent to job sites. When they refused to put her to work, the union grieved that this constituted a violation of the collective agreement, which required the employer to hire the labourers dispatched by the union, providing they were qualified and had not been previously terminated for cause. The arbitrator interpreted the relevant clauses in the collective agreement as a restriction on the right of the employer to hire and select workers, and ruled in favour of the union. On an application for judicial review, the reviewing judge found that the arbitrator had exceeded her jurisdiction, applying a standard of correctness. A majority of the Alberta Court of Appeal upheld that decision. The appeal was allowed by the Supreme Court of Canada, and a standard of "reasonableness" was held to apply.

[23] Speaking for the majority, Major J. made it clear that the first task of the reviewing court is to establish the appropriate standard of review, based on a pragmatic and functional approach. This is something neither of the two lower courts engaged in. The purpose of the analysis "is to ascertain the extent of judicial review that the legislature intended for a particular decision of the administrative tribunal" (par. 15).

[24] Major J. described this pragmatic and functional approach as follows:

116 The pragmatic and functional approach involves the consideration of four contextual factors: (1) the presence or absence of a privative clause or statutory right of appeal; (2) the expertise of the tribunal relative to that of the reviewing court on the issue in question; (3) the purposes of the legislation and the provision in particular; and (4) the nature of the question - law, fact or mixed law and fact: Pushpanathan, supra, at paras, 29-39; Dr. Q, supra, at para. 26; Ryan, supra, at para. 27. No one factor is dispositive: Mattel, supra, at para. 24.

[25] Major J. went on to illustrate how the degree of deference directed by the legislature translates into the appropriate standard of review, at par. 18:

9[ 18 Dr. Q, supra, confirmed that when determining the standard of review for the decision of an administrative tribunal, the intention of the legislature governs (subject to the constitutional role of the courts remaining paramount - i.e., upholding the rule of law). Where little or no deference is directed by the legislature, the tribunal's decision must be correct. Where considerable deference is directed, the test of patent unreasonableness applies. No single factor is determinative of that test. A decision of a specialized tribunal empowered by a policy-laden statute, where the nature of the question falls squarely within its relative expertise and where that decision is protected by a full privative clause, demonstrates circumstances calling for the patent unreasonableness standard. By its nature, the application of patent unreasonableness will be rare. A definition of patently unreasonable is difficult, but it may be said that the result must almost border on the absurd. Between correctness and patent unreasonableness, where the legislature intends some deference to be given to the tribunal's decision, the appropriate standard will be reasonableness. In every case, the ultimate determination of the applicable standard of review requires a weighing of all pertinent factors: see Pushpanathan, supra, at para. 27.

[26] The first consideration, then, is the presence or absence of a privative clause, or a statutory right of appeal. There is no express privative clause in the Collective Agreement, although Article 6.05 does provide for the "final settlement" of the grievance by submitting it to arbitration. The Code, however, is more explicit. Section 57(1) provides that "[e]very collective agreement shall contain a provision for final settlement without stoppage of work, by arbitration or otherwise, of all differences between the parties" concerning, among other things, the interpretation of the collective agreement. Section 58 of the Code provides as follows:

(1) Every order or decision of an arbitrator or arbitration board is final and shall not be questioned or reviewed in any court.

(2) No order shall be made, process entered or proceeding taken in any court, whether by way of injunction, certiorari, prohibition, quo warranto or otherwise, to question, review, prohibit or restrain an arbitrator or arbitration board in any of their proceedings under this Part.

[27] It would be difficult to draft a statutory provision that more clearly expresses the intention of the legislature that there be no judicial review of a decision of an arbitrator who is interpreting a collective agreement. By providing that a decision of an arbitrator is final, and not subject to question, review or to any extraordinary remedy in any court, the legislature is directing that such decisions be given almost complete deference.

[28] This is in contrast to the situation in Voice Construction (supra), where the Alberta Labour Relations Code, S.A. 1988, c. L-1.2, did not provide arbitrators with the protection of a full privative clause. Indeed, the Code provided for the right to apply for certiorari or mandamus within 30 days of the decision. The Code also stated that the decision of an arbitrator is only "binding" upon the parties, with no mention of finality. All of these considerations contributed to the court's conclusion that the legislature intended only "some" deference, such that a standard of reasonableness, instead of patent unreasonableness, was appropriate.

[29] The second consideration is the expertise of the tribunal relative to that of the reviewing court on the issue in question. Labour arbitration is a highly specialized field. Specialized language and terms of art are commonly found in collective agreements that might not be encountered elsewhere. There is a large body of reported arbitration decisions that, while not constituting binding precedent, provide the context for the drafting of collective agreements and their interpretation by arbitrators. In short, a labour arbitrator can be considered to be a specialized tribunal, and the decision under review falls squarely within its area of expertise. This consideration, as did the first, also points toward a high degree of deference.

[30] The third consideration relates to the purposes of the legislation, and the legislative provision in particular. The combined purpose of s. 57 and 58 of the Code is to provide a mechanism for the final, binding and non-appealable resolution of disputes between labour and management, so as to avoid work stoppages. The type of disputes to be resolved in this manner include the dispute under consideration in the case before this court, which relates to the interpretation of a clause in the Collective Agreement. Once again, a consideration of this factor leads to the inference that a high degree of deference is intended by the legislature.

[31] The fourth and final consideration relates to the nature of the question: law, fact, or mixed law and fact. The question before the Arbitrator was largely factual in nature. She was called upon to examine the history of the contractual dealings between the parties and the other surrounding circumstances in order to make a finding of fact as to the meaning of the words used in the Collective Agreement. Fact-based decisions normally attract considerable deference, just as a trial judge is entitled to deference with respect to findings of fact made after a trial.

[32] There is, however, a legal issue at play here. The Arbitrator was called upon to consider various sections of the Code, as outlined in par. [13] above, relating to the exclusive power of the Board to issue certificates to create a bargaining unit, and to amend those certificates. She was called upon to determine the essentially legal question as to whether the Collective Agreement could be interpreted in such a manner that it was inconsistent with the certificate originally issued by the Board. Given that courts are well-equipped to determine legal questions, less deference to the administrative tribunal is called for. On a question of pure statutory interpretation, the standard of review that often applies is one of correctness.

[33] Considering the factors outlined above, we are of the view that two standards of review are applicable in this case. As to the interpretation of the words used in the Collective Agreement, it is clear that the legislature intended the highest deference to be given to the decision of the arbitrator, which calls for a standard of review of patent unreasonableness.

[34] With respect to the purely legal question as to whether that interpretation must conform to the geographic parameters of the original certificate, a consideration of the first three factors in the functional and pragmatic approach favours a high degree of deference, while the fourth factor favours very little deference. No one factor is dispositive. The legislature must have contemplated that arbitrators would be called upon to interpret and apply various provisions of the Code during the course of their arbitrations, yet still opted, in s. 58, to preclude any form of court review. Weighing all four factors together, we conclude that the standard of review applicable to the legal question is one of reasonableness.

Analysis

[35] The first issue to be considered is the interpretation of the scope clause arrived at by the Arbitrator. Her reasons for concluding that the parties had a shared intention to broaden the bargaining unit beyond the geographic parameters set out in the certificate, at least to the extent that it encompasses the Cambridge owner-operators, are well-articulated, and there was evidence before her to support her conclusions. Certainly, it cannot be said that her decision "borders on the absurd" (see Voice Construction (supra at par. 18)). We have no difficulty in concluding that her interpretation of the scope clause in the Collective Agreement is not patently unreasonable.

[36] The remaining issue is whether she had jurisdiction to interpret the Collective Agreement in such a way that the scope of the bargaining unit is expanded beyond the geographic parameters set out in the original certificate.

[37] As the Arbitrator noted in her decision, a "bargaining unit" is defined in s. 3(1) of the Code to be either "a unit determined by the Board to be appropriate..." or one "to which a collective agreement applies." In other words, while the Board has the exclusive power to issue a certificate that creates a bargaining unit, the Code contemplates that a bargaining unit can also arise through the instrumentation of a collective agreement

[38] In the present case, the parties began with a bargaining unit that was created by virtue of a certificate issued by the Board in February, 1992. This certificate described the bargaining unit as "dependent contractors employed by Dynamex Express Inc. working in and out of London, Ontario". Almost immediately, however, they expanded the bargaining unit, by agreement, to include Sarnia and Chatham. In 1998, they agreed to a new Collective Agreement which substantially broadened the scope of the bargaining unit, by including owner-operators and by deleting any geographic restriction to London. This was followed by an agreement to include Windsor in the bargaining unit. The new scope clause was also interpreted by the Arbitrator to constitute an agreement to include Cambridge in the bargaining unit.

[39] When the parties agreed to include owner-operators operating out of locations other than London in the bargaining unit, the parties thereby agreed that the Collective Agreement applied to those owner-operators. This enlarged bargaining unit thus created fits within the definition of a "bargaining unit" in s.3(1) above, notwithstanding that no new certificate was issued, and that no amendment to the existing certificate was ordered. The Arbitrator had jurisdiction to recognize a bargaining unit created in this manner. More to the point, it was reasonable for the Arbitrator to interpret s. 3(1) and the words of the Collective Agreement in such a way that the scope of the bargaining unit was expanded by virtue of the agreement of the parties beyond the geographic parameters in the original certificate.

[40] Mr. Bowles, in his factum, alleges that the Arbitrator effectively varied the Board's certificate, which is a power within the exclusive jurisdiction of the Board. That is simply not the case. The Arbitrator states the matter quite succinctly at pg. 18 of her decision [p. 161 L.A.C.]:

In finding that the parties have agreed to language which includes within its parameters the Company's Cambridge owner-operators, I am merely interpreting their agreement. The Code is clear that the Board has jurisdiction to determine whether or not such unit is "appropriate for collective bargaining", and that it will not be bound by the parties' agreement in rendering its decision.

[41] No application has been made to amend the certificate, and it remains unaltered in its original form. This means that it still includes only dependent contractors (not owner-operators) operating in and out of London (not Sarnia, Chatham or Windsor). If and when an application comes before the Board (and we are advised that one is pending), the Board will not be bound by the agreement of the parties, and will be free to impose stricter geographic limitations if, in the view of the Board, it is appropriate to do so.

[42] It may well be that, when the matter does come before the Board, they will decline to include Cambridge in the bargaining unit. In par. [14] above, we noted several authorities, relied on by Dynamex along with others, outlining the Board's concern that enlarging a bargaining unit be voluntary recognition should not become a means of circumventing the certification process in the Code. However, the possibility that the Board will not, when called upon to do so, approve the enlargement of the bargaining unit agreed to by the parties, does not alter the reality that the parties are governed by their agreement until such time as the Board makes a ruling that is inconsistent with it.

[43] Once again, the Arbitrator states the matter in terms with which we agree [p. 161 L.A.C.]:

The possibility that the Board in the exercise of its jurisdiction could conclude that such unit is not appropriate within the meaning of the Code in no way relieves me of my responsibility to interpret the contractual language before me to which the parties have agreed.

[44] It was not the function of the Arbitrator to amend the certificate, and she did not purport to do so. It was her function to interpret the Collective Agreement, and she had jurisdiction to interpret it in a manner that recognized the enlargement of the bargaining unit by the mutual agreement of the parties. Indeed, she had a duty under Article 6.06 not to alter or change any term in the Agreement, which she would have been compelled to do if, as urged by counsel for Dynamex, strict conformity to the original certificate was required.

[45] She was not, nor is this court, sitting as the Board, charged with determining whether, in accordance with the policies of the Board, this enlarged bargaining unit is appropriate, or whether the certification process should have been followed with respect to the Cambridge owner-operators.

[46] For these reasons, the application for judicial review is dismissed.

[47] If the parties cannot agree on the issue of costs, brief written submissions may be made in that regard within 30 days.

Application dismissed.