Court File and Parties

CITATION: Revera Retirement v. Tim Armstrong, 2010 ONSC 3041

COURT FILE NO.: 539/09

DATE: 2010-06-08

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Revera Retirement LP – Pine Villa and Terrace Gardens Retirement Homes, Applicants

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Tim Armstrong, Jeffrey Sack, Philip Wolfenden and Service Employees International Union, Local 1 Canada, Respondents

BEFORE: McCombs, Swinton and Wilton-Siegel JJ.

COUNSEL: Thomas A. Stefanik and Carolyn Johnson, for the Applicants

Douglas J. Wray, for the Respondent Union, Service Employees International Union, Local 1 Canada

HEARD AT TORONTO: May 19, 2010

Endorsement

[1] The applicants, Revera Retirement LP – Pine Villa and Terrace Gardens Retirement Homes (the “Employer”), seek an order quashing an interest arbitration award dated October 2, 2009 (the “Award”) of the majority of a board of arbitration (the “Board”) established pursuant to the Hospital Labour Disputes Arbitration Act, R.S.O. 1990, c. H.14, as amended (the “Act”).

[2] The Board conducted a hearing on June 4, 2009 concerning seven substantive issues on which the parties were unable to agree in the negotiation of the collective agreement covering their relationship for the period January 1, 2008 to December 31, 2010. On this judicial review, the applicant challenges only the wage award.

[3] Both parties made written and oral submissions to the Board. Broadly, the Employer submitted that, in making its award, the Board should have regard to the replication principle, the total compensation principle and current economic circumstances. It proposed increases of 1.5% in each of the three years of the collective agreement. The respondent union, being the Service Employees International Union, Local 1 Canada (the “Union”), submitted that the Board should have regard only to settlements in the retirement home sector, which it considered was not experiencing financial and/or competitive pressures and job losses. It sought increases of approximately 15%, 3% and 2.6% in each of the three years of the collective agreement, plus a 30¢ adjustment in each of the last two years for the RPN classification, in order to achieve parity with Central Nursing Homes.

[4] In the Award, the majority of the Board referred not only to the submissions of the Employer and the Union, but also to two additional developments that had occurred since the hearing in which the parties presented their submissions. In paragraph 6, the majority noted the terms of a settlement announced on August 21, 2009 between the Toronto District School Board and the Ontario Secondary School Teachers Federation, District 12 (the “Teachers’ collective agreement”) showing a general wage increase of 3% in each of four years. In addition, in paragraph 7, the majority noted the results of four salary surveys by Hewitt Associates, Mercer Canada, Watson Wyatt and Morneau Sobeco published on September 12, 2009 showing estimated actual wage increases across Canada in 2009 ranging between 2.2% and 3.1%, and average projected increases in 2010 between 2.5% and 3.1%. These developments occurred after the hearing of the parties’ oral submissions to the Board.

[5] The majority stated that, having weighed all the relevant factors, it rejected the Union’s request for parity with Central Nursing Home wage rates. The wage increase awarded was as follows:

January 1, 2008 2.6%

January 1, 2009 1.45%

June 1, 2009 1.45%

January 1, 2020 1.45%

June 1, 2010 1.45%

[6] Both parties proceed on the basis that the majority of the Board considered the information described above in paragraph 4 in rendering the Award. The Employer argues that, by doing so without notice of its intention to do so, without the consent of the Employer, and without giving the Employer an opportunity to make submissions regarding the relevance of such information for the wage award, the Board denied it procedural fairness. Alternatively, the Employer argues that, in basing its decision on information and material not contained in the evidence before it, the Board exceeded its jurisdiction.

[7] We have concluded that the application should be dismissed for the following reasons.

[8] In this proceeding the arbitration was an interest arbitration rather than a rights or grievance arbitration. The Supreme Court has recognized that, while a rights or grievance arbitration is adjudicative, an interest arbitration is more or less legislative in nature: see Canada Union of Public Employees (CUPE) v. Ontario (Minister of Labour), 2003 SCC 29, [2003] 1 S.C.R. 539 (C.A.) at para. 53. Of relevance to the present proceeding is the Supreme Court’s endorsement in the CUPE decision at para. 53 of the views of Professor Joseph Weiler that successful interest arbitrators come to their task familiar with, among other things, the current issues in labour relations as well as the bargaining of the parties to various collective agreements in relevant public sector industries.

[9] The Supreme Court has also recognized that the duty of fairness is flexible and may vary based on all of the circumstances: see Baker v. Canada (Minister of Citizenship and Immigration), 1999 699 (SCC), [1999] 2 S.C.R. 817 at paras. 21-28, which sets out five factors to be considered in determining the required content of the duty of fairness.

[10] The issue on this application is the content of the duty of fairness that operates in the context of an interest arbitration under the Act. Clearly, that duty requires that the parties must be given a real opportunity to make submissions about the issues before the arbitration board. This requirement is made explicit in section 6(16) of the Act, which reads:

Subject to the other provisions of this section, a board of arbitration shall determine its own procedure but shall give full opportunity to the parties to present their evidence and make their submissions.

[11] Moreover, it is probable that section 6(16) also requires that an opportunity to comment be given with respect to evidence on which the Board proposes to base a decision where that evidence has not been presented by the parties and is not the proper subject of judicial notice: see, for example, Cronk v. Canadian General Insurance Co., 1995 814 (ON CA), [1995] O.J. No. 2751 (C.A.) at paras. 25 and 27.

[12] The facts in the present proceeding are, however, very different. In reaching their conclusion, the majority of the Board expressly states that they gave full consideration to the submissions of the parties including the trends in settlement to which they referred. From the wage award, it is clear that the majority rejected the Union contention that it should have regard only to settlements in the retirement home sector and, instead, also took into account settlements in other sectors which were constrained by the then-current recessionary economic environment. It is in this context that the Board then went on to note recent developments in respect of the broad public sector, by referring to the settlement of the Teachers’ collective agreement, and in respect of actual and projected wage increases, by referring to the four published salary surveys throughout Canada.

[13] The reference to “noting” the information, rather than use of a stronger term such as reliance, as well as the nature of the information itself when closely examined, indicates that the Board treated it as supplementary in nature to the material that the parties, in particular the Employer, supplied to the Board. It is also relevant that the information was public and there is no issue as to its accuracy.

[14] In this context, it appears the Board’s use of this additional information was confirmatory, showing that the Board’s decision was consistent with current information, rather than the basis for that decision. We are satisfied from the Award that the Board’s decision was ultimately based on the material submitted by the parties, as well as the general knowledge and experience expected of interest arbitrators, rather than on this additional information to the exclusion of the evidence submitted by the parties.

[15] While it might have been preferable to have provided a further opportunity to comment on this information, the Board’s use of such information is consistent with the principle set out in Regina v. Schiff et al., ex parte Trustees of Ottawa Civic Hospital, 1970 299 (ON CA), [1970] O.J. No. 1557 (C.A.) at para. 6. More generally, the Board’s use of such information is consistent with the expectation of the more legislative function of an “interest” arbitrator contemplated by the Supreme Court in the CUPE decision.

[16] Accordingly, the application of the Employer is dismissed. Costs in the amount of $5,000 are awarded in favour of the Union payable forthwith.

McCombs J.

Swinton J.

Wilton-Siegel J.

Date: June 8, 2010