Court File and Parties
CITATION: City of Toronto v. Canadian Union of Public Employees, Local 79, 2019 ONSC 4045
DIVISIONAL COURT FILE NO.: 427/18
DATE: 20190719
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Morawetz C.J.S.C.J., Swinton and Tzimas JJ.
BETWEEN:
CITY OF TORONTO
Applicant
– and –
CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 79
Respondent
Robert Fredericks, for the Applicant
Douglas Wray, for the Respondent
HEARD at Toronto: June 17, 2019
Reasons for Judgment
Swinton J.
Overview
[1] The applicant, the City of Toronto (the “City”), seeks judicial review of an arbitration award dated May 2, 2018, in which the arbitrator upheld a grievance and found that the City had breached its duty to accommodate a disabled employee. The employee was only able to work part-time because of his disabilities. However, the City had permitted the employee to remain in the full-time bargaining unit for a number of years, with access to better benefits than those available to part-time employees. The arbitrator held that the City discriminated in transferring the grievor to part-time status, because it had failed to demonstrate a change in circumstances or undue hardship.
[2] For the reasons that follow, I would grant the application for judicial review, as the arbitrator’s decision was unreasonable and inconsistent with existing legal principles.
Background Facts
[3] The parties proceeded before the arbitrator on the basis of an Agreed Statement of Facts.
[4] The grievor was first employed by the City in 1991 in a full-time position. He was a Caseworker in the Toronto Employment and Social Services Division and a member of the full-time bargaining unit represented by the respondent, the Canadian Union of Public Employees, Local 79 (the “Union”). Full-time employees normally work 35 or 40 hours per week. There are also three part-time bargaining units for employees who work less than full-time hours. In general, full-time employees receive greater benefits than employees in the part-time units.
[5] In 1999, the grievor was no longer able to work full-time because of his disabilities. He began to work a four day week, but remained in the full-time bargaining unit. The sick plan then in effect allowed him to draw one day a week from his sick bank as income replacement for the day he did not work. After he depleted his sick bank, the grievor was not paid for the day he did not work.
[6] The City and the Union entered into a new collective agreement in July 2009 that included a new Illness or Injury Plan (“IIP”) for employees hired after July 31, 2009. Employees hired prior to this date and who had been subject to the previous sick plan were allowed to opt into the IIP, and the grievor did so. The new plan allowed the grievor to receive pay for 26 weeks a year when he was absent for health reasons, with the result that he was paid for five days a week when he was working fewer days because of his disabilities.
[7] In February 2010, the grievor needed further accommodation, and he began to work three days a week. He continued to be in the full-time bargaining unit. Then in January 2013, the City requested documentation to determine whether the grievor’s need for accommodation was permanent. Medical documentation confirmed that the grievor would need a permanent accommodation that allowed him to work three days a week.
[8] In January 2016, just after the expiry of the collective agreement with the Union, the City put the Union on notice that it was discontinuing its past practice with respect to part-time employees working in the full-time bargaining unit who had no reasonable expectation of returning to full-time hours. After a new collective agreement was signed, the City advised its managers and the Union that its past practice of permitting part-time employment within the full-time unit would cease in September 2016. The City would provide a two-year transitional period during which an employee could work part-time while remaining in the full-time unit. If the employee was not able to resume full-time hours at the end of this period, he or she would be transferred to the part-time unit.
[9] As a result of this change in practice, the grievor was placed in the part-time program for two years. While in that program, he would be required to pay a pro-rated portion of his extended health care and dental benefit coverage. In addition, his vacation pay, IIP sick days and pensionable service would be pro-rated.
The Arbitration Award
[10] The grievor filed a grievance, resulting in the arbitration award under review. The arbitrator allowed the grievance, ordering the City to return the grievor to his status in the full-time unit with full compensation.
[11] The full-time bargaining unit consists of full-time employees of the City in positions set out in a schedule, although full-time employees can opt to change to part-time status in limited circumstances. The arbitrator accepted the City’s argument that the City had the right to unilaterally transfer the grievor from full-time to part-time status, given the language of the collective agreement that specifies how full-time employees can work part-time hours and still remain in the full-time unit. The arbitrator noted that the transfer of the grievor to the part-time unit was an administrative act within the scope of the City’s management rights.
[12] The arbitrator then turned to the issue of discrimination, asking whether the transfer was discriminatory within the meaning of the Human Rights Code, R.S.O. 1990, c. H.19 (the “Code”). She concluded that the transfer of the grievor from full-time to part-time status “in and of itself, did not contravene” the Code (at p. 27). She also found that the City had met its duty of reasonable accommodation by allowing the grievor to work part-time hours while remaining in the full-time unit. Indeed, she stated (at p. 27):
It has, to an extent greater than that strictly required, accommodated him for a period longer than any reported in a similar case. It has accommodated him more comprehensively than it was required by law to do, by maintaining his status in the full-time bargaining unit, and enabling his access to paid benefits and pension.
[13] The arbitrator then held that the City could not alter the grievor’s existing accommodation without demonstrating a change in circumstances and without proof that continuation of the accommodation would amount to undue hardship. As the City had not established a change in circumstances or undue hardship, she held that the City had violated s. 17 of the Human Rights Code. She stated (at p. 29):
Just as it is required to establish accommodation for an employee who suffers from a disability, an employer is required to maintain that accommodation for so long as the circumstances remain unchanged, and the accommodation remains reasonable. The unilateral withdrawal of that accommodation, in my view, absent justification or claim of undue hardship, is a violation of section 17 of the Ontario Human Rights Code.
The Standard of Review
[14] The parties agree that the standard of review is reasonableness, as the arbitrator was interpreting the collective agreement and applying provisions of the Code, a statute that arbitrators have the authority to apply (see s. 48(12)(j) of the Labour Relations Act, 1995, S.O. 1995, c.1, Sched. A).
The Issue
[15] The principal issue in this judicial review is the reasonableness of the arbitrator’s conclusion that the City discriminated against the grievor.
Analysis
[16] The standard of reasonableness is a deferential standard. The court must determine if the decision falls within a range of reasonable, acceptable outcomes, given the facts and the applicable law. It also considers the process of reasoning, looking for transparency, intelligibility and justification in the decision-making process (Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190 at para. 47).
[17] Pursuant to the collective agreement, the arbitrator held, the City could exercise its management rights to transfer the grievor to the part-time unit because he could not work full-time hours. Therefore, the main issue in this judicial review is the reasonableness of the finding that the City violated s. 17 of the Code. In my view, the arbitrator’s decision with respect to the application of s. 17 of the Code is not reasonable. It is not supported by existing legal principles nor is the reasoning process transparent and intelligible.
[18] Section 17 provides:
(1) A right of a person under this Act is not infringed for the reason only that the person is incapable of performing or fulfilling the essential duties or requirements attending the exercise of the right because of disability.
(2) No tribunal or court shall find a person incapable unless it is satisfied that the needs of the person cannot be accommodated without undue hardship on the person responsible for accommodating those needs, considering the cost, outside sources of funding, if any, and health and safety requirements, if any.
(3) In determining for the purposes of subsection (2) whether there would be undue hardship, a tribunal or court shall consider any standards prescribed by the regulations.
[19] The arbitrator correctly stated that she was bound by the Court of Appeal’s decision in Ontario Nurses’ Association v. Orillia Soldiers Memorial Hospital (1999), 1999 3687 (ON CA), 42 O.R. (3d) 692 (“Orillia Hospital”). However, she candidly expressed her preference for a different approach that had developed in the arbitral jurisprudence, but was rejected by the Court of Appeal in Orillia Hospital.
[20] In that case, the Court of Appeal held that the Code does not require an employer to make contributions to benefit programs for a disabled employee who is off work, since contributions to benefit programs are a form of compensation. At para. 27, the Court stated,
Disabled nurses do not receive this compensation because they are not providing services to their employer. It is not prohibited discrimination to distinguish for purposes of compensation between employees who are providing services to the employer and those who are not.
[21] The Court also held that even if a disabled employee is the subject of constructive discrimination within s. 11 of the Code because he or she does not receive employer contributions to benefits, “[r]equiring work in exchange for compensation is a reasonable and bona fide requirement” (at para. 58). The Court explained that accommodation refers to workplace adjustments to allow the employee to work (at para. 55):
The duty is on the employer to take all steps short of undue hardship to accommodate the needs of the person discriminated against so that they can compete equally with the other employees.
[22] In the present case, the arbitrator concluded that the City had met its legal duty to accommodate the grievor’s disabilities, and had indeed gone beyond the strict legal requirements by keeping him in the full-time bargaining unit while he was working part-time hours.
[23] At this point of her reasons, one would have thought that the logical conclusion would be that the grievance must fail. Employees in the full-time unit receive greater benefits than those working part-time hours. For example, the City pays 100% of the cost of benefits for full-time employees in the full-time unit, while the City pays a pro-rated percentage for those in the part-time unit. As well, some of the benefits are different in terms of payment for shifts missed because of sickness and injury. In accordance with Orillia Hospital, the employer does not discriminate by failing to provide the added benefits to which a full-time employee is entitled to a person working part-time hours, even if the person is working part-time because of disability. The difference in treatment with respect to compensation and benefits is because of the number of hours worked, not because of disability, and the employer is not required to compensate the disabled employee for time not worked.
[24] However, the arbitrator did not stop her analysis here. She decided that the accommodation that had been provided to the grievor was “the provision of part-time hours within the full-time agreement, and continuation of the paid benefits and pension calculation of a full-time member” (at p. 29). She then created a new test to be applied in respect of s. 17 of the Code when an employer changes an existing accommodation (at p. 28):
i) Has there been a change in the employee’s condition?
ii) Has there been a relevant change in the nature of the work or in the employer’s circumstances that affects the reasonableness of the accommodation?
iii) Would continuation of the accommodation create a situation of undue hardship for the employer?
[25] This test was not advanced by the Union in its argument before the arbitrator. Both counsel for the City and the Union in the hearing before this Court stated that they could find no case law supporting this test.
[26] In my view, the arbitrator erred in adopting and applying this test and reached an unreasonable conclusion for a number of reasons. First, this was not a test put forth by the parties, nor was it fully argued before her.
[27] Second, there is no jurisprudence to support this test. Her task was to apply s. 17 of the Code in light of the Court of Appeal’s holding in Orillia Hospital. According to that case, the requirement to provide work in return for compensation is a reasonable and bona fide occupational requirement. Thus, to be eligible for the benefits plans and employer contributions under the full-time collective agreement, the grievor had to demonstrate a reasonable expectation that he would be able to work full-time, and he could not do so. Thus, he did not meet the bona fide occupational requirement – performance of work – that would entitle him to the added benefits.
[28] Third, this case does not turn on the scope of the duty to accommodate or undue hardship. Accommodation had been provided for the grievor in the form of part-time work because he was not able to work full-time hours because of his disabilities. As the Supreme Court of Canada observed in Hydro-Québec v. SCFP-FTQ, 2008 SCC 43, [2008] 2 S.C.R. 561 at para. 15:
However, the purpose of the duty to accommodate is not to completely alter the essence of the contract of employment, that is, the employee’s duty to perform work in exchange for remuneration.
[29] Fourth, the arbitrator not only fails to cite authority for this new test; she also reaches a conclusion that is inconsistent with other arbitration decisions applying Orillia Hospital, such as OPSEU v. Ontario (Liquor Control Board) (2009), 2009 15418 (ON GSB), 182 L.A.C. (4th) 116 (Gray); OPSEU v. Ontario (Ministry of Transportation), 2003 CarswellOnt 8621 (Brown); and SaskPower v. Unifor (Local 649), 2015 CarswellSask 806 (Ish). While she cites these cases and others (at pp. 25-26), and she states that the arbitral jurisprudence supports the City’s position (at p. 27), she fails to explain why she took a different approach in this case. While she was not technically bound by those cases, she fails to justify the distinctive approach she adopted.
[30] Given my conclusion that the arbitrator’s decision respecting discrimination was unreasonable, it is not necessary to deal with the City’s alternative argument - that she failed to consider the evidence that would support the City’s claim of undue hardship and would demonstrate a change in circumstances.
The appropriate remedy
[31] That brings me to the issue of remedy. The Union argues that the application for judicial review should be dismissed, even if the decision is found to be unreasonable. The Union submits that relief in the nature of certiorari is discretionary equitable relief, and that relief should be denied in this case because of the City’s 17 year accommodation of the grievor in the full-time unit.
[32] The Union relies on Frito-Lay Canada Ltd. v. Milk and Bread Drivers, Dairy Employees Caterers and Allied Employees, Local Union No. 647, 1976 CarswellOnt 993 (C.A.), a case in which the Court of Appeal upheld a Divisional Court decision refusing to quash an arbitration award because of the employer’s conduct. In that case, the grievor had been dismissed for consuming alcohol while on duty, and the collective agreement provided a specific penalty of discharge if alcohol was consumed during working hours. However, the grievor’s sales manager had sanctioned and condoned the practice of drinking while on duty (at paras. 4 and 7), and the Court denied relief in the application for judicial review because of the employer’s conduct.
[33] This is not a case like Frito-Lay. The City here did not engage in misconduct. Rather it went beyond its legal duty to accommodate the grievor for a long period of time, as the arbitrator acknowledged. In doing so, it provided a gratuitous benefit to him throughout that period. I see no reason to exercise the Court’s discretion to deny the relief sought by the City in this application for judicial review.
Conclusion
[34] Accordingly, the application for judicial review is granted, and the arbitration award is quashed. There is no need to refer this matter back to arbitration, as the arbitrator found that the collective agreement allowed the City to transfer the grievor to the part-time unit. Doing so was not discriminatory, given the holding in Orillia Hospital. The arbitrator did not make a finding of estoppel against the employer based on past practice. Therefore, the grievance should be dismissed.
[35] Costs to the City are fixed at $5,000.00, an amount agreed upon by the parties.
Swinton J.
I agree
Morawetz C.J.S.C.J.
I agree
Tzimas J.
Released: July 19, 2019
CITATION: City of Toronto v. Canadian Union of Public Employees, Local 79, 2019 ONSC 4045
DIVISIONAL COURT FILE NO.: 427/18
DATE: 20190719
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Morawetz C.J.S.C.J., Swinton and Tzimas JJ.
BETWEEN:
CITY OF TORONTO
Applicant
– and –
CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 79
Respondent
REASONS FOR JUDGMENT
Swinton J.
Released: July 19, 2019