CITATION: National Grocers Co. Ltd. V. United Food and Commercial Workers Union, Local 1000A, 2020 ONSC 5924
DIVISIONAL COURT FILE NO.: 748/18
DATE: 20201116
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Penny, Kristjanson, Favreau JJ
BETWEEN:
NATIONAL GROCERS CO. LTD.
Applicant
– and –
UNITED FOOD AND COMMERCIAL WORKERS UNION, LOCAL 1000A
Respondent
Christopher D. Bredt, Matthew L.O. Certosimo and Stephanie Young for the Applicant
Jeffrey M. Andrew and Balraj Dosanjh for the Respondent
HEARD (by Videoconference): July 28, 2020
REASONS FOR JUDGMENT
Overview and Issues
[1] This is an application for judicial review of two related decisions of a labour arbitrator in a grievance filed by the respondent union. The grievance concerns the threshold number of hours worked in a week before overtime becomes payable for truck drivers who deliver grocery products to Loblaws grocery stores from a distribution centre near Cambridge, Ontario.
[2] The Collective Agreement set that threshold at 60 hours of work in a week. The threshold for overtime pay is determined by the Employment Standards Act, 2000, S.O. 2000, c. 41. The relevant provisions are s. 22 of the ESA (which sets 44 hours in a week as the standard threshold) and s. 18 of O. Reg. 285/01 (which creates an exception to s. 22 by setting the threshold at 60 hours in a week for qualifying employers).
[3] The arbitrator found that the applicant did not qualify for the 60-hour threshold under s. 18 of the Regulation and that, by purporting to set the threshold at 60 hours, the Collective Agreement was in violation of the “no contracting out” provisions of the ESA. At issue in this application is whether the arbitrator’s interpretation of s. 18 of the Regulation in his initial award was reasonable and whether the arbitrator’s subsequent remedial order (finding the applicant in breach of the Collective Agreement and the ESA and requiring the applicant to start paying, immediately, overtime in accordance with the 44-hour per week threshold) was made in contravention of the rules of natural justice.
[4] Specifically, there are four issues in this application:
(1) the standard of review;
(2) whether the arbitrator’s interpretation of s. 18(2)1 of the Regulation was reasonable;
(3) whether the arbitrator’s interpretation of s. 18(2)2 of the Regulation was reasonable; and
(4) whether the arbitrator’s remedial order of July 22, 2019 was made in disregard of the principles of natural justice.
[5] For the reasons that follow, I would allow the application for judicial review on the basis that the arbitrator’s interpretation of s. 18(2)1 of the Regulation is unreasonable, but dismiss the application for judicial review on the other grounds
Background
[6] The applicant is a subsidiary of Loblaws Inc. and has been appointed to manage all aspects of Loblaws business under a management agreement.
[7] The applicant operates a distribution centre at Maple Grove, Ontario, for the supply of grocery products to Loblaws grocery stores as well as Loblaws franchisees and independent businesses which purchase these grocery products. Delivery trucks, dispatched by the applicant out of Maple Grove, deliver these grocery products. Employees of the applicant in the bargaining unit are drivers who, in the course of their duties, are assigned deliveries by the applicant and then depart in delivery trucks from Maple Grove with grocery products for delivery to grocery stores, via highways, in accordance with instructions provided by the applicant.
[8] The Collective Agreement in issue was negotiated and ratified in 2010. Article 10.07(a) of the Collective Agreement is at the heart of this application. Article 10.07(a) applies to full-time truck drivers and provides for overtime at the rate of one and one-half times the employee’s regular salary for hours worked in excess of 60 hours in a week:
Overtime at the rate of one and one-half (1 ½) times the employee’s regular hourly rate of pay shall be paid for all hours worked in excess of sixty (60) hours in a week.
Article A.08 applies to part-time drivers and contains the identical provision for overtime pay.
[9] The ESA, in s. 22, provides, subject to variation by regulation, that an employer “shall pay an employee overtime pay of at least one and one-half times his or her regular rate for each hour of work in excess of 44 hours in each work week.”
[10] However, O. Reg. 285/01 enacts exemptions and special rules under the ESA. The threshold for overtime pay in the “highway transport” industry is dealt with in special rules established in s. 18 of the Regulation. Despite s. 22 of the ESA, an employer under the highway transport special rules in s. 18 shall pay employees “overtime pay for each hour worked in excess of 60 hours in a workweek, at an amount not less than one and one-half times the employee’s regular rate.” Under s. 18(2) of the Regulation, the 60-hour threshold applies in three circumstances, to “an employee who is the driver of any of the following”:
a truck whose operator held an operating license under the former Act on December 31, 2005.
A truck whose operator held a certificate of intercorporate exemption under the former Act on December 31, 2005, if after that date the truck is operated to carry, for compensation, goods of another person who is not an affiliated corporation under the former Act, such that the operator would be required to hold an operating license under the former Act if it were still in force.
A truck that is operated to carry goods of another person for compensation, if the operator,
i. did not hold an operating license or certificate of intercorporate exemption under the former Act on December 31, 2005, and
ii. would be required to hold and operating license under the former Act if it were still in force.
[11] The “former Act” is the Truck Transportation Act, R.S.O. 1990, c. T.22 (the “TTA”) (repealed effective January 1, 2006). Under the combined effect of the TTA and O. Reg. 285/01, s. 18(7), “operate” means “to cause to be driven on a highway” and “operator” has a corresponding meaning.
[12] It is common ground that the applicant was issued an operating licence under the TTA, effective June 15, 1990, by the Registrar of Motor Vehicles, Ontario Ministry of Transport, for the carriage of goods between points in Ontario, which remained in effect on December 31, 2005.
[13] Four years after ratification of the Collective Agreement, the respondents filed a grievance, seeking additional overtime pay for all bargaining unit employees “back to the date of ratification of” the Collective Agreement. The respondents alleged that the applicant had violated past practice, the ESA, and all related clauses that may be applicable in the Collective Agreement by not paying overtime at a rate of one and one- half times the employee’s regular hourly rate of pay for all hours worked “in excess of forty four [44] hours in a week.”
[14] The hearing of the grievance was bifurcated such that only liability was heard and determined in the initial award. The issue of remedy was remitted back to the parties, as they had requested, and the arbitrator remained seized to deal with remedy if it was not otherwise resolved by the parties.
[15] The arbitrator’s initial award granting the grievance in favour of the respondents was released on September 27, 2018. While the issue of remedy remained outstanding, the arbitrator issued three supplemental awards. The first supplemental award dealt primarily with procedural matters in anticipation of the remedy stage of the arbitration. The second supplemental award amended the timetable and procedure for the remedy stage of the arbitration, at the parties’ request.
[16] There then intervened an issue relating to post-hearing disclosure, by the respondents, of a material document called a certificate of inter-corporate exemption (“CIE”). The CIE was potentially relevant to the second of the three grounds of exemption under s. 18 of O. Reg. 285/01. In his third supplemental award, issued on July 22, 2019, the arbitrator dealt with the implications of disclosure of the CIE, concluding that it did not change his prior conclusions. The arbitrator, however, also found the applicant to be in violation of the Collective Agreement and the ESA and ordered the applicant to pay, starting immediately, overtime after 44 hours of work in a week from the date of the initial award.
[17] It is these decisions that give rise to the application for judicial review.
The Arbitrator’s Decisions
[18] Before the arbitrator and before this court, the applicant relies on ss. 18(2)1 and 18(2)2 of the Regulation; that is, the applicant maintains that it qualified for the higher 60-hour per week threshold for overtime pay under the Regulation because it
(i) was an operator and held an operating licence under the TTA on December 31, 2005 (s. 18(2)1); and
(ii) held a CIE under the TTA on December 31, 2005 and carried goods of another, unaffiliated, person for compensation (s. 18(2)2).
[19] These two issues were addressed in the arbitrator’s initial award of September 27, 2018.
Was the Applicant an Operator and Did It Hold an Operating Licence Under the TTA on December 31, 2005?
[20] The arbitrator commenced his analysis of the exception available to employers under s. 18 of the Regulation with the observation that the ESA is remedial legislation subject to a liberal interpretation to ensure its objects are obtained according to its true meaning, spirit and intent. He went on to conclude that any restriction of a minimum employment standard (such as the 44 hour per week threshold for overtime pay in s. 22 of the ESA) permitted under s. 18, that represents a cutback or reduction in the broader right to a benefit, must be narrowly and strictly construed. In the circumstances, the onus was on the employer to demonstrate on a balance of probabilities that the factual circumstances of the highway transport drivers in the bargaining unit fall squarely within one of the enumerated exceptions to the general rule establishing the minimum overtime threshold.
[21] The arbitrator also adopted the principle of statutory interpretation that statutes dealing with similar subjects must be interpreted coherently. The arbitrator relied on Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed. (Markham: LexisNexis, 2014) (QL) at §13.26 for the proposition that the provisions of related legislation are read in the context of the others and the presumption of coherence and consistent expression apply as if the provisions of these statutes are part of a single Act. Definitions in one statute are taken to apply in the others and any purpose statements in the statutes are read together. The arbitrator specifically relied on a passage from para. 61 of Pointe-Claire (Ville) c. S.E.P.B., Local 57, 1997 390 (SCC), [1997] 1 S.C.R. 1015: “[T]he principle that statutes dealing with similar subjects must be presumed to be coherent means that interpretations favouring harmony among those statutes should prevail over discordant ones.”
[22] Applying these principles, the arbitrator found that: the provisions of the TTA referenced in s. 18 of the Regulation must be read in concert with the Highway Traffic Act, R.S.O. 1990, c. H.8 (the “HTA”); the presumptions of coherence and consistent expression apply as if these two statutes were part of a single Act; and, definitions in one statute must be taken to apply in the other and any purpose statements in the two statutes must be read together.
[23] Section 18(2)1 of the Regulation provides that an employer’s ability to require transport drivers to work 60 hours before receiving the overtime premium applies to, “a truck whose operator held an operating license under the former Act on December 31, 2005.” The arbitrator found that while there was no question that the applicant held an “operating licence” under the TTA on December 31, 2005, the applicant had not established that it was an “operator” of the vehicles.
[24] The arbitrator found that the TTA was “regrettably circuitous and consequently unclear” about the requirement to be an “operator.” He therefore turned to the HTA definition of operator, which, in s. 16(1), means “the person directly or indirectly responsible for the operation of a commercial motor vehicle including the conduct of the driver of, and the carriage of goods or passengers, if any, in, the vehicle or combination of vehicles.” Crucially, for his determination in this case, the arbitrator also relied on s. 16(2) of the HTA which, he said, states unequivocally that “no person shall drive or operate a commercial motor vehicle on a highway unless the operator is the holder of a valid CVOR certificate.” He also relied on s. 16(3), which requires every driver of a commercial motor vehicle to carry an original or copy of, “the CVOR certificate issued to the operator of the vehicle.” CVOR stands for “commercial vehicles operation registration.”
[25] The arbitrator concluded that a person identified as an operator for the purposes of the HTA must be the same person who is an operator under the former TTA; they cannot be different persons without creating an inconsistency in the practical effect of the two statutes. Thus, when para. 1 of s. 18(2) of the Regulation refers to “a truck whose operator held an operating license under the TTA,” he concluded that the Regulation is stipulating that the person or corporate entity as expressly defined in the HTA is the “operator,” which includes the two requirements that the “operator” must hold a valid CVOR certificate under the HTA and that every driver of one of the operator’s commercial vehicles must carry a copy of the CVOR certificate issued to the “operator” of the vehicle.
[26] Based on this interpretation of the Regulation, the arbitrator found, on the evidence, that as of August 1, 2010 when the Collective Agreement came into effect, the CVOR that had been issued to the applicant had expired (as of May 10, 2010) and that it was never renewed. The drivers, after May 10, 2010, used the unique CVOR issued to Loblaws Inc. for their day-to-day functions, as the applicant no longer had one. This evidence drove the arbitrator to the conclusion that the applicant was not the “operator” of the trucks at issue in the grievance but rather “the vehicles were in law operated by Loblaws Inc., which I must conclude is the “operator” for purposes of the TTA as well.”
[27] On this interpretation of the Regulation, the applicant had, based on the evidence, an “operating licence” under the TTA as of December 31, 2005, while Loblaws Inc. did not. Conversely, Loblaws was, after May 2010, the “operator” (because it held the only CVOR) while the applicant was not. Thus, neither the applicant nor Loblaws Inc. met the two-part requirement of s. 18(2)1 that an “operator” must hold an “operating licence” under the TTA.
Did the Applicant Hold a CIE on December 31, 2005 and Carry Goods of an Unaffiliated Person for Compensation?
[28] The arbitrator found that there are two requirements to the exemption stipulated in s. 18(2)2 that must be satisfied in order to qualify for the increased overtime threshold of 60 hours. First, the operator must have held a CIE under the TTA on December 31, 2005. Second, after that date the operator must have used the trucks to carry goods of another, unaffiliated person for compensation.
[29] The arbitrator found that neither of these conditions had been satisfied on the evidence. The evidence established that Loblaws held a CIE under the TTA at some point prior to its repeal on January 1, 2006, but the applicant had not established that Loblaws held such a certificate on December 31, 2005.
[30] The arbitrator also found, at para. 143 of his initial award, that, even if he was wrong on the first requirement, the evidence did not establish that the applicant carried goods of another, unaffiliated person for compensation. The arbitrator found, regarding all outbound trips (representing more than 50% of the drivers’ activity), that the goods transported belonged to the applicant or to Loblaws.
[31] The backhaul, or inbound trips, however, presented a more difficult scenario. The arbitrator reviewed the evidence and found that the vast majority of the goods being returned in these inbound trips had been repurchased by Loblaws from the particular grocery store of origin. As such, these were not goods of another, unaffiliated person but, rather Loblaws’ own goods.
[32] The arbitrator then considered the so-called “paper backhauls,” between paper mills in the north and destinations in southern Ontario. The arbitrator found that these represented less than 2% of the total backhauls driven by bargaining unit members and were thus not material to the core functions of the drivers. In addition, the arbitrator found that the applicant had failed to submit any evidence on the nature of the contractual relationships between the company and the other, intermediary, trucking agencies through which these paper backhauls were arranged. The arbitrator drew an adverse inference as to the legitimacy of these arrangements and therefore gave no weight to the evidence of this minor feature of the applicant’s business in any event.
[33] Based on these findings, the arbitrator concluded that the applicant had not discharged its onus to prove that Loblaws held an active CIE “as of the critical date of December 31, 2005” or that the applicant was “engaged in a “for hire” arrangement of transporting the goods of another person for compensation.” Accordingly, the exemption under s. 18(2)2 of the Regulation was not available to the applicant either.
The Third Supplemental Award of July 22, 2019
[34] Following the release of the initial award, the arbitrator remained seized of the issue of penalty if the parties were unable to agree.
[35] In the intervening months, the arbitrator issued three supplementary decisions primarily dealing with procedural matters relating to the outstanding issue of penalty. However, in the midst of dealing with the pending issue of penalty, on December 21, 2018, the respondent produced to the applicant a copy of a “Loblaws Inc. Certificate of Intercorporate Exemption, effective July 25, 1991, with National Grocers Co. Ltd., among others, identified as affiliated.” This CIE contained no expiry date. Following some initial skirmishing, the respondent ultimately consented to the introduction of this document into evidence before the arbitrator and for the arbitrator to reconsider his decision of September 27, 2018 on this issue. The scope of reopening the hearing, and for the introduction of any other new evidence, however, remained in considerable dispute.
[36] Following both written and oral submissions, the arbitrator concluded that the applicant “first has to discharge the burden to show that it was subjected to a form and level of misconduct by the Union amounting to a fundamental breach of the arbitration provisions of the collective agreement justifying the invocation of the arbitrator’s continuing residual authority to remedy that breach.” The arbitrator found there was no evidence that the respondent Union or any of its responsible officials “knowingly suppressed” the CIE during the arbitration proceedings. The arbitrator also viewed the scope of the applicant’s proposed new evidence as “an attempt to bolster its original case with additional evidence (as opposed to “new” evidence).” The arbitrator, in any event, considered the effect of the applicant being in possession of a valid CIE as of December 31, 2005 and concluded, given his earlier findings in para. 143 of the initial award, that it made no difference to his determination on the merits. The applicant’s motion to reopen the evidence was therefore denied.
[37] The arbitrator then, however, in a concluding paragraph (para. 146) of this supplemental award, went on to find that:
(a) the applicant had failed or refused to pay an overtime premium to its highway transport drivers of 1 ½ times their regular hourly rate after 44 hours of work per week from the September 27, 2018 award to the present date; and
(b) the applicant was in continuing violation of the collective agreement and the ESA.
As a result of these findings, the arbitrator ordered the applicant to cease these violations forthwith and remitted the matter back to the parties for continued good faith discussions on the matter.
Prematurity
[38] At the outset of the hearing of this matter, counsel were asked to address the issue of prematurity, given that the issue of remedy in the grievance was still before the arbitrator and had yet to be resolved. Counsel’s attention was directed to Air Canada v. Canadian Union of Public Employees, Air Canada Component, 2020 ONSC 847 (Div. Ct.). In Air Canada, the arbitrator remained seized of remedial issues which had not yet been decided. Corbett J., writing for a full panel of this Court, stayed the judicial review pending the arbitrator’s decision on remedy. Among other things, Corbett J. raised concerns about overlap in work, wasting judicial resources and the potential for inconsistent decisions on review.
[39] We were told that the hearing before the arbitrator was, from the outset, bifurcated between “liability” and “remedy” and that it “made sense” to bifurcate these issues before this Court as well. The parties both submitted it would be of assistance if this Court ruled on the threshold questions raised in the application for judicial review. Both sides submitted that there would be no, or “not likely much,” overlap between the remedial issues and the issues on the merits. Counsel for the Union also submitted that the remedial issues would involve an employee-by-employee analysis and that the nature of the evidence to resolve remedial questions would be very different from the evidence already filed on the liability issues. Both sides referred to efficient use of resources and that a lot of time and effort would be wasted if the judicial review on the “merits” did not proceed as scheduled.
[40] In the circumstances, the panel reluctantly agreed to proceed with the application. During the course of argument, however, it emerged that the hearing on remedy had already taken place before the arbitrator and that the arbitrator had that matter under reserve. This was not a circumstance disclosed to the Court during submissions on the question of prematurity at the outset of the hearing. This was an important fact which may well have had an impact on the exercise of the Court’s discretion whether to proceed with the application for judicial review. It ought to have been disclosed. This is particularly the case where the applicant’s third ground of judicial review is based on the allegation that the arbitrator ‘jumped the gun’ and made findings and an order in respect of remedial issues without a proper hearing.
[41] There is a well-settled body of law dealing with the question of prematurity, of which Air Canada is but a recent example. Whenever a decision maker remains seized of a material issue in dispute, parties to a judicial review should come prepared to address the question of prematurity, not only at the oral hearing but from the outset in their written material as well. This was, regrettably, not done here, which led to a somewhat ‘off-the-cuff’ response to the Court’s concerns and a lack of full disclosure of material circumstances. We expect better, particularly from counsel of the experience and skill involved here.
[42] While the panel decided to proceed with the application on the merits and to render this decision, this should not be taken as permission in future cases to seek judicial review of the first part of a bifurcated hearing. The requirement that there be “exceptional circumstances,” as described in many cases, still prevails.
The Standard of Review
[43] The parties agree that the standard of review of the issues regarding the interpretation of O. Reg. 285/01 in this case is reasonableness: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65. Issues of natural justice and procedural fairness are effectively assessed on a correctness basis.
[44] Reasonableness, although a single standard, must take account of context. The restatement of the standard of review in Vavilov, therefore, sets out additional principles, factors and considerations for the application of reasonableness review to the circumstances of a particular case. I will briefly outline some of those which have particular relevance to the circumstances of this case.
[45] In performing reasonableness review, the court must focus on justification and methodological consistency. Reasonableness review is concerned with both the decision-making process and with its outcomes. A reasonable decision is one that is based on an internally coherent and rational chain of analysis and that is justified in relation to the facts and law that constrain the decision maker: Vavilov, at para. 85.
[46] A reviewing court must begin its inquiry into the reasonableness of the decision by examining the reasons provided with respectful attention and seeking to understand the reasoning process followed by the decision maker to arrive at its conclusion: Vavilov, at para. 84. Reasonableness is concerned mostly with the existence of justification, transparency and intelligibility. It is not enough for a decision to be justifiable; the decision must also be justified by way of its reasoning process. Although a decision may have reached a not unreasonable outcome, it will nevertheless be unreasonable if arrived at the on the basis of an unreasonable chain of analysis: Vavilov, at para. 87.
[47] What is reasonable in a given context will always depend on the constraints imposed by the legal and factual context of the particular decision under review. These contextual constraints dictate the limits and contours of the space in which the decision maker may act and the types of solutions that it may adopt: Vavilov, at para. 90.
[48] The burden is on the party challenging the decision to show that it is unreasonable. Before a decision can be set aside, the reviewing court must be satisfied that there are sufficiently serious shortcomings in the decision such that it cannot be said to exhibit the requisite degree of justification, intelligibility and transparency. Alleged flaws must be more than merely superficial or peripheral to the merits of the decision. The court must be satisfied that the flaws are sufficiently central or significant to render the decision unreasonable: Vavilov, at para. 100.
[49] Under the second component of the reasonableness test, the elements of the legal and factual context of the decision operate as constraints on the decision maker in the exercise of its delegated powers. These include the governing statutory scheme, other relevant statutory or common law, the principles of statutory interpretation, the evidence before the decision maker, the submissions of the parties, the past practices and decisions of the administrative body and the potential impact of the decision on the individual to whom it applies: Vavilov, at paras. 105 and 106.
[50] The governing statutory scheme is generally the most salient aspect of the legal context relevant to a particular decision. While an administrative body may have considerable discretion in making a particular decision, that decision must ultimately comply with the rationale and purview of the statutory scheme under which it is adopted: Vavilov, at para. 108.
[51] Whatever form the interpretive exercise takes, the merits of an administrative decision maker’s interpretation of relevant statutory provisions must be consistent with the text, context and purpose of the provision. The usual principles of statutory interpretation apply equally when the decision maker interprets a provision: Vavilov, at para. 120. The decision maker’s task is to interpret the contested provision in a manner consistent with the text, context and purpose, applying its particular insight into the statutory scheme at issue. It cannot adopt an interpretation it knows to be inferior – albeit plausible – merely because the interpretation in question appears to be available and is expedient. The decision maker’s responsibility is to discern meaning and legislative intent, not to “reverse engineer” a desired outcome: Vavilov, at para. 121.
[52] The reviewing court does not conduct a de novo analysis to determine the “correct” interpretation of the disputed provision: Vavilov, at para. 116. The Supreme Court has acknowledged the legitimacy of multiple reasonable interpretations of statutory language, especially in cases where “the statutory language is less than crystal clear”: British Columbia (Securities Commission) v. McLean, 2013 SCC 67, [2013] 3 S.C.R. 895 at para. 37. In the course of reviewing a decision, however, it may become clear that the interplay of text, context and purpose leaves room only for a single reasonable interpretation which is at odds with the interpretation given by the decision maker, or that the decision maker’s interpretation falls outside a range of reasonable outcomes, based on the facts and the law: Vavilov, at para. 124.
Analysis
Section 18(2)1 – Was the Arbitrator’s Conclusion that the Applicant Was Not an Operator Under the TTA on December 31, 2005 Reasonable?
[53] The arbitrator began his analysis of the first category, s. 18(2)1, from the premise that the provisions of the TTA must be read in concert with the HTA (which, he acknowledged, were at one time contemporaneously in force) and that the presumptions of coherence and consistent expression apply as if these two statutes were part of a single Act.
[54] This premise led him to consider the meaning of “operator” not only as established in the Regulation and the TTA, but in the HTA as well.
[55] This, in turn, led the arbitrator to consider not only the definition of “operator” in s. 16(1) of the HTA, but to incorporate into that definition the additional regulatory requirements in ss. 16(2) and (3) of the HTA; i.e., that: a) no one can drive a commercial truck on a highway unless the operator holds a CVOR; and, b) the driver operating the truck must be carrying a copy of the CVOR. Thus, the arbitrator concluded, as a matter of law, that “operator” in the Regulation could only mean a person who held a valid CVOR in May 2010 when the Collective Agreement was ratified and came into effect.
[56] As the evidence established that the applicant did not hold a valid CVOR in May 2010, the arbitrator could only conclude that the applicant was not an “operator” under the Regulation.
[57] This initial premise and its diversions, as set out above, in my view each constitute an unjustified and illogical step in the arbitrator’s reasoning which renders his decision on this issue unreasonable. They also led the arbitrator to a result which falls outside the range of reasonably available outcomes consistent with the facts and the law.
[58] Contrary to the starting point used by the arbitrator, the proper starting point for the interpretation of s. 18(2)1 of the Regulation is the wording of s. 18 itself. Section 18 provides, in the relevant part:
(1) Despite Part VIII of the Act, the employer shall pay an employee to whom this subsection applies overtime pay for each hour worked in excess of 60 hours in a work week, at an amount not less than one and one-half times the employee’s regular rate.
(2) Subsection 1 applies to an employee who is the driver of any of the following:
- A truck whose operator held an operating license under the former Act on December 31, 2005…
(7) In this section…
“operate” has the same meaning as in the former Act, and “operator” has a corresponding meaning…
[59] Section 1(1) of the TTA contained the relevant definition of “operate,” which:
means to cause to be driven on a highway and “operated” has a corresponding meaning…
[60] The arbitrator characterized the “essential question” on this issue as being whether “the applicant is “an “operator” in law for the purposes of paragraph 1 of subsection 18(2)?” He went on, in para. 128 of the initial award, to observe that: “The wording of the TTA, in my respectful view, is regrettably circuitous and consequently unclear on that question.” This alleged circuity and lack of clarity, apparently, arose from the fact that the word “operator” is not expressly defined in the TTA. This is what led the arbitrator to consider the definition of “operator” in s. 16(1) of the HTA and then to consider the two regulatory requirements for driving a commercial truck on the highway contained in ss. 16(2) and (3) of the HTA upon which his ultimate conclusion on this issue was based.
[61] The arbitrator concluded, from his consideration of s. 16 of the HTA, in para. 129 of the initial award:
Thus when paragraph 1of subsection 18(2) of O. Reg. 285/01 refers to, “A truck whose operator held an operating license under the [TTA] on December 31, 2005”, I conclude it is stipulating the person or corporate entity expressly defined in the HTA as “operator”, which includes the requirement that the operator hold a valid CVOR certificate and that every driver of one of the operator’s commercial vehicles carry a copy of the CVOR certificate “issued to the operator of the vehicle.”
Text
[62] The Lieutenant Governor in Council, as it was authorized to do under the ESA, established by regulation categories of employee and industry which, for economic or other policy reasons, Cabinet decided should be exempt from the 44-hour threshold for overtime pay under s. 22 of the ESA. In the case of the highway transport special rules, enacted in s. 18, the LGIC chose, as the precondition to enjoying the benefit of a 60-hour threshold, that the operator of the trucking enterprise held an operating licence issued under the TTA before that Act was repealed on January 1, 2006. The only provision of the former TTA incorporated by reference into the Regulation is the definition of “operate” which “means to cause to be driven on a highway.” The LGIC prescribed, in the Regulation, that “operator” (which was not separately defined in the TTA) “has a corresponding meaning.”
[63] There is nothing circuitous or unclear about the definition of “operator” adopted by O. Reg. 285/01. The drafters of O. Reg. 285/01 specifically addressed, and filled, the so-called “gap” in the TTA which the arbitrator found so perplexing. The combined effect of the clear and unambiguous words of the Regulation and its adoption of the likewise clear and unambiguous definition of “operate” in the former TTA is that, “operate” means ‘to cause [the truck] to be driven on a highway’, such that “operator” simply means ‘the person who causes [the truck] to be operated on a highway.’
[64] O. Reg. 285/01 does not refer to the HTA. Similarly, the definition of “operate” in the TTA, which was expressly incorporated by reference into O. Reg. 285/01, also does not refer to the HTA. In the face of the Regulation specifically providing for the definition of “operate” and “operator,” there was simply no need, and it was, in fact, contrary to the express direction of O. Reg. 285/01, to turn to the HTA in search of some other definition of “operator.”
[65] There is no disharmony or inconsistency between the Regulation or the TTA and the HTA because there is only one operative provision in the Regulation – the definition of “operate” in the TTA as modified by the Regulation itself in s. 18(7). The HTA simply does not enter into the equation.
[66] The arbitrator’s diversion into the provisions of the HTA is inconsistent with the text of O. Reg. 285/01. It renders the definitions of “operate” in the TTA and “operator” as prescribed in the Regulation meaningless and redundant. If the drafters of O. Reg. 285/01 had meant to import the definition of “operator” from the HTA, they would have expressly so provided.
[67] Further support for finding an unreasonable lack of justification in the arbitrator’s interpretation of the Regulation can be found in para. 129 of the initial award, where the arbitrator fundamentally misconstrued the import of the decision of the Supreme Court in Pointe-Claire. The arbitrator mistakenly reasoned that, under the principles of coherence and consistent expression, the word “operator” had to have the same meaning in both the HTA and the TTA. “They cannot be different ‘persons,’” he wrote, “without creating an inconsistency in the practical effect of those two statutes.” This is not at all the conclusion reached by the Supreme Court in Pointe-Claire. Indeed, in the face of exactly the same argument made in Pointe-Claire, the Court came to the opposite conclusion at para. 61: “I cannot find any inconsistency in the application of these two statutes. Each of the labour statutes has a distinct object and its provisions must be interpreted on the basis of their specific purpose” (emphasis added).
[68] The principle of textual consistency is not an inflexible or infallible rule. Indeed, the “rules” of statutory interpretation are not rules in the ordinary sense of having some binding force. They are aids to construction, presumptions or pointers. Not infrequently, one “rule” points in one direction, while another in a different direction. In each case one must look at all relevant circumstances. Different contexts may require different meanings: Bapoo v. Co-Operators General Insurance Company, (1997) 1997 6320 (ON CA), 154 D.L.R. (4th) 385 (Ont. C.A.) at 396; Maunsell v. Olins, [1975] A.C. 373 (H.L. (Eng.)) at 382, per Lord Reid.
[69] The arbitrator failed to consider the very different purposes of the Regulation under the ESA, the TTA and the HTA. He allowed the principle of coherence to become the sole principle of the entire interpretation exercise. This was unreasonable.
[70] Finally, even if recourse to the HTA were required, the definition of “operator” in s. 16(1) of the HTA goes no further than “the person directly or indirectly responsible for the operation of a commercial motor vehicle including the conduct of the driver of, and the carriage of goods or passengers, if any, in, the vehicle or combination of vehicles.”
[71] Subsections 16(2) and (3) of the HTA are not definition sections and do not purport to define who an “operator” is. Rather, they impose regulatory requirements upon operators. The definition of operator in s. 16(1) is meant to serve these regulatory requirements. The regulatory requirements of ss. 16 (2) and (3) are that: a) no person shall drive or operate a commercial motor vehicle on a highway unless the operator is the holder of a valid CVOR certificate; and, b) the driver of a commercial motor vehicle on a highway must have with him, or her, a copy of the CVOR certificate.
[72] In other words, “the person responsible directly or indirectly for the operation of a commercial motor vehicle” is an “operator” regardless of whether: a) the operator holds a valid CVOR certificate; or b) the driver is carrying a copy of the CVOR certificate. The requirements of ss. 16(2) and (3) are imposed upon an operator, they do not define who an operator is.
[73] Thus, when the arbitrator concluded that s. 18(2)1 “stipulates” that the operator hold a valid CVOR certificate, he reached well beyond determining whether the applicant was an “operator” under the TTA and delved into a consideration of whether the operator was in compliance with distinct regulatory requirements under the HTA. In other words, the arbitrator entered the realm of enforcement of the regulatory scheme under the HTA, rather than applying s. 18(2)1 as written in the context of the regulatory scheme under the ESA. The arbitrator’s interpretation of s. 18(2)1 adds a requirement that is not there. His conclusion based on a consideration of compliance matters under ss. 16(2) and (3) of the HTA is inconsistent with the text of O. Reg. 285/01. Again, if the drafters of the Regulation, in determining who qualifies for the application of a 60-hour threshold for overtime pay, had meant to require the operator of a highway transport enterprise to have not only an operating licence under the TTA but a CVOR under the HTA as well, they would have expressly so provided.
Context and Purpose
[74] The context and purpose of the Regulation, and of s. 18 in particular, further support these conclusions.
[75] The ESA regulates employment standards and deals with matters such as continuity of employment, payment of wages, hours of work, minimum wage, vacation pay, leaves of absence, termination and severance, and the like. One such standard, contained in Part VIII of the ESA, is the threshold for overtime pay. Section 22 establishes a provision of general application under which 44 hours per week of work is set as the basic standard, in excess of which overtime becomes payable. Section 22 itself acknowledges, however, that different standards may be prescribed by regulation.
[76] The highway transport special rules enacted in s. 18 of O. Reg. 285/01, are one of a number of occupation or industry-specific exemptions and special rules contained in the Regulation. These include roadbuilding, motels and hotels, fruit and vegetable processing, sewer and water main construction, local cartage, highway transport, domestic workers and residential care workers.
[77] In prescribing eligibility for the 60-hour threshold for overtime pay, the Regulation, in s. 18(2)1, relies upon the TTA in one limited respect – that is, whether the operator of the highway transport enterprise in question held an operating licence issued under the TTA on December 31, 2005. The TTA was a statute that, prior to its repeal in 2006, dealt with economic regulation of commercial trucking in Ontario. The purpose section of that legislation, in s. 2, provided:
It is hereby declared that an effective goods movement system by highway is essential to advance the interests of the users of transportation and to maintain the economic well-being and growth of Ontario and that these objectives are to be achieved by the regulatory scheme established by this Act which is to be interpreted so as to advance the objective that the system will,
(a) foster productive, fair and innovative competition and the existence of a dependable and viable trucking industry in furtherance of the public interest; and
(b) be of benefit to the users of transportation services and not for the protection from competition of individual providers of such services.
[78] With the repeal of the TTA on January 1, 2006, therefore, the LGIC chose, in effect, as a proxy for eligibility under s. 18(2)1, the requirement of an operating licence under the former Act.
[79] By contrast, the HTA is primarily concerned with matters of public safety and traffic regulation, such as rules of the road, speed and condition of vehicles, load size and weight, licensing, records and reporting, and the like. No requirements under the HTA are imported into the Regulation. Indeed, there is no mention of the HTA in s. 18 at all. This is entirely congruent with the very different underlying purposes between the HTA (traffic and public safety regulation) and the Regulation and the TTA (which are both forms of economic regulation).
[80] Important context also includes the fact that the TTA was repealed in 2006. Post-December 31, 2005, therefore, the TTA had, and could have, no effect on the regulations of highways. In spite of its repeal, however, the drafters of O. Reg. 285/01 specifically chose to rely on one narrow aspect of the TTA as the basis for qualifying for the highway transport special overtime rule – to qualify, the trucking enterprise in question must have had an operating licence under the TTA as of December 31, 2005. The Regulation expressly acknowledges it is referring, when reference is made to the TTA, to an Act that is no longer in effect. Given the repeal of the TTA, therefore, any concerns about coherence and consistent expression as between the TTA and the HTA, if they are valid considerations at all, are much diminished.
[81] In the Employment Standards Act Policy and Interpretation Manual of August 15, 2019, the Ministry of Labour provides the following commentary on the drafting of s. 18 of O. Reg. 285/01:
Prior to January 1, 2006, the 60-hour threshold in s. 18 generally applied to employees who were drivers of public trucks operated by holders of operating licenses issued under the former Truck Transportation Act RSO 1990, c.T.22 (“TTA”), which was repealed effective January 1, 2006. Section 18 of O Reg 285/01 was therefore replaced with a new s. 18 (filed February 6, 2006) that reflected the repeal of the TTA, but the scope of the new s. 18 is intended as much as possible to be the same as the scope of its predecessor.
[82] Section 18(2)1 of the Regulation is part of a regulatory scheme that creates exemptions and special rules in respect of employment standards. The drafting choices made in prescribing eligibility for the highway transport special rules in s. 18, including the decision to rely upon a provision from the TTA rather than the HTA, must be respected as being intentionally designed to fit the particular employment relationships being regulated in O. Reg. 285/01.
Past Practice and Decisions
[83] Although previous rulings by the Ontario Labour Relations Board are not binding on this Court, the Board’s rulings on similar issues tend to support the conclusion that the arbitrator’s interpretation of s. 18(2) is unreasonable.
[84] In Burns v. Halton Recycling Ltd., 2009 5764 (ON LRB), an employee who drove trucks for Halton Recycling complained to an employment standards officer (“ESO”) that he was not being paid overtime on the basis of the standard 44-hour threshold, but only after 50 hours of work. The ESO found that s. 18 of O. Reg. 285/01 did not permit the employer to avoid the requirements of s. 22 of the ESA. The ESO ruled, among other things, that permitting a 60-hour overtime threshold simply by virtue of a license under the former TTA would have the effect of taking literally thousands of employees in the province from a 44-hour overtime threshold into one of 60 hours in a work week while, at the same time, establishing two different overtime thresholds, one for employers who held a licence on December 31, 2005 and another for those who did not, even when such employers are engaged in precisely the same business and conducting precisely the same activity.
[85] Following a somewhat involved procedural history, the matter came before the OLRB by way of review of the ESO’s decision. The Board reversed the ESO’s decision, holding that s. 18(2)(1) applied. The Board said, in paras. 14 and 16:
- [The ESO’s] arguments are interesting and not without merit from a policy perspective. However, the clear words of paragraph 2, s. 18(2) of
O. Reg. 285/01 make the definition of s. 18(1) apply to an employer which has an operating license under the Truck Transportation Act. … S. 18(2) clearly says the 60 hour limit applies to “any” of certain categories of employers, one of which is a truck operated to carry goods for compensation who did not hold an operator licence under the former Act and could be required to hold one (if it were still in force). Of course, one of the other two applicable types of employers is one which held an operating licence under the former Act – one that applies in this case.
- It is apparent that the applicant believes (supported by [the ESO]) that the expanded overtime thresholds is unfair. It may be so, but it is not the Board’s jurisdiction to change the Act or its Regulations because they are “unfair”. It is the Board’s role to interpret them. In this case, it is clear and not disputed that the employer has the licence referred to in s. 18 of Regulation 285/01.
[86] This approach is consistent with the Board’s earlier direction that a labour adjudicator may not ignore the plain reading of employment standards statutory language in the interest of employer compliance with employment standards or otherwise. In A.A. Waters & Brookes v. Lachini, 2001 13736 (ON LRB), Vice Chair Kelly wrote, at para. 32, concerning the ESA:
- Where there are competing interpretations of the Act’s requirements, the Court [in Machtinger v. HOJ Industries Ltd., 1992 102 (SCC), [1992] 1 S.C.R. 986] stated that the interpretation which encourages employer compliance, and therefore extends the Act’s coverage to the greatest number of employees possible is to be preferred to interpretations that do not achieve those objectives. As the Court pointed out, section 10 of the Interpretation Act, supra, deems all statutes to be remedial in nature, and thus requires that such laws be given fair, large and liberal interpretation. However, in analysing the statutory language exempting certain categories of employees from certain provisions of the Act, I do not take the court’s decision in HOJ to hold that I should, so as to ensure employer compliance and the optimum application of the statute, interpret the legislation in such a way that is at odds with the plain reading of the words, or that is incongruent with the scheme and framework, of the Act.
[87] R. v. B. Gottardo Construction Ltd., 2004 ONSJ 56, 7 M.V.R. (5th) 186, relied on by the respondents, is a very different case and easily distinguishable. Gottardo involved a prosecution for operating a vehicle with excess weight, which was an offence under the HTA. The case has nothing to do with overtime pay or O. Reg. 285/01. The events and the prosecution occurred before the repeal of the TTA. An issue of coherence arose because, under the TTA, an inspector could stop a vehicle and examine it without reasonable grounds, whereas under the HTA, an officer required reasonable and probable grounds to believe a vehicle is over weight before requiring that it be weighed. The accused argued that his “detention” (being stopped and required to weigh) lacked reasonable and probable grounds and was arbitrary and unreasonable. Accordingly, there was at least the potential for a conflict between different authorities granted under the TTA and the HTA. As discussed earlier, there simply is no conflict between the Regulation and the HTA raised on the facts and circumstances of this case.
The Evidence
[88] The evidence is clear, and was not contested, that the applicant is the employer of the bargaining unit drivers in issue. The employees in the bargaining unit are the drivers of the delivery trucks used to deliver the grocery products from the distribution centre to the grocery stores. Although the vehicles are owned and licensed by Loblaws Inc., the applicant operates the vehicles under a management agreement. The applicant instructs the drivers when and where to drive on the highways and make deliveries and where, when and what to pick up and bring back on their return trips on the highways. The Registrar of Motor Vehicles, under the licensing statute (the TTA), decided to issue an operating license to the applicant in 1990. It is not clear how or why the Registrar would have done so if the applicant did not “operate” an enterprise driving trucks on a highway. In addition, the operating licence issued to the applicant specifically provides that the licence is “to operate an intra-provincial undertaking” (emphasis added). In the circumstances, there can be no question and, again, it was not in dispute, that the applicant “caused [the trucks] to be driven on a highway” as that expression is used in the TTA.
[89] This conclusion is also consistent with the ESA Interpretation Manual, in which the Ministry of Labour comments on the definition of “operate” in the Regulation:
“Operate” does not refer to the driving of a vehicle, but the ultimate control of the vehicle. The operator will often be the employer, but this will not necessarily be the case in every instance.
[90] The dispute before the arbitrator was not about whether the applicant “caused [the trucks] to be driven on a highway” but whether, on a proper interpretation, the Regulation and the TTA (to the extent incorporated by reference in the Regulation) imposed, in addition to the requirement of an operating licence under the TTA, the further requirement that the applicant have a valid CVOR under the HTA.
[91] Having found that the arbitrator’s decision to impose the latter requirement under s. 18(2)1 is unreasonable, there is, on the evidence, no other conclusion but that the applicant met the requirements under s. 18(2)1 and qualifies for the 60-hour threshold for overtime pay.
Remedial Discretion
[92] While acknowledging that it will be “most often” appropriate to remit the matter back to the decision maker for reconsideration, the Court in Vavilov also contemplated limited scenarios in which remitting the matter back would stymie the timely and effective resolution of matters in a manner no legislature could have intended. One circumstance which engages this concern is where it becomes evident to the court that a particular outcome is inevitable and that remitting the case would therefore serve no useful purpose: Vavilov, at para. 142.
[93] As discussed above, the dispute before the arbitrator and in this Court was not over whether the applicant was a person who caused trucks to be driven on the highway but whether, to be an operator, the applicant also had to hold a currently valid CVOR under the HTA. The issue is, in this sense, a binary one. If the applicant required a CVOR, it did not qualify under s. 18(2)1 because it did not have one. If the applicant did not require a CVOR, it does qualify. Given my conclusion that the arbitrator’s decision to impose the CVOR requirement is unreasonable, there is only one remaining available option. In these circumstances, it is appropriate to quash the arbitrator’s decision and dismiss the grievance with no further remit.
Conclusion on s. 18(2)1
[94] In summary, the reasons of the arbitrator, in the face of clear language in the Regulation, do not justify embarking on an analysis of another statute, not referred to in the Regulation, in an unjustified search for coherence between the HTA and the repealed TTA.
[95] The reasons of the arbitrator also fail to justify his adoption of a different definition of “operator” (based on the HTA) than the definition expressly and unambiguously required under O. Reg. 285/01 (which makes no reference to the HTA).
[96] And, the arbitrator’s reasons do not justify importing into the qualifying criteria for s. 18(2)1 additional regulatory requirements (such as holding a currently valid CVOR) under the HTA which are nowhere contemplated or prescribed by the Regulation or by the TTA.
[97] These failures, separately or together, do not exhibit the requisite degree of justification and render the arbitrator’s decision unreasonable. These flaws were more than merely superficial or peripheral to the merits of the decision. They were serious shortcomings which were central to the arbitrator’s decision on this issue.
[98] In addition, and in any event, these flaws in the reasoning process had the effect of bringing about a result which falls outside the range of outcomes reasonably available on the facts and the law.
[99] The application for judicial review of the arbitrator’s decision on the first category, s. 18(2)1, is, therefore, allowed. The arbitrator’s decision is quashed and the grievance dismissed.
Section 18(2) 2 – Was the Arbitrator’s Conclusion that the Applicant Did Not Hold a CIE on December 31, 2005 and Carry Goods of an Unaffiliated Person for Compensation Reasonable?
[100] The applicant argues that s. 18(2) does not specify a minimum threshold of “for compensation” business in order to qualify for the 60-hour overtime threshold under the second paragraph of s. 18(2). It submits that in his decision, the arbitrator unreasonably added a “volume” requirement to the “for compensation” carriage of goods which forms the basis for the application of the second category.
[101] The arbitrator’s decision on this issue does not involve a dispute about the interpretation of the Regulation. The central dispute is over the sufficiency of the evidence on the question of whether the applicant carried goods of an unaffiliated person for compensation.
[102] The arbitrator found that the applicant failed to prove on a balance of probabilities that the paper backhauls involved carriage of goods of an unaffiliated person for compensation. The arbitrator considered the evidence and came to a conclusion on whether the applicant satisfied its evidentiary burden. He found that it had not.
[103] What the applicant really seeks in its application for judicial review of the arbitrator’s decision on the second category is a re-argument and reweighing of the evidence. That is not the role of a reviewing court on judicial review of a labour arbitrator’s decision concerning a union grievance.
[104] Therefore, I would not have granted the application for judicial review on this ground.
Did the Arbitrator’s Finding in the Third Supplemental Award, that the Applicant is in Continuing Breach of the Collective Agreement and the ESA (and His Related Remedial Order), Violate Principles of Natural Justice?
[105] In view of my disposition of the question of the applicant’s qualification for the 60-hour threshold under s. 18(2)1, it is not strictly necessary to deal with the arbitrator’s finding in the third supplemental award that the applicant had failed to pay the required overtime from the date of the initial award and was in continuing breach of the Collective Agreement and the ESA, or the arbitrator’s order that the applicant “cease those violations forthwith.”
[106] Even if that question had been decided differently, however, I would decline to rule on the third ground for judicial review. This is because of the concerns arising out of the fact that the arbitrator’s job is not yet done. The impugned findings and orders arose out of ongoing case management by the arbitrator of the remedial phase of the hearing. Since there is no final decision from the arbitrator on remedy before the Court, I would decline to embark on any review of this question on grounds of prematurity.
[107] I would, therefore, have stayed the third ground of judicial review pending a final decision on remedy from the arbitrator.
Conclusion
[108] In conclusion, the application for judicial review is granted. The arbitrator’s decision is quashed and the grievance is dismissed.
Costs
[109] The parties agreed that there should be no order as to the costs of this application for judicial review. It is so ordered.
Penny J.
I agree _______________________________
Kristjanson J.
I agree _______________________________
Favreau J.
Released: November 16, 2020