CITATION: Hamilton Health Sciences v. Canadian Union of Public Employees, Local 7800, 2021 ONSC 1337
DIVISIONAL COURT FILE NO.: DC-21-031
DATE: 2021/02/24
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Morawetz CJSCJ, Sachs and Gomery JJ.
BETWEEN:
Hamilton Health Sciences Applicant
– and –
Canadian Union of Public Employees, Local 7800 Respondent
COUNSEL:
Frank Cesario and Jennifer J. Querney, for the Applicant
Mark Wright and Ella Bedard, for the Respondent
HEARD by videoconference: February 5, 2021
H. Sachs J.
Introduction
[1] This is an application for judicial review brought by Hamilton Health Sciences (the “Hospital”) seeking to quash the award of a labour arbitration panel (the “Panel”) chaired by Elaine Newman dated March 24, 2020 (the “Award”). The Award involved the interpretation of the collective agreement (the “Collective Agreement”) between the Hospital and the Respondent, the Canadian Union of Public Employees, Local 7800 (the “Union”).
[2] The Award relates to the Hospital’s obligation under the Collective Agreement to offer Early Retirement Allowances (“ERAs”) and Voluntary Exit Options (“VEOs”) to certain employees in job classifications that had been identified for layoffs (the “Disputed Provisions.”) In particular, the question before the Panel was whether these benefits had to be offered to all employees within the job classification based solely on seniority or only to those employees whose employment status (full- time or part-time) corresponded to the status of the employees identified for layoff.
[3] The uncontroverted evidence before the Panel was that for the past 13.5 years the parties had offered ERAs and VEOs to only full-time employees if the employees identified for layoff were full time employees, and to part-time employees if the employees identified for layoff were part-time employees (a practice the parties refer to as full-time to full-time; part-time to part-time).
[4] The majority of the Panel decided that this practice did not accord with the Collective Agreement and found that, in the future, the benefits must be offered to all employees within the relevant classification on the basis of seniority. The Union conceded that it was estopped from making any claims related to the past practices of the Hospital in relation to these benefits. Thus, the Panel’s Award only impacted the future conduct of the parties with respect to the Disputed Provisions.
[5] The Hospital submits that the Award is unreasonable, both because the Panel’s interpretation failed to take into account all of the words in the relevant clauses of the Collective Agreement (that allegedly reveal the clear intention of the parties in drafting the Disputed Provisions) and because the Panel failed to properly take into account past practice evidence.
[6] For the reasons that follow, I would dismiss the application. In summary, the Panel’s interpretation of the Collective Agreement is reasonable based on the express wording of the Disputed Provisions, taken in the context of the Collective Agreement as a whole and the fact that the benefits at issue were seniority benefits. The inferences that the Panel drew from the past practice evidence were inferences that were reasonably available to it on the evidence, including the conclusion that it did not indicate a latent ambiguity in the wording of the Collective Agreement.
Factual Background
[7] The factual record before the Panel consisted of an Agreed Statement of Facts, with accompanying documentary exhibits. No witnesses testified at the hearing.
The Central Bargaining Context
[8] The articles of the Collective Agreement that are at issue in this application are found in the central portion of the Collective Agreement. Pursuant to a Memorandum of Conditions for Joint Bargaining, this portion of the agreement is negotiated centrally by the Ontario Council of Hospital Unions (“OCHU”) and the Ontario Hospital Association, and is binding without modification on each of their respective members, which include the Hospital and the Union in this case. The Memorandum expressly distinguishes between central issues (that apply to CUPE hospital locals across the province) and local issues (that are to be bargained by each union and hospital).
[9] The central portion of the collective agreement provides for a tripartite arbitration process designed for the adjudication of matters determined by OCHU to be of central concern and precedent-setting. This case met OCHU’s criteria of centrality and precedent-setting value and was adjudicated through a centralized, tripartite panel.
[10] Before the Panel and this Court, the Union submitted that local past practice could not affect the meaning to be attributed to clauses in the central portion of the Collective Agreement. The Panel found it unnecessary to deal with this aspect of the Union’s argument and we find no need to do so either. Had we found it necessary to determine this issue, we would have remitted the matter back to the Panel for a decision rather than deciding it ourselves.
The Relevant Portions of the Collective Agreement
[11] Prior to 2004, full and part-time employees were covered by separate collective agreements. Since 2004, both full and part-time employees are covered by this Collective Agreement, which has been renewed four times.
[12] The relevant portions of the Collective Agreement for this application are reproduced below, along with my observations about why each provision is important to an analysis of the issue in dispute.
Relevant provisions not in dispute
7.12 – The Arbitration Board shall not be authorized to make any decision inconsistent with the provisions of this Agreement nor to alter, modify, add to or amend any part of this Agreement.
[13] This clause is important in view of the Hospital’s argument (which the Panel accepted) that the interpretation of the Disputed Provisions adopted by the Panel may not be the best way to achieve the labour relations objective of minimizing the effect of layoffs on the job security of affected employees. This is because if a full-time employee is laid off, offering an early retirement benefit or early exit option to a part-time employee will not stop the full-time employee from being laid off. That can only be done if another full-time employee leaves voluntarily. The Panel found that by virtue of Clause 7.12, an Arbitration Board is prohibited from rewriting or modifying the clear provisions of a Collective Agreement, even if doing so may make “labour relations sense.” This can only be done through an interest arbitration or collective bargaining.
9.02 – Seniority
Full-time employees will accumulate seniority on the basis of their continuous service in the bargaining unit from the last date of hire, except as otherwise provided herein.
Part-time employees, including casual employees, will accumulate seniority on the basis of one (1) year’s seniority for each 1725 hours worked in the bargaining unit as of the last date of hire, except as provided herein.
Seniority will operate on a bargaining unit wide basis.
A part-time employee cannot accrue more than one year’s seniority in a twelve (12) month period. The twelve (12) month period shall be determined locally.
[14] This clause is important to this application for two reasons. First, in contrast to the Disputed Provisions, this clause makes a clear distinction between the treatment of seniority between full and part-time employees. Second, seniority “operates on a bargaining unit basis.” This means that the Hospital only has one seniority list. Thus, if benefits are to be offered on the basis of seniority, the Hospital must do so using that one list. Further, as detailed later in these reasons, labour relations jurisprudence has recognized that seniority is one of the most important benefits that unions have secured. This has given rise to the presumption that an employee’s seniority-based rights should only be affected by very clear language in the collective agreement.
9.08 (A) – Notice and Redeployment Committee
[15] It is not necessary to reproduce the exact wording of this clause. Generally, it provides that the Hospital must give the Union and the affected employees five months notice of any intended layoff. Two weeks after notice is given, a Redeployment Committee is to be established administer the layoffs, including identifying any possible alternatives to implementing the layoffs. The Redeployment Committee is comprised of an equal number of representatives from the Hospital and the Union. The Hospital’s interpretation of the Disputed Provisions was applied through approximately 27 redeployments, occurring annually and impacting hundreds of Union members.
The Disputed Provisions
9.08 (B) – Retirement Allowance
Prior to issuing notice of layoff pursuant to article 9.08 (A) (a) (ii) in any classification(s), the Hospital will offer early retirement allowance to a sufficient number of employees eligible for early retirement under HOOPP within the classification(s) in order of seniority, to the extent that the maximum number of employees within a classification who elect early retirement is equivalent to the number of employees within the classification(s) who would otherwise receive notice of layoff under article 9.09(A)(a)(ii).
An employee who elects an early retirement option shall receive, following completion of the last day of work, a retirement allowance of two (2) weeks’ salary for each year of service, plus a prorated amount for any additional partial year of service, to a maximum ceiling of fifty-two (52) weeks’ salary.
9.08 (C) – Voluntary Exit Option
If, after making offers of early retirement, individual layoff notices are still required, prior to issuing those notices, the Hospital will offer a voluntary exit option in accordance with the following conditions:
i) The Hospital will first make offers in the classifications within department(s) where layoff would otherwise occur. If more employees than are required are interested, the Hospital will make the decision based on seniority.
ii) If insufficient employees in the department affected accept the offer, the Hospital will then extend the offer to employees in the same classification in other departments. If more employees than are required are interested, the Hospital will make its decision based on seniority.
iii) In no case will the Hospital approve an employee’s request under (i) or (ii) above for a voluntary exit option, if the employees remaining are not qualified to perform the available work.
iv) The number of early exit options the Hospital approves will not exceed the number of employees in that classification that would otherwise be laid off. The last day of employment for an employee who accepts a voluntary early exit option will be at the Hospital’s discretion and will be no earlier than thirty (3) calendar days immediately following the employee’s written acceptance of the offer.
An employee who elects a voluntary exit option shall receive, following completion of the last day of work, a separation allowance of two (2) weeks’ salary for each year of service, to a maximum of fifty-two weeks’ pay.
[16] The ERA provisions have been in the CUPE Collective Agreements since 1993. At the time that the ERA provision was put into the collective agreements, there were separate collective agreements for full-time and part-time employees. The VEO clause was added to the Collective Agreement in 2006, by which time part-time and full-time employees had been governed by one collective agreement for approximately two years.
Past Practice Evidence
[17] The parties agreed that, since the negotiation of a combined Collective Agreement, they have interpreted and applied the ERA provisions of the combined Collective Agreement so that if full-time employees were identified for layoff, ERAs were only offered to eligible full-time employees within the classifications, regardless of whether there were more senior part-time employees in the classification. When the VEO was added to the Collective Agreement, the parties interpreted and applied the VEO language in the same way; full-time to full-time; part-time to part-time.
[18] The Agreed Facts reflect that this interpretation of the ERA and VEO provisions was applied by the parties repeatedly, consistently, openly, and mutually for 13.5 years, including through the following events:
(a) Through the amalgamation of the previously separate full and part-time collective agreements;
(b) Through the addition of the VRO provisions in 2006;
(c) Through approximately 27 redeployments;
(d) Through four renewals of the Collective Agreement (in 2004, 2006, 2009 and 2013);
(e) Through the Hospital acquiring St. Peter’s Hospital in 2009, after which the same process was followed at that hospital;
(f) After the parties settled a grievance in 2010 relating to another restructuring matter in the Collective Agreement;
(g) Following a 2011 arbitration award between the Hospital and another Union (OPSEU), which found against the Hospital and ordered that in the future ERAs and VEOs had to be offered to both full and part-time employees in order of seniority (the “Fisher Award”). After the Fisher Award, the Hospital changed its practice when dealing with OPSEU, but it did not when dealing with CUPE. It is unclear whether CUPE was aware of the Fisher Award. In any event, CUPE did not request, until five years later, that the Hospital adopt the same approach.
The Grievance and the Arbitration
[19] In 2016, as a result of a complaint by a CUPE site representative with no involvement in the Redeployment Committee, the Union commenced a grievance to argue that the language of the Collective Agreement should not be subject to the full-time to full-time, part-time to part-time interpretation.
[20] The matter proceeded to arbitration before an arbitration panel composed of Elaine Newman (Chair); Joe Herbert (Union Nominee); and Patricia Balfour (Hospital Nominee). The Chair (with the Union nominee concurring) ruled in favour of the Union’s interpretation of the Disputed Provisions. The Hospital Nominee dissented and issued detailed reasons for doing so.
The Panel’s Decision
The Majority Decision
[21] Unless specified otherwise, when I refer to the Panel in these reasons, I am referring to the majority decision. The Panel began its analysis with the language of the Disputed Provisions. In doing so it identified that both the ERA and VEO were “significant benefits, administered according to seniority.” Clauses conferring seniority rights must be construed broadly such that those rights can only be truncated or abridged through very clear language. According to the Panel, the question then became “can the language of these two provisions be read broadly enough to provide the seniority benefits the Union now seeks - the requirement that all employees in the classification of the lay off, whether full- or part-time, must be offered early retirement or voluntary exit?”
[22] In answering this question, the Panel turned to the 2011 Fisher Award and observed that the same clauses were before Arbitrator Fisher in that case and he determined that, given that the clauses made no distinction between full and part-time employees, they could only mean that “all employees, whether full- or part-time, had to receive the offers.” The language of the relevant articles was clear and could only be changed through collective bargaining or interest arbitration.
[23] The Panel observed that Arbitrator Fisher did not appear to have had the benefit of the “fulsome arguments asserted in this case”, or of “considering the extrinsic evidence here presented.” However, according to the Panel, the decision did stand as “some precedent for the interpretation of the same words in a collective agreement that bind the same Hospital.” Thus, the Panel took the Fisher Award as the “starting point for the analysis.”
[24] The Panel then examined the language of the Disputed Provisions and read them in the context of the Collective Agreement as a whole. In doing so, the Panel recognized that the object of interpreting a collective agreement is to determine the intention of the parties and that collective agreements must be interpreted within a labour relations context. As put in one of the cases relied upon by the Panel, Victorian Order of Nurses v. OPSEU, 2017 O.L.A.A. No. 290 (Stout), at para. 12:
The labour relations context provides a basis for determining the objective intent of the parties as evidenced by the language they included in their collective agreement. In other words, the meaning of the words used by the parties may be gleaned from a number of contextual factors, including the purpose of the agreement and the nature of the benefit provided. However, caution must be exercised to ensure that any objective external contextual factors do not change or undermine the meaning of the words chosen by the parties to the extent that they, in effect, rewrite the parties’ agreement.
[25] The Panel then looked at the Collective Agreement and observed that it is a combined agreement that includes both full and part-time employees. The seniority provisions operate on a bargaining unit wide basis and the Agreement distinguishes between “those items that are intended to apply to full-time employees from those that are intended to apply to part-time employees.” The Panel gave several examples of articles where these distinctions are made: Article 14.02 and 14.02 (B) dealing with rest periods; Articles 16.01, 16.02, 16.02(A) and (b) pertaining to holidays; Articles 17.01 (A) and (B) and Article 17.03 dealing with vacations; and Article 18.01 dealing with health and welfare benefits). The Disputed Provisions, which provide that ERA and VEO benefits are to be offered on the basis of seniority, contains no limitation specifying when those benefits are to be offered to full-time employees and when they are to be offered to part-time employees. According to the Panel, its view that the language of the Disputed Provisions is unambiguous was “strengthened by these observations of the language, taken in the context of the collective agreement.”
[26] The Panel turned next to the question of whether the evidence of past practice should be admitted in considering the meaning to be given to the Disputed Provisions. The Union argued that it should not since the words were unambiguous. The Hospital submitted that the past practice evidence could reveal a latent ambiguity in the language “or a clear indication that the parties jointly intended a different interpretation.” The Panel reviewed the relevant case law and found that “[w]ords alone may be insufficient to reflect the intention of the parties” and that context “may give meaning to the parties’ choice of language.” Thus, the Panel found that “in interpreting the words of Article 9.08 (B) and (C)” it would “take into account not only the evidence of purpose, but also of the context in which they arose, and evidence of past practice, in this exercise of mixed fact and law.”
[27] The Panel considered what the purpose of the Disputed Provisions were and found that they have a “mixed purpose - to promote job security and reduce the impact of layoffs.” The Panel noted that the “Union’s interpretation here is at odds with that purpose, to the extent that there will be cases in which making the offers will not numerically align with the numbers of layoffs required, and in some cases, will not prevent layoffs at all.” However, the Panel accepted that the apparent purpose of a clause in a collective agreement cannot be take primacy over its language. In the case before it, the Panel found that “[t]he language can not be contorted to achieve the limitation that the Hospital seeks. There is not doubt that the goal of avoiding layoffs might be more efficiently achieved by limiting the offers of early retirement and voluntary exit to only those in the full- or part-time category in which layoffs are required, but that, simply enough, is not what is provided in this agreement.”
[28] The Panel next turned the evidence of past practice and asked itself whether that evidence simply gave rise to an estoppel (which was the Union’s position), or if “the evidence reveal[s] a shared understanding of the language that requires interpretation of it that entrenches the practice?” To meet this threshold the evidence must support “the assertion that there was a deliberate and shared mutual interpretation of the language.”
[29] The Panel reviewed the past practice evidence and concluded that there was nothing in the evidence that revealed more than mere inattention and inadvertence. Central to this finding was the fact that the language was first centrally awarded in an interest arbitration in 1993, at a time when the bargaining units for part-time and full-time employees were separate. In 2004, when the parties negotiated a combined agreement (which was a logical point at which to revisit the language and the practice), “no issue was taken with the continuation of the status quo.” There was no evidence of a discussion between the parties. After that, the only evidence before the Panel as to past practice was that the parties continued to conduct themselves the same way. There was no evidence indicating that the parties
did, at any point, actually turn their minds to the way in which these provisions were being administered, and jointly discuss whether their practice conformed to the language. There is no evidence that one party represented to the other that the practice would continue into the future, and certainly no evidence that one party represented to the other that the practice would survive the expiration of the collective agreement. This is, more probably than not, a case in which the parties’ inattention gave rise to a practice that is contrary to the clear words of their agreement. The facts raise estoppel, as the Union has conceded.
[30] Thus, the Panel found that the Hospital had not met its burden of establishing that the past practice evidence was sufficient to overturn the “clear and unambiguous language of the collective agreement.”
The Dissent of the Employer Nominee
[31] The Employer Nominee “absolutely dissociated” herself from the majority’s decision that the parties continued the full-time to full-time, part-time to part-time practice for 13.5 years due to inadvertence or inattention. In her view, this was an unreasonable factual conclusion based on the evidence.
[32] According to the Employer Nominee, it was up to the Union to give an explanation for why it inadvertently continued the practice of offering benefits on a full-time to full-time, part-time to part-time basis. In the absence of such an explanation, there was no evidence to support such a finding. Further, the facts that did exist, taken individually and cumulatively, pointed to a finding that the parties did share a mutual intent as to the interpretation of the Disputed Provisions. In the face of this evidence, there was no need for the Hospital to provide evidence of express discussions or negotiations between the parties.
[33] The Employer Nominee then examined the language of the Disputed Provisions and determined that the presence of a “mathematical cap” meant that the provisions were susceptible to at least two interpretations – one of which would defeat the obvious purpose of the provisions (to avoid layoffs) and one of which would not. In the face of such a “latent ambiguity”, the evidence of past practice should have resulted in a decision in favour of the Hospital.
Issues Raised on this Application
[34] The Hospital submitted that the Panel’s decision was unreasonable in two ways. First, it unreasonably interpreted the Disputed Provisions and second, it was unreasonable in its treatment of the past practice evidence.
Standard of Review
[35] Both parties agree that the standard of review applicable to this application is reasonableness. In doing so, however, they each emphasize different aspects of the Supreme Court’s decision in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, 441 D.L.R. (4th) 1.
[36] According to the Hospital:
(a) A reasonableness review must be applied rigorously. It is not a rubber-stamping; it is a robust form of review (Vavilov, at paras. 12-15).
(b) An arbitrator’s reasons must be internally coherent and rational. They must also justify the outcome (Vavilov, at para. 85).
(c) A reviewing court must focus on the reasons of the arbitrator to find the justification for the decision reached. It cannot substitute its own reasoning for the arbitrator’s reasoning to “buttress” it (Vavilov, at paras 12-15, 18, 96).
(d) In order to succeed on an application for judicial review an applicant must satisfy the court “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.” (Vavilov, at para. 100).
[37] According to the Union:
(a) The burden is on the party challenging a decision to show that it is unreasonable. Any alleged flaws or shortcomings must be sufficiently central or significant to render the decision unreasonable. A minor misstep does not mean that a decision must be overturned. (Vavilov, at paras. 99-101).
(b) It is not up to the reviewing court to decide the issue itself. Its focus must be on the decision actually made by the decision-maker – both its reasoning process and its outcome. (Vavilov, at para. 83).
(c) A reviewing court must refrain from re-weighing the evidence or making its own factual findings. Absent exceptional circumstances, a reviewing court should not interfere with a tribunal’s factual findings. A factual error may not be found unless the decision maker has fundamentally misapprehended or failed to account for the evidence before it. (Vavilov at paras. 99, 125-26).
(d) While expertise is no longer relevant to the identification of the appropriate standard of review, it remains relevant in the application of the reasonableness standard.
Was the Panel’s Interpretation of the Disputed Clauses Unreasonable?
The Hospital’s Position
[38] The Hospital submits that the Disputed Provisions must be read in the context of the Collective Agreement. This context includes the fact that the ERA provision (which is the threshold for the VEO provision) originated at a time when full-time employees were governed by one agreement and part-time employees were governed by another. When full-time and part-time employees were combined under one agreement, neither party saw any need to change the wording of the provision because the only way to give effect to the purpose of the ERA clause was to interpret it on the basis of full-time to full-time and part- time to part-time.
[39] The language of the ERA and the VEO provisions refer to the goal of avoiding layoffs, which the Panel acknowledged is most effectively achieved by a full-time to full-time and part-time to part-time interpretation. Specifically, in Clause 9.08 (B) (the ERA provision) the clause makes it clear that the maximum number of employees within a classification who may be offered an early retirement allowance must be “equivalent to the number of employees within the classification who would otherwise receive notice of layoff under article 9.08 (A)(a)(ii).” In Clause 9.08 (C) (the VEO provision) offers are only to be made if individual layoff notices are still required after the early retirement offers have been made. The provision further specifies that “[t]he number of voluntary early exit options the Hospital approves will not exceed the number of employees in that classification who would otherwise be laid off.” According to the Hospital, the Panel’s interpretation fails to give meaning to this language.
[40] According to the Hospital, the Panel’s reliance on the absence of any distinction between full and part-time employees in the Disputed Provisions was also unreasonable. In the sections of the Collective Agreement where distinctions are drawn, the clauses could have applied equally to full or part-time employees. The same is not true for the Disputed Provisions. According to the Hospital, for them to achieve their purpose, they have to be applied on a full-time to full-time, part-time to part-time basis.
[41] Finally, the Hospital submits that the Panel’s conclusion that the wording of the Disputed Provisions is clear and unambiguous is belied by the fact that the parties themselves interpreted them in a different way for 13.5 years. This, at least, reveals a latent ambiguity.
Analysis
[42] In assessing the Hospital’s position, it is important to keep in mind that the task of this Court is not to decide the matter at first instance, but to look at the Panel’s reasons and to decide if they meet the criteria for reasonableness, both in terms of outcome and in terms of the reasoning. Are they intelligible, justifiable and transparent? Is the outcome acceptable given the applicable law and the facts?
[43] It is also important that in applying the reasonableness standard, the court is attentive to the fact that the type of collective agreement interpretation at issue in this case lies at the heart of a labour relations arbitrator’s expertise. As stated in para. 93 of Vavilov, in reviewing an administrative decision, a reviewing court “should be attentive to the application by decision makers of specialized knowledge, as demonstrated by their reasons. Respectful attention to a decision maker’s demonstrated expertise may reveal to a reviewing court that an outcome that might be puzzling or counterintuitive on its face nevertheless accords with the purposes and practical realities of the relevant administrative regime and represents a reasonable approach given the consequences and the operational impact of the decision.”
The Finding that the Disputed Clauses Concern Seniority Rights
[44] As already noted, one key element of the labour relations regime is the role of seniority rights. The Panel’s analysis starts with this issue and includes a quote from an early arbitral authority, Re United Electrical Workers, Local 512, and Tung-Sol of Canada Ltd., 1964 1021 (ON LA), 1964 CarswellOnt 520, where at para. 4 the following statement appears:
Seniority is one of the most important and far-reaching benefits which the trade union movement has been able to secure for its members by virtue of the collective bargaining process. An employer’s seniority under the terms of a collective agreement gives rise to such important rights as relief from lay-off, right to recall from employment, vacations and vacation pay, and pension rights, to name only a few. It follows, therefore, that an employee’s seniority should only be affected by very clear language in the collective agreement concerned and that arbitrators should construe the collective agreement with the utmost strictness wherever it is contended that an employee’s seniority has been forfeited, truncated or abridged under the relevant sections of the collective agreement.
[45] In Scarborough Hospital v. Ontario Nurses’ Association, [2014] O.L.A.A. No. 140 , at para 12, Arbitrator Randy Levinson noted that Tung-Sol has been “frequently cited for the proposition that an employee’s seniority should only be affected by very clear language in the collective agreement, and that arbitrators should construe the collective agreement with utmost strictness, wherever it is contended that an employee’s seniority has been forfeited, truncated or abridged under the relevant sections of the collective agreement.” Thus, the Panel’s analysis is grounded on “well-established principles enunciated in a seminal case” (Scarborough Hospital, at para. 12).
[46] In reviewing the language of the Disputed Provisions, it is clear that one of the purposes of the provisions is to minimize layoffs. As the Hospital points out, the number of early retirement or voluntary exit options available is determined with reference to the number of anticipated layoffs. However, the clauses are explicit that who gets offered the packages that are available is determined on the basis of seniority. In Clause 9.08 (B) early retirement allowances are to be offered to a “sufficient number of employees eligible for early retirement under HOOPP within the classification(s) in order of seniority.” (Emphasis added). In Clause 9.08 (C) voluntary exit options are to be offered “in the classification where layoffs would otherwise occur” and “[i]f more employees than are required are interested, the Hospital will make its decision based on seniority.” (Emphasis added).
[47] The Collective Agreement provides for one seniority list that includes part-time and full-time employees. The Hospital’s interpretation of the Disputed Provisions could result in a benefit being offered to an employee who is less senior than an employee who might otherwise be eligible for the benefit. For example, if the anticipated lay-off is of a part-time employee within the classification, under the Hospital’s interpretation, the early retirement allowance can only be offered to another part-time employee within the classification, even if there are full-time employees who are more senior than the part-time employee in question.
[48] As the Panel points out, arbitral jurisprudence has repeatedly held that early retirement and voluntary exit benefits like the ones at issue in this proceeding are premised on seniority and thus, very clear language is required before an arbitrator can hold that there has been any derogation from those entitlements.
[49] In Royal Victoria Hospital of Barrie v. Ontario Nurses’ Association, [2012] O.L.A.A. No. 101 (Stout), the arbitrator was asked to determine whether the hospital should have awarded a particular nurse an early retirement allowance provided for under the collective agreement between the parties. As in the case at bar, the language of the clause in question made it clear that it was intended to avoid potential layoffs. However, the language also created the right to the early retirement benefit based on seniority. The Arbitrator found that that seniority right could not be abridged except by clear language. Therefore, he accepted the Union’s interpretation of the clause, even though it would not always avoid layoffs and could cause the hospital to “lose valuable nurses in positions they were not going to eliminate and still need to layoff junior nurses.”
[50] In Victorian Order of Nurses, the same arbitrator dealt with a policy grievance. In that case the union alleged that the employer violated its collective agreement by not offering senior employees an early-retirement allowance prior to issuing all employees with notices of permanent layoff. The employer argued that the purpose of the early retirement clause was to avoid or reduce the necessity of layoffs. Given this purpose, the clause could have no application in a situation where all the employees were being permanently laid off. The union acknowledged that one of the purposes of the clause was to avoid the necessity of layoffs, but pointed out that the clause created a benefit based on seniority. The arbitrator found, at paras. 13-14:
The language used in article 11.03 does not explicitly state that it has the purpose of avoiding or reducing the necessity of layoffs. However, the general purpose can be gleaned from the language, when it is reviewed in the context of the entire Collective Agreement. The provision clearly states that offers of early-retirement allowance are tied to the number of employees who would otherwise be provided with notice of lay-off.
At the same time, I agree with the Union that the language also creates a significant benefit based on seniority. So while one of the purposes of the language is to avoid layoffs, another purpose is confer senior employees with a benefit. [Citations omitted].
[51] The arbitrator in Victorian Order of Nurses went on to find that, because the clause did not contain clear language limiting the availability of the seniority benefit, the employer was required to offer an early retirement allowance to eligible employees prior to issuing the notice of layoff. In doing so, the arbitrator acknowledged the costs to the hospital that flowed from his award and the fact that this cost may not have been foreseen when the language of the clause was negotiated.
[52] As the Panel found, both Royal Victoria Hospital and Victorian Order of Nurses support its view that if a clause provides a seniority benefit in the form of an early retirement allowance, that benefit may not be abridged absent clear language. Language that merely gives rise to the inference that one of the purposes of the clause is to prevent layoffs is not sufficiently clear to abridge the benefit. In the case at bar, the language used in the clauses is similar to the language used in the cases referred to above, language that was found not to be clear enough to abridge the benefits at issue. Further, in both those cases the arbitrator accepted that conferring the seniority benefit may not achieve or be tied to the purpose of avoiding layoffs.
[53] While administrative decision makers are not bound by their previous decisions in the same way that courts are, consistency with other decisions is one of the factors that courts are to look at in deciding whether a decision is reasonable. (Vavilov, at paras. 129-131). In this case the Hospital gave us no authority that contradicted the analysis of the arbitrator in Royal Victoria Hospital and Victorian Order of Nurses such that we would have cause to believe that engaging in a similar analysis (as the Panel did in this case) would render a decision unreasonable. The analysis is coherent, logical and transparent. It is justified by the crucial role that seniority benefits play in labour relations. In the case at bar it is also supported by the wording in the rest of the Collective Agreement and by the decision of another arbitrator who was asked to address the same issue.
The Fisher Award
[54] In Hamilton Health Sciences v. O.P.S.E.U., Local 273, [2011] O.L.A.A. No. 272 (the “Fisher Award”), Arbitrator Fisher dealt with a policy grievance between the Hospital and a different union. The Hospital’s plan was to eliminate two part-time positions equal to one FTE. The Hospital did not offer the Retirement Allowance to full-time employees with more seniority than the part-time employees. The union alleged that the Hospital had not offered Early Retirement Allowances and Voluntary Exit Option in accordance with the provisions of the collective agreement between the parties. The wording of those provisions was the same as the wording of the provisions at issue in this proceeding. In that case the Arbitrator found that the language of the articles was clear-
However the Article does not speak of FTE’s, nor does it make a distinction between full timers and part timers. Rather it speaks only of “number of employees”. In fact, it makes reference to offering this Allowance to “the extent that the maximum number of employees within a classification who elect early retirement is equivalent to the number of employees within the classification who would otherwise receive notice of layoff under Article 11-01 (a)(ii).
This can only mean that if the proposal is to layoff two employees, then two employees are to be offered a Retirement Allowance, even if the result is to lose two FTE’s where the intent was only to eliminate one FTE.
[…] I agree that not only does this properly set out the consequences of the Union’s position but also that the result is not a necessarily logical labour relations scenario. The Hospital could have at any time called off the proposed layoffs, however once it decided to proceed with offering Retirement Allowances and Voluntary Exit Options, it must do so within the language of the Collective Agreement.
I agree with the Union’s written reply that the article is clear and any change can only be achieved through collective bargaining or through an interest arbitration.
[55] The Panel used the Fisher Award as its starting point. According to the Hospital this affected the reasonableness of its decision. I disagree. As stated in Vavilov, at para. 129, consistency is a hallmark of justice in the administrative context:
[…] administrative decision makers and reviewing courts alike must be concerned with the general consistency of administrative decisions. Those affected by administrative decisions are entitled to expect that like cases will generally be treated alike and that outcomes will not depend merely on the identity of the individual decision maker – expectations that do not evaporate simply because the parties are not before a judge.
[56] The Panel also noted that the arguments presented before Arbitrator Fisher appeared to be less fulsome that those presented before it and that Arbitrator Fisher did not hear the past practice evidence it heard. Thus, reasonably, the Panel treated the Fisher Award as its starting point, but then went on to conduct its own analysis.
The Collective Agreement as a Whole
[57] There is no dispute that interpreting a clause in a collective agreement requires viewing the clause in the context of the Collective Agreement as a whole.
[58] As already noted, when the Panel took this step, it found that the “disputed provisions appear within a collective agreement that distinguishes between those items that are intended to apply to full-time employees from those that are intended to apply to part-time employees.” The Panel went on the give several examples of clauses where these distinctions are made.
[59] Given the Panel’s finding that the Disputed Provisions deal with seniority rights and the labour relations jurisprudence that, absent clear and explicit language, seniority rights may not be limited or abrogated, it was reasonable for the Panel to conclude that the absence of an explicit distinction between full- and part-time employees meant that no such distinction should be made.
[60] The reasonableness of this finding is only enhanced by the fact that there are many other instances in the Collective Agreement where such distinctions are explicitly set out. One of those instances includes Article 9.10, which entitles laid off employees to continue to receive the employer share of insured benefits for a period of three months. Under the Collective Agreement insured benefits are only available to full-time employees, yet Clause 9.10 twice specifies it is only applicable to full-time employees. Thus, the Hospital’s submission that distinctions between full-time and part-time employees are only made in the Collective Agreement when the benefit could apply to both is inaccurate.
Conclusion
[61] With respect to the Panel’s interpretation of the Disputed Provisions themselves, I find that the Hospital has not met its onus of establishing that the Panel’s interpretation was unreasonable.
Was the Panel’s Treatment of the Past Practice Evidence Unreasonable?
The Hospital’s Position
[62] In analyzing the Disputed Provisions, the Panel was prepared to consider context, including the evidence of past practice. The Hospital agrees with the Panel’s decision on this point, but states at para. 57 of its Factum that the “issue for this application is the reasonableness of what the Chair did with that evidence”. Thus, the Hospital’s objection to the Panel’s treatment of the past practice evidence is not to the law that it applied, but to how it analyzed that evidence.
[63] In making its submission on this point the Hospital highlights the following portion of the Panel’s decision:
The Hospital urges that the practice reveals a shared understanding- a mutual intent- to interpret the disputed provisions. I have found that the practice conflicts with the clear and unambiguous language of the collective agreement. To conclude that there was a mutual intent, I would require more than evidence of conduct consistent with inattention or inadvertence. I would require at least some evidence of discussion on the point. [emphasis added by the Hospital].
[64] According to the Hospital, the Agreed Facts reveal a shared, mutual intention. Contrary to the Panel’s finding, there was no evidence of inattention of inadvertence. The evidence was that the practice continued through dozens of situations where the Union would have paid attention and adverted to the clauses. This included amalgamating the collective agreements in 2004, considering how to apply the new VEO provision in 2006, renegotiating the Collective Agreement four times, going through dozens of redeployments and senior member of the Union local and Redeployment Committee training one another on how the clauses should be applied. According to the Hospital, “There is simply no reasonable way to view this evidence as ‘inattention or inadvertence.’”
[65] The Hospital also raises the following question – If, as the Union argued and the Panel agreed, the Disputed Provisions dealt with seniority benefits and seniority is a principle of primary importance, why would the Union give up these benefits for 13.5 years through inattention or inadvertence? It makes no sense that it would do so.
[66] Finally, according to the Hospital, it was unreasonable for the Panel to rely on the absence of evidence of express discussions or negotiations between the parties. Such evidence is not required as a matter of law. Where there has been a consistent practice, knowledge of it can be inferred from the circumstances. Moreover, the evidence of so many significant events that would have focused the Union and its representatives on how the terms were being interpreted reinforces that the parties were ad idem from the time of the advent of the provisions and that no discussion was necessary.
Analysis
[67] In dealing with the Hospital’s submissions on this point it is important to keep in mind the following statement at para. 125 of Vavilov:
It is trite law that the decision maker may assess and evaluate the evidence before it and that, absent exceptional circumstances, a reviewing court will not interfere with its factual findings. The reviewing court must refrain from “reweighing and reassessing the evidence considered by the decision maker.” [Citation omitted].
[68] In para. 126, the Supreme Court goes on to specify that exceptional circumstances include where a decision maker “has fundamentally misapprehended or failed to account for the evidence before it.” A decision may also be unreasonable if the decision-maker relies on facts that were not before them.
[69] There is no basis for finding that the Panel in this case fundamentally misapprehended the past practice evidence or failed to take any of that evidence into account. To the contrary, the Panel went through each significant event and gave reasons for its conclusion why that event did not demonstrate more than mere inadvertence or inattention. There is also no evidence that the Panel relied on evidence that was not before it.
[70] Central to the Panel’s conclusion on this point is the fact that the ERA originated in collective agreements that were either exclusively for full-time or part-time employees. The Panel concluded that when the bargaining units were merged the parties simply continued their past practice, without adverting to the specific language in the combined Collective Agreement. This inference was reasonably available to the Panel on the evidence.
[71] Contrary to the Hospital’s submissions, the Panel did not hold it to be necessary as a matter of law for the parties to have had express discussions or negotiations with respect to the practice and/or the meaning of the Disputed Provisions. It was only because of the unique circumstances of this case, where the practice reflected the continuation of a practice that had developed before the full-time and part-time bargaining units merged, that the Panel found it significant that no post-merger discussions or negotiations had taken place. There is nothing unreasonable about the Panel’s approach in this regard.
[72] The Hospital argues that since the ERA and VEO are seniority benefits the Union could not have given up these benefits for 13.5 years through inadvertence. However, the opposite could equally be true. Given the importance of seniority to Unions, any failure on the Union’s part to enforce its seniority-based rights under the Collective Agreement must be presumed to have been due to inadvertence.
[73] In its Reply Factum, the Hospital argues that there is “no logical path from the agreed facts to the Arbitrator’s conclusion.” I disagree. The evidence before her was not disputed and the inferences that she drew from the evidence were reasonably available to her on that evidence.
Conclusion
[74] For these reasons I find that the Hospital has not met its burden of demonstrating that the Panel’s treatment of the past practice evidence was unreasonable.
Disposition
[75] This application for judicial review is dismissed. As agreed by the parties, as the successful party, the Union is entitled to its costs, fixed in the amount of $5000.00, all inclusive.
H. Sachs J.
I agree _______________________________
Morawetz CJSCJ.
I agree _______________________________
Gomery J.
Released: February 24, 2021
CITATION: Hamilton Health Sciences v. Canadian Union of Public Employees, Local 7800, 2021 ONSC 1337
DIVISIONAL COURT FILE NO.: DC-21-031
DATE: 2021/02/24
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Morawetz CJSCJ, Sachs and Gomery JJ.
BETWEEN:
Hamilton Health Sciences Applicant
– and –
Canadian Union of Public Employees, Local 7800 Respondent
REASONS FOR JUDGMENT
H. SACHS J.
Released: February 24, 2021