2021 ONSC 4031
DIVISIONAL COURT FILE NO.: DC-20-624
DATE: 20210602
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Penny, McKelvey, Newton JJ.
BETWEEN:
Amalgamated Transit Union, Local 113
Applicant
– and –
Toronto Transit Commission
Respondent
Joshua Phillips and Parmbir Gill, for the Applicant
Frank Cesario and Amanda P. Cohen, for the Respondent
HEARD (by video conference): April 28, 2021
REASONS FOR DECISION
MCKELVEY J.:
Introduction
[1] This is an application for judicial review of a decision of an arbitrator, Robert Howe, brought by Amalgamated Transit Union, Local 113 (the “union”).
[2] Arbitrator Howe was initially asked to rule on a change in the disciplinary procedure which the Toronto Transit Commission (“the TTC”) introduced on April 3, 2017. A new modernized discipline process was introduced by the employer to replace the old discipline process which had been in place at the TTC for many years. The old discipline process typically commenced with an employee being “relieved of duty”. The employee or union representative would then request a step one meeting to be held under the grievance procedure, at which point the employee’s complaint about being relieved from duty would be addressed by either returning the employee to duty or dismissing the employee. Apparently, the dismissal at step one was just a term of art between the parties because no one actually had their employment severed at step one.
[3] If the employee was not returned to work at step one, the union would challenge the employer’s action by submitting the complaint as a grievance at step two of the grievance procedure, where a similar range of outcomes was possible. Failing a resolution at step two, the union would take the grievance forward to step three, where a similar range of outcomes would again be possible. Most employees who were dismissed at step one, were returned to work at some stage because of the grievance procedure. Under the old discipline plan, employees who were dismissed at step one continued to receive employee benefits, including group life insurance, a dental plan and a comprehensive medical protection plan. Under the old discipline plan, these benefits would continue until after the step three meeting was completed. If the employee was dismissed after the step three meeting, those benefits would be terminated.
[4] Under the new discipline plan, the decision as to whether an employee was to be actually dismissed occurs at a stage one meeting and the employee benefits are terminated for those employees who were dismissed at that meeting.
[5] The TTC relied on its management rights clause in Section 8 of the Collective Agreement. Section 8 provides, in relevant part:
Except as otherwise provided in this Agreement, the management,
supervision and control of the TTC’s operations and the direction
of the working force remains an exclusive Management function.
[6] In his initial decision of June 20, 2019, Arbitrator Howe concluded that terminating an individual’s fringe benefits at the step one meeting violated Section 3 of the Collective Agreement. Section 3 states that:
Any working condition which is at present in effect shall continue in effect unless it is changed during the term of this Agreement by the mutual consent of the parties hereto. Should any dispute arise as to its existence, it shall be decided under the grievance procedure as set out herein.
[7] In his conclusion on the initial decision Arbitrator Howe stated:
For the reasons set forth above, I find that the Commission was precluded by Section 3 of Article 1, and by the doctrine of estoppel, from unilaterally discontinuing, prior to the expiry of the April 1, 2014 to March 31, 2018 Collective Agreement, its longstanding practice of providing benefits to persons grieving their dismissal up to step three of the grievance procedure.
[8] Following release of that decision, union counsel requested an opportunity to make submissions on the duration of the working condition under Section 3. Arbitrator Howe granted this request and issued a second decision dated January 27, 2020. In his supplementary decision, he found that the TTC exercised its management rights under Section 8 and gave notice of the change in working condition regarding termination of benefits at step one once discipline procedures were under way. The Arbitrator therefore concluded that the obligation of the TTC to continue to provide benefits to its employees under the discipline procedure up to step three only lasted until the expiry of the Collective Agreement and the statutory freeze (which continues the terms of an existing collective agreement), unless it was negotiated or arbitrated into the new Collective Agreement. Because the union had not negotiated the continuation of benefits through to step three under the new collective agreement, the Arbitrator found that the TTC was under no obligation to pay them. It is this second decision of Arbitrator Howe which is in issue in this case.
[9] For the reasons which follow, we have concluded that this application for judicial review of Arbitrator Howe’s second decision should be dismissed.
Applicable Legal Principles
[10] As there is no statutory right of appeal, the reasonableness standard of review applies to this case.
[11] In Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 (“Vavilov”), the Supreme Court of Canada commented that when applying a reasonableness standard, a court must consider whether the decision making process of the tribunal was justified, transparent and intelligible and whether the decision falls within a range of possible, acceptable 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. Both the reasoning process and outcome must be reviewed.
[12] Courts are directed to take a “reasons first” approach to judicial review. A review must begin with a careful consideration of the decision maker’s reasons leading to the conclusion.
[13] In addition to the need for internally coherent reasoning, a reasonable decision must be justified in light of the relevant legal and factual considerations constraining the decision maker. These include the governing statutory scheme, the evidence before the decision maker and facts of which the decision maker may take notice, 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.
[14] Even if the reasons given by an administrative decision maker for a decision are read with sensitivity to the institutional setting and in light of the record, if they contain a fundamental gap or reveal that the decision is based on an unreasonable chain of analysis, it is not ordinarily appropriate for the reviewing court to fashion its own reasons in order to buttress the administrative decision.
[15] The union asserts that Section 3 of the Collective Agreement provides a working condition that continues in effect unless it is changed during the term of the agreement by the mutual consent of the parties. The words “during the term of the agreement” pertain to when the parties may mutually agree to a change, not the duration of the working condition in the absence of such an agreement. As such, the union argues that Section 3 contains no temporal limit on the operation of a working condition in the absence of mutual agreement. They argue that the protection automatically continues into any subsequent collective agreement unless changes are agreed to by the parties or ordered by an interest arbitrator.
[16] The union further argues that Arbitrator Howe did not acknowledge or analyze the grammatical structure of Section 3. Instead he adopted a misstatement of Section 3 proffered by the TTC in its argument which effectively re-writes the provision as if it read, “a working condition shall continue in effect during the term of this agreement, unless it is changed by mutual consent.”
[17] In our view, however, Arbitrator Howe was not guilty of any misreading of the provision. He clearly appreciated the grammatical context of the provision and states at p. 20 of his decision,
However, that provision says nothing about the status of those working conditions after the expiry of the Collective Agreement.
[18] It was acknowledged by both parties that the issue before Arbitrator Howe was a novel one and had not been decided previously. This is reflected in Arbitrator Howe’s decision at p. 19 where he states, “there is no indication in any of the other cases involving the application of Section 3 that this issue has ever previously been argued or decided.”
[19] The union is critical of Arbitrator Howe’s use of a historical context for his ruling. In his decision, Arbitrator Howe goes back to 1958 when the present wording of Section 3 was negotiated. He notes that the current understanding of estoppel in the labour relations context did not exist. He states, starting at p. 19 of his decision, that judicial approbation of the arbitral development of a concept of estoppel in the labour relations context which might differ from the doctrine developed by the courts was still decades away. He then goes on to state that Section 3 operated as a kind of “proto-estoppel” to remove at least some of that uncertainty, by requiring Section 3 working conditions to remain in force during the term of the Collective Agreement unless changed by the mutual consent of the parties.
[20] At p. 20 of his decision, Arbitrator Howe notes that at the time the provision was negotiated, those working conditions would also have remained unilaterally inalterable by the TTC during the period of the statutory freeze under the Labour Relations Act, 1995, S.O. 1995, c. 1, Sched. A. However, once that freeze expired, it would have been open to the TTC to unilaterally alter one or more of them. He then concludes,
Viewed in that historical context, Section 3 cannot reasonably be construed as having been intended to continue working conditions infinitely in the absence of mutual consent.
[21] The union argues that it was inappropriate for the Arbitrator to be guided by the historical context and that Arbitrator Howe failed to ask himself, or address in his supplementary award, what the parties understood Section 3 to mean when they decided to include it most recently in the 2014 to 2018 Collective Agreement. It is suggested that to consider the meaning of Collective Agreement language “frozen” as of the date of its first inclusion and to ignore the parties’ intentions in renewing the language over time and changed circumstances is unreasonable and contrary to established principles of interpretation. Instead, the union argues that Arbitrator Howe should have considered what the employer and the union must have intended when they renegotiated the language into the current Collective Agreement.
[22] Arbitrator Howe’s decision to focus attention on the historical context, however, is understandable in light of the parties’ positions at the original hearing. At p. 6 of his decision, Arbitrator Howe summarizes one of the positions taken by the union’s counsel as follows:
It has been settled between these parties since at least 1958 that Section 3 working conditions survive the operation of the Collective Agreement. They can only be changed by the mutual agreement by the parties and cannot be changed by a unilateral document such as the “estoppel letter”.
[23] We agree that it was reasonable for the Arbitrator to look at the historical context of Section 3 of the Agreement as the wording had been left unchanged from 1958 onwards. Indeed, the criteria for establishing a “working condition” under Section 3 goes back to an arbitral award in TTC v. ATU Local 113 (Grievance Re Off Nights and Night Shift Hours for Certain Trades) (1983 unreported) (the “Langille award”), which was decided in 1983.
[24] The union also takes the position that the TTC’s interpretation of Section 3 did not provide any additional rights to the union beyond those provided by the applicable law of estoppel. According to the union this renders the provision, when the parties included it in the 2014 to 2018 Agreement, “effectively redundant and meaningless”. The applicant argues that it is a fundamental principle of the interpretation of collective agreements, as with all contracts, that the parties should be assumed to have ascribed meaning to the words they use and contract provisions should not be read as being meaningless or redundant. The applicant argues that Arbitrator Howe erred in failing to apply this principle of interpretation and avoid an interpretation which rendered the provision without effect.
[25] Estoppel, however, generally operates in a situation where parties have relinquished a right under the Collective Agreement or have not insisted on strict compliance with their rights under the Collective Agreement. The Section 3 working conditions clause, by contrast, can apply to matters not addressed at all in the Collective Agreement. It would not appear to be reasonable, therefore, to conclude that the law of estoppel effectively renders the Section 3 clause redundant and meaningless.
[26] The applicant also argues that Arbitrator Howe failed to take into account the passage of the Toronto Transit Commission Labour Disputes Resolution Act, 2011, S.O. 2011, c. 2 (“TTC LDRA”). This Act was passed in 2011 and took away the right to strike for TTC employees.
[27] Section 16 of the TTC LDRA is a statutory freeze provision. It prohibits unilateral changes to existing terms and conditions of employment when a collective agreement expires. Section 16 states as follows:
- Despite subsection 86 (1) of the Labour Relations Act, 1995, if notice has been given under section 16 or 59 of that Act and no collective agreement is in operation,
(a) the employer shall not, except with the consent of the bargaining agent, alter the rates of wages or any other term or condition of employment or any right, privilege or duty of the employer, the bargaining agent or the employees unless the right of the bargaining agent to represent the employees has been terminated….
[28] The union argues that Arbitrator Howe failed to acknowledge that since the enactment of the TTC LDRA in 2011, the union has not had the right to strike and the TTC no longer has the consequential right to unilaterally alter the terms and conditions of employment at the end of the statutory freeze.
[29] As the TTC notes, however, under the TTC LDRA, the statutory freeze comes to an end when there is a new collective agreement. In this very case, the parties were unable to agree on a new collective agreement and so there was an interest arbitration held before Arbitrator Kaplan, who rendered a decision which resulted in the imposition of the current Collective Agreement. In his supplementary award, Arbitrator Howe acknowledged that the protections in Section 3 would continue until the end of the statutory freeze period provided under the TTC LDRA. There would, therefore, be an opportunity for the union to make submissions to incorporate new provisions into the new collective agreement. This is reflected in the comments of Arbitrator Howe in his decision starting at p. 21 where he states,
In the interest arbitration award issued on October 23, 2018, Arbitrator Kaplan specified that “[a]ny TTC or ATU proposal not specifically dealt with in this award is dismissed”. There is nothing in that award, nor in Arbitrator Kaplan’s supplementary award dated December 11, 2018, regarding the working condition of providing benefits to person’s grieving their dismissal up to step three of the grievance procedure. It is unclear whether or not the union made a proposal which, if it had been accepted, would have preserved that working condition. However, what is clear is that if any such proposal was made, it was dismissed by Arbitrator Kaplan.
[30] The union argues that in reaching his decision Arbitrator Howe departed from past precedents interpreting collective agreement provisions which should have been followed unless they were “manifestly wrong”. However, Arbitrator Howe in reaching his decision relied on a leading arbitration decision on the proper interpretation of Article 3, the Langille award. He makes reference to the third criterion on the Langille award which provides that the parties themselves must have regarded the matters fixed and not within unilateral management control. Arbitrator Howe notes that this criterion must be considered in the context in which it was developed, namely that it was developed when it would have been open to the TTC to unilaterally alter those matters once the statutory freeze had expired. He then goes on to state,
For purposes of Section 3, all that needs to be determined is that those matters have been regarded as fixed and not within unilateral management control during the term of a collective agreement, not that they are fixed and unilaterally inalterable in perpetuity.
[31] It is apparent, therefore, reading his decision as a whole, that Arbitrator Howe’s decision is consistent with legal precedent in the context of relevant arbitration case law.
Conclusion
[32] Having carefully reviewed the decision of Arbitrator Howe, we are satisfied that his decision was a reasonable one based on an internally coherent and rational chain of analysis which was justified in relation to the facts and the law that constrained him. We further have concluded that his decision was justified within the constraints of the applicable law and facts. There is no basis for this Court to interfere with that decision. The application is, therefore, dismissed.
[33] Counsel have agreed that the costs of this application should be payable by the unsuccessful party in the sum of $5,000. Costs are therefore payable by the applicant to the respondent in the sum of $5,000.
MCKELVEY J.
I agree
PENNY J.
I agree
NEWTON J.
Date of Release: June 2, 2021
2021 ONSC 4031
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Amalgamated Transit Union, Local 113
Applicant
– and –
Toronto Transit Commission
Respondent
REASONS FOR DECISION
Date of Release: June 2, 2021