CITATION: United Steel Workers (Local 2251) v. Algoma Steel Inc., 2022 ONSC 4011

DIVISIONAL COURT FILE NO.: 709/21

DATE: 2022-07-15

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Pomerance, Kurke, and Davies JJ.

BETWEEN:

United Steel Worker, Local 2251

Applicant

– and –

Algoma Steele Inc. and Stephen Raymond, Arbitrator

Respondents

M. Wright, D. Stampley, and N. Parker, for the Applicant

P. Lalonde and N. Dzuba, for the Respondent Algoma Steel Inc.

HEARD virtually at Toronto: June 7, 2022

REASONS FOR DECISION ON JUDICIAL REVIEW

A.D. KURKE J.

Overview

[1] On August 5, 2020, the applicant United Steel Workers, Local 2251 (the “Union”) brought a grievance on behalf of Mike Taylor, an Electrical Maintenance Technician (“EMT”) at the respondent Algoma Steel Inc. (“Algoma”), alleging that Taylor should be paid at the “A” rate of pay under the collective agreement between the parties instead of at the lower “B” rate. The applicant claimed that advancement of an EMT to the A-Rate was an hours-based determination, and that Taylor had completed the necessary hours of unsupervised work.

[2] Algoma responded that advancement to the A-rate also required possession of a “Red Seal Ticket”, which is a designation confirming that a tradesperson has the knowledge required for the national standard in a particular trade. The requirement had been imposed by Algoma through the exercise of its management rights under the collective agreement between the parties.

[3] In his award of July 28, 2021, Arbitrator Stephen Raymond dismissed the Union’s grievance. The arbitrator made various findings contrary to the positions that the Union had advanced. The Union argues that the award is unreasonable because it is not justified, transparent or intelligible, in that it fails to account for disputes and concerns raised by the parties with respect to facts and law and to justify how the arbitrator reached his conclusions.

[4] For the reasons that follow, I have concluded that the award is unreasonable and must be quashed, and the matter remitted for a rehearing before a different arbitrator.

Facts

[5] The collective agreement and related and incorporated documents speak of Trade or Craft employees and assigned maintenance employees at Algoma. Employees often start out at the lowest C-rate pay scale, then progress to the B-rate, and thence to the A-rate in accordance with the terms of the collective agreement and the Co-operative Wage Study Manual (“CWSM”), which is incorporated into the collective agreement by reference (collective agreement, Article 15.01.10). The CWSM classifies jobs into different classes and determines how employees progress.

[6] Article 2.01 of the CWSM does not classify assigned maintenance jobs as Trade or Craft jobs, and Articles 3.09-3.10 of the CWSM describes assigned maintenance and Trade or Craft jobs as distinct categories. In the CWSM an EMT is an assigned maintenance job and not a Trade or Craft. The EMT position was developed at Algoma and involves an amalgam of duties. It is not a national craft or trade.

[7] Article 15.07 of the collective agreement provides that employees performing maintenance jobs, such as EMTs, earn the rate of pay for their job from the time they are required to perform that job. A memorandum of understanding of April 21, 1988, whose meaning is disputed by the parties, could be taken as meaning that an EMT in a training program would be paid the A-rate upon successful completion of all “required training programs”.

[8] Article 15.08 provides that Trade or Craft employees are entitled to the rate of pay assigned to the rate classification in the collective agreement. For Trade and Craft jobs, the CWSM in Articles 5.04-5.06 specifically provides for assessment of qualifications and abilities, at intervals of 1,040 hours of work to determine whether Tradespersons or Craftspersons possess the requisite qualifications, ability, and independence to move up from starting “C” rate of pay through the intermediate “B” rate and finally to the standard “A” rate. The Red Seal Ticket is a qualification specifically for Trades and Crafts.

[9] Article 4.01 of the collective agreement is the management rights clause. By that clause, Algoma retains all functions, rights, powers and authority which the employer has not specifically abridged, deleted or modified by the collective agreement. It was and is Algoma’s position that it can exercise its residual management rights when the collective agreement is silent on an issue.

[10] Taylor was hired as an EMT and started at the C-rate in July 2016. His letter of hire informed him that a Red Seal Ticket was required before he would be paid at an A-rate for the EMT job. By January 2017 Taylor had completed 1040 hours. He was raised to the B-rate of pay in October 2018, but retroactively to January 2017. By June 2020 Taylor had completed at least a further 1040 hours of independent work at the B-rate. Algoma refused to advance him to the A-rate without a Red Seal Ticket and suggested that he should be qualified to take the exam for “Industrial Electrician” or “Construction and Maintenance Electrician”. The Union grieved this requirement being imposed upon the EMT.

[11] At the grievance there was a will-say from Mike Da Prat, president of the Union, offering evidence about the context of the collective agreement on the issue of EMTs and their progression through the pay grades. There was evidence relating to EMTs who in the past had been advanced without being required to obtain the Red Seal Ticket. There was correspondence from Algoma administration acknowledging EMT advancement after 1,040 hours, and other correspondence declining to pay the costs for an EMT to sit for a Red Seal Ticket since securing that qualification was not required and was therefore not compensable. A 2018 hiring letter of an EMT did not require the Red Seal Ticket for advancement to the A-rate as was required in Taylor’s case.

[12] At the grievance Algoma also put evidence before the arbitrator. An Algoma recruitment officer stated that at least since June 2016 Algoma, in hiring Trade and Craft employees and assigned maintenance employees without a Red Seal Ticket, had started them at the C-rate. After 1,040 hours the employee moved to the B-rate, or intermediate rate. The A-rate required a further 1,040 hours and a Red Seal Ticket. It was clarified that the EMT hiring letter pointed to by the Union made no mention of a Red Seal Ticket requirement because the employee already possessed the Red Seal designation.

The award

[13] After a Zoom hearing on May 3 and June 3, 2021, the arbitrator issued his award July 28, 2021, dismissing the grievance. The award itself contains two pages of reasons in 11 paragraphs and a signature at the top of a third page. Seven weeks had passed since the end of the hearing, which had involved an expedited process.

[14] The arbitrator set out the evidence summarily in two paragraphs (paras. 1 and 3) and noted that “[t]here is no factual difference between the parties that is relevant to my determination” (para. 2). Taylor was being paid at the “B” rate and should be paid at the “A” rate, according to the Union. Algoma disagreed, asserting that Taylor did not have the necessary Red Seal Ticket. Taylor is an EMT, whose rate of pay is determined by the collective agreement and the CWSM.

[15] The arbitrator then set out the parties’ positions (paras. 4-5):

a. The Union argued that rate of pay and wage progression occurred for EMTs regardless of whether the employee had a Red Seal Ticket, as the EMT is not a Trade and Craft position, but rather an assigned maintenance job. Algoma has historically only taken hours into account for EMT wage progression.

b. Algoma argued that it was not a violation of the collective agreement to require an EMT to have a Red Seal Ticket to progress to the “A” rate. Such a requirement is within Algoma’s management rights. In the alternative, if there is ambiguity in the collective agreement, then past practice supports Algoma’s position and estops the Union from pursuing this grievance.

[16] The arbitrator acknowledged having been referred to “some jurisprudence” but held that “it is not needed to determine this matter as this grievance turns specifically on its particular facts and the collective agreement” (para. 6).

[17] The arbitrator held (at para. 8) that there was nothing in the collective agreement or CWSM that specified how and when an employee moved from the “C” starting rate to the intermediate “B” rate and then to the standard “A” rate. He held that Algoma therefore had the right to make reasonable rules about that progression. Concerning the requirement for Taylor, an EMT, to test for a Red Seal Ticket, the arbitrator held:

“Requiring a Red Seal Ticket is a reasonable rule. An EMT may obtain a Red Seal Ticket as an “Industrial Electrician” or a “Construction and Maintenance Electrician”. Requiring that is not a violation of the collective agreement, even though, as asserted by the Union, the EMT is a different job from either of those jobs for which the Red Seal Ticket would be obtained.”

[18] The arbitrator then stated that for the Union to have been successful in its grievance, it would have to demonstrate that wage progression happened based only on hours (para. 9).

[19] In his concluding paragraph 11, the arbitrator went on to hold that if the Union had been successful in its first argument, he would still have dismissed the grievance on the basis that there is ambiguity in the collective agreement and “past practice” favoured Algoma and estopped the Union from its grievance.

Standard of review and the reasonableness of administrative decisions

[20] There is no dispute that the standard of review of the arbitrator’s decision involves a standard of reasonableness.

[21] The focus of a court reviewing an administrative decision must be on the decision actually made by the decision-maker and includes both the reasoning process and the outcome. It is not the place of a reviewing court to second-guess the administrative decision-maker or to impose a decision that it prefers. The reasons are examined in order to understand the reasoning process that the decision-maker followed to arrive at its conclusion: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, at paras. 83-84.

[22] A reviewing court asks whether the decision under review and its underlying rationale bear the hallmarks of reasonableness – justification, transparency, and intelligibility – and whether the decision is justified in relation to the relevant factual and legal constraints that bear on it: Vavilov, at paras. 15, 99-100. The reasons must be read in the context of the record that was before the arbitrator: Vavilov, at paras. 91-94.

[23] Judicial restraint lies at the heart of a reasonableness review. The review must not devolve into a “line-by-line treasure hunt for error”: Vavilov, at paras. 91 and 102. However, justification is important. While a decision-maker is not required to respond to every argument raised by the parties, the failure to meaningfully address central concerns and issues may indicate gaps or flaws in reasoning and will raise legitimate concerns that the decision-maker has not given serious consideration to a party’s position: Vavilov, at paras. 127-128; Scarborough Health Network v. Canadian Union of Public Employees, Local 5852, 2020 ONSC 4577 (Div. Ct.), at para. 15.

[24] An unreasonable chain of analysis, one which does not justify even a reasonable conclusion, can be a fatal flaw that invalidates a decision: Vavilov, at paras. 86-87.

Discussion

[25] In my respectful opinion, the award is unreasonable and must be set aside, as not being justified, transparent or intelligible. The arbitrator repeatedly stated conclusions on issues that are central to the determination of the grievance without demonstrating engagement with or analysis of the arguments of the parties.

[26] The arbitrator found nothing in the collective agreement or the CWSM that defines requirements for employee progress from “C” rate to “B” rate and then to “A” rate. For the arbitrator that finding ended the discussion, as para. 9 of the award attests. The Union failed in its grievance because it could not point to evidence in the collective agreement or the CWSM that supported its position. The arbitrator held that for that reason, Algoma was entitled to exercise its residual management right to impose requirements for employee advancement.

[27] But the Union had pointed to several provisions in the collective agreement and memoranda of understanding and other documents incorporated into the collective agreement by reference that it claimed established a rate of pay for maintenance jobs and procession through the pay grades based on hours and training, and that distinguished the progression of maintenance technicians from that for Trades and Crafts. Also in evidence before the arbitrator was the will-say evidence of Mike Da Prat, then president of the Union, and qualified in many trades. Mr. Da Prat explained various things that would be relevant to the determinations that the arbitrator had to make:

a. the development of the EMT position and in what ways it differs from a Trade or Craft in the CWSM as a maintenance job;

b. how the EMT position became incorporated into the Algoma workplace and that it is “a composite of a number of trades” and does not fit into any special certificate of qualification; there is no Red Seal for an EMT;

c. that the EMT position is defined in numerous memoranda of understanding and letters of agreement that have been incorporated into the collective agreement;

d. the advancement of assigned maintenance technicians like EMTs through the pay grades by the completion of periods of 1040 hours and training;

e. that the Union was not aware that Algoma was requiring a Red Seal to advance to the “A” grade, and that the Union had never agreed to this for an EMT.

[28] Of course, there was also evidence before the arbitrator countering that offered by the Union, particularly in the will-say of Mike Mannarino, a recruiter and human resources advisor for Algoma. Mr. Mannarino stated that a Red Seal requirement had been in place for assigned maintenance employees since 2015 or 2016. An EMT can advance to the “A” rate by earning a Red Seal as an “Industrial Electrician” or a “Construction and Maintenance Electrician”, but Mr. Mannarino acknowledged that there is no Red Seal specifically for EMTs. According to Mr. Mannarino, the Union had been aware for years that Algoma was requiring the Red Seal for EMT advancement to the “A” rate.

[29] As it is not the place of this court to determine a correct interpretation of the collective agreement, or to determine which position is more persuasive, I do not need to address discrepancies and differences in the evidence of the parties and in their interpretation of collective agreement provisions and other documents save to note that such discrepancies and differences obviously exist.

[30] Algoma argues, on the authority of numerous arbitration decisions, that it is only when the wording in the collective agreement and its incorporated documents is “ambiguous” in some way that extrinsic evidence such as that offered by Mr. Da Prat can be considered in determining the meaning of the collective agreement and the issues on a grievance. Arbitrators favour a test of the “presumptive prominence” of the language of the collective agreement without the aid of extrinsic evidence: Halton Recycling Ltd. (c.o.b. Emterra Environmental) v. Labourers’ International Union of North America, Local 183 (Benefit Coverage Grievance), [2019] O.L.A.A. No. 56, at para. 27.

[31] However, in an extended analysis in the Halton Recycling Ltd. (c.o.b. Emterra Environmental) interim award, at paras. 17-29, arbitrator Price adopted the reasoning in several appellate court decisions as the “approach of the civil courts”, as well as that in some other arbitral decisions, to permit the admission of contextual evidence to assist in the determination of the interpretation of a collective agreement even in the absence of ambiguity.

[32] On this review, I do not need to resolve the legal issues about whether extraneous evidence is admissible where the collective agreement is silent on the topic of EMT wage level advancement or only in circumstances where the collective agreement is “ambiguous”. I rather simply note that there exists a fundamental disagreement in arbitral jurisprudence about the circumstances in which extrinsic evidence is admissible to determine the meaning of a collective agreement. This disagreement was not addressed by the arbitrator here, though it could have been of central importance to a determination of what the collective agreement intended about employee advancement through the pay grades.

[33] From the above discussion, it becomes immediately apparent that the arbitrator’s conclusion that “[t]here is no factual difference between the parties that is relevant to my determination” (para. 2) is problematic in the absence of explanations about how this can be so. There is no explanation or analysis in the award that justifies or makes intelligible such a conclusion, particularly when Mr. Da Prat and Mr. Mannarino provided conflicting evidence on issues of central importance to the arbitration.

[34] The arbitrator’s conclusion that “[t]here is nothing in the collective agreement or the [CWSM]” specifying how and when an employee moves from the “C” starting rate to the intermediate “B” rate and then to the standard “A” rate” calls out for some showing that the arbitrator engaged with the language of the collective agreement and associated documents and the Union’s proposed interpretation of that language, as well as with the evidence of Mr. Da Prat. But there is none. It may be that the arbitrator reasoned that in the absence of ambiguity in the collective agreement, there was no authority for him to rely on extrinsic evidence to assist in interpreting the plain wording of the collective agreement, or there may be some other explanation. Given the conflicting positions of the parties about this issue, some explanation for the conclusion was essential in the award.

[35] The arbitrator’s further conclusion that the jurisprudence to which he was referred was “not needed to determine this matter, as this grievance turns specifically on its particular facts and the collective agreement”, only emphasizes the significance of the failure to provide explanations for the conclusion that nothing in the collective agreement or the CWSM specified how employees move through the various pay grades. If the “extrinsic evidence” jurisprudence had been properly analyzed, it may have provided the basis for admitting the evidence of Mr. Da Prat to assist in interpreting the collective agreement. To justify his conclusion in the face of Union arguments, the arbitrator should have explained why the jurisprudence was “not needed”.

[36] The arbitrator’s conclusion that obtaining either of two electrical Red Seals is a reasonable requirement for Algoma to impose on EMTs pursuant to its management rights, sits uneasily alongside the arbitrator’s acknowledgement that, “as asserted by the Union, the EMT is a different job from either of those jobs for which the Red Seal Ticket would be obtained.” There may well be reasoning that could support the arbitrator’s conclusion, but the arbitrator did not offer it. Even if this conclusion is a reasonable one, it is not justified, transparent or intelligible without the reasoning that lies behind it.

[37] Since the above issues with the award are sufficient to require that the award be set aside, I do not need to engage with the arbitrator’s alternative finding that the collective agreement is ambiguous, and that past practice prevents the Union from pursuing its grievance. Algoma argues that this finding is obiter and therefore immune from the scrutiny of a reviewing court. I will say only this. Where the parties offered directly competing evidence about past practice, the arbitrator’s blunt conclusion that an analysis of past practice favoured Algoma calls out for an explanation about how or in what respect the evidence of Mr. Da Prat was found wanting. Without an explanation, such an obiter conclusion is as unintelligible as the others that have been discussed.

[38] Conclusions on disputed central issues without any reasons or logical underpinning cannot be justified, transparent, or intelligible. When issues of central importance are met simply with conclusions without explanations, the conclusions will appear unjustified and unintelligible. Transparency requires some roadmap of how the arbitrator travelled from problem to conclusion. There is no such guidance in the award.

Conclusion

[39] For the above reasons, I conclude that the award is unreasonable and must be quashed.

[40] Algoma has submitted that in the event of such a holding the matter should be remitted to the same arbitrator with the benefit of this court’s reasons, as being more expedient and cost-efficient: Vavilov, at paras. 140-141.

[41] I do not agree. On an expedited basis, the hearing of this grievance proceeded largely on a paper record and required no more than two days, and another arbitrator should have no difficulty mastering the parties’ materials in short order. In addition, in the circumstances of this case, the arbitrator’s repeated summary conclusions require this court to be concerned about the arbitrator’s ability to divorce himself from decisions already reached and to consider the matter afresh: see United Food and Commercial Workers Union, Local 175 v. Copper River Inn and Conference Centre, [2021] O.J. No. 3905 (Div. Ct.), at paras. 73-75.

[42] The matter is remitted to a new arbitrator for determination.

[43] As to costs, on agreement of the parties with respect to quantum, the applicant is awarded $10,000, all inclusive.

A.D. Kurke J.

I agree ___________________________________

R.M. Pomerance J.

I agree __________________________________

B. Davies J.

Date: July 15, 2022

CITATION: United Steel Workers (Local 2251) v. Algoma Steel Inc., 2022 ONSC 4011

DIVISIONAL COURT FILE NO.: 709/21

DATE: 2022-07-15

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Kurke, Pomerance, and Davies JJ.

BETWEEN:

United Steel Workers, Local 2251

Applicant

– and –

Algoma Steel Inc. and Stephen Raymond, Arbitrator

Respondents

REASONS FOR DECISION

ON JUDICIAL REVIEW

A.D. Kurke J.

Released: July 15, 2022