CITATION: Ontario Nurses’ Association v. Burloak Long Term Care Home, 2022 ONSC 4098

DIVISIONAL COURT FILE NO.: 669/21
DATE: 20220810

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

Swinton, Stewart and Nishikawa JJ.

BETWEEN:

ONTARIO NURSES’ ASSOCIATION

Applicant

– and –

BURLOAK LONG TERM CARE HOME

Respondent

Philip Abbink, for the Applicant

Frank Cesario and Danika Winkel, for the Respondent

HEARD at Toronto (by videoconference): July 12, 2022

Swinton J.

Overview

[1] The Ontario Nurses’ Association (“ONA”) brought an application for judicial review of an interest arbitration award dated June 29, 2021 that set the terms of a first collective agreement for nurses employed by the respondent Burloak Long Term Care Home. ONA takes issue with one provision of the award dealing with disability income protection benefits, arguing that the provision is unreasonable, and the reasons of the majority of the board are inadequate.

[2] For the reasons that follow, I would dismiss the application for judicial review, as the provision is reasonable and adequately explained.

Factual Background

[3] Labour relations between nurses and long-term care homes in Ontario are determined through a mix of central and local collective bargaining. ONA estimates that there are approximately 199 participating long term care homes in which ONA represents the nursing staff that bargain centrally and 38 non-participating homes that negotiate individually. The respondent estimates the number of homes bargaining centrally at 184. Participation in central bargaining is voluntary, and each round of negotiations is governed by a separate participation agreement. The central process results in a Nursing Homes Template Agreement (the “Central Agreement”).

[4] ONA was certified as the bargaining agent for the 18 members of the respondent’s nursing staff in December 2018. After negotiations for a collective agreement failed, the parties agreed to proceed to interest arbitration under the Hospital Labour Disputes Arbitration Act¸ R.S.O. 1990, c. H.14 (“HLDAA”). They did not choose to participate in central bargaining.

[5] Instead, the parties chose Arbitrator Brian Keller to chair the tripartite board of arbitration. Before accepting the appointment, he wrote an email to the parties on October 30, 2020, stating,

It is my practice now to seek the consent of the parties to what is, effectively, a bottom line decision with very brief reasons. Please advise if this is acceptable.

Both parties sent emails to express their consent. ONA’s reply was sent after counsel indicated that he had to seek instructions. On November 3, 2020, he wrote, “Confirming that ONA is agreeable to what you outlined.”

[6] The parties referred 24 issues to arbitration. A number of the proposals sought by ONA were patterned on terms of the Central Agreement.

[7] The Arbitrator began his reasons by stating that he had considered the criteria found in s. 9(1.1) of the HLDAA. That section sets out certain criteria to be considered, stating:

In making a decision or award, the board of arbitration shall take into consideration all factors it considers relevant, including the following criteria:

1. The employer’s ability to pay in light of its fiscal situation.
2. The extent to which services may have to be reduced, in light of the decision or award, if current funding and taxation levels are not increased.
3. The economic situation in Ontario and in the municipality where the hospital is located.
4. A comparison, as between the employees and other comparable employees in the public and private sectors, of the terms and conditions of employment and the nature of the work performed.
5. The employer’s ability to attract and retain qualified employees.

The Arbitrator also noted that this was a first collective agreement, and that there had been an earlier agreement with an association of the nurses employed by the respondent before they unionized.

[8] With respect to many issues, the Arbitrator gave a bottom line decision – that is, no reasons were provided to explain the decision on the issue. However, when the Arbitrator dealt with Article 14, the Disability Income Protection Plan (the “Plan”), he gave brief reasons. He observed that the Plan was a contentious issue between the parties. He then gave the following reasons respecting this issue:

The employer nominee points out that the union, through this award, reaps significant benefits by moving to many central provisions. I accept that. The union nominee points out that this provision is very important to the members, particularly during this time of the pandemic. I accept that.

The Chair is of the opinion that moving to Central language is preferable, and that opinion can clearly be seen by most of the provisions of this award. However, the Chair is also of the opinion that the current Disability Income Protection Plan alleviates some of the concerns of the members of the bargaining unit. Accordingly, while acknowledging that what is awarded is not normative in any way, the Board awards as follows:

The current Disability Income Protection Plan is to continue until December 31, 2021, with the exception that at which time the parties shall transition to, and shall incorporate into their collective agreement, the Central provisions.

The simple rationale for the above is that, to the extent, that the current Plan provides better protection for the members of the bargaining unit during this difficult period [which is not necessarily accepted], that protection is continued for what is, hopefully, an adequate time and then the Plan will migrate to the Central Plan.

It is also pointed out that this issue will, more than likely be dealt with during Central negotiations and the subsequent arbitration and it is the view of the Board that there should be, to the extent possible, a common plan for nurses.

The issues

[9] ONA argues that this provision of the arbitration award is unreasonable because the Arbitrator failed to apply the HLDAA criteria and important principles developed in the case law concerning interest arbitration awards – in particular, the principle of replication and the principle that there should be no regression in a first contract arbitration. ONA also argues that the Arbitrator’s reasons are deficient because they fail to provide adequate justification for the decision on the disability income protection plan. ONA asks that this Court quash that part of the award and substitute language maintaining the previous disability income protection plan in place.

The standard of review

[10] The standard of review of the Arbitrator’s decision is reasonableness.

Analysis

The outcome is reasonable

[11] In considering the arguments of ONA, it is necessary to begin with an examination of the context. The task of the board of arbitration was to determine the terms of the first collective agreement between the parties. There were many issues before it. Its task was not adjudicative, as it is in the case of a rights arbitration; rather, the board was engaged in a more policy-oriented task in which it fashioned the terms of the parties’ collective agreement. The Court is now asked to judicially review the decision about only one issue that was before the board.

[12] The nature of interest arbitration has been considered by other panels of the Divisional Court. Each has emphasized that a court on judicial review owes significant deference to an interest arbitration award. For example, in St. Gabriel’s Villa of Sudbury v. Ontario Nurses’ Association, 2015 ONSC 3459 (Div. Ct.) (at para. 5), the Court quoted the following passages from the Divisional Court’s decision in Service Employees International Union v. The Participating Nursing Homes, 2013 ONSC 4650:

11. An interest arbitrator applies the criteria set out in HLDAA in order to arrive at the terms of a collective agreement for the parties, a statute with which interest arbitrators in hospital labour disputes have particular familiarity.

12. As well, interest arbitrators exercise a broad discretion, as they are not interpreting a collective agreement, as do rights arbitrators. Rather they are settling the terms of the agreement, a task that has been said to be analogous to a legislative function in which arbitrators draw on their labour relations expertise Canadian Union of Public Employees (C.U.P.E.) v. Ontario (Minister of Labour), 2003 SCC 29, [2003] 1 S.C.R. 539 at para. 53).

13. Accordingly, a high degree of deference is to be accorded to the arbitrator’s application of the factors in s. 9(1.1) and to his or her conclusions about the appropriate terms of the collective agreement.

[13] ONA argues that the Arbitrator unreasonably disregarded the statutory criteria under the HLDAA and the relevant case law regarding the replication principle and the maintenance of pre-existing superior conditions in a first contract arbitration.

[14] While ONA argues that the board failed to consider the factors in the HLDAA, I disagree. The Arbitrator stated at the outset of the award that he considered those factors. A reading of the award makes it clear that he considered the criterion in s. 9(1.1)4, for example - “A comparison, as between the employees and other comparable employees in the public and private sectors, of the terms and conditions of employment and the nature of the work performed.” This is demonstrated by the fact that he gave significant weight to the terms determined in the central process, terms which apply to a very large number of similarly situated employees.

[15] The parties agree that replication is a core principle in interest arbitration. According to this principle, the arbitrator should seek to replicate the agreement that the parties would have achieved if they had bargained freely. The replication principle was described by then Chief Justice Winkler in University of Toronto v. University of Toronto Faculty Association (Salary and Benefits Grievance) (2006), 2006 93321, 148 L.A.C. (4th) 193 at paragraph 17:

There is a single coherent approach suggested by these authorities which may be stated as follows. The replication principle requires the panel to fashion an adjudicative replication of the bargain that the parties would have struck had free collective bargaining continued. The positions of the parties are relevant to frame the issues and to provide the bargaining matrix. However, it must be remembered that it is the parties’ refusal to yield from their respective positions that necessitates third party intervention. Accordingly, the panel must resort to objective criteria, in preference to the subjective self-imposed limitations of the parties, in formulating an award. In other words, to adjudicatively replicate a likely “bargained” result, the panel must have regard to the market forces and economic realities that would have ultimately driven the parties to a bargain.

[16] As Arbitrator Stout stated repeatedly in the recent award in F.J. Davey Home v. Canadian Union of Public Employees, Local 4685-00, 2021 10816, application of the replication principle is an objective exercise (at paras. 18-22). Accordingly, the Arbitrator in the present case was not required to take into account ONA’s assertion that it would not have accepted a disability income support plan that was less generous than the plan in place prior to certification. The prior plan had granted 100% of salary, but on a sliding scale for up to 17 weeks. However, the maximum benefits depended on length of service. ONA had sought to extend these payments for 26 weeks, as in the Central Plan, but it opposed the adoption of the Central Plan because benefits were paid at 70% of salary.

[17] In considering replication, arbitrators consider comparators (F.J. Davey at para. 22). That is what the Arbitrator did here, when he considered and awarded terms found in the Central Plan. It was reasonable for the Arbitrator, in determining appropriate collective agreement terms for nurses in the long-term health care sector, to look to the Central Agreement as an appropriate comparator for the purpose of this interest arbitration. Indeed, the Union nominee on the board, in his dissenting reasons, acknowledged that the Central Agreement comparator was of particular importance.

[18] ONA submits that there is a principle in first contract arbitrations that there will be no breakthroughs and no rollbacks of superior terms of employment obtained prior to certification. ONA relies for this proposition on Yarrow Lodge Ltd. v. HEU, 1993 CarswellBC 3145, a decision of the British Columbia Labour Relations Board. However, it should be noted that Yarrow was dealing with applications to the Board to order mediation or arbitration in negotiations for a first contract, rather than leave it to the parties to resolve their disputes by strike or lockout. I do not read the case as setting out a firm principle that there can be no rollbacks, although the Board clearly states that a first contract arbitration should not result in major breakthroughs (at paras. 145, 149, and 166). Moreover, it is not a case dealing with the proper approach in compulsory interest arbitration, the system required under the HLDAA.

[19] Moreover, ONA appears to overstate the impact of the “first contract principle”. It is a consideration, not a hard and fast rule. It is clear that interest arbitrators consider a number of principles and give weight to them as seems appropriate to the particular facts of the case (see, for example, Brockville Psychiatric Hospital and OPSEU, Local 439, Re, 2004 CarswellOnt 10292 (Burkett) at para. 10).

[20] ONA attacks only one provision determined by the Arbitrator, seeking to do so in isolation from the other terms awarded by the arbitration board. However, the reasonableness of the provision must be assessed in the overall context, as the provisions of the award reflect the compromises or give and take that would occur in collective bargaining. It is notable that the Union nominee conceded in his dissent that ONA was successful in obtaining “significant improvements” in the wages and working conditions of the nurses in the bargaining unit. Essentially, his complaint was the weight that the Arbitrator gave to various criteria in determining the disability income support plan. However, this Court owes deference to the Arbitrator’s assessment of the appropriate criteria and the weight to be given them in light of the material before the board and the submissions made to it.

[21] ONA has failed to demonstrate that the impugned provision is unreasonable. The Arbitrator was aware that the provision was of great importance to the nurses in the bargaining unit, and he fashioned a compromise between the employer’s and ONA’s positions. ONA succeeded in preserving the pre-existing Plan for several months, and the Arbitrator explained why he thought it reasonable to adopt the Central Plan thereafter. This provision was reasonable, particularly when it is assessed with other terms of the new collective agreement. I see no basis for judicial intervention.

The reasons are adequate

[22] Again, the adequacy of the reasons must be assessed contextually (St. Gabriel’s at para. 7). As the Supreme Court of Canada stated in Vavilov v. Canada (Minister of Citizenship and Immigration), 2019 SCC 65 (at para. 91), “The review of an administrative decision can be divorced neither from the institutional context in which the decision was made nor from the history of the proceedings.” See, also, para. 94.

[23] It is of great significance that the parties agreed in advance that the Arbitrator could provide a bottom line decision with brief reasons. When a court is reviewing the reasonableness of the subsequent decision, it should have regard to the reasonable expectations of the parties respecting the kind of reasons to be provided. In some situations – for example, in expedited arbitration, the parties may agree that no reasons are required. In other situations, the reasons required may be brief, either because of the nature of the decision, a statutory provision, or, in this case, an agreement of the parties as to what is expected. Having made the agreement that a bottom line decision with brief reasons was acceptable, ONA cannot now complain that brief reasons were insufficient.

[24] In any event, the reasons are adequate to explain the outcome, when considered in light of the award as a whole and the nature of interest arbitration. ONA did well on many important issues, including wages, and the resolution of a number of issues resulted in the adoption of the Central Agreement terms. ONA has not complained about these other aspects of the award, nor suggested that there was a need for better reasons with respect to them.

[25] The reasons of the Arbitrator concerning the disability income support plan show that he was well aware of the importance of the issue to the parties. He ordered a provision that respected the concerns of ONA for the continuation of the prior Plan for six months, but he then adopted the Central Plan term because he believed that the application of the Central Plan for nurses was appropriate and reasonable.

[26] His reasons were adequate to explain the provision, which, as I have said, was reasonable when considered in the overall context.

[27] Finally, ONA relies on Scarborough Health Network v. Canadian Union of Public Employees, Local 5852, 2020 ONSC 4577, where another panel of the Divisional Court overturned an interest arbitration award because the reasons were inadequate. That case is distinguishable, as there was no agreement by the parties in that case with respect to the issuance of a bottom line award with brief reasons. I also note that the Court was concerned that there was no justification for adopting past practice with respect to wage harmonization without considering the employer’s submissions about the particular circumstances – there, a merger of three hospitals with 2,100 members of the new bargaining unit. In the present case, the reasons provide adequate justification for the result.

Conclusion

[28] ONA conceded in reply argument that interest arbitration is an art, but submitted that the arbitrator has to paint on the canvas.

[29] That is what the Arbitrator did here – he reasonably took the view that the Central Agreement provided a useful comparator. Indeed, the bargaining unit did well in respect of the adoption of a number of terms of that Agreement. The fact that the Arbitrator did not accept ONA’s position on the disability income support plan in total does not make the provision he awarded unreasonable, when the provision is considered in the context of the award as a whole.

[30] Accordingly, the application for judicial review is dismissed.

[31] Costs to the Respondent are fixed at the agreed amount of $5,000.00 all inclusive.

___________________________ Swinton J.

I agree

Stewart J.

I agree

Nishikawa J.

Date of Release: August 10, 2022

CITATION: Ontario Nurses’ Association v. Burloak Long Term Care Home, 2022 ONSC 4098

DIVISIONAL COURT FILE NO.: 669/21-JR
DATE: 20220810

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Swinton, Stewart and Nishikawa JJ.

BETWEEN:

ONTARIO NURSES’ ASSOCIATION

Applicant

– and –

BURLOAK LONG TERM CARE HOME

Respondent

REASONS FOR JUDGMENT

Swinton, J.

Date of Release: August 10, 2022