2024 ONSC 3693
DIVISIONAL COURT FILE NO.: DC-22-43
DATE: 20240627
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Lococo, Fregeau and Trimble JJ
B E T W E E N:
THE CORPORATION OF THE CITY OF STRATFORD
Brian P. MacDonald and Cassandra da Costa, for the Applicant
Applicant
- and -
STRATFORD PROFESSIONAL FIRE FIGHTERS ASSOCIATION LOCAL 534 and KEVIN M. BURKETT
Sean McManus, for the Respondent Fire Fighters Association
Respondents
HEARD: April 26, 2024, in London
Mr. Justice J.S. Fregeau
Reasons On Application for Judicial Review
INTRODUCTION
[1] This is an Application for Judicial Review of the Supplemental Arbitration Award dated July 6, 2022 (the “Supplemental Award”) issued by the Respondent Kevin Burkett (the “Arbitrator”).
[2] The Supplemental Award addressed three implementation issues arising from the Arbitrator’s March 23, 2022 Award (the “Initial Award”). This Application relates to one of the three implementation issues, namely the ability of the Respondent Stratford Professional Fire Fighters Association, Local 534 to contract out its fire dispatch service.
BACKGROUND
[3] The Corporation of the City of Stratford (the “City”) and the Stratford Professional Fire Fighters Association, Local 534 (the “Association”) are parties to a Collective Agreement (the “Agreement”) that expired on December 31, 2019. The Association is a local unit of the International Association of Firefighters (the “IAFF”).
[4] The Agreement included Article 19.02, a comprehensive “no contracting out” provision which prohibited the City from contracting out bargaining unit work, including its fire dispatch service.
[5] The City and the Association engaged in collective bargaining negotiations in 2019 and 2020. The Association referred the matter to mediation/arbitration on October 21, 2020. A mediation took place before Arbitrator Burkett on April 14, 2021, during which the parties made progress on some issues. Further negotiations were held on July 8, 2021, and November 12, 2021, which failed to resolve all outstanding issues. The parties then proceeded to interest arbitration by written submissions.
[6] At the interest arbitration, the City sought to amend Article 19.02 to allow it to contract out its fire dispatch service. The reasoning behind the City’s desire to do so is a combination of the 9-1-1 Everything in Ontario Act, 2019 and the corresponding significant regulatory changes by the Canadian Radio Television and Telecommunications Commission (the “CRTC”). The CRTC is the regulatory body for telecommunications providers who supply the necessary networks for directing and connecting 9-1-1 calls to emergency call centres.
[7] In short, the new requirements introduced by the CRTC required the City to decommission its current fire dispatch service and upgrade it to meet the new standards. The City considered several solutions to upgrade its fire dispatch service to make it compliant, including a full upgrade to the new standards, the potential of a shared services model with another dispatching service, unifying dispatch with the Stratford Police Service, and obtaining a third-party provider to provide fire dispatching services.
[8] The total cost (capital, human resources and security, annual maintenance and licensing) of upgrading the City’s fire dispatch service to meet the new standards was estimated to be just under $2 million. The estimated annual cost of using a third-party provider would be approximately $120,000. At the interest arbitration, the City proposed that it be permitted to contract out its fire dispatch services to a third-party provider. The Association asked that this proposal be denied.
[9] The initial interest arbitration award referred the fire dispatch issues back to the parties for further discussions. These discussions reached an impasse on November 19, 2021. The parties then agreed to make written submissions to the Mediator/Arbitrator, followed by post-submission mediation. The mediation took place on January 17, 2022.
[10] In a January 28, 2022 email to the Mediator/Arbitrator and to the Association’s counsel, counsel for the City noted that following the parties’ mediation, the parties explored “the possibility of issuing a Request for Proposal for dispatch services which would be restricted to responses from IAFF member organizations.” The email then set out the reasons why the City rejected the Association’s offer.
[11] The City’s email included the following:
We ask that in the event Arbitrator Burkett is asked for a decision and in the event he is…asked to consider an award allowing the contracting out of dispatch but limiting the respondents to an RFP to IAFF-bound services, that the above form part of our submissions.
[12] On March 23, 2022, the Arbitrator issued the Initial Award. He stressed the importance of no contracting out provisions in collective agreements generally, and noted that the no contracting out provision in the Agreement between the parties had been voluntarily negotiated in response to an earlier attempt by the City to contract out its fire dispatch service – “the same initiative in respect of which the City now seeks an exemption.” The Arbitrator stated that “an exemption from a no contracting out provision should only be considered in extraordinary circumstances and only then to the limited extent necessary to address the extraordinary circumstances.”
[13] The Arbitrator found that extraordinary circumstances existed due to the cost to the City to upgrade its fire dispatch services. He further included within his finding of “extraordinary circumstances” the fact that numerous other mid to small size fire services (similar to Stratford) had responded to this situation by contracting with a fire service that had already made the necessary capital investment to upgrade.
[14] The Arbitrator observed that the objective of interest arbitration is to replicate what would most likely be achieved through free collective bargaining. The Arbitrator determined that based on the facts and circumstances before him:
The most likely collective bargaining outcome would have been an agreement under which the City would have been given an exemption from the no-contracting-out provision of the collective agreement to allow for the contracting out of its dispatch to another fire service, with the City, in turn, making concessions in regard to the Association staffing demands.
[15] The Arbitrator directed that Article 19.02 of the Agreement be amended to reflect that the City be permitted to contract out its fire dispatch function to “another fire service”.
[16] In its Implementation Issues Brief, dated April 21, 2022, the Association sought clarification that the intent of the Initial Award was to limit the contracting out of fire dispatch services to IAFF-bound services. The City responded on April 28, 2022. The City’s position was that the Arbitrator had made a complete and unambiguous decision on this issue in the Initial Award and that he was functus officio.
[17] On July 6, 2022, the Arbitrator issued the Supplemental Award. The Arbitrator began by reviewing the doctrine of functus officio as it applied in the arbitration context. He then observed that he did not “have the power to amend, alter or reconsider [his] March 23 Award. However, I have the jurisdiction to correct or clarify the Award in order to give effect to its intention.” The Arbitrator noted that mediation discussions on this issue “centered on exempting the City from Article 19.02 to the extent of allowing it to contract out its dispatch to another IAFF represented fire service in exchange for concessions in regard to the Association’s staffing demands.”
[18] In the Supplemental Award, the Arbitrator further noted that he had, in the Initial Award, rejected the City’s argument that it could not issue an IAFF limited Request for Proposals.
[19] The Arbitrator stated that “the clear intention, when read in context” behind his use of the term “fire service” in the Initial Award is to an “IAFF represented fire service” exemption. The Arbitrator provided several reasons in support of this conclusion, including:
• The mediation proposal that the City rejected was in regard to the contracting out of the dispatch function to IAFF represented fire services;
• All seven examples cited by him in the Initial Award were in regard to the contracting out of dispatch to IAFF represented fire services; and
• There was never any discussion in mediation or references in the submissions to the possibility of contracting out to a non-IAFF represented fire service.
[20] The Arbitrator further explained that his intention had been to fashion an Award based upon a mediation proposal that was designed to provide the City with relief from the no-contracting out provision “to the limited extent necessary to address the extraordinary circumstances” identified in the Initial Award.
[21] The Arbitrator ruled that, “in order to give effect to the intention of the Arbitrator in awarding as he did [in the Initial Award] the Note to Article 19.02 must be clarified to read:
Note: The City is permitted to contract out its fire dispatch function to another IAFF represented Fire Service…
THE ISSUES
What is the applicable standard of review of the Supplemental Award?
Was the Arbitrator’s clarification of the Initial Award incorrect and/or unreasonable?
Did the arbitrator improperly rely on positions taken by the parties during mediation?
POSITIONS OF THE PARTIES
The City
[22] The City acknowledges that the presumptive standard of review on a judicial review application is reasonableness. The applicant submits, however, that the presumptive standard of reasonableness can be rebutted where the rule of law requires that the standard of correctness be applied.
[23] The City contends that the standard of correctness applies in regard to general questions of law of central importance to the legal system as a whole. The City suggests that the primary issue before the court on this application is the doctrine of functus officio and the limits on an arbitrator’s jurisdiction after an award has been issued. The City submits that this issue is of central importance to the legal system such that the standard of correctness applies.
[24] In the alternative, if the standard of review is found to be reasonableness, the City submits that the reasonableness review must be “robust” and not a “rubber stamping process”.
[25] The City submits that the Arbitrator was functus officio in relation to the issue of the City contracting out its fire dispatch service after he issued the Initial Award and that the Supplemental Award was therefore both incorrect and unreasonable. The City contends that the Arbitrator exceeded his jurisdiction in the Supplemental Award by substantially amending the nature of the Initial Award in relation to the no contracting out issue.
[26] The City acknowledges that the Arbitrator retained jurisdiction to address all matters in dispute pending implementation of the Initial Award. However, the City contends that this jurisdiction is limited to addressing clerical and/or typographic slips or errors only. The City submits that the Initial Award clearly and unambiguously allowed it to contract out its fire dispatch services to “another fire service” without any restriction limiting that contracting out to an IAFF bound fire service.
[27] The City submits that the revision made by the Arbitrator in the Supplemental Award was not merely the correction of an error. The City suggests that the revision from “another fire service” to “another IAFF represented fire service” substantially and fundamentally altered the clear meaning of the Initial Award. The City argues that the two concepts have substantially different meanings in implementation and go well beyond the correction of a clerical error.
[28] The City submits that the Initial Award was clear and unambiguous in relation to the contracting out issue and that the Arbitrator was therefore functus officio on that issue. The City contends that the Arbitrator thereafter incorrectly and unreasonably exceeded his jurisdiction in the Supplemental Award by making a substantive change to the Initial Award.
[29] The City submits that in the Supplemental Award, the Arbitrator improperly relied, in part, on the City’s willingness to consider a possible negotiated resolution to the dispute as discussed during without prejudice mediation discussions, when amending the Initial Award. The City submits that information obtained during the mediation phase of a proceeding, and in particular settlement discussions, is presumptively precluded from the subsequent arbitration.
[30] The City submits that the Arbitrator’s reliance on a proposal raised by the Association, and which was ultimately rejected by the City during mediation, was improper and unreasonable.
The Association
[31] The Association submits that the Arbitrator’s decision in the Supplemental Award does not raise a general question of law within the meaning of the standard of review analysis. The Association submits that the doctrine of functus officio is well-settled law, which the Arbitrator correctly summarized in the Supplemental Award.
[32] The Association submits that the City does not suggest that the Arbitrator applied the incorrect legal principles, but rather that he erred in his application of that law to the facts before him. The Association contends that the standard of reasonableness applies to a tribunal’s application of the generally accepted principles surrounding the doctrine of functus officio.
[33] The Association submits that after the Arbitrator correctly set out the generally accepted principles of the doctrine of functus officio, he then determined that those principles did not preclude him from determining if the Initial Award accurately reflected his intention to permit the contracting out of fire dispatch services only to a fire service bound by an IAFF collective agreement. Thus, the true issue being raised by the City is the Arbitrator’s application of the doctrine to the facts before him, which the Association contends cannot reasonably be viewed as a dispute that raises general questions of law of central importance to the legal system.
[34] As a result, the Association submits that the standard of review to be applied to the Supplemental Award is the presumptive, deferential standard of reasonableness.
[35] The Association submits that the Arbitrator, after correctly reciting the constraints imposed upon him by the doctrine of functus officio, explained that in the Initial Award, it had been his “clear intention” to make an award based on the Applicant’s settlement proposal, namely, granting the City the right to contract out its fire dispatch service to another fire service bound by an IAFF collective agreement.
[36] The Association suggests that the Arbitrator, in the Supplemental Award, explained that this “clear intention” was borne out by the context when the Initial Award was read as a whole. The context noted by the Arbitrator included:
• The Association’s proposal was to permit contracting out of the dispatch function only to an IAFF represented fire service;
• The Arbitrator’s direct rejection of the City’s assertion that it could not limit its RFP to only IAFF services;
• The fact that all seven examples cited in the Initial Award, of where fire dispatch services had been contracted out to another fire service, were all IAFF bound fire services;
• The Arbitrator’s intention was to provide the City with relief from the no contracting out provision in Article 19.02 only “to the limited extent necessary to address the extraordinary circumstances”; and
• There was never any discussion in mediation or any references in the parties’ submissions to the possibility of contracting out to a non-IAFF bound fire service.
[37] The Association suggests that for the court to accept the City’s argument that the Arbitrator was fundamentally altering his Initial Award in the Supplemental Award, the court would have to necessarily conclude that the Arbitrator was being untruthful when stating and comprehensively explaining what his true intention had been in the Initial Award.
[38] The Association submits that the Arbitrator’s conclusion that he was not functus and that he had jurisdiction to clarify the Initial Award was reasonable. The Association further contends that the Arbitrator’s rationale for limiting the City’s ability to contract out is fire dispatch service was also reasonable.
[39] The Association submits that a review of the Arbitrator’s reasoning in the Initial Award and the Supplemental Award renders it obvious that he was not prepared to allow the City to rely on the unique and extraordinary circumstances present as a reason for contracting out its fire dispatch service to a non-IAFF service. To do otherwise would exceed the “limited extent necessary to address the extraordinary circumstances” restriction which the Arbitrator had expressly acknowledged in the Initial Award, according to the Association.
[40] The Association submits that the Arbitrator’s decision to limit the contracting out of the City’s fire dispatch service to other fire services bound by a collective agreement was reasonable.
[41] The Association submits that the parties’ conduct during mediation made it clear that they both intended the Arbitrator to take the Association’s settlement offer into account in arriving at the Award.
[42] The Association notes that mediation with respect to the dispatch issues took place on January 17, 2022, and that the City, in a January 28, 2022 email to the Arbitrator, confirmed that the parties had explored the possibility of restricting the contracting out of fire dispatch to only IAFF bound fire services. The Association submits that in that email, the City explained why it rejected the Association’s settlement offer and expressly asked the Arbitrator to consider the City’s reasons, as set out in the January 28, 2022 email, when drafting his Award on this issue.
[43] The Association points out that the City did not object to:
• The Arbitrator’s reference to the Association’s proposed settlement in the Initial Award;
• The Association’s reference to its settlement proposal in its Implementation Brief requesting clarification of the Initial Award; and
• The Arbitrator’s reference to the Association’s settlement offer in the Supplemental Award.
[44] The Association submits that the City also failed to raise this issue in the original version of its Notice of Application for Judicial Review, and only objected to the Arbitrator’s reliance on the Association’s settlement proposal for the first time when it amended its application to allege a breach of mediation privilege by the Arbitrator.
[45] The Association submits that the parties’ conduct, and in particular the City’s request in its January 28, 2022 email stating that the Arbitrator consider the email’s contents including reference to the Association’s settlement proposal, establishes that the parties did not intend the Association’s settlement proposal to be subject to privilege.
[46] The Association submits, in these specific circumstances, that the Arbitrator did not act unreasonably by considering the Association’s settlement proposal when coming to his decision in the Initial Award or when clarifying the Initial Award in the Supplemental Award.
DISCUSSION
Standard of Review
[47] It is well settled that the reasonableness standard presumptively applies to a judicial review in the context of interest arbitration. However, in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653, at paras. 17, 58-62 (“Vavilov”), the Supreme Court of Canada directed that “general questions of law of central importance to the legal system as a whole” are to be reviewed on the standard of correctness. The Court explained that the application of the correctness standard in the latter context allows the court to have “the last word on questions for which the rule of law requires consistency and for which a final and determinate answer is necessary.”
[48] I reject the City’s submission that the primary issue on this judicial review is the Arbitrator’s articulation of the doctrine of functus officio and/or the Arbitrator’s application of incorrect legal principles in relation to the limits of his jurisdiction when clarifying the Initial Award. In turn, I reject the City’s submission that this application involves a general question of law of central importance to the legal system which should be reviewed on the standard of correctness.
[49] In the introductory section of the Supplemental Award, the Arbitrator cited Rainbow Concrete Industries Ltd. v. I.U.O.E., Local 793 (Ont. L.A.), [2011] 107 C.L.A.S. 147, which in turn cited Chandler v. Alberta Association of Architects, [1989] 2 S.C.R. 848, and then accurately set out the doctrine of functus officio and the limits on his jurisdiction in relation to the implementation issues the parties had sought clarification on:
I do not have the power to amend, alter or reconsider my March 23, 2022, Award. However, I have the jurisdiction to correct or clarify the Award in order to give effect to its intention.
[50] In this case, there is no dispute between the parties as to the legal principles encompassing the doctrine of functus officio. The City does not suggest that the Arbitrator applied the wrong legal principles. The dispute before the court is centered on the application of well-settled legal principles by the Arbitrator when clarifying his Initial Award.
[51] The standard of reasonableness applies to an administrative tribunal’s application of the doctrine of functus officio. In Capital District Health Authority v. Nova Scotia Government and General Employees Union, 2006 NSCA 85, 271 D.L.R. (4th) 156, the Nova Scotia Court of Appeal stated the following at paras. 46, 47 and 53:
[46] To determine whether it could issue a supplemental award as it did, the board had to do two things. First, it had to understand the broad legal principles of functus officio. Second, it had to interpret its initial award to determine its manifest intent. In other words, the board had to decide whether the effect of its supplemental award was to give effect to that manifest intent.
[47] This question, in my view, is one of mixed law and fact. While the interpretation of a contract or a statute is a question of law, it seems highly artificial to so characterize a tribunal’s assessment of its own manifest intent. A correct statement of the legal principle, on its own, would not resolve the parties’ dispute. Their dispute was “... about whether the facts satisfy the legal tests ...” relating to functus officio and involved “... applying the law to the facts... .”: Its resolution depends on the particular intent which this board had in these circumstances. This precise issue is unlikely to arise again and the result will be of virtually no precedential value. It is almost entirely a matter of “pure application”. These are the hallmarks of a mixed question of law and fact. [Citation omitted.]
[53] The reasonableness standard of review seems to me to strike an appropriate balance between the goals of finality and effectiveness in the context of interest arbitration. Affording the board a measure of deference in relation to determining its own manifest intent will help ensure that the board is able to finish the job assigned to it. Insisting that its conclusion in this regard be reasonable, however, ensures that due weight will be given to the goal of finality.
[52] I find that the standard of review to be applied on this application for judicial review is the standard of reasonableness, which affords a high degree of deference to the decisions of interest arbitrators who have specialized knowledge of labour relations.
[53] “To be reasonable, a decision must be based on reasoning that is both rational and logical.” The decision “must be justified in relation to the constellation of law and facts that are relevant to the decision”: see Vavilov, at paras. 102 and 105.
[54] Before a decision can be set aside as unreasonable, a reviewing court must be satisfied that “there are sufficiently serious shortcomings in the decision such that it cannot be said to exhibit the requisite degree of justification, intelligibility and transparency”: see Vavilov, at para. 100.
Was the Arbitrator’s Clarification of the Initial Award Unreasonable?
[55] As noted above, the Arbitrator began his analysis in the Supplemental Award by correctly articulating the limits on his jurisdiction when responding to the implementation issue raised by the parties. He determined that his jurisdiction was limited to correcting or clarifying the Initial Award “to give effect to its intention”.
[56] In addressing the clarification of the contracting out of dispatch issue, the Arbitrator first noted that in the Initial Award he expressly stated that, generally, an exemption from a no contracting out provision should only be considered in extraordinary circumstances and then only to the limited extent necessary to address the extraordinary circumstances.
[57] The Arbitrator went on to state that his intention in the Initial Award had been to fashion an award based on a mediation proposal that was designed to provide the City with relief from the no contracting out prohibition only “to the limited extent necessary to address the extraordinary circumstances.” The mediation proposal referred to by the Arbitrator was the Association’s proposal – providing the City with the right to contract out its dispatch services only to another IAFF bound fire service.
[58] The Arbitrator then explained that where he referred to a "fire service" exemption, this was a "shorthand" reference to an "IAFF represented fire service", which was his "clear intention when read in context", given that:
[T]he mediation proposal that the City rejected was in regard to the contracting out of the dispatch function to an IAFF represented fire service, given that all 7 of the examples cited in the Award are in regard to the contracting out of dispatch to IAFF represented fire services and given that there was never any discussion in mediation or reference in the submissions to the possibility of contracting out to a non IAFF-represented fire service, the only conclusion to be drawn from the above commentary and from the award itself is that the reference to "fire service" in the March 23, 2022 award were shorthanded references to "an IAFF represented fire service.
[59] I find that the Arbitrator’s decision that he was not functus, and that he had jurisdiction to clarify the Initial award, was reasonable. In my view, the Arbitrator’s rationale for limiting the ability of the City to contract out its fire dispatch service, as rationally and logically explained in the Supplemental Award, was reasonable.
Did the Arbitrator Improperly Rely on Positions Taken by the Parties during Mediation?
[60] As noted above, on January 17, 2022 following the Initial Award, mediation with respect to the dispatch issue took place.
[61] In the January 28, 2022 email from the City to the Arbitrator and to the Association, the City noted the parties’ efforts to explore during mediation the possibility of restricting the contracting out of dispatch to only fire services bound by an IAFF collective agreement, and explained why it rejected the Association’s proposal on this issue. The City concludes the letter by stating that if the Arbitrator were considering or were asked to consider an award that would allow “the contracting out of dispatch but limiting the [City] to an RFP to IAFF-bound services, that the above form part of our submissions” (emphasis added).
[62] It is clear that the City intended that its position in rejecting the Association’s settlement proposal as established in the January 17, 2022 mediation and settlement discussions, would not be subject to privilege. The Association did not object.
[63] Subsequently in the Implementation Brief dated April 21, 2022, the Association referenced their settlement proposal in the request for clarification to the Arbitrator. The City did not object.
[64] In the Supplemental Award dated July 6, 2022, the Arbitrator referred to and considered the Association’s settlement proposal. The City did not object.
[65] In the City’s Notice of Application for Judicial Review dated August 2, 2022, the City did not raise any issue regarding the Arbitrator breaching privilege by referring to the Association’s settlement proposal.
[66] The City did not take issue with the Arbitrator’s alleged breach of settlement privilege until it filed an amended Notice of Application one month later.
[67] In these circumstances, the Arbitrator’s reliance on or reference to the settlement proposal or mediation discussions was reasonable. He was expressly asked to do so, and the City did not raise this as an issue until approximately eight months later. Accordingly, the Arbitrator acted logically and reasonably in the circumstances.
DISPOSITION
[68] The City’s application is dismissed. Pursuant to the parties’ agreement, the costs of the application are fixed at $7,500 “all in”, to be paid by the City to the Association within 30 days.
Fregeau J.
I agree _______________________________
Lococo J.
I agree _______________________________
Trimble J.
Released: June 27, 2024
2024 ONSC 3693
DIVISIONAL COURT FILE NO.: DC-22-0043-00
DATE: 20240627
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
THE CORPORATION OF THE CITY OF STRATFORD
Applicant
- and –
STRATFORD PROFESSIONAL FIRE FIGHTERS ASSOCIATION LOCAL 534 and KEVIN M. BURKETT
Respondents
REASONS ON APPLICATION FOR JUDICIAL REVIEW
Fregeau J.
Released: June 27, 2024