Supreme Court of Canada
Dairy Producers Co-Operative Ltd. of Prince Albert v. Lyons, [1982] 1 S.C.R. 338
Dairy Producers Co-Operative Limited, of the City of Prince Albert, in the Province of Saskatchewan (Respondent) Appellant;
And
Clarence Lyons, of the City of Saskatoon, in the Province of Saskatchewan, on his own behalf and on behalf of all members of United Food and Commercial Workers (formerly Canadian Food and Allied Workers) (Appellant) Respondent.
1982: February 22; 1982: March 18.
Present: Laskin C.J. and Ritchie, Dickson, Estey and Mclntyre JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR SASKATCHEWAN
Labour relations—Arbitration—Dismissal—Collective agreement allowing reinstatement with compensation in cases of unjust dismissal—Severity of penalty in relation to infraction—Authority of Board to order reinstatement but without compensation—The Trade Union Act, R.S.S. 1978, c. T-17, s. 25(3).
This appeal arose out of a discharge grievance pursued to arbitration under the terms of a collective agreement. The arbitration board did not sustain the penalty of dismissal and ordered reinstatement but without payment of wages or commission for the time between dismissal and reinstatement. The Court of Appeal allowed an appeal from an order dismissing the union’s application to quash that part of the arbitration board’s decision denying the grievor compensation. Unlike the lower court, the Court of Appeal considered s. 25(3) of The Trade Union Act, which provided for the substitution of a lesser penalty, to be inapplicable, in the absence of a specific penalty for a particular infraction being imposed by the collective agreement.
Held: The appeal should be allowed.
In discharge cases, the cause and penalty are interrelated, and unless the infraction carries a specified penalty which may be discharged, there is no escape from the application of s. 25(3) to enable the arbitration board to substitute a lesser penalty when it concludes that the penalty of dismissal could not be sustained. In view of the board’s finding, it was open to it to impose a, lesser penalty as authorized by s. 25(3).
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Port Arthur Shipbuilding Company v. Arthurs, 1968 CanLII 29 (SCC), [1969] S.C.R. 85, distinguished.
APPEAL from a decision of the Saskatchewan Court of Appeal, 1980 CanLII 2297 (SK CA), [1981] 2 W.W.R. 496; (1980), 117 D.L.R. (3d) 212; 5 Sask. R. 277, allowing an appeal from an order of Noble J. dismissing an application to quash part of an award made by an arbitration board. Appeal allowed.
Ronald Barclay, Q.C., and L. B. Le Blanc, for the appellant.
George Taylor, Q.C., for the respondent.
The judgment of the Court was delivered by
Background
THE CHIEF JUSTICE—This appeal, which is here by leave of this Court, arises out of a discharge grievance which was pursued to arbitration under the terms of a collective agreement between the appellant employer and an employee union now known as the United Food and Commercial Workers. The dismissal was contested on the one hand and supported on the other but, after a hearing at which evidence was adduced and witnesses examined and cross-examined and submissions made, the arbitration board, in short reasons found that “it cannot sustain the penalty of dismissal, particularly in the presence of the Employer’s evidence that the grievor was not dismissed for theft”. The arbitration board ordered immediate reinstatement without loss of seniority “but because of all the circumstances presented to and considered by the Board without payment of any wages or commission between the time of dismissal and reinstatement as herein required”. The result was that the grievor was disciplined by loss of pay and commission for a fourteen-month period.
The assigned reason for discharge was that the grievor, who was a driver-salesman for the employer, had “altered figures on his load sheet”. Article 6 of the collective agreement sets out the grievance procedure up to and including arbitration. Sections 4 and 5 of the article read as follows:
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If an employee is dismissed for any reason whatsoever and feels that he has been unjustly dealt with, he shall within 48 hours (exclusive of Saturdays, Sundays and Statutory Holidays) from receipt of notice of dismissal, notify the grievance committee, who shall within a further 24 hours (exclusive of Saturdays, Sundays and Statutory Holidays) notify the Company in writing. The dismissal shall then constitute a grievance and shall be dealt with according to the grievance procedure, beginning with the second step. If subsequently it is decided that the employee was unjustly dismissed, he shall be reinstated in his former position and shall be paid for this period during which he has not worked as if he had not been dismissed.
When settlement is reached at any stage of these proceedings, such decision shall be final and binding. It is understood that no decision will be made unless representatives of the Union be present.
Further provision for dismissals is made by article 12(12)(a) which is in these terms:
- (a) Dismissal for Cause: Drunkenness, Dishonesty, abuse of equipment, absence without good reason and permission where practical and possible to obtain the same, shall be reasons for dismissal.
All charges must be proven. Notice of Dismissal shall be in the hands of the Committee, hereinbefore referred to, within twenty-four (24) hours after action has been taken. Any employee suspended or discharged upon grounds which, after investigation are found to be insufficient, shall be reinstated to his position and shall receive full pay for the time lost. Protest regarding the dismissal of any employee shall be given by the Committee, in writing, to the Branch Manager, within twenty-four (24) hours after the notice of dismissal has been given to the Committee.
Arbitration of grievances which remain unsettled is prescribed by article 6(2)(d) in the following words:
- The following procedure shall be applicable progressively to the adjustment of disputes or grievances:
(d) In case settlement is not reached in the third step, the matter will be referred immediately to arbitration by a board whose decision shall be final and binding. The Board shall consist of one member named by the Union, one named by the Company and third agreed upon by the two parties. In the event of failure to agree to a third party within one week, he shall be appointed by the Minister of Labour for the Province of Saskatchewan.
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In case of the appointment of a third member to an Arbitration Board as provided in the preceding clause, any expense incurred as a result of the appointment of the third party shall be borne in equal shares by the Company and the Union. The third step may be eliminated where deemed desirable in the interest of an expeditious settlement. In the first two steps the aggrieved employee or employees may be present or not, as he or they choose.
Grievances may be submitted in writing in any step of the grievance procedure, should either party consider it desirable.
Judicial History
Following the arbitration board’s decision, the Union applied to quash that part of the award which deprived the grievor of compensation for a fourteen-month period. Noble J. dismissed the application, holding that the board had the power under s. 25(3) of The Trade Union Act, R.S.S. 1978, c. T-17, to substitute a lesser penalty when, as that statutory provision stipulated, the collective agreement did not contain a specific penalty for the particular infraction. He held that that was the case here.
Section 25(3) reads as follows:
- …
(3) Where an arbitrator or arbitration board determines that an employee has been discharged or otherwise disciplined by an employer and the collective agreement governing in whole or in part the employment of the employee by the employer does not contain a specific penalty for the infraction that is the subject-matter of the arbitration, the arbitrator or arbitration board may substitute such other penalty for the discharge or discipline as to the arbitrator or arbitration board seems just and reasonable in the circumstances.
The Saskatchewan Court of Appeal, to which the Union appealed from the order of Noble J., held that s. 25(3) was inapplicable and went on to allow the appeal in the terms sought by the Union. The court took the view that the only question before the board of arbitration was whether the grievor had been unjustly dismissed, and it read the award as having so concluded. On this view, the only remedy was reinstatement with full compensation, as provided by article 6(4) of the collective agreement. In my opinion, this is too narrow an
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approach to the issue before the board of arbitration.
Analysis
I do not think that there is any warrant in this case for applying the same strictures against the appellant employer that this Court applied against a union in Port Arthur Shipbuilding Company v. Arthurs, 1968 CanLII 29 (SCC), [1969] S.C.R. 85. If anything, s. 25(3) of the Saskatchewan Trade Union Act was designed to obviate a return to the draconian principle applied in that case, and there have been similar statutory responses in other provinces, as set out in the appendix to the employer’s factum in this case. It is somewhat ironic that the Union here should press for a result in terms of the Port Arthur Shipbuilding case when the employer is content to submit to the larger remedial authority exercised by the board of arbitration.
In my opinion, the Saskatchewan Court of Appeal erred in its assessment of the issue in this case as being strictly one concerned with whether the grievor was unjustly dismissed, and it erred further in saying that the arbitration board must have so concluded when it ordered reinstatement. Article 6(4) speaks of a grievance against dismissal where the grievor feels that he has been “unjustly dealt with”, a phrase which is certainly broad enough to entitle the employee to claim that discharge was too severe a penalty for the infraction alleged. Moreover, to say, as did the Saskatchewan Court of Appeal, that by ordering reinstatement the arbitration must have found unjust dismissal is to segment the award which must be considered as a whole.
It is, of course, clear from a reading of articles 6(4) and 12(12)(a) that there may be discharges within article 6(4) which are for reasons other than those specified in article 12(12)(a). Consequently, an arbitration board may find that if the assigned cause is outside of article 12(12)(a) it may merit a penalty less than discharge, and may accordingly substitute such a penalty under s. 25(3) of the Act. If the assigned cause for dismis-
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sal, whether within articles 6(4) or 12(12)(a) is not established at all, nothing meriting any discipline being established, the grievor is entitled to reinstatement without loss of compensation. If the assigned cause is established as coming within article 12(12)(a), then the arbitration board must sustain the dismissal. If the assigned cause is within article 6(4), the board may find that it deserves dismissal if established, or some lesser penalty because dismissal goes too far for the infraction. In this latter situation, it may act under s. 25(3) of the Act.
In discharge cases, the cause and the penalty are interrelated, and unless the infraction carries a specified penalty which may be discharge, I see no escape from the application of s. 25(3) to enable the board of arbitration to substitute a lesser penalty when it concludes, as it did here, that the penalty of dismissal could not be sustained.
Since the Saskatchewan Court of Appeal agreed with the view of Noble J. that the dismissal was not for any of the causes set out in article 12(12)(a), it is clear to me that, in view of the arbitration board’s finding, it was open to it to impose a lesser penalty as authorized by s. 25(3) of the Act.
Disposition
I would, accordingly, allow the appeal, set aside the judgment of the Saskatchewan Court of Appeal and restore the order of Noble J. The appellant is entitled to costs throughout.
Appeal allowed with costs.
Solicitors for the appellant: MacPherson, Leslie & Tyerman, Regina.
Solicitors for the respondent: Goldenberg, Taylor, Randall, Buckwold & Halstead, Saskatoon.