St. Anne Nackawic Pulp & Paper v. CPU, 1986 CanLII 71 (SCC), [1986] 1 SCR 704

St. Anne Nackawic Pulp & Paper v. CPU, [1986] 1 S.C.R. 704

St. Anne Nackawic Pulp & Paper Co. Ltd. Appellant;

and

Canadian Paper Workers Union, Local 219 Respondent.

File No.: 17485.

1984: December 10; 1986: June 12.

Present: Dickson C.J. and Estey, McIntyre, Chouinard, Lamer, Wilson and Le Dain JJ.

on appeal from the court of appeal for new brunswick

Labour relations ‑‑ Collective agreement ‑‑ Breach ‑‑ Strike notwithstanding no strike clause in agreement and in defiance of court injunction ‑‑ Action by employer for damages ‑‑ Whether court had jurisdiction to entertain action or whether jurisdiction restricted to arbitration board by statutory scheme ‑‑ Industrial Relations Act, R.S.N.B. 1973, c. I‑4, ss. 53(1), 55(1), 91(1).

Courts ‑‑ Jurisdiction ‑‑ Labour relations ‑‑ Collective agreement ‑‑ Breach ‑‑ Strike notwithstanding no strike clause in agreement and in defiance of court injunction ‑‑ Action by employer for damages ‑‑ Whether court had jurisdiction to entertain action or whether jurisdiction restricted to arbitration board by statutory scheme.

Appellant claimed damages from respondent for the losses flowing from the virtual shutdown of its plant when its mill employees walked out in sympathy with a legal strike by its office employees, notwithstanding the fact that the mill unit was bound by a collective agreement banning strikes and lock‑outs. The claim was based on the fact that the walkout had violated both the collective agreement and the Industrial Relations Act. Prior to trial, the trial judge raised the preliminary question of whether the court had jurisdiction to hear a claim arising out of a collective agreement, given the comprehensive provision in the Industrial Relations Act for the submission to arbitration of all differences between parties to a collective agreement. That question was answered in the negative at trial and the conclusion upheld on appeal.

Held: The appeal should be dismissed.

The grievance and arbitration procedures provided for in labour relations statutes generally provide the exclusive recourse open to parties to a collective agreement for its enforcement. This is true whether or not the questions in issue might have arisen under the common law of master and servant in the absence of a collective bargaining regime, if the collective agreement binding the parties provides for the matters in issue. It is also true whether or not the meaning or application of a collective agreement's terms are disputed.

Judicial deference to the arbitration process is present whether the board in question is a statutory tribunal or a private tribunal not created by statute. This deference springs from the idea that, were the courts available as an alternative forum, violence would be done to a comprehensive statutory scheme designed to govern all aspects of the relationship of the parties in a labour dispute setting.

The power of the court to enjoin illegal strike activity, nevertheless, is not diminished where the grievance and arbitration process can provide no adequate remedy in the circumstances. This power is not to enforce collective agreements per se but to enforce the general law embodied in the statute, including an express prohibition on strikes during the currency of a collective agreement and provision for binding and enforceable arbitration. While an injunction might incidentally enforce rights and obligations under a collective agreement, these incidental effects are not sufficient to deny an injunction to prevent immediate harm arising out of a clearly illegal act where no alternative remedy exists.

The equitable jurisdiction to award damages in substitution for or in addition to an injunction cannot provide the basis for the relief sought here. The damages sought were not in substitution for an injunction because an injunction had been issued. The failure of the injunction to operate was corrected by contempt orders ‑‑ the proper means of enforcing an injunction. Civil damages are not part of the weaponry of the court in ensuring compliance.

Section 91 of the Industrial Relations Act did not establish a cause of action for damages. It is simply one of a series of restrictive provisions forming part of a complex structure governing labour relations. Burdening that structure with collateral actions for damages is hostile to the purpose and philosophy of such legislation. Damages, where they are appropriate compensation for action in breach of both the legislation and the collective agreement, are properly available in an arbitration based on the terms of the collective agreement, and not in a court action based on the terms of the statute.

Cases cited

International Brotherhood of Electrical Engineers, Local Union 2085 v. Winnipeg Builders’ Exchange, 1967 CanLII 116 (SCC), [1967] S.C.R. 628; Winnipeg Teachers’ Association v. Winnipeg School Division No. 1, 1975 CanLII 181 (SCC), [1976] 2 S.C.R. 695; McGavin Toastmaster Ltd. v. Ainscough, 1975 CanLII 9 (SCC), [1976] 1 S.C.R. 718; General Motors of Canada Ltd. v. Brunet, 1976 CanLII 196 (SCC), [1977] 2 S.C.R. 537, considered; Shell Canada Ltd. v. United Oil Workers of Canada, 1980 CanLII 200 (SCC), [1980] 2 S.C.R. 181; Hamilton Street Railway Co. v. Northcott, 1966 CanLII 14 (SCC), [1967] S.C.R. 3; Woods v. Miramichi Hospital (1966), 1966 CanLII 483 (NB CA), 59 D.L.R. (2d) 290; Logan v. Board of School Trustees District No. 14 (1973), 1973 CanLII 1209 (NB CA), 40 D.L.R. (3d) 152; Foisy v. Bell Canada (1984), 1984 CanLII 5085 (QC CS), 18 D.L.R. (4th) 222, [1984] C.S. 1164; Shank v. The KVP Co., 1966 CanLII 131 (ON SC), [1966] 2 O.R. 847; Close v. Globe & Mail Ltd. (1966), 1966 CanLII 135 (ON CA), 60 D.L.R. (2d) 105; Acadia Pulp and Paper Ltd. v. International Brotherhood of Pulp, Sulphite and Paper Mill Workers (1970), 1970 CanLII 961 (NB SC), 15 D.L.R. (3d) 227; Ford v. Trustees of the Ottawa Civic Hospital, 1973 CanLII 822 (ON SC), [1973] 3 O.R. 437; Binder v. Halifax County Municipal School Board (1978), 1978 CanLII 2125 (NS CA), 84 D.L.R. (3d) 494; Bergeron v. Kingsway Transports Ltd. (1979), 1979 CanLII 1734 (ON SC), 23 O.R. (2d) 332; Campbell v. East‑West Packers (1969) Ltd. (1982), 1982 CanLII 2880 (MB CA), 142 D.L.R. (3d) 90; Lawn v. Algonquin College of Applied Arts and Technology (1982), 1982 CanLII 2145 (ON SC), 39 O.R. (2d) 377; Hooper v. Wellington County Board of Education (1984), 1984 CanLII 2039 (ON SC), 46 O.R. (2d) 680; Bourne v. Otis Elevator Co. (1984), 45 O.R. (2d) 321; Caines v. Cape Breton Development Corp. (1973), 1973 CanLII 1243 (NS SC), 39 D.L.R. (3d) 606; Downey v. Scotia Square Hotel Ltd. (1974), 1974 CanLII 1312 (NS SC), 55 D.L.R. (3d) 300; Drogt v. Robson‑Lang Leathers Ltd., 1971 CanLII 728 (ON SC), [1971] 3 O.R. 488; Perini Pacific Ltd. v. International Union of Operating Engineers, Local 115 (1961), 1961 CanLII 323 (BC SC), 28 D.L.R. (2d) 727; Roberval Express Ltée v. Transport Drivers, Warehousemen and General Workers Union, Local 106, 1982 CanLII 34 (SCC), [1982] 2 S.C.R. 888; Howe Sound Co. v. International Union of Mine, Mill and Smelter Workers (Canada), Local 663, 1962 CanLII 37 (SCC), [1962] S.C.R. 318; International Longshoremen’s Association, Locals 273, 1039, 1764 v. Maritime Employers’ Association, 1978 CanLII 158 (SCC), [1979] 1 S.C.R. 120; British Columbia Maritime Employers Assn. v. International Longshoremen’s and Warehousemen’s Union‑‑Canadian Area, 1972 CanLII 1501 (BC SC), [1972] 5 W.W.R. 738; Saint John Shipbuilding and Dry Dock Co. v. Industrial Union of Marine and Shipbuilding Workers, Local 3 (1979), 1979 CanLII 3217 (NB SC), 26 N.B.R. (2d) 179; New Brunswick Electric Power Commission v. International Brotherhood of Electrical Workers, Local 1733 (1978), 1978 CanLII 2741 (NB SC), 22 N.B.R. (2d) 364; Re International Nickel Co. of Canada and Rivando, 1956 CanLII 122 (ON CA), [1956] O.R. 379; Barraclough v. Brown, [1897] A.C. 615; Young v. Canadian Northern Ry. Co., 1930 CanLII 465 (UK JCPC), [1931] A.C. 83; Textile Workers v. Lincoln Mills of Alabama, 353 U.S. 448 (1957); Steelworkers v. American Mfg. Co., 363 U.S. 564 (1960); Transport Labour Relations v. General Truck Drivers & Helpers Union, Local No. 31 (1974), 1974 CanLII 1251 (BC SC), 54 D.L.R. (3d) 457, referred to.

Statutes and Regulations Cited

Canada Labour Code, R.S.C. 1970, c. L‑1.

Chancery Amendment Act (Lord Cairns' Act), 21 & 22 Vict., c. 27.

Courts of Justice Act, 1984, 1984 (Ont.), c. 11, s. 115.

Industrial Relations Act, R.S.N.B. 1973, c. I‑4, ss. 53(1), 55(1), (2), 56(2), 91(1), 102(3), 109(4), 111(1).

Judicature Act, R.S.N.B. 1973, c. J‑2.

Labour Relations Act, R.S.N.B. 1952, c. 124, s. 18(3).

Labour Relations Act, R.S.O. 1980, c. 228.

Rights of Labour Act, R.S.O. 1980, c. 456, s. 3(3).

Trade‑unions Act, R.S.B.C. 1960, c. 384, s. 4.

Authors Cited

Adams, George W. Canadian Labour Law, Aurora, Ont., Law Book Inc., 1985.

De Smith, S. A. De Smith’s Judicial Review of Administrative Action, 4th ed. by J. M. Evans, London, Stevens & Sons, 1980.

APPEAL from a judgment of the New Brunswick Court of Appeal (1982), 1982 CanLII 2892 (NB CA), 142 D.L.R. (3d) 678, 44 N.B.R. (2d) 10, 116 A.P.R. 10, 82 CLLC ¶14, 216, dismissing an appeal from a judgment of Higgins J. declining jurisdiction. Appeal dismissed.

J. Gordon Petrie, Q.C., and Donald E. MacPherson, for the appellant.

Brian Neill and Robert Breen, for the respondent.

The judgment of the Court was delivered by

Introduction

1. Estey J.‑‑This case raises for the first time in this Court the question whether a court of otherwise competent jurisdiction is authorized to receive a claim by an employer for damages against a trade union, the bargaining agent for its employees, by reason of a strike which was allegedly, and on the record before this Court, apparently, illegal under the applicable labour relations statute, and which was at the same time a breach of a collective agreement to which the employer and the trade union are parties. In earlier proceedings, the details of which are not disclosed in the record in this appeal, the employer obtained an interlocutory injunction enjoining the continuance of a strike by this group of employees. Apparently the claim for damages, the issue now before the Court, arose in the same proceedings, although there is no mention of a claim for injunction in the prayer for relief in the statement of claim issued some months after the interlocutory injunction.

2. The issue in this appeal was expressly left open by this Court in Shell Canada Ltd. v. United Oil Workers of Canada, 1980 CanLII 200 (SCC), [1980] 2 S.C.R. 181, per Chouinard J., at p. 189. There are numerous instances where the courts have issued injunctions in such circumstances, and the jurisdiction to do so was settled in International Brotherhood of Electrical Engineers, Local Union 2085 v. Winnipeg Builders’ Exchange, 1967 CanLII 116 (SCC), [1967] S.C.R. 628. The courts have also awarded damages in similar circumstances (i.e., Winnipeg Teachers’ Association v. Winnipeg School Division No. 1, 1975 CanLII 181 (SCC), [1976] 2 S.C.R. 695) but in those cases the issue of the jurisdiction of the court to do so was not challenged by the parties.

Background and Facts

3. The respondent is a trade union certified to represent the workers at the appellant's pulp and paper mill situated in the town of Nackawic, New Brunswick. There are three bargaining units, two of which concern us here, the mill unit and the office unit. On May 29, 1981, their collective agreement having expired, the office unit workers commenced a legal strike and set up picket lines at entrances to the mill. The mill unit workers, whose collective agreement was still in force, withdrew their services in sympathy on the same day. The appellant commenced the present action in the Court of Queen's Bench on June 1, 1981, and obtained an interlocutory injunction on June 3, 1981. The claim for damages is found in the statement of claim issued on September 21, 1981 and relates to compensation sought for the considerable daily losses resulting from what was effectively a plant shut‑down caused by the mill workers' strike. Although the interlocutory injunction was issued on June 3, 1981, the mill unit workers did not return to work until June 7, the Court having on June 6 made a contempt order against the respondent and three of its officers. The mill workers again withdrew their labour on June 22, 1981. A second contempt order was made on June 27, but the mill workers did not return to work until July 3, 1981, when a new collective agreement was signed by the office workers. The court imposed on the respondent fines of $15,000 and $25,000 on the successive findings of contempt. There was no issue raised as to the jurisdiction of the court on return of the interlocutory motion for injunction or at the time of the contempt proceedings.

4. In its pleadings, the appellant based its claim on the following ground:

The said unlawful strike referred to in paragraph 6, was in breach of the Collective Agreement between the Plaintiff and the Defendant and in violation of the Industrial Relations Act.

The collective agreement referred to was the one between the mill unit and the appellant. It had an expiry date of July 31, 1982, and provided that, "There shall be no strike, lockout, stoppage, slowdown or restriction of output during the life of this Agreement." The relevant sections of the Industrial Relations Act, R.S.N.B. 1973, c. I‑4, as amended, are as follows:

53(1) Every collective agreement shall provide that there shall be no strikes or lock‑outs so long as the agreement continues to operate.

91(1) Where a collective agreement is in operation, no employee bound by the agreement shall strike and no employer bound by the agreement shall lock‑out such an employee except as permitted in subsection (3) [which is not relevant to the present case].

The Act further provides, however, and this is what led to the trial judge's reservation of the question of the court's jurisdiction as a preliminary matter, that:

55(1) Every collective agreement shall provide for the final and binding settlement by arbitration or otherwise, without stoppage of work, of all differences between the parties to, or persons bound by, the agreement or on whose behalf it was entered into, concerning its interpretation, application, administration or an alleged violation of the agreement, including any question as to whether a matter is arbitrable.

Where a collective agreement does not so provide, a very comprehensive arbitration clause is, by s. 55(2), deemed to be a provision of the agreement. The collective agreement between the appellant and respondent in this case did provide for arbitration. Clause 8 provided a procedure to be followed in the "Adjustment of Complaints" which culminated in the appointment of a three member arbitration board whose decision would be "final and binding upon both parties to the Agreement". The clause further provided,

It is understood that the function of the Arbitration Board shall be to interpret and apply the provisions of this Agreement....

To the extent that the clause may not require that all differences between the parties concerning the matters mentioned in s. 55(1) of the Act would be subject to binding settlement through arbitration, the provisions of the statute in s. 55(2) would in any case require all such differences to be settled by arbitration without stoppage of work.

Decisions of the Courts Below

5. The preliminary question raised by the trial judge prior to trial, put simply, is whether, given the comprehensive provision for the submission to arbitration of all differences between the parties to a collective agreement, the court has any jurisdiction to hear a claim arising out of that agreement. This question was answered in the negative at trial, and the trial judge's conclusion was affirmed on appeal, per La Forest J.A., then a member of the New Brunswick Court of Appeal.

6. La Forest J.A. considered several alternative bases for the appellant's action. He concluded that in so far as the damage claim was based on a breach of the collective agreement, no action in the courts for damages at common law was available. Secondly, he considered the availability of a cause of action based on the provisions of the Industrial Relations Act. It was decided that the courts are given no jurisdiction by this Act to deal with the settlement of differences arising under collective agreements. Furthermore, no action lay for the breach of s. 91(1) of the Act. The legislation provided adequate sanctions, both civil (through arbitration) and penal (see s. 109(4)) for breach of statutory duties. In the circumstances, there was no room to assume that the legislature intended the parties to a collective agreement to have in addition recourse to the civil courts. Finally, La Forest J.A. rejected the contention that damages could be sought in this case by invoking the tort of conspiracy.

Analysis

7. An early consideration of the relative jurisdictions of court and arbitration board to entertain claims for breach of a collective agreement is found in McGavin Toastmaster Ltd. v. Ainscough, 1975 CanLII 9 (SCC), [1976] 1 S.C.R. 718, where the employees claimed severance pay under their collective agreement after their employer had closed the plant during an illegal strike. Laskin C.J., writing for the majority, raised the issue of the Court's jurisdiction to hear a claim based on interpretation of a collective agreement which provided for grievance procedures and binding arbitration of such issues. He wrote at p. 721 that:

There was no contention in defence that the appropriate proceedings should have been by way of arbitration under the collective agreement, and it does not appear that any such position was taken either before the trial judge or in the British Columbia Court of Appeal. This Court refrained therefore in this case from taking any position on this question and is content to deal with the legal issue or issues as having been properly submitted to the Courts for adjudication.

The same approach was taken in the Winnipeg Teachers’ Association case, supra, per Martland J. at p. 718. The majority of the Court in that case acknowledged as well founded an employer's claim for damages arising out of the employees' "work to rule" under the collective agreement. Laskin C.J., however, writing in dissent, took the position that if the parties had raised the issue, he would have allowed the appeal solely on the basis that (pp. 706‑07):

...the machinery for determining contract disputes as prescribed by the collective agreement is not only better suited than resort to the Court, but ought to have been resorted to here for resolving what emerged as a difference about the nature or scope of the contractual obligation of the appellant's members and of the appellant itself.

Article 11 of the agreement establishes both adjustment and arbitration machinery to resolve differences as to the interpretation or application of the provisions of the agreement. Arbitration...is the resort specified when there is "any difference between the parties to, or persons bound by the agreement or on whose behalf it was entered into, concerning its content, meaning application or violation". In fine, what the parties brought before the Court in this case was a matter which should have been submitted in the first place to adjustment and, if not adjusted, to arbitration under art. 11. Their consent or choice to go to the Courts cannot of itself command the Courts' intercession by way of original adjudication.

8. The later case of General Motors of Canada Ltd. v. Brunet, 1976 CanLII 196 (SCC), [1977] 2 S.C.R. 537, involved an employee's claim that, under a collective agreement between his union and his employer, he was entitled to have been offered a less strenuous job after an accident. The union had decided not to take his grievance to arbitration. This Court held it had no jurisdiction to entertain the plaintiff's claim. Pigeon J. wrote at p. 542:

To admit of a right to go to the Superior Court instead of having recourse to arbitration whenever a sum of money is claimed under a collective agreement would make totally ineffective the provision of s. 88 of the [Quebec] Labour Code, which reads as follows...:

88. Every grievance shall be submitted to arbitration in the manner provided in the collective agreement if it so provides....

89. The Quebec statute considered in Brunet enabled the employer and the bargaining agent to establish rights for the benefit of employees which could only be realized by the procedure specified in the collective agreement. It is apparent from other passages in the judgment that the foundation for Pigeon J.'s decision was the idea that the rights asserted by the employee could not, under terms of the collective agreement in which they originated, have been asserted by him in a court in any case. Carriage of grievances was conferred by the collective agreement exclusively on the union (see pp. 548‑49). Similarly, s. 56(2) of the New Brunswick statute provides that a collective agreement is binding upon the parties thereto and the employees in the bargaining unit, but does not provide an affirmative right of status to grieve to the bound employees. Brunet is not, therefore, a case on all fours with the present appeal, where a party otherwise having standing to assert a right is said to have chosen an inappropriate forum in which to assert it.

90. There are a significant number of decisions doubting the jurisdiction of the courts to hear claims based on the interpretation or application of collective agreements containing provision for binding arbitration. The earlier cases seemed to establish two exceptions to this principle. First, the courts have been held in a number of cases to have jurisdiction in a case where, although the claim depends entirely upon a right created by the terms of a collective agreement, the court is not required, in enforcing the right, to interpret the agreement. An example is Hamilton Street Railway Co. v. Northcott, 1966 CanLII 14 (SCC), [1967] S.C.R. 3, in which a prior arbitration had established the right of a group of employees to unpaid wages, but had not settled the amounts owing to each member of the group. The latter issue was held to be within the Court's jurisdiction.

91. The second exception consists of cases where the claim can be characterized as arising solely under the common law, and not under the collective agreement. An example is Woods v. Miramichi Hospital (1966), 1966 CanLII 483 (NB CA), 59 D.L.R. (2d) 290 (N.B.C.A.), a case involving a claim by an employee, a member of a bargaining unit, for damages for wrongful dismissal: see also Logan v. Board of School Trustees District No. 14 (1973), 1973 CanLII 1209 (NB CA), 40 D.L.R. (3d) 152 (N.B.C.A.) In Foisy v. Bell Canada (1984), 1984 CanLII 5085 (QC CS), 18 D.L.R. (4th) 222, [1984] C.S. 1164, the court denied its jurisdiction to hear the plaintiff's claim in so far as it depended on contractual rights addressed by the collective agreement, but confirmed its jurisdiction to deal with her claims sounding in delict.

92. In cases where the claim concerned an entitlement originating in the collective agreement, and the proper interpretation of the agreement was disputed, the courts uniformly have denied that they have jurisdiction: see Shank v. The KVP Co., 1966 CanLII 131 (ON SC), [1966] 2 O.R. 847 (H.C.), Close v. Globe & Mail Ltd. (1966), 1966 CanLII 135 (ON CA), 60 D.L.R. (2d) 105 (Ont. C.A.), Acadia Pulp and Paper Ltd. v. International Brotherhood of Pulp, Sulphite and Paper Mill Workers (1970), 1970 CanLII 961 (NB SC), 15 D.L.R. (3d) 227 (N.B.Q.B.), Ford v. Trustees of the Ottawa Civic Hospital, 1973 CanLII 822 (ON SC), [1973] 3 O.R. 437 (H.C.), Binder v. Halifax County Municipal School Board (1978), 1978 CanLII 2125 (NS CA), 84 D.L.R. (3d) 494 (N.S.C.A.), Bergeron v. Kingsway Transports Ltd. (1979), 1979 CanLII 1734 (ON SC), 23 O.R. (2d) 332 (Div. Ct.)

93. Recent cases, of which Campbell v. East‑West Packers (1969) Ltd. (1982), 1982 CanLII 2880 (MB CA), 142 D.L.R. (3d) 90 (Man. C.A.), is an example, have tended to view restrictively the availability of recourse to the courts despite the fact that the claim could conceivably be characterized as depending on common law principles, as opposed to arising solely under the collective agreement. In that case, the majority of the court, per Hall J.A., dismissed an employee's claim to damages for wrongful dismissal where the collective agreement expressly addressed, as most such agreements do, the question of dismissal. Hall J.A. noted at p. 97 that the employee was seeking at common law a broader remedy than would have been available to him through the grievance procedure, and wrote (at p. 95) that:

A plain reading of this legislation reveals a clear legislative intention that all collective agreements shall contain a provision for final settlement of all disputes or differences between the parties, including employees, concerning its meaning, application or violation. The collective agreement in question does contain such a provision and it expressly provides that dismissal of an employee is confined to the process of grievance and, if necessary, arbitration. Nothing in that agreement preserves or confers the remedy of litigation.

Similarly, in Lawn v. Algonquin College of Applied Arts and Technology (1982), 1982 CanLII 2145 (ON SC), 39 O.R. (2d) 377 (H.C.), the court denied its jurisdiction to hear the plaintiff's claim for damages for wrongful dismissal: see also Hooper v. Wellington County Board of Education (1984), 1984 CanLII 2039 (ON SC), 46 O.R. (2d) 680 (Div. Ct.), Bourne v. Otis Elevator Co. (1984), 45 O.R. (2d) 321 (H.C.), Caines v. Cape Breton Development Corp. (1973), 1973 CanLII 1243 (NS SC), 39 D.L.R. (3d) 606 (N.S.S.C.), Downey v. Scotia Square Hotel Ltd. (1974), 1974 CanLII 1312 (NS SC), 55 D.L.R. (3d) 300 (N.S.S.C.) The court in Lawn, supra, relied on Laskin C.J.'s statements in McGavin Toastmaster, supra, about the nature of the relationship between individual contracts of employment and collective agreements. In the latter case, one of the arguments made by the defendant employer was that the common law doctrine of fundamental breach applied in the circumstances, so that the employees, by their illegal strike, had forfeited any right to the benefits required to be provided by the employer. This argument was soundly rejected. Laskin C.J. wrote (at pp. 724‑27):

I do not think that in the face of labour relations legislation such as existed at the material time in British Columbia, in the face of the certification of the union, of which the plaintiffs were members, as bargaining agent of a specified unit of employees of the company and in the face of the collective agreement in force between the union and the appellant company, it is possible to speak of individual contracts of employment and to treat the collective agreement as a mere appendage of individual relationships. The majority of this Court, speaking through Judson J. in Syndicat catholique des employés de magasins de Québec Inc. v. Compagnie Paquet Ltée [1959 CanLII 51 (SCC), [1959] S.C.R. 206], at p. 212, said this in a situation where a union was certified for collective bargaining under Quebec labour relations legislation:

There is no room left for private negotiation between employer and employee. Certainly to the extent of the matters covered by the collective agreement, freedom of contract between master and individual servant is abrogated. The collective agreement tells the employer on what terms he must in the future conduct his master and servant relations.

The reality is, and has been for many years now throughout Canada, that individual relationships as between employer and employee have meaning only at the hiring stage and even then there are qualifications which arise by reason of union security clauses in collective agreements. The common law as it applies to individual employment contracts is no longer relevant to employer‑employee relations governed by a collective agreement which, as the one involved here, deals with discharge, termination of employment, severance pay and a host of other matters that have been negotiated between union and company as the principal parties thereto. To quote again from the reasons of Judson J. in the Paquet case, at p. 214:

If the relation between employee and union were that of mandator and mandatary, the result would be that a collective agreement would be the equivalent of a bundle of individual contracts between employer and employee negotiated by the union as agent for the employees. This seems to me to be a complete misapprehension of the nature of the juridical relation involved in the collective agreement. The union contracts not as agent or mandatary but as an independent contracting party and the contract it makes with the employer binds the employer to regulate his master and servant relations according to the agreed terms.

In my view, therefore, questions such as repudiation and fundamental breach must be addressed to the collective agreement if they are to have any subject‑matter at all. When so addressed, I find them inapplicable in the face of the legislation which, in British Columbia and elsewhere in Canada, governs labour‑management relations, provides for certification of unions, for compulsory collective bargaining, for the negotiation, duration and renewal of collective agreements.... Neither this Act nor the companion Labour Relations Act could operate according to their terms if common law concepts like repudiation and fundamental breach could be in‑ voked in relation to collective agreements which have not expired and where the duty to bargain collectively subsists.

14. If there were nothing more than the collective agreement between bargaining agent and employer, the courts might still have applied the common law to its enforcement at the suit of the bargaining agent or the employer. The collective agreement embodies a holding out, a reliance, a consent and undertaking to perform, mutual consideration passing between the parties, and other elements of contract which would expose the parties to enforcement in the traditional courts. There would be, of course, a basic difficulty as to the status of the absent third party, the employee, and perhaps the absence of an identifiable benefit in the bargaining agent. All this is overcome by the statute, and the question whether worthwhile enforcement could be realized at common law is, therefore, of theoretical interest only. The missing elements are the status of the members of the bargaining unit and the appropriate forum. The legislature created the status of the parties in a process founded upon a solution to labour relations in a wholly new and statutory framework at the centre of which stands a new forum, the contract arbitration tribunal. Furthermore, the structure embodies a new form of triangular contract with but two signatories, a statutory solution to the disability of the common law in the field of third party rights. These are but some of the components in the all‑embracing legislative program for the establishment and furtherance of labour relations in the interest of the community at large as well as in the interests of the parties to those labour relations.

15. The above‑quoted passages illuminate the profound impediments to reaching the conclusion that rights which at common law would flow from a master‑servant relationship would survive under a collective bargaining regime and continue to qualify for enforcement in the traditional courts. The problem raised by attempts to escape the contract tribunal so as to seek enforcement in the courts of rights arising under a collective agreement negotiated within the framework of a collective bargaining regime, solely on the grounds that the agreement does not explicitly address the jurisdictional question, is an equally profound difficulty.

16. The collective agreement establishes the broad parameters of the relationship between the employer and his employees. This relationship is properly regulated through arbitration and it would, in general, subvert both the relationship and the statutory scheme under which it arises to hold that matters addressed and governed by the collective agreement may nevertheless be the subject of actions in the courts at common law. These considerations necessarily lead one to wonder whether the Miramichi case, supra, and cases like it, would survive an objection to the court's jurisdiction if decided today. The more modern approach is to consider that labour relations legislation provides a code governing all aspects of labour relations, and that it would offend the legislative scheme to permit the parties to a collective agreement, or the employees on whose behalf it was negotiated, to have recourse to the ordinary courts which are in the circumstances a duplicative forum to which the legislature has not assigned these tasks.

17. In some cases, additional statutory provisions have also been considered. Thus, in Ontario the Rights of Labour Act, R.S.O. 1980, c. 456, s. 3(3) provides:

18. ...

(3) A collective bargaining agreement shall not be the subject of any action in any court unless it may be the subject of such action irrespective of any of the provisions of this Act or of the Labour Relations Act.

However, this section has not been the decisive factor in the great majority of the cases (for an exception, see Drogt v. Robson‑Lang Leathers Ltd., 1971 CanLII 728 (ON SC), [1971] 3 O.R. 488 (Co. Ct.)) Section 125(3) of the Canada Labour Code, R.S.C. 1970, c. L‑1, provides:

125. ...

(3) Every party to and every person bound by the agreement, and every person on whose behalf the agreement was entered into, shall comply with the provision for final settlement contained in the agreement and give effect thereto.

This section was important in Caines v. Cape Breton Development Corp., supra. The predecessor of the New Brunswick Industrial Relations Act in issue in this appeal contained an identical section: Labour Relations Act, R.S.N.B. 1952, c. 124, s. 18(3). The present Act does not repeat the wording, but s. 55 taken in context is to the same effect, in that it requires provision for binding arbitration or some other means of settlement of disputes, and the Act requires obedience to the terms of the collective agreement. (See Acadia Pulp and Paper, supra, where the court considered s. 18(3) but based its decision on the fact that the whole section, which was otherwise virtually identical to s. 55 of the present Industrial Relations Act, clearly required recourse to arbitration.)

18. The appellant has relied on the case of Perini Pacific Ltd. v. International Union of Operating Engineers, Local 115 (1961), 1961 CanLII 323 (BC SC), 28 D.L.R. (2d) 727 (B.C.S.C.), where the court awarded damages against a union for participating in an illegal strike in the face of the British Columbia Trade‑unions Act, R.S.B.C. 1960, c. 384, s. 4, which expressly provided that a trade union which "does, authorizes, or concurs in anything prohibited by the Labour Relations Act" would be "liable in damages to anyone injured thereby". In view of this provision, it was not open to the court to find in the Labour Relations Act provision for binding arbitration, a clear legislative intent to oust its jurisdiction to deal with such a claim.

19. From the above survey of the cases, a general consensus is evident. The courts have no jurisdiction to consider claims arising out of rights created by a collective agreement. Nor can the courts properly decide questions which might have arisen under the common law of master and servant in the absence of a collective bargaining regime if the collective agreement by which the parties to the action are bound makes provision for the matters in issue, whether or not it explicitly provides a procedure and forum for enforcement. There is, therefore, little practical scope left to the second general exception identified above. As to the first exception, that is, that the court may enforce the terms of a collective agreement where its meaning is not disputed, this Court decided in Brunet, supra, and Shell Canada Ltd. v. United Oil Workers of Canada, supra, that there is no difference in principle between a dispute over the "application" of a collective agreement and one relating to its "violation". The jurisdiction of the courts ought not, therefore, to depend on whether the parties dispute the meaning or application of the terms of a collective agreement. It is accordingly not necessarily determinative of the question of the courts' jurisdiction that in this appeal, the strike apparently amounted to a breach of a clear term of the collective agreement. There is also an apparent breach of the statute, a consideration to be examined later in these reasons.

Judicial Deference to Arbitration

20. What is left is an attitude of judicial deference to the arbitration process. This deference is present whether the board in question is a ‘statutory’ or a private tribunal (on the distinction in the labour relations context, see Roberval Express Ltée v. Transport Drivers, Warehousemen and General Workers Union, Local 106, 1982 CanLII 34 (SCC), [1982] 2 S.C.R. 888, Howe Sound Co. v. International Union of Mine, Mill and Smelter Workers (Canada), Local 663, 1962 CanLII 37 (SCC), [1962] S.C.R. 318, affirming (1961), 1961 CanLII 311 (BC CA), 29 D.L.R. (2d) 76, Re International Nickel Co. of Canada and Rivando, 1956 CanLII 122 (ON CA), [1956] O.R. 379 (C.A.)) It is based on the idea that if the courts are available to the parties as an alternative forum, violence is done to a comprehensive statutory scheme designed to govern all aspects of the relationship of the parties in a labour relations setting. Arbitration, when adopted by the parties as was done here in the collective agreement, is an integral part of that scheme, and is clearly the forum preferred by the legislature for resolution of disputes arising under collective agreements. From the foregoing authorities, it might be said, therefore, that the law has so evolved that it is appropriate to hold that the grievance and arbitration procedures provided for by the Act and embodied by legislative prescription in the terms of a collective agreement provide the exclusive recourse open to parties to the collective agreement for its enforcement.

The Jurisdiction to Issue Injunctions

21. This, however, appears to conflict with the long‑settled jurisdiction of the courts to issue injunctions restraining illegal strike activity during the currency of a collective agreement: International Brotherhood of Electrical Engineers, Local Union 2085 v. Winnipeg Builders’ Exchange, supra, International Longshoremen’s Association, Locals 273, 1039, 1764 v. Maritime Employers’ Association, 1978 CanLII 158 (SCC), [1979] 1 S.C.R. 120. It can be surmised that many, if not all, of the cases in which injunctions have issued, started life as claims for an injunction together with other relief, including damages to compensate an employer for losses suffered during an illegal strike (for example, British Columbia Maritime Employers Assn. v. International Longshoremen’s and Warehousemen’s Union‑‑Canadian Area, 1972 CanLII 1501 (BC SC), [1972] 5 W.W.R. 738 (B.C.S.C.), Saint John Shipbuilding and Dry Dock Co. v. Industrial Union of Marine and Shipbuilding Workers, Local 3 (1979), 1979 CanLII 3217 (NB SC), 26 N.B.R. (2d) 179 (S.C.), and see New Brunswick Electric Power Commission v. International Brotherhood of Electrical Workers, Local 1733 (1978), 1978 CanLII 2741 (NB SC), 22 N.B.R. (2d) 364 (S.C.), where general and punitive damages were awarded to an employer after the defendant union had engaged in an illegal strike). The history of labour law in our country since World War II reflects a rather straightforward pattern whereby the parties would take recourse to the superior courts by an action for injunction, declaration and damages in which an interlocutory or interim injunction was sought with a view to driving the other party back to the labour relations process prescribed by statute. Rarely would the action proceed beyond the interlocutory injunction stage.

22. An injunction is as much an action to enforce the no‑strike clause in a collective agreement as is an action for damages. If the former is available, so in principle should be the latter. Thus, if it is confirmed that the courts have no business interpreting, applying or enforcing collective agreements in any way, the jurisdiction to enjoin strikes illegal by virtue of their occurrence during the term of a collective agreement, unquestioned since Winnipeg Builders’ Exchange, supra, is called into doubt. This would have the unfortunate result of putting an employer whose assent to a collective agreement indicates his willingness to bargain in good faith with the union and to fulfill the expectations of the collective bargaining regime, in a more restricted position than an uncooperative employer who may never have signed an agreement, and who is not therefore subject to binding arbitration. This prejudice may be more apparent than real, however, as in fact it entails only a shift of forum and procedure, but not necessarily a real deprivation of ultimate remedy.

23. The statutory context may be viewed as ambiguous on this issue. Though setting out a scheme in which arbitration plays a central role, the legislation does not enact any privative clause explicitly ousting the jurisdiction of the courts to deal with breaches of collective agreements which clearly, under the legislation, regulate the legal rights of the parties and are binding and enforceable in the proper forum. This is in contrast to the practice in all provincial and federal labour relations statutes of expressly excluding the courts from any power of review by any procedure of the determinations by the statutory labour relations board. The absence of such legislative action in the case of the boards of arbitration established by contract, even in the provinces where such boards have been held to be statutory and not private, is perhaps revealing of the presence of a legislative intent to continue some role for the traditional courts in the labour relations pattern. What the statute does is to establish a preference for arbitration of a particular sort over other means of dispute settlement, by establishing a procedure to be followed where the parties do not expressly provide for any other method of resolving their differences. Where the parties so choose, however, the New Brunswick Act, in common with most of the other Canadian labour relations statutes, does not actually require the parties to resort to arbitration (the Ontario Labour Relations Act, R.S.O. 1980, c. 228, is an exception in this respect; see Rivando, supra). It requires a provision in the collective agreement for "final and binding settlement by arbitration or otherwise, without stoppage of work". The emphasized words indicate that, if they so choose, the parties may validly provide for a variety of other sorts of settlement mechanisms, including recourse to the courts (see Acadia Pulp and Paper, supra). Thus, even where the parties, as here, have chosen arbitration, it may be argued that s. 55(1) of the New Brunswick Act is insufficient to oust the inherent jurisdiction of the superior courts. This is not a case like Barraclough v. Brown, [1897] A.C. 615 (H.L.), where the statute "appoints a specific tribunal or other body" for the enforcement of rights or duties created by the statute, such that "recourse must be had to that body alone": see De Smith’s Judicial Review of Administrative Action (4th ed., 1980), at pp. 358‑60.

24. There is the further consideration that the Act appears to recognize concurrent jurisdiction to deal with aspects of illegal strikes in the statutory board, the courts, and arbitrators acting under the provisions of collective agreements. Section 102(3) provides:

102(3) A declaration made under this section does not affect any proceeding in any court or any proceeding under the provision of a collective agreement, where the question of a lawful or unlawful strike...is in issue.

25. This may be seen to accord with the reason for enactment of the arbitration provisions. As suggested by Lord Russell in Young v. Canadian Northern Ry. Co., 1930 CanLII 465 (UK JCPC), [1931] A.C. 83, the appropriate course of action for workers who had a grievance under a collective agreement at common law was to engage in concerted action, usually a strike, in order to force the employer's compliance. Labour legislation was enacted largely to regulate industrial relations with an eye to preserving industrial peace: per Cartwright J., as he then was, in Winnipeg Builders’ Exchange, supra, at p. 640. A cornerstone in this legislative edifice was to make strike action or lock‑out illegal during the currency of a collective agreement. In exchange for restricting the right to strike and lock‑out, the legislation made collective agreements binding and enforceable. In the United States, the no‑strike clause and the arbitration clause have been viewed as the quid pro quo for each other: Textile Workers v. Lincoln Mills of Alabama, 353 U.S. 448 (1957), at p. 455, and Steelworkers v. American Mfg. Co., 363 U.S. 564 (1960), at p. 567.

26. This, in the Canadian context, may be taken as indicated by the fact that grievances are directed to be settled by arbitration "without stoppage of work". It would, accordingly, be illogical to permit a union to plead in defence to court proceedings brought to restrain an illegal strike that the employer should have resorted to arbitration, when the conduct in issue is the very conduct which the provision for arbitration and the statutory prohibition were designed to prevent. Thus, in Transport Labour Relations v. General Truck Drivers & Helpers Union, Local No. 31 (1974), 1974 CanLII 1251 (BC SC), 54 D.L.R. (3d) 457 (B.C.S.C.), involving an illegal work slowdown during the currency of a collective agreement, Meredith J. at pp. 459‑60 denied that the employer was required to resort to arbitration. He said, "The union has adopted the very course that it was the whole purpose of the agreement to prevent and is in flagrant violation of its commitment to preserve peace while the agreement is in effect."

27. The avoidance of the disruptive effect of cessation of production of goods and services except in well defined circumstances is one of the basic design features of labour relations legislation. Another feature of labour legislation is the provision for rapid restoration of normal bargaining relations. Long or repeated abstentions of the parties from participation in the remedial processes of collective bargaining and grievance processing defeats the program. Slow and expensive processes of dispute resolution likewise render the statutory scheme less beneficial and perhaps unavailable to the community. The labour arbitration board came into being because of this reality.

28. In a limited role, the ready access by the parties to the court system provided by the community for the disposition of differences however arising in the community, can itself be another bulwark against the deterioration of employer‑employee understanding. The interlocutory injunction by summary process but of limited life, for example as governed by the Judicature Act of Ontario, now the Courts of Justice Act, 1984, 1984 (Ont.), c. 11, s. 115, finds its origin in this reality. It is, of course, open to the legislature to close this access, as it has done in the case of the privative clauses relating to the labour relations boards themselves. Where the legislature resolves to narrow the forum and the remedies otherwise available to the parties, the interpretive rules applied by the courts should require the legislature to express its intent clearly. Where the legislature does not do so, the duty remains in the court to respond to a proper request to enjoin an activity such as a strike or lock‑out which offends the statute and the collective agreement, in short the entire system of labour relations as established by the legislature.

29. When a court issues an injunction to restrain illegal strike activity, the courts have based such relief in both the breach of collective agreement and the breach of statute: Winnipeg Builders’ Exchange, supra. However, it is clearly the breach of statute that is most significant. It is the statutory scheme to which the courts have deferred, not the single provision for arbitration in a collective agreement. Thus, in the court below, La Forest J.A. (as he then was), after discussing the statutory scheme, wrote:

To allow a party to a collective agreement, at its whim, to bring an action for damages for what really constitutes a difference arising out of a collective agreement would, as it appears to me, be to set up a remedy in substitution for that established by the Legislature.

He concluded with respect to the power to enjoin illegal strikes, however, that

...this power has been used with the intention of supporting the legislative scheme, not to supplant it. As Cartwright C.J.C. stated in...[Winnipeg Builders’ Exchange, supra], "the purposes of the...Act would be in large measure defeated if the Court were to say that it is powerless to restrain the continuation of a strike engaged in in [sic] direct violation of the terms of a collective agreement binding on the employees and in breach of the express provisions of the Act".

30. When viewed from this perspective, it is apparent that the cases affirming the courts' injunctive power do not purport to create a power in the courts to enforce the terms of collective agreements. Rather, they enforce the general law as embodied in the statute, which includes both an express prohibition on strikes during the currency of a collective agreement and provision for binding and enforceable arbitration which, in many cases, would resolve the dispute underlying illegal strike activity. An injunction restraining a strike also upholds incidentally the rights of an employer under a collective agreement, and specifically enforces the individual obligations of the employees on whose behalf the collective agreement was negotiated pursuant to the Industrial Relations Act of New Brunswick, supra. Such incidental effects, as the Winnipeg Builders’ Exchange case, supra, demonstrates, are not sufficient reason to deny an injunction to prevent immediate harm arising out of a clearly illegal act, where no adequate alternative remedy exists.

Damages and Statutory Cause of Action

31. In this case, an interlocutory injunction was sought in and granted by the New Brunswick courts. No objection was then taken to the court's jurisdiction. Breach of this injunction was later the subject of contempt proceedings against the respondent union and several of its officers. In imposing a $15,000 fine in the first of these proceedings, the Chambers Judge observed at (1981), 1981 CanLII 3648 (NB QB), 35 N.B.R. (2d) 211, at p. 215, that "The fine cannot of course be waived by the employer; it is not in the nature of damages; it is a fine imposed by the court." It is, indeed, clear that the New Brunswick Judicature Act, R.S.N.B. 1973, c. J‑2, which carries forward the equitable jurisdiction established in England by Lord Cairns' Act (Chancery Amendment Act, 21 & 22 Vict., c. 27) to award damages in substitution for or in addition to an injunction, cannot provide the basis for the relief sought in this appeal. Damages in these circumstances are not "in substitution for" the abortive injunction, because the injunction was in fact issued. The failure of the injunction to operate has been corrected by the contempt orders, which are the proper means for the enforcement of an injunction. Civil damages are not part of the weaponry of the court in ensuring compliance with its injunctions.

32. Nor can s. 91 of the Industrial Relations Act reasonably be considered to establish a cause of action for damages in civil law. It is simply one of a series of restrictive provisions which have been erected by the legislature as part of a complex structure within which labour relations in the province shall be conducted. It is hostile to the purpose and philosophy of such legislation to burden it with collateral actions in the courts for damages against persons who become party to these relations. Damages, where they are the appropriate compensation for action in breach of both the legislation and the collective agreement, are properly available in an arbitration based directly on the terms of the collective agreement, not in an action in the courts based on the terms of the statute.

33. On the other hand, where the conduct of one party or the other to the collective agreement goes beyond the agreement and offends the independent statutory edict prohibiting strikes during the terms of a collective agreement, the entire application of the labour relations process as laid down by the legislature is brought into question. The wrong is, fortuitously, a mixture of breach of statute and breach of contract. There is no clear directive from the legislature that the courts may not entertain a plea for injunctive relief where the entire statutory system of labour relations is brought into the confrontation, for example in cases where employees strike during the currency of a collective agreement. While cessation of work, either collective or individual, may be the subject of grievance procedures and arbitration and may lead to an arbitration award requiring the party in breach to cease the conduct in question, there is nothing in the statute to indicate exclusivity in this role. Indeed, the statute, by not limiting the edict in s. 91 by any procedural stipulation, and by not explicitly stating that the monetary penalty for breach of a statutory term in s. 111(1) is the only remedy available for breach of s. 91, has left the public interest, in the avoidance of wild‑cat strikes and illegal lock‑outs, to be served by the courts where the conduct complained of warrants community involvement through the courts. Similarly, s. 102(3), supra, clearly contemplates a continuing jurisdiction in the courts, notwithstanding a declaration by the Labour Relations Board that a strike is unlawful, to deal with such an issue where it arises in proceedings before a court. The comments of the learned author of Canadian Labour Law (1985), George W. Adams, Q.C., are appropriate (p. 703):

Injunctions granted by the courts may be used to restrain breaches of a collective agreement unless there is legislation preventing access to the courts for actions on a collective agreement. Therefore, in the absence of such restrictive legislation, injunctions have been issued where the courts have been satisfied such action is necessary, most commonly in the cases of unlawful strikes.

The learned author goes on to say that the courts will decline intervention where "equally effective" remedies are available elsewhere. The lack of such remedies in the reality of an expensive stoppage of production is indeed the prime reason for the continued availability in the law of the judicial remedy of injunction, at least in the case of illegal strikes.

Conclusion and Disposition

34. I therefore conclude that the courts do have a limited residual presence in the labour relations scheme as it has evolved in the legislative program where the conduct amounts to illegal strike or lock‑out, and that the general jurisdiction to issue injunctions under the Judicature Act is unimpaired in this context. The court below does not appear, as is evident from the passage cited supra, to have taken the position that an otherwise competent court may not intervene by injunction alone, but rather centred its attention upon the primacy of the arbitration board in resolving disputes through the grievance process. Of course, if arbitration is pursued, the remedies may be damages or reinstatement, or other remedial procedures known to labour law.

35. The facts of this case are very similar to those in the Maritime Employers case, supra. There, the picket line was put up by another union which was on strike against a different employer, but the work situs was common to the striking union and the union and employer involved in the Maritime Employers proceedings. Here the union which put up the lawful picket line is a different local of the same union representing the mill workers who refused to cross it, and the employer and situs of employment is common to both units. In the result, therefore, we have in each case a lawful picket line surrounding a common site of employment and a wrongful refusal to cross the lawful picket line.

36. In both cases the offended employer took action in the courts for an injunction. Here the employer has asked for damages as well. No doubt this was true in the Maritime Employers case, supra, but the record does not reveal the extent of the initial claim. Here the trial judge, on his own motion, rejected the action as it pertained to damages. In Maritime Employers presumably the parties did not press their claim and the court, considering the matter closed upon the issuance of the interlocutory injunction, did not address the question of damages. It should be noted, however, that the issuance of the injunction was challenged in that proceeding at each level of appeal on several grounds, but not because of any lack of jurisdiction in the court to issue the injunction.

37. Therefore, I conclude that the courts below were correct in law in recognizing that the claim for damages must be advanced in the contractual forum of an arbitration board. This is so where legislation requires the parties to establish a mechanism for dispute resolution, and whether the arbitration board so established is `statutory' or is private in nature. This appeal does not require comment upon the question of the range or remedies the board may apply in disposing of differences arising under the collective agreement, as we are here concerned only with a claim for damages. On the other hand, it should be said for clarity and completeness, because the issue of the availability of a court injunction and other judicial remedies was ever present in the arguments presented by the parties to this Court, that the initial process in injunction undertaken by the court in these proceedings was within the jurisdiction of the court, and that this jurisdiction has not been reduced by the labour relations statute or indeed by the presence of the collective agreement and its provision for arbitration.

38. I therefore would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitors for the appellant: Petrie & Richmond, Fredericton.

Solicitors for the respondent: Neill, Breen & Miller, Fredericton.