Brotherhood of Maintenance of Way Employees Canadian Pacific System Federation v. Canadian Pacific Ltd., [1996] 2 S.C.R. 495

Canadian Pacific Limited Appellant

v.

Brotherhood of Maintenance of Way Employees

Canadian Pacific System Federation Respondent

Indexed as: Brotherhood of Maintenance of Way Employees Canadian Pacific System Federation v. Canadian Pacific Ltd.

File No.: 24317.

Hearing and judgment: April 22, 1996.

Reasons delivered: July 4, 1996.

Present: Lamer C.J. and La Forest, L’Heureux‑Dubé, Sopinka, Gonthier, Cory, McLachlin, Iacobucci and Major JJ.

on appeal from the court of appeal for british columbia

Courts ‑‑ Jurisdiction ‑‑ Injunction ‑‑ Labour dispute between federally regulated employer and employees concerning new work schedule ‑‑ Union seeking injunction in British Columbia Supreme Court to postpone implementation of new work schedule until dispute settled by arbitrator‑‑ Whether British Columbia Supreme Court had jurisdiction to issue interim injunction -- Law and Equity Act, R.S.B.C. 1979, c. 224, s. 36.

Labour law ‑‑ Injunction ‑‑ Labour dispute between federally regulated employer and employees concerning new work schedule ‑‑ Union seeking injunction in British Columbia Supreme Court to postpone implementation of new work schedule until dispute settled by arbitrator‑‑ Whether British Columbia Supreme Court had jurisdiction to issue interim injunction -- Law and Equity Act, R.S.B.C. 1979, c. 224, s. 36.

In 1993, CP changed the work schedule of a number of its employees in such a way that they would lose their Sunday rest days. The respondent union filed a grievance under the collective agreement, and pending the hearing before an arbitrator, was granted an interim injunction by the B.C. Supreme Court restraining CP from implementing the work schedule until the matter was settled by an arbitrator. The arbitrator later allowed the grievance in part. Despite the conclusion of the arbitration, CP appealed to the Court of Appeal, challenging the jurisdiction of the B.C. Supreme Court to issue an interlocutory injunction. The Court of Appeal dismissed the appeal on the ground that the Canada Labour Code provided no forum for interlocutory injunctions, leaving no remedy for the loss of Sunday rest days except by interlocutory injunction of the court.

Held: The appeal should be dismissed.

Notwithstanding the existence of a comprehensive code for settling labour disputes, where no adequate alternative remedy exists under that code, the courts retain a residual discretionary power to grant interlocutory relief such as injunctions, a power which flows from the inherent jurisdiction of the courts over interlocutory matters. In this case, the collective agreement and the Canada Labour Code provided no means to secure the postponement of implementation of the new work schedule for the interim period pending a decision from the arbitrator. The B.C. Supreme Court, in the exercise of its inherent jurisdiction, thus had the power to grant the interim injunction against imposition of the new work schedule. Deference to labour tribunals and exclusivity of jurisdiction to an arbitrator are not inconsistent with a residual jurisdiction in the courts to grant relief unavailable under the statutory labour scheme. This principle of residual jurisdiction is not confined to restraining illegal work stoppages. Finally, the Weber test refers to the dispute put before the courts that are considering the residual relief. The dispute in this case ‑‑ the right to postpone implementation of the schedule pending resolution of the underlying dispute by the arbitrator ‑‑ did not arise from the collective agreement. The B.C. Supreme Court’s jurisdiction is thus not ousted in favour of the arbitration process set out in the collective agreement.

The absence of a cause of action claiming final relief in the B.C. Supreme Court did not deprive that court of jurisdiction to grant an interim injunction.

Cases Cited

Applied: St. Anne Nackawic Pulp & Paper Co. v. Canadian Paper Workers Union, Local 219, 1986 CanLII 71 (SCC), [1986] 1 S.C.R. 704; Weber v. Ontario Hydro, 1995 CanLII 108 (SCC), [1995] 2 S.C.R. 929; New Brunswick v. O'Leary, 1995 CanLII 109 (SCC), [1995] 2 S.C.R. 967; not followed: Lamont v. Air Canada (1981), 1981 CanLII 2884 (ON SC), 126 D.L.R. (3d) 266; distinguished: Burkart v. Dairy Producers Co‑operative Ltd. (1990), 1990 CanLII 7774 (SK CA), 74 D.L.R. (4th) 694; Iron Ore Co. of Canada v. United Steelworkers of America, Local 5795 (1984), 1984 CanLII 2937 (NL CA), 5 D.L.R. (4th) 24; referred to: Kelso v. The Queen, 1981 CanLII 171 (SCC), [1981] 1 S.C.R. 199; Siskina (Cargo Owners) v. Distos Compania Naviera S.A., [1979] A.C. 210; Channel Tunnel Group Ltd. v. Balfour Beatty Construction Ltd., [1993] 2 W.L.R. 262; Amherst (Town) v. Canadian Broadcasting Corp. (1994), 1994 NSCA 134, 133 N.S.R. (2d) 277; R. v. Consolidated Fastfrate Transport Inc. (1995), 1995 CanLII 1527 (ON CA), 125 D.L.R. (4th) 1; Kaiser Resources Ltd. v. Western Canada Beverage Corp. (1992), 71 B.C.L.R. (2d) 236; Canada (Human Rights Commission) v. Canadian Liberty Net, 1992 CanLII 14305 (FC), [1992] 3 F.C. 155, rev’d 1996 CanLII 4022 (FCA), [1996] 1 F.C. 804; leave to appeal to S.C.C. filed March 25, 1996; Moore v. British Columbia (1988), 1988 CanLII 184 (BC CA), 50 D.L.R. (4th) 29; Retail Store Employees' Union, Local 832 v. Canada Safeway Ltd. (1980), 1979 CanLII 2610 (MB QB), 2 Man. R. (2d) 100.

Statutes and Regulations Cited

Canada Labour Code, R.S.C., 1985, c. L‑2, s. 57(1).

Law and Equity Act, R.S.B.C. 1979, c. 224, s. 36.

APPEAL from a judgment of the British Columbia Court of Appeal (1994), 1994 CanLII 1738 (BC CA), 93 B.C.L.R. (2d) 176, 46 B.C.A.C. 243, 75 W.A.C. 243, dismissing the appellant’s appeal from a judgment of Shaw J. granting an interim injunction. Appeal dismissed.

H. C. Wendlandt and W. A. Scott Macfarlane, for the appellant.

Kate A. Hughes, for the respondent.

The judgment of the Court was delivered by

McLachlin J. --

I. Introduction

[1] This case raises the issue of whether a court may issue an injunction in a labour dispute where the Canada Labour Code, R.S.C., 1985, c. L-2, provides for settlement of disputes by a tribunal established by the Code.

II. Statement of Facts

[2] The appellant, Canadian Pacific Limited, operates an interprovincial railway. The respondent is certified under the Canada Labour Code as the bargaining agent for maintenance of way employees. It represents a number of employees who work from March to October each year. Both the appellant and the respondent are parties to a collective agreement.

[3] In May 1993 the appellant changed the work scheduling from 10 days on and four days off to five days on and two days off with Friday and Saturday as the two rest days. The respondent filed a grievance under the collective agreement. Pending the hearing of the grievance by an arbitrator, the respondent sought and was granted an injunction by the Supreme Court of British Columbia restraining the employer from changing the status quo until the matter was settled by an arbitrator. The matter was disposed of on March 10, 1994 and the arbitrator allowed the grievance in part.

[4] Despite the conclusion of the arbitration, the appellant appealed to the Court of Appeal to challenge the jurisdiction of the Supreme Court of British Columbia to issue an interlocutory injunction. The respondent took the position that the interlocutory injunction was at an end and the appeal should be dismissed as moot. The Court of Appeal refused to dismiss the appeal as moot, and heard the appeal. The Court of Appeal dismissed the appeal on the ground that the Canada Labour Code provided no forum for interlocutory injunctions, leaving no remedy for the loss of Sunday rest days except by interlocutory injunction of the court: (1994), 1994 CanLII 1738 (BC CA), 93 B.C.L.R. (2d) 176, 46 B.C.A.C. 243, 75 W.A.C. 243.

III. Legislation

Canada Labour Code, R.S.C., 1985, c. L-2

57. (1) Every collective agreement shall contain a provision for final settlement without stoppage of work, by arbitration or otherwise, of all differences between the parties to or employees bound by the collective agreement, concerning its interpretation, application, administration or alleged contravention.

Law and Equity Act, R.S.B.C. 1979, c. 224

36. A mandamus or an injunction may be granted or a receiver or receiver manager appointed by an interlocutory order of the court in all cases in which it appears to the court to be just or convenient that the order should be made, and the order may be made either unconditionally or on terms and conditions the court thinks just. . . .

IV. Points in Issue

1.Do the superior courts in British Columbia have jurisdiction to issue injunctions in connection with disputes between federally regulated employers and employees concerning the interpretation, application, administration or alleged contravention of collective agreements?

2.Can the superior courts in British Columbia issue interlocutory injunctions in circumstances where there is no cause of action to which the injunction is ancillary?

V. Analysis

A) Jurisdiction of the Superior Courts in British Columbia to Grant an Injunction

[5] The governing principle on this issue is that notwithstanding the existence of a comprehensive code for settling labour disputes, where "no adequate alternative remedy exists" the courts retain a residual discretionary power to grant interlocutory relief such as injunctions, a power which flows from the inherent jurisdiction of the courts over interlocutory matters: St. Anne Nackawic Pulp & Paper Co. v. Canadian Paper Workers Union, Local 219, 1986 CanLII 71 (SCC), [1986] 1 S.C.R. 704, at p. 727. The "residual discretionary jurisdiction in courts of inherent jurisdiction to grant relief not available under the statutory arbitration scheme" was most recently affirmed by this Court in Weber v. Ontario Hydro, 1995 CanLII 108 (SCC), [1995] 2 S.C.R. 929, at paras. 41, 54, 57 and 67, and New Brunswick v. O'Leary, 1995 CanLII 109 (SCC), [1995] 2 S.C.R. 967, at para. 3.

[6] Applying this principle to the facts in the case at bar, the first question is whether the Canada Labour Code provides an adequate remedy for the claim raised before the British Columbia Supreme Court. That claim, as stated above, was for a postponement of the employer's disputed decision to reschedule the work in such a way that the employees would lose their Sunday rest days, pending a decision on the legality of the new schedule by an arbitrator appointed under the Canada Labour Code. It is not disputed that the collective agreement and the machinery provided under the Canada Labour Code provided no means to secure the postponement of implementation of the new schedule. I can put it no better than Hutcheon J.A. in the Court of Appeal (at pp. 182-83 B.C.L.R.):

The important circumstances in the present case are that there is no forum for interlocutory injunctions available through the Canada Labour Code; the work of the track crews is seasonal and from approximately March to the end of October; the arbitration proceeding was not finished until March 1994, several months after the 1993 work season; and without a restraining order there would be no way to remedy the loss of Sunday rest days.

There was, in the words of this Court in St. Anne Nackawic, "no adequate alternative remedy". The British Columbia Supreme Court, by contrast, was empowered to grant interlocutory injunctions such as that which the union sought in the exercise of its inherent jurisdiction: Law and Equity Act, s. 36. It would appear to follow that the court had the power to grant an injunction against imposition of the new schedule for the interim period pending a decision from the arbitrator appointed under the Code.

[7] The appellant employer raises a number of arguments against this conclusion. The first is that to permit the court to grant the interim injunction sought is to undermine the collective agreement and the Canada Labour Code. The answer to this objection is found in the reasoning of this Court in Weber and O'Leary. Those cases affirm that deference to labour tribunals and exclusivity of jurisdiction to an arbitrator are not inconsistent with a residual jurisdiction in the courts to grant relief unavailable under the statutory labour scheme. There has never been any dispute in this case that the arbitrator and the arbitrator alone is entitled to resolve the dispute between the employer and the employees. The proof lies in the fact that the arbitrator in fact resolved this dispute, and that the interim order of the Supreme Court of British Columbia, directed to preserving the status quo and nothing more, in no way interfered with the resolution of the dispute under the Code.

[8] The employer further argues that the dispute resolution mechanism provided by the Code is exclusive, and bars any other remedies. The court, it says, disregarded the comprehensive contractual and statutory scheme designed to govern all aspects of the relationship of the parties in a labour dispute. The difficulty with this argument lies in the assumption that the Code covers all aspects of any labour dispute. In this case, the fact is that the Code did not cover all aspects of the dispute. No matter how comprehensive a statutory scheme for the regulation of disputes may be, the possibility always remains that events will produce a difficulty which the scheme has not foreseen. It is important in these circumstances that there be a tribunal capable of resolving the matter, if a legal, rather than extra-legal, solution is to be found. It is precisely for this reason that the common law developed the notion of courts of inherent jurisdiction. If the rule of law is not to be reduced to a patchwork, sometime thing, there must be a body to which disputants may turn where statutes and statutory schemes offer no relief.

[9] The employer argues that the principle of residual jurisdiction enunciated in St. Anne Nackawic is confined to restraining illegal work stoppages. Although some of the words used in that case emphasized the illegal nature of the work stoppage there at issue, the case more generally affirmed the jurisdiction of the courts to grant relief not available under the statutory scheme in "proper" circumstances. Weber and O'Leary confirm this. It follows that this argument cannot succeed.

[10] The employer argues that the test in Weber consists of determining if the dispute, in its essential character, has arisen from the collective agreement. Here, it submits, the dispute arose from the interpretation or application of the collective agreement, ousting the jurisdiction of the British Columbia Supreme Court under the Weber test. The problem is that the appellant takes the dispute as being the underlying dispute as to whether the collective agreement permits the rescheduling at issue. The test in Weber, however, refers to the dispute put before the courts considering the residual relief. Here that dispute -- the right to postpone implementation of the schedule pending resolution of the underlying dispute by the arbitrator -- did not arise from the collective agreement. Rather, as all courts at all levels have held, the collective agreement did not touch it.

[11] The employer's final argument on the first issue is that to permit the courts to grant an interim injunction in a case such as this is to interfere with the fundamental right of an employer to manage its enterprise. Arbitrators, it submits, have recognized as a fundamental principle of labour law that management has an "inherent" power to initiate change flowing from its responsibility to manage the enterprise. This principle is buttressed, in the employer's submission, by a second labour relations principle, "obey now, grieve later", recognized by this Court in Kelso v. The Queen, 1981 CanLII 171 (SCC), [1981] 1 S.C.R. 199. The employer argues that the British Columbia courts erred in failing to observe these principles and maintaining the status quo.

[12] These arguments go not to jurisdiction, but to whether, assuming jurisdiction, it was appropriate to grant the interim injunction. They were not raised below, as matters concerning the exercise of the trial court's discretion should be. Consequently, I do not propose to consider them in depth. It is sufficient to note that the employer presented no evidence that the interim injunction prejudiced its operations. Moreover, the employer could have returned to court to have the injunction set aside or varied in the case of "compelling necessity". It did not do so. As for the "obey now, grieve later" principle, it finds its origin and application in preventing employees from stopping production pending a third party determination of a dispute. In short, it is founded on clear prejudice to the employer. It is difficult to see how it could apply where the interim relief presents no demonstrable prejudice to the employer.

B) Need for an Underlying Cause of Action

[13] The appellant employer submits that a court has power to grant an interim injunction only as an adjunct to a cause of action properly instituted in the court. It contends that the jurisdiction to grant interim injunctions under s. 36 of the Law and Equity Act is ancillary to and dependant upon a claim for final relief to the court from which the interim relief is sought. It is not disputed that at the time the injunction was granted, there was no claim for final relief before the Supreme Court of British Columbia.

[14] The notion that a court could not entertain an application for an interim injunction unless the court had before it an action claiming final relief finds expression in Lamont v. Air Canada (1981), 1981 CanLII 2884 (ON SC), 126 D.L.R. (3d) 266 (Ont. H.C.), where Griffiths J. wrote (at p. 272):

I know of no authority, nor has counsel been able to cite one in which the Court may issue an injunction to preserve the status quo while the plaintiff pursues his remedy before a statutory body over which the Court has no control.

Other cases relied on by the employer are readily distinguishable. In Burkart v. Dairy Producers Co-operative Ltd. (1990), 1990 CanLII 7774 (SK CA), 74 D.L.R. (4th) 694, the Saskatchewan Court of Appeal acknowledged that the court did retain limited jurisdiction over labour matters. In Iron Ore Co. of Canada v. United Steelworkers of America, Local 5795 (1984), 1984 CanLII 2937 (NL CA), 5 D.L.R. (4th) 24 (Nfld. C.A.), the governing statute requires that there be a "civil cause or matter commenced in the Supreme Court", as contrasted with the more general language of the British Columbia Law and Equity Act.

[15] Put at their highest, these cases may be seen as reflections of the doubt that existed in this area following the decision of the House of Lords in Siskina (Cargo Owners) v. Distos Compania Naviera S.A., [1979] A.C. 210. The House of Lords removed that doubt in its decision in Channel Tunnel Group Ltd. v. Balfour Beatty Construction Ltd., [1993] 2 W.L.R. 262, categorically rejecting the submission that to grant interim relief, the courts must have jurisdiction over the cause of action. The concurring judgment of Lord Browne-Wilkinson held at p. 267 that:

In my judgment that submission is not well founded. I can see nothing in the language employed by Lord Diplock (or in later cases in this House commenting on the Siskina) which suggest that a court has to be satisfied, at the time it grants interlocutory relief, that the final order, if any, will be made by an English court.

. . . Even applying the test laid down by the Siskina the court has power to grant interlocutory relief based on a cause of action recognised by English law against a defendant duly served where such relief is ancillary to a final order whether to be granted by the English court or some other court or arbitral body. [Emphasis added.]

[16] Canadian courts since Channel Tunnel have applied it for the proposition that the courts have jurisdiction to grant an injunction where there is a justiciable right, wherever that right may fall to be determined: Amherst (Town) v. Canadian Broadcasting Corp. (1994), 1994 NSCA 134, 133 N.S.R. (2d) 277 (C.A.), at pp. 279 and 281; R. v. Consolidated Fastfrate Transport Inc. (1995), 1995 CanLII 1527 (ON CA), 125 D.L.R. (4th) 1 (Ont. C.A.), at pp. 26-27. See also Kaiser Resources Ltd. v. Western Canada Beverage Corp. (1992), 71 B.C.L.R. (2d) 236 (S.C.), at pp. 244-45. This accords with the more general recognition throughout Canada that the court may grant interim relief where final relief will be granted in another forum: Canada (Human Rights Commission) v. Canadian Liberty Net, 1992 CanLII 14305 (FC), [1992] 3 F.C. 155 (T.D.) (rev’d 1996 CanLII 4022 (FCA), [1996] 1 F.C. 804 (C.A.), leave to appeal to S.C.C. filed March 25, 1996*); St. Anne Nackawic, supra; Weber, supra; Moore v. British Columbia (1988), 1988 CanLII 184 (BC CA), 50 D.L.R. (4th) 29 (B.C.C.A.); Retail Store Employees' Union, Local 832 v. Canada Safeway Ltd. (1980), 1979 CanLII 2610 (MB QB), 2 Man. R. (2d) 100 (C.A.); O'Leary, supra; Kelso, supra.

[17] I conclude that the absence of a cause of action claiming final relief in the Supreme Court of British Columbia did not deprive the court of jurisdiction to grant an interim injunction.

VI. Conclusion

[18] I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitor for the appellant: Canadian Pacific Legal Services, Montreal.

Solicitors for the respondent: McGrady, Askew & Fiorillo, Vancouver.

• Applications for leave to appeal granted October 10, 1996.