Canada Safeway Ltd. v. RWDSU, Local 454, [1998] 1 S.C.R. 1079

Retail, Wholesale and Department Store

Union, Local 454 and Kelly Hardy Appellants

v.

Canada Safeway Limited Respondent

Indexed as: Canada Safeway Ltd. v. RWDSU, Local 454

File No.: 25356.

1998: January 27; 1998: June 4.

Present: L’Heureux‑Dubé, Gonthier, Cory, McLachlin, Iacobucci, Major and Bastarache JJ.

on appeal from the court of appeal for saskatchewan

Labour relations ‑‑ Constructive layoff ‑‑ Scheduled hours of work reduced ‑‑ Actual hours worked not substantially reduced owing to call‑in work ‑‑ Whether a constructive layoff occurred.

The appellant employee’s scheduled hours of work steadily declined but her actual hours of work did not change significantly because of “call‑ins”. She grieved her reduction in scheduled hours when employees junior to her in her former department were being scheduled for more hours than she was. The grievance alleged that the reduction in her scheduled hours violated the “most available hours clause” of the collective agreement which required that the assignment of part‑time hours be on the basis of seniority “within the classification and department” if the employee’s qualifications and ability met the requirements. The grievance requested scheduled hours in her former department. An arbitration board allowed the grievance and found that a constructive layoff had occurred. An application for judicial review of this decision was dismissed by the Court of Queen’s Bench but an appeal to the Court of Appeal was allowed. At issue here is whether it is patently unreasonable to conclude that an employee whose actual hours of work remain constant, but whose scheduled hours are reduced, was constructively laid off.

Held (L’Heureux-Dubé J. dissenting): The appeal should be dismissed.

Per Gonthier, Cory, McLachlin, Iacobucci, Major and Bastarache JJ.: Where labour relations tribunals are called upon to interpret or apply a collective agreement under the umbrella of a privative clause, a reviewing court can only intervene in the case of a patently unreasonable error. This very high standard is not easily met. If a Board purports to act in a manner that clearly exceeds its jurisdiction as set out in the empowering legislation, its decision is patently unreasonable. There are, as well, certain specific egregious errors which are so patently unreasonable that a Board decision should be set aside. For example, if the Board imposes a remedy that is not rationally connected to the breach or is inconsistent with the policy objective of the statute, or if the evidence adduced is incapable of supporting the findings.

The labour agreement did not define “layoff”. As used in labour relations law, “layoff” refers to the denial of work to the employee and is used to describe an interruption of the employee’s work short of termination. The employer‑employee relationship is suspended but not terminated. If the employee continues to work substantially the same number of hours, his or her grievance is not a lay‑off. Indeed, the question of whether a reduction of work short of cessation may be considered to be a “constructive layoff” did not need to be decided here because the grievor’s hours of work were not reduced.

The situation should not be analogized to the legal concept of constructive dismissal which is very different from the concept of layoff. Constructive dismissal recognizes the fact that a drastic change in conditions of employment may be tantamount to terminating the employment relationship, entitling the employee to notice or damages in lieu of notice. Layoff simply refers to the temporary cessation of employment, for which damages are not available.

The Board failed to place sufficient emphasis on the terms of the collective agreement. Its finding that the grievor had the right to be scheduled because she had been constructively laid off -- a concept not found in the collective agreement -- resulted in a remedy being given for the scheduling grievance that was not specified in the agreement. This contradiction with the collective agreement was patently unreasonable.

Per L’Heureux-Dubé J. (dissenting): The Board utilized the term “constructive lay-off” to recognize that, in some circumstances, because the employer/employee relationship is premised on mutuality and consent, an employer’s unilateral conduct resulting in a serious disruption in the employer/employee relationship can give rise to an implicit layoff. It did not imply the creation of additional rights but rather the realization of actual rights. The Board’s use of this term to describe what really occurred under the collective agreement assessed the reality of the workplace before it and gave effect to the parties’ rights and responsibilities under the collective agreement. Its findings of a constructive layoff were closely linked to its interpretation of the collective agreement.

The Board’s failure to find bona fide scheduling under the applicable provisions of the collective agreement supported its framing of the grievance in layoff terms. A mere scheduling grievance would not generally imply a layoff situation. The fact that the employer dramatically reduced the grievor’s scheduled hours and yet continued to call her in to work approximately the same number of hours as she worked prior to the reduction implicitly indicated a lack of good faith on the employer’s part. Therefore, the employer had done more than fail to post a schedule: it had effected a unilateral change to the employment relationship that caused a serious disruption and amounted, in substance, to a layoff. The grievor was consequently entitled to access her bumping rights.

The Board neither erred in its approach to the grievance at issue nor reached an unreasonable conclusion. Its findings of fact were uncontroverted and should not be interfered with, especially given its expertise in the area. The inferences and conclusions drawn were within the Board’s jurisdiction and the reasons for them were spelled out. They were not arbitrary or frivolous, and were based on the evidence. As well, they were persuasive. The inherent and autonomous rationality of the Board’s reasons should therefore be judicially recognized here. To find no layoff here, and hence to find the Board’s remedy to be patently unreasonable, amounts to substituting the Court’s opinion for that of the Board. Even had the Board erred, that error would not be patently unreasonable.

The Board reasonably utilized the concept of “constructive” layoff in order to address the reality of the situation which it faced. This was not an attempt to change the commonly understood and generally accepted meaning of layoff or to convert a scheduling complaint into a matter of layoff. The Board was exercising its expertise in assessing the reality of the situation in light of the terms of the applicable collective agreement. Its finding that the employer’s unilateral conduct caused a serious and impermissible disruption to the employment relationship was what was pertinent, and that finding entitled the grievor to access her bumping rights. This finding was based on more than a mere infringement of scheduling provisions. To construe the matter narrowly as no more than scheduling fails to take account of this finding.

The legal principle in Royal Oak Mines Inc. -- that a board exceeds its jurisdiction if it imposes a remedy not rationally connected to the breach and its decision will therefore be patently unreasonable -- is inapplicable here. An assessment of what is rationally connected must follow from the Board’s definition of the breach and not the Court’s opinion as to how the Board should have construed it. Given the reasonableness of the Board’s findings, the remedy it granted was quite logical and provided for by the collective agreement. Consequently, the rationality of the remedy did not provide a basis for reviewing the Board’s decision.

Cases Cited

By Cory and McLachlin JJ.

Considered: Toronto (City) Board of Education v. O.S.S.T.F., District 15, 1997 CanLII 378 (SCC), [1997] 1 S.C.R. 487; United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., 1993 CanLII 88 (SCC), [1993] 2 S.C.R. 316; Royal Oak Mines Inc. v. Canada (Labour Relations Board), 1996 CanLII 220 (SCC), [1996] 1 S.C.R. 369; referred to: Canada (Attorney General) v. Public Service Alliance of Canada, 1993 CanLII 125 (SCC), [1993] 1 S.C.R. 941; Canada (Director of Investigation and Research) v. Southam Inc., 1997 CanLII 385 (SCC), [1997] 1 S.C.R. 748; Air‑Care Ltd. v. United Steel Workers of America, 1974 CanLII 200 (SCC), [1976] 1 S.C.R. 2; University Hospital v. Service Employees International Union, Local 333 U.H. (1986), 1986 CanLII 2911 (SK CA), 46 Sask. R. 19; Re Benson & Hedges (Canada) Ltd. and Bakery, Confectionery and Tobacco Workers International Union, Local 325 (1979), 1979 CanLII 3949 (ON LA), 22 L.A.C. (2d) 361; Battlefords and District Co-operatives Ltd. v. RWDSU, Local 544, [1998] 1 S.C.R. 000; Re City of Edmonton and Energy and Chemical Workers Union, Local 829 (1984), 1984 CanLII 5191 (AB GAA), 15 L.A.C. (3d) 137; Re Cove Guest Home and Canadian Brotherhood of Railway, Transport & General Workers (1988), 1988 CanLII 9276 (NS LA), 1 L.A.C. (4th) 42; Re Colonial Cookies (Division of Beatrice Foods Inc.) and United Food & Commercial Workers, Local 617P (1990), 1990 CanLII 12795 (ON LA), 13 L.A.C. (4th) 405; Rubel Bronze and Metal Co. and Vos., In re, [1918] 1 K.B. 315; Dauphinee v. Major Foods Ltd. (1983), 1983 CanLII 41 (NS SC), 56 N.S.R. (2d) 517, aff’d (1984), 1984 CanLII 5570 (NS CA), 62 N.S.R. (2d) 381; Farquhar v. Butler Bros. Supplies Ltd., 1988 CanLII 185 (BC CA), [1988] 3 W.W.R. 347; Merilees v. Sears Can. Inc. (1986), 1986 CanLII 723 (BC SC), 24 B.C.L.R. (2d) 165, aff’d (1988), 1988 CanLII 3009 (BC CA), 24 B.C.L.R. (2d) 172.

By L’Heureux-Dubé J. (dissenting)

Battlefords and District Co-operatives Ltd. v. RWDSU, Local 544, [1998] 1 S.C.R. 000; University Hospital v. Service Employees International Union, Local 333 U.H. (1986), 1986 CanLII 2911 (SK CA), 46 Sask. R. 19, leave to appeal refused, [1986] 1 S.C.R. xiii; Canada Safeway Ltd. v. Carey (1987), 1987 CanLII 4469 (SK QB), 65 Sask. R. 238; Stein v. The Ship “Kathy K”, 1975 CanLII 146 (SCC), [1976] 2 S.C.R. 802; Dickason v. University of Alberta, 1992 CanLII 30 (SCC), [1992] 2 S.C.R. 1103; Ross v. New Brunswick School District No. 15, 1996 CanLII 237 (SCC), [1996] 1 S.C.R. 825; Canada (Attorney General) v. Public Service Alliance of Canada, 1993 CanLII 125 (SCC), [1993] 1 S.C.R. 941; United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., 1993 CanLII 88 (SCC), [1993] 2 S.C.R. 316; Toronto (City) Board of Education v. O.S.S.T.F., District 15, 1997 CanLII 378 (SCC), [1997] 1 S.C.R. 487; Royal Oak Mines Inc. v. Canada (Labour Relations Board), 1996 CanLII 220 (SCC), [1996] 1 S.C.R. 369.

Statutes and Regulations Cited

Trade Union Act, R.S.S. 1978, c. T‑17, s. 25.

Authors Cited

Black’s Law Dictionary, 5th ed. By Henry Campbell Black. St. Paul, Minn.: West Publishing Co., 1979, “Layoff”.

Brown, Donald J. M. and David M. Beatty. Canadian Labour Arbitration, 3rd ed. Aurora, Ont.: Canada Law Book, 1997 (loose-leaf).

Dyzenhaus, David. “The Politics of Deference: Judicial Review and Democracy”, in Michael Taggart, ed., The Province of Administrative Law. Oxford: Hart Publishing, 1997, 279.

APPEAL from a judgment of the Saskatchewan Court of Appeal (1996), 1996 CanLII 4966 (SK CA), 141 Sask. R. 213, 114 W.A.C. 213, [1996] S.J. No. 195 (QL), allowing an appeal from a judgment of Scheibel J. (1995), 1995 CanLII 5684 (SK QB), 132 Sask. R. 318, [1995] S.J. No. 246 (QL), dismissing an application for judicial review of an arbitration board (1994), 1994 CanLII 18617 (SK LA), 44 L.A.C. (4th) 325. Appeal dismissed, L’Heureux-Dubé J. dissenting.

Leila J. Gosselin and Larry W. Kowalchuk, for the appellants.

Larry B. LeBlanc, Q.C., for the respondent.

//L’Heureux-Dubé J.//

The following are the reasons delivered by

1 L’Heureux-Dubé J. (dissenting) -- The issue in this case is whether the decision of the Board of Arbitrators (1994), 1994 CanLII 18617 (SK LA), 44 L.A.C. (4th) 325, to uphold the grievance filed by the appellant union on behalf of an employee of the respondent should be upheld. The same issue was dealt with in the companion case of Battlefords and District Co-operatives Ltd. v. RWDSU, Local 544, [1998] 1 S.C.R. 000, heard at the same time, judgment delivered concurrently.

2 I have read the reasons of my colleagues Justices Cory and McLachlin, who arrive at the conclusion that the interpretation by the Board of Arbitrators of the collective agreement in this case was patently unreasonable. While I adopt their view concerning the appropriate standard of review, I respectfully disagree with their application of this standard to the facts of this case, as well as with the ultimate conclusion they reach.

I. The Board’s Decision

3 The employee Ms. Hardy grieved the drastic reduction in her scheduled hours and the dramatic change to her employment relationship. In assessing this matter, the Board reviewed the collective agreement’s scheduling provisions to find that the employer’s conduct constituted a breach of Article A-1.01(2), which provides:

A-1.01 . . .

2. A weekly schedule of daily hours for part-time employees shall be posted by Thursday at 6:00 P.M. for the following week. . . .

It is complemented by Article A-1.04, the “most available hours” clause, which reads:

A-1.04 . . .

2. Effective March 23, 1986, in the scheduling of part-time employees in a store, the most available part-time hours of work on a weekly basis shall be assigned to such employees within the store within the classification and department on the basis of seniority provided the employee has the qualifications and ability to handle the work to be performed in a competent manner. . . .

3. Regular part-time employees will have their schedule for the following work week posted along with other employees in the store. . . .

This obligation on the employer to schedule part-time employees for the most available hours within a department on the basis of seniority is limited to department and job classification. But in the case of a “reduction” to part-time or layoff under Article 12.03, seniority governs an employee’s right to access available hours across departments. This Article reads:

12.03 Full-time or part-time seniority as defined in 12.01 above shall govern in case of reduction to part-time, layoff and recall, providing the employee involved has the qualifications and ability to handle the work to be performed in a competent manner.

The Board emphasized that under these provisions there was no basis on which to distinguish between full and part-time employees’ right to access this “bumping” provision.

4 As the dramatic reduction in scheduled hours failed to be justified by any legitimate reason such as a more senior employee receiving the available hours or no work being available for the employee, the Board concluded that Ms. Hardy was scheduled for far fewer hours than she would likely be required to work. Furthermore, it held that the employer’s scheduling of hours at such a minimal level of one four-hour shift per week, even though the actual hours worked by Ms. Hardy remained consistently the same, stripped the obligation to schedule of any meaning and amounted to a breach of Article A-1.01(2).

5 On the basis of these findings of fact, as well as its interpretation of the collective agreement, the Board concluded at p. 336:

. . . since the employer has breached the scheduling provisions of the collective agreement in a manner that has resulted in a senior employee, the grievor, receiving substantially fewer scheduled hours while at the same time other junior staff were scheduled to work hours in positions that the grievor was qualified and able to have worked, a constructive layoff has occurred.

II. Standard of Review

6 As to the standard of review, the decision of a Board of Arbitrators is protected by a “final and conclusive” privative clause and the issue is squarely within the Board’s expertise. Deference is clearly warranted and I agree with my colleagues that, since the Board was acting within its jurisdiction, the applicable test is patent unreasonableness. The question for this Court, then, is whether the Board’s interpretation of the collective agreement and evidence before it is patently unreasonable.

III. Analysis

7 In order to determine whether the Board’s decision is or is not reasonable, it is important to look closely at the Board’s findings as regards the facts, the constructive layoff and collective agreement. I will discuss these findings of the Board in turn.

(a) The Findings of Fact

8 As my colleagues have set out the facts, I will only emphasize those factual findings of the Board which are relevant to the following discussion. The Board found that the grievor, Ms. Hardy, an exemplary employee of Safeway who originally had scheduled work of 37 hours per week, saw her scheduled hours fall to a single, 4-hour shift per week. While under this new company policy utilizing extensive call-ins Ms. Hardy’s total hours of work changed very little, this is only because Ms. Hardy made herself available for, and accepted, call-ins from her employer. Under this policy, an employee not scheduled to work was expected to wait at home for call-ins which could arrive with as little notice as 15 minutes, or not at all. The Board noted that any refusal to accept a call-in would be noted and become a “black mark” on the employee’s work record.

9 The issue before the Board, then, was whether the drastic reduction of Ms. Hardy’s scheduled hours and the disruptive change it caused to her employment relationship gave rise to a situation whereby she was entitled to access and exercise her seniority rights as a part-time employee under the collective agreement. Since the Board’s findings of fact are closely linked to its findings of a constructive layoff in these circumstances, I will now turn to its treatment of the latter issue.

(b) The Constructive Layoff

10 The Board utilizes the term “constructive layoff” to recognize that, in some circumstances, because the employer/employee relationship is premised on mutuality and consent, an employer’s unilateral conduct which results in a serious disruption in the employer/employee relationship can give rise to an implicit layoff. In other words, the Board held that the concept of constructive layoff refers to the situation where there is no formal layoff but, in fact, the employer’s unilateral actions have amounted to a serious disruption of the employment relationship.

11 The Board relied on University Hospital v. Service Employees International Union, Local 333 U.H. (1986), 1986 CanLII 2911 (SK CA), 46 Sask. R. 19 (C.A.), (leave to appeal refused [1986] 1 S.C.R. xiii) for the proposition that a layoff occurs when the employment relationship is seriously disrupted. It also accepted, under Canada Safeway Ltd. v. Carey (1987), 1987 CanLII 4469 (SK QB), 65 Sask. R. 238 (Q.B.), that such a disruption cannot be implied as a result only of a failure to schedule.

12 Since the collective agreement provides no definition of layoff and refers only to seniority’s prevailing in the case of “reduction to part-time, layoff and recall”, the Board analyzed that notion in order to see whether the circumstances of this case amounted to a layoff. It is to be noted that the concept of layoff itself fails to be reflected by any consistent definition. As confirmed in Brown and Beatty, Canadian Labour Arbitration (3rd ed. 1997) (loose-leaf), at para. 6:2200, “the term ‘layoff’ is a flexible word which could reasonably bear several different meanings depending on the circumstances”.

13 In its analysis, the Board rejected the proposition that a layoff must narrowly emerge from a cessation of work, from a denial of work to the employee. While this may be the typical situation underlying a layoff, the Board considered that there may be other special circumstances which warrant a finding of layoff. In the present case, the Board assessed the circumstances before it to reflect what, in its view, is the essence of layoff -- a serious disruption to the employment relationship which affects seniority rights. As noted above, it cites Vancise J.A. in University Hospital, supra, for precisely this proposition. Therefore, the Board adopted an approach to layoff which focuses on a serious disruption in the employment relationship, rather than the typical situation involving a reduction of work hours. The rationale underlying its approach recognizes that to require, on the facts of this case, a significant reduction of hours for any finding of constructive layoff would encourage a formalistic approach to the diverse circumstances in which layoff could arise. The Board’s approach to layoff allowed it to assess the reality of the situation beyond formal number of hours worked and to recognize that Ms. Hardy’s hours remained the same only because she mitigated her situation well. The Board’s broad approach to layoff, which it characterized as a constructive layoff, describes what it assessed to have really happened to the employee in this case.

14 In adopting this approach to layoff, the Board discussed the well-known concept of constructive dismissal from employment law, but did not ultimately assess or analogize the situation before it as such. It did not attempt to find a lesser form of constructive dismissal for its finding of constructive layoff. Instead, it utilized the term “constructive” to apply to a situation of layoff where, although there has been no formal reduction of hours, a layoff nonetheless arose. In other words, it was not the notion of constructive dismissal which the Board captured in its construing of layoff under the collective agreement, but rather the dynamic that unilateral actions can amount to a repudiation of the contract regardless of whether or not the employer intended to continue the employment relationship. Just as the development of “constructive dismissal” marked the judicial recognition that employers’ behaviour may be the cause of a termination, in defining the type of layoff as “constructive” on the facts before it, the Board recognized that unilateral changes to the employment relationship which cause a serious disruption may constitute a layoff, although there has not been a formal change and reduction in hours. The term “constructive” ultimately manifests the Board’s approach to layoff which recognizes that, regardless of formal appearances, the factual context is paramount in assessing labour realities. Therefore, depending on the circumstances, it may be appropriate to look beyond a formal number of hours worked and examine how these in fact are accrued, and their relation to the collective agreement.

15 In identifying a serious disruption in the employment relationship constitutive of a constructive layoff, despite the fact that there was no necessary accompanying decrease of hours worked, the Board recognized that Ms. Hardy’s hours remained the same only because she mitigated her situation well -- she waited for and accepted call-ins. This determination of constructive layoff sought to identify and describe the reality of Ms. Hardy’s situation, and it was premised on what the Board assessed to be the controlling idea of layoff -- a serious disruption to the employment relationship.

16 Therefore, in the present circumstances, the Board’s definition of layoff as a “constructive” layoff did not imply the creation of additional rights, but rather the realization of actual rights. The Board’s use of this term, to describe what really occurred to Ms. Hardy under the collective agreement, assessed the reality of the workplace before it and gave effect to the parties’ rights and responsibilities under the collective agreement. The Board’s findings of a constructive layoff are also closely linked to its interpretation of the collective agreement, to which I now turn.

(c) The Collective Agreement

17 With the understanding of constructive layoff outlined above, the Board then looked at how the employer’s unilateral conduct had caused a serious disruption to the employment relationship, as defined by the collective agreement, such that Ms. Hardy was entitled to exercise her seniority rights. Central to this determination, was its finding that the employer had breached the collective agreement’s scheduling provisions.

18 The Board found that the employer’s scheduling of hours was so minimal that it stripped the obligation to schedule of any meaning and amounted to a breach of the collective agreement. This is evident in the following extract from its decision, at p. 336:

The board is of the view that the employer cannot schedule hours at such a minimal level as to deprive the obligation to schedule contained in art. A-1.01(2) of the collective agreement of any meaning. A reduction of scheduled hours to four per week when the grievor’s average hours worked over the period in question was consistently in the range of 20 to 24 hours per week -- and unchanged from the level of actual hours of work before the reduction in scheduled hours occurred -- is a breach of art. A-1.01(2).

The Board’s interpretation of Article A-1.01(2) of the collective agreement emphasizes not the employer’s obligation to post merely a schedule by a certain time, but rather the nature of the schedule to be posted. In reviewing the scheduling provisions, it reasoned that the employer was required to determine what part-time hours were required in its operations and then schedule those hours in advance. In effect, the Board found that the employer was not really posting any schedule at all but simply relying on the regular call-ins. As nothing that could be called a real schedule was posted, the employer failed to meet its obligation. Therefore, the Board interpreted the obligation undertaken under Article A-1.01(2) of the collective agreement to include both posting and scheduling elements.

19 In reaching this interpretation of the scheduling obligation, the Board sought to give real effect to the employment relationship’s rights and obligations, and to provide an interpretation that was consistent with the intention contemplated by both parties. In refusing to interpret the scheduling provision narrowly as no more than a posting obligation, the Board aimed to reflect the employee’s expectation under the collective agreement that a genuine schedule, which provided notification of available hours, would be posted.

20 Beyond a breach of the scheduling provisions, the Board based its finding of constructive layoff on the nature of the employer’s conduct. It assessed the matter as follows, at pp. 332-33, 335, 336 and 337:

While it is agreed that a lack of or reduction in scheduling of a part-time employee does not of itself lead to the conclusion that a lay-off has occurred, in this case the employer has dramatically reduced the grievor’s scheduled hours but at the same time has called her in to work approximately the same number of hours as prior to the reduction in scheduled hours.

. . . the fact that the grievor’s scheduled hours were dramatically reduced while her actual hours remained the same leads inexorably to the conclusion that the grievor was scheduled for far fewer hours than were reasonably likely to be required to be work.

This Board therefore finds that, since the employer has breached the scheduling provisions of the collective agreement in a manner that has resulted in a senior employee, the grievor, receiving substantially fewer scheduled hours while at the same time other junior staff were scheduled to work hours in positions that the grievor is qualified and able to have worked, a constructive lay-off has occurred. . . .

The grievor is therefore entitled to the benefits provided under the collective agreement as a result of her seniority in the context of a lay-off. In the board’s view, this will mean that the grievor ought to be scheduled to work in those positions in which she is qualified and able in preference to junior staff. [Emphasis added.]

In other words, in the Board’s view, Ms. Hardy was entitled to exercise her seniority rights because of the manner in which the employer had breached the scheduling provisions and the fact that there were junior employees that could be bumped.

21 Indeed, as noted above, the Board’s finding of a constructive layoff took into account how there was an implicit lack of good faith on the part of the employer in creating and posting a schedule. It specifically noted that Ms. Hardy had been scheduled for far fewer hours than she would be required to work, and the lack of scheduling failed to be explained by any legitimate reason under the collective agreement. The relevance of this factor is evident in University Hospital, supra, where Vancise J.A. buttressed his finding of no layoff (where the employer had unilaterally reduced all part-time employee hours by fifteen minutes) by the fact that the employer’s requirements for part-time employees was determined as ‘bona fide’ and in accordance with the collective agreement. It is precisely this bona fide determination and scheduling under the applicable provisions of the collective agreement set out above, which the Board failed to find in this case and which supports its framing of the grievance in layoff terms. Recognizing that a mere scheduling grievance would not generally imply a layoff situation, the Board determined, on the factual circumstances before it, that, while the employer dramatically reduced Ms. Hardy’s scheduled hours, it continued to call her in to work approximately the same number of hours as she worked prior to the reduction. Implicitly what the Board was saying is that this indicates a lack of good faith on the employer’s part. Therefore, the employer had done more than fail to post a schedule: it had effected a unilateral change to the employment relationship that caused a serious disruption and amounted, in substance, to a layoff. In the Board’s view, this gave Ms. Hardy the right to exercise her seniority rights under the collective agreement.

22 The Board also found it relevant that more junior employees were being scheduled in positions in which Ms. Hardy could have worked. In other words, it recognized that Ms. Hardy had bumping rights to exercise, and realize upon, in a situation of layoff.

23 In conclusion, the Board’s approach reflects its interpretation of the collective agreement that where the employer “reduces” staff, it has an obligation to respect seniority rights. The Board found the employer’s unilateral conduct had breached the collective agreement’s scheduling provisions in a manner which gave rise to a layoff and which triggered seniority rights. It assessed the matter as more than a mere grievance of scheduling because of the serious disruption in the employment relationship which the employer’s conduct created. The Board found, as a consequence, that where the employer sought to reduce its staff in order to maximize its flexibility in staffing, it could not do so in contravention of the collective agreement, which guaranteed bumping rights to Ms. Hardy as a result of the Board’s finding of a constructive layoff. In short, as Ms. Hardy had been constructively laid off, she was entitled to access her bumping rights.

IV. The Reasonableness of the Board’s Findings

24 Given the above analysis as to the Board’s findings of fact, as well as its determination of a constructive layoff and its interpretation of the terms of the collective agreement, the final question of whether the Board’s decision is patently unreasonable in the circumstances of this case remains to be addressed.

25 My colleagues’ finding of patent unreasonableness rests on the argument that a layoff, constructive or not, cannot occur without a significant reduction in hours worked. Essentially my colleagues contend that: first, the Board erred in its broad approach to layoff on the facts of this case which could not support any finding of constructive layoff; and second, the Board awarded a remedy not rationally connected to the breach alleged. These errors, they allege, resulted in a patently unreasonable conclusion. With the greatest of respect and for the following reasons, I cannot agree that the Board erred in its approach to Ms. Hardy’s grievance, nor that it reached an unreasonable conclusion.

26 First, as regards the findings of fact of the Board, they are uncontroverted and as this Court has reiterated time and time again, this is the domain par excellence over which the Board enjoys significant advantage and thus should not be interfered with (see Stein v. The Ship “Kathy K”, 1975 CanLII 146 (SCC), [1976] 2 S.C.R. 802, and Dickason v. University of Alberta, 1992 CanLII 30 (SCC), [1992] 2 S.C.R. 1103, at p. 1148). More recently concerning a Board’s finding of discrimination, La Forest J., in Ross v. New Brunswick School District No. 15, 1996 CanLII 237 (SCC), [1996] 1 S.C.R. 825, emphasized the importance of deference to the superior expertise of tribunals in fact-finding and the complex inferences they draw from such findings, at p. 849:

A finding of discrimination is impregnated with facts, facts which the Board of Inquiry is in the best position to evaluate. The Board heard considerable evidence relating to the allegation of discrimination and was required to assess the credibility of the witnesses’ evidence and draw inferences from the factual evidence presented to it in making a determination as to the existence of discrimination. Given the complexity of the evidentiary inferences made on the basis of the facts before the Board, it is appropriate to exercise a relative degree of deference to the finding of discrimination, in light of the Board’s superior expertise in fact-finding. . . .

Like a finding of discrimination, the Board’s determination that a constructive layoff arose required it to draw complex inferences on the evidence before it, which it was in a superior position to assess.

27 It is of particular relevance to this case that it is well established that the interpretation of collective agreements and its application to a particular factual situation fall at the core of labour tribunals’ and appointed board of arbitrators’ expertise and should not be lightly interfered with (Canada (Attorney General) v. Public Service Alliance of Canada, 1993 CanLII 125 (SCC), [1993] 1 S.C.R. 941). As Sopinka J. affirmed in United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., 1993 CanLII 88 (SCC), [1993] 2 S.C.R. 316, at p. 339, regarding the conclusions reached by a labour relations arbitrator:

The questions to be resolved in coming to these conclusions involved the interpretation of the collective agreement and its application to a particular factual situation -- matters which constitute the core area of an arbitrator’s expertise. Combined with the purpose and wording of s. 88, which confers upon the arbitrator exclusive jurisdiction to come to a final settlement of disputes arising out of the interpretation or application of the collective agreement, the arbitrator’s relative expertise mandates that the court defer to the decision of the arbitrator in this case unless his decision is found to be patently unreasonable.

Therefore, the Board’s findings, based on inferences drawn from the evidence before it and its interpretation of the collective agreement, warrant the greatest of deference.

28 The findings of facts particularly relevant to the decision of the Board in this case include the following. First, how the employer’s conduct caused a serious disruption in the employment relationship. Second, how the employer failed to post a genuine schedule that provided any real notice of hours to be worked that week. Third, how Ms. Hardy was regularly called in to work in spite of the dramatic reduction in scheduled hours, and thus how her hours of work would have fallen had she not, to her own hardship, made herself available for and accepted call-ins. And finally, the fact that junior employees were being scheduled before Ms. Hardy in other departments and could be bumped by the exercise of her seniority rights which arose in these circumstances. These findings of the Board are based on the facts before it which are uncontroverted.

29 As for the inferences the Board drew from these findings of fact it was within the Board’s jurisdiction to assess and evaluate them and to draw conclusions from the evidence. The reasons given by the Board for such inferences are spelled out. They are neither arbitrary nor frivolous, and are based on the evidence before it. As well, they are persuasive. Therefore, the inherent and autonomous rationality of the Board’s reasons should be judicially recognized here (David Dyzenhaus, “The Politics of Deference: Judicial Review and Democracy”, in Michael Taggart, ed., The Province of Administrative Law (1997), 279, at p. 289). The Board’s reasons warrant the utmost respect and deference (Toronto (City) Board of Education v. O.S.S.T.F., District 15, 1997 CanLII 378 (SCC), [1997] 1 S.C.R. 487, at pp. 507-9). I cannot see how one can challenge the reasonableness of these conclusions, let alone find them patently unreasonable.

30 With regard to the interpretation of the collective agreement, the Board made the following findings. First, the collective agreement failed to provide any definition of layoff. Second, the term layoff is flexible and open to diverse interpretations depending on the circumstances. The Board adopted a definition of layoff which was founded on precedent and served to address the reality of the situation before it. And third, the Board interpreted the collective agreement to reflect and give effect to the intentions of both parties. It adopted the term of constructive layoff, not to add to the collective agreement’s rights and obligations, but simply to describe the reality of the situation here which triggered Ms. Hardy’s seniority rights. Here again, the interpretation of collective agreements is within the core of the Board’s expertise and should not be lightly disturbed. Once more, the Board’s reasons are explicit, rational and based on the facts. They are neither frivolous, arbitrary nor irrational.

31 The main argument advanced by the respondent, with which my colleagues agree, is that the Board erred in its approach to layoff and in its assessment of the facts in that regard. In their view, this concept applies only when there is a significant reduction of working hours. As a consequence, they find there was no layoff in the circumstances, and consequently, the remedy determined by the Board was patently unreasonable. In my respectful view, this amounts to substituting their opinion for that of the Board.

32 As there is no definition of layoff in the collective agreement and it is within the jurisdiction of the Board, in fact it is its duty, to assess the reality of what happened in the case before it, as well as to interpret the terms of the collective agreement, it was entirely legitimate for the Board to find, on the facts of this case, that a layoff had occurred under the guise of simply scheduling. I cannot find that the Board exceeded its jurisdiction, or that it made an error in so interpreting the collective agreement and the grievance before it. Even had I found such an error, it would certainly not be a patently unreasonable one. As the above discussion of the Board’s analysis clearly demonstrates, this was not a case of arbitrariness or irrationality, since this analysis is borne out by the facts, as well as by the collective agreement. Quite to the contrary, the Board’s logic was clear and its reasons explicit and rational.

33 While the Board’s approach to constructive layoff may be novel, the development of labour law and interpretation of collective agreements in accordance with the reality of the workplace, fall at the heart of its specialized jurisdiction. The point is not, as my colleagues allege, that the Board misapplied the common law concept of constructive dismissal in the context of collective agreements, but rather whether it was reasonable for it to utilize the concept of “constructive” layoff in order to address the reality of the situation which it faced. In my view, this was not an attempt to change the commonly understood and generally accepted meaning of layoff as alleged. Instead, it was the Board exercising its expertise in assessing the reality of the situation before it in light of the terms of the applicable collective agreement. Regardless of the nomenclature framing the Board’s conclusion, what is pertinent is its finding that the employer’s unilateral conduct caused a serious disruption to the employment relationship which was impermissible under its interpretation of the collective agreement, and that entitled Ms. Hardy to access her bumping rights.

34 In this respect, I also cannot agree with my colleagues’ argument that the Board erred by converting a scheduling complaint into a matter of layoff. As discussed above, the scope it granted to the grievance, and its ultimate finding of layoff, were based on more than a mere infringement of scheduling provisions. To narrowly construe the matter as no more than scheduling, fails to take account of the Board’s finding that a serious disruption to the employment relationship had been caused, contrary to the terms of the collective agreement as interpreted by the Board. My colleagues, here, simply substitute their opinion for that of the Board, which, under judicial review standards, is impermissible.

35 Finally, I note that my colleagues also place considerable reliance for their finding of patent unreasonableness on the fact that the Board allegedly granted a remedy which was not rationally connected with the grievance. They cite this Court’s decision in Royal Oak Mines Inc. v. Canada (Labour Relations Board), 1996 CanLII 220 (SCC), [1996] 1 S.C.R. 369, for the legal principle that if a Board imposes a remedy which is not rationally connected to the breach then it will be exceeding its jurisdiction and its decision will be patently unreasonable. It is this decision which they claim “may provide the basis for reviewing the decision of the Board in this appeal” (para. 67). With the greatest of respect, I find this principle inapplicable in the circumstances. The question of the remedy’s rationality necessarily flows from the Board’s finding of a breach. An assessment of what is rationally connected must follow from the Board’s definition of the breach and not the Court’s opinion as to how the Board should have construed it. Given the reasonableness of the Board’s findings, the remedy it granted was quite logical and provided for by the collective agreement. As a consequence, the rationality of the remedy does not provide a basis for reviewing the Board’s decision.

36 Ultimately, any assessment of the reasonableness of a Board’s conclusion must appraise its process of reasoning. As Professor Dyzenhaus has noted, supra, the autonomy and potential inherent rationality of the administrative process warrants recognition in judicial review, and weight should be given to the Board’s own criteria for rationality, which may well be different from the criteria relevant to the judicial process.

37 In this case, one is struck by the Board’s careful and measured analysis of the facts, the notion of constructive layoff, its interpretation of the collective agreement and finally, the overall situation before it, in order to reach its conclusions and determine the proper remedy. These had a rational foundation and were borne out by the circumstances before the Board. Exercising its jurisdiction and expertise, the Board adopted an approach in order to describe and redress the unique circumstances before it. The notion of constructive layoff allowed the Board to take cognizance of the fact that an employee could be laid off, yet still be working, and provide redress for a situation where, although there was no formal change in hours worked, there had been a serious disruption to the employment relationship. This approach did not create new obligations under the collective agreement, but rather allowed the Board to assess the modern reality of the workplace and give effect to the parties’ rights and obligations under the collective agreement. In so doing, the Board did not, in my view, reach a patently unreasonable conclusion. All of the steps taken by the Board fall within its exclusive jurisdiction to interpret and apply the collective agreement to the labour dispute before it. Although I find no error, the ultimate correctness of these steps is irrelevant, and I cannot conclude they were patently unreasonable.

V. Conclusion

38 In conclusion, for the above reasons I am of the view that the Board’s finding that Ms. Hardy had suffered a constructive layoff such that she could access her bumping rights, as well as the Board’s interpretation of the collective agreement and finding that there had been a serious disruption to the employment relationship are rationally borne by the facts of this case. This conclusion avoids an anomalous result with the companion case of Battlefords, supra, as it does not require penalizing an employee for having mitigated his or her situation well. If there was no formal reduction in the hours worked by Ms. Hardy, it is only because she made herself available for and accepted call-ins. Ultimately, the Board’s view that there was a disruption to the employment relationship sufficient to constitute a layoff, notwithstanding no formal change in the hours worked, was not only not patently unreasonable, but also in my view, it was a reasonable one.

39 For these reasons, I would allow the appeal, set aside the judgment of the Court of Appeal and restore the decision and award of the Board of Arbitrators, the whole with costs throughout.

//Cory and McLachlin JJ.//

The judgment of Gonthier, Cory, McLachlin, Iacobucci, Major and Bastarache JJ. was delivered by

40 Cory and McLachlin JJ. -- Is it patently unreasonable to conclude that an employee whose actual hours of work remain constant, but whose scheduled hours are reduced, was constructively laid off? That is the issue which must be addressed in this case.

Factual Background

41 Kelly Hardy began working at Safeway as a part‑time deli clerk in 1986. As well, she received training which enabled her to work in the meat department under a different job classification. She was scheduled to work in both departments for a total average of 37 hours per week. Ms. Hardy worked a certain but not specific number of hours pursuant to a schedule and the balance of her hours was on a call‑in basis. A schedule of employee hours was posted every Thursday for the following work week and if call‑in hours became available, part‑time employees would receive a telephone call indicating their services were required.

42 In 1989, Ms. Hardy’s scheduled hours dropped to between 30 and 37 hours. She was advised that her dual role as deli clerk and meat clerk was no longer acceptable. She chose to continue in the meat department because she expected that more work hours would be available. However, after the transfer, her scheduled hours fell even further to between 24 and 26 hours. They were then further reduced to one four‑hour shift per week. As a result of the “call‑ins”, however, her actual hours of work did not change significantly.

43 At this time, junior employees in the deli department, in which Ms. Hardy had originally been trained, were being assigned more scheduled hours than she was receiving in the meat department.

44 Ms. Hardy grieved the reduction in her scheduled hours, alleging it violated the “most available hours clause” of the collective agreement, and requested scheduled hours in the deli department. The “most available hours clause” of the collective agreement required the assignment of part‑time hours on the basis of seniority “within the classification and department” provided the employee’s qualifications and ability met the requirements.

Decisions Below

Arbitration Board (1994), 1994 CanLII 18617 (SK LA), 44 L.A.C. (4th) 325

45 Ms. Hardy’s grievance was upheld by the majority of the Arbitration Board. It found that the substantial reduction in her hours, combined with the scheduling of more junior employees to perform work which she was qualified to perform, constituted a “constructive layoff” which gave her the right to ‘bump’ less senior employees and to be scheduled across department classifications.

46 Although the layoff question was not specifically raised in Ms. Hardy’s grievance, the Board found it was linked to her complaint about the reduction in her hours.

47 The Board noted that the collective agreement required that the employer post a schedule of hours to be worked by part‑time employees by 6:00 p.m. each Thursday for the following week and that seniority governed the assignment of part‑time hours.

48 The Board concluded that Ms. Hardy’s loss of scheduled hours did not result from her hours being assigned to more senior employees or from there being no available hours. Instead, it resulted from the employer’s desire for flexibility in scheduling which would reduce costs. The Board found that the fact that Ms. Hardy’s scheduled hours had been reduced to one four‑hour shift per week while she continued to be needed for significantly more hours indicated that Safeway was underutilising the scheduling provision of the collective agreement. Although the collective agreement did not prohibit Safeway from calling employees in as their services were required, the Board concluded that the employer could not schedule hours at such a minimal level as to deprive the obligation to schedule work of any meaning.

49 The Board held, at p. 336, that the employer “breached the scheduling provisions of the collective agreement in a manner that has resulted in . . . the grievor, receiving substantially fewer scheduled hours . . . and . . . a constructive lay‑off has occurred”. It concluded that Ms. Hardy should enjoy the benefits of a laid‑off employee and that the seniority provisions should be applied, giving her preference over junior employees to do work for which she was qualified.

50 One of the three Board members dissented. He found it illogical that a part‑time employee who worked the same number of hours, in the same store, in the same department and in the same classification could be said to have been laid off. Further, he disagreed with awarding the grievor layoff remedies for a breach of the scheduling provision. Rather, the proper remedy should have been an order to correct the scheduling deficiencies.

Court of Queen’s Bench (1995), 1995 CanLII 5684 (SK QB), 132 Sask. R. 318

51 Scheibel J. found that although he may have reached a different conclusion, the Arbitration Board’s award was not patently unreasonable. The award was therefore upheld.

Court of Appeal (1996), 1996 CanLII 4966 (SK CA), 141 Sask. R. 213

52 Wakeling J.A. began his assessment of the Board’s decision by noting that the term “constructive layoff” had not been recognized or applied either judicially or by arbitration boards. He expressed doubt that the concept of constructive dismissal from employment law could be applied to a layoff, which has generally been held to consist of a period during which a worker is temporarily discharged. In his view, a “constructive” layoff implies that the employee was not actually laid off and by adding the modifier “constructive”, the Board created additional rights for the employee which were not contemplated by the use of the word “layoff” in the collective agreement. Further, Wakeling J.A. was not satisfied that an employee working for the same employer, in the same department, for the same number of hours could be classified as being laid off in any sense of the word. He concluded that the addition of the word “constructive” is not a means by which the basic elements of what constitutes a layoff can properly be modified.

53 Wakeling J.A. reviewed the jurisprudence discussing the meaning of the term “layoff”. He found that layoff must involve, at the very least, a substantial reduction in the hours of work. He noted that this situation was absent in the present case where no reduction in actual hours of work had occurred.

54 Wakeling J.A. found that by labelling the treatment of Ms. Hardy as a “constructive layoff” the Board magically gave her access to provisions of the collective agreement which would not have been otherwise available. He concluded that such an interpretation of the agreement was patently unreasonable since it gave the agreement a meaning which it could not reasonably bear.

55 In Wakeling J.A.’s view, the parties to the collective agreement clearly intended that there would be a difference between the treatment of employees who had been laid off and others who had not. Further, it was reasonable to assume that in the absence of a definition of “layoff”, the parties believed they would be able to recognize when an employee had been laid off. Finally, he observed that nowhere in the provision respecting layoffs was there a suggestion that it would apply to a person who continues to be employed but whose scheduled hours of work have been reduced.

56 Wakeling J.A. allowed the appeal and set aside the Board’s award.

Relevant Legislation

57 The Trade Union Act, R.S.S. 1978, c. T‑17, s. 25:

25. ‑- (1) Where a collective bargaining agreement contains a provision for final settlement by arbitration, without stoppage of work, of all differences between the parties to or persons bound by the agreement or on whose behalf the agreement was entered into concerning its meaning, application or violation, the finding of the arbitrator or the board of arbitration shall:

(a) be final and conclusive;

(b) in regard to all matters within the legislative jurisdiction of the Legislature of Saskatchewan be binding upon the parties; and

(c) be enforceable in the same manner as an order of the board made under this Act.

What is the Appropriate Standard of Judicial Review?

58 Where labour relations tribunals are called upon to interpret or apply a collective agreement under the umbrella of a privative clause, a reviewing court can only intervene in the case of a patently unreasonable error. (See Canada (Attorney General) v. Public Service Alliance of Canada, 1993 CanLII 125 (SCC), [1993] 1 S.C.R. 941, and Toronto (City) Board of Education v. O.S.S.T.F., District 15, 1997 CanLII 378 (SCC), [1997] 1 S.C.R. 487). This high degree of curial deference is essential to maintain the integrity of the system which has grown to be so efficient and effective in the resolution of disputes arising in the sensitive field of labour relations. The nature of labour disputes requires their speedy resolution by expert tribunals. The protective clause found in the Trade Union Act is the legislative recognition of the fundamental need for deference to the boards’ decisions.

59 Section 25(1) of the Act states that the finding of the arbitrator or board of arbitration is “final and conclusive” and “binding upon the parties”. Although this is not a true privative clause, it is very close to it. In United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., 1993 CanLII 88 (SCC), [1993] 2 S.C.R. 316, Sopinka J. considered a statute pertaining to a board of arbitration which contained a similar statutory provision. It was to the effect that issues arising from the interpretation of a collective bargaining agreement were to be submitted to arbitration “for final settlement”. It was held that judicial deference to the decision of the arbitration board was warranted. The sage observation was made that an unlimited scope of judicial review would thwart the goal of mandatory arbitration to provide an efficient and cost effective manner of resolving disputes in this field. Those comments are appropriate to this case.

60 Further, in the case at bar, the Board was acting within its exclusive jurisdiction to interpret and apply the collective agreement when it considered whether the layoff provisions were applicable to Ms. Hardy’s situation. It follows that there can be no doubt that the appropriate standard of review in this case is one of patent unreasonableness.

61 This standard of review has now been well established and accepted. It imposes a deferential approach to judicial review. This is a very high standard which will not easily be met. In Canada (Attorney General) v. Public Service Alliance of Canada, supra, it was said at pp. 963‑64:

What is patently unreasonable to one judge may be eminently reasonable to another. Yet any test can only be defined by words, the building blocks of all reasons. Obviously, the patently unreasonable test sets a high standard of review. In the Shorter Oxford English Dictionary “patently”, an adverb, is defined as “openly, evidently, clearly”. “Unreasonable” is defined as “[n]ot having the faculty of reason; irrational . . . Not acting in accordance with reason or good sense”. Thus, based on the dictionary definition of the words “patently unreasonable”, it is apparent that if the decision the Board reached, acting within its jurisdiction, is not clearly irrational, that is to say evidently not in accordance with reason, then it cannot be said that there was a loss of jurisdiction. This is clearly a very strict test.

62 In order to justify judicial intervention, the arbitrator’s decision must be more than simply unreasonable. In Canada (Director of Investigation and Research) v. Southam Inc., 1997 CanLII 385 (SCC), [1997] 1 S.C.R. 748, at para. 57, Iacobucci J. described the difference between an unreasonable and a patently unreasonable decision as follows:

The difference . . . lies in the immediacy or obviousness of the defect. If the defect is apparent on the face of the tribunal’s reasons, then the tribunal’s decision is patently unreasonable. But if it takes some significant searching or testing to find the defect, then the decision is unreasonable but not patently unreasonable.

63 A reviewing court cannot intervene simply because it disagrees with the reasoning of the arbitration board or because it would have reached a different conclusion. To do so would be to usurp the power of the administrative tribunal and to remove from it the ability to arrive at erroneous conclusions within its area of specialized expertise.

64 If a Board purports to act in a manner that clearly exceeds its jurisdiction as set out in its empowering legislation, its decision is incorrect and thus invalid but it would also be patently unreasonable. There are, as well, certain specific egregious errors which are so patently unreasonable that a Board decision should be set aside. It may be helpful to review briefly the cases in which this Court has indicated that a board’s decision could be found to be patently unreasonable.

65 In Royal Oak Mines Inc. v. Canada (Labour Relations Board), 1996 CanLII 220 (SCC), [1996] 1 S.C.R. 369, a dangerous situation had developed in the community owing to the impasse reached between the mine workers and the employer. In the circumstances, the majority of the Court approved the exceptional solution imposed by the Canada Labour Relations Board to put an end to the dispute. However, it was noted, at p. 403:

if the Board imposes a remedy which is not rationally connected to the breach and its consequences or is inconsistent with the policy objectives of the statute then it will be exceeding its jurisdiction. Its decision will in those circumstances be patently unreasonable.

66 In Toronto (City) Board of Education, supra, this Court quashed an arbitration board’s award ordering the reinstatement of a teacher. It was held that the board’s decision was overwhelmingly contradicted by the evidence that there was just cause for the dismissal. In concluding that the award was patently unreasonable, it was stated, at p. 509:

where the arbitral findings in issue are based upon inferences made from the evidence, it is necessary for a reviewing court to examine the evidence that formed the basis for the inference. . . . [A court] can only substitute its opinion for that of the tribunal where the evidence viewed reasonably is incapable of supporting the tribunal’s findings. [Emphasis in original.]

67 It is the decision in Royal Oak Mines, supra, which may provide the basis for reviewing the decision of the Board in this appeal.

68 We must now turn to a consideration of whether the arbitration board’s award in this case was patently unreasonable.

Was the Arbitration Board’s Award Patently Unreasonable?

69 There is no suggestion of unfair procedure or bias. The inquiry therefore focuses on whether the Board applied the wrong principles or applied the correct principles in the wrong way, for example, by making an award which is not supported by the evidence or by reason.

70 We have concluded that the Board made a patently unreasonable error of law in defining the change in Ms. Hardy’s working conditions as a constructive layoff. Ms. Hardy’s scheduled hours dropped from 37 or more hours per week to one four‑hour shift per week. Her total hours worked, however, remained relatively constant because she was regularly called in to work by the employer. In our view, the term “layoff” as used in labour law refers to the denial of work to the employee. As a matter of law, a layoff cannot be found where the employee continued to work the usual number of hours, as here. We also conclude that the Board erred in failing to characterize Ms. Hardy’s grievance in terms of the labour agreement and in imposing a remedy not rationally connected to the breach alleged. It follows that the Board’s decision that a constructive layoff occurred is patently unreasonable.

71 The labour agreement in the case at bar does not define “layoff”. We must therefore look at the cases to see how courts and labour arbitrators have defined it. They suggest that “layoff” is used in the law of labour relations to describe an interruption of the employee’s work short of termination. A “layoff”, as the term is used in the cases, does not terminate the employer‑employee relationship. Rather, it temporarily discharges the employee. The hope or expectation of future work remains. But for the time being, there is no work for the employee. Such an employee, it is said, is laid off.

72 Reference to a few of the cases illustrate this use of the term. In Air‑Care Ltd. v. United Steel Workers of America, 1974 CanLII 200 (SCC), [1976] 1 S.C.R. 2, at p. 6, Dickson J. (as he then was) adopted the following definition of layoff:

“Lay‑Off” is not defined in the Quebec Labout Code, R.S.Q. 1964, c. 141. However, the Shorter Oxford English Dictionary defines “lay‑off” as follows: “Lay‑off, a period during which a workman is temporarily discharged” and Nouveau Larousse Universel, Tome 2 “Mise à pied”; “retrait temporaire d’emploi”.

The controlling idea of a layoff as a disruption (as opposed to termination) of the employment relationship is echoed by Vancise J.A. in University Hospital v. Service Employees International Union, Local 333 U.H. (1986), 1986 CanLII 2911 (SK CA), 46 Sask. R. 19. Stating that a layoff occurs when the employee‑employer relationship is “seriously disrupted”, Vancise J.A. noted at p. 28 that Black’s Law Dictionary, 5th ed., defines layoff as “A termination of employment at the will of the employer. Such may be temporary (e.g. caused by seasonal or adverse economic conditions) or permanent.”

73 While in common parlance the term “layoff” is sometimes used synonymously with termination of the employment relationship, its function in the lexicon of the law is to define a cessation of employment where there is the possibility or expectation of a return to work. The expectation may or may not materialize. But because of this expectation, the employer‑employee relationship is said to be suspended rather than terminated.

74 The suspension of the employer‑employee relationship contemplated by the term “layoff” arises as a result of the employer’s removing work from the employee. As stated in Re Benson & Hedges (Canada) Ltd. and Bakery, Confectionery and Tobacco Workers International Union, Local 325 (1979), 1979 CanLII 3949 (ON LA), 22 L.A.C. (2d) 361, at p. 366:

Arbitrators have generally understood the term “lay‑off” as describing the situation where the services of an employee have been temporarily or indefinitely suspended owing to a lack of available work in the plant. . . .

75 It follows that for there to be a layoff, there must be a cessation of work. If the employee continues to work substantially the same number of hours, his or her grievance is not, whatever else it may be, a layoff. As the Arbitration Board stated in Re Benson & Hedges, supra, at p. 370, “there is . . . a general arbitral consensus that lay‑off refers to cessation of work by an employee and that if it is to bear any other meaning it should be clearly spelled out by appropriate adjectival words or phrases [in the collective agreement]”.

76 This raises the question of whether a reduction of work short of cessation may be considered to be a “constructive layoff”. This question need not be decided in this case, since Ms. Hardy’s hours of work were not reduced. However, it arises in the companion case of Battlefords and District Co-operatives Ltd. v. RWDSU, Local 544, [1998] 1 S.C.R. 000, and may conveniently be discussed here. We would not preclude the possibility that in certain circumstances, a significant reduction of hours might give rise to a constructive layoff. It might be argued that it is unfair to deny an employee recourse to relief on the ground of layoff, simply because the employer occasionally gives the employee token amounts of work. Of course, where the alleged layoff occurs in the context of a collective agreement, the ultimate issue is whether the reduction of hours amounts to a layoff under the agreement. The question becomes one of construction of the agreement. We note that arbitrators have on occasion found constructive dismissal where the reduction is significant and affects only one employee, as opposed to all employees: see Re City of Edmonton and Energy and Chemical Workers Union, Local 829 (1984), 1984 CanLII 5191 (AB GAA), 15 L.A.C. (3d) 137, at p. 140; Re Cove Guest Home and Canadian Brotherhood of Railway, Transport & General Workers (1988), 1988 CanLII 9276 (NS LA), 1 L.A.C. (4th) 42, at p. 46; Re Colonial Cookies (Division of Beatrice Foods Inc.) and United Food & Commercial Workers, Local 617P (1990), 1990 CanLII 12795 (ON LA), 13 L.A.C. (4th) 405, at p. 411.

77 In light of the conclusion that the Board made a patently unreasonable error in finding Ms. Hardy was laid off when she had suffered no reduction of hours, it may be useful to enquire as to what lay behind the Board’s reasoning. In our view, the Board made three errors. First, it defined layoff too broadly. Second, it wrongly analogized the situation before it to the legal concept of constructive dismissal. Finally, it failed to place sufficient emphasis on the terms of the collective agreement which governed the remedies for the workplace changes that Ms. Hardy experienced. We will deal with each of these errors in turn.

78 The Board defined layoff generally as a disruption of the employer‑employee relationship. Having found that the reduction of Ms. Hardy’s scheduled hours and their replacement by unscheduled hours breached an obligation to schedule in Article A‑1.01(2) of the collective agreement and disrupted the employer‑employee relationship, it seems to have assumed that there must also have been a layoff. The error in this reasoning stems from defining layoff as synonymous with a work disruption. Many things may constitute a disruption of the employer‑employee relationship. A layoff is merely one of them. It cannot be inferred from the fact that there was a disruption in the employer‑employee relationship that there was a layoff. A layoff, as the foregoing authorities demonstrate, is the specific type of disruption that occurs as a result of a cessation of work.

79 The second error in the Board’s reasoning was to treat constructive layoff as analogous to constructive dismissal. Counsel for the appellant took up this theme, basing his case on the contention that since the law recognizes constructive dismissal, it must recognize conduct falling short of dismissal as constructive layoff. The doctrine of constructive dismissal holds that an employer who radically changes the nature of an employee’s work may, in appropriate circumstances, be held to have “constructively” dismissed the employee: see Rubel Bronze and Metal Co. and Vos., In re, [1918] 1 K.B. 315; Dauphinee v. Major Foods Ltd. (1983), 1983 CanLII 41 (NS SC), 56 N.S.R. (2d) 517 (S.C.), affirmed by (1984), 1984 CanLII 5570 (NS CA), 62 N.S.R. (2d) 381 (C.A.); Farquhar v. Butler Bros. Supplies Ltd., 1988 CanLII 185 (BC CA), [1988] 3 W.W.R. 347 (B.C.C.A.); Merilees v. Sears Can. Inc. (1986), 1986 CanLII 723 (BC SC), 24 B.C.L.R. (2d) 165 (S.C.), affirmed by (1988), 1988 CanLII 3009 (BC CA), 24 B.C.L.R. (2d) 172 (C.A.). Counsel for the appellant argues that if a radical change in work or working conditions can effect a constructive dismissal, than a less radical change, like the reduction of scheduled hours in the case at bar, must be capable of amounting to a constructive layoff.

80 In fact, the analogy between constructive dismissal and constructive layoff is false. Constructive dismissal recognizes the fact that a drastic change in conditions of employment may be tantamount to terminating the employment relationship, entitling the employee to notice or damages in lieu of notice. Layoff simply refers to the temporary cessation of employment, for which damages are not available. The two concepts are quite different, as are the legal consequences that flow from them. It is conceivable that an employer’s denial of scheduled hours to an employee in favour of other, more junior employees, could, in appropriate circumstances, support an argument of constructive dismissal outside the collective bargaining context. But unless the hours were reduced to the point that there has been a cessation of the employee’s employment, there has been no layoff.

81 The Board’s final error lay in failing to apply the collective agreement properly to Ms. Hardy’s grievance. The relations between the parties were governed by the collective agreement. If the dispute fell under the terms of that agreement, no recourse to common law concepts like constructive dismissal or its alleged cousin, constructive layoff, was proper. Ms. Hardy alleged a violation of the collective agreement, in particular the “most available hours clause” and Letter of Understanding No. 5. In fact, the “most available hours clause” provided for assignments on the basis of seniority only within the employee’s classification and department. It did not provide for cross‑classification transfer of part‑time employees on the basis of seniority and the Board concluded that it had not been violated. Instead, the Board, through the purported common law doctrine of constructive layoff, converted Ms. Hardy’s scheduling complaint into a layoff complaint and gave her a remedy available under the layoff provision ‑‑ the right to be scheduled to work across classifications (Article 12.03 says that seniority governs in the case of lay‑off of part‑time employees). It found that the employer had breached Article A‑1.01(2) by ceasing to pre‑schedule Ms. Hardy for the hours she worked and relying on the call in procedure. In the Board’s view, this breach of the scheduling provisions, which resulted in Ms. Hardy receiving substantially fewer scheduled hours while junior staff in other classifications were being scheduled to work, constituted a constructive layoff.

82 The Board did not find that, apart from the purported layoff, Ms. Hardy had the right to be scheduled across classifications. Rather, it found that she had that right because she had been laid off. Yet it based its conclusion that Ms. Hardy had been laid off on the fact that junior staff in other classifications were being scheduled to work. In effect, by importing a concept of constructive layoff not found in the collective agreement, the Board gave a remedy for the scheduling grievance not specified in the agreement. To put it another way, the remedy the Board granted is not rationally connected to the breach alleged and runs counter to the provisions of the collective agreement. It creates an internal contradiction within the collective agreement that is patently unreasonable.

83 We conclude that the decision of the Board was patently unreasonable. We would dismiss the appeal with costs and affirm the order of the Court of Appeal.

Appeal dismissed with costs, L’Heureux-Dubé J. dissenting.

Solicitors for the appellants: Kowalchuk Law Office, Regina.

Solicitors for the respondent: MacPherson, Leslie & Tyerman, Regina.