Alberta Union of Provincial Employees v. Lethbridge Community College, [2004] 1 S.C.R. 727, 2004 SCC 28

Board of Governors of Lethbridge Community College Appellant

v.

Alberta Union of Provincial Employees and Sylvia Babin Respondents

and

Canadian Labour Congress, National Union of Public and General Employees and Provincial Health Authorities of Alberta Interveners

Indexed as: Alberta Union of Provincial Employees v. Lethbridge Community College

Neutral citation: 2004 SCC 28.

File No.: 29323.

2003: November 4; 2004: April 29.

Present: McLachlin C.J. and Iacobucci, Major, Bastarache, Binnie, Arbour, LeBel, Deschamps and Fish JJ.

on appeal from the court of appeal for alberta

Labour relations — Arbitration board — Scope of arbitration board’s remedial jurisdiction — Employee dismissed without just cause for non-culpable deficiency — Board awarding damages in lieu of reinstatement — Whether arbitration board could award damages in lieu of reinstatement for dismissal for non-culpable deficiency — Labour Relations Code, R.S.A. 2000, c. L-1, s. 142(2).

Judicial review — Labour relations — Standard of review — Arbitration board — Employee dismissed without just cause for non-culpable deficiency — Board awarding damages in lieu of reinstatement — Standard of review applicable to board’s interpretation of remedial provision and to board’s award — Labour Relations Code, R.S.A. 2000, c. L-1, s. 142(2).

The appellant employer had hired the respondent grievor as a scheduling coordinator but dismissed her on the grounds that her work performance was unsatisfactory. The grievor and the respondent union grieved the dismissal alleging dismissal without just cause in contravention of the collective agreement. The arbitration board found that, while the grievor was dismissed for non-culpable incompetence, just cause for discharge had not been shown because the employer had failed to comply with the Re Edith Cavell criteria setting out the requirements for dismissal of an employee on grounds of non-culpable deficiency. In fashioning the remedy, the majority of the board concluded that it could substitute a financial award under s. 142(2) of the Alberta Labour Relations Code and awarded her damages in lieu of reinstatement since reinstatement was inappropriate in the circumstances. The Court of Queen’s Bench dismissed the respondents’ application for judicial review. The Court of Appeal set that decision aside, ordered that the grievor be reinstated and referred the quantum of back pay to the board for determination. The court found that s. 142(2) did not apply to non-culpable dismissals and that, absent compliance with the Re Edith Cavell criteria, the usual and expected remedy was reinstatement.

Held: The appeal should be allowed.

When the relevant factors of the pragmatic and functional approach are properly considered, the standard of review applicable to the arbitration board’s interpretation of s. 142(2) of the Labour Relations Code and to the board’s award is that of reasonableness.

The arbitration board’s interpretation of s. 142(2) was reasonable. While the provision can reasonably support an interpretation which limits its application to culpable dismissals, the board had ample reasons to adopt a broader, but equally reasonable, interpretation and conclude that the provision applied to both culpable and non-culpable dismissals. The verb “discipline” in s. 142(2) can be defined using terms or concepts not habitually associated with punishment per se. Similarly, the inclusion of language enabling the board to substitute “some other penalty” that in the arbitrator’s view “seems just and reasonable in all the circumstances” suggests a broad and inclusive reading of the provision. Moreover, the Code’s purpose is to facilitate arbitral dispute resolution and promote an effective relationship between employers and employees through the fair and equitable resolution of matters arising in respect of terms and conditions of employment. Arming arbitrators with the means to carry out their mandate lies at the very core of resolving workplace disputes. A broad interpretation of s. 142(2) alongside ss. 135 and 136 produces results more consonant with the statutory objectives, the wording of the provision and the object of collective agreements.

The approach that, absent a finding that the criteria set out in Re Edith Cavell have been met, the arbitrator is required to reinstate the employee on the basis that the employer has not established cause for the employee’s dismissal or discipline, is a very narrow and mechanistic approach to employee conduct and arbitral authority. It neither takes full account of the arbitrator’s dispute resolution mandate, nor adequately considers the myriad of employment circumstances that employees and employers confront. The Re Edith Cavell criteria, by themselves, do not determine the framework for analysis and should not dictate the terms of remedial authority exercised by the arbitrator. Given the object of the legislation and its overall purpose, there is no practical reason why arbitrators ought to be stripped of remedial jurisdiction when confronted by labour disputes that turn on a distinction between culpable and non-culpable conduct, and a finding of cause thereafter.

The exercise of the arbitration board’s remedial power also met the reasonableness standard of review. The case law indicates that the jurisdiction to substitute an award of damages in lieu of reinstatement should be exercised in “exceptional” or “extraordinary circumstances”. Commensurate with the notion of exceptional circumstances, as developed in arbitral jurisprudence, is the need for arbitrators to be liberally empowered to fashion appropriate remedies, taking into consideration the whole of the circumstances. While culpable conduct is far more likely to lead to a poisoned or inhospitable work environment than conduct characterized as non-culpable, the consequences of the conduct and not its characterization should be the primary focus of the remedial inquiry. As a general rule, where a grievor’s collective agreement rights have been violated, reinstatement of the grievor to her previous position will normally be ordered. Departure from this position should only occur where the arbitration board’s findings reflect concerns that the employment relationship is no longer viable. In making this determination, the arbitrator is entitled to consider all of the circumstances relevant to fashioning a lasting and final solution to the parties’ dispute. In this case, the board did not act in an unreasonable manner by substituting an award for reinstatement. It properly considered the whole of the circumstances and reached a reasonable conclusion as to the continued viability of the employment relationship. The board’s decision fell well within the bounds of arbitral jurisprudence requiring a finding of exceptional circumstances prior to substitution of remedy.

Cases Cited

Referred to: Re Edith Cavell Private Hospital and Hospital Employees’ Union, Local 180 (1982), 1982 5068 (BC LA), 6 L.A.C. (3d) 229; U.E.S., Local 298 v. Bibeault, 1988 30 (SCC), [1988] 2 S.C.R. 1048; Pushpanathan v. Canada (Minister of Citizenship and Immigration), 1998 778 (SCC), [1998] 1 S.C.R. 982; Dr. Q v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226, 2003 SCC 19; Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247, 2003 SCC 20; Toronto (City) v. C.U.P.E., Local 79, [2003] 3 S.C.R. 77, 2003 SCC 63; Dayco (Canada) Ltd. v. CAW-Canada, 1993 144 (SCC), [1993] 2 S.C.R. 230; Voice Construction Ltd. v. Construction & General Workers’ Union, Local 92, [2004] 1 S.C.R. 609, 2004 SCC 23; Canadian Broadcasting Corp. v. Canada (Labour Relations Board), 1995 148 (SCC), [1995] 1 S.C.R. 157; Toronto (City) Board of Education v. O.S.S.T.F., District 15, 1997 378 (SCC), [1997] 1 S.C.R. 487; Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324, [2003] 2 S.C.R. 157, 2003 SCC 42; Chieu v. Canada (Minister of Citizenship and Immigration), [2002] 1 S.C.R. 84, 2002 SCC 3; Heustis v. New Brunswick Electric Power Commission, 1979 26 (SCC), [1979] 2 S.C.R. 768; Moreau-Bérubé v. New Brunswick (Judicial Council), [2002] 1 S.C.R. 249, 2002 SCC 11; Québec (Communauté urbaine) v. Corp. Notre-Dame de Bon-Secours, 1994 58 (SCC), [1994] 3 S.C.R. 3; Rizzo & Rizzo Shoes Ltd. (Re), 1998 837 (SCC), [1998] 1 S.C.R. 27; R. v. Sharpe, [2001] 1 S.C.R. 45, 2001 SCC 2; Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, 2002 SCC 42; Barrie Public Utilities v. Canadian Cable Television Assn., [2003] 1 S.C.R. 476, 2003 SCC 28; Alberta and Alberta Union of Provincial Employees (Van Steenoven Grievance), [1998] A.G.A.A. No. 43 (QL); Port Arthur Shipbuilding Co. v. Arthurs, 1968 29 (SCC), [1969] S.C.R. 85; Wm. Scott & Co. and Canadian Food and Allied Workers Union, Local P-162, [1977] 1 Can. L.R.B.R. 1; Alberta v. Alberta Union of Provincial Employees (1998), 1998 ABQB 765, 230 A.R. 114; Alberta v. Alberta Union of Provincial Employees (1987), 1987 3407 (AB QB), 82 A.R. 19; St. Anne Nackawic Pulp & Paper Co. v. Canadian Paper Workers Union, Local 219, 1986 71 (SCC), [1986] 1 S.C.R. 704; Weber v. Ontario Hydro, 1995 108 (SCC), [1995] 2 S.C.R. 929; New Brunswick v. O’Leary, 1995 109 (SCC), [1995] 2 S.C.R. 967; Blanchard v. Control Data Canada Ltd., 1984 27 (SCC), [1984] 2 S.C.R. 476; Re City of Vancouver and Vancouver Municipal and Regional Employees Union (1983), 1983 4826 (BC LA), 11 L.A.C. (3d) 121; Crane Canada Inc. and U.A., Loc. 170, Re (1990), 1990 12837 (BC LA), 14 L.A.C. (4th) 253; Canada (Director of Investigation and Research) v. Southam Inc., 1997 385 (SCC), [1997] 1 S.C.R. 748; Alberta Union of Provincial Employees v. University Hospitals Board (1989), 1989 3202 (AB QB), 98 A.R. 384; United Steelworkers of America, Local 12998 v. Liquid Carbonic Inc. (1996), 1996 11787 (ON SC), 29 O.R. (3d) 468; Alberta Teachers’ Assn. and Communications, Energy and Paperworkers’ Union, Local 777 (Oliverio Grievance), [1998] A.G.A.A. No. 77 (QL), aff’d [1999] A.J. No. 144 (QL); Calgary Board of Education v. Canadian Union of Public Employees, Local 40 (R.J. Grievance), [2001] A.G.A.A. No. 13 (QL); Chaumiere Retirement Residence and Service Employees’ Union, Local 210, Re (1993), 1993 16689 (ON LA), 37 L.A.C. (4th) 86.

Statutes and Regulations Cited

Interpretation Act, R.S.A. 2000, c. I-8, s. 10.

Labour Relations Code, R.S.A. 2000, c. L-1, Preamble, ss. 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146.

Public Service Employee Relations Act, R.S.A. 2000, c. P-43, ss. 44, 63.

Authors Cited

Alberta. Alberta Hansard, vol. II, 21st Leg., 3rd Sess., June 7, 1988, p. 1553.

Brown, Donald J. M., and David M. Beatty. Canadian Labour Arbitration, 3rd ed. Aurora, Ont.: Canada Law Book, 2003.

Côté, Pierre-André. The Interpretation of Legislation in Canada, 3rd ed. Scarborough, Ont.: Carswell, 2000.

Driedger, Elmer A. Construction of Statutes, 2nd ed. Toronto: Butterworths, 1983.

Oxford English Dictionary, vol. IV, 2nd ed. Oxford: Clarendon Press, 1989, “discipline”.

Sullivan, Ruth. Sullivan and Driedger on the Construction of Statutes, 4th ed. Markham, Ont.: Butterworths, 2002.

APPEAL from a judgment of the Alberta Court of Appeal (2002), 2002 ABCA 125, 3 Alta. L.R. (4th) 275, 215 D.L.R. (4th) 176, 303 A.R. 124, 273 W.A.C. 124, [2002] 8 W.W.R. 299, 2002 CLLC ¶220-040, [2002] A.J. No. 695 (QL), 2002 ABCA 125, reversing a decision of the Court of Queen’s Bench (2000), 280 A.R. 139, [2000] A.J. No. 1583 (QL), 2000 ABQB 1006. Appeal allowed.

William J. Armstrong, Q.C., for the appellant.

G. Brent Gawne and Margaret Peggy Kemp, for the respondents.

John Baigent, for the interveners the Canadian Labour Congress and the National Union of Public and General Employees.

Eugene Meehan, Q.C., and Dev Chankasingh, for the intervener the Provincial Health Authorities of Alberta.

The judgment of the Court was delivered by

Iacobucci J. —

I. Introduction

[1] This appeal deals with the remedial competence of an arbitration board under the Alberta Labour Relations Code, R.S.A. 2000, c. L-1 (“Code”). More specifically, the issue raised concerns the exercise of an arbitration board’s power under s. 142(2) of the Code. The respondent, Ms. Babin, was dismissed from employment by the appellant on grounds that her work performance was unsatisfactory. The arbitration board found her conduct to be non-culpable, and the majority of the board awarded her damages in lieu of reinstatement, concluding that reinstatement was inappropriate in the circumstances.

[2] As will be discussed in these reasons, the arbitration board’s interpretation of s. 142(2) is reviewable on a standard of reasonableness, as is the board’s remedy. Both decisions meet this standard: the arbitration board’s interpretation of the provision was reasonable, and the remedy proposed by the board was equally so. Accordingly, I would allow the appeal.

II. Relevant Statutory and Collective Agreement Provisions

[3] Labour Relations Code, R.S.A. 2000, c. L‑1

135 Every collective agreement shall contain a method for the settlement of differences arising

(a) as to the interpretation, application or operation of the collective agreement,

(b) with respect to a contravention or alleged contravention of the collective agreement, and

(c) as to whether a difference referred to in clause (a) or (b) can be the subject of arbitration

between the parties to or persons bound by the collective agreement.

136 If a collective agreement does not contain the provisions required under section 135, the collective agreement is deemed to contain those of the following provisions in respect of which it is silent:

(g) The arbitrator shall inquire into the difference and issue an award in writing, and the award is final and binding on the parties and on every employee affected by it.

(j) If the arbitrator by the arbitrator’s award determines that an employee has been discharged or otherwise disciplined by an employer for cause and the collective agreement does not contain a specific penalty for the infraction that is the subject-matter of the arbitration, the arbitrator may substitute any penalty for the discharge or discipline that to the arbitrator seems just and reasonable in all the circumstances.

142(1) Subject to subsection (2), no arbitrator, arbitration board or other body shall by its award alter, amend or change the terms of a collective agreement.

(2) If an arbitrator, arbitration board or other body determines that an employee has been discharged or otherwise disciplined by an employer for cause and the collective agreement does not contain a specific penalty for the infraction that is the subject-matter of the arbitration, the arbitrator, arbitration board or other body may substitute some other penalty for the discharge or discipline that to the arbitrator, arbitration board or other body seems just and reasonable in all the circumstances.

145(1) Subject to subsection (2), no award or proceeding of an arbitrator, arbitration board or other body shall be questioned or reviewed in any court by application for judicial review or otherwise, and no order shall be made or process entered or proceedings taken in any court, whether by way of injunction, declaratory judgment, prohibition, quo warranto or otherwise, to question, review, prohibit or restrain the arbitrator, arbitration board or other body in any of the arbitrator’s or its proceedings.

(2) A decision, order, directive, declaration, ruling or proceeding of an arbitrator, arbitration board or other body may be questioned or reviewed by way of an application for judicial review seeking an order in the nature of certiorari or mandamus if the originating notice is filed with the Court no later than 30 days after the date of the proceeding, decision, order, directive, declaration or ruling or reasons in respect of it, whichever is later.

(3) The Court may, in respect of an application under subsection (2),

(a) determine the issues to be resolved on the application, and

(b) limit the contents of the return from the arbitrator or arbitration board to those materials necessary for the disposition of those issues.

Public Service Employee Relations Act, R.S.A. 2000, c. P-43

44 Sections 134 to 146 of the Labour Relations Code apply in respect of collective agreement arbitration under this Act, except that in sections 136(e), 137(1), 138(1)(a) and (b) and 141(2) and (4) of the Code, the references to “Director” shall be read as references to “Board”.

63(1) No award, proceeding or decision of a tribunal shall be questioned or reviewed in any court, and no order shall be made or process entered or proceedings taken in any court, whether by way of injunction, declaratory judgment, prohibition, quo warranto or otherwise, to question, review, prohibit or restrain the tribunal in any of the tribunal’s proceedings.

(2) Notwithstanding subsection (1), the award, proceeding or decision of a tribunal may be questioned or reviewed by way of an application for certiorari or mandamus if an application for it is filed with the Court not later than 30 days after the date of the award, proceedings or decision of the tribunal.

Article 12.16 of the Collective Agreement between the Board of Governors of Lethbridge Community College and the Alberta Union of Provincial Employees, Local 071-001, for the period from July 1, 1997 to June 30, 1999 reads as follows:

12.16 The decision of the Arbitration Board shall be final and binding on the employee and the Parties.

III. Background

[4] The appellant employer, the Board of Governors of the Lethbridge Community College, hired the respondent grievor, Sylvia Babin (the “grievor”), as a Scheduling Coordinator on November 20, 1995. In this position, the grievor was required to implement an electronic scheduling system for courses offered by the College. The College dismissed the grievor on October 9, 1997, on grounds that she failed to meet deadlines and that her work was incomplete. The grievor and the respondent Alberta Union of Provincial Employees grieved the dismissal, alleging dismissal without just cause, in contravention of the collective agreement.

A. Arbitration Award (December 21, 1999)

[5] Chair McFetridge, writing for the arbitration board, found that the grievor’s circumstances reflected a non-culpable deficiency on the basis that her inability to meet the requirements of her position was due to incompetence. The board found that just cause for discharge had not been shown, as the appellant had failed to comply with the requirements set out in Re Edith Cavell Private Hospital and Hospital Employees’ Union, Local 180 (1982), 1982 5068 (BC LA), 6 L.A.C. (3d) 229 (B.C.), for dismissal of an employee on grounds of non-culpable deficiency. Prior to dismissal for non-culpable deficiency, under the Re Edith Cavell criteria an employer must (a) define the level of job performance required, (b) communicate that standard to the employee, (c) provide reasonable supervision and instruction and allow the employee a reasonable period of time to reach the standard, (d) establish an inability on the part of the employee to reach the requisite standard to an extent rendering the individual incapable of performing the job and that reasonable efforts were taken to find alternative employment within the competence of the employee; and (e) provide reasonable warnings to the employee to convey that a failure to meet the standard could result in dismissal (Re Edith Cavell, supra, at p. 233). Focussing on the last two of these criteria, the board found that the employer had failed this test since a reasonable effort was not made to find the grievor an alternative position at the workplace, nor was she apprised of the seriousness of the situation.

[6] In fashioning a remedy, the board concluded that it could substitute a financial award under s. 142(2) of the Code against the appellant. Owing to a bona fide reorganization of the workplace, the grievor’s previous position no longer existed. The board rejected the possibility of ordering the employer to make efforts to find another position because that would neither guarantee the grievor employment, nor provide a lasting solution. The board awarded the grievor damages in the amount of four months’ salary, having taken into consideration common law principles such as age, length of service and the nature of her position. The board also reasoned that she was unable to handle the duties and responsibilities of her position, and would not have been able to improve her performance or lengthen her employment to any significant extent even with prior warnings.

[7] Arbitrator Bartee dissented from the board’s decision on the basis that the board had made a jurisdictional error with respect to remedy. Arbitrator Bartee opined that where, as in this case, the employer failed to follow the appropriate steps outlined in Re Edith Cavell, supra, the only remedy that the board can order is reinstatement.

B. Alberta Court of Queen’s Bench (2000), 280 A.R. 139, [2000 ABQB 1006](https://www.canlii.org/en/ab/abqb/doc/2000/2000abqb1006/2000abqb1006.html)

[8] The chambers judge dismissed the application for judicial review on the preliminary argument that the respondents were precluded from seeking judicial review of the board’s decision, having accepted payment of the arbitration award sought to be reviewed. Smith J. found that, under the doctrine of election, the acceptance of the award was inconsistent with the asserted right of reinstatement.

[9] The application for judicial review was also dismissed on its merits. Smith J. determined that the interpretation of s. 142(2) ought properly be reviewed against a standard of reasonableness, while the application of the section to the facts must meet the patent unreasonableness standard. She found both standards to have been met. The board’s interpretation of s. 142(2) to include any form of discharge, whether culpable or not, was reasonable in light of the wording of the section. It was further reasonable for the board to substitute another remedy for reinstatement, where special circumstances exist and on the basis of broad remedial authority.

C. Alberta Court of Appeal (2002), 3 Alta. L.R. (4th) 275, [2002 ABCA 125](https://www.canlii.org/en/ab/abca/doc/2002/2002abca125/2002abca125.html)

[10] The court overturned the chambers judge’s finding on the doctrine of election, holding that the grievor had not made an election by accepting payment of the arbitration award, on the basis that she had not clearly indicated that she had accepted it in lieu of judicial review.

[11] In respect of the interpretation of s. 142(2), the court determined that the appropriate standard of review was correctness, while the board’s decision as to remedy was to be reviewed against a standard of patent unreasonableness. The court found that s. 142(2) does not apply to non-culpable behaviour, and as such the board was incorrect in applying s. 142(2) to the circumstances of Ms. Babin’s dismissal. The court noted that cause to dismiss for incompetence is considered only to exist where the test in Re Edith Cavell has been satisfied. Absent compliance with the Re Edith Cavell criteria, the usual and expected remedy is reinstatement. The court interpreted s. 142(2) as applying only where the board found cause for the discipline, but the penalty imposed by the employer was not just and reasonable.

[12] With respect to the remedy ordered, the court noted at the outset that the board did not appear to consider or rely upon a broad remedial power beyond s. 142(2) in rendering its award. Upon reviewing the relevant jurisprudence and principles of labour law, the court acknowledged that the remedial power of labour arbitrators does not derive solely from express statutory grant, but from the need for final and binding resolution of grievances. Security of tenure and confidence in dispute resolution mechanisms operate as a check on the scope of this remedial jurisdiction. The court held that in circumstances such as those of the grievor’s dismissal, the board may vary the usual remedy of reinstatement only where exceptional circumstances exist. In this case, the court held that the board did not rely upon a broad remedial jurisdiction, and did not consider whether extraordinary circumstances existed to justify variation of the remedy. On the record, the court was doubtful that such a finding could have been justified or sustained. The court allowed the respondents’ appeal and ordered that the grievor be reinstated, referring the quantum of back pay to the board for determination.

IV. Issues

[13] This appeal raises two basic issues. The first concerns the scope of the board’s jurisdiction under s. 142(2) of the Code, and the second concerns the exercise of the board’s remedial power in light of that jurisdiction. In the reasons that follow, I briefly set out the standard of review against which the board’s decision on each issue must be assessed, before turning to analyse the issues themselves.

V. Analysis

A. Standards of Review

[14] The review of decisions taken by administrative bodies is governed by the pragmatic and functional approach, as established by the jurisprudence of this Court; see U.E.S., Local 298 v. Bibeault, 1988 30 (SCC), [1988] 2 S.C.R. 1048; Pushpanathan v. Canada (Minister of Citizenship and Immigration), 1998 778 (SCC), [1998] 1 S.C.R. 982; Dr. Q v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226, 2003 SCC 19; Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247, 2003 SCC 20; Toronto (City) v. C.U.P.E., Local 79, [2003] 3 S.C.R. 77, 2003 SCC 63. Under this approach, reviewing courts consider four contextual factors: (a) the presence or absence of a privative clause or statutory right of appeal; (b) the relative expertise of the administrative body to that of the reviewing court with respect to the issue in question; (c) the purposes of the legislation and of the provision in particular; and (d) the nature of the question as one of law, fact, or mixed law and fact (Dr. Q, supra, at para. 26). According to the case law, a highly technical or mechanistic approach is to be avoided; instead the interplay among the four factors determines the level of deference owed to the administrative decision itself. This further correlates to three standards of review: correctness, reasonableness, and patent unreasonableness (Ryan, supra, at para. 24).

[15] It is against the proper standard of review that each administrative decision must be measured. The pragmatic and functional approach will not necessarily result in the same standard of review being applied to every decision taken by the arbitrator in the course of arbitration proceedings, as recently affirmed by Arbour J. in Toronto (City) v. C.U.P.E., Local 79, supra, at para. 14.

1. Standard of Review for the Interpretation of Section 142

[16] As noted in the courts below, the relevant provisions of the Code, the Public Service Employee Relations Act, R.S.A. 2000, c. P-43 (“PSERA”), and the collective agreement do not grant full privative protection to decisions of the arbitration board. The strong language of s. 145(1) of the Code and s. 63(1) of the PSERA is undercut by the concomitant thirty-day period of review by way of application for certiorari or mandamus in s. 63(2) of the PSERA and s. 145(2) of the Code. Moreover, the “final and binding” clause in Article 12.16 of the collective agreement provides only a “limited shield against judicial review” in light of this Court’s review of a similar clause in Dayco (Canada) Ltd. v. CAW-Canada, 1993 144 (SCC), [1993] 2 S.C.R. 230, at p. 264; see also Voice Construction Ltd. v. Construction & General Workers’ Union, Local 92, [2004] 1 S.C.R. 609, 2004 SCC 23, at para. 23. In general terms, the stronger the privative clause, the greater the deference due and correspondingly, the weaker the privative clause (or in the absence of one), less deference is owed (Dr. Q, supra, at para. 27; Voice Construction, supra, at para. 18). Section 145 of the Code, ss. 44 and 63(2) of the PSERA and Article 12.16 of the collective agreement do not have the preclusive effect of a full privative clause. Nevertheless, the provisions continue to attract some deference to the decisions of the arbitration board.

[17] The relative expertise of the board also militates in favour of some deference. Arbitrators function as labour relations gatekeepers, and the core of their expertise lies in the interpretation and application of collective agreements in light of the governing labour legislation. In this case, the arbitration board was called upon to interpret the Code, legislation intimately connected with its mandate; see Canadian Broadcasting Corp. v. Canada (Labour Relations Board), 1995 148 (SCC), [1995] 1 S.C.R. 157, at para. 48, and Toronto (City) Board of Education v. O.S.S.T.F., District 15, 1997 378 (SCC), [1997] 1 S.C.R. 487, at para. 39. Moreover, where the provisions at issue have been incorporated into the collective agreement, as in these circumstances, deference to the board is further justified. In this regard, see D. J. M. Brown and D. M. Beatty, Canadian Labour Arbitration (3rd ed. 2003), at §2:2120.

[18] The analysis under the third factor of the pragmatic and functional approach must canvass the purpose of the statutory scheme as a whole and of the provisions implicated in the review; see Dr. Q, supra, at para. 30. As explained in Toronto Board of Education, supra, at para. 36, and recently affirmed in Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324, [2003] 2 S.C.R. 157, 2003 SCC 42, at para. 17, the purpose of grievance arbitration is to “secure prompt, final and binding settlement of disputes arising out of the interpretation or application of collective agreements and the disciplinary actions taken by an employer”. The purpose of the provision particular to this appeal, s. 142(2) of the Code, is at once jurisdictional and remedial, conferring upon the board authority to substitute a penalty for the discharge or discipline of an employee that seems just and reasonable in all the circumstances. The jurisdictional aspect of the provision attracts less deference, as administrative bodies are entirely statutory and thus must be correct in assessing the scope of their mandate; see Chieu v. Canada (Minister of Citizenship and Immigration), [2002] 1 S.C.R. 84, 2002 SCC 3, at para. 24. Its remedial nature, however, militates broadly in favour of greater deference, as expressed by this Court in Heustis v. New Brunswick Electric Power Commission, 1979 26 (SCC), [1979] 2 S.C.R. 768. On balance, an approach more deferential than exacting is suggested.

[19] Of course, by itself, the interpretation of s. 142(2) of the Code is a question of law and thus militates in favour of less deference to the board. As noted by Bastarache J. in Pushpanathan, supra, at para. 38, “the generality of the proposition decided will be a factor in favour of the imposition of a correctness standard”. Section 142(2) calls for statutory interpretation of a general remedy power, the scope of which is itself a legal issue. While a similar provision, s. 136(j) of the Code, is deemed to be included in the collective agreement governing the parties’ labour relations, the essence of the query remains the same. The interpretation of s. 142(2), however, presupposes an understanding and analysis of labour law issues, militating in favour of deference to the board. Further, the nature of the question as one of more or less precedential value is mixed. While decisions of arbitration boards are not precedential and binding per se, substantial arbitral consensus does often arise with respect to particular legal developments, and where jurisdiction to interpret legislation is shared between courts and arbitrators, prior judicial decisions are regarded as binding; see Brown and Beatty, supra, at §1:3300. The nature of this issue, namely whether arbitration boards may substitute damages in lieu of reinstatement, suggests heightened precedential value given the existence of conflicting lines of jurisprudence and widespread application, which in turn calls for less deference to the board.

[20] Having generally considered the above factors, I conclude that the proper standard of review of the board’s decision regarding the interpretation of s. 142 is that of reasonableness.

2. Standard of Review for the Arbitration Board’s Award

[21] The analysis of the first three factors under the pragmatic and functional approach in relation to the award ordered by the board does not differ from that set out above. I have focussed my attention here on the fourth factor, the nature of the problem.

[22] The board’s decision to substitute damages in lieu of reinstatement is a question of mixed fact and law, requiring the application of law to the necessary findings of fact. The nature of the question calls for greater deference given its fact intensity, as considered by this Court in Dr. Q, supra, at para. 34. The arbitration board’s decision to substitute damages in lieu of reinstatement was based on the facts of the dispute. The board was best positioned to assess credibility and weigh evidence put before it in fashioning an appropriate remedy. As discussed by Arbour J. in Moreau-Bérubé v. New Brunswick (Judicial Council), [2002] 1 S.C.R. 249, 2002 SCC 11, at para. 68, when reviewing the ultimate remedial decisions of administrative tribunals, courts are called upon to “pass judgment” on the tribunal’s “ability to assess, weigh, and apply the evidence to a particular legal threshold while discharging its core function”. The arbitration board’s conclusions on such questions of mixed law and fact ought to be afforded deference, given the need for the board to exercise its function in an authoritative and binding fashion. Moreover, the lower precedential value of the board’s remedial disposition further militates in favour of some deference.

[23] After consideration of the four factors of the pragmatic and functional approach, I conclude that this decision must also be assessed against the standard of reasonableness.

B. Application of Reasonableness to the Interpretation of Section 142(2)

[24] Having found that the board’s interpretation of s. 142(2) with respect to remedy must be gauged against the standard of reasonableness, I turn to consider whether the board’s decision has met this standard. For the reasons that follow, I conclude that the board’s statutory interpretation did meet the reasonableness standard.

1. The Modern Approach to Statutory Interpretation

[25] The prevailing approach to statutory interpretation is that proposed by E. A. Driedger, wherein “the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament” (Construction of Statutes (2nd ed. 1983), at p. 87). This approach has been widely endorsed by this Court; see, as illustrations, Québec (Communauté urbaine) v. Corp. Notre-Dame de Bon-Secours, 1994 58 (SCC), [1994] 3 S.C.R. 3, at p. 17; Rizzo & Rizzo Shoes Ltd. (Re), 1998 837 (SCC), [1998] 1 S.C.R. 27, at para. 21; R. v. Sharpe, [2001] 1 S.C.R. 45, 2001 SCC 2, at para. 33, per McLachlin C.J.; Chieu, supra, at para. 27; Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, 2002 SCC 42, at para. 26; Barrie Public Utilities v. Canadian Cable Television Assn., [2003] 1 S.C.R. 476, 2003 SCC 28, at para. 20; and Parry Sound, supra, at para. 41. This principle is supported by the Alberta Interpretation Act, R.S.A. 2000, c. I-8, s. 10, which states that “[a]n enactment shall be construed as being remedial, and shall be given the fair, large and liberal construction and interpretation that best ensures the attainment of its objects”.

[26] As held in Bell ExpressVu, supra, at para. 27, context in the construction of statutory language is invaluable. The modern approach recognizes that statutory interpretation cannot be founded on the wording of the provision alone. Indeed, the words of the particular provision must be considered in light of the legislation as a whole.

2. Application to This Case

[27] At the outset, I note the interrelated and interdependent nature of the interpretive factors set out by Driedger, supra. These factors need not be canvassed separately in every case: see Chieu, supra, at para. 28; Bell ExpressVu, supra, at para. 31. In the context of this appeal, I have grouped the discussion below under two broad headings.

(a) Grammatical and Ordinary Sense

[28] To recall, the disputed section reads as follows:

142. . . .

(2) If an arbitrator, arbitration board or other body determines that an employee has been discharged or otherwise disciplined by an employer for cause and the collective agreement does not contain a specific penalty for the infraction that is the subject-matter of the arbitration, the arbitrator, arbitration board or other body may substitute some other penalty for the discharge or discipline that to the arbitrator, arbitration board or other body seems just and reasonable in all the circumstances.

[29] I agree with the chambers judge’s finding (at para. 52) that s. 142(2) reasonably supports two differing interpretations. The first such approach views the term “discharged” as informed by the word “disciplined”, thereby requiring “discharged” to be interpreted as discharged solely for disciplinary reasons. However, this was not the interpretative route taken by the arbitration board. The board adopted the comments of Arbitrator Moreau in Alberta and Alberta Union of Provincial Employees (Van Steenoven Grievance), [1998] A.G.A.A. No. 43 (QL), wherein the predecessor provision to s. 142(2) was found to permit review of both culpable and non-culpable dismissals. In his reasons, Arbitrator Moreau relied upon the inclusion of both “discharge” and “discipline” in the phrase “may substitute some other penalty for the discharge or discipline that to the arbitrator, arbitration board or other body seems just and reasonable in all the circumstances” as support for his interpretation.

[30] A broad interpretation of the verb “discipline” is also supported by the Oxford English Dictionary (2nd ed. 1989), vol. IV, at p. 735, which defines “discipline” using terms such as “to instruct, educate, train . . . to bring under control”, concepts not habitually associated with punishment per se. Similarly, the inclusion of broad language enabling the board to substitute “some other penalty” that in the view of the arbitrator “seems just and reasonable in all the circumstances” suggests a broad and inclusive reading of the provision. As s. 142(2) equally invites either interpretation, there was ample reason for the arbitration board to conclude that the provision applied to both culpable and non-culpable dismissals.

(b) Legislative and Broader Context

[31] As noted earlier, modern statutory construction results from a harmonious consideration of both the wording of the provision and its legislative context, which I shall now discuss.

(i) Object and Purpose of the Act

[32] The Preamble to the Code provides insight into the purposes of the statute as a whole. The primary object of the legislation is the promotion of an “effective relationship between employees and employers” through the “fair and equitable resolution of matters arising in respect of terms and conditions of employment”. When the Code was introduced in the Alberta legislature, these two tenets of the legislation were described as “philosophical statement[s]” that “must be kept in mind when reading every section of the statute” (Alberta Hansard, vol. II, 21st Leg., 3rd Sess., June 7, 1988, at p. 1553). The employee-employer relationship was further described as one that “should be ‘based on a common interest in the success of’ an entity that both the employer and the employee are associated with” (Alberta Hansard, supra, at p. 1553).

[33] The provision at issue arises under Division 22 of the Code concerning Collective Agreement Arbitration, the purpose of which is both procedural and remedial: ss. 135 to 136 set out core requirements along with model clauses deemed to be included in collective agreements; ss. 137 to 139 establish the procedures of appointing an arbitrator or an arbitration board; ss. 140 to 143 outline the powers of arbitrators; and ss. 144 to 146 set out the binding nature of arbitral awards.

[34] As noted earlier, the purpose of this grievance arbitration scheme, like all others, is to “secure prompt, final and binding settlement of disputes” arising out of the collective agreement: see Parry Sound, supra, at para. 17. Finality in the resolution of labour disputes is of paramount significance both to the parties and to society as a whole. Grievance arbitration is the means to this end; see Brown and Beatty, supra, at §2:1401, that “[t]his legislative framework has been recognized and accepted as establishing an arbitral mandate to fashion effective remedies, including the power to award damages, so as to provide redress for violations of the collective agreement beyond mere declaratory relief” (emphasis added).

[35] Clearly, the overarching purpose and scheme of the Code lend considerable support for the arbitrator to fashion a remedy to suit the particular circumstances of the labour dispute in question.

(ii) Object and Purpose of the Provision

[36] The union and the employer make divergent submissions on the purpose of s. 142(2). In the union’s view, the provision was put in place to protect unionized employees from being subjected to excessively harsh disciplinary measures taken by employers. The employer counters that the provision has as its purpose the provision of a range of remedial tools to assist the arbitrator in fast, efficient and binding dispute resolution. The former view espouses a narrow purpose; the latter a broad one.

[37] The historical context in which the provision was enacted sheds some light on the role or purpose of the provision. The Court of Appeal discussed the origins of s. 142(2) and other sections of its kind, concluding that the provision was enacted with the purpose of returning to arbitrators the remedial authority that was seized from them in the wake of the decision in Port Arthur Shipbuilding Co. v. Arthurs, 1968 29 (SCC), [1969] S.C.R. 85. In Port Arthur, the Court found that once facts justifying discipline had been established, the arbitrator could not interfere with the disciplinary action taken by the employer. This unduly restrictive approach essentially prevented arbitrators from grappling with the real substance and respective merits of discharge grievances, and substantially impaired the ability of arbitrators to effect satisfactory resolutions of such disputes; see Wm. Scott & Co. and Canadian Food and Allied Workers Union, Local P-162, [1977] 1 Can. L.R.B.R. 1 (B.C.), at p. 5. While the history of the provision provides a meaningful starting point, I believe further analysis is warranted.

[38] In my opinion, the remedial power located in s. 142(2) must be read harmoniously with the overarching requirement in s. 135 that “[e]very collective agreement shall contain a method for the settlement of differences arising . . . (b) with respect to a contravention or alleged contravention of the collective agreement . . .”. Absent such provision, s. 136(g) is deemed to be included in the collective agreement, and provides that “[t]he arbitrator shall inquire into the difference and issue an award in writing, and the award is final and binding on the parties and on every employee affected by it”. Read in concert, these provisions equip arbitrators with the tools required to facilitate effective and binding labour dispute resolution.

[39] A similar approach was taken by the Arbitration Board in the Van Steenoven Grievance, supra, where the grievor was also found to have been dismissed without just cause for non-culpable incompetence. In that case, Arbitrator Moreau found himself empowered to substitute damages in lieu of reinstatement upon a global consideration of s. 140(2) (the predecessor provision to s. 142(2)), and Articles 28.07 (just cause provision) and 29.01 (definition of grievance): see Van Steenoven Grievance, at para. 31. Articles 13.01 and 12.01 of the collective agreement under consideration here mirror those relied upon by the Van Steenoven board. Arbitrator Moreau’s decision was upheld upon judicial review by Lefsrud J. in Alberta v. Alberta Union of Provincial Employees (1998), 1998 ABQB 765, 230 A.R. 114 (Q.B.). Recognizing that s. 140(2) did not specifically direct itself to situations in which an employee is simply unable to meet the terms and conditions of employment, Lefsrud J. nevertheless concluded, at para. 39, that

it is abundantly clear from the provisions of the collective agreement and the Division 22 statements about collective agreement arbitration that each Agreement shall contain a method for settlement of differences arising among the parties. As a result, I am satisfied that the Board had full jurisdiction to deal with the validity of the termination and conducted itself throughout the proceedings well within said jurisdiction.

Arbitrator Moreau acknowledged that his analysis diverged from that taken in an earlier decision, Alberta v. Alberta Union of Provincial Employees (1987), 1987 3407 (AB QB), 82 A.R. 19 (Q.B.), per Dea J. I support the approach endorsed by Lefsrud J., inasmuch as it takes proper account of the object of the Code and of the collective agreement arbitration provisions therein.

(iii) Underlying Contextual Considerations

[40] This Court’s jurisprudence has recognized the broad remedial powers required to give effect to the grievance arbitration process. The need for restraint in the fettering of arbitral remedial authority was initially acknowledged by Dickson J. (as he then was) in Heustis, supra, at p. 781, wherein the policy rationale for judicial restraint was explained thus:

The whole purpose in establishing a system of grievance adjudication under the Act is to secure prompt, final, and binding settlement of disputes arising out of interpretation or application of the collective agreement, or disciplinary action taken by the employer, all to the end that industrial peace may be maintained.

This Court’s approach in Heustis foreshadowed an expansion of arbitral authority.

[41] For instance, in St. Anne Nackawic Pulp & Paper Co. v. Canadian Paper Workers Union, Local 219, 1986 71 (SCC), [1986] 1 S.C.R. 704, the Court expressly recognized the arbitrator’s heightened competence in adjudicating breach of rights under collective agreements. Decisions such as Weber v. Ontario Hydro, 1995 108 (SCC), [1995] 2 S.C.R. 929, its companion case New Brunswick v. O’Leary, 1995 109 (SCC), [1995] 2 S.C.R. 967, and Parry Sound, supra, further explain how the arbitrator’s role has grown to fill its mandate. In Weber, the Court acknowledged that arbitrators have exclusive jurisdiction over disputes arising from the interpretation, application, administration or violation of the collective agreement. Parry Sound expanded the scope of the arbitrator’s jurisdiction to include human rights and other employment-related legislation. These decisions mark a trend in the jurisprudence toward conferring on arbitrators broad remedial and jurisdictional authority. Moreover, I cannot help but reiterate this Court’s oft-repeated recognition of the fundamental importance of arbitral dispute resolution; see Heustis, supra; see also Blanchard v. Control Data Canada Ltd., 1984 27 (SCC), [1984] 2 S.C.R. 476; Toronto Board of Education, supra, and Parry Sound. Arming arbitrators with the means to carry out their mandate lies at the very core of resolving workplace disputes.

[42] Further to that point, I note that the categorization of employee conduct as either culpable or non-culpable and the subsequent requirement for cause in either case somewhat obscures the issue before the arbitrator. It has been argued that in cases of non-culpable conduct such as incompetence, cause may only be found to exist where the employer has abided by the five criteria set out in Re Edith Cavell, supra. Absent a finding that these criteria have been met, the arbitrator is required to reinstate the employee on the basis that the employer has not established that there was cause for dismissal or discipline of the employee. Put differently, the argument posits that the arbitrator lacks the capacity to make any other remedial disposition, save reinstatement.

[43] In my opinion, this narrow and mechanistic approach to employee conduct and arbitral authority does not take full account of the arbitrator’s dispute resolution mandate, nor does it consider adequately the myriad of employment circumstances that employees and employers confront. As a result, I do not believe that the criteria set out in Re Edith Cavell by themselves determine the framework for analysis. More particularly, they should not be seen, in and of themselves, as dictating the terms of remedial authority exercised by the arbitrator.

[44] Further, one must consider whether the distinction between culpable and non-culpable conduct is relevant in the particular context. The theory underlying culpable discharge, namely that the employer is engaged in a contractual relationship with the employee and is thus entitled to the “benefit of the bargain”, does not in my opinion differ greatly from that underlying non-culpable discharge. A failure to meet the obligations and reasonable expectations of employment whether by virtue of culpable misconduct or deficient performance of a non-culpable character equally constitutes a disruption of the employment relationship. Arbitrator Hope’s comments in Re City of Vancouver and Vancouver Municipal and Regional Employees Union (1983), 1983 4826 (BC LA), 11 L.A.C. (3d) 121 (B.C.), at p. 140, on this point are apt:

It must be remembered that the question of whether conduct is culpable or non-culpable is an elusive question directed at drawing inferences as to an employee’s state of mind on the basis of his conduct. In the final analysis it is the conduct and not the state of mind which determines the issue of continued employment. An employee who cannot perform is no better off than an employee who will not perform, if the rights of the employer are to be respected.

[45] Moreover, many of the procedural requirements in cases of unsatisfactory, albeit non-culpable performance, as explained in Re Edith Cavell, supra, appear equally relevant to discharge or discipline for culpable conduct. The arbitration board in Crane Canada Inc. and U.A., Loc. 170, Re (1990), 1990 12837 (BC LA), 14 L.A.C. (4th) 253 (B.C.), noted, at p. 281, that an employer’s failure to define the requisite level of performance or to communicate that level adequately to the employee might well become relevant in ascertaining whether or not the employee’s allegedly deficient performance should be characterized as blameworthy.

[46] As affirmed by this Court in Rizzo Shoes, supra, at para. 27, “[i]t is a well established principle of statutory interpretation that the legislature does not intend to produce absurd consequences.” Further, an interpretation may be viewed as absurd where it is incompatible with other provisions or with the object of the legislative enactment: see P.-A. Côté, The Interpretation of Legislation in Canada (3rd ed. 2000), at p. 456. Professor R. Sullivan similarly notes that “[a]n interpretation that would tend to frustrate the purpose of legislation or the realization of the legislative scheme is likely to be labelled absurd”: see Sullivan and Driedger on the Construction of Statutes (4th ed. 2002), at pp. 243-44.

[47] In my opinion, the Court of Appeal’s interpretation of s. 142(2) is somewhat incompatible with the object of the legislation and the overall purpose of the provision. As discussed earlier in these reasons, the purpose of the legislation is to facilitate arbitral dispute resolution, and the content of the legislative scheme provides for arbitrators to do so. Given this context, there is no practical reason why arbitrators ought to be stripped of remedial jurisdiction when confronted by labour disputes that turn on a distinction between culpable and non-culpable conduct and a finding of cause thereafter. A restrictive interpretation of arbitral jurisdiction in s. 142(2) results in legislative lacunae; a broad interpretation of the provision produces results more consonant with statutory objectives.

3. Conclusion

[48] To recall, the appropriate standard upon which the arbitration board’s decision must be measured is that of reasonableness. The reasonableness standard was first described by this Court in Canada (Director of Investigation and Research) v. Southam Inc., 1997 385 (SCC), [1997] 1 S.C.R. 748, at para. 56:

An unreasonable decision is one that, in the main, is not supported by any reasons that can stand up to a somewhat probing examination. Accordingly, a court reviewing a conclusion on the reasonableness standard must look to see whether any reasons support it. [Emphasis added.]

More recently, the contours of the standard were fleshed out in Ryan, supra, at para. 55, as affirmed in Voice Construction, supra, at para. 31. A decision will be unreasonable

only if there is no line of analysis within the given reasons that could reasonably lead the tribunal from the evidence before it to the conclusion at which it arrived. If any of the reasons that are sufficient to support the conclusion are tenable in the sense that they can stand up to a somewhat probing examination, then the decision will not be unreasonable and a reviewing court must not interfere. This means that a decision may satisfy the reasonableness standard if it is supported by a tenable explanation even if this explanation is not one that the reviewing court finds compelling. [Citations omitted.]

On the whole, having regard to the language of the provisions, their purpose and place within the Code, and to the object of the collective agreement, the arbitrator’s interpretation was clearly reasonable.

C. The Exercise of the Board’s Remedial Powers

[49] Having found that the arbitration board’s interpretation of s. 142(2) of the Code to confer remedial power was reasonable, I now address whether the exercise of that power was also reasonable. For the reasons below, I conclude that it was.

1. Exceptional Circumstances and Remedial Jurisdiction

[50] The parties and the Court of Appeal cite a number of decisions where jurisdiction to substitute an award of damages in lieu of reinstatement was exercised in what have been termed “exceptional” or “extraordinary circumstances”; see, as illustrations, Alberta Union of Provincial Employees v. University Hospitals Board (1989), 1989 3202 (AB QB), 98 A.R. 384 (Q.B.); United Steelworkers of America, Local 12998 v. Liquid Carbonic Inc. (1996), 1996 11787 (ON SC), 29 O.R. (3d) 468 (Gen. Div.); Alberta Teachers’ Assn. and Communications, Energy and Paperworkers’ Union, Local 777 (Oliverio Grievance), [1998] A.G.A.A. No. 77 (QL), aff’d [1999] A.J. No. 144 (QL) (Q.B.); Calgary Board of Education v. Canadian Union of Public Employees, Local 40 (R.J. Grievance), [2001] A.G.A.A. No. 13 (QL); Chaumiere Retirement Residence and Service Employees’ Union, Local 210, Re (1993), 1993 16689 (ON LA), 37 L.A.C. (4th) 86 (Ont.).

[51] In discussing the relevant case law, the Court of Appeal stated, at para. 52:

An examination of cases finding “extraordinary circumstances” shows that they usually involve an employee engaging in culpable behaviour, particularly theft or other deceit. There are very few cases of “extraordinary circumstances” where the conduct of the employee was non-culpable.

[52] Prior to this statement, the court had found that such exceptional circumstances cannot be categorized or limited, but that they have been regarded as those wherein the employment relationship has been totally destroyed (para. 51). The parties do not question the development of arbitral consensus in requiring a finding of exceptional circumstances before substituting damages in lieu of reinstatement. Rather, their focus is on the nature and scope of such circumstances. The appellant, in particular, submits that there is no particular focus on culpable conduct in the cases examined by the court.

[53] Decisions in which exceptional circumstances have been found are widely disparate on the facts. A review of such decisions highlights the difficulty with which bright-line distinctions may be marked between culpable and non-culpable conduct in assessing whether circumstances sufficiently exceptional exist so as to justify the board’s refusal to reinstate. While culpable conduct is far more likely to lead to a poisoned or inhospitable work environment than conduct characterized as non-culpable, the consequences of the conduct and not its characterization should be the primary focus of the remedial inquiry. It bears repeating that arbitrators are equipped with broad remedial jurisdiction to secure prompt, final and binding settlement of disputes arising out of the interpretation or application of the collective agreement and disciplinary action taken by employers.

[54] For arbitration to be effective, efficient and binding it must provide lasting, practicable solutions to workplace problems. Commensurate with the notion of exceptional circumstances as developed in arbitral jurisprudence is the need for arbitrators to be liberally empowered to fashion appropriate remedies, taking into consideration the whole of the circumstances. To rob arbitrators of access to the full breadth of the employment context risks impairing their role as final arbiters of workplace disputes. Arbitrators are well positioned on the front lines of workplace disputes to weigh facts and assess credibility as the circumstances warrant.

2. Decision of the Arbitration Board

[55] I am convinced that the arbitration board properly considered the whole of the circumstances in concluding that an award of damages was more appropriate than reinstatement of the grievor. The arbitrator considered, among other factors, the bona fide reorganization of the grievor’s former position, the difficulty with which an alternative position may be found for her, and the likelihood that reinstatement would prolong the ultimate resolution of the issue and present further disputes in implementation. The arbitration board recognized that the grievor had been dismissed without cause, contrary to the terms of the collective agreement, and was thus owed compensation. On balance, the board’s comments reflect concerns about the continued viability of the employment relationship, and fall squarely within the ambit of exceptional circumstances as reflected in the arbitral decisions noted above.

[56] As a general rule, where a grievor’s collective agreement rights have been violated, reinstatement of the grievor to her previous position will normally be ordered. Departure from this position should only occur where the arbitration board’s findings reflect concerns that the employment relationship is no longer viable. In making this determination, the arbitrator is entitled to consider all of the circumstances relevant to fashioning a lasting and final solution to the parties’ dispute.

[57] In light of the above, I am not persuaded that the arbitration board acted in an unreasonable manner by substituting an award of four months’ notice for reinstatement. The arbitration board took due account of all the circumstances before it, and reached a reasonable conclusion as to the continued viability of the employment relationship. This decision fell well within the bounds of arbitral jurisprudence requiring a finding of exceptional circumstances prior to substitution of remedy. It is worth noting that a similar decision was taken by the arbitration board in the Van Steenoven Grievance, supra, at para. 32, where the arbitrator denied reinstatement on the basis that the grievor was unable to perform the work required of her position, and despite the employer’s failure to properly terminate her employment. The board in that case viewed itself in possession of “sufficient evidence” indicating that reinstatement would not provide a lasting solution.

VI. Disposition

[58] I would allow the appeal with costs throughout, set aside the decision of the Court of Appeal, and restore the award of the majority of the arbitration board.

Appeal allowed with costs.

Solicitors for the appellant: Laird Armstrong, Calgary.

Solicitor for the respondents: G. Brent Gawne, Edmonton.

Solicitors for the interveners the Canadian Labour Congress and the National Union of Public and General Employees: Baigent & Jackson, Enderby, British Columbia.

Solicitors for the intervener the Provincial Health Authorities of Alberta: Lang Michener, Ottawa; Provincial Health Authorities of Alberta, Edmonton.