Hydro One Networks Inc. v. Bartlett, 2013 ONSC 3074

Court File and Parties

CITATION: Hydro One Networks Inc. v. Bartlett, 2013 ONSC 3074

COURT FILE NO.: CV-12-00468798

DATE: 20130528

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Hydro One Networks Inc., Plaintiff

– AND –

Tania-Joy Lynn Bartlett, Defendant

BEFORE: E.M. Morgan J.

COUNSEL: Daube Nicholas and Dana McDonald, for the Plaintiff

Joshua Phillips and Dean Ardron, for the Defendants

HEARD: May 15, 2013

ENDORSEMENT

[1] In this motion the Defendant, a former employee of the Plaintiff, challenges the subject matter jurisdiction of the court under Rule 21.01(3) of the Rules of Civil Procedure.

[2] The Plaintiff and the Canadian Union of Skilled Workers (“CUSW”) were at all material times parties to a series of consecutively running Collective Agreements in force since 1999 (the “Collective Agreement”). The Defendant was a member of CUSW and employed by the Plaintiff from September 2006 until October 2, 2012. The Defendant submits that the present claim is within the exclusive jurisdiction of an arbitrator appointed pursuant to the Collective Agreement.

[3] In its Statement of Claim, the Plaintiff seeks disgorgement of monies mistakenly paid to the Defendant during the course of her employment. The Plaintiff submits that the Defendant is no longer an employee of the Plaintiff and is no longer subject to the Collective Agreement, and that the Collective Agreement does not cover the allegations of mistaken payments made by it in the claim. The Plaintiff further argues that the Collective Agreement gives the arbitrator no power to specifically order the disgorgement of monies that it seeks.

[4] The Plaintiff also points out that CUSW is not a party to this action, and has not agreed that arbitration is the proper forum for the employer to seek the remedy claimed in the action. Accordingly, the Plaintiff argues, were the court to agree with the Defendant and send this matter to arbitration, the Plaintiff may be confronted with a challenge by CUSW to the arbitrator’s authority once the matter gets there.

[5] The fact that CUSW has not taken a position on jurisdiction over this claim is not something that can be taken into account here. This court certainly has the power to determine its own subject matter jurisdiction in a motion under Rule 21.01(3), and it cannot decline to do so because of CUSW’s silence on the issue.

[6] The claim is for repayment of board allowance payments that the Defendant received under article 1201 of the Collective Agreement by virtue of having to work more than 97 kilometers from her place of “regular residence”. The Plaintiff alleges that the Defendant did not maintain a regular residence sufficiently far from the worksite to which she was assigned. More specifically, the allegation is that she continued to collect board allowance payments after she sold the residence that originally qualified for those payments and moved closer to the worksite.

[7] The Defendant’s employment was terminated on October 2, 2012. The Plaintiff contends that the termination was for just cause, as the Defendant had refused to cooperate with the Plaintiff’s inquiries about her place of residence or to verify her entitlement to the board allowance payments. The Defendant has grieved that termination under the Collective Agreement, and so the termination itself is not in issue here.

[8] The Defendant’s termination by the Plaintiff did not put an end to the arbitration provisions under the Collective Agreement. If a claim dates from a time that the Collective Agreement bound the parties, and the subject matter of the dispute arises under the Collective Agreement, the matter must proceed to arbitration. General Motors of Canada Ltd. v Brunet, [197] 2 SCR 537. Otherwise, the termination of an employee could never be grieved and submitted to arbitration once the termination has occurred.

[9] Article 1201 of the Collective Agreement sets out at length the specific details of an employee’s entitlement to board allowance payments. No one denies that the Collective Agreement was in force at the time of the Defendant’s employment with the Plaintiff, and that any entitlement that she might have to the board allowance that she received derives from this agreement. The task of determining whether she was or was not entitled to those payments will be one of interpreting the particular board allowance clause in the Collective Agreement and applying it to the facts in respect of the Defendant’s place of residence.

[10] Article 14 of the Collective Agreement provides a final and binding arbitration procedure for any grievance arising thereunder. “Grievance” is defined in the Collective Agreement as “disputes about the interpretation or application of particular clauses of this Agreement and about alleged violations of this Agreement.” It is difficult to see how this definition does not encompass the Plaintiff’s claim herein.

[11] Section 48(1) of the Ontario Labour Relations Act, 1995, SO 1995, c 1, requires every Collective Agreement to contain a final and binding arbitration clause that provides for arbitration of “all differences between the parties arising from the interpretation, application, administration or alleged violation of the agreement, including any question as to whether a matter is arbitrable.” This is a cornerstone of Ontario labour policy. Indeed, section 48(2) provides that in the absence of such an arbitration clause one is deemed to be present. Section 48(18) provides that an arbitrator’s decision is final and binding on all affected parties, while section 48(19) makes an arbitral award ultimately enforceable by order of this court.

[12] This labour arbitration policy is augmented by section 3(3) of the Rights of Labour Act, RSO 1990, R 33, which states that, “[a] collective bargaining agreement shall not be the subject of any action in any court…” The case law also supports the sole jurisdiction of labour arbitrators in questions of interpretation and application of Collective Agreements. As the Supreme Court of Canada put it in St. Anne-Nackawic Pulp & Paper Co. v CPU, Local 219, 1986 71 (SCC), [1986] 1 SCR 704, at para 19, “a general consensus is evident. The courts have no jurisdiction to consider claims arising out of rights created by a Collective Agreement…What is left is an attitude of judicial deference to the arbitration process.”

[13] The Plaintiff submits, correctly, that not everything that occurs between an employer and an employee implicates a Collective Agreement. Weber v Ontario Hydro, [1995] 2 SCR 928, at paras 52-54. It further submits that any dispute that arises outside of the Collective Agreement is within the jurisdiction of the courts. In Weber, the Supreme Court held, at para. 73, that in order to fall within the arbitration clause, a dispute must be “directly related to a process which is expressly subject to the grievance procedure.”

[14] In support of its submission that the present dispute lies outside of the Collective Agreement, the Plaintiff cites Piko v Hudson’s Bay Co., 1998 6874 (ON CA), [1998] 41 OR (3d) 729 (Ont CA) and Goudie v Ottawa (City), 2003 SCC 14, [2003] 1 SCR 141. In my view, neither of those cases is analogous to the one before me.

[15] In Piko, the employee sued her employer for malicious prosecution, claiming that the employer had gone to the police and Crown with false information about her. Laskin J.A. found, at para. 17, that “[t]he [employer] itself went outside the collective bargaining regime when it resorted to the criminal process.” Nothing of that sort has occurred here. When the Plaintiff discovered the alleged overpayment and encountered what it claims to have been the employee’s non-cooperation in the investigation, it terminated her employment. The employee has grieved that termination, and I am advised by counsel that the grievance will proceed before an arbitrator under the Collective Agreement in the near future.

[16] In Goudie, a group of employees brought a claim against an employer based on a pre-employment contract entered into prior to their being members of the union or employees of the bargaining unit covered by the Collective Agreement. Binnie J. found, at para. 4, that “[t]he respondents' entitlement, if any, did not arise out of the interpretation, application, administration or violation of the CUPE agreement. On the contrary, the respondents' complaint is precisely that they were paid according to the CUPE contract rather than under the more advantageous terms of the alleged pre-employment contract.” Again, nothing of that sort occurred here. The question of entitlement to board allowance payments arises only under article 1201 of the Collective Agreement.

[17] In determining jurisdiction, it is the role of this court to ascertain “the essential character” of the dispute. It must be kept in mind that “all ‘differences’ covered by the Collective Agreement must be dealt with by arbitration”, and that “[t]his is done by considering the facts and context of the dispute, rather than its legal characterization.” DiCienzo v McQuillan, 2003 21127 (ON CA), [2004] OJ No 2341, at para 6 (Ont CA).

[18] In the present dispute, the Plaintiff claims back money paid in the first place under the Collective Agreement. The essential character of the dispute, therefore, certainly arises under the Collective Agreement. The entire claim will centre on the interpretation of article 1201 and its application to the Defendant’s residence situation.

[19] The Plaintiff’s real concern is that, unlike a court, a labour arbitrator will not have the power to issue the remedy of repayment that the Plaintiff seeks. This concern is based on the fact that the Collective Agreement appears to envision that any claim for re-payment of monies paid under article 1201 will be brought by the employer during the first month or two of the employee receiving the board allowance; that timing, in turn, would allow for the employer to receive re-payment by means of a deduction from the employee’s subsequent pay. Since the Plaintiff has already terminated the Defendant, the specific remedial mechanism set out in the Collective Agreement is no longer available to it.

[20] The Plaintiff’s concern about remedy, however, is fully addressed by the arbitrator’s power to award damages against an employee where appropriate. The very concern raised by the Plaintiff here was raised by an employer claiming repayment of an employee’s board allowance in Electrical Power Systems Construction Association v. Ontario Allied Construction Trades (1993), 1993 8476 (ON SC), 12 OR (3d) 768 (Div Ct). In a fact situation remarkably close to the one at issue here, the Divisional Court noted that the Labour Relations Board, at [1992] OLRB Rep. April 445, had found that the employee,

improperly claimed and received Room and Board Allowance totalling $11,650 to which he was not entitled under Article 19 of the Master Portion of the Collective Agreement by misrepresenting to Ontario Hydro that his ‘regular residence’ (within the meaning of Article 19) was in St. Catherine’s, when it was actually in Sarnia at all material times.

[21] Notwithstanding that finding against the employee, the Board in Electrical Power went on to hold that in the face of a silent Collective Agreement it was powerless to order the disgorgement sought by the employer. As the Board put it, “nothing in the Collective Agreement between EPSCA and the Council gives the Board the power to award damages against an employee for improperly claiming or receiving Room and Board Allowance.” This is precisely the worry expressed by the Plaintiff in bring its claim for repayment to the court. The Collective Agreement here provides a remedy for an employer claiming back board allowance from an ongoing employee, but is silent as to any remedy against a former employee.

[22] The Divisional Court in Electrical Power analyzed the Board’s decision about the limits of its own powers, and came to a conclusion that should provide comfort to the Plaintiff here. The court noted that, “[s]ection 45(10) [now 48(18)] of the Act provides that the decision of the arbitration is binding ‘upon the employees covered by the agreement who are affected by the decision’.”

[23] The court then went on to apply these statutory provisions to the dispute before it, addressing the Board’s view that it could not order the remedy sought by the employer:

The only reasonable interpretation of the Board’s decision is that it concluded that it did not have any jurisdiction under the Labour Relations Act to grant damages against an employee covered by a Collective Agreement unless the agreement itself specifically empowered the arbitration board to award damages against an employee. This conclusion amounts to a jurisdictional error and therefore an error in law as we are of the view that the Board declined its jurisdiction to consider an award of damages against the employee Cord, jurisdiction which it had under the provisions of the Labour Relations Act referred to above.

[24] The Electrical Power decision provides a complete answer to the Plaintiff’s concern about remedy. The claim for reimbursement of monies paid to the Defendant as board allowance payments must go to an arbitrator under the Collective Agreement. If the arbitrator concludes that money was wrongfully paid to the Defendant, the arbitrator has the power to, among other things, issue a damages award against the Defendant for the appropriate amount.

[25] The subject matter of this action is within the exclusive jurisdiction of an arbitrator appointed pursuant to the Collective Agreement. The action is therefore dismissed.

[26] The Defendant shall have her costs of this motion. Both sets of counsel have submitted cost outlines which I note are very close to each other in terms of the quantum of fees. I take this as a sign that each is being reasonable in its request.

[27] The Plaintiff shall pay the Defendant costs on a partial indemnity basis, as follows: $8,637.50 on account of fees (HST included) and $848.22 on account of disbursements, for a total of $9,485.72.

Morgan J.

Date: May 28, 2013