T-2084-96
Public Service Alliance of Canada (Applicant)
v.
National Capital Commission (Respondent)
and
Public Service Staff Relations Board (Intervenor)
Indexed as: Public Service Alliance of Canada v. National Capital Commission (T.D.)
Trial Division, Pinard J."Ottawa, September 30 and October 24, 1997.
Public Service — Jurisdiction — Judicial review of PSSRB Chairperson's refusal to refer proposals to arbitration board — PSSRA, s. 66(1) conferring on Chairperson exclusive jurisdiction to determine terms of reference of board — Assuring consistency of rulings, finality in arbitration process — Such boards now ad hoc — Not involved in process beyond rendering award — Need for consistency as award binding on parties — Avoiding revision of Chairperson's ruling on mandate.
Public Service — Labour relations — Judicial review of PSSRB Chairperson's ruling Public Sector Compensation Act freezing terms, conditions of employment of NCC employees; refusing to refer to arbitration proposals respecting job evaluation, Art. 47.01 (permitting employer to contract out services if not resulting in loss of employment), Art. Y-1 (binding purchaser of respondent's business to collective agreement) — Public Sector Compensation Act applicable to respondent, employees — Job evaluation plan proposal contrary to PSSRA, s. 69(3)(a) because dealing with classification — Art. 47.01 proposal contrary to s. 69(3)(a), (b) because dealing with organization of respondent — Art. Y-1 proposal contrary to ss. 7 (prohibiting interference with employer's ability to organize itself), 69(2) (making s. 57(2) applicable to an arbitral award), 57(2)(a) (prohibiting changes to terms and conditions of employment requiring amendment of legislation), 69(3)(a).
Administrative law — Judicial review — Certiorari — Judicial review of PSSRB Chairperson's refusal to refer certain proposals to arbitration board — Standard of review that of reasonableness — In determining what matters properly included in arbitral award, Chairperson acting within confines of jurisdiction conferred by Parliament — While no privative clause, also no statutory right of appeal — Chairperson specialized decision maker with considerable expertise — Standard of correctness applied to ruling Public Sector Compensation Act freezing terms, conditions of employment of NCC employees — Not established Chairperson frequently encountering that Act.
This was an application for judicial review of the refusal by the Chairperson of the Public Service Staff Relations Board to refer certain proposals to an arbitration board. The respondent employer was subject to the Public Service Staff Relations Act, which deals with collective bargaining and related matters. The applicant was the bargaining agent for all NCC employees. When the parties were unable to agree on the terms and conditions of employment, the applicant requested arbitration under Public Service Staff Relations Act, section 64. The Chairperson ruled that the Public Sector Compensation Act could be extended to freeze the terms and conditions of employment of NCC employees, and refused to refer to arbitration proposals respecting job evaluation, Article 47.01, (which permitted the employer to contract out services and functions if the contracting out would not result in any loss of employment) and Article Y-1, (which would bind any purchaser of the respondent's business to the terms of the collective agreement).
Public Service Staff Relations Act, section 7 prohibits interference with the employer's ability to organize itself. Paragraph 57(2)(a) prohibits changes to the terms or condition of employment that require the amendment of legislation. Subsection 69(2) provides that subsection 57(2) applies to an arbitral award. Under subsection 66(1), subject to section 69, the chairperson shall deliver to the arbitration board a notice referring the matters in dispute to the board for arbitration. Paragraph 69(3)(a) prohibits an arbitral award from dealing with the classification of positions in the Public Service. Paragraph 69(3)(b) prohibits an arbitral award from dealing with the standards, procedures, or processes governing the deployment, lay-off or termination of the employment of employees.
The issues were: whether the Chairperson had the jurisdiction to determine the terms of reference of an arbitration board; what was the appropriate standard of review of the Chairperson's rulings; whether the Public Sector Compensation Act froze compensation plans applicable to the NCC; and whether the terms of reference should have included the proposals respecting the job evaluation plan, Articles 47.01 and Y-1.
Held, the application should be dismissed.
Subsection 66(1) confers on the Chairperson exclusive jurisdiction to determine the terms of reference of an arbitration board. This interpretation assures consistency of rulings and finality in the arbitration process, which is particularly important since an arbitration board is no longer chaired by a member of the Public Service Staff Relations Board. The arbitration board has become an ad hoc board, and has no involvement in the arbitration process beyond the rendering of its award. It also has no involvement in rights disputes arising from the interpretation of its arbitral award. Furthermore, the need for consistency is now greater in view of the fact that the arbitration board's award, unlike a conciliation board report, is binding on the parties. A procedure whereby the arbitration board is free to determine if matters may or may not be included in its award would invite an arbitration board to revisit the Chairperson's ruling and arrive at a different conclusion.
The standard of review of the Chairperson's determination of the terms of reference of an arbitration board should be that of reasonableness. In determining what matters may be included in an arbitral award, the Chairperson is not determining the parameters of his own jurisdiction, but is acting within the confines of the jurisdiction granted to him by Parliament. While there was no privative clause herein, there was also no statutory right of appeal, and the Chairperson was a specialized decision maker with considerable expertise, who was appointed by Parliament to set the parameters for collective agreements.
As it was not established that the Public Sector Compensation Act, which extends compensation plans to employees employed by entities subject to the provisions of the Act and is thus clearly linked to the arbitration board's mandate, was frequently encountered by the Chairperson, a standard of correctness should be applied to that part of the Chairperson's ruling.
The Public Sector Compensation Act and the constraints on collective bargaining contained therein do apply to the respondent and its employees. Section 3 states that the Act applies to employees employed in or by the agencies, boards, commissions or corporations set out in Schedule II. The NCC is one of the employers listed in Schedule II. The effect of the legislation is to identify the provisions of employees' compensation plans as they existed as of February 26, 1991 and to extend their application for the time periods set out in the Act. Once the provisions of a compensation plan are identified, those provisions then become the terms and conditions which govern the compensation of that group of employees. It is significant that the focus of the legislation is on "employees" rather than employers. Section 3 delineates which "employees" are covered by the Act. Sections 5 and 6 extend the compensation plan of "employees" and make no reference to employers. That there was no compensation plan on February 26, 1991 which involved the NCC as an employer was irrelevant. The compensation plan which applied to the employees in question continued to apply to them once they became employed by the NCC when it acquired separate employer status on January 1, 1994. In determining which matters in dispute should be referred to the arbitration board, the Chairperson had to have regard to subsection 69(2) and paragraph 57(2)(a ) of the Act. Given the present factual context, the Chairperson could not include the applicant's proposals dealing with compensation matters in the terms of reference, because they would have required the amendment of the Public Sector Compensation Act.
The references in the job evaluation plan proposal were all indicative of a classification system. The Chairperson could not refer the proposal to the arbitration board because it dealt with the subject of classification contrary to paragraph 69(3)(a).
The Chairperson's decision not to include the proposal respecting Article 47.01 in the terms of reference was correct. Article 47.01 deals with the organization of the employer contrary to paragraphs 69(3)(a) and (b). A proposal preventing the contracting out of services would prevent the contracting out of functions perhaps presently performed by certain employees during regular hours of work. Such a proposal could operate to prevent lay-offs.
The Chairperson's ruling with respect to Article Y-1 was correct because this proposal was contrary to section 7, subsection 69(2) and paragraphs 57(2)(a) and 69(3)(a) of the Act. This proposal with regard to successor rights could require the employer to fulfil obligations which were beyond its legal capacity from both a constitutional and contractual perspective. The employer could not negotiate a provision that the terms and condition of these employees would continue to be governed by the Act, because the new employer may not fall under the realm of the same Act. The proposal interfered with NCC's right to organize its workforce and, if referred, would require the amendment of legislation by Parliament.
statutes and regulations judicially considered
National Capital Act, R.S.C., 1985, c. N-4.
Public Sector Compensation Act, S.C. 1991, c. 30, ss. 2(1) "bargaining agent", "compensation", "compensation plan", "employee" (as am. by S.C. 1994, c. 18, s. 2), "wage rate", 3(1), 5(1) (as am. idem , s. 3), 6, 7(1),(2), (2.2) (as enacted idem, s. 4), (3),(4),(5), 8 (as am. by S.C. 1995, c. 17, s. 4).
Public Service Reform Act, S.C. 1992, c. 54.
Public Service Staff Relations Act, R.S.C., 1985, c. P-35, ss. 7, 50 (as am. by S.C. 1992, c. 54, s. 45), 57(2), 62, 64 (as am. idem, s. 53), 65 (as am. idem, s. 54), 66 (as am. idem), 69 (as am. idem, s. 57), 70(1), 79 (as am. idem, s. 78), Sch. I, Part II (as am. by SOR/93-304, s. 2).
cases judicially considered
applied:
Canada (Attorney General) v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941; (1993), 101 D.L.R. (4th) 673; 11 Admin. L.R. (2d) 59; 93 CLLC 14,022; 150 N.R. 161; United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316; (1993), 102 D.L.R. (4th) 402; 153 N.R. 81; Dayco (Canada) Ltd. v. CAW-Canada, [1993] 2 S.C.R. 230; (1993), 102 D.L.R. (4th) 609; 14 Admin. L.R. (2d) 1; 93 CLLC 14,032; 152 N.R. 1; 63 O.A.C. 1; Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557; (1994), 114 D.L.R. (4th) 385; [1994] 7 W.W.R. 1; 22 Admin. L.R. (2d) 1; 46 B.C.A.C. 1; 92 B.C.L.R. (2d) 145; 14 B.L.R. (2d) 217; 4 C.C.L.S. 117; 168 N.R. 321; 75 W.A.C. 1; Canadian Broadcasting Corp. v. Canada (Labour Relations Board), [1995] 1 S.C.R. 157; (1995), 121 D.L.R. (4th) 385; 177 N.R. 1; Professional Institute of the Public Service of Canada v. Canada (Attorney General), [1988] F.C.J. No. 948 (T.D.) (QL).
distinguished:
P.S.A.C. v. Canada (Treasury Board), [1987] 2 F.C. 471; (1986), 34 D.L.R. (4th) 641; 72 N.R. 241 (C.A.).
referred to:
Canada (Attorney General) v. Séguin (1995), 101 F.T.R. 64 (F.C.T.D.); Ouimet et al. v. Canada (Treasury Board) (1995), 106 F.T.R. 161 (F.C.T.D.); Council of Postal Unions and the Treasury Board, Conciliation Board Terms of Reference, Board File No. 190-2-7, April 7, 1970; PSAC and the Defence Research Board, Conciliation Board Terms of Reference, Board File No. 190-5-15, February 6, 1973; PIPS and the Treasury Board, Conciliation Board Terms of Reference, Board File No. 190-2-161, August 16, 1988.
APPLICATION for judicial review of the refusal by the Chairman of the Public Service Staff Relations Board to refer certain proposals to an arbitration board. Application dismissed.
counsel:
Andrew J. Raven and David Yazbeck for applicant.
Lynn H. Harnden and R. Bhatt for respondent.
Martine Richard for intervenor.
solicitors:
Raven, Jewitt & Allen, Ottawa, for applicant.
Emond, Harnden, Ottawa, for respondent.
Scott & Aylen, Ottawa, for intervenor.
The following are the reasons for order rendered in English by
Pinard J.: This is an application for judicial review of the decision of Ian Deans, sitting as Chairperson of the Public Service Staff Relations Board (the PSSRB), dated August 20, 1996, which fixed the terms of reference of an arbitration board pursuant to the Public Service Staff Relations Act [R.S.C., 1985, c. P-35]. In his decision, the Chairperson determined that certain proposals were to be referred to the arbitration board and certain other provisions were not to be referred. The applicant, Public Service Alliance of Canada (the Alliance), filed its application for judicial review of the Chairperson's refusal to refer certain proposals to the arbitration board on September 19, 1996.
THE FACTS
The respondent National Capital Commission (the NCC) is created pursuant to the National Capital Act, R.S.C., 1985, c. N-4, as amended, and has been given a mandate relating broadly to the development, conservation and improvement of the National Capital Region. Effective January 1, 1994, the NCC was established as a separate employer under Part II of Schedule I of the Public Service Staff Relations Act, R.S.C., 1985, c. P-35, as amended [as am. by SOR/93-304, s. 2] (the Act). Accordingly, the NCC remains subject to the provisions of the Act, which deal generally with collective bargaining and related matters. Prior to January 1, 1994, Treasury Board was the employer of the employees now working for the NCC. Upon the establishment of the NCC as a separate employer under the Act, the Alliance applied to the PSSRB for certification as bargaining agent on behalf of NCC employees. By its decision dated January 25, 1995, the PSSRB certified the Alliance as bargaining agent for all employees of the NCC. On February 3, 1995, the Alliance served notice to bargain collectively upon the NCC with a view to concluding a collective agreement pursuant to section 50 [as am. by S.C. 1992, c. 54, s. 45] of the Act. Following service of the notice to bargain, the Alliance and the NCC attempted to negotiate a collective agreement respecting terms and conditions of employment of the Alliance-represented employees.
By notice dated May 31, 1995, the Alliance requested arbitration under section 64 [as am. idem, s. 53] of the Act, which provides for the right of parties engaged in collective bargaining to request arbitration in respect of those terms and conditions of employment upon which the parties have been unable to reach an agreement.
In due course, the Chairperson of the PSSRB met with the parties with a view to determining which matters in dispute could be referred to an arbitration board pursuant to sections 66 [as am. idem, s. 54] and 69 [as am. idem, s. 57] of the Act. Subsequently, the parties filed written submissions and, by his decision dated August 20, 1996, the Chairperson issued a decision specifying the terms of reference of the arbitration board.
THE ISSUES
The applicant submits that the Chairperson erred in law and failed to exercise his jurisdiction when he:
" decided not to include in the terms of reference a proposal respecting the joint development of a job evaluation plan; and
" decided not to include in the terms of reference proposals respecting Articles 47.01 and Y-1.
The issues upon which the intervenor PSSRB was granted leave to intervene are:
" the scope of the jurisdiction of a chairperson when delivering a notice referring the matters in dispute to an arbitration board, pursuant to section 66 of the Act; and
" the appropriate standard of judicial review applicable to the review of a chairperson's rulings pursuant to section 66 of the Act.
ANALYSIS
Prior to considering the applicant's submissions, I intend to deal first with the issues raised by the intervenor.
The Scope of the Chairperson's Jurisdiction
Prior to the amendments to the Act by virtue of the Public Service Reform Act, S.C. 1992, c. 54, effective June 1, 1993, the matters in dispute specified in the request for arbitration constituted the terms of reference of the arbitration board, subject to section 69 of the Act. In fact, a member of the PSSRB chaired the arbitration board. The arbitration board determined which matters might be included in an arbitral award, and then proceeded to make its award on the merits. The former provisions read as follows:
57. . . .
(2) No collective agreement shall provide, directly or indirectly, for the alteration or elimination of any existing term or condition of employment or the establishment of any new term or condition of employment,
(a) the alteration or elimination or the establishment of which would require or have the effect of requiring the enactment or amendment of any legislation by Parliament, except for the purpose of appropriating moneys required for its implementation; or
(b) that has been or may be established pursuant to any Act specified in Schedule II.
. . .
62. (1) In respect of each dispute referred to arbitration, the Board shall be deemed to consist, for the period of the arbitration proceedings and for the purposes of the arbitration only, of a member of the Board and two other persons one each selected by the Board from each panel appointed under subsection 61(1).
. . .
64. (1) Where the parties to collective bargaining have bargained collectively in good faith with a view to concluding a collective agreement but have been unable to reach agreement on any term or condition of employment of employees in the relevant bargaining unit that may be embodied in an arbitral award, either party may, by notice in writing to the Secretary of the Board, given in accordance with subsection (2), request arbitration in respect of that term or condition of employment.
. . .
66. (1) Subject to section 69, the matters in dispute specified in the notice under section 64 and in any notice under section 65 constitute the terms of reference of the Board in relation to the request for arbitration, and the Board shall, after considering the matters in dispute together with any other matter that the Board considers necessarily incidental to the resolution of the matters in dispute, render an arbitral award in respect thereof.
. . .
69. (1) Subject to this section, an arbitral award may deal with rates of pay, hours of work, leave entitlements, standards of discipline and other terms and conditions of employment directly related thereto.
(2) Subsection 57(2) applies, with such modifications as the circumstances require, in relation to an arbitral award.
(3) No arbitral award shall deal with the standards, procedures or processes governing the appointment, appraisal, promotion, demotion, transfer, lay-off or release of employees, or with any term or condition of employment of employees that was not a subject of negotiation between the parties during the period before arbitration was requested in respect thereof.
As a result of the amendments brought on by the Public Service Reform Act, an arbitration board is appointed in the same manner as a conciliation board. The amended Act does not allow for an arbitration board to be chaired by a member of the PSSRB. Under these new provisions, the Chairperson delivers terms of reference to the arbitration board "subject to section 69". The provisions of the Act as a result of the amendments brought on by the Public Service Reform Act read as follows [ss. 65 (as am. by S.C. 1992, c. 54, s. 54), 79 (as am. idem, s. 78)]:
57. . . .
(2) No collective agreement shall provide, directly or indirectly, for the alteration or elimination of any existing term or condition of employment or the establishment of any new term or condition of employment,
(a) the alteration or elimination or the establishment of which would require or have the effect of requiring the enactment or amendment of any legislation by Parliament, except for the purpose of appropriating moneys required for its implementation; or
(b) that has been or may be established pursuant to any Act specified in Schedule II.
. . .
65. (1) Subject to section 65.1, the Chairperson shall, on receiving a request for arbitration under section 64, establish an arbitration board for arbitration of the matters in dispute.
(2) An arbitration board shall consist of three persons appointed in the same manner as the members of a conciliation board are appointed pursuant to section 79.
. . .
66. (1) Subject to section 69, forthwith on the establishment of an arbitration board, the Chairperson shall deliver to the arbitration board a notice referring the matters in dispute to the board for arbitration.
. . .
69. (1) [Repealed, S.C. 1992, c. 54, s. 57]
(2) Subsection 57(2) applies, with such modifications as the circumstances require, in relation to an arbitral award.
(3) No arbitral award shall deal with
(a) the organization of the Public Service or the assignment of duties to, and classification of, positions in the Public Service;
(b) standards, procedures or processes governing the appointment, appraisal, promotion, demotion, deployment, lay-off or termination of employment, other than by way of disciplinary action, of employees; or
(c) any term or condition of employment of employees that was not a subject of negotiation between the parties during the period before arbitration was requested in respect thereof.
. . .
79. (1) A conciliation board shall consist of three persons appointed in the manner provided in this section.
(2) When a conciliation board is to be established, the Chairperson shall by notice require each of the parties, within seven days from the receipt of the notice, to nominate one person each to be a member of the conciliation board, and on receipt of the nominations within those seven days, the Chairperson shall appoint the persons so nominated as members of the conciliation board.
(3) If either of the parties fails to nominate a person within seven days from the receipt by it of the notice referred to in subsection (2), the Chairperson shall appoint as a member of the conciliation board a person the Chairperson deems fit for the purpose, and that member shall be deemed to have been appointed on the nomination of that party.
(4) The two members appointed under subsection (2) or (3) shall, within five days after the day on which the second of them was appointed, nominate a third person who is ready and willing to act, to be chairperson of the conciliation board, and the Chairperson shall thereupon appoint that person as the chairperson of the conciliation board.
(5) If the two members appointed under subsection (2) or (3) fail to make a nomination under subsection (4) within five days after the second of them was appointed, the Chairperson shall forthwith appoint as the chairperson of the conciliation board a person the Chairperson deems fit for the purpose.
My interpretation of these amendments is that they are aimed at mandating the Chairperson with the exclusive jurisdiction to determine what matters may be included in an arbitral award. This interpretation assures consistency of rulings and finality in the interest arbitration process. I agree with the intervenor's submission that this is particularly important in light of the fact that the arbitration board is no longer chaired by a member of the PSSRB. In effect, as a result of the 1993 amendments, the arbitration board has become an ad hoc board, and as such, has no involvement in the interest arbitration process beyond the rendering of its award. The arbitration board also has no involvement whatsoever in rights disputes arising from the interpretation of its arbitral award. Furthermore, the need for consistency is now greater in view of the fact that the arbitration board's award, unlike a conciliation board report, is binding on the parties.
A procedure by which the arbitration board is free to determine if matters may or may not be included in its award would invite the prospect of an arbitration board revisiting a ruling by the Chairperson and arriving at a different conclusion.
Therefore, I am of the opinion that subsection 66(1) of the Act provides the Chairperson with the exclusive jurisdiction to determine the terms of reference of an arbitration board.
Standard of Review
With respect to the standard as to which decisions of administrative tribunals made within their jurisdictions are reviewed, I intend to refer to the applicable case law, as I have done in previous decisions.1 Cory J. for the Supreme Court of Canada in Canada (Attorney General) v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941, stated the following, at pages 961-962:
In expressing the reluctance courts should feel in interfering in decisions of administrative tribunals, McLachlin J. echoed the dicta of Dickson C.J. in Fraser v. Public Service Staff Relations Board, [1985] 2 S.C.R. 455. Writing for a unanimous Court Dickson C.J. stated at pp. 464-65:
A restrained approach to disturbing the decisions of specialized administrative tribunals, particularly in the context of labour relations, is essential if the courts are to respect the intentions and policies of Parliament and the provincial legislatures in establishing such tribunals. . . .
A reviewing court, whether under s. 28(1)(b) of the Federal Court Act, or under the common law principles of judicial review, should not interfere with the decision of a statutory decision maker in a case such as this unless the statutory decision maker makes a mistake of law, such as addressing his or her mind to the wrong question, applying the wrong principle, failing to apply a principle he or she would have applied, or incorrectly applying a legal principle. [Emphasis added.]
In summary, the courts have an important role to play in reviewing the decisions of specialized administrative tribunals. Indeed, judicial review has a constitutional foundation. See Crevier v. Attorney General of Quebec, [1981] 2 S.C.R. 220. In undertaking the review courts must ensure first that the board has acted within its jurisdiction by following the rules of procedural fairness, second, that it acted within the bounds of the jurisdiction conferred upon it by its empowering statute, and third, that the decision it reached when acting within its jurisdiction was not patently unreasonable. On this last issue, courts should accord substantial deference to administrative tribunals, particularly when composed of experts operating in a sensitive area.
Cory J. then defined the expression "patently unreasonable" as follows [at pages 963-964]:
It is said that it is difficult to know what "patently unreasonable" means. 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.
It is true that the decision of the administrative tribunal in this latter case was protected by a broad privative clause, which is not the case here. However, that same year, in United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316, the Supreme Court of Canada recognized that judicial deference must be accorded to the decisions of arbitrators interpreting a collective agreement even in the absence of a privative clause. At pages 337-338, Sopinka J. stated the following:
In a number of past decisions, this Court has indicated that judicial deference should be accorded to the decisions of arbitrators interpreting a collective agreement even in the absence of a privative clause. For example, in Douglas Aircraft Co. of Canada v. McConnell, [1980] 1 S.C.R. 245, Estey J. commented, at p. 275, with the rest of the Court concurring on this point, that:
the law of review has evolved, even in the absence of a privative clause, to a point of recognition of the purpose of contractually-rooted statutory arbitration: namely, the speedy, inexpensive and certain settlement of differences without interruption of the work of the parties. The scope of review only mirrors this purpose if it concerns itself only with matters of law which assume jurisdictional proportions.
Although this passage might be taken to suggest that an arbitrator's decision on any question of law may be immune from review, I am of the view that it refers to questions of law in interpreting the collective agreement and not the interpretation of a statute or a rule of common law. I am uncertain as to what is meant by "jurisdictional proportions" in this context as there is no privative clause requiring that the jurisdictional limits of the tribunal be ascertained in order to determine whether a particular decision is immune from review. I assume, however, that Estey J. was merely following the language of Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp. , [1979] 2 S.C.R. 227 ("CUPE"), and like cases of the time which did involve privative clauses, and that what he is referring to is the policy of deference with respect to matters relating to the interpretation of collective agreements which is the stuff of the "differences" to which he refers.
A little further on, at pages 340 and 341, Sopinka J. added:
Once it has been determined that curial deference to a particular decision of a tribunal is appropriate, the tribunal has the right to be wrong, regardless of how many reviewing judges disagree with its decision. A patently unreasonable error is more easily defined by what it is not than by what it is. This Court has said that a finding or decision of a tribunal is not patently unreasonable if there is any evidence capable of supporting the decision even though the reviewing court may not have reached the same conclusion (Lester (W.W.) (1978) Ltd. v. United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, Local 740, [1990] 3 S.C.R. 644, at pp. 687-88), or, in the context of a collective agreement, so long as the words of that agreement have not been given an interpretation which those words cannot reasonably bear (Bradburn, supra, per Laskin C.J., at p. 849). What these statements mean, in my view, is that the court will defer even if the interpretation given by the tribunal to the collective agreement is not the "right" interpretation in the court's view nor even the "best" of two possible interpretations, so long as it is an interpretation reasonably attributable to the words of the agreement. Or, as stated by Dickson J. in CUPE , at p. 237:
. . . was the Board's interpretation so patently unreasonable that its construction cannot be rationally supported by the relevant legislation and demands intervention by the court upon review?
See also PSAC No. 2 (reasons of Cory J.).
In Dayco (Canada) Ltd. v. CAW-Canada, [1993] 2 S.C.R. 230, at pages 250-251, La Forest J. also recognized that the expertise of an arbitrator in questions relating to the interpretation of collective agreements calls for special consideration:
This Court has stated in previous cases that courts should, as a matter of policy, defer to the expertise of the arbitrator in questions relating to the interpretation of collective agreements; see Volvo Canada Ltd. v. U.A.W., Local 720, [1980] 1 S.C.R. 178 and Douglas Aircraft Co. of Canada v. McConnell, [1980] 1 S.C.R. 245. This development is traced in the dissenting reasons of Wilson J. in National Corn Growers Assn. v. Canada (Import Tribunal), [1990] 2 S.C.R. 1324, at pp. 1340-42. It is clear that an arbitrator has jurisdiction stricto sensu to interpret the provisions of a collective agreement in the course of determining the arbitrability of matters under that agreement. In that case the arbitrator is acting within his or her "home territory", and any judicial review of that interpretation must only be to a standard of patent unreasonableness.
Finally, in Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557, Iacobucci J. considered the whole spectrum of standards developed by the courts for the determination of the applicable standard of review. At pages 589-591, he stated the following:
From the outset, it is important to set forth certain principles of judicial review. There exist various standards of review with respect to the myriad of administrative agencies that exist in our country. The central question in ascertaining the standard of review is to determine the legislative intent in conferring jurisdiction on the administrative tribunal. In answering this question, the courts have looked at various factors. Included in the analysis is an examination of the tribunal's role or function. Also crucial is whether or not the agency's decisions are protected by a privative clause. Finally, of fundamental importance, is whether or not the question goes to the jurisdiction of the tribunal involved.
Having regard to the large number of factors relevant in determining the applicable standard of review, the courts have developed a spectrum that ranges from the standard of reasonableness to that of correctness. Courts have also enunciated a principle of deference that applies not just to the facts as found by the tribunal, but also to the legal questions before the tribunal in the light of its role and expertise. At the reasonableness end of the spectrum, where deference is at its highest, are those cases where a tribunal protected by a true privative clause, is deciding a matter within its jurisdiction and where there is no statutory right of appeal. See Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227; U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048, at p. 1089 (Bibeault), and Domtar Inc. v. Quebec (Commission d'appel en matière de lésions professionnelles), [1993] 2 S.C.R. 756.
At the correctness end of the spectrum, where deference in terms of legal questions is at its lowest, are those cases where the issues concern the interpretation of a provision limiting the tribunal's jurisdiction (jurisdictional error) or where there is a statutory right of appeal which allows the reviewing court to substitute its opinion for that of the tribunal and where the tribunal has no greater expertise than the court on the issue in question, as for example in the area of human rights. See for example Zurich Insurance Co. v. Ontario (Human Rights Commission), [1992] 2 S.C.R. 321; Canada (Attorney General) v. Mossop, [1993] 1 S.C.R. 554, and University of British Columbia v. Berg, [1993] 2 S.C.R. 353.
It is important to point out that the same Judge, at pages 591-592, also recognized that the existence of a privative clause was not determinative in establishing the applicable standard of review:
Consequently, even where there is no privative clause and where there is a statutory right of appeal, the concept of the specialization of duties requires that deference be shown to decisions of specialized tribunals on matters which fall squarely within the tribunal's expertise. This point was reaffirmed in United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316 (Bradco), where Sopinka J., writing for the majority, stated the following at p. 335:
. . . the expertise of the tribunal is of the utmost importance in determining the intention of the legislator with respect to the degree of deference to be shown to a tribunal's decision in the absence of a full privative clause. Even where the tribunal's enabling statute provides explicitly for appellate review, as was the case in Bell Canada, supra, it has been stressed that deference should be shown by the appellate tribunal to the opinions of the specialized lower tribunal on matters squarely within its jurisdiction.
On the other side of the coin, a lack of relative expertise on the part of the tribunal vis-à-vis the particular issue before it as compared with the reviewing court is a ground for a refusal of deference.
Finally, with respect to the standard of review applicable to an administrative tribunal's interpretation of a general public statute other than its constituting legislation, Mr. Justice Iacobucci, in the Supreme Court of Canada decision of Canadian Broadcasting Corp. v. Canada (Labour Relations Board), [1995] 1 S.C.R. 157, at page 187, stated:
As a general rule, I accept the proposition that curial deference need not be shown to an administrative tribunal in its interpretation of a general public statute other than its constituting legislation, although I would leave open the possibility that, in cases where the external statute is linked to the tribunal's mandate and is frequently encountered by it, a measure of deference may be appropriate. However, this does not mean that every time an administrative tribunal encounters an external statute in the course of its determination, the decision as a whole becomes open to review on a standard of correctness. If that were the case, it would substantially expand the scope of reviewability of administrative decisions and unjustifiably so. [Emphasis added.]
In the case at bar, the applicant has argued that the standard of review should be that of correctness, given that the Chairperson was examining questions dealing with the arbitration board's jurisdiction. It is my opinion that the applicant improperly addressed this issue. The relevant question is whether the Chairperson was acting within his jurisdiction, and not the jurisdiction he was to grant to the arbitration board; and the determination of which matters should be referred to arbitration falls squarely within the Chairperson's jurisdiction. In effect, in determining what matters may be included in an arbitral award, the Chairperson is not determining the parameters of his own jurisdiction. Rather, the Chairperson is acting within the confines of the jurisdiction granted to him by Parliament.
Also, while there is no privative clause in this instance, there is also no statutory right of appeal, and the Chairperson is a specialized decision maker with considerable expertise, who is appointed by Parliament to set the parameters for collective agreements between employers and trade unions. I find therefore that the standard of review of the Chairperson's determination of the terms of reference of an arbitration board should be that of reasonableness.
The only portion of the Chairperson's decision which might be dealt with somewhat differently is where he has reviewed the application of the Public Sector Compensation Act. Although the latter Act is not the arbitration board's enabling statute, it essentially provides for the extension of compensation plans for employees employed by entities subject to the provisions of the Act and, therefore, is clearly linked to the arbitration board's mandate. However, it has not been established whether the Public Sector Compensation Act is "frequently encountered" by the Chairperson of the PSSRB. In the circumstances, a standard of correctness ought to be applied to the Chairperson's ruling on the matters regarding the Public Sector Compensation Act .
I now turn to the other issues.
Proposals Dealing with Compensation Matters
The Alliance submits that the Chairperson erred in law when he concluded that the Public Sector Compensation Act could be extended to freeze the terms and conditions of employment of NCC employees. I disagree. A close examination of this statute indicates that its provisions do in fact apply to the NCC and its employees, and that the constraints on collective bargaining contained in it apply to the NCC. The relevant applicable provisions of the Public Sector Compensation Act, as amended from time to time, are the following [ss. 2(1) "employee" (as am. by S.C. 1994, c. 18, s. 2), 5(1) (as am. idem , s. 3), 7(2.2) (as enacted idem, s. 4), 8 (as am. by S.C. 1995, c. 17, s. 4)]:
2. (1) In this Act,
"bargaining agent" has the same meaning
(a) in the case of employees in respect of whom Part I of the Canada Labour Code applies, as in subsection 3(1) of that Act,
(b) in the case of employees in respect of whom the Parliamentary Employment and Staff Relations Act applies, as in section 3 of that Act, and
(c) in the case of employees in respect of whom the Public Service Staff Relations Act applies, as in section 2 of that Act;
. . .
"compensation" means all forms of pay, benefits and perquisites paid or provided, directly or indirectly, by or on behalf of an employer to or for the benefit of an employee, except those paid or provided:
3. (1) This Act applies to employees employed in or by
(a) the departments of the Government of Canada or other portions of the public service of Canada, set out in Schedule I;
(b) the agencies, boards, commissions or corporations set out in Schedule II; and
(c) the Senate, House of Commons or Library of Parliament.
. . .
5. (1) Subject to section 11, every compensation plan for employees to whom this Act applies that was in effect on February 26, 1991, including every compensation plan extended under section 6, shall be extended for a period of seventy-two months beginning on the day immediately following the day on which the compensation plan would, but for this section, expire.
. . .
7. (1) Notwithstanding any other Act of Parliament except the Canadian Human Rights Act but subject to this Act, the terms and conditions of
shall continue in force without change for the period for which the compensation plan is so extended.
(2) The Treasury Board may change any terms and conditions of a compensation plan that is extended under section 5 or 6 in respect of which section 11 applies, or of a collective agreement or arbitral award that includes such a compensation plan, if those terms and conditions are, in the opinion of the Treasury Board, in respect of a conversion or reclassification that is required to implement a new or revised classification standard.
. . .
(2.2) Where, on or after December 10, 1992 but before the coming into force of this subsection, the Treasury Board has, pursuant to subsection (2), changed any of the terms and conditions of a compensation plan to implement a new or revised classification standard, the new or revised compensation plan that is in effect as a result of that implementation shall be
(a) extended for a period of twenty-four months beginning on the day immediately following the day on which the compensation plan would, but for this subsection, expire; and
(b) deemed to include a provision to the effect that the wage rates in effect under the plan on the day on which the plan would, but for this subsection, expire shall not be increased for the twenty-four month period immediately following that day.
(3) The Treasury Board may authorize any change to any terms and conditions
(4) The Treasury Board may change any terms and conditions
(5) The Treasury Board may not make or authorize any increase in wage rates pursuant to subsection (3) or (4) that is not in accordance with section 10.
. . .
8. (1) Subject to subsection (3), the parties to any collective agreement or arbitral award that includes a compensation plan that is extended under section 5 or 6 or in respect of which section 11 applies may, by agreement in writing, amend any terms and conditions of the collective agreement or arbitral award otherwise than by increasing
(2) Subject to subsection (3), in the case of a compensation plan not contained in a collective agreement or arbitral award, the terms and conditions of the plan, other than any terms and conditions relating to wage rates or any form of compensation referred to in subsection 5(1.1), may be amended in the manner in which the plan was established.
(3) No amendment may be made at any time to the terms and conditions of a compensation plan pursuant to subsection (1) or (2) if, as determined in accordance with subsection (4), the aggregate of all such amendments made at that time to the plan directly result in any increase in the total amount of expenditures to be incurred in respect of the department or other portion of the public service of Canada or part thereof to which the plan relates.
(4) For the purposes of subsection (3), the determination shall be made
(a) by the Governor in Council, on the recommendation of the Treasury Board, where the plan relates to employees employed in or by the entities referred to in paragraph 3(1)(a) or (b), the staff of ministers of the Crown or persons referred to in paragraphs 3(2)(b), (c) and (d) and subsection 3(3); or
(b) by the appropriate employer, where the plan relates to
Section 3 of the Public Sector Compensation Act states that the Act applies to employees employed in or by "the agencies, boards, commissions or corporations set out in Schedule II". The NCC is listed as one of the employers in Schedule II. As a matter of fact, the NCC has always appeared in Schedule II of the Public Sector Compensation Act from the date it first came into force up to the present.
Section 5 of the Public Sector Compensation Act provides that "every compensation plan for employees to whom this Act applies that was in effect on February 26, 1991 . . . shall be extended". "Compensation plan" is defined as including "the provisions, however established , for the determination and administration of compensation, and includes such provisions contained in collective agreements or arbitral awards or established bilaterally between an employer and an employee, unilaterally by an employer" (emphasis added). The effect of the legislation is to identify the provisions of employees' compensation plans as they existed as of February 26, 1991 and to extend their application for the time periods set out in the Public Sector Compensation Act . Once the provisions of a compensation plan are identified, those provisions then become the terms and conditions which govern the compensation of that group of employees. As emphasized by counsel for the NCC, it is significant in this regard that the focus of the legislation is on "employees" rather than employers. Section 3 delineates which "employees" are covered by the Act. Sections 5 and 6 both extend the compensation plan of "employees" and make no reference to employers. Accordingly, the fact that there was no compensation plan on February 26, 1991 which involved the NCC as an employer is irrelevant. The compensation plan which applied to the employees in question continued to apply to them once they became employed by the NCC when it acquired separate employer status on January 1, 1994. Consequently, the Public Sector Compensation Act continues to operate to freeze these terms and conditions.
In determining which matters in dispute should and could be referred to the arbitration board, the Chairperson needed to have regard to subsection 69(2) and paragraph 57(2)(a) of the Act. Given the present factual context, the Chairperson could not include the applicant's proposals dealing with compensation matters in the terms of reference, because they would have required the amendment of the Public Sector Compensation Act. Applying the proposed standard of review of correctness to this portion of the Chairperson's decision, the said decision stands.
Proposal Respecting the Job Evaluation Plan
The objectives and mandate provisions of the job evaluation proposal read as follows:
Objectives:
The committee shall select, develop or adapt a job evaluation plan which is consistent with sound classification principles and which meets the requirements of Section 11 of the Canadian Human Rights Act as well as the Equal Wages Guidelines, 1986. The plan shall be gender neutral and universal in application.
Mandate:
The committee shall jointly agree on all elements of the plan, including but not limited to:
" factors and definition
" factor degree definitions
" factor weights
" points distribution within factors
" selection and evaluation of benchmark positions
" point cut-offs and the number of levels within the plan
In my opinion, the Chairperson could not refer this proposal to the arbitration board because it deals with the subject of classification contrary to paragraph 69(3)(a) of the Act.
A similar scenario presented itself in Professional Institute of the Public Service of Canada v. Canada (Attorney General), [1988] F.C.J. No. 948 (T.D.) (QL), where the Chairman had also classified a proposal as relating to classification. Reed J. determined that the proposal in that case could be viewed from one perspective as an "equal pay for equal work" issue, but that it could also be perceived as a classification issue. Since the proposal was found sufficiently ambiguous, it was held, at page 13 (QL), that the Chairman's decision could not be characterized as an error of law: "The Chairman's characterization of the applicant's proposal is at least as reasonable as that put forward by counsel for the applicant".
The proposal in this instance is sufficiently "ambiguous" to permit Chairperson Deans' characterization. I accept the NCC's argument that the proposal refers to terms of classification when it refers to factor degree definitions, to a committee which shall evaluate job descriptions and organization charts, to the evaluation of benchmark positions, to grievances with respect to evaluation of positions, and to a complete review of the existing classification plan. These references are all indicative of a classification system.
Given the curial deference I have proposed, the applicant's argument that the Chairperson erred in law and failed to exercise his jurisdiction when he decided not to include the proposal respecting the job evaluation plan in the terms of reference must fail. The Chairperson's decision, in that regard, is reasonable.
Proposal Respecting Article 47.01
Article 47.01 states:
The Employer can engage in contracting out of services and functions performed by employees if the contracting out will not result in any loss of employment.
I agree with the NCC's submission that Article 47.01 deals with the organization of the NCC contrary to paragraph 69(3)(a) of the Act and the standards, procedures or processes governing the deployment, lay-off or termination of employment of employees contrary to paragraph 69(3)(b) of the Act.
The Alliance has relied on the Federal Court of Appeal case of P.S.A.C. v. Canada (Treasury Board), [1987] 2 F.C. 471 (hereinafter PSAC), to assert that this "contracting out" proposal does not constitute a standard respecting lay-off contrary to paragraph 69(3)(b ).
The proposal in PSAC dealt with overtime provisions, which the Federal Court of Appeal held was a proper proposal to refer to arbitration. It was held that the proposal dealt with "hours of work" in accordance with subsection 70(1) of the Act, and did not interfere with the employer's ability to organize itself contrary to section 7, which provides:
7. Nothing in this Act shall be construed to affect the right or authority of the employer to determine the organization of the Public Service and to assign duties to and classify positions therein.
It is my opinion that this case can easily be distinguished. By its very nature, an overtime provision presumes that there is sufficient work for the positions already held by current employees. There is therefore no concern for any employees to be laid off as a result of failing to obtain the overtime hours available. In contrast, a proposal preventing the contracting out of services would prevent the contracting out of functions perhaps presently performed by certain employees during regular hours of work. Such a proposal could thereby directly operate to prevent lay-offs, and hence be contrary to paragraphs 69(3)(a) and 69(3)(b).
The NCC has cited a number of conciliation board decisions wherein contracting out proposals were found, in their essence, to be proposals regarding lay-offs.2 These decisions, in my view, are sound and must be accepted.
Consequently, the Alliance's argument that the Chairperson erred in law and failed to exercise his jurisdiction when he decided not to include the proposal respecting Article 47.01 in the terms of reference must also fail. The Chairperson's decision, in that regard, is correct.
Proposal Respecting Article Y-1
This proposal deals with the sale of the NCC's business. The proposal would require that the purchaser of the NCC's business would be subject to the bargaining rights of the Alliance. The purchaser would also be bound by the terms of the collective agreement between the Alliance and the NCC. Article Y-1 reads as follows:
Y-1.1 In this Article "Business" means any work, undertaking or business or any part thereof,
"sell" in relation to a business includes the lease, transfer and other disposition of business.
Y-1.2 Where the employer sells his business, the bargaining agent for the employees employed in the business continues to be their bargaining agent.
Y-1.3 The person to whom the business is sold shall be bound by the terms of the collective agreement applicable to the employees employed in the business that is in effect on the date on which the business is sold.
I agree with the NCC's submission that this proposal with regard to successor rights could require the employer to fulfil obligations which are entirely beyond its legal capacity from both a constitutional and contractual perspective. The Alliance is certified pursuant to the Act, and the parties are negotiating toward a collective agreement under this same Act. The employer cannot negotiate a provision that the terms and conditions of these employees will continue to be governed by the Act, given that the new employer may not fall under the realm of this same Act.
Consequently, the Chairperson's ruling with respect to Article Y-1 is correct, as this proposal is contrary to section 7, subsection 69(2) and paragraphs 57(2)(a) and 69(3)(a) of the Act. The proposal interferes with the right of the NCC to organize its workforce and, if referred, would require the amendment of legislation by Parliament.
CONCLUSION
For all the above reasons, the application for judicial review is dismissed.
1 Canada (Attorney General) v. Séguin (1995), 101 F.T.R. 64 (F.C.T.D.) and Ouimet et al. v. Canada (Treasury Board) (1995), 106 F.T.R. 161 (F.C.T.D.).
2 Council of Postal Unions and the Treasury Board (April 7, 1970), Conciliation Board Terms of Reference, Board File No. 190-2-7; PSAC and the Defence Research Board (February 6, 1973), Conciliation Board Terms of Reference, Board File No. 190-5-15; and PIPS and the Treasury Board (August 16, 1988), Conciliation Board Amended Terms of Reference, Board File No. 190-2-161.