Supreme Court of Canada
National Bank of Canada v. Retail Clerks’ International Union et al., [1984] 1 S.C.R. 269
Date: 1984-05-03
National Bank of Canada Appellant;
and
Retail Clerks’ International Union Respondent;
and
Canada Labour Relations Board Respondent.
File No.: 17019.
1983: November 30, December 1; 1984: May 3.
Present: Dickson, Beetz, Estey, McIntyre, Chouinard, Lamer and Wilson JJ.
ON APPEAL FROM THE FEDERAL COURT OF APPEAL
Labour relations—Successor rights—Merger of two bank branches—Sale of business—Canada Labour Code, R.S.C. 1970, c. L-1 (am. by 1972 (Can.), c. 18, s. 1), s. 144.
Labour relations—Unfair practices—Power of remedy—No relation between offences and certain remedies—Whether the Canada Labour Relations Board exceeded its jurisdiction—Canada Labour Code, R.S.C. 1970, c. L-1, ss. 184(1)(a) [1972 (Can.), c. 18, s. 1], 184(3)(a) [1972 (Can.), c. 18, s. 1; 1977-78 (Can.), c. 27, s. 65], 189 [1972 (Can.), c. 18, s. 1; 1977-78 (Can.), c. 27, s. 68]—Canadian Charter of Rights and Freedoms, s. 2.
The National Bank of Canada, which was created by the merger of the Provincial Bank and the Canadian National Bank, as part of its reorganization program closed a unionized branch of the Provincial Bank and incorporated it in a non-unionized branch of the Canadian National Bank. Pursuant to a complaint by respondent Union, which held a certificate of certification to represent the employees of the branch which was closed, the Canada Labour Relations Board held that the integration of the two branches constituted a sale of a business within the meaning of s. 144 of the Canada Labour Code.
Further the Board also found that the Bank had taken its decision for anti-union reasons and had infringed s. 184(1)(a) and (3)(a) of the Code. To correct the situation the Board, in accordance with s. 189, made an order imposing various remedies, in particular remedy No. 6, concerning the creation by the Bank of a trust fund to promote the objectives of the Code among all its
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employees, and remedy No. 5, concerning the sending to all Bank employees by the president of a letter written by the Board, informing them of its decision and of the creation of the fund.
On appeal, the Federal Court of Appeal dismissed the Bank’s application for judicial review, holding that there had not been any excess of jurisdiction. Hence this appeal, to determine whether the Board exceeded its jurisdiction, first, by deciding that the integration of the two branches constituted a sale, and second, by ordering remedies Nos. 5 and 6.
Held: The appeal should be allowed in part.
Per curiam: The Canada Labour Relations Board did not exceed its jurisdiction by ruling that the integration of the two branches constituted a sale within the meaning of s. 144 of the Code. Under subsection (5) of that section, the Board clearly had jurisdiction to determine this question, and its interpretation did not seem to be so unreasonable that it could not be rationally supported by the relevant legislation and demanded intervention by the court upon review. The Board, however, exceeded its jurisdiction in ordering remedies Nos. 5 and 6. It was essential in connection with the power of remedy conferred by s. 189 of the Code for there to be a relation between the act alleged, its consequences and the remedy imposed. In the case at bar, there was no relation between the alleged unfair practice, its consequences and remedy No. 6. This remedy should be set aside. Remedy No. 5 should suffer the same fate, since it repeated the conclusions of remedy No. 6.
Per Beetz, Estey, McIntyre, Lamer and Wilson JJ.: The Canada Labour Relations Board had no power to impose punitive measures. Remedies Nos. 5 and 6 were measures of this type. Further, these remedies force the Bank and its president to do something and to write a letter which might have been misleading or untrue. This type of penalty was totalitarian and as such alien to the tradition of free nations like Canada.
Re Hughes Boat Works Inc. and International Union, United Automobile, Aerospace, Agricultural & Implement Workers of America (UAW) Local 1620 (1979), 102 D.L.R. (3d) 661; Canadian Union of Public Employees, Local 963 v. New, Brunswick Liquor Corporation, [1979] 2 S.C.R. 227; Service Employees’ International Union, Local No. 333 v. Nipawin District Staff Nurses Association, [1975] 1 S.C.R. 382; Re Tandy Electronics Ltd. and United Steelworkers of America (1980), 115 D.L.R. (3d) 197, applied; Teamsters Union Local 938 v. Massicotte, [1982] 1 S.C.R. 710; Westing-
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house Canada Inc. v. United Electrical, Radio and Machine Workers of America, Local 504, 80 CLLC 295; Canada Labour Relations Board v. Halifax Longshoremen’s Association; Canada Labour Relations Board v. Local 1764 of the International Longshoremen’s Association, [1983] 1 S.C.R. 245, considered; Parkhill Bedding & Furniture Ltd. v. International Molders & Foundry Workers Union of North America, Local 174 (1961), 26 D.L.R. (2d) 589, distinguished; Jarvis v. Associated Medical Services Inc., [1964] S.C.R. 497; Commission des relations de travail du Québec v. Association unie des compagnons et apprentis de l’industrie de la plomberie et tuyauterie des États-Unis et du Canada, [1969] S.C.R. 466; Attorney General of Quebec v. Labrecque, [1980] 2 S.C.R. 1057; Acklands Ltd. and Retail, Wholesale and Department Store Union, Local 580, [1976] 1 Can LRBR 71; Domkraft Ltée v. Syndicat national des travailleurs de papier façonné d’East Angus, [1980] T.T. 69; Service, Office and Retail Workers Union of Canada v. Canadian Imperial Bank of Commerce (1977), 20 di 319; R. v. Canada Labour Relations Board, Ex parte Martin, [1966] 2 O.R. 684, referred to.
APPEAL from a judgment of the Federal Court of Appeal dismissing an application for review of a decision of the Canada Labour Relations Board (1981), 42 di 352, [1982] 3 Can LRBR 1. Appeal allowed in part.
Robert Monette and John Coleman, for the appellant.
Hélène LeBel and Janet Cleveland, for the respondent the Retail Clerks’ International Union.
Michel Robert, Q.C., and Luc Martineau, for the respondent the Canada Labour Relations Board.
English version of the judgment of the Court delivered by
CHOUINARD J.—These proceedings, brought in accordance with the Canada Labour Code, R.S.C. 1970, c. L-1, followed the closing by appellant National Bank of Canada of its Maguire Street branch in Sillery and its incorporation in the Sheppard Street branch not far from the first branch.
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The National Bank of Canada (“the Bank”) was created on November 1, 1979 by the merger of the Provincial Bank and the Canadian National Bank. There followed a long process of integrating the activities of the two institutions and reorganizing their respective operations, involving inter alia the combining of central services and, at the branch level, mergers, changes in function and closures. The closing of the Maguire Street branch, formerly a branch of the Provincial Bank, was part of this reorganization. The closure of this branch and its incorporation in the Sheppard Street branch, formerly a branch of the Canadian National Bank, was the solution finally adopted after several others had been considered and even decided on, only to be then rejected. For the purposes of this appeal, however, there is no need to enter into the details of the process which led to this decision. It should be noted however that whereas respondent Union (“the Union”) was certified to represent employees at the Maguire Street branch, there was no such certification for the Sheppard Street branch.
On July 30, 1980 the employees of the Maguire Street branch were told at a meeting that their branch would be closed on the following September 12. This was in fact done on the 19th. On November 13 of the same year, the Bank sold the building in which the branch had been located.
On June 27, 1980 the Union was certified as bargaining agent for:
All employees of the employer working at its branch located at 1354 Maguire Avenue, Sillery, Quebec, excluding manager, accountant, management trainees and casuals.
On August 1, pursuant to s. 146 of the Code, the Union served on the Bank a notice to negotiate for the purpose of entering into a collective agreement.
In view of the Bank’s stated intention of closing down this branch and incorporating it in the one on Sheppard Street, the Union submitted an initial complaint to the Canada Labour Relations Board
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(“the Board”) on September 5, 1980, alleging that the Bank had failed to comply with s. 148(b) of the Code and had altered the employees’ working conditions after a notice to negotiate had been given. This complaint was dismissed by the Board on the ground that the employees had been notified of the decision to close on July 30, before the notice to negotiate was given. This decision of the Board is not at issue in this appeal.
By a letter of October 2, the Union submitted to the Board a complaint of breaches of s. 184(1)(a) and (3)(a), (b) and (c) of the Code. The Board dismissed the complaints relating to s. 184(3)(b) and (c), which are no longer at issue. However, the Board held that the Bank had infringed s. 184(1)(a) and (3)(a) and, in accordance with s. 189, it made an order imposing various remedies.
By the same letter dated October 2, 1980, the Union asked the Board to rule that the incorporation of the Maguire Street branch in the Sheppard Street branch constituted a sale of a business within the meaning of s. 144 of the Code, with the resulting consequences. On this point also, the Board upheld the Union.
The Bank then filed an application with the Federal Court of Appeal for judicial review pursuant to s. 28(1)(a) of the Federal Court Act. The Bank argued that the Board had exceeded its jurisdiction, first by deciding that the incorporation of the Maguire Street branch in the Sheppard Street branch constituted a sale within the meaning of s. 144, and second, by ordering some of the remedies imposed. This application was dismissed by the Federal Court of Appeal, which held that it was not persuaded that, in making the decision a quo, the Board had exceeded its jurisdiction.
This appeal seeks the same conclusions as the application in the Federal Court of Appeal.
Section 144 of the Canada Labour Code
That section is as follows:
144. (1) In this section,
“business” means any federal work, undertaking or business and any part thereof;
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“sell”, in relation to a business, includes the lease, transfer and other disposition of the business.
(2) Subject to subsection (3), where an employer sells his business,
(a) a trade union that is the bargaining agent for the employees employed in the business continues to be their bargaining agent;
(b) a trade union that made application for certification in respect of any employees employed in the business before the date on which the business is sold may, subject to this Part, be certified by the Board as their bargaining agent;
(c) the person to whom the business is sold is bound by any collective agreement that is, on the date on which the business is sold, applicable to the employees employed in the business; and
(d) the person to whom the business is sold becomes a party to any proceeding taken under this Part that is pending on the date on which the business was sold and that affects the employees employed in the business or their bargaining agent.
(3) Where an employer sells his business, and his employees are intermingled with employees of the employer to whom the business is sold,
(a) the Board may, on application to it by any trade union affected,
(i) determine whether the employees affected constitute one or more units appropriate for collective bargaining,
(ii) determine which trade union shall be the bargaining agent for the employees in each such unit, and
(iii) amend, to the extent the Board considers necessary, any certificate issued to a trade union or the description of a bargaining unit contained in any collective agreement;
(b) a collective agreement that affects the employees in a unit determined to be appropriate for collective bargaining pursuant to paragraph (a) that is binding on the trade union determined by the Board to be the bargaining agent for that bargaining unit continues to be binding on that trade union; and
(c) either party to a collective agreement referred to in paragraph (b) may, at any time after the sixtieth day has elapsed from the date on which the Board disposes of an application made to it under paragraph (a), apply to the Board for an order granting leave to serve on the other party a notice to bargain collectively.
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(4) Upon application being made to it pursuant to paragraph (3)(c), the Board shall take into account the extent to which and the fairness with which the provisions of the collective agreement, particularly those dealing with seniority, have been or could be applied to all the employees to whom the collective agreement is applicable.
(5) Where any question arises under this section as to whether or not a business has been sold or as to the identity of the purchaser of a business, the Board shall determine the question.
The Bank submitted, first, that there is a prerequisite to the application of s. 144, namely the presence of two distinct employers, one the predecessor and the other the successor, that this is a preliminary question and that, according to the authorities, if the Board misinterprets the Act on this question it is assuming a jurisdiction which it does not have and its decision is subject to review. See inter alia Jarvis v. Associated Medical Services Inc., [1964] S.C.R. 497; Commission des relations de travail du Québec v. Association unie des compagnons et apprentis de l’industrie de la plomberie et tuyauterie des État-Unis et du Canada, [1969] S.C.R. 466; Attorney General of Quebec v. Labrecque, [1980] 2 S.C.R. 1057 at pp. 1073-75.
The Bank relied on a decision of the Manitoba Court of Appeal, Parkhill Bedding & Furniture Ltd. v. International Molders & Foundry Workers Union of North America, Local 174 (1961), 26 D.L.R. (2d) 589, regarding the interpretation of s. 18(1)(c) of the Labour Relations Act, R.S.M. 1954, c. 132:
18. (1) A collective agreement entered into by a certified bargaining agent is, subject to and for the purposes of this Act, binding upon
…
(c) any new employer to whom passes the ownership of the business of an employer who has entered into the agreement or on whose behalf the agreement has been entered into.
In that case, the Court had to determine whether Parkhill Bedding, which had purchased most of the bankrupt’s assets from the trustee in bankruptcy, excluding however the goodwill and accounts receivable, was bound by the collective agreement
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between the bankrupt and its former employees. It was held that this was a preliminary question and that the Labour Relations Board had misinterpreted the Act in ruling that Parkhill Bedding was a new employer bound by the collective agreement. The Court of Appeal affirmed the judgment of the Court of Queen’s Bench which had set aside the decision of the Labour Relations Board.
In my opinion, however, when faced with a provision as clear as subs. (5) of s. 144, cited above, for which there is no equivalent in the Manitoba statute, no preliminary question is presented and there is no doubt that the Board had jurisdiction to determine the question: “(5) Where any question arises… as to whether or not a business has been sold… the Board shall determine the question”.
The Divisional Court of Ontario came to the same conclusion regarding s. 55(12) of the Labour Relations Act, R.S.O. 1970, c. 232, which is to the same effect as s. 144(5) of the Canada Labour Code. See Re Hughes Boat Works Inc. and International Union, United Automobile, Aerospace, Agricultural & Implement Workers of America (UAW) Local 1620 (1979), 102 D.L.R. (3d) 661.
The Bank submits, secondly, that the Board’s interpretation is patently unreasonable and thereby constitutes an excess of jurisdiction.
This rule referred to by the Bank was stated on behalf of this Court by Dickson J. in Service Employees’ International Union, Local No. 333 v. Nipawin District Staff Nurses Association, [1975] 1 S.C.R. 382 at p. 389:
A tribunal may, on the one hand, have jurisdiction in the narrow sense of authority to enter upon an inquiry but, in the course of that inquiry, do something which takes the exercise of its powers outside the protection of the privative or preclusive clause. Examples of this type of error would include acting in bad faith, basing the decision on extraneous matters, failing to take relevant factors into account, breaching the provisions of natural justice or misinterpreting provisions of the Act so as to embark on an inquiry or answer a question not remitted to it. If, on the other hand, a proper question is submit-
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ted to the tribunal, that is to say, one within its jurisdiction, and if it answers that question without any errors of the nature of those to which I have alluded, then it is entitled to answer the question rightly or wrongly and that decision will not be subject to review by the Courts.
Applying this rule in Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corporation, [1979] 2 S.C.R. 227, Dickson J. put the question 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?
In a judgment rendered in 1980, Re Tandy Electronics Ltd. and United Steelworkers of America (1980), 115 D.L.R. (3d) 197, Cory J., as he then was, said on behalf of the Divisional Court at p. 210:
No matter what is the particular wording used in the decisions, the message is clear—a cautious approach must be taken by the Courts when considering whether a tribunal has lost jurisdiction as a result of something it did during the course of a hearing. The Board may well make a mistake. Unless that mistake is patently unreasonable, or so fundamentally erroneous, that it cries aloud for intervention by the reviewing Court, it should not constitute a ground for depriving the Board of the protection of the privative clause.
In the case at bar, the Board stated the basis for its decision as follows.
First, the Board stated the purpose of the legislation:
Section 144 was enacted in order to protect and ensure the permanence of bargaining rights.
The Board then noted that, in earlier cases, it had identified two criteria for determining what constitutes a sale within the meaning of s. 144:
…first, the new employer must be conducting activities to which bargaining rights are attached and, second, these activities must still be exercised within the same context. In this instance, the unionized activities of the Maguire Street branch consisted of work performed by
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tellers, stenographers and intermediary clerks within the context of the operations of a bank branch. In our opinion, there is no doubt that after the Maguire Street branch was closed, the same activities exercised in the same context were continued without any interruption at the Sheppard Street branch. Moreover, a large part of the instant decision has dealt with the way in which the accounts of clients at the Maguire Street branch were transferred to the Sheppard Street branch.
The Board went on:
The employer claims, however, that there was no sale pursuant to the meaning of the definition in subsection 144(1) since two branches of the same Bank are involved here. As we mentioned above, we believe that the legislature enacted Section 144 of the Code because it wanted to preserve the obligatory nature of bargaining rights, among other things, certification and everything flowing therefrom, when there was any change in the identity of the employer and/or employees not affecting the context of the activities and, with even greater reason, when activities were reorganized internally or transferred within the same employer’s structures. It must be remembered that bargaining rights are not attached to the person of the employer or the employees but to the activities exercised in a given context. The term “transfer”, which is used in subsection 144(1), seems in fact to cover this hypothesis. In effect, we find it inconceivable that an employer conducting the same type of activities in two establishments near each other, one of which is covered by a certification certificate and the other of which is not, could claim that it is not required to respect this certification simply because it decided to amalgamate the activities of the unionized establishment with those of the non‑unionized establishment. An employer certainly has the right to amalgamate for reasons of efficiency and profitability, but such an amalgamation should not penalize unionized employees when there is a continuum of work performed by the said employees within the same context. Accordingly, we find that the transfer of activities from the Maguire Street branch to the Sheppard Street branch constitutes a sale of business pursuant to Section 144, and we declare that on September 19, 1980, the Bank was bound by the certification certificate, under subsection 144(2), and is also bound by the procedures initiated by the Union, in particular the notice to bargain.
In Acklands Ltd. and Retail, Wholesale and Department Store Union, Local 580, [1976] 1 Can LRBR 71, the British Columbia Labour Relations
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Board held that for there to be a sale, lease, transfer or other disposition of a business within the meaning of s. 53 of the British Columbia Labour Code, there had to be two distinct legal entities and the provisions in question could not apply to a transfer within the same business.
On the other hand, in Domkraft Ltée v. Syndicat national des travailleurs de papier façonné d’East Angus, [1980] T.T. 69, which concerned s. 45 of the Quebec Labour Code, R.S.Q. 1977, c. C-27, which is the counterpart of s. 144 of the Canada Labour Code, Robert Auclair J. wrote that where s. 45 is concerned, the concept of an employer [TRANSLATION] “must be understood in a sense related to the concept of a business … which enables that section to be effective in respect of the bargaining unit”. He concluded that Domkraft Ltée in Windsor was a separate employer from Domkraft Ltée in East Angus, that the first was a third party to the second, and that it was therefore a new employer within the meaning of para. 2 of s. 45 of the Labour Code.
In Re Hughes Boat Works Inc., supra, the Ontario Divisional Court held that the Board had not exceeded its jurisdiction in finding that there had been a sale by the receiver of the business of an insolvent employer, one year after the latter had been terminated. Reid J. wrote, for the Court, at pp. 672-73:
Was the interpretation made of s. 55 by the Ontario Labour Relations Board unreasonable? There were two factors to which the Board made special reference. The first was the expanded meaning of the word “sale”. “Sale” is used in the statute in a special sense, a much wider sense than it is ordinarily accorded. In ordinary parlance a lease is not a sale. As used in s. 55, however, sale includes lease. The inclusion of a meaning that is in a sense the very opposite to the ordinary meaning of the word “sale” suggests to me that the Legislature intended a very broad meaning indeed for the word “sale” in s. 55. This makes irrelevant a good many of the decisions relied on by applicant in which Courts were called on to interpret the word “sale” in other contexts.
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The second factor was the practical effect of allowing more weight to a lapse of business activity prior to a sale than to other relevant considerations.
It must be a matter of real significance to a tribunal whether a possible interpretation leads to practical or impractical consequences in the field of activity it is called on to supervise. I do not suggest that the consequence should be permitted to confute the clear meaning of a statute. Where, however, one of two possible meanings leads to consequences that a tribunal sees in the light of its experience and expertise as impractical, I see no reason why the tribunal should not reject it. Nor do I think that in the absence of a compelling body of law the Court holds a warrant for forcing it upon them.
Reid J. added a little further on:
Based, therefore, on the foregoing considerations, it seems to me that our function is not to decide whether the tribunal’s interpretation is correct or incorrect in the sense that we agree with it or disagree with it. We are, in my opinion, to consider whether the interpretation was or was not patently unreasonable. In my opinion the interpretation placed upon the term “sale” can be reconciled with the statute. It is one that in the Board’s opinion avoids an impractical result. It is not at odds with the law or common sense. I cannot find it to be patently unreasonable. The question whether the Board has erred so seriously as to require intervention must, therefore, be answered in the negative.
In the case at bar, the Federal Court of Appeal did not find the Board’s interpretation patently unreasonable.
I concur in that view.
Bearing in mind the purpose of s. 144, to protect and ensure the permanence of bargaining rights; bearing in mind the definition of the word “business” in s. 144 of the Code, according to which “business” applies also to any part of a business; bearing in mind the definition of the word “sell”, which includes “the lease, transfer and other disposition of the business”; bearing in mind the policy of the Board, which since its decision of June 10, 1977 in Service, Office and Retail Workers Union of Canada v. Canadian Imperial Bank of Commerce (1977), 20 di 319, considers that in
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the field of banking a branch constitutes the best unit for certification purposes, that a branch is the natural unit for employees because it is the place where they work on a regular daily basis under the supervision of the branch manager or other supervisory personnel, who also work in the branch; bearing in mind the concept that certification attaches not to the employer but to the business; and finally, bearing in mind the fact that the activities of the Sheppard Street branch are the same as those of the Maguire Street branch, and that the latter’s activities will continue at the Sheppard Street branch and in the same context, the Board’s interpretation does not seem to be patently unreasonable, “so patently unreasonable that its construction cannot be rationally supported by the relevant legislation and demands intervention by the court upon review”.
The first consequence of this decision of the Board is that, as the latter indicates in the passage cited above, as a result of s. 144(2) the Bank is bound at its Sheppard Street branch by the certificate and the proceedings taken, in particular by the notice to bargain. The Union, of course, continues to exist.
In addition the Board, applying s. 144(3)(a)(iii), amended the certificate to extend it to all employees at the Sheppard Street branch and to form a unit consisting of seventeen (17) employees instead of the five (5) it consisted of at the Maguire Street branch. The bargaining unit was described as follows:
all employees of the employer working at its branch located at 1623 Sheppard Street, Sillery, Quebec, excluding manager, accountant, management trainees and casuals.
Breaches of s. 184(1)(a) and (3)(a) and the remedies ordered under s. 189 of the Code
The relevant portions of s. 184 are the following:
184. (1) No employer and no person acting on behalf of an employer shall
(a) participate in or interfere with the formation or administration of a trade union or the representation of employees by a trade union;
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…
(3) No employer and no person acting on behalf of an employer shall
(a) refuse to employ or to continue to employ or suspend, transfer, lay off or otherwise discriminate against any person in regard to employment, pay or any other term or condition of employment or intimidate, threaten or otherwise discipline any person, because the person
(i) is or proposes to become, or seeks to induce any other person to become, a member, officer or representative of a trade union or participates in the promotion, formation or administration of a trade union,
(ii) has been expelled or suspended from membership in a trade union for a reason other than a failure to pay the periodic dues, assessments and initiation fees uniformly required to be paid by all members of the trade union as a condition of acquiring or retaining membership in the trade union,
(iii) has testified or otherwise participated or may testify or otherwise participate in a proceeding under this Part,
(iv) has made or is about to make a disclosure that he may be required to make in a proceeding under this Part,
(v) has made an application or filed a complaint under this Part, or
(vi) has participated in a strike that is not prohibited by this Part or exercised any right under this Part;
The Board held that the decision to close the Maguire Street branch and merge it with the Sheppard Street branch was taken for anti-union reasons, and that this decision was designed to eliminate the Union. It was an interference with the representation of employees by a trade union: s. 184(1)(a). It also constituted intimidating or threatening employees because of their union activities: s. 184(3)(a).
The Bank no longer disputes that it committed these offences. It admits them. It was for this reason not necessary, in the statement of facts at the beginning of this opinion, to go into the details of the Bank’s actions and the process which led to the closure of the Maguire Street branch.
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The Bank’s challenge is confined to the remedies ordered by the Board, and in particular to two of the six remedies ordered. The imposition of remedies is authorized by s. 189 of the Code. For the purposes of the appeal, it will suffice to reproduce the preamble and the final paragraph:
189. Where, under section 188, the Board determines that a party to a complaint has failed to comply with subsection 124(4) or section 136.1, 148, 161.1, 184, 185 or 186, the Board may, by order, require the party to comply with that subsection or section and may
…
and, for the purpose of ensuring the fulfilment of the objectives of this Part, the Board may, in respect of any failure to comply with any provision to which this section applies and in addition to or in lieu of any other order that the Board is authorized to make under this section, by order, require an employer or a trade union to do or refrain from doing any thing that it is equitable to require the employer or trade union to do or refrain from doing in order to remedy or counteract any consequence of such failure to comply that is adverse to the fulfilment of those objectives.
Relying on s. 189, the Board directed the Bank:
1. to provide the union immediately with an updated list of the names, addresses and telephone numbers of all the employees in the bargaining unit, to provide the same information on the arrival of any new employee and to update the said lists as changes are made;
2. to allow the union to hold meetings with the members of the bargaining unit during working hours, without any loss of salary or other benefits; the Union may choose to hold these meetings, which shall last a maximum of one hour each, on branch premises in the staff room or on premises outside the branch but, in any case, without the presence of the employer’s representatives; they shall be held before or after the hours when the branch is open to clients, at the Union’s preference; the Union shall give the employer twenty-four hours’ advance notice of the meeting; however, the Union shall hold these meetings no more than once per week during the first two months following publication of the instant decision and then once per month until one of the following occurs: the conclusion of a collective agreement, a legal strike
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or lockout or the revocation of the certification certificate;
3. allow a Union representative free access to the branch for the purposes of installing a bulletin board in the staff room and posting union literature and notices.
…
4. to pay the Union all the reasonable costs it will incur in organizing and holding the meetings mentioned in No. 2, and the costs of installing the bulletin board mentioned in No. 3.
…
5. to send, within thirty (30) days of the instant decision, a letter bearing the Bank’s letterhead and reproducing the text in Appendix A of the instant decision, under the signature of its president and chief executive officer, to all its employees including management personnel at their home addresses. No addition to or deletion from the said text shall be made, nor shall any other document be mailed in the same envelope. The Board will provide the employer with an English translation of Appendix A in the near future.
…
6. to deposit a sum of $48,000 per year in a trust fund for the next three years as of the date of the instant decision, this representing a total amount of $144,000 in addition to any interest accruing thereto. This fund shall be administered jointly by the Union and the employer, which will be its trustees, and it shall be used to further the objectives of the Code, as set out in the preamble to Part V, among Bank employees who do not perform management functions or are not employed in a confidential capacity in matters relating to industrial relations. Each amount of $48,000 shall be used in the year following its deposit. The employer and the Union have two months as of the date of the instant decision to present to the Board for its approval a joint plan setting out the terms and conditions for the administration of the trust fund and the use of the funds.
The Bank is not challenging the first four remedies. However, it argues that the Board exceeded its jurisdiction in ordering remedies Nos. 5 and 6. I will discuss these remedies in the order in which
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the Bank dealt with them, that is in reverse numerical order.
As to remedy No. 6, the creation of a $144,000 trust fund to promote the objectives of the Code among all its employees, the Bank submitted that this order is in no way related to the power of remedy conferred on the Board by the Code and constitutes an excess of jurisdiction. It submitted that this order was prompted rather by a mistaken desire to punish and in fact constitutes a fine. The order is wrongful in that it is designed to apply to thousands of people who have never heard of the facts involved in this case and who have never been concerned with it. Finally, the Bank submitted that this remedy is unfair and is in no way connected with a wrong, since it uses a purely arbitrary figure to “allegedly” promote the objectives of the Code among persons to whom the decision has never applied.
The Board’s reasons regarding the remedies occupy nearly 40 pages which cannot be readily summarized. The reasons are published in (1981), 42 di 352. I will cite only the passages which appear to me to be most relevant and which lead to those relating more specifically to the remedies at issue.
The Board observed:
In determining that the Union is the bargaining agent for the Sheppard Street branch, the Board is very conscious of the fact that the said Union does not have the support of the employees in the unit—support which is essential if it is to bargain effectively—and that it will, in addition, have to convince the said employees to become union members. The extent of the harm that the employer caused by interfering in the Union’s representation of the employees is even more evident with respect to this aspect. We must attempt to assist the Union in playing its role by applying the remedies set out in Part IX of this decision. These remedies flow from the violations of paragraphs 184(1)(a) and 184(3)(a) and, although it is by no means certain, they may assist the Union in obtaining the employees’ support and reaching a collective agreement.
Although it is not conclusive in the case at bar, the parties told the Court that at the time of the
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hearing a collective agreement was in force at the Sheppard Street branch.
Analysing the repercussions of the offences from a practical as well as a psychological point of view, the Board wrote:
As far as labour relations are concerned, these violations have had serious repercussions from a practical point of view as well as in terms of psychological effects. From the practical point of view, the employees were unable to exercise the basic options that they had chosen. As for the Union, the closure has dealt it an almost fatal blow as, although its certificate now applies to the activities of the Sheppard Street branch, it is far from being ensured of support. The members of the bargaining unit have had their legitimate expectations frustrated. From the point of view of labour relations, one of the most negative aspects of this matter is that for almost a whole year all the rights that the employees had acquired under the Code have been suspended because they were transferred to a branch in which the majority had not endorsed a union (except for Mrs. Beauchamp who works at a unionized branch). The rights to participate in the activities of a union, to be represented by a union and to collectively exercise the other rights conferred by the Code have been denied to the employees for a period of time. They have been waiting for the Board’s decision in order to be able to exercise the said rights again as the employer contested the claim that there had been a sale of business and, consequently, a transfer of the certification certificate. Owing to this unlawful closure, the employees have been deprived of the effects flowing from the right to collective bargaining. They have been unable to benefit from a collective agreement when other employees who exercised the same options at almost the same time are now covered by collective agreements. To be more specific, in late March 1981, the Bank and the Union concluded collective agreements for six other branches. When the Maguire Street branch was closed, the said agreements as well as the one for the latter branch were being negotiated. It is not difficult to infer that, if the Maguire Street branch had not been closed, the employees working therein would also be covered by a collective agreement now. From the point of view of psychological effects, the Bank’s unlawful actions have weighty consequences both for the employees involved as well as for all the Bank’s other employees. Among these effects, the dissuasive nature of the Bank’s actions is no doubt the most apparent: the fear felt by all the unionized employees, those who would have like [sic] to join a union or those who will join a union at this Bank that their branch will “disappear” because they exercised or
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would exercise the right of association as did the employees at the Maguire Street branch. Considering the remedies that the Board is authorized to prescribe under the Code, how can the above-mentioned unfavourable consequences be remedied and counteracted?
The Board considered that by closing the Maguire Street branch the Bank realized a saving of $48,000 a year. It wrote:
By unlawfully closing the Maguire Street branch, the Bank will save $48,000 per year, that is $37,000 in fixed costs associated with the Maguire Street building and $11,000 in salaries (eighteen instead of nineteen employees are needed when the Sheppard Street and Maguire Street branches are combined).
This is the amount which the Board ordered the Bank to pay into a trust fund for a period of three years. As it is the principle of a fund itself which is at issue, and not the quantum or duration of the payments, I do not feel it necessary to consider how the Board arrived at this three-year period.
Finally, the following is the passage immediately preceding remedy No. 6, reproduced above:
To eliminate the dissuasive effect of the Bank’s unlawful action, it is important that the Bank not gain or appear to gain from the said unlawful action. To counteract this effect, while obliging the Bank to recognize its employees’ right to have access to the free collective bargaining system, as intended by the Parliament of Canada, through a concrete, positive gesture, the Board orders the employer:
This Court must consider whether this measure constitutes a remedy within the meaning of s. 189.
The Board is authorized to order an employer to do or refrain from doing anything “in order to remedy or counteract any consequence of such failure to comply that is adverse to the fulfilment of [the Code] objectives”.
The objectives cited by the Board and contained in the preamble of the Code are:
Whereas there is a long tradition in Canada of labour legislation and policy designed for the promotion of the common well-being through the encouragement of free collective bargaining and the constructive settlement of disputes;
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And Whereas Canadian workers, trade unions and employers recognize and support freedom of association and free collective bargaining as the bases of effective industrial relations for the determination of good working conditions and sound labour‑management relations;
…
And Whereas the Parliament of Canada desires to continue and extend its support to labour and management in their co-operative efforts to develop good relations and constructive collective bargaining practices, and deems the development of good industrial relations to be in the best interests of Canada in ensuring a just share of the fruits of progress to all;
The caution which the courts must exercise whenever the jurisdiction of an administrative tribunal is questioned has been repeatedly emphasized. The Court was referred to the following passage from Laskin C.J., then a judge of the Ontario Court of Appeal, in R. v. Canada Labour Relations Board, Ex parte Martin, [1966] 2 O.R. 684 at p. 690:
I believe that a Court must be wary not to translate into a question of jurisdiction its objections to the manner in which the Board has exercised its powers. We are dealing with statutory tribunals for whose constitution and for whose endowment of powers the Legislature is responsible; and the statutory prescriptions are no less the law of the land than is the common law which has been, in many such instances, either set aside completely or deflected.
Similarly, in Teamsters Union Local 938 v. Massicotte, [1982] 1 S.C.R. 710, Laskin C.J. wrote for the Court, at p. 719:
Essentially, this Court has admonished that there must be no failure of natural justice (and there was none here) and that the Board should address itself to an issue arising under the legislation which it is charged to administer. If it has done this (as the Federal Court of Appeal held and, in my opinion, rightly so) there can be no jurisdictional infirmity when the Board is protected in its determinations by a privative clause.
The fact remains that a remedy ordered pursuant to s. 189 must be one authorized by that section. In my view, it is essential for there to be a relation between the unfair practice, its consequences and the remedy.
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In Re Tandy Electronics Ltd., supra, Cory J. wrote for the Divisional Court, at p. 215:
So long as the award of the Board is compensatory and not punitive; so long as it flows from the scope, intent, and provisions of the Act itself, then the award of damages is within the jurisdiction of the Board. The mere fact that the award of damages is novel, that the remedy is innovative, should not be a reason for finding it unreasonable.
In that case, after finding that the employer had failed to bargain in good faith and had in many ways impeded the progress of negotiations, in addition to various remedies seeking to correct the situation, the Board had inter alia ordered the employer to pay the union as damages all costs incurred by the latter for the purpose of negotiations up to the date of the Board’s decision, and all extraordinary costs of organizing bargaining units both of part-time and of full-time employees, and to pay all employees in the bargaining unit all monetary losses incurred as a result of the fact that a collective agreement was not negotiated earlier. It is this part of the order regarding damages that is referred to by Cory J. in the above-cited passage.
In Westinghouse Canada Inc. v. United Electrical, Radio and Machine Workers of America, Local 504, 80 CLLC 295, an employer had been found guilty of unfair practices as a result of its decision to move its plant, in part for anti-union reasons. The Board ordered the employer not only to offer employees the option of employment in the new factory, but also to facilitate access by the union to employees in the new plant and to reimburse its reorganization expenses. At page 299, it was held:
It is agreed that the order must be within the scope and intent of the Act and must be compensatory and not punitive in nature.
And a little further on:
It seems to us that the Board was attempting, having found the move to Alliston to be in part motivated by anti-union animus, to put the employees and the union
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as much as possible in the same position as if the move had not been made or, as submitted by counsel for the Board, to restore the status quo.
In Canada Labour Relations Board v. Halifax Longshoremen’s Association; Canada Labour Relations Board v. Local 1764 of the International Longshoremen’s Association, [1983] 1 S.C.R. 245, a complaint had been made under s. 161.1 of the Code against two unions who had failed to establish referral rules for hiring halls and who refused to admit certain individuals as members of the union or card men. This considerably reduced their chances of obtaining work, in addition to depriving them of the fringe benefits enjoyed by members and of the right to participate in union affairs. In addition to ordering that rules be adopted for administration of the hiring hall, including rules regarding the admission of members and the issuing of cards, the Canada Labour Relations Board ordered that three of the complainants be admitted as members and that a card be issued to the fourth. This part of the orders was set aside by the Federal Court of Appeal, but restored by this Court.
In the course of his reasons on behalf of the Court, Laskin C.J. wrote at p. 253:
In determining what remedy to prescribe for the breach of s. 161.1, the Board had to be concerned not only to rein in the two unions and to require them to conform to the statutory directions, but also to realize the importance of benefiting the complainants who had courageously acted in the interest of all non-union employees and would-be employees. I agree with the Board that it would not be enough in a case of this kind simply to leave the complainants under the cure of a proper job referral system. The Board thus invoked the very wide powers conferred upon it under s. 189 to require the unions “to do or refrain from doing anything that it is equitable to require (them) to do or refrain from doing in order to remedy or counteract any consequence of such failure to comply that is adverse to the fulfilment of (the) objectives (of s. 161.1)”.
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At page 256, the Chief Justice wrote:
It is rarely a simple matter to draw a line between a lawful and unlawful exercise of power by a statutory tribunal, however ample its authority, when there are conflicting considerations addressed to the exercise of power. This Court has, over quite a number of years, thought it more consonant with the legislative objectives involved in a case such as this to be more rather than less deferential to the discharge of difficult tasks by statutory tribunals like the board.
Earlier, however, he noted (at p. 255):
At the same time, equitable and consequential considerations are not to be so remote from reparation of an established breach as to exceed any rational parameters.
In Massicotte, supra, a complaint was made that a union had failed to represent a part-time employee by refusing to handle his dismissal grievance. After finding that the employee was part of a bargaining unit covered by the collective agreement, the Canada Labour Relations Board authorized him to undertake arbitration proceedings at the Union’s expense. Laskin C.J. wrote for the Court, at p. 719:
However, the Board’s wide remedial powers under s. 189, as amended by 1977-78 (Can.), c. 27, s. 68, where it has found a breach of s. 136.1 in the duty of a Union’s duty of fair representation, entitled it to permit Massicotte to participate directly in the arbitration through nomination of an arbitrator.
In each of the foregoing cases a relationship can be seen between the act alleged, its consequences and the thing ordered as a means of remedying it. Thus, for example, in Massicotte the Board authorized the employee to undertake personally the handling of his grievance, which the Union refused to handle. In Halifax Longshoremen s Association the unions’ conduct had the effect of depriving the complainants of work. Ordering that they should be admitted as members or issued cards would have the effect of increasing their chances of getting work. The connection between the offences and the remedies was equally apparent in Re Tandy Electronics Ltd. and in Westing-house Canada Inc.
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In the case at bar, however, and I say so with respect, this relationship between the alleged unfair practice and its consequences on the one hand and remedy No. 6 on the other is in my opinion absent.
The order that there had been a sale within the meaning of s. 144 of the Code guaranteed the continuance of the certificate, which the Board extended to all employees in the new work location, the Sheppard Street branch.
Remedies Nos. 1 to 4, which were not disputed, are designed to ensure that the Union would be firmly established at the new branch.
However, remedy No. 6, regarding the creation of a trust fund to promote the objectives of the Code among other employees of the Bank, which in my view means promoting the unionization of those other employees, is not something intended to remedy or counteract the consequences harmful to realization of those objectives that may result from closure of the Maguire Street branch and its incorporation in the Sheppard Street branch. The fact that a large number of the Bank’s other employees are not unionized is not a consequence of closure of the Maguire Street branch, where the Union continued to exist and had its certificate extended. Thus, I consider that this remedy should • be set aside.
In accordance with a practice followed by a number of labour relations boards, including the Board, the latter ordered in remedy No. 5 that a letter signed by the president and chief executive officer of the Bank be sent to all employees, including management personnel.
The Board wrote:
The public nature of the instant decision and its broad distribution throughout Canada can only give the employer’s unlawful action greater publicity.
And a little further on:
Even an influential banking institution like the employer must understand and accept that it is not above the law and that, in its capacity as an employer as well as an important socio-economic factor in the community, it must give full effect to the following passages in the preamble to the Code:
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The passages in question in the preamble to the Code have been reproduced above.
The Board further wrote:
The facts of the instant case are unusual, in our opinion, even extraordinary. The employer, a powerful financial institution adopted, without any business reasons, the most drastic and most odious method possible to deny its employees the right to bargain, namely that of closing up shop in order to eliminate the problem at its source. The message given to Bank employees likely to join a union is rather chilling. “If you exercise this fundamental right, which is declared to be to the advantage of Canada, we will give you no quarter”.
Finally, the Board explained why it felt it was important for the letter to be signed by the president and chief executive officer of the Bank:
We should also take into account the important fact that a senior vice-president and the director of labour relations, participated in the decision to close the branch in order to get rid of the Union. In view of such an example, how can we expect other management personnel in this institution to respect the fundamental right of their employees? How can we make them accept that their employees’ decision to join a union constitutes a fundamental right that they must respect? For any assurance to this effect to be credible, it must be given by a hierarchical authority higher than the senior vice-president.
The letter which the Bank was ordered to send was written by the Board, which stated: “No addition to or deletion from the said text shall be made, nor shall any other document be mailed in the same envelope”. It reads as follows:
Dear employee,
In a decision rendered on September 15, 1981, the Canada Labour Relations Board determined that the National Bank of Canada violated the provisions of Sections 184(1)(a) and 184(3)(a) of the Canada Labour Code by permanently shutting down its Maguire Street Branch in Quebec City. The Board found that the Bank’s decision, taken by certain members of its management personnel, was not based on business considerations but was aimed rather at denying the employees of this branch the fundamental right to bargain collectively.
In order to remedy the dissuasive effects of this action, it is paramount that for the benefit of all management and staff I clarify, in my capacity as Chairman
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and Chief Executive Officer, the position of the National Bank of Canada with respect to our employees’ wish to participate in the system of free collective bargaining.
When it adopted Part V of the Canada Labour Code, the Canadian Parliament clearly stated its intention of encouraging access to free collective bargaining and wished to underline that:
“…Canadian workers, trade unions and employers recognize and support freedom of association and free collective bargaining as the bases of effective industrial relations for the determination of good working conditions and sound labour‑management relations; …” (excerpt from the preamble of the Code)
Section 110(1) is the resulting principle of this statement:
“110. (1) Every employee is free to join the trade union of his choice and to participate in its activities” (…)
It is a normal expectation that as long as Parliament does not revoke this basic right, it may be freely exercised without restraint pursuant to the Code by all our employees wishing to avail themselves of this right. All management personnel of this Bank, regardless of their hierarchical level, have the responsibility of respecting the choice of those employees who opt for free collective bargaining.
We intend to deposit the sum of $144,000.00 in a fund over the next three years as a concrete manifestation of our commitment to this principle. The fund will be jointly administered by the Bank and the Retail Clerks’ International Union and will be used to further the objectives of the Canada Labour Code as they are stated in the preamble of Part V of the said Code.
Yours truly,
Chairman and Chief Executive Officer
The Bank submitted that this was in actual fact a, humiliating letter, that this order is unreasonable and vexatious and that the Board’s decision was intended to be not compensatory but punitive, exemplary and humiliating, which constitutes an excess of its powers. The Bank further submitted that the letter repeats the conclusions of remedy No. 6 regarding the creation of the trust fund, which should be set aside.
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In my view, this last ground suffices for remedy No. 5 to be likewise set aside. The announcement of the creation of this fund in this letter is at the very least a key feature of the letter. Since remedy No. 6 regarding the fund should be set aside, the Court should also set aside remedy No. 5, regarding the letter which puts emphasis on the fund.
For these reasons, I would allow the appeal in part, reverse the decision of the Federal Court of Appeal and set aside remedies Nos. 5 and 6 contained in the decision of the Canada Labour Relations Board dated September 15, 1981.
As no party requested costs, no award on that head will be made.
English version of the additional reasons of Beetz, Estey, McIntyre, Lamer and Wilson JJ. delivered by
BEETZ J.—I have had the benefit of reading the opinion of my brother Chouinard, and I concur in his findings and reasons.
Like him, I consider that remedy No. 6 is not a true remedy; but I also think that, like remedy No. 5, it is clearly punitive in nature. It was acknowledged by all counsel at the hearing that the Canada Labour Relations Board has no power to impose punitive measures.
Finally, the letter attached to remedy No. 5 does not mention that, like the creation of the fund, it was imposed by the Board, and the person signing it cannot disclose this coercion without infringing the order which prohibits any alteration of the text or the addition of any other document. The creation of the fund and the letter are thus open to the interpretation that they result from an initiative taken by the National Bank of Canada, and reflect the views and sentiments of the Bank and its president, in particular their approval of the Canada Labour Code and of the objectives set forth in the preamble to Part V of that Code, which the fund is designed to promote.
There is nothing to show that such were in fact their views and sentiments. However admirable the
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objectives and provisions of the Code may be, no one is obliged to approve of them: anyone may criticize them, like any other statute, and seek to have them amended or repealed, though complying with them so long as they are in effect.
Remedies Nos. 5 and 6 thus force the Bank and its president to do something, and to write a letter, which may be misleading or untrue.
This type of penalty is totalitarian and as such alien to the tradition of free nations like Canada, even for the repression of the most serious crimes. I cannot be persuaded that the Parliament of Canada intended to confer on the Canada Labour Relations Board the power to impose such extreme measures, even assuming that it could confer such a power bearing in mind the Canadian Charter of Rights and Freedoms, which guarantees freedom of thought, belief, opinion and expression. These freedoms guarantee to every person the right to express the opinions he may have: a fortiori they must prohibit compelling anyone to utter opinions that are not his own.
Appeal allowed in part.
Solicitors for the appellant: Ogilvy, Renault, Montreal.
Solicitors for the respondent the Retail Clerks’ International Union: Rivest, Castiglio, Castiglio, LeBel & Schmidt, Montreal.
Solicitors for the respondent the Canada Labour Relations Board: Robert, Dansereau & Associés, Montreal.