Supreme Court of Canada
Ontario Nurses’ Association v. Haldimand-Norfolk Health Unit, [1983] 2 S.C.R. 6
Date: 1983-09-27
Ontario Nurses’ Association Appellant;
and
Haldimand-Norfolk Regional Health Unit Respondent;
and
Dr. D.J. Baum, C.G. Riggs, Esq., and William Walsh, Esq.
and between
Ontario Nurses’ Association Appellant;
and
Perth District Health Unit Respondent;
and
M.G. Picher, Esq., John C. Murray, Esq., and William Walsh, Esq.
File No.: 16486.
1982: May 31; 1983: September 27.
Present: Ritchie, Dickson, Estey, McIntyre, Chouinard, Lamer and Wilson JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.
Labour law—Collective agreement—Bridging provision—Interest arbitration clause—Whether or not Arbitration Board had jurisdiction to hear issue—Whether or not Arbitration Board had right to insert interest arbitration clause in renewal agreement—The Labour Relations Act, R.S.O. 1970, c. 232, ss. 34c, 70 (R.S.O.1980, c. 228, ss. 3, 8(1)(2), 79).
These appeals and cross-appeals arose under separate proceedings brought in respect of similar collective agreements. Each agreement contained a longstanding clause providing for the resolution of any differences not resolved by negotiation for new contract, assuming the notice provisions were met. (In the Perth agreement, the clause had been included by the arbitration board that had determined the terms of the contract.) The existing agreement was to continue until such time as the arbitration board altered it.
Each appellant, after negotiations proved unsuccessful and conciliation either unavailable or unworkable, invoked the interest arbitration clause. Both arbitration
[Page 7]
boards issued interim awards finding jurisdiction to proceed on the ground that s. 70 of The Labour Relations Act had preserved the right to invoke the clause. Each final award prescribed a collective agreement with an interest arbitration clause identical to the one included in the previous expired contract. Each employer’s nominee dissented and each respondent sought judicial review of its respective award. The Divisional Court quashed both the interim and final awards in the Haldimand case but the Court of Appeal restored the interim award finding the board’s jurisdiction to hear the interest arbitration. In the Perth proceedings, the Divisional Court upheld both the interim and final awards, but the Court of Appeal again decided that the Arbitration Board had no authority under the contract to insert the interest arbitration clause in the new contract. At issue, then, was the authority of the Arbitration Board to insert the interest arbitration clause in the renewal agreement and the right of the Arbitration Board to hear the issue.
Held: The appeals should be allowed and the cross-appeals dismissed.
The arbitration boards had jurisdiction to hear the interest arbitration. The articles providing for interest arbitration prescribed no time limit, expressly or impliedly, for the giving of notice for interest arbitration. While the articles would normally die with the expiry of the agreements with nothing more in law or in the contracts, they were extended here by the terms of The Labour Relations Act. Section 70(1), which provided a mechanism for preserving the right to arbitrate the renewal contract was properly invoked here. The employer and the trade union both had the right to invoke interest arbitration when the notices were served and this right needed only exist at the time of the notice to arbitrate and not when the award was handed down.
The interest arbitration clause included in a previous contract could be properly included in the award. Nothing required any subsequent board acting under the new collective agreement to reimpose those clauses or suggested a perpetual agreement to mandatorily arbitrate a succeeding collective agreement. The interpretation made by the two Boards on the meaning of the interest arbitration clauses was not only reasonable but also correct in law. It therefore was not necessary to decide if the question before the Board was one of law or of
[Page 8]
interpretation involving an incidental issue of law. It was also not necessary to examine the standards of judicial review applicable on statutory tribunals for the actions of the consensual boards met the most urgent of the tests applicable.
Section 34c of The Labour Relations Act did not limit recourse to interest arbitration.
Bradburn v. Wentworth Arms Hotel Limited, [1979] 1 S.C.R. 846; Re Grey-Owen Sound Health Unit and Ontario Nurses’ Association (1979), 24 O.R. (2d) 510, considered; Re York Regional Board of Health and Ontario Nurses’ Association (1978), 18 L.A.C. (2d) 255; Re International Nickel Company of Canada Limited and Rivando, [1956] O.R. 379; Port Arthur Shipbuilding Company v. Arthurs, [1969] S.C.R. 85; McLeod v. Egan, [1975] 1 S.C.R. 517; Canadian Union of Public Employees Local 963 v. New Brunswick Liquor Corporation, [1979] 2 S.C.R. 227; Volvo Canada Ltd. v. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (U.A.W.), Local 720, [1980] 1 S.C.R. 178, referred to.
APPEALS and CROSS-APPEALS from a judgment of the Ontario Court of Appeal (1981), 120 D.L.R. (3d) 101, 31 O.R. 730, allowing appeals from two judgments of the Divisional Court, granting an application for judicial review and quashing the award of an interest arbitration board in one case, and dismissing an application for judicial review of the arbitration award in the other. Appeals allowed and cross-appeals dismissed.
George D. Finlayson, Q.C., and D.F. Hersey, for the appellant.
Michael Gordon and Thomas A. Stephanik, for the respondents.
The judgment of the Court was delivered by
ESTEY J.—These two appeals and the two included cross-appeals raise but two principal issues:
[Page 9]
a) the authority of a board of arbitration, established under a collective agreement which includes a right in either party to invoke an interest arbitration to establish a renewal agreement, to insert in the renewal agreement an interest arbitration clause; and,
b) the right of the arbitration board, in the circumstances revealed in the records of these appeals, to hear the issue.
These two appeals arise under separate proceedings brought in respect of separate collective agreements which, for convenience, I shall refer to as the “Haldimand agreement” and the “Perth agreement”. As will be seen shortly, there are some differences in the provisions of the two collective agreements which have a bearing on the second issue. Because the first issue only becomes significant if the Boards are found to have been authorized in law to hear the arbitration, I will deal with the second issue first. The operative events and the applicable contractual provisions vary slightly in these two proceedings, and it will be convenient therefore to discuss the contractual and factual backgrounds separately.
A. Facts of the Haldimand Arbitration
The parties entered into a succession of collective agreements under the Ontario Labour Relations Act, R.S.O. 1970, c. 232, (now R.S.O. 1980, c. 228) the most recent being that dated February 2, 1977, the term of which, however, ran from January 1, 1976 until December 31, 1976. The agreement included the usual arbitration clause following along in a general way the otherwise mandatory provision for arbitration under s. 37 of The Labour Relations Act, supra. The issue arises, however, under the provisions in the contract relating to the renewal process which are found in the following articles of the agreement:
Article 18—Duration of Agreement
18.01 This Agreement shall be for a period of one year, commencing on the 1st day of January 1976 and expiring on the 31st day of December 1976.
18.02 This Agreement shall remain in force for the period mentioned above and shall be automatical-
[Page 10]
ly renewed from year to year thereafter, unless either party notifies the other party in writing of its termination or proposed revision, addition or deletion of any of its provisions. Such notification will be made within the period of ninety (90) days prior to the termination of this Agreement.
Article 16—Interest Arbitration
16.01 In the event that either of the parties elects under Article 18 to terminate, modify or amend this Agreement and should the parties be unsuccessful in negotiating a new agreement on or before the 15th day prior to the expiry date of this Agreement, either of the parties may notify the other in writing of its desire to submit to arbitration the negotiation of a new Agreement and the notice shall contain the name of the first party’s appointee to an Arbitration board. The recipient of the notice shall within five (5) days advise the other party of the name of its appointee to the arbitration board.
…
16.14 The provisions of this collective agreement shall remain in full force and effect beyond the expiry date of this collective agreement until such date as the decision of the board of arbitration amends or alters its provisions. The board of arbitration shall provide that the Agreement or any of its terms shall be retroactive to such day as the board may fix but not earlier than the day upon which the previous agreement ceased to operate.
Article 16 had been in the collective agreement since 1973. Pursuant to these provisions, the appellant gave notice to bargain under article 18 on November 23, 1976. Bargaining ensued and ultimately the statutory provisions for conciliation were exhausted when on October 24, 1977 the Minister reported that it was not considered advisable to appoint a conciliation board. A few days previously, on October 18, the appellant served notice to arbitrate under the interest arbitration provision of article 16.
Difficulties ensued between the parties as to the right to convene an interest arbitration in the circumstance, and after an advisory opinion was obtained by the Minister of Labour from the Labour Relations Board, the parties proceeded
[Page 11]
with the appointment of the Board and the hearing of the issue as to the jurisdiction of the Board to arbitrate “for the purpose of determining a new collective agreement between the Employer [respondent] and the Association [appellant]” as raised by the appellant in its notice of October 18, 1977, supra. The Board of Arbitration found, in an interim award dated November 29, 1978, that it had the necessary jurisdiction in law to proceed and did so. In this interim award the Board unanimously found that s. 70 of The Labour Relations Act preserved the appellant’s right to invoke the provisions of article 16 for the establishment by arbitration of a successor collective agreement between the parties. On June 29, 1979, the Board issued its final award wherein it prescribed a collective agreement with a term of three years from January 1, 1977 and which agreement included an interest arbitration clause identical to that in the previous agreement, supra, whose term had expired on December 31, 1976. The employer nominee dissented as to the term of the agreement, indicating that it should be for a one-year period; and would not have included the interest arbitration clause in the new agreement.
The majority of the Board, however, concluded:
Boards of arbitration are understandably reluctant to remove from a collective agreement a term that has stood for some time as a feature of the parties’ bargaining relationship.
…
Interest arbitration has been part of the collective agreement between these parties since 1970. It was not resorted to in negotiations prior to the 1976 collective agreement.
B. Facts of the Perth Arbitration
An interest arbitration clause has been in the collective agreements between the appellant and the respondent Perth since 1970. Pursuant to this clause an Interest Arbitration Board was convened to determine the terms of the collective agreement for the calendar year 1976. That Board reinserted
[Page 12]
the interest arbitration clause, and apparently neither party at that time sought the removal of that clause from the resultant collective agreement. The provisions of the 1976 agreement involved in the issues arising on this appeal are as follows:
ARTICLE 16—DURATION OF AGREEMENT
16.1 This Agreement shall be for a period of twelve months commencing the 1st day of January, 1976, and ending the 31st day of December, 1976.
16.2 Either party to the Agreement may, within the period of ninety days before the Agreement ceases to operate, give notice in writing to the other party of its desire to bargain with a view to the renewal, with or without modifications, of the Agreement then in operation or to the making of a new Agreement.
ARTICLE 15—CONTRACT ARBITRATION
1. In the event that either party elects to modify or amend this agreement and gives notice to bargain in accordance with the agreement, and if the parties are unable to reach agreement during negotiations and if no agreement is reached with the services of a conciliation officer, the parties agree that either party may notify the other party in writing of its desire to submit to arbitration all matters remaining in dispute. The notice shall contain the name of the parties appointee to an arbitration board. The recipient of the notice shall within fifteen (15) days thereafter advise the other party of the name of its appointee to the arbitration board. The notice of desire to submit to arbitration by either party read in conjunction with this Article shall create an irrevocable agreement in writing to refer all matters remaining in dispute between the parties to Arbitration, notwithstanding the expiry of this collective agreement.
…
6. In the event that the provisions of this Article are invoked by either party, then the provisions of this collective agreement shall remain in full force and effect beyond the expiry date of this collective agreement until the effective date of the new collective agreement is determined by the board of arbitration.
On December 20, 1976, the appellant gave notice to bargain under article 16, following which unsuccessful negotiations and conciliation occupied the year 1977 and ended on May 9, 1978 with a report by the Minister that no purpose would be
[Page 13]
served in appointing a conciliation board. On May 10, 1978, the appellant gave notice under article 15 of the collective agreement that it wished to invoke the interest arbitration provisions. The arbitration proceeded and an interim award was issued on November 22, 1978, wherein the Board unanimously agreed that it had jurisdiction to proceed with the interest arbitration because s. 70 of The Labour Relations Act preserved the appellant’s right to invoke interest arbitration. The Board issued a final award on May 8, 1979 establishing a collective agreement for a two-year term from January 1, 1977, and which agreement included article 15, the interest arbitration provision. On the latter point the employer’s nominee dissented.
The respondent Haldimand and the respondent Perth then sought judicial review of both awards in both proceedings with the following results:
1. Haldimand Judicial Review Proceedings
The Divisional Court, by a majority, quashed the Haldimand awards, both interim and final, for reasons to be discussed later. In dissent Trainor J. held the view that the Board had jurisdiction to undertake the interest arbitration but the Board could not include in the replacement agreement the interest arbitration clause. The Court of Appeal reversed the Divisional Court and restored the interim award, finding that the Board had jurisdiction to hear the interest arbitration. The Court of Appeal concluded, however, that that part of the final award which inserted an interest arbitration clause in the new collective agreement, should be quashed.
2. Perth Judicial Review Proceedings
The Divisional Court upheld the interim award of the Board as well as the final award including the insertion by the Board of the interest arbitration clause in the renewal agreement. There was a dissent by Trainor J. concerning the inclusion of
[Page 14]
the interest arbitration clause in the renewal agreement. The Court of Appeal agreed that the Arbitration Board had jurisdiction to hear the interest arbitration but, as in the Haldimand appeal, the Board did not have authority under the contract to insert the interest arbitration clause in the new collective agreement.
Jurisdiction of Board to Hear Interest Arbitration
It will be noted that the Haldimand agreement established the following time limit under article 16: “should the parties be unsuccessful in negotiating a new agreement on or before the 15th day prior to the expiry date of this Agreement…” With reference to this provision Maloney J., for the majority of the Divisional Court, stated:
Much of the argument proceeded on the assumption that a notice of desire to arbitrate a new agreement had to be served on or before the fifteenth day prior to the expiry of the agreement, but I note that on a literal reading of the paragraph either party may at an unspecified time give notice of a desire to arbitrate if the parties are unsuccessful in negotiating a new agreement on or before the fifteenth day prior to the expiry date; these are two quite different propositions but for reasons I am about to outline the result will not turn on this factor.
However, His Lordship later concluded:
But by its plain wording, Article 16.14 presupposes the existence of arbitration proceedings, at least to the extent that a notice of intention to arbitrate had been delivered by one of the parties prior to the expiry of the contract on December 31st, 1976;…
Trainor J., dissenting, interpreted this article differently:
Article 16.01 provided for a minimum period of negotiation to 16 December, 1976 following the service of the notice pursuant to 18.02. Thereafter, either party could send the matter to interest arbitration if it so desired. There was no obligation to do so, nor was a time prescribed for taking that action.
…
[Page 15]
It may be argued that article 16.14 provides a bridging effect only when the notice of arbitration has been served prior to 31 December, 1976. On that interpretation, in my view, article 16.14 was not required as part of the agreement, as notice to arbitrate having been served before the end of December, no bridging was needed.
Goodman J.A., for the Court of Appeal, construed this article with results similar to those of Maloney J. although not necessarily because the wording required a notice to arbitrate before the expiry date:
It is clear that the agreement contemplates the giving of notice of intention to arbitrate, prior to its expiry date.
With all deference to those holding views to the contrary, the article, in my opinion, prescribes no time limit for the giving of notice for interest arbitration. Article 16.01 provides that either party may notify the other of its desire to submit the negotiation of a new agreement to interest arbitration provided two conditions are met:
1) either of the parties has elected under Article 18 to terminate, modify or amend the agreement in force; and,
2) the parties have been unsuccessful in negotiating a new agreement on or before the 15th day prior to the expiry date of the current agreement.
Provided these two conditions are met, both parties acquire the right to submit the negotiation of a new agreement to interest arbitration and no time limit is placed upon the exercise of this right.
On this view of article 16, the result is the same as in the case of the Perth agreement where no limit, express or implied, can be said to have been placed on the time for the giving of notice to arbitrate under article 15.01. But these articles in the two agreements, with nothing more either in law or in the contracts themselves, would die with the expiry of the term of the two agreements.
[Page 16]
There are at least two possible routes by which these collective agreements may be extended beyond their respective terms:
(a) by the provisions of the agreements themselves (that is article 16 of the Haldimand agreement and article 15 of the Perth agreement) relating to renewal or continuance during the bargaining process; and
(b) by the provisions of The Labour Relations Act regulating the conditions of employment and the relationship between the employer, the employee and the bargaining agent pending renewal of the collective agreement.
I will deal with the latter first.
This question principally concerns s. 70 of the statute which provides:
70.—(1) Where notice has been given under section 13 or section 45 and no collective agreement is in operation, no employer shall, except with the consent of the trade union, alter the rates of wages or any other term or condition of employment or any right, privilege or duty, of the employer, the trade union or the employees, and no trade union shall, except with the consent of the employer, alter any term or condition of employment or any right, privilege or duty of the employer, the trade union or the employees,
(a) until the Minister has appointed a conciliation officer or a mediator under this Act and,
(i) seven days have elapsed after the Minister has released to the parties the report of a conciliation board or mediator, or
(ii) fourteen days have elapsed after the Minister has released to the parties a notice that he does not consider it advisable to appoint a conciliation board,
as the case may be; or
(b) until the right of the trade union to represent the employees has been terminated,
whichever occurs first.
The section is now s. 79, R.S.O. 1980, c. 228 and has been in the Act since 1966.
The tribunals participating in these proceedings to date have all given their views with respect to the effect of s. 70. The Ontario Labour Relations
[Page 17]
Board, in advising the Minister under s. 96 of the Act as to whether the parties are required by the agreement and by the Act to resolve their differences by the proposed arbitration, came to the conclusion that:
…it is quite clear that the terms of the collective agreement between the parties, including article 16, had been continued by operation of section 70(1) of the Labour Relations Act and were in force at the time at which the union served its notice to arbitrate.
The Haldimand Arbitration Board found s. 70 to be applicable and simply adopted in toto the discussion in the Perth Board award of s. 70 in which that Board found:
We need not and do not make any finding as to the ultimate meaning of Article 15.6 of the agreement in conjunction with section 44(2) of The Labour Relations Act. That is so because in our view section 70 of the Act provides a complete answer to the employer’s submission.
A different view of s. 70 was taken by Maloney J. when the matter reached the Divisional Court. His Lordship stated:
I note that this section does not purport to continue the operation of the collective agreement during the process of bargaining and conciliation but the quoted portion of the section is merely prohibitive of change in the working relationship between the parties as it stood prior to the expiry of the agreement.
Trainor J. in dissent disagreed with this respective view of s. 70, adopting instead the interpretation placed upon it by the Ontario Labour Relations Board, supra. The Court of Appeal, speaking through Goodman J.A., supported the award of the Haldimand Board in much the same language.
It seems clear, for example, that where a collective agreement has expired and an employee has a grievance while the parties are engaged in bargaining, the trade union or employee would still have the right to pursue the grievance by grievance procedure and arbitration proceedings if required… We can see no valid reason to distinguish the preservation of that right by s. 70(1) from the preservation of the right given to both parties by the subject collective agreement to have interest arbitration available to them.
[Page 18]
Thus, all the Board members and all the reviewing Justices (with the exception of the majority of the Divisional Court) determined that the section continued in effect after the expiration of the term of the contract “…every term…of employment or any right…of the trade union or the employees…” until the expiry of a fourteen-day period which commences after a ‘no Board determination by the Minister’ has been issued. In both appeals, the notice invoking contract arbitration was given within that period of time.
Should this view of s. 70 be accepted, then only two objections can be raised in the proceedings here. The first is that “any right” of the employer or the trade union does not include the right under article 16 of the Haldimand agreement or article 15 of the Perth agreement, to invoke interest arbitration at the time the two notices were served. There is no room in the language of the section for such a restrictive interpretation and it offends all logic and reason to expect to find such an exclusion from a bridging provision, designed as it clearly is to maintain the status quo at the workplace pending the conclusion of sometimes lengthy contract negotiations.
A second objection might be taken, that the section does not extend the right to contract arbitration where the arbitration process is not completed as a final award within the extension period provided by s. 70(1)(a). Neither respondent (appellant in the cross-appeals) has maintained such a position and I respectfully accept the conclusion in the Perth award and that reached by Goodman J.A. for the Court of Appeal that the right to arbitrate need exist only at the time of the notice to arbitrate and not at the time the award is handed down.
I conclude on this issue that s. 70(1) when properly construed, as it has been by the Boards, by the dissent in the Divisional Court and by the Court of Appeal below, provides a mechanism for the preservation of the right to arbitrate the renewal contract in both proceedings. Accordingly, the two Arbitration Boards, in both interim
[Page 19]
awards, were correct in concluding they had jurisdiction to proceed with their respective interest arbitrations, and so the cross-appeals should be dismissed.
This is the same conclusion as was reached by this Court in Bradburn v. Wentworth Arms Hotel Limited, [1979] 1 S.C.R. 846, (vide pp. 852 and 860). There the Court was concerned with the interpretation of two subparagraphs of an article in a collective agreement which appeared to be inconsistent. The contract itself was not considered to include a bridging provision which would keep its terms in effect pending replacement by a newly negotiated agreement but rather this result was found in the Act itself. It was stated in the majority reasons at p. 860:
In my view the effect of the service of the Notice to Bargain under 13.01 is to terminate the agreement at the expiry of the term on November 30, 1970 and to invoke the collective bargaining process under The Labour Relations Act. This process came to an end when the Minister, on the receipt of the report of the conciliation officer, determined not to appoint a Conciliation Board. Section 70(1)(a)(ii) of the statute provides that 14 days thereafter the parties are free to strike or lock-out as the case may be. In the interim period, s. 70 applies to restrict the rights of the parties in their actions with respect to rates of pay and working conditions, and the right to strike and the right to lock-out are of course during that period suspended. No issue here arises out of the interval prior to the expiry of such statutory period.
The concurring opinion of Laskin C.J.C. in that case does not deal expressly with the section except to note in passing that it is a statutory extension of working conditions pending renewal bargaining.
The appellant as respondent on the cross-appeals advanced an alternative approach to the question of the extension of the terms of the collective agreement during the renewal process based upon provisions in the agreements themselves and s. 44 of the Ontario Labour Relations Act. It is unnecessary to explore this course because of the conclusion reached above that s. 70
[Page 20]
produces the necessary basis for the retention of the right to give notice to arbitrate the contract renewal issues until the time of the exercise of that right under both collective agreements. This Court touched upon this issue in Bradburn, supra, but in that case as well it was not necessary to determine the issue. The majority found s. 44 had no application to the term of the collective agreement there in issue, as did the concurring opinion delivered by the Chief Justice. The majority opinion (and the concurring view did not deal with this issue) found no limit on s. 70 in s. 44, and concluded with reference to the latter at pp. 862-63:
This [s. 44] would appear to be a consensual alternate to the mandatory statutory minimum agreement, or rather the maintenance of a minimum status quo provided for by s. 70 of the Act. There being no relationship between the two subsections [44(1) and (2)] other than as mentioned, and subs. (2) having no application to the circumstances with which we are confronted, I cannot with respect agree that s. 44(1) can be applied to Article 13.02 as though it were an independent agreement for which a term must be determined.
To the same effect is the opinion of the Chief Justice at p. 851. It might be noted in passing, with reference to s. 44, that it was amended subject to Brad burn, but the result has no relevance to the issue here.
The Continuance of The Interest Arbitration Clause
I turn now to the issue in the main appeal, that is, may the Arbitration Boards include in the new collective agreement to be established in the arbitration proceedings the provisions for interest arbitration found in the pre-existing agreements?
The Board in the Perth arbitration final award included article 15, supra, from the prior agreement, and in doing so observed:
It is a term, like all of the terms in the collective agreement, whose disposition is to be determined by this
[Page 21]
Board in light of the merits of the case argued by both parties and the application of principles that have evolved through the arbitration process.
The argument put to the Boards was that the imposition of an interest arbitration clause would result in such a clause remaining in the agreement in perpetuity and the consequential deprivation of the basic right to contract negotiations under the labour legislation. The Board recognized that “neither party has a presumptive right to see that term preserved simply by resisting a request for a change”. The Board concluded that the removal of this article from the collective agreement would be “premature at this time” and that, by reason of the pattern which had been established in the labour relations in this sector of the community, it was wise to “consider well its removal upon the very first request”. In this the Board had reference to the observations of Chairman Adams in the arbitration Re York Regional Board of Health and Ontario Nurses’ Association (1978), 18 L.A.C. (2d) 255, at pp. 264-65:
In our view, however, the fact that the parties have been subject to this system since either 1971 or 1973 and the fact that the employer made no objection to the reimposition of the provision last year constitutes such guidance and justifies reimposing the provision for one more agreement. Had the provision been in the agreement for a shorter period of time or had the employer either objected to the clause last time or demonstrated a substantial problem with the results of the preceding award, we would have acceded to the employer’s request. For the general reasons outlined above we believe that in such situations provisions of this kind should not be continued without the express consent of both parties. Free collective bargaining is too important to be done away with inadvertently. However, the interest arbitration system at bar has been in place for some considerable time;… But we stress that if the parties resort to arbitration for a third time next year and if the employer once again objects to the procedure of arbitration, we are of the opinion that a board of arbitration would be most unwise to reimpose this provision once again. The fundamental principles reviewed above support this view. Provisions of this kind no matter how long they have been in an agreement do not mean the parties have agreed to the system of interest arbitration
[Page 22]
forever.
The Board thereupon, after considering the history of the collective agreement between these parties and considering the matter of continuity, concluded that this being the outstanding issue between the parties in the arbitration, the clause should be continued in the succeeding contract which, in the case of Perth, was to be for a term of two years. The Haldimand Board of Arbitration expressly adopted the reasoning of the Perth Board and continued the interest arbitration provision in the agreement awarded which was for a term of three years.
The Court of Appeal, as already noted, took the view that the provision should not be included in the contract because it would have the effect of withdrawing the rights of the parties to recourse to free collective bargaining and conciliation under the labour relations statute. The Court concluded that this key question arising under the articles quoted above (article 15 in the case of the Perth agreement and article 16 in the Haldimand agreement) would, if resolved in favour of the appellant, have the potential effect of preventing the parties from resorting to collective bargaining and the ultimate exercise of the right to strike or lock-out under the Ontario Labour Relations Act. In reaching this conclusion the Court relied upon the decision of this Court in Bradburn, supra, and particularly at p. 859 where the majority of this Court stated:
The scheme of labour relations under the Ontario Act is founded upon collective bargaining leading to a collective agreement and thereafter to replacement agreements. Collective bargaining in turn is an activity in which the parties participate in the full realization of their respective economic positions and strengths subject only to the limitations and boundaries imposed on the parties by The Labour Relations Act. Consequently, collective agreements, which are of course creatures of statute finding both their origin and their extent within the Act, reflect these realities. A court therefore should not be quick to place a meaning on a term of a collective agreement which would put that clause in conflict with the general philosophy of labour relations as established under the applicable statute. Such should be the case
[Page 23]
only where the contract by its clearest intent and provisions dictates otherwise. I do not find such to be the case here.
It is significant in examining the Bradburn case to note, however, that there the Court was concerned with the construction of a clause in the collective agreement which provided in part:
This agreement remains in effect until a new agreement has been negotiated and signed…
There was a patent conflict between that provision and the preceding subsection of the same article. It was in resolving this impact that the foregoing observations were made by the Court. Here the situation in both collective agreements, as we have seen, is entirely different. In the Perth agreement, article 15, the parties agreed “to submit to arbitration all matters remaining in dispute”; and the Arbitration Board, after hearing and determining such matters in dispute “shall issue a decision setting forth the new collective agreement…” In the Haldimand agreement, article 16, the parties agreed to “submit to arbitration the negotiation of a new agreement…”; and the Board, after hearing the issues then in dispute “shall herein determine the new collective agreement…” There is nothing in the agreement to require any subsequent board acting under the new collective agreement to reimpose these contract arbitration clauses. There is no contractual momentum which would inexorably lead to a perpetual agreement to mandatorily arbitrate a succeeding collective agreement. The considerations weighing upon the decision in Bradburn therefore are not here present.
With reference to the Haldimand agreement, Goodman J.A., on behalf of the Court of Appeal, observed:
We are of the opinion that those words cannot reasonably bear the interpretation put upon them by the Board which construed them in a manner which permitted the Board to include in the collective agreement then being negotiated by the parties an interest arbitration clause which had the effect of requiring the parties once again, with respect to a future collective agreement, to submit
[Page 24]
to an arbitration board for its decision the matter whether such future agreement should contain a provision for settlement of the terms of such an agreement by compulsory arbitration, at the option of either party.
The validity of this observation depends entirely upon whether the necessary effect of the Board award is to deprive in perpetuity the access by either party to free collective bargaining and consequential rights under the labour relations statute. The Court thereupon concluded:
It is our view that the interest arbitration provision contained in Article 16.01 of the 1976 collective agreement is limited solely to that agreement and accordingly to the settlement of the terms of the collective agreement next following but the Board did not have the power to insert a similar provision as a term of such agreement then being negotiated or settled pursuant to the provisions of the 1976 collective agreement.
The Court of Appeal reached a similar conclusion with reference to the Perth agreement:
…the words [in the above-quoted articles] are not reasonably capable of such an interpretation, the effect of which would be potentially to deprive either one of the parties from exercising rights given by the Act.
There are two conclusions caught up in the reasoning by the Court. The first I have already dealt with by reference to the distinguishing features between this appeal and the Bradburn judgment, supra. The second concerns the reasonableness of the interpretation placed upon the collective agreement by the Boards. In my view, with the greatest respect to all those below who have reached different conclusions, the decisions by the two Boards of Arbitration on the meaning of these terms in the collective agreements were not only reasonable but also were in law correct. Whether a court has to go so far as to find the interpretation adopted by the Board to be correct is another issue, but if it were the test here applicable, I would conclude that the interpretations of the contractual terms are, in the case of both contracts, correct in law.
[Page 25]
These are consensual boards. There is nothing in the two collective agreements or the applicable statutes which bring the interest arbitration procedures within the classification of statutory tribunals under the Rivando rule (see Re International Nickel Company of Canada Limited and Rivando, [1956] O.R. 379) which was expressly adopted by this Court in Port Arthur Shipbuilding Company v. Arthurs, [1969] S.C.R. 85. In my view, it is not required for the proper disposition of the issues arising in this appeal to examine once again the standards of judicial review applicable to this type of arbitration proceeding. This is so for the simple reason that whether the test be as in McLeod v. Egan, [1975] 1 S.C.R. 517, that is that the arbitration board must in its interpretation of the applicable statute be in law correct, or even if the McLeod rule is interpreted as extending to the parent statute or constitutive agreement, or as in Canadian Union of Public Employees Local 963 v. New Brunswick Liquor Corporation, [1979] 2 S.C.R. 227, namely that the interpretation placed by the Board upon the applicable statute and agreement must be an interpretation which the words thereof will reasonably bear, the action by the Arbitration Boards here meets the most stringent of any such tests. Neither is it necessary for us to determine, in the classical tradition of judicial review cases involving consensual tribunals, whether the question referred by the parties to these Arbitration Boards was a specific question of law or a question of interpretation in which an issue of law incidentally arises (vide Volvo Canada Limited v. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (U.A.W.), Local 720, [1980] 1 S.C.R. 178). This again is without consequence because the decisions of the Boards, as has already been observed, are, in my respectful view, correct in law.
A further issue which arose in the arguments before this Court was whether the presence of s. 34c in The Labour Relations Act, supra, limits the recourse to interest arbitration to the circum-
[Page 26]
stances described in the provisions of that section which reads as follows:
34c.—(1) Notwithstanding any other provisions of this Act, the parties may at any time following the giving of notice of desire to bargain under section 13 or 45, irrevocably agree in writing to refer all matters remaining in dispute between them to an arbitrator or a board of arbitration for final and binding determination.
(2) The agreement to arbitrate shall supersede all other dispute settlement provisions of this Act, including those provisions relating to conciliation, mediation, strike and lockout, and the provisions of subsections 6, 7, 9, 10 and 11 of section 37 apply mutatis mutandis to the proceedings before the arbitrator or board of arbitration and to its decision under this section.
[S.O. 1975, c. 76, s. 7; now R.S.O. 1980, c. 228, s. 38(1) and (2)]
Reliance was placed by counsel for the appellant upon the earlier decision by the Court of Appeal of Ontario in Re Grey-Owen Sound Health Unit and Ontario Nurses’ Association (1979), 24 O.R. (2d) 510. There the Court was concerned with a specific reference to an arbitration board of contract renewal issues directly under s. 34c. The various judgments of the members of the Court were principally concerned with the extent of the submission to arbitration, a matter not here in issue. Brooke J.A., dissenting in part, concluded that the provision in the Act was available to parties wishing to settle contract negotiation matters by binding arbitration but it did not represent a code which would restrict the parties from voluntarily acceding to compulsory interest arbitration for contract renewal of an existing collective agreement. It would not appear that the decision in the Grey-Owen Sound case is determinative of any of the issues arising under the main appeal here.
I therefore would allow the appeals, dismiss the cross-appeals without costs, and set aside that part of the orders of the Court of Appeal which would quash the inclusion in the arbitration award of the provision for interest arbitration; with costs to the appellant in both appeals.
[Page 27]
Appeals allowed with costs and cross-appeals dismissed.
Solicitors for the appellant: McCarthy & McCarthy, Toronto.
Solicitors for the respondents: Beard, Winter, Gordon, Toronto.