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T-3943-75
Canadian Pacific Limited (Plaintiff)
v.
United Transportation Union (Defendant)
Trial Division, Dubé J.-Ottawa, March 23, 24 and 25 and April 1, 1977.
Jurisdiction - Labour relations - Whether terms of arbi tration award of January 8, 1975 are part of current collective agreement - Whether Court can review arbitrator's decision - Maintenance of Railway Operations Act, 1973, S.C. 1973- 74, c. 32, ss. 13(2),(3), 16(1),(4) - Canada Labour Code, R.S.C. 1970, c. L-1 as amended by S.C. 1972, c. 18, ss. 107, 155, 156, 157, 159 - Federal Court Act, s. 23.
Plaintiff C.P. brought an action for a declaration that an arbitration award dated January 8, 1975 (relating to a proposal by plaintiff to reduce the number of brakemen on freight trains from two to one) was part of the current collective agreement between C.P. and defendant Union. On June 25, 1971 the parties entered into two collective agreements for Eastern and Western regions which expired December 31, 1972. The revi sion of the agreements was the subject of a conciliation board report to the Minister of Labour on August 24, 1973. Because of a strike during that year by other railway employees, Parlia ment enacted the Maintenance of Railway Operations Act, 1973, which extended the collective agreements to include the period January 1, 1973 to December 31, 1974, or earlier if the new agreements came into effect and provided for the appoint ment of an arbitrator to resolve the issues.
The arbitrator was appointed September 13, 1973, and fol lowing his preliminary report on January 16, 1974, the parties entered into collective agreements expiring on December 16, 1974, which left open the "crew consist issue", among others, until decided by the arbitrator. The arbitrator reached his decision on December 3, 1974 but the decision on the "crew consist issue" was not published until January 8, 1975. The Court of Appeal dismissed a section 28 application by the Union to review and set aside the award on the ground that it was purely an academic issue because the effect of the award had been spent. The parties have since entered into consecutive collective agreements covering the period from January 1, 1976 to December 31, 1977. These agreements did not revise or refer to the "crew consist issue". Plaintiff claims the latter is part of the current agreement.
•
Held, the action is dismissed. The Court has no jurisdiction to interpret the collective agreement, which is a matter that can only be decided by the machinery provided in the agreement between the parties and in the Canada Labour Code. Following the decision of the Supreme Court in McNamara Construction (Western) Ltd. v. The Queen it is clear that the Federal Court does not have jurisdiction to grant relief in contract unless an existing and applicable federal law can be invoked to support
the proceeding. Section 23 of the Federal Court Act provides the Court with jurisdiction except where that jurisdiction "has been otherwise specially assigned". Section 155 of the Canada Labour Code provides for settlement "by arbitration or other wise", and by agreement the parties have chosen arbitration. The arbitrator does not constitute a statutory board and is not subject to review by way of certiorari, once the parties have agreed to settle by arbitration and not "otherwise".
Canadian Pacific Ltd. v. Quebec North Shore Paper Co. (1976) 9 N.R. 471; McNamara Construction (Western) Ltd. v. The Queen (1977) 13 N.R. 181; Howe Sound Company v. International Union of Mine, Mill and Smelter Workers (Canada), Local 663 [1962] S.C.R. 318 and Port Arthur Shipbuilding Company v. Arthurs [1969] S.C.R. 85, applied.
ACTION for declaratory judgment. COUNSEL:
C. R. O. Munro, Q.C., and T. Maloney for plaintiff.
M. W. Wright, Q.C., and J. L. Shields for defendant.
SOLICITORS:
Canadian Pacific Law Department, Montreal, for plaintiff.
Soloway, Wright, Houston, Greenberg, O'Grady & Morin, Ottawa, for defendant.
The following are the reasons for judgment rendered in English by
DUBS J.: This is an action for a declaration that the terms of the award of the Honourable Emmett M. Hall dated January 8, 1975, relating to the "crew consist issue" are part of the current collec tive agreement between the two parties in respect of the terms and conditions of employment of trainmen. The "crew consist issue" may be broadly defined as the proposal by the plaintiff railway to reduce the number of brakemen from two to one, that is to operate freight trains without the second brakeman in the caboose under certain circumstances.
On June 25, 1971, the plaintiff (hereinafter "C.P.R."), and the defendant Union (hereinafter "the Union") entered into two collective agree ments, one for the Eastern and Atlantic regions, one for the Prairies and Pacific regions and both
identical in all material respects, with reference to the terms and conditions of employment of C.P.R. trainmen. The agreements expired on December 31, 1972. After that date, the revision of the agreements was the subject of proceedings before a conciliation board which reported to the Minister of Labour on August 24, 1973. During the year, certain C.P.R. employees, but not the trainmen, went on strike bringing the operation of the rail way to a halt.
On September 2, 1973, Parliament enacted the Maintenance of Railway Operations Act, 1973', (hereinafter "the Act") to provide for the resump tion of railway operations in Canada. The preamble recited that it was "essential .. . that operations of the railways be resumed immediately and ... provisions be made for the resumption of the processes of negotiation and mediation and for the final settlement of terms and conditions of employment for the years 1973 and 1974".
By virtue of Parts III and IV of the Act, the collective agreements were extended to include the period beginning January 1, 1973, and ending on the day on which new agreements came into effect, or on December 31, 1974, whichever was the earlier (subsection 13(2)); the Governor in Council was authorized on the recommendation of the Minister of Labour to appoint an arbitrator (sub- section 16(1)); in the event the arbitrator decided any matter not agreed upon by both parties, the agreements should be deemed to be amended by the incorporation therein of such decision and the new agreement thereupon constituted new agree ments effective for a period ending not earlier than December 31, 1974 (subsection 16(4)).
The arbitrator was appointed on September 13, 1973, and heard the parties on the "crew consist issue" and other issues still in dispute. In his first report, dated January 16, 1974, he recommended certain preliminary actions be taken by both par ties prior to June 30, 1974, following which he would hear further representations and then issue an award regarding the "crew consist issue".
The parties entered into collective agreements revising the trainmen's agreement on February 1, 1974, to remain in effect until December 31, 1974,
' S.C. 1973-74, c. 32.
and thereafter until revised or superseded. The new agreement contained this provision:
Reduction of Crew Consist in All Classes of Freight Service
The Company's demand—Reduction of Crew Consist in All Classes of Freight Service—shall be dealt with in the manner specified in the Report of the Arbitrator—Railways Arbitra tion 1973—dated January 16, 1974.
At the examination for discovery held for this trial on November 26, 1976, an officer of the Union, George McDevitt, was asked whether the agreement of February 1, 1974, gave "effect to the January 16, 1974 award of Mr. Hall in so far as it affected the operating employees of C.P. Rail represented by the United Transportation Union" and he answered in the affirmative.
In July and August of 1974, the arbitrator heard further representations on the "crew consist issue". On December 3, 1974, he reached a decision on the four matters reserved in his first report, includ ing the "crew consist issue", signed an award in respect thereto and forwarded the same to the Department of Labour. An official of the depart ment, on or about that date, informed officers of the Union that the award was more favourable to C.P.R. than to the Union.
At the time, the Union was in the process of conducting a referendum by ballot of its members across Canada with respect to the ratification of the new collective agreement. An officer of the Union expressed concern, both to the arbitrator and to an official of the department, that publica tion of an unfavourable award at that particular time might influence adversely the outcome of the vote, which could be avoided by postponing the publication for a brief period until after the ballot had been completed. It was then decided by the arbitrator and the department to break the award into two parts: the three other issues to be reported in due course and the "crew consist issue" to be held back for publication early in the new year. The "crew consist issue" award was in fact pub lished on January 8, 1975, bearing that date.
Shortly thereafter, or on January 16, the Union applied to the Federal Court of Appeal under
section 28 of the Federal Court Act to review and set aside the "crew consist issue" award. The fact that the award was dated and published after December 31, 1974, was not a ground relied on by the Union, but on the second day of the hearing, during the address in reply of counsel for the Union, the Court from the Bench, ex proprio motu, expressed itself in the following terms 2 :
The award attacked in these proceedings does not appear to the Court to affect operations of the Railways or collective agree ments relating thereto after the end of 1974. Its effect, if it ever had any, appears to be spent. The Court is therefore not satisfied that the issues raised are other than purely academic or that there is any relief that the Court can give.
Thereupon, counsel for the Union asked for and obtained an adjournment and brought this situa tion to the attention of the arbitrator. Following consultations between counsel for both parties, the matter was brought on for further hearing on September 3, 1975, when counsel for C.P.R., with the agreement of counsel for the Union, attempted to file several documents. The Court refused to admit the proffered material, reiterating its obser vation that the issues were academic and called on counsel for the Union to express his attitude there to. He agreed to his application being dismissed, and so it was. All these facts are agreed to by both parties under their joint agreement as to facts.
And now returning to December 1974; on the 11th, both parties entered into collective agree ments revising the previous agreements, effective from January 1, 1975, for a period ending not earlier than December 31, 1975.
And, to complete the sequence of events, on July 21, 1976, the parties entered into two further collective agreements for the period from January 1, 1976 to December 31, 1977.
The agreements of July 21, 1976, as well as the preceding agreements of December 11, 1974, did not revise the terms of the then current agreements with reference to the "crew consist issue". There is no reference to the "crew consist issue" in the documents.
It should be noted at this juncture, and merely to dispose of the matter, that a memorandum of
2 Court No. A-15-75, July 9, 1975.
settlement was entered into by both parties on November 7, 1974, between the railways signatory thereto (including C.P.R.) and the Associated Railway Unions (including the Union) which included a provision that "the foregoing changes are in full settlement of all requests ... and all other matters in dispute as of the date of signing this Memorandum of Settlement". That provision was pleaded by the Union in its statement of defence, but it related only to those matters in dispute which were common to all railways and unions, and is not relevant to the "crew consist issue", an issue which concerns C.P.R. and the Union only.
The question, in a nutshell, is whether or not the arbitrator's award with reference to the "crew consist issue" is part of the current collective agreement.
C.P.R. claims it is, by virtue of the agreement of February 1, 1974, binding on both parties and unrevised in subsequent agreements, including the current one: and by virtue of subsection 16(4) of the Maintenance of Railway Operations Act, 1973 which reads:
16. (4) In the event that an arbitrator is appointed under subsection (1) and decides any matter not agreed upon at the time of his decision between the parties to a collective agree ment to which Part I, II or III, as the case may be, applies, such collective agreement shall be deemed to be amended by the incorporation therein of such decision and the collective agreement as so amended thereupon constitutes a new collec tive agreement in amendment or revision of the collective agreement to which Part I, II or III, as the case may be, applies effective for such period ending not earlier than December 31, 1974 as may be fixed by the arbitrator.
Plaintiff claims that an arbitrator was appointed and that he decided the "crew consist issue". Therefore, the February 1, 1974, agreement, and subsequent revisions thereto, incorporated the arbitrator's award which is still currently binding on both parties. Moreover, the Union admitted at discovery that the agreement gave effect to the award.
In his first line of defence, counsel for the defendant alleges that this Court has no jurisdic tion to determine the issue. A previous attack on the jurisdiction of the Court has already been launched by learned counsel by way of a motion to strike out plaintiff's statement of claim, which
motion was rejected by my brother Cattanach without written reasons. His decision was sus tained by the Appeal Court and Heald J. said in his reasons for judgment on behalf of the Court at pages 4 and 5 of the unreported decision':
The appellant also makes a second submission, which is by way of an alternative to its first submission. In this submission, the appellant contends that if section 23 of the Federal Court Act clothes the Trial Division of this Court with jurisdiction to determine issues involving railway matters between subject and subject, that on the facts here present, Parliament has "special- ly assigned" the jurisdiction to deal with the interpretation of collective agreements to an arbitrator by virtue of section 155 of the Canada Labour Code ... .
Thus, the appellant relies on the exception contained in section 23 of the Federal Court Act which reads as follows: "except to the extent that jurisdiction has been otherwise specially assigned."
The respondent's answer to this submission is that section 155 of the Canada Labour Code does not assign any jurisdic tion to an arbitrator and, that it merely requires the parties to a collective agreement to agree between themselves on a method for finally settling certain differences between them, "by arbi tration or otherwise". It is the position of the respondent that the Canada Labour Code leaves it entirely to the parties to determine how the differences between them shall be settled and that this is quite different and distinct from a situation where Parliament would "specially assign" jurisdiction to an arbitrator to determine the matter.
One has only to state the submission of opposing counsel as I have attempted to do supra in summary form to appreciate that the statement of claim herein raises important questions of law. The Trial Judge did not give reasons for dismissing the applica tion. I am satisfied, however, that his decision is supportable on the ground that the statement of claim raises a serious question of law and this in itself would be a proper basis on which to exercise a discretion to dismiss.
Counsel for defendant chose not to seek a deter mination of the question under Rule 474, but to await the trial before questioning again the juris diction of this Court. In the intervening period, the Supreme Court of Canada handed down two deci sions which do affect the jurisdiction of this Court: Canadian Pacific Ltd. v. Quebec North Shore Paper Co. 4 and The Queen v. McNamara Con struction (Western) Ltd. 5 It is clear from these two decisions that the Federal Court does not have jurisdiction to grant relief in contract, unless there is an Act of Parliament under which the relief sought in the action is claimed. It is not sufficient that the enterprise contemplated by the agreement
Court No. A-31-76, released May 21, 1976.
° (1976) 9 N.R. 471.
5 (1977) 13 N.R. 181.
as a whole falls within federal legislative power, there must be an existing and applicable federal law which can be invoked to support any proceed ing before this Court.
There are three federal statutes existing and applicable which deal with the matter in dispute: the special Act of Parliament to settle the railway dispute, Part V of the Canada Labour Code 6 , and the Federal Court Act.
As mentioned before, the Maintenance of Rail way Operations Act, 1973, provides for the appointment of an arbitrator, the making of awards, and the incorporation of such awards in the collective agreements. However, the Act does not specify a remedy, but in subsection 13(3) provides that Part V of the Code applies in respect of the amended agreement. The key section 155 of Part V reads:
155. (1) Every collective agreement shall contain a provi sion for final settlement without stoppage of work, by arbitra tion or otherwise, of all differences between the parties to or employees bound by the collective agreement, concerning its interpretation, application, administration or alleged violation.
(2) Where a collective agreement does not contain a provi sion for final settlement as required by subsection (1), the Board shall, on application by either party to the collective agreement, by order, furnish a provision for final settlement, and a provision so furnished shall be deemed to be a term of the collective agreement and binding on the parties to and all employees bound by the collective agreement. [The underlining is mine.]
Section 156 provides that every order of the arbitrator is final, that no proceeding shall be taken in any court. Paragraph 157(c) clothes the arbitrator with power to determine whether a matter referred to him is arbitrable. Section 159 outlines the procedure for enforcement.
Under a memorandum of agreement dated Sep- tember 1, 1971 it is agreed between the railways and the unions (including the two parties to this action) that there shall be established in Montreal the Canadian Railway Office of Arbitration, with a single arbitrator to be appointed by the signato ries. There is a person currently holding that office.
6 S.C. 1972, c. 18.
Section 23 of the Federal Court Act provides that the Trial Division has concurrent original jurisdiction over certain matters, with an exception:
23. The Trial Division has concurrent original jurisdiction as well between subject and subject as otherwise, in all cases in which a claim for relief is made or a remedy is sought under an Act of the Parliament of Canada or otherwise in relation to any matter coming within any following class of subjects, namely bills of exchange and promissory notes where the Crown is a party to the proceedings, aeronautics, and works and undertak ings connecting a province with any other province or extending beyond the limits of a province, except to the extent that jurisdiction has been otherwise specially assigned. [The under lining is mine.]
Counsel for the Union alleges that jurisdiction over the matter in dispute has been assigned by the Canada Labour Code, and by agreement between the parties to an arbitrator, and that therefore this tribunal has no jurisdiction. In support of his contention he relies on a 1976 decision of the Supreme Court of Canada in Brunet v. General Motors of Canada Ltd.' where it was held that the rights sought by an employee flowed from a collec tive agreement and that no right of access to a court of law existed. The suitable remedy was recourse to arbitration as provided by section 88 of the Quebec Labour Code 8 which reads as follows as amended by section 28 of chapter 48 of the 1969 statute:
88. Every grievance shall be submitted to arbitration in the manner provided in the collective agreement if it so provides and the parties abide by it; otherwise it shall be referred to an arbitration officer chosen by the parties or, failing agreement, appointed by the Minister.
Defendant relies also on Close v. Globe and Mail Ltd. 9 wherein the Ontario Court of Appeal held that a claim involving the interpretation of a collective agreement was a matter that can only be decided by resort to the machinery provided in the agreement and that the courts are unable to entertain.
Ford v. Trustees of the Ottawa Civic Hospital 10 is another, more recent, Ontario case. The High Court held that the plaintiff, an employee under a collective agreement, was not entitled to maintain
7 (1977) 13 N.R. 233.
8 R.S.Q. 1964, c. 141.
9 (1967) 60 D.L.R. (2d) 105. 1 ° (1973) 37 D.L.R. (3d) 169.
an action but was required to settle his claim through arbitration. Subsection 37(1) of The Labour Relations Act of Ontario" provides that every collective agreement shall provide for final and binding arbitration:
37.—(1) Every collective agreement shall provide for the final and binding settlement by arbitration, without stoppage of work, of all differences between the parties arising from the interpretation, application, administration or alleged violation of the agreement, including any question as to whether a matter is arbitrable.
But the respective sections of the Quebec and Ontario Acts are not identical to section 155 of the Canada Labour Code. The latter (reported supra) provides that every collective agreement shall con tain a provision for final settlement, by arbitration or otherwise. Plaintiff claims that section 155 does not impose arbitration.
Section 22 of the Labour Relations Act 12 of British Columbia is closer, almost identical to section 155 of the federal Code:
22. (1) Every collective agreement entered into after the commencement of this Act shall contain a provision for final and conclusive settlement without stoppage of work, by arbitra tion or otherwise, of all differences between the persons bound by the agreement concerning its interpretation, application, operation, or any alleged violation thereof.
(2) Where a collective agreement, whether entered into before or after the commencement of this Act, does not contain a provision as required by this section, the Minister shall by order prescribe a provision for such purpose, and a provision so prescribed shall be deemed to be a term of the collective agreement and binding on all persons bound by the agreement. [The underlining is mine.]
Plaintiff relies strongly on a Supreme Court judgment of 1962 which considered the above British Columbia clause. In Howe Sound Com pany v. International Union of Mine, Mill and Smelter Workers (Canada), Local 663 13 , it was argued that the provision in the agreement that the decision of the board shall be final, read in the light of subsection 22(1) of the British Columbia Act, had the effect of prohibiting recourse to the courts by either party. Cartwright J., delivering the judgment on behalf of the Court, said this at page 330:
1 R.S.O. 1970, c. 232. 12 S.B.C. 1954, c. 17.
" [1962] S.C.R. 318.
Even if the agreement did not contain article 25 and the concluding sentence of the first paragraph of clause B of article 16, quoted above, it would be my opinion that words clearer than those used in the agreement and in the statute would be necessary to have the effect of ousting the jurisdiction of the courts. In my view it is open to the parties should occasion arise, to question the jurisdiction of the board or the validity of any award it makes in such manner as is permitted by the Arbitration Act, R.S.B.C. 1960, c. 14 or by the common law.
It would not, of course, be open to the parties in the present action to press any claim in this Court, including the validity of any award, under the aforementioned Arbitration Act or the common law. Any relief sought in this Court must be found in a federal statute. And the words of the agree ment binding both parties in the case at bar are not obscure: paragraph 4 of the memorandum of agreement of September 1, 1971, reads:
4. The jurisdiction of the Arbitrator shall extend and be lim ited to the arbitration, at the instance in each case of a railway, being a signatory hereto, or of one or more of its employees represented by a bargaining agent, being asignatory hereto, of;
(A) disputes respecting the meaning or alleged violation of any one or more of the provisions of a valid and subsisting collective agreement between such railway and bargaining agent, including any claims, related to such provisions, that an employee has been unjustly disciplined or discharged; and
(B) other disputes that, under a provision of a valid and subsisting collective agreement between such railway and bargaining agent, are required to be referred to the Canadian Railway Office of Arbitration for final and binding settle ment by arbitration,
but such jurisdiction shall be conditioned always upon the submission of the dispute to the Office of Arbitration in strict accordance with the terms of this Agreement.
"Dispute" is defined in subsection 107(1) of Part V of the Canada Labour Code:
107. (1) In this Part,
"dispute" means a dispute arising in connection with the enter ing into, renewing or revising of a collective agreement, in respect of which notice may be given to the Minister under section 163;
The words in that memorandum of agreement between both parties are really quite clear: they embrace the very issue now before this Court, namely whether or not the current collective agreement includes the "crew consist" award.
That cannot but be a dispute respecting the mean ing of a collective agreement.
The plain meaning of subsection 155(1) is that every collective agreement shall contain a provi sion for final settlement, whether it be by arbitra tion or otherwise. The two parties in this case have already agreed that it not be "otherwise", but that it be by arbitration, as spelled out in the Septem- ber 1, 1971 agreement. Moreover, the final settle ment is to be of "all" differences, including the "interpretation" or the "application" of the collec tive agreement.
If a collective agreement does not contain a provision for final settlement, then the board, not this Court, shall under subsection 155(2) by order furnish a provision for final settlement. If the collective agreement does contain a proviso for final settlement, and that proviso is not arbitra tion, but "otherwise", then the Act does not pro vide a specific remedy or procedure to be followed; it does not inescapably follow that the relief would be found in the Federal Court. In any event, plaintiff has not established that an agreement between both parties contains a provision for final settlement other than by arbitration.
The Federal Court, being a statutory court, is limited to the powers granted to it by the laws of Parliament. The Code makes it mandatory that disputes of interpretation be settled by arbitration, when arbitration is provided, as it is clearly in this case. Once the arbitrator, here the single arbitra tor from the Canadian Railway Office of Arbitra tion, has made his determination, as he is empow ered to do under section 157 of the Code, then it may be filed in the Federal Court under section 159. When so registered, it has the same force and effect as if the decision had been obtained in this Court.
In Port Arthur Shipbuilding Company v. Arthurs 14 the Supreme Court of Canada held that section 34 of The Labour Relations Act 15 of Ontario was clear and unambiguous, it compelled recourse to an arbitration board, there was no alternative course of action to the parties, the
14 [1969] S.C.R. 85.
15 R.S.O. 1960, c. 202.
board was therefore a statutory creation and hence subject to review in the courts by certiorari. Judson J. said at page 92:
It is true that the British Columbia legislation is very similar to that in effect in Ontario. But there are differences, the most important of which is that the British Columbia legislation provides for the settlement of disputes under the collective agreement by arbitration or otherwise, whereas the Ontario legislation provides for no alternative except arbitration. This was recognized by Cartwright J., who expressly reserved his opinion on whether the Court of Appeal of Ontario in Rivando were correct in their interpretation of the Ontario legislation. [The underlining is mine.]
Following these and other decisions of the Supreme Court of Canada it is therefore estab lished that, because of the "or otherwise" feature of section 155 of the Code, the arbitrator provided thereunder does not constitute a statutory board and is not subject to review by way of certiorari. Had C.P.R. brought this matter under arbitration under section 155 it may not thereafter have asked the courts to review the decision of the arbitrator. Section 156 of the Code confirms that:
156. (1) Every order or decision of an arbitrator appointed pursuant to a collective agreement or of an arbitration board is final and shall not be questioned or reviewed by any court.
(2) No order shall be made, process entered or proceeding taken in any court, whether by way of injunction, certiorari, prohibition, quo warranto or otherwise, to question, review, prohibit or restrain an arbitrator or arbitration board in any of his or its proceedings under this Part.
(3) For the purposes of the Federal Court Act, an arbitrator appointed pursuant to a collective agreement or an arbitration board is not a federal board, commission or other tribunal within the meaning of that Act.
But it does not follow from these decisions that a party to a binding collective agreement containing an arbitration clause under subsection 155(1) is at liberty to ignore that clause and commence pro ceeding before the courts. And, surely, section 156 cannot be used as a vehicle to bypass the arbitra tion route agreed to between both parties under section 155.
It was clearly the intention of Parliament, as expressed in the preamble of the Code to extend its support to and "encouragement of free collective bargaining and the constructive settlement of dis putes". Section 155 is manifestly intended to pro-
vide a method for "final settlement" of "all differ ences between the parties".
I am of the view, therefore, that this Court has no jurisdiction to entertain the interpretation of the collective agreement between the parties as this is a matter that can only be decided by resort to the machinery provided in the agreement be tween the parties and the Canada Labour Code.
Plaintiffs action is dismissed with costs.
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