J. Q.B. A.D. 1994 No. 3853 J.C.S. IN THE COURT OF QUEEN'S BENCH JUDICIAL CENTRE OF SASKATOON IN THE MATTER OF AN APPLICATION BY THE APPLICANT, INTERCONTINENTAL PACKERS LTD., TO SET ASIDE AN ARBITRATION AWARD MADE IN RESPECT OF THE APPLICANT AND THE RESPONDENTS, UNITED FOOD COMMERCIAL WORKER'S INTERNATIONAL UNION LOCAL 248-P AND FRED CUMMING BETWEEN: INTERCONTINENTAL PACKERS LTD. ("Intercon") and UNITED FOOD COMMERCIAL WORKER'S INTERNATIONAL UNION, LOCAL 248-P (the "Union") and FRED CUMMING (the "Grievor") RESPONDENTS W.T. Molloy, Q.C. for the applicant G. Bainbridge for the respondent FIAT LAING J. March 27, 1995 This is an application for judicial review of aunanimous arbitration award by a three-person panel datedDecember 1, 1994 which reinstated the respondent Cumming as anemployee of the applicant. The parties, including the respondent Union had entered into "mutual agreement" dated January 12, 1993 which was back-to-work agreement for the respondent grievor following his termination as an employee on October 1, 1992. The grievance considered by the Arbitration Board in this matter resulted from the grievor again being terminated by the employer on August 14, 1993. The applicant takes the position that the "mutual agreement" was what is colloquially referred to as "last chance agreement". It states that based on this agreement and the evidence lead at the hearing, the Arbitration Board was obliged to uphold the termination. The application raises the question of the standard of judicial review applicable to the Board's interpretation of the mutual agreement document, and to the award in general. THE AWARD i) Facts Found By The Board The respondent grievor commenced his employment with the applicant on October 5, 1970. Prior to the year 1992 his discipline record consisted of one 10-hour suspension for insubordination in the year 1991. In the year 1992 the respondent grievor and his wife divorced. On August 27, 1992 he submitted his resignation to the company. The Board found: What apparently precipitated the Grievor resigning from Intercon was his involvement in difficult divorce proceeding with his spouse, over which his Employer had been served with Notice of Continuing Garnishee, and that the Grievor had received second impaired driving conviction, for which he was to be sentenced to weeks at St. Louis. Representatives of the applicant contacted the grievor and convinced him not to quit. The evidence at the hearing was that he had been valuable, and for the most part trouble- free employee prior to August 1992. It was agreed that he would be suspended indefinitely, which would allow him to attend the impaired driving treatment program at St. Louis, and that he would enter into an agreement spelling out conditions for his return to work. The conditions included alcohol counselling, abstinence from alcohol, attendance at AA meetings, etc. The grievor acknowledged he had drinking problem and was prepared to sign the agreement, as was the Union. After the grievor returned to work and prior to the mutual agreement being signed, the grievor on October 1, 1992 left work one hour early at 3:00 p.m. without authorization and without notifying the employer. He had punched his time card when he entered in the morning which showed his time out at 4:00 p.m. that day. He gave as his reason for leaving one hour early that he wished to consult his lawyer. found: At this time, the Grievor was having continual difficulties in his divorce proceedings and ultimately replaced lawyers. The grievor was terminated for the foregoing infraction on October 7, 1992. He filed grievance. The grievance was resolved by the parties entering into new mutual agreement for two-year period dated January 12, 1993. This agreement included the terms referred to in the earlier agreement and included clause that he would not be absent from work without leave. The agreement concluded with the clause: Failure to follow the above plan will result in disciplinary action being taken by the Company, up to and including discharge. As noted by the Board, the grievor's termination for leaving work one hour early became three-month suspension without pay. The grievor carried out the terms of the mutual agreement until Saturday, August 14, 1993 when he again absented himself from work without authorization and without notifying the applicant. The grievor had learned day or two earlier, that his application to vary maintenance order had been unsuccessful. He testified that he was extremely stressed out and wanted to be away from everyone. He went to friend's house and helped him lay bricks all day. He was found there by the president of the Union at 5:00 p.m. that date. The Union president testified that "the grievor was not himself". The grievor proceeded to tell the Union president his various matrimonial problems. By memo dated August 18, 1993, the grievor was terminated. He filed grievance. ii) Issues Addressed by the Board The Board ruled that the mutual agreement was not a"last chance agreement". It stated its reasoning as follows: While it is true clause 2(10) of the Mutual Agreement states "failure to follow the above plan will result in disciplinary action being taken by the Company up to and including discharge", this clause must be compared to the clause previously used by Intercon in Mutual Agreement as set out in Arbitrator Stevenson's decision in U.F.C.W. Vanhouwe and Intercontinental Packers Ltd. (Unreported decision May 25, 1990) wherein the Mutual Agreement provided "failure to follow the above plan of action will result in immediate dismissal." The Employer gave evidence that they had made it clear to the Grievor that if he failed to abide by the Mutual Agreement his position would be terminated. The Grievor acknowledged that this was also his understanding. However, the Mutual Agreement does not reflect this position. The Mutual Agreement provides for range of discipline, not just dismissal. With respect, the Employer cannot submit that it verbally intended one thing but entered into contract stating something else. For the Mutual Agreement to preclude this Board from acting, the clause would have read something to the effect that "failure to follow the above plan will result in immediate dismissal, and the Parties agree that Board of Arbitration will have no authority to interfere with the terms of this Mutual Agreement." The Board next considered whether the penalty imposed was appropriate. They acknowledged the grievor was guilty of serious infraction which breached the mutual agreement, as well as letter of understanding between the applicant and the Union that employees would notify the company if they were to be absent from work due to illness or any other reason. They accepted the grievor's testimony that he was "stressed out". The Board stated: This testimony is accepted in that it is consistent with his previous actions such as quitting when faced with garnishee summons at work and two week sentence at St. Louis. The Board went on to say: Given the Grievor's "capacity" on August 14, 1993, this Board finds the penalty of discharge excessive, especially when coupled with the Grievor's years of seniority and previous disciplinary record. Given this Board's finding in regard to the Grievor's "capacity" on August 14, 1993, this Board is not prepared to accept that the August 14, 1993 incident amounted to culminating incident. Therefore, this Board rulesthat the Grievor be reinstated to hisformer position immediately. However, theGrievor shall receive no compensation. The period from August 18, 1993 to thedate that this Award shall be treated as asuspension. The penalty imposed therefore was a suspension without pay forapproximately 16 months. STANDARD OF REVIEW The standard of review applicable to consensual arbitration boards in this Province since Shalansky and Saskatchewan Union of Nurses v. Regina Pasqua Hospital (1983), 1983 CanLII 117 (SCC), 22 Sask. R. 153 (S.C.C.), with respect to interpretation of the contract submitted to the consensual board is the patently unreasonable test, absent jurisdictional or procedural fairness issues. This test was reaffirmed in Canada Post Corp. v. Public Service Alliance of Canada (1991), 93 Sask. R. 92 (Sask. C.A.) and more recently in Yorkton Union Hospital v. Sask. Nurses Union (1993), 1993 CanLII 6637 (SK CA), 109 Sask. R. 198 (Sask. C.A.). The "patently unreasonable" test was recently commented on by Sopinka J. in C.J.A. v. Bradco Construction Limited (1993), 12 Admin. L.R. (2d) 15 at p. 187, speaking on behalf of the court wherein he stated: patently unreasonable error is more easily defined by what it is not than by what it is. This Court has said that finding or decision of tribunal is not patently unreasonable if there is any evidence capable of supporting the decision even though the reviewing court may not have reached the same conclusion (W.W. Lester (1978) Ltd. v. U.A., Local 740, 1990 CanLII 22 (SCC), [1990] S.C.R. 644, at pp. 687-688), or, in the context of collective agreement, so long as the words of that agreement have not been given an interpretation which those words cannot reasonably bear (Bradburn, supra, per Laskin C.J., at p. 849). What these statements mean, in my view, is that the court will defer even if the interpretation given by the tribunal to the collective agreement is not the "right" interpretation in the court's view nor even the "best" of two possible interpretations, so long as it is an interpretation reasonably attributable to the words of the agreement. Or, as stated by Dickson J. in C.U.P.E., Local 963 v. New Brunswick Liquor Corp., [1979] S.C.R. 227, 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 this case, Sopinka J. pointed out that the test refers to questions of law related to the interpretation of the collective agreement and does not necessarily apply to the interpretation of statute or rule of common law. At p. 184 he stated: the rationale for deferring to an arbitrator's interpretation of collective agreement does not necessarily apply to afford deference to finding of law made by the arbitrator, when this involves interpretation of statute or rule of the common law. Generally, these are not matters within the expertise of the arbitrator, and in the absence of legislative intention that deference should be paid to findings of law made by an arbitrator, such findings would be reviewable on standard of correctness. In this regard, distinction can be drawn between arbitrators, appointed on an ad hoc basis to decide particular dispute arising under collective agreement, and labour relations boards responsible for overseeing the ongoing interpretation of legislation and development of labour relations policy and precedent within given labour jurisdiction. To the latter, and other similar specialized tribunals responsible for the regulation of specific industrial or technological sphere, greater degree of deference is due their interpretation of the law notwithstanding the absence of privative clause. (emphasis added) The foregoing statements by Sopinka J. were preceded by the remarks of La Forest J. speaking on behalf of the majority in Dayco (Canada) Ltd. et al. v. C.A.W. (1993), 102 D.L.R. (4th) 609 (S.C.C.), wherein he stated at pp. 633-634: As noted in Canada (Attorney- General) v. Mossop (1993), 100 D.L.R. (4th) 658, while courts will defer to arbitrators or other tribunals on certain determinations of law having regard to their relative expertise or to the role or functions accorded to them under their constituent legislation (including issues relating to efficiency), other more general questions of law unrelated to these factors do not call for the same level of judicial deference. For the purpose of deciding whether question is one on which deference should be shown, the courts may have recourse to many of the same factors that have been used in pragmatic and functional approach to jurisdiction. THE TEST APPLICABLE TO THE MUTUAL AGREEMENT The question that arises, is whether interpretation of the mutual agreement falls within the core area of expertise attributed to labour arbitrators, in which case the standard of review is patent unreasonableness or outside of such area, in which case the standard is one of correctness. The applicant suggests the latter. It relies on the comments of Sopinka J. and La Forest J. set out in the foregoing and states that the mutual agreement must be interpreted according to the principles of common law. The test is, therefore, one of correctness. am not able to agree. Once it is conceded, as it is, that labour arbitrators are entitled to deference in applying common law principles of interpretation to the provisions of collective agreement, it seems to me to follow that such deference would apply equally to the interpretation of any negotiated contract arising out of the same agreement. To hold otherwise would be to apply more stringent standard in the interpretation of subsidiary agreements, than that which applies to the master agreement. Such conclusion would not make sense as matter of principle or as matter of policy. For this reason alone am not able to subscribe to the same. If the arbitrator hasthe expertise to interpret the collective agreement, it mustfollow that such person has the expertise to interpret anysubsidiary agreements that arise out of the collectiveagreement. I therefore hold that the standard of review withrespect to the Board's interpretation of the mutual agreementis one of patent unreasonableness. For the reasons that ariseout of the discussion which follows, I hold it was notpatently unreasonable. If I am wrong in the foregoing analysis, and thetest is one of correctness, I would nevertheless hold that theBoard was correct in arriving at the interpretation it did. The applicant's submission is that the mutual agreement is "last chance agreement". Its argument in this respect is not based on the wording of the agreement, but the fact that it advised or warned the respondent Cumming that if he breached the agreement he would be fired. It seeks to elevate this statement of intention on its part to reflection of the intention of the parties based on the fact that the respondent Cumming acknowledged that he received such warning. The understanding by the respondent Cumming that the applicant would fire him if he breached the mutual agreement, does not mean that he agreed with what he had been told. If there was evidence of positive agreement on his part the same is not evident from the award or in the material made available on this application. If there was such an agreement, assume the applicant would have argued that the written contract was amended by an oral agreement between the parties, which it did not do. In the absence of oral agreement the question may be asked on what basis such statement of intention on the part of the applicant to the respondent grievor was even admissible before the Board. The parole evidence rule precludes the receipt ofverbal evidence offered for the purpose of adding to,subtracting from, varying or qualifying in any manner theterms of the written document (Cross on Evidence, 6th ed., p.61). Does the statement the applicant wishes to rely uponbreach this fundamental rule? With respect, it does, if it isoffered for the purpose of qualifying clause 10 of theagreement which provides for a range of discipline andsubstituting therefore the word "dismissal". The only basis for the receipt of oral evidence with respect to the terms of written contract is in the event there is an allegation of intrinsic or extrinsic ambiguity in its terms. No such allegation was made on this application and indeed the wording of clause 10 is very straightforward and would not admit of such an argument. There is therefore, no basis for the admissibility of an oral statement of intention on this account. The applicant's statement to the grievor of its intention, was admissible before the Board for the purpose of supporting its argument that termination was the appropriate penalty, given the fact that the grievor was warned this could occur. However, it seems to me, the statement was inadmissible for any other purpose. For the foregoing reasons, conclude that the Board's interpretation of the mutual agreement with respect to clause 10 was correct. CULMINATING INCIDENT In the alternative, the applicant took issue with the fact the Board refused to apply the doctrine of culminating incident and conclude that on the basis of the respondent grievor's employment record, the final incident justified termination of his employment. The Board's reasoning in this respect is set out at p. of this decision. It will be noted that it took into account all relevant factors, including the quality of the "offence" bearing in mind what it perceived to be the grievor's lack of "capacity" on the day he absented himself, his seniority record, and his disciplinary record. To theextent the Board concluded that it was not "prepared to acceptthat the August 14, 1993 incident amounted to a culminatingincident" I interpret this to mean that taking into accountthe grievor's absence from work on August 14, 1993, togetherwith his previous employment record, the appropriate penaltywas not discharge. This it was entitled to do. The application is dismissed with one set of costs to the respondents.
FIAT An employer sought judicial review of a unanimous decision by an arbitration board ordering the reinstatement of an employee. The employee had previously been terminated and then reinstated by the mutual agreement of the union and the employer. The employee was then terminated a second time for a repeat infraction. The employer took the position that the agreement was a 'last chance' agreement and that the arbitration board was therefore required to uphold the second termination. The Board ruled that the agreement was not a 'last chance' agreement because the agreement stated on its face that a further infraction would result in 'discipline up to and including dismissal'. The Board therefore reinstated the employee but imposed a 16 month suspension, without pay. HELD: 1)On issues involving the interpretation of a collective agreement, an arbitration board's decision can only be overturned if it is patently unreasonable. If there is any evidence on the basis of which the board could have found as it did then its decision should not be interfered with, even if the Court would have come to a different conclusion on the same evidence. 2)Decisions involving the interpretation of a statute or the common law, however, are not within an arbitrator's core area of expertise and should therefore be reviewed with reference to the standard of correctness. 3)In this case, the 'mutual agreement' was subsidiary to the collective agreement and its interpretation was therefore within the core area of the arbitrators' expertise. The standard to be applied to the board's interpretation of the mutual agreement was therefore one of patent unreasonableness. 4)The employer's evidence that it had verbally advised the employee that he would be fired for any repeat infraction was rightly rejected as contravening the parol evidence rule. The board's interpretation of the mutual agreement was therefore not patently unreasonable and in fact was correct. 5)The board was also entitled to reject the employer's argument based upon the doctrine of 'culminating incident' and it did not act unreasonably in so doing.