Docket No. 2788 THE COURT OF APPEAL FOR SASKATCHEWAN Bayda C.J.S., Cameron and Sherstobitoff JJ.A. GRAIN SERVICES UNION (INTERNATIONAL LONGSHORE AND WAREHOUSE UNION- CANADIAN AREA) AND LAVERN CHYPISKA APPELLANTS, -and- SASKATCHEWAN WHEAT POOL COUNSEL: Larry W. Kowalchuk, for the appellants. Robert G. Richards, for the respondent. DISPOSITION: On appeal from: Q.B.G. No. 290 of 1997 J.C.R. Appeal Heard: 10 February 1998. Appeal Dismissed: 10 February 1998 Oral Reasons By: The Honourable Mr. Justice Cameron In Concurrence: The Honourable Mr. Justice Sherstobitoff Written Reasons By: The Honourable Chief Justice Bayda (in dissent) CAMERON J.A. (orally) [1] Mr. Justice Sherstobitoff and I are not convinced Madam Justice Hunter erred in concluding that the majority decision of the Board of Arbitration in the grievance of Lavern Chypiska was "patently unreasonable": Canada (Attorney General) v. Public Service Alliance of Canada, 1993 CanLII 125 (SCC), [1993] S.C.R. 941. We are of the view it was open to her to come to this conclusion on the footing the majority decision rested upon an interpretation of the collective bargaining agreement that the words of the agreement could not reasonably bear: Shalansky v. Regina Pasqua Hospital Board of Governors, 1983 CanLII 117 (SCC), [1983] S.C.R. 303 at 307; [2] To begin with, we can find no material error in Madam Justice Hunter's analysis of the majority's approach to the interpretation of the provisions in question. She was of the view their approach was fundamentally flawed, noting in effect that the majority had brushed aside basic grammatical conventions; had proceeded upon a bad principle of construction obviously weighted in favour of Mr. Chypiska's grievance; had disregarded the ordinary meaning of some words; and had violated the terms of the agreement precluding alteration of its provisions, including alterations wrought by changing the ordinary meaning of any of the words of the agreement in the course of interpreting its provisions. The resulting interpretation was not necessarily unreasonable, though this points in that direction, and we do not take Madam Justice Hunter to have thought otherwise, for her analysis extends beyond the majority's approach to the interpretation of the provisions. [3] Nor can we find any material error in the remainder of her analysis, including that concerned with the phrase "pursuant to Article 28 ... or 26 ... as the case may be," appearing in Article 16. She held, in effect, that one cannot ignore the phrase, nor read it out of existence, nor re- write it, and that if the words of the phrase be given their ordinary meaning the interpretation of the majority could not withstand analysis. [4] Finally, we can find no error in Madam Justice Hunter's identification or application of the governing standard of review. She noted at the beginning that she was not empowered to interfere with the decision of the Board of Arbitration unless it was "patently unreasonable." And she concluded at the end, having analyzed the matter as she did, that the decision was patently unreasonable. In the circumstances we think it was open to her to come to that conclusion, and so we would dismiss the appeal. [5] BAYDA C.J.S. (dissenting) There is no dispute between the parties that the award under scrutiny was made by consensual board of arbitration interpreting collective bargaining agreement. Given that circumstance, there is no dispute that the central issue placed before the Chambers judge and before this Court, namely, the reviewability of the board's interpretation, requires an application of the test prescribed by Shalansky v. Regina Pasqua Hospital Board of Governors, 1983 CanLII 117 (SCC), [1983] S.C.R. 303. The test is set out in these words by Laskin C.J.C. speaking for the Court: Bayda C.J.S. himself concluded that the Board was presented with two reasonable constructions and hence was entitled to choose the one it did rather than the one preferred by the Chief Justice. In the result, he dismissed the appeal. In my opinion, this is the correct approach. Once it is accepted that there are two reasonable interpretations, the suggestion of reviewable error of law in consensual arbitration disappears ... The decision of the arbitrator can be set aside only if it involves an interpretation which the words of the agreement could not reasonably bear. Earlier he said that there is "no significant difference" in the meaning of the three terms "outrageous", "patently unjustifiable" and "patently unreasonable" and concluded, "[i]ndeed, it would be my view that, apart from question of emphasis, the test of unreasonableness or test of clearly wrong is also no different". [6] Ten years later the Court, speaking through Cory J. in Canada (Attorney General) v. Public Service Alliance of Canada, 1993 CanLII 125 (SCC), [1993] S.C.R. 941 defined "patently unreasonable" at 963: It is said that it is difficult to know what "patently unreasonable" means. What is patently unreasonable to one judge may be eminently reasonable to another. Yet any test can only be defined by words, the building blocks of all reasons. Obviously, the patently unreasonable test sets high standard of review. In the Shorter Oxford English Dictionary "patently", an adverb, is defined as "openly, evidently, clearly". "Unreasonable" is defined as "[n]ot having the faculty of reason; irrational ... Not acting in accordance with reason or good sense". Thus, based on the dictionary definition of the words "patently unreasonable", it is apparent that if the decision the Board reached, acting within its jurisdiction, is not clearly irrational, that is to say evidently not in accordance with reason, then it cannot be said that there was loss of jurisdiction. This is very strict test. It is this same "very strict test" court must apply in determining whether an interpretation placed by board of arbitration upon collective agreement falls into the category of "a interpretation which the words of the agreement could not reasonably bear." [7] In my respectful view the interpretation advanced by Saskatchewan Wheat Pool, the respondent, and favoured by the Chambers judge and my colleagues in the majority, is reasonable one. It may even be "more reasonable" than the interpretation advanced by Ms. Chypiska, the appellant. Indeed it may even be the correct interpretation. That, of course, would make the Chypiska interpretation wrong. But for the purposes of determining the reasonableness of the Chypiska interpretation the reasonableness, greater reasonableness or correctness of the Pool interpretation or the wrongness of the Chypiska interpretation are, strictly speaking, irrelevant. Proof of one or more of those four things does not automatically prove or disprove the reasonableness of the Chypiska interpretation. It is still necessary to specifically examine the Chypiska interpretation from the prospective of its reasonableness. conclusion respecting its unreasonableness must stand on its own, as it were, without being propped up by the reasonableness or correctness of the Pool interpretation or, for that matter, by its (the Chypiska interpretation's) own wrongness. That is the approach prescribed by Shalansky. Despite her words to the contrary, the Chambers judge, in my respectful view, did not follow that approach. She appears to have concluded that because the two interpretations could not stand together the reasonableness of the Pool interpretation, which she preferred, wiped out the reasonableness of the Chypiska interpretation. [8] My reasons for deciding that the Chypiska interpretation is reasonable were reflected in my discussion with counsel during the hearing. now elaborate those reasons. [9] The pivotal article in the collective agreement is Article 16: ARTICLE 16 SEVERANCE ALLOWANCE When an employee's position is eliminated as result of technological change, reorganization resulting from technological change, normal permanent closure, rail line abandonment or consolidation, then pursuant to Article 28, Technological Change Adjustment, or Article 26, Norman Permanent Closure, Rail Line Abandonment and Consolidation as the case may be the employee shall be entitled to two (2) weeks' pay for each year of service, pro-rated for part years. The crucial words are "pursuant to." Most lawyers have seen and used these words in legal contexts innumerable times. The words commonly mean "according to." The Shorter Oxford Dictionary, 3d ed. (Oxford: Clarendon Press) defines them "[f]ollowing upon, consequent on and conformable to; in accordance with." One definition offered by Black's Law Dictionary, 6th ed. (St. Paul: West Publishing Co., 1990) of "pursuant" is "by reason of something." Using only the material words of the article and using those definitions instead of "pursuant to" Article 16 reads: When an employee's position is eliminated as result of technological change... [or] normal permanent closure ... then [according to] [consequent upon] [by reason off Article 28 ... or Article 26 ... as the case may be the employee shall be entitled to two (2) week's pay for each year of service pro-rated for the part years. [10] It is perfectly rational for reader of this version of Article 16 to conclude that if one were to look up either Article 28 or Article 26, as the case may be, one would find that that particular article provides to an employee who fits one of the several descriptions contained in Article 16 what Article 16 says it does, namely, that the employee shall be entitled to two (2) weeks pay for each year of service, pro- rated for part years. When the reader examines Article 28, however, he is surprised to find that although the article contains 10 sub- articles and covers in excess of one page in the agreement neither the italicized words nor reference to Article 16 are anywhere to be found. Sub-article uses the word "severance" and this may be reference oblique as it might be to the italicized words. But that is all. Therefore, to say that "according to" or "by reason of" Article 28 an employee who fits one of the several descriptions contained in Article 16 is provided with the entitlement that Article 16 in the italicized words say it provides, is simply wrong. That entitlement may be provided to the employee "by reason of" some other article but not "by reason of" Article 28. [11] An examination of Article 26 does not bring about much better result. The italicized words are nowhere mentioned in the Article but there is reference to Article 16. Article 26 deals with only four categories of senior employees whose positions are eliminated as consequence of normal permanent closure, rail line abandonment or consolidation. (Where these employees are entitled to severance pay it is limited to "a maximum of twenty-six (26) weeks pay"). The Article clearly does not concern itself with all of the employees whose positions are eliminated by any one of those three developments as they are described in Article 16. Therefore to say that "according to" or "by reason of" Article 26 those employees have the entitlement that Article 16 in the italicized words says they have is simply not right. That broad entitlement may exist "by reason of" some other article but not "by reason of" Article 26. [12] So what is our rational reader to think? Is it irrational for him to conclude that "pursuant to" as the phrase is used in Article 16 does not mean "according to" or "consequent upon" or "by reason of" but means something else as it did for example in R. v. Melford Developments Inc., [1981] F.C. 627 (F.C.A.) referred to by the Chambers judge? It is clearly rational to 50 conclude in my respectful view. [13] The next question, therefore, becomes: What is that something else? What do the words "pursuant to" mean in this context? In my view they could mean two opposites: "for the purposes of" and "subject to". Once the ordinary or normal meaning of "pursuant to" is set to one side because the context does not fit, then, in my respectful view, it is as rational to adopt "for the purposes of" as it is "subject to" as the meaning of that phrase. Later will return to the rationality of adopting one meaning over the other. [14] shortened version of Article 16 using only the material words of the Article and using the phrase "for the purposes of" instead of "pursuant to" is this: When an employee's position is eliminated as result of technological change ... [or] ... normal permanent closure ... then [for the purposes of] Article 28 ... or Article 26 ... as the case may be the employee shall be entitled to two (2) weeks pay for each year of service. This is in essence the Pool interpretation which the Chambers judge adopted as the only interpretation which the words of the Article can bear. The effect of this interpretation is to vest in Articles 28 and 26 the role of conferring the right of entitlement upon only the employees described in those Articles and to vest in Article 16 the subsidiary role of describing the details of the entitlement. [15] shortened version of Article 16, again using only the material words and using this time the phrase "subject to" instead of "pursuant to" is this: When an employee's position is eliminated as result of the technological change ... or ... normal permanent closure ... then [subject to] Article 28 ... or Article 26 as the case may be the employee shall be entitled to two (2) weeks pay for each year of service. This in essence is the Chypiska interpretation favoured by the majority of the Board in its award (but described in the majority's reasons with less succinctness). The effect of this interpretation is to vest in Article 16 the role of conferring general right of entitlement upon all employees whose positions are eliminated for the reasons described and to vest in Articles 28 and 26 the role of limiting, modifying or circumscribing that general entitlement. [16] Although the context of the words "pursuant to" in the Melford case cited by her is very different from the context in the present case, the Chambers judge heavily relied on that case to buttress her conclusion that the Pool interpretation is the only one which to words of the collective agreement can reasonably bear. Ironically, close analysis of the decision in that case reveals that insofar as it ascribes to the phrase "pursuant to" the meanings "as circumscribed by" or "within the limits of" it supports not the Pool interpretation but the Chypiska interpretation. Mr. Justice Urie's holding for the Court may be paraphrased for our purposes as follows: Where one paragraph of an agreement confers right and another paragraph prescribes that the right can be altered "pursuant to this Convention", the words "pursuant to" in that context mean "within the limits of" or "as circumscribed by". [17] To substitute the Melford meanings for "pursuant to" where that phrase occurs in Article 16 has the effect of assigning to Articles 28 and 26 the distinct role of "limiting" or "circumscribing". The question arises: "limiting" or "circumscribing" what? The answer, of course, is limiting or circumscribing the general entitlement conferred by Article 16 upon all of the employees encompassed by that Article. It reasonably follows that Article 16 confers an entitlement upon the employees encompassed by that Article, and Article 26 modifies, Innits or circumscribes that entitlement for four classes of senior employees in certain circumstances but leaves untouched the entitlement insofar as it relates to employees who do not fall into those four classes. Similarly Article 28 modifies limits or circumscribes the entitlement by giving the employer the right to provide alternative employment and subjecting the employees to lay-off procedures in certain circumstances before the severance allowance becomes available to the employees. That in my respectful view is perfectly rational interpretation to put on the words in Article 16 in the context of Articles 28 and 26 as well as in the context of the whole agreement. Two related things follow: one, the Chambers judge was wrong to use the Melford decision to buttress her conclusion that the Pool interpretation was the only one which the words of the collective agreement could reasonably bear; and two, based on the Melford meanings of "pursuant to" the Chypiska interpretation is reasonable. [18] return briefly to the issue of the rationality of choosing the phrase "pursuant to" to mean "subject to" even though it is reasonable to choose "for the purposes of." [19] consideration of the issue immediately raises these questions: Is it "clearly irrational" (to use Cory J's phrase) for the parties to collective agreement to provide right to severance allowance to every employee whose position is eliminated as result of technological change through reorganization or otherwise (Article 16) and then to limit that right by giving the employer the right to provide the employee with alternative employment and failing that by giving the employee an option to exercise his right to severance allowance or be laid-off subject to recall (Article 28)? Is it "clearly irrational" for the parties to provide right to severance allowance to every employee whose position is eliminated as result of normal permanent closure, rail line abandonment or consolidation (Article 16) and then in the case of four categories of senior employees to first require them to bid for an alternative position and if unsuccessful to elect either to be placed on lay-off or to receive the severance allowance limited however to maximum of 26 weeks pay (Article 26)? In my respectful view the answer to both questions is an unequivocal "no". [20] am inclined to the view that once the normal and ordinary meaning of the words "pursuant to" must be set aside by reason of their context in Article 16 then the decision by an adjudicator to choose as the replacement for those words either "for the purposes" of or "subject to" is motivated more by the result he or she desires to obtain rather than by the fine legal principles of interpretation. In the end, the choice is more policy decision than decision driven by law. In my respectful view such policy decisions are better left to arbitrators in the field than to judges. [21] It is for these reasons that would allow the appeal and restore the arbitrators' majority award. [22] In the result the appeal is dismissed with costs on the usual scale.
The decision of the Board of Arbitration was held by the chambers judge to be fundamentally flawed in that the majority brushed aside basic grammatical conventions; had proceeded upon a bad principle of construction obviously weighted in favour of the grievance; had discarded the ordinary meaning of some words; and had violated the terms of the agreement precluding alteration of its provisions. She also held that one cannot ignore the phrase 'pursuant to Article 28 or 26', read it out of existence nor re-write it and that if the words were given their ordinary meaning the interpretation was patently unreasonable. HELD: The appeal was dismissed. 1)The trial judge did not err in concluding the majority decision of the Board of Arbitration was patently unreasonable. Its decision rested upon an interpretation of the collective bargaining agreement that the words of the agreement could not reasonably bear. 2)No material error was found in her analysis in finding that the decision was fundamentally flawed or in her analysis of the phrase 'pursuant to Article 28'. Nor in her identification or application of the governing standard of review. DISSENT: The appeal would have been allowed. 1)There was no dispute that the central issue, the reviewability of the board's interpretation, requires an application of the test prescribed by Shalansky. The Chambers judge did not follow that approach. Once it is accepted that there are two reasonable constructions, the suggestion of a reviewable error of law in consensual arbitration disappears. The decision can only be set aside if it involves an interpretation the words of the agreement could not reasonably bear. The patently unreasonable test is a very strict test. 2)The judge was wrong to use the Melford decision to support her conclusion that the Pool interpretation was the only one which the words of the collective agreement could reasonably bear. 3)Once the ordinary meaning of the words 'pursuant to' must be set aside by reason of their context in Article 16, the decision by an adjudicator to choose either 'for the purposes of' or 'subject to' is motivated more by the result desired rather than by fine legal principles of interpretation. Such policy decisions are better left to arbitrators in the field than to judges.