Southern Alberta Institute of Technology v. SAIT Academic Faculty Association, 2011 ABQB 392

Court of Queen ’ s Bench of Alberta Citation: Southern Alberta Institute of Technology v. SAIT Academic Faculty Association, 2011 ABQB 392 Date: 20110623 Docket: 1001 09109 Registry: Calgary IN THE MATTER OF the Labour Relations Code, R.S.A. 2000, c. L-1 AND IN THE MATTER OF the Collective Agreement between the Board of Governors of the Southern Alberta Institute of Technology and the SAIT Academic Faculty Association AND IN THE MATTER OF the SAIT Academic Faculty Association Grievance of Jack Kearney AND IN THE MATTER OF an Award by an Arbitration Board dated May 26, 2010 by J.

Leslie Wallace, Terry Sway and David Laird, Q.C. BETWEEN: The Board of Governors of the Southern Alberta Institute of Technology Applicant - and - The SAIT Academic Faculty Association Respondent _______________________________________________________

_______________________________________________________ Reasons for Judgment of the Honourable Madam Justice C.S. Phillips _______________________________________________________ 1. Background [ 1 ] This is an application for judicial review of an Arbitration Board decision issued on May 26, 2010. The Arbitration Board determined that Mr.

John Kearney, whose position as an instructor with the Southern Alberta Institute of Technology (“SAIT”) was terminated due to position abolishment on June 10, 2009, was entitled under the provisions of a collective agreement effective July 1, 2007 to June 30, 2010 (the “Collective Agreement”) to certain sums in addition to the three months pay in lieu of notice he received at the time of his termination.

Specifically, the Arbitration Board concluded that education allowances paid to degree-holding members of SAIT’s academic faculty are to be calculated into pay in lieu of notice, severance pay and vacation earned but not taken at the time of termination. The Board of Governors of the Southern Alberta Institute of Technology, which has brought this application for judicial review, submits that the Arbitration Board decision was unreasonable and does not fall within a specific range of possible, acceptable outcomes which are defensible in respect of the facts and law. 2.

Facts [ 2 ] The facts are straightforward and not in dispute. Mr. Kearney was hired by SAIT on July 7, 2005, as an instructor.

At that time, he was paid $5,646 per month, less statutory and optional deductions. [ 3 ] As a result of a 2005 arbitrated settlement between SAIT and the SAIT Academic Faculty Association (SAFA), SAIT instructors who are degree holders became eligible, in 2006, for an Education Allowance pursuant to s.46.01 of the Collective Agreement (the “Education Allowance”): 46.01 2006-2007 Education Allowance (Instructors) Instructors with appropriate academic qualifications shall be paid one, but not two or three of the annual allowances described in the following sub-sections. The allowance shall be paid monthly: (

a) Each instructor who has earned doctoral degree is entitled to an annual allowance of four thousand five hundred dollars ($4,500.00). Honorary degrees do not apply. (

b) Each instructor who has earned master’s degree is entitled to an annual allowance of three thousand dollars ($3,000.00) (

c) Each instructor who has earned baccalaureate degree is entitled to an annual allowance of one thousand five hundred dollars ($1,500.00). The degrees identified above must have been obtained from formal academic achievement from a recognized university or institution, as determined by SAIT.

[ 4 ] The Education Allowance was included in the Collective Agreement as one component of a substantial reorganization of the SAIT compensation structure. Prior to the 2005 arbitrated settlement, compensation for SAIT instructors was based on a grid set out in a document called the Manual of Instructor Preparation Standards (“MIPS”). Compensation for instructors’ educational attainments was built into the MIPS table, which comprised a grid of years of teaching or industry experience along one axis and multiples of hours of educational instruction received along the other.

This yielded a complex grid which the Arbitration Board described as “awkward and disputatious in practice.” The Collective Agreement replaced this complex compensation structure with a 13-step, single-line salary grid and the relatively straightforward Education Allowance provision set out above. [ 5 ] By letter dated May 15, 2008, in response to a request from SAFA, SAIT indicated that it would not include the Education Allowance and Long Service Allowance in its calculations of pensionable service. This was not grieved by SAFA.

SAIT maintained that it would have tendered a different monetary proposal in bargaining if such allowances were to be factored into pension calculations. [ 6 ] On July 16, 2008, SAIT abolished the instructor position held by Mr. Avery Harrison and, in calculating Mr. Harrison’s pay in lieu of notice, severance pay, and vacation pay earned but not taken at the time of termination, did not include the Education Allowance. This was also not grieved by Mr. Harrison and therefore not referred to SAFA. [ 7 ] Mr.

Kearney holds a Bachelor’s degree and, in the course of his employment with SAIT, pursuant to s.46.01, he received an annual education allowance of $1,500 paid monthly, in addition to his base salary. The Education Allowance comprised a separate line item on his pay stubs. Mr. Kearney’s position was abolished on June 10,

Section 16.01 of the Collective Agreement governs position abolishment, and provides: 16.01 The Employer shall give a permanent academic staff member three (3) months working notice or pay in lieu of notice that the academic staff member’s position is to be abolished effective immediately.

In addition to the such working notice or pay in lieu, the academic staff member shall receive severance pay in the amount of one (1) month pay for each full year of service to a maximum of twelve (12) months. [ 8 ] There is also provision in the Collective Agreement for the payment of vacation pay upon termination, at s.39.02: 39.02 An academic staff member will be paid for any vacation earned but not taken at the time of termination. [ 9 ] The Collective Agreement does not define the term “pay”, but “pay range”, “annual salary” and “monthly salary” are defined at s.1.01: 1.01 (s) “pay range” means a single salary grade established for (

i) Instructors as per

Section 46... 1.01 (d) “annual salary” means the annual amount of an academic staff member’s regular salary, but excluding any other compensation except that Acting Incumbency Pay shall be included for overtime calculations only; (r) “monthly salary” means annual salary divided by twelve (12) [ 10 ] As with the earlier termination of Mr. Harrison, in calculating pay in lieu of notice, severance pay, and vacation pay for Mr. Kearney, SAIT did not include the Education Allowance. Mr. Kearney grieved the calculation. The grievance was heard by the Arbitration Board on March 4, 2010, and their decision issued on May 26, 2010. 3. Analysis

Standard of Review [11] It is now well established, and the parties are agreed, that reasonableness is the standard when reviewing the decision of aLabour Board of Arbitration: Alberta v. Alberta Union of Provincial Employees, 2008 ABCA 258, 433 AR 159; United Association ofJourneymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Local 488 v. BantrelConstructors Co, 2009 ABCA 84, 448 AR 194. The reasonableness standard was described by the Supreme Court of Canada inDunsmuir v.

New Brunswick, 2008 SCC 9 , [2008] 1 S.C.R. 190, at paras. 47-49: Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards ofreasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result.Instead, they may give rise to a number of possible, reasonable conclusions... A court conducting a review for reasonableness inquiresinto the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes.

In judicialreview, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within thedecision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes whichare defensible in respect of the facts and law. The Arbitration Board Decision [12] The Arbitration Board began by briefly summarizing the parties’ arguments. It was SAFA’s contention that because “salary”is defined in the Collective Agreement, but “pay” is not, “pay” should be interpreted as meaning something different from “salary”.

Aproper and purposive

interpretation of “pay” in s.16.01 would in SAFA’s submission be to replicate what the employee would have received if theemployee had worked during the period of notice for which he was being compensated. Excluding the Education Allowance from pay inlieu of notice would result, in SAFA’s submission, in the absurd result that the employee would receive the allowance if his position isabolished with working notice, but would not receive it if the position is abolished immediately and the employee paid out.

To SAFA,“the case law has trended toward inclusion of non-salary items of compensation in calculating entitlements, both under collectiveagreements and in the common law of dismissals” (para. 14 of Arbitration Board’s decision). [13] SAIT contended that the term “pay” is normally synonymous with “salary”, which per the Collective Agreement does notinclude the Education Allowance, which is a stand-alone payment, never increasing over the term of the Collective Agreement.

SAITfurther argued that since July 2006 it had consistently taken the position that pay in lieu of notice was not to include allowances,(including the Education Allowance), and that SAFA’s refusal to grieve this earlier amounted to acquiescence. If the term “pay” islatently ambiguous, SAIT submitted this past practice should govern. Furthermore, SAIT pointed out it is not unusual upon terminationof an employee for overtime and benefit coverage to cease upon termination but which might continue with working notice. [14] Both parties pointed to the transition from the MIPS grid to the single-line compensation

schedule in support of theirrespective positions. It was SAIT’s contention that in taking educational attainment out of the single-line salary schedule, it was intendedthat the Education Allowance would stand entirely apart from salary entitlements. It was SAFA’s contention that in doing so, it wasintended that the Education Allowance would become an item of compensation to be considered part of instructors’ pay. The Arbitration Board determined: [18] ...that the issue is to be decided upon general interpretive principles.

The general interpretive approach for this board to use indeciding this case is well-known and not in any real dispute: We are to seek the intention of the parties as they have expressed it in theircollective agreement, and it is the “cardinal presumption” of interpreting the agreement that the parties are assumed to have intendedwhat they have said. It is presumed the words are used in their normal or ordinary meaning; but that presumption may be overcome bythe context of the agreement. Context may and should be sought from the entire agreement.

All words are presumed to carry meaning, sosuperfluity and redundancy are to be avoided if possible. Identical words are presumed to carry identical meaning, different wordsdifferent meaning; but again, context can displace this presumption.

[19] When there are two or more permissible

interpretations, arbitrators can prefer one of them because it better achieves harmony with other provisions of the agreement; because one is more administratively feasible than the other; because one would produce an absurd or unreasonable result; or because one promotes labour relations certainty or labour relations fairness.

Where a contractual expression is ambiguous, either patently so (the ambiguity is apparent on the face of the writing) or latently so (the ambiguous character is discovered by evidence outside the writing), resort may be had to extrinsic evidence like negotiating history or past practice to choose the meaning that best expresses the parties’ intent. But if the wording is clear and permits only one

interpretation, the arbitration board must give effect to it whether or not it appears fair or fits the arbitrators’ own views of what is reasonable. None of this is remotely original; it is but a partial summation of the discussion of principles of

interpretation in Brown & Beatty, Canadian Labour Arbitration 3rd ed. (Canada Law Book: Looseleaf: 2009),§4: 2100-4: 2150, and the discussion in Alberta Teachers ’ Association v. Province of Alberta (Unreported Alta. Arbitration, Feb. 2, 2010, Sims), pp.5-15. [ 15 ] Following this general interpretive approach, the Arbitration Board concluded that the transition from the MIPS grid to the single line salary schedule, and the separation of the Education Allowance from the salary

schedule was a neutral fact. The value of educational attainments of existing employees was captured and preserved in the new single-line

schedule because they were guaranteed to be placed on that grid at a step at or above their existing rate of pay; to this extent, and contrary to the argument of SAFA, it could not be said that compensation for educational qualifications was entirely captured by the Education Allowance. On the other hand, it was clear that, in proposing the Education Allowance, SAIT had clearly reaffirmed the value of educational attainment in its compensation system.

In this regard, the Arbitration Board observed that the Educational Allowance is not an “allowance” in the sense of being a sum of money paid to reimburse an employee for money spent in pursuing further education, but is instead a sum paid monthly as compensation for existing educational attainments, functioning as a top-up to the employee’s regular salary. The Arbitration Board further observed that even though the Education Allowance was a flat rate, which did not increase while salary did, that did not alter its fundamental character as compensation.

Considering all of that, the Arbitration Board found at para. 24 of their decision “that although we do not accept the Association’s suggestion that the Education Allowance is the exclusive vehicle for compensating employees’ education qualifications, the Education Allowance is patently an item of compensation.” [ 16 ] Proceeding to the

interpretation of s.16, the Arbitration Board noted that the problem was the uncertain meaning of the word “pay”. The Arbitration Board considered a number of dictionary

definitions and concluded that “pay” is a flexible word that can mean “salary” but may also convey a broader meaning and tends to connote periodicity; that is, of regular recurrence. Turning to the Collective Agreement itself, the Board identified all of the instances in which the word “pay” was used, concluding, at para.34: ...it is apparent that there is no uniform meaning given to “pay” within the Agreement.

It is used to designate an item of compensation outside of salary (acting incumbency pay) and inside salary (vacation leave pay); salary alone (“pay range”, general illness pay); and salary plus other items of periodic compensation (deductions from pay). It is also used in defining entitlements to leave with or without pay, in which, as we discuss shortly, the meaning of the word may depend upon the length of the leave. At this point it is enough to say that the varying usages of “pay” in the Agreement, together with the dictionary

definitions, contradict the Employer’s argument that “pay” necessarily means “salary”. [ 17 ] Moving from the proposition that there was no uniform meaning to the word “pay” in the Collective Agreement, the Arbitration Board considered the interpretive principle that the use of different words in a document tends to indicate differences in meaning. The Arbitration Board noted that a readily defined term for “salary” that excluded the Education Allowance upon position abolishment was available but not used in ss.16.01 and 39.02, if it were intended to exclude the Education Allowance.

That was not done, so the Arbitration Board concluded at para.35, that “the initial supposition must be that “pay” in s.16 means something more than just salary.” [ 18 ] The Board found that the other references to the word “pay” in the Collective Agreement supported this conclusion: when “pay” is used to mean “salary”, the word pay is used in conjunction or close proximity to “salary”, as in s.1.01(

s) where “pay range” means “a single salary grade”. In contrast, where the word “pay” is used in the Collective Agreement without a specific indicator nearby that it means “salary”, it tends to refer to all items of compensation. As an example, the Arbitration Board pointed to the provisions

dealing with leave “with pay” and “without pay”. [ 19 ] Turning to the context of s.16.01 itself, the Arbitration Board pointed out that the use of the terms “pay in lieu of notice” and “pay in lieu” themselves suggest that the employee is to be paid as if he were working during the period of notice, under which circumstances the employee would continue to be paid the Education Allowance. [ 20 ] Taking the foregoing into account, the Arbitration Board concluded that the term “pay” as it is used in s.16.01 includes the Education Allowance. [ 21 ] Turning to the issue of vacation pay upon termination under s.39.02, the Arbitration Board identified the interpretive issue as what amounts the abolished employee has “earned at the time of termination.” To answer that question, the Arbitration Board looked to s.39.01 of the Collective Agreement, which grants leave of a certain number of “work days” after a staff member has completed a certain amount of service, which the Arbitration Board interpreted to mean days on which the employee would normally be at work and therefore earn the same entitlements.

The Arbitration Board therefore concluded, at para.45: Accordingly, the vacation that the employee has earned but not taken at the time of termination is a certain number of “work days,” for which he or she is entitled to be remunerated as if still at work. Just as for pay in lieu of notice under

Article 16, this means that the abolishee should continue to earn Education Allowance as part of his or her vacation payout. [ 22 ] The Arbitration Board briefly considered the question of whether evidence of past practice should have been considered, and the potential effect of that evidence and noted that it was minimal - no more than 3 years prior to the grievance before them and only one to two ungrieved position abolishments that the Arbitration Board heard about. [ 23 ] Consequently, the Arbitration Board concluded that Mr.

Kearney was entitled to be paid the amounts due under ss.16.01 and 39.02, calculated to include his Education Allowance pro rata. Parties ’ Positions Applicant [ 24 ] SAIT submits that the intentions of the parties to a Collective Agreement must be examined when interpreting a Collective Agreement. This requires a contextual approach. [ 25 ] SAIT contends that a contextual analysis of the Collective Agreement indicates that the terms “pay” and “salary” are synonymous.

SAIT points out that the definition of “annual salary” is limited to regular salary and excludes any other compensation, except for acting incumbency pay. In the result, SAIT argues salary clearly excludes allowances (s.s. 1.01(

d) and 1.01(

r) of the Collective Agreement). SAIT also notes that “pay range” is defined as “a single salary grid”and therefore, confirms the notion that “pay” and “salary” are synonymous, and that the Education Allowance is not part of the salary schedule. (s.s. 1.01(

s) and 46 of the Collective Agreement). Other examples are given by SAIT to suggest “pay” and “salary” are synonymous. [ 26 ] SAIT points out that there is no language in the Collective Agreement expressly stating that the Education Allowance is to be included in the calculations under s.16.01 and s.39.02 of the Collective Agreement and contends that a clear expression of intention is required to confer a financial benefit in the Collective Agreement. Had SAIT and SAFA intended that these

allowances and in particular the Education Allowance be included in the calculation of entitlements on position abolishment, SAITsubmits they would have included express language to that effect in the Collective Agreement. SAIT suggests that in its

interpretation ofthe term “pay” the Arbitration Board improperly used dictionary

definitions as absolute authority rather than as corroborative aids. [27] In the alternative, SAIT contends that the Arbitration Board erred in concluding that the term “pay” as used in the CollectiveAgreement is unambiguous and therefore the Arbitration Board unreasonably failed to consider extrinsic evidence of past practice. SAITargues that extrinsic evidence may be admitted to disclose and resolve a latent ambiguity and the fact that the term “pay” is not definedin the Collective Agreement is itself an indicator of ambiguity.

SAIT points to a number of arbitration decisions wherein the term “pay”was determined to be ambiguous: General Electric Canada Inc. and U.S.W.A., Loc. 8912, Re (1988), (AB GAA), 3 L.A.C. (4th) 222; British Columbia Public Service Agency v. British Columbia Government and Service Employees’ Union (HeinrichGrievance), [2010] B.C.C.A.A.A. No. 107; Re Steel Co. of Canada Ltd. and United Steelworkers, Local 3749 (1975), (ON LA), 8 L.A.C. (2d) 312.

SAIT pointed out that the Arbitration Board itself noted in its decision that there was no uniform meaninggiven to the term “pay” within the Collective Agreement, effectively acknowledging a latent ambiguity that would support theintroduction of extrinsic evidence. [28] Finally, SAIT further argued that the Arbitration Board’s failure to accept the evidence of past practice and conclude as aresult that “pay” is synonymous with “salary” was unreasonable. In this regard, SAIT relies upon the decision of Arbitrator Brown inJohn Bertram & Sons Co. v.

International Association of Machinists, Local 1740 (Greenwood Grievance), [1967] O.L.A.A.

No. 2,wherein the arbitrator set out an approach to the consideration of past practice at para 13: I would suggest that there should be (1) no clear preponderance in favour of one meaning, stemming from the words and structure of theagreement as seen in their labour relations context; (2) conduct by one party which unambiguously is based on one meaning attributed tothe relevant provision; (3) acquiescence in the conduct which is either quite clearly expressed or which can be inferred from thecontinuance of the practice for a long period without objection; (4) evidence that members of the union or management hierarchy whohave some real responsibility for the meaning of the agreement have acquiesced in the practice.

In this regard, SAIT contends that there is no clear preponderance in favour of one meaning arising out of the contextual

interpretation ofthe Collective Agreement, that SAIT’s conduct in respect of exclusion of the Education Allowance from the calculation of entitlementson position abolishments has been unambiguous, and that SAFA has clearly acquiesced in SAIT’s

interpretation of the CollectiveAgreement and its practice of not including the Education Allowance in calculations under s.16.01 and s.39.02 of the CollectiveAgreement. [29] Based on all of the foregoing, SAIT argues that the Arbitration Board’s decision was unreasonable and was not within a rangeof possible outcomes that are defensible in respect of the facts and law.

Respondent [30] In response to the entirety of SAIT’s argument, SAFA contends that, despite SAIT’s stated position that the standard ofreview is reasonableness, SAIT is actually asking this Court to review and re-weigh the evidence, to reinterpret the CollectiveAgreement language at issue, to make findings in place of the Arbitration Board’s de novo, and to substitute its own view of a preferableoutcome to that of the Arbitration Board’s; all of which suggests a standard of correctness. SAFA points to the decision of the AlbertaCourt of Appeal in United Nurses of Alberta, Local 301 v.

Capital Health Authority (University of Alberta), 2009 ABCA 202, [2009] A.J.No. 569, wherein the Court of Appeal pointed out, at para.8, that the proper application of the reasonableness standard of review requiresthe reviewing judge to refrain from analysing “the specific reasoning to determine whether there were sufficient defects to render thedecision unreasonable” and instead to ask “whether there is any line of analysis within the given reasons that could reasonably lead to[the] conclusion.”

[ 31 ] With respect to the reasonableness of the decision itself, SAFA submits that it was consistent with the modern approach to the

interpretation of collective agreements, which is to read the provisions in question in their entire context, in their grammatical and ordinary sense, harmoniously with the scheme of the agreement, its object, and the intention of the parties.

In SAFA’s submission, the Arbitration Board correctly identified the central interpretive problem, which was the uncertain meaning of the word “pay”, appropriately considered the manner in which that term was used in the Collective Agreement, properly applied the interpretive principle that, in a document, the use of different words tends to indicate differences in meaning, and in this transparent and intelligible manner came to the conclusion that “pay” in s.16.01 includes the Education Allowance and that an instructor, who is terminated because his position has been abolished, should also continue to earn the Education Allowance as part of his vacation payout under s.39.02.

SAFA further argues that, having concluded at the end of this exercise that “pay” in the context of the Collective Agreement was not ambiguous, the Arbitration Board was reasonable in rejecting extrinsic evidence of past practice. [ 32 ] Finally, SAFA contends that the Arbitration Board was also reasonable in concluding that the evidence of past practice would not have been of assistance as an interpretive aid in any event, because that evidence fails to reveal a consensus as to the meaning of the word “pay” as it is used in s.16.01 of the Collective Agreement.

SAFA points out that there is only one other example on the record of SAIT having calculated pay in lieu of notice, severance pay and vacation earned but not taken at the time of termination, which did not include the Education Allowance and where the instructor, Mr. Harrison, had been terminated because his position was abolished. Furthermore, there is no evidence on the record that the union’s hierarchy knew about Mr.

Harrison’s payout calculation done by SAIT, never mind acquiesced to it. [ 33 ] As to SAFA’s reliance on the letter dated May 15, 2008 wherein SAIT informed SAFA that SAIT would not consider the Education and Long Service Allowances to be pensionable service for instructors, SAFA argues that does not affect or in any way enlighten the meaning to be attributed to ss.16.01 and 39.02 of the Collective Agreement.

It is SAFA’s position that the issue of “pensionable earnings” has nothing to do with the calculation of amounts pursuant to ss.16.01 and 39.02 and evidence of past practice by SAIT in this regard should be given no weight as an interpretive aid, as the Arbitration Board so correctly found. [ 34 ] In short, SAFA submits the Arbitration Board provided extensive and detailed reasons for its decision, which are justifiable, transparent and intelligible.

The result being the Arbitration Board’s decision was reasonable and accordingly, this Court should not substitute its own view of a preferable outcome to that of the Arbitration Board. Reasonableness of the Board ’s Decision [ 35 ] As noted above, the standard of review of reasonableness requires the reviewing court to consider the existence of justification, transparency and intelligibility within the decision-making process, and to consider whether the decision falls within a range of possible, acceptable outcomes.

Implicit in this formulation of the standard is the proposition that in some circumstances, different outcomes may both fall within the scope of “reasonableness”. The reviewing court is not to substitute its own view of the proper

interpretation of the collective agreement, nor is the reviewing court to “analyse the specific reasoning to determine whether there were sufficient defects to render the decision unreasonable.”: United Nurses , at para. 8. The Arbitration Board’s decision must be the result of “one of the possible legal outcomes available, not necessarily the most likely”: United Nurses , at para.9. (

a) Interpretation of the terms “Pay” and “Vacation Earned” but not taken at the time of termination. [ 36 ] In determining the meaning of the term “pay” as it is used in s.16.01 of the Collective Agreement, the Arbitration Board noted that the proper approach was to interpret s.16.01 in the context of the Agreement as a whole and in a manner that avoids conflicts or internal inconsistencies. After noting that the term “pay” was not defined in the Collective Agreement, the Arbitration Board pointed to the well-established principle that the use of different words in an agreement suggests different meanings.

After a thorough review of the use of the term within the Collective Agreement itself, and a review of dictionary

definitions of the term, the Arbitration Board concluded that “pay” was used to mean a variety of different things, and therefore could not be said to necessarily mean salary but could be used to convey a broader meaning. [ 37 ] SAIT contends that this conclusion was unreasonable because a contextual analysis confirms that “pay” as used in s.16.01 is synonymous with “salary”. While some support may be

found within the Collective Agreement for the proposition that “pay” can mean “salary”, in my view the Arbitration Board’s decision-making process is justified in the reasons, transparent and intelligible, and the conclusion that pay as used in s.16.01 is not synonymouswith the defined term “salary” falls within the range of acceptable outcomes. Contrary to SAIT’s assertion, the Arbitration Board did notrely upon dictionary

definitions as absolute authority for the proposition that “pay” and “salary” are not synonymous, but used thosedefinitions as part of the contextual analysis, which disclosed that the term “pay” was used at various points in the Collective Agreementto mean different things. [38] Having concluded that “pay” as used in s.16.01 is not synonymous with the defined term “salary”, the Arbitration Boardproceeded to determine whether “pay” is unambiguous and includes the Education Allowance and then turned to deal with the issue ofvacation pay earned but not taken at the time of termination.

The Arbitration Board noted that the term “pay” is used in the CollectiveAgreement to mean all items of compensation in the sections granting leave “with pay” and “without pay”. Looking to s.16.01 itself, theArbitration Board considered the intent behind payment in lieu of notice for employees whose position is abolished, and concluded thatthe intent was to provide payment to the employee as if the employee were working out a period of notice, in which circumstances theemployee would continue to receive the Education Allowance.

The Arbitration Board noted at para. 39 of its decision “Nothing in thissection suggests differently.” Along with the proposition that the parties could have limited the entitlement to salary very simply byusing that defined term, the Arbitration Board concluded that pay in lieu of notice in s.16.01 includes a sum for the EducationAllowance. [39] As for whether vacation pay included the Education Allowance, the Arbitration Board looked to s.39.02.

Here the ArbitrationBoard correctly noted at para. 42 of their decision that: The word “pay” is not used as a noun or adjective in this Section, and the presumption of identical meaning across the collectiveagreement does not apply. Here, the interpretive issue is, what amounts has an abolished employee “earned ... at the time oftermination?” [40] Again, to determine what was intended by s.39.02, the Arbitration Board considered the intent behind

Section 39 with theheading “Annual Vacation Leave - Instructors and Educational Counsellors.” The Arbitration Board concluded that although

Section 39does not explicitly state that vacation leave is leave with pay, that is its unavoidable implication. The Arbitration Board noted s.39.01grants leave of a certain number of “work days”.

The logical inference of this was “that vacation days are days on which the employeenormally would be at work and which attracts the same entitlements.” The Arbitration Board then concluded at para. 44 of theirdecision: ”For purposes of remuneration, this means that vacation days are paid days off” with the result being that the employee whoseposition is abolished should be entitled to the Education Allowance as part of his earned vacation payout. [41] SAIT contends that in doing all of this, the Arbitration Board improperly modified the Collective Agreement, leading to anabsurd result.

In my view, this is simply another way of saying that the Arbitration Board erred in its

interpretation. I do not accept thatan

interpretation where the term “pay” or “pay in lieu of notice” includes the Education Allowance or where any payment for “vacationearned” but not taken at the time of termination includes the Education Allowance, modifies the Collective Agreement when those termswere not defined. Nor do I accept that the inclusion of the Education Allowance - which as the Arbitration Board noted would be paid toan employee working during the period of notice - in payment in lieu of notice, constitutes an absurd result.

Likewise, I do not accept theinclusion of the Education Allowance in an amount paid for vacation earned but not taken at the time of termination, to be an absurdresult. In that regard, I adopt the reasoning of the Arbitration Board. [42] SAIT further contends that the inclusion of the Education Allowance in pay in lieu of notice and in earned vacation pay,amounts to the conferral of a financial benefit. It points to the arbitration decisions in Health Employers Assn. of British Columbia v. British Columbia Nurses’ Union (2000), (BC LA), 94 L.A.C. (4th) 115 and Maple Leaf Fresh Foods Brandon v.

United Food and Commercial Workers, Local No. 832 (Rest Periods Grievance), (2010), 196 L.A.C. (4th) 336, and argues that a clearexpression of intention is required to confer a financial benefit in a collective agreement. In my view, the intention of s.16.01 and for thatmatter s.39.02, is clearly to confer a financial benefit; the interpretive problem identified by the Arbitration Board was the scope, not the

existence, of those benefits. Accepting SAIT’s argument on these grounds would be, in effect, to say that where multiple

interpretationsof a provision conferring a benefit are possible, the proper

interpretation will always be one that confers the least; a proposition which Ido not accept. [43] Finally, SAIT argues that the Arbitration Board’s determination that the term “pay” and also “earned” vacation pay wasunambiguous was unreasonable.

SAIT points out that the Arbitration Board’s own analysis demonstrated the latent ambiguity of theword “pay” when it noted that the interpretive problem before it was that term’s “uncertain meaning”, when it noted that the term wasnot defined in the Collective Agreement, and that it was used over the course of the Collective Agreement to mean different things. [44] An interpretive problem should not be confused with ambiguity. Many agreements are replete with undefined terms that donot disclose their meanings readily and without a thoughtful, contextual

interpretation. Moreover, the fact that a term is used to meandifferent things in different parts of an agreement does not in and of itself mean that the term, when used in one particular part of theagreement, is either latently or patently ambiguous. Indeed, the fact that the Arbitration Board could identify the meaning of “pay” as itwas used in various parts of the Collective Agreement suggests that the term is capable of

interpretation from its immediate context. [45] The Arbitration Board properly identified the interpretive problems as the meaning of the word “pay” in s.16.01 and whatamounts in respect of vacation has an abolished employee “earned” but not taken at the time of termination under s.39.02? Applying the appropriate approach to the

interpretation of collectiveagreements, the Arbitration Board concluded that the term “pay” unambiguously included a sum for the Education Allowance. Itfollowed from this determination the meaning of “vacation earned” but not taken at the time of termination also included a sum for theEducation Allowance. The Arbitration Board’s reasoning was transparent, rational and intelligible and its

interpretation falls within therange of reasonable outcomes. (

b) Extrinsic Evidence of Past Practice [46] In Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42 , [2002] 2 S.C.R. 559, Iacobucci J. discussed theadmission of extrinsic evidence in the context of the “modern approach” to

interpretation and noted, at para.29: What, then, in law is an ambiguity? To answer, an ambiguity must be "real" (Marcotte, supra, at p. 115). The words of the provisionmust be "reasonably capable of more than one meaning" (Westminster Bank Ltd. v. Zang, [1966] A.C. 182 (H.L.), at p. 222, per LordReid). By necessity, however, one must consider the "entire context" of a provision before one can determine if it is reasonably capableof multiple

interpretations. In this regard, Major J.'s statement in CanadianOxy Chemicals Ltd. v. Canada (Attorney General), (SCC), [1999] 1 S.C.R. 743, at para. 14, is apposite: "It is only when genuine ambiguity arises between two or moreplausible readings, each equally in accordance with the intentions of the statute, that the courts need to resort to external interpretive aids"(emphasis added), to which I would add, "including other principles of

interpretation". [47] It follows from my determination that the Arbitration Board was reasonable in determining that “pay” as it is used in s.16.01unambiguously includes a sum for the Education Allowance , and that “vacation earned” but not taken at the time of termination in s.39.02 unambiguously includes the same Allowance, that the Arbitration Board was not unreasonable in rejecting extrinsic evidence thatwould allow it to resolve an ambiguity. It is further worth noting that the scope of a Labour Arbitration Board’s discretion in this regardis broad. In United Food and Commercial Workers’ Union, Local 401 v.

Canada Safeway Ltd., 2007 ABCA 331, [2007] A.J. No.1179,the Alberta Court of Appeal held, at paras.12-13: However, the standard of review that applies to an arbitrator's decision not to rely on extrinsic evidence is another issue. Section143(2)(

a) of the Labour Relations Code, R.S.A. 2000, c. L-1 grants an arbitrator the power to "accept any oral or written evidence that[the arbitrator] considers proper, whether admissible in a court of law or not" and s. 143(2)(

b) provides that an arbitrator "is not bound bythe law of evidence applicable to judicial proceedings". These sections of the Code arguably gave the arbitrator here the broad discretionto rely on the prior collective agreements to interpret the current one even in the absence of ambiguity. But it does not follow that the arbitrator was required to rely on the prior collective agreements in the absence of ambiguity. Thisremained a discretionary decision. What use is to be made of evidence admitted by an arbitrator lies at the heart of what the Legislatureentrusts labour arbitrators to decide. Indeed, as noted by the Supreme Court of Canada in United Brotherhood of Carpenters and Joiners

of America, Local 579 v. Bradco Construction Ltd., (SCC), [1993] 2 S.C.R. 316 at 344, "... the use of extrinsic evidenceto interpret a collective agreement is very much in the core area of an arbitrator's function." [48] Similarly, Erb J. held, in Amalgamated Transit Union Local 1374 v. Greyhound Canada Transportation Corp., 2009 ABQB166, [2009] A.J.

No. 276, at para.24: While extrinsic evidence is admissible in labour arbitration cases at the discretion of an arbitrator in Alberta, Courts are reluctant tofavour past practice evidence over the written words of an agreement where the language is not ambiguous, because the agreement isseen as a more fitting representation of the common intentions of the parties. [49] It was not unreasonable for the Arbitration Board to reject extrinsic evidence of past practice when the Arbitration Board hadconcluded that the term “pay” as it is used in s.16.01 and amounts for “vacation earned” but not taken at the time of termination as set outin s.39.02, could be successfully interpreted and determined with regard only to the written words of the Collective Agreement.

As Erb J.noted in Amalgamated Transit, at para.32: The Supreme Court of Canada and Alberta labour legislation make it clear that arbitrators may consider past practice whenever theydetermine that it is needed. However, the Alberta Court of Appeal has taken a cautious approach and has pointed to the collectiveagreements themselves as the more reliable indicator of the intentions of the parties. [50] The Arbitration Board further concluded that the evidence of past practice would not have been helpful in any event.

TheArbitration Board noted, at para.46: ...In any event, however, the past practice referred to in evidence was minimal, comprising no more than about three years before thisgrievance arose, and one or perhaps two ungrieved position abolishments that we heard about.

This is not an unreasonable amount oftime for a bargaining agent to take before grieving a contentious item arising from new collective agreement language, and the delay,such as it was, would not dispose us to place weight on the “practice” around abolishment payouts from 2006 to 2009 even if themeaning of the collective agreement were ambiguous. [51] The Arbitration Board did not note, though evidence was provided, that Education Allowances had never been included in thecalculation of pay in lieu of notice or in vacation earned but not taken at the time of termination, or that Education Allowances werelisted separately from salary on the employees’ pay stubs.

In my view, notwithstanding this omission, the Arbitration Board’s conclusionin this regard remains reasonable, particularly in view of the fact that the Collective Agreement in question was relatively new, renderingthe relevance of the practice under prior iterations of the collective agreement somewhat questionable.

The fact that SAIT did not includethe Education Allowance in the calculation of pensionable earnings is not sufficient to sway my conclusion in this regard, because, as theArbitration Board noted at para.13: In cross examination [SAIT’s witness] acknowledged that pension issues between these parties are governed by the Local AuthoritiesPension Plan legislation, which includes a definition of pensionable earnings. 4. Conclusion [52] The Arbitration Board concluded that the meanings of ss.16.01 and 39.02 of the Collective Agreement were not ambiguousbut capable of

interpretation, that there was as a result no need to resort to evidence of past practice in interpreting those provisions, andthat in any event the evidence of past practice would not have been helpful. The Arbitration Board’s reasons are transparent andintelligible and fall within the range of reasonable outcomes. The decision, which is that an amount for the Education Allowance must be

included in the calculation of pay in lieu of notice in s.16.01 and in the calculation of vacation earned but not taken at the time of termination in s.39.02, is reasonable. Accordingly, SAIT’s judicial review application is dismissed and the May 26, 2010 decision of the majority of the Arbitration Board is upheld. SAFA will have its costs and reasonable disbursements. Heard on the 27 th day of April, 2011. Dated at the City of Calgary, Alberta this 23 rd day of June, 2011. C.S. Phillips J.C.Q.B.A. Appearances: Ms. Barbara B. Johnston for the Applicant, SAIT Mr. William J. Johnson, Q.C. for the Respondent, SAFA