United Steel Workers, Local 1-207 Applicant - v. -, 2012 ABQB 275

Court of Queen ’ s Bench of Alberta Citation: United Steel Workers, Local 1-207 v. Regent Home Systems, 2012 ABQB 275 Date: 20120425 Docket: 1106 00642 Registry: Lethbridge Between: United Steel Workers, Local 1-207 Applicant - and - Regent Homes Systems (A Division of Sri Homes ULC) Respondent _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice R.A.

Jerke _______________________________________________________ [ 1 ] United Steel Workers and Regent Home Systems have a Collective Agreement for Regent’s employees. [ 2 ] The Agreement provides: ..an employee shall not receive holiday pay for any Statutory Holidays that fall during any period of lay-off in excess of fourteen (14) calendar days. Employees shall receive holiday pay for Statutory Holidays that fall during any period of lay-off of fourteen (14) calendar days or less...

[ 3 ] Before the Agreement was finalized, the Union put Regent on notice that it contended the Clause was contrary to the Employment Standards Code , and was unenforceable. Regent believed it was enforceable, so the parties agreed to leave the wording unchanged and refer the matter to Arbitration if it arose in the future. [ 4 ] A grievance was filed and the Arbitrator decided that the Clause did not offend the statutory right to general holiday pay in the Code . As a result, the laid off employees were not entitled to the claimed general holiday pay. [ 5 ] Regent laid off some employees in December 2009.

They were not paid general holiday pay for Christmas Eve, Christmas Day, Boxing Day and New Year’s Day. These days were all more than 14 days after the layoff. [ 6 ] This is a substantive review of the Arbitrator’s decision so the Court needs to decide what the standard of review is, and then apply that standard of review to the Board’s decision on the merits. I. What is the Standard of Review? [ 7 ] There are two recognized levels of scrutiny, correctness and reasonableness: Dunsmuir v New Brunswick , 2008 SCC 9 .

Regent contends and the Union agrees that the appropriate standard of review is reasonableness. [ 8 ] The reasonableness standard was applied to a Board’s

interpretation of a Collective Agreement and selection of a remedy in CEP, Local 707 v Suncor Energy Inc, Oil Sands , 2011 ABCA 90 . [ 9 ] The question in issue is a question of law involving the

interpretation of a Statute closely connected to the function of the Arbitrator. [ 10 ] I agree that reasonableness is the appropriate standard of review. II. Application of the Standard of Review [ 11 ] The framework within which a reasonableness review is conducted is described in Dunsmuir at para 47 : Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: 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. Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process.

But it is also concerned with whether the decision falls within the range of possible, acceptable outcomes which are defensible in respect of the facts and the law. A. Justification, Transparency and Intelligibility Within the Decision-Making Process [ 12 ] The issue raised by the parties is “whether the laid off employees are entitled to general holiday pay.”

[13] The Arbitrator re-stated the issue as: ...whether a clause in the collective agreement which limits entitlement to general holiday pay to only those situations where the lay-offperiod is 14 calendar days or less, is in conflict with the minimum statutory rights set out in the Employment Standards Code, R.S.A.2000 c. E-9 ... and, as such, is unenforceable. [14] The issue thus framed intelligibly articulates the question to be determined, taking into account that a Collective Agreement,including management rights and holiday pay, is subservient to an employee’s statutory rights.

As stated in Parry Sound v OntarioPublic Service 2003 SCC 42 , [2003] 2 SCR 157, at para 29: The statutory rights of employees constitute a bundle of rights to which the parties can add but from which they cannot derogate. [15] The Arbitrator observes that under a Collective Agreement the favoured view is that general holiday pay is an earnedentitlement and payable during a layoff or leave of absence, but is subject to the intention of the parties as expressed in the Agreement.He finds that: The clear language of the Collective Agreement ... negates any presumption that employees are entitled to holiday pay while on a lay-offwhich exceeds 14 days. (p. 11) [16] The Arbitrator then analyses whether the Collective Agreement is in conflict with the statutory rights set out under the Code.He interprets

Section 26 of the Code to mean: The legislators ... have provided general holiday pay protection for working employees who have satisfied the 30 work days in theprevious 12 months requirement. For an employee on lay-off not subject to a collective agreement the employee will not be paid holidaypay because they are no longer regularly scheduled to work. [17] The Arbitrator then applies that

interpretation to the Collective Agreement and finds: The Code as noted, does not provide for the payment of holiday pay if an employee is on lay-off status. The employee is only eligible forholiday pay under the Code if the holiday is normally a working day for the employee. The payment of holiday pay while on a lay-off of14 days or less therefore exceeds the minimum statutory benefits provided under the Code because employees under this CollectiveAgreement are not required to work during the 14 days from the date of lay-off in order to qualify for holiday pay.

Accordingly there hasbeen no breach of the Code as a result of the parties agreement to limit the payment of holiday pay while on lay-off to a period of 14days or less. [18] On my assessment of the Arbitrator’s reasons, I find they provide justification for the conclusions reached and are transparentand intelligible. The reasons provide a line of analysis that could reasonably lead to the conclusion reached. B. Does the Decision fall within a range of possible acceptable outcomes? [19] The facts are not in dispute.

The Clause in the Collective Agreement is not ambiguous, and the only issue raised by the Unionis whether the Clause is contrary to the Code and therefore unenforceable. An

interpretation of the Code is necessary to determine whatrights it provides. [20] The Union contends that when the Arbitrator considered the intention of the parties and the language of the CollectiveAgreement, he missed the mandated statutory superiority of Employment Standards legislation. The Union argues that he interpreted theprovisions of the Employment Standards Code by reference to the language in the Collective Agreement that disentitled the employees to

a class of benefits and rights contained in the Code . [ 21 ] I do not read the Arbitrator’s reasons as having this flaw. The Arbitrator clearly states that while in his view the Collective Agreement negates any presumption that employees are entitled to holiday pay while on a layoff which exceeds 14 days, he goes on to analyse the Union’s position that the Collective Agreement is in conflict with the statutory rights set out in the Code . [ 22 ]

Section 26 of the Code applies to employees whether covered by a Collective Agreement or not. The Arbitrator’s conclusion as to the holiday pay rights of a laid-off employee who is not covered by a Collective Agreement, are applicable, subject to the terms of the Collective Agreement, to a laid-off employee who is covered by one.

The Arbitrator reviews the Collective Agreement and correctly concludes that it provides benefits beyond those in the Code . [ 23 ] Section 26(1) of the Code states: An employee is eligible for general holiday pay if the employee has worked for the same employer for 30 work days or more in the 12 months preceding the general holiday. [ 24 ] The Union relies on Section 26(2), which provides:

(2) An employee is not entitled to general holiday pay if the employee (

a) does not work on a general holiday when required or scheduled to do so, or (

b) is absent from employment without the consent of the employer on the employee’s last regular work day preceding, or the employee’s first regular work day following, a general holiday. [ 25 ] The Union contends this is the only criteria in the Code that disentitles an employee to general holiday pay. The Union argues that if an employee is not “not entitled” to holiday pay under Section 26(2), then the employee is not only eligible but entitled to general holiday pay under Section 26(1).

That argument does not necessarily follow, and I agree with the Arbitrator’s conclusion that an employee on layoff not subject to a Collective Agreement will not be paid general holiday pay because they are no longer regularly scheduled to work. This is consistent with the observations of the Court of Appeal in Vrana v Procor Limited , 2004 ABCA 126 at para 12 : The invocation of these temporary layoff provisions is clearly intended to be at the employer’s option alone and does not require the employee’s consent. The combined effect of these provisions therefore leaves an employee in this position.

The employee is without work and without pay, having been laid off; the employer is under no obligation to pay the employee any wages or benefits during the 60-day time frame; the employee cannot treat the layoff as a termination or repudiation of the employment contract before the expiry of the 60-day period; the employee has no assurance that the layoff will ever end; the employee is limited in a search for alternative employment during that 60-day period; and the employee has no assurance that if he or she returns to work for a period of time, for example 10 days, that the layoff will not recommence thereafter.

All this means that the employee’s life in these circumstances is economically and legally on hold. [ 26 ] The Union contends the Arbitrator misinterpreted “work” by stating that it contemplates an employee providing a service rather than includes providing a service. This distinction does not seem significant to the circumstance for which the Arbitrator applies it, namely, “employees who are regularly scheduled to work”. I find no merit to this argument. [ 27 ] The Union contends the Arbitrator made an error by relying on an Employment Standards Sheet from 2006.

While I agree that the Fact Sheet is of questionable if any evidentiary value, I do not agree that the Arbitrator made an error in this regard. The Arbitrator states that he is:

reinforced in [his] view that the Code contemplates the payment of general holiday pay to a working employee and not one on layoff by the [Fact Sheets]. He does not state he relied on it. It may be possible that the Fact Sheet represents one of the possible outcomes within the range of possible acceptable outcomes defensible in this case. [ 28 ] In my view, the Arbitrator’s conclusion that Section 26(1) of the Code does not provide for the payment of general holiday pay if an employee is on layoff is a reasonable

interpretation and falls within a range of possible acceptable outcomes defensible in law. [ 29 ] In the result the application for Judicial Review is dismissed. The decision and award of the Arbitrator dismissing the grievance for general holiday pay for statutory holidays outside the 14 day layoff period is confirmed. [ 30 ] If the parties cannot agree on costs, they may be spoken to. Heard on the 20 th day of March, 2012. Dated at Lethbridge, Alberta this 25 th day of April, 2012 R.A. Jerke J.C.Q.B.A. Appearances: Nickerson Roberts Holinski & Mercer David B. Mercer for the Applicant Stringam Denecky LLP David G. Kusick for the Respondent