Finning (Canada) Division of Finning International Inc. Applicant - v. -, 2013 ABQB 149

Court of Queen ’ s Bench of Alberta Citation: Finning (Canada) v. International Association of Machinists and Aerospace Workers, Local Lodge No. 99, 2013 ABQB 149 Date: 20130311 Docket: 1203 09937 Registry: Edmonton Between: Finning (Canada) Division of Finning International Inc.

Applicant - and - International Association of Machinists and Aerospace Workers, Local Lodge No. 99 Respondent Corrected judgment: A corrigendum was issued on March 13, 2013; the corrections have been made to the text and the corrigendum is appended to this judgment. ___________________________________________________ Memorandum of Decision of the Honourable Madam Justice M. T. Moreau ____________________________________________________ I.

Introduction [ 1 ] The Applicant, Finning (Canada) Division of Finning International Inc. (“the Employer”), seeks judicial review of an arbitration award arising from a grievance filed by the Respondent, the International Association of Machinists and Aerospace Workers, Local Lodge No. 99 (“the Union”) on behalf of six of its members. The Arbitrator determined that the Employer’s actions in sending

these employees home before the end of their work shift constituted a layoff that triggered the severance pay provisions of their Collective Agreement. II. Background Facts [ 2 ] The Employer operates a Power Systems Division that consists of a Truck Shop (“Branch 60"), and Industrial Engines (“Branch 46"), that service and repair Caterpillar engines.

They are located in separate buildings in close proximity to each other and are considered to be a single “Branch” under para. 4.04 of the Collective Agreement for seniority purposes. [ 3 ] In the fall of 2009 and the winter of 2010, there was a shortage of work in Alberta, to which the Employer responded by sending home early from their shift six Heavy Equipment Technicians and Apprentices in Branch 60 (“the Employees”). The Employees were usually instructed to report for work the next day. Branch 60 was operating both day and afternoon shifts, while Branch 46 was operating only a day shift.

The following chart records the number of times each of the Employees was sent home before the end of shift and the impact on each of them in terms of hours of worked missed: Employee name # of days sent home early # of hours of work missed Gorgichuk one day 5.0 hours Pelletier 2 consecutive days 6.5 hours Cosgrove 5 days (in 2 weeks) 23.5 hours Sanders 7 days (in app. 4 months) 32.5 hours Sterling 9 days (in app. 3.5 weeks) 38.5 hours Pahal 2 days (in app. 4.5 months) 41.0 hours [ 4 ] The Union filed grievances on behalf of each of the Employees, alleging that the Employer’s actions in sending them home before the end of shift violated the layoff, seniority and severance pay provisions of the Collective Agreement.

The Employer took the position that sending the Employees home early from their shift did not constitute a layoff and that the provisions of the Collective Agreement relevant to layoff had not been triggered so as to entitle them to severance pay. III. The Collective Agreement [ 5 ] Art. 4.01 of the Collective Agreement requires that a seniority list be maintained by the Employer and shared with the Union: 4.01 A current seniority list by layoff classification per Branch will be provided to the Union monthly upon request.

This list shall show seniority date and date of hire as separate fields where an Employee has different dates for these purposes. [ 6 ] Seniority, layoff, and severance pay are addressed as follows in the Collective Agreement: 4.06 Seniority shall be broken by:

(

a) voluntarily quitting the job; (

b) over-extending an authorized leave-of-absence. (

c) discharged for cause. (

d) if an Employee fails to return to work within two (2) weeks notice requiring him/her to do so following layoff. ... 5.05 In filling new positions or vacancies, including promotions, the job shall be filled on the basis of seniority, training, experience, and the ability to perform the duties required for the position. 5.06 Lay-off criteria will be in reverse order to seniority, which means the least senior Employee of a classification in a Branch affected will be laid-off first, except as noted here. ... 5.08 Recall of laid off Employees will be carried out in order of seniority.

The most senior Employee of a classification in a Branch affected shall be recalled first by means of telephone contact and a letter. Where an Employee is not contacted by telephone, a letter requiring proof of receipt by signature shall be sent to their last known address. The Employee must respond within ten (10) calendar days , excluding Saturdays, Sundays and statutory holidays from the date mailed. ... 5.13 When business conditions exist, an Employee on layoff may be recalled to perform work for a short term or temporary nature.

The nature and duration of the work will be discussed with the Employee prior to the Employee returning to work. If an Employee refuses a recall for short term or temporary work, the Employee’s recall rights per 5.09 will not be affected. ... 6.01 This Article, where it defines the normal hours of work and workweek, shall not be construed as a guarantee of hours of work per day or per week, but merely provides the basis for the calculation of overtime.

Neither shall it serve as a restriction on the scheduling of a longer or shorter day or workweek. ... 14.01 The Union recognizes the right of the Employer to exercise the functions of management including, without limiting the generality thereof, the right to hire new Employees and to direct the working force, to promote and demote, transfer, lay-off due to lack of work, suspend or otherwise discipline or discharge for just cause any Employee, subject to the right of the Employee to lodge a grievance in the manner and to the extent herein provided.

The Employer agrees to give to the Union reasonable notice of discharge for cause of any Employee. ... 14.03 The Employees and the Union agree that the foregoing enumeration of Management’s rights shall not exclude any other

recognized function of management not specifically covered by this Agreement. ... 22.01 Severance Pay shall be paid to an Employee in the amount of (3) weeks per completed year of service to a maximum of twenty- four (24) months in the event of lay-off, along with the final earnings paycheque. 22.02 Severance pay is due to an Employee immediately upon lay-off.

If an Employee is recalled within the period for which Severance was paid the Employer is entitled to recover the balance. (This is intended to avoid the possibility of double pay in the case of an early recall.) 22.03 Severance pay entitlement occurs only once in any twelve (12) month period.

If an Employee was laid-off, and again laid-off within twelve (12) months of the first instance, he/she is not entitled to Severance Pay on reoccurrence. 22.04 Notwithstanding 22.03, in the event the Employer recovers the balance of initial Severance Pay entitlement as specified in 22.02, an Employee is eligible to receive the amount of that balance should a lay-off occur within twelve (12) months of the first instance. [ 7 ] The parties agreed that in determining who would be sent home early during the relevant period covered by the grievance: (

i) the Employer did not consult the applicable single seniority list; (ii) the Employees sent home due to lack of work were not the least senior on the applicable seniority list, because for each Employee from Branch 60 sent home there was at least one more junior employee in the same classification at Branch 46; (iii) only Employees working in Branch 60 were sent home early and the Employees sent home were the most junior in the affected classification at Branch 60. [ 8 ] There were no records in evidence before the Arbitrator from which it could be determined whether the employees with less seniority were, in fact, working on the days on which more senior employees were sent home due to lack of work.

IV. The Positions of the Parties before the Arbitrator [ 9 ] The Union argued that the Employees had been laid off within the meaning of the Collective Agreement and were therefore immediately entitled to severance pay in accordance with Art. 22 of the Collective Agreement. The Union also argued that had the Employer consulted the applicable seniority list as required by the Collective Agreement, there would have been instances in which it would have sent home more junior employees working at Branch 46 and not Branch 60.

The Employer denied that any of the Employees had been laid off and relied on Art. 6.01 of the Collective Agreement which provides that there is no guarantee of hours of work per day or per week. [ 10 ] The Employer also argued that the parties never intended the layoff provisions to apply to an employee sent home for part of a shift. It asserted that the severance provisions of the Collective Agreement are too complex to provide for severance being paid in those circumstances.

Further, even if the Employees had been laid off within the meaning of the Collective Agreement, the Union failed to establish that there were junior employees on shift at Branch 46 on the occasions when more senior Branch 60 employees were sent home. [ 11 ] The Union responded that although “normal hours of work” in Art. 6.01 does not guarantee a specific number of hours of work in a day or week, this provision does not give the Employer the right to avoid the seniority provisions or selectively reduce hours of work for some, but not all, employees.

The Union presented evidence of negotiations in the early 1990's in which it rejected proposals presented by the Employer that would have permitted temporary lay-offs without triggering the entitlement to severance pay. These proposals were not ultimately included in the Collective Agreement.

V. The Arbitrator ’s Decision [ 12 ] In determining whether sending employees home before they completed their shift constituted a layoff within the meaning of the Collective Agreement, the Arbitrator reviewed case authorities addressing the meaning and application of the term “layoff”. He stated, at para. 36, that while Art. 6.01 provides that there is no guarantee of hours of work per day or per week, it does not permit the employer to selectively reduce the hours of work of individual employees without regard to seniority. He reviewed earlier arbitral decisions that permitted an employer to make changes to the scheduled hours of work provided the shift

schedule was changed for all employees across the bargaining unit. He noted, at para. 42, that employees at Branch 46 were not considered for send-off before the end of shift despite the fact that they were on the same layoff list as employees at Branch 60.

He concluded, at para. 43, that Art. 6.01 does not permit the Employer to send certain employees home early. without regard to the seniority or layoff provisions of the Collective Agreement. [ 13 ] The Arbitrator noted, at paras. 47 and 48, that unlike the situation in case authorities relied upon by the Employer where the hours of work varied from week to week, the Employees here worked at least eight hours per day 40 hours per week.

He found that “...to the employees affected, the loss of even a few hours of work was significant because they were accustomed to full time hours and had adjusted their standard of living based on that expectation.” He cautioned, at para. 49, against examining whether a reduction in work hours is significant exclusively from the perspective of the individual grievor.

The reduction of hours was significant because it affected many employees over several months in branches throughout the province. [ 14 ] The Arbitrator referred to the evidence of earlier attempts by the Employer to change the severance pay provisions and introduce the concept of “temporary layoff” to avoid having to pay severance. The Union, however, objected and the severance provision was not amended nor was the practice of paying severance on the day of layoff altered.

He noted, at para. 53: This shows that the parties addressed their minds to the practical difficulties associated with the very issues which are before me now. While there is a lengthy history of Company dissatisfaction with the layoff and seniority provisions, it cannot be said that the consequences of the

interpretation advanced by the Union were unforeseen or unintended. [ 15 ] The Arbitrator concluded, at para. 55, that sending the Employees home before the end of their shift was a layoff and that they were entitled to the benefits of Art. 5 of the Collective Agreement. [ 16 ] Addressing the Employer’s argument that the Union had failed to establish that less senior employees on the seniority list were actually working at the time the Employees were sent home, the Arbitrator observed, at para. 9, that in some cases, the records before him did not reveal whether the Branch 60 employees were sent home from the day shift or the afternoon shift. [ 17 ] The Arbitrator acknowledged, at paras. 57 and 58, that it would not have been a violation of Art. 5.06 if: (

i) the least senior employee actually on shift and working was sent home even if there was a less senior employee on the seniority list but who was not then at work; (ii) if the lay-offs at Branch 60 occurred during the afternoon shift, as Branch 46 was operating a day shift only whereas Branch 60 was operating a day shift and an afternoon shift; and (iii) Branch 60 employees were sent home early from the day shift if the junior employees in the affected classification at Branch 46 were absent by reason of illness, vacation or leave without pay. [ 18 ] The Arbitrator concluded, at paras. 59-61, that there was evidence that the decisions to send employees home early from Branch 60 were made without any regard to the seniority of Branch 46 employees as the joint seniority list was not consulted.

He also found there to be evidence that Branch 60 Employees were sent home when it was likely, although not proven, that less senior employees were working at Branch 46. He noted that the evidence necessary to prove that point was entirely within the possession of the Employer. He acknowledged that the Union had the onus of proving its grievance and commented that the reliability of some of the testimony of Union witness that they were sent home when less senior employees at Branch 46 was brought into question. He also described the evidence of attendance records as “less than satisfactory”.

He found that there was no evidence as to whether less senior Branch 46 employees in the affected classifications were actually working at the time when the Branch 60 Employees were sent home.

[ 19 ] However, the Arbitrator concluded, at para. 62, that the Union’s evidence placed a tactical burden on the Employer, without shifting the ultimate onus of proof. He stated, at para. 63: “I might reasonably draw an adverse inference because the Company failed to provide such evidence.” He observed, at para. 64, that the case was presented by agreement as a group grievance.

He noted, at para. 65, that if the less senior Branch 46 employees were sick, on vacation or had completed their shift at the time of the layoffs, and Art. 5.06 was not violated, “...it was by coincidence not design.” He concluded that the Employer violated the Collective Agreement when it failed to provide severance pay to the Employees who had been laid off within the meaning of the Collective Agreement. [ 20 ] On the matter of remedy, the Arbitrator concluded, at para. 66, that he did not have sufficient evidence to calculate the amount, if any, owed to each Employee.

He remitted this issue back to the parties for resolution, but remained seized of the matter. VI. The Standard of Review [ 21 ] Both parties submitted that reasonableness is the appropriate standard of review as the Arbitrator was being asked to interpret and apply the provisions of a Collective Agreement. As noted in the Respondent’s brief, the Supreme Court of Canada has recognized that labour arbitrators have special expertise in labour relations, the resolution of employment-related disputes and the

interpretation of collective agreements.

Major J., writing for the majority in Voice Construction Ltd v Construction & General Workers ’ Union, Local 92 , 2004 SCC 23 , [2004] 1 SCR 609 observed, at paras 29 and 30, that labour arbitration boards have more experience and expertise than the courts in interpreting collective agreements and, as such, are entitled to deference; see also Nor-Man Regional Health Authority Inc v Manitoba Association of Health Care Professionals , 2011 SCC 59 , [2011] 3 SCR 616, at paras 31 , 42, 45-53; Parry Sound (District) Social Services Administration Board v Ontario Public Service Employees Union, Local 324 (OPSEU) , 2003 SCC 42 , [2003] 2 SCR 157 at para 17 ; United Nurses of Alberta, Local 85 v Capital Health Authority (Sturgeon Community Hospital , 2011 ABCA 247 , 513 A.R. 176, at paras. 4 , 65, 66, leave to appeal refused [2011] SCCA No. 457 ; Alberta Union of Provincial Employees v Alberta , 2010 ABCA 216 , 482 A.R. 292, at paras 1 , 2, 11. [ 22 ] Based on the weight of the authority on this point, I find that the standard of review of the Arbitrator’s decision is reasonableness. [ 23 ] In Dunsmuir v New Brunswick , 2008 SCC 9 , [2008] 1 SCR 190, the reasonableness standard was described as follows, 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 a 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 a range of possible, acceptable outcomes which are defensible in respect of the facts and the law. [ 24 ] The tribunal is also entitled to draw inferences from evidence and conclusions based on those inferences. The reasonableness standard asks whether there is a line of reasoning that supports the tribunal’s conclusions: Alberta Union of Provincial Employees v. Alberta , 2010 ABCA 216 , at para. 18 . [ 25 ] Finally, as noted in Schroder v.

Alberta (Workers ’ Compensation Board) , 2010 ABCA 344 , 490 AR 298 at para 13 , the reasonableness standard does not permit a reviewing court to re-weigh the evidence presented to the tribunal and substitute its own preferred outcome. VII. The Issues on Judicial Review

[26] The issues are: 1. Whether the Arbitrator’s determination that the actions of the Employer in sending the Employees home before the end of theirshift constituted a layoff within the meaning of the Collective Agreement was unreasonable; and 2. If sending the Employees home before the end of their shift constituted a layoff, whether the Arbitrator unreasonably shifted the onus of proof to the Employer and unreasonably applied an adverse inference indetermining that the Employees had been laid off out of order of seniority? VIII. Analysis 1.

Did sending the Employees home before end of shift constitute a layoff?

The Employer’s position [27] The Employer submitted that the Arbitrator’s determination that the actions of the Employer constituted a lay-off in the caseof each Employee was unreasonable having regard to: • his finding that any unequal reduction of hours constituted a layoff under the Collective Agreement; • his failure to determine, in the case of each Employee, whether there was a significant reduction in hours to trigger a layoff, instead relying on the number of employees affected and the total number of hours lost by the bargaining unit; • his reliance on the number of hours of work employees had become accustomed to, without regard to Art. 6.01 of the Collective Agreement that provides that there are no guaranteed hours of work. [28] Referring to Canada Safeway Ltd v RWDSU, Local 454, (SCC), [1998] 1 SCR 1079, at paras 71-75, theEmployer argued that to constitute a layoff, there must be evidence that the employee is temporarily or indefinitely “discharged”.

Thishas the effect of suspending, rather than terminating, that employment relationship. In each case, the Employee was sent home early onthe understanding that he would report to work the next day.

There was no suspension of the employment relationship. [29] The Employer noted that for a loss of work to become a constructive layoff, there must be evidence of a significant reductionin the hours of work affecting one, as opposed to all, employees: Canada Safeway, at para. 76. [30] The Employer argued that the Arbitrator did not clearly articulate whether he concluded that an insignificant reduction inhours would trigger a layoff.

He appeared to find that a layoff was triggered by the mere fact that “select” employees were sent home,then attempted to distinguish Canada Safeway and Battlefords and District Cooperatives Ltd v RWDSU, Local 544, (SCC), [1998] 1 SCR 1118, both cases dealing with the layoff of part-time employees whose hours of work were variable. The Employermaintained that the principles in Safeway and Battlefords relating to what constitutes a layoff and constructive lay-off are clearly

applicable to this case, that the reduction in work hours in this case was by no means “significant”, and that the parties never intended that every unequally applied reduction in hours would trigger the layoff provisions of the Collective Agreement. [ 31 ] The Employer maintained that the circumstances in Canada Safeway are in fact similar to the present case. In that case, the part-time employees had no right to a minimum number of hours of work. Similarly here, under Art. 6.01, the Employees have no guaranteed minimum number of hours of work.

While acknowledging that the Employer had the right to reduce the hours of work, the Arbitrator found that this right was not exercised because the hours of work of all employees in the same classification were not equally reduced. However, there was no express stipulation in the Collective Agreement that work shifts had to be scheduled equally. [ 32 ] The Employer argued that even if Art. 6 implicitly grants employees a limited right to “normal” hours of work, in these situations the Employer retains the flexibility to alter hours of work in response to “abnormal circumstances”, and to temporarily

schedule work in an “abnormal way”, amounting to the establishment of new “normal” hours of work, citing Clean Harbors Canada, Inc. v Communications, Energy and Paper workers Union, Local 914 , [2009] OLAA No. 516 (Albertyn) at paras. 43-50. [ 33 ] The Employer maintained that to the extent that arbitral authorities relied upon by the Arbitrator support his conclusion that any unequal reduction of hours of work triggers a layoff, those cases were wrongly decided, none of them having carefully considered the principles in Canada Safeway and Battlefords .

Counsel for the Employer suggested that it is unclear whether the Arbitrator accepted these Supreme Court of Canada decisions as binding. [ 34 ] According to the Employer, it must first be determined whether a layoff has occurred before the seniority provisions of the Collective Agreement are considered. The Arbitrator employed circular reasoning in concluding (unreasonably) that any reduction in work opportunities amounts to a layoff if applied unequally within the bargaining unit; ie. he made the unequal application of work reduction the basis for determining whether the grievors had been laid off.

It was first necessary to determine whether the work reduction amounted to a “discharge” and, in the case of a constructive layoff, whether the reduction in work hours was “significant”. [ 35 ] The Employer noted that the amount of severance pay due to the Employee on layoff and the immediacy with which it must be paid make it obvious that a layoff is to be considered to be a cessation of work of a significant duration. The Arbitrator’s conclusion that any interruption in work hours, no matter how insignificant, constitutes a layoff triggering the obligation to pay severance was unreasonable.

The provisions for recall in the Collective Agreement are cumbersome and could not have been intended to apply to brief work interruptions. [ 36 ] The Employer maintained that the Arbitrator’s reference to, and

interpretation of, the bargaining history between the Employer and the Union was unreasonable. While the Employer was dissatisfied with paying severance on the day of layoff (as opposed to upon the expiry of all recall rights), this demonstrated that the Employer understood that its severance obligations were inconsistent with layoff.

It does not reasonably flow from this that there was no qualification or some minimum level of lost hours of work that is significant and thereby triggers a layoff. [ 37 ] The Employer argued that the Arbitrator’s determination that the reduction in hours was significant was also unreasonable, having determined that this issue should be considered not from the perspective of the individual grievor, but from the perspective of the bargaining unit as a whole. Layoff is the suspension of an individual employer-employee relationship.

The right to job protection based on seniority under the Collective Agreement is not exercised collectively. The Arbitrator unreasonably failed to consider the circumstances of each individual Employee to determine whether the reduction in his hours was significant enough to constitute a layoff within the meaning of the Collective Agreement. Adding up the number of Employees affected and the total number of hours lost bore no rational connection to whether the reduction of the hours of work of an individual grievor’s was significant.

Nor was using the situation of one Employee, who testified that his earnings during one month dropped by half, to conclude that all Employees had been laid off. No analysis was undertaken of the number of hours lost by each Employee and whether that particular loss was significant. Had the Arbitrator addressed his mind to each Employee’s situation, he would have noted that Mr.

Gorgichuk was sent home early on one occasion and missed only five hours of work, a loss that could not be reasonably viewed as significant. [ 38 ] The Employer submitted that it was unreasonable for the Arbitrator to consider what work the employees had become accustomed to without regard for how many hours they could expect to work under the collective agreement. This line of reasoning ignored Art. 6.01 that stipulates that normal hours of work are not guaranteed.

[39] The Employer maintained that the Arbitrator’s decision was devoid of “justification, transparency and intelligibility”, andproduced a result that fell outside the “range of possible, acceptable outcomes which are defensible in respect of the facts and the law”:Dunsmuir, at para. 47.

The Union’s Position [40] The Union pointed out, firstly, that in determining the intentions of the parties in a situation where there is a strong arbitralconsensus on a particular issue, it can be presumed that the parties drafted their collective agreement with this consensus in mind andexpected a similar disposition to apply in their case. To determine the meaning of “layoff” as it is employed in the Collective Agreement,the Arbitrator properly considered arbitral consensus on this issue.

He referred to a number of awards reflecting a consensus that a“layoff” is the reduction in work hours of selected employees due to shortage of work.

If some employees’ hours are reduced and othersare not, absent contrary explicit wording in the Collective Agreement, this constitutes a layoff. [41] The Union submitted that this approach was endorsed by the Supreme Court of Canada in Battlefords, Cory and McLachlinJJ. (as she then was) having concluded, at para. 17, that it was “eminently reasonable” for labour arbitrators to hold that “a significantreduction in hours, in circumstances where a particular employee is singled out, may amount to a constructive layoff”.

The Arbitratorfound that the Employer’s repeated actions in selectively reducing the hours of individual employees constituted a layoff. [42] The Union argued that, by definition, an employment relationship is not severed on layoff as the laid-off employee retainsseniority, recall rights and some benefits (Art.’s 4.06a, 4.07, 5.08, 5.09, and 5.10). In Canada Safeway, a layoff was referred to as a“disruption” or “suspension” of work.

Section 62 of the Employment Standards Code, RSA 2000, c. E-9 is consistent with this principleand reflects the fact that a temporary layoff maintains the employment relationship: Temporary layoff 62 If an employer wishes to maintain an employment relationship without terminating the employment of an employee, the employer may temporarily lay off the employee.

The parties clearly intended that the employment relationship survive the payment of severance. [43] According to the Union, the Arbitrator properly distinguished Canada Safeway and Battlefords on the basis that theyinvolved part-time employment situations while the Arbitrator here was dealing with full-time employees with full-time shifts withpredictable start and stop times. The present case was properly determined by reference to the Collective Agreement and arbitral awardsaddressing the layoff issue.

There was here a cessation of work which had a differential impact on members within the sameclassification; such a selective send-off triggered the right to severance pay.

Counsel referred to arbitral decisions that considered periodsas short as half of one shift as amounting to a layoff: Re Marcus Transformers of Canada Ltd. and les Métallurgistes Unis, Local 7625 (1990), (QC LA), 16 LAC (4th) 203 (Frumkin), at page 210. [44] While the Employer distinguished arbitral awards cited by the Union on the basis that they did not contain provisions like Art.6.01, which expressly provides that employees are not guaranteed a specific number of work hours, even absent this type of provision, itis a “... basic tenet of labour law that management retains the right to manage the workplace, including the right to

schedule work hours,subject to the express provisions of the collective agreement.” [45] By noting that the Employees’ normal hours of work were at least full-time, the Arbitrator was not suggesting that these hourswere guaranteed; they simply provided a benchmark against which to measure whether the loss of hours was significant. The Arbitratordid consider the individual circumstances of each Employee in concluding that the loss of even a few hours of work was significantbecause the Employees were accustomed to full time hours and adjusted their standard of living to that expectation.

The Arbitrator onlyconsidered the entire bargaining unit as a whole to acknowledge that the Employer was engaging in a veiled attempt to avoid laying off aparticular person or paying severance. Accordingly, the individual Employees’ situations, including that of Mr. Gordichuk, were quiteproperly examined by the Arbitrator within the broader context of what was occurring on a widespread basis.

[46] As to whether, in any event, the reduction in work hours was indeed “significant”, the Union submitted that this must bemeasured against the normal hours of work, a fact-specific exercise well suited to an individual arbitrator, and not to be revisited afreshby the reweighing of the evidence on judicial review. [47] In response to the Employer’s contention that there was here no “cessation of work” that qualified as a layoff, as defined inCanada Safeway, the Union maintained that this was contrary to the evidence before, and the findings of, the Arbitrator.

The affectedemployees were sent home and ceased working because there was no work for them. [48] The Employer’s contention that the result of the Arbitrator’s decision is that any and every reduction of work hoursconstitutes a layoff was incorrect, according to the Union. The Arbitrator was not examining “any and every reduction” but thewidespread and longer-term practice being used by this Employer. [49] The Employer’s contention that it had simply changed the normal work hours of the employees who were sent home was not,in fact, what it did. Contrary to

Article 5.06, it sent home only certain employees, rather than changing the work hours of all employeeswithin a single classification. [50] According to the Union, the Arbitrator reasonably concluded that the Collective Agreement required the Employer to payseverance to the Employees. The language used in the Collective Agreement is unambiguous and must be applied in the sense in which itwas used.

It is not for the Arbitrator to say whether or not the wording of the contract is workable: United Automobile Workers, Local1213, re Cockshutt Aircraft Ltd., Loc 1213, [1955] CLAD No 2, 5 L.A.C. 2087 (Anderson), at para. 21; DHL Express (Canada) Ltd vCAW Canada, Locs 4215, 144 and 4278, (CA LA), [2004] CLAD No 613, 124 LAC (4th) 271 (Hamilton), at para.76.

In DHL, the arbitrator concluded, at para. 83, that in interpreting the collective agreement he was not allowed to consider what wouldbe “fair” compensation or what costs the company might incur as a result of giving effect to the plain meaning of one of its provisions.As noted in Alberta v Alberta Union of Provincial Employees, 2008 ABCA 258, 433 AR 159, at paras. 41 and 43, perceived unfairnessis not a principled basis on which to override the plain meaning of a provision of a collective agreement. [51] The Union asserted that the Arbitrator gave effect to the plain meaning of the layoff provisions of the Collective Agreement.The Collective Agreement could have provided that severance was to be paid once a laid-off employee’s recall rights expired and theemployment relationship terminated, but that was not what the parties agreed to.

The agreement was to pay severance immediately uponlayoff. If the layoff period was short, the Collective Agreement provided an appropriate remedy in requiring an employee who isrecalled during the severance pay period to repay the severance. [52] The Union argued that long-standing jurisprudence on the issue of seniority provides context for the parties’ collectivebargaining and the Arbitrator’s decision. Seniority rights are an integral part and cornerstone of collective bargaining.

Provisionsaffecting seniority rights should be strictly construed: Teamsters’ Union, Local 938 v Lakeport Beverages, a Division of LakeportBrewing Corporation (2005), (ON CA), 77 O.R. (3d) 543; 258 D.L.R. (4th) 10 (C.A.), at paras. 56-57; see also: ReToronto Star Newspapers Ltd and Southern Ontario Newspaper Guild, Local 87, (ON LA), [1983] OLAA No 5, 10LAC (3d) 1 (Picher) at paras. 37-38. Collective agreements should not be interpreted in a manner that undermines these rights:Battlefords, at para. 18. Here, the Collective Agreement provides in para. 5.06 that seniority alone governs in the event of layoff.

TheArbitrator gave effect to this clearly-worded provision. [53] The Union pointed out that it provided evidence at the arbitration hearing of the parties’ collective bargaining in 1992 and1994 to demonstrate that the Employer had sought to change the practice of paying severance on the day of layoff and to introduce“temporary layoff” to the Collective Agreement. It was ultimately unsuccessful in bargaining these changes. The Arbitrator thusreasonably concluded that the parties’ bargaining history reflected a common understanding of the layoff and severance provisions.

Discussion [54] The fundamental object in construing the provisions of a collective agreement is to discover the intention of the parties whoagreed to it: The “cardinal presumption” is that the parties are assumed to have intended what they have said, and that the meaning of the collective agreement is to be sought in its express provisions: DJM Brown, QC & DM Beatty, Canadian Laour Arbitration, 4th ed,looseleaf (Aurora, Ont: Canada Law Book Inc, 2012) 4:2100.

[55] In this case, the Arbitrator characterized the actions of the Employer in sending the Employees home before the end of shift asa “layoff” by reference to the Collective Agreement and to the cases, precisely the same approach used by the majority of the Court inCanada Safeway, at para. 71. He found that employer removed work from the employee, which constituted a cessation of work,temporarily suspending the employee, and cited Canada Safeway, at paras. 70, 73, and 74.

There was evidence on the record to supporthis finding that the Employees were sent off before the end of shift due to a shortage of work. [56] Counsel for the Employer urged the Court to find that the Arbitrator ignored the requirements for a layoff set out in CanadaSafeway. There, Cory and McLachlin JJ. noted, at para. 72, Vancise J.A.’s reference in University Hospital v Service EmployeesInternational Union, Local 333 U.H. (1986), (SK CA), 46 Sask R 19, 26 DLR (4th) 248 (CA) at p. 28, to a layoffoccurring “when the employee-employer relationship is “seriously disrupted”.

However, they went on to cite Vancise J.A.’s referenceimmediately following to the Black’s Law Dictionary definition of layoff as “[a] termination of employment at the will of the employer.Such may be temporary (e.g. caused by seasonal or adverse economic conditions) or permanent”. [57] Cory and McLachlin JJ. went on to emphasize, at para.73, that while sometimes used with termination, the function of layoffis “... to define a cessation of employment where there is the possibility or expectation of a return to work.” They did not expressly adoptthe conclusion of Wakeling J.A. in the same case that layoff must involve, at the very least, a substantial reduction in the hours of work(para. 53). [58] Cory and McLachlin JJ. observed, at para. 80, that: “Layoff simply refers to the temporary cessation of employment, forwhich damages are not available” (emphasis added) in their discussion distinguishing constructive layoff from constructive dismissal.They clarified that, as a matter of law, a “layoff” as used in labour law, refers to the denial of work to the employee and that it cannot befound where the employee continues to work the usual number of hours (para. 70).

More must be shown than a “disruption of work”.The disruption must occur as a result of a cessation of work (para. 78). In this case, I find that the Arbitrator reasonably concluded therewas a cessation of work. [59] The Arbitrator also referred to the observation in Battlefords, at para. 18, that in the absence of a clearly expressed intentionto the contrary, the provisions of a collective agreement should not generally be interpreted in a way that undermines acquired seniorityrights.

Thus, it was reasonable for the Arbitrator to consider the impact of a reduction in hours in the context of the Collective Agreementas a whole. In this case, the selective send-off caused a differential impact on members within the same classification, and this affectedthe seniority provisions of the Collective Agreement. [60] The Arbitrator also examined the situation of each individual Employee, and considered their situations in the context of whatoccurred on a more widespread basis. In particular, he reasonably assessed the impact of the lay-offs on the seniority rights protectionsunder the Agreement.

It would be simplistic to argue that Mr.

Gordichuk was not laid off without looking at the context; one isolatedreduction in hours might not override Art. 6.01 that normal hours of work are not guaranteed, but could reasonably be found to be alayoff if part of a more widespread practice of selectively reducing hours that effectively eroded seniority rights under the CollectiveAgreement. [61] I agree with the Union’s submission that the Arbitrator’s reference to the Employees’ usual hours of work and full-timenature of those hours simply served as a benchmark to measure whether the work reduction was “significant”, rather than suggesting thatthe Employees’ hours of work were guaranteed. [62] Finally, I agree with the Union that the Arbitrator was not here determining that any and every reduction of work triggered thelayoff provisions.

Rather he found them to have been triggered in the particular factual context before him. [63] The Arbitrator took note of arbitral decisions, in particular, Clean Harbors, at para. 26, that cited other case authorities for theproposition that subject to the terms of the collective agreement and notwithstanding a clause relating to normal hours of work, anemployer can implement a temporary reduction in hours “... provided it does not create a new norm, and provided it applies thereduction equally across the bargaining unit.” (emphasis added).

He referred to Communications, Energy and Paperworkers Unionof Canada, Local 2003 (Sub 33) v Redpath Sugar (Cancelled Shift Grievance), [2009] OLAA No 284 (Cummings), that also concludedthat the employer’s choice to reduce work that has a disparate effect on some employees, but not others, amounts to a layoff. In MarcusTransformers, Arbitrator Frumkin noted that absent the clearest of language in the collective agreement to the contrary, any periodduring which the employee is relieved from duty for lack of work qualifies as a lay-off.

While Marcus Transformers pre-dates CanadaSafeway and Battlefords, the characterization of a lay-off as a cessation work due to a lack of work is common to these decisions.

[ 64 ] In the present case, as in Clean Harbours , the selective reduction of work hours did not proceed on the basis of seniority. It was, in my view, reasonable for the Arbitrator to consider layoff not in isolation, but in the context of the Collective Agreement as a whole, including seniority rights. As noted by the Union, only very clear language in a collective agreement should affect seniority rights and collective agreements should not be interpreted in a manner that undermines those rights: Lakeport Beverages , at para. 56 ; Battlefords , at para. 18.

Accordingly, as noted in Canada Safeway , at para. 76, the ultimate issue of whether a reduction in hours amounts to a layoff becomes one of construction of the Collective Agreement.

It was not unreasonable in the circumstances for the Arbitrator to have recognized, at para. 55, the implications of determining what actions constitute a layoff within the context of the Collective Agreement as a whole. [ 65 ] I am of the view that it was not unreasonable for the Arbitrator, in examining the layoff provisions, to find that Art. 6.01 did not expressly protect the Employer from recourse under the layoff provisions when it reduced the work hours of some, and not all, of its employees or employees within a particular classification. [ 66 ] Finally, I find it was reasonable for the Arbitrator to distinguish this case from Canada Safeway and Battlefords on the basis that those cases involved part time employees with variable work hours.

As he noted at para. 47: “If an employee’s hours of work normally vary daily or weekly, as in Canada Safeway and Battlefords Co-operatives , it follows that the reduction in hours would have to be “significant” to distinguish it from the normal variation in the work schedule.” I am the view that his comments do not reflect a rejection of the binding effect of the principles in Canada Safeway , but rather an understanding that what might be considered “significant” must be evaluated on the basis of the circumstances of each case, the Court not having defined when a reduction in hours becomes “significant”. [ 67 ] I am of the view that the Arbitrator did not unreasonably dismiss the Employer’s argument that given the burdensome task of immediately providing severance pay to employees who had lost just a few hours of work to comply with the Collective Agreement, these situations could not have been intended to trigger the severance pay provisions.

There was some evidence in the parties’ negotiation history to buttress his conclusion, as well as a history of arbitral awards that caution against Arbitrators taking into account notions of fairness and convenience when interpreting Collective Agreement.

As observed in United Automobile Workers , at para. 21: “...it is not our function as arbitrators to say whether or not the Contract as worded is workable.” [ 68 ] I agree with the Union’s submission that the fact that the Union earlier resisted the alteration of the provisions with respect to layoff at the bargaining table, coupled with the requirement that severance pay must be paid immediately on layoff, tend to provide some protection against the development of a practice of selectively sending Employees home from work early as a means to avoid its obligations under the Collective Agreement.

As noted by the Union in its brief, “It would be incongruous, and contrary to sound labour relations practice, if the Employer could achieve through litigation what it was unable to achieve through bargaining.” [ 69 ] In all of the circumstances, I find that the conclusion reached by the Arbitrator that the layoff provisions of the Collective Agreement were triggered by the actions of the Employer and the path of reasoning he took to reach that conclusion are sustainable on a reasonableness standard of review.

His reasons were intelligible and transparent and result fell within the “range of possible, acceptable outcomes which are defensible in respect of the facts and the law”. 2. Did the Arbitrator unreasonably shift the onus of proof to the Employer and unreasonably apply an adverse inference in determining that the Employees were laid off out of order of seniority?

The Employer ’s Position [ 70 ] The Employer submits that the Arbitrator’s ruling on this issue was unreasonable in that it improperly shifted the burden of proof and improperly applied an adverse inference against the Employer to fill an evidentiary gap in the Union’s case. [ 71 ] According to the Employer, even if the circumstances here amounted to a layoff, it was unreasonable for the Arbitrator to find that Art. 5.06 had been violated. The Union had the onus of proving a prima facie case yet did not present evidence to establish that any of the Employees was actually sent home out of the order of seniority.

It was entirely possible that the more junior Branch 46

employees were absent for some reason on the days each of the Employees was sent home from Branch 60. Also, as acknowledged by the Arbitrator, if an employee was sent home from Branch 60 in an afternoon shift, all Branch 46 employees would have completed their work day and no violation could therefore have occurred.

There was no evidence presented to the Arbitrator to establish that the less senior Branch 46 employees in the affected classifications were actually working at the time the Branch 60 employees were sent home early. [ 72 ] The Employer maintained that the Arbitrator drew an adverse inference against the Employer, having stated that the evidence necessary to prove this point was entirely within the possession of the Employer. An adverse inference cannot substitute for proof of the facts necessary to establish a prima facie case.

The Employer submitted that the Arbitrator’s reliance on the adverse inference was unreasonable, citing Weedon v. Sherritt Inc. , 2004 ABCA 160 , 130 ACWS (3d) 1132, at para. 9 and L. Borys Professional Corporation v Joshi, 1998 ABQB 775 , 235 A.R. 82, at paras. 36-39 .

Moreover, the evidence referred to by the Arbitrator was not “entirely within the possession” of the Employer because the Union could have called the more junior Branch 46 employees, identified them from the seniority lists jointly prepared for Branches 46 and 60, questioned them as to whether they were working the relevant shifts, and required them to bring documentation to the hearing to assist them in responding to questions. [ 73 ] The Employer noted that the Arbitrator made no specific findings in relation to each Employee, and simply concluded that there was evidence that Branch 60 employees were sent home early from the day shift.

The only record establishing an occasion when a Branch 60 employee was sent home during the day shift related to Mr. Gorgichuk.

The Arbitrator was aware of the lack of evidence on this issue, having commented, at para. 66: “I am not satisfied that I have sufficient evidence to calculate the amount, if any, which may be due to the individual grievors.” [ 74 ] Accordingly, the Employer submitted that this aspect of the Arbitrator’s decision was devoid of “justification, transparency and intelligibility” and produced a result that fell outside the “range of possible, acceptable outcomes which are defensible in respect of the facts and the law”.

The Union ’s Position [ 75 ] The Union submitted that a breach of Art. 5.06 depended on whether junior employees were actually working (at Branch 46) when senior employees were laid off. As the Employer has the evidence needed to identify those more junior employees who were working at the time of the layoffs, the matter of remedy was quite reasonably left by the Arbitrator to the parties to resolve. [ 76 ] The Union submitted that there was no improper shifting of the onus of proof as alleged by the Employer.

The Arbitrator found that there was some evidence from which it could reasonably be concluded that more junior employees continued working while more senior employees were sent home, resulting in a shift of the tactical burden to the Employer. The Arbitrator then gave the Employer an opportunity to meet its tactical burden through resolution discussions. This mechanism worked to the benefit of the Employer as there would be no risk of overpayment to the individual Employees, if it was determined that a junior employee was not in fact working on a particular day when the Employee was laid off.

The Union did not have in its possession the pay stubs of the junior employees or the information as to what shift they may have been working. The Arbitrator was also reasonably providing the Employer the opportunity to ensure that severance pay for a given year had not already been used up by an Employee. [ 77 ] The Union maintained that no adverse inference was actually drawn against the Employer, the Arbitrator having only observed that one might be drawn.

In fact, the Arbitrator reserved on all issues of quantum, thus providing the Employer the opportunity to gather the evidence as to the appropriate remedy in the case of each Employee, which supported their contention that no adverse inference was drawn. While the Employer argued that the Union should have called the most junior employees to testify as to what shifts they worked two years earlier, this would have been cumbersome and time-consuming, the Employer being in possession of the records that would conclusively determine who was working when.

The Union therefore submitted that the Arbitrator’s decision was reasonable and the Employer failed to provide a principled basis for interfering with his approach to the matter of remedy. Discussion [ 78 ] I am of the view that the Arbitrator’s decision to reserve on remedy was reasonable in all the circumstances. As pointed out by the Union, he indicated only that he “might” draw an adverse inference.

Had he drawn an adverse inference from the Employer’s failure to adduce evidence within its possession of whether the Branch 46 junior employees were working on the days the Employees were laid off, one might then have expected that the only unfinished task would have been the actual calculation of the severance and any other

benefits owed to each individual Employee. However, he gave the Employer the opportunity to garner evidence on the issue. This was a reasonable approach in my view. [ 79 ] While the Union bore the onus of proving its grievance and the entitlement of each member to a remedy, the evidence established that the individual Employees lost the work hours alleged, that they were selected to be sent home without reference to the joint seniority list applicable to both Branch 46 and Branch 60, and that there were employees junior to them working at Branch 46.

The Arbitrator found this to be some evidence that justified a tactical shift of the burden, and that the absence from work of junior employees at Branch 46 triggering a violation of Art. 5.06 would have been “more by coincidence not design”. The matter of determining precisely who was working when and what shift were matters could properly be left to the parties to resolve, the Arbitrator having reasonably found there to have been a layoff in each case within the meaning of the Collective Agreement.

In doing so, the Arbitrator preserved the Employer’s ability to ensure that severance would not be paid where seniority rights had not been breached. [ 80 ] The alternative proposed by the Employer, namely, calling the employees of Branch 46 who were junior to those sent home early from Branch 60 to ask whether they had been working on a particular day some two years before, would have been inconvenient and time-consuming, given they could likely not be relied upon to have any recall of the days in question or to have kept the pay stubs.

Also the Employer would have had to produce its records of what shift was worked by the Employees at Branch 60 on the days in question. I am of the view that the Arbitrator established a reasonable framework for the determination and resolution of each grievance. IX. Conclusion [ 81 ] The decision of the Arbitrator was reasonable.

It fell within “... a range of acceptable outcomes which are defensible in relation to the facts and the law, and it reveals justification, transparency and intelligibility within the decision-making process”: Schroder , at para. 15 . [ 82 ] The parties may speak to costs within thirty days if they are unable to come to an agreement with respect to same. [ 83 ] I would like to thank counsel for their thorough written briefs and helpful oral submissions. Heard on the 6 th day of February, 2013. Dated at the City of Edmonton, Alberta this 11 th day of March, 2013. __________________________________________ M.T.

Moreau J.C.Q.B.A. Appearances: Dan Bokenfohr and Hugh J.D. McPhail, Q.C. for the Applicant Finning (Canada) Division of

Finning International Inc. John Carpenter for the Respondent International Association of Machinists and Aerospace Workers, Local Lodge No. 99 _______________________________________________________ Corrigendum of the Memorandum of Decision of the Honourable Madam Justice M. T. Moreau _______________________________________________________ The citation has been changed to read the following: Finning (Canada) v. International Association of Machinists and Aerospace Workers, Lodge No. 99, 2013 ABQB 149