United Nurses of Alberta v Alberta Health Services, 2017 ABQB 25

Court of Queen’s Bench of Alberta Citation: United Nurses of Alberta v Alberta Health Services, 2017 ABQB 25 Date: 20170113 Docket: 1603 06643 Registry: Edmonton Between: United Nurses of Alberta Applicant - and - Alberta Health Services Respondent _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice S.D.

Hillier _______________________________________________________ Introduction [ 1 ] This application for judicial review raises a classic point of conflict in labour relations: what is the proper measure to determine whether a layoff (workforce reduction or position elimination) is necessary . Numerous arbitration decisions have considered the issue over a number of years. Courts have been obliged to review only a few of those decisions.

It is not a matter which conforms to a singular response. [ 2 ] Alberta Health Services (AHS) and the United Nurses of Alberta (UNA) are parties to a collective agreement affecting nursing services at different work sites in the Province of Alberta. They have agreed to submit two separate arbitration board decisions for review, not as a consolidation but to be considered at the same time. The first decision (issued June 22, 2015 chaired by David Tettensor, Q.C.) pertains to the Stollery Children’s Hospital in Edmonton (the Stollery Award).

The second decision (issued March 30, 2016 chaired by Robson Garden, QC) pertains to the Rockyview Hospital in Calgary (the Rockyview Award). Both Awards concerned the elimination of Registered Nurse positions. Although the collective agreements cover different time periods, counsel are agreed that the relevant provisions, particularly as relate to lay off (Article 15) are the same. In this decision I will use the term Collective

Agreement to refer to the Agreements at either or both affected work sites. [ 3 ] In brief overview, the Stollery Award dealt with re-organizing the staffing mix in some critical care units and identified two differing measures of when a layoff is “necessary”. The more stringent, plain dictionary test is whether layoff is required or essential; the lower and more contextual test is whether layoff is grounded in good faith and is reasonable. [ 4 ] At paras 124-126, the Stollery Award adopted the

interpretation of earlier decisions that the term “necessary” in the context of the collective agreement and the nature of the undertaking (public health services) means: ... when the Hospital finds that something, in its judgment, needs to be done. As long as the Hospital’s decision is made in good faith, for legitimate reasons, an Arbitration Board has no cause to intervene. [ 5 ] The Rockyview Award dealt with a re-organization that eliminated one part-time position, but overall increased nurse education services in an affected area.

That decision identified the same two standards as the Stollery Award for the test of “necessary” and found that the evidence met both standards (paras 142-143). [ 6 ] UNA argues that both Awards unreasonably concluded that position elimination was necessary and, in addition, that the Rockyview Award failed to answer the question put to it: which standard of “necessary” applies. [ 7 ] Although the circumstances and the wording of various collective agreement articles are important in any judicial review, this judgment is about interpreting the common element in these two differing fact situations: when is a layoff necessary?

In part this recognizes the parties’ aspirations to have a more cohesive, albeit not definitive, answer to this prevailing issue. The bottom line remains that facts and context are major drivers in response to any request for

interpretation, both at arbitration and judicial review. Evidence Stollery Award [ 8 ] The circumstances of the first grievance were somewhat simplified by an Agreed Statement of Facts. It was marked in the arbitration together with documents without formal proof of authenticity, but left open the relevance of other information provided by both sides.

Appendix A sets out the most germane portions of that document upon which the oral evidence was predicated. [ 9 ] Broadly, the Agreed Statement identified the parties to a collective agreement applicable to relations between the parties in connection with planning and delivery of health services at the Stollery and elsewhere.

It identified the changes made in the spring of 2013, which impacted registered nurses (RNs), licensed practical nurses (LPNs) and health care aides. [ 10 ] Four patient care areas were affected by the staffing changes, resulting in a total of 12 registered nurses receiving notices of layoff or position elimination, the equivalent of 9.4 full-time (FTE) positions, and the elimination of two health care aide positions, the equivalent of 1.0 FTE. [ 11 ] A total of 10 full-time LPN positions were added. [ 12 ] The staffing for the pediatric oncology and hematology inpatient unit, 4E3 (a focus of much of the Union’s concern), was changed as follows: • a reduction of just under four FTE RN positions; • reduction of one FTE health care aide; and • the addition of three FTE LPN positions. [ 13 ] The Stollery Award supplemented the Agreed Statement with a detailed

summary of the oral evidence. The evidentiary details and the arbitrators’ findings were not explored in the parties’ submissions in the judicial review, except to confirm that a legitimate dispute arose as to whether the changes in staffing were necessary. Without detracting from the significant amount of evidence submitted and the extensive review set out in the Stollery Award, the Court has been asked to interpret the outcome. The following

summary of process and net results will suffice in that regard. [ 14 ] The parties met to consult as contemplated by

Article 15.01(

b) of the Collective Agreement, with the Employer explaining its proposal to introduce some aspects of care by LPNs in pediatric oncology and hematology (4E3) and to a lesser extent for three other units. [ 15 ] The Employer said the changes flowed from data relating to patient acuity, occupancy, and budget constraints, and also noted its concern that changing the model of care could not be completed by attrition on a timely basis. The broadening scope of LPN practice and bed occupancy data for oncology patients were considered as part of the cost saving initiatives. [ 16 ] The Union raised a number of concerns through the Professional Responsibility Committee (Art. 36) related to:

a) children’s safety,

b) differential skills and training of LPNs,

c) demands on remaining RNs (especially those who are chemo-certified),

d) increases in patient wait times, and

e) other specific impacts. [ 17 ] The staff mix, particularly on Unit 4E3 with 14 beds, was recognized as a complex issue. It was further complicated in 2013 by three maternity leaves and other absences as well as recruitment and retention issues. Changes in shift schedules were made. [ 18 ] The Employer recognized the focus on Unit 4E3, while emphasizing that it was just one part of the whole re-staffing. There was no dispute that Unit 4E3 had been operating at a deficit in the mid- $400,000 range before the changes, and the low $200,000 range thereafter.

Evidence disclosed that some of the cost savings projections were achieved, others were not. Budgeting was one of the factors considered along with staffing mix, scope of practice and availability of LPNs and RNs.

The Employer’s goal was to save $176,000 which, in terms of the annual cost of an RN position, would be approximately 1.75 FTE. [ 19 ] The Stollery Award variously identified a number of topics raised during discussions tied to “budget imperatives” including that the Employer wanted: • to decrease overtime and reduce operating budgets for units 4E2 and 4E3 (para 58, 68); • to achieve efficiencies with better use of full scopes of practice (para 69-70, 132); • a quicker response to the issues than could be achieved through staff attrition (para 127-129); and • to be proactive about a future shortage of RNs (para 72, 133). [ 20 ] The evidence also profiled implementation difficulties.

At times Unit 4E3 may have operated below baseline (paras 25; 39) and required the use of casuals and overtime (para 58). [ 21 ] One distinct issue in the Stollery Award concerned the assignment of bargaining unit work from RNs to LPNs. That aspect of the grievance was dismissed (para 143) and the Union did not pursue that matter on judicial review. [ 22 ] The Stollery Award concluded: In any event, the evidence establishes that the decisions were taken for legitimate reasons, in good faith.

Having decided upon a different staff mix for the reasons outlined, it became necessary to reduce the RN working force and eliminate positions. The Employer, in my view, exercised its rights in a “professional, fair and reasonable way”. (para 134) Rockyview Award [ 23 ] The Rockyview Award arose out of an increase in beds on Unit 72 following which the Employer wanted to increase the full time equivalents of Clinical Nurse Educators (CNEs) by 0.34 FTE.

As their title infers these members of the RN bargaining unit provide continuing clinical education and support for RNs and LPNs on the assigned unit and do not have direct patient responsibility. Again the parties agreed on a number of documents and evidentiary matters as attached (Appendix

B) to be supplemented by oral evidence. [ 24 ] In addition to setting the context of CNE services generally at Rockyview, this Agreed Statement set out the circumstances for inpatient medicine services on Unit 72 including the transfer of neurology patients and a later increase back to 32 beds by October 2014. When the incumbent declined to increase her hours from 0.53 FTE to a 0.84 FTE position, the Employer eliminated the 0.53 FTE and posted for a 0.84 FTE position.

Although the Union objected and suggested a second position of 0.34 or 0.42 FTE be posted, the Employer cited concerns for continuity of care and patient safety issues. [ 25 ] Four witnesses were called to provide supplementary evidence, including the consultation with UNA and that no other CNE employed at Rockyview was prepared to increase to a 0.84 FTE. [ 26 ] After the Unit 72 incumbent was laid-off, she was placed in an acceptable position elsewhere before commencing maternity leave.

Accordingly, the incumbent’s position was eliminated and a new position added with a higher FTE. [ 27 ] The Employer’s evidence explained that it did not want to create another similar assignment nor a job share because a 0.34 FTE presented a variety of concerns including orientation and issues with trust and skill levels. It described that “The objective is to ensure that all nurses and LPNs on the unit have complete and up-to-date training on any and all procedures and medical equipment on the unit.

CNEs do not have direct patient responsibility; however, they assist the nurses who do as and when additional expertise or assistance is required.” (para 9) [ 28 ] The evidence also noted past experience trying to cover with positions of 0.53 FTE (para 59), concerns about duplication, and the importance of continuity in being available to staff. (para 36) [ 29 ] The Rockyview Award held that, by either measure from prior arbitration decisions, the Employer had met the “necessary” test.

Since something needed to be done to provide additional support, a decision was made in good faith and for legitimate reasons of effectiveness and efficiency. (para 142) Further, the Award held that a decision to establish two lower FTE positions as proposed by the Union “... would have been, objectively, operationally impractical for the reasons set out in the evidence.” (para 143) [ 30 ] The Union’s second ground for review alleged that this reasoning failed to answer the question put to it by relying on both standards. [ 31 ] Both Awards included dissenting reasons from the Union nominees.

Standard for Review [32] Expressed with different emphasis, the parties agree that the proper standard to be applied when interpreting an arbitrationdecision is reasonableness. There is no dispute that the Board is acting within the expertise of its jurisdiction, attracting a level ofdeference (Dunsmuir para 47): Tribunals have a margin of appreciation within the range of acceptable and rational solutions.

A court conducting a review forreasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and tooutcomes. [33] However, the SCC explains further (paras 48-49) that deference ...does not mean that courts are subservient to the determinations of decision makers, or that courts must show blind reverence to theirinterpretations, or that they may be content to pay lip service to the concept of reasonableness review while in fact imposing their ownview... [34] Therefore, UNA urges that the court bears a responsibility to examine the findings of facts and application of the law both interms of assessing an unreasonable outcome as well as material flaws in the reasoning process by which a particular result orinterpretation was chosen. [35] AHS asserts that the reasonableness standard invites an assessment of justification, transparency and intelligibility within thedecision-making process.

The court need not agree with the

interpretation or outcome as the most reasonable or likely result, so long as itis within the range of supportable outcomes: United Nurses of Alberta, Local 301 v. Capital Health Authority (University of Alberta)2009 ABCA 202 at paras 7-9. [36] As applied here, AHS simply urges that the

interpretations of both arbitration decisions are consistent with each other, withthe wording of the collective agreement, and with the applicable case law. The reasons expressed in each decision, taken as a whole, fallcomfortably within the range of defensible outcomes on the facts and the law. [37] I confirm that reasonableness is the proper standard and that deference arises in the context of assessing the reasoning processand outcomes as to whether the decisions here fall within the range of supportable outcomes. [38] Further the case law provides that even if one

interpretation is found to be reasonable, a different arbitrator is not bound tofollow that

interpretation and may reach a different, but still reasonable

interpretation: Essex County Roman Catholic School Board v.Ontario English Catholic Teachers' Assn (2001), (ON CA), 56 OR (3d) 85 (Ont CA) at para 35; Alberta HealthServices v Alberta Union of Provincial Employees, 2013 ABCA 243 (at para 17); Altus Group Ltd v Calgary (City), 2015 ABCA 86 (atpara 16-17); citing Irving Pulp & Paper Ltd v LEP, Local 30, 2013 SCC 34. Collective Agreement [39] While the language of any collective agreement must be read as a whole, the following provisions are most central to thepositions advanced by the parties:

Article 4 4.01 The Union acknowledges that it shall be the exclusive right of the Employer to operate and manage the business in all respects,unless otherwise provided by this Collective Agreement. Without limiting the generality of the foregoing, the Employer reserves allrights not specifically restricted or limited by the provisions of the Collective Agreement including the right to: (

a) maintain order, discipline and efficiency; (

b) make or alter, from time to time, rules and regulations, to be observed by Employees, which are not in conflict with any provisionof this Collective Agreement; (

c) direct the working force and to create new classifications and work units and to determine the number of Employees, if any,needed from time to time in any work unit(

s) or classification(s), and to determine whether or not a position will be continued or declaredredundant; (

d) hire, promote, transfer, layoff, recall and to demote, discipline, suspend or discharge for just cause.[1]

Article 15 15.01 (

a) For the purposes of

Article 15: Layoff and Recall, “ability to perform the work” shall be assessed by the Employerrecognizing the need to provide a reasonable period of familiarization and orientation. (

b) The Employer and the Union shall meet prior to a possible reduction in the workforce or a position elimination. Thepurpose of this meeting is to discuss the extent of the planned reduction or position elimination, how the reduction or positionelimination will take place, review the current seniority list, the manner in which information will be provided to affected Employeesand discuss other relevant factors, including the administrative and operational complexities arising out of the application of this Articlein a province-wide bargaining unit.

Unless otherwise agreed between the Employer and the Union, these discussions shall not delay theissuance of notice of position elimination or workforce reduction.

15.02 (

a) In case it becomes necessary to reduce the working force, or eliminate positions, the Employer will notify Employees in person of by registered mail or by courier who are laid off 28 calendar days prior to the layoff, and shall forward to the Local a copy of the notice of layoff forthwith; except that the 28 calendar days notice shall not apply where layoff results from

an Act of God, fire, flood or a work stoppage by Employees not covered by this Collective Agreement. [ 40 ] The Layoff

article goes on to provide for layoff in reverse order of seniority, in most instances; sets out an extensive scheme for displacement (bumping) and recall. As well, it sets out clarification of the terms under which benefits will continue and the application of other terms of the Collective Agreement. [ 41 ]

Article 36 sets out the terms of reference for the Professional Responsibility Committee as referenced in clause 15.01. [ 42 ] In addition there are extensive provisions dealing with the shift

schedule (Art. 7), seniority (Art. 12), the Grievance/Arbitration process and over 20 Letters of Understanding. The product of the bargaining process is highly sophisticated. Position of the Parties UNA [ 43 ] The Union’s argument at both arbitrations focussed on the evidence, as is reflected in the decisions. On the Stollery Award, the Union critiqued that the changes did not meet the stated purpose of Clause 15.02. The Employer could have awaited staff attrition to introduce more LPNs onto the unit, to achieve efficiencies and respond to budget pressures.

Alternatively, costs could have been reduced by a new staff rotation and increasing use of casuals to reduce overtime and fill vacancies. (para 63) [ 44 ] In oral presentation, UNA urged the court to examine the plain meaning of the word “necessary” in Clause 15.02, suggesting it was unreasonably applied in both decisions and arguing that work force reduction or position elimination can only arise where such a step is objectively necessary.

Given other options to achieve savings and to change staff mix through attrition, the elimination of RN positions simply was not necessary in either circumstance. [ 45 ] UNA argues that cases which interpreted the words as simply - whether the employer was acting for legitimate reasons in good faith - set the bar or standard of necessary far too low. Other decisions, favoured by the Union, would require actual proof that the layoff was operationally required, and not merely supportable as a cost saving. That higher standard represents the clear intention of the parties from the language chosen.

I will review these two lines of case authority below. [ 46 ] According to UNA, the language of the Collective Agreement clearly recognizes, but restricts management rights. The Union points, in particular, to the significant limits on scheduling, the extensive security as relates to dismissal, lay off and rights of recall, as well as the cornerstone protection of seniority which includes displacement or bumping rights. [ 47 ] UNA argues that since the purpose of setting “necessary” as the threshold for layoffs is the protection of jobs, it is consistent and logical that the

interpretation of the term “necessary” support a higher test or standard. [ 48 ] UNA raises a further concern with the Rockyview Award because it failed to choose between the two standards; instead the majority concluded that by either standard, the Employer’s decision met the language of the Collective Agreement so as to invoke the right to layoff. Having chosen to arbitrate the

interpretation of the clause, UNA seeks a clear answer to the question remitted. The failure to make and apply one

interpretation is relied on in further support of the Court’s authority to quash the Rockyview Award as unreasonable: Boardwalk Reit LLP v Edmonton (City), 2008 ABCA 220 at para 129 , leave to appeal refused [2008] SCCA No 328. [ 49 ] UNA also submits that, to the extent that the decisions under review have diluted the meaning of “necessary” to a measure of good faith for legitimate reasons, such a conclusion renders the language of virtually no residual value. Arbitrators have already concluded that employers must act fairly and in good faith when exercising management rights. A redundant

interpretation fails to apply the plain and ordinary meaning of the words to any real purpose and is itself unreasonable. AHS [ 50 ] The Employer asserts that both Awards are consistent and fall well within the scope of reasonableness in their

interpretation of the language of the Collective Agreement. While the court and the parties do not have a full transcript of the proceedings, the lengthy reasons in both Awards disclose an extensive assessment of the evidence and reasoning of the parties leading up to and in the aftermath of the Employer’s actions. [ 51 ] According to the Employer, the Stollery Award considered whether staff layoffs and eliminations were necessary, not just for 4E3, but for other affected patient care areas.

It reviewed budget imperatives, efficiencies in work assignment, and efforts to improve the sustainability of a staffing mix of RNs and LPNs. Clearly there were bumps in the road during implementation because of a surge of patient numbers and acuity, the need to accommodate staff illness and maternity leaves, as well as increased orientation time. However, work was reassigned to better use the full scopes of practice of RNs and LPNs.

Cost savings were realized as the Employer responded to concern about a future shortage of RNs and the decision was reasonable. [ 52 ] The Rockyview Award presented a circumstance where additional CNE staff time was needed because of a unit expansion. Two options were arguably available: create a second part time position of 0.31 FTE or consolidate the service hours into a single position with a larger FTE. While the existence of a choice may speak against necessity, the Employer emphasized the evidence pointing to a clear concern that a CNE could not function effectively at a 0.31 FTE.

Concerns included very little support, problems keeping up- to-date clinical skills, lack of exposure to new rollout training and limited time for other duties. (para 23) Other evidence pointed to problems with communication, and inefficiencies in reviewing plans that detracted from actually doing the work (para 55). The Award

concluded that these concerns supported the Employer’s position (paras 140-141). [ 53 ] According to the Employer, both decisions also examined and applied the relevant case law using a broadly similar approach. They recognized that Clause 15.02 confers both substantive and procedural rights. At the same time the decisions endorse the Employer’s responsibility and power to organize work and change positions. The Awards also relied on prior decisions to add an interpretive gloss to the context. Those earlier decisions do not apply a detached dictionary definition.

Instead, they reconcile the rights of management with the mandatory protections against unnecessary layoffs. The approach in the Stollery Award and the Rockyview Award is entirely consistent with this long line of arbitration decisions that ought to be respected as part of the Court’s review under a deferential standard of reasonableness. Analysis Are the decisions reasonable? [ 54 ] In addressing the significant issues raised in both the Awards and in the written submissions, the Court also had the benefit of the oral advocacy of very experienced legal counsel.

The sophisticated nature of the bargaining relationship between the parties cannot be overstated, but neither does it detract from the Court’s role in regards to interpreting and applying the terms negotiated in the Collective Agreement. [ 55 ] It is difficult to parse out the evidence which the Stollery Award found most compelling to support the Employer’s reasoning and determination that layoffs were necessary.

At one level, the Union’s assertion that the primary concern was budgetary is founded in the testimony and documentation. [ 56 ] But that does not diminish, much less overwhelm, the importance to the Employer of a different staff mix derived from a concern about future shortage of RNs and making use of the LPN’s full scope of practice. In its extensive review of the evidence, the decision finds the Employer’s reasons to be legitimate and reached in good faith.

As previously quoted the Employer exercised its rights in a “professional, fair and reasonable way” (para 134). [ 57 ] The circumstances in the Rockyview Award were not driven by budget or financial considerations. From my review, the Employer’s conclusion that it needed a higher FTE CNE for this work assignment was founded in the evidence. The Union’s proposal to use two lower FTE nurses was critiqued as being operationally impractical (paras 142-143).

As an analysis of service demands, nothing speaks against this conclusion by management. [ 58 ] However, the real question in this judicial review is not simply whether the results were reasonable but whether the Board’s

interpretation of the term “necessary” was reasonable as reviewed in each Award. The crux of UNA’s argument was that the arbitral jurisprudence has developed two lines of authority – a stringent test and a more subjective test of the employer’s good faith and reasonableness. In my view, the parties are entitled to know whether the decisions fall within the range of supportable outcomes in defining when a layoff is necessary as that term is used in the Collective Agreement. Interpretive approaches to the term “necessary”? [ 59 ] The language of

Article 15 discusses “layoff “ as both workforce reduction and position elimination. Workforce reduction has different consequences than position eliminations, but that distinction is not relevant here and I will refer to both simply as layoffs. [ 60 ] The Court of Appeal in United Nurses of Alberta, Local 121R v Calgary Health Region (Rockyview Hospital) , 2007 ABCA 341 noted that, when interpreting the language of a collective agreement, the purpose is to ascertain the parties’ intentions. The meaning of a word is rarely absolute. The context of the agreement must be considered (para 28).

In that decision the question dealt with the scope of “impossible” within the context of a special leave provision. The Court noted (at paras 29 and 31): An

interpretation of the word "impossible" that renders the entitlement bargained for in the collective agreement to be inapplicable ... is simply not tenable and tending towards the absurd in this context. [ 61 ] Arbitrators interpreting the term “necessary” must therefore consider the context of the entire collective agreement, and in particular Art. 15 in a purposive way. Consensus not required to support layoff [ 62 ] I begin my own assessment by noting that the wording in Art 15 is not confined to management’s opinion or conclusion. Neither does it require Union support or acquiescence.

As the representative of its members, the Union is entitled to provide timely input. The consultation as to possible layoff (cl 15.01(b)) must be meaningful, in the sense that the Employer cannot yet have made an immutable decision. Otherwise the layoff would not just be “possible” but a de facto reality. However, the risk of layoff must be sufficiently developed that the parties can engage in the type of discussion contemplated. So that is a procedural aspect of the language used. [ 63 ] Substantively, the test of what crystalizes the need to discuss layoff carries an objective component.

Not only is that sensible, but the parties have set parameters in clause 15.01 for the purpose of their discussion. Of some note, the parties do not include necessity as part of the factors listed for consultation. Instead the language of cl 15.01(

b) contemplates consideration of purpose, scope or impact, and the mechanics and rollout as well as the complexities of the proposed layoffs. These factors for consultation may be used to objectively inform whether the proposed action is necessary.

The Employer’s purpose or problem [64] In many instances, layoffs, particularly in the health care sector, are going to arise where the employer expresses a need tomake financial cut-backs or adjustments. In Bethany Care Society v. UNA, Loc 91 & 173 (1997), 50 CLAS 156 (Sims), the Arbitratorcommented that the employer need not prove it is insolvent.

That is a truism which references the theoretical outer limit, but leaves openthe line to be drawn as to what is necessary. [65] Part of measuring whether layoff is “necessary” really derives from a valuation of the issue, question, or problem that theEmployer says needs to be addressed. That has not always been identified expressly in prior arbitrations but the evidence in the cases hasdemonstrated that the employers were each working towards a specific goal: • shorter work day and a different

schedule – UNA, Local 24 and St Therese Hospital – St Paul General and Auxiliary Hospitaland Nursing Home District No 36 (Lefsrud. October 1983), AGA, Library file # 83 122G; • budget cutbacks – Redwater-Thorhild County General Hospital District No. 103 and UNA, Local 128 (Power, 1988); DevonGeneral Hospital District #62 and UNA, Local 167 (Beattie, September 17, 1991); Claresholm General Hospital v UNA, Local 40(Ponak, June 18, 1986); Grande Prairie General and Auxiliary Nursing Home, District 14 v UNA, Local 37 (1996) (AB GAA), 57 LAC (4th) 173 (Christian); • general need to reduce costs with a more efficient

schedule – Bethany. [66] Obviously, if the employer cannot articulate a problem, issue, or question that it is attempting to address with layoffs, then it ishighly unlikely that proposed layoffs are objectively necessary. Good faith and reasonableness [67] The next part of the analysis asks whether the proposed solution to the problem meets the requirements of the managementrights clause; that is, within the context of the problem at hand, was the decision reasonable and made in good faith. The Union fairlynotes this standard is already in place under the proper

interpretation of the Management Rights clause. But that does not dilute itsimportance in the context of determining whether a layoff may be necessary. [68] In Redwater, Arbitrator Power held that there was a legitimate need to cut back on staff because of budget reductions andtherefore some layoffs were necessary.

The reasoning did not really explore the scope of the term, but did apply it to the facts aspresented. [69] The decision in Devon also supported the right of the employer to layoff in response to financial issues in various contexts andaccepted that arbitrators should be reluctant to substitute for the opinions of management made reasonably and in good faith.

On thespecific facts, the arbitrator concluded that the extent of the layoffs was too deep and contrary to the collective agreement. [70] In UNA, Local 136 v Barrhead General and Auxiliary Hospital and Nursing Home, District No 67 (1995) 40 CLAS 532(Elliott) the grievor’s position was eliminated and he was returned to a position as a staff nurse. The Desk Charge Nurse duties weredistributed among staff nurses and the Nursing Unit Supervisor. The Union argued that there was no necessity to eliminate the position,since the same duties continued to exist.

The employer responded that it had legitimate reasons to eliminate the position including a needto respond to budgetary constraints and had acted reasonably in doing so. Arbitrator Elliott dismissed the grievances, saying: Although the dictionary definition of “necessary” gives a connotation that something is indispensable or that is required to be or must bedone, in the context of its use in

article 15.01(

a) of the Collective Agreement the word “necessary” means – when the Hospital finds thatsomething, in its judgment, needs to be done. As long as the Hospital’s decision is made in good faith, for legitimate reasons, anArbitration Board has no cause to intervene.

While more responsive to the question of scope than the decision in Redwater, this definition oversimplifies the language that must beapplied to each circumstance. [71] In the Grande Prairie decision, Arbitrator Christian cited and relied on two prior decisions dealing with healthcare layoffs.From the Redwater decision, he concluded that the term “necessary” did not import a high threshold, rather that: “Layoffs are‘necessary’ if they are legitimately required to meet a reduction in a Hospital’s budget” (at para 119).

So too from the Devon case henoted that arbitrators should be reluctant to second guess management but that budget reductions may establish proof of necessityprovided that the cuts are not deeper than required. [72] Bethany follows the same approach as Devon that some level of layoffs can be justified as necessary for financial reasons; butif the affected employees are immediately recalled to different hours or shifts, that does not support a conclusion that layoffs werenecessary. [73] Clearly these cases dealing with the meaning of the word “necessary” based on specific facts do provide some interpretiveassistance.

In overview, arbitrators have declined to apply an absolute or dictionary definition; instead they have examined the need forlayoff in context. In my view, this approach is fundamental to the balancing of respective rights and responsibilities. Finances are an

important reality, along with the need to address efficient service delivery, technology, and other changes in the workplace. However, the protections for employees in the context of layoff extend beyond simply good faith and reasonableness. [ 74 ] Close reading of the cases relied on by the parties does not , in my view, disclose two lines of cases as argued by the Union. Rather, in assessing reasonableness the arbitrators, sometime expressly and sometimes inferentially, have looked at the evidence within the context of the entire collective agreement to determine whether a decision was reasonable because the layoffs: (

a) Were a legitimate attempt to address the problem; (

b) Did not circumvent other provisions of the collective agreement; (

c) Represented a proportional response to the problem being addressed; (

d) Provided a practical solution to the problem. Often the evidence will overlap the way in which these criteria are addressed but they each assist in analyzing circumstances in proper context. Legitimate [ 75 ] While some arbitration decisions have not been models of clarity, the underlying premise is that the employer’s layoffs must fairly reflect actual and legitimate intent.

The response to financial concerns, as long as it arises in a legitimate context, will be reasonable. [ 76 ] In Redwater and Grande Prairie , the arbitrators did not just rubber stamp layoffs as reasonable; they looked to the legitimacy of response to budgetary concerns arising from government cutbacks. In Bethany , the initial layoffs were legitimate but the excess layoffs were found to be contrary to the intent of the collective agreement. Consistent with other terms of the collective agreement [ 77 ] The other provisions in the Collective Agreement must be respected.

Bethany noted that the management rights clause gives the employer the right to make a number of decisions, but that the employer had also agreed to certain protections for employees and could not use the guise of 4.01 (

c) to avoid or work around its other obligations, such as access to bumping rights, in order to set up a new schedule. [ 78 ] In Extendicare Health Services v UNA, Local 168 (Ponak, January 7, 1992) the employer tried to change the hours of work through lay-offs, eliminating 10 part-time nursing positions and creating four full-time positions along with six part-time positions.

Arbitrator Ponak upheld the Union’s grievance, noting that the management rights clause was subject to the other provisions of the collective agreement, and that the employer was trying to accomplish through lay-offs what it could not accomplish otherwise – “a different set of hours and a different number of shifts for its current staff”. It noted that while the employer’s actions were “well motivated”, their purpose was “to circumvent” the restrictions in the collective agreement.

Based on the evidence before it, the Board noted that the work and work arrangements remained essentially the same; accordingly there was not a “real” elimination of work and creation of new positions as contemplated by the wording of the collective agreement. Proportional [ 79 ] Proportionality is also an element to be considered in measuring necessity. As demonstrated in Bethany and the cases it cited, laying off numerous employees to reach a reduction of only a few employees is not proportional.

In St Therese Hospital the employer laid off all full time nurses, declaring their full time positions redundant, and offering them “new” part time jobs with shorter shifts. Arbitrator Lefsrud held that since the employer continued to operate the hospital 24 hours a day, seven days a week, it was not actually necessary to lay off all the nurses. [ 80 ] Proportionality is part of the consideration of reasonableness in the context of financial constraints.

In Devon the employer reorganized its staff from two full-time positions and fourteen part-time positions to four full-time positions and eight part-time positions in order to achieve some cost savings, but implemented layoffs that affected all the nurses disproportionate to the employer’s needs. Arbitrator Beattie concluded that, while the need to cut costs established necessity, the employer had over-reached. The mass layoffs and position eliminations were simply disproportionate to the net reduction of a .59 FTE.

Practical [ 81 ] The measure of practicality is not an invitation to second guess or substitute for the opinion of the employer. But if the evidence clearly shows that a more practical solution than layoffs is available to deal with the problem identified, that fact can also assist in measuring whether layoffs are necessary. [ 82 ] Practicality was a factor considered in Barrhead . The evidence indicated that the same duties could be distributed among the staff nurses because the Nursing Unit Supervisor’s duties had changed.

Non-Healthcare Cases [ 83 ] Practicality also arises in the context of contracting out services which arguably imposes even harsher impacts on the rights of the bargaining unit than layoffs. International Brotherhood of Boilermakers, Local 146 v Exchanger industries (Contracting out Grievance) , [2014] AGAA No 19, 245 LAC (4 th ) 41 (Kanee) , addressed the meaning of necessary within the context of a collective

agreement that permitted contracting out only if necessary. Arbitrator Kanee held that, unless it is was objectively impractical orunreasonable to continue operations without contracting out, the employer could not contract out its work. Similarly in NorthwesTel Inc and IBEW., Loc 1574, (CA LA), 55 LAC (4th) 57 (Kelleher) Arbitrator Kelleher stated that the term “necessary”connotes an element of reasonableness and practicality (para 80). [84] However, to the extent that cases such as Exchanger purport to adopt a straight dictionary definition, I find the approachhighly distinguishable.

Provisions that limit or prohibit contracting out, for example, arise from a different negotiating premise –typically where an employer has agreed not to contract out even for the purpose of reducing production costs. Unions almost invariablygive up substantial demands in exchange for such an agreement in the private sector. In Exchanger, the prohibition contemplatedextremely narrow exceptions. Contracting out does not typically trigger the sorts of protections as have been negotiated for layoffs ofRN’s in Alberta. The criteria needed to support total loss of bargaining unit work may be much more stringent.

That is not the issuebefore this court. Labour Jurisprudence [85] Here the jurisprudence in healthcare has built on a significant bargaining history and the courts have accorded respect to thatrelationship. Counsel were invited to address case law as to the effect of prior labour decisions. [86] While strictly speaking the doctrine of stare decisis does not apply in the arbitration context, prior awards may be persuasive.When assessing the persuasive value of prior decisions, arbitrators will accord greater weight to a decision rendered under the sameagreement that involved similar issues and the same parties.

The prevailing view was articulated by Professor Laskin in Brewer’sWarehousing Co (1954), 5 L.A.C 1797 at 1798: It is not good policy for one Board of Arbitration to refuse to follow the award of another Board in a similar dispute between the sameparties arising out of the same Agreement where the dispute involves the

interpretation of the Agreement. Nonetheless, if the secondBoard has the clear conviction that the first award is wrong, it is its duty to determine the case before it on principles that it believes areapplicable. [87] As the cases referenced in the Standard of Review portion of these Reasons state, arbitration boards are subject to thereasonableness standard, and there may be more than one reasonable

interpretation of a collective agreement provision.

The Court’s roleon judicial review is not to ensure that the decisions of tribunals are consistent “provided the decisions themselves remained within thecore jurisdiction of the administrative tribunals and within the bounds of rationality.” Ellis-Don Ltd. v Ontario (Labour RelationsBoard), 2001 SCC 4 at para 28. [88] In Irving Pulp and Paper Ltd v LEP, Local 30, 2013 SCC 34, [2013] 2 SCR 458 Justice Abella, writing for the majority,expressed that while arbitral jurisprudence does not bind a court, jurisprudential consensus provides “a valuable benchmark againstwhich to assess the arbitration board’s decision” (para 6).

On this point, the minority of Justices Rothstein and Moldaver agreed andthen elaborated, stating that evaluating the reasonableness of a decision cannot be conducted in the abstract. It must consider variousfactual and contextual factors, including arbitral jurisprudence (para 75). The majority and the minority agreed that arbitraljurisprudence sets the parameters of a board’s decision and informs whether a decision was reasonable. Therefore, while a court is notbound by arbitral consensus, so too it cannot ignore these prior decisions.

For a court to disregard the existing arbitral jurisprudence andimpose its own solution risks making a reversible error (para 16). [89] In the context of healthcare, arbitral jurisprudence has generally supported layoffs that are made in good faith for legitimatereasons. Differing outcomes have arisen upon careful examination of the legitimacy of the action taken in response to the operationalconcerns identified and the language of the collective agreement. The outcomes from both Awards under review are consistent with thisapproach.

The results are reasonable even though the language in each decision does not necessarily reflect a single, harmoniousinterpretation of the term “necessary”. It is not mandatory to select and apply one definition and the Rockyview Award committed noerror by its conclusion that the circumstances met more than one definition.

Summary [90] From my review, the cases in healthcare do not reflect incongruent approaches to the

interpretation of the term “necessity” inthe context of layoffs. Although isolated excerpts from some decisions appear to apply a test of good faith and reasonableness, theoutcomes demonstrate that the exercise of management rights must address a problem, issue or goal. The layoffs must be legitimate andmust not conflict with other provisions in the collective agreement. The more controversial scenarios have also considered theproportionality and practicality of the layoffs in relation to the problem they are addressing.

For both Awards under review here I find the problem or issue to have been fairly identified by management and that the proposedlayoffs were proposed and implemented reasonably and in good faith. The Stollery Award upheld the layoffs on various grounds,including financial issues, which support their legitimacy. The Rockyview Award dealt atypically with a non-financial situation, butagain it was important to examine the legitimacy of the concern that a larger FTE position was necessary.

Both proposals wereimplemented in a manner consistent with the Collective Agreement. [91] Proportionality and practicality are also demonstrated by the facts of both Awards. In the Rockyview Award, the evidencewas that it was impractical to create a position less than the .84 FTE. Nothing more was proposed or required. In the Stollery Award theevidence demonstrated a practical concern that the employer wanted to use the full scope of practice of LPNs and it wanted to prepare foran expected shortage of RNs.

The layoffs were directly proportional to the extent of the problem identified. [92] Taken collectively these considerations speak to necessity.

Disposition [ 93 ] Overall I find the decisions in both the Stollery Award and the Rockyview Award do reasonably support the conclusions reached. While not structured as the court has approached the question for

interpretation, the reasoning is entirely justifiable, intelligible and transparent. [ 94 ] Accordingly the application for judicial review is dismissed. Heard on the 21 st day of October, 2016. Dated at the City of Edmonton, Alberta this 13 th day of January, 2017. S.D. Hillier J.C.Q.B.A. Appearances: Ritu Khullar Q.C. Chivers Carpenter Counsel for the Applicant Craig Neuman, Q.C. Neuman Thompson Counsel for the Respondent Appendix A Stollery Agreed Statement of Facts 1.-3. ... 4.

The Employer is the provincial health authority responsible for overseeing the planning and delivery of public health services to Albertans. It operates acute care hospitals, urgent care centres, cancer treatment centres, psychiatric care facilities, addiction treatment centres, continuing care facilities, ambulance services and community and public health programs across the province, employing more than 95,000 employees. 5. The Employer operates the Stollery Children's Hospital, located within the University of Alberta Hospital site in Edmonton.

The Stollery is a nationally recognized centre for pediatric cardiac surgery and a national leader in organ transplantation. The Stollery provides inpatient and ambulatory health care services for children from northern and central Alberta, as well as for children from the north and other parts of Western Canada. 6. - 9. ... 10. The Employer made changes to staffing in certain patient care areas at the Stollery Children's Hospital in the spring of 2013, which affected registered nurses, licensed practical nurses and health care aides.

These staffing changes were announced to the Union and the affected staff in March 2013. 11. The patient care areas affected by the staffing changes were: - a pediatric cardiology clinic, unit 4CI;

- a pediatric oncology and hematology inpatient unit 4E3; - a pediatric medicine inpatient unit 4E4; and, - a pediatric surgery clinic, located in the Clinical Services Building on the University of Alberta Hospital site. 12. The Staffing changes that were implemented in these patient care areas at the Stollery Children's Hospital in the spring of 2013 resulted in notices of layoff or position elimination being given to a total of 12 registered nurses, who occupied positions adding up to the equivalent of 9.4 full-time ("FTE") positions (Exhibit 5). 13.

These staffing changes also resulted in the elimination of two health care aide positions, adding up to the equivalent of 1.0 FTE. 14. These staffing changes also involved adding a total of 10 full-time licensed practical nurse positions. 15. In the pediatric oncology and hematology program at the Stollery Children's Hospital there is an ambulatory clinic and day ward unit 4E2, in addition to the inpatient unit 4E3.The regular operating hours of unit 4E2 are Monday through Friday, 7:30 am to 4:30 pm. 16.

Hours of operation and staffing on unit 4E2 were not altered as part of the staffing changes that occurred in the spring of 2013. The staffing complement on this unit was, and remains: - 3 clinical research associates (3.0 FTE); - 4 clerical staff (3.8 FTE); - 3 psychologists (2.6 FTE); - 3 registered nurses assigned to the day ward (2.3 FTE); - 5 registered nurses assigned to the clinic (5.0 FTE); and, - 3 nurse practitioners assigned to both unit 4E2 and the inpatient unit 4E3 (3.0 FTE). 17. The pediatric oncology and hematology inpatient unit 4E3 operates on a continuous basis.

The staffing complement on this unit prior to the staffing changes that occurred in the spring of 2013 was: - 2 unit clerks (2.0 FTE); - 29 registered nurses {24.1 FTE); - 1 licensed practical nurse (1.0 FTE), hired in January, 2013; and - 3 health care aides (2.0 FTE). 18. The staffing complement on unit 4E3 after the staffing changes that were announced in the spring of 2013 is: - 2 unit clerks (2.0 FTE); - 25 registered nurses (20.5 FTE); - 4 licensed practical nurses (4.0 FTE); and - 1 health care aide (1.0 FTE). 19.

The same patient care services that were offered in the patient care areas at the Stollery Children's Hospital that were impacted by the staffing changes that occurred in the spring of 2013, have continued to be offered since that time. 20. The parties ask the arbitration tribunal to decide initially whether or not to grant the grievance (in whole or in part), and to retain jurisdiction to address any remedial matters that may arise from its award. 21. The parties reserve the right to tender additional evidence at the arbitration hearing. Appendix B Rockyview Agreed Statement of Facts 1.-3. 4.

AHS employs clinical nurse educators (CNEs) or instructors at the Rockyview General Hospital who are responsible for assessing, developing, delivering and evaluating education for nursing staff caring for patients. CNEs act as resource experts and

consultants. The CNE position is within scope and is classified as an assistant head nurse under the Collection Agreement. Usually a CNE remains assigned to a particular unit so that the CNE can develop an expertise in the particular area. CNEs are not assigned responsibility for patient beds. 5. In the spring of 2013, there were 9 CNEs working in assignments related to general medicine units at the Rockyview General Hospital with varying FTEs (there was 1 - 1.0 FTE, 5 - 0.84 FTE and 1 - 0.50 FTE). 6. One of the CNEs employed at the Rockyview General Hospital, Lindsay Alain, had a 0.84 FTE in 2013.

When she was on maternity leave, her position was filled with a temporary 0.84 FTE. Upon Ms. Alain's return from maternity leave in October 2013, the Employer had agreed to reduce her FTE to 0.53. In exchange, Eleanor Robson, also a CNE, increased her FTE to 0.84 from 0.53 when Ms. Alain returned from maternity leave. Ms. Robson had requested to increase her FTE to 1.0 but accepted the 0.84 FTE. The total FTEs for the CNEs remained the same in the summer of 2013 after the aforementioned adjustment. 7.

In the summer of 2013, unit 72 at Rockyview General Hospital was a 32 bed inpatient medicine unit with some beds focused on neurology. With the opening of the South Health Campus, six of the beds from unit 72, focusing on neurology, were transferred to the South Health Campus leaving unit 72 with 26 beds. Prior to the reduction, the CNE assigned to unit 72, Afia Wilson, had a 0.84 FTE. After the reduction, the CNE assigned to unit 72, Genie Morisseau, had 0.50 FTE. 8.

In 2013, even though there was a reduction of six beds at unit 72 of the Rockyview General Hospital, there was no overall reduction in the CNEs FTE hours. Rather the CNEs were reassigned around the hospital. 9. In October 2014, the number of beds on unit 72 was increased again from 26 to 32 beds. As a result, the Employer decided to have a CNE assigned to the unit with an increased FTE of 0.84. Prior to implementing this in​ crease in bed capacity, the Employer canvassed the CNE assigned to unit 72 who was working in a 0.50 FTE position, but she declined the opportunity to work in a 0.84 FTE position.

The Employer then canvassed all of the other CNEs working less than 1.0 FTE assignments in the general medicine group at the Rockyview Hospital, but they also declined the opportunity to work in a higher FTE position. 10. In a July 14, 2014 meeting between the Employer and the Union, the Employer advised the Union that unit 72 would be increasing its beds by six beds back up to 32 beds and that, as a result, the Employer wanted to have a 0.84 FTE CNE assigned to the unit, and an overall increased FTE of 0.34 amongst the medicine group of CNEs.

During the July 14, 2014 meeting, the Employer advised that it had canvassed all of the CNEs and nobody wanted to increase their FTE. Therefore, the Employer decided to eliminate a 0.53 position and post a vacancy for a 0.84 FTE position. During the July 14, 2014 meeting, the Union objected to the Employer's proposed course of conduct. Rather, the Union suggested that the Employer post a 0.34 position or a 0.42 position (which is the minimum FTE to obtain benefits).At that time, the Employer rejected that suggestion, citing concerns for continuity of care and patient safety issues. 11.

On August 26, 2014, the Employer provided Ms. Alain written notice that it was eliminating her position. She subsequently went through the layoff procedures under the Collective Agreement and was placed in an acceptable position at the South Health Campus as of October 20, 2014. This Grievance does not raise any issues about the layoff procedure as it was applied to Ms. Alain. 12. On or about August 30, 2014, the Employer issued a posting for a regular part-time 0.84 FTE instructor at the Rockyview General Hospital. 13.

As a result of the job posting, the Employer hired Catherine O-Meara as a CNE with a 0.84 FTE, and she is currently assigned to unit 72. ...