Klein v. Construction & Specialized Workers Union Date:, 2013 BCPC 49

Citation: Klein v. Construction & Specialized Workers Union Date: 20130306 2013 BCPC 0049 File No: 10-31424 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: TERRENCE RICHARD KLEIN CLAIMANT AND: CONSTRUCTION AND SPECIALIZED WORKERS’ UNION, LOCAL 1611 DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE J. O'C. WINGHAM Appearing on their own behalf: Terrence Richard Klein Counsel for the Defendant: K. Blakely Place of Hearing: Vancouver , B.C. Dates of Hearing: November 27 & 28, 2012

Date of Judgment: March 6, 2013 INTRODUCTION [ 1 ] This is a ruling on the issue, raised by the Defendant Union, as to whether this Court has jurisdiction to hear the Claimant’s claim. The Defendant argues that this Court does not have jurisdiction. Counsel for the Defendant says that the facts behind the Claimant’s claim arise wholly out of a collective agreement and out of the Claimant’s employment under that agreement.

He says that, as such, the issues raised by the Claimant fall under the exclusive jurisdiction of the Labour Relations Board. [ 2 ] The Claimant says that the Union was in a fiduciary relationship with him and that it breached its fiduciary duty to him and he seeks damages for breach of that duty. BACKGROUND [ 3 ] The following facts are presumed for the purpose of this application: 1. The Defendant is a trade union. 2. In the early 1980s, when the facts upon which his claim is based arose, the Claimant was a member of the Defendant trade union. 3.

In or about 1983 the Claimant was terminated from his employment. 4. The Claimant grieved the termination through the union. His grievance was heard by an industry grievance panel constituted under clause 15.07 of the collective agreement. 5. The industry grievance panel ordered that the Claimant’s employment be reinstated and that he be compensated for six weeks lost wages with the union being responsible for one half of that. The grievance panel reasoned that the union should have mitigated the lost wages by dispatching the Claimant to another job earlier. 6.

The Claimant subsequently spoke to the union representative, Mr. Charlie Robertson. Mr. Robertson told the Claimant that the union had made a mistake and that he should have dispatched him three months earlier to another job. Mr. Robertson told the Claimant that the union would pay him for those three months. 7. The Claimant said that he would not ask for that and he never brought the subject up again with the union. [ 4 ] While those facts may not be accepted by the Defendant at any trial of this case they are agreed to by the Defendant for the purpose of the jurisdictional argument.

POSITIONS OF THE PARTIES [ 5 ] Counsel for the Defendant union says that the entire dispute in this case arises because the Claimant was a member of the union. He says that part of the Claimant’s claim arises from the industry grievance process and the second part of his claim arises out of the business agent’s agreement that there were additional monies owing to the Claimant because he had not been dispatched as early as he should have been.

The Defendant says that all of this arises from the event of the Claimant’s termination from his employment and, as such, the essential character of the dispute arises under the collective agreement relationship and, as such falls, within the exclusive jurisdiction of the Labour Relations Board pursuant to the provisions of the Labour Relations Code. [ 6 ] The Claimant says that the amounts in question are a property right of his. He says that the union became a trustee of those funds and that the Claimant was a trust beneficiary. He says that the business agent, Mr.

Robertson, had an “ad hoc” fiduciary duty to him as a result of his assuming discretion over the amounts which the union admitted that it should compensate the Claimant for. The Claimant says that the acceptance by the union representative of his “waiver” of the funds that the union it agreed were owing to him was a violation of his duties to the Claimant in contract and tort. LAW Legislative Framework [ 7 ] A trade union has a duty of fair representation to its members.

Section 12 of the Labour Relations Code (the “Code”) provides: a. Duty of fair representation 12

(1) A trade union or council of trade unions must not act in a manner that is arbitrary, discriminatory or in bad faith (

a) in representing any of the employees in an appropriate bargaining unit, or (

b) in the referral of persons to employment

(

c) whether or not the employees or persons are members of the trade union or a constituent union of the council of trade unions. (d)

(2) It is not a violation of subsection (1) for a trade union to enter into an agreement under which (

a) an employer is permitted to hire by name certain trade union members, (

b) a hiring preference is provided to trade union members resident in a particular geographic area, or (

c) an employer is permitted to hire by name persons to be engaged to perform supervisory duties. (e)

(3) An employers' organization must not act in a manner that is arbitrary, discriminatory or in bad faith in representing any of the employers in the group appropriate for collective bargaining. [ 8 ] A complaint that a union has contravened its duty of fair representation under

section 12 of the Labour Relations Code falls under the jurisdiction of the Labour Relations Board (sections 13 and 14, Labour Relations Code).

Section 133 of the Labour Relations Code provides that where the Labour Relations Board is satisfied that any person has contravened the Code, a collective agreement or the regulations the Board may make orders as set out in that section.

Section 136 of the Code provides that except as provided in the Code the Board has and must exercise exclusive jurisdiction to hear and determine an application or complaint under the Code and to make an order permitted to be made under the Code. Further, sections 137 and 138 of the Labour Relations Code provide: Jurisdiction of court 137

(1) Except as provided in this section, a court does not have and must not exercise any jurisdiction in respect of a matter that is, or may be, the subject of a complaint under

section 133 or a matter referred to in

section 136, and, without limitation, a court must not make an order enjoining or prohibiting

an act or thing in respect of them.

(2) This Code must not be construed to restrict or limit the jurisdiction of a court, or to deprive a court of jurisdiction to entertain a proceeding and make an order the court may make in the proper exercise of its jurisdiction if a wrongful act or omission in respect of which a proceeding is commenced causes immediate danger of serious injury to an individual or causes actual obstruction or physical damage to property.

(3) Despite this Code or any other Act, a court must not, on an application made without notice to any other person, order an injunction to restrain a person from striking, locking out or picketing, or from doing

an act or thing in respect of a strike, lockout, dispute or difference arising from or relating to a collective agreement.

(4) A court of competent jurisdiction may award damages for injury or losses suffered as a consequence of conduct contravening

Part 5 if the board has first determined that there has been a contravention of

Part 5. Finality of decisions and orders 138 A decision or order of the board under this Code or a collective agreement on a matter in respect of which the board has jurisdiction is final and conclusive and is not open to question or review in a court on any grounds. [ 9 ]

Section 84 of the Labour Relations Code provides that every collective agreement must contain a provision which governs dismissal or discipline of the employee which is bound by the collective agreement. In particular, section 84 (2) provides:

(2) Every collective agreement must contain a provision for final and conclusive settlement without stoppage of work, by arbitration or another method agreed to by the parties, of all disputes between the persons bound by the agreement respecting its

interpretation, application, operation or alleged violation, including a question as to whether a matter is arbitrable. [ 10 ] The collective agreement to which the Claimant and the Defendant were parties complied with

section 84 of the Labour Relations Code. Clause 15.07 established an industry grievance panel to deal with any grievances which were not resolved within seven days of submission. Clause 15.12 provided that the decision of the grievance panel would be final and binding on the parties to the grievance. [ 11 ]

Section 89 of the Labour Relations Code provides that an arbitration board, for the purposes set out in

section 82 has the authority necessary to provide a final and conclusive settlement of a dispute arising under a collective agreement including ordering an employer to reinstate an employee dismissed in contravention of the collective agreement and making an order setting the monetary value of an injury or loss suffered as a result of a contravention of a collective agreement.

Section 95 of the Code provides that the decision of an arbitration board is binding on the parties and

section 101 provides that except as provided in that part of the Code the decision or award of an arbitration board is final and conclusive and is not open to question or review in a court on any grounds whatsoever. Case Law

[12] In Bakaluk v. Western Star Trucks [2004] B.C.J. No. 658 (BCSC) the court considered a case where employees sued theDefendant company and union for damages under what was called a share gifting program. Some employees had not received notice oftheir right to receive free shares, some had accepted free shares but not received them and some received notice of their right to receivefree shares but did not apply for them. Others were advised by shop stewards not to apply for shares even though the shop stewards wereapplying for them themselves.

The claim by the employees was framed in breach of contract and negligence. [13] The court held that the essential character of the dispute was that it was inextricably linked to the employment relationship. Itfound that the share gifting program was a form of compensation. The court determined that the essential character of the Plaintiff’sclaims in that case was for a breach of the union’s duty of fair representation. [14] In Bakaluk the court referred to the decision of the British Columbia Supreme Court in Daniels v. British ColumbiaGovernment Employees’ Union [1995] B.C.J. No. 2777 (BCSC).

In that case the plaintiff had sued the union for negligence andnegligent misrepresentation. The plaintiff had been charged with a criminal offense and had been suspended from his employmentwithout pay. He was acquitted at trial and the union entered into negotiations with the employer for compensation for the plaintiff. Anoffer of settlement was made by the employer but the offer lapsed without having been presented to the plaintiff by the Union.

Saunders, J. concluded, at paragraphs [11] and [14]: [11] I agree that this court is without jurisdiction to hear this action; the legislature has defined the duty owed by a trade union to itsmembers and has assigned disputes over performance of this duty to the Labour Relations Board of British Columbia. Although thisaction is framed as one based upon negotiations outside of the grievance process, the negotiations concerned compensation to Mr.Daniels and the terms of his severance. These are issues that arose only because he was or had been employed by the provincialgovernment.

In that employment relationship, including his termination and any entitlements arising from it, he was represented by theUnion. The Union, in turn, was required to meet the standards set out in s.12 of the Code. [14] In my view the essential character of the dispute does arise under the Labour Relations Code. The underlying dispute betweenemployee and employer was within the Union’s proper realm of representation under the legislative scheme; the issues the Union wasdiscussing with Mr. Daniels’ employer were not issues upon which Mr.

Daniels could have sued his employer…Adjudication upon theperformance of the Union’s duties is assigned exclusively to the Labour Relations Board under s. 139. [15] In Ancheta v. Joe, 2003 BCSC 93 , [2003] B.C.J. No. 112 (BCSC) the plaintiff sued his former employer, his formerunion, its president and various co-workers. He alleged such things as malicious prosecution, defamation, false imprisonment,conspiracy and breach of a fiduciary duty. He also claimed breach of trust against the union. Sigurdson, J. referred to the decision of theBritish Columbia Court of Appeal in Haight-Smith v.

Neden (2002), 98 B.C.L.R. (leave to appeal to the S.C.C. denied [2002] S.C.C.A.No. 176). At paragraphs 28 – 30 of that decision Levine J.A. said: 28 The Supreme Court of Canada in Weber v. Ontario Hydro, (SCC), [1995] 2 S.C.R. 929, decided that if the“essential character” of a dispute arises from the

interpretation, application, administration or violation of the collective agreement, thenthe dispute must be dealt with by the dispute resolution process provided in the collective agreement and labour relations statutes and notby litigation in the courts. The “exclusive jurisdiction” approach to labour disputes was affirmed in Regina Police Assn. Inc. v.

Regina(City) Board of Police Commissioners, 2000 SCC 14 , [2000] 1 S.C.R. 360. 29 In both of these cases, the Supreme Court made it clear that to determine whether a dispute arises out of a collective agreement, twoelements must be considered: the nature of the dispute and the ambit of the collective agreement (Weber at para. 51; Regina Police atpara. 25). The legal characterization of the dispute (as a claim in tort, for example) is not determinative of jurisdiction.

If the dispute arises underthe collective agreement, the jurisdiction to resolve it lies exclusively with the labour tribunal and the courts cannot try it (Weber at para.43). 30 The courts retain jurisdiction, however, over disputes which do not expressly or inferentially arise out of the collective agreement(Weber at para. 54) and where a remedy is required that an arbitrator is not empowered to grant, in order to avoid a “real deprivation ofultimate remedy” (Weber at para. 57, citing Estey J. in St. Anne-Nackawic Pulp & Paper Co. v.

C.P.U., Local 219, (SCC), [1986] 1 S.C.R. 704 at p. 723). [16] In Ancheta, supra, Sigurdson J. stated, at paragraph 61, that “it is the nature of the dispute and its essential character that iscritical, not the manner in which it may be described in the particular language of the statement of claim”. In that case Sigurdson, J.concluded that the essential character of the plaintiff's claims amounted to an allegation that the union and its president had breached theduty of fair representation which they owed to the plaintiff pursuant to

section 12 of the Labour Relations Code. [17] In Paller v. Great-West Life Assurance Co. 2003 BCSC 582 , [2003] B.C.J. No. 851 (B.C.S.C.) the plaintiff was amember of a health employees union and was entitled under the terms of the collective agreement to long-term disability benefits. Thehealth employers were appointed as the trustee administrator of the benefit plan. The plan provided for an appealable dispute resolutionprocedure. The health employers terminated the plaintiff's disability benefits. She sued the trustees for breach of contract, breach oftrust and breach of fiduciary duty.

She argued that the termination of her disability benefits was a contractual and trust issue and not anemployer or employee issue because the trustee was a separate entity than the employer. The court determined that the dispute was alabour dispute and that the plaintiff’s remedies were defined by the collective agreement and the Labour Relations Code. It classified theessential character of the plaintiff's claim as a reinstatement of her disability benefits arising out of her employment.

The court notedthat the claims review committee which was set up by the collective agreement was an arbitration board under the Labour RelationsCode. At paragraph 77 of the decision Neilson, J. stated “the clear and legislative intent of these provisions of the code is that the finaldecision reached through this process be conclusive, and not open to further review in the courts solely because an employee is unhappy

with the result obtained”. [18] The court in Paller quoted from the decision of the Alberta Court of Appeal in Young Estate v. Transalta Utilities Corp., 1997ABCA 349 , [1997] A.J. No. 1114 (C.A.) at paragraph 41: The court’s residual jurisdiction cannot be used to relieve an employee from the consequences of failing to pursue a remedy availableunder the collective agreement.

That would be directly contrary to the established policy of judicial deference, and would seriouslyundermine the value and integrity of the grievance and arbitration procedure thereby compromising one of the fundamental purposes ofthe collective-bargaining scheme, namely, the prompt and peaceful settlement of disputes arising under collective agreements. [19] Mr. Klein made oral submissions and submitted written argument.

His submissions were long and were often disconnected andlaced with quasi-legal concepts. [20] After distilling his argument it appears that what he is arguing is that the Defendant Union breached a fiduciary duty which hesays that it owed to him. He argued that the money which was found to be owing to him by the grievance panel and the money that hesays that the Union Representative agreed was owing to him because he had not been dispatched to another job earlier was a propertyright.

He submitted that the Union representative allowed him to waive his right to that money and that in doing so he breached hisfiduciary duty to him. [21] What the authorities make clear is that it is the essential character of the dispute which is important, not how the Claimantchooses to frame or plead it. If the dispute arises under or out of the collective agreement the jurisdiction to hear and determine thedispute lies with the Labour Relations Board. Analysis [22] Almost 30 years ago Mr. Klein was terminated from his employment.

Pursuant to the collective agreement he invoked thegrievance procedure and an industry grievance panel, constituted under clause 15.07 of the collective agreement, ordered that he bereinstated and determined that the union was responsible for one half of his lost wages as he had been unemployed longer than he shouldhave been because the union had not mitigated his loss by dispatching him to another job sooner. When Mr. Klein spoke to the unionrepresentative, Mr.

Robertson, the union representative acknowledged that he should have been dispatched earlier and agreed that theunion should compensate him for that lost work time. Mr. Klein’s response was “I wouldn’t ask for that”. He never brought it up again. [23] If Mr. Klein was unhappy with the result of that conversation he easily could have spoken to the union representative and toldhim that he wanted to be paid for that time.

Had the union representative said to him that he had waived that right he could have broughta complaint to the Labour Relations Board that the union had breached its duty of fair representation by not dispatching him when itshould have and that as a result he had suffered a loss in wages. He did not do so. [24] The union owed the Claimant a duty of fair representation as provided for in

section 12 of the Code. Even if the Claimant iscorrect that he waived the money which was owing to him and that the union should not have accepted that waiver his claim against theDefendant union still falls under the duty of fair representation which the union owed to him. The Claimant’s remedy lies under theLabour Relations Code, particularly under

section 14, which vests the Board with the jurisdiction and the power to make orders requiringthe Union to rectify any act where it finds that it has breached its duties under

section 12 of the Code. [25] The claim advanced by the Claimant in this proceeding clearly arises out of his employment and his membership in theDefendant union. His claim is for money that he says he was owed because he was wrongfully terminated from his employment andbecause he was not dispatched in a timely fashion to another job by the Defendant Union after he was terminated. After he wasterminated the Defendant Union filed a grievance on his behalf and that grievance went to an industry grievance panel under Clause15.07 of the collective agreement.

That panel determined that the Claimant was entitled to lost wages as he was improperly terminatedfrom his employment and it assigned partial responsibility for those lost wages to the Defendant union because the union failed todispatch the Claimant to another job in a timely fashion. [26] The essential character of the Claimant’s claim is a claim for lost wages, not for damages for breach of trust or breach offiduciary duty.

His claim arises out of the operation of the collective agreement (i.e. the termination, the subsequent grievance paneldecision and the acknowledgment of the union that it should have dispatched him earlier). Consequently, the Claimant’s remedies fallunder the collective agreement and the Labour Relations Code. As such, I conclude that this court has no jurisdiction to consider hisclaim. [27] The Claimant’s claim is dismissed. _________________________________ The Honourable Judge J. O’C. Wingham Provincial Court of British Columbia