2013 NBCA 53, 2013 NBCA 53

COURT OF APPEAL OF NEW BRUNSWICK COUR D’APPEL DU NOUVEAU-BRUNSWICK 116-12-CA CITY OF DIEPPE (Respondent) APPELLANT VILLE DE DIEPPE (Intimé

e) APPELANTE - and - - et - CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 4679 and JEAN-EUDES MORIN (Applicants) RESPONDENTS SYNDICAT CANADIEN DE LA FONCTION PUBLIQUE,

SECTION LOCALE 4679 et JEAN-EUDES MORIN (Requérants) INTIMÉS Dieppe v. Canadian Union of Public Employees, Local 4679 and Morin, 2013 NBCA 53 Dieppe c. Syndicat canadien de la fonction publique,

section locale 4679 et Morin, 2013 NBCA 53 CORAM: The Honourable Justice Deschênes The Honourable Justice Richard The Honourable Justice Bell CORAM : L’honorable juge Deschênes L’honorable juge Richard L’honorable juge Bell Appeal from a decision of the Court of Queen’s Bench: August 9, 2012 Appel d’une décision de la Cour du Banc de la Reine : Le 9 août 2012 History of case: Decision under appeal: Unreported Preliminary or incidental proceedings: N/A Historique de la cause : Décision frappée d’appel : Inédite Procédures préliminaires ou accessoires : S.O. Appeal heard: May 16, 2013 Appel entendu : Le 16 mai 2013 Judgment rendered: September 5, 2013 Jugement rendu : Le 5 septembre 2013

Reasons for judgment by: The Honourable Justice Bell Motifs de jugement : L’honorable juge Bell Concurred in by: The Honourable Justice Deschênes The Honourable Justice Richard Souscrivent aux motifs : L’honorable juge Deschênes L’honorable juge Richard Counsel at hearing: For the appellant: G. Robert Basque, Q.C. For the respondents: Glen S. Gallant Avocats à l’audience : Pour l’appelante : G. Robert Basque, c.r. Pour les intimés : Glen S. Gallant THE COURT The appeal is allowed with costs of $2,500. LA COUR L’appel est accueilli avec dépens de 2 500$.

English version of the decision of the Court delivered by BELL, J.A. I. Introduction [ 1 ] On April 11, 2007, the City of Dieppe (the City) and the Canadian Union of Public Employees, Local 4679 (the Union), signed a collective agreement that was still in force on March 28, 2011. Jean-Eudes Morin was a member of the bargaining unit represented by the Union. On March 28, 2011, he held the position of Inspector I (junior inspector) with the City’s Planning and Development Department. [ 2 ] The New Brunswick Building Officials Association sets out the requirements for individuals designated as building inspectors.

There are three levels. Inspectors are generally referred to as junior (Level I), intermediate (Level II) or senior (Level III). Junior inspectors may only inspect single unit dwellings having less than three storeys. Senior inspectors inspect all types of buildings including industrial and commercial buildings, multi unit dwellings as well as single unit dwellings.

The work carried out by intermediate inspectors was not relevant to the debate before the arbitrator. [ 3 ] For various reasons, including the changes occurring in the construction market, the versatility of senior inspectors, as well as the restrictions imposed on junior inspectors, the City decided to restructure its Planning and Development Department. On March 29, 2011, the City eliminated the junior inspector position held by Mr. Morin and established only senior inspector positions.

Prior to and after March 29, up until senior inspectors were hired, the City subcontracted some of the building inspection work. In June 2011, Mr. Morin exercised his “bumping” rights under the collective agreement in order to obtain another position with the City. He would no longer be carrying out building inspections. [ 4 ] The Union and Mr. Morin (the respondents) both filed grievances. They argued, inter alia , that

the City had subcontracted the work of a junior inspector contrary to the collective agreement. In its reply, the City stated it had lawfully abolished the junior inspector position and, after March 29, there was no longer any work in the bargaining unit for a junior inspector. According to the City, the restrictions regarding subcontracting did not apply. [ 5 ] The arbitrator held that the City had the right to reorganize its workplace and that it had not violated the collective agreement. He dismissed both grievances.

The respondents filed an application for judicial review before the Court of Queen’s Bench following which the judge quashed the arbitrator’s decision. The City is now appealing this decision. For the reasons that follow, I joined my colleagues in allowing the appeal from the bench and restoring the arbitrator’s decision. II. Grounds of appeal [ 6 ] The City raises several grounds of appeal. In short, it contends that the reviewing judge erred in law in applying the wrong standard of review and substituting his opinion for that of the arbitrator. III. Analysis A.

The relevant articles of the Collective Agreement [ 7 ] The relevant articles of the collective agreement are 26.01(a), 27.02 and 29.01. They provide as follows:

ARTICLE 26 – DROITS DE LA VILLE 26.01a) Le Syndicat reconnaît que la Ville a les droits et les pouvoirs de gérer les installations et les services, de diriger le personnel, d’embaucher, de classer, d’affecter, de rétrograder, de mettre à pied, de suspendre, de discipliner les employés ou de leur accorder des promotions. […] 27.02 L’employé dont le poste est aboli ou qui est supplanté a le droit d’exercer son ancienneté pour supplanter un employé possédant moins d’ancienneté au sein de l’unité de négociation, à condition de posséder les aptitudes et les qualités requises pour exercer les fonctions en cause. […] 29.01 Afin d’assurer la sécurité d’emploi pour les membres de l’unité de négociation, l’employeur convient que le travail ou les services exécutés actuellement ou ultérieurement par l’unité de négociation, ne peuvent être sous-traités, transférés, loués, cédés ou concédés, en tout ou en partie, à une autre installation, personne, compagnie ou à un employé qui ne fait pas

partie de l’unité de négociation, à moins que le ou les membres de l’unité de négociation requis pour ce travail ne soient pas disponibles pour le faire au moment en cause.

ARTICLE 26 – CITY RIGHTS 26.01(

a) The Union agrees that the City has the rights and powers to manage the plants and department, direct the working forces and hire, promote, classify, transfer, demote, lay off, suspend or discipline employees. […] 27.02 An employee whose position is abolished or who is displaced, shall be entitled to exercise his seniority in displacing a junior employee within the bargaining unit provided he has the required ability and qualifications to perform the work. […] 29.01 In order to provide job security for the members of the bargaining unit, the Employer agrees that the work or services presently performed or hereafter assigned to the Collective Bargaining Unit shall not be subcontracted, transferred, leased, assigned or conveyed, in whole or in part, to any other plant, person, company or non unit employee unless the member/s of the bargaining unit required for the job is/are not available when required.

B. Arbitrator’s Decision [ 8 ] In his analysis, the arbitrator summarized the parties’ respective positions. Set out below is his understanding of the respondents’ position: [TRANSLATION] According to the union,

article 29 of the collective agreement is clear. Mr. Morin has the qualifications required for the position of junior inspector. His position was never abolished. The employer subcontracted his duties. At first, the union accepted the subcontracting as the City could not find enough employees to perform the work required. Nevertheless, the union wonders how the City could proceed with a reorganization of the work in this case when Mr. Morin was previously performing the same work while having the same qualifications. It rejects the employer’s arguments pertaining to a lack of funds.

These arguments are not justified as the same work still exists. The union asks how the reorganization could be justified given that the employee is still available and able to do the work.

Indeed the layoff is at variance with the obligations set out in the collective agreement. There is still work for Mr. Morin in the City’s Inspection Department. The employer must allow him to return to his work. [paras. 16-18] [ 9 ] The crux of the respondents’ argument was that the reorganization was null and void by application of

article 29.01 As a result, the arbitrator considered the following question fundamental to his task: [TRANSLATION] The first question that I must ask myself is whether the City was entitled to reorganize the Planning and Development Department in order to eliminate the positions of junior and intermediate inspectors and that of chief building inspector, and hire three senior inspectors and one coordinator, as is stated at pages 8 and 9 of exhibit B-2 […]. [See

Schedule “A”.] [ 10 ] In deciding the City was entitled to proceed with such a reorganization, the arbitrator found that nothing in

article 29.01 limited the employer’s power to decide the number of employees it would hire and the qualifications required of those employees. According to the arbitrator, this reorganization was [TRANSLATION] “well within the limits of the functions attributed to a municipality or to any other employer”. [ 11 ] The arbitrator’s decision on the validity of the reorganization was not based solely on the City’s rights (article 26.01). As mentioned earlier, he summarized the union’s argument and referred to

article 29.01. Moreover, he quoted from case law to the effect that when reorganizing a department, an employer must act in good faith and without any ill intent. It is only after having acknowledged that the City had respected these two requirements that he dismissed the grievances. C. The reviewing judge’s decision [ 12 ] The reviewing judge disagreed with the manner in which the arbitrator conducted his analysis. A brief overview of certain excerpts of the judge’s decision clearly illustrates that he applied the review standard of correctness and that he substituted his opinion for that of the arbitrator.

The judge stated: [TRANSLATION] THE COURT: Listen, me, I will give my decision orally immediately and I will be very concise. I – the Court finds in favour of – of the Union in this judicial review and believes that the arbitrator’s decision should be quashed as to both grievances, and I will proceed with an analysis of the decision as such and then, […]. [Transcription of the decision, p. 1, lines 1 to 7] [Underlining is mine.] [ 13 ] When the judge states that he intends to analyse the decision, this is exactly what he does.

In fact, he conducts a meticulous analysis of almost every paragraph of the arbitrator’s decision: [TRANSLATION] THE COURT: […] From the outset, just the – the first paragraph seems to touch on the issue in the beginning of the – the decision, first paragraph, [TRANSLATION] “ contend that the layoff which took place on March 29, 2011, was effected without just cause” . That is not what – the central issue was. […] He merely touches upon the issue. It is incomplete. [Transcription – p. 1, lines 20 to 23, p. 2, lines 1, 2 and 22] […]

[…] Now this Court does not know exactly how the union argued its grievance before the arbitrator, except that in this judicial review, it is clear to this Court that the issue is not whether a position had been abolished. The position of junior inspector 1 was abolished and the union did not try to argue that it had not been abolished. […] [p. 12, line 24; p. 13, lines 1 to 7] [Underlining is mine.] [ 14 ] I digress for a moment by pointing out that the reviewing judge erred when he stated that the elimination of a position was not at issue.

The judge’s position on this point not only conflicts with the arbitrator’s position, it also contradicts the position taken by counsel for the respondents on appeal. That understanding is clear: the junior inspector position could not be abolished due to the application of

article 29.01. The issue of whether the junior inspector position could be abolished in accordance with the collective agreement was “central” to the arbitrator’s decision and to the respondents’ argument before this Court. It is also clear in the arbitrator’s analysis that if the reorganization had been accomplished in bad faith or for inappropriate reasons, Mr.

Morin would have been the victim of dismissal without cause. [ 15 ] I continue my perusal of the reviewing judge’s decision: [TRANSLATION] THE COURT: […] Now the Union asks how – how the – I refer to paragraph 17, [TRANSLATION] “ how the reorganization could be justified given that an employee was still available and able to do the work .” The union’s question was – was more precise than that, was not as vague, not as general, and I think that – that it is like a common denominator, that the arbitrator never did fully understand the question.

He never really zeroed in on the question in – in his decision. […] [Transcription, p. 14, lines 17 to 24; page 15, lines 1 and 2.] […] […] the City of Dieppe knew on March 28, 2011, that with its resolution, the work that up to now had been done by Mr. Morin, a unionized worker, member of the bargaining unit, this work, as of the next day, would be carried out by subcontractors. As a result, the effect was the same, whether – whether it called or described its decision as reorganization, rather than a decision to subcontract.

As far as the Court is concerned, this is a matter of semantics and it takes more than semantics for justification. […] [p. 19, lines 22 to 24; p. 20, lines 1 to 8.] [ 16 ] I would pause here to point out that while the reviewing judge is correct when he says that Mr. Morin’s work would be carried out by subcontractors [TRANSLATION] “the next day”, this conclusion is subject to an important qualification.

The same subcontractors had been doing the work of junior, intermediate and senior inspectors since 2009, when the City started subcontracting – with no grievance being filed by the respondents – due to a shortage of senior inspectors in the bargaining unit.

I will now continue with other excerpts from the reviewing judge’s decision: [TRANSLATION] […] But just in the – in the way that he – that he asks the question at paragraph 46, somewhat like he did at paragraph 1 of his decision, because it is the arbitrator that speaks here, again this is another indication that the arbitrator has no intention of addressing the issue. He states, [TRANSLATION] “ [t]he question I must ask myself is whether...” He does not ask one question.

In this Court’s opinion, he asks seven questions but he describes that as the first question. [p. 21, lines 4 to 14] […] […] that he ignores 29.01. Let’s go to 48 because we are coming to the end – o.k. – of his decision. Here one tends – one tends to believe that the arbitrator has completely forgotten 29.01. […] [p. 23, lines 8 to 12]

[ 17 ] I would note here that the arbitrator reproduced

article 29.01 on page 2 of his 11-page decision, and that he correctly described the respondents’ position in the following words: [TRANSLATION] According to the union,

article 29 of the collective agreement is clear. Mr. Morin has the qualifications required for the position of junior inspector. His position was never abolished . The employer subcontracted his duties. [Underlining is mine.] The respondents did not object to this

interpretation of their position at the hearing of the appeal. D. The Standard of Review [ 18 ] The parties agree that the standard of review to be applied is that of reasonableness. This flows from the fact that in labour law, the arbitrator has special expertise and benefits from the protection afforded by a privative clause. In Dunsmuir v. New Brunswick , 2008 SCC 9 , [2008] 1 S. C.R. 190, the Court ruled that the existing case law can provide guidance to determine which questions will be reviewed on a reasonableness standard.

More importantly for the instant case, the Court added: “Adjudication in labour law remains a good example of the relevance of this approach” (para. 54). [ 19 ] Dunsmuir also states that a reviewing court must inquire into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. Bastarache and Lebel, JJ. addressed this question: […] [R]easonableness 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 law. [para. 47] [ 20 ] What exactly does deference mean, with respect to decisions of administrative tribunals? This is the Supreme Court’s answer: […] Deference is both an attitude of the court and a requirement of the law of judicial review. It does not mean that courts are subservient to the determinations of decision makers, or that courts must show blind reverence to their

interpretations, or that they may be content to pay lip service to the concept of reasonableness review while in fact imposing their own view. Rather, deference imports respect for the decision-making process of adjudicative bodies with regard to both the facts and the law. The notion of deference “is rooted in

part in a respect for governmental decisions to create administrative bodies with delegated powers” […] [para. 48] Although the reviewing judge stated that he was applying the reasonableness test, he in fact applied the correctness standard. He repeatedly expresses his opinion or point of view. His paragraph-by-paragraph analysis does not demonstrate the deference to be accorded when applying the standard of reasonableness.

I am of the opinion that the approach adopted by the reviewing judge constituted nothing more than “a line-by-line treasure hunt for error”, an approach proscribed by the Supreme Court in Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board) , 2011 SCC 62 , [2011] 3 S.C.R. 708 , para. 14 , and Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd., 2013 SCC 34 , [2013] S.C.J. No. 34 (QL) , para. 54 . [ 21 ] Based solely on the fact that the reviewing judge applied the standard of correctness, I would allow the appeal.

Regardless, even though the judge failed to apply the appropriate standard of review, it is still incumbent upon this Court to determine whether, in the circumstances, the arbitrator’s decision was unreasonable. E. Unreasonable Decision? Inadequacy of reasons?

[ 22 ] The respondents contend the arbitrator’s decision was not reasonable because its justification (the reasons) lacks intelligibility and transparency. The respondents frame this part of their argument in terms of inadequacy of reasons. They quote from Burke v. Newfoundland and Labrador Association of Public and Private Employees , 2010 NLCA 12 , [2010] N.J.

No. 62 (QL) , where the majority stated: While it is not necessary to ground this judgment in an adequacy of reasons analysis, it can nevertheless be said that if reasons must show that the tribunal grappled with the substance of the matter, it must follow that, for the purpose of a Dunsmuir analysis, the tribunal's reasoning process must also actually grapple with the substance of the matter.

Where it appears, from an analysis of the reasons given in the context of the record and submissions made, that it did not address the essential submissions, it cannot be said that the decision meets the Dunsmuir standard of "justification, transparency and intelligibility". [para. 70] [ 23 ] In my view, incorporating the adequacy of reasons analysis in the application of the reasonableness test in the standard of review is a slippery slope for the development of administrative law.

By applying an “adequacy of reasons analysis” reviewing courts could justify abandoning the principle of deference and foster review based on the correctness of the analysis. In Newfoundland and Labrador Nurses’ Union and Construction Labour Relations v. Driver Iron Inc. , 2012 SCC 65 , [2012] S.C.J. No. 65 (QL), the Court rejected the proposition that adequacy of reasons constitutes a stand-alone basis for quashing a decision.

Abella, J., stated the following in Newfoundland and Labrador Nurses’ Union : Read as a whole, I do not see Dunsmuir as standing for the proposition that the “adequacy” of reasons is a stand-alone basis for quashing a decision, or as advocating that a reviewing court undertake two discrete analyses — one for the reasons and a separate one for the result […] […] […] [C]ourts should not substitute their own reasons [for those of the decision under review], but they may, if they find it necessary , look to the record for the purpose of assessing the reasonableness of the outcome. [paras. 14 and 15] [Underlining is mine.] [ 24 ] Any use of “adequacy of reasons” analysis in administrative law is exceedingly limited given that the concept of deference to administrative tribunal decision-making requires “a respectful attention to the reasons offered or which could be offered in support of a decision” (para. 12). [Underlining is mine.] These instructions require the reviewing judge, when determining whether a finding falls within a range of possible acceptable outcomes, to consider reasons other than those enumerated by the tribunal which would support the finding. [ 25 ] In light of Newfoundland and Labrador Nurses’ Union, I am of the opinion one can draw the following conclusions with respect to the adequacy of reasons analysis in administrative law: 1.

Written reasons are not required in every case; 2. If the arbitrator decides to provide written reasons, it is not necessary to refer to every argument, legislative provision, precedent or other detail that the reviewing judge may have considered relevant; 3. If the reviewing judge disagrees with the arbitrator’s analysis, he or she must consider other arguments that could support the arbitrator’s finding and which would bring it within the range of possible acceptable outcomes. [ 26 ] In the present case, the reviewing judge erroneously concluded the arbitrator had failed to

address the application of

article 29.01 of the collective agreement. His conclusion that the arbitrator’s analysis was thereby unreasonable is flawed. I agree with the appellant’s contention that the arbitrator provided adequate reasons for his decision. F. Does the arbitrator’s conclusion meet the requirements of reasonableness? [ 27 ] The respondents urge this Court to review the arbitration decision and declare it unreasonable in the circumstances. [ 28 ] The arbitrator thoroughly explained the positions of the parties. He referred to all the relevant articles of the collective agreement.

By finding in favour of the appellant, he acknowledged that Mr. Morin’s position had been eliminated. He concluded there was no longer any work for an Inspector I within the bargaining unit. As a result of these conclusions, the protections under

article 29.01 were not relevant to the lis between the parties. Without ruling on the issue of the correctness of the decision, I am of the opinion the arbitrator’s decision is within the range of possible acceptable outcomes. The reviewing judge erred in finding otherwise. [ 29 ] If the respondents are dissatisfied with the arbitration decision, their remedy is at the negotiating table where they can argue in favour of different terms in a new collective agreement. IV. Conclusion [ 30 ] It is for these reasons that I joined my colleagues in allowing the appeal from the bench.

At the hearing, we ordered costs of $2,500. _____________________________ B. Richard Bell, j.c.a. NOUS SOUSCRIVONS À L’AVIS : ______________________________ Alexandre Deschênes, j.c.a. ______________________________ J.C. Marc Richard, j.c.a.