) ) Canadian Pacific Railway Applicant – v. –, 2024 ONSC 278

CITATION : Canadian Pacific Railway v. Teamsters Canada Rail Conference, 2024 ONSC 278 DIVISIONAL COURT FILE NO.: 194/23 DATE: 20240115 ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT Stewart, Sutherland and Nishikawa JJ. BETWEEN: ) ) Canadian Pacific Railway Applicant – and – Teamsters Canada Rail Conference Respondent ) ) ) ) ) ) ) ) ) John Craig and Anthony Kwong, for the Applicant Ken Stuebing and Sukhmani Virdi, for the Respondent ) ) ) HEARD: December 13, 2023 REASONS FOR DECISION NISHIKAWA J.

Overview [ 1 ] The Applicant, Canadian Pacific Railway (the “Company”) brings an application for judicial review of a decision of the Arbitrator, William Kaplan, dated February 21, 2023 (the “Decision”). In the Decision, the Arbitrator found that he had jurisdiction over certain disputes between the Company and the Respondent, Teamsters Canada Rail Conference (the “Union”). The Company takes the position that the Decision must be quashed because it is unreasonable and because the Company was denied procedural fairness before the Arbitrator. Issues [ 2 ] This application raises the following issues: (

a) Is the application for judicial review premature or untimely? (

b) Did the Arbitrator adhere to principles of natural justice and procedural fairness? (

c) Is the Decision reasonable? Background The Parties and their Dispute [ 3 ] The Company operates transcontinental transportation services across North America. The Union is a trade union certified under the Canada Labour Code , R.S.C. 1985, c. L-2 (the “ Code ”). The Union represents a bargaining unit comprised of Company employees including, among others, locomotive engineers, conductors, and yard masters. [ 4 ] The parties are subject to a collective agreement in effect from January 1, 2022 to December 31, 2023. Pursuant to a memorandum of agreement between the parties, disputes regarding the

interpretation and application of the collective agreement would ordinarily proceed to the Canadian Railway Office of Arbitration and Dispute Resolution (“CROA”). The CROA is a highly specialized tribunal, established to meet efficiently the unique needs of labour disputes within the Canadian railway industry. The CROA is

governed by strict rules to facilitate expedited arbitration processes. [5] Beginning in 2012, the Union has filed hundreds of grievances on the issue of whether the Company is in violation of termsregarding the use and payment of “conductor only” crews, as specified in the collective agreement. [6] On September 16, 2017, during collective bargaining, the parties agreed to the Grievance Reduction Initiative (“GRI”)pursuant to which they would proceed to ad hoc arbitration under the CROA Rules before the Arbitrator for the adjudication of certaingrievances.

The parties agreed to a list of 15 issues that would be submitted to the Arbitrator, which included conductor-only relatedgrievances at issue in this proceeding. Under the GRI, the parties were to bring forward a certain number of test cases and apply them tosimilar disputes. However, the memorandum of settlement containing the GRI was not ratified. [7] In an “interlocutory order” dated April 5, 2018, the Arbitrator found that despite the non-ratification of the memorandum ofsettlement, the parties had conferred jurisdiction on him by their conduct.

The Arbitrator found that even after the failed ratification vote,the Company continued to engage with the Union about the substance and process for resolving certain grievances. He directed that eightconductor-only grievances representing specific scenarios proceed as scheduled. [8] In the fall of 2020, the Arbitrator issued eight separate consent awards on the sample grievances.

The consent awards statedthat they were “intended to provide guidance for both past disputes, including those in abeyance, and future disputes.” The Arbitratorfurther stated that he “remain[ed] seized with respect to the implementation of this award.” [9] Following the release of the awards, the parties engaged in a review of hundreds of remaining conductor-only grievances butwere only able to resolve a small portion of the outstanding grievances. [10] On June 14, 2021, after receiving submissions from both parties, the Arbitrator concluded that he retained jurisdiction over the“supplemental disputes” and “remained seized, without, of course, prejudging the matters in any way.” [11] At a case conference on June 2, 2022, the Arbitrator again stated that he had jurisdiction over the outstanding supplementaldisputes and directed a process to resolve and adjudicate them.

He subsequently confirmed in writing that he retained jurisdiction anddirected the exchange of submissions. [12] On January 6, 2023, the Company raised an objection to the Arbitrator’s jurisdiction. The Union responded on January 18,2023 and the Company further responded on January 25, 2023. The Decision [13] On February 21, 2023, the Arbitrator issued the Decision. In the Decision, the Arbitrator wrote that “jurisdiction has beenrepeatedly contested by the Company but clearly established and maintained since well before the consent awards were released someyears ago. The record of this is manifest.

There has been no denial of natural justice.” Further, the Arbitrator found that the Company,“by its words and actions, attorned to the proceedings and may not, therefore, now claim that there is no jurisdiction for it to continue.” [14] The Arbitrator found he had continued jurisdiction, though only over lead grievances that conform to the same set ofoperational facts on which he ruled in 2020.

The Adjudicator found it inappropriate for the Company to suggest “that the only availableremedies are ordering mediation on the Company’s terms or [the Adjudicator] recusing [himself].” The Adjudicator found that it wasopen to the Union to propose the 17 lead cases that the Union claimed were materially analogous to the 2020 cases. The Arbitrator statedthat those 17 cases “must be substantially similar” to one of the cases decided in 2020.

The Company would then be entitled todemonstrate that the lead grievances were materially distinguishable from the cases heard in 2020. [15] The Adjudicator directed the Company to file submissions responding to the Union’s 17 lead cases within agreed-upontimelines or as agreed between counsel.

Analysis Standard of Review [16] The parties agree that a reasonableness standard of review applies to the merits of the Decision. [17] In respect of the procedural fairness issues raised, the issue is assessed in accordance with the factors articulated in Baker v.Canada (Minister of Citizenship and Immigration), (SCC), [1999] 2 S.C.R. 817.

Is the Application for Judicial Review Premature or Untimely? [18] The Union raises a preliminary objection that the application for judicial review is out of time because it should have beenfiled within 30 days of the Arbitrator’s decision that he had jurisdiction over the conductor-only grievances submitted pursuant to theGRI despite the failed ratification of the minutes of settlement. In other words, the Company should have filed its application for judicialreview after the April 2018 interlocutory award.

The Union submits that the Company further failed to bring an application for judicialreview after the Arbitrator confirmed that he continued to have jurisdiction in June 2021 and again in June 2022. The application was notfiled until March of 2023. [19] Alternatively, the Union submits that the application for judicial review is premature because the Arbitrator has yet to make adecision as to the scope of his jurisdiction over the 17 lead grievances that the Union has submitted.

[ 20 ] Both parties and the Arbitrator have described the Decision as confirming the Arbitrator’s “jurisdiction”. Upon further review, it becomes clear that they have used the term jurisdiction to describe two different things: (

i) the Arbitrator’s jurisdiction over the process to determine the scope of his authority to adjudicate the 17 lead grievances; and (ii) the scope or breadth of that authority or, in other words, the arbitrability of the 17 lead grievances. [ 21 ] In the Decision, the Arbitrator concluded only that he continues to have jurisdiction in the sense that he remains seized of the process for determining the arbitrability of the supplemental disputes, or the 17 lead grievances.

He did not conclusively determine the scope of his authority, that is, whether the lead grievances identified by the Union fall within or outside the scope of his decision-making authority. The Arbitrator has yet to make a determination on the arbitrability of those grievances. Indeed, he could not have determined that issue because the Company has yet to make submissions on it.

In the Decision, the Arbitrator directed the Company to make those submissions. [ 22 ] The correspondence among the parties and the Arbitrator demonstrates that while the Arbitrator has remained seized in respect of the process, he has not yet decided the scope of his authority over the additional lead grievances. In brief, the Arbitrator’s jurisdiction over certain conductor-only grievances originated in the GRI and was continued by virtue of the consent awards made in 2020.

The Arbitrator stated that the consent awards would provide guidance regarding past and future disputes and that he remained seized with respect to implementation. As noted above, the Arbitrator confirmed his jurisdiction in June 2021. [ 23 ] In May 2022, the parties made submissions to the Arbitrator about the process relating to the additional grievances. Notably, in an email dated May 19, 2022, the Company stated that it required a sample grievance for each scenario that the Union claimed fell within the scope of the consent awards.

The Company did not state that the Arbitrator lacked jurisdiction. [ 24 ] In June 2022, the Arbitrator directed how the process would unfold. The Union was to identify the grievances that were to be submitted to the Arbitrator and make submissions as to why they fell within the scope of the parties’ agreement.

The next step was for the Company to make written submissions to the Arbitrator as to why it disagreed with the Union that the lead grievances fell within the scope contemplated under the consent awards. [ 25 ] The goal of that process was to enable the Arbitrator to determine the scope of his authority, in other words, which grievances fell within and which ones fell outside his jurisdiction, as had been agreed to between the parties. The email messages exchanged between the parties and with the Arbitrator in June 2022 evidence this.

The Company did not object to this process or to the Arbitrator’s jurisdiction but stated only that it would need more time. In an email message to the Arbitrator dated June 24, 2022, the Company stated that it was unclear as to which disputes the Union intended to submit to the Arbitrator and sought clarity on the number and scope of the disputes. The Company made no objection about the Arbitrator’s jurisdiction. [ 26 ] On August 17, 2022 the Union filed its representative batches and overviews of 17 lead grievances for each batch.

On September 7, 2022, the Company wrote to the Union identifying a series of preliminary objections that it intended to raise. On October 5, 2022, the Union filed written submissions, exhibits and case law. [ 27 ] In its October 14, 2022 submission, the Company took issue with the number and nature of the lead grievances submitted by the Union but did not assert that the Arbitrator lacked jurisdiction over them. The Company requested a preliminary hearing on the “arbitrability” of the Union’s lead grievances and associated batches through the supplementary process.

Again, the objection was not to the Arbitrator’s jurisdiction over the supplemental disputes generally. The Union responded that the Company should be directed to file its submissions prior to any hearing. [ 28 ] On December 1, 2022, the parties were before the Arbitrator on a different matter.

On that occasion, as described in the Decision, the company “raised concerns including, for the first time, whether there was any jurisdiction whatsoever for any matter to proceed to a hearing.” [ 29 ] This prompted the Arbitrator to write to the parties on December 13, 2022 indicating that he was “more than willing to rule on this matter: either granting the employer request for a further hearing dealing, to put it very broadly, with the issue about whether the union has compiled with the earlier direction or granting the union request for a direction requiring the employer to file its submissions including any submissions it might wish to make about the lead and batch grievances.” The Arbitrator also inquired whether the parties had an interest in a mediation/arbitration process to resolve the issues, but no mediation took place. [ 30 ] On January 6, 2023, the Company objected to the Arbitrator’s jurisdiction to continue. [ 31 ] The chronology demonstrates that the Arbitrator was in the process of seeking submissions as to whether he can adjudicate the 17 lead grievances that the Union says fall under the same set of operational facts as the consent awards.

The Company did not make responding submissions but instead contested the Arbitrator’s jurisdiction to continue. Therefore, the only decision that the Arbitrator has made is akin to a preliminary ruling on his jurisdiction to determine the scope of his jurisdiction. That is entirely consistent with s. 60 (

b) of the Code , which permits an arbitrator to determine whether a matter is arbitrable. [ 32 ] When viewed in this manner, the Company’s application for judicial review is premature because the Arbitrator has not ruled on the issue of whether the 17 lead grievances fall within the scope of his jurisdiction. [ 33 ] The Company submits that if the Arbitrator had jurisdiction over the parties’ dispute, he would not have had to render the Decision, or to reaffirm repeatedly that he had jurisdiction.

In my view, however, the Arbitrator was compelled to do so because the Company continually contested his authority over the supplemental disputes. The Company initially participated in the process before the Arbitrator and sought further information from the Union regarding the grievances it sought to submit to the Arbitrator. However, what began as the Company’s objection to the number of grievances and lack of time eventually became, in January 2023, a more broadly worded objection to the Arbitrator’s “jurisdiction” generally.

That is what necessitated the March 2023 decision. [ 34 ] I disagree with the Company’s submission that the Arbitrator has conferred upon himself an “endless jurisdiction” to deal with innumerable future grievances. The Decision makes clear that the Arbitrator recognizes the limits of his jurisdiction, for example, when

he states: “I have jurisdiction only over lead grievances that conform to the same set of operational facts ruled on in 2020.” The Arbitrator will have to decide whether the lead grievances submitted by the Union fall within or outside the scope of the parties’ agreement. [ 35 ] Further, I agree with the Union’s position that had the Company intended to challenge the Arbitrator’s authority to address the parties’ dispute generally, the time to do so was after the April 2018 interlocutory order.

The Company could have sought judicial review of the Arbitrator’s decision finding that he had jurisdiction notwithstanding the failed ratification of the minutes of settlement. Instead, the Company participated in the process that the parties had commenced with the Arbitrator and that led to the submission of eight sample grievances. The Company has not challenged those awards, or any subsequent assertions of jurisdiction by the Arbitrator.

In any event, it would be out of time to do so. [ 36 ] It goes without saying that once the Adjudicator renders a decision as to whether the 17 lead grievances identified by the Union fall within the scope of his authority as agreed by the parties, that decision may be subject to judicial review. At that stage, a complete evidentiary record as to the basis for the Arbitrator’s decision would be available to the court on review.

The current application for judicial review lacks such an evidentiary record, which further demonstrates that the application is premature. [ 37 ] Accordingly, the application for judicial review is dismissed as premature. Was the Applicant Denied Procedural Fairness? [ 38 ] Because the Company’s application for judicial review is premature, it is unnecessary to address both the procedural fairness and reasonableness grounds that they raise.

I would note, however, that based on my view that the purpose of the Decision was to confirm that the Arbitrator continued to be seized of the parties’ dispute to determine the scope of his jurisdiction over the lead grievances, he was not required to hold a hearing or to follow any other particular process. Conclusion [ 39 ] Accordingly, the application for judicial review is dismissed.

In accordance with the agreement between the parties, the Company is required to pay costs of the application in the amount of $5,000, including disbursements, plus HST to the Union. “Nishikawa J.” “I agree: Stewart J.” “I agree: Sutherland J.” Released: January 15, 2024 CITATION : Canadian Pacific Railway v. Teamsters Canada Rail Conference, 2024 ONSC 278 DIVISIONAL COURT FILE NO.: 194/23 DATE: 20240115

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT Stewart, Sutherland and Nishikawa JJ. BETWEEN: Canadian Pacific Railway Applicant – and – Teamsters Canada Rail Conference Respondent REASONS FOR DECISION Released: January 15, 2024 Nishikawa J.