Muskrat Falls Employers' Association Inc. Applicant And: Resource Development Trades Council of Newfoundland v. Labrador, 2018 NLSC 182

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Muskrat Falls Employers’ Association Inc. v. Resource Development Trades Council of Newfoundland and Labrador , 2018 NLSC 182 Date : September 14, 2018 Docket : 201801G1068 Between: Muskrat Falls Employers' Association Inc. Applicant And: Resource Development Trades Council of Newfoundland and Labrador Respondent Before: Justice Gillian D. Butler Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: June 28, 2018

Summary: Judicial review of Labour Arbitrator’s Decision on a preliminary point and two substantive issues, all three of which involved

interpretation of the Collective Agreement. The reasons revealed that in each instance, the Arbitrator chose an

interpretation of the contract that its words could bear and was therefore justifiable. The Arbitrator’s decision as a whole was transparent and intelligible and the conclusions reached on all three issues fell within a range of reasonable outcomes. Appearances:

David B. Pritchett Appearing on behalf of the Applicant Dana K. Lenehan, Q.C. Appearing on behalf of the Respondent Authorities Cited: CASES CONSIDERED: Muskrat Falls Employers’ Assn. Inc. v. Resource Development Trades Council of Newfoundland and Labrador , 2015 NLTD(G) 150; Dunsmuir v. New Brunswick , 2008 SCC 9 ; Layman v. Layman Estate , 2016 NLCA 13 ; Manitoba Association of Health Care Professionals v. Nor-Man Regional Health Authority Inc. , 2011 SCC 59 ; Long Harbour Employers Assn. Inc. v.

Resource Development Trades Council of Newfoundland and Labrador , 2012 NLTD(G) 115; Newfoundland & Labrador (Treasury Board) v. N.A.P.E. , 2006 NLTD 79 ; International Brotherhood Lower Churchill Transmission Construction Employers' Assn. Inc. and IBEW, Local 1620 (Tizzard), Re , 2018 CarswellNfld 198, 136 C.L.A.S. 26 (NL Arb.) ; Association of Justice Counsel v. Attorney General of Canada , 2017 SCC 55 TEXTS CONSIDERED: Donald J.M. Brown, Q.C. & David M.

Beatty, Canadian Labour Arbitration , 4th ed. (Aurora: Canada Law Book, 2006) REASONS FOR JUDGMENT Butler, J. : INTRODUCTION [ 1 ] This Court has released numerous decisions reviewing arbitration awards involving the Collective Agreement entered between the parties in March 2013 (the “Agreement”) respecting the Lower Churchill Hydro Electric Generating Project at Muskrat Falls (see Muskrat Falls Employers’ Assn. Inc. v. Resource Development Trades Council of Newfoundland and Labrador , 2015 NLTD(G) 150).

I therefore do not consider it essential to review the history of the Special Project. [ 2 ] As to the standard of review that should apply, counsel agree that it is well established as ‘reasonableness’ ( Dunsmuir v. New Brunswick , 2008 SCC 9 ). ‘Reasonableness’ is a deferential standard that does not equate to the standard of appellate review that is applied to decisions of this Court. It is designed to recognize two fundamental principles.

Firstly, that within specialized fields such as labour relations, tribunals and arbitrators have particular expertise over the subject matter and secondly, that dispute resolution is intended to be conducted expediently. Application of the ‘reasonableness’ standard requires judges of superior courts to exercise restraint, an admittedly uncomfortable role for judges reviewing an arbitrator’s decision on a question of law (contractual

interpretation) and whose own decision must meet a standard of correctness. [ 3 ] For the reasons that follow, I am satisfied that the deferential standard is justified in this instance.

The parties agreed that labour disputes arising on this Project should be determined by arbitration, a form of alternative dispute resolution; they agreed that the adjudication should be conducted by individuals rotating on an approved list appended to the Agreement; the Arbitrator in this case is a lawyer recognized to have considerable adjudicative experience; over the course of this Project’s history, the Arbitrator gained familiarity with the terms of the Agreement and the location and nature of the Project. [ 4 ] In this Decision, references to the Employer are to Speuata Security Inc., which has been exclusively responsible for the provision of on-site security personnel since the beginning of the Project.

The Union represented by the Trades Council on this grievance was the Hotel and Restaurant Workers Local 779. The Issues

[ 5 ] There are three broad issues to be considered. [ 6 ] The first addresses a preliminary issue of whether the “Step” time limits stated in

Article 15 of the Agreement are mandatory. Related to this issue is the question of what follows from the acknowledged oversight by the Trades Council in failing to meet the time limits applicable between Steps 2 and 3. [ 7 ] The second issue asks whether the Employers’ Association had the right to unilaterally set new qualifications for security personnel at the Site. This is acknowledged to have occurred following a protest in the Fall of 2016, during which several protestors managed to breach the security boundaries and enter the Site to the legitimate concern of Nalcor, the owner of the Site. The second issue raises the

interpretation of Articles 5 and 7 of the Agreement. [ 8 ] The third issue concerns a specific personnel workforce request for one security officer needed by March 26, 2017 and whether the hiring of the individual in question represented a breach of

Article 7 of the Agreement as qualified by a Memorandum of Understanding (MOU). On this issue, I must first address whether a December 1, 2016 grievance could cover a labour dispute arising in March 2017. Issue 1 – Step Timelines The Contractual Provision [ 9 ]

Article 15.01 references a three-step process through which a grievance must proceed. Within each step, time limits are stated as indicated below: A dispute arising out of the

interpretation, application or alleged violation of this Agreement, including a dispute as to whether a matter is arbitrable, but excluding disputes under

Article 17 (Pre-Job Conference) or

Article 18 (Work Team Composition), which shall not be subject to the herein grievance procedure, shall be adjudicated in accordance with the following procedures:

a) An employee assisted by his/her Shop Steward, if he/she so desires, and the employee’s immediate non-bargaining unit supervisor shall meet to discuss and, if possible, resolve such matter. Such resolution shall not contravene the terms and conditions of the Collective Agreement; it is solely for the purpose of resolving the matter and shall not be considered precedential or binding in any other grievance dispute.

b) STEP 1: If the matter discussed in

a) above cannot be settled by the Steward and the non-bargaining unit supervisor then the grievance shall be reduced to writing within five (5) days after the circumstances giving rise to the grievance. The supervisor shall render his/her decision, in writing, within five (5) days of his/her receiving the written grievance. The written grievance shall state the alleged violation, the date of the violation, the facts describing the alleged violation, the location of the violation, the person or entity committing the violation, the

Article or Articles of the Agreement alleged to have been violated and the remedy sought.

c) STEP 2: Should the written decision rendered in Step 1 be unsatisfactory to the employee or should no decision be rendered, the employee, assisted by the Council of Unions Site Representative, shall submit the written grievance within a further two (2) days to the Association and the Contractor’s Designated Representative on the Project. The Association representative, the Council of Unions representative, the Contractor’s representative and the employee, assisted by the Steward, shall meet within five (5) days to discuss the matter.

Prior to the second step meeting, the Association and Council of Unions commit to engage in a joint fact finding exercise with a view of developing a common understanding of the facts surrounding the dispute to better position the Parties to resolve such dispute. The Contractor shall render a decision in writing within one (1) day of the second step meeting. If such a meeting is not held, the matter shall be referred to Step 3.

d) STEP 3: Should the decision rendered at Step 2 be unsatisfactory, within two (2) days of the decision, the Contractor, the Association representative and the Council of Unions representative shall meet to discuss the matter. If no resolution can be achieved within two (2) days of such a meeting, either the Council of Unions or the Association may, within five (5) days of the meeting, refer the matter to arbitration in accordance with the procedure contained herein.

If such meeting is not held, the matter may be referred by either the Council of Unions or the Association to the next step – arbitration. [ 10 ] Articles 15.08 and 15.09 specify as follows: 15.08 The time limits specified in this procedure are mandatory. Failure of a Party to file a grievance within the time limited or failure of the grieving Party to advance a grievance to the next step in the time limited shall mean the matter is not grievable and shall constitute abandonment.

15.09 The Parties may, by mutual consent and in writing, extend the time limits of this grievance and arbitration procedure, which consent shall not be unreasonably withheld. In order to take into account applicable work schedules, reference to a number of “days” within this

Article 15 shall be construed as working days. The Facts [ 11 ] Factually, there is no dispute. The primary personnel workforce request form dated November 18, 2016 was a request for four security officers with a start date “ASAP”.

The request form confirmed that applicants were required to have the enhanced qualifications initially developed by the Employers’ Association on November 16, 2016 in response to the security incident/protest in October 2016 (and subsequently modified). [ 12 ] The successful workers selected for hire on this request form were one referral from the Union and three direct-hires by the Employer. The commencement date was intended to be December 3, 2016 and the grievance was filed on December 1, 2016.

Due to the Christmas shut-down of the project, the Step 2 grievance meeting was not held until March 2, 2017 and the grievance was rejected at Step 2 on March 6, 2017. [ 13 ] No request was made for a Step 3 meeting until April 20, 2017 and this was met with a swift objection by the Employers’ Association. The Employer’s letter confirmed its position that the matter had not been advanced in a timely fashion and that the grievance was deemed to have been abandoned. [ 14 ] Before the Arbitrator, the Trades Council called Melinda Wade, Jurisdiction and Grievance Administration Manager for the Trades Council.

She acknowledged that she overlooked the grievance and failed to progress it promptly to a Step 3 meeting, but that on discovering her error, attempted to

schedule a meeting which she characterized as an attempt to discuss the grievance as opposed to a formal “Step” meeting. [ 15 ] This led to a conference call “meeting” scheduled for May 2, 2017 at which time the Employer requested a postponement to May 9, 2017 which was agreed upon. At that meeting, the Employer was represented by Lyndon Quinton and he is noted to have said, “I have reviewed the documents, the company has not changed their position”. However, according to Ms. Wade, there was no specific reference made to missed timelines at this brief meeting.

The Questions Addressed [ 16 ] The questions before the Arbitrator in relation to Issue 1 were therefore whether the time limits stated in

Article 15.01 were mandatory, whether they could be waived, and if the evidence supported that they were waived. [ 17 ] The Arbitrator rendered one decision covering both the preliminary objection and the merits of the grievance. As to the preliminary objection, the Arbitrator held at page 31: I am still satisfied with the conclusion that the Employer took sufficient actions after the receipt of Clark’s April 21 letter to demonstrate waiver of delay. MFEA and, by implication, the Employer were both aware of the delay and yet continued to act as if the delay was not material. Notwithstanding that knowledge, by its various actions, including

a) having the Step 3 meeting on May 9 which did not specifically raise that timing issue as a continuing objection to the Grievance, and by

b) having the various meetings in December 2016, January and April 2017 to discuss the issue of security officer qualifications, the Employer and its collective bargaining agent MFEA have both waived their right to claim a lack of timeliness within the grievance process itself. I am also aware of the uncontradicted evidence of Melina (sic) Wade that the timing of Step meetings and the Parties’ responses within the grievance process are often delayed because of the difficulty in finding common available dates for the many persons who must participate in any meeting or discussion.

In this workplace, delay in processing is normally only raised in the context of the filing of a grievance. It is unseemly for the Employer to be allowed to insist on strict compliance with processing timelines when that requirement is not the established practice among the various parties to this collective bargaining relationship. None of them have strictly lived the rules which they created on process timing, except perhaps in incidences where delay in filing a grievance is at issue.

That relaxed practice is perhaps simply a consequence of reality in a busy project and the difficulty in finding a convenient time to conduct such meetings. [ 18 ] Since the Trades Council considered the result of Step 2 to be “unsatisfactory”, it is agreed that the onus is on them as the grieving party to establish a valid grievance and waiver of the strict timelines. There was no onus upon the Employers’ Association to “disprove” a waiver.

Interpretation of

Article 15 [ 19 ] The Trades Council’s position is that the relevant

Article 15.00: • imposes a positive obligation on it to file a written grievance with the non-bargaining unit supervisor in order to trigger Step 1; • contemplates receipt of a written decision within five (5) days but if none is received, requires the grievance to be resubmitted to the Employers’ Association and the Contractor’s Designated Representative within two (2) days; • requires a Step 2 meeting to discuss the matter within five (5) days;

• contemplates a decision by the Contractor within one day but if a meeting is not held, the matter automatically proceeds to Step 3; and • if a Step 3 meeting is not held, either of the parties can proceed to Arbitration. [ 20 ] Thus, the Trades Council maintains that the failure to hold a Step 3 meeting simply entitles either party to move to arbitration and asserts that the failure to hold a Step meeting is not fatal to the grievance’s viability. [ 21 ] The language of Articles 15.01(

c) and (

d) is not entirely consistent with the position taken by the Trades Council. These paragraphs reference meetings that are mandatory (“shall meet … to discuss”) and decisions that are required to be delivered “in writing” within stated time limits. However, the same paragraphs later reference what is to occur if “no decision be rendered” or “if such a meeting is not held”. [ 22 ]

Article 15.01(

d) does not state that when a decision rendered from a Step 2 meeting is unsatisfactory, the matter “automatically proceeds to Step 3”. It states instead that “within two (2) days of the decision, the Contractor, the Association representative and the Council of Unions representative shall meet … (and) if no resolution can be achieved within two (2) days of such a meeting, either the Council of Unions or the Association may, within five (5) days of the meeting, refer the matter to arbitration …”. Further, it states that, “if such meeting is not held, the matter may be referred by either … to the next step, arbitration”. [ 23 ] The Arbitrator’s 42-page Decision did not contain a

section dedicated to the principles of contractual

interpretation. He interpreted the time limits as mandatory and relied on the evidence to support the conclusion that the Employers’ Association had waived the Trade Council’s failure to advance the grievance by requesting a Step 3 meeting within two days of the decision given at the Step 2 meeting. [ 24 ] However, as confirmed by our Court of Appeal in Layman v. Layman Estate , 2016 NLCA 13 , at paragraphs 21 to 24 , it is not necessary for the Arbitrator to explain why he interpreted the clause as he did.

Instead, this Court is required to ask “whether the whole of the record could support his decision as reasonable”. The Concept of Waiver [ 25 ] Both counsel cite for the concept of waiver, paragraph 2:3130 from Donald J.M. Brown, Q.C. & David M. Beatty, Canadian Labour Arbitration , 4th ed. (Aurora: Canada Law Book, 2006): 2:3130 – Waiver of procedural irregularities The concept of “waiver” connotes a party not insisting on some right, or giving up some advantage. However, to be operative, waiver will generally require both knowledge of and an intention to forego the exercise of such a right.

In its application, waiver is a doctrine that parallels the one utilized by the civil courts known as “taking a fresh step”, and holds that by failing to make a timely objection and “by treating the grievance on its merits in the presence of a clear procedural defect, the party waives the defect”. That is, by not objecting to a failure to comply with mandatory time-limits until the grievance comes on for hearing, the party who should have raised the matter earlier will be held to have waived non-compliance, and any objection to arbitrability will not be sustained.

This has been held to be so even though there was a timely objection as to arbitrability but not one that related to the failure to meet time-limits. Where, however, the objection to untimeliness is made at the earliest opportunity, even if it is not made in writing, it will preclude a finding that the irregularity was waived. [ 26 ] I agree that the Arbitrator did not make specific reference to the two requirements established in Brown & Beatty for “waiver” (“knowledge of” and “an intention to forego the exercise of” a right).

However, as has oft been stated by this Court, a reviewing authority has an obligation to supplement reasons in the application of the reasonableness standard. [ 27 ] In Manitoba Association of Health Care Professionals v. Nor-Man Regional Health Authority Inc. , 2011 SCC 59 , the court stated at paragraphs 5 and 6: 5 Labour arbitrators are not legally bound to apply equitable and common law principles — including estoppel — in the same manner as courts of law.

Theirs is a different mission, informed by the particular context of labour relations. 6 To assist them in the pursuit of that mission, arbitrators are given a broad mandate in adapting the legal principles they find relevant to the grievances of which they are seized.

They must, of course, exercise that mandate reasonably, in a manner that is consistent with the objectives and purposes of the statutory scheme, the principles of labour relations, the nature of the collective bargaining process, and the factual matrix of the grievance. [ 28 ] In light of this guidance, I am not concerned that the Arbitrator’s application of the concept of waiver may not have been in strict compliance with the requirements stipulated in the literature cited. The Arbitrator’s Decision on Waiver

[ 29 ] The Arbitrator’s analysis on the timelines issue is contained at pages 28 to 32 of his decision.

He rejected the preliminary objection and in doing so stated that his conclusion on waiver was based upon the following key facts: 1) there were two meetings held on May 2 and May 9 and the timelines objection was not raised at either; 2) there had been meetings to attempt a resolution of the global issue between December 2016 and April 2017; 3) the Employer took sufficient actions after the April 21, 2017 letter to demonstrate waiver of delay; and 4) the established practice between the parties was that the time limits in Steps 1, 2 and 3 were neither treated as required nor routinely honoured. [ 30 ] I shall address each of the four grounds relied upon by the Arbitrator on the timelines issue below.

May 2 and May 9, 2017 Meetings [ 31 ] Firstly, while there were two telephone “meetings”, scheduled on May 2 and May 9, 2017, the first was not characterized by Melinda Wade as a Step 3 meeting, but instead as a “get together on the phone” and was postponed to May 9, 2017. [ 32 ] On May 9, 2017, the Employer’s position was recorded in Ms. Wade’s notes as “has not changed”. Although the Employer’s letter of April 21, 2017 had expressed the view that the grievance was not arbitrable because of the missed timelines between Step 2 and Step 3, Ms.

Wade testified that this was not specifically raised on May 9, 2017. [ 33 ] The Trades Council relies on the decision of my colleague Hall, J. in Long Harbour Employers Assn. Inc. v. Resource Development Trades Council of Newfoundland and Labrador , 2012 NLTD(G) 115 where a similar preliminary issue of timelines and waiver had been addressed. However, the Long Harbour decision had not been referred to the Arbitrator. [ 34 ] In Long Harbour there had been a gap of seven months between the steps of the grievance procedure and the Employers’ Association had taken the view that the grievance was abandoned.

However, a meeting had been held to discuss a settlement of the grievance, without resolution. [ 35 ] On these unique facts, Hall, J. found that there had been sufficient evidence before the Arbitrator on which he could conclude that the Employers’ Association had waived what was otherwise strict compliance with the Step timelines. [ 36 ] There is a distinction between the meetings of May 2 and May 9 and the meeting that was addressed by Justice Hall in Long Harbour .

The meeting in question in the Long Harbour case involved “serious grievance discussions”; neither the telephone meeting of May 2 (which resulted in a postponement) nor the equally brief May 9 meeting (at which the Employer merely confirmed its position), could be so characterized. Meetings Between December 2016 and April 2017 [ 37 ] The Employers’ Association cites our Court of Appeal in Newfoundland & Labrador (Treasury Board) v.

N.A.P.E. , 2006 NLTD 79 , at paragraph 66 in support of the timing of the “procedural defect”: 66 I am satisfied that in order for the doctrine of waiver to be applied with respect to this matter there has to have been, at the time that the alleged act of waiver occurred, some procedural defect on the part of the Union. At the time the November 1st letter was sent by Ms.

Aylward captioning "termination" but using the suspension grievance file number, there had not been any procedural defect on the part of the Union in proceeding with the Termination Grievance as the time limit to do so did not expire until three days later. The Employer could not waive a defect which had not arisen. In my view it is irrelevant that the Waiver Letter was received by the Union after the expiry of the time limit for the filing of the Termination Grievance.

I am satisfied that the Arbitrator is correct in stipulating that intention to waive is a requirement of the doctrine of waiver and the Employer could not have waived that requirement when there was no procedural defect to waive. That intention cannot be created out of the mere accident that the November 1st letter was received after the expiry of the limitation period. Additionally, I do not find the Arbitrator's conclusions with respect to the October 13th conversation of Ms. Nichols and Mr. Puddister to be patently unreasonable. He concluded, on evidence which he accepted, that Ms.

Nichols had no intent to waive the time limit in question. Waiver requires intent. I therefore affirm the Arbitrator's findings that the Employer had not waived the requirement for the Union to comply with the provisions of the Collective Agreement in filing the Termination Grievance on a timely basis. [ 38 ] It is not disputed that there were other security personnel requested in November 2016 and that in an attempt to resolve the broad dispute between the parties on management’s right to require the enhanced qualifications, meetings were held in December 2016, January 2017 and April 2017.

However, these ultimately proved to be unsuccessful. [ 39 ] In the final paragraph of the Arbitrator’s factual review on Issue 1, he addressed these other meetings “…where efforts were made to find a solution…for security personnel with increased qualification….” conducted in December 2016, in January 2017 and again in Ottawa in April 2017. [ 40 ] The evidence establishes that the December 2016 and January 2017 meetings predated the alleged defect and therefore as our Court of Appeal confirmed in Newfoundland & Labrador (Treasury Board) , at paragraph 66 , these could not be relied upon by the Arbitrator as evidence of waiver.

It is however unclear if the April 2017 meeting predated the alleged procedural defect. Actions after April 21, 2017 [ 41 ] The Arbitrator did not explain what amounted to “sufficient actions” after the April 21, 2017 letter to permit him to reach the conclusion that there was waiver of delay, but I am required to assess the decision as a whole in an attempt to determine what these could

be. I am satisfied that these were the meetings held on May 2 and May 9 and the positions taken by the parties at each. [ 42 ] Although I have concluded that these could not be characterized as “serious grievance discussions”, it was open to the Arbitrator to consider both the fact that they were held and the positions taken by the parties at each of them. Established Practice [ 43 ] Respecting the established practice between the parties on the timelines between Steps 1 and 3, the only evidence before the Arbitrator had come from Melinda Wade.

The Arbitrator concluded from her testimony that “the timing of Step meetings and the Parties’ responses within the grievance process are often delayed because of the difficulty in finding common available dates…” and that “in this workplace, delay in processing is normally only raised in the context of the filing of a grievance”. However, at page 22 of this Decision he confirmed that Ms. Wade’s testimony acknowledged that “…in movements from step to step in the Grievance procedure, timelines are followed ‘pretty closely’…” [ 44 ] Further, I note that Ms.

Wade’s testimony supported that she was aware of the error she had made. The Employers’ Association relies on this to support their position that the Trades Council knew that

Article 15.09 required adherence to timelines. [ 45 ] The Arbitrator could rely on Ms. Wade’s testimony to support the conclusion that the timing of Step meetings was often delayed.

His conclusion that “none of them have strictly lived the rules which they created on process timing…” and “that relaxed practice is perhaps simply a consequence of reality of a busy project…” is supported by the evidence placed before him, buttressed no doubt by his experience as one of a panel of rotating Arbitrator’s addressing grievances on this Project. [ 46 ] It was clearly established that the Step 2 grievance meeting (which should have been held “within five (5) days” of a written grievance, was not held until almost twelve weeks later on March 2, 2017.

Further, the Contractor was required to “render a decision in writing within one (1) day of the second step meeting” but it was not given until March 6, 2017. The Arbitrator was entitled to rely on these facts as part of his consideration to established practice. Conclusion on Issue 1 - Timelines [ 47 ] The Arbitrator referenced the Authorities cited on the preliminary issue and found one of his own decisions, International Brotherhood Lower Churchill Transmission Construction Employers' Assn.

Inc. and IBEW, Local 1620 (Tizzard), Re , 2018 CarswellNfld 198, 136 C.L.A.S. 26 (NL Arb.) , to be most relevant to the facts before him. The Arbitrator did not consider the preliminary issue in a jurisprudential vacuum. [ 48 ] The deferential standard of reasonableness requires that the reasons be transparent, justifiable and intelligible. The Decision on the Preliminary Issue meets this standard. [ 49 ] The deferential standard also requires that the result fall within a reasonable range of outcomes taking account of the law and the facts.

Here I conclude that the Arbitrator drew a reasonable inference from the uncontradicted evidence placed before him and in particular how the practice of the parties differed from that required by

Article 15.01. [ 50 ] I find the decision on the preliminary issue to meet the reasonableness standard of review. Issue 2 – Did the Employers’ Association have the right to set new qualifications for security personnel? [ 51 ]

Article 5.02 of the Collective Agreement confirms that it is the exclusive function of the Employers’ Association to determine qualifications, skills, abilities and competency of employees. However, this exclusive function is expressly subject to the grievance procedure by virtue of

Article 5.03. [ 52 ] The Arbitrator relied on the Supreme Court of Canada’s decision in Association of Justice Counsel v. Attorney General of Canada , 2017 SCC 55 , at paragraph 47 , for guidance on how arbitrators should interpret collective agreements in a factual context where the

interpretation of management rights is in issue. Therein, Justice Karakatsanis said: 47 …In construing the proper

interpretation of clauses in collective agreements, arbitrators do not make assessments in a vacuum. Rather, they take into consideration the surrounding context and history of labour relations in the industry …. This is particularly true with respect to issues relating to management rights… [ 53 ] In Justice Counsel the

section under consideration required that the employer’s rights be exercised “reasonably, fairly and in good faith”. While this language does not appear in

Article 5.01 of the Collective Agreement in this case, counsel for the Employers’ Association acknowledges that the principles would apply at common law. [ 54 ] The Arbitrator was required therefore to assess whether “the balance struck by” the management directive on enhanced qualifications for new security personnel “was reasonable” and the exercise of management rights was “fair”.

He concluded that the Applicant had breached the Collective Agreement by imposing the qualifications and by directly hiring the workers who had the additional qualifications outside of the Union hiring process. [ 55 ] The hearing took seven days over the period August 15 to November 15, 2017. Once he had stated the Issues, the Arbitrator cited the relevant sections of the Collective Agreement; he listed the Exhibits entered and the witnesses who testified.

Once he had addressed the preliminary issue at pages 12 to 16 of the Decision, the Arbitrator reviewed the key facts on the remaining issues. [ 56 ] He started with the history of the protestors gaining access to the Site on October 22, 2016, at a time when the security personnel were only required to have (in addition to the project’s overall requirement for pre-employment medical, drug and alcohol

testing) the specific credentials which were reflected in Exhibit JR.H1. [ 57 ] He reviewed the evidence of Mr. J. Hennessey that in response to the November 18, 2016 job request from the Employer, four security officers with the standard job qualifications were dispatched from the Union consistent with the referral process established in

Article 7.07(e). [ 58 ] He referenced the fact that on the same date, Mr. David Clark (Senior Labour Relations Advisor, Project Delivery Team) proposed a new “security officer profile” which served to enhance the qualifications and competencies of security personnel and which Mr. Clark indicated his team strongly believed were required as a consequence of the recent protests.

The proposed qualifications required a minimum of ten years’ experience as a law enforcement officer. [ 59 ] The Arbitrator recognized that: • On receipt, concern was immediately expressed in writing that the suggested enhancements would eliminate from consideration for hire, most members of the Union who were on the out-of-work list. • In reply to this concern, the Employer amended the enhanced job qualifications to “a minimum of ten years’ experience as a Security Officer in an industrial setting, and/or the equivalent as a law enforcement officer …”. • Relying on its unilateral decision for enhanced qualifications, on November 18, 2016 the Employers’ next job request for four personnel stated the revised qualifications. • Only one of the Union’s referrals from its out-of-work list, met the enhanced qualifications and it is not disputed that the Employer filled the vacancies by hiring three other persons chosen by the Trades Council without Union referral. [ 60 ] The Arbitrator found that the additional qualifications were not a reasonable response to the October incident, but were reactionary in nature.

Furthermore, the Arbitrator found that the additional qualifications were not rationally connected to the objectives of the Site owner. [ 61 ] The Employers’ Association asserts that instead of addressing the core question, the Arbitrator substituted his own opinion on what qualifications would be more reasonable and, in doing so, approached the matter in a fashion which had been denounced by the Supreme Court of Canada in Association of Justice Counsel . [ 62 ] In drawing his conclusion (that the Employers’ response to the security breach in October 2016 was not proportional and was impulsive), I agree that the Arbitrator did his own assessment of what revised qualifications might be preferable (see pages 35 and 36) which was not informative. [ 63 ] However, the decision of the Arbitrator makes it clear he considered the reasonableness of the qualifications.

He concluded, inter alia, at page 35: To its credit, the Employer recognized that the owner’s initial suggestion that all security forces must have a ten-year policing background was inappropriate, but the enhanced qualifications were still not rationally tied to the need for improved performance of the security personnel onsite. Management’s right to determine workers’ qualifications must be exercised in [a] fair and reasonable manner in all of the surrounding circumstances.

The evidence does not satisfy me that the quality of security service was enhanced in the way that was needed by simply adding long industrial service as a job requirement. Having ten years of industrial experience or a policing background might have been a visceral response to the perceived deficit, but it was not appropriate.

Unless a worker had experience in, or training related to, the control and management of angry citizens improperly on an heavy industrial site in a politically charged environment, the years spent in other industrial venues where that type of incident never occurred would not necessarily be an asset or lead to a better outcome if a breach of border security should happened again at Muskrat Falls. If long experience leads to better performance, the evidence to make that connected did not appear in the hearings.

The problem is that there is in evidence no real connection to meeting the owner’s expressed concerns (i.e., lack of engagement) or the admitted deficits (i.e., communications breakdowns) which the Employer found in those previously hired who held just the basic skill requirements. [ 64 ] I also accept the Employers’ Association’s concern that in his assessment of whether management’s decision to require enhanced qualifications was reasonable and fair, the Arbitrator did not conduct the balancing exercise on the various considerations supported by Justice Counsel .

There is no reference to the nature of the workplace, its location, the impact of the new qualifications on existing employees or the implementation of the policy on a go-forward basis only. However, as previously stated, a reviewing Court is required to supplement reasons before subverting them. [ 65 ] As an experienced Arbitrator qualified to be on the approved list for disputes arising on this Project, addressing a grievance filed four years into the duration of the Project, I accept that the nature of the workplace and its location, were obvious to the Arbitrator.

It was not essential that he stipulate these facts as considerations. [ 66 ] The Arbitration Award confirms that the Arbitrator considered the context and the lack of any evidence from the Employers’ Association supporting a connection between the enhanced credentials and the ability of security personnel to respond to another episode similar to the October 2016 protest (page 35). [ 67 ] Overall, on Issue 2, I am satisfied that in assessing the reasonableness of the new qualifications, the Arbitrator carried out the

task assigned to him, justified his conclusion in a transparent and intelligible manner and that the conclusion reached falls within a range of reasonable outcomes. Issue 3 – Hiring Terrance Hawco and not Mr. Poole The Facts [ 68 ] It is acknowledged that pursuant to

Article 7, first preference on hiring is given to qualified Labrador Innu, followed by qualified Labrador residents, and then qualified Newfoundland residents. All hiring must be done through the Union referral system, including those who are “name-hired” by the particular contractor. [ 69 ] In response to a “name-hire” request for one security worker only (for Terrance Hawco) on March 26, 2017, the Union offered from their list of out-of-work members, Mr. Ross Poole. It is now acknowledged that Mr.

Poole held the enhanced qualifications under management’s new policy and that he was a resident of the island of Newfoundland. However, the Employer hired Mr. Hawco, a Labrador resident who was without a Union referral slip. [ 70 ] The Arbitrator found Mr. Hawco’s hire to be a violation of the Collective Agreement. Enlarging the Scope of the Grievance [ 71 ] The Employers’ Association suggests that the Arbitrator enlarged the scope of the grievance by considering the failure to hire Mr. Poole.

I will address first whether the dispute over the March 26, 2017 request could be embraced within the December 2016 grievance. [ 72 ] As the Trades Council’s Brief confirms, the grievance was broadly stated and ongoing in nature.

In fact, counsel agree that the grievance was properly defined by the Arbitrator as an allegation that the Employer failed to hire members of the Union as required under the Project Agreement by setting out unreasonable qualifications for the employment of security officers. [ 73 ] The Trades Council argues that no deviation exists between the grievance as initiated and the grievance as litigated because the issue of workers (security officers) being improperly hired was the focus of the hearing.

I agree with this broad characterization of the scope of the grievance. [ 74 ] I also note that although the March 26, 2017 request came after the grievance had been filed, evidence concerning it was presented before the Arbitrator and neither side objected. Further, the Employers’ Association did not object to the scope of the grievance when the evidence was presented at the Arbitration hearing itself.

I agree therefore that this would foreclose the possibility of the Employers’ Association raising this issue as grounds for judicial review. [ 75 ] I accept therefore, on these facts, that the grievance was broad enough to have included events that subsequently occurred and that the Arbitrator had jurisdiction to address the issue. The Hiring Preference [ 76 ] I turn now to the preferential hiring provisions of the Collective Agreement. [ 77 ] At pages 4 to 6 of his Decision the Arbitrator cited

Article 7 of the Collective Agreement and at page 8, the appropriate

section of the Memorandum of Understanding as follows:

Article 7 Hiring Provisions 7,1 The Parties agree that creating a sustainable and flexible workforce will benefit the Council of Unions and ensure there is a significant workforce in Newfoundland and Labrador with the ability to obtain workers from Atlantic Canada and other parts of Canada to support Project construction. 7.2 The Parties agree to ensure compliance with the Gender Equity and Diversity obligations regarding hiring of females and persons from underrepresented groups as specified by the Benefits Strategy or any employment equity plan that may be applicable to the hiring of qualified Labrador Innu, to be hired or referred in the following order of priority: (

i) Qualified Labrador Innu; (ii) Qualified resident of Labrador; and

(iii) Qualified residents of Newfoundland. 7.3 In order to meet the obligations applicable to the hiring and retention of qualified Labrador Innu and obligations contained within the Benefits Strategy, the Parties agree that all Project partners, including the Association, its Contractor members, the Council of Unions and its Union members will work proactively and progressively to advance the participation and integration in the areas of employment, training and apprenticeship for all employees/groups under

Article 7.02 above. 7.4 (omitted) 7.5 (omitted) 7.6 (omitted) 7.7 The Parties agree to adhere to the following hiring procedure:

a) Each Contractor may name hire or select all forepersons and general forepersons from the Union’s out-of-work list;

b) All workers name hired, selected or referred shall be from the appropriate Union’s out-of-work list; for those Innu referenced in

Article 7.02 there is no requirement for them to be on the out-of-work list;

c) The first worker shall be appointed by the Union who may be appointed as the Shop Steward, with the next five (5) workers being name hired or selected by the Contractor for the Union’s out-of-work list and the next five (5) workers being referred by the Union;

d) All remaining hires shall be dispatched on a fifty/fifty (50/50) basis with the Contractor selecting the first worker and the Union referring the next and so on thereafter. The Shop Steward(

s) will be appointed from the Union’s referrals’

e) i) All hiring will be done through the Union office, and no one will be employed unless they are in possession of a referral slip from the Union office, which must be presented and approved by a Council of Unions Site Representative and/or Shop Steward prior to commencing work unless provided otherwise in this Agreement. ii) In the event that a prospective worker is given a dispatch slip and has completed the reasonable requirements for hire, they shall report to work as soon as practicable.

In the event the Contractor is not ready to engage the prospective worker within fourteen (14) days of the dispatch, the worker may return the dispatch slip and become available to other Contractors. 7.8 (omitted) 7.9 If the Union is unable to supply the workers required within seventy-two (72) hours or such other time as may be initially agreed by the Association and the Council of Unions, from the date requested, exclusive of Saturdays, Sundays and holidays, the Contractor may hire from other sources.

Each worker hired from other sources will be governed by the terms and conditions of this Agreement and shall be represented by the Union and pay initiation fees, dues and other assessments upon and after hiring as per

Article 6. 7.10 The Council of Unions recognizes the Contractor’s right to evaluate all persons to determine their level of competency, qualifications and physical and medical fitness to perform the required work. …

MEMORANDUM OF UNDERSTANDING Re: Application of Hiring Priority –

Article 7 THE PARTIES AGREE workers shall be dispatched in the following order of priority: (

i) Qualified Labrador Innu; (ii) Qualified residents of Labrador who are members of the RDTC; (iii) Qualified residents of Labrador; (iv) Qualified residents of the Island of Newfoundland who are resident members of the RDTC, and (

v) Qualified resident of the Island of Newfoundland In hiring and making referrals, both the Contractor and the Union members of the RDTC will comply with the Benefits Strategy and any employment equity plan that may be applicable to qualified Labrador Innu. [ 78 ] Exhibit JRH-6 from the Arbitration confirms that Mr. Hawco was a ‘name-hire’ with a Labrador address. The Employers’ Association submits therefore that Articles 7.07(

a) and 7.07(e)(

i) mandated the Union to issue a referral slip for Mr. Hawco and not Mr. Poole. [ 79 ] The Trades Council, in response, suggests that it was not the issue of residency that determined who was hired for this single position. At the bottom of page 39 of his decision, the Arbitrator concluded that the evidence before him had not been clear about the basis for which the Employers’ Association had endorsed Mr. Hawco as the successful candidate. He concluded that what was established was that the Union did not issue a referral slip for Mr. Hawco but that the contractor hired him directly without waiting the 72 hours for a referral which was a necessary pre-condition to all hiring under

Article 7.09 of the Collective Agreement. [ 80 ] I acknowledge a discrepancy between conclusions made at page 13 and 39 of the Arbitrator’s Decision. In the first reference he acknowledged that Mr. Poole had a qualifying police background and thus met the new management directive whereas, at page 39, summarizing the evidence of Mr. Quinton, he determined that the rejection of Mr. Poole was based on the fact that he did not meet the ten-year experience qualification.

Here he relied on the testimony of the owner of Speuata Security. [ 81 ] Since the Arbitrator had, on Issue 2, determined that the enhanced qualifications were a violation of management’s rights under the Project Agreement, he could not permit the Employers’ Association to rely on the lack of enhanced qualifications to support its decision to reject Mr. Poole. Whether Mr. Poole was in fact qualified is immaterial; what is relevant to the reasonableness standard of review is that the Arbitrator did not make a finding on Mr. Poole’s qualifications, but made a finding that the Employer “believed” Mr.

Poole was unqualified. It is now acknowledged that Mr. Poole and Mr. Hawco each met the enhanced qualifications. [ 82 ] The Arbitrator also addressed whether the Employers’ Association had made it clearly known to the Trades Council or the Union that Mr.

Hawco was a Labrador preference hire and concluded that despite Exhibit JRH-6, identifying Terrance Hawco as a ‘name-hire’ request with a principal residence in Churchill Falls, there was uncertainty respecting whether his residency had been made clearly known to the Union or to the Trades Council as the reason for his preferential hiring. [ 83 ] Finally, the Arbitrator addressed whether the hiring of Mr. Hawco violated

Article 7.9 of the Collective Agreement, as the 72 hour period was ignored in hiring outside of the union hiring hall. In doing so, he noted three requirements: (1) all referrals are to be from the Union, (2) direct hires could not be made until after 72 hours have elapsed, and (3) the hiring priority applies. [ 84 ] The Employers’ Association admits that the 72 hours were not honoured but suggests that this breach of the Collective Agreement can be overlooked because the person hired happened to be from Labrador. [ 85 ] The Arbitrator’s reasoning on this issue is at pages 39 to 40.

He noted that the Employer had not grieved the Union’s decision (not to refer Terrance Hawco) and that the evidence presented had not supported that the Employer was in fact entitled to a ‘name-hire’ for Mr. Hawco under

Article 7.7(

d) because he was not a Union member. His reasoning is transparent and intelligible. [ 86 ] The Arbitrator’s conclusion that the Employer had hired Terrance Hawco without the Union referral which referral was a pre- condition of

Article 7.07 of the Collective Agreement, also meets the standard of reasonableness. conclusion [ 87 ] The Arbitrator’s Decision meets the standard of judicial review.

_____________________________ Gillian D. Butler Justice