2012 NBCA 60, 2012 NBCA 60

COURT OF APPEAL OF COUR D’APPEL DU NEW BRUNSWICK NOUVEAU-BRUNSWICK 167-11-CA HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF NEW BRUNSWICK, as represented by Board of Management on behalf of the Department of Natural Resources APPELLANT SA MAJESTÉ LA REINE DU CHEF DE LA PROVINCE DU NOUVEAU-BRUNSWICK, représentée par le Conseil de gestion pour le compte du ministère des Ressources naturelles APPELANTE - and - - et - PETER PINDER and NEW BRUNSWICK UNION OF PUBLIC AND PRIVATE EMPLOYEES RESPONDENTS PETER PINDER et le SYNDICAT DES EMPLOYÉ(E)S DES SECTEURS PUBLIC ET PRIVÉ DU NOUVEAU-BRUNSWICK INTIMÉS Her Majesty the Queen as represented by the Board of Management on behalf of the Department of Natural Resources v.

Pinder and New Brunswick Union of Public and Private Employees, 2012 NBCA 60 Sa Majesté la Reine du chef de la Province du Nouveau-Brunswick, représentée par le Conseil de gestion pour le compte du ministère des Ressources naturelles c.

Pinder et le Syndicat des employé(e)s des secteurs public et privé du Nouveau-Brunswick, 2012 NBCA 60 CORAM: The Honourable Justice Robertson The Honourable Justice Quigg The Honourable Justice Green CORAM : L’honorable juge Robertson L’honorable juge Quigg L’honorable juge Green Appeal from a decision of the Court of Queen’s Bench: November 4, 2011 Appel d’une décision de la Cour du Banc de la Reine : Le 4 novembre 2011 History of Case: Historique de la cause : Decision under appeal: 2011 NBQB 310 Décision frappée d’appel : 2011 NBBR 310 Preliminary or incidental proceedings: N/A Procédures préliminaires ou accessoires : s.o.

Appeal heard: May 17, 2012 Appel entendu : Le 17 mai 2012 Judgment rendered: July 12, 2012 Jugement rendu : Le 12 juillet 2012 Reasons for judgment by: The Honourable Justice Robertson Motifs de jugement : L’honorable juge Robertson Concurred in by: The Honourable Justice Quigg The Honourable Justice Green Souscrivent aux motifs : L’honorable juge Quigg L’honorable juge Green Counsel at hearing: For the appellant: Keith Mullin For the respondents: Leigh Sprague Avocats à l’audience : Pour l’appelante : Keith Mullin Pour les intimés : Leigh Sprague THE COURT The appeal is dismissed with costs of $2,500.

LA COUR L’appel est rejeté avec dépens qui sont fixés à 2 500 $. The judgment of the Court was delivered by ROBERTSON J.A. [ 1 ] This is the first of two appeals focusing on whether the “seniority” and “bumping” provisions of a collective agreement conflict with terms of employment prescribed by the Civil Service Act, S.N.B. 1984, c. C-5.1. If there is a conflict, the Act prevails pursuant to s. 63(2) of the Public Service Labour Relations Act , R.S.N.B. 1973, c. P-25.

Section 63(2) states no collective agreement shall, directly or indirectly, establish a new term of employment, or alter or eliminate a term of employment as set out in provincial legislation . The issue arose in the context of government employees whose services were no longer required because of a “discontinuance of function” and were subsequently “laid off”. Although the Civil Service Act and its Regulations make no reference to seniority and bumping rights, the adjudicator was able to harmonize the provisions of the collective agreement with those of the legislation and to conclude there was no conflict.

The so-called “harmonization principle” embraces the understanding of a presumption of coherence between the provisions of the collective agreement and the Civil Service Act . In other words, an

interpretation that avoids conflict is preferred to one that does not. There being no conflict, the adjudicator ruled the appellant employer erred in reassigning the employees to positions within the civil service without complying with the provisions of the collective agreement. [ 2 ] Applying the review standard of reasonableness, the application for judicial review was dismissed. The employer continues to argue that the adjudicator’s decision cannot stand because the jurisprudence of this Court has already rejected the harmonization principle or, alternatively, the principle is incompatible with s. 63(2) of the Public Service Labour

Relations Act . [ 3 ] I conclude the jurisprudence of this Court cited by the employer does not support its argument. Moreover, I conclude there is nothing unreasonable about the adjudicator’s decision to adopt the harmonization principle or in its application. In brief, the principle is not incompatible with s. 63(2) of the Public Service Labour Relations Act . Rather, the principle is a logical extension of the principle of coherence which is applied in the context of an apparent inconsistency between two legislative enactments.

The following analysis expands upon my abbreviated reasons for dismissing this appeal. [ 4 ] The appeal involves seven unionized employees whose positions as “coordinators” were eliminated after the Department of Natural Resources discontinued the government program for which their services were required. The employees were laid off but reassigned to vacant positions within the Department, in accordance with the provisions of the Civil Service Act . Both the respondent employee and union filed grievances on the ground the reassignments were in violation of

Article 17 of the collective agreement.

Article 17 deals with layoffs, seniority and bumping rights. The grievors argued the affected employees were not given any option or choice as to which positions they would be assigned, nor were they given the opportunity to bump into other positions held by junior employees in the bargaining unit. In response, the employer maintained the provisions of

Article 17 conflicted with the provisions of the Civil Service Act and, therefore, the Act prevailed because of s. 63(2) of the Public Service Labour Relations Act . The grievors countered by arguing the seniority/bumping rights granted under the collective agreement were “additional” to those found in the Civil Service Act . [ 5 ] The adjudicator’s formal analysis expresses the overarching issue in terms of whether the provisions of the collective agreement, dealing with seniority and bumping rights, could be harmonized with those of the Civil Service Act . While acknowledging that

Article 17 conflicted with the merit principle set out in s. 6(1) of the Civil Service Act, the adjudicator concluded the rights granted under the collective agreement were consistent with s. 3 of the Exclusions Regulation – Civil Service Act , N.B. Reg. 84-230 , adopted under s. 28 of the Civil Service Act . It is s. 3(

b) and (

c) of the Exclusions Regulation that expressly dispenses with the merit principle set out in s. 6 of the Civil Service Act . The adjudicator also ruled that s. 9 of the Board of Management General Regulation – Civil Service Act , N.B. Reg. 84-229 , does not prohibit the application of the seniority provisions found in

Article 17, prior to any final determination as to which employee is to be laid off. This led the adjudicator to conclude it was possible to harmonize the provisions of the collective agreement with the Civil Service Act without defying s. 63(2) of the Act . The grievances were allowed, with the adjudicator retaining the jurisdiction to deal with matters of implementation. [ 6 ] The judicial review application was dismissed on the basis the adjudicator’s decision met the deferential review standard of reasonableness: see PNB v. Pinder et al . , 2011 NBQB 310 , [2011] N.B.J. No. 417 (QL).

The application judge noted the adjudicator’s decision set out the agreed statement of facts, the relevant statutory provisions and those of the collective agreement, together with the arguments of both parties and an analysis which addressed those arguments. The application judge also noted the adjudicator's decision referenced all of the relevant jurisprudence, including those cases which clearly establish that the legislation prevails if there is a conflict between it and the collective agreement.

The application judge went on to find the adjudicator’s reasons to be “clear and thorough” and his conclusion “justified, transparent and intelligible” (para. 28). [ 7 ] I must first dispel the notion that judicial review of an adjudicative tribunal’s decision embraces a two-step process: a review of the reasons for sufficiency and a review which focuses on the reasonableness of the result. As explained by this Court in Small v. New Brunswick Liquor Corporation , 2012 NBCA 53 , [2012] N.B.J. No. 206 (QL), the Supreme Court recently rejected this approach in Newfoundland and Labrador Nurses’ Union v.

Newfoundland and Labrador (Treasury Board) , 2011 SCC 62 , [2011] 3 S.C.R. 708. Abella J., writing for a unanimous Court, held that the adequacy of reasons is not a standalone basis for quashing a decision and that Dunsmuir does not stand for the proposition that a reviewing court must undertake two discrete analyses: one for the reasons and one for result. Instead, the reasons must be read together with the outcome for the purpose of determining whether the result falls within the range of possible outcomes. [ 8 ] For greater certainty, it is prudent to canvass other aspects of the deference doctrine.

At first blush, the question of whether the provisions of the collective agreement conflict with those of the Civil Service Act would appear to be one of fact. However, as the answer to the question ultimately hinges on the

interpretation of the Act ’s Regulations, the underlying issue is truly a question of law. As adjudicators appointed under the Public Service Labour Relations Act are deemed to possess an institutional expertise in labour matters, their interpretative rulings are generally owed deference. This proposition is true irrespective of whether the tribunal’s home statute contains a privative clause: see generally Canada (Citizenship and Immigration) v. Khosa , 2009 SCC 12 , [2009] 1 S.C.R. 339, at para. 25 ; and Small at paras 21-22 .

The general rule is that deference is owed to an adjudicative tribunal’s interpretative decisions, provided the interpretative issue involves the tribunal’s home statute, a statute which is closely connected to its functions, or the issue involves the terms of a contractual document, such as a collective agreement, which falls within the adjudicative tribunal’s mandate. Deference is also owed in cases where the adjudicative tribunal has developed an institutional expertise in the application of a general common law or civil rule in relation to a specific statutory context.

Rounding out the deference doctrine is the proposition that deference is owed to an adjudicative tribunal’s findings of fact and findings of mixed law and fact. Of course, that proposition applies equally in the civil law context, except that the standard is expressed in terms of “palpable and overriding error” rather than “reasonableness”.

[9] With respect to issues involving a pure question of law, there are few instances in which thegeneral rule of deference is not applicable. Deference will not be granted to the rulings of lay tribunals, such as the Appeals Tribunalestablished under the Workplace Health, Safety and Compensation Commission, S.N.B. 1994, c. W-14: Canada Post Corporation v.Carroll and Workplace Health, Safety and Compensation Commission of New Brunswick, 2012 NBCA 18, 383 N.B.R. (2d) 326.

Theexceptional category also consists of constitutional and jurisdictional issues together with general questions of law that are both of centralimportance to the legal system as a whole and outside the adjudicator’s specialized area of expertise. A cautionary note is required withrespect to the exception applicable to jurisdictional issues.

The Supreme Court has ruled there is a presumption against interpretativerulings being classified as jurisdictional (a recognized exception to the presumption arises where the issue could be decided by one oftwo competing specialized tribunals): Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association, 2011 SCC 61,[2011] 3 S.C.R. 654.

As to whether a statute is closely related to the adjudicative tribunal’s home statute, see The City of Saint John v.Saint John Firefighters’ Association, International Association of Fire Fighters, Local 771, 2011 NBCA 31, 371 N.B.R. (2d) 247. [10] Having accepted that deference is owed to the adjudicator’s interpretative decision, one wouldthink the pivotal issue is whether his

interpretation falls within the reasonableness category. However, another standard of review issuemust be addressed. It could be asked whether the adjudicator’s interpretative approach, that is to say the adoption of the harmonizationprinciple, is subject to the correctness standard. The argument would be framed in terms of adjudicator having no relative expertiseregarding the principles of contractual or statutory

interpretation and, therefore, the adjudicator’s decision to adopt the harmonizationprinciple should be subject to the correctness standard. [11] In my view, the review standard cannot be correctness for two reasons. First, it cannot be saidthat the harmonization principle is of central importance to the legal system as a whole and outside the adjudicator’s specialized area ofexpertise. Second, the Supreme Court’s relatively recent decision in Nor-Man Regional Health Authority Inc. v.

Manitoba Association ofHealth Care Professionals, 2011 SCC 59, [2011] 3 S.C.R. 616, permits adjudicative bodies to modify common law and equitableprinciples to respond to the exigencies of the administrative law framework. Let me explain. In Nor-Man, a labour arbitrator held thatalthough the employer had been breaching a term of the collective agreement, the union was estopped from asserting its strict legal rightsbecause of its “long-standing” failure to grieve the matter.

The application for judicial review was dismissed, but the Manitoba Court ofAppeal applied the correctness standard and concluded the arbitrator erred in his application of the doctrine of promissory estoppel. TheSupreme Court restored the arbitrator’s decision after establishing that the proper standard of review was reasonableness.

The Court heldthat labour arbitrators are not legally bound to apply equitable and common law principles in the same manner as courts of law, butrather are entitled to adapt legal and equitable doctrines they find relevant in the particular context: To this end, they may properly develop doctrines and fashion remedies appropriate in their field, drawing inspiration from general legalprinciples, the objectives and purposes of the statutory scheme, the principles of labour relations, the nature of the collective bargainingprocess, and the factual matrix of the grievances of which they are seized. [para. 45] [12] In my view, the adoption of the harmonization principle falls within the framework articulatedin Nor-Man.

The reference to the adjudicative body “drawing inspiration from general legal principles” in developing, modifying orreforming such principles to respond to issues arising in the unionized employment context is particularly apt in the present case. I saythis because the harmonization principle is a logical extension of the coherence principle discussed in textbooks on statutoryinterpretation. The coherence principle involves the presumption that the provisions of legislation are meant to work together. As LaForest J. wrote in Friends of the Oldman River Society v.

Canada (Minister of Transport), (SCC), [1992] 1 S.C.R. 3,[1992] S.C.J. No. 1 (QL): “[T]here is a presumption that the legislature did not intend to make or empower the making of contradictory enactments” (para. 42). In Sullivan on the Construction of Statutes, 5th ed. (Markham, Ont.: LexisNexis, 2008), Professor Sullivandiscusses the strategies which the courts have adopted for achieving coherence, including the option of adopting a strained orimplausible

interpretation, so long as it avoids the apparent conflict (see pp. 338-340). However, the coherence and harmonizationprinciples differ in at least one material respect. The harmonization principle cannot trump the legislative imperative found in s. 63(2) ofthe Public Service Labour Relations Act. If there is a conflict between a provision of a collective agreement and the Civil Service Act, thelatter prevails. [13] Although I am convinced the decision to adopt the harmonization principle is owed deference,the policy reasons underscoring the adjudicator’s decision on this point warrant consideration.

The adjudicator began his reasoningprocess with an acknowledgement of the importance of the seniority and bumping provisions of a collective agreement. Quoting fromTung-Sol of Canada Ltd. v. United Electrical, Radio and Machine Workers of America, Local 512 (Collective Agreement Grievance),[1964] O.L.A.A.

No. 9 (QL), the adjudicator wrote that those provisions are seen as: “one of the most important and far-reachingbenefits which the trade union movement has been able to secure for its members by virtue of the collective bargaining process.” To thismay be added the realization that the implied obligation on parties to negotiate their collective agreements in good faith has its genesis inthe provisions of the Public Service Labour Relations Act.

The Province as employer must abide by that obligation in the knowledge ofthe prohibition against agreeing to provisions that would conflict with the terms and conditions of employment prescribed under the CivilService Act. Yet the Province continues to enter into collective agreements which contain provisions covering seniority and bumpingrights for its unionized civil servants. In these circumstances, it is reasonable for adjudicators to infer that the Province must be taken tohave negotiated those rights on the basis they had meaning and could be enforceable. This is not to suggest that that their negotiation

works an estoppel on the Province such that it negates the legal impact of s. 63(2) of the Public Service Labour Relations Act. [14] Any doubt as to the reasonableness of the adjudicator’s decision to adopt the harmonizationprinciple is dispelled with his acknowledgment that harmonization is not possible unless there is ambiguity in the Civil Service Act or itsregulations. The adjudicator referred to and quoted from one of his earlier arbitral decisions where this condition precedent wasacknowledged. As he wrote in Wilson v. New Brunswick (Department of Advanced Education and Labour), [1997] N.B.L.A.A.

No. 32(QL): An adjudicator is not free to ignore the existence of legislation which may be in conflict with a collective agreement but in resolving anyambiguity it must be seen as implied that the parties intended it to be interpreted, where possible, in a way that allows the collectiveagreement to exist in tandem with such legislative provisions. [para. 24] [15] In

summary, the harmonization principle tells adjudicators that where there is ambiguity in theCivil Service Act, there is a presumption of coherence with the provisions of the collective agreement. In other words, an

interpretationthat avoids conflict is preferred to one that does not. However, if there is no ambiguity, there can be no harmonization or attempt atharmonization. And the ambiguity must be real and not imagined. [16] The employer maintains the adjudicator’s decision to adopt the harmonization principle fails tomeet the deferential standard of review because it is inconsistent with earlier arbitral awards and the jurisprudence of this Court. Theemployer seizes on an earlier arbitral decision which conflicts with the adjudicator’s interpretative decision: New Brunswick GovernmentEmployees Union v.

New Brunswick (unreported, Arbitrator William Matthews, June 7, 2001). That arbitral decision also involved theapplication of the seniority and bumping provisions of a collective agreement in the context of layoffs within the civil service of NewBrunswick. Those provisions were held to be in conflict with the Civil Service Act and there was no attempt at harmonization, let aloneadoption of such a principle. In these circumstances, the employer alludes to the application of the correctness standard to resolve theambiguity generated by what it considers to be two conflicting arbitral decisions.

The employer also argues the adjudicator was bound bythe earlier precedent unless he was able to demonstrate to that the earlier case was “clearly wrong”. This argument hinges on this Court’sdecision in CUPE, Local 1188 and LeBlanc v. Town of Sackville, 2007 NBCA 18, 313 N.B.R. (2d) 147. [17] I have two reasons for rejecting the employer’s argument that the adjudicator was bound by theearlier precedent of Arbitrator Matthews. First, the ruling of this Court in Town of Sackville applies only to those cases involving thesame parties and the same collective agreement. Those are not the facts of the present case.

My second reason is an affirmation of theadjudicator’s reasoning. The adjudicator properly noted the earlier decision did not deal with the legal effect of s. 28 of the Civil ServiceAct or s. 3 of its Exclusions Regulation and, therefore, the legal principle articulated by this Court in Town of Sackville had noapplication. No adjudicative body is bound by an earlier decision that, for some unknown reason, failed to deal with legislation that wasrelevant to the underlying determination.

Even the common law tenets of the stare decisis doctrine have long recognized the non-bindingeffect of per incuriam appellate decisions. [18] The employer also argues that the adjudicator’s adoption of the harmonization principle runscontrary to what was decided by this Court in Petts and Canadian Union of Public Employees, Local 1251 and New Brunswick CouncilProvincial Institutional Unions v. New Brunswick (1984), (NB CA), 58 N.B.R. (2d) 68, [1984] N.B.J. No. 312 (C.A.)(QL) (“Petts”) and New Brunswick v. Canadian Union of Public Employees, Local 1190 and Allain (1984), (NB CA),56 N.B.R. (2d) 114, [1984] N.B.J.

No. 234 (C.A.) (QL) (“Allain”). In my opinion, the two appellate decisions do not support theemployer’s argument for several reasons. First, the cases were decided at a time when deference was not being granted to theinterpretative decisions of labour adjudicators in this province when those decisions involved a pure question of law. The reasons fordecision in both cases do not even allude to the notion of deference to the adjudicator’s decision. Correctness was the presumed standardof review. Second, neither case involved the

interpretation of the Regulations adopted under the Civil Service Act. Moreover, there is aready explanation for this omission. The Regulations were originally adopted in September of 1984, after the adjudicators’ decisionswere rendered and after the applications for judicial review had been heard in the Court of Queen’s Bench. My third reason turns on thefacts of each case. My thesis is not complex: In neither case does this Court reject the harmonization principle. [19] In Allain, the grievor entered into a competition for a promotion but lost out to anotheremployee with less seniority.

The collective agreement provided that in cases where the requisite qualifications and ability of theapplicants was “deemed to be relatively equal”, the employee with the greatest seniority was entitled to preference. The grievor believedhe was entitled to the position on the basis of that provision. However, the Civil Service Act stated selection was to be based on merit. Ina preliminary ruling, the adjudicator held he possessed the jurisdiction to hear the grievance, notwithstanding s. 63(2) of the PublicService Labour Relations Act. That decision was upheld on judicial review.

The Court of Appeal reversed and quashed the adjudicator’sdecision. The Court held that applying the seniority provision of the collective agreement would effectively override the merit principleadopted in the Civil Service Act, something which no adjudicator could do. The adjudicator in the present case held the Court’s decisionwas reflective of the reality that in that case: “[h]armonization of the provisions of the Civil Service Act and the collective agreement wasnot possible.” I agree.

[20] Petts was a case in which s. 26(1) of the Civil Service Act was pitted against a provision of acollective agreement.

Section 26 of the Act, as it then read and as it presently reads, states an employee ceases to be an employee whenlaid off. However, the collective agreement stated that the employment would cease twelve months after the layoff. In short, this Courtheld the provisions conflicted, contrary to the ruling of the application judge. In his reasons for decision, found at (NB KB), 55 N.B.R. (2d) 351, [1984] N.B.J.

No. 208 (Q.B.) (QL), Hoyt J. (as he then was) wrote: I do not see the issue here as being a question of whether or not a statute overrides the collective agreement but rather one of a scheme oflabour relations which involves two statutes and a collective agreement. Regard must be had for all three. Rather than picking out asection here or there one must first see if the three can be harmonized without doing violence to the statutory provisions. [para. 9] [21] The employer argues the effect of the Court of Appeal decision was to overrule theinterpretative approach which Hoyt J. had articulated.

With respect, I disagree. The Court of Appeal ultimately held the terms andconditions of employment imposed under the Civil Service Act must prevail, as the provisions of the collective agreement could not beharmonized with the Act except by altering its provisions. This led the Court to observe that: “The alteration required to harmonize themis not permitted by s. 63(2)(

b) of the Public Service Labour Relations Act” (para. 5). But nowhere in the seven paragraph decision of theCourt of Appeal do I see an express rejection of Hoyt J.’s interpretative approach. In my view, the precedential significance of Allain andPetts must be restricted to the simple proposition that where there is a conflict between a provision of the Civil Service Act and aprovision of the collective agreement, the Act prevails because of s. 63(2) of the Public Service Labour Relations Act. [22] In this case, the adjudicator held that

Article 17 of the collective agreement came within s. 3 ofthe Exclusion Regulation, which dispenses with, for example, the merit principle set out in s. 6(1) of the Civil Service Act. No argumentwas advanced that the adjudicator’s interpretative analysis was somehow flawed or that the wording of the Regulations admitted of noambiguity, thereby moving his decision from the reasonable to unreasonable category. [23] Accordingly, I would dismiss the appeal with costs of $2,500. ____________________________________ J.T. ROBERTSON, J.A. WE CONCUR: ____________________________________ KATHLEEN A. QUIGG, J.A. _____________________________________ BRADLEY V. GREEN, J.A.