NEWFOUNDLAND v. LABRADOR, 2012 NLCA 81

Date: 20121221 Docket: 10/84 Citation: Newfoundland and Labrador (Eastern Residential Support Board) v. Newfoundland and Labrador Association of Public and Private Employees, 2012 NLCA 81 IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR COURT OF APPEAL BETWEEN: NEWFOUNDLAND AND LABRADOR ASSOCIATION OF PUBLIC AND PRIVATE EMPLOYEES APPELLANT AND: HER MAJESTY THE QUEEN IN RIGHT OF NEWFOUNDLAND AND LABRADOR, as represented by the NEWFOUNDLAND AND LABRADOR HEALTH BOARDS ASSOCIATION (EASTERN RESIDENTIAL SUPPORT BOARD) RESPONDENT Coram: Green C.J.N.L., Rowe and Harrington JJ.A.

Court Appealed From: Supreme Court of Newfoundland and Labrador, Trial Division (General), 200901T5110 Appeal Heard: September 14, 2012 Judgment Rendered: December 21, 2012 Reasons for Judgment by Harrington J.A. Concurred in by Green C.J.N.L. and Rowe J.A. Counsel for the Appellant: Sheila H. Greene Q.C. Counsel for the Respondent: Stephen F. Penney Harrington J.A.:

[ 1 ] This is an appeal from a decision dismissing an application for judicial review by the appellant union (Union) of a decision by a sole labour arbitrator. The arbitrator upheld a preliminary objection of the employer, the Eastern Residential Support Board (Board), claiming that the Union was estopped from resiling from the terms of a work force restructuring plan (plan) agreed upon by the Board and the Union. The implementation of the plan led to the termination of the employment of one member of the bargaining unit.

His grievance claiming wrongful termination gave rise to the preliminary objection. [ 2 ] For the reasons which follow, the appeal by the Union is allowed in part. The decision of the applications judge upholding the arbitrator’s decision to apply the doctrine of estoppel as requested by the Board on a preliminary objection is affirmed. The disposition by the applications judge affirming the arbitrator’s dismissal of the employee’s grievance against termination of employment is set aside. The individual grievance is remitted to a new arbitrator for a hearing and disposition.

BACKGROUND [ 3 ] The Board is a support agency which provides support for disabled persons. In 2004 it conducted a review of its operations and decided to implement a transitional program, the result of which would be a reduction in the total number of hours worked by employees of the Board. [ 4 ] The Board kept the Union apprised of its plans by way of memos.

It was made clear that the Board was attempting to decrease the number of part-time workers by transferring hours from one or more units to new permanent full-time workers who had previously been part-time workers. [ 5 ] These issues were also discussed at labour-management committee meetings. The minutes of the meetings indicate that the Union was apprised of the plan and agreed to it.

It did not file any grievances as a result of the issues raised at the meetings. [ 6 ] The minutes of the labour-management committee meeting of September 7, 2005 (exhibit MC #4) which were before the arbitrator and co-signed by the Union representative in attendance at the meeting (found by the arbitrator to constitute some of the terms of the plan), stated: Employees must accept these hours offered unless they can show just cause why they cannot.

It is the employers position that the only obvious reasons for just cause would be other employment of longer duration , or a medical condition that prevented them from accepting. [1] (Emphasis added.) [ 7 ] Only one person filed a grievance as a result of the implementation of the restructuring, Mr. Hale. He had been a permanent teacher in separate unrelated employment and also worked 20 hours biweekly as a permanent part-time employee with the Board. When he refused to accept permanent full-time status, he was laid off. [ 8 ] The grievance itself was an individual grievance of Mr.

Hale and not a group or policy grievance. It set out two grounds, and sought the grievor’s return to permanent part-time employment along with all pay and benefits for all shifts missed. The first ground claimed that the grievor was dismissed without just cause.

The second ground alleged that the plan discussed between the Union and the Board related only to the Union’s waiver of the Board’s obligation to post notices of vacant positions in the work place. [ 9 ] The decision of the arbitrator was summarized by the applications judge as follows: THE AWARD [5] In his decision, the arbitrator set out the provisions of the collective agreement dealing with the labour management committee and the jurisdiction of an arbitrator: 9.01 It is agreed that representatives of both the Employer and the Association will meet as the need arises, but in any event no greater

than once per month unless mutually agreed otherwise, to discuss the following general matters: (

a) promoting safety and sanitary practices; (

b) reviewing suggestions from employees, questions of working conditions and service; (

c) other problems and matters of mutual interest which affect the relationship which are not properly the subject matter of a grievance or negotiations. 9.02 These meetings shall not supersede the activities of any other Committee of the Association or of the Employer and shall not bind either the Association or its members or the Employer to any decisions or conclusions reached during discussions . [my underlining] 8.04 Decision of the Board The decision of the majority shall be the decision of the Board. Where there is no majority decision, the decision of the Chairperson shall be the decision of the Board.

The decision of the Board of Arbitration shall be final, binding and enforceable on all parties, and may not be changed. The Board of Arbitration shall not have the power to change this Agreement or to alter, modify or amend any of its provisions.

However, the Board shall have the power to dispose of a grievance by any arrangement which it deems just and equitable. [6] He then summarized the positions of the parties. [7] The employer’s position: The basic thrust of the argument of the employer is that it proceeded with its plans for the reorganization of the group home with the full knowledge, consent and participation of the union. This reorganization cost the employer in terms of staff time for the planning and the implementation of a work plan whereby more bargaining unit employees were employed on a full-time basis.

If the grievance of this grievor is permitted, the employer will, as well, suffer financially from the settlement of his claim for payment of all shifts which the grievor has missed since the implementation of the plan. [8] The union’s position: The union, on the other hand, argues that the union made no representations to the employer that it could rely upon. If any representations were made it would of necessity have been the results of the labour-management liaison committee.

Article 9.02 specifically states that these meetings shall not bind either the Association or its members or the employer to any decisions or conclusions reached during their discussions. Therefore, it is argued, the employer is not justified in relying upon those minutes and the arbitrator has no authority, pursuant to the provisions of

article 8.04 “to change this Agreement or to alter, modify or amend any of its provisions”. [9] The arbitrator continued: Given the wording of

article 9.02 combined with the wording of

article 8.04, unless the doctrine of estoppel is applied it would seem that the undersigned is powerless to grant relief to the employer. Can the doctrine of estoppel be applied to the fact situation in this case? [10] The arbitrator then set out his understanding – based on a recognized labour law text – of the general law of estoppel; essentially, that it is a rule of evidence that prevents the unfair raising of grounds that would otherwise support a claim. The award quotes directly from the text:

Much has been written about the doctrine of estoppel as it applies in the labour relations context. In Canadian Labour Arbitration, Brownand Beatty (Canada Law Book) at

section 2:2200 of the loose leaf edition the following appears: The statutory basis of an arbitrator’s jurisdiction is generally limited to determining disputes ‘arising from the

interpretation, application,administration or alleged violation of the agreement’. As well, collective agreements often define the arbitrator’s jurisdiction in similarterms, and they expressly state that the arbitrator shall have no power to add to, vary or amend the collective agreement or to make adecision that is inconsistent with its terms. Because it has been suggested that the effect of the doctrine of estoppel is to prevent oneparty from relying upon the strict terms of the collective agreement, at one time doubt was expressed as to its application.

However, andalthough the matter has not as yet been conclusively determined by the Supreme Court of Canada, courts and arbitrators are nowgenerally of the view that arbitrators do have jurisdiction to apply the doctrine. While some arbitrators’ justification for invocation of thedoctrine of estoppel is that it simply gives effect to the parties own amendment of the collective agreement, the more generally acceptedposition is that no less than any other contractual document, collective agreements are subject to the equities when they are applied.

Aswell, it has been suggested that the doctrine of estoppel should be considered as a rule of evidence, preventing the unfair assertion ofwhat would otherwise be material grounds for a claim. [citations omitted] It would seem from this authority that the general consensus is that arbitrators can indeed apply the doctrine of estoppel even in the faceof articles such as 8.04 and 9.02. What is required in order to establish an estoppel? This question is answered by Messrs. Brown andBeatty at

section 2:2211 on page 2-74 of the loose leaf edition where, quoting from Canadian General Electric Co. (1971), (ON LA), 22 L.A.C. 149 (Johnston), at pp. 150-151 the learned authors state: It is apparent that there are two aspects of the doctrine as thus stated. There must be a course of conduct in which both parties act or bothconsent and in which the party who later seeks to set up the estoppel is led to suppose that the strict rights will not be enforced. Itfollows that the party against whom the estoppel is set up will not be allowed to enforce his strict rights if it would be inequitable to doso.

The main situation where it would be inequitable for strict rights to be upheld would be where the party now setting up the estoppelhas relied to his detriment. … [12] The union took no issue with the arbitrator’s statement of the law. [13] The arbitrator noted that, in general, the union was in agreement with the employer’s plan of reorganization and itsimplementation through the introduction of new shift schedules. But as regards the grievor himself, the arbitrator stated: Unfortunately, it did not occur to anyone involved in the process that the grievor might be disenfranchised by the process.

The grievorhimself however, did have some misgivings about what was going on but did not express these misgivings to anybody until the final planwas put into action. Indeed, it may well have been impossible for him to have foreseen the impact upon him until he was finallyconfronted by management with the options which were available to him. [my underlining] [14] The arbitrator continued: The question for resolution is whether or not it is fair for the union to now disavow its agreement and acquiescence to the detriment ofthe employer.

The employer seems to have done all that could be expected of it in this reorganization plan. It kept the union apprised ofall that was going on, including delays and other issues of timing which it was experiencing. The union was responding that it sawnothing wrong with the plan. Indeed, the union waived the provisions with respect to posting job vacancies in order to facilitate the employer’s restructuring withouthaving a complicated bumping situation. The minutes of the meetings reflected the impending changes and their scheduledcommencement times.

No objection was registered at the meetings or at the subsequent meetings when the minutes were approved. The union put up a valiant argument that approval of the minutes is not necessarily approval of what happened at the meeting. However,the approvals were noted in the minutes and no objections were registered either at the meeting or subsequent approval. It “looks fine tome” as a response to a request for review is not an indicator of disagreement. [my underlining]

There is no doubt that the employer has expended considerable sums of money and time in the execution of the plan of which both parties were aware. If the union was permitted to deny the agreement, the employer would incur considerable damages in compensating the grievor since 2005 for shifts that he lost in the interim. There is no evidence as to why the grievance was not pursued at an earlier stage and it is not for me to speculate on that issue.

Would it be fair to allow the union to now claim the protection of the agreement when it knew its provisions all along and nevertheless adopted the plan or, at the very least, acquiesced in it? It would seem not. There were many opportunities along the way for the union to have expressed concern or doubt or disapproval of the changes. No concerns, doubts or disapprovals were raised. The union was aware of these provisions in the collective agreement as was the employer – they negotiated it.

The union cannot negotiate or acquiesce in such a large scale change in the operating system of the employer as is the case here, agree to it and then, upon implementation when it discovers a flaw that it had not previously considered, back out of the arrangement and attempt to hide behind the protection of the clause. If such a situation were to be sanctioned by arbitration, no employer would ever again negotiate improvements or any changes in working conditions with the union for fear of the union backing out at the last minute.

In my view this would hamper constructive improvements in the work place in between times of formal negotiations of collective agreements. [15] He concluded: As a result I find that the employer is entitled to rely on the doctrine of estoppel and that it is applicable to this fact situation. The union is estopped from denying the terms of the agreement involving the re-arrangement of the shift system. [16] However, despite his conclusion, the arbitrator was concerned about the effect of the reorganization on the grievor: … I have some reservations about the fairness of what has happened to this grievor.

He has apparently fallen through a crack somewhere in the process. For example, it is difficult to understand how he could have gone from a permanent part time position to no position at all. Surely there must have been some part time openings for an employee who has been with the organization for such a long period of time. He seems, on the surface of the scanty evidence I have before me, to have been a valued employee. Unfortunately for him in this case, he is not a party to the collective agreement and the union is the party which holds his bargaining rights.

It is the union and the employer who are the parties to this collective agreement and these proceedings and it is their relationship which must be examined by me. One would hope, however, that those parties could reach some accommodation for this individual whereby he could be accorded some consideration for future shifts. [17] But no accommodation was reached and the grievor lost his job.

DECISION ON JUDICIAL REVIEW [ 10 ] On its application for judicial review, the Union argued that the arbitrator had erred in his application of the doctrine of estoppel, particularly in light of the fact that certain provisions of the Agreement expressly prohibited any amendment being made between the Board and the Union arising from its labour-management committee meetings during its term. [ 11 ] The application for judicial review was dismissed.

In doing so, however, the applications judge expressed reservation regarding the fact that the arbitrator did not identify the specific provisions that the Board was “aware of” during the discussions with the Union nor the clause the Union sought to “hide behind”. He suggested that there should have been some acknowledgement, “express or clearly implied” of the specific right or rights that the Board understood would not be enforced by the Union. [ 12 ] The applications judge also noted that the arbitrator had found that the grievor had “fallen through a crack somewhere in the process”.

Yet the arbitrator did not make any finding regarding whether the plan itself provided an exception for senior part-time employees like the grievor who would not be able to accept a permanent full-time position because of full-time employment elsewhere.

Specifically, the applications judge expressed concern that the arbitrator did not address the meaning and effect of the reference in the labour- management committee meeting minutes (MC #4) to what he described as the “just-cause exception”, which purported to allow employees who had “other work of longer duration” to maintain their part-time status and to reject an offer of full-time employment. [ 13 ] The arbitrator also did not make any specific findings on whether permanent part-time employees who did not accept full-time jobs as a part of the plan would be automatically terminated without recourse to the grievance procedure.

[ 14 ] The applications judge summarized his reservations about the arbitrator’s reasons at paragraph 34: [34] In light of: (

i) the “just cause” exception; (ii) the reference to only waiving the job posting requirement; (iii) the acknowledgement that no one thought that the grievor might be disenfranchised; and (iv) the lack of reference to a specific ‘termination-related’ collective agreement right being waived by the union or the grievor, the question must be asked whether or not the facts reasonably support the conclusion that the grievor’s ‘strict right’ to no termination without just cause was in fact waived by the union.

The arbitrator does not directly address the fundamental question: ‘do the facts support the conclusion that the union was estopped from resorting to the grievance procedure and requiring the employer to prove that, in the circumstances, this employee’s inability to accept a full-time position amounted to just cause for his termination?’ He questioned whether the arbitrator’s reasons actually addressed what appeared to him to be the “fundamental question” for resolution of the grievance, being whether the union was estopped from recourse to the grievance procedure and thus requiring the employer to establish that the grievor’s inability to accept a full-time position constituted just cause for dismissal. [ 15 ] The applications judge held that the standard of review applicable to the arbitrator’s decision was reasonableness, while noting this Court’s decision in Newfoundland and Labrador v.

Newfoundland and Labrador Association of Public and Private Employees , 2010 NLCA 37 (“ NLAPPE ”), where a correctness standard was applied in an appeal where the law of estoppel was at issue. The applications judge then considered the decisions of this Court in Burke v. Newfoundland and Labrador Association of Public and Private Employees , 2010 NLCA 12 (“Burke”); and Newfoundland and Labrador v. Newfoundland and Labrador Nurses’ Union , 2010 NLCA 13 (“ NLNU ”), both dealing with the application of a reasonableness standard of review to labour relations tribunal decisions in the wake of Dunsmuir v.

New Brunswick, 2008 SCC 9 , [2008] 1 S.C.R. 190. [ 16 ] In Burke this Court’s focus was on whether the chain of reasoning of the labour relations board met a reasonableness standard prescribed by Dunsmuir .

This Court held that where the reasons failed to “actually grapple” with the substance of the matter and did not address the essential submissions of the parties, the decision would not meet the Dunsmuir requirement of “justification, transparency and intelligibility” of reasons. [ 17 ] This Court in Burke elaborated upon when it should delve into the reasonableness of the outcome, where the chain of reasoning itself was unreasonable.

Chief Justice Green, there, stated: [76] It must not be forgotten, however, that the Dunsmuir reasonableness analysis also contemplates a review of the decision, not only on the basis of the reasonableness of the tribunal’s “process of articulating reasons” but also on the reasonableness of the result.

The question that must also be addressed is whether, even though the decision here fails the chain of reasoning test (there being no reasoning addressing the substance of the specific allegations made), it can in any event be supported on the basis that the result is nevertheless reasonable. [77] Although the Dunsmuir reasonableness analysis contemplates a two-pronged test, it is to be noted that the majority in that case observed that reasonableness is concerned “mostly” with the decision-making process.

Nevertheless, it did assert that it was “also” concerned with whether the decision fell within a range of “possible, acceptable outcomes”. The majority also referred with approval, in paragraph 48 of the decision, to an

article by David Dyzenhaus where he stated that the notion of deference to administrative tribunal decision-making required “a respectful attention to the reasons offered or which could be offered in support of a decision” [my emphasis].

This suggests that even though a reviewing court has concluded that the reasoning process as expressed in a decision is flawed to the point of unreasonableness, a tribunal’s decision may nevertheless be saved and supported by the court identifying another basis for the decision, leading to the conclusion that the result is a reasonable one. [78] In my view, it is unclear in the existing case law, as to how, to what degree and in what circumstances a “reasonableness of result” analysis should be employed in a judicial review case applying the Dunsmuir reasonableness standard.

I conclude, nevertheless, that, whatever its scope, it is not appropriate to employ such an analysis in every case. … [82] In the current case, where the specific submissions of Mr. Burke do not appear to have been addressed by the Board, it would be inappropriate for this Court to examine the matter anew, as it were, to determine whether the result was nevertheless reasonable. To

do so would involve the Court making a decision that the Board is entrusted by statute with doing. (Emphasis added.) [18] It concerned the applications judge here that the just-cause exception with regard to the grievor’s personal circumstances ofhaving “other employment of longer duration” (i.e. a full-time teaching position) was the central issue to be decided but had not beenaddressed by the arbitrator except to the extent of recognizing that the grievor’s situation may have “fallen between the cracks”.

Theapplications judge concluded that based on this Court’s reasons in Burke, “the reasoning process is deficient in a number of aspectsrelating to applications of estoppel to the circumstances and to the collective agreement in question”. He further found that the decisioncould be considered an “undisciplined application” of the doctrine of estoppel (see paragraph 36 of the applications judge’s decision,citing NLAPPE). [19] The applications judge also considered the decision of this Court in NLNU, released the day after Burke.

He noted that thedecision held that the reasonableness requirements of “justification, transparency and intelligibility” could be satisfied with “skeletal”and “minimal” reasons if they “showed simply that the arbitrator knew what the issue was and achieved a result that was within a rangeof acceptable outcomes” (see paragraph 37 of the applications judge’s decision). Applying that standard, the applications judgeconcluded: [43] The award in this case provides reasoning and a “why” explanation that is significantly more expansive than that in theNLNU case.

Here, although the arbitrator did not, as outlined above, specifically address certain issues relevant to the application ofestoppel, he was clearly alive to the general issue, correctly set out the legal requirements of the doctrine of estoppel, and gavecomprehensive but broad reasons why he felt that it was ‘fair’ that the union should be estopped from proceeding with the grievance. Looking at the circumstances from the position of the employer and the union – as distinct from that of the grievor himself – theoutcome of the decision, in and of itself, is not unacceptable.

In my view, measured against the award under review in NLNU, the awardin this case is reasonable, and, if necessary, may be considered correct. He therefore dismissed the Union’s application for judicial review. ISSUES [20] The following issues arise on this appeal: (

i) What standard of review ought to have been applied on judicial review respecting the arbitrator’s application of the doctrine ofestoppel to the grievance? (ii) Did the applications judge err in upholding the arbitrator’s determination that the Union was estopped from resiling from theBoard’s

interpretation of the scope of the plan? (iii) What impact does the analysis by the applications judge have on the status of the individual grievance of Mr. Hale? ANALYSIS (

i) Standard of review [21] Following the release of the decision of the applications judge, the Supreme Court of Canada rendered decisions in Nor-ManRegional Health Authority Inc. v. Manitoba Association of Health Care Professionals, 2011 SCC 59, [2011] 3 S.C.R. 616 (“Nor-Man”)and on the appeal from the NLNU decision of this Court, 2011 SCC 62 , [2011] 3 S.C.R. 708. The decision in Nor-Man held

that applications of the doctrine of estoppel by labor arbitrators will be reviewed on the standard of review of reasonableness, reversingthe Manitoba Court of Appeal finding that a correctness standard of review applied. This decision also effectively reversed the standardof review of correctness applied by this Court in the NLAPPE decision. [22] In the NLNU decision, the Supreme Court unanimously upheld the majority decision of this Court and elaborated on how acourt should apply the reasonableness standard in the wake of Dunsmuir.

At paragraphs 14 to 17 of NLNU, Abella J. wrote: [14] Read as a whole, I do not see Dunsmuir as standing for the proposition that the “adequacy” of reasons is a stand-alone basis forquashing a decision, or as advocating that a reviewing court undertake two discrete analyses — one for the reasons and a separate one forthe result (Donald J. M. Brown and John M. Evans, Judicial Review of Administrative Action in Canada (loose-leaf), at §§12:5330 and12:5510).

It is a more organic exercise — the reasons must be read together with the outcome and serve the purpose of showing whetherthe result falls within a range of possible outcomes.

This, it seems to me, is what the Court was saying in Dunsmuir when it toldreviewing courts to look at “the qualities that make a decision reasonable, referring both to the process of articulating the reasons and tooutcomes” (para. 47). [15] In assessing whether the decision is reasonable in light of the outcome and the reasons, courts must show “respect for the decision-making process of adjudicative bodies with regard to both the facts and the law” (Dunsmuir, at para. 48).

This means that courts shouldnot substitute their own reasons, but they may, if they find it necessary, look to the record for the purpose of assessing thereasonableness of the outcome. [16] Reasons may not include all the arguments, statutory provisions, jurisprudence or other details the reviewing judge would havepreferred, but that does not impugn the validity of either the reasons or the result under a reasonableness analysis.

A decision-maker isnot required to make an explicit finding on each constituent element, however subordinate, leading to its final conclusion (ServiceEmployees’ International Union, Local No. 333 v. Nipawin District Staff Nurses Assn., (SCC), [1975] 1 S.C.R. 382, atp. 391). In other words, if the reasons allow the reviewing court to understand why the tribunal made its decision and permit it todetermine whether the conclusion is within the range of acceptable outcomes, the Dunsmuir criteria are met. [17] The fact that there may be an alternative

interpretation of the agreement to that provided by the arbitrator does not inevitably lead tothe conclusion that the arbitrator’s decision should be set aside if the decision itself is in the realm of reasonable outcomes.

Reviewingjudges should pay “respectful attention” to the decision-maker’s reasons, and be cautious about substituting their own view of the properoutcome by designating certain omissions in the reasons to be fateful. [23] Additionally, the decision in Nor-Man confirmed that the applications judge here was entitled to apply the reasonablenessstandard of review to the application of the doctrine of estoppel by the arbitrator. The issue for this Court to resolve is whether theapplications judge erred in his application of the reasonableness standard to the reasoning and the result fashioned by the arbitrator.

Inother words, did the applications judge err in holding that the reasons of the arbitrator were sufficient to permit him to understand whythe arbitrator made his decision and to permit him to determine whether the arbitrator’s conclusion was within the range of possibleoutcomes? (ii) General Observations [24] This appeal arises out of the conflation of two distinct but related issues which were engaged in the arbitration process, namely:(1) was the Union estopped from relying on articles 9.02 and 8.04 of the collective agreement in order to avoid being bound by the keycomponents of the plan; and (2) even if the Union and the grievor were bound by the plan was the grievance justifiably dismissed?

Thelatter question was the ultimate issue to be determined by the arbitrator with respect to the grievance. While that was the final issue to bedetermined in the grievance, it was not the central issue to be determined in resolving the preliminary objection. It appears, based on thearbitrator’s statement of the issue and his conclusion that, in deciding the preliminary objection, he was effectively concluding that thegrievor had no remedy at all, even within the parameters of the plan.

The issue of whether the Union was estopped from resiling fromthe application of the plan had to be decided first before the arbitrator could be required to hear the merits of the grievor’s claim that theterms of the plan permitted him to refuse a reassignment by the Board to a permanent full-time position if he had a full-time positionelsewhere.

[ 25 ] The arbitrator came to the conclusion that estoppel applied by making the following findings regarding the actions of the Union and the Board at pages 14 and 15 of his award: In this case, there is no doubt that the union and employer were both of one mind as to the progress of the employer’s plan and that it would be beneficial to both the employer and to the bulk of the union membership that the plan was implemented. They were both in agreement with it and actively encouraged each other.

Unfortunately, it did not occur to anyone involved in the process that the grievor might be disenfranchised by the process. The grievor himself, however, did have some misgivings about what was going on but did not express these misgivings to anybody until the final plan was put into action.

Indeed, it may well have been impossible for him to have foreseen the impact upon him until he was finally confronted by management with the options which were available to him. … Would it be fair to allow the union to now claim the protection of the agreement when it knew its provisions all along and nevertheless adopted the plan or, at the very least, acquiesced in it? It would seem not. There were many opportunities along the way for the union to have expressed concern or doubt or disapproval of the changes. No concerns, doubts or disapprovals were raised.

The union was aware of these provisions in the collective agreement as was the employer – they negotiated it. The union cannot negotiate or acquiesce in such a large scale change in the operating system of the employer as is the case here, agree to it and then, upon implementation when it discovers a flaw that it had not previously considered, back out of the arrangement and attempt to hide behind the protection of the clause.

If such a situation were to be sanctioned by arbitration, no employer would ever again negotiate improvements or any changes in working conditions with the union for fear of the union backing out at the last minute. In my view this would hamper constructive improvements in the work place in between times of formal negotiations of collective agreements. [ 26 ] The arbitrator’s finding upholding the Board’s view of the key provisions of the plan and his reasoning met the standard of reasonableness as articulated by the Supreme Court of Canada in the NLNU case.

The outstanding problem with the arbitrator’s decision arose, however, when he continued at page 16 of his award, to express “some reservations about the fairness of what happened to this grievor.” Nevertheless, he affirmed his finding that the Union was estopped from denying that it was bound by the plan and concluded that the grievance of Mr. Hale was barred. With respect, this went beyond the scope of what had to be determined on the preliminary objection which was whether the Union was estopped from relying on articles 9.02 and 8.04 of the existing collective agreement to support Mr. Hale’s grievance.

This had engaged the threshold question of whether the provisions of the collective agreement were substantially modified by the Board and the Union thus preventing the Union from asserting them on behalf of the grievor Mr. Hale in order to avoid his termination from a permanent part-time position. Deciding that question in favour of the Board did not dispose of the grievance. What remained was the question whether Mr.

Hale had been unjustly dismissed under the terms of the plan, particularly with regard to the language of the just-cause exception. [ 27 ] At the hearing of the appeal, counsel for the Union indicated that ordinarily all preliminary objections would, as a matter of procedure, be addressed first at an arbitration hearing before proceeding to a hearing of the merits. Counsel for the Board expressed the view that it was understood by the parties that the arbitrator’s decision on the preliminary objection of the Board would be dispositive of the entire grievance.

The record does not demonstrate that any evidence was presented or argument made as to the grievor’s circumstances in the context of the terms of the plan. The arbitrator’s decision does not record an agreement or understanding between the parties that a decision on the preliminary objection would dispose of the entire grievance. [ 28 ] The question of estoppel needed to be answered first by the arbitrator before he could consider whether the just-cause exception of the plan applied to the grievor permitting his rejection of a full-time position without loss of employment with the Board.

This only needed to be determined if all of the terms of the plan were found to be enforceable by the Board. (iii) Status of Mr. Hale’s Individual Grievance [ 29 ] Accordingly, there remains an outstanding issue of whether Mr. Hale was unjustly dismissed in a manner contrary to the provisions of the plan. The “Statement of Grievance” in Mr. Hale’s grievance form dated November 24, 2005 stated: Mr.

Terry Hale was unjustly dismissed by Eastern Residential Support Board , in addition Eastern [Regional Support Board] failed to follow layoff and recall procedure and failed to post a position which is a violation of NAPE collective agreement with the group homes, Articles 12.01, 13.01, 13.03, 13.04 and all pertinent articles.

(Emphasis added.) [ 30 ] The minutes of one of the meetings of the committee co-signed by representatives of the Board and the Union indicate that the increased hours would have to be accepted by the more senior part-time employees, unless they could show just cause why the hours could not be accepted.

One of the reasons accepted as providing just cause for refusing an offer of full-time employment was “other employment of longer duration”. [ 31 ] The arbitrator’s written decision does not indicate that the portion of the grievance which relates to whether the grievor was unjustly dismissed was addressed with evidence and argument.

This would have involved consideration of evidence as to whether the full-time teaching position held by the grievor with another employer at the time of the plan’s implementation constituted “other employment of longer duration” as contemplated by the parties when discussing its terms. The arbitrator did not address this proposition in his ruling except to the extent of suggesting that Mr. Hale’s dismissal was the inevitable result from his decision on the estoppel issue. [ 32 ] The Union contends that it was never contemplated that Mr.

Hale would be terminated if he did not accept the permanent full- time position and claims that the documentary evidence before the arbitrator would support this position. It contends that the phrase “other employment of longer duration” provided Mr. Hale with justification for rejection of the full-time position offered by the Board without loss of employment. [ 33 ] The arbitrator’s decision appears to have proceeded on the presumption that once the estoppel had been found to apply, the grievor had no other case to make. It must be concluded that the Union and the grievor, Mr.

Hale, reserved their position on the

interpretation of the just-cause exception claim by the grievor pending the outcome of the arbitrator’s decision with respect to the Board’s preliminary objection. It is logical that the Union would not have wished to fully argue Mr. Hale’s position at the hearing of the preliminary objection since its merits would only have come into play if the Board’s claim to the application of estoppel prevailed.

SUMMARY AND DISPOSITION [ 34 ] The applications judge properly identified and applied the reasonableness standard of review to the application of the doctrine of estoppel by the arbitrator, the sole issue for determination on the preliminary objection made by the Board. [ 35 ] The applications judge erred by allowing the arbitrator’s dismissal of the grievance to stand. Having held that the Union was estopped from resiling from the plan, the arbitrator ought to have made further inquiries into the application of the just-cause exception to the circumstances of the grievor. Thus, the dismissal of Mr.

Hale’s grievance without full consideration by the arbitrator of the meaning and effect of the just-cause exception was not within the range of possible outcomes upon application of a reasonableness standard and must be set aside. [ 36 ] The appeal is dismissed with respect to the application of estoppel by the arbitrator. The appeal is allowed with respect to the failure of the arbitrator to consider Mr. Hale’s status under the just-cause exception identified in the plan. The grievance of Mr. Hale is to be remitted to a new arbitrator to determine this issue.

In light of the mixed success of the Union, it is ordered that each party bear its own costs in this Court and in the Trial Division. ________________________ M.F. Harrington J.A. I concur: _______________________ J.D. Green C.J.N.L. I concur: ________________________ M.H. Rowe J.A.