Docket: 1918 Canadian Union of Public Employees, Local 5506 Appellant - v. -, 2011 SKCA 54

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2011 SKCA 54 Date: 20110418 Between: Docket: 1918 Canadian Union of Public Employees, Local 5506 Appellant - and - Prairie South School Division No. 210 and Saskatchewan Labour Relations Board Respondents Coram: Gerwing, Jackson & Ottenbreit JJ.A. Counsel: Peter Barnacle and Crystal Norbeck for the Canadian Union of Public Employees, Local 5506 James McLellan for Prairie South School Division No. 210

Appeal: From: 2010 SKQB 77 Heard: April 18, 2011 Disposition: Appeal Dismissed (orally) Written Reasons: May 5, 2011 By: The Honourable Madam Justice Jackson In Concurrence: The Honourable Madam Justice Gerwing The Honourable Mr. Justice Ottenbreit Jackson J.A. I. Introduction [ 1 ] This is an appeal by CUPE Local 5506 from a decision of the Court of Queen’s Bench dismissing an application for review of a decision of the Labour Relations Board (the “Board”). When the appeal was heard, this Court dismissed the appeal, with reasons to follow.

These are those reasons. [ 2 ] In the amalgamation of a number of school districts in 2006, a new larger school district, Prairie South School Division No. 210, replaced seven smaller school districts. A different local of CUPE had represented each of the seven districts prior to amalgamation, and each district had been governed by a separate bargaining agreement.

Following the amalgamation of the seven districts into Prairie South, the seven locals of CUPE amalgamated into CUPE, Local 5506 (the “Union”). [ 3 ] In spite of the amalgamation of school districts and CUPE locals, the seven bargaining units governed by different bargaining agreements remained in place. The Union applied to the Board for a number of orders to regulate the situation. [ 4 ] The Board granted an order pursuant to

section 37 of The Trade Union Act , R.S.S. 1978, c. T-17 (the “ Act ”) declaring Prairie South to be the successor and employer of the seven districts and an order pursuant to

section 39 of the Act recognizing the amalgamation of the various locals of CUPE into the one Union, Local No. 5506. Those orders are not in issue. [ 5 ] The point of controversy before the Board was the determination of the appropriate bargaining unit. The Union wanted the Board to exercise its powers under clause 37(2)(

b) of the Act and declare one bargaining unit of all non-teaching employees, which would have had the effect of including in that unit some head office staff and bus drivers and others who had not previously been part of any union. [ 6 ] The Board declined to make that order, and ordered instead that the seven existing bargaining units each constituted an appropriate bargaining unit under clause 37(2)(b), covering the unionized employees only.

With respect to adding the non-unionized employees, the Board directed that the Union file evidence of majority support from among those employees and make an application to be certified as their bargaining agent. [ 7 ] The Union applied to the Court of Queen’s Bench Chambers for an order quashing the following aspects of the Board’s decision: (

i) its determination that the seven existing bargaining units constituted appropriate bargaining units under clause 37(2) (

b) of the Act ; and (ii) its determination that majority support was required from the non-unionized employees before these employees could be included in a larger bargaining unit. The learned Queen’s Bench Chambers judge found that the standard of review was reasonableness based on Dunsmuir v. New Brunswick , 2008 SCC 9 , [2008] 1 S.C.R. 190. The Chambers judge found that the decision of the Board was reasonable and dismissed the application (see: 2010 SKQB 77 , 353 Sask. R. 235).

The Union appealed to this Court. [ 8 ] We agree with the Chambers judge that the standard of review of the Board’s decision in this case is reasonableness (see: United Brotherhood of Carpenters and Joiners of America, Local 1985 et al. v. Graham Construction and Engineering Ltd. et al. , 2008 SKCA 67 , 296 D.L.R. (4 th ) 622 at paras. 56-57 , leave to appeal to S.C.C. refused [2008] 3 S.C.R. vii), and that the Board’s decision meets the Dunsmuir test for reasonableness (at paras. 47-49). We reach this conclusion, however, for somewhat different reasons than those put forward by the Chambers judge in this case.

II. Decision of the Board [9] The Union applied to the Board for an order declaring that all non-teaching employees constituted one bargaining unit pursuant toclauses 37(2)(

b) and (

c) of the Act. Those provisions provide: 37(2) On the application of any trade union, employer or employee directly affected by a disposition described in this section, the boardmay make orders doing any of the following: . . . (

b) determining whether, on the completion of the disposition of a business or of part of the business, the employees constitute one ormore units appropriate for collective bargaining and whether the appropriate unit or units will be: (

i) an employee unit; (ii) a craft unit; (iii) a plant unit; (iv) a subdivision of an employee unit, craft unit or plant unit; or (

v) some other unit; (

c) determining what trade union, if any, represents a majority of employees in the unit determined to be an appropriate unit pursuant toclause (b); [emphasis added] [10] The Union submitted to the Board that clauses 37(2)(

b) and (

c) require that the appropriate bargaining unit be determined beforethe wishes of the employees within the newly-declared unit are ascertained. As support for this proposition, the Union relied uponNoranda Mines Limited v. Saskatchewan, (SCC), [1969] S.C.R. 898 (“Noranda”) and University of Saskatchewan v.Canadian Union of Public Employees Local 1975 et al (1977), 22 N.R. 316, [1977] S.J. No. 361 (QL), rev’d (SCC),[1978] 2 S.C.R. 834. In each of those decisions, the Court interpreted clauses 5(

a) and (

b) of the Act. Clauses 5(

a) and (b), which pertainto the creation of a bargaining unit where one has not existed previously, provide: 5 The Board may make orders: (

a) determining whether the appropriate unit of employees for the purpose of bargaining collectively shall be an employer unit, craft unit,plant unit or a subdivision thereof or some other unit; (

b) determining what trade union, if any, represents a majority of employees in an appropriate unit of employees, but no order under thisclause shall be made in respect of an application made within a period of six months from the date of the dismissal of an application forcertification by the same trade union in respect of the same or a substantially similar unit of employees, unless the board, on theapplication of that trade union, considers it advisable to abridge that period; [11] In University of Saskatchewan the Supreme Court of Canada adopted the reasoning of Bayda J.A. (as he then was) as to howclauses 5(

a) and (

b) of the Act should be interpreted. Bayda J.A., dissenting in the Court of Appeal, had held that the Board was notrequired to ascertain the employee’s wishes on an application to fix an appropriate bargaining unit under clause 5(

a) of the Act, but thatthe Board was required to consider the wishes of the employees under clause 5(b): [28] ... It is, I think, now settled that to enable the Board to make an order under Section (5)(

a) of the Act, the Board is not required toascertain the employees' wishes respecting the composition and determination of an appropriate bargaining unit, Noranda Mines v. TheQueen (1970), (SCC), 7 D.L.R. (3d) 1. That, however, is not true of an order under

Section 5(

b) of the Act. The importof the provisions in Sections 3 and 5(

b) of the Act, is such that where a new bargaining unit is established the employees in that unit havethe right to choose the union they wish to represent them and the wishes of the majority of the employees in that unit shall prevail. Theseprovisions impose a concomitant obligation upon the Board to ascertain those wishes before it can exercise its right to determine whatunion, if any, represents the majority in that unit. The Board may use whatever evidence of those wishes it deems appropriate butevidence it must have.

The commission by the Board of an error of law or fact respecting that evidence cannot form the basis of an orderto quash. But, for the Board to make an order determining what Union represents the majority without any evidence of the majority'swishes, is to act in excess of jurisdiction. [italics in original; underlining mine] [12] Reasoning by analogy from University of Saskatchewan, the Union submitted to the Board that clause 37(2)(

b) of the Act should beinterpreted in the same manner as clause 5(a). The Union submitted that since employee support has never been determinative of anapplication under clause 5(a), it should not be considered as determinative of an application under clause 37(2)(b). [13] In addition, the Union submitted to the Board that an all-employee unit is the optimal bargaining unit. The Union suggested that, ifthe Board had been deciding an application under clause 5(a), it would not have chosen to create a bargaining unit composed of onlycertain non-teaching employees. The optimal unit would have been an all-employee unit, excluding the teaching staff.

[14] The Board considered these arguments and rejected them (see: (2008), 189 C.L.R.B.R. (2d) 150, ). The Boardfirst considered whether a larger bargaining unit composed of all non-teaching employees would be appropriate. The Board agreed withthe Union that larger, more-inclusive, bargaining units are generally preferable to smaller, less-inclusive, units.

The Board concluded,however, that “an appropriate unit of employees need not be an optimal one for the purposes of collective bargaining” (para. 31). [15] The Board had concerns about declaring the larger unit the appropriate bargaining unit in this case because such a declarationwould draw into the unit non-unionized employees who had been historically excluded from the ambit of the existing units andagreements. On this point, the Board followed its earlier decision in Canadian Union of Public Employees, Local 4799 v.

Board ofEducation of Horizon School Division No. 205 and Deer Park Employees' Association, (Interested Party), (2007), 144 C.L.R.B.R. (2d)271, (“Horizon”) — another case arising out of the province-wide amalgamation of school districts. [16] The Board quoted significantly from Horizon and noted that the panel in Horizon had “declined to sweep in employees who werepreviously not covered by certification orders because the union, in that case, had not filed any indication of support from suchemployees as to their wishes with respect to their choice of certified bargaining agent” (see: para. 33).

Relying on Horizon and onSaskatchewan Rivers School Division No. 119 v. Canadian Union of Public Employees Local 4195, [1998] S.L.R.B.D.

No. 50 (QL), theBoard concluded that the bargaining units in this case should continue to exclude the employees who were not previously represented bythe Union and that any problems arising from the exclusion of the employees from the bargaining units should be solved throughnegotiation (see: para. 35). [17] In reaching the above conclusion, the Board was required to grapple with the following question: What level of support forunionization by non-unionized employees must be demonstrated before declaring an appropriate bargaining unit under clause 37(2)(b)? This issue was never definitively settled in Horizon.

After concluding that it was necessary to determine the wishes of the unorganizedemployees, before determining the appropriate bargaining unit, the Board in Horizon recognized that conflict is the inevitable resultwhen unionized and non-unionized employees work side by side with the same job descriptions.

The way out of the difficulty would beto present evidence of support for unionization from the non-unionized employees in one way or another: [111] … A bargaining unit of all support staff employees would be more stable than the present configuration from an industrialrelations and administration viewpoint and could be achieved in several ways: (1) the Union could file evidence of majority supportamong the group of presently unrepresented employees; (2) the Union could file direct evidence of support of the employees in theexisting bargaining units that establishes the majority support of the total number of support staff employees both within and outside ofthe bargaining units; (3) by representation vote of the group of previously unrepresented employees sought to be added that demonstratestheir majority support; or (4) by a representation vote of all of the support staff employees that demonstrates their majority support.

Ofcourse, however, if process (4) was followed and the vote did not demonstrate majority support among all employees, the bargaining unitwould cease to exist. The Board in Horizon did not decide what would be the preferred approach in the case before it, and indeed the issue remains unsettledfor the Horizon School Division. [18] The Board in the case before us described the four options mentioned in Horizon in this manner: [39] Option #1 in Horizon School Division, supra, is the filing of support from those employees who are currently unrepresented.

Inthat case, the Union files support from those employees who were previously unrepresented and makes application to be certified as theirbargaining agent. [40] Option #2 in Horizon School Division, supra, is the filing of an application for successorship, as in this case.

In that case, theBoard was concerned with the resultant “sweeping in” of those employees who were previously unrepresented by virtue of theredefinition of the bargaining unit as an adjunct to the successorship application. [41] Option #3 in Horizon School Division, supra, is for the Board to order a representation vote among those employees who aresought to be added to the bargaining unit pursuant to an application under s. 37 for successorship rights. [42] Option #4 in Horizon School Division, supra, is for a vote to be ordered among all represented and unrepresented employees inthe bargaining unit which the applicant union wishes to represent.

Even in Horizon School Division, supra, the Board cautioned againstthis approach which could have the effect of causing a decertification of the bargaining rights of the applicant should the vote be lost. [19] In this case, the Union, unlike the Union in Horizon, had filed evidence of support from both the unionized employees and from thenon-unionized employees. It was evident that the Union had majority support from the combined group of all employees, but it could notbe said that a majority of the non-unionized employees supported the Union.

The Union submitted to the Board that Option #2 inHorizon simply required majority support from the combined group of all employees, and on this basis claimed the right to the largerbargaining unit including the previously non-unionized employees. Prairie South opposed the use of Option #2 to decide the issue andsubmitted that an immediate vote should be ordered among the non-unionized employees, along the lines of Option #3.

[ 20 ] The Board rejected both of those options in favour of Option #1. In doing so, it also held that the Board in Horizon had only intended Option #2 to apply in circumstances where a “very small” number of employees were to be added to the bargaining unit: [43] Based on the Board’s comments in Horizon School Division, supra , quoted above, Option #1 would, we believe, be the preferred option with respect to a union seeking to represent previously unrepresented employees.

It affords and provides those employees and their chosen bargaining agent with all of the rights and benefits normally afforded under s. 3 of the Act . There is no issue of “sweeping in” those employees who are free to choose to be represented in accordance with the Act .

While it may involve greater effort on the part of the trade union which seeks to represent those employees, it provides certainty and security of choice for those employees. [44] Option #2 is a less desirable option and would be available to be used only in the circumstances outlined in Horizon only “if the number of employees sought to be added were in an existing classification represented by the union and their numbers were very small in relation to an overwhelming number of employees represented by the union.” III.

Is the Board’s Decision Unreasonable? [ 21 ] The effect of the Board’s decision in this case is as follows: on an application under clause 37(2)(b), the Board may require a union to provide evidence of majority support from the non-unionized employees before the Board will declare a bargaining unit that includes the non-unionized employees.

The issue for this Court is whether this result in this case is unreasonable. [ 22 ] As the Chambers judge mentioned, the Supreme Court of Canada in Dunsmuir asks a reviewing court, when applying the standard of reasonableness to the decision of an administrative tribunal, to inquire into the qualities that make the decision reasonable, referring both to the process of articulating the reasons and to the outcome (see: paras. 47-49 of Dunsmuir ). There is no question that the quality of the reasoning process used by the Board in this case meets the test of reasonableness. The Board did not misstate the evidence.

All of the arguments made by the Union were considered. The Board provided detailed reasons for rejecting those arguments. There is no other basis in this case to question the quality of the reasons. The focus is on the second arm of Dunsmuir which concerns the reasonableness of the outcome . [ 23 ] The Union submitted to this Court that the Chambers judge erred in not finding the decision of the Board to be unreasonable. According to the Union, the Board’s decision did not fall within a range of possible, accepted outcomes defensible in respect of the facts and law.

Specifically, the Union argued that the Board, and therefore the Chambers judge, erred by interpreting the purpose, intent and principles of

section 37 of the Act and by importing principles more directly applicable to an application for accretion under

section 5 of the Act . [ 24 ] In this case the Board has taken its

interpretation of clause 37(2) (

b) of the Act one step further than the Board did in Horizon . Horizon stands for the proposition that the Board should take the wishes of non-unionized employees into account in determining an appropriate bargaining unit on an application under clause 37(2) (b). It is one thing, however, to say that the Board must consider the wishes of non-unionized employees when determining the appropriate bargaining unit.

It is quite another matter to say that the Board will not declare an appropriate bargaining unit that will sweep in non-unionized employees unless the union presents evidence of majority support from those employees. [ 25 ] In assessing the reasonableness of this outcome, however, it is important to remember the nature of the question considered by the Board. Whether majority support is required before determining the appropriate bargaining unit is a question of law, but it is a question heavily influenced by policy concerns and the evidence.

No direct legislative provision or controlling authority of this Court or the Board governs the question. The Union relies heavily on Noranda and University of Saskatchewan , but these decisions are not determinative of what constitutes an appropriate bargaining unit under clause 37(2) (b). In deciding the question, the Board could reason by analogy from

section 5 , and it could gain insight into that

section by virtue of the pertinent jurisprudence, but beyond that the Board had to bring to bear its expertise in labour relations matters in weighing the evidence and deciding the particular issue before it. The nature of the question, which directs one to apply the standard of deference in this case, influences the reasonableness of the outcome. [ 26 ] Both the Union and Prairie South made submissions respecting the difficulties that would be encountered if the Board either made or refused to make the requested order.

The Union submitted that if the status quo were maintained, unionized and non-unionized employees performing similar work would be called upon to work together in the same office. The Union asked the Board to infer from this that labour unrest would result. [ 27 ] Prairie South submitted that the non-unionized employees had eschewed the possibility of unionization for many years. Some of those employees were not so much employees as independent contractors.

According to Prairie South, the present situation represented a stable reality that would be jeopardized by the inclusion in the Union of employees who did not support the Union. Prairie South asked the Board to conclude that granting the Union’s application would overcome employee choice and result in labour unrest.

[28] The opposing submissions required the Board to determine which option most closely fulfilled the object and purpose of the Actand promoted stability. This type of balancing is precisely the function of the Board. As the Supreme Court of Canada said in VoiceConstruction Ltd. v. Construction & General Workers' Union, Local 92, 2004 SCC 23 at para. 28, [2004] 1 S.C.R. 609, labour boardsare required to engage in "polycentric" decision-making.

The Supreme Court described this decision-making as involving “a number ofcompeting interests and considerations, and calls for solutions that balance benefits and costs among various constituencies.” [29] The Board had to weigh the various arguments against the evidence and assess them. In the result, the Board determined thatstability is best served by requiring majority support from the non-unionized employees. There is simply no basis for this Court to saythat the Board’s

interpretation and application of the legislation has resulted in an unreasonable outcome. [30] The Union put forward two other discrete arguments in support of its argument that the Board’s decision was unreasonable. TheUnion argued before this Court that the Board’s decision must be considered unreasonable because it is now in conflict with a laterdecision of the Board: Sun West School Division No. 207 and Canadian Union of Public Employees, Local 4802, (2008), 162 C.L.R.B.R.(2d) 286, , which was subsequently found by the Court of Queen’s Bench not to be unreasonable in Sun West SchoolDivision No. 207 v.

Canadian Union of Public Employees, Local 4802, 2010 SKQB 1, [2010] 8 W.W.R. 286. Prairie Southacknowledges that Sun West granted the Union relief similar to that sought from the Board in this case. [31] I would not give effect to this ground of appeal. It is well established that courts applying the deferential standard of“reasonableness” may find two conflicting outcomes to be equally reasonable.

In such circumstances, the court’s task is to defer to thereasonable decision chosen by the Board in the instant case, assuming it meets the criteria described in Dunsmuir referring to the qualityof the reasoning and the outcome. [32] The Union also argued that the outcome in this case is unreasonable because the Board’s decision leaves in place seven smallbargaining units and seven collective agreements for similar unionized employees, notwithstanding that these employees are nowemployed by only one employer and represented by only one union. In the context of this case, this argument is a red herring.

Forwhatever reason, tactical or otherwise, the Union did not ask the Board to simply consolidate the existing bargaining units, but insteadasked the Board to declare one bargaining unit including the non-represented employees. It did not ask, in the alternative, for the smallerunits to be consolidated. It can only be presumed that at the time of the application, the Union was not interested in a consolidatedbargaining unit that excluded non-represented employees. Faced with a choice between (

i) the seven existing bargaining units, or (ii) abargaining unit that included both unionized and non-unionized employees, the Board opted for the former. In light of the optionspresented to the Board, this decision cannot be said to be unreasonable. In any event, counsel for the Board indicated to this Court that inpractice the parties have been acting as if there were one bargaining unit excluding the non-represented employees. The Union did notdeny that this was the present situation. De facto consolidation of the unionized employees has occurred. IV. Conclusion [33] In the result, the appeal was dismissed with costs in the usual way.