Teamsters Canada Rail Conference – Conductors, Trainpersons, Yardpersons Appellant (Respondent) v. Canadian, 2021 SKCA 62

Court of Appeal for Saskatchewan Docket: CACV3508 Citation: Teamsters Canada Rail Conference v Canadian National Railway Company , 2021 SKCA 62 Date: 2021-04-15 Between: Teamsters Canada Rail Conference – Conductors, Trainpersons, Yardpersons Appellant (Respondent) And Canadian National Railway Company Respondent (Applicant) And Andrew C.L. Sims (Arbitrator for the Canadian Railway Office of Arbitration and Dispute Resolution) Non-party (Respondent) And Brad Fleischhacker Non-party (Respondent) Before: Caldwell, Leurer and Barrington-Foote JJ.A. Disposition: Appeal allowed Written reasons by: The Honourable Mr.

Justice Barrington-Foote In concurrence: The Honourable Mr. Justice Caldwell The Honourable Mr. Justice Leurer On appeal from: 2019 SKQB 245 , Saskatoon Appeal heard: April 21, 2020 Counsel: Heather Jensen and Michael Church for the Appellant Andy Pushalik for the Respondent Barrington-Foote J.A. I. Introduction [ 1 ] In January of 2016, the respondent, Canadian National Railway Company [CN], received two complaints about offensive comments posted on Facebook by Brad Fleischhacker, a unionized CN employee. It received a third complaint in March of 2016.

CN investigated the matter – as it was required to do by its collective agreement with the appellant, Teamsters Canada Rail Conference – Conductors, Trainpersons, Yardpersons [TRC], before it decided to discipline an employee. It then terminated Mr. Fleischhacker. [ 2 ] TRC grieved the termination. It took the position that the termination was void ab initio as a result of a breach by CN of the discipline provisions of the collective agreement. On February 7, 2018, Andrew Sims [Arbitrator] issued an arbitration award upholding that grievance [Award].

CN applied to the Court of Queen’s Bench for judicial review of the Award. [ 3 ] On September 23, 2019, a judge of that Court [Chambers judge] ordered that the Award be set aside and that the grievance be returned to the Arbitrator for a hearing on the merits of the termination [QB decision]. TRC has appealed the QB decision, alleging that the Chambers judge, having correctly determined that the Award should be reviewed on the reasonableness standard of review, erred in applying that standard. [ 4 ] With the greatest respect to the Chambers judge, I agree with TRC and would allow the appeal.

My reasons for that conclusion follow. II. background A. The investigation and termination [ 5 ] I wish to be clear at the outset that this appeal is not about whether the posts by Mr. Fleischhacker were abhorrent and unacceptable. They most certainly were. That is both beyond debate and a matter of common ground between the parties. [ 6 ] Nor is this appeal about whether Mr. Fleischhacker should have been terminated as a result of his despicable behaviour. Neither the Arbitrator nor the Chambers judge dealt with the merits of CN’s decision to terminate.

Nor does this judgment, which turns solely on a breach by CN of a procedural provision of the parties’ collective agreement. [ 7 ] This unfortunate series of events began on January 24, 2016, when the Saskatoon StarPhoenix published a newspaper

article about a tragic January 22, 2016, shooting in La Loche, Saskatchewan. That shooting resulted in the death of four people and injuries to

several others. The shooter and many of the victims were Indigenous. [ 8 ] The StarPhoenix

article was posted on Facebook. In response, Mr. Fleischhacker posted the following comment: “End white privilege” Bitch if it weren’t for white people you lazy fuckers would [be] running around scalping each other and living in teepees. Sure seem to like all our white cheques in the mail every months [ sic ]. [ 9 ] Mr. Fleischhacker’s post elicited the following third-party comment: Thaaaanks for the mass genocide and civilizing us savage Indians. We owe you, bug [ sic ] time. [ 10 ] Mr. Fleischhacker replied by posting the following comment: Anytime.

And with all the bullshit going on in Saskatoon and Saskatchewan as a whole, gladly do it again. [ 11 ] Mr. Fleischhacker’s posted comments disclosed his name and profile photograph. As such, it was a simple matter to find his Twitter and LinkedIn profiles, both of which identified him as a CN employee. He would not have long to wait before being called to account. On or about January 25, 2016, CN received two complaints about offensive online comments and, as a result, CN launched an investigation of alleged “conduct unbecoming an employee of CN” pursuant to

Article 117 of the collective agreement. That

Article provides:

ARTICLE 117 Discipline 117.1 No employee will be disciplined or dismissed until the charges have been investigated; the investigation to be presided over by the employee’s superior officer. ... 117.2 (

a) At the outset of the investigation, the employee will be provided with all evidence the Company will be relying upon, which may result in the issuing of discipline. The Company will provide sufficient time for the employee and his representative to review the evidence. (

b) Employees may have an accredited representative appear with them at investigations, they will also have the right to hear all the evidence submitted and will be given an opportunity through the presiding officer to ask questions of witnesses whose evidence may have a bearing on the employee’s responsibility. Questions and answers will be recorded and the employee will be furnished with a transcript or recording of the statement taken at the investigation. … [ 12 ] The

Article 117.2 investigation hearing was held on February 17, 2016. Mr. Fleischhacker attended with a TRC representative. They were given eight documents by the investigating officer, including copies of Mr. Fleischhacker’s posts and of his Twitter and LinkedIn profiles, but not the three complaints that had been sent to CN.

In response, the TRC representative requested full disclosure of “all evidence, photographs, voice recordings, audio/video recordings, including any documentation whether paper or electronic, that has been utilized by or is in possession of the company and which may have any bearing in determining responsibility”. The investigating officer replied that he was providing all evidence in his possession or that would be relied on for the purpose of the investigation.

The TRC representative also objected to a question which disclosed that a complaint had been made to the CN ombudsman’s office, stating that “it is an unfair question as the Company has not submitted the complaint referred to”. [ 13 ] Mr. Fleischhacker was terminated for cause on February 18, 2016. On May 18, 2016, the TRC filed the grievance, which noted in the statement of facts that the CN ombudsman had received a complaint from a party unknown to the TRC. On October 5, 2016, CN declined the TRC appeal. It noted in its response that Mr.

Fleischhacker’s offensive comments were brought to CN’s attention “through two communications from members of the First Nations”. Those communications still had not been disclosed to Mr. Fleischhacker. III. The Canadian Railway Office of Arbitration and Dispute Resolution and the Award A. Introduction [ 14 ] Faced with CN’s denial, the TRC proceeded to arbitration by the Canadian Railway Office of Arbitration and Dispute Resolution [CROA], as provided by the collective agreement.

The predecessor iteration of the CROA had been established by a 1965 agreement, for the purpose of adjudicating grievances in the railway industry. That 1965 agreement was amended and renewed by a May 20, 2004, Memorandum of Agreement [MOA] between Canadian railway companies, including CN, and several railway unions, including the TRC. The MOA was in effect at all times material to this appeal. [ 15 ] The MOA provides for a highly specialized office of arbitration and for a unique form of arbitration.

In the QB decision, the Chambers judge (quoting Raymond Donegan’s January 14, 2019, affidavit) listed features which demonstrate the unusual and expedited nature of those arbitrations (at para 8): a. There is a permanent roster of CROA-appointed arbitrators to hear arbitration cases, under the coordination of a Chief Arbitrator;

b. Six cases are typically scheduled in a given arbitration day; c. Adjournments will only be granted with the agreement of both parties in “all but the most extraordinary of circumstances”; d. Any preliminary objections filed after the case has been scheduled is dealt with during the hearing, with the merits of the grievance; e. The jurisdiction of the appointed arbitrator is limited to the issues outlined in a document called a Joint Statement of Issues (“JSI”), or in an Ex-Parte Statement of Issues should the parties fail to agree on a JSI; f.

Hearings are based primarily on the parties’ written statements and supporting evidence, which are not exchanged before the hearing; g. The decision to accept testimonial evidence is completely in the hands of the arbitrator, and oral witness testimony is rare; h. The arbitrator has extremely broad investigative powers and is not bound by the rules of evidence and practice applicable to proceedings before courts, and the arbitrator may receive, hear, request and consider any evidence which he/she may consider relevant; i. The decision must be provided to the parties no later than thirty days after the hearing; j.

Decisions are typically short; k. Decisions typically refer to previous CROA decisions to substantiate the reasons. [ 16 ] The TRC filed an Ex Parte Statement of Issue with the CROA on January 4, 2017. It admitted that Mr. Fleischhacker had posted derogatory off-duty comments, but contended that those comments did not violate CN’s company policy, as they did not adversely affect CN or its employees or customers. On that basis, it sought his reinstatement. [ 17 ] A hearing was scheduled for May 9, 2017.

On April 20, 2017, CN advised the TRC that it intended to call evidence at the arbitration hearing and provided additional disclosure as to the complaints it had received and its responses to those complaints. The Chambers judge summarized this extraordinary turn of events in the QB decision: [19] A hearing date was scheduled for May 9, 2017. On April 20, 2017, CN advised the Union it would be calling a witness to speak to the impact of the Grievor’s comments upon its business.

Later that day, CN provided the Union with additional disclosure, comprised of: • January 25, 2016 email from FSIN Chief Bobby Cameron to CN’s Ombudsman entitled, “Serious breach of CN code of ethics.” • January 26, 2016 reply from CN Vice-President Olivier Chouc to Chief Cameron. • January 25, 2016 email from a person whose name had been redacted [redacted complainant] complaining about the comments, enclosing a screen capture of the comments, and calling for Mr.

Fleischhacker’s resignation. • Reply from Judy Szabo of the CN Ombudsman’s office to the redacted complainant indicating an investigation would occur. • January 26, 2016 email from Doug Devlin, Manager, Aboriginal Relations and Tribunal Affairs at CN to the redacted complainant. • Email from the redacted complainant to Judy Szabo thanking her for the reply and stating, in part, “We will keep you informed as to our course of action we take, which will involve the media and through advice from our legal counsel.” • March 5, 2016 complaint from another person whose name had been redacted [second redacted complainant]. • March 7, 2016 reply from Doug Devlin to the second redacted complainant. … [21] On May 25, 2017, the Union advised CN that it would be amending its Ex Parte Statement of Issue.

A Revised Ex Parte Statement of Issue was filed, repeating the content of the January 4, 2017 version but adding the following paragraph: The Union contends that the Company’s investigation violated

Article 117.2 of the collective agreement and related jurisprudence. As such, the discipline assessed ought to be ruled void ab initio and expunged. Mr. Fleischhacker should be reinstated with no loss of seniority, earnings or benefits. The Union raises this issue as a preliminary objection but is prepared to deal with this issue at the same time as this case is adjudicated on the merits. [ 18 ] CN refused to consent to the TRC’s proposed amendment.

As a result, the Arbitrator was obliged to deal with two preliminary issues at the hearing, which had been adjourned to June 13, 2017; that is, should the TRC be permitted to amend the Ex Parte Statement of Issue to assert the alleged violation of

Article 117.2 and, if so, should the termination be found to be void ab initio ? B. The Award [ 19 ] In the Award, the Arbitrator dealt first with the proposed amendment, finding in favour of the TRC. That finding is not at issue in this appeal. However, the Arbitrator’s explanation is of interest: In April 2017 the Union received, for the first time, details of the complaints filed with CN’s Ombudsman. Despite requests, and an assurance of full disclosure of what CN was relying upon, little if any of this was disclosed.

Until April 2017 the Union had no real notice of these matters beyond the references to “a complaint” and then to “two complaints” in the Vice-President’s letter. Significantly, in April it also learned that CN intended to rely upon these complaints to demonstrate its sensitivity to First Nations issues. CN had not put forward, to that point or even subsequently, a statement of issue that disclosed the assertion that the complaints themselves supported its

argument of corporate harm. …. I am not prepared to preclude the Union’s right to argue

Article 117.2 non​disclosure in the face of its requests and the Investigating Officer’s assurances. … (Award at 18) [ 20 ] The Arbitrator then turned to the alleged

Article 117.2 breach. He noted that CN and the TRC had emphasized different aspects of the CROA process and of the relationship between the investigation stage and the CROA hearing.

CN cited Canadian National Railway v United Transportation Union , CROA 1858, 1988 CarswellNat 2047 (WL) (Arbitrator: Michel Picher), for the proposition that while an investigation is intended to provide an expeditious, fair and open system of fact-finding in serious disciplinary cases, it is not intended to take on the trappings of judicial or quasi-judicial hearings. [ 21 ] The TRC, on the other hand, cited CROA decisions that, as the Arbitrator put it, “speak of the importance of fairness and disclosure at the investigation stage without which the CROA process would deteriorate into a series of full blown arbitrations, the antithesis of the expeditious process as the parties here hitherto know (and valued) it to be” (Award at 19).

The Arbitrator referred to Canadian National Railway Company v United Transportation Union , CROA 3322, 2003 CarswellNat 6532 (WL) (Arbitrator: Michel Picher), as one of the clearest expressions of this approach. In that case, Arbitrator Picher described a provision identical in substance to

Article 117.2(

b) as “the basis for what has generally been characterized as a ‘fair and impartial’ investigation, a precondition to the assessment of discipline against any employee”.

As the Arbitrator noted, Arbitrator Picher summarized his view of the CROA case law (including, in particular, Canadian National Railway Company v United Transportation Union , CROA 1475, 1986 CarswellNat 1796 (WL) (Arbitrator: David Kates); Canadian National Railway v Brotherhood of Maintenance of Way Employees , CROA 1734, 1987 CarswellNat 1970 (WL) (Arbitrator: Michel Picher); and Canadian National Railway Company v Canadian Council of Railway Operating Unions (United Transportation Union) , CROA 3061, 1999 CarswellNat 6027 (WL) (Arbitrator: Michel Picher), as follows: This Office has had a number of prior occasions to consider the principles which govern the application of provisions such as

article 82.2 of the instant collective agreement. It is well settled that a violation of these provisions amounts to the denial of a substantive right, the consequence of which is to render any discipline void ab initio , regardless of the merits of the case.

The reason for that firm rule is to safeguard the integrity of the expedited grievance and arbitration process established within the railway industry and the Canadian Railway Office of Arbitration . ... [Arbitrator Picher then cited CROA 1734] In the Arbitrator’s view this case raises issues fundamental to the integrity of the process of expedited hearings that is vital to the operation of the Canadian Railway Office of Arbitration.

By long established practice, this Office relies on written briefs, including the transcript of investigations conducted by the Company the content of which forms the basis of the decision to assess discipline against an employee. If the credibility of the expedited hearing process in this Office is to be preserved both the parties and the Arbitrator must be able to rely, without qualification, on a fair adherence to the minimal procedural requirements which the parties have placed into the Collective Agreement to facilitate the grievance and arbitration process in discipline cases.

Needless to say, irregularities at the investigation stage, particularly those which depart from the standard of full and fair disclosure reflected in

Article 18.2(

d) have the inevitable effect of undermining the integrity of the entire grievance and arbitration process so vital to the interests of both parties. (Emphasis added in the Award) [ 22 ] After rejecting CN’s submission that there could not have been a breach of

Article 117.2 because the investigator did not have physical possession of the correspondence, the Arbitrator dealt with the central issues. First, he asked whether CN had breached

Article 117.2 by failing to disclose the documents. He held that while “[n]ot every minor non-disclosure necessarily triggers an

Article 117.2 violation”, a breach had occurred in this case, as the documents disclosed by CN on April 20, 2017, were “keystone documents” (Award at 22–23). In doing so, he adopted the approach taken in Canadian National Railway Company v United Transportation Union , CROA 3452, 2004 CarswellNat 7031 (WL) (Arbitrator: M. Brian Keller). In that case, Arbitrator Keller found that a missing report was “the keystone document, the initial building block on which the Employer based its decision to discharge the grievor” and that it was fundamental to key issues in that case.

As Arbitrator Keller put it, the CROA had consistently found that the provision of all “material documents” to a grievor is a “basic element of a fair and impartial investigation” and, accordingly, that the termination of the employee “must be held to be null and void ab initio ”. In the result, he ordered the reinstatement of an employee who had breached the company’s drug policy and caused a collision which derailed two engines and four railcars. [ 23 ] Second, the Arbitrator asked the following question: does a breach of

Article 117.2 still render the subsequent discipline void ab initio ?

He asked the question in that fashion because the Chair of the investigation hearing had suggested to the parties that they consider the potential impact of three cases: Dunsmuir v New Brunswick , 2008 SCC 9 , [2008] 1 SCR 190 [ Dunsmuir ]; Alberta Union of Provincial Employees v Alberta , 2010 ABCA 216 , 482 AR 292 [ AUPE ]; and Alberta Health Services (Calgary Area) v Health Sciences Association of Alberta (Paramedical Professional/Technical Unit) , 2011 ABCA 306 , 515 AR 120 [ Alberta Health ], on this proposition. [ 24 ] The significance of these three cases was central to the QB decision and is very much at issue on this appeal.

As the Arbitrator correctly stated, “ Dunsmuir held that the unfair breach of a fixed term appointment for a public sector office holder no longer resulted in a ‘voiding’ of the action, and should only result in ordinary breach of contract remedies, where the damage, and remedy, are both dependent on the nature of the breach” (Award at 24). In AUPE and Alberta Health , the Alberta Court of Appeal applied this principle beyond the public office holder context considered in Dunsmuir , finding that a breach of procedural provisions in a collective agreement no longer renders the termination of an employee void.

Faced with this reasoning, the Arbitrator summarized his task and his conclusion as follows: The impact of Dunsmuir and these subsequent cases needs to be weighed against a long line of CROA cases that clearly hold a breach of Articles like 117.2 renders the discipline void ab initio . My review of these cases leads me to conclude the CROA authorities still apply. The distinction is that the CROA cases rely not only on simple contract

interpretation, but also express contractual terms, as well as on due

process and fairness concerns inherent in the structure of the CROA arrangement . (Emphasis added, Award at 25) [ 25 ] The Arbitrator then explained this statement.

He referred to Canadian Pacific Limited v Brotherhood of Maintenance of Way Employees , CROA 1562, 1986 CarswellNat 1723 (WL) (Arbitrator: Michel Picher), as illustrating that the CROA process has its roots in administrative law concepts of fairness and natural justice, and that basic aspects of fairness – notice of the allegations, notice of the hearing, and the right to attend in person and to hear and respond to all evidence at the investigative stage – must be provided.

He opined that while parties subscribing to the CROA could vary procedural requirements, “[w]hen standards have been adopted, then CROA adjudicators have viewed, and enforced them, in accordance with the following approach described in CROA 3221 [ Canadian Pacific Railway v Canadian Council of Railway Operating Unions (United Transportation Union) (2001) (Arbitrator: Michel Picher)]”: For reasons elaborated in prior awards of this Office, the standards which the parties have themselves adopted to define the elements of a fair and impartial hearing are mandatory and substantive, and a failure to respect them must result in the ensuing discipline being declared null and void (CROA 628, 1163, 1575, 1858, 2077, 2280, 2609 and 2901).

While those concerns may appear “technical”, it must again be emphasized that the integrity of the investigation process is highly important as it bears directly on the integrity of the expedited form of arbitration utilized in this Office , whereby the record of disciplinary investigations constitutes a substantial part of the evidence before the Arbitrator, and where the testimony of witnesses at the arbitration hearing is minimized. (See, generally, Picher, M.G. “The Canadian Railway Office of Arbitration: Keeping Grievance Hearings on the Rails” Labour Arbitration Yearbook 1991 pp 37-54 (Toronto 1991).) … (Emphasis added in the Award, at 26–27) [ 26 ] The Arbitrator also stressed that despite all of this, not every procedural breach is fatal.

Rather, he held that CROA case law confirms that it is possible to rectify such a breach.

However, it was his view that a breach could not be cured after the investigation was complete and the employee had been terminated, but only “ at the investigative stage, or at least at a stage where a further investigation could be convened ”. [ 27 ] The Arbitrator then described key features of the CROA system, which he characterized as a “longstanding, unique, and consensual modification” of the mainstream system of third-party arbitration that is a cornerstone of Canadian labour legislation: … By a combination of collective agreement terms (specific to each bargaining relationship) and adherence to the rules and procedures of the Canadian Office of Railway Arbitration, the parties allocate part of the “due process responsibilities” to the workplace and other parts to the CROA panels.

The CROA panels that carry responsibility for the resulting decisions can only ensure that overall due process is met by requiring the parties to adhere strictly to their part of the due process bargain. This is not just a matter of contract law, but of the administrative law rules that ensure that the basic elements of fairness such as those described above, are met in individual cases. CROA panels achieve this by ensuring that the parties comply with the pre-termination rules they have themselves agreed to.

But it is not only that they have agreed to them, it is because such agreements, despite the variety in content, are essential to the workings of the broader CROA system the parties have adopted. … (Award at 28–29) [ 28 ] In his view, there is also “another bargain between the parties” that supports this perspective; that is, the company has an opportunity to question the employee prior to deciding whether discipline should be assessed, while employees are afforded a minimum degree of due process, including, if requested, copies of “all pertinent statements, reports and other evidence in the possession of the investigation officer which may be used against the employee” (quoting from CP Rail v CAW – TAC Canada Rail Division, Local 101 (1992) (Arbitrator: Michel Picher), Award at 29).

Based on all of this, the Arbitrator summarized his view of the principles to be applied in this case: Breaches of the collective agreement pre-discipline due process terms go to the core of the CROA process. They are not (if fundamental) just oversights that can be excused because a full de novo arbitration hearing might be thought to rectify the breach. Again Arbitrator Picher’s comments in CROA 1734 and 3022 apply.

CROA proceedings were clearly not adopted on the premise that the hearing would itself be a new and independent look at discipline, as is the case in mainstream arbitration where the Employer carries the onus of proof and rarely has the formal opportunity to question the grievor and have that grievor bound by their replies. To say…that all deflects [ sic ] … can be mitigated by a de novo approach at the hearing is to undermine the entire CROA arrangement.

It is to reverse a long line of CROA jurisprudence which the parties have directed us, as CROA arbitrators, to respect. (Award at 29–30) [ 29 ] The Arbitrator then considered the application of these principles to Mr. Fleischhacker’s grievance: My conclusion is that the conduct of the investigation that led to this termination violated the requirements of

Article 117.2(b). This is compounded by the investigator’s assertion that all documents and matters the Company was relying had been produced. Both the Ombudsman and CN’s Vice-President had advised the complainants that investigations were being undertaken. It is clear that at the time CN had, to his knowledge, documents that it was relying upon, particularly as they related to its appropriate sensitivity to its relations with First Nations. I find I must hold the discipline void ab initio . (Award at 30) [ 30 ] Finally, the Arbitrator found that damages were not an appropriate remedy in such circumstances.

IV. The Queen’s bench decision [ 31 ] In the QB decision, the Chambers judge, after reviewing the facts and procedural history, dealt first with the standard of review. She held that the reasonableness standard applied, as the Arbitrator had been called upon to interpret certain provisions of the collective agreement “within the framework created by the MOU” (at para 33).

She correctly summarized the key aspects of the reasonableness standard as defined by Dunsmuir , describing it as a deferential standard concerned primarily with the existence of justification, transparency, and intelligibility, but noting that a decision must also fall within a range of possible, acceptable outcomes which are defensible in respect of the facts and the law. [ 32 ] The Chambers judge then addressed what she defined as the issue in Mr. Fleischhacker’s case: was the decision to void discipline ab initio reasonable?

She reviewed Dunsmuir , Slatter J.A.’s concurring judgment in AUPE , and the per curiam decision in Alberta Health , where the Alberta Court of Appeal held that Dunsmuir made it “clear that public law concepts of nullity for procedural errors have no place in the

interpretation and enforcement of contractual rights under collective agreements” (at para 22). She referred to Sumner v PCL Constructors Inc. , 2011 ABCA 326 , [2012] 1 WWR 649 [ Sumner ], leave to appeal refused [2012] SCCA No 32, in support of the same proposition. [ 33 ] The Chambers judge also found Canada Safeway Limited v Retail, Wholesale and Department Store Union, Local 454 , 2000 SKCA 119 , 196 DLR (4th) 518 (WL) [ Canada Safeway ], “relevant to the legal landscape within which the arbitrator made his decision” (at para 46).

In that case, the employer had suspended and then terminated an employee who had confessed that she was stealing from the employer. The termination violated provisions of the applicable collective agreement, which required that a shop steward or other member of the bargaining unit be present when discipline was administered. The arbitration board’s decision to set aside the dismissal and order reinstatement was upheld on judicial review. [ 34 ] This Court disagreed.

Justice Cameron, writing for the majority, addressed the consequence of failing to observe this provision of the collective agreement: [36] Turning, with this in mind, to the potential consequences in issue, the consequences of treating disciplinary action such as suspension or discharge as automatically null and void as a result of a failure to observe the requirement is fraught with difficulty. First, it implies presumptive and irreparable harm of the nature of that at stake, though harm of that nature does not inevitably accompany non- observance.

Second, it forecloses determination of the basic issue of whether just cause existed for suspension or discharge, for to render them null and void is to render them incapable of confirmation. Third, it serves to relieve the employee, in those instances where cause does exist, of his or her breach of a term of the employer-employee relationship, a term that may be fundamental to the relationship, such as that touching theft from the employer. Fourth, it preordains reinstatement as the remedial consequence of non-observance, even though this may be inappropriate.

Hence, to treat a suspension or discharge as automatically null and void as a result of any failure to observe the requirement tends to distort reality, overshoot the mark, and work serious inconvenience, injustice even. [37] Having regard for all of this, t o imply that any failure to observe the requirements of

Article 23.05 when suspending or discharging an employee results automatically in the nullification of the suspension or discharge is to imply too much .

It is to imply more than the provision is capable of reasonably supporting when properly construed. (Emphasis added) [ 35 ] As the Chambers judge noted, having so observed, Cameron J.A. found that having regard for the real harm of the breaches and the extent to which they affected the employee’s interests, the appropriate remedy was for the arbitration board to exclude the employee’s confession and deal with the grievance on the merits. [ 36 ] Based on that foundation, the Chambers judge dealt with the Award.

She commented that while the Arbitrator knew of and had invited submissions as to Dunsmuir , AUPE and Alberta Health , “he nevertheless chose to follow a line of CROA & DR authorities” (at para 53). In this context, the Chambers judge emphasized this statement by the Arbitrator (QB decision at para 53): ... the CROA authorities still apply. The distinction is that the CROA cases rely not only on simple contract

interpretation, but also express contractual terms, as well as on due process and fairness concerns inherent in the structure of the CROA arrangement. (Award at 25) [ 37 ] The Chambers judge took issue with the distinction drawn by the Arbitrator in this passage between these cases and Mr. Fleischhacker’s case on the basis that there are “express contractual terms” in this case. She noted that the collective agreement between CN and the TRC did not expressly state the consequences of a breach of

Article 117.2. She pointed out that AUPE and Alberta Health , like this case, were concerned with express contractual terms that imposed procedural requirements. As she put it, “the distinction upon which the arbitrator relies is not readily apparent” (at para 54). [ 38 ] The Chambers judge also dealt with the systemic CROA concerns at the heart of the Arbitrator’s reasoning: [55] Similarly, the due process and fairness concerns inherent in the CROA & DR arrangement do not provide a rational basis upon which to distinguish the weight of appellate authority.

Understandably, the arbitrator was concerned about the integrity of the CROA & DR arbitration process. Within that process, the investigation is of central importance, often forming the entire evidentiary basis upon which the arbitration proceeds. Compliance with

Article 117.2 represents the single, guaranteed opportunity for an employee to respond to the evidence against him or her. [56] Still, given the factual and legal context, the arbitrator’s failure to consider remedies other than reinstatement was unreasonable . Notably, just prior to reaching his conclusion that discipline must be voided ab initio he stated:

To say, based on cases like Wasaya v. ALPA 2010 Carswell Nat. 6233 , that all defects can be mitigated by a de novo approach at the hearing is to undermine the entire CROA arrangement. It is to reverse a long line of CROA jurisprudence which the parties have directed us, as CROA arbitrators, to respect. [57] What the award fails to recognize are the existence of alternate remedies that would preserve the integrity of the CROA & DR process without defaulting to a de novo approach.

For example, the complaints in CN’s possession at the time of the investigation, as well as the third complaint received after the investigation, could have been excluded from evidence. The result of such exclusion would be to place the Grievor in the same position he occupied prior to the late disclosure, underscore the importance of

Article 117.2 compliance, and allow the grievance to proceed on its merits. Alternatively, carefully circumscribed testimony from the Grievor, limited to the content of the complaints, would restore him to the same position. Failure to consider alternatives such as these, within the factual and legal context, is what renders the award unreasonable. (Emphasis added) [ 39 ] Wasaya Airways LP v ALPA , 2010 CarswellNat 6233 (WL) (Arbitrator: W.A. Marcotte), which is referred to in this passage, was not a CROA decision.

In that case, Arbitrator Marcotte found that the employer’s failure to provide the grievor the opportunity to defend himself before he was terminated had been cured.

The arbitrator relied, among other things, on the fact that the grievor had remained silent when faced with the employer’s decision, and that the hearing of the grievor’s complaint of dismissal in that case was de novo . [ 40 ] In the result, the Chambers judge found that while the Arbitrator’s reasoning was transparent, his reference to “express contractual terms” as a factor that distinguished the CROA authorities from Dunsmuir , AUPE , Alberta Health and Canada Safeway was unintelligible.

She also found that it was unreasonable to identify the only two options as either “voiding discipline ab initio or fundamentally altering the entire CROA & DR arrangement” (at para 58). Notably, the Chambers judge did not expressly conclude that finding the termination to be void ab initio was not justifiable on the facts or the law. She nonetheless remitted the matter to be determined on the merits. V.

STANDARD OF REVIEW [ 41 ] This Court’s role on an appeal from a judicial review decision is to determine whether the Chambers judge selected the correct standard of review, and correctly applied that standard: Kawula v Institute of Chartered Accountants of Saskatchewan , 2017 SKCA 70 at para 116 , 24 Admin LR (6th) 112; Dr. Q v College of Physicians and Surgeons of British Columbia , 2003 SCC 19 at paras 43–44 , [2003] 1 SCR 226.

In practice, once the appellate court has identified the correct standard of review, it “steps into the shoes” of the lower court, and reviews the decision of the administrative tribunal in accordance with that standard: Merck Frosst Canada Ltd. v Canada (Health) , 2012 SCC 3 at para 247 , [2012] 1 SCR 23; Harvey v Saskatchewan Legal Aid Commission , 2020 SKCA 110 at para 42 , 454 DLR (4th) 96. [ 42 ] On this appeal, this means that this Court’s task is to step into the shoes of the Chambers judge and review the Award. The issues on this appeal relate to the

interpretation and application of the collective agreement by the Arbitrator. CN agrees that the failure to disclose the documents constituted a breach of

Article 117.2. The question is whether the Arbitrator’s decision that the discipline imposed on Mr. Fleischhacker was void ab initio as a result of that breach was unreasonable. [ 43 ] The parties both take the position that the reasonableness standard of review applies to this issue. I agree. The Chambers judge (at paras 32–35) adopted the approach to reasonableness specified in Dunsmuir . She was correct in doing so, as she issued her reasons before the decision in Canada (Minister of Citizenship and Immigration) v Vavilov , 2019 SCC 65 , 441 DLR (4th) 1 [ Vavilov ].

Vavilov , like Dunsmuir , confirmed that reasonableness review is concerned with both outcome and process ( Vavilov at para 87 ). However, the Vavilov majority provided guidance by clarifying the process of reasonableness review. They instructed that where an administrative decision-maker has provided written reasons, “[a] reviewing court must begin its inquiry…by examining the reasons provided with ‘respectful attention’ and seeking to understand the reasoning process followed by the decision maker to arrive at its conclusion” (at para 84).

They summarized a reasonable decision as “one that is based on an internally coherent and rational chain of analysis and that is justified in relation to the facts and law that constrain the decision maker” (at para 85). A reviewing court must defer to a decision that meets that standard. [ 44 ] The Vavilov majority also held that where reasons for decision are required, “it is not enough for the outcome of a decision to be justifiable ” (emphasis in original, at para 86). Rather, the decision must be justified by the reasons.

For that reason, “[w]hile some outcomes may be so at odds with the legal and factual context that they could never be supported by intelligible and rational reasoning, an otherwise reasonable outcome also cannot stand if it was reached on an improper basis” (at para 86). However, Vavilov , like Dunsmuir and its progeny, also emphasized that reasonableness review is not a “line-by-line treasure hunt for error” (at para 102). Rather, the majority affirmed that the question is whether the decision as a whole is reasonable: [100] The burden is on the party challenging the decision to show that it is unreasonable.

Before a decision can be set aside on this basis, the reviewing court must be satisfied that there are sufficiently serious shortcomings in the decision such that it cannot be said to exhibit the requisite degree of justification, intelligibility and transparency. Any alleged flaws or shortcomings must be more than merely superficial or peripheral to the merits of the decision. It would be improper for a reviewing court to overturn an administrative decision simply because its reasoning exhibits a minor misstep.

Instead, the court must be satisfied that any shortcomings or flaws relied on by the party challenging the decision are sufficiently central or significant to render the decision unreasonable. [ 45 ] Based on the nature of the issues in this appeal, three other principles confirmed by Vavilov bear emphasis. First, administrative decision-makers are not bound by their previous decisions. However, past decisions of an administrative body are a constraint that a court should consider when determining whether the decision under review is reasonable ( Vavilov at paras 129 and 131 ).

A decision-maker that departs from established internal authority must explain the departure. This constraint reduces the risk of arbitrariness and protects public confidence in administrative decision-makers.

[ 46 ] As is apparent from the Arbitrator’s analysis, and as I will explain further below, there are many decisions by CROA arbitrators relating to the

interpretation of the collective agreement that are relevant to the central issues in this appeal. [ 47 ] Second, the Vavilov majority confirmed that court decisions may constrain an administrative decision-maker: [112] Any precedents on the issue before the administrative decision maker or on a similar issue will act as a constraint on what the decision maker can reasonably decide. An administrative body’s decision may be unreasonable on the basis that the body failed to explain or justify a departure from a binding precedent in which the same provision had been interpreted.

Where, for example, there is a relevant case in which a court considered a statutory provision, it would be unreasonable for an administrative decision maker to interpret or apply the provision without regard to that precedent. The decision maker would have to be able to explain why a different

interpretation is preferable by, for example, explaining why the court’s

interpretation does not work in the administrative context. … [ 48 ] However, the Court also made it clear that here, too, it is important to keep the deferential nature of reasonableness review in mind: [113] That being said, administrative decision makers will not necessarily be required to apply equitable and common law principles in the same manner as courts in order for their decisions to be reasonable. For example, it may be reasonable for a decision maker to adapt a common law or equitable doctrine to its administrative context: see Nor-Man Regional Health Authority , at paras. 5-6, 44-45, 52, 54 and 60.

Conversely, a decision maker that rigidly applies a common law doctrine without adapting it to the relevant administrative context may be acting unreasonably: see Delta Air Lines , at paras. 16-17 and 30.

In short, whether an administrative decision maker has acted reasonably in adapting a legal or equitable doctrine involves a highly context-specific determination. (Emphasis added) [ 49 ] Third, the majority stressed the need for the court to avoid straying into territory reserved to the arbitrator: [83] It follows that the focus of reasonableness review must be on the decision actually made by the decision maker, including both the decision maker’s reasoning process and the outcome.

The role of courts in these circumstances is to review , and they are, at least as a general rule, to refrain from deciding the issue themselves. Accordingly, a court applying the reasonableness standard does not ask what decision it would have made in place of that of the administrative decision maker, attempt to ascertain the “range” of possible conclusions that would have been open to the decision maker, conduct a de novo analysis or seek to determine the “correct” solution to the problem. The Federal Court of Appeal noted in Delios v.

Canada (Attorney General) , 2015 FCA 117 , 472 N.R. 171, that, “as reviewing judges, we do not make our own yardstick and then use that yardstick to measure what the administrator did”: at para. 28; see also Ryan , at paras. 50- 51. Instead, the reviewing court must consider only whether the decision made by the administrative decision maker — including both the rationale for the decision and the outcome to which it led — was unreasonable. (Emphasis added) VI.

Analysis [ 50 ] To begin, I would reiterate that the Chambers judge did not find that the Arbitrator’s conclusion that the termination was void ab initio was not justifiable on the facts and the law. Rather, she found that it was not justified , for two reasons. [ 51 ] First, she found the reference to “express contractual terms” as a basis to distinguish this case from AUPE and Alberta Health was unintelligible. As she noted, those cases, like this case, were concerned with breaches of express “procedural” provisions in collective agreements.

She was correct, to the extent that both of those cases were concerned with representational rights. [ 52 ] However, I do not agree that the Arbitrator’s reasoning was unintelligible in the manner identified by the Chambers judge. There is nothing to suggest the Arbitrator did not understand that AUPE and Alberta Health dealt with breaches of express terms in the relevant collective agreements.

Indeed, he quoted excerpts from both cases that referred to the specific terms at issue in them. [ 53 ] More importantly, the Arbitrator explained at length what he meant when he said those cases could be distinguished based on the existence of express contractual terms, and on “due process and fairness concerns inherent in the structure of the CROA arrangement” (Award at 25). His reasoning was firmly rooted in a long line of CROA decisions, which he well and clearly explained.

Those decisions and his view of the correct approach were founded on the unique features of the CROA system and, in particular, on the unique nature and import of the investigative stage, in a system which does not contemplate an arbitration hearing being conducted in the usual way. [ 54 ] The Arbitrator’s reasoning is intelligible. As is noted above, the correct approach in applying the reasonableness standard is to analyze the administrative decision-maker’s reasons as a whole, rather than conducting a “treasure hunt” for error.

Although there is a reasonable argument that use of the phrase “express contractual concerns”, taken alone, was difficult to comprehend, I would characterize it as, at worst, no more than a minor misstep in the language used in the context of a fully reasoned and comprehensible decision. [ 55 ] Further, the key difference between the reasoning in the CROA case law and the Award and that in AUPE and Canada Safeway – and the basis on which the Arbitrator distinguished that case law – is readily apparent.

The case law focuses on whether justice has been or can be done despite the employer’s breach of the collective agreement. That approach is concerned with case-specific factors such as the nature of the employee’s breach of the employment contract, the impact of that breach on the grievor and on the fairness of the disciplinary process in the particular case, and whether any prejudice suffered by the grievor can or must be cured.

Justice Cameron’s analysis in Canada Safeway is particularly clear in this respect. [ 56 ] The CROA authorities and the Arbitrator, on the other hand, emphasize systemic rather than case-specific concerns; that is, they focus on the need to protect the integrity of the unique CROA system that the parties agreed to adopt in the MOA to meet the particular needs of employers and employees in this industry. In doing so, the Arbitrator was taking account of a long-established line of CROA authority. He was not only entitled but, as Vavilov makes clear, obliged to take account of the CROA case law. In doing so, he was

obliged to take account of the MOA and of the potential impact of his decision on the CROA system that embodies that agreement. [ 57 ] The other reason the Chambers judge found the Award was not justified is that she concluded that the Arbitrator had failed to consider other alternatives that, in her view, would have both enabled a CROA arbitrator to deal with the merits of the termination and preserve the integrity of the CROA system. She specifically identified two other options that would, in her view, achieve both of these purposes.

In summarizing her conclusion on this point, she found that the Award was unreasonable because “the arbitrator identified his options as either voiding discipline ab initio or fundamentally altering the entire CROA…arrangement” (at para 58). [ 58 ] In my respectful opinion, this reasoning is flawed in several ways.

First, it runs afoul of the principle that “a court applying the reasonableness standard does not ask what decision it would have made in place of that of the administrative decision maker, attempt to ascertain the ‘range’ of possible conclusions that would have been open to the decision maker, conduct a de novo analysis or seek to determine the ‘correct’ solution to the problem ( Vavilov at para 83 ). The question to be answered by the reviewing court on a reasonableness review is not whether there was another decision the administrative decision-maker could have reasonably made.

The question is whether the decision they made was reasonable. Here, it was for the Arbitrator to determine the remedy, as long as his decision was both justified and justifiable. [ 59 ] Second, the Arbitrator did not treat this as a choice between two options of either voiding discipline or fundamentally altering the CROA arrangement. The Arbitrator was well aware of the approach taken in AUPE and Alberta Health and of the option of dealing with the matter on the merits.

He considered and rejected that approach, based on the CROA case law, and his analysis of the nature of the CROA process and the impact of a different approach on that process. To reiterate, he summarized his conclusion on this point as follows: Breaches of the collective agreement pre-discipline due process terms go to the core of the CROA process. They are not (if fundamental) just oversights that can be excused because a full de novo arbitration hearing might be thought to rectify the breach. … … To say, based on cases like Wasaya v.

ALPA 2010 Carswell Nat. 6233 , that all [defects]...can be mitigated by a de novo approach at the hearing is to undermine the entire CROA arrangement. It is to reverse a long line of CROA jurisprudence which the parties have directed us, as CROA arbitrators, to respect. (Award at 29–30) [ 60 ] Third, the Arbitrator’s analysis was nuanced. He did not say that every trivial breach of

Article 117.2 must result in a finding that the discipline is void. He found that he must void the discipline in the particular circumstances of this case. As noted above, he found that the documents that CN did not disclose were keystone documents, referring to Arbitrator Keller’s reference to those documents as “material”. He was concerned with breaches of “fundamental” procedural requirements. Further, it was his view that such breaches could be cured at the investigative stage, or at a stage where a further investigation could be “convened”.

This reflects the fact that the investigative stage is not only an agreed precondition to the imposition of discipline, but in the view of the Arbitrator, a fundamental aspect of the unique CROA process. [ 61 ] This nuanced approach is also reflected in the last paragraph of the Arbitrator’s analysis, which also bears repeating: My conclusion is that the conduct of the investigation that led to this termination violated the requirements of

Article 117.2(b). This is compounded by the investigator’s assertion that all documents and matters the Company was relying had been produced. Both the Ombudsman and CN’s Vice-President had advised the complainants that investigations were being undertaken. It is clear that at the time CN had, to his knowledge, documents that it was relying upon, particularly as they related to its appropriate sensitivity to its relations with First Nations.

I find I must hold the discipline void ab initio . (Award at 30) [ 62 ] Fourth, as a matter of form, the Chambers judge appears to have treated this alleged “two options only” error as a failure to justify the decision. Cast in the terms specified in Vavilov , she might be said to have concluded that this was an error by the Arbitrator in the rational chain of analysis. For the reasons I have explained above, I respectfully disagree.

The Award contains a coherent and rational chain of analysis. [ 63 ] Further, the Chambers judge did more than find that the Arbitrator should have considered other options and had accordingly failed to justify his decision. She did not remit the matter to the Arbitrator to consider other options. Rather, she remitted the matter to the Arbitrator to conduct a hearing on the merits. By doing so, she substituted her decision for that of the Arbitrator as to the appropriate remedy and strayed into territory reserved to the Arbitrator.

Put differently, her choice of remedy meant that she effectively found – in my view incorrectly – that the remedy chosen by the arbitrator was unreasonable not only because it was not justified by the Award, but that it was not justifiable based on the facts and the law. [ 64 ] For these reasons, it is my opinion that the Arbitrator’s decision that the discipline was void ab initio – that is, that it would be treated as a nullity from the outset – was reasonable. It was based on the Arbitrator’s

interpretation of the collective agreement, taking account of contextual factors, and his findings of fact. Such a remedy is not unknown in a contractual setting and is not precluded as a matter of law in relation to every contract, despite the Dunsmuir line of authority. The Arbitrator justified his decision to follow the long- established CROA approach despite that line of authority, both generally and in this case. That decision was defensible based on the facts and the law. VII. conclusion

[ 65 ] In the result, I would allow the appeal and restore the decision of the Arbitrator that the termination was void ab initio , with costs of the application in the Court of Queen’s Bench, and costs of this appeal on Column 2. “Barrington-Foote J.A.” Barrington-Foote J.A. I concur. “Caldwell J.A.” Caldwell J.A. I concur. “Leurer J.A.” Leurer J.A.