Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324

Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324
Collection
Supreme Court Judgments
Date
2003-09-18
Neutral citation
2003 SCC 42
Report
[2003] 2 SCR 157
Case number
28819
Judges
McLachlin, Beverley; Gonthier, Charles Doherty; Iacobucci, Frank; Major, John C.; Bastarache, Michel; Binnie, William Ian Corneil; Arbour, Louise; LeBel, Louis; Deschamps, Marie
On appeal from
Ontario
Subjects
Labour law
Notes
SCC Case Information: 28819
Decision Content
Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324, [2003] 2 S.C.R. 157, 2003 SCC 42
District of Parry Sound Social Services Administration Board Appellant
v.
Ontario Public Service Employees Union, Local 324 Respondent
and
Ontario Human Rights Commission Intervener
Indexed as: Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324
Neutral citation: 2003 SCC 42.
File No.: 28819.
2003: January 24; 2003: September 18.
Present: McLachlin C.J. and Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour, LeBel and Deschamps JJ.
on appeal from the court of appeal for ontario
Labour relations — Arbitration — Jurisdiction — Human rights — Collective agreement providing that probationary employee may be discharged at sole discretion of and for any reason satisfactory to employer and such discharge not subject to grievance and arbitration procedures — Probationary employee discharged shortly after return from maternity leave — Employee filing grievance — Whether grievance arbitrable — Whether substantive rights and obligations of Human Rights Code implicitly incorporated within all collective agreements over which arbitrator has jurisdiction — Labour Relations Act, 1995, S.O. 1995, c. 1, Sch. A, s. 48(1), (12)(j) — Human Rights Code, R.S.O. 1990, c. H.19, s. 5(1).
Labour relations — Collective agreement — Grievance — Procedural requirements — Arbitration — Employment standards — Probationary employee discharged shortly after return from maternity leave — Employee filing grievance — Collective agreement providing that grievance must set out section of agreement that is alleged to have been violated — Employment Standards Act barring discrimination on basis of “pregnancy leave” explicitly incorporated within all collective agreements — Employment Standards Act claim not raised by Union at any stage of proceedings — Whether Union’s failure to raise Employment Standards Act curable — Whether s. 64.5(4) of Employment Standards Act binding Union to prior decision not to seek enforcement of the Act — Whether Court of Appeal erred in raising and resolving appeal on basis of Employment Standards Act — Employment Standards Act, R.S.O. 1990, c. E.14, ss. 44, 64.5(1).
O was a probationary employee of the appellant employer and a member of the respondent Union. Her terms of employment were governed by a collective agreement which states that “a probationary employee may be discharged at the sole discretion of and for any reason satisfactory to the Employer and such action by the Employer is not subject to the grievance and arbitration procedures and does not constitute a difference between the parties”. Prior to the expiry of her probationary term, O went on maternity leave. Within a few days of returning to work, the employer discharged her. O filed a grievance.
The majority of the Board of Arbitration found that s. 48(12)(j) of the Ontario Labour Relations Act, 1995 (“LRA”), empowers a board of arbitration to interpret a collective agreement in a manner consistent with the Human Rights Code and imports the substantive rights of the Human Rights Code into a collective agreement over which an arbitrator has jurisdiction. The Board ruled that it was entitled to consider whether O had been a victim of discrimination under the Human Rights Code. The Divisional Court granted the employer’s application for judicial review, holding that s. 48(12)(j) confers power on a board of arbitration to interpret and apply the Human Rights Code when and if it already has jurisdiction to hear a grievance, but not otherwise. Because the grievance was not a difference arising out of the collective agreement, the Board did not have the jurisdiction to resolve the dispute. The Court of Appeal set aside the decision. Although the court was inclined to the view that the Divisional Court erred in its application of s. 48(12)(j) of the LRA, it preferred not to express a concluded opinion on this question. The court decided the matter with reference to the Employment Standards Act (“ESA”), noting, first, that s. 44 of the ESA provides that an employer shall not dismiss an employee because the employee takes “pregnancy leave” and, second, that under s. 64.5(1) of the ESA, the terms and conditions of the ESA are enforceable against the employer as if they were a part of the collective agreement. The Court of Appeal concluded, therefore, that the Board had jurisdiction to consider whether O’s dismissal was inconsistent with s. 44.
Held (Major and LeBel JJ. dissenting): The appeal should be dismissed.
Per McLachlin C.J. and Gonthier, Iacobucci, Bastarache, Binnie, Arbour and Deschamps JJ.: The Board was correct to conclude that the substantive rights and obligations of the Human Rights Code are incorporated into each collective agreement over which an arbitrator has jurisdiction. Under a collective agreement, the broad rights of an employer to manage the enterprise and direct the work force are subject not only to the express provisions of the collective agreement, but also to statutory provisions of the Human Rights Code and other employment‑related statutes. The absence of an express provision that prohibits the violation of a particular statutory right is insufficient to conclude that a violation of that right does not constitute a violation of the collective agreement. Rather, human rights and other employment‑related statutes establish a floor beneath which an employer and union cannot contract. The plain and ordinary meaning of s. 48(12)(j) of the LRA, which provides that an arbitrator has the power “to interpret and apply human rights and other employment‑related statutes, despite any conflict between those statutes and the terms of the collective agreement”, affirms that grievance arbitrators have not only the power but also the responsibility to implement and enforce the substantive rights and obligations of human rights and other employment‑related statutes as if they were part of the collective agreement. Granting arbitrators the authority to enforce the substantive rights and obligations of human rights and other employment‑related statutes also advances the stated purposes of the LRA, which include promoting the expeditious resolution of workplace disputes, and has the additional advantage of bolstering human rights protection. The fact that the Human Rights Commission currently has greater expertise than the Board in respect of human rights violations is an insufficient basis on which to conclude that a grievance arbitrator ought not to have the power to enforce the rights and obligations of the Human Rights Code. An alleged violation of the Human Rights Code therefore constitutes an alleged violation of the collective agreement and falls squarely within the Board’s jurisdiction. Accordingly, the Board’s finding that the discriminatory discharge of a probationary employee is arbitrable is not patently unreasonable and should be upheld.
Even if there was no basis on which to conclude that the alleged violation of the Human Rights Code is arbitrable, the application of ss. 44 and 64.5(1) of the ESA leads to the conclusion that the subject matter of O’s grievance is arbitrable. The joint effect of ss. 44 and 64.5(1) is that each collective agreement is deemed to contain a provision that prohibits the discharge of a probationary employee because she took or intends to take pregnancy leave. Thus, the subject matter of O’s grievance clearly constitutes a dispute that arises under a collective agreement over which the Board has jurisdiction.
It was not improper for the Court of Appeal to take into account the fact that the substantive rights and obligations of the ESA are incorporated directly into each collective agreement. The finding under review is not the Board’s finding that s. 5(1) of the Human Rights Code is enforceable against the employer, but its finding that O’s grievance is arbitrable. If the Court of Appeal had upheld the Divisional Court’s decision to reverse the arbitration award without taking into account the potential impact of ss. 44 and 64.5(1) of the ESA, it would arguably have committed an error of law.
The Union was not bound by its prior decision not to seek enforcement of s. 44 of the ESA at the initial hearing. The purpose of s. 64.5(4) of the ESA is not to bind a union to such a prior decision, but, rather, to affirm the principle that an employee to whom a collective agreement applies is not entitled to file or maintain a complaint under the Act.
Lastly, the Union’s failure to comply with the procedural requirements of the collective agreement, which demand that a discharge grievance must set out the section of the collective agreement that is alleged to have been violated, does not preclude the Union from subsequently raising s. 44 of the ESA as a potential basis of liability. Procedural requirements should not be stringently enforced in those instances where, as here, the employer suffered no prejudice.
Per Major and LeBel JJ. (dissenting): O’s Human Rights Code claim is not the subject of the agreement between her employer and her Union, and is therefore not arbitrable. Unless the legislature passes legislation incorporating the substance of its statutes into collective agreements, it is to be assumed that unions and employers may define which employees and disputes are covered by a collective agreement and therefore have access to binding arbitration, as long as the agreement does not conflict with statute or public policy. Absent legislative action, courts should not on their own initiative interfere with the terms of a collective agreement. Here, the Human Rights Code is not implicitly incorporated into all collective agreements. To read into s. 48(12)(j) of the LRA the extraordinary power to take jurisdiction of any claim based on statute, despite the plain wishes of the parties to the contract, is a subversion of the legislative intent. If the legislature wished to thus expand the power of arbitrators, it would have signalled its intent more clearly. O’s dismissal is not arbitrable because her Union and her employer agreed not to cover the dismissal of probationary employees in their collective agreement, and the legislature did not intend to require that they do so.
It was improper for the Court of Appeal, sua sponte, to ignore the procedural requirements negotiated by the parties and raise the ESA argument. Article 8.06(a) of the collective agreement clearly required the Union to state “the section or sections of the Agreement which are alleged to have been violated”. The Union should therefore have raised s. 44 of the ESA, barring employment discrimination on the basis of “pregnancy leave”, which the legislature has explicitly incorporated into all collective agreements via s. 64.5(1) of the ESA. This the Union chose not to do. Even if the failure to raise the ESA might have been curable or seen as a simple procedural defect, the Union would at the very least have had the obligation to raise the matter at the arbitration stage. The Union and O should be bound by the specific claims they made and the manner in which they presented them. The Court of Appeal erred in raising this issue, not chosen by the parties.
O is not without a remedy. She may use the mechanisms carefully set out by the legislature to vindicate her human rights, and may bring her claim before the Human Rights Commission, as the employer urged and as the legislature intended.
Cases Cited
By Iacobucci J.
Applied: McLeod v. Egan, [1975] 1 S.C.R. 517; referred to: Volvo Canada Ltd. v. U.A.W., Local 720, [1980] 1 S.C.R. 178; Douglas Aircraft Co. of Canada v. McConnell, [1980] 1 S.C.R. 245; Dayco (Canada) Ltd. v. CAW‑Canada, [1993] 2 S.C.R. 230; Toronto (City) Board of Education v. O.S.S.T.F., District 15, [1997] 1 S.C.R. 487; Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748; C.U.P.E. v. Ontario (Minister of Labour), [2003] 1 S.C.R. 539, 2003 SCC 29; Canadian Broadcasting Corp. v. Canada (Labour Relations Board), [1995] 1 S.C.R. 157; United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316; Goodyear Tire & Rubber Co. of Canada v. T. Eaton Co., [1956] S.C.R. 610; Slaight Communications Inc. v. Davidson, [1989] 1 S.C.R. 1038; Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27; Heustis v. New Brunswick Electric Power Commission, [1979] 2 S.C.R. 768; Blanchard v. Control Data Canada Ltd., [1984] 2 S.C.R. 476; Suresh v. Canada (Minister of Citizenship and Immigration), [2002] 1 S.C.R. 3, 2002 SCC 1; Re Blouin Drywall Contractors Ltd. and United Brotherhood of Carpenters and Joiners of America, Local 2486 (1975), 8 O.R. (2d) 103; Spruce Falls Inc. and I.W.A.‑Canada, Local 2995 (Trudel) (Re) (2002), 106 L.A.C. (4th) 41; Peel District School Board and O.P.S.T.F., District 19 (Havery) (Re) (2000), 84 L.A.C. (4th) 289; Re Harry Woods Transport Ltd. and Teamsters Union, Local 141 (1977), 15 L.A.C. (2d) 140; Aro Canada Inc. and I.A.M., Re (1988), 34 L.A.C. (3d) 255; Liquid Carbonic Inc. and U.S.W.A., Re (1992), 25 L.A.C. (4th) 144.
By Major J. (dissenting)
McLeod v. Egan, [1975] 1 S.C.R. 517; Bank of Toronto v. Perkins (1883), 8 S.C.R. 603.
Statutes and Regulations Cited
Employment Standards Act, R.S.O. 1990, c. E.14, ss. 44, 64.5(1)‑(4) [ad. 1996, c. 23, s. 18].
Employment Standards Act, 1968, S.O. 1968, c. 35, s. 11(2).
Human Rights Code, R.S.O. 1990, c. H.19, s. 5(1) [am. 1999, c. 6, s. 28(5)].
Labour Relations Act, R.S.O. 1990, c. L.2, s. 45(8)3 [rep. & sub. 1992, c. 21, s. 23(3)].
Labour Relations Act, 1995, S.O. 1995, c. 1, Sch. A., s. 48(1), (12).
Authors Cited
Brown, Donald J. M., and David M. Beatty. Canadian Labour Arbitration, 3rd ed. Aurora, Ont.: Canada Law Book (loose‑leaf updated April 2003, release 39).
Driedger, Elmer A. Construction of Statutes, 2nd ed. Toronto: Butterworths, 1983.
Ontario. Ministry of Labour. Proposed Reform of the Ontario Labour Relations Act. Toronto: Ministry of Labour, 1991.
Oxford English Dictionary, 2nd ed., vol. I. Oxford: Clarendon Press, 1989, “apply”.
Weiler, Paul. Reconcilable Differences: New Directions in Canadian Labour Law. Toronto: Carswell, 1980.
Weiler, Paul. “The Remedial Authority of the Labour Arbitrator: Revised Judicial Version” (1974), 52 Can. Bar Rev. 29.
APPEAL from a judgment of the Ontario Court of Appeal (2001), 54 O.R. (3d) 321, 147 O.A.C. 183, 10 C.C.E.L. (3d) 290, 40 C.H.R.R. D/190, 2002 C.L.L.C. ¶210‑005, [2001] O.J. No. 2316 (QL), setting aside a judgment of the Divisional Court (2000), 131 O.A.C. 122, 2000 C.L.L.C. ¶220‑336, [2000] O.J. No. 475 (QL). Appeal dismissed, Major and LeBel JJ. dissenting.
William G. Horton, Cathy Beagan Flood and Robert B. Budd, for the appellant.
Timothy G. M. Hadwen and Peggy E. Smith, for the respondent.
Naomi Overend and Prabhu Rajan, for the intervener.
The judgment of McLachlin C.J. and Gonthier, Iacobucci, Bastarache, Binnie, Arbour and Deschamps JJ. was delivered by
1 Iacobucci J. — This appeal raises questions about the application of human rights and other employment-related statutes in the context of a collective agreement. More specifically, does a grievance arbitrator have the power to enforce the substantive rights and obligations of human rights and other employment-related statutes and, if so, under what circumstances? As I discuss in these reasons, I conclude that a grievance arbitrator has the power and responsibility to enforce the substantive rights and obligations of human rights and other employment-related statutes as if they were part of the collective agreement. Consequently, I would dismiss the appeal.
I. Background
2 Joanne O’Brien was a probationary employee of the appellant District of Parry Sound Social Services Administration Board and a member of the respondent Ontario Public Service Employees Union (the “Union”). Her terms of employment were governed by a collective agreement negotiated between the parties. For the purposes of this appeal, the most important provision of the collective agreement is Article 5.01:
ARTICLE 5 – MANAGEMENT RIGHTS
5.01 The Union recognizes that the management of the operations and the direction of the employees are fixed exclusively in the Employer and shall remain solely with the Employer except as expressly limited by the clear and explicit language of some other provision of this Agreement and, without restricting the generality of the foregoing, the Union acknowledges that it is the exclusive function of the Employer to:
. . .
(b) hire, assign, retire, promote, demote, classify, transfer, direct, lay off, recall and to suspend, discipline or discharge employees who have successfully completed their probationary period for just cause provided that a claim by an employee who has successfully completed his/her probationary period that she/he has been disciplined, suspended or discharged without just cause may be the subject of a grievance and dealt with as hereinafter provided;
3 Under Article 5.01, the Union recognizes that management has the right to manage the enterprise and direct the work force, subject only to express provisions of the collective agreement that provide otherwise. On its face, Article 5.01 is sufficiently broad to include the right of the employer to discharge an employee. Under paragraph (b), a claim by an employee who has successfully completed his or her probationary period that she or he has been disciplined without just cause may be the subject of a grievance. The right of the appellant to manage the enterprise is thus subject to the right of an employee who has completed the probationary period not to be discharged without just cause. There is no provision that limits the right of the employer to discharge a probationary employee. To the contrary, Article 8.06(a), under the heading “Grievance Procedure”, states that “a probationary employee may be discharged at the sole discretion of and for any reason satisfactory to the Employer and such action by the Employer is not subject to the grievance and arbitration procedures and does not constitute a difference between the parties”.
4 Prior to the expiry of her probationary term, Ms. O’Brien went on maternity leave. Within a few days of returning to work, the appellant discharged her. On June 26, 1998, Ms. O’Brien filed a grievance with the Union. The grievance alleged as follows:
I grieve that I have been discharged from my position without justification and that this decision was arbitrary, discriminatory, in bad faith and unfair.
At the arbitration hearing, the appellant objected on the basis that the Board of Arbitration (the “Board”) did not have jurisdiction over the subject matter of the grievance. It was the appellant’s submission that the collective agreement clearly expressed that it was the parties’ intention that the discharge of a probationary employee was not arbitrable. The appellant submitted that the parties have the right to make such a bargain and that it would be a jurisdictional error for the Board to resolve the dispute.
II. Relevant Legislative Provisions
5 Employment Standards Act, R.S.O. 1990, c. E.14
44. An employer shall not intimidate, discipline, suspend, lay off, dismiss or impose a penalty on an employee because the employee is or will become eligible to take, intends to take or takes pregnancy leave or parental leave.
64.5 (1) If an employer enters into a collective agreement, the Act is enforceable against the employer with respect to the following matters as if it were part of the collective agreement:
1. A contravention of or failure to comply with the Act that occurs when the collective agreement is in force.
. . .
(2) An employee to whom a collective agreement applies (including an employee who is not a member of the trade union) is not entitled to file or maintain a complaint under the Act.
(3) Despite subsection (2), the Director may permit an employee to file or maintain a complaint under the Act if the Director considers it appropriate in the circumstances.
(4) An employee to whom a collective agreement applies (including an employee who is not a member of the trade union) is bound by a decision of the trade union with respect to the enforcement of the Act under the collective agreement, including a decision not to seek the enforcement of the Act.
Labour Relations Act, 1995, S.O. 1995, c. 1, Sch. A
48. (1) Every collective agreement shall provide for the final and binding settlement by arbitration, without stoppage of work, of all differences between the parties arising from the interpretation, application, administration or alleged violation of the agreement, including any question as to whether a matter is arbitrable.
. . .
(12) An arbitrator or the chair of an arbitration board, as the case may be, has power,
(a) to require any party to furnish particulars before or during a hearing;
(b) to require any party to produce documents or things that may be relevant to the matter and to do so before or during the hearing;
(c) to fix dates for the commencement and continuation of hearings;
(d) to summon and enforce the attendance of witnesses and to compel them to give oral or written evidence on oath in the same manner as a court of record in civil cases; and
(e) to administer oaths and affirmations,
and an arbitrator or an arbitration board, as the case may be, has power,
(f) to accept the oral or written evidence as the arbitrator or the arbitration board, as the case may be, in its discretion considers proper, whether admissible in a court of law or not;
(g) to enter any premises where work is being done or has been done by the employees or in which the employer carries on business or where anything is taking place or has taken place concerning any of the differences submitted to the arbitrator or the arbitration board, and inspect and view any work, material, machinery, appliance or article therein, and interrogate any person respecting any such thing or any of such differences;
(h) to authorize any person to do anything that the arbitrator or arbitration board may do under clause (g) and to report to the arbitrator or the arbitration board thereon;
(i) to make interim orders concerning procedural matters;
(j) to interpret and apply human rights and other employment-related statutes, despite any conflict between those statutes and the terms of the collective agreement.
Human Rights Code, R.S.O. 1990, c. H.19
5.—(1) Every person has a right to equal treatment with respect to employment without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, age, record of offences, marital status, same-sex partnership status, family status or handicap.
III. Judicial History
A. Arbitration Award (February 1, 1999)
6 The majority of the Board found that the collective agreement, considered alone, imposed no restriction on the right of the employer to discharge probationary employees. The language of the collective agreement clearly indicated that it was not the parties’ intention that the discharge of a probationary employee would be arbitrable.
7 The majority of the Board then considered the impact of s. 48(12)(j) of the Labour Relations Act, 1995 (“LRA”). The Board found that s. 48(12)(j) obligates and empowers a board of arbitration to interpret a collective agreement in a manner consistent with the Human Rights Code. Section 48(12)(j), in other words, imports the substantive rights of the Human Rights Code into a collective agreement over which an arbitrator has jurisdiction. The majority of the Board thus determined that it had the power and responsibility to hear and determine the narrow question of whether discrimination was a factor in the discharge of Ms. O’Brien.
8 Board member O’Byrne dissented on the basis that s. 48(12)(j) of the LRA can only be utilized if an arbitrator has jurisdiction in the first instance. In his view, the fact that the difference did not arise out of the express terms and conditions of the collective agreement should have been sufficient to dispose of the matter. He concluded that the Board did not have jurisdiction to resolve this dispute.
B. Ontario Superior Court of Justice (Divisional Court) (2000), 131 O.A.C. 122
9 On an application for judicial review, O’Leary J. held that s. 48(12)(j) of the LRA confers power on a board of arbitration to interpret and apply the Human Rights Code when and if it already has jurisdiction to hear a grievance, but not otherwise. On this view, the Board has jurisdiction only over differences between the parties arising from the interpretation, application, administration or alleged violation of the express terms and conditions of the collective agreement. Because the grievance was not a difference arising out of the collective agreement, O’Leary J. was of the view that the Board did not have the jurisdiction to resolve the dispute. If there is no difference arising out of the four corners of the collective agreement, s. 48(12)(j) is of no application.
C. Ontario Court of Appeal (2001), 54 O.R. (3d) 321
10 According to Morden J.A., the approach adopted by the Divisional Court gives too narrow a meaning to s. 48(12)(j) of the LRA. In his view, s. 48(12)(j) requires arbitrators to interpret the collective agreement in the context of the relevant statutory provisions. The collective agreement must be read in light of human rights and other employment-related statutes. If the terms of the collective agreement are in conflict with the Human Rights Code, the Human Rights Code will prevail. Applying this reasoning to the facts of this case, Morden J.A. found that the right of the employer under the collective agreement to discharge a probationary employee “for any reason satisfactory to the employer” is in direct conflict with s. 5(1) of the Human Rights Code. He concluded that Article 8.06 should be read down not to include the power to discharge for discriminatory reasons.
11 In the end, however, Morden J.A. chose not to rely on the preceding analysis for the purpose of disposing of the appeal. His reasoning was that he felt that the requirement of an express conflict between the statute and the collective agreement could involve some incongruity. In his view, the requirement of a direct conflict between the statute and the agreement would have the incongruous result that an arbitrator will find the dispute arbitrable and resolve it on the basis of the external statute where the parties have said something inconsistent with the statute, but not where they have said nothing at all on the matter. Noting that this feature of s. 48(12)(j) results in some uncertainty regarding the scope of its application, Morden J.A. chose not to resolve the matter on this basis.
12 Instead, Morden J.A. decided the matter with reference to the Employment Standards Act (“ESA”), which he considered to be a much firmer ground. Morden J.A. first noted that s. 44 of the ESA provides that an employer shall not dismiss an employee because the employee takes pregnancy leave or parental leave. He then noted that under s. 64.5(1) of the ESA the terms and conditions of the Act are enforceable against the employer as if they were a part of the collective agreement. In view of the direct incorporation of the ESA into the collective agreement, Morden J.A. found that the Board had jurisdiction to consider whether the dismissal of Ms. O’Brien was inconsistent with s. 44 of the ESA.
13 Morden J.A. rejected the appellant’s submission that the court should not resolve the matter with reference to the ESA because the statute was not raised before the Board; he did so on the basis that the appellant would suffer no prejudice if the matter was resolved in this manner. Having concluded that the Board had jurisdiction to resolve the grievance, Morden J.A. allowed the appeal and made an order dismissing the application for judicial review.
IV. Issues
14 The principal question in this appeal concerns the Board’s finding that Ms. O’Brien’s grievance is arbitrable. In reviewing this finding, the primary substantive question to be answered is whether the substantive rights and obligations of the Human Rights Code are incorporated into a collective agreement over which the Board has jurisdiction. A second question that arises is whether it was appropriate for the Court of Appeal to determine that the subject matter of the grievance is arbitrable on the basis that the substantive rights and obligations of the ESA are incorporated into the collective agreement.
15 I also note that the Ontario Human Rights Commission has intervened in this appeal for the purpose of ensuring that its jurisdiction is not ousted because the aggrieved employee is a party to a collective agreement over which the Board has jurisdiction. The Commission submits that if the Court finds that the grievance is arbitrable, the Board and the Commission have concurrent jurisdiction. In my view, it is unnecessary to determine this matter at the present time. Consequently, in concluding that a grievance arbitrator has the power and responsibility to enforce the substantive rights and obligations of the Human Rights Code in this case, I make no holding on whether the jurisdiction of the Human Rights Commission is ousted by that of the Board.
V. Analysis
A. What is the Appropriate Standard of Review?
16 Where an arbitration board is called upon to determine whether a matter is arbitrable, it is well-established that a reviewing court can only intervene in the case of a patently unreasonable error. See for example Volvo Canada Ltd. v. U.A.W., Local 720, [1980] 1 S.C.R. 178; Douglas Aircraft Co. of Canada v. McConnell, [1980] 1 S.C.R. 245; Dayco (Canada) Ltd. v. CAW-Canada, [1993] 2 S.C.R. 230; and Toronto (City) Board of Education v. O.S.S.T.F., District 15, [1997] 1 S.C.R. 487.
17 This high degree of curial deference to the decisions of arbitration boards is necessary to maintain the integrity of the grievance arbitration process. As Cory J. wrote in Toronto Board of Education, supra, at para. 36, “the whole purpose of a system of grievance arbitration is to secure prompt, final and binding settlement of disputes arising out of the interpretation or application of collective agreements and the disciplinary actions taken by an employer”. This is a basic requirement for peace and harmony in industrial relations, which is important both to the parties and to society as a whole. The protective clause found in s. 48(1) of the LRA is the legislative recognition that the basic nature of labour disputes requires their prompt and final resolution by expert tribunals.
18 The patent unreasonableness standard is a very high standard that will not easily be met. In Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748, at para. 57, the Court described the difference between an unreasonable and patently unreasonable decision in the following terms:
The difference . . . lies in the immediacy or obviousness of the defect. If the defect is apparent on the face of the tribunal’s reasons, then the tribunal’s decision is patently unreasonable. But if it takes some significant searching or testing to find the defect, then the decision is unreasonable but not patently unreasonable. As Cory J. observed in Canada (Attorney General) v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941, at p. 963, “[i]n the Shorter Oxford English Dictionary ‘patently’, an adverb, is defined as ‘openly, evidently, clearly’”. This is not to say, of course, that judges reviewing a decision on the standard of patent unreasonableness may not examine the record. If the decision under review is sufficiently difficult, then perhaps a great deal of reading and thinking will be required before the judge will be able to grasp the dimensions of the problem. . . . But once the lines of the problem have come into focus, if the decision is patently unreasonable, then the unreasonableness will be evident. [Emphasis added.]
See also C.U.P.E. v. Ontario (Minister of Labour), [2003] 1 S.C.R. 539, 2003 SCC 29.
B. Was the Arbitration Award Patently Unreasonable?
19 As La Forest J. noted in Dayco, supra, at p. 251, the collective agreement is the “foundation” of a grievance arbitrator’s jurisdiction. Absent a violation of the collective agreement, a grievance arbitrator has no jurisdiction over a dispute; if the alleged misconduct does not constitute a violation of the collective agreement, there is no basis on which to conclude that a dispute is arbitrable.
20 In the present case, the parties are in agreement that the express provisions of the collective agreement in question impose no fetters on the employer’s right to discharge a probationary employee. The Union, however, submits that s. 5(1) of the Human Rights Code is implicit in the collective agreement between the parties. If this is the case, there is no doubt that the discriminatory discharge of a probationary employee is arbitrable. Under s. 5(1), every person has a right to equal treatment with respect to employment without discrimination. Ms. O’Brien’s grievance — that she was discharged for discriminatory reasons — falls squarely within s. 5(1) of the Human Rights Code. If s. 5(1) is implicit in the collective agreement between the parties, the grievance falls squarely within the ambit of the collective agreement as well. But if s. 5(1) of the Human Rights Code is not incorporated into the collective agreement between the parties, it is equally obvious that the discriminatory discharge of a probationary employee is not arbitrable.
21 Consequently, the critical issue to be determined at the arbitration hearing was whether or not the substantive rights and obligations of the Human Rights Code are incorporated into each collective agreement over which the Board has jurisdiction. Put a different way, it is only once this issue has been resolved that the lines of the problem come into focus. This, in my opinion, is an issue that the Board must resolve correctly. As the Court concluded in Canadian Broadcasting Corp. v. Canada (Labour Relations Board), [1995] 1 S.C.R. 157, at para. 49, there may be instances in which the reasonableness of a tribunal’s decision is dependent on it having correctly answered a question of law in the course of reaching that decision. If the critical question that the tribunal must answer is a question of law that is outside its area of expertise and that the legislature did not intend to leave to the tribunal, the tribunal must answer that question correctly.
22 The question of whether the substantive rights and obligations of the Human Rights Code are incorporated into each collective agreement over which the Board has jurisdiction is not, in my view, a question that the legislature intended to leave to the Board. The Board’s expertise does not lie in answering legal questions of general applicability, but, rather, in the interpretation of collective agreements and the resolution of factual disputes related to those agreements. See for example Dayco, supra, at p. 266, and United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316, at p. 336. Determining whether the substantive rights and obligations of an external statute are incorporated into a collective agreement is a legal question of broad applicability that does not fall within an arbitrator’s core area of expertise. Although the Board has the power to determine whether the substantive rights and obligations of the Human Rights Code are incorporated into the collective agreement, the Court has the power to interfere if the Board resolved the issue incorrectly.
23 For the reasons that follow, it is my conclusion that the Board was correct to conclude that the substantive rights and obligations of the Human Rights Code are incorporated into each collective agreement over which the Board has jurisdiction. Under a collective agreement, the broad rights of an employer to manage the enterprise and direct the work force are subject not only to the express provisions of the collective agreement, but also to statutory provisions of the Human Rights Code and other employment-related statutes.
(1) The Case Law
24 The leading case regarding the effect of employment-related statutes on the content of collective agreements is McLeod v. Egan, [1975] 1 S.C.R. 517. Prior to McLeod, the prevailing view was that an arbitrator was not authorized to apply statutes in the course of grievance arbitration other than as an aid to interpreting a collective agreement: D. J. M. Brown and D. M. Beatty, Canadian Labour Arbitration (loose-leaf ed.), at p. 2-60. On this view, an arbitrator had no alternative but to construe and apply a collective agreement in accordance with its express terms and conditions. If the alleged misconduct did not constitute a violation of an express provision of the collective agreement, the subject matter of the dispute was not arbitrable. In McLeod, however, the Court established that it is necessary to look outside the collective agreement in order to ascertain the substantive rights and obligations of the parties to that agreement.
25 In McLeod, the appellant employee alleged that he had been disciplined for refusing to work beyond 48 hours in a week. The collective agreement between the parties contained a broad management rights clause that expressly stated that the control of all operations and working forces, including the right to discipline employees and to schedule operations, is vested solely in the employer, subject only to the express provisions of the collective agreement. There were no provisions of the collective agreement that limited the right of an employer to require an employee to work overtime beyond 48 hours a week. In the absence of language limiting the broad power vested in the employer, the arbitrator concluded that insofar as the collective agreement was concerned the employer was entitled to discipline an employee who refused to work in excess of 48 hours a week.
26 The Court, however, concluded that an arbitrator must look beyond the four corners of the collective agreement in order to determine the limits on an employer’s right to manage operations. Under a collective agreement, this right is subject not only to the express provisions of the agreement, but also to statutory provisions such as s. 11(2) of the Employment Standards Act, 1968, S.O. 1968, c. 35 (the “ESA, 1968”). Martland J. held as follows, at p. 523:
The basic provision of the Act is that which places a maximum limit upon the working hours of an employee of eight in the day and forty-eight in the week. Any provision of an agreement which purported to give to an employer an unqualified right to require working hours in excess of those limits would be illegal, and the provisions of art. 2.01 of the collective agreement, which provided that certain management rights should remain vested in the Company, could not, in so far as they preserved the Company’s right to require overtime work by its employees, enable the Company to require overtime work in excess of those limits.
Put another way, the absence of a provision that expressly prohibits an employer from requiring an employee to work in excess of 48 hours a week does not mean that the right to manage operations includes the right to vi