Toronto Police Association v. Board of Commissioners

Toronto Police Association v. Board of Commissioners
Collection
Supreme Court Judgments
Date
1974-04-29
Report
[1975] 1 SCR 630
Judges
Laskin, Bora; Martland, Ronald; Judson, Wilfred; Ritchie, Roland Almon; Spence, Wishart Flett; Pigeon, Louis-Philippe; Dickson, Robert George Brian; Beetz, Jean; de Grandpré, Louis-Philippe
On appeal from
Ontario
Subjects
Arbitration
Labour law
Decision Content
Supreme Court of Canada
Toronto Police Association v. Board of Commissioners, [1975] 1 S.C.R. 630
Date: 1974-04-29
The Metropolitan Toronto Police Association and Paul C. Weiler (Plaintiffs) Appellants;
and
The Metropolitan Toronto Board of Commissioners of Police (Defendant) Respondent.
1974: February 7, 8; 1974: April 29.
Present: Laskin C.J. and Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.
Labour relations—Arbitration—Collective agreement—Whether arbitrators award reviewable—Error of law on face of award.
Arbitration—Admission of extrinsic evidence—Right of arbitrator to consider such evidence—Right of arbitrator to rectify collective agreement.
The appellant Association as bargaining agent for members of the Metropolitan Toronto Police Force by letter advised the respondent Board that the employer appeared to be in violation of the collective agreement by reason of stopping the dues payroll deductions for six members of the Association. The six employees had some months previously been promoted from the rank of sergeant to that of inspector and had shortly after their promotions indicated to the Association their desire to resign membership. Under a prior collective agreement the rank of inspector had been included in the schedule A to the agreement and the agreement defined “member” as “a person holding rank or classification as set out in Schedule “A” to this agreement”. In the later collective agreement, in force at the time of the grievance, the rank of inspector was not included in Schedule “A”.
The Arbitrator felt that on the basis of ambiguity he was entitled to consider extrinsic evidence in order to construe the collective agreement and also that rectification of the agreement was appropriate to give effect to what he found to be the intention of the parties.
Held (Laskin C.J. and Spence J. dissenting): The appeal should be dismissed with costs.
Per Martland, Judson, Ritchie, Pigeon, Dickson and de Grandpré JJ.: In this case there was no submission of a question of law to the arbitrator on the basis that his decision would be binding on the parties and not subject to any review. The question of law which arose in the arbitration came up in the course of the consideration of a grievance in the ordinary way under the provisions of the collective agreement. The arbitrator was obligated to make a decision consistent with that agreement. Whether or not such decision was or was not inconsistent is clearly a question which could not be determined by the arbitrator himself; consequently, the submission considered in the light of the defined restrictions on the arbitrator’s powers as contained in the agreement, cannot be considered as a reference of a specific question of law which the parties had agreed to accept as binding and which is not subject to review by reason of an error of law on the face of the award.
Per Pigeon and Beetz JJ.: The arbitrator states that he was “strongly reinforced in his conclusion by consideration of the extrinsic evidence of the negotiating story”. He could not have reached his conclusion had he not relied on a document expressing proposals made in the course of negotiations. The use of this type of extrinsic evidence strikes at the relative security of the written form and would render finally drafted and executed agreements perpetually renegotiable.
Per Laskin C.J., dissenting: As a matter of construction within the literal limits of the two agreements the arbitrator concluded that the Association’s position was the more probable. There is here no reviewable error of law; there could only be a difference of opinion as to proper construction and that is not a reviewable matter. There being a non-reviewable basis for the decision there is no reason to intervene because there was a reviewable issue on another view of the matter. Even on the basis of ambiguity, which it was for the arbitrator to determine, there could be no objection to extrinsic evidence as such.
Per Spence J., dissenting: The power of a court to review a decision on a specific question of law by a consensual arbitrator is limited to such matters as bias and fraud and no court is entitled to consider a review based on a mistake in law on the face of the award.
[Government of Kelantan v. Duff Development Company Limited, [1923] A.C. 395; F.R. Absalom Limited v. Great Western (London) Garden Village Society, Limited, [1933] A.C. 592; Faubert and Watts v. Temagami Mining Co. Ltd., [1960] S.C.R. 235; City of Vancouver v. Brandram‑Henderson of B.C. Ltd., [1960] S.C.R. 539; Bell Canada v. Office and Professional Employees’ International Union, Local 131, [1974] S.C.R., 335 followed; Re King and Duveen, [1913] 2 K.B. 32 distinguished].
APPEAL from a judgment of the Court of Appeal for Ontario[1] dismissing an appeal from a judgment of Hughes J. granting an order in lieu of certiorari to quash an arbitration award of the appellant Paul C. Weiler. Appeal dismissed with costs, Laskin C.J. and Spence J. dissenting.
Thomas E. Armstrong, for the appellants.
G.M. Mace, Q.C., and H.E.O. Doyle, for the respondent.
THE CHIEF JUSTICE (dissenting)—This is another in a series of cases calling upon this Court to resolve a dispute about the latitude permitted to consensual arbitrators, appointed under collective agreements, to construe such agreements without being guilty of reversible error. The case comes here by leave of this Court and involves an award of a single arbitrator, Professor Paul Weiler, which was quashed by Hughes J. of the Ontario Supreme Court in proceedings brought for that purpose. That learned judge treated the award as one by a statutory arbitrator. The Ontario Court of Appeal affirmed the quashing of the award on the basis that Professor Weiler was a consensual arbitrator. In this Court, the matters in question were treated on this same basis, counsel being agreed that it was the proper one.
The arbitrator was selected by the parties hereto to resolve a grievance lodged by the appellant Association in a letter of September 14, 1970 in which the Association alleged that the respondent Board had violated the collective agreement in force between the parties by stopping the payroll deductions of Association dues in respect of six persons who, upon their promotion in July, 1970 from the classification of sergeant to that of inspector, had sent in letters of resignation from membership in the Association and had claimed as a result to be no longer obliged to submit to deduction of Association dues.
Counsel for the parties were at one that the governing collective agreement between the parties consisted of two documents, called respectively the 1969 agreement and the amending agreement of 1970. Article 10 of the collective agreement as amended (I should note that art. 10 was not itself amended by the 1970 amending agreement) provided for the deduction of Association dues, inter alia, as follows:
(b) Members who were members of the Association on June 30th, 1969, shall be obliged to pay the prescribed dues to the Association as a condition of employment but shall not be obliged to pay any assessments levied by the Association on any of its members which may be in excess of the prescribed dues unless they remain as members of the Association.
The term “member” (the first word in clause (b) above is defined in art. 2(d) of the collective agreement as amended (and I note that art. 2 was not itself amended by the 1970 amending agreement) as follows:
(d) “member” means a person holding rank or classification as set out in Schedule A to this Agreement.
Schedule A to the 1969 agreement listed “sergeant” as one of the ranks or classifications and also listed “inspector”. The 1970 amending agreement also included a Schedule A which listed “sergeant” but not “inspector” as a rank or classification thereunder, and it is this omission and its significance that have been at the heart of the arbitration proceeding and of the proceedings in the Courts below. It is apparent to me that on one view of the grievance as lodged, it is immaterial that the classification of inspector was not included in Schedule A under the 1970 amending agreement. The six persons who were promoted to inspector in 1970 were sergeants in 1969, and were thus in a “member” classification under art. 2(d) and were members of the Association on June 30, 1969. They would, accordingly, come under the obligation of art. 10(b) to submit to a checkoff of Association dues during the term of the agreement as amended. That was not, however, how the grievance was dealt with either by the arbitrator or by the Courts below. What was put in issue was the question whether “inspectors” was a classification which was still within the collective agreement as amended so as to bring those within that class or, at least the six promoted persons who purported to resign, under the checkoff obligation.
It is clear to me, as it was clear to the arbitrator and as it was clear to the Courts below under the reasons they gave, that there were no disputed issues of fact upon which a finding had to be made by the arbitrator. There was only one issue and that was an issue of law whether the collective agreement embraced inspectors for checkoff purposes. Of course, it can be said that the issue was whether inspectors were in fact within the collective agreement for checkoff purposes but that would be to introduce a semantic muddle between fact and law in the present case; the fact, in this context, would be the result of construction of the agreement, nothing more being necessary to the determination of the application of the checkoff provision. I read the reasons of Arnup J.A., who spoke for the Ontario Court of Appeal in this case, as saying exactly that. After concluding that Professor Weiler was a consensual arbitrator, Arnup J.A. continued as follows: The next question, accordingly, is whether the award of a consensual arbitrator to whom a question of construction of an agreement is referred can be set aside, and if so, upon what grounds, and by what form of procedure.
The question of procedure was not a disputed matter here and, in any event, it has been settled by the judgments of this Court in Port Arthur Shipbuilding Co. v. Arthurs[2] at pp. 94-5, and Association of Radio and Television Employees of Canada v. C.B.C.[3]
The main question in this case is the scope of review (to be distinguished from appeal) open to a Court whose supervisory authority is invoked against an award of a consensual arbitrator to whom a question of construction has been referred. That was the view of the present case taken by the Ontario Court of Appeal, and, in my opinion, it was the correct view. I disagree, however, with that Court on its affirmative exercise of its supervisory authority to set aside Professor Weiler’s award.
The Court of Appeal, in accepting the distinction, which has come down from a line of English cases, between review where a question of law has been referred to a consensual arbitrator and review where a dispute has been so referred in which a question of law becomes material, and in determining (correctly in my opinion, as I have already stated) that the present case comes within the first mentioned class of cases, adopted as the law on the scope of review the statement of Lord Cave L.C. in Government of Kelantan v. Duff Development Co. Ltd.[4] at p. 409, which is as follows: No doubt an award may be set aside for an error of law appearing on the face of it; and no doubt a question of construction is (generally speaking) a question of law. But where a question of construction is the very thing referred for arbitration, then the decision of the arbitrator upon that point cannot be set aside by the court only because the court would itself have come to a different conclusion. If it appears by the award that the arbitrator has proceeded illegally—for instance, that he has decided on evidence which in law was not admissible or on principles of construction which the law does not countenance, then there is error in law which may be ground for setting aside the award; but the mere dissent of the court from the arbitrator’s conclusion on construction is not enough for that purpose.
This statement is not, of course, binding on this Court nor, if I may presume to say so, does it appear to me to be consonant with the authorities which established the principles upon which and the extent to which awards of consensual arbitrators are reviewable. I canvassed the history of the matter in my reasons in Bell Canada v. Office and Professional Employees’ International Union[5] at pp. 569 ff. The principles, as judge-made law, are not, of course, immutable, and Lord Cave’s version is cited with approval both in Halsbury, Vol. 2 (3rd ed. 1953), at p. 60, and in Russell on Arbitration (18th ed. 1970), at p. 360. Nonetheless, what he said, and what is relied on by the Ontario Court of Appeal here, was not adopted by this Court in Faubert and Watts v. Temagami Mining Co. Ltd.[6], where Kerwin C.J.C., speaking for the Court, stopped short of adopting the qualification put by Lord Cave on the non‑reviewability of a consensual arbitrator’s award where a specific question of law has been referred to him for decision.
In Faubert and Watts, this Court relied on F.R. Absalom Ltd. v. Great Western (London) Garden Village Society Ltd.[7], without mention of the earlier Kelantan case. In Absalom, Lord Russell spoke for the majority in reference to the distinction between the case where a dispute is referred to an arbitrator in the decision of which a question of law becomes material and the case where a specific question of law has been referred to him. Lord Russell mentioned in this latter connection Lord Cave’s addition in the Kelantan case, but not, it appears to me, with approval. This seems to me to be also the view taken by Lord Wright who wrote at length in the Absalom case and who, in quoting Lord Cave in Kelantan, stopped short of that part of the passage in Lord Cave’s reasons that spoke of review because of inadmissible evidence or improper principles of construction.
In Vancouver v. Brandram-Henderson of B.C. Ltd.[8], heard within a few days after this Court decided the Faubert and Watts case and by the same members of the Court, the issue concerned an arbitration award which clearly did not involve the reference of a specific question of law but rather the reference of a dispute as to the proper indemnity for damage to certain property. Kerwin C.J.C., in the course of his judgment in which Abbott and Judson JJ. concurred, did not find it necessary to advert to the distinction which is under review here, but Locke J., with whom Cartwright J. concurred and as well Abbott and Judson JJ., referred to the views of Lord Cave in the Kelantan case as to reviewability but without relating them in any way to the distinction to which I have already referred.
Locke J.’s reference to what Lord Cave said in Kelantan was preceded by a reference to Walford, Baker & Co. v. MacFie & Sons[9] where an award in respect of a dispute referred to arbitration under a certain contract was set aside for the legal misconduct of the arbitrator in founding his decision on another superseded contract between the parties, so that he had acted upon inadmissible evidence. Locke J. then said this:
In Kelantan Government v. Duff Development Co., Viscount Cave L.C. at p. 411 said that such an award might be set aside if it appeared on the face of it that the arbitrator had proceeded on evidence which was inadmissible or on wrong principles of construction, or had otherwise been guilty of some error in law.
It appears to me that Locke J. was considering reviewability of arbitration awards arising out of a general reference to arbitration, especially in view of his allusion to what Lord Cave said on p. 411 of his reasons in Kelantan supra, rather than to what Lord Cave said on p. 409.
The passage from p. 411, which is substantially in the words used by Locke J., just quoted, appears to me to be at odds with what Lord Cave said on p. 409 of the Kelantan case, being the passage quoted by the Ontario Court of Appeal in the present case. If it applies to cases where a question of construction alone is referred to a consensual arbitrator, it wipes out the distinction which has been under discussion; it certainly goes beyond the statement of principle on p. 409. Since Lord Cave had concluded in Kelantan that the reference there was a reference as to construction I am unable to appreciate how the distinction in the scope of review (according to what is referred to arbitration) retains any significance. This may very well have accounted for the way in which the House of Lords in Absalom dealt with his reasons; and as well for the preference of this Court in Faubert and Watts to rely on Absalom without any mention of Kelantan. The difficulty created by Lord Cave’s proposition on p. 411 of the Kelantan case (no less than that created by the passage on p. 409) has not gone unnoticed elsewhere. In Melbourne Harbour Trust Commissioners v. Hancock[10] at p. 251, Starke J. of the Australian High Court, speaking of the passage on p. 411 said this:
And what, may I ask is covered by the words “otherwise been guilty of some error in law”? Some day, no doubt, the passage will be elucidated but a decision can be reached in this case without endeavouring to expound the qualification…
More recently, in NSW Mining Co. Pty Ltd. v. Hartford Fire Ins. Co.[11], the High Court of Australia had occasion to consider the reviewability of an arbitration award and whether a specific question of law was involved. Only one of the Bench of five (Gibbs J.) referred to what Lord Cave said on p. 409 of the Kelantan judgment (there was no other reference to that case). In his reasons, Chief Justice Barwick had two significant things to say, as follows (at pp. 350 and 351):
In my opinion, the first question asked of the arbitrator was a specific question which involved seeking the arbitrator’s construction of the policy. It is nothing to the point, in my opinion, that the arbitrator may have had to find some facts or to take evidence about some facts in deciding his answer to the question. The nature of the question remains the same and it is the nature of the question which determines the matter….
I think the use of the word “specific” in this area of discussion is useful to indicate that the decision on the point of law is sought by the parties by the question submitted to the arbitrator. It contrasts the case to which I have referred where the question asked is asked on the footing of the proper meaning of the contract and not on the footing of the arbitrator’s decision as to the meaning of the contract. It neither means, in my opinion, that in all cases the question of law must be isolated in the submission nor that it must be isolated as a separate question. To my mind the right principle is, if upon the proper construction of the submission it is concluded that the parties by the language they have used have asked the arbitrator to decide for them a question of law, the resultant answer may not be set aside simply because the arbitrator has decided the question wrongly.
I adopt this view of the matter, although it is unnecessary to go this far in the present case. I would emphasize what I said in the Bell Canada case, namely, that under a self-governing regime established by a collective agreement under which the parties have their own executive and judicial machinery, there should be a minimum of interference with awards, especially when they evince, as does the one under challenge here, a conscientious exercise of conferred authority by elaboration of the reasons that moved the arbitrator to his decision. In my opinion, the parties, for whom the decisions of arbitrators are intended, are better served by awards that spell out the considerations and factors leading to the decisions than are awards that are bare of reasoning and state merely the issue submitted and the conclusion, or barely more than that.
There were three approaches by the arbitrator in the present case to the question which was put before him. First, he sought to construe the collective agreement as amended and in this connection he was entitled to bring into account the circumstances surrounding its making. Second, and admitting candidly that construction as such posed a difficulty, he was of the opinion that an approach on the basis of ambiguity was open and that, accordingly, he was entitled to bring in extrinsic evidence. Third, he invoked the principle of rectification, a matter that was not pressed in this Court and nothing need therefore be said about it.
As I read the judgments below, and especially that in the Court of Appeal, the arbitrator was faulted because he admitted extrinsic evidence on the basis of the existence of an ambiguity. Both Hughes J. at first instance and Arnup J.A. on appeal were of opinion that no ambiguity existed and hence that the arbitrator was guilty of reversible error in admitting extrinsic evidence. There is only one passage in the reasons of the Court of Appeal that deals with the question of construction and admission of extrinsic evidence and I quote it in full:
While Hughes J. was approaching the matter on a different basis (because he was asked to do so), I am nevertheless in complete agreement with his finding that there were clear and serious errors of law on the part of the arbitrator. Putting it in the language appropriate to attacks upon the award of a consensual arbitrator, this arbitrator proceeded illegally not only in the sense that he has decided on evidence which in law was not admissible, but also because he decided the referred question on principles of construction which the law does not countenance. I completely agree with Hughes J. that the agreements the arbitrator was required to consider were clear and unambiguous. Therefore, no extrinsic evidence was admissible in aid of their interpretation. Furthermore, the arbitrator erred in doing what he called “applying the principle of rectification” which I take to be a euphemism for “reading the document as if rectified”.
It seems to me that both Hughes J. and Arnup J.A. dealt with the question of the existence of an ambiguity as if it were a collateral or preliminary question on which they were entitled to substitute their opinion for that of the arbitrator. If the arbitrator’s view was one that he was entitled to take under the authority vested in him, then I can see nothing wrong in his resort to extrinsic evidence; the evidence error followed if his decision on the question of ambiguity was impeachable so that there was one error only not two. My opinion is simply that in dealing with the question of construction the arbitrator could deal with it as a matter of internal interpretation as well as on the basis of the existence of an ambiguity, if that was his alternative view. It was for him to assess what the situation demanded in respect of construction, and there is no suggestion that there would be error if, in applying rules of construction where an ambiguity exists, he resorted to extrinsic evidence. To adapt a formula applied in labour relations board cases, whether or not an ambiguity existed calling for the introduction of extrinsic evidence, was for the arbitrator to determine as being a matter that was part and parcel of the question of construction upon which he was required to pronounce: see Ontario Labour Relations Board, Bradley v. Canadian General Electric Co. Ltd.[12], at p. 325.
I come now to the 1969 collective agreement and to the amending agreement of 1970, which were before the arbitrator for construction in order to decide whether the Board had violated its obligation to check off Association dues. The 1969 agreement, so-called by all concerned although it was dated March 20, 1970, ran, under art. 24, from January 1, 1969 to December 31, 1969 “and thereafter until replaced by a new agreement, decision or award”, each party being entitled to give notice between October 1 and December 31 of any year of its desire “to bargain for a new agreement or amendments to the existing agreement”. Article 1 of this agreement provided that it was to apply “only to those members of the Metropolitan Toronto Police Force as set out in Schedule A hereto”. Schedule A listed not only the classifications which gave meaning to art. 1 (e.g. constable, probationary detective, patrol sergeant and detective, sergeant and detective sergeant, sergeant of detectives, inspector, staff superintendent and superintendent) but also the hours per week and the wage scales for each classification. Article 4 of the 1969 agreement provided that “the annual salary of each member effective January 1, 1969, shall be in accordance with Schedule A to the Agreement”. Schedule A thus related to the classifications which were subject to the terms of the 1969 agreement and also to the annual pay of persons within those classifications. I have already referred in these reasons to art. 2(d) defining “member” as a person holding rank or classification as set out in Schedule A, and have referred also to art. 10 respecting payment of union dues. Article 6 of the 1969 agreement provided for (a) an annual clothing allowance in a fixed amount to “each member who holds the rank of Inspector or higher” and (b) a clothing allowance in a fixed amount to “each member below the rank of Inspector who is required to perform police duties in plain clothes”.
On July 10, 1970, the parties entered into an amending agreement with the same duration clause, art. 24, save that the fixed term was from January 1, 1970 to December 31, 1970. The amending agreement was not a complete redraft of the 1969 agreement but consisted rather of nine clauses each of which related to changes in named clauses of the 1969 agreement which, apart from those changes, continued in force under the new duration clause. The changes made were to arts. 4 and 5(f), a new art. 5(b)(11) was added, art. 11 was replaced as was art. 12, art. 13 was amended, art. 18 was replaced, art. 19 was amended and so too art. 24 as to duration. There were thus changes in eight of the twenty-four articles of the 1969 agreement. There was no change in art. 1 nor in art. 2 (unless there was necessarily a change because of the Schedule A change made for the purpose of art. 4) nor in art. 6.
Article 4 of the amending agreement of 1970 was as follows: The annual salary of each member, effective April 7, 1970, shall be in accordance with Schedule A to this Agreement.
Schedule A to the amending agreement listed the classifications included in that Schedule to the 1969 agreement, save those of inspector and staff superintendent and superintendent but it also joined to the classification of probationary detective the classification of probationary patrol sergeant. Increased rates of pay over those shown in Schedule A to the 1969 agreement were shown opposite the classifications listed in Schedule A to the 1970 amending agreement.
The issue that this new Schedule A presented is clear enough: Did the change in that Schedule, made for the purpose of the salary art. 4, also have the effect of excluding the inspectors from arts. 1 and 2, and thus also of excluding them from the checkoff obligation under art. 10? The arbitrator addressed himself to this question, one of construction alone, and concluded, on three alternative bases, that the obligation to deduct union dues in respect of the inspectors and to pay them over to the appellant Association was not affected by the amending agreement of 1970.
It is enough for present purposes to refer to his first basis of decision. As a matter of construction within the literal limits of the two agreements, he concluded that, having regard to the fact that arts. 1, 2 and 10 remained unamended and that art. 6 was also retained as it was in the 1969 agreement, the Association’s position was the more probable. Even on the application of Lord Cave’s widest proposition, there is here no reviewable error of law; there could only be a difference of opinion as to proper construction, and that is not a reviewable matter.
The fact that the arbitrator went on to consider the matter before him from the standpoint of ambiguity and let in extrinsic evidence is nihil ad rem; there being a non-reviewable basis of decision there is no reason for the Court to invervene because there was a reviewable issue on another view of the matter. Even on the basis of ambiguity, which it was for the arbitrator to determine, there could be no objection to extrinsic evidence as such. Apparently what was said to vitiate this alternative basis of decision was the reference to a letter of April 24, 1970 from the Chairman of the respondent Board to the President of the Association which represented a proposed settlement of the wage differences. That this was so is indicated by the acceptance of the proposals by the President of the Association with the notation above his signature and those of other persons of the words “effective date April 7th”. This is the date recited in the substituted art. 4. Although it is unnecessary, for reasons already given, to dwell on this alternative basis of decision, I see no legal objection to reference to this letter which evidenced an agreement which was in fact embodied formally in the 1970 amending agreement. It is entirely consistent with what is in art. 4 and in the wage and other benefit provisions found in the formal amendments.
For the foregoing reasons, I would allow the appeal, set aside the judgments below and dismiss the application to quash. The appellants are entitled to their costs throughout.
The judgment of Martland, Judson, Ritchie, Pigeon, Dickson and de Grandpré JJ. was delivered by
MARTLAND J.—This is an appeal from an order of the Court of Appeal for Ontario, which dismissed the appellants’ appeal from a judgment of Hughes J., which granted an application brought by the respondent for an order in lieu of certiorari to quash an arbitration award of the appellant Paul C. Weiler. The appellant Association (hereinafter referred to as “the Association”) is the bargaining agent for members of the Metropolitan Toronto Police Force. At all times material to this dispute the Association and the respondent Board (hereinafter referred to as “the Board”) were bound by a collective agreement dated March 10, 1970 (hereinafter referred to as “the 1969 agreement”), as amended by an amending agreement dated July 10, 1970 (hereinafter referred to as “the 1970 agreement”).
The 1969 agreement provided that it should run from January 1, 1969, until December 1, 1969, “and thereafter until replaced by a new agreement, decision or award”. The provisions of that agreement which are relevant to this appeal are as follows:
WHEREAS pursuant to Section 27 of the Police Act, a Bargaining Committee representing the Association met and bargained with a Bargaining Committee representing the Board for the purpose of making an Agreement in writing defining, determining and providing for remuneration, benefits, pensions and working conditions of the members of the Metropolitan Toronto Police Force set out in Schedule “A” hereto;
AND WHEREAS the initial Agreement between the parties has been amended from time to time;
AND WHEREAS the parties as of this date have reached an agreement as hereinafter set forth;
NOW, THEREFORE, THIS AGREEMENT WITNESSETH THAT:
1. This Agreement shall apply only to those members of the Metropolitan Toronto Police Force as set out in Schedule “A” hereto.
2. Except where a contrary intention appears,
(a) “Association” means the Metropolitan Toronto Police Association.
(b) “Board” means the Metropolitan Board of Commissioners of Police.
…
(d) “member” means a person holding rank or classification as set out in Schedule “A” to this Agreement.
… …
4. The annual salary of each member effective January 1, 1969 shall be in accordance with Schedule “A” to this Agreement.
…
6. (a) Each member who holds the rank of Inspector or higher shall be paid an annual clothing allowance as follows:
(i) One hundred and fifty dollars ($150.00) on the 30th day of June in each and every year, and
(ii) One hundred and fifty ($150.00) on the 31st day of December in each and every year,….
…
10. (a) Members who were not members of the Association on June 30th, 1969, shall not be obliged to pay dues to the Association as a condition of employment.
(b) Members who were members of the Association on June 30th, 1969, shall be obliged to pay the prescribed dues to the Association as a condition of employment but shall not be obliged to pay any assessments levied by the Association on any of its members which may be in excess of the prescribed dues unless they remain as members of the Association.
(c) Members who joined the Force on or after July 1, 1969, shall be obliged to pay the prescribed dues to the Association as a condition of employment but shall not be obliged to pay any assessments levied by the Association on any of its members which may be in excess of the prescribed dues unless they become members of the Association.
Paragraphs (d), (e) and (f) of this clause provided for the deduction by the Treasurer of the Municipality of Metropolitan Toronto from their pay of dues payable to the Association and payment of the amounts deducted by him to the Treasurer of the Association.
Clause 17 of this agreement dealt with the grievance procedure, and provided for five steps in the processing of a grievance. Step 5 provided for the appointment of an arbitrator. The relevant paragraphs of that clause read as follows:
An Arbitrator appointed under Step 5 of the Grievance Procedure shall not have power to add to, subtract from, alter, modify or amend any part of this Agreement, nor otherwise make any decision inconsistent with this Agreement.
Either party to this Agreement may lodge a grievance in writing with the other party on any difference between the parties concerning the interpretation, application or administration of this Agreement including any question as to whether a matter is arbitrable and such grievance shall commence at Step 4 and the said Step 4 and Step 5 shall apply mutatis mutandis to such grievance.
Annexed to this agreement was a schedule which was headed:
THIS IS SCHEDULE “A”—REFERRED TO IN THE ANNEXED AGREEMENT
This schedule described various ranks in the Force, from constable to inspector, and to staff superintendent, and provided for the respective hours of service per week and the pay rate for each rank.
The relevant provisions of the 1970 agreement are as follows:
WHEREAS the Board and the Association entered into an Agreement in writing dated the 10th day of March, 1970 (hereinafter referred to as “the Agreement”) defining, determining and providing for remuneration, benefits, pensions and working conditions of the members of the Metropolitan Toronto Police Force set out in Schedule “A” to the Agreement; and
WHEREAS Section 24 of the Agreement provides that it shall remain in full force and effect for the period extending from January 1st, 1969, until December 31st, 1969, and thereafter until replaced by a new Agreement, decision or award; and
WHEREAS the Board and the Association have agreed to make the amendments, changes, alterations and additions to the Agreement hereinafter set out;
NOW THEREFORE THIS AGREEMENT WITNESSETH that, in consideration of the premises the Board and the Association hereby mutually agree and covenant as follows:
1. Clause 4 of the Agreement is deleted, and the following substituted therefor: “4. The annual salary of each member, effective April 7, 1970, shall be in accordance with Schedule “A” to this Agreement.”
…
9. Clause 24 of the Agreement is amended by striking out the figure 1969 wherever it appears in the Clause, and substituting therefor the figure 1970, so that the Clause, as amended, shall read as follows:
“24. The terms and conditions herein contained shall remain in full force and effect for the period extending from January 1st, 1970, until December 31st, 1970, and thereafter until replaced by a new agreement, decision or award…..”
A schedule was annexed to this agreement, which was headed:
THIS IS SCHEDULE “A”—REFERRED TO IN THE ANNEXED AGREEMENT
This schedule described various ranks in the Force, from constable to sergeant of detectives, and provided for the respective hours of service per week and the pay rates for each rank. No reference was made in it to any rank above that of sergeant of detectives. It did not include inspectors.
The grievance which gave rise to this case was in the form of a letter, dated September 14, 1970, from the president of the Association to the executive secretary of the Board. It referred to the fact that five sergeants had been promoted to the rank of inspector on July 14, 1970, and that another sergeant had been similarly promoted on July 28, 1970. Shortly thereafter these persons had written to the Association indicating their desire to resign membership in the Association. These resignations were not accepted. In August advice had been received by the writer of this letter that Deputy Chief Hamilton had ordered the Payroll or Administrative Section to stop, in respect of these six men, the deduction from the payroll of dues to the Association. The letter concluded with the following paragraph:
I now wish to bring this matter before the Police Commission at the earliest opportunity as a violation of agreement grievance. It is my respectful submission that the Department, specifically Deputy Chief Hamilton and/or the Police Commission has violated the agreement by stopping the dues payroll deductions for the aforementioned six members.
This is the grievance which was submitted to the appellant arbitrator. His award upheld the grievance and found that the Board was in breach of the agreement in failing to deduct Association dues from the inspectors’ salaries and to remit them to the Association. He delivered written reasons for his decision.
After referring to the 1969 and the 1970 agreements, he said:
In considering the implications of these two documents for the problem in this case, the one point which is clearly accepted by everyone is that the Inspectors were included under the 1969 Agreement and were liable to have dues deducted for the benefit of the Association. This is not the usual case of a grievance brought by the Union where an arbitrator is required to find positive evidence that, for instance, certain employees were negotiated into the bargaining unit. Instead, it is required to find positive evidence in the 1970 negotiations and document that it was agreed that these employees should be excluded from the unit and the Agreement.
He summarized the arguments submitted by the Board and by the Association and continued:
Taken by themselves, each of these arguments is a possible interpretation of the bare language of the Agreement. However, when considered together, these two views of the linguistic evidence on the face of the documents serve only to show the unsatisfactory character and serious difficulties in each. They certainly show important ambiguities in this language which entitles me to examine extrinsic evidence in order to clarify its meaning.
He then proceeded to review the negotiations leading to the exec