United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd.

United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd.
Collection
Supreme Court Judgments
Date
1993-05-19
Report
[1993] 2 SCR 316
Case number
22023
Judges
L'Heureux-Dubé, Claire; Sopinka, John; Gonthier, Charles Doherty; Cory, Peter deCarteret; McLachlin, Beverley
On appeal from
Newfoundland and Labrador
Subjects
Administrative law
Labour law
Notes
SCC Case Information: 22023
Decision Content
United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316
United Brotherhood of Carpenters
and Joiners of America, Local 579 Appellant
v.
Bradco Construction Limited Respondent
Indexed as: United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd.
File No.: 22023.
1992: October 16; 1993: May 19.
Present: L'Heureux‑Dubé, Sopinka, Gonthier, Cory and McLachlin JJ.
on appeal from the court of appeal for newfoundland
Labour relations ‑‑ Collective agreement ‑‑ Interpretation ‑‑ Extrinsic evidence ‑‑ Collective agreement applicable "when the Employer shall perform any work of the type covered" by the agreement ‑‑ Affiliated company hiring non‑unionized carpenters ‑‑ Arbitrator finding that such "double‑breasting" violated collective agreement ‑‑ Whether arbitrator's interpretation of collective agreement patently unreasonable ‑‑ Whether arbitrator's use of extrinsic evidence patently unreasonable.
Judicial review ‑‑ Standard of review ‑‑ Labour relations arbitrator.
The appellant union represents employees of the respondent Bradco, which is affiliated with and carries on business on the same premises as N.D. Dobbin Ltd., a non‑unionized company. The two companies use common facilities and are, for all practical purposes, owned by the same persons and are managed and directed by the same persons. While a collective agreement between Bradco and the union was in effect, Dobbin won the contract to construct a university building. To assist in carrying out this contract, it hired carpenters who were not affiliated with the union. The union claimed that this amounted to a breach of the collective agreement it had with Bradco because Dobbin was an affiliated company of Bradco. Article 3.01 of the agreement provides that "when the Employer shall perform any work of the type covered by this Agreement . . . this Agreement shall be applicable to all such work". The arbitrator found in the union's favour. He noted that the existence of the two companies permitted Bradco to engage in the practice of "double‑breasting", whereby the non‑unionized arm, Dobbin, could bid on contracts and carry out work using the facilities, management personnel and equipment of the unionized arm, Bradco, but could hire non‑union personnel. The practice of double-breasting had led to a prolonged strike in 1986, which was settled in accordance with a report (the "Harris report") which formed the basis of the collective agreement now in force. Both sides had made significant concessions: the union agreed to wage concessions, while the companies agreed to stop engaging in "double‑breasting". The arbitrator found that Article 3 was incorporated into the agreement in an effort to guarantee the companies' compliance with the "double‑breasting" concession. Since the language of the article was not clear and unambiguous, he found that he was entitled to look at extrinsic evidence, specifically the Harris report. In his view this case presented a clear example of double‑breasting of the sort which the report was intended to terminate. The arbitrator's decision was upheld by the Supreme Court of Newfoundland, Trial Division, but reversed by the Court of Appeal, which found that both the arbitrator's determination that the meaning of the phrase "perform any work" was unclear and his resolution of the ambiguity were patently unreasonable.
Held: The appeal should be allowed.
Per L'Heureux‑Dubé, Sopinka, Gonthier and McLachlin JJ.: Arbitration in this matter was a statutory requirement under s. 88 of the Newfoundland Labour Relations Act, 1977, which provides that disputes arising out of the interpretation or application of a collective agreement "shall be submitted for final settlement to arbitration". In determining the appropriate standard of judicial review the court must interpret the legislative provision in question in light of the nature of the particular tribunal and the type of questions which are entrusted to it, having due regard for the policy enunciated by this Court that, in the case of specialized tribunals, decisions upon matters entrusted to them by reason of their expertise should be accorded deference.
Statutory provisions governing judicial review range from "true" privative clauses which clearly and specifically purport to oust all judicial review of decisions rendered by the tribunal to clauses which provide for a full right of appeal on any question of law or fact and which allow the reviewing court to substitute its opinion for that of the tribunal. Where the relevant provision is a true privative clause, judicial review is limited to errors of jurisdiction resulting from an error in interpreting a legislative provision limiting the tribunal's powers or a patently unreasonable error on a question of law otherwise within the tribunal's jurisdiction. Although their preclusive effect may be less obvious than that of the true privative clause, other forms of clauses purporting to restrict review may also have privative effect. Wording such as "final and conclusive" may be found to restrict review to matters of jurisdiction if the court concludes that the legislator clearly intended that the decision should be immune from review in the absence of an error as to jurisdiction.
Section 88(2) falls somewhere between a full privative clause and a clause providing for full review by way of appeal. The word "final" will not always imply an intended restriction on judicial review: whether or not it should be interpreted in any particular case as conveying an intention to preclude or restrain judicial review requires an analysis of the provision in light of the purpose, nature and expertise of the tribunal in question. The goal of mandatory arbitration is to arrive at an efficient and cost‑effective manner of resolving disputes which will enable the parties to continue in their ongoing working relationship to the greatest extent possible. As an unlimited scope of judicial review of an arbitrator's decision would thwart the achievement of this goal, the words "final settlement" must be taken to indicate the legislature's intention that the courts exercise some restraint in this area.
Along with the rationale for its existence, the expertise of the tribunal is of the utmost importance in determining the intention of the legislator with respect to the degree of deference to be shown to a tribunal's decision in the absence of a full privative clause. Judicial deference to the decision of the arbitrator is warranted here, even though s. 88(2) was not intended to restrict judicial review to jurisdictional matters. While judicial deference to a finding of law made by an arbitrator will not usually be warranted, the questions the arbitrator had to resolve here involved the interpretation of the collective agreement and its application to a particular factual situation, matters which constitute the core area of an arbitrator's expertise. Combined with the purpose and wording of s. 88, the arbitrator's relative expertise mandates that the court defer to the decision of the arbitrator in this case unless his decision is found to be patently unreasonable.
The arbitrator's admission of extrinsic evidence, in the form of the Harris report, was proper. Under s. 84(1) of The Labour Relations Act, 1977 the arbitrator may receive and accept such evidence as he deems advisable whether or not it would be admissible in a court of law. An arbitrator's decision in this regard is not reviewable unless it is shown to be patently unreasonable. The arbitrator's finding that Article 3.01 of the collective agreement was ambiguous cannot be said to be patently unreasonable and he was justified in resorting to the extrinsic evidence to discern the intentions of the parties in order to resolve that ambiguity. The arbitrator, upon referring to the extrinsic evidence, concluded that the intention of the parties was that Article 3.01 should deal with the situation of double‑breasting. Given that the words of the provision were capable of rationally supporting an interpretation reflective of this intention, it was not patently unreasonable for the arbitrator to conclude that it accomplished its purpose and that the relationships which it described included the relationship between Bradco and Dobbin.
Per Cory J.: Sopinka J.'s reasons were substantially agreed with. A reservation was expressed regarding the approach that should be taken by courts reviewing decisions of arbitrators acting in the field of labour relations, but the reasoning of the majority in Dayco was followed.
Cases Cited
By Sopinka J.
Referred to: Blanchard v. Control Data Canada Ltd., [1984] 2 S.C.R. 476; Bradburn v. Wentworth Arms Hotel Ltd., [1979] 1 S.C.R. 846; CAIMAW v. Paccar of Canada Ltd., [1989] 2 S.C.R. 983; U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048; Zurich Insurance Co. v. Ontario (Human Rights Commission), [1992] 2 S.C.R. 321; Canada (Attorney General) v. Public Service Alliance of Canada, [1991] 1 S.C.R. 614; Canada (Attorney General) v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941; Crevier v. Attorney General of Quebec, [1981] 2 S.C.R. 220; National Corn Growers Assn. v. Canada (Import Tribunal), [1990] 2 S.C.R. 1324; Bell Canada v. Canada (Canadian Radio‑television and Telecommunications Commission, [1989] 1 S.C.R. 1722; Dayco (Canada) Ltd. v. CAW‑Canada, [1993] 2 S.C.R. 000; Canada (Attorney General) v. Mossop, [1993] 1 S.C.R. 554; Douglas Aircraft Co. of Canada v. McConnell, [1980] 1 S.C.R. 245; Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227; Volvo Canada Ltd. v. U.A.W., Local 720, [1980] 1 S.C.R. 178; Alberta Union of Provincial Employees, Branch 63 v. Board of Governors of Olds College, [1982] 1 S.C.R. 923; Lester (W.W.) (1978) Ltd. v. United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, Local 740, [1990] 3 S.C.R. 644; Leggatt v. Brown (1899), 30 O.R. 225; Re Milk & Bread Drivers, Local 647, and Silverwood Dairies Ltd. (1969), 20 L.A.C. 406; Re Int'l Ass'n of Machinists, Local 1740, and John Bertram & Sons Co. (1967), 18 L.A.C. 362; Re Noranda Metal Industries Ltd., Fergus Division and I.B.E.W., Local 2345 (1983), 44 O.R. (2d) 529.
By Cory J.
Followed: Dayco (Canada) Ltd. v. CAW‑Canada, [1993] 2 S.C.R. 000; referred to: Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227; Heustis v. New Brunswick Electric Power Commission, [1979] 2 S.C.R. 768.
Statutes and Regulations Cited
Labour Relations Act, 1977, S.N. 1977, c. 64, ss. 18, 84(1), 88(1), (2).
APPEAL from a judgment of the Newfoundland Court of Appeal (1990), 81 Nfld. & P.E.I.R. 181, 255 A.P.R. 181, reversing a decision of the Supreme Court, Trial Division (1988), 75 Nfld. & P.E.I.R. 308, 234 A.P.R. 308, upholding an arbitrator's decision in the appellant union's favour. Appeal allowed.
V. Randell J. Earle, for the appellant.
Thomas R. Kendell, for the respondent.
//Sopinka J.//
The judgment of L'Heureux-Dubé, Sopinka Gonthier and McLachlin JJ. was delivered by
Sopinka J. -- The main issue in this appeal is whether the interpretation given by a labour relations arbitrator to certain provisions of a collective agreement between the appellant and respondent, and his use of extrinsic evidence to arrive at that interpretation, were patently unreasonable.
The Facts
The appellant Union, the United Brotherhood of Carpenters and Joiners of America, Local 579, represents employees of the respondent Bradco Construction Limited ("Bradco"), a company which is affiliated with, and carries on business on the same premises as, N.D. Dobbin Limited ("Dobbin"), a non-unionized company. The parties' Agreed Statement of Facts states that "[Bradco and Dobbin] are operating from the same premises using common facilities such as office space, mail box, bonding support and some staff. From time to time they employ persons who have been in the employ of the other". Further, the two companies are "for all practical purposes, owned by the same persons and are managed and directed by the same persons".
The respondent Bradco is a member of the Newfoundland Construction Labour Relations Association (the "Association"), which is the bargaining agent for unionized employers within the commercial and industrial sector of the construction industry in the province of Newfoundland, and as such is bound by a collective agreement with the Union entered into by the Association effective October 1, 1986 to April 30, 1988. Article 3.01 of this agreement, under the heading "Preservation of Work", provides:
3.01Effective the date of signing of this Agreement and expiring April 29, 1988, the parties agree that if and when the Employer shall perform any work of the type covered by this Agreement at the site of a construction project, under its own name or under the name of another, as a corporation, company, partnership or any other business entity, including a joint venture, wherein the Employer (including its officers, directors, owners, partners or stockholders) exercises either directly or indirectly (such as through family members) any significant degree of ownership, management or control, the terms and conditions of this Agreement shall be applicable to all such work.
Sometime after the coming into effect of this collective agreement, Dobbin submitted an independent bid for, and won, the contract to build the Fine Arts Building at the Corner Brook campus of the University of Newfoundland. To assist it in fulfilling this contract, Dobbin hired carpenters who were not affiliated with the Union. The Union claimed that this amounted to a breach of the collective agreement it had with Bradco because Dobbin was an affiliated company of Bradco.
The arbitrator found in favour of the Union. This decision was upheld by the Supreme Court of Newfoundland, Trial Division (1988), 75 Nfld. & P.E.I.R. 308, 234 A.P.R. 308, but reversed by the Court of Appeal (1990), 81 Nfld. & P.E.I.R. 181, 255 A.P.R. 181.
Relevant Statutory Provisions
The Labour Relations Act, 1977, S.N. 1977, c. 64
84. (1) An arbitration board appointed pursuant to a collective agreement or in accordance with this Act
(a)may determine its own procedure, but shall give full opportunity to the parties to the proceeding to present evidence and make submissions to it;
(b)has in relation to any proceeding before it, power to
(i)summon and enforce the attendance of witnesses and compel them to give oral or written evidence on oath and to produce such documents and things as the arbitration board deems requisite to the full investigation and consideration of any matter that is within its jurisdiction and before it in the proceeding;
(ii)administer oaths and affirmations;
(iii)receive and accept such evidence and information on oath, affidavit or otherwise as the arbitration board deems desirable, whether admissible in a court of law or not; and
...
(c)has power to determine any questions as to whether a matter referred to the arbitration board is arbitrable.
...
88. (1) Subject to subsection (12), this section applies only to the construction industry.
(2) Where an employer or employers' organization has entered into a collective agreement, then, notwithstanding anything to the contrary in this Act or in the collective agreement, any dispute or difference between the parties to the collective agreement, including persons bound by the collective agreement, relating to or involving
(a)the interpretation, meaning, application or administration of the collective agreement or any provision of the collective agreement;
(b)a violation or an allegation of a violation of the collective agreement;
(c)working conditions; or
(d)a question whether a matter is arbitrable;
shall be submitted for final settlement to arbitration in accordance with this section in substitution for any arbitration or arbitration procedure provided for in the collective agreement.
Relevant Provisions of the Collective Agreement
Article 1 -- Purpose
1.01 The purpose of this Agreement is to establish the contractual working conditions between the parties hereto;to establish wages, working conditions and certain benefits for the employees herein represented and to provide for the settlement of dispute without a stoppage of work between the parties hereto.
Article 2 -- Recognition
2.04The terms and conditions of this Agreement are binding upon the employer, its officers and members; and upon any party, person, association or company doing subcontract work that falls within the jurisdictional claims of the carpenters.
An arbitrator shall have the right to award liquidated damages in the event of a proven violation of the above.
Article 3 -- Preservation of Work
3.01Effective the date of signing of this Agreement and expiring April 29, 1988, the parties agree that if and when the Employer shall perform any work of the type covered by this Agreement at the site of a construction project, under its own name or under the name of another, as a corporation, company, partnership or any other business entity, including a joint venture, wherein the Employer (including its officers, directors, owners, partners or stockholders) exercises either directly or indirectly (such as through family members) any significant degree of ownership, management or control, the terms and conditions of this Agreement shall be applicable to all such work.
3.02The Employer shall operate a strictly union shop and shall not employ non-union tradesmen either in their own right or through any affiliated, subsidiary or related company.
3.03 All alleged violations of this Article shall be considered a dispute under this Agreement and shall be processed in accordance with the grievance and arbitration provisions of this Agreement. As a remedy for violations of this Article, any arbitrator or arbitration board appointed under this Agreement shall be empowered at the Unions' request to require the Employer to (1) pay to affected employees covered by this Agreement, the equivalent of wages lost by such employees as a result of the violations, and (2) pay into the affected joint trust funds established under this Agreement any delinquent contributions to such funds which have resulted from the violations, including such interest as may be prescribed by the arbitrator or arbitration board. Provision of this remedy herein shall not make it the exclusive remedy to the Union for violations of this Article; nor does it make the same as other remedies unavailable to the Union for violations of other Articles of this Agreement.
3.04All work bid prior to September 12, 1986 shall not be affected by this Article and shall be completed on terms and conditions in existence prior to the date of signing, except that work bid by non-union businesses within the scope of Article 1.01 prior to September 12, 1986 shall be performed in accordance with the terms and conditions of this Agreement subsequent to the 12th day of May, 1987.
3.05This Article shall not be affected or revised by any bridging provision of this Agreement.
Lower Court Judgments
Arbitrator (Dr. Arthur M. Sullivan, Dec. 3, 1987)
Tracing the history of the relationship between the Union and Bradco, the arbitrator found that it was a "long and troubled" one. The existence of the two companies permitted Bradco to engage in the practice of "double-breasting", whereby the non-unionized arm (Dobbin) could bid on contracts and carry out work using the facilities, management personnel and equipment of the unionized arm (Bradco) but could hire non-union personnel. This situation eventually led to a prolonged strike in 1986.
The arbitrator found that the 1986 strike was settled in accordance with a report prepared by Dr. Leslie Harris, which formed the basis of the collective agreement now in force. Both sides made significant concessions. The Union agreed to wage concessions, while the companies agreed to stop engaging in "double-breasting". The arbitrator found that Article 3 was incorporated into the agreement in an effort to guarantee the companies' compliance with the "double-breasting" concession.
While the respondent Bradco conceded that Bradco and Dobbin were related in the sense that they share principals, shareholders, equipment and facilities, Bradco argued that it did not perform any of the work on the Fine Arts Building contract and thus had not violated Article 3.01. In Bradco's view, "Employer" in Article 3.01 should read "Bradco" and "the Union" should read "the United Brotherhood of Carpenters and Joiners of America, Local 579". The contract was bid upon and awarded to Dobbin, and work was carried out solely by Dobbin. The only circumstance under which Article 3.01 would "kick in" would be if Bradco had bid on the contract and had the work performed by Dobbin or another related company. Bradco further argued that the wording of Article 3.01 was clear and that, in the absence of any ambiguity, it was not open to the arbitrator to consider extrinsic evidence.
The arbitrator found that the words "perform any work", as used in Article 3.01, were not clear and unambiguous. Further, he rejected Bradco's suggested interpretation of when Article 3.01 would "kick in" as leading to an absurdity or at least to an inconsistency with the rest of the collective agreement. If the clause could only be invoked when Bradco bid on a contract and assigned it to Dobbin, effectively it never would be, for there was no need for Bradco to bid on a contract when Dobbin had the same capabilities as Bradco, including access to the same facilities and management.
Given his finding that the language of Article 3.01 was not clear and unambiguous, the arbitrator found he was entitled to look at extrinsic evidence in an effort to arrive at the most probable interpretation. He found that the most relevant extrinsic evidence was the report of Dr. Harris, upon which the agreement was based. According to the report the signatory companies agreed "to place all double-breasting activities in abeyance for the terms of the Collective Agreements and, in respect of all work commenced or bid after the conclusion of the Agreement, to run a strict union shop operation ...". In his opinion, this case presented "a clear example of double-breasting of the sort which the Harris Report was intended to terminate". He accordingly found in favour of the Union.
Supreme Court of Newfoundland, Trial Division (1988), 75 Nfld. & P.E.I.R. 308
Hickman C.J. also rejected Bradco's argument that Article 3.01 of the agreement should not come into play because Bradco did not itself "perform any work" of the sort covered by the agreement. In his view, this interpretation "would indeed lead to an absurdity and would be totally inconsistent with the clear intent of the Collective Agreement and, in particular, Clause 3 thereof" (p. 312).
In Hickman C.J.'s view, the ratio decidendi of the arbitrator in deciding to look at extrinsic evidence as an aid to interpretation was correct and not an error in law. The proper approach to be taken by an arbitrator in interpreting a collective agreement is to look at the language in dispute. If he reasonably concludes that the words used are not clear, then he may consider extrinsic evidence to ascertain the intention of the contracting parties. Further, Hickman C.J. found that the extrinsic evidence supported the arbitrator's interpretation of the agreement, stating as follows, at p. 313:
It is clear from the Collective Agreement, as a whole, that section 3.01 embraced all nonunion companies which were owned or controlled by unionized companies who, by virtue of their membership in the Association, were parties to the Collective Agreement. This is the only reasonable interpretation one can reach bearing in mind the Harris report which was accepted by the Association and the Union and formed the basis for the Collective Agreement which was designed to eliminate double-breasting by unionized companies whose shareholders and directors also controlled a nonunionized Company. Section 3.02 adds validity to that conclusion. Such provision in the Collective Agreement is enforceable as it embraces only associated nonunion companies.
Hickman C.J. also rejected the implied submission of Bradco that Dobbin was in the same position as a non-union company which is totally independent of members of the Association, stating that Dobbin was a non-unionized company under the control and management of a unionized company.
The trial judge then quoted Lamer J. (as he then was) in Blanchard v. Control Data Canada Ltd., [1984] 2 S.C.R. 476, with respect to judicial deference to arbitrators and administrative tribunals, and concluded that the decision of the arbitrator was reasonable and should not be disturbed.
Supreme Court of Newfoundland, Court of Appeal (1990), 81 Nfld. & P.E.I.R. 181
The judgment of the court was written by Goodridge C.J.N. (Gushue and Mahoney JJ.A. concurring). Citing this Court's decisions in Bradburn v. Wentworth Arms Hotel Ltd., [1979] 1 S.C.R. 846, and CAIMAW v. Paccar of Canada Ltd., [1989] 2 S.C.R. 983, the Court of Appeal noted that the findings of an arbitration board, if covered by a privative clause and acting within its jurisdiction, will only be disturbed if they are "patently unreasonable". Although he stated that there may be some question whether the decision of an arbitrator appointed pursuant to s. 88 of the Newfoundland Labour Relations Act, 1977 was protected by a privative clause, Goodridge C.J.N found this issue to be of no consequence in this matter as the arbitrator's decision failed even the most stringent test.
In this case, the Court of Appeal found, at p. 186, that the test of unreasonableness was to be applied twice:
First of all it is applied to determine whether or not the finding that the agreement is ambiguous is patently unreasonable. Secondly, if such finding is not found to be patently unreasonable, the test is applied to determine whether or not the resolution of the ambiguity is patently unreasonable.
The Court of Appeal found that the arbitrator's determination that the meaning of the phrase "perform any work" was unclear was patently unreasonable as the term "work" was defined elaborately in the agreement, and the term "perform" had a clear meaning to which no latent ambiguity attached. The Court of Appeal also felt that the strict interpretation of Article 3.01 proposed by Bradco was not absurd because it went at least part-way towards avoiding double-breasting: "[i]t prevents Bradco from escaping its obligations under the agreement by subcontracting the work to the Dobbin company or by having the work done on its behalf by the Dobbin company" (pp. 186-87).
Even if the finding of an ambiguity had not been itself patently unreasonable, in the opinion of the Court of Appeal, the arbitrator's resolution of the ambiguity "ignores or misapplies the basic rules of interpretation" (p. 187) and thus was patently unreasonable. Stating that the function of the court is to ascertain what the parties meant by the words they have used, to declare the meaning of what is written and not what was intended to have been written, the Court of Appeal held that the language of Article 3.01 could not support the interpretation of the arbitrator, stating as follows, at p. 188:
If the name of the Dobbin company is substituted in the article it would read as follows:
". . . if and when (Bradco) shall perform any work of the type covered by this agreement at the site of a construction contract under its own name or under the name of (N.D. Dobbin Limited), the terms and conditions of this agreement shall be applicable to all such work."
It is clear from that article that the actor must always be Bradco whether acting in its own name or in the name of another. In this case it is clear from the award that the actor is not Bradco but the Dobbin company for it was that company which successfully tendered on the Fine Arts Building and performed the work done in respect thereof.
The Court of Appeal thus concluded that the arbitrator's resolution of the dispute was unreasonable and went on to consider other points which it stated were not mentioned by Dr. Sullivan. With respect to the appellant's argument that the presence of Article 2.04 dealing with subcontractors made Article 3.01 redundant if it was interpreted as the respondent suggests, the court agreed that there was a presumption against redundancy but that Article 3.01 sought to bind Bradco and companies through which it performs work while Article 2.04 sought to bind subcontractors. The Court of Appeal also rejected the submissions of the appellant that Article 3.02 was in conflict with the respondent's position and that Article 3.04 making the collective agreement applicable to non-union businesses after May 12, 1987 supported the position that Article 3.01 was ambiguous. This latter submission was rejected on the basis that Dobbin was not a business within the scope of Article 1.01, as it was not a signatory to the agreement.
Issues
The issues raised by this appeal are the appropriate standard of review to be applied to the arbitrator's decision given the absence of a full privative clause, the degree to which labour relations arbitrators or boards may admit and rely on extrinsic evidence to interpret a collective agreement, and lastly, whether the arbitrator erred in a reviewable manner either in finding ambiguity in Article 3 of the collective agreement or in concluding that the agreement had been breached by Bradco in the circumstances. I will address each of these issues in turn.
1. The Appropriate Standard of Review
The Court of Appeal characterized the aspects of the arbitrator's decision under review in this case as errors of law within jurisdiction. Before commencing its analysis, the Court of Appeal raised a preliminary question as to whether the decision of the arbitrator in this case was covered by a privative clause, suggesting that if it was not, the court could apply a correctness standard of review to the arbitrator's decision.
Arbitration in this matter was a statutory requirement under the provisions of s. 88 of the Newfoundland Labour Relations Act, 1977, which section applies only to the construction industry, and the question posed by the Court of Appeal was whether the reference in s. 88(2) to submitting a dispute for "final settlement" to arbitration meant that the arbitrator's decision could be reviewed only for jurisdictional error. The general privative clause in The Labour Relations Act, 1977 is found in s. 18, and refers to a decision of the Labour Relations Board as being final and conclusive and not open to review, but does not refer to the decision of an arbitrator appointed under the Act. The Court of Appeal left its own question unanswered as it determined that the decision of the arbitrator failed even the most stringent test (i.e. the patently unreasonable test) and thus was reviewable.
The question posed by the Court of Appeal seems to suggest that in the absence of a full privative clause, no judicial deference is accorded the decision of an administrative tribunal. The issue is not so straightforward. The standard of review to be applied to a decision of an administrative tribunal is governed by the legislative provisions which govern judicial review, the wording of the particular statute conferring jurisdiction on the administrative body, and the common law relating to judicial review of administrative action including the common law policy of judicial deference. The remedy of certiorari at common law and statutory provisions which provide for judicial review permit review of administrative decisions for errors of law on the face of the record. Legislative provisions conferring jurisdiction upon a tribunal often purport either to broaden the scope of judicial review by providing for a statutory right of appeal or to narrow it by invoking words of preclusive effect. Determining the appropriate standard of review, therefore, is largely a question of interpreting these legislative provisions in the context of the policy with respect to judicial deference.
The legislative provisions in question must be interpreted in light of the nature of the particular tribunal and the type of questions which are entrusted to it. On this basis, the court must determine what the legislator intended should be the standard of review applied to the particular decision at issue, having due regard for the policy enunciated by this Court that, in the case of specialized tribunals, decisions upon matters entrusted to them by reason of their expertise should be accorded deference. The statutory provisions to be interpreted in this manner range from "true" privative clauses which clearly and specifically purport to oust all judicial review of decisions rendered by the tribunal (such as that in U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048) to clauses which provide for a full right of appeal on any question of law or fact and which allow the reviewing court to substitute its opinion for that of the tribunal (as in Zurich Insurance Co. v. Ontario (Human Rights Commission), [1992] 2 S.C.R. 321).
Where the relevant legislative provision is a true privative clause, judicial review is limited to errors of jurisdiction resulting from an error in interpreting a legislative provision limiting the tribunal's powers or a patently unreasonable error on a question of law otherwise within the tribunal's jurisdiction. The tests for identifying such errors are set out in Bibeault and affirmed in Canada (Attorney General) v. Public Service Alliance of Canada, [1991] 1 S.C.R. 614 ("PSAC No. 1"), and most recently in Canada (Attorney General) v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941 ("PSAC No. 2"). In the presence of a full privative clause, judicial review exists not by reason of the wording of the statute (which is, of course, fully preclusive) but because as a matter of constitutional law judicial review cannot be ousted completely: see Crevier v. Attorney General of Quebec, [1981] 2 S.C.R. 220.
Although their preclusive effect may be less obvious than that of the true privative clause, other forms of clauses purporting to restrict review may also have privative effect. Wording such as "final and conclusive" and the like may be found to restrict review to matters of jurisdiction if the court concludes that, taking into account the factors referred to above, the legislator clearly intended that the decision should be immune from review in the absence of an error as to jurisdiction. Such was the case in National Corn Growers Assn. v. Canada (Import Tribunal), [1990] 2 S.C.R. 1324, in which this Court found privative effect in a clause which provided that the tribunal's decision, with certain limited exceptions, was "final and conclusive". See also the comments of Gonthier J. in Bell Canada v. Canada (Canadian Radio-television and Telecommunications Commission), [1989] 1 S.C.R. 1722, at p. 1744.
Section 88(2) falls somewhere between a full privative clause and a clause providing for full review by way of appeal. While it does not provide that the decision of the arbitrator is protected from review on any ground of law or fact, it similarly does not provide specifically for appeal or review on these grounds. It simply provides that the arbitrator's decision will amount to final settlement of the dispute. The question is what the legislature intended by the use of this phrase, and specifically whether the phrase mandates the deference of the court to the particular decision made by the arbitrator in this case.
The first point to be made is that the word "final" will not always imply an intended restriction on judicial review. Most statutes which confer rights of appeal from the judgment at trial of a court do so in terms of a final judgment of that court. In that context, the word "final" refers to the fact that the issue as between the parties has been settled and no further steps need be taken for the decision to qualify as a determination of the rights of the parties. In other words, the ruling is not an interim one. The appellate court is not, however, precluded from reviewing this final judgment for errors of law. Whether or not the word "final" should be interpreted in any particular case as conveying an intention to preclude or restrain judicial review requires an analysis of the provision in light of the purpose, nature and expertise of the tribunal to the decision of which it refers. These factors are similar to those referred to in Bibeault, supra, and their application is characterized as the functional approach. It was applied more recently by this Court in Dayco (Canada) Ltd. v. CAW-Canada, [1993] 2 S.C.R. 000.
The provision in the Newfoundland Labour Relations Act, 1977 mandating the referral to an arbitrator of grievances arising out of a collective agreement empowers the arbitrator to decide disputes relating to the collective agreement. The goal of mandatory arbitration is to arrive at an efficient and cost-effective manner of resolving disputes which will enable the parties to continue in their ongoing working relationship to the greatest extent possible. As an unlimited scope of judicial review of an arbitrator's decision would thwart the achievement of this goal, the words "final settlement" must be taken to indicate the legislature's intention that the courts exercise some restraint in this area.
Along with the rationale for its existence, the expertise of the tribunal is of the utmost importance in determining the intention of the legislator with respect to the degree of deference to be shown to a tribunal's decision in the absence of a full privative clause. Even where the tribunal's enabling statute provides explicitly for appellate review, as was the case in Bell Canada, supra, it has been stressed that deference should be shown by the appellate tribunal to the opinions of the specialized lower tribunal on matters squarely within its jurisdiction.
On the other side of the coin, a lack of relative expertise on the part of the tribunal vis-à-vis the particular issue before it as compared with the reviewing court is a ground for a refusal of deference. This point was made by this Court in Zurich, supra, at p. 338, with respect to findings of law made by human rights tribunals (albeit in the context of an extremely broad review clause):
In spite of the ability to overturn decisions of the Board on findings of fact, this Court has indicated that some curial deference will apply even to cases without privative clauses to reflect the principle of the specialization of duties (see Bell Canada v. Canada (Canadian Radio-television and Telecommunications Commission), [1989] 1 S.C.R. 1722, at p. 1746, Etobicoke, supra, at p. 211). While curial deference will apply to findings of fact, which the Board of Inquiry may have been in a better position to determine, such deference will not apply to findings of law in which the Board has no particular expertise.
A similar conclusion has been reached with respect to deference to human rights tribunals on questions of law by a majority of this Court in Canada (Attorney General) v. Mossop, [1993] 1 S.C.R. 554, as set out in the reasons of La Forest J., adopted by Lamer C.J.
With respect to decisions made by a l