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Supreme Court clarifies labour arbitrator jurisdiction

By John Hyde   

Construction Law

John Hyde

John Hyde
(Submitted Photo)

In a recent decision, the Supreme Court of Canada held that a labour arbitrator’s exclusive jurisdiction to resolve disputes based on the interpretation, application and alleged violation of collective agreements can also extend to human rights complaints.


The case

In Northern Regional Health Authority v. Horrocks, the respondent was terminated from a unionized healthcare position after she failed to abide by the terms of an abstinence agreement she entered into with her employer. After signing an agreement stating that she would abstain from alcohol, the respondent nevertheless attended the workplace while intoxicated and was subsequently terminated.

As a consequence, the respondent filed a complaint with the Manitoba Human Rights Commission and alleged that her former employer did not adequately accommodate her disability of alcohol dependency.


The central question for the Supreme Court of Canada to determine was whether a labour arbitrator had jurisdiction to resolve a complaint of discrimination that fell within the scope of both the collective agreement and human rights legislation.

As a number of construction employers are unionized and subject to collective agreements, the Supreme Court’s analysis is pertinent in addressing how disputes in such circumstances will be resolved.


Canadian labour relations statutes, collective agreements and statutory tribunals

Canadian labour relations statutes generally require collective agreements to contain mandatory dispute resolution provisions setting out how differences concerning the interpretation, application and alleged violation of the agreement will be settled. For example, Manitoba’s Labour Relations Act states that every collective agreement must have a provision addressing the final settlement of all differences arising from the agreement. Virtually identical provisions are found in Ontario’s Labour Relations Act, as well as the labour relations codes in British Columbia and Alberta.

As such, construction employers throughout Canada are required to negotiate and determine how workplace disputes based upon the application and alleged violation of collective agreement terms will be resolved.

Furthermore, the Supreme Court of Canada has held that mandatory dispute resolution provisions effectively give the decision-maker appointed under a collective agreement the exclusive jurisdiction to resolve disputes in unionized settings. Typically, this decision-maker is a labour arbitrator.

It must be noted that the labour arbitrator’s exclusive jurisdiction will only extend to disputes that are connected with an alleged breach of the collective agreement, however. In other words, a workplace dispute which cannot be linked to the terms of a collective agreement will fall outside of the labour arbitrator’s exclusive jurisdiction.

This is important to note, as unions can allege that employers have violated the collective agreement on numerous grounds. For example, an employer in the construction industry may find themselves on the receiving end of a grievance whereby the union alleges that an employee was wrongfully terminated because of a protected human rights ground.

For that reason, construction employers must be cognizant of how their collective agreement addresses workplace disputes, as well as the overall terms governing employee rights.

Furthermore, there may be cases where statutory tribunals, such as human rights tribunals, may be empowered to resolve unionized workplace matters that appear to fall squarely within a labour arbitrator’s jurisdiction.

The mere existence of a tribunal that could also theoretically resolve a workplace matter is not enough to displace labour arbitration as the sole method of dispute resolution in unionized settings. Rather, legislation must demonstrate an intention to empower such tribunals with concurrent jurisdiction to settle such disputes.

For example, the Canada Labour Code empowers the Canada Industrial Relations Board to defer deciding a matter through arbitration if another method of dispute resolution (for example, a human rights tribunal) is deemed more appropriate. As will become clear shortly, the Supreme Court of Canada found that such intent did not exist in the case at hand.


Assessing the relevant legislation

In determining whether a labour arbitrator or the human rights tribunal had jurisdiction to resolve the respondent’s complaint, the Supreme Court began its analysis by interpreting Manitoba’s Labour Relations Act and Human Rights Code.

First, the Labour Relations Act contained a mandatory dispute resolution clause which provided that every collective agreement must contain a provision for the final settlement of all disputes arising out of the agreement. In the case at hand, the parties to the collective agreement selected grievance arbitration as the sole method of resolving disputes, and that decision was binding.

Second, in spite of the fact that Manitoba’s Human Rights Code contained a provision explaining that any person could file a human rights complaint, there was no express language which demonstrated that the Manitoba Human Rights Commission held concurrent jurisdiction with a labour arbitrator.

Thus, the Supreme Court determined that Manitoba’s Labour Relations Act provided a labour arbitrator with the exclusive jurisdiction to resolve disputes and the Human Rights Commission was an inappropriate forum to hear the respondent’s complaint.

At its core, the dispute in this case centred around a healthcare employer who terminated the respondent after she failed to uphold the terms of an abstinence agreement and attended the workplace while under the influence of alcohol.

Like most collective agreements, if not all, the collective agreement in this case contained a management rights clause. This clause empowered the employer to maintain quality patient care; to discipline or discharge employees for just cause; and to enforce rules in such a way that was fair and consistent with the with the terms of the collective agreement. Thus, the respondent’s complaint was essentially that the employer inappropriately exercised its management rights when it terminated her employment for failing to abstain from alcohol. As a consequence, the Supreme Court determined that the complaint arose from the application and alleged violation of the collective agreement.

Indeed, when confronted with a grievance alleging a human rights violation, unionized employers should know that the facts alleged are what matter most. In other words, the mere fact that a grievance alleges a human rights violation does not mean that a human rights tribunal has jurisdiction to resolve the dispute. Rather, “[a] grievance that raises a human rights issue is nevertheless a grievance for the purposes of employment or labour relations […],” and will be resolved in accordance with the collective agreement’s dispute resolution process.

After considering all of the factors at play, the Supreme Court ultimately determined that the respondent’s complaint fell within the jurisdiction of the labour arbitrator, as opposed to the Manitoba Human Rights Commission.


The bottom line

This Supreme Court decision is binding across Canada.

Many Canadian construction employers are unionized, meaning that the terms of employment between them and their workforce are governed by collective agreements. If a collective agreement empowers a labour arbitrator to settle disputes, the arbitrator will have exclusive jurisdiction to resolve matters related to its interpretation, application, and alleged violation. This is true, whether or not the grievance contains an allegation that the employee’s human rights have been violated.

Assessing the proper forum for hearing a complaint is a technical and increasingly specialized assessment. For that reason, we recommend that unionized employers retain the services of a lawyer with expertise in construction labour relations when dealing with allegations that they have violated the terms of the collective agreement and/or employee human rights.


John Hyde is the managing partner at Hyde HR Law in Toronto. He advises management on all aspects of employment and labour law, including representation before administrative tribunals, collective agreement negotiation, arbitrations, wrongful dismissal defence and human rights.

He also assists clients in providing strategic legal and human resources advice on labour and employment matters arising out of complex mergers, acquisitions and the sale of businesses.

For more information about his firm or how to protect your construction company, please visit www.hydehrlaw.com.



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