Supreme Court favours arbitrator’s decision

The Supreme Court of Canada has quashed the decision of the Court of Appeal for Manitoba in a case where an arbitrator’s creative approach to a union/employer dispute over vacation time for an employee was ultimately deemed to be acceptable.

The decision addressed the use of estoppel in a case involving a part-time worker who was trying to obtain additional vacation time according to the collective agreement she had worked under for more than 20 years.

In Nor-Man Regional Health Authority v. Manitoba Association of Health Care Professionals, Nor-Man Regional Health Authority Inc., and the union were parties to a collective agreement that contained several provisions on casual employees and annual vacations.

In July 2008, Jacqueline Plaisier submitted a grievance, alleging she had been denied certain vacation benefits, in violation of the collective agreement. She had worked for Nor-Man both on a casual and on a part-time, indefinite term basis.

At the time of her grievance Plaisier had been employed continuously for 20 years ? although at times only on a casual basis ? by Nor-Man Regional Health Authority. According to the agreement, paid vacation entitlement was based on length of employment and it indicated that an employee was entitled to an extra week of paid vacation on the 20th anniversary of her employment.

Plaisier claimed the relevant date for calculating her vacation entitlement was July 12, 1988, when she first became employed as a casual nurse’s aide. The employer argued it was May 30, 1999, which is when she became employed in a part-time, indefinite term position, and when she started to accrue seniority under the agreement.

Nor-Man had consistently interpreted the agreement on the basis that credit for casual time was excluded, since casual employees received vacation pay with each pay cheque. Further, the union had never questioned the practice. Seniority reports were regularly produced by Nor-Man, were regularly given to the union, and posted in the workplace.

Plaisier’s seniority report showed her seniority date as May 30, 1999, and her employment date as July 12, 1988. The union’s position was that all casual time should be counted. Her employer calculated her vacation time the same way for over 20 years in a way the union should have known about, but never brought it to the attention of the employer.

The arbitrator in the case deemed it unfair to saddle the employer with the consequences of the union’s inaction, at least until the end of the collective agreement and ruled that the union was estopped, or barred, from raising the issue or asserting its rights under the collective agreement at least until the expiry of the current collective agreement.

The union took issue with that decision and challenged it in the Manitoba Court of Appeal, which ruled that the arbitrator, in using estoppel, didn’t apply all the rules correctly and set aside the estoppel imposed by the arbitrator.

However, on Dec. 2 the Supreme Court in its review of the case, referred to “arbitral creativity” saying arbitrators should respond to the unique situations before them as long as it’s within a realm of “reasonableness.”

In the decision, Justice Morris J. Fish wrote, “In my respectful view, the Court of Appeal erred in reviewing the arbitrator’s decision for correctness: reasonableness is the applicable standard.”

“This decision affirms that arbitrators are to be allowed creativity in fashioning remedies to deal with the dispute before them,” says Alan Freedman, a partner with Hicks Morley Hamilton Stewart Storie LLP. “The Supreme Court is signaling to lower courts that when you’re reviewing arbitral decisions you shouldn’t so readily interfere with them. It affirms that arbitrators should be given significant deference in how they deal with common law and equitable doctrines as long as the arbitrator is reasonably responding to the labour relations issue before them.”

“The court is also saying to arbitrators that they have a different mission than a judge in a court does. Arbitrators are dealing with collective agreements and the parties have an on-going relationship so you can be creative in responding to the issues before you — you can flex common law principles and don’t feel constrained by common law rules that may apply to judges in courts.”

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