NL court of appeal allows union’s appeal in dispute arising from layoffs of pilots amid COVID-19

A court should not conflate the enforcement of a forum selection agreement and the doctrine of forum non conveniens, which were conceptually and analytically distinct grounds to refuse jurisdiction, the Newfoundland and Labrador Court of Appeal recently said.

Exploits Valley Air Services Ltd., an airline headquartered in N.L., conducted operations and had employees in both that province and Nova Scotia. As a federally-regulated business, it was subject to the Canada Labour Code, 1985. It laid off most of its pilots and first officers early during the COVID-19 pandemic.

Unifor Local 2002 was the certified bargaining agent for the airline’s pilots and first officers. Unifor filed a grievance about the recall rights of the terminated employees.

Unifor and the airline agreed to arbitrate the dispute before a single arbitrator. They suggested acceptable arbitrators, chose one based in Halifax, and settled on a hearing process. This process would occur in Halifax. The arbitrator and the representatives would be present, while witnesses from Toronto and St. John’s would appear via video.

The arbitrator dismissed the grievance. Unifor filed a judicial review application in the N.L. Supreme Court. The airline applied for an order setting aside or staying Unifor’s application based on lack of jurisdiction.

The applications judge allowed the airline’s application and dismissed Unifor’s judicial review application. The judge made the following findings:

• The agreement to arbitrate in Nova Scotia implicitly meant that any judicial review of the arbitration award should proceed in that jurisdiction

• While there was no limitation period for judicial review in N.L., there was one in Nova Scotia, which had already expired

• There was no reason to deprive the airline of the juridical advantage that it would have if the judicial review would proceed in Nova Scotia

In Unifor Local 2002 v. Exploits Valley Air Services Ltd., 2023 NLCA 3, the Newfoundland and Labrador Court of Appeal allowed Unifor’s appeal, set aside the order dismissing Unifor’s judicial review application, and dismissed the airline’s application for an order staying or striking the judicial review application.

The applications judge committed errors by failing to separately consider forum selection and forum non conveniens, by concluding without supporting evidence that the parties chose a forum for judicial review, and by misapplying forum non conveniens, the appellate court ruled.

No implicit agreement on forum

The appellate court found no evidence supporting the judge’s conclusion that the agreement to arbitrate in Halifax necessarily implied that the parties chose Nova Scotia as the forum for judicial review. The evidence only showed that the parties chose the arbitrator and that the arbitrator and the parties’ representatives agreed to the location of the arbitration hearing, the appellate court said.

The airline failed to provide any legal principle providing that judicial review of an arbitration award should occur in the same jurisdiction where the arbitrator heard or decided the dispute, the appellate court added.

Forum non conveniens analysis is erroneous

The appellate court disagreed with the judge’s conclusion that Nova Scotia was clearly the more appropriate judicial review forum.

First, the appellate court considered the factors for efficiency, including convenience and expense for the parties or witnesses, and found no clear choice between the two jurisdictions. Next, the appellate court addressed comity or constitutional limitations and found nothing suggesting that the judge should defer to the jurisdiction of Nova Scotia courts.

Lastly, the appellate court tackled the question of juridical advantage. This factor tipped the scale toward N.L. because, if the case proceeded in Nova Scotia, the limitation period’s expiry could prevent resolution of the issues, the appellate court said. Thus, the judge erred by placing this factor on the wrong side of the scale, the appellate court concluded.