Arbitration board finds good faith contracting-out, no breach of collective agreement
The Alberta Court of Appeal has reinstated an arbitration board’s decision that Alberta Health Services’ utilization of agency nurses constituted good faith contracting-out and did not violate its collective agreement with United Nurses of Alberta.
In United Nurses of Alberta v Alberta Health Services, 2025 ABCA 183, the issue was whether Alberta Health’s use of outside agency nurses at the Breton Continuing Care Centre for periods between May 2018 and March 2019 amounted to contracting-out or contracting-in when applying a true employer analysis.
In response to a group grievance, an arbitration board decided that utilizing agency nurses did not breach Alberta Health’s and United Nurses’ collective agreement because such use constituted good-faith contracting-out.
The Alberta Labour Relations Board set aside this decision and remitted the grievance to a new arbitration board. The Labour Relations Board accepted that the arbitration board could use a true employer analysis.
However, the Labour Relations Board found that the arbitration board failed to give enough importance to the length of those nurses’ service and the different durations of the assignments in the cases considered.
Alberta Health challenged this decision. It alleged that the Labour Relations Board committed errors in selecting or applying the reasonableness standard of review and in stressing the importance of length of service in its analysis under the true employer test.
The Court of Appeal of Alberta allowed the appeal, overturned the Labour Relations Board’s decision, and reinstated the arbitration board’s decision.
The appeal court noted that the arbitration board’s majority stated the relevant criteria in Labourers' International Union of North America, Local 183 v. York Condominium Corporation Number 46, 1977 CanLII 1008 (ON LRB), reiterated in Pointe-Claire (City) v. Quebec (Labour Court), 1997 CanLII 390 (SCC), [1997] 1 SCR 1015.
The majority found that six of the seven criteria supported the position that the agency was the employer of the nurses, similar to the case in Metro-Calgary & Rural General Hosp., Dist. No. 93 and U.N.A., Loc. 121, Re, 1988 CanLII 9314 (AB GAA).
The majority noted that day-to-day control was the only criterion supporting the position that Alberta Health was the nurses’ employer, as in Carecor Health Services Inc. and O.N.A., Re, 1992 CanLII 14609 (ON LA).
Regarding duration or length of service, the appeal court ruled that the Labour Relations Board incorrectly determined that the arbitration board unreasonably failed to explicitly address this criterion in its analysis under the true employer test and decided that Alberta Health’s use of agency nurses amounted to permissible good faith contracting-out.
The appeal court found that the arbitration board addressed and weighed the length of service in the context of the relevant criteria, stated the respective dates of service of certain agency nurses in its reasons, and referred to the duration of their assignments.
The appeal court deemed the arbitration board entitled to assess the length of service criterion as it did. The appeal court said the arbitration board made a reasonable, justified, transparent, intelligible, rational, and logical decision considering the parties’ primary issues and concerns.
The appeal court held that the arbitration board reasonably refused to find that the duration of service showed Alberta Health’s intention to create an employer-employee relationship. The appeal court added that the arbitration board reasonably concluded that the agency was the nurses’ true employer in light of the evidence and relevant criteria.
