Judgments

Decision Information

Decision Content

A-222-77
Canadian Pacific Limited (Appellant)
v.
United Transportation Union (Respondent)
Court of Appeal, Heald, Urie and Ryan JJ.— Ottawa, December 15, 1977 and March 21, 1978.
Jurisdiction — Labour relations — Labour contract involv ing railway — Contract subject to Maintenance of Railway Operations Act, 1973 — Whether action within Court's juris diction being based on Canada Labour Code and Maintenance of Railway Operations Act, 1973, or whether action merely concerned with interpretation of contract under provincial law, or whether contract exclusively assigned jurisdiction to Arbi trator because of joint effect of arbitration clause and s. 155 of the Canada Labour Code — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 23 — Canada Labour Code, R.S.C. 1970, c. L-1, ss. 154, 155 — Maintenance of Railway Operations Act, 1973, S.C. 1973-74, c. 32, ss. 13(2), 15, 16.
Appellant appeals Trial Division's decision to dismiss appel lant's action for want of jurisdiction. The action appears to be one in relation to labour relations in a work or undertaking connecting provinces or extending beyond the limits of a prov ince. Appellant submits that its claims were made under either the Canada Labour Code or the Maintenance of Railway Operations Act, 1973. Respondent, however, argues that the action involves simply the interpretation of collective agree ments and as agreements between subjects, an area of contract law not within the scope of the term "laws of Canada". Alternatively, respondent contends that the arbitration clause, read with section 155 of the Canada Labour Code, exclusively assigned jurisdiction to the Arbitrator.
On June 25, 1971 the parties entered into two collective agreements for Eastern and Western Regions which expired December 31, 1972. The revision of the agreements was the subject of a Conciliation Board report in August 1973. Due to a strike that year by other railway employees, Parliament enact ed the Maintenance of Railway Operations Act, 1973 which extended the collective agreements to include the period begin ning January 1, 1973 and ending when new collective agree ments came into effect or on December 31, 1974, whichever occurred earlier. The Act also provided for the appointment of an Arbitrator to resolve the issues.
Following the Arbitrator's report in January 1974, the par ties entered into collective agreements which left open the "crew consist issue", among others, until decided by the Arbi trator. The Arbitrator reached his decision on December 3, 1974, but only made his decision on the "crew consist issue" public on January 8, 1975. The Court of Appeal dismissed the Union's section 28 application to review and set aside the award on the ground that it was a purely academic issue because the effect of the award had been spent. The parties have since entered into collective agreements covering the period from
January 1, 1976 to December 31, 1977, but these do not revise or refer to the "crew consist issue".
Held, the appeal is dismissed. For purposes of section 23 of the Federal Court Act, the claims in this action were brought under a statute of the Parliament of Canada because they were brought in respect of collective agreements deriving their legal character from the Canada Labour Code. This dispute—the "crew consist issue"—presented an immediate problem raising a question of interpretation, and as such falls within the Canadian Railway Arbitration Agreement. It was an apt ques tion for direct submission to the Arbitrator in accordance with the procedure provided in the Arbitration Agreement itself. The selection, by the parties, of arbitration as the means of final settlement did constitute a special assignment of jurisdic tion to determine the issues imposed by the present action. This case deals with collective labour agreements, not commercial contracts, in respect of which the Canada Labour Code directs that there shall be final settlement of disputes arising under its terms by arbitration, or otherwise, as determined by agreement of the parties, or by the Canada Labour Relations Board on application. The parties selected arbitration. The Canada Labour Code provisions relating to the settlement of disputes arising in collective agreements indicate a very different policy from the policy, in the law dealing with commercial contracts, against permitting the parties to oust the jurisdiction of the courts by providing for settlement by arbitration.
Quebec North Shore Paper Co. v. Canadian Pacific Ltd. [1977] 2 S.C.R. 1054, distinguished. McNamara Con struction (Western) Ltd. v. The Queen [1977] 2 S.C.R. 654, distinguished. Howe Sound Co. v. International Union of Mine, Mill and Smelter Workers (Canada), Local 663 [1962] S.C.R. 318, distinguished. McGavin Toastmaster Ltd. v. Ainscough [1976] 1 S.C.R. 718, distinguished.
APPEAL. COUNSEL:
C. R. O. Munro, Q. C. and T. J. Maloney for appellant.
M. W. Wright, Q.C. and J. L. Shields for respondent.
SOLICITORS:
Law Department, Canadian Pacific Limited, Montreal, for appellant.
Soloway, Wright, Houston, Greenberg,
O'Grady, Morin, Ottawa, for respondent.
The following are the reasons for judgment rendered in English by
RYAN J.: This is an appeal by the appellant, Canadian Pacific Limited (in these reasons referred to as "Canadian Pacific"), from a judg ment of the Trial Division [ [ 1977] 2 F.C. 712] delivered on April 1, 1977, dismissing an action by Canadian Pacific against the respondent, United Transportation Union (referred to as "the Union") on the ground that the Court lacked jurisdiction.
Resolution of the jurisdictional issue depends on whether the action is one brought pursuant to jurisdiction vested in the Trial Division by section 23 of the Federal Court Act', R.S.C. 1970 (2nd Supp.), c. 10, and whether, if it is such an action, the jurisdiction of the Court is ousted by the closing words of section 23, the words "... except to the extent that jurisdiction has been otherwise specially assigned".
The action has to do with the interpretation or, as the appellant would have it, the contents of certain collective agreements between the parties, one of which, Canadian Pacific, is an interprovin- cial carrier. It thus appears to be an action in relation to labour relations in a work or undertak ing connecting provinces or extending beyond the limits of a province. Canadian Pacific submitted that the claims for relief sought by it were made either under the Canada Labour Code 2 or under the Code and the statute entitled the Maintenance of Railway Operations Act, 1973 3 (sometimes referred to in these reasons as the "Special Act"). The Union's response was that the action was
' Section 23 of the Federal Court Act provides:
23. The Trial Division has concurrent original jurisdiction as well between subject and subject as otherwise, in all cases in which a claim for relief is made or a remedy, is sought under an Act of the Parliament of Canada or otherwise in relation to any matter coming within any following class of subjects, namely bills of exchange and promissory notes where the Crown is a party to the proceedings, aeronautics, and works and undertakings connecting a province with any other province or extending beyond the limits of a province, except to the extent that jurisdiction has been otherwise specially assigned.
2 R.S.C. 1970, c. L-1, as amended.
3 S.C. 1973-74, c. 32.
simply one involving the interpretation of collec tive agreements, agreements between subjects, a dispute which was susceptible of resolution by the principles and rules of the law of contract, princi ples and rules that are not within the scope of the term "laws of Canada" as that term has been construed by the Supreme Court of Canada in recent decisions'. The alternative submission of the Union was that, even if the claims were brought under a law of Canada, the effect of the arbitration clause in the collective agreements in question, read in conjunction with section 155 of the Canada Labour Code, was that the jurisdiction in relation to the claims had been otherwise spe cially assigned: it had been assigned exclusively to the Arbitrator.
The factual background to the present action is rather complicated.
On June 25, 1971, Canadian Pacific and the Union entered into two collective agreements, one in respect of the Pacific and Western Region of the railway, the other in respect of the Eastern and Atlantic Region. These agreements were to expire on December 31, 1972. The revision of the agree ments for the period beginning January 1, 1973 was the subject of conciliation, and the Concilia tion Board reported in August 1973. Certain Canadian Pacific employees then went out on strike. The employees represented by the Union were not involved in the strike. The operations of the railway ceased. Parliament passed the Mainte nance of Railway Operations Act, 1973. Canadian Pacific was required to resume operations and the employees were required to resume work. The collective agreements between Canadian Pacific and the Union, which had expired, were extended to include the period beginning January 1, 1973 and ending when new collective agreements came into effect or on December 31, 1974, whichever was earlier'.
a Quebec North Shore Paper Company v. Canadian Pacific Limited [1977] 2 S.C.R. 1054, and McNamara Construction (Western) Limited v. The Queen [1977] 2 S.C.R. 654.
5 Subsection 13(2) of the Maintenance of Railway Opera tions Act, 1973,
13. ...
(2) The term of each collective agreement to which this Part applies is extended to include the period beginning
The Governor in Council was authorized by the Act to appoint an arbitrator, and to refer to him, by order, the matters relating to amendment or revision of the collective agreements that remained in dispute at the time the order was made 6 . Any decision of the arbitrator, made pursuant to such a reference, was deemed to be incorporated in the collective agreements between Canadian Pacific and the Union, and the collective agreements, as amended, were made effective for such period ending not earlier than December 31, 1974, as might be fixed by the arbitrator'.
The Honourable Emmett M. Hall was appoint ed Arbitrator. Among the disputes between Canadian Pacific and the Union that were referred to him was what came to be known as the "crew consist issue". Canadian Pacific had made a "demand" on the Union for inclusion in the collec-
January 1, 1973 and ending on the day on which a new collective agreement in amendment or revision thereof comes into effect, or on December 31, 1974, whichever is the earlier.
6 Subsections 16(1) and (2) of the Act are in these terms:
16. (1) Upon receipt by the Minister of Labour of a report of a mediator under subsection 15(4), or where the Minister of Labour does not appoint a mediator under subsection 15(1), (2) or (3), the Governor in Council may, on the recommendation of the Minister of Labour, appoint an arbitrator.
(2) The Governor in Council may, by order, refer to an arbitrator appointed under subsection (1) all matters relating to the amendment or revision of a collective agreement to which Part I, II or III applies that, at the time the order is made, are in dispute between the parties thereto and provide for the form in which any decision of the arbitrator shall be set forth.
Section 15 of the Act authorized the appointment of mediators by the Minister of Labour.
7 Subsection 16(4) of the Act provides:
16. ...
(4) In the event that an arbitrator is appointed under subsection (1) and decides any matter not agreed upon at the time of his decision between the parties to a collective agreement to which Part I, II or III, as the case may be, applies, such collective agreement shall be deemed to be amended by the incorporation therein of such decision and the collective agreement as so amended thereupon constitutes a new collective agreement in amendment or revision of the collective agreement to which Part I, II or III, as the case may be, applies effective for such period ending not earlier than December 31, 1974 as may be fixed by the arbitrator.
tive agreements of a procedural clause for the purpose of determining in specific cases whether the number of employees employed on a freight train caboose should be reduced from two to one. The Union resisted this demand.
The Honourable Mr. Hall made a report dated January 16, 1974. In respect of the crew consist issue, he decided that operations with reduced crews should be tested before he reached a deci sion on the question. He said:
Pending June 30 I will retain jurisdiction over this rule change item as I have already done in connection with the job security item. After July 1, 1974, I will fix a time and place to hear representatives and will then issue an order or award and subject to such conditions as the circumstances will then justify. Meanwhile the status quo will be maintained.
Canadian Pacific and the Union entered into agreements on February 1, 1974 to give effect to Mr. Justice Hall's January 16 award, one in rela tion to the Atlantic and Eastern Region, the other to the Prairie and Pacific Region. They were iden tical in all material respects. Each contained this clause:
Reduction of Crew Consist in All Classes of Freight Service
The Company's demand—Reduction of Crew Consist in All Classes of Freight Service—shall be dealt with in the manner specified in the Report of the Arbitrator—Railways Arbitration 1973—dated January 16, 1974.
Mr. Justice Hall heard further representations concerning the crew consist issue during the summer of 1974, as he had indicated he would. The events that followed the hearings are set out in the agreement between the parties as to the facts, an agreement prepared for the purposes of this case. I quote this extract (references to the plain tiff are, of course, references to Canadian Pacific, and to the defendant are references to the Union):
On December 3, 1974 the Honourable Emmett M. Hall, the Arbitrator referred to as such in the pleadings herein, (herein- after referred to as "the Arbitrator"), reached a decision on the four matters reserved by his award of January 16, 1974, namely, the job security issue, application of job security plan to wharf employees, the contracting out issue and the crew consist issue, signed an award in respect thereto and forwarded
the same to the Federal Department of Labour for communica tion to the parties.
On or about December 3, 1974 officers of the Defendant were informed by an official in the Department of Labour that the said award was more favourable to the Railways than to the Union.
In the early part of November, 1974 negotiations with respect to the conclusion of new collective agreements between the Defendant and the major Canadian Railways, including the Plaintiff, had advanced to the stage where tentative agreement had been reached as to their terms, subject only to ratification by the membership. The Defendant was then in the process of conducting a referendum by ballot of its members across Canada with respect to such ratification.
On or about the 5th day of December, 1974 an official of the Defendant expressed concern both to the Arbitrator and to an official of the Department of Labour that publication of an unfavourable award at that particular time might influence adversely the outcome of the ratification vote and that that result could be avoided by the postponement of the publication of the award for a brief period until after the ballot had been taken. As a result of those representations to the Arbitrator by the Defendant the Arbitrator consulted with the Department of Labour and it was decided between them that to satisfy the Defendant's representations in that behalf the award dated December 3, 1974 should be broken into two parts, the one containing the award as to the job security issue, application of job security plan to wharf employees and the contracting out issue, for publication in due course, and the other, relative to the crew consist issue, for publication early in the new year. Consequently an award bearing date December 9, 1974 was published on or about that date with respect to the first three issues mentioned above and a separate award with respect to the crew consist issue bearing date January 8, 1975 was published on or about that date.
The award bearing date January 8, 1975 was in all respects the same award as that comprehended in the unpublished award dated December 3, 1974 and would have been published with the award bearing date December 9, 1974 except for the representations made to the Arbitrator as hereinbefore stated.
Mr. Justice Hall's award as to the crew consist issue was made public on January 8, 1975. Its effect was that Canadian Pacific would be permit ted to reduce the crew on freight trains in certain cases. It also provided a procedural rule for other cases.
It should be noted at this point that, on Decem- ber 11, 1974, Canadian Pacific and the Union executed a memorandum of agreement in respect of each region. The memoranda, under the head ing DURATION OF AGREEMENT, provided:
This Agreement is effective January 1, 1975 and supersedes all previous agreements, rulings or interpretations which are in conflict therewith. It will remain in effect until December 31, 1975 and thereafter until revised or superseded subject to three months' notice by either party after September 30, 1975.
These memoranda contain provisions in relation to such matters as wage rates, annual vacations, yard crews, vacations with pay, and health and welfare. They contain no specific reference either to arbi tration or to crew consist. It is clear that the agreements in existence immediately before the memoranda were executed on December 11, 1974 were to continue into 1975 as the terms of the new agreements except to the extent varied by the terms of the memoranda. It is the submission of Canadian Pacific that Mr. Justice Hall's crew consist award, made (it was submitted) early in December 1974, and published on January 8, 1975, became part of the collective agreements which were in force in 1974 at the time the crew consist award was made. This was so, it was argued, by virtue of subsection 16(4) of the Spe cial Act. The crew consist award, it was said, continued in the 1975 agreements because it was not inconsistent with the terms of the agreements which were made on December 11, 1974 and which became effective on January 1, 1975.
After Mr. Justice Hall's crew consist award was announced in January 1975, the Union applied to the Federal Court of Appeal under section 28 of the Federal Court Act seeking to have the arbitra tion award set aside. The events that transpired in respect of the section 28 application are set out in the agreed statement of facts as follows (the appli cant in the section 28 application was, of course, the Union, and the respondents were Canadian Pacific and the Canadian National Railway Company):
The application was heard on the 8th and 9th days of July, 1975. The fact that the award was dated and published after December 31, 1974 was not a ground relied on by the Appli cant (Defendant in this action) either in its Memorandum of Points of Argument filed therein or in argument by its counsel. On the second day of the hearing during the address of counsel for the Applicant in reply the Federal Court of Appeal, from the Bench, ex proprio motu, expressed itself in the following terms:
The award attacked in these proceedings does not appear to the Court to affect operations of the Railways or collective agreements relating thereto after the end of 1974. Its effect, if it ever had any appears to be spent. The Court is therefore
not satisfied that the issues raised are other than purely academic or that there is any relief that the Court can give.
Thereupon, at the request of counsel for the Applicant the matter was adjourned to be brought on again for further hearing by the Applicant or the Respondents. Counsel for the Applicant brought this situation immediately to the attention of the Arbitrator.
Following consultations between counsel for the Applicant and counsel for the Respondents in the said Section 28 application the matter was brought on for further hearing on the 3rd, day of September, 1975 when counsel for the Plaintiff (Respondent in the said application), with the agreement of counsel for the Applicant, attempted to file several documents including copies of exhibits 12, 13, 22, 23, 27 and 28 and the attachments to exhibit 24 in the examination for discovery referred to in paragraph A hereof.
The Federal Court of Appeal refused to admit or consider the proffered material and reiterated its former observation that the issues raised by the S. 28 application were academic and on calling upon counsel for the Applicant to express his attitude thereto he agreed to the application being dismissed. Thereupon the Court dismissed the S. 28 application.
Following the dismissal of the section 28 application seeking to have the crew consist award of the Arbitrator set aside, Canadian Pacific and the Canadian National Railway Company informed the Union that they proposed to imple ment the award. The position taken was that the dismissal of the section 28 application meant that the award must be taken as having been validly made. It is understandable that the Union rejected this assumption. The companies also took the posi tion that the 1975 collective agreements, made by the parties on December 11, 1974, included the terms of the Arbitrator's crew consist award. The position taken was that, even if the award expired in respect of its statutory validity at the end of 1974, it ` nonetheless had been adopted by the parties as a matter of contract and was thus a term of the 1975 collective agreements. In a letter dated September 12, 1975, the Union, through its coun sel, denied that the crew consist award had become a term of the 1975 agreements, and stated that its implementation by the railways would be resisted and opposed.
Canadian Pacific commenced the present action in the Trial Division on November 5, 1975, seeking a declaration that the terms of the crew consist
award were part of the then current agreements between Canadian Pacific and the Union.
New memoranda of agreement were executed on July 21, 1976. These memoranda provided that the current collective agreements should be revised in accordance with the terms of the memoranda. The memoranda provided that the agreements made by them should be effective on January 1, 1976. It was provided, as previous memoranda had done, that they would supersede all previous agree ments which were in conflict with them. It was also provided that the new agreements would remain in effect until December 31, 1977, and thereafter until revised or superseded subject to three months' notice by either party after Septem- ber 30, 1977. Before the trial of the action, the statement of claim was amended so as to cover the two new agreements running from January 1, 1976 to December 31, 1977.
The action was dismissed and this appeal was taken.
It was submitted by the appellant that the action which claimed a declaration that the crew consist award was a term of the 1975 and the subsequent collective agreements was an action claiming relief or a remedy under a statute of the Parliament of Canada because the collective agreements which were the subject matter of the action derived their character as legal instruments from the Canada Labour Code. Thus the action was properly brought under the authority con ferred on the Trial Division by section 23 of the Federal Court Act.
It is, of course, obvious that a relief or remedy is sought under a statute if it is a relief or remedy specifically provided in the statute. But, it was submitted, a remedy or relief is also sought under a statute if a cause of action is based on legal obligations deriving their force from the terms of the statute. In this case, the remedy sought is a remedy in respect of collective agreements that would be devoid of legal obligation if it were not for the Canada Labour Code.
Because of its certification and of the rights acquired by and the duties imposed on it by the
Code, the Union acquired status to enter into the collective agreements as an entity 8 . The collective agreements are expressly made binding on the parties to them, and on employees within the bargaining unit, by virtue of section 154 of the Canada Labour Code, which provides:
154. A collective agreement entered into between a bargain ing agent and an employer in respect of a bargaining unit is, subject to and for the purposes of this Part, binding upon
(a) the bargaining agent;
(b) every employee in the bargaining unit; and
(c) the employer.
Other sections of the Code regulate in some respects the terms of collective agreements and their duration 9 .
In The Winnipeg Teachers' Association 10 case, Chief Justice Laskin made this observation with respect to the legal character of a collective agree ment when considered apart from legislation:
I am unable to understand how liability for damages for breach of a collective agreement can arise at common law which did not, in this country, give any legal force to a collective agree ment,....
I am of opinion that, for purposes of section 23 of the Federal Court Act, the claims in this action were claims brought under a statute of the Parlia ment of Canada because they were brought in respect of collective agreements deriving their legal character from the Canada Labour Code". The action is, as well, an action involving the administration of a law of Canada, the Code.
e See International Brotherhood of Teamsters v. Therien [1960] S.C.R. 265, particularly at p. 277.
9 See, for example, the Canada Labour Code, sections 160 and 161.
10 The Winnipeg Teachers' Association No. I of the Manito- ba Teachers' Society v. The Winnipeg School Division No. 1 [1976] 2 S.C.R. 695, at p. 709. Chief Justice Laskin was writing in dissent, but this does not affect the force of the quotation for present purposes.
" In section 23 of the Federal Court Act the reference is, I am aware, to a claim for remedy or relief "... under an Act of the Parliament of Canada ...." In section 22, on the other hand, reference is to a claim for remedy or relief "... under or by virtue of Canadian maritime law or any other law of Canada relating to ..." and in section 25 it is to a claim for remedy or relief "... under or by virtue of the laws of Canada ...." The French version of section 23 is, however, worded in this way: où une demande de redressement est faite en vertu d'une loi du Parlement du Canada ...."
The next major question is whether the provi sions for arbitration, agreed upon by the parties, have the effect of ousting the jurisdiction of the Trial Division by virtue of section 155 of the Canada Labour Code and the closing words of section 23 of the Federal Court Act.
There is in effect, between the parties to this action (and others), a memorandum of agreement dated September 1, 1971, which is headed "Canadian Railway Office of Arbitration". I shall refer to this document as the "Canadian Railway Arbitration Agreement". The relevant sections of it are as follows:
CANADIAN RAILWAY OFFICE OF ARBITRATION
MEMORANDUM OF AGREEMENT made this 1st day of Septem- ber 1971 to amend and renew the founding Agreement estab lishing the Canadian Railway Office of Arbitration dated the 7th day of January 1965 (as amended and renewed since that date).
IT IS AGREED by and between the signatories as follows:
1. There shall be established in Montreal, Canada, the Canadi- an Railway Office of Arbitration, hereinafter called the "Office of Arbitration".
4. The jurisdiction of the Arbitrator shall extend and be lim ited to the arbitration, at the instance in each case of a railway, being a signatory hereto, or of one or more of its employees represented by a bargaining agent, being a signatory hereto, of;
(A) disputes respecting the meaning or alleged violation of any one or more of the provisions of a valid and subsisting collective agreement between such railway and bargaining agent, including any claims, related to such provisions, that an employee has been unjustly disciplined or discharged; and
(B) other disputes that, under a provision of a valid and subsisting collective agreement between such railway and bargaining agent, are required to be referred to the Canadian Railway Office of Arbitration for final and binding settle ment by arbitration,
but such jurisdiction shall be conditioned always upon the submission of the dispute to the Office of Arbitration in strict accordance with the terms of this Agreement.
5. A request for arbitration of a dispute shall be made by filing notice thereof with the Office of Arbitration not later than the eighth day of the month preceding that in which the hearing is to take place and on the same date a copy of such filed notice shall be transmitted to the other party to the grievance. A request for arbitration respecting a dispute of the nature set
forth in Section (A) of Clause 4 shall contain or shall be accompanied by a Joint Statement of Issue. A request for arbitration of a dispute of the nature referred to in Section (B) of Clause 4 shall be accompanied by such documents as are specifically required to be submitted by the terms of the collective agreement which governs the respective dispute. On the second Tuesday in each month, the Arbitrator shall hear such disputes as have been filed in his office, in accordance with the procedure set forth in this Clause 5. No hearing shall be held in the month from time to time appointed for the purposes of vacation for the Arbitrator, nor shall a hearing be held in any other month unless there are awaiting such hearing at least two requests for arbitration that were filed by the eighth day of the preceding month, except that the hearing of a dispute shall not be delayed for the latter reason only for more than one month.
6. Subject always to the provisions of this Agreement the Arbitrator shall make all regulations necessary for the hearing of disputes by the Arbitrator which are consistent with the terms of this Agreement and such regulations may be amended by the Arbitrator from time to time as necessary.
7. No dispute of the nature set forth in Section (A) of Clause 4 may be referred to the Arbitrator until it has first been processed through the last step of the Grievance Procedure provided for in the applicable collective agreement. Failing final disposition under the said procedure a request for arbitra tion may be made but only in the manner and within the period provided for that purpose in the applicable collective agreement in effect from time to time or, if no such period is fixed in the applicable collective agreement in respect to disputes of the nature set forth in Section (A) of Clause 4, within the period of 60 days from the date decision was rendered in the last step of the Grievance Procedure.
No dispute of the nature set forth in Section (B) of Clause 4 may be referred to the Arbitrator until it has first been processed through such prior steps as are specified in the applicable collective agreement.
8. The Joint Statement of Issue referred to in Clause 5 hereof shall contain the facts of the dispute and reference to the specific provision or provisions of the collective agreement where it is alleged that the collective agreement has been misinterpreted or violated. In the event that the parties cannot agree upon such joint statement either or each upon forty-eight (48) hours' notice in writing to the other may apply to the Arbitrator for permission to submit a separate statement and proceed to a hearing. The Arbitrator shall have the sole author ity to grant or refuse such application.
12. The decision of the Arbitrator shall be limited to the disputes or questions contained in the joint statement submitted to him by the parties or in the separate statement or statements as the case may be, or, where the applicable collective agree ment itself defines and restricts the issues, conditions or ques tions which may be arbitrated, to such issues, conditions or questions.
His decision shall be rendered, in writing together with his written reasons therefor, to the parties concerned within 30 calendar days following the conclusion of the hearing unless this time is extended with the concurrence of the parties to the dispute, unless the applicable collective agreement specifically
provides for a different period, in which case such different period shall prevail.
The decision of the Arbitrator shall not in any case add to, subtract from, modify, rescind or disregard any provision of the applicable collective agreement.
13. Each decision of the Arbitrator which is made under the authority of this Agreement shall be final and binding upon the Railway, the bargaining agent and all the employees concerned.
The collective agreements themselves also con tain provisions in relation to the settlement of grievances. The practice of the parties in relation to bargaining appears to be that agreements are to run for a stipulated period, and new agreements take the form of the pre-existing agreements as amended. That is to say, a new agreement is not a single integrated document, but consists of the terms of the previous agreement as changed by negotiation in respect of demands for change aris ing from either side. From time to time there appear to be consolidations. There was such a consolidation in respect of the Prairie and Pacific Region effective January 1, 1971. Article 39 of the agreement as consolidated provides in part:
ARTICLE 39
GRIEVANCE PROCEDURE
(a) A wage claim not allowed will be promptly returned. If not returned to the employee within 60 calendar days the claim will be paid.
When a portion of a claim is not allowed the employee will be promptly notified and the reason given, the undisputed portion to be paid on the current payroll.
(b) A grievance concerning the meaning or alleged violation of any one or more of the provisions of this Collective Agree ment shall be processed in the following manner:
Step 1—Presentation of Grievance to Immediate Supervisor
Within 60 calendar days from the date of the cause of grievance the employee and/or Local Chairman may present the grievance in writing to the designated immediate supervisor who will give a decision in writing as soon as possible but in any case within 60 calendar days of date of the appeal.
Step 2—Appeal to Superintendent
Within 60 calendar days from the date decision was rendered under Step 1 the Local Chairman may appeal the decision in writing to the Superintendent.
The appeal shall include a written statement of the grievance along with an identification of the specific provision or provi sions of the Collective Agreement which are alleged to have been misinterpreted or violated. A decision will be rendered in writing within 60 calendar days of the date of the appeal.
Step 3—Appeal to Regional Manager
Within 60 calendar days from the date decision was rendered under Step 2, the General Chairman may appeal the decision in
writing to the Regional Manager, whose decision will be ren dered in writing within 60 calendar days of date of the appeal. The decision of the Regional Manager shall be final and binding unless within 60 calendar days from the date of his decision proceedings are instituted to submit the grievance to the Canadian Railway Office of Arbitration for final and binding settlement without stoppage of work.
At its conclusion, the consolidated agreement contains this clause:
Final Settlement of Disputes Without Work Stoppage
All differences between the parties to this agreement concern ing its meaning or violation which cannot be mutually adjusted shall be submitted to Canadian Railway Office of Arbitration for final settlement without stoppage of work.
There are similar provisions in the Eastern and Atlantic Region agreement. Clause 39 is substan tially the same in both. The clause headed "Final Settlement of Disputes Without Work Stoppage" quoted above appears at the beginning of the Eastern and Atlantic Region agreement without the heading.
It was submitted by the appellant that the sub ject matter of the action is not covered by the arbitration clauses. The submission was that the declaration sought was not a declaration as to the meaning of the arbitration award, but rather was as to whether the award was a clause within the relevant agreements. The question raised by the claims, it was said, goes to what constitutes the agreements, not to their meaning.
This submission was rejected, and in my view properly so, by the Trial Judge. He said [[1977] 2 F.C. 712, at pages 722-723] that the words in the Canadian Railway Arbitration Agreement con cerning arbitration are clear: "... they embrace the very issue now before this Court, namely whether or not the current collective agreement includes the 'crew consist' award. That cannot but be a dispute respecting the meaning of a collective agreement."
The appellant made a further submission which seemed to me to be very technical. The submission, if I understood it properly, was that the statement of claim, in so far as it related to the 1975 collective agreements, raised no issue which would be arbitrable because it sought a declaration as to
the contents or interpretation of agreements that had been replaced by the agreements of 1976- 1977, and, under Clause 4(A) of the Canadian Railway Arbitration Agreement, only disputes under subsisting collective agreements would be arbitrable. The suggested consequence is that, once the 1975 agreements were replaced, the dis pute as to their meaning, not having been submit ted to arbitration, would become litigable. This submission, it appears to me, is based on an unac ceptably narrow reading of the Arbitration Agree ment and the collective agreements.
The dispute as to the meaning of the 1975 collective agreements arose during 1975 and con tinued thereafter. The arbitration provisions of the 1975 collective agreements were not changed by the memoranda of agreement of July 21, 1976. Each memorandum began with the words: "The current Collective Agreement shall be revised as follows:...", and concluded in the same way as previous memoranda had done: "This Agreement is effective January 1, 1976 and supersedes all previous Agreements ... which are in conflict therewith ..." [emphasis added]. It would in my view be unrealistic to conclude that disputes that had arisen in 1975 would be cut off from arbitra tion unless they were submitted to arbitration before the 1976-1977 agreements became effec tive. This would seem to me to disregard the flow or continuity of the process of bargaining by the parties for so many years. As a matter of fact, I should think that the consequence of the appel lant's submission, if it were sustainable at all, would be that the occasion had been missed for resorting to the only forum provided.
It was also argued that, assuming the dispute is one as to the meaning of collective agreements, it is a dispute which could not be taken to arbitration by Canadian Pacific, the employer, under the col lective agreements. Under Clause 7 of the Canadi- an Railway Arbitration Agreement such a dispute, it was argued, may not be arbitrated until after it has been processed through the last step in the grievance procedure provided in the collective agreements. The grievance procedure in Article 39 of the collective agreements applies only to griev ances raised by the Union or an employee. Conse-
quently Canadian Pacific would not be able to initiate a grievance leading to arbitration so that the Canadian Railway Arbitration Agreement does not apply to the subject matter of the action.
This, again, seems to be too narrow a reading of the Arbitration Agreement. The Agreement con fers jurisdiction on the Arbitrator over arbitration, at the instance of a railway or of one or more of its employees as represented by the bargaining agent, of (among other things) disputes respecting the meaning of a collective agreement. Clauses 5 and 8 of the Arbitration Agreement provide the proce dure for filing such a dispute. It seems to me that the first paragraph of Clause 7 merely has the effect of ensuring that, if a dispute involves an employee grievance, the grievance procedure must be fully complied with before resort to arbitration. The submission also would have us disregard the more general clause in the collective agreements requiring the submission of all differences over the meaning of the agreements which cannot be mutu ally adjusted to the Canadian Railway Office of Arbitration for final settlement without stoppage of work.
It is my opinion that there has been a dispute between Canadian Pacific and the Union as to the meaning of subsisting and valid collective agree ments at least from the time of the exchange of letters between counsel for the parties in Septem- ber 1975. The dispute arose because of the declared intention of the railway companies to implement the crew consist award, and, therefore, presented an immediate problem raising a question of interpretation. As such, it seems to me to have fallen within the terms of the Canadian Railway Arbitration Agreement, even though it did not involve a grievance of an employee that would have required processing through the various steps of the grievance procedure. It was an apt question for direct submission to the Arbitrator in accord ance with the procedure provided in the Arbitra tion Agreement itself.
There is a final submission by the appellant. This is the submission that, assuming the subject matter of the action is one that falls within the scope of the Canadian Railway Arbitration Agree ment, the jurisdiction of the Trial Division is not
ousted by the provision of the Arbitration Agree ment for final settlement.
With reference to this submission, I would start by referring to Clause 13 of the Canadian Railway Arbitration Agreement which provides that a deci sion of the Arbitrator shall be final and binding. I refer next to section 155 of the Canada Labour Code, which is in these terms:
155. (1) Every collective agreement shall contain a provi sion for final settlement without stoppage of work, by arbitra tion or otherwise, of all differences between the parties to or employees bound by the collective agreement, concerning its interpretation, application, administration or alleged violation.
(2) Where a collective agreement does not contain a provi sion for final settlement as required by subsection (1), the Board shall, on application by either party to the collective agreement, by order, furnish a provision for final settlement, and a provision so furnished shall be deemed to be a term of the collective agreement and binding on the parties to and all employees bound by the collective agreement.
Section 155 establishes a system for the final settlement, without stoppage of work, of disputes arising under collective agreements. Every collec tive agreement must contain a provision for final settlement of the types of differences specified in subsection (1). The parties to an agreement are thus under a duty to provide for such final settle ment by arbitration or by some other means. If they fail to fulfil this duty (possibly by a good faith failure to select a method), the Board itself is to make the provision on the application of either party, and the provision so determined becomes part of the collective agreement. It is within this context that the effect of the closing words of section 23 of the Federal Court Act must be determined. And it is my view that in this case the selection, by the parties, of arbitration as the means of final settlement did constitute a special assignment of jurisdiction to determine the issues posed by the present action.
It is true that the parties might have chosen another method; it is also true that they might have failed to choose a method and, accordingly, the Canada Labour Relations Board might have had to furnish a provision for final settlement on application by a party. I, of course, recognize that the duty of the Board to furnish such a provision arises only when one of the parties makes an
application. Subsection 155(1) does, however, itself require that every collective agreement shall provide a method for final settlement without stop page of work, and the parties to the agreement have chosen arbitration as that method. It is not necessary to speculate on what the situation would have been if they had not done so.
The appellant placed considerable reliance on the decision of the Supreme Court of Canada in Howe Sound Company v. International Union of Mine, Mill and Smelter Workers (Canada), Local 663 12 . I do not see, however, that the case is particularly helpful for present purposes. So far as we are concerned, the point of interest in the Howe Sound case is that, there, it was held that the decision of an arbitration board under a collective agreement providing for final settlement by arbi tration was not a decision of a statutory tribunal because, having in mind that some other method of final settlement might have been chosen under the terms of the statute there involved, just as it might have been in this case, the arbitration method was not statutorily required. It followed that the deci sion of the Arbitration Board was not subject to review by certiorari. It does not, however, follow, as I see it, that the arbitration method selected by the parties to the collective agreements in this case as the method for final settlement of disputes, when considered within the context of section 155 of the Canada Labour Code, did not constitute a special assignment of jurisdiction in respect of the subject matter of the action for purposes of section 23 of the Federal Court Act.
The appellant also relied on the well known line of cases establishing that, in relation to commer cial contracts and to other contracts deriving valid ity from the common law, a provision for final settlement of disputes by arbitration does not have the effect of ousting the jurisdiction of the courts, but, at most, may found an application for a stay of proceedings if an action is brought before arbi tration. The present case, however, is one involving a section of the Federal Court Act which assigns jurisdiction, in particular categories of cases, to the Trial Division of the Court, an assignment which is
12 [1962] S.C.R. 318.
made subject to an express limitation. What we are faced with is the interpretation of that limita tion, having in mind section 155 of the Canada Labour Code and the provisions of collective agreements that fall within its scope. It seems to me that the commercial arbitration cases are dis tinguishable for this reason. In any event, and for present purposes, they appear to me to do no more than indicate that, in cases involving commercial contracts, there is a policy reason against permit ting the parties to oust the jurisdiction of the courts by providing for settlement by arbitration. A contrary policy is, however, indicated by the relevant provisions of the Canada Labour Code in relation to the settlement of disputes arising from collective agreements.
It is, I think, not without pertinence to the present issue to have in mind the character of collective agreements. As the appellant has sub mitted, and as I have found, such agreements derive their validity from statute, not from the common law of contract. Their distinctive charac ter has been indicated in judicial opinions, some of which were referred to in McGavin Toastmaster Ltd. v. Ainscough 13 .I recognize that, in that case, the questions had to do with the relationship be tween the collective agreement and the individual contracts of the employees; nonetheless I would quote, as relevant to our problem, this passage from the judgment of Chief Justice Laskin: "Cen- tral to all the benefits and obligations that rest upon the union, the employees and the company under the collective agreement are the grievance and arbitration provisions ...." 14
We are dealing in the present case with collec tive labour agreements, not commercial contracts, agreements in respect of which the Canada Labour Code directs that there shall be final set tlement of disputes arising under their terms by way of arbitration or otherwise, as determined by agreement of the parties or, failing such agree ment, by the Canada Labour Relations Board on application. In this case, the parties have in fact selected arbitration as the method of final determi-
13 [1976] 1 S.C.R. 718, particularly at pp. 724 to 727.
14 Ibid., at p. 726.
nation. We are here in quite a different world from the world of commercial arbitration.
I would dismiss the appeal with costs.
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HEALD J.: I concur.
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URIE J.: I concur.
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