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A-234-79
Canadian Union of Postal Workers (Applicant)
v.
The Queen (Respondent)
Court of Appeal, Pratte and Le Dain JJ. and Hyde D.J.—Montreal, December 12; Ottawa, December 18, 1979.
Judicial review — Labour relations — Arbitral award, made by Arbitrator appointed by Minister of Labour under Postal Services Continuation Act, formed part of collective agreement — Arbitrator had decided that s. 8 of Postal Services Continuation Act provided that the guidelines, estab lished under the Anti-Inflation Act, applied — Application to review and set aside that part of arbitral award dealing with compensation — Whether or not the Arbitrator had the power to grant pay increases higher than those authorized by the guidelines — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28.
APPLICATION for judicial review. COUNSEL:
R. Cleary for applicant.
R. Cousineau for respondent.
SOLICITORS:
Trudel, Nadeau, Létourneau, Lesage & Cleary, Montreal, for applicant.
Deputy Attorney General of Canada for respondent.
The following is the English version of the reasons for judgment rendered by
PRATTE J.: This is an application under section 28 of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, against part of the arbitral award rendered on March 31, 1979 by an Arbitrator appointed by the Minister of Labour under the Postal Services Continuation Act, S.C. 1978-79, c. 1.
The Postal Services Continuation Act came into force on October 19, 1978. It put an end to a strike by the postal service employees, who could not agree with their employer on the terms of the collective agreement that was to replace the one that had expired on June 30, 1977. In addition to ordering the striking employees to return to work, this Act extended the term of the collective agree-
ment which had expired on June 30, 1977 until December 31, 1979, with any changes, however, that the parties agreed to make to it or, if they could not agree on this matter, which an arbitrator to be appointed by the Minister of Labour might decide upon. It is the arbitral award rendered by this Arbitrator which is the subject of this appeal.
It should be pointed out first that applicant is not disputing the entire arbitral award but only the decision made by the Arbitrator with respect to the employees' compensation for the period from July 1, 1977 to December 31, 1978, when the Anti-Inflation Act' was in force.
The applicant Union had argued before the Arbitrator that special circumstances justified its claiming a pay increase for that period higher than the one authorized by the "guidelines" established by the Governor in Council under the Anti-Infla tion Act. The Arbitrator rejected this argument, stating that in view of section 8 of the Postal Services Continuation Act, 2 he was obliged to apply the "guidelines" and had no authority to depart from them. In making this decision the Arbitrator committed an error of law, according to applicant, since, he argued, the Arbitrator had the right and the power to grant pay increases higher than those authorized by the guidelines.
The passages of the arbitral award disputed by applicant are as follows:
[TRANSLATION] ARTICLE 35
This article deals with wages. Part of these wages are for the period from July 1, 1977 to December 31, 1978 inclusive when the Anti-Inflation Act (23-24 Eliz. II, c. 75) was in force. The Union maintained that I am not bound by the guidelines
I S.C. 1974-75-76, c. 75. Section 46(2) of that Act provided: 46....
(2) This Act expires on December 31, 1978 ....
2 This section reads as follows:
8. The Anti-Inflation Act and the guidelines established pursuant to subsection 3(2) of that Act apply to the collec tive agreement to which this Act applies, as extended and amended by or pursuant to this Act, as if that agreement as so extended and amended were a collective agreement entered into between the employee organization and the employer applicable for that portion of the period specified in section 5 that ends December 31, 1978.
established under this Act, that I can exceed them and that only the officers and bodies mentioned in the Act have jurisdic tion to interpret and apply it. He relied on certain decisions of the Quebec Superior Court and the Quebec Court of Appeal. In these cases the arbitrators were acting under the Labour Code and the principal ground for the decisions lay in the fact that they had no mandate with respect to the application of the Act respecting anti-inflation measures (S.Q. 1975, c. 16).
In my view these decisions do not apply to the undersigned mediator-arbitrator, who derives his authority from the Postal Services Continuation Act and the Public Service Staff Rela tions Act (R.S.C. 1970, c. P-35). Section 8 of the former Act provides that "the Anti-Inflation Act and the guidelines estab lished pursuant to subsection 3(2) of that Act apply to the collective agreement to which this Act applies, as extended and amended by or pursuant to this Act ..." The only meaning I can give this provision is that not only do I have the authority but I also have an obligation to apply the guidelines to the amendments I make to the agreement. Moreover, I have no authority to exceed them, since the Anti-Inflation Act confers this power only on certain designated officers and bodies.
In clause 35.03 the employer proposes a pay supplement for 'the period from July 1, 1977 to December 31, 1978. He assured me that this supplement is the maximum that can be granted in view of the guidelines and the Union does not deny this assertion. I am therefore granting this proposal of the employ
er. ...
With respect to clause 35.14 providing for a cost of living allowance, the Union is asking chiefly that the clause be amended retroactively so that the payments made under it could be considered advances on the pay supplement having a retroactive effect. I am of the view that this cannot be done. These are obligations discharged by the employer, payments made once and for all, and to change their effect would defeat the purpose of the guidelines established under the Anti-Infla tion Act. This would be doing indirectly what I have no authority to do directly. The Union's request is therefore rejected.
Is it true, as the Arbitrator ruled, that section 8 of the Postal Services Continuation Act imposed a duty on him to apply the guidelines with the result that he had no authority to depart from them? This is the issue which must be decided.
According to section 8:
8. The Anti-Inflation Act and the guidelines established pursuant to subsection 3(2) of that Act apply to the collective agreement to which this Act applies, as extended and amended by or pursuant to this Act, as if that agreement as so extended and amended were a collective agreement entered into between the employee organization and the employer applicable for that portion of the period specified in section 5 that ends December 31, 1978.
There are two observations to be made regarding this provision. First, that it does not expressly impose any obligations on the Arbitrator, nor does it prescribe any express limitation on his powers; all that it provides is that the Anti-Inflation Act and the guidelines apply to the collective agree ment as amended by the Arbitrator as if it were an ordinary collective agreement. The second obser vation is that the way in which the section is worded indicates that the Anti-Inflation Act and the guidelines apply to the collective agreement only after it has been amended by the Arbitrator, that is, after the latter has exercised his powers. This having been said, the fact remains that in order to determine the effect of section 8, one must have at least a general idea of the Anti-Inflation Act.
This Act empowers the Governor in Council to establish guidelines for the restraint of prices and wages. The responsibility for ensuring that these guidelines are applied is given on the one hand to the Anti-Inflation Board and the Governor in Council and on the other hand to the Administra tor responsible for enforcing the Act. When the guidelines are about to be contravened or have been contravened, the Board or the Governor in Council may inform the Administrator. The latter must then conduct an investigation. If he is satis fied, at the conclusion of this investigation, that there will be or has been a contravention of the guidelines, he may order the person concerned not to contravene them and, where contraventions have already occurred, he may make such remedi al orders as are authorized by the Act. The orders of the Administrator may be rescinded or varied by the Governor in Council; they may also be appealed to the Anti-Inflation Appeal Tribunal.
It should be noted here that the guidelines established by the Governor in Council do not in themselves have any binding force. An agreement is not illegal merely because it contravenes the guidelines; it becomes so only if the Administrator makes an order to that effect. And such an order may be made only if the Board or the Governor in Council has decided to refer the matter to the Administrator—nothing requires them to do so— and if the Administrator himself decides at the conclusion of his investigation to make an order
respecting the contravention he has found or apprehends.
The effect of section 8 of the Postal Services Continuation Act can now be stated. To provide, as this section does, that the Anti-Inflation Act applies to the collective agreement as amended by the Arbitrator is quite simply to say that if the agreement thus amended contravenes the guide lines, the Board or the Governor in Council may inform the Administrator, who may, after investi gation, make an order in this regard. There is nothing in the section, in my view, that limits the powers of the Arbitrator to amend the agreement.
I am therefore of the opinion that the Arbitrator committed an error of law when he found that section 8 of the Postal Services Continuation Act removed any authority he had to grant pay increases higher than those authorized by the guidelines. I would therefore quash the decision. This is not to say, however, that the Arbitrator should ignore the guidelines. He must take them into consideration. If there are circumstances which in his view justify his doing so, however, he may grant pay increases higher than those permit ted by the guidelines.
For these reasons I would quash the decision of the Mediator-Arbitrator respecting the compensa tion payable for the period from July 1, 1977 to December 31, 1978 and would refer the matter back to him for him to decide on the basis that he has the power, if he considers it appropriate, to grant pay increases higher than those permitted by the guidelines.
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LE DAIN J.: I concur.
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The following are the reasons for judgment rendered in English by
HYDE D.J.: For the reasons given by Mr. Justice Pratte I would dispose of this appeal according to his conclusions.
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