Supreme Court: Ontario government undermined system of interest arbitration
Decision to appoint only retired judges to chair boards of interest arbitration was patently unreasonable, Court says
In CUPE v. Ontario (Minister of Labour), the Supreme Court of Canada held that the Ontario government undermined collective bargaining legislation when it decided to appoint only retired judges to boards of interest arbitration.
For many years, the chairs of boards of interest arbitration in Ontario were appointed from a roster of trained, experienced arbitrators who were acceptable to both management and labour. However, in early 1998, Minister of Labour in the Harris government began appointing only retired judges to act as interest arbitrators under the Hospital Labour Disputes Arbitration Act (HLDAA). Many of these retired judges had little or no labour relations knowledge or experience.
CUPE and SEIU challenged the new appointment process. The argued that the Minister of Labour had interfered with the independence and impartiality of interest arbitrators. They also maintained that the Minister had interfered with their legitimate expectations and those of other affected unions because, in February 1998, the Minister had promised to continue the existing system for the appointment of the chairs.
The Divisional Court dismissed the application. It held that the Minister’s actions were authorized under HLDAA and could not be challenged.
The Ontario Court of Appeal’s decision
The Ontario Court of Appeal overturned the Divisional Court’s decision. The Court of Appeal held that the Minister’s actions in changing the appointment process was “an attempt to seize control of the bargaining process and … to exclude [the unions] from it [and] to replace mutually acceptable arbitrators with a class of persons seen to be inimical to the interests of labour, at least in the eyes of the appellants.”
The Court of Appeal also held that the Minister’s actions violated the Unions’ legitimate expectations. The Minister had promised to continue the existing system for the appointment of arbitrators, but had then “proceeded in an entirely different direction, one that in the circumstances may be regarded as provocative or defiant.” The Court ordered the Minister of Labour to make appointments from the established roster of experienced arbitrators.
The Harris government appealed the decision to the Supreme Court of Canada.
The Supreme Court’s decision
The Supreme Court of Canada dismissed the Harris government’s appeal. However, it gave different reasons for its decision than the Court of Appeal.
Relying on traditional administrative law principles, the Supreme Court held that the Minister of Labour’s decision to appoint only retired judges to chair boards of interest arbitration under HLDAA was patently unreasonable. The fundamental purpose and object of HLDAA, the Court reasoned, was to provide an adequate substitute for strikes and lockouts. To achieve this purpose, the parties must perceive the system as neutral and credible. In giving the Minister the power to select the chair, the legislature intended that the Minister would have regard to an individual’s relevant labour relations expertise, as well as his or her independence, impartiality and general acceptability within the labour relations community.
In other words, the Court held, the chairs of boards of interest arbitration must have a track record in labour relations. They must generally seen in the labour relations community as widely acceptable to both unions and management. The Court concluded that the Minister’s actions were inconsistent with the legislative intent of HLDAA:
The Minister’s approach was antithetical to credibility because he excluded key criteria (labour relations expertise and broad acceptability) and substituted another criterion (prior judicial experience) which, while relevant, was not sufficient to comply with his legislative mandate…
The Supreme Court disagreed with the Court of Appeal that the Minister should be required to make appointments only from the roster of arbitrators. Some retired judges, not on the roster, have the necessary labour relations background and broad acceptability to both management and labour. The Court declared that, in making appointments, the Minister could appoint persons who are not on the roster. However, the Minister must be satisfied that a prospective chair is independent and impartial, has labour relations expertise, and is recognized in the labour relations community as generally acceptable to both management and labour.