THE MINISTER OF LABOUR
FOR
) Leslie
McIntosh
ONTARIO
) for
the respondent
Respondent
)
) Heard:
April 12 and 13, 2000
On appeal from the
judgment of the Divisional Court (Southey, Philp and Lissaman JJ.)
dated February 17, 1999.
AUSTIN J.A.:
OVERVIEW
[1]
The appellants, the Canadian Union of Public Employees (“CUPE”)
and Service Employees International Union (“SEIU”) appeal with
leave from the decision of the Divisional Court made February 17,
1999. The Divisional Court dismissed the appellants’
application for judicial review. The appellants asked for
judicial review of a new process for the appointment of chairs of
arbitration boards (“interest arbitration”) under the Hospital
Labour Disputes Arbitration Act, R.S.O. 1990, c. H.14 (“HLDAA”).
This was a new process adopted by the Minister of Labour (“the
Minister”).
[2]
Chairs of interest arbitrations were previously chosen from a
group composed largely of trained, experienced and mutually
acceptable individuals. The Minister changed the process so
that chairs were chosen from retired judges. The central issue
in this appeal is whether the Minister, in changing the process,
violated the principles of natural justice by interfering with the
impartiality and independence of the arbitrators and raising a
reasonable apprehension of bias, and/or interfering with the
legitimate expectations of the appellants.
[3]
The Divisional Court dismissed the application without
dealing with its merits. It decided that because the applicant
unions did not claim any breach of the Canadian Charter of Rights
and Freedoms (“the Charter”), the actions of the
Minister, being based on a power granted by statute, could not be
attacked as a denial of natural justice or lacking in institutional
independence or impartiality. In my respectful view, the
Divisional Court erred both in dealing with the matter on a
“jurisdictional” basis and in dismissing the application.
[4]
Because of the manner of disposition below, it is necessary
to set out the facts, some of which are disputed, at some length.
THE
FACTS
[5]
The events giving rise to this application began in June 1997
with the Ontario government’s introduction of Bill 136, the Public
Sector Transitions Stability Act, 1997. Amongst other
matters, the Bill proposed to eliminate the existing system of
arbitrations respecting the contents of collective agreements for
employees covered by HLDAA (and for employees covered by the Police
Services Act, R.S.O. 1990, c. P.15 and the Fire Protection
and Prevention Act, S.O. 1997, c. 4 as well) and to replace it
with a permanent Dispute Resolution Commission.
[6]
Organized labour was strongly opposed to many aspects of Bill
136. In particular, CUPE and SEIU were opposed to the
replacement of the existing interest arbitration system with the
Dispute Resolution Commission. Background information about
CUPE and SEIU and of the then existing arbitration system is
required to better understand the appellants’ position.
a)
CUPE and SEIU
[7]
CUPE and SEIU are trade unions who together represent over
200,000 employees. Of these employees, over 70,000 work in
hospitals, nursing homes, homes for the aged and other institutions
included in the definition of “hospital” in HLDAA.
Hospitals and hospital employees provide essential services to the
public; as a result they are denied the right to lock out or to
strike (HLDAA s. 11(1)). Instead, s. 4 of HLDAA requires that
outstanding disputes concerning the negotiation of collective
agreements for such employees be submitted to interest arbitration.
b)
Boards of Arbitration under HLDAA
[8]
A board of arbitration under HLDAA is generally composed of
three persons. One person is named by the union and another is
chosen by the employer. The third person, who becomes the
chair of the board, is either agreed to by the parties or appointed
by the Minister under s. 6(5) of HLDAA. That section reads as
follows:
s.6(5)
Where the two members appointed by or on behalf of the parties
fail within ten days after the appointment of the second of them
to agree upon the third member, notice of such failure shall be
given forthwith to the Minister by the parties, the two members or
either of them and the Minister shall appoint as a third member a
person who is, in the opinion of the Minister, qualified to act.
[9]
According to the appellants, prior to the passage of Bill
136, the vast majority of persons appointed to sit as chairs of
boards of interest arbitrations were chosen by the Minister or his
or her delegate from a list of arbitrators. The list was
initially established in 1979 and was maintained thereafter for the
primary purpose of supplying appointments to boards of rights (or
grievance) arbitration under what is now s. 49(10) of the Labour
Relations Act, S.O. 1995, c.1 Sch. A (“the LRA”). The
appellants refer to the members of this list as "the
roster".
[10]
According to the Minister, there was and is no such roster of
interest arbitrators. Rather, interest arbitrators are
appointed as the occasion arises, from a wide range of sources, one
of which happens to be the arbitration roster maintained pursuant to
the LRA.
[11]
It is common ground that the LRA was amended in 1979 to
provide for the creation and recognition of a group of arbitrators.
Section 49(10) of the LRA does not describe the arbitrators as
belonging to any particular class, such as rights arbitrators or
interest arbitrators. The section reads as follows:
s.
49(10) Approval of arbitrators, etc. – The Minister may
establish a list of approved arbitrators and, for the
purpose of advising him or her with respect to persons qualified
to act as arbitrators and matters relating to arbitration, the
Minister may constitute a labour-management advisory committee
composed of a chair to be designated by the Minister and six
members, three of whom shall represent employers and three of whom
shall represent trade unions, and their remuneration and expenses
shall be as the Lieutenant Governor in Council determines.
(Emphasis added.)
[12]
The Labour Management Advisory Committee (the “LMAC”) was
established pursuant to s. 49(10) of the LRA in 1979 to advise the
Minister about appointments to the list. Since then, LMAC,
which is comprised of both trade union and management
representatives appointed by Order in Council, has ensured that all
persons on the list have expertise in the area of labour
adjudication and are acceptable to both management and union.
In addition to evaluating everyone seeking to be added to the list
of arbitrators, LMAC plans and monitors an Arbitrator Development
Program. Many persons are required to successfully complete
this program before becoming eligible to be placed on the list.
LMAC also conducts on-going reviews of all the arbitrators on the
list to ensure their continued acceptability. Its
recommendations regarding additions to and removals from the list
are invariably accepted by the Minister.
[13]
Marcelle Goldenberg has been actively involved in SEIU
affairs since 1978 and has been SEIU’s Director of Research since
1996. She has been a member of LMAC since 1993. Her
affidavit states that for the 20 years ending June 1997, arbitrators
appointed to sit as chairs of interest arbitrations involving SEIU
collective agreements have been, with two exceptions, “senior
arbitrators appointed from the Ministry of Labour’s roster of
arbitrators”. The two exceptions are Paul Weiler and Ray
Illing, both very experienced, well-known and highly regarded in the
labour relations field and entirely acceptable to the appellants
although not on the roster.
[14]
Julie Davis has been a member of staff of CUPE since 1974 and
has been CUPE’s Chief Administrative Officer since 1996. Her
affidavit parallels Ms. Goldenberg’s; all of the appointments of
interest arbitrators by the Minister or his or her delegate have
been from the roster with the exception of Paul Weiler.
[15]
Anthony A. Dean, Deputy Minister of Labour for the Province
of Ontario, swore the affidavit setting out the Minister’s
position and the factual background. His affidavit dealing
with the protest against Bill 136 reads in part:
9.
Union representatives raised the concern that government would use
this longstanding legislative power [s. 6(5) of HLDAA] to create
the Dispute Resolution Commission through the back door, that is,
that the Minister would begin appointing chairs who could be
counted on to deliver the kinds of settlements the government
wanted. Union representatives asked if we would agree that
no changes would be made to “the list” without their
agreement.
10.
I and the other government representatives understood by this that
the union representatives believed there existed a list of
arbitrators maintained by the Ministry from which appointments of
chairs of interest arbitration boards were made for the purpose of
HLDAA. We replied, first, that no such list exists or had
existed. Second, we stated that we could make no commitment
with respect to future appointment practices. We stated that
under the legislation, the Minister appointed and would continue
to appoint fair, credible people.
14.
A summary of the information prepared by LMS [Labour Management
Services – a branch or office of the Ministry] is attached as
Exhibit “A” to my affidavit. Based on the information
provided by LMS, I believe that in the 1990’s most of the chairs
of interest arbitration boards appointed under HLDAA have also
been on the list of grievance arbitrators recommended to the
Minister by LMAC for the purpose of the Labour Relations Act.
However, prior to 1990, many of the chairs appointed for the
purpose of HLDAA were not on the list. For example, in
1985/86, there were 58 ministerial appointments and of those 19 of
the appointees were not on the list and in 1986/87, there were 80
ministerial appointments and 26 were not on the list. I
believe from the information provided by LMS that many of the
appointees who were not on the list ceased accepting appointments
in the last 8 to 10 years because they were appointed to boards or
commissions or they have retired from practice.
[16]
There is a much more material dealing with the question of
who was appointed to conduct interest arbitrations during the period
1979 to 1997. I have drawn four conclusions from the
materials. First, the main purpose of the machinery set up in
1979 was to produce persons qualified to do rights or grievance
arbitrations who would be acceptable to both sides. Second,
some of the persons so qualified are also skilled in interest
arbitration. My third conclusion is that for some years the
vast majority of interest arbitrators has been appointed by the
Minister or his or her delegate from amongst this second group.
Finally, those appointed to chair interest arbitrations who were not
from the group or roster were persons who were skilled and
experienced in interest arbitration and were quite acceptable to the
unions involved. They included such persons as Paul Weiler,
Ray Illing, former Justice George Adams and Chief Justice Alan Gold.
c)
Delegation of Appointment Power by Minister
[17]
The matter of delegation is also in issue. The appellants say
that although the power to appoint arbitrators is given to the
Minister by s. 6(5) of HLDAA, it was the Minister’s practice to
delegate that power to a civil servant “to reduce the risk of
direct political interference”. Such delegation is
authorized by s. 9.2(1) of HLDAA as amended by S.O. 1997, c.21, Sch.
A, s. 4(8).
[18]
The Minister disputes the degree or amount of delegation.
Mr. Dean’s affidavit contains the following:
20.
For the purpose of responding to this application for judicial
review, LMS was asked to review its records in order to ascertain
whether the Minister of Labour had historically delegated his or
her duty to appoint chairs of interest arbitration boards under
HLDAA. I am advised by Jean Read, the former Director of
Arbitration with LMS, and I believe that she made appointments of
chairs of interest arbitration boards for the purpose of HLDAA
between approximately 1979 and 1981, although there is no record
of a formal delegation. I am advised by Ursula Hardman of
LMS and I believe that between approximately 1982 and 1994 the
various Ministers of Labour personally made appointments of chairs
of interest arbitration boards for the purpose of HLDAA. I
am also advised by Ursula Hardman and I believe that the earliest
delegation of the authority to appoint chairs of interest
arbitration boards under HLDAA of which LMS has a record, is a
delegation dated August, 1994 by the Hon. Mr. Mackenzie, the
Minister of Labour from June of 1990 to October of 1994. I
am advised by Ms. Hardman and I believe that the Hon. Ms. Coppen,
Minister of Labour from October of 1994 to June of 1995 and the
Hon. Mrs. Witmer, the Minister from June of 1995 to October of
1997, delegated their authority, but that Mr. Mackenzie and Ms.
Coppen had also personally exercised the authority to make
appointments of chairs of interest arbitration boards under HLDAA
from time to time.
[19]
At the relevant time, namely September 1997, the Minister had
delegated the power to Paul Gardner, the Director of LMS, and Mr.
Dean said in his affidavit that “…personally, I was not aware of
any plans to change it”, i.e. the practice of delegation.
In fact, Mr. Flaherty, who became Minister of Labour in October
1997, ended the delegation some months later.
[20]
I conclude that the appellants’ position respecting
delegation is substantially correct. Some Ministers delegated,
others did not. Of those who delegated, some did so in
writing, others less formally. The evidence leaves no doubt
that the practice of delegation of the power to appoint under s.
6(5) of the HLDAA was well established although not uniformly
followed.
d)
Interest of Government in Arbitrations
[21]
As the primary funder and regulator of hospitals and nursing
homes in Ontario, the government has a significant and direct
interest in the outcome of interest arbitration proceedings under
HLDAA. The vast bulk of total hospital revenue comes from the
government. Approximately 75% to 80% of hospital budgets
relate to labour costs and the government’s primary method for
controlling expenditures is wage control. Although nursing
homes have sources of income that are not available to hospitals,
they too are substantially dependent upon the government for
funding. To the extent that the Minister is a member of
Cabinet and thus of “the government”, the Minister has a
significant financial interest in HLDAA arbitrations.
e)
History of Bill 136
[22]
Bill 136, the Public Sector Transitions Stability Act,
1997, S.O. 1997, c. 21, was passed and proclaimed in force on
October 29, 1997. The proposal to create a Dispute Resolution
Commission was withdrawn and the Bill was otherwise substantially
altered before it was passed and proclaimed in force. There
is, however, much disagreement as to what was said or agreed to
before and after the Bill was passed.
[23]
The affidavit of Ms. Davis recites the details of the
campaign against Bill 136, the resistance of the government, the
increasing opposition and the eventual weakening and retreating of
the government. Her position is that the government said that
it would return to the status quo for the appointment of chairs to
interest arbitration boards. Ms. Davis relies in particular on
the statement of the Minister, then Elizabeth Witmer, to the House
on September 18, 1997 as announcing inter alia that the
government intended to "return to the status quo".
[24]
Mr. Dean’s position is that there was no commitment to
return to the status quo. He says that the meetings described
in some detail by Ms. Davis in her affidavit “were not
negotiations [respecting the content of Bill 136 or what would
replace it]. These were discussions for the purposes of
information sharing and consultations on possible amendments to Bill
136.” Parts of his affidavit are as follows:
8.
In response to questioning from the union representatives about
how appointments of chairs of interest arbitration boards would be
made under the Hospital Labour Disputes Arbitration Act
(“HLDAA”), the government representatives stated that Minister
would continue to have the legislative authority to make
appointments. We did indicate that there would be
legislative amendments with respect to the arbitration process
(the provisions regarding mediation-arbitration and Final Offer
Selection would remain in the Bill) and that there would be
certain criteria which arbitrators would be required to take into
account in making an award.
9.
Union representatives raised the concern that government would use
this longstanding legislative power [s. 6(5) of HLDAA] to create
the Dispute Resolution Commission through the back door, that is,
that the Minister would begin appointing chairs who could be
counted on to deliver the kinds of settlements the government
wanted. Union representatives asked if we would agree that
no changes would be made to “the list” without their
agreement.
10.
I and the other government representatives understood by this that
the union representatives believed there existed a list of
arbitrators maintained by the Ministry from which appointments of
chairs of interest arbitration boards were made for the purpose of
HLDAA. We replied, first, that no such list exists or had
existed. Second, we stated that we could make no commitment
with respect to future appointment practices. We stated that
under the legislation, the Minister appointed and would continue
to appoint fair, credible people.
….
15.
At the September meetings, there were discussions about the use of
the list or “pool” of grievance arbitrators recommended by
LMAC for the purposes of the Labour Relations Act. I
had already stated that there was no list for the purposes of
HLDAA, although some of those appointed for the purposes of HLDAA
were also on the list. I reminded the union representatives
that the amended legislation would require mediation-arbitration
unless the Minister chose another method, and that as the union
representatives had expressed some concern that there was very
little mediation expertise on the list, appointees who were not on
the list would be required. In response to further
questioning about the identity of the interest arbitrators, I
expressly stated that union representatives would see some
new faces whom they had not seen before. I indicated that my
personal best guess was that there would not be many such
people, but that union representatives should expect such
appointments. I also indicated that I believed the
appointees would be people who could do the job, and would be
considered broadly as being fair and impartial.
16.
In response to questioning about
whether union representatives would be consulted about any
appointments of arbitrators not on the list, I indicated that the
traditional lines of communication regarding the appointment
process for arbitrators would continue. Julie Davis asked
what the process was, and I stated that “when we appoint
arbitrators you don’t like, we hear about it”. I also
indicated that we hear about it when union representatives like an
appointment. Julie Davis said, “Oh, you mean I can call
Paul Gardner from time to time, as I have in the past”, and I
said yes. I further indicated that the lines of
communication were and would continue to be open.
17.
Union representatives expressed concern at the lack of any
assurances about how the appointments would be made. A
lengthy and heated discussion took place about this issue. I
recall the following exchange between Howard Goldblatt (speaking
for the union representatives) and John Lewis and me (speaking for
government representatives):
Q:
Will you seek our agreement before adding anyone to the pool?
A:
No.
Q:
Will you consult with us before adding someone to the pool?
A:
No.
Q:
Let’s determine the list of arbitrators right now.
A:
No.
18.
The only commitments made on behalf of government during these
meetings and the only ones which we were authorized to make were
reiterations of public commitments contained in the Minister’s
statement of September 18.
19.
At the September meetings, union representatives also pressed the
government representatives for a commitment that the delegated
authority to appoint chairs or interest arbitration boards for the
purpose of HLDAA would remain with Mr. Gardner, to whom the
appointment power was delegated at that time. I indicated
that personally, I was not aware of any plans to change
it. However, in the course of the discussions, I kept
returning to the point that the formal appointment authority
would remain with the Minister under the legislation.
(Emphasis added.)
[25]
I do not accept Ms. Davis’s interpretation of the
Minister’s statement to the House on September 18, 1997. The
relevant part of the statement, as printed says:
The
OFL said there is “no need or justification for the proposed
Dispute Resolution Commission”. Our amendments would
eliminate the DRC.
The
union movement has requested a return to the current legislative
provision governing the appointment of arbitrators. Our
amendments would do that.
In
substance, the Minister said that s. 6(5) of HLDAA would remain in
force, not that the government would maintain or return to
the status quo.
[26]
In December, Ms. Davis became aware of the appointment for an
arbitration of a person whom I assume was not on the roster.
This appointment provoked a letter dated January 7, 1998 from the
President of CUPE to the new Minister of Labour, Mr. Flaherty.
The letter says:
Dear
Minister:
During
the course of discussions with the Government concerning Bill 136,
representatives from the Ontario Federation of Labour, including
the Ontario Director for the Canadian Union of Public Employees,
were assured that their affiliated organizations, including
C.U.P.E., would be fully consulted prior to the addition of names
to any list from which persons may be appointed to conduct
interest arbitrations. We are distressed to find that this
has not been the case.
Accordingly,
we are writing to confirm that your Ministry will only select
persons to perform interest arbitrations or mediation/arbitrations
under HLDAA/Bill 136 from among the persons who are included in
the current list of arbitrators maintained by the Ministry of
Labour in respect of arbitrators who have been appointed to
conduct interest arbitrations in the past.
In
accordance with the assurances provided to us by your Government,
we reiterate that we expect to be fully consulted before
any names are placed on this list.
[27]
Ms. Davis does not say in her affidavit whether there was any
response. I presume there was none. Ms. Davis says that
CUPE did not pursue the matter because it was not a participant in
the arbitration in question.
[28]
The next relevant event was that the Minister wrote a letter
dated February 2, 1998 to Kenneth P. Swan, President of the Ontario
Labour Management Arbitrators Association. This letter was
written in reply to Mr. Swan’s letter of August 22, 1997 to Ms.
Witmer, the then Minister of Labour. Mr. Swan’s letter
extols the virtues of the existing system and criticizes the changes
proposed by Bill 136. The Minister’s response of February 2,
1998 reads as follows:
Dear
Mr. Swan:
I
am writing in response to your letter to my predecessor, the
Honourable Elizabeth Witmer, regarding the Public Sector
Transition Stability Act, 1997 (Bill 136) which was proclaimed
in force on October 29, 1997.
In
your letter, you raise concerns on behalf of your organization
regarding the neutrality of the Dispute Resolution Commission and
the fairness of the arbitration process proposed under the Act as
introduced.
I
agree that, for a compulsory arbitration system to function as
an adequate substitute for the right to strike, the parties must
perceive the system as neutral and credible. I believe
that we have achieved this goal.
In
the development of the Act, the government heard from a wide range
of stakeholders on these issues. In response to concerns
raised, reference to the Dispute Resolution Commission was deleted
from the Act. The police and hospital sectors will
continue under existing systems for appointment of arbitrators.
The fire services sector will now be covered by a process similar
to that contained in the Hospital Labour Disputes Arbitration
Act.
The
Act reforms compulsory interest arbitration processes to stress
negotiated solutions instead of arbitrated contracts, provide for
expedited time lines and alternate dispute resolution mechanisms,
and require arbitrators to consider criteria such as the
employer’s ability to pay, the economic situation in the
municipality and province, and the extent to which services may
have to be reduced if current funding and taxation levels remain
unchanged.
Thank
you very much for sharing your views and experience on this
matter. I would be pleased to meet with you in the near
future to discuss this and other issues of mutual
interest.(Emphasis added.)
f)
The Appointment of Retired Judges as Arbitrators
[29]
On February 20, 1998, without any consultation with the
appellants, the Minister personally appointed four retired judges,
who were not on the roster, to chair boards of interest arbitration
to resolve a number of collective bargaining disputes at Ontario
hospitals. On the same day, the Ministry of Labour
(“Ministry”) issued a background statement entitled “Interest
Arbitration in the Hospital Sector” which included the following
statement:
During
this period of significant restructuring in the broader public
sector…it is essential that parties to an arbitration have
complete confidence in the objectivity and neutrality of
arbitrators appointed by the Minister.
[30]
On March 10, 1998, Wayne Samuelson, the President of the
Ontario Federation of Labour, wrote to the Minister stating that the
appointment of the retired judges constituted a clear breach of the
understanding reached between labour and government during the
discussions concerning Bill 136, and was taken without even a
pretence of consultation.
[31]
After receiving communications from Mr. Samuelson, the four
judges withdrew, two on the basis that they would not proceed unless
acceptable to both sides. More appointments of retired judges
followed and in some cases arbitrations proceeded.
[32]
Discussions between the appellants and the government
continued but did not resolve the issues and this application was
then brought.
[33]
Under the transitional provisions of Bill 136 as enacted,
where a chair had already been appointed, but the interest
arbitration had not yet been completed, a party could reject the
chair and request that a new chair be appointed. Following the
passage of Bill 136, in every arbitration involving CUPE in which a
chair had been appointed, the employer requested a new appointment.
In all cases, the new appointment was a retired judge.
Further, since the Minister began appointing retired judges,
employers have advised CUPE that they are not prepared to accept
anyone on the roster and have refused to propose names of potential
chairs. Consequently, there have been no consensual
appointments of chairs in CUPE cases since at least February 1998.
g)
Professor Weiler's Evidence
[34]
Part of the material filed in support of the application is
an affidavit of Joseph Weiler. He has been a professor on the
Faculty of Law at the University of British Columbia since 1974.
Professor Weiler teaches labour law and labour policy. He has
acted as an arbitrator in both rights and interest arbitrations in
British Columbia and the Yukon. He has acted as a mediator,
conciliator and facilitator in labour management disputes and has
been a member of the National Academy of Arbitrators since 1983.
He is widely recognized as an authority in labour matters.
[35]
In an affidavit filed in these proceedings, Professor Weiler
comments that “government may be both the lawmaker and the
employer” and that “government may have a significant interest
in the outcome of a dispute given its position as both the primary
source of the [hospital] sector’s funding and its regulator”.
He goes on to note that “[t]hese multiple roles of
government may create a potential conflict of interest, and, as a
result, efforts have been made in public sector collective
bargaining law and practice to isolate these potentially conflicting
roles”. He then deals with the consequences of legislation
which prohibits strikes as follows:
9.
…Governments
routinely amend public labour law in order to avoid work stoppages
in essential services. As a substitute for the strike or
lockout weapons, the collective bargaining model, as modified for
the public sector, provides for the resolution of interest
disputes (when negotiations reach an impasse) by an independent,
impartial, single arbitrator (or chair of a tripartite arbitration
board). The independence and neutrality of the
arbitration board, as against the potential conflicts given the
government’s roles and interests as described above, is
generally preserved through the use of neutral third parties who
have proven to be mutually acceptable to unions and employers.
(Emphasis added.)
[36]
Thus Professor Weiler sees a trade-off of sorts: the loss of
the right to strike is made up for or balanced by the adoption of an
arbitration system using persons mutually acceptable to employer and
employee. LMAC meets the needs of such a system. The
independence and impartiality of arbitrators is guaranteed not by
their remoteness, security of tenure, financial security or
administrative security but by training, experience and mutual
acceptability.
[37]
Professor Weiler comments on the operation of the LMAC system
as follows:
18.
Joint administration of the interest arbitration process
used to break a bargaining impasse is therefore a key element in
its potential for success. The two parties must jointly
select their own “lawmaker”, i.e., the interest arbitrator who
will write their new collective agreement. This is achieved
in an important way by their joint input into the
composition of the roster of arbitrators and the selection of the
arbitrator from that list to adjudicate their dispute.
(Emphasis added.)
[38]
Professor Weiler also discusses the tendency of labour
dispute resolution in Canada to move away from the courts and judges
and toward both permanent and ad hoc boards. In paragraph 10
of his affidavit, he says:
10.
The reasons Canadian labour law has embraced the administrative
tribunal rather than the judicial/court approach to interpreting
and applying labour law was because the courts tend to be more
legalistic, formal, and time consuming in their operation than was
appropriate for industrial relations disputes. The court
process was felt to be more appropriate for “one off” legal
disputes between litigants rather than for the refereeing of
ongoing relationships between unions and management. In
contrast, the administrative tribunal approach to labour disputes
tended to utilize personnel who were experts in labour relations
(and not necessarily in law), who often had considerable
experience in using alternative dispute resolution techniques
(such as mediation and facilitation) and who were more comfortable
working in an informal, expeditious adjudication process that was
more amenable to the maintenance of the ongoing labour-management
relationship. This administrative, curative approach to
labour disputes allows the parties to participate to a greater
extent as “industrial citizens” in the application of labour
law to their workplace.
[39]
Professor Weiler goes on to say that while judges were used
as arbitrators in Canada in the 1950’s and 1960’s, such
appointments were rare by the 1980’s. He explains as
follows:
13.
An important reason why labour arbitrators are not drawn from the
judiciary is that, when courts were involved in adjudicating
labour law cases, judges often handled labour issues “consistent
with general jurisprudential concepts” that reflected judicial
training and experience. However, this approach may fail to
recognize the special needs and traditions of the industrial
community whose “industrial jurisprudence” is composed of
labour relations statutes, regulations, collective agreements and
the customs and values of the industrial relations community.
As recognized in the Alberta Reference case, per McIntyre
J., judges by their training and experience do not have the expert
knowledge that is expected to be routinely applied by seasoned
professional arbitrators. In contrast, many labour
arbitrators are drawn from labour relations boards or other
industrial relations professional contexts wherein they have been
exposed to the nuances of industrial relations and have developed
the necessary savvy to realize the implications of their decisions
in the real world of work. There are a variety of exposures to the
employment context that may or may not involve legal training or
legal practice. Nevertheless, valuable insights gained in
these contexts are very relevant to the performance of the role of
a labour relations neutral and, accordingly, they are recognized
by the parties in the work experience they consider relevant to
the role of the arbitrator. These are identified in the
“Criteria for the Recommendation of Candidates” jointly
drafted by labour and management through the LMAC, and attached as
Exhibit “B” to the Affidavit of Marcelle Goldenberg.
Notable in its absence from the list of relevant work experience
is sitting as a judge or practicing law other than labour law.
(Footnotes omitted.)
[40]
The reference to McIntyre J. is with respect to his statement
in Reference Re Public Service Employee Relations Act, Labour
Relations Act and Police Officers Collective
Bargaining Act, [1987] 1 S.C.R. 313 at pp. 416 and 417 as
follows:
Our
experience with labour relations has shown that the courts, as a
general rule, are not the best arbiters of disputes which arise
from time to time. Labour legislation has recognized this
fact and has created other procedures and other tribunals for the
more expeditious and efficient settlement of labour problems.
Problems arising in labour matters frequently involve more than
legal questions. Political, social and economic questions
frequently dominate in labour disputes. The legislative
creation of conciliation officers, conciliation boards, labour
relations boards and labour dispute-resolving tribunals, has gone
far in meeting needs not attainable in the court system. The
nature of labour disputes and grievances and the other problems
arising in labour matters dictates that special procedures outside
the ordinary court system must be employed in their resolution.
Judges do not have the expert knowledge always helpful and
sometimes necessary in the resolution of labour problems… In my
view, it is scarcely contested that specialized labour tribunals
are better suited than courts for resolving labour problems,
except for the resolution of purely legal questions.
[41]
This view is supported inferentially by the fact that until
very recently, lawyers and judges in Canada were not generally
trained in negotiation, mediation or arbitration. Only in the last
ten years has instruction in alternate dispute resolution become a
necessity amongst lawyers and judges across Canada.
[42]
Professor Weiler’s view of the appointment of judges or
retired judges as arbitrators in labour arbitrations is, to say the
least, negative. In his affidavit he says that:
23.
It is widely known that the labour movement in Canada has had a
negative view of the treatment it has been accorded by the
judiciary over the past century. This traditional concern on
the part of labour and the reasons for it are well documented, and
have been identified by both academics and the judiciary itself.
(Footnotes omitted.)
….
25.
The appointment by the Minister of former judges to serve as
interest arbitrators in hospital disputes has, not surprisingly,
led to adverse reaction by unions who are expected to participate
in these hearings and abide by the results. This reaction is
not due to the merits of any individual former judge but rather to
retired judges as a class or group, given the view and experience
of unions concerning the role of the judiciary in labour
relations. These retired judges do not have tenure as
arbitrators and therefore do not have the kind of independence
from government that they previously enjoyed when they served on
the bench. They also have no expertise in industrial
relations. Certainly they lack the deep and wide experience
possessed by arbitrators familiar with the industrial relations
community of Ontario.
….
29.
In view of the traditional attitude of unions with respect to how
well they have fared in the courts in labour cases, it is
understandable that labour would be very concerned, and other
observers would be mystified, that this particular occupational
group of retired judges has now been appointed by the Minister to
adjudicate interest disputes and thereby make “private” law
for the labour relations parties, particularly when experienced
expert arbitrators are readily available. This is especially
cause for concern for labour because what is involved here is
interest arbitration wherein the arbitrator will be writing the
new collective agreement for the parties and not (as in the case
of grievance (rights) arbitration) merely interpreting and
applying the existing collective agreement between the parties.
The discretion afforded the arbitrator in interest arbitration as
contrasted with rights arbitration is fundamentally different.
Accordingly, there is even greater need for the parties to an
interest arbitration to have confidence that the adjudicator is
qualified, impartial and independent.
30.
Moreover, in view of the fact that it is contemplated that
Ministerial appointees may also be involved in
mediation-arbitration, the use of former judges is even more
problematic given the general lack of experience of the courts
with mediation techniques and other alternative dispute resolution
methods. Mediation skills are quite different from
arbitration skills. The process of mediation often involves
private caucusing wherein the particular parties are expected to
provide the mediator with confidential information about their
bargaining position or strategy. This seems unlikely to
occur if the parties lack confidence in the identity of the
neutral who is appointed to the case. As such, mediation
will not likely succeed in reaching voluntary settlements.
….
31.
…However, if one side has serious concerns about the
independence, impartiality or competence of the mediator assigned
to the case, then the mediator can be an obstacle to innovation in
workplace arrangements rather than a catalyst that will unleash
the creative problem-solving capabilities of the parties to make
changes that are in their mutual self-interest.
[43]
Professor Weiler’s views are supported by a Report on a
Study and Information Mission to Canada (Geneva: International
Labour Office, 1985). This report was written by Sir John Wood
C.B.E., L.L.M. as a representative of the Director-General of the
International Labour Office in 1985. Paragraph 156 of the
Report reads as follows:
The
independence of arbitration is of paramount importance. It
is the feature of the system in the public sector which seeks to
balance the non-existence of the right to strike. That
equation is one which not all those giving evidence accept as fair
or proper but that question does not arise at this time.
What is important is that where that system operates,
arbitration must be independent. Confidence in
arbitration is easily destroyed so everything must be done to
ensure that doubts as to independence should be assuaged. It
is not a question of testing or challenging their validity.
It is essential to see whether steps can be properly taken to
strengthen independence. One significant point put concerns
the appointment of arbitrators. If at all possible, this
should be done by a body independent of Government, a Labour
Relations Board, a court and so on, depending on the particular
structure. It is a matter that would require serious
consideration by the provincial authorities. (Emphasis
added.)
[44]
Further support is found in Freedom of Association, Digest of
decisions and principles of the Freedom of Association Committee of
the Governing Body of the International Labour Office (Geneva:
International Labour Office, 1996). It says:
Compensatory
guarantees in the event of the prohibition of strikes in the
public service or in essential services
547.
As regards the nature of appropriate guarantees in cases where
restrictions are placed on the right to strike in essential
services and the public service, restrictions on the right to
strike should be accompanied by adequate, impartial and speedy
conciliation and arbitration proceedings in which the parties
concerned can take part at every stage and in which the
awards, once made, are fully and promptly implemented.
….
549.
In mediation and arbitration proceedings it is essential that all
the members of the bodies entrusted with such functions should not
only be strictly impartial but, if the confidence of both sides,
on which the successful outcome even of compulsory arbitration
really depends, is to be gained and maintained, they should also appear
to be impartial both to the employers and to the workers
concerned. (Emphasis added.)
I
understand “at every stage” as including the stage of choosing
an arbitrator.
[45]
What I take, and accept, from the foregoing is that in a
situation where strikes and lock outs are prohibited and where the
employer has substantial interest in the results of arbitrations,
one process that works is to choose arbitrators who are mutually
acceptable. In Canada, such arbitrators are unlikely to be
judges. In the event judges are unilaterally appointed as
arbitrators by the employer, the judges would not be regarded by
unions as either impartial or independent. As Professor Weiler
stated above, the problem is not with respect to any particular
judge or judges. It is with respect to all judges as a
class. There would, of course, be exceptions, such as Chief
Justice Alan Gold and former Justice George Adams.
[46]
Mr. Dean’s affidavit purported to justify the need for new
and different arbitrators on the grounds of ability to maintain
“time-lines” and the need for skill and experience in
mediation-arbitration and last-offer arbitration, both of which were
new to HLDAA. No evidence was drawn to the attention of the
court to show that retired judges were better qualified than roster
members in these respects.
THE
APPLICATION
[47]
The grounds relied on for the application are as follows:
(a)
the Minister’s appointment of the non-roster appointees undermines
the impartiality and independence of the appointment and
decision-making process under HLDAA;
(b)
the Minister’s appointment of the non-roster appointees to act as
chairs of boards of interest arbitration under HLDAA breaches
representations and an agreement made by representatives of the
Minister on his behalf with respect to the appointment process under
HLDAA and, in particular, of an agreement that appointments under
HLDAA would be made in accordance with established practice and from
the Ministry of Labour’s roster of trained and experienced labour
relations arbitrators;
(c)
the Minister’s failure or refusal to make appointments under HLDAA
in accordance with the agreement interferes with the legitimate
expectations of the affected unions; and,
(d)
the Minister’s failure or refusal to delegate his appointment
functions to a member of the civil service in accordance with his
Ministry’s long-established practice breaches the agreement with
the affected unions, gives rise to a reasonable apprehension of bias
and interferes with the independence and impartiality of the boards
of arbitration established under HLDAA.
THE
DIVISIONAL COURT
[48]
The application was dismissed by the Divisional Court.
The reasons of Southey J. speaking on behalf of that court read in
part as follows:
The
applicants do not claim a breach of any rights under the Charter.
That being so, actions of the Minister, if authorized by statute,
cannot be successfully attacked as being a denial of natural
justice or lacking in institutional independence or impartiality.
In making that statement I rely on the decision of the Court of
Appeal in Re W. D. Latimer Co. Ltd. and Bray (1974), 6 O.R.
(2d) 129.
The
applicants in the Latimer case sought to restrain a panel
of the Ontario Securities Commission from continuing a hearing on
the ground of bias because the panel had received information
about the case as a result of the investigation by the Commission
before the hearing. The applicant relied on the maxim “no
man shall be judge of his own cause”. Dubin J.A.,
delivering the judgment of the Court, said at p. 137:
I
am satisfied that the actions of the Minister in appointing retired
judges as chairman of interest arbitration boards fell squarely
within the authority given to him in s. 6(3) of the HLDAA. It
is not open to the Court in those circumstances to apply the common
law doctrines on which the applicants rely to negate the statutory
authority of the Minister.
ISSUES
[49]
The issues on this appeal are: Did the Divisional Court err
in its conclusion that absent “a breach of any rights under the
Charter…actions of the Minister, if authorized by statute, cannot
be successfully attacked as being a denial of natural justice or
lacking in institutional independence or impartiality”; and, if
the Divisional Court did err, has there been a denial of natural
justice?
a)
Did the Divisional Court Err in its Conclusion?
[50]
I disagree with the reasoning of the Divisional Court.
The Divisional Court relied on Latimer, supra, and Brosseau,
supra, but both cases are distinguishable on their facts from
the instant case. Both held that where there is a conflict
between the provisions of the relevant statute and the rules of
natural justice, the statute must govern. That is not the
issue now before the court. There is no suggestion of
conflict. In the instant case the issue is whether the
decision of the Minister was made in accordance with the rules of
natural justice.
[51]
Section 6(5) of HLDAA confers upon the Minister a
discretionary power. That the exercise of discretionary power
by a Minister is reviewable by the court was affirmed in Roncarelli
v. Duplessis, [1959] S.C.R. 121. The Supreme Court of
Canada held that the decision of the Prime Minister and Attorney
General of Québec, as carried out through the agency of the Liquor
Commission, had no legal force or effect. Rand J. stated at p.
140 that:
A
decision to deny or cancel such a privilege [a liquor license] lies
within the “discretion” of the Commission; but that means
that decision is to be based upon a weighing of considerations
pertinent to the object of the administration.
“Discretion”
necessarily implies good faith in discharging public duty; there is
always a perspective within which a statute is intended to operate;
and any clear departure from its lines or objects is just as
objectionable as fraud or corruption.(Emphasis added.)
[52]
The same proposition was restated from an administrative
point of view in Re Multi-Malls Inc. et al. v. Minister of
Transportation and Communications et al. (1976), 14 O.R. (2nd)
49 (C.A.). The issue was whether the Minister refused to issue
a permit for access to a highway for reasons not relevant to the
purposes or objectives of the Public Transportation and Highway
Improvement Act, R.S.O. 1970, c. 349. The court set aside
the Minister’s refusal of the permit and the matter was referred
back to the Minister to reconsider on proper principles. In
reaching this conclusion, Lacourcière J.A., speaking for this
court, said at p. 57:
We
are asked to draw the inference that the Legislature wished it to
remain clear that the discretion as to cancellation was to remain
unfettered; but the discretion is always subject to the
requirements of natural justice and to “the control which the
judiciary have over the executive, namely that in exercising their
powers the latter must act lawfully and that is a matter to be
determined by looking at the Act and its scope and object in
conferring a discretion upon the Minister…”, per Lord
Upjohn in Padfield et al. v. Minister of Agriculture, Fisheries
& Food et al., [1968] A.C. 997 at p. 1060. (Emphasis
added.)
[53]
In Baker v. Canada (Minister of Citizenship and
Immigration), [1999] 2 S.C.R. 817, the Supreme Court of Canada
recently reaffirmed these principles and in addition expanded the
scope of judicial review by requiring that statutory discretion be
exercised in a manner consistent with the principles of the Charter.
At pp. 853 and 854 L’Heureux-Dubé J. speaking for the court said:
Administrative
law has traditionally approached the review of decisions classified
as discretionary separately from those seen as involving the
interpretation of rules of law. The rule has been that
decisions classified as discretionary may only be reviewed on
limited grounds such as the bad faith of decision-makers, the
exercise of discretion for an improper purpose, and the use of
irrelevant considerations: see, for example, Maple Lodge Farms
Ltd. v. Government of Canada, [1982] 2 S.C.R. 2 at pp. 7-8, 137
D.L.R. (3d) 558; Shell Canada Products Ltd. v. Vancouver (City),
[1994] 1 S.C.R. 231, 110 D.L.R. (4th) 1. A general
doctrine of “unreasonableness” has also sometimes been applied
to discretionary decisions: Associated Provincial Picture Houses,
Ltd. v. Wednesbury Corp., [1948] 1 K.B. 223 (C.A.). In my
opinion, these doctrines incorporate two central ideas – that
discretionary decisions, like all other administrative decisions,
must be made within the bounds of the jurisdiction conferred by the
statute, but that considerable deference will be given to
decision-makers by courts in reviewing the exercise of that
discretion and determining the scope of the decision-maker’s
jurisdiction. These doctrines recognize that it is the
intention of a legislature, when using statutory language that
confers broad choices on administrative agencies, that courts should
not lightly interfere with such decisions, and should give
considerable respect to decision-makers when reviewing the manner in
which discretion was exercised. However, discretion must still
be exercised in a manner that is within a reasonable interpretation
of the margin of manouevre contemplated by the legislature, in
accordance with the principles of the rule of law (Roncarelli v.
Duplessis [citation omitted], in line with general principles of
administrative law governing the exercise of discretion, and
consistent with the Canadian Charter of Rights and Freedoms (Slaight
Communications Inc. v. Davidson, [1989] 1 S.C.R. 1038, 59 D.L.R.
(4th) 416).
[54]
Having established the power and duty of the court to review
the exercise of discretion by the Minister, I will now deal with the
substance of the complaint, which is that the appellants have been
denied natural justice. The Divisional Court did not deal with this
because of the conclusion the court reached as discussed above.
b)
Has there been a Denial of Natural Justice?
[55]
The appellants claimed that natural justice was denied to
them in two ways. First because the Minister interfered with
the impartiality and independence of boards of arbitration and
raised a reasonable apprehension of bias and second because the
appellants’ legitimate expectations were not met.
i) Independent and Impartial Tribunals and Reasonable
Apprehension of Bias
[56]
Persons involved in litigation before the courts are entitled
to have their claims dealt with by judges who are independent and
impartial. The same is true, in general terms, of parties
before administrative tribunals. Like courts, administrative
tribunals are bound to observe the principles of natural justice.
In Matsqui Indian Band et al. v. Canadian Pacific Ltd.,
[1995] 1 S.C.R. 3, Lamer C.J.C. at p. 49 put it as follows:
I
agree and conclude that it is a principle of natural justice that a
party should receive a hearing before a tribunal which is not only
independent, but also appears independent. Where a party has a
reasonable apprehension of bias, it should not be required to submit
to the tribunal giving rise to this apprehension. Moreover,
the principles for judicial independence outlined in Valente are
applicable in the case of an administrative tribunal, where the
tribunal is functioning as an adjudicative body settling disputes
and determining the rights of parties.
[57]
The principles of judicial independence were outlined by
LeDain J. in Valente v. The Queen, [1985] 2 S.C.R. 673.
LeDain J. quoted at p. 688, with approval, the following statement
by Sir Guy Green, Chief Justice of Tasmania in “The Rationale and
Some Aspects of Judicial Independence” (1985), 59 A.L.J. 135 at p.
135:
I
thus define judicial independence as the capacity of the courts to
perform their constitutional function free from actual or apparent
interference by, and to the extent that it is constitutionally
possible, free from actual or apparent dependence upon, any persons
or institutions, including, in particular, the executive arm of
government, over which they do not exercise direct control.
[58]
It is important to note that Sir Guy Green includes both
“actual or apparent interference” as compromising judicial
independence. The concern in the present case is with
“apparent” matters. LeDain J. went on p. 689 as follows:
Although
judicial independence is a status or relationship resting on
objective conditions or guarantees, as well as a state of mind or
attitude in the actual exercise of judicial functions, it is sound,
I think, that the test for independence for purposes of s. 11(d) of
the Charter should be, as for impartiality, whether the tribunal may
be reasonably perceived as independent. Both
independence and impartiality are fundamental not only to the
capacity to do justice in a particular case but also to individual
and public confidence in the administration of justice.
Without that confidence the system cannot command the respect and
acceptance that are essential to its effective operation. It
is, therefore, important that a tribunal should be perceived as
independent, as well as impartial, and that the test for
independence should include that perception. The perception
must, however, as I have suggested, be a perception of whether the
tribunal enjoys the essential objective conditions or guarantees of
judicial independence, and not a perception of how it will in fact
act, regardless of whether it enjoys such conditions or guarantees.
(Emphasis added.)
[59]
The importance of the perception of independence and
impartiality is clear from the frequent references to it in
subsequent jurisprudence. See for instance: A.G. of Québec
(Régie des permis d'alcool) v. 2747-3174 Québec Inc.,
[1996] 3 S.C.R. 919 per Gonthier J. at p. 951 para. 43 and pp. 951
and 952 para. 45; Reference re: Public Sector Pay Reduction
Act (P.E.I.), [1997] 3 S.C.R. 3 per Lamer C.J.C. at pp. 78 and
79 paras 111 and 112; Matsqui, supra, per Lamer C.J.C. at p.
42 para 63 and p. 49 para 80.
[60]
Reference re: Public Sector Pay
Reduction Act (P.E.I.), supra, deals
with the question of whose perception counts. It is that of
the “reasonable and informed person” according to Lamer C.J.C.
at p. 79. If there is a “reasonable apprehension of bias”
to this person, the tribunal is not perceived as independent and
impartial. In Matsqui, supra, at p. 50, para. 81, Lamer
C.J.C. said:
The
classic test for a reasonable apprehension of bias is that stated by
de Grandpré J. in Committee for Justice and Liberty v. Canada
(National Energy Board), [1978] 1 S.C.R. 369 at p. 394:
….
the apprehension of bias must be a reasonable one, held by
reasonable and right-minded persons, applying themselves to the
question and obtaining thereon the required information. In
the words of the Court of Appeal that test is “what would an
informed person, viewing the matter realistically and practically
– and having thought the matter through – conclude. Would
he think that it is more likely than not that Mr. Crowe, whether
consciously or unconsciously, would not decide fairly.”
De
Grandpré J. further held that the grounds for the apprehension must
be “substantial”.
[61]
R. v. Généreux,
[1992] 1 S.C.R. 259 involved a court martial. The central
question was “whether the tribunal, from the objective standpoint
of a reasonable and informed person, will be perceived as enjoying
the essential conditions of independence” per Lamer C.J.C. at p.
287. He approached this question using security of tenure,
financial independence and institutional independence as the
essential conditions that had to be present. Speaking for
himself and three others, Lamer C.J.C. found the tribunal wanting in
all three respects and accordingly ordered a new hearing. In
dealing with the question of institutional independence he said at
p. 309:
Secondly,
the appointment of the judge advocate by the Judge Advocate General
(s. 111.22 Q. R. & O.), undermines the institutional
independence of the General Court Martial. The close ties
between the Judge Advocate General, who is appointed by the Governor
in Council, and the executive, are obvious. To comply with s.
11(d) of the Charter, the appointment of a military judge to sit as
judge advocate at a particular General Court Martial should be in
the hands of an independent and impartial judicial officer.
The effective appointment of the judge advocate by the executive
could, in objective terms, raise a reasonable apprehension as to the
independence and impartiality of the tribunal. (Emphasis
added.)
[62]
Stevenson J., La Forest and McLachlin JJ. concurring, agreed
that there must be a new trial but for reasons differing from those
of Lamer C.J.C. Stevenson J. found that independence from the
“executive” was impractical in the military establishment but
that institutional independence within the court martial system was
attainable. He described it thus at pp. 318 and 319:
Given
an ad hoc military tribunal, composed of military personnel,
operating within a military hierarchy, what institutional
independence should the Charter ensure?
The
tribunal must be free to make its decisions on the merits.
Given
that the members of the tribunal are necessarily operating within
the military service, that means to me that no one who has an
interest in seeing that the prosecution succeeds or fails should be
in a position of influence.
Clearly,
the accused and the “complainants” have that interest.
That interest would, in my view, extend to the prosecutor and
military personnel engaged in the investigation or in formulating or
approving the charges.
I
suggest that there must be found some point within the military
hierarchy where the officer or official has no real or apparent
concern about the outcome. There is, at that point, sufficient
independence. I leave aside cases in which it can be shown to
the contrary because the Charter provisions would clearly apply in
such a case. In my view, the convening authority is
sufficiently far removed from the investigative and complaint stages
to convene the court martial and appoint its members.
I
am concerned that the convening authority also appoints the
prosecutor. This is done with the concurrence of the Judge
Advocate General. With the scheme in force when this matter
was tried, the judge advocate also was appointed by the Judge
Advocate General.
I
agree with the Chief Justice that the convergence of
responsibilities in appointing the prosecutor and judge advocate is
objectionable as it fails to meet the requirement that those
appointing the tribunal have no apparent concern in the outcome.
In
saying this, I do not do so on the basis that the Judge Advocate
General and the convening authority are all part of the executive,
but that there is at least an appearance that those
responsible for choosing the tribunal, namely the convening
authority and the Judge Advocate General, have an interest in the
nomination of the prosecutor and, in effect, in a successful
prosecution. (Emphasis added.)
Again,
the appearance of independence was required.
[63]
Matsqui, supra,
also involved the tribunal being appointed by an interested party.
The case involved appeals from tax assessments of real estate within
reserves. The particular issue was whether or not lands
granted to Canadian Pacific by the Crown were, by definition,
excluded from lands “within a reserve”. Canadian Pacific
lost at the tribunal level, so applied to the Federal Court –
Trial Division for judicial review. Canadian Pacific argued
that the provisions permitting band members to sit on the assessment
appeal tribunal raised a reasonable apprehension of bias. Joyal J.
struck out the application on the ground that the issues raised
could be litigated within the assessment appeal structure itself.
Joyal J. did not deal with reasonable apprehension of bias. An
appeal to the Federal Court of Appeal was allowed.
[64]
The band appealed to the Supreme Court of Canada. In
that court, Canadian Pacific argued that the assessment appeal
procedures were not an adequate alternative to judicial review
because the appeal tribunals themselves gave rise to a reasonable
apprehension of bias. Two sources of bias were alleged:
(1)
Members of the bands may be appointed to the appeal tribunals.
All members of the band are tax exempt yet enjoy the benefits of
taxes spent on the reserve. Therefore a band member on the
tribunal would have a direct and personal interest in determining
the highest possible assessments to ensure the greatest tax revenue;
(2)
Non-Indian members will be concerned about rendering decisions
adverse to the interests of the band and its members which could
affect them as follows:
(a)
they “may” but not “shall” be paid remuneration for their
services;
(b)
they enjoy no tenure of office and may not be appointed to sit on
future assessment appeals.
[65]
Lamer C.J.C. began by noting that although s. 11(d) of the Charter
did not apply, Charter principles developed by the Supreme
Court of Canada were applicable in dealing with issues of
independence and impartiality. At p. 41 he said:
As
a preliminary comment, I would note that s. 11(d) of the Canadian
Charter of Rights and Freedoms guarantees to everyone charged
with an offence a hearing before an independent and impartial
tribunal. Of course, this case does not involve someone
“charged with an offence”, so s. 11(d) does not apply directly.
However, in interpreting s. 11(d), this court has developed
important principles on the correct approach which should be taken
to issues of bias, and particularly the issues of independence and
impartiality.
[66]
He then went on to deal with the issue before him which
involved the appointment of band members to the tribunals which
would hear appeals respecting the assessment for taxes of lands
within the reserves of those same members. At p. 42, he said:
When
the respondents allege an apprehension of bias on the basis of band
members sitting on the appeal tribunals, they question the appearance
of impartiality of these members. When they point to the
lack of security of tenure of tribunal members, and the uncertainty
as to whether they will receive remuneration, the respondents are
questioning the appearance of independence of these members.
For this reason, I will deal with the two allegations under the
headings of “impartiality” and “independence”. I would
emphasize that the respondents are not alleging actual bias.
Instead, they are alleging a reasonable apprehension flowing
from the institutional structure of the tax assessment appeal
tribunals. As was noted in Valente, supra, judicial
independence involves both the individual independence of members of
the judiciary, and the institutional independence of the court or
tribunal (p.687). It is the latter which the respondents are
questioning here.
Similarly,
it is institutional impartiality and institutional independence
which are of concern in the instant case.
[67]
After an exhaustive analysis, Lamer C.J.C. concluded that
there was a reasonable apprehension of bias. He said at p. 58:
In
my view, even a flexible application of the Valente
principles leads to the inevitable conclusion that a reasonable and
right-minded person, viewing the whole procedure in the assessment
by-laws, would have a reasonable apprehension that members of the
appeal tribunals are not sufficiently independent. Three
factors lead me to this conclusion:
(1)
There is a complete absence of financial security for members of the
tribunals.
(2)
Security of tenure is either completely absent (in the case of Siska),
or ambiguous and therefore inadequate (in the case of Matsqui).
(3)
The tribunals, whose members are appointed by the band chiefs and
councils, are being asked to adjudicate a dispute pitting the
interests of the bands against outside interests (i.e., those
of the respondents). Effectively, the tribunal members must
determine the interests of the very people, the bands, to whom they
owe their appointments.
In
reaching this conclusion, I wish to emphasize that it is these three
factors in combination which lead me to the conclusion that the
appeal tribunals lack sufficient independence in this case. I
am not saying that any one of these factors, considered in
isolation, would have led me to the same conclusion.
[68]
Cory J. concurred with Lamer C.J.C on the issue of
institutional independence. Major J., McLachlin J. concurring
and La Forest J. agreed with Lamer C.J.C. and Cory J. that the
appeal should be dismissed but for reasons which did not deal with
the question of bias. Sopinka J., L’Heureux-Dubé, Gonthier
and Iacobucci JJ. concurring would have allowed the appeal and
reinstated the order of Joyal J. dismissing the application for
judicial review. Sopinka J. did not disagree with the reasons
of Lamer C.J.C. dealing with independence. Sopinka J.,
however, would have deferred the application of the reasonable
person test until after the fact so that the reasonable person would
have the benefit of seeing how the tribunal worked in actual
practice before deciding whether or not there was impartiality and
independence.
[69]
The appellants claim that the circumstances in the present
case have raised a reasonable apprehension of bias. They claim
that the appointment of retired judges has given rise to a
reasonable apprehension of bias because both impartiality and
independence have been compromised. From the foregoing, it is
clear that impartiality and independence are different
considerations and that each has both a personal and an
institutional aspect. The present concern is with the
institutional aspects of both impartiality and independence.
ii) Legitimate Expectations
[70]
The appellants also claim that natural justice has been
denied to them because the Minister’s failure or refusal to make
appointments under HLDAA in accordance with the agreement interferes
with the legitimate expectations of the affected unions.
[71]
The law respecting legitimate or reasonable expectations is
in an early stage of development. According to Reference re
Canada Assistance Plan (B.C.), [1991] 2 S.C.R. 525, it is
part of the rules of procedural fairness and does not create
substantive rights nor does it apply to a body exercising purely
legislative functions. In Baker, supra, L'Heureux Dubé
J. says that the doctrine of legitimate expectation:
…as
applied in Canada, is based on the principle that the
"circumstances" affecting procedural fairness take into
account the promises or regular practices of administrative
decision-makers, and that it will generally be unfair for them to
act in contravention of representations as to procedure, or to
backtrack on substantive promises without according significant
procedural rights (at p. 840).
In
Council of Civil Service Unions and others v. Minister for the
Civil Service, [1984] 3 All E.R. 935 (H.L.), the termination of
a long-standing right to belong to a trade union without
consultation would have been subject to judicial review but for an
over-reaching concern for national security.
ANALYSIS
[72]
On its face, it is difficult, at least for another judge to
see how the appointment of retired judges raises any concern about
the appearance of their independence or impartiality as arbitrators.
Judges, retired or otherwise, are supposed to be independent and
impartial by definition.
[73]
In the instant case we are not faced with a single act as in Roncarelli,
supra, (the cancellation of a liquor license) or in Multi-Malls,
supra, (the refusal of a highway access permit) but with a
series of events beginning with the introduction of Bill 136 and
culminating in the rejection of arbitrators from the roster and the
appointment of retired judges in their place. The appellants'
claims respecting bias, independence, impartiality and legitimate
expectations must be assessed in the specific context in which they
are raised.
[74]
That context includes the nature of the disputes which are
the subject matter of the process in issue, the pre-existing system,
the nature of the change to the system and the manner in which the
change was made.
a)
The Nature of the Disputes
[75]
In dealing with the nature of the disputes that are the
subject matter of the process in issue, the first concern is the
fact that the issues to be decided are the content of the collective
agreements between the union and the individual hospitals.
These are not matters of interpretation but rather fundamental
matters determining the working conditions of union members.
As such they are of vital concern to those members. Such
matters are not essentially legal but practical and require the
familiarity and expertise of a labour arbitrator rather than the
skills of a lawyer or a judge.
[76]
It is also material that these disputes are being arbitrated
not by choice but rather because the right to strike to resolve them
has been taken away by legislation.
[77]
Relevant as well is the fact that by virtue of its funding of
hospitals and other institutions covered by HLDAA, the government of
Ontario, which took away the right to strike, has a substantial
financial interest in the outcome of these arbitrations.
b)
The Pre-existing System
[78]
Another part of the context which must be considered is the
pre-existing system. The situation before February 20, 1998,
how long it had existed, how it came about, how well it worked,
whether it was successful and if so the reason for its success are
all important factors in the contextual analysis.
[79]
As stated earlier, the pre-existing system dated back to
about 1979. The system of choosing an arbitrator by mutual
acceptance had evolved over the years and was recognized by the
statutory amendments made in 1979. The system appears to have
worked reasonably well at reconciling the fact that the right to
strike had been replaced by mandatory arbitration with the fact that
the right to appoint the chair of the arbitration was in the hands
of an entity which was not directly a party to the arbitration but
which had a very substantial interest in it. Having worked as
well as it did for almost twenty years, the arrangement must be
regarded as having been successful.
c)
Nature of the Change
[80]
Insofar as the nature of the change is concerned, from one
perspective the change complained of has not been great. No
statutory amendment was required. No Dispute Resolution
Committee has been appointed. Only one element has been
altered, namely, the source of appointees. However, from the
perspective of the appellants, the pre-existing system changed in
four fundamental and crucial ways.
[81]
First, the appointees no longer come from a group of
individuals in whom, by reason of experience and expertise, the
appellants had confidence and trust.
[82]
Second, the appellants have been removed from the appointment
process. Those who chair interest arbitrations no longer come
from a list which is mutually agreeable to all participants.
The removal of this element of mutuality diminishes the
appellants’ role as “industrial citizens” and standing alone,
impairs the independence and impartiality of those selected without
any input from the appellants.
[83]
The third change flows from the identity of those who have
replaced the list of mutually agreeable candidates. If the new
appointees were unknown quantities, there would still be a loss of
mutuality. The new appointees are however not unknown
quantities. From the perspective of the appellants they are
worse; they are a negative force or influence in whom the appellants
could be expected to have less confidence and trust than in unknown
quantities.
[84]
Finally, the change is effected by the Minister himself and
not by a delegate whose actions might be more acceptable to the
appellants. The Minister alone appoints the chairpersons.
Any prospective appointee need look only to the Minister for
appointment.
d)
The Manner in Which the Change was Made
[85]
Before the introduction of Bill 136, the problems inherent in
the exercise of the power conferred by s. 6(5) of HLDAA were
resolved by appointing people from the roster. This
“pre-approval” of arbitrators was threatened by the introduction
of Bill 136. Bill 136 was proposed to replace the whole system
of arbitrations respecting the contents of collective agreements
with a Dispute Resolution Committee. This was unknown
territory and labour reacted by objecting to it. This should
have been anticipated. The prohibition of strikes works
powerfully against labour and the establishment of LMAC and the
system of pre-approval of interest arbitrators balanced the
relationship between employer and employees. In the
circumstances, any change proposed by the government would have been
suspect.
[86]
As a consequence every action or inaction, every statement or
non-statement was seized upon as evidence of the Minister’s
intention to depart from, stay with or return to the existing or
former system.
[87]
The manner in which the change was made requires a more
detailed review of what was said on behalf of the government during
the discussion about Bill 136. Four matters in particular are
important: the Minister's statement of September 18, 1997; the lack
of response to the President of CUPE’s letter of January 7, 1998;
the Minister's letter of February 2, 1998; and, the language of Mr.
Dean's affidavit. These matters require consideration
individually and together.
[88]
In the Minister's statement of September 18, 1997 she said
the following:
·
The OFL said there is “no need or
justification for the proposed Dispute Resolution Commission”.
Our amendments would eliminate the DRC.
·
The union movement has requested a
return to the current legislative provision governing the
appointment of arbitrators. Our amendments would do that.
·
Mr. Speaker, it is with a sense of
pride that I report on the outcome of our discussion on Bill 136.
Our proposed amendments address completely the unions’ concerns
about Bill 136, without adversely affecting employers and without
sacrificing and compromising a single one of our objectives.
[89]
The appellants say that the statement that “the union
movement has requested a return to the current legislative provision
governing the appointment of arbitrators. Our amendments would
do that” is true but misleading. What was requested was a
return to the former system, including not only s. 6(5) of HLDAA but
the practice of selecting arbitrators from the roster. The
proposed “amendments” referred to towards the end of the
statement did not address completely the union's concerns about Bill
136. The amendments did not deal with restoration of the
former practice. The appellants say that the impression that
they got was that the government was returning to the former system,
including the former source of arbitrators. I agree with the
appellants who understood this as an indication that the Minister
intended to return to the status quo.
[90]
The letter of January 7, 1998 from the President of CUPE to
the Minister was set out earlier in these reasons. This letter
asked for confirmation of labour’s understanding that appointees
would be from the roster, failing which labour would be consulted.
There was no response to it. Had the government not intended
to return to the former system, it would have been more candid had
the government replied and said so. The appellants argue that
not replying fed the appellants belief that the Minister was
returning to the old system. I agree. The failure to respond
contributed to the appellants’ understanding that no change had
been or would be made.
[91]
The Minister’s letter of February 2, 1998 bolsters and
confirms that understanding. The appellants rely on two matters of
significance in the Minister's letter of February 2, 1998. The
first is the statement that “for a compulsory arbitration system
to function as an adequate substitute for the right to strike, the
parties must perceive the system as neutral and credible”.
This is entirely consistent with the appellants' position and would
tend to lead the appellants to believe that the Minister had
returned or was returning to the old system.
[92]
The second matter of significance is the statement that
“the police and hospital sectors will continue under existing
systems for appointment of arbitrators”. The appellants say
that this statement confirmed their understanding that the Minister
had undertaken to return to the former system for the choosing of
chairpersons for interest arbitrations. Unlike the Minister's
statement of September 18, 1997 this letter does not limit itself to
the legislation alone. The use of the expression “existing
systems” was reasonably understood as referring to the practice of
choosing chairpersons for interest arbitrations from the roster.
It is difficult to see how “existing systems” could mean
anything else. The Minister clearly stated that the government was
continuing the existing system of appointing arbitrators from the
roster.
[93]
Finally, the appellants rely on the carefully chosen words of
Mr. Dean in his affidavit. In particular, they refer to
discussions at meetings in September 1997 about the choice of
arbitrators and Mr. Dean's statement in his affidavit that:
15.
…I expressly stated that union representatives would see some new
faces whom they had not seen before. I indicated that my
personal best guess was that there would not be many such people,
but that union representatives should expect such appointments.
I also indicated that I believed that the appointees would be people
who could do the job, and would be considered broadly as being fair
and impartial.
[94]
Mr. Dean's statement that there would be some new faces is
strictly speaking true. However, when all the faces are new,
the statement becomes misleading. In fact, Mr. Dean's
statement that there would “not be many such people” turns out
to be quite wrong. His statement that the “appointees would
be people who could do the job, and would be considered broadly as
being fair and impartial” is misleading in that “broadly”
could not possibly include the appellants.
[95]
Accordingly, to the appellants, the appointments by the
Minister on February 20, 1998, constituted a complete and total
reversal of the Minister’s position. The four retired judges
were not on the roster, were not viewed in the same way as Paul
Weiler, Justice Alan Gold or former Justice George Adams, and were
appointed without consultation or warning.
[96]
Even if the new appointees had been persons other than judges
or retired judges, the surprise or shock experienced by the
appellants would have been substantial, in view of the apparent
commitment by the Minister in his letter of February 2, 1998.
In light of the evidence of Professor Weiler with respect to
labour’s view of the courts and the judiciary on labour related
matters, the shock experienced by the appellants must have been very
substantial indeed. That inference is supported by the tone of
the letter of March 10, 1998 from Mr. Samuelson to the Minister.
CONCLUSIONS
[97]
In Généreux, supra, Lamer C.J.C. held at p.
309 that the appointment of a military judge to sit as a judge
advocate “should be in the hands of an independent and impartial
judicial officer.” Stevenson J. decided at p. 318 that “no
one who has a interest in seeing that the prosecution succeeds or
fails should be in a position of influence.” It is beyond
argument that the Minister, as a member of the government of Ontario
has a substantial interest in the outcome of the arbitrations in
issue.
[98]
Not only do retired judges generally lack the expertise of
the prior arbitrators, but they are also not independent. In Matsqui,
supra, Lamer C.J.C., Cory J. concurring, found at p. 58 that
“a reasonable and right-minded person, viewing the whole procedure
in the assessment by-laws, would have a reasonable apprehension that
members of the appeal tribunals are not sufficiently independent.”
Lamer C.J.C. found that the complete absence of financial security
for members of the tribunals, inadequate security of tenure and the
fact that “tribunal members must determine the interests of the
very people…to whom they owe their appointments”(at p. 58)
pointed to the lack of independence. All three factors are
relevant in the instant case. Retired judges have no security
whatever, vis a vis the province. They have no assurance at
all that they will be appointed to future arbitrations and they are
asked to decide questions in which the person who appointed them has
a substantial financial interest.
[99]
Having regard to the factors set out above, and applying the
test of the “reasonable and informed person” as approved by
Lamer C.J.C. in Matsqui, supra, I find that abandoning
the established practice of selecting chairpersons from the roster
and the unilateral adoption by the Minister of a practice of
personally selecting retired judges to replace them, in the context
outlined in these reasons, gives rise to a reasonable apprehension
of bias and gives the appearance of interference with the
institutional independence and the institutional impartiality of the
boards of arbitration established under HLDAA.
[100]
Of particular significance in reaching this conclusion are
the enactment in 1979 of what is now s. 49(10) of the LRA, the
establishment of a practice of selecting mutually acceptable
chairpersons for interest arbitrations under HLDAA from the roster,
the statement of February 2, 1998 that the hospital sector would
continue under the existing system for the appointment of
arbitrators and then the abrupt reversal of that decision and the
unilateral appointment by the Minister himself of retired judges.
Also of particular significance is the behaviour of employers
following that reversal as set out in para 33.
[101]
The action taken by the Minister, unilaterally and without
consultation or warning, must reasonably be seen as an attempt to
seize control of the bargaining process and not only to exclude the
appellants from it, but in addition 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.
[102]
In addition, having regard to the circumstances surrounding
the appointments, the Minister has failed to meet the legitimate
expectations of the appellants, contrary to the principles and
requirements of fairness and natural justice. In this context,
the statements of the Minister in his letter of February 2, 1998
constituted a commitment to continue the existing system for the
appointment of arbitrators. Not only was that course
abandoned, but the Minister proceeded in an entirely different
direction, one that in the circumstances might be regarded as
provocative or defiant. The appellants were entitled to notice
of the Minister’s intention, an opportunity to consider their
position and possibly an opportunity to discuss the situation.
In these circumstances, the appellants’ legitimate and reasonable
expectations were not met.
[103]
The appellants complain not only about the appointment of
retired judges, but as well about the fact that it is the Minister
who appoints them, rather then the Minister’s delegate. In
the circumstances, it does not seem likely that it would make any
difference if the power were delegated and if the delegate were to
continue to appoint only retired judges. Conversely, if the
person responsible for the appointments chose to make them from the
roster, it seems likely that the same person, to be consistent,
would choose to make them through a delegate, with a view to
distancing the appointments from the political sphere.
Accordingly, I see no reason to deal with that complaint as a
separate item.
[104]
It may be suggested that this decision amounts to a judicial
amendment of s. 6(5) of HLDAA. It is not. It does,
however, recognize that the power granted to the Minister by s. 6
(5) must, like other ministerial powers, be exercised in accordance
with the legal principles set out earlier in these reasons.
Those principles, in this case, are informed by a custom which has
developed over the last 20 years. That custom has reflected
the exercise of power granted by s. 6(5) so as to achieve a mutually
desired objective, namely, effective arbitrations in a sector in
which strikes and lock-outs are forbidden and in which the
appointing authority has a very substantial interest in the outcomes
of the arbitrations.
REMEDY
[105]
Having found in favour of the appellants with respect to
independence, impartiality and legitimate expectations, the question
arises as to the appropriate relief. What the appellants ask
for is set out in the notice of appeal as follows:
1.
A declaration that the Minister created a reasonable apprehension of
bias and interfered with the independence and impartiality of boards
of arbitration established under HLDAA, contrary to the principles
and requirements of fairness and natural justice;
2.
A declaration that the Minister interfered with the legitimate
expectations of the appellants and other affected unions, contrary
to the principles and requirements of fairness and natural justice;
3.
An order in the nature of prohibition preventing and prohibiting the
Minister from exercising his discretion to appoint persons to sit as
chairs of boards of interest arbitration under HLDAA, unless such
appointments are made from the long-standing and established roster
of experienced labour relations arbitrators;
4.
An order quashing the appointments, made by the Minister, of all
persons who were appointed as chairs of boards of interest
arbitration under HLDAA who were not from the long-standing and
established roster of experienced labour relations arbitrators.
[106]
The relief claimed in items one, two and three of the
preceding paragraph should be granted. As to item four,
counsel did not address the consequences of an order in such terms.
Having regard to the substantial number of arbitrations suggested by
the material and to the various stages of resolution which they may
have reached, and may still be reaching, since February 20, 1998, I
would decline to make any order respecting item 4, subject to the
right of counsel to address this court in that regard should they be
so advised.
[107]
I would therefore allow the appeal, set aside the order below
and in its place grant an order in the terms set out above.
With respect to item 3 of para 106, the order will speak only from
the date of release of these reasons and will not apply to persons
not on the roster but who are mutually acceptable to the relevant
parties. I would also award the appellants their costs of
these proceedings, here and below.
Released:
November 21, 2000
(signed) “Austin J.A.”
(signed) “J.M. Labrosse J.A.”
(signed) “Doherty J.A.”
