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The Promise of Labour Arbitration: Delayed but Not Forgotten

There has been a much-needed recent focus on the state of the civil litigation process in Canada. Of course, the courts are only a small (albeit vital) part of our system of justice. In fact, a majority of people in Canada will have little, if any, direct contact with the courts; they are more likely to encounter various aspects of the administrative justice system in disputes with neighbours, in their workplace and with governments. In this column, I will focus on the justice system for unionized employees – the labour arbitration process.

Labour arbitration was introduced as part of the compromise to ensure labour stability during the life of a collective agreement, as summarized succinctly by the Supreme Court of Canada in Health Services and Support – Facilities Subsector Bargaining Association v. British Columbia, 2007 SCC 27 at paragraph 60:

On the one hand, it [the Wagner Act model] granted major protections to workers to organize without fear of unfair interference from the employers and guaranteed workers the right to bargain collectively in good faith with their employers without having to rely on strikes and other economic weapons. On the other hand, it provided employers with a measure of stability in their relations with their organized workers, without the specter of intensive state intervention in the economy … These elements … continue to guide our system of labour relations to this day.

And in Dayco (Canada) Limited v. National Automobile, Aerospace and Agricultural Implement Workers Union of Canada (CAW‐Canada), [1993] 2 S.C.R. 230, Justice Cory stated, at paragraph 93:

Unresolved disputes fester and spread the infection of discontent. They cry out for resolution. Disputes in the field of labour relations are particularly sensitive. Work is an essential ingredient in the lives of most Canadians. Labour disputes deal with a wide variety of work related problems. They pertain to wages and benefits, to working conditions, hours of work, overtime, job classification and seniority. Many of these issues are emotional and volatile. If these disputes are not resolved quickly and finally they can lead to frustration, hostility and violence. Both the members of the workforce and management have every right to expect that their differences will be, as they should, settled expeditiously. Further, the provision of goods and services in our complex society can be seriously disrupted by long running labour disputes and strikes. Thus society as a whole, as well as the parties, has an interest in their prompt resolution.

The grievance process for rights disputes is set out in collective agreements, and by statute every collective agreement is required to have a grievance process. The parties to a collective agreement have the autonomy to develop a process that works for them, as long as it meets certain minimum requirements. In capsule, here are the basic elements:

1. There is a time limit for filing a grievance;

2. The union files the grievance on behalf of the aggrieved employee and has carriage of the grievance;

3. There are time limits for the movement of a grievance through all internal levels and, if not resolved, for its referral to arbitration;

4. The grievance will be heard by either a panel of three, or a single arbitrator;

5. The arbitrator is generally chosen by mutual consent of the parties;

6. If the parties cannot agree on the arbitrator, the Ministry of Labour will appoint from a roster; and

7. The parties can agree to an expedited process that mandates the appointment of an arbitrator from a roster by the Ministry of Labour.

There appears to be a consensus that the labour arbitration system is not working well: it is costly, cumbersome and delay-ridden. In researching this column I spoke to a number of counsel about the current arbitration process. Admittedly, an unrepresentative sample, but there was consensus that it is a process in need of repair.

In 2010, Ron Pink and David Wallbridge, union-side lawyers, spoke about the future of labour arbitration at a CBA conference and stated that there is no future of labour arbitration:

Traditional labour arbitration, as we used to know it, is dead and its future looks even more dead. Lawyers should not plan a career in labour arbitration. There is no future for new arbitrators. The private sector trade union movement is in serious decline. There are fewer and fewer certification applications being processed by Labour Relations Boards across the country. As well, union leaders are more sophisticated in settling grievances. Most importantly, lawyers have made the process so complicated and expensive that we have “killed the goose that has made our careers”.

In 2011, Chief Justice Winkler gave a lecture at Queen’s University on the state of labour arbitration. He spoke of the delays in the grievance and arbitration process, the increased costs to the parties of the arbitration process and “a turgid arbitration process that may be impoverishing the parties, especially unions”.

Winkler, C.J., advocates a return to the roots of arbitration, the so-called “golden age”. It is true that, in the beginning, arbitration was speedy and efficient. It was, in some cases, a form of “rough justice” that often did not involve lawyers. It also did not have to cope with the range of issues that now often arise at arbitration: human rights, health and safety law, workers compensation and constitutional issues, to name a few. This “golden age” was also before the tsunami of electronic documents subject to disclosure and before the need for complicated medical evidence in some cases.

For Winkler, C.J., the most profound effect on the arbitration process has been its undue legalization:

This cultural shift has led the sector to mistakenly adopt the most cumbersome attributes of our civil litigation process; and, thus, labour dispute resolution has become too slow, costly, inflexible, and legalistic to meet the true needs of the parties.

Winkler, C.J. distills the problems facing labour arbitration to two interconnected factors: a growing lack of proportionality and over-formalization of the arbitration process.

Proportionality has been well discussed in the civil litigation context (see, for example, the Osborne Report from 2007), and Winkler, C.J., defines it as “the practice of maintaining a reasonable balance between the time and money expended on the case on the one hand, and the significance of the case to the parties and the value of what is involved on the other.” Defining features of a lack of proportionality often include:

  • needless steps at the outset of a hearing;
  • the calling of unnecessary evidence; and/or
  • the failure to limit the expectations and the demands of a client, allowing the client to effectively take carriage of the grievance.

The adversarial system can discourage proportionality in arbitration and result in over-formalized or “legalistic” processes that are far removed from the often straightforward workplace problem at issue. Over-formalization of process often leads to lengthy delays in scheduling of hearings, endless procedural objections and lengthy hearings.

In the words of Winkler, C.J.:

By all accounts, the arbitration itself has increasingly become more like a full-blown trial and less like an innovative, informal forum that quickly and fairly achieves workplace justice. … the exhaustive list of witnesses, objections, adjournments, refusals by counsel to make concessions that they should be making, and the general inability of counsel to exercise the necessary judgment about what will help their case prolong hearings well beyond what is necessary and affordable. This is often exacerbated by inexperienced counsel.

However, the fault does not rest solely with counsel or the parties they represent. Arbitrators have also played a role, according to Winkler, C.J.:

 … Rather than providing the necessary cues and guidance to keep the parties focused on the real issues in dispute, arbitrators themselves at times fall prey to this deleterious behaviour. Arbitrators can fall short of their role if they fail to take the necessary control over the hearing process.

Arbitral awards have also become increasingly intellectual in nature, lengthier and, at times, too esoteric to meet the needs of those working on the front-line. There are no doubt times when a particular case requires fulsome reasons. But, for most grievances, the significance of the case does not outweigh the cost and the delay of resolution. In most grievances, the parties simply need a timely decision on the merits.

Pink and Wallbridge note that the availability of mutually acceptable arbitrators is an ongoing problem in parts of the country:

… It takes many months, if not years, for the parties to be comfortable with a new arbitrator. That arbitrator has to have the ability to gain the trust of the parties and to be comfortable as a new “middle man”. Arbitrators do not grow on trees. They are seasoned professionals who have a reputation for fairness and equity. Busy arbitrators are a result of success in the market place. The attainment of a position on the “list of arbitrators” from the Ministry of Labour is no guarantee of success in the marketplace.

In my conversations with counsel, there was a recognition of regional imbalances in the number of qualified arbitrators. A number of counsel based in Atlantic Canada commented on the shortage of qualified (and mutually acceptable) arbitrators in that region. However, there is not a shortage of arbitrators in Ontario: there are over 100 members of the arbitrators’ association and a training program for new arbitrators is now underway.

The solutions to a dysfunctional arbitration system, according to Chief Justice Winkler, are best left to the parties themselves:

Perhaps this will take the form of a permanent panel; an ad hoc system; an expedited system, whether statutory or in-house; or some combination of systems new and conventional. The choice or choices will depend on a number of factors, such as the size of the workplace, the nature of its operations, the types of grievances generated in the workplace, the level of trust between the parties, their level of sophistication, the general culture of the workplace, and the volume of grievances per year.

Chief Justice Winkler did provide some suggestions for the parties to consider:

  1. Compressing the grievance procedure (eliminating steps in the grievance process, imposing deadlines for scheduling hearings, selecting arbitrators and issuing of decisions).
  2. Expanding their pool of arbitrators for the parties to consider to include those who are more available.
  3. Using the internal grievance process as the discovery process, rather than waiting until the first day of the hearing.
  4. Focus on what is in dispute through a sharing of documents at the outset, and the use of admissions and agreed statements of fact.
  5. Limiting evidence to what is essential to making the case and restricted to the examination and cross-examination of necessary witnesses.
  6. Not every grievance requires an exhaustive, publication-quality decision but, rather, reasons that are “sufficient.”
  7. Grievance arbitration should not be seen as an interim step en route to judicial review.

Pink and Wallbridge proposed similar reforms, but also included the following areas for improvement:

  1. Government managed mediation prior to arbitration: the parties would be required to appear before a government mediation officer to attempt to resolve the grievance, forcing the parties to pay early attention to the merits of their case.
  2. Mandatory mediation by arbitrators and med-arb: every arbitrator should be required to attempt to mediate the dispute before him or her. (This is a common practice in Ontario, but not as common in some other provinces.)
  3. Expedited non‐binding arbitration: expedited processes have been used with success with larger employers (Canada Post and the railways, for example).
  4. Early settlement: more and more cases settle prior to going to arbitration because human resource professionals and union representatives are more skilled, and the parties recognize the cost benefits of early settlements.

In my survey of counsel on both sides, there was a consensus that more advance preparation by the parties, including disclosure prior to the hearing, would result in more efficient hearings. The ability of an arbitrator to force disclosure and rule on other preliminary objections is uneven across the country. For example, arbitrators appointed under the Ontario Labour Relations Act have the statutory authority to make preliminary rulings, while arbitrators in New Brunswick do not. One would think that it would be in the general interest of the parties to address preliminary issues, such as disclosure, prior to a hearing. However, there is a perception that delay is often in the tactical interest of the employer. In addition, the first day of hearing in some jurisdictions is often spent in mediation, often leading to settlement – which is a disincentive to incurring the costs of fully preparing for a hearing.

The delays in scheduling hearings because of the availability of parties and the selected arbitrator were a common concern of counsel. Equally of concern were the challenges in scheduling continuation dates. One union-side counsel told me that grievors are making decisions about settlement based almost solely on the lengthy delays in finishing hearings.

Counsel told me of various strategies they use for obtaining disclosure prior to the hearing, such as requesting disclosure from the other party four to six weeks from the date of hearing and, if not forthcoming, scheduling a conference call with the arbitrator to get a production order. Another counsel prepares affidavits for all witnesses and provides them to the other party and the arbitrator prior to the hearing. These affidavits can sometimes prompt settlement discussions. They can also be adopted as the evidence in chief of the witness, followed by a cross examination, thereby saving hearing time.

Some larger workplaces, with high volumes of grievances, have expedited hearings where the advocates for each party are experienced labour relations specialists, not lawyers. Lawyers may play a role in providing opinions but are always in the background. Some workplaces with large volumes of grievances also schedule regular case management meetings where the parties review outstanding grievances, prioritize them and often identify grievances suitable for settlement discussions.

Lest the reader is left with the impression that the views of counsel on the arbitration process are all negative, I did find counsel with good things to say. We should not lose sight of the fact that the promise of arbitration to enhance access to justice remains. Although the courts and legislatures have complicated the arbitration process by giving jurisdiction to arbitrators over almost every aspect of disputes in the workplace, they have also ensured that one process, for the most part, can address all aspects of a dispute. In addition, arbitrators are now more knowledgeable about all aspects of workplace law. In jurisdictions such as Ontario where mediation at arbitration is common, counsel told me that arbitrators were generally skilled in assisting the parties to reach settlements. In addition, fewer cases are going to arbitration because the parties are choosing to resolve them on their own and are doing so effectively.

Where will the pressure for the necessary changes come from? As Pink and Wallbridge state, “lawyers must assist in making the changes, but the parties must be willing to change themselves.” Clearly, there is also a role for arbitrators: they have both an interest and a duty to work with counsel and the parties to make the arbitration process effective and efficient, while ensuring it remains a fair to all parties.

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Comments

  1. Some people may recognize my name and know right away what I’m likely to say.

    Mr. Mackenzie, you should have tried following the example of Professor Julie Macfarlane in talking to SRL’s. A classicly botched grievance arbritation is what started my sojourn as an SRL.

    Two successive days in two diferent hotels, heard by a professor of law, facing an entire team on the management side and accompanied by someone assigned at the last possible minute by a panicking union local – someone who was completely unprepared and shouldn’t have been there.

    It was abundantly clear even before the termination that no one in the union had any interest in helping me deal with the escalating workplace harassment. The union? Canada’s largest!

    That was in the year 2000. I’ve since created a long record of litigation. I invite you to review it. And my conclusion, in a letter Canada’s Chief Justice won’t answer:

    http://www.uncharted.ca/images/users/ssigurdur/052013_pblc_ltr_re_cj_to_naa.pdf

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