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SUPREME COURT OF CANADA FINDS LABOUR ARBITRATOR HAS EXCLUSIVE JURISDICTION OVER HUMAN RIGHTS COMPLAINT IN UNIONIZED WORKPLACE

In the recent decision of Northern Regional Health Authority v Horrocks the Supreme Court of Canada (“SCC”) has ruled that a unionized employee must pursue their human rights complaint through the grievance and arbitration system as opposed to the Human Rights Commission/Tribunal process established in that province. The decision is significant for unionized employers throughout Canada who are often required to defend and defer the same claim in multiple forums, thereby increasing the expense, time and risk associated with responding to the claim.

Facts

Ms. Horrocks was suspended by the Northern Regional Health Authority (the “NRHA”) in 2011 for attending work under the influence of alcohol. While she acknowledged an addiction, she refused to enter a last chance agreement that would have required her to abstain from alcohol and enter treatment. As a result, the NRHA terminated her employment. Ms. Horrocks’ union grieved her dismissal and the parties eventually agreed on a settlement resulting in her reinstatement under the terms of a similar last chance agreement. Shortly thereafter Ms. Horrocks’ employment was terminated again for violating the agreement. Ms. Horrocks then filed a claim with the Manitoba Human Rights Commission (the “Commission”).

In response, the NRHA sought to have the claim dismissed for lack of jurisdiction. They argued that any human rights claim fell under the exclusive jurisdiction of a labour arbitrator pursuant to the collective agreement. The adjudicator disagreed with the NRHA, finding that the essential character of the dispute was an alleged human rights violation, not the interpretation, application, administration or violation of the collective agreement. The adjudicator went on to find that the NRHA had discriminated against Ms. Horrocks when it terminated her employment.

The adjudicator’s jurisdictional decision was set aside by the Manitoba Court of Queen’s Bench, which found the essential character of the dispute was whether the NRHA had just cause to terminate Ms. Horrocks’ employment. The Manitoba Court of Appeal agreed that disputes concerning termination of employment, even where human rights violations are alleged, are the exclusive jurisdiction of labour arbitrators. However, the Court of Appeal held the adjudicator had jurisdiction because:

1. Ms. Horrocks made the choice to sever the employment and human rights issues by not grieving the second termination;
2. The discrimination claim “transcended the specific employment context, because an employer’s accommodation of an employee’s alcohol dependency is “larger than the specifics of what occurred in the employment relationship”; and
3. The union was not interested in pursuing arbitration, therefore precluding Ms. Horrocks from bringing her claim to any forum.

SCC’s Decision

The issue for the SCC was whether labour arbitration is the primary as opposed to the exclusive forum for enforcing human rights issues under the collective agreement. Ms. Horrocks and the Commission argued the former, asserting that jurisdiction could only be concurrent unless the Human Rights Code (the “Code”) clearly granted exclusivity to labour arbitrators. That was particularly so, they argued, under quasi-constitutional human rights legislation.

The majority of the SCC disagreed finding the resolution of jurisdiction contests between labour arbitrators and statutory tribunals requires the following two-step analysis.

1. Does the relevant legislation grant exclusive jurisdiction, and over what matters?

    

   According to the SCC the combined effect of the collective agreement and the Manitoba Labour Relations Act (the “LRA”) was to mandate arbitration of “all differences” concerning the “meaning, application, or alleged violation” of the collective agreement. In contrast, while the language of the Code, guaranteed the paramountcy of human rights obligations, it did not establish paramountcy of the procedures (i.e. of the Commission and Tribunal) established under the act. As such, there was no language in the Code which could be interpreted to carve away at the exclusive jurisdiction granted to arbitrators under the LRA.

2. If exclusive jurisdiction is established, does the dispute fall within the scope of that jurisdiction?

To fall within the jurisdiction of a labour arbitrator, a dispute in its essential character must arise from the interpretation, application or alleged violation of the collective agreement. This is essentially a factual analysis even if those facts could ground other statutory or common law claims.

In analyzing the facts, the SCC determined that the essential character of the complaint was an allegation that the NRHA “exercised its management rights in a way that was inconsistent with their express and implicit limits.” It did not matter that the claim could legally be characterized as an alleged violation of the Code, because the facts giving rise to the claim were a clear labour dispute arising under the collective agreement. In coming to this conclusion the SCC also noted the existence of anti-discrimination provisions in the collective agreement and the implicit effect of employment related legislation, including the Code on all employment agreements.

Takeaways

The decision is a clear victory for many employers, and provides a measure of predictability and certainty in responding to allegations of discrimination. However, because the decision is based on the language of the Manitoba LRA and Code respectively, we must be careful about generalizing the result to other jurisdictions. That being said, similar legislation in Ontario (see e.g. s 48(1) of Ontario’s Labour Relations Act and s 5 of Ontario’s Human Rights Code) contain similar language. While more detailed analysis of this legislation is required, we believe it is likely the same result would be reached in Ontario.

It must also be stressed that the decision does nothing to affect concurrent jurisdiction between decision makers. Where concurrent jurisdiction exists, one matter may be deferred pending the outcome of the other process, but is unlikely to be dismissed entirely at the outset. The relevant legislation must be reviewed carefully to determine the best strategic response where similar claims are filed in multiple forums.

The decision intuitively makes sense given the general purpose of all Canadian labour legislation, which is to provide economic resolution of labour disputes with minimal interruption to the parties and the economy. The decision is also clear that this technical, jurisdictional analysis does not prevent employees from seeking remedies that are not available through the arbitration process in other forums. The prime example would be an interlocutory injunction, which is only available through the courts.

The remaining question of course is whether this analysis can be applied to other statutory tribunals or decision makers to force more disputes to be placed in front of labour arbitrators. While we do not have the answer to that, the SCC has cemented a clear test for future analysis. With the flexibility and ability of the parties to shape the arbitration process, there may well be more attempts to test the limits of a labour arbitrators’ exclusive jurisdiction in the future, particularly if employers are (hopefully) spending less time seeking deferral orders in front of tribunals.

If you have any questions about accommodation obligations or labour arbitration in general the lawyers at CCPartners are here to help. Click HERE to access CCPartners’ “Lawyers for Employers” podcasts on important workplace issues and developments in labour and employment law or contact any of our team members to answer you workplace questions.