Disputes involving labour relations matters and those involving
alleged anti-competitive conduct are generally deferent to
specialized arbitrators or tribunals. A recent Ontario Superior
Court of Justice (Divisional Court) decision clarifies the approach
to cases where competition law issues arise within the context of
the labour dispute.
In Metropolitan Apartment Builders Assn. v Labourers'
International Union of North America, 2014 ONSC 5775, three
builders associations unsuccessfully sought to judicially review
the decision of a labour relations interest arbitrator. The
associations consist of construction companies bound by collective
agreements with the respondent union. When these parties were
unable to reach renewal collective agreements, an interest
arbitrator was appointed to settle the terms of those renewal
During the interest arbitration the applicant building
associations sought to argue that certain collective agreement
provisions violated Canada's federal Competition Act,
R.S.C. 1985, c. C-34, (the "Act") and should thus not be
included in the collective agreements. Specific provisions which
were challenged included the subcontracting and cross-over clauses
and certain related Letters of Understanding. The sections of the
Act which these collective agreement provisions were alleged to
have violated include s. 45 (criminal conspiracies, agreements or
arrangements between competitors), s. 77 (exclusive dealing, tied
selling and market restriction), s. 79 (abuse of dominance), and s.
90.1 (civil agreements or arrangements between competitors that
prevent or lessen competition substantially).
The interest arbitrator concluded that he had jurisdiction to
interpret and apply these provisions of the Act, to the extent that
they were relevant to the issues before him. However, he exercised
what he considered to be his discretion not to determine
the competition law issues. The arbitrator purported to do so
because "the essential nature of the dispute" engaged
competition law issues — and, in particular, complicated
questions of market definition and competitive effects — and
not labour relations. As a result, he concluded that the dispute
was better determined by the Competition Tribunal or the courts as
opposed to a labour arbitrator. The building associations sought
judicial review of this decision.
Their application for judicial review was dismissed by the
Divisional Court. It held that the arbitrator's decision to
defer dealing with the competition law issues met the applicable
"reasonableness" standard on judicial review, as:
Only the Competition Tribunal has the jurisdiction, and the
economic expertise, to determine questions arising under sections
77, 79 and 90.1 of the Act;
The question raised under section 45 of the Act, dealing with
criminal conspiracies between competitors, "would have
ramifications beyond the parties to the arbitration";
It was reasonable to expect the applicants to employ the
procedures under the Act (including the Competition Tribunal's
processes) to seek a determination before a body which could rule
on all relevant issues; and
The labour relations reality was that the interest arbitrator
had been appointed to determine the terms of the renewal collective
agreements on an expedited basis, and it would be unfair to delay
This decision arose in unique circumstances but does provide
helpful guidance for other disputes. In particular, when technical
competition law arguments under the Act are raised, the working
assumption should be that separate Competition Tribunal or court
proceedings may be required for issues arising under Parts VIII
(civil reviewable practices) or VI (competition offences) of the
Act, respectively. This is essentially an exception to the general
rule that labour arbitrators have exclusive jurisdiction over
collective agreement matters.
The foregoing provides only an overview and does not
constitute legal advice. Readers are cautioned against making any
decisions based on this material alone. Rather, specific legal
advice should be obtained.
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