Canada: Get Outta Here! Ontario Court Confirms It Has No Jurisdiction Over Dispute Arising From Collective Agreement

Last Updated: November 20 2018
Article by Michael MacLellan

A decision from the Ontario Superior Court of Justice confirmed a long-standing legal principle that is at the foundation of labour law: the courts have no jurisdiction to hear cases arising from a collective agreement.

In De Montigny v. Roy et al the Plaintiff sued her former co-workers for defamation.  The employer operated a grocery store, where the parties worked pursuant to the terms of a collective agreement with the United Foods and Commercial Workers.  The Union grieved when the Plaintiff was terminated in 2014 for workplace harassment, and settled for reinstatement on the basis of a “last chance agreement”.  In 2015 when the Plaintiff was once again found to have engaged in harassment, she was terminated for the last time.

The Plaintiff was accused of making harassing remarks by her co-workers, and upon investigation the employer agreed.  The Union filed a grievance, but upon its own investigation, declined to carry the grievance to arbitration.  The Plaintiff claimed to the Ontario Labour Relations Board that her union had failed to comply with its duty of fair representation, but that claim was denied.

The Plaintiff’s last apparent avenue for remedy was to sue her former co-workers civilly, alleging that their information to the employer in the course of the harassment investigation constituted defamation, and but for their untruthful and defamatory remarks, the Plaintiff never would have been terminated.  The Defendants in this case were those former co-workers.  They astutely argued that the Ontario Superior Court of Justice did not have jurisdiction to even entertain this defamation claim.  They submitted that the exclusive jurisdiction for this dispute was in front of a labour arbitrator.

In accordance with the Labour Relations Act, 1995 all collective agreements in Ontario provide for binding arbitration to resolve disputes arising under a collective agreement.  The Supreme Court of Canada elaborated in the case of Weber v. Ontario Hydro, explaining that where a dispute, regardless of how it is characterized legally, arises under a collective agreement, then the jurisdiction to resolve it lies exclusively with the labour tribunal and the courts cannot try it.  More specifically, the Supreme Court decided “the question in each case is whether the dispute, in its essential character, arises from the interpretation, application, administration or violation of the collective agreement.”

The Defendants submitted that the claim had to be dismissed for lack of jurisdiction because its essential character was a workplace dispute where a collective agreement governed its resolution.  The Plaintiff disagreed.  She argued that the subject matter of her claim was defamation, which is not a matter contemplated by the collective agreement.  Further, she argued that a labour arbitrator would not have the ability to award damages for defamation as against her former co-workers as she was seeking, and that she was deprived of a chance to have her case heard by an arbitrator anyway, when the Union decided not to pursue it.

The Court pondered the “essential character” of this matter and made the following observations: the Plaintiff made her claim against her former co-workers; the Defendants made the impugned remarks pursuant to their duty to report harassment under workplace harassment policies and at the request of the employer; the impugned remarks were that the Plaintiff was harassing yet another co-workers; the employer had a duty by law to investigate the harassment allegations; the Plaintiff was terminated under the terms of her “last chance agreement” that was itself a settlement of a grievance under the collective agreement; the Plaintiff in fact pursued her rights under the collective agreement in this matter; and the collective agreement provided an arbitrator with the right to grant remedies if it were shown that the impugned statements were false.

For the foregoing reasons, the Court held that the essential character of the complaint was related to the interpretation, application, administration, or alleged violation of the collective agreement, and therefore that it did not have the jurisdiction to resolve this complaint.  The Plaintiff’s claim was dismissed on a preliminary motion.

While nobody wants to be involved in a grievance, it is important to recognize the policy reasons for this exclusive jurisdiction mode.  Labour arbitrators are specifically suited to resolve grievances that arise from a unionized work environment.  Different legal principles apply when a collective agreement is in place, as opposed to a common law employment relationship.  Also, the Courts are not willing (or frankly able) to be consumed with the many grievances that are filed on a regular basis.  Labour arbitration is intended to provide a specialized and expeditious forum for grievances to be determined by adjudicators with relevant knowledge and expertise.

The lawyers at CCPartners are knowledgeable and experienced at litigating grievances under collective agreements.  Not to mention, the ongoing relationship between employer and union needs to be sensitively and carefully preserved, which means that reasonable settlement can often be the best outcome for unions, employees, and employers.

At any rate, you should always be mindful of whether a workplace dispute is, by its essential character, stemming from a collective agreement.  If so, you may be able to have a civil claim dismissed for lack of jurisdiction by the Court.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Michael MacLellan
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