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Labour (Ont) - Settlement. Knauth v. The Independent Electricity System Operator et al.
In Knauth v. The Independent Electricity System Operator et al. (Ont Div Ct, 2026) the Ontario Divisional Court dismisses a labour JR, this brought against an arbitrator's ruling that the applicant had "violated the terms of a Termination Agreement (the “Agreement”) with her former employer" that prohibited her "from commencing claims against the employer related to her termination".
Here the court considers the rule that only a union has standing to contest employee rights, and exceptions thereto - this is the context of a disputed termination settlement [see esp para 25]:The Applicant Does Not Have Standing
[21] In Canadian labour relations, the only parties to a collective agreement are the Society and the employer (Nöel v Société d’énergie de la Baie James, 2001 SCC 39 (CanLII), [2001] 2 SCR 207, at para 42; Yee v Trent University, 2010 ONSC 3307, at para 6). In unionized workplaces, employers cannot bargain individually with employees because the Society is the exclusive bargaining agent of its members (Noel at paras 41-42; Yee, at para 6; Ali v United Food and Commercial Workers Canada, Local 175, 2014 ONSC 7318, at para 4).
[22] As the exclusive bargaining agent, a union controls the grievance and arbitration process unless there is clear language to the contrary in the collective agreement. Because of the Society’s exclusive oversight of the grievance process, employees generally do not have standing to seek judicial review of an arbitration award where the Society has decided not to do so (Nöel, at para 69).
[23] This Court has recognized three exceptional circumstances in which an individual employee might have standing to pursue an application for judicial review independent of their union. The applicant meets none of the exceptional circumstances.
i. There is no language in the collective agreement which confers a right on the applicant to bring an application for judicial review
[24] The collective agreement between the Society and the IESO does not contain any language permitting individual members to have carriage of grievances or to bring applications for judicial review. Article 15.2 of the collective agreement sets out the definitions of an employee complaint, employee grievance, group grievance, policy grievance, and company grievance. Even an employee complaint is one that must be filed by a Society Local Vice-President, Unit Director, or Delegate.
[25] The Arbitrator included the applicant’s name in the style of cause of his decision as a naming convention reflecting the unique circumstances of the case. But the collective agreement recognizes the Society as the exclusive bargaining agent of its members employed by the IESO. And being a party to a settlement is not the same as having standing in a grievance or standing to bring an application for judicial review. While the applicant was party to the Agreement and was required to sign it to obtain the settlement funds, she did not have standing in the subsequent grievance which arose from the collective bargaining relationship between the Society and the IESO.
ii. The Society did not take a position adverse in interest to the applicant
[26] The Society did not take an adverse position to that of the applicant in the grievance. In fact, at the hearing, the Society did not take a position on the merits. That is not the same as taking a position adverse in interest. The Society did not make submissions in support of the IESO’s position or concede the grievance. It asserted that it had abided by its duty of fair representation owed to the applicant. The only relevant issue in the grievance the Society did take a position on was in support of the applicant that the Charter applied to the IESO, which the Arbitrator accepted.
[27] The applicant was informed of the grievance and the date of the hearing. She attended the hearing and was permitted the opportunity to present evidence with the Society assuring her the opportunity to make fulsome submissions in her own defence. In fact, the applicant was allowed to make two additional written submissions following her initial written submissions of May 12, 2025, and oral submissions at the hearing.
[28] The fact that the financial stakes are high for the applicant in this case does not affect the analysis for determining standing (Yashin v National Hockey League, 2000 CanLII 22620 (ON SC), at para 22).
[29] The Society could not have been characterized as an “opponent” during the Arbitration or having been in “fundamental conflict with the employee’s core interest” (Themelis v Toronto, 2021 ONSC 250, at para 18). The second exceptional circumstance does not apply.
iii. The Society’s representation of the applicant was not deficient
[30] The Society’s representation of the applicant was not so deficient that she must be granted standing. The applicant had not been employed by the IESO or a member of the Society’s bargaining unit at the IESO for over 13 years. Yet, the Society advocated for Ms. Knauth to make her own submissions and, as a result, she was able to make every argument she wished to make. As already set out, the Society also supported the applicant on her Charter submissions, which the Arbitrator accepted. This case does not fall into the third exception.
[31] The applicant does not have standing in this Application and it should be dismissed for that reason alone.
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[36] The applicant has provided no authority for her complaint that the Arbitrator did not have jurisdiction to enforce the Agreement because it did not resolve a grievance and instead resolved an HRTO complaint. She relied on section 48(15) of the LRA which states that “An arbitrator or the chair of an arbitration or the chair of an arbitration board, as the case may be, may enforce the written settlement of a grievance”. While section 48(15) of the LRA authorizes an arbitrator to enforce the written settlement of a grievance, it does not preclude an arbitrator from enforcing a settlement that does not specifically address a grievance. The proper test is whether the matter falls within the ambit or essential character of the collective agreement, which I have found it did. In the Donovan case, an arbitrator was found to have jurisdiction to enforce the settlement agreement in that matter, despite the fact that it, among other things, resolved an ongoing HRTO complaint and not a grievance.
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