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Labour - 'Interest Arbitration'. Library of Parliament v. Public Service Alliance of Canada
In Library of Parliament v. Public Service Alliance of Canada (Fed CA, 2025) the Federal Court of Appeal allowed in part a labour JR, here challenging "specific portions of an interest arbitral award ... by a panel established by and for the Federal Public Sector Labour Relations and Employment Board (the Board), pursuant to section 50 of the Parliamentary Employment and Staff Relations Act".
Here the court distinguishes 'interest arbitration' from 'grievance arbitration':[2] This matter arises in the context of interest arbitration, which is a form of binding arbitration that allows parties to settle the terms and conditions of a collective agreement after negotiations result in an impasse. This recourse is necessary as sections 73 and 74 of the Act prohibit any striking activity. Interest arbitration is driven by the replication principle, which was described by this Court in Laurentian Pilotage Authority v. Corporation des Pilotes du Saint-Laurent Central Inc., 2018 FCA 117 at paragraph 62 as follows:[62] The replication principle in essence involves asking which party’s position is the more reasonable. This is measured with reference to issues such as: the parties’ bargaining history and prior patterns of conduct; the demonstrated need for a clause requested; at least in the private sector, the employer’s economic viability; and the prevalence of similar provisions in other comparable agreements. These issues are the daily diet of labour adjudicators but are rarely ones that a court is called upon to examine. [3] The Supreme Court in C.U.P.E. v. Ontario (Minister of Labour), 2003 SCC 29 at paragraph 53, distinguished grievance arbitration, which involves interpreting a previously agreed upon collective agreement, from interest arbitration, and noted that "“[the] former is adjudicative”" whereas "“the latter is more or less legislative.”" Our Court later observed in Public Service Alliance of Canada v. Canada (House of Commons), 2023 FCA 110 at paragraph 8 that:"“[...] interest arbitrators are afforded wide discretion to settle the terms of the parties’ collective agreement, and the decisions they make are almost always policy determinations and rarely involve legal issues. Additionally, this Court has recognized that the need for finality, which animates the need for deference in labour cases generally, is particularly acute in interest arbitration cases” (""Laurentian Pilotage Authority v. ""Pilotes du Saint-Laurent Central Inc., ""2018 FCA 117"", ""299 A.C.W.S. (3d) 235"" at paras. ""60-61"", 63)." . Labourers’ International Union of North America, Local 3000 v. Primacare
In Labourers’ International Union of North America, Local 3000 v. Primacare (Div Court, 2023) the Divisional Court refers to the Hospital Labour Disputes Arbitration Act and it's procedures:[4] Employees of an Ontario hospital (defined to include a long-term care home) are not permitted to go on strike and are not subject to lock out: Hospital Labour Disputes Arbitration Act, R.S.O. 1990, c. H.14 (“HLDAA”), ss. 1(1), 11(1). Instead, unresolved disputes between hospitals and their unionized employees are determined through interest arbitration in accordance with HLDAA.
[5] Since 2004, the applicant has represented a bargaining unit of approximately 200 employees of Henley House, consisting of Registered Practical Nurses (RPNs), Personal Support Workers (PSWs) and dietary, housekeeping, laundry and recreational employees, leading to an initial collective agreement and subsequent renewal agreements. An interest arbitration determined the terms of the parties’ collective agreement for the two years ended November 30, 2017: see Henley House Long Term Care Facility v. Ontario Federation of Health Care Workers, Liuna Local 1110, 2017 CanLII 34808 (Ont. L.A.). The parties themselves agreed to the terms of their next collective agreement, the term of which ended on November 30, 2019.
[6] In June 2020 and April 2021, the parties engaged in negotiation and reconciliation to settle the terms of their subsequent collective agreement, covering the two years ended November 30, 2021. They were unable to reach an agreement on all issues. An interest arbitration board consisting of a union nominee, an employer nominee and a neutral chair (the “Board”) was then appointed to determine the outstanding bargaining issues. The Board received the parties’ evidence and submissions at a hearing by video conference on September 3, 2021.
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[10] In that passage, the Chair refers to the replication principle, which has been described in previous case law as “a core principle in interest arbitration” under which “the arbitrator should seek to replicate the agreement that the parties would have achieved if they had bargained freely”, applying “objective criteria in preference to the subjective self-imposed limitations of the parties, in formulating an award”: see Ontario Nurses’ Association. v. Burloak Long Term Care Home, 2022 ONSC 4098 (Div. Ct.), at para. 15.
[11] The “statutory criteria” that the Chair refers to are set out in ss. 9(1) and (1.1) of HLDAA, as follows:9 (1) The board of arbitration shall examine into and decide on matters that are in dispute and any other matters that appear to the board necessary to be decided in order to conclude a collective agreement between the parties …
(1.1) In making a decision or award, the board of arbitration shall take into consideration all factors it considers relevant, including the following criteria:1. The employer’s ability to pay in light of its fiscal situation.
2. The extent to which services may have to be reduced, in light of the decision or award, if current funding and taxation levels are not increased.
3. The economic situation in Ontario and in the municipality where the hospital is located.
4. A comparison, as between the employees and other comparable employees in the public and private sectors, of the terms and conditions of employment and the nature of the work performed.
5. The employer’s ability to attract and retain qualified employees. ....
[28] Previous case law consistently indicates that on judicial review, a court owes significant deference to an interest arbitration award, given the nature of interest arbitration. For example, in Service Employees International Union v. The Participating Nursing Homes, 2013 ONSC 4650 (Div. Ct.), at paras. 11-13, the court states as follows:11. An interest arbitrator applies the criteria set out in HLDAA in order to arrive at the terms of a collective agreement for the parties, a statute with which interest arbitrators in hospital labour disputes have particular familiarity.
12. As well, interest arbitrators exercise a broad discretion, as they are not interpreting a collective agreement, as do rights arbitrators. Rather they are settling the terms of the agreement, a task that has been said to be analogous to a legislative function in which arbitrators draw on their labour relations expertise (Canadian Union of Public Employees (C.U.P.E.) v. Ontario (Minister of Labour), 2003 SCC 29 (CanLII), [2003] 1 S.C.R. 539 at para. 53).
13. Accordingly, a high degree of deference is to be accorded to the arbitrator’s application of the factors in s. 9(1.1) and to his or her conclusions about the appropriate terms of the collective agreement. [29] In previous cases, the reviewing court has deferred to an interest arbitration award even when the court describes the reasons provided as “sketchy” or “very brief indeed”: see Ross Memorial Hospital v. Canadian Union of Public Employees, Local 1909, 2007 CanLII 39896 (Ont. Div. Ct.), at para 6; St. Gabriel’s Villa of Sudbury v Ontario Nurses’ Association, 2015 ONSC 3459 (Div. Ct.), at para 13. In the latter case, the court found the reasons to be sufficient “taking account of the [legislative] nature of the process, the evidence, submissions, issues and the reasons of the Board”.
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[40] An interest arbitration board plays an important role in labour relations in Ontario but the scope of its authority is circumscribed. Its role is aptly described by the board chair in Pembroke (City of) v. Pembroke Professional Fire Fighters’ Association, 2000 CanLII 29504 (Ont. L.A.), as follows:First and foremost, as a Board of Arbitration resolving an interest dispute, the task is to try to replicate collective bargaining as closely as possible…The task of an interest board of arbitration is not to impose terms and conditions that seem attractive or even fair to the board of arbitration. Instead, the task of a board of arbitration is to design a collective agreement that comes as close as possible to what the parties could have expected if they had been forced to impasse. [Emphasis added.]
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