The Supreme Court in the Horrocks Decision Provides Much Needed Guidance when Labour Arbitrators Have Exclusive Jurisdiction Over Human Rights Complaints in a Unionized Workplace
Introduction:
The Supreme Court of Canada in Northern Regional Health Authority v. Horrocks 2021 SCC 42 ("Horrocks") recently confirmed that, subject to express legislative intent to the contrary, where labour legislation provides for the final settlement of disputes arising from a collective agreement, the jurisdiction of the labour arbitrator empowered by that legislation is exclusive. In doing so, it provided a two-part legal test to resolve jurisdictional disputes between labour arbitrators and competing statutory tribunals.
Facts
Linda Horrocks worked for the Northern Regional Health Authority ("NRHA") in Manitoba and as a member of the employer's union was subject to the terms and conditions of employment contained in the collective agreement. In 2011, Ms. Horrocks was suspended from her employment after she attended work under the influence of alcohol. She disclosed to NRHA that she had an addiction to alcohol, which constituted a "disability" under Manitoba's Human Rights Code (the "Code").
NRHA presented Ms. Horrocks with a Last Chance Agreement requiring her to abstain from alcohol and participate in addiction treatment; however, she declined to enter the Last Chance Agreement and her employment was terminated. The union filed a grievance and Ms. Horrocks was reinstated after she agreed to enter an Abstinence Agreement. Shortly after, Ms. Horrocks was terminated for an alleged breach of the Abstinence Agreement. The union did not file a grievance in regard to the termination, but Ms. Horrocks filed a complaint with the Manitoba Human Rights Commission (the Commission") under the Code taking the position that the NRHA had failed to accommodate her disability.
Turf Wars: Conflicting Decisions and Ensuing Confusion
Ms. Horrock's complaint was heard by an adjudicator appointed under the Code. Although the NRHA took the position at the hearing that the dispute fell within the exclusive jurisdiction of a labour arbitrator appointed under the collective agreement, the adjudicator disagreed and concluded that the essential character of Ms. Horrock's complaint was an alleged human rights violation. Therefore, the adjudicator had jurisdiction to hear the complaint and, after considering its merits, held that the NRHA discriminated against Ms. Horrocks under the Code.
NRHA filed an application for judicial review of the Commission's decision with the Manitoba Queen's Bench. The judge disagreed with the adjudicator and held that the essential character of the dispute was whether the NRHA had just cause to terminate Ms. Horrock's employment and any human rights violation fell within the exclusive jurisdiction of the labour arbitrator appointed under the collective agreement. Put another way, the Commission lacked jurisdiction to decide the matter.
On appeal of the lower court decision, the Manitoba Court of Appeal agreed with the judge's conclusion that disputes relating to the termination of a unionized worker fell within the exclusive jurisdiction of a labour arbitrator, including when a human rights violation was alleged. Nevertheless, the appellate court allowed the appeal and held that the Commission had jurisdiction over Ms. Horrock's complaint for several reasons, including that she did not grieve her second termination, the discrimination claim raised issues that went beyond the specific employment context, and the union was not interested in pursuing the dispute before a labour arbitrator.
The Supreme Court of Canada and the Two Part Legal Test
The Supreme Court of Canada held that the Commission did not have jurisdiction over Ms. Horrock's complaint because jurisdiction exclusively lay with the labour arbitrator in accordance with the collective agreement and Manitoba's Labour Relations Act (the "LRA"). In reaching this decision, the Court set out a two-step test to resolve jurisdictional disputes between labour arbitrators and competing statutory tribunals including, in particular, the Commission under the Code.
Step One: The relevant labour legislation must be examined to determine whether it grants exclusive jurisdiction to the arbitrator and, if so, over what matters. It is important to note that where the labour legislation includes a mandatory dispute resolution clause, a labour arbitrator has exclusive jurisdiction to decide all disputes arising from the collective agreement, subject to clearly expressed legislative intent to the contrary.
In this case, the Supreme Court of Canada observed that the LRA at section 78 contained a mandatory dispute resolution clause, which it found grants exclusive jurisdiction to the labour arbitrator over all disputes arising from the collective agreement. Section 78(1) of the LRA reads as follows: "Every collective agreement shall contain a provision for final settlement without stoppage of work, by arbitration or otherwise, of all differences between the parties thereto, or persons bound by the agreement or on whose behalf it was entered into, concerning its meaning, application, or alleged violation." In this case, the parties chose grievance arbitration as the sole dispute resolution mechanism under the collective agreement, and this mechanism was binding on the parties.
The Supreme Court of Canada emphasized that the mere existence of a competing tribunal, such as the Commission, will not displace labour arbitration as the sole forum for disputes arising from the collective agreement. Instead, consideration must be given as to whether the competing legislation demonstrates an express intention to displace the labour arbitrator's exclusive jurisdiction. While the Court acknowledged in Horrocks that the Code at section 22(1) provides that any person may file a complaint alleging that another person is contravened the Code, and at sections 26 and 29(3) directs the Commission to investigate complaints and, where appropriate, request the designation of an adjudicator to hear the complaint, it held that this did not expressly displace the exclusive jurisdiction of the labour arbitrator at section 78 of the LRA. Accordingly, the Supreme Court of Canada concluded that labour arbitrators have exclusive jurisdiction pursuant to the LRA over claims that arise, in their essential character, from the interpretation, application or alleged violation of a collective agreement.
Step Two: If the legislation grants the labour arbitrator exclusive jurisdiction, then a determination must be made as to whether the dispute falls within the scope of the arbitrator's exclusive jurisdiction. Such jurisdiction will extend to all disputes that arise, in their essential character from the interpretation, application or alleged violation of the collective agreement. This requires an analysis of both the terms of the collective agreement and the facts alleged in the dispute.
In Horrocks, the Supreme Court of Canada observed that the dispute concerned the NRHA's response to Ms. Horrock's attendance at work under the influence of alcohol, including its requirement that she sign an Abstinence Agreement and its termination of her employment after she breached that agreement. The Court also noted that the collective agreement included a management rights clause, and the collective agreement expressly limited the employer's rights under this clause with a prohibition on discrimination. Consequently, the Supreme Court of Canada held that the essential character of Ms. Horrock's complaint was that the NRHA exercised its management rights in a manner inconsistent with the express and implicit limits on those rights set out in the collective agreement, and the adjudication of the Ms. Horrock's claim was in the exclusive jurisdiction of the labour arbitrator.
Key Takeaways for Unionized Employers
According to Horrocks, where labour legislation provides for the final settlement of disputes that arise, in their essential character, from the interpretation, application, or alleged violation of the collective agreement (as in the LRA) then the presumption will be that labour arbitrators have exclusive jurisdiction over such disputes. However, the presumption of exclusivity will be rebutted where competing legislation demonstrates the legislature's express an intention to displace the arbitrators' exclusive jurisdiction (e.g. by expressly granting exclusive or concurrent jurisdiction over a dispute of a particular nature to a competing tribunal). Further, even if the labour legislation grants the labour arbitrator exclusive jurisdiction, then a determination must be made as to whether the dispute at issue falls into the scope of the arbitrators jurisdiction as described in the labour legislation.
Unionized employers both inside and outside of Manitoba must be careful not to draw overly broad conclusions based on Horrocks. For example, in Manitoba consideration must be given whether other administrative tribunals competing legislation expressly displace the labour arbitrator's exclusive jurisdiction over disputes that arise, in their essential character, from the interpretation, application or alleged violation of the collective agreement and/or whether the dispute falls within the scope of the LRA's mandatory dispute resolution clause. As for jurisdictions outside of Manitoba, consideration must be given whether labour legislation contains a mandatory dispute resolution clause and, if so, whether human rights or other competing statutory tribunal legislation expressly displaces the exclusive jurisdiction of the labour arbitrator. Finally, consideration must be given whether the dispute at issue falls within the exclusive jurisdiction of the labour arbitrator.
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