Published on Dec. 18, 2021

Updated on Sep. 18, 2024

(By Paula Knopf, a labour relations and dispute resolution arbitrator and mediator and member of the NAA.)

The Supreme Court of Canada has continued its pattern of declaring that any issues arising out of the application, violation, enforcement or interpretation of collective agreements fall within the “exclusive” jurisdiction of labour arbitrators, thereby leaving labour disputes out of the realm of the courts.

The pattern began with the case of Weber v. Ontario Hydro[1] in 1995 when the Court adopted an “exclusive jurisdiction” model for labour arbitration.  The Court ruled that where the essential character of a dispute in a unionized workplace is a difference that arises, expressly or inferentially from the collective agreement, it must be resolved by arbitration. The exclusive jurisdiction of arbitrators was further clarified (or arguably expanded) by the Supreme Court in 2003 when it ruled that the rights and obligations of the Human Rights Code and other “employment related statutes” are deemed to be incorporated into collective agreements, thereby giving arbitrators the jurisdiction to interpret and apply these statutory provisions as if they were parts of the parties’ contracts[2].

In the most recent case before the Supreme Court of Canada, Northern Regional Health Authority v. Horrocks[3], the Court addressed what had previously been accepted as arbitrators’ and human rights tribunals’ “concurrent jurisdiction” over human rights disputes arising out of unionized workplaces.

Ms Horrocks had been suspended after reporting for work under the influence of alcohol and she then disclosed the fact that she was addicted to alcohol.  When she refused to accept any rehabilitative or abstinence measures, she was terminated.  She filed a discrimination complaint with the Manitoba Human Rights Commission, a tribunal with jurisdiction over allegations of discrimination based on disability, which would include addiction.  The employer challenged the Commission’s jurisdiction.  Prior to the Horrocks ruling, it was assumed that an employee could pursue a complaint through arbitration and/or take their case to a human rights tribunal.  If an employee tried to access both forums, the tribunals consistently deferred to arbitration.

With the Horrocks decision, it appears that concurrent jurisdiction may no longer be recognized where arbitration is statutorily mandated to resolve labour disputes. The Supreme Court declared:

[39] . . . . resolving jurisdictional contests between labour arbitrators and competing statutory tribunals entails a two‑step analysis. First, the relevant legislation must be examined to determine whether it grants the arbitrator exclusive jurisdiction and, if so, over what matters. . . . Where the legislation includes a mandatory dispute resolution clause, an arbitrator empowered under that clause has the exclusive jurisdiction to decide all disputes arising from the collective agreement, subject to clearly expressed legislative intent to the contrary.

In the case of Ms Horrocks, the Supreme Court concluded that the essential character of her complaint was the allegation that the employer had violated the collective agreement in the exercise of its management’s rights to terminate her. The Court then declared that arbitrators’ have exclusive authority over claims that arise, in their essential character, from the interpretation, application or alleged violation of the collective agreement and, more particularly, that such claims are excluded from human rights tribunals, unless legislation prescribes otherwise.

This decision has come as a surprise to many observers.  Questions have arisen.  If arbitration is now the exclusive forum for human rights complaints, what will happen if a union declines to file or process a discrimination grievance to arbitration on behalf of a bargaining unit member?  Prior to this decision, the person could have taken their complaint directly to the provincial human rights tribunal.  Will their only recourse now be to file a complaint with a Labour Relations Board, where the issue would become an allegation against the union for its failure to live up to its duty of fair representation?  The Supreme Court addressed this question in passing with the following comments: “[this] can be undone by clearly expressed legislative intent to the contrary” and the situation “is a product of the union’s statutorily granted monopoly on representation”.

It is interesting to note that while the Supreme Court of Canada seems to have created and protected the concept of arbitrators’ “exclusive jurisdiction” over issues arising from collective agreements, the statutes that mandate arbitration as a mandatory dispute resolution forum do not use the term “exclusive”.  In fact, the Manitoba Labour Relations Act that governed the Horrocks case provides:

78(1) 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.

Interesting, the Manitoba statute does not appear to make arbitration the only dispute resolution model. It calls for disputes to be settled “by arbitration or otherwise”.  In contrast, the Ontario Labour Relations Act that applied to both the Weber and the Parry Sound cases provides:

48 (1) Every collective agreement shall provide for the final and binding settlement by arbitration, without stoppage of work, of all differences between the parties arising from the interpretation, application, administration or alleged violation of the agreement, including any question as to whether a matter is arbitrable.

Arguably, the  Ontario statute may be more clear, making arbitration the only dispute resolution mechanism for “all differences” arising from collective agreements.  On the other hand, it has been suggested that the Horrocks decision will apply only in Manitoba and may have no application in other provinces where “forum shopping” may continue if concurrent jurisdictions continue to be recognized.

Only time and more litigation will determine the impact of the Horrocks decision.  However, it must be acknowledged that the Supreme Court of Canada’s latest decision can be seen as an endorsement of labour arbitration and a recognition of the ability and expertise of labour arbitrators to resolve all the issues that arise under the parties’ collective agreements.