A-222-77
Canadian Pacific Limited (Appellant)
v.
United Transportation Union (Respondent)
Court of Appeal, Heald, Urie and Ryan JJ.—
Ottawa, December 15, 1977 and March 21, 1978.
Jurisdiction — Labour relations — Labour contract involv
ing railway — Contract subject to Maintenance of Railway
Operations Act, 1973 — Whether action within Court's juris
diction being based on Canada Labour Code and Maintenance
of Railway Operations Act, 1973, or whether action merely
concerned with interpretation of contract under provincial law,
or whether contract exclusively assigned jurisdiction to Arbi
trator because of joint effect of arbitration clause and s. 155 of
the Canada Labour Code — Federal Court Act, R.S.C. 1970
(2nd Supp.), c. 10, s. 23 — Canada Labour Code, R.S.C. 1970,
c. L-1, ss. 154, 155 — Maintenance of Railway Operations
Act, 1973, S.C. 1973-74, c. 32, ss. 13(2), 15, 16.
Appellant appeals Trial Division's decision to dismiss appel
lant's action for want of jurisdiction. The action appears to be
one in relation to labour relations in a work or undertaking
connecting provinces or extending beyond the limits of a prov
ince. Appellant submits that its claims were made under either
the Canada Labour Code or the Maintenance of Railway
Operations Act, 1973. Respondent, however, argues that the
action involves simply the interpretation of collective agree
ments and as agreements between subjects, an area of contract
law not within the scope of the term "laws of Canada".
Alternatively, respondent contends that the arbitration clause,
read with section 155 of the Canada Labour Code, exclusively
assigned jurisdiction to the Arbitrator.
On June 25, 1971 the parties entered into two collective
agreements for Eastern and Western Regions which expired
December 31, 1972. The revision of the agreements was the
subject of a Conciliation Board report in August 1973. Due to a
strike that year by other railway employees, Parliament enact
ed the Maintenance of Railway Operations Act, 1973 which
extended the collective agreements to include the period begin
ning January 1, 1973 and ending when new collective agree
ments came into effect or on December 31, 1974, whichever
occurred earlier. The Act also provided for the appointment of
an Arbitrator to resolve the issues.
Following the Arbitrator's report in January 1974, the par
ties entered into collective agreements which left open the
"crew consist issue", among others, until decided by the Arbi
trator. The Arbitrator reached his decision on December 3,
1974, but only made his decision on the "crew consist issue"
public on January 8, 1975. The Court of Appeal dismissed the
Union's section 28 application to review and set aside the award
on the ground that it was a purely academic issue because the
effect of the award had been spent. The parties have since
entered into collective agreements covering the period from
January 1, 1976 to December 31, 1977, but these do not revise
or refer to the "crew consist issue".
Held, the appeal is dismissed. For purposes of section 23 of
the Federal Court Act, the claims in this action were brought
under a statute of the Parliament of Canada because they were
brought in respect of collective agreements deriving their legal
character from the Canada Labour Code. This dispute—the
"crew consist issue"—presented an immediate problem raising
a question of interpretation, and as such falls within the
Canadian Railway Arbitration Agreement. It was an apt ques
tion for direct submission to the Arbitrator in accordance with
the procedure provided in the Arbitration Agreement itself.
The selection, by the parties, of arbitration as the means of
final settlement did constitute a special assignment of jurisdic
tion to determine the issues imposed by the present action. This
case deals with collective labour agreements, not commercial
contracts, in respect of which the Canada Labour Code directs
that there shall be final settlement of disputes arising under its
terms by arbitration, or otherwise, as determined by agreement
of the parties, or by the Canada Labour Relations Board on
application. The parties selected arbitration. The Canada
Labour Code provisions relating to the settlement of disputes
arising in collective agreements indicate a very different policy
from the policy, in the law dealing with commercial contracts,
against permitting the parties to oust the jurisdiction of the
courts by providing for settlement by arbitration.
Quebec North Shore Paper Co. v. Canadian Pacific Ltd.
[1977] 2 S.C.R. 1054, distinguished. McNamara Con
struction (Western) Ltd. v. The Queen [1977] 2 S.C.R.
654, distinguished. Howe Sound Co. v. International
Union of Mine, Mill and Smelter Workers (Canada),
Local 663 [1962] S.C.R. 318, distinguished. McGavin
Toastmaster Ltd. v. Ainscough [1976] 1 S.C.R. 718,
distinguished.
APPEAL.
COUNSEL:
C. R. O. Munro, Q. C. and T. J. Maloney for
appellant.
M. W. Wright, Q.C. and J. L. Shields for
respondent.
SOLICITORS:
Law Department, Canadian Pacific Limited,
Montreal, for appellant.
Soloway, Wright, Houston, Greenberg,
O'Grady, Morin, Ottawa, for respondent.
The following are the reasons for judgment
rendered in English by
RYAN J.: This is an appeal by the appellant,
Canadian Pacific Limited (in these reasons
referred to as "Canadian Pacific"), from a judg
ment of the Trial Division [ [ 1977] 2 F.C. 712]
delivered on April 1, 1977, dismissing an action by
Canadian Pacific against the respondent, United
Transportation Union (referred to as "the Union")
on the ground that the Court lacked jurisdiction.
Resolution of the jurisdictional issue depends on
whether the action is one brought pursuant to
jurisdiction vested in the Trial Division by section
23 of the Federal Court Act', R.S.C. 1970 (2nd
Supp.), c. 10, and whether, if it is such an action,
the jurisdiction of the Court is ousted by the
closing words of section 23, the words "... except
to the extent that jurisdiction has been otherwise
specially assigned".
The action has to do with the interpretation or,
as the appellant would have it, the contents of
certain collective agreements between the parties,
one of which, Canadian Pacific, is an interprovin-
cial carrier. It thus appears to be an action in
relation to labour relations in a work or undertak
ing connecting provinces or extending beyond the
limits of a province. Canadian Pacific submitted
that the claims for relief sought by it were made
either under the Canada Labour Code 2 or under
the Code and the statute entitled the Maintenance
of Railway Operations Act, 1973 3 (sometimes
referred to in these reasons as the "Special Act").
The Union's response was that the action was
' Section 23 of the Federal Court Act provides:
23. The Trial Division has concurrent original jurisdiction
as well between subject and subject as otherwise, in all cases
in which a claim for relief is made or a remedy, is sought
under an Act of the Parliament of Canada or otherwise in
relation to any matter coming within any following class of
subjects, namely bills of exchange and promissory notes
where the Crown is a party to the proceedings, aeronautics,
and works and undertakings connecting a province with any
other province or extending beyond the limits of a province,
except to the extent that jurisdiction has been otherwise
specially assigned.
2 R.S.C. 1970, c. L-1, as amended.
3 S.C. 1973-74, c. 32.
simply one involving the interpretation of collec
tive agreements, agreements between subjects, a
dispute which was susceptible of resolution by the
principles and rules of the law of contract, princi
ples and rules that are not within the scope of the
term "laws of Canada" as that term has been
construed by the Supreme Court of Canada in
recent decisions'. The alternative submission of
the Union was that, even if the claims were
brought under a law of Canada, the effect of the
arbitration clause in the collective agreements in
question, read in conjunction with section 155 of
the Canada Labour Code, was that the jurisdiction
in relation to the claims had been otherwise spe
cially assigned: it had been assigned exclusively to
the Arbitrator.
The factual background to the present action is
rather complicated.
On June 25, 1971, Canadian Pacific and the
Union entered into two collective agreements, one
in respect of the Pacific and Western Region of
the railway, the other in respect of the Eastern and
Atlantic Region. These agreements were to expire
on December 31, 1972. The revision of the agree
ments for the period beginning January 1, 1973
was the subject of conciliation, and the Concilia
tion Board reported in August 1973. Certain
Canadian Pacific employees then went out on
strike. The employees represented by the Union
were not involved in the strike. The operations of
the railway ceased. Parliament passed the Mainte
nance of Railway Operations Act, 1973. Canadian
Pacific was required to resume operations and the
employees were required to resume work. The
collective agreements between Canadian Pacific
and the Union, which had expired, were extended
to include the period beginning January 1, 1973
and ending when new collective agreements came
into effect or on December 31, 1974, whichever
was earlier'.
a Quebec North Shore Paper Company v. Canadian Pacific
Limited [1977] 2 S.C.R. 1054, and McNamara Construction
(Western) Limited v. The Queen [1977] 2 S.C.R. 654.
5 Subsection 13(2) of the Maintenance of Railway Opera
tions Act, 1973,
13. ...
(2) The term of each collective agreement to which this
Part applies is extended to include the period beginning
The Governor in Council was authorized by the
Act to appoint an arbitrator, and to refer to him,
by order, the matters relating to amendment or
revision of the collective agreements that remained
in dispute at the time the order was made 6 . Any
decision of the arbitrator, made pursuant to such a
reference, was deemed to be incorporated in the
collective agreements between Canadian Pacific
and the Union, and the collective agreements, as
amended, were made effective for such period
ending not earlier than December 31, 1974, as
might be fixed by the arbitrator'.
The Honourable Emmett M. Hall was appoint
ed Arbitrator. Among the disputes between
Canadian Pacific and the Union that were referred
to him was what came to be known as the "crew
consist issue". Canadian Pacific had made a
"demand" on the Union for inclusion in the collec-
January 1, 1973 and ending on the day on which a new
collective agreement in amendment or revision thereof comes
into effect, or on December 31, 1974, whichever is the
earlier.
6 Subsections 16(1) and (2) of the Act are in these terms:
16. (1) Upon receipt by the Minister of Labour of a report
of a mediator under subsection 15(4), or where the Minister
of Labour does not appoint a mediator under subsection
15(1), (2) or (3), the Governor in Council may, on the
recommendation of the Minister of Labour, appoint an
arbitrator.
(2) The Governor in Council may, by order, refer to an
arbitrator appointed under subsection (1) all matters relating
to the amendment or revision of a collective agreement to
which Part I, II or III applies that, at the time the order is
made, are in dispute between the parties thereto and provide
for the form in which any decision of the arbitrator shall be
set forth.
Section 15 of the Act authorized the appointment of mediators
by the Minister of Labour.
7 Subsection 16(4) of the Act provides:
16. ...
(4) In the event that an arbitrator is appointed under
subsection (1) and decides any matter not agreed upon at the
time of his decision between the parties to a collective
agreement to which Part I, II or III, as the case may be,
applies, such collective agreement shall be deemed to be
amended by the incorporation therein of such decision and
the collective agreement as so amended thereupon constitutes
a new collective agreement in amendment or revision of the
collective agreement to which Part I, II or III, as the case
may be, applies effective for such period ending not earlier
than December 31, 1974 as may be fixed by the arbitrator.
tive agreements of a procedural clause for the
purpose of determining in specific cases whether
the number of employees employed on a freight
train caboose should be reduced from two to one.
The Union resisted this demand.
The Honourable Mr. Hall made a report dated
January 16, 1974. In respect of the crew consist
issue, he decided that operations with reduced
crews should be tested before he reached a deci
sion on the question. He said:
Pending June 30 I will retain jurisdiction over this rule
change item as I have already done in connection with the job
security item. After July 1, 1974, I will fix a time and place to
hear representatives and will then issue an order or award and
subject to such conditions as the circumstances will then justify.
Meanwhile the status quo will be maintained.
Canadian Pacific and the Union entered into
agreements on February 1, 1974 to give effect to
Mr. Justice Hall's January 16 award, one in rela
tion to the Atlantic and Eastern Region, the other
to the Prairie and Pacific Region. They were iden
tical in all material respects. Each contained this
clause:
Reduction of Crew Consist in All Classes of Freight Service
The Company's demand—Reduction of Crew Consist in All
Classes of Freight Service—shall be dealt with in the manner
specified in the Report of the Arbitrator—Railways Arbitration
1973—dated January 16, 1974.
Mr. Justice Hall heard further representations
concerning the crew consist issue during the
summer of 1974, as he had indicated he would.
The events that followed the hearings are set out in
the agreement between the parties as to the facts,
an agreement prepared for the purposes of this
case. I quote this extract (references to the plain
tiff are, of course, references to Canadian Pacific,
and to the defendant are references to the Union):
On December 3, 1974 the Honourable Emmett M. Hall, the
Arbitrator referred to as such in the pleadings herein, (herein-
after referred to as "the Arbitrator"), reached a decision on the
four matters reserved by his award of January 16, 1974,
namely, the job security issue, application of job security plan
to wharf employees, the contracting out issue and the crew
consist issue, signed an award in respect thereto and forwarded
the same to the Federal Department of Labour for communica
tion to the parties.
On or about December 3, 1974 officers of the Defendant were
informed by an official in the Department of Labour that the
said award was more favourable to the Railways than to the
Union.
In the early part of November, 1974 negotiations with respect
to the conclusion of new collective agreements between the
Defendant and the major Canadian Railways, including the
Plaintiff, had advanced to the stage where tentative agreement
had been reached as to their terms, subject only to ratification
by the membership. The Defendant was then in the process of
conducting a referendum by ballot of its members across
Canada with respect to such ratification.
On or about the 5th day of December, 1974 an official of the
Defendant expressed concern both to the Arbitrator and to an
official of the Department of Labour that publication of an
unfavourable award at that particular time might influence
adversely the outcome of the ratification vote and that that
result could be avoided by the postponement of the publication
of the award for a brief period until after the ballot had been
taken. As a result of those representations to the Arbitrator by
the Defendant the Arbitrator consulted with the Department of
Labour and it was decided between them that to satisfy the
Defendant's representations in that behalf the award dated
December 3, 1974 should be broken into two parts, the one
containing the award as to the job security issue, application of
job security plan to wharf employees and the contracting out
issue, for publication in due course, and the other, relative to
the crew consist issue, for publication early in the new year.
Consequently an award bearing date December 9, 1974 was
published on or about that date with respect to the first three
issues mentioned above and a separate award with respect to
the crew consist issue bearing date January 8, 1975 was
published on or about that date.
The award bearing date January 8, 1975 was in all respects the
same award as that comprehended in the unpublished award
dated December 3, 1974 and would have been published with
the award bearing date December 9, 1974 except for the
representations made to the Arbitrator as hereinbefore stated.
Mr. Justice Hall's award as to the crew consist
issue was made public on January 8, 1975. Its
effect was that Canadian Pacific would be permit
ted to reduce the crew on freight trains in certain
cases. It also provided a procedural rule for other
cases.
It should be noted at this point that, on Decem-
ber 11, 1974, Canadian Pacific and the Union
executed a memorandum of agreement in respect
of each region. The memoranda, under the head
ing DURATION OF AGREEMENT, provided:
This Agreement is effective January 1, 1975 and supersedes all
previous agreements, rulings or interpretations which are in
conflict therewith. It will remain in effect until December 31,
1975 and thereafter until revised or superseded subject to three
months' notice by either party after September 30, 1975.
These memoranda contain provisions in relation to
such matters as wage rates, annual vacations, yard
crews, vacations with pay, and health and welfare.
They contain no specific reference either to arbi
tration or to crew consist. It is clear that the
agreements in existence immediately before the
memoranda were executed on December 11, 1974
were to continue into 1975 as the terms of the new
agreements except to the extent varied by the
terms of the memoranda. It is the submission of
Canadian Pacific that Mr. Justice Hall's crew
consist award, made (it was submitted) early in
December 1974, and published on January 8,
1975, became part of the collective agreements
which were in force in 1974 at the time the crew
consist award was made. This was so, it was
argued, by virtue of subsection 16(4) of the Spe
cial Act. The crew consist award, it was said,
continued in the 1975 agreements because it was
not inconsistent with the terms of the agreements
which were made on December 11, 1974 and
which became effective on January 1, 1975.
After Mr. Justice Hall's crew consist award was
announced in January 1975, the Union applied to
the Federal Court of Appeal under section 28 of
the Federal Court Act seeking to have the arbitra
tion award set aside. The events that transpired in
respect of the section 28 application are set out in
the agreed statement of facts as follows (the appli
cant in the section 28 application was, of course,
the Union, and the respondents were Canadian
Pacific and the Canadian National Railway
Company):
The application was heard on the 8th and 9th days of July,
1975. The fact that the award was dated and published after
December 31, 1974 was not a ground relied on by the Appli
cant (Defendant in this action) either in its Memorandum of
Points of Argument filed therein or in argument by its counsel.
On the second day of the hearing during the address of counsel
for the Applicant in reply the Federal Court of Appeal, from
the Bench, ex proprio motu, expressed itself in the following
terms:
The award attacked in these proceedings does not appear to
the Court to affect operations of the Railways or collective
agreements relating thereto after the end of 1974. Its effect,
if it ever had any appears to be spent. The Court is therefore
not satisfied that the issues raised are other than purely
academic or that there is any relief that the Court can give.
Thereupon, at the request of counsel for the Applicant the
matter was adjourned to be brought on again for further
hearing by the Applicant or the Respondents. Counsel for the
Applicant brought this situation immediately to the attention of
the Arbitrator.
Following consultations between counsel for the Applicant and
counsel for the Respondents in the said Section 28 application
the matter was brought on for further hearing on the 3rd, day
of September, 1975 when counsel for the Plaintiff (Respondent
in the said application), with the agreement of counsel for the
Applicant, attempted to file several documents including copies
of exhibits 12, 13, 22, 23, 27 and 28 and the attachments to
exhibit 24 in the examination for discovery referred to in
paragraph A hereof.
The Federal Court of Appeal refused to admit or consider the
proffered material and reiterated its former observation that
the issues raised by the S. 28 application were academic and on
calling upon counsel for the Applicant to express his attitude
thereto he agreed to the application being dismissed. Thereupon
the Court dismissed the S. 28 application.
Following the dismissal of the section 28
application seeking to have the crew consist award
of the Arbitrator set aside, Canadian Pacific and
the Canadian National Railway Company
informed the Union that they proposed to imple
ment the award. The position taken was that the
dismissal of the section 28 application meant that
the award must be taken as having been validly
made. It is understandable that the Union rejected
this assumption. The companies also took the posi
tion that the 1975 collective agreements, made by
the parties on December 11, 1974, included the
terms of the Arbitrator's crew consist award. The
position taken was that, even if the award expired
in respect of its statutory validity at the end of
1974, it ` nonetheless had been adopted by the
parties as a matter of contract and was thus a term
of the 1975 collective agreements. In a letter dated
September 12, 1975, the Union, through its coun
sel, denied that the crew consist award had become
a term of the 1975 agreements, and stated that its
implementation by the railways would be resisted
and opposed.
Canadian Pacific commenced the present action
in the Trial Division on November 5, 1975, seeking
a declaration that the terms of the crew consist
award were part of the then current agreements
between Canadian Pacific and the Union.
New memoranda of agreement were executed
on July 21, 1976. These memoranda provided that
the current collective agreements should be revised
in accordance with the terms of the memoranda.
The memoranda provided that the agreements
made by them should be effective on January 1,
1976. It was provided, as previous memoranda had
done, that they would supersede all previous agree
ments which were in conflict with them. It was
also provided that the new agreements would
remain in effect until December 31, 1977, and
thereafter until revised or superseded subject to
three months' notice by either party after Septem-
ber 30, 1977. Before the trial of the action, the
statement of claim was amended so as to cover the
two new agreements running from January 1, 1976
to December 31, 1977.
The action was dismissed and this appeal was
taken.
It was submitted by the appellant that the
action which claimed a declaration that the crew
consist award was a term of the 1975 and the
subsequent collective agreements was an action
claiming relief or a remedy under a statute of the
Parliament of Canada because the collective
agreements which were the subject matter of the
action derived their character as legal instruments
from the Canada Labour Code. Thus the action
was properly brought under the authority con
ferred on the Trial Division by section 23 of the
Federal Court Act.
It is, of course, obvious that a relief or remedy is
sought under a statute if it is a relief or remedy
specifically provided in the statute. But, it was
submitted, a remedy or relief is also sought under
a statute if a cause of action is based on legal
obligations deriving their force from the terms of
the statute. In this case, the remedy sought is a
remedy in respect of collective agreements that
would be devoid of legal obligation if it were not
for the Canada Labour Code.
Because of its certification and of the rights
acquired by and the duties imposed on it by the
Code, the Union acquired status to enter into the
collective agreements as an entity 8 . The collective
agreements are expressly made binding on the
parties to them, and on employees within the
bargaining unit, by virtue of section 154 of the
Canada Labour Code, which provides:
154. A collective agreement entered into between a bargain
ing agent and an employer in respect of a bargaining unit is,
subject to and for the purposes of this Part, binding upon
(a) the bargaining agent;
(b) every employee in the bargaining unit; and
(c) the employer.
Other sections of the Code regulate in some
respects the terms of collective agreements and
their duration 9 .
In The Winnipeg Teachers' Association 10 case,
Chief Justice Laskin made this observation with
respect to the legal character of a collective agree
ment when considered apart from legislation:
I am unable to understand how liability for damages for breach
of a collective agreement can arise at common law which did
not, in this country, give any legal force to a collective agree
ment,....
I am of opinion that, for purposes of section 23
of the Federal Court Act, the claims in this action
were claims brought under a statute of the Parlia
ment of Canada because they were brought in
respect of collective agreements deriving their
legal character from the Canada Labour Code".
The action is, as well, an action involving the
administration of a law of Canada, the Code.
e See International Brotherhood of Teamsters v. Therien
[1960] S.C.R. 265, particularly at p. 277.
9 See, for example, the Canada Labour Code, sections 160
and 161.
10 The Winnipeg Teachers' Association No. I of the Manito-
ba Teachers' Society v. The Winnipeg School Division No. 1
[1976] 2 S.C.R. 695, at p. 709. Chief Justice Laskin was
writing in dissent, but this does not affect the force of the
quotation for present purposes.
" In section 23 of the Federal Court Act the reference is, I
am aware, to a claim for remedy or relief "... under an Act of
the Parliament of Canada ...." In section 22, on the other
hand, reference is to a claim for remedy or relief "... under or
by virtue of Canadian maritime law or any other law of Canada
relating to ..." and in section 25 it is to a claim for remedy or
relief "... under or by virtue of the laws of Canada ...." The
French version of section 23 is, however, worded in this way:
où une demande de redressement est faite en vertu d'une
loi du Parlement du Canada ...."
The next major question is whether the provi
sions for arbitration, agreed upon by the parties,
have the effect of ousting the jurisdiction of the
Trial Division by virtue of section 155 of the
Canada Labour Code and the closing words of
section 23 of the Federal Court Act.
There is in effect, between the parties to this
action (and others), a memorandum of agreement
dated September 1, 1971, which is headed
"Canadian Railway Office of Arbitration". I shall
refer to this document as the "Canadian Railway
Arbitration Agreement". The relevant sections of
it are as follows:
CANADIAN RAILWAY OFFICE OF ARBITRATION
MEMORANDUM OF AGREEMENT made this 1st day of Septem-
ber 1971 to amend and renew the founding Agreement estab
lishing the Canadian Railway Office of Arbitration dated the
7th day of January 1965 (as amended and renewed since that
date).
IT IS AGREED by and between the signatories as follows:
1. There shall be established in Montreal, Canada, the Canadi-
an Railway Office of Arbitration, hereinafter called the "Office
of Arbitration".
4. The jurisdiction of the Arbitrator shall extend and be lim
ited to the arbitration, at the instance in each case of a railway,
being a signatory hereto, or of one or more of its employees
represented by a bargaining agent, being a signatory hereto, of;
(A) disputes respecting the meaning or alleged violation of
any one or more of the provisions of a valid and subsisting
collective agreement between such railway and bargaining
agent, including any claims, related to such provisions, that
an employee has been unjustly disciplined or discharged; and
(B) other disputes that, under a provision of a valid and
subsisting collective agreement between such railway and
bargaining agent, are required to be referred to the Canadian
Railway Office of Arbitration for final and binding settle
ment by arbitration,
but such jurisdiction shall be conditioned always upon the
submission of the dispute to the Office of Arbitration in strict
accordance with the terms of this Agreement.
5. A request for arbitration of a dispute shall be made by filing
notice thereof with the Office of Arbitration not later than the
eighth day of the month preceding that in which the hearing is
to take place and on the same date a copy of such filed notice
shall be transmitted to the other party to the grievance. A
request for arbitration respecting a dispute of the nature set
forth in Section (A) of Clause 4 shall contain or shall be
accompanied by a Joint Statement of Issue. A request for
arbitration of a dispute of the nature referred to in Section (B)
of Clause 4 shall be accompanied by such documents as are
specifically required to be submitted by the terms of the
collective agreement which governs the respective dispute. On
the second Tuesday in each month, the Arbitrator shall hear
such disputes as have been filed in his office, in accordance
with the procedure set forth in this Clause 5. No hearing shall
be held in the month from time to time appointed for the
purposes of vacation for the Arbitrator, nor shall a hearing be
held in any other month unless there are awaiting such hearing
at least two requests for arbitration that were filed by the
eighth day of the preceding month, except that the hearing of a
dispute shall not be delayed for the latter reason only for more
than one month.
6. Subject always to the provisions of this Agreement the
Arbitrator shall make all regulations necessary for the hearing
of disputes by the Arbitrator which are consistent with the
terms of this Agreement and such regulations may be amended
by the Arbitrator from time to time as necessary.
7. No dispute of the nature set forth in Section (A) of Clause 4
may be referred to the Arbitrator until it has first been
processed through the last step of the Grievance Procedure
provided for in the applicable collective agreement. Failing
final disposition under the said procedure a request for arbitra
tion may be made but only in the manner and within the period
provided for that purpose in the applicable collective agreement
in effect from time to time or, if no such period is fixed in the
applicable collective agreement in respect to disputes of the
nature set forth in Section (A) of Clause 4, within the period of
60 days from the date decision was rendered in the last step of
the Grievance Procedure.
No dispute of the nature set forth in Section (B) of Clause 4
may be referred to the Arbitrator until it has first been
processed through such prior steps as are specified in the
applicable collective agreement.
8. The Joint Statement of Issue referred to in Clause 5 hereof
shall contain the facts of the dispute and reference to the
specific provision or provisions of the collective agreement
where it is alleged that the collective agreement has been
misinterpreted or violated. In the event that the parties cannot
agree upon such joint statement either or each upon forty-eight
(48) hours' notice in writing to the other may apply to the
Arbitrator for permission to submit a separate statement and
proceed to a hearing. The Arbitrator shall have the sole author
ity to grant or refuse such application.
12. The decision of the Arbitrator shall be limited to the
disputes or questions contained in the joint statement submitted
to him by the parties or in the separate statement or statements
as the case may be, or, where the applicable collective agree
ment itself defines and restricts the issues, conditions or ques
tions which may be arbitrated, to such issues, conditions or
questions.
His decision shall be rendered, in writing together with his
written reasons therefor, to the parties concerned within 30
calendar days following the conclusion of the hearing unless
this time is extended with the concurrence of the parties to the
dispute, unless the applicable collective agreement specifically
provides for a different period, in which case such different
period shall prevail.
The decision of the Arbitrator shall not in any case add to,
subtract from, modify, rescind or disregard any provision of the
applicable collective agreement.
13. Each decision of the Arbitrator which is made under the
authority of this Agreement shall be final and binding upon the
Railway, the bargaining agent and all the employees concerned.
The collective agreements themselves also con
tain provisions in relation to the settlement of
grievances. The practice of the parties in relation
to bargaining appears to be that agreements are to
run for a stipulated period, and new agreements
take the form of the pre-existing agreements as
amended. That is to say, a new agreement is not a
single integrated document, but consists of the
terms of the previous agreement as changed by
negotiation in respect of demands for change aris
ing from either side. From time to time there
appear to be consolidations. There was such a
consolidation in respect of the Prairie and Pacific
Region effective January 1, 1971. Article 39 of the
agreement as consolidated provides in part:
ARTICLE 39
GRIEVANCE PROCEDURE
(a) A wage claim not allowed will be promptly returned. If
not returned to the employee within 60 calendar days the claim
will be paid.
When a portion of a claim is not allowed the employee will
be promptly notified and the reason given, the undisputed
portion to be paid on the current payroll.
(b) A grievance concerning the meaning or alleged violation
of any one or more of the provisions of this Collective Agree
ment shall be processed in the following manner:
Step 1—Presentation of Grievance to Immediate Supervisor
Within 60 calendar days from the date of the cause of
grievance the employee and/or Local Chairman may present
the grievance in writing to the designated immediate supervisor
who will give a decision in writing as soon as possible but in any
case within 60 calendar days of date of the appeal.
Step 2—Appeal to Superintendent
Within 60 calendar days from the date decision was rendered
under Step 1 the Local Chairman may appeal the decision in
writing to the Superintendent.
The appeal shall include a written statement of the grievance
along with an identification of the specific provision or provi
sions of the Collective Agreement which are alleged to have
been misinterpreted or violated. A decision will be rendered in
writing within 60 calendar days of the date of the appeal.
Step 3—Appeal to Regional Manager
Within 60 calendar days from the date decision was rendered
under Step 2, the General Chairman may appeal the decision in
writing to the Regional Manager, whose decision will be ren
dered in writing within 60 calendar days of date of the appeal.
The decision of the Regional Manager shall be final and
binding unless within 60 calendar days from the date of his
decision proceedings are instituted to submit the grievance to
the Canadian Railway Office of Arbitration for final and
binding settlement without stoppage of work.
At its conclusion, the consolidated agreement
contains this clause:
Final Settlement of Disputes Without Work Stoppage
All differences between the parties to this agreement concern
ing its meaning or violation which cannot be mutually adjusted
shall be submitted to Canadian Railway Office of Arbitration
for final settlement without stoppage of work.
There are similar provisions in the Eastern and
Atlantic Region agreement. Clause 39 is substan
tially the same in both. The clause headed "Final
Settlement of Disputes Without Work Stoppage"
quoted above appears at the beginning of the
Eastern and Atlantic Region agreement without
the heading.
It was submitted by the appellant that the sub
ject matter of the action is not covered by the
arbitration clauses. The submission was that the
declaration sought was not a declaration as to the
meaning of the arbitration award, but rather was
as to whether the award was a clause within the
relevant agreements. The question raised by the
claims, it was said, goes to what constitutes the
agreements, not to their meaning.
This submission was rejected, and in my view
properly so, by the Trial Judge. He said [[1977] 2
F.C. 712, at pages 722-723] that the words in the
Canadian Railway Arbitration Agreement con
cerning arbitration are clear: "... they embrace
the very issue now before this Court, namely
whether or not the current collective agreement
includes the 'crew consist' award. That cannot but
be a dispute respecting the meaning of a collective
agreement."
The appellant made a further submission which
seemed to me to be very technical. The submission,
if I understood it properly, was that the statement
of claim, in so far as it related to the 1975
collective agreements, raised no issue which would
be arbitrable because it sought a declaration as to
the contents or interpretation of agreements that
had been replaced by the agreements of 1976-
1977, and, under Clause 4(A) of the Canadian
Railway Arbitration Agreement, only disputes
under subsisting collective agreements would be
arbitrable. The suggested consequence is that,
once the 1975 agreements were replaced, the dis
pute as to their meaning, not having been submit
ted to arbitration, would become litigable. This
submission, it appears to me, is based on an unac
ceptably narrow reading of the Arbitration Agree
ment and the collective agreements.
The dispute as to the meaning of the 1975
collective agreements arose during 1975 and con
tinued thereafter. The arbitration provisions of the
1975 collective agreements were not changed by
the memoranda of agreement of July 21, 1976.
Each memorandum began with the words: "The
current Collective Agreement shall be revised as
follows:...", and concluded in the same way as
previous memoranda had done: "This Agreement
is effective January 1, 1976 and supersedes all
previous Agreements ... which are in conflict
therewith ..." [emphasis added]. It would in my
view be unrealistic to conclude that disputes that
had arisen in 1975 would be cut off from arbitra
tion unless they were submitted to arbitration
before the 1976-1977 agreements became effec
tive. This would seem to me to disregard the flow
or continuity of the process of bargaining by the
parties for so many years. As a matter of fact, I
should think that the consequence of the appel
lant's submission, if it were sustainable at all,
would be that the occasion had been missed for
resorting to the only forum provided.
It was also argued that, assuming the dispute is
one as to the meaning of collective agreements, it
is a dispute which could not be taken to arbitration
by Canadian Pacific, the employer, under the col
lective agreements. Under Clause 7 of the Canadi-
an Railway Arbitration Agreement such a dispute,
it was argued, may not be arbitrated until after it
has been processed through the last step in the
grievance procedure provided in the collective
agreements. The grievance procedure in Article 39
of the collective agreements applies only to griev
ances raised by the Union or an employee. Conse-
quently Canadian Pacific would not be able to
initiate a grievance leading to arbitration so that
the Canadian Railway Arbitration Agreement
does not apply to the subject matter of the action.
This, again, seems to be too narrow a reading of
the Arbitration Agreement. The Agreement con
fers jurisdiction on the Arbitrator over arbitration,
at the instance of a railway or of one or more of its
employees as represented by the bargaining agent,
of (among other things) disputes respecting the
meaning of a collective agreement. Clauses 5 and
8 of the Arbitration Agreement provide the proce
dure for filing such a dispute. It seems to me that
the first paragraph of Clause 7 merely has the
effect of ensuring that, if a dispute involves an
employee grievance, the grievance procedure must
be fully complied with before resort to arbitration.
The submission also would have us disregard the
more general clause in the collective agreements
requiring the submission of all differences over the
meaning of the agreements which cannot be mutu
ally adjusted to the Canadian Railway Office of
Arbitration for final settlement without stoppage
of work.
It is my opinion that there has been a dispute
between Canadian Pacific and the Union as to the
meaning of subsisting and valid collective agree
ments at least from the time of the exchange of
letters between counsel for the parties in Septem-
ber 1975. The dispute arose because of the
declared intention of the railway companies to
implement the crew consist award, and, therefore,
presented an immediate problem raising a question
of interpretation. As such, it seems to me to have
fallen within the terms of the Canadian Railway
Arbitration Agreement, even though it did not
involve a grievance of an employee that would
have required processing through the various steps
of the grievance procedure. It was an apt question
for direct submission to the Arbitrator in accord
ance with the procedure provided in the Arbitra
tion Agreement itself.
There is a final submission by the appellant.
This is the submission that, assuming the subject
matter of the action is one that falls within the
scope of the Canadian Railway Arbitration Agree
ment, the jurisdiction of the Trial Division is not
ousted by the provision of the Arbitration Agree
ment for final settlement.
With reference to this submission, I would start
by referring to Clause 13 of the Canadian Railway
Arbitration Agreement which provides that a deci
sion of the Arbitrator shall be final and binding. I
refer next to section 155 of the Canada Labour
Code, which is in these terms:
155. (1) Every collective agreement shall contain a provi
sion for final settlement without stoppage of work, by arbitra
tion or otherwise, of all differences between the parties to or
employees bound by the collective agreement, concerning its
interpretation, application, administration or alleged violation.
(2) Where a collective agreement does not contain a provi
sion for final settlement as required by subsection (1), the
Board shall, on application by either party to the collective
agreement, by order, furnish a provision for final settlement,
and a provision so furnished shall be deemed to be a term of the
collective agreement and binding on the parties to and all
employees bound by the collective agreement.
Section 155 establishes a system for the final
settlement, without stoppage of work, of disputes
arising under collective agreements. Every collec
tive agreement must contain a provision for final
settlement of the types of differences specified in
subsection (1). The parties to an agreement are
thus under a duty to provide for such final settle
ment by arbitration or by some other means. If
they fail to fulfil this duty (possibly by a good
faith failure to select a method), the Board itself is
to make the provision on the application of either
party, and the provision so determined becomes
part of the collective agreement. It is within this
context that the effect of the closing words of
section 23 of the Federal Court Act must be
determined. And it is my view that in this case the
selection, by the parties, of arbitration as the
means of final settlement did constitute a special
assignment of jurisdiction to determine the issues
posed by the present action.
It is true that the parties might have chosen
another method; it is also true that they might
have failed to choose a method and, accordingly,
the Canada Labour Relations Board might have
had to furnish a provision for final settlement on
application by a party. I, of course, recognize that
the duty of the Board to furnish such a provision
arises only when one of the parties makes an
application. Subsection 155(1) does, however,
itself require that every collective agreement shall
provide a method for final settlement without stop
page of work, and the parties to the agreement
have chosen arbitration as that method. It is not
necessary to speculate on what the situation would
have been if they had not done so.
The appellant placed considerable reliance on
the decision of the Supreme Court of Canada in
Howe Sound Company v. International Union of
Mine, Mill and Smelter Workers (Canada), Local
663 12 . I do not see, however, that the case is
particularly helpful for present purposes. So far as
we are concerned, the point of interest in the Howe
Sound case is that, there, it was held that the
decision of an arbitration board under a collective
agreement providing for final settlement by arbi
tration was not a decision of a statutory tribunal
because, having in mind that some other method of
final settlement might have been chosen under the
terms of the statute there involved, just as it might
have been in this case, the arbitration method was
not statutorily required. It followed that the deci
sion of the Arbitration Board was not subject to
review by certiorari. It does not, however, follow,
as I see it, that the arbitration method selected by
the parties to the collective agreements in this case
as the method for final settlement of disputes,
when considered within the context of section 155
of the Canada Labour Code, did not constitute a
special assignment of jurisdiction in respect of the
subject matter of the action for purposes of section
23 of the Federal Court Act.
The appellant also relied on the well known line
of cases establishing that, in relation to commer
cial contracts and to other contracts deriving valid
ity from the common law, a provision for final
settlement of disputes by arbitration does not have
the effect of ousting the jurisdiction of the courts,
but, at most, may found an application for a stay
of proceedings if an action is brought before arbi
tration. The present case, however, is one involving
a section of the Federal Court Act which assigns
jurisdiction, in particular categories of cases, to the
Trial Division of the Court, an assignment which is
12 [1962] S.C.R. 318.
made subject to an express limitation. What we
are faced with is the interpretation of that limita
tion, having in mind section 155 of the Canada
Labour Code and the provisions of collective
agreements that fall within its scope. It seems to
me that the commercial arbitration cases are dis
tinguishable for this reason. In any event, and for
present purposes, they appear to me to do no more
than indicate that, in cases involving commercial
contracts, there is a policy reason against permit
ting the parties to oust the jurisdiction of the
courts by providing for settlement by arbitration.
A contrary policy is, however, indicated by the
relevant provisions of the Canada Labour Code in
relation to the settlement of disputes arising from
collective agreements.
It is, I think, not without pertinence to the
present issue to have in mind the character of
collective agreements. As the appellant has sub
mitted, and as I have found, such agreements
derive their validity from statute, not from the
common law of contract. Their distinctive charac
ter has been indicated in judicial opinions, some of
which were referred to in McGavin Toastmaster
Ltd. v. Ainscough 13 .I recognize that, in that case,
the questions had to do with the relationship be
tween the collective agreement and the individual
contracts of the employees; nonetheless I would
quote, as relevant to our problem, this passage
from the judgment of Chief Justice Laskin: "Cen-
tral to all the benefits and obligations that rest
upon the union, the employees and the company
under the collective agreement are the grievance
and arbitration provisions ...." 14
We are dealing in the present case with collec
tive labour agreements, not commercial contracts,
agreements in respect of which the Canada
Labour Code directs that there shall be final set
tlement of disputes arising under their terms by
way of arbitration or otherwise, as determined by
agreement of the parties or, failing such agree
ment, by the Canada Labour Relations Board on
application. In this case, the parties have in fact
selected arbitration as the method of final determi-
13 [1976] 1 S.C.R. 718, particularly at pp. 724 to 727.
14 Ibid., at p. 726.
nation. We are here in quite a different world from
the world of commercial arbitration.
I would dismiss the appeal with costs.
* * *
HEALD J.: I concur.
* * *
URIE J.: I concur.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.