A-234-79
Canadian Union of Postal Workers (Applicant)
v.
The Queen (Respondent)
Court of Appeal, Pratte and Le Dain JJ. and Hyde
D.J.—Montreal, December 12; Ottawa, December
18, 1979.
Judicial review — Labour relations — Arbitral award,
made by Arbitrator appointed by Minister of Labour under
Postal Services Continuation Act, formed part of collective
agreement — Arbitrator had decided that s. 8 of Postal
Services Continuation Act provided that the guidelines, estab
lished under the Anti-Inflation Act, applied — Application to
review and set aside that part of arbitral award dealing with
compensation — Whether or not the Arbitrator had the power
to grant pay increases higher than those authorized by the
guidelines — Federal Court Act, R.S.C. 1970 (2nd Supp.),
c. 10, s. 28.
APPLICATION for judicial review.
COUNSEL:
R. Cleary for applicant.
R. Cousineau for respondent.
SOLICITORS:
Trudel, Nadeau, Létourneau, Lesage &
Cleary, Montreal, for applicant.
Deputy Attorney General of Canada for
respondent.
The following is the English version of the
reasons for judgment rendered by
PRATTE J.: This is an application under section
28 of the Federal Court Act, R.S.C. 1970 (2nd
Supp.), c. 10, against part of the arbitral award
rendered on March 31, 1979 by an Arbitrator
appointed by the Minister of Labour under the
Postal Services Continuation Act, S.C. 1978-79,
c. 1.
The Postal Services Continuation Act came into
force on October 19, 1978. It put an end to a strike
by the postal service employees, who could not
agree with their employer on the terms of the
collective agreement that was to replace the one
that had expired on June 30, 1977. In addition to
ordering the striking employees to return to work,
this Act extended the term of the collective agree-
ment which had expired on June 30, 1977 until
December 31, 1979, with any changes, however,
that the parties agreed to make to it or, if they
could not agree on this matter, which an arbitrator
to be appointed by the Minister of Labour might
decide upon. It is the arbitral award rendered by
this Arbitrator which is the subject of this appeal.
It should be pointed out first that applicant is
not disputing the entire arbitral award but only the
decision made by the Arbitrator with respect to
the employees' compensation for the period from
July 1, 1977 to December 31, 1978, when the
Anti-Inflation Act' was in force.
The applicant Union had argued before the
Arbitrator that special circumstances justified its
claiming a pay increase for that period higher than
the one authorized by the "guidelines" established
by the Governor in Council under the Anti-Infla
tion Act. The Arbitrator rejected this argument,
stating that in view of section 8 of the Postal
Services Continuation Act, 2 he was obliged to
apply the "guidelines" and had no authority to
depart from them. In making this decision the
Arbitrator committed an error of law, according to
applicant, since, he argued, the Arbitrator had the
right and the power to grant pay increases higher
than those authorized by the guidelines.
The passages of the arbitral award disputed by
applicant are as follows:
[TRANSLATION] ARTICLE 35
This article deals with wages. Part of these wages are for the
period from July 1, 1977 to December 31, 1978 inclusive when
the Anti-Inflation Act (23-24 Eliz. II, c. 75) was in force. The
Union maintained that I am not bound by the guidelines
I S.C. 1974-75-76, c. 75. Section 46(2) of that Act provided:
46....
(2) This Act expires on December 31, 1978 ....
2 This section reads as follows:
8. The Anti-Inflation Act and the guidelines established
pursuant to subsection 3(2) of that Act apply to the collec
tive agreement to which this Act applies, as extended and
amended by or pursuant to this Act, as if that agreement as
so extended and amended were a collective agreement
entered into between the employee organization and the
employer applicable for that portion of the period specified in
section 5 that ends December 31, 1978.
established under this Act, that I can exceed them and that
only the officers and bodies mentioned in the Act have jurisdic
tion to interpret and apply it. He relied on certain decisions of
the Quebec Superior Court and the Quebec Court of Appeal.
In these cases the arbitrators were acting under the Labour
Code and the principal ground for the decisions lay in the fact
that they had no mandate with respect to the application of the
Act respecting anti-inflation measures (S.Q. 1975, c. 16).
In my view these decisions do not apply to the undersigned
mediator-arbitrator, who derives his authority from the Postal
Services Continuation Act and the Public Service Staff Rela
tions Act (R.S.C. 1970, c. P-35). Section 8 of the former Act
provides that "the Anti-Inflation Act and the guidelines estab
lished pursuant to subsection 3(2) of that Act apply to the
collective agreement to which this Act applies, as extended and
amended by or pursuant to this Act ..." The only meaning I
can give this provision is that not only do I have the authority
but I also have an obligation to apply the guidelines to the
amendments I make to the agreement. Moreover, I have no
authority to exceed them, since the Anti-Inflation Act confers
this power only on certain designated officers and bodies.
In clause 35.03 the employer proposes a pay supplement for
'the period from July 1, 1977 to December 31, 1978. He assured
me that this supplement is the maximum that can be granted in
view of the guidelines and the Union does not deny this
assertion. I am therefore granting this proposal of the employ
er. ...
With respect to clause 35.14 providing for a cost of living
allowance, the Union is asking chiefly that the clause be
amended retroactively so that the payments made under it
could be considered advances on the pay supplement having a
retroactive effect. I am of the view that this cannot be done.
These are obligations discharged by the employer, payments
made once and for all, and to change their effect would defeat
the purpose of the guidelines established under the Anti-Infla
tion Act. This would be doing indirectly what I have no
authority to do directly. The Union's request is therefore
rejected.
Is it true, as the Arbitrator ruled, that section 8
of the Postal Services Continuation Act imposed a
duty on him to apply the guidelines with the result
that he had no authority to depart from them?
This is the issue which must be decided.
According to section 8:
8. The Anti-Inflation Act and the guidelines established
pursuant to subsection 3(2) of that Act apply to the collective
agreement to which this Act applies, as extended and amended
by or pursuant to this Act, as if that agreement as so extended
and amended were a collective agreement entered into between
the employee organization and the employer applicable for that
portion of the period specified in section 5 that ends December
31, 1978.
There are two observations to be made regarding
this provision. First, that it does not expressly
impose any obligations on the Arbitrator, nor does
it prescribe any express limitation on his powers;
all that it provides is that the Anti-Inflation Act
and the guidelines apply to the collective agree
ment as amended by the Arbitrator as if it were an
ordinary collective agreement. The second obser
vation is that the way in which the section is
worded indicates that the Anti-Inflation Act and
the guidelines apply to the collective agreement
only after it has been amended by the Arbitrator,
that is, after the latter has exercised his powers.
This having been said, the fact remains that in
order to determine the effect of section 8, one must
have at least a general idea of the Anti-Inflation
Act.
This Act empowers the Governor in Council to
establish guidelines for the restraint of prices and
wages. The responsibility for ensuring that these
guidelines are applied is given on the one hand to
the Anti-Inflation Board and the Governor in
Council and on the other hand to the Administra
tor responsible for enforcing the Act. When the
guidelines are about to be contravened or have
been contravened, the Board or the Governor in
Council may inform the Administrator. The latter
must then conduct an investigation. If he is satis
fied, at the conclusion of this investigation, that
there will be or has been a contravention of the
guidelines, he may order the person concerned not
to contravene them and, where contraventions
have already occurred, he may make such remedi
al orders as are authorized by the Act. The orders
of the Administrator may be rescinded or varied
by the Governor in Council; they may also be
appealed to the Anti-Inflation Appeal Tribunal.
It should be noted here that the guidelines
established by the Governor in Council do not in
themselves have any binding force. An agreement
is not illegal merely because it contravenes the
guidelines; it becomes so only if the Administrator
makes an order to that effect. And such an order
may be made only if the Board or the Governor in
Council has decided to refer the matter to the
Administrator—nothing requires them to do so—
and if the Administrator himself decides at the
conclusion of his investigation to make an order
respecting the contravention he has found or
apprehends.
The effect of section 8 of the Postal Services
Continuation Act can now be stated. To provide,
as this section does, that the Anti-Inflation Act
applies to the collective agreement as amended by
the Arbitrator is quite simply to say that if the
agreement thus amended contravenes the guide
lines, the Board or the Governor in Council may
inform the Administrator, who may, after investi
gation, make an order in this regard. There is
nothing in the section, in my view, that limits the
powers of the Arbitrator to amend the agreement.
I am therefore of the opinion that the Arbitrator
committed an error of law when he found that
section 8 of the Postal Services Continuation Act
removed any authority he had to grant pay
increases higher than those authorized by the
guidelines. I would therefore quash the decision.
This is not to say, however, that the Arbitrator
should ignore the guidelines. He must take them
into consideration. If there are circumstances
which in his view justify his doing so, however, he
may grant pay increases higher than those permit
ted by the guidelines.
For these reasons I would quash the decision of
the Mediator-Arbitrator respecting the compensa
tion payable for the period from July 1, 1977 to
December 31, 1978 and would refer the matter
back to him for him to decide on the basis that he
has the power, if he considers it appropriate, to
grant pay increases higher than those permitted by
the guidelines.
* *
LE DAIN J.: I concur.
* * *
The following are the reasons for judgment
rendered in English by
HYDE D.J.: For the reasons given by Mr. Justice
Pratte I would dispose of this appeal according to
his conclusions.
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.