Toronto Police Association v. Board of Commissioners

The judgment of Martland, Judson, Ritchie, Pigeon, Dickson and de Grandpré JJ. was delivered by

WHEREAS pursuant to Section 27 of the Police Act, a Bargaining Committee representing the Association met and bargained with a Bargaining Committee representing the Board for the purpose of making an Agreement in writing defining, determining and providing for remuneration, benefits, pensions and working conditions of the members of the Metropolitan Toronto Police Force set out in Schedule “A” hereto;

AND WHEREAS the initial Agreement between the parties has been amended from time to time;

AND WHEREAS the parties as of this date have reached an agreement as hereinafter set forth;

NOW, THEREFORE, THIS AGREEMENT WITNESSETH THAT:

1. This Agreement shall apply only to those members of the Metropolitan Toronto Police Force as set out in Schedule “A” hereto.

2. Except where a contrary intention appears,

(a) “Association” means the Metropolitan Toronto Police Association.

(b) “Board” means the Metropolitan Board of Commissioners of Police.

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(d) “member” means a person holding rank or classification as set out in Schedule “A” to this Agreement.

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4. The annual salary of each member effective January 1, 1969 shall be in accordance with Schedule “A” to this Agreement.

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6. (a) Each member who holds the rank of Inspector or higher shall be paid an annual clothing allowance as follows:

(i) One hundred and fifty dollars ($150.00) on the 30th day of June in each and every year, and

(ii) One hundred and fifty ($150.00) on the 31st day of December in each and every year,….

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10. (a) Members who were not members of the Association on June 30th, 1969, shall not be obliged to pay dues to the Association as a condition of employment.

(b) Members who were members of the Association on June 30th, 1969, shall be obliged to pay the prescribed dues to the Association as a condition of employment but shall not be obliged to pay any assessments levied by the Association on any of its members which may be in excess of the prescribed dues unless they remain as members of the Association.

(c) Members who joined the Force on or after July 1, 1969, shall be obliged to pay the prescribed dues to the Association as a condition of employment but shall not be obliged to pay any assessments levied by the Association on any of its members which may be in excess of the prescribed dues unless they become members of the Association.

An Arbitrator appointed under Step 5 of the Grievance Procedure shall not have power to add to, subtract from, alter, modify or amend any part of this

Agreement, nor otherwise make any decision inconsistent with this Agreement.

Either party to this Agreement may lodge a grievance in writing with the other party on any difference between the parties concerning the interpretation, application or administration of this Agreement including any question as to whether a matter is arbitrable and such grievance shall commence at Step 4 and the said Step 4 and Step 5 shall apply mutatis mutandis to such grievance.

THIS IS SCHEDULE “A”—REFERRED TO IN THE ANNEXED AGREEMENT

This schedule described various ranks in the Force, from constable to inspector, and to staff superintendent, and provided for the respective hours of service per week and the pay rate for each rank.

WHEREAS the Board and the Association entered into an Agreement in writing dated the 10th day of March, 1970 (hereinafter referred to as “the Agreement”) defining, determining and providing for remuneration, benefits, pensions and working conditions of the members of the Metropolitan Toronto Police Force set out in Schedule “A” to the Agreement; and

WHEREAS Section 24 of the Agreement provides that it shall remain in full force and effect for the period extending from January 1st, 1969, until December 31st, 1969, and thereafter until replaced by a new Agreement, decision or award; and

WHEREAS the Board and the Association have agreed to make the amendments, changes, alterations and additions to the Agreement hereinafter set out;

NOW THEREFORE THIS AGREEMENT WITNESSETH that, in consideration of the premises the Board and the Association hereby mutually agree and covenant as follows:

1. Clause 4 of the Agreement is deleted, and the following substituted therefor:

“4. The annual salary of each member, effective April 7, 1970, shall be in accordance with Schedule “A” to this Agreement.”

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9. Clause 24 of the Agreement is amended by striking out the figure 1969 wherever it appears in the Clause, and substituting therefor the figure 1970, so that the Clause, as amended, shall read as follows:

“24. The terms and conditions herein contained shall remain in full force and effect for the period extending from January 1st, 1970, until December 31st, 1970, and thereafter until replaced by a new agreement, decision or award…..”

THIS IS SCHEDULE “A”—REFERRED TO IN THE ANNEXED AGREEMENT

I now wish to bring this matter before the Police Commission at the earliest opportunity as a violation of agreement grievance. It is my respectful submission that the Department, specifically Deputy Chief

Hamilton and/or the Police Commission has violated the agreement by stopping the dues payroll deductions for the aforementioned six members.

This is the grievance which was submitted to the appellant arbitrator. His award upheld the grievance and found that the Board was in breach of the agreement in failing to deduct Association dues from the inspectors’ salaries and to remit them to the Association. He delivered written reasons for his decision.

In considering the implications of these two documents for the problem in this case, the one point which is clearly accepted by everyone is that the Inspectors were included under the 1969 Agreement and were liable to have dues deducted for the benefit of the Association. This is not the usual case of a grievance brought by the Union where an arbitrator is required to find positive evidence that, for instance, certain employees were negotiated into the bargaining unit. Instead, it is required to find positive evidence in the 1970 negotiations and document that it was agreed that these employees should be excluded from the unit and the Agreement.

Taken by themselves, each of these arguments is a possible interpretation of the bare language of the Agreement. However, when considered together, these two views of the linguistic evidence on the face of the documents serve only to show the unsatisfactory character and serious difficulties in each. They certainly show important ambiguities in this language which entitles me to examine extrinsic evidence in order to clarify its meaning.

Certainly at this point, which may well represent a binding, written amendment to the Agreement, there is no hint of exclusion of Inspectors and we can

assume that attempts to achieve it might well have required further concessions and benefits from the Board.

With this background, I would decide for the Union on three alternative though related, bases. If I were to consider the language alone of the 1969 or 1970 documents, on balance I conclude the Union interpretation is more probable. I rely for this conclusion on the fact that the 1969 Agreement is still in existence except as amended in 1970, that Sections 1, 2 and 10, which originally included the Inspectors, were not explicity amended by the latter, and that the continued existence of Section 6 is inconsistent with an implied exclusion of Inspectors from the whole of the Agreement by inference from a change in the salary schedule referred to by the amended Section 4. Although I recognize the difficulties in my linguistic interpretation, and reach it primarily because of the greater difficulties in the alternative, I am strongly reinforced in my conclusion by consideration of the extrinsic evidence of negotiating history. On this basis, I find it clear as a matter of fact that the parties have not actually agreed to or intended to exclude Inspectors from coverage of the dues deduction requirement of Section 10. Hence, ambiguities in the interpretation of Section 10 should be resolved in favour of its continued application to the Inspectors.

In the alternative, if I am wrong in believing that Sections 10 et al are sufficiently ambiguous in meaning to admit of resort to extrinsic evidence for their interpretation, then I hold that this is a proper case for the rectification of the latter to bring it into conformity with the binding and written agreement which they reached in April, 1970 and which was to be reflected in the July 1970 document. This case is closely analogous to the situation dealt with in Ontario Steel Products (1970) 21 L.A.C. 430 (Weiler), where I reviewed the authorities and stated that “the condition for its application (the doctrine of rectification) is that we find an actual, mutual agreement by the parties which is not expressed as intended in the final written document”.

For each of these three legal reasons, I conclude that the Board was in breach of the Agreement in

failing to deduct dues from the Inspectors and pay them over to the Association…..

My first observation about the way in which this result was reached must be to say that I have, with great respect, been unable to discern the ambiguities upon which the learned arbitrator relies for the importation of extrinsic evidence into his award. The 1969 agreement, as amended by the 1970 agreement, reads perfectly clearly, and the plain meaning of its words would exclude officers of the rank of inspector and over from membership in the Association. It is not suggested that there is anything defective about the execution of the 1970 agreement. The only specific inconsistency created by the 1970 agreement’s amendments or lack of them, is the fact that the provision for a clothing allowance for inspectors is still retained in section 6. But it is not sufficient to find an inconsistency in the retention of a section which it was not necessary for the arbitrator to construe. The characterization of this, and the omissions which the learned arbitrator professed to find in the failure of the 1970 agreement to alter the terms of sections 1, 2 and 10 of the 1969 agreement, as ambiguities for the purpose of letting in extrinsic evidence is error of law on the face of the award and alone sufficient to compel me to set it aside. There is, however, another aspect of the award which is in conflict with the express and unamended terms of the 1969 agreement in the form of that part of section 17 dealing with grievance procedure which reads in part as follows:—

“An Arbitrator appointed under Step 5 of the Grievance Procedure shall not have power to add to, subtract from, alter, modify or amend any part of this Agreement, nor otherwise make any decision inconsistent with this Agreement.”

This provision evidently stands in the way of any application of the arbitrator’s “doctrine of rectification”.

Nevertheless the interpretation that the learned arbitrator puts upon the combined effect of sections 1, 2,

4 and 10 and Schedule “A” of the agreement of 1969 as amended by the agreement of 1970 alters the effect of the amendments actually made and executed by the parties. Whether he does this by interpretation simpliciter, or by rectification based upon extrinsic evidence, he exceeds his jurisdiction by doing so.

The next question, accordingly, is whether the award of a consensual arbitrator to whom a question of construction of an agreement is referred can be set aside, and if so, upon what grounds, and by what form of procedure.

No doubt an award may be set aside for an error of law appearing on the face of it; and no doubt a question of construction is (generally speaking) a question of law. But where a question of construction is the very thing referred for arbitration, then the decision of the arbitrator upon that point cannot be set aside by the Court only because the Court would itself have come to a different conclusion. If it appears by the award that the arbitrator has proceeded illegally—for instance, that he has decided on evidence which in law was not admissible or on principles of construction which the law does not countenance, then there is error in law which may be ground for setting aside the award; but the mere dissent of the Court from the arbitrator’s conclusion on construction is not enough for that purpose.

While Hughes, J. was approaching the matter on a different basis (because he was asked to do so), I am nevertheless in complete agreement with his finding that there were clear and serious errors of law on the part of the arbitrator. Putting it in the language appropriate to attacks upon the award of a consensual arbitrator, this arbitrator proceeded illegally not only in the sense that he has decided on evidence which in law was not admissible, but also because he decided the referred question on principles of construction which the law does not countenance. I completely agree with Hughes, J. that the agreements the arbitrator was required to consider were clear and unambiguous. Therefore, no extrinsic evidence was admissible in aid of their interpretation. Furthermore, the arbitrator erred in doing what he called “applying the principle of rectification” which I take to be a euphemism for “reading the document as if rectified”.

…it is equally clear that if a specific question of law is submitted to an arbitrator for his decision, and he does decide it, the fact that the decision is erroneous does not make the award bad on its face so as to permit of its being set aside. Otherwise it would be futile ever to submit a question of law to an arbitrator.

If your Lordships should be of opinion that the award is bad in law upon its face, it should be set aside, for this is not in my view a submission to arbitration of such a nature that though the law be bad upon the face of the award, the decision cannot be questioned. That happens only when the submission is of a specific question of law, and is such that it can be fairly construed to show that the parties intended to give up their rights to resort to the King’s Courts, and in lieu thereof to submit that question to the decision of a tribunal of their own.

My Lords, it is, I think, essential to keep the case where disputes are referred to an arbitrator in the decision of which a question of law becomes material distinct from the case in which a specific question of law has been referred to him for decision. I am not sure that the Court of Appeal has done so. The authorities make a clear distinction between these two cases, and, as they appear to me, they decide that in the former case the Court can interfere if and when any error of law appears on the face of the award, but that in the latter case no such interference is possible upon the ground that it so appears that the decision upon the question of law is an erroneous one.

This is not a case where the parties by agreement ousted the jurisdiction of the courts to determine a question of law by choosing to have that question determined by a judge of their own making. This matter came up in the ordinary course on the hearing of a grievance which was characterized by the employee as a dismissal and by the Company as a retirement on pension. It is obvious from the letter which the Company wrote when it consented to the appointment of the arbitrator that there would be a preliminary objection to jurisdiction. This was all that was done on the first hearing before the arbitrator. He made his decision to proceed with the arbitration. There was nothing to prevent the Company from asking the Court for an immediate review of this decision. The arbitrator’s decision was one which the Court ought to have reviewed and reversed.