AD HOC – 7




(the "Company")



(the "Company")





CHAIRMAN OF BOARD: Judge R. Clifford Levy




There appeared on behalf of the Company:

Mr. McLean


And on behalf of the Union:

G. A. Regan,




A hearing in this matter was held in Halifax, N.S. on January 28, 1964.

[Includes dissent by the Union nominee.]




This is an arbitration arising out of a dispute between The Canadian National Railways, Hotel Department, and Local 662 of The Hotel and Restaurant Employees and Bartenders International Union. The cause of the dispute was the dismissal of one dispute by his employer The Canadian National Railways Hotel Department, on and as of September 28th, 1963.

The Board as constituted consists of Judge R. Clifford Levy, of Bridgewater, N.S., Chairman; Mr. A. William Cox, Barrister, of Halifax, N.S , Company Nominee, and Mr. J.K. Bell, of Halifax, N.S., Union Nominee.

The Board after some preliminary work and study of statement of facts submitted by both parties first met at Halifax, N.S., January 28th, 1964. At that time the Union was represented by Mr. G.A. Regan, Barrister, of Halifax, N.S., and Mr. McLean, employee of the Company, represented the interests of the employer, Canadian National Railways, Hotel Department.

At this hearing, submissions were made in written form by Mr. McLean supported by certain exhibits attached to the written submissions and evidence was adduced on behalf of both employer and employee.

The Board studied the submissions made and reviewed these in conjunction with oral testimony given at the hearing, and met on several occasions subsequently to finalize these findings and ultimate decision.

Briefly, the Company submitted the following facts:

On September 27th, 1963, Mr. McMaster, maintenance man for the Company, reported for his tour of duty which was from 4:00 p.m. to 12:00 midnight. At approximately 4:30 p.m., Mr. H. Blair, Chief Engineer, had occasion to speak to Mr. McMaster and there was no indication at that time that Mr. McMaster had been consuming alcoholic beverage nor did he detect any odour of alcoholic beverage on Mr. McMaster’s breath. At approximately 10:30 p.m., Mr. L.R. Murchy, Assistant Chief Engineer, came across Mr. McMaster coming out of the locker room in company with one Sponagle who apparently was in a badly intoxicated condition, and judged that Mr. McMaster was incapable of performing his duties because of having consumed alcoholic beverage and he detected a strong odour of alcoholic beverage on Mr. McMaster’s breath. He then requested the Chief Engineer to come to the hotel. The Chief Engineer, upon seeing Mr. McMaster agreed with the Assistant Chief Engineer’s assessment and also detected a strong smell of alcoholic beverage on Mr. McMaster’s breath. He immediately relieved him of his duties pending a review of the charge by Mr. Pitt, Manager of the Hotel.

It was submitted that this was the second offense of a similar nature committed by Mr. McMaster within a period of thirteen months. On August 20th, 1962, Mr. McMaster was suspended for two weeks without pay when he reported for duty and was incapable of performing his duties as a result of having consumed alcoholic beverage. Both Mr. Blair Chief Engineer, and his assistant, Mr. Murchy testified at the hearing on January 28th, 1964, and with the exception of some details supported in their evidence that alcoholic beverage was detected by them on Mr. McMaster’s breath in the latter part of his shift which odour could not be detected when Mr. McMaster came on duty at 4:00 p.m. that day.

Mr. McMaster on the other hand testifying on his own behalf said that during the day he was working at another job, tarring a roof. He came in to his own home from that job about 3:00 p.m. He said he didn’t have time to have anything to eat but drank a part of a quart bottle of beer that he had opened the night before. He denied having anything of an intoxicating nature to drink after he started his shift at 4:00 p.m.

The accusation against Mr. McMaster appears to be two fold, viz., (a) that he had during his shift period, consumed alcoholic beverage and (b) that as a result he was incapable of performing his work. There does not seem to be any evidence that points to impairment on his behalf. Mr. Harold Wilkie says he saw Mr. McMaster around 9:00 p.m. and up to that time he "saw nothing unusual about him". Several other witnesses testified as well, and to the same, effect. Mr. S.A. Jewers said "I wouldn’t say that he looked anything different than usual. I did not smell his breath, he didn’t stagger he seemed quite normal".

There does not appear to be any evidence of impairment or inability to do his work. It is to be noted, however, according to notes of evidence, that no witnesses called for Mr. McMaster testified that they smelled his breath or that they did not or could detect any odour of alcoholic beverage. The evidence of these witnesses was all on the question of his ability to do his work or as to whether they observed anything unusual about him.

Both Mr. Blair and Mr. Murchy hold responsible positions with the Company and they impressed me as men capable of appreciating the position they hold, as well as the importance of the duties to be performed by Mr. McMaster and other maintenance men on the job. There was nothing to indicate that Blair or Murchy held any grudge towards McMaster or that for any reason they would wish to jeopardize his employment. It is our opinion that Mr. McMaster not in fact consumed alcoholic beverages while on duty during his shift period from 4:00 p.m. to midnight September 27th 1963, but that there is no evidence that such consumption, outwardly at least, impaired his ability to perform his duties. What effect that might have had on him if an emergency had arisen, we are unable to say. Perhaps it was fortunate that this was an ordinary evening at the hotel.

It was argued by counsel for Mr. McMaster that (1) there were no grounds for dismissal, and no evidence that he had been drinking while on duty. (2) That if the Board should find him guilty of drinking while he was on duty, this action was not a sufficient breach as to warrant dismissal and that the Board should consider the possibility of reducing the penalty to suspension or to some lesser disciplinary action.

We have already dealt with No. (1) above and find that in our opinion he was guilty of consuming alcoholic beverage while on duty during the shift period in question.

It now remains to deal with No. (2) above, that is, should the Board alter or vary the action of dismissal taken by the Company. We think the Board must consider its duties and powers in matters of arbitration contained in its terms of reference.

It was submitted by counsel for the Grievor, Mr. McMaster, that the terms of reference are as to whether or not Mr. McMaster was in fact drinking alcoholic beverage while on duty, and not as to the effect on his ability to perform his duties. We agree with this statement and believe that firstly our terms of reference confine us to a finding of fact on whether or not he did consume alcoholic beverages, as specified by the employer, and we have already stated our finding.

Article 2, of the Collective Agreement here, dated effective June 12th 1963, sets forth

2 Recognition of Management Function

2.1 The Union acknowledges that it is the exclusive function of the Company to:

(a) maintain order, discipline and efficiency;

(b) hire, direct, classify, transfer, promote, demote, discharge and suspend or otherwise discipline employees and to increase or decrease working forces …

What then are the powers given to the Board in Arbitration proceedings?

Article 18.6 of the Agreement says

18.6 The decision of the Board shall be limited to the dispute or question contained in the statement or statements submitted to it by the party or parties. The decision of the Arbitration Board shall not change, and to, vary or disregard any provision of this Agreement.

We interpret this clause to mean that the Board has a two-fold finding to make. (a) Either that the Company had no "just cause" to order dismissal of the employee in which event the Board should order him restored to his former employment with full compensation from the date of dismissal, or (b) That the Company had "Just cause" for disciplinary action in which case the Board has no authority to reduce the penalty or in any way vary the action taken by the Company.

A.W.R. Carrothers in his book, "Labour Arbitration in Canada" says on page 93,

… an arbitrator does not have power to compromise the rights of the parties unless such power is conferred on him.

This power can only come from the wording of the Collective Agreement and we are unable to find that it has been so conferred in the Agreement.

Quoting from the same authority on page 94,

Presumably to provide a basis for a quality of justice which would not otherwise be available, some Collective Agreements, notably in Ontario, give the Arbitrator power of discretion to reduce a dismissal to a disciplinary suspension, or to temper the severity of disciplinary action that falls short of dismissal. These clauses clearly modify the common law inasmuch as they recognize a punitive power in the employer and a power to compromise in the arbitrators.

The Company recognizes the seriousness of the use of alcoholic beverages by their employees while on duty and emphasized their stand on page 8 of their submission before this Board.

Para. 25 All members of the maintenance and engineering staff of the Nova Scotian Hotel have access to the engineering plant which includes for example, a 50,000 volt transformer, refrigeration and air-conditioning installation, and other expensive and vital operating equipment which, if mishandled, would not only result in costly and time consuming repairs but would also endanger the lives of guests and employees.

Para. 26 Employees of the maintenance and engineering staff are all members of the hotel fire brigade.

Para. 27 The duties and responsibilities of the maintenance and engineering staff, therefore, are such that any impairment on the part of an employee endangers the lives of everybody in the hotel.

The difficulty, of course, with the use or consumption of alcoholic beverage is its different effects on different people and sometimes different reactions on the same person at different times and under varying circumstances. For this reason, the Company has apparently taken the stand, and insists on complete prohibition insofar as the employees are concerned while they are on duty. For this stand, we think they should be highly commended by the public who continuously place their lives in the hands of others while away from home.

Page 10, paragraph 35 of the Company’s submission. states:

On October 25th, 1962, the manager of the hotel found it necessary to issue the following instruction to his Department Heads, with a copy to Mr. Martell, Union Representative:

Heads of Departments October 25th, 1962

I have noted numerous empty beer bottles laying around in areas of the hotel to which, under normal circumstances only employees have access. This indicates that employees are either bringing beer into the hotel or acquiring hotel property from the Chart Room, Service Bar or Cocktail Lounge and consuming same while on duty.

The nature of these offenses merits instant dismissal and I wish you to instruct your staff accordingly.

Please give this matter your immediate attention.

(signed) R.S. Pitt


c.c. Union Rep. (Mr. Martell)

Para. 36 Mr. Blair posted this notice on the bulletin board of the Engineering Department.

This indicates that the Company had taken steps to acquaint its employees not only with its attitude in matters of this nature, but also as to what disciplinary action would be taken in the event of a violation of this rule.

We think that there are two questions before the Board at this stage.

(a) has the Union met the burden upon it before the Board to show that disciplinary action taken by the Company against the Grievor, McMaster was unwarranted and

(b) has the Company acted justly and fairly in arriving at the disciplinary action?

In Peters Ice Cream Co. Ltd. and Milk Sales Drivers and Dairy Employees Union Local No. 464 (1961) 34 W.W.R. 575, a decision of the British Columbia Supreme Court, the crux of that decision is contained in the words "… In any event the burden on the employer is not the criminal standard beyond a reasonable doubt, but is the civil standard of the burden of probabilities".

In view of the stand taken by the Company relating to the use of intoxicating beverages by its employees on duty, and the efforts made by it to acquaint its employees of this stand, and in the light of past experience both with Mr. McMaster and other employees related by the Company in paragraph 37 of its submission, we are of the opinion that the Company had "just cause" to take disciplinary action against Mr. McMaster for this violation.

The Board must now deal with its power to compromise or the exercise of powers to vary or alter the penalty inflicted.

"The burden is upon the Union to prove discrimination on the part of the Company and the Union must prove this by a preponderance of evidence."

International Chemical Workers in re A.C. Horn (1953) 4 L.A.C. 1524

We are of the opinion that where there is no express authority granted to the Board in the Agreement, the Board cannot substitute its own discretion for that of the Company. If the Company had cause for disciplinary action then the Board is bound to uphold the Company’s action and dismiss the grievance.

We are further of the opinion that the Board cannot substitute its own penalty for one the Company has imposed unless the Agreement gives the Board the authority so to do. This agreement does not. The powers of the arbitrators then are limited. They may not range over the entire relationship between the parties. They may not make a valid award outside the scope of their terms of reference. The arbitrator must "decide the questions submitted to them according to the legal rights of the parties, and not according to what he may consider fair and reasonable". There are a number of authorities for this contention, such as for example:

Oland & Sons Ltd. and United Brewery Workers, Local 361 (1960)

A.W.R. Carrothers - "Labour Arbitration in Canada" Page 94 as quoted above.

… where the cause for the discharge is not frivolous, or slight, and when it is such that it should involve some discipline either by way of suspension, discharge, or otherwise, then if the Company chooses to exercise the more severe discipline the Board under the provisions of the contract, cannot interfere with the Company’s Judgement, even if in the Board’s judgement the cause was not one which, as it views it, warranted the severe discipline of discharge.

Sudbury Mine Mill & Smelter Workers Union and Falconbridge Nickel Mines Ltd. (1952) 3 L.A.C. 1186 at 1190. 1191

We are, therefore, of the opinion, and for the reasons hereinbefore set out, that the Company had "just cause" to take disciplinary action against Mr. McMaster for his actions while on duty September 27th, 1963, and as well for the same reasons that we have already set forth, we are of the opinion that the Board has no discretionary power to lessen or change the penalty imposed by the Company.

The Grievance will be and is hereby dismissed.

In closing we wish to express sincere thanks on behalf of the Board for the very able manner in which this problem has been presented to the Board, and for the co-operation given by everyone on behalf of both parties.

DATED at Halifax, Nova Scotia, 13th day of March, A.D. 1964

(signed) R. CLIFFORD LEVY (signed) A. WILLIAM COX

Chairman Company Nominee


I have read the majority report of the Arbitration Board in which the views of the Chairman Judge R. Clifford Levy and the Company appointee, Mr. A. William Cox, are set out.

I find that I am unable to concur in the majority report for the following reasons:

(1) No evidence was offered by witnesses called by the Company which substantiated that McMaster had been drinking on duty.

(2) Witnesses appearing for McMaster gave evidence that they had observed McMaster during his tour of duty and there was no indication that McMaster had been drinking or showed the effects of drink.

(3) The Company has not been able to show that McMaster had failed to carry out his responsibilities insofar as performing his work.

(4) Witnesses for McMaster testified that during their contact with him on the shift in question that he was carrying out his work duties without any sign of impairment.

(5) The basis of the majority report hinges on the evidence given by Messrs. Blaie and Murchy, Chief Engineer and Assistant Chief Engineer respectively, who testified that they detected a strong smell of alcoholic beverages on McMaster’s breath.

I cannot accept that the evidence given in this case warrants the extreme penalty of dismissal and I cannot share the views of my colleagues on the Board that this case should be decided on the basis of evidence where "the burden on the employer is not the criminal standard beyond a reasonable doubt, but is the civil standard of the burden of probabilities". I am aware that this opinion is taken from a decision of the British Columbia Supreme Court (Peters Ice Cream Co. Ltd. V. Milk Sales Drivers and Dairy Employees Union, Local 464 (1961) 34 W.W.R. 575.

Under present day conditions, discharge of employees, particularly those over the age of forty and who have worked in the service of a single employer for a lengthy period of time, is tantamount to "economic execution", inasmuch as such an employee may find it next to impossible to secure subsequent employment. In view of these grave consequences, it is my opinion that a case of discharge should be based on something more tangible than "the civil standard of the burden of probabilities".

The majority report contains the proposition that an Arbitrator or a Board of Arbitration is powerless to hand down a decision of compromise, or to vary or alter the penalty inflicted unless specific provision is set out in the collective agreement, and in this instance, refers to a decision of the Supreme Court of Ontario (Sudbury Mine Mill & Smelter Workers Union and Falconbridge Nickel Mines Ltd. (1952) 3 L.A.C. 1186 at 1190, 1191.

The majority report also refers to an arbitration case involving Oland & Sons Ltd. and United Brewery Workers, Local 361 (1960), and also quotes the opinion of A.W.R. Carrothers "Labour Arbitration in Canada" page 94 in support of their position that Arbitration Boards have no discretionary power to lessen or change a penalty imposed by an employer, unless provided for under the terms of the collective agreement.

Notwithstanding the legal opinions set out above, I feel that in the matter of labour relations that each case of disciplinary action, including discharge, must be considered on the basis of its individual acceptance or recognition of the intent and meaning of the terms of the collective agreement.

During the Arbitration hearing, Counsel for McMaster indicated that, while the collective agreement did not specifically provide for the discretionary powers of the Arbitration Board to lessen or alter the penalty imposed by the employer, nevertheless it was the Unions position that their understanding of the intent and meaning of the collective agreement involved did not preclude such discretionary action by the Arbitration board.

Representatives of the Company did not contest this point and, in the absence of any contest, it indicated their acceptance of such discretionary powers taken by the Arbitration Board in the case in dispute. It appeared that this was not contrary to their interpretation of the intent and meaning of that section of the collective agreement dealing with the procedures and powers of an Arbitration Board.

Again I would like to stress that in the matter of labour relations, each case must be considered on the basis of the indicated understanding of the intent and meaning Of the terms of the collective agreement, and I feel that the majority report overlooks this important point.

At no time did the employer raise the question of that Board’s discretionary powers being limited, and I therefore must attach significance to the silence of the employer following the interpretative opinion placed on the powers of the Arbitration Board by the employee’s Counsel during the hearing.

The specific charge laid by the employer against McMaster was "that while on duty as Maintenance Man on Friday September 27th, you had been drinking and were relieved of your duties by the Chief Engineer at 11:15 P.M.". Since the Board heard no direct evidence which supported the employer’s charge that McMaster had been drinking while on duty, I, therefore, do not concur in the majority decision which upholds the dismissal of McMaster.

DATED at Halifax, N.S., March 19, 1964

(signed) J.K. BELL

Union Nominee