SHP – 182-a




No: 500-05-008555-854


Montreal, January, 24 1986


Montreal, January, 24 1986

Canadian Pacific Limited


- vs -

Canadian Council of Railway Shopcraft Employees and Allied Workers


- and -


(Mis en cause)





The Court is seized with a motion in evocation attacking a decision of the Respondent arbitrator Mr. Weatherill, rendered September 5, 1985. The motion was served September 30, 1985, within the reasonable delay required by Art. 835.1 C.P.

The dossier in issue devolves from a prior decision, rendered by the same arbitrator on July 10, 1984. In that decision, "the July decision", the arbitrator allowed a grievance filed by the Respondent Union pursuant to the provisions of the Collective Agreement binding the parties.

In summary, the July decision held that the Petitioner had violated the terms of the Agreement, more particularly its Annex "D" when it contracted out certain work relating to bunkhouses belonging to the Petitioner and situated in its ‘prairie Region’ at Brandon, Manitoba, and Broadview and Swift Current Saskatchewan. The pertinent finding in the July decision was expressed as follows,

"... it is in any event a sufficient and proper award to declare that the contracting out in question was in violation of the letter of understanding and as well, to award that the employees affected be compensated for any loss of earnings attributable to the contracting out for the period during which such losses may continue. I so award and I remain seized of the matter for the purpose of determining any issue which may arise with respect to the relief awarded".

This finding and award is not in issue here. The fact of the work in question having been contracted-out is freely admitted. It appears from the record and the affidavits that a total of 12 unionized positions were abolished as a result of the contracting out.

A dispute arose between petitioner and the Respondent Union as to the distribution and entitlement to compensation pursuant to the July decision.

The Petitioner decided to compensate 8 (eight) persons as a result of the decision; of these eight only one, (1) G.B. Kostiuk, had in fact occupied one of the 12 jobs, abolished as a result of the contracting out. The other 7 persons compensated had held work with the Petitioner but were laid off as a result of the displaced bunkhouse employees claiming senior rights of employment. The group of 7 was in effect, "bumped" by displaced bunkhouse staffers.

In reaction to this response by the Petitioner to the undefined award of compensation, the Respondent union submitted to the Arbitrator that a proper application of his award, in the light of the dispositions of Annex "D" of the Collective Agreement would oblige the Petitioner to compensate from time to time a number of workers, not to exceed the maximum of 12 in number who would have been able to "hold work" had the bunkhouse jobs referred to not been wrongly contracted out. The Union asked the Arbitrator to make such a finding which he did, by decision dated September 5, 1985.

It is this decision (the September decision) which is attacked here, on the grounds that it is so unreasonable and erroneous as to constitute an excess of the arbitrator’s jurisdiction and subject to review and revision by this Court.

The passage of the September decision most particularly attacked is the following:

"....the class of persons unable to hold work as a result of the contracting out may well be greater than the class of employees whose jobs were abolished or who were consequently displaced - The number of persons affected would not exceed the number of jobs thus lost to the bargaining unit. The determination of what persons would have been able to hold work but could not as a result of the contracting out may in some instances be different as long as the work is not assigned to employees; losses may well continue to accrue as long as the contracting out continues".

Appendix "D" of the Collective Agreement is a letter of understanding which provides in part,

"... it is agreed that work presently and normally performed by employees represented by the (Union) will not be contracted, out except..."

(there follow 6 exceptions which are not in issue,

it having been determined by the July decision that none apply to these circumstances)....

"Where a Union contends that the Railway had contracted out work contrary to the; foregoing and this results in an employee being unable to hold work, the Union may progress a grievance in respect of such employee..."

The issue submitted to the arbitrator for resolution in the September decision is set out at page 2 of that decision:

"The Union contends that the ... award requires full compensation of lost salary to those senior laid off employees ... who would have been able to hold work had the bunkhouse maintenance not been contracted out.

"The company contends that compensation was payable only to those employees directly adversely affected by the contracting out" namely the group of 7 and Kostiuk).

It is conceded by the Petitioner that the petition is not based on the Arbitrator having committed a jurisdictional error, as opposed to intrajurisdictional error. Any error, if error there be, would therefore be required to be one which would be beyond a "mere error of law" and which could be qualified as resulting from a patently unreasonable interpretation of a provision which the arbitrator is required to apply within the limits of his jurisdiction. Syndicat des Employés de production du Québec (Radio Canada) vs CLRB, (1984) 2 SCR 412, 420, per Beetz J.

The Petitioner contends that the decision is unreasonable as it extends compensation to "employees" who are "unable to hold work" even though such employees may, at the time they are identified, be on lay off from their regular employment. The collective agreement prohibits the contracting out of that work "presently and normally performed by employees represented by the Union" and compensation is due when the prohibition is breached.

The Arbitrator put the question thusly

(page 4):

"... Whether employees on lay-off at the time the jobs in question were abolished or were subsequently laid off, in circumstances having no direct relationship to the abolition of the jobs, are persons who may properly said to be unable to hold work as a result of the contracting out".

In answering this question positively the arbitrator concludes


"If such persons were otherwise entitled to perform the work ... then their continuing to be laid off while the work was contracted out, meant ... that they were unable to hold work ..."

Can this decision be said to be one which demands an interpretation of the Agreement which it cannot rationally support ( Cupe vs N.B. Liquor Board Corp. (1979) 2 SCR 227 at page 237). In Bell Canada vs Rondeau 85 T-107 31/01/84, (appeal abandoned 11/05/84), Mailhot J. of this Court reviewed the cases of Steinberg vs l’Union des Employés de Commerce JE-T-82-433, 17/05/82 (CA), Falconbridge Nickel Mines and United Steelworkers of America (1978) 25 DLR (3d) 318 and United Steelworkers of America vs Yvon Robert and Bombardier Ltée et al (1980), SCR 905, and held at page 7 of the notes of the judgement:

"Une interpretation deraisonnable est ce qui est absurde, excessif, insensé ou même sophistique").

(1) citing CROA Case no 115

Does the decision here attacked meet these criteria? "No", is the only answer that can be supplied.

The matter viewed from the aspect of the result of the interpretation, is not any more unreasonable. That is to say, that while there might be cases where a reasonable interpretation, leading to an absurd result justifies the intervention of this Court (e.g. CEGEP Vanier vs Vanier JE 85-928, Fraser Martin J), this is not one such.

A mechanism is provided in the Agreement (Arts 6.1 ff) for transfer of employees from one "seniority terminal" to another. The parties’ agreement to this mechanism negates any practical complaint based on geographical inconvenience. In this connection in any event, there is no demonstrable absurdity arising from the arbitrator’s interpretation.

Petitioner protests that the September decision forecasts, without fixing, compensation in favour of a number of unidentified office holders, whose cases he reserves jurisdiction to hear, as they arise. The absence of nominate compensation-seekers is not a bar to the validity of the September decision any more than it was a bar to the July decision. The function of the arbitrator is to bring about a final and binding settlement of the grievances which arise as a result of the prohibited contracting out of work and, in these circumstances, for as long as such prohibited contracting out to the case of Samuel Cooper and Co Ltd vs Arthurs et al, 73 CLLC page 1484, decided pursuant to the Labour Relations Act of Ontario.

The Arbitrator declares in the September decision (as he did in the July decision) that he retains jurisdiction "for the purpose of determining any issue with respect to the relief demanded". It is implied by Petitioner that the jurisdiction of the Arbitrator is thus unwarrantedly extended by him in a manner to constitute an excess of jurisdiction, within the limits described above.

With respect, the Court cannot agree. In the case of La Cie des Transformateurs Phillips Ltée vs Les Métallurgistes Unis d’Amérique, loc 7812 , JE 85-1010, 25/10/85. The Court of Appeal of this Province considered the effect of a judgement in evocation annulling the decision of an arbitrator. Even in such a case the arbitrator was not automatically rendered functus officio where there was no attack on the arbitration procedure (processus arbitral), as for example where an evocation is granted for partiality. The Philips judgement at page 4 of the notes of the unanimous judgement expresses it thus:

"Il nous apparait que le dossier doive lui être retourné, à moins évidemment qu’il soit impensable de le faire parce que, par, exemple, il ne serait plus en état d’agir ou encore il ne devrait pas être saisi de nouveau du dossier parce que sa juridiction aurait été attaqué au niveau même du processus arbitral, comme par exemple, si l’évocation avait été accordée en raison de sa partialité. Nous ne sommes pas dans l’un de ces cas".

There are no apparent grounds in the present case to consider the Arbitrator functus officio for any of the reasons mentioned in the Philips decision. The declaration of retaining jurisdiction does not constitute an excess.







Bureau 500, Place du Canada,

C.P. 6042, Succursale A

Montréal, Qué H3C 3E4

Me Claude Hamelin (395 6434)





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Montréal, Québec

Me Suzanne Handman (849 5754)