Labour Arbitrators Have Exclusive Jurisdiction Over All Collective Agreement Disputes, SCC Confirms

Disputes arising from collective bargaining agreements – including disputes that involve human rights complaints – fall within the exclusive jurisdiction of labour arbitrators, not human rights adjudicators, the Supreme Court of Canada (“SCC”) has ruled.

On October 22, 2021, the SCC released its decision in Northern Regional Health Authority v Horrocks (“Horrocks”), which addressed the jurisdictional boundaries between labour arbitrators and human rights adjudicators. The majority of the SCC held that a labour arbitrator has exclusive jurisdiction over all disputes under a collective agreement, including human rights disputes, unless legislation says otherwise.

This decision confirms that such matters fall within the exclusive jurisdiction of a labour arbitrator even when they involve human rights complaints. Practically speaking, unionized organizations will be able to trust that such disputes will go through the labour arbitration process, rather than other less familiar processes that may not be as expeditious as labour arbitration.

An analysis of this decision and its practical impact on unionized workforces is set forth below.

Background on the Dispute and the Appeal

Ms. Horrocks, a unionized healthcare aide, was suspended from her employment with the Northern Regional Health Authority (the “Health Authority”) for attending work under the influence of alcohol. After disclosing her alcohol addiction to her employer and refusing to enter into an agreement to abstain from alcohol and get treatment for her addiction, the Health Authority terminated her employment.

Ms. Horrocks’s union filed a grievance challenging her termination, and her employment was reinstated on the same terms as the agreement she refused to sign – i.e., an agreement to abstain from alcohol and get treatment. The Health Authority later terminated Ms. Horrocks’s employment for an alleged breach of those terms.

Ms. Horrocks filed a complaint with the Manitoba Human Rights Commission (the “Commission”), alleging that the Health Authority discriminated against her in her employment on the basis of her alcohol addiction. The Commission investigated her complaint and later referred it to an adjudicator for hearing.

The Health Authority contested the adjudicator’s jurisdiction to hear the complaint, pointing to various authorities , which recognize that arbitrators appointed under a collective agreement have exclusive jurisdiction  over matters arising out of the collective agreement. The adjudicator found that it had jurisdiction over the complaint, as the essential character of the dispute was an alleged human rights violation. The adjudicator ultimately ruled the Health Authority had discriminated against Ms. Horrocks in terminating her employment.

On judicial review to the Manitoba Court of Queen’s Bench, the reviewing justice found error in the adjudicator’s characterization of the dispute. The Court of Queen’s Bench viewed the issue as whether the Health Authority had just cause to terminate Ms. Horrocks’s employment; a matter arising out of the collective agreement between the parties.

The Manitoba Court of Appeal (“MBCA”) allowed Ms. Horrocks’s appeal, and agreed that disputes concerning the termination of a unionized worker fall within the exclusive jurisdiction of a labour arbitrator. These include  matters involving human rights elements or alleged human rights violations. However, the MBCA held the adjudicator had jurisdiction on the basis that:

  • the human rights complaint was said to transcend the specific employment context;
  • an employer’s obligation to accommodate an employee’s alcohol dependency was larger than the specifics of what occurred in an employment relationship; and
  • Horrocks’s union did not pursue arbitration following her termination.

On this basis, the MBCA remitted the matter to the reviewing judge to determine whether the adjudicator’s decision was reasonable.

The Supreme Court of Canada’s Majority Decision

Writing for the majority, Justice Brown overturned the decision of the MBCA, finding that the Court’s jurisprudence has consistently affirmed that where labour legislation provides for the final settlement of disputes arising from a collective agreement, the jurisdiction of the decision-maker empowered by that legislation (typically a labour arbitrator) is exclusive.

Justice Brown noted that the case law recognizes that exclusive arbitral jurisdiction captures disputes that are factually related to the rights and obligations under the collective agreement, even where those same facts give rise to other legal claims based in statute or the common law. The question in each case is whether the dispute, viewed with an eye to its essential character, arises from the collective agreement. The SCC was careful to note that not all actions between a unionized employer and employee are excluded, as an arbitrator’s exclusive jurisdiction extends only to disputes expressly or inferentially raised out of the collective agreement.

The SCC affirmed that the exclusive jurisdiction model applies in this case, as it did in the SCC’s earlier decision of Weber v. Ontario Hydro, [1995] 2 SCR 929. This means where matters arise from the interpretation, application, administration or violation of a collective agreement, the claimant must proceed by arbitrator, and no other forum has the power to proceed with handling that dispute.

The SCC found it is still necessary to consider whether any competing statutory scheme demonstrates an intention to displace the arbitrator’s exclusive jurisdiction over matters arising out of a collective agreement. In some cases, the competing legislation may confer exclusive jurisdiction over certain kinds of disputes on a competing tribunal. In other cases, legislation may endow a competing tribunal with concurrent jurisdiction over a matter that would fall fully within the scope of labour arbitration. However, the SCC found that the mere existence of a competing tribunal is insufficient to displace labour arbitration as the sole forum for disputes arising from a collective agreement.

The SCC stated that resolving jurisdictional contests between labour arbitrators and competing statutory tribunals entails a two-step analysis:

  1. First, the relevant legislation must be examined to determine whether it grants a labour arbitrator exclusive jurisdiction and if so, over what matters. Where the legislation includes a mandatory dispute resolution clause, an arbitrator empowered under that clause has exclusive jurisdiction to decide all disputes arising from the collective agreement.
  2. Second, if the arbitrator has exclusive jurisdiction over certain matters, the next step is to determine whether the dispute in question falls within the scope of that jurisdiction. This scope will depend on the language of the statute, but in general will extend to all disputes that arise from the interpretation, application or alleged violation of the collective agreement.

Applying the above analysis to Ms. Horrocks’s case, the SCC found that the two relevant statutes, The Labour Relations Act, CCSM, c L10 and The Human Rights Code, CCSM, c H175, disclosed a legislative intent to grant exclusive jurisdiction to the labour arbitrator over all disputes arising from the collective agreement, and this exclusive jurisdiction was not offset by any provisions in The Human Rights Code, CCSM, c H175. Further, as the essential character of Ms. Horrocks’s complaint arose from the Health Authority’s exercise of its rights under the collective agreement, her complaint fell solely within the jurisdiction of a labour arbitrator.

Dissenting Opinion

Justice Karakatsanis wrote a dissenting opinion, in which she agreed with the two-step analysis set out by the majority, but found that the two relevant statutes pointed to concurrent jurisdiction, as there was nothing in either statute that ousted the other’s jurisdiction. She stated that while labour arbitration may have been the more appropriate forum to hear the dispute in question, the adjudicator was not incorrect to conclude that she had jurisdiction.

The dissent also stated that apart from establishing this framework, the Court’s jurisprudence did not provide a rule that, absent express legislative intent to the contrary, arbitration jurisdiction is exclusive over disputes that fall within the scope of the collective agreement, nor a rule that the Weber exclusive jurisdiction model applies in every case involving two statutory tribunals.

Conclusion

The Horrocks decision provides insight and clarification on the jurisdiction of competing dispute resolution forums. The Court’s decision recognizes the exclusive jurisdiction of labour arbitrators over disputes that arise from the interpretation, application, administration, or violation of a collective agreement, including disputes involving alleged human rights violations.

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.