Court gives arbitrators more power

An important milestone in employment law


In Canada, if a dispute arises from the collective agreement in a unionized workplace, it is up to a labour arbitrator, not the courts, to resolve the dispute. This can even apply to allegations of slander and theft, depending on the circumstances, although we might usually call such disputes personal, criminal, or not exactly work-related.

Now the Supreme Court of Canada has brought even more power into the arbitrator’s realm — and perhaps has blurred the line between the powers of arbitrators as compared to judges. The country’s highest court recently ruled that, even where the employer has not actually breached the collective agreement, labour arbitrators can consider allegations that the employer violated an employee’s human rights.

In this particular case from Ontario (described below), the court’s decision also gave a probationary employee rights that she would not otherwise have enjoyed — or at least it took away management discretion the employer thought it had won in its contract negotiations with the union.

The case marks an important milestone in three areas of employment law: collective agreement arbitration, human rights legislation, and the rights of probationary employees.

The case:Parry Sound (District) Welfare Administration Board v. O.P.S.E.U.

Joanne O’Brien recently proved that a probationary worker has more power than many Canadian employers, and their lawyers, imagined.

O’Brien was a probationary employee with the Parry Sound Social Services Administration Board and a member of the Ontario Public Service Employees Union (OPSEU). She went on maternity leave while still on probation. A few days after she returned to work, the board fired her.

O’Brien grieved her dismissal, and at the hearing before the arbitrator the board relied on what the collective agreement said about probationary employees.

“A probationary employee,” the agreement read, “may be discharged at the sole discretion of and for any reason satisfactory to the Employer and such action by the Employer is not subject to the grievance and arbitration procedures.”

In other words, the collective agreement seemed to say that arbitration was not possible in O’Brien’s case.

Wrong, said the arbitrator and, now, the country’s highest court has affirmed that decision. The Supreme Court of Canada has ruled that O’Brien’s dismissal violated section 5(1) of the Canadian Human Rights Code — the section that guarantees every person, including pregnant women and new mothers, equal treatment in employment.

The court accepted OPSEU’s argument that human rights codes are automatically incorporated into every collective agreement, no matter how much power the agreement otherwise gives the employer.

The Ontario Labour Relations Act provides that an arbitrator can “interpret and apply human rights and other employment-related statutes, despite any conflict between those statutes and the terms of the collective agreement.”

But the Parry Sound board argued (successfully in the first court hearing) that arbitrators could only interpret human rights law “when and if they already have jurisdiction to hear a grievance,” under the collective agreement.

In a dissenting judgment, Justice Jack Major accepted the board’s argument that to import the human rights code into a case like O’Brien’s risked overloading the grievance process. The board’s lawyers complained that it could become an idle boast that arbitration is faster and cheaper than court litigation.

They remarked that O’Brien’s case appears suddenly to change the law that only certain closely-defined matters are within the arbitrator’s jurisdiction. In a published interview they also warned the decision could expose employers to double jeopardy — subject them to both a grievance arbitration and other proceedings under statutory law such as human rights codes.

For more information:

Parry Sound (District) Welfare Administration Board v. O.P.S.E.U., Local 324, 2003 CarswellOnt 3500, 2003 CarswellOnt 3501, [2003] S.C.J. No. 42.
What does the human rights code say?

The Parry Sound case means employers must assume that basic human rights law is a part of the collective agreement, never mind what else the agreement says. That is, human rights law trumps the agreement, no matter how much management discretion the union seems to have conceded to the employer.

Generally speaking, human rights codes protect employees from discrimination under the following categories, drawn here from the Canadian Human Rights Act (applicable in workplaces regulated by federal law):


•national or ethnic origin;



•sex and sexual orientation;

•marital and family status;

•mental or physical disability, including drug or alcohol dependence, past and present; and

•criminal convictions for which the employee has been pardoned.

Under human rights legislation in Canadian provinces, discrimination includes treating people differently: solely on the ground that they are a different race, colour, age or sex; harassment based on such characteristics; and retaliating against those who seek to assert their human rights.

Discrimination on any enumerated ground is permitted only to the extent that the job genuinely requires it — for example, where a firefighter must have a certain level of fitness — and only where the employer cannot accommodate the disability without undue harm to its operations. For instance, an important case of recent years decided that a firefighting operation could not set fitness standards at a level where a reasonably fit woman could not meet them while male candidates generally had a sex-based (genetic) advantage. That is, based on their sex alone, males as a group had an easier time qualifying.

This in-depth look at human rights in grievance arbitrations was provided by Jeffrey Miller, a Toronto writer, lawyer and translator. His latest book is Where There’s Life, There’s Lawsuits: Not Altogether Serious Ruminations on Law and Life. For more information visit

Supreme Court relies on 25-year-old case

In coming to its decision in the Parry Sound case, the Supreme Court of Canada relied on its own decision of nearly a quarter-century’s vintage, McLeod v. Egan.

That dispute arose at Galt Metal Industries, where the standard work week was 40 hours long. As well, Ontario’s Employment Standards Act (ESA) set the maximum work week at 48 hours.

Article two of the collective agreement gave Galt the absolute discretion “to schedule its operations or to extend, limit, curtail or reschedule its operations when ... it may deem it advisable to do so.”

And Galt had obtained a permit from the Ontario government allowing it to extend the maximum working hours beyond 48. Relying on the permit, it required employees to work overtime, even though the ESA required that the employees consent to working beyond regular hours.

Galt contended that, in article two of the agreement, the union had bargained away the workers’ right to consent.

The Supreme Court unanimously held Galt could not claim it had contracted out of the provisions of the ESA. Under that legislation, the court ruled, “the right to require overtime beyond 48 hours per week from any individual employee had been taken away from the employer and became subject to the [consent] rights of the employee under s. 11(2) [of the ESA].

There is nothing in the agreement that can possibly be construed as having met the requirements of that subsection and, therefore, it is unnecessary to determine whether this particular consent can be given by a collective agreement.”

In other words, the rights contained in the ESA were to be read into the collective agreement.

The law since states clearly that you cannot contract out of employment standards legislation. And now the Supreme Court has said the same thing about human rights legislation.

For more information see:

McLeod v. Egan, 1974 CarswellOnt 235, 1974 CarswellOnt 235F, [1975] 1 S.C.R. 517

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