Canada Post Corporation v. Canadian Union of Postal Workers

Canada Post Corporation v. Canadian Union of Postal Workers Collection Decisions of the Court of Appeal Date 2001-11-15 Docket numbers C35116 Judges Carthy, James Joseph; Doherty, David H.; Moldaver, Michael James Subject Civil Decision Content DATE: 20011115 DOCKET: C35116 COURT OF APPEAL FOR ONTARIO CARTHY, DOHERTY and MOLDAVER JJ.A. BETWEEN: ) ) CANADA POST CORPORATION ) ) ) Robert P. Armstrong and John Terry for the appellant Appellant ) ) ) Paul Cavalluzzo and - and - ) Fay Farraday for the respondents ) ) CANADIAN UNION OF POSTAL WORKERS and KEVIN BURKETT ) ) ) Respondents ) HEARD: June 18, 2001 On appeal from the judgment of the Divisional Court dated July 4, 2000 (Justice Douglas Coo and Justice William Somers for the majority, Justice Anne Molloy dissenting). DOHERTY J.A. (Dissenting): I [1] In the fall of 1996, the appellant, Canada Post Corporation (Canada Post), received complaints from customers alleging widespread theft from the mail at its Gateway facility in Mississauga, Ontario. Covert video surveillance provided the only effective means of investigating these complaints. Hidden cameras were installed at the Gateway facility in February 1997 by Canada Post security personnel and remained in operation until June 7, 1997. During that surveillance, a number of employees were captured on videotape apparently stealing from the mail and engaging in other criminal activity involving the mail. [2] The employees who were allegedly involved in these criminal activities were identified from the videotape at various times throughout the four-month period during which video surveillance was conducted. No steps were taken to fire these employees, or to notify them of their alleged misconduct until after the video surveillance was terminated on June 7, 1997. Disclosure to individual employees prior to the termination of the video surveillance would obviously have compromised the ongoing covert investigation. [3] Canada Post’s investigation was completed on June 7, 1997 and the results were turned over by the Canada Post security personnel to the Peel Regional Police on June 8, 1997. Charges were laid against numerous employees on or about June 12, 1997. Within a few days those employees who were charged were suspended and fired. They were advised in writing that their dismissals related to the circumstances giving rise to the charges laid against them. [4] Twenty-nine of the discharged employees grieved their dismissals. [1] Their grievances were held in abeyance pending the outcome of criminal proceedings. [2] The grievance procedures were commenced before Arbitrator Burkett in 1999. By way of preliminary ruling he held that Article 10.02 of the Collective Agreement between Canada Post and the respondent, Canadian Union of Postal Workers (the Union), required that an employee receive notice of any alleged misconduct relied on as a basis for firing that employee within 10 days of Canada Post learning of the misconduct. Arbitrator Burkett held that if proper notice was not given, Canada Post could not rely on the alleged misconduct to justify the dismissal of an employee. Based on this interpretation of Article 10.02, Arbitrator Burkett ordered 19 of the 29 grievors reinstated. He further directed that the arbitrations with respect to the remaining 10 grievors proceed on their merits. [5] Canada Post moved for judicial review. The majority of the Divisional Court (Coo and Somers JJ.) in reasons reported at (2000), 50 O.R. (3d) 448 dismissed the application. Molloy J. dissented, holding that the arbitrator’s interpretation of Article 10.02 led to an absurdity and was patently unreasonable in that there were at least two other interpretations of the provision that did not yield an absurd result. She would have quashed the award of Arbitrator Burkett and directed that the arbitrations proceed on their merits before a different arbitrator. [6] This court granted leave to appeal by order dated October 4, 2000. [7] For the reasons that follow, I agree with the conclusion reached by Molloy J. and would allow the appeal and direct that the arbitrations proceed on their merits. However, I see no reason why the court should order that arbitrations proceed before a different arbitrator. II [8] The factual background is set out in the reasons of the majority of the Divisional Court and the dissent of Molloy J. I do not propose to repeat them. The relevant statutory provisions and the relevant provisions of the Collective Bargaining Agreement are set out below. Canada Post Corporation Act, R.S.C. 1985, c. C-10 5(1) The objects of the Corporation are (a) to establish and operate a postal service for the collection, transmission and delivery of messages, information, funds and goods both within Canada and between Canada and places outside Canada; … 5(2) While maintaining basic customary postal service, the Corporation, in carrying out its objects, shall have regard to … (c) the need to conduct its operations in such manner as will best provide for the security of mail; The Collective Agreement Final Decision 9.102 The award of the arbitrator shall be final and executory. It shall be binding upon the Corporation, the Union and the employees. Future Cases 9.103 The final decision rendered by an arbitrator binds the Corporation, the Union and the employees in all cases involving identical and/or substantially identical circumstances. 10.01 Just Cause and Burden of Proof (a) No disciplinary measure in the form of a notice of discipline, suspension or discharge or in any other form shall be imposed on any employee without just, reasonable and sufficient cause and without his or her receiving beforehand or at the same time a written notice showing the grounds on which a disciplinary measure is imposed. (b) In any arbitration relating to a disciplinary measure, the burden of proof shall rest with the Corporation and such proof shall be confined to the grounds mentioned in the notice referred to in paragraph (a) above. 10.02 Personal File (a) The Corporation agrees that there shall be only one personal file for each employee and that no report relating to the employee’s conduct or performance may be used against him or her in the grievance procedure nor at arbitration unless such report is part of the said file. (b) No report may be placed in the file or constitute a part thereof unless a copy of the said report is sent to the employee within ten (10) calendar days after the date of the employee’s alleged infraction or of its coming to the attention of the Corporation, or of the Corporation’s alleged source of dissatisfaction with him or her. (c) Any unfavourable report concerning an employee and any report concerning an infraction shall be withdrawn from the file after a period of twelve (12) months from the date of the alleged infraction. (d) A verbal reprimand shall not be considered as a disciplinary measure and shall not be reported in the personal file of the employee. 41.02 Surveillance The watch and observation systems cannot be used except for the purpose of protecting the mail and the property of the State against criminal acts such as theft, depredation and damage to property. At no time may such systems be used as a means to evaluate the performance of employees and to gather evidence in support of disciplinary measures unless such disciplinary measures result from the commission of a criminal act. III [9] There was no dispute as to the standard of review. The decision of the arbitrator stands unless it is patently unreasonable. IV The Arbitrator’s Reasons [10] Arbitrator Burkett’s decision turned on his interpretation of Article 10.02 of the Collective Agreement. There are two aspects to that interpretation. First, he held that absent compliance with the requirements of Article 10.02, Canada Post could not lead evidence of the alleged criminal activities of the employees. Compliance with Article 10.02 demanded that a report relating to the alleged misconduct be placed in the employee’s personal file and that the employee receive a copy of that report. Both requirements had to be met within 10 days of the alleged infraction coming to the attention of Canada Post. Second, Arbitrator Burkett held that the employee’s “alleged infraction” (the criminal activity captured on videotape) “came to the attention” of Canada Post when it identified an individual employee from the videotape. The 10-day notice period referred to in Article 10.02(b) therefore began to toll as of that date. Consequently, if an employee was identified from the videotape as having engaged in criminal activity more than 10 days before the video surveillance was terminated, that employee could not be fired for that misconduct because notice was not given to him until after the video surveillance was stopped in June 1997. [11] It is common ground that Arbitrator Burkett’s interpretation of Article 10.02, whereby compliance with that provision became a prerequisite to proof of the misconduct relied on to justify the dismissal, is the same interpretation that has been given to that provision by various arbitrators for the last 20 years. Article 9.103 of the Collective Agreement provided that Canada Post and the Union were bound by those prior decisions in “identical or substantially identical circumstances”. [12] Arbitrator Burkett further held that the circumstances did not justify any delay in the commencement of the 10-day notice period set out in Article 10.02(b) beyond the date when individual employees were identified on the videotape as being involved in criminal activity in relation to the mail. He distinguished prior decisions which had held that the 10-day period did not begin to run until an investigation was complete and/or criminal charges laid on the ground that none of those cases involved situations in which individuals had been positively identified as having committed an alleged infraction. Arbitrator Burkett also distinguished the cases in which the 10-day period did not begin to run until criminal charges were laid on the ground that those cases involved police investigations, whereas this case involved an internal investigation conducted by Canada Post. [13] Arbitrator Burkett’s interpretation of Article 10.02 left Canada Post in a most difficult position when faced with allegations of widespread theft from the mail that could only be effectively investigated by a covert operation of some duration. Canada Post could comply with Article 10.02 and give notice to the first employee identified as engaging in criminal activity within 10 days of that identification, thereby destroying the effectiveness of the covert investigation and forfeiting any opportunity to uncover the full scope of the misconduct. Or Canada Post could maintain the secrecy of the operation by not giving notice to the employee until the end of the investigation. If it chose this option, Canada Post would forfeit its right to fire employees who were caught stealing from the mail, if they were identified more than 10 days prior to the completion of the investigation. In short, Canada Post could fully investigate the alleged thefts only if it was prepared to continue to employ at least some of the thieves. [14] Arbitrator Burkett was alive to what he referred to as the “predicament faced by the Corporation”. He said: … While the decision of the Corporation is understandable from a security perspective, it was made in the face of article 10.02 and in the absence of a single award upholding an exemption from the 10 calendar day notice requirement of article 10.02 in any situation where an individual has been identified as having committed alleged acts of misconduct. Notwithstanding the predicament faced by the Corporation, I am required to give effect to the terms of the collective agreement. On the facts here, considered in light of all the article 10.02(b) jurisprudence, there is no basis to exempt the Corporation from the requirements of that article. Having identified individual acts of misconduct and having identified individual suspects and having considered these to be infractions warranting a disciplinary response, the Corporation, pursuant to article 10.02, was required to provide each identified suspect with a copy of a report in respect of each incident placed in his/her personal file within 10 calendar days of becoming aware if it wished to discipline in respect of these incidents. [Emphasis added.] The Reasons of the Divisional Court [15] The majority in the Divisional Court found that the arbitrator’s interpretation of Article 10.02 was not patently unreasonable. The majority stressed that deference was owed to the arbitrator and the long history of arbitration decisions that had followed the same interpretation. In the view of the majority, the stare decisis clause in the Collective Agreement (Article 9.103) compelled Arbitrator Burkett to follow the interpretation of Article 10.02 laid down in the previous cases. [16] The majority also concluded that Arbitrator Burkett’s finding that the 10-day notice period referred to in Article 10.02(b) began to run from the time individual employees were identified as being involved in alleged misconduct was not patently unreasonable. The majority said at p. 452: There was evidence before the arbitrator to support his factual conclusions on the subject of when the time under Article 10.02(b) of the collective agreement began to run. We cannot agree that the language of the provision permits an interpretation that would postpone its obligations in the case of a broad-based investigation of a number of employees. [17] The majority realized that the arbitrator’s interpretation of Article 10.02 presented serious difficulties for Canada Post but said at p. 453: The applicant’s [Canada Post] remedy lies in the collective bargaining process. Its obligations under s. 5(2)(c) of the Canada Post Corporation Act to have regard to the security of the mail are not inconsistent with the provisions of the collective agreement. Limits on its managerial authority accepted in the collective agreement should not result in court action contrary to the principles under which judicial review must take place. [18] Molloy J., in dissent, began from the premise that words in a collective agreement like words in any contract should be given their plain meaning unless context demands otherwise or the plain meaning would yield an absurdity. By absurdity I take her to mean a result which could not have been intended by the parties to the Collective Agreement. Molloy J. was of the opinion that the arbitrator’s interpretation led to an absurdity in that it effectively prevented Canada Post from maintaining the security of the mail. [19] In the view of Molloy J., the arbitrator’s interpretation of Article 10.02 of the Collective Agreement did not accord with the plain and ordinary meaning of the words used in Article 10.02, particularly when those words were read in conjunction with Article 10.01. She opined that Article 10.01 and not Article 10.02 dealt with notices of discharge, and that the 10-day time limit in Article 10.02(b) did not apply to notices of discharge. She further held that Article 10.02(a) which precluded the use of “reports” in grievance proceedings where the notice requirements of 10.02(b) were not complied with did not affect Canada Post’s entitlement to lead evidence, other than “reports” to establish the misconduct relied on to justify the discharge. The essence of her analysis is found at pp. 461-62: … The plain and ordinary meaning of this provision is that the report itself cannot be used at the arbitration. This does not mean that no other evidence with respect to an incident giving rise to discipline is admissible at an arbitration. The section deals only with the admission of reports from the personal file. In particular, there is no provision in the agreement that prohibits disciplinary action unless a “report” was served on the employee within ten days and then placed in the personal file. Thus on a literal (or plain meaning) interpretation of Articles 10.01 and 10.02 the failure of Canada Post to give notice under Article 10.02 with respect to the criminal activity it discovered in its investigation would not be an impediment to proceeding to discipline against an employee with respect to that incident (provided that reasonable notice under Article 10.01 is given). Although the “report” itself would not be admissible evidence unless the Article 10.02 notice provision was observed, the employer would be entitled to call other evidence to prove its case. [20] Molloy J. also addressed the effect of Article 9.03, the stare decisis provision in the Collective Agreement. After observing, at p. 469, that Arbitrator Burkett was bound by Article 9.103 to apply the interpretation given in previous cases, Molloy J. went on to state: … It is also clear that Article 9.103 does not restrict, or purport to restrict, the review powers of this court… If the interpretation is a patently unreasonable one, it remains patently unreasonable notwithstanding the fact that it has been applied by other arbitrators. A decision is either patently unreasonable or it is not. It doesn’t become reasonable because others have done the same thing. … [21] Molloy J. concluded that Arbitrator Burkett’s interpretation of Article 10.02 was patently unreasonable in that it yielded an absurd result and was inconsistent with the plain meaning of the words of Article 10.02. [22] Molloy J. also considered the reasonableness of Arbitrator Burkett’s decision on the assumption that he was correct in holding that Article 10.02 was applicable to a notice of discharge and that Canada Post could not rely on the misconduct revealed by the videotapes unless it complied with the notice requirements in Article 10.02(b). Molloy J.’s review of previous arbitration decisions led her to conclude that those cases favoured a flexible approach to a determination of when the 10-day notice period in Article 10.02(b) began to run. That flexible approach took cognizance of both the employee’s right to timely notice of the reason for discharge and Canada Post’s obligation to maintain the security of the mail. In her view, the previous arbitration decisions directed that the commencement of the 10-day notice period in Article 10.02(b) should depend on what was reasonable having regard to the totality of the circumstances. In some circumstances it was reasonable to commence the 10-day time period when an investigation was complete and/or charges had been laid by the police. [23] Molloy J. determined that the circumstances in this case made it reasonable to commence the 10-day period either on the termination of the investigation or on the date charges were laid. She reasoned that this interpretation of Article 10.02(b) gave full effect to both the employees’ right to timely notice and Canada Post’s right to maintain the security of the mail. In coming to this conclusion, Molloy J. referred to a number of factors, including the nature and extent of the alleged misconduct, the number of employees involved in the alleged misconduct, the threat posed by that misconduct to the security of the mail, the nature of the investigative process required to uncover the full extent of the misconduct, and the significance of the laying of the criminal charges to Canada Post’s decision to fire the employees. [24] Molloy J. was satisfied that her interpretation of when the 10-day time period should begin to run was open on the prior authorities and avoided the absurd result arrived at by the arbitrator. She said at p. 475: … [I]f there is a reasonable interpretation, that protects the interests of the parties and their reasonable expectations under the agreement and which does not unduly strain the language of the agreement, it is to be preferred over an interpretation that produces an absurd result. This is even more the case with respect to determining when the company had knowledge since it does not require overriding, or even distinguishing, existing precedent. V [25] Canada Post’s arguments on appeal tracked the dissent of Molloy J. I will follow the same course. Although I agree with her ultimate conclusion, I reach that result for somewhat different reasons. [26] Molloy J. was satisfied that the arbitrator’s decision was patently unreasonable either because it ignored the plain meaning of Article 10.02, or because it gave a patently unreasonable meaning to the 10-day notice requirement in Article 10.02(b). (a) The interpretation of Article 10.02 [27] The analysis of Molloy J. concerning the plain meaning of Article 10.02 is persuasive. I need not, however, decide whether that interpretation is the correct one, or more to the point whether the interpretation favoured by Arbitrator Burkett is patently unreasonable. I do not think it matters whether that interpretation was correct, incorrect or even patently unreasonable. As Molloy J. observed, Arbitrator Burkett was obliged by Article 9.103 of the Collective Agreement to apply the interpretation given to the clause in previous arbitration cases. I cannot understand how it can be said at one and the same time that Arbitrator Burkett was obliged to apply that interpretation, but that a decision which flowed from that interpretation was patently unreasonable. [28] Given the presence of Article 9.103 in the Collective Agreement, the question on judicial review was not whether the established interpretation of Article 10.02 adopted by Arbitrator Burkett was patently unreasonable, but rather whether his decision that he was bound to apply that interpretation was patently unreasonable. Canada Post does not argue that in so far as the interpretation of Article 10.02 is concerned, Arbitrator Burkett should have distinguished this case from the previous decisions. Instead, Canada Post argues that the interpretation arrived at in the earlier cases is wrong. [29] I do not think it was open to the arbitrator to consider the correctness of the interpretation of Article 10.02 provided in the previous cases. Article 9.103 compelled him to accept that interpretation. That Article reflects a considered decision by Canada Post and the Union to avoid the costs, uncertainty and labour strife associated with never-ending interpretation and re-interpretation of the same provisions of the Collective Agreement through the grievance process. Canada Post and the Union preferred to live with the certainty of a fixed interpretation of the agreement and to leave alteration to the collective bargaining process. [30] In holding that the reasonableness of the interpretation of Article 10.02 adopted by Arbitrator Burkett is not relevant to whether his decision was patently unreasonable, I do not think that I am restricting the powers of judicial review accorded to the courts. In the present context, judicial review refers to the court’s authority to review the arbitrator’s interpretation of the Collective Agreement, applying a patent unreasonableness standard. The Collective Agreement includes both Article 10.02 and Article 9.103. The question on judicial review must, therefore, be whether Arbitrator Burkett’s interpretation of Article 10.02 is patently unreasonable in the light of Article 9.103. Any consideration of the reasonableness of Article 10.02 without having regard to Article 9.103 would amount not to judicial review, but to a judicial amendment of the Collective Agreement entered into between Canada Post and the Union. [31] Arbitrator Burkett was obligated to accept the interpretation of Article 10.02 formulated in the earlier decisions. By complying with that obligation, he cannot be said to have rendered a patently unreasonable decision. (b) The commencement of the 10-day period [32] For ease of reference, I repeat Article 10.02(b) of the Collective Agreement: 10.02(b) No report may be placed in the file or constitute a part thereof unless a copy of the said report is sent to the employee within ten (10) calendar days after the date of the employee’s alleged infraction or of its coming to the attention of the Corporation, or of the Corporation’s alleged source of dissatisfaction with him or her. [Emphasis added.] [33] This provision of the Collective Agreement is designed to ensure that employees who face disciplinary action will receive prompt notice of the reason for that action so that they might fully defend themselves. That purpose must, however, be balanced against Canada Post’s need to have the information required to make a decision which promotes and protects Canada Post’s statutory mandate and is also fair to the employees caught up in the disciplinary process: Canada Post Corp. v. C.U.P.W. re Seifried, March 13, 1989 (Weatherill); Canada Post Corp. v. C.U.P.W. re G. Joong, March 7, 1994 (Burkett). [34] A host of arbitrators, recognizing that Article 10.02(b) balances these interests, have held that an alleged infraction cannot be said to have “come to the attention” of Canada Post until Canada Post is, or reasonably should have been, in a position to make an informed and fair decision as to whether an infraction had occurred and, if so, whether that infraction warranted a report: eg. see Williams v. Treasury Board (Post Office Department), unreported August 13, 1979 (Mitchell); Canada Post Corp. v. C.U.P.W. re Ortman, April 13, 1998 (Norman); Canada Post Corp. v. C.U.P.W. re Paradis, May 30, 1997 (McCaffrey); Canada Post Corp. v. C.U.P.W. (Gibson) (1987), 27 L.A.C. (3d) 27; Canada Post Corp. v. C.U.P.W. re G. Joong, supra. [35] Williams v. Treasury Board (Post Office Department), supra, is the seminal case on the interpretation of Article 10.02(b). In Williams, an employee was observed destroying Canada Post property and committing other criminal offences in the course of an illegal strike. The employee’s supervisor prepared a report detailing the employee’s actions on the day they occurred. Several weeks later the employee was advised that he would be discharged because of his conduct during the illegal strike. He grieved contending that Canada Post had failed to comply with the notice requirement in Article 10.02(b) and could not, therefore, rely on his alleged misconduct during the strike as a reason for firing him. [36] Deputy Chairman Mitchell rejected the grievor’s interpretation of the Article. Speaking generally, at p. 16 he described Article 10.02(b) in these terms: An infraction cannot reasonably be alleged against an employee without prior investigation by the employer regarding the circumstances surrounding the alleged misconduct. It is only after the completion of an investigation that an employer may reasonably conclude whether grounds exist for alleging that an infraction had occurred. It is that date on which the alleged infraction can be said to have come to the attention of the employer as contemplated by 10.02(b). Once an employer has come to the conclusion that an infraction which warrants discipline has occurred it is its duty to so inform the employee within the ten days referred to in Article 10.02(b) to constitute a report which may properly become part of the employee’s personal file referred to in Article 10.02(a). The report to the employee that such an infraction occurred may be sent within ten days after its occurrence or within ten days after the employer has concluded that an infraction warranting discipline has occurred. Therefore, the period in which the employee is entitled to receive a report pursuant to 10.02(b) runs either from the date of the occurrence of the incident or from the date the employer was able to reasonably conclude that an infraction warranting disciplinary action had occurred. The establishment of that date is a matter of evidence to be adduced by the employer during the hearing if the admissibility of any document is the subject of an objection. [Emphasis added.] [37] Turning from the general to the specific case at hand, Deputy Chairman Mitchell said at p. 29: It is important to note that in the circumstances of this illegal strike and illegal picketing activity by many hundreds of employees it was reasonable for the employer in such a situation to require a high degree of centralization of the decision-making process. It was necessary to review and analyze each incident to determine whether an infraction had in fact occurred and if so whether or not a report should be made and indeed whether discipline should be imposed. If discipline was to be imposed in a fair manner it was also necessary to centralize decision-making as to the severity of the discipline to be imposed in each case in an effort to avoid discriminatory results. [Emphasis added.] [38] Applying this contextual approach to Article 10.02(b), Deputy Chairman Mitchell held that the alleged infraction did not come to the attention of Canada Post until reports concerning that alleged infraction had worked their way up the chain of command, had been considered and analyzed by those responsible for deciding what action, if any, should be taken, and the employee had been given a chance to respond to the allegations. [39] The approach to Article 10.02(b) taken by Deputy Chairman Mitchell recognized that the nature of the investigation required and the context in which the alleged misconduct occurred had to be taken into consideration in deciding when the alleged infraction came to the attention of Canada Post for the purposes of Article 10.02(b). In some circumstances, a reasonable period of time had to be allowed to permit Canada Post to gather the necessary information, place that information before the appropriate decision-maker and permit that decision-maker to make a considered assessment of what steps, if any, should be taken by Canada Post. Importantly, this process served the interests of both Canada Post and the employees in that it allowed for decisions which protected Canada Post’s interests, but also avoided unfairness to individual employees. [40] The interpretation of Article 10.02(b) put forward in Williams v. Treasury Board (Post Office Department), supra, has been repeatedly applied in arbitration cases. In Canada Post Corp. v. C.U.P.W. re Ortman, supra, an employee was seen hitting a replacement employee with a rock during an altercation that occurred in the course of a strike. The employee was arrested on the scene and charged with serious criminal offences. Canada Post had knowledge of the incident and the arrest on the day it happened. About two weeks later, Canada Post fired the employee. He grieved arguing that he had not received notice within the 10 days contemplated by Article 10.02(b). Arbitrator Norman held that in the circumstances it was “entirely understandable” that local management would want to consult with more senior persons before deciding what disciplinary steps should be taken. He said, at p. 6: … Canada Post was dealing with many acts of violence both to persons and property on a daily basis, across this country. I very much endorse Mr. Mitchell’s point in Williams [supra] that “if the employer decides to impose disciplinary penalties on a hundred or more employees much more time is required to avoid discriminatory results in such circumstances than in isolated cases warranting discipline”. Accordingly, I find that the alleged infraction cannot, in fairness, be deemed to have come fully to the attention of the corporation until some days following June 23 [the date of the alleged incident]. Therefore I find no violation of Article 10.02(b). [41] Arbitrator Burkett was certainly aware of Williams v. Treasury Board (Post Office Department), supra, and the cases which had followed it. Indeed, at least one of those cases was authored by Arbitrator Burkett. After a review of some of these decisions, he said: … [A]n investigation is sometimes required in order to obtain the knowledge necessary to confirm the existence and extent of the misconduct and/or the identity of the individual(s) responsible and that where, on the facts, such an investigation is required to obtain such information, the article 10.02 time limit for notification to the affected individual(s) does not commence to operate until the investigation is complete. [Emphasis added.] [42] Having accurately identified the fact-sensitive approach to the commencement of the 10-day time period in Article 10.02(b) dictated by the previous cases, Arbitrator Burkett then departed from that approach in at least five ways. First, rather than considering the nature of the investigation required to “confirm the existence and extent” of the misconduct, he recast the issue in terms of Canada Post’s entitlement to an exemption from the notice requirement to avoid compromising an ongoing investigation. Canada Post did not seek any exemption from the notice requirement. It did maintain, however, that it was entitled to conduct an investigation which would allow it to uncover fully the nature and extent of each employee’s misconduct. By the nature and extent of the misconduct, I refer to such matters as the type of misconduct engaged in by an employee, the frequency of the misconduct by individual employees and the connection, if any, among the various employees involved in the misconduct. These matters could be assessed only upon the completion of a covert investigation of reasonable duration. [43] For example, an employee might have been videotaped apparently discarding a piece of bulk mail on the first day of the investigation. The significance of that conduct could only be accurately and fairly evaluated for disciplinary purposes when viewed in the context of the entire investigation. If that employee continued on a regular basis to discard mail, the disciplinary ramifications might be very different than if the conduct on the initial day turned out to be a single isolated act for which there was some explanation. [44] Second, Arbitrator Burkett failed to consider that the misconduct under investigation was ongoing and involved many employees. This was not an investigation into past misconduct by one or two employees. As observed in Williams, supra, where acts of misconduct occur in the course of ongoing illegal activity involving many employees, Canada Post must have the opportunity to assess the action of individual employees in the context of the entirety of the illegal activity. That assessment cannot be made until Canada Post has an opportunity to fully investigate the entirety of the activity and consider the acts of the individual employees in the context of that activity. [45] Third, Arbitrator Burkett rejected the contention that Canada Post did not have knowledge of the alleged infractions until those responsible for determining whether disciplinary action should be taken had that knowledge. He found that knowledge of the security personnel sufficed. I accept as correct his refusal to compartmentalize Canada Post for the purpose of determining the requisite knowledge of Canada Post. Arbitrator Burkett’s approach, however, ignores the holding in Williams, supra, and Ortman, supra, to the effect that where numerous acts of misconduct involving many employees are involved, the time period in Article 10.02(b) does not begin to run until those responsible for making the relevant disciplinary decisions have had a reasonable opportunity to consider the conduct of individual employees in the context of the entire investigation. Arbitrator Burkett focused exclusively on Canada Post’s knowledge and ignored Canada Post’s need to consolidate the information available to it and to co-ordinate and centralize its decision-making process. On the facts of this case, those processes were properly viewed as part of the necessary investigation. [46] Fourth, Arbitrator Burkett held that since the investigation was an internal one, the laying of criminal charges was irrelevant to the operation of the 10-day time period. The laying of the criminal charges was in fact the ultimate event which precipitated the decision by Canada Post to discharge the employees. Canada Post discharged those employees against whom the police laid criminal charges. Where, as here, an employer discharges on the basis of alleged criminal conduct, it seems to me entirely reasonable and indeed fair to the employees to act only against those who the police, who are after all the “experts” when it comes to determining whether crimes have occurred, determine there are reasonable and probable grounds to believe have committed criminal offences. The decision by the police to lay criminal charges against certain employees was an essential prerequisite to Canada Post’s decision to proceed with disciplinary action. All of the facts relevant to the employees’ “alleged infraction” were not in place until the police had made that decision. [47] The decision by the police to lay criminal charges was also relevant in a second way. By virtue of Article 41.02, Canada Post could rely on the video surveillance in discipline proceedings only if the employees were engaged in “a criminal act”. Without the video surveillance, Canada Post had no grounds upon which to believe that any employee had committed an infraction. Canada Post took the position that it was only after the police decided to charge particular employees that it had grounds to believe that the video surveillance would be admissible on discipline proceedings. While Arbitrator Burkett eventually held that this interpretation of Article 41.02 was incorrect, I agree with Molloy J. that the ultimate correctness of Canada Post’s interpretation of the Article was not crucial. What is important is Canada Post’s bona fide determination that the laying of criminal charges by the police was a prerequisite to its ability to determine that an employee had committed a “criminal act” for the purposes of Article 41.02. This was a reasonable if incorrect interpretation of Article 41.02. In fact, this interpretation enhanced the fairness of the discipline process by limiting disciplinary action to those employees who, in the view of the police, there were reasonable and probable grounds to believe had committed a criminal offence. In my view, it was entirely appropriate for Canada Post to view the police assessment of the conduct of the individual employees as a relevant consideration in its determination of whether an employee had engaged in a disciplinable infraction. [48] Finally, in arriving at his interpretation of when the 10-day period should operate, Arbitrator Burkett said: … While the decision of the Corporation is understandable from a security perspective, it was made in the face of article 10.02 and in the absence of a single award upholding an exemption from the 10 calendar day notice requirement of article 10.02 in any situation where an individual has been identified as having committed alleged acts of misconduct. [Emphasis added.] [49] With respect, this is not an accurate description of the authorities. In both Williams, supra, and Ortman, supra, the 10-day notice period did not run from the date on which the individuals were identified as committing alleged acts of misconduct, but rather from the date on which those responsible for making discipline decisions had a reasonable opportunity to assess the individual acts of misconduct in the context of the activities revealed by a much broader investigation involving many employees. VI [50] Like Molloy J., I come to the conclusion that the established authorities call for a fact-specific determination of when the 10-day time period in Article 10.02(b) begins to run. That inquiry allows the arbitrator to consider both an employee’s right to timely notice of the basis for disciplinary action and Canada Post’s obligations to both fulfil its statutory mandates and act fairly towards its employees in disciplinary matters. Arbitrator Burkett focused on one factor, the identification of the individuals on the videotape, to the exclusion of all other relevant factors in determining when the 10-day time period should run. In doing so, he arrived at a conclusion which sacrificed entirely Canada Post’s legitimate interests. Had he considered all of the factors, in my view, he would have concluded that the alleged infraction came to the attention of Canada Post when the criminal charges were laid. That interpretation would have permitted Canada Post to fulfil its obligations to its clients and its employees without in any way compromising the employees’ right to timely notice. By departing from the approach announced in previous cases and taking an approach which ignored Canada Post’s interests and obligations, Arbitrator Burkett rendered a patently unreasonable decision. [51] I would allow the appeal, quash the decision of Arbitrator Burkett and direct that the arbitrations proceed on their merits. I see no reason why Arbitrator Burkett should not conduct those arbitrations if he is prepared to do so. [52] Canada Post is entitled to its costs in the Divisional Court, on the leave application to this court and on the appeal. Signed: “Doherty J.A.” MOLDAVER J.A.: [53] I have had the benefit of reading the reasons of my colleague Doherty J.A. and I agree with his conclusion on the first issue, namely, that Arbitrator Burkett's interpretation of Article 10.02(a) cannot be said to be patently unreasonable. In so concluding, I find it unnecessary to focus, as my colleague has, on the significance of Article 9.103. [54] As for the second issue regarding the commencement of the ten-day notice period specified in Article 10.02(b), I am respectfully unable to agree with my colleague's conclusion that Arbitrator Burkett “rendered a patently unreasonable decision”. While I agree that the result arrived at by the arbitrator may be difficult to swallow, I have not been persuaded that the decision under review is patently unreasonable, a label reserved for decisions that are “evidently not in accordance with reason” or “clearly irrational”. (See Canada (Attorney-General) v. Public Service Alliance of Canada (1993), 101 D.L.R. (4th) 673 per Cory J. for the majority at pp. 690 and 691.) [55] No doubt, as my colleague points out, Arbitrator Burkett could have approached the matter differently and arrived at what some would consider to be a more palatable and sensible result. But an unpalatable result does not necessarily translate into a patently unreasonable decision. This case illustrates the point, especially when one considers that as a result of prior arbitral decisions of which Canada Post was aware, the outcome arrived at by Arbitrator Burkett is precisely the one that Canada Post foresaw and took steps to avoid from the outset. Those steps included: · Canada Post's unsuccessful attempt to have the police conduct the investigation. · Canada Post's unsuccessful attempt to have the police take the necessary steps to convert its “in-house” investigators into special constables. · The conscious decision by Canada Post's lead investigator to keep line management and labour relations personnel in the dark about the nature and results of the investigation until shortly before or immediately after the laying of criminal charges on June 12, 1997. While not dispositive, I find it somewhat disingenuous for Canada Post to now argue that Arbitrator Burkett's decision is patently unreasonable when it is precisely the one that Canada Post foresaw and anticipated, based on its knowledge and understanding of the existing arbitral jurisprudence. [56] To be sure, Canada Post had good cause to be concerned. Of the many previous arbitral decisions of which it was aware, three in particular foreshadowed the result which it feared. They are: Canada Post v. CUPW Re: Joong, [March 7, 1994 (unreported)], in which Arbitrator Burkett ordered the reinstatement of an employee, allegedly guilty of theft from the corporation, by reason of the corporation's failure to comply with the ten-day requirement in Article 10.02(b); Canada Post v. CUPW Re: Marini (1987) 26 L.A.C. (3d) 403 in which Arbitrator Swan, at p. 423 observed that: “there may be circumstances where, by waiting until the administration of the criminal law has run its course, the employer will simply have lost the opportunity to discipline an employee who would otherwise be disciplinable”; and Purolator Courier v. Canada Council of Teamsters, Local 938 Re: Iafrate, [1999] C.L.A.D. No. 215 in which Purolator Courier, a wholly owned subsidiary of Canada Post, negotiated in its collective agreement an exemption from the notification time limits as follows: “in the case of criminal investigation (for example theft, drugs, fraud), the time period does not commence until all conclusions have been drawn from the investigation”. [57] In sum, as a result of these three decisions, Canada Post knew or should have known that failure to comply with the notice requirements of Article 10.02(b) could lead to the reinstatement of an employee otherwise guilty of theft, that conducting a criminal investigation in a certain way could result in an inability to discipline, and that Article 10.02(b) did not contain exempting language similar to that found in the Purolator agreement. More importantly, for present purposes, those decisions paved the way for Arbitrator Burkett to decide the case as he did. At very least, they lay waste to the submission that his decision must be found to be clearly irrational. [58] As my colleague points out, Arbitrator Burkett was familiar with the arbitral decisions surrounding the commencement of the ten-day time period in Article 10.02(b). In particular, he accepts that Mr. Burkett was fully aware of the “contextual” or “fact-sensitive” approach that previous arbitrators had applied in determining when an alleged infraction could be said to have “come to the attention” of Canada Post within the meaning of that provision. My colleague however contends that Arbitrator Burkett “departed from that approach” and rendered a patently unreasonable decision by “taking [instead] an approach which ignored Canada Post’s interests and obligations”. With respect, I disagree. [59] To begin, it must be emphasized that no matter how one chooses to label the approach for determining the commencement of the ten-day time period, in the last analysis, the question boils down to one of fact for the arbitrator. See Canada Post v. CUPW Re: Dennie, [June 23, 1999, (Von Veh) (unreported)] and CUPW and Canada Post Corporation Re: Horton, [January 18, 1983 (Outhouse) (unreported)]. [60] Here, Arbitrator Burkett found as a fact that the alleged infractions came to the attention of Canada Post on the date that its investigators were able to identify by name an employee whom they had previously identified from video tape as having engaged in misconduct. That finding was firmly founded on the evidence and unless it was one that Arbitrator Burkett could not make as a matter of law without crossing the “clearly irrational” line, the appeal must, in my view, fail. Expressed somewhat differently, to succeed, Canada Post must establish that Arbitrator Burkett had no choice but to find, as my colleague has, “that the alleged information came to the attention of Canada Post when the criminal charges were laid” and that any other finding must, in the circumstances, be viewed as patently unreasonable. [61] When the matter is framed that way, as I believe it should be, the weakness in Canada Post’s argument becomes apparent. Specifically, Canada Post cannot show that Arbitrator Burkett's finding is one that he was foreclosed as a matter of law from making. The best it can do is argue that on the basis of earlier decisions, it was open to him to find that this was a case of special circumstances and that Canada Post was therefore correct in its position that the ten-day notice period did not begin to run until the laying of the criminal charges. But as Arbitrator Burkett pointed out: “none of these cases [the earlier decisions] can be relied upon in support of the proposition that notwithstanding the positive identification of an individual employee as having engaged in disciplinable conduct, the corporation, in the interest of maintaining the secrecy of an ongoing covert investigation, is not bound by the requirement in article 10.02 to put the employee on notice within ten days”. [Emphasis added]. Canada Post has provided no authority to the contrary and none, to my knowledge, exists. [62] To be sure, Arbitrator Burkett could have gone the other way and emphasized the interests of the employer over those of the employees. But in my view, he was not obliged to do so, especially in light of the primary purpose of Article 10.02(b) which Arbitrator Burkett identified in his reasons at p. 22 as follows: Before proceeding to apply the article 10.02 requirements to the facts here, it is important to emphasize that article 10.02 is designed to benefit individual employees by requiring notice of intended disciplinary action within a stipulated time. The clause is designed to regulate employer action as it applies to individual employees in a manner that it would not otherwise be regulated and to provide consequences for breach that would not otherwise exist. The clause speaks to individual conduct and to the placing of a report on the individual's file and the requirement that the individual employee be provided with a copy of the said report within 10 calendar days of the “employee's” alleged infraction. The focus is upon the individual employee. It is with this purpose in mind that article 10.02 must be interpreted and applied. [Emphasis added] [63] In his thorough and detailed analysis, my colleague refers to five instances in which Arbitrator Burkett allegedly went wrong and departed from the “fact-sensitive approach to the commencement of the ten-day time period in Article 10.02(b) dictated by the previous cases”. In summary form they are: 1. He failed to consider the nature of the investigation required to “confirm the nature and extent” of the misconduct and instead, recast the issue in terms of Canada Post’s entitlement to an exemption from the notice requirement to avoid compromising an ongoing investigation. 2. He failed to consider that the misconduct under investigation was ongoing and involved many employees. 3. In rejecting Canada Post’s contention that it did not have knowledge of the alleged infractions until those responsible for determining whether disciplinary action should be taken had that knowledge, he focused exclusively on Canada Post’s knowledge and ignored Canada Post’s need to consolidate the information available to it and to coordinate and centralize its decision-making process. 4. Having determined that the investigation undertaken by Canada Post was an internal one, he erred in holding that the laying of criminal charges was irrelevant to the operation of the ten-day time period. 5. He misconstrued the arbitral authorities in stating that “the decision of the corporation … was made … in the absence of a single award upholding an exemption from the s.10 calendar day notice requirement of article 10.02 in any situation when an individual has been identified as having committed alleged acts of misconduct”. [64] Beginning with the last of these alleged errors, a fair reading of the arbitrator’s reasons makes it clear that he was referring to the absence of an award upholding an exemption from the s. 10 calendar day notice requirement, in the interest of maintaining the secrecy of an ongoing covert investigation, where an individual has been identified as having committed alleged acts of misconduct. In this, he was entirely accurate. [65] With respect to the alleged errors in items 1 and 2, I am respectfully of the view that Arbitrator Burkett did not miscast the issue before him, nor did he fail to appreciate that the conduct under investigation was ongoing and involved many employees. His reasons make it clear that the issue at hand, as he perceived it, was a novel one, namely: Whether or not the corporation could sit on the identification of an individual suspect without moving to discipline in the interest of maintaining the secrecy of an ongoing investigation …. (p. 23) [66] In my view, far from miscasting the issue, that is precisely the issue raised by the evidence and argued by the parties. With respect, I do not understand Canada Post to suggest otherwise. [67] As for the nature and extent of the misconduct under investigation, it is clear from his reasons that Arbitrator Burkett was aware that the misconduct was ongoing and involved many employees. The following excerpt is but one example: I have a full understanding of the predicament faced by the corporation in this matter; a predicament which, on the evidence, was concerning to those in charge of this investigation. On the one hand, the corporation, governed by its statutory mandate to protect the integrity of the mail, was required to respond to what appeared to be a widespread theft problem at the Gateway facility and to do so by the only effective means available; covert video surveillance. [Emphasis added] (p. 35) [68] In short, I am satisfied that when Arbitrator Burkett’s reasons are read fairly as a whole, it is apparent that he was alive to both the type of investigation required to confirm the nature and extent of the misconduct and the fact that the misconduct under investigation was ongoing and involved many employees. [69] Turning to the third of the alleged errors, if Arbitrator Burkett “ignored Canada Post’s need to consolidate the information available to it and to coordinate and centralize its decision-making process”, it was because this was a non-issue on the evidence. Senior management did not suggest that time was needed to coordinate or centralize the decision-making process. Rather, the evidence indicates that senior management was not informed of the nature and results of the investigation until shortly before or immediately after the laying of criminal charges. This was a product of a conscious decision on the part of Mr. Swedish, Canada Post’s lead investigator, to keep senior management in the dark so as to avoid triggering the ten-day rule. Accordingly, Arbitrator Burkett cannot be faulted for failing to consider an issue not raised by the evidence. [70] Turning to the fourth alleged error, in view of the evidence before him, I do not agree that Arbitrator Burkett erred in placing little or no relevance on the laying of criminal charges in assessing when Canada Post had the requisite knowledge needed to trigger the ten-day rule in Article 10.02(b). As Arbitrator Burkett stated: This is not a case where, because of an ongoing police investigation, the corporation can be deemed to lack the knowledge necessary to trigger the article 10.02 requirements until advised of the results of the police investigation. Rather, this is a case where the corporation itself carried out the investigation and positively identified those who it considered to have engaged in criminal misconduct based on the evidence that it gathered. (p. 28) [71] That finding was clearly open to the arbitrator and in view of it, I cannot accept my colleague’s assertion that “the laying of criminal charges against certain employees was an essential prerequisite to Canada Post’s decision to proceed with disciplinary action”. No evidence to that effect was led and the suggestion is at odds with the express finding of the arbitrator. [72] For these reasons, unpalatable though the arbitrator’s decision may be, I am not persuaded that it is patently unreasonable. Based on the existing arbitral decisions, it was open for Arbitrator Burkett to come to the conclusion he did. The fact that this court might consider his decision to be incorrect or even unreasonable is of no moment. The decision must stand unless it can be found to be clearly irrational. Close though this case may be, in my view, the decision under review does not cross that line. To the extent that Canada Post is unhappy with the outcome, its remedy lies in the bargaining process, not the judicial process. [73] I would accordingly dismiss the appeal with costs. Signed: “M.J. Moldaver J.A.” “ J.J. Carthy J.A.” RELEASED: NOVEMBER 15, 2001 [1] Canada Post relied on 76 videotaped incidents of criminal misconduct involving the 29 employees. Sixteen of the employees were involved in more than one incident. The majority of the incidents (about two-thirds) occurred after May 1, 1997. [2] Of the 29 employees, five pleaded guilty, one was convicted after a trial, five were acquitted after trial, and charges against the others were dropped.