Dagher, et al. v. McDonnell-Ronald Limousine Service Limited

Dagher, et al. v. McDonnell-Ronald Limousine Service Limited Collection Decisions of the Court of Appeal Date 1999-11-05 Docket numbers C30768 Judges Finlayson, George Duncan; Moldaver, Michael James; Sharpe, Robert J. Subject Civil Decision Content DATE: 19991105 DOCKET: C30768 COURT OF APPEAL FOR ONTARIO FINLAYSON, MOLDAVER and SHARPE JJ.A BETWEEN: EMILE DAGHER, SHOUKAT CHOUDRY, ) Ronald G. Slaght, Q.C. MAURICE KHOURY, JOHN LIMNIDIS, ) for the appellant WAYNE KING, LUCIAN COURAUD SR. ) and ROY HARLAND ) ) Cynthia D. Watson (Applicants/Respondents) ) for the respondents ) –and– ) ) McDONNELL-RONALD LIMOUSINE ) SERVICE LIMITED ) ) (Respondents/Appellant) ) ) ) Heard: October 7, 1999 On appeal from the judgment of Brennan J., without a jury, dated September 25, 1998 FINLAYSON J.A.: [1] This appeal requires us to decide whether a judge of what is now the Superior Court of Justice properly assumed jurisdiction in an application arising from a protracted labour dispute between the parties. The proceedings [2] The employer, the appellant McDonnell-Ronald Limousine Service Limited, holds 119 permits to operate a limousine service to and from Lester B. Pearson International Airport. The respondents are drivers in the appellant's limousine service. [3] The appellant has entered into a contract known as a Service Agreement with various individuals referred to as brokers. Under the Service Agreement, brokers obtain the right to operate an airport limousine. Brokers pay a monthly brokerage fee to the appellant for the use of the permit and for dispatch and accounting services provided by the appellant. Brokers sometimes drive limousines themselves, or they may lease their right to drive to others. [4] Drivers of the appellant's limousines are members of a bargaining unit represented by Local 1703 of the Amalgamated Transit Union ("Union"). Drivers may be brokers, or they may simply drive under agreements with brokers. Brokers are not members of the bargaining unit unless they are also drivers. [5] The respondents are all drivers and thus members of the bargaining unit and the Union. Five of the respondents are also brokers, who have entered Service Agreements with the appellant. Two of the respondents (Emile Dagher and Wayne King) claim to have entered an oral lease with a broker and to have thereby acquired all of the contractual rights of a broker. [6] The Service Agreements between the brokers and the appellant renew annually with identical terms except that the appellant may increase the brokerage fee in accordance with the terms of Schedule A. Schedule A sets the monthly fee at $630, effective August 1, 1984 to December 31, 1984. It permits the appellant to increase the brokerage fee according to the following formula: … Dispatching and Brokerage annual fee increases shall not exceed the Consumer Price Index as published by Statistics Canada for the proceeding year and ten (10%) per cent whichever is less; provided that the Corporation shall be permitted at any time to, after December 31st, 1984, make an application for an amount in excess of the Consumer Price Index … [7] In addition to the Service Agreements between the appellant and the brokers, the appellant and the Union entered a collective agreement, effective November 8, 1995 to November 8, 1997, which recognized the Union as the exclusive bargaining agent for all drivers of the appellant's limousine company. The collective agreement granted the appellant the right to "…continue to have the right to require Service Agreements from all brokers and broker drivers." The agreement defined "brokers" as those "who are signatory to a Service Agreement with the Company granting them rights as a 'broker'". The collective agreement provided that the monthly brokerage fee payable by those in the bargaining unit was to remain at $775 per month for the duration of the agreement. [8] The collective agreement expired on November 9, 1997. No new collective agreement has since been signed despite negotiations between the Union and the appellant. [9] In a letter to all brokers, lessees and drivers dated December 29, 1997, the appellant announced that effective January 3, 1998: Since your working relationship with the Company will no longer be governed by the terms and conditions of the expired Collective Agreement the Company hereby advises that it wishes to continue your working relationship with the Company effective January 3, 1998 in accordance with the following terms and conditions: … 2. The Company will continue to apply the terms and conditions of the existing Service Agreements; … 4. Until the Company enters into a new Collective Agreement with the Union, it will not be collecting union dues. 5. …[S]ervice fees charged by the Company will remain at $775 for the month of January, 1998. The Company is hereby providing 30 days' notice the service fees will be increased to $925 per month, effective February 1, 1998…. [10] The Union commenced two applications before the Ontario Labour Relations Board ("OLRB") under s. 96 of the Labour Relations Act, 1995 , S.O. 1995, c.1, Sched. A,(the "Act") alleging that the appellant had violated various provisions of the Act including the obligation to bargain in good faith. These proceedings, which were initiated on January 12, 1998, were consolidated with a decertification application initiated by certain employees of the appellant that had been filed on September 15, 1997 and was still pending before the OLRB. That application sought a declaration that the Union no longer represented the employees in the bargaining unit. The Union responded that the application was tainted by management sponsorship. [11] In support of the allegation that the appellant had failed to bargain in good faith, the Union asserted that: …the Employer did not intend to enter into good faith negotiations insofar as the Employer insisted on a brokerage fee increase of approximately twenty percent (20%). Such an increase is unlawful pursuant to the provisions of the service agreements between the brokers and the Employer. [12] At a hearing brought by the Union for interim relief in the s. 96 application, the appellant contested the jurisdiction of the OLRB. It contended that the relationship between it and the brokers was governed by a commercial contract, which continued to exist outside of the collective agreement. The appellant also took the position that the fee increase was lawful because the collective agreement had expired. [13] The OLRB issued its decision on the application for interim relief on February 27, 1998. The decision of the majority of the Board noted that the collective bargaining history of the parties "…can be described as turbulent." The majority commented as follows about the brokerage fee increase: The union … asserts that the employer is restricted by the terms of the service agreement, from imposing a 20 percent increase at this time. And while that prohibition may be found in the terms of what might be characterized as a term of a private contract between the company and its brokers, the union asserts that it is a violation of the Act for the company to have implemented that increase. The union's argument acknowledges that, when the parties are in a strike/lockout position, an employer is generally permitted to make unilateral changes to the terms and conditions of employment of bargaining unit employees without offending the Act. … We understand that the employer asserts first of all that the Board ought not to engage in an interpretation of the rights and obligations set out in the service agreement, a document it sees as a private contract between the company and the individual brokers. We further understand that the employer asserts that, even if the Board were to engage in such an exercise, the conclusion advanced by the union (i.e. that the 20 percent increase is contrary to the terms of the service agreement) is an incorrect interpretation. The employer may well ultimately persuade us of the veracity of either or both of those propositions. That is a determination that may have to be made in the main application. For the present purposes, however, our concern is whether the union has established an arguable case. As we have already indicated, we are satisfied that it has. [14] In the result, the majority of the OLRB refused the Union's request to grant an interim order on the basis that the Union had failed to establish sufficient harm to labour relations if relief were not granted. Specifically, the majority concluded that the relief sought was primarily financial in character and thus amenable to an award of damages. What is important for our purposes is that the respondents invoked the jurisdiction of the OLRB and asserted and continues to assert jurisdiction over the dispute between the parties. [15] On May 29, 1998, following the OLRB’s ruling on the interim relief application, the respondents commenced an application in the then Ontario Court (General Division). The respondents sought, inter alia, a declaration that the appellant had violated the terms of the Service Agreement by imposing an increase in brokerage fees in excess of the annual increase in the Consumer Price Index (CPI). [16] In a brief endorsement released September 25, 1998, the application judge rejected the appellant's argument that it was entitled to a cumulative increase of an amount equivalent to the yearly increases in the CPI between 1988 and 1998. He also rejected the appellant's argument that he was without jurisdiction to decide the matter, stating: The contract which is the subject of this application was entered into long before certification of the bargaining unit and before the collective agreement came into existence. Although the collective agreement included a provision prohibiting the company from invoking the Service Agreement's provision to increase those fees, in my view it did not alter the commercial contract, and the interpretation of that contract remains within the jurisdiction of this Court. I am mindful of the decision in Weber v. Ontario Hydro (1995), 125 D.L.R. (4th) 583 (S.C.C.), but I consider it distinguishable. The agreement in question pre- dates the collective agreement, and its provisions govern the relations of persons outside the bargaining unit. Analysis [17] With respect to the applications judge, Weber v. Ontario Hydro is not distinguishable from this case. The fact that the Service Agreement pre-dated the collective agreement is of no significance. The contractual terms respecting the brokerage fees in the Service Agreement ceased to govern the parties once the appellant entered into the collective agreement with the respondents' bargaining agent. That collective agreement negotiated with the Union as the official bargaining agent of the respondent employees placed the parties to this agreement squarely within the jurisdiction of the OLRB. This is so even after the collective agreement has expired in accordance with its terms where, as here, the parties were negotiating a new collective agreement and one of the parties alleged that the other engaged in unfair labour practices under the Act. In the case in appeal, the central issue that arose following the expiry of the collective agreement was whether the employer violated its obligation to bargain in good faith by imposing the 20% fee increase under the Service Agreement. This is a matter that was within the exclusive jurisdiction of the OLRB to decide under s.96 of the Act. [18] It was a mistake for the application’s judge to entertain this matter. He could not resolve the overall dispute between the parties and essentially was being asked to determine a subsidiary issue in a labour conflict that was already before the OLRB, a fact that was conceded in effect by the respondents’ counsel. Under s.114(1) of the Act, the OLRB has exclusive jurisdiction to exercise power conferred upon it under the Act and to determine all questions of fact and law that arise in any matter before it. The actions or decisions of the OLRB are final and conclusive for all purposes. [19] That this is the law has been recognised by our courts in a long line of decisions that were accepted as authoritative by the Supreme Court of Canada in St. Anne-Nackawic Pulp & Paper Co. Ltd. v. C.P.W.U., Local 219 (1986), 28 D.L.R. (4th) 1. Estey J., speaking for the Court, stated at p. 12: The more modern approach is to consider that labour relations legislation provides a code governing all aspects of labour relations, and that it would offend the legislative scheme to permit the parties to a collective agreement, or the employees on whose behalf it was negotiated, to have recourse to the ordinary courts which are in the circumstances a duplicate forum to which the Legislature has not assigned these tasks. [20] Since St. Anne-Nackawic Pulp & Paper, the extent of the jurisdiction of the OLRB, has, if anything, been enlarged by the Supreme Court. Weber v. Ontario Hydro, supra, involved the interpretation of s. 45(1) of the Labour Relations Act, R.S.O. 1990, c. L.2 [now s. 48(1) of the Act], which states: Every collective agreement shall provide for the final and binding settlement by arbitration, without stoppage of work, of all differences between the parties arising from the interpretation, application, administration or alleged violation of the agreement, including any question as to whether a matter is arbitrable. [21] McLachlin J., speaking for the Court on this point, explained that in deciding whether a dispute is to be arbitrated or if it is properly before the courts, what matters is “…not the legal characterization of the claim, but whether the facts of the dispute fall within the ambit of the collective agreement (at p. 600).” She concluded that in light of the mandatory arbitration clause in s. 45(1), the jurisdiction issue falls to be decided by considering, “…whether the dispute, viewed with an eye to its essential character, arises from the collective agreement (at p. 607).” [22] Although Weber involved the interpretation of the mandatory arbitration provision of the Act, the same principles apply to the case at bar. The Supreme Court in Gendron v. Supply and Services Union, P.S.A.C., Local 50057, [1990] 1 S.C.R. 1298 at 1326 established that the principles of deference apply equally to the decision-making structure under the collective agreement and to the decision-making structure created by statute, namely, the OLRB. The Act grants jurisdiction to the OLRB to address violations of the Act that occur after the expiry of the collective agreement: s. 96(1) and (4). Section 114(1) of the Act provides that this jurisdiction is exclusive to the Board: The Board has exclusive jurisdiction to exercise the powers conferred upon it by or under this Act and to determine all questions of fact or law that arise in any matter before it, and the action or decision of the Board thereon is final and conclusive for all purposes…. [23] The Union, representing the respondents, argued before the OLRB that the increase in the brokerage fees following the expiry of the collective agreement amounted to a breach of the employer's obligation to bargain in good faith, as mandated by ss. 17, 59 and 60 of the Act. The OLRB has been given exclusive jurisdiction to deal with this issue. The respondents now attempt to characterise the claim as a breach of private contract. Ironically, the appellant advanced the same characterisation of the dispute before the OLRB. However, the fact that one or both of the parties took positions before the OLRB that were inconsistent with their respective postures before the application judge is of no consequence in determining the issue of jurisdiction of the respective tribunals. The respondents’ claim, to use the language of Weber, clearly “arises from the collective agreement”, and therefore is not properly before the courts. [24] Accordingly, for the above reasons, I would allow the appeal, set aside the judgment of Brennan J., and enter an order dismissing the application below. However, I would not allow the appellant its costs. This application before Brennan J. was but one more occurrence in a protracted labour dispute that has yet to be resolved. The respondents were encouraged to bring it, in part at least, because of the objections taken by the appellant to the OLRB hearing the matter. In the circumstances, there should be no costs to either party here or below. Released: NOV 05 1999 Signed: “G.D. Finlayson J.A.” GDF “I agree. M.J. Moldaver J.A.” “I agree. Robert J. Sharpe J.A.”