Air Canada Pilots Assn. v. Air Line Pilots Assn. (C.A.)

A-472-02

A-601-01

2003 FCA 160

Air Canada Pilots Association (Applicant)

Air Line Pilots Association and Air Canada (Respondents)

and

National Automobile, Aerospace, Transportation and General Workers' Union of Canada (CAW-Canada), Local 1990 (Intervener)

and

CAW-Canada, Local 2213 (Intervener)

Indexed as: Air Canada Pilots Assn. v. Air Line Pilots Assn. (C.A.)

Court of Appeal, Stone, Rothstein and Malone JJ.A.-- Toronto, January 14 and 15; Ottawa, March 27, 2003.

Labour Relations -- Air Canada-Canadian Airlines International merger -- Arbitration award fixing seniority list integration date -- Award quashed by CIRB -- Application to F.C.A. by Air Canada pilots union for restoration of award -- Arguing CIRB outside jurisdiction in ignoring terms of Protocol between unions establishing seniority list integration process -- Arbitrator found economic disparity between two carriers, disparity in hiring patterns -- Found "date of hire" integration inequitable -- Gave Air Canada pilots advantageous treatment, their employer having rescued Canadian -- Given benefit of "fences" as exclusive bidding rights on wide-body aircraft, layoff protection -- CIRB initially approved award's seniority provisions, reversed itself upon reconsideration -- New order in accordance with legal, factual reality when bargaining units merged -- CIRB held arbitrator contravened Code in giving Air Canada pilots advantages -- Application denied -- CIRB having power under Code, s. 18 to override any part of Protocol -- Protocol not containing express agreement on date of seniority list integration -- Courts not adding terms to written agreement unless "officious bystander" test met -- No denial of procedural fairness -- CIRB having power under Regulations, s. 44(b) to review award where Code principles improperly applied -- Not unfettered interest arbitration, but circumscribed by Code principles, subject to CIRB reconsideration -- Ss. 35, 18.1 remedial, to be read together -- "Winner take all" approach inconsistent with s. 18.1.

Administrative Law -- Judicial Review -- Certiorari -- Canada Industrial Relations Board decision -- Board, upon reconsideration, setting aside arbitration award -- At issue: seniority lists integration following merger of two air carriers -- Standard of review -- S.C.C. teaching in Pushpanathan v. Canada (Minister of Citizenship and Immigration) followed -- Object of analysis: did Parliament wish courts or tribunal to ultimately decide case -- CIRB decisions protected by broad privative clause -- Specialized, expert tribunal -- Purposes of Canada Labour Code factor to be considered -- Nature of question: had CIRB jurisdiction to review an earlier order, within CIRB's home legislative framework, experience -- Decision to be reviewed on patent unreasonableness standard -- Board had jurisdiction to override Protocol between two unions -- Board having power under Regulations to review award where Code principles improperly applied.

This was an application to the Federal Court of Appeal by the Air Canada Pilots Association seeking to have quashed a Canada Industrial Relations Board (CIRB) decision specifying that the date for integrating seniority lists following the Air Canada-Canadian Airlines International merger would be October 17, 2000--the date on which the CIRB ordered consolidation of the bargaining units. An earlier arbitration award had fixed the integration date as January 4, 2000--the date the airlines had merged. The Air Canada Pilots Association seeks restoration of the arbitrator's award. It argues that the CIRB acted outside its jurisdiction in ignoring certain terms of an agreement between it and the union which represents the Canadian Airlines International (Canadian) pilots and that the CIRB decision was patently unreasonable.

On August 3, 2000 the CIRB declared Air Canada and Canadian to be a single employer under Canada Labour Code, section 35 for purposes of the pilot bargaining unit. That declaration resulted in commencement of the process of determining appropriate bargaining units and consequential issues under Code, section 18.1. The unions representing the two pilot groups had already signed a Protocol establishing a seniority list integration process. By that Protocol, an arbitrator was jointly selected by the parties and given all the powers to merge seniority lists that the CIRB has under the Code. The CIRB granted its approval of the seniority list integration process established by the Protocol. In his award, the arbitrator failed to articulate specifically the principles applicable to a bargaining unit consolidation triggered by a single employer declaration under the Code, but rather made a factual finding of economic disparity between the two carriers. This was the primary rationale supporting his award--as well as the necessity for protecting those Air Canada employees having negotiated "no lay-off" guarantees extending to June 2005. The award also took into account the disparity in hiring patterns: while Canadian hiring ended in 1990, from 1995 on Air Canada had experienced an unprecedented rate of growth in its complement of pilots. In the result, all the Canadian pilots had been hired pre-1990 while almost half of Air Canada's pilots had been taken on since 1995. This made a "date of hire" integration inequitable, so the arbitrator went for a ratio approach to seniority list integration. Furthermore, Air Canada pilots were accorded a substantial ratio premium on the rationale that Air Canada had rescued Canadian. In addition, the Air Canada pilots were given the benefit of restrictions, referred to as "fences", on the ordinary operation of the seniority list such as exclusive bidding rights on wide-body aircraft and layoff protection.

The CIRB confirmed the award's seniority provisions but Canadian's union applied for reconsideration, which it agreed to do. The Canadian union did not question the January 4, 2000 date chosen by the arbitrator for seniority list integration. The CIRB held that circumstances prior to January 4, 2000 were not determinative, the rights of the Canadian pilots having been enhanced by a collective agreement entered into in March 2000. Thus, at the date of the consolidation order, the rights of the two pilot groups were substantially the same. October 17, 2000 accorded with the legal and factual reality of when the bargaining units actually merged. Prior to that date, the bargaining units had acted independently and were distinct entities. The CIRB's view was that January 4, 2000 (when the two carriers commenced carrying on business in common) failed to reflect industrial relations reality since a merger of two businesses is not determinative of the merger of bargaining units. In fact, major collective agreement changes were independently made by each unit after the business merger, but before the bargaining units merged. The CIRB also held that the arbitrator erred in adopting an approach to seniority list integration designed to advantage the Air Canada pilots, contrary to the Code.

Held, the application should be dismissed.

The initial matter for determination was the appropriate standard of review. The factors to be considered were those enunciated by the Supreme Court in Pushpanathan v. Canada (Minister of Citizenship and Immigration). The object of the analysis is to determine whether Parliament intended that the courts or the CIRB ultimately decide the case. CIRB decisions are protected by a privative clause, repeatedly described by the Supreme Court as broad and expansive and an indication of Parliamentary intent that deference be shown to its decisions. Furthermore, it is a specialized, expert tribunal better suited than are the courts to balance the interests of employers, workers and unions. A third factor to be taken into account is the purposes of the Code which include the encouragement of collective bargaining, constructive dispute settlement and good industrial relations in the best interests of Canada. The final factor is the nature of the question, in this case, whether the CIRB had jurisdiction to review an earlier order. This involves the interpretation and application of inter-related provisions of the Code and Regulations which are within the CIRB's home legislative framework and experience. All of these factors lead to the conclusion that the Board decision should be reviewed on the patent unreasonableness standard.

The essential argument advanced by the Air Canada pilots' union was that, in view of Code, paragraph 18.1(2)(a), the CIRB lacked jurisdiction to override any part of the Protocol. Its argument was that Code subsection 18.1(3) sets out the only circumstances in which the CIRB may interfere with an agreement reached by the parties: (1) if there is a timeliness issue or (2) if the agreement would not create units appropriate for collective bargaining. But the CIRB quite properly resorted to section 18, which provides that "The Board may review, rescind, amend, alter or vary any order or decision made by it."

The Protocol did not, in fact, contain an agreement on a date for seniority list integration. It merely acknowledged that the two air carriers had carried on business under common control since January 4, 2000. Nor could it be said that that date was an implied term of the Protocol. Courts are reluctant to go beyond a written agreement and will not impose an implied term unless the "officious bystander" test is met: the term must be one which the parties would say, if questioned, that they had obviously assumed. At the CIRB hearing in October 2002, the Air Canada pilots' union was invited to suggest an integration date other than October 17, 2000 but that offer was declined. That union could not now be heard to say that it had been denied procedural fairness.

Another argument made by applicant was that the CIRB had ignored the parties' agreement on interest arbitration, conducting its reconsideration on a rights-based arbitration basis. That the CIRB looked at the parties' respective collective agreement rights as at the date of the bargaining unit merger does not mean it viewed Mr. Mitchnick as a rights arbitrator. Interest arbitrators are not precluded from considering existing collective agreement rights. Finally, it was within the CIRB's mandate, under paragraph 44(b) of the Regulations, to review an award on the basis that there had been an improper application of Code principles. The arbitrator was not free to select whatever principles he wished.

A further submission was that section 44 of the Regulations limits the issues that can be dealt with on a reconsideration and that this prevented the CIRB from altering the seniority list integration date. A reading of the CIRB's decision made it clear that it understood and adhered to the section 44 requirements as to exercising its power of reconsideration under Code, section 18. Nor did the CIRB err in failing to accord sufficient deference to Mitchnick as an interest arbitrator. This was not an unfettered interest arbitration but one circumscribed by Code principles and it was subject to CIRB reconsideration.

It was following the recommendations of the Sims Task Force, established by the Labour Minister in 1995, that section 18.1 was enacted to give the CIRB power to make consequential orders needed to re-establish effective collective bargaining when conflicts arise in a merged bargaining unit.

The CIRB did not err in concluding that sections 35 and 18.1 are to be read together and that their purpose is remedial in terms of protecting bargained rights and promoting sound labour relations. It further found that a "winner take all" approach that gives one group a premium while disadvantaging others is inconsistent with the intent of section 18.1. Its choice of October 17, 2000 as the seniority list integration date was open to the CIRB and took into account the necessity for integrating seniority in a manner consistent with both the Code regime for conducting a bargaining unit review and existing labour relations realities.

statutes and regulations judicially

considered

Canada Industrial Relations Board Regulations, 2001, SOR/2001-520, s. 44.

Canada Labour Code, R.S.C., 1985, c. L-2, ss. 18, 18.1 (as enacted by S.C. 1998, c. 26, s. 7), 22 (as am. by S.C. 1990, c. 8, s. 56), 35 (as am. by S.C. 1998, c. 26, s. 17).

cases judicially considered

followed:

Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982; (1998), 160 D.L.R. (4th) 193; 11 Admin. L.R. (3d) 1; 43 Imm. L.R. (2d) 117; 226 N.R. 201; Royal Oak Mines Inc. v. Canada (Labour Relations Board), [1996] 1 S.C.R. 369; [1996] N.W.T.R. (2d) 1; (1996), 133 D.L.R. (4th) 129; 36 Admin. L.R. (2d) 1; 193 N.R. 81.

referred to:

Canadian Broadcasting Corp. v. Canada (Labour Relations Board), [1995] 1 S.C.R. 157; (1995), 121 D.L.R. (4th) 385; 177 N.R. 1; International Longshoremen's and Warehousemen's Union, Ship and Dock Foremen, Local 514 v. Prince Rupert Grain Ltd., [1996] 2 S.C.R. 432; (1996), 135 D.L.R. (4th) 385; 40 Admin. L.R. (2d) 1; Canadian Pacific Hotels Ltd. v. Bank of Montreal, [1987] 1 S.C.R. 711; (1987), 40 D.L.R. (4th) 385; 41 C.C.L.T. 1; 77 N.R. 161; 21 O.A.C. 321; Canadian Pacific Ltd. v. Matsqui Indian Band, [1995] 1 S.C.R. 3; (1995), 122 D.L.R. (4th) 129; 26 Admin. L.R. (2d) 1; [1995] 2 C.N.L.R. 92; 177 N.R. 325; VIA Rail Canada Inc. v. Cairns, [2001] 4 F.C. 139; (2001), 270 N.R. 237 (C.A.); Telus Advanced Communications, a division of Telus Communications Inc. v. Telecommunications Workers Union (2002), 293 N.R. 364 (F.C.A.); United Electrical Workers, Local 512 and Tung-Sol of Canada Ltd. (Re) (1964), 15 L.A.C. 161 (C.L.R.B.); Air Canada (Re), [2000] CIRB No. 79; [2000] C.I.R.B.D. No. 33 (QL); Grasky (Re), [2001] CIRB No. 115; [2001] C.I.R.B.D. No. 10 (QL); Cairns (Re), [1999] CIRB No. 35; [1999] C.I.R.B.D. No. 35 (QL).

authors cited:

Canada. Task Force to Review Part 1 of the Canada Labour Code. Seeking a Balance: Canada Labour Code, Part 1, Review. Ottawa: Labour Canada, 1996 (Chairman: Andrew C. L. Sims).

Fridman, G. H. L. The Law of Contract in Canada, 4th ed. Toronto: Carswell, 1999.

Application for judicial review of an order of the Canada Industrial Relations Board (Air Canada) (Re), [2002] CIRB No. 185; [2002] 2 C.I.R.B.D. No. 31 (QL)) quashing an arbitration award in relation to the seniority list following the Air Canada-Canadian Airlines International merger. Application dismissed.

appearances:

John P. Nelligan, Q.C., Steven H. Waller, and Christopher Rootham for applicant.

Paul J. J. Cavalluzzo and Fay Faraday for respondent Air Line Pilots Association.

Maryse Tremblay for respondent Air Canada.

Carolyn J. Askew for intervener National Automobile, Aerospace, Transportation and General Workers' Union of Canada (CAW-Canada), Local 1990.

Michael A. Church for intervener CAW-Canada, Local 2213.

solicitors of record:

Nelligan O'Brien Payne LLP, Ottawa, for applicant.

Cavalluzzo Hayes Shilton McIntyre & Cornish, Toronto, for respondent Air Line Pilots Association.

Air Canada, St-Laurent, Quebec, for respondent Air Canada.

Rush Crane Guenther, Vancouver, for intervener National Automobile, Aerospace, Transportation and General Workers' Union of Canada (CAW-Canada), Local 1990.

Caley & Wray, Toronto, for intervener CAW-Canada, Local 2213.

The following are the reasons for judgment rendered in English by

Malone J.A.:

Introduction

[1]The dispute underlying this application concerns the integration of seniority lists that applied to pilots of Air Canada after its merger with Canadian Airlines International Ltd. (Canadian). By arbitration award dated March 31, 2001, the date for integrating the seniority lists was determined to be January 4, 2000, the date on which the airlines merged. By order of the Canada Industrial Relations Board (CIRB or Board) dated July 10, 2002, the arbitration award was quashed and the Board ordered the parties to negotiate a new seniority list (reported at [Air Canada (Re)], [2002] CIRB No. 183; [2002] C.I.R.B.D. No. 31 (QL)). The Board specified that the date for integrating the seniority lists should be October 17, 2000, the date on which the Board ordered consolidation of the bargaining units.

[2]The Air Canada Pilots Association (ACPA) now asks this Court to quash the July 10, 2002, order of the CIRB, restore the arbitrator's award and the date of January 4, 2000, as the date on which the seniority lists should be integrated.

[3]ACPA seeks this relief on the grounds that the Board acted outside its jurisdiction by ignoring certain express terms of a freely negotiated agreement between ACPA and the Air Line Pilots Association (ALPA), the union representing Canadian pilots, dated June 29, 2000 (the Protocol), and further, that the Board decision to quash the arbitrator's award was patently unreasonable.

Facts

[4]Effective January 4, 2000, Air Canada and Canadian began carrying on associated businesses while awaiting formal court approval of their intended corporate merger. Several months later, on May 19, 2000, ACPA brought an application before the Board to have Air Canada and Canadian declared a single employer pursuant to section 35 of the Canada Labour Code, R.S.C., 1985, c. L-2, as am. by S.C. 1998, c. 26, s. 17 (the Code).

[5]Prior to January 4, 2000, ACPA had represented the pilots employed by Air Canada and ALPA represented the pilots employed by Canadian. ACPA had an existing collective agreement with Air Canada and, on March 30, 2000, ALPA signed a new separate collective agreement with Air Canada covering the former pilots of Canadian that, among other things, afforded wage parity with Air Canada pilots.

[6]On August 3, 2000, the Board declared Air Canada and Canadian to be a single employer under section 35 of the Code for the purposes of the pilot bargaining unit. The result of that declaration was to commence the process of determining appropriate bargaining units and consequential issues pursuant to section 18.1 [as enacted by S.C. 1998, c. 26, s. 7] of the Code. Those sections read as follows:

18.1 (1) On application by the employer or a bargaining agent, the Board may review the structure of the bargaining units if it is satisfied that the bargaining units are no longer appropriate for collective bargaining.

(2) If the Board reviews, pursuant to subsection (1) or section 35 or 45, the structure of the bargaining units, the Board

(a) must allow the parties to come to an agreement, within a period that the Board considers reasonable, with respect to the determination of bargaining units and any questions arising from the review; and

(b) may make any orders it considers appropriate to implement any agreement.

(3) If the Board is of the opinion that the agreement reached by the parties would not lead to the creation of units appropriate for collective bargaining or if the parties do not agree on certain issues within the period that the Board considers reasonable, the Board determines any question that arises and makes any orders it considers appropriate in the circumstances.

(4) For the purposes of subsection (3), the Board may

(a) determine which trade union shall be the bargaining agent for the employees in each bargaining unit that results from the review;

(b) amend any certification order or description of a bargaining unit contained in any collective agreement;

(c) if more than one collective agreement applies to employees in a bargaining unit, decide which collective agreement is in force;

(d) amend, to the extent that the Board considers necessary, the provisions of collective agreements respecting expiry dates or seniority rights, or amend other such provisions;

(e) if the conditions of paragraphs 89(1)(a) to (d) have been met with respect to some of the employees in a bargaining unit, decide which terms and conditions of employment apply to those employees until the time that a collective agreement becomes applicable to the unit or the conditions of those paragraphs are met with respect to the unit; and

(f) authorize a party to a collective agreement to give notice to bargain collectively.

. . .

35. (1) Where, on application by an affected trade union or employer, associated or related federal works, undertakings or businesses are, in the opinion of the Board, operated by two or more employers having common control or direction, the Board may, by order, declare that for all purposes of this Part the employers and the federal works, undertakings and businesses operated by them that are specified in the order are, respectively, a single employer and a single federal work, undertaking or business. Before making such a declaration, the Board must give the affected employers and trade unions the opportunity to make representations.

(2) The Board may, in making a declaration under subsection (1), determine whether the employees affected constitute one or more units appropriate for collective bargaining.

[7]In contemplation of the Board issuing a single employer declaration, ACPA and ALPA signed the Protocol which established a seniority list integration process. Relevant provisions of the Protocol are as follows:

WHEREAS:

1. ACPA has filed an application with the Canada Industrial Relations Board ("the CIRB"), File No. 21177-C, ("the application") under Sections 35 and 18.1 of the Canada Labour Code ("the Code");

2. The application seeks a declaration under Section 35 that Air Canada, Canadian Airlines International Limited ("CAIL"), and two numbered Alberta companies are a single employer operating a single mainline airline under the Code ;

3. The application also seeks certain consequential relief under Section 18.1 including an order that the two mainline pilot bargaining units at Air Canada and CAIL be consolidated into a single appropriate bargaining unit;

4. ACPA and ALPA wish to expedite the processing of the application, firstly, by agreeing to certain issues where such agreement serves their mutual interests, and, secondly, by agreeing to a process that will result in a fair and timely resolution of other issues upon which they do not agree.

THE PARTIES THEREFORE AGREE THAT:

1. ACPA and ALPA will take the following common positions in their pleadings and submissions with respect to the application:

(a) Since January 4, 2000, Air Canada and CAIL have carried on associated or related federal businesses under common control or direction, within the meaning of Section 35;

(b) The CIRB ought to exercise its discretion under Section 35 to declare that, for the purposes of Part I of the Code, Air Canada and CAIL are a single employer operating a single mainline airline business.

. . .

(b) Those two units should be combined to form a single mainline pilot bargaining unit at a time to be determined by the CIRB;

. . .

3. Should the CIRB issue a single employer declaration and find that the two mainline bargaining units at Air Canada and Canadian Airlines ought to be combined, and provided that ACPA and ALPA have not by that time agreed upon an integrated seniority list, ACPA and ALPA will jointly request that an integrated seniority list for Air Canada and CAIL pilots be determined by the following process under Section 18.1 of the Code:

(a) The integration of the two seniority lists shall be determined by a sole arbitrator jointly selected by the parties, namely Morton Mitchnick;

(b) The arbitrator shall integrate the seniority lists based on such principles as he finds applicable to a bargaining unit consolidation triggered by a single employer declaration under the Code;

. . .

(f) The scheduling of the arbitration, and the manner in which it will be conducted, will be determined by the arbitrator having regard to such submissions and further agreements (if any) the parties present to the arbitrator;

(g) The arbitrator shall have all the powers that the Board would itself have in merging seniority lists under the Code;

(h) Prior to the introduction of evidence in the arbitration, ACPA and ALPA will exchange detailed information on the pilot seniority lists at Air Canada and CAIL respectively, as those lists stood on January 3, 2000. The parties will forthwith have further discussions to identify the precise nature and format of the information to be exchanged;

(i) The arbitrator shall not make an award that alters the relative seniority rankings among employees who are legitimately on the seniority list of either of the two pre-merger pilot groups;

(j) Except as provided in the next paragraph the award(s) of the arbitrator shall be final and binding on ACPA, ALPA, Air Canada, CAIL and the pilots of Air Canada and CAIL; and

(k) The award(s) of the arbitrator shall be incorporated into Board order(s), issued under Subsection 18.1(2) of the Code, in order to implement the within agreement of the parties. Such orders will be final orders of the Board, subject only to reconsideration by the Board and/or judicial review under the Federal Court Act.

4. With respect to all other issues arising from the application and not specifically addressed herein, ACPA and ALPA are free to advance whatever positions they wish.

[8]The parties requested that the Board approve the Protocol, and by order dated October 17, 2000, the Board approved a single bargaining unit for pilots as well as the seniority list integration process established in Article 3 of the Protocol. The order reads:

WHEREAS following the declaration of a single employer issued by the Board on August 3rd, 2000, the parties hereto have agreed and requested that the two relevant bargaining units of pilots, units n. 6857-U, issued on November 14, 1995, and no. 7258-U, issued on August 29, 1997, are no longer appropriate and should be replaced by a single consolidated pilot bargaining unit at the newly declared Air Canada single employer;

AND WHEREAS, the Air Canada Pilots Association (ACPA) and the Air Line Pilots Association International (ALPA) by Clause 3 and an agreement dated June 29, 2000, have agreed upon a process to determine consequential seniority issues;

IT IS DECLARED, that a single consolidated pilot bargaining unit is the appropriate unit for collective bargaining at the recently declared Air Canada single employer.

IT IS FURTHER DECLARED pursuant to section 18.1 of the Canada Labour Code that the Board approves the process for the determination of consequential seniority issues set out in Clause 3 of the agreement signed by ACPA and ALPA on June 29, 2000.

[9]As provided in the Protocol, the arbitration was conducted by Morton G. Mitchnick, an experienced labour arbitrator. The procedure conducted by arbitrator Mitchnick involved a combination of hearings, submissions from counsel, presentations by the pilot merger committees, and meetings with pilot groups. Mr. Mitchnick conducted his arbitration in accordance with the Protocol and used January 4, 2000, as the integration date for seniority list purposes, which is the date when the airlines began carrying on associated businesses.

[10]On March 31, 2001, Mr. Mitchnick issued his award. Although he did have some regard for a number of prior arbitral awards, he did not articulate specifically the principles applicable to a bargaining unit consolidation triggered by a single employer declaration under the Code. Rather, a factual finding of economic disparity between Canadian and Air Canada on January 4, 2000, was the primary rationale supporting the award, as well as the need for the protection of pre-existing Air Canada employees holding negotiated "no lay-off" guarantees as far in the future as June 2005.

[11]Further, the award took into account the disparity in the hiring patterns of Air Canada and Canadian. Canadian hiring virtually ended in 1990. On the other hand, Air Canada, from 1995 onward, was in an unprecedented growth mode, augmenting the size of its pilot force by roughly two-thirds as of the date of the merger. This created an imbalance in the demography, with the Canadian pilots all bearing dates of hire of 1990 or earlier, and almost half of the Air Canada pilots bearing hiring dates of 1995 or later. This hiring disparity made a "date of hire" integration inequitable, and therefore a ratio approach to seniority list integration was taken by Mr. Mitchnick.

[12]Mr. Mitchnick also awarded a variable category ratio, as proposed by ACPA, which gave a substantial ratio premium to former Air Canada pilots on the basis that Air Canada had rescued Canadian, and that this should be reflected in the seniority list integration. Former Air Canada pilots were also advantaged by the award of a number of conditions or restrictions known as "fences" on the ordinary operation of the seniority list, lasting either five or 10 years. These "fences" included exclusive bidding rights for Air Canada pilots on certain wide-body aircraft, layoff protection so that no pre-merger Air Canada pilot could be laid off until 422 former Canadian pilots had been laid off, and special protection so that positions awarded on the winter 2000 bid list set the baseline for the first bid conducted under the integrated list.

[13]On May 2, 2001, a Board order was issued confirming that the seniority of pilots in the new bargaining unit was to be determined in accordance with the Mitchnick award.

[14]On May 11, 2001, ALPA applied for reconsideration of the May 2, 2001, Board order and the Board issued a letter on August 14, 2001, indicating that it would engage in a full reconsideration of the Mitchnick award. The Board held reconsideration hearings until January, 2002. During these hearings neither party argued that a date other than January 4, 2000, should be used for integration of the seniority lists, and the January 4, 2000, date used by arbitrator Mitchnick was not one of the grounds upon which ALPA applied for reconsideration.

[15]The Board issued its 91-page reconsideration decision on July 10, 2002. The Board focussed on whether the principles used by arbitrator Mitchnick were consistent with the intent of the Code, given that the bargaining unit integration resulted from a single employer declaration under section 35 and a subsequent merger of bargaining units under section 18.1 of the Code. In conducting its reconsideration, the Board applied its ordinary reconsideration policies, standards and practices to review the Mitchnick award as prescribed by section 18 of the Code and section 44 of the Canada Industrial Relations Board Regulations, 2001, SOR/2001-520 (the Regulations). Section 18 [of the Code] and section 44 [of the Regulations] provide:

[The Code]

18. The Board may review, rescind, amend, alter or vary any order or decision made by it, and may rehear any application before making an order in respect of the application.

[The Regulations]

44. The circumstances under which an application shall be made to the Board exercising its power of reconsideration under section 18 of the Code include the following:

(a) the existence of facts that were not brought to the attention of the Board, that, had they been known before the Board rendered the decision or order under reconsideration, would likely have caused the Board to arrive at a different conclusion;

(b) any error of law or policy that casts serious doubt on the interpretation of the Code by the Board;

(d) a decision made by a Registrar under section 3.

[16]The Board held that in the context of seniority list integration under the Code, its role is to protect negotiated rights and to amend such existing rights only to the extent necessary to produce a fair and equitable result. In this case, the Board held that circumstances prior to January 4, 2000, were not determinative because the rights of the Canadian pilots had been enhanced by a new collective agreement signed at the end of March 2000. Thus, at the time of the arbitration and its bargaining unit consolidation order of October 17, 2000, the rights of the two groups of pilots were substantially the same. Accordingly, the Board chose October 17, 2000, as the date as of which the seniority lists should be integrated, rather than January 4, 2000.

[17]The Board indicated that October 17, 2000, accorded with the legal and factual reality of when the bargaining units actually merged. Prior to this date, the bargaining units acted independently and were legally and factually distinct entities. The Board stated that January 4, 2000, when Canadian and Air Canada commenced carrying on businesses in common, did not reflect the statutory and industrial relations realities, as the merger of two businesses is not determinative of the merger of bargaining units. October 17, 2000, the date of the order consolidating the two formerly separate bargaining units, was to be used unless there were valid reasons for ordering a different date. Up until this date, the two units had continued to represent their member employees separately, and major collective agreement changes were independently made by each unit after the business merger, but before the bargaining unit merger.

[18]The Board concluded that the arbitrator erred in respect of the application of sections 35 and 18.1 of the Code. In particular, it found that the award was inconsistent with Article 3 of the Protocol, failed to apply and give effect to a remedial approach to seniority list integration as directed by the Code, gave improper emphasis to economic considerations and failed to provide a clear explanation and rationale for the basis upon which pilot ratio categories were defined.

[19]The Board also held that the arbitrator erred by adopting an approach to seniority list integration which was deliberately designed to premium or advantage the ACPA pilots, contrary to the intention of the Code. The Board set aside the Mitchnick award and directed a process for redetermining the seniority list integration in accordance with proper Code principles.

[20]At a Board hearing on October 3, 2002, requested by the parties to determine the new process, ALPA accepted October 17, 2000, as the date of integration. However, despite the Board's invitation to ACPA to put forward another date, ACPA chose not to do so.

Standard of Review

[21]An issue at the outset is the determination of the appropriate standard by which the Board's decision of July 10, 2002 is to be reviewed by this Court. That standard must be determined by conducting a pragmatic and functional analysis in accordance with factors enunciated by the Supreme Court of Canada in Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982 (Pushpanathan). These factors include the presence or absence of a privative clause, the expertise of the tribunal, the purposes and objectives of the constituent legislation, and the nature of the issue to be resolved. The object of this analysis is to determine whether Parliament intended that the courts or the Board make the ultimate decision in order to dispose of the case (see Canadian Broadcasting Corp. v. Canada (Labour Relations Board), [1995] 1 S.C.R. 157 (Canadian Broadcasting Corp.), at paragraph 30).

[22]First of all, Board decisions are protected by a privative clause in subsections 22(1) [as am. by S.C. 1990, c. 8, s. 56] and (2), which read as follows:

22. (1) Subject to this Part, every order or decision of the Board is final and shall not be questioned or reviewed in any court, except in accordance with the Federal Court Act on the grounds referred to in paragraph 18.1(4)(a), (b) or (e) of that Act.

(2) Except as permitted by subsection (1), no order, decision or proceeding of the Board made or carried on under or purporting to be made or carried on under this Part shall

(a) be questioned, reviewed, prohibited or restrained, or

(b) be made the subject of any proceedings in or any process of any court, whether by way of injunction, certiorari, prohibition, quo warranto or otherwise,

on any ground, including the ground that the order, decision or proceeding is beyond the jurisdiction of the Board to make or carry on or that, in the course of any proceeding, the Board for any reason exceeded or lost its jurisdiction.

The Supreme Court of Canada has repeatedly described this privative clause as broad and expansive, so as to be indicative of the deference Parliament intended to be shown to Board decisions and orders (see Royal Oak Mines Inc. v. Canada (Labour Relations Board), [1996] 1 S.C.R. 369 (Royal Oak Mines), at paragraph 36; International Longshoremen's and Warehousemen's Union, Ship and Dock Foremen, Local 514 v. Prince Rupert Grain Ltd., [1996] 2 S.C.R. 432 (Prince Rupert Grain), at paragraph 42).

[23]Second, it is well recognized by the Supreme Court of Canada that the Board is a specialized and expert tribunal better suited than the courts to weigh the interests of employers, employees, and unions and to administer the provisions of the Code to the issues which come before it (Canadian Broadcasting Corp., at paragraph 53). In turn, this Court has recognized the expertise of the Board as a factor in deferring to Board decisions (see VIA Rail Canada Inc. v. Cairns, [2001] 4 F.C. 139 (C.A.) (VIA Rail), at paragraphs 30-32; Telus Advanced Communications, a division of Telus Communications Inc. v. Telecommunications Workers Union (2002), 293 N.R. 364 (F.C.A.), at paragraphs 39-43).

[24]The third factor in the Pushpanathan analysis is the objectives and purposes of the Code, which is a further reason for deferring to Board decisions. Such objectives and purposes are readily ascertainable from its preamble.

[25]As noted by Cory J. in Royal Oak Mines, at paragraph 73:

The preamble in Part I of the Canada Labour Code sets out its purposes and objectives. These include (a) the promotion of the common well-being; (b) the encouragement of free collective bargaining; (c) the constructive settlement of disputes; (d) freedom of association and free collective bargaining as the bases of effective industrial relations; (e) good working conditions and sound labour-management relations; and (f) good industrial relations which are in the best interests of Canada in ensuring a just share of the fruits of progress to all.

[26]The final factor in the Pushpanathan analysis is the nature of the question. In this case, the question is whether the CIRB had the jurisdiction to review its May 2, 2001, order by which it confirmed the Mitchnick award. This essentially involves the interpretation and application of a number of inter-related provisions of the Code and Regulations. This is the CIRB's home legislative framework with which it has considerable interpretive experience.

[27]The CIRB Regulations provide that the Board will review its orders where they indicate a serious error of law or policy in the interpretation of the Code. In this case, the Board was required to determine whether the May 2, 2001, order which confirmed the Mitchnick award casts serious doubt on the interpretation of the Code, as related to the principles applicable to bargaining unit integration and the treatment of existing collective agreement rights. Given the CIRB's expertise in this area, I think these are questions that Parliament intended to be left to the Board rather than the courts.

[28]In my view, all the above factors point to the conclusion that the CIRB's decision should be reviewed on a standard of patent unreasonableness.

Alleged Errors

[29]The core of ACPA's application for judicial review centers on its submission that the Board did not have the jurisdiction to override any part of the Protocol. The basis for its position is that the Board is bound by paragraph 18.1(2)(a) of the Code, which reads as follows:

18.1 . . .

(2) If the Board reviews, pursuant to subsection (1) or section 35 or 45, the structure of the bargaining units, the Board

[30]The ACPA argument is that subsection 18.1(3) of the Code sets out the only circumstances where the Board may interfere with or override the agreement of the parties; i.e. when there is a timeliness issue or where their agreement would not lead to the creation of units appropriate for collective bargaining. For convenience, I again reproduce subsection 18.1(3):

18.1 . . .

[31]The Protocol constitutes a timely agreement between the parties, pursuant to paragraph 18.1(2)(a) of the Code. In turn, the Board's order of May 2, 2001, implementing the Mitchnick award, was properly issued in accordance with paragraph 18.1(2)(b). However, in my analysis, ALPA's application for reconsideration cannot fall within subsection 18.1(3), as it neither raises timeliness issues between the parties, nor questions as to whether the Protocol would lead to the creation of units appropriate for collective bargaining. Accordingly, the Board quite properly resorted to section 18 of the Code, its long-established review section, in conducting the reconsideration of its own May 2, 2001, order. Section 18 reads as follows:

18. The Board may review, rescind, amend, alter or vary any order or decision made by it, and may rehear any application before making an order in respect of the application. [Emphasis added.]

[32]ACPA's argument continues that since the Board already agreed with the parties that a single bargaining unit was appropriate, the Board was required under paragraph 18.1(2)(a) to adhere to the terms of the Protocol on all other questions. Specifically, the Board is said to have overridden the Protocol in three ways: (1) unilaterally changing the integration date from January 4, 2000, to October 17, 2000; (2) resorting to rights arbitration principles instead of interest arbitration principles as agreed; and (3) imposing its own integration principles instead of letting Mr. Mitchnick choose his own principles as the Protocol permits.

[33]In dealing with the date of the merger of Air Canada and Canadian, it is apparent there is no express agreement in the Protocol as to a date for seniority list integration. Paragraph 1(a) recognized that since January 4, 2000, Air Canada and Canadian had carried on associated or related businesses under common control or direction, but that is not tantamount to an agreement that the date for seniority list integration is that very same date.

[34]Paragraph 3(h) of the Protocol provides for an exchange of information, the pilot seniority lists at Air Canada and at Canadian as those lists stood on January 3, 2000. Again, this does not constitute an express agreement that the date for seniority list integration was to be January 4, 2000.

[35]Nor do I think agreement as to a January 4, 2000 date for seniority list integration is an implied term of the Protocol. Where an agreement is expressed in writing, courts are reluctant to go beyond the written words. Where, as in this case, the imposition of the implied term would be based on the presumed intentions of the parties, the term must be necessary to give business efficacy to the agreement or otherwise meet the "officious bystander" test. To satisfy this test, the term must be one "which the parties would say, if questioned, that they had obviously assumed." (See Canadian Pacific Hotels Ltd. v. Bank of Montreal, [1987] 1 S.C.R. 711, at page 775.) There must be strong evidence to permit the imposition of an implied term (see Fridman, G. H. L., The Law of Contract in Canada, 4th ed. (Toronto: Carswell, 1999), at page 501.) In this case I have not been persuaded by the evidence that the January 4, 2000 date is an implied term of the Protocol.

[36]At the Board hearing on October 3, 2002, ACPA had an opportunity to advance a date of integration other than October 17, 2000. The fact that the Board was willing to reconsider that date was obvious from its reasons, in which it indicated that October 17, 2000, was to be used unless there were valid reasons to order a different date. Indeed, the opportunity for ACPA to advance a new date before the Board still exists.

[37]The failure to raise a new date before the Board on October 3, 2002, removes any argument ACPA might have that it had detrimentally relied on ALPA's conduct in the past or that the Board had denied ACPA procedural fairness when it unilaterally changed the date without notice to ACPA.

[38]Even if the Board had been in error in not adhering to the January 4, 2000 date for seniority list integration, this is one of those occasions where this Court should exercise its discretion, and decline to provide the remedy the applicant requests; there being an alternate remedy available (see Canadian Pacific Ltd. v. Matsqui Indian Band, [1995] 1 S.C.R. 3, at paragraph 37), i.e. the invitation of the Board to advance a date of seniority list integration other than October 17, 2000 on October 3, 2002.

[39]The second issue raised by ACPA is that, notwithstanding the parties agreement that seniority issues would be resolved through interest arbitration, the Board ignored this agreement and conducted its reconsideration on the basis of existing collective bargaining rights and a rights-based arbitration.

[40]The Board did not disregard the parties' agreement that arbitrator Mitchnick would operate as an interest arbitrator. The fact that the Board looked at the parties' respective collective agreement rights as of the date of the bargaining unit merger does not mean the Board viewed Mr. Mitchnick as a rights arbitrator. Indeed, there is no requirement that interest arbitrators begin afresh or are precluded from looking at the existing collective agreement rights. I cannot say that the Board's methods and analysis used in its reconsideration of the Mitchnick award were patently unreasonable.

[41]Finally, the question of whether the Board erred in overturning the Mitchnick award on the basis that Mr. Mitchnick applied improper principles is part of the mandate prescribed for the Board under paragraph 44(b) of the Regulations. The Protocol did not give Mr. Mitchnick the freedom to choose and apply whatever principles he wished. On the contrary, Mr. Mitchnick's decision-making powers were clearly circumscribed by the principles that apply under the Code following a section 35 declaration.

Deference to Arbitration Award

[42]It is argued by ACPA that section 44 of the Regulations limits the issues that can be raised on an application for reconsideration under section 18 of the Code, so as to prevent the Board from altering the January 4, 2000, date chosen by the arbitrator for seniority list integration. Section 44 reads:

44. The circumstances under which an application shall be made to the Board exercising its power of reconsideration under section 18 of the Code include the following:

(b) any error of law or policy that casts serious doubt on the interpretation of the Code by the Board;

(d) a decision made by a Registrar under section 3.

[43]When conducting a reconsideration under section 18 of the Code, the Board must do so in accordance with the Board's ordinary policies, standards and practices for reconsidering one of its own orders, as set out by the guidelines contained in section 44 of the Regulations. This principle was acknowledged by the Board in paragraphs 24 and 25. Under section 44, the Board considerations shall include whether there was an error of law or policy that cast serious doubt on the interpretation of the Code. It is evident from paragraphs 24 and 25 of the Board's decision that it understood and followed the requirements of section 44.

[44]ACPA also submitted that the Board erred by failing to accord sufficient deference to Mr. Mitchnick sitting as an interest arbitrator. In my analysis, the Board made no such error. The arbitration was not an unfettered interest arbitration but was to be circumscribed by Code principles, and subject to reconsideration by the Board, as expressly stated in the Protocol.

Is the Board's Decision Patently Unreasonable

[45]In my view the Board's decision is not patently unreasonable. A seniority list integration review conducted under the Code must be consistent with the principles and objectives underlying the Code, the specific principles underlying sections 35 and 18.1, as well as a recognition of the importance of seniority in the context of Canadian labour relations.

[46]As noted earlier, the Code's preamble states as its overarching objective, the promotion of co-operative and effective labour relations, constructive settlement of disputes, industrial stability, and a just and equitable distribution of resources to all Canadians. These objectives must guide the Board in its interpretation and application of all Code provisions, including sections 35 and 18.1. Implicit in the establishment of an expert tribunal such as the Board is the recognition by Parliament that the Board is the best judge of what would promote these legislative objectives.

[47]In 1995, the Minister of Labour established the Sims Task Force (Seeking a Balance: Canada Labour Code, Part I, Review (1996) (Sims)), which was comprised of labour relations experts, and who were to conduct an independent review and recommend legislative changes to Part I of the Code. Some of the changes recommended by the Task Force were implemented in section 18.1. Before section 18.1 was enacted, the Board lacked the express power to resolve seniority integration issues arising from a corporate merger or the merger of bargaining units. Sims found this lack of express authority troublesome because it left the problem of integrating work forces and collective agreements to the employer and the union alone. Sims found that in a merged bargaining unit, significant conflicts do arise among formerly separate groups of employees and addressing this conflict by reopening collective agreement negotiations was an ineffective way to resolve these issues (Sims, at pages 70, 72). Thus, Sims recommended that the Code be amended to grant the Board broad authority to make any consequential orders necessary to re-establish effective collective bargaining and contract administration following a bargaining unit review.

[48]Arising from that recommendation, section 18.1 was enacted by Parliament so as to allow the parties themselves to first attempt to reach an agreement on issues arising from a single employer declaration.

[49]In my view, the Board's decision in this application is entirely consistent with its own jurisprudence. (See United Electrical Works, Local 512 and Tung-Sol of Canada Ltd. (Re) (1964), 15 L.A.C. 161 (C.L.R.B.) at page 162; Air Canada (Re), [2000] CIRB No. 79; [2000] C.I.R.B.D. No. 33 (QL); Grasky (Re), [2001] CIRB No. 115; [2001] C.I.R.B.D. No. 10 (QL) and Cairns (Re), [1999] CCRI No. 35; [1999] C.I.R.B.D. No. 35 (QL), upheld by this Court in VIA Rail, supra). The Board determined that sections 35 and 18.1 should be read together and that their purpose is remedial in terms of protecting bargained rights and promoting sound labour relations. The Board found that a "winner take all" approach that gives one group of employees a premium and disadvantages others is not consistent with the intent of section 18.1. It recognized that negotiated collective agreement rights must be protected and preserved to the extent possible and must only be amended if this is necessary in all of the circumstances. In applying these principles, the Board's decision is not patently unreasonable.

[50]For reasons which I have already articulated, the Board's selection of October 17, 2000, as the appropriate date for seniority list integration was a matter the Board could decide as part of its review powers and as contemplated by paragraph 3(k) of the Protocol. In selecting this date, the Board was expressly conscious of the need to integrate seniority in a manner that was consistent with the Code's regime for conducting a bargaining unit review and consistent with the existing labour relations realities. At paragraph 158 of the Board's reasons, the Board noted:

The process of merging bargaining units pursuant to sections 35 and 18.1 of the Code, must reflect the reality that the Code requires under section 35, that there be an application, consideration by the Board of at least the representations of affected parties, a declaration by the Board, and then, under section 18.1, an opportunity by the parties to come to agreement respecting the matters in issue, and finally, a determination by the Board. These processes must reflect their statutory basis and the industrial relations realities, facts and circumstances that actually exist.

[51]The Board's selection of October 17, 2000, as the date for seniority list integration was not patently unreasonable.

[52]I would dismiss this application for judicial review with costs to the respondent Air Line Pilots Association.

Stone J.A.: I agree.

Rothstein J.A.: I agree.