Remedy of Binding Arbitration Affirmed for Employer Breach of Duty to Bargain in Good Faith

The Federal Court of Appeal recently upheld the Canada Industrial Relations Board’s decision to order binding resolution of a disputed issue in first contract negotiations between the Public Service Alliance of Canada (PSAC) and the Listuguj Mi’gmaq First Nations Council (the employer) as a remedy for the employer’s breach of the duty to bargain in good faith.

Paragraph 50(a) of the Canada Labour Code requires the parties to negotiate in good faith and make every reasonable effort to enter into a collective agreement. The Board concluded the employer violated that duty by failing to communicate its reasons to PSAC for refusing to ratify a tentative agreement until after the Board initiated unfair labour practice proceedings. During the Board’s hearing, the employer revealed its intent to renegotiate the tentative agreement’s employment equity provisions to give it the authority to terminate a bargaining unit member when a qualified First Nations member was available for the position. The tentative agreement already provided a preference for qualified First Nations members in employment, a principle supported by PSAC. But as the Federal Court of Appeal emphasized, the employer’s new demand was “highly unusual” and “one that would be difficult for any trade union to ever agree to.”

The Board crafted a detailed remedy including an order that, if the parties were unable to reach agreement on the issue of preferential hiring within a 60-day period, it would order a binding method of resolving that particular term of their agreement. In its application for judicial review, the employer argued that the Board’s order was unreasonable because, among other things, it bore no rational connection to its breach of the Code and interfered with free collective bargaining. In rejecting those arguments, the Federal Court of Appeal found that the order was tied to the employer’s breaches of the Code found by the Board. What’s more, “given the prospect of binding arbitration failing agreement, the remedial order issued by the Board may well have facilitated compromise and thus furthered the process of collective bargaining.”

Read the full text of the Federal Court of Appeal’s decision here. The Board’s decision is available here.

The Public Service Alliance of Canada was represented by Andrew Raven and Michael Fisher of RavenLaw.