Rick Dunlop and Richard Jordan

Employers who are currently defending a human rights complaint filed by an employee governed by a collective agreement should take note of the Supreme Court of Canada (“SCC”)’s decision in Northern Regional Health Authority v. Horrocks, 2021 SCC 42. The SCC confirmed that labour arbitrators will normally have exclusive jurisdiction over human rights violations alleged by unionized employees.

What happened?

Ms. Horrocks had an alcohol dependency. In 2011, the Northern Regional Health Authority (“NHRA”) terminated her employment after she attended work under the influence of alcohol. She filed a grievance under the collective agreement that governed her employment. A settlement agreement was reached, similar to a ‘last chance’ agreement, which stated that a breach of any of the conditions would be considered to be just cause for termination, “subject to the right of the union and [complainant] to challenge any decision through the grievance and arbitration process.”

NRHA then terminated Ms. Horrocks’s employment again, alleging a breach of the settlement agreement. Instead of filing a grievance, Ms. Horrocks filed a discrimination complaint under the Manitoba Human Rights Code (“Code”). NRHA objected, saying that the essential character of the dispute fell within the exclusive jurisdiction of an arbitrator under the collective agreement.

Ultimately, the SCC, in a 6-1 majority decision, agreed with NRHA. The SCC found that the Manitoba Labour Relations Act arbitration section provided an arbitrator with exclusive jurisdiction over unionized employee’s allegations of human rights violations, and the Manitoba Code did not displace this exclusive jurisdiction. Furthermore, the essential character of the dispute, (i.e. whether NRHA properly exercised its management rights in terminating Ms. Horrocks), fell under the collective agreement.

In short, there was no concurrent jurisdiction (i.e. an adjudicator appointed under the Code did not share jurisdiction with an arbitrator). The arbitrator had exclusive jurisdiction.

Framework

The SCC prescribed the following test to determine whether labour arbitrators and human rights tribunals share jurisdiction over a unionized employee’s human rights complaint:

Stage 1: Examine the relevant labour relations statute to determine whether it grants an arbitrator exclusive jurisdiction.

Every labour relations statute in Canada contains a mandatory dispute resolution clause, which requires that every collective agreement include a clause providing for the final settlement of all differences concerning the interpretation, application or alleged violation of the agreement, by arbitration or otherwise. This means an arbitrator has exclusive jurisdiction to settle disputes which expressly or inferentially arise out of the collective agreement. As a result, this stage is a formality; arbitrators are presumed to have exclusive jurisdiction to decide all disputes arising from the collective agreement.

Stage 2: Examine the statute of the competing statutory tribunal to determine whether there is clear legislative intent to displace an arbitrator’s exclusive jurisdiction.

The SCC noted that “the mere existence of a competing tribunal” is insufficient to displace labour arbitration as the forum for disputes arising from a collective agreement. Therefore, if a legislature intends for another tribunal to have concurrent jurisdiction, it should either specifically state this in the tribunal’s enabling statute or, absent such language, the statute must be reviewed to see whether it discloses that intention. For example, the SCC noted that some human rights statutes enable a decision-maker to defer consideration of a complaint if it is capable of being dealt with through the grievance process, which would “necessarily imply” concurrent jurisdiction.

Where there is concurrent jurisdiction, the majority of the SCC declined to offer any guidance on how the decision-maker should determine whether to take jurisdiction over the complaint or the factors that the decision-maker should consider in making that determination. If there is not concurrent jurisdiction, the analysis moves to the next stage.

Stage 3: What is the essential character of the dispute, and does it arise from the interpretation, application, or alleged violation of the collective agreement?

The SCC confirmed that this analysis requires a close examination of the scope of the collective agreement and the factual circumstances underpinning the dispute. The SCC confirmed that the decision-maker must focus on the facts alleged, not the legal characterization of the matter.

What are the key takeaways?

1. Unionized employers that are currently subject to a human rights complaint by a unionized employee should consider whether an arbitrator would have exclusive jurisdiction pursuant to Horrocks.
2. Employers should anticipate an increase in the number of human rights-based grievances given that a union’s failure to submit such a grievance may result in a duty of fair representation complaint.
3. Although focused on human rights, the SCC’s framework provides a guide for resolving jurisdictional conflicts between labour arbitration and any statutory tribunal.

This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact a member of our Labour and Employment group.

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