An arbitrator in British Columbia has refused to award costs to a union related to a dispute with the employer — and criticized a recent trend of seeking costs in arbitration hearings.
“There appears to be a recent and growing trend in grievance arbitration proceedings for a party to request costs which, in my view, is increasing the cost of the arbitration process and is antithetical to the very clear principles set out in the code and many (collective agreements),” said arbitrator Paul Love.
The ruling involved a dispute between Canadian Union of Public Employees (CUPE), Local 50, and Gorge Vale Golf Club. In December 2022, the arbitrator ruled that National Truth and Reconciliation Day and the National Day of Mourning are holidays under the collective agreement and workers were entitled to compensation.
The arbitrator retained jurisdiction over the implementation of the award, and there were some issues between the parties in getting everything settled. On April 19, 2023, the arbitrator issued an implementation award.
Position of the parties
The union sought $14,957 in costs for the additional time and arbitration expense incurred in seeking the arbitrator’s intervention in implementing the award. Alternatively, it sought $10,000 in damages to compensate it and deter the employer from similar behaviour in the future.
It argued the employer had been deliberately uncooperative by refusing to engage in discussion and failing to disclose necessary information.
The employer argued the arbitrator has no jurisdiction to award costs. It noted that, in exceptional circumstances, costs might be warranted — but at best previous cases only supported an ability to order costs related to adjournment applications.
It bristled at the notion that deterrence was an appropriate basis for the award of compensatory damages, and there was no independent actionable wrong to support any award of damages.
The ruling: Costs
The arbitrator said this was not a case where a union was seeking costs based on its success in the grievance. Rather, CUPE was seeking costs or, in the alternative damages, because of the employer’s conduct in resisting implementation of the award.
It noted it could simply sidestep this case and rule that extraordinary circumstances are not present, but the employer raised jurisdictional issues — and it was obliged to determine the issue.
The legislative intent of the code, and the parties collective agreement, provides that the two sides shall share the costs of arbitration equally and bear their own expenses, the arbitrator said.
“In my view, it is a mistake to introduce the notion of costs into labour arbitration. The parties have an ongoing relationship. There needs to be give and take for a viable relationship.”
Arbitrator Paul Love
He also noted that arbitrators have no power to enforce orders by way of contempt power — that is reserved for the courts.
“If the issue is important enough, a party will take it to court,” said Love. “In my view, the arbitrator has the jurisdiction to control the process, but that does not extend to awarding costs.”
The arbitrator noted that, unfortunately, the union in this case paid more costs than it should have had to incur. The employer was being “somewhat inventive” about the implementation of the award and not scheduling the employees in accordance with the collective agreement. The employer also refused to share the “correct and full information at the relevant time.”
Even if the arbitrator had jurisdiction to award costs, he would have declined in this case.
“In my view the employer’s conduct was unreasonable. That is unfortunately part and parcel of some bargaining relationships and the adversarial process,” said Love.
“While the employer’s approach was misguided and the union incurred additional costs which it should not have needed to occur, there are no exceptional circumstances present.”
Compensatory damages
The arbitrator noted that it does have the power to assess damages for breach of a collective agreement. The union in this case sought such damages to compensate it and deter the employer from future inappropriate conduct.
Here, the employer breached the CA by not paying statutory holiday pay on the basis set out in the agreement. The usual remedy is that employees be made whole, which is what the original award did.
There was no other breach of the collective agreement identified by the union and the only “true damages” are what it cost it to secure the implementation award, the arbitrator said.
“In effect, this is a disguised costs claim,” said Love. “Although the amount sought is expressed as a lump-sum in a lower amount.”
He also refused to order aggravated or punitive damages as there was no independent actionable wrong by the employer.
The application was dismissed.
For more information, see Gorge Vale Golf Club v Canadian Union of Public Employees, Local 50, 2023 CanLII 66791 (BC LA)
