The Nova Scotia Court of Appeal has overturned a provincial Supreme Court decision and reinstated the original wage award set by an arbitration board for EMC Emergency Medical Care Inc.
EMC, a provider of ambulance services across Nova Scotia, and the Canadian Union of Postal Workers (CUPW) were at an impasse over wage negotiations for a unit of 63 employees. The dispute, governed by the Essential Health and Community Services Act, was referred to an interest arbitration board after collective bargaining failed.
The arbitration board, applying the statutory criteria and the replication principle, largely adopted EMC’s proposed wage schedule with a notable upward adjustment for Paramedic Communications Officers. The replication principle, a cornerstone of arbitral jurisprudence, aims to mimic the outcomes of free collective bargaining.
CUPW challenged the arbitration board’s decision, arguing it failed to adequately consider the impact of inflation. The Supreme Court of Nova Scotia agreed, quashing the wage award and directing a new arbitration board to factor in inflation.
Court of Appeal decision
EMC appealed the Supreme Court ruling, and the Court of Appeal has now restored the arbitration board’s original wage award. Justice Joel Fichaud, writing for a unanimous panel, emphasized that the arbitration board had properly applied the statutory criteria and the replication principle.
The Court found the board’s reasoning and outcome were “intelligible, transparent, justified and reasonable” under the principles established in Canada (Minister of Citizenship and Immigration) v. Vavilov.
The Court rejected the lower court’s finding that the board had “blindly” applied the replication principle without considering inflation. Justice Fichaud noted that inflation is inherently subsumed within the statutory criteria and the replication principle, which balances various market factors, including inflation, within the broader context of comparable wage rates.
“If EMC’s wages insufficiently account for inflation, the employee will move to a better paying job,” the Court of Appeal said. “This will adversely affect the employer’s attraction and retention.”
Lessons from this ruling
- Adherence to statutory criteria and principles: The ruling underscores the importance of arbitration boards adhering to statutory criteria and established principles such as replication. Employers should ensure their proposals in arbitration are well-supported by comparable data from similar bargaining units.
- Inflation consideration: While inflation is not an independent criterion under the Act, its effects are considered within the broader market factors. Employers and unions should be prepared to discuss how inflation impacts their ability to attract and retain employees, as this can influence arbitration outcomes.
- Judicial review limitations: The decision highlights the limitations of judicial review in arbitration matters. Courts will defer to the arbitration board’s expertise and rationale as long as the decision is reasonable and grounded in statutory criteria.
For more information, see EMC Emergency Medical Care Inc. v. Canadian Union of Postal Workers, 2024 NSCA 55 (CanLII)
