The Nova Scotia Court of Appeal has ruled that a unionized employee’s workplace injury claim falls within the exclusive jurisdiction of a labour arbitrator, overturning a lower court’s decision to stay rather than dismiss the action.
The appeal arose from a lawsuit filed by L.M., a teacher at Seton Elementary School in North Sydney, against her employer, the Cape Breton-Victoria Regional Centre for Education (the Centre), after she slipped and fell in the school’s parking lot while arriving at work.
L.M., a member of the Nova Scotia Teachers Union, had already received benefits under the collective agreement, including Injury on Duty leave, sick leave, and long-term disability benefits. Despite this, she initiated a civil claim seeking additional damages.
The Centre defended the action and also brought a third-party claim against S.C. Ltd., the contractor responsible for snow removal at the time of the incident. In response, the Centre filed a motion arguing that the court lacked jurisdiction over the claim, as it fell under the exclusive purview of a labour arbitrator, and sought to have the lawsuit dismissed.
A motions judge agreed that the matter was within the arbitrator’s exclusive jurisdiction but opted to stay the proceeding for two years rather than dismiss it outright. The Centre appealed, arguing that once the court determined it had no jurisdiction, it lacked authority to impose a stay and that dismissal was the only proper course of action.
Court’s analysis
The Court of Appeal agreed with the Centre’s position, concluding that the motions judge erred in granting a stay after determining that the claim was exclusively arbitrable. The court emphasized that once a claim is deemed to fall under a labour arbitrator’s jurisdiction, a civil court cannot retain any control over the matter.
In reaching its decision, the court relied on longstanding jurisprudence, including St. Anne Nackawic Pulp & Paper Co. Ltd. v. Canadian Paper Workers Union, Local 219, Weber v. Ontario Hydro, and Northern Regional Health Authority v. Horrocks. These cases affirm that unionized employees generally cannot pursue civil claims against their employers for matters arising from their employment, as such disputes must be resolved through the grievance and arbitration mechanisms established under collective agreements.
The Court of Appeal reviewed the three-step test for determining exclusive arbitral jurisdiction:
- Whether a statutory process grants exclusive jurisdiction to an arbitrator;
- Whether the dispute falls within that jurisdiction;
- Whether the court should exercise residual discretion to hear the case.
The motions judge correctly found that the statutory framework governing L.M.’s employment established exclusive arbitral jurisdiction and that her claim was fundamentally employment-related. However, the Court of Appeal found that he erred in his application of the third step, which assesses whether a court may retain residual jurisdiction in exceptional circumstances.
No basis for residual jurisdiction
L.M. had argued that she would be left without an adequate remedy if her claim was dismissed because the collective agreement did not provide a mechanism for recovering all the damages she sought. However, the court reiterated that a lack of access to certain remedies—such as punitive damages—does not justify a court assuming jurisdiction where it does not otherwise exist. This principle was confirmed in Gillan v. Mount Saint Vincent University and Cherubini Metal Works Ltd. v. Nova Scotia (Attorney General).
The Court of Appeal also rejected the motions judge’s concerns that an arbitrator might not assume jurisdiction or that L.M. was likely out of time to file a grievance. It reaffirmed that potential procedural barriers to arbitration do not create civil court jurisdiction over employment disputes governed by a collective agreement. As the court noted in Cherubini, the expiration of grievance timelines does not revive a claimant’s ability to bring an otherwise inarbitrable claim before a civil court.
Court lacked authority to stay the claim
The Court of Appeal further determined that the motions judge erred in issuing a stay under Civil Procedure Rule 94.06, which allows a judge discretion when granting an order. The rule applies only where a court has jurisdiction over a matter—something the motions judge had already determined did not exist in this case.
Similarly, the court rejected reliance on Haughn v. Halifax (Regional Police Commissioners), where a stay had been granted in a situation involving uncertainty over the proper adjudicative forum. Unlike Haughn, there was no ambiguity in L.M.’s case—the claim clearly fell within the exclusive jurisdiction of a labour arbitrator, making a stay inappropriate.
Appeal allowed, claim dismissed
The Court of Appeal concluded that once the motions judge found that L.M.’s claim was within the exclusive jurisdiction of a labour arbitrator, the only appropriate course of action was dismissal. By issuing a stay, the lower court improperly retained jurisdiction it did not have. The appeal was allowed, and L.M.’s claim was dismissed, with each party bearing its own costs.
For more information, see Cape Breton-Victoria Regional Centre for Education v. McInnis, 2025 NSCA 15 (CanLII).
