Procedural Irregularities in Grievance Arbitration
D.T. Beatty *
But it is the disconcerting aspect of almost all human endeavors that
they start out simply enough in order to meet a felt necessity and then
begin to proliferate complications until the new is almost as bad, if not
worse, than the old. With arbitration as it still is today, however, its
practitioners should be able, with reasonable effort, to halt any trends
toward over complication before it goes too far.]
Written over fifteen years ago, the lament in the opening sentence
may no longer merit the optimism of the second. Indeed, by rendering
the process of labour arbitration so formal, complex, lethargic and
remote from the worker, our proclivity to complicate may be a
primal cause of such traditional supporters of the system as the
United Steelworkers and the Teamsters 2 either abandoning or
radically altering the process of labour arbitration.3 As a consequence
of this tendency to excess formalism, the most basic of the institu-
tional strengths inherent in the labour arbitration process have been
effectively eroded. Although some of the causes of this tendency to
complicate the arbitration process are to some extent inevitable,
given the sophistication of industrial life, others have been self-
inflicted by the participants. The purpose of this article is, having
* Associate Professor, Faculty of Law, University of Toronto.
‘Sembower, “Halting the Trend Toward Technicalities in Arbitrations”, in
Critical Issues in Labour Arbitration, (1957, Proceedings of the National Acade-
my of Arbitrators, N.A.A.), 98.
2 Azoff, Joint Committees as an Alternate Form of Arbitration under the
NLRA, (1973) 47 Tul.L.Rev. 325. Note, May, 1973, Labour Arbitration News.
3 It is interesting to note that over the same fifteen years labour arbitration
appears to have sufficiently developed and matured to be perceived by some
commentators as a model of dispute resolution particularly suited for applica-
tion in a variety of diverse institutional settings far removed from the labour
relations sector. So, for example, the collective bargaining model has been
touted as a most efficacious methodology for the resolution of conflicts
between landlords and tenants, ratepayers and developers, racial groups and
consumers and manufacturers: An Analysis of a Technique of Dispute Settle-
ment: The Expanding Role of Arbitration, (1973) 7 Suffolk L.Rev. 618; Barber,
Christie, Kuyek and Whyte, Collective Labour Relations Model Applied to Social
Welfare Programmes, (1973) 22 U. of T. Li. 142; Jones and Boyer, Improving
the Quality of Justice in the Market Place: The Need for Better Consumer
Remedies, (1971) 40 Geo. Wash.L.Rev. 357; Henderson, Arbitration and Medical
Services, (1973) 23 Arb. J. 14; Jones, Wanted: A New System for Solving
Consumer Grievances, (1970), 25 Arb. J. 234.
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PROCEDURAL IRREGULARITIES
identified what is believed to be one of the major sources (of the
self-inflicted variety) of the recent disenchantment with the arbitra-
tion mechanism by participants and commentators, 4 to suggest that
a particular palliative, already within the grasp of the participants,
is available to halt this tendency towards complication. Specifically,
I shall examine one segment of the surprisingly large number of
preliminary and technical objections of a procedural nature which
are being raised before boards of arbitration and which have either
seriously delayed or completely prevented a hearing from being held
on the merits of a grievance. It will be argued that under the present
statutory regime in most Canadian jurisdictions, arbitrators have it
within their statutory mandate to relieve against such procedural
objections in all but’a most circumscribed group of cases.
The Problem of Procedural Technicalities
A casual perusal of the earlier volumes of the Labour Arbitration
Cases indicates that issues not going to the merits of the case arose
in approximately every fifteenth case. By 1972, the figure was closer
to every third case. It is true that some of these non-substantive
issues raised questions of the scope of the arbitrator’s jurisdiction
or authority. Further, it may be that such jurisdictional issues are
capable of resolution only by affirmative action by the legislature.
Thus it may well be that only through codification can one fully
demark the precise scope of an arbitrator’s remedial authority.”
4 Hays, Labor Arbitration: a Dissenting View (1966); Cox, Reflections Upon
Labour Arbitration, (1959) 72 Harv.L.Rev. 1482; Weiler, The Role of the Labour
Arbitrator: Alternative Versions, (1969) 19 U. of T. L.J. 16; Shulman, Reason,
Contract & Law in Labour Relations, (1955) 68 Harv.L.Rev. 999; Azoff, supra,
f.n.2; Kane, Current Developments in Expedited Arbitration, (1973) 24 Lab.
L.J. 282; Killingsworth, “Arbitration, Then and Now”, in Arbitration at the
Quarter-Century Mark (1972 Proceedings, N.A.A.), 11; Sembower, supra, f.n.1.
5 The Alberta Labour Act, S.A. 1973, c.33, s.78; Labour Relations Act, R.S.B.C.
1960, c205, s.22, as amended by S.B.C. 1961, c.31, s.17; Canada Labour Code,
R.S.C. 1970, c.L-1, s.125; The Labour Relations Act, S.M. 1972, c.75, s.69; Indus-
trial Relations Act, S.N.B. 1971, c.9, s.56; The Labour Relations Act, R.S.N.
1952, c258, s.19, as amended by S.N. 1960, c.58, s.14; Trade Union Act, S.N.S.
c.19, s.40; The Labour Relations Act, R.S.O. 1970, c.232, s.37; Prince Edward
Island Labour Act, S.P.E.I. 1971, c.35, s.36; Labour Code, R.S.Q. 1964, c.141,
s.88, as amended by S.Q. 1969, c.47, s.36; S.Q. 1969, c.48, s.28; The Trade Union
Act, S.S. 1972, c.137, s.25. In the interest of brevity, reference in this note will
be directed to the Ontario legislation.
6 Although it is now well settled that an arbitrator has jurisdiction to award
damages (Imbleau v. Laskin, ex parte Polymer Co., [1962] S.C.R. 338) and to
relieve against a disciplinary sanction in the proper case (Port Arthur Ship-
building v. Arthurs (1968), 70 D.L.R. (2d) 693 (S.C.C.); reversed by s.37(8),
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However, a large number of the reported cases in which issues
not going to the merits of the dispute are raised involve objections
to the propriety of the procedure the grievance followed before it
was presented at arbitration. These objections include such pro-
cedural defects as an alleged breach of the time limits set out in
the grievance procedure; allegations of a lack of particularity in the
wording of the grievance; and charges that the grievance was brought
by way of a policy or union grievance which is properly in the
exclusive domain of an employee grievance.
This problem of procedural technicalities inhibiting the arbitra-
tion process is worthy of isolated treatment for at least three
reasons. In the first place it provides one with a manageable and
homogenous group of cases which, because of the consequences that
ensue from giving effect to such procedural technicalities, makes it
necessary to examine the premises upon which the arbitration mod-
el is structured. Secondly, if such objections continue to increase,
the institutional strengths of grievance arbitration may be lost.
Simply put, arbitration will become more costly, more formal and
less expeditious. If arbitrators are required to adjourn hearings to
resolve the preliminary objection when the objecting party so
demands,7 the cost and delay will increase proportionately. As a
consequence of this the parties may simply abandon the arbitration
process and turn to quite different modes of conflict resolution.
Finally, the problem merits separate scrutiny because arbitrators
have it presently within their statutory mandate (and indeed are
required to discharge that mandate) to relieve against procedural
defects in all cases except those in which the party objecting to the
defect can show some prejudice to himself caused by the procedural
irregularity. In short, this particular debilitation of the arbitration
process may be removed by those in control of the process without
further legislative enactment. By virtue of section 37(1) of the
Ontario Labour Relations Act,” arbitrators are required by the legis-
O.L.R.A.), nevertheless his authority to award effective relief in a promotion
case (Re Falconbridge Nickel Mines, [1973] 1 O.R. 136), or his authority to give
effect to statutory provisions relating to the grievance in issue (Re Board of
Education for the Borough of Etobicoke, [1973] 1 O.R. 437) are to various
degrees open to some debate. Given the judicial response to these questions
it may well require a positive response from the Legislature to define the
precise scope of an arbitrator’s remedial powers. See generally on this issue:
Palmer, The Remedial Authority of the Arbitrator, (1960) 1 Current Law and
Social Problems 125. See also Re Samuel Cooper, [1973] 2 O.R. 841.
7 Re I.U.E.W., Local 549 v. Sylvania Electric (Canada) Ltd. (1972), 24 L.A.C.
361, 368 (Simmons).
8 R.S.O. 1970, c.232.
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PROCEDURAL IRREGULARITIES
lature to ignore such procedural irregularities, absent a finding of
prejudice. Section 37(1) provides that:
Every collective agreement shall provide for the final and binding settle-
ment by arbitration, without stoppage of work, of all differences between
the parties arising from the interpretation, application, administration or
alleged violation of the agreement, including any question as to whether
a matter is arbitrablesa
The key is that there be a settlement “by arbitration of all
differences”. The section requires a resolution of such matters on
a reasoned and rational basis which purports to determine the
sa Some jurisdictions, such as Ontario, have a subsection analogous to s.37(3),
which provides that:
If, in the opinion of the Board any part of the arbitration provision,
including the method of appointment of the arbitrator or arbitration
board, is inadequate, or if the provision set out in subsection 2 is alleged
by either party to be unsuitable, the Board may, on the request of either
party, modify the provision so long as it conforms with subsection 1, but,
until so modified, the arbitration provision in the collective agreement or
in subsection 2, as the case may be, applies.
In these jurisdictions it might be argued that the Board has exclusive authority
to require the arbitration clause to conform to s.37(i) and further, that until
so modified, the arbitration clause in the agreement prevails.
However, such an interpretation ignores the express language of s.37(2)
of the Act which provides that if the:
… agreement does not contain such a provision as is mentioned in
subsection 1, it shall be deemed to contain the following provision ….
The statutory clause of s.37(2) is necessarily implied in an agreement if that
agreement does not contain such a clause and not simply if it does not contain
any clause. This requirement applies equally to arbitrators and the Board
alike. Read in this context, it is clear that the jurisdiction given to the Board
is not exclusive. It arises in a context or proceeding completely divorced
from an actual dispute at arbitration. It arises when one party alleges that
the provisions of the agreement or the deemed clause are inadequate or
unsuitable. This does not deny the jurisdiction of an arbitrator who, when
faced with a clause in conflict with the mandate of s.37(1), must also proceed,
pursuant to s.37(2), to imply the provision provided by statute as a term of
the agreement. In this sense the arbitrator is not simply responding to a
request by one party to modify an inappropriate or unsuitable provision
since the Board is in a s.37(3) application. Rather the arbitrator is merely
applying the doctrine of illegality in contract, and then, pursuant to the
mandate of s.37(2), implying the provision set out in the Act. Finally, if the
contrary interpretation of s.37(3) were accepted, the reasoning and conclusion
advanced by this note would still prevail. In such a case, the Board rather
than the arbitrator would have the legislative mandate to remedy these prob-
lems of procedural deficiencies. There would still be no requirement for
additional legislative action. However, the spectre of the Board besieged with
a flood of applications seeking modification of arbitration provisions should
demonstrate the logic in adopting an interpretation of s.37(3) giving both the
arbitrator and the Board a co-operative jurisdiction of these matters.
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merits of the dispute. It would be taking literalism to its extreme
and draining the words “settlement by arbitration.., of all differen-
ces” of their purpose to argue that a dispute is so settled where an
arbitrator denies a claim on the basis of a procedural defect. Arbitra-
tion, as a form of adjudication, requires a rational decision based
on the presentation of proofs and reasoned arguments. Both as
promulgated in section 37 and as universally recognized, the arbitra-
tion of disputes necessitates a resolution of those differences after
a testing of the competing reasoned arguments and not a resolution
on the basis of a coin toss, a roll of the dice or a procedural irregu-
larity.’ If the statute is interpreted literally, all differences, even
those which are in breach of the time limits, even those lacking the
particularity required by the agreement or those not following the
proper procedure, must be “arbitrated”. The section admits of no
exceptions.
Such an interpretation is consistent with the facts of industrial
life, where it is rare for the parties to provide explicitly for the
negation of all grievances which have transgressed some procedural
requirement. Usually nothing is said, and for a sound reason. Time
limits are provided in collective agreements not to provide a means
by which the merits of a dispute can be circumvented but rather to
discourage the recipient of the grievance from dragging out in an
interminable fashion the matter in issue. As one arbitrator has stated
with regard to “directory time limits”:
Directory requirements are those provisions which state what the parties
have agreed should be done and include provisions which set out the time
within which the events should take place. Since a directory provision
does not specify what will flow from a breach of the provision and since
no substantive remedy is expressly contemplated, strict compliance is
not essential. While directory provisions need not be complied with to
the letter they cannot, of course, be totally ignored. Directory provisions
with respect to time are usually agreed to by the parties in order to pre-
vent hardship or unfair advantage which may be caused by delays. Such
provisions are inserted in collective agreements as an expression by the
parties of their common intention that certain things take place without
undue delay.0
In short, for most collective agreements the insertion of proce-
dural provisions, with or without the use of the imperative, is de-
signed to further, not frustrate, the grievance and arbitration process.
Indeed, if full effect is to be given to the plain words and clear pur-
pose of section 37 one must go further and conclude that the parties
0 Fuller, The Forms and Limits of Adjudication (1959).
10Re U.S.W., Local 6962 and Union Carbide Canada Ltd. (1968), 19 L.A.C.
412, 418 (O’Shea).
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PROCEDURAL IRREGULARITIES
are precluded from contracting out of the legislative policy of re-
solving all disputes by way of arbitration. Section 37 must be
construed to mean that the parties cannot explicitly sanction the
breach of a procedural provision with the negation of the grievance.
The argument that section 37(1) of the Act requires the arbitrator
to ignore procedural irregularities not causing some prejudice not
only accords with the literal interpretation of that section, but, more
critically, coincides with the legislative purpose manifest in the Act
generally and section 37 itself, and with good industrial relations
sense. This interpretation is fortified when one looks at section 103
of the Act. It provides that:
No proceedings under this Act are invalid by reason of any defect of
form or any technical irregularity and no such proceeding shall be quashed
or set aside if no substantial work of miscarriage of justice has occurred.”
The intention of the legislature is clear.12 Proceedings, including
arbitrations, are to be resolved in a manner furthering the objects
of the Act (which include labour peace) and not on mere techni-
calities. Only if the irregularity has occasioned a substantial wrong
will this policy be ignored.
This conclusion is further strengthened when one considers
section 36 of the Act and the strong link between it and section 37.
Section 36 provides that:
Every collective agreement shall provide that there will be no strikes or
lockouts so long as the agreement continues to operate. 3
Although the scope of section 36 is broader than that of section
37, it is clear that each is in the nature of being the quid pro quo for
the other. 14 That is, although section 37 only requires the arbitration
of those matters involving “the interpretation, application, adminis-
tration or alleged violation of the agreement” (and not all disputes
of any kind arising outside of the contract), the legislature has
replaced economic coercion in these matters with reasoned adju-
dication as the sole method of conflict resolution. In return for
surrendering the right to strike, labour was compensated with the
right to arbitrate all questions arising during the life of the agree-
ment that arose out of that agreement. Although issues may arise
which fall outside the scope of the agreement and which are therefore
not susceptible to either a strike or arbitration, all those disputes
involving the interpretation, application, administration or alleged
11 R.S.O. 1970, c.232.
12For a different interpretation of the meaning of s.103, see Union Carbide
v. Weiler, [1968] S.C.R. 966, 70 D.L.R. (2d) 333.
Is R.S.O. 1970, c.232.
14 Textile Workers Union v. Lincoln Mills, 353 U.S. 448 (1957).
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violation of the agreement must be arbitrated. In preferring arbitra-
tion to strikes as a way of resolving problems of contract inter-
pretation, the legislature is clearly stressing industrial peace in a
manner which derogates from the parties’ ability to contract freely.
(The American Congress, by comparison, made the opposite choice).”
It would hardly be in the interest of industrial peace, a policy clearly
enunciated in section 36, for the legislature to allow the parties to
deny the employees access to arbitration because of a mere proce-
dural irregularity. As a condition precedent to achieving a viable
relationship and to ensuring industrial peace, mutual differences
and felt grievances must be confronted in a rational and forthright
manner. If fundamental complaints of either party over their res-
pective rights and obligations in the agreement are not peacefully
resolved, an attitude will develop that one must effect a resolution
by industrial coercion regardless of its legality. The policy of in-
dustrial peace in section 36 can only be effected if section 37 is given
a full and unyielding interpretation, denying the parties the opportu-
nity to circumvent, limit, restrict or subordinate the mechanism
contained therein. The duty to arbitrate, to resolve disputes on their
merits, must be made to embrace all disputes arising during the
term of the agreement and which are founded in that agreement.
This assertion is premised upon the same argument as that
cited by those who, in observing the narrower scope given to the
duty to arbitrate than the correlative negation of the right to strike,
have argued that the latter prohibition should not extend to matters
not covered by the agreement. 16 That is, it is said that to the extent
that a dispute is not expressly covered by the agreement and there-
fore not within the scope of the duty to arbitrate, the employees
should be free to resolve the matter by collective coercion. As in the
United States, the employer would then be induced to negotiate a
more extensive arbitration clause in exchange for the union volun-
tarily surrendering the right to strike. In the result, issues which
had been determined by the unilateral employer action would be the
subject of joint resolution, or, failing this, of independent third
15 Wellington, Freedom of Contract and the Collective Bargaining Agreement,
(1964) 112 U.Pa.L.Rev. 467. See also Cox, supra, f.n.4.
10 It is interesting to note that although Professor Weiler is one of those
who argues forcefully for the logic behind this proposition in the context of
making arbitration an exact quid pro quo to the right to strike, he is not
prepared to follow the same philosophy in the context of denying the parties
the right to limit the arbitration procedure by procedural restrictions or
otherwise: Weiler, supra, f.n.4, and Re Weston Bakeries (1970), 21 L.A.C. 308,
310 (Weiler).
1974]
PROCEDURAL IRREGULARITIES
party determination. Thus, by defining the perimeters of sections 36
and 37 to be coextensive it is envisaged that issues which presently
remain unresolved or soluble solely at the employer’s discretion,
and which thereby might undermine an otherwise stable collective
bargaining regime, would be capable of joint or third party resolu-
tion. Alternatively, this same result might be achieved by redrafting
the duty to arbitrate to embrace all disputes arising during the
agreement pertaining to the work environment and working con-
ditions. However, it will suffice here to acknowledge that issues
now denied a forum of third party resolution owing to some pro-
cedural irregularity would by a more purposeful interpretation of
section 37 be brought within the ambit of joint or third party
determination.
To adopt any other interpretation is to deny the uniqueness of
a collective bargaining regime. As is generally recognized, this is a
relationship fundamentally different from that known historically
in the commercial contract setting. The agreement governs the
affairs of a tripartite relationship: employer, employee and union.
Further, in sheer numbers, it can control the working lives of
thousands of persons. It regulates an enormously wide range of
problems which daily impinge upon a worker’s life: wages, working
hours, working conditions, health, safety, lay-offs, promotions, dis-
cipline, pensions, work assignments, etc. More critically, it is a
relationship which by law must endure for a minimum period of
one year and which usually lasts for the duration of the enterprises’s
existence. It is by the nature of the statutory regime a mutually
dependent relationship. Inevitably the parties must co-exist, must
compromise, must agree. In a sense it is in many of its aspects an
enforced or compulsory relationship. As such, it is courting unlawful
conflict to allow grievances and complaints to build up over two
or three years if no avenue of resolving these complaints is available
in the interim. If the employee’s complaint remains unresolved owing
to an arbitrator’s refusal (or inability) to weigh the merits and
relieve against the time limits, the policy of industrial peace as
enacted in section 36 will be made a shambles. At a minimum the
opportunity to develop a mature collective relationship will be
undermined. Thus it becomes critical to resolve, not deflect, all
legitimate issues of dispute. “[A]ll differences between the parties
arising from the interpretation, application, administration or alleged
violation of the agreement” must be resolved by arbitration, even if
the parties may have provided otherwise. To cite but one arbitrator
on this matter:
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Unlike courts where the litigants “part company” at the termination of
in arbitration proceedings continue to “live
the process, disputants
together” and festering discontent which does not find its outlet in
arbitration is inimical to maintaining both a proper working and col-
lective bargaining relationship. The necessity to quell contained dis-
content is one of the reasons that matters of labour relations are dealt
with by arbitration proceedings which can and tend to be procedurally
non-technical.
That approach to procedural issues was expressed by the Supreme
Court of Canada in Re Galloway Lumber Co. Ltd. and B.C. Labour Rela-
tions Bd., 48 D.L.R. (2d) 587 at 595, [1965] S.C.R. 222, 51 W.W.R. 90, by
Spence,., where he stated: “I am of the opinion that in the matter of
labour relations and arbitration thereon to take a narrow, technical and
pedantic view of the procedure is to defeat the purpose for which the
statute was enacted”. 17
Judicial Response to Procedural Irregularities
With three exceptions, 18 arbitrators have not yet recognized, let
alone responded to, this line of reasoning. Instead, they have reacted
to two decisions of the Supreme Court of Canada,’ 9 which have
heretofore been read as prohibiting arbitrators from evading such
procedural provisions. To circumvent these decisions, they have
resorted to a distinction between those procedural provisions which
are mandatory and must be followed on pain of rendering the
grievance invalid and those which are directory only, the breach
of which does not prevent the matter from being resolved on its
merits. These latter provisions are seen as mere guides to which the
parties should strive to adhere. Notwithstanding its laudable object-
ive of reducing the deleterious impact these decisions would have on
labour arbitration, this line of reasoning suffers from the obvious
defect of failing to meet the issue directly and in a forthright manner.
Further, the distinction between mandatory and directory provisions
has been drawn along sharply divergent lines by different arbitrators
without ever acknowledging the fiction in which they are often
engaged in ascribing to the parties the intention to make these
provisions mandatory or directory. To catalogue these divergent
opinions on the effect to be given to a procedural irregularity is to
illustrate how rather less important is the language chosen by the
17Re Imperial Tobacco (1969), 20 L.A.C. 310, 313 (Shime).
‘8 Re Weston Bakeries, supra, f.n.16; Re Township of Vaughan (1969), 20
L.A.C. 392 (Weatherill); Re United Brewery Workers and Canadian Breweries
Transport Ltd. (1963), 14 L.A.C. 220 (Laskin).
‘0 Union Carbide Canada Ltd. v. Weiler (1968), 70 D.L.R. (2d) 333 (S.C.C.);
General Truck Drivers Union Local 938 v. Hoar Transport (1969), 4 D.L.R. (3d)
449 (S.C.C.).
1974]
PROCEDURAL IRREGULARITIES
parties than the one chosen to interpret it. For example, some
arbitrators and courts have taken the view that only those provi-
sions which “provide(s) a penalty or expressly deprive(s) the arbi-
tration board of jurisdiction upon failure to scrupulously adhere to
the provisions of the agreement” are mandatory.F0 Other boards have
asserted that in the proper context and circumstances, the presence
in a procedural provision of the word “shall” may make such a
provision mandatory, and if breached deny an arbitrator jurisdiction
to hear the matter?’1 Still other arbitrators and courts appear to
ascertain the nature of the provision according to the factual con-
sequences of the breach to the parties concerned.2 2 Still others have
held that the presence of the word “shall”, even when accompanied
by time limits set in bold type, does not render the provision man-
datory.23 In short, whether a provision is mandatory, whether a
procedural irregularity will negate a grievance, depends more upon
who is selected as the arbitrator than the intention of the parties.
What is of greater concern, however, is that these distinctions ignore
the more fundamental issue, namely whether section 37(1) precludes
the parties from derogating from the statutory policy of resolving
“all differences by arbitration” even if a clause is mandatory.
It should also be noted that in addition to real differences
between arbitrators on what linguistic formulation is required to
render a provision mandatory, very difficult questions of inter-
pretation can make the determination of the nature of a procedural
20 Re U.S.W. and Automatic Screw Machine Co. Automotive Hardware (1970),
21 L.A.C. 255, 258 (Shime); Re United Glass & Ceramic Workers and Dominion
Glass Co. (1972), 1 L.A.C. (2d) 151 (Reville); application for judicial review
to quash the award granted: [1973] 2 O.R. 573, 34 D.L.R. (3d) 629; leave to
appeal granted: [1973] 2 O.R. 763; appeal allowed: [1974] 1 O.R. 336.
2 1 Re U.S.W. Local 6962 and Union Carbide (1969), 20 L.A.C. 74 (Adell); Re
I.C.W.U., Local 721 and Brockville Chemical Ltd. (1972), 24 L.A.C. 423 (Revile);
aff’d 73 C.L.L.C. 14,180; Re U.S.W. and Construction Products Inc. (1970), 22
L.A.C. 125 (Brown); Re Valade and Eberlee, [19723 1 O.R. 682.
22Re Lincoln County Roman Catholic Separate School Board and Buchler,
[1972] 1 O.R. 854; Re Municipality of Metropolitan Toronto and Toronto Civic
Employees Union, Local 43 (1973), 3 L.A.C. (2d) 126 (Schiff). The grievance
giving rise to this latter award (a discharge case), which is scheduled to be
reviewed by the Ontario Division Court on the time limit issue subsequent to
the writing of this note, will have resulted in a delay of over one year without
the aggrieved employee even having had a hearing of his case, let alone a
resolution.
23 Re International Longshoremen’s Assoc., Local 1879 and Hamilton Terminal
Operators Ltd. (1966), 17 L.A.C. 181 (Arthurs); Re C.U.P.E., Local 167 and City
of Hamilton (1967), 18 L.A.C. 96 (Hanrahan); Re Tobacco Workers, Local 338
and Imperial Tobacco Ltd. (1969), 20 LA.C. 310 (Shime); Re I.U.E.W., Local
549 and Sylvania Electric (1972), 24 L.A.C. 361 (Simmons).
McGILL LAW JOURNAL
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provision even more uncertain. In the Hoar Transport decision
itself the arbitrator was faced with a clause by which a grievance
would be nullified if the time limits were exceeded by the grievor,
his agent or his representative. Where the union nominee to the
board of arbitration failed to ask for the appointment of a chairman
by the Minister of Labour within the time prescribed by the agree-
ment, the arbitrator found the nominee was not “the agent or re-
presentative” of the grievor. The Supreme Court disagreed, found
the provision to be mandatory and barred the grievance.
That the plain language, the underlying policy of section 37 and
good industrial sense inexorably lead one to the conclusion that the
parties cannot by their own agreement prevent an arbitrator from
deciding a case on its merits is clear even to some of those who
themselves have refused to adhere to it.14 That is so because it is
said this conclusion is foreclosed by the two decisions of the Supreme
Court of Canada in Union Carbide and Hoar Transport 2 noted ear-
lier, and by an earlier Ontario Court of Appeal decision.’ 6 However,
upon a closer examination of the cases, it becomes clear that none
of these judgments denies or even considers this interpretation. The
Courts did not address themselves to the issue of whether section
37(1) would prohibit an arbitrator from denying a grievance for
reasons other than on the merits. Only in the Inco decision of the
Ontario High Court did Gale,J. (as he then was) in a somewhat
ambiguous passage appear to lend support to this interpretation of
section 37. -7 With this exception (reversed by the Court of Appeal
supra, f.n.19.
24 Re Weston Bakeries, supra, f.n.16.
25 Union Carbide v. Weiler and General Truck Drivers v. Hoar Transport,
2 6 Re Sudbury Mine, Mill & Smelter Workers Union, Local 598 and Interna-
tional Nickel Co. of Canada, [1962] O.R. 415, 32 D.L.R. (2d) 494 (H.Ct.);
[1962] O.R. 1089, 35 D.L.R. (2d) 371 (C.A.).
2 7 Re International Nickel, [1962] O.R. 415, 419, where Galej. states that:
I agree with Mr. Sopha that if there has been abdication by the union of
its ordinary right to bring a matter such as this to arbitration then it must
be found, if at all, in clear and explicit language. In this agreement such
language is entirely lacking.
It strikes me, too, that having regard to the provisions of s.34(2) if Articles
7.01 and 7.09 are substantially different than that which is set out in the
subsection then the latter must prevail and certainly if it does, the arbi-
tration of this dispute under Article 11.13 is proper.
It would appear from the concluding words of the first paragraph that Mr
Justice Gale would allow, by negative inference, for an occasion or occasions
when clear language could be found to deny a union some of the rights
contained in s.37(1). However, in the second paragraph, by asserting that
clauses providing something less than that provided for in s.37(2) by the
19741
PROCEDURAL IRREGULARITIES
on a different point of law) the effect of section 37 on grievance and
arbitration clauses has not been raised. Indeed the Inco decision
itself, cited by one arbitrator” as the strongest authority precluding
an arbitrator from relieving against procedural irregularities, was
not even referred to in the two decisions rendered by the Supreme
Court of Canada. It is simply reading too much into the cases to
conclude that the Courts have held for the primacy of freedom to
contract over the goal of industrial peace and allowed the parties
to restrict the scope of section 37(1).
What concerned the Supreme Court in Union Carbide and Hoar
Transport was rather whether an arbitrator had the inherent juris-
diction to relieve against breaches of terms of the agreement. Clearly,
in the face of the common language of many agreements stating that
a board has no power “to make a decision inconsistent with the terms
of this agreement or to vary, modify or alter any provisions of this
agreement”, it may well be that arbitrators cannot, without some
statutory authority, so amend the agreement. However, that is not to
deny that the legislature may require that relief be given to a breach
of a procedural clause in the agreement. In Union Carbide the Court
merely found that in ignoring the time limit which had been breached,
the arbitrator exceeded his jurisdiction by “amending, modifying,
varying and altering” the terms of the agreement in contravention
of the mandate given him by the parties. The Court, to use its own
language, asked itself the wrong question. It should have asked,
notwithstanding the time limits and the limitation on the arbitrator’s
jurisdiction in the agreement, whether he might relieve against the
procedural irregularity and give effect to’ the policy embraced in
section 37(1). In Hoar Transport the Court was able to find that the
union nominee was the representative of the grievor and that the
time limits had been exceeded. Thus it merely cited its Union Carbide
decision in declaring that the arbitrator had exceeded his jurisdic-
tion 29 Finally, the Court of Appeal in Inco simply found that the
interpretation of the arbitrator which gave effect to the procedural
Legislature are replaced by the latter would appear to admit of no derogation
from the mandatory settlement of all disputes by arbitration as set out in
ss.37(1) and (2).
This line of reasoning by which a clause restricting the right to settle
differences through arbitration is deemed inconsistent with s.37(1), resulting
in the invocation and application of the clause contained in s.37(2) under which
the grievance is arbitrable, is also to be found in Re Township of Vaughan,
supra, fn.18.
28Re Weston Bakeries, supra, f.n.16 (Weiler).
29 For similar reasoning in Manitoba see Re Powell Equipment and U.S.W.
(1971), 22 D.L.R. (3d) 692 (Man. C.A.).
McGILL LAW JOURNAL
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provisions of the agreement was one which the language could
reasonably bear. That interpretation was not therefore susceptible
of review by a court. The Court of Appeal similarly failed to address
itself to the argument that section 37 required the resolution by
arbitration of all disputes.
That on this issue the legislature has subordinated the policy of
free bargaining to the goal of industrial peace appears obvious. The
Ontario Labour Relations Board has implicitly recognized this in a
recent decision in which it overrode an explicit provision in an
agreement to the effect that the parties could not make use of the
grievance procedure on differences arising out of an insurance plan
mentioned in the collective agreement. The Board appended to the
contract under section 37(2) a grievance and arbitration provision
for this very insurance programme. The Board there made explicit
reference to the requirement in section 37(1) that “all differences”
be resolved by arbitration.3 Thus the Board concluded that section
37 precludes attempts to exclude substantive issues covered in the
agreement from arbitration. It should follow that arbitrators should
adopt the same approach when confronted with clauses which deny
access to their forum if the grievance fails to comply with the
procedural technicalities contained in the agreement. That is, a
limitation on the scope of the arbitration process by way of time
limits (absent an element of prejudice) is not materially or rationally
different than a limitation on the scope of arbitration by way of
delineation of substantive issues which are not, by agreement, suscep-
tible of arbitration.
One cannot distinguish between procedural and substantive limi-
tations with respect to their subversion of the policy underlying
section 37. Both by definition circumscribe what disputes may be
resolved on their merits by an impartial third party. Both derogate
from the ambit given the arbitration process by the legislature. The
denial of an employee’s grievance against an unjust discharge owing
to the employee’s failing to file his grievance within a two minute
time period is as effective as precluding all matters of discipline
from being arbitrated. In short, a distinction between substantive
and procedural limitations, never entirely clear in most contexts,
becomes even less so as the procedural limitation becomes more
stringent. For example, is a procedural time limit of one second a
procedural or substantive limitation?
30 U.A.W. Local 1285 v. American Motors (Canada) Ltd., [1973] O.L.R.B. Rep.
211 (April). As with the Metropolitan Toronto award, this decision has been
scheduled for review by the Ontario courts subsequent to the writing of this
note.
1974]
PROCEDURAL IRREGULARITIES
To argue that in the case of procedural limitations the grievor has
it within his power by adhering to such requirements to ensure the
issue will be resolved on its merits is to observe the obvious and
ignore the relevant. (At least this is so as long as the procedural
limitations themselves are reasonable, which does not appear to be a
condition precedent to being a valid limitation.) That is, the more
fundamental question is whether it must (or may) follow that such
procedural transgressions necessarily entail a denial of the claim.
To ask such a question is to answer it. In short, the two types of
limitations are inextricably interwoven in purpose and effect. That
they embrace different means, that one is potentially less severe and
is capable of being avoided, is of no consequence to the issue of
whether the parties can by agreement provide for something less
than that set out in the Act.
The legislature frequently subordinates freedom of contract to
other social policies in labour relations as well as in other contract
arenas.3 1 Thus the Labour Relations Act provides that by virtue of the
certification and bargaining process an employer must enter negotia-
tions with one not of his own choosing and endeavour to effect a
collective agreement; 32 that the parties must include certain provi-
sions in its terms;- and that certain terms are prohibited from being
included in the agreement 4 Further, in section 36 the legislature has
denied the parties the freedom to use economic force during the term
of the agreement. In a recent dcision 5 the Nova Scotia Supreme
Court concluded that the parties could not in the face of a similar
provision (section 19) in the Nova Scotia Trade Union Act contract
out of the statutory policy and provide for a limited right to strike
during the agreement. An arbitrator had given effect to a limited
right to strike provision set out by the parties in their agreement
as justifying a subsequent walkout and thus allowed the grievance
of the employees who had been disciplined for striking. Mr Justice
Bissett found that the limited strike clause agreed to by the parties:
… violate[d] the provisions of s.19(l) of the Trade Union Act and that
the arbitrator could not therefore base his decision, as he did, in any
fundamental way on such [a clause]. 36
31 See, ‘e.g., Kessler, Forces Shaping the Insurance Contract, (1954)
Ins.L.J.
151.
32 Ontario Labour Relations Act, s.14, supra, f.n.5.
33E.g., a recognition clause (s.35) or a minimum term of one year (s.44(1));
Ontario Labour Relations Act, supra, f.n.5.
34 E.g., certain union security clauses are prohibited unless certain conditions
exist: Ontario Labour Relations Act, s.38, supra, f.n.5.
35 Re Otis Elevator Co. Ltd. (1971), 22 D.L.R. (3d) 709 (N.S. S.C.).
30 Ibid., 712.
McGILL LAW JOURNAL
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In the same way, an arbitrator should not deny a grievance on
the basis of a breach of a procedural clause in the agreement in the
face of equally mandatory language contained in section 37(1). Given
the strong nexus between sections 36 and 37 it should follow even
more forcefully that a prohibition to contract out of one should be
met with a prohibition to contract out of the other whether by
substantive or procedural limitations. The argument37 that the nega-
tion of freedom of contract in favour of industrial peace is insti-
tutionally unsound and substantively unwise is simply inapplicable
to the Canadian environment, where the institution enacting the
policy is the legislature and where the legislature has at the same
time as denying the right to strike imposed the correlative obligation
to arbitrate. Very simply, section 37(1), like section 36, is mandatory
and should require an arbitrator to ignore a merely procedural
breach of the contract. Since strikes during the life of the agreement
are prohibited, one should restrict the freedom to contract by en-
forcing the obligation to arbitrate. To the extent that the union’s
freedom to strike has been eliminated, its right to arbitration
should be ensured. Thus when faced with procedural provisions,
the breach of which would otherwise deny the board’s jurisdic-
tion, the arbitrator must give effect to section 37 and resolve the
differences on their merits.38
Prejudice to a Party
The conclusion that section 37(1) admits of no limitation to
the right and obligation to arbitrate issues involving the inter-
pretation, application, administration or alleged violation of the
agreement must be qualified in one important respect. It will
still be open for the party who objects to a breach of a procedural
limitation to argue that the grievance should be denied because
the irregularity has prejudiced his ability to properly respond to
the grievance. For example, in the case of time limitations the
grievance might be denied for unreasonable and prejudicial delay
under the equitable doctrine of laches. It is to be noted, however,
that this is a limitation denying a claim for delay and not a
37 Supra, f.n.15.
3 8 The arbitrator’s ability to resort to statutory provisions to resolve cases
of conflict between the statute and the agreement would now appear to be
beyond dispute. See Re Board of Education for the Borough of Etobicoke,
[1973] 1 O.R. 437; see also Weiler, The Arbitrator, The Collective Agreement
and the Law, (1972) 10 Osgoode Hall L.. 141.
19741
PROCEDURAL IRREGULARITIES
limitation on the arbitrator’s jurisdiction 9 It is now well settled
that this doctrine does apply to labour arbitrations 40 and provides
a gloss on section 37(1). It is simply inconsistent with the provi-
sions of statutory policy (as can be discerned from the concluding
words of section 103), industrial relations and common sense to
allow one, under the language of section 37, to assert a right to
arbitration where, by one’s delay, one has prevented the other
party from effectively marshalling a defense.
Can it be said that in providing for such procedural conditions
as time limits the parties are defining what shall be deemed to
be prejudicial? Such an argument followed to its conclusion simply
succumbs to logic. The denial of all grievances for a breach of a
twenty-four hour time limit in the grievance procedure is a denial
for reasons other than prejudice. Prejudice is by definition a
matter which can only be demonstrated ex post facto. It should
be obvious that the mere assertion that prejudice will be occa-
sioned if a grievance is not filed within a particular time limit
or in a particular form is not proof that prejudice will or has
occurred.
Thus a breach of any procedural provision should not render
a dispute inarbitrable unless the party complaining of the breach can
demonstrate some prejudicial effect to himself from relieving against
such a breach. All questions involving a dispute on the meaning
of a substantive provision would, subject to that one limitation,
be required to be submitted to the arbitrator for resolution on
the merits. In sum, the legislative policy of industrial peace seen
in sections 36 and 37 of the Act would be given its full and
proper scope by arbitrators. It would be a bitter irony if, as a result
of arbitrators failing to give effect to this mandate, the process of
labour arbitration found itself set in a more rigid and formalistic
mould than the judicial process it was designed to supplant. To
interpret section 37 and collective agreements in any other fashion
would be to deny the historical and pragmatic basis upon which
the grievance and arbitration process is premised.
39 Re Ottawa Newspaper Guild Local 205 and Ottawa Citizen (1965), 55
D.L.R. (2d) 26 (Ont.). See also Re Saanich Firefighters Union Local 967 and
District of Saanich (1971), 22 D.L.R. (3d) 577 (B.C.); and A.-G. Can. v. Granell
(1956), 17 D.L.R. (2d) 141 (Ont.).
4 0 Re Ottawa Newspaper Guild Local 205 and Ottawa Citizen, supra, f.n.39;
Re Algoma Steel and U.S.W. Local 4509 (1973), 2 L.A.C. (2d) 230, 250 (Andrews).
41 (1874), L.R. 5 P.C. 221, 239, 240.
