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THE COLLECTIVE AGREEMENT - Extrinsic evidence - Particular words

Friday, February 21, 2020 @ 8:21 AM  

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Appeal by the union from the dismissal of its judicial review application of an arbitration award interpreting an addition to a collective agreement. The union represented nursing staff employed with Alberta Home Services (AHS). AHS adopted an initiative called Operational Best Practices to achieve clinical and administrative efficiencies and cost savings. While AHS acknowledged that staff would be affected by changes, it gave assurance that no unionized employees would lose employment. The union and AHS entered into a letter of understanding to formally confirm the public statements that there would be no layoffs. The letter of understanding did not refer to the Operational Best Practices program but to Operational Restructuring. A dispute arose as to whether a subsequent closure of a hospital unit that was not part of the Operational Best Practices program was caught by the letter of understanding and was therefore in breach of the guarantee that there would be no layoffs. The arbitrator concluded that the words Operational Restructuring meant AHS’s Operational Best Practices program and any successor program that was substantially the same. The arbitrator considered the text of the document, evidence of surrounding circumstances and evidence of communications between the parties during negotiations.

HELD: Appeal allowed. It was reasonable for the arbitrator to consider the text and the surrounding circumstances, but most of the evidence of the parties’ communications during negotiations was evidence of their subjective intentions about the meaning of Operational Restructuring. It was unreasonable for the arbitrator to use that evidence to interpret the agreement. The arbitrator effectively reasoned backwards from the evidence of the parties’ subjective intentions to a conclusion about what the phrase Operational Restructuring meant. His use of the evidence of the parties’ subjective intentions was also unbalanced. It was not clear how the arbitrator could decide that one subjective intention should prevail over the other. The evidence of subjective intentions was prominent in the arbitrator’s analysis of the meaning of Operational Restructuring, and it was not clear that the rest of his analysis explained and justified his decision.

Alberta Union of Provincial Employees v. Alberta Health Services, [2020] A.J. No. 14, Alberta Court of Appeal, B.K. O'Ferrall, R. Khullar and K.P. Feehan JJ.A., January 9, 2020. Digest No. TLD-February172020010