Ontario Superior Court affirms deference applies to contract interpretation

Contract

In Mammoet Canada Eastern Ltd. International Union of Operating Engineers, Local 793, [2022] O.). No. 2633, the Divisional Court found, on an application for judicial review, that the Ontario Labour Relations Board was reasonable in their interpretation of a collective agreement provision.

Mammoet Canada Eastern Ltd. brought a judicial review application on the decision of the board asserting that the board unreasonably interpreted the language of the collective agreement. The provision in question provides compensation for employees’ travel time commuting from the lodging location to the job site using a rental car, when on out-of-town project sites. The employer argued that the collective agreement does not contain clear, specific and unambiguous language that states employees must be remunerated when driving a rental vehicle to and from their out of-town lodging and job sites.

The International Union of Operating Engineers, Local 793 argued that the contract language does intend to provide remuneration to employees for travel time on out-of-town jobs. The union relied on past practices where employees have been paid when traveling in taxis, Ubers, given rides by coworkers and clients or when employees commute using the employer’s transport trucks and pick ups. Furthermore, the employee at the core of this claim was previously paid for his travel time on an out-of-town town job two months prior to this incident.

Language of collective agreement

The board reviewed Article 1.12 of the collective agreement which stated:

“1.12 Employees required to use or transport the Employer’s equipment shall be paid their classification rate including overtime for doing so.”

Ontario Labour Relations Board decision

At the heart of this matter the term “equipment” was in dispute, Specifically, whether a rental car leased by the employer constitutes ownership and control, and therefore, should fall under the definition of equipment for the purposes of the collective agreement. Under s. 133 of the Labour Relations Act the board has the authority to make a final and binding determination regarding interpretation of a collective agreement, where a party to the agreement refers the grievance to the board, irrespective of the grievance and arbitration provisions.

Based on the language of the Article, the board determined that when an employee is driving a rental vehicle to commute to a job site from their out-of-town lodging, that employee is being “required to use or transport the Employer’s equipment.” As a result, the board allowed the union’s grievance and found that the employer was obligated to compensate the employee for any unpaid travel time.

Relying on Bruce Power LP, 2020 CanLII 96012, the board reviewed the collective using the applicable principles of interpretation, being that the words of a collective agreement must be given their plain and ordinary meaning unless the agreement, as a whole, suggests a different or special

Ontario Superior Court affirms deference applies to contract interpretation – The Lawyer’s Daily meaning is intended. Further, all words must be given meaning, and different words are assumed to have different meaning unless otherwise stated. In this case, the board concluded that the collective agreement did not have any language that qualified the word “equipment” which left the board to conclude that equipment should bear its ordinary meaning of being “a set of tools or other objects commonly used to achieve a particular objective.” Moreover, the rental vehicle was in the sole control of the employer, and the operation of the rental vehicle was considered work for the purposes of the meaning of Article 1.12.

Divisional court judicial review

The employer submitted that the board’s interpretation of the collective agreement was unreasonable because the employee was not “required” to use the rental vehicle, they just needed to be at the job site, and a paid vehicle was available. The employer also submitted that they do not own the rental vehicle or exercise control to be analogous with ownership. Further, the employer argued that Article 1.12 is specific to Crane and Equipment Rental Business, which outlines equipment used by crane operators and does not include rental vehicles, nor is it consistent with the general use of the word “equipment” throughout the collective agreement. The employer further submitted that the board unreasonably relied on inapplicable case law and misapplied past practice evidence.

The Divisional Court, following the Vavilov principles, analyzed the judicial review application under the reasonableness standard of review ((Canada (Minister of Citizenship and Immigration) v. Vavilov [2019] S.C.J. No. 65). The governing principle that the court relied on is that a collective agreement is a contract and taken from Sattva Capital Corp. v. Creston Moly Corp. [2014] S.C.). No. 53. “The meaning of words is often derived from a number of contextual factors, including the purpose of the agreement and the nature of the relationship created by the agreement.” In addition, Vavilov sets out that judges conducting a reasonableness review should show deference to administrative decision-makers with practice-specific knowledge.

Contrary to the employer’s submissions, the court determined that the board properly applied contract interpretation principles. The court found that although the collective agreement includes lists of various types of equipment, which does not specifically note regular automobiles, it does not state that the equipment mentioned equates to an exhaustive list for the entire agreement. Despite the employer’s assertion that the board contorted the meaning of “equipment,” the analysis was grounded in review of the “plain words, common sense and practical realities of the construction industry.” Moreover, regardless of the whether the equipment is leased, rented or wholly owned by the employer, the aspect of control is prevalent, and it was reasonable to confer that the level of control the employer had over the rental vehicle would ultimately constitute it as the employer’s equipment under Article 1.12.

Furthermore, no evidence was submitted that suggested any other means of transportation was arranged for the employee to get from his lodging to the job site. The rental vehicle in this instance was required for the employee to travel to the job site and provided by the employer for the same reason. For those reasons the court sided with the union and noted that the board’s analysis involving case law and past practice evidence was not necessary.

The key takeaway from this case is that administrative boards will be given deference on contractual interpretation when expertise can be relied on, and terms in a contract cannot have an individualized assumed meaning without context. If a term has an explicit definition, it should be clearly spelled out to avoid any ambiguity.

This article was written by Reshida Darrell and was originally published by The Lawyer’s Daily on October 20, 2022. Reshida is an Employment Lawyer at Monkhouse Law.

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