



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



Ferrari v. University of British Columbia,









2014 BCCA 18




Date: 20140121

Docket: CA040195

Between:

Lee Ferrari

Appellant

(Plaintiff)

And

University of
British Columbia

Respondent

(Defendant)

And

Association of
Administrative and Professional Staff

Intervenor




Before:



The Honourable Mr. Justice Frankel

The Honourable Madam Justice Garson

The Honourable Madam Justice Stromberg-Stein




On appeal from:  An
order of the Supreme Court of British Columbia, dated August 3, 2012, (
Ferrari
v. University of British Columbia
, 2012 BCSC 1173, Vancouver Docket No. S115870).




Counsel for the Appellant:



J. Coutts





Counsel for the Respondent:



M. Korbin





Counsel for the Intervenor



A.E. Black, Q.C. and
  S.T. Mayor





Place and Date of Hearing:



Vancouver, British
  Columbia

September 16, 2013





Place and Date of Judgment:



Vancouver, British
  Columbia

January 21, 2014





Written Reasons by:





The Honourable Madam Justice Garson





Concurred in by:





The Honourable Mr. Justice Frankel

The Honourable Madam Justice Stromberg-Stein








Summary:

The
appellant Ferrari appeals from an order staying his civil claim for wrongful
dismissal against the University of British Columbia (UBC).  UBC applied to
the Supreme Court for an order staying the action on the basis that arbitration
was the only remedy available to Mr. Ferrari in the face of an arbitration
agreement between him represented by the Association of Administrative and
Professional Staff (AAPS or the Association) and the University.  The
Supreme Court judge stayed the action pursuant to s. 15(2) of the
Commercial Arbitration Act, R.S.B.C. 1996, c. 55, on the basis that the
Court lacked jurisdiction to hear the dispute because of the exclusive
arbitration clause in the employment agreements that govern the employment
relationship between Mr. Ferrari and UBC.  The judge found that the
agreement containing the arbitration clause was incorporated within the terms
of Mr. Ferraris employment.

On
appeal, Mr. Ferrari appeals on the basis that the order staying his civil
claim deprives him of any legal remedy to challenge his wrongful dismissal.

Held:
Appeal dismissed.

The
terms of his employment include, and he is bound by, the arbitration
agreement.  The fact that his representative association refused to carry
forward his grievance does not render the agreement to arbitrate null and void,
inoperative, or incapable of being performed within the meaning of s. 15(2)
of the Act.

Reasons
for Judgment of the Honourable Madam Justice Garson:

1.       Introduction

[1]

This is an appeal of an order staying Mr. Ferraris civil claim for
wrongful dismissal against the University of British Columbia (UBC).

[2]

UBC applied to the Supreme Court for an order staying the action.  UBC
argued that arbitration was the only remedy available to Mr. Ferrari in
the face of an arbitration agreement between the Association of Administrative
and Professional Staff (AAPS or the Association) and the University.  The
Supreme Court judge stayed the action pursuant to s. 15(2) of the
Commercial
Arbitration Act
, R.S.B.C. 1996, c. 55, on the basis that the Court
lacked jurisdiction to hear the dispute because of the exclusive arbitration
clause in the employment agreements that govern the employment relationship
between Mr. Ferrari and UBC.

[3]

Mr. Ferrari appeals the judges order on the grounds that it deprives
him of any legal remedy to challenge his wrongful dismissal.

[4]

For the reasons that follow, I would dismiss the appeal.

2.       Background Facts

[5]

In 1990, Mr. Ferrari began working at UBC as a labourer in the
Department of Plant Operations.  His employment was governed by a collective
agreement between the University and the trade union of which he was a member.

[6]

Effective November 1, 1999, Mr. Ferrari was permanently appointed
to the position of Asset & Material Management Supervisor, a non-union
position.

[7]

As a condition of his appointment, Mr. Ferrari was required to
become a member of AAPS, a non-union organization whose membership consists of
non-faculty management and professional employees of the University.  AAPS is
the recognized bargaining agent for its members, which includes being the
exclusive representative of its members in grievance proceedings against the
University.

[8]

By letter dated November 24, 1999, the University confirmed the terms of
Mr. Ferraris employment and asked him to sign two copies of the letter
indicating his acceptance of those terms.  Mr. Ferrari signed the letter,
which read in part:

Congratulations on your new appointment with the University
of British Columbia.  This letter will confirm our offer and your acceptance of
the position of Asset & Material Management Supervisor in the Department of
Plant Operations (Municipal & Business Services) effective 1999 November 01.



Please take time to familiarize yourself with the Agreement
for Management and Professional Staff, and the Framework Agreement between the
University and the Association of Administrative & Profession Staff (AAPS),
which include the terms of your employment with the University.

As a condition of employment you are required to become a
member of the Association of Administrative and Professional Staff (AAPS). 
This Association represents you in dealings with the University.  Please attend
the AAPS information session which occurs alternate Fridays (see attached
schedule) from 8:45 a.m. to 9:00 a.m. at Human Resources, Room 350 of the
General Services Administration Building.

There are two copies of this letter enclosed.  The first is
for your records, the second is to be signed by you to acknowledge your
acceptance of our offer of employment and to indicate your agreement with the
terms outlined in the letter.  Please return the signed copy to Financial
Services at your earliest convenience as it is required to initiate your new
paycheque.



[9]

In an affidavit filed on the application to stay his action, Mr. Ferrari
stated that he did not recall receiving copies of the agreements referred to in
the above letter.  At para. 20 of his reasons for judgment, the chambers
judge noted that there was no evidence that Mr. Ferrari requested copies
of the agreements if, in fact, they had not been provided to him with the
November 24 letter.  The chambers judge disregarded Mr. Ferraris claim
that he did not receive the agreements as a ground for denying their
applicability to him.  Mr. Ferrari has not appealed that finding and I
need say no more about it.

[10]

Below, I set out the pertinent sections of the Agreement on Conditions
and Terms of Employment (the ACTE) and the Framework Agreement (the FA) as
well as the bylaws that govern AAPS.  Of importance to this appeal are the
grievance and arbitration clauses applicable to the termination of an
employees employment.

[11]

The University terminated Mr. Ferraris employment on September 28,
2010, by letter of the same date.  That letter provides as follows:

This letter is further to our meetings with you of September
21 and 24, 2010 and its purpose is to inform you that your employment with the
University will be terminated for cause effective immediately. Our decision to
terminate your employment is based on the findings from the Universitys recent
investigation into your fraudulent use and sale of University vehicles.

You used the Universitys 2001 Cavalier & 2006 Toyota
Prius for personal use without authorization over several years beginning in
2003. Your actions are tantamount to theft considering the benefit you derived
by the University assuming the cost of the gas, towing charges, insurance, and
lease payments. Furthermore, you knowingly and repeatedly drove the vehicle
off-campus without the appropriate insurance coverage. In fact you continued
this practice despite the Universitys policy, which you helped develop, that
explicitly states University vehicles are not to be used for personal use.

When interviewed, your explanations were inconsistent and you
were dishonest and deceitful. Your actions amount to fraud and are completely
incompatible with maintaining your ongoing employment with the University. You
have fundamentally breached the trust required between the University and our
employees.

As a result of the investigation, it is evident you owe the
University for gas and other expenses. The total amount is still to be
determined. We will contact you by separate letter to advise you of this amount
and to provide you with instructions on repayment.

You will receive a lump sum
payment for any outstanding vacation you may have as of todays date.

[12]

After the termination of his employment, Mr. Ferrari contacted AAPS
to initiate a grievance.  In follow-up to a prior conversation, Mr. Ferrari
wrote to AAPS on November 11, 2010, and requested AAPS advise him as to whether
it would pursue a grievance on his behalf.  On November 15, 2010, AAPS responded
that it would not file a grievance nor arbitrate his termination.  The letter
notifying him of the Associations decision is partially reproduced below:

As outlined to you verbally by our Member Services Officer
Sharon Cory, AAPS will not be filing a grievance in this matter. In deciding
whether or not to file a grievance two overriding matters need to be discerned
[
sic
]; first, was the employee afforded due process in the investigation
process? Second, is the sanction reasonable in light of the offence? In both
cases we feel the University has met its burden. You were afforded
representation in the disciplinary meeting at which you were questioned about
excessive personal use

of a UBC vehicle. Having offered no credible
reason for having used the vehicle for substantial personal use we are of the
belief that the University was reasonable in concluding that the employment
relationship had been irrevocably severed. In discussions with Sharon about the
investigation meeting she reported that no credible explanation was ever offered
for the use of the vehicle. In considering whether or not to grieve a
termination AAPS must be convinced of the merits of the case and that there is
some reasonable prospect of prevailing at arbitration. Given the lack of explanation
about your use of the vehicle, neither condition is met here.



While I understand how difficult
this decision will be for you, please be assured that I have carefully
consulted with our legal counsel and the Chair of our advocacy committee in
coming to the decision not to grieve this termination.

[13]

Mr. Ferrari denies the truth of UBCs allegations against him.  He argues
that if he is unable to pursue his wrongful dismissal action in a court, he
will have no remedy at all for the wrongful termination of his employment.  Mr. Ferrari
filed a Notice of Civil Claim against the University on September 6, 2011.  In
response, on October 26, 2011, the University filed an application under
s. 15 of the
Commercial Arbitration Act
to stay the proceedings.  That
application was granted on August 3, 2012.

3.       Reasons for Judgment of the Chambers Judge: 2012 BCSC 1173

[14]

The chambers judge found that the terms and conditions of Mr. Ferraris
employment were set out in two agreements negotiated between the University and
AAPS: the ACTE and the FA.  He found that the ACTE and FA were incorporated by
reference into the terms of Mr. Ferraris employment contract and that Mr. Ferrari
was bound by the agreements.  The chambers judge further held that the legal
proceedings commenced by Mr. Ferrari were in respect of a matter that was
subject to arbitration pursuant to those agreements. The fact that the dispute
did not go to arbitration because AAPS declined to proceed did not negate the
fact that Mr. Ferrari was a party to the arbitration agreement as defined
by the
Commercial Arbitration Act
.

[15]

The chambers judge summarized the parties arguments at paras. 1416
of his reasons for judgment:

[14]      UBC submits that it has satisfied the prerequisites
for a stay of proceedings which have been stated by the Court of Appeal in
Prince
George (City) v. McElhanney Engineering Services Ltd.
(1995),  9 B.C.L.R.
(3d) 368 (B.C.C.A.), (leave to appeal to S.C.C. denied) at para. 22:

1)         a party to an arbitration
agreement has commenced legal proceedings against another party to the
agreement;

2)         the legal proceedings are in
respect of a matter agreed to be submitted to arbitration; and

3)         the application has been
brought in a timely manner, i.e. before the applicant has taken a step in the
proceedings.

[15]      Mr. Ferrari agrees that these tests are
applicable but says that he was not a party to an arbitration agreement and, in
any event, the agreement is void, inoperative or incapable of being performed
because AAPS refused to proceed to arbitration.

[16]      Mr. Ferrari also
says that employees should not be prevented from pursuing a claim regarding
dismissal from employment by reason of their membership in AAPS. If these
proceedings are stayed, he argues, he will be left without any recourse for his
wrongful dismissal.

[16]

The chambers judge concluded at para. 32 that the test in
McElhanney
had been satisfied.  He noted Mr. Ferraris argument that the
arbitration agreement was inoperative or incapable of being performed because
AAPS refused to advance his claim to arbitration.  The judge found that the
decision by AAPS not to advance a grievance was one that was open to it under
the provisions of the FA and did not render the arbitration agreement incapable
of being performed.

[17]

As to the question of whether Mr. Ferrari was left without a
remedy, the chambers judge held at para. 40:

[40]      Unlike
disputes which are governed by the
Labour Relations Code
, where an
employee may file a complaint under s. 12 of that
Code
if a union
decides not to advance a grievance to arbitration, Mr. Ferrari does not
have the right to complain to the Labour Relations Board about AAPS decision
not to advance his grievance to arbitration. However, I agree with UBC that Mr. Ferrari
is not left without a remedy. In my view it was, and may still be, open to him
to proceed against AAPS and allege that AAPS failed in its duty of representing
him as his agent, or for breach of its fiduciary duty, in deciding not to
advance his grievance.

[18]

In the result, the chambers judge stayed the action and awarded costs to
the University.

4.       Grounds of Appeal

[19]

Mr. Ferrari argues that the chambers judge erred by:

1.         Determining
that the Appellant was a party to an arbitration agreement because he was bound
by the ACTE and FA and despite having no control over the arbitration process
or the ability to compel the Respondent to arbitrate his dismissal;

2.         Determining
that the arbitration agreement was not void, inoperative or incapable of being
performed, despite AAPSs refusal to proceed to arbitration in respect of the
Appellants wrongful dismissal; and

3.         Determining
that it is in the interests of justice to deny the Appellant a remedy against
the Respondent for his wrongful dismissal.

[20]

UBC states the issues on appeal somewhat differently:

1.         The
Respondent submits that the Chambers Judge did not err by determining that the
Appellant was a party to the arbitration agreement or by determining that the
arbitration agreement was not void, inoperative, or incapable of being
performed.

2.         Contrary to paragraph 13(c) of
the Appellants Factum, the Chambers Judge did not make any determination about
the interests of justice, nor was he required to do so.  Rather, in
supporting his decision to grant the stay, the Chambers Judge noted that the
dispute resolution procedure in the FA and the ACTE has similarities to a
collective agreement, applies to some 3,000 AAPS members, and allows for
disputes to be resolved efficiently and economically.  He concluded that
allowing the Appellant to proceed with his civil action against the Respondent
would circumvent and defeat the objectives of this dispute resolution procedure
and undermine the purpose of section 15 of the [
Commercial Arbitration Act
]
and of this dispute resolution procedure.  The Respondent submits that the
Judge did not err in so concluding.

[21]

The intervenor, AAPS, supports the position taken by UBC.

5.       Application of the Intervenor AAPS

[22]

AAPS was not a party to the proceedings below.  This Court granted AAPS
intervenor status.

[23]

First, AAPS asserts that the chambers judge appears to have decided that
an action against AAPS for failure to represent Mr. Ferrari, or for breach
of fiduciary duty, is open to the plaintiff despite the fact that AAPS was not
a party to the action and had no opportunity to argue against the availability
of those remedies.  Second, AAPS wishes to explain to this Court its
perspective on Mr. Ferraris argument that he is entitled to a common law remedy
for wrongful dismissal, notwithstanding that his employment agreement appoints
AAPS  his exclusive representative to pursue, or not, a grievance.

[24]

Finally, AAPS submits that there are internal remedies available to Mr. Ferrari
to dispute its decision not to grieve on his behalf and that he failed to
exhaust those remedies before commencing his civil action.  That argument was
not made before the chambers judge below.  Given that it was not heard by the
court below and since AAPS is an intervenor before this Court, not a party to
the dispute, it is my view that this Court ought not entertain its internal
remedies argument:
Faculty Association of the University of British Columbia
v. University of British Columbia
, 2008 BCCA 376 at para. 15.

6.       The Agreements, Bylaws and Constitution of AAPS

a.       Bylaws

[25]

As noted by the chambers judge, there are two agreements that govern the
terms of employment between Mr. Ferrari, the University and AAPS.  I would
add that the Associations constitution and bylaws are also relevant.  To begin
I will review those bylaws important to this case.

[26]

Article, XIII is the provision of the bylaws that sets up the AAPS Advocacy
Committee.  The Advocacy Committee is responsible for representation of its
members in employment disputes.  The provision reads in pertinent part:

4.         The Advocacy Committee shall:

a.         assist and advise management
and professional staff on their rights regarding terms and conditions of
employment;

b.         provide Association
representation regarding employment disputes and grievances.



8.         Subject to the Constitution and
By-Laws, the Executive Board may direct the exercise and performance of all
powers and duties specified in articles XII to XIII-5 inclusive.

[27]

Neither the bylaws nor the constitution contain an explicit provision
permitting the appeal or review of decisions made by the Advocacy Committee.

b.       Agreement on Conditions and Terms of Employment (ACTE)

[28]

The first of the two agreements negotiated between the University and
AAPS was the ACTE.  The relevant portions of that agreement are set out in the
following paragraphs.

[29]

The parties to the ACTE are defined as AAPS and UBC.  One of the grounds
upon which Mr. Ferrari appeals, is that he is not defined as a party to
the agreement and cannot therefore be bound by it.  I will discuss this
argument further below.

[30]

Article 2 includes the following provision respecting the applicability of
common law employment principles:

Common law employment principles
apply to the employment relationship between the University and employees
unless specifically modified by this Agreement.

[31]

Article 4, Grievance and Arbitration Procedures provides as follows:

The parties
shall
resolve grievances in accordance
with the negotiated procedures in Section 7.7 of the Framework Agreement.

[Emphasis added.]

[32]

Article 8, Discipline and Termination includes the following
provisions:

8.1       Progressive
Discipline

The University and AAPS subscribe to the principles of
progressive discipline in cases of culpable behaviour, conduct or performance
including, without limiting the generality of the foregoing:



Discipline is intended to be corrective in nature, not punitive;



Discipline is applied with consideration given to the circumstances
of a situation including, without limiting the generality of the foregoing, the
nature and severity of the misconduct, the position and level of responsibility
of the employee, the employees work history and any mitigating circumstances;



Discipline is applied in an escalating manner, appropriate to the
nature and severity of the misconduct; and



Discipline is not progressive in the event of severe misconduct
warranting termination for cause.

8.2       Proof of Just Cause

Disciplinary action will be taken only where just cause
exists. The burden of proof of just cause rests with the University.

8.3       Right to Representation

An employee shall have the right to have a representative
from AAPS present at any disciplinary meetings.



8.6       Termination of Employment for Just Cause

The University may terminate the
employment of any employee without notice for just cause.

8.7       Grievances



Grievances arising from the
suspension or termination of an employee shall commence at Step 2 (Formal
Complaint to a Vice President/Dean) of the grievance procedure (refer to
Section 7.7.5 of the Framework Agreement).

c.       The Framework Agreement (FA)

[33]

The Framework Agreement (FA) is also an agreement between AAPS and UBC. 
It too defines parties as meaning UBC and AAPS.  The purpose of the agreement is
stated in s. 3.1:

The purpose of this Agreement is
to establish a framework for discussing and formally negotiating the terms and
conditions of employment of management and professional staff in a manner which
exemplifies the vision shared by the University and AAPS.

[34]

Section 3.3 provides for the recognition of AAPS as a bargaining agent:

The University recognizes AAPS as
the exclusive representative for all members as defined in Section 4.

[35]

Section 4.0, Scope of Bargaining Unit and Exclusions, states in part:

AAPS represents all management
and professional employees, except for the following excluded positions

[36]

With respect to grievances and settlement of disputes, s. 7.7
provides:

7.7.1    Interests of Parties

The parties have a clear and direct interest in a procedure
that provides for timely resolution in the event that their agreement is
violated.

An effective procedure must emphasize:

·

a problem solving approach,

·

a means for interest reconciliation as close as possible to the
point of original,

·

a mechanism for finality.

While individuals may initiate grievances,
AAPS will
decide whether to advance, settle or arbitrate them
.

Time limits and other requirements for the performance of
this grievance procedure may be extended/amended by mutual consent of the
parties.



7.7.7    Step 3  Arbitration

An arbitrator will be selected by mutual agreement of the
parties.  If the parties fail to agree on an arbitrator within fourteen days,
the Chief Justice of the Supreme Court of British Columbia will be requested to
make the selection.

The provisions of the
Commercial Arbitration Act
apply
to an arbitration, with the exception of the provisions in the Act relating to
costs.

Each party to the arbitration will be responsible for its own
costs and will pay one half of the costs of the arbitrator and any shared
arbitration expenses.

[Emphasis added to clause 7.7.1]

7.       Analysis

[37]

The overarching issue in this case is whether, as a consequence of the
operation of the agreements which govern his employment relationship, Mr. Ferrari
is left without a remedy for what he asserts is a wrongful dismissal and, if
so, is he entitled to maintain his action for wrongful dismissal against his
former employer.

[38]

Section 15 (1)−(2) of the
Commercial

Arbitration Act
,
governs this appeal.  Those provisions provide:

15 (1) If a party to an arbitration agreement commences legal
proceedings in a court against another party to the agreement in respect of a
matter agreed to be submitted to arbitration, a party to the legal proceedings
may apply, before filing a response to civil claim or a response to family
claim or taking any other step in the proceedings, to that court to stay the
legal proceedings.

(2) In an application under subsection (1),
the court must
make an order staying the legal proceedings unless it determines that the
arbitration agreement is void, inoperative or incapable of being performed.

[Emphasis added.]

[39]

In
McElhanney
, Cumming J.A., speaking for this Court, set out the
requirements for granting a stay of proceedings under s. 15.  This passage
from
McElhanney
is set out above, in my summary of the chambers judges
reasons, but for convenience I repeat it here:

[22]      There are three prerequisites to the application of
s. 15. They are:

(a)   the
applicant must show that a party to an arbitration agreement has commenced
legal proceedings against another party to the agreement;

(b)   the
legal proceedings must be in respect of a matter agreed to be submitted to
arbitration; and

(c)   the application must be brought
timely, i.e. before the applicant takes a step in the proceeding. (
Gulf
Canada Resources Ltd. v. Arochem International Ltd
.,
supra
, at
119-120).

[40]

Only the first of these three prerequisites is at issue in this appeal.

a.       Is Mr. Ferrari a party to the arbitration agreement?

[41]

I turn to Mr. Ferraris first ground of appeal: did the chambers
judge err in finding him to be a party to an arbitration agreement with UBC, a
prerequisite to the application of s.15 of the
Act
.  If he is not, UBC
cannot rely on s. 15 to stay Mr. Ferraris claim.  In my opinion, the
chambers judge did not err; Mr. Ferrari is a party to the arbitration
agreement.

[42]

Mr. Ferrari questions how he can be said to be a party to an
arbitration agreement if he has no means to commence a grievance and
arbitration.

[43]

In response, UBC says that Mr. Ferrari became a party to the
arbitration agreement by agreeing that the FA and ACTE were incorporated into
his terms of employment.  Having been incorporated by reference into the terms
of his employment agreement, he must logically be a party to the arbitration
agreement.

[44]

The chambers judge concluded that because the FA and the ACTE contain an
arbitration agreement, and because that arbitration agreement was incorporated
by reference into Mr. Ferraris terms of employment with UBC, Mr. Ferrari
was bound by the arbitration agreement as a term of his employment with UBC: See
University of British Columbia v. Wong
, 2006 BCCA 491 at paras. 30−31.

[45]

In other words, similar to collective agreements in a union context, Mr. Ferrari
granted AAPS exclusive representation rights as part of the consideration of
his membership in that organization.  I am in full agreement with UBC on this
point.  I do not see that much more can be said on this question.  I would not
accede to this ground of appeal.  Mr. Ferrari was bound by, and is a party
to, the arbitration agreement; thus, the first prerequisite of s. 15 is
met.

b.       Is
the arbitration agreement void or inoperative pursuant to s. 15?

[46]

Now, I turn to the second ground of appeal; whether the arbitration
agreement is void or inoperative in circumstances where, as Mr. Ferrari
argues, the enforcement of the arbitration clause leaves him without legal
redress for his alleged wrongful termination.  He says that in such
circumstances there must be a residual discretion for the court to refuse to
enforce that agreement.  Or, he argues, in a slightly different way, that it
cannot be said the requirements of s. 15 are met if the arbitration
agreement fails to provide any legal redress.  As I discuss below, in my view
this arbitration agreement does provide adequate redress: the deficiency, if
any, is in the Associations own bylaws.  However, those bylaws are not a
matter involving UBC. In my view,
McElhanney
clearly establishes that there
is no residual discretion for the court to refuse to stay an action if the
conditions of s. 15 are met.  I can find no authority to the contrary and
to hold otherwise would seem inconsistent with the whole statutory scheme of
respect for the arbitral process.

[47]

Although s. 15 provides a statutory bar to court proceedings that
is applicable to this case, it is helpful in my view to examine some of the
historical labour relations jurisprudence that trace the courts deference to
the exclusivity of the arbitration process.

[48]

To begin, there is a well-recognized line of authority, beginning with
Webber
v. Ontario Hydro
, [1995] 2 S.C.R, 929 which holds that Disputes arising
under collective bargaining agreements must be resolved through the grievance
and arbitration process established under the agreements, not by lawsuits in
the courts:
Pleau Litigation Guardian v. Canada (Attorney General)
,
1999 NSCA 159 at para. 1.

[49]

Importantly,
Pleau
also held that the dispute resolution process
must provide effective redress if the jurisdiction of the court is to be excluded:
at para. 21.  It is important to consider the facts of that case in order
to understand why it is inapplicable to Mr. Ferraris situation.

[50]

Pleau
queried the true nature of the dispute between the parties;
specifically, whether the dispute fell within the employment relationship and
thus the exclusive arbitration provision of the collective agreement.  Mr. Pleau
had reported what he considered to be evidence of misconduct in the operation
of a government facility.  He was dismissed from his employment.  He grieved
his dismissal successfully but then commenced an action claiming, among other things,
conspiracy to cause him damage.  The defendants conceded that the claims could
not be referred to an adjudicator as they were outside the subject matter of
disputes covered by the agreement to arbitrate.  Mr. Pleau argued that the
claim was actionable by him.  It was in this context that Cromwell J.A., as he
then was, described three interrelated considerations that underpin the
Weber
line of authority concerning the exclusiveness of the arbitration process.  At paras. 19−21
he held:

[19]      The first consideration relates to the process for resolution
of disputes.  Where the legislation and the contract show a strong preference
for a particular dispute resolution process, that preference should, generally,
be respected by the courts.  While it takes very clear language to oust the
jurisdiction of the superior courts as a matter of law, courts properly decline
to exercise their inherent jurisdiction where there are strong policy reasons
for doing so.

[20]      If the legislature and the parties have shown a
strong preference for a dispute resolution process other than the court
process, the second consideration must be addressed.  It concerns the sorts of
disputes falling within that process.  This was an important question in the
Weber decision.  The answer given by Weber is that one must determine whether
the substance or, as the Court referred to it, the essential character, of
the dispute is governed, expressly or by implication, by the scheme of the
legislation and the collective agreement between the parties.  Unlike the first
consideration which focuses on the process for resolution of disputes, the
second consideration focuses on the substance of the dispute.  Of course, the
two are inter-related.  The ambit of the process does not exist in the
abstract, but is defined by the nature of the disputes to be submitted to it.

[21]      The third consideration
relates to the practical question of whether the process favoured by the
parties and the legislature provides effective redress for the alleged breach
of duty.  Generally, if there is a right, there should also be an effective
remedy.

[51]

In the case at bar, there is no question that the nature of the dispute
falls squarely within the terms of Mr. Ferraris employment agreement,
thus the decision in
Pleau
is clearly distinct in that respect.  However,
Mr. Ferrari relies on
Pleau
to argue that he has
no effective
remedy
, and therefore the requirements of s. 15(2) of the
Act
are not met.  He says that if the chambers judge is correct, the result is that
neither an arbitrator nor the courts would have jurisdiction to determine the
rights of the parties:
Pleau
at para. 91 citing
Nova Scotia
Union of Public Employees v. Halifax Regional School Board
(1999), 171
N.S.R. (2d) 373 at 379−80 (C.A.).

[52]

The distinction between this case and
Pleau
is that this dispute
is
arbitrable.  It falls squarely within the subject matter of the
grievance/arbitration process.  It is the result of that process to which Mr. Ferrari
objects.  Mr. Ferrari is in no different position than an employee who is dissatisfied
with the terms of settlement of a grievance made by his representative
association.  In both cases the grievance procedure has been applied, but it is
the result to which the employee objects.

[53]

In
Pleau
, at para. 91, Justice Cromwell quotes from his
earlier judgment in
Nova Scotia Union of Public Employees, Local 2 v.
Halifax Regional School Board
, in which he in turn cites
Weber,
for
the proposition that arbitral and court jurisdiction are not always the mirror
image of each other; the correlation is not exact.  In some cases, court action
may be barred even though there is no remedy available through the arbitration
process.  In the result, Cromwell J.A. held in
Pleau
that because an
employee had the right to grieve but no access to test the outcome by
adjudication under the provisions peculiar to that scheme there was no
effective redress.

[54]

Here, Mr. Ferrari objects to the fact that his representative
declined to proceed with a grievance and on to arbitration if necessary, not
that he had no access to arbitration under the agreements to which he was bound.

[55]

In
General Motors v. Brunet
, [1977] 2 S.C.R. 537 at 548
,
the
Supreme Court of Canada held that, where a collective agreement provides the
union with the sole responsibility for deciding whether it will pursue a
grievance to arbitration, there is no jurisdiction for a court to hear an
employees claim simply because the union fails to carry the grievance to
arbitration.  The Court conceded that the situation might be different if the
union acted in bad faith but noted that good faith is to be presumed.  In
General
Motors
there was no allegation of bad faith.

[56]

Weber
,
Pleau
and
General Motors
are all cases
involving unions and collective agreements but, in my view, the principles I
have drawn from these cases are applicable to this case insofar as they outline
the limited jurisdiction of the courts to decide disputes that, either by
legislation or agreement, are to be resolved by arbitration.

[57]

Mr. Ferrari also argues that there is another basis to find that
this arbitration agreement, at least as it pertains to him, is not one to which
s. 15 of the
Act
applies.  He says that AAPS, unlike a union, is
not independent of the employer.  He argues that his position cannot be likened
to a union member who has the benefit of a remedy under s. 12 of the
Labour
Relations Code
, R.S.B.C. 1996, c. 244.  Mr. Ferrari says that in
the unionized context, for those disputes that fall within its ambit, s. 12
is an effective means by which an employee can apply to have the unions duty
of fair representation scrutinized by a tribunal.

[58]

This argument can be resolved by resort to consideration of the duty of
fair representation.  The corollary of the exclusive authority to arbitrate, or
not arbitrate, is the representatives duty of fair representation.  A
representative must exercise its authority with care, skill and diligence.  It
is impermissible for an exclusive bargaining agent to act in a manner that is
arbitrary, discriminatory or in bad faith when representing employees:
Canadian
Merchant Service Guild v. Gagnon et al
., [1984] 1 S.C.R. 509;
Gendron v.
Supply & Services Union of the Public Service Alliance of Canada, Local
50057
, [1990] 1 S.C.R. 1298;
Judd (Re)
, [2003] B.C.L.R.B.D. No. 63.

[59]

In
Gendron
, LHeureux Dubé J. cited with approval the description
in
Gagnon
of the principles that underpin the duty of fair
representation.  After noting that the principles were drawn from statutory
formulations and the common law, she quotes from
Gagnon
at 1327−1328:

The following principles, concerning a unions duty of representation
in respect of a grievance, emerge from the case law and academic opinion
consulted.

1.         The exclusive power conferred on a union to act as
spokesman for the employees in a bargaining unit entails a corresponding
obligation on the union to fairly represent all employees comprised in the
unit.

2.
When, as is true here and is generally the
case, the right to take a grievance to arbitration is reserved to the union,
the employee does not have an absolute right to arbitration and the union
enjoys considerable discretion.

3.         This discretion must be exercised in good faith,
objectively and honestly, after a thorough study of the grievance and the case,
taking into account the significance of the grievance and of its consequences
for the employee on the one hand and the legitimate interests of the union on
the other.

4.         The unions decision must not be arbitrary,
capricious, discriminatory or wrongful.

5.         The representation by the union must be fair,
genuine and not merely apparent, undertaken with integrity and competence,
without serious or major negligence, and without hostility towards the
employee.

[Emphasis added.]

[60]

In my view, these principles apply in a general way to a non-union
employee association such as AAPS, just as they do a certified trade union:
Radhakrishnan
v. University of Calgary Faculty Assn. (c.o.b. TUCFA)
, 1999 ABQB 713 at paras. 98−102,
affd 2002 ABCA 182;
Angus (Re)
, [1989] B.C.L.R.D. No. 200.  Indeed,
AAPS acknowledges that it owes a duty of fair representation to Mr. Ferrari.
 The question that remains is whether that duty of fair representation
constitutes sufficient legal redress for a breach of an employment agreement.

[61]

By accepting employment in an AAPS position, Mr. Ferrari agreed to appoint
AAPS his exclusive bargaining agent with the power to decide whether to
advance, settle, or arbitrate grievances.  This does not mean that he is not a
party to the arbitration agreement; rather, this means that he is a party to
the arbitration agreement in which the power to decide whether to advance,
settle, or arbitrate grievances is given to his exclusive bargaining agent,
just as he gave the power to his exclusive bargaining agent to negotiate the
terms and conditions of his employment that he enjoyed for 13 years prior to
his termination.  The fact that AAPS, and not Mr. Ferrari, had the
authority to determine whether to advance a grievance or not, is entirely
consistent with the nature of the relationship between them  i.e., the
relationship of members of a labour organization and the exclusive bargaining
agent that represents those members.

[62]

As argued by UBC and APPS, there is a trade-off in union and employee association
collective agreements.  In consideration for granting control over the grievance
and arbitration process, the employee receives the negotiated benefits of being
a member of such an association.

[63]

As between the University and Mr. Ferrari, the terms of his
employment are covered by the ACTE and the FA.  The Framework Agreement sets
out an acceptable stepped process to deal with complaints through the grievance
procedure, up to and including arbitration.  The fact that AAPS refused to
carry forward a grievance does not, on the face of it, render the agreement to
arbitrate null and void, inoperative, or incapable of being performed within
the meaning of s. 15.

[64]

As between Mr. Ferrari and AAPS, it may well be that the
Associations bylaws are inadequate to ensure the necessary scrutiny of its decision
not to proceed with his grievance.  However, that is not an issue that arises
between Mr. Ferrari and UBC such that Mr. Ferrari should cease to be
bound by the arbitration clause.

[65]

Mr. Ferrari says that if the above is true his only remedy lies in
a possible common law claim against AAPS for its failure to properly represent
him fairly.  Mr. Ferrari notes that in an action against AAPS he would
carry the burden of proof whereas in a wrongful dismissal action where
termination for cause is alleged the burden of proof is on the employer.  Mr. Ferrari
asserts that leaving him at the mercy of a management-dominated association is
not an adequate replacement for access to the courts.  Nevertheless, he is not
without a remedy and there is no reason to think that it is an inadequate one,
if he chooses to pursue it.

[66]

As the chambers judge noted, Mr. Ferrari may well have a claim
against AAPS based in the duty of fair representation.  Such a claim might
embrace the alleged inadequacies of the bylaws under which AAPS considered his
grievance.  The absence of any stepped internal review or appeal process might well
factor into such an analysis.

[67]

In summary, it is well recognized in the history of labour relations
that the model of exclusive representation of employees by their association or
union carries with it a correlative transfer of authority over the grievance
process subject only to the associations duty of fair representation:
Vaca
v. Sipes
(1967), 55 L.C. 11;
Fisher v. Pemberton et al
. (1969), 8
D.L.R. (3d) 521 (B.C.S.C.);
Rayonier Canada (B.C.) Ltd. v. International
Woodworkers of America
, Local 1-217, [1975] B.C.L.R.B. No.42;
Gagnon
.
 In my view, to accede to Mr. Ferraris argument would be inconsistent
with this long accepted trade-off.  In the circumstances of his case, Mr. Ferraris
remedy lies in a claim against his association.  As to the merits of such a
claim, I, of course, express no view, nor do I express a view as to whether
there is a fiduciary relationship between Mr. Ferrari and AAPS.  These
issues would be for a court hearing such an action.  Mr. Ferraris complaint
about the inadequacies of the AAPS bylaws cannot be foisted on the University
of British Columbia such that the agreed to arbitration provision is not
binding on Mr. Ferrari and UBC.

[68]

I conclude that the arbitration agreement is not void or inoperative
pursuant to s. 15 of the
Act.

8.       Disposition

[69]

I would dismiss the appeal with costs to UBC.

[70]

The intervenor, AAPS, is not entitled to costs.

The Honourable Madam Justice Garson

I agree:

The
Honourable Mr. Justice Frankel

I agree:

The Honourable Madam Justice
Stromberg-Stein


