The decision in Canadian Airport Workers Union (CAWU) v GardaWorld Security Screening Inc., 2024 CanLII 92092 (CA LA) confirmed that absent compelling and extraordinary circumstances, an interest arbitrator will consider the terms of a failed tentative agreement to represent the best objective evidence of a freely bargained outcome.
Bargaining History
The Union represents all employees of GardaWorld Security who provide pre-board security screening services under GardaWorld’s contract with the Canadian Air Transport Security Authority at Toronto Pearson International Airport and Billy Bishop Toronto City Centre Airport.
In advance of collective bargaining, the Union conducted a strike vote to assess the bargaining unit’s willingness to strike if necessary and found that 99.1% of voters favored engaging in strike action.
The parties thereafter engaged in the normal course of collective bargaining. They reached a tentative agreement on June 21, 2024 for the terms of their renewal collective agreement, subject to ratification by members of the bargaining unit and the Employer (the “First TA”). However, when members of the bargaining unit were presented with the agreement for ratification, 95% of the votes cast were against the First TA.
Following the rejection of the First TA, the parties met to resume collective bargaining. Shortly thereafter, on July 7, 2024, the parties entered into a revised tentative agreement, subject again to ratification by members of the bargaining unit and the Employer (the “Second TA”). However, the Union’s members once again voted against ratification, with approximately 65% of eligible voters casting a ballot against the Second TA.
Following the rejection of the Second TA, the parties were at an impasse and the dispute was referred to interest arbitration pursuant to section 79(1) of the Canada Labour Code.
Decision
As is standard practice, Arbitrator Kugler explained that an interest arbitrator’s task is to replicate the outcome the parties would likely have achieved in free collective bargaining. Generally, arbitrators would examine a variety of factors to apply the replication principle, including comparable negotiated or arbitrated outcomes, the general economic circumstances, recruitment and retention, and demonstrated need, amongst others. In addition, considerations of total compensation and gradualism help frame an outcome that reflects free collective bargaining.
However, the Arbitrator explained where parties have reached a tentative agreement that has failed upon ratification, there is broad consensus that absent extraordinary and compelling circumstances, the terms of a failed tentative agreement represent the best objective evidence of a freely bargained outcome. The Arbitrator emphasized why this principle makes good labour relations sense:
The negotiation committees represent the interests of the Employer and the Union. They are intimately familiar with the workplace circumstances, context, and the trade-offs that reflect the priorities of the parties. There can be no better measure of a freely bargained outcome than an agreement reached by the designated representatives of the parties.
The Arbitrator emphasizes that this principle has been expressed repeatedly in the jurisprudence.
As a result, the Arbitrator found that absent compelling and extraordinary circumstances, the Second TA can and should be relied upon as evidence of what the parties would have agreed to in free collective bargaining.
In examining whether there were any extraordinary and compelling circumstances in this case to justify a different result, the Arbitrator addressed the Union’s heavy reliance on the decision in Southbrook, Retirement Residence v SEIU, Local 1. In that case, Arbitrator Albertyn refused to strictly follow the terms of an unratified tentative agreement and, instead, awarded certain improvements to its terms. Arbitrator Albertyn emphasized that between the date of the failed tentative agreement and the interest arbitration, inflation had taken hold and interest arbitration awards and negotiated outcomes began to consistently reflect that reality through increased wage adjustments. That, coupled with express language in the failed tentative agreement providing that its terms were without prejudice and were to be withdrawn upon rejection, led Arbitrator Albertyn to conclude that strict adherence to the failed tentative agreement would not replicate a freely bargained outcome.
However, Arbitrator Kugler distinguished these facts from the present matter as there was no language in the Second TA that provided for the withdrawal of its terms upon rejection. Moreover, there was no change in circumstances that would justify departing from the strict terms of the Second TA. Of note, the impact of inflation was in full effect when the Second TA was reached, and there was no suggestion that any new bargaining patterns had emerged in the sector that ought to result in a deviation from the terms of the Second TA. The Arbitrator ordered the parties to enter into a renewal collective agreement in accordance with the terms of the Second TA.
In our View
This decision provides a helpful reminder that an interest arbitrator will attempt to replicate the outcome the parties would likely have achieved in free collective bargaining. In situations where a tentative agreement is in place, absent compelling and extraordinary circumstances, an arbitrator will impose the terms of the tentative agreement.
For more information, please contact Steven Williams at 613-697-6869, Lauren Jamieson at 613-404-5058 or Jordon White at 613-513-4238.
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