Dandy Dan’s Fish Market Limited v. Fish, Food and Allied Workers-Unifor, 2019 NLSC 140

IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR

GENERAL DIVISION

Citation: Dandy Dan’s Fish Market Limited v. Fish, Food and Allied Workers-Unifor, 2019 NLSC 140

  Date: July 18, 2019

Docket: 201801G2759

BETWEEN:

DANDY DAN’S FISH MARKET LIMITED

APPLICANT

AND:

FISH, FOOD AND ALLIED WORKERS – UNIFOR

FIRST RESPONDENT

AND:

ASSOCIATION OF SEAFOOD PRODUCERS

SECOND RESPONDENT

 

Before:  Justice Alphonsus E. Faour

 

Place of Hearing:                             St. John’s, Newfoundland and Labrador

Date(s) of Hearing:                          February 8, 2019

Summary:

 

The Applicant/Processor sought judicial review of the decision of an Arbitrator.  The arbitration arose from a grievance by the Respondent/Union that the Applicant/Processor had breached a term of a collective agreement covering the conditions attached to a price-setting mechanism for payment to its fish harvester members.  The Applicant/Processor submitted that the Arbitrator’s decision was unreasonable when he upheld the validity of the terms of the collective agreement and related documents.

The decision of the Arbitrator was upheld.  There was authority to impose a condition imposing levy to ensure there was adherence to grading protocols.  The application for judicial review was dismissed, with costs to the Respondent.

 

REASONS FOR JUDGMENT

 

FAOUR, J.:

INTRODUCTION

[1]            This is an application for judicial review of a decision of an arbitrator.

[2]            The Applicant, Dandy Dan’s Fish Market Limited (the “Applicant/ Processor”) is a fish processor, and was subject to an Agreement between the Respondent Union and the Respondent Association respecting the setting of prices to be paid by processors for fish in the Province.  The Applicant/Processor takes issue with the findings of an Arbitrator who found that it was liable to pay certain amounts to the Union in pursuance of the Union’s role in the grading of fish.  The decision of the Arbitrator was issued to the parties on February 26, 2018.  This application was filed April 20, 2018 and was heard on February 8, 2019.  The Association did not play a role in these proceedings.

[3]            There is no disagreement as to the facts.  The parties agree that the legislative regime required submission of a payment by the Applicant/Processor for a specific purpose.  They also agree that the Applicant/Processor did not submit the payments as required.  They disagree on the interpretation of the legislation, the Agreement and the Schedule as it applies to the requirement that the Applicant/Processor make payments to the Union.

[4]            The matter was submitted to an Arbitrator.  Both parties agreed that the arbitration was properly constituted, and neither had any objections to the process during the hearing before the Arbitrator.  The Arbitrator resolved the issue in favour of the Union, and ordered payment of the fees in accordance with the agreement.  The Applicant/Processor seeks judicial review from this court.

[5]            The issues raised in this proceeding focused on the interpretation of the legislation and Agreement as it related to the imposition of a levy in favour of the Union to provide for a verification process.  Both counsel have raised several issues.  The first, arising in any case involving judicial review of the decision of an administrative tribunal, is the appropriate standard of review.  In addition, the Applicant/Processor has raised several points where it is argued the Arbitrator committed errors giving rise to either reversal, or remittance for further consideration.  Before addressing the issues, I will review the background to this matter.

THE LEGAL FRAMEWORK

[6]            The Agreement between the parties is made under the authority of the Fishing Industry Collective Bargaining Act, R.S.N.L. 1990, c. F-18(FICBA).  The Agreement was set, following submissions, by the Standing Fish Price-Setting Panel (the “Panel”), which is established under the authority of section 19.1 of the FICBA.  Its authority arises from section 19.2, which states, in part:

             19.2     The duties of the panel are

            . . .

             (d)      to set prices and conditions of sale for a fish species where parties have engaged in collective bargaining and have been unable to agree or where parties have refused to engage in collective bargaining;

[7]            Prices have been set by virtue of a Master Collective Agreement (MCA) issued by the Panel on January 30, 2015, to have effect during 2015, and thereafter from year to year unless notice to terminate is provided by either party.

[8]            The MCA has a series of Schedules attached, dealing with the details associated with different species of fish.  The Atlantic Cod Schedule (the “Schedule”) was accepted by the Panel on May 20, 2016, and applies to purchases of cod during the period relevant to these proceedings.

[9]            The provision of the Schedule at issue is section 27.  It reads:

  1.    Each processer will pay $0.01 per pound of fish purchased, either directly or through sub-agents, to pay for union graders to independently check the sampling and grading process to ensure that the protocols set forth, attached to this schedule, are being adhered.  This payment will be forwarded to the FFAW|Unifor on a weekly basis.

[10]        The Applicant/Processor did not remit funds in compliance with section 27 during the relevant period.  The Union filed a grievance alleging breach of the Agreement, seeking payment.  The issue raised by the Applicant/Processer is whether it is obligated to remit these payments to the Union.  Arbitrator Ronald W. McCabe was appointed to hear the grievance, and issued his decision on February 20, 2018.  He allowed the grievance, and found that the Applicant/Processor had violated the MCA by its failure to make payments pursuant to section 27.

[11]        At paragraph 34 of his decision, the Arbitrator defined two broad issues succinctly:

[34]  The parties admit that a Collective Agreement, comprised of the Master Collective Agreement and the Schedule is binding, but diverge over the validity and interpretation of section 27 of the Schedule.  The Processor questions the jurisdiction of the Panel to make section 27 because it suggests the jurisdiction is limited to price setting.  The Union responds that any challenge to jurisdiction of the Panel is a matter for judicial review rather than arbitration.

[12]        I will address the jurisdictional issue, and then deal with the Applicant/Processor’s submissions on the Arbitrator’s interpretation of section 27 of the Schedule.  The Standard of Review is the first issue which must be addressed.

The Standard of Review

[13]        As for the current state of the law, the Applicant/Processor argues that for most of the questions arising from this matter, the standard of reasonableness applies.  The Union does not take issue with this characterization.  However, in one respect, the Applicant/Processor argues that the higher standard of correctness applies.  It says that on one issue, the Arbitrator actually amended the Collective Agreement, and that one decision ought to attract the more rigid standard of correctness.

[14]        The MCA governs the authority of the Arbitrator.  Article 11.07 sets out the scope of review when a matter proceeds to arbitration.  It reads as follows:

The decision of the arbitrator on the matter at issue shall be final and binding on the parties involved in the dispute, but in no event shall the arbitrator have the power to add to, subtract from, alter or amend this Agreement in any respect.

[15]        The Applicant took the view that the Arbitrator, in reaching his decision, went beyond the terms of the Agreement, and effectively amended the terms of the Agreement.  Counsel also argued that the validity of section 27 was in doubt thereby bringing into question the entire scheme outlined in the agreement.

[16]        Counsel cited N.A.P.E. v. Newfoundland (Treasury Board), 2011 NLTD(G) 82, where Justice Dunn held that if the court finds the agreement was amended, then correctness applies, at paragraph 27:

  1.    The foremost question to be answered is whether or notArbitrator Scott exceeded his jurisdiction by amending or changing previous awards as submitted by the applicant/Union. As set out in Section 40(4) it is correct to say an arbitration board shall not make an award which would amend or change a collective agreement, a judgment or an earlier award. On this argument an award which amends an earlier award is an excess of jurisdiction.

[17]        The Applicant/Processor correctly states the law.  A question of jurisdiction does attract the higher standard of correctness.  However, as I will elaborate below, I am not convinced that this situation can be characterized as amendment.  The Arbitrator did not add the levy to the agreement.  He provided an interpretation that it applied to the Applicant/Processor.  Accordingly, I find that the lower, reasonableness standard applies to his decision.  The issue in this matter will relate to the reasonableness of his interpretation.  The approach to be taken is guided by the statement of the Court of Appeal in Layman v. Layman Estate, 2016 NLCA 13 (CanLII), where the interpretation placed on a private agreement by an arbitrator was in issue.  The court noted, at paragraph 23:

  1.    The applications judge failed to undertake the analysis of the decision required by Nurses’ Union. . . . The applications judge found that the arbitrator did not explain why he concluded that the Contract was not ambiguous, or why no interpretation of the Contract could permit the estate of Patrick Layman to recall the Large License or confer any rights upon the estate. However, those were not the relevant questions that a judge must ask when applying a reasonableness standard on judicial review either of an administrative tribunal or of a commercial arbitrator, particularly in light of Sattva Capital Corp.The real questions the applications judge had to ask herself were:

  1.   Whether in light of the record before him, the reasons reveal that the arbitrator chose an interpretation of the Contract that its words could bear.

  1.  Whether the interpretation chosen by the arbitrator was justifiable in light of the facts and the law, even if there were competing interpretations.

[18]        This is the approach that I am bound to take in a review of the Arbitrator’s decision and reasons.  I will assess the decision on the standard of reasonableness and address the questions posed by the Court of Appeal in the extract from the Layman case, above.

 

The Merits of the Decision

[19]        There are several questions raised by the parties, and for each, the direction of the Court of Appeal in Layman is relevant.   The first relates to whether the Panel’s issuance of the Schedule, in particular, section 27, was valid as being within its authority.  The Union submitted that this argument was prohibited as a collateral attack on the Panel’s jurisdiction.  Several other issues focusing on the reasonableness of the interpretation of section 27 of the Schedule will also be addressed.  Accordingly, I will deal with the following issues:

1)   Whether the argument concerning the Schedules is a collateral attack on the Panel’s jurisdiction;

2)   Nature of the Levy and Grading Scheme;

3)   Whether Graders were to be Qualified under the Fish Inspection Act;

4)   Whether payment was required in the absence of grading;

5)   Whether it was appropriate to apply the levy; and,

6)   Whether the Arbitrator amended the Agreement.

Collateral Attack

[20]        The Applicant/Processor submitted that the Panel exceeded its jurisdiction on several grounds.  First, it submitted that by virtue of Article 3 of the MCA, its jurisdiction was limited to setting the price of fish, and that accordingly, the Schedule to the MCA which set conditions as well as price, was without authority.  Article 3.01 reads:

During the term of this Agreement, the parties agree that all purchases of fish shall be made in accordance with prices set forth in the Schedules executed between the parties at which time such Schedules will be deemed to be part of this Agreement.

[21]        Second, it submitted that the Panel did not have the jurisdiction to bind processors who did not make submissions before it.  And finally, that since section 27 was improperly inserted into the Schedule, the Panel is limited by the MCA to deal only with the price of fish, and nothing else.

[22]        Overall, the Applicant/Processor submitted that there was insufficient authority in either the MCA or the FICBA to permit the Panel to include grading of fish as a condition in the Schedule.

[23]        The Respondent Union argued that these arguments were an impermissible attack on the Panel’s authority.  It submitted that it was not open to the Applicant/ Processor to launch an attack on the validity of section 27 of the Schedule in a review of an Arbitrator’s decision. There may be another forum for attacking the decision of the Panel, but it is not in this proceeding.  It pointed out that the Panel is a statutory tribunal, and relies on the terms of the FICBA for its jurisdiction.

[24]        These arguments were made before the Arbitrator, who dismissed the Applicant/Processor’s submission that the Panel had exceeded its authority.  Following a review of the history of the legislation and Collective Agreement, and the relationship of the price-setting mechanism to the overall economy of the Province, the Arbitrator concluded that the Panel’s decision to provide for conditions in the Schedule was within its jurisdiction.  He cited a decision of this Court, and then went on to reach a determination on jurisdiction, at paragraphs 37 and 38 of his decision:

[37] . . . . Hoegg, J also considered the authority of the Panel in Association of Seafood Processors Inc. v. Standing Fish Price-Setting Panel, 2008 NLTD 93 (CanLII) where she commented on the privative clause 19.11(2), at paragraph 26, as follows:

This privative clause states that the panel’s decision is final and binding on the parties.  Of further note is the time frame for a Panel to make decisions.  I see this as an indication that the Legislature recognizes the sensitivities of timing in the fishing industry and trusts the Panel to make speedy decisions which take immediate effect.  This privative clause suggests to me that some deference ought to shown [sic] to the Panel’s decision.

[38]  I do not consider it necessary to rule on the Union submission that a challenge to the jurisdiction of the Panel should be made by judicial review, because in addition to the rulings of the learned judges cited above, I find that the plain words of the noted provisions of FICBA clearly establishes that the Panel has authority over both prices and conditions of sale which define all aspects of the interaction between fishers and processors not simply limited to price.

[25]        I note that specific authority is provided in paragraph 19.2(d) of that Act:

19.2 The duties of the panel are

            (d)  to set prices and conditions of sale for a fish species where parties have engaged in collective bargaining and have been unable to agree or where parties have refused to engage in collective bargaining;

[26]        In addition, where a collective agreement is in place, section 19.11 provides authority to set both price and conditions of sale:

19.11 (1) Notwithstanding subsection 19.9(3), where the parties to collective bargaining are a certified bargaining agent and an accredited processors’ organization or a processors’ organization that represents processors in the province that process the majority percentage of a fish species and those parties appear before the panel under subsection 19.9(2), the panel shall hear and consider their positions on price and conditions of sale and shall, in accordance with the regulations, make a decision with respect to the matters in dispute between the parties relating to price and conditions of sale.

[27]        The FIBCA clearly provides authority for the establishment of the Panel, and for the Panel to establish both price and conditions of sale.  The decisions of the Panel, in this case, are set out in the Schedule to the MCA, and in particular, section 27.  In raising this issue, the Applicant/Processor is questioning the authority of the Panel to set conditions.  The Respondent/Union responds that attacking the Panel is not permissible in the context of a judicial review of the Arbitrator’s decision.

[28]        In Memorial University of Newfoundland v. NAPE, Local 7804, 2014 NLTD(G) 128, where a similar challenge of a panel’s authority was taken before an arbitrator, Justice Paquette stated, at paragraphs 28 to 29:

  1.    Memorial could have challenged the Board’s decision before the proper forum: through review proceedings before the Board or by way of an application to the Court for judicial review.Arbitrator Browne was not in a position to conduct an appeal of the Board’s order, just as the Board could not conduct a review of the previous arbitration awards. The Supreme Court of Canada in Figliola at paragraph 47 describes the constraint as follows, citing the trial judge’s reasons:

  1. … The complainants are attempting to pursue the matter again, within an administrative tribunal setting where there is no appellate authority by one tribunal over the other. [para. 54]

  1.    Memorial’s position thatArbitrator Browne committed a jurisdictional error by accepting the Board’s referral to arbitration of “outstanding matters” is an impermissible collateral attack on the Board’s decision. Nothing in this decision is to be taken as an adjudication of the Board’s authority to have made its order.

[29]        In reviewing the arguments of the Applicant/Processor about the jurisdiction of the Panel, I find they are wanting.  It first says that the Panel was limited only to setting the price of fish.  It’s authority to do so is contained in Article 3.01 of the MCA.  That provision does not limit the Panel’s authority, and does not exclude the Panel’s authority to make other determinations in accordance with the legislative scheme.

[30]        Next, the Applicant/Processor argued that because it did not make submissions before the Panel on price and conditions, the provisions of the Schedule should not bind it.  The Arbitrator articulated the binding nature of the agreement at paragraph 41:

[41]   An agreement binding on all processors of a species arises in three circumstances:

(a) direct negotiations between parties to the agreement (FIBCA subsection 19.8(2));

(b) order of the Panel (FIBCA subsection 19.9(3), 19.10 or 19.11)); or

(c) in the absence of an accredited processors’ organization, by negotiation between a certified bargaining agent and processors who process the majority percentage of the fish species (FIBCA subsection 21.1(1)).

[42]   Although the Master Collective Agreement is between the Union and ASP, the processor’s organization did not negotiate the Schedule and consequently authority for the formation of a binding agreement must be found in action by the Panel. . . . [The decisions of the Panel] support a finding that the Schedule constitutes an agreement binding on all processors pursuant to the authority of the Panel exercised in accordance with sections 19.9…

[31]        Finally, the Applicant/Processor challenged the insertion of section 27 in the Schedule on the basis that the MCA limits the Panel’s authority to setting price.  I am satisfied that this is an incorrect interpretation of the legislative provision.  I have referred elsewhere to provisions which explicitly provide authority to establish both prices and conditions of sale (see section 19.11(1) of FIBCA).

[32]        I am satisfied that the Panel does have authority to deal with both price and conditions of sale, based on the clear direction contained in the legislative scheme.  More importantly, the additional issue of collateral attack is relevant.  The Applicant/ Processor is in error when it asks the Court to assess the Panel’s authority within the context of judicial review of an Arbitrator’s decision.  Even though the Arbitrator responded to the Applicant/Processor’s arguments and validated the jurisdiction of the Panel, it was not the Arbitrator’s role to review the Panel’s authority.  That is the province of a superior court.  This proceeding is not about the validity of the Schedule, or the authority of the Panel to make the decision.  It is about whether the Arbitrator’s decision conformed to the requisite standard.  The Applicant/Processor has not sought judicial review of the Panel’s determination of the issues contained in the Schedule.  Therefore, this proceeding must be limited to an assessment of the Arbitration Award.

[33]        I accept the finding of the Arbitrator that the Panel had the authority to set the conditions in the Schedule as binding on all processors.  I also accept the Union/Respondent’s submission that this argument constitutes an impermissible collateral attack on the Panel’s jurisdiction.  The Applicant/ Processor submitted that its argument was not that the Panel had no jurisdiction generally, but lacked jurisdiction only on this one issue.  This, I took as an acknowledgement that it was an attack on the Panel’s jurisdiction, even if limited to this one issue.  It was the jurisdiction of the Panel, on the issue of the inspection regime, that was the core of the argument.  This kind of attack is not appropriate in the context of a judicial review of the decision of the Arbitrator.  This argument of the Applicant/Processor on this point must fail.

Nature of the Levy and Grading Scheme

[34]        The parties disagreed on whether the levy imposed on processors was a payment for the service of grading, or the provision of revenue for the Union to establish a monitoring process.  It was argued that the Arbitrator improperly re-interpreted the words “union grading” and “grading process” in that section to mean a “… system of cross check or monitoring …” to ensure adequate quality.  (Award: paragraph 60.)

[35]        A proper reading of section 27 does not disclose a reference to “union grading”.  It does refer to “union graders” who are to “check the sampling and grading process”.  The Arbitrator interpreted this provision in light of the preceding sections which set out the obligations of processors and harvesters with respect to quality control.

[36]        In arguing that the Arbitrator’s interpretation of the nature of the levy was in error and unreasonable, the Applicant/Processor referred to other sections in the Schedule.  Section 18 of the Schedule requires grading before processing.  Therefore, it was argued that section 27 placed an obligation on the Union to perform grading of fish as it arrived at a plant for processing.  However, this is a misreading of that provision, which is part of the obligations of harvesters before delivering catch to processors, and does not bear on the scheme contemplated in section 27.

[37]        It was also suggested that the protocols set out in sections 3 to 22 of the Schedule raised an obligation on the Union to participate in grading activities.  Again, this, in my view, misreads the Schedule, which does not place any obligation on the Union in this regard.  The only part of the Schedule which provides for Union activity is section 27, which imposes a levy to support the Union’s monitoring activities with respect to the grading process, and does not impose an obligation to be involved in “grading”.

[38]        The Arbitrator decided, at paragraph 59, that the levy was to finance the work of the Union to monitor employees of processors:

[59]   Upon consideration of the factual matrix of the Collective Agreement as a whole, the parties’ significant focus on quality of their product and the historic labour relations between the parties that sometimes manifests skepticism or distrust, I find the work required of the Union by section 27 is to check, monitor, observe or audit the work of the Processor’s employees taking samples and grading the fish delivered by fishers against the procedures and protocols set out in the Collective Agreement (including the Schedules that establish the attributes for each grade of fish) as verification that such processes are being performed correctly.  “Check” does not mean “grade.”

[39]        The terms “Check” and “grade” are a reference to section 27 of the Schedule.  It requires that the Union graders “… independently check the sampling and grading process to ensure that the protocols … are being adhered.”  It does not require that the Union employees be engaged in grading of fish as contemplated by the Fish Inspection Act, R.S.N.L. 1990, c. F-12 (FIA).   In setting out a series of obligations on harvesters and processors in sections 3 to 22, the Schedule then goes on to assign to the Union the task of monitoring adherence to these protocols.  The $0.01 levy on each pound of fish processed was meant to finance these activities.

[40]        Applying the questions articulated by the Court of Appeal in the Layman case, I am satisfied that the interpretation of the nature of the scheme set out in section 27  was reasonably based on the wording of the MCA and the Schedule, and the evidence presented.  Accordingly, the interpretation was justifiable and logically flowed from both the evidence before the Arbitrator, and his assessment of the legislative scheme.  The Arbitrator met the standard of reasonableness on this point.

Whether Graders were to be Qualified under the Fish Inspection Act

[41]        The Applicant/Processor argued that “union graders” should have been qualified as inspectors under the FIA, and since they were not, it was an error for the Arbitrator to find the contrary.  Reference was had to Article 5:03 of the MCA, which set the standards to be observed when a dockside grading program is in place.  Paragraph 5:03(c) requires that any grading contractor be independent of the processors’ association, the Union, or any individual harvesters or processors, and be licensed, presumably under the FIA.

[42]        On a review of the MCA including the Schedule, it becomes apparent that the Applicant/Processor’s submission is not supported by the plain meaning of those documents.  First, Article 5 of the MCA is only relevant when a dockside grading program is in effect.  It did not apply generally to inspections and grading of fish.

[43]        Second, a reading of the Schedule shows that the Panel intended for each of the actors in the system to have certain responsibilities.  Sections 3 to 11 imposed certain obligations respecting inspection on the Applicant/Processor.  In section 3 it is the processor who must have employees to perform quality control.  It reads in part:

  1. Sampling and grading will be conducted by qualified personnel employed by the processer purchasing the fish.

[44]        This part of the Schedule imposes obligations respecting grading on the Applicant/Processor.  It is not relevant to the responsibilities of the Union under section 27.  Accordingly, this portion of the Schedule does not engage the requirements of the FIA, and does not impose an obligation on the Union.

[45]        Sections 12 to 22 impose obligations on fish harvesters.  It requires harvesters to maintain certain protocols to ensure a high quality product is delivered to processors.

[46]        Finally, section 27 establishes a verification process, or auditing process, by which the Union had a role to “… independently check the sampling and grading process …” established under other sections in the Schedule.

[47]        The Arbitrator interpreted these provisions in light of evidence from several witnesses called by the Union which emphasized the importance of the maintenance of a quality product to the fishing industry generally.  He described the context for these provisions at paragraph 48 of his decision:

[48]  What then is the context against which I am to interpret this agreement?  The fishing industry is a heavily regulated endeavor greatly impacted by the vagaries of nature.  The product of the fishing industry is not produced under controlled conditions in a manufacturing facility, but rather the availability, quantity, quality and value of its output is subject to natural phenomena beyond the participants’ control.  The influence of fishers and processors on the ultimate value of product is limited to their methods and procedures for handling a wild and perishable resource to maximize its value for all participants.  Attention to specifying such procedures seems to be a reasonable area for attention in the commercial relationship between the parties.  One would expect agreements governing this relationship to contain provisions setting out the methods to be employed by the parties to enhance product value.  In fact, the Schedule, and its appendices, mostly contain provisions establishing the manner in which fish are to be handled prior to and at the point of delivery to the processor.  From directives to bleed, gut and wash fish at sea within 15 minutes of landing and then store in ice to maintain temperature below 4C, documenting the chain of possession and finally sampling and grading of the product at the fish plant, the Schedule sets out the conditions that must be followed by the fishers to get paid in accordance with the grade applicable to the quality of the fish that they deliver.  These descriptions of what fishers must do to get paid, constitutes “conditions of sale.”  The first aspect of the factual matrix informing my interpretation of the Collective Agreement is that the parties have incorporated detailed provisions prescribing procedures for handling fish prior to, and at the point of, delivery to the Processor as conditions of sale prescribing things that must be done by the fisher to get paid.

[48]        Having articulated the importance to all actors in the industry of ensuring a quality product, the Arbitrator interpreted the Schedule in a manner that affirmed the duties and roles of each of the players in the system.  Processors are required to have employees to follow certain quality protocols after fish is delivered to their plants.  Harvesters are required to follow quality protocols after fish is taken from the water.  And the Union’s role is to undertake a process to verify that there is adherence to the protocols.  The Arbitrator was clearly alive to the context within which the legislative scheme was established, and interpreted section 27 in that light.

[49]        I conclude that the Arbitrator has satisfied the requirements for justification and logic within the decision-making process.  His interpretation is supported by his assessment of the evidence and the law, and fall well within the range of possible competing interpretations.  Accordingly, his decision on this point meets the standard of reasonableness.

Whether payment was required in the absence of grading

[50]        The Applicant/Processor took the position that the Arbitrator was in error in his interpretation that payment was required under section 27 even in the absence of grading at the premises of the plant.  It was submitted that as Union staff did not actually monitor the processing of fish at the Applicant/Processor’s plant, no obligation to pay arose.  While staff visited the Applicant/Processor’s plant on at least thirteen occasions, no production was taking place on those occasions, so therefore no observations were made in respect of the processing of fish.

[51]        The Union responded that the Arbitrator’s conclusion concerning the nature of its obligations under section 27 was reasonable.  The section provided direction for “… Union graders to independently check the sampling and grading process to ensure that the protocols … attached to this Schedule, are being adhered.”  According to the Union, this approach required its staff to monitor the process for grading in place at each processor, and whether the responsibilities set out in the Schedule for quality control were being followed.

[52]        The Union pointed out two aspects of the regime established under section 27 that appeared relevant.  First, that an auditing or “checking” program would not require attendance at the plant each time production was carried on.  The notion of “spot checks” would be consistent with the nature of the monitoring program which was envisaged by the Schedule.  Second, the Union submitted that most of the Applicant/Processor’s arguments focus on the failure to perform “grading”.  The interpretation taken by the Arbitrator, that the program did not involve “grading” by the Union, but did involve a monitoring and checking of the grading protocols in place at the various processors, would answer that argument.

[53]        The Arbitrator’s decision on the nature of the levy, that is, to establish a system of monitoring to check that there is adherence to the quality protocols, leads directly to a conclusion that payment of the levy is not tied to grading services being performed by the Union at the Applicant/Processor’s plants.  It was a reasonable finding that payment was required whether or not the Union staff attended at the plant while processing was being carried on.

Authorization to Charge the Levy

[54]        The Applicant/Processor argued that the Arbitrator unreasonably found that the Union had the authority to impose the levy, without it having received services.  It suggested that the reasonable interpretation of the Schedule, including section 27, was that the levy was not unconditional, but was conditional on the Union doing certain grading-related work.  It cited three conditions implicit in the terms of section 27.  The first, that the persons who participated in the monitoring of the quality protocols must be “union graders”.  It submits that there was no evidence of the qualifications of the individuals concerned to enable a reasonable finding that they were able to competently carry out the assigned task.

[55]        The second condition outlined by the Applicant/Processor involved the requirement “… to independently check of the sampling and grading process.”  It submitted there was no evidence of any checking at the plant of the Applicant/ Processor.  In fact, the evidence was to the contrary, that every time the Union employees attended at the plant, the Applicant/Processor was not actually processing fish.

[56]        The third condition is related to the other two.  The Applicant/Processor submitted that there was no evidence of ensuring that there was adherence to the protocols set out in the Schedule.  This condition, like the other two, was impossible, it was submitted, because no Union employee attended at the plant while product was being processed.

[57]        The Union submitted that in citing these conditions as a prerequisite to charging the levy, the Applicant/Processor misapprehended the nature of the monitoring scheme as set out in the Schedule.  It cited the Arbitrator’s decision at paragraph 60, where he stated:

[60]  . . . The evidence discloses that union staff made 13 visits to the Processor’s plant during 2017 but did not observe any sampling or grading because the Processor was not in production during any of those attendances.  Just as it is not feasible to grade each fish (hence the sampling protocol) the oversight function carried out by the Union cannot reasonably be expected to observe the grading and processing of each fish delivered to a processor, or to specifically observe operations of the Processor.  It seems to me that the purpose of section 27 is to provide a system of cross check or monitoring that benefits all parties engaged in the fishery by providing assurance of proper treatment to the fishers and a vehicle to investigate and respond to quality issues…

[58]        In answer to the submission of the Applicant/Processor that there was no evidence presented concerning the Union’s monitoring process, the Union cites a further quote from paragraph 60:

. . . The evidence of Messrs. Broderick and Hedderson that the Union employs people experienced in the fishery who receive training and familiarization in the processes and protocols under observation, permanently stations staff at the largest cod processing facility in the province, perform random, but regular, inspections of other plants and responds to complaints from fishers or processors satisfies me that the Union is performing the services contemplated by the words used in section 27.

[59]        There was evidence that responding to complaints from various players in the fishery was an important part of the monitoring process (Arbitration Award, paragraph 19).  The Arbitrator heard evidence that no complaints had been received about the Applicant/Processor’s handling of product.  This fact, together with the thirteen visits by Union graders to the plant, provided the Arbitrator with a picture of a multi-faceted monitoring process.

[60]        The Arbitrator dealt with each of these arguments of the Applicant/Processor in his examination of different aspects of the legislative scheme.  With respect to the first, that there was no evidence of the qualifications of the Union staff, the Arbitrator’s reference to the evidence called by the Union answered this issue.  The second condition, that there was no evidence of checking adherence to the protocols because there was no processing being carried on each time Union staff visited the Applicant/Processor’s premises, is answered by the finding on the nature of the monitoring scheme.  The Arbitrator found that this was a “checking” and “monitoring” program, not a grading program.  Accordingly, as long as the Union established such a program, it met its obligations under the Schedule.  The third condition is related to the other two.  The nature of the program answers the Applicant/Processor’s argument on this point.

[61]        Accordingly, the Arbitrator’s decision is based on a rational and logical assessment of both the evidence and the legislative scheme.  The conclusion is also justifiable among the competing interpretations and therefore meets the standard of reasonableness.

Whether the Arbitrator Amended the Agreement

[62]        The Applicant/Processor argued that the Arbitrator engaged in an impermissible amendment to the agreement by removing the Union’s obligation to be engaged in “grading”.  The Arbitrator acknowledged his limits to amend the agreement at paragraph 51, where, after citing a case from Ontario, he noted:

. . . such an interpretation would conflict with my authority under section 11:07 of the Master Collective Agreement by constituting an amendment of the agreement by subtracting words therefrom.

[63]        The Applicant/Processor, however, argued that he did just that by requiring payment of the $0.01 fee without requiring that the Union take “… any role in the Processor’s grading actions.” (Applicant’s Brief, paragraph 52).

[64]        It was argued that the Arbitrator, in effect, re-wrote the meaning of section 27, by not applying the provisions of the FIA to Union “graders”.  Article 5 of the MCA was cited as authority for requiring the application of the FIA to this process.  However, it is clear that these provisions apply only where a dockside grading program (DGP) is in existence.  The evidence was that a DGP only exists with respect to crab and shrimp landings.  All other programs require grading by processors within their respective plants.

[65]        In arguing that the Union graders were required to be registered under the FIA, the Applicant/Processor misses the point that there is no requirement in either the MCA or the Schedule for the Union to be engaged in grading of fish landings.  The Arbitrator summarized the requirements at paragraph 55 of the Award:

[55]   . . .  I find that the parties intended “union graders” to describe personnel employed by the Union whose training and experience in the fishery enables them to competently conduct the oversight to be performed by the Union, by reason of being able to independently observe the quality of a particular fish sample against the established criteria and pass judgement that the sampling procedure and assigned grade appeared appropriate and in accordance with the specified protocols.

[66]        The Applicant/Processor’s argument is based on requiring licensing under the FIA and its regulations.  However, there is nothing in the MCA or the Schedule which makes this requirement.  In fact, since neither the MCA nor the Schedule refers to “licensed union graders”, for the Arbitrator to have required licensing under the FIA would be an impermissible amendment to the agreement.

[67]        For the reasons articulated above, I find that there was no amendment to the agreement by the Award.  The Arbitrator engaged in an exercise in interpretation, which was the purpose of the arbitration itself.   He went through a process of examination of the relevant documents, applying it to the record, including the testimony of several witnesses, as presented during the hearing.  His conclusion was based on a review of the law and the evidence, and rather than amend, he provided an interpretation of the Schedule which is both logical and justifiable.  Since there was no amendment, the Arbitrator did not reach a prohibited conclusion.

CONCLUSION

[68]        The Applicant/Processor sought judicial review of the decision of an Arbitrator that it was subject to a levy imposed by section 27 of the Master Collective Agreement entered into under the authority of the FICBA.  Following a review of the decision, and the arguments of the parties, I am satisfied that the Arbitrator’s decision met the applicable standard of reasonableness, and therefore his decision should stand.

[69]        Accordingly, the application is dismissed, and the Award of Arbitrator McCabe, issued on February 26, 2018 as between the parties, is hereby affirmed.  The Respondent/Union will have its costs in accordance with Column 3 of the Scale of Costs contained in the Appendix to Rule 55 of the Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D.

                                                                 _____________________________

                                                                 ALPHONSUS E. FAOUR

Justice