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2018-08-29T08:23:39+00:00 August 29, 2018|Arbitration|

Who Bears the Cost of an Adjournment of an Arbitration Hearing?

An interesting award dealing with cost of adjournments at arbitration is  Toronto Transit Commission v Amalgamated Transit Union, Local 113 2017 CanLII 5852 (ON LA). 

The TTC and Local 113 were involved in an ongoing matter which had already gone to a hearing before an arbitrator.  A continuation date was scheduled for February 8, 2017. 

On February 7, 2017 the union asked the employer to consent to an adjournment of the hearing.  The employer ultimately agreed to adjourn but took the position that the union pay the costs associated with the adjournment.  The union was not willing to do so and a conference call was scheduled with the arbitrator to determine how the costs of the adjournment should be handled.

The request for an adjournment was clearly bona fide.  As the arbitrator put the union’s argument:

… the local is dealing with a catastrophic event and one that is unprecedented in the Local’s 120-year history. The Local is facing a huge crisis and the upheaval has left the reduced number of Executive Board members scrambling to meet the needs of the Local. As counsel put it, “Ms. Lint [counsel’s advisor in this case] is run off her feet”. She was unavailable to attend the arbitration and no one could replace her.

Although there seems to have been a past practice of the parties sharing the costs of adjourned hearings in cases where “the situation is beyond the control of the parties”, the employer appears to have argued that this was not such a case as the union chose to attend meetings rather than the hearing.  Furthermore:

Employer counsel suggested that at this point the Commission has no idea how long the situation facing the union will continue. It could go on for months and is totally outside of the control of the employer. Is the Commission going to be expected to pay for adjournment requests made the day before the hearing on a go-forward basis because of the unavailability of advisors? Counsel argued that would be totally unfair. It is unacceptable and completely unfair to expect the Commission to bear the costs of adjournments on an indefinite go-forward basis.

The collective agreement between the parties is a typical one as relates to cost-sharing:

The parties shall each pay one half of the remuneration and expenses of the Chairperson of the Board of Arbitration while each party shall be responsible for the remuneration and expenses of its appointee to the Board.

Of note is that the Labour Relations Act, 1995 provides for a sharing of arbitration costs in the case of expedited arbitration.  Section 49(9) of the Act provides:

Where the Minister has appointed an arbitrator under subsection (4), each of the parties shall pay one-half of the remuneration and expenses of the person appointed.

The Union (and the arbitrator agreed) relied on the following comments Arbitrator Solomatenko which I set out in full in Shoppers Meat Markets Ltd. (Metro Provisions) and United Food and Commercial Workers International Union, Local 633 (1984) 16 L.A.C. (3d) 184 (Solomatenko):

Accepting that an arbitrator may award costs as a term of granting an adjournment, the question still remains as to the circumstances under which that discretion should be exercised. Although each request must ultimately be decided on its own merits, there must still be some regard for general principles or guidelines against which to assess the request. Certainly, extraordinary costs, such as the transportation costs of witnesses in the Air Canada case, should receive strong consideration for reimbursement. Whether or not the party seeking the adjournment has given prior notice to the other party is similarly a relevant factor. Costs may also be appropriate where there is abuse of the process or the party seeking the adjournment has been singularly responsible for numerous delays. The overriding consideration, however, must be the labour relations context itself. It is a long-established principle of the labour arbitration process that each party shares equally in the costs of the procedure, regardless of its success in the matter. Wherever costs of an abortive hearing are awarded as a term of granting an adjournment, it should still be in the context of this historical principle that the parties normally share all costs.

Awarding costs on a punitive basis has no place in the labour relations context. Litigants in a court action are only concerned with the one time financial outcome of the suit; there is usually no concern about any ongoing relationship of the litigants thereafter. But, the opposite prevails in the context of labour arbitration. Notwithstanding that arbitration is an adversarial process, the participants are still subject to an ongoing legal relationship after the conclusion of any one case. Perhaps trite, but it bears emphasis that there is a certain amount of give and take to the collective bargaining relationship. On a given occasion, one party may incur some additional costs attributable to the other party, but the reverse may be true on the next occasion. As a general rule, costs of an abortive hearing should only be awarded where there are extraordinary factors, as previously mentioned, such that it can be said objectively that it would be unfair for the other party to bear those costs, notwithstanding that costs of the process usually balance out over the long-term.

The issue, according to the arbitrator in TTC involved looking at the reason for the requested adjournment – was it for reasons beyond the control of either party (i.e. an emergency) or was the situation avoidable in that it was “within the control of the party requesting the adjournment, or that is the result of some sort of negligence.”

Leaving aside the language of the collective agreement (which was clear in this case), the arbitrator also considered “principles of fairness and reasonableness” which were also “fundamental to the arbitral process and labour relations in general”.

The arbitrator was clearly sympathetic to both the union and the TTC – I would be too, this is an unprecedented and incredibly traumatic and disruptive situation.  At the same time, life goes on, and the arbitrator posed the following question:

…… when does the situation facing the Local become no longer an emergency or unprecedented and the new, albeit, extremely difficult reality the Local must operate within?

In that regard, the employer can’t be expected to “pick up the tab” forever more in these adjournment situations because of what is an internal union matter.  The arbitrator put  a labour relations spin on the “life goes on” mantra when she observed:

There are many, many arbitrations currently scheduled and it is extremely disruptive to the ongoing relationship between the parties if union advisors cannot be made available to ensure that the proceedings go ahead. As part of the responsibility of running the Local, the Trustee must put in place a process to ensure that the arbitrations currently scheduled take place.

In the circumstances, and “given the unique and tumultuous circumstances the Local finds itself in and given the longstanding relationship between these parties,” the arbitrator granted the adjournment, with costs shared equally between the employer and trade union.  In doing so, she offered some guidance to the parties with respect to the cases that were proceeding before her:

It seems fair to me to expect the Local [a week after being placed in trusteeship], under the guidance of the Trustee, to have a process in place by that point in time to ensure that an advisor is available for ongoing arbitration hearings. If not, then it may be appropriate for the Local to bear the costs of cancelling the hearing.

These comments were offered not in a definitive way, but in order to assist the parties. 

The case is a reminder that labour relations are different – there is an ongoing relationship between the employer and the trade union.  What goes around does, indeed come around.  Sharing the cost of arbitration is typical and accepted, however there are rare situations where a different approach may be called for.