Chapter 5: Arbitration

August 7, 2015

Arbitration is the final appeal and is a hearing before an impartial third party chosen by the mutual consent of union and management. If the union and management cannot agree, there is provision for the provincial, territorial or federal Minister of Labour to make the appointment.

Some contracts provide for a single arbitrator, usually named in the collective agreement. The single arbitrator hears the case and then writes the decision which is binding on both sides.

Other contracts provide for an Arbitration Board made up of one nominee from the union and one nominee from management. Following consultation, the union and management nominees choose a mutually acceptable chairperson or, failing that, an arbitrator appointed by the Minister of Labour. In this instance, it is the three-person board which will hear the case, with the chairperson retiring to write the decision. The decision of the chairperson is submitted to the board members who will sign in agreement or submit a written dissension. The majority decision of the board is binding on both parties.

The arbitrator or board only has authority to interpret the agreement as written. They are not allowed to amend, alter, add to, or take away any provisions contained within the agreement.

The arbitrator or board is also restricted to dealing with the grievance as presented. For this reason, many unions require the previously mentioned general statements of the grievance on the grievance forms so they are not restricted to a single clause or section of the agreement at a later date causing them to restrict the scope of their case.


Contract clauses can always be interpreted in different ways, and the guidelines below might explain some of those differences. They aren’t firm rules, however. There will always be exceptions, but you should find that most of these will help you decide whether you have a grievance or not.  

What was the intent of the parties who wrote the agreement? 

Example: A contract may say that holiday pay will be allowed to all employees who work the day before the holiday. What if management closes the workplace the day before each holiday so that no one could ever receive holiday pay? An arbitrator might rule that the intent of the contract’s authors was for eligible employees to get that holiday pay, and that, therefore, the management violated the contract by preventing them from qualifying. 

The contract should be interpreted as a whole.
One part may support your position; another part may deny it. You cannot pick out the part that supports you and ignore the rest. Your interpretation must be reconciled to the other provisions of the contract, and it must be consistent with them.

If the wording of the contract is clear and definite, it will generally prevail.
Example: If the contract specifies that workers will receive two hours for an emergency call, even though they had received three hours for a number of years, an arbitrator would be forced to uphold the wording of the contract, not the practice.

If the wording of the contract is vague and indefinite, the interpretation of the parties and their practices will carry considerable weight
Example: The contract may say that an employee receiving an emergency call will be paid extra – without saying how much extra. For the past five years, workers have been paid three hours for this work. It may be assumed that both parties to the agreement recognized that three hours was the proper pay in this instance. Past practice will be considered by an arbitrator only to resolve an ambiguity in the agreement. 

Decisions made in similar cases in the past affect decisions in present cases, particularly if the same parties were involved. 
Arbitrators are not bound by precedent, but decisions of other arbitrators carry considerable weight. If the previous settlement was wrong or made in error, then you should show how the error was made.

Express (written) provisions imply the exclusion of everything not mentioned. 
Example: If the contract states that paid holidays will be given on New Year’s Day, Labour Day, Thanksgiving and Christmas, it implies that paid holidays will not be given on other days, such as Victoria Day or Boxing Day.

Implied (unwritten) provisions may exist if they are consistent with the express (written) provisions. 
Example: One part of the contract may provide for rest and lunch periods during the regular shift; another part may provide for emergency workers but makes no mention on rest of lunch periods. The implication of both express provisions, interpreted together, is that the emergency workers should have the same allowance.

When both general and special provisions concern the same thing, the special provisions will generally prevail. 
Example: If one rule says all employees who drive company cars to the work location get one hour allowance, and another rule says that employees who drive company cars to the work site and are permitted to take them home get half an hour allowance, the special rule about cars taken home gets priority over the general rule about company cars.

A reasonable interpretation will prevail over one that is unreasonable or absurd. 
Example: If you can show that under the management’s interpretation of the holiday rule no men would be eligible for some holidays, while under your interpretation most men would be eligible under most occasions – your position would be upheld.

A note on management’s rights

A common management position: If something is not specifically limited in the collective agreement, management has the residual power to do it. Some arbitrators say a specific provision in the contract is necessary to limit management’s rights. Others take the view that limits on management rights are not necessarily restricted to those contained in specific provisions. They may be “implied obligations” or “implied limitations” under some general provision of the agreement such as the recognition clause, or seniority provisions.

Arbitrators have also been known to modify residual rights by imposing a standard of reasonableness as an implied term of the agreement. Certainly, many arbitrators are reluctant to uphold arbitrary, capricious or bad faith managerial actions which adversely affect bargaining unit employees. It should also be noted that even where the agreement expressly states a management right, or gives it discretion, management’s action must not be arbitrary, capricious or in bad faith.