2006 BCCA 273 Randhawa v. The Pepsi Bottling Group (Canada) Co.

Before:	The Honourable Madam Justice Newbury
	The Honourable Mr. Justice Hall
	The Honourable Mr. Justice Mackenzie

Oral Reasons for Judgment

E.C. McCabe B. Savage	Counsel for the Appellant
M.P. Carroll, Q.C. A. Soltan	Counsel for the Respondent
Place and Date:	Vancouver, British Columbia
19 May 2006

[1] HALL, J.A.: This is an appeal from the order of Mr. Justice Williams pronounced 5 November 2004, dismissing an appeal of an interim arbitration award. The award appealed from was a ruling by the arbitrator that he did not have jurisdiction to grant the equitable remedy of reinstatement in the absence of an express provision in the contract of employment between the parties.

[2] The appellant, Mr. Randhawa, was an employee of the respondent, The Pepsi Bottling Group (Canada) Co. Ltd. ("Pepsi") and its corporate predecessor Grey Beverage Inc., from 1981 to 1999. He was dismissed from his position as a forklift operator at Pepsi’s plant in Delta, British Columbia on 7 September 1999. Mr. Randhawa had been involved in an altercation with another employee and just cause for dismissal was alleged by Pepsi.

[3] The terms and conditions of Mr. Randhawa’s employment were governed in part by a Wage and Working Agreement, which though negotiated collectively, is not a collective agreement under the Labour Relations Code. The parties are in agreement that the agreement acts as an individual contract of employment. That Wage and Working Agreement is found in the appellant’s appeal book at page 18 and following. We have been referred to it by counsel.

[4] Upon termination, Mr. Randhawa followed the four step grievance procedure set out in the agreement. The fourth step was an arbitration hearing before an arbitrator, Mr. Vince Ready. The hearing took place on 16 and 17 February 2001. The remedy sought by Mr. Randhawa on the arbitration was reinstatement with compensation for lost wages and benefits.

[5] Pepsi’s position at the arbitration was that this remedy was not available to Mr. Randhawa. It relied on s. 23 of the Commercial Arbitration Act, R.S.B.C. 1996, c. 55 (the "Act"):

23 An arbitrator must adjudicate the matter before the arbitrator by reference to law unless the parties, as a term of an agreement referred to in section 35, agree that the matter in dispute may be decided on equitable grounds, grounds of conscience or some other basis.

[6] With no agreement under s. 35 providing otherwise, Pepsi argued that the matter must be adjudicated “by reference to law” and that at common law, courts do not generally contemplate specific performance as a remedy in employment cases. This equitable remedy was not available under the statute in the absence of an agreement pursuant to s. 35 in Pepsi’s submission. Therefore it was argued that the arbitrator had no jurisdiction to grant the remedy sought on behalf of the appellant.

[7] Mr. Randhawa agreed the arbitration was governed by the Act and that there existed no agreement under s. 35. It was, however, submitted on his behalf that there did exist a discretion on the part of the arbitrator to order reinstatement in special circumstances. He submitted that the application of the agreement taken together with his personal circumstances was exactly such a case. He argued the implication of a term was required to give full efficacy to the agreement. He argued that Pepsi’s common law rights were circumscribed by the agreement, which should be found to contain an implied term that reinstatement was available as a remedy.

[8] The parties asked the arbitrator to decided an interlocutory point of law, which the arbitrator stated in part is as follows:

Whether I have a jurisdiction to order reinstatement under the terms of employment governing Mr. Randhawa’s employment with the Pepsi Bottling Group and, in particular, with reference to the Wage and Working Agreement…

[9] The arbitrator went on to find that the parties had not agreed to resolve their dispute on any ground other than by reference to law. Mr. Randhawa’s remedies were therefore limited to those of common law. The arbitrator considered reinstatement of employment was equivalent to the equitable remedy of specific performance. Noting that s. 10 of the Act expressly provided for the remedy of specific performance with respect to an agreement between parties for the sale of goods, the arbitrator applied the maximum expressio unius est exclusio alterius to find that “by implication the authority to make an order involving specific performance in all other situations is excluded”.

[10] In the alternative, the arbitrator found that even if he had concluded he had jurisdiction to grant reinstatement under the common law, this was not one of those rare cases where it could be found to have been an appropriate remedy. He said:

Certainly, the mere existence of an employment contract that provides for a grievance procedure and that an arbitrator’s decision shall be final and binding, does not constitute special circumstances as contemplated by the jurisprudence. Nor in my view, does the fact that the Claimant may have difficulty finding subsequent employment with such an established employer warrant the exceptional remedy of specific performance of an employment contract.

[11] The arbitrator referred to two cases cited by Mr. Randhawa: Yukon Freight Lines Ltd. v. General Truck Drivers & Helpers Union, Local 31, [1976] B.C.J. No. 2 (C.A.) and Assn. of Universities and College Employees, Local 2 v. Simon Fraser University, [1994] B.C.J. No. 1093 (C.A.). In these cases, the inclusion of the phrase “the arbitrator’s decision shall be final and binding" was held to imply an expanded jurisdiction. Such language was also present in the agreement. The arbitrator distinguished earlier authorities because the present case did not involve a collective agreement. The arbitrator also noted that Yukon Freight Lines was decided under a predecessor act that did not include an equivalent to s. 23 of the statute. The arbitrator therefore concluded that in the circumstances of this case he did not have jurisdiction to order reinstatement as a remedy.

[12] Mr. Randhawa applied to the Supreme Court to set aside the award on the basis of arbitral error and also applied for leave to appeal a question of law. His position was dismissed as to the application to set aside the award but Madam Justice Satanove granted leave to appeal. The appeal from the decision of the arbitrator was heard by Mr. Justice Williams on 19 January 2004 and a judgment dismissing the appeal from the arbitrator’s ruling was delivered on 5 November 2004. Before Mr. Justice Williams, Mr. Randhawa argued the parties had contracted out of s. 23 of the Act and that the arbitrator had erred in not accepting the submission that the final and binding language included in the agreement should result in an expanded jurisdiction. He pointed to the first three steps of the grievance procedure which contemplated reinstatement as indications that reinstatement ought to be available as well under the fourth step of arbitration.

[13] Reviewing the arbitrator’s award on the standard of correctness, Justice Williams found no reason to disturb the arbitrator’s award. He found the parties had not contracted out s. 23 of the Act because the avenue to do so led exclusively through s. 35, the section which the parties agreed had no relevance to their case. Justice Williams also held that in the circumstances of this case the agreement could only contain an implied term based on presumed intention. The question was whether an objective observer would conclude that a term allowing reinstatement must be part of the agreement. Mr. Justice Williams held that such a conclusion, in the absence of a collective agreement, would be contrary to a body of settled jurisprudence which concludes that the right of reinstatement is only very rarely to be considered in the context of dismissal.

[14] The appellant in this Court argues error on the part of the arbitrator and the chambers judge. The appellant submits that to make the grievance procedure efficacious, a term such as the one he seeks to have implied ought to be implied into the agreement. He points to certain language in the Yukon Freight Lines case as supportive of that result. I do not agree. I consider that the agreement as it stands is efficacious. I do not consider it is necessary to imply the term to make commercial sense, nor do I consider it would be in accord with the principle sometimes referred to as the "officious bystander" test. I should note here that we were referred by counsel to some comments on this subject of implied terms in a leading case, Canadian Pacific Hotels Ltd. v. Bank of Montreal, [1987] 1 S.C.R. 711.

[15] I do not consider it has been demonstrated that the arbitrator erred in his finding that no such term as argued for by this appellant ought to be implied as a term of the agreement between the parties. I am in substantial agreement with the reasons of the chambers judge who found no error in the approach or the conclusion of the arbitrator.

[16] I would dismiss the appeal.

[17] NEWBURY, J.A.: I agree.

[18] MACKENZIE, J.A.: I agree.

[19] NEWBURY, J.A.: Thank you, counsel. The appeal is dismissed.

“The Honourable Mr. Justice Hall”

Citation:	*Randhawa v. The Pepsi Bottling Group (Canada) Co.,*
	2006 BCCA 273