Executive Summary: Key Legal and Evidentiary Issues

Union filed certification applications naming clinic business names rather than the legal employer entity, dentalcorp Health Services Ltd. Board granted the Union's request to amend the employer name under Section 126(2)(j) of the Industrial Relations Act, finding a "bona fide mistake" without requiring evidence. Union presented no testimony or evidence explaining why it selected the clinic names or relied on public-facing signage. Board made an assumption, based solely on the Union's written submission, that the clinic's business names on buildings and websites explained the mistake. Reasonableness requires administrative decisions to be grounded in actual evidence before the decision maker, not assumptions on material issues. Court distinguished between not requiring proof of due diligence versus eliminating the need to establish on evidence that a mistake actually occurred.

Background and procedural history

The New Brunswick Union of Public and Private Employees filed two union certification applications in August 2023 seeking to certify dental assistants as a bargaining unit. The applications named "Main St. Dental" and "Sussex Dental Clinic" as the employers, which were the business names under which dentalcorp Health Services Ltd. operated its Fredericton and Sussex clinics. Dentalcorp challenged the applications, arguing that the clinic business names were not legal entities and therefore could not be named as respondents. The company contended this was a substantive defect that warranted dismissal of the applications.

The Union responded by requesting leave to amend both applications to name dentalcorp Health Services Ltd. as the employer. The Union submitted that it had used the public-facing business names displayed on the clinic buildings and websites and therefore made a "bona fide mistake." The Union filed a pre-hearing written submission arguing that using the clinic's business names did not create confusion, caused no prejudice to dentalcorp, and requested the Board exercise its discretion to permit the amendment.

Board's decision and legal authority

The Board held hearings on April 2-4, 2024, at which both parties called witnesses and presented evidence. The Board's authority to allow the amendment came from Section 126(2)(j) of the Industrial Relations Act, which permits the Board, when satisfied that a "bona fide mistake" has been made in naming a party, to "correct" the proper name "upon such terms as appear to the Board to be just."

On September 26, 2024, the Board issued a 53-page decision granting the Union's amendment request and certifying the Union as bargaining agent for dental assistants at both locations. The Board identified the "key issue in dispute" as whether the Union was required to present evidence establishing that it made a bona fide mistake. The Board concluded that no such evidence was required and found that dentalcorp's continued use of the clinic business names on buildings and websites explained the Union's mistake. The Board stated: "There is no evidence that NBU acted other than honestly and in good faith." Finding no prejudice to dentalcorp, the Board approved the amendment.

The critical evidentiary gap

Critically, the Union presented no evidence at the Board hearing explaining why it selected the clinic names or that it relied on public-facing signage. The Union's counsel later acknowledged before the Court that no evidence or argument was presented to explain how the employer's name was arrived at. The Union's position was that once the Board found no separate requirement to prove due diligence, evidence regarding the mistake itself became unnecessary. The Union emphasized the absence of fraud or bad faith and argued the Board could simply make a technical correction.

However, the Board's statement that the clinic's business names "on both the buildings and websites" explained the Union's failure to use the legal name was based entirely on the Union's written submissions, not on testimony or evidence. This assumption became foundational to the Board's decision to exercise its discretionary authority under Section 126(2)(j).

Judicial review and the reasonableness standard

Dentalcorp filed for judicial review on December 17, 2024, challenging the Board's decision as unreasonable. Justice Petrie applied the reasonableness standard established by the Supreme Court of Canada in Vavilov, 2019 SCC 65. Under this standard, reviewing courts must defer to specialized administrative tribunals and avoid substituting their own judgment. However, reasonableness requires that decisions be justified by the actual evidentiary record and grounded in a coherent chain of reasoning.

Justice Petrie emphasized that labour relations boards deserve "the highest level of judicial deference" as specialized tribunals. Nevertheless, the court noted that Vavilov establishes that reasonableness may be jeopardized where the decision maker has fundamentally misapprehended or failed to account for evidence before it, or where conclusions are not based on the evidence actually presented. The court found that a decision based on an "absence of evidence is an unreasonable one."

Court's analysis and finding of error

The court found that the Board had committed a critical error by making an "assumptive finding" without evidentiary support. While it was true that dentalcorp used the clinic business names on its buildings and websites, the Board assumed this explained why the Union selected those names in the applications. However, the Union never presented evidence to establish this connection. The Union's Pre-Hearing Brief contained assertions and legal arguments, not evidence.

Justice Petrie distinguished between two separate issues: (1) whether the Union must prove it exercised due diligence, and (2) whether a bona fide mistake actually occurred. The Board may have reasonably determined that no separate due diligence requirement existed, but this did not eliminate the foundational requirement to establish on the record that a mistake had actually been made. A reasonable decision must, at minimum, explain the result in view of the law and key facts. The Board provided no evidentiary foundation for its critical finding.

The court found that the Board's analysis suffered from "a failure of rationality internal to its reasoning process" and was "not clear, transparent or justifiable." The Board conflated two separate issues in an effort to align its decision with prior labour board authorities, but in doing so, it bypassed the essential requirement of establishing the mistake on evidence.

Outcome and significance

Justice Petrie quashed the Board's decision to amend both applications and set aside the union certifications. The decision underscores that even highly specialized administrative tribunals entitled to substantial deference cannot rely on assumptions to support material findings that are foundational to the exercise of discretionary authority. Decisions must be anchored in actual evidence before the decision maker.

Dentalcorp, as the successful party, was awarded costs of $2,500.00 plus reasonable disbursements. The case demonstrates the importance of distinguishing between evidentiary requirements for establishing subsidiary elements of a legal test versus the core requirement to establish foundational facts on the record. While labour boards possess discretion in how they approach procedural requirements, that discretion does not extend to making critical findings based on assumptions rather than evidence.