Executive Summary: Key Legal and Evidentiary Issues

• Judicial review hinged on whether the arbitrator's interpretation of article 705 of the collective agreement was reasonable under the Vavilov standard.
• Three union grievances challenged the employer's prorated application of a 3% salary increase to employees not covered by the performance recognition program (PRPI).
• Determining whether a contractual clause is ambiguous is a question of law, so the parties' apparent agreement that article 705 was "clear" could not bind the arbitrator.
• Extrinsic evidence, including past employer practice, was properly considered to confirm the parties' common intention once ambiguity was found.
• Estoppel and past-practice defences raised by the employer were rejected because the union was not shown to have known of or accepted the prorating practice.
• Procedural fairness was not breached, since the search for common intention was already part of the issues litigated and evidence presented at arbitration.

Facts of the case

The Syndicat des employées et employés professionnels-les et de bureau, section locale 610 (CTC-FTQ) (the "Syndicat") sought judicial review of an arbitration award rendered on April 17, 2025 by arbitrator Me Pierre-Georges Roy, which dismissed three collective grievances (G-2021-12, G-2022-13, and G-2023-14) filed against the Société de transport de Montréal (the "STM"). The grievances contested how the STM applied article 705 of the collective agreement in effect from November 26, 2018 to January 4, 2025, a provision granting an additional salary increase to employees not covered by the Programme de reconnaissance de la performance individuelle (PRPI) established under article 704. The PRPI was a pilot program running from 2019 to 2024 that allowed salary progression of between 0% and 4% based on annual performance results, and it did not apply to employees with less than six months of service during the reference year. Employees with under six months of service fell instead under article 705. The STM applied article 705 by prorating the 3% increase based on days actually worked during the year, consistent with how it had applied a predecessor provision (article 720.02) in prior collective agreements. The Syndicat argued that article 705's text was clear and required the full 3% increase regardless of length of service, with no prorating. Following an investigation triggered by an employee complaint in 2021, the Syndicat filed the three grievances. The arbitrator rejected all three grievances, and the Syndicat brought a Pourvoi en contrôle judiciaire (application for judicial review) before the Superior Court.

Policy terms or contractual clauses at issue

The central provision was article 705, which in its relevant part (paragraph B) states that an employee whose performance is deemed satisfactory and who has not yet reached the maximum of their salary scale may progress within it, with their salary "increased by three percent (3%)," subject to not exceeding the scale maximum, and with part-time employees' progression automatically adjusted based on regular hours. The STM argued this clause should be read in light of article 704 (the PRPI), since both provisions governed parallel salary progression mechanisms introduced or maintained as part of the same 2018-2025 agreement. The STM contended it would be inequitable to grant employees outside the PRPI the same full benefit as those judged eligible for it, and that the historical predecessor clause (article 720.02) had always been applied on a prorated basis tied to days worked. The Syndicat maintained that because article 705 did not expressly mention prorating, the full 3% had to be paid regardless of service duration during the reference year.

Reasoning and analysis

The Superior Court, per the Honourable Catherine Piché, J.C.S., applied the reasonableness standard from Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, which the parties agreed governed the review. The court explained that a decision is unreasonable only where there is a lack of internal logical coherence or where it is untenable in light of the relevant factual and legal constraints, per Vavilov and Auer v. Auer, 2024 SCC 36. Reviewing courts must not decide the merits themselves, substitute their own preferred outcome, or conduct a fresh analysis. The court rejected the Syndicat's first argument that the parties had agreed article 705 was unambiguous, holding that whether a clause is ambiguous is a question of law that cannot be the subject of an admission by the parties. The arbitrator's approach was found to follow the two-step interpretive method set out by the Supreme Court of Canada in Uniprix inc. v. Gestion Gosselin et Bérubé inc., 2017 SCC 43: first assessing whether the clause's terms are clear, and if not, examining the common intention of the parties under articles 1425 to 1432 of the Civil Code of Québec, considering extrinsic evidence such as the circumstances surrounding the clause's adoption and the parties' own application of it. The court found it was not unreasonable for the arbitrator to conclude that, although article 705 appeared clear in isolation, the broader contextual examination of the PRPI's introduction revealed ambiguity warranting a search for common intention. The court also rejected the Syndicat's second argument, that the arbitrator erred by simultaneously finding the union unaware of the STM's prorating practice while still relying on that same practice as evidence of common intention; the court held the practice was properly used as contextual evidence of intent, separate from the rejected estoppel and past-practice defences. The Syndicat's third argument, that the arbitrator misunderstood the relative value of the PRPI compared to article 705's increase, was also dismissed, as the arbitrator had not treated the two regimes as equivalent but reasoned it would be surprising for the detailed PRPI to confer no greater benefit than article 705. On the separate ground concerning potential inconsistency with other agreement provisions (Annex B), the court noted this argument had not been raised before the arbitrator and could not now be used to second-guess the award, and in any event the PRPI ended in 2024, eliminating any prospective inconsistency. Finally, on procedural fairness, the court found the search for common intention was not a new issue sprung on the parties; testimony from union vice-president Benoît Tessier and STM witnesses, along with documentary evidence, addressed both the estoppel/past-practice defences and the substantive interpretation of article 705, so the Syndicat had a full opportunity to be heard.

Ruling and overall outcome

The Superior Court dismissed the Syndicat's application for judicial review, concluding that the arbitrator's award was justified, transparent, and intelligible, with conclusions properly grounded in the evidence and a coherent legal analysis under article 705. The STM was the successful party, with the arbitrator's award upholding the prorated application of the 3% salary increase being confirmed and the grievances remaining dismissed. The judgment ordered that the Syndicat's proceeding be dismissed "avec les frais de justice" (with legal costs), but no specific monetary amount of costs is stated in the decision; the exact amount cannot be determined from the document provided.