Executive Summary: Key Legal and Evidentiary Issues

• The Divisional Court reviewed an arbitration award dismissing a union grievance over the assignment of weekend cleanup work to student employees.
   
• Arbitrator Michael Bendel had found the collective agreement gave the employer unfettered discretion over overtime assignment and distribution.
   
• A Letter of Understanding addressed overtime distribution but was not mentioned anywhere in the Arbitrator's reasons.
   
• Vavilov's reasonableness framework required the Arbitrator to grapple with the central issues raised by the parties.
   
• Failure to explain why the LOU did not apply rendered the award unreasonable in the Court's view.
   
• Remittance to a different arbitrator followed, along with an agreed costs award against the employer.
   

Facts of the case

United Steelworkers, Local 1-2010 sought judicial review of an arbitration award dated March 10, 2025, in which Arbitrator Michael Bendel dismissed a grievance against GreenFirst Forest Products (QC) Inc. The dispute concerned cleanup work at the employer's sawmill in Hearst, Ontario, performed on non-production days ("weekends"), which under the collective agreement was paid at overtime rates. Until June 2024, the employer offered this work to regular employees first, assigning students only when insufficient regular employees volunteered. In June 2024, the employer began assigning students to the work even when enough regular employees had signed up, and students were paid at straight time rates until reaching 40 hours in a week. The Union grieved on June 12, 2024, arguing the employer breached a Letter of Understanding ("LOU") dated May 18, 2022 [the source document also refers to this instrument as dated May 2018 in one passage] on overtime distribution, and later raised a secondary issue about whether students were entitled to overtime pay at all. The Arbitrator dismissed the grievance, finding the agreement did not regulate overtime distribution and that the employer had unfettered discretion over assigning and distributing overtime work. He also found the secondary issue about student overtime pay was not properly before him.

Policy and legislative provisions at issue

The Court's jurisdiction arose under sections 2 and 6(1) of the Judicial Review Procedure Act, R.S.O. 1990, c. J.1. Substantively, the case turned on the LOU incorporated into the collective agreement, which provided that non-production weekend overtime was voluntary, that the employer had to post a weekly overtime sheet, that overtime work had to be distributed as equally as possible among employees who normally performed the work, and that only where no such employees were available could the employer assign the work by seniority. Paragraph 11.05 of the agreement required time worked on Saturdays and Sundays to be paid at time and one half. Paragraph 11.06(a) addressed seniority calculation for students, providing that students are laid off at the end of their term and start as new employees if rehired, meaning they can never hold seniority except relative to other students.

Reasoning and analysis

The Court applied the presumptive reasonableness standard set out in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, noting this standard governs collective agreement interpretation and requires deference to labour arbitrators' expertise. Justice McGee, writing for the panel, found the Arbitrator's award unreasonable because it never addressed the LOU, which expressly stated that weekend overtime "shall be distributed by seniority to qualified employees who have volunteered." The employer argued the award should be read as finding the LOU inapplicable because the issue was entitlement to overtime rather than its distribution, but the Court rejected this characterization, noting the Arbitrator's own language referred to "distribution" of overtime and never explained why the LOU's distribution terms did not apply. Citing Vavilov at paragraphs 127 to 128, the Court held that while a decision-maker need not address every argument, it must address the central issues raised, and the LOU was central to the Union's position. The Court described the employer's post-hoc reconstruction of the Arbitrator's reasoning as a "guessing-game" and concluded it was unreasonable to find an implicit management discretion over overtime assignment without explaining why the LOU's express distribution terms did not govern.

Ruling and overall outcome

The Divisional Court found the Arbitrator's award unreasonable for failing to address the LOU and remitted the matter to a different arbitrator for redetermination in accordance with its reasons. The Union, as the successful party, was awarded agreed costs of $6,500, payable by GreenFirst Forest Products (QC) Inc.