Labor & Employment Law

Costs Award at Arbitration - Not So Much

By Michael Fitzgibbon

Can an arbitrator award costs against one or the other of the parties (the Union or Company)?  

Each party to a labour arbitration bears their own costs and then split of costs of arbitration.  Such costs would include, for example, the arbitrator's fees and expenses associated with the hearing (for example, the cost of the hearing room).  This is normal and usual, in fact, most collective agreements address this specifically.

In Shoppers Meat Markets Arbitrator Solomatenko stated that "as a general rule, costs of an abortive hearing should only be awarded where there are extraordinary factors", such as where there has been an abuse of process.  He noted:

"The overriding consideration, however, must be the labour relations context itself. It is a long-established principle of the labour relations process that each party shares equally in the cost of the procedure, regardless of its success in the matter. Whenever costs of an aborted hearing are awarded as a term of granting an adjournment, it should still be in the context of this historical principle that the parties normally share all costs"

There must be some "extraordinary circumstances" present.  

In Community Addiction and Mental Health Services of Haldimand-Norfolk [2010] 101 C.L.A.S. 304 (Chauvin), despite the following unusual provision, the Arbitrator nonetheless refused to grant costs against the Union where it was found that the "extraordinary circumstances" were not present:

The Parties to this collective agreement shall pay the fees and disbursements of their respective appointees to the Board of Arbitration and shall share equally in the fees and disbursements of the Chair. The Parties further agreed that, in the event of any cancellation fees being levied by the Board of Arbitration members, the Party responsible for such cancellation shall be solely responsible for all such fees.

Most recently, Arbitrator Stout considered the matter and, in refusing to award costs against the Union noted that the employer:

.... has sought an order for their costs thrown away.  The costs associated with my fees and expenses are addressed in the collective agreement, see article 7.15.  This is not unusual in labour relations.  In fact, the splitting of costs is normal. It is only in exceptional circumstances that an arbitrator may order costs, see Community Addiction and Mental Health Services of Haldimand-Norfolk v. Canadian Union of Public Employees, Local 4700 (MacLeod Grievance) [2010] O.L.A.A. No. 183.  I would add that it is only where a clear abuse of process has occurred that an arbitrator should depart from what the parties have agreed to in the collective agreement. I am not satisfied that extraordinary circumstances exist. Further, I do not find that the adjournment request is an abuse of process. 

And, according to Brown and Beatty's leading (and fantastic) text Canadian Labour Arbitration (paragraph 2:1430 Ordering costs):

... even where the cause of the delay and the resultant abortive hearing could be attributed to one party, most arbitrators have expressed the view that they had no authority to order that the costs associated therewith be paid by that party.  One arbitrator, however, ordered costs to be paid where the party had persistently refused to produce relevant documents when ordered to do so,  and another ordered that the employer pay a portion of the union's share of the cost of an arbitration where it was required to take such proceedings to enforce the award.  The costs associated with adjournments made at the request of one party may be awarded as a term of granting the adjournment.  As well, at least one arbitrator has compelled the posting of security, on a motion to adjourn.

So, costs awards are a rare occurrence at labour arbitration.  Leaving aside the fact that arbitrator's are reluctant to award costs, simply making the request and pursuing that request to arbitration can have some practical consequences on the party advancing the argument.  Labour law is about give and take, not just take.  The old adage of "what goes around comes around" comes to mind.

Full post as published by Thoughts from a Management Lawyer on November 05, 2010 (boomark / email).