Reasons for Award Required - Labour arbitration award set aside

The Court of Appeal of Alberta upheld a Queen’s Bench justice’s finding that a labour arbitration must be set aside for having given inadequate reasons: United Food and Commercial Workers, Local 401 v. XL Foods Inc. (Calgary Beef Plant), 2016 ABCA 31.

The issue before the arbitrator was about notice of termination of employment and the application of the Employment Standards Code. The Court of Appeal made the following comments:

  • …consumers of arbitral services expect adjudicators to explain why the opted for the outcomes they settled on.
  • The common law insists that labour arbitrators provide adequate reasons for their decisions.
  • The adjudicator’s decision-making is improved by the discipline associated with the production of written reasons.

The Arbitration Act (not applicable to arbitration under the Labour Relations Code) provides in section 38 that “an award shall be made in writing and … shall state the reasons on which it is based.” Section 36 provides an exemption from that requirement where the parties have settled the dispute and wish to have it reflected in the form of an award.

However, section 3 of the Act permits parties to agree, expressly or by implication, to vary or exclude the provisions of both sections 36 and 38. Agreeing that there will be no reasons for the award almost certainly eliminates any court review (absent bias or fraud) as there is nothing to review.

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