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Labour - Remedial LRA Exclusivity (Weber) - Exception: 'Essential Character'. Knauth v. The Independent Electricity System Operator et al.
In Knauth v. The Independent Electricity System Operator et al. (Ont Div Ct, 2026) the Ontario Divisional Court dismisses a labour JR, this brought against an arbitrator's ruling that the applicant had "violated the terms of a Termination Agreement (the “Agreement”) with her former employer" that prohibited her "from commencing claims against the employer related to her termination".
Here the court considers an arbitrator's jurisdiction (in light of Weber) over enforcing an employee's termination settlement, and over Ontario HRC issues [under LRA s.48(12)j()]:[33] The Arbitrator had exclusive jurisdiction to enforce the Agreement. As set out by the Supreme Court of Canada in Weber, an arbitrator has exclusive jurisdiction when the dispute, in its essential character, arises from the interpretation, application, administration, or alleged violation of the collective agreement. Section 48(1) of the LRA requires that every collective agreement provide for the final and binding settlement of all differences between the parties to a collective agreement. An arbitrator also has the power to interpret and apply human rights and other employment related statutes, despite any conflict between those statutes and the terms of the collective agreement (ss.48(12)(j) of the LRA). . McCoy v. Choi
In McCoy v. Choi (Ont CA, 2022) the Court of Appeal considered an understandable exception to the Weber doctrine:[24] An arbitrator must adjudicate any dispute arising, expressly or implicitly, from a collective agreement which contains an exclusive arbitration clause such as the one at issue in this appeal: Weber v. Ontario Hydro, 1995 CanLII 108 (SCC), [1995] 2 S.C.R. 929, at para. 54. In such cases, a court’s jurisdiction is limited to granting remedies that lie outside the authority of the arbitrator: Northern Regional Health Authority v. Horrocks, 2021 SCC 42, 462 D.L.R. (4th) 585, at para. 23.
[25] A dispute arises from a collective agreement when its “essential character” concerns a subject matter within the ambit of the collective agreement: Regina Police Assn. Inc. v. Regina (City) Board of Police Commissioners, 2000 SCC 14, [2000] 1 S.C.R. 360, at para. 25.
[26] The inquiry into “essential character” is factual. It is directed at whether the dispute is factually related to the rights and obligations in the collective agreement, not at the legal character the dispute has taken; for instance, as an action in tort: Weber, at para. 43; Horrocks, at para. 20.
[27] The question for this court is whether the dispute arises from the Collective Agreement. In my view, the dispute in this appeal is not factually related to the rights and obligations in the collective agreement. It does not arise from the Collective Agreement and therefore it is not within the exclusive jurisdiction of an arbitrator.
[28] In essence, this is a dispute over a misdiagnosis of an injury by an outside physician who was not affiliated with the Redblacks, which injury was treated in accordance with the misdiagnosis, which allegedly caused damages.
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