Date: 20250108

File: 566-02-40219

 

Citation: 2025 FPSLREB 2

Federal Public Sector Labour Relations and Employment Board Act and Federal Public Sector Labour Relations Act

Before a panel of the Federal Public Sector Labour Relations and Employment Board

Between

 

Jeanette Cole

Grievor

 

and

 

DEPUTY HEAD

(Correctional Service of Canada)

 

Respondent

Indexed as

Cole v. Deputy Head (Correctional Service of Canada)

In the matter of an individual grievance referred to adjudication

Before: Christopher Rootham, a panel of the Federal Public Sector Labour Relations and Employment Board

For the Grievor: Lauren Barteluk, counsel

For the Respondent: Jena Montgomery and Serin Cho, counsel

Decided on the basis of written submissions,
filed January 23, June 7, August 30, and September 27, 2024.

REASONS FOR DECISION

I. Overview

[1] The Correctional Service of Canada (CSC) dismissed Jeanette Cole from her employment on January 23, 2019. Ms. Cole grieved that decision and referred her grievance to adjudication. She was represented throughout the grievance and adjudication process by her bargaining agent. Shortly before the hearing of this grievance at adjudication, her bargaining agent representative made an offer to settle the grievance to the CSC. The CSC accepted. Ms. Cole says that she did not authorize her bargaining agent representative to make this offer.

[2] The CSC has brought a motion to enforce the settlement agreement.

[3] The issue before me is whether Ms. Cole is bound by the agreement reached between her bargaining agent representative and the CSC. I have concluded that she is because a grievor is bound by any unconditional offer or acceptance communicated by their bargaining agent representative. This means that Ms. Cole is bound by the agreement reached between her bargaining agent representative and the CSC. I have ordered this file closed as a result. My reasons follow.

II. Facts

[4] Ms. Cole began working as a correctional officer with the CSC in June 2009. She was in the bargaining unit represented by the Union of Canadian Correctional Officers - Syndicat des agents correctionnels du Canada - CSN (“the bargaining agent”).

[5] The CSC terminated Ms. Cole’s employment on January 23, 2019. Since describing the reasons for her termination would defeat one of the purposes of the settlement agreement, I will not discuss the underlying facts further. Finally, before my appointment to this file, another Board member conducted a case management conference, during which he issued an order sealing the document setting out the terms of the alleged settlement agreement, so I will not discuss the terms of the settlement agreement either.

[6] Ms. Cole grieved the termination of her employment on January 24, 2019. She referred the grievance to the third and final level of the grievance procedure as soon as the CSC received her grievance on January 28, 2019. Her grievance transmittal form was countersigned by a bargaining agent representative. The CSC did not issue a grievance decision within the time limit to do so, so Ms. Cole referred her grievance to adjudication on March 11, 2019. Her reference to adjudication listed a representative from the bargaining agent as her “authorized representative” who, in addition, sent a cover letter stating this: “… I will act as representatives [sic] in this matter.”

[7] The Federal Public Sector Labour Relations and Employment Board (“the Board”) scheduled Ms. Cole’s grievance to be heard from April 24 to 28, 2023. In February 2023, the bargaining agent assigned a new representative to Ms. Cole. Between February and April 20, 2023, Ms. Cole and her representative discussed her grievance on multiple occasions to prepare for that hearing.

[8] On April 19, 2023, Ms. Cole’s representative made an offer to the CSC to settle the grievance. The CSC accepted it almost immediately. Ms. Cole and her bargaining agent disagree about what led to that offer.

[9] Ms. Cole states that she never instructed her representative to make that offer. She states that she told her representative that she would settle only on different terms that were of greater benefit to her. Ms. Cole also states that she had to review and agree to the final terms of an agreement before agreeing to it.

[10] Ms. Cole’s representative states that on April 19, 2023, Ms. Cole mandated her to offer to settle this grievance in the way she did. Ms. Cole’s representative states that Ms. Cole asked about additional items only after being informed that the CSC had accepted her offer. Her representative agreed to ask the CSC for those additional items, but the CSC unsurprisingly said no. At that point, another representative also became involved. That second representative states that he spoke with Ms. Cole on April 21, 2023, and that Ms. Cole agreed to the terms that were discussed on April 19, 2023, but that she later resiled from that agreement.

[11] The CSC accepted the offer unconditionally. On April 21, 2023, it sent a formal settlement agreement to the bargaining agent representative, who reviewed it and suggested some minor changes to its wording that did not impact its terms. The CSC made changes based on those suggestions and sent over a final copy, which it had signed. There is no evidence that the bargaining agent informed the CSC that Ms. Cole was not interested in the agreement that they had negotiated until May 8, 2023. The bargaining agent signed the terms of settlement on June 12, 2023.

III. Procedure used to resolve the dispute over the existence of a settlement

[12] The Board has the authority to decide matters in writing, according to s. 22 of the Federal Public Sector Labour Relations and Employment Board Act (S.C. 2013, c. 40, s. 365). The Board also has the jurisdiction to decide whether the parties have reached a binding settlement; see Canada (Attorney General) v. Amos, 2011 FCA 38 at para. 35. The CSC has asked that the Board deal with the issue of whether there is an enforceable agreement in writing, and Ms. Cole has not objected to doing so.

[13] Ms. Cole and her two bargaining agent representatives prepared affidavits with their respective versions of events. Their affidavits are diametrically opposed on the crucial issue of whether Ms. Cole instructed her representative to offer to settle this grievance on the terms accepted by the CSC. The discussions between them were all by telephone, and nobody has provided any notes that they took of their discussions.

[14] The CSC submits that I should prefer the evidence of the bargaining agent over that of Ms. Cole. I cannot do so on the basis of the affidavits filed. One of them has not accurately set out what happened on April 19, 2023. I could decide which version is accurate only after the witnesses were cross-examined. Therefore, I cannot resolve this factual issue through a written hearing.

[15] However, there is no dispute that the CSC understood that Ms. Cole’s representative was making an offer on her behalf. This raises the issue of whether she remains bound by the offer made by her bargaining agent representative even if she did not instruct them to do so.

[16] I asked Ms. Cole and the CSC for submissions about that issue, and both of them prepared written submissions about it.

IV. Reasons for concluding there is a valid settlement agreement

[17] The key issue in this case is whether Ms. Cole is bound by the agreement reached by her representative. I have decided that she is. In brief, Ms. Cole’s representative was her agent when making the offer to settle and Ms. Cole is bound by that offer.

[18] My reasons have three parts. First, I explain my conclusion why Ms. Cole’s bargaining agent representative was her agent. Second, I consider two competing lines of authority about an agent’s ability to bind their principal to a settlement. Those two competing lines differ over whether a principal is bound by a settlement reached by their agent when the agent is acting contrary to the principal’s instructions. I will outline the origins of those two lines of authority and give my reasons for adopting the first line that binds a principal to an agreement reached by their agent even when the agent is acting contrary to their instructions. Third, I will explain why I have concluded that the bargaining agent representative in this case had apparent authority to settle this case, despite the fact that the bargaining agent is not a party to Ms. Cole’s grievance and she did not require its permission or representation to proceed with this grievance.

A. The bargaining agent representative was the agent of Ms. Cole

[19] As will be explained later in this decision, the relevant legal rules and case law about whether a person is bound by an agreement reached by their representative are mainly about whether a client is bound by an agreement reached by their lawyer. Ms. Cole did not have a solicitor-client relationship with her representative. Therefore, the first issue is whether the legal rules and case law that apply to lawyers also apply to bargaining agent representatives.

[20] I have concluded that they do. I have reached that conclusion because the fundamental legal principles underlying the rules for lawyers is the law of agency, and Ms. Cole’s representative was her agent.

[21] The relationship between a lawyer and their client has a number of legal bases and has evolved over time. For example, a lawyer and their client are now considered to have a contractual relationship in Canada — although, traditionally in the United Kingdom, a contract existed only between a client and their solicitor and not between a client and the barrister appearing in court on their behalf (see G.H.L. Fridman, “Lawyers as Agents” (1987) 36 UNB LJ 9 at page 10). At the very beginning of the common law, parties were required to appear in court in person on their own behalf, and an attorney was a privilege granted by patent or special authority from the Crown, so that the relationship between a lawyer and their client was regulated purely by public law (see J.F.D., “Attorney and Client”, 14(7) American Law Register 385 (1866)). Lawyers also have a fiduciary relationship with their clients (see Nocton v. Lord Ashburton, [1914] A.C. 932 (U.K. H.L.) at page 952).

[22] However, lawyers are also agents for their clients. As will be seen in the cases discussed later, the ability of a lawyer to bind their client is treated as a question of agency, i.e., the ability of an agent to bind their principal. Therefore, the first issue is whether Ms. Cole’s bargaining agent representative was her agent. If so, the same rules would apply as to lawyers and their clients. If not, different rules would apply.

[23] I note that this issue arises because of the way that labour relations operates in the federal public administration. In most other jurisdictions the “ … parties to a grievance arbitration are normally the parties to the collective agreement, that being the employer and the union … ” (from Palmer & Snyder, Collective Agreement Arbitration in Canada, 7th ed. at 5.69), and an individual grievor cannot proceed to arbitration. When a union withdraws a grievance, the individual grievor cannot refer it to arbitration (see Governing Council of the University of Toronto v. Service Employees Union, Local 204 (1974), 5 L.A.C. (2d) 304; also, when a union settles a grievance, it is binding on the grievor, even when they do not agree with its terms (see Brinks Canada Ltd. v. CAW-Canada, Local 27 (2012), 220 L.A.C. (4th) 200; and Air Canada v. CAW-Canada, Local 2213 (2002), 107 L.A.C. (4th) 250 at page 259). In other words, in most jurisdictions, the present dispute would not arise because the bargaining agent signed the agreement — that would end the dispute.

[24] However, in the federal public administration, the situation is different. Section 208(1) of the Federal Public Sector Labour Relations Act (S.C. 2003, c. 22, s. 2; “the Act”) states that “… an employee is entitled to present an individual grievance …”, and s. 209(1) states that “[a]n employee … may refer to adjudication an individual
grievance …”. As the Board put it succinctly in Renaud v. Canadian Association of Professional Employees, 2009 PSLRB 177 at para. 51, “Under the federal public service labour relations system, a grievance belongs to the grievor, not to that person’s bargaining agent.” This is why it is necessary to consider whether Ms. Cole’s bargaining agent representative was also her agent in this grievance.

[25] I have concluded that Ms. Cole’s representative was also her agent. I say this for four reasons.

[26] First, and most importantly, Ms. Cole does not deny that her representative was her agent. As I said earlier, she denies that her representative had the apparent or ostensible authority to settle her grievance, but she never says that her representative was not her agent.

[27] Second, this relationship meets the three essential requisites of an agency relationship. Those three requisites are: the consent of both the principal and agent, authority given to the agent by the principal, and the principal’s control of the agent’s actions. These last two points usually overlap because the principal’s control over the agent is manifested in the authority given to the agent; see Royal Securities Corporation Ltd. v. Montreal Trust Company, 1966 CanLII 173 (ON SC); and Kinguk Trawl Inc. v. Canada, 2003 FCA 85 at para. 36. In this case, Ms. Cole signed the reference to adjudication naming her bargaining agent as her representative; her bargaining agent’s representative at the time also wrote to the Board, stating this: “… I will act as representatives [sic] in this matter.” Thus, both the agent and principal consented to the agency relationship. In addition, Ms. Cole gave her representative the authority to take steps in the context of this grievance by adding her representative to the referral to adjudication, and she controlled her agent’s actions through that grant of authority and by not rescinding it.

[28] Third, even if the relationship does not meet those three elements, it meets the alternative test for being an agent spelled out in Penderville Apts. Development v. Cressey Development Corp., 1990 CanLII 170 (BC CA) (“Penderville Apartments”). In that case, a dispute arose over whether a solicitor was an agent for the purposes of a real estate transaction. If he was an agent, the opposing party in the lawsuit was entitled to examine him for discovery. One party said that the solicitor was responsible for negotiating an agreement, while he said that he was responsible only for reviewing the technical legal terms of the agreement. The trial judge concluded that the solicitor was not an agent because he did not have the power to negotiate terms for an agreement (i.e., he was just there to provide advice, and everyone knew it). The Court of Appeal overturned the trial judge’s decision, stating at page 15 that even if the solicitor had no power to bind his client (and everyone involved knew that), he was still an agent because “… anyone who does something for another is for that very limited purpose an ‘agent’.” In this case, even if Ms. Cole’s representative did not have the authority to bind her, the representative was still an agent because they were tasked to do something for Ms. Cole – in this case, argue the grievance. Settling the grievance fell within the range of tasks that are sufficiently linked to arguing the grievance to create agency under the Penderville Apartments test.

[29] I acknowledge that some cases have questioned the broad statement in Penderville Apartments and attempted to limit it to the particular issues raised in that case (namely, examination for discovery); however, despite those cases, it continues to be applied in a broad range of settings including determining agency for purposes of access to information law (see Ontario (Education) (Re), 2004 CanLII 56424 (ON IPC)).

[30] Fourth, the actions of the bargaining agent’s representative fall within the scope of the bargaining agent’s duty of fair representation. The duty of fair representation exists as a check on the power of bargaining agents to affect the legal interests of the employees whom they represent (see Canadian Merchant Service Guild v. Gagnon, [1984] 1 SCR 509 at 527). The Board has concluded that the statutory duty of fair representation in s. 187 of the Act extends to the representation of employees in disciplinary grievances despite the fact that employees have the right to represent themselves in such grievances because it is “… reasonable to hold the employee organization to the standards in section 187” in such cases (from Taylor v. Public Service Alliance of Canada, 2015 PSLREB 35 at para. 82).

[31] While the Board did not put it quite this way in Taylor, imposing a duty of fair representation in discipline grievances makes sense only because the bargaining agent has the ability to affect a grievor’s legal interests in such a grievance. Since the duty of fair representation exists because a bargaining agent can affect the legal interests of employees, the scope of issues covered by the duty of fair representation is also the scope of issues over which a bargaining agent can affect an employee’s legal interests. The ability to affect legal interests is the hallmark of agency. The bargaining agent may not have the authority to conclusively determine those interests by refusing to file such a grievance, but it can still affect those interests once it becomes involved.

[32] For these four reasons, I have concluded that the bargaining agent representative was Ms. Cole’s agent in this case.

[33] I acknowledge that the Board came to the opposite conclusion about agency in Ouimet v. Deputy Head (Department of National Defence), 2024 FPSLREB 27. In that case, an employee made a complaint under s. 77(1)(b) of the Public Service Employment Act (S.C. 2003, c. 22, ss. 12, 13). The complainant was represented by his bargaining agent. Shortly before the hearing of that complaint, the employee’s representative sent an email to the Board purporting to withdraw the complaint, and the Board acknowledged that email and stated that it closed its file. Two minutes later, the complainant immediately wrote to the Board to say that he was not withdrawing his complaint and that his bargaining agent refused to represent him. The Board concluded that the bargaining agent representative was not the agent of the complainant and revoked the closure of its file.

[34] That case is distinguishable in five ways. First, in Ouimet there was “no evidence of a contract or express representation agreement” (see paragraph 32) — only the fact that the representative was participating in the complaint up until that point. In this case, by contrast, the representative is listed in the referral to adjudication (which is admittedly similar to Ouimet) and the cover letter to the referral to adjudication confirming the status of the representative. The cover letter emphasized the representation and distinguishes this situation from Ouimet.

[35] Second, the Board did not consider (and was not asked to consider) the agency created by virtue of the representative being asked to represent the complainant, as shown in the Penderville Apartments decision.

[36] Third, complaints made under the Public Service Employment Act fall outside the scope of the duty of fair representation (see Taylor, at para. 78, and the cases cited in that paragraph). There could be no agency in Ouimet as a corollary to a duty of fair representation in that case.

[37] Fourth, Ouimet involved the withdrawal of a complaint, not the settlement of a grievance. In such a case, it is the Board — not the opposing party — that has to take some step in reliance on the apparent authority of the representative (in that case, to close the file). I will explain later why this matters.

[38] Finally — and most importantly — Ms. Cole does not deny that her representative was her agent. In Ouimet, there was no such concession.

[39] For these reasons, Ms. Cole’s representative was her agent. This in turn means that the case law about whether a client is bound by an agreement reached by their lawyer (who is their agent) is relevant to this case too.

B. Two lines of authority about settlement agreements reached by an agent

[40] As I stated earlier, this case is about whether an agreement negotiated by a representative is binding on a grievor. The two extreme answers to that question are discussed in this delightful passage from Linda Vincent, “Compromising Positions - The Unauthorized Settlement of Lawsuits by Lawyers” (1985) 15 Man. L.R. 1 at page 10:

…

Perhaps the best way to illustrate the two possible judicial responses to the central question of this article: to what extent does a lawyer have authority to compromise a suit on his client’s behalf when the client has expressly forbidden it, is to quote remarks of Chancellor Boyd of Ontario. In the earliest Canadian case directly on point, Watt v. Clark, [(1887), 12 P.R. 359 (Ont. Div. CL.)] counsel compromised a case of libel and slander on behalf of the defendant. When he learned of the settlement, the defendant refused to abide by it. In what must be regarded as a model of economy in judicial reasoning, Boyd C. said, “This is a free country, and the defendant has a right to do as he pleases. He must be allowed to have the action tried” and he set aside the consent judgment. Only one year later in Hackett v. Bible [(1888), 12 P.R. 482 (Ont.)] he said, “As between solicitor and client, the former has power to compromise, not only without, but contrary to, the wishes and directions of the latter, so long as the opponent or other person dealt with has not notice of the solicitor’s ostensible authority being limited…”.” In the space of just one year Chancellor Boyd had the opportunity to exhibit the two completely opposed reactions to the problem which are still with us today. It might have been some comfort to know how Boyd C. personally resolved the conflict, but, unfortunately for us, these two pronouncements seem to have exhausted his interest in the topic and we hear no more from him.

…

 

[41] The reasoning has become more sophisticated in the intervening century.

[42] As a general rule, a client (or principal) is bound by an agreement reached by their solicitor (or agent). The debate that remains is over the exceptions to that rule.

[43] The difference between the two approaches that I will go on to assess is best summed up as follows in Lofthaug v. Canadian Immigration Specialists Ltd., 2011 ABQB 609 (a decision affirmed in 2015 ABCA 52) at para. 34:

[34] In my view, the Court of Appeal [in Hrycoy Estate v. Hrycoy Estate, 2004 ABCA 320] has clearly set out the situations in which a settlement agreement will be set aside. These are where there is:

a. mutual mistake and a fresh action could be commenced to achieve the same effect;

b. misapprehension or mistake by the lawyer entering into the agreement, but only if Court intervention is necessary to give effect to the settlement;

c. lawyer settles without authority and the third party is aware of that limited authority (Alken Basin Drilling Ltd v Fraser (1994), 30 CPC (3d) 250 (AB QB), Racz v. District of Mission, [1988] 22 BCLR (2d) 70 (BCCA), or

d. evidence that the lawyer entered into the agreement in defiance of express and specific instructions from the client.

 

[44] The difference between those two lines of authority lies in the fourth exception. The first line of authorities does not admit that exception, while the second does. Whether that fourth exception applies in this jurisdiction is the crux of this case.

[45] Before I move on to address the fourth exception, I want to address the second one. That exception applies when a court needs to take some positive step to implement the agreement. It derives from Neale v. Lennox, [1902] A.C. 465 (U.K. H.L.). In that case, the plaintiff in a slander action instructed her lawyer to agree to refer the action to arbitration in exchange for the defendant disclaiming all implications on her character. Her lawyer reached an agreement to refer the case to arbitration but did not obtain the disclaimer. At the time, a court needed to issue an order referring a case to arbitration. The lower court did so, but the House of Lords set aside the order because it concluded that a court could not be bound by the unauthorized act of a party’s counsel, stating this:

…

… Where the contract is something which the parties are themselves by law competent to agree to, and where the contract has been made, I have nothing to say to the policy of law which prevents that contract being undone: the contract is by law final and conclusive. But when two parties seek as part of their arrangement the intervention of a Court of justice to say that something shall or shall not be done, although one of the parties to it is clearly not consenting to it, but has in the most distinct form said that the consent to refer — to take it from the jurisdiction of the ordinary tribunal — shall only be on certain terms, to say that any learned counsel can so far contradict what his client has said, and act without the authority of his client as to bind the Court itself, is a proposition which I certainly will never assent to.

…

 

[46] I have considered whether this case falls within that exception and have concluded that it does not. The settlement agreement did not require any positive step to be taken by the Board. When a grievor withdraws their grievance, the Board becomes functus officio, which means its job is done and it no longer has the jurisdiction to hear that grievance (see Canada (Attorney General) v. Lebreux, [1994] F.C.J. No. 1711 (C.A.)(QL)), with limited exceptions, such as to resolve a dispute over the terms of a settlement agreement (see Kennedy v. Deputy Head (Department of Citizenship and Immigration), 2023 FPSLREB 118). If the parties’ agreement required the Board to do something, such as issue a consent order, then that exception may apply. However, in this case, the settlement agreement does not require anything from the Board, aside from deciding this motion. Therefore, that exception does not apply in this case.

[47] For clarity, there is no question that the first and third exceptions do not apply to this case. There was no mutual mistake made by the grievor’s representative and the employer’s counsel — the bargaining agent and employer both state clearly that they knew what they were agreeing to. There is also no suggestion that the employer’s counsel knew about any limits on the authority of the grievor’s representative to settle this matter. The grievor instead argues that the nature of this case means that there are automatically or always such limits; I will return to that argument later.

[48] Returning to the fourth exception, as I have already stated there are two lines of authority in Canada. The first says that a principal is bound by a settlement reached by their agent even if they did not authorize their agent to make that settlement. The second says that the principal is not bound to an agreement reached by their agent when the agent is acting contrary to their instructions.

[49] I prefer and will follow the first. My reasons are as follows.

[50] The first line of Canadian authorities derives from Scherer v. Paletta, 1966 CanLII 286 (ON CA). That case involved a motor vehicle accident. The defendant by counterclaim offered to settle the action for $15 000. The plaintiff by counterclaim and his lawyer had different versions of what happened next (much like this case). The plaintiff said that he rejected the $15 000 and that he instructed his lawyer to try to obtain a better offer, which would be subject to his approval or objection. The plaintiff’s lawyer said that the plaintiff told him to try to get more money but that he would accept the $15 000. The lawyer offered to settle the case for $17 500 plus $2000 for costs, and the defendant accepted. When the plaintiff tried to go ahead with the trial, the defendant moved to enforce the settlement.

[51] The Ontario Court of Appeal enforced the settlement without resolving the factual dispute between the plaintiff and his lawyer and stated this:

…

The question for determination is whether the defendant is entitled to enforce by way of a judgment the settlement agreed to by counsel for the plaintiff, in view of the dispute as to the limitation of the retainer of which he was unaware. The issue as to whether the retainer was or was not qualified is not before this Court for consideration.

Bowstead on Agency, 12th ed., pp. 65-6, reviews the scope of the implied authority of a solicitor and counsel and states that the relationship of a solicitor to his client is in general one of agent to principal.

The authority of a solicitor arises from his retainer and as far as his client is concerned it is confined to transacting the business to which the retainer extends and is subject to the restrictions set out in the retainer. The same situation, however, does not exist with respect to others with whom the solicitor may deal. The authority of a solicitor to compromise may be implied from a retainer to conduct litigation unless a limitation of authority is communicated to the opposite party. A client, having retained a solicitor in a particular matter, holds that solicitor out as his agent to conduct the matter in which the solicitor is retained. In general, the solicitor is the client’s authorized agent in all matters that may reasonably be expected to arise for decision in the particular proceedings for which he has been retained. Where a principal gives an agent general authority to conduct any business on his behalf, he is bound as regards third persons by every act done by the agent which is incidental to the ordinary course of such business or which falls within the apparent scope of the agent’s authority. As between principal and agent, the authority may be limited by agreement or special instructions but as regards third parties the authority which the agent has is that which he is reasonably believed to have, having regard to all the circumstances, and which is reasonably to be gathered from the nature of his employment and duties. The scope of authority is, therefore, largely governed by the class of agent employed provided that he is acting within the limit of his ordinary avocation or by relation of the agent to the principal or by the customs of the particular trade or profession.

A solicitor whose retainer is established in the particular proceedings may bind his client by a compromise of these proceedings unless his client has limited his authority and the opposing side has knowledge of the limitation, subject always to the discretionary power of the Court, if its intervention by the making of an order is required, to inquire into the circumstances and grant or withhold its intervention if it sees fit; and, subject also to the disability of the client. It follows accordingly, that while a solicitor or counsel may have apparent authority to bind and contract his client to a particular compromise, neither solicitor nor counsel have power to bind the Court to act in a particular way, so that, if the compromise is one that involves the Court in making an order, the want of authority may be brought to the notice of the Court at any time before the grant of its intervention is perfected and the Court may refuse to permit the order to be perfected. If, however, the parties are of full age and capacity, the Court, in practice, where there is no dispute as to the fact that a retainer exists, and no dispute as to the terms agreed upon between the solicitors, does not embark upon any inquiry as to the limitation of authority imposed by the client upon the solicitor.

…

 

[52] Courts in Ontario have fairly consistently followed Scherer and stated that it is well-established law that a solicitor has the ostensible authority to bind their clients and that opposing counsel is entitled to rely on that authority in the absence of notice or some indication to the contrary; see Dick v. McKinnon, 2014 ONCA 784 at para. 4, and Oliveira v. Tarjay Investments Inc., 2006 CanLII 8870 (ON CA) at para. 2, among others. Courts in other jurisdictions have also followed this approach; see Cosper v. Cosper, 1995 NSCA 122, and Gray v. R., 2004 CanLII 47133 (NB CA), for two examples.

[53] The second line of authority agrees that generally, a solicitor may bind their client to an agreement; however, this second line of authorities states that the agreement does not bind the client when the lawyer entered into the agreement in defiance of express instructions from the client. This second line of authority derives from Yannacopoulos v. Maple Leaf Milling Co. Ltd., 1962 CanLII 458 (BC SC). That case was another motor vehicle accident. The lawyers for the two parties agreed to settle the claim and counterclaim for $1850 (which was half the value of the claim). The problem was about a counterclaim. The defendant instructed their lawyer to settle the claim 50-50 but not to abandon the counterclaim. The British Columbia Supreme Court quoted from Shepherd v. Robinson, [1919] 1 K.B. 474 to the effect that “… the Court ‘will not lend its authority to compel observance of an agreement arrived at through a mistake’.” Courts in British Columbia (see, for example, Hawitt v. Campbell, 1983 CanLII 307 (BC CA), and Baldissera v. Wing, 2000 BCSC 1788 at para. 31) and Alberta (see, for example, W.C. v. D.C., 1986 ABCA 116) have tended to follow this approach, although other Alberta appellate decisions distinguish between a mistake and defiance of express instructions, finding that a settlement reached through a lawyer’s mistake is enforceable but that one reached after express instructions to the contrary is not (see Correia v. Danyluk, 2001 ABCA 148).

[54] Therefore, I must decide whether there is an exception to the general rule that a grievor is bound by the settlement reached by their agent and representative when that representative enters into the agreement in defiance of express instructions from the grievor, which is what Ms. Cole alleges in this case. In other words, I must select between the first and second lines of authority that I spelled out earlier.

[55] I have chosen the first line of authority. I have done so for two reasons.

[56] First, I agree with the Manitoba Court of Appeal in Pearson v. Plester, 1989 CanLII 5189 (MB CA), when it stated explicitly that it preferred the first line of authority to the second. It did so because it concluded that Yannacopoulos actually involved the second exception.

[57] To explain, many jurisdictions distinguish between discontinuing a proceeding and a court order dismissing the proceeding in that a discontinuance does not trigger the bar against re-litigation, while a court order may do so; see Philipos v. Canada (Attorney General), 2016 FCA 79 at paras. 13 and 19, and DLC Holdings Corp. v. Payne, 2021 BCCA 31 at para. 45, for discussions about the difference between a discontinuance and a court order dismissing a proceeding. I do not propose to examine this difference in detail. My point is just to provide context for why many settlements in other jurisdictions contain a provision stating that the parties will consent to the court issuing an order dismissing an action with prejudice.

[58] Yannacopoulos was just such a case. The agreement in that case included a provision that the parties would enter a consent judgment dismissing the action. While the Court expressed its reasons for not enforcing the settlement by focussing on the lawyer entering into the agreement in the face of instructions to the contrary, in actual fact, the Court was applying the second exception because it had to take some positive step in the settlement. In other words, the situation was like that in Neale.

[59] While the Manitoba Court of Appeal examined only Yannacopoulos, I agree with it that a careful review of many cases purporting to apply the fourth exception actually apply the second one. I note for example that in Dickson v. Poon Estate, 1982 ABCA 112, the Alberta court of appeal also confined Yannacopoulos to situations in which the intervention of the court was required — which it was not in that case, because at most, there would be a discontinuance and not a consent order. To be clear, there are plenty of cases applying Yannacopoulos that do not include a consent order or other court intervention. However, I share the concern of the Manitoba Court of Appeal in Pearson that those cases have overstated the exception provided for in Yannacopoulos.

[60] Second, the first line of authority fits better within the specialized labour relations regime regulated by the Board. The practical consequences of applying the second line of authority would be that employers and bargaining agents would not reach agreements without first insisting on confirmation (likely in writing) directly from their principals confirming that their representative has permission to make or accept the particular offer being discussed. Doing so is antithetical to negotiations in an effective and collaborative labour relations system.

[61] The Act’s preamble states that its purposes include the “… efficient resolution of matters arising in respect of terms and conditions of employment …” and that
“… commitment from the employer and bargaining agents to mutual respect and harmonious labour-management relations is essential to a productive and effective public service …”. Requiring representatives to provide proof that their principals have authorized a particular offer or acceptance would detract from the efficient resolution of matters. It is also disrespectful, as it implies a lack of trust in the opposing representative that they have done their job properly.

[62] Parliament could have given the Board a role in assessing the fairness or probity of settlements reached to resolve disputes. Parliament and provincial legislators have done so in human rights legislation in particular. For example, the British Columbia Human Rights Tribunal used that statutory authority in LaFayette v. Municipality of Saanich Police Department, 2024 BCHRT 222, to allow a complaint to continue despite a settlement reached between the complainant’s counsel and the respondent. The tribunal exercised its statutory jurisdiction to decide whether “it would be unjust” not to hear the complaint despite the settlement agreement and in weighing its decision relied in part on the fact that the complainant’s lawyer appeared to have settled the matter without the complainant’s instructions to do so. The Board has no similar jurisdiction to approve or disapprove of the terms of a settlement agreement.

[63] For these reasons, I have concluded that an employee is bound by settlements reached between their bargaining agent representative and the employer even when the employee has expressly instructed their representative not to offer or accept that settlement. This is what Ms. Cole says happened. She remains bound by her representative’s offer to the employer even if she did, in fact, instruct them not to make it.

C. There was apparent authority to settle in this case

[64] Ms. Cole’s main argument is that the employer knew or ought to have known that her representative did not have the authority to settle this case because her grievance was referred to adjudication under s. 209(1)(b) of the Act. Ms. Cole correctly points out that a grievance referred to adjudication under s. 209(1)(b) “… does not belong to the bargaining agent” [emphasis in the original]. This means that a grievor must consent to any settlement of a grievance. I agree with that. I also agree with Ms. Cole that this is the correct reading of Renaud.

[65] Ms. Cole argues that this principle means that the employer should have understood the limits of a bargaining agent’s authority to settle a discipline case. I agree with that too. However, that does not answer the issue raised in this case. The issue is not whether Ms. Cole’s bargaining agent has the power to settle her grievance without her consent. It does not, and nobody suggests otherwise. The issue is whether Ms. Cole’s representative had the apparent authority to settle her grievance. Ms. Cole’s reference to adjudication states that she will be represented by her bargaining agent. Her bargaining agent assigned someone to represent her. Unless it is given specific notice to the contrary, an employer will reasonably believe or understand that the representative is speaking for the grievor.

[66] Section 212 of the Act also undermines Ms. Cole’s argument that an employer cannot rely on the apparent authority of a bargaining agent to settle a grievance. Section 212 permits an employee in a bargaining unit without a bargaining agent to be represented by an employee organization. This representation can be made in a grievance referred to adjudication under s. 209(1)(b) of the Act. The authority of that representative does not flow from the employee being in a bargaining unit represented by a bargaining agent but instead flows from the employee’s express wish to be represented. Therefore, the Act contemplates that there is representation occurring in a grievance referred to adjudication under s. 209(1)(b) separate and apart from whether the employee organization is a bargaining agent or the matter falls within the ambit of a collective agreement. In other words, in this statutory regime, representation in a grievance by an employee organization is not limited to cases where the employee organization represents someone in their bargaining unit.

[67] In other words, the Act contemplates that a representative is not a representative because they are a bargaining agent for grievances referred to adjudication under s. 209(1)(b) of the Act.

[68] In short, the fact that a grievor has the right to control a grievance filed under s. 209(1)(b) of the Act does not mean that employers should not assume that the grievor’s bargaining agent representative is speaking for the grievor when negotiating with the employer. Undermining this assumption requires specific notice.

[69] Such notice is easy to do and is common. A representative may say that they are making an offer without instructions in an effort to come to a solution that both representatives would recommend to their principals. A representative may also say that they accept an offer subject to ratification by their principal. There may also be an understanding between a bargaining agent and employer that all agreements reached between representatives are subject to ratification by their principals. No such understanding is alleged in this case; nor did Ms. Cole’s representative expressly give notice to the employer of any limits on their ability to make the offer.

[70] When I asked both parties to provide submissions on the issue of apparent authority, I drew their attention to Lovic v. Faculty Association of the University of Calgary, 2023 CanLII 6169. In that case, the Alberta Labour Relations Board heard a duty-of-fair-representation complaint in which a complainant argued that he did not consent to an agreement reached by his bargaining agent in a grievance. The Alberta board concluded that there was a binding settlement, in part because it found the complainant’s testimony that he never agreed to the settlement not credible. Additionally, that was a jurisdiction in which the bargaining agent could settle the grievance without the permission of the grievor.

[71] I agree with Ms. Cole that Lovic is not directly on point because of that difference. However, the Alberta board pointed out that certain items of any settlement require a grievor’s consent, such as a release, because a union cannot promise that its member will not commence some other proceeding. For those items, the Alberta board concluded (at paragraph 87) that the employer understood that the union representative was also negotiating for the grievor. In other words, the representative had apparent authority. Although the Alberta board concluded that the representative had actual authority too, I also agree with its conclusion that a representative has the apparent or ostensible authority to negotiate on behalf of a grievor even if the settlement requires the grievor’s consent.

[72] Finally, Ms. Cole relies on Fontaine v. Robertson, 2021 FPSLREB 19. That case was a duty-of-fair-representation complaint. The complainant had filed a grievance alleging a breach of the collective agreement. His bargaining agent accepted a counteroffer made by the employer to resolve the grievance. The Board pointed out that grievances in this jurisdiction are held by individual grievors and, therefore, “… only the employee can accept a settlement offer from the employer …”, and the bargaining agent “… could not accept the employer’s counteroffer on the complainant’s
behalf …”.

[73] However, that case was not about whether the agreement was binding between the employer and the complainant; that case was only about whether the bargaining agent breached its duty of fair representation by settling the case without his permission. The Board concluded that it did. That does not mean that the settlement agreement that it negotiated on the complainant’s behalf was invalid, only that the complainant had a claim against the bargaining agent.

[74] If Ms. Cole never instructed her representative to offer to settle her grievance on the terms that it did, then her recourse is a duty-of-fair-representation complaint. She has made such a complaint. Her recourse, if any, is there.

[75] Ms. Cole argues that she should not have to pursue such a complaint because it would simply “add another layer to this process”. Ms. Cole appears to assume that the only order the Board could make to remedy her duty of fair representation complaint is to order her grievance to be heard. On the contrary, the Board has wide remedial power to “… make any order that it considers necessary in the circumstances against the party complained of …” in s. 192(1) of the Act. It is true that the Board could not reinstate her to her employment in a duty-of-fair-representation complaint; however, it could order a remedy that fully compensates her for the loss of any right to reinstatement. I would only be speculating at this point about what remedy, if any, the Board would order in such a complaint; however, my point is that a duty-of-fair-representation complaint does not just “add another layer to this process” but, instead, could provide an adequate remedy to Ms. Cole.

[76] In conclusion, the bargaining agent representative had the apparent authority to bind Ms. Cole in settling her grievance. Therefore, Ms. Cole is bound by the settlement reached between her representative and the CSC.

[77] Finally, Ms. Cole’s submissions refer, on several occasions, to the fact that she did not sign the settlement agreement. Signing an agreement is not a necessary condition to entering into one. As pointed out in Ontario Public Service Employees Union v Crown in Right of Ontario, 2013 CanLII 74176 (ON GSB) at paragraph 33, “[s]ignatures on a document are usually conclusive that an agreement has been reached, but a binding agreement does not necessarily depend on the presence of signatures.”

V. Remedy

[78] The employer seeks two orders: a declaration that the terms of settlement are valid and enforceable, and an order that Ms. Cole sign the terms of settlement and an annex it attached to implement them. The CSC provided no submissions in support of either specific remedy. Ms. Cole provided no submissions about the appropriate remedy either.

[79] I have decided not to grant those two remedies.

[80] Declarations are discretionary remedies (see Ewert v. Canada, 2018 SCC 30 at para. 83). I have decided not to grant a declaration in this case because I see no labour relations purpose or practical benefit to the parties to be served by one. Further, any declaration about the validity of the settlement may impact the outcome of Ms. Cole’s duty-of-fair-representation complaint against her bargaining agent, which is not my intention. The reasons provided for in this decision will suffice to resolve this dispute, without the need for a declaration.

[81] The CSC has also provided no submissions that would support the Board’s jurisdiction to force a grievor to sign a document. The Board can issue orders that parties comply with an agreement, but it cannot order someone to sign it.

[82] Instead, I make two orders. First, I order that the CSC implement its part of the terms of settlement and provide Ms. Cole with all the benefits that accrue to her under the terms of settlement. I do not want to spell them out, to preserve the confidentiality of that settlement. I also have no evidence about whether the CSC has already implemented part or all of the agreement.

[83] Second, I will issue an order deeming the grievance to have been withdrawn. This will end Ms. Cole’s dispute with the CSC. Ms. Cole still has her dispute with her bargaining agent.

[84] For all of the above reasons, the Board makes the following order:

(The Order appears on the next page)

 

VI. Order

[85] The CSC will implement the terms set out in the terms of settlement that it signed in this grievance.

[86] The grievance is deemed withdrawn.

January 8, 2025.

Christopher Rootham,

a panel of the Federal Public Sector

Labour Relations and Employment Board