The Cape Breton Regional Municipality and the union representing its fire service are headed back to an arbitration board to settle a dispute over staff levels.

The move comes as a result of a ruling by the Nova Scotia Court of Appeal that overturned a judge's decision and a ruling by a previous arbitration board in response to a grievance first filed by the union in 2013.

At issue is whether the municipality is violating the collective agreement by not maintaining a certain staffing complement on shifts even after having closed a fire station.

In 2009, the Ashby Fire Station in Sydney was closed, its employees redistributed to other stations. But the minimum staffing complement of 10 people per shift was not maintained following the closure, resulting in a grievance by the union.

Board finds in union's favour

In 2013, an arbitration board upheld the grievance, finding that while the municipality had the power to close a fire station, it did not have the ability to reduce the number of firefighters on a given shift.

When the municipality continued with the reduced staff level, the union filed a subsequent grievance in 2014 for the continued violation.

But a second arbitration board dismissed the grievance, saying it did not have jurisdiction, that the employer's actions couldn't be interpreted as a continuing breach and that to consider action would amount to second-guessing the earlier arbitration board's decision.

A subsequent judicial review upheld the decision.

Board 'fundamentally misunderstood'

But in a ruling released Friday, the court of appeal set aside the judge's decision and the second arbitration board's ruling, ordering a rehearing of the grievance.

Writing for the court of appeal, Judge J.A. Farrar, called the second arbitration board's ruling "unreasonable" and said it "fundamentally misunderstood the nature of the grievance it had before them.

"The union was arguing that the failure to properly staff the fire stations, after the [first board's decision], amounted to a continuing or new breach of the collective agreement which justified further sanctions against the municipality.

[The second board]

never addressed whether the municipality's continued failure to staff in accordance with the collective agreement represented a new or continuing breach of the collective agreement and whether it warranted further sanctions, including a compliance order."

Costs awarded

Farrar wrote that in upholding the second arbitration board's decision, the application judge just made the same error.

In ordering the rehearing, the court of appeal also awarded the union $3,000, for legal costs. It also ordered that the union is repaid for costs it was ordered to pay in previous judgements.