Public Service Alliance of Canada v. Attorney General, 2004 FC 1739

Date: 20041214

Docket: T-104-04

Citation: 2004 FC 1739

BETWEEN:

                                       PUBLIC SERVICE ALLIANCE OF CANADA

                                                           and CATHY MURPHY

                                                                                                                                           Applicants

                                                                           and

                                             ATTORNEY GENERAL OF CANADA

                                                                                                                                        Respondent

                                                        REASONS FOR ORDER

MacKAY D.J.:

[1]                This is an application for judicial review of an undated decision of the Canadian Human Rights Commission, received by the applicants on December 18, 2003, whereby the Commission decided, pursuant to paragraph 41(1)(c) of the Canadian Human Rights Act, R.S.C. 1985, c. H-6, as amended, (the "Act"), not to deal with the complaint of the applicants.

[2]                The complaint alleged that the respondents, then named as Canada Customs and Revenue Agency, the Minister of National Revenue, and the Commissioner of Customs and Revenue, had engaged in discriminatory practices by taxing lump-sum payments made to the applicant Ms. Murphy and numerous others represented by the Public Service Alliance of Canada (PSAC), made as a result of a pay equity settlement resolved after a Canadian Human Rights Tribunal had upheld a complaint of discriminatory practice by Treasury Board in paying less to women employees than to men engaged in the same work. The complaints ultimately related to payments made in the years 1985 to 1999, when the settlement was completed. Payments under the settlement were made in 2000.

[3]                The payments made to individuals varied by years of service. Recipients were permitted to claim those for income tax purposes either as receipts in the year 2000, which resulted in higher taxes on those payments than otherwise might have been due, or by amendment to the Income Tax Act in 1999 recipients could allocate portions of the lump-sum payment to previous income tax years. In the latter case the allocated amounts would be taxed at the previous years' applicable notional tax rates, but taxes so payable were subject to compound interest rates until the date of payment. It is said that in virtually all cases the second method, allocating payments to the previous years, resulted in less net income for the recipients. Whatever the method of tax, it is clear that the recipients ultimately had less pay, net of taxes, than their male counterparts in similar work who had received pay from year to year and who paid annual tax without interest, or without higher marginal tax rates applicable if the payments were taken in a lump sum in 2000.

[4]                The complaint of the applicants was filed with the Commission on March 11, 2002 and on March 28 those named as respondents were asked to respond to the complaint. The file was assigned to an investigator on May 2, 2002. The response by the respondents was received in December 2002 and rebuttal to that defence was received in March 2003. On May 23 the investigator for the Commission signed a report noting that the complaint concerned sections 5, 7 and 11 of the Act, and reviewing the submissions of the parties. The report without further investigation or analysis, recommended that the Commission not deal with the complaints pursuant to paragraph 41(1)(c) of the Act because the facts as alleged by the complainants would not constitute a discriminatory practice.

[5]                That report was disclosed to the parties and written submissions were received from both of them concerning the investigator's report, and concerning written submissions made by the other party. No issue was raised about the process followed by the Commission in terms of fairness of the process, at least concerning the opportunity to comment in advance of the Commission's decision.

[6]                The Commission had before it at the time of its decision the investigator's report and the written submissions of the parties. The decision of the Commission, as communicated to Ms. Murphy noted that

"[...] the Commission decided, pursuant to paragraph 41 (1)(c) of the Canadian Human Rights Act, not to deal with the complaint because:

                ·               the facts as alleged by the complainant, in particular, the fact that compound interest is charged pursuant to the ITA [i.e. the Income Tax Act], would not constitute a discriminatory practice.

[7]                The "investigation" conducted on behalf of the Commission, after the filing of the complaint, consisted of considering the written submissions made to the complaint by the respondents named and the response to those submissions by the complainants. On this basis the investigator's report was prepared, circulated to the parties and each had an opportunity to comment in writing. The report and the written submissions were then presented to the Commission. There was no further or other investigation.

[8]                In the investigator's report references were made to the respondents' submissions that the matter was beyond the jurisdiction of the Commission under paragraph 41(1)(c) and to the submissions of the complainants to the contrary. The report also includes some brief reference to other processes whereby the complainants might have proceeded with their concerns other than by filing a complaint under the Act, yet there is no suggestion that the latter was the basis for the Commission's decision and there is no explanation, by the Commission in its decision, or by any analysis in the investigator's report, of the conclusion that was framed in terms of the Act about the lack of jurisdiction under paragraph 41(1)(c), but reasons for the conclusion were not spelled out.

[9]                In the normal case where the Commission decision relies on a report of an investigator and it adopts the conclusion of the investigator without further explanation or reasons, the reasons of the investigator then are deemed to be those of the Commission. In this case no reasons are given by the Commission aside from its conclusion, and no reasons are given by the investigator which would support her conclusion.

[10]            The Commission's conclusion, without reasons, in my opinion does not meet the spirit or the letter of subsection 42(1) which specifies, subject to an exception not here applicable,

[11]            In my view the circumstances in this case are akin to those in Kidd v. Toronto Greater Airports Authority, 2004 FC 683 (T.D.), where Mr. Justice Mosley of this Court found a reviewable error of law where the Commission failed to meet the minimal threshhold of adequacy, as established by the common law principles of procedural fairness and by the requirements of subsection 42(1) of the Act. That error warrants intervention of this Court.

[12]            I note that in the hearing of this matter the complainants raised several issues relating to the possible basis for finding no jurisdiction, contesting that those possible bases were not supportable in light of the jurisprudence. In the circumstances here I decline to deal with those issues since to do so would be to speculate about the possible reasons for the Commission's decision. It is for the Commission to articulate those, not for the Court to speculate on what they may have been, or what may have been the reasons for the investigator's conclusion which was accepted by the Commission.

[13]            I would deal briefly with some of the issues raised on behalf of the respondent.

            1)         First, the respondent urged that the Attorney General of Canada is the proper respondent to this proceeding, pursuant to Rule 302 of the Federal Court Rules, 1998. Counsel for the applicants did not object and the Court ordered that henceforth these proceedings would include only the Attorney General of Canada as respondent. A separate Order to that effect was issued following the hearing.

            2)         The standard of review in the view of the respondent is reasonableness and in the view of the complainants, the appropriate standard is correctness. Since the issue here concerns jurisdiction and since I do not deal with the merits of the application except on the issue of fairness because of the absence of reasons as required by the Act, a matter of law, the only standard of significance here is correctnesss. In my view the Commission erred by failing to follow the law.

            3)         Taxation by CCRA, one of the named respondents, is said not to be a service under the Act, an issue I need not resolve at this stage.

            4)         It is said the CCRA can only implement legislation as it stands and it was bound to implement the Income Tax Act and Regulations concerning interest rates. Without finally resolving the issue, this seems to me somewhat of an over-simplification for CCRA is bound as are all others who apply federal statutes to do so in a manner consistent with the Human Rights Act.

            5)         The respondent says no discriminatory practice was attributable to the CCRA under section 7 of the Act, a matter which need not be resolved for purposes of this decision.

[14]            For the reasons set out an Order goes allowing the application for judicial review, remitting the matter for consideration by the Human Rights Commission with, presumably, the Attorney General of Canada representing the interests of all elements of the Government of Canada involved in this matter.

[15]            As a gratuitous comment, I would urge that those concerned, after spending years in resolving pay equity complaints and seeking to do so equitably, should review the process that the complainants here perceive as continuing inequity in payment that was intended to be addressed earlier. The basis of the complaint here is that the application of income tax interest is seen to result in inequitable payments, leaving the promise of equal pay for work of equal value unfulfilled.

[16]            An Order goes allowing the application for judicial review, setting aside the impugned decision of the Commission and referring the complaint of the applicants to the Commission for reconsideration, with costs as requested by the applicants.

                                                                       "W. Andrew MacKay"

D.J.F.C.

Ottawa, Ontario.

December 14, 2004

                                     FEDERAL COURT

   NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                 T-104-04

STYLE OF CAUSE:                                     Public Service Alliance of Canada and Cathy Murphy

and

The Attorney General of Canada

PLACE OF HEARING:                                Ottawa, Ontario

DATE OF HEARING:                                   December 9, 2004

REASONS FOR ORDER

AND ORDEROF    THE HONOURABLE MR. JUSTICE W. ANDREW MACKAY

DATED:                    December 14, 2004

APPEARANCES:

Mr. David Yazbeck                                         FOR THE APPLICANTS

Ms. Sonia Barrette                                         FOR THE RESPONDENT

SOLICITORS OF RECORD:

Raven, Allen, Cameron

Ballantyne & Yazbeck

Ottawa, Ontario                                              FOR THE APPLICANTS

Mr. Morris Rosenberg

Deputy Attorney General of Canada

Department of Justice

Ottawa, Ontario

K1A 0H8                                                         FOR THE RESPONDENT