[1] On May 8, 2003, the applicants filed a joint grievance regarding the termination of their work as facilitators of the sex offender rehabilitation program provided at Grande Cache Institution ("GCI"), a federal penitentiary operated by the Correctional Service of Canada ("CSC"). That same day, Linnea Breden, Chief, Human Resources at GCI, replied GCI would be unable to process their grievance. She deposes:

Your services were rendered under a Personal Service contract which is being terminated as of May 9, 2003. As previously explained, you are not deemed to be an employee of the Correctional Service of Canada under the Public Service Employment Act. You are not a member of a collective bargaining unit, therefore the grievance process cannot be applied. [emphasis mine]

[2] The applicants seek judicial review of Ms. Breden's decision. They say they are employees of the Public Service and, as such, they are entitled to the full grievance rights and procedure under the Public Service Staff Relations Act (the "PSSRA") particularly sections 91 and 92. The applicants seek to quash Ms. Breden's decision rejecting the applicants' grievance.

[3] This application has two issues. The first is a preliminary one raised by counsel for the respondent which is whether this Court has jurisdiction or, if it has, should decline it, because the PSSRA prescribes an internal grievance process for the resolution of disputes which must be followed before engaging judicial review. The second issue is the substantive one raised by the applicants and that is whether they are employees of the Public Service entitled to grieve.

[4] At first blush, the respondent's position would seem incongruous maintaining on the one hand the applicants must follow the internal grievance process to and including the final level yet substantively maintaining they are not employees of the Public Service, a condition precedent to the grievance process in the PSSRA. As will be seen, such is not the case.

[5] The material facts can be briefly summarized by reference to the affidavit of Tanya Estwick which covered both applicants whose hiring and work history at GCI were basically identical.

[6] She answered a job advertisement in the Grande Cache Mountaineer for the position of a delivery facilitator of the sex offender program at GCI. She was interviewed later that month by a panel of three members all of whom were employed at GCI. She was successful and was hired on a contractual basis.

[7] Her first contract was for three months - from January 1, 2001 to March 31, 2001. She states she was supervised by the Chief of Psychology at GCI and when the three-month contract expired, he instructed her to continue working until a new contract was drafted.

[8] The first and subsequent contracts contained a clause which said Ms. Estwick was not engaged as an employee but rather as an independent contractor for the sole purpose of providing a service.

[9] Her second contract ran from July 1, 2001 to July 2, 2002 with her third spanning from July 2, 2002, to July 1, 2003.

[10] The contract provides she is paid a fee per hour for services rendered, with monthly and yearly maximums. There is no provision for benefits, sick time, vacation or statutory holidays. She submitted an invoice twice per month for payment. She was paid at the same rate as the regular wages received by other program delivery officers who were indeterminate employees.

[11] The 2002-2003 contract presented to her by GCI was different in that it stipulated GST should be applied to her invoices. Both applicants applied for GST numbers in July 2002 but were informed by Brenda Woo of the Canada Customs and Revenue Agency ("CCRA"), their application for a GST number and their contract would be investigated by CCRA.

[12] On December 4, 2002, Ms. Estwick was notified by Ms. Woo, CCRA had determined an employment contract had been established between herself and GCI and that she had been deemed an employee under a contract of service, not under a contract for services. The CCRA concluded she had been an employee from January 1, 2001 until December 3, 2002, and GCI was required to deduct employment insurance ("EI") and Canada Pension Plan ("CPP") premiums from her pay. GCI was instructed to provide her with a T4 slip. CCRA's ruling could have been appealed within ninety (90) days but was not.

[13] At a meeting held on February 4, 2003, at which the applicants and representatives of GCI were present, an auditor for the CCRA advised both applicants they were not contract staff but in fact were employees of the Federal Government of Canada and had been since 2001. He handed both applicants T4 slips and stated their contract for service were "null and void". He also advised their GST numbers were cancelled.

[14] In her affidavit, Ms. Estwick states GCI ignored CCRA's ruling and terminated her employment. She points to a letter dated April 7, 2003, from the Warden of GCI which referenced CCRA's ruling. The last three paragraphs of that letter read:

CCRA's ruling stated you were and remain "an employee under a contract of service". They did not require your appointment under the Public Service Employment Act (PSEA). They stated we are to treat your remuneration as if you were an employee and remit amounts as determined by the Canada Pension Plan and Employment Insurance Act.

In order to be considered an "employee" in the Federal Public Service an individual must be appointed under the PSEA. In your case that has not and will not occur. We will continue paying amounts to you based on the contract and remit amounts to CCRA regarding CPP and EI on your behalf.

Once the current Sex Offender Treatment Program being delivered by you has been completed Grande Cache Institution will no longer require your services and your time at GCI will come to an end. I appreciate the service provided over the past few years. [emphasis mine]

[15] On April 30, 2003, Tanya Estwick was advised her contract was being terminated effective May 9, 2003.

ANALYSIS

The preliminary issue

[16] In my view, the respondent is entitled to succeed on the preliminary issue raised which is that the statutory scheme provided by the PSSRA precludes, at this stage, an application for judicial review.

[17] The applicants must engage the grievance process provided in that statute and, if available, the arbitration process set out in the PSSRA.

[18] Judicial review is available against a grievance decision, under section 91 of the PSSRA or, from an arbitrator's decision under section 92, as the case may be.

[19] This conclusion flows from several decisions of this Court and the Federal Court of Appeal including:

(1) Johnson-Paquette v. Canada, [1998] F.C.J. No. 1741 (T.D) and [2000] F.C.J. No. 441 (C.A.);

(2) Public Service Alliance of Canada v. Canada (Treasury Board), 2001 FCT 568 (T.D.) and (2003), 293 N.R. 325; and

(3) Vaughan v. Canada, 2003 FCA 76.

[20] All of these cases build on the Supreme Court of Canada's decision in Weber v. Ontario Hydro, [1995] 2 S.C.R. 929, where the collective agreement provided a comprehensive process for the resolution of disputes and Regina Police Association Inc. v. Regina (City) Board of Police Commissioners, [2000] 1 S.C.R. 360, which, as noted by Justice Evans in Vaughan, supra, concerned not a collective agreement but a statutory remedial scheme such as is found in the PSSRA. Justice Evans wrote at paragraph 97:

¶ 97 Third, in Regina Police Assn. the Court applied the Weber principle to a dispute that was not based on a collective agreement and where the exclusive mechanism for resolving it was not an arbitrator. It follows that a scheme for dealing with employment-related disputes may constitute an exclusive remedial regime for the purpose of Weber, even though disputes do not arise from a collective agreement and are not resolved by arbitration. The Weber principle may thus apply to a scheme that lacks the consensual element of those considered in the foundation case of St. Anne Nackawic Pulp & Paper Co. v. Canadian Paper Workers Union, Local 219, [1986] 1 S.C.R. 704, as well as in Weber itself.

[21] Also relevant, as Noël J.A. stated in Johnson-Paquette, supra, is the Supreme Court of Canada's decision in Gendron v. Supply & Services Union of the Public Service Alliance of Canada, Local 50057, [1990] 1 S.C.R. 1298, which concerned the statutory scheme set out in the PSSRA.

[22] All of these cases point to the obligation to follow the prescribed remedial statutory scheme before engaging judicial review or, in some cases, an action.

[23] Johnson-Paquette, supra, was a case where the plaintiff started a civil action in tort claiming sexual harassment by a co-worker in the Public Service of Canada. Prior to filing her action, she had taken two of her four grievances to the final level. Justice Tremblay-Lamer struck out the action having regard to the dispute resolution process available to her. The Federal Court of Appeal sustained her on appeal, Noël J.A. stating the following at paragraph 10 of its reasons:

¶ 10 Parliament's will to exclude the intervention of the courts in labour relation disputes may therefore be expressly stated or arise by necessary implication. Where, as is the case for the PSSRA, Parliament has, through legislation, adopted what is obviously intended as a full code for the resolution of labour disputes in a given sector of activity and has made the outcome of the legislated processes final and binding on those concerned, it would offend the legislative scheme to permit recourse to ordinary courts which have not been assigned with these tasks. [See Note 16 below] In order to give effect to such schemes, Parliament must be taken as having excluded recourse to the ordinary courts.

[24] The Public Service Alliance of Canada v. Canada (Treasury Board), supra, concerned an application by the Public Service Alliance of Canada (PSAC) for judicial review of a decision of the Commissioner of the Canadian Grain Commission who decided to place 69 indeterminate employees on off-duty status without pay for three months. PSAC was the bargaining agent for those federal public service employees. Again, Justice Tremblay-Lamer struck out the application for judicial review on the basis the PSSRA established a comprehensive scheme for the resolution of employment-related disputes between employees of the federal public service and their employer. Again, she was sustained on appeal with the Chief Justice stating the following:

¶ 2 In our view, the application judge (2001 FCT 568) correctly concluded that the appellant could not seek to circumvent the statutory grievance procedure provided in the Public Service Staff Relations Act (PSSRA) by bringing an application for judicial review of a decision of the Commissioner of the Canadian Grain Commission, pursuant to section 18.1 of the Federal Court Act.

¶ 3 As noted by the application judge, the comprehensiveness of the PSSRA scheme for the resolution of employment-related disputes between employees of the federal public service and their employer has been affirmed by this Court in Johnson-Paquette v. Canada, [2000] 253 N.R. 305, [2000] F.C.J. No. 441 (C.A.).

[25] Finally, Vaughan, supra, concerned an action taken in Federal Court by the appellant, a former employee of the respondent, alleging his employer negligently failed to take the steps necessary to enable him to receive the benefit of a statutory early retirement incentive (ERI) program; he claimed damages and a declaration he was entitled to the ERI benefits. The action was struck out at trial and the appeal was dismissed with both Justices Sexton and Evans writing comprehensive reasons.

[26] Justice Evans developed the issue dealt with by several provincial courts of appeal on whether the grievance process under the PSSRA could be dispensed with because grievance officers were not independent but formed part of management. I need not develop the point as it is not relevant to the issue before me.

[27] Both Justices, once again, emphasized the need to follow the statutory scheme provided for in the PSSRA. Justice Evans, at paragraph 84, concluded:

¶ 84 To conclude, with the exception of Banerd, the post-Weber jurisprudence of both Divisions of this Court broadly supports the proposition that the grievance provisions of the PSSRA impliedly exclude the Court's jurisdiction over work-related disputes that can be grieved under the PSSRA. And, because the existence of the Court's jurisdiction does not depend on whether the employee has resorted to the grievances process, Johnson-Paquette can be taken to have decided by necessary implication that the Court has no jurisdiction over a claim that, in essence, is a dispute that falls within the broad words of section 91, regardless of whether or not the employee has pursued a grievance under section 91.

[28] Justice Evans also commented on what is known about the section 91 process or may be inferred from it. He wrote the following at paragraphs 133, 134, 135, and 136:

¶ 133 First, employees are entitled to the essential elements of the participatory process found in many relatively informal administrative decision-making contexts. In addition, the duty of fairness, including the rule against bias, applies at least to the final level of the grievance process and, in some circumstances, may require disclosure to the employee of information relevant to an employee's claim that is in the possession of the grievance officers.

¶ 134 Second, while neither the PSSRA nor the Master Agreement specifies who can be appointed a grievance officer, it is in the interests of good management- employee relations that grievances are handled effectively and that section 92 references, when available, are kept to a minimum. Hence, there are good reasons for selecting grievance officers from management personnel with relevant knowledge and skills.

¶ 135 Third, while the grievance process is internal, it provides employees with a structured opportunity to have grievances considered by persons at ascending levels in the employer's managerial hierarchy. Contrary to the oblique suggestion of counsel, it cannot be assumed that the section 91 procedures never result in decisions that resolve a grievance favourably to the employee. Indeed, Mr. Vaughan's complaint that the job offer originally made to him was unreasonable was upheld at the second level of the section 91 internal grievance process before it was referred to adjudication under section 92. Moreover, since the statutory procedural provisions governing the internal grievance procedure are sparse, there is considerable scope for their improvement through collective bargaining.

¶ 136 Fourth, the availability of judicial review of an adverse final level decision on a grievance that cannot be referred to an adjudicator under section 92 provides external discipline for decision-makers, and brings an independent measure of quality control to both process and outcome. On an application for judicial review to the Trial Division under section 18.1 of the Federal Court Act, the Court can be asked to review the fairness of the administrative process, the rationality of material findings of fact, and the lawfulness of the decision or action in question.

[29] Counsel for the respondent cited a number of sections of the PSSRA which provide an opportunity for the applicants/PSAC to engage its procedures for the determination of whether the applicants were employees of the public service and whether their termination was lawful.

[30] I generally agree with the comments made by the respondent in his memorandum and will briefly touch upon two points.

[31] It seems section 34 of the PSSRA may well be an appropriate mechanism. PSAC recently was successful on a section 34 application where the employer's primary defence was the individuals in question were not "employees" and, therefore, could not be included within any bargaining unit under the PSSRA.

[32] More to the point, is the Federal Court of Appeal's decision in Professional Association of Foreign Service Officers v. Canada (Attorney General), 2003 FCA 162, on appeal from a decision by the Public Service Staff Relations Board under section 34. In sustaining the Board, Justice Strayer wrote the following at paragraph 10:

¶ 10 I think the present case is distinguishable. The Board here was not considering whether some person engaged under private contract was de facto "employed in the Public Service" within the definition of section 2 of the Public Service Staff Relations Act. In the present case the Board was considering whether someone who was not working under any private contract but was occupied as a student of language in a government language program and being paid a stipend by the Government of Canada for her presence there could be considered to be "employed in the Public Service". A determination of that question involved, not some common law principles of contract law as in the Econosult case, but the application of relevant federal laws governing employment by Government. Using the pragmatic and functional approach it appears to me that Parliament intended to create a specialized tribunal dealing with persons working in a contract of service relationship with the Government and applying the unique and technical provisions of the Public Service Employment Act and the Public Service Staff Relations Act to determine who should be within bargaining units and what those units should be, as well as exercising some supervision over collective agreements in the discrete world of the Public Service. It appears to me that Parliament would have intended it to be clearly within the Board's authority to decide that certain people in the pay of the Government should be treated as employees for the purposes of collective bargaining and others should not.

[33] Finally, the section 91 grievance scheme is broadly worded and applies where an employee feels grieved as a result of any occurrence or matter affecting the terms and conditions of employment of the employee other than a provision described in sub-paragraph (a)(i) or (ii). Both Justice Tremblay-Lamer in Johnson-Paquette, supra, and Justice Evans in Vaughan, supra, commented upon the broad language of this provision.

[34] In this context, the grievance officer has the ability to determine whether the grievor is an employee for the purposes of section 91. The applicants' grievance at level 1 failed on this basis. Additional grievance levels are prescribed. The applicants are obligated to exhaust the grievance process and, if applicable, the arbitration process, before engaging this Court's procedures.

[35] As Justice Evans noted in Vaughan, supra, the applicants may well succeed at the higher levels of the grievance process on the preliminary issue and if they get that far on the substantive issue.

[36] Another way of putting it is the applicants' application for judicial review is premature at this stage.

[37] For all of these reasons, this judicial review application is dismissed with costs.

" François Lemieux "

J U D G E

OTTAWA, ONTARIO

JULY 20, 2004

FEDERAL COURT

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: T-946-03

STYLE OF CAUSE: Tanya Estwick and others v Her Majesty the Queen in Right of Canada as represented by the Treasury Board

PLACE OF HEARING: Ottawa, Ontario

DATE OF HEARING: June 2, 2004

REASONS FOR ORDER : The Honourable Mr. Justice Lemieux

DATED: July 20, 2004

APPEARANCES:

Mr. Andrew Raven FOR APPLICANT

Mr. Richard Fader FOR RESPONDENT

SOLICITORS OF RECORD:

Raven, Allen, Cameron & Ballantyne FOR APPLICANT

Ottawa, Ontario

Mr. Morris Rosenberg FOR RESPONDENT

Deputy Attorney General of Canada

Ottawa, Ontario

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Estwick v. Canada, 2004 FC 970

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