H & R Transport Ltd. v. Shaw, 2004 FC 541

Date: 20040407

Docket: T-1020-03

Citation: 2004 FC 541

Calgary, Alberta this 7^th day of April, 2004.                                                             

Present:           The Honourable Mr. Justice Mosley                                   

BETWEEN:

                                                       H & R TRANSPORT LTD.

                                                                                                                                            Applicant

                                                                           and

                                                               GORDON SHAW

                                                                                                                                        Respondent

                                            REASONS FOR ORDER AND ORDER

[1]                This is an application for judicial review of a decision of Referee William D. Peterson, Q.C. (the "Referee"), dated November 27, 2002 and May 20, 2003. In the November 2002 decision, the Referee awarded severance and termination pay to the respondent, Mr. Gordon Shaw. By further decision dated May 20, 2003, the Referee quantified the amount payable. These decisions were made on appeal from a denial of an investigator of a complaint made by Mr. Shaw pursuant to sections 230 and 235 of the Canada Labour Code, R.S.C. 1985, c. L-2 (the "Code"). The applicant seeks an order setting aside the decision of the Referee.

BACKGROUND

[2]                The respondent, Mr. Gordon Shaw, was employed by the applicant, H & R Transport Ltd., for approximately five and a half years as an auto-body technician and painter.

[3]                By letter dated November 23, 2001, Stephen Evans, Director of Safety and Risk Management at H & R Transport, informed Mr. Shaw that he would be laid off effective from the end of work that day, November 23, 2001. This letter concluded by stating, "The term of this layoff will be no more than three months but we will continue to monitor the body shop workload and will contact you for recall if it appears that we have need for a full time painter before then." It seems no prior notice of this lay-off was provided to Mr. Shaw.

[4]                H & R also issued a Record of Employment for Mr. Shaw, dated November 23, 2001, indicating that his reason for leaving was due to "lack of work" and that his "expected date of recall" was "unknown".

[5]                At the respondent's request, H & R provided him with a letter of reference. Mr. Shaw accepted a temporary position with an auto-body shop approximately two weeks after he received this layoff notice from the applicant. The applicant and respondent had no further contact until the end of January 2002, when Mr. Evans contacted Mr. Shaw by telephone.

[6]                The applicant and respondent disagree about the facts in relation to this conversation between Mr. Evans and Mr. Shaw. Mr. Shaw testified before the Referee that Mr. Evans was merely inquiring whether he had found employment or employment prospects. According to Mr. Shaw, Mr. Evans did not recall him to work. Mr. Evans testified that he inquired of the respondent's intentions and Mr. Shaw responded that he was happy with his current job and was not interested in returning early and would "wait out" the three month period. Mr. Evans acknowledged that there may have been some confusion arising out of this January telephone conversation as to who would be the one to initiate Mr. Shaw's return to work and exactly when this would occur. Mr. Evans stated that he believed that Mr. Shaw would show up to work on February 25, 2002, despite the fact that this date was not mentioned.

[7]                Mr. Shaw did not receive any further contact from the applicant on or before February 25, 2002 and therefore considered his employment with H & R to be terminated as of that date. He was then offered full-time, permanent employment with another employer and accepted such employment.

[8]                On February 27, 2002 Mr. Evans contacted Mr. Shaw by telephone and inquired why Mr. Shaw had not returned to work. Mr. Shaw attests, in his affidavit filed in this proceeding, that he was surprised by this telephone call and requested time to consider the situation.

[9]                On February 28, 2002 the applicant issued a recall notice to Mr. Shaw, stating in part that Mr. Shaw's "...three-month lay-off period has expired and therefore this letter will serve as your recall notice." Mr. Shaw and Mr. Evans met in early March 2002 to discuss the prospect of Mr. Shaw returning to work for H & R, with the end result of Mr. Shaw informing Mr. Evans that he would not return to work for the applicant.

[10]            In or around the end of February 2002, Mr. Shaw filed a complaint with Human Resources Development Canada ("HRDC"), pursuant to Part III of the Code. In this complaint, he requested termination and severance pay from H & R Transport.

[11]            By letter dated May 27, 2002, an inspector of HRDC concluded that Mr. Shaw's complaint was unfounded because he had terminated his employment with H & R Transport and therefore having quit his employment, he was not entitled to severance and termination pay.    The inspector referred to two letters from H & R, dated February 28, 2002 and March 4, 2002 as demonstrating that he had been recalled to work. Mr. Shaw appealed this decision to the Referee.

The Referee's Decision

[12]            In a decision dated November 27, 2002, the Referee determined that Mr. Shaw was entitled to termination and severance pay under sections 230 and 235 of the Code because H & R had not recalled Mr. Shaw to work within three months of his layoff date and therefore Mr. Shaw was justified in considering himself terminated. The Referee also found that Mr. Shaw had not resigned as alleged by H & R.

[13]            The Referee found that H & R had an obligation to "clearly and unambiguously" issue a recall notice within the three month period, failing which Mr. Shaw would be deemed to have been terminated and entitled to termination or severance pay under sections 230 and 235 of the Code. The Referee rejected the employer's argument that the onus was on Mr. Shaw to show up for work on the first working day of the end of the three month period, that is February 25, 2002, on the assumption that he was recalled, even without receipt of a formal recall notice, in writing or verbally.    The Referee found that the telephone conversation between Mr. Shaw and Mr. Evans of late January 2002 could not be construed as a recall notice that obliged Mr. Shaw to return to work on February 25, 2002. The Referee found that "at very best" this conversation put Mr. Shaw on notice that he might be recalled for work on or before that date.    The Referee determined that the events which occurred after February 27, 2002 had no relevance to the issue before him.

[14]            The Referee also retained jurisdiction in the event that the parties could not agree on the amount of the statutory termination and severance pay to which Mr. Shaw was entitled. The Referee later decided on May 20, 2003 that Mr. Shaw was entitled to an award of $3,360.00, less statutory deductions ,with costs of $300.00, pursuant to sections 230 and 235 of the Code. The amount of $3,360.00 comprised termination pay of $1,680.00 and severance pay of $1,680.00.

ISSUES

[15]            1. Is this application for judicial review time-barred?

2. What is the applicable standard of review in this case?

3. Did the Referee make an unreasonable decision?

PARTIES' POSITIONS AND ANALYSIS

Judicial Review late, extension granted

[16]            The applicant, H & R Transport, filed its notice of application for judicial review on June 19, 2003. The respondent argues that this judicial review is time-barred, pursuant to the 30-day time limit for filing a notice of application for judicial review, such period beginning from the time when the decision or order being reviewed was first communicated to the applicant: subsection 18.1(2) of the Federal Courts Act, R.S.C. 1985, c. F-7. The respondent's position is that the 30-day limitation period commenced when the Referee first communicated his November 27, 2002 decision to the applicant.

[17]            The applicant submits that the 30-day limitation period began only upon the Referee's completion of his statutory function under subsection 251.12 of the Code, that is upon determining the amount payable in his May 30, 2003 decision. The applicant says that the Referee retained jurisdiction and the decision was not completed until the remedial result was finalized. The applicant relies on an order of Justice Kelen in H & R Transport Ltd. v. Baldrey (October 19, 2001) (Docket No. 01-T-45) (F.C.T.D.) (Unreported), where it was held that the commencement of the limitation period under subsection 18.1(2) of the Federal Courts Act would not begin until an adjudicator had rendered her final decision completing the arbitration with respect to the appropriate remedy.

[18]            In the event that the Court determines that the time limitation began upon communication of the November 27, 2002 decision, the applicant seeks an extension of time for filing its notice of application for judicial review, pursuant to Rule 369 of the Federal Court Rules, 1998, SOR/98-106. H & R Transport argues that it has an arguable case for setting aside the decision of the Referee and there is no apparent prejudice to the respondent as a result of the delay.

[19]            I disagree with the applicant that the approach taken by Justice Kelen is applicable to the current situation. It appears from his order that an adjudicator in the circumstances before him had deferred "any ruling on remedies" and remained seized of the issue in the event that the parties were unable to reach an agreement. In such a situation, seeking judicial review of a decision would have been clearly premature, as no remedy had yet been ordered by the administrative decision-maker. However, in the present case, the only matter outstanding was quantification of the amount payable, if the parties could not agree to such amount. The remedy, being Mr. Shaw's entitlement to severance and termination pay, had been determined by the Referee in his decision of November 27, 2002, and therefore, this was the decision against which judicial review should have been sought within the 30-day time period after receiving notification of the decision. In such a scenario, the filing by one party of an application for judicial review of the Referee's decision should have had no effect on the Referee's subsequent decision, quantifying the amounts payable.

[20]            Despite this finding, I am satisfied that an extension of time for filing this application for judicial review is warranted, having regard to the factors set out in the seminal decision of Grewal v. Canada (Minister of Employment and Immigration), [1985] 2 F.C. 263 (C.A.).

[21]            The applicant has demonstrated that there is an arguable case and that its decision to wait in initiating its application for judicial review until after the supplementary decision of the Referee was made having regard to Justice Kelen's order in Baldrey, supra. While I disagree that such reasoning is applicable to the present case, this is, in my view, a reasonable explanation for the delay. Moreover, the respondent has not specified any prejudice that has accrued to him as a result of the delay. In my view, the decision relied on by the respondent, McKeown v. Royal Bank of Canada, [2001] 3 F.C. 139 (T.D.) is distinguished from the present case, as there, the applicant provided no explanation for the delay, whereas here, the applicant has provided a reasonable explanation.

Standard of Review

[22]            The applicant argues that the appropriate standard is correctness in relation to the Referee's interpretation of the law and reasonableness simplicter for the Referee's findings of fact. The respondent, on the other hand, submits that the appropriate standard is reasonableness simpliciter or patent unreasonableness. I find that the standard of review in relation to the issue of whether the Referee erred in determining that Mr. Shaw was deemed terminated within the meaning of the Code to be that of reasonableness simpliciter.

[23]            The pragmatic and functional approach directs that four factors must be considered by the Court in determining the appropriate standard of review for a particular administrative decision: (1) the purpose(s) of the legislation as a whole and the provisions at issue in particular, (2) the nature of the question; being law, fact or mixed fact and law, (3) the expertise of the tribunal relative to that of the reviewing court in regards to the question at issue, (4) the existence of any privative clause or statutory right of appeal . See: Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247, Dr. Q. v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226 and Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982. As stated by the Supreme Court of Canada in Pushpanathan, supra, at paragraph 26, the central inquiry in the standard of review analysis is determining the degree to which Parliament intended the administrative decision under review to be subject to judicial scrutiny.

[24]            First, the purpose of Part III of the Code is to protect individual workers and create certainty in the labour market by providing minimum labour standards and procedures for the efficient resolution of labour disputes arising from its provisions: Dynamex Canada Inc. v. Mamona (2003), 305 N.R. 295 (F.C.A.) at para. 35, appeal to the S.C.C. dismissed March 4, 2004, S.C.C. Bulletin, 2004, p. 354.

[25]            The purpose of the provisions at issue in this judicial review, that is sections 230 and 235 of the Code and section 30 of the Canada Labour Standards Regulations, C.R.C., c. 986 (the "Regulations"), is to provide for the determination of whether a worker is entitled to severance or termination pay, and if so, the amount of such pay. The respondent emphasizes that the precise detail of subsection 30(1) in setting out the circumstances where a layoff is to be excluded from the deemed termination provisions of the Code indicates that this provision is not intended to "tap" a Referee's expertise, but rather requires that the specific description of excluded situations be interpreted according to statutory interpretation principles, a task for which the Court is better suited.

[26]            I disagree with the respondent and find that subsection 30(1) of the Regulations does engage the Referee's expertise in interpreting his or her enabling statute, as well as require him or her to interpret the underlying facts at issue in a dispute over minimum labour entitlements. This factor signals that some deference should be accorded by this Court.

[27]            Second, the question at issue in this judicial review is whether or not Mr. Shaw was laid off for a term of three months or less, within the parameters of subsection 30(1)(c) of the Regulations. Answering this question leads to a finding of whether Mr. Shaw was "deemed" terminated and is entitled to severance or termination pay. In my opinion, the nature of the problem is one involving questions of mixed fact and law. The Referee had to make findings of fact, that is, come to conclusions where the facts were not agreed upon by the parties as to what happened between them and when. Subsequently, these findings of fact had to be applied against the legislation, namely, subsection 30(1) of the Regulations. I refer to Dynamex, supra, where the Federal Court of Appeal stated at paragraph 45, that where a decision of a Referee under the Code deals with questions of mixed fact and law, the decision should be reviewed on the standard of reasonableness simpliciter. Once again, a level of deference is to be afforded.

[28]            Third, the Code is silent as to the qualifications required of Referees. A Referee is appointed by the Minister and is someone that the Minister considers appropriate: subsection 251.12(1) of the Code. In Dynamex, supra, the Federal Court of Appeal stated that it may be presumed that Referees will generally have more expertise in matters of labour standards than the Court.    The Court in Dynamex, supra, at paragraph 39 continued on this topic and stated, "That would suggest that they are owed deference in a decision as to the specific entitlement of an employee to a remedy under Part III of the Canada Labour Code, even if the decision involves a question of statutory interpretation of the referee's home legislation."

[29]            I agree with this general statement. Furthermore, the particular question at issue in this judicial review is similar to the example outlined in Dynamex, supra, that is a question of the Referee interpreting his home legislation, namely, on the question of whether a worker is entitled to severance and/or termination pay because of an alleged deemed termination. The question at issue is not one involving a "broader" interpretation of law, including the use of common law principles, as was at issue in Dynamex, supra.   

[30]            The question at issue in the present case is one of mixed fact and law and squarely engages the expertise of this particular administrative decision-maker. Referees appointed under the Code can be regarded as having an equal or greater amount of expertise, relative to the courts, on the issue involved in this review, that is, how certain factual findings in regards to the circumstances of Mr. Shaw's lay-off apply to the statutory and regulatory scheme, in order to determine if a deemed termination occurred and severance and termination pay are owing. Therefore, this factor signals that some deference should be afforded to the Referee's decision.

[31]            Finally, the Code contains strong privative clauses found in subsections 251.12(6) and (7), indicating that a significant amount of deference should be afforded:

Therefore, as stated at the outset, I find that the appropriate standard of review in this case is that of reasonableness simpliciter.

Referee's Decision reasonable

[32]            Sections 230 and 235 of the Code set out the circumstances in which an employee is entitled to termination and severance pay upon termination of employment. These sections provide that a layoff is deemed to be a termination of employment, except where otherwise prescribed by regulation. Subsection 30(1) of the Regulations prescribes when a layoff is not deemed to be a termination for the purposes of, inter alia, sections 230 and 235 of the Code. In this judicial review subsections 30(1)(c) and (d) of the Regulations are relevant and provide:

[33]            The applicant's argument in relation to the interpretation of subsection 30(1)(c) of the Regulations and that provision's application to the facts of this case does not persuade me that the Referee's decision that Mr. Shaw was deemed terminated was an unreasonable one. I come to this conclusion upon consideration of the proper interpretation of subsection 30(1) of the Regulations and the correspondence that took place between the parties.

[34]            The November 23, 2001 letter from the applicant which gave Mr. Shaw notice of the temporary layoff framed the expected recall of Mr. Shaw in the following manner, "The term of this layoff will be no more than three months but we will continue to monitor the body shop workload and will contact you for recall if it appears that we have need for a full time painter before then." In my opinion, this letter presents the employer's view that Mr. Shaw's layoff was to last no longer than three months and in the event that H & R Transport required Mr. Shaw's services before the end of that three-month time frame, it would contact him and let him know the specific date of recall. This letter does not mention the specific date of February 25, 2002.

[35]            However, other evidence on the record provided contradictions to this view, namely the Record of Employment issued by H & R to Mr. Shaw, stating that the expected date of recall was "unknown" and the Referee's factual finding that Mr. Evans, an agent of the applicant, did not inform Mr. Shaw in the conversation that occurred in late January 2002 that he was expected back at work on February 25, 2002, but only inquired into whether Mr. Shaw was currently working. The Referee also noted in his reasons that Mr. Evans candidly admitted that he believed that there was some confusion from that conversation "as to who would call who about the Appellant returning to work and, if so, precisely when."

[36]            Such conflicting signals in the evidence lead me to conclude that the Referee's decision that the employer, H & R Transport, failed to clearly and unambiguously indicate to the applicant that his recall date was to be February 25, 2002 was not unreasonable.

[37]            I agree with the applicant that no express notice of recall is required pursuant to subsection 30(1)(c) of the Regulations. However, in my opinion, this is only the case if an employee is clearly informed at the time of their layoff that such layoff is to be for a maximum of three months, and no other communication from or action of the employer changes this understanding. This gives meaning to the difference in wording between subsections (c) and (d) of 30(1).    The grammatical and ordinary meaning of the phrase "the term of the lay-off is three months or less" found in subsection 30(1)(c) indicates, in my opinion, that "the term" must be precisely defined for the employee by his or her employer. While the Referee's reasons are brief, and do not include reference to subsection 30(1) of the Regulations, I do not believe he applied the wrong legal test in determining whether there was a deemed termination of Mr. Shaw's employment, as opposed to a resignation from Mr. Shaw. I read the decision as stating that in the circumstances of this case, where Mr. Shaw was given conflicting signals as to when he would return to work, the onus of clearly indicating when the "term" of the layoff ended was with the employer. The employer cannot take advantage of the exception provided by 30(1)(c) to avoid paying severance where there is such ambiguity about its intentions as there was in this case.

[38]            The Referee decision of Charlong v. Johnson Moving & Storage Ltd., [2002] C.L.A.D. No. 372 (Ref.)(QL) relied on by the applicant, states the view that subsection 30(1)(c) of the Regulations does not require a formal notice of recall to occur within the three month period when the term of the layoff is stated as being for three months or less, in contrast with subsection 30(1)(d) which deals with lay-offs in excess of six months. As I have already stated, I agree with such interpretation of subsection 30(1)(c).

[39]            Charlong, supra, is distinguished on its facts. The Referee in that case found that the employee no longer wanted to work for the employer and the Record of Employment stating that the employee was laid off was merely a gesture on the part of the employer to avoid stating that the employee had abandoned his position. The Referee there found that a layoff did not in fact occur. In the present case, a layoff clearly occurred and was the decision of the employer and not Mr. Shaw. The Referee in this case reasonably concluded that the employer had an obligation to make the term of the lay-off period clear to the employee.

[40]            The applicant has also argued that the Referee erred in failing to consider evidence of communications between H & R and Mr. Shaw after February 27, 2002. In my view, the Referee did not err in this respect, as it is clear that he considered the evidence submitted in regards to the correspondence between the parties that took place after February 27, 2002 and he did not refuse to admit it. However, he did not find it relevant to a determination of whether Mr. Shaw had been deemed terminated. The Referee heard viva voce evidence from Mr. Shaw and Mr. Evans. He weighed the evidence and determined what was relevant. This was clearly an area within his expertise. I cannot say that such finding is unreasonable, or rises to a breach of natural justice.

[41]            Accordingly, the application is dismissed.

                                                                       ORDER

THIS COURT ORDERS that this application for judicial review is dismissed. Costs to the respondent.

                                                                                                                            "Richard G. Mosley"    

                                                                                                                                                 J. F. C.             

                                                             FEDERAL COURT

                            NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                          T-1020-03

STYLE OF CAUSE:                          H & R Transport Ltd. v. Gordon Shaw

PLACE OF HEARING:                    Calgary, Alberta

DATE OF HEARING:                      April 5, 2004

REASONS FOR ORDER AND ORDER : Mosley, J.

DATED:                                             April 7, 2004

APPEARANCES:

Mr. William J. Armstrong Q.C.                                                  FOR APPLICANT

Ms. Tammy L. Praskach                                                            FOR RESPONDENT

SOLICITORS OF RECORD:

Laird Armstrong

Calgary, Alberta                                                                        FOR APPLICANT

Davidson & Williams LLP

Lethbridge, Alberta                                                                    FOR RESPONDENT