T-692-96
IN THE MATTER OF an application to review and set aside, pursuant to sections 18 and 18.1 of the Federal Court Act, R.S.C., 1985, c. F-7, as amended, a decision of an Appeal Board established under the Public Service Employment Act, R.S.C. 1985, c. P-33, as amended, rendered by J.H. Giffin, Chairwoman, on February 22, 1996, respecting the appeals brought pursuant to section 21 of the Public Service Employment Act, P.S.C. File Nos.: 94-TAX-0970 and -0971)
B E T W E E N:
ATTORNEY GENERAL OF CANADA
Applicant
- and -
JAMES G. LAIDLAW, JEAN MAITLAND,
GERRY IRWIN, KAREN V. DUMEAH and
ANN MYKETYN
Respondents
REASONS FOR ORDER
ROTHSTEIN J.:
The applicant seeks to review and set aside a decision of an appeal board under the Public Service Employment Act, R.S.C. 1985, c. P-33. The respondents had held the position of "unit head" in the Halifax office of Revenue Canada. Under a modernization initiative, there was a reorganization in which jobs were categorized: A. Review and Update; B. Reclassification; C. New Job. Revenue Canada treated the respondents' position of "unit head" as obsolete and replaced them with a new "team leader/co-ordinator" position. Since Revenue Canada considered the team leader/co-ordinator position as new, in order to staff the position, competitions were held pursuant to subsection 10(1) of the Public Service Employment Act which provides:
10. (1) Appointments to or from within the Public Service shall be based on selection according to merit, as determined by the Commission, and shall be made by the Commission, at the request of the deputy head concerned, by competition or by such other process of personnel selection designed to establish the merit of candidates as the Commission considers is in the best interests of the Public Service.
The respondents were unsuccessful in these competitions.
The respondents appealed to an appeal board pursuant to section 21 of the Public Service Employment Act.[1] They submitted that the team leader/co-ordinator position was not new, but was a reclassification. They alleged that staffing for the reclassifications should have taken place on the basis of the incumbents' competence pursuant to subsection 10(2) of the Act, which provides:
10. (2) For the purposes of subsection (1), selection according to merit may, in the circumstances prescribed by the regulations of the Commission, be based on the competence of a person being considered for appointment as measured by such standard of competence as the Commission may establish, rather than as measured against the competence of other persons.
The regulation referred to in subsection 10(2) that is relevant to this case is subparagraph 4(2)(b)(ii) of the Public Service Regulations, S.O.R./93-286, which provides:
4. (2) A selection referred to in subsection 10(2) of the Act may be made in any of the following circumstances, namely,
. . .
(b) where an employee is to be appointed to the employee's reclassified position and
. . .
(ii) the position is one of a group of similar positions of the same occupational group and level in a part of an organization that have all been reclassified...
The appeal board found that it had jurisdiction to decide whether the position of team leader/co-ordinator was new. Pursuant to that jurisdiction, the board determined that the position was not new. It then went on to conclude that with respect to the circumstances referred to in subsection 4(2) of the Regulations, the selection process under subsection 10(2) of the Act was mandatory, meaning that employees whose circumstances were described within subsection 4(2) of the Regulations had a right to be selected on the basis of the competence principle provided for in subsection 10(2). Accordingly, it allowed the respondents' appeals.
Although the applicant raised a number of wide ranging arguments, the outcome of this judicial review turns on the answers to the following questions:
1. What process did Revenue Canada establish for filling positions after its reorganization?
2. Did the appeal board have the jurisdiction to decide whether positions under the reorganization were new?
3. Was the finding that the team leader/co-ordinator position was not new a finding of fact, and if so, was it made by the appeal board in a perverse or capricious manner or without regard to the evidence before it?
4. Should subsection 10(2) of the Act and subsection 4(2) of the Regulations be construed as being mandatory?
1. What process did Revenue Canada establish for filling positions after its reorganization?
Under the modernization initiative, all jobs were reviewed and rewritten by a committee at the National Headquarters of Revenue Canada. The committee categorized all jobs into three categories:
CATEGORY A -- Review and Update
. the major duties and responsibilities remain essentially the same.
. the job description is basically a rewrite of an existing job description to the UJEP format.
. the group and level has not changed.
CATEGORY B -- Reclassification
. A change in group and/or level has occurred.
. The major duties and responsibilities have changed but the role and mandate remain essentially the same.
. Reporting relationship normally remains the same.
CATEGORY C -- New Job
. The job is neither a review and update nor a reclassification.
. The role, mandate, focus and accountability are significantly different from any existing job.
For jobs categorized as review and update, no staffing action was required. For jobs that were considered to be reclassified and had incumbents already in the positions, staffing action was taken under subsection 10(2) of the Act. For jobs categorized as new, staffing action was taken under subsection 10(1) of the Act.
2. Did the appeal board have the jurisdiction to decide whether positions under the reorganization were new?
The appeal board sought the opinions of the parties on a number of questions, one of which was:
Question (i): Does an appeal board have the authority to make the determination that these are "new" positions?
Revenue Canada responded in the following words:
In view of these decisions, I am obliged to conclude that the answer to your first question is that an Appeal Board has the authority to make the determination that the newly classified positions are "new" to the extent provided for in the Supreme Court Decision Brault and Dubois, but that an Appeal Board has no authority to review the classification decisions. I expect that this would mean if the change in duties is of such a significant nature that it calls for new qualifications, then the position is also "new" from an Appeal Board's point of view.
In this case, it is the Department's view that the duties of the Team Coordinator, PM-4, position are substantially different from those performed by Unit Heads, PM-3, in that new management skills are required to perform the new duties.
Revenue Canada conditioned its view of the board's authority to decide if the positions were new by reference to Brown v. Public Service Commission, [1975] F.C. 345 (C.A.), and to Canada (Attorney General) v. Brault, [1987] 2 S.C.R. 489. In Brown, the Federal Court of Appeal, per Jackett C.J. at pages 347 and 348 set out the necessary steps involved in the creation of a new government position. These steps were summarized by Le Dain J. in Brault at pages 500 and 501:
1. The Minister or deputy head of a Department, in the exercise of his management authority, determines what positions are required in the Department and determines the qualifications for appointment to them; 2. Financial approval for a position must be obtained from the Treasury Board, which has authority under s. 7 of the Financial Administration Act, R.S.C. 1970 c. F-10, to classify positions in the Public Service for remuneration and other purposes; 3. The deputy head makes a request to the Public Service Commission to make the necessary appointment or makes the appointment himself under a delegation of authority; and 4. The appointment is made pursuant to the particular selection process required by the Public Service Employment Act and Regulations...
...
...it is the Minister or deputy head who creates a position and determines the qualifications for appointment to it, and that, subject to the necessary approval from the Treasury Board, this act does not call for any particular formality or expression. It is an administrative decision which identifies particular functions to be performed and defines the qualifications required for performing them.
Having set out the steps of the process for creating a new government position, Le Dain J. turned to consider the issue whether a new position could be created by a change in the functions of an existing position, notwithstanding that the administration does not choose to regard such a change as creating a new position within the meaning of the Act. He held at pages 501 and 502 that:
Obviously the administration must have reasonable flexibility to make minor changes in the functions of an existing position in the Public Service which the occupant of the position may be called on to perform, without thereby creating a new position for which an appointment based on selection according to merit must be made. Where, however...the change in functions is of such a significant or substantial nature as to call for additional or special qualifications requiring evaluation and therefore what amounts to a new selection for the position, a new position within the meaning of the Act is created.
In Dorév. Canada, [1987] 2 S.C.R. 503, which was a companion decision to Brault, Le Dain J. further explained this test at 510:
[T]he application of the merit principle and the right of appeal under s. 21 of the Public Service Employment Act cannot depend on whether the Department chooses to regard what is done as the creation of a position and an appointment to it within the meaning of the Act. It is what the Department has objectively done as a matter of fact and not what it may have intended or understood it was doing as a matter of law that must determine the application of the merit principle and the right of appeal.
In the context of an appeal to an appeal board, it is for the board to make an objective factual determination of whether a newly designated job is new or has merely undergone changes of a minor nature that do not require new qualifications on the part of the incumbent. The issue before the board in this case of whether the position of team leader/co-ordinator was a new position is one to be determined objectively as a matter of fact by the board.
Notwithstanding the submissions of Revenue Canada to the appeal board on this issue, which essentially concurred with this view, counsel for the applicant before me argued that the issue of whether a position is "new" is somehow embedded in making a classification decision in regard to the position, and is thus beyond the jurisdiction of the board.
At page 19 of its decision, the appeal board addressed the difference between the categorization of a position as a "new" one and the classification of a position at a particular group and level:
Both parties appeared to agree that there is a difference, however, between the categorization of a position as a "new" one and the classification of a position at a particular group and level. The positions being staffed were evidently reviewed by a national departmental committee and categorized as "new" positions. The process of classification was evidently delegated by Treasury Board to the department in the person of a classification officer who, in the course of his or her work, authored the classification action forms...
The appeal board found that it did not have jurisdiction to go behind a classification decision. In this case, that decision changed the classification from PM-03 which applied to the unit head position to PM-04 which applied to the team leader/co-ordinator position.
Classification affects the group and level of a position. A change of classification in conjunction with a reorganization, does not affect the objective determination of whether a position is or is not new. Otherwise, the board would only have jurisdiction to objectively determine whether or not a position was new when there is no change in classification. Therefore, a change in classification of a position does not deprive the board of its jurisdiction to determine whether, in a reorganization, a position is or is not new.
The board's finding that the team leader/co-ordinator position was not new did not affect the classification decision and was therefore within the jurisdiction of the board.
3. Was the finding that the team leader/co-ordinator position was not new a finding of fact, and if so was it made by the appeal board erroneously in a perverse or capricious manner or without regard to the material before it?
The evidence before the appeal board as to the nature of the team leader/co-ordinator position, as compared to the unit head position, was given by Gerry Irwin who, at that time, had 23 years of experience with Revenue Canada and had acted in the position of team leader/co-ordinator for approximately nine months.
Her evidence was that there was basically no change in the job in terms of span of control, that there was no basic change in the reporting structure, and that there were only minor changes with respect to the actual work that came across her desk. Ms. Irwin was not cross-examined.
Revenue Canada then made a written submission to the appeal board referring to the fact that there was a difference in classification. The team leader/co-ordinator position was a higher classification of PM-04, while the unit head position was a PM-03 position. Revenue Canada also submitted that there was a change in reporting insofar as the team leader/co-ordinators reported directly to the divisional manager, whereas before they had reported to division chiefs. Nonetheless, the appeal board found that the position was not new at page 20:
Are the Team Co-ordinators positions new positions? The overwhelming weight of the evidence in response to the question is in the negative. The testimonial and documentary evidence indicated that the department's own three-fold rationale for designating a position as "new" -(i) span of control, (ii) change in reporting relationship, and (iii) expanded human relations authorities, an example of the latter being the right to suspend employee - was not met in any material way in terms of span of control or of change in reporting relationships.
Appellant Irwin, who acted in the newly-classified Team Co-ordinator (PM-04) position for approximately nine months, testified that "basically there was no change in the job itself" from the time when she incumbered the Unit Head, Collections (PM-03) position. This testimony was neither controverted nor seriously challenged by the department. The departmental representative even acknowledged forthrightly that four of the staffing delegations (Human Relations authorities) had been granted on 28 April 1995 which was well after the 1 January 1993 effective date of classification. He also acknowledged that other of the proposed staffing delegations were still under review at the time of the competitive process.
In summary, there is sufficient evidence adduced on behalf of the appellants to demonstrate that the department was wrong in concluding -by any reasonable standard, including its own criteria - that the Team Co-ordinator, Collections, Revenue Collections Division (PM-04) and the Team Co-ordinator, General Enquiries, Client Assistance Division (PM-04) were "new" positions so as to exclude the appellants from consideration for appointment to them pursuant to the provisions of section 4(2)(b)(ii) of the Public Service Employment Regulations, 1993. It is probably not coincidental that approximately the same number of positions were in existence both before and after the classification process - adding to the perception that these are, in the end, the same positions.
The board's finding that the team leader/co-ordinator position was not new was based on the evidence before it. Its reasons are reasonably detailed with reference to the evidence. There is no reasonable basis for the assertion that the board's finding was in error, let alone that it was made in a perverse or capricious manner or without regard to the material before it.
4. Should subsection 4(2) of the Regulations be construed as being mandatory?
The appeal board acknowledged that section 11 of the Interpretation Act, R.S., c. I-23 provides:
11. The expression "shall" is to be construed as imperative and the expression "may" as permissive.
The board then referred to jurisprudence to the effect that "may" when used in a statute can, in certain circumstances, be construed as mandatory. The board considered the construction of the relevant provisions in this case. There appears to have been the concern that a permissive construction of "may" would thwart the object of the Act (page 24):
...it is inconceivable to me that management would be given an unfettered discretion to pick and choose those circumstances, other than those prescribed by regulation, where it could apply a standard of competence over that of relative merit.
The board concluded that where the circumstances set out in subparagraph 4(2)(b)(ii) of the Regulations apply, it is mandatory for the administration to select subsection 10(2) of the Act in order to staff the positions. In other words, the board found that the respondents had a right to be appointed to the team leader/co-ordinator position provided they could meet the standard of competence referred to in subsection 10(2) of the Act.
While I have no difficulty with the findings of fact made by the board, and indeed, most of its findings of law, I am unable to agree that subsection 10(2) of the Act and subsection 4(2) of the Regulations are to be construed as mandatory.
It would appear that the general principle relating to staffing public service positions is set out in subsection 10(1): employment should be based on merit tested by competitions. Appointments based on competence pursuant to subsection 10(2) are an exception to the general principle. Subsection 4(2) of the Regulations deals with particular circumstances where the general competition process may be dispensed with. The appeal board referred to paragraph 4(2)(d), which states:
4. (2) A selection referred to in subsection 10(2) of the Act may be made in the following circumstances, namely,
...
(d) where an employee is to be promoted within the Law Group from the LA-01 to the LA-2A level;
The board was of the view that it was difficult to conceive that management should be able to decide which LA-01 lawyers should be promoted on the basis of competence, and which should be promoted on the basis of competition. However, the board does not explain why the Governor-in-Council would intend to give low level lawyers a special right of promotion based on competence not applicable to other lawyers or, indeed, to other government employees. The inference I draw from the nature of the positions referred to in subsection 4(2) and circumstances referred to therein is that the intention is to allow the government to avoid the time and expense associated with competitions where particular circumstances warrant in the specified cases. It is not to give special rights to employees referred to therein.
The object of the Act is to ensure that the best person be placed in every available position. Subsection 10(2) gives the government the opportunity to staff a position through a procedure which does not require holding competitions in certain specified circumstances which are deemed not to warrant a competition. In light of the overall purpose of the Act, I must conclude that Parliament and the Governor-in-Council merely intended that, in the circumstances of subparagraph 4(2)(b)(ii) of the Regulations, the government has the option of not holding competitions.
Therefore, the appeal board erred in holding that where subparagraph 4(2)(b)(ii) of the Regulations applies, subsection 10(2) of the Act is construed as mandatory.
Revenue Canada therefore has the discretion to choose to staff positions by competition under subsection 10(1) even where positions might be staffed on the basis of competency pursuant to subsection 10(2) of the Act and subsection 4(2) of the Regulations. However, it is important to emphasize in this case that Revenue Canada's discretion is not unfettered. As was made clear by the Supreme Court of Canada, in [1982] 2 S.C.R. 2">Maple Lodge Farms Ltd. v. Canada, [1982] 2 S.C.R. 2, per McIntyre J. at page 7, such a statutory discretion must be exercised in good faith and in accordance with the principles of natural justice.
This matter is remitted to the appeal board for redetermination. I expect that the board will in turn allow Revenue Canada to exercise its discretion in respect to the team leader/co-ordinator position. Such exercise of discretion, of course, must respect the appeal board's decision that the position is not new. Having already decided under its modernization initiative to staff reclassified positions on the basis of competency pursuant to subsection 10(2) of the Act, I would expect that Revenue Canada, in exercising its discretion, would treat the team leader/co-ordinator position in accordance with this policy and, if not, that a meaningful and logical explanation for not following the policy would be provided.
"Marshall E. Rothstein"
J U D G E
TORONTO, ONTARIO
APRIL 9, 1997
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
COURT NO: T-692-96
STYLE OF CAUSE: ATTORNEY GENERAL OF CANADA
- and -
JAMES G. LAIDLAW, ET AL.
DATE OF HEARING: FEBRUARY 19, 1997
PLACE OF HEARING: OTTAWA, ONTARIO
REASONS FOR ORDER BY: ROTHSTEIN, J.
DATED: APRIL 9, 1997
APPEARANCES:
Mr. Dogan Akman
For the Applicant
Mr. Andrew Raven
For the Respondents
SOLICITORS OF RECORD:
RAVEN, JEWITT & ALLEN
Barristers and Solicitors
1600-220 Laurier Avenue West
Ottawa, Ontario
K1P 5Z9
For the Applicant
George Thomson
Deputy Attorney General
of Canada
Department of Justice
Justice Building
532-239 Wellington Street at Kent
Ottawa, Ontario
K1A 0H8
For the Respondents
FEDERAL COURT OF CANADA
Court No.: T692-96-
Between:
ATTORNEY GENERAL OF CANADA
Applicant
- and -
JAMES G.LAIDLAW, ET AL.
Respondents
REASONS FOR ORDER
[1] Section 21 of the Public Service Employment Act states:
21. (1) Where a person is appointed or is about to be appointed under this Act and the selection of the person for appointment was made by closed competition, every unsuccessful candidate may, within the period provided for by the regulations of the Commission, appeal against the appointment to a board established by the Commission to conduct an inquiry at which the person appealing and the deputy head concerned, or their representatives, shall be given an opportunity to be heard.
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