Date: 20080125
Citation:
2008 FC 84
Docket :
T-1362-07
BETWEEN:
ATTORNEY
GENERAL OF CANADA
Applicant
and
YVES
NANTEL
Respondent
Docket: T-1386-07
BETWEEN:
YVES NANTEL
Applicant
and
ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR
JUDGMENT
Pinard J.
[1]
Two
applications for judicial review have been consolidated. In docket T-1362-07,
the Attorney General of Canada (hereinafter “the applicant”) is seeking
judicial review of the decision by the Public Service Labour Relations Board
(hereinafter the “PSLRB”) ordering it to pay interest to Mr. Nantel
(hereinafter “the respondent”) on his salary adjustment. In docket T-1386-07,
the respondent seeks judicial review of the same decision with respect to the
calculation of the amount to be paid.
* * * * * * *
*
[2]
On
January 5, 1993, the respondent was appointed to a material management officer
position (PG-02) with the Correctional Service of Canada at the La Macaza
Institution. As of January 6, 1997, he had reached the top of his
salary scale.
[3]
On
March 4, 2002, the respondent received a letter indicating that an error had
been discovered in his file for the period of January 5, 1993, to January 5,
1997, and that he was owed a salary adjustment of $6,393.01. He received this
amount on March 8, 2002.
[4]
By
letter received on April 8, 2002, the respondent requested that interest be
paid on the retroactive pay, for the period of January 5, 1993, to March 13,
2002. The applicant denied this request, and the respondent eventually filed a
grievance with the PSLRB on October 26, 2004, under the Public Service
Labour Relations Act, R.S.C. 1985, c. P-35 (hereinafter the “PSLRA”).
[5]
On
April 1, 2005, a new Public Service Labour Relations Act (hereinafter
the “new Act”) was proclaimed in force. However, under section 61 of the Public
Service Modernization Act, S.C. 2003, c. 22, referrals to adjudication
under the PSLRA must be determined under the old Act.
* * * * * * *
*
[6]
On
June 28, 2007, the PSLRB allowed the grievance in part and ordered the
applicant to pay simple interest to the respondent on the salary adjustment,
for the period of 1993 to 1996.
[7]
The
adjudicator accepted the applicant’s argument that there is a common law
principle that interest is payable by the Crown only where a statute or
contract so provides. However, in keeping with Nova Scotia Government and
General Employees Union v. Nova Scotia (Public Service Commission), 2004
NSCA 55, [2004] N.S.J. No. 144 (QL), the adjudicator concluded that “the
remedial power set out in the former Act and in the collective agreement
may supplant the principle of Crown immunity”; this power was stated
in subsection 21(1) and section 96.1 of the PSLRA, which read as follows:
|
21. (1) The Board shall
administer this Act and exercise such powers and perform such duties as are
conferred or imposed on it by, or as may be incidental to the attainment of
the objects of, this Act including, without restricting the generality of the
foregoing, the making of orders requiring compliance with this Act, with any
regulation made hereunder or with any decision made in respect of a matter
coming before it.
96.1. An adjudicator has, in
relation to the adjudication, all the powers, rights and privileges of the
Board, other than the power to make regulations under section 22.
|
21. (1) La Commission met en
œuvre la présente loi et exerce les pouvoirs et fonctions que celle-ci lui
confère ou qu’implique la réalisation de ses objets, notamment en prenant des
ordonnances qui exigent l’observation de la présente loi, des règlements pris
sous le régime de celle-ci ou des décisions qu’elle rend sur les questions
qui lui sont soumises.
96.1
L’arbitre
de grief a, dans le cadre de l’affaire dont il est saisi, tous les droits et
pouvoirs de la Commission, sauf le pouvoir réglementaire prévu à l’article
22.
|
[8]
After
finding that he had the power to order interest against the Crown, the
adjudicator considered the submissions about the calculation of interest at
paragraph 63 of his decision:
In
Morgan, a majority of Federal Court of Appeal judges determined that the
compensation period begins at the time of the wrongful action. If this
reasoning is applied to this case, the employer's error occurred on
January 5, 1993, at the time of the grievor's acting appointment to a
material management officer position at the PG-02 group and level, when the
revision of his pay should have been made. The pay period is to continue
throughout the time the grievor lost pay, which would be until 1996. I
cannot grant the grievor the interest he claims for the period from 1997
to 2002 or up to the date of this decision.
[9]
Finally,
the adjudicator concluded that the respondent had not demonstrated “that awarding
compound interest is necessary to compensate for the loss suffered” and that,
therefore, simple interest would be awarded.
* * * * * * *
*
[10] The applicant
in docket T-1362-07 contends that the adjudicator erred in law and/or exceeded
his jurisdiction by ordering the employer to pay interest to the respondent. I
agree.
[11] According to
the common law principle of Crown immunity, the Crown is not required to pay
interest on monies owing, unless a statute or contract so provides. The case
law is very clear on this point. In His Majesty the King v. Roger Miller
& Sons Limited, [1930] S.C.R. 293, the Supreme Court of Canada stated
the following:
It was
argued that the interest claimed should be treated as part of the cost of the
work, and therefore is payable under the terms of the contract, but this
argument seems quite unsound. It is a mere case of moneys becoming due to
respondents at certain times and being withheld beyond the due dates, in
which case the Crown is not liable to pay interest during default except under
special circumstances such as the existence of statutory provision or
contractual obligation.
(Emphasis
is mine.)
[12] Subsequently,
in His Majesty the King v. Carroll, [1948] S.C.R. 126, the Supreme Court
of Canada again clearly affirmed:
. . . There can be no recovery of
interest against the Crown apart from contract or statute; The King v.
Racette [[1948] S.C.R. 28], and cases referred to.
[13] In Eaton
v. Canada, [1972] F.C. 185, the Federal Court of Canada unequivocally
concluded that interest could not be awarded against the federal Crown in the
context of the PSLRA. At paragraph 14, the Court determined that “[t]here is no provision for
payment of interest in the collective agreement [which was governed by
the PSLRA] or in
any relevant statute.” It is important to note that no decision to the contrary
by this Court, or even any other Court, in the specific context of the PSLRA, was
brought to my attention.
[14] This
jurisprudence was applied consistently and unequivocally by the PSLRB which,
apart from the adjudicator involved in the decision a quo, has always
held that it did not have jurisdiction to order the federal Crown to pay
interest, absent a provision to the contrary in a statute or contract (see Ogilvie
and Treasury Board (Indian and Northern Affairs), [1984] C.P.S.S.R.B. No.
122, Puxley and Treasury Board (Transport Canada), [1994] C.P.S.S.R.B.
No. 95, Dahl and Treasury Board (Agriculture Canada), [1995]
C.P.S.S.R.B. No. 59, Matthews and Canadian Security Intelligence Service,
[1999] C.P.S.S.R.B. No. 31 and Guest v. Canada Customs and Revenue Agency,
[2003] C.P.S.S.R.B. No. 73).
[15] The decisions
in Canada (Attorney General) v. Rosin, [1991] 1 F.C. 391 (C.A.), Canada
(Attorney General) v. Morgan, [1992] 2 F.C. 401 (C.A.), Autocar
Connaisseur Inc. v. Canada (Minister of Labour), [1997] F.C.J. No. 1363
(T.D.) (QL)
and Pommerleau v. Autocar Connaisseur Inc., [2000] F.C.J. No. 907
(C.A.) (QL),
cited by the adjudicator in support of his decision and relied on by counsel
for the respondent before me, were not made in the context of the PSLRA. These
decisions deal with complaints filed under the Canadian Human Rights Act
or the Canada Labour Code. The relevant provisions of these statutes
provide that “compensation” may be awarded to the complainant. In those
decisions, interest was awarded under the heading of “compensation”. In Rosin,
the Court specifically stated that “[c]ourts, including this Court, have held
that interest may be awarded in other similar contexts, under the concept of
‘compensation’, for to deny it would be to fail to make the claimant whole,
especially in these days of high interest rates.” The PSLRA does not
contain a heading for “compensation” or any other heading of a similar nature
under which a PSLRB arbitrator can award interest.
[16] In relying on
Nova Scotia Government and General Employees Union, above, the
adjudicator accepted that there is a common law principle that the Crown is not
required to pay interest on monies owing, unless this principle is supplanted
by a statute or contract that provides otherwise. However, when the adjudicator
determined, on the basis of the same case and the provisions in subsection
21(1) and section 96.1 of the PSLRA, that this common law principle was
supplanted by the PSLRA and/or the collective agreement, I am of the view that
he erred in law.
[17] Unlike the Eaton
decision, supra, the Nova Scotia Government and General Employees
Union case was not decided in the context of a federal regime and did not
deal with the power to award interest under the PSLRA. Moreover, in that
decision, the Court found, at paragraph 36, that the power to award interest
“is implied by the terms of the Civil Service Collective Bargaining Act
or by the Collective Agreement between the parties . . . Whether that power to
award interest should be implied is a matter of interpretation of the governing
statute and Collective Agreement.” In Eaton, the Federal Court
determined unequivocally that interest could not be awarded in the context of
the PSLRA. I agree with the applicant that, pursuant to that decision, there is
no implied power to award interest under the PSLRA or the collective agreement
and therefore Nova Scotia Government and General Employees Union does
not apply to decisions made in the context of the PSLRA and is not relevant in
this case.
[18] Against this
backdrop, it seems clear to me that the PSLRB adjudicator erred in law in
ordering, as he did, that the Crown pay interest to the respondent. In my view,
the adjudicator was bound by the Eaton decision, supra, the only
case that appears to have been decided in the context of the PSLRA, and which
found that this Act did not authorize awarding interest against the federal
Crown. Despite the deference that the respondent would like to see accorded to
the adjudicator in this case, I am of the view, under the circumstances, that
the intervention of this Court is warranted and that the decision, which is
erroneous in law, must be set aside.
[19] Accordingly,
the decision by the PSLRB adjudicator dated June 28, 2007, in this Court’s
docket T-1362-07 is set aside, and the matter is returned to the PSLRB for
rehearing by a different adjudicator. The application for judicial review in
docket T-1362-07 is therefore allowed, with costs against the respondent.
[20] As a result
of the foregoing, the application for judicial review in docket T-1386-07 must
necessarily be dismissed. However, there is no award of costs in this regard.
“Yvon
Pinard”
Ottawa, Ontario
January
25, 2008
Certified
true translation
Mary
Jo Egan, LLB
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