Date: 20080930
Docket: T-623-08
Citation: 2008 FC 1093
Ottawa, Ontario, September 30,
2008
PRESENT: The Honourable Mr. Justice Mandamin
BETWEEN:
MG
LUND TRUCKING INC.
Applicant
and
DARYL
A. PETERSEN
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1]
The
Applicant, MG Lund Trucking
Inc., (the “Employer”) applied for judicial review of a decision by Sean M.
Kubara (the “Referee”) made on March 18, 2008. The Referee ruled that the
Employer was not authorized to deduct $292.02 from the final paycheque to the
Respondent, Daryl A Petersen, (the “Employee”).
[2]
The
issue is whether the Referee correctly interpreted subsection 254.1(2)(c) of
the Canada Labour Code R.S., 1985, c. L-2 (the “Code”) in finding
that the deduction was not authorized.
[3]
I
have decided that the Referee’s decision is reasonable. In arriving at this
conclusion I found that the standard of review for a referee engaged in
interpreting Subsection 254.1(2) of the Code is reasonableness.
[4]
The
application for judicial review is dismissed. My reasons are set out below.
Factual Background
[5]
Mr.
Petersen approached MG Lund Trucking Inc. for a job as a truck driver on
February 21, 2006. Mr. Mel Lund, the Employer’s representative, reviewed the
employment agreement and the Gate and Driver’s Room Agreement (the “Key
Agreement”) with Mr. Petersen. He advised Mr. Petersen to read the documents
carefully and specifically told him “don’t sign anything that you don’t know
about”. Mr. Petersen acknowledged signing the employment contract and related
documents but did not recall talking about any particular clause.
[6]
Of
significance in this proceeding are the following clauses:
a.
Employment
Contract - Clause Number 6 – Violations, Roadside Inspections and Notice in
Orders
Any driver that does not turn into this office
any ticket, notice and order, roadside inspection, oversize permits (or copies)
– will pay by way of payroll deduction a fee of $100.00 for each document that
is not turned into this office. When the documents are turned in – the driver
agrees to write his “story” regarding the details involved in the issuance of
the ticket. The documents are a requirement of the National Safety Code.
b.
Employment
Contract - Clause Number 7
Should the driver leave the employ of
this Company – it is the driver’s responsibility to return the complete unit to
the Kamloops depot. It is the driver’s
responsibility to ensure all company properties in the unit are in good order.
It is a requirement that a company official meet the driver at the time of
termination to go through the unit to ensure all company property is complete
and in good condition. Should the driver not return the unit to Kamloops – there will be a fee charged
to the driver for the company to retrieve the equipment and return to Kamloops. The fee will be at $2.00
per running mile for both the highway truck and also for the passenger vehicle
to take the extra driver to return the unit to Kamloops.
c. Gate and
Driver’s Room Key Agreement
Upon leaving the employ of this company,
I agree to return the above-numbered keys to the head office of the company in
Cherry Creek, not left at the shop/yard in the black box. Failure to do so
will automatically mean a $300.00 deduction from my paycheque and my final pay
will not be received until the keys have been handed in and signed off.
[7]
At
the time he was hired Mr. Petersen was without resources and needed a job. He
asked repeatedly for an advance on his wages to cover his road trip expenses
but his requests were denied.
[8]
On
February 23, 2006, Mr. Petersen began his first road trip. He was involved in
an accident caused by inclement weather and a third party vehicle that went out
of control. The front licence plate was lost in the accident and Mr. Petersen
was ticketed at the scale going into Kamloops. He eventually
completed the trip and returned on February 25, 2006.
[9]
Upon
his return to Kamloops, Mr.
Petersen had a discussion with Mr. Michael Heeney; the result of which Mr.
Petersen quit. He told Mr. Heeney he had no money and asked if he could stay
the night in the truck. Against company policy and his better judgment Mr.
Heeney agreed. He told Mr. Petersen he could stay in the truck that night but
instructed him not to leave the yard with the truck.
[10]
The
next day the company office received a call from Mr. Petersen saying he drove
the truck from Kamloops to Penticton and that it could be
picked up at a specified location with the key under the truck floor mat. Mr.
Heeney went to Penticton to pick up the truck but the keys were not to
be found. He drove the truck back to Kamloops using a spare set of
keys he brought along.
[11]
The
police were called and Mr. Petersen was charged with theft. He pled guilty to
a lesser charge of taking a vehicle without permission as part of a plea
bargain and the theft charge was dismissed.
[12]
In
March 2006, the Employer issued a cheque to Mr. Petersen of $0.00, showing
payroll deductions for the entire amount of wages owed to him primarily based
on clause 7 in the employment contract authorizing a fee for the return of the
truck to the yard.
Procedural History
[13]
Mr.
Petersen, the Employee, filed a complaint with Human Resources and Skills
Development Canada (HRSDC) under Part 3 of the Code. The HRSDC Inspector
investigating the complaint ruled that the Employer was not entitled to make
the deduction because the Employee did not agree to the deduction in writing at
the time of the deduction. The Inspector was following the Labour Standards guideline: Interpretation,
Policy and Guidelines – IPG-60 which provides an interpretation of subsection
254.1(2)(c) to the effect that deductions authorized in writing by an employee
must be made at the time or after the pertinent event occurs.
[14]
The
Employer appealed the Inspector’s ruling and the matter came before the
Referee. The Employer submitted that it was entitled to make the permitted deductions
under section 254.1(2)(c) of the Code because Mr. Petersen provided
written authorizations for three separate deductions. These three
authorizations were pursuant to clauses 6 and 7 of the employment contract and
the provision in the Key Agreement.
The Statutory Provision
[15]
The
Canada Labour Code provides:
|
254.1 (1) No employer
shall make deductions from wages or other amounts due to an employee, except
as permitted by or under this section.
(2) The permitted deductions are
(a)
those required by a federal or provincial Act or regulations made thereunder;
(b)
those authorized by a court order or a collective agreement or other document
signed by a trade union on behalf of the employee;
(c)
amounts authorized in writing by the employee;
(d)
overpayments of wages by the employer; and
(e) other amounts prescribed by regulation.
|
254.1 (1) L’employeur ne
peut retenir sur le salaire et les autres sommes dues à un employé que les
sommes autorisées sous le régime du présent article.
(2) Les retenues autorisées sont les suivantes :
a) celles
que prévoient les lois fédérales et provinciales et leurs règlements
d’application;
b) celles
qu’autorisent une ordonnance judiciaire, ou une convention collective ou un
autre document signés par un syndicat pour le compte de l’employé;
c) celles
que l’employé autorise par écrit;
d) les
sommes versées en trop par l’employeur au titre du salaire;
e) les
autres sommes prévues par règlement.
|
(underlining added)
The Decision Under Review
[16]
In
the course of the hearing before the Referee, the Employer’s witness, Mr.
Heeney, acknowledged that Mr. Petersen had turned in the missing licence plate
ticket to him thereby satisfying his obligation under clause 6 of the
employment contract. Further, in the course of submissions, the counsel for
the Employer conceded that clause 7 imposed a fee for the cost of the return of
the truck but did not authorize a deduction from an employee’s pay. The
Referee concluded that the Key Agreement provision was the only possible basis
for authorizing the deduction. He found that Mr. Petersen signed the Key
Agreement at the time of hiring. He also found that Mr. Petersen failed to
return the keys to the head office in Cherry Creek.
[17]
The
Referee stated that the directive IPG-60 was a policy guideline and not law.
He found that subsection 254.1(2)(c) did not stipulate that the authorization
must be given at the time of the deduction or after the event. He took note of
other referee decisions allowing payroll deductions authorized in writing
before the triggering event or the time of the deduction. He noted “… an
authorization may be enforceable if it allows deduction for a specified or
determinable amount as a result of a specific future occurrence.”
[18]
The
Referee went on to conduct an analysis of the Key Agreement provision. He
observed:
Section 254.1 sets out a general rule
prohibiting deductions from wages except as provided in the subsections
including subsection (2).
The overall purpose of the Section is
protection of the employee to ensure that the employer makes payment of wages
properly due to the employee.
If the amount of the authorized deduction
is specific or readily determinable, and is truly consensual (no coercion,
economic or otherwise) then it should be enforceable whether it is contained in
the agreement or documents signed at the time of hiring, or is signed
subsequently.
[19]
The
Referee also stated:
An authorized deduction that is for the
benefit of the employee, or the mutual benefit of the employee and employer,
has a very high likelihood of being consensual. There is little or no
possibility of mischief or harm arising from allowing the employer the powerful
tool of payroll deduction where there is a benefit to the employee from such
deduction.
[20]
The
Referee canvassed decisions of other referees and concluded those cases
involved payroll deductions where a benefit devolved to the employee. He observed
that the benefit neutralized any suggestion that the authorization may not have
been consensual. He further stated there will usually be a risk that the
authorization was not fully consensual where the deduction amounts to a fine or
penalty and benefits only the employer.
[21]
The
Referee decided the authorization did not provide a benefit to Mr. Petersen. He
also concluded that the circumstances of hiring raised the possibility that the
signing of the authorization was a result of duress or unequal bargaining power
or simply because the only way for Mr. Petersen to get the job was to sign the
agreements.
[22]
The
Referee decided that the authorization in the Key Agreement signed by Mr.
Petersen did not qualify as written authorization for the deduction from wages
by the Employer under section 254.1(2)(c) because he was not satisfied that the
authorization was freely given at the time of signing.
The
Applicant’s Position
[23]
The
Employer submits that the Code is a comprehensive legislative scheme
meant to regulate labour relations and the Referee erred by importing common
law principles into an interpretation of section 254.1(2)(c) of the Code.
[24]
The
Employer submits section 254.1(2)(c) does not require an employer to provide
consideration in exchange for the authorization. The provision only requires
written authorization from the employee to allow deductions.
[25]
The
Employer further submits that the Referee erred in deciding that the Employee
had not received a benefit for the written authorization because the Employee
received the benefit of employment in return for signing the terms of the employment
contract and the Key Agreement.
[26]
The
Employer also takes issue with the suggestion that the authorization was
invalid because it was obtained under duress or coercion. The Employer relies
on Stotte v. Merit Investment Corp., [1988] O.J. No. 134 for
the proposition that the Employees’ desperation for a job was not sufficient in
law to constitute duress.
Not all pressure, economic or otherwise,
is recognized as constituting duress. It must be a pressure which the law does
not regard as legitimate and it must be applied to such a degree as to amount
to “a coercion of the will”, to use an expression found in English authorities,
or it must place the party to whom the pressure is directed in a position where
he has no “realistic alternative” but to submit to it, to adopt the suggestion
of Professor Waddams (S.M. Waddams, The Law of Contract, 2nd ed.
(1984), at p. 376 et seq.).
Standard of
Review
[27]
In
Dunsmuir v. New Brunswick, 2008 SCC 9, the
Supreme Court of Canada stated that a review in court must determine
whether the standard of review is correctness or reasonableness. The court
must determine a standard of review analysis by examining the legislative
intent and ascertaining the degree of deference to be shown to an
administrative decision.
[28]
The
court must have regard to certain factors including: the presence or absence of
a privative clause; the expertise of the tribunal; the purposes and objectives
of the legislation; and the nature of the problem, whether it is a question of
law, fact or mixed fact and law. A standard of reasonableness would apply
where:
i.
There
is a privative clause;
ii.
There
is a discrete and special administrative regime in which the decision maker as
a special expertise (labour relations for instance);
iii.
The
nature of the question of law: a question of law of central importance to the
legal system and outside the decision maker’s expertise will attract a
correctness standard; a question of law that does not rise to this level may be
compatible with the reasonableness standard where the above two factors
indicate.
Dunsmuir at para. 55.
[29]
The
Supreme Court also stated that where the courts have previously determined the
standard of review for decisions of a tribunal the reviewing court may apply
that standard without further analysis.
[30]
The
pre-Dunsmuir standard of review for referees making decisions concerning
the Code has been held as reasonableness simpliciter. H & R Transport
Ltd. v. Shaw, 2004 FC 541; and Dynamex Canada Inc. v. Mamona,
2003 FCA 248.
[31]
The
Supreme Court of Canada specifically noted in Dunsmuir, at para.
54, that a tribunal which has expertise in the subject matter of its
statute is entitled to interpret its statute on the standard of reasonableness.
It gave the example of labour relations at para. 55. The same reasoning would
apply to employment matters.
[32]
I
conclude therefore the standard of review of the Referee’s decision in
interpreting the Code regarding employment matters, specifically
subsection 254.1(2)(c), is on a standard of reasonableness.
Analysis
[33]
The
Referee is a member of a specialized tribunal with expertise in the area of employment
law. I have determined that the standard of review of its interpretation of
the Code is that of reasonableness and not correctness. Nevertheless,
if the Referee considers matters outside of its purview, its decision would be
unreasonable.
[34]
I
agree with the Employer’s submission that where the legislation is a
comprehensive scheme as it is with the Code, it would be an error to
import additional common law elements inconsistent with the plain meaning of
the statutory provisions, in this case subsection 254.1(2). However, I do not
agree that the Referee imported additional common law to the interpretation of subsection
254.1(2)(c).
[35]
The
Referee was properly engaged in interpreting subsection 254.1(2)(c) of the Code.
The subsection provides that valid deductions may be made where the deductions
are “amounts authorized in writing by the employee”. To ‘authorize’ is to give
official permission: that is to formally consent to the deduction being made.
The Referee’s reasons clearly addressed the consensual requirement of the
written authorization.
[36]
The
Referee’s discussion of a benefit was in regard to indicia of a consensual
authorization. The Referee was considering if the Employee’s written authorization
was consensual and not whether the requirement for a benefit should be imported
into subsection 254.1(2)(c).
[37]
In
fact finding, the Referee is entitled to deference. H & R Transport Ltd.
v. Shaw, above. The Referee decided that the possibility of duress
existed. While the Employer said that the Employee was given an explanation of
all clauses and told not to sign if he didn’t understand, the Employee did not
confirm that he freely consented to the terms of the Key Agreement. The
Referee had the benefit of hearing the testimony of witnesses about events at
the time of hiring. There was evidence upon which the Referee could infer the
possibility of duress in the signing of the Key Agreement: first the evidence
that the Employee repeatedly requested an advance for travel expenses; second, the
evidence that on return the Employee again requested an advance because he had not
eaten; finally, there was evidence that the now former Employee needed a place
to sleep that night because he was without funds. Clearly the Referee had
evidence upon which to reach the conclusion that the possibility of duress
existed.
[38]
An
employer may well be entitled to obtain written authorization for deduction
from wages in the event of non-return of its property, especially where it may
be put to the expense of replacing the item or in this instance also changing
locks and other keys. Where the requirement of a deduction is reasonable, the
circumstances of signing may not require close scrutiny since consent may be
reasonably inferred. That prospect does not arise when the agreement imposes
burdens on an employee beyond a simple fee and deduction from wages for
non-return.
[39]
In
Dunsmuir, the Supreme Court discussed deference and directed reviewing
courts to have “a respectful attention to the reasons offered or which could
be offered in support of a decision.” (underlining added) Dunsmuir
at para. 48.
[40]
The
Referee found that provision of keys to the Employee was integral to performing
the work as a truck driver. In that respect, the Referee reasonably concluded
the authorization in the Key Agreement was not a benefit to the Employee. The
Employer argued that the Employee received the benefit of employment. The
difficulty with that submission is that the authorization for a deduction in
the Key Agreement was not all the Employee was signing to. The Key Agreement clause
goes beyond imposing a reasonable fee and authorizing deduction of that fee for
failure to return keys. It stated: “Failure to do so will automatically mean
a $300.00 deduction from my paycheque and my final pay will not be received
until the keys have been handed in and signed off.“. The withholding of the
final paycheque is a drastic additional penalty inconsistent with the employment
contract itself. The provision for withholding final pay over and beyond
providing for a deduction negates the fundamental benefit of payment of wages
in an employment contract.
[41]
In
summary, I conclude the Referee was properly engaged in interpreting subsection
254.1(2)(c), a statutory provision closely related to the Referee’s function. The
Referee had evidence upon which he could draw the inference of the possibility
that consent was not freely given. The issue that the Referee addressed and
decided upon was the absence of indicia of a consensual authorization.
[42]
I
conclude the Referee’s decision was reasonable. The application for judicial
review is dismissed.
JUDGMENT
THIS COURT ORDERS AND
ADJUDGES that:
1.
The
application for judicial review is dismissed.
2.
I
make no order as to costs.
“Leonard S. Mandamin”
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