Date:
20130702
Docket:
T-1531-12
Citation: 2013
FC 733
Ottawa, Ontario, July 2, 2013
PRESENT: The Honourable Mr. Justice O'Reilly
BETWEEN:
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ATOMIC ENERGY OF CANADA LIMITED
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Applicant
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and
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JOSEPH WILSON
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Respondent
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REASONS FOR
JUDGMENT AND JUDGMENT
I. Overview
[1]
In
2009, the applicant, Atomic Energy of Canada Limited (AECL), dismissed Mr
Joseph Wilson without cause. AECL paid Mr Wilson 6 months’ severance pay. Mr
Wilson complained of unjust dismissal.
[2]
A
labour adjudicator appointed under the Canada Labour Code, RSC 1985, c
L-2, s 242(1) (CLC - see Annex for provisions cited) concluded that the CLC
only permits dismissals for cause. Therefore, he found that Mr Wilson’s
complaint of unjust dismissal was made out. The question of the appropriate
remedy remained. He directed the parties to discuss an appropriate remedy, and
adjourned a hearing into the issue until this application for judicial review
could be heard and decided.
[3]
AECL
argues that the adjudicator’s decision was unreasonable because it did not
accord with a proper interpretation of the CLC or the applicable jurisprudence.
It asks me to quash the adjudicator’s decision and declare its conclusions to
be wrong.
[4]
Mr
Wilson contends that the adjudicator’s decision was reasonable and that I
should dismiss AECL’s application for judicial review. Further, he argues that
this application for judicial review is premature because the adjudicator’s
decision on an appropriate remedy remains outstanding. Accordingly, AECL is seeking
judicial review on an interlocutory decision which is strongly discouraged in
the case law.
[5]
I
am satisfied that the adjudicator’s decision represented a final decision on
the merits of Mr Wilson’s complaint and, therefore, that this application for
judicial review is not premature. Further, I find that the adjudicator’s
conclusion that the CLC only provides remedies for dismissals for cause was
unreasonable. Therefore, I must allow this application for judicial review and
order the adjudicator to consider the appropriate remedy.
[6]
There
are two issues:
1. Is
this application for judicial review premature?
2.
Was
the adjudicator’s decision unreasonable?
II. The Adjudicator’s
Decision
[7]
The
adjudicator observed that there exist two streams of cases relating to
dismissals without cause. One holds that the CLC provides a remedy of notice or
severance pay for dismissals made without cause (ss 230 and 235). Another group
of cases states that, in any case where an employee challenges his or her
dismissal, the broad remedies for unjust dismissal (s 242) are available,
regardless of whether the employer paid the employee severance pay.
[8]
The
adjudicator decided that he need not resolve this issue because the Federal
Court’s decision in Redlon Agencies Ltd v Norgren, 2005 FC 804 [Redlon]
was binding on him. There, Justice John O’Keefe stated that employers cannot
avoid the unjust dismissal remedies under the CLC simply by awarding severance
pay. The adjudicator interpreted this ruling to mean that employees who have been
dismissed without cause can seek remedies for unjust dismissal. Therefore, AECL
could not lawfully dismiss Mr Wilson without just cause.
[9]
Accordingly,
the adjudicator found that AECL could not avoid a determination that Mr
Wilson’s termination was unjust simply by pointing to the severance payment
made to him. He had a valid claim that his termination was carried out without just
cause, which should result in a remedy under the CLC.
III.
Issue
One – is the application for judicial review premature?
[10]
Mr
Wilson argues that this application for judicial review was brought
prematurely. The adjudicator had not completed his task. While he had decided
the question of whether Mr Wilson’s dismissal was unjust – it was, the
adjudicator said, because AECL had offered no cause for firing him – he left
open the question of the appropriate remedy. Therefore, according to Mr Wilson,
AECL should have awaited the final outcome before commencing this application.
[11]
In
my view, this application is not premature.
[12]
As
a general proposition, courts discourage the breaking up of proceedings into
discrete parcels and encourage parties to finish their business in the tribunal
below before coming to court: Canada (Border Services Agency) v CB
Powell Ltd v, 2010 FCA 61, at paras 31-32.
[13]
However,
courts have also recognized exceptions. Special circumstances can sometimes
justify making an application for judicial review even though the tribunal’s
work has not been completed: Powell, above, at para 33.
[14]
Here,
as I see it, the adjudicator had, in effect, bifurcated the proceeding before
him. He had made a final decision on the merits of Mr Wilson’s complaint and
left open the question of remedy. He hoped the parties might settle that issue
making further proceedings unnecessary.
[15]
In
this situation, I believe it was proper for AECL to pursue its application for
judicial review of the adjudicator’s decision that Mr Wilson had been unjustly
dismissed. The adjudicator had made a final determination on the substance of
the matter before him. Further, had AECL waited until the adjudicator had
decided the issue of remedy, the legal question to which it sought an answer
might have been moot (eg, if the adjudicator found that the severance
payment AECL had already made to Mr Wilson amounted to just compensation).
Under that scenario, AECL would likely not have been able to challenge the
adjudicator’s finding that the CLC only recognizes dismissals with cause.
[16]
Dealing
with this application for judicial review at this point in time does not raise
issues of additional costs or delay that animate the general rule against
fragmentation of administrative proceedings. The adjudicator expressly held off
deciding the issue of remedy while this proceeding was pending. Further, this
is not a situation where the applicant should have waited to see whether it
might ultimately have succeeded before the tribunal; a ruling on the merits had
already been made against it.
[17]
Therefore,
I am satisfied that this application for judicial review is not premature.
IV.
Issue
Two – Was the adjudicator’s decision unreasonable?
[18]
Mr
Wilson argues that the adjudicator reasonably concluded that he was bound by the
Redlon decision.
[19]
I
disagree. Redlon does not stand for the proposition for which the
adjudicator cited it – that is, that the CLC only permits dismissals for cause.
[20]
In
Redlon, the employer had dismissed an employee based on its belief that
he had reached retirement age under provincial law. The employer also had some
concerns about the employee’s ability to continue in the position.
[21]
The
employee complained on the basis that his employment was governed by the CLC,
not provincial law. Further, he argued that the employer had not proved that he
was unable to perform the job.
[22]
The
adjudicator agreed that the CLC applied to the employer. Further, she concluded
that the employer had not shown just cause for dismissing its employee and
awarded damages of $5,500 for unjust dismissal.
[23]
On
judicial review, the employer argued that the adjudicator erred by ordering it
to pay compensation for unjust dismissal since it did not have an obligation to
pay severance. At the time, the CLC provided that an employer who dismissed a
person who was entitled to a pension was deemed not to have terminated that
person’s employment (s 235(2)(b) – now repealed). Therefore, that person
was not entitled to severance pay.
[24]
Justice
O’Keefe concluded that the adjudicator’s award of compensation was not
severance pay. It was compensation for unjust dismissal. He also deferred to
the adjudicator’s factual finding that the employer had not shown just cause
for dismissing its employee. In turn, the award of damages was not
unreasonable. Justice O’Keefe found that, although the employer did not have to
pay severance under the CLC, it did have to pay compensation for unjust
dismissal. In that context, he stated that the employer could not “avoid the
operation of the unjust dismissal provisions by resorting to the severance
payment provisions” (at para 39).
[25]
Justice
O’Keefe did not state that the CLC only recognizes dismissals for cause. His
general statement that making a severance payment is not a defence against an
award of damages for unjust dismissal is uncontroversial. This simply means
that where an adjudicator concludes that the employer’s reason for dismissing an
employee does not stand up, the employee may be entitled to compensation in an
amount greater than any severance payment the employer may have made. However,
it does not follow from that statement that employers governed by the CLC
cannot dismiss employees without cause. Justice O’Keefe simply did not, and did
not have to, deal with that issue on the facts before him. No severance payment
had been made by the employer, so there was no basis for any suggestion that
the employer had evaded payment of compensation for unjust dismissal by having
made a severance award. The fact that the employee was not entitled to
severance did not mean that he could not obtain compensation for unjust
dismissal.
[26]
Accordingly,
the adjudicator here unreasonably relied on Redlon for the proposition
that employers governed by the CLC must show just cause for all dismissals. The
adjudicator also cited two arbitration decisions in support of his conclusion
that the CLC only recognizes dismissals for just cause. But those cases do not
stand for that proposition either.
[27]
In
the first (Chan v Okanagan Indian Band, [2010] CLAD No 192 [Chan]),
the complainant contended that he had been unjustly dismissed when his
three-year contract was terminated after two years, even though his employer
had agreed to pay the severance pay owed to him under the contract. Before the
adjudicator, the employer attempted to withdraw its initial contention that it
had just cause to terminate the complainant. The adjudicator found that neither
the termination of the contract with severance pay, nor the employer’s
withdrawal of its allegation of cause, prevented consideration as to whether
the employee’s dismissal was unjust. The adjudicator stated that “payment of
the minimum severance required under the Code does not automatically
exclude a determination that a dismissal is unjust for the purposes of Division
XIV, even where an employee has agreed to such an arrangement in his contract
of employment” (at para 33). Simply put, where the employer alleged that it had
cause to dismiss the employee, the adjudicator found that the payment of
severance does not necessarily prevent an inquiry into whether the employee had
been unjustly dismissed. He did not state that the CLC only permits dismissals
for cause.
[28]
In
the second case (Connors v H&R Transport Ltd, [2011] CLAD No 355 [Connors]),
the complainant argued that he had been unjustly dismissed when his employer
concluded that he had failed to observe company policies and practices. The
employer paid him about one month’s wages as severance pay. Before the
adjudicator, the employer attempted to argue that the dismissal was actually
without cause and, therefore, that the complainant was only entitled to
severance pay, not compensation or any other supplementary remedy. The
adjudicator concluded that the employer could not resile from its initial
suggestion that the complainant was dismissed for cause. The question,
therefore, was whether the employer’s reason for terminating the complainant
was just. The adjudicator found that the employer’s reason was not supported by
the evidence and, therefore, did not amount to just cause. It ordered payment
of an additional month’s wages as compensation. The adjudicator noted that “the
expression ‘unjust dismissal’ bypasses the entitlement of an employer to
terminate an employee at any time without cause provided the employee is
compensated by way of severance pay or damages in lieu of notice” (at para 42).
Out of context, that statement sounds supportive of the adjudicator’s position
in Mr Wilson’s case. However, the adjudicator went on to explain that the
question of the justness of the complainant’s dismissal must be analyzed even
though the employer had paid him severance pay. Again, as in Chan, the adjudicator
was simply noting that the payment of severance does not prevent consideration
of the justness of an employee’s dismissal in cases where it is in issue. He
did not state that there can be no dismissal without cause under the CLC.
[29]
Neither
of these cases supports the proposition that the CLC only recognizes dismissals
for cause. Chan tells us that payment of severance does not preclude an
inquiry into whether the employee was unjustly dismissed. Connors holds
that an employer who purports to dismiss an employee for cause cannot avoid
paying compensation when the evidence does not show that the dismissal was
just, even though the employee had been given severance pay.
[30]
Accordingly,
I see no evidence of the two divergent camps to which the adjudicator referred
in his decision. Neither of the arbitral decisions he cited for the proposition
that the CLC only permits dismissals for cause actually says that.
[31]
I
also note that the only arbitration decision cited by Justice O’Keefe in Redlon
was also cited in Connors: Goodwin v Conair Aviation Ltd, [2002]
CLAD No 602. There, the employer attempted to characterize the complainant’s
dismissal as being without cause, yet identified a number of reasons for its
decision to terminate the complainant’s employment. The adjudicator
distinguished between economic and administrative dismissals, on the one hand,
and those based on alleged cause. He found that employers could not, in
effect, contract out of the provisions of the CLC that provide remedies for
unjust dismissal, or simply avoid them by providing severance pay. In the
result, the adjudicator found that the employer’s reasons for dismissing the
complainant were insufficient and, therefore, unjust. Again, the decision does
not stand for the proposition that employers governed by the CLC can only
dismiss employees for just cause.
[32]
Mr
Wilson also relied heavily on Justice Marc Nadon’s decision in Wolf Lake First Nation v Young [1997] FCJ No 514 (FCTD) (QL), in
support of his contention that the CLC only permits dismissals for just cause.
I would first note that Justice Nadon’s discussion of this issue was purely
obiter. He concluded that the application for judicial review before him was
made out of time (at paras 11-12). However, he undertook to make a “few brief
remarks” on the merits on the case. In the passage relied on by Mr Wilson,
Justice Nadon observed that a person who has been unjustly dismissed must be
compensated with more than mere severance pay. Such a person has suffered a
wrong and should be “compensated for having been mistreated” (at para 47).
[33]
Justice
Nadon’s remarks were made under the heading “Quantum”. He was discussing the
question of the appropriate damages for someone who had been wrongly dismissed
for cause. He was merely pointing out that compensation beyond severance pay
would be an appropriate remedy in that situation. He specifically distinguished
between administrative dismissals, where severance pay was the appropriate
remedy, and other forms of unjust dismissal, where further compensation would
be required. Nowhere does he state that the CLC only permits dismissals for cause.
[34]
Therefore,
as I see it, the CLC sets out the following regime for dismissals.
[35]
An
employer can dismiss an employee without cause so long as it gives notice or
severance pay (ss 230, 235). If an employee believes that the terms of his or
her dismissal were unjust, he or she can complain (s 240). The only exceptions to
the general right to make a complaint are where the dismissal resulted from a
lay-off for lack of work or a discontinuance of the employee’s position, or the
employee has some other statutory remedy (s 242(3.1)).
[36]
In
addition, an employee can complain if he or she believes that the reason given
by the employer for the dismissal was unjustified or if the dismissal is
otherwise unjust (eg, based on discrimination or reprisal) (s
240(1)). If the adjudicator appointed to entertain the complaint concludes on
any basis that the dismissal was unjust, he or she has broad remedial powers to
compensate the employee, reinstate the employee, or grant any other suitable
remedy (s 242(4)).
[37]
The
fact that an employer has paid an employee severance pay does not preclude an
adjudicator from granting further relief where the adjudicator concludes that
the dismissal was unjust. Similarly, there is no basis for concluding that the
CLC only permits dismissals for cause. That conclusion would fail to take
account of the clear remedies provided in ss 230 and 235 (ie, notice and
severance) for persons dismissed without cause.
[38]
My
construction of the CLC is supported by the following arbitral decisions: Halkovich
v Fairford First Nation, [1998] CLAD No 486, at paras 99-110; D McCool
Transport Ltd v Bosma, [1998] CLAD No 315, at para 15; and Chalifoux v
Driftpile First Nation-Driftpile River Band No 450, [2000] CLAD No 368, at
paras 12-13, upheld on other grounds in Chalifoux v Driftpile First Nation,
2001, FCT 785, and Chalifoux v Driftpile First Nation, 2002 FCA 521; and
Prosper v PPADC Management Co, [2010] CLAD No 430, at para 16.
[39]
I
also note that if Parliament’s intention had been to create in Part III of the
CLC a regime under which employers could only dismiss employees for cause, it
obviously would not have included ss 230 and 235. Further, a desire to create
such a regime could easily have been expressed, as it is in the Financial
Administration Act, RSC 1985, c F-11, s 12(3), and the Proceeds of Crime
(Money Laundering) and Terrorist Financing Act, SC 2000, c 17, s 49(3)(b).
[40]
Accordingly,
I must conclude that the adjudicator’s decision was unreasonable. Under the
circumstances, it is unnecessary to order a new hearing before a different
adjudicator. Since the issue of remedy is still outstanding, it simply remains
for the adjudicator to decide whether the terms of Mr Wilson’s dismissal were
just.
[41]
Accordingly,
I would remit this matter to the adjudicator for a decision on the appropriate
remedy.
IV. Conclusion and
Disposition
[42]
This
application was not brought prematurely because the adjudicator had arrived at
a final decision on the merits of Mr Wilson’s complaint. However, I find that
the adjudicator unreasonably decided that he was bound by the Redlon
decision to conclude that the CLC only permits dismissals for cause. That case
simply does not stand for that broad proposition.
[43]
Accordingly,
I must allow this application. I would refer the matter back to the adjudicator
to determine whether the terms of Mr Wilson’s severance were unjust. However, I
make no order for costs against Mr Wilson because this application permitted
the resolution of an important legal issue applicable well beyond the dispute
between the parties.
JUDGMENT
THIS
COURT’S JUDGMENT is that:
1.
The
application for judicial review is allowed;
2.
The
matter is returned to the adjudicator to determine an appropriate remedy; and
3.
There
is no order as to costs.
“James
W. O’Reilly”
Annex
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Canada Labour Code, RSC, 1985, c L-2
Division X: Individual Terminations of Employment
Notice or wages in lieu of notice
230.
(1) Except where subsection (2) applies, an employer who terminates the
employment of an employee who has completed three consecutive months of
continuous employment by the employer shall, except where the termination is
by way of dismissal for just cause, give the employee either
(a)
notice in writing, at least two weeks before a date specified in the notice,
of the employer’s intention to terminate his employment on that date, or
(b)
two weeks wages at his regular rate of wages for his regular hours of work,
in lieu of the notice.
…
Division XI: Severance Pay
Minimum rate
235.
(1) An employer who terminates the employment of an employee who has
completed twelve consecutive months of continuous employment by the employer
shall, except where the termination is by way of dismissal for just cause,
pay to the employee the greater of
(a)
two days wages at the employee’s regular rate of wages for his regular hours
of work in respect of each completed year of employment that is within the
term of the employee’s continuous employment by the employer, and
(b)
five days wages at the employee’s regular rate of wages for his regular hours
of work.
…
Division XIV: Unjust Dismissal
Complaint to inspector for unjust dismissal
240. (1) Subject to subsections (2) and 242(3.1), any person
(a)
who has completed twelve consecutive months of continuous employment by an
employer, and
(b)
who is not a member of a group of employees subject to a collective
agreement,
may
make a complaint in writing to an inspector if the employee has been
dismissed and considers the dismissal to be unjust.
…
Reference to adjudicator
242.
(1) The Minister may, on receipt of a report pursuant to subsection 241(3),
appoint any person that the Minister considers appropriate as an adjudicator
to hear and adjudicate on the complaint in respect of which the report was
made, and refer the complaint to the adjudicator along with any statement
provided pursuant to subsection 241(1).
Powers of adjudicator
(2)
An adjudicator to whom a complaint has been referred under subsection (1)
(a)
shall consider the complaint within such time as the Governor in Council may
by regulation prescribe;
(b)
shall determine the procedure to be followed, but shall give full opportunity
to the parties to the complaint to present evidence and make submissions to
the adjudicator and shall consider the information relating to the complaint;
and
(c)
has, in relation to any complaint before the adjudicator, the powers
conferred on the Canada Industrial Relations Board, in relation to any
proceeding before the Board, under paragraphs 16(a), (b) and (c).
Decision of adjudicator
(3)
Subject to subsection (3.1), an adjudicator to whom a complaint has been
referred under subsection (1) shall
(a) consider whether the
dismissal of the person who made the complaint was unjust and render a
decision thereon; and
(b) send a copy of the
decision with the reasons therefor to each party to the complaint and to the
Minister.
Limitation on complaints
(3.1)
No complaint shall be considered by an adjudicator under subsection (3) in
respect of a person where
(a)
that person has been laid off because of lack of work or because of the
discontinuance of a function; or
(b)
a procedure for redress has been provided elsewhere in or under this or any
other Act of Parliament.
Where unjust dismissal
(4)
Where an adjudicator decides pursuant to subsection (3) that a person has
been unjustly dismissed, the adjudicator may, by order, require the employer
who dismissed the person to
(a)
pay the person compensation not exceeding the amount of money that is
equivalent to the remuneration that would, but for the dismissal, have been
paid by the employer to the person;
(b)
reinstate the person in his employ; and
(c)
do any other like thing that it is equitable to require the employer to do in
order to remedy or counteract any consequence of the dismissal.
|
Code canadien du travail, LRC (1985), ch L-2
Section X : Licenciements
individuels
Préavis ou indemnité
230. (1) Sauf cas prévu au
paragraphe (2) et sauf s’il s’agit d’un congédiement justifié, l’employeur
qui licencie un employé qui travaille pour lui sans interruption depuis au
moins trois mois est tenu :
a) soit de donner à
l’employé un préavis de licenciement écrit d’au moins deux semaines;
b) soit de verser, en
guise et lieu de préavis, une indemnité égale à deux semaines de salaire au
taux régulier pour le nombre d’heures de travail normal.
[…]
Section XI : Indemnité de
départ
Minimum
235. (1) L’employeur qui licencie
un employé qui travaille pour lui sans interruption depuis au moins douze
mois est tenu, sauf en cas de congédiement justifié, de verser à celui-ci le
plus élevé des montants suivants :
a) deux jours de salaire, au
taux régulier et pour le nombre d’heures de travail normal, pour chaque année
de service;
b) cinq jours de salaire, au
taux régulier et pour le nombre d’heures de travail normal.
[…]
Section XIV : Congédiement
injuste
Plainte
240. (1) Sous réserve des
paragraphes (2) et 242(3.1), toute personne qui se croit injustement
congédiée peut déposer une plainte écrite auprès d’un inspecteur si :
a) d’une part, elle travaille
sans interruption depuis au moins douze mois pour le même employeur;
b) d’autre part, elle ne fait
pas partie d’un groupe d’employés régis par une convention collective.
[…]
Renvoi à un arbitre
242. (1) Sur réception
du rapport visé au paragraphe 241(3), le ministre peut désigner en qualité
d’arbitre la personne qu’il juge qualifiée pour entendre et trancher
l’affaire et lui transmettre la plainte ainsi que l’éventuelle déclaration de
l’employeur sur les motifs du congédiement.
Pouvoirs de l’arbitre
(2) Pour l’examen du cas dont
il est saisi, l’arbitre :
a) dispose du délai fixé par
règlement du gouverneur en conseil;
b) fixe lui-même sa procédure,
sous réserve de la double obligation de donner à chaque partie toute
possibilité de lui présenter des éléments de preuve et des observations,
d’une part, et de tenir compte de l’information contenue dans le dossier,
d’autre part;
c) est investi des pouvoirs
conférés au Conseil canadien des relations industrielles par les alinéas 16a),
b) et c).
Décision de l’arbitre
(3) Sous réserve du paragraphe
(3.1), l’arbitre :
a) décide si le congédiement
était injuste;
b) transmet une copie de sa
décision, motifs à l’appui, à chaque partie ainsi qu’au ministre.
Restriction
(3.1) L’arbitre ne peut
procéder à l’instruction de la plainte dans l’un ou l’autre des cas suivants
:
a) le plaignant a été licencié
en raison du manque de travail ou de la suppression d’un poste;
b) la présente loi ou une autre
loi fédérale prévoit un autre recours.
Cas de congédiement injuste
(4) S’il décide que le
congédiement était injuste, l’arbitre peut, par ordonnance, enjoindre à
l’employeur :
a) de payer au plaignant une
indemnité équivalant, au maximum, au salaire qu’il aurait normalement gagné
s’il n’avait pas été congédié;
b) de réintégrer le plaignant
dans son emploi;
c) de prendre toute autre mesure
qu’il juge équitable de lui imposer et de nature à contrebalancer les effets
du congédiement ou à y remédier.
|
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