Date:
20130828
Docket:
T-2124-12
Citation:
2013 FC 909
[UNREVISED
ENGLISH CERTIFIED TRANSLATION]
BETWEEN:
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PIERRETTE CONNELLY
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Applicant
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and
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SOCIÉTÉ DE
COMMUNICATION ATIKAMECKW-MONTAGNAIS
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Respondent
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REASONS FOR ORDER
de
MONTIGNY J.
[1]
On
this application for judicial review, the applicant is appealing from a
decision made by Adjudicator François G Fortier on October 29
of last year dismissing her unjust dismissal complaint on the ground that she
was not dismissed but laid off because her position was abolished.
[2]
Subsequent
to the hearing of this application for judicial review on July 11, I
indicated to the parties that the application was allowed and that the matter
would be returned to another adjudicator for redetermination of the complaint.
What follows are my reasons for arriving at this decision.
Facts
[3]
The
applicant, Pierrette Connelly, worked for the Société de communication
Atikamekw-Montagnais (SOCAM) from 1994 to 2011. SOCAM is a non‑profit organization
whose mission is to develop media communications in various Atikamekw and Innu
communities. The applicant served as office clerk and receptionist before being
appointed project manager in 2006.
[4]
The
evidence shows that the relationship between the applicant and the general
manager, Bernard Hervieux, had been strained since at least the month of
June 2002. The respondent even offered the applicant money so that she would
leave her employment voluntarily nine months prior to abolishing her position.
[5]
On
February 18, 2011, SOCAM’s board of directors decided, by means of a
resolution, to abolish the position of project manager. The resolution reads as
follows:
[translation]
WHEREAS senior management
conducted an internal analysis of SOCAM’s current and future needs and
resources;
WHEREAS as part of this
analysis and considering SOCAM’s finances, it appears that the position of
project manager is no longer viable or justified in the organization and that a
restructuring is required;
WHEREAS the directors considered
various options and found it appropriate and necessary to abolish the position
of project manager;
THEREFORE, ON MOTION DULY MOVED AND SECONDED, BE IT
RESOLVED
1.
to
abolish the position of project manager at
SOCAM;
2. to authorize the
general manager to take the necessary steps to abolish the position of project
manager in accordance with the applicable rules;
. . .
[6]
Accordingly,
on February 28, 2011, Mr. Hervieux informed the applicant in writing
that her position was abolished and that she was being let go that day. The
relevant portion of the letter reads as follows:
[translation]
This is to advise you that we have decided to
abolish your position of project manager and, as a result, to terminate your
employment relationship with SOCAM.
This notice of layoff results from the decision by
the board of directors to carry out some administrative restructuring in the
organization, which led to the position of project manager being abolished.
This decision takes effect immediately.
Indeed, after an analysis, it unfortunately appears
that your position is no longer justified or viable in light of SOCAM’s current
and future financing, needs and resources as well as the objectives and
functions associated with the position of project manager.
Accordingly, I have the authorization and the
mandate to determine with you the terms and conditions with respect to the
monies you are entitled to under our internal policies and the Act (notice,
severance pay and vacation).
. . .
[7]
On
April 1, 2011, the applicant lodged an unjust dismissal complaint under
section 240 of the Canada Labour Code, RSC 1985, c L-2 (the Code).
Impugned decision
[8]
The
hearing before the adjudicator took place on March 14 and April 4,
2012. Over those two days, the adjudicator heard the testimony of the applicant,
Bernard Hervieux and Johanne Dionne, SOCAM’s head of finance. The
testimony heard by the adjudicator was not recorded.
[9]
The
adjudicator issued his decision on October 29, 2012. Applying
subsection 242(3.1)(a) of the Code, pursuant to which the
adjudicator may not consider a complaint where a person has been laid off
because of lack of work or the discontinuance of a function, he dismissed the
applicant’s complaint on the ground that she had not been dismissed but laid
off because of the discontinuance of a function. The adjudicator’s analysis is
brief and is contained in the few paragraphs reproduced below:
[translation]
IV. DECISION AND REASONS:
The adjudicator must determine whether PIERRETTE
CONNELLY was the victim of an unjust dismissal as she claims or whether the
employer abolished her position.
After analyzing the evidence, the testimony heard
and the authorities submitted, I am of the view that PIERRETTE CONNELLY was not
the victim of an unjust dismissal on the part of the employer; she was laid off
when her position was abolished.
Consequently, the adjudicator cannot consider her
complaint.
I have arrived at this conclusion for the following
reasons.
This is not a fictional abolition of a position.
From the testimony heard, there is no basis for the
adjudicator to assume that the employer was acting in bad faith in abolishing
the position of project manager as it did.
The evidence established that the employer
reorganized duties in order to distribute money among the various positions and
services.
This is strictly a management right of the employer
to decide how money is distributed among the various positions and services. In
this case, it was done in order to balance the finances of the business, which
was in a difficult situation.
Issues
[10]
Three
issues must be dealt with in this dispute:
(a) What
is the appropriate standard of review?
(b) Did the adjudicator make a reviewable error in his interpretation
of section 242(3.1)(a) of the Code?
(c) Did the adjudicator make unreasonable findings of fact?
Analysis
(a) What is the appropriate standard of review?
[11]
The
parties agree that the reasonableness standard applies to the second issue, and
I concur. It is settled law that deference is required where the judicial
review deals with questions of fact. In such cases, the Court will intervene
only if the decision does not fall within a range of possible acceptable
outcomes which are defensible in respect of the facts and law or if the
justification for the decision and the transparency and intelligibility of the
decision‑making process are deficient: Dunsmuir v New Brunswick, 2008
SCC 9 at para 47 and 53, [2008] 1 S.C.R. 190 [Dunsmuir]; Stirbys v
Assembly of First Nations, 2011 FC 42 at para 14, [2011] FCJ No 66 (QL); Ocean
Services Ltd v Guenette, 2010 FC 188 at para 24, [2010] FCJ No 214 (QL) [Ocean
Services ]; Kassab v Bell Canada, 2008 FC 1181 at para 28, [2008] FCJ
No 1503 (QL).
[12]
However,
the parties do not agree on the appropriate standard of review for the first
issue. The applicant submits that the interpretation of subsection 242(3.1)
of the Code is a question of law that goes to the jurisdiction of the
adjudicator and that therefore it must be reviewed on a correctness standard.
The respondent, for its part, emphasizes the adjudicator’s expertise and the
fact that the interpretation of this subsection is at the very heart of his
mandate, and thus the appropriate standard is reasonableness. On this point, I
am of the view that the respondent’s position must prevail.
[13]
It
is true that the jurisprudence has fluctuated somewhat on this issue. The
applicant relied in particular on Ocean Services, above, in which
Justice Mandamin applied the correctness standard to the question of
whether the adjudicator had erred in finding that he had jurisdiction to hear
the respondent’s unjust dismissal complaint, on the ground that the issue was
jurisdiction. Other judgments, for the most part prior to Dunsmuir, above,
are along the same lines: see, inter alia, Widrig v Regroupement
Mamit Innuat Inc, 2007 FC 1224 at para 25, [2007] FCJ No 1582 (QL);
Waywayseecappo First Nation v Cooke, 2010 FC 101 at para 17, [2010] FCJ No
91 (QL); Thomas v Enoch Cree Nation Band, 2003 FCT 104 at para 31,
[2003] FCJ No 153 (QL); aff by 2004 FCA 2, [2005] FCJ No 3 (QL); Perswain v
Manitoba Assn of Native Fire Fighters Inc., 2003 FCT 364 at para 22, [2003]
FCJ No 533 (QL).
[14]
However,
I feel that I am bound by the more recent Federal Court of Appeal decision on
this same question in Canadian Imperial Bank of Commerce v Muthiah, 2011
FCA 276 at para 4, [2011] FCJ No 1426 (QL). On that occasion, the Court clearly
stated that the appropriate standard of review for an adjudicator’s
interpretation of section 242(3.1) is reasonableness. Moreover, this
decision appears to me to be completely consistent with the Supreme Court of
Canada decision in Canada (Canadian Human Rights Commission) v Canada (Attorney
General), 2011 SCC 53, [2011] 3 S.C.R. 471, where the highest court clarified
its position on what is meant by a question of jurisdiction. On this occasion,
the Court wrote:
18. Dunsmuir recognized that the standard of
correctness will continue to apply to constitutional questions, questions of
law that are of central importance to the legal system as a whole and that are
outside the adjudicator’s expertise, as well as to “[q]uestions regarding the
jurisdictional lines between two or more competing specialized tribunals”
(paras. 58, 60-61; see also Smith v. Alliance Pipeline Ltd., 2011 SCC 7,
[2011] 1 S.C.R. 160, at para. 26, per Fish J.). The standard of
correctness will also apply to true questions of jurisdiction or vires.
In this respect, Dunsmuir expressly distanced itself from the extended
definition of jurisdiction and restricted jurisdictional questions to those
that require a tribunal to “explicitly determine whether its statutory grant of
power gives it the authority to decide a particular matter” (para. 59; see also
United Taxi Drivers’ Fellowship of Southern Alberta v. Calgary (City),
2004 SCC 19, [2004] 1 S.C.R. 485, at para. 5).
See also: Alberta (Information and Privacy
Commissioner) v Alberta Teachers’ Association, 2011 SCC 61 at para 30,
[2011| 3 SCR 654.
[15]
In
this case, we are clearly not dealing with a true question of jurisdiction as
the Supreme Court described in the above‑noted judgments. It is clear
that Parliament conferred on adjudicators the power to determine whether a
complainant was laid off or dismissed. There is no doubt that this is a
question of law regarding the interpretation of the home statute from which
adjudicators derive their mandate. Moreover, the Code contains a
watertight privative clause in section 243 that shows Parliament’s
intention to put adjudicators’ decisions out of reach of the courts except in
the clearest cases of abuse or excess of jurisdiction. Accordingly, the first
question must also be analyzed by applying the reasonableness standard.
(b) Did the adjudicator commit a reviewable error in his
interpretation of section 242(3.1)(a) of the Code?
[16]
Subsection 242(3.1)(a)
sets out two situations in which the adjudicator must refrain from considering
an unjust dismissal complaint:
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DIVISION XIV
UNJUST
DISMISSAL
…
Limitation on complaints
242.
(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.
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SECTION XIV
CONGÉDIEMENT
INJUSTE
[…]
Restriction
242. (3.1)
The adjudicator 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.
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[17]
The
principles that apply to the interpretation of this provision are well
established and were succinctly summarized by Justice Pinard in Kassab v
Bell Canada, 2008 FC 1181, [2008] FCJ No 1503 (QL):
[24] For an employer to rely on subsection 242(3.1)
of the Canada Labour Code, it has to show two things: “first, an
economic justification for the layoff; and second, a reasonable explanation for
the choice of the employees to be laid off” (Enoch Cree Nation Band v.
Arleen Thomas, 2004 FCA 2 at paragraph 5, [2004] F.C.J. No. 3
(C.A.) (QL)).
[25] When an employer proves these facts, it is up
to the complainant to persuade the adjudicator that “the otherwise justifiable action of the employer is a ‘sham’, a
‘subterfuge’, ‘malicious’ or ‘covert’ ”, which may be the case if the
set of activities performed by the laid-off employee is handed over in its
entirety to another person (Flieger et al. v. New Brunswick, [1993] 2
S.C.R. 651).
[18]
In
other words, the protection against unjust dismissal will not come into play if
the loss of employment results from economic circumstances (lack of work or the
discontinuance of a function). Nonetheless, the employer has the burden of
establishing that these circumstances motivated its decision and that there is
a reasonable explanation for the choice of the employee who was dismissed.
[19]
On
this point, it is interesting to note that the concept of “poste” [position]
in French has been assimilated with the concept of “fonction” [function].
This is what the Supreme Court of Canada said on this subject:
[27] Therefore, a “discontinuance of a function”
will occur when that set of activities which form an office is no longer
carried out as a result of a decision of an employer acting in good
faith. For example, if a particular set of activities is merely handed
over in its entirely to another person, or, if the activity or duty is simply
given a new and different title so as to fit another job description then there
would be no “discontinuance of a function”. On the other hand, if the
activities that form part of the set or bundle are divided among other people
such as occurred in Mudarth, supra, there would be a “discontinuance of
a function”. Similarly, if the responsibilities are decentralized, as
happened in Coulombe, supra, there would also be a “discontinuance of a
function”.
Flieger v New Brunswick, [1993] 2 S.C.R. 651, at p 664.
[20]
Moreover,
an adjudicator is not required to accept the explanation provided by the
employer to justify the choice of the employee who was dismissed and must
assess the bona fides of its reasons. The employer must prove that the alleged
economic circumstances were “the real, essential, operative reason for the
termination of his employment”: Sedpex Inc v Canada (Adjudicator appointed
under the Canada Labour Code), [1989] 2 FC 289 at para 13. See also Thomas
v Enoch Cree Nation Band at para 35 and 40; McMurtry v Air Canada,
[2002] CLAD No 536; Michel Coutu, Julie Bourgault and Annick Desjardins, Droit
fédéral du travail, Éditions Yvon Blais, 2011, pp 139‑140.
[21]
It
is only when the employer establishes these two facts (economic circumstances
and reasonable choice of employee laid off) that the burden of proof shifts and
the employee affected by the lay‑off must prove that his or her layoff
was a “sham”, a “subterfuge”, “malicious” or “covert”.
[22]
In
this case, I concur with counsel for the applicant that the adjudicator made a
number of errors in his interpretation of paragraph 242(3.1)(a) of
the Code. First, the adjudicator merely stated that the applicant’s
position was abolished in order to balance the finances of the business, which
was in a difficult situation, and that it reorganized duties to save money.
However, he said nothing about the reasons that led SOCAM to abolish the
applicant’s position and therefore did not rule on the issue of whether
economic circumstances were the real reason for her layoff.
[23]
Moreover,
the adjudicator seems to have reversed the burden of proof because he began his
analysis by writing that the applicant had not established that the employer
had acted in bad faith in deciding to abolish her position. It therefore
appears that the lack of evidence that the employer had acted in bad faith was
fatal for the applicant. However, it was incumbent on the employer to establish
on a balance of probabilities that it had acted in good faith before the burden
of establishing the contrary was transferred to the employee.
[24]
These
two errors of law are flagrant and appear unreasonable to me, not only because
the adjudicator’s findings do not fall within a range of possible acceptable
outcomes that are defensible in respect of the law, but also because the
justification provided by the adjudicator and the intelligibility of his
reasons are deficient. Accordingly, I am of the view that the decision that is
the subject of this application for judicial review must be set aside on the
basis of this ground alone.
(c) Did
the adjudicator make unreasonable findings of fact?
[25]
Here
again, the adjudicator made a number of errors in assessing the facts. First,
he accepted the respondent’s submission that it was having financial
difficulties even though no evidence to that effect had been adduced. Although
the decision to abolish the applicant’s position was made by the board of
directors, none of the board members testified before the adjudicator. As for
the general manager, Bernard Hervieux, he was unable to respond to questions
because he was not a member of the board of directors. Last, the minutes of the
board of directors’ meeting at which the applicant’s position was abolished
were not filed in evidence. To repeat the words of Messrs. Sopinka and
Lederman in their text, The Law of Evidence in Civil Cases, Toronto,
Butterworths, 1974 (as reproduced in Norway House v Canada (Adjudicator, Labour
Code), (TD), [1994] 3 FC 376, p 414), “[i]t is well recognized that
the failure of a party or a witness to give evidence, which it was in the power
of the party or witness to give and by which the facts might have been
elucidated, justifies the court in drawing the inference that the evidence of
the party or witness would have been unfavourable to the party to whom the
failure was attributed.”
[26]
In
addition to the fact that none of the members of the board of directors
testified, no analysis of SOCAM’s current and future needs and resources was
filed in evidence even though the board of director’s decision was based on
this type of analysis, according to the wording of the board of directors’
resolution adopted on February 18, 2011, cited above at paragraph 5
of these reasons.
[27]
As
for SOCAM’s fear that Heritage Canada would cut off its subsidies for 2011, it
did not materialize because it appears from Mr. Hervieux’s cross‑examination
that the amount granted rose from $580,000 in 2010 to $648,000,00 in 2011 (Affidavit
of Ms. Connelly, No 11, Division B-ii. para 5); Applicant’s Record, p 22).
On the other hand, the adjudicator allowed the respondent to submit into
evidence financial statements dated July 7, 2011, thus several months
after the applicant’s dismissal, over her counsel’s objection.
[28]
Considering
that the evidence was deficient in a number of respects, the adjudicator could
not reasonably find that the respondent was having financial difficulties, and accordingly
he erred in finding that it had discharged its burden of establishing the
economic justification it relied on to support its decision to lay the
applicant off.
[29]
The
same is true with respect to the adjudicator’s finding that [translation] “the employer reorganized
duties in order to distribute money among the various positions and services”.
No evidence was filed to this effect, and again none of the members of the
board of directors testified that there had been a reorganization of duties. The
adjudicator’s findings in this regard were therefore also unreasonable and baseless.
[30]
Finally,
the adjudicator could not reasonably find that there had not been a fictitious
abolition in the absence of a reasonable explanation for the choice of the
employee to be laid off. On the one hand, it was not possible to talk about the
discontinuance of a function while the applicant’s uncontradicted evidence was
that a sub‑contractor was hired following the applicant’s dismissal to perform
the duties of project manager. Moreover, the respondent did not adduce any
evidence about a search for other alternatives that could have prevented the
applicant’s dismissal, for example, giving her another position or a part‑time
position, a temporary layoff, etc. In short, it is clear that the respondent
did not show that it had applied the selection criteria of the abolished
position in an objective, reasonable and impartial manner when the applicant’s
position was abolished.
[31]
Moreover,
the adjudicator ignored the facts put into evidence by the applicant that could
have influenced the objectivity and impartiality of the process the respondent
followed (conflict existing for a number of years between the general manager
and the applicant; the offer of a sum of money nine months prior to the
abolition of her position so that she would leave her employment; the cavalier
fashion, without notice, in which she was told about the loss of her
employment). All these factors could have led the adjudicator to find that the
respondent was not acting in good faith and that the supposedly difficult
economic situation was merely a pretext to get rid of the applicant. The
adjudicator did not discuss this evidence at all and merely wrote that the
complainant [translation] “claimed
she had been unjustly dismissed” and then concluded tersely that [translation] “ this is not a fictitious
abolition of a position”. This finding is clearly unreasonable considering the
evidence that was before him and is not based on intelligible and transparent
reasoning.
Conclusion
[32]
For
all the foregoing reasons, I am therefore of the opinion that the decision by Adjudicator
François G Fortier dated October 29, 2012, must be set aside
and that the matter must be returned to a new adjudicator so that a decision can
be made based on these reasons.
[33]
The
application for judicial review is allowed with costs to the applicant. Accordingly,
the matter is returned to a new adjudicator for disposition based on these
reasons.
“Yves de Montigny”
Ottawa,
Ontario
August
28, 2013
Certified
true translation
Mary
Jo Egan, LLB
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