Docket: T-358-15
Citation:
2016 FC 153
Ottawa, Ontario, February 8, 2016
PRESENT: The
Honourable Mr. Justice Boswell
BETWEEN:
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JOHN SIDNEY
NATHAN MacPHAIL
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Applicant
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and
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ATTORNEY
GENERAL OF CANADA
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Respondent
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JUDGMENT AND REASONS
[1]
The Applicant, John Sidney Nathan MacPhail, is a
Chief Petty Officer, 2nd Class, with the Canadian Forces [CF] and is currently
posted in Halifax. On February 1, 2013, the meal and incidental portions of the
separation expense benefits which he had been receiving were cancelled upon
implementation of a policy decision made by the Treasury Board [TB]. The
Applicant filed a grievance asking for restoration of these benefits for the
duration of his posting. However, on January 15, 2015, the Chief of Defence
Staff [CDS] denied the Applicant’s grievance. The Applicant now asks this Court
pursuant to section 18.1 of the Federal Courts Act, R.S.C. 1985, c. F-7,
as amended, to set aside the CDS’s decision and restore the lost benefits.
I.
Background
[2]
On July 27, 2011, the Applicant was posted to
HMCS Toronto in Halifax from Moncton, New Brunswick. Before the Applicant
decided to accept an imposed restriction [IR] posting to Halifax, he and his
wife considered their family’s financial situation. The IR posting came with
separation expense [SE] benefits which included incidental and meal allowances.
However, in July 2012, while onboard HMCS Charlottetown, the Applicant learned
the SE benefits would be changing, such that the incidental and meal allowances
would no longer be paid beginning September 1, 2012 (this implementation date
was subsequently extended to February 1, 2013). In a grievance memorandum to
his commanding officer dated August 18, 2012, the Applicant indicated that loss
of these allowances was unfair and would cause significant financial difficulty
for his family; he also requested that he be granted the benefits for the
remainder of his IR posting. The Applicant’s commanding officer determined that
the grievance should go to the Canadian Forces Grievance Authority. Subsequently,
on April 10, 2013, the Acting Director General Compensation and Benefits, who
acted as the Initial Authority [the IA], decided that because the policy change
was determined by the TB, the Applicant’s loss of benefits could not be
remedied through the grievance process.
[3]
Following denial of his grievance at the initial
stage, the Applicant requested on July 30, 2013, that his grievance be
considered by the CDS as the final authority in the grievance process for
members of the CF. The Director General of the Canadian Forces Grievance
Authority acknowledged receipt of the grievance on September 9, 2013, and in
turn forwarded it to the Military Grievances External Review Committee [the
Committee]. The Committee’s findings were provided to the Applicant in a letter
dated March 7, 2014. In recommending that the grievance be denied, the
Committee considered the policy implemented by the TB and whether the notice of
the change given to the Applicant was reasonable. Although the Committee noted
that the February implementation date did not give the Applicant sufficient
time to mitigate the financial loss, the Committee nevertheless recommended the
grievance be denied because the implementation date had been approved by the TB
and there was no right to the SE benefits.
II.
The Chief of Defence Staff’s Decision
[4]
In a letter dated January 15, 2015, the CDS
denied the Applicant’s grievance. The CDS outlined the grievance, the
Applicant’s arguments, and the redress the Applicant sought. The CDS noted that
he had considered the Committee’s findings and recommendations, that the
Applicant had provided comments on such findings and recommendations, and that
he had considered the case de novo. In rendering his decision, the CDS
further noted that the Committee had found that the reduction of the benefits
was approved by the TB and applied to the Applicant when the policy change
became effective. The CDS agreed with the Committee in this regard, stating:
I must agree with the Committee that your SE
benefits were properly reduced as per approved TB policy, on 1 February 2013.
Indeed, it is the TB who retains jurisdiction to deal with all financial
matters for which it is responsible in accordance with the National Defence Act
(NDA), article 35(2) (Reimbursements and Allowances). The new SE benefits were
approved by TB. I have no authority to amend them. [footnote omitted]
[5]
The CDS also expressed agreement with the
Committee that the Applicant did not automatically accrue SE benefits for the
duration of his IR posting, nor had he entered into a contract with the Crown
because the relationship between the Applicant and the CF is not bound by
contract law. In the CDS’s view, although the Applicant may have found the
change in policy caused difficulties in adjusting his budget, he had been
treated fairly and the six months’ prior notice for individuals to adjust to
the change was reasonable. The CDS observed further that while the IA had
wrongly rejected the Applicant’s grievance on the basis of the matter being
prescribed by TB regulations, he was nonetheless satisfied that the matter had
been resolved and no further action was warranted.
III.
Issues
[6]
The parties raise various specific issues, but
in my view there are three that warrant the Court’s consideration:
1.
What is the appropriate standard of review?
2.
Is the CDS’s decision reasonable?
3.
Was the Applicant denied procedural fairness?
IV.
Analysis
A.
What is the appropriate standard of review?
[7]
Whether any rules of procedural fairness were
breached in handling the Applicant’s grievance is an issue subject to the
correctness standard of review (see: Mission Institution v Khela, 2014
SCC 24 at para 79, [2014] 1 S.C.R. 502; also see Smith v Canada (National
Defence), 2010 FC 321, at paras 34-37, 363 FTR 186).
[8]
It is well established in the case law that grievance
decisions involving members of the CF deal with questions of fact or questions
of mixed fact and law and, as such, are to be judicially reviewed in accordance
with the reasonableness standard (see: e.g., Bossé v Canada, 2015 FC
1143 at para 25, 259 ACWS (3d) 686; Bourassa c Canada (Ministère de la
Défense Nationale), 2014 FC 936 at para 40, 249 ACWS (3d) 788; Harris v
Canada (Attorney General), 2013 FCA 278, [2013] FCJ No 1312 (affirming Harris
v Canada (Attorney General), 2013 FC 571 at para 30, [2013] FCJ No 595); Babineau
v Canada (Attorney General), 2014 CF 398 at para 22, [2014] FCJ No 440; Osterroth
v Canada (Canadian Forces, Chief of Staff), 2014 FC 438 at para 18, [2014]
FCJ No 483; Moodie v Canada (Attorney General), 2014 FC 433 at para 44,
[2014] FCJ No 447; Lampron v Canada (Attorney General), 2012 FC 825 at
para 27, [2012] FCJ No 1713; Rompré v Canada (Attorney General), 2012 FC
101 at paras 22-23, [2012] FCJ No 117).
[9]
Accordingly, although the Court can intervene “if the decision-maker has overlooked material evidence or
taken evidence into account that is inaccurate or not material” (James
v Canada (Attorney General) 2015 FC 965 at para 86, 257 ACWS (3d) 113), it
should not interfere if the CDS’s decision is intelligible, transparent, justifiable,
and defensible in respect of the facts and the law: Dunsmuir v New Brunswick,
2008 SCC 9 at para 47, [2008] 1 S.C.R. 190. Those criteria are met if “the reasons allow the reviewing court to understand why the
tribunal made its decision and permit it to determine whether the conclusion is
within the range of acceptable outcomes”: Newfoundland and Labrador
Nurses' Union v Newfoundland and Labrador (Treasury Board), 2011 SCC 62 at
para 16, [2011] 3 S.C.R. 708.
B.
Was the CDS’s decision reasonable?
[10]
In addressing this issue, it should be noted at
the outset that the judicial review of the CDS’s decision does not and cannot
encompass questions as to whether the TB’s policy decision was fair or
reasonable or whether the policy’s impact upon the Applicant was just or
unjust. On the contrary, in reviewing the CDS’s decision, the Court is tasked
only with assessing whether the CDS’s decision was reasonable in accordance
with the principles noted above and whether it was rendered in a procedurally
fair manner. Simply put, the Court does not have the power or authority to
determine whether termination of the Applicant’s meal and incidental allowances
was just or unjust.
[11]
The policy decision implemented in February 2013
which precipitated the Applicant’s grievance clearly provides that members of
the CF will no longer receive meal or incidental allowances as part of their SE
benefits. In the TB’s Compensation and Benefits Instructions [CBI],
Chapter 208.997, it is clear that the meal and incidental provisions previously
contained in CBI, Chapter 209.997, have been rescinded and repealed by the TB
effective February 1, 2013. Furthermore, there are no grandfathering or
transitional provisions in the CBI in respect of the terminated allowances.
[12]
In response to the Applicant’s grievance, the
CDS determined that the Applicant is bound by the new policy, that the TB had
the power and jurisdiction to make the change, and that the policy change was
implemented in a procedurally fair way with six months’ prior notice. In my
view, it was reasonable for the CDS to find that the Applicant was bound by the
new policy. The CDS’s reasons for his decision are transparent, intelligible
and justifiable and, as a whole, his decision falls within the range of
acceptable possible outcomes and the Court should not interfere.
[13]
The TB is given clear authority to establish
rates of pay and benefits for members of the CF pursuant to section 35 of the National
Defence Act, RSC 1985, c N-5 [NDA], which provides:
Treasury Board to establish
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Taux et modalités de versement
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35. (1) The rates and conditions of
issue of pay of officers and non-commissioned members, other than military
judges, shall be established by the Treasury Board.
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35. (1)
Les taux et conditions de versement de la solde des officiers et militaires
du rang, autres que les juges militaires, sont établis par le Conseil du
Trésor.
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Reimbursements and allowances
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Indemnités
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(2) The payments that may be made to officers and non-commissioned
members by way of reimbursement for travel or other expenses and by way of
allowances in respect of expenses and conditions arising out of their service
shall be determined and regulated by the Treasury Board.
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(2) Les indemnités payables aux officiers et militaires du rang au
titre soit des frais de déplacement ou autres, soit des dépenses ou
conditions inhérentes au service sont fixées et régies par le Conseil du
Trésor.
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[14]
There is no discretion granted to the CDS in
either the NDA or the Queen's Regulations and Orders for the Canadian
Forces to authorize or pay the meal and incidental allowances which were
repealed by the TB effective February 1, 2013.
[15]
The CDS reasonably determined that the TB has
the jurisdiction to make the change to the SE benefits, and that he had no
authority to amend the new SE benefits approved by the TB. The CDS’s decision
is entitled to deference by the Court, and the CDS did not overlook material
evidence or take into account evidence that is inaccurate or not material.
Although a longer adjustment period or maintenance of the SE benefits would
undoubtedly have been preferred by the Applicant, and even though the CDS’s
decision may not be one the Court may have made, that does not make the CDS’s
decision unreasonable. There was no evidence before the CDS that the procedure
for implementing the TB’s policy and the choice of date selection was unfair,
thus making the CDS’s decision – that in his opinion six months was fair notice
– reasonable.
[16]
In addition, the CDS’s determination that the
Applicant’s employment relationship was not bound by contract law is not only a
reasonable one but a correct one as well. In Codrin v Canada (Attorney
General), 2011 FC 100, 379 FTR 302, Mr. Codrin alleged that, upon
recruitment as an officer cadet, he had been promised a certain pay rate.
However, after being commissioned in the rank of second lieutenant, it was
determined that the pay rate stated in the enrollment message which had
authorized Mr. Codrin’s enrollment in the training program was incorrect, and
his pay was therefore adjusted in line with policy. In upholding the CDS’s
denial of Mr. Codrin’s grievance, the Court stated as follows:
[57] The legal principle that a member
of the CF does not have a contractual relationship with the Crown has been
repeated for over a century. The principle first appeared in the jurisprudence
in Mitchell v. R, [1896] 1 Q.B. 121. Lord Esher M.R. held in that case
at page 122:
… all engagements between those in
the military service of the Crown and the Crown are voluntary only on the part
of the Crown, and give no occasion for an action in respect of any alleged
contract.
[58] This has been reiterated in more
recent jurisprudence in Pilon v. Canada (1996), 119 F.T.R. 269, [1996]
F.C.J. No. 1200, at paragraph 7:
…members of the military serve at the
pleasure of the Queen and do not, therefore, have a contractual relationship
with the Crown.
[59] The CDS stated in his decision
that he could not make a determination about a purported breach of contract or
violation of labour laws in the grievance before him because members of the CF
are not in a contractual employment relationship with the Crown. The
determination that contract law did not apply to the grievance was reasonable
and correct in law.
C.
Was the Applicant denied procedural fairness?
[17]
The Applicant argues his grievance at the IA
level was improperly denied because of the IA’s determination that, since the
policy change was made by the TB, his loss of benefits could not be remedied
through the grievance process. However, it is the CDS’s decision, not that of
the IA, which is the subject matter of this application for judicial review.
The CDS explicitly mentions the IA decision after he conducted his de novo
review, stating that: “I agree that the IA erred in
rejecting your grievance. However, I am satisfied that this particular issue
has been resolved and that no further action is warranted.” This
determination by the CDS, that any procedural fairness issues at the lower
level were resolved, was not an error.
[18]
Case law has established that a de novo
hearing, as the CDS clearly was conducting in this case, can cure earlier
breaches of procedural fairness if the procedures and outcome as a whole were
fair (see: e.g., Walsh v Canada (Attorney General), 2015 FC 775 at paras
41, 51, 256 ACWS (3d) 107 [Walsh]; Schmidt v Canada (Attorney
General), 2011 FC 356 at paras 16-20, 23, 386 FTR 286; McBride v. Canada
(Minister of National Defence), 2012 FCA 181 at paragraphs 41-45, 431 NR
383; and Canada (Attorney General) v Rifai, 2015 FCA 145 at para 3, 256
ACWS (3d) 834). In Walsh, the Court held (at para 51) that the
procedure as a whole was fair because Mr. Walsh had been given the opportunity
at every step of the grievance process to make submissions, the CDS had considered
those submissions and addressed them, and the CDS noted any prior shortcomings
in any previous decision when conducting the de novo review. As in Walsh,
the Applicant here had ample opportunity to provide submissions which were
considered by the CDS, including those on the impact to the Applicant’s family;
the CDS in this case conducted a de novo review, setting aside any
previous decision, while acknowledging the problem with the IA’s decision.
[19]
The Applicant suggests that his commanding
officer was wrong in determining he could not deal with the grievance. However,
even if that may have been the case, any procedural defect in this regard was
rectified by the fact the CDS conducted a procedurally fair de novo
review in deciding the Applicant’s grievance.
[20]
The Applicant asserts that he was denied a
comprehensive and transparent adjudication of his grievance because the
Committee was denied access to TB and Department of National Defence
information about how the implementation date was determined. There is,
however, no right to this information by the Applicant. It was the Committee,
not the Applicant, which requested this information. The Committee decided not
to contest the denied information requests, and its decision not to do so is
not the subject matter of this judicial review. It would be an undue burden for
the grievance process applicable to members of the CF to require that the
Committee challenge all refusals of information requests before the CDS’s
grievance decision can be procedurally fair. The CDS found, based on the
information before him, that the implementation was done fairly and the six-month
adjustment period was reasonable and appropriate.
[21]
The Applicant argues that he is prevented from
joining with other members of the CF affected by termination of the SE benefits
because they could be subject to the mutiny provisions in the NDA and
that this inability to do so is somehow unfair. If the Applicant’s reading of
the mutiny provisions is correct, this might be a problem, and would limit the
Applicant’s ability to band together with other members of the CT to reverse
the changes to the SE benefits. However, the Applicant has not been charged
with mutiny. Moreover, to classify such collective efforts by the Applicant and
other members of the CF to reinstate the terminated allowances as “mutiny” would require an unduly generous reading and
interpretation of the words “insubordination”
and “resistance” as used in the definition of “mutiny” in subsection 2(1) of the NDA.
[22]
The procedures followed in this case were open
and transparent, and the Applicant was aware of the case he had to meet. The
Applicant was not denied procedural fairness in the rendering of the CDS’s
decision denying his grievance.
V.
Conclusion
[23]
For the reasons stated above, the Applicant’s
application for judicial review is dismissed. There is no award of costs.