Actton Transport Ltd. v. Canada (Minister of Labour), 2004 FCA 182

Date: 20040505

Docket: A-361-03

Citation: 2004 FCA 182

CORAM:        DESJARDINS J.A.

LÉTOURNEAU J.A.

PELLETIER J.A.

BETWEEN:

                                                    ACTTON TRANSPORT LTD.

                                                                                                                           Appellant/Applicant

                                                                           and

                             DAWN STEEVES, CANADA (MINISTER OF LABOUR)

                                                    and RUSSELL LYLE McIVOR

                                                                                                                Respondents/Respondents

                                         Heard at Calgary, Alberta, on January 28, 2004.

                                   Judgment delivered at Ottawa,, Ontario, on May 5, 2004.

REASONS FOR JUDGMENT BY:                                                                           PELLETIER J.A.

CONCURRED IN BY:                                                                                         DESJARDINS J.A.

                                                                                                                           LÉTOURNEAU J.A.

Date: 20040505

Docket: A-361-03

Citation: 2004 FCA 182

CORAM:        DESJARDINS J.A.

LÉTOURNEAU J.A.

PELLETIER J.A.

BETWEEN:

                                                    ACTTON TRANSPORT LTD.

                                                                                                                           Appellant/Applicant

                                                                           and

                             DAWN STEEVES, CANADA (MINISTER OF LABOUR)

                                                    and RUSSELL LYLE McIVOR

                                                                                                                Respondents/Respondents

                                                    REASONS FOR JUDGMENT

PELLETIER J.A.

[1]                Russell Lyle McIvor (McIvor), a disgruntled former employee of Actton Transport Ltd. (Actton), complained to officials of the respondent Canada (Minister of Labour) (the Minister) that he had not been paid the overtime to which he was entitled. Because Actton is a federally regulated employer, McIvor's entitlement to overtime depended upon Motor Vehicle Operators Hours of Work Regulations, C.R.C. 1978, c. 990 (the Regulations). The Regulations distinguish between a city motor vehicle operator and a highway motor vehicle operator for purposes of overtime. Whether a driver is one or the other may depend upon "prevailing industry practice".    One of the Minister's officials, Dawn Steeves (Steeves) conducted an inquiry to determine how far from their home terminals city motor vehicle operators in the Calgary area typically worked. On the basis of her investigation, she concluded that McIvor was a city motor vehicle operator and therefore entitled to overtime after working 9 hours per day or 45 hours per week. She issued a Payment Order requiring Actton to pay McIvor approximately $1,000 in overtime.

[2]                Actton attempted to persuade a judge of the Federal Court to set aside Steeves' Payment Order. It argued that when the Regulations define a city motor vehicle operator in terms of the prevailing industry practice in the geographical area in which the operator is employed, they purport to authorize a departmental official to make a determination which the Canada Labour Code, R.S.C. 1985, c. L-2 (the Code), reserves to the Governor in Council. The judge disagreed and rejected Actton's application for judicial review. Actton appeals to this Court.

[3]                Before us, Actton raises the same arguments plus an additional argument which it was not allowed to make before the Federal Court judge because it failed to serve a notice of constitutional question. Having now served the required notice, Actton argues that the definition of city motor vehicle operator was so uncertain as to make the Regulations invalid.

[4]                For the reasons which follow, I am of the view that the appeal must be dismissed. The Governor in Council is free to define city motor vehicle operators according to such criteria as it chooses. If one of those criteria is the prevailing industry practice, then an official will have to determine what that practice is in a given case. Having done so, the Regulations are then applied in light of the facts as found by the investigating official. It is the Regulations which define the city motor vehicle operator even if a factual investigation is required in order to apply the Regulations. As for the argument as to uncertainty, it is without merit. The fact that practices may vary from region to region is not an indication of uncertainty.

THE LEGISLATIVE SCHEME:

[5]                While the argument is phrased in terms of delegation of power, this is a case about overtime, specifically, whether McIvor was entitled to overtime after working 9 hours a day or 45 hours per week, as he claimed, or only after 60 hours per week as Actton claimed.

[6]                Part III of the Code deals with "Standard hours, wages, vacations and holidays". Section 166, the interpretation section, contains definitions of "overtime" and "standard hours of work".

[7]                Overtime becomes payable when an employee works more than the standard hours of work.

[8]                The other legislative provisions which are relevant to this dispute are the following:

[9]                The general rule is that the standard hours of work are 8 hours per day and 40 hours per week, but the Code allows the Governor in Council to exempt classes of employees from the general rule. Before it does so, the Minister must cause an inquiry to be held. An employee who works more than the standard hours of work is entitled to be paid at one and one-half times his or her regular rate of wages.

[10]            The Governor in Council has exercised the power conferred by section 175 by passing the Regulations. They deal with the hours of work of motor vehicle operators including city motor vehicle operators, highway motor vehicle operators and bus operators. The definition of city motor vehicle operator is at the heart of this problem.

[11]            The other parts of the Regulations of interest to this case are the following:

[12]            As a city motor vehicle operator, McIvor would be entitled to overtime after 45 hours per week (s. 5) but, as a highway motor vehicle operator, he would not be entitled to overtime until he had worked 60 hours in a week (s. 6).

STEEVES' INVESTIGATION AND CONCLUSIONS

[13]            Since it was undisputed that McIvor operated his vehicle outside a 10-mile radius from his home terminal, the question became whether he was considered a city motor vehicle operator in Calgary, the geographical area in which he was employed. Steeves made inquiries of a number of firms which employed truckers in the Calgary area. She asked them a number of questions including whether their city drivers were paid by the hour or by the mile, and the geographical area in which city drivers worked. She was told that most city drivers were paid by the hour, and the majority of them drove routes which included the City of Calgary and surrounding municipalities including Strathmore which is 31 kilometres from Calgary City centre. Accordingly, she concluded that the prevailing industry practice in the Calgary area was that city drivers covered the City of Calgary and surrounding municipalities. Since the routes driven by McIvor all fell within this area, she concluded that he was a city motor vehicle operator.

ANALYSIS:

[14]            Actton's argument is that by leaving it to an official to determine the "prevailing industry practice", the Governor in Council has transformed a legislative power into an administrative power, which amounts to an unlawful delegation. Actton says that where legislation requires the Governor in Council to do certain things by regulation, the Governor in Council cannot simply empower an official to do those things. The exercise of legislative power cannot be replaced by the exercise of an administrative discretion.

[15]            Actton's position is that since the Governor in Council has fixed a 10-mile radius as a defining characteristic of a city motor vehicle operator, any derogation from that limit is an exercise of a legislative power:

34. The Appellant submits that in this case the Governor in Council, by originally settling the 10 mile radius, after holding an inquiry, has legislated a specific and easily determinable geographic area within which one set of rules to calculate overtime apply to the mutual exclusion of another set of rules, which were also designed to calculate the amount of overtime for any non-union trucker. The determination of which set of rules applies in a particular case is governed by a fixed geographical boundary legislated by the Governor in Council. The Appellant submits that any variation in that fixed geographical area must, of logic, necessity and fairness to employers, be a legislative function exercisable only by the Governor in Council, after holding an inquiry. . .

                (Appellant's Memorandum of Fact and Law, at p.9.)

[16]            Actton's argument amounts to saying that once the Governor in Council, after inquiry, set the threshold for city drivers at 10 miles from their home base, any variation of that limit required a further inquiry by the Minister and the passage of fresh regulations. In support of that argument, Actton relies upon cases such as Ex Parte Brent, [1955] 3 D.L.R. 587 (Ont. C.A.) where the Immigration Act, R.S.C. 1952, c. 325, authorized the Governor in Council to make regulations with respect to various matters, including the suitability of applicants for admission to Canada:

61. The Governor in Council may make regulations for carrying into effect the purposes and provisions of this Act and, without restricting the generality of the foregoing, may make regulations respecting:

. . .

(g) the prohibiting or limiting of admission of persons by reason of -

. . .

(iii) unsuitability having regard to the climactic, economic, social, industrial, educational, labour, health or other conditions or requirements existing, temporarily or otherwise, in Canada or in the area or country from or through which such persons came to Canada

[17]            The Governor in Council purported to exercise the power thus conferred upon it by promulgating the following regulation:

20(4) Subject to the provisions of the Act and to these regulations, the admission to Canada of any person is prohibited where in the opinion of a Special Inquiry Officer such person should not be admitted by reason of

. . .

(b) his unsuitability, having regard to the economic, social, industrial, educational, labour, health or other conditions or requirements existing, temporarily or otherwise, in Canada or in the area or country from or through which such person comes to Canada

[18]            The regulation simply conferred upon a Special Inquiry Officer the power to determine unsuitability, based upon the same criteria which were identified in the empowering legislation. The result is that the Governor in Council made no regulation as to suitability. It made a regulation by which the Special Inquiry Officer could make a determination of suitability on the basis of the same criteria to which the Governor in Council's attention was directed by the legislation. The reader of the regulation had no more idea than the reader of the empowering legislation as to what might constitute unsuitability. Little wonder that the Ontario Court of Appeal, and then the Supreme Court of Canada, found this to be a case of impermissible delegation.

[19]            In the Ontario Court of Appeal, Aylesworth J.A., found that the legislation intended the Governor in Council to exercise its collective wisdom and experience to set standards for the general guidance of immigration officers, as opposed to creating an opportunity for a "wide diversity of rules and opinions ever changing according to the individual notions of such officers" (Ex parte Brent, supra, at p. 593). The Supreme Court of Canada agreed.

[20]            In this case, the Code authorizes the Governor in Council to define standard hours of work for employees engaged in industries where the application of the general rules found at sections 169 and 171 would be harmful to the interests of either employees or employers. The Regulations in question here withdraw the employment of motor vehicle operators from the general scheme and in doing so provide different rules for city and highway motor vehicle operators. This requires one to distinguish between the two. After providing an arbitrary criterion, a 10-mile radius from the operator's home terminal, the Regulations also allow for recognition of the prevailing practice in the industry. Distinguishing between city and highway motor vehicle operators on the basis of prevailing industry practice satisfies the legislative mandate since the prevailing practice is a question of fact and not a matter of administrative discretion. An official who is called upon to ascertain the prevailing practice for the purpose of applying it to a given case is engaged in fact-finding, not legislating.

[21]            Actton also relies upon [1973] S.C.R. 131">Brant Dairy Co. v. Ontario (Milk Commission), [1973] S.C.R. 131 ([1973] S.C.R. 131">Brant Dairy Co.), in which the issue was whether the Ontario Milk Marketing Board had properly exercised the power delegated to it to provide by regulation for a quota system and to allocate quotas. The Board purported to exercise that power by passing a regulation which authorized it to fix and allocate quotas on any basis it deemed proper. The Supreme Court of Canada held that the Board could not convert a legislative power into an administrative power by conferring it upon itself the power to do the thing "as it deemed proper". The case of [1979] 2 S.C.R. 2">Canadian Institute of Public Real Estate Cos. v. Toronto (City), [1979] 2 S.C.R. 2, is also cited for the same proposition.

[22]            The principle established in these cases is that where a delegated decision-maker is authorized to decide certain questions by regulation, the regulations which it promulgates in the exercise of that power must actually decide the questions. They cannot simply confer upon the delegated decision-maker the power to decide administratively that which the legislation requires it to decide legislatively. That is why the Supreme Court struck down the Ontario Milk Marketing Board Regulations allowing the Board to set quotas as it deemed proper. The Ontario Milk Marketing Board had used the power to make regulations to give itself the right to decide quota questions on an administrative basis when the intent of the legislature is that it do so legislatively.

[23]            Here, the requirement that the Governor in Council proceed by regulation was satisfied when the Governor in Council specified, by regulation, that the distinction between a city and a highway motor vehicle operator is to be drawn according to the prevailing industry practice. Unlike [1973] S.C.R. 131">Brant Dairy Co., supra, this does not confer on the administration the unregulated right to decide which classes of employees will be exempted from sections 169 and 171 of the Code. The exempted classes are specified in the Regulations. Nor do the Regulations allow officials to decide the basis on which city motor vehicle operators will be distinguished from highway motor vehicle operators. The basis of the distinction is set out in the Regulations. The official's function is to identify and then apply the prevailing practice as it exists in the geographical area.

[24]            There is a rationale for such a scheme. In practical terms, employers who do not have to pay overtime until an employee has worked 60 hours enjoy a significant advantage over those who must pay overtime after 45 hours. If the law permitted an employer to decide for itself whether it paid overtime after 45 or 60 hours, simply by dispatching an employee beyond a             10-mile radius, there would be very few city motor vehicle operators. Using the prevailing industry practice as the determining factor is a means of protecting employees from work assignments whose object is simply to limit their entitlement to overtime.

[25]            For these reasons, I cannot even agree that the Regulations are a delegation of legislative power to an administrative decision-maker, let alone an impermissible delegation as argued by Actton. The only thing which has been delegated is the obligation to determine the content of the prevailing industry standard in a given area, a question of fact. Once the facts have been found, their effect is a function of the Regulations, and not of the investigating officer's discretion. This argument must fail.

[26]            Actton's second argument is that because of the variations in the position taken by officials in different parts of the country, or even within a given region, the prevailing industry practice is unacceptably vague as a statutory criterion for distinguishing between city and highway operators. This argument was based upon evidence of a disagreement between officials in the Golden Horshoe area of Ontario as to the proper interpretation of the Regulations. In my view, this argument is fundamentally unsound as it fails to distinguish between legislative clarity and administrative confusion.

[27]            The intention of the legislation is clear. Prevailing industry practice is to be taken into account when categorizing a motor vehicle operator as either a city or a highway operator. That straightforward legislative directive cannot be made so uncertain as to invalidate the Regulations simply because officials disagree as to how it should be applied. Questions as to the definition of the geographical area in which an operator is employed, or the method of determining the prevailing industry practice are matters of administrative practice. While they may give rise to certain practical difficulties, those difficulties do not transform a clear legislative intent into one which is unacceptably vague.

[28]            For these reasons, I would dismiss the appeal with costs.

                                                                                                                            "J.D. Denis Pelletier"         

                                                                                                                              J.A.

"I concur

Alice Desjardins J.A."

"I agree

Gilles Létourneau J.A."

                                                  FEDERAL COURT OF APPEAL

                            NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                                      A-361-03

STYLE OF CAUSE:                         ACTTON TRANSPORT LTD. v. DAWN STEEVES CANADA (MINISTER OF LABOUR) and RUSSELL LYLE McIVOR

PLACE OF HEARING:                                 Calgary, Alberta

DATE OF HEARING:                                   January 28, 2004

REASONS FOR JUDGMENT :                  PELLETIER J.A.

CONCURRED IN BY:                                  DESJARDINS J.A.

LÉTOURNEAU J.A.

DATED:                                                          May 5, 2004

APPEARANCES:

Mr. James R. Kitsul                                           FOR THE APPELLANT/APPLICANT

Mr. Rick Garvin                                                FOR THE RESPONDENTS/RESPONDENTS

SOLICITORS OF RECORD:

Mr. James R. Kitsul                                           FOR THE APPELLANT/APPLICANT

James R. Kitsul Law Corporation

Surrey, B.C.

Morris Rosenberg                                              FOR THE RESPONDENTS/RESPONDENTS

c/o Mr. Rick Garvin                  

Department of Justice

Edmonton, Alberta