Msuya v. Sundance Balloons International Ltd., 2006 FC 321

Date: 20060313

Docket: T-792-05

Citation: 2006 FC 321

Ottawa, Ontario, March 13, 2006

PRESENT:      The Honourable Mr. Justice Barnes

BETWEEN:

MOSES MSUYA

Applicant(s)

and

SUNDANCE BALLOONS INTERNATIONAL LIMITED

Respondent(s)

REASONS FOR JUDGMENT AND JUDGMENT

Background

[1]                The Applicant, Moses Msuya, is a licensed hot air balloon pilot. He was employed in that capacity by the Respondent, Sundance Balloons International Limited (Sundance), for five (5) years before his employment was terminated by letter dated April 12, 2004.

[2]                Because the work was seasonal, it was a condition of the Applicant's employment that he execute an annual employment contract. For the 2003 flying season (May 1, 2003 to November 2, 2003), the Applicant and Sundance executed a contract which described the Applicant both as a "contract employee" and as a "Hot Air Balloon Pilot and Market Manager". A collateral confidentiality and non-solicitation agreement was also signed by the Applicant.

[3]                The Applicant made a complaint of unjust dismissal pursuant to the provisions of Division XIV of the Canada Labour Code (Code), R.S. 1985, c. L-2 and ultimately that complaint made its way to the Adjudicator who was appointed pursuant to section 242 of the Code. That provision states:

[4]                The adjudication of the Applicant's complaint proceeded over two (2) days in March, 2005. By decision rendered on April 7, 2005, the Adjudicator held that the Applicant did not have standing to bring the complaint because he was a manager and, therefore, excluded by section 167(3) of the Code. That provision does preclude a manager from using the unjust dismissal adjudication process set out in Division XIV of the Code. It reads:

[5]                It is apparent that the Adjudicator declined to hear the Applicant's complaint on the merits because he concluded that the title of "market manager" contained in the employment contract was, by itself, determinative of the Applicant's job status. The Adjudicator's conclusions bear this out:

I have no evidence before me as to what Mr. Msuya's mandate or functions were as a Market Manager. Perhaps the terms may very well be contained in the Pilots Flight Manual, but that Manual was not offered into evidence by the Complainant or the Respondent.

Under the term 'position' it clearly states that Mr. Msuya is employed as a Hot Air Balloon Pilot and Market Manager.

It is somewhat ambiguous as to whether primary duties relates to being a Pilot or a Manager.

What is not ambiguous is that Mr. Msuya signed the April 2003 Letter of Understanding and the Proprietary, Confidentiality and Non-Solicitation Agreement.

The April 9, 2003 Letter of Understanding had as part of the body of the Agreement, provisions that if Mr. Msuya was not clear or had any questions regarding the Letter of Understanding, he was to contact Dave Monson, Vice-President of Operations as it was Dave Monson who drafted the terms and conditions of the Letter of Understanding.

The evidence that I have before me was that Mr. Msuya did not contact Mr. Monson with any concerns or inquiries, but that in itself does not mean that an injustice was not committed against Mr. Msuya. It simply means he did not contact Mr. Monson with any concerns.

While I believe this complaint should be brought to a close by way of a decision predicated on the merits in order to right a wrong, as an Adjudicator I am confined to the parameters of the Canada Labour Code when rendering a decision.

....

While there may be ambiguities as to what Mr. Msuya's duties were as Market Manager for Sundance Balloons, the Canada Labour Code is clear, "Division XIV does not apply to or in respect of employees who are managers."

Therefore in the matter of the Adjudication under Division XIV, Part III of the CanadaLabour Code, Complaint of Unjust Dismissal, I find that Moses Msuya does not have standing and rule in favour of the Respondent, Sundance Balloons International.

[6]                It is from this decision that the Applicant seeks relief and, in particular, a quashing of the Adjudicator's decision with a remission of the matter back to the Adjudicator for appropriate reconsideration.

Issues

1.                   What is the appropriate standard of review?

2.                   Does the Adjudicator's decision stand up to judicial review?

Analysis

Issue 1              What is the appropriate standard of review?

[7]                Although the determination of whether a person is a manager pursuant to section 167(3) of the Code will also determine whether the Adjudicator has jurisdiction to proceed, this jurisdictional aspect does not remove my obligation to adopt a pragmatic and functional approach to identify the correct standard of review. This point is made by Chief Justice Beverley McLachlin in Dr. Q. v. 2003 SCC 19">College of Physicians and Surgeons of British Columbia 2003 SCC 19, [2003] 1 S.C.R. 226 at paragraphs 24 and 25:

24             Just as the categorical exceptions to the hearsay rule may converge with the result reached by the Smith analysis, the categorical and nominate approaches to judicial review may conform to the result of a pragmatic and functional analysis. For this reason, the wisdom of past administrative law jurisprudence need not be wholly discarded. For example, in Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817, L'Heureux-Dubé J. invoked the old Associated Provincial Picture Houses, Ltd. v. Wednesbury Corp., [1948] 1 K.B. 223 (C.A.), categorical approach to discretionary decisions as a reflection that ministerial decisions have classically been afforded a high degree of deference (see also Suresh v. Canada (Minister of Citizenship and Immigration), [2002] 1 S.C.R. 3, 2002 SCC 1">2002 SCC 1, at paras. 29-30), but acknowledged that the principled approach must now prevail. Similarly, as Binnie J. recognized in Mount SinaiHospital Center v. Quebec (Minister of Health and Social Services), [2001] 2 S.C.R. 281, 2001 SCC 41">2001 SCC 41, at para. 54, under the pragmatic and functional approach, even "the review for abuse of discretion may in principle range from correctness through unreasonableness to patent unreasonableness". The nominate grounds, language of jurisdiction, and ossified interpretations of statutory formulae, while still useful as familiar landmarks, no longer dictate the journey.

25             For this reason, it is no longer sufficient to slot a particular issue into a pigeon hole of judicial review and, on this basis, demand correctness from the decision-maker. Nor is a reviewing court's interpretation of a privative clause or mechanism of review solely dispositive of a particular standard of review: Canada (Deputy Minister of National Revenue) v. Mattel Canada Inc., [2001] 2 S.C.R. 100, 2001 SCC 36">2001 SCC 36, at para. 27. The pragmatic and functional approach demands a more nuanced analysis based on consideration of a number of factors. This approach applies whenever a court reviews the decision of an administrative body. As Professor D. J. Mullan states in Administrative Law (2001), at p. 108, with the pragmatic and functional approach, "the Court has provided an overarching or unifying theory for review of the substantive decisions of all manner of statutory and prerogative decision makers". Review of the conclusions of an administrative decision-maker must begin by applying the pragmatic and functional approach. [emphasis added]

[8]                The pragmatic and functional approach requires that I consider four contextual factors:

1.                   the purposes of the legislation and the provision under consideration;

2.                   the expertise of the tribunal relative to that of the court on the issue in question;

3.                   the presence or absence of a privative clause or statutory right of appeal; and

4.                   the nature of the question (law, fact or mixed fact and law).

[9]                I am substantially aided in this analysis by two previous decisions of the Federal Court of Appeal dealing with similar provisions in the Code.

[10]            The case of H & R Transport Ltd. v. Baldrey 2005 FCA 151, [2005] F.C.J. No. 729 dealt with the unjust dismissal provisions of the Code and the question before the adjudicator involved the application of the common law to the concept of dismissal. The Court held that the standard of correctness applied to the adjudicator's determination of the common law principles to be applied. The standard of reasonableness was adopted for the application of the law to the facts of the case.

[11]            The decision in H & R Transport, above, drew upon the Court's earlier decision in Dynamex Canada Inc. v. Mamona 2003 FCA 248, [2003] F.C.J. No. 907. Dynamex was a case which involved a decision made by a referee appointed under section 251.12 of the Code but the Court in H & R Transport, concluded for comparison purposes, that the function of a referee was analogous to that of an adjudicator appointed under section 242 of the Code: see paragraph 5. The Court then proceeded to apply Dynamex to the facts of the case.

[12]            The decisions in H & R Transport and Dynamex discuss all four of the pragmatic and functional factors in the context of the equivalent adjudicative processes which were engaged in this case.

[13]            In Dynamex the Court observed that the essential purpose of the Code is to protect individual workers by providing minimum labour standards and mechanisms for the efficient resolution of disputes (see paragraph 35). The Court did not attribute any specific significance to this statutory purpose in its functional and pragmatic analysis. In this context, the objective of adjudicative efficiency seems to me to be a neutral factor.

[14]            On the question of the tribunal's relative expertise the Court in Dynamex noted that judicial deference is largely dependent upon the question under review. The further removed that question is from the special expertise of the tribunal, the less deference that is owed to its finding. This point is made at paragraph 45:

45       In my view, the determination of the referee as to the common law principles applicable to the determination of the status of a person as an employee should be reviewed on the standard of correctness. I reach that conclusion, despite the privative clauses, because it is a question of law of a kind that is normally considered by the courts, and is not a question that engages the special expertise of a referee. However, the manner in which those principles are applied to the facts, which is a question of mixed law and fact, should be reviewed on the standard of reasonableness. Thus, if the referee's reasons disclose no error of law, and the conclusion is reasonably supportable on the record after a somewhat probing examination, the decision will stand.

[15]            In considering the same privative clause that applies to this case, the Court in Dynamex concluded that it was indicative of a high degree of deference.

[16]            The final pragmatic and functional factor is whether the question under review is one of law, fact or mixed fact and law. In the end, the Court held in both H & R Transport and in Dynamex, above, that with respect to issues of law, the standard of review was correctness. That conclusion is consistent with many other authorities which hold that tribunal decisions involving questions of law are generally accorded little, if any, deference. That said, the functional and pragmatic approach may not always require correctness in the determination of a pure legal question. For instance, where a question of law is at the core of a tribunal's special expertise, judicial deference may be owed: see 2004 SCC 23">Voice Construction Ltd. V. Construction & General Workers' Union, Local 92 2004 SCC 23, [2004] 1 S.C.R. 609 at paragraph 29. However, when a question of law is determinative of a tribunal's jurisdiction to hear a case, the authorities indicate that correctness is inevitably the appropriate standard of review. That point is made in Chieu v. Canada(Minister of Citizenship and Immigration) [2002] S.C.J. No. 1, [2002] 1 S.C.R. 84 at paragraph 24:

24       In this case, the relevant additional factors also favour the correctness standard. The I.A.D. enjoys no relative expertise in the matter of law which is the object of the judicial review. While in Pushpanathan the matter under review was a human rights issue, an area of law in which deference is usually not given, the issue here is one of jurisdiction, a similar area where little deference is shown. Administrative bodies generally must be correct in determining the scope of their delegated mandate, given that they are entirely the creatures of statute. As Bastarache J. stated in Pushpanathan, at para. 28, "it is still appropriate and helpful to speak of 'jurisdictional questions' which must be answered correctly by the tribunal in order to be acting intra vires". While the I.A.D. has considerable expertise in determining the weight to be given to the factors it considers when exercising the discretionary jurisdiction conferred by s. 70(1)(b) of the Act, the scope [page101] of this discretionary jurisdiction itself is a legal issue ultimately to be supervised by the courts. The legal nature of the issue is particularly evident in cases like the one before us, where the Minister is arguing that the I.A.D. has usurped her jurisdiction. The factor of expertise weighed in the opposite direction in Baker, because the Minister "has some expertise relative to courts in immigration matters, particularly with respect to when exemptions should be given from the requirements that normally apply" (para. 59). The issue under review in Baker did not involve a jurisdictional issue like the one presently before this Court, and therefore a more deferential standard of review was appropriate.

[17]            Counsel for Sundance argued that the question answered here by the Adjudicator was one of mixed fact and law and, as such, was deserving of considerable deference. She pointed out that there was some evidence before the Adjudicator which indicated that the Mr. Msuya was a manager and, therefore, a rational basis for drawing that conclusion could be found.

[18]            Only in a notional sense was the question answered here by the Adjudicator one of mixed fact and law. He found that the Mr. Msuya to be a manager by considering a single fact - the description in the employment contract that the Applicant was a "market manager".

[19]            The finding here that the Mr. Msuya was a manager within the meaning of section 167(3) of the Code involved, as a first step, the adoption of the appropriate legal test and, therefore, it involved a point of law: see Canwell Enviro-Industries Ltd. v. Baker Petrolite Corp 2002 FCA 158 at paragraphs 50 to 53, [2002] F.C.J. No. 614.

[20]            The determination of what is meant by the term "manager" in section 167(3) of the Code is not particularly policy-laden or polycentric. It is a determination made in the context of a lis between two adversarial litigants and where the interests of third parties are not in issue. The question is also one for which the Adjudicator cannot be said to have any particular expertise because it involves a simple legal definition applied in the context of a private employment relationship. Finally, and most importantly in this case, this is an issue of law going directly to the Adjudicator's jurisdiction to resolve the dispute. All of these considerations lead to the conclusion that the standard of review with respect to an adjudicator's decision as to what constitutes a "manager" under section 167(3) of the Code is one of correctness. I am supported in this view by the previous decision by Justice Andrew MacKay in Waldman v. Eskasoni Band Council 2001 FCT 867, [2001] F.C.J. No. 1228 where he held at paragraph 8 as follows:

8       Counsel for the Eskasoni Band Council and for Mr. Waldman were agreed that correctness was the standard of review applicable in relation to the issue concerning the adjudicator's jurisdiction, that is, the decision whether Mr. Waldman was a "manager" within the meaning of that term under the Code. If he was a manager, the adjudicator had no jurisdiction to consider his claim for wrongful dismissal. The standard of review on this issue is "correctness" since it determines the adjudicator's jurisdiction. (See: CIBC v. Bateman, (1991), 42 F.T.R. 218 aff'd (19920, 140 N.R. 399 (F.C.A.); and Canada Post Corporation v. Pollard, (1993), 161 N.R.66 (F.C.A.)). (sic)

Issue 2              Does the Adjudicator's decision stand up to judicial review?

[21]            The question remains - did the Adjudicator commit an error of law in concluding that Mr. Msuya was a manager and, therefore, excluded from the application of the adjudication provisions of the Code?

[22]            What the Adjudicator was required to do in this case was to first identify the correct legal test for determining whether the Applicant was a manager and then to hear and apply the evidence which was relevant to that test. In this case, he did neither.

[23]            There are many authorities dealing with the determination of whether a person is a manager pursuant to subsection 167(3) of the Code. The fundamental test is whether that person had significant autonomy, discretion, and authority in the conduct of the business of the employer. A very thorough review of the relevant caselaw can be found in the decision of Adjudicator A.E. Bertrand in Isaac v. Listuguj Mi'gmaq First Nation [2004] CLAD No. 287. That decision also provides a useful list of factors and principles which should typically be considered in determining whether a person is a section 167(3) manager (see paragraph 164). The approach taken by Adjudicator Bertrand in the Isaac case, above, is the correct one.

[24]               Here the Adjudicator wrongly held that the test for deciding if Mr. Msuya was a manager involved only a consideration of his title in the employment contract. That this was a fundamental legal error is well exemplified by the authorities which have consistently held that the job title afforded to a person has minimal, if any, relevance to whether that person is a section 167 manager. This point is made by Justice Marc Noël in Leontsini v. Business Express Inc. [1997] F.C.J. No. 26 where he stated:

11       Accordingly, it is the nature of the work actually performed, rather than the employee's title or place in the management chain, that must be used to determine whether he or she is a manager within the meaning of subsection 167(3).    Someone who is part of management and whose primary responsibility is in fact to manage is a manager within the meaning of subsection 167(3), whether that person is at the upper or lower end of the management chain.

[25]            The Adjudicator made a second significant legal error in his approach to the issue of Mr. Msuya's status. He correctly observes at page 20 of the decision that he had no evidence before him as to what Mr. Msuya's management functions actually were, but then finds him to be a manager. It is clear that the onus of proving that an employee is a manager under section 167(3) of the Code rests upon the party making that assertion (in this case, Sundance). That principle was recognized in the decision of Justice MacKay in Waldman, above, where he held at paragraphs 15 and 16 as follows:

15       In the final analysis the adjudicator held that the burden of establishing that Mr. Waldman was exempt from consideration under the Code as a "manager" lay with the applicant Band Council. He found that there was not sufficient evidence to support a conclusion that the duties of Mr. Waldman, excluded him from consideration under the Code as a "manager". Thus the adjudicator maintained jurisdiction to deal with the complaint.

16       In so doing, in my opinion, the adjudicator was correct.

If, at the end of the fact-finding process, it has not been established that a person is an excluded manager the adjudicator must assume the jurisdiction to hear the case.

Conclusion

[26]            The Adjudicator's decision is set aside for the reasons set out above. Despite the Adjudicator's error in declining jurisdiction, there would not appear to be any reason why he should not re-determine the case. However, given the lapse of time since this case was heard, I will leave it to the Minister's discretion pursuant to section 242 of the Code to decide the person to be appointed to hear the matter afresh.

[27]            As an addendum, I will deal with a point of procedure raised by counsel for Sundance at the opening of argument in this case. Sundance took issue with the contents of two affidavits which had been filed in support of the Applicant, citing the absence of the deponent's personal knowledge and also arguing that the affidavits contained points of argument and were not limited to factual assertions. Sundance sought to have those provisions struck out of the affidavits. In view of the fact that it was not necessary for me to consider the affidavit evidence in reaching my conclusion in this case, I would dismiss the application because of mootness.

JUDGMENT

            THIS COURT ORDERS that the Adjudicator's decision is hereby set aside and the case is remitted for re-determination.

            THIS COURT ALSO ORDERS that the Respondent's motion to strike certain passages from the Applicant's supporting affidavits be dismissed.

            THIS COURT ALSO ORDERS that the Applicant shall have his costs on a party and party basis.

                                                                                                " R. L. Barnes "

                                                                                                          Judge

FEDERAL COURT

Names of Counsel and Solicitors of Record

DOCKET:                                           T-792-05

STYLE OF CAUSE:                           MOSES MSUYA

                                                                                                                                              Applicant

and

SUNDANCE BALLOONS INTERNATIONAL LTD.

Respondent

DATE OF HEARING:                       Feb. 21, 2006

PLACE OF HEARING:                     TORONTO, ONTARIO

REASONS FOR ORDER

AND ORDER BY:                             THE HONOURABLE MR JUSTICE BARNES

DATED:                                              March 13, 2006

APPEARANCES BY:

Bernard Verbanac                                                                     FOR THE APPLICANT

Lorraine Por                                                                              FOR THE RESPONDENT

SOLICITORS OF RECORD:

Morell Kelly P.C

Professional Corp.

Kitchener, Ontario                                                                     FOR THE APPLICANT

Harrison Pensa LLP

London, Ontario.                                                                       FOR THE RESPONDENT