Dynamex Canada Inc. v. Nutbrown, 2003 FCT 548

                                                                                                                                            Date: 20030502

                                                                                                                                       Docket:    T-535-02

                                                                                                                              Citation: 2003 FCT 548

Ottawa, Ontario, this 2^nd day of May, 2003

PRESENT:    THE HONOURABLE MR. JUSTICE BLANCHARD

BETWEEN:

                                                          DYNAMEX CANADA INC.                                                          

                                                                                                                                                       Applicant

                                                                              - and -

                                                            LORETTA NUTBROWN

                                                                                                                                                   Respondent

                                               REASONS FOR ORDER AND ORDER

Introduction

[1]                 This is an application for judicial review of the decision of a labour adjudicator appointed pursuant to Division XIV, Part III of the Canada Labour Code, R.S.C., 1985, c. L-2, as amended (the "Code"). In his decision rendered March 1, 2002, the adjudicator determined that the dismissal of the respondent was unjust and ordered that she be compensated with an award of seven months' wages. The applicant maintains that the adjudicator did not have jurisdiction to hear the claim and seeks to have the decision quashed.

Facts

[2]                 The applicant, Dynamex Canada Inc. ("Dynamex"), is a transportation company operating sixteen branches throughout Canada.

[3]                 The respondent, Ms. Loretta Nutbrown, was hired by the applicant in October 1995 as a full-time fleet supervisor in Cornwall, Ontario. On January 24, 2001, she began a period of sick leave. At this time, her duties were spread around to other (at least two) employees. Ms. Nutbrown was scheduled to return to work on March 19, 2001.

[4]                 In February 2001, the applicant parcelled out Ms. Nutbrown's duties among other employees as a result of a reorganization. Part of the work performed by her in Cornwall was transferred to other branches. The work remaining in Cornwall amounted to 3 hours per day.

[5]                 On March 8, 2001, the applicant met with Ms. Nutbrown to inform her that her job had been eliminated and offered her a part-time job of 4 hours per day at her regular rate of pay, with the same benefits she had received previously. She refused the position and then filed a complaint of unjust dismissal under s. 240 of the Code.

[6]                 Adjudicator Dumoulin was appointed to hear the complaint. A hearing was held on February 13, 2002. On March 1, 2002, the adjudicator determined that Ms. Nutbrown had been unjustly dismissed and ordered an award of 7 months' wages. The applicant seeks judicial review of that decision.   

Adjudicator's Decision

[7]                 The adjudicator began by establishing the relevant facts. In 1995 to 1998, Dynamex employed 14 to 16 drivers. In 1999, the loss of a major customer resulted in a 50% drop in business in the Cornwall area. Consequently, the number of drivers in Cornwall was reduced to 7 in 1999. Dynamex stated that, in order to justify the respondent's job, it added to her duties the responsibility for the Safety and Compliance Program and the control of Highway 407. Ms. Nutbrown stated that, after the 1999 reduction in drivers, half of her workload consisted of safety and compliance duties.

[8]                 The adjudicator noted that the respondent began a period of sick leave on January 24, 2001 and that, prior to returning to work, she was informed by management that her job had been converted to a part-time position. At the hearing, Mr. Lepitre, the Dynamex representative, stated that he had offered Ms. Nutbrown the part-time clerical position and, in addition, stated that he also gave her the option of assuming her position as fleet supervisor in Montréal. However, Ms. Nutbrown denies ever being offered full-time work in Montréal.

[9]                 Ms. Nutbrown testified that she wrote two letters to her employer, dated March 20 and March 26. In the first, she asked for her previous position back. In the second, she stated her view that she had been constructively dismissed from her position. She testified that she did not receive a response from Dynamex. However, at the hearing, Mr. Lepitre produced a letter dated March 28, which was a response to Ms. Nutbrown's two letters and stated that the changes to her position were a "realignment and re-positioning of specific duties such as Safety and Compliance and driver administration". The letter noted that the realignment was a consequence of the 1999 decline in business in Cornwall.   

[10]            Ms. Nutbrown received two weeks' wages in lieu of notice and two more weeks of wages as severance pay. Subsequently, she submitted 10 applications for work, and was successful in finding work at a comparable salary in November 2001.   

[11]            The adjudicator addressed two preliminary issues at the outset: whether Ms. Nutbrown was precluded from bringing her claim because (i) she was a "manager" within the meaning of subsection 167(3) of the Code, or (ii) she had been laid off "because of lack of work" within the meaning of paragraph 242(3.1)(a) of the Code.

[12]            The adjudicator determined that Mr. Nutbrown was not a manager under subsection 167(3) of the Code. He also determined that she had not been laid off because of lack of work. At page 11 of its decision, the adjudicator stated:

The second preliminary issue concerns paragraph 242(3.1)(a) of the Code which provides in part that no complaint shall be considered by an adjudicator in respect of a person where that person has been laid off because of lack of work.

[13]            The adjudicator stated that the duties formerly undertaken by Ms. Nutbrown were transferred to other branches, in particular, the Safety and Compliance duties and the Highway 407 control work. The adjudicator noted that there was no evidence of a reduction in the workload between the time of Ms. Nutbrown's sick leave and her March 8, 2001 meeting with Mr. Lepitre, but that the reduction occurred in 1999 when the number of drivers was reduced to 7. The adjudicator stated at page 12 of its decision:

It follows that the reduction in the hours of work made available to Ms. Nutbrown was not due to a lack of work, but rather to a transfer of the majority of her duties to other locations. Hence, there was no lack of work and certainly no lay-off of the complainant because of that and paragraph 242(3.1)(a) of the Code does not preclude a consideration of the present complaint. (Emphasis added)

[14]            The adjudicator then turned to consider whether Ms. Nutbrown had been dismissed. The adjudicator determined that the employer had unilaterally made substantial changes to the contract of employment, given that the it had removed a "substantial number of duties" and left tasks of a clerical nature. The adjudicator rejected Mr. Lepitre's evidence that he had offered Ms. Nutbrown a full-time job in Montréal, since this evidence had not been mentioned in testimony-in-chief and yet would have been an important element of the employer's argument that there had been no dismissal.

[15]            The adjudicator concluded that Ms. Nutbrown had been wrongfully dismissed: there was no evidence establishing "just cause" and Mr. Lepitre testified that her work performance was considered to be satisfactory. The adjudicator determined that Ms. Nutbrown had made efforts to mitigate her losses and ordered an award of 7 months' wages.

Issue

[16]            Did the adjudicator have jurisdiction to hear the complaint in the absence of a finding in respect of "discontinuance of a function"?

Standard of Review

[17]            The standard of review of an adjudicator's decision concerning jurisdiction has been held to be correctness: see Atomic Energy of Canada Ltd. v. Jindal, [1996] F.C.J. No. 386, (QL); Thomas v. Enoch Cree Nation Band, 2003 FCT 104, [2003] F.C.J. No. 153 (QL).

Analysis

[18]            The applicant submits that the adjudicator completely overlooked the issue whether the respondent had been laid off "because of the discontinuance of a function". The applicant notes that the wording of paragraph 242(3.1)(a) of the Code refers to two stipulations that limit the jurisdiction of the adjudicator, and that the adjudicator failed to have regard for the second one. The applicant suggests that the adjudicator should have turned his mind to the second stipulation and determined that the respondent had been laid off because of "discontinuance of a function".

[19]            Paragraph 242(3.1)(a) of the Code provides:

[20]            The meaning of "discontinuance of a function" has been authoritatively interpreted by the Supreme Court in Flieger v. New Brunswick, [1993] 2 S.C.R. 651. In that case, Cory J. stated, at 664:

[...] 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 entirety 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 function". Similarly, if the responsibilities are decentralized, as happened in Coulombe, supra, there would also be a "discontinuance of a function". (Emphasis added)

[21]            As noted by the Supreme Court in Flieger, supra, in Mudarth v. Canada (referred to in the above quotation), the plaintiff was a secretary whose work was parcelled out to other, existing, employees. Cory J. stated, at 661:

The approach taken in Mudarth relates the word "function" to the "office" held by the plaintiff. Her office consisted of the bundle of tasks and responsibilities which had been undertaken and performed by her as a secretary. This bundle of tasks was no longer being performed. Thus her office had ceased to exist and there was accordingly a "discontinuance of a function".

[22]            I find, after an examination of the decision, the adjudicator did not consider whether the respondent had been laid off as a result of the "discontinuance of a function". It is clear that the adjudicator turned his mind to the issue as to whether the respondent had been laid off "for lack of work", for he states, at pages 11 and 12 of his decision:

The second preliminary issue concerns paragraph 242(3.1)(a) of the Code which provides in part that no complaint shall be considered by an adjudicator in respect of a person where that person has been laid off because of lack of work. Mr. Lepitre acknowledged under cross-examination that all the duties that were taken away from the complainant were given to other employees outside Cornwall, leaving her with less than four hours of work per day. [...]

It followed that the reduction in the hours of work made available to Ms. Nutbrown was not due to a lack of work, but rather to a transfer of the majority of her duties to other locations. Hence, there was no lack of work and certainly no lay-off of the complainant because of that and paragraph 242(3.1)(a) of the Code does not preclude a consideration of the present complaint. (Emphasis added)

[23]            It is clear from this passage that the adjudicator determined that the respondent had not been laid off because of lack of work and as a result, the adjudicator held that he was not precluded from hearing the complaint. However, the adjudicator failed to address the second phrase of paragraph 242(3.1)(a), which precludes the hearing of a complaint by an adjudicator in respect of a person where "...that person has been laid off... because of the discontinuance of a function."

[24]            In his reasons, the adjudicator stated that in his view, there had been a "transfer of the majority of the [the respondent's] duties to other locations." The Supreme Court in Flieger, supra, has established that a discontinuance of function occurs where activities that form part of an office are distributed among existing employees by an employer acting "in good faith".

[25]            On the facts of this case, bolstered by the adjudicator's finding that the majority of the respondent's duties were transferred to other locations, there is, in my view, a discontinuance of function. There is insufficient evidence in this case to establish that the employer was not acting in "good faith". The lack of analysis on this point leads me to conclude that the adjudicator failed to properly consider paragraph 242(3.1)(a) of the Code and in so doing committed a reviewable error. Had the adjudicator properly considered this provision of the Code, the only conclusion that he could have reasonably reached is that there was a discontinuance of function with respect to the respondent's position and that he was therefore precluded from hearing the complaint. Therefore, the adjudicator did not have jurisdiction to entertain the complaint.

Conclusion

[26]            For the reasons set out above, the decision of the adjudicator is quashed.

                                                                            ORDER

THIS COURT ORDERS that:

1.         The judicial review of the decision of labour adjudicator Dumoulin rendered March 1, 2002, is quashed.

                                                                                                                                 "Edmond P. Blanchard"             

                                                                                                                                                               Judge             

                                                    FEDERAL COURT OF CANADA

                                                                 TRIAL DIVISION

                              NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                             T-535-02

STYLE OF CAUSE:                           Dynamex Canada Inc. v. Loretta Nutbrown

PLACE OF HEARING:                     Montréal (Québec)

DATE OF HEARING:                       April 11, 2003

REASONS FOR ORDER AND ORDER:                          THE HONOURABLE MR. JUSTICE BLANCHARD

DATED:                                                May 2, 2003

APPEARANCES:

Mr. Normand Drolet                                                                      FOR PLAINTIFF / APPLICANT

Mrs. Loretta Nutbrown                                                                 FOR DEFENDANT/ RESPONDENT

SOLICITORS OF RECORD:

Flynn Rivard                                                                                    FOR PLAINTIFF/APPLICANT

500-70 Dalhousie Street

Québec (Québec) G1K 7A6

Mrs. Loretta Nutbrown                                                                 FOR DEFENDANT/

Concession 9, R. R. #2                                                                  RESPONDENT

Lunenburg, Ontario, K0C 1R0