Date: 20030916
Docket: T-792-00
Citation: 2003 FC 1064
Ottawa, Ontario, September 16, 2003
PRESENT: THE HONOURABLE MR. JUSTICE SIMON NOËL
BETWEEN:
EXPRESS HÂVRE ST-PIERRE LTÉE
Plaintiff
and
DENIS LEBLANC
Defendant
and
ROBERT DEBLOIS
Third party defendant
REASONS FOR JUDGMENT AND JUDGMENT
[1] Pursuant to a judgment by the Federal Court of Appeal on January 20, 2003, the purpose of this judgment is to determine whether the refusal to reinstate the defendant Denis Leblanc, in accordance with the conclusion by arbitrator François G. Fortier that he should be reinstated, was based on unjustified or unlawful grounds, and to set the compensation accordingly. Further, the defendant Leblanc is seeking payment of his counsel's fees and of costs. The Court will consider the issue, as set forth by the Court of Appeal, in a simplified action filed by the defendant.
STATEMENT OF FACTS AND PRIOR PROCEEDINGS
[2] As such, I adopt in part the summary of the matter given by my colleague Rouleau J. in his judgment of June 20, 2001. On May 8, 1997, the defendant, who was then 56 years old, had been employed by the plaintiff Express Hâvre St-Pierre Ltée as a driver for 12 years and was dismissed by the plaintiff. The defendant subsequently filed a complaint for unjust dismissal which on March 16, 1999, was found by arbitrator François J. Fortier to be valid in part. The arbitrator quashed the defendant's dismissal and ordered that he be reinstated. Additionally, he substituted a one-month suspension for the dismissal and ordered the plaintiff to pay the defendant the salary he had lost from June 7, 1997 to April 1, 1999. The arbitrator reserved jurisdiction to determine amounts due in the event the parties could not agree in this regard.
[3] On April 2, 1999, the plaintiff's representative, Pierre Vigneault, informed the employee who had replaced the defendant, Marc-André Gingras, that as a result of company reorganization, two trucks assigned to long-distance transportation would be sold, his position would be abolished on April 16, 1999, and the corresponding work given out to subcontractors. The plaintiff offered to allow Mr. Gingras to purchase one of the trucks, and he did so. Mr. Gingras continued to provide his services to the plaintiff.
[4] In early June 1999, the defendant contacted another representative of the plaintiff, Nicolas Vigneault, who he said told him that his position had been abolished. Mr. Vigneault then offered to allow the defendant to work either in Montréal or at Hâvre St-Pierre. The defendant, who is a resident of Québec and was 59 years old at the time, declined.
[5] As the parties were unable to agree on the procedure for reinstatement they again appeared before arbitrator François G. Fortier on June 29, 1999. In the meantime, counsel for the defendant, in view of the situation, on June 21, 1999, had filed a second complaint with the arbitrator for unjust dismissal. On August 18, 1999, arbitrator Fortier rendered his decision and set the quantum of damages for the period between June 7, 1997 and May 1, 1999. The amounts determined by arbitrator Fortier were paid by the plaintiff on or about September 16, 1999.
[6] The second complaint was heard by arbitrator Robert Deblois on February 16, 2000. The arbitrator first concluded that, although Mr. Gingras was now doing subcontracting work for the plaintiff, he was still an employee of the plaintiff within the meaning of the Canada Labour Code. He further held that the defendant's former position was still being filled by Mr. Gingras, on the same terms except for two points, namely salary and ownership of the vehicle. The employer could not claim that the position no longer existed in its business and was therefore unable to argue that it had been abolished. The arbitrator found that the evidence showed that the defendant had been the victim of an unjust dismissal. He noted that the plaintiff had sold its trucks without giving the defendant an opportunity to purchase them, though it was aware of the content of the arbitrator's decision regarding the reinstatement. Arbitrator Deblois accordingly ordered that the defendant be paid an indemnity.
[7] This decision by Mr. Deblois was the subject of judicial review, which was allowed by Rouleau J. (citation: [2001] F.C.J. No. 1007). The latter held that arbitrator Deblois did not have jurisdiction to hear the case, but that the defendant could seek implementation by the equivalent of arbitrator Fortier's order. At paragraphs 36 to 39 of his reasons, Rouleau J. said the following:
In the case at bar the adjudicator's first order was filed on June 3, 1999 (p. 112 of defendant's record), so that the defendant could have exercised this forced execution remedy in the Federal Court. He could have asked that the order be implemented in kind or by the equivalent, but did not do so.
This has unfortunate consequences for the defendant. The second adjudicator's decision must be completely quashed even though it appears that it was correct, at least as regards the assessment of the evidence and the merits of the case. Allowing the instant application for judicial review will have the effect of returning the matter to this Court, which will hear a new proceeding for forced execution. It is very likely that the result will ultimately be the same.
Accordingly, the second adjudicator did not have jurisdiction to hear the matter. I should add at once that many errors occurred in this case, both on the part of the decision-makers and on the part of the parties, so that the defendant should not have to suffer from paying costs because of the proceeding mistakenly brought before the second adjudicator and in this Court.
As the decision of the adjudicator François G. Fortier was filed in the Registry of the Federal Court and that order has the effect of a judgment, I will allow the defendant Denis Leblanc until October 1, 2001, to proceed with his compulsory enforcement remedy and authorize the plaintiff to take no action against the defendant Denis Leblanc until judgment is rendered by this Court on his forced execution proceeding. [My emphasis.]
[8] Following this order, the defendant filed two motions: one which was dismissed by Pinard J. on July 12, 2001, and the other which was allowed by Tremblay-Lamer J. The latter motion sought implementation by the equivalent of arbitrator Fortier's decision on March 16, 1999. In particular, the defendant sought to have arbitrator Fortier's decision implemented in view of the judgment of Rouleau J., so as to obtain the same decision given by arbitrator Deblois in the second dismissal complaint. At paragraphs 22 to 24 of her judgment on August 27, 2001, my colleague Tremblay-Lamer J. said the following:
Although the respondent paid the money determined by the adjudicator, it did not comply with the reinstatement order. Contrary to what the respondent argued in this regard, the filing of a second unjust dismissal complaint by the applicant cannot be regarded as a waiver of the reinstatement order, which was still valid.
The Federal Court is a court of equity. It is a well-settled rule of equity that any right is accompanied by a remedy. When the latter is not available, it is the judge's duty to provide one. Consequently, I consider that in the case at bar the Court can order the enforcement by equivalence of the reinstatement order contained in the adjudicator Fortier's decision on March 16, 1999, calculation of the compensation being the only means of enforcing this part of the adjudicator's decision.
Since the parties submitted no evidence and made no submission on the damages relating to the respondent's refusal to observe the reinstatement order, the Court must proceed by specially managed proceeding to determine the compensation. [My emphasis.]
[9] This judgment was appealed by the plaintiff. Nearly a year and a half later, on January 20, 2003, the Federal Court of Appeal allowed the appeal and partly varied the order to read as follows:
A judge will be appointed to proceed by way of a specially managed proceeding to determine, on the basis of the evidence in docket T-792-00, whether or not the refusal to reinstate the respondent following the order to reinstate made by Arbitrator François G. Fortier was based on unjustified or illegal grounds, and accordingly to establish the compensation.
[10] However, in the meantime, on January 31, 2002, Richard Morneau, the prothonotary assigned to the specially managed proceeding in accordance with the order by Tremblay-Lamer J., ordered that the compensation due to Mr. Leblanc, if any, be determined by a simplified action. The defendant accordingly filed a simplified action on February 14, 2002.
[11] In an order dated June 20, 2002, regarding the pre-trial conference and conduct of the action, the prothonotary determined, inter alia, that the amount of the monthly indemnity would be $4,000, and if necessary, the calculation should be made on the basis of that amount.
[12] On February 6, 2003, the prothonotary indicated that the hearing scheduled for February 12, 2003, would proceed in accordance with the Court's directions in its decision of January 20, 2003. That hearing was adjourned and was finally held before me on September 2, 2003.
POINT AT ISSUE
[13] In accordance with the Court of Appeal's judgment, the point at issue may be summarized as follows:
Based on the existing evidence in the record at present, was the refusal to reinstate the defendant Mr. Leblanc following the reinstatement order by arbitrator François G. Fortier based on unjustified or illegal grounds? If so, the Court shall set the compensation accordingly.
ANALYSIS
Dismissal
[14] From his second complaint before arbitrator Deblois and his motion for execution of arbitrator Fortier's decision by equivalence, the defendant's argument can be readily determined. He continues to allege that the so-called abolition of the driver's position was actually only a stratagem to avoid reinstating the defendant in accordance with the initial arbitral decision. The plaintiff submitted that the reason the defendant was not reinstated in his employment was that the employment no longer existed at the time the decision was made known and there was thus a problem implementing the arbitral decision which ultimately led to dismissal.
[15] Accordingly, the Court must determine whether the refusal to reinstate the defendant was based on unjustified or illegal grounds. This question has been dealt with twice in this matter: in the decision by arbitrator Deblois and in the above-cited judgment by Rouleau J.
[16] Although Mr. Deblois's decision was quashed, the reasoning in support of his conclusion on the dismissal is still important. In his judgment referred to above, Rouleau J. confirmed that the second arbitral decision was correct:
[22] Before the adjudicator the plaintiff argued that the defendant's position had been abolished. The adjudicator therefore considered the merits of this preliminary objection, dealing first with the nature of the function performed by Mr. Gingras, the employee who replaced the defendant. The adjudicator concluded:
[TRANSLATION]
In light of precedent and academic opinion, and in view of the evidence submitted to the undersigned adjudicator, it is clear that Mr. Gingras was and still is an employee of Express Hâvre St-Pierre Ltée within the meaning of the Canada Labour Code.
[23] The adjudicator then considered the concept of "discontinuance of a function" [cessation d'une fonction], which has now been replaced by that of "suppression de poste". He cited the following passage from Transport Guilbault inc. v. Lucien Leclerc [1986] F.C.J. No. 321, (May 21, 1986, case A-618-85):
The adjudicator dismissed this argument because he held that the "discontinuance of a function" referred to in this provision could not be the result of a decision by an employer to have a contractor do work which had till then been done by its employees. In our opinion this was an error. The discontinuance of a function within the meaning of s. 61.5(3)(a) is discontinuance of a function within a given employer's business. Such discontinuance may result from a decision made by the employer to give work done till then by its employees to a contractor. Provided that decision is genuine and there is nothing artificial about it, s. 61.(3)(a) cannot be interpreted otherwise without unduly limiting the employer's freedom to plan and organize its business as it wishes.
[24] The adjudicator therefore concluded that there had been no discontinuance of the function initially held by the defendant. He wrote:
[TRANSLATION]
The said function was still being performed by the same employee as before [Mr. Gingras] and on the same terms, except in two respects, those of remuneration and of ownership of the vehicle, as considered earlier. Essentially, the employer cannot say that the function no longer existed in its business.
Consequently, the undersigned adjudicator concludes that when the complainant contacted Nicolas Vigneault in early June 1999, it was incorrect to say that the position had been abolished, as that was not the case: Mr. Gingras was still working for Express Hâvre St-Pierre Ltée as he had been doing since the dismissal of the complainant, although some of his working conditions had changed and he had purchased the truck owned by the business.
[25] The plaintiff argued that the adjudicator made an error by applying Transport Guilbault, supra, but did not say what this error was. It appeared that the adjudicator cited Guilbault to clarify the scope of the concept of discontinuance of a function or abolition of a position. However, as it had previously been concluded that Mr. Gingras was still an employee of the company and still held the same position, the above-cited passage naturally became inapplicable. In view of the fact that the plaintiff did not appear to dispute the adjudicator's conclusion on the nature of the employment relationship between itself and Mr. Gingras, I do not see how the adjudicator can be blamed in this respect in any way.
Conclusions on dismissal
[26] The adjudicator objected that the plaintiff had not offered the defendant one of its trucks which was the subject of a sale, even though the plaintiff knew that under the first adjudicator's order it had to reinstate the defendant. He wrote:
[TRANSLATION]
It is far from satisfactory to say, as the witness Nicolas Vigneault did, that the reason the offer was not made to the complainant was simply that they did not think of it. That is to disregard much too easily an employee who had been working for the business for 12 years and on whose proceeding the adjudicator François G. Fortier had just ruled favourably. The evidence was that the business was informed that the adjudicator Fortier had rendered his decision before the offer was made to Mr. Gingras. Clearly, the employer was not interested in re-hiring the complainant. The exchanges of correspondence that were to follow the decision by the adjudicator Fortier indicate that it was not until early June 1999 that the complainant was finally told of the employer's position, namely that his job had been abolished, and this was in a contact he initiated directly with a representative of the company.
It should be recalled that the employer submitted no other arguments apart from saying that the position had been abolished, an argument which the undersigned adjudicator does not accept. In the circumstances, therefore, the undersigned adjudicator concludes that Express Hâvre St-Pierre Ltée unjustly dismissed the complainant Denis Leblanc.
[27] Besides suggesting nothing to justify a possible dismissal, the plaintiff objected that the adjudicator had imposed on it a duty to give the defendant a [TRANSLATION] "right of first refusal" on purchase of the truck. In its submission, [TRANSLATION] "it would be bizarre if merely in order to comply with a subsequent reinstatement order a business had to purchase a truck for the purposes of reinstatement, regardless of its operating requirements, its right of management and changes taking place in the ordinary course of business". In my opinion, the plaintiff is interpreting the adjudicator's decision in a wholly inadmissible way. It is clear that the adjudicator only held the fact there was no purchase offer to the defendant against the plaintiff for purposes of credibility. He certainly did not impose such a duty on the plaintiff, but rather held that in the circumstances the fact that nothing was offered to the defendant was suspicious, and taken together with the other facts undermined the credibility of the plaintiff. I find no error by the adjudicator in this approach or on this question, which is fundamental to his jurisdiction as the judge of fact.
[28] In the circumstances, and in the absence of any argument to the contrary, I consider that the adjudicator's decision on the unjust nature of the dismissal was entirely justified. [My emphasis.]
[17] Accordingly, pursuant to section 240 of the Canada Labour Code, R.S.C. 1985, c. L-2, and the case law, in particular Transport Guilbault Inc. v. Lucien Leclerc, [1986] F.C.J. No. 321, and more recently Côté and Far-Nic Transport Inc., T.A., 2002-11-25, in which arbitrator Blouin concluded that a truck owner such as Mr. Gingras, the defendant's replacement, is for all legal purposes an employee, even if he is incorporated, because he provides his work in accordance with instructions from the employer, and based on the analysis of arbitrator Deblois and of Rouleau J., I can only subscribe to the latter's comments.
[18] I am therefore able to conclude that the plaintiff never intended to reinstate the defendant since the changes within the plaintiff company which resulted in abolishing the trucker's position occurred in the days following receipt by the employer of the arbitral decision ordering that the defendant be reinstated, and were made without the defendant's knowledge. Essentially, the evidence showed that the business knew of Mr. Fortier's first arbitral decision before the subcontracting offer was made to Mr. Gingras, the defendant's replacement. It was not until early June 1999 that the defendant was told of the plaintiff's position, namely, that his job had been abolished. The employer did nothing to inform the defendant of the opportunity of buying a truck and carrying out the trucking duties as a subcontractor.
[19] I find that, without consulting its counsel, the plaintiff deliberately tried to get around the decision regarding reinstatement of the employee, thus acting contrary to the arbitral decision. This finding is based, inter alia, on the following facts:
(1) no offer was made to the defendant to allow him to purchase the truck and do transportation, although the plaintiff's officers knew of the arbitral decision: the reason given, a simple oversight, is not credible and indicates an intention not to have any dealings with the defendant;
(2) the employer's officers informed their counsel in June 1999 that a reorganization in transportation took place in April 1999, despite the fact that the latter was in discussion with the defendant's counsel to provide follow-up on the arbitral decision: this indicates a lack of candour and raises doubts about the reason for the reorganization. Additionally, it was not until early June that the defendant was informed that transportation would be reorganized;
(3) although there was evidence that discussions were held by the plaintiff in order to reorganize transportation so as to make savings, the evidence as a whole was that the reorganization was prompted by the arbitral decision and its purpose was to avoid reinstating the defendant;
(4) this conduct by the employer indicates an improper intention, that is, simply to avoid the arbitral decision;
(5) this conduct is unacceptable and had the result of depriving the defendant of the work he had done for over 12 years. The plaintiff's actions resulted in significant damage. Accordingly, I conclude on the basis of the evidence that the plaintiff refused to reinstate the defendant for unjustified and illegal reasons.
Indemnity
[20] As I consider that the refusal to reinstate Mr. Leblanc was unjustified, I must now calculate the compensation accordingly. First, I should recall that the plaintiff has already paid the defendant compensation for the period preceding May 1, 1999, as calculated by arbitrator Fortier on August 18, 1999:
- $25,440 for 1997, bearing interest at 5% as of September 1, 1997;
- $40,600 for 1998, bearing interest at 5% as of July 1, 1998;
- $16,044 for the first four months of 1999, bearing interest at 5% from March 1 to the date of payment (September 16, 1999).
[21] As he mentioned in his motion before Tremblay-Lamer J., the defendant claimed to be entitled to implementation of the compensation order of arbitrator Deblois on April 17, 2000, namely compensation for non-reinstatement, set at 16 months, and calculated on $4,000 a month (referring to the calculations made by Mr. Fortier in his decision of August 18, 1999, and to the prothonotary's order dated June 20, 2002), for a total amount of $64,000.
[22] Despite the fact that arbitrator Deblois' decision was quashed, I adopt the opinion of my colleague Tremblay-Lamer J., cited above, when she explained that the Federal Court is a court of "equity" and that the judge must fashion a remedy when none is available. Performance by equivalence of the reinstatement order mentioned in the decision of arbitrator Fortier on March 16, 1999, can only be by the calculation of compensation.
[23] As such, it seems to me from the evidence and the dates indicated in the record that the compensation should be 15, not 16, months as alleged by the defendant. The compensation ordered by arbitrator Fortier in his decision of August 18, 1999, covered four months in 1999, and therefore up to April 1999 inclusive. However, it is logical to calculate the compensation for non-reinstatement from May 1, 1999 to August 1, 2000, not inclusive, since the Régie des rentes du Québec awarded the defendant a disability pension beginning in August 2000. Accordingly, compensation of $4,000 a month for 15 months, amounting to $60,000, should be paid to the defendant with interest at 5%, as provided in the Interest Act, R.S.C. 1985, c. I-15, as of May 1, 1999. I arrive at this compensation for the following reasons:
(1) the stratagem used by the plaintiff to avoid reinstating the defendant is unacceptable;
(2) the defendant's seniority with the employer (over 12 years);
(3) the age of the defendant, his level of education and the limited opportunities he has for obtaining future employment.
Costs
[24] Additionally, in view of the plaintiff's conduct in this matter and its systematic refusal to comply with arbitrator Fortier's conclusion regarding reinstatement, the defendant asked the Court, for costs in the amount of $36,949 to cover his legal fees. The plaintiff objected, as it argued that the issue could have been completely resolved by arbitrator Fortier at the hearing regarding calculation of the compensation. Further, it maintained that the filing of a second complaint by the defendant was without justification and impeded resolution of the matter.
[25] Bearing in mind the plaintiff's attitude to the defendant in this matter, and in light of arbitrator Fortier's decision of March 16, 1999, I do not think the plaintiff wanted to resolve the matter. On the contrary, it created an unjustified situation when Mr. Leblanc's position was abolished, a strategy used to get around arbitrator Fortier's conclusion that Mr. Leblanc should be reinstated. This is unacceptable and resulted in the initiation of proceedings which were not necessary.
[26] On the other hand the defendant, as Rouleau J. concluded, should not have filed a second dismissal complaint and should have relied on the proceedings for implementation of arbitrator Fortier's decision of March 16, 1999. Consequently, the subsequent proceedings were pointless.
[27] In view of the complete discretion given the Court by Rule 400 of the Federal Court Rules, and bearing in mind the fact that the defendant must pay part of his counsel's fees, the plaintiff should nevertheless also pay part of those fees because of its unacceptable conduct and the use of its stratagem to avoid arbitrator Fortier's decision. An amount of $12,500 seems proper.
THE COURT MAKES THE FOLLOWING ORDER:
ALLOWS this action;
ORDERS the plaintiff to pay the defendant Leblanc the sum of $60,000 as compensation with 5% interest, as of May 1, 1999;
ORDERS the plaintiff to pay $12,500 on a solicitor-client basis as costs to be paid to the defendant Leblanc.
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"Simon Noël"
Judge
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Certified true translation
Suzanne M. Gauthier, C. Tr., LL.L.
FEDERAL COURT
SOLICITORS OF RECORD
FILE: T-792-00
STYLE OF CAUSE: EXPRESS HÂVRE ST-PIERRE LTÉE v. ROBERT DEBLOIS ET AL.
PLACE OF HEARING: Québec
DATE OF HEARING: September 2, 2003
REASONS: Simon Noël J.
DATE OF REASONS: September 16, 2003
APPEARANCES:
Jean-François La Forge FOR THE PLAINTIFF
Laval Dallaire FOR THE DEFENDANT
SOLICITORS OF RECORD:
Jean-François La Forge, attorney FOR THE PLAINTIFF
Québec, Quebec
Gagné, Letarte FOR THE DEFENDANT
Québec, Quebec
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