Redlon Agencies Ltd. v. Norgren, 2005 FC 804

Date: 20050603

Docket: T-1103-03

Citation: 2005 FC 804

Ottawa, Ontario, this 3rd day of June, 2005

PRESENT:    THE HONOURABLE MR. JUSTICE O'KEEFE

BETWEEN:

REDLON AGENCIES LTD.

Applicant

and

ARVINE NORGREN

Respondent

REASONS FOR ORDER AND ORDER

O'KEEFE J.

[1]    This is an application for judicial review pursuant to section 18.1 of the Federal Courts Act, R.S.C. 1985, c. F-7 of the decision dated May 29, 2003 of Judi Korbin, an adjudicator (the "adjudicator") appointed under the Canada Labour Code, R.S.C. 1985, c. L-2 (the "Code") wherein she determined that the respondent had been unjustly dismissed from his employment with the applicant and ordered the applicant to pay damages to the respondent in lieu of reinstatement.

[2]    The applicant requests:

1.               An order overturning Judi Korbin's decision of May 29, 2003, awarding Arvine Norgren the sum of $5,500 in lieu of reinstating his employment.

2.                An order that he is not entitled to any damages or severance pay.

3.                Such further and other relief as may be found to be appropriate by the Honourable Court.

4.                The costs of this application.

Background

[3]    Redlon Agencies Ltd. (the "applicant") was incorporated in British Columbia in 1986 and is currently a B.C. registered company that is licenced to deliver parcels within the municipality of Powell River. The applicant has been engaged in contract work with Canada Post since 1986 pursuant to various Divisional Combined Urban Services ("DCUS") contracts. The respondent was employed with the applicant since 1998.

[4]    In July 2001, the applicant's contract was up for renewal, but as he was unsure whether it was being renewed he submitted a bid after Canada Post put out a request for tenders for the provision of delivery of mail and parcels in the Powell River area, pursuant to a DCUS contract. The applicant was the successful bidder.

[5]    There are allegations as to the respondent's ability to continue doing the work he was, but in any event, the applicant kept the respondent on for a period of time after the awarding of the contract.

[6]    By letter dated April 22, 2002, the applicant gave the respondent four weeks notice that he was dismissing him effective May 16, 2002 from his position of postal delivery driver, ostensibly under the retirement provision that the applicant alleged is permissible under the British Columbia Employment Standards Act, R.S.B.C. 1996, Chapter 114.

[7]    The respondent submitted a complaint of unjust dismissal under the Code. By letter dated August 28, 2002, the parties were advised that an adjudicator had been appointed under the Code to deal with the complaint, by the then Minister of Labour.

Adjudicator's Decision

[8]    The adjudicator first dealt with the threshold question of whether she had jurisdiction. The applicant had objected to the matter being dealt with under the Code on the basis that its business is governed by provincial legislation. The adjudicator noted that a notice of constitutional question was submitted and sent to the Attorneys General of the provinces and Canada. The only response was from the Attorney General of Canada indicating that they would not be intervening.

[9]    The adjudicator first discussed elements of the DCUS contract and the attached Combined Urban Services Supplement (the "Supplement") and noted the elements of the relationship between the company and Canada Post pursuant to the DCUS and Supplement. The adjudicator noted, for example, (i) the DCUS contract is for the transportation of mailable matter tendered by Canada Post in accordance with the schedule; (ii) the company provides three or four vans and personnel to operate the vans to deliver products in Powell River, B.C.; (iii) the company handles bags of mail for box sites, parcels for delivery, some registered, some (parcel post) or express mail to homes and businesses in Powell River; (iv) failure to comply with the Supplement (which identifies the terms and conditions for the DCUS contract) is considered an event of default and can have serious consequences, including cancellation of the DCUS contract; (v) the DCUS contract refers to the contractor and its employees as representatives of Canada Post; (vi) Canada Post sets out the delivery procedures and the company follows them; and (vii) there are no "customer lists" but the customers are individuals and businesses that have elected to use postal services provided by Canada Post.

[10]                        The adjudicator noted the applicant's submission that the customers it services are simply using a delivery service. Its business is provincial in nature and as such, is governed by provincial legislation. It was therefore entitled to retire the respondent pursuant to the provincial retirement provisions, and further, that the unjust dismissal provisions of the Code do not apply.

[11]                        The adjudicator determined that if upon examination of the normal and ongoing operations of the applicant company, she found that it is in whole or in part integral to the effective operation of Canada Post, then the applicant is within federal jurisdiction and the Code applies.

[12]                        The adjudicator relied upon the methodology and analysis of the former Canada Labour Relations Board in Muir's Cartage Ltd. and Canada Post Corporation (1992), 17 C.L.R.B.R. (2d) 182 (aff'd F.C.A.) leave to appeal dismissed [1994] S.C.C.A. No. 50, in determining jurisdiction. The adjudicator noted the Board in Muir's Cartage, supra, followed the three part test set out by the Supreme Court of Canada in [1980] 1 S.C.R. 115">Northern Telecom Limited v. Communications Workers of Canada et al. [1980] 1 S.C.R. 115 and applied in relation to postal services in Canada Post Corporation and Shoppers Drug Mart Limited (1987), 1 C.L.R.B.R. (2d) 218 (aff'd F.C.A.) as follows:

1.                                                                                                                                       Is Canada Post a core federal undertaking?

The adjudicator determined that as Parliament has exclusive authority over postal services, the answer to the first question is yes.

2.                                                                                                                                 (a)         Is part of the normal activity of the employer a postal operation and, if so,

(b)        Does this constitute, in whole or in part, an integral part of Canada Post's business?

(a)        The adjudicator stated:

The respondent (Redlon) confirmed that its employees fill out the necessary paper work supplied by Canada Post for C.O.D.s, express parcels and undeliverable items and utilize equipment in the form of scanners supplied by Canada Post to participate in tracking mailable items within the Canada Post network. In effect, as in the Muir's case, the respondent directly contributes to fulfilling Canada Post's objects as defined in Subsection 5(1) paragraphs (a) and (b) of its enabling legislation. After careful consideration of the submissions and documentary evidence I am satisfied that, at a minimum, the portion of the Respondent's business concerned with fulfilling its obligations under the DCUS contract, the part of the operation where the Appellant worked, was directed at the provision of postal services.

(b)                The adjudicator noted that the company's contribution to the provision of postal services in Powell River, a small community in British Columbia, is substantial and significant. The adjudicator stated:

. . . I am satisfied that without the Respondent's participation (or that of another contractor), Canada Post's ability to provide postal services in Powell River would be compromised. Without the Respondent, or another contractor, Canada Post would either have to provide the services itself using its own employees or elect to shut down or curtail postal services in that community. Consequently, I find that the Respondent's postal operations are an integral part of Canada Post operations.

3.         Is there a practical and functional relationship between the employer and Canada Post?

The adjudicator noted numerous and continuous daily links between the company and Canada Post, and concluded that there is a practical and functional relationship between the company and Canada Post. The adjudicator also noted that at least three of the company's employees were deployed exclusively to provide the services articulated in the DCUS contract and the Supplement, and did so on a daily basis for a significant part of the day. The adjudicator also found that:

While the Respondent describes itself as a delivery service the facts provided by the Respondent and the terms and conditions described in the DCUS Contract and the Supplement show that its activities constitute a significant contribution to postal operations in Powell River and those operations are in turn linked to those of Canada Post such that Canada Post is able to fulfil its mandate. The seamless integration of the Respondent with Canada Post networks and operational requirements is essential to the effective and efficient operation of postal services in Powell River and while the Respondent is replaceable it is a necessary link between Canada Post and its clientele in Powell River.

[13]       The adjudicator therefore determined that the applicant's work was integral to the operations of Canada Post in Powell River and therefore she had jurisdiction to deal with the claim for unjust dismissal.

[14]       After determining that she did have jurisdiction to deal with the complaint, the adjudicator found that the respondent had been unjustly dismissed, and stated the following:

Merits of the Complaint

In all of the particular circumstances of this case, I am satisfied that the Respondent did not have just cause to terminate the Appellant's employment. The Respondent may well have had concerns about the Appellant's performance and his ability to continue to safely and effectively perform his job functions. However, no evidence was provided to me to indicate that the Respondent had ever raised these concerns with the Appellant prior to his termination. Consequently, there was no evidence that the Complaint [sic] was ever afforded an opportunity to address these concerns or correct any perceived deficiencies in his performance. Nor was there evidence to suggest the termination could be justified on any other legitimate or sustainable grounds. What I do have before me is the letter of termination which thanks the Appellant for his efforts and complements [sic] him on his dependability. On this basis there is no reason to think that the Appellant's performance was anything other than satisfactory. As such, I am satisfied that the Respondent did not have just cause to dismiss the Appellant.

Remedy

Subsection 242(4) of the Code sets out my remedial powers and reads as follows: . . .

The Appellant advised me that he does not wish to return to the workplace. Consequently, I am satisfied that an order pursuant to subsection 242(4)(c) is appropriate.

I have taken into account all of the relevant circumstances in this case which include the fact that the Appellant does not seek to return to work for this Employer, his length of service prior to his termination, the character of his employment, and his age.

In the result, I find the Appellant shall be entitled to damages in the amount of $5,500.00, less any statutory deductions, in lieu of reinstatement to employment.

Issues

[15]       1.          Did the adjudicator err in determining that she had jurisdiction to hear the complaint under the Canada Labour Code?

2.          Did the adjudicator err in awarding damages to the respondent for unjust dismissal?

Applicant's Submissions

[16]       Issue 1 (Jurisdiction)

The applicant submitted that as a B.C. registered company that operates solely within the province of British Columbia, and based on information received from various sources, including Canada Post, it should not be deemed to be subject to the provisions of the Code. The applicant submitted that Mr. Redlon contacted the B.C. Employment Standards Branch and was advised that if a B.C. registered company does not operate outside the province, they are covered under B.C. labour standards.

[17]       The applicant submitted that during the entirety of the company's existence, materials and correspondence related to employment matters and standards have been received solely from the provincial ministry. At no time prior to the respondent's complaint, did the applicant receive any information or communication from "Canada Labour" on working conditions or labour standards, as he should have had if he was in fact under the jurisdiction of the Code.

[18]       The applicant submitted that the adjudicator therefore erred in determining that it was subject to the Code.

[19]       Issue 2 (Retirement and Severance)

The applicant submitted that the respondent had requested to work for the applicant company until he reached the pensionable age for Old Age Security payments and a Canada Pension Plan retirement pension (approximately two and one-half years later). The applicant intended to hire the respondent for only a short term (approximately two years), delivering parcels for Canada Post.

[20]       The applicant submitted that complaints were received about the respondent and it was noticed that over time the respondent was having increasing difficulties in performing the job functions, including lifting parcels and loading parcels. He therefore decided to end the respondent's employment with the company on the basis of retirement age pursuant to B.C. legislation, which he is permitted to do as a B.C. company.

[21]       The applicant submitted that in keeping with the B.C. labour standards, he gave the respondent notice on April 22, 2002, that his employment was being terminated "under the retirement category" effective at the end of the day May 16, 2002. This was four weeks notice. In his submissions to the adjudicator, the applicant submitted that he was advised by the respective provincial and federal departments that in each instance once an employee turns sixty-five years of age, he or she could be retired by an employer.

[22]       The applicant further submitted that in any event, under the provisions of the Code , an employer is not required to pay severance pay to an employee who "on or before ceasing to be employed are entitled to a pension under the Old Age Security Act, or a retirement pension under the Canada Pension Plan Act or the Quebec Pension Plan Act".

[23]       The applicant submitted that the respondent is of the age that he is entitled to a pension as indicated in exhibit A to the affidavit of David Redlon, sworn August 13, 1994

[24]       Accordingly, as the respondent was not entitled to receive a severance payment, the adjudicator erred in awarding damages to the respondent.

Respondent's Submissions

[25]       The respondent did not file any affidavits or memorandum. Accordingly, there is no response to the applicant's submissions.

[26]       In his submissions to the adjudicator, the respondent stated that he was unaware of the employer being dissatisfied in any fashion with his work, and he had at no time indicated that he was planning on retiring once he was at the age where he was eligible for a pension.

Relevant Statutory Provisions

[27]       The Constitution Act, 1867 (U.K.), 30 & 31 Vict., c.3, reprinted in R.S.C. 1985, Appendix II, No. 5, states in part as follows: