Date: 20081217
Docket: T-289-08
Citation: 2008 FC 1389
Ottawa, Ontario, December 17, 2008
PRESENT: The Honourable Mr. Justice Phelan
BETWEEN:
COREY
NASH
Applicant
and
TREASURY BOARD SECRETARIAT
(CORRECTIONAL
SERVICE OF CANADA)
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
I. OVERVIEW
[1]
This
is an application for review of the decision made by an adjudicator under the Public
Service Staff Relations Act, R.S.C., 1985, c. P-35 (as rep. by Public
Service Modernization Act, S.C. 2003, c. 22, s. 285). The adjudicator found
that he had no jurisdiction to hear the grievance filed in 2002, because a
settlement agreement had subsequently been entered into between the Applicant
and Respondent. The Adjudicator found that the agreement was valid, was not
signed under duress, nor was it an unconscionable act on the part of the
Respondent employer.
[2]
The
Applicant was self-represented, and a summary of the facts and his position as
relevant to the issues before the Court have been divined from his written
materials as well as from his oral argument. In proceedings in this Court, the
Court accorded the Applicant considerable latitude in order that the context of
this case could be better understood. That latitude, however, does not extend
to altering the nature of this judicial review beyond a consideration of the
adjudicator’s decision with respect to the validity of the settlement
agreement. It does not include a consideration of the merits of the grievance, of
the past acts of the employer Correctional Service of Canada (CSC) (except as
they relate to the issue of the validity of the settlement), or of the implementation
of the settlement agreement.
II. BACKGROUND
A. Facts
Leading to the Filing of the Grievance
[3]
The
Applicant is a parole officer who originally worked at Stony Mountain
Institution (a federal medium security penitentiary) in the Winnipeg area, and is
an employee of the CSC even as of this date.
[4]
In
January 2002, due to actions arguably imputable to the employer, the Applicant’s
full name, home address, and phone number were posted throughout the
penitentiary where that information was accessible to both staff and to
offenders. This was a particularly troublesome event because the Applicant was
the subject of a gang “hit contract” on his life. The publication of the
Applicant’s personal information potentially placed himself and his family in
harm’s way. While there is a dispute as to whether the threat was credible, it
is not for this Court to determine that issue. However, there was evidence, as
found by Labour Canada, that the threat was credible.
[5]
On
March
13, 2002,
the Applicant filed a grievance, alleging disguised discipline against him. The
grievance was referred to adjudication on April 3,
2003.
By the time the matter worked its way to the adjudicator, the employer objected
to the matter going to adjudication on the grounds that the grievance had been
settled when the Applicant signed a memorandum of agreement (MOA) on July 26,
2004. The Applicant submitted that the MOA was obtained under duress and therefore
was not a binding and valid settlement.
[6]
The
hearing before the adjudicator was limited to the question of whether there was
a valid and binding settlement of the grievance. The existence of a binding
settlement deprives the adjudicator of jurisdiction to deal with the grievance.
B. The
Negotiation Process
[7]
The
Applicant was initially represented by his union in the course of the settlement
negotiations, but subsequently undertook his own representation.
[8]
Between
February 2002 and April 2004, the Applicant was placed on “injury on duty”
status. The Applicant had moved to Edmonton and was seeking a transfer to the Edmonton area along
with reimbursement for the associated costs thereof. The issue of a transfer to
Edmonton was
convoluted, but the record indicates that as early as August 28, 2002, the
employer asked the Applicant whether he wished to formally request a transfer
to that area.
[9]
On
April 13, 2004, Health Canada concluded that the Applicant was medically
fit to work as a Parole Officer in a Correctional environment. On May 12, 2004,
the employer advised the Applicant that it was prepared to consider his request
to return to work as a Parole Officer in Edmonton and asked that the Applicant
state his preference between that and a return to his substantive position at
Stony Mountain Institution.
[10]
In
June 2004, during the course of negotiations of the MOA, the employer sent a letter
to the Applicant confirming that he would be deployed to the Edmonton District
Parole Office. Counsel for the Respondent attempted to paint this as a
stand-alone letter which was unrelated to the settlement agreement. However,
the covering memo to the Applicant from the employer’s representative, Mr.
Hyppolite, a senior manager at CSC, starts: “[i]n an attempt to bring this
matter to a fair and successful conclusion, I am once again providing you with
a copy of the proposed agreement and offer of deployment for your signature”.
It would not be unreasonable for the Applicant to consider the two documents as
interrelated and that acceptance of deployment would prejudice his negotiations
of the settlement terms. Indeed, as early as March 15, 2004, the Applicant in
his letter (Exhibit G-12) linked new deployment to the settlement agreement.
[11]
On
June
8, 2004,
Mr. Hyppolite forwarded an executed settlement agreement to the Applicant for
his signature. The Applicant signed the agreement on or around June 25, having
made several handwritten changes to the typed copy. These changes, however,
were unacceptable to the employer. Between the end of June and the end of July
there were a series of exchanges between the parties, essentially tinkering
with the terms and the operative date of the agreement. For all intents and
purposes, there was a signed agreement in place by the end of July 2004.
[12]
On
August 18, 2004, the Applicant wrote to the Public Service Staff Relations
Board (Board) stating that he would withdraw his grievance from adjudication on
the condition that the Board remain seized of the matter to ensure that the
agreement is “fairly and properly implemented by both sides”. The Board advised
the Applicant that it did not have jurisdiction to do so.
[13]
On
November 22, 2004, the Applicant wrote to the Board, alleging that the terms of
the settlement had not been implemented and requesting a hearing. In addition,
the Applicant requested a six-month delay to allow him to obtain legal counsel.
Subsequently, on February 21, 2006, the Applicant wrote to the Board alleging
that the settlement was entered into under duress.
C. Proceedings
Before the Adjudicator
[14]
The
matter was heard before the adjudicator, Ian R. Mackenzie, and the hearing was
limited to the question of whether there was a valid and binding settlement of
the grievance.
[15]
The
Applicant requested, at the hearing, that a court reporter be present to record
the proceedings for his own note-taking purposes. While the court reporter in
attendance was unable to provide that service, the adjudicator granted a brief
adjournment for the Applicant to obtain alternate services. As he was unable to
do so in the time-frame granted, the hearing continued without a note-taker for
the Applicant.
[16]
During
the course of the proceedings, the Applicant sought to introduce an audiotape
of settlement discussions that had taken place over the phone and which he
taped, unknown to the other party. The evidence was not permitted to be
introduced.
[17]
The
adjudicator found that if the MOA signed by the Applicant and the employer was
binding, it would constitute a complete bar to adjudication. The adjudicator
also recognized that the Applicant has been through a difficult experience with
his employer. Ultimately, the adjudicator found that the settlement agreement
was not unconscionable and had not been signed under duress.
[18]
The
adjudicator stated that the issue of whether there was a valid agreement
between the parties had to be considered on an objective basis which examined
the manifest intentions of the parties at the formation of the agreement. The
adjudicator noted that the Applicant had stated on at least two occasions
during the negotiations that he was participating in the settlement discussions
“without full defence of his rights”. However, the adjudicator noted that the
Applicant had signed the agreement, that many of the Applicant’s proposed
changes were accepted into the final agreement, and that the various detailed changes
which he had proposed manifested his intention to enter into the agreement. The
adjudicator found that the manifest intention of both parties was to enter into
a binding agreement.
[19]
The
adjudicator also found that the Applicant’s statement that he was willing to
withdraw his grievance if the Board would “remain seized of the matter to
ensure the agreement is fairly and properly implemented by both sides”, was a
demonstration that he did not enter into the agreement under duress. The claim
of duress through financial stress caused by the ending of disability benefits
and the spectre of no income unless settlement was made, was not evidence of
duress in law.
[20]
The
adjudicator then considered whether the agreement should be void for
unconscionability. While the adjudicator recognized that there was inequality
of bargaining power, there was no evidence that the employer had unconscionably
used his position of power to secure an advantage, nor was the agreement
substantially unfair to the Applicant.
[21]
Having
concluded that the agreement was valid and binding, the adjudicator found that
he did not have jurisdiction to otherwise consider the terms of the settlement
or to proceed with hearing the grievance.
III. ANALYSIS
[22]
There
are two issues in this judicial review. The first is whether the adjudicator
accorded the proper level of procedural fairness to the Applicant. The second
is whether the Board’s finding that a valid settlement agreement existed is
legally sustainable.
A. Standard
of Review
[23]
The
standard of review with respect to procedural fairness has been consistently
held to be correctness.
[24]
Because
the adjudicator’s finding that there was a valid and binding settlement
agreement determines the adjudicator’s jurisdiction to hear the grievance, the
adjudicator must apply the correct law in making this determination. However, for
the findings of fact that ground the application of the law, the standard of
review is reasonableness, with deference given to the assessment of testimony
and issues of weight and credibility. (Dunsmuir v. New
Brunswick,
2008 SCC 9)
B. Procedural
Fairness
[25]
While
the Applicant does not explicitly raise procedural fairness as an issue, his
written materials and - more importantly - his oral presentation disclose that
he objected to the level of procedural fairness accorded him; firstly, because
he was denied use of a court reporter and secondly, because the adjudicator did
not consider or refer to enough of the Applicant’s evidence. The gist of the
Applicant’s submissions is that he was deprived of an opportunity to outline
all of the circumstances of his case, whether or not they related to the
execution of the agreement.
[26]
On
the narrow issue of the use of a court reporter, the adjudicator was entitled,
as master of his own proceeding, to determine that a court reporter was not
necessary for his own purposes. As to the Applicant’s request for a note-taker,
a brief adjournment was granted to him to obtain such support. There was no
requirement that the case be adjourned indefinitely because he had not
anticipated his need and was unable to find anyone to perform that function at
the last minute.
[27]
With
respect to the consideration of the Applicant’s evidence, the excluded evidence
was either improperly obtained (the audiotape) or dealt with the substance of
the grievance and not with the settlement negotiations. The Applicant failed to
understand the nature of the proceeding before the adjudicator in this regard.
The adjudicator was correct in limiting the scope of the evidence to the
matters directly at hand. There was no deficiency in procedural fairness in
either the conduct of the hearing or in the decision itself.
C. Validity
of the Agreement
[28]
The
Applicant raised a number of points in an attempt to show that the agreement
was invalid either because he was under duress at the time of its formation or because
the employer had proceeded in bad faith. The incidences of alleged duress
include the employer refusing to authorize the transfer to Edmonton until the
settlement was also finalized, the imposition of deadlines for the negotiation,
and the fact that the Applicant was facing economic difficulty by virtue of the
impending expiry of his disability benefits. As to bad faith, the Applicant
complains that the employer used its superior bargaining position to force him into
an unreasonable settlement by driving him into a financial corner, and further
never intended to implement the agreement in any event.
[29]
In
my view, the adjudicator applied the proper law to the issue of determining the
intention of the parties at the signing of the agreement. The adjudicator
referred to this Court’s judgment in MacDonald v. Canada (1998), 158 F.T.R.
1 (F.C.T.D.), to the effect that it is the manifest words and acts, judged by a
reasonable standard, which indicate a party’s intention to be bound to a
contract. Therefore, the adjudicator applied the correct legal test.
[30]
The
adjudicator also referred to the Applicant’s actions in making amendments to
the proposed agreement, including changing the dates of signing and of
implementation, as indications of the Applicant’s intention to be bound by the
agreement.
[31]
In
regard to the issue of duress, while not expressly stating the test for duress,
the adjudicator looked at the relevant factors in reaching the conclusion that
the Applicant was not under “duress” as a legal concept in entering into the
settlement. In particular, on the issue of his deployment to Edmonton, as a factor
of duress, it was the Applicant who linked that matter to the settlement and
introduced it as part of the negotiations (see paragraph 10 herein). His
actions of arriving at the Edmonton office to report for work and then refusing
to work because the settlement had not been effected indicates that he had implemented
the linkage of deployment with settlement.
[32]
The
adjudicator also correctly concluded that the financial strains under which the
Applicant was operating did not constitute duress. To conclude otherwise would
mean that every settlement of every employment dispute, suspension, or
termination where the employee is faced with a loss of wages could be
considered illegal for that reason alone.
[33]
With
respect to the Applicant’s allegations that deadlines were being imposed upon
him in respect of the formation of the settlement, there is nothing untoward in
a party insisting that the matter has to be settled within some reasonable date.
I can find nothing unreasonable in the adjudicator’s conclusions that there was
no duress in these circumstances.
[34]
The
adjudicator noted the somewhat inconsistent position taken by the Applicant in
insisting that he would drop his grievance if the Board would stay seized of
the implementation of the agreement, and yet claiming that no valid agreement
was in place. This was properly considered as evidence that the agreement was
acceptable to the Applicant, and not unduly imposed upon him.
[35]
The
adjudicator also turned his mind to the issue of whether or not the agreement
was unconscionable, and applied the test approved of in MacDonald,
above, at paragraph 27, in respect of unconscionability.
A transaction may be set aside as being
unconscionable if the evidence shows the following:
(1) That there is an inequality of
bargaining position arising out of ignorance, need or distress of the weaker
party;
(2) The stronger party has
unconscientiously used a position of power to achieve an advantage, and
(3) the agreement reached is
substantially unfair to the weaker party or, as expressed in the Harry v.
Kreutziger case, it is sufficiently divergent from community standards of
commercial morality that it should be set aside.
[36]
The
adjudicator recognized that the Applicant was at a disadvantage in bargaining
position but found that the Respondent did not unconscionably use its position
of power as an advantage.
[37]
In
addition, the adjudicator noted that the Applicant was originally represented
by his union. While the adjudicator does not refer to the matter, before this
Court the Applicant admitted, and documents substantiate, that throughout the
negotiation he was in consultation with counsel both in Winnipeg and in Edmonton. While he
may have been unable to afford ongoing day-to-day representation, he did have
the benefit of legal counsel and the imbalance in bargaining power may be
somewhat less than that which the adjudicator assumed.
[38]
Regardless
of any difference in bargaining power, there is no evidence to suggest that the
employer engaged in bad faith negotiations with the intent of never
implementing the agreement. There is no evidence to sustain a finding, as
alleged by the Applicant, that the whole negotiation was a ruse designed to
drive him into a settlement. To this day he remains an employee of CSC Canada
and he has received, at least in large measure, the benefits of the settlement
agreement.
[39]
The
adjudicator was correct in his legal conclusion that in the face of a valid and
binding settlement agreement he ceased to have jurisdiction to consider the initial
grievance or the implementation of the agreement. His findings with respect to
the facts of the case, and with the application of the correctly determined laws
to those facts was more than reasonable.
IV. CONCLUSION
[40]
Under
these circumstances, this application for judicial review will be dismissed.
Bearing in mind the difficulties the Applicant has suffered, and the emotional
nature of his circumstances (manifestations of which are replete throughout the
transcript of the proceeding before the Court), the Court will exercise its
discretion not to award costs in favour of the Respondent.
JUDGMENT
THIS COURT
ORDERS AND ADJUDGES that the
application for judicial review is dismissed. No costs are to be awarded to the
Respondent.
“Michael
L. Phelan”
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