Docket:
T-995-12
Citation: 2013 FC 1026
Ottawa, Ontario, October 10,
2013
PRESENT: The Honourable Madam Justice Heneghan
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BETWEEN:
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AIR SPRAY (1967) LTD.
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Applicant
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And
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MARK PAULSEN
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Respondent
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REASONS FOR JUDGMENT AND JUDGMENT
I. INTRODUCTION
[1]
Air Spray (1967) Ltd. (the “Applicant”) seeks
judicial review of the decision of Mr. Richard Bourassa (the “Adjudicator”),
dated April 24, 2012. The Adjudicator found that Mr. Mark Paulsen (the
“Respondent”) had been unjustly dismissed by his employer, the Applicant. He
awarded damages to the Respondent in the amount of $17,556.00 less the proper
statutory deductions and costs of $500.00, pursuant to the Canada Labour
Code, R.S.C. 1985, c. L-2 (the “Canada Labour Code”).
II. PRELIMINARY
MATTERS
[2]
The Respondent was served with the Notice of
Application on May 21, 2012, according to the affidavit of Bill R. Vanson,
Process Server. The Respondent filed a Notice of Appearance on May 28, 2012,
indicating that he intended to oppose the application but he did not file a
responding application record.
[3]
According to a log of phone calls maintained by
the Office of the Chief Justice in Ottawa, a voicemail had been left for the
Respondent on October 5, 2012, advising that the matter would be heard in Edmonton, Alberta, for one day.
[4]
By letter dated October 25, 2012, a certified
copy of the Order setting the hearing date of January 17, 2013, was sent to the
Respondent by registered mail. The letter was returned to the Registry of the
Court at 90 Sparks Street as unclaimed.
[5]
The January 17, 2013 hearing was adjourned by
Order of Justice Kane made on January 15, 2013. A letter dated January 15,
2013, forwarding that Order was sent to the Respondent by registered mail on
January 15, 2013; that letter was returned to the Registry of the Court in Ottawa because it had been sent to a non-existent address. The Respondent’s address had
been incorrectly entered on the envelope.
[6]
By letter dated January 21, 2013, an Order
setting a new hearing date of April 11, 2013, was sent to the Respondent by
registered mail. This letter was sent to the address on file for the Respondent
but was returned to the Registry of the Court at 90 Sparks Street, Ottawa.
[7]
I am satisfied that reasonable steps were taken
by the Court administration to advise the Respondent of the hearing dates. The
fact that one communication was sent to the wrong address is not determinative
since the subsequent letter of January 21, 2013, advising of the hearing date
of April 11, 2013, was sent to the correct address provided by the Respondent.
He did not take delivery of that letter.
[8]
There is another procedural matter to be
addressed. Upon review of the file prior to the hearing in April, I observed
that no Tribunal Record had been filed, pursuant to the Federal Courts Rules,
SOR/98-106 (the “Rules”). A Direction was issued on April 4, 2013, directing
the Applicant to file the Tribunal Record on or before April 11, 2013.
[9]
Counsel for the Applicant responded to the
Direction by letter dated April 5, 2013. In part that letter advised as
follows:
The Affidavit in the
Applicant’s Record includes all of the Applicant’s documents that were put
before the Adjudicator; no new or additional documents were included. We also
included the documents of the Respondent that were referenced at the hearing.
As the Adjudicator has not provided the Court with a Record, we enclose a
complete package of all Exhibits and documents entered.
[10]
I was not satisfied that the affidavit of Kirk
Carleton, included in the Applicant’s Record, included all the documents, nor
was I satisfied that the further materials submitted by Counsel for the
Applicant included all the materials that were before the Adjudicator.
Specifically, a comparison of the Applicant’s Record with the Exhibit Book
showed that Exhibit A to the affidavit of Kirk Carleton was not contained in
the Exhibit Book and that Exhibit U to the affidavit of Mr. Carleton was not
contained in the Exhibit Book.
[11]
At the hearing on April 11, 2013, the Applicant
provided a copy of the materials maintained by the Adjudicator. It subsequently
became known that this material did not include a handwritten document
submitted by the Respondent at the hearing before the Adjudicator. By further
Direction of the Court issued on October 8, 2013, leave was given to file a
Supplementary Certified Tribunal Record, nunc pro tunc, to include that
document.
III. FACTS
[12]
The Respondent was employed by the Applicant
from October 2006 to February 17, 2011. He was hired as a Crew Chief but was
demoted to the position of “Structures Mechanic 4” in October 2007. Between
June 2008 and December 2009, he was disciplined five times, twice for using his
cell phone in the hangar, once for failing to report his absence, once for
falling behind schedule, and once for allowing someone else to do work assigned
to him.
[13]
On January 19, 2011, the Respondent and a
co-worker, John Rowe, were working on a plane. Mr. Rowe asked the Respondent to
hold onto a drill while he drilled holes into an airplane spar. Mr. Rowe did
not follow the standard procedure of drilling the holes using the aircraft skin
as a template. Full-size rather than pilot holes were also drilled. As a
result, the holes in the spar were misaligned with the aircraft skin.
[14]
The Respondent was more experienced than Mr.
Rowe but neither corrected him or reported the incident. Co-workers were in the
hangar at the time but did not hear or see what happened.
[15]
On February 9, 2011, Mr. Bob Strain, the
Structural Supervisor, noticed the defective work. On February 10, 2011, Mr.
Rowe, the Respondent, and three other co-workers submitted incident/hazard
reporting forms, as part of the Applicant’s anonymous safety reporting system.
Another co-worker submitted an incident/hazard reporting form on February 17,
2011.
[16]
On February 17, 2011, the Applicant dismissed
the Respondent. The dismissal letter states that on January 19, 2011, the
Respondent drilled misaligned holes in an aircraft spar, in serious breach of
the safety management system. The letter further said that the incident was
exacerbated by the Respondent’s considerable experience and his failure to
recognize the seriousness of the error. The letter also stated that the
incident followed previous written and oral warnings relating to the Respondent’s
job performance.
[17]
On May 6, 2011, the Respondent submitted an
unjust dismissal complaint to Human Resources and Development Canada, pursuant
to Part III of the Canada Labour Code.
[18]
A draft invoice dated March 21, 2012, indicates
that the Applicant paid $10,666.73 to correct the damage to the aircraft
(Exhibit 1, Tab 16).
[19]
On March 22, 2012, a hearing was held before the
Adjudicator.
IV. DECISION
UNDER REVIEW
[20]
In the decision of April 24, 2012, the
Adjudicator found that the Respondent had been unjustly dismissed. The
Adjudicator noted that the onus of proving the existence of just cause lay with
the Applicant, and that just cause requires serious misconduct which is clearly
inconsistent with an employee’s express or implied service, and risks injury to
the employer’s interest through continued employment.
[21]
The Adjudicator found that the Applicant had not
met the burden of proving that the dismissal was just. He acknowledged the
Applicant’s argument that the error constituted serious misconduct with
potentially catastrophic consequences, and that the Respondent was responsible
for the error because he was the more experienced employee. He noted that the
Respondent had not been the Crew Chief, and had similar experience to the
employees other than Mr. Rowe. He also observed that Mr. Strain’s incident
report indicated that only two holes were misaligned on the wing on which the
Respondent assisted Mr. Rowe, and that almost all the reports described the
damage as “minor”. The Adjudicator concluded that the Applicant was attempting
to blame the Respondent rather than accepting responsibility for failing to
have appropriate supervision for Mr. Rowe.
[22]
With respect to damages, the Adjudicator stated
that adjudicators are not limited to awarding compensation to what could be
claimed under the common law, relying on the decision in Alberta Wheat Pool
v. Konevsky, [1990] F.C.J. No. 877. The Adjudicator noted the dates when
the Respondent found contract work and how much leave he took during that
employment period. He noted that the Respondent followed an apprenticeship
program to retrain as a welder. He also noted that the Respondent supplemented
his income by working overtime, so that his annual income was almost equal to
what he would have made with the Applicant. The Adjudicator noted that the
Respondent was out of work for approximately 21 days and that there was a difference
in his hourly wage. He awarded the Respondent three months salary, that being
$17,556.00 less statutory deductions, as well as $500.00 in costs.
V. APPLICANT’S
SUBMISSIONS
[23]
The Applicant argues that the Adjudicator erred
by failing to analyze the Respondent’s conduct in a contextual and
proportionate manner as discussed by the Supreme Court of Canada in McKinley
v. BC Tel, [2001] 2 S.C.R. 161, that is considering the nature and
circumstances of the misconduct and the extent to which such misconduct is
reconcilable with the employment relationship.
[24]
Next, the Applicant argues that the Adjudicator
failed to assess the Respondent’s misconduct in relation to the history of
discipline taken against the Respondent. The Adjudicator only referred to the
two incidents where the Respondent had used his cell phone in the hangar,
although the Respondent had been disciplined for other incidents, including the
failure to complete his work in a timely manner, in June 2008.
[25]
Third, the Applicant submits that the
adjudicator erred by failing to consider the airline industry context and the
strict guidelines that govern it. It relies on the decision in Boeing Canada
Technology Ltd. v. National Automotive Aerospace, Transportation and General
Workers Union of Canada, Local 2169 (2005), 145 L.A.C. (4th) 225
at paras. 131 and 143, where an employee who damaged a floor panel and
attempted to hide the damage was found to have been dismissed with cause.
[26]
The Applicant argues that in the present case,
the Adjudicator did not discuss the aviation industry but stated that only two
holes were misaligned and that nearly all the incident reporting forms referred
to the damage as minor.
[27]
Finally, the Applicant submits that the
Adjudicator failed to consider the Respondent’s dishonesty. It argues that
according to McKinley, Courts require that the nature and degree of
dishonesty be considered to determine whether it is reconcilable with
maintaining the employment relationship. The Adjudicator accepted that the
Respondent drilled the holes in the spar and that he assisted Mr. Rowe in
drilling holes.
[28]
As for the award of damages, the Applicant
argues that the Adjudicator erred by failing to properly deduct the amount
earned by the Respondent in mitigation from the award. It submits that the
Adjudicator apparently based his award on the fact that the Respondent’s hourly
wage as a welder was less than his hourly wage while employed by the Applicant,
together with the fact that the Respondent mitigated his losses by working
overtime.
[29]
The Applicant claims that this is an error since
the case law provides that an employee should be compensated for actual losses
and the Respondent did not suffer such loss. It argues that the failure to
deduct income earned after his dismissal is inconsistent with the Canada Labour
Code which is not intended to grant a windfall to an employee who has obtained
employment of greater value, relying in this regard in the decision in Wolf
Lake First Nation v. Young (1997), 130 F.T.R. 115 at paragraph 52.
VI. DISCUSSION
AND DISPOSITION
[30]
The Applicant challenged both the Adjudicator’s
finding of unjust dismissal and the remedy that was granted, that is three
months salary and costs in the amount of $500.00. The finding of unjust dismissal
is a question of mixed fact and law reviewable on the standard of
reasonableness; see the decision in Payne v. Bank of Montreal (2013),
443 N.R. 253 at paragraph 32. The issue of remedy is also reviewable on the
standard of reasonableness; see the decision in Payne at paragraph 34.
[31]
In my opinion, the Adjudicator’s conclusion as
to the unjust dismissal of the Respondent is reasonable having regard to the
evidence submitted. Essentially, the Applicant is arguing that the Adjudicator
ignored the context of the Respondent’s dismissal, in particular his
disciplinary history, his experience relative to Mr. Rowe and the safety
standards for the airline industry.
[32]
In my opinion, the decision and the contents of
the Exhibit Book show that the Adjudicator did not ignore this evidence. He,
the Adjudicator, specifically referred to the Applicant’s argument about the
potentially serious consequences of the error and the argument that the
Respondent should have acted differently in light of his greater experience. He
also referred to the Respondent’s disciplinary history even if he did not
mention the incident of December 2009.
[33]
The Adjudicator also undertook a reasonable,
contextual analysis of the alleged misconduct. The evidence before the
Adjudicator was that the Respondent had been dismissed for having drilled the
holes. From my reading of the decision, the Adjudicator accepted that Mr. Rowe
had acknowledged drilling the holes and that the Respondent had only held the
drill straight. The Adjudicator rightly and reasonably noted that all but one
of the incident reports characterized the damage as “minor”. The reports also
said that the work was done under a tight deadline.
[34]
The Applicant also argues that the Adjudicator
failed to take into account the Respondent’s dishonesty. However, in my view,
the argument had no basis. There is nothing in the exhibit book to show that
the Respondent did not acknowledge the mistake. The Adjudicator seems to have
acknowledged the fact that the alleged misconduct occurred in the context of
the airline industry. That he did not elaborate on this fact does not make his
decision unreasonable. The decision meets the standard of “reasonableness” in
that it is transparent and justifiable on the basis of the evidence; see Dunsmuir
v. New Brunswick, [2008] 1 S.C.R. 190 at para. 47.
[35]
The Adjudicator reasonably found that the
Applicant had failed to discharge its burden of showing that the Respondent had
been dismissed for cause.
[36]
Turning now to the questions of remedy, this
issue is also reviewable on the standard of reasonableness, in the context of
the Code.
[37]
The Adjudicator’s remedial powers in this case
are governed by subsection 242(4) of the Canada Labour Code. Paragraph 242(4)(a)
allows an adjudicator to make an order requiring the employer to pay the person
compensation equivalent to the remuneration that would have been paid during
the notice period. Paragraph 242(4)(c) allows the adjudicator to require the
employer to do “any other like thing that it is equitable to require the
employer to do in order to remedy or counteract any consequence of the
dismissal”. The jurisprudence of the Federal Court and Federal Court of Appeal
emphasizes that adjudicators have broad remedial powers to “make whole” an
employee who was unjustly dismissed; see the decisions in Murphy v. Purolator
Courier Ltd. et al. (1993), 164 N.R. 150 and Chalifoux v. Driftpile
First Nation (2002), 237 F.T.R. 142.
[38]
The Federal Court has also held that there is a
distinction between damages for unjust dismissal and compensation for the time
that an employee would have been working. “Just cause protection” relates to
the principle that the Code mandates compensation for those who are unjustly
dismissed, even if they received severance pay.
[39]
In Redlon Agencies Ltd. v. Norgren, 2005
FC 804 at paragraph 38, Justice O’Keefe distinguished between severance pay and
damages, adopting the reasoning of Adjudicator J.M. Gordon in Goodwin v.
Conair Aviation Limited, [2002] C.L.A.D. No. 602 (QL):
38 It
is clear that the applicant is equating the award of damages with a severance
payment. I do not agree with the applicant. By way of explanation, I would
adapt the reasoning of Adjudicator J.M. Gordon in Goodwin v. Conair Aviation
Limited, [2002] C.L.A.D. No. 602, (QL), as to the interplay between the
termination and unjust dismissal provisions of the Code, and apply it to this
case:
…
31. […] As I have
already observed, I find the reasoning of the Federal Court and the Adjudicators
cited by the Complainant to be consistent with the purpose of this part of the
Code and the intention of Parliament as expressed in the language of the Code.
In MacDonald -and-Northern Thunderbird Air Ltd., [1995] C.L.A.D. No. 551, the
Adjudicator rejected the employer’s argument that it could terminate an
employee without alleging cause by simply paying severance pay such that the
employee's only recourse was to bring a civil action. The Adjudicator rejected
that argument in the following terms:
If
an employer terminates the employee and pays severance without alleging any
cause, that does not in itself disentitle the employee from claiming that
he/she has been unjustly dismissed. If that were so, then the intention of
Parliament expressed in Section 240 of the Code to provide a remedy for
employees who have been unjustly dismissed would be thwarted by employers
simply paying the severance pay required under Section 235... .
If
Parliament intended to limit unjust dismissal complaints to those persons who
were terminated and were provided with reasons for the dismissal, it would have
clearly stated that to be the case in Section 240 and made Section 240 subject
to Section 235. (at page 2).
[40]
Similar reasoning was recently followed by
Justice O’Reilly in his decision in Atomic Energy of Canada Ltd. v. Wilson,
2013 FC 733 at paragraph 37. The remedial scope of the Canada Labour Code was addressed
by Justice Nadon in Wolf Lake First Nation v. Young (1997), 130 F.T.R
115 at paragraph 53 where he stated:
An adjudicator
awarding damages for unjust dismissal is entitled to set the amount of the
award. The award is intended to compensate the employee for damages actually
suffered as a result of the dismissal. While there is discretion in the amount
of damages that may be awarded, an adjudicator commits an error when he or she
limits the amount of the award to the amount of severance to which the employee
would be entitled if the dismissal had been a justified one based on s. 235 or
the common law.
[41]
Justice Nadon relied on Alberta Wheat Pool
in support of the above statement. Howard Levitt, in his text The Law of
Dismissal in Canada, 3d ed. loose-leaf (consulted on July 26th,
2013), (Toronto: Canada Law Book, 2003) ch. 2 at 125-126, notes that in the
Canada Labour Code context, “in most cases of unjust dismissal, damages in lieu
of reasonable notice is a sufficient remedy where reinstatement is not
requested or is inappropriate”. He also observes that the objective of an award
of damages is to place the aggrieved party in a position as near as possible to
what he or she would have been in had the contract been performed.
[42]
The Adjudicator addressed the issue of damages
and the decision in Alberta Wheat Pool at paragraph 20 of his decision:
With
respect to the matter of damages in lieu of proper notice Chief Justice
[Iacobucci] as he was then of the Federal Appeal Court found in [Alberta
Wheat Pool v. Konevsky,] [1990] F.C.J. No 877 where the court stated “We
are also of the view that interpretation of paragraphs 61.5(9)(a) of the
Canadian Labour Code…cannot be read [down] so as to limit the compensation that
[a] adjudicator is empowered to award to an employee to the amount that could
be claimed under the common law”.
[43]
He went on to refer to the details of the
Respondent’s job search after his dismissal, including his lower wages and
overtime pay. He further stated that the Respondent had been out of work for
approximately 21 days and concluded by awarding him three months salary in the
sum of $17,556.00 in lieu of proper notice. Reading the Adjudicator’s reasons
as a whole, it is clear that he relied on the decision in Alberta Wheat Pool
to support the award.
[44]
The Respondent had worked with the Applicant for
over four years. Although his earnings in the new position at face value matched
those that he would have earned if not unjustly dismissed by the Applicant, the
Respondent was required to work longer hours, including overtime, in order to
generate the same income. Having regard to all the circumstances and the
relevant legal principles, the Adjudicator’s award was reasonable.
[45]
In the result, there is no basis for judicial
intervention and this application will be dismissed.
[46]
There remains the question of costs. The
Respondent did not participate in this proceeding, apart from filing a Notice
of Appearance. Rule 400(1) confers full discretion on the Court relative to the
award of costs and provides as follows:
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400. (1) The Court shall have full
discretionary power over the amount and allocation of costs and the determination
of by whom they are to be paid.
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400. (1) La Cour a le pouvoir
discrétionnaire de déterminer le montant des dépens, de les répartir et de
désigner les personnes qui doivent les payer.
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[47]
Having regard to the circumstances and the fact that the Respondent did
not actively respond to this application, having only filed a Notice of
Appearance, in the exercise of my discretion, I make no order as to costs.
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