Date: 20080527
Docket: A-392-07
Citation: 2008 FCA 192
CORAM: DESJARDINS
J.A.
LÉTOURNEAU
J.A.
BLAIS J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
and
RÉJEAN CANTIN
Respondent
REASONS FOR JUDGMENT
DESJARDINS J.A.
[1]
This is an
application for judicial review of a decision by an Umpire with regard to a
representative appeal brought before the Board of Referees by a group of
77 employees of the company Tembec of Saint-Raymond (Tembec or the
employer). The Court’s decision will apply not only to the respondent, Réjean
Cantin, but also to the 77 claimants who are in the same position as he.
[3]
The date
scheduled for the “collective dismissal” was August 9, 2005. One hundred
and thirty-five hourly-paid employees and 30 managers were potentially affected
(applicant’s record, page 65).
[4]
This
notice to the Quebec Minister of Employment and Social Solidarity was given in
accordance with section 84.0.4 of the Act respecting labour standards
(R.S.Q., c. N-1.1), which prescribes that such notice be given in situations
where there is a “collective dismissal for technical or economic reasons” (“licenciement collectif pour
des raisons d’ordre technologique ou économique”). Section 84.0.1 of the Act
defines collective dismissal as follows:
|
84.0.1. [Interpretation]
The termination of employment by the employer, including a
layoff for a period of six months or more, involving not fewer
than 10 employees of the same establishment in the course of two consecutive
months constitutes a collective dismissal governed by this division.
[Emphasis
added.]
|
84.0.1 [Définition]
Constitue un licenciement collectif régi par
la présente section une cessation de travail du fait de l’employeur, y
compris une mise à pied pour une durée de six mois ou plus, qui touche au
moins 10 salariés d’un même établissement au cours d’une période de deux mois
consécutifs.
[Je souligne.]
|
[5]
On
August 24, 2005, Réjean Cantin, one of the affected employees, filed a
claim for employment insurance benefits.
[6]
As a
result of information obtained from the employer, the Canada Employment
Insurance Commission (the Commission) determined that the compensation payments
received in lieu of notice, vacation pay, statutory holiday credits, floating
holidays and extra pay constituted earnings. The amount was allocated in
accordance with sections 35 and 36 of the Employment Insurance
Regulations, S.O.R./96-332 (the Regulations).
[7]
On
August 17, 2005, the employer sent the following letter to its employees
(applicant’s record, p. 57):
[TRANSLATION]
I regret to
inform you that we are terminating your employment with Tembec in accordance
with the collective dismissal notice dated May 17.
To facilitate
your transition, the company will, without prejudice, pay you the sum of XXXXX
($XX,XX) in severance pay minus any statutory deductions. You will be
paid this sum conditional upon your signing the attached document, entitled
“Receipt, Release and Settlement” form.
Your record
of employment and any other final documents will be mailed to you as soon as
possible at the abovementioned address.
…
[Emphasis
added.]
[8]
On
September 13, 2005, an agreement was reached between the employer and the
union of which Mr. Cantin was a member. The agreement provided as follows:
[TRANSLATION]
WHEREAS the
undersigned Parties hereby wish to confirm the terms and conditions of the
termination of employment of the employees of Tembec’s Saint-Raymond plant.
NOW, THEREFORE, IN CONSIDERATION OF THE
FOREGOING AND OF WHAT IS STIPULATED BELOW, the parties agree as follows:
1. Severance pay
will be offered under the following proposed terms:
…
Employees
from St-Raymond who choose to accept severance pay for termination of employment,
as described above, must notify the employer in writing by February 15, 2006,
and in so doing, waive their right to be recalled and terminate their
employment relationship with Tembec. Employees who do not notify the
employer by February 15, 2006 will retain their right to be recalled in
accordance with the collective agreement and will lose their right to severance
pay.
[Emphasis
added.]
…
[9]
Moreover,
the “Receipt, Release and Settlement” form signed on September 24, 2005 by
Mr. Cantin, who accepted the agreement, stated:
[TRANSLATION]
I, Réjean
Cantin, hereby acknowledge receiving from Tembec the sum of $42,224 (minus the
applicable statutory and tax deductions) in lieu of severance pay.
I recognize
that by accepting this sum and signing this document, I, in so doing, waive
my right to be recalled and the rights that relate to it, and terminate my
employment relationship with Tembec as of September 24, 2005.
[Emphasis
added.]
…
[10]
Severance
pay was therefore offered to employees who accepted it subject to their waving
their right to be recalled and terminating their employment relationship with
the employer. Mr. Cantin received the sum of $42,224 on September 24,
2005.
[11]
The
Commission considered the $42,224 to be earnings within the meaning of the Employment
Insurance Act, S.C. 1996, c. 23 (the Act) and allocated the amount in
accordance with subsections 36(9) and (10) of the Regulations.
[12]
The Board
of Referees that heard the Respondent’s appeal refused to uphold the
Commission’s decision with regard to the severance pay, which the Board
characterized as compensation. The Board of Referees explained its decision in
the following terms:
3. With
respect to the severance pay, the Board finds that this amount was paid
as compensation for termination of the employment relationship and for
relinquishing the right to reinstatement stipulated in the collective
agreement (subsection 10-06c). The nature of this amount is clearly indicated
in the agreement (Exhibit 11.4).
Accordingly,
it does not constitute earnings within the meaning of section 35 of the
Regulations and should not be allocated, as determined in decisions A-693-99,
paragraph 18 and A-140-03, paragraph 19.
[Emphasis
added.]
[13]
The Board
of Referees based its decision on two decisions of our Court, namely Her
Majesty the Queen v. Robert Plasse, A-693-99, and Nicole
Meechan and The Attorney General of Canada, A-140-03, both of which concerned
reinstatements following terminations resulting from wrongful dismissals.
[14]
The
Umpire, before whom the severance pay issue was appealed, upheld the Board of
Referees’ decision as follows:
Consequently, the Commission's
appeal is dismissed regarding the issue of the allocation of the severance pay.
To clarify, I would like to point out that this amount constituted earnings
within the meaning of section 35 of the Regulations and that it should be
allocated in accordance with section 36(19)(b) of the Regulations.
[15]
The
respondent is not contesting that the severance pay represents earnings within
the meaning of section 35 of the Regulations. The issue to be determined
is under which paragraph of section 36 the severance pay should be
allocated. The applicant argues that it should be allocated according to
subsections 36(9) and (10) of the Regulations, while the respondent
submits that paragraph 36(19)(b) of the Regulations applies in this
case.
STATUTORY PROVISIONS
[16]
Paragraph 54(s) of
the Act reads as follows:
|
Regulations
54.
The Commission may, with the approval of the Governor in Council, make
regulations
(s) defining
and determining earnings for benefit purposes, determining the amount of
those earnings and providing for the allocation of those earnings to weeks or
other periods;
|
Règlements
54.
La Commission peut, avec l’agrément du gouverneur en conseil, prendre des
règlements :
s) définissant et déterminant la rémunération
aux fins du bénéfice des prestations, déterminant le montant de cette
rémunération et prévoyant sa répartition par semaine ou autre période;
|
[17]
Subsection 35(2)
of the Regulations, which deals with the determination of earnings, reads as
follows:
|
Determination of Earnings for Benefit Purposes
35.
(2) Subject to the other provisions of this section, the earnings to be taken
into account for the purpose of determining whether an interruption of
earnings has occurred and the amount to be deducted from benefits payable
under section 19 or subsection 21(3) or 22(5) of the Act, and to be taken
into account for the purposes of sections 45 and 46 of the Act, are the
entire income of a claimant arising out of any employment, including
…
[Emphasis added.]
|
Détermination de la rémunération aux fins du bénéfice des
prestations
35.
(2) Sous réserve des autres dispositions du présent article, la rémunération
qu’il faut prendre en compte pour déterminer s’il y a eu un arrêt de
rémunération et fixer le montant à déduire des prestations à payer en vertu
de l’article 19 ou des paragraphes 21(3) ou 22(5) de la Loi, ainsi que pour
l’application des articles 45 et 46 de la Loi, est le revenu intégral du
prestataire provenant de tout emploi, notamment:
[…]
[Je souligne.]
|
[18]
Subsections 36(9),
36(10) and 36 (19) of the Regulations, which deal with the allocation of
earnings, read as follows:
|
Allocation of Earnings for Benefit Purposes
36.
(1) Subject to subsection (2), the earnings of a claimant as determined under
section 35 shall be allocated to weeks in the manner described in this
section and, for the purposes referred to in subsection 35(2), shall be the
earnings of the claimant for those weeks.
(9)
Subject to subsections (10) and (11), all earnings paid or payable to
a claimant by reason of a lay-off or separation from an employment
shall, regardless of the nature of the earnings or the period in respect of
which the earnings are purported to be paid or payable, be allocated to a
number of weeks that begins with the week of the lay-off or separation in
such a manner that the total earnings of the claimant from that employment
are, in each consecutive week except the last, equal to the claimant's normal
weekly earnings from that employment.
(10)
Subject to subsection (11), where earnings are paid or payable to a
claimant by reason of a lay-off or separation from an employment
subsequent to an allocation under subsection (9) in respect of that lay-off or
separation, the subsequent earnings shall be added to the earnings that were
allocated and, regardless of the nature of the subsequent earnings or the
period in respect of which they are purported to be paid or payable, a
revised allocation shall be made in accordance with subsection (9) on the
basis of that total.
(19)
Where a claimant has earnings to which none of subsections (1) to (18)
apply, those earnings shall be allocated
(a)
if they arise from the performance of services, to the period in which the
services are performed; and
(b)
if they arise from a transaction, to the week in which the transaction
occurs.
[Emphasis added.]
|
Répartition de la rémunération aux fins du bénéfice des
prestations
36.
(1) Sous réserve du paragraphe (2), la rémunération du prestataire,
déterminée conformément à l’article 35, est répartie sur un nombre donné de
semaines de la manière prévue au présent article et elle constitue, aux fins
mentionnées au paragraphe 35(2), la rémunération du prestataire pour ces semaines.
(9)
Sous réserve des paragraphes (10) et (11), toute rémunération payée ou
payable au prestataire en raison de son licenciement ou de la cessation de
son emploi est, abstraction faite de la nature de la rémunération et de
la période pour laquelle elle est présentée comme étant payée ou payable,
répartie sur un nombre de semaines qui commence par la semaine du
licenciement ou de la cessation d’emploi, de sorte que la rémunération totale
tirée par lui de cet emploi dans chaque semaine consécutive, sauf la
dernière, soit égale à sa rémunération hebdomadaire normale provenant de cet
emploi.
(10)
Sous réserve du paragraphe (11), toute rémunération qui est payée
ou payable au prestataire, par suite de son licenciement ou de la
cessation de son emploi, après qu’une répartition a été faite
conformément au paragraphe (9) relativement à ce licenciement ou à cette
cessation d’emploi est additionnée à la rémunération ayant fait l’objet de la
répartition, et une nouvelle répartition est faite conformément au paragraphe
(9) en fonction de ce total, abstraction faite de la nature de la
rémunération subséquente et de la période pour laquelle elle est présentée
comme étant payée ou payable.
(19)
La rémunération non visée aux paragraphes (1) à (18) est répartie :
a) si elle est reçue en échange de services,
sur la période où ces services ont été fournis;
b) si elle résulte d’une opération, sur la
semaine où l’opération a eu lieu.
[Je
souligne.]
|
RESPONDENT’S
ARGUMENTS
[19]
The
respondent argues that there was a separation from employment within the
meaning of subsection 36(9) of the Regulations on August 9, 2005, as
a result of the collective dismissal notice given by the employer on
May 17, 2005. At that time, Tembec’s employees received their vacation
pay, statutory holiday credits, floating holidays and extra pay.
[20]
Later,
negotiations were held between the employer and the union, resulting in
severance pay being offered to those employees who wanted it, with the result
of their waiving, according to the respondent, their right to reinstatement and
terminating their relationship with their employer. As there cannot be two
separations from employment, the respondent argues that the $42,224, while
qualifying as earnings, should be allocated as earnings to which none of
subsections (1) to (18) apply. The earnings should therefore be allocated
according to subsection 36(19) of the Regulations.
LEGAL TERMINOLOGY
[21]
Subsection 36(9)
of the Regulations stipulates that “[s]ubject to subsections (10) and (11), all
earnings paid … to a claimant by reason of a lay-off (licenciement) or
separation from an employment (cessation de son emploi) shall, regardless of
the nature of the earnings or the period in respect of which the earnings are
purported to be paid …, be allocated to a number of weeks that begins with the
week of the lay-off (licenciement) or separation (cessation d’emploi) …”.
[22]
In Canada
(Attorney General) v. Tremblay, [1996] F.C.J. No. 1335, at footnote 5,
I wrote the following on behalf of the Court about subsection 58(9) of the
Regulations, now subsection 36(9):
5. The word "licenciement" in the
French version of subsection 58(9) of the Regulations is perhaps not the most
fortunate choice of words to express the concept of "lay-off" used in
the English version. We would note that the Quebec Act respecting labour
standards, R.S.Q., c. N-1.1, subs. 83.1(2), and the Ontario Employment
Standards Act, R.S.O. 1990, c. E-14, s. 58, use "mise à pied"
for "lay-off". For the Canada Labour Code, R.S.Q. 1985, c.
L-2, see subs. 230(3).
[23]
There is
no doubt that the word “licenciement” in the French version of
subsections 36(9) and (10) of the Regulations refers to a lay-off. The
English version of these subsections (lay-off) could not be any clearer on this
matter. The expression “separation from an employment” (cessation de son
emploi) in the same subsections refers to the termination of the employment
relationship.
[24]
Our Court
is not responsible for interpreting the Quebec Act respecting labour standards. It is nonetheless useful to
note that under that Act, the termination of employment by the employer
(cessation de travail du fait de l’employeur),
including a lay-off for a period of six months or more (y compris une mise à pied pour
une durée de six mois ou plus),
constitutes a collective dismissal governed by this division (constitue un licenciement
collectif régi par cette section). Thus, the expression “cessation de travail du fait de
l’employer” is
rendered in English by “termination of an employment by the employer”. Both
expressions therefore refer to the termination of the employment relationship.
Moreover, the expression “mis
à pied” is
rendered by “lay-off”. It seems to me therefore, that
within the meaning of section 84.0.1 of the Quebec Act respecting
labour standards, the employer’s measure on August 9, 2005, when
Tembec’s employees were laid off as a result of a collective dismissal, does
not constitute a “termination of an employment by the employer” (une cessation
de travail) within the meaning of Quebec legislation, as the employer itself
offered “severance pay” one month later, that is, on September 17, 2005.
Under Quebec legislation, the measure
taken seems to be a lay-off for a period of six months or more.
[25]
That being
said, how should the employer’s letter of September 13, 2005, and the
“Receipt, Release and Settlement” form signed on September 24, 2005, be
interpreted within the meaning of the Act and the Regulations?
[26]
The
measure taken by the employer on August 9, 2005, did not constitute a
separation from an employment (cessation d’emploi) within the meaning of
subsection 36(9) of the Regulation. According to the
interpretation adopted in paragraph [23] of my reasons, it was a
lay-off (licenciement or mise à pied).
[27]
The form
entitled “Receipt, Release and Settlement” signed on September 24, 2005,
reminded the respondent that “by accepting this sum and signing this document,
I, in so doing, waive my right to be recalled and the rights that relate to it,
and terminate my employment relationship with Tembec as of September 24,
2005”. The final termination of the employment relationship
therefore took place on September 24, 2005, following Mr. Cantin’s
acceptance of severance pay, which he recognized having received. As a result,
Mr. Cantin relinquished his employment relationship and right to be
recalled and any rights that relate to this.
[28]
The
$42,224 compensation received by Mr. Cantin on September 24, 2005,
falls under the expression “all earnings paid … to a claimant by reason of a …
separation from an employment” found in subsections 36(9) and
36(10) of the Regulations.
[29]
Paragraph 36(19)(b),
which applies only to earnings
not described in subsections (1) to (18), cannot be applied.
[30]
The
Umpire and the Board of Referees erred in applying the applicable statutory
provisions, namely paragraph 36(19)(b) instead of
subsections 36(9) and (10) of the Act. This is an error in law, combined
with an error of mixed fact and law that justifies the intervention of this
Court (Dunsmuir v. New Brunswick, 2008 SCC 9).
[31]
Moreover,
the Umpire and the Board of Referees confused the right to be recalled with the
right to reinstatement, although this case involved only the right to be
recalled.
[32]
It is true
that Mr. Tremblay, the respondent’s counsel, used the expression [TRANSLATION]
“right to be recalled to work” before the Umpire as being equivalent to the
expression “right to reinstatement” (see letter to the Umpire dated
May 20, 2007, applicant’s record, p. 16).
[33]
In federal
law, however, the right to reinstatement is an employee’s right to resume his
or her position following a wrongful dismissal, if the employee is granted
reinstatement. In this case, the Board of Referees erred by applying Plasse and Meechan,
in which the claimants received compensation to relinquish their right to
reinstatement following a wrongful dismissal. The Umpire erred in not
recognizing the Board’s error.
CONCLUSION
[34]
I
would allow the application for judicial review, set aside the Umpire’s
decision, and refer the matter back to the Chief Umpire or his designate for
redetermination on the basis that the severance pay that Rejéan Cantin
acknowledged receiving should be allocated in accordance with subsections 36(9)
and (10) of the Regulations.
[35]
The
appellant waived its costs.
“Alice
Desjardins”
“I concur.
Gilles Létourneau J.A.”
“I
concur.
Pierre Blais J.A”
Certified
true translation
Johanna
Kratz.
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