Lincoln v. Bay Ferries Ltd., 2004 FCA 204

Date: 20030527

Docket: A-523-03

Citation: 2004 FCA 204

CORAM:        STONE J.A.

LÉTOURNEAU J.A.

EVANS J.A.

BETWEEN:

                                                          TIMOTHY LINCOLN

                                                                                                                                            Appellant

                                                                          and

                                                           BAY FERRIES LTD.

                                                                                                                                        Respondent

                                        Heard at Halifax, Nova Scotia on April 26, 2004.

                                  Judgment delivered at Ottawa, Ontario on May 27, 2004.

REASONS FOR JUDGMENT BY:                                                                                  STONE J.A.

CONCURRED IN BY:                                                                                        LÉTOURNEAU J.A.

                                                                                                                                        EVANS J.A.

Date: 20030527

Docket: A-523-03

Citation: 2004 FCA 204

CORAM:        STONE J.A.

LÉTOURNEAU J.A.

EVANS J.A.

BETWEEN:

                                                            TIMOTHY LINCOLN

                                                                                                                                              Appellant

                                                                            and

                                                             BAY FERRIES LTD.

                                                                                                                                          Respondent

                                                     REASONS FOR JUDGMENT

STONE J.A.

[1]                This is an appeal from an order of the Federal Court dated October 6, 2003 dismissing an application for judicial review of a decision of the Canadian Human Rights Tribunal. By that decision, the appellant's complaint that the respondent discriminated against him on the basis of race (West Indian) and colour (brown) contrary to section 7 of the Canadian Human Rights Act, R.S.C. 1995, c. H-6 was dismissed.

Factual background

[2]                Mr. Lincoln, the appellant, was born in Trinidad and came to Canada in 1963. He took up residence in Digby, Nova Scotia where he graduated from high school in 1979.

[3]                For a period of 17 years, prior to April 1, 1997, the appellant was employed in various capacities on board the M.V. "Princess of Acadia", a ferry boat belonging to Marine Atlantic Inc. or its predecessor, plying between the ports of Digby, Nova Scotia and Saint John, New Brunswick. On April 1, 1997, the respondent, Bay Ferries Ltd., a subsidiary of Northumberland Ferries Ltd., became the owner and operator of the M.V. "Princess of Acadia" having acquired the vessel from Marine Atlantic Inc. A second ferry, the M.V. "Bluenose" also owned by Marine Atlantic Inc., operating between Yarmouth, Nova Scotia and Bar Harbour, Maine was acquired by the respondent at the same time. The respondent commenced to fully operate these two vessels on April 4, 1997. The appellant had served as one of four chief engineers on board the M.V. "Princess of Acadia" for almost seven years immediately preceding the change of ownership.

[4]                There was evidence before the Tribunal, and the Tribunal found, that the previous operations of both ferry services had not been profitable and had incurred annual losses in the order of $6 million in recent years. As the Tribunal noted at paragraph 23 of its decision: "Bay Ferries recognized that there was a need to make significant changes to the way Marine Atlantic had operated. Staff had to be cut, operating procedures had to be changed and Bay Ferries needed to hire staff who had the experience and flexibility to adapt to change". Accordingly, with a view to rendering the operations more profitable, the respondent decided to scale back the number of chief engineers employed on board each of the vessels from four to two. The Tribunal described the respondent's operational plan for the transfer of ownership at paragraph 5 of its decision. All Marine Atlantic Inc. employees on both ferry services would be terminated. The respondent would start afresh and hire the personnel it needed, but a significant number would come from the ex-Marine Atlantic Inc. pool of employees.

[5]                In February 1997, the appellant submitted an application for a position as a chief engineer on board the M.V. "Princess of Acadia" in response to the respondent's advertisement in various local newspapers for "experienced Marine Engineers for Bay of Fundy ferry services". In other words, the jobs as chief engineers were not for any particular vessel but for both vessels in the respondent's fleet. A number of other candidates also responded. The respondent had decided that for each vessel, one of the chief engineers would be drawn from among those formerly employed by Marine Atlantic Inc. and the other would be "an outside" engineer who would be more able to implement the substantial management and operational changes that the respondent intended to implement. The respondent retained an independent firm of consultants to conduct initial screening interviews of those seeking positions as chief engineer. Those candidates who were recommended by the consultants went for technical interviews conducted by Mr. Donald Cormier, General Manager of Bay Ferries Ltd. and Mr. Gerry Stevenson, technical superintendent for Northumberland Ferries Ltd.

[6]                At his technical interview on March 14, 1997, the appellant was asked questions with respect to the practice and regulations governing watertight doors in the engine room bulkhead. Mr. Cormier and Mr. Stevenson had noticed during a pre-takeover tour of the M.V. "Princess of Acadia" that these doors were left open during sailing. The practice on board that vessel was to leave the watertight doors open while the vessel was underway and to close them only when arriving or departing port. This gave rise to a serious safety issue for Mr. Stevenson because the purpose of the watertight doors was to seal off the bulkhead so as to prevent compartment flooding.    Mr. Stevenson drew from the answers provided by the appellant on this issue that the appellant wanted to defend the practice and that this indicated that he would not initially be receptive to change. Nevertheless, Mr. Cormier found the appellant to be very articulate and a good communicator who had expressed interest in the respondent's prospects for a high speed ferry on the Yarmouth/Bar Harbour service. Mr. Cormier testified that the appellant "had very good or relative experience" on the M.V. "Princess of Acadia"; but that he lacked "relevant experience on other ships"; and that he "had not experienced any different corporate culture other than Marine Atlantic, which is something we wanted to move away from" (transcript, vol. vi, p. 484).

[7]                Prior to March 31, 1997, the respondent had determined who would fill three of the four openings for chief engineers on board the two ferries on a permanent basis. On March 20, 1997, Mark Lewis was selected to be a chief engineer on board the M.V. "Princess of Acadia". At that time, Mr. Lewis was serving in the same capacity on that vessel. Three days later, on March 23, 1997, the respondent selected Gary Smith to be the other chief engineer on board the M.V. "Princess of Acadia". Mr. Smith was not then employed by Marine Atlantic Inc. The respondent then turned to filling the two chief engineers' positions on board the M.V. "Bluenose". On March 25, 1997, Chris Kenney was selected to fill one of the two positions. The respondent also decided that it would offer the other chief engineer's position on board that vessel to one of the then serving chief engineers, Hans Hausgaard, although he would only serve in that capacity on a temporary basis.

[8]                Late on March 31, 1997, Mr. Cormier met with the appellant on board the M.V. "Princess of Acadia" at which time the appellant was offered a position as relief chief engineer on board that vessel until June 1, 1997. The plan was that on or a little before that date, the appellant would be moved to the M.V. "Bluenose" which operated seasonally until mid-October. The appellant would become a second engineer on board that vessel and would work under Mr. Hausgaard in order to gain experience on a different vessel which operated under international regulations. In mid-October, the appellant would be returned to the M.V. "Princess of Acadia" where he would continue as a relief chief engineer. His salary as such would be somewhat less than the salary of a chief engineer. Mr. Cormier held out the possibility that in due course, if and when the respondent replaced the M.V. "Bluenose" with a high speed ferry, the appellant would be given a position as chief engineer aboard the new vessel. The appellant immediately rejected the offer. According to Mr. Cormier he said, "You are taking my job away", and asked, "Are you hiring only white Anglo-Saxon chiefs and pushing the minorities down where they belong?" The appellant did agree to think about the offer overnight. The next morning, however, he confirmed his rejection of the offer. The respondent immediately set about to deal with the consequences of the appellant's refusal. Time was of the essence because the respondent's take-over of the two vessels had to be accomplished by April 4, 1997.

[9]                An employee of the respondent had contacted Mr. Robert Hamilton in connection with a reference respecting an unrelated position with the company. Mr. Hamilton had served as a chief engineer aboard the M.V. "Princess of Acadia" from 1990 to 1995. After the employee had explained the company's transition plans, Mr. Hamilton became interested in seeking a chief engineer's position on board that vessel. He had been well known to Mr. Cormier for many years because they had sailed together. In fact, Mr. Cormier had been anxious to interview Mr. Hamilton in March 1997 but Mr. Hamilton had declined. By April 3, 1997, Mr. Hamilton had been interviewed and had accepted a position of chief engineer on board the M.V. "Princess of Acadia". The respondent then decided to reassign Mr. Smith to the M.V. "Bluenose" rather than offer a position to Mr. Hausgaard.

Judgment at trial

[10]            Dawson J. in the Federal Court concluded that the selection of the appropriate test to determine whether a prima facie case of discrimination had been established was to be reviewed on the standard of correctness. In reaching that conclusion, the learned Judge had regard to the decisions of the tribunal in Shakes v. Rex Pak Limited (1981), 3 C.H.R.R. D/1001 and Israeli v. Canadian Human Rights Commission and Public Service Commission (1983), 4 C.H.R.R. D/1616. Dawson J. also took into account the decisions of the Trial Division of the Federal Court of Canada in Canada (Department of National Health and Welfare) v. Chander (1997), 131 F.T.R. 301 (T.D.) and International Longshore & Warehouse Union (Marine Section), Local 400 v. Oster, [2002] 2 F.C. 430 (T.D.). Dawson J. concluded that the Tribunal had not erred by applying the Shakes test to the determine whether a prima facie case of discrimination had been established. Dawson J. was of the further view that the Tribunal's conclusions on two issues of fact were not patently unreasonable. In the end, she dismissed the application for judicial review, having concluded that "the Tribunal did not err in fact or in law".

[11]            The appellant argues that the Trial Judge erred both in concluding that he had failed to establish a prima facie case of discrimination and also in her review of the Tribunal's findings on the factual issues that were before her. He also argues that both the Tribunal and Dawson J. erred by not addressing his contention that the failure of the respondent to comply with section 5 of the Employment Equity Act, S.C. 1995, c. 44 itself supported the existence of a prima facie case of discrimination.

Relevant statutory provisions

[12]            Subsection 3(1), section 3.1, section 4 and paragraph 7(a) of the Canadian Human Rights Act are relevant to this appeal. They read:

Section 5 of the Employment Equity Act is also relevant. It reads:

The Employment Equity Act came into force on October 24, 1996. It clearly applies to the respondent which, as defined in section 3, is a "private sector employer" that "employs one hundred or more employees on or in connection with a federal work, undertaking or business as defined in section 2 of the Canada Labour Code...".

Issues

[13]            The standards of review which apply to the Tribunal's decision are not in question on this appeal. The appellant, however, maintains that the Tribunal erred in concluding that he had not established a prima facie case of discrimination. Secondly, he asserts that the Tribunal committed two errors of fact by finding that Mr. Hamilton had left Marine Atlantic Inc. in 1995 because of disagreement over management policies, and in finding that Mr. Stevenson's evidence supported the Tribunal's conclusion that the appellant's interview for chief engineer on March 14, 1997 revealed inflexibility and resistance to change on his part. Third, he argues that the Tribunal erred in concluding that the respondent's selection criteria were not a pretext to mask discrimination. Finally, he contends that the Tribunal erred in failing to have regard to the respondent's failure to fulfil its obligations under the Employment Equity Act and to positively factor in the appellant's race when verifying the appellant's qualifications relative to those of the other candidates for a chief engineer's position.

Analysis

[14]            The standard of review to be applied to the decision of the Tribunal is governed by the pragmatic and functional approach which takes several factors into account: the presence or absence of a privative clause or statutory right of appeal; the relative expertise of the administrative tribunal as compared with that of the reviewing court with respect to the issue raised; the purposes of the legislation and of the particular provisions; and the nature of the question as one of law, fact, or mixed law and fact. See Union des employés de service, local 298 v. Bibeault, [1988] 2 S.C.R. 1048; Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982; Dr. Q. v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226, 2003 SCC 19">2003 SCC 19; Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247, 2003 SCC 20">2003 SCC 20; Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, [2003] 3 S.C.R. 77, 2003 SCC 63">2003 SCC 63; 2004 SCC 28">Alberta Union of Provincial Employees v. Lethbridge Community College, 2004 SCC 28.

[15]            The task before this Court is limited to reviewing the decision of Dawson J. in accordance with the guidance provided by McLachlin C.J. in Dr. Q., supra, where she stated at paragraph 43:

... The role of the Court of Appeal was to determine whether the reviewing judge had chosen and applied the correct standard of review, and in the event she had not, to assess the administrative body's decision in light of the correct standard of review, reasonableness. At this stage in the analysis, the Court of Appeal is dealing with appellate review of a subordinate court, not judicial review of an administrative decision. As such, the normal rules of appellate review of lower courts as articulated in Housen, supra, apply. The question of the right standard to select and apply is one of law and, therefore, must be answered correctly by a reviewing judge. The Court of Appeal erred by affording deference where none was due.

[16]            The parties agree on the standards of review which the Trial Judge applied to the Tribunal's decision, as adopted by Gibson J. in Oster, supra, at paragraph 22:

[22]Applying the guidance provided by the Supreme Court in Pushpanathan, and more recently in Baker v. Canada (Minister of Citizenship and Immigration), I am satisfied that the standard of review of decisions of the Tribunal in this matter is correctness in respect of questions of law, reasonableness simpliciter in respect of questions of mixed law and fact, and patent unreasonableness in respect of "fact-finding and adjudication in a human rights context".

[17]            At the outset of its decision, the Tribunal addressed onus and the test for determining whether a prima facie case of discrimination was established. It stated at paragraph 118:

[118] In a human right case before a Tribunal, the onus is on the complainant to establish a prima facie case of discrimination. Once this is done, the onus shifts to the respondent to provide an explanation of its actions. A prima facie case is one which covers the allegations made, and which if believed, is complete and sufficient for a decision in favour of the complainant in the absence of an answer from the respondent. If the respondent does provide an explanation, the onus is then on the complainant to show that the explanation was not a reasonable one. Rather, it was a pretext or a disguise for the respondent's otherwise discriminatory conduct.

The Tribunal here relied on [1982] 1 S.C.R. 202">Ontario (Human Rights Commission) v. Etobicoke (Borough), [1982] 1 S.C.R. 202 and Ontario (Human Rights Commission) and O'Malley v. Simpson Sears Ltd., [1985] 2 S.C.R. 536 in support of these conclusions.

[18]            The decisions in [1982] 1 S.C.R. 202">Etobicoke, supra, and O'Malley, supra, provide the basic guidance for what is required of a complainant to establish a prima facie case of discrimination under the Canadian Human Rights Act. As McIntyre J. put it in [1982] 1 S.C.R. 202">Etobicoke, at page 208, "Once a complainant has established before a board of inquiry a prima facie case of discrimination,..., he is entitled to relief in the absence of justification by the employer". McIntyre J. reiterated the test for establishing a prima facie case of discrimination in O'Malley, supra, at page 558:

The complainant in proceedings before human rights tribunals must show a prima facie case of discrimination. A prima facie case in this context is one which covers the allegations made and which, if they are believed, is complete and sufficient to justify a verdict in the complainant's favour in the absence of an answer from the respondent-employer.

The tribunals' decisions in Shakes, supra, and Israeli, supra, are but illustrations of the application of that guidance. Each postulates that the complainant was qualified for the position, that he or she was not hired, and that the complainant belonged to one of the groups against whom discrimination is prohibited under the Act. The difference between the two decisions was pinpointed by Muldoon J. in Chander, supra, at paragraph 35: "Shakes applies to situations where someone other than the complainant is hired. Israeli applies when the employer does not hire the complainant and then continues to look for employees". As was recently pointed out by the tribunal in Premakumar v. Air Canada, [2002] C.H.R.D. No. 3, at paragraph 77:

[77] While both the Shakes and the Israeli tests serve as useful guides, neither test should be automatically applied in a rigid or arbitrary fashion in every hiring case: rather the circumstances of each case should be considered to determine if the application of either of the tests, in whole or in part, is appropriate. Ultimately, the question will be whether Mr. Premakumar has satisfied the O'Malley test, that is: if believed, is the evidence before me complete and sufficient to justify a verdict in Mr. Premakumar's favour, in the absence of an answer from the respondent?

[19]            In the case at bar, the Tribunal considered the respondent's selection criteria which were largely based on the need for flexibility and change in running the ferry operations. As the Tribunal found at paragraph 124, "Bay Ferries wanted an abrupt shift in the management style and work culture that had prevailed under Marine Atlantic". It went on to find at paragraph 130 that the appellant's argument "that he was as qualified or more qualified than those hired is too narrowly focused" and, in particular, that it ignored the respondent's broader focus of operating profitably which meant "it had to do things differently and required of senior management those who had a broad experience and skills to bring change or adapt to change".

[20]            The Tribunal then considered whether the explanation was reasonable or just a pretext to camouflage discrimination against the appellant. By hiring Mr. Hamilton, the respondent had opted for two ex-Marine Atlantic Inc. chief engineers rather than just one for the M.V. "Princess of Acadia". The Tribunal found that Mr. Hamilton had left Marine Atlantic Inc. in 1995 because he did not like its management policies and for this reason he was to be regarded as an "outsider". The Tribunal also rejected the appellant's suggestion that at his March 1997 interview, Messrs. Cormier and Stevenson were not willing to accept disagreement from a person of colour.

[21]            The Tribunal then concluded at paragraphs 138 and 139:

[138] I accept that Bay Ferries' management and operational objectives were legitimate and necessary to operate the two ferry services successfully. It is also my opinion that Bay Ferries' selection criteria for chief engineer were necessary and reasonable to its objectives and were not a subterfuge for discriminatory conduct. I accept Bay Ferries' explanation that it hired Mr. Lewis, Mr. Smith, Mr. Hamilton because, according to these selection criteria, they were more qualified than Mr. Lincoln for chief engineer on the Acadia.

[139] Thus, I have concluded that Mr. Lincoln has not established a prima facie case of discrimination. Accordingly, Mr. Lincoln's complaint that he was discriminated against by Bay Ferries, contrary to section 7 of the Act, is dismissed.

[22]            The approach taken by the Tribunal and upheld by the Trial Judge in determining whether a prima facie case of discrimination had been made out is not supported by the authorities. The appellant's prima facie case was that he sought a position of chief engineer on board the M.V. "Princess of Acadia", that he was qualified for the position, that someone else was hired for the position and that his race played a part in the respondent's decision to hire the other candidates. By these allegations, the appellant might have established a prima facie of discrimination as explained in O'Malley, supra, that is, a case "which covers the allegations made and which, if they are believed, is complete and sufficient to justify a verdict in the complainant's favour in the absence of an answer from the respondent-employer". Instead of determining whether these allegations, if believed, justified a verdict in favour of the appellant, the Tribunal also took into account the respondent's answer before concluding that a prima facie case had not been established. As is clear from [1982] 1 S.C.R. 202">Etobicoke, supra, and O'Malley, this latter element does not figure into a determination of whether a prima facie case of discrimination has been established.

[23]            Even though both the Tribunal and the Trial Judge adopted an incorrect approach for determining the existence of a prima facie case of discrimination, the overall conclusion that the section 7 complaint was not made out is supported by the evidence. The Tribunal found that the respondent had put forward through the evidence of its principal witnesses a reasonable explanation for not hiring the appellant and that this explanation was not a mere pretext for discrimination. The Tribunal's conclusion was reasonably open to it on the record. This finding was largely based on the Tribunal's appreciation of the evidence, particularly the appellant's testimony and that of Mr. Cormier and Mr. Stevenson.

[24]            It is not necessary to dwell at length on the two factual findings that are impugned by the appellant for, as was stated by Iacobucci J. in Ryan, supra, at paragraph 56, "a reviewing court should not seize on one or more mistakes or elements of the decision which do not affect the decision as a whole". To repeat, these findings are that there was no evidence that the appellant's answer to Mr. Stevenson's interview question about leaving the bulkhead doors open while at sea showed inflexibility and perhaps resistance to change; and that there was no evidence that Mr. Hamilton left his employment with Marine Atlantic Inc. in 1995 because of disagreement with management policies. As Dawson J. pointed out at paragraph 33, those issues were to be reviewed on a standard of patent unreasonableness.

[25]            As for the first factual issue, while it is true that evidence of inflexibility and resistance to change was found in Mr. Cormier's evidence rather than in that of Mr. Stevenson, the fact remains that the respondent did have a genuine concern with the answer given by the appellant at his interview of March 14, 1997. It is of little moment that the concern was raised by Mr. Cormier rather than Mr. Stevenson, given that both held senior management positions with the respondent. The second factual issue was fully reviewed by Dawson J. who concluded at paragraph 43 that it was not patently unreasonable for the Tribunal to draw the inference that Mr. Hamilton did not agree with the manner in which Marine Atlantic Inc. ran the ferry service when he left the service in 1995. She pointed in particular to Mr. Hamilton's interest in the chief engineer's position in early April 1997 after the respondent's transition plans were explained to him. This was in contrast to his declining an interview for the same position in mid-March 1997. As Mr. Cormier testified at the hearing before the Tribunal (transcript, vol. vi, at p. 513), "At that time, when it was articulated what sort of transition and what our plans were, Mr. Hamilton expressed that he would be interested in coming in for an interview". Moreover, as compared with the appellant, Mr. Hamilton's separation from Marine Atlantic Inc. was more remote in time because he had left the M.V. "Princess of Acadia" in 1995. The appellant has not demonstrated that the Trial Judge erred in concluding that the Tribunal's findings of fact were not patently unreasonable.

[26]            The final issue concerns the relevance of the Employment Equity Act in the context of a complaint under section 7 of the Canadian Human Rights Act. There can be no doubt that the Employment Equity Act is an important piece of legislation. In addition to obligations under section 5, the Employment Equity Act requires an employer to perform an analysis of its workforce and to conduct a review of its policies to determine underrepresentation of persons in designated groups and to identify employment barriers to such persons (s. 9). An employer is required to prepare (s. 10) and to implement an employment equity plan (s. 12). The evidence was clear that the respondent did not have an affirmative action plan in place before April 1, 1997 (transcript, vol. vi, p. 539). On the other hand, subsection 16(1) of the statute allows a person who becomes an employer after the date the section came into force to comply with sections 9 and 10 thereof "within eighteen months after becoming an employer".

[27]            Part II of the Employment Equity Act deals with "compliance", and devolves responsibility for enforcing the various obligations under the Act upon the Canadian Human Rights Commission. Authority is given to a compliance officer to ensure compliance by way of a compliance audit (s. 23). Where a compliance officer is of the opinion that an employer is not in compliance with its obligations, he is required to "inform the employer of the non-compliance" and to "attempt to negotiate a written undertaking from the employer to take specific measures to remedy the non-compliance" (s. 25(1)). A failure on the part of an employer to enter into a "sufficient" written undertaking may result in the issuance of a direction to the employer by the Canadian Human Rights Commission (s. 25(2)). Such a direction is subject to review by an Employment Equity Review Tribunal (ss. 27, 28). An employer who violates the statute for failing certain duties thereunder is subject to penalty (s. 36). It thus appears that the Employment Equity Act was intended to operate independently and to impose on the employers to which it applies duties and obligations that are specific to that legislation, that are to be enforced pursuant to that legislation, and that are unrelated to a complaint under section 7 of the Canadian Human Rights Act.

[28]            In the result, the appeal should be dismissed with costs.

                                                                                     "A.J. STONE"                               

                                                                                                      J.A.

"I agree

    Gilles Létourneau J.A."

"I agree

    John M. Evans J.A."

                          FEDERAL COURT OF APPEAL

    NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                  A-523-03

STYLE OF CAUSE: Timothy Lincoln v. Bay Ferries Ltd.

PLACE OF HEARING:                                 Halifax, Nova Scotia

DATE OF HEARING:                                   April 26, 2004

REASONS FOR JUDGMENT:                    STONE J.A.

CONCURRED IN BY:                                  LÉTOURNEAU and EVANS JJ.A.

DATED:                     May 27, 2004                

APPEARANCES:

SOLICITORS OF RECORD: