Federal Court Decisions

Date: 19971229

Docket: T-281-97

BETWEEN:

     CON-WAY CENTRAL EXPRESS INC.

     Applicant

     -and-

     TIM ARMSTRONG, Q.C. and STEPHEN AMOR

     Respondents

     REASONS FOR ORDER

MULDOON J.

[1]      It might be mentioned as a practice tip that section 1606 of the Federal Court Rules, C.R.C. 1978, Chapter 663 requires application records have "consecutively numbered pages". This eminently sensible requirement makes it easier for all involved to reference pages in application records, which have been known to run several thousand pages long.

[2]      The applicant, Con-Way Central Express Inc. (Conway), brings an application for judicial review of a decision made on a preliminary motion rendered on January 22, 1997 by the respondent Mr. Tim Armstrong, Q.C. Mr. Armstrong, an adjudicator appointed by the Minister of Labour pursuant to the Canada Labour Code, R.S.C. 1985, c. L-2, decided that he would proceed to adjudicate Mr. Stephen Amor's complaint that he was unjustly dismissed.

[3]      As a preliminary matter, it must be pointed out that the Federal Court of Appeal, in Szczecka v. M.E.I. (1993), 170 N.R. 58 (F.C./A.) has stated that unless special circumstances exist, judicial review of an interlocutory decision should not be taken. This was reiterated by the Federal Court of Appeal in Schnurer v. M.N.R., [1997] 2 F.C. 545 (C.A.). The Chief Justice stated that:

In my view, sections 18, 18.1 to 18.5, and 28 of the current Federal Court Act confirm the view expressed in these later authorities that the judicial review jurisdiction of the Court extends beyond a review of the ultimate decision of a federal board, commission, or other tribunal.

Notwithstanding the broad wording of these provisions, however, this Court must exercise its discretionary jurisdiction to entertain judicial review applications strictly in accordance with the object of sections 18 and 28 of the Federal Court Act. Applications for judicial review should not be allowed to frustrate and delay federal tribunals in the proper exercise of their statutory jurisdiction. Although rendered prior to the 1990 amendments, the following statement by Jackett C.J. inIn re Anti-Dumping Act andin re Danmor Shoe Co. Ltd. [fn: [1974] 1 F.C. 22 at 34 (C.A.)], and reaffirmed by MacGuigan J.A. inBrennan v. The Queen [fn: [1984] 2 F.C. 799 (C.A.)], provides an accurate summary of the relevant policy considerations at play:

In my view, the object of sections 18 and 28 of the Federal Court Act is to provide a speedy and effective judicial supervision of the work of federal boards, commissions and other tribunals with a minimum of interference with the work of those tribunals. Applying section 11 of the Interpretation Act, with that object in mind, to the question raised by these section 28 applications, it must be recognized that the lack of a right to have the Court review the position taken by a tribunal as to its jurisdiction or as to some procedural matter, at an early stage in a hearing, may well result, in some cases, in expensive hearings being abortive. On the other hand, a right, vested in a party who is reluctant to have the tribunal finish its job, to have the Court review separately each position taken, or ruling made, by a tribunal in the course of a long hearing would, in effect, be a right vested in such a party to frustrate the work of the tribunal.

It was these policy considerations which led this Court, inSzczecka v. Canada (Minister of Employment and Immigration) [footnote omitted], to conclude that, absent special circumstances, there should not be any appeal or immediate judicial review of an interlocutory decision under section 28. The Szczecka decision was based upon section 28 as currently enacted.

[4]      "Special circumstances" include those such as when a Tribunal's jurisdiction is in question, as in Cyanamid v. Canada (May 31, 1983), T-153-83 (F.C.T.D.). The application presently before the Court also comes within these "special circumstances" because it too concerns a question of jurisdiction.

[5]      As the issue is solely one of jurisdiction, and as will be seen one which is resolved by statutory interpretation, the facts do not need to be recited in great detail. The complete account appears in the adjudicator's decision (application record or AR, tab 3). The complainant, Mr. Stephen Amor, was employed with the applicant from 1992 until his termination in 1995. On November 13, 1995, Mr. Ken Hartman (identified as Mr. Hertman in the adjudicator's reasons) became aware of allegations that the complainant had been abusive of two female employees. After convening a pre-termination conference at which he received written statements from the two employees with corroborating statements, Mr. Hartman confronted the complainant with the allegations. Mr. Amor denied them. The pre-termination conference was reconvened on November 15, 1995. Mr. Amor again denied the allegations. Mr. Hartman then advised the complainant that because of the complaints and Mr. Amor's disciplinary record, the applicant was terminating his employment for cause. (AR, tab 3: pp. 2-5)

[6]      During the conference Mr. Pierce, the applicant's manager at the Toronto Service Centre, produced a discharge letter and an offer of settlement which included an acknowledgement and release. Mr. Amor then admitted the allegations (although not to the extent alleged) and asked whether termination could be avoided. Mr. Hartman stated it could not and indicated that the settlement terms were without prejudice to the applicant's position that he was being terminated for cause. Mr. Hartman testified that "he specifically told the Complainant `not to make a snap judgement' and that he (the Complainant) had seven days to carefully review the legal consequences that would flow from signing the Acknowledgement & Release" (AR, tab 3: p. 6). Mr. Amor was also advised that he could appeal to the Employee Termination Review Board (the review board). The complainant did so and the review board hearing was held on November 17, 1995. The review board upheld the termination and Mr. Pierce orally informed Mr. Amor of the result (Ar, tab 3: p. 7).

[7]      On Sunday, November 19, 1995, the complainant went to his former place of work and cleaned out his locker. Mr. Pierce asked him whether he had signed the release. As he had not yet done so, the complainant began to sign the release. According to the evidence of Mr. Pierce, the complainant asked what the reference to section 240 of the Code meant. In response, Mr. Pierce testified that he read the section out loud and then told the applicant: "By signing this you are not going to come back against the Company for anything further, it is the final goodbye" (AR, tab 3: p. 9). The only other question the complainant had was when he would receive his severance pay (AR, tab 3: p. 9). The next day Mr. Pierce sent a copy of the release to Mr. Hartman by facsimile. The settlement cheque was then sent to the complainant (AR, tab 3: p. 7).

[8]      At no time did Mr. Pierce advise the complainant that he had reinstatement rights under the Code.

[9]      The "Acknowledgement & Release" reads, thus (AR, tab 3: p. 3):

I, Steve Amor, agree to accept the terms of severance set out above in full and final satisfaction of all claims which I have or may have against Con-Way Central Express, including any claim for notice of termination or severance pay whether arising pursuant to statute or common law. I also acknowledge and agree that the terms of severance set out above represent full and final satisfaction of any and all amounts to which I am entitled under the Canada Labour Code and represents a voluntary compromise and waiver any right to file a complaint under section 240 of the Canada Labour Code.

[10]      The question the adjudicator decided was whether he had jurisdiction to hear the complaint: "the Employer contended, by way of preliminary motion, that the complaint was not arbitrable, for the reason that the complainant had entered into a binding settlement and executed a full release of all claims against the employer" (AR, tab 3: p. 1). The adjudicator found that he could hear the complaint. The pertinent parts of adjudicator's decision read (AR, tab 3: p. 17-19):

Rights under s. 240 of the Code are, to use arbitrator Beatty's phrase, "inalienable", unless, at the very least, the person alleged to be contracting out of the rights is given explicit notice of the rights being relinquished. In this case, on Pierce's evidence, s. 240 was read but that section itself makes no reference to an adjudicator's authority to reinstate a successful complaint. Moreover, in answer to a specific question as to whether the issue of potential reinstatement was raised, Pierce replied, "I didn't say he (the Complainant) had reinstatement rights under the Code".

Where a statutory right is conferred that can only be waived under limited, defined circumstances, it is incumbent on the party seeking to rely on the waiver to show that it falls within the exception language contained in the statute. The reading of s. 240 of the Code to the Complainant, as was done in this case, is insufficient to meet this burden. For the Complainant to have waived his statutory right, he would have had to have been aware that not only that there was a potential right of reinstatement under s. 242, but that s. 128 [sic: 168] (to which no reference was made) afforded him the option to exercise his right to lodge a complaint under s. 240, or accept an arrangement "more favourable to him" than that afforded by proceeding with the complaint. There is no evidence that either the Complainant, Pierce, or Hertman, were aware of the provisions of sections 128 [sic] and 242 or of the precise nature of the statutory option available to the Complainant.

...

The absence of full knowledge of precisely what was being waived is sufficient, in itself, to vitiate the release.

...

Additionally, there was no evidence before me that would permit a conclusion that the settlement proposed by the Employer was in fact more favourable to the Complaint than the rights he might otherwise have exercised under s. 240. This suggests that, apart from any other consideration, a purported waiver or release of a right to lodge a complaint under s. 240 cannot be properly assessed on a preliminary motion, without full knowledge of the nature and extent of the alleged wrongdoing and other relevant substantive matters, so as to permit an evaluation of the proposed settlement and measure it against the prospects of a superior result, up to and including reinstatement, under the complaint procedure.

...

Counsel for the Employer referred me to authorities where adjudicators had upheld the validity of releases signed by complainants prior to the filing of an unjust dismissal complaints under theCanada Labour Code: see Noyle v. The Canadian Imperial Bank of Commerce (1985), an unreported decision of adjudicator Hinnegan and Midland Courier v. Gomes et al. (1994), 73 F.T.R. 286, a decision of Rouleau J. in the Federal Court of Canada. Neither case deals with the provisions of s. 168 of the Code and therefore do not assist me in reaching my decision.

[11]      At the heart of this complaint is the underlying statutory framework. The relevant statutory provisions, all within Part III of the Code, read as follow:

168. (1) This Part and all regulations made under this Part apply notwithstanding any other law or any custom, contract or arrangement, but nothing in this Part shall be construed as affecting any rights or benefits of an employee under any law, custom, contract or arrangement that are more favourable to the employee than his rights or benefits under this Part.

240. (1) Subject to subsections (2) and 242(3.1), any person

(a) who has completed twelve consecutive months of continuous employment by an employer, and

(b) who is not a member of a group of employees subject to a collective agreement,

may make a complaint in writing to an inspector if the employee has been dismissed and considers the dismissal to be unjust.

(2) Subject to subsection (3), a complaint under subsection (1) shall be made within ninety days from the date on which the person making the complaint was dismissed.

242. (1) The Minister may, on receipt of a report pursuant to subsection 241(3), appoint any person that the Minister considers appropriate as an adjudicator to hear and adjudicate on the complaint in respect of which the report was made, and refer the complaint to the adjudicator along with any statement provided pursuant to subsection 241(1).

(2) An adjudicator to whom a complaint has been referred under subsection (1)

(a) shall consider the complaint within such time as the Governor in Council may by regulation prescribe;

(b) shall determine the procedure to be followed, but shall give full opportunity to the parties to the complaint to present evidence and make submissions to the adjudicator and shall consider the information relating to the complaint; and

(c) has, in relation to any complaint before the adjudicator, the powers conferred on the Canada Labour Relations Board, in relation to any proceeding before the Board, under paragraphs 16(a), (b) and (c).

(3) Subject to subsection (3.1), an adjudicator to whom a complaint has been referred under subsection (1) shall

(a) consider whether the dismissal of the person who made the complaint was unjust and render a decision thereon; and

(b) send a copy of the decision with the reasons therefor to each party to the complaint and to the Minister.

(3.1) No complaint shall be considered by an adjudicator under subsection (3) in respect of a person where

(a) that person has been laid off because of lack of work or because of the discontinuance of a function; or

(b) a procedure for redress has been provided elsewhere in or under this or any other Act of Parliament.

(4) Where an adjudicator decides pursuant to subsection (3) that a person has been unjustly dismissed, the adjudicator may, by order, require the employer who dismissed the person to

(a) pay the person compensation not exceeding the amount of money that is equivalent to the remuneration that would, but for the dismissal, have been paid by the employer to the person;

(b) reinstate the person in his employ; and

(c) 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.

[12]      At the outset, it is necessary to deal with subsection 243(2), the privative clause which precludes the Court from prohibiting or restraining the adjudicator under section 242 proceedings. However, what is at issue here is a jurisdictional question. Therefore, notwithstanding privative clauses, a tribunal can be subject to judicial review if the tribunal has exceeded its jurisdiction. See for example Canada Post v. Pollard, [1992] 2 F.C. 697). An error concerning the jurisdiction of the tribunal per se is reviewed on the correctness standard. (See Pezim v. British Columbia (Superintendent), [1994] 2 S.C.R. 557 at 590).

[13]      The applicant submits that the adjudicator erred in four ways. The first is that he failed to interpret the provisions in the Code correctly which confer and limit his jurisdiction, i.e. section 168, 240 and 242. The other three alleged errors are that the adjudicator made a patently unreasonable error of law in determining that the settlement was not an effective bar to the complaint, made a patently unreasonable finding of fact when he found that the complainant lacked the requisite knowledge to release his claims and made a patently unreasonable error as the decision was made without regard to principles set out in two cases. As will be seen the only relevant issue is the first.

[14]      In oral argument, counsel for the applicant presented two bases upon which the adjudicator erred in interpreting his jurisdiction to hear the complaint. These two arguments centre around the interpretation of "more favourable" as outlined in section 168 of the Code . First, the applicant argues that the requirement that the employer point out the substance of section 168 and section 242 to the complainant is an "artificial" one. He states that it is implicit in offering a settlement that the employee forego certain rights; namely the right to make a complaint and the right to obtain a remedy by filing the complaint. He argues that in making the decision whether to accept the settlement or to pursue a complaint the complainant naturally makes an assessment as to whether or not the settlement is "more favourable" to him.

[15]      Second, the applicant disputes the adjudicator"s finding that there was no evidence upon which the adjudicator could conclude that the settlement offer was indeed more favourable to the complainant. In response, the applicant submits that the contract is better than what Mr. Amor could have received under the Code because the certainty of accepting a settlement must be weighed against the uncertainty of filing a complaint; a process which may entail great time and expense.

[16]          With respect, these arguments must fail. Mr. Justice Rothstein recently explained the effects of section 168 on the jurisdiction of an adjudicator appointed pursuant to subsection 242(2) of the Code in The National Bank of Canada v. The Honourable Alfonso Gagliano et al. (June 19, 1997), T-1540-96 (F.C.T.D.) Rothstein J. stated at pp. 6 to 7:

Having decided that the Court may consider whether the Minister has jurisdiction to appoint the adjudicator in this case, I turn to the statutory provisions. Section 168 is critical. Under it, Part III of the Code, including Division XIV, applies notwithstanding any contract. It would thus appear that parties may not contract out of the Code in respect of matters under Part III. This intrusion by Parliament into the freedom to contract is explained by counsel for the Minister as being justified on the basis that Part III of the Code establishes a safety net of minimum requirements for employees. A consideration of the subjects in Part III, some of which I have listed above, such as minimum wages and maximum hours of work, support this view. This approach is also consistent with the latter words of subsection 168(1) which I repeat:

... nothing in this Part shall be construed as affecting any rights or benefits of an employee under any law, custom, contract or arrangement that are more favourable to the employee than his rights or benefits under this Part.

In short, if a contract is more beneficial to an employee than rights under Part III, the contract will govern; if less beneficial, Part III will govern. Thus subsection 168(1) provides that while parties may freely enter into binding contracts respecting conditions of employment and termination, such contracts are subject to minimum statutory requirements in favour of employees.

[17]      Then, at pp. 8 to 9 Rothstein J. stated:

I think the Bank is correct that an adjudicator does not have jurisdiction to pronounce on the validity of a settlement agreement between employee and employer. The adjudicator's jurisdiction is only that conferred by statute and the statute in this case only empowers the adjudicator to consider whether a dismissal is unjust.

However, the question of the validity of any settlement agreement does not arise before the adjudicator and the adjudicator has no need to address that question. Under subsection 168(1), the adjudicator carries out his or her duties irrespective of whether an agreement exists between employee and employer. The adjudicator only decides whether an employee was unjustly dismissed and, if so, the appropriate remedy. If the adjudicator finds the employee was not unjustly dismissed, that is the end of the matter. If the adjudicator finds the employee was unjustly dismissed, the adjudicator may go on to require the employer to compensate the employee, reinstate the employee or provide other relief that is equitable.

[18]      It follows that the obvious question which must be asked first in this case is whether the settlement or the Code would be less beneficial to Mr. Amor. Despite the applicant"s argument that the complainant"s decision to forego the uncertainty of litigation in favour of the certainty of the settlement offer is prima facie "more favourable" to him, as noted in National Bank, this is not the correct method of determining what is "more favourable". Part III of the Code establishes a set of minimum statutory requirement, which cannot be contractually abridged. Section 240 is one of the rights provided under Part III of the Code. It follows that parties cannot contract out of the right to adjudication given by section 240 because such a contract would be ipso facto less favourable than the provisions of Part III of the Code. That is precisely what the parties propose to do in the settlement at issue. Thus, by application of section 168 of the Code, the waiver of the right to adjudication is of no force and effect.

[19]      Although the Court will not address the issue of whether the employer was required to read the relevant portions of the Code to the employee the adjudicator made no error in determining that he had jurisdiction to hear the complaint for the reasons outlined in National Bank.

[20]      It should be added that the case which the applicant submits is decisive to this issue, Midland Courier v. Gomes et al. (1994), 73 F.T.R. 286, does not assist the applicant. In that case, the complainant was given the option of accepting a severance package, under which she would agree not to file a complaint for wrongful dismissal, or being dismissed for cause. The complainant chose to accept the severance package but later decided to file a complaint under section 240 of the Canada Labour Code alleging wrongful dismissal. The adjudicator held that he had jurisdiction to hear the complaint despite the fact that the complainant agreed not to file a complaint when she accepted the severance package. The adjudicator determined that the release was final and binding in the event that the complainant was dismissed for cause. However, the adjudicator stated that if it was found that there was insufficient cause, the complainant would be entitled to deal with the complaint. The employer sought judicial review of the adjudicator"s decision to proceed with the complaint. In allowing the application, Mr. Justice Rouleau stated the following at page 290:

It appears that the adjudicator based his conclusion that the agreement was valid in the context of a dismissal for cause, and on a finding that the employment relationship had been terminated prior to the signing of the release. This finding is not supported by the evidence and indeed conflicts with the adjudicator"s observation that the release was signed in "circumstances which are very similar to those in which employees tender their resignations at the request of the employer". What is clear is that on February 21, 1992, a decision had been taken that Mrs. Gomes" services were no longer required. The employer gave her the alternative; sign the release or be fired for cause. Having considered her options, she elected to sign the document and it was at this point that the employment relationship was terminated. By executing, Mrs. Gomes avoided the possibility of being terminated for cause. The employer was in return avoiding any claims for reinstatement or damages resulting from the termination.

[Emphasis added]

[21]      It is evident from the above-mentioned quote that Mr. Justice Rouleau found that a release executed to avoid cause was a valid and effective bar to a complaint under section 240 of the Code. However, in his reasons, Mr. Justice Rouleau did not deal with the issue of section 168, as it was not raised by the parties.

[22]      The other case, Noyle v. Canadian Imperial Bank of Commerce, (March 17, 1986) a decision by adjudicator Hinnegan, is simply wrong in light of Mr. Justice Rothstein"s interpretation in National Bank . Again, the first question to be asked is not whether the complainant freely and voluntarily contracted out of his statutory rights. It is, rather, whether the settlement agreement or the Code should govern, and if the Code affords a better right then the adjudicator has jurisdiction. The bottom line is that Parliament intended to make it extremely difficult to waive the basic guarantees contained in the Code. It is not the Court's place to say otherwise. In the words of Rothstein J. in National Bank at page 12:

Indeed, counsel for the Bank suggested that if such agreements are not considered binding and that employees, in addition, have recourse under the Code, there will be a chilling effect on voluntary settlements between terminating employees and employers. While I appreciate this concern at a policy level, and the many arguments that may be made as to the wisdom of allowing the ordinary law of contract to apply in these cases, I am bound by the legislative scheme adopted by Parliament which, for better or worse, is by its effect, interventionist in employer-employee relations.

Having regard to the intrusive nature of the legislation, I would, however, make a few observations. First, employees who wish to complain, must do so within ninety days of being dismissed. Employers are not therefore subject to an indeterminate period in which disgruntled employees may seek relief under the Code. Second, merely because an employee may be able to seek relief under Division XIV does not mean that an employer will necessarily be called upon to provide anything more than what is already provided under the agreement entered into with the employee.

Third, and in my opinion, of considerable significance, is the fact that under subsection 242(1), the power of the Minister to appoint an adjudicator is discretionary ***

[23]      These words speak for themselves.

[24]      For these reasons this application for judicial review is dismissed.

                                     F.C. Muldoon

                                     Judge

Ottawa, Ontario

December 29, 1997