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Date: 19980917

Docket: T-286-96




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[1]      This judicial review concerns the December 18, 1995 decision of Referee Sean M. Kubara made on a wage recovery appeal under Division XVI, Part III of the Canada Labour Code, R.S.C. 1985, c. L-2. The appeal before the Referee was from a decision against the Respondents on their complaint that they were entitled to overtime pursuant to s.174 of the Code, specifically for instances where they were required to work in excess of eight hours in a twenty-four hour period. On the appeal, the Referee found for the Respondents by ruling that each was entitled to overtime compensation.

[2]      The Applicant argues that the Referee made an error in coming to the decision by not adequately considering the provisions of s.170 or the Code. The Referee"s decision is protected from being set aside on judicial review by the provisions of s.251.12(6) of the Code which provide that "the referee"s order is final and shall not be questioned or reviewed in any court". However, it is common ground that the Referee"s decision is protected except if a "patently unreasonable" error has been made [Blanchard v. Control Data Canada Limited, [1984] 2 S.C.R. 476 at 479], and, therefore, the onus is on the Applicant to meet this test to be successful in this application.

[3]      Under the Code, by s.169(1)(a), the standard hours of work of an employee shall not exceed eight hours in a day and forty hours in a week, and by s.174, if an employee is required or permitted to work in excess of the standard hours of work, overtime must be paid. But there are exceptions. Respecting this case, the two pertinent exceptions are found in s.170 of the Code and s.7(a) of the Canada Labour Standards Regulations, C.R.C., vol. X, c. 986.

[4]      Section 170(1) of the Code sets out an exception respecting employees covered by a collective agreement as follows:

                 s.170(1) An employer may, in respect of employees subject to a collective agreement, establish, modify or cancel a work schedule under which the hours exceed the standard hours of work set out in paragraph 169(1)(a) if                 
                 (a) the average hours of work for a period of two or more weeks does not exceed forty hours a week; and                 
                 (b) the schedule, or its modification or cancellation is agreed to in writing by the employer and the trade union.                 

[5]      Section 7(a) of the Regulations reads:

                 s.7 Notwithstanding the requirements of these Regulations, section 174 of the Act does not apply in circumstances where there is an established work practice that                 

(a) requires or permits an employee to work in excess of standard hours for the purposes of changing shifts;...

[6]      Counsel for the parties acting on the appeal before the Referee agreed that the issue for determination centred on the correct interpretation of the phrase "changing shifts" in s.7(a) of the Regulations . Accordingly, in a careful and well written decision, the Referee focussed on this issue, the result being a ruling that the s.7 exception did not apply to the general rule established by s.169(1)(a) and s.174 of the Code.

[7]      The Applicant does not attack the Referee"s central finding respecting the interpretation of s.7 of the Regulations , but argues that a patently unreasonable finding is made by the Referee in this passage from the decision:

Sections 170 and 172 of the Code were touched on by both counsel in argument but in my view, they are not relevant as their provisions would only apply if there were an agreement in writing between the employer and the trade union to establish a work schedule in which the hours exceed the standard hours of work. That appears not to have been done in this case.

[8]      It can be reasonably argued that whether the Referee so erred depends on the rights that the parties came to the Referee to determine. It is agreed that they came to settle a question under s.7 of the Regulations. They came without seriously arguing that the provisions of the collective agreement apply as an exception to the general rule. In fact, during the course of the hearing before me, counsel for the Applicant admitted that when the case was argued by his predecessor before the Referee, house counsel for the Applicant who prepared the appeal brief had not even thought about the applicability of s.170.

[9]      Therefore, the words used by the Referee arise from this mutual position, which might be termed an agreement, and the finding made is consistent with this position.

[10]      However, during the course of argument I was advised that, just before this judicial review commenced before Associate Chief Justice Jerome on September 4, 1997, new counsel then and now acting for the Applicant, for the first time, raised the argument that the s.170 error had been made and, therefore, applied to include it in the Applicant"s judicial review argument. Counsel for the Respondents on September 4th, who had also argued the case before the Referee, objected. Associate Chief Justice Jerome"s ruling in favour of the Applicant on this issue is contained in reasons dated December 3, 1997, and is as follows:

However, in my opinion this is not a new argument. The issue was raised during the hearing before the referee and the referee held that "in [his] view, [sections 170 and 172 of the Code ] are not relevant." Although the focus of the referee"s decision was the applicability of section 7(a) of the Regulations, the parties raised section 170 in argument and the referee determined that it was not relevant. I believe that when an administrative body has made a decision concerning the applicability of a statutory provision, a party should be able to seek judicial review.

[11]      Following Associate Chief Justice Jerome"s ruling, the judicial review did not proceed further before him, but instead was commenced anew before me on June 3, 1998. After oral submissions focussed only on the error issues respecting the applicability of s.170, further opportunity to give those submissions in writing was granted until August 8, 1998. These reasons are given having carefully considered those submissions.

[12]      Associate Chief Justice Jerome"s ruling clearly provides the Applicant with the opportunity to make an argument on the merits of the applicability of s.170. In my opinion, this cannot be done on this judicial review. My task is to determine whether an error exists in the Referee"s decision, not to determine rights between the parties. This is the mandate and obligation of the Referee.

[13]      Therefore, on this judicial review, I am of the view that the only way I can give effect to Associate Chief Justice Jerome"s ruling is to interpret it as requiring me to consider whether the failure to determine the merits of s.170 makes the Referee"s decision patently unreasonable, thus allowing the decision to be set aside. Without attributing any fault to the Referee, I have come to the conclusion that I must so decide.

[14]      While I completely understand the reason the Referee did not delve into the merits of this provision, on the oral and detailed written arguments I have considered, the argument that s.170 applies to the facts of this case has sufficient merit to warrant careful consideration. Therefore, regardless of the position adopted by counsel in the hearing before the Referee, to provide a fair and just outcome to all concerned in what I understand to be a precedent setting case of broad interest, the potential application of s.170 should have been seriously considered by the Referee. Since it was not, I find that the failure to do so renders the decision patently unreasonable and, thus, constitutes a reviewable error.

[15]      For these reasons, I set aside the Referee"s decision and refer this matter back specifically to Referee Kubara for argument and decision on the applicability of s.170, it being entirely within the Referee"s discretion to decide its impact on the other findings made in the decision of December 18, 1995, which have not been challenged in this judicial review application. If Referee Kubara is unable to accept this referral, then this matter should go to another Referee for a complete rehearing.

[16]      At the close of oral argument, counsel for the Applicant indicated that a submission respecting costs would be made in the written argument to be filed if costs were to be requested. Since no submission was made, I make no order as to costs.



OTTAWA, Ontario

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