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Free v. Magnetawan (Municipality) 173

[Indexed as: Free v. Magnetawan (Municipality)]

David Free, Plaintiff (Appellant) and Municipality ofMagnetawan, Richard Smith, Kris Nicholls, Patti Paul and Mark

Urbanski, Defendants (Respondents)

Ontario Court of Appeal

Docket: CA C59459

2015 ONCA 629

John Laskin, J.C. MacPherson, J. MacFarland JJ.A.

Heard: September 14, 2015

Judgment: September 14, 2015

Municipal law –––– Municipal liability — Miscellaneous –––– By-law waspassed appointing plaintiff as acting CAO/clerk of defendant municipality —Municipal council continued to advertise for permanent replacement — Twomonths later, council passed resolution terminating plaintiff’s services andpassed by-laws to repeal earlier by-law that appointed plaintiff — Another per-son was permanently appointed to position — Plaintiff unsuccessfully broughtaction for wrongful dismissal — Plaintiff appealed — Appeal dismissed — In-consistent positions taken by plaintiff both in original pleadings and at summaryjudgment motion belied position he took at trial in relation to contract with fixedthree-year term — There was no evidence that municipality purged records inrelation to events and it was plaintiff’s duty from time he was hired until histemporary position was terminated to prepare and keep such records — Mysteri-ously, email chain plaintiff relied on appeared some four years after events inquestion and it stretched credulity to think those documents, had they existed,would not have been produced much earlier in proceedings.

Labour and employment law –––– Employment law — Nature of employ-ment relationship — Relationships distinct from employment relation-ship — Independent contractor –––– By-law was passed appointing plaintiff asacting CAO/clerk of defendant municipality — Municipal council continued toadvertise for permanent replacement — Two months later, council passed reso-lution terminating plaintiff’s services and passed by-laws to repeal earlier by-law that appointed plaintiff — Another person was permanently appointed toposition — Plaintiff unsuccessfully brought action for wrongful dismissal —Plaintiff appealed — Appeal dismissed — Inconsistent positions taken by plain-tiff both in original pleadings and at summary judgment motion belied positionhe took at trial in relation to contract with fixed three-year term — There was noevidence that municipality purged records in relation to events and it was plain-tiff’s duty from time he was hired until his temporary position was terminated toprepare and keep such records — Mysteriously, email chain plaintiff relied onappeared some four years after events in question and it stretched credulity to

CANADIAN CASES ON EMPLOYMENT LAW 26 C.C.E.L. (4th)174

think those documents, had they existed, would not have been produced muchearlier in proceedings.

Evidence –––– Admissibility — Relevance — Materiality –––– By-law waspassed appointing plaintiff as acting CAO/clerk of defendant municipality —Municipal council continued to advertise for permanent replacement — Twomonths later, council passed resolution terminating plaintiff’s services andpassed by-laws to repeal earlier by-law that appointed plaintiff — Another per-son was permanently appointed to position — Plaintiff unsuccessfully broughtaction for wrongful dismissal — Plaintiff appealed — Appeal dismissed — In-consistent positions taken by plaintiff both in original pleadings and at summaryjudgment motion belied position he took at trial in relation to contract with fixedthree-year term — There was no evidence that municipality purged records inrelation to events and it was plaintiff’s duty from time he was hired until histemporary position was terminated to prepare and keep such records — Mysteri-ously, email chain plaintiff relied on appeared some four years after events inquestion and it stretched credulity to think those documents, had they existed,would not have been produced much earlier in proceedings.

APPEAL by plaintiff from judgment reported at Free v. Magnetawan (Munici-pality) (2014), 2014 ONSC 3635, 2014 CarswellOnt 12204, 29 M.P.L.R. (5th)109, 19 C.C.E.L. (4th) 1 (Ont. S.C.J.), dismissing plaintiff’s action for wrongfuldismissal.

Marc A. Munro, for AppellantIan St. John, Jeffrey Rochwerg, for Respondent

Per curiam (orally):

1 The trial judge found the evidence of the appellant “troubling”. Heaccepted the evidence of the respondents and clearly preferred that evi-dence over that of the appellant. The only issue for determination waswhether the appellant had been hired for a three-year term. The languageof the by-law appointing him to this position clearly states that he was“Acting CAO/Clerk”.

2 It had been the municipality’s practice to initially appoint an interimacting CAO and have that person recruit candidates for the position on apermanent basis. The municipality followed its own past practice.

3 Other documentary evidence supports the by-law including the appel-lant’s own extensive memo dated May 26 to council, the interview hegave to the local newspaper and the fact that he had to discuss the dura-tion of any employment with his wife.

Free v. Magnetawan (Municipality) Per curiam 175

4 The inconsistent positions taken by the appellant both in his originalpleadings and at a summary judgment motion, belie the position he tookat trial in relation to a contract with a fixed three-year term.

5 There was no evidence the municipality had “purged” or “destroyed”its records in relation to these events. The municipality simply did nothave the records. It was the appellant’s duty from the time he was hireduntil his temporary position was terminated to prepare and keep suchrecords.

6 Mysteriously, the email chain the appellant relies on appeared somefour years after the events in question. It stretches credulity to think thosedocuments, had they existed, would not have been produced much earlierin the proceedings and been referenced in the pleadings.

7 The appeal is dismissed.8 Costs to the respondent municipality fixed in the sum of $10,000 in-

clusive of disbursements and HST.

Appeal dismissed.


[Indexed as: Grant Forest Products Inc. v. Toronto-DominionBank]

In the Matter of the Companies’ Creditors Arrangement Act,R.S.C. 1985, c. C-36, as amended

In the Matter of a Plan of Compromise or Arrangement ofGrant Forest Products Inc., Grant Alberta Inc., Grant Forest

Products Sales Inc., and Grant U.S. Holdings G.P.

Grant Forest Products Inc., Grant Alberta Inc., Grant ForestProducts Sales Inc., and Grant U.S. Holdings GP, Applicantsand The Toronto-Dominion Bank, in its capacity as agent forthe secured lenders holding first lien security and the Bank ofNew York Mellon, in its capacity as agent for secured lenders

holding second lien security, Respondents

Ontario Court of Appeal

Docket: CA C58636

2015 ONCA 570

Doherty, E.E. Gillese, P. Lauwers JJ.A.

Heard: February 3, 2015

Judgment: August 7, 2015

Bankruptcy and insolvency –––– Companies’ Creditors Arrangement Act —Initial application — Lifting of stay –––– G Inc. was subject to protectionunder Companies’ Creditors Arrangement Act — Orders were made authorizingG Inc. to take steps to wind up two defined benefit pension plans — Monitorwas ordered to hold back from distribution to creditors amount estimated to bewind up deficit in plans — Issues arose as to whether deemed trust arose as re-sult of winding up orders, and as to priority of remaining funds as between ad-ministrator of pension plans and secured creditor — Motion judge granted se-cured creditor’s motion to lift stay and ordered G Inc. into bankruptcy —Superintendent of Financial Services appealed — Appeal dismissed — Motionjudge did not err in exercise of discretion to lift stay and order G Inc. into bank-ruptcy — It was clear that remaining funds were insufficient to meet claims ofsecured creditor and pension claimants — Breadth of motion judge’s discretionwas sufficient to construct bridge to Bankruptcy and Insolvency Act — Securedcreditor did not fail to bring motion in timely manner — Even if secured creditorbrought motion to defeat wind up deemed trust priority regime, it did not disen-title secured creditor from being granted relief, as creditor may seek bankruptcyorder to alter priorities in its favour — Motion judge did not err in failing to

Grant Forest Products v. Toronto-Dominion Bank 177

order payment of wind up deemed trusts deficits before ordering G Inc. intobankruptcy.

Bankruptcy and insolvency –––– Property of bankrupt — Pensionfunds –––– Deemed trust — G Inc. was subject to protection under Companies’Creditors Arrangement Act — Orders were made authorizing G Inc. to takesteps to wind up two defined benefit pension plans — Monitor was ordered tohold back from distribution to creditors amount estimated to be wind up deficitin plans — Issues arose as to whether deemed trust arose as result of winding uporders, and as to priority of remaining funds as between administrator of pensionplans and secured creditor — Motion judge granted secured creditor’s motion tolift stay and ordered G Inc. into bankruptcy — Motion judge did not authorizedeemed trust to prevail in insolvency by granting wind up orders — Motionjudge held that priority of proceeds would be to secured creditors in respect ofamounts that would otherwise be payable in respect of wind up deficiencies —Superintendent of Financial Services appealed — Appeal dismissed — Motionjudge did not err in exercise of discretion to lift stay and order G Inc. into bank-ruptcy — It was clear that remaining funds were insufficient to meet claims ofsecured creditor and pension claimants — Breadth of motion judge’s discretionwas sufficient to construct bridge to Bankruptcy and Insolvency Act.

Bankruptcy and insolvency –––– Bankruptcy and insolvency jurisdiction —Constitutional jurisdiction of Federal government and provinces — Para-mountcy of Federal legislation –––– G Inc. was subject to protection underCompanies’ Creditors Arrangement Act — Orders were made authorizing GInc. to take steps to wind up two defined benefit pension plans — Monitor wasordered to hold back from distribution to creditors amount estimated to be windup deficit in plans — Issues arose as to whether deemed trust arose as result ofwinding up orders, and as to priority of remaining funds as between administra-tor of pension plans and secured creditor — Motion judge granted secured credi-tor’s motion to lift stay and ordered G Inc. into bankruptcy — Motion judgeheld that provincial provisions in pension areas prevail prior to insolvency butonce federal statute is involved, insolvency regime applies — Motion judge heldthat priority of proceeds would be to secured creditors in respect of amounts thatwould otherwise be payable in respect of wind up deficiencies — Superinten-dent of Financial Services appealed — Appeal dismissed — Motion judge didnot err in failing to order payment of wind up deemed trusts deficits before or-dering G Inc. into bankruptcy — Once motion judge ordered G Inc. into bank-ruptcy, priorities established by Bankruptcy and Insolvency Act (BIA) appliedto remaining funds and rendered wind up deemed trust claims inoperative —Because wind up deemed trusts are created by provincial legislation, their pay-ment could not be ordered when motions were heard because payment wouldhave had effect of frustrating priorities established by federal law of bank-


ruptcy — Provincial statute cannot alter priorities within federal scheme nor canit be used in manner that subverts scheme of distribution under BIA.

Bankruptcy and insolvency –––– Priorities of claims — Preferred claims —Wages and salaries of employees — Creation of statutory trust –––– Pen-sions — G Inc. was subject to protection under Companies’ Creditors Arrange-ment Act — Orders were made authorizing G Inc. to take steps to wind up twodefined benefit pension plans — Monitor was ordered to hold back from distri-bution to creditors amount estimated to be wind up deficit in plans — Issuesarose as to whether deemed trust arose as result of winding up orders, and as topriority of remaining funds as between administrator of pension plans and se-cured creditor — Motion judge granted secured creditor’s motion to lift stay andordered G Inc. into bankruptcy — Motion judge held that G Inc. was not obli-gated to make special wind up payments and was correct to seek directions —Motion judge held that amounts held by monitor should not be applied to pen-sion plans — Motion judge held that priority of proceeds would be to securedcreditors in respect of amounts that would otherwise be payable in respect ofwind up deficiencies — Superintendent of Financial Services appealed — Ap-peal dismissed — Motion judge did not err in exercise of discretion to lift stayand order G Inc. into bankruptcy — It was clear that remaining funds were in-sufficient to meet claims of secured creditor and pension claimants — Breadthof motion judge’s discretion was sufficient to construct bridge to Bankruptcyand Insolvency Act.

Pensions –––– Private pension plans — Payment of pension — Bankruptcyor insolvency of employer — General principles –––– G Inc. was subject toprotection under Companies’ Creditors Arrangement Act — Orders were madeauthorizing G Inc. to take steps to wind up two defined benefit pension plans —Monitor was ordered to hold back from distribution to creditors amount esti-mated to be wind up deficit in plans — Issues arose as to whether deemed trustarose as result of winding up orders, and as to priority of remaining funds asbetween administrator of pension plans and secured creditor — Secured creditorbrought motion to declare that G Inc. no longer had to make payments to pen-sion plans (“pension motion”) — Motion judge granted secured creditor’s mo-tion to lift stay and ordered G Inc. into bankruptcy — Motion judge held that GInc. was not obliged to make special wind up payments — Motion judge heldthat amounts held by monitor should not be applied to pension plans — Motionjudge held that priority of proceeds would be to secured creditors in respect ofamounts that would otherwise be payable in respect of wind up deficiencies —Superintendent of Financial Services appealed — Appeal dismissed — Motionjudge did not act improperly in adjourning pension motion on his own motionand adjournments did not amount to procedural unfairness — There was no er-ror in motion judge’s reasoning that if pension claimants wanted payments bemade on wind up deficits, they would have had to have taken steps to compel

Grant Forest Products v. Toronto-Dominion Bank 179

such payments to be made — Motion judge did not err by failing to answerquestion posed by pension motion because distribution of remaining funds hadto be in accordance with Bankruptcy and Insolvency Act priorities scheme.

Pensions –––– Private pension plans — Administration of pension plans —Winding up of plan — Distributions on winding-up –––– G Inc. was subjectto protection under Companies’ Creditors Arrangement Act — Orders weremade authorizing G Inc. to take steps to wind up two defined benefit pensionplans — Monitor was ordered to hold back from distribution to creditors amountestimated to be wind up deficit in plans — Issues arose as to whether deemedtrust arose as result of winding up orders, and as to priority of remaining fundsas between administrator of pension plans and secured creditor — Motion judgegranted secured creditor’s motion to lift stay and ordered G Inc. into bank-ruptcy — Motion judge held that G Inc. was not obliged to make special windup payments and did not authorize deemed trust to prevail in insolvency bygranting wind up orders — Motion judge held that priority of proceeds would beto secured creditors in respect of amounts that would otherwise be payable inrespect of wind up deficiencies — Supreme Court of Canada released decisionholding that, prior to initial order, deemed trust arose when pension plan waswound up in respect of wind up deficits notwithstanding difficulty in determin-ing precise amount of trust — Superintendent of Financial Services appealed —Appeal dismissed — Motion judge did not err in failing to order payment ofwind up deemed trusts deficits before ordering G Inc. into bankruptcy — Oncemotion judge made that order, priorities established by Bankruptcy and Insol-vency Act applied and rendered wind up deemed trust claims inoperative —Facts and issues in Supreme Court of Canada case differed from those of thiscase — There was no error in motion judge’s reasoning that if pension claimantswanted payments be made on wind up deficits, they would have had to havetaken steps to compel such payments.

Cases considered by E.E. Gillese J.A.:

Air Canada, Re (2003), 2003 CarswellOnt 2925, 43 C.B.R. (4th) 1, 229 D.L.R.(4th) 687, 174 O.A.C. 201, 66 O.R. (3d) 257, [2003] O.J. No. 2976 (Ont.C.A.) — followed

Bank of Montreal v. Scott Road Enterprises Ltd. (1989), 36 B.C.L.R. (2d) 118,73 C.B.R. (N.S.) 273, [1989] 4 W.W.R. 566, 57 D.L.R. (4th) 623, 1989 Car-swellBC 337, [1989] B.C.J. No. 485 (B.C. C.A.) — referred to

Canadian Airlines Corp., Re (2000), 2000 ABCA 149, 2000 CarswellAlta 503,80 Alta. L.R. (3d) 213, 19 C.B.R. (4th) 33, 261 A.R. 120, 225 W.A.C. 120,[2000] A.J. No. 610 (Alta. C.A. [In Chambers]) — considered

Grand River Enterprises v. Burnham (2005), 2005 CarswellOnt 948, 10 C.P.C.(6th) 136, (sub nom. Grand River Enterprises, A Partnership v. Burnham)197 O.A.C. 168, [2005] O.J. No. 952 (Ont. C.A.) — referred to


Grant Forest Products Inc. v. Toronto-Dominion Bank (2015), 2015 ONCA192, 2015 CarswellOnt 3726, 23 C.B.R. (6th) 214 (Ont. C.A.) — referred to

Indalex Ltd., Re (2013), 2013 SCC 6, 2013 CarswellOnt 733, 2013 CarswellOnt734, D.T.E. 2013T-97, 96 C.B.R. (5th) 171, 354 D.L.R. (4th) 581, 20P.P.S.A.C. (3d) 1, 439 N.R. 235, 301 O.A.C. 1, 8 B.L.R. (5th) 1, [2013]S.C.J. No. 6, (sub nom. Sun Indalex Finance LLC v. United Steelworkers)[2013] 1 S.C.R. 271, 2 C.C.P.B. (2nd) 1 (S.C.C.) — distinguished

Ivaco Inc., Re (2006), 2006 CarswellOnt 6292, 56 C.C.P.B. 1, 2006 C.E.B. &P.G.R. 8218, 25 C.B.R. (5th) 176, 83 O.R. (3d) 108, 275 D.L.R. (4th) 132,26 B.L.R. (4th) 43, [2006] O.J. No. 4152 (Ont. C.A.) — followed

Kaska Dena Council v. British Columbia (Attorney General) (2008), 2008BCCA 455, 2008 CarswellBC 2401, 85 B.C.L.R. (4th) 69, [2009] 1C.N.L.R. 102, 262 B.C.A.C. 75, 441 W.A.C. 75, 303 D.L.R. (4th) 144, (subnom. Kaska Dena v. British Columbia (Attorney General)) 181 C.R.R. (2d)101 (B.C. C.A.) — referred to

Quebec (Commission de la sante & de la securite du travail) c. Banque federalede developpement (1988), 84 N.R. 308, [1988] R.D.I. 376, (sub nom.Federal Business Development Bank v. Quebec (Comm. de la sante & de lasecurite du travail)) [1988] 1 S.C.R. 1061, 50 D.L.R. (4th) 577, 14 Q.A.C.140, 68 C.B.R. (N.S.) 209, 1988 CarswellQue 142, 1988 CarswellQue 31,EYB 1988-67858, [1988] S.C.J. No. 44 (S.C.C.) — referred to

Royal Bank v. Fracmaster Ltd. (1999), 1999 CarswellAlta 539, (sub nom. UTIEnergy Corp. v. Fracmaster Ltd.) 244 A.R. 93, (sub nom. UTI Energy Corp.v. Fracmaster Ltd.) 209 W.A.C. 93, 11 C.B.R. (4th) 230, [1999] A.J. No.675, 1999 ABCA 178 (Alta. C.A.) — considered

Ted Leroy Trucking Ltd., Re (2010), 2010 SCC 60, 2010 CarswellBC 3419,2010 CarswellBC 3420, 12 B.C.L.R. (5th) 1, (sub nom. Century ServicesInc. v. A.G. of Canada) 2011 D.T.C. 5006 (Eng.), (sub nom. CenturyServices Inc. v. A.G. of Canada) 2011 G.T.C. 2006 (Eng.), [2011] 2 W.W.R.383, 72 C.B.R. (5th) 170, 409 N.R. 201, (sub nom. Ted LeRoy Trucking Ltd.,Re) 326 D.L.R. (4th) 577, (sub nom. Century Services Inc. v. Canada (A.G.))[2010] 3 S.C.R. 379, [2010] G.S.T.C. 186, (sub nom. Leroy (Ted) TruckingLtd., Re) 296 B.C.A.C. 1, (sub nom. Leroy (Ted) Trucking Ltd., Re) 503W.A.C. 1 (S.C.C.) — followed

Statutes considered:

Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36Generally — referred to

Financial Services Commission of Ontario Act, 1997, S.O. 1997, c. 28Generally — referred to

Pension Benefits Act, R.S.O. 1990, c. P.8Generally — referred tos. 57(3) — considereds. 57(4) — considered

Grant Forest Products v. Toronto-Dominion Bank E.E. Gillese J.A. 181

Personal Property Security Act, R.S.O. 1990, c. P.10s. 30(7) — considered

APPEAL by Ontario Superintendent of Financial Services from judgment re-ported at Grant Forest Products Inc. v. GE Canada Leasing Services Co.(2013), 2013 ONSC 5933, 2013 CarswellOnt 14057, 6 C.B.R. (6th) 1, 93 E.T.R.(3d) 15, 7 C.C.P.B. (2nd) 239 (Ont. S.C.J. [Commercial List]), granting securedcreditor’s motion to lift stay and order debtor companies into bankruptcy.

Mark Bailey, Deborah McPhail for Appellant, Superintendent of FinancialServices

Jane Dietrich for Respondents, Grant Forest Products Inc., Grant Alberta Inc.,Grant Forest Products Sales Inc., and Grant U.S. Holdings GP

John Marshall, Roger Jaipargas for Respondent, West Face Capital Inc.Alex Cobb for Respondent, Mercer (Canada) LimitedDavid Byers, Dan Murdoch for Respondent, Ernst & Young Inc.Andrew J. Hatnay, James Harnum, Adrian Scotchmer for Intervener, Court-ap-

pointed Representative Counsel to non-union active employees and retireesof U.S. Steel Canada Inc. in its CCAA proceedings

E.E. Gillese J.A.:

Overview1 The debtor companies in this case obtained protection under the Com-

panies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (the “CCAA”)and entered into a liquidation process. After selling their assets and pay-ing out the first lien lenders in full, there were insufficient funds to sat-isfy the claims of the second lien lenders and the claims asserted on be-half of two of the debtor companies’ pension plans. A contest ensuedbetween one of the secured creditors and the pension claimants.

2 The CCAA judge ordered the remaining debtor companies into bank-ruptcy, thereby resolving the contest in favour of the secured creditor.

3 Ontario’s Superintendent of Financial Services (the “Superinten-dent”) appeals.

4 During the CCAA proceeding, the Superintendent made wind up or-ders in respect of the two pension plans. He contends that a deemed trustarose on wind up of each plan (the “wind up deemed trust”). He says thatthose wind up deemed trusts, which encompass all unpaid contributions,took priority over the claims of the secured creditors because the remain-ing funds are the proceeds of sale of the debtor companies’ accounts andinventory.


5 The basis for the Superintendent’s position is a combination of ss.57(3) and (4) of the Pension Benefits Act, R.S.O. 1990, c. P.8 (“PBA”)and s. 30(7) of the Personal Property Security Act, R.S.O. 1990, c. P.10(“PPSA”).

6 Sections 57(3) and (4) of the PBA read as follows: 57 (3) An employer who is required to pay contributions to a pensionfund shall be deemed to hold in trust for the beneficiaries of the pen-sion plan an amount of money equal to the employer contributionsdue and not paid into the pension fund.

57 (4) Where a pension plan is wound up in whole or in part, anemployer who is required to pay contributions to the pension fundshall be deemed to hold in trust for the beneficiaries of the pensionplan an amount of money equal to employer contributions accrued tothe date of the wind up but not yet due under the plan or regulations.

7 The priority of the PBA deemed trusts is established by s. 30(7) of thePPSA. Section 30(7) reverses the first-in-time principle for certain assetsand gives the beneficiaries of the deemed trusts priority over an accountor inventory and its proceeds. Section 30(7) states:

30 (7) A security interest in an account or inventory and its proceedsis subordinate to the interest of a person who is the beneficiary of adeemed trust arising under the Employment Standards Act or underthe Pension Benefits Act.

8 The Superintendent contends that the decision below is wrong be-cause, among other things, he says that it is inconsistent with the Su-preme Court of Canada’s recent decision in Indalex Ltd., Re, 2013 SCC6, [2013] 1 S.C.R. 271 (S.C.C.).

9 For the reasons that follow, I would dismiss the appeal.

The Cast of Characters10 Grant Forest Products Inc. (“GFPI”) and certain of its subsidiaries

carried on an oriented strand board manufacturing business from facili-ties in Ontario, Alberta and the United States. At the beginning of theseproceedings, GFPI and its subsidiaries were the third largest such manu-facturer in North America.

11 GFPI and related companies (the “Applicants”) brought an applica-tion for protection from creditors under the CCAA (the CCAA Proceed-ing”). Following the sale of certain assets, the CCAA Proceeding wasterminated in relation to some of the Applicants. GFPI, Grant Forest


Products Sales Inc. and Grant Alberta Inc. are the “Remaining Appli-cants” in the CCAA Proceeding.

12 Mercer (Canada) Ltd. is the administrator of the two pension plans inquestion in the CCAA Proceeding (the “Administrator”). Mercer re-placed PricewaterhouseCoopers Inc. as administrator in August 2013.

13 Stonecrest Capital Inc. was appointed the chief restructuring organi-zation (the “CRO”) by court order dated June 25, 2009.

14 Ernst & Young Inc. was appointed the monitor (the “Monitor”) bycourt order dated June 25, 2009.

15 The “First Lien Lenders” are the first-ranking secured creditors in theCCAA Proceeding. Following the sale of assets during the CCAA Pro-ceeding, distributions were made and the First Lien Lenders were paid infull.

16 The “Second Lien Lenders” are secured creditors ranking behind theFirst Lien Lenders, and are collectively owed approximately $150million.

17 The Bank of New York Mellon served as agent for the Second LienLenders in these proceedings (the “Second Lien Lenders’ Agent”).

18 The Superintendent is the regulator of pension plans under the PBAand the Financial Services Commission of Ontario Act, 1997, S.O. 1997,c. 28. He is also the administrator of the pension benefits guarantee fundunder the PBA, which partially insures pension benefits in certaincircumstances.

19 West Face Long Term Opportunities Limited Partnership, West FaceLong Term Opportunities (USA) Limited Partnership, West Face LongTerm Opportunities Master Fund L.P. and West Face Long Term Oppor-tunities Global Master L.P. (collectively, “West Face”), are parties to theSecond Lien Credit Agreement with the Remaining Applicants. The Sec-ond Lien Lenders (including West Face) are currently the highest rankingsecured creditors. West Face is owed approximately $31 million.

20 Shortly after the oral hearing of this appeal, the court-appointed rep-resentative counsel to non-union active and retired employees of UnitedStates Steel Canada Inc. (“USSC”) in USSC’s unrelated proceedingsunder the CCAA (the “Intervener”) sought leave to intervene. The Inter-vener wished to have the opportunity to make submissions on the issuesraised in this appeal from the perspective of retirees and pension benefi-ciaries. Approximately 6,000 affected employees and retirees of USSCare subject to the representation order.


21 By endorsement dated March 19, 2015, this court granted the Inter-vener leave to intervene as a friend of the court: Grant Forest ProductsInc. v. Toronto-Dominion Bank, 2015 ONCA 192 (Ont. C.A.). Under theterms of that endorsement, the Intervener was limited to addressing onlythose issues already raised on the appeal and to the existing record.

Background in Brief

Sale of the Applicants’ Assets22 On March 19, 2009, GE Canada Leasing Services Company applied

for a bankruptcy order against GFPI under the Bankruptcy and Insol-vency Act, R.S.C. 1985, c. B-3 (“BIA”). In response, the Applicantssought protection under the CCAA through the CCAA Proceeding.

23 The court gave that protection by order dated June 25, 2009 (the “Ini-tial Order”). The Initial Order also stayed the bankruptcy applicationagainst GFPI and approved a marketing process designed to locate poten-tial investors to purchase, as a going concern, the Applicants’ businessand operations. Consequently, the CCAA Proceeding proceeded as a liq-uidation, rather than as a restructuring.

24 In the CCAA Proceeding, no order was made authorizing a debtor-in-possession financing or other “super priority” lending arrangement.

25 GFPI’s assets were sold in a number of transactions that closed be-tween May 26, 2010 and November 7, 2012.

26 GFPI and certain of its subsidiaries sold the large majority of theircore operating assets to Georgia Pacific LLC and certain of its affiliates(“Georgia Pacific”). The sale to Georgia Pacific was court approved onMarch 30, 2010, and closed on May 26, 2010. On sale, Georgia Pacificassumed the Pension Plan for Hourly Employees of Grant Forest Prod-ucts Inc. - Englehart Plan, which was the pension plan associated withthe assets it had purchased.

27 Other than the assets sold to Georgia Pacific, GFPI’s only other sig-nificant operating asset was a 50% interest in a mill in Alberta. The saleof that interest was approved by court order on January 5, 2011, andclosed on February 17, 2011. Additional assets were sold over the fol-lowing two years, with the final sale closing on November 7, 2012.

28 Each sale was court approved and subject to the standard provisionthat all encumbrances and claims which applied to the assets prior to thesale applied to the sale proceeds with the same priority.


29 The court made distribution orders that resulted in the First LienLenders being paid in full in January of 2012.

30 A distribution of $6 million was made to the Second Lien Lenders.Approximately $150 million remains owing to those lenders under theSecond Lien Credit Agreement. Of that amount, West Face is owed ap-proximately $31 million.

31 As of February 1, 2013, GFPI held cash of approximately US$2.1million and the Monitor held cash of approximately $6.6 million andUS$0.3 million (the “Remaining Funds”).

The Pension Plans32 GFPI was the employer, sponsor and administrator of four pension

plans. The two plans of significance in this appeal are (1) the PensionPlan for Salaried Employees of GFPI - Timmins Plant (the “SalariedPlan”) and (2) the Pension Plan for Executive Employees of GFPI (the“Executive Plan”) (together, the “Plans”).

33 Both of the Plans are defined benefit pension plans under the PBA.34 The Initial Order provided that the Applicants were “entitled but not

required” to pay “all outstanding and future ... pension contributions ...incurred in the ordinary course of business”.

35 On August 26, 2011, the “Timmins Pension Plan Order” was made.This order authorized GFPI to take steps to initiate the wind up of theSalaried Plan and to work with the Superintendent to appoint a replace-ment plan administrator for the Salaried Plan. This order also directed theMonitor to hold back approximately $191,000 from any distribution tocreditors. The holdback was thought to be sufficient to satisfy the antici-pated wind up deficit of the Salaried Plan. The Timmins Pension PlanOrder expressly provided that nothing in it “affects or determines the pri-ority or security of the claims” against the holdback.

36 A similar order was made in respect of the Executive Plan on Sep-tember 21, 2011. However, the hold back amount in respect of the Exec-utive Plan was $2,185,000.

37 The Administrator recommended that the Plans be wound up and onFebruary 27, 2012, the Superintendent ordered the Plans wound up (the“Superintendent’s Wind Up Orders”). Under those orders, the effectivedate of wind up for the Executive Plan is June 10, 2010, and for theSalaried Plan it is March 31, 2011.


38 As will become apparent, it is significant that the Plans were orderedto be wound up after the CCAA Proceeding commenced.

The Pension Motion39 GFPI continued to make all required contributions to the Plans (both

current service and special payments) until June 2012. However, on June8, 2012, the Remaining Applicants brought a motion seeking an orderdeclaring that none of GFPI, the CRO or the Monitor were required tomake further contributions to the Plans (the “Pension Motion”). Thegrounds for the motion included that there was uncertainty relating to thepriority of amounts owing in respect of the wind up deficits in the Plansand it was possible that Indalex, which was then before the SupremeCourt, might have an impact on that matter.

40 When the wind up reports showed that the estimated deficits in thePlans had increased, by order dated June 25, 2012, the hold back for theSalaried Plan was increased from approximately $191,000 to $726,372and for the Executive Plan from approximately $2.185 million to$2,384,688 (collectively, the “Reserve Funds”).

41 The Pension Motion was originally returnable on June 25, 2012.However, it was adjourned several times.

42 On the first return date, acting on his own motion, the CCAA judgeadjourned the Pension Motion and directed that further notice be given tothe Second Lien Lenders. By endorsement dated June 25, 2012, a term ofthe adjournment was that no further payments were to be made to thePlans.1

43 It should be noted that several weeks prior, on March 19, 2012, coun-sel for the Second Lien Lenders’ Agent sent an email to all those on theService List saying that it no longer represented the Agent and asking tobe removed from the Service List.

44 On August 8, 2012, the Remaining Applicants served a notice of re-turn of the Pension Motion for August 27, 2012.

45 On August 27, 2012, again on his own motion and over the objectionsof the pension claimants, the CCAA judge adjourned the Pension Motion

1 Although the wording of the endorsement is somewhat unclear, it appears thatall parties proceeded on that basis. The relevant part of the endorsement states:“I am satisfied that GFPI, CRO and the monitor hold funds that may otherwisebe due under the pension plans pending notice to second lien creditors ...”


to a date to be determined at a comeback hearing to be held prior to theend of September 2012. He also directed the Monitor to provide addi-tional communication to the Second Lien Lenders and to seek their posi-tions on the Pension Motion.

46 By letter dated August 31, 2012, the Monitor advised the Second LienLenders’ Agent that the Pension Motion had been adjourned at the hear-ing on August 27 and requested a conference call with, among others, thevarious Second Lien Lenders, to determine what positions they wouldtake on the Pension Motion.

47 The conference call took place on September 5, 2012. West Face didnot participate in it. The two Second Lien Lenders that did attend on thecall indicated that they supported the Pension Motion.

48 On September 17, 2012, the Pension Motion was scheduled to beheard on October 22, 2012.

49 On September 21, 2012, the Monitor sent the Second Lien Lenders’Agent a letter advising that the Pension Motion would be heard on Octo-ber 22, 2012. In the letter, the Monitor also indicated that any SecondLien Lender that wished to make its position on the Pension Motionknown should contact the Monitor.

50 When West Face became aware that the Second Lien Lenders’ Agentwould not be able to obtain timely instructions in respect of the PensionMotion, it retained its own counsel to respond to the Pension Motion.

51 By letter dated October 12, 2012, West Face advised the Monitor thatit would support the Pension Motion.

52 West Face served a notice of appearance in the CCAA Proceeding onOctober 19, 2012. It sought an adjournment of the October 22, 2012hearing date but the Administrator opposed the adjournment request.

The Bankruptcy Motion53 By notice of motion dated October 21, 2012, West Face then brought

a motion returnable on October 22, 2012, seeking to be substituted forGE Canada Leasing Services Company in the outstanding bankruptcyapplication issued against GFPI. Alternatively, it sought to have the courtlift the stay of proceedings in the CCAA Proceeding and permit it topetition the Remaining Applicants into bankruptcy (the “BankruptcyMotion”).


54 On October 22, 2012, it was submitted2 that the Bankruptcy Motionshould be adjourned but that the Pension Motion should be argued. TheCCAA judge adjourned both motions (together, the “Motions”), how-ever, citing the close relationship between the two. The adjournment con-tinued the terms of the adjournment of the Pension Motion on June 25,2012.

The Motions are Heard55 The first round of oral submissions on the Motions was heard on No-

vember 27, 2012. The CCAA judge reserved his decision.56 The Supreme Court released its decision in Indalex on February 1,

2013.57 On February 6, 2013, the CCAA judge identified certain additional

issues to be dealt with on the Motions and directed the parties to makewritten submissions on them.

58 A further oral hearing on the Motions took place on July 23, 2013.

The Transition Order59 The CCAA judge dealt with the Motions by order dated September

20, 2013 (the “Transition Order”). Among other things, in the TransitionOrder, the court ordered that:

1. none of the funds held by GFPI or the Monitor are subjectto a deemed trust pursuant to ss. 57(3) and (4) of the PBA;

2. none of GFPI, the CRO or the Monitor shall make any fur-ther payments to the Plans; and

3. GFPI and each of the other Remaining Applicants are ad-judged bankrupt and ordered into bankruptcy.

60 In short, the Transition Order resolved the priority contest betweenthe pensioners and West Face in favour of West Face.

The Appeal61 The Superintendent then sought and obtained leave to appeal to this

court.

2 The record is unclear as to which party or parties made this submission.


The Decision Below62 In his reasons for decision, the CCAA judge observed that through

the CCAA Proceeding, the Applicants’ assets had been sold in a way thatprovided the maximum benefit to the widest group of stakeholders.Moreover, some of the assets were sold on a going concern basis, whichprovided continued employment and benefits for many. The alternativeto the CCAA Proceeding was a bankruptcy proceeding, which mightwell have resulted in a greater loss of employment and a lower level ofrecovery for secured creditors.

63 The CCAA judge then found that the Remaining Funds were not sub-ject to wind up deemed trusts.

64 The Superintendent and the Administrator had submitted that, not-withstanding the Initial Order, the wind up deemed trusts should prevailover other creditors’ claims.

65 In rejecting this submission, the CCAA judge stated that a wind updeemed trust will prevail when wind up occurs before insolvency but notwhen a wind up is ordered after the Initial Order is granted. He said thatthis approach provides predictability and certainty for the stakeholders ofthe insolvent company and enables secured creditors to decide whetherthey are willing to pursue a plan of compromise or immediately apply fora bankruptcy order.

66 The CCAA judge relied on the Supreme Court’s decision in In-dalex for the proposition that provincial statutory provisions in the pen-sion area prevail prior to insolvency but once the federal statute is in-volved, the insolvency regime applies.

67 The CCAA judge also rejected the argument that the CCAA court, inauthorizing the wind up of the Plans, had given the wind up deemedtrusts priority in the insolvency regime. He noted that the orders author-izing the wind ups explicitly state that they do not affect or determine thepriority or security of the claims against those funds, and the orders saynothing in respect of the deemed trust issue.

68 The CCAA judge opined that, on the basis of this analysis, a lifting ofthe stay was not necessary to defeat the wind up deemed trusts said tohave arisen after the Initial Order.

69 The CCAA judge then observed that the issue of whether to terminatea CCAA proceeding and permit a petition in bankruptcy to proceed is adiscretionary matter. In the absence of provisions in a plan of compro-mise under the CCAA or a specific court order, any creditor is at liberty


to request that the CCAA proceedings be terminated if its position mightbetter be advanced under the BIA. The question was whether it was fairand reasonable, bearing in mind the interests of all creditors, that the in-terests of the creditor seeking preference under the BIA should be al-lowed to proceed.

70 The CCAA judge found that there was no evidence of a lack of goodfaith on the part of West Face in seeking to lift the stay, beyond the alle-gations relating to delay. He went on to reject the argument based onWest Face’s alleged delay in bringing the Bankruptcy Motion, sayingthat no party had been prejudiced by the delay.

71 West Face argued that its interests should prevail because otherwise awind up deemed trust that did not exist at the time of the Initial Orderwould de facto be given priority and that would be contrary to the priori-ties established under the BIA. The CCAA judge accepted this submis-sion. He said that in Indalex, the Supreme Court limited the wind updeemed trust to obligations arising prior to insolvency and to deny WestFace the relief it sought would be at odds with that reasoning.

72 Accordingly, the CCAA judge concluded, the monies held by theMonitor should not be applied to the Plans.

A Summary of the Parties’ Positions On Appeal

The Superintendent73 The Superintendent submits that the CCAA judge erred in concluding

that no wind up deemed trusts arose during the CCAA Proceeding. Hecontends that where a pension plan is wound up after an initial order ismade under the CCAA, but before distribution is complete, unpaid con-tributions to the pension plan constitute a wind up deemed trust under thePBA. In this case, he says, the wind up deemed trusts arose during theCCAA Proceeding and took priority over other creditors’ claims. Thosedeemed trusts were not rendered inoperative by the doctrine of federalparamountcy because there was no debtor-in-possession loan or charge.

74 The Superintendent further submits that because of the proceduralhistory of this matter, the CCAA judge should have required payment ofthe full wind up deficits prior to lifting the stay to permit the bankruptcyapplication. He says that the CCAA judge adjourned the Pension Motionto provide further notice to the Second Lien Lenders when additionalnotice was not required because the Second Lien Lenders had receivedsufficient notice. Further, he contends, the adjournments were prejudicial


to the pension claimants because if the CCAA judge had considered thePension Motion in a timely manner, there would have been no basis onwhich to relieve against pension plan contributions.

75 The Superintendent also submits that the CCAA judge erred in con-cluding that it was necessary for the pension claimants to have opposedthe Initial Order and the sale and vesting orders made during the CCAAProceeding in order to assert the wind up deemed trusts.

The Administrator76 The Administrator supports the Superintendent and adopts his sub-

missions. It offers the following additional reasons in support of theappeal.

77 First, the Administrator says that the CCAA judge erred by failing toanswer the question posed by the Pension Motion, namely, whether GFPIshould be relieved from making further payments into the Plans. It sub-mits that the test GFPI had to meet to obtain such relief is: could GFPImake the required payments without jeopardizing the restructuring? In-stead of answering that question, the Administrator says that the CCAAjudge asked and answered this question: can a wind up deemed trust becreated during the pendency of a stay of proceedings? The Administratorcontends that the CCAA judge erred in recasting the Pension Motion inthis way because the creation of a wind up deemed trust and the obliga-tion to make special payments are two separate concepts. It submits thatthe existence of a deemed trust has no bearing on whether a CCAA courtshould grant a debtor relief from the obligation to make special pensionpayments.

78 Second, the Administrator submits, contrary to the CCAA judge’sfinding, where a wind up deemed trust arises before, and has an effectivedate before, the date of a court-approved distribution to creditors, the pri-ority of that deemed trust must be considered before a distribution isapproved.

79 Third, the Administrator submits that the wind up deemed trust is notrendered inoperative in a CCAA proceeding unless the operation of thewind up deemed trust conflicts with a specific provision in the CCAA oran order issued under the CCAA. The Administrator says that, in the pre-sent case, there is no CCAA provision or order that conflicts with thewind up deemed trust. Therefore, those trusts operate and have prioritypursuant to s. 30(7) of the PPSA.


80 Fourth, the Administrator submits that because bankruptcy is not theinevitable result of a liquidating CCAA proceeding, the CCAA judge hadto consider the totality of the circumstances, including West Face’slengthy delay in bringing the Bankruptcy Motion, when ordering GFPIinto bankruptcy. It says that West Face did not satisfy its onus to havethe stay lifted but, even if it did, the Bankruptcy Motion should havebeen granted on condition that the outstanding amounts owed to thePlans were paid prior to the bankruptcy taking effect.

81 Finally, the Administrator says that the CCAA judge erred by requir-ing the Superintendent and it to challenge all orders made in the CCAAProceeding had they wished to assert the priority of the wind up deemedtrusts.

The Remaining Applicants82 The Remaining Applicants take no position on the issues raised by

the Superintendent. However, if the appeal is successful, they ask that thecourt affirm that paras. 1-6 of the Transition Order remain operative.Those paragraphs can be found in Schedule A to these reasons.

West Face83 West Face maintains that the core issue to be decided on this appeal is

whether it was necessary or appropriate for the pension claims to be paidas a “pre-condition” to ordering GFPI into bankruptcy. It says that if thiscourt accepts that the CCAA judge made no error in ordering GFPI intobankruptcy, without first requiring payment of the pension claims, theissues raised by the Superintendent are moot.

84 West Face further submits that the doctrine of federal paramountcyputs an end to the wind up deemed trust claims. Bankruptcy proceedingsare the appropriate forum to resolve wind up deemed trust claims at theclose of CCAA proceedings. It would have been improper for the CCAAjudge to order payment of the wind up deemed trust deficits before put-ting GFPI into bankruptcy, as such an order would have usurped Parlia-ment’s bankruptcy regime.

The Monitor85 Because the Bankruptcy Motion was primarily a priority dispute be-

tween two creditor groups, the Monitor took no position on that motionand it takes no position on that issue in this appeal.


86 However, the Monitor notes that in making the Transition Order, theCCAA judge addressed issues relating to the existence and potential pri-ority of a wind up deemed trust in the CCAA context. Given the rele-vance of those issues to other insolvency proceedings, the Monitor madethe following submissions:

1. the main question giving rise to the Transition Order waswhether it was appropriate to lift the stay and order GFPIinto bankruptcy;

2. wind up deemed trusts are not created during the pendencyof a CCAA proceeding;

3. if wind up deemed trusts did arise during this CCAA Pro-ceeding, because the Superintendent’s Wind Up Orderswere made after the Initial Order, the earliest date on whichthose deemed trusts could be effective was February 27,2012, the date of the Superintendent’s Wind Up Orders;and

4. the CCAA judge did not suggest that the pension claimantswere obliged to take steps earlier in the CCAA Proceedingto assert the priority of their wind up deemed trust claims.While the CCAA judge did state that the pension claimantswere required to obtain an order lifting the stay for a windup deemed trust to be created, that was because the windingup of a pension plan is outside of the ordinary course ofbusiness and the Initial Order permitted payments of pen-sion contributions only in “the ordinary course ofbusiness”.

The Intervener87 The Intervener’s position is that:

1. a pension plan does not have to be wound up as of theCCAA filing date for the wind up deemed trust to beeffective;

2. the beneficiaries of the wind up deemed trust have priorityin CCAA proceedings ahead of all other secured creditorsover certain assets;

3. an initial CCAA order does not operate to invalidate thewind up deemed trust regime; and


4. the CCAA judge erred in granting the Bankruptcy Motion,which was brought to defeat the wind up deemed trust pri-ority regime.

The Issues88 The parties do not agree on what issues are raised on this appeal. A

comparison of the issues as articulated by each of the Superintendent andWest Face demonstrates this.

89 The Superintendent says that the following three issues are to be de-termined in this appeal:

1. do unpaid contributions related to a pension plan that iswound up after the initial order in a CCAA proceeding con-stitute a deemed trust under the PBA?

2. if such unpaid contributions constitute a deemed trust underthe PBA, what is the priority of the deemed trust wherethere is no debtor in possession loan?

3. what actions must pension creditors take to assert thedeemed trust under the PBA in a CCAA proceeding, bothbefore and after the deemed trust arises?

90 West Face, on the other hand, says that there is but one issue for de-termination: did the pension claims have to be paid as a precondition toan order to put GFPI into bankruptcy at the end of the CCAAProceeding?

91 In these circumstances, it falls to the court to determine what issuesmust be addressed in order to resolve this appeal.

92 To do this, I begin by noting two things. First, in appeals of this sort,the role of this court is to correct errors. Put another way, its overridingtask is to determine whether the result below is correct. It is not the roleof this court to provide advisory opinions on abstract or hypotheticalquestions: Kaska Dena Council v. British Columbia (Attorney General),2008 BCCA 455, 85 B.C.L.R. (4th) 69 (B.C. C.A.), at para. 12. Second,an appeal lies from an order or judgment and not from the reasons fordecision which underlie that order or judgment: Grand River Enterprisesv. Burnham (2005), 197 O.A.C. 168 (Ont. C.A.), at para. 10.

93 With these parameters in mind, it appears to me that the questionwhich must be answered to decide this appeal and resolve the disputebetween the parties is: did the CCAA judge err in lifting the stay andordering the Remaining Applicants into bankruptcy without first requir-


ing that the wind up deemed trusts deficits be paid in priority to the Sec-ond Lien Lenders?

94 To answer that question, I must address the following issues:

1. what standard of review applies to the CCAA judge’s deci-sion to lift the CCAA stay of proceedings and order the Re-maining Applicants into bankruptcy?

2. did the CCAA judge make a procedural error in his treat-ment of the Pension Motion? and

3. did the CCAA judge err in principle, or act unreasonably,in lifting the stay and ordering the Remaining Applicantsinto bankruptcy?

The Standard of Review95 The Superintendent submits that the standard of review of a decision

made under the CCAA is correctness with respect to errors of law, andpalpable and overriding error with respect to the exercise of discretion orfindings of fact. As authority for this submission, the Superintendent re-lies on Canadian Airlines Corp., Re, 2000 ABCA 149, 261 A.R. 120(Alta. C.A. [In Chambers]), at para. 29.

96 I would not accept this submission for two reasons.97 First, in articulating this standard of review, Resurgence purported to

follow Royal Bank v. Fracmaster Ltd., 244 A.R. 93, 1999 ABCA 178(Alta. C.A.). However, UTI does not set out the standard of review in theterms expressed by Resurgence. At para. 3 of UTI, the Alberta Court ofAppeal states that discretionary decisions made under the CCAA “areowed considerable deference” and appellate courts should intervene onlyif the CCAA judge “acted unreasonably, erred in principle, or made amanifest error”.

98 Second, the applicable standard of review has been established bytwo decisions of this court: Air Canada, Re (2003), 66 O.R. (3d) 257(Ont. C.A.) and Ivaco Inc., Re (2006), 83 O.R. (3d) 108 (Ont. C.A.). InAir Canada, at para. 25, this court states that deference is owed to discre-tionary decisions of the CCAA judge. In Ivaco Inc., Re (2006), 83 O.R.(3d) 108 (Ont. C.A.), at para. 71, this court reiterated that point and ad-ded that appellate intervention is justified only if the CCAA judge erredin principle or exercised his or her discretion unreasonably.

99 The decision to lift the stay and order the Remaining Applicants intobankruptcy was a discretionary decision: Ivaco, at para. 70. Therefore,


the question becomes, did the CCAA judge err in principle or exercisehis discretion unreasonably in so doing?

100 Before turning to this question, I will consider whether the CCAAjudge made a procedural error in the process leading up to the making ofthe Transition Order.

Did the CCAA Judge Make a Procedural Error?101 The procedural complaint levied against the CCAA judge is based on

his having adjourned the Pension Motion on more than one occasion, onhis own motion, so that additional notice could be given to the SecondLien Lenders. The Superintendent says that additional notice was not re-quired because the Second Lien Lenders had been given sufficient noticeand the resulting delay in having the Pension Motion heard causedprejudice to the pension claimants.

102 I would not accept this submission. Considered in context, I do notview the CCAA judge as having acted improperly in adjourning the Pen-sion Motion on his own motion.

103 It is important to begin this analysis by reminding ourselves of therole played by the CCAA judge in a CCAA proceeding. Paragraphs 57-60 of Ted Leroy Trucking Ltd., Re, (sub nom. Century Services Inc. v.A.G. of Canada) 2010 SCC 60, [2010] 3 S.C.R. 379 (S.C.C.) are instruc-tive in this regard. From those paragraphs, we see that the role of theCCAA judge is more than to simply decide the motions placed beforehim or her. The CCAA is skeletal in nature. It gives the CCAA judgebroad discretionary powers that are to be exercised in furtherance of theCCAA’s purposes. The CCAA judge must “provide the conditions underwhich the debtor can attempt to reorganize” (para. 60). This includes su-pervising the process and advancing it to the point where it can be deter-mined whether reorganization will succeed. In performing these tasks,the CCAA judge “must be cognizant of the various interests at stake inthe reorganization, which can extend beyond those of the debtor andcreditors” (para. 60).

104 Century Services, it can be seen, makes it clear that the CCAA judgein the present CCAA Proceeding had to “be cognizant” of the interests ofthe Second Lien Lenders, as well as those of the moving parties and thepension claimants.

105 It would have been apparent to the CCAA judge that the Pension Mo-tion had the potential to adversely affect the interests of the Second LienLenders. At the time that the Pension Motion was brought, the Appli-


cants’ assets had been sold and only limited funds were left for distribu-tion. Those funds were clearly insufficient to meet the claims of both theSecond Lien Lenders and the pension claimants. It will be recalled thatby means of the motion, GFPI, the CRO and the Monitor sought to berelieved of any obligation to continue making contributions into thePlans. The Pension Motion was vigorously opposed. Had the CCAAjudge refused to grant the Pension Motion and contributions continued tobe made to the Plans, the Second Lien Lenders would have beenprejudiced because there would have been even fewer funds available tosatisfy their claims.

106 The CCAA judge was also aware that in March 2012 — some threemonths before the Pension Motion was brought — counsel for the Sec-ond Lien Lenders’ Agent had given notice that it was to be removedfrom the service list because it no longer represented the Second LienLenders’ Agent.

107 Despite service of the Pension Motion on the Second Lien Lenders’Agent and on the Second Lien Lenders, in these circumstances, it is un-derstandable that the CCAA judge had concerns about the adequacy ofnotice to the Second Lien Lenders.

108 That this concern drove the adjournments is apparent from the CCAAjudge’s direction to the Monitor on August 27, 2012, to provide addi-tional communication to the Second Lien Lenders themselves, not theAgent. (The Monitor followed those directions, holding a conference calldirectly with the Second Lien Lenders themselves.)

109 In these circumstances, I do not accept that the adjournments of thePension Motion amounted to procedural unfairness. Rather, the adjourn-ments are consonant with the Supreme Court’s dictates in Century Ser-vices, described above.

Did the CCAA Judge Err in Principle or Act Unreasonably in Liftingthe Stay and Ordering the Remaining Applicants into Bankruptcy?

110 In general terms, I see no error in the CCAA judge’s exercise of dis-cretion to lift the CCAA stay and order the Remaining Applicants intobankruptcy.

111 At the time the Motions were heard, GFPI had long since ceased op-erating, its assets had been sold, and the bulk of the sale proceeds hadbeen distributed. It was a liquidating CCAA with nothing left to liqui-date. Nor was there anything left to reorganise or restructure. All thatwas left was to distribute the Remaining Funds and it was clear that those


funds were insufficient to meet the claims of both the Second Lien Lend-ers and the pension claimants.

112 In those circumstances, the breadth of the CCAA judge’s discretionwas sufficient to “construct a bridge” to the BIA — that is, he had thediscretion to lift the stay and order the Remaining Applicants into bank-ruptcy. Although this was not a situation in which creditors had rejecteda proposal, the reasoning of the Supreme Court at paras. 78 and 80 ofCentury Services applied:

... The transition from the CCAA to the BIA may require the partiallifting of a stay of proceedings under the CCAA to allow commence-ment of the BIA proceedings. However, as Laskin J.A. for the On-tario Court of Appeal noted in a similar competition between securedcreditors and the [Superintendent] seeking to enforce a deemed trust,“[t]he two statutes are related” and no “gap” exists between the twostatutes that would allow the enforcement of property interests at theconclusion of CCAA proceedings that would be lost in bankruptcy(Ivaco, at paras. 62-63). [Citation excluded.]

. . .

[T]he comprehensive and exhaustive mechanism under the BIA mustcontrol the distribution of the debtor’s assets once liquidation is inev-itable. Indeed, an orderly transition to liquidation is mandatory underthe BIA where a proposal is rejected by creditors. The CCAA is silenton the transition into liquidation but the breadth of the court’s discre-tion under the Act is sufficient to construct a bridge to liquidationunder the BIA. The court must do so in a manner that does not sub-vert the scheme of distribution under the BIA. Transition to liquida-tion requires partially lifting the CCAA stay to commence proceed-ings under the BIA. This necessary partial lifting of the stay shouldnot trigger a race to the courthouse in an effort to obtain priority un-available under the BIA. [Emphasis added.]

113 Consequently, the question for this court is whether the CCAA judgeerred in principle, or exercised his discretion unreasonably, by lifting thestay and ordering the Remaining Applicants into bankruptcy.

114 The various complaints levied against the CCAA judge’s exercise ofdiscretion can be summarized as raising the following questions. Did themotion judge err in:

1. failing to properly take into consideration West Face’s con-duct in bringing the Bankruptcy Motion?


2. failing to recognize, and require payment of, the wind updeemed trusts that arose during the CCAA Proceedingbefore ordering GFPI into bankruptcy?

3. wrongly considering that the pension claimants had to takecertain steps earlier in the CCAA Proceeding in order tosuccessfully assert their claims? and

4. failing to consider the question posed by the Pension Mo-tion, namely, whether GFPI, the CRO and the Monitorshould be relieved from making further payments into thePlans?

1. West Face’s Conduct115 Two complaints are levied about West Face’s conduct. The first is

that West Face delayed in bringing the Bankruptcy Motion and the sec-ond is that West Face brought that motion to defeat the wind up deemedtrust regime.

116 Even if delay is a relevant consideration when considering WestFace’s conduct, I do not accept that West Face failed to bring the Bank-ruptcy Motion in a timely manner. The Pension Motion was brought onJune 8, 2012, and originally returnable on June 25, 2012. Although inMarch 2012, West Face had been served with notice that counsel for theSecond Lien Lenders’ Agent no longer represented the Agent, the recordis not clear on when West Face discovered that the Agent could not ob-tain timely instructions from the Second Lien Lenders in respect of thePension Motion. From the record, it appears that West Face actedpromptly upon discovering that fact. West Face retained its own counselon October 19, 2012, served a notice of appearance that same day andbrought the Bankruptcy Motion on October 21, 2012, returnable on Oc-tober 22, 2012.

117 In the circumstances, I do not view West Face as having been dilatoryin the bringing of the Bankruptcy Motion.

118 As for the submission that the Bankruptcy Motion was brought to de-feat the wind up deemed trust priority regime, assuming that to havebeen West Face’s motivation, it does not disentitle West Face from beinggranted the relief it sought in the Bankruptcy Motion. A creditor mayseek a bankruptcy order under the BIA to alter priorities in its favour: seeQuebec (Commission de la sante & de la securite du travail) c. Banquefederale de developpement, [1988] 1 S.C.R. 1061 (S.C.C.), at p. 1072;


Bank of Montreal v. Scott Road Enterprises Ltd. (1989), 57 D.L.R. (4th)623 (B.C. C.A.), at pp. 627, 630-31; and Ivaco, at para. 76.

2. The Wind up Deemed Trusts119 The Superintendent (joined by the Administrator and the Intervener)

makes two submissions as to why the CCAA judge erred in failing toorder payment of the wind up deemed trusts deficits before ordering theRemaining Applicants into bankruptcy. First, he submits that, unlikebankruptcy where PBA deemed trusts are inoperative, the wind updeemed trusts in this case were not rendered inoperative because they didnot conflict with a provision of the CCAA or an order made under theCCAA (for example, an order establishing a debtor-in-possessioncharge). Second, he contends that Indalex requires that the wind updeemed trusts be given priority in this case.

120 I would not accept either submission.

Federal Paramountcy121 In my view, the first submission misses a crucial point: federal para-

mountcy in this case is based on the BIA.122 As I have explained, at the time that the Motions were heard, it was

open to the CCAA judge to order the Remaining Applicants into bank-ruptcy. Once the CCAA judge exercised his discretion and made that or-der, the priorities established by the BIA applied to the Remaining Fundsand rendered the wind up deemed trust claims inoperative.

123 Because wind up deemed trusts are created by provincial legislation,their payment could not be ordered when the Motions were heard be-cause payment would have had the effect of frustrating the priorities es-tablished by the federal law of bankruptcy. A provincial statute cannotalter priorities within the federal scheme nor can it be used in a mannerthat subverts the scheme of distribution under the BIA: Century Services,at para. 80.

Indalex124 As for the second submission, in my view, Indalex does not assist in

the resolution of the priority dispute in this case.125 In Indalex, the CCAA court authorized debtor-in-possession (“DIP”)

financing and granted the DIP charge priority over the claims of allcreditors.


126 There were two pension plans in issue in Indalex: the executives’ planand the salaried employees’ plan. When the CCAA proceedings began,the executives’ plan had not been declared wound up. As s. 57(4) of thePBA provides that the wind up deemed trust comes into existence onlywhen the pension plan is wound up, no wind up deemed trust existed inrespect of the executives’ plan.

127 The salaried employees’ pension plan was in a different position,however. That plan had been declared wound up prior to the commence-ment of the CCAA proceeding and the wind up was in process.

128 A majority of the Supreme Court concluded that the PBA wind updeemed trust for the salaried employees’ pension plan continued in theCCAA proceeding, subject to the doctrine of federal paramountcy. How-ever, the CCAA court-ordered priority of the DIP lenders meant that fed-eral and provincial laws gave rise to different, and conflicting, orders ofpriority. As a result of the application of the doctrine of federal para-mountcy, the DIP charge superseded the deemed trust.

129 Both the facts and the issues in Indalex differ from those of the pre-sent case.

130 There are two critical factual distinctions. First, the wind up deemedtrust under consideration in Indalex arose before the CCAA proceedingcommenced. In this case, neither of the Plans had been declared woundup at the time the Initial Order was made - the Superintendent’s Wind UpOrders were made after the CCAA Proceeding commenced.

131 Second, the BIA played no part in Indalex In this case, however, theBIA was implicated from the beginning of the CCAA Proceeding. Priorto the issuance of the Initial Order, one of the debtor companies’ credi-tors (GE Canada) had issued a bankruptcy application, which was stayedby the Initial Order. Further, and importantly, at the time the prioritycontest came to be decided in this case, both the Pension Motion and theBankruptcy Motion were before the CCAA judge and he found that therewas no point to continuing the CCAA proceeding.3

132 The issues for resolution in Indalex were whether: the deemed trust ins. 57(4) applied to wind up deficiencies; such a deemed trust supersededa DIP charge; the company had fiduciary obligations to the pension planmembers when making decisions in the context of insolvency proceed-

3 See para. 62 of the reasons, where the CCAA judge states that the usefulnessof the CCAA proceeding had come to an end.


ings; and, a constructive trust was properly imposed as a remedy forbreach of fiduciary duties.

133 As I already explained, because of the point in the proceedings atwhich the Motions were heard, the primary issue for the CCAA judge inthis case was whether to lift the CCAA stay and order the RemainingApplicants into bankruptcy.

134 Given the legal and factual differences between the two cases, I donot find Indalex to be of assistance in the resolution of this dispute.

3. Steps by the Pension Claimants135 It was submitted that the CCAA judge wrongly required the pension

claimants to have taken steps earlier in the CCAA Proceeding, had theywished to assert their wind up deemed trust claims.

136 I understand this submission to be based largely on paras. 94 and 95of the CCAA judge’s reasons. The relevant parts of those paragraphsread as follows:

[94] It does seem to me that a commitment to make wind up defi-ciency payments is not in the ordinary course of business of an insol-vent company subject to a CCAA order unless agreed to. Even if theobligation could be said to be in the ordinary course for an insolventcompany GFPI was not obliged to make the payments ... .

[95] This is precisely the reason for the granting of a stay of proceed-ings that is provided for by the CCAA. Anyone seeking to have apayment made that would be regarded as being outside the ordinarycourse of business must seek to have the stay lifted or if it is to beregarded as an ordinary course of business obligation, persuade theapplicant and creditors that it should be made.

137 I do not read the CCAA judge’s reasons as saying that the pensionclaimants had to have taken certain steps earlier in the CCAA Proceedingin order to assert their claims. Rather, I understand the CCAA judge tobe saying the following. A contribution towards a wind up deficit madeby an insolvent company subject to a CCAA order is not a paymentmade in the ordinary course of business. The Initial Order only permittedpayments in the ordinary course of business. Thus, if during the CCAAProceeding the pension claimants wanted payments be made on the windup deficits, they would have had to have taken steps to accomplish that.These steps include reaching an agreement with the Applicants and se-cured creditors or seeking to have the stay lifted and an order made com-pelling the making of the payments.


138 Understood in this way, I see no error in the CCAA judge’s reason-ing. I would add that the timing of the relevant events supports this rea-soning. When the Initial Order was made, the Plans were on-going — theSuperintendent’s Wind Up Orders were not made until almost three yearslater. The Initial Order permitted, but did not require, GFPI to pay “alloutstanding and future ... pension contributions ... incurred in the ordi-nary course of business”. The nature and magnitude of contributions toongoing pension plans is different from those made to pension plans inthe process of being wound up. Thus, it does not seem to me that pay-ments made on wind up deficits fall within the terms of the Initial Orderwhich permitted the making of pension contributions “incurred in the or-dinary course of business”.

139 Accordingly, had the pension creditors sought to have paymentsmade on the wind up deficits, they would have had to have takensteps — such as those suggested by the CCAA judge — to enable and/orcompel such payments to be made.

4. The Question Posed by the Pension Motion140 I do not accept that the CCAA judge erred by failing to answer the

question posed by the Pension Motion. That question, it will be recalled,was whether GFPI, the CRO and the Monitor should be relieved frommaking further payments into the Plans.

141 In ordering the Remaining Applicants into bankruptcy, the CCAAjudge found that there was no point to continuing the CCAA Proceeding.It was plain and obvious that there were insufficient funds to meet theclaims against the Remaining Funds. Accordingly, there was no need forthe CCAA judge to address the question posed by the Pension Motionbecause distribution of the Remaining Funds had to be in accordancewith the BIA priorities scheme.

A Concluding Comment142 In my view, this case illustrates the value that a CCAA proceeding -

rather than a bankruptcy proceeding - offers for pension plan benefi-ciaries. Three examples demonstrate this.

143 First, from the outset of the CCAA Proceeding until June 2012, allpension contributions (both ongoing and special payments) continued tobe made into the Plans. Had GFPI gone into bankruptcy, those paymentswould not have been made to the Plans.


144 Second, on the sale to Georgia Pacific, Georgia Pacific assumed thePension Plan for Hourly Employees of Grant Forest Products Inc. - En-glehart Plan. Had GFPI gone into bankruptcy, it is unlikely in the ex-treme that the Englehart Plan would have continued as an on-going plan.

145 Third, the CCAA Proceeding gave GFPI sufficient “breathing space”to enable it to take steps to ensure that the Plans continued to be properlyadministered. This is best seen from the orders dated August 26, 2011,and September 21, 2011. Through those orders, GFPI was authorized toinitiate the Plans’ windups and work with the Superintendent in ap-pointing a replacement administrator, and the Monitor was authorized tohold back funds against which the pension claimants could assert theirclaims. Co-operation of this sort typically leads to reduced costs of ad-ministration with the result that more funds are available to planbeneficiaries.

146 I hasten to add that these remarks are not intended to suggest a lack ofsympathy for the position of pension plan beneficiaries in insolvencyproceedings. Rather, it is to recognize that while no panacea, at leastthere is some prospect of amelioration of that position in a CCAAproceeding.

Disposition147 Accordingly, I would dismiss the appeal. Dismissal of the appeal

would leave paras. 1-6 of the Transition Order operative, thus nothingmore need be said in relation to the Remaining Applicants’ submissions.

148 If the parties are unable to agree on costs, I would permit them tomake written submissions to a maximum of three pages in length, withinfourteen days of the date of release of these reasons.

Doherty J.A.:

I agree

P. Lauwers J.A.:

I agree

Appeal dismissed.


Schedule A

Paragraphs 1-6 of the Transition Order read as follows: SERVICE

1. THIS COURT ORDERS that the Motions are properly returnableand hereby dispenses with further service thereof.

CAPITALIZED TERMS

2. THIS COURT ORDERS that all capitalized terms not definedherein shall have the meaning ascribed to them in the StephenAffidavit.

APPROVAL OF ACTIVITIES

3. THIS COURT ORDERS that the Twenty-Sixth Report, theTwenty-Seventh Report and the Twenty- Ninth Report and the activi-ties of the Monitor as set out therein be and are hereby approved.

EXTENSION OF STAY PERIOD

4. THIS COURT ORDERS that the Stay Period in respect of the Re-maining Applicants as defined in the Order of Mr. Justice Newbouldmade in these proceedings on June 25, 2009 (the “Initial Order”), aspreviously extended until January 31, 2014, be and is hereby ex-tended until the filing of the Monitor’s Discharge Certificate as de-fined in paragraph 23 hereof or further order of this Court.

5. THIS COURT ORDERS that none of GFPI, Stonecrest CapitalInc. (“SCI”) in its capacity as Chief Restructuring Organization (the“CRO”), or the Monitor shall make any further payments to either ofthe Timmins Salaried Plan or the Executive Plan (collectively, the“Pension Plans”) or their respective trustees or to the PensionAdministrator.

6. THIS COURT ORDERS and declares that none of GFPI, the CROor the Monitor shall incur any liability for not making any paymentswhen due to the Pension Plans or their respective trustees or the Pen-sion Administrator.


[Indexed as: PSAC v. Canada (Attorney General)]

Public Service Alliance of Canada, Appellant and AttorneyGeneral of Canada, Treasury Board of Canada, Nav Canada,

Respondents

Federal Court of Appeal

Docket: A-266-14

2015 FCA 174

David Stratas, David G. Near, Donald J. Rennie JJ.A.

Heard: April 22, 2015

Judgment: July 28, 2015

Human rights –––– Practice and procedure — Commissions, tribunals andboards of inquiry — Complaints and pleadings — Summary dismissal ofcomplaint — Miscellaneous –––– In 1999, union and Treasury Board settledwage dispute — In 2002, union made complaint to Canadian Human RightsCommission alleging ss. 7, 10 and 11 of Canadian Human Rights Act werebreached because wage adjustments ordered by Tribunal were not extended toemployees of agencies, including respondent agencies WHA and NAV, that hadbeen transferred from core public administration and were governed by CanadaLabour Code (Code Agencies) — Commission exercised discretion under s. 41of Act not to deal with some of allegations raised in complaint on basis that itwas “plain and obvious” that those parts of complaint should not be dealtwith — Union’s application for judicial review was dismissed — Trial judgefound commission’s decision to dismiss complaints against NAV and WHA en-tirely and to dismiss complaints against respondents as individual employerswas reasonable — Trial judge found commission reasonably concluded that itwas plain and obvious that NAV and WHA were not co-employers with Trea-sury Board — Trial judge found commission was not required to set out legaltest it applied to identify employer — Trial judge found test was canvassed in s.41 report, which was part of reasons given commission made explicit referenceto its consideration of s. 41 report and jurisprudence cited — Trial judge foundcommission essentially applied same test as s. 41 report, though it disagreedwith report’s conclusion — Trial judge found commission reasonably decided itwas plain and obvious that union’s alternate ss. 7 and 10 allegations againstCode Agencies lacked reasonable grounds — Trial judge found commission didnot misapprehend factual nature of union’s allegations — Commission’s deci-sion not to deal with s. 11 complaints against Code Agencies as individual re-spondents was reasonable — Trial judge found commission did not err in con-cluding that comparators used had to exist within same establishment — Union

PSAC v. Canada (Attorney General) 207

appealed — Appeal allowed — Commission’s determination that it was plainand obvious that Treasury Board was not co-employer was reasonable and basedon uncontested evidence — Determining employer for purposes of human rightscomplaint required commission to apply legal standard to set of facts in area inwhich it has specialized expertise — Such exercise within mandate at s. 41 stageof proceedings, so long as commission does not engage in evidentiary weigh-ing — Commission had sufficient information before it to come to legal conclu-sion that Treasury Board was plainly and obviously not co-employer — Reason-able for commission to dismiss ss. 7 and 10 complaint against NAV asindividual employer — Commission reasonably found that allegations put for-ward by Public Service Alliance of Canada could not form basis of complaintunder ss. 7 and 10 of CHRA against NAV as individual employer — Commis-sion implicitly decided that employer is not obliged to address wage rates foundto be discriminatory in another establishment, which was permissible statutoryinterpretation — Determination was reasonable and consistent with broaderscheme of Act — Commission acted unreasonably in dismissing complaintunder s. 11 — Commission erred in finding that there was no evidence presentedthat wages were discriminatory — Commission was not to be concerned withevidentiary disputes, and were required to take union’s assertions as true —Complaint regarding s. 11 remitted for new hearing.

Cases considered by David G. Near J.A.:

A.T.A. v. Alberta (Information & Privacy Commissioner) (2011), 2011 SCC 61,2011 CarswellAlta 2068, 2011 CarswellAlta 2069, 339 D.L.R. (4th) 428, 28Admin. L.R. (5th) 177, 52 Alta. L.R. (5th) 1, [2012] 2 W.W.R. 434, (subnom. Alberta Teachers’ Association v. Information & Privacy Commissioner(Alta.)) 424 N.R. 70, (sub nom. Alberta (Information & PrivacyCommissioner) v. Alberta Teachers’ Association) [2011] 3 S.C.R. 654,[2011] S.C.J. No. 61, (sub nom. Alberta Teachers’ Association v.Information and Privacy Commissioner) 519 A.R. 1, (sub nom. AlbertaTeachers’ Association v. Information and Privacy Commissioner) 539W.A.C. 1 (S.C.C.) — referred to

Agraira v. Canada (Minister of Public Safety and Emergency Preparedness)(2013), 2013 SCC 36, 2013 CarswellNat 1983, 2013 CarswellNat 1984, 52Admin. L.R. (5th) 183, 360 D.L.R. (4th) 411, 16 Imm. L.R. (4th) 173,[2013] S.C.J. No. 36, 446 N.R. 65, [2013] 2 S.C.R. 559 (S.C.C.) — referredto

Canada (Attorney General) v. Mohawks of the Bay of Quinte (2012), 2012 FC105, 2012 CarswellNat 201, 2012 CF 105, 2012 CarswellNat 502, [2012] 2C.N.L.R. 37, (sub nom. Canada (Attorney General) v. Maracle) 404 F.T.R.173, [2012] F.C.J. No. 121, [2012] A.C.F. No. 121 (F.C.) — considered

Canada (Human Rights Commission) v. Canada (Attorney General) (2013),2013 FCA 75, 2013 CarswellNat 518, 2013 CAF 75, [2013] F.C.J. No. 249,444 N.R. 120, 2013 CarswellNat 2243, (sub nom. First Nations Child and


Family Caring Society of Canada v. Canada (Attorney General)) 277 C.R.R.(2d) 233, 76 C.H.R.R. D/353 (F.C.A.) — referred to

Canada Post Corp. v. Barrette (2000), 2000 CarswellNat 748, [2000] 4 F.C.145, 254 N.R. 38, 182 F.T.R. 160 (note), 2000 CarswellNat 3262, 27 Admin.L.R. (3d) 268, 37 C.H.R.R. D/358, [2000] F.C.J. No. 539 (Fed. C.A.) —referred to

Canada Post Corp. v. Canada (Human Rights Commission) (1997), 1997 Car-swellNat 689, 130 F.T.R. 241, [1997] F.C.J. No. 578 (Fed. T.D.) — referredto

Canada Post Corp. v. Canada (Human Rights Commission) (1999), 1999 Car-swellNat 831, (sub nom. Canada Post Corp. v. Canadian Postmasters &Assistants Assn.) 99 C.L.L.C. 230-015, 245 N.R. 397, 169 F.T.R. 138 (note),[1999] F.C.J. No. 705, 1999 CarswellNat 5093 (Fed. C.A.) — referred to

Deschenes c. Canada (Procureur general) (2009), 2009 CF 1126, 2009 Car-swellNat 3744, 2009 FC 1126, 2009 CarswellNat 5786, (sub nom.Deschenes v. Canada (Attorney General)) 2010 C.L.L.C. 230-034, [2009]F.C.J. No. 1374 (F.C.) — referred to

Exeter v. Canada (Attorney General) (2012), 2012 FCA 119, 2012 CarswellNat1132, 2012 CAF 119, 2012 CarswellNat 2415, 2012 C.L.L.C. 230-018, 40Admin. L.R. (5th) 69, 433 N.R. 286, [2012] F.C.J. No. 489 (F.C.A.) — re-ferred to

Keith v. Canada (Correctional Service) (2012), 2012 FCA 117, 2012 Car-swellNat 1152, 2012 CAF 117, 2012 CarswellNat 2947, 431 N.R. 121, 40Admin. L.R. (5th) 1, [2012] F.C.J. No. 505, [2012] A.C.F. No. 505(F.C.A.) — referred to

Khaper v. Air Canada (2015), 2015 FCA 99, 2015 CarswellNat 1130, 22C.C.E.L. (4th) 188, [2015] F.C.J. No. 491 (F.C.A.) — referred to

McIlvenna v. Bank of Nova Scotia (2013), 2013 FC 678, 2013 CarswellNat2116, 2013 CF 678, 2013 CarswellNat 2828, [2013] F.C.J. No. 743, [2013]A.C.F. No. 743, 432 F.T.R. 311 (F.C.) — referred to

McIlvenna v. Bank of Nova Scotia (2014), 2014 FCA 203, 2014 CarswellNat4381, 2014 CAF 203, 2014 CarswellNat 5723, 466 N.R. 195 (F.C.A.) —considered

N.L.N.U. v. Newfoundland & Labrador (Treasury Board) (2011), 2011 SCC 62,2011 CarswellNfld 414, 2011 CarswellNfld 415, D.T.E. 2012T-7, 340D.L.R. (4th) 17, (sub nom. Nfld. and Labrador Nurses’ Union v.Newfoundland and Labrador (Treasury Board)) 2011 C.L.L.C. 220-008,(sub nom. Newfoundland & Labrador Nurses’ Union v. Newfoundland &Labrador (Treasury Board)) 424 N.R. 220, (sub nom. Newfoundland &Labrador Nurses’ Union v. Newfoundland & Labrador (Treasury Board))[2011] 3 S.C.R. 708, [2011] S.C.J. No. 62, 213 L.A.C. (4th) 95, (sub nom.Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador(Treasury Board)) 986 A.P.R. 340, (sub nom. Newfoundland and Labrador

PSAC v. Canada (Attorney General) 209

Nurses’ Union v. Newfoundland and Labrador (Treasury Board)) 317 Nfld.& P.E.I.R. 340, 97 C.C.E.L. (3d) 199, 38 Admin. L.R. (5th) 255 (S.C.C.) —referred to

New Brunswick (Board of Management) v. Dunsmuir (2008), 2008 SCC 9, 2008CarswellNB 124, 2008 CarswellNB 125, D.T.E. 2008T-223, [2008] S.C.J.No. 9, (sub nom. Dunsmuir v. New Brunswick) 2008 C.L.L.C. 220-020, 64C.C.E.L. (3d) 1, 69 Imm. L.R. (3d) 1, 69 Admin. L.R. (4th) 1, 372 N.R. 1,(sub nom. Dunsmuir v. New Brunswick) 170 L.A.C. (4th) 1, (sub nom.Dunsmuir v. New Brunswick) 291 D.L.R. (4th) 577, [2008] A.C.S. No. 9,329 N.B.R. (2d) 1, (sub nom. Dunsmuir v. New Brunswick) [2008] 1 S.C.R.190, 844 A.P.R. 1, (sub nom. Dunsmuir v. New Brunswick) 95 L.C.R. 65,2008 CSC 9 (S.C.C.) — followed

Reid v. Vancouver Police Board (2005), 2005 BCCA 418, 2005 CarswellBC1952, 2005 C.L.L.C. 230-024, 44 B.C.L.R. (4th) 49, (sub nom. Reid v.Vancouver (City)) 215 B.C.A.C. 291, (sub nom. Reid v. Vancouver (City))355 W.A.C. 291, 35 Admin. L.R. (4th) 7, (sub nom. Vancouver (City) v.Reid) 55 C.H.R.R. D/57, [2005] B.C.J. No. 1832 (B.C. C.A.) — followed

Sketchley v. Canada (Attorney General) (2005), 2005 FCA 404, 2005 Car-swellNat 4194, 2006 C.L.L.C. 230-002, 2005 CAF 404, 2005 CarswellNat5119, 344 N.R. 257, [2005] F.C.J. No. 2056, 263 D.L.R. (4th) 113, [2006] 3F.C.R. 392, 44 Admin. L.R. (4th) 4, 56 C.H.R.R. D/490 (F.C.A.) — referredto


Canadian Human Rights Act, R.S.C. 1985, c. H-6Generally — referred tos. 2 — referred tos. 3(1) — consideredss. 5-14.1 — referred tos. 7 — consideredss. 7-11 — considereds. 10 — considereds. 11 — considereds. 11(1) — considereds. 39 — referred tos. 40 — referred tos. 41 — considereds. 41(1) — considereds. 41(1)(c) — considereds. 43 — considered

Civil Air Navigation Services Commercialization Act, S.C. 1996, c. 20Generally — referred tos. 8 — considereds. 68 — considered


Financial Administration Act, R.S.C. 1985, c. F-11Generally — referred toSched. I — referred toSched. IV — referred to

Public Service Labour Relations Act, S.C. 2003, c. 22, s. 2s. 2(1) “employer” — considered

Regulations considered:

Canadian Human Rights Act, R.S.C. 1985, c. H-6Equal Wages Guidelines, 1986, SOR/86-1082

Generally — referred tos. 9 — considereds. 10 — considered

APPEAL by union from judgment reported at PSAC v. Canada (Attorney Gen-eral) (2014), 2014 FC 393, 2014 CarswellNat 1372, 453 F.T.R. 239, 2014 CF393, 2014 CarswellNat 8446 (F.C.), dismissing union’s application for judicialreview of determination by human rights tribunal.

Andrew Raven, Amanda Montague-Reinholdt, for AppellantZoe Oxaal, for Respondents, Attorney General of Canada and Treasury Board of

CanadaKaren Jensen, for Respondent, NAV Canada

David G. Near J.A.:

I. Introduction1 The Public Service Alliance of Canada (PSAC) appeals from the

April 28, 2014 judgment of the Federal Court (per Justice Kane): 2014FC 393 (F.C.).

2 PSAC had applied to the Federal Court for judicial review of the Sep-tember 5, 2012 decision of the Canadian Human Rights Commission. Inthis decision, the Commission dismissed PSAC’s complaint alleging thatthe respondents, Treasury Board of Canada and NAV Canada (NAV)had discriminated, and were discriminating, against NAV’s female em-ployees contrary to sections 7, 10, and 11 of the Canadian Human RightsAct, R.S.C. 1985 c. H-6 (CHRA).

3 The Federal Court dismissed PSAC’s application.4 PSAC now appeals to this Court. Although the decisions below con-

cern numerous parties, this appeal is restricted to the complaint made onbehalf of NAV employees.

PSAC v. Canada (Attorney General) David G. Near J.A. 211

5 For the reasons that follow, I would allow the appeal, and allowPSAC’s application for judicial review in part. I would remit the com-plaint against NAV under section 11 of the CHRA to the Commission forfurther proceedings under the Act.

II. Background

A. The Legislative Scheme6 Individuals may file a complaint with the Commission if they have

reasonable grounds to believe that a federally-regulated body has en-gaged or is engaging in a discriminatory practice (CHRA, ss. 2 and 40).Sections 5 to 14.1 of the CHRA define what constitutes a “discriminatorypractice” (CHRA, s. 39).

7 Sections 7 to 11 of the CHRA set out discriminatory practices withinthe employment context. Sections 7, 10, and 11 are the sections of theAct at issue in this appeal.

8 Sections 7 and 10 define certain, more general, employment practicesas discriminatory:

7. It is a discriminatory 7. Constitue un acte dis-practice, directly or indi- criminatoire, s’il estrectly, fonde sur un motif de

distinction illicite, le fait,par des moyens directs ouindirects :

(a) to refuse to employ or a) de refuser d’employercontinue to employ any ou de continuerindividual, or d’employer un individu;

(b) in the course of em- b) de le defavoriser enployment, to differentiate cours d’emploi.adversely in relation to anemployee,

on a prohibited ground of dis-crimination.


10. It is a discriminatory 10. Constitue un acte dis-practice for an employer, criminatoire, s’il estemployee organization or fonde sur un motif deemployer organization distinction illicite et s’il

est susceptible d’annihilerles chances d’emploi oud’avancement d’un in-dividu ou d’une categoried’individus, le fait, pourl’employeur, l’associationpatronale oul’organisation syndicale :

(a) to establish or pursue a) de fixer ou d’appliquera policy or practice, or des lignes de conduite;

(b) to enter into an agree- b) de conclure des en-ment affecting recruit- tentes touchant le recrute-ment, referral, hiring, ment, les mises enpromotion, training, ap- rapport, l’engagement, lesprenticeship, transfer or promotions, la formation,any other matter relating l’apprentissage, les muta-to employment or pro- tions ou tout autre aspectspective employment, d’un emploi present ou

eventuel.

that deprives or tends to de-prive an individual or class ofindividuals of any employmentopportunities on a prohibitedground of discrimination.

9 These sections establish that it is a discriminatory practice to treatemployees adversely based on a prohibited ground of discrimination, orto establish policies or practices that tend to deprive an individual orclass of individuals of employment opportunities based on a prohibitedground. Subsection 3(1) of the CHRA lists the prohibited grounds of dis-crimination for the purposes of the Act; this list includes gender.

10 Section 11 of the CHRA specifically addresses wage discrimination.Subsection 11(1) states that establishing and maintaining unequal wages


between male and female employees performing work of equal valueconstitutes a discriminatory practice:

11. (1) It is a discriminatory 11. (1) Constitue un acte dis-practice for an employer criminatoire le fait pourto establish or maintain l’employeur d’instaurerdifferences in wages be- ou de pratiquer la dis-tween male and female parite salariale entre lesemployees employed in hommes et les femmesthe same establishment qui executent, dans lewho are performing work meme etablissement, desof equal value. fonctions equivalentes.

11 The Commission must deal with any complaint filed with it (CHRA,s. 41(1)). This usually begins with an investigation under section 43 ofthe CHRA. In certain circumstances, however, the Commission is enti-tled to dismiss a complaint before proceeding to an investigation. Thesecircumstances are listed in subsection 41(1) of the CHRA:

41. (1) Subject to section 40, 41. (1) Sous reserve dethe Commission shall l’article 40, la Commis-deal with any complaint sion statue sur toutefiled with it unless in re- plainte dont elle est saisiespect of that complaint it a moins qu’elle estimeappears to the Commis- celle-ci irrecevable poursion that un des motifs suivants:

(a) the alleged victim of a) la victime presumee dethe discriminatory prac- l’acte discriminatoiretice to which the com- devrait epuiser d’abordplaint relates ought to les recours internes ou lesexhaust grievance or re- procedures d’appel ou deview procedures other- reglement des griefs quiwise reasonably available; lui sont normalement

ouverts;

(b) the complaint is one b) la plainte pourraitthat could more appropri- avantageusement etre in-ately be dealt with, ini- struite, dans un premiertially or completely, temps ou a toutes lesaccording to a procedure etapes, selon des proce-provided for under an Act dures prevues par une au-of Parliament other than tre loi federale;this Act;


(c) the complaint is be- c) la plainte n’est pas deyond the jurisdiction of sa competence;the Commission;

(d) the complaint is trivi- d) la plainte est frivole,al, frivolous, vexatious or vexatoire ou entachee demade in bad faith; or mauvaise foi;

(e) the complaint is based e) la plainte a ete de-on acts or omissions the posee apres l’expirationlast of which occurred d’un delai d’un an apresmore than one year, or le dernier des faits sursuch longer period of lesquels elle est fondee,time as the Commission ou de tout delai superieurconsiders appropriate in que la Commission es-the circumstances, before time indique dans les cir-receipt of the complaint. constances.

12 The Commission may dismiss a complaint if: the complainant oughtto exhaust alternative procedures; the complaint could be more appropri-ately dealt with in another forum; the complaint is trivial, vexatious, or inbad faith; or the complaint is out of time. The Commission may alsodismiss a complaint for being outside of its jurisdiction. This finalground was the basis for the Commission’s decision, the subject of thisappeal.

B. The Facts Underlying the Complaint13 The complaint at issue in this appeal concerns events dating back

three decades.14 In 1984, PSAC filed a complaint with the Commission alleging that

Treasury Board was engaging in wage discrimination contrary to section11 of the CHRA.

15 As a result of this complaint, a Joint Union-Management Initiative(JUMI) agreed to conduct a pay equity study within the core public ad-ministration, and to develop and carry out an action plan in response tothe results of this study. The study evaluated job value and wage ratesamong female-dominated occupational groups, and compared them tojob value and wage rates among male-dominated occupational groups.

16 The results of the job evaluations that were conducted under theJUMI study were provided to the Commission, who was participating inthe study as an observer. However, the JUMI eventually broke down.The action plan agreed to by the JUMI Committee, which called for sys-


tem-wide correction of gender-based wage disparities, was never com-pleted. Instead, in early 1990, the government unilaterally provided threeoccupational groups with equalizatio n payments calculated using theJUMI job evaluation results. That same year, PSAC filed a separate com-plaint with the Commission on behalf of six female-dominated occupa-tional groups that were surveyed during the JUMI study.

17 The Commission ultimately referred the issue of possible wage dis-crimination within the core public administration - including PSAC’s1984 and 1990 complaints - to the Canadian Human Rights Tribunal fordetermination.

18 In 1998, the Tribunal determined that Treasury Board had breachedsection 11 of the CHRA. The Tribunal ordered Treasury Board to retro-actively adjust the wages of certain occupational groups in the core pub-lic administration (the Tribunal Order).

19 In 1999, PSAC and Treasury Board entered into a pay equity settle-ment, approved by the Tribunal by means of a consent order. This settle-ment set out the precise wage gap calculations and entitlement by occu-pational group and level, but applied only to certain groups of TreasuryBoard employees. It did not apply to employees of separate agencies,Crown corporations, or other organizations not listed in what are nowSchedules I and IV to the Financial Administration Act, R.S.C. 1985, c.F-11.

20 The settlement did not apply to NAV. NAV is a private, non-sharecapital corporation legislatively constituted by the Civil Air NavigationServices Commercialization Act, S.C. 1996, c. 20. NAV became respon-sible for Canada’s civil air navigation services in place of Transport Can-ada on November 1, 1996. An agreement dated April 1, 1996 details thistransfer of responsibility, including the transfer of employees from thecore public administration to the corporation (the Transfer Agreement).

21 The only compensation that NAV employees received in connectionwith the Tribunal Order was retroactive pay for the period before NAVwas carved out from the core public administration. In other words, NAVemployees only received compensation for the period during which theywere still Transport Canada (i.e. Treasury Board) employees.

C. The Complaint22 On January 9, 2002, PSAC filed the complaint at issue in this appeal.

PSAC complained that Treasury Board, or alternatively, NAV - as anindividual respondent or as a co-respondent with Treasury Board - had:


• discriminated against female NAV employees on the basis of gen-der by not extending to them pay equity adjustments, contrary tosections 7 and 10 of the CHRA; and

• discriminated, and continued to discriminate, against female NAVemployees by maintaining differences in wages between employ-ees performing predominantly female work and employees per-forming predominantly male work of equal value in the same es-tablishment, contrary to section 11 of the CHRA.

D. The Commission’s Decision23 The Commission determined that all aspects of PSAC’s complaint

fell outside of its jurisdiction. Accordingly, the Commission dismissedthe complaint under paragraph 41(1)(c) of the CHRA.

24 I will discuss the Commission’s decision in more detail below. How-ever, in brief, the Commission found that PSAC’s allegations did notcontain all of the elements necessary to constitute valid complaints undersections 7, 10, or 11 of the CHRA. It determined that the allegationsagainst Treasury Board could not proceed because Treasury Board wasnot an employer or co-employer of NAV employees at the relevant time.The Commission also determined that the allegations against NAV indi-vidually must fail because they were lacking the necessary links to pro-hibited acts of discrimination.

E. Decision of the Federal Court25 The Federal Court dismissed PSAC’s application for judicial review

of the Commission’s decision. The Federal Court Judge determined thatit was reasonable for the Commission to have dismissed PSAC’scomplaint.

III. Standard of Review26 This Court must determine whether the Federal Court correctly iden-

tified and properly applied the standard of review to the Commission’sdecision (Agraira v. Canada (Minister of Public Safety and EmergencyPreparedness), 2013 SCC 36 at para. 47, [2013] 2 S.C.R. 559(S.C.C.) [Agraira]).

27 The Federal Court Judge correctly identified the standard of review asreasonableness (Federal Court Decision, at para. 46).

28 Reasonableness is presumed to be the standard of review applicableto the Commission’s decision, which involved the application of the le-


gal standards set out in the CHRA - its home statute - to a set of facts(New Brunswick (Board of Management) v. Dunsmuir, 2008 SCC 9 atparas. 53-54, [2008] 1 S.C.R. 190 (S.C.C.) [Dunsmuir]; A.T.A. v. Alberta(Information & Privacy Commissioner), 2011 SCC 61 at para. 30, [2011]3 S.C.R. 654 (S.C.C.); Canada (Human Rights Commission) v. Canada(Attorney General), 2013 FCA 75 at para. 10, 444 N.R. 120 (F.C.A.)).

29 Moreover, this Court has consistently applied the standard of reasona-bleness to decisions of the Commission under subsection 41(1), except incircumstances where correctness review was explicitly required underDunsmuir (see, for example, Khaper v. Air Canada, 2015 FCA 99 atpara. 16, [2015] F.C.J. No. 491 (F.C.A.) (QL); Exeter v. Canada(Attorney General), 2012 FCA 119 at para. 6, [2012] F.C.J. No. 489(F.C.A.) (QL); Keith v. Canada (Correctional Service), 2012 FCA 117 atpara. 53, 431 N.R. 121 (F.C.A.)). In this case, nothing in the Commis-sion’s decision requires correctness review.

30 In order to determine whether the Judge properly applied the reasona-bleness standard, this Court must “step into the shoes” of the FederalCourt and conduct a reasonableness review itself (Agraira at para. 46).

IV. Issues31 This Court must determine:

• Was it reasonable for the Commission to dismiss the complaintsagainst Treasury Board as a co-employer with NAV?

• Was it reasonable for the Commission to dismiss the sections 7and 10 complaint against NAV as an individual employer?

• Was it reasonable for the Commission to dismiss the section 11complaint against NAV as an individual employer?

V. Analysis

A. The Role of the Commission at the Section 41 Stage32 In order to properly assess the reasonableness of the Commission’s

decision, a greater understanding of the Commission’s role at the pre-investigation stage is required.

33 The jurisprudence has established that the Commission may only dis-miss complaints under subsection 41(1) in “plain and obvious” cases(Canada Post Corp. v. Canada (Human Rights Commission) (1997), 130F.T.R. 241, [1997] F.C.J. No. 578 (Fed. T.D.) (QL) at para. 3, aff’d(1999), 245 N.R. 397, [1999] F.C.J. No. 705 (Fed. C.A.) (QL)).


34 Although the Commission must make its decisions according to the“plain and obvious” standard, the language of subsection 41(1) affordsthe Commission some discretion. The provision states that the Commis-sion shall deal with the complaint unless “it appears to the Commission”that one of the listed grounds applies. This Court has emphasized thatscreening under subsection 41(1) is a duty imposed upon the Commis-sion by law, and that the Commission must “do its work diligently”, evenat this preliminary stage (Canada Post Corp. v. Barrette, [2000] 4 F.C.145 at para. 25, [2000] F.C.J. No. 539 (Fed. C.A.) (QL)).

35 This has led to some confusion about the Commission’s role at thepre-investigation stage. In particular, confusion appears to exist aboutwhether the Commission may assess evidence when making decisionsunder subsection 41(1).

36 This Court recently addressed this issue in another case involving adecision of the Commission under paragraph 41(1)(c): McIlvenna v.Bank of Nova Scotia, 2014 FCA 203, 466 N.R. 195 (F.C.A.) [McIlvennaFCA], rev’g 2013 FC 678 (F.C.) [McIlvenna FC].

37 In McIlvenna, the Commission had dismissed a complaint as beingoutside of its jurisdiction for failing to disclose a link to a prohibitedground of discrimination (at para. 7, McIlvenna FCA; at para. 1,McIlvenna FC). This Court found the Commission’s decision to be un-reasonable (McIlvenna FCA, at paras. 14-19). This was because theCommission had resolved a live contest going to the merits of the com-plaint by weighing evidence. This Court held that such evidentiaryweighing is not part of the Commission’s task where such a live disputeexists. This Court distinguished such disputes from other decisions theCommission might make under subsection 41(1), such as whether a com-plaint appears to be frivolous or vexatious.

38 In this case, the Commission determined that PSAC’s complaint felloutside of its jurisdiction because the allegations contained within it didnot have all of the elements necessary to make out claims of discrimina-tion under sections 7, 10, or 11 of the CHRA. Applying this Court’sholding from McIlvenna, for its decision to be reasonable, the Commis-sion must have reached its conclusions without resolving factual disputesgoing to the merits of the complaint.


B. Was it reasonable for the Commission to dismiss the complaintsagainst Treasury Board as a co-employer with NAV?

39 The Commission determined that it was plain and obvious that Trea-sury Board was not a co-employer with NAV, and had not been since atleast November 1, 1996, when employees were transferred from the pub-lic service to the corporation.

40 The Commission reached this conclusion based upon the TransferAgreement and the fact that the legal regime relating to government fi-nancial accountability in no way applies to NAV: the corporation isneither subject to the Financial Administration Act, nor reliant on appro-priations from Parliament.

41 The Commission rejected PSAC’s argument that an extensive andcomplex evidentiary record was required to determine whether NAV wasa co-employer with Treasury Board. The Commission was satisfied thatit had before it sufficient information to make this determination at thesection 41 stage.

42 In my view, the Commission’s conclusion on this issue wasreasonable.

43 The question for this Court is whether the Commission’s decisionfalls within the range of possible, acceptable outcomes, having regard tothe decision as a whole (N.L.N.U. v. Newfoundland & Labrador(Treasury Board), 2011 SCC 62, [2011] 3 S.C.R. 708 (S.C.C.)). In myview, it does.

44 The Commission based its decision upon uncontested facts and law -namely, the relevant legislation and the Transfer Agreement. This basisis sufficient to support the Commission’s decision.

45 As the Commission noted in its decision, the legal regime relating togovernment financial accountability does not apply to NAV.

46 In addition, section 2 of the Public Service Labour Relations Act, S.C.2003, c. 22 defines “employer” as being Treasury Board “in the case of adepartment named in Schedule I to the Financial Administration Act oranother portion of the federal public administration named in ScheduleIV to that Act”. Moreover, section 8 of the Air Navigation Services Com-mercialization Act establishes that NAV is not an agent of the Crown,and section 68 of that Act states that the Crown ceased to be responsiblefor the terms and conditions of employment at NAV as of the transferdate.


47 The Commission also had before it relevant excerpts from the Trans-fer Agreement, Article 3.01.06 of which stipulates that NAV is solelyresponsible for the payment of employment claims arising from NAVemployees (Appeal Book Vol. I, p. 244).

48 PSAC submits that the Commission should not have decided whetherTreasury Board was a co-employer at the section 41 stage, because doingso requires considering both factual and legal arguments. In support,PSAC cites Canada (Attorney General) v. Mohawks of the Bay ofQuinte, 2012 FC 105 at para. 43, [2012] F.C.J. No. 121 (F.C.) (QL).PSAC further submits that, even if the Commission were permitted tomake such a determination at the section 41 stage, the Commission’s de-cision is unreasonable for failing to identify or apply the legal test fordetermining the employer in a pay equity complaint, that from Reid v.Vancouver Police Board, 2005 BCCA 418, [2005] B.C.J. No. 1832 (B.C.C.A.) (QL) [Reid].

49 I do not accept these arguments. Making a finding on this issue - de-termining the employer for the purposes of a human rights complaint -required the Commission to apply a legal standard to a set of facts in anarea in which it has specialized expertise. Such an exercise is part of theCommission’s mandate at the section 41 stage, so long as the Commis-sion does not engage in evidentiary weighing contrary to McIlvenna. TheCommission’s role is to determine whether the alleged facts, taken astrue, give rise to a sustainable complaint.

50 Before making its decision, the Commission considered the parties’submissions, as well as the report prepared by its early resolution staffthat explicitly referenced Reid, above. Contrary to PSAC’s assertion, thisCourt must presume that the Commission charged itself on the test fromReid because the Commission considered a report that referenced thistest. Because such reports are prepared for the Commission, the staffcompleting them are considered to be an extension of the Commission(Sketchley v. Canada (Attorney General), 2005 FCA 404 at para.37, [2006] 3 F.C.R. 392 (F.C.A.)). Given that the Commission locatedthe appropriate law, this Court must defer to the Commission’s applica-tion of this legal standard to the uncontested facts before it, so long as theresult is supportable on the record.

51 The Commission had sufficient information before it to come to thelegal conclusion that Treasury Board was plainly and obviously not a co-employer for the purposes of PSAC’s complaint. The Commission did


not need to weigh or assess evidence to reach this conclusion. I wouldtherefore not interfere with this decision.

C. Was it reasonable for the Commission to dismiss the sections 7 and10 complaint against NAV as an individual employer?

52 After concluding that Treasury Board was not a co-employer withNAV, the Commission determined that PSAC’s sections 7 and 10 com-plaint could not continue against NAV as an individual employer.

53 The Commission recognized that the discriminatory practice thatPSAC had alleged in its sections 7 and 10 complaint appeared to bebroader than the practice of wage discrimination described in section 11of the CHRA. The discriminatory practice that PSAC had alleged wasNAV’s failure to adjust wages already found to be discriminatory. TheCommission concluded, however, that there were no reasonable groundsto support a finding that this practice arose during the relevant timeperiod.

54 The Commission found it to be plain and obvious that, in 1996, whenTransport Canada employees became NAV employees, the wages of em-ployees in female-dominated occupational groups had not yet been foundto be discriminatory. The Commission also found it to be plain and obvi-ous that, in 1998, when the finding of wage discrimination within thepublic service was made, NAV was a separate employer with no legalobligation to apply the Tribunal Order.

55 The Commission stated that NAV must be under some legal obliga-tion to address the Tribunal Order for PSAC’s sections 7 and 10 com-plaint to have reasonable grounds. The Commission determined that nosuch legal obligation existed since NAV was not a co-employer withTreasury Board, and was not a party to the Tribunal Order. As such,without any other basis, the complaint lacked reasonable grounds.

56 PSAC submits that its complaint under sections 7 and 10 is not thatthe Tribunal Order was legally binding on NAV. Rather, PSAC arguesthe Tribunal Order constitutes the factual basis for the complaint, whichis that NAV failed to rectify a classification and wage structure it knewto be discriminatory. The allegation, simply put, is that the Tribunal Or-der said that wage discrimination was present in NAV’s workplace, andthe failure to address this situation is a violation of sections 7 and 10 ofthe CHRA.

57 PSAC argues that the factual and legal basis for its allegation is thesame whether or not Treasury Board is listed as a co-respondent. PSAC


also submits that, contrary to the Judge’s finding (at paragraph 110, Fed-eral Court Decision), it did provide evidence - a letter from counsel forNAV - indicating that NAV was aware that the classification and wagestructure that it had inherited from Treasury Board was discriminatory.

58 Again, I cannot accept PSAC’s arguments.59 A fair reading of the Commission’s reasons does not lead to the con-

clusion that the Commission misinterpreted PSAC’s sections 7 and 10complaint as being that the Tribunal Order was binding per se on NAV.Rather, the Commission decided that the allegations put forward byPSAC based upon the Tribunal Order could not form the basis of a com-plaint under sections 7 and 10 of the CHRA against NAV as an indivi-dual employer. Given the legal nature of this decision, whether or notPSAC tendered evidence to support its factual allegations is not relevantto the reasonableness of the Commission’s decision.

60 Turning now to that question, it is my view that the Commission’sdecision was reasonable.

61 As NAV indicated in its submissions, the Commission implicitly de-cided that an employer is not obliged under the CHRA to address wagerates found to be discriminatory in another establishment. This decisionis one of statutory interpretation. In order to reach its ultimate conclusionon this issue, the Commission had to interpret the CHRA to determinewhat constitutes a “discriminatory practice” under sections 7 and 10.

62 The Commission determined that failing to address wage rates al-ready found to be discriminatory may constitute a discriminatory practiceunder sections 7 and 10, separate from the practice of wage discrimina-tion itself, which is considered under section 11. However, the Commis-sion concluded that this was only possible where the employer impugnedin the finding of wage discrimination and the employer allegedly failingto address this discrimination are the same. Applying this interpretationto the facts that PSAC had alleged, the Commission determined that thesections 7 and 10 complaint against NAV as an individual employer wasnot sustainable. This, in my view, was reasonable.

63 The Commission’s interpretation is consistent with the broaderscheme of the CHRA. Subsection 11(1) of the Act, reproduced above atparagraph 10, clearly indicates that a finding of wage discriminationmust be based upon a comparison of employees from within the sameestablishment. This is further reinforced by the Equal Wages Guidelines,1986, S.O.R./86-1082, the guidelines established under the CHRA con-cerning the application of section 11. Among other things, the Equal


Wages Guidelines set out how the value of work of employees within thesame establishment may be assessed and define the term “employees ofan establishment” (ss. 9 and 10, respectively).

64 Accordingly, a wage cannot be labelled “discriminatory” in the ab-stract. A finding of wage discrimination under section 11 of the CHRA isnecessarily tied to the establishment from which employees’ wages werecompared. This is the reason NAV was not a party to the Tribunal Order.This explanation also supports the reasonableness of the Commission’sdecision that PSAC’s sections 7 and 10 lacked reasonable grounds be-cause NAV was under no legal obligation to address the Tribunal Order.The Commission reasonably concluded that PSAC was required to domore than simply assert such an obligation in order for its claim underthese sections to be sustainable. PSAC has not referred the Court to anyauthority that demonstrates why this conclusion falls outside the range ofpossible, acceptable outcomes.

65 I would therefore decline to interfere with the Commission’s decisionon this ground.

D. Was it reasonable for the Commission to dismiss the section 11complaint against NAV as an individual employer?

66 Finally, the Commission determined that the section 11 complaintagainst NAV as an individual employer fell outside of its jurisdictionbecause it lacked reasonable grounds, one of the prerequisites for a sec-tion 11 complaint.

67 The Commission noted that a complaint under section 11 of theCHRA must meet certain requirements. The complaint must name fe-male-predominant and male-predominant jobs within the same establish-ment for which the named employer is responsible. It must also containreasonable grounds for believing that comparing the value of work andthe wages of these groups would suggest discrimination.

68 The Commission concluded: ...[I]t is difficult to see how the basis of the [Tribunal Order], specifi-cally, the female predominant jobs, the male comparators and thewage/value analysis all of which are derived from the same establish-ment over which [Treasury Board] is the employer, can be used toprovide reasonable grounds for section 11 allegations against differ-ent and separate employers.

(Appeal Book Vol. I, p. 317)


69 The Commission acknowledged that PSAC had listed specific em-ployee groups in its April 16, 2012 submissions. The Commission noted,however, that according to NAV’s submissions, certain groups were nolonger female-dominated, and other groups no longer existed. The Com-mission remarked that these differences in the parties’ submissionsdemonstrate why “... reasonable grounds for filing a section 11 complaintmust be based on the circumstances of an employer within one establish-ment” (Appeal Book Vol. I, p. 318).

70 The Commission did not accept PSAC’s argument that these differ-ences demonstrate that an investigation is needed. Instead, the Commis-sion stated that reasonable grounds must be based on something morethan mere assertion or speculation. The Commission also noted that acomplaint under section 11 cannot be filed using proxy or surrogatecomparators.

71 In my view, the Commission’s decision on this issue was notreasonable.

72 The Commission found, and the parties agree, that a section 11 com-plaint must meet certain requirements: it must name female-predominantand male-predominant jobs within the same establishment, and must pro-vide reasonable grounds that a comparison of the value of their work andwages suggests discrimination (Deschenes c. Canada (Procureur gen-eral), 2009 FC 1126 at para. 16, [2009] F.C.J. No. 1374 (F.C.) (QL)).

73 In its submissions to the Commission dated April 16, 2012, PSAClisted specific female-predominant groups from within NAV that it al-leged were being paid discriminatory wage rates compared to specificmale-predominant groups at NAV (Appeal Book Vol. I, p. 125). In itscomplaint, PSAC had: referenced the Tribunal Order (and its underlyingfacts); had alleged that employees were transferred out of the public ser-vice to NAV at existing Treasury Board wage rates; and had alleged thatNAV employees perform duties that are essentially the same as thoseperformed by the individuals in the occupational groups whose wageswere in issue in the Tribunal Order (Appeal Book Vol. I, pp. 282-283).

74 Nevertheless, the Commission found that PSAC’s complaint lackedreasonable grounds. It determined that reasonable grounds for a section11 complaint must be based on the circumstances of an employer withinone establishment. In reaching this conclusion, the Commission pointedto the parties’ contradictory factual submissions. However, at the section41 stage, PSAC’s factual assertions must be taken to be true. The Com-

PSAC v. Canada (Attorney General) Donald J. Rennie J.A. 225

mission is not to be concerned with evidentiary disputes that go to themerits of the complaint in an analysis under paragraph 41(1)(c).

75 In my view, it was not reasonable for the Commission to concludethat PSAC’s complaint plainly and obviously did not contain reasonablegrounds to suggest that wages at NAV are discriminatory. Of course,given the length of time that has passed since the pay equity study con-ducted by JUMI, and given the different context within which the listedoccupational groups are now operating, PSAC must now establish in evi-dence the many facts it alleged for its section 11 complaint to continue.However, such considerations are not the concern of the Commission atthe section 41 stage.

VI. Disposition76 For the foregoing reasons, I would allow the appeal and set aside the

judgment of the Federal Court. Giving the judgment that the FederalCourt should have given, I would allow the application for judicial re-view in part. Having concluded that it was unreasonable for the Commis-sion to have dismissed the section 11 complaint against NAV as an indi-vidual employer under paragraph 41(1)(c), I would remit this portion ofPSAC’s complaint to the Commission for further proceedings under theCHRA. I would dismiss all other aspects of the application for judicialreview.

77 Given the parties’ mixed success, I would not award any costs.

David Stratas J.A.:

I agree.

Donald J. Rennie J.A.:

I agree.

Appeal dismissed.


[Indexed as: Mechanical Contractors Assn. Sarnia v. UA,Local 663]

Mechanical Contractors Association Sarnia, Applicant andUnited Association of Journeymen and Apprentices of thePlumbing & Pipefitting Industry of the United States and

Canada, Local 663 and George T. Surdykowski, Respondents

Ontario Superior Court of Justice (Divisional Court)

Docket: Toronto 494/13

2014 ONSC 6909

Sachs, Harvison Young, D.M. Brown JJ.

Heard: November 27, 2014

Judgment: November 27, 2014

Labour and employment law –––– Labour law — Labour arbitrations —Judicial review — Standard of review — Reasonableness –––– Arbitrationward arose out of policy grievance brought by union in response to association’sadoption of direction from SE Inc. that contractors providing goods or servicesto it in Canada, including its Sarnia facility, comply with SE Inc.’s “ContractorAlcohol and Drug Standard” — SE Inc.’s policy required implementation ofuniversal mandatory pre-access alcohol and drug testing — Arbitrator found thatpre-access alcohol and drug testing implemented in response to SE Inc.’s siteaccess requirements was contrary to collective agreement between associationand Ontario Pipe Trades Council and, as well, declared that such testing violateds. 5(1) of Human Rights Code — Arbitrator ordered all of association’s mem-bers to cease and desist from conducting pre-access alcohol and drug testing ofemployees assigned or referred to perform work under collective agreement —Employer’s association brought application for judicial review of arbitrator’saward, seeking to quash award — Application dismissed — Arbitrator foundthat there was no evidence of out-of-control or indeed any alcohol or drug cul-ture in any Sarnia area SE Inc. workplace and that there was not demonstrableneed for pre-access alcohol and drug testing in issue sufficient to justify signifi-cant invasion of privacy inherent in such testing — Arbitrator did not accordthat evidence weight association desired because evidence did not specificallyrelate to worksite, location relevant to assessment of reasonableness of pre-ac-cess testing rule — Under reasonableness standard, court could not re-weigh ev-idence — There was no need to address Human Rights Code issue.

Labour and employment law –––– Labour law — Discipline and termina-tion — Grounds — Alcohol and drugs — Testing –––– Arbitration ward aroseout of policy grievance brought by union in response to association’s adoption

Mechanical Contractors Assn. Sarnia v. UA 227

of direction from SE Inc. that contractors providing goods or services to it inCanada, including its Sarnia facility, comply with SE Inc.’s “Contractor Alcoholand Drug Standard” — SE Inc.’s policy required implementation of universalmandatory pre-access alcohol and drug testing — Arbitrator found that pre-ac-cess alcohol and drug testing implemented in response to SE Inc.’s site accessrequirements was contrary to collective agreement between association and On-tario Pipe Trades Council and, as well, declared that such testing violated s. 5(1)of Human Rights Code — Arbitrator ordered all of association’s members tocease and desist from conducting pre-access alcohol and drug testing of employ-ees assigned or referred to perform work under collective agreement — Em-ployer’s association brought application for judicial review of arbitrator’s award,seeking to quash award — Application dismissed — Arbitrator found that therewas no evidence of out-of-control or indeed any alcohol or drug culture in anySarnia area SE Inc. workplace and that there was not demonstrable need for pre-access alcohol and drug testing in issue sufficient to justify significant invasionof privacy inherent in such testing — Arbitrator did not accord that evidenceweight association desired because evidence did not specifically relate to work-site, location relevant to assessment of reasonableness of pre-access testingrule — Under reasonableness standard, court could not re-weigh evidence —There was no need to address Human Rights Code issue.

Cases considered by D.M. Brown J.:

Irving Pulp & Paper Ltd. v. CEP, Local 30 (2013), 2013 SCC 34, 2013 Car-swellNB 275, 2013 CarswellNB 276, [2013] S.C.J. No. 34, [2013] A.C.S.No. 34, 52 Admin. L.R. (5th) 1, 359 D.L.R. (4th) 394, (sub nom. CEPU,Local 30 v. Irving Pulp & Paper) 2013 C.L.L.C. 220-037, D.T.E. 2013T-418, (sub nom. Irving Pulp & Paper Ltd. v. Communications, Energy andPaperworkers Union of Canada, Local 30) 445 N.R. 1, (sub nom. IrvingPulp & Paper Ltd. v. Communications, Energy and Paperworkers Union ofCanada, Local 30) 1048 A.P.R. 1, (sub nom. Irving Pulp & Paper Ltd. v.Communications, Energy and Paperworkers Union of Canada, Local 30)404 N.B.R. (2d) 1, 231 L.A.C. (4th) 209, (sub nom. Communications,Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp &Paper Ltd.) 285 C.R.R. (2d) 150, (sub nom. Communications, Energy andPaperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd.)[2013] 2 S.C.R. 458, (sub nom. C.E.P.U., Local 30 v. Irving Pulp & Paper,Ltd) 77 C.H.R.R. D/304 (S.C.C.) — followed

Lumber & Sawmill Workers’ Union, Local 2537 v. KVP Co. (1965), 16 L.A.C.73, 1965 CarswellOnt 618, [1965] O.L.A.A. No. 2 (Ont. Arb.) — followed


Human Rights Code, R.S.O. 1990, c. H.19Generally — referred to


s. 5(1) — considered

APPLICATION for judicial review of decision of arbitrator that pre-access alco-hol and drug testing implemented in response to SE Inc.’s site access require-ments was contrary to collective agreement between association and OntarioPipe Trades Council and declaring that such testing violated s. 5(1) of HumanRights Code.

Richard J. Charney, Pamela C. Hofman, for ApplicantDavid P. Jacobs, Michael C.P. McCreary, for Respondent, United Association of

Journeymen and Apprentices of The Plumbing & Pipefitting Industry of theUnited States and Canada, Local 663

D.M. Brown J. (orally):

I. Introduction1 In this Application for Judicial Review the Mechanical Contractors

Association Sarnia seeks a declaration that the August 20, 2013 Awardof the arbitrator, George T. Surdykowski, is without legal force and ef-fect and an order quashing the Award.

2 The arbitration resulted from a December, 2012 policy grievancefiled by the Respondent Local in respect of the Applicant’s adoption of adirection from Suncor Energy Inc. that contractors providing goods orservices to it in Canada, including its Sarnia facility, comply with Sun-cor’s “Contractor Alcohol and Drug Standard” (the “Suncor Policy”).One of the requirements of the Suncor Policy was the implementation ofuniversal mandatory pre-aceess alcohol and drug testing. The grievanceconcerned the implementation of such testing for Suncor sites in theSarnia/Lambton area.

3 In the Award the Arbitrator declared that the pre-access alcohol anddrug testing implemented in response to Suncor’s site access require-ments was contrary to Article 10 of the Ontario Provincial CollectiveAgreement between the Applicant and the Ontario Pipe Trades Counciland, as well, declared that such testing violated section 5(1) of the On-tario Human Rights Code, The Arbitrator ordered all of the Applicant’smember employers to cease and desist from conducting pre-access alco-hol and drug testing of employees assigned or referred to perform workunder the Ontario Provincial Collective Agreement.

Mechanical Contractors Assn. Sarnia v. UA D.M. Brown J. 229

II Collective Agreement Issue

A. The standard of review4 As acknowledged by the parties, the applicable standard for review-

ing the decision of labour arbitrators is reasonableness. Courts are to paydeference to labour arbitrators’ legal and factual findings when they areinterpreting collective agreements. A court must approach the decision ofan arbitrator as an organic whole, without a line-by-line treasure hunt forerror. In the absence of finding that the arbitral decision, based on therecord, was outside the range of reasonable outcomes, the decisionshould not be disturbed: Irving Pulp & Paper Ltd. v. CEP, Local 30,2013 SCC 34 (S.C.C.), paras. 7, 16 and 54.

B. The legal test applied by the Arbitrator5 In the present case, the Arbitrator, when examining the Collective

Agreement Issue, applied the legal principles set out by the SupremeCourt of Canada in its 2013 decision in Irving Pulp & Paper Ltd..

6 In Irving Pulp & Paper, the Supreme Court of Canada observed thatthe dangerousness of a workplace, while highly relevant, marks only thebeginning of the inquiry into assessing the reasonableness of uni later-ally-imposed employer rules affecting employee privacy. The dangerous-ness of a workplace has never been found to be an automatic justificationfor the unilateral imposition of unfettered random testing with discipli-nary consequences. As noted by the Supreme Court of Canada, what hasbeen additionally required is evidence of enhanced safety risks, such asevidence of a general problem with substance abuse in the workplace:Irving Pulp & Paper, paragraph 31.

7 In tills case, the Applicant suggested that the analysis used in theIrving Pulp & Paper case was not applicable because there was a con-ceptual difference between random testing and the pre-access testing atissue in the Suncor Policy. We do not accept that submission. In IrvingPulp & Paper the Supreme Court of Canada distinguished between testswhich resulted from employee conduct and those which did not, such asrandom testing. In our view pre-access testing is much more akin to ran-dom testing than to conduct-based testing. The Arbitrator therefore posedthe appropriate question by using the accepted balancing of interests ap-proach which emerged from the KVP case (Lumber & Sawmill Workers’Union, Local 2537 v. KVP Co. (1965), 16 L.A.C. 73 (Ont. Arb.)) as de-scribed by the Supreme Court of Canada in Irving Pulp & Paper In thisregard, as discussed further in these Reasons, we reject the Applicant’s


submission that the Arbitrator re-framed the Irving Pulp & Paper test bybalancing profit against privacy, as opposed to safety against privacy.

C. The Arbitrator’s examination of the evidence8 The Arbitrator canvassed the risks that the employer intended to ad-

dress by pre-access drug and alcohol testing, considered whether therewas evidence of alcohol or drug-related problems in the workplace, andconsidered the impact of the testing policy rule on the employee’s rightsto privacy: Irving Pulp & Paper, paras. 44 through 50.

9 In his Award the Arbitrator conducted an extensive examination ofthe evidence and concluded that the Applicant’s evidence fell far short ofestablishing that there was any alcohol or drug problem at any Sarniaarea Suncor worksite which justified the implementation of the pre-ac-cess alcohol and drug testing in issue: Award, paragraph 172.

10 The Applicant took issue with the Arbitrator’s factual findings in twomain respects:

1. The Applicant submitted that three findings made by the Arbitra-tor were unsupported by the evidence; and;

2. The Applicant submitted that the Arbitrator unreasonably dis-counted evidence adduced by the Applicant thereby failing to takeinto consideration relevant factors.

Submission that certain findings were unsupported by the evidence11 First, the Applicant submitted that the Arbitrator found that member

contractors were motivated by profit, rather than safety, when they de-cided to implement pre-access testing, unreasonably “tipping the scale”against the Applicant.

12 It is true that the Arbitrator spent some time in the Award dealingwith the members’ motivation for implementing the Suncor Policy. Al-though the Arbitrator, in paragraph 210 of the Award, acknowledged thatmember employers in part were motivated by a concern about their em-ployees’ workplace health and safety, the Arbitrator did state that, in hisview, their primary motivating factor was the concern that they maintaintheir favourable competitive position with the site owners in the Sarniaarea relative to non-union contractors. Notwithstanding this treatment ofmotivation, a review of the Award as a whole discloses that the Arbitra-tor clearly focused on and considered the applicable analytical factorsidentified by the Supreme Court of Canada in the Irving Pulp & Papercase. Specifically, the Arbitrator found that there was no evidence of any


alcohol or drug problem at any Sarnia area Suncor worksite or even ofany health and safety incidents at any Sarnia area Suncor worksite:Award, paragraph 172. Based on the evidence which was placed beforethe Arbitrator, that conclusion was reasonably open to him to make in thecircumstances. Although the Applicant pointed to evidence of aboutthree incidents related to a Sarnia area Suncor site, the Arbitratorweighed that evidence and concluded that it did not satisfy the thresholdestablished by Irving Pulp & Paper. Under the reasonableness test it isnot the function of this Court to re-weigh evidence. Of particular impor-tance on this issue, in reviewing the evidence filed from Mr. Joe Vetrone,an officer at Suncor Energy Products Partnership, a subsidiary of SuncorEnergy Inc., the Arbitrator stated:

There is not a single word in Mr. Petrone’s will say statement whichsuggests that there is a substance abuse problem at any Suncor facil-ity in Sarnia/Lambton, much less one which demonstrably justifiesthe need for personally invasive pre-access alcohol and drug testing.[Award, paragraph 196].

That was an accurate summary of Mr. Petrone’s evidence. Consequently,regardless of the Arbitrator’s treatment of the evidence regarding the mo-tivation for implementing the pre-access testing, the Arbitrator’s conclu-sion on the Collective Agreement Issue was supported by evidence di-rectly material to the analysis required by the Irving Pulp & Paperdecision.

13 Second, the Applicant submitted that the Arbitrator conflated pre-ac-cess testing and random access testing. Such a conflation, in the Appli-cant’s submission, was a significant error because the jurisprudence sug-gested that there need not be a substance abuse problem to justify pre-access testing at safety-sensitive worksites. As discussed above, we seeno merit in that submission. In Irving Pulp & Paper the Supreme Courtof Canada stated:

[30] In a workplace that is dangerous, employers are generally enti-tled to test individual employees who occupy safety sensitive posi-tions without having to show that alternative measures have been ex-hausted if there is “reasonable cause” to believe that the employee isimpaired while on duty, where the employee has been directly in-volved in a workplace accident or significant incident, or where theemployee is returning to work after treatment for substance abuse...

That Court’s analysis disclosed that the reasonableness of other types oftesting, such as universal random testing, would have to be assessed us-ing the KVP balancing of interests approach. In his Award the Arbitrator


applied that approach to pre-access testing and, as already indicated, weare satisfied that his approach was reasonable.

14 Third, the Applicant submitted that the Arbitrator made a reversibleerror by treating the pre-access testing by member contractors as usingsaliva and oral fluid from employees when, in fact, such testing was per-formed by way of breath and urine samples. As the decision in IrvingPulp & Paper disclosed, that is a distinction without legal significancebecause the Supreme Court of Canada observed, in paragraph 50 of itsdecision, that the seizure of bodily samples, whether through testing byurine, blood or breath sample, was highly intrusive and a significant in-road on privacy.

Submission that the Arbitrator discounted certain evidence15 The Applicant, submitted that the Arbitrator unreasonably discounted

evidence about alcohol and drug use patterns in Southwestern Ontarioand evidence of alcohol and drug use in the Sarnia workforce, therebyrendering unreasonable his award by failing to take into account relevantfactors: Factum, paras. 53 to 61.

16 The Arbitrator examined this evidence at some length in paragraphs178 through 202 of his Award. It is clear from his review of the evidencethat the Arbitrator did not accord that evidence the weight desired by theApplicant because the evidence did not specifically relate to a SuncorSarnia area worksite, the location relevant to an assessment of the rea-sonableness of the pre-access testing rule. In light of the Supreme Courtof Canada’s analysis in Irving Pulp & Paper, the Arbitrator’s assessmentof the evidence from the perspective of its link to the Suncor Sarniaworksite was understandable and reasonable.

17 Again, it is important to emphasize that it is not this Court’s task tore-weigh evidence.

D. Summary18 In sum, after reviewing the evidence, the Arbitrator concluded that

there was “no evidence of an out-of-control or indeed any alcohol ordrug culture in any Sarnia area Suncor workplace” (Award, para. 209)and that there was not a demonstrable need for the pre-access alcohol anddrug testing in issue sufficient to justify the significant invasion of pri-vacy inherent in such testing (Award, para. 213).


19 Based on a review of the record, those conclusions of the Arbitratorcannot be said to lie outside the range of reasonable outcomes availablein the circumstances of this case.

III. The language used by the Arbitrator in the Award20 As a ground of review the Applicant submitted that the Arbitrator’s

use of “value-laden language, inflammatory terminology and sarcastictone would leave a reasonable person with the thought that the arbitratorwould not, either consciously or unconsciously, decide the merits fairlyand impartially”. The Applicant submitted that the Arbitrator’s writingstyle conveyed the impression that he was emotionally invested in gen-eral privacy policy.

21 In reviewing the Award as a whole we see no basis to accept the Ap-plicant’s submission that the Arbitrator did not maintain the appearanceof being a disinterested arbitrator. As the Irving Pulp & Paper decisionstressed, an integral part of the KVP balancing of interests analysis inrespect of the exercise of management disciplinary rights under a collec-tive agreement involves the consideration of the privacy interests of em-ployees, so it is understandable that the Arbitrator would spend time inhis Award addressing that important interest. Moreover, the Award dis-closed that the Arbitrator identified and applied the governing legal prin-ciples on the Collective Agreement Issue and conducted a detailed con-sideration of the evidence in light of those principles. As a result, we donot accept the Applicant’s submission that the language or the tone of theAward revealed any propensity by the Arbitrator to pre-judge the matterbefore him.

IV. Human Rights Code issue22 We have found that the decision of the Arbitrator in respect of the

Collective Agreement Issue was reasonable. That finding supports thefurther conclusion that the Applicant is not entitled to an order quashingthe relief granted in paragraph 224(d) of the Award that the Applicantand SCA Member Employers cease and desist from conducting pre-ac-cess alcohol and drug testing of employees assigned or referred to per-form work under the Provincial Collective Agreement. As that is a suffi-cient basis upon which to deal with this application for judicial review,we see no need to address the Human Rights Code issue raised by theApplicant.


V. Conclusion23 For those reasons, the application for judicial review is dismissed.

Sachs J.:

Costs24 I have endorsed the Application Record, “This application is dis-

missed for reasons given orally by D. M. Brown J. Pursuant to an agree-ment between the parties, the respondent does not seek costs and there-fore there will be no award as to costs.”

Application dismissed.

Symons v. Minister of National Revenue 235

[Indexed as: Symons v. Minister of National Revenue]

Kelly Symons, Appellant and The Minister of NationalRevenue, Respondent

Tax Court of Canada [Employment Insurance]

Docket: 2014-1966(EI)

2015 TCC 270

J.E. Hershfield J.

Heard: October 2, 2015

Judgment: November 2, 2015

Tax –––– Income tax — Employment income — Employee or independentcontractor –––– Taxpayer operated daycare out of her home in Quebec — Awas one of her workers, who had worked for taxpayer from March 2012 to June2013 — Daycare moved locations in January 2013 and ceased operations inJune 2013 — When operations of daycare ended, A applied for employment in-surance — Taxpayer refused to issue ROE on basis that A knew that she wasbeing retained as independent contractor — Canada Revenue Agency, underEmployment Insurance Act, found that from June 21, 2012 to June 28, 2013, Awas engaged in contract of service with taxpayer such that employer-employeerelationship existed and that A was thereby engaged in insurable employment —Taxpayer appealed — Appeal allowed — A was not employed in insurable em-ployment by taxpayer during relevant period — On analysis of applicable tests,there is no antimony between principles of Quebec civil law and those of com-mon law to be used to characterize nature of work relationship — A knew thatshe was, and acquiesced to, being engaged by taxpayer as independent contrac-tor — A’s conduct throughout period implicitly reflected that she agreed to beindependent contractor — A knowingly seized any tax advantage that mightarise from being independent contractor on basis that she had accepted terms ofoffer put to her at outset of engagement — Taxpayer and A were of same mindand intent that she was independent contractor — Tools were inconclusive fac-tors in consideration of A’s status — Tools were largely common householditems and A could and did supply materials that were tools of job — A had noquantifiable risk of loss other than having possibly allowed herself to be at tax-payer’s whim in terms of being guaranteed work — On evidence, it could not beestablished that rate of pay was negotiated — Taxpayer paid presumably com-petitive rate on basis of what she could afford to pay — A’s choice not to workon Mondays or Friday afternoons was decision to profit less from her engage-ment with taxpayer — A was at liberty to choose when to work and had no re-strictive covenants as to what type of work she could do on days she did not


work at taxpayer’s daycare — A’s testimony to effect that she was under super-vision of another worker at daycare was not accepted — Taxpayer was neverpresent, at relevant times, to impose supervisory role — A had none of trappingsof self-employed independent contractor, nor was there evidence that she tookadvantage of her freedom and experience to point of showing that she had busi-ness outside of her engagement with taxpayer — However, neither of these twofactors were fatal to finding that A was working for her own account — In cir-cumstances, there was basis for finding that A was working for her own account.

Cases considered by J.E. Hershfield J.:

D & J Driveway Inc. c. Ministre du Revenu national (2003), 2003 CAF 453,2003 CarswellNat 3785, [2003] F.C.J. No. 1784, 2003 FCA 453, 2003 Car-swellNat 4752, 322 N.R. 381 (F.C.A.) — considered

Grimard c. R. (2009), 2009 CAF 47, 2009 CarswellNat 323, 2009 FCA 47, 2009CarswellNat 692, (sub nom. Grimard v. R.) 2009 D.T.C. 5056 (Fr.), [2009] 6C.T.C. 7, (sub nom. Grimard v. Canada) 392 N.R. 252, (sub nom. Grimardv. Canada) [2009] 4 F.C.R. 592, [2009] F.C.J. No. 167, [2009] A.C.F. No.167 (F.C.A.) — followed

Hann c. Ministre du Revenu national (2013), 2013 CCI 359, 2013 CarswellNat4149, 2013 TCC 359, 2013 CarswellNat 4803 (T.C.C. [Employment Insur-ance]) — distinguished

Royal Winnipeg Ballet v. Minister of National Revenue (2006), 2006 FCA 87,2006 CarswellNat 492, 48 C.C.E.L. (3d) 163, 2006 C.L.L.C. 240-004, 2006D.T.C. 6323 (Eng.), 346 N.R. 276, 264 D.L.R. (4th) 634, 2006 CAF 87,2006 CarswellNat 2425, [2006] F.C.J. No. 339, [2007] 1 F.C.R. 35, [2008] 1C.T.C. 220 (F.C.A.) — considered

Wiebe Door Services Ltd. v. Minister of National Revenue (1986), [1986] 2C.T.C. 200, 46 Alta. L.R. (2d) 83, [1986] 5 W.W.R. 450, 1986 C.E.B. &P.G.R. 8023 (headnote only), 86 C.L.L.C. 14,062, 87 D.T.C. 5025, [1986] 3F.C. 553, 70 N.R. 214, 1986 CarswellNat 366, 1986 CarswellNat 699,[1986] 3 C.S. 553, [1986] F.C.J. No. 1052 (Fed. C.A.) — considered

Wolf v. R. (2002), 2002 FCA 96, 2002 CarswellNat 556, 2002 D.T.C. 6853,[2002] 3 C.T.C. 3, 2002 CAF 96, 2002 CarswellNat 1512, 288 N.R. 67,[2002] F.C.J. No. 375, (sub nom. Wolf v. Canada) [2002] 4 F.C. 396 (Fed.C.A.) — considered

671122 Ontario Ltd. v. Sagaz Industries Canada Inc. (2001), 2001 SCC 59,2001 CarswellOnt 3357, 2001 CarswellOnt 3358, 11 C.C.E.L. (3d) 1, [2001]4 C.T.C. 139, 204 D.L.R. (4th) 542, 274 N.R. 366, 17 B.L.R. (3d) 1, 55 O.R.(3d) 782 (headnote only), 150 O.A.C. 12, 12 C.P.C. (5th) 1, 8 C.C.L.T. (3d)60, [2001] S.C.J. No. 61, [2001] 2 S.C.R. 983, (sub nom. Sagaz IndustriesCanada Inc. v. 671122 Ontario Ltd.) 2002 C.L.L.C. 210-013, REJB 2001-25875, 55 O.R. (3d) 782, 2001 CSC 59, 55 O.R. (3d) 782 (note) (S.C.C.) —considered

Symons v. Minister of National Revenue J.E. Hershfield J. 237

1392644 Ontario Inc. v. Minister of National Revenue (2013), 2013 FCA 85,2013 CarswellNat 663, [2013] F.C.J. No. 327, 2013 C.L.L.C. 240-004, 358D.L.R. (4th) 363, 7 C.C.E.L. (4th) 303, 444 N.R. 163, 2013 CAF 85, 2013CarswellNat 6944 (F.C.A.) — considered


Code civil du Quebec, L.Q. 1991, c. 64en general — referred toart. 1425 — consideredart. 1426 — consideredart. 2085 — consideredart. 2086 — consideredart. 2098 — consideredart. 2099 — considered

Employment Insurance Act, S.C. 1996, c. 23Generally — referred to

Interpretation Act, R.S.C. 1985, c. I-21s. 8.1 [en. 2001, c. 4, s. 8] — considered

APPEAL by taxpayer from finding by Canada Revenue Agency that worker wasemployed in insurable employment during relevant period.

Appellant, for herselfGabrielle White, for Respondent

J.E. Hershfield J.:

I. Background1 The Appellant, Ms. Kelly Symons, operated a Montessori Day Care

out of her home in Montreal. One of her Montessori Day Care workers,Berenice Aguilar, (the “Worker”), worked for the Appellant from March20, 2012 through to June 2013.

2 While this was the uncontested engagement period alluded to at thetrial, a ruling made by the Canada Revenue Agency (the “CRA”) underthe Employment Insurance Act (the “EIA”) for the period June 21, 2012to June 28, 2013 (the “Period”) found that the Worker was engaged in acontract of service with the Appellant such that an employer-employeerelationship existed and that the Worker was thereby engaged in insura-ble employment.


II. Issue3 The principal issue in this appeal is whether the Worker was em-

ployed in insurable employment with the Appellant during the Period.4 A related issue is the impact of the Civil Code of Quebec on the prin-

cipal issue.

III. The Appellant’s Testimony5 The Appellant testified that she opened the Montessori Day Care in

2008 as a sole proprietorship.1 It operated from inception out of herhome until January 2013 when it moved to an apartment where she thenresided having sold and vacated her home in December of 2012.

The Montessori Approach6 The Appellant explained that calling her day care a Montessori Day

Care did not mean that there was any formal or licensed association withthe Montessori name. She explained that Montessori was an individualwho advocated a philosophy of teaching young children. A day care orpre-school could adopt such a philosophy and use the name as a means tocommunicate adherence to the philosophy in the operation of a day careor pre-school.

7 Workers engaged by the Appellant did not necessarily need formaltraining. A worker only needed experience with and an understanding ofthe Montessori philosophy, being the teaching approach adopted by theAppellant at her day care. As described, the workers at the Appellant’sday care were more than babysitters, they were teacher-caregivers.

8 The Montessori philosophy was explained by the Appellant. It is anapproach aimed at exposing children during play to materials and objectsof everyday life, under the guidance of a worker who would help thechildren utilize these materials to further their development. Adherenceto this teaching approach did not require compliance with a rigid format.

1 It also appeared from the evidence that, in fact, she had a friend who lived ather residence and who helped prepare the meals for the children at the day care.According to the Worker, he was the person who first interviewed her by tele-phone. The Appellant stated at one point that she considered him a partner in thebusiness. He left the scene about the time the Appellant sold her residence. Re-gardless, his status has really no bearing on the outcome of this appeal.


This afforded a worker considerable latitude to perform duties withoutsupervision. This type of environment invites worker creativity.

9 The Appellant acknowledged that she supplied the workers with a va-riety of materials used or consistent with those used in the Montessoriapproach. However, workers were encouraged to bring objects to the daycare that could be utilized as a teaching tool. The Appellant might alsoadd materials if requested by a worker.

10 An example of an object that would be used as a teaching tool was acarpet. Children could be asked to roll a small piece of carpet. The exer-cise would allow the child to experience an object encountered in every-day life. This was the type of association with an object that is what theday care strived for and, as well, rolling it was an activity that wouldenhance motor skills. Such activities were employed by the workers in anunstructured, un-programmed fashion.

The Business11 The Appellant explained that the day care operated five full days a

week. The worker-child ratio mandated by law before the move in Janu-ary, when there were 6 to 9 children enrolled, required two workers to beengaged. Only one worker was required after the change in premiseswhen enrollment was reduced to 4 or 5 children.

12 The Appellant explained that when the Worker commenced workingfor the day care, she worked with a second worker (Shraddha Gadigone)who had been with the day care for a long time prior to the commence-ment of the services of the Worker. They each worked with a separategroup of children although when the Worker first started, a large part ofthe house was available to the children with no separate area for distinctgroups differentiated by age or stage of development. Sometime after theWorker started, the Appellant moved out of the house and her bedroombecame available as a separate room for use by the day care. The Workertook charge of the younger children and utilized, on a completely sepa-rate basis, the bedroom while the other co-worker utilized the other partof the house for the older children. The Appellant described the relation-ship between the two workers as being largely independent particularlyonce the separate areas were available. The Appellant denied theWorker’s contention that there was a hierarchy between the two workersduring the first part of the Period when they both worked at the day care.There was no disagreement that the Worker worked alone during the sec-ond part of the Period.


13 The Appellant testified that there were no performance guidelines,rules of conduct or any other attempt to provide supervision. The guidingprinciples for the conduct of a worker’s services were the Montessoriphilosophy and approach. That is what governed the daily activities ofthe children. The workers were not under any instructions per se. Thedaily activities were at the planning and discretion of the worker. Therewas no schedule of activities.

14 While I have described the work of workers at the Appellant’s busi-ness in broad terms, it was acknowledged by the Appellant that therewere certain duties that were required to be performed. The duties of theworkers taken from the assumptions set out in the Reply and acknowl-edged by the Appellant include:

• Babysitting the children;

• Planning and supervising activities for the children;

• Changing diapers;

• Applying the standard methods of Montessori.

Other assumptions acknowledged by the Appellant include:

• The Worker was paid an hourly rate of between $12 per hour and$15 per hour.

• The Worker was paid for breaks, lunches and statutory holidaysand was provided coverage by the Appellant for the Quebecequivalent of Workers Compensation. There were no health bene-fits, vacations or bonuses.

• The clients of the day care were those of the Appellant.

• There were no fees or taxes withheld by the Appellant.

• The Appellant determined the prices for the day care services.

• The Worker did not have a business name, did not have businesscards and was not registered with a GST number.

• The Appellant did not issue any T4 or T4A slips.15 When asked about the work schedule of the Worker, the Appellant

acknowledged that during 2012, the Worker attended on a regular basiswith a few exceptions where she was not available for personal reasons.During such occasions, the Appellant found a replacement. The Appel-lant was quite assertive that the Worker was always at liberty to choosewhen she would work. During the 2013 part of the Period, for example,the Worker did not work Mondays and Friday afternoons.


16 The Appellant testified that the Worker, like all workers engaged bythe business, had complete flexibility as to the days and hours that shecould work. I note here that the Reply, under the heading “Control”, atparagraph (v), acknowledged, as an assumption, the following:

(v) the Worker’s schedule was based on the needs of the business andthe Worker’s availability.

17 The Appellant testified that she had a list of workers that would sub-stitute in the event that a worker who was scheduled for a particular timebecame unavailable. The Appellant testified that the Worker had beenunavailable on some occasions for personal reasons and that in thosecases the Appellant arranged for a substitute.

18 The Appellant testified that she had no opportunity to assess the dailyperformance of a worker. She was either a full-time student or engagedin other employment throughout the Period. She would greet the parenton arrival and try to be there when the children were picked up. Sheacknowledged that if there were any incidents at the school or complaintsthe parents would deal with the Appellant and not with the worker.

19 The Appellant was absent during the operation of the day care; therewas no supervision of its workers. She played no supervisory role in theway in which workers performed their duties.

20 Occasional meetings were held at the Appellant’s home or at a restau-rant which meetings were just to afford the Appellant and the workers anopportunity to talk about how the day care was doing but there was noguidance or instruction given to the workers.

21 After the house was sold, the Appellant was ready to close down thebusiness but was encouraged by some parents to keep it open until theend of the school year. The Appellant did so and the Worker then be-came the sole provider of the services. Lunches were no longer servedand these savings were passed on to the Worker by an increase in herhourly rate.

Retention of the Worker22 The Appellant testified that she advertised for workers on-line princi-

pally on Kijiji or Craigslist. The advertisement requested a Montessoritrained day care teacher. Applications were received on-line and subse-quently weeded out. From perhaps some 20 applications there would befour or five telephone interviews. This was how the Worker came to beengaged. The Appellant testified that she conducted the Worker’s inter-view, during which the Worker explained her work experience and the


Appellant described the work expectations and pay arrangement. TheAppellant said that she made it clear to the Worker that she was beingretained as an independent contractor.

23 The experience that impressed the Appellant was that the Worker hadspent four years in Germany as a Montessori teacher and although shehad had no formal training, this experience justified the retention of theWorker’s services.

24 In an effort to support the Appellant’s strong assertions that shewould have made it clear that the Worker was being retained as an inde-pendent contractor, she tendered several email exhibits only one ofwhich was an email exchange between the Worker and the Appellant.That email exchange was on June 19 and June 20, 2013. The Worker hadenquired about obtaining a record of employment (ROE). The Appellantwrote that she was sending the invoice for 2013 which would suffice asan earnings record for tax purposes and that there would be no ROEsince she, the Worker, was an independent contractor. The Appellantwent on in the email to explain how, for tax purposes, she reported herpayments to the Worker as a business expense and how the Worker, as acontractor, was her own employer. She asked if this made sense. TheWorker replied “All seems good to me”.

25 The balance of the exhibits tendered by the Appellant were lettersfrom 5 other workers, indicating that their engagement was clearly on thebasis of an independent contractor relationship, which was made abso-lutely clear from the outset, and mutually agreed upon and understood byboth parties. One such letter was from Ms. Gadigone.2

26 The Appellant insisted that the Worker, like these other workers, hadalso agreed from the outset to an independent contractor engagement.

2 Being an appeal under the Informal Procedure no challenge was made to theadmission of these letters, although, counsel for the Crown did suggest that theletters had such degree of similarity that might lead one to conclude that theyhad been coached by the Appellant as to the desired content. While the reliabil-ity of and the weight given to these letters is less than it might be if the authorswere at the hearing to be examined and cross-examined, I have no reservationsin saying that I do not find counsel’s suggestion very persuasive. That is, itstrikes me more likely than not that the authors of these letters were totally on-side to being independent contractors and that that was the engagement agreedto at the outset.


IV. Worker’s Testimony27 The Worker described herself as an educator and acknowledged that

she applied for the job through Craigslist and had provided her curricu-lum vitae on-line. She testified that she was interviewed by telephone bya Mr. Tom Bauer who, as acknowledged at the hearing, was the gen-tleman who lived at the Appellant’s residence and was the person whoprepared the lunches.

28 The Worker testified that Mr. Bauer did not talk about the issue ofindependent contractor versus employee. She testified that the telephoneinterview was long and in her mind somewhat peculiar as if Mr. Bauerwas flirting with her as opposed to interviewing her. In any event, anappointment was set up at which time she said she met Mr. Bauer and theAppellant.

29 The Worker testified that she does not remember the details of hermeeting with the Appellant, but she did remember that she was told thatthe other worker, Ms. Gadigone, was the head teacher and that she, theWorker, would be paid $12 per hour.3

30 The Worker testified that she did her work more in the way of anassistant to Ms. Gadigone who was in charge of the schedule and theroutine in terms of activities including when certain activities would oc-cur such as nap time, music time, lunch time and outside play times. Thatis, the Worker’s testimony was that she followed along with what Ms.Gadigone did.

31 The Worker admitted that she did bring some educational materials ofa show and tell nature such as maps or pictures of sea animals.

32 She testified that she was never asked to replace herself and nevercontacted others to be replacements. She testified that she did not have alist of possible replacement persons.

33 She acknowledged that she was familiar with the Montessori methodsand carried out her duties allowing children the freedom of choice inwhat they wanted to do, but she encouraged use of materials that theywould encounter in their environment and in practical life. She gave anexample of how she would give them an opportunity to pour water in aglass, water that might be coloured by say a hint of tea so that they could

3 The Worker started work in March for what would appear from Exhibit R-1 tobe one week. This appears to have been a week of observation when she waspaid $11 per hour.


see what was occurring in the pouring motion as they enhanced their mo-tor skills.

34 She said she became aware that there was going to be changes in theoperation of the day care as early as September 2012 when she saw a“For Sale” sign up at the residence but that she was not told until Christ-mas of 2012 that the day care would be moved to the Appellant’s rentalapartment in January of 2013. Ms. Gadigone did not want to stay on afterthe move. The Worker however did agree to stay on until the day careclosed at the end of June 2013. Other than being the sole worker, work-ing at a new premises, her role did not change.

35 The Worker implicitly denied that she negotiated an increase in herpay once she became the sole teacher.

36 When the operations of the day care ended, the Worker applied foremployment insurance and that required an ROE. She testified that shehad not addressed that prior to visiting with the employment office andwhen she requested same from the Appellant, the Appellant refused andtold her that she knew all along that she was being retained as an inde-pendent contractor and that this had been made clear from the start.

37 In response to the Appellant’s testimony that the Worker took Mon-day and Friday afternoons off during the latter part of the contract, theWorker testified that she did not take Mondays off. However, after ini-tially being quite insistent about that, the Worker later testified that shethought that she did work “some Mondays”.

38 The Worker also described her work experience prior to going to Ger-many where she had worked in a day care utilizing the Montessori meth-ods. That prior work experience was as a provincial government em-ployee for 12 years. She acknowledged that she received T4s throughoutthat period.

39 When reporting her income for the day care work, she acknowledgedthat for 2012, she reported it other than as an employee. At first she testi-fied that she and her accountant had tried to make inquiries to find outhow she should report it, and eventually her accountant said she shouldreport it as an independent contractor. A short time after that particularstatement in her testimony, she corrected herself and said that shethought she reported under a line in the return that said “other income”.


V. Analysis40 I will deal firstly with the impact of the Civil Code of Quebec on the

determination of an employee versus an independent contractor. At thehearing my attention was drawn to certain provisions of the Code and totwo cases that dealt with this related issue, namely: Hann c. Ministre duRevenu national4 (Hann) and Grimard c. R.5 (Grimard).

41 The statutory provisions that I was referred to (by way of reference toportions of the Federal Court of Appeal (FCA) decision in Grimard) areas follows:

Interpretation Act

8.1 Both the common law and the civil law are equally authoritativeand recognized sources of the law of property and civil rights in Can-ada, and unless otherwise provided by law, if in interpreting an en-actment it is necessary to refer to a province’s rules, principles orconcepts forming part of the law of property and civil rights, refer-ence must be made to the rules, principles and concepts in force inthe province at the time the enactment is being applied.

Civil Code of Quebec

1425. The common intention of the parties rather than adherence tothe literal meaning of the words shall be sought in interpreting acontract.

1426. In interpreting a contract, the nature of the contract, the cir-cumstances in which it was formed, the interpretation which has al-ready been given to it by the parties or which it may have received,and usage, are all taken into account.

2085. A contract of employment is a contract by which a person, theemployee, undertakes for a limited period to do work for remunera-tion, according to the instructions and under the direction or controlof another person, the employer.

2086. A contract of employment is for a fixed term or an indetermi-nate term.

2098. A contract of enterprise or for services is a contract by which aperson, the contractor or the provider of services, as the case may be,undertakes to carry out physical or intellectual work for another per-

4 Hann c. Ministre du Revenu national, 2013 TCC 359 (T.C.C. [EmploymentInsurance]).5 Grimard c. R., 2009 FCA 47, 2009 D.T.C. 5056 (Fr.) (F.C.A.).


son, the client or to provide a service, for a price which the clientbinds himself to pay.

2099. The contractor or the provider of services is free to choose themeans of performing the contract and no relationship of subordina-tion exists between the contractor or the provider of services and theclient in respect of such performance.

42 Determining the impact of the provisions of the Civil Code on thedecision making process in this appeal will depend on whether they alterthe common law analysis applicable to similar cases in the rest ofCanada.

43 The Federal Court of Appeal decision in Grimard, made it clear thatthe principles of Quebec civil law on the issue of determining an employ-ment relationship are not at odds with those applied at common law,namely those set out in Wiebe Door Services Ltd. v. Minister of NationalRevenue6 (Wiebe Door).

44 At paragraph 43 Letourneau, J.A. in Grimard noted: In short, in my opinion there is no antinomy between the principlesof Quebec civil law and the so-called common law criteria used tocharacterize the legal nature of a work relationship between two par-ties. In determining legal subordination, that is to say, the controlover work that is required under Quebec civil law for a contract ofemployment to exist, a court does not err in taking into considerationas indicators of supervision the other criteria used under the commonlaw, that is to say, the ownership of the tools, the chance of profit, therisk of loss, and integration into the business.

45 The principle of using the same tests in civil law as apply in commonlaw is not new. In Wolf v. R.7 (Wolf) there were three judgments concur-ring in result only. While the reasons of all three judgments applied, tosome extent at least, common law tests, Desjardins, J.A. comes the clos-est to saying that there is no antinomy between the principles of Quebeccivil law and common law criteria. At paragraph 49 he states that theissue can be examined in the light of tests developed in both jurisdic-tions. All three judges appear to concur that the relationship as a wholemust be considered.

46 My only remaining comment on the tests to be applied in each juris-diction is the relevance of the intention of the parties.

6 [1986] 2 C.T.C. 200 (Fed. C.A.).7 Wolf v. R., 2002 D.T.C. 6853 (Fed. C.A.).


47 Grimard makes reference to the importance of the intentions of theparties, but there is no express requirement, in that decision, that thestarting point in the analysis must be the intention of the parties, as soclearly stated in 1392644 Ontario Inc. v. Minister of National Revenue8

(Connor), a common law decision. In that case the FCA confirmed thatthe professed intentions of the parties will not govern if an analysis of theactual relationship suggests otherwise, but the first step of the analysis isto determine the intent of the parties and then, using the prism of thatintent, determine, in a second step, whether the parties’ relationship, asreflected in objective reality, is one of employer-employee or of indepen-dent contractor. Such objective reality would be viewed under the lens ofthe Wiebe Door factors and the 671122 Ontario Ltd. v. Sagaz IndustriesCanada Inc.9 approach. The civil law approach does not ignore inten-tions as noted at paragraph 33 of Grimard, but I find no mandate in thatdecision that a determination of intention must be the starting point in theanalysis as was so strictly employed in Connor.

48 Admittedly, I am puzzled by how the nature of a relationship objec-tively determined might be differently determined depending on whereone starts the analysis. Whether or not there is a finding of a consensusas to the contractual intent of the parties, the exercise, or so it seems tome, will be largely the same in both jurisdictions; namely, to determinethe nature of the relationship objectively, applying the common and civillaw jurisprudence applicable to each jurisdiction (which are not dissimi-lar or at odds). Put another way, the principle of requiring an objectiveanalysis of the relationship does little in my view to elevate the intentionof the parties as the most relevant factor and thereby the starting point. Imake this observation knowing that I am bound by the decision and ap-proach of Connor in a common law case. I am less certain that it is therequired approach in Quebec. More likely, the requirement in civil law isto consider the case as a whole, applying common and civil law princi-ples, which includes considering the weight to be given to assertedintentions.10

8 1392644 Ontario Inc. v. Minister of National Revenue, 2013 FCA 85 (F.C.A.).9 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59 (S.C.C.).10 For example in Hann, Justice Favreau, trained in civil law, paid heed to theCivil Code and commenced his discussion considering the issue of control. Aftermaking a decisive determination of that issue in favour of employment, he noted


49 While I see no difference in the outcome in the case at bar, whether ornot I start with intentions, I will do so on the basis that it is not likelyobjectionable under civil law. Put like that, I believe my approach wouldbe in accord with the opinion expressed by Letourneau J.A. in Grimardthat there is no antinomy between the principles of Quebec civil law andthose of the common law used to characterize the nature of a workrelationship.

Intentions50 While I acknowledge that the testimony of both witnesses was self-

serving, I am inclined to believe that the Worker knew she was, and ac-quiesced to, being engaged by the Appellant as an independent contrac-tor. That is, I do not find that the Worker’s testimony, that she does notremember being told that she was not being retained as an employee,reliable. Similarly, I find that her conduct throughout the Period implic-itly reflects that she agreed to be an independent contractor. I find noevidence of duress. I do not find her testimony, that she did not remem-ber being told that one of the terms of the offer of engagement includedher acceptance of being an independent contractor, credible. On a bal-ance of probability, I find that she knowingly seized any tax advantagethat might arise from being an independent contractor on the basis thatshe had accepted the terms of the offer put to her at the outset of herengagement. I cannot help but distrust her evidence that she was con-fused about the tax status of her earnings. To the contrary, as I said, it ismore credible that she knowingly took full advantage of her self-em-ployed status for tax purposes. She is not unsophisticated. I found her tobe quite clever in seeking to turn the tables on the Appellant for her ownadvantage. As a civil servant for the province of Quebec for over a dec-ade she would have known that the way she was being paid was notconsistent with her being considered an employee. Her acquiescence to,indeed acceptance of, the arrangement in my view constituted an agree-ment to be so engaged. The Worker and Appellant were ad idem — ofthe same mind and intent that she was an independent contractor.

51 I will turn now to consider the objective reality of this relationshipapplying the traditional tests.

briefly at paragraph 27, that regardless of intentions, the objective reality wasone of employer-employee.


Tools52 The evidence before me was minimal. If the tools were largely com-

mon household type items as I was led to believe, I cannot find the Ap-pellant’s supply of them to have too much significance. As well, it wasadmitted that the Worker could and did supply materials that were thetools of the job.

53 I would add here that the tools in this case do not reveal any sense ofcontrol or subordination by the Appellant over the Worker. Nor do theyspeak so loudly as to suggest that the Worker had no business of herown. Teachers who have no supplies, no teaching materials, have themost relevant and essential tool of their trade — their personal skill,knowledge and experience. The Worker had these tools to be an indepen-dent Montessori teacher/contractor.

54 While the premises in which the Worker’s trade is carried out is notconsidered a tool per se, I note here that I could list dozens of contractorjobs that can only be performed at the premises of the party paying fortheir services. To name one, consider that the dancers of the Royal Win-nipeg Ballet were found to be independent contractors notwithstandingthat their work could only be performed at the premises of the Balletcompany.11

55 This factor is inconclusive of the Worker’s status.

Opportunity for Profit/Risk of Loss56 The Worker here has no quantifiable risk of loss other than having

possibly allowed herself to be largely at the whim of the Appellant interms of being guaranteed work. In Wolf, job security was considered anindicia of employment. Both Decary J.A. at paragraph 120 and Noel J.A.at paragraph 123 make this observation. There was no job security in thecase at bar.

57 The only factor that speaks to the chance for profit, is the hourly rateearned by the Worker and the number of hours worked. I cannot find onthe evidence that the rate of pay was negotiated. The Appellant paid whatshe could afford to pay at a rate that was presumably competitive. TheWorker knowingly accepted a rate of pay that the Appellant could offerto pay but she could clearly make more or less money depending on

11 Royal Winnipeg Ballet v. Minister of National Revenue, 2006 D.T.C. 6323(Eng.) (F.C.A.).


when she chose to work. During the second part of her engagement,when she was the sole teacher, she was still given the freedom to chooseher working days. Choosing not to work Mondays or Friday afternoonswas a decision to profit less from her engagement with the Appellant.

58 A Worker who is at liberty to choose when to work (as admitted inthe Reply), and who has given no restrictive covenants, has the liberty tochoose where to work. There is no evidence as to what the Worker didon Mondays in 2013, but if she had an opportunity to substitute at a dif-ferent day care on Mondays for better pay, her engagement with the Ap-pellant would not prevent it. Employees do not generally enjoy such free-dom. An arrangement that offers such freedom speaks loudly as anindependent contractor arrangement. It allows for greater earning poten-tial and allows the Worker to have a business of her own. Still, thischance of gain factor, in the circumstances of an hourly worker, wouldnot generally be compelling in terms of applying this test in favour of theAppellant.

59 In any event there is no evidence before me of the Worker havingother contracts or even having sought them. Without that, I cannot makea finding in this case that the opportunity for profit/risk of loss test asapplied in the Wiebe Door/Sagaz tests assists the Appellant. That is, thisfactor is inconclusive of the Worker’s status.

Control/Supervision60 The Respondent places weight on the Workers’ subordinate role to

Ms. Gadigone. In this regard counsel for the Respondent relies on thesimilar facts dealt with in Hann where the worker was an assistant toanother worker. In that case the worker’s evidence was found to be morereliable. That is not the case here.

61 I do not accept the Worker’s testimony on this point — that she wasunder the supervision of Ms. Gadigone. I accept that the Worker was acapable Montessori teacher and that she was hired on that basis. I do notaccept her testimony that she was instructed to regard Ms. Gadigone asthe head teacher in any sense that would make her a subordinate.

62 The Appellant was never present, at relevant times, to impose a su-pervisory role. The teaching philosophy was external to the Appellant’sbusiness. The Worker was free to invoke the teaching techniques of thatphilosophy in the daily routines of the children in whatever manner shepleased. The desired result of the teaching method employed was only


assured by the talents of the Worker — working unsupervised withoutsubordination. She was free to work or take days off without restriction.

63 I have referred to the Federal Court of Appeal in the Royal WinnipegBallet decision. At paragraph 66, Justice Sharlow J.A. noted that if aguest dancer, who performed the same role with a consistent degree ofcontrol as a regularly engaged dancer, could be regarded as an indepen-dent contractor, then the impact of the element of control should not dif-fer for a regularly engaged dancer. Likewise, if the Worker was occa-sionally engaged as an independent contractor by the Appellant andrequired no more supervision than while engaged on a more regular basisthen the legal nature of the relationship should be the same. This is con-sistent with findings in cases like Wolf where specialized or professionalskill sets are required and a worker, retained to do a job, is found not tobe an employee based largely on the fact that the party retaining the ser-vices cannot control the manner in which the job is done. Such findingsare not adversely affected by risk of loss being limited due to the workerbeing paid an hourly wage or by the provision of tools being the respon-sibility of the party engaging the services. The case at bar, in my view,should be treated similarly.

64 Accordingly, I find this factor favours, by a considerable margin, afinding of an independent contractor relationship between the Workerand the Appellant.

Integration/Whose Business is it/Does the Worker Have a Business65 That the most compelling factors in the case at bar are the absence of

supervision and control allowed by the experience of the Worker and herfreedom to take that experience to another day care at any time theWorker saw fit, if the opportunity presented itself, lends itself to a find-ing that the Worker is working for her own account.

66 It is true that she had none of the trappings of a self-employed inde-pendent contractor. Nor is there evidence that she took advantage of herfreedom and experience to the point of evidencing, in any concrete way,that she had a business outside of her engagement with the Appellant.However, neither of these considerations are fatal to a finding that theWorker was working for her own account.

67 The absence of business trappings in some enterprises are not neces-sarily indicative of there being no business. For example, in D & J


Driveway Inc. c. Ministre du Revenu national12 at paragraph 13, the Fed-eral Court of Appeal found that one should not think of an enterprise asneeding to be an organized commercial undertaking. As well, that an in-dependent contractor who only works for one enterprise for a period oftime, might only indicate that that enterprise offers enough work on satis-factory terms as to give the worker no cause to seek other contracts dur-ing that time.

68 Based on the foregoing, I find, in the circumstances of this case, that Iam not dissuaded from allowing that the Worker was working for herown account.

VI. Conclusion69 I find that the common intention of the Worker and the Appellant

here was to enter into a contract for services and that that was, viewedobjectively, on a balance of all factors considered, the true nature of theengagement.

70 I also wish to add for the sake of completeness, that if the civil lawtest requires focus on the degree of control and subordination tested bylooking at the entire picture through the lens of common and civil lawtests including intentions, then, on a balance of all factors considered, Iwould also find that the true nature of the engagement of the Worker washaving been engaged as an independent contractor in a contract forservices.

71 The appeal is therefore allowed, without costs.

Appeal allowed.

12 D & J Driveway Inc. c. Ministre du Revenu national, 2003 FCA 453(F.C.A.).

Smith v. Mistras Canada, Inc. 253

[Indexed as: Smith v. Mistras Canada, Inc.]

Lewis Anthony Smith, Plaintiff and Mistras Canada, Inc.,Defendant

Alberta Court of Queen’s Bench

Docket: Calgary 1201-15786

2015 ABQB 673

J.H. Goss J.

Heard: September 28-October 1, 2015

Judgment: October 23, 2015

Labour and employment law –––– Employment law — Termination and dis-missal — Termination of employment by employee — Resignation — Quitvs. fired –––– Employer carried on business of non-destructive testing and in-spection of oil, gas pipe and industrial systems — Employee worked for em-ployer for 8 years and was responsible for client relations with goal of increas-ing revenue of company by promoting products and services — Employee sawdoctor due to insomnia, depression and fatigue — Employer received telephonicreport from doctor, about employee’s non-work related health issue and noteindicated that employee would be absent for indefinite time period, due to medi-cal reasons — Employee was dismissed — Employee brought action for wrong-ful dismissal — Action allowed — Employee was entitled to nine months’ no-tice — Employee was awarded $59,131.61 in damages — Employee could havedone more to communicate with management regarding his indefinite absencefor medical reasons — But employee’s actions did not signify intention to aban-don his employment and there was no objective basis upon which managementteam could have so concluded in five days — Employer had group plan includ-ing short and long term disability insurance benefits for its employees, leadingto clear conclusion that employer anticipated that employees may occasionallybe absent on short and long term disability leaves.

Cases considered by J.H. Goss J.:

Assouline v. Ogivar Inc. (1991), 39 C.C.E.L. 100, 1991 CarswellBC 873, [1991]B.C.J. No. 3419 (B.C. S.C.) — referred to

Bardal v. Globe & Mail Ltd. (1960), [1960] O.W.N. 253, 24 D.L.R. (2d) 140,[1960] O.J. No. 149, 1960 CarswellOnt 144 (Ont. H.C.) — referred to

Baxter v. Montreal Engineering Co. (1986), 1986 CarswellOnt 5752, [1986]O.J. No. 176 (Ont. H.C.) — considered

Chand v. Craftsman Collision Ltd. (2007), 2007 BCPC 11, 2007 CarswellBC120, [2007] B.C.J. No. 115 (B.C. Prov. Ct.) — referred to


Christianson v. North Hill News Inc. (1993), 13 Alta. L.R. (3d) 78, 106 D.L.R.(4th) 747, 145 A.R. 58, 55 W.A.C. 58, 49 C.C.E.L. 182, 1993 CarswellAlta116, [1994] L.V.I. 2564-1, [1993] A.J. No. 672 (Alta. C.A.) — considered

Danroth v. Farrow Holdings Ltd. (2005), 2005 BCCA 593, 2005 CarswellBC2977, 47 B.C.L.R. (4th) 56, 219 B.C.A.C. 151, 361 W.A.C. 151, [2005]B.C.J. No. 2674 (B.C. C.A.) — referred to

Dorion v. Stewart, Weir Land Data Inc. (1996), 23 C.C.E.L. (2d) 233, 191 A.R.214, 1996 CarswellAlta 845, [1996] A.J. No. 936 (Alta. Q.B.) — considered

Evans v. Teamsters, Local 31 (2008), 2008 SCC 20, 2008 CarswellYukon 22,2008 CarswellYukon 23, 65 C.C.E.L. (3d) 1, 2008 C.L.L.C. 210-019, [2008]S.C.J. No. 20, 292 D.L.R. (4th) 577, 374 N.R. 1, 253 B.C.A.C. 1, 425W.A.C. 1, D.T.E. 2008T-400, [2008] 1 S.C.R. 661 (S.C.C.) — referred to

Fitzgibbons v. Westpres Publications Ltd. (1983), 50 B.C.L.R. 219, 3 D.L.R.(4th) 366, 1983 CarswellBC 403, [1983] B.C.J. No. 164 (B.C. S.C.) —considered

Forshaw v. Aluminex Extrusions Ltd. (1989), 39 B.C.L.R. (2d) 140, 27 C.C.E.L.208, 1989 CarswellBC 153, [1989] B.C.J. No. 1527 (B.C. C.A.) — referredto

Fortier v. Spafax Canada Inc. (1998), 1998 CarswellOnt 2968, [1998] O.J. No.3016, 71 O.T.C. 47 (Ont. Gen. Div.) — referred to

Hart v. EM Plastic & Electric Products Ltd. (2008), 2008 BCSC 228, 2008 Car-swellBC 354, 2008 C.L.L.C. 210-015, [2008] B.C.J. No. 316 (B.C. S.C.) —considered

Heslop v. Cooper’s Crane Rental Ltd. (1994), 6 C.C.E.L. (2d) 252, 1994 Cars-wellOnt 992, [1994] O.J. No. 2120 (Ont. Gen. Div.) — considered

Heslop v. Cooper’s Crane Rental Ltd. (1997), 1997 CarswellOnt 2174, 30C.C.E.L. (2d) 279, [1997] O.J. No. 2520 (Ont. C.A.) — referred to

Husband v. Labatt Brewing Co. (1998), 1998 CarswellBC 2286, [1998] B.C.J.No. 3193 (B.C. S.C. [In Chambers]) — considered

Hyland v. Advertising Directory Solutions Inc. (2014), 2014 ABQB 336, 2014CarswellAlta 1004, 2 Alta. L.R. (6th) 348 (Alta. Q.B.) — referred to

Jokic v. Larry Sommers Ltd. (1995), 13 C.C.E.L. (2d) 257, 1995 CarswellOnt292, [1995] O.J. No. 2390 (Ont. Small Cl. Ct.) — considered

Keays v. Honda Canada Inc. (2008), 2008 SCC 39, 2008 CarswellOnt 3743,2008 CarswellOnt 3744, 66 C.C.E.L. (3d) 159, (sub nom. Honda CanadaInc. v. Keays) 2008 C.L.L.C. 230-025, EYB 2008-135085, [2008] S.C.J. No.40, 376 N.R. 196, 239 O.A.C. 299, 294 D.L.R. (4th) 577, (sub nom. HondaCanada Inc. v. Keays) [2008] 2 S.C.R. 362, 92 O.R. (3d) 479 (note), (subnom. Honda Canada Inc. v. Keays) 63 C.H.R.R. D/247 (S.C.C.) — referredto

Lippa v. Can-Cell Industries Inc. (2009), 2009 ABQB 684, 2009 CarswellAlta1900, 78 C.C.E.L. (3d) 46, 2009 C.E.B. & P.G.R. 8369 (headnote only), 15

Smith v. Mistras Canada, Inc. 255

Alta. L.R. (5th) 333, [2010] 3 W.W.R. 145, 483 A.R. 262, [2009] A.J. No.1285 (Alta. Q.B.) — considered

Love v. Acuity Investment Management Inc. (2011), 2011 ONCA 130, 2011CarswellOnt 1060, 89 C.C.E.L. (3d) 157, 2011 C.L.L.C. 210-024, 277O.A.C. 15, [2011] O.J. No. 771 (Ont. C.A.) — referred to

Magnan v. Brandt Tractor Ltd. (2008), 2008 ABCA 345, 2008 CarswellAlta1414, 2008 C.L.L.C. 210-047, 96 Alta. L.R. (4th) 247, 440 A.R. 35, 438W.A.C. 35 (Alta. C.A.) — referred to

Matusiak v. IBM Canada Ltd. (2012), 2012 BCSC 1784, 2012 CarswellBC3721, 2013 C.L.L.C. 210-007, [2012] B.C.J. No. 2506 (B.C. S.C.) —considered

Michaels v. Red Deer College (1975), [1976] 2 S.C.R. 324, [1975] 5 W.W.R.575, 5 N.R. 99, 75 C.L.L.C. 14,280, 57 D.L.R. (3d) 386, 1975 CarswellAlta57, 1975 CarswellAlta 142, [1975] S.C.J. No. 81, [1975] A.C.S. No. 81(S.C.C.) — referred to

Naylor Group Inc. v. Ellis-Don Construction Ltd. (2001), 2001 SCC 58, 2001CarswellOnt 3340, 2001 CarswellOnt 3341, 10 C.L.R. (3d) 1, 55 O.R. (3d)312 (headnote only), 204 D.L.R. (4th) 513, 17 B.L.R. (3d) 161, 277 N.R. 1,[2001] S.C.J. No. 56, 153 O.A.C. 341, [2001] 2 S.C.R. 943, REJB 2001-25835, 55 O.R. (3d) 312 (note), 2001 CSC 58, 55 O.R. (3d) 312 (S.C.C.) —considered

Noble v. Principal Consultants Ltd. (Trustee of) (2000), 2000 CarswellAlta 439,1 C.C.E.L. (3d) 77, 187 D.L.R. (4th) 80, 80 Alta. L.R. (3d) 39, [2000] 8W.W.R. 44, 17 C.B.R. (4th) 274, 261 A.R. 82, 225 W.A.C. 82, 2000 ABCA133, [2000] A.J. No. 508 (Alta. C.A.) — referred to

Orlando v. Vancouver Coastal Health Authority (2005), 2005 BCSC 926, 2005CarswellBC 1527, 42 C.C.E.L. (3d) 89, [2005] B.C.J. No. 1406 (B.C.S.C.) — referred to

Pauloski v. Nascor Inc. (2002), 2002 ABQB 171, 2002 CarswellAlta 262,[2002] 5 W.W.R. 114, 16 C.C.E.L. (3d) 202, 1 Alta. L.R. (4th) 69, 311 A.R.67, [2002] A.J. No. 256 (Alta. Q.B.) — referred to

Pereira v. Business Depot Ltd. (2011), 2011 BCCA 361, 2011 CarswellBC2281, 20 B.C.L.R. (5th) 295, 92 C.C.P.B. 1, 93 C.C.E.L. (3d) 74, 309B.C.A.C. 286, 523 W.A.C. 286, 347 D.L.R. (4th) 71 (B.C. C.A.) —considered

Robinson v. Team Cooperheat-MQS Canada Inc. (2008), 2008 ABQB 409,2008 CarswellAlta 944, 2008 C.L.L.C. 210-031, 67 C.C.E.L. (3d) 219, 95Alta. L.R. (4th) 249 (Alta. Q.B.) — referred to

ACTION by employees for damages for wrongful dismissal.

Raymond Bastedo, Sarah Lulman, for PlaintiffJeff W. Moroz, for Defendant


J.H. Goss J.:

I Introduction1 This is a wrongful dismissal action for damages. The plaintiff, Lewis

Anthony Smith (Tony), alleges that he was terminated from his employ-ment with the defendant company, Mistras Canada, Inc. (Mistras), with-out cause and with insufficient notice. Mistras argues that Tony aban-doned his employment when he chose to leave his employment positionindefinitely. Given the abandonment, Mistras treated the employmentcontract as at an end and terminated the plaintiff. Mistras further arguesthat if the employment position was not abandoned at law, Tony com-pletely failed to mitigate his damages and is entitled to no more than theamount which he has already received.

II Facts2 Tony resides in Calgary, Alberta. Mistras carries on the business of

non-destructive testing and inspection of oil and gas pipe and other in-dustrial systems within Alberta.

3 Tony commenced working with Nomad Inspection Services Ltd. (No-mad) on or around January 12, 2003. In July 2008, Nomad was acquiredby Mistras and Tony’s employer changed, without interruption, from No-mad to Mistras. At no time was there a written employment agreement.Tony’s son, Michael Smith (Michael) was Tony’s superior at all relevanttimes. Tony was never provided with any written performance warningswhile employed with Nomad or Mistras, nor was he ever formally repri-manded by Nomad or Mistras. Tony’s employment was terminated onOctober 28, 2011. He was 62 years old.

4 Tony was originally hired in sales, and those same duties were laterdescribed as “business development”. He was responsible for client rela-tions with the goal of increasing the revenue of the company by promot-ing the products and services offered by Nomad and Mistras to the majorengineering, construction and oil and gas companies throughout westernCanada and the western US. Tony assumed increased responsibilitiesover time. He also performed other tasks and odd jobs asked of him bymanagement, as each employee filled many roles.

5 There was evidence at trial of Tony making accusations and criticiz-ing Mistras and its management. Tony does not disagree that this oc-curred, but stated that his opinions and concerns did not impact on hisability to perform his job duties. When he raised his concerns with man-

Smith v. Mistras Canada, Inc. J.H. Goss J. 257

agement, they were often met with no response at all, or in a manner thathe felt was inappropriate. Tony also testified to his attempt to set up pro-cedures to assist Mistras’ sales processes, which Mistras did not adopt.

6 Michael testified that Tony was not technically proficient. Tony testi-fied that he requested permission of management to take a variety ofcourses, such as computer courses, but those requests were nevergranted.

7 Tony testified that he saw his family doctor, Dr. Hague, in August2011, as he was becoming depressed, tired, fatigued and was not sleep-ing. His doctor wished for him to undergo some testing. Tony testifiedthat he was under stress for personal reasons and was bothered by safetyissues he perceived within the company.

8 Tony took October 24, 2011 as a day off as he had family in town.Mistras was aware of this.

9 On October 25, 2011, Tony again saw his doctor as he was still suf-fering from insomnia, and was depressed and tired. On that date, his doc-tor wrote the following note on her prescription pad: “The above pt willbe absent (as of Oct 24, 2011) for an indefinite time period, due to medi-cal reasons.” Dr. Hague testified that she reached her conclusions that ledher to write the note on the basis of her discussions with Tony and noth-ing else. Tony had been in to see her two months prior, and was exper-iencing a lot of stress from an abusive work situation. He was sufferingfrom anxiety, poor sleep and poor concentration. These symptoms ledhim to require time off, as he could not perform his work duties. Oncross-examination, Dr. Hague confirmed that she could not be certain,but Tony may have told her that he wanted to take a leave of absence. Noreferral was made to a specialist. Tony testified on cross-examinationthat he did not request or put a time frame on the “indefinite timeperiod”.

10 On October 26, 2011, Tony emailed the doctor’s note to the Mistrasoffice, and sought insurance forms from the benefits person in order toget onto short term disability through the group benefit plan with Manu-life. In his email he stated:

Could you e-mail me the Insurance forms for the attached. I still can-not access my e-mail and have not heard from anyone yet. I am goingfor hopefully last x-ray in the morning. Doctor is looking for osteo?arthritis which I don’t think is there because I don’t have swelling inthe joints but would explain the pain.


11 Tony testified that it was his intention to take a leave of absence andto return to work when he was able to do so. He did not ask for time off,or seek agreement on a leave of absence from Mistras prior to that day.This is confirmed by Michael.

12 Michael gave evidence that when Mistras received the doctor’s notefrom Tony, the management team was immediately convened, the doc-tor’s note was discussed and then Michael contacted a third party physi-cian who worked with a clinic that was on contract with Mistras to facili-tate employees’ return to work. Michael asked that they get in touch withTony. Michael confirmed that Mistras did not advise Tony that a doctorwould be contacting him.

13 A document entitled Telephonic Report was entered into evidence. Itwas prepared by Dr. Mark Nepp in relation to a discussion on October27, 2011. The note provides:

Tony has some personal issues that he wanted to be taken care of him[sic] and discussed to me on the phone. He says it is definitely non-work related and he is going to take care with his family [sic], Dr.John Hay. He did not want to give me any information on theseproblems that he is having and that definitely are not work related. Irelated this information to Mike Smith, director of Mistras and he isaware that this is a non-occupational situation. Tony did not want toget into any of the problems that he is having medically with me, buthe said that they are non-occupational.

14 Tony testified that he recalled the telephone conversation, but couldhardly hear the person on the line. He stated that he did not give anyinformation to Dr. Nepp regarding when and if he would be returning towork. On cross-examination, Tony confirmed that when he received thattelephone call, he thought he was talking to Mike Lanz, a member of themanagement team at Mistras. Tony confirmed that he believed that Mr.Lanz was pulling a stunt on him, so Tony concocted a story and told himwhatever story came into his mind.

15 Michael testified that upon receipt of the Telephonic Report, anothermanagement meeting was convened to discuss it. The Mistras manage-ment team knew only that Tony would be off work indefinitely, and thathe would give no further information. The management team made thedecision to terminate Tony. Michael confirmed on cross-examinationthat the management team never received or requested any clarificationfrom Tony regarding when he would be back, or how long he would beaway.


16 Tony was terminated on October 28, 2011. When meeting with Mis-tras management representatives on October 28, 2011, Tony refused tosign a Dismissal Letter provided to him acknowledging that he was nolonger working at Mistras. He stated that he was surprised by the letter,wanted to know the reason he was being terminated, and wanted a letterof reference and other documents. Tony requested a letter of reference,as he felt that he would be able to work sometime in the future. On thatdate, Tony also refused to sign a Release as he felt he needed legal repre-sentation, and he wanted certain conditions to be met. Those conditionsrelated to areas of concern to Tony, and acknowledgements which Tonywanted Mistras to make, which Tony felt would help him secure futureemployment in the oil and gas industry.

17 Tony received the insurance forms approximately seven to ten daysafter he requested them. Tony filled out the papers regarding his benefitsinsurance and after quite some time he was advised that his short termdisability claim was denied, and that he should apply for WCB benefits.His subsequent claim to WCB was also denied.

18 On December 20, 2011, Tony was advised by letter from ServiceCanada that his claim for employment insurance was accepted. Tonyconfirmed his understanding on cross-examination that in order to be en-titled to benefits when attending or planning to attend a course of instruc-tion, he had to prove that he was ready, willing and able to work eachday and that he was making efforts to find work.

19 Tony testified that he asked his doctor to prepare an “amended re-port” to Manulife to try to get on short term disability. That letter wassent on February 20, 2012. His disability insurers continued to deny hisclaim. The only benefit claim for which Tony applied and which wasaccepted was his claim for employment insurance.

20 Tony testified that after he was dismissed, he called people he knewabout possible employment. Tony had never previously prepared a re-sume. Toward the end of November 2011, he pursued approximatelyeight to eleven employment opportunities per month through various on-line web portals including: Linked In, Project Manager Network, AlbertaOil & Gas Recruiting, Climber.com, Project Manager Institute and NorthAlberta Institute of Technology Instrumentation Alumni.

21 Tony could not remember the names of the firms to which he appliedfor employment. He testified that he kept track of his job applications ina notebook, which was later misplaced and lost. He was unable to pro-duce any documentation confirming his job searches through the online


web portals. He testified that some of the companies he spoke with wereconcerned about his age, and others in project management and buildingtrades wanted formal training. In November 2011, Tony followed upwith CorrPro, a company with whom he had been in discussions to deter-mine how they were attracting employees in August 2011. CorrPro neveroffered Tony a job.

22 After his termination, Tony decided to return to school in an effort tobecome more employable, and to overcome what he perceived as somebarriers to re-employment. He decided to take the Project ManagementCertificate Program and some business courses at Mount Royal Univer-sity College. Tony testified that he felt he needed to get his Project Man-agement designation to get a job. From the evidence before me, it ap-pears Tony commenced classes on November 25, 2011, and completedthe 90 hours of required courses for the program on April 19, 2012. Hetestified that he learned a lot from the courses. Tony did not at any timeenroll to take the final examination to receive his Project ManagementCertificate because of the $1,600 fee. The program allows participants towrite the exam within two years. Tony testified that the program hassince added additional courses that must be completed before the exammay be written.

23 On cross-examination, Tony confirmed that he chose not to seek al-ternate employment after he was terminated, but chose instead to enrollin the Project Management Program at Mount Royal University Collegeand collect employment insurance as he felt he needed education to stayin his line of work. He confirmed that he fully intended to worksomeday.

24 Tony testified that he also attended the following: an employmentboot camp at the Calgary Library Downtown location; two employmentboot camps sponsored by Service Canada (EI); the job fair at the PipelineExpo Calgary (2011); a job fair at the Ft. McMurray Oil Show (2012); ajob fair at the Westin Hotel (2012); and two job fairs at the Calgary OilShow (2012 and 2013).

25 In 2012, King’s Glass approached Tony and asked him to help themwith their receivables problem. Tony was attending school at the time.Tony started working with King’s Glass part time. He did this from thetime when his employment insurance expired until November 2012 or2013. Tony then worked with Sage Energy, a compression manufactur-ing company from November 2013 to March 2014. In the summer of2014, Tony worked at a golf course.


26 Michael testified that in 2011-2012, the oil and gas business wasbooming and robust. Mistras had problems finding people due to a labourshortage.

III Issues27 The issues are:

1. Did Tony abandon his employment?

2. If not, what is a reasonable notice period for termination withoutcause?

3. Did Tony mitigate his damages?

4. What are the appropriate damages?

A Did Tony abandon his employment?

1 Parties’ Positions28 The Plaintiff argues that a one day absence is absolutely not sufficient

to frustrate an employment contract. Further, an employer cannot con-clude that an employee abandoned his employment after a few days’ ab-sence following delivery of a doctor’s note providing for that absence,and a request for short term disability insurance forms to complete. Anobjective reading of the use of the word “indefinite” in the doctor’s notewithin the context of Tony’s actions would not lead a reasonable personto conclude that Tony was seeking to leave Mistras forever. By request-ing disability insurance forms through Mistras, Tony was seeking assis-tance to get well and return to work at a later time.

29 The Defendant argues that it was entirely reasonable for Mistras toconclude on an objective basis that Tony repudiated the employmentcontract when he left his employment. He was an important employeewho left for an indefinite period without speaking to his employer, pro-viding nothing more than a simple doctor’s note. He made no complaintsof stress or personal problems to anyone at Mistras prior to leaving. Thedoctor’s note gave no date of a possible or probable return to work, re-ferred to no specific diagnosis and was not accompanied by any formalmedical opinion or letter. No promise was made to provide a medicalopinion or to make one available, or to provide an update by a specificdate. In his request for the insurance forms, he mentioned osteoarthritisand nothing else.

30 The Defendant notes that Mistras followed up on the doctor’s note byreferring the matter to a third party doctor’s office working with Mistras


on employee health matters. Dr. Nepp spoke with Tony over the phonethe day after the doctor’s note was received, and reported back to Mistrasthat Tony did not want to give him any information on his problems, andthat his problems were not work related. The following day, havingheard nothing further, Mistras treated the employment agreement as at anend, and formally terminated Tony’s employment.

31 The Defendant argues that Tony’s conduct as of October 24, 2011clearly demonstrated that he wanted to take a leave of absence, and thathe simply made the decision to leave his employment position indefi-nitely. The Defendant infers this intent from Tony’s derogatory and in-sulting remarks, accusations and criticism of Mistras and its manage-ment. The Defendant submits that in such circumstances, the employermay treat the employment agreement as at an end.

32 The Defendant also argues that Tony did not answer questions di-rectly when he gave his evidence and that this affects his credibility anddemonstrates that he wanted to justify his actions.

2 Law33 It is an implied term of every employment contract that an employee

must attend work. When an employee fails to comply with that term, s/hewill be taken to have abandoned or repudiated the contract, entitling theemployer to treat the contract as being at an end. The test for determiningwhether an employee has abandoned his or her employment is whether,viewing the circumstances objectively, a reasonable person would haveunderstood from the employee’s words and actions, that s/he had aban-doned the contract of employment: Pereira v. Business Depot Ltd., 2011BCCA 361 at para 47, 93 C.C.E.L. (3d) 74 (B.C. C.A.); Assouline v.Ogivar Inc. (1991), 39 C.C.E.L. 100, [1991] B.C.J. No. 3419 (B.C. S.C.)at para 14; Danroth v. Farrow Holdings Ltd., 2005 BCCA 593 at paras7-8, 219 B.C.A.C. 151 (B.C. C.A.).

34 In Pereira, the plaintiff failed to return to work on the date the em-ployer expected, after participating in a 28-day treatment program in an-other city. After seven days without contact following the date uponwhich the employer expected the plaintiff to return to work, the defen-dant sent the plaintiff a letter advising him that he was considered tohave abandoned his job. The Court of Appeal upheld the trial court’sdecision that in the circumstances of the case, there was no objectivebasis upon which the employer could conclude that the employee hadabandoned his employment. The employee expressed an intention to re-


turn to work following treatment, the employer directed the employeethat he not contact the store location directly, the employee was approvedfor long-term disability benefits on the expectation that he would returnto work “within the next few weeks”, he was waiting for the funds heneeded in order to relocate, he clearly needed to re-establish himself bothin terms of living arrangements and medical and other support, and theemployer never told the employee when it expected him to report forwork. The Court concluded that the advice by the disability benefits in-surer to the employer that it had terminated the employee’s benefitsbased on the failure of the plaintiff to return to work by the expected datewas not determinative, given what the employer knew.

35 In the case of Lippa v. Can-Cell Industries Inc., 2009 ABQB 684, 78C.C.E.L. (3d) 46 (Alta. Q.B.), the plaintiff payroll administrator, whohad worked for the defendant for approximately ten years, left work dueto medical problems, including the possibility of multiple sclerosis. Thedefendant was aware that the plaintiff was attempting to obtain shortterm disability benefits from its group plan insurer. The employee’s ini-tial application for benefits was dismissed, although a settlement wasreached some years later. The employee was terminated for abandoningher employment after five months had elapsed. The plaintiff testified thatit was always her intention to return to work, and that she did not aban-don her position with the defendant at any time prior to receiving noticeof her termination. Verville J. accepted her version of the facts, whilenoting that communications between the plaintiff and defendant duringthis period could have been better. No inquiries were initially made bythe defendant to obtain an update on the plaintiff’s medical status.Verville J. held that such inquiries would be consistent with the em-ployer-employee relationship. The employer only requested medical doc-umentation after the employee was fired. Verville J. stated:

70 In my view the defendant simply viewed and treated the plain-tiff’s health problems as being fortuitous. ...[P]roviding the plaintiffwith a severance package and replacing her ...had already been con-templated. Taking the position that she had abandoned her position inmy view was simply a means to avoid providing a severancepackage.

36 Verville J. in Lippa also considered the principles of frustration of acontract of employment, and the information on which an employer canrely to justify its position that the contract of employment has been frus-trated. Frustration occurs when a situation has arisen for which the par-ties made no provision in the contract and performance of the contract


becomes “a thing radically different from that which was undertaken bythe contract”: Naylor Group Inc. v. Ellis-Don Construction Ltd., 2001SCC 58 at para 53, [2001] 2 S.C.R. 943 (S.C.C.). Verville J. noted juris-prudence to the effect that the presence of long-term sick leave and disa-bility benefits indicates a greater tolerance for the duration of an em-ployee’s absence before frustration occurs, and that contracting for thesebenefits may postpone the time of frustration, because it may be inferredthat the contracting parties anticipated that the employee might takeleave for illness. He noted that the defendant did not argue that the em-ployee’s five month absence interfered with its legitimate business needs.Verville J. concluded that he would have rejected that submission in anyevent, given the disingenuous manner in which the defendant acted andits ability to cover off the plaintiff’s work. The five month absence fromwork was not sufficient to frustrate the employment contract. He stated:

86 In the instant case the defendant proceeded to terminate the plain-tiff without making any attempt to ascertain the plaintiff’s medicalcondition prior to purporting to terminate. In other words, the defen-dant had no knowledge whether the plaintiff’s incapacity, looked atbefore the purported dismissal was of such a nature, or appearedlikely to continue for such a period, that further performance of herobligations in the future would either be impossible or would be athing radically different from that undertaken by and accepted by thedefendant under the agreed terms of her employment ... [I]n realitythe defendant abandoned the plaintiff.

37 In Fitzgibbons v. Westpres Publications Ltd. (1983), 3 D.L.R. (4th)366, [1983] B.C.J. No. 164 (B.C. S.C.), the plaintiff was dismissed fromher position as a newspaper editor. She had written a story which re-sulted in a libel action, and had refused to reveal her sources throughoutall of the libel proceedings. The defendant’s insurers denied coverage onthe ground that the plaintiff failed to co-operate in the defence of theaction and, when the defendant settled the claim, the plaintiff refused toconsent to dismissal of the action. As a result of pressure, the plaintiff’smental health and relations with staff deteriorated, and she took a sickleave of absence which she extended for several months while receivingextended health benefits. During her absence, the plaintiff communicatedwith the defendant through her lawyer. The plaintiff’s employment wasterminated after four months. The defendant argued the dismissal was forcause, given the plaintiff’s absence from work for an indefinite period oftime without the defendant’s concurrence, her failure to co-operate with


the defendant’s lawyers and insurers, and her inability to work with otherstaff members. The Court stated:

25 To leave a paper without an editor for four months and to fail tocommunicate directly with her employer and then express shock thather employment was being terminated in such circumstancesstretches one’s credulity. In my opinion, Miss Fitzgibbons acted in anirresponsible fashion, particularly when the situation could have beenso readily clarified by a phone call or a note to her employer who, inmy opinion, had treated her very fairly indeed, putting up with heridiosyncrasies and keeping her position open for some four months.

38 However, the Court concluded that the plaintiff’s conduct was notsuch that the defendant was entitled to treat it as repudiation or abandon-ment by her of the employment contract, as the defendant was aware theplaintiff had been, and was still, receiving medical benefits indicatingthat she was not then ready to resume work. Her failure to communicate,while irresponsible, was not an unequivocal indication of her intention toabandon her position or to repudiate her contract of employment.

39 In Jokic v. Larry Sommers Ltd. (1995), 13 C.C.E.L. (2d) 257, 1995CarswellOnt 292 (Ont. Small Cl. Ct.), the plaintiff had been employed bythe defendant for three years as a combination sales manager, servicemanager, accounts receivable clerk and computer data entry clerk. Aftera traumatic personal experience, the plaintiff met with her employer, re-counted her personal problem, and requested some time off for vacationor sickness. This request was refused. The plaintiff suggested otherworking options which were also refused. The plaintiff then told her em-ployer that she was unable to return to her desk to work, and would beleaving. The employer demanded that she sign a letter of resignation andstood in her way to prevent her from leaving without having done so.The plaintiff’s next communication with the defendant occurred six dayslater when her lawyer sent a letter stating that the plaintiff should not beconsidered to have quit her job, but should be considered as being onsick leave due to a medical condition described by her physician as “se-vere”. No date of possible or probable return to work was given, no spe-cific diagnosis or doctors’ names were mentioned, no medical opinionwas enclosed and no promise was made to provide a medical opinion orto make one available. The defendant treated the plaintiff as havingresigned.

40 The Court stated that in the absence of a written contract, it must de-termine whether an entitlement to an indefinite leave of absence wouldhave been a reasonably implied term of the employment relationship be-


tween the parties in all the circumstances. The Court held that in all ofthe circumstances, the refusal to work on the day of the meeting did notimmediately terminate the contract. However, the Court found that uponreceipt of the letter six days later, the defendant had a right to treat theemployment relationship as at an end, as it was faced with a situationwherein an important employee claimed to be entitled to be off sick, butit had no ability to determine how long that employee would be off,knowing only that she would likely be off for a considerable period oftime.

3 Analysis41 The Defendants argued that Tony was not credible. I noticed that he

sometimes answered questions, particularly on cross-examination, with ameandering, lengthy, roundabout answer. However, I determined thatthis was more as a result of a lack of sophistication than a lack of credi-bility. I noted that he sometimes answered questions on direct examina-tion in the same way. He wanted every detail he could remember to formpart of his testimony, and particularly those details that he felt explainedhis decisions and thought processes. I also noted that on a few occasions,Tony needed to be reminded of his earlier evidence on questioning tofully recall some details, particularly those that reflected less positivelyupon him. Nonetheless, I found him to be credible.

42 The question for the Court is whether there was an objective basisupon which the management team at Mistras could conclude that Tony’sactions during the week of October 24 to 28, 2011 signified an intentionon his part to abandon his employment. Tony provided a doctor’s note toMistras indicating that he would be absent for an indefinite time period,due to medical reasons, and that same day requested disability insuranceforms from Mistras. The following day, Mistras was informed by Dr.Nepp that Tony had some personal issues that he wanted to address, andthat Tony did not want to give Dr. Nepp any information on these medi-cal problems.

43 I agree with the Defendant that Tony could have, and perhaps shouldhave, done more to communicate with management of Mistras regardinghis indefinite absence for medical reasons. However, in the circum-stances, I do not find that Tony’s actions signified an intention to aban-don his employment. I do not find that there was an objective basis uponwhich the management team at Mistras could so conclude in five days.My conclusion is further reinforced by the fact that Mistras has a group


plan including short and long term disability insurance benefits for itsemployees, leading to the clear conclusion that Mistras anticipated thatemployees may occasionally be absent on short and long term disabilityleaves. In fact, Tony was denied insurance benefits some weeks later.However, he had by then already been terminated without cause by theDefendant.

B What is a reasonable notice period for termination without cause?

1 Parties’ Positions44 The Plaintiff argues that Tony was entitled to ten to thirteen months

of notice, or payment in lieu, given his particular circumstances.45 The Defendant argues that the statutory notice period of six weeks

already provided to Tony by the Defendant is reasonable, given his fail-ure to mitigate.

2 Law46 In the absence of a written contract of employment, there is an im-

plied term that the employer will give the employee reasonable notice oftermination: Howard A Levitt, The Law of Dismissal in Canada, 3d ed,looseleaf (Toronto: Canada Law Book) at 3-15, citing Fortier v. SpafaxCanada Inc. (1998), 71 O.T.C. 47, [1998] O.J. No. 3016 (Ont. Gen.Div.); Noble v. Principal Consultants Ltd. (Trustee of), 2000 ABCA 133at para 8, 261 A.R. 82 (Alta. C.A.).

47 The determination of what length of notice is reasonable dependsupon the facts and circumstances of each case having regard to: the char-acter of the employment, the length of service of the servant, the age ofthe servant and the availability of similar employment, having regard tothe experience, training and qualifications of the servant: Bardal v. Globe& Mail Ltd. (1960), 24 D.L.R. (2d) 140, [1960] O.J. No. 149 (Ont. H.C.)at para 21; Keays v. Honda Canada Inc., 2008 SCC 39 at para 28, [2008]2 S.C.R. 362 (S.C.C.). No one factor should be given disproportionateweight: Keays, para 32.

48 It has been judicially recognized that sales jobs involve readily trans-ferable skills, because the same qualities are necessary for a career insales regardless of the industry: Hart v. EM Plastic & Electric ProductsLtd., 2008 BCSC 228, [2008] B.C.J. No. 316 at para 35; Husband v.Labatt Brewing Co., [1998] B.C.J. No. 3193 (B.C. S.C. [In Chambers])at para 17. Short service tends to reduce the appropriate length of noticebut, on the whole, length of service should not be given disproportionate


weight: Love v. Acuity Investment Management Inc., 2011 ONCA 130 atpara 19, 277 O.A.C. 15 (Ont. C.A.). Employees terminated at an olderage, such as 55, have a much greater difficulty finding employment thando those of a younger age: Orlando v. Vancouver Coastal Health Author-ity, 2005 BCSC 926 at para 49, 42 C.C.E.L. (3d) 89 (B.C. S.C.) . Themanner in which a long term employee is terminated may also increasethe notice period where it leads to a loss of self-confidence, making thesearch for new employment more challenging: Hart, paras 33-34.

49 In Athwal v. Edmonton (City), 72 A.R. 316, [1986] A.J. No. 1407(Alta. C.A.), the plaintiff was employed in a management capacity withthe City of Edmonton for four years when he was dismissed at 62 yearsof age. He was awarded thirteen months’ notice, which was upheld onappeal. In Matusiak v. IBM Canada Ltd., 2012 BCSC 1784, [2012]B.C.J. No. 2506 (B.C. S.C.), a senior salesperson with nine and a halfyears of employment, and terminated at 60 years of age, also receivedthirteen months’ pay in lieu of notice. In Heslop v. Cooper’s CraneRental Ltd., [1994] O.J. No. 2120, 6 C.C.E.L. (2d) 252 (Ont. Gen. Div.),var’d on other grounds (1997), 30 C.C.E.L. (2d) 279, [1997] O.J. No.2520 (Ont. C.A.), a salesperson employed for eight years and terminatedat age 65 was awarded twelve months’ notice. These cases would appearto fall outside the comment in Husband at para. 17 that in “salesman” or“sales manager” cases, the courts have consistently awarded notice in therange of two and a half weeks per year of service even where the plain-tiffs are in their 50s or 60s. In Baxter v. Montreal Engineering Co.,[1986] O.J. No. 176 (Ont. H.C.), an inspection supervisor employed foreight years and terminated at age 62 received ten months’ pay in lieu ofnotice.

3 Analysis50 Tony worked full time for Nomad, and then Mistras, for eight years

and nine months. He was originally hired in sales. Those same dutieswere later described as “business development”. Tony also performedother tasks asked of him by management, as each employee filled manyroles. Tony was not technically proficient. He was 62 when he was ter-minated. He did not secure comparable full time employment in the oiland gas field until November 2013, over a year later. Such circumstancessupport a longer period of notice.

51 Michael testified that in 2011-2012, the oil and gas business wasbooming and robust. Mistras had problems finding people as there was a


labour shortage. Such circumstances will necessarily shorten the reasona-ble time needed to find new employment.

52 I am satisfied that nine months’ notice is reasonable in the circum-stances of this case.

C Did Tony mitigate his damages?

1 Parties’ Positions53 The Defendant submits that Tony could have found similar employ-

ment shortly after leaving Mistras. He had contacts in the oil and gasindustry. The Defendant submits that he was offered a job by a competi-tor on or about November 15, 2011. He chose not to look for work untilhis courses were finished, but he never obtained the Certificate. He didnot produce evidence of his job searches. The Defendant argues that anynotice period should end no later than November 25, 2011.

54 The Plaintiff argues that the evidence in this case is that Tony was notoffered a job in November 2011. Tony testified to his many unsuccessfulattempts at securing employment. He submits that his attendance atschool was reasonable in the circumstances.

2 Law55 On termination without cause, an employee has a duty to mitigate his

damages by taking all reasonable steps to obtain alternate employment. Iffailure to mitigate is alleged, the burden lies on the defendant to show ona balance of probabilities that the plaintiff failed in his or her duty tomitigate: Michaels v. Red Deer College (1975), [1976] 2 S.C.R. 324(S.C.C.), 5 N.R. 99. The burden is by no means a light one, as it involvesa party already in breach of contract demanding positive action from onewho is often innocent of blame: Robinson v. Team Cooperheat-MQSCanada Inc., 2008 ABQB 409 at para 116, 67 C.C.E.L. (3d) 219 (Alta.Q.B.). The defendant must establish not only that the plaintiff did nottake steps to search for work after the time of dismissal, but also that hewould have found work had he done so: Red Deer College; Evans v.Teamsters, Local 31, 2008 SCC 20 at para 31, [2008] 1 S.C.R. 661(S.C.C.); Magnan v. Brandt Tractor Ltd., 2008 ABCA 345, 96 Alta. L.R.(4th) 247 (Alta. C.A.).

56 The reasonableness of an employee’s decision not to mitigate will beassessed on an objective standard: Evans, para 33. In Christianson v.


North Hill News Inc., [1993] A.J. No. 672, 145 A.R. 58 (Alta. C.A.), theCourt stated:

11 ... The efforts of the plaintiff will not be nicely weighed, particu-larly with hindsight. All that the plaintiff need do is to make what atthe time is an objectively reasonable decision; he or she need notmake the best possible decision. In particular, the courts will not usu-ally expect one faced with a breach of contract to take steps whichare risky or unsavory. The onus of proof is on the defendant ...and soany gap in the evidence accrues to the plaintiff’s benefit. In wrongfuldismissal cases, the courts have extended that qualification a littlefurther: the plaintiff need not mitigate damages by taking a signifi-cant demotion, or by going back to the employer who fired him orher. All that is trite law.

57 Furthermore, while a wrongfully dismissed employee has a duty totake all reasonable steps to mitigate his damages, courts will afford theemployee a brief “breathing space” of one to three months following thedate of dismissal before requiring him or her to fulfill the duty to miti-gate: Pauloski v. Nascor Inc., 2002 ABQB 171, 311 A.R. 67 (Alta.Q.B.); Chand v. Craftsman Collision Ltd., 2007 BCPC 11 at para 4,[2007] B.C.J. No. 115 (B.C. Prov. Ct.).

58 As well, the efforts of the plaintiff will not be nicely weighed, partic-ularly with hindsight. All that the plaintiff need do is to make what at thetime is an objectively reasonable decision, he or she need not make thebest possible decision. Any gap in the evidence accrues to the plaintiff’sbenefit: Robinson, at para 115.

59 In Christianson, the terminated employee, who had worked in theprint industry, went to the Technical Institute as a full-time student forabout six months to learn the new print technology and quite soon there-after got a job. The Court commented at para 14 that it could not becertain whether that course of action was the best investment of time andmoney, but that at the time it was a reasonable decision to make, and “nocourt should be quick to second guess”. The question whether or not anemployee has acted reasonably must be judged in relation to his ownposition, and not in relation to that of the employer who has wrongfullydismissed him: Forshaw v. Aluminex Extrusions Ltd., [1989] B.C.J. No.1527 at para 144, 39 B.C.L.R. (2d) 140 (B.C. C.A.).

60 In Dorion v. Stewart, Weir Land Data Inc., [1996] A.J. No. 936, 191A.R. 214 (Alta. Q.B.) the plaintiff decided to retrain in an entirely differ-ent field shortly after termination. She did not commence that retrainingfor fifteen months. Bielby J. (as she then was) found that her decision to


retrain was not motivated by her inability to find replacement work, be-cause she had attempted to do so only for a very brief time prior to ap-plying to technical school, and mused that it may have been motivated byher knowledge that her work was a doomed field in the computer era.Bielby J. noted:

48 I accept that the law has been relatively broad-minded in review-ing employee’s conduct post-wrongful dismissal. The onus is on theemployer to prove failure to mitigate damages...What amounts to rea-sonable efforts to find a replacement position must be judged in rela-tion to the employee’s own position and not in relation to that of theemployer who wrongfully dismissed him...

61 Nonetheless, Bielby J. found that the defendant had discharged theonus of showing that the plaintiff was not making reasonable efforts tofind appropriate replacement during some of the potential period of rea-sonable notice, as the plaintiff had decided to retrain for a new occupa-tion, and did not endeavor to seek or consider reasonable alternatives inher former field.

62 In Hart, the plaintiff chose to reject two full time job offers, whichwere comparable to his job from which he had been dismissed in termsof salary, benefits, duties and responsibilities, because he had decided toembark upon a new career as a real estate agent, a completely unrelatedfield in which the plaintiff had virtually no experience or knowledge. TheCourt found that the plaintiff did not study the risks attendant upon thisnew venture very carefully and “rushed into this new field”, which theevidence established was extremely risky, with slim chances of successfor a person of the plaintiff’s age, with a lack of contacts or prior experi-ence. The Court concluded:

43 In these circumstances, it can hardly be said that Mr. Hart actedreasonably or even rationally in his decision to reject the two job of-fers and embark upon a real estate career. There are many caseswhere a dismissed employee has chosen to start his own businessinstead of pursing alternate employment in his own field or industry.In terms of the duty to mitigate, however, these choices are only rea-sonable where there is evidence that no comparable jobs were availa-ble to the dismissed employee after a diligent employment search.

63 In Hyland v. Advertising Directory Solutions Inc., 2014 ABQB 336, 2Alta. L.R. (6th) 348 (Alta. Q.B.), the plaintiff was terminated after hisemployer was purchased by another company. Soon after his termina-tion, the plaintiff decided to make a career change to become self-em-ployed trading stocks on his own account. He made no efforts to find


employment in his field of accounting or in any other capacity. Approxi-mately a year and a half later the plaintiff determined that he needed tore-enter the traditional work force in the accounting field because he hadrun out of money. He found re-employment in the accounting field be-tween a few weeks and three to four months thereafter. It was concededthat eleven months was a reasonable notice period subject to Mr. Hy-land’s failure to mitigate: paras 13, 16 and 27.

64 Where failure to mitigate damages is found, a reduction in the dam-age award is required based on the fact that the plaintiff is barred fromrecovering a loss that could have been avoided by acting reasonably. Themost common approach is a reduction of the notice period to reflect thetime in which the terminated employee could have found a new job withproper efforts. Some courts have reduced damages based on the esti-mated amount the plaintiff could have earned in mitigation, while othershave excluded damages for the time in which the employee made insuffi-cient efforts to mitigate: Hyland, paras 69-71. Quantification of the fail-ure to mitigate is a difficult assessment and tends to be somewhat arbi-trary without specific evidence of an available job foregone. Dependingupon the circumstances, notice periods have been reduced by anywherefrom three to nine months which may be based on when the plaintiffwould likely have found work through reasonable efforts. In some casesthe claim has been dismissed completely: Hyland, paras 73-81.

65 In Hyland, the Court reduced the notice period from eleven months toseven months, a reduction of over one-third of his reasonable notice pe-riod, due to the failure to mitigate. The Court arrived at this reductiontaking into account that the plaintiff would not have been expected tolook for work immediately following his termination, as well as hismother’s illness and subsequent death. The Court noted that the fourmonth reduction in his notice period was close to half of the time duringwhich he would have reasonably been expected to look for similaremployment.

3 Analysis66 Michael gave evidence that Tony was not technically proficient. Tony

testified that he requested permission of management to take a variety ofcourses, such as computer courses. I am satisfied that at the time in ques-tion, Tony required, or would have benefitted from, some training for thesales and business development work which he was doing in the oil andgas and construction fields.


67 Tony gave evidence that following his termination, he called peoplehe knew about work, attended job fairs, attended two employment bootcamps and pursued job opportunities through various online web portals.Having considered the evidence, I find that Corrpro did not offer Tonyemployment in November 2011.

68 Tony testified that some of the companies he spoke with were con-cerned about his age and others, in project management and buildingtrades, wanted formal training. He decided to return to school in an effortto become more employable, as he felt he needed education to stay in hisline of work and to overcome what he perceived to be barriers to re-employment. He confirmed that he fully intended to work someday butbelieved he needed to get his Project Management designation to get ajob. There is no evidence before me to the contrary, nor is there anyevidence that comparable jobs or positions were available or offered toTony when he attempted to find a job after his termination. I also do notfind it was unreasonable for Tony to have chosen not to seek alternateemployment once he enrolled in the Project Management Program atMount Royal University College. His failure to actively seek employ-ment while he was in school did not amount to a failure to mitigate.However, that may have compromised his obligation to prove that hewas making efforts to find work while in receipt of employmentinsurance.

69 I also find that the field of study chosen by Tony was not a new andrisky occupation or a field in which he had no contacts or knowledge.Project Management was within the realm of his previous employment,although it was perhaps a step forward. With the robust oil and gas busi-ness in 2011-2012 and the labour shortage that Mistras experienced,there is no reason to believe that Tony would not have been able to se-cure employment with that designation. In the circumstances, I have nobasis upon which to conclude that Tony’s decision to obtain formal train-ing in Project Management was unreasonable.

70 Tony completed the 90 hours of course work required for the ProjectManagement Certificate Program at Mount Royal University in April2012, but he never wrote the examination to obtain his certificate. Hetestified that it would take four to five months to get in to write the exam.Tony testified that he did not write the examination because of the cost.However, Tony went to school to obtain his Project Management desig-nation so that he could get a job. I find that it was not reasonable forTony to stop short of actually obtaining his designation, given his rea-


sons for embarking on this course of action in the first place. One has topresume that he either understood the expense involved in this educationand designation before he enrolled, or did not sufficiently investigate thecost of this endeavor. Not completing his designation rendered his train-ing less helpful in his job search. He testified that employers were look-ing for some kind of professional designation.

71 Nevertheless, Tony testified that he learned a lot while he was inschool, which learning presumably assisted him in his job search, eitherbecause of his increased knowledge base or because of his increased self-confidence. Perhaps it was a bit of both. He also testified that he estab-lished contacts in the industry. The Defendant points out that Tony testi-fied that he was very well connected in the industry during his time atMistras. I accept that he made new contacts in the course of his studies.

72 Tony finished his course work around April 29, 2012. I have deter-mined nine months to be a reasonable notice period, subject to any re-duction for failure to mitigate. The nine month notice period ended onJuly 28, 2012, three months after Tony finished his course work. Tonytestified that it would have taken four or five months to get in to write theexamination. Therefore, although I have found that his failure to obtainthe Certificate was unreasonable, it does not have an impact on the over-all notice period.

D What are the appropriate damages?73 As noted, the nine month notice period ended on July 28, 2012. There

is no evidence before the Court that Tony was working part time withKing’s Glass by that date.

74 Tony’s T4 slip for 2010 reflects employment income of $80,265.96.His T4 for 2011 reflects income of $88,494.90, however this included hisincome to termination and his final pay calculations of $21,946.71.

75 I find, based on the evidence, that Tony’s income was $1,511.60 perweek. Over a period of nine months that amounts to $58,952.40. He waspaid six weeks’ severance pay in the amount of $9,069.60, leaving a dif-ference of $49,882.80.

76 Vacation pay over the notice period would have been $3,400.99, lessthe $523.23 paid out, leaving a difference of $2,877.76. Tony was un-clear in his evidence whether or not any days of unused vacation from2009 had been missed in his payout. I find that there was insufficientevidence to conclude that it was improperly calculated.


77 Tony also seeks his benefits over the period of notice, but there wasno evidence before me regarding premiums paid for such benefits, of anyreplacement benefits purchased by Tony or any other valuation of suchbenefits.

78 There was evidence of medical expenses Tony incurred during thatperiod, which he testified would otherwise have been fully reimbursedby his health benefits plan. There is no evidence before me that theseexpenses would not have been fully reimbursed.

79 The expenses over the period from termination to July 28, 2012 forwhich he was not reimbursed totaled $941.65.

80 Banked overtime hours were paid at the regular rate. Tony testifiedthey should properly have been paid out at time and a half, which wasnot disputed, resulting in an upward adjustment of $1,662.00.

81 Tony also claimed school receipts for tuition and books of $3,767.40.The Court in Christianson concluded that the expenses of mitigation andfinding a replacement job, including postage, telephone calls, shoeleather, purchase of newspapers, revising a resume, and retraining, arepart of damages. It stated:

20 ...It is a choice between lost salary (if mitigation was hopeless ortried but failed), and costs of mitigation (if mitigation succeeded orwould have). That is so whether the plaintiff tries to mitigate or not.She cannot be in a worse damages position by failing to mitigate thanshe would have been by mitigating successfully. See Laframboise v.Billett (1992), 5 Alta. L.R. (3d) 394, 398 (para. 11) (C.A.).

82 The Court noted that the expenses of mitigation must properly flowfrom mitigation necessitated by the lack of notice, not from the termina-tion itself, as any employer has the right to terminate on notice. How-ever:

21 ...[I]n practice the apportionment becomes difficult, as often simi-lar (but not identical) steps would be reasonable in each scenario.Presumably the reasonable person fired without notice will incurmore expenses and may take more precautions because of the ur-gency of the situation. Again, the courts are loathe [sic] to second-guess such decisions.

83 I have concluded that Tony probably benefitted from his courses, andthey probably assisted him in obtaining re-employment. On that basis, Iam prepared to order that those costs form a part of his damages.

84 The total damages are $59,131.61 plus pre-judgment interest.


IV Conclusion85 The Plaintiff was entitled to nine months’ notice. The Defendant has

not established that the Plaintiff failed to mitigate his damages. ThePlaintiff is entitled to total damages in the amount of $59,131.61.

V Costs86 If the parties cannot agree on costs, they may arrange to speak to the

matter within 30 days of this decision.

Action allowed.

Spruce Hollow Heavy Haul Ltd. v. Madill 277

[Indexed as: Spruce Hollow Heavy Haul Ltd. v. Madill]

Spruce Hollow Heavy Haul Ltd., Applicant and ShannonKnezacky Madill, Respondent

Federal Court

Docket: T-697-15

2015 FC 1182

Anne L. Mactavish J.



Labour and employment law –––– Labour law — Discipline and termina-tion — Factors considered — Class of employee — Miscellaneous –––– Man-ager — Employee, together with husband and two other individuals, were share-holders and directors of corporate employer — Employee and husband werealso creditors of corporate employer, having loaned it $150,000 — Employeewas administrative office manager — Employee became involved in acrimoni-ous divorce proceedings — Employee was dismissed — Employee successfullybrought wrongful dismissal complaint under Canada Labour Code — Adjudica-tor found that employer failed to establish that it had cause to dismiss em-ployee — Employer unsuccessfully brought application for judicial review —Subsequently, adjudicator found that employer waived any right that it may havehad to argue unjust dismissal provision, that employer did not establish that em-ployee had been manager, and awarded employee punitive and aggravated dam-ages — Employer brought second application for judicial review — Second ap-plication dismissed — It was reasonable for adjudicator to conclude thatemployee lacked significant autonomy, discretion and authority in conduct ofemployer’s business — Adjudicator applied correct legal test to question ofwhether employee was manager and evidence demonstrated that employee’sability to make decisions was subject to majority owner of company, or generalmanager, or required their direct approval.

Labour and employment law –––– Labour law — Discipline and termina-tion — Remedies — Damages and compensation — Miscellaneous –––– Em-ployee, together with husband and two other individuals, were shareholders anddirectors of corporate employer — Employee and husband were also creditors ofcorporate employer, having loaned it $150,000 — Employee was administrativeoffice manager — Employee became involved in acrimonious divorce proceed-ings — Employee was dismissed — Employee successfully brought wrongfuldismissal complaint under Canada Labour Code — Adjudicator found that em-ployer failed to establish that it had cause to dismiss employee — Employer un-


successfully brought application for judicial review — Subsequently, adjudica-tor found that employer waived any right that it may have had to argue unjustdismissal provision, that employer did not establish that employee had beenmanager, and awarded employee punitive and aggravated damages — Employerbrought second application for judicial review — Second application dis-missed — While punitive and aggravated damages were substantial, adjudica-tor’s conclusion that they were warranted in light of employer’s behaviour wasreasonable — Adjudicator correctly noted that aggravated damages were in-tended to be compensatory in nature whereas punitive damages were intended topunish and adjudicator’s determination that employer’s actions were motivatedby actual malice was one that was amply supported by evidence — Employerprovided false information in employee’s record of employment, provided falseinformation about employee’s income to Canada Revenue Agency, and false al-legations to police — Employer’s argument ignored evidence regard extent towhich it allowed husband to infect employment relationship with his animustoward employee stemming from breakdown of their marriage.

Cases considered by Anne L. Mactavish J.:

Banque Canadienne Imperiale de Commerce c. Torre (2010), 2010 CF 105,2010 CarswellNat 180, 2010 FC 105, 2010 CarswellNat 844, 81 C.C.E.L.(3d) 258, (sub nom. Canadian Imperial Bank of Commerce v. Torre) 2010C.L.L.C. 210-026, [2010] F.C.J. No. 85, [2010] A.C.F. No. 85, 362 F.T.R.232, (sub nom. Canadian Imperial Bank of Commerce v. Torre) 362 F.T.R.232 (Eng.), D.T.E. 2011T-51 (F.C.) — considered

Boucher v. Wal-Mart Canada Corp. (2014), 2014 ONCA 419, 2014 Carswell-Ont 6646, 120 O.R. (3d) 481, 318 O.A.C. 256, 2014 C.L.L.C. 210-037, 16C.C.E.L. (4th) 239, 374 D.L.R. (4th) 293, [2014] O.J. No. 2452 (Ont.C.A.) — followed

Donio v. Matawa First Nations Management Inc. (January 24, 2007), Doc. FileNo. YM2707-6359, [2007] C.L.A.D. No. 33 (Can.Adjud.(CLC Part III)) —considered

Elgert v. Home Hardware Stores Ltd. (2011), 2011 ABCA 112, [2011] A.J. No.560, 2011 CarswellAlta 1263, 2011 C.L.L.C. 210-034, 93 C.C.E.L. (3d) 123,47 Alta. L.R. (5th) 266, 336 D.L.R. (4th) 313, [2011] 12 W.W.R. 478, 510A.R. 1, 527 W.A.C. 1 (Alta. C.A.) — considered

Fernandes v. Penncorp Life Insurance Co./La Cie D’Assurance-Vie Penncorp(2014), 2014 ONCA 615, 2014 CarswellOnt 11886, [2014] I.L.R. I-5644,(sub nom. Fernandes v. Penncorp Life Insurance Co.) 122 O.R. (3d) 192,378 D.L.R. (4th) 42, 38 C.C.L.I. (5th) 171, (sub nom. Fernandes v.Penncorp Life Insurance Co.) 325 O.A.C. 79 (Ont. C.A.) — referred to

Hill v. Church of Scientology of Toronto (1995), 30 C.R.R. (2d) 189, 25C.C.L.T. (2d) 89, 184 N.R. 1, (sub nom. Manning v. Hill) 126 D.L.R. (4th)129, 24 O.R. (3d) 865 (note), 84 O.A.C. 1, [1995] 2 S.C.R. 1130, 1995 Cars-

Spruce Hollow Heavy Haul Ltd. v. Madill 279

wellOnt 396, 1995 CarswellOnt 534, [1995] S.C.J. No. 64, EYB 1995-68609, 24 O.R. (3d) 865 (S.C.C.) — followed

Joseph v. Tl’azt’en First Nation (2013), 2013 FC 767, 2013 CarswellNat 2467,2013 CF 767, 2013 CarswellNat 3200, (sub nom. Tl’azt’en First Nation v.Joseph) 2013 C.L.L.C. 210-044, 9 C.C.E.L. (4th) 173, [2013] F.C.J. No.841, 63 Admin. L.R. (5th) 295, (sub nom. Tl’azt’en First Nation v. Joseph)436 F.T.R. 79 (Eng.) (F.C.) — referred to

Keays v. Honda Canada Inc. (2006), 2006 CarswellOnt 5885, 2006 C.L.L.C.230-030, 52 C.C.E.L. (3d) 165, 216 O.A.C. 3, 82 O.R. (3d) 161, [2006] O.J.No. 3891, 274 D.L.R. (4th) 107 (Ont. C.A.) — considered

Keays v. Honda Canada Inc. (2008), 2008 SCC 39, 2008 CarswellOnt 3743,2008 CarswellOnt 3744, 66 C.C.E.L. (3d) 159, (sub nom. Honda CanadaInc. v. Keays) 2008 C.L.L.C. 230-025, EYB 2008-135085, [2008] S.C.J. No.40, 376 N.R. 196, 239 O.A.C. 299, 294 D.L.R. (4th) 577, (sub nom. HondaCanada Inc. v. Keays) [2008] 2 S.C.R. 362, 92 O.R. (3d) 479 (note), (subnom. Honda Canada Inc. v. Keays) 63 C.H.R.R. D/247 (S.C.C.) — referredto

Khosa v. Canada (Minister of Citizenship & Immigration) (2009), 2009 SCC 12,2009 CarswellNat 434, 2009 CarswellNat 435, 82 Admin. L.R. (4th) 1,[2009] S.C.J. No. 12, 77 Imm. L.R. (3d) 1, 385 N.R. 206, 304 D.L.R. (4th)1, (sub nom. Canada (Citizenship & Immigration) v. Khosa) [2009] 1 S.C.R.339 (S.C.C.) — referred to

Lake Babine Nation v. Williams (2012), 2012 FC 1085, 2012 CarswellNat 3503,2012 CF 1085, 2012 CarswellNat 5052, [2012] F.C.J. No. 1174, 418 F.T.R.95 (Eng.), [2012] A.C.F. No. 1174 (F.C.) — referred to

MacNutt v. Shubenacadie Indian Band (1997), 47 C.R.R. (2d) 189, (sub nom.Shubenacadie Indian Band v. Canada (Human Rights Commission)) 154D.L.R. (4th) 344, (sub nom. Shubenacadie Indian Band v. Canadian HumanRights Commission) 138 F.T.R. 275, 1997 CarswellNat 2092, (sub nom.Shubenacadie Indian Band v. Canada (Human Rights Commission)) [1998]2 F.C. 198, (sub nom. Shubenacadie Band Council v. Canada (HumanRights Commission)) 31 C.H.R.R. D/347, (sub nom. Shubenacadie IndianBand v. Canadian Human Rights Commission) [1998] 2 C.N.L.R. 212,[1997] F.C.J. No. 1481, 1997 CarswellNat 2760 (Fed. T.D.) — considered

Madill and Spruce Hollow Heavy Haul Ltd., Re (2014), 2014 FC 548, 2014 Car-swellNat 2154, 2014 CF 548, 2014 CarswellNat 6588, (sub nom. SpurceHollow Heavy Haul Ltd. v. Madill) 459 F.T.R. 1 (F.C.) — followed

Msuya v. Sundance Balloons International Ltd. (2006), 2006 FC 321, 2006 Car-swellNat 604, 48 C.C.E.L. (3d) 239, 2006 CF 321, 2006 CarswellNat 2253,289 F.T.R. 85, [2006] F.C.J. No. 398 (F.C.) — referred to

Wallace v. United Grain Growers Ltd. (1997), 152 D.L.R. (4th) 1, 219 N.R.161, 1997 CarswellMan 455, 1997 CarswellMan 456, [1997] S.C.J. No. 94,123 Man. R. (2d) 1, 159 W.A.C. 1, 97 C.L.L.C. 210-029, [1997] 3 S.C.R.


701, 36 C.C.E.L. (2d) 1, 3 C.B.R. (4th) 1, [1999] 4 W.W.R. 86, [1997]L.V.I. 2889-1, [1997] A.C.S. No. 94 (S.C.C.) — referred to

Whiten v. Pilot Insurance Co. (2002), 2002 SCC 18, 2002 CarswellOnt 537,2002 CarswellOnt 538, [2002] I.L.R. I-4048, 20 B.L.R. (3d) 165, [2002]S.C.J. No. 19, 209 D.L.R. (4th) 257, 283 N.R. 1, 35 C.C.L.I. (3d) 1, 156O.A.C. 201, [2002] 1 S.C.R. 595, REJB 2002-28036, 58 O.R. (3d) 480(note), 2002 CSC 18 (S.C.C.) — followed

6245820 Canada Inc. c. Perrella (2011), 2011 CF 728, 2011 CarswellNat 2380,2011 FC 728, 2011 CarswellNat 3320, D.T.E. 2011T-505, (sub nom.6245820 Canada Inc. v. Perrella) 412 F.T.R. 1 (Eng.) (F.C.) — referred to


Canada Labour Code, R.S.C. 1985, c. L-2Generally — referred tos. 167(3) — considered

APPLICATION by employer for second judicial review of decision of adjudica-tor, finding that employee was not manager and was entitled to punitive andaggravated damages.

Trevor Hande, for ApplicantShannon Knezacky, Respondent, for herself

Anne L. Mactavish J.:

1 This is the second application for judicial review of a proceedingunder the Canada Labour Code concerning the dismissal of ShannonKnezacky by Spruce Hollow Heavy Haul Ltd.

2 In 2013, an adjudicator determined that Spruce Hollow had failed toestablish that it had just cause to dismiss Ms. Knezacky. That decisionwas upheld by this Court on judicial review.

3 The adjudicator subsequently determined that having conceded liabil-ity, Spruce Hollow had waived any right that it may have had to arguethat the unjust dismissal provisions of the Code should not apply to Ms.Knezacky on the basis that she was a manager. The adjudicator furtherdetermined, in the alternative, that Spruce Hollow had not establishedthat Ms. Knezacky had in fact been a manager.

4 The adjudicator also concluded that Ms. Knezacky was entitled todamages for lost wages and expenses. In addition, the adjudicator heldthat the reprehensible conduct of the employer and its representative,

Spruce Hollow Heavy Haul Ltd. v. Madill Anne L. Mactavish J. 281

Ron Madill, were such that Ms. Knezacky should receive awards of bothpunitive and aggravated damages.

5 Spruce Hollow seeks judicial review of this second decision, assert-ing that it was treated unfairly by the adjudicator, who did not allow it toraise the question of whether Ms. Knezacky was a manager at the reme-dies hearing. At the same time, Spruce Hollow argues that the adjudica-tor’s finding that Ms. Knezacky was not a manager was unreasonable.

6 Spruce Hollow further submits that the adjudicator erred in awardingpunitive and aggravated damages on the facts of this case, or, in the alter-native, that the awards were excessive.

7 I have concluded that the adjudicator did not err in arriving at hisdecision, with the result that the application for judicial review will bedismissed.

I. Background8 It is important to have an understanding of the events giving rise to

this litigation and of the history of the proceeding itself in order to putthe adjudicator’s decision into context, particularly as it relates to hisaward of punitive and aggravated damages.

9 Spruce Hollow is a small company which specializes in hauling over-sized equipment across Western Canada and the Western United States.

10 Mr. Madill and Ms. Knezacky were husband and wife. Together withJames and Jen Weber, they were shareholders and Directors of SpruceHollow. Mr. Madill and Ms. Knezacky were also creditors of the com-pany, having loaned Spruce Hollow approximately $150,000.

11 These four individuals were also company employees. Mr. Weberwas Spruce Hollow’s President, and worked as a truck driver. Mr. Madillwas the General Manager of the company, and Ms. Weber was also em-ployed by Spruce Hollow. Ms. Knezacky began working for SpruceHollow in 2005, and described herself in her unjust dismissal complaintas the company’s “Administrative Officer Manager”, and in her affidavitas “the lead dispatcher, in charge of quoting freight, arrang-ing/dispatching trucks, customs, customer relations, etc.” The companyoperated out of the basement of Mr. Madill and Ms. Knezacky’s matri-monial home in Abbotsford, British Columbia.


II. The Events Leading up to Ms. Knezacky’s Dismissal12 Ms. Knezacky alleges that her marriage to Mr. Madill was an abusive

one, something that Mr. Madill denies. The couple separated on August11, 2011, when Ms. Knezacky left the family home following a confron-tation with Mr. Madill that Ms. Knezacky says became violent. The par-ties subsequently became involved in acrimonious divorce proceedings.The conflict between Ms. Knezacky and Mr. Madill gave rise to many ofthe events at issue in this case, and the issues that confronted the adjudi-cator were often intertwined with the matrimonial proceedings in whichthe couple were involved.

13 Ms. Knezacky testified that she was afraid of Mr. Madill and wasconcerned about the fact that she would have to work with him after thecouple separated. In the period between her separation from Mr. Madilland the termination of her employment (a period of just under a month),Ms. Knezacky says that she was verbally abused by Mr. Madill while shewas at work. When Ms. Knezacky complained to James Weber aboutMr. Madill’s conduct, he promised Ms. Knezacky that he would addressMr. Madill’s conduct and assured her that her job was safe. No actionwas ever taken by Mr. Weber, however, to protect Ms. Knezacky fromMr. Madill’s abuse, and it later became apparent that Mr. Weber hadallied himself with Mr. Madill.

14 On August 28, 2011, Mr. Madill changed the locks on the familyhome. This meant that Ms. Knezacky also could no longer access herworkplace, and Mr. Madill advised her that she was no longer welcomein either the home or the office. Ms. Knezacky spoke again to Mr. Weberabout the situation and he told her not to worry, and that he would sortthings out when he got back from his latest job.

15 During the night of August 30, 2011, the vehicle that Ms. Knezackyhad been driving was removed from the driveway of the house where shewas staying and was later located at her former matrimonial home.

16 On September 7, 2011, Ms. Knezacky received a letter dated August31, 2011 signed by Mr. Weber, advising her that her employment withSpruce Hollow had been terminated. No reasons were given for her ter-mination. She received a second letter from Mr. Weber that same day(also dated August 31, 2011) advising her that she had failed to attend acrucial business meeting and that, as a result, she was being removed as adirector of the company and all of her signing authorities were beingrevoked.


III. The Events After the Termination of Ms. Knezacky’sEmployment

17 Ms. Knezacky filed her complaint of unjust dismissal on September21, 2011, and the adjudicator was appointed to deal with the complainton March 28, 2012. However, the matter did not proceed to a hearing onthe merits until August 7, 2013.

18 Ms. Knezacky was initially reluctant to move the matter forward be-cause, although she had requested that Mr. Weber represent SpruceHollow in the unjust dismissal proceedings, the company appointed Mr.Madill as its sole representative in the matter. Spruce Hollow says thatMr. Madill was appointed as its representative because Mr. Weber wasoften on the road, and that he was not comfortable speaking publicly, andwould have difficulty representing the company in a matter such as this.Spruce Hollow further states that Jen Weber would also not have been asuitable representative as she was an inexperienced employee and did notwant to assume that role.

19 In reviewing the adjudicator’s decision on liability, Justice Mosleyheld that “it was improper for [Spruce Hollow] to insist on having Mr.Madill represent its interests given the matrimonial dispute in which hewas involved with the respondent”. Justice Mosley further observed that“Mr. Madill could be perceived to have an oblique motive for delay andobstruction of the Labour Code proceedings” and that “the tone of[Spruce Hollow’s] communications with the Adjudicator and betweenMr. Madill and [Ms. Knezacky] suggest, at best, an attempt to stall theproceedings and at the worst, intimidation”: Madill and Spruce HollowHeavy Haul Ltd., Re, 2014 FC 548 (F.C.) at para. 50 [“Spruce Hollow#1”].

20 Ms. Knezacky quickly overcame her initial reluctance to proceedwith her case, and the adjudicator attributed much of the ensuing delay toSpruce Hollow and Mr. Madill, both of whom had resisted attempts tomove the litigation forward in an orderly and expeditious manner.

21 The adjudicator found in an interlocutory decision dated October 24,2012 that Spruce Hollow had never provided Ms. Knezacky with anyreasons for the termination of her employment. Consequently, he orderedSpruce Hollow to provide Ms. Knezacky with reasons for her dismissalwithin one week of his order. The adjudicator further directed that thedocument be delivered to his office, stating that once he was satisfiedwith the form and content of the letter, he would provide it to Ms.Knezacky himself.


22 Spruce Hollow then brought a preliminary challenge to the adjudica-tor’s jurisdiction, in which it argued that Ms. Knezacky had not beenemployed by Spruce Hollow for a sufficient length of time as to entitleher to the protection of the unjust dismissal provisions of the CanadaLabour Code. Spruce Hollow alleged that Ms. Knezacky had been anindependent contractor and not an employee of Spruce Hollow duringpart of the time that she worked at the company. The adjudicator rejectedthis argument, finding that Ms. Knezacky had been employed at SpruceHollow for more than the requisite 12 consecutive months of continuousemployment prior to her dismissal.

23 Spruce Hollow then brought another motion seeking to dismiss thecomplaint, this one on the basis of “res judicata”. The company arguedthat Ms. Knezacky’s complaint was fundamentally intertwined with thecouple’s divorce proceedings to which Spruce Hollow and Mr. Weberhad been named as parties. The adjudicator dismissed this motion in aninterlocutory award dated November 23, 2012, finding that res judicatahad no application in this case, as no other court or tribunal had decidedthe question before him: namely, whether Ms. Knezacky had been un-justly dismissed by Spruce Hollow.

24 Recognizing, however, that there was the potential for overlap be-tween some of the issues in the unjust dismissal proceeding and some ofthe issues in the matrimonial litigation, the adjudicator decided that theunjust dismissal proceeding should be bifurcated into an initial hearingon whether Spruce Hollow had just cause to terminate Ms. Knezacky’semployment, with a subsequent hearing to occur on the question of reme-dies if her dismissal was found to be unjust.

25 Finally, the adjudicator had difficulty scheduling a date for the hear-ing from the time that Spruce Hollow retained counsel in or around No-vember of 2012 until August of 2013 as a result of the unavailability ofSpruce Hollow’s counsel, Mr. Madill, Mr. Weber, and Spruce Hollow’switnesses: see Spruce Hollow #1 at para. 15.

IV. The Hearing on Liability, the Resulting Decision, and its JudicialReview

26 The hearing on liability finally took place on August 7, 2013. Ms.Knezacky appeared at the hearing without counsel. She was, however,accompanied by a friend who was there to provide her with moral sup-port. Ms. Knezacky’s friend was a former employee of a company called


“Super H”, and was married to the sole director and shareholder of SuperH.

27 Spruce Hollow sought to have Ms. Knezacky’s friend excluded fromthe hearing on the basis that her presence could prejudice the company inlitigation between Spruce Hollow and Super H in the Supreme Court ofBritish Columbia.

28 The adjudicator refused this request, as well as Spruce Hollow’s sub-sequent request for an adjournment, on the basis that Spruce Hollow hadfailed to adequately explain how its interests in the British Columbia liti-gation would be prejudiced by the presence of Ms. Knezacky’s friend atthe unjust dismissal hearing.

29 It was at this point that Spruce Hollow’s counsel advised the adjudi-cator that the company intended to withdraw from the hearing. The adju-dicator warned Spruce Hollow that if the company chose to do so, itwould fail to satisfy the onus on it to establish that it had just cause toterminate Ms. Knezacky’s employment. Despite the adjudicator’s admo-nition, Spruce Hollow’s representative, its counsel and its witnesses allchose to leave the hearing.

30 The adjudicator issued a decision on September 24, 2013, in which hedescribed the difficulties that he had encountered in moving this file for-ward because of the conduct of Spruce Hollow and its representatives.The adjudicator further found that that as a result of its withdrawal fromthe hearing, Spruce Hollow had failed to establish that it had just cause toterminate Ms. Knezacky’s employment, and her complaint of unjust dis-missal was thus upheld. The adjudicator concluded by noting that a fur-ther hearing would be scheduled to deal with the issue of remedies.

31 Spruce Hollow sought judicial review of the adjudicator’s decision,and the company’s application came before Justice Mosley in SpruceHollow #1. Justice Mosley upheld the adjudicator’s decision, noting thatcounsel for Spruce Hollow was also unable to explain to him how thepresence of Ms. Knezacky’s friend at the hearing could affect the com-pany’s case in the British Columbia Supreme Court: Spruce Hollow #1 atpara. 37.

32 Justice Mosley further observed that administrative tribunals are mas-ters of their own procedure, and that Spruce Hollow had not demon-strated that it had been prejudiced as a result of the denial of an adjourn-ment. He further found that the denial of the adjournment wasreasonable, particularly in light of the protracted nature of the proceed-ings and the history of delay, which he found was primarily attributable


to the actions of Spruce Hollow and its “attempts to block or derail thehearing of the complaint on its merits”: Spruce Hollow #1 at para. 47.

33 Consequently, Justice Mosley dismissed Spruce Hollow’s applicationfor judicial review with costs, and with the direction that the matter beremitted to the adjudicator to schedule a hearing on the remedies availa-ble to Ms. Knezacky to be held as soon as practicable.

V. The Decision Under Review34 The hearing into the issue of remedies took place on October 24,

2014. At this hearing, Spruce Hollow raised an objection to the adjudica-tor’s jurisdiction to grant a remedy to Ms. Knezacky, arguing for the firsttime that the unjust dismissal provisions of the Code should not apply toher because she had been a manager. The adjudicator held that havingconceded liability, Spruce Hollow had waived any right that it may havehad to raise this argument. The adjudicator further determined, in the al-ternative, that Spruce Hollow had not established that Ms. Knezacky hadin fact been a manager.

35 The adjudicator held that Ms. Knezacky was entitled to $5,450.17 forlost income and expenses. No issue is taken by Spruce Hollow with re-spect to this award.

36 After reviewing the difficult history of this matter, the adjudicatoralso concluded that the reprehensible conduct of Spruce Hollow and Mr.Madill were such that Ms. Knezacky should receive $50,000 in aggra-vated damages, and $25,000 in punitive damages.

37 Spruce Hollow says that the adjudicator erred in awarding punitiveand aggravated damages on the facts of this case, or, in the alternative,that the awards were excessive.

VI. The Propriety of the Parties’ Affidavits and the State of theEvidentiary Record

38 Before addressing the merits of Spruce Hollow’s application, I notethat both parties took issue in their memoranda of fact and law with thecontent of the opposing party’s affidavit, although neither party raisedthis as an issue at the hearing before me.

39 With one exception, Spruce Hollow’s objection is entirely general innature. Its memorandum of fact and law states only that portions of Ms.Knezacky’s affidavit are prejudicial to the company as they “are eitherirrelevant, based on hearsay ... or contain unnecessary ‘gloss orexplanation’”.


40 Spruce Hollow raised a similar, unparticularized objection to the affi-davit that Ms. Knezacky filed in Spruce Hollow #1. As Justice Mosleynoted in that case, this left Ms. Knezacky in the unenviable position ofbeing left to respond to unspecified complaints about the content of heraffidavit: at para. 26.

41 Like Justice Mosley did in Spruce Hollow #1, I find that Ms.Knezacky “did her best to present the facts relevant to the dispute andbased upon her own personal knowledge of the events that have tran-spired as required”: at para. 27. Again like Justice Mosley, I concludethat to the extent that any portion of her affidavit consists of any unnec-essary ‘gloss or explanation’ of the facts within her personal knowledgeand relevant to the dispute, the proper course is to simply disregard it.

42 The only paragraph in Ms. Knezacky’s affidavit that Spruce Hollowactually identifies as being improper is paragraph 21(d), which relates tosettlement discussions between the parties. Paragraph 21(d) of Ms.Knezacky’s affidavit also makes reference to documents at Exhibit “B”to the affidavit. In actual fact, it is Exhibit “V” to Ms. Knezacky’s affida-vit that attaches settlement offers made by each side to this litigation. Iagree with Spruce Hollow that paragraph 21(d) and pages 176-180 inExhibit V to Ms. Knezacky’s affidavit contain information relating tosettlement discussions between Spruce Hollow and Ms. Knezacky. WhileMs. Knezacky has indicated that she is prepared to waive the privilegethat attaches to such documents, Spruce Hollow has not. Accordingly,the information is subject to settlement privilege and should therefore bestruck.

43 Ms. Knezacky’s objection to Mr. Madill’s affidavit was particular-ized. She submitted paragraphs 10, 15, 22-28, 30-39, and 40 of Mr. Ma-dill’s affidavit should be struck as hearsay or unnecessary gloss and ex-planation. As I did with Ms. Knezacky’s affidavit, to the extent that theaffidavit consists of any unnecessary ‘gloss or explanation’ of the factsthat were within Mr. Madill’s personal knowledge and are relevant to thedispute, I will disregard them.

44 Before leaving the issue of the parties’ affidavits, I would make someadditional observations with respect to the state of the evidentiary recordbefore me.

45 One of the difficulties with this case is that there is no transcript ofthe hearing before the adjudicator, and thus no complete record of whatevidence was and was not before the adjudicator when he made the deci-sion at issue. The parties’ affidavits provide some information in this re-


gard, but many of the assertions of fact contained in their memoranda areunsupported by affidavit evidence establishing that the evidence reliedupon was actually before the adjudicator.

46 This was a particular problem with Spruce Hollow’s evidence, giventhat it bore the burden of establishing that the adjudicator’s decision wasunreasonable, and that his factual findings were unsupported by the evi-dence before him.

47 For example, a number of the company’s submissions are not sup-ported by reference to the evidence: see for example, paragraph 44 (a) to(j) of Spruce Hollow’s memorandum of fact and law.

48 Moreover, some of Spruce Hollow’s affidavit evidence is inconsistentwith the arguments that it advances. For example, in paragraph 11 of Mr.Madill’s affidavit he asserts that “the adjudicator made it clear at the be-ginning of the [damages] hearing that he did not want to waste time withevidence and argument regarding whether Spruce Hollow had just causeto dismiss Ms. Knezacky”. At the same time, at paragraphs 102 to 104 ofits memorandum of fact and law, Spruce Hollow faults the adjudicatorfor failing to expressly address evidence allegedly given by Mr. Madill atthe damages hearing to support Spruce Hollow’s allegation that Ms.Knezacky had improperly used company funds to pay for her personalexpenses.

49 Other statements in Mr. Madill’s affidavit have been demonstrated tobe untrue: specifically, Mr. Madill’s claim at paragraph 25 of his affida-vit that Ms. Knezacky was reprimanded by a British Columbia judge fordoctoring evidence.

50 As a consequence, where the evidence of Mr. Madill as to what wenton at the hearings before the adjudicator conflicts with that of Ms.Knezacky, I prefer that of Ms. Knezacky. I am, moreover, not preparedto accept Spruce Hollow’s submissions as to errors allegedly committedby the adjudicator where those submissions are not supported byevidence.

VII. Did the Adjudicator Err in Rejecting Spruce Hollow’sArgument that Ms. Knezacky was a Manager?

51 Spruce Hollow argues that the adjudicator erred in concluding thatMs. Knezacky was not a manager. Subsection 167(3) of the Canada La-bour Code provides that the unjust dismissal provisions of the Code donot apply to employees who are managers. The standard of review appli-cable to a determination by an adjudicator as to whether a worker is an


employee or manager for the purposes of the Code is that of reasonable-ness: Lake Babine Nation v. Williams, 2012 FC 1085 at para. 10, 418F.T.R. 95 (Eng.) (F.C.); 6245820 Canada Inc. c. Perrella, 2011 FC 728at para. 12, 412 F.T.R. 1 (Eng.) (F.C.).

52 At the same time, Spruce Hollow submits that it was treated unfairlyby the adjudicator, who, it says, did not allow it to raise the question ofwhether Ms. Knezacky had worked as a manager at the remedies hear-ing. To the extent that the company raises a question of procedural fair-ness, the Court’s task is to determine whether the process followed bythe adjudicator satisfied the level of fairness required in all of the circum-stances: see Khosa v. Canada (Minister of Citizenship & Immigration),2009 SCC 12 at para. 43, [2009] 1 S.C.R. 339 (S.C.C.).

53 It is not accurate to say that the adjudicator prevented Spruce Hollowfrom raising the question of whether Ms. Knezacky had been a managerat the remedies hearing. The adjudicator did allow the company to raisethis issue at the remedies hearing, evidence was adduced by the companyrelating to Ms. Knezacky’s responsibilities while she worked at SpruceHollow, and the matter was fully argued.

54 What the adjudicator did do in his decision on remedies was to con-clude that having conceded liability, Spruce Hollow had waived it rightto raise any more jurisdictional issues.

55 I agree with Spruce Hollow that this was an error: Spruce Hollow’sargument went to the jurisdiction of the adjudicator, and it is alwaysopen to a party to raise the issue of jurisdiction. As Justice Rothstein(speaking as a judge of this Court) noted in MacNutt v. ShubenacadieIndian Band, [1998] 2 F.C. 198 at para. 41, 138 F.T.R. 275 (Fed. T.D.), aparty to an administrative proceeding cannot “by waiver or acquiescence,confer jurisdiction on a tribunal that was not, or could not be, conferredby Parliament”.

56 The adjudicator’s error does not, however, affect the outcome of thisapplication as his alternative finding that Spruce Hollow had not estab-lished that Ms. Knezacky was in fact a manager was reasonable.

57 In assessing whether Ms. Knezacky had been a manager at SpruceHollow, the adjudicator applied the test established in Donio v. MatawaFirst Nations Management Inc., [2007] C.L.A.D. No. 33(Can.Adjud.(CLC Part III)), at para. 40. That decision identifies a num-ber of factors that are to be considered in determining whether a givenemployee is a manager. The majority of these factors relate to the natureand extent of the employee’s responsibilities.


58 Spruce Hollow does not take issue with the test applied by the adjudi-cator, submitting instead that the adjudicator’s factual findings as to Ms.Knezacky’s responsibilities within the company were unreasonable. I donot agree. Based on the evidence presented, it was reasonable for theadjudicator to conclude that Ms. Knezacky lacked significant autonomy,discretion, and authority in the conduct of Spruce Hollow’s business.

59 The unusual feature of this case is that in addition to being an em-ployee of Spruce Hollow, Ms. Knezacky was also a shareholder in thecompany, as well as a Director and creditor of the company. However,the issue for determination by the adjudicator was not the nature of herrole in one of these other capacities, but the extent to which she had au-tonomy, discretion, and authority in the conduct of her employer’s busi-ness in her role as a company employee.

60 The fact that Ms. Knezacky described herself as an “AdministrativeOfficer Manager” in her unjust dismissal complaint was not determina-tive of the issue. As the adjudicator noted, “in matters such as this, adju-dicators should be more interested in substance than form”. Indeed, thisCourt has held that “[t]he nature of the work performed is more impor-tant than the title given to the worker”: Banque Canadienne Imperiale deCommerce c. Torre, [2010] F.C.J. No. 85 at para. 17, 362 F.T.R. 232(F.C.).

61 The Court went on in Torre to observe that a manager “is a workerwho performs administrative rather than operational duties”, and that this“can include persons at the upper or lower end of the management chain,depending on the degree of independence the manager may have and theimportance of the management functions in question”. A manager must,however be “in a position of control”, and a “clear distinction is to bemade between a ‘supervisor’ and a ‘manager’”. Finally, a person will notbe found to be a manager if he or she “is merely a conduit between theemployees and a higher body who is the actual decision-maker or makesrecommendations to a higher body that approves or disapproves his rec-ommendations”: Torre, above at para. 17.

62 Ultimately, the test for demonstrating that a worker is a manager iswhether that person had significant autonomy, discretion, and authorityin the conduct of the employer’s business. This requires the satisfactionof two criteria: First, the worker must be engaged in the administration ofthe employer’s affairs, and second, the worker must have the power ofindependent action, autonomy and discretion in a significant range ofmatters within her or his area of responsibility: Msuya v. Sundance


Balloons International Ltd., 2006 FC 321 at para. 23, 289 F.T.R. 85(F.C.); Lake Babine Nation v. Williams, above at paras. 49 and52, (2012), 418 F.T.R. 95 (Eng.) (F.C.).

63 Spruce Hollow submitted to the adjudicator that Ms. Knezacky wasresponsible for handling much of the day to day management of the of-fice, including participating in the hiring and firing of employees andbeing involved in the creation of the employee manual. She also helpedto supervise employees, and she had signing authority and the power tobind the company to contracts. In addition, Ms. Knezacky incurred ex-penses on behalf of the company, purchasing office supplies and prepar-ing the office budget. Spruce Hollow also noted that Ms. Knezacky waspaid the same or more than Mr. Weber, Mr. Madill and Ms. Weber.

64 Dealing with this last point first, the adjudicator found that Ms.Knezacky’s modest income was not indicative of an employee with man-agerial authority. I agree with Spruce Hollow that the issue was not theabsolute dollar value of Ms. Knezacky’s income, but its relativity to thesalaries of the employees that she had identified as being the company’smanagers: Donio, above at para. 40. This error is not, however, sufficientto undermine the overall reasonableness of the adjudicator’s finding thatMs. Knezacky was not a manager.

65 After reviewing the conflicting evidence regarding Ms. Knezacky’srole as an employee at Spruce Hollow, the adjudicator concluded that shehad no real autonomy, other than in her role as a dispatcher. While shemay have functioned as a collaborative member of a team within whatwas a small trucking office, the adjudicator found that Ms. Knezacky hadno capacity to act independently, and that virtually all of her decisionswere subject to ratification by one or all of Mr. Weber, Mr. Madill andMs. Weber.

66 While Ms. Knezacky acknowledged that she was involved in the cre-ation of the employee manual, the adjudicator accepted her evidence thatthe document had actually been prepared by Mr. Madill and that Ms.Knezacky had simply typed it. Typing a document is clearly not a mana-gerial function.

67 The adjudicator further found that while Ms. Knezacky may havebeen involved in the hiring of at least one employee, she had no authorityto hire anyone on her own. In a similar vein, the adjudicator noted thatwhile Ms. Knezacky acknowledged that she had limited cheque-signingauthority, Mr. Weber’s signature was also required on company cheques.


68 Spruce Hollow has not directed me to any evidence that was in therecord before the adjudicator that would undermine the reasonableness ofthese findings.

69 Indeed, while Ms. Knezacky may have viewed herself as being in apartnership with the other owners of the company, Spruce Hollow pre-sented little evidence demonstrating that she possessed any independentauthority in her capacity as an employee. While the evidence suggestedthat she was to some extent involved in the decision-making process ofthe company, it did not establish that she was able to independently makeany decisions for the company in her role as the company’s Administra-tive Office Manager. Rather, the evidence showed that her ability tomake decisions was subject to guidelines provided by Mr. Weber, themajority owner of the company, or by Mr. Madill as General Manager,or required their direct approval.

70 At the end of the day, the adjudicator applied the correct legal test tothe question of whether Ms. Knezacky was a manager. He reviewed theevidence adduced by each side, explaining why, in his view; the evi-dence adduced by Spruce Hollow did not support a finding that Ms.Knezacky performed managerial functions within the company. The ad-judicator’s findings were reasonable, and no basis has been shown forthis Court’s intervention.

VIII. The Adjudicator’s Award of Punitive and AggravatedDamages

71 The adjudicator concluded that the reprehensible conduct of SpruceHollow and Mr. Madill, both in relation to the termination of Ms.Knezacky’s employment and with respect to these proceedings, justifiedan award in her favour of $50,000 in aggravated damages, and $25,000in punitive damages.

72 While Spruce Hollow does not dispute the jurisdiction of an adjudica-tor to award punitive and aggravated damages in the appropriate circum-stances, it takes issue with the awards made in this case. Spruce Hollowsubmits that it was treated unfairly by the adjudicator in this regard, asMs. Knezacky only raised her claim for punitive and aggravated dam-ages at the damages hearing. Spruce Hollow further contends that thecircumstances of this case did not justify either award, or, in the alterna-tive, that the amounts awarded were excessive.

73 As will be explained below, I have not been persuaded that SpruceHollow was treated unfairly by the adjudicator. While I do agree with


Spruce Hollow that the awards of punitive and aggravated damages weresubstantial, the adjudicator’s conclusion that they were warranted in thiscase in light of the company’s behavior in this matter is one that wasreasonably open to him on the record before him.

A. The Fairness Issue74 Dealing first with the fairness issue, Spruce Hollow notes that Ms.

Knezacky only raised her claim for punitive and aggravated damages onthe morning of the damages hearing and that she had not previously dis-closed the documents on which she was relying in support of her claim tothe company.

75 However, with the exception of the medical note discussed below,Spruce Hollow has not explained how it was prejudiced Ms. Knezacky’sfailure to claim punitive and aggravated damages earlier in the proceed-ing. In particular, it has not asserted that there was any evidence that itwas unable to adduce in response to the claims, nor has it suggested thatthere were any questions that it was unable to ask that were relevant tothese claims.

76 Spruce Hollow’s fairness argument focussed on a medical note whichindicated that Ms. Knezacky would be medically unfit to work for a pe-riod of three months. Spruce Hollow argues that had it been made awareof this document in a timely manner, it could have contacted Ms.Knezacky’s doctor in an effort to determine how much of her distresswas attributable to the breakdown of her marriage, and how much relatedto the circumstances surrounding the loss of her employment. There areseveral difficulties with the argument.

77 Many of the documents on which Ms. Knezacky relied in relation toher claim for punitive and aggravated damages had already been dis-closed to Spruce Hollow. When Ms. Knezacky attempted to file a briefof the documents on the morning of the damages hearing, Spruce Hollowwas given time to review the documents, and both affiants agree that theonly document with which the company took issue was a journal entrywritten by Ms. Knezacky. No objection was taken by counsel for thecompany to the filing of the medical note, nor is there any suggestion inthe evidence before me that Spruce Hollow advised the adjudicator that ithad been prejudiced in any way by the late disclosure of the medicalnote.

78 In these circumstances, I have not been persuaded that Spruce Hollowwas treated unfairly by the adjudicator in this regard.


B. The Award of Aggravated Damages79 As a general rule, damages are not available to an employee for inju-

ries that result from the fact that they have been terminated from theiremployment: Keays v. Honda Canada Inc., 2008 SCC 39 at para.50, [2008] 2 S.C.R. 362 (S.C.C.); Wallace v. United Grain Growers Ltd.,[1997] 3 S.C.R. 701 at paras. 73, 75, 88-89, [1997] S.C.J. No. 94(S.C.C.).

80 An employee may, however, be awarded damages for injuries, in-cluding mental distress, caused by the manner of their dismissal, wherethe employer engages in conduct that is unfair or is in bad faith, such asbeing untruthful, misleading or unduly insensitive. This flows from theemployer’s obligation to act in good faith and deal fairly with their em-ployees when they are dismissed. Where the employer breaches that obli-gation, the resulting injury to the employee will be compensable: Keaysv. Honda Canada Inc., above at paras. 57-58, [2008] 2 S.C.R. 362(S.C.C.); Wallace, above at para. 95.

81 Where aggravated damages are warranted, they are awarded as com-pensation for the injury suffered by the employee. As a result, theamount awarded must reflect the actual damages or injury incurred bythe employee as a result of the employer’s conduct. It is not enough forthe employee to simply demonstrate that the employer breached theirduty of good faith and fair dealing. Rather, the employee must also showthat the employer’s conduct in fact caused them some injury: HondaCanada Inc., above at para. 59; Fernandes v. Penncorp Life InsuranceCo./La Cie D’Assurance-Vie Penncorp, 2014 ONCA 615 at para. 90, 122O.R. (3d) 192 (Ont. C.A.).

82 In determining the appropriate quantum of damages, the Court shouldexplain how it arrived at a particular figure, or identify what evidencejustifies that amount. Further, the award should not be inordinately highor disproportionate given the circumstances of the case or the analogouscase law: Fernandes, above at para. 100; Joseph v. Tl’azt’en First Na-tion, 2013 FC 767 at para. 40, 436 F.T.R. 79 (Eng.) (F.C.).

83 In coming to the conclusion that the circumstances of this case war-ranted awards of both punitive and aggravated damages, the adjudicatorcorrectly noted that aggravated damages are intended to be compensatoryin nature, whereas punitive damages are intended to punish a party formalicious, high-handed or oppressive conduct that offends the adjudica-tor’s sense of decency.


84 In determining that an award of aggravated damages was appropriatein this case, the adjudicator found that the conduct of Spruce Hollow andMr. Madill was malicious, harsh and vindictive, that it demonstrated con-tempt for the judicial process, that it was abusive of Ms. Knezacky in theextreme, and that she had suffered greatly as a result.

85 In support of this conclusion, the adjudicator noted the assurancesthat were repeatedly given to Ms. Knezacky by Mr. Weber that the com-pany would address Mr. Madill’s abusive behaviour of her — assurancesthat continued right up until the termination of her employment.

86 The adjudicator also noted Spruce Hollow’s decision to appoint Mr.Madill as its representative in the proceedings, and his continual obstruc-tion of the proceedings itself. The adjudicator observed that Justice Mos-ley had commented on the impropriety of the company insisting on hav-ing Mr. Madill as its representative, and his comment that this was “atbest, an attempt to stall the proceedings and at the worst,intimidation”, Spruce Hollow #1, above at para. 50. Having had the op-portunity to observe the conduct of the parties throughout these pro-tracted proceedings, the adjudicator found that “the truth lies more in thelatter than the former”.

87 The adjudicator also found that the conduct of Mr. Madill in securingthe termination of Ms. Knezacky’s employment on charges that werefalse and even fraudulent, which was then compounded by his bullyingand intimidation of her throughout the proceedings “was malicious, harshand vindictive”.

88 Although it was not specifically mentioned by the adjudicator, it isnoteworthy that despite Justice Mosley’s finding that Mr. Madill’s in-volvement as the company representative in the unjust dismissal pro-ceedings was improper, and Spruce Hollow’s admissions before me thatthe choice of Mr. Madill as the company representative “was clearly thewrong choice”, Mr. Madill appeared as Spruce Hollow’s representativeat the damages hearing and, I note, at the hearing before this Court.

89 Spruce Hollow asserted that the reason for Mr. Madill’s continuedinvolvement in the case was that he was the company representativemost intimately acquainted with the issues, submitting that it should notbe precluded from having the benefit of his assistance. I note, however,that this argument is totally unsupported by the evidence, and that theonly explanation that has ever been provided for Mr. Madill’s involve-ment in this matter was that Mr. and Ms. Weber were “not comfortable”doing so.


90 The adjudicator also relied on the fact that Ms. Knezacky had beenlocked out of her workplace by Mr. Madill, and that she had that she hadbeen terminated from her employment without any advance warning, andwith no reasons being given for her termination. Spruce Hollow arguesthat the adjudicator erred in this regard, as reasons were given in its sec-ond letter of August 31, 2013, and that these reasons had been sufficientfor the HRSDC inspector appointed to look into this matter.

91 This misses the point: whatever an inspector may have thought aboutthe interpretation of the two August 31 letters in the weeks or monthsafter the termination of Ms. Knezacky’s employment, the fact is that shewas summarily terminated from her employment — a job in which sheevidently took great pride — without being provided with any justifica-tion for the company’s actions.

92 I do agree with Spruce Hollow that it was unreasonable for the adju-dicator to fault the company for not providing Ms. Knezacky with a copyof the reasons that it produced in response to the adjudicator’s October24, 2012 order. This is because the adjudicator had specifically directedthe company to deliver its reasons to the adjudicator’s office, and thatonce the adjudicator was satisfied with the form and content of the docu-ment; he would provide it to Ms. Knezacky himself. This is, however, aminor error, and its effect is inconsequential, given the numerous otherreasons cited by the adjudicator for his award of aggravated damages.

93 Insofar as the reasons themselves were concerned, the adjudicatornoted that the document produced by Spruce Hollow alleged actions onthe part of Ms. Knezacky “which must be considered to be amongst themost egregious of causes, which, if true, would easily support her termi-nation”. These were Ms. Knezacky’s alleged:

1. Misdirection of company funds;

2. Removal of company assets;

3. Dishonesty to ownership and management;

4. Fraudulent manipulation of the corporate minute book;

5. Unauthorized purchases made with company funds;

6. Failure to file corporate taxes;

7. Failure to pay corporate taxes;

8. Failure to attend a required meeting with ownership;

9. Unauthorized use of a company vehicle; and


10. Failure to follow all directions and respond to management.94 The adjudicator further observed that “[t]he nature of the charges

generally purport to impugn [Ms. Knezacky’s] character and integrity.Some allege actions of a criminal nature and moral turpitude such as mis-direction of company funds or fraudulently manipulating corporate min-ute book”, while others “accuse her only of making unauthorizedpurchases or activities involving non-feasance”, and one “simply allegesthat she was insubordinate in that she failed to follow all directions andrespond to management”.

95 Spruce Hollow has not taken issue with the adjudicator’s characteri-zation of the reasons given for Ms. Knezacky’s termination and I findthat it was entirely reasonable.

96 The adjudicator went on to observe that “charges of that nature carrywith them a heavy duty on the Employer to diligently prosecute andprove them without which they necessarily must be seen as defamatoryof the employee’s reputation and character and may properly support aclaim of aggravated damages under proper circumstances”. Having failedto tender evidence to support its allegations, it was reasonable for theadjudicator to find that the making of these allegations supported anaward of aggravated damages, particularly when regard is had to the factthat Spruce Hollow did not confine itself to defaming Ms. Knezacky inthe document in issue, but repeated its claims to others in an attempt todissuade other companies from hiring her.

97 The adjudicator also had regard to the fact that Mr. Madill had filed acomplaint with the Abbotsford Police in June of 2012, in his capacity asGeneral Manager of Spruce Hollow, alleging that Ms. Knezacky had sto-len assets and money from Spruce Hollow. This claim was evidently un-supported by evidence and went nowhere, but not before Ms. Knezackywas put to the embarrassment and distress of being subjected to a policeinterview.

98 The adjudicator also found that Spruce Hollow had subjected Ms.Knezacky to the intentional and malicious infliction of mental distress,embarrassment, hardship, loss of self-esteem and dignity based onSpruce Hollow’s filing of two false T-4’s with the Canada RevenueAgency that grossly inflated Ms. Knezacky’s income for 2011. This ledto a two-year long battle between Ms. Knezacky and the CRA before thematter was finally resolved in her favour.

99 The record shows that the additional amounts that were included bySpruce Hollow in Ms. Knezacky’s T-4s were not income, but related to


the repayment of some of the monies that she had advanced to the com-pany, and were recorded as such in the company’s ledgers. Conse-quently, the adjudicator’s finding in this regard was reasonable.

100 The adjudicator further found that Spruce Hollow had falsely com-pleted Ms. Knezacky’s Record of Employment so that she would be de-nied unemployment benefits, and that she had been prevented from re-trieving her personal items from the office.

101 In light of the foregoing findings, the adjudicator’s determination thatSpruce Hollow’s actions were motivated by actual malice was one thatwas amply supported by the evidence. More importantly, insofar as thequestion of aggravated damages is concerned, the adjudicator’s findingthat Spruce Hollow made its allegations against Ms. Knezacky “with areckless disregard whether they were true or not, causing [Ms.Knezacky] mental distress, embarrassment, hardship and a loss of herself-esteem and dignity” was also one that was reasonably open to himon the record before him.

102 The adjudicator also found that Mr. Madill and Spruce Hollow hadrepeatedly attempted to stall and delay these proceedings — a findingwhich was endorsed by Justice Mosley in Spruce Hollow #1. SpruceHollow submits that it was unreasonable for the adjudicator to put all theblame for the delay on the company, and that the adjudicator failed tohave regard to the fact that Ms. Knezacky was initially reluctant to pur-sue this matter.

103 However, as was noted earlier, Ms. Knezacky’s initial reluctance topursue this matter stemmed from her fear of Mr. Madill, and the fact thathe had been designated as the company representative in the unjust dis-missal proceedings. Moreover, Ms. Knezacky quickly got over her reluc-tance and attempted to move the matter forward, only to be met by resis-tance and delay on the part of her former employer.

104 In light of all of the above circumstances, the adjudicator held thatMs. Knezacky was entitled to an award of aggravated damages for thesuffering that she endured. I agree with Ms. Knezacky that this findingwas amply supported by the record before the adjudicator and wasreasonable.

105 In arguing that the adjudicator’s damages awards were unreasonable,Spruce Hollow has attempted to pick away at the periphery of a numberof the adjudicator’s findings, taking issue, for example, with the adjudi-cator’s use of the word “stealing” in referring to the removal of Ms.Knezacky’s vehicle on August 30, 2011, suggesting that it unreasonably


attributed wrongdoing to the company, who was in fact the legal ownerof the vehicle.

106 What the adjudicator actually said was that Ms. Knezacky “wasawoken by the sound of someone apparently stealing her car” [my em-phasis]. The adjudicator is in no way deciding the issue of the ownershipof the vehicle with this comment, as Spruce Hollow seems to suggest.Given that the car was taken from Ms. Knezacky’s temporary residencein the middle of the night by unknown individuals, the adjudicator’s lan-guage seems to be an entirely apt description of the situation.

107 Spruce Hollow also takes issue with the adjudicator’s finding that notonly had Ms. Knezacky been locked out of her office, but the removal ofher vehicle meant that she had no way to get to the office. In challengingthis assertion, Spruce Hollow points out that Ms. Knezacky could haveasked for rides from friends or taken public transport. While this may betrue, it really misses the adjudicator’s point, which was that after beinglocked out of her workplace, Ms. Knezacky’s usual mode of transporta-tion was then taken away from her, thereby compounding the injury thatshe had suffered.

108 Spruce Hollow asserts that even if an award of aggravated damageswas reasonable in the circumstances of this case, an award of $50,000.00was grossly excessive, particularly in light of the fact that Ms. Knezackydid not produce “extensive medical evidence” supporting her claim foraggravated damages. According to Spruce Hollow, the adjudicator con-flated the concepts underlying awards of punitive and aggravated dam-ages, and that the award of aggravated damages was itself punitive. Fi-nally, Spruce Hollow submits that the adjudicator erred, as he did notattempt to segregate out the mental distress that Ms. Knezacky felt as aresult of the loss of her employment from that she was suffering as aresult of the breakdown of what had, for many years, been an unhappymarriage.

109 The law does not, however, require medical evidence, extensive orotherwise, as a precondition to an award of aggravated damages. Ms.Knezacky was only required to provide evidence that Spruce Hollow’sconduct resulted in an injury to her reputation, dignity and integrity, orcaused her mental distress. The evidence before the adjudicator over-whelming supported such a finding.

110 Spruce Hollow’s argument that the adjudicator was required to disen-tangle the harm caused by the break-up of her marriage from that causedby the dismissal also mistakes the degree to which the award for her in-


jury must be particularized. The awarding of aggravated damages iscompensation for a non-pecuniary injury, and therefore resists precisequantification. As a result, the compensation is made as a global awardconsidering the relevant evidence. This was exactly how the adjudicatorapproached the issue in this case.

111 Spruce Hollow’s argument also ignores the evidence regarding theextent to which the company allowed Mr. Madill to infect the employ-ment relationship with his animus toward Ms. Knezacky stemming fromthe breakdown of their marriage. It is disingenuous for Spruce Hollow tonow suggest that the adjudicator’s decision should be set aside for failingto distinguish between the injury resulting from the termination and theinjury resulting from the separation.

112 The adjudicator was also careful to separate his award of punitivedamages from that of aggravated damages, reducing the award of puni-tive damages to take into account the fact that substantial aggravateddamages had already been awarded. The circumstances relied upon bythe adjudicator to support his award of aggravated damages would,moreover, cause extreme distress and embarrassment to anyone, andwould be all the more difficult to bear by someone already going throughthe upset of an acrimonious marital breakdown.

113 The adjudicator identified the facts on which he relied in finding thatan award of aggravated damages was appropriate in this case, and hisfindings were amply supported by the evidence. Moreover, while the ad-judicator accepted that the circumstances surrounding the termination ofMs. Knezacky’s employment were intertwined with the breakdown ofthe marriage, it is nonetheless clear from paragraphs 43 to 46 and 51 ofthe adjudicator’s reasons that the circumstances relied upon by the adju-dicator to support his award of aggravated damages all related directly tothe loss of Ms. Knezacky’s employment with Spruce Hollow. No basishas thus been established for interfering with the adjudicator’s award ofaggravated damages.

C. The Award of Punitive Damages114 As noted earlier, the adjudicator also awarded Ms. Knezacky the sum

of $25,000 in punitive damages. In making this award, the adjudicatorfound that Spruce Hollow’s conduct in this matter warranted such pun-ishment based on the harassment Ms. Knezacky suffered from Mr. Ma-dill, and the contrived reasons that the company provided for her dismis-sal. The adjudicator found this behaviour to be both malicious and


oppressive, and it offended the adjudicator’s sense of decent humanbehaviour.

115 The adjudicator noted, however, that the case law directed him to bemindful that an award of punitive damages should not be “inordinatelylarge” when added to an award of compensatory damages, and that anaward of punitive damages should not be more than is rationally requiredin the circumstances to punish the defendant, citing the Supreme Court’sdecision in Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R.595 (S.C.C.).

116 As a result, the adjudicator — despite his “abject disapproval” forSpruce Hollow’s conduct both during these proceedings and in terminat-ing Ms. Knezacky — restricted his award of punitive damages to$25,000.00.

117 The Supreme Court observed in Hill v. Church of Scientology of To-ronto, [1995] 2 S.C.R. 1130, 126 D.L.R. (4th) 129 (S.C.C.), that anaward of punitive damages is appropriate where a defendant’s behaviour“is so malicious, oppressive and high-handed that it offends the court’ssense of decency”. The Court went on to observe that punitive damagesare not intended to be compensatory, but are intended to punish the de-fendant. Punitive damages are “the means by which the jury or judgeexpresses its outrage at the egregious conduct of the defendant. They arein the nature of a fine which is meant to act as a deterrent to the defen-dant and to others from acting in this manner”: Hill, above at para. 196.

118 The Court went on to note that punitive damages “should only beawarded in those circumstances where the combined award of generaland aggravated damages would be insufficient to achieve the goal ofpunishment and deterrence”: Hill, above at para. 196.

119 The test for awarding punitive damages in the employment context isthree-pronged. First, as noted earlier, the employee must show that thedefendant’s conduct is reprehensible, meaning that it is malicious, op-pressive and high-handed: Whiten, above at para. 36; Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419 at para. 79, 120 O.R. (3d) 481(Ont. C.A.).

120 Second, it must be shown that an award of punitive damages awardon top of a compensatory award, “is rationally required to punish thedefendant and to meet the objectives of retribution, deterrence and de-nunciation”: Boucher, above at para. 79.


121 Finally, where, as here, the claim arises the employment context, theemployee must show that the employer committed an independent ac-tionable wrong. The employee is not required to show that the employercommitted a free-standing tort or that they have an independent cause ofaction, but rather that the employer breached a distinct contractual provi-sion or other duty, including either a fiduciary obligation or the duty ofgood faith and fair dealing in termination: Whiten, above at paras. 79-82;Boucher, above at para. 80.

122 Awards of punitive damages must be governed by the principle ofproportionality, which encompass the following factors:

1. The blameworthiness of the defendant’s conduct;

2. The vulnerability of the plaintiff;

3. The harm or potential harm of the conduct to the plaintiff;

4. The need for deterrence;

5. The amount of any other damage awards; and

6. The amount of any resulting unjust enrichment: Whiten, above pa-ras. 112-126.

123 In this case, the adjudicator identified the correct legal principles re-lating to awards of punitive damages, specifically considering the gui-dance provide by Whiten, Hill, and Boucher. He reviewed the evidenceand concluded that Spruce Hollow’s conduct was malicious, harsh andvindictive. He found that Spruce Hollow had violated its duty of goodfaith and fair dealing during the course of Ms. Knezacky’s termination,and that this conduct supported an award of punitive damages.

124 Spruce Hollow argues that the adjudicator failed to identify the “inde-pendent actionable wrong” committed by the company. While it is truethat the adjudicator never used the phrase “independent actionablewrong” in his reasons, it is clear from a review of the decision as a wholethat he found that Spruce Hollow acted in an untruthful, defamatory andmisleading manner during the course of Ms. Knezacky’s termination andafterwards, and that it breached its duty of good faith and fair dealing.This satisfies the requirement for establishing an independent actionablewrong, and demonstrates that the adjudicator’s award of punitive dam-ages was “the product of reason and rationality”: Elgert v. HomeHardware Stores Ltd., 2011 ABCA 112 (Alta. C.A.), citing Whitenabove at para 36.

125 Insofar as the quantum of the award is concerned, Spruce Hollow al-leges that the adjudicator’s award was excessive, and that he failed to


have regard for the fact that Spruce Hollow was a small company. Insupport of this contention, Spruce Hollow suggests that the adjudicator’sreliance on the Honda and Boucher cases was misplaced, as the employ-ers in those cases were huge companies.

126 In particular, Spruce Hollow argues that the adjudicator erred in rely-ing upon the decision of the Ontario Court of Appeal in Keays v. HondaCanada Inc. (2006), 82 O.R. (3d) 161, 274 D.L.R. (4th) 107 (Ont. C.A.),as support for a large award of punitive damages, without regard for thefact that fact that the Ontario Court of Appeal’s decision was overturnedby the Supreme Court of Canada.

127 There are two problems with this submission: the first is that the adju-dicator referred to the amounts awarded in Boucher and Honda in thecontext of his analysis of the issue of aggravated damages and not puni-tive damages. The second is that I do not read the adjudicator’s reasonsas suggesting that the cases established a benchmark in relation to themeasure of punitive damages to be awarded in a given case.

128 The adjudicator was clearly aware of the size of Spruce Hollow, andhe considered the amount of punitive damages that was rationally re-quired to punish the company’s egregious behaviour given his otherdamage awards, arriving at the figure of $25,000.00. Spruce Hollow hadnot established that the award was excessive in all of the circumstances.

IX. Conclusion129 For these reasons, Spruce Hollow’s application for judicial review is

dismissed.130 Ms. Knezacky was self-represented before me and has provided a list

of the expenses that she has incurred, both in defending this applicationon its merits, and in relation to a motion brought by Spruce Hollow tostay execution of the adjudicator’s remedial decision. Justice Hughes or-dered that the costs of that motion be in the cause.

131 I have reviewed Ms. Knezacky’s list of expenses, and have concludedthat they are reasonable, including her claim for compensation for thetime that she had to take off work. Costs will therefore be awarded toMs. Knezacky fixed in the amount of $6,674.38, inclusive of GST.

132 In the event that the monies awarded to Ms. Knezacky by the adjudi-cator are not paid to her within 30 days of this order (including accruedinterest), then the monies that have been paid into Court by SpruceHollow pursuant to the order of Justice Hughes are to be released to Ms.


Knezacky, and she will be at liberty to satisfy the remainder of the judg-ment out of the bond that has been posted by Spruce Hollow as securityin this matter.

Judgment

THIS COURT’S JUDGMENT is that:

1. The application for judicial review is dismissed, with costs to Ms.Knezacky fixed in the amount of $6,674.38, inclusive of GST;

2. In the event that the monies awarded to Ms. Knezacky by the ad-judicator are not paid to her within 30 days of this order (includingaccrued interest), then the monies that have been paid into Courtby Spruce Hollow pursuant to the order of Justice Hughes are tobe released to Ms. Knezacky, and she will be at liberty to satisfythe remainder of the judgment out of the bond that has beenposted by Spruce Hollow as security in this matter.


Taman v. Canada (Attorney General) 305

[Indexed as: Taman v. Canada (Attorney General)]

Emilie Taman, Applicant and Attorney General of Canada,Respondent

Federal Court

Docket: T-60-15

2015 FC 1155

Catherine M. Kane J.



Constitutional law –––– Charter of Rights and Freedoms — Miscellane-ous –––– Federal prosecutor wished to run for nomination for political party infederal election, and to run in election if nominated — Prosecutor’s request forleave of absence without pay before and during election period was dismissedpursuant to s. 114 of Public Service Employees Act — Prosecutor brought appli-cation for judicial review — Application dismissed — Rights of prosecutor tofreedom of expression and association under ss. 2(b) and 2(d) under CanadianCharter of Rights and Freedoms, and right to seek membership in legislativeassembly under s. 3 of Charter had been limited, but were saved as response wasproportionate balancing — Applicant could not exercise relevant rights andmaintain position as federal prosecutor and public servant — Determination wasnot prohibition affecting all public prosecutors, as decision was made based onconsideration of prosecutor’s specific request and duties — Commission under-stood factual context and findings were supported by evidence — Althoughprosecutor did not have absolute discretion, she had authority to exercise signifi-cant discretion relative to other public service workers — Although commissiondid not use language of Charter, it examined all relevant facts and objectives ofAct.

Labour and employment law –––– Public service employees — Appeal andjudicial review — Miscellaneous –––– Federal prosecutor wished to run fornomination for political party in federal election, and to run in election if nomi-nated — Prosecutor’s request for leave of absence without pay before and dur-ing election period was dismissed pursuant to s. 114 of Public Service Employ-ees Act — Prosecutor brought application for judicial review — Applicationdismissed — Rights of prosecutor to freedom of expression and associationunder ss. 2(b) and 2(d) under Canadian Charter of Rights and Freedoms, andright to seek membership in legislative assembly under s. 3 of Charter had beenlimited, but were saved as response was proportionate balancing — Applicantcould not exercise relevant rights and maintain position as federal prosecutor


and public servant — Determination was not prohibition affecting all publicprosecutors, as decision was made based on consideration of prosecutor’s spe-cific request and duties — Commission understood factual context and findingswere supported by evidence — Although prosecutor did not have absolute dis-cretion, she had authority to exercise significant discretion relative to other pub-lic service workers — Although commission did not use language of Charter, itexamined all relevant facts and objectives of Act.

Cases considered by Catherine M. Kane J.:

Canadian Broadcasting Corp. v. Warden of Bowden Institution (2015), 2015 FC173, 2015 CarswellNat 254, 2015 CF 173, [2015] F.C.J. No. 155, 2015 Car-swellNat 404, 328 C.R.R. (2d) 361 (F.C.) — considered

Canadian Federation of Students v. Greater Vancouver Transportation Author-ity (2009), 2009 SCC 31, 2009 CarswellBC 1767, 2009 CarswellBC 1768,93 B.C.L.R. (4th) 1, [2009] 8 W.W.R. 385, 389 N.R. 98, 309 D.L.R. (4th)277, 272 B.C.A.C. 29, 459 W.A.C. 29, [2009] S.C.J. No. 31, (sub nom.Greater Vancouver Transportation Authority v. Canadian Federation ofStudents - British Columbia Component) 192 C.R.R. (2d) 336, EYB 2009-161351, (sub nom. Greater Vancouver Transportation Authority v.Canadian Federation of Students - British Columbia Component) [2009] 2S.C.R. 295 (S.C.C.) — considered

Committee for Justice & Liberty v. Canada (National Energy Board) (1976),[1978] 1 S.C.R. 369, 68 D.L.R. (3d) 716, 9 N.R. 115, 1976 CarswellNat 434,1976 CarswellNat 434F, [1976] S.C.J. No. 118, [1976] A.C.S. No. 118(S.C.C.) — followed

Dore c. Quebec (Tribunal des professions) (2012), 2012 SCC 12, 2012 Car-swellQue 2048, 2012 CarswellQue 2049, (sub nom. Dore v. Barreau duQuebec) 343 D.L.R. (4th) 193, 34 Admin. L.R. (5th) 1, (sub nom. Dore v.Barreau du Quebec) 428 N.R. 146, [2012] S.C.J. No. 12, [2012] A.C.S. No.12, [2012] 1 S.C.R. 395, (sub nom. Dore v. Barreau du Quebec) 255 C.R.R.(2d) 289 (S.C.C.) — followed

Figueroa v. Canada (Attorney General) (2003), 2003 SCC 37, 2003 Carswell-Ont 2462, 2003 CarswellOnt 2463, 227 D.L.R. (4th) 1, 306 N.R. 70, [2003]S.C.J. No. 37, 176 O.A.C. 89, 108 C.R.R. (2d) 66, [2003] 1 S.C.R. 912,REJB 2003-43871, 67 O.R. (3d) 440, 67 O.R. (3d) 440 (note), 2003 CSC 37(S.C.C.) — considered

Fraser v. Canada (Treasury Board, Department of National Revenue) (1985),[1985] 2 S.C.R. 455, 23 D.L.R. (4th) 122, 63 N.R. 161, 18 Admin. L.R. 72,9 C.C.E.L. 233, 86 C.L.L.C. 14,003, 19 C.R.R. 152, [1986] D.L.Q. 84(note), 1985 CarswellNat 669, 1985 CarswellNat 145, [1985] S.C.J. No. 71(S.C.C.) — referred to

Harquail v. Canada (Public Service Commission) (2004), 2004 FC 1549, 2004CarswellNat 4056, 37 C.C.E.L. (3d) 79, 20 Admin. L.R. (4th) 266, 264

Taman v. Canada (Attorney General) 307

F.T.R. 181, [2004] F.C.J. No. 1896, 2004 CF 1549, 2004 CarswellNat 7503(F.C.) — followed

Haydon v. Canada (Treasury Board) (2005), 2005 FCA 249, 2005 CarswellNat1845, 337 N.R. 201, 2005 CAF 249, 2005 CarswellNat 4049, (sub nom.Haydon v. R.) 2006 C.L.L.C. 220-020, [2006] 2 F.C.R. 3, [2005] F.C.J. No.1146 (F.C.A.) — referred to

Krieger v. Law Society (Alberta) (2002), 2002 SCC 65, 2002 CarswellAlta1133, 2002 CarswellAlta 1134, 4 C.R. (6th) 255, 217 D.L.R. (4th) 513, 168C.C.C. (3d) 97, 43 Admin. L.R. (3d) 167, [2003] 1 W.W.R. 193, 293 N.R.201, 7 Alta. L.R. (4th) 1, [2002] S.C.J. No. 45, [2002] 3 S.C.R. 372, REJB2002-34458 (S.C.C.) — considered

Loyola High School v. Quebec (Attorney General) (2015), 2015 SCC 12, 2015CSC 12, 2015 CarswellQue 1533, 2015 CarswellQue 1534, 79 Admin. L.R.(5th) 177, 382 D.L.R. (4th) 195, 468 N.R. 323, [2015] S.C.J. No. 12, [2015]1 S.C.R. 613 (S.C.C.) — followed

Mounted Police Assn. of Ontario / Assoc. de la Police Montee de l’Ontario v.Canada (Attorney General) (2015), 2015 SCC 1, 2015 CSC 1, 2015 Cars-wellOnt 210, 2015 CarswellOnt 211, 380 D.L.R. (4th) 1, 249 L.A.C. (4th) 1,2015 C.L.L.C. 220-010, 466 N.R. 199, 328 O.A.C. 1, (sub nom. MountedPolice Association of Ontario v. Canada (Attorney General)) [2015] 1S.C.R. 3, [2015] S.C.J. No. 1, 325 C.R.R. (2d) 300 (S.C.C.) — referred to

Osborne v. Canada (Treasury Board) (1991), 37 C.C.E.L. 135, 91 C.L.L.C.14,026, 125 N.R. 241, 41 F.T.R. 239 (note), 82 D.L.R. (4th) 321, 4 C.R.R.(2d) 30, [1991] 2 S.C.R. 69, 1991 CarswellNat 348, 1991 CarswellNat 830,[1991] S.C.J. No. 45, EYB 1991-67265 (S.C.C.) — referred to

Pinet v. St. Thomas Psychiatric Hospital (2004), 2004 SCC 21, 2004 Carswell-Ont 1134, 2004 CarswellOnt 1135, [2003] S.C.J. No. 66, 182 C.C.C. (3d)214, 237 D.L.R. (4th) 23, 317 N.R. 365, 19 C.R. (6th) 21, 185 O.A.C. 8,[2004] 1 S.C.R. 528, REJB 2004-55587 (S.C.C.) — considered

Threader v. Canada (Treasury Board) (1986), 68 N.R. 143, [1987] 1 F.C. 41,1986 CarswellNat 72, 1986 CarswellNat 72F, [1986] F.C.J. No. 411 (Fed.C.A.) — followed


Canada Elections Act, S.C. 2000, c. 9Generally — referred to

Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982,being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11

Generally — referred tos. 2(b) — considereds. 2(d) — considereds. 3 — considered

Criminal Code, R.S.C. 1985, c. C-46Generally — referred to


Fisheries Act, R.S.C. 1985, c. F-14Generally — referred to

Immigration and Refugee Protection Act, S.C. 2001, c. 27Generally — referred to

Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.)Generally — referred to

Lobbying Act, R.S.C. 1985, c. 44 (4th Supp.)Generally — referred to

Parliament of Canada Act, R.S.C. 1985, c. P-1Generally — referred to

Public Service Employment Act, R.S.C. 1970, c. P-32s. 32 — considered

Public Service Employment Act, S.C. 2003, c. 22, ss. 12, 13Generally — referred toPreamble — referred toPt. 7 — referred tos. 11 — referred tos. 112 — considereds. 113 — considereds. 114 — considereds. 114(1) — considereds. 114(2) — considereds. 114(3) — considereds. 114(4) — considereds. 114(5) — considereds. 114(6) — considereds. 116 — referred tos. 117 — referred to

Regulations considered:

Public Service Employment Act, S.C. 2003, c. 22, ss. 12, 13Political Activities Regulations, SOR/2005-373

Generally — referred to

APPLICATION by prosecutor for judicial review of application regarding leaveof absence to run for public office.

Mr. Christopher C. Rootham, Mr. Andrew Reinholdt, for ApplicantMr. Michael Roach, Mr. Adrian Bieniasiewicz, for Respondent

Taman v. Canada (Attorney General) Catherine M. Kane J. 309

Catherine M. Kane J.:

Overview1 In a decision dated December 16, 2014, the Public Service Commis-

sion [Commission] denied the request of the applicant, Emilie Taman,for permission and a leave of absence without pay to seek nominationand be a candidate in the next federal election pursuant to subsections114(4) and (5) of the Public Service Employment Act, SC 2003, c 22, ss12, 13 [PSEA].

2 The applicant submits that the Commission’s decision infringes herrights pursuant to paragraphs 2(b), 2(d) and section 3 of the Charter, anddoes not reflect a proportionate balancing of her Charter rights and thestatutory objectives of the PSEA, and is, therefore, unreasonable.

3 Upon consideration of the comprehensive submissions of the appli-cant and respondent, the legislation, the reasons for the Commission’sdecision, the record, and the jurisprudence, I find that, although the deci-sion of the Commission limits the applicant’s Charter rights, it does re-flect a proportionate balancing of the Charter rights at stake, to engage inpolitical activity and run for office, with the principle of political imparti-ality in the public service.

4 The applicant followed the required procedure in her request for per-mission to seek the candidacy and pursue election and to obtain a leavewithout pay, with a view to returning to her position if she were unsuc-cessful in her candidacy or election. She provided comprehensive sub-missions to the Commission which noted her Charter rights, addressedall the relevant facts, described all aspects of her work, candidly high-lighting those which could give rise to a perception of partiality, and sug-gested options to provide some “middle ground” to guard against suchperceptions.

5 The Director of Public Prosecution’s [DPP] submissions to the Com-mission highlighted the need to ensure that the Office of the DPP[ODPP] discharged its prosecutorial duties in a politically impartial man-ner and to ensure that there would be no perception of political partialityon the part of federal prosecutors. The DPP’s submissions focussed onthe independence and integrity of the ODPP, of which the applicant ispart, and not on the applicant’s integrity, which has never been ques-tioned. The concern of the Commission, based on this input, is primarilyabout perception, which is as important as actual impartiality in the pre-sent context.


6 The Commission considered the competing rights and interests atplay as required pursuant to the PSEA. The decision reflects that theCommission considered all the facts and, based on its overall view, de-termined that the applicant’s rights could not be fully protected while atthe same time maintaining the objective of political impartiality in thepublic service. Measures to mitigate the impact of the limitation of theapplicant’s rights were considered, but were reasonably found to not befeasible to satisfy the Commission that the applicant’s ability to performher duties in a politically impartial manner would not be impaired or per-ceived to be impaired if she were to return to her duties.

7 Although the decision has a significant impact on the applicant fromher own perspective — because the trade-off for her is between main-taining her employment or pursuing her candidacy and election — thedetermination whether the decision reflects a proportionate balancing isguided by the jurisprudence which calls for the consideration of the stat-utory and factual context, and highlights that the goal is to protect Char-ter rights as fully as possible.

8 The reality is that it is not always possible to strike a perfect balanceeither between competing Charter rights or between Charter rights andother rights and interests. Some rights may be required to give way toothers in a manner which will be considered disproportionate by oneparty or the other. The notion of protecting Charter rights as fully aspossible recognizes that rights are not absolute and full protection is notalways possible.

9 For the more detailed reasons that follow, the application isdismissed.

Background10 Ms Taman, a prosecutor in the Regulatory and Economic Prosecu-

tions and Management Branch of the Public Prosecution Service of Can-ada [PPSC] submitted a request in November 2014 to the Commissionpursuant to section 114 of the PSEA. Ms Taman requested permission toseek nomination as and, if nominated, be a candidate in the federal elec-tion to be held on October 19, 2015. She also requested a leave of ab-sence without pay before and during the election period. The Commis-sion denied her request on December 16, 2014.

11 Ms Taman described her role and duties in her request, submitted inaccordance with the applicable form and procedure, and in her submis-sions to the Commission which attached her work description. In her af-


fidavit, she described that she is responsible for assessing investigativefiles to provide pre-charge legal advice or an opinion pre-charge regard-ing potential prosecutions; prosecuting files once the decision to prose-cute has been made; appearing in court to prosecute; applying to a judgefor various sentencing matters; negotiating with opposing counsel; andsupporting other prosecutors on complex and lengthy cases or projects.In her affidavit, she noted that her team at the PPSC was responsible forregulatory offences other than drug offences and that she had carriage of,or worked on, prosecutions under the Immigration and Refugee Protec-tion Act, SC 2001, c 27; the Fisheries Act, RSC 1985, c F-14; the IncomeTax Act, RSC 1985, c 1 (5th Supp); and the Lobbying Act, RSC 1985, c44 (4th Supp).

12 In her submissions to the Commission, in response to specific ques-tions in the request form, Ms Taman acknowledged that there could be apublic perception that she would be unable to perform her duties impar-tially in the period leading up to the nomination and before and duringthe election period, but noted that her intention was to be on leave with-out pay during this period and not working and, if she returned to work,in the event that she did not receive the nomination or were not elected,the public would understand that there is a distinction between a lawyer’spersonal views and the positions they take in Court.

13 The request for permission to the Commission, in the required form,included the views of the applicant’s immediate supervisor [TeamLeader] and senior management. The Team Leader indicated that he wasnot satisfied that the applicant’s ability to perform her duties in a politi-cally impartial manner would not be impaired or be perceived to be im-paired during the election. He noted that her position may need to befilled in her absence. However, he indicated that if the applicant returnedto work after not receiving the nomination or not being elected, he wassatisfied that her ability to perform her duties in a politically impartialmanner would not be impaired or be perceived to be impaired becausethe legal community and public understand that the advocate’s job is toapply the law to a set of facts, not to make law. In other words, the TeamLeader had concerns about the impairment or perceived impairment ofthe applicant’s ability to perform her duties up to the election, but did nothave these concerns if she were to return to work if not elected.

14 The DPP expressed the opinion that seeking nomination or candidacybefore or during an election period indicates a significant allegiance to apolitical party and its platform, which would undermine the indepen-


dence of the prosecutorial function and could lead to the public percep-tion that the applicant’s political allegiance influences her judgment as aprosecutor. The DPP also indicated that the applicant may be called towork on files of a political character, including offences under the Lob-bying Act, the Canada Elections Act, SC 2000, c 9 and the Parliament ofCanada Act, RSC 1985, c P-1.

15 The DPP indicated that he was not satisfied that if the applicant re-turned to her position if unsuccessful in seeking the nomination or elec-tion, that her ability to perform her duties in a politically impartial man-ner would not be impaired or be perceived to be impaired. The DPPindicated that this raises the risk that the decisions made by the applicantcould be perceived by investigators and the public as influenced by polit-ical considerations. In other words, the DPP had concerns about the im-pairment or perceived impairment of the applicant’s ability to performher duties both before the election period and upon her return to work,after having been a candidate in a federal election.

16 The DPP also indicated that he could not accommodate the appli-cant’s return to another, non-prosecutorial, position because the core ac-tivities of the ODPP are the prosecution of federal offences and the pro-vision of advice to investigative agencies, both of which require politicalimpartiality or the perception of political impartiality. The DPP addedthat it would be necessary to fill the applicant’s position in her absence.

17 The DPP provided additional comments to elaborate on the answersto specific questions in the request form indicating that partisan politicalactivities by prosecutors undermine the prosecutorial function; that inde-pendence is central to the prosecutorial decision-making process; thatprosecutorial decision-making process is quasi-judicial; that prosecutorsexercise their quasi-judicial duties in the public interest and must be freefrom partisan political influence; and, that his view is that federal prose-cutors should abstain from any political activity. The DPP also noted apast incident where the ODPP was called upon to address a complaintrelated to an individual who had engaged in political activities prior tobecoming a federal prosecutor.

18 Ms Taman provided additional submissions to the Commission in re-sponse to senior management’s comments, noting that: the DPP’s posi-tion does not acknowledge her rights under the Charter; prosecutorialindependence is institutional and her discretion is highly circumscribed;prosecutors ought not to be held to the same standard as judges when itcomes to personal partisan activities; the views of the DPP are not shared


by other jurisdictions where prosecutors have been candidates in elec-tions and returned to their positions; former political candidates are notbarred from joining the PPSC as prosecutors; the PPSC has not commu-nicated its view that prosecutors should abstain from all political involve-ment; the mere possibility of complaints is not a basis to refuse a request;an individual prosecutor can be insulated from relatively rare politicallysensitive prosecutions; and, remote hypotheticals should not be given un-due weight. The applicant added that reasonable accommodations shouldbe considered to overcome the barriers to women’s representation inpolitics and suggested that there are ways to grant her request withoutundue burden on the PPSC, including by maintaining “firewalls” and as-signing politically sensitive files to others.

The Decision19 The Commission cited the relevant statutory provisions. Pursuant to

subsections 114(1) and (2) of the PSEA, an employee may seek nomina-tion as a candidate before or during the election period or be a candidatebefore the election period only if he or she has requested and obtainedpermission from the Commission. Pursuant to subsection 114(3), an em-ployee may only be a candidate during the election period if he or shehas obtained leave without pay from the Commission. Finally, pursuantto subsections 114(4) and (5), the Commission may only grant permis-sion or leave without pay if it is satisfied that the employee’s ability toperform his or her duties in a politically impartial manner will not beimpaired or perceived to be impaired.

20 The relevant statutory provisions are set out in Annex A.21 The Commission noted that the applicant had sought permission in

accordance with subsections 114(1), (2) and (3) of the PSEA and it hadconsidered the information she provided as well as the information pro-vided by her Team Leader and senior management at the ODPP.

22 The Commission noted its concerns that the applicant’s ability to per-form her duties as a federal prosecutor in a politically impartial mannermay be impaired or perceived to be impaired in light of the nature of herduties and the increased publicity, visibility and recognition that wouldbe associated with seeking nomination and being a candidate in a federalelection.

23 The Commission found that as a federal prosecutor in the Regulatoryand Economic Prosecutions and Management Branch, the applicant has ahigh level of autonomy and decision-making power, noting that she:


prosecutes federal regulatory offences; provides legal advice to the RoyalCanadian Mounted Police [RCMP] and other federal organizations re-garding federal prosecutions; may apply for seizure or forfeiture of pro-perty; is involved in plea and sentencing discussions; is involved in “de-termining issue resolution” on some files; is highly visible when sheappears in Court; and, may be required to deal with the media.

24 The Commission noted the views of the DPP that the applicant’s can-didacy publicly indicates a significant allegiance to a political party andits platform and that this would undermine the independence andprosecutorial function of the ODPP. The Commission found that this, inturn, could lead to a perception that the applicant is not able to performher duties in a politically impartial manner.

25 The Commission found that the risk to political impartiality could notbe mitigated by a leave without pay or by the applicant assuming a non-prosecutorial role if she returned to work. The Commission noted that theODPP had indicated that it could not accommodate these measures be-cause it is a small organization, its core activities are the prosecution ofoffences and the provision of advice to investigatory agencies, and thatfew counsel positions do not exercise discretionary powers.

26 The Commission concluded that it was not satisfied that being a can-didate during the election period would not impair or be perceived asimpairing the applicant’s ability to perform her duties in a politically im-partial manner. The Commission denied both the permission and leavewithout pay, which is a condition precedent to a public servant seekingelection.

The Applicant’s Overall Position27 The applicant argues that the decision of the Commission is unrea-

sonable because it disproportionately limits her Charter rights, specifi-cally paragraphs 2(b), 2(d) and section 3 of the Charter.

28 The applicant does not challenge the constitutionality of the provi-sions of the PSEA, but rather argues that the decision of the Commissiondoes not reflect a proportionate balancing of her Charter rights. The ap-plicant argues that the Commission did not exercise its discretion in ac-cordance with the principles established by the Supreme Court of Canadain Dore c. Quebec (Tribunal des professions), 2012 SCC 12, [2012] 1S.C.R. 395 (S.C.C.) [Dore] governing the review of administrative deci-sions which engage and limit Charter rights and values. The applicantsubmits that the effect of the decision is to prohibit all federal prosecu-


tors from seeking candidacy and election and this blanket prohibition,combined with the Commission’s failure to mitigate the impact of thelimitation on her Charter rights, is not proportionate.

29 The applicant seeks an order to set aside the decision of the Commis-sion and to order that she is entitled to seek nomination as a candidate inthe next federal election and is entitled to a leave of absence without payduring the election period.

The Respondent’s Overall Position30 The respondent submits that the Commission applied the appropriate

framework and its determination that there may be a perception of im-pairment of political partiality is justified by the facts. The respondentacknowledges that the applicant’s rights pursuant to paragraph 2(b) andsection 3 of the Charter are affected by the decision, but disagrees thatparagraph 2(d) is engaged. The respondent submits that the PSEA re-flects the need to balance Charter rights and values with the competingobjectives of the PSEA. The Commission has the discretion to permit ordeny a public servant from seeking candidacy and election in a federalelection in accordance with the provisions of the PSEA. The Commis-sion conducted an assessment of the applicant’s request and of her spe-cific duties and its decision does not reflect a blanket prohibition on fed-eral prosecutors. The Commission exercised its discretion reasonably andproportionately.

The Standard of Review of Administrative Decisions that AffectCharter Rights

31 The parties agree that the standard of review to be applied to discre-tionary decisions which implicate Charter rights is reasonableness and,in this context, the approach has been established by the Supreme Courtof Canada in Dore and more recently reiterated and applied in LoyolaHigh School v. Quebec (Attorney General), 2015 SCC 12, 382 D.L.R.(4th) 195 (S.C.C.) [Loyola].

32 In Dore, the Supreme Court established that reviewing courts shouldapply the reasonableness standard to administrative decisions challengedon Charter grounds, but, in doing so, the reviewing court must assesswhether the decision reflects a proportionate balancing of the Charterprotections at stake and the relevant statutory mandate.

33 The parties agree that a decision which reflects a proportionate bal-ancing of Charter rights and values is a reasonable decision. However,


the parties differ on whether the Commission’s decision reflects such aproportionate balancing in accordance with the framework set out inDore.

34 In Dore, the Supreme Court of Canada described the balancing re-quired by the decision maker and the role of the Court on judicial reviewas follows:

[55] How then does an administrative decision-maker apply Chartervalues in the exercise of statutory discretion? He or she balances theCharter values with the statutory objectives. In effecting this balanc-ing, the decision-maker should first consider the statutory objectives.In Lake, for instance, the importance of Canada’s international obli-gations, its relationships with foreign governments, and the investiga-tion, prosecution and suppression of international crime justified theprima facie infringement of mobility rights under s. 6(1) (para. 27).In Pinet, the twin goals of public safety and fair treatment groundedthe assessment of whether an infringement of an individual’s libertyinterest was justified (para. 19).

[56] Then the decision-maker should ask how the Charter value atissue will best be protected in view of the statutory objectives. This isat the core of the proportionality exercise, and requires the decision-maker to balance the severity of the interference of the Charter pro-tection with the statutory objectives. This is where the role of judicialreview for reasonableness aligns with the one applied in the Oakescontext. As this Court recognized in RJR-MacDonald Inc. v. Canada(Attorney General), [1995] 3 S.C.R. 199, at para. 160, “courts mustaccord some leeway to the legislator” in the Charter balancing exer-cise, and the proportionality test will be satisfied if the measure “fallswithin a range of reasonable alternatives”. The same is true in thecontext of a review of an administrative decision for reasonableness,where decision-makers are entitled to a measure of deference so longas the decision, in the words of Dunsmuir, “falls within a range ofpossible, acceptable outcomes” (para. 47).

[57] On judicial review, the question becomes whether, in assessingthe impact of the relevant Charter protection and given the nature ofthe decision and the statutory and factual contexts, the decision re-flects a proportionate balancing of the Charter protections at play. AsLeBel J. noted in Multani, when a court is faced with reviewing anadministrative decision that implicates Charter rights, “[t]he issuebecomes one of proportionality” (para. 155), and calls for integratingthe spirit of s. 1 into judicial review. Though this judicial review isconducted within the administrative framework, there is nonethelessconceptual harmony between a reasonableness review and the Oakes


framework, since both contemplate giving a “margin of apprecia-tion”, or deference, to administrative and legislative bodies in balanc-ing Charter values against broader objectives.

35 In Loyola, the Supreme Court of Canada reiterated and applied theDore framework, noting that: “In the context of decisions that implicatethe Charter, to be defensible, a decision must accord with the fundamen-tal values protected by the Charter” (at para 37). The Court also noted theanalogy with the concept of minimal impairment of Charter rights:

[40] A Dore proportionality analysis finds analytical harmony withthe final stages of the Oakes framework used to assess the reasona-bleness of a limit on a Charter right under s. 1: minimal impairmentand balancing. Both R. v. Oakes, [1986] 1 S.C.R. 103, and Dore re-quire that Charter protections are affected as little as reasonably pos-sible in light of the state’s particular objectives: see RJR-MacDonaldInc. v. Canada (Attorney General), [1995] 3 S.C.R. 199, at para. 160.As such, Dore’s proportionality analysis is a robust one and “worksthe same justificatory muscles” as the Oakes test: Dore, at para. 5.

[41] The Dore analysis is also a highly contextual exercise. As underthe minimal impairment stage of the Oakes analysis, under Dorethere may be more than one proportionate outcome that protectsCharter values as fully as possible in light of the applicable statutoryobjectives and mandate: RJR-MacDonald, at para. 160.

36 The guidance of the Supreme Court of Canada regarding how deci-sion-makers should approach decisions implicating Charter rights andhow Courts should judicially review these decisions is summarizedbelow.

• The overall goal is to balance the Charter rights or values with thestatutory objectives and to limit the Charter protected rights orvalues as little as possible (or to protect the Charter rights andfully as possible) in light of the statutory objectives.

• To achieve this balance, the decision maker should:

• Consider the statutory objectives;

• Consider how the Charter value at issue will best be pro-tected in view of the statutory objectives; and,

• In doing so, balance the severity of the interference of theCharter protection with the statutory objectives.

• On judicial review, the question for the Court is whether the deci-sion-maker followed the approach described above; i.e., whetherthe decision reflects a proportionate balancing of the Charter pro-


tections at play, taking into consideration the impact of the rele-vant Charter protections, as well as the nature of the decision andthe statutory and factual context.

• What is a proportionate balancing?

• A proportionate balancing is one that gives effect, as fullyas possible, to the Charter protections at stake given theparticular statutory mandate.

• Looked at from the other perspective, this means that Char-ter protections should be affected as little as reasonablypossible in light of the statutory objectives; this mirrors theminimal impairment aspect of the Oakes test.

• The proportionality analysis should be “robust” andcontextual.

• There may be more than one proportionate outcome. A “margin ofappreciation” or deference is given to the decision-maker in bal-ancing Charter values against broader objectives.

• Finally, a decision that proportionately balances Charter rights orvalues against the legislative objectives “falls within a range ofpossible, acceptable outcomes” and will be found to be reasonableon judicial review.

37 Although the Court has provided these guiding principles to decision-makers and to Courts reviewing such decisions, the practical applicationof the principles is not a simple matter.

The Charter Rights Implicated

Section 338 Section 3 of the Charter provides that every citizen of Canada has the

right to vote in an election of members of the House of Commons or of alegislative assembly and to be qualified for membership therein. Theright has been described by the Supreme Court of Canada as the “right torun for office” (Figueroa v. Canada (Attorney General), 2003 SCC 37 atparas 26, 29, [2003] 1 S.C.R. 912 (S.C.C.)).

39 There is no dispute that the applicant’s right to run for office is en-gaged and should be protected to the extent possible.


Paragraph 2(b)40 Paragraph 2(b) protects, as a fundamental freedom, freedom of

thought, belief, opinion and expression, including freedom of the pressand other media of communication.

41 As noted by the applicant, the right of freedom of expression is inter-preted broadly and purposively and encompasses “[a]n activity by whichone conveys or attempts to convey meaning will prima facie be protec-tion by s. 2(b)” (Canadian Federation of Students v. Greater VancouverTransportation Authority, 2009 SCC 31 at para 27, [2009] 2 S.C.R. 295(S.C.C.)). The applicant’s ability to communicate and convey informa-tion and messages to members of the political party that she seeks torepresent as a candidate and to the public in her efforts to be elected as aMember of Parliament is clearly implicated by the decision and shouldbe protected to the extent possible.

Paragraph 2(d)42 Paragraph 2(d) protects, as a fundamental freedom, freedom of

association.43 The applicant submits that the Commission’s decision violates her

freedom of association pursuant to paragraph 2(d), because the decisionviolates her right to freely associate with a political party and seek nomi-nation to be a candidate of that party. Although she is not prevented frombeing a member of a political party, she submits that other aspects ofparagraph 2(d) are infringed. The applicant notes that freedom of associ-ation has three aspects: constitutive, derivative and purposive (MountedPolice Assn. of Ontario / Assoc. de la Police Montee de l’Ontario v.Canada (Attorney General), 2015 SCC 1 at paras 51-54, [2015] 1 S.C.R.3 (S.C.C.)). The applicant argues that the decision violates the derivativeaspects of freedom of association, the right to associational activity thatspecifically relates to other constitutional freedoms, because running foroffice is a constitutionally protected activity. The applicant adds that theimportance of political parties to the democratic process should not beoverlooked and that paragraph 2(d) contemplates more than simply asso-ciating with others, including political parties, and that a purposive ap-proach recognises that the right to associate encompasses seeking thenomination to represent a political party and seeking election.

44 The respondent disputes that paragraph 2(d) is engaged because theapplicant is not prohibited from being a member of any political party orseeking the nomination of a specific political party. Although she is pro-


hibited from seeking nomination for political office while employed bythe public service, she may still associate with others to support anothercandidate for office.

45 For the purpose of this judicial review, it is not necessary to deter-mine the scope of the applicant’s paragraph 2(d) rights and how, if any,these rights have been affected. The applicant’s rights pursuant to para-graph 2(b) and section 3 are clearly affected and the applicant’s argu-ment that her right to associate is also affected is closely linked in thesecircumstances to the content of the paragraph 2(b) and section 3 rightsimplicated. The issue is whether the decision proportionately balancesthe Charter rights with the statutory objectives. The identification of theright to associate will not affect the outcome of this judicial review.

The Issue

Does the decision of the Commission reflect a proportionate balancingof the Charter rights at stake in light of the statutory objectives andis the decision, therefore, reasonable?

The Applicant’s Submissions46 The applicant argues that the Commission’s decision disproportion-

ately infringes her Charter rights in view of the nature of the decision,the statutory context and the factual context.

Nature of the Decision47 The applicant submits that the decision amounts to a ban on all fed-

eral prosecutors as candidates in a federal election. Such a blanket prohi-bition is inconsistent with Harquail v. Canada (Public Service Commis-sion), 2004 FC 1549, 264 F.T.R. 181 (F.C.) [Harquail]. Although theCourt dismissed the judicial review of a decision denying permission to afederal prosecutor for mootness and the decision predates Dore, theCourt’s comments, which criticized the Commission for not conducting acomprehensive inquiry and for considering remote possibilities, is rele-vant to the present circumstances (at para 36). In other words, a compre-hensive inquiry would support a positive decision for a federal prosecu-tor by the Commission.

48 The applicant points to the Commission’s decision, which refers to“federal prosecutor” repeatedly, in support of her argument that the deci-sion amounts to a blanket prohibition on prosecutors. The Commissionnoted that it “has concerns that Ms. Taman’s ability to perform her duties


in a politically impartial manner as Counsel, working as a federal prose-cutor, may be impaired or perceived to be impaired”; “[a]s a federalprosecutor ... Ms. Taman has a high level of autonomy and decision-making”; “[h]is [the DPP’s] concerns relate to ... the nature of Ms.Taman’s duties as a federal prosecutor”; and, “Ms Taman is highly visi-ble when she appears in Court as a federal prosecutor.”

49 The applicant also notes that the concerns raised by the Commissionregarding her visibility, autonomy and decision-making power; involve-ment in plea and sentencing discussions; application for seizure and for-feiture; and possible provision of information to the media as relevantfactors would be true of all federal prosecutors.

50 The applicant submits that the PSEA and the related Political Activi-ties Regulations, SOR/2005-373 [Regulations] are inconsistent with ablanket prohibition based on job title. The PSEA and the Regulationsrequire a fact based and contextual inquiry, including consideration ofthe nature of the election, the nature of the duties, and the level and visi-bility of the position. The applicant argues that the Commission failed to“drill down” to look at her duties and instead focussed on federal prose-cutors as a broad category.

51 The applicant also points to the Commission’s reliance on the viewsof the DPP which related to the nature of the mandate of the ODPP andthe nature of the applicant’s duties as a federal prosecutor, rather than onthe applicant’s specific duties and the types of prosecutions she conducts.The Commission accepted the DPP’s overall position that being a federalprosecutor is incompatible with being a candidate for public office, with-out consideration of other views and factors.

52 The applicant argues that the decision, which amounts to an effectiveprohibition on federal prosecutors as a category, is by nature dispropor-tionate (Loyola at para 70).

Statutory Context53 The applicant argues that the decision is inconsistent with the PSEA,

the Canada Elections Act and provincial statutes.54 Section 112 of the PSEA sets out its purpose and recognizes the right

of employees to engage in political activities while maintaining the prin-ciple of political neutrality in the public service. The applicant argues,however, that the Commission did not consider her right to engage inpolitical activities. Although the PSEA seeks to balance both interests,


the Commission’s starting point and focus was the preservation of politi-cal neutrality.

55 The applicant acknowledges the long standing principle and constitu-tional convention regarding political neutrality in the public service, butsubmits that the convention does not trump the Charter rights that shouldbe protected. The jurisprudence which addresses similar issues regardingpolitical neutrality recognizes that political neutrality and duties of loy-alty are to be balanced with other rights (Osborne v. Canada (TreasuryBoard), [1991] 2 S.C.R. 69 at p 97, 82 D.L.R. (4th) 321(S.C.C.) [Osborne]; Fraser v. Canada (Treasury Board, Department ofNational Revenue), [1985] 2 S.C.R. 455 at pp 467-470, 23 D.L.R. (4th)122 (S.C.C.) [Fraser]).

56 The applicant submits that the test established to determine conflictsof interest for public servants should also apply to decisions made pursu-ant to subsections 114(4) and (5) of the PSEA. In Threader v. Canada(Treasury Board) (1986), [1987] 1 F.C. 41 at para 23, [1986] F.C.J. No.411 (Fed. C.A.) (QL) [Threader], the Court stated the test for conflicts ofinterest as:

Would an informed person, viewing the matter realistically and prac-tically and having thought the matter through, think it more likelythan not that the public servant, whether consciously or uncon-sciously, will be influenced in the performance of his official dutiesby considerations having to do with his private interests?

57 The applicant argues that the Commission failed to consider whethera reasonable, fully-informed person would conclude that she would beinfluenced in the performance of her duties by partisan political consider-ations and, therefore, made a decision inconsistent with the statutory con-text of the PSEA. The applicant acknowledges that subsections 114(4)and (5) reflect the concept set out in Threader to some extent but addsthat there should be an objective element — the perspective of the fully-informed person — to the provision and the Commission have consid-ered the balancing through this lens.

58 The applicant provided some historical background about the eligibil-ity of public servants to seek candidacy and election. Originally, CountyCrown Attorneys and public servants were barred from sitting as mem-bers of Parliament. The introduction of the Public Service EmploymentAct, RSC 1970, c P-32, s 32 in 1968 allowed public servants below therank of deputy head to run for office with permission. In 2000, the prohi-bition in the Canada Elections Act on public servants being candidates in


a federal election was repealed, leaving the PSEA as the governingstatute.

59 The Canada Elections Act continues to bar County Crown Attorneysfrom becoming candidates, but by definition, this means the Senior orRegional Crown Attorney and does not include assistant Crown Attor-neys, such as the applicant.

60 The applicant submits that it is clear that Parliament turned its mindto whether certain groups should be prohibited from seeking candidacyand election in the Canada Elections Act. If Parliament intended to pro-hibit all federal prosecutors from being candidates, it would have alsodone so in the PSEA.

61 The applicant also points out that provincial statutes set out class orcategory based rules for political activity. Generally, in every provinceexcept New Brunswick, provincial statutes permit non-managerial prose-cutors to run for office.

62 The applicant argues that, in considering whether the Commission’sdecision reflects a proportionate balancing of her Charter rights, the ap-proaches taken in other jurisdictions are relevant considerations, particu-larly because she is in a non-managerial role and because options to min-imally impair her Charter rights should have been considered.

Factual Context63 The applicant argues that the Commission did not consider several

relevant facts in making its decision and in determining whether a fully-informed person would conclude that she would be influenced in the per-formance of her duties by political considerations.

64 The applicant highlights that she sought leave without pay in order toseek the nomination and, if successful, to seek election, and would nothave been working and performing the duties which the Commissionfound to be visible, autonomous and of a decision-making nature in thisperiod. There would be no opportunity to create a perception of imparti-ality given that she would not be working.

65 The applicant submits that her discretion is carefully circumscribed.Prosecutorial independence does not mean that prosecutors act withoutsupervision or have absolute discretion; it means that the Attorney Gen-eral must act independently of partisan concerns when supervisingprosecutorial decisions (Krieger v. Law Society (Alberta), 2002 SCC 65at para 30, [2002] 3 S.C.R. 372 (S.C.C.)) [Krieger].


66 The PPSC Deskbook, which sets out the guiding principles which allfederal prosecutors, and persons acting as federal prosecutors, must fol-low, provides that prosecutors are accountable for the decisions and ac-tions they take to their managers, including the Chief Federal Prosecutor,the Deputy Director of Public Prosecutions and, ultimately, the DPP.They must make decisions in accordance with the relevant policy, direc-tives and guidelines. Prosecutors must consult with experienced col-leagues and supervisors or managers when facing difficult decisions andconsult within government on some matters.

67 The applicant points to several extracts from the Deskbook, includingChapter 2.1, Independence and Accountability in Decision-Making,which notes that the independence of the prosecutor is that of the DPP,which is delegated to prosecutors, but explains that this refers to institu-tional independence.

68 The applicant acknowledges that she would exercise a degree of dis-cretion in the courtroom as issues arise, but would still be guided by theapplicable policies and directives set out in the Deskbook.

69 The applicant also notes that in Krieger at para 29, the Supreme Courtof Canada recognized that the Attorney General, although a member ofCabinet, is fully independent when exercising his or her prosecutorialfunctions. The applicant argues that other prosecutors can be expected tobe just as independent.

70 The applicant also points out that she is in a non-managerial and rela-tively junior position. She notes that the Supreme Court held that the“level of a public servant” is relevant to whether that public servantshould be permitted to engage in a political activity (Osborne at p 97).

71 The applicant submits that her only interaction with the media wasafter the Commission’s decision. It was not realistic for the Commissionto consider the remote possibility of interaction with the media as a fac-tor suggesting a perception of partiality. In Harquail, the Court foundthat it is only reasonable for the Commission to conduct its inquiry intoan applicant’s responsibilities within some realistic context (at para 35).Moreover, if she were contacted by the media, the Deskbook guidesprosecutors to consult with management before speaking to the media.

72 The applicant adds that there is no evidence that she is “highly visi-ble” and it is not clear what this factor is intended to address. While shewould be seen in a public courtroom, this does not suggest lack of parti-ality and would not constitute “visibility” as contemplated by the PSEA.


73 The applicant notes that she has not been involved in “politically sen-sitive” prosecutions. Regulatory prosecutions are not generally politicallysensitive. In addition, this risk could be avoided by not assigning politi-cally sensitive files to her.

74 The applicant adds that there is no evidence of a reasonable apprehen-sion of political partiality or actual harm to the PPSC. Rather, the PPSCreferred to only one past instance where a defendant unsuccessfullybrought a motion to remove a prosecutor because that prosecutor was aformer political candidate. The remote possibility of a complaint is not areason to refuse her request.

75 The applicant submits that the Commission did not acknowledge theviews of her Team Leader who had a better grasp of her specific duties.The applicant agrees that Harquail can be distinguished on its facts be-cause, in that case, the Deputy Minister of Justice supported the appli-cant’s request and the Commission denied it. However, the principlefrom Harquail, that an applicant’s supervisors are in the best position toknow the scope of their responsibilities and the visibility of their posi-tion, is equally applicable. The applicant submits that the Commissionpreferred the concerns of the DPP over the views of the Team Leaderwithout explanation.

76 The applicant also submits that the Commission did not consider thePPSC Code of Conduct, which does not prohibit prosecutors from engag-ing in political activities or prohibit prosecutors from becoming candi-dates in the federal election. Nor did the Commission consider the rulesof professional responsibility governing lawyers and the principle thatlawyers are expected to separate their personal views from the positionsthey take on behalf of a client. The applicant submits that her role as aprosecutor does not constitute an endorsement of government policy, norwould her endorsement or criticism of government policy impede herability to advocate for the Attorney General.

77 The applicant points out that there is no prohibition on a former polit-ical candidate obtaining employment as a federal prosecutor.

78 The applicant submits that the Commission focused on the discretionshe exercises but did not consider that other officials exercise similar dis-cretion yet are not barred from running for elected office. The applicantpoints out that RCMP members and other police officers are permitted torun for public office and submits that they exercise similar or greaterdiscretion than prosecutors.


The Respondent’s Submissions

Statutory Objectives79 The respondent submits that the purpose of the PSEA is to balance

the rights of employees to freedom of expression and participation in thedemocratic process with the importance of a politically impartial publicservice. This is clear from the preamble to the PSEA and in the statutoryprovisions. The balancing required is “built in” to the provisions of sec-tion 114.

80 Actual and perceived political neutrality is an essential feature of thepublic service and Canadian democracy and this principle has been rec-ognized in the jurisprudence. Although a constitutional convention doesnot enjoy the same status as a constitutional right, it still must be part ofthe balancing exercise. A public servant’s right to expression may needto be constrained to ensure impartiality (Osborne at p 97, Fraser at pp467-470, Haydon v. Canada (Treasury Board), 2005 FCA 249 at paras23, 35, [2006] 2 F.C.R. 3 (F.C.A.) [Haydon]).

81 The respondent adds that the PSEA recognizes that permission to be acandidate and to seek election can be denied, i.e., the rights can be re-strained and denied in accordance with the statutory considerations. Aslong as a proportionate balancing is done, the decision is reasonable.

Nature of the Decision82 The respondent submits that the decision was specific to the appli-

cant’s request and duties and does not amount to a blanket prohibitionagainst prosecutors running for office. Any future request involving aprosecutor would be decided by the Commission on its specific facts andcircumstances.

83 Subsection 114(6) sets out the factors to be considered, including theemployee’s duties, and the level and visibility of the employee’s posi-tion. The list of factors is not limited to these examples and will varywith the circumstances. All of the factors relating to the applicant’s du-ties were considered.

Statutory Context84 The respondent disputes that the statutory context of the Canada

Elections Act should be considered. The Commission was only requiredto make its decision based on the PSEA and the information before it.


85 The respondent also submits that the approach set out in provincialstatutes is not relevant to the determination of whether the Commission’sdecision is reasonable and proportionate. Other jurisdictions may havedifferent statutory frameworks than the PSEA, but the PSEA governs.

Factual Context86 The respondent submits that the findings made by the Commission,

which cumulatively led to its decision, are all supported by the facts.87 The PSEA requires the Commission to assess the visibility, level and

nature of an employee’s position or duties, which is what the Commis-sion did. The Commission’s finding that the applicant had a high level ofautonomy, discretion and visibility is supported by the record.

88 The respondent acknowledges that the applicant does not have abso-lute discretion in decision-making. Although the Deskbook sets out pol-icy and directives and provides guidance to all federal prosecutors and, inaccordance with the Deskbook, the applicant would consult with col-leagues and managers on specific issues, she still has a degree ofdiscretion.

89 The respondent also points to the applicant’s work description whichstates that the applicant is required to“[exercise] prosecutorial discretionbefore the courts to present a fair, complete and just prosecution” andalso that the “work requires quickly adapting and reacting to develop-ments in the courtroom and to finding solutions within short time framesat times without access to reference materials.”

90 The respondent notes that the Briefing Note provided to the Commis-sion by the Political Activities and Non-Partisanship Directorate of theCommission summarized and analyzed the information gathered withreference to the nature of the election, the nature of the applicant’s du-ties, the level and visibility of her position and reflected the input of theapplicant, her Team Leader and senior management.

91 The Briefing Note summarizes the applicant’s duties, including deci-sion-making responsibility with respect to whether to prosecute, respon-sibility for the prosecution once a decision to prosecute is made, and theprovision of legal opinions at the pre-charge stage. In addition, it refersto the Annual Report of the PPSC which indicates that the role of a pros-ecutor is quasi-judicial.

92 Similarly, the finding that the applicant has visibility is based on theCommission’s assessment of the applicant’s duties which require her to


be in a public courtroom setting, visible to the public and accessible tothe media.

93 The Commission’s finding that she may be contacted by the media isalso supported by the record. Although the applicant had not previouslybeen contacted by the media and the Deskbook sets out the policy torelay media contacts where possible, it is not a remote possibility that theapplicant would be faced with media inquiries requiring a promptresponse.

94 The respondent also notes that the applicant acknowledged, in her re-sponse to questions on the form seeking permission from the Commis-sion, that there could be a public perception that she would be unable toperform her duties in a politically impartial manner before or during theelection. In her submissions in response to those of management, she ac-knowledged that this perception could arise with respect to some files,particularly pursuant to the Lobbying Act. The respondent adds that theapplicant recently had responsibility for two prosecutions under the Lob-bying Act, which she also acknowledged.

95 The respondent submits that the applicant’s reliance on Harquail tosupport her argument that remote possibilities are not relevant considera-tions does not assist her. The Commission did not consider remote pos-sibilities. It is quite possible that the applicant would be engaged by themedia and could work on politically sensitive files.

96 In Harquail, the Court commented that had the application not beenmoot, it would have had concerns about the decision, including that theCommission did not take into account the input of the Deputy Minister.In the applicant’s case, the Commission considered the views of the ap-plicant’s Team Leader and senior management, including the DPP. TheCommission did not ignore the views of the Team Leader, but attachedmore weight to the views of the DPP. The Commission is the decision-maker, not the Team Leader or the DPP, and the Commission had a rea-sonable basis to prefer the views of senior management.

97 The respondent reiterates that the PSEA governs. Although provincialstatutes may take a different approach and the RCMP and other policemay be permitted to seek elected office, the applicant’s request is gov-erned by the PSEA.

98 The respondent submits that the Commission’s decision reflects itsconsideration of whether the applicant’s request could be accommodated.The Commission referred to leave without pay and assignment to a non-


prosecutorial role, but found, based on the input of the DPP, that due tothe size of the organization and its mandate, this was not an option.

99 The respondent notes that in Canadian Broadcasting Corp. v. Wardenof Bowden Institution, 2015 FC 173, [2015] F.C.J. No. 155 (F.C.) (QL)[Bowden], the Court applied the Dore framework and found the decisionto reflect a proportionate balancing despite the fact that the Warden hadnot specifically referred to the Charter rights to be considered, as theWarden’s consideration of the rights was evident from the substance ofthe decision (at para 52). In addition, the Warden considered and wasopen to accommodation to mitigate the impact, which demonstrated pro-portionality, although this was ultimately not feasible (at para 57).

The Decision reflects a proportionate balancing and is reasonable100 As noted in Dore, the ultimate or overall question on judicial review

is whether the decision reflects a proportionate balancing of the Charterrights at stake, limiting these rights as little as possible in light of thestatutory objectives.

101 The Court must first consider the nature of the decision and the statu-tory and factual context.

Nature of the decision102 The decision is made pursuant to the PSEA by the Commission,

which is tasked with, among other things, administering the provisions ofthe PSEA relating to political activities of employees and deputy heads(section 11).

103 As noted below with respect to the statutory context, the requestmade by the applicant was made in accordance with the PSEA, the Regu-lations and in the mandated form.

104 The request process permits the applicant to make initial submissionsand further submissions in response to those of management. The Com-mission also received a summary of the information gathered and a pre-liminary assessment in the form of a Briefing Note prepared by the Polit-ical Activities and Non-Partisanship Directorate of the Commissionbefore making its decision.

105 By its nature, the decision has a significant impact on the applicant’srights pursuant to paragraph 2(b) and section 3 of the Charter to seek thecandidacy of a political party and seek election in the October 2015 fed-eral election. Although the applicant is not prohibited from freely expres-sing herself or exercising her right to run for political office, she cannot


exercise these rights and maintain her position as a federal prosecutorand public servant.

106 The applicant characterizes the decision as a “blanket prohibition” onall federal prosecutors and argues that the Commission failed to graspthat her duties and attributes, which it found to be of concern, are thesame duties performed by all federal prosecutors. The applicant notesthat the Commission continually referred to her duties “as a federal pros-ecutor” and relied only on the views of the DPP, which would apply tofederal prosecutors as a group. The applicant also argues that this prohi-bition is inconsistent with the statutory context and legislative intent,which calls for a duties-based assessment.

107 Relying on Loyola at para 70, the applicant argues that the effect ofthe prohibition, which she refers to as an “effective prohibition”, is anindication that the decision is disproportionate.

108 I agree that in some circumstances, this may be an indication of dis-proportionality, but it is not a determinative factor. Loyola says only that,on the facts of that case, a decision which amounts to a prohibition maybe an additional or reinforcing reason to find a decision disproportionate:

[70] The disproportionate nature of this decision is reinforced by thefact that the Minister’s decision effectively prohibits Loyola fromteaching about Catholic ethics from a Catholic perspective.

[...]

109 However, in the present case, I do not agree that the decision is basedon the applicant’s job title as a federal prosecutor rather than on the du-ties that she performs in her role as a federal prosecutor and public ser-vant. If the decision were a “blanket prohibition” on all federal prosecu-tors, the Commission would not have considered her specific duties as amember of the team responsible for Regulatory and Economic Prosecu-tions, her job description, her submissions, and the submissions of herTeam Leader and senior management.

110 Contrary to the applicant’s submissions, the Commission did “drilldown” and thoroughly assessed her specific duties as she described themand as they were described in her work description.

111 As noted by the applicant, the Commission stated the applicant’s du-ties “as a federal prosecutor” several times in its decision. However, thisis a necessary and factual characterization, which provides the necessarycontext for the description of her duties and the assessment of the factorsby the Commission. Without this context, the reference to the applicant’s


specific duties, including the review of files, the provision of pre-chargeadvice and opinions and the seizure of property, would not make sense.

112 The DPP clearly expressed the view that political involvement is notappropriate for federal prosecutors. The DPP may convey the same viewwith respect to any similar request made by other federal prosecutors.This may signal to other federal prosecutors that permission to run for afederal election would not likely be granted. However, the Commission’sdecision is not a prohibition against all federal prosecutors, as the deci-sion was made based on consideration of the applicant’s specific requestand related to her specific duties. Other requests would be determined ona case-by-case basis.

Statutory Context and Objectives113 The preamble of the PSEA includes the statement that “Canada will

continue to benefit from a public service that is based on merit and non-partisanship and in which these values are independently safeguarded.”

114 Part 7 governs political activities and requests for permission to seekcandidacy and run for election.

115 Section 112 sets out the purpose of Part 7, specifically recognizingthe right of employees to engage in political activities while maintainingthe principle of political impartiality in the public service.

116 Section 114 governs the requirements for seeking permission andleave without pay to seek nomination as a candidate in a federal, provin-cial or territorial election. Both subsections 114(4) and (5) adopt thesame test for determining if permission should be granted; the Commis-sion must be satisfied that “the employee’s ability to perform his or herduties in a politically impartial manner will not be impaired or perceivedto be impaired.”

117 Subsection 114(6) directs that the Commission may take relevant fac-tors into consideration “such as the nature of the election, the nature ofthe employee’s duties and the level and visibility of the employee’s posi-tion.” This is not a closed list.

118 The balancing of the statutory objectives is built into section 112. Thetest set out in sections 113 and 114, along with the considerations to betaken into account, complements the overall goal of balancing theseobjectives. It is implicit in the scheme of the PSEA that the right to en-gage in political activity may have to give way to the objective of ensur-ing that employees are able to perform their duties in a politically impar-


tial manner and that permission to engage in political activity may bedenied.

119 As noted in Dore, the statutory objectives at issue may have morethan one goal. In Dore, in considering the standard of review, JusticeAbella referred to an earlier decision of the Supreme Court of Canada inPinet v. St. Thomas Psychiatric Hospital, 2004 SCC 21, [2004] 1 S.C.R.528 (S.C.C.) [Pinet], where the issue was whether a disposition made bythe Ontario Review Board, pursuant to the provisions of the CriminalCode, RSC 1985, c C-46 that required it to make a determination thatwas the least restrictive to the accused while considering the need to pro-tect public safety and other factors, i.e., “twin goals”, was reasonable.The Court in Pinet noted that the liberty interest was a Charter protectedright but may be limited by the need to balance public safety in determin-ing the least restrictive disposition (at paras 32, 56).

120 In the present case, the PSEA also has twin goals: it requires theCommission to recognize and balance the employee’s right to engage inpolitical activities and the objective of maintaining the principle of politi-cal impartiality in the public service. Although not specifically identifiedas a Charter right in the PSEA, clearly the right to engage in politicalactivity and the right to freedom of expression in doing so are Charterprotected rights.

121 The applicant’s submissions to the Commission highlighted her con-stitutional right to political expression and participation and the need forthe Commission to make its decision in accordance with the Charter.Although the Commission did not identify the rights at stake as Charterrights, the decision and the decision-making process reflect that theCommission considered all the submissions, the applicant’s goal of seek-ing candidacy and running for office, and the impact of a refusal, whichwould limit these rights. An additional or specific reference to the appli-cant’s Charter rights is not essential.

122 The applicant argues that the decision is inconsistent with the statu-tory context including the Canada Elections Act and provincial statutes.If I properly understand the argument, the applicant’s submission is thatthe PSEA is far more restrictive than other statutes and, in a contextualanalysis, these other statutes would highlight that the Commission’s deci-sion is not a proportionate balancing of rights.

123 The applicant also argues that the decision in effect is a prohibitionon all federal prosecutors and that such prohibitions are not contemplatedby the PSEA because Parliament would have specifically set out such a


prohibition as it had in the Canada Elections Act. I do not agree, as notedabove, that the decision is a blanket prohibition. Moreover, Parliament isnot bound to take an identical approach in all federal legislation. Al-though the Canada Elections Act may have identified only CountyCrown Attorneys as not eligible (and not assistant Crown Attorneys,such as the applicant), the Canada Elections Act does not apply nor doprovincial statutes. The decision at issue was made pursuant to thePSEA, which governs all public servants, including all federal prosecu-tors. The PSEA does not prohibit any particular group of employees, ex-cept deputy heads.

124 Reference to other statutes governing the same or similar conductmight have some relevance if the challenge were to the PSEA. However,that is not the case in the present application.

125 Section 114 demonstrates that Parliament intended public servants tobe able to seek nomination or run as candidates only when this will notimpair or be perceived as impairing their ability to perform their duties ina politically impartial manner. Parliament did not intend to explicitly setout each category of public servant that should be excluded from runningfor political office.

126 The applicant also argues that the decision is contrary to the statutorycontext of the PSEA because, in applying the test set out in subsection114(4), the Commission did not use the lens of the fully-informed per-son. The applicant argues that the Commission ignored relevant facts indetermining whether a fully-informed person would think she would beinfluenced by her political views in the performance of her duties.

127 The applicant suggests the test for political impartiality pursuant tosubsection 114(4) should be guided by the test or lens for conflicts ofinterest for public servants which the Federal Court of Appeal set out inThreader at para 23 to ask whether an informed person would think thatthe public servant would be influenced by their political views in the per-formance of their duties. The test in Threader was adapted from the testfor bias established in Committee for Justice & Liberty v. Canada(National Energy Board) (1976), [1978] 1 S.C.R. 369, 68 D.L.R. (3d)716 (S.C.C.).

128 The applicant submits that, in light of this test or lens, the Commis-sion failed to consider several relevant facts that an informed personwould understand and which would not support a finding that the appli-cant’s ability to perform her duties would be impaired or would be per-ceived to be impaired. The applicant raised, for example: that she would


be on leave while she performed overt political activities; that formerpolitical candidates are not barred from joining the public service; and,that the role of a lawyer and professional codes of conduct convey that alawyer can separate their private views from their professional duties.

129 First, the Commission did not fail to consider the facts noted by theapplicant.

130 Second, the Threader test or fully-informed person lens has not beenadapted and adopted in the jurisprudence for application by the Commis-sion to decisions pursuant to section 114.

131 Third, as the applicant acknowledged, aspects of this test are embed-ded in section 114 which requires that the Commission be satisfied that“being a candidate during the election period will not impair or be per-ceived as impairing the employee’s ability to perform his or her duties ina politically impartial manner.” Section 114 sets out examples of the fac-tors that the Commission should consider including the nature of theelection, the nature of the employee’s duties, and the level and visibilityof the employee’s position. These factors are objective. The Commissionis tasked with making the determination and the Commission is“informed”.

Factual Context132 The Commission understood the factual context and its findings are

supported by the evidence on the record. It did not ignore or misconstruethe applicant’s submissions regarding the relevant factual context.

133 The Commission did not overlook that the applicant would be onleave and not performing her duties during the election period. The deci-sion clearly conveys that the Commission understood that she would notbe working as a prosecutor while she engaged in overt political activities,given that it considered whether the risk to political impartiality could bemitigated by leave without pay. The Commission considered both partsof the applicant’s request as contemplated by the PSEA: permission toseek candidacy and a leave without pay.

134 The Commission’s finding that the applicant had a “high level of au-tonomy and decision — making” is well supported by the applicant’swork description, the Deskbook, and the submissions of the applicantand senior management.


135 Although the applicant does not have absolute discretion, she has theauthority to exercise significant discretion relative to other publicservants.

136 The applicant mischaracterizes herself as a junior prosecutor. Whileshe may be more junior than others in the hierarchy of the PPSC, andwhile other prosecutors may have greater autonomy and discretion byvirtue of their greater years of experience and supervisory roles, the ap-plicant has almost ten years of experience and has a degree of autonomyand discretion not enjoyed by other public servants. The Commissionconsidered the level of her position, along with her duties and workdescription relative to other positions in the public service. The fact thatshe is not a manager is not indicative of a “low level” position.

137 The Deskbook addresses many issues a federal prosecutor will face,but still relies on prosecutors to implement these policies as the circum-stances dictate. The issue of prosecutorial discretion is addressed in sev-eral chapters of the Deskbook. The prosecutor must think and react onthe spot and this calls for the exercise of discretion, including with re-spect to which Deskbook policy is applicable.

138 The Preface of the Deskbook states that “[p]rosecutors possess a sig-nificant amount of discretion in the criminal justice system. To ensurepublic confidence in its administration, prosecutorial discretion must beexercised in a manner that is objective, fair, transparent and consistent.”The purpose of the Deskbook and the guidance it offers is to realize theseobjectives. Prosecutors make decisions without fear of political interfer-ence or improper or undue influence. They are accountable to the DPPand, via the DPP, to the Attorney General and the Canadian public forthe way they exercise this responsibility.

139 Chapter 2.1, Independence and Accountability in Decision-Making,describes the principle of independence as it applies to federal prosecu-tors and notes, “[t]he interaction of the principles of independence, ac-countability and consultation mean that what is protected is a system ofprosecutorial decision-making in which the prosecutor is an integralcomponent. A large measure of independence is conferred on Crowncounsel, but absolute discretion is not.”

140 Chapter 2.6, Consultation within the Public Prosecution Service ofCanada, reiterates that prosecutors are accountable to the DPP and thatthe independence of the prosecutor is the institutional independence ofthe ODPP. Chapter 3.5, Delegated Decision-Making, notes that the vast


majority of prosecutorial decisions are made by federal prosecutors act-ing on behalf of the DPP.

141 While the Deskbook guides the exercise of discretion and constrainsit to some extent, it confirms that prosecutors have discretion.

142 The applicant’s work description also clearly indicates that she exer-cises discretion and has autonomy. For example, under the heading “Ef-fort - Critical Thinking and Analysis” the descriptors include: “Exercisesprosecutorial discretion before the courts to present a fair, complete andjust prosecution on criminal matters in accordance with law practicestandards. The work must be carried out with professional fortitude, in-tegrity, dignity and with the highest level of professionalism in order touphold the ethical obligations of the Director of Public Prosecutions andas a member of the bar”; “Files or projects may be followed by the me-dia”; “The work requires quickly adapting and reacting to developmentsin the courtroom and to finding solutions within short time frames attimes without access to reference materials”; and, “Provides sound legaladvice, opinions and guidance to colleagues, investigative agencies andpartners on various files or project specific issues and a wide range ofcriminal law subjects.” Under the heading “Working Conditions” thedescriptors include: “A public officer working in an adversarial environ-ment exercising a quasi-judicial role where decisions impact human livesand the safety of communities and are under public scrutiny. This createsa unique type and level of stress”; and, “Scrutiny by the public and mediapertaining to controversial files.”

143 The exercise of discretion, which is part of the consideration of au-tonomy and decision-making, appears to be viewed by the Commissionin the context of government employees and not only in the context ofother prosecutors.

144 The Commission reasonably found that the applicant would have in-creased visibility as a result of seeking candidacy and is highly visible inher position given that she appears in a public courtroom on behalf of theCrown. Again, although the Commission was well aware that the appli-cant was a federal prosecutor, it considered her visibility as a public ser-vant vis-a-vis other federal employees and not vis-a-vis other prosecutorswho may have a higher profile due to particular cases or appearances inparticular courts. In my view, this is the appropriate perspective, giventhe PSEA governs public servants in general.

145 The applicant argued that the Commission considered several factswhich do not justify refusing her request. While individually, this may be


so, the Commission considered the cumulative effect of several facts,which, contrary to the applicant’s arguments, are not remote possibilities.

146 The applicant may be called upon to respond to the media and thiscould occur without the opportunity to consult with senior management,refer the inquiry to a media spokesperson or consult the Deskbook. Simi-larly, the applicant may be responsible for politically sensitive files.These are not impossible or remote possibilities; both are noted in herwork description. The applicant’s suggestion that such files could be re-assigned overlooks that other factors would likely affect the practicalityof reassigning files to other prosecutors who do not have similar impedi-ments or other conflicts of interest. The fact that the DPP only referred toone past complaint regarding a prosecutor who was a former politicalcandidate does not diminish the possibility that this could occur in thefuture.

147 The Commission did not ignore the views of the applicant’s TeamLeader or rely exclusively on the views of the DPP. The applicant’s re-quest form included the input of the Team Leader as well as the input ofthe DPP. The Commission is responsible for weighing the evidence andis entitled to give more weight to the views of the DPP, who is analogousto a Deputy Minister, rather than the views of the Team Leader. There isno evidence to support the applicant’s assertion that her Team Leaderwas more familiar with her duties than the DPP. The submissions of theDPP also highlighted the integrity of the Office, which is reflected in therole of all prosecutors.

148 I also note the applicant’s argument that the principle in Harquailshould be followed and that a comprehensive inquiry is required. In thepresent case, the Commission did conduct a comprehensive inquiry. TheCourt in Harquail also found that the Commission should have givengreater consideration to the views of the Deputy Minister. Although theapplicant is critical of the Commission for preferring the views of theDPP over the views of her Team Leader, in accordance with Harquail,the Commission would have erred if it overlooked the views of the DPP,who, as noted above, is analogous to a Deputy Minister.

149 The fact that former political candidates or office holders are not pro-hibited from being employed as federal prosecutors is not a relevant con-sideration with respect to the proportionality of the Commission’s deci-sion. The Commission made the decision pursuant to the PSEA whichgoverns current public servants who seek permission to run for office.


150 As noted above, the applicable statutes in other jurisdictions are notrelevant and do not address the Commission’s options to minimally im-pair or limit the impact on the applicant’s Charter rights as little as possi-ble. The approaches in other jurisdictions do not provide any other op-tions that the Commission could have considered. The Commissionconsidered the applicant’s proposal for reassignment of her files and re-assignment to another position.

151 The fact that the RCMP or other police are not prohibited from seek-ing election is not relevant to the factual context and the Commission’sfinding that the applicant had a high level of autonomy and decision-making. The Commission applied the PSEA, which does not apply to thepolitical activities of the RCMP. Moreover, the discretion exercised bythe applicant as a federal prosecutor differs from the discretion of policeto investigate and lay charges. For example, the applicant would provideadvice to the RCMP on the charges to be laid or could decide not topursue the prosecution of a charge laid by the RCMP. In my view, this isa different type of discretion which cannot be characterized as less dis-cretion than that of the police.

152 The applicant notes the PPSC Code of Conduct does not prohibitprosecutors from seeking election; however, neither does the PSEA.With respect to the applicant’s submission that the Commission did notconsider rules of professional conduct or the role of lawyers in general,the Commission considered the applicant’s submissions which notedthis, understood that she is a lawyer and referred many times to her du-ties in the context of her role as a federal prosecutor.

The Proportionate Balancing153 The applicant’s view that the Commission focused on the statutory

objective of a politically impartial public service, used this as its startingpoint and, as a result, overlooked her Charter rights to engage in politicalactivity and failed to conduct a proportionate balancing, is not supportedby the record.

154 The Commission did not acknowledge the jurisprudence which callson decision-makers to conduct a proportionate balancing where Charterrights are engaged (e.g., Dore or Loyola), but the decision reflects such abalancing.

155 In Bowden, Justice Mosley considered whether the decision of a War-den to deny face-to-face access to an inmate due to concerns about publicsafety and the security of the institution was reasonable and proportional.


Justice Mosley noted that the decision clearly affected the applicant’sparagraph 2(b) rights, but this right is not absolute and had to be bal-anced against the need to protect the security of the institution and thesafety of persons, including the staff and the prison population (at para48).

156 In the present case, as in Bowden, the applicant’s Charter rights arenot absolute and were balanced by the decision-maker against the objec-tive of political impartiality.

157 Part 7 of the PSEA has twin objectives, which in the present case, arein competition. One of the objectives — to engage in political activity —reflects Charter rights. Although the Commission did not use Charterlanguage or specifically acknowledge that the applicant had assertedCharter rights, the substance of the decision is more important than thespecific language used. In Bowden, Justice Mosley noted:

[52] The Warden did not explicitly make reference to the constitu-tional protection afforded to freedom of expression in her letter. Thiscould be understood to mean that the decision-maker ignored or min-imized the importance of expressive interests in the balancing exer-cise. However, Dore does not say that it is mandatory for decision-makers to explicitly refer to Charter values in their analyses. Thesubstance of the decision must be taken into account, not whether itpays lip service to the Charter. The letter states that the Warden tookinto consideration the submissions made by Ms Shephard and coun-sel for the applicants. Those submissions expressly referenced theCharter. While reasonable people might disagree with the outcome,there is nothing on the record before me to suggest that the Wardenignored or minimized those values.

[Emphasis added.]

158 The Commission used the statutory language rather than Charter lan-guage, but, in determining whether to grant the applicant permission toseek the candidacy and election and whether to grant a leave of absencewithout pay to do so, the Commission considered both objectives of thePSEA. The decision reflects that it considered all the relevant facts whichsupport its findings, including that the applicant had a high level of au-tonomy, decision-making and visibility.

159 The Court’s role is not to reweigh the evidence. As noted above, theCommission was entitled to attach more weight to the submissions of theDPP, who conveyed the view that the applicant’s candidacy indicates asignificant allegiance to a political party which would undermine the in-dependence of the prosecutor’s role. The Commission concluded that this


could lead to the perception that the applicant was not able to performher duties in a politically impartial manner. However, in reaching thisdecision, the Commission also considered the other information availa-ble, including the work description. It then assessed the applicant’s du-ties, the level of her position, her visibility and the other relevant factors.

160 As noted by the respondent, a public servant’s right to expression —and I would add the related right to run for office — may need to beconstrained to ensure impartiality in the public service (Osborne at p 97,Fraser at pp 467-470, Haydon at para 23). While the constitutional con-vention regarding political neutrality is not a Charter right, it remains arelevant factor in the balancing exercise.

161 Whether the limitation on the applicant’s Charter rights can be miti-gated or minimized is a difficult determination for the decision-makerand equally difficult for the Court on judicial review. The trade-off forthe applicant is to either pursue her political activities and run for officeor maintain her position as a federal prosecutor. The Commission did notforeclose the possibility that the impact on the applicant or on the publicservice, depending on the decision, could be mitigated in some way, butconcluded, on the particular facts, that no such measures would addressthe risk to political partiality or the perception of political partiality. TheCommission considered whether a leave without pay could be grantedand whether the applicant could return to her position, but concluded thatreassignment to a non-prosecutorial position was not feasible within thePPSC given its mandate and the fact that the vast majority of positionsare prosecutorial positions.

162 In Bowden, Justice Mosley found: [57] The record does indicate that the Warden took into considerationthe accommodations proposed by the applicants to minimize the risk.While she concluded that these would not be sufficient, it is evidencethat her mind was at least open to the possibility. [...]

163 As in Bowden, the record demonstrates that the Commission consid-ered whether it could mitigate the impact of its decision on the applicantbut ultimately found that there were no feasible options.

164 The ultimate question is whether the Commission’s decision protectsthe applicant’s Charter rights as fully as possible, or put another way,whether it limits the applicant’s Charter rights as little as possible, giventhe statutory objectives. In the present case, it was not possible to fullyprotect the applicant’s right to freedom of expression and to engage inpolitical activity and run for office while also permitting her to maintain


her position and to return to it following the election, in the event she isnot successful. While she is not prohibited from pursuing her rights, thecost of doing so is the loss of her position as a federal prosecutor andpublic servant.

165 In Dore the Supreme Court of Canada confirmed that a “margin ofappreciation” or deference is given to administrative bodies in balancingCharter values and broader statutory objectives, just as it would in amore traditional application of the reasonableness standard of review (atpara 57). In this case, the Commission considered the competing rightsand interests at play as required pursuant to the PSEA. After consideringall the facts, relevant factors, possible ways to mitigate the limitation onthe applicant’s rights and the competing statutory objective, the Commis-sion was not satisfied that the applicant’s candidacy would not impair orbe perceived to impair her ability to perform her duties in a politicallyimpartial manner either before the election or upon her return to work.The Commission’s analysis reflects, to a great extent, the guidance todecision makers established in Dore.

166 The decision of the Commission reflects a proportionate balancingand is, therefore, reasonable.

Judgment

THIS COURT’S JUDGMENT is that this application for judicial re-view is dismissed and no costs are ordered.


Annexe A

Relevant Statutory Provisions of the Public Service Employment ActPurpose of Part

112. The purpose of this Part is to recognize the right of employeesto engage in political activities while maintaining the principle of po-litical impartiality in the public service.

Employees

113. (1) An employee may engage in any political activity so long asit does not impair, or is not perceived as impairing, the employee’sability to perform his or her duties in a politically impartial manner.

(2) The Governor in Council may, on the recommendation of theCommission, make regulations specifying political activities that are


deemed to impair the ability of an employee, or any class of employ-ees, to perform their duties in a politically impartial manner.

(3) In making regulations, the Governor in Council may take intoconsideration factors such as the nature of the political activity andthe nature of the duties of an employee or class of employees and thelevel and visibility of their positions.

114. (1) An employee may seek nomination as a candidate in a fed-eral, provincial or territorial election before or during the election pe-riod only if the employee has requested and obtained permissionfrom the Commission to do so.

(2) An employee may, before the election period, be a candidate in afederal, provincial or territorial election only if the employee has re-quested and obtained permission from the Commission to do so.

(3) An employee may, during the election period, be a candidate in afederal, provincial or territorial election only if the employee has re-quested and obtained a leave of absence without pay from theCommission.

(4) The Commission may grant permission for the purpose of subsec-tion (1) or (2) only if it is satisfied that the employee’s ability toperform his or her duties in a politically impartial manner will not beimpaired or perceived to be impaired.

(5) The Commission may grant leave for the purpose of subsection(3) only if it is satisfied that being a candidate during the electionperiod will not impair or be perceived as impairing the employee’sability to perform his or her duties in a politically impartial manner.

(6) In deciding whether seeking nomination as, or being, a candidatewill impair or be perceived as impairing the employee’s ability toperform his or her duties in a politically impartial manner, the Com-mission may take into consideration factors such as the nature of theelection, the nature of the employee’s duties and the level and visibil-ity of the employee’s position.

(7) The Commission may make permission under subsection (4) con-ditional on the employee taking a leave of absence without pay forthe period or any part of the period in which he or she seeks nomina-tion as a candidate, or for the period or any part of the period inwhich he or she is a candidate before the election period, as the casemay be.

(8) An employee ceases to be an employee on the day he or she isdeclared elected in a federal, provincial or territorial election.

[...]


116. On granting an employee permission under subsection 114(4),leave under subsection 114(5) or permission under subsection115(2), the Commission shall cause notice that it has done so, to-gether with the name of that employee, to be published in the Can-ada Gazette.

Deputy Heads

117. A deputy head shall not engage in any political activity otherthan voting in an election.

CANADIAN CASES ON EMPLOYMENT LAW - To Parent ...

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