Mounted Police Association of Ontario v. Canada (Attorney General), 2012 ONCA 363

The Ontario Court of Appeal clarified the scope of section 2(d) of the Charter, freedom of association, in the context of workers’ collective bargaining rights, in considering the constitutionality of the Public Service Labour Relations Act, S.C. 2003, c. 22 (“PSLRA”), and s. 96 of the Royal Canadian Mounted Police Regulations, 1988, SOR/88-361 (“Regulations”). The Court held that s.96 did not violate the Charter rights of the RCMP members and allowed the Attorney General’s appeal. It also held that the exclusion of RCMP members from the PSLRA did not violate s. 2(d) of the Charter and dismissed the RCMP’s cross-appeal. 

Section 96 creates the Staff Relations Representative Program (“SRRP”) which represents the respondents’ members. Though the SRRP is a vehicle for RCMP members’ concerns, it does not engage in good faith negotiations on their behalf nor is it institutionally independent from management. The respondents argued that section 2(d) of the Charter guarantees their right to collective bargaining power and accordingly, the right to engage in negotiations with management independent of the SRRP. Justice Juriansz rejected the respondents’ argument and allowed the Attorney General’s appeal. According to Juriansz JA, Fraser stands for the proposition that a government employer has a positive obligation under 2(d) to engage in good faith negotiations with employees only when is it virtually impossible for workers to engage in collective action on their own behalf. Even in such circumstances, collective bargaining under 2(d) only encompasses the right to make collective representations and have them acknowledged in good faith. In no event does section 2(d) prescribe a particular mode of collective action preferred by federal employees. Because the respondents are able to form voluntary associations and further able to voice their workplace concerns through the SRRP, they fail the Fraser test - it is not “effectively impossible” for them to act collectively and thus the constitutional right to collective bargaining has not been triggered. 

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Maeve Clougherty 
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Canada (National Revenue) v. Canada, 2011 FCA 314

In this case the Federal Court of Appeal considered whether an entitlement to remuneration based on a per diem rate established in advance is a “fixed or ascertainable stipend or remuneration” within the context of the Canada Pension Plan, when it is not possible to determine in advance how many days of service will be required. The Court held that such remuneration meets that definition.

By the combined operation of ss. 2 (definition of “office”) and 6 of the Canada Pension Plan and s. 24 of the Canada Pension Plan Regulations a member of the Ontario Judicial Appointments Committee is engaged in pensionable employment if that position carries the entitlement to a “fixed or ascertainable stipend or remuneration.” Having acknowledged that there is inconsistent case law on the subject, Sharlow J.A. determined that there is “nothing in the language of the definition of “office" read in its statutory context, that justifie[d] the Court in interpreting the phrase “fixed or ascertainable” to require an advance determination of the total remuneration for a particular year.” Sharlow J.A. thus concluded that “a legal entitlement to a per diem rate of remuneration established in advance is sufficiently “fixed or ascertainable” to meet the statutory test.”

November 16, 2011
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Rebecca Crangle & Alexa Mingo
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Sutherland v. Hudson's Bay Company, 2011 ONCA 606

In Sutherland v. Hudson's Bay Company, the Ontario Court of Appeal addressed the ownership of surplus funds in a company pension plan, holding that such funds were subject to the same equitable principles governing the pension fund itself, even though provisions in the plan documentation provided that the surplus funds could revert to the company in certain cases.

The respondents, former employees of Hudson's Bay Company ("HBC"), alleged that HBC had misappropriated surplus pension funds that were properly due to the employees as plan beneficiaries. HBC, relying on the result in Burke v. Hudson's Bay Company, argued that it was a beneficiary and entitled to the surplus under the plan's terms. Justice Gillese (MacFarland J.A. concurring) dismissed the appeal. Following the analysis set out in Schmidt v. Air Products of Canada Ltd., Gillese J.A. found that the pension fund in question was the subject of an irrevocable trust which explicitly extended to any surplus. Accordingly, as per Schmidt, equitable principles must prevail to the extent of any conflict with the plan documentation – including the provisions on which HBC purported to rely. Although it did not change the Schmidt framework, Burke was distinguished from the present case, as the plan at issue in Burke clearly limited the employees’ interest in their defined benefits only.

Justice Rouleau, dissenting, would have allowed the appeal. While agreeing that Schmidt remained authoritative and had not been altered in principle by Burke, he considered the former to be distinguishable. In the present case, as in Burke, he would have read the plan documentation in its entirety, so as to reduce or eliminate conflict, as a matter of contractual interpretation. Read in this way, he suggested, the documentation entitled HBC to the surplus.

September 22, 2011
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Zarya Cynader, Mary Phan & Kai Sheffield
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McLean v. City of Miramichi, 2011 NBCA 80

The Court in this case held that s. 17.91 of the New Brunswick Police Act, (the "Act") which states a police officer shall not be dismissed for “unsatisfactory work performance”, except in accordance with the provisions of the Act, should be broadly interpreted to include cases of involving the common law doctrine of frustration as well as “impossibility of performance.”

Justice Robertson found that the legislature made a conscious decision to alter the Act in 2005 in order to ensure that terminations for cause that do not relate to misconduct are dealt with by the legislation and not by common law. Justice Robertson therefore reasoned that the way in which complaints are originally characterized - whether or not they are stated as being related to misconduct - is not dispositive in determining whether it falls within the provision. Additionally, the powers of the arbitrator appointed under the Act are broad enough to deal with the issues of frustration of an employment contract.

September 22, 2011
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Sierra Robart
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Globex Foreign Exchange Corporation v. Kelcher, 2011 ABCA 240

In this case, the Alberta Court of Appeal clarified, in obiter, several points of employment law relating to non-competition covenants. First, the Court stated that non-competition covenants are not enforceable against an employee whose employment contract has been wrongfully terminated. Second, the Court stated that continued employment, without more, is not sufficient consideration for making an amendment to the employment contract - namely, a non-competition covenant - that is adverse to the employee.

The case concerned three employees who agreed to non-competition covenants with Globex Foreign Exchange Corporation. One employee was wrongfully dismissed by the company; the other two agreed to the covenants during their employment, but received no new benefits for doing so, and later left the company. All three were sued by Globex for violating the non-competition covenants, but the trial judge found none of the covenants to be enforceable.

Justice Hunt, for the Alberta Court of Appeal, found that the non-competition covenants were unenforceable because they were overly broad and vague, and therefore violated the reasonableness test in Shafron v. KRG Insurance Brokers (Western) Inc., a 2009 Supreme Court of Canada case. In obiter, Justice Hunt stated that the General Billposting principle - that an employer cannot enforce a non-competition covenant against an employee that it has wrongfully dismissed - remains good law in Canada. Justice Hunt, referring to a 2005 Alberta Court of Appeal case dealing with the same matter, further stated that continued employment, without more, can not serve as consideration for an amendment to the employment contract that is adverse to the employee.

In dissent, Justice Slatter disputed the majority's holding on grounds relating to the standard of review. He also disagreed with the two issues addressed above. Justice Slatter argued that General Billposting is inconsistent with later Supreme Court of Canada cases, and therefore would not have applied it. Instead, he would have held that, despite the wrongful termination of an employment contract, non-competition covenants in that contract are still enforceable. Justice Slatter also would have held that continued employment can serve as consideration for an amendment to the employment contract. He reasoned that, since ongoing "at will" employment can be terminated at any time, a "tacit promise" that the employment would not soon be terminated could be found in this case.

August 10, 2011
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Sierra Robart & Kai Sheffield
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Waterman v. IBM Canada Limited, 2011 BCCA 337

In this case, the British Columbia Court of Appeal considered the issue of the deductibility of pension benefits from an award of damages for wrongful dismissal. Mr. Waterman, upon being wrongfully dismissed from IBM, automatically began receiving pension benefits because of his age upon dismissal. Madam Justice Prowse ruled that these pension benefits should not be deducted from the damages awarded for wrongful dismissal and accordingly dismissed the appeal.

Mr. Waterman, at the age of 65, was dismissed without cause and notice from IBM. Upon termination, he began receiving pension benefits from IBM’s defined benefit pension plan (which was wholly funded by IBM). He sued IBM for wrongful dismissal and was awarded damages. IBM argued that the pension benefits should be deducted from the damage award, as disability benefits were in Sylvester v. British Columbia, but the trial judge came to the opposite conclusion. The Court of Appeal concurred, distinguishing this case from Sylvester because of the nature of the benefits. The Court noted that disability benefits and pension benefits have historically been distinguished: pension benefits are not substitute for wages but a benefit earned by being an employee for a specified period of time. It is also clear from the contractual relationship between the parties that they did not consider the pension to be a substitute for salary. Madam Justice Prowse therefore came to the conclusion that pension benefits should not be deducted from an award of damages and dismissed the appeal.

August 2, 2011
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Sam Golder & Dominik Swierad

Boehringer Ingelheim (Canada) Ltd./Ltee. v. Kerr, 2011 BCCA 266

In this case, the British Columbia Court of Appeal addressed the issue
of the correct legal test for prima facie discrimination when an
employee who has been on disability leave requests a return to work
and is not returned to work by the employer.  Kirkpatrick J.A.,
writing for the court, held that the test articulated in
Communications, Energy & Paperworkers’ Union of Canada (CEP), Local
789 v. Domtar Inc. remains the test to be applied in the
circumstances where discrimination is alleged, and that it was
appropriately applied in this case.


The three elements of the test for prima facie discrimination are that
the complaint have a real or perceived disability, that he or she
received adverse treatment, and that his or her disability was a
factor in the treatment.  Justice Kirkpatrick rejected the appellant’s
suggestion that there is an additional requirement in the test whereby
a disabled employee must establish a material change in circumstances
when requesting a return to work before prima facie discrimination can
be established.  The employer's duty to accommodate obliges it to
investigate what an employee who wishes to return to work is capable
of doing; there is no onus for the employee to prove that he or she is
in fact capable.

June 9, 2011
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Marc Gibson & Ryan MacIsaac

Canadian Union of Public Employees v. Hachey, 2011 NBCA 41

In this case, the Court of Appeal of New Brunswick refused to appoint or confirm a receiver in the context of a dispute over the ownership of the assets of a “chartered local” union that had severed contractual ties with the parent union. The parent union had appointed a receiver  to gather information relating to the identification and ownership of assets held by the local union. The parent union then applied to the court for confirmation of the appointment.  Justice Robertson dismissed the appeal, holding that a court would not appoint or confirm a receiver for the sole purpose of identifying ownership of the assets.  Further, it is a prerequisite to seizure that ownership be established. Accordingly, the parent union must initiate an originating process to first resolve the issue of ownership before a receiver can be appointed.

The parent union's constitution and by-laws provided that local unions were "subordinate" and that the property of any local union would become that of the parent union upon dissolution; however, ownership over assets was disputed by the members of the local union.  Following the local union's break-away, the parent union appointed one of its employees as a receiver, and applied for an order to grant the receiver authority to compel production of documents pertaining to the assets of the local union.  The court noted a lack of jurisprudence in relation to a court's power to appoint and confirm receivers under Rule 41 of New Brunswick's Rules of Court.  The requirements for confirmation of a receiver under Rule 41 state that the applicant must have an "interest in the property".  Finding that the ownership of the assets was in dispute, the court held that the parent union  lacked an "interest in the property."  Accordingly, the application judge’s denial of confirmation was upheld.

May 5, 2011
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Grant Bishop & Steve Holinski

McGarry v. Co-operators Life Insurance Co., 2011 BCCA 214

In interpreting an insurance policy, the British Columbia Court of Appeal in McGarry v. Co-operators Life Insurance Co. treated employee beneficiaries of the policy as third-party beneficiaries who cannot intrude upon the privity to contract between the employer and insurance provider. McGarry, the appellant, was an employee suffering from a total occupational disability who was entitled to long term disability benefits under the employer's insurance policy provided by the respondent party. The respondent claimed that while the policy mandated payment of benefits up to 65 years, the payment was capped to 2 years per the employer's application form.

Hinkson J.A., writing for the majority, held that when language of the policy is unambiguous, the court should give effect to the clear language “reading the contract as a whole”. The dispute centred on what constituted as parts of the insurance contract in question and the significant aspect of the decision lies in the clarification that the contract as a whole includes both the benefit policy itself and the employer application form. Hinkson J.A. reasoned that the master group insurance policy allowed employers such as Five Star Paving Co. Ltd to select the particular type of insurance coverage they want to be available for their employees. Therefore, the employer’s application form for such coverage is instrumental in determining the terms of the insurance policy.

Mackenzie J.A. dissented by reasoning that since policy provisions state that applications cannot conflict with policy terms, the terms of the policy must prevail over the application. He further reasoned that since employees benefitting from the insurance plan are not directly involved in contract negotiations, they inadvertently rely on the clarity and transparency of the insurance policy. Consequently, Mackenzie J.A. found that the employer application cannot amend the policy itself without infringing upon employees' expectations.

April 28, 2011
http://www.courts.gov.bc.ca/jdb-txt/CA/11/02/2011BCCA0214cor1.htm

Jen-Yii Liew & Minsuk Kim