Judgments

Decision Information

Decision Content

T-1292-84
Julie Dalton (Plaintiff) v.
Canadian Human Rights Commission, Canadian Pacific Airlines Limited, Brotherhood of Railway and Airline Clerks, System Board of Adjustment No. 435 and Bianca Perruzza (Defendants)
Trial Division, Reed J.—Toronto, September 21, 1984; Vancouver, October 18, 1984.
Judicial review — Equitable remedies — Declarations — Human rights — Canadian Human Rights Commission approving settlement pursuant to s. 38 of Act whereby Union, Company and defendant Perruzza agreeing to revision of seniority list — Third parties affected by reordering of list not notified of complaint, terms of settlement, nor of approval by Commission — Company and Union not able to retroactively alter seniority lists without involving employees in process — If clause concerning seniority in collective agreement void, reasonable to characterize what happened thereafter as insti tution of practice by Company and Union of allocation of seniority on basis of pre-existing rules — S. 46 of Act making non-compliance with settlement approved by Commission criminal offence — Involvement of Commission making proce dure of negotiation and settlement under its tutelage qualita tively different from normal negotiations between employer and union — Commission having flexible procedure — Mech anism for allowing joint interests of affected third parties to be put forward must be devised — Order to go prohibiting Company and Union from implementing revised seniority list pursuant to settlement approved by C.H.R.C. — Settlement declared invalid as made without regard for natural justice rules — Canadian Human Rights Act, S.C. 1976-77, c. 33, ss. 38, 46.
Statutes — Construction — Retrospective application of Canadian Human Rights Act — Canadian Human Rights Commission finding CP Air's seniority lists constituting dis crimination based on age and approving settlement revising seniority lists established prior to present collective agreement
— Rebuttable presumption of non-retrospectivity of statutes
— Retrospective statute "opens up closed transaction and changes consequences, although change effective only for future" — Here discriminatory act not completed in past — Continual reliance on seniority list containing built-in dis criminatory feature constituting succession or repetition of discriminatory acts — Distinguish continuing effects of one discriminatory act because new and different types of damage to plaintiff on each occasion — Conduct complained of con stituting discriminatory practice proscribed by Act — Com-
mission's action to redress situation not retrospective applica tion of Act.
Human rights — Jurisdiction of Canadian Human Rights Commission — Retrospective application of Canadian Human Rights Act — Presumption of non-retrospectivity applying to all statutes unless rebutted — Commission finding CP Air's seniority lists constituting discrimination based on age and approving settlement revising seniority ranking based on retroactive application of new collective agreement — Retro spective statute "opens up closed transaction and changes consequences, although change effective only for future" — Situation here not discriminatory act completed in past — Continual reliance on seniority list containing built-in dis criminatory feature constituting succession or repetition of discriminatory acts — Conduct complained of constituting discriminatory practice proscribed by Act — Commission's action to redress situation not retrospective application of Act — Canadian Human Rights Act, S.C. 1976-77, c. 33, ss. 3, 7(b), 9(1)(c), 10, 35, 38.
Human rights — Jurisdiction of Canadian Human Rights Commission — Interference with vested rights — Commission approving settlement revising seniority lists — Presumption of non-interference with vested rights applying only when statute ambiguous — Act not ambiguous concerning Commission's authority to order reordering of seniority lists — Inclusion of ss. 16, 32(7), 42(2), 48 and 65 specifically prohibiting interfer ence with certain types of vested rights indicating Parliament intended to leave discretion to Commission in dealing with other non-exempt rights — Canadian Human Rights Act, S.C. 1976-77, c. 33, ss. 16, 32(7), 42(2), 48, 65.
Human rights — Canadian Human Rights Commission approving revised seniority list — Wording of settlement not authorizing reordering of seniority as evidenced in revised seniority list — Settlement requiring "revised seniority list based on a retroactive application of Article 7.08 contained in Agreement No. 22" — Article 7.08 requiring age be used for establishing seniority for employees hired prior to effective date of agreement and random selection be used thereafter — Literal wording of settlement making it meaningless — Plain tiff not raising argument but Court bound to consider it since s. 46 making it criminal offence to ignore terms of settlement approved by Commission — Canadian Human Rights Act, S.C. 1976-77, c. 33, s. 46.
CP Air accorded employees who had been hired on the same day seniority on the basis of their birth date pursuant to a negotiated clause of the collective agreement. The clause changed in October 1982 so that the basis of seniority became
random selection. The defendant, Perruzza, filed a complaint that the determination of seniority constituted discrimination based on age. Pursuant to the Commission's investigation, the employee, the Union and the Company reached a settlement whereby the seniority lists were revised. The Commission approved the settlement pursuant to section 38 of the Canadian Human Rights Act. The plaintiff and others whose seniority rights were affected by a reordering of the seniority list were not given notice of the complaint, settlement, nor the Commis sion's approval. The plaintiff, whose seniority ranking was adversely affected by the reordering, seeks a declaration that the Commission's approval of the reordering of the seniority lists is invalid, and an injunction restraining the Union and the Company from adopting the revised list. The plaintiff argues that the Commission does not have authority to approve settle ments which demand the reordering of seniority lists estab lished prior to the coming into force of the relevant provisions of the Canadian Human Rights Act. To do so is to apply the statute retrospectively. The plaintiff also argues that seniority rights are vested rights which cannot be dislodged by new statutory provisions unless Parliament expressly so provides. Finally, it is argued that the Commission cannot approve a settlement without giving notice and an opportunity to be heard to affected third parties.
Held, an order will issue prohibiting the implementation of the revised seniority list. A declaration will issue stating that the wording of the settlement does not authorize the reordering of seniority as evidenced in the revised seniority list, and that the settlement is invalid as having been made without due regard for the rules of natural justice.
A retrospective statute is one which "opens up a closed transaction and changes its consequences, although the change is effective only for the future". The fact that a reordering of the list will only have effect prospectively does not mean there is no retrospective application of the statute. In this case, there is not a discriminatory act that was completed in the past. Every time an employment related decision is made that is based on seniority, there is discrimination on the basis of age. There is a succession or repetition of discriminatory acts which constitute a discriminatory practice proscribed by the Act. The action taken by the Commission to redress the situation cannot be classified as a retrospective application of the Act.
The presumption of non-interference with vested rights comes into operation only when the statute is ambiguous. Seniority rights partake sufficiently of a quality of vested rights to fall within this principle of statutory interpretation. How ever, the Act is not so ambiguous on this point as to allow room for the operation of this principle. The inclusion of sections 16, 32(7), 42(2), 48 and 65, specifically prohibiting interference with certain types of vested rights indicates that Parliament intended to leave to the Commission a discretion in dealing with other non-exempt rights.
If the clause in the collective agreement relating to seniority rights is void as contrary to public policy, the reordering of the seniority list was the institution of a practice by the Company
and the Union of the allocation of seniority on the basis of pre-existing rules. Thus, there was not a void permitting the Company and the Union to reach a settlement reordering the seniority list without notice to the plaintiff and without her consent. Although in some circumstances unions may sign settlements of legal claims on behalf of their membership, or amend a collective agreement by a letter of understanding, it is too broad a claim to assert that the Company and the Union in the present case could retroactively alter the seniority lists without involving the employees in the process. The absence of a written requirement in the Union's constitution does not mean that a ratification vote is unnecessary before a collective agreement becomes binding. The involvement of the Commis sion, whose approval of settlements turns them into instru ments, the contravention of which is a criminal offence, in the process of negotiation and settlement changes the nature of what might otherwise be strictly a negotiation process. The Commission has a flexible procedure. While there is no necessi ty to listen to each person individually, some mechanism must be devised for allowing the interests of affected third parties to be put forward.
The settlement requires "a revised seniority list based on a retroactive application of Article 7.08 contained in Agreement No. 22". Article 7.08 requires that age be used for establishing seniority for employees hired prior to the effective date (Octo- ber 31, 1982). A retroactive application of this article would change nothing, since age was used prior to October 31, 1982. None of the reordering of the seniority list is required by the terms of the settlement. To ignore this fundamental defence, even though not pleaded by the parties, would be inappropriate. Section 46 of the Canadian Human Rights Act makes it a criminal offence to ignore the terms of a settlement which has been approved by the Commission. This demands precision in the wording of the settlement and a strict adherence to its literal text.
CASES JUDICIALLY CONSIDERED
APPLIED:
Steel v. Union of Post Office Workers, [1978] 1 W.L.R. 64 (Employment Appeal Tribunal); Province of Manitoba v. Manitoba Human Rights Commission, et al. (1983), 25 Man. R. (2d) 117 (C.A.); B.C. Distillery Co. Ltd. and Group of Seagrams Employees and Distillery, Brewery, Winery, Soft Drink and Allied Workers Union, Local 604, [1978] 1 Canadian LRBR 375 (B.C.L.R.B.).
CONSIDERED:
Latif v. Canadian Human Rights Commission et al., [1980] 1 F.C. 687 (C.A.); Quarles v. Philip Morris, Inc., 279 F. Supp. 505 (E.D. Va., 1968); Local 189, United Papermakers and Paperworkers, AFL-CIO, CLC v. U.S., 416 F. 2d 980 (5th Cir., 1969); Labelle et al. v. Air Canada (1982), 4 C.H.R.R. D/1311, Decision 266, (C.H.R.C.); Ontario Human Rights Commission et al. v. Borough of Etobicoke, [1982] 1 S.C.R. 202; Re Bakery and Confectionery Workers' Int'l Union, Local 322, and Canada Bread Co. Ltd. (1970), 22 L.A.C. 98 (Ont.
L.R.B.); Hawkesbury & District General Hospital and CUPE, Locals 1967 and 2474; Re Renee Guerin et al.; Re CUPE; Re Nicole Drouin et al., [1984] OLRB Rep. February 259; Magold et al. and Int'l Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers et al., [1976] 1 Canadian LRBR 392; McGavin Toastmaster Ltd. v. Ainscough, [1976] 1 S.C.R. 718.
REFERRED TO:
Franks v. Bowman Transportation Co., 424 U.S. 747 (5th Cir., 1976); Starey v. Graham, [1899] 1 Q.B. 406; Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police, [1979] 1 S.C.R. 311; McCarthy v. Attorney General of Canada, [1981] 1 F.C. 309 (C.A.).
COUNSEL:
George A. Lane for plaintiff.
Russell G. Juriansz for defendant Canadian
Human Rights Commission.
K. F. Braid for defendant Canadian Pacific Airlines.
No one appearing on behalf of defendant Brotherhood of Railway and Airline Clerks, System Board of Adjustment No. 435, and defendant Bianca Perruzza.
SOLICITORS:
Keyser/Mason/Coleman/McTavish & Lewis, Mississauga, for plaintiff.
Russell G. Juriansz, General Counsel, Canadian Human Rights Commission, Ottawa, for defendant Canadian Human Rights Commission.
K. F. Braid, Acting Regional Counsel, Canadian Pacific Law Department, Toronto, for defendant Canadian Pacific Airlines.
The following are the reasons for judgment rendered in English by
REED J.: This case was originally thought to involve only two issues: (1) the jurisdiction of the Canadian Human Rights Commission to approve settlements revising the seniority ranking of employees on the basis that the existing arrange ment constitutes discrimination on the basis of age; (2) the extent to which, in such cases, the
Commission is obliged to give notice and an oppor tunity to be heard to those individuals whose seni ority ranking would be altered by such an order. In the course of argument it became apparent that a third issue was relevant: the proper interpretation of the settlement in question in this case.
The facts are as follows: from 1960, until the coming into force of collective agreement No. 22, on October 31, 1982, CP Air accorded employees who had been hired on the same day seniority on the basis of their birth date. (Hiring a number of employees on the same day was done to facilitate the running of training programs given to new employees.) This use of birth date was adopted pursuant to a clause of the collective agreements negotiated by the defendant, the Brotherhood of Railway and Airline Clerks, System Board of Adjustment No. 435 (BRAC) and the defendant CP Air. The first such agreement was negotiated in 1959-1960 (agreement No. 11) and the relevant clause provided:
In the event that more than one employee in the same seniority groups has the same seniority date, the employee with the longer Company service will appear first on the seniority list, and in the event of equal Company service, the older employee will appear first on the seniority list.
This clause was essentially carried forward in all subsequent agreements until agreement No. 22 of October, 1982. That agreement provided (Article 7.08):
In the event that more than one employee in the same seniority classification has the same seniority date, the employee with the longer Company service will be considered senior and in the event of equal Company service, the older employee will be considered senior.
Employees who are hired after the signing of Agreement 22 who are in the same seniority classification and who have equal Company service will have their seniority placement deter mined by the process of random selection.
Seniority is used to determine a number of aspects of employment: overtime opportunities, geographical location of job, shifts worked, dates of vacation leave, order of lay-off.
The defendant, Bianca Perruzza, was hired on May 4, 1981, and as the youngest member of her
group hired on that day was given the most junior rank in seniority. She was subsequently scheduled to be laid off in November, 1982, ahead of others hired the same day but who were older than she was. (She was not in fact laid off until January, 1983 because she elected to move from Toronto to Vancouver and "bump" a more junior employee there rather than take the November lay-off.) On February 10, 1983, she filed a complaint with the Human Rights Commission on the ground that the determination of seniority and the consequent lay off constituted discrimination on the basis of age. Subsection 3(1) and paragraph 7(b) of the Canadian Human Rights Act, S.C. 1976-77, c. 33 (as am. by S.C. 1980-81-82-83, c. 143, s. 2) provide:
3. (1) For all purposes of this Act, race, national or ethnic origin, colour, religion, age, sex, marital status, family status, disability and conviction for which a pardon has been granted are prohibited grounds of discrimination.
7. It is a discriminatory practice, directly or indirectly,
(b) in the course of employment, to differentiate adversely in relation to an employee,
on a prohibited ground of discrimination.
Paragraph 9(1)(c) (as am. idem, s. 4) and section 10 (as am. idem, s. 5) are also relevant:
9. (1) It is a discriminatory practice for an employee organi zation on a prohibited ground of discrimination
(c) to limit, segregate, classify or otherwise act in relation to an individual in a way that would
(i) deprive the individual of employment opportunities, or
(ii) limit employment opportunities or otherwise adversely affect the status of the individual,
10. It is a discriminatory practice for an employer, employee organization or organization of employers
(a) to establish or pursue a policy or practice, or
(b) to enter into an agreement affecting recruitment, refer ral, hiring, promotion, training, apprenticeship, transfer or any other matter relating to employment or prospective employment,
that deprives or tends to deprive an individual or class of individuals of any employment opportunities on a prohibited ground of discrimination.
The Commission investigated the complaint pur suant to section 35 of the Canadian Human Rights Act and this resulted in a settlement being agreed to by the three defendants, CP Air, BRAC and Bianca Perruzza. The settlement provided:
1. BRAC shall prepare in consultation with the Canadian Human Rights Commission's Western Regional Office a revised seniority list based on a retroactive application of Article 7.08 contained in Agreement No. 22, and present such a revised list to CP Air for adoption.
2. CP Air shall adopt the revised seniority list mentioned in 1), above.
3. In the event that the revision outlined in 1) and 2) above results in Bianca Perruzza being assigned a higher seniority rank than the one she currently holds, CP Air and BRAC shall jointly share the cost of compensating her for wages lost by reason of her earlier, lower seniority.
On April 4, 1984, the Commission approved this settlement pursuant to section 38 of the Canadian Human Rights Act. The Commission, the Union and the Company all agree that the settlement requires the reordering of the seniority list, not only as it relates to the defendant Bianca Perruzza (i.e. a reordering by lot as between those people hired on the day she was hired—May 4, 1984) but also as it relates to the seniority of all persons hired, from time to time over the years, when age has been used to establish seniority among persons hired on the same day.
Neither the plaintiff nor the other employees whose seniority would be affected by a reordering of the seniority list were given notice of the com plaints filed by Bianca Perruzza, of the terms of settlement agreed to by the Union and the Com pany, of the approval of the Commission. The plaintiff learned of the settlement on reading an article in the Union newspaper which carried the title "Seniority Sweepstakes".
The plaintiff, Julie Dalton, was hired May 20, 1980. At that time, her seniority, as determined on the basis of age, was second out of the group of eleven employees hired that day. On the basis of the reordering to be done, her seniority will be changed to fifth. She claims a declaration that the decision of the Canadian Human Rights Commis sion approving the reordering of the seniority lists
is invalid and an injunction restraining the Union and the Company from adopting the revised seni ority list which has been prepared pursuant to that decision.
While only one person is named as plaintiff in this action, her claim is viewed as being a repre sentative case which will equally determine the rights of all the other employees whose seniority is being adversely affected as a result of the decision of the Commission.
Revision of Seniority List—Retrospective Applica tion of the Canadian Human Rights Act?
The plaintiff's argument is that the Canadian Human Rights Commission does not have author ity to require, through consultation and negotia tion, and to approve settlements which demand the reordering of seniority lists established prior to March 1, 1978 (the date on which the relevant provisions of the Canadian Human Rights Act came into force). It is argued that to do so is to apply that statute retrospectively and to interfere with vested rights.
The Federal Court of Appeal dealt with the question of retrospectivity as it relates to the oper ation of the Canadian Human Rights Act in Latif v. Canadian Human Rights Commission et al., [ 1980] 1 F.C. 687. At pages 702-705, it said:
Counsel for the applicant relied on the general nature of the legislation, as well as certain specific provisions of the Act, as indicating clearly, in his submission, an intention that the Act should apply retrospectively to discriminatory practices which were completed before it came into force. I have not been persuaded by his submissions that there is such a clear and unambiguous expression of intention .... The fact that legisla tion serves a generally laudable or desirable purpose is not by itself sufficient to displace the rule against retrospective opera tion .... The legislation in the present case is quite different in its impact [from the Ontario The Family Law Reform Act, 1978] ... Its operation is not based on a status ... but on conduct which is stigmatized by the legislation with results that interfere with or overturn what were formerly lawful exercises of freedom of contract.
In the result, I am of the view that the Act does not disclose a clear intention that it should apply to a discriminatory practice that occured and was completed before it came into force.
The Latif case dealt with an employee who alleged he had been discharged from his employ ment partly because of his religion and national origin. The Commission refused to deal with the complaint, the discharge having taken place before the Act came into force.
I would first of all make some comments on the Commission's argument that a reordering of the seniority list is not retroactive because it does not seek to undo all past employment decisions taken in reliance on the seniority list. This is no doubt true but misses the point in issue; the issue is whether the reordering of the lists is an application of the Canadian Human Rights Act retrospective ly not retroactively. (See: Driedger, Construction of Statutes, 2d ed., pages 185 ff. for an explana tion of the difference between the retroactive and retrospective operation of statutes.) Also the fact that a reordering of the list will only have effect prospectively does not mean there is no retrospec tive application of the statute. In Driedger (supra) at page 186 a retrospective statute is described as one which "opens up a closed transaction and changes its consequences, although the change is effective only for the future." There is no doubt that there is a good argument that that is what the reordering of the list does in the present case.
The Commission argues, however, that in the present case a requirement that the seniority list be reordered prospectively cannot be seen as a retrospective application of the Canadian Human Rights Act because the situation which it is designed to redress is not a discriminatory act that was completed in the past. The Commission argues that every time an employment related decision is taken based on the seniority list (shift to be worked, vacation dates, overtime opportunity) there is discrimination on the basis of age. This, it is argued, constitutes a dicriminatory practice pro hibited by the Act. There is considerable force to this argument.
I was referred to two United States cases as support for the proposition that the application of a statute to present incidents of discrimination is not a retrospective application of the statute. It is true that the two cases in question, Quarles v.
Philip Morris, Inc., 279 F. Supp. 505 (E.D. Va., 1968), and Local 189, United Papermakers and Paperworkers, AFL-CIO, CLC v. U.S., 416 F. 2d 980 (5th Cir., 1969), are of uncertain value in the Canadian context. They both deal with discrimina tion on the basis of race which carried over from pre-1964 Civil Rights Act of 1964 [78 Stat. 241] days. Both cases are founded squarely on the question of the interpretation of the United States Civil Rights Act of 1964. That Act was designed to correct past situations; it was designed to oper ate retrospectively; and it specifically validated only bona fide seniority systems (that is those founded on business necessity). In addition, both cases deal with departmental, not company, seni ority. Nevertheless, the approach taken by the United States courts in those cases is useful for the reasoning on which it is based.
Prior to the enactment of the Civil Rights Act of 1964, it had been the practice of the defendant companies in both of the cases cited above to segregate their workforce into all-white and all- negro departments. After the Act came into force this was prohibited but negroes were still con strained from competing on an equal basis for the formerly "white" jobs because of departmental seniority preference rules which were carried for ward. In both cases the Courts found them to be present discrimination. In the Local 189 case (supra) the Court reasoned, at page 988:
It is not decisive therefore that a seniority system may appear to be neutral on its face if the inevitable effect of tying the system to the past is to cut into the employees present right not to be discriminated against on the ground of race.
And at page 994:
When an employer adopts a system that necessarily carries forward the incidents of discrimination into the present, his practice constitutes on-going discrimination, unless the inci dents are limited to those that safety and efficiency require.
Another United States case which can be referred to is Franks v. Bowman Transportation Co., 424 U.S. 747 (5th Cir., 1976).
More significant, perhaps, is the decision in Steel v. Union of Post Office Workers, [1978] 1
W.L.R. 64. The statute under consideration in that case was the United Kingdom Sex Discrimination Act 1975, Stats. U.K. 1975, c. 65. Prior to Sep- tember 1975, postwomen were not permitted to attain permanent status but could work only as temporary employees. After that date this disabili ty was removed. In March 1976, the plaintiff Steel applied for a vacant postal walk. Her application was refused on the ground that she lacked the necessary seniority for the job. The job was given to a man whose total employment was shorter, but who had achieved permanent status earlier than she had. (The plaintiff had been a temporary employee from November 1961 to September 1975.) The [Employment] Appeal Tribunal hear ing the case held, at page 67, that:
There is no doubt that the Sex Discrimination Act 1975 does not operate retrospectively, but some acts of discrimination may be of a continuing nature and it would seem to us to be in accordance with the spirit of the Act if it applied as far as possible to remove the continuing effects of past discrimination.
Also of some assistance is the Manitoba Court of Appeal decision in Province of Manitoba v. Manitoba Human Rights Commission, et al. (1983), 25 Man. R. (2d) 117. That decision dealt with The Human Rights Act of Manitoba, S.M. 1974, c. 65 and the concept of a "continuing contravention" found therein (subsection 19(1)). The complainant alleged that his compulsory retirement at age 65 was a continuing contraven tion because the effects of that Act continued in that he was still being denied employment due to his age. The Court held that compulsory retire ment as of a specific date did not constitute a "continuing contravention". It described a con tinuing contravention, at page 121:
What emerges from all of the decisions is that a continuing violation (or a continuing grievance, discrimination, offence or cause of action) is one that arises from a succession (or repetition) of separate violations (or separate acts, omissions, discriminations, offences or actions) of the same character (or of the same kind). That reasoning, in my view, should apply to the notion of the "continuing contravention" under the Act. To be a "continuing contravention", there must be a succession or repetition of separate acts of discrimination of the same charac ter. There must be present acts of discrimination which could be considered as separate contraventions of the Act, and not merely one act of discrimination which may have continuing effects or consequences.
In my view, continual reliance, in the making of various employment decisions from time to time, on a seniority list which contains a built-in dis criminatory feature, is a succession or repetition of discriminatory acts. It differs from the continuing effects of one discriminatory act (such as compul sory retirement at a specific date), in that new and different types of "damage" accrue to the plaintiff on each occasion (less favourable shift to be worked, earlier placement on temporary lay-off status). In addition, one must keep in mind that the Canadian Human Rights Act proscribes "dis- criminatory practices". (It is not the concept of continuing contravention as found in the Manitoba legislation which is to be interpreted.) A practice is defined in the Compact Version of the Oxford English Dictionary, 1971 ed., as "the habitual doing or carrying on of something", "a habitual way of acting", "the doing of something contin uously or repeatedly". I think the conduct com plained of in this case falls within the concept of a discriminatory practice and therefore the action taken by the Commission to redress that situation cannot be classified as a retrospective application of the Act.
Revision of Seniority List—Interference with Vested Rights?
The plaintiffs second argument is that seniority rights are vested or established rights which are not to be dislodged by new statutory provisions unless Parliament expressly so provides.
First of all, it should be noted that the presump tion that an Act not operate retrospectively and that it not operate so as to interfere with vested rights as two separate and distinct presumptions: see Driedger (supra) particularly at pages 187 and 196. In addition, the presumption of non-interfer ence with vested rights only comes into operation when the statute is ambiguous while the presump tion of non-retrospectivity is a prima facie pre sumption applicable to all statutes unless rebutted.
The Commission argues that the seniority rights in question are not vested but acquire their life at any given time from the then existing clause in the collective agreement; it is argued that seniority
rights are not determined by the collective agree ment in place at the time the employee was hired. Particular reliance is placed on the wording of Article 7.08 of agreement No. 22 (set out above) as support for this argument. That clause states that age will be the deciding factor for employees hired before agreement No. 22 came into force but random lot will be the regime thereafter. It is argued that if the collective agreements were only intended to determine the seniority of those employees hired during the life of the agreement, then it would not have been necessary, in agree ment No. 22, to include reference to the determin ing of seniority on the basis of age for employees hired prior to that agreement.
This is not compelling evidence that the rights are not vested or established rights as that concept is used in the principles of statutory interpretation. It is common ground that the seniority lists estab lished prior to 1960 when age first began to be used as a criteria were not revised in accordance with agreement No. 11 of 1960, even though the seniority clause therein contained no reference to the preservation of the list established under the earlier systems. The list as established up to that point was preserved as a matter of course by the Company and the Union.
In addition, the fact that the clauses of the collective agreement may be changed in the future does not make them any the less established (or acquired, or accrued) rights. Counsel for the Com mission argued that senority ranking of all employees could be changed through a processs of negotiation between the Company and the Union without agreement from the employees. I will deal with this argument in more detail later since it is also relevant to the question of notice. But suffice it to say, I am not at all convinced that such a change would be implemented without the Union at least obtaining a ratification vote from its mem bers. Evidence and argument respecting the au thority of the Union was less than satisfactory. The Union chose not to appear, even though named as a party defendant.
It is trite to say that what constitutes a vested right (sometimes called an accrued right, some times an acquired right, sometimes an existing
right) is difficult of definition. I note that in Craies on Statute Law (7th ed., 1971) at page 399, the following definition, culled from Starey v. Graham, [1899] 1 Q.B. 406 at page 411, is found:
... some specific right which in one way or another has been acquired by an individual and which some persons have got and others have not.
With respect to the nature of seniority rights, this issue was dealt with by the British Columbia Labour Relations Board in B.C. Distillery Co. Ltd. and Group of Seagrams Employees and Distillery, Brewery, Winery, Soft Drink and Allied Workers Union, Local 604, [1978] 1 Canadian LRBR 375, at pages 381-382:
The point of seniority principle is to establish a simple, precise, and objective standard for selecting from among the employees seeking the same job; and thus to reduce supervisory arbitrariness and personal favouritism in these decisions, with the damaging impact that can have on employee morale.... These issues do produce careful bargaining by unions and employers, and the seniority clauses in sophisticated relation ships may take pages and pages in the collective agreement. Legally speaking, the seniority rights of the employees rest on this contract which the Union has negotiated. These rights would terminate if the agreement were cancelled. And for that reason, a union may claim the same broad authority to revise the terms of this seniority provision as it enjoys in the negotia tion of the general run of economic benefits.
But that claim rests on a superficial view of the nature of seniority as a social institution. The fact of the matter is that existing seniority clauses take on a much more compelling hue than other contract clauses. This is a good statement for the reasons why:
... Seniority enables an employee to acquire valuable inter ests by his work, to capitalize his labor and obtain something more than a day's wages for his continued production. When seniority determines promotion rights, it gives the employee a claim to better jobs when they become available; when seniority determines the order of layoff, it provides the employee a measure of insurance against unemployment. Seniority does not guarantee that vacancies in higher rated jobs will be filled or that any jobs will be available; but by giving the senior employee priority when a choice is made as to who will be promoted or who will remain employed, seniority gives an employee an interest of substantial practi cal value. As Professor Aaron has pointed out, 'more than any other provision of the collective agreement ... seniority affects the economic security of the individual covered by its terms,' and it has understandably come to be viewed as one of the most highly prized possessions of any employee. Seniority may be the most valuable capital asset of an employee of long service.
Summers and Love, "Work Sharing as an Alternative to Layoffs by Seniority", (1976), 124 U. of Pa. L.R. 893, at p. 902.
Employees in the plant know their position on the seniority list. They believe that they have earned that spot by their long service. They have firm expectations that that position will remain unaltered. Suppose then that the union and the employ er negotiate a change in that clause, one which has the effect of re-shuffling positions on the seniority list. How does the adversely affected employee naturally perceive that contract change? He believes that the parties have simply taken a valuable asset belonging to him and given it to another employee ....
And for these pragmatic reasons, the law simply cannot take the attitude that because the union and the employer freely negotiated the original seniority clauses, they are also able to change that existing clause at will.
In my view, seniority rights partake of enough of a quality of vested rights to fall within the princi ple of statutory interpretation which provides that when a statute is ambiguous as to its intended operation, it should be interpreted so as not to dislodge such rights.
The Commission itself, on several occasions, has recognized that alterations to seniority ranking in order to remedy a complaint can prejudice the rights of third parties. In Labelle et al. v. Air Canada (1982), 4 C.H.R.R. D/1311, Decision 266, the Human Rights Tribunal refused to accord the complainants seniority ranking equal to what they would have acquired had no discrimination taken place. The plaintiffs filed complaints with the Commission alleging they were refused employ ment with Air Canada on the ground of a physical handicap which was not a bona fide occupational requirement. The Human Rights Tribunal found the complaint justified, ordered monetary compen sation paid to the complainants for lost wages, but on the subject of seniority, had this to say [at page D/1313]:
The Tribunal recognizes the merit in issuing an order which would place the complainant in the position which he would have been in had it not been for the discriminatory practice. Such an order must, however, affect the complainant and respondent, not uninvolved third parties. We therefore accept the submissions of Mr. Marchand and do not make any order as to seniority.
In the present case, the Investigators' Report referred as well to the disposition of two other complaints (Roberge and Bennie) disposed of by the Commission, similar to that of the defendant Bianca Perruzza. That report reads, in part, as follows:
Company's position
The Commission had approved settlement of an earlier similar complaint ("Roberge v Canadian Pacific Air" [sic]) in which retroactive revision to the relevant seniority list was not made.
Investigation Report Conclusions
The Roberge complaint should not be construed as limiting the scope of settlement in the present case. In fact, the Roberge case established the important principle that the Commission was willing to intervene in revising seniority (Roberge's seniori ty in relation to others hired on the same day was revised, albeit not on a random basis) for purposes of obtaining an equitable settlement.
It should be noted that the Commission decided that an earlier complaint similar to this case (Bennie vs Canadian Pacific Air [sic] and Bennie vs B.R.A.C.—decision rendered September, 1983) was substantiated and redressed, even though the remedial actions by the respondents did not include retroactive change in seniority for the complainant or for the other employees on the list ... It should be noted that the Bennie case cited the Labelle and Cleaveau [sic] vs Air Canada Tribunal decision as an additional reason in support of its recommendation. The Tribunal considered ordering retroactive seniority as one of the remedies available to it to rectify the discriminatory parties [sic], but decided against it on the basis that such an order would affect "uninvolved third parties". It is submitted that the present case is different from the one before the Tribunal, in that seniority per se was not the issue com plained of in Labelle and Cleaveau [sic]. In the present case, seniority is the central issue, rather than being an ancillary remedy.
The fact that the Commission, on previous simi lar occasions has refused to order a reordering of seniority lists does not mean it does not have authority to do so. And, on reading the Canadian Human Rights Act, I cannot conclude that it is so ambiguous on this point as to allow room for the operation of the non-interference with vested rights principle of statutory construction. The stat ute seems to clearly contemplate that the Commis sion should have this authority.
Subsection 42(2) of the Act provides that the Human Rights Tribunal may not, in attempting to reverse or compensate a complainant for a dis criminatory practice, make an order
42. (2) ...
(a) requiring the removal of an individual from a position if that individual accepted employment in that position in good faith; or
(b) requiring the expulsion of an occupant from any premises or accommodation, if that occupant obtained such premises or accommodation in good faith.
Section 16 provides:
16. A provision of a pension or insurance fund or plan that preserves rights acquired prior to the commencement of this Part or that preserves pension or other benefits accrued prior to that time does not constitute the basis for a complaint under Part III that an employer is engaging or has engaged in a discriminatory practice.
See also sections 32(7), 48 and 65. The inclusion of these sections specifically prohibiting interfer ence with certain types of vested rights indicates that Parliament intended to leave to the Human Rights Commission a discretion in dealing with other non-exempt rights.
It is interesting to note that the British Columbia Human Rights Code, R.S.B.C. 1979, c. 186, subsection 8(3) specifically exempts from its operation schemes based on seniority. No such specific exclusion is found in the federal Act.
I conclude that the plaintiff's argument on this point cannot prevail.
Notice to Affected Third Parties?
The question remains whether the Commission can approve a settlement such as that contemplat ed in this case without giving notice and an oppor tunity to be heard to those third parties whose seniority rights would be affected by such a reord ering. It should be noted that once a settlement is approved by the Commission, section 46 of the Act makes non-compliance with the terms of the settle ment a criminal offence:
46. (1) Every person is guilty of an offence who
(a) fails to comply with the terms of any settlement of a complaint approved and certified under section 38;
I did not understand counsel to argue that the Commission was not subject to the usual rules of natural justice and administrative fairness as they
have been set out in cases such as Nicholson v. Haldimand-Norfolk Regional Board of Commis sioners of Police, [ 1979] 1 S.C.R. 311. Of particu lar significance is the Federal Court of Appeal decision- in McCarthy v. Attorney General of Canada, [1981] 1 F.C. 309, where an employee was held to be entitled to notice and an opportu nity to be heard before her name was removed from the "eligible for promotion list". I understood the defendants' argument to be, however, that in this case giving notice to the Union, and involving the Union in the negotiations, was sufficient. It was argued that the Company and the Union could have reached the settlement reordering the seniority list without any involvement of the Com mission and thus could have altered plaintiff's rights without notice to her and without her consent.
This argument proceeds first of all on the basis that Article 7.08 in collective agreement No. 22 was void as being contrary to public policy. Refer ence was made to the Supreme Court decision in Ontario Human Rights Commission et al. v. Bor ough of Etobicoke, [1982] 1 S.C.R. 202. In that case the Court held a compulsory retirement clause in a collective agreement void as contrary to public policy (at page 213). It offended The Ontario Human Rights Code, R.S.O. 1970, c. 318. I note The Ontario Human Rights Code is differ ent from the Canadian Human Rights Act in that it creates absolute offences while the federal Act does not. I would not, however, want to say that the difference made contracts subject to the feder al Act any less void as contrary to public policy. However, if the clause in question is void, I think it reasonable to characterize what in fact happened thereafter as the institution of a practice by the Company and the Union (even if not pursuant to a valid term of the collective agreement) of the allocation of seniority on the basis of the pre-exist ing rules. Thus, it is not enough to say, as the Commission seems to argue, that there was, after the coming into force of the Canadian Human Rights Act, a void and that the seniority lists should from that time be treated as non-existent.
The decision in Re Bakery and Confectionery Workers' Int'l Union, Local 322, and Canada Bread Co. Ltd. (1970), 22 L.A.C. 98 (Ont. L.R.B.), was relied upon for the proposition that a company and a union can amend a collective agreement by letters of understanding exchanged during the course of the agreement (the letters in that case were designed to clear up an ambiguous provision of the agreement). The Ontario Labour Relations Board decision in Hawkesbury & Dis trict General Hospital and CUPE, Locals 1967 and 2474; Re Renee Guerin et al.; Re CUPE; Re Nicole Drouin et al., [1984] OLRB Rep. February 259 was relied upon for the proposition that a union can settle a legal proceeding and thereby bind its members. I do not doubt that in some circumstances unions may sign settlements of legal claims on behalf of their membership. I do not doubt that a letter of understanding between a union and a company may clarify an ambiguous provision of a collective agreement and be classi fied as an amendment to a collective agreement. But, it seems to me too broad a claim to assert that an application of those principles leads to the conclusion that the Company and the Union in the present case could retroactively alter the seniority lists without involving the employees in the process.
The Ontario Labour Relations Board decision in Magold et al. and Int'l Brotherhood of Boiler- makers, Iron Ship Builders, Blacksmiths, Forgers and Helpers et al., [1976] 1 Canadian LRBR 392, was relied on for the proposition that formal ratifi cation of a collective agreement is not needed to make a collective agreement binding on its mem bers. And the Supreme Court decision in McGavin Toastmaster Ltd. v. Ainscough, [1976] 1 S.C.R. 718 was relied upon for the proposition that an employee covered by a collective agreement no longer has individual bargaining rights or con tracts of employment with his or her employer.
In response to the Commission's reference to these cases, counsel for the plaintiff argued that whatever the situation in those cases, the defend ant Union in this case had no authority to enter into an agreement to alter the seniority rights of the employees without at least a ratification vote. He contended that it was the practice of the Union
always to submit prospective collective agreements to ratification by the membership—this fact was not set out in the agreed statement of facts filed by the parties. Counsel for the Commission, on the other hand, relied on the fact that the Union's constitution contains no express requirement that a ratification vote be held before a collective agree ment becomes binding. I have some difficulty in assessing these arguments. As noted, the Union chose not to be represented in these proceedings, and it has been left to the Commission to argue the rights and obligations of the Union. In any event, I would not be prepared to conclude on the basis solely of the absence of a written requirement in the Union's constitution that a ratification vote was unnecessary. That is too slim evidence in the circumstances of this case.
Even if the Union could bind its members to such an agreement, however, I am not convinced that this answers the question as to what obliga tions rest on the Commission with respect to giving notice to third parties. (I would note in passing that the Commission made the curious argument that the rights of the plaintiff Julie Dalton were not affected in this case, only the rights of the defendant Bianca Perruzza were altered by the settlement.) It seems to me that the involvement of the Commission in the process of negotiation and settlement with its persuasive powers changes the whole nature of what might otherwise be strictly a negotiation process between the Company and the Union. I would note that a reordering of the seniority list for all employees was on the agenda for discussion by the Company and the Union in the negotiations which led up to the October, 1982 collective agreement. It was not agreed to.
It seems to me the involvement of the Commis sion, whose approval of settlements turns them into instruments, the contravention of which is a criminal offence, makes the procedure of negotia tion and settlement under its tutelage something qualitatively different from normal negotiations at the bargaining table between an employer and a union. I do not think it sufficient, then, to point to
the relationship of the Company, the Union and the employees inter se as an answer to the Com mission's obligation to give notice to affected third parties.
If the Commission's position is right, then one member of the Union, the one who files a com plaint, (in this case Bianca Perruzza) is entitled to make representations respecting her rights outside the umbrella of the Union, but other members of the Union, (in this case the plaintiff Julie Dalton) whose rights are equally affected by a Commission decision, are not entitled to do so. A strange result to say the least.
The Human Rights Commission has a flexible procedure. Providing an opportunity to be heard to third parties affected by a decision such as the present does not mean there is an obligation to listen to each employee individually. But some mechanism must be devised for allowing their joint interests to be put forward.
Text of the Settlement Approved by the Commis sion
It was assumed by all parties that the settlement approved by the Commission requires, at least, a reordering of all the seniority lists from 1960 so that among full-time employees hired as such on the same day seniority is allocated on a random basis.
The reordered list, which is in evidence, and which the plaintiff attacks, goes even further and the Commission admits that in certain aspects it goes beyond the Commission's jurisdiction. The Commission notes that the list is a provisional one; consultations with the Commission concerning its required content were not completed when the plaintiff instituted her action.
The reordered list goes back to 1950. The Com mission admits that this is in error and the list should be revised so as not to go back beyond 1960. Prior to 1960, factors other than age were used to determine the seniority of persons hired on the same day: the hour of the day they began work; the marks they received in the tests adminis tered at the end of their training programs.
The list has also been reordered in so far as it relates to the seniority of some employees who obtained full-time employment with CP Air by beginning as part-time employees. The company's policy is to offer openings for full-time employ ment to part-time employees before seeking to fill the positions from outside the Company. These positions were offered to part-time employees in order of their seniority. Thus, as among part-time employees hired as such on the same day, positions were offered first to the oldest person.
A part-time employee who accepted a full-time position was integrated into the seniority list of full-time employees by the selection of an artificial starting date. It is not necessary to describe the method of calculation used. Suffice it to say, be tween two part-time employees hired as such on the same day, one would end up with seniority as a full-time employee ahead of the other merely because of the earlier selection into the ranks of full-time employment on the basis of age.
Before me, the Commission took the position that this reordering of the seniority list was not required by the settlement, that it would constitute a retrospective application of the law, which the Commission was not entitled to make. It stated that a revision of the provisional list would be undertaken to leave the seniority of the once part- time employees as originally established.
Since the Commission was willing to make such a concession, the plaintiff asked that any order I might make at least strike down that aspect of the list. Because of the conclusion I have come to on the question of notice, the whole list will, of course, be declared invalid, but I cannot forbear from saying that I have considerable difficulty with the Commission's position. I can find little difference between the situation of the full-time employees and that of the once part-time employees. In both cases, persons obtained a position on the seniority list in preference to their co-workers because of their age. In both cases that preference once given continues to give the employees advantages in the context of their present employment. The only difference is that in one case the employees were all hired on the same day as full-time employees while in the other the employees were all hired on
the same day as part-time employees. In the case of the part-time employees, it is true the artificial starting dates as full-time employees attributed to them is likely to be different, one from another, while in the case of the full-time employees the date will be the same. But I do not see this as a significant difference since it is ultimately the seniority ranking which is important, not the start ing date, artificially attributed or not.
In any event, I have an even more fundamental problem with the text of settlement agreed upon. It requires
... a revised seniority list based on a retroactive application of Article 7.08 contained in Agreement No. 22 ....
Article 7.08 requires that age be used for estab lishing seniority for employees hired prior to the effective date of agreement No. 22 (October 31, 1982) and that random selection be used thereaf ter. Thus, a retroactive application of this article would change nothing since age was used prior to October 31, 1982 in any event. This was clearly not the intention of the parties to the agreement but it is the result a literal reading of the words demands. Thus none of the reordering of the seni ority list presently being done is required by the terms of the settlement.
This argument did not form part of the plain tiff's case and accordingly, I have considered the extent to which it would be appropriate for me to interpret the settlement in accordance with the intention of the parties, even though the strict wording does not convey that intention. I am particularly mindful of the fact that the literal wording of the settlement makes it totally ineffec tive to accomplish anything—indeed it is meaning less. Nevertheless, it seems to me that going beyond the literal wording, or ignoring this funda mental defence even though not pleaded by the parties, is inappropriate. Section 46 of the Canadi- an Human Rights Act makes it a criminal offence to ignore the terms of a settlement which has been approved by the Commission. This, it seems to me, demands precision in the wording of the settlement and a strict adherence to its literal text.
Accordingly, an order will issue prohibiting the Company and the Union from implementing the revised seniority list in so far as that action is being taken pursuant to the settlement approved by the Human Rights Commission.
Also a declaration will issue to the effect that the wording of the settlement does not authorize the reordering of seniority as evidenced in the revised seniority list and that to the extent that the settlement was intended to alter the seniority rights of the plaintiff Julie Dalton, it is invalid as having been made without due regard for the rules of natural justice.
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