COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:	International Forest Products Ltd. v. Sandhu,
	2008 BCCA 204

Date: 20080509

Docket: CA034829

Between:

International Forest Products Ltd.

Appellant

(Petitioner)

And

Baljinder Sandhu, Basi Mehar, Beant Dhillon, Bhagwant Parhar, Chuhar Bassi, Darshan Grewal, Edward McGee, Gurdip Khathar, Jagdish Pallan, Kanwar Gill, Kewal Mangat, Kuldip Kandola, Kulwant Mali, Nachhaltor Dhaliwal, Rachpal Sahota, Resham Singh, Sukhip Sindhu and Dai Tsui

Respondents

(Respondents)

And

The British Columbia Human Rights Tribunal

Respondent

Before:	The Honourable Madam Justice Saunders
	The Honourable Mr. Justice Low
	The Honourable Mr. Justice Lowry
D.J. Jordan Q.C.		Counsel for the Appellant
E.C. McCabe and B. Savage		Counsel for the Respondents
D. Paluck		Counsel for the Respondent, B.C. Human Rights Tribunal
Place and Date of Hearing:		Vancouver, British Columbia
9 November 2007
Place and Date of Judgment:		Vancouver, British Columbia
9 May 2008
Written Reasons by:
The Honourable Mr. Justice Low
Concurred in by:
The Honourable Madam Justice Saunders The Honourable Mr. Justice Lowry

Reasons for Judgment of the Honourable Mr. Justice Low:

[1]                This is an appeal of an order dismissing a petition brought by the appellant, International Forest Products Ltd. ("Interfor"), for judicial review of a ruling made by a single-member tribunal under the Human Rights Code, R.S.B.C. 1996, c. 210 (the “Code”). 

[2]                The respondents are employees or former employees of Interfor who alleged that they had been discriminated against by Interfor in an agreement made between Interfor and the respondents’ union.  The agreement concerned the granting of severance pay to certain union employees of Interfor who were affected by a partial closure of Interfor’s lumber plant at Fraser Mills in 2001.

[3]                When the impugned agreement was made the respondents were not working because each of them was on either workers’ compensation, short-term disability or long-term disability.  In other words, each was receiving (before and after the partial closure) an income benefit, in place of wages, to which he was entitled as a condition of employment. 

[4]                The agreement between Interfor and the union, in its entirety, reads:

LETTER OF UNDERSTANDING

BETWEEN:

INTERNATIONAL FOREST PRODUCTS LTD.

(the "Company")

AND:

IWA-CANADA, LOCAL 1-3567

(the "Union")

INTERNATIONAL FOREST PRODUCTS LTD.

FRASER MILLS DIVISION

VOLUNTARY SEVERANCE PAY OFFER

WHEREAS, with the Company’s intention to operate the Planer and Kilns at Fraser Mills Division, outlined in the August 13, 2001 letter to the employees, the downsizing at Fraser Mills Division is not in the Company’s view a permanent plant closure.

WHEREAS, even though in the Company’s view there is no collective agreement or other legal obligation to offer severance pay, the Company has voluntarily decided to offer severance pay, on a without prejudice and non-precedential basis as, as set out below.  The voluntary severance pay will be based on seven (7) days’ pay for each year of continuous service and thereafter in increments of completed months of service with Fraser Mills Division.  The severance pay will be calculated to the date the employee elects the payment, or October 31, 2001, whichever is sooner.

WHEREAS, after October 31, 2001, an active employee is an employee that has the seniority, competency considered, to hold a job in the Kilns or Planer, based on a 2 shift operation, which would include an adequate number of employees for vacancy coverage.

THE PARTIES AGREE AS FOLLOWS:

1.         Active employees who can exercise their seniority to retain active employment at Fraser Mills Division:

(a)        Senior active employees have the right to exercise their seniority, competency considered, to continue working at Fraser Mills Division in either the Planer or Kilns.  If the employee makes this choice, he/she will not be eligible for the Company’s voluntary severance pay offer, unless the employee does not obtain active employment because the second shift on the Planer and Kilns does not commence in the one year period from October 31, 2001 to October 31, 2002, or when their seniority retention expires, whichever is sooner.  In that circumstance, an employee within category 1(a) will be eligible for the Company’s voluntary severance pay offer in this Letter of Understanding.  The employee will have one (1) week from October 31, 2002 to accept the Company’s voluntary severance pay offer; and

(b)        Senior active employees may decline to exercise their seniority rights at Fraser Mills Division in exchange for the Company’s voluntary severance pay offer.  If an employee chooses this option, the employee will have voluntarily terminated his/her employment with the Company.  The employee will thereby have voluntarily terminated all of his/her rights under the Coast Master Agreement, including preferential hiring rights.

2.         Active employees who have insufficient seniority, competency considered, to retain active employment at Fraser Mills Division:

Active employees who have insufficient seniority, competency considered, to retain active employment at Fraser Mills Division will be entitled to the Company’s voluntary severance pay offer.  If the employee accepts that severance pay offer, he/she will retain Divisional seniority solely for the purpose of recall to active employment at the Division.  For the purpose of clarity, but without limiting the generality of the foregoing, that sole seniority right would not give rise to any further severance payment under Article XXXIII of the Coast Master Agreement or in any other manner.  If the employee is recalled to work at the Company, any future severance entitlement with the Company would be calculated from the date that the employee was recalled for work.

The employee will also retain preferential hiring rights under the collective agreement.

3.         Non-active employees (WCB, BC Life, LTD):

Non-active employees who return to active employment will have the same options as outlined above.  An active employee who is bumped from active employment as a result of the return to active employment of a formerly non-active employee, will be entitled to the options outlined above.

The Local Union 1-3567 agrees to withdraw the current contracting out grievance with respect to Fraser Mills and agrees not to file any grievances with respect to the closing of the primary manufacturing facilities at Fraser Mills.  This does not prejudice the rights the employees might have under the Coast Master Agreement with respect to the continuing planer and kiln operations at Fraser Mills.

This agreement is subject to ratification by the employees at Fraser Mills Division.

DATED this 15th day of October, 2001.

 [Emphasis added.]

[5]                The Coast Master Agreement referred to in para. 4 is the collective labour contract between Interfor and the union that was in force at the time. 

[6]                The following features of the severance pay agreement are important to the determination of this appeal:

(1)        The severance pay was seven days’ wages for each year of employment;

(2)        Employees with sufficient seniority could opt for jobs in other parts of Interfor’s operation at Fraser Mills or could take the severance pay and cease their employment;

(3)        Employees without sufficient seniority to opt for other jobs would get severance pay and would also be entitled to re-employment in the future in certain circumstances;

(4)        Employees not working due to a disability (on workers’ compensation or short-term or long-term disability insurance) were entitled to opt for other jobs or receive severance pay on the same basis as the active employees if they became fit for work in the future. 

[7]                On 26 January 2004 and 8 March 2005, the respondents filed complaints of discrimination under the Code.  There are 18 respondents.  Seventeen of them were included in the first complaint.  Under s. 22 of the Code, the complaints should have been filed within six months of the alleged contravention.  In April and June 2005, two separate adjudicators gave written rulings exercising the discretion found in s. 22(3) of the Code to accept both of the complaints for hearing on the merits despite their being out of time.  Interfor did not seek a review of either of those decisions. 

[8]                There was a later consent order that the two complaints be heard together.   

[9]                The parties presented a statement of agreed facts to the tribunal member charged with hearing the complaint.  There was no other evidence before the tribunal member.  The statement reads: 

Statement of Agreed to Facts

I.          The Respondent operated a Sawmill at Fraser Mills in Coquitlam, British Columbia. Production at the Sawmill was curtailed on July 20, 2001.  In August 2001, the Respondent decided to cease operation of the Sawmill.  The Respondent decided to continue to operate the planer mill and kilns at Fraser Mills on a two-shift basis.

2.         The Respondent required approximately 60-70 employees to operate the planer and kilns on a two-shift basis.  The determination as to which employees would remain on the active seniority list and be eligible for the remaining positions was based on seniority, competence considered as set out in the collective agreement.

3.         The employees at the Fraser Mills Division are subject to a collective agreement negotiated between the Respondent and the Union.  The collective agreement provides severance payments to all employees in the event of a full closure of the Fraser Mills Division.  There is no provision for severance payments for employees in the event of a partial closure or curtailment.

4.         The Respondent and the Union negotiated a voluntary severance agreement (“Agreement”) to provide severance pay to those employees who would lose their employment due to the partial closure. A copy of the Agreement is attached as Appendix ‘A’.

5.         The Agreement distinguished between active and non-active employees. Non-active employees were those employees absent from work and in receipt of WCB, BC Life and/or LTD benefits.

6.         Active employees with insufficient seniority to retain employment were entitled to the severance payment.  These employees could also retain divisional seniority for the sole purpose of re-employment at the Division.  The Agreement also provided that non-active employees who return to active employment and would then be subject to loss of employment as a result of the partial closure would have the same options as active employees.

7.         None of the Complainants were eligible for, or received, severance pay pursuant to the Agreement as they were non- active employees either in receipt of long term disability benefits or workers’ compensation benefits.

8.         The Complainants each suffered from some form of disability.  The employment of the majority of the Complainants has since been terminated by the Respondent on the basis of non-acceptable absenteeism.  At the time of the terminations, the Complainants were either unable to return to work or it was not reasonably likely that they would return to work in the foreseeable future.  The Complainants do not allege that the terminations constituted a breach of the Human Rights Code.

9.         Three of the Complainants remained on long term disability benefits until they retired.

10.       One of the Complainants, Mr. Darsham Grewal, remains an employee in receipt of long term disability benefits.

11.       The following chart sets out the relevant dates with respect to each of the Complainants.

[Emphasis added.]

[10]            As filed with the British Columbia Human Rights Tribunal, the specific complaint of the respondents was as follows: “By refusing to offer the severance payment to those employees off work due to disability [Interfor] has discriminated against the Complainants in regards to the terms and conditions of employment on the basis of physical disability.”  This has reference to s. 13(1) of the Code:

A person must not

(a)        refuse to employ or refuse to continue to employ a person, or

(b)        discriminate against a person regarding employment or any term or condition of employment

because of the race, colour, ancestry, place of origin, political belief, religion, marital status, family status, physical or mental disability, sex, sexual orientation or age of that person or because that person has been convicted of a criminal or summary conviction offence that is unrelated to the employment or to the intended employment of that person.

[Emphasis added.]

[11]            M. Tyshynski, a member of the British Columbia Human Rights Tribunal, heard the complaints on 18 January 2006.  She rendered a written decision on 11 April 2006.  No witnesses were called at the hearing.  The parties relied on the agreed statement of facts and the severance pay agreement.  I understand that the Coast Master Agreement was not made part of the record, although it was before the court at the ensuing judicial review. 

[12]            The question of remedy was left for another day.  That issue has not yet been determined.

[13]            In her decision, the tribunal member noted that the complainants had to establish that they belonged to a protected group (disabled persons), that they had been adversely treated by Interfor, and that the prohibited ground of discrimination was a factor in the adverse treatment.  If the complainants established these matters, the onus would then shift to Interfor to show that membership in the protected group was not a factor in the unequal treatment.  Interfor had a complete defence if it showed a bona fide operational requirement that justified the discriminatory treatment of the complainants.

[14]            The tribunal member found the ground of disability to be expressly admitted in the agreed facts.  There was also no dispute that the severance offer was a benefit of employment. 

[15]            The tribunal member then turned to the law to determine the purpose of severance pay and relied heavily on Ontario Nurses’ Assn. v. Mount Sinai Hospital, (2004) 69 O.R. (3d) 267(Ontario Nurses’), a case decided under the Canadian Charter of Rights and Freedoms.  Based on that decision and other authorities, the tribunal member concluded that, absent a definition of the term in the agreement under consideration, the parties intended “severance pay” to mean “an earned benefit of employment which acknowledged length of service”.  I do not consider the definition of severance pay to be important because this case is more about reasonable entitlement to such pay than about what it represents.  Employees who retire or whose employment is terminated for non-acceptable absenteeism, absent a contractual or statutory entitlement, do not receive severance pay.      

[16]            The tribunal member found adverse treatment because only those employees who were absent from their jobs due to a disability were denied the option of receiving severance.  She found that the partial closure had an impact on the complainants for four reasons:

(1)        those complainants without seniority or the required level of competency lost all possibility of future employment with Interfor;

(2)        the complainants faced reduced opportunities for accommodation by Interfor that might have allowed them to return to work;

(3)        under the agreement between Interfor and the union, so long as they remained disabled, the complainants lost the investment of their able-bodied years with Interfor; and

(4)        the term “active employment”, as used in the agreement, was inherently discriminatory and would impact on the dignity of the complainants.

[17]            The tribunal member concluded that “all the indicia of discrimination are present in this case.  In order for an employee to enjoy severance, a benefit tied to years of service to an employer, that employee was required to be able-bodied”.  The member undertook the analysis in Law v. Canada (Minister of Employment and Immigration), [1999] 1 S.C.R. 497, 170 D.L.R. (4^th) 1 and found that discrimination had been established, while acknowledging that it was controversial whether the Law analysis was applicable to human rights (as opposed to Charter) jurisprudence.

[18]            Cole J. heard Interfor’s petition for judicial review in October and November 2006.  He gave written reasons dismissing the petition on 13 February 2007.  Those reasons can be found at 2007 BCSC 201.

[19]            Cole J. dealt with several specific points raised by Interfor at the hearing of the judicial review.  He held that the tribunal member did not err in finding that the purpose of the agreement between Interfor and the union was broader than that argued by Interfor, namely, that the purpose was to simply provide some compensation to those who lost their employment due to the partial closure.  He said that the evidence supported the conclusion of the tribunal member that the purpose of the agreement was to give active employees an earned benefit. 

[20]            The judge then found that the tribunal member made reasonable findings on the evidence with respect to the impact of the denial of severance on the complainants.  The finding that, due to the partial closure, all complainants without seniority and sufficient competency lost the possibility of future employment with Interfor was reasonable.  It was reasonable for the tribunal member to infer that the partial closure reduced Interfor’s capacity to accommodate the complainants because less work would be available.  It was also reasonable for the tribunal member to conclude that, having regard to the purpose of severance pay as stated in the authorities and not otherwise defined in the agreement, the complainants lost the investment of their able-bodied years of employment.  It was a reasonable conclusion that an employee had to be able-bodied to receive severance.  The judge also held that the tribunal member was correct in finding a prima facie case of discrimination and correctly applied the Ontario Nurses’ case.

[21]            Interfor contends:  (1) that the reviewing judge erred in finding that the tribunal was not required to adopt the purpose of the agreement stated in it, and in concluding that the tribunal did not err in finding that the purpose of the agreement was to provide an earned benefit of employment; and (2) that the judge erred in concluding that the tribunal was correct in finding that the complainants had presented a prima facie case of discrimination.

[22]            I will not dwell on the first ground of appeal because it is my opinion that this appeal must succeed on the second ground.  The respondents did not present a prima facie case of discrimination under the Code.

[23]            Neither the tribunal member nor the reviewing judge referred to Law Society of  British Columbia v. Andrews, [1989] 1 S.C.R. 143.  In that case, the court held that a statutory provision requiring Canadian citizenship for admission to the practice of law in this province infringed the complainant’s equality rights under s. 15(1) of the Charter without justification under s. 1.  The court discussed the interaction between equality and discrimination.  At p. 164, McIntyre J. stated: “It must be recognized … that every difference in treatment between individuals under the law will not necessarily result in inequality and, as well, that identical treatment may frequently produce inequality”.

[24]            McIntyre J., after referring to various attempts to define “discrimination”, wrote at p. 174: 

[…] discrimination may be described as a distinction, whether intentional or not but based on grounds relating to personal characteristics of the individual or group, which has the effect of imposing burdens, obligations, or disadvantages on such individual or group not imposed upon others, or which withholds or limits access to opportunities, benefits, and advantages available to other members of society.  Distinctions based on personal characteristics attributed to an individual solely on the basis of association with a group will rarely escape the charge of discrimination, while those based on an individual's merits and capacities will rarely be so classed.

And at p. 180 he said this: 

[…] The words 'without discrimination' require more than a mere finding of distinction between the treatment of groups or individuals.  Those words are a form of qualifier built into s. 15 itself and limit those distinctions which are forbidden by the section to those which involve prejudice or disadvantage.

[25]            The tribunal member and the reviewing judge did not have the advantage of considering the concurring reasons of Abella J. in McGill University Health Centre (Montreal General Hospital) v. Syndicat des employes de l’Hopital general de Montreal, [2007] 1 S.C.R. 161, a case not too far removed from the present case.   There the court was concerned with the equality provisions in human rights legislation in Quebec in a labour context.  The particular issue involved accommodation by the employer of an employee who had been off work for a considerable period of time because of a nervous breakdown and, latterly, because of an automobile accident.   Abella J., on behalf of herself and two other members of the court, described the issue thus: 

¶44      The central issue is whether Ms. Brady has established prima facie discrimination, shifting the onus to the employer to justify its workplace standard or conduct. I accept that a collective agreement does not necessarily immunize an employer from a transcendent duty not to discriminate (see Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324, [2003] 2 S.C.R.157, 2003 SCC 42), and that this may involve accommodating an employee to the point where it would impose undue hardship on the employer (British Columbia (Public Service Employee Relations Commission) v. BCGSEU, [1999] 3 S.C.R. 3 ("Meiorin")). But this is different from creating a legal paradigm that even if the employer's conduct is not discriminatory, there is a legal duty to justify all distinctions.

[26]            After stating the definition of discrimination in Andrews as set out above, she wrote:

¶48      At the heart of these definitions is the understanding that a workplace practice, standard, or requirement cannot disadvantage an individual by attributing stereotypical or arbitrary characteristics.  The goal of preventing discriminatory barriers is inclusion.  It is achieved by preventing the exclusion of individuals from opportunities and amenities that are based not on their actual abilities, but on attributed ones.  The essence of discrimination is in the arbitrariness of its negative impact, that is, the arbitrariness of the barriers imposed, whether intentionally or unwittingly.

¶49      What flows from this is that there is a difference between discrimination and a distinction.  Not every distinction is discriminatory. It is not enough to impugn an employer's conduct on the basis that what was done had a negative impact on an individual in a protected group.  Such membership alone does not, without more, guarantee access to a human rights remedy.  It is the link between that group membership and the arbitrariness of the disadvantaging criterion or conduct, either on its face or in its impact, that triggers the possibility of a remedy.  And it is the claimant who bears this threshold burden.

[Emphasis added.]

[27]            In McGill, Deschamps J., for the majority, focussed on the accommodation issue after determining that all absentee termination clauses in labour contracts are presumptively discriminatory.  That, it seems to me, is another way of saying that a prima facie case of discrimination had been established.  Abella J. disagreed with that approach on the facts and applied Andrews to determine that a prima facie case of discrimination had not been made out.  There is no suggestion that the majority disagreed with the law as stated by Abella J., arising out of Andrews and to be applied where, as in the present case, discrimination is not to be presumed.  

[28]            In my opinion, many of the inferences drawn by the tribunal member are not reasonably supported by the evidence and ignore the essential terms of the agreement between Interfor and the union.  But I do not find it necessary to go into that in any depth because of an important finding made by the reviewing judge.  In para. 31 of his reasons he said the following: 

The Tribunal stated in para. 55 that the use of the term “active employment” in the Agreement was inherently discriminatory and would impact on the dignity of the complainants.  [Interfor] argues that there is no rational, factual basis on which the Tribunal could reach that conclusion.  I agree with [Interfor] that this is an unreasonable finding made without evidence.  I am satisfied that, on a review of the terminology used in the Agreed Facts and the Agreement, the words “active employment” could not be reasonably construed to be inherently discriminatory. 

[29]            I agree with that finding.  The distinction between active and non-active employees is not inherently discriminatory.  However, I do not agree with what the reviewing judge said in the balance of the paragraph: 

However, this error is insignificant.  The findings with respect to the term “active employment” consist of only two sentences which are part of a multifaceted response to a particular argument of [Interfor].  That argument still fails if the term “active employment” is not inherently discriminatory.

[30]            The reviewing judge erred in finding that the tribunal member’s error was insignificant.  In my opinion, the error went to the heart of the issue as to whether the respondents had presented a prima facie case of discrimination.  It emphasizes the failure of the tribunal member to apply Andrews.  A multifaceted response was not needed in the circumstances.   

[31]            In my opinion, both the tribunal member and the chambers judge skirted the critical fact in this case – that the respondents were not at all affected by the partial closure.  After the closure occurred, each of the respondents (unlike those among their fellow employees who did not get replacement jobs) continued to be in the employ of Interfor while receiving statutory workers’ compensation or contractual disability benefits.  Had they become able to return to work, they would have either continued to work for Interfor by obtaining a replacement job or they would have received severance pay in accordance with the terms of the agreement.  However, the termination of their employment was a product of the terms of the collective agreement – retirement or non-acceptable absenteeism.  The respondents attacked neither of those contractual provisions under the Code. 

[32]            Each of the respondents would have left his employment with Interfor on the date he did, and for the reason he did, if there had been no partial closure.  The purpose of the agreement between Interfor and the union was, as stated in para. 4 of the statement of agreed facts, “to provide severance pay to those employees who would lose their employment due to the partial closure” (my emphasis).  None of the respondents lost his employment due to the partial closure.  After that event, each of them maintained his status as an employee of Interfor on entitled leave from the job.  A subsequent event entirely unrelated to the partial closure and, as I have said, not challenged under the Code, was the reason for termination of the employment of each of the respondents.  In these circumstances, on a proper application of Andrews, a finding of discrimination under s. 13(1) cannot be maintained.

[33]            The evidence before the tribunal is incapable of supporting the conclusion that the agreement contained anything other than a fair and commercially-sensible distinction between the respondents and active employees on the basis of availability for work.  It was clearly not a distinction based upon physical or mental disability.  The respondents did not receive severance pay because they did not become available for work before retirement or before Interfor invoked the absenteeism clause in the collective agreement.  They suffered no disadvantage under the agreement between Interfor and the union.  The agreement caused no negative impact on the respondents and the distinction was not discriminatory on a proper application of Andrews.

[34]            I would allow the appeal and quash the decision of the Human Rights Tribunal. 

“The Honourable Mr. Justice Low”

I agree:

“The Honourable Madam Justice Saunders”

I agree:

“The Honourable Mr. Justice Lowry”