Date: 19981223 Docket: 98 1971 Registry: Victoria IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: LARI MITCHELL, ROBIN DUNN, PENNY PATTISON, TIM HICKS, ERIC GELLING, PAMELA BARTILUCCI, KEN COOMBES, FAY MELLING, REID WALLBERG, DAVE RANSON, COLIN WEEKS, CORAL TRISKO, COLIN HOWEY, LYSANNE HASSEL, GARY HAYES, RHONDA SCHELLENBERG, CHRISTOPHER SLADE, GERALD GABEL, NANCY GREER, NORM GLASSEL, WILLIAM JACKSON, MIKE TOMCZAK, BILL MARSH, DIANE RASCHIG, DAVE REES, SEAN McCUMBER, DOUG AUSMAN, JAMES FISK, PHIL McLAUGHLIN, MAURICE AUGER, KIRSTINE POTENTIER, JOAN WESTRAN, GIL SAMPSON PETITIONERS AND: DIRECTOR OF EMPLOYMENT STANDARDS AND: EMPLOYMENT STANDARDS TRIBUNAL AND: B.C. GOVERNMENT AND SERVICE EMPLOYEES' UNION AND: PUBLIC SERVICE EMPLOYEE RELATIONS COMMISSION AND: BRITISH COLUMBIA SYSTEMS CORPORATION RESPONDENTS REASONS FOR JUDGMENT OF THE HONOURABLE MR. JUSTICE VICKERS Counsel for the Petitioners: M. McNeil Counsel for the Respondent, Employment Standards Tribunal: J. MacTavish Counsel for the Respondent, B.C. Government and Service Employees' Union: K. Curry Counsel for the Respondent, Public Service Employee Relations Commission: P. Gall Counsel for the Respondent, British Columbia Systems Corporation: S. Arnold Counsel for the Attorney General of British Columbia and the Director of Employment Standards: E.W. Hughes Place and Date of Hearing: Victoria, B.C. November 2 & 3, 1998 [1] This is a petition for judicial review of an Employment Standards Tribunal decision dated March 4, 1998. The Tribunal was established pursuant to the provisions of the Employment Standards Act, R.S.B.C. 1996, c. 113. The question raised by the petition is whether an employee who is offered and refuses employment with a successor employer is barred from claiming severance or group termination notice because of the provisions of s. 97 of the Act. The Issues [2] The specific issues are as follows: 1. whether the Director of Employment Standards should have standing in these proceedings; 2. what is the appropriate standard of review; and 3. whether the Tribunal decision meets the standard. The Facts [3] Prior to the fall of 1995, the petitioners were all employed by the B.C. Systems Corporation (the "Employer") in positions that were excluded from the B.C. Government and Service Employees' Union (the "BCGEU"). The respondent, Employment Standards Tribunal (the "Tribunal") is established pursuant to s. 110 of the Act and it exercises a statutory power of decision as defined by the Judicial Review Procedure Act, R.S.B.C. 1996, c. 241. The BCGEU and the Public Service Employee Relations Commission (the "PSERC") were parties to the proceedings before the Tribunal. The Director of Employment Standards (the "Director") is appointed under the Public Service Act and is the person charged with the duties and responsibilities of the Director under the Act. [4] I adopt the facts found at page 4 of the Tribunal decision, as follows: [D]uring the period December 1995 to March 1996, 1,011 employees of B.C. Systems were transferred from B.C. Systems' to the provincial government's payroll. These employee were offered, and accepted, essentially identical positions with the government. However, some 58 former B.C. Systems employees refused to accept a transfer to the provincial government-- these employees comprise two distinct groups. The first group, 21 in number, gave advance notice of their intended refusal to accept any transfer and instead opted to resign with severance pay as set out in the BCGEU collective agreement; these employees resigned pursuant to a program known as the "Advance Notice of Intention to Refuse Transfer to Government" program. The second group, 37 in number, only refused the transfer when an actual position was offered to them (i.e., there was no advance "opting out" of the proposed transfer). It is in the context of the 58 employees who refused transfer of employment to the provincial government that the section 97 issue arises. [5] The Employer failed to give notice and refused to pay the petitioners and others severance pay, as provided under s. 64 of the Act. While severance pay was paid, it was not under the group severance provisions of s. 64. [6] Eighty-four former employees, including the petitioners, filed complaints under the provision of the Act, alleging a breach of ss. 63 and 64 of the Act. Pursuant to the provisions of the Act, a delegate of the Director concluded on December 9, 1996 that the Employer had not contravened either ss. 63 or 64 of the Act. The delegate also found that under the Act, employees who refuse employment with a successor employer may be treated as terminated employees and that s. 97 of the Act was not a bar to the petitioners receiving individual or group termination pay. Finally, the delegate found that the Employer and the Provincial Government were associated corporations and the provisions of s. 65(1)(f) of the Act barred a claim for recovery. [7] Various parties filed appeals and by an agreement between counsel, the government's appeal of the Delegate's findings under s. 97 was scheduled to be heard first by a tribunal under the Act. This tribunal (the "Original Panel") rendered its decision on July 25, 1997. [8] The Original Panel reversed the Delegate's decision under s. 97 of the Act and found that where a successor employer offered employees substantially similar positions their employment was deemed continuous and the benefits under ss. 63 and 64 did not apply. This panel also confirmed the Delegate's decision under s. 65 (1)(f). [9] The decision of the Original Panel was appealed by the petitioners to a reconsideration panel pursuant to the provisions of the Act. The appeal was supported by the BCGEU and the Director. The reconsideration panel, the Tribunal in these proceedings, was asked the following: 1. did the Original Panel correctly interpret s. 97; and 2. did the Original Panel err in deciding the issue under s. 65 (1)(f) when the hearing had been convened solely to decide whether the Delegate's interpretation of s. 97 was correct? [10] The Tribunal rendered its decision on March 4, 1998 and concluded the Original Panel should not have decided the s. 65 (1)(f) issue as it was not before them. It confirmed the Original Panel's decision with respect to s. 97 and found that if employees are employed by the vendor at the time of the sale of a business then, for all purposes of the Act, the employment of those employees is deemed to be continuous with the purchaser. This judicial review is limited to the Tribunal decision concerning s. 97. [11] None of the petitioners were offered positions with the provincial government. Each of them were given notice of termination or were paid severance pay. None of the petitioners were paid group termination pay under the provisions of s. 64. In order to qualify for group termination pay, greater than 50 employees at a single location must be terminated within a two month period. [12] Hence the importance of the question as to whether persons who reject a position with a successor employer can be said to have been terminated. If they have been terminated then the number of terminations will more than likely exceed the threshold number and the issue of whether s. 64 is to be applied and which employees are entitled to receive the benefits of s. 64 will have to be addressed. The Relevant Provisions of the Act [13] The relevant provisions of the Act are: 63 (1) After 3 consecutive months of employment, the employer becomes liable to pay an employee an amount equal to one week's wages as compensation for length of service. (2) The employer's liability for compensation for length of service increases as follows: (a) after 12 consecutive months of employment, to an amount equal to 2 weeks' wages; (b) after 3 consecutive years of employment, to an amount equal to 3 weeks' wages plus one additional week's wages for each additional year of employment, to a maximum of 8 weeks' wages. (3) The liability is deemed to be discharged if the employee (a) is given written notice of termination as follows: (i) one week's notice after 3 consecutive months of employment; (ii) 2 weeks' notice after 12 consecutive months of employment; (iii) 3 weeks' notice after 3 consecutive years of employment, plus one additional week for each additional year of employment, to a maximum of 8 weeks' notice; (b) is given a combination of notice and money equivalent to the amount the employer is liable to pay, or (c) terminates the employment, retires from employment, or is dismissed for just cause. (4) The amount the employer is liable to pay becomes payable on termination of the employment and is calculated by (a) totalling all the employee's weekly wages, at the regular wage, during the last 8 weeks in which the employee worked normal or average hours of work, (b) dividing the total by 8, and (c) multiplying the result by the number of weeks' wages the employer is liable to pay. (5) For the purpose of determining the termination date, the employment of an employee who is laid off for more than a temporary layoff is deemed to have been terminated at the beginning of the layoff. 64 (1) If the employment of 50 or more employees at a single location is to be terminated within any 2 month period, the employer must give written notice of group termination to all of the following: (a) each employee who will be affected; (b) a trade union certified to represent, or recognized by the employer as the bargaining agent of, any affected employees; (c) the minister. (2) The notice of group termination must specify all of the following: (a) the number of employees who will be affected; (b) the effective date or dates of the termination; (c) the reasons for the termination. (3) The notice of group termination must be given as follows: (a) at least 8 weeks before the effective date of the first termination, if 50 to 100 employees will be affected; (b) at least 12 weeks before the effective date of the first termination, if 101 to 300 employees will be affected; (c) at least 16 weeks before the effective date of the first termination, if 301 or more employees will be affected. (4) If an employee is not given notice as required by this section, the employer must give the employee termination pay instead of the required notice or a combination of notice and termination pay. (5) If an employee is not covered by a collective agreement, the notice and termination pay requirements of this section are in addition to the employer's liability to the employee under section 63. (6) This section applies whether the employment is terminated by the employer or by operation of law. 97 If all or part of a business or a substantial part of the entire assets of a business is disposed of, the employment of an employee of the business is deemed, for the purposes of this Act, to be continuous and uninterrupted by the disposition. 108 (1) For the purposes of an appeal, reconsideration or recommendation, the tribunal and each member of it has the power and authority of a commissioner under sections 12, 15 and 16 of the Inquiry Act. (2) The tribunal may decide all questions of fact or law arising in the course of an appeal or review. 109 (1) In addition to its powers under section 108 and Part 13, the tribunal may do one or more of the following: (a) make recommendations to the Lieutenant Governor in Council about the exclusion of classes of persons from all or part of this Act or the regulations; (b) extend the time period for requesting an appeal even though the period has expired; (c) make, with the approval of the minister, rules about how appeals and reconsiderations are to be conducted and about the steps to be followed before making recommendations under paragraph (a); (d) enter during regular working hours any place, including any means of conveyance or transport, where (i) work is or has been done or started by employees, (ii) an employer carries on business or stores assets, (iii) a record required for the purposes of this Act is kept, or (iv) anything to which this Act applies is taking place or has taken place; (e) inspect any records that may be relevant to an appeal, reconsideration or recommendation; (f) on giving a receipt for a record examined under paragraph (e), remove the record to make copies or extracts; (g) require a person to disclose, either orally or in writing, a matter required under this Act and require the disclosure to be made under oath or affirmation; (h) order a person to produce, or to deliver to a place specified by the tribunal, any records for inspection under paragraph (e). (2) Despite subsection (1), the tribunal may enter a place occupied as a private residence only with the consent of the occupant or under the authority of a warrant issued under section 120. 110 A decision or order of the tribunal under this Act or the regulations on any matter in which it has jurisdiction is final and conclusive and is not open to question or review in a court on any grounds. Standing Of The Director [14] Section 15 of the Judicial Review Procedure Act, supra, provides that the tribunal whose decision is under review is a party to the application. In this case, the Tribunal has standing to appear on a judicial review of its decision in order to make submissions as to jurisdiction and to explain the record: CAIMAW v. Paccar of Canada Ltd., [1989] 2 S.C.R. 983 at 1014. Administrative tribunals such as the Tribunal, are in the unique position of being able to convey to the court those matters relating to their special expertise: CAIMAW v. Paccar, supra, at page 1016. [15] Conversely, the role of the Director on judicial review of a tribunal decision is entirely different. The scheme of the Act requires the Director to investigate and decide complaints made under the Act. The role of a tribunal is to hear and determine appeals of the Director's decisions. The decisions of tribunals are protected by a privative clause, s. 110. [16] The Director is a party to an appeal before a tribunal and she has the right to have a decision of a tribunal reviewed by a reconsideration panel. The role of the Director at an appeal has been ruled on by Adjudicator, K.W. Thornicroft in BWI Business World Incorporated (19 April 1996), No. D050/96 (B.C.E.S.T.). He said the following at page 5 of his decision: Therefore, in my view, the Director's status and role at a section 112 appeal hearing should be governed by the following principles: 1. The Director is not the statutory agent for the employee(s) named in the determination. 2. The Director is entitled to attend, give evidence, cross-examine witnesses and make submissions at the appeal hearing. 3. The Director's attendance and participation at the appeal hearing must be confined, however, to giving evidence and calling and cross-examining witnesses with a view to explaining the underlying basis for the determination and to show that the determination was arrived at after a full and fair consideration of the evidence and submissions of both the employer and the employee(s). 4. The Director must appreciate that there is a fine line between explaining the basis for the determination and advocating in favour of a party, particularly when one party seeks to uphold the determination. 5. It will fall to the Employment Standards Tribunal adjudicator in each case, given the particular issues at hand, to ensure that the line between explaining the determination and advocating on behalf of one or other of the parties is not crossed. 6. It will also fall to the adjudicator to ensure that all relevant evidence is placed before the Tribunal for consideration. [17] The role of the Director has been found to be the same on reconsideration applications: 323573 BC Ltd. Operating as Saltair Neighbourhood Pub (19 February 1998), No. D478/97 (B.C.E.S.T.), reconsideration of (12 May 1997), No. D186/97 (B.C.E.S.T.). [18] Counsel for the Tribunal argued that the role of the Director should be limited and in that regard he relied on Citation Industries Ltd. v. C.J.A., Local 1928 et al., (1984), 54 B.C.L.R. 114 (B.C.C.A). Counsel for the Director sought to distinguish that decision because it was made under the old statutory scheme and because it was a board decision, there being no tribunals at that time. She relied on Receveur v. Saskatchewan (Deputy Superintendent of Insurance) (1991), 114 Sask. R. 152 (Sask. Q.B.). [19] In my view, it is neither fair nor proper for the Director to actively pursue the correctness of her decision on judicial review of a tribunal decision. The Director's decision has already been reviewed and a decision made by a tribunal panel, thus fulfilling the intent of the Legislature. Decisions of the Director are subject to review by a tribunal panel and decisions of tribunals, protected by a privative clause, are subject to judicial review. The Director's presence on judicial review, advocating a particular position, places her statutory neutrality in question. [20] The decision in Receveur v. Saskatchewan (Deputy of Insurance), supra, can be distinguished because it involved a matter of regulating the conduct of members. While the legislative scheme has been altered since the decision in Citation Industries v. C.J.A., Local 1928 et al., supra, there is no good reason not to apply the rationale of that decision to the current legislation. [21] The role of the Director on judicial review of a tribunal decision, whether the original panel or a reconsideration panel as in this case, should be limited. It will be an extremely unusual case where the jurisdiction of the Director is in issue. Where that jurisdiction is in issue, the Director will have standing to be heard on that issue. In addition, infrequently there may be a case in which employees are not represented on judicial review. I leave open whether it is appropriate for the Director to be heard in such circumstances. That is not the situation in this case. Nor is the jurisdiction of the Director in issue. Accordingly, the Director has no standing in these proceedings. The Standard Of Judicial Review [22] The appropriate approach to this question is to adopt that of Bastarache J. in Pushpanathan v. Canada (Minister of Citizenship and Immigration (1998), 160 D.L.R. (4th) 193 (S.C.C.). This was followed in Aquasource Ltd. v. British Columbia (Information and Privacy Commission), (18 August 1998), Vancouver CA022585. There are four factors to be taken into account.i) Privative Clauses [23] The presence of a "full" privative clause is compelling evidence that a court should show deference to a tribunal decision. Pushpanathan, supra, page 210, at paragraph 30. Section 110 of the Act is a full privative clause which requires a level of deference on the high end of the spectrum. ii) Expertise [24] If the decision makers have specialized knowledge then a greater degree of deference will be accorded. Expertise is a relative and not an absolute concept and in making an evaluation, three dimensions must be considered. A court must characterize the expertise of the tribunal in question; it must consider its own expertise relative to that of the tribunal; and it must identify the nature of the specific issue before the tribunal relative to this expertise: Pushpanathan, supra, page 211 at paragraphs 32 and 33. [25] In 1993, a Commissioner, Mr. Mark Thompson, was appointed to review and make recommendations on changes to the Act. His report, issued on February 3, 1994, made many recommendations. One of them concerned the need for a specialized employment standard tribunal to address employment standard issues. It would appear the recommendations of Commissioner Thompson were accepted by the Government. [26] The powers granted a tribunal under s. 109 of the Act include a power to make recommendations to the Lieutenant Governor in Council concerning the exclusion of persons from the Act or regulations. The Director is a person appointed because of her particular knowledge and expertise. Both a tribunal and a reconsideration panel and in particular, the Tribunal in this case, are given a broad and unfettered right to review decisions of the Director. There can be no doubt that tribunals under the Act must be possessed of and employ specialized expertise in the discharge of their duties. When the process leading to the current legislation including the recommendations of the Commissioner and the whole of the Act are considered it is apparent expertise relating to employment standards issues is required by all panel members of a tribunal. [27] The specific issue before the Tribunal concerned an interpretation of s. 97 on a matter related to its expertise, namely, the disposition of a business and its impact on continuing employment relationships. Statutory interpretation is also a matter upon which the court may claim expertise but not necessarily related specifically to the issue addressed by s. 97. iii) Purpose of the Act as a Whole and the Provision in Particular [28] Section 2 of the Act sets out its purpose, as follows: The purposes of this Act are as follows: (a) to ensure that employees in British Columbia receive at least basic standards of compensation and conditions of employment; (b) to promote the fair treatment of employees and employers; (c) to encourage open communication between employers and employees; (d) to provide fair and efficient procedures for resolving disputes over the application and interpretation of this Act; (e) to foster the development of a productive and efficient labour force that can contribute fully to the prosperity of British Columbia; (f) to contribute in assisting employees to meet work and family responsibilities. [29] In Pushpanathan, supra, at page 212 Bastarache J., for the court, said the following: Where the purposes of the terms of establishing rights as between parties, or as entitlements, but rather as a delicate balancing between different constituencies, then the appropriateness of court supervision diminishes. [30] This case involves a number of "interlocking and interacting interests": Pushpanathan, supra, page 213, including continuing employment, successorship, and the employment obligations of both employers and employees. It is not simply an adjudication of the rights of employers and employees in a specific situation. The Tribunal had to bear in mind the consequences their decision might have on employment relationships in general, throughout the Province. In these circumstances they are entitled to a high degree of deference. (iv) The Nature of the Problem [31] Even pure questions of law may be granted a wide degree of deference where other factors in the analysis suggest that deference was the intention of the Legislature: Pushpanathan, supra, at page 213. As noted at page 214 of that decision, the principle was articulated by L'Heureux Dube J. in Canada (Attorney General) v. Mossop, [1993] 1 S.C.R. 554 at pages 599-600 as follows: In general, deference is given on questions of fact because of the 'signal advantage' enjoyed by the primary finder of fact. Less deference is warranted on questions of law, in part because the finder of fact may not have developed any particular familiarity with issues of law. While there is merit in the distinction between fact and law, the distinction is not always so clear. Specialized boards are often called upon to make difficult findings of both fact and law. In some circumstances, the two are inextricably linked. Further, the 'correct' interpretation of a term may be dictated by the mandate of the board and by the coherent body of jurisprudence it has developed. In some cases, even where courts might not agree with a given interpretation, the integrity of certain administrative processes may demand that deference be shown to that interpretation of law. [32] The issue before the Tribunal was one of mixed fact and law requiring expertise in the area of employment standards. This is one of those situations in which the "correct" interpretation may be dictated by the mandate of the board and bearing in mind the implications of the decision throughout the Province. [33] The foregoing analysis leads me to conclude that the decision of the Tribunal in this case is one in which deference should be shown. The question the court must now consider is whether the decision of the Tribunal was patently unreasonable. Was the Tribunal's Decision Patently Unreasonable [34] The petitioners, supported by the BCGEU and the Attorney General, argue that the principle object of the Act is to protect the interests of employees by requiring employers to comply with certain minimum standards: Machtinger v. HOJ Industries Ltd. (1992), 91 D.L.R. (4th) 491 (S.C.C.). They rely on B.C.G.E.U. v. Industrial Relations Council (1988), 33 B.C.L.R. (2d) 1 (B.C.C.A.), the "Verrin" decision, and argue that a fundamental individual right is to choose the employer for whom a person will work. [35] The petitioners argue that the decision of the Tribunal was not only incorrect. It was, in their submission, patently unreasonable. They say that in order for the Tribunal to have reached its decision it must have read into the Act that the "employer" and not the "employment" was continuous. [36] In Verrin, supra, the Court of Appeal concluded that an employee had the option to remain with a predecessor employer and exercise his rights under a collective agreement. The Court of Appeal concluded that specific language was required before an employee could be compelled to become the employee of a successor employer. [37] I agree with the Tribunal and conclude that Verrin can be distinguished from this case. It involved an interpretation of s. 53 of the Industrial Relations Act, R.S.B.C. 1979, c. 212, legislation which governs industrial relations and not employment standards. Of more importance however is the fact that the language of s. 53 of the Industrial Relations Act is very different than the words found in s. 97 of the Act. [38] The Tribunal said at page 18 of its decision: Unlike, section 53(1), section 97 explicitly states that upon a disposition of a business 'the employment of an employee of the business is deemed, for the purposes of this Act, to be continuous and uninterrupted by the disposition.' In other words, the disposition of a business does not terminate employment because employment is deemed to continue for the purposes of the Act. We agree with the original panel that the wording of section 97 creates ' ... the very sort of ongoing employment relationship referred to by the Court of Appeal in Verrin ...'. This does not mean that an employee is obliged to work for a purchaser. What it does mean is that for the purposes of ascertaining and enforcing an employee's entitlements under the Act, employment is treated as if it were continuing with the purchaser. [39] I agree with the Tribunal. [40] However, the petitioner characterizes the foregoing as an interpretive error. Counsel submits that the Tribunal has interchanged the adjective continuous with the verb to continue. It is argued that the employment of the petitioners who were not offered employment with the government did not "continue" with government nor could they have been "deemed" to continue. It is only the employment of those who elected to take employment with government whose employment could be deemed to be continuous. [41] I conclude that s. 97 must be interpreted to mean that if employees are employed by a vendor at the time a business is disposed of then, for the purpose of the Act, the employment of those employees is deemed to be continuous with the successor employer. In short, nothing has changed and all the benefits of these employees are continued with the new employer. Their employment is continuous and it cannot be said to have been terminated. [42] The decision of the Tribunal was not patently unreasonable. While it is unnecessary for the purpose of this review, I have concluded the decision of the Tribunal was correct. In the result, where there is no substantial alteration to a term of employment and an employee who is offered employment with a successor employer voluntarily chooses not to continue his or her employment with that employer they are not entitled to severance pay under the Act. [43] Since this case was argued, the decision in Costa v British Columbia Systems Corporation et al. (2 November 1998) Victoria 25907T (B.C.S.C.) has been filed. The case has no bearing on the outcome of this case because employee rights under the Act are independent of their common law rights. In that case Hutchison J. held that employees of the defendant Corporation had not been terminated from their employment on the winding up of the Corporation where the plaintiff employee was transferred to the public service, even where the offer of employment was accepted on a conditional basis. The decision demonstrates that the Tribunal's decision did not affect the common law rights of employees. [44] The petition is dismissed. There will be no order for costs. "Vickers, J." __________________________________ The Honourable Mr. Justice Vickers