Knight v. Indian Head School Division No. 19

Knight v. Indian Head School Division No. 19
Collection
Supreme Court Judgments
Date
1990-03-29
Report
[1990] 1 SCR 653
Case number
21040
Judges
Dickson, Robert George Brian; Wilson, Bertha; La Forest, Gérard V.; L'Heureux-Dubé, Claire; Sopinka, John; Cory, Peter deCarteret; McLachlin, Beverley
On appeal from
Saskatchewan
Subjects
Administrative law
Labour law
Notes
SCC Case Information: 21040
Decision Content
Knight v. Indian Head School Division No. 19, [1990] 1 S.C.R. 653
The Board of Education of the Indian Head
School Division No. 19 of Saskatchewan Appellant
v.
Ronald Gary Knight Respondent
indexed as: knight v. indian head school division no. 19
File No.: 21040.
1989: November 28, 29; 1990: March 29.
Present: Dickson C.J. and Wilson, La Forest, L'Heureux‑Dubé, Sopinka, Cory and McLachlin JJ.
on appeal from the court of appeal for saskatchewan
Administrative law ‑‑ Procedural fairness ‑‑ School board dismissing employee hired under contract ‑‑ Contract providing for dismissal on notice ‑‑ Employee's position made known to Board ‑‑ No hearing as to whether or not employee should be dismissed ‑‑ Whether or not duty of procedural fairness required generally, under The Education Act or under contract ‑‑ If so, whether or not duty of procedural fairness breached ‑‑ The Education Act, R.S.S. 1978, c. E‑0.1, ss. 91(x), 112, 113, 206(d).
Labour law ‑‑ Contract ‑‑ Wrongful dismissal ‑‑ Position created by and duties defined in statute ‑‑ School board dismissing employee hired under contract ‑‑ Contract providing for dismissal on notice ‑‑ Whether or not employee could be dismissed only for cause under The Education Act or employment contract ‑‑ The Education Act, R.S.S. 1978, c. E‑0.1, s. 106.
The respondent, who was director of education for the appellant Board, was dismissed by the appellant on three months' notice. He took action against the appellant Board for wrongful and unlawful dismissal, alleging the absence of procedural fairness. The written contract of employment provided for an annual review with a view to the possibility of revision, provided the agreement had not otherwise been terminated. Termination could be effected by either party on three months' notice in writing or by resolution of the Board for just cause provided the employee be given a fair hearing and investigation. Two Board members met with the respondent and informed him that the Board did not intend to renew the existing contract but was ready to negotiate a new contract on a one‑year basis. Respondent neither accepted nor rejected the Board's proposal. The parties were unable to reach an agreement. The respondent insisted that the term of the contract extend for the balance of the three‑year period originally provided for and the appellant Board insisted on a one‑year term. The appellant Board passed resolutions to terminate the respondent's employment and to give him three months' notice of the termination.
The respondent brought an action against the appellant claiming unlawful and wrongful dismissal and seeking reinstatement with back pay and benefits owed by virtue of the employment contract. The Court of Queen's Bench dismissed the action. The Court of Appeal, however, allowed the appeal and made an order for damages equivalent to the respondent's salary from the date of dismissal until the expiration of the contract, August 31, 1985.
The questions at issue here are: (1) could the respondent be fired only for cause under the terms of The Education Act or his employment contract; (2) was respondent entitled to procedural fairness; (3) if so, what is the scope of the duty to act fairly in the context of an employee‑employer relationship; and (4) given there was a duty to act fairly, was it complied with?
Held: The appeal should be allowed.
Per Dickson C.J. and La Forest, L'Heureux‑Dubé and Cory JJ.: Section 112 of The Education Act deals with the dismissal of non‑teaching personnel. It relies on the terms of the employment contract and provides for a minimum thirty‑day notice if the contract does not contain such provisions. It does not list specific grounds for dismissal or explicitly provide for a notice of such grounds or for a procedure to be followed.
The contract provides for termination for cause or termination which is not dependent on cause simply upon a three months' written notice. This latter route does not necessarily entail that the procedure involved can be arbitrary. A general right to procedural fairness, or one arising from The Education Act or the contract, may exist.
Neither the statute nor the contract accords a right to procedural fairness. The duty to act fairly does not form part of employment law but stems from the fact that the employer is a public body whose powers are derived from statute and must be exercised according to the rules of administrative law. The existence of a general duty of fairness depends on: (i) the nature of the decision to be made by the administrative body; (ii) the relationship existing between that body and the individual; and (iii) the effect of that decision on the individual's rights.
It is no longer necessary to consider whether a decision is judicial, quasi‑judicial or administrative because the duty to act judicially and the duty to act fairly arise from the same general principles of natural justice. Not all administrative bodies, however, are under a duty to act fairly. Decisions of a legislative and general nature can be distinguished from acts of a more administrative and specific nature which do not entail such a duty. Further, decisions of a final nature may attract this duty unlike decisions of a preliminary nature. The Board's decision here was of a final and specific nature and accordingly could entail the existence of a duty to act fairly on the part of the Board.
The employment relationship between an employer and an employee were traditionally classified into three categories: (i) the master and servant relationship, where there is no duty to act fairly when deciding to terminate the employment; (ii) the office held at pleasure, where no duty to act fairly exists, since the employer can decide to terminate the employment for no other reason than his displeasure; and (iii) the office from which one cannot be removed except for cause, where there exists a duty to act fairly on the part of the employer.
The employment relationship here was not that of master and servant but rather an office which encompassed some elements of a public nature and some elements that were clearly contractual. This office, since respondent could be dismissed for reasons other than cause, was one held at pleasure. Recent developments in administrative law make procedural fairness an essential requirement of an administrative decision to terminate either of the last two classes of employment. The employee is therefore accorded an opportunity, quite independent of the grounds triggering the dismissal, to try to change employer's mind about the dismissal.
On a wider policy level, the powers exercised by the Board are delegated statutory powers which should be put only to legitimate use. Unlike "pure master and servant" relationships, the public has an interest in the proper use of delegated power by administrative bodies. The fact that an office holder could be dismissed for cause or at pleasure would not warrant a distinction with regard to the existence of a duty to act fairly, since in both cases statutory powers are exercised. It is not necessary, in this respect, to characterize the employment so that it fits into one or the other of those classes. The distinction, however, is not obsolete in all respects. In the case of an office held at pleasure, even after the giving of reasons and the granting of a hearing, the employer's mere displeasure is still justification enough to validly terminate the employment.
The right to procedural fairness exists only if the decision is a significant one and has an important impact on the individual. Loss of employment against the office holder's will is such a decision.
The Education Act does not explicitly or implicitly excuse the Board from acting fairly when terminating the employment contract of one of its administrative personnel. The Act sets out a procedure available to, amongst others, a director of education who has been dismissed and grants the Education Minister discretion to order that a board of review investigate the termination. The rationale of the first safeguard is to ensure that the Board gave the employee the opportunity to try and change its mind and, of the second, to review the basis of the school board's decision to dismiss an employee. Since the two rights have distinct rationales, the existence of an investigatory process does not preclude a duty to act fairly on the part of the Board.
An explicit or clearly implicit provision was required to overcome the presumption that the parties to the contract intended procedural fairness to apply. The fact the contract does not refer to the necessity of a hearing where no cause is invoked to justify the dismissal does not amount to a clear implicit waiver of the application of the duty to act fairly.
The concept of procedural fairness is eminently variable and its content is to be decided in the specific context of each case. It is not, however, purely subjective. The closeness of the administrative process to the judicial process should indicate how much of the principles governing the judicial process should be imported into the realm of administrative decision making. The content of the duty of fairness would be minimal where dismissal is at pleasure. It was met here because respondent had been notified of the Board's reasons for dissatisfaction and had been given an opportunity to be heard.
Every administrative body is the master of its own procedure and need not assume the trappings of a court. Here, the requirements of procedural fairness were satisfied, even absent a structured "hearing". "Everything that had to be said had been said," and accordingly, the requirement of the formal giving of reasons and the holding of a hearing would achieve no more than to impose upon the Board a purely procedural requirement at odds with the principles of flexibility of administrative procedure.
Per Wilson, Sopinka and McLachlin JJ.: The appellant owed no duty of fairness to the respondent.
For the reasons stated by L'Heureux‑Dubé J., the appellant was entitled to dismiss the respondent without cause. Respondent held office at pleasure and this category of employment, as a general rule, does not attract the duty of procedural fairness because the employer can terminate the employment without cause and without giving any reason. An exception may be made in special cases where an employee can identify provisions in the statute, the regulations or the contractual provisions governing the relationship, which expressly or by implication confer a right to be heard or to make representations upon the employee. The statute, regulations and contract must be examined to determine whether the respondent falls within the exception.
The Act does not create specifically or by necessary implication any duty of procedural fairness on the termination of the contract of a director of education. Where the statute intended to create the right to be heard or to make representations, it was careful to say so. The legislature left to agreement of the parties the matter of how the contract was to be terminated.
The contract implemented Regulation 21(4)(c) by providing a procedure for review which specifically entitled the employee to make representations. The employer, following the review, could decide to terminate. No duty, other than the duty to give the notice, could be implied. Reading a duty of procedural fairness into the contract would be to rewrite it for the parties.
Cases Cited
By L'Heureux‑Dubé J.
Considered: Barrett v. Nor. Lights Sch. Div. 113 Bd. of Educ., [1988] 3 W.W.R. 500; Cardinal v. Director of Kent Institution, [1985] 2 S.C.R. 643; Nicholson v. Haldimand‑Norfolk Regional Board of Commissioners of Police, [1979] 1 S.C.R. 311; Ridge v. Baldwin, [1963] 2 All E.R. 66; Malloch v. Aberdeen Corp., [1971] 2 All E.R. 1278; Kane v. Board of Governors of the University of British Columbia, [1980] 1 S.C.R. 1105; referred to: Syndicat des employés de production du Québec et de l'Acadie v. Canada (Canadian Human Rights Commission), [1989] 2 S.C.R. 879; Attorney General of Canada v. Inuit Tapirisat of Canada, [1980] 2 S.C.R. 735; Nova Scotia Government Employees Association v. Civil Service Commission of Nova Scotia, [1981] 1 S.C.R. 211; Wiseman v. Borneman, [1969] 3 All E.R. 275; Furnell v. Whangarei High Schools Board, [1973] A.C. 660; Maxwell v. Department of Trade and Industry, [1974] Q.B. 523; R. v. Beare, [1988] 2 S.C.R. 387; Selvarajan v. Race Relations Board, [1976] 1 All E.R. 12.
By Sopinka J.
Considered: Ridge v. Baldwin, [1963] 2 All E.R. 66; Malloch v. Aberdeen Corp., [1971] 2 All E.R. 1278; Nicholson v. Haldimand‑Norfolk Regional Board of Commissioners of Police, [1979] 1 S.C.R. 311.
Statutes and Regulations Cited
Education Act, R.S.S. 1978, c. E‑0.1, ss. 91(x), (4), 106, 107, 108, 112, 113, 206(d), 209, 106‑116, 206‑211, 212‑226, 196‑271.
Education Regulations, Sask. Reg. 1/79, ss. 21(4), 37(1).
Education (Scotland) Act, 1962 (U.K.), 1962, c. 47, s. 85(1)(a).
Authors Cited
de Smith, S. A. de Smith's Judicial Review of Administrative Action, 4th ed. By J. M. Evans. London: Stevens & Sons, 1980.
Dussault, René et Louis Borgeat. Traité de droit administratif, t. III, 2e éd. Québec: Les Presses de l'Université Laval, 1989.
Molot, Henry. "Employment During Good Behaviour or at Pleasure" (1989), 2 C.J.A.L.P. 238.
Pépin, Gilles et Yves Ouellette. Principes de contentieux administratif, 2e éd. Cowansville, Québec: Yvon Blais Inc., 1982.
Wade, H. W. R. Administrative Law, 5th ed. Oxford: Clarendon Press, 1982.
APPEAL from a judgment of the Saskatchewan Court of Appeal (1988), 66 Sask. R. 308, allowing an appeal from a judgment of Lawton J. (1986), 53 Sask. R. 278. Appeal allowed.
G. L. Gerrand, Q.C., for the appellant.
F. L. Dunbar, for the respondent.
//L'Heureux-Dubé//
The judgment of Dickson C.J. and La Forest, L'Heureux-Dubé and Cory JJ. was delivered by
L'Heureux-Dubé J. -- The respondent, director of education for the appellant Board, was dismissed by the appellant on three months' notice. He took action against the appellant Board for wrongful and unlawful dismissal, alleging the absence of procedural fairness. This case raises questions about the relationship between the employment contract, The Education Act of Saskatchewan (R.S.S. 1978, c. E-0.1) and the existence and scope of the general duty of fairness resting on a public body in the context of an employer-employee relationship.
Facts
In March 1980, pursuant to the provisions of The Education Act, the respondent Ronald Gary Knight was hired as the director of education for the appellant, The Board of Education of the Indian Head School Division No. 19 of Saskatchewan. The written contract of employment involved in the present proceedings, dated May 25, 1981, was drafted by the respondent himself at the request of the appellant Board. The relevant provisions of the contract, ss. 2 and 3, read as follow:
2.The Board shall review this Agreement on or before the 31st day of May each year, provided this Agreement has not been otherwise terminated, with a view to the possibility of its revision. The Employee shall be entitled to make representations to the Board in this regard. Following the said review, the Board may elect to terminate this Agreement at the expiration thereof and shall notify the Employee of its decision in writing forthwith. If the Board makes no such election, this Agreement shall automatically be extended for a period of three (3) years from September 1, 1981, and the same procedure shall be followed on or before the 31st day of May of each year thereafter the intent being that unless so terminated, this Agreement shall, as and from September 1st of each year thereafter have three (3) years to run.
3.This Agreement, being the Employee's Contract of Employment with the Board, may be terminated by:
(a)either party serving the other three months notice in writing;
(b)at any time by mutual consent in writing by the parties;
(c)the expiration of the Agreement; or
(d)by resolution of the Board for reasons of just cause provided that the Employee shall be entitled to a fair hearing and investigation pursuant to Section 113 of The Education Act. [Emphasis added.]
In January 1983, a completely new Board -- with the exception of two members -- was sworn in and replaced the Board that had hired the respondent. Some of the new members of the Board became concerned with the working relationship between the appellant Board and the respondent. They felt that they needed to evaluate that relationship before making a commitment of two further years of employment. In April 1983, one of the members of the Board, who had sat on the Board which had hired the respondent, warned the respondent that his position was in jeopardy, and advised him to start looking for alternate employment.
On May 10, 1983, two of the Board members met with the respondent and informed him how the Board intended to proceed, i.e., that it did not intend to renew the existing contract but was ready to negotiate a new contract on a one year basis. At this meeting, the respondent neither accepted nor rejected the Board's proposal. At the Board's regular meeting on May 30, in keeping with the previous discussions with the respondent, the appellant Board passed the following resolution:
Be it resolved that the Board serves notice to Ronald Gary Knight, Director of Education, in accordance with Section 2 of the Contract of employment, following review of same, elects not to extend the contract beyond the date agreed to as of May 31st, 1982.
Be it resolved that this Board serves notice to Ronald Gary Knight, Director of Education, its intent to renegotiate the same employee's contract with a view to providing a one year agreement.
The respondent was present at the May 30 meeting but did not voice any objection. Rather he consulted and mandated counsel to conduct negotiations with the Board on his behalf. On two occasions, at meetings held on June 30 and July 7, the respondent's counsel met with the Board in attempts to negotiate the terms of a new contract. While flexible on the issues of vacations, overtime, leave of absence and sick leave, the parties were nevertheless unable to reach an agreement as the respondent was insistent that the term of the contract extend for the balance of the three-year period originally provided for, the appellant Board equally insisting on a one-year term. On July 14, a letter from the respondent's solicitor was sent to the appellant Board, confirming the position of his client and outlining the disagreement with regard to the duration of the contract. The last paragraph reads:
As a result, I can confirm what was indicated to you in our meeting of July 7th with regard to duration, namely that Mr. Knight feels strongly that the contract ought to have a two year duration and he will not deviate from that position at this time. I understand that you will consult with your colleagues on the Board at the regular monthly meeting of July 25th. I will be available any time thereafter for a further negotiating session if you feel that such a meeting could be fruitful. If your Board feels inclined to take more precipitous action, I am instructed by my client to receive any and all documents which you would normally serve upon him and in that event, I would ask that you notify me of the solicitors who will be representing the School Division.
On August 9, 1983, the appellant Board passed resolutions to terminate the respondent's employment and to give him three months' notice of the termination.
The respondent brought an action against the appellant, claiming that he had been unlawfully and wrongfully dismissed and asking to be reinstated in his position as director of education along with back pay and benefits owed him by virtue of the employment contract. The Court of Queen's Bench dismissed the action. The Court of Appeal allowed the appeal and made an order for damages equivalent to the respondent's salary from the date of dismissal until the expiration of the contract, on August 31, 1985.
Judgments
Court of Queen's Bench (1986), 53 Sask. R. 278 (Lawton J.)
The trial judge reviewed the terms of the contract and the relevant sections of The Education Act. He was unable to accept the respondent's contention that the three month notice in paragraph 3(a) of the contract was a recognition of the three months between the May 31 and August 31 referred to in paragraph 2 of the contract. He found that the respondent's employment had not been terminated for cause and that, accordingly, s. 91(x) of The Education Act, relevant in his view only where the employment is terminated for cause, had no application to the case. The trial judge concluded that the respondent's employment "was lawfully and properly terminated by the [appellant] Board" pursuant to the August 9 resolution of the Board.
While Lawton J. agreed with the respondent's argument that he held a public office and that the appellant Board was a statutory authority bound to act in accordance with the principles of procedural fairness, he was of the view that the requirement of procedural fairness was met in that the respondent had been given every opportunity to present his case and renegotiate the agreement.
Court of Appeal (1988), 66 Sask. R. 308 (Bayda C.J.S. and Vancise and Sherstobitoff JJ.A.)
Following Barrett v. Nor. Lights Sch. Div. 113 Bd. of Educ., [1988] 3 W.W.R. 500 (Sask. C.A.), the Court of Appeal held that whether the dismissal was for cause or not, the respondent was entitled to have his employment terminated in accordance with the principles of procedural fairness as an office holder appointed under The Education Act. The court further found that the respondent could only be removed for cause according to the provisions of The Education Act.
In the opinion of the court, the principles of procedural fairness required that the respondent be given reasons for his dismissal as well as a hearing. The court held that those requirements were not met as the respondent was given neither; the negotiations between the parties did not amount to a hearing, and the threat of dismissal was not sufficient to constitute a notice of intention to terminate the employment. It was necessary accordingly that a full hearing be held following the principles set out in Cardinal v. Director of Kent Institution, [1985] 2 S.C.R. 643. The termination was declared null and void and the appeal was allowed. Damages were assessed as equivalent to the salary the respondent would have earned from the date of termination until August 31, 1985, less any money earned during that period.
Issues
The questions at issue here are as follow:
(1)Could the respondent be fired only for cause under the terms of The Education Act or his employment contract?
(2)In any event, was the respondent entitled to procedural fairness?
(3)If so, what is the scope of the duty to act fairly in the context of an employee-employer relationship?
(4)Given there was a duty to act fairly, was it complied with?
Analysis
The appellant Board admitted that the respondent's employment was not terminated for cause. It contended that the respondent's employment, though governed by the provisions of The Education Act, could be terminated on a simple three-month notice according to the terms of the employment contract entered into by the parties.
Since the respondent's first argument rests on the submission that the provisions of The Education Act applied and that, under its terms, he could be dismissed only for just cause, a conclusion also reached by the Court of Appeal, this issue will be dealt with at the outset.
As the Court of Appeal also held that whether or not the respondent could be dismissed only for cause, the appellant Board had a duty to act fairly, the issue of dismissal for cause can be dealt with quite quickly.
1. Dismissal for Cause
Sherstobitoff J.A., for the Court of Appeal, found that ss. 91(x) and 112 of The Education Act necessarily implied that a director of education be dismissed only for cause. Those provisions, as well as s. 206(d) of The Education Act which is also relevant here, read:
DUTIES AND POWERS OF BOARDS OF EDUCATION
91. A board of education shall:
. . .
(x) enter into written contracts of employment with teachers and other personnel required for the administration of the services of the board and terminate such contracts for cause in accordance with the provisions of this Act;
. . .
ADMINISTRATION IN SCHOOL DIVISIONS
. . .
112. Unless otherwise provided under the contract of employment between the board of education and the secretary, treasurer, secretary treasurer, superintendent of administration or director, either party to that contract of employment may terminate the contract by giving, to the other party to the contract, not less than thirty days' notice in writing of his intention to terminate the contract.
TERMINATION OF CONTRACTS OF TEACHERS
206. A board of education may:
. . .
(d) terminate its contract of employment with a teacher, where the termination is to be effective on a date other than June 30 in any year, by sending the teacher by registered or certified mail, no less than 30 days prior to the day upon which the termination is to take effect, a notice of termination in the prescribed form, and each such notice shall set out the reason or reasons for the termination. [Emphasis added.]
Sherstobitoff J.A. drew a parallel between the status under The Education Act of the office of director of education and the position of teacher. As provided by s. 206 of The Education Act (and s. 37(1) of The Education Regulations, Sask. Reg. 1/79), a teacher cannot be dismissed without being given a formal notice stating the reasons for the dismissal. Holding that the duties of the director of education are as important as those of a teacher, the Court of Appeal drew the conclusion that a director of education could not be dismissed without cause.
With deference, I read the provisions of The Education Act differently than the Court of Appeal. The office of director of education and the position of teacher receive clearly different treatment under The Education Act, regardless of the comparative importance to be attached to these two positions. First, the employment relationship is of a different nature since the teachers are employed pursuant to the terms of a collective agreement (s. 230 et seq. of The Education Act) while the director of education's employment is governed solely by an individual contract with a board of education. Secondly, the statutory framework in The Education Act is much more elaborate in relation to the employment of teachers (ss. 196 to 271) than it is for the appointment of a director of education (ss. 106 to 116). Regarding dismissal, The Education Act devotes an entire section exclusively to the termination of teachers' employment (ss. 206 to 211), detailing at length the procedure to be followed and providing for grounds for dismissal. There exist no such provisions as regards the termination of employment of administrative personnel such as the respondent. The only provision in The Education Act in that respect is s. 112, reproduced above, a provision very general in nature. This difference in statutory treatment between teachers and administrative personnel seems to indicate that the termination of employment of those two categories of employees was to be dealt with differently. Otherwise, why would the provisions relating to the termination of the employment of teachers not also include the administrative personnel? This, of course, is not determinative of the issue of whether or not, under The Education Act, the respondent could only be dismissed for cause. It indicates, however, that the provisions relating to the dismissal of teachers do not bear directly on the interpretation of those provisions applying more specifically to the dismissal of administrative personnel.
As its title indicates, s. 91(x), upon which the respondent relies, deals with the duties and powers of the Board to hire and dismiss employees, teachers and administrative personnel alike. The respondent invokes the phrase "shall . . . terminate such contracts for cause in accordance with the provisions of this Act" to buttress his argument that no employee, be they teachers or administrative personnel, can be dismissed by the Board unless there is just cause. If that were so, there would hardly be any point to s. 112 or for that matter s. 206 et seq. Moreover, I doubt that such a restriction would be placed in a section dealing with the Board's powers and duties in respect of hiring and dismissal of employees rather than in a section dealing specifically with the dismissal of a particular category of employee. A better reading of that phrase, one more compatible with both the text of s. 91(x) and the other provisions of The Education Act, is that it simply confers a limited power to dismiss for cause on the Board, in that it specifies that the termination of contracts for cause is to be done "in accordance with the provisions of this Act". In the case of administrative personnel, the "provisions of this Act" which must be complied with before the power to dismiss for cause can be validly exercised consist solely of the notice requirement found in s. 112, since that is the only section of The Education Act dealing with Board's power to dismiss such personnel. That section relies first on the terms of the employment contract, and only if such contract does not contain provisions dealing with the dismissal procedure does it provide for a minimum of thirty days' written notice. It is to be noted that, contrary to s. 206, s. 112 does not list any specific grounds for dismissal, nor does it explicitly provide for a notice of such grounds or the procedure to be followed prior to dismissal. It would follow that, save the possible effect of the contract, s. 112 merely requires that a three-month notice be given in the case of dismissal for cause. Furthermore, s. 112 is of general application in that it confers an unqualified power to dismiss, even absent just cause, provided that the three month notice or its contractual substitute is given to the employee. As far as s. 113 is concerned, it has no relevance here since it deals only with the review of the decision to dismiss.
In my view then, the respondent's argument relying on The Education Act cannot be entertained and I adopt in this respect the appellant Board's submissions. Section 112's reliance on the employment contract thus brings us to an examination of the terms of that contract.
The relevant portion of the respondent's employment contract is s. 3, which I reproduce again for ease of reference:
3.This Agreement, being the Employees's Contract of Employment with the Board, may be terminated by:
(a)either party serving the other three months notice in writing;
(b)at any time by mutual consent in writing by the parties;
(c)the expiration of the Agreement; or
(d)by resolution of the Board for reasons of just cause provided that the Employee shall be entitled to a fair hearing and investigation pursuant to Section 113 of The Education Act. [Emphasis added.]
Given its interpretation of The Education Act, the Saskatchewan Court of Appeal did not specifically deal with the terms of the contract.
I share Lawton J.'s view that the language of this section is "simple and direct". Under paragraph (a), either party to the agreement can terminate the contract without any requirement that just cause exists. I find it clear that paragraphs (a) and (d) envisage two distinct ways of terminating the employment relationship between the respondent and the appellant Board, i.e., termination for cause (under paragraph (d)) or otherwise simply upon a three months written notice (under paragraph(a)). To interpret this provision in the manner suggested by the respondent, i.e., that termination after three months' notice under paragraph (a) could only apply if there exists just cause, would run contrary to the plain meaning of that section and in particular would strip of any meaning the conjunction "or" between paragraphs (c) and (d). Furthermore, such an interpretation would oblige the Board to give the respondent three months' notice even in the case of a dismissal for negligent or fraudulent conduct, a conclusion so extreme that it could not reasonably be supported by the terms of the provision.
I can only conclude that the respondent's employment could be terminated even without just cause upon three months' notice pursuant to paragraph 3(a) of the employment contract. This, however, is not the end of the matter.
2. Procedural Fairness
The conclusion that the respondent's employment could be legally terminated without a showing of just cause does not necessarily entail that the procedure involved can be arbitrary. There may be a general right to procedural fairness, autonomous of the operation of any statute, depending on consideration of three factors which have been held by this Court to be determinative of the existence of such a right (Cardinal v. Director of Kent Institution, supra). If consideration of these factors in the context of the present appeal leads to the conclusion that the respondent was entitled to procedural fairness, The Education Act and, in this case, the terms of the contract of employment, must then be considered to determine whether this entitlement is either limited or excluded entirely. It should be noted at this point that the duty to act fairly does not depend on doctrines of employment law, but stems from the fact that the employer is a public body whose powers are derived from statute, powers that must be exercised according to the rules of administrative law. It is in that context that the employee-employer relationship between the respondent and the appellant Board must be examined, with the result that the analysis must go beyond the contract of employment to encompass arguments of public policy.
Obviously, if either the statute or the contract confers upon the employee a right to procedural fairness, there is no need to consider the factors I have alluded to above in order to determine the existence of a similar general right, such a right becoming redundant. Since, however, I believe that in the case at bar neither the statute nor the contract do accord such a right, I will begin with an analysis of those factors.
A. General Duty of Fairness
The existence of a general duty to act fairly will depend on the consideration of three factors: (i) the nature of the decision to be made by the administrative body; (ii) the relationship existing between that body and the individual; and (iii) the effect of that decision on the individual's rights. This Court has stated in Cardinal v. Director of Kent Institution, supra, that whenever those three elements are to be found, there is a general duty to act fairly on a public decision-making body (Le Dain J. for the Court at p. 653).
(i) The Nature of the Decision
There is no longer a need, except perhaps where the statute mandates it, to distinguish between judicial, quasi-judicial and administrative decisions. Such a distinction may have been necessary before the decision of this Court in Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police, [1979] 1 S.C.R. 311. Prior to this case, the "duty to act judicially" was thought to apply only to tribunals rendering decisions of a judicial or quasi-judicial nature, to the exclusion of those of an administrative nature. Following Nicholson, that distinction became less important and was found to be of little utility since both the duty to act fairly and the duty to act judicially have their roots in the same general principles of natural justice (see Syndicat des employés de production du Québec et de l'Acadie v. Canada (Canadian Human Rights Commission), [1989] 2 S.C.R. 879, at pp. 895-96, per Sopinka J. for the majority).
On the other hand, not all administrative bodies are under a duty to act fairly. Over the years, legislatures have transferred to administrative bodies some of the duties they have traditionally performed. Decisions of a legislative and general nature can be distinguished in this respect from acts of a more administrative and specific nature, which do not entail such a duty (see Dussault and Borgeat, Traité de droit administratif, t. III, 2nd ed., at p. 370; Attorney General of Canada v. Inuit Tapirisat of Canada, [1980] 2 S.C.R. 735, at p. 758, per Estey J. for the Court). The finality of the decision will also be a factor to consider. A decision of a preliminary nature will not in general trigger the duty to act fairly, whereas a decision of a more final nature may have such an effect (Dussault and Borgeat, op. cit., at p. 372).
In the case at bar, the decision made by the appellant Board was of a final and specific nature, directed as it was at terminating the employment of the respondent. As such, the decision to dismiss could possibly entail the existence of a duty to act fairly on the part of the appellant Board.
(ii) The Relationship Between the Employer and the Employee
The second element to be considered is the nature of the relationship between the Board and the respondent. In an oft-cited decision of the House of Lords, Ridge v. Baldwin, [1963] 2 All E.R. 66, Lord Reid classified the possible employment relationship between an employer and an employee into three categories (at pp. 71-72): (i) the master and servant relationship, where there is no duty to act fairly when deciding to terminate the employment; (ii) the office held at pleasure, where no duty to act fairly exists, since the employer can decide to terminate the employment for no other reason than his displeasure; and (iii) the office from which one cannot be removed except for cause, where there exists a duty to act fairly on the part of the employer. These categories are creations of the common law. They can of course be altered by the terms of an employment contract or the governing legislation, with the result that the employment relationship may fall within more than one category (see Nova Scotia Government Employees Association v. Civil Service Commission of Nova Scotia, [1981] 1 S.C.R. 211, at p. 222, per Laskin C.J. for the majority). Lord Reid did not examine the possible implications of the non-renewal of a fixed-term employment contract, but since it was not alleged in the present appeal that the employment was terminated by non-renewal of the employee's contract, I will not address this question.
In the case at bar, the office held by the respondent was not of a "pure" master and servant type since it encompassed some elements of a public nature. The office of director of education is established by s. 106 of The Education Act, which requires the Board to appoint a director. His duties are at least partly set out in ss. 107 and 108 of The Education Act. These sections provide that:
106(1) Subject to subsections (2) and (3), a board of education shall appoint a director of education and shall appoint a secretary and a treasurer, or a secretary treasurer, who meet the qualifications prescribed by the regulations, and, in addition, may appoint such other officials, assistants and support personnel as the board may consider necessary for the proper and efficient administration of the business of the division.
. . .
107 The director shall be designated as the chief executive