Ridke v. Coulson Aircrane Ltd.

Ridke v. Coulson Aircrane Ltd.
Court (s) Database
Federal Court Decisions
Date
2013-11-25
Neutral citation
2013 FC 1183
File numbers
T-1785-12
Decision Content
Date: 20131125
Docket:
T-1785-12
Citation: 2013 FC 1183
Ottawa, Ontario, November 25, 2013
PRESENT: The Honourable Mr. Justice Russell
BETWEEN:
KLAUSE RIDKE
Applicant
and
COULSON AIRCRANE LTD.
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1] This is an action commenced by the Applicant under Part III of the Canada Labour Code, RSC 1985, c L-2 (Code) for judicial review of the decision dated 28 August 2012 (Decision) of a Human Resources and Skills Development Canada (HRSDC) inspector (Inspector) to inspect and order payment of overtime to the Applicant for a retroactive period limited to 12 months.
BACKGROUND
[2] The Applicant has been an employee of the Respondent since 1 June 2001. He is currently in receipt of long-term disability benefits and unable to work. The Respondent is a British Columbia company engaged in helicopter logging and aviation-based fire-fighting throughout North America.
[3] During his employment with the Respondent, the Applicant typically worked long hours: 60-100 hours per week while dispatched to remote locations. In many instances, the Respondent paid the Applicant at a regular rate for hours which constituted “overtime” as that term is defined in the Code. The Applicant has provided records of unpaid overtime dating back to 2008. However, the Applicant did not keep records for each and every pay period, and does not have records of many instances where he worked overtime hours.
[4] On 6 February 2012, the Applicant made a complaint to HRSDC claiming payment for unpaid overtime under Part III of the Code. The Applicant submitted payroll records showing unpaid overtime for various periods in 2008, 2009, 2010 and 2011, and requested that HRSDC investigate and order payment for a retroactive period of 72 months.
[5] On 3 May 2012, the Respondent wrote to the Inspector objecting to the complaint and alleging that the Applicant was excluded from certain provisions of the Code by the nature of his employment. On 31 May 2012, the Inspector corresponded with the Respondent, informing it that this was not the case. At this time, the Inspector also requested the Respondent’s payroll records for 6 February 2011 – 6 February 2012. The records were again requested on 20 June 2012.
[6] On 13 June 2012, the Respondent provided records to the Inspector. These included records of payments made to the Applicant for “General Holidays” (as that term is defined in the Code). These records were supplemented at the Inspector’s request on 31 July 2012.
[7] On 11 July 2012, the Applicant wrote to the Inspector requesting that the investigation be made retroactive for a period of 36 or 72 months. On 16 July 2012, the Inspector wrote to the Applicant stating that retroactivity of the investigation would be limited to 12 months pursuant to HRSDC policy. On 1 August 2012, the Inspector wrote to the Respondent informing it that she had made a “preliminary determination” that $11,747.45 was owed to the Applicant for overtime and vacation pay for the period of 26 July 2010 to 31 July 2011. The Respondent was given 15 days to make payment to the Applicant.
[8] On 14 August 2012, the Applicant wrote the Inspector requesting copies of the records provided by the Respondent, alleging that overtime had been calculated incorrectly for General Holidays in the preliminary determination, and again requesting that retroactivity of the investigation of the complaint be extended.
[9] On 23 August 2012, the Respondent wrote the Inspector objecting to any review of additional records.
[10] On 28 August 2012, the Inspector responded to the Applicant with her formal refusal to extend the investigation of the complaint beyond 12 months. This is the Decision under review in this application.
[11] As the Respondent voluntarily agreed to pay the amount from the preliminary determination, no “Payment Order” was issued. The only internal avenue of appeal under the Code is under section 251.11, which requires that a Payment Order have been issued. On 10 September 2012, the Applicant accepted payment from the Respondent of the amount determined by the Inspector in the preliminary determination, but on a without prejudice basis with respect to this application for judicial review. On 25 September 2012, the Applicant filed this application.
DECISION UNDER REVIEW
[12] The Decision was based upon an HRSDC Complaint Handling Directive (Policy), which is attached as Exhibit P to the Affidavit of the Applicant. The Inspector found that retroactivity for a 72 or 36 month period was “not warranted” because:
• The Respondent was not aware that it was not in compliance with the Code;
• The Respondent received no counselling with respect to the Code;
• The Respondent did not have a history of non-compliance with the Code;
• The Applicant accepted the terms/practice of employment during this period without taking any action to remedy it;
• The Respondent has cooperated with the investigation;
• The Respondent is in agreement to issue a voluntary payment of the preliminary determination.
[13] Subsection 7.7(k) of the Policy directs inspectors to limit the period of retroactivity of investigations to 12 months from the date of non-compliance. Subsection 7.7(l) states that investigations may be extended to an additional period of retroactivity based on a review of the “scope of the infraction(s), the length of time that the identified underpayment(s) has(ve) been occurring, and the compliance history of the employer.” Subsection 7.7(m) says that retroactivity is not to extend past 36 months “unless clear documenting evidence is available to support the claim and approval has been obtained from regional management.”
[14] The Inspector found that, based on the evidence presented by the parties, the Applicant’s request for wages and other amounts owing for either a 72 month period or 36 month period was not warranted.
STATUTORY PROVISIONS
[15] The following provisions of the Code are applicable in this proceeding:
Definitions
166. In this Part,
[…]
“standard hours of work”
“standard hours of work” means the hours of work established pursuant to section 169 or 170 or in any regulations made pursuant to section 175;
[…]
“overtime”
“overtime” means hours of work in excess of standard hours of work;
[…]
“general holiday”
“general holiday” means New Year’s Day, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving Day, Remembrance Day, Christmas Day and Boxing Day and includes any day substituted for any such holiday pursuant to section 195;
[…]
Saving more favourable benefits
168. (1) This Part and all regulations made under this Part apply notwithstanding any other law or any custom, contract or arrangement, but nothing in this Part shall be construed as affecting any rights or benefits of an employee under any law, custom, contract or arrangement that are more favourable to the employee than his rights or benefits under this Part.
[…]
Standard hours of work
169. (1) Except as otherwise provided by or under this Division
(a) the standard hours of work of an employee shall not exceed eight hours in a day and forty hours in a week; and
(b) no employer shall cause or permit an employee to work longer hours than eight hours in any day or forty hours in any week.
[…]
Weekly or monthly pay not to be reduced for holiday
196. (1) Where the wages for an employee are calculated on a weekly or monthly basis, the weekly or monthly wages of the employee shall not be reduced for a week or month in which a general holiday occurs by reason only that the employee did not work on the general holiday.
Pay at daily or hourly rate
(2) An employee whose wages are calculated on a daily or hourly basis shall, for a general holiday on which the employee does not work, be paid at least the equivalent of the wages the employee would have earned at his regular rate of wages for his normal hours of work.
[…]
Additional pay for holiday work
197. Except in the case of an employee employed in a continuous operation, an employee who is required to work on a day on which the employee is entitled under this Division to a holiday with pay shall be paid, in addition to his regular rate of wages for that day, at a rate at least equal to one and one-half times his regular rate of wages for the time that the employee worked on that day.
[…]
Appeal
251.11 (1) A person who is affected by a payment order or a notice of unfounded complaint may appeal the inspector’s decision to the Minister, in writing, within fifteen days after service of the order, the copy of the order, or the notice.
Payment of amount
(2) An employer or a director of a corporation may not appeal from a payment order unless the employer or director pays to the Minister the amount indicated in the payment order, subject to, in the case of a director, the maximum amount of the director’s liability under section 251.18.
[…]
Order to pay arrears of wages
258. (1) Where an employer has been convicted of an offence under this Part in respect of any employee, the convicting court shall, in addition to any other punishment, order the employer to pay to the employee any overtime pay, vacation pay, holiday pay or other wages or amounts to which the employee is entitled under this Part the non-payment or insufficient payment of which constituted the offence for which the employer was convicted.
[…]
Définitions
166. Les définitions qui suivent s’appliquent à la présente partie.
[…]
« durée normale du travail »
« durée normale du travail » La durée de travail fixée sous le régime des articles 169 ou 170, ou par les règlements d’application de l’article 175.
[…]
« heures supplémentaires »
Heures de travail effectuées au-delà de la durée normale du travail.
[…]
« jours fériés »
« jours fériés » Le 1er janvier, le vendredi saint, la fête de Victoria, la fête du Canada, la fête du Travail, le jour de l’Action de grâces, le jour du Souvenir, le jour de Noël et le lendemain de Noël; s’entend également de tout jour de substitution fixé dans le cadre de l’article 195.
[…]
Sauvegarde des dispositions plus favorables
168. (1) La présente partie, règlements d’application compris, l’emporte sur les règles de droit, usages, contrats ou arrangements incompatibles mais n’a pas pour effet de porter atteinte aux droits ou avantages acquis par un employé sous leur régime et plus favorables que ceux que lui accorde la présente partie.
[…]
Règle générale
169. (1) Sauf disposition contraire prévue sous le régime de la présente section :
a) la durée normale du travail est de huit heures par jour et de quarante heures par semaine;
b) il est interdit à l’employeur de faire ou laisser travailler un employé au-delà de cette durée.
[…]
Interdiction
196. (1) Il est interdit de faire subir à l’employé rémunéré à la semaine ou au mois une quelconque réduction de salaire pour la seule raison qu’il n’a pas travaillé un jour férié durant une semaine ou un mois donné.
Rémunération journalière ou horaire
(2) L’employé rémunéré à la journée ou à l’heure reçoit, pour tout jour férié où il ne travaille pas, au moins l’équivalent du salaire qu’il aurait gagné, selon son taux horaire ou quotidien, pour une journée normale de travail.
[…]
Majoration pour travail effectué un jour de congé
197. Sauf s’il est occupé à un travail ininterrompu, l’employé qui est tenu de travailler un jour de congé payé touche son salaire normal pour ce jour et, pour les heures de travail fournies, une somme additionnelle correspondant à au moins une fois et demie son salaire normal.
[…]
Appel
251.11 (1) Toute personne concernée par un ordre de paiement ou un avis de plainte non fondée peut, par écrit, interjeter appel de la décision de l’inspecteur auprès du ministre dans les quinze jours suivant la signification de l’ordre ou de sa copie, ou de l’avis.
Consignation du montant visé
(2) L’employeur et l’administrateur de personne morale ne peuvent interjeter appel d’un ordre de paiement qu’à la condition de remettre au ministre la somme visée par l’ordre, sous réserve, dans le cas de l’administrateur, du montant maximal visé à l’article 251.18.
[…]
Ordonnance de paiement
258. (1) Sur déclaration de culpabilité pour infraction à la présente partie à l’endroit d’un employé, le tribunal, en sus de toute autre peine, doit ordonner à l’employeur en cause de verser à l’employé le salaire et les prestations — notamment heures supplémentaires, indemnité de congé annuel ou de jour férié — auxquels celui-ci a droit aux termes de la présente partie et dont le défaut de paiement a constitué l’infraction.
[…]
ISSUES
[16] The Applicant raises the following issues in this application:
a. Is the Policy contrary to the Code?
b. Are the Policy and the Decision ultra vires the statutory grant of power afforded to the HRSDC and its inspectors?
c. If the answer to the above two questions is negative, is the Decision unreasonable?
STANDARD OF REVIEW
[17] The Supreme Court of Canada in Dunsmuir v New Brunswick, 2008 SCC 9 [Dunsmuir] held that a standard of review need not be conducted in every instance. Instead, where the standard of review applicable to a particular question before the court is settled in a satisfactory manner by past jurisprudence, the reviewing court may adopt that standard of review. Only where this search proves fruitless, or where the relevant precedents appear to be inconsistent with new developments in the common law principles of judicial review, must the reviewing court undertake a consideration of the four factors comprising the standard of review analysis: Agraira v Canada (Public Safety and Emergency Preparedness), 2013 SCC 36 at para 48 [Agraira].
[18] The Applicant submits that the first two issues are reviewable on a correctness standard, as they relate to questions of law. The Respondent alleges that all of the issues involved in this application are matters of fact, and that a reasonableness standard applies. I agree with the Applicant that the first two issues raise questions of law. However, questions of law do not always attract review on a standard of correctness, and further analysis is required.
[19] I have not been referred to any authorities that directly address the standard of review applicable to decisions of inspectors under the Code on questions of law, or to policy directives issued by an Assistant Deputy Minister of HRSDC that relate to the implementation of the Code. However, there is a more general body of jurisprudence that, in my view, resolves the question of the standard of review in a satisfactory manner. Having reviewed the relevant precedents, I agree with the Applicant that a correctness standard applies to issues a. and b. above. This conclusion is confirmed if one looks to the four factors set out in Dunsmuir for a standard of review analysis.
[20] The case of Miller v Canada (Minister of Labour), 2012 FC 136, cited by the Respondent, addresses review of determinations by an inspector on mixed questions of fact and law (see para 14). Similarly, in Ocean Steel & Construction Ltd. v Arseneault, 2011 FC 637, Justice O’Keefe applied a standard of reasonableness to factual and mixed fact and law determinations by an inspector, but did not resolve the question of the standard of review applicable to determinations of law by an inspector.
[21] The standards of review applicable to decisions of referees under the Code have received greater consideration by the Courts, but given the difference in roles and the fact that a privative clause applies to decisions of referees with respect to Part III of the Code, I hesitate to apply these cases directly to the current circumstances. As a point of reference, most cases have concluded that decisions of a referee under the Code are reviewable on a standard of correctness if they were questions of law, and on a standard of reasonableness if they are questions of fact or mixed fact and law: see Delaware Nation, above, at para 12, citing Dynamex Canada Inc. v Mamona, 2003 FCA 248 at para 45 [Dynamex]; see also Crouse v Commissionaires Nova Scotia, 2011 FC 125 at para 23, aff’d 2012 FCA 4. However, the Federal Court of Appeal has also stated that “referees generally have more expertise in matters of labour standards than this Court,” and has suggested they should be entitled to deference “in a decision as to the specific entitlement of an employee to a remedy under Part III of the Canada Labour Code, even if the decision involves a question of statutory interpretation of the referee’s home legislation”: Dynamex, above at para 39.
[22] Since these cases are not directly applicable, it is necessary to look to broader principles on the standard of review. In addition to setting out the factors for a standard of review analysis, Dunsmuir, above and subsequent cases have set out a series of presumptions to assist the Court in determining the appropriate standard of review. The following presumptions have specific relevance to questions of law:
• A standard of reasonableness will normally apply where a tribunal is interpreting its enabling (or “home”) statute, or statutes closely connected to its function: Dunsmuir, above, at para 54; Alberta (Information and Privacy Commissioner) v Alberta Teachers’ Association, 2011 SCC 61 at para 34 [ATA];
• Correctness is the appropriate standard where the question is one of general law “that is both of central importance to the legal system as a whole and outside the adjudicator’s specialized area of expertise”: Dunsmuir, above, at para 60;
• Correctness is the standard of review for constitutional questions (Dunsmuir, above, at para 58), though a reasonableness standard applies when reviewing tribunal decisions on whether an exercise of discretion has violated the Charter (Doré v Barreau du Québec, 2012 SCC 12);
• A standard of correctness applies with respect to “true issues of jurisdiction or vires” (Dunsmuir, above, at para 59), and with respect to the jurisdictional lines between competing specialized tribunals (Dunsmuir, above, at para 61), though as discussed below the relevance of the former category is now questionable.
[23] The issues raised in the present case are not constitutional questions, nor do they raise questions of law of central importance to the legal system as a whole. While it might be argued that they raise “true questions of jurisdiction or vires,” in my view they do not. The Supreme Court has narrowly construed this category of questions, and “reviewing judges must not brand as jurisdictional issues that are doubtfully so” (Dunsmuir, above, at para 59; C.U.P.E., Local 963 v New Brunswick Liquor Corporation, [1979] 2 SCR 227 at 233). Not every allegation of action in excess of jurisdiction raises a “true question of jurisdiction,” as this would encompass many if not most of the legal questions that arise in judicial review applications. In fact, the Supreme Court has explicitly questioned the existence or usefulness of the category of “true questions of jurisdiction”: see ATA, above, at para 34, per Justice Rothstein and para 80, per Justice Binnie.
[24] In my view, it is more accurate to characterize the issues stated here as matters of statutory interpretation, and specifically the interpretation by administrative decision makers of their own powers and obligations under their enabling statute: ATA, above; Public Service Alliance of Canada v Canadian Federal Pilots Assn., 2009 FCA 223 [Canadian Federal Pilots Assn.].
[25] It now appears settled that a standard of reasonableness will apply to interpretations by an administrative tribunal of “its own statute or statutes closely connected to its function,” except perhaps in an exceptional situation: ATA, above at para 33-34; see also Canadian Federal Pilots Assn., above, at paras 36-51. However, there is less clarity about the proper standard of review where the decision-maker interpreting its own or a closely related statute is not an administrative tribunal, but rather a Minister or their delegate.
[26] In Canada (Fisheries and Oceans) v David Suzuki Foundation, 2012 FCA 40 (sub nom Georgia Strait Alliance v Canada (Minister of Fisheries and Oceans)) [David Suzuki], the Federal Court of Appeal held that the principles of deference that have developed in relation to adjudicative tribunals should not be applied to administrative decision makers acting in a non-adjudicative capacity, unless Parliament has provided otherwise (see also Public Mobile Inc. v Canada (Attorney General), 2011 FCA 194; Toussaint v Canada (Attorney General), 2011 FCA 213). This was based on the Court’s conclusion that the constitutional principles of the rule of law and Parliamentary supremacy apply differently in these two distinct contexts. Briefly, the rule of law requires that “all exercises of public authority must find their source in law,” and “[j]udicial review is the means by which the courts supervise those who exercise statutory powers, to ensure that they do not overstep their legal authority”: Dunsmuir, above, at para 28. This is “the constitutional foundation which explains the purpose of judicial review” (Dunsmuir, above, at para 27). With respect to adjudicative tribunals, courts have gradually come to the conclusion that by assigning tribunals the responsibility of adjudicating legal rights, and empowering them to decide questions of law in carrying out that responsibility, “Parliament is presumed to have restricted judicial review of that tribunal’s interpretation… of statutes closely connected to its adjudicative function”: David Suzuki, above, at para 96. Thus, the Court’s role in preserving the rule of law is balanced with Parliamentary supremacy, through deference to Parliament’s intentions about who is to have primary responsibility for deciding certain questions of law.
[27] In the view of Justice Mainville, however, this presumption about Parliament’s intent does not apply to a non-adjudicative decision-maker, unless Parliament indicates otherwise (for example, through a privative clause). Since they are not acting as adjudicators, such actors are not presumed to have authority to decide questions of law, with the consequence that no deference is owed on such questions: David Suzuki, above, at para 99; Canadian Federal Pilots Assn., above, at para 51. As the Supreme Court has repeatedly stated, the purpose of the standard of review analysis is to uncover Parliament’s intention regarding the degree of deference that should be afforded to an administrative decision-maker: Dunsmuir, above, at para 30; Pezim v British Columbia (Superintendent of Brokers), [1994] 2 SCR 557 at 589-90. Affording unintended deference to non-adjudicative decision-makers could have the effect of subverting Parliament’s efforts to place careful limits on the powers of executive actors, to the detriment of both Parliamentary supremacy and the rule of law. In the view of Justice Mainville, in the circumstances of the David Suzuki case:
The Minister… [sought] to establish a new constitutional paradigm under which the Executive’s interpretation of Parliament’s laws would prevail insofar as such interpretation is not unreasonable. This harks back to the time before the Bill of Rights of 1689 where the Crown reserved the right to interpret and apply Parliament’s laws to suit its own policy objectives. It would take a very explicit grant of authority from Parliament in order for this Court to reach such a far-reaching conclusion.
[David Suzuki, above, at para 98]
[28] The principle set out in David Suzuki has been applied both by this Court and the Federal Court of Appeal in subsequent cases, and in a wide range of contexts: Takeda Canada Inc. v Canada (Minister of Health), 2013 FCA 13 [Takeda]; Sheldon Inwentash and Lynn Factor Charitable Foundation v Canada, 2012 FCA 136 at paras 20-23; Bartlett v Canada (Attorney General), 2012 FCA 230 at para 46; Attawapiskat First Nation v Canada, 2012 FC 948 at paras 64-67; Kandola v Canada (Citizenship and Immigration), 2013 FC 336 at para 21; UHA Research Society v Canada (Attorney General), 2013 FC 169 at paras 6 and 8; see also Prescient Foundation v Canada (National Revenue), 2013 FCA 120 at para 13; Lau v Canada (Public Safety and Emergency Preparedness), 2012 FC 788 at para 24.
[29] In Takeda, above, Justice Dawson (Justice Pelletier concurring) followed David Suzuki, above and found that no presumption of deference applied with respect to the Minister of Health’s interpretation of certain provisions of the Food and Drug Regulations, CRC c 870. Justice Stratas (concurring) found that a presumption of reasonableness review did apply, citing the analysis in ATA, above, but that this presumption was overcome on the basis of a standard of review analysis, with all relevant factors leaning in favour of a correctness review. Specifically: the nature of the question was purely legal; no privative clause applied; the Minister had no expertise in legal interpretation; and there was nothing in the structure of the Act or regulatory regime that suggested that the Court should defer to the Minister’s decision. Thus, the Court of Appeal was unanimous in finding that a standard of correctness applied.
[30] In my view, an analysis of the Dunsmuir factors in the present case yields a very similar result to that carried out by Justice Stratas in Takeda, above: no privative clause applies; the decision-maker functions an a narrowly circumscribed role under the Code which does not involve explicit or implicit powers to decide legal questions; the nature of the questions raised by issues a. and b. is purely legal in nature; and the decision-makers do not have any particular expertise in legal interpretation. In sum, there is nothing in the statutory scheme that would indicate an intention by Parliament that the Court should defer to legal interpretations by these actors.
[31] In sum, the precedent established in David Suzuki, above, indicates that correctness is the appropriate standard of review for issues a. and b. in this case, and this view is confirmed by an analysis of the standard of review factors from Dunsmuir, above.
[32] The third issue involves issues of fact and the Inspector’s application of the Policy and the Code. These are matters that are reviewable on a reasonableness standard, and the Applicant agrees that reasonableness is the standard that ought to be applied. Reasonableness was also the standard applied in Delaware Nation v Logan, 2005 FC 1702 [Delaware Nation].
[33] When reviewing a decision on the standard of reasonableness, the analysis will be concerned with “the existence of justification, transparency and intelligibility within the decision-making process [and also with] whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.” See Dunsmuir, above, at para47, and Canada (Minister of Citizenship and Immigration) v Khosa 2009 SCC 12 at para 59. Put another way, the Court should intervene only if the Decision was unreasonable in the sense that it falls outside the “range of possible, acceptable outcomes which are defensible in respect of the facts and law.”
ARGUMENTS
The Applicant
Factual Errors in the Decision
[34] The Applicant first points out that the Inspector based her conclusions on some factual errors, which render the Decision unsound. These are discussed in more detail below.
a) The Respondent was aware that it was not in compliance with the Code
[35] The fact that the Respondent was “not aware” that it was not in compliance with the Code was cited as a factor in the Decision. Presumably, this is based on the Respondent’s assertion that it believed that Applicant fell under the Motor Vehicle Operators Hours of Work Regulations, CRC, c 990, whereby his “standard hours of work” would be 60 hours. However, even putting aside the fact that the Respondent is a sophisticated employer and this is not a reasonable assumption, the Applicant was paid at a regular rate for hours in excess of the 60-hour standard for 20 weeks even within the 12 month period for which the Inspector limited the investigation.
[36] Furthermore, the Inspector herself commented on this irregularity in correspondence with the Respondent (see page 12 of the Certified Record). Not only was it not reasonable to conclude that the Respondent was not aware that it was in contravention of the Code in these circumstances, it is clear that the Inspector was aware that a contravention of the Code was occurring, even on the standard alleged to be appropriate by the Respondent itself.
b) The Inspector’s calculations erred with respect to general holidays
[37] The Inspector’s calculation of overtime is attached as Exhibit L to the Applicant’s Affidavit. In calculating overtime, the Inspector appears to have reduced the “standard hours of work” by 8 hours for each week in which a General Holiday fell. The amount of overtime was then calculated at 1.5 of the Applicant’s wage.
[38] The records provided by the Respondent (pages 33-100, Certified Record) indicate that the Applicant was paid for the following hours on “General Holidays”:
• 10 hours on 6 September 2010;
• 20 hours (double time) on 11 November 2010;
• 8 hours on each of 27 & 28 December 2010 and 3 January 2011;
• 22 hours (double time plus 2) on 22 April 2011;
• 20 hours (double time) on 23 May 2011;
• 10 hours on 1 July 2011.
[39] The records also indicate that the Applicant attended work on at least 11 November 2010, 22 April 2011, and 23 May 2011.
[40] Section 192 of the Code requires that employees be granted a holiday with pay on each general holiday. Under section 197, employees are to be paid at least 2.5 times their wages for general holidays on which they are working. On the basis of the above, and on even a conservative estimate, the preliminary determination failed to recognize a further $1,500 in overtime wages owed to the Applicant. The Applicant submits that this is plainly unreasonable.
[41] It should also be noted that the fact that the Respondent voluntarily paid the amount in the preliminary determination means that there are no avenues of appeal left open to the Applicant if the Decision is left to stand. Thus, it is the Applicant’s submission that this error of fact should be given special consideration in the review of the Decision. In the alterative, the Applicant submits that the Court’s review should be extended to the preliminary determination, as there would be no prejudice to the parties, and the Court has the wide jurisdiction to do so (Nunavut Tunngavik Inc. v Canada Attorney General), 2004 FC 85 at paras 8-9).
Errors of Law in the Decision
c) Ignorance of the law is not an excuse for relief from it
[42] The Applicant points out that the principle that ignorance of the law is no excuse for a breach thereof is long-established (Bilbie v Lumley, (1802) 102 ER 448 at 472). The Federal Court of Appeal reaffirmed this principle in Makhija v Canada (Attorney General), 2010 FCA 342 [Makhija] at paras 6-7, stating that “errors of law” are not an acceptable excuse for a breach thereof. At para 8 of Makhija the Court said “…the evidence shows that at best the applicant was negligent in not enquiring, and at worst wilfully blind, as to the scope of the [Lobbyists’ Code of Conduct] and his obligations under it.”
[43] It cannot be the Respondent’s position that it was unaware it would have to pay overtime to employees in certain circumstances. Nor can it be maintained that the Respondent was unaware its employment practices were subject to regulation under the Code (or otherwise). In any event, even if the Respondent was ignorant in either respect, such a lack of knowledge is not a valid excuse at law for the failure to meet its statutory obligations.
[44] On this basis, the Applicant submits it was an error of law and clearly incorrect for the Inspector to consider the Respondent’s assertion that it was unaware of its non-compliance and had not yet been counselled as a reason for relief from its obligations under the Code.
d) Parties cannot agree or contract out of the minimum standards of the Code
[45] A factor considered in the Inspector’s Decision was that the Applicant had “accepted the practice/terms of employment.” The Applicant points out that the standards contained in Part III of the Code are absolute minimums and are expressly restrained from modification to less favourable terms under section 168. Furthermore, the Code contains no limitation period for a claim of unpaid overtime (Delaware Nation, above, at paras 24-27).
[46] The Applicant has a right to payment of overtime under the Code, particularly in circumstances where the Applicant has shown actual entitlement to wages beyond the 12 month period. The reasoning in the Decision effectively permitted an arrangement wholly contrary to the Code.
[47] On this basis, the Applicant submits it was an error of law and clearly incorrect for the Inspector to consider the Applicant’s “acceptance” of payment in violation of the minimum standards of the Code as a reason for restricting the inspector to 12 months.
e) The Policy is invalid
[48] As discussed above, the Code creates a right to payment of overtime wages, with no limitation period for a claim to such. Parliament did not restrict an employee’s right to overtime in any temporal way. Section 264 of the Code allows the Governor in Council to make regulations for carrying out Part II of the Code; that is, calculating and determining wages. No regulations exist limiting the time period over which an employee is entitled to overtime.
[49] By virtue of section 24 and subsection 252(2) of the Code, employers are required to keep records for a period of a minimum of 36 months. However, nothing about this requirement suggests that employees are disentitled to payment for amounts of overtime worked further in the past. In addition, the powers afforded to Inspectors under sections 249-251 of the Code relate only to calculation and process, not the ability to defeat substantive rights afforded by Parliament.
[50] As Justice Michael Phelan pointed out at paras 24-25 of Delaware Nation, above:
The [Employer] argued that [the referee] erred in not limiting the period for which overtime is due to the last three years. The [Employer’s] position is that since the Code imposes a three-year limitation period in respect of penalties and the Standards regulations requires employers to retain employment records for three years, Parliament must have intended a three-year limitation period on other claims. The [Employer] further argues that it is only just and fair to impose a three-year limitation since the [Employer] was not culpable in failing to pay overtime.
In the face of the limitation period for specific matters such as penalties and document retention, the fact that Parliament has not seen fit to establish a more general limitation period suggests that it deliberately refrained from doing so. It is not the Court's function to create a limitation period.
[51] The Applicant submits that there is no legal authority within the Code or the applicable regulations enabling the HRSDC or the Inspector to restrict the Applicant’s right to payment of unpaid overtime where that right has accrued.
[52] This principle was explained by the Alberta Court of Queen’s Bench in Skyline Roofing Ltd v Alberta (Workers’ Compensation Board), 2001 ABQB 624 [Skyline Roofing] at paras 77-78:
77 Administrative tribunals cannot rigidly apply informal policies without running into the argument that they have "fettered their discretion". An administrative tribunal must always be open-minded about the issues that come before it, and must be prepared to hear arguments as to why the policy should or should not be applied in a particular factual situation: S.(M.) v. Alberta (Crimes Compensation Board) (1998), 65 Alta. L.R. (3d) 339, 216 A.R. 156, 160 D.L.R. (4th) 567 (C.A.).
78 Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557, [1994] 7 W.W.R. 1, 114 D.L.R. (4th) 385 concerned certain policies of the British Columbia Securities Commission. Iacobucci, J. recognized the right of the Commission to adopt policies, even absent statutory authority, but stated at p. 596:
However, it is important to note that the Commission's policy-making role is limited. By that I mean that their policies cannot be elevated to the status of law; they are not to be treated as legal pronouncements absent legal authority mandating such treatment.
The same point was made in Maple Lodge Farms Ltd. v. Canada, [1982] 2 S.C.R. 2, 137 D.L.R. (3d) 558. In this case the Applicant was denied a permit to import chickens, even though it complied with a Ministerial guideline on the subject. McIntyre, J. commented at pp. 6-7 in dismissing the appeal:
The discretion is given by the Statute and the formulation and adoption of general policy guidelines cannot confine it. There is nothing improper or unlawful for the Minister charged with responsibility for the administration of the general scheme provided for in the Act and Regulations to formulate and to state general requirements for the granting of import permits. It will be helpful to applicants for permits to know in general terms what the policy and practice of the Minister will be. To give the guidelines the effect contended for by the appellant would be to elevate ministerial directions to the level of law and fetter the Minister in the exercise of his discretion. Le Dain J. [in the Federal Court of Appeal] dealt with this question at some length and said, at [[1981] 1 F.C. 500] p. 513:
The Minister may validly and properly indicate the kind of considerations by which he will be guided as a general rule in the exercise of his discretion (see British Oxygen Co. Ltd. v. Minister of Technology, [1971] A.C. 610; Capital Cities Communications Inc. v. Canadian Radio-Television Commission [1978] 2 S.C.R. 141, at pp. 169-171), but he cannot fetter his discretion by treating the guidelines as binding upon him and excluding other valid or relevant reasons for the exercise of his discretion (see Re Hopedale Developments Ltd. and Town of Oakville, [1965] 1 O.R. 259).
Thus, an informal policy can neither be used to fetter a discretion, nor to create legally enforceable rights.
[53] A policy cannot be used to defeat a legally enforceable right, particularly in the situation where the statute does not grant discretion to do so. Additionally, Skyline Roofing, above, stands for the principle that a policy cannot conflict with the statute from which it purports to derive its authority.
[54] The British Columbia Court of Appeal dealt with a similar situation in Jozipovic v British Columbia (Workers’ Compensation Board), 2012 BCCA 174 [Jozipovic]. In that case, the provincial Workers Compensation Act¸ RSBC 1996, c 492 set out a method for payment of lost wages, and a policy modified these circumstances. The Court found the policy invalid to the extent that it conflicted with the Workers Compensation Act, and said at paras 94-100:
Policy #40.00 prevents the Board from making a key determination that it is required to make under s. 23(3). It prohibits the Board from considering the appropriateness of the amount of compensation in any case where the worker retains the essential skills of his or her pre-injury occupation, or those of another occupation which is similar to it. Nothing in s. 23 authorizes the Board to ignore the inadequacy of compensation simply because the worker is able, at some level, to continue in an occupation, or adapt to an occupation that is, in some respects, similar to it.
[…]
Policy #40.00 does not, in fact, leave the Board with any discretion to apply the Loss of Earnings Method where an exceptional shortfall of compensation stands “on its own”. I