In the Matter of a Complaint of Alleged Unjust dismissal under Part III of the Canada labour Code
BETWEEN:
Arlene Morrison
COMPLAINANT
AND:
Gitanmaax Band
RESPONDENT
Adjudicator: Ib S. Petersen
FILE NO.: YM2707-8572
HEARING DATE: November 29, 2010
DECISION DATE: January 27, 2011
Appearances:
Ms. Dianna Shannoss, Executive Director, representative for the Gitanmaax Band (the “Band”)
Ms. Tammy Baskin, Coordinator, Social Development, for the Band
Ms. Arlene Morrison, on her own behalf
Ms. Ardythe Wilson, former Band councilor, via telephone conference, for Ms. Morrison
Introduction
On September 3, 2010, the Minister of Labour appointed me as the adjudicator to hear Ms. Arlene Morrison’s complaint of unjust dismissal by the Band (Section 240 of the Canada Labour Code, R.S.C. 1985, c. L-2). The Band terminated her employment on July 31, 2009, effective August 31, 2009.
By consent I convened a hearing in Hazelton, British Columbia on November 29 and 30, 2010. The parties were able to complete their evidence and submissions in one day.
Neither part raised any issue about my jurisdiction to hear the complaint, other than the issue of restructuring.
Issue(s)
The issue is whether the Band’s termination of Ms. Morrison’s employment was a bona fide restructuring, such that I do not have jurisdiction to adjudicate her complaint under the Canada Labour Code?
Facts and Background
Ms. Morrison worked in various positions for the Band between June 2008 and the end of August 2009. When she was discharged, she worked as the Recreation Coordinator, at $15.00 per hour. Previously she worked as acting Coordinator, Social Development, at a higher hourly rate. She applied for, but did not get, the position of Coordinator, Social Development. The Band filled the position with the person, who had previously held it, Ms. Baskin. In turn, the Band offered Ms. Morrison the position of Recreation Coordinator.
The Band terminated Ms. Morrison’s employment on July 31, effective August 31, 2009. The termination letter provides:
Dear Arlene:
At a duly convened Gitanmaax Band Council meeting held on July 24, 2009 a decision was made to restructure the Brighter Futures Program. The purpose of the restructuring is to revamp the entire program so that it adopts a new service delivery model to service the membership while not being centred on the drop in as we have run it up until now. Council also recognizes that the positions within the Brighter Futures Programs are not recognized enough with raises due solely to the budgetary constraints as well as there being no room for advancement within the program.
In striving to work towards this new service delivery model, the postings for the Recreation Coordinator will run from August 6 to August 24, 2009. Your current position of Recreation Coordinator will cease on August 31, 2009. The Recreation Coordinator position will now be offered as a contract 12 month term position.
Please feel welcome to apply for this posting. Council does recognize your dedication and time with the band and are appreciative of your devotion. I would also like to thank you for your hard work and effort.
Please contact myself or Pauline should you require any further information regarding this matter.
Respectfully,
“signed”
Tammy Baskin
Social Development
At the hearing, Ms. Baskin testified for the Band. No member of the Band Council testified at the hearing. Ms. Wilson, a past Band councilor, testified for Ms. Morrison.
Ms. Baskin explained that the termination, as noted in the July 31 letter, was the result of restructuring, decided by the Band Council, of Ms. Morrison’s position and that of another employee, the Event Coordinator. The Band Council decided to convert the two positions into 12-months fixed term positions to provide more employment and training opportunities for members of the Band, in, what the Band Council considered, entry-level positions. At the time of the hearing, according to Ms. Baskin, the “restructuring” was still ongoing, and the Band had a general notion of placing less emphasis on the “drop-in concept,” that was part of the Brighter Futures Program, and offer more sports and other recreational opportunities. The Band provided little detail as to the set up of the program before and after the “restructuring.”
Questioned by Ms. Morrison, Ms. Baskin agreed that the program offered soccer, basketball and other sports when Ms. Morrison was the Recreation Coordinator. Ms. Baskin, and including Ms. Shannoss, in her opening statement, agreed that the restructuring of the positions essentially came down to this: the conversion of Ms. Morrison’s position into a 12-months fixed term position and have the work done by other, new employees (at less costs).
Ms. Baskin explained that the rationale was to spread the employment and training opportunities and provide “stepping stones” for Band members. New employees would also bring in “fresh ideas.” After Ms. Morrison left, the two positions were filled with two employees for 12-month periods, and, upon the expiry of their 12-month terms, two new employees were engaged.
Ms. Baskin explained, as well, that the Band Council perceived a potential “conflict” because the Recreation Coordinator and the Event Coordinator were paid a different hourly rate, the latter being paid less. Ms. Baskin testified that there was no room, for budgetary reasons, for wage increases for the Recreation Coordinator and the Event Coordinator. Ms. Morrison, on the other hand, said she had not requested a wage increase.
Ms. Morrison testified that she was surprised when she was given the termination letter early in morning of July 31, 2010. She was about to go on an excursion with a number of children, when the previous (acting) Executive Director of the Band, Ms. Baskin and a Band Councilor came to the office. They gave her the letter and explained that the Council had decided to “restructure” the two positions. Ms. Morrison and her colleague, the Event Coordinator, were on a tight schedule for the trip, and there was little time to discuss severance and other issues that Ms. Morrison wanted to discuss. She explained that her colleague was very upset. She left the Band’s employ soon after the termination.
Ms. Morrison continued working until August 31, 2010. She did not seek reinstatement. She found employment with another band from September 2009, and was only out of work for one month.
Ms. Morrison testified that she took the action to make this complaint because it was the third time in four years the Band Council had “restructured” her out of her position. She questioned the bona fides of the decision in light of the Band’s previous decisions. She explained that when Ms. Baskin had quit, she got her job. When Ms. Baskin returned, Ms. Morrison was put into the job as Recreation Coordinator, earning less, $15.00/hr. At that point, wages came up, but was told: “to take it, or leave it.” Ms. Baskin agreed she did quit, and was away from the Band for an 8-month period. She said, however, that the position was re-posted and that she successfully applied and the Band placed Ms. Morrison in the Recreation Coordinator position. Ms. Wilson testified. Her evidence was not that helpful. She recalled meeting Ms. Morrison but did not recall discussions about “restructuring.”
The employer entered into evidence, by consent, a bundle of documents relating to Ms. Morrison’s previous positions, including:
1. October 9, 2007: Letter from Ms. Morrison that she was willing to take Ms. Baskin’s job;
2. December 12, 2007: Letter from the Band advising Ms. Morrison that the Band intends to restructure staffing in the Social Development Department to coincide with purchase of a new computer program, with two new positions, finance clerk (in house) and Social Development Worker positions Ms. Morrison can apply for;
3. February 11, 2008: email, internal posting of Finance Assistant position
4. February 11, 2008: letter from the Band confirming February 8 meeting presenting two employment options, as finance clerk or as Social Development Worker, noting that the “department and job description will be restructured.”
5. February 12, 2008: letter from Ms. Morrison to the Band, stating that she accepted the Social Development Worker job, presented on February 8, and indicating that Ms. Morrison was “aware that the Council will be re-structuring this position in the future and that [she] would be required to apply for the job.”
6. February 27, 2008: Letter confirming Ms. Morrison’s acceptance of the job as Social Development Worker; and
7. August 22, 2008: offer of employment as Recreation Coordinator, signed and accepted by Ms. Morrison;
The parties declined the opportunity to review the documents and explain them.
Analysis and Decision
Section 240 of the Canada Labour Code reads:
240. (1) Subject to subsections (2) and 242(3.1), any person
(a) who has completed twelve consecutive months of continuous employment by an employer, and
(b) who is not a member of a group of employees subject to a collective agreement, may make a complaint in writing to an inspector if the employee has been dismissed and considers the dismissal to be unjust.
Termination is an act of the employer without the voluntary and informed consent by the employee. It must be clear and unambiguous. There is no issue that Ms. Morrison’s employment was terminated on July 31, 2010. There is no question that she was “laid off.” A lay off often connotes an expectation of a recall. Other than the “restructuring,” there was no other reason given to Ms. Morrison for the termination. There was no issue of any warnings having been given with respect to job performance.
One of the differences between the common law principles applicable in a wrongful dismissal action is that bona fide business decisions do not afford a defence. Under the common law an employer may dismiss an employee for just cause or without cause, for any reason, subject to statute, including human rights legislation, by giving notice or pay in lieu of such notice.
Under the Canada Labour Code, for policy reasons, an adjudicator lacks jurisdiction in certain specific circumstances, where the employer, for bona fide business reasons, reorganizes or downsizes its workforce due to economic or business reasons (Bagelman v. Kwakiutl Laich-Kwil-Tach Nations Treaty Society [2002] C.L.A.D. No. 192 (Love)). Section 242(3.1) of the Code provides:
(3.1) No complaint shall be considered by an adjudicator under subsection (3) in respect of a person where
(a) that person has been laid off because of lack of work or because of the discontinuance of a function;
An employer’s bona fide modifications of terms and conditions of employment may constitute a lay-off or “discontinuance of a function.” Adjudicators will scrutinize the bona fides of a or “discontinuance of a function” of “lay-off.” That does not mean that they will closely review the business rationale. However, in my view, I do not have to accept the employer’s characterization. I need to scrutinize the evidence to ascertain if the matter complained of, in all of the circumstances, constitutes a “discontinuance of a function.” Were that not so, the unjust dismissal provisions would be rendered ineffective. In my view, employers are well advised to ensure that they provide the adjudicator with the proper evidence setting out the financial and organizational basis for the decision.
In Bagelman, adjudicator Love reviewed the authorities and observed as follows:
37 It is apparent from the authorities, that an employer, may discontinue a function, by eliminating an office or position as a result of contracting out, re-assigning job duties, or discontinuing job duties, or a combination of those acts: [Citations omitted].
38 The definition of “discontinuance of function” was considered by the Supreme Court of Canada in Flieger v. New Brunswick, [1993] 2 S.C.R. 651. In that case the court construed the words appearing in the Civil Service Act, S.N.B. 1984 c. C-5.1, which contains similar language. The Court said:
Therefore, a “discontinuance of a function” will occur when that set of activities which form an office is no longer carried out as a result of a decision of an employer acting in good faith. For example, if a particular set of activities is merely handed over in its entirety to another person, or, if the activity or duty is simply given a new and different title so as to fit another job description then there would be no “discontinuance of a function”. On the other hand, if the activities that form part of the set or bundle are divided among other people such as occurred in Mudarth, supra, there would be a “discontinuance of function”. Similarly, if the responsibilities are decentralized, as happened in Coulombe, supra, there would also be a “discontinuance of a function”.
As set out in Wolf Lake First Nation v. Young, 1997 130 FTR 115 at 119:
Thus, when faced with an employee claiming that an employee has been terminated because of lack of work or discontinuance of function, the adjudicator must first examine the merits of the employer’s claim. If the adjudicator determines that the employee was let go for one of these two valid reasons then the adjudicator will not proceed further.
[Emphasis added]
Adjudicator Love noted: “the tactical burden rests with the employee to substantiate allegations of malice, ulterior motive or bad faith” (para. 41).
I have carefully reviewed the evidence. There was precious little evidence to support that Ms. Morrison’s position as Recreation Coordinator was “restructured.” No member of the Band Council involved in the decision testified. Ms. Shannoss was not involved in the decision. There was little evidence as to the activities of the “office,” or job, before or after. The explanation that the “restructuring” was still ongoing, does not, assist the Band’s position. The only aspect advanced by the Band was the notion that it wanted offer more sport, but on all of the evidence, that was also done when Mr. Morrison was employed. In a general sense, I appreciate the Band’s apparent concern about budgets. On that point there was, in any event, no evidence, other than the foregoing “concern.” I also appreciate its concern about sharing employment opportunities among the band members. However, the bottom line here is that this was no more than the conversion of Ms. Morrison’s position into a 12-months fixed term position and have the work done by other, new employees (at less costs). This, in the circumstances, does not constitute a “restructuring.”
I also mention that the documents produced by the Band, while certainly suggesting that Ms. Morrison knew and accepted that the Band intended to “restructure” the position in Social Development, her previous job, there in nothing in the agreement she signed for the Recreation Coordinator that indicates that. I note that there was no real, indeed any, explanation of the so-called restructuring that Ms. Morrison appears to have experienced in the last few years of her employment.
I find that Ms. Morrison was unjustly dismissed. I turn to the question of remedy.
Most adjudicators give “just cause” a broader meaning than the common law standard, closer to the standard applied by collective agreement arbitrators. This reflects, in my view, the remedial purpose of s. 240, counteracting the perceived deficiencies in the common law principles of wrongful dismissal. In Iron v. Kanaweyikmik Chiold and Family Services Inc., [2002] C.L.A.D. No. 517, adjudicator England noted:
12 ….. The issue, therefore, is whether giving pay in lieu of notice such as would be suffice to lawfully terminate the employment contract at common law in a civil suit for wrongful dismissal automatically constitutes “just cause” for dismissal in an action under section 240 of the Canada Labour Code.
13 …. The correct interpretation of the word “unjust” in section 240 must be gleaned from the overall scheme and purpose of the section and the Code as a whole. In this regard, the courts have frequently held that employee rights under protective employment standards acts such as Part III of the Canada Labour Code must be given a broad, generous and liberal interpretation so as to further the general remedial goal of such legislation. …. Rather, the purpose of the unjust discharge provision in section 240 is to protect the personal dignity and autonomy of the individual employee in termination situations. …. In order to be considered “just”, an employer’s decision to dismiss must be (1) rationale, in the sense of furthering the legitimate business goals of the organisation; (2) proportional in the amount of harm the employee’s actions are causing to the production process; (3) made in good faith, non-arbitrarily and non-discriminatory; and (4) made in a procedurally fair manner.[sic.]
14 ….. Indeed, assuming that the very purpose for enacting section 240 in the first place was to remedy the deficiencies of the common law wrongful dismissal action – such an assumption is highly plausible for otherwise there would seem to be no reason for the enactment – one such deficiency is that the employer can insulate its substantive reasons for dismissal from review by a neutral adjudicator by the simple technical device of complying with the contractual notice requirement. It seems to me that the legislators intended a section 240 “just cause” review to pierce the technical veil of the contractual notice requirement and focus on the substance of the employer’s grounds for dismissal by applying criteria such as rationality, proportionality, good faith, discrimination, arbitrariness and procedural fairness. (Emphasis added)
Employers cannot contract out of the Code. This may have implication for the ability of employers to regulate the relationship with their employees. For example, employment contract provisions that purport to justify dismissal for specified offences do not bind an adjudicator, although such provisions may inform the parties as to their mutual expectations. Likewise, in my view, internal employer disciplinary procedures cannot fall below standards contemplated by the Code. The employer must be careful to follow the requisite procedure or the dismissal may be found to be unjust. A termination may be substantially fair, but procedurally flawed. Adjudicators may, however, fashion take that into account when fashioning a remedy, for, example reducing compensation (Bell Canada v. Halle, [1989] F.C.J. No. 555 (FCA)).
Section 242(2) of the Code provides the adjudicator with broad remedial powers:
(4) Where an adjudicator decides pursuant to subsection (3) that a person has been unjustly dismissed, the adjudicator may, by order, require the employer who dismissed the person to
(a) pay the person compensation not exceeding the amount of money that is equivalent to the remuneration that would, but for the dismissal, have been paid by the employer to the person;
(b) reinstate the person in his employ; and
(c) do any other like thing that it is equitable to require the employer to do in order to remedy or counteract any consequence of the dismissal.
One of the major differences between, for example, an action for wrongful dismissal and a s. 240 complaint is the remedies available to adjudicators. The traditional award for wrongful dismissal is damages measured by reasonable notice. Some adjudicators have followed that approach. The policy underlying s. 240 is to make the successful complainant “whole.” In my view, re-instatement, despite being granted sparingly, is the presumptive remedy under s. 240. It follows from the presumptive remedy of re-instatement that the period for which the employee is to be compensated is lost earnings up to the time of re-employment.
A successful claimant will be compensated for loss of earnings. That can be expressed, somewhat crudely, as reflecting the difference between what the employee would have earned but for the dismissal, and what the employee did earn because of the dismissal (for example, though replacement employment). This could take into account wage increases and benefits the employee would have received, had he or she continued in the position. It could also take into account loss of earnings because the employer closed its operations, or the employee became disabled, and, as a result did not suffer a wage-loss.
In the case at hand, Ms. Morrison was out of work for one month. I award her four weeks’ pay, less the appropriate statutory deductions, which are to be remitted on her behalf. The gross amount is $2,275.00. The amount is to be paid to her forthwith.
Decision
I order as follows:
Ms. Morrison’s complaint is upheld. Her dismissal was unjust.
The Band must pay her $2,275.00, less statutory deductions, if any.
I retain jurisdiction to deal with any issues arising out this award, if any.
Vancouver, January 27, 2011
________________________
Ib Petersen: Adjudicator