View cases - Stewart McKelvey

CITATION: Brito v. Canac Kitchens, 2011 ONSC 1011COURT FILE NO.: 05-CV-294379 PD1DATE: 20110218ONTARIOSUPERIOR COURT OF JUSTICEBETWEEN: ))FRANK BRITO, RENE FIGUEROA,BRUNO LAGO, ALBINO MELO, LUISROMERO OLGUIN, EDUARDOSTURLA-HORTAL, KIM LY TIEN ANDSOUHEIL (SAM) WAHAB– and –PlaintiffsCANAC KITCHENS A DIVISION OFKOHLER CANADA CO., COMPAGNIEKOHLER CANADADefendant)))))))))))))))))))Peter A. Grunwald, for the Plaintiff, LuisRomero Olguin (all other Plaintiffs havingdiscontinued their claims)David J. G. McKechnie, for the DefendantHEARD: January 17, 18, 19 and 20, 2011DECISION RELEASED: February 18,20112011 ONSC 1011 (CanLII)ECHLIN J.REASONS FOR DECISIONI. INTRODUCTION:[1] Over the past 200 years, Canadian employment law has evolved dramatically. Workersin the 19 th Century sometimes faced jail for workplace transgressions. In other instances,legalized corporal punishment was administered if servants displeased their masters. In BritishColumbia, legalized discrimination against Chinese workers was widespread and enshrined inlegislation. The 19 th Century Magistrates, who enforced the laws, tended to favour employers.Although it did not occur overnight, the 20 th Century witnessed significant changes in the way inwhich workers were treated. It may now be fairly and generally asserted that today, in theabsence of a voluntary resignation, or serious misconduct on the part of the employee, Canadian

Page: 2employers must dismiss their employees with proper notice or pay in lieu thereof. If the latter,they must “make the employee whole” for the common law period of reasonable notice.II.THE PARTIES:[2] The Defendant, Canac, has fabricated cabinetry for kitchens, bathrooms and other familyrooms for many years. The Plaintiff, Mr. Luis Romero Olguin, now 63 years old, immigrated toCanada from Chile in the fall of 1979. From 1979 until July 15, 2003, he worked for Canac. In2003, he was dismissed without cause at the age of 55. He was given the statutory minimumpayment of 31.79 weeks after nearly 24 years of service, laterally as a team leader at a totalannual compensation of between $66,120.37 and $71,691.22, plus benefits for the statutorilymandated minimum period of eight weeks.[3] Canac has regularly chosen to litigate its many disputes with its employees in theSuperior Court of Justice (Ontario) as summarized and listed by Herman J. in Cardenas v.Kohler Canada Co., 2009 CanLII 17976 (Ont. S.C.); D. M. Brown J., in Maldovanyi v. KohlerLtd., 2009 CanLII 7094 (Ont. S.C.); and Strathy J. in Munoz v. Canac Kitchens, a division ofKohler Canada Co., 2008 CanLII 63151 (Ont. S.C.). In this instance, Canac contests the lengthof Mr. Luis Romero Olguin’s admitted without cause notice period, his mitigation efforts, andhis entitlement to benefit coverage claims.2011 ONSC 1011 (CanLII)III.THE FACTS:[4] The facts are straightforward and largely not in dispute. Canac led no evidence at thistrial and was content to cross-examine Mr. Luis Romero Olguin and the other plaintiffs’witnesses only. I was advised by Mr. McKechnie that the claims advanced by the other sevenplaintiffs in this action were all eventually settled prior to the inception of this trial.[5] On July 15, 2003, Canac dismissed Mr. Luis Romero Olguin without cause as a result ofa restructuring and not as a result of dissatisfaction with his work. Mr. Luis Romero Olguinmitigated his damages on August 1, 2003 by securing alternate employment with CartierKitchens at a much lower rate of remuneration. In the 15 months following his re-employment,he earned $53,074.14.[6] On November 5, 2004, Mr. Luis Romero Olguin underwent surgery for laryngeal cancer,received chemoradiation treatment, and a tracheostomy tube was inserted in his throat until June1, 2005. Further cancer surgeries were conducted on November 27, 2008, May 28, 2009,October 4, 2009, and even more surgeries are contemplated in the future. Regrettably, Canaconly provided Mr. Luis Romero Olguin with eight weeks’ disability coverage upon his dismissaland Cartier never offered disability coverage as part of its compensation package for the entireperiod of reasonable notice at law.IV.THE ISSUES:

Page: 3a) What, if any, period of notice is Mr. Luis Romero Olguin entitled to beyond the 31.79weeks provided by Canac and how should it be valued?b) What, if any, additional damage entitlements, are owed to Mr. Luis Romero Olguin?IV.THE APPLICABLE PERIOD OF REASONABLE NOTICE:[7] It has been observed by former Chief Justice McRuer in Bardal v. Globe & Mail Ltd.,[1960] O.W.N. 253 (H.C.J.) at p. 255:There could be no catalogue laid down as to what was reasonable notice inparticular classes of cases. The reasonableness of the notice must be decided withreference to each particular case, having regard to the character of theemployment, the length of service of the servant, the age of the servant and theavailability of similar employment, having regard to the experience, training andqualifications of the servant.2011 ONSC 1011 (CanLII)[8] The existence of any real or imagined “rule of thumb” has been ruled out by the Court ofAppeal for Ontario in Minott v. O’Shanter Development Co., [1999] O.J. No. 5 (C.A.).[9] Accordingly, having regard for the relevant legal considerations and the facts outlined inparagraph 2 herein, I fix and award the Plaintiff a period of notice of 22 months. I further fixMr. Luis Romero Olguin’s total annual cash compensation at $71,000.00 or $5,916.67 permonth.[10] Mr. Luis Romero Olguin is clearly entitled to “be made whole” for the period July 15,2003 (the date of his dismissal) to November 6, 2004 (the date when he became disabled). Thisresults in an entitlement of nearly 16 months at $5,916.67 per month less the agreed uponstatutory payments of $36,157.95 paid by Canac and less the Plaintiff’s earnings from Cartier of$53,074.14.[11] It is not surprising that Mr. McKechnie conceded a notice period of less than 16 monthsin argument, although Canac at no time advanced any compensation to Mr. Luis Romero Olguin,beyond the statutory minimums. Later, he modified his alternate notice period submissions to 16to 19 months.VI.THE “DISABILITY QUESTION”:[12] How should the law deal with the events of the period of November 6, 2004 [thedisability date] to May 15, 2005 [the end of the 22 month notice period]? If it is to place Mr.Luis Romero Olguin into the position he would have been in had Canac provided him withworking notice, he would have received his regular cash employment compensation, plus allbenefit coverages for the entirety of his 22 month notice period at law.

Page: 4[13] Canac consciously chose not to make alternative arrangements to provide its loyal, longserviceemployee with replacement disability coverage. Rather, it chose to go the “bareminimum” route. It provided only the statutory minimums in pay and benefits and then gambledthat he would get another job and stay well. When it lost that gamble, it chose to litigate thismatter for over five years. When confronted with its potential significant exposure, it raised theargument that Mr. Luis Romero Olguin failed to mitigate his potential damages by purchasing areplacement disability policy.[14] I reject that argument. The onus is upon Canac to establish the Plaintiff’s failure tomitigate. Canac has failed to do so in this instance. Insufficient evidence was led to show thatcomparable coverage would have been available and would have provided Mr. Luis RomeroOlguin with comparable coverage. While Mr. McKechnie conceded that in this setting, the lawtransforms the employee into a “notional employee”, he argued that Mr. Luis Romero Olguinfailed to satisfy the “actively at work” requirement contained in the policy wording. I reject thisargument and find it to be circular logic to argue that, if the Plaintiff was to be deemed a“notional employee”, then how can it be asserted that he was “not actively at work”?2011 ONSC 1011 (CanLII)[15] Canac then conceded that if those defences failed, then Mr. Luis Romero Olguin iseligible for STD coverage. The parties have agreed that these entitlements total: $9,078.94.[16] After the 17 weeks of STD coverage expired, the question then arises: Is Mr. LuisRomero Olguin entitled to receive damages as a result of loss of LTD coverage. Again, Canacadvanced a number of policy defences, none of which succeed in this instance. The plaintiff hasdischarged his evidentiary burden that he is, “totally disabled” by both viva voce evidence andmedical evidence. It then urged that the insurance policy contractually prohibited recovery. Idisagree. As the costs of the Canac disability coverage were contributed to by Mr. Luis RomeroOlguin, the Supreme Court of Canada has previously decided this issue in Sylvester v. BritishColumbia [1997] S.C.J. No. 58. In addition, Pattillo J. has previously ruled on this very issuevis-à-vis Canac in Contreras v. Canac [2010] O.J. No. 528 (S.C.). I agree. I therefore awardMr. Luis Romero Olguin compensation at the rate of $5,916.67 for the period from November 6,2004 to May 15, 2005, plus LTD benefits of an agreed-upon monthly amount of $2,096.04 fromMarch 4, 2005 to March 5, 2007, in addition to the STD benefits referenced previously inparagraph 15 of $9,078.94.[17] Finally, Canac has urged that the “any occupation” requirement should end its liability (ifany) to Mr. Luis Romero Olguin for benefits from March 6, 2005 to age 65. Again, it has failedto discharge its evidentiary burden. I fix and award the sum of $146,723.00 for damages to Mr.Luis Romero Olguin for loss of LTD benefits from March 6, 2005 to the outset of trial. Thepresent value of the remainder of Mr. Luis Romero Olguin’s LTD entitlements to his 65 thbirthday is a further $47,941.00.VII.ANCILLARY DAMAGES:

Page: 5[18] Having regard for Canac’s cavalier, harsh, malicious, reckless, outrageous and highhandedtreatment of Mr. Luis Romero Olguin, I award a further $15,000.00 in damages relatingto its “hardball approach”.[19] Pursuant to the Supreme Court of Canada’s decision in Honda Canada Inc. v. Keays[2008] 2 S.C.R. 362, I might have considered awarding “moral damages”. However, asindicated in Natalie C. MacDonald, Extraordinary Damages In Canadian Employment Law,Toronto: Carswell, 2010 at pp. 33-168 and 812-815, the relatively new common law head ofdamages, in this post-Wallace world, requires considerable specificity in pleading and furtherevidence which was not presented at this trial.VIII. COSTS:[20] The parties were nearly in agreement with their costs submissions. Mr. McKechnieconceded that, if successful, the Plaintiff should receive $90,000.00 inclusive of disbursementsand applicable taxes. While Mr. Grunwald sought slightly more, I am of the view that$90,000.00 is fair and reasonable, within the contemplation of the parties, and in keeping withthe principles contained in Boucher v. Public Accountants Council for the Province of Ontario(2004), 72 O.R. 291 (C.A.). I fix and award such amount subject to the provisions of the finalparagraph of these Reasons.2011 ONSC 1011 (CanLII)[21] Should there be “other considerations” of which I am currently unaware, and, in theunlikely event that counsel are unable to resolve matters consensually, they should contact myjudicial assistant by 12:00 noon February 28, 2011 and I will arrange to receive and considerfurther written costs submissions in a length and format to be advised.[22] Subsequent to the release of these Reasons, counsel jointly advised that a Rule 49 offerhad been made which would affect the cost disposition. After receiving submissions, I fix andaward an all-inclusive cost award of $125,000.00 inclusive of disbursements and applicable taxesin lieu of the amount referenced in paragraph 20 herein.Released: February 18, 2011ECHLIN J.

CITATION: Brito v. Canac Kitchens, 2011 ONSC 1011COURT FILE NO.: 05-CV-294379 PD1DATE: 20110217BETWEEN:ONTARIOSUPERIOR COURT OF JUSTICEFRANK BRITO, RENE FIGUEROA, BRUNO LAGO,ALBINO MELO, LUIS ROMERO OLGUIN,EDUARDO STURLA-HORTAL, KIM LY TIEN ANDSOUHEIL (SAM) WAHAB2011 ONSC 1011 (CanLII)Plaintiffs– and –CANAC KITCHENS A DIVISION OF KOHLERCANADA CO., COMPAGNIE KOHLER CANADAREASONS FOR DECISIONDefendantECHLIN J.Released: February 18, 2011

CITATION: Chandran v. National Bank, 2011 ONSC 777COURT FILE NO.: 07-CV-343593PD2DATE: 20110426ONTARIOSUPERIOR COURT OF JUSTICEBETWEEN: ))Adrian Chandran– and –National Bank of CanadaPlaintiffDefendant))))))))))William Gale, for the PlaintiffMalcolm MacKillop/Hendrik T. Nieuwland,for the Defendant))) HEARD: January 24, 25, 26, 27 and 28,20112011 ONSC 777 (CanLII)POLLAK J.REASONS FOR DECISION[1] Adrian Chandran (“Mr. Chandran”), the Plaintiff, started employment with NationalBank of Canada (“the Bank”), the Defendant, in 1989 as an account trainee. He was promotedto: assistant branch manager; financial services manager in Markham; branch manager inRichmond Hill; micro-Regional Manager in Toronto; Accounts Manager in Brampton; managerof national accounts in downtown Toronto; and finally, to senior manager in Vaughan. Eachnew position had increased compensation and responsibilities. He received excellentperformance reviews in these positions and was consistently rated as performing “aboveexpectations”, -- the highest level.[2] In May of 2006 Mr. Chandran was promoted to his last position, as senior manager of theVaughan Commercial Banking Centre, with five indirect reports and six employees reporting tohim. His base salary was $95,000 and he was eligible for an annual bonus based on the Bank’syear end result, with his target set at 50% of base salary. He reported to the Vice-President ofOntario Commercial Banking, Mr. Gary Flowers. His last day of employment with the Bankwas on September 12, 2007. His length of service was eighteen years and two months.

Page: 2[3] He claims the Bank constructively dismissed him and is therefore liable to him fordamages for wrongful dismissal for the salary and bonus that he would have earned during hisunemployment of fourteen months. He has not provided any evidence of loss of benefits duringhis period of unemployment.The Employee Survey[4] Mr. Flowers, the direct superior of Mr. Chandran, testified that when he startedemployment with the Bank at the Vaughan Commercial Centre (“the Centre”), he was given amandate to improve employee performance at the Centre, which was below expectations. Heasked Ms. Kenney, Manager of Human Resources, Commercial Banking and SpecializedLending for Ontario and Western Canada, to conduct an employee satisfaction survey as therewere perceived problems with employee morale at the Center.2011 ONSC 777 (CanLII)[5] There is no evidence with respect to the specific questions that Ms. Kenney asked theemployees. Ms. Kenney met with employees individually and took notes. She did not ask theemployees to keep their discussions confidential or to refrain from discussing their answers orthe questions posed with other employees. There is no evidence with respect to whether therewere any discussions among the employees with respect to the allegations made against Mr.Chandran.[6] Ms. Kenney met with Mr. Flowers to give him the results of the employee survey. Sheused her notes and did not disclose to Mr. Flowers which employee had made particularcomplaints. She reported to Mr. Flowers that nine of the eleven employees at the Centre made“unsolicited” comments against Mr. Chandran indicating that he made condescending remarks,had volatile behaviour, embarrassed employees in front of others and engaged in bullyingbehaviours. Ms. Kenney reported that in some circumstances a “360 came back to hauntemployees”, and comments were made to her regarding employees seeking legal advice.[7] On the basis of this information, Mr. Flowers concluded that it would probably benecessary to remove Mr. Chandran’s supervisory duties. He asked Ms. Kenney to identifywhether there were any potential openings in the Bank that he could transfer Mr. Chandran to.Before making the final decision however, he wanted the opportunity to speak with Mr.Chandran to see what he had to say. Right after his return from vacation, Mr. Chandran met withMr. Flowers and Ms. Kenney on August 27, 2007. During this meeting they told Mr. Chandranabout the general allegations that had been made against him. Ms. Kenney used her notes toinform Mr. Chandran of the allegations made.[8] Mr. Chandran testified that he was shocked and tried to find out the substance of theallegations asking for examples, so that he could defend himself against them. Ms. Kenney andMr. Flowers refused Mr. Chandran’s request for specific information about the allegations. Theyeach thought that they gave him enough information on the nature of the allegations for him tobe able to respond. Mr. Chandran’s evidence is that he denied the allegations that were made

Page: 3against him by the employees and confirmed this in correspondence he sent to Mr. Flowers onSeptember 12, 2007.[9] There was no investigation or other method used by the Bank in making the decision toissue a disciplinary letter and to transfer Mr. Chandran to another position removing hissupervisory duties. The evidence is that Mr. Flowers, in consultation with (Carolyn Bernardino(“Ms. Bernardino”)) Human Resources, (although we do not know what that consultationconsisted of), made the decision to issue the disciplinary letter of September 5, 2007 and toremove his supervisory duties and transfer him to one of two alternate positions. It is Mr.Chandran’s claim that this action by the Bank constituted a constructive dismissal of hisemployment.[10] This disciplinary letter confirmed discussions between Mr. Chandran, Mr. Flowers andMs. Kenney regarding his continued employment at the Bank. It provided in part:2011 ONSC 777 (CanLII)“This letter confirms our discussion of August 27 & 31, 2007.As discussed, we recently received complaints from virtually every employee inthe Vaughan office concerning your inappropriate management style/behaviourand, because you are the senior manager of this office, the serious impactyour behavior has had on these employees as well as the general morale ofthis office.Your inappropriate behaviour includes:• Making condescending remarks• Criticizing and embarrassing employees in front of others• Using a raised voice/shouting• Having volatile reactions/behaviour• BullyingYou have acknowledged that you have been cautioned about your arrogant andharsh behaviour in the past. You also admitted that your management style tendsto be “harsh and arrogant”. We were disappointed, therefore, that other than theabove admission, you did not take any responsibility for your actions,preferring to point out the many and various problems you have with youremployees.You must know that your disrespectful treatment of employees andcolleagues, regardless of circumstances, is strictly prohibited both in our codeof professional conduct and our harassment and discrimination policy.

Page: 4We have concluded, therefore, that we have no alternative but to relieve youas the supervisory manager of the Vaughan office. As a result, we attach, asAppendix A to this letter, two reassignment options and the terms and conditionsthat will apply to each. …As mentioned in our discussion, we wish to reiterate that disrespectful treatmentof employees and colleagues must cease immediately and you are not to takepart in any actions that may be seen or perceived to be retribution by theemployees who raised their concerns to us. You must know that furtherbehaviour of this type will result in termination of employment for cause.Please note that no other warnings will be issued on this matter.” [emphasisadded][11] The two attachments to the correspondence, which will be reviewed below, containedbrief descriptions of two alternate positions which were offered to Mr. Chandran.2011 ONSC 777 (CanLII)[12] Counsel for the Bank has advised the Court that this letter of September 5, 2007 wasdisciplinary.[13] The Bank, however, withdrew its alternate pleading that it had just cause to terminate Mr.Chandran’s employment on the grounds of workplace harassment and/or breach of policy, andpoor performance.[14] The Bank does not plead that it had cause to discipline and demote and/or remove Mr.Chandran’s supervisory duties but denies that it constructively dismissed him. The Bank submitsthat he was transferred from his position to one of two alternate positions which were notaccompanied by any loss of prestige or pay. These positions were senior and suited to Mr.Chandran’s expertise and experience. As Mr. Chandran did not accept the transfer, which theBank argues it had the right to make, he voluntarily resigned from employment. The Banktherefore submits that it had no further obligation to him. Alternatively, the Bank argues that ifthere was a constructive dismissal, Mr. Chandran failed to fulfill his obligation to mitigate hisdamages.[15] Mr. Chandran’s submission is that the provisions of the September 5, 2007 disciplinaryletter make it clear that the Bank had reached the conclusion that he was guilty of the identifiedserious breaches of the Bank’s code of professional conduct and the Bank’s harassment anddiscrimination policy. These conclusions had been reached notwithstanding the fact that therewas no investigation by the Bank, and that he was not given an opportunity to defend himselfagainst the allegations. Mr. Chandran refers to the final paragraph of the letter which provides asfollows:“As mentioned in our discussion, we wish to reiterate that disrespectfultreatment of employees and colleagues must cease immediately and you arenot to take part in any actions that may be seen or perceived to be retribution by

Page: 5the employees who raised their concerns to us. You must know that furtherbehaviour of this type will result in termination of employment for cause.Please note that no other warnings will be issued on this matter.” [emphasisadded][16] Mr. Chandran submits that the effect of this paragraph was to place him on probation asthe letter stated that any behaviour “of this type will result in his termination of employment forcause”.[17] The issue in this case is whether the Bank’s unilateral transfer of Mr. Chandran to one ofthe positions offered, together with the issuance of the disciplinary letter of September 5, 2007,constituted a constructive dismissal of his employment. If so, the issue of Mr. Chandran’smitigation of damages must also be considered.2011 ONSC 777 (CanLII)Was Mr. Chandran Constructively Dismissed from Employment?[18] Mr. Chandran submits that the terms and conditions of either of the two positions offeredwere subject to the disciplinary warnings set out in the September 5, 2007 correspondence. Hesubmits that the effect of the letter was to put him on probation.[19] The Bank disputes this interpretation of the disciplinary letter. Mr. Flowers, the signatoryof the letter, testified that he does not know who drafted the disciplinary letter. He said that theintent of the last paragraph was to give Mr. Chandran a warning that he should not engage in anyof “that behaviour” if he went back to his office at that time, and that it did not refer to conductduring any future employment. He testified that the references to continued “behaviour of thistype” were meant to refer to “actions that may be seen or perceived to be retribution by theemployees who raised their concerns to us”.[20] Ms. Kenney however testified that the reference in the letter to “behaviour of this type”was to the “inappropriate behaviour” which is referred to at the beginning of the letter, namely:making condescending remarks, criticizing and embarrassing employees in front of others, usinga raised voice/shouting, having volatile reactions/behaviour and bullying.[21] The Bank submits that Ms. Kenney did not draft the letter and was not an employeerelations expert and as such her evidence with respect to the meaning of the disciplinary lettershould be disregarded. It was Ms. Bernardino who “probably” drafted the disciplinary letterwhich was signed by Mr. Flowers. There is, however, no evidence as to who the author of theletter was.[22] Ms. Kenney testified that the Bank had a policy of following progressive discipline.Initially, the Bank would start with a verbal warning which was to be followed by a writtenwarning and then a final written warning before termination. She did state that the type ofprogressive discipline imposed would depend on the severity of the offensive behaviour by theemployee. It is submitted by Mr. Chandran that (as confirmed by Ms. Kenney in her evidence)the reference to engaging in any “further behaviour of this type” was to the behaviour the Bank

Page: 6had concluded he was guilty of. He submits that this reference conveyed to him that if any suchbehaviour was repeated in the future, it would “result in termination of employment forcause.”[23] I do not accept Mr. Flowers’ characterization of the final paragraph in the disciplinaryletter. It is not supported by the clear wording of the letter. Further, it is relevant to determinehow Mr. Chandran, as a reasonable, non-human resources professional, would interpret this. Themeaning based on the plain wording of the letter has been recognized by Ms. Kenney, the Bank’srepresentative who conducted the employee survey that led to the allegations against Mr.Chandran. She was familiar with and testified with respect to the disciplinary policies followedby the Bank. She was aware of the Bank’s employment policies and was the person who metwith Mr. Flowers with respect to the allegations against Mr. Chandran. She was the Bank“professional” dealing with this matter. Although Mr. Flowers testified that Ms. Bernardino inEmployee Relations was consulted, she did not testify and no one presented evidence withrespect to the extent of her involvement. Furthermore, it appears from Ms. Kenney’s evidencethat the reason for her involvement was the fact that Ms. Kenney was away on vacation at thetime this disciplinary letter was being drafted.2011 ONSC 777 (CanLII)[24] I find that a reasonable person receiving this disciplinary letter would conclude that it wasintended to provide Mr. Chandran with a final warning not to engage in any “further behaviourof this type”, which referred to the behaviour the Bank concluded he was guilty of, and whichwas referred to in the letter. This finding is based on:(a) the clear wording of this letter;(b) counsel’s advice that this is a disciplinary letter; and(c) Ms. Kenney’s evidence of her interpretation of the meaning of the letter;It was reasonable for Mr. Chandran to conclude that should the Bank believe that he engaged insuch prohibited behaviour (in his future employment), the intention of the Bank was to terminatehis employment without further warning.[25] Counsel for the Bank argues that notwithstanding the fact that this is a disciplinary letter,it had no obligation to conduct an investigation into the allegations made against Mr. Chandranand that by virtue of the written employment contract which was signed by Mr. Chandraneighteen years ago, it had the right to transfer him to any position it deemed appropriate. TheBank does not plead that it had cause to remove Mr. Chandran’s supervisory duties and assignhim to a different position. Rather, it is the position of the Bank that the two positions offered toMr. Chandran were comparable and did not constitute a demotion and a constructive dismissal.[26] The Bank does not plead that it had cause to issue a disciplinary letter. The Bank’sposition that it had the right to transfer Mr. Chandran is maintained, notwithstanding the fact thatthe Bank did not engage in any type of inquiry to determine if the allegations made by theemployees to Ms. Kenney were true. It is alleged by Mr. Chandran that he was not given anopportunity to properly defend himself against these allegations. The Bank’s position is that it

Page: 7had no obligation under the Human Rights policy to conduct an investigation as there was noformal complaint filed.[27] The parties rely on the Supreme Court of Canada case of Farber v. Royal Trust Co.,[1997] 1 S.C.R. 846 at paragraph 26 which sets out the test for constructive dismissal as follows:“To reach the conclusion that an employee has been constructively dismissed, thecourt must therefore determine whether the unilateral changes imposed by theemployer substantially altered the essential terms of the employee’s contract ofemployment. For this purpose, the judge must ask whether, at the time the offerwas made, a reasonable person in the same situation as the employee wouldhave felt that the essential terms of the employment contract were beingsubstantially changed.” (emphasis added)2011 ONSC 777 (CanLII)The Bank agrees that the assessment of whether the changes to the terms of the employmentcontract amount to a fundamental breach is an objective one. This is consistent with theSupreme Court of Canada’s test of whether “a reasonable person in the same situation as theemployee would have felt that the essential terms of the employment contract were beingsubstantially changed”. It is necessary to examine whether the essential terms of Mr. Chandran’semployment contract were being substantially changed.[28] Mr. Chandran submits that the two jobs offered were at a lower grade which resulted inlower compensation and lower prestige. All of his supervisory duties were removed. Hetestified that it was his goal to reach the position of Vice-President and that every move he hadmade within the Bank was carefully considered in order to increase his chances of reaching hisgoal. He testified that his job as senior manager was an important position to hold in hisprogression through positions to reach this goal of becoming Vice President.[29] Mr. Chandran also testified that he lost all trust in the Bank. Although he has been avalued employee, receiving excellent performance appraisals for eighteen years, the disciplinaryletter of September 5, 2007 clearly indicated that his employer accepted the allegations of theemployees that he was guilty of the extremely serious conduct set out in the letter without anyquestion, even though he did not have a chance to defend himself. This conclusion by the Bankthat he was guilty of such serious behaviour would obviously have an extremely negative impacton him in the future and would affect his goal of becoming Vice-President at the Bank. Further,he testified as to the effect of the disciplinary letter was being put “on probation“. I have alreadyfound that I agree with Mr. Chandran’s characterization of the disciplinary letter.The Two Alternate Positions Offered(a) Reporting Relationship[30] With respect to the two alternate job offers, the Bank submits that as Manager ofBusiness Development/Special Projects, Mr. Chandran would report to the same Vice-President,Mr. Flowers. There could therefore be no loss of prestige in this reporting relationship.

Page: 8[31] As Manager of National Accounts, Mr. Chandran would report to Ms. Linda Smart, towhom he had previously reported. He testified that he had a good working relationship with Ms.Smart, that she showed him respect and that she valued him as an employee. Ms. Kenney andMr. Flowers testified that in February 2007 Ms. Smart was a level 8 employee and at the time ofthe transfer she earned $120,000.00 per year (over $20,000.00 more than Mr. Chandran’s salary).There could therefore be no serious loss of prestige in this reporting relationship. There ishowever, no evidence that Mr. Chandran was aware of these facts.(b) Compensation[32] It is argued that in both positions, Mr. Chandran’s salary and benefits would be the samefor fourteen months and he would have continued to be eligible for regular salary increases. Mr.Chandran’s target bonus would also remain at 17% for 14 months.2011 ONSC 777 (CanLII)[33] The evidence was that if Mr. Chandran accepted the Manager of National Accounts role,his position level would have decreased from level 7 to level 6 after 14 months. The Bank notesthat this would have had no impact on his salary and would only have reduced his target bonusfrom 17% to 15%. Such a small reduction in a target bonus, it is submitted, is not a fundamentalchange to Mr. Chandran’s terms of employment. Mr. Chandran submits that this job would onlyprotect his salary for a period of fourteen months at a G7 level and then would revert to theproper job rating of G6.(c) Grade Level[34] The Bank submits that had Mr. Chandran accepted the position of Manager of BusinessDevelopment/Special Projects role, his position level would have been re-evaluated after 14months. Mr. Flowers testified that he believed this position was a level 7, but that humanresources required him to do a re-evaluation in 14 months. He stated that he would haverecommended that Mr. Chandran remain at level 7, and that he was unaware of any circumstancewhere the Bank did not accept a Vice-President’s recommendation. Consequently, the Banktherefore submits that Mr. Chandran’s grade would be the same had he accepted the Manager ofBusiness Development/Special Projects position. There is, however, no evidence that Mr.Flowers told Mr. Chandran about his intentions, or that there was any guarantee that hisrecommendations to the Bank would be followed.[35] In both positions the Bank points out that Mr. Chandran would continue working incommercial credit. As Manager of National Accounts Mr. Chandran would be working onlarger, more complex commercial credit deals. As Manager of Business Development/SpecialProjects, Mr. Chandran would develop commercial credit deals in the downtown Toronto marketfor businesses.[36] The Manager of Business Development/Special Projects job was a new position whichwas being created. No job description was provided.

Page: 9[37] Mr. Chandran’s last job as Senior Manager, Vaughan Commercial Banking, was rated ata position of G7. The “G” denotes the supervisory function and the 7 is the salary level. Mr.Chandran’s evidence was that neither of the two jobs was acceptable as they were clearlydemotions. All of the supervisory duties would be removed. Further, as is evidenced by the jobratings, the compensation level would be restricted. Mr. Chandran testified that within the Bankboth of these jobs would be seen as a loss of prestige and the employees would know that Mr.Chandran was moved right after the employee survey was conducted.[38] The Bank countered this argument with evidence that as a result of the widths of thesalary bands within the different grades, it was possible that Mr. Chandran would not suffer anyloss of compensation. This was because Mr. Chandran was not at the top of his salary band inhis position of Senior Manager.[39] Mr. Chandran relies on the case of Cox v. Royal Trust Corp. of Canada, [1989] O.J. No.675, wherein the Ontario Court of Appeal held at paragraph 14 that:2011 ONSC 777 (CanLII)“I have no doubt that the plaintiff was entitled to assess his position on the basisof what he heard; that is all he could report to his lawyer. He had been told of anundefined position that sounded like one of the trust officers who had been underhis supervision, and that a former subordinate would be taking his position. In myview the loss of all management functions and responsibilities and reporting toyour old position is ostensibly much more than a “change of title” – it mustappear as a demotion and a change of status. Harley considered the reportingchange an important one to ease a difficult personal relationship and, absent thatelement, and it was absent to the plaintiff, I believe both he and the trial judgewould have seen the change in different terms as to status and demotion.”[40] The court further held that the demotion and the status of the job were not the onlyfactors. It was held that the employment relationship must be viewed overall. It stated atparagraph 16 that:“In the present case the plaintiff showed evidence of being unfit for managementfunctions – clearly a fundamental problem to the company. The plaintiff’ssuperiors proceeded quite properly and with genuine concern to address thatproblem, but by definition a fundamental adjustment to the plaintiff’semployment was necessary. Nothing could be more basic to the company than tohave a manager who could not manage, and nothing was more basic to theplaintiff’s role than that he was managing. The cure for the company wasequivalent to the impact upon the employee – a fundamental change.”[41] The court concluded that even if a company is properly motivated, it can still be liable fora constructive dismissal.

Page: 10[42] The Bank emphasizes that Mr. Chandran was not told that he could not be promoted inthe future. Mr. Flowers testified that if Mr. Chandran accepted the Manager of BusinessDevelopment position and was successful at it, he would eventually require assistance and wouldagain manage a team. Furthermore, Mr. Flowers believed that if Mr. Chandran was successful inthis position he would have been in a good position to replace him as Vice President. It is alsosubmitted that had Mr. Chandran taken the Manager of National Accounts position he couldhave advanced to Senior Manager of National Accounts, or other senior level (and nonsupervisory)executive positions in the commercial banking business. The Bank argues thatalthough each of the proposed transfers did not guarantee positive future advancement, neitheramounted to a fundamental breach of the employment contract.[43] The Bank also submits that having supervisory duties was not an essential term of Mr.Chandran’s employment. It relies on Mr. Chandran’s discovery evidence that sales and businessdevelopment were his most important roles as Senior Manager.2011 ONSC 777 (CanLII)[44] Furthermore, the Bank notes that during his employment Mr. Chandran moved fromsupervisory positions to non-supervisory positions.[45] Mr. Flowers testified that while supervisory duties can be an indicator of status, the moreimportant indicators of status at the Bank are pay and whether the position is a seniormanagement position. Mr. Flowers testified that there is no greater compensation at the Bank forsupervisory duties.[46] The Bank submits that its proposal to transfer Mr. Chandran to another seniormanagement position without supervisory duties is consistent with his movements to variouspositions in the past and therefore the loss of supervisory duties cannot amount to a fundamentalchange to the terms of employment.[47] Reference is made to the Dykes v. Saan Stores Ltd., [2002] M.J. No. 161 (Q.B.) case,wherein the court refused to find constructive dismissal where an employer transferred anemployee in response to complaints from direct reports. In Dykes the plaintiff was the Managerof Human Resources and directly supervised three employees. The employer’s Vice-Presidentreceived complaints from staff that were critical of the plaintiff’s “high-handed manner and hisattitude towards them.” In Dykes the employer had already decided to move the plaintiff beforeconfronting him with the allegations. When the employer met with the plaintiff “the complaintswere never challenged although denied by the plaintiff”, and the employer then offered theplaintiff a transfer to a newly created senior managerial but non-supervisory position at the samelevel, salary and benefits. The court concluded that there was no constructive dismissal.[48] The difference in the present case is that the positions offered to Mr. Chandran were notat the same level of salary and benefits, and the Bank issued the disciplinary letter.[49] The Bank submits that there is no reason to doubt Ms. Kenney’s testimony that nine staffcomplained about Mr. Chandran’s conduct without any prompting from Ms. Kenney. Given the

Page: 11large number of unsolicited complaints, it was therefore reasonable for both Ms. Kenney and Mr.Flowers to conclude that there were problems with Mr. Chandran’s management style and thathe should be moved to a non-supervisory position.[50] The Bank argues that the propriety of their decision to transfer the plaintiff is not negatedbecause Ms. Kenney did not conduct an investigation. There was no obligation for Ms. Kenneyto conduct an investigation.[51] The Bank further argues that the validity of the decision to transfer Mr. Chandran is notnullified by the failure to inform him of the specific complaints made by specific employees sothat he could offer a rebuttal. It is submitted that no court has recognized a legal duty to providean employee with a fair hearing in the course of the employment relationship. In fact, courtshave held that there is no legal duty to provide a fair hearing before terminating the employmentrelationship.2011 ONSC 777 (CanLII)[52] It is argued that if an employer has no duty to provide a fair hearing at the time theemployee is most vulnerable, at termination, there is no reason to impose such duty, when anemployer is transferring an employee. The Bank submits that the proposal to transfer Mr.Chandran was not an attempt to force him to quit. Both Mr. Flowers and Ms. Kenney testifiedthat they wanted Mr. Chandran to continue his employment. They testified that it was verydifficult to find employees with his skill set.[53] The Bank claims that it was therefore reasonable to propose the transfer in light of thestaff complaints. The proposals, it is argued, were handled sensitively and respectfully. Theyfound two alternative management positions that were closely equivalent to the status andresponsibilities of Mr. Chandran’s position of Senior Manager. The Bank was prepared tocommunicate the transfer in a manner the reflected positively on Mr. Chandran.[54] In summary, the Bank’s position is that the proposed transfer and the issuance of thedisciplinary letter did not breach a fundamental term of Mr. Chandran’s employment.[55] The Bank also relies on a provision in Mr. Chandran’s employment contract signed at thecommencement of his employment eighteen years ago which provides as follows:“I agree to hold any other subsequent position at such places designated byManagement and I understand that, during my probation period, my employmentmay cease without prior notice on my part or on the part of my employer, exceptin cases where prescribed by the Canada Labour Code. A prior notice of fourweeks on my part or that of my employer will thereafter be required beforeterminating my services, except in the case of indiscipline or violation of rules orof false declarations in the information given by me at the time of my hiring, atwhich time I shall be subject to dismissal without notice.” [emphasis added][56] The Bank cites jurisprudence which confirms the rights of an employer to transfer anemployee in circumstances where the employee has been previously transferred by the employer.

Page: 12[57] The Bank submits throughout that unless there is evidence of improper motive, it had theright to transfer Mr. Chandran to this position.[58] The Bank relies on the case of Reber v. Lloyds Bank International Canada, [1985] B.C.J.No. 2341 (C.A.). In that case, the British Columbia Court of Appeal held that any transfer whichinvolves a loss of prestige that constitutes demotion is not necessarily a breach which goes to theroot of the employment contract. The Court found that the demotion at issue was of a limitednature and that the move was actually, in substance, a lateral move. There was no repudiation bythe employer which entitled the plaintiff to treat the contract as at an end. The Bank reliesfurther on the Dykes case referred to above. In that case, the employee was transferred as a resultof complaints that had been made by other employees. The Court stated at paragraph 17 that:“the law seems to suggest the answer lies in the facts of each case. As mentionedearlier, the complaints presented to the employer from the employees supervisedby the plaintiff were never challenged. There is no doubt that the employees didcomplain and although the plaintiff denied the complaints, the fact that they weremade at all is in my opinion, a valid reason to move the plaintiff. The defendantchose to take advantage of the plaintiff’s stress and laterally move him within themanagement level of Human Resources”.2011 ONSC 777 (CanLII)[59] This case, in my opinion, is not applicable to the facts of Mr. Chandran’s case. Atparagraph 27 of the decision, the Court held:“The stimulus for the move was to remove the plaintiff from a position that had asupervisory role over three employees because of the apparent friction betweenthem and the plaintiff. With there being no evidential challenge to thecomplaints, the Vice-President as indicated above had in my view sufficientreason to remove the supervisory function from the plaintiff. The defendant didnot purport to dismiss the plaintiff resulting from these complaints, instead itdecided to utilize his skills, strengths and experience in another area of the HumanResources Department.” [emphasis added][60] In Dykes the court found that the move was lateral and not a demotion. That is not thecase here. Mr. Chandran was not given the opportunity to defend himself against theallegations but was found by the Bank to have been guilty of the allegations made against him.He had no opportunity to present a possible “evidential challenge to the complaint”, as wasreferred to in the Dykes case. Further, Mr. Chandran was subject to a serious disciplinary finalwarning with respect to behaviour which was found by the Bank to be in breach of two of itsmajor policies. If the Bank concluded that he was guilty of any further behaviour of the typehe had already been found guilty of, he would be terminated from employment.[61] The jurisprudence relied on by the Bank deals with situations where the changes made toemployment terms are minimal and do not involve disciplinary action. The issuing of the serious

Page: 13disciplinary letter against Mr. Chandran along with the changes in duties and terms ofemployment cannot, in my view, be placed in the same category.[62] I agree with Mr. Chandran’s submissions regarding the serious impact on his futureemployment at the Bank caused by the loss of prestige and potential for compensation, as well asthe loss of the opportunity for advancement to a senior position at the Bank.[63] I find that any reasonable person in Mr. Chandran’s position being presented with thedisciplinary letter concluding that he was guilty of serious misconduct, being removed from hisposition, and offered positions of lesser grades, where the supervisory duties were removed,would conclude that the essential terms and conditions of the employment contract were beingsubstantially changed. Mr. Chandran was an eighteen year employee with extremely positiveperformance appraisals set on a course of continuous promotions who suddenly became anemployee who was guilty of very serious conduct in the violation of two very important policiesof the Bank. A reasonable person would, in my view, believe that his employment opportunitiesat the Bank and his employment future at the Bank would be significantly limited, and that histerms and conditions of employment were substantially changed.2011 ONSC 777 (CanLII)[64] I do not agree with the Bank’s arguments based on the jurisprudence that is relied on.These cases do not have the effect of overruling the Supreme Court of Canada in the Farber casethat sets out the criteria to determine if there is a constructive dismissal. The law with respect toan employer’s right to transfer is subject to the law regarding constructive dismissal. I havefound that the actions of the Bank did constitute a constructive dismissal. I do not agree that theBank’s power to transfer is unlimited as suggested by the Bank. The Bank is not immune from afinding that there has been a constructive dismissal of Mr. Chandran’s employment. I agree withMr. Chandran that the imposition of the discipline as a new term of employment for the twoalternate positions in conjunction with the proposed changes in his duties amounts to aconstructive dismissal.[65] The issue in this case, unlike in the cases referred to by the Bank, is whether theimposition of the discipline in combination with the Bank’s unilateral removal of Mr. Chandranfrom his position is a constructive dismissal.[66] Mr. Chandran testified that he has lost all trust in the Bank to deal with him in a fair andprofessional manner. I have already found that a reasonable person in similar circumstanceswould also lose trust and faith in his employer. I find that the actions of the Bank in reachingsuch serious findings of misconduct, the imposition of discipline and the mandatory transfer toalternate positions (with lesser terms and conditions of employment) goes to the root of theemployment contract and is a fundamental breach of the employment agreement, whichconstitutes a constructive dismissal.Mitigation

Page: 14Did Mr. Chandran fail to mitigate his damages by refusing to accept one of the two positionsoffered by the Bank?[67] The Bank pleads in the alternative that if a finding of constructive dismissal is made, Mr.Chandran failed to mitigate his damages by refusing to accept one of the two positions offered bythe Bank.[68] Both parties agree that the relevant test is to determine whether it would have beenobjectively reasonable for Mr. Chandran to accept either of the offers of the Bank. It is agreedthat Mr. Chandran is not required to accept a position with the Bank in “an atmosphere ofhostility, embarrassment or humiliation.”[69] The Bank argues that Mr. Chandran should have accepted one of the two offeredpositions while he looked for alternative employment to satisfy his obligations to mitigate hisdamages. It relies on the Supreme Court of Canada case in Evans v. Teamsters, Local 31, 2008SCC 20, [2008] 1 S.C.R. 661. In that case, the Supreme Court of Canada stated at paragraph 30:2011 ONSC 777 (CanLII)“In my view, the foregoing elements all underline the importance of a multifactoredand contextual analysis. The critical element is that an employee “not[be] obliged to mitigate by working in an atmosphere of hostility, embarrassmentor humiliation” (Farquhar, at p. 94), and it is that factor which must be at theforefront of the inquiry into what is reasonable. Thus, although an objectivestandard must be used to evaluate whether a reasonable person in theemployee’s position would have accepted the employer’s offer (Reibl v.Hughes, [1980] 2 S.C.R. 880 (S.C.C.)), it is extremely important that the nontangibleelements of the situation – including work atmosphere, stigma andloss of dignity, as well as nature and conditions of employment, the tangibleelements – be included in the evaluation. [emphasis added][70] The court further held at paragraph 33 that:“In sum, I believe that although both constructively dismissed and wrongfullydismissed employees may be required to mitigate their damages by returning towork for the dismissing employer, they are only required to do so where theconditions discussed in para. 30 above are met and the factors mentioned in Coxare considered. This kind of mitigation requires “a situation of mutualunderstanding and respect, and a situation where neither the employer nor theemployee is likely to put the other’s interests in jeopardy” (Farquhar, at p. 95).Further, the reasonableness of an employee’s decision not to mitigate will beassessed on an objective standard.” [emphasis added][71] In the Evans case, the Supreme Court of Canada held that the union had demonstrated tothe plaintiff that they wanted him to continue to work with the organization. It found thatalthough the fears expressed by the plaintiff may have been subjectively justified, there was no

Page: 15evidence of acrimony between the plaintiff and his superiors. It was also noted that the plaintiffwas prepared to return to work if his wife was guaranteed certain working conditions whichdemonstrated that the refusal to return to work was not objectively reasonable.[72] The Bank submits that Mr. Chandran’s compensation under both positions would be thesame for fourteen months, which is the time it actually took Mr. Chandran to find alternateemployment. Further, the Bank was prepared to “manage the message” to the employeesinternally in a way that would have reflected positively on Mr. Chandran. This would haveallowed Mr. Chandran to continue to work while maintaining his dignity and reputation.[73] The Bank also repeats the same arguments made with respect to the lack of loss ofprestige with either position.[74] It is argued that the analysis is contextual, and requires consideration of the followingfactors:(a) Is the salary offered the same?(b) Are the working conditions substantially different?(c) Is the work demeaning?(d) What is the history and nature of the employment?(e) Are the personal relationships involved acrimonious?(f) Is a similar position available in the marketplace?(g) Was the offer of re-employment made before or after the employee left?(h) Has the employee commenced litigation?2011 ONSC 777 (CanLII)[75] The Bank submits that Mr. Chandran would not have been subjected to “an atmosphereof hostility, embarrassment or humiliation” had he accepted either the Manager of NationalAccounts or Manager of Business Development/Special Projects position.[76] Mr. Chandran argues that the discipline imposed on him by the Bank destroyed any trusthe had in his employer such that it rendered the employment relationship incapable ofcontinuing. He further argued that a demotion to either position would have been humiliating asthe demotions were clearly the result of the Bank’s finding of his guilt of very seriousmisconduct.[77] The Bank submits its argument on the basis of the analysis referred to above andexamines each of the criteria set out. It argues as follows:(a) Mr. Chandran’s compensation would have been maintained[78] It took Mr. Chandran fourteen months to get alternate employment. In both positions, hissalary would not have changed and his grade would have remained at level 7.

Page: 16(b)-(e) No demeaning working conditions/no acrimonious relationships[79] The Bank submits that it was prepared to “manage the message” internally in a way thatwould have reflected positively on Mr. Chandran. This would have allowed Mr. Chandran tocontinue to work while maintaining his dignity and reputation.[80] The Bank repeats its submission that in the position of Manager of National Accountsrole, Mr. Chandran would report to Ms. Linda Smart, who was Senior Manager of NationalAccounts. Although this was previously Mr. Chandran’s position, the evidence is that Ms. Smartwas not Mr. Chandran’s “peer”. Ms. Kenney and Mr. Flowers testified that Ms. Smart was alevel 8 employee earning $120,000.00 per year (over $20,000.00 more than Mr. Chandran’ssalary). There is, however, no evidence that Mr. Chandran knew this. As noted above, Ms.Smart did not work in the same unit as Mr. Chandran. It is therefore submitted that it cannot besaid that these working conditions were demeaning.2011 ONSC 777 (CanLII)[81] The Bank refers to the case of Greaves v. OMERS, 15 C.C.E.L. (2d) 94, 129 D.L.R. (4 th )347 (Ont. Ct. J. (Gen.Div.)) wherein the court found there was a duty to accept re-employmentwith the former employer. The plaintiff, Vice-President, Equities and Investment Strategy,reported directly to the Senior Vice-President, and was the highest paid Vice-President with thehighest grade level of any Vice-President. After reorganization, he was required to report toanother Vice-President who had been promoted from a junior level. The Court concluded that heshould have stayed in his position to mitigate. The employer no longer wanted him in aleadership role because of his “unsuitable” personality traits (being very strong willed, too directin showing his disagreement and displeasure, and his inflexibility). Despite this negative viewfrom the employer, the court concluded that he “could have continued to work with hiscolleagues in harmony.” In that case, however, the court found that the reference to theplaintiff’s personality traits, was irrelevant as the plaintiff’s position was changed as a result of abona fide business reorganization.[82] The Bank also relies on the Bahen v. ING Canada P & C Inc., 2001 C.L.L.C. 210-004(Ont. Sup. Ct.) case wherein the judge found no acrimony even though the employer viewed Mr.Bahen as “having something of a negative personality.” The finding in the Bahen case atparagraph 40 was that:“Even though Mr. Poole might view him as having something of a negativepersonality, I accept Mr. Poole’s evidence that he wanted Mr. Bahen in the job,and needed his technical expertise. Indeed, Mr. Bahen confirmed that Mr. Polehad told him that his type of special knowledge and claims experience was neededin the new division. There is no evidence that there was acrimony between himand Mr. Bahen, and Mr. Curtis indicated that he, too, thought that Mr. Bahen wasthe best fit for the position.”[83] The Bank argues that in the Manager of Business Development/Special Projects role Mr.Chandran would have continued to report to Mr. Flowers. He would work at the downtown

Page: 17Toronto office. He admitted that there was no acrimony with anybody at this office and that thepeople there respected him. Mr. Chandran testified that he had a good working relationship withMr. Flowers. Mr. Flowers testified that he respected Mr. Chandran’s banking skills and wantedhim to take this job.[84] Mr. Flowers testified that in this role Mr. Chandran would be working in a new and muchneeded position at the bank to develop commercial credit deals in the downtown Toronto marketfor businesses like large accounting firms, law firms and investment banking firms. Mr. Flowerstestified that the role required someone with senior level experience and with experience withthese types of large firm clients. Furthermore, Mr. Flowers testified that if Mr. Chandran wassuccessful in this role, the business would have expanded and as a consequence it was likely thathe would have been given supervisory duties in the future. I find it difficult to accept thisspeculation by Mr. Flowers in light of the serious disciplinary measures the Bank has takenagainst Mr. Chandran.2011 ONSC 777 (CanLII)[85] The Bank relies on the argument that there is no objective basis on which to conclude thatMr. Chandran’s relationship with Mr. Flowers was acrimonious. It is submitted that this case issimilar to Dykes. In Dykes the employer first confronted Mr. Dykes, the Manager of HumanResources, with complaints from his staff that were critical of his “high-handed manner and hisattitude towards them”. The employer then proposed to transfer Mr. Dykes to a newly creatednon-supervisory position. As I have mentioned earlier, there are major factual differencesbetween Mr. Chandran’s case and Dykes. I have already found that it was reasonable for Mr.Chandran, on an objective basis, to lose trust in his employer as a result of the imposition of theDisciplinary Letter.[86] Lastly, the Bank re-submits its argument that the lack of supervisory duties is not a“substantial” difference in Mr. Chandran’s working conditions given his history of transferringbetween supervisory and non-supervisory positions. Furthermore, Mr. Chandran only supervisedsix employees, which is not significantly different from the three employees supervised by theplaintiff in the Dykes case. In Dykes the trial judge found that removing Mr. Dykes’ supervisoryduties did not reduce his position so drastically as to cause humiliation.[87] The Bank further relies on the case of Black v. Second Cup Ltd., [1995] O.J. No. 75(Gen.Div.) case. The plaintiff in Black was the Vice President of Leasing and Franchising. Theemployer was of the opinion that he was under-performing on his franchising responsibilities andtherefore proposed to reallocate his responsibilities and give the plaintiff the new title of VicePresident of Leasing. The Court found that in the difficult market conditions, the plaintiff shouldhave stayed in the offered job while he sought another job.[88] Mr. Chandran testified that he was not interested in any jobs other than senior manager,and that such jobs are often not posted publicly because banks like to create a career path forinternal promotion. The Bank submits that given these circumstances, Mr. Chandran shouldhave taken one of the two positions offered to mitigate his damages while he searched for whathe himself admitted was a scarcely advertised position.

Page: 18[89] The Bank also notes that the offer was made before Mr. Chandran left and before hecommenced this action.[90] The Bank argues that it genuinely wanted Mr. Chandran to stay. This was communicatedby both Mr. Flowers and Ms. Kenney at the meetings on August 27 and September 12, 2007.There is no evidence to suggest that Mr. Flowers and Ms. Kenney were being insincere. Theyboth testified that they thought Mr. Chandran was highly skilled, that it was difficult to findindividuals with his skills, and therefore it was important to try to retain Mr. Chandran.Although Mr. Flowers and Ms. Kenney were employees and representatives of the Bank. I findthat the evidence of their intent is outweighed by the content of the serious disciplinary letter ofSeptember 5, 2007. This letter clearly indicated the intent of the Bank with respect to Mr.Chandran’s future employment.[91] As I have found above, the important distinguishing factual basis in this case (which isnot present in any of the cases relied on by the Bank) is that there are no serious disciplinaryfinding of guilt by the employer against the employee.2011 ONSC 777 (CanLII)[92] I find that having been issued the serious discipline by the Bank and forced to accepteither of the positions which were not equal in terms to the one that he held, Mr. Chandran wouldhave been subjected to “an atmosphere of embarrassment or humiliation” in an environmentwhere he could not expect that his employer would not act to put “his interests in jeopardy” (asreferred to by the Supreme Court of Canada in the Evans case), if he had accepted reemployment.He did not therefore have a positive duty to accept the offers. Had he taken one ofthe two positions offered by the Bank, he would have had to conduct a search for alternativeemployment from an inferior position and with serious discipline as part of his terms andconditions of that employment. If such discipline was disclosed to potential employers, or if hehad been fired by the Bank, it is reasonable to anticipate that Mr. Chandran would not haveobtained the employment that he did, fourteen months after he was dismissed.Did Mr. Chandran fail to take reasonable steps to mitigate his damages?[93] The Bank further pleads in the alternative that Mr. Chandran failed to take reasonablesteps to mitigate his damages by failing to apply for available account manager positions.[94] The Bank submits that Mr. Chandran had a duty “to attempt to secure other employmentand to make all reasonable efforts to secure such a position as one could reasonably expect himto take under all the circumstances.” Further, it is submitted that Mr. Chandran is not entitled torecover damages for any loss which could have reasonably been avoided. In the Michaels v. RedDeer College, [1976] 2 S.C.R. 324 case, Laskin C.J. said at paragraph 9:“The primary rule in breach of contract cases, that a wronged plaintiff is entitledto be put in as good a position as he would have been in if there had been properperformance by the defendant, is subject to the qualification that the defendantcannot be called upon to pay for avoidable losses which would result in an

Page: 19increase in the quantum of damages payable to the plaintiff. The reference inthe case law to a "duty" to mitigate should be understood in this sense.In short, a wronged plaintiff is entitled to recover damages for the losses hehas suffered but the extent of those losses may depend on whether he hastaken reasonable steps to avoid their unreasonable accumulation.” (emphasisadded)[95] The documentary evidence which was confirmed by Mr. Chandran in his evidence wasthat there were account manager positions available, in the high $80,000.00 range.[96] The Bank relies on Mr. Chandran’s evidence that he limited his job search to seniormanager positions even though he knew that there were no senior manager postings. He wasencouraged by a head-hunter to apply for account manager positions. He testified that he tookthat advice “with a grain of salt”, as he believed that the headhunter was interested primarily inearning commission. Mr. Chandran admitted that if he had applied for account managerpositions, he would probably have been hired within one or two months. He did not apply for anaccount manager position until May 2008 (approximately eight months after his terminationfrom employment).2011 ONSC 777 (CanLII)[97] Mr. Chandran testified that within three weeks of his dismissal he negotiated and enteredinto a management consulting agreement with Solo Truck & Trailer Center Ltd. through hisconsulting company Taracon Holdings Inc. The agreement was in effect from October 1 toNovember 23, 2007. He received only $4,140.00 plus G.S.T. in fees. Mr. Chandran alsotestified that between October 15, 2007 and January 15, 2008, he sent letters to 12 companies inand around the North York region for the purpose of providing consulting services. He receivedno responses.[98] From January 6, 2008 to April 23, 2008 Mr. Chandran spent “a lot of time”unsuccessfully negotiating the purchase of a tool-making company called Decovich Tools.During this time, Mr. Chandran applied for one job posting, for the CEO of the RoyalConservatory of Music in Toronto. He did not receive an interview.[99] Mr. Chandran then realized that his strategy was not working. In May, 2008 he beganapplying to job postings both in the banking and non-banking industry. He also testified thataround this time he shifted his focus away from looking only for a senior manager position andbegan considering account manager positions.[100] Mr. Chandran contacted various banks and received an interview with BMO inSeptember 2008. On October 27, 2008 he was offered the position of Business DevelopmentManager. He accepted this position and began working at BMO on December 1, 2008.[101] The Bank submits that Mr. Chandran failed to take reasonable steps to mitigate becausehe did not apply for available account manager positions between September 12, 2007 and May

Page: 202008. Instead, the Bank submits he pursued self-employment outside the banking industrythrough consulting and through the attempted purchase of a tool-making company.[102] Mr. Chandran denies this allegation and testified that he had contacted a head hunter andhad advised him that he was looking for a senior manager position at a bank. He did consultingwork and pursued other opportunities because he had to earn income to support his family whilehe was looking for a senior manager job at a Bank. The evidence was that these positions werenot posted and hard to find. Mr. Chandran submits that it was reasonable for him to attempt toreplace the job he lost and submits that he is legally entitled to do so. He did not know that hewould not be able to replace the job he lost, nor did he intend for that to happen. He argues thatit is unreasonable to expect him to give up his hope of replacing the job he was constructivelydismissed from without being entitled to make reasonable efforts to find a comparablereplacement. He submits that when it became apparent that he would not be able to do so, hethen applied for the lower rated account manager position.2011 ONSC 777 (CanLII)[103] I do not find that the evidence has established the allegation by the Bank that Mr.Chandran was not looking to find a position in banking because he did not apply for the lowerrated position immediately after his termination of employment. Mr. Chandran was in contactwith a headhunter, who would have had information leading to opportunities for the positionsought by Mr. Chandran. The evidence was that senior positions were not posted. It wastherefore reasonable for Mr. Chandran to go through a headhunter. The Bank argues that Mr.Chandran’s failure to apply for a “bank job” until May of 2008 is a failure to mitigate. Heshould have applied much earlier. There is, however, no evidence of any available seniormanager positions that Mr. Chandran could have applied for.[104] The Bank relies on the case of Coutts v. Brian Jessel Autosports Inc., [2005] B.C.J. No.828 case. In Coutts the plaintiff worked for the defendant as a Ferrari salesman. He wasdismissed without cause. The judge found that the plaintiff was primarily interested in pursuingopportunities with a new Ferrari dealership set to open in the near future, that he failed to pursueopportunities at non-Ferrari dealerships where he would have earned less money, and had hepursued these opportunities he would have secured employment within three (3) months of hisdismissal. The British Columbia Court of Appeal found that damages had not been propertymitigated. The court stated at paragraph 25:“Thus, the judge concluded that Mr. Coutts did not have a duty to accept aposition at less remuneration than he earned from his former employment.With respect, the judge was in error in making that finding. The duty ofmitigation required Mr. Coutts to act reasonably and diligently, in his owninterest, in pursuing alternative employment. Personal preferences and careerobjectives are a consideration in deciding whether an employee is entitled toturn down an alternative employment, but they are not decisive. Theemployee must still act reasonably. In my view, Mr. Coutts did not actreasonably in the circumstances. Refusing to follow through with employmentopportunities in the employee's accustomed line of work, in this case with

Page: 21Weissach Motors and MCL Motors, is not reasonable. Critical to the judge'sfinding was that Mr. Coutts could have had alternative employment by theend of August 2003. In this case, the judge found that Mr. Coutts was primarilyinterested in a new Ferrari dealership that did not even come into existence until2004. His hopes of securing employment with Ferrari were both unrealistic andunreasonable.” (emphasis added)[105] In this case, Mr. Chandran did not apply for account manager positions, which headmitted were available, that offered salaries in the high $80,000.00 range. He admitted hecould have obtained an account manager position within a few months of his dismissal. He didnot pursue these opportunities as he was holding out for the same position he had held at theBank, which he admitted was rarely advertised to external candidates. In these circumstances theBank submits that it was not reasonable for Mr. Chandran to “hold out” for a senior manager job.Furthermore, Mr. Chandran’s decision to immediately pursue self-employment outside of thebanking industry was unreasonable.2011 ONSC 777 (CanLII)[106] In the Allan v. Westinghouse Canada Inc., [2000] O.J. No. 5054 decision, Justice Whittenset out the following principles regarding self-employment and the duty to mitigate:a) Self employment is problematic because the employee is unlikely to earn theincome that he or she earned at termination until the enterprise becomesestablished, whereas salaried positions make for more immediate earnings;b) Consequently, self employment is viewed as a last resort rather than a first lineof attack on the loss of income resulting from termination;c) An employee should only commence his own business after reasonablyexhausting the possibilities of obtaining alternative employment;d) The further self employment is from the original form of employment, themore the employee must establish the hopelessness of alternative employment inthe original line of work; ande) The availability of reasonable alternative employment given the skill set of theplaintiff is key. To the extent that there are such opportunities, the road to selfemployment is difficult to justify.[107] It is submitted that Mr. Chandran lost almost eight months of potential employment, fromSeptember 12, 2007 to May 2008, when he tried to establish his own consulting business, and topurchase a tool-making company.[108] The Bank argues that this case is similar to other cases where courts found a failure tomitigate. In the Ceccol v. Ontario Gymnastic Federation, [1999] O.J. No. 304 (Gen. Div.), aff’d149 O.A.C. 315 case, the plaintiff was the defendant’s administrative director for 16 years untilshe was dismissed without cause. She did not seek similar employment but sought self-

Page: 22employment as a distributor of health products. The judge found that she failed to mitigatebecause she could have found an alternative position within a reasonable time had she looked.[109] Further, in Montanaro v. Budd’s Hamilton Ltd., [2005] O.J. No. 4199 (Sup. Ct. J.), theplaintiff was employed as a service technician for ten years, became a service manager for aperiod of just under two years, and was then dismissed. The plaintiff unsuccessfully soughtwork as a service manager and turned down work as a service technician, which paid as much ashe had been making with the defendant, because he “wanted to grow, not to go backwards”.Three months after his dismissal, the plaintiff opened his own automobile repair business. Thejudge found that the plaintiff did not act reasonably by refusing to take the service technician job,and awarded only three months notice.[110] Finally, in the Hart v. EM Plastic & Electric Products Ltd. (c.o.b. EM Plastics), [2008]B.C.J. No. 316 (S.C.) case, the plaintiff was a customer service manager with twenty-five yearsservice when he was dismissed without cause. Within two months the plaintiff received two joboffers from the defendant’s competitors, both being similar positions at comparable salaries. Theplaintiff refused these offers and decided to start his own business as a realtor. The judge foundthat the plaintiff failed to mitigate by refusing the job offers.2011 ONSC 777 (CanLII)[111] I find there is another distinguishing feature in Mr. Chandran’s case: he was seeking toreplace the job he lost. In the cases relied on by the Bank, (with the exception of Montanaroreflected above) the plaintiffs refused to accept positions that were comparable to the ones theylost. In the Montanaro case the facts were different. The Plaintiff did not have as many years ofservice and the same type of promotion history with the employer.[112] Was it reasonable for Mr. Chandran after losing his employment of eighteen years withthe Bank to take some time to wait for an opportunity for a senior management position? I am ofthe view that Mr. Chandran did have the right to try to find comparable employment for areasonable period of time (Chann v. RBC Dominion Securities Inc. (2004), 34 C.C.E.L. (3d)244).[113] In light of Mr. Chandran’s eighteen year banking career with the Bank I do not think thatit was unreasonable for Mr. Chandran to take eight months to make attempts to replace the job helost before changing his strategy and giving up hope of replacing the job he was constructivelydismissed from. I therefore find that the Bank has not met its burden of proving that Mr.Chandran did properly mitigate his damages.Damages[114] Having found that Mr. Chandran was constructively dismissed, I must assess thereasonable notice period. In Bardal v. Globe & Mail Ltd., 1960 CarswellOnt 144 (H.C.J.),McRuer C.J.H.C. set out the test for determining the reasonable notice period as follows atparagraph 21:

Page: 23“There can be no catalogue laid down as to what is reasonable notice in particularclasses of cases. The reasonableness of the notice must be decided with referenceto each particular case, having regard to the character of the employment thelength of service of the servant the age of the servant and the availability ofsimilar employment, having regard to the experience, training and qualificationsof the servant.”[115] Mr. Chandran had eighteen years of service, was 41 years old and earned an annualsalary of $98,824.00 as senior manager at the time of his dismissal.[116] The Bank submits that the reasonable notice period is twelve to fourteen months, basedon case law as summarized in the chart below:Case Age Service Position Salary Notice1 40 19 yrs Manager, Personal Trust $ 38,500.00 12 mos.Department2 46 14 yrs Branch Manager $ 55,336.06 12 mos.3 45 16.5 yrs National Accounts Manager $ 87,729.00 14 mos.2011 ONSC 777 (CanLII)[117] It argues that Mr. Chandran should only be awarded reasonable notice on the low end ofthe range as he identified himself as primarily a “salesman”, and “it has been judiciallyrecognized that sales jobs are readily transferable because the same qualities are necessary for acareer in sales regardless of the industry”. Mr. Chandran submits that the period of reasonablenotice is eighteen months, but he has been able to replace his compensation within fourteenmonths and has presented no evidence regarding lost benefits. I agree with Mr. Chandran thatthe period of reasonable notice, based on a consideration of the Bardal factors is eighteenmonths. However, as he has found alternate employment after fourteen months, he is entitled topay in lieu of reasonable notice of fourteen months.

Page: 24[118] Mr. Chandran claims a pro rata bonus for the period November 1, 2006 to September 12,2007. The Bank argues that he is not entitled to such bonus as the policy states:“TO BE ELIGIBLE FOR AN ANNUAL BONUS, AN EMPLOYEE MUST:…Be employed by the Bank at the end of the fiscal year (at the end of October)Be employed by the Bank when the bonus is paid (on January 11, 2008)”[119] This policy is clear and unambiguous and therefore its terms should prevail. It does notcontemplate payment of a pro rata bonus for a part year of work.[120] It is argued that Mr. Chandran called no evidence regarding bonus. Mr. Chandranadmitted during cross-examination that he was aware of this policy and understood that to beeligible for a bonus an employee had to be employed by the Bank at the end of the fiscal yearand at the time the bonus is awarded. His employment was terminated prior to the end of thefiscal year and prior to the bonus being awarded in January 2008. Mr. Chandran relies on thecase of Schumacher v. TD Bank, 147 D.L.R. (4 th ) 128 (Ont. Ct. J. (Gen. Div.)). at paragraphs221-225, to support his argument.2011 ONSC 777 (CanLII)[121] Mr. Chandran has not however, established the evidentiary base required. In Schumacherthe court held at paragraph 225 that:“The PCP provided that “recipients must be actively reemployed by the Bank atthe time the award is paid to be eligible for payment”. Mr. Harrison’s position isthat Schumacher ceased to be actively employed on February 8, 1995, andconsequently he is not eligible for consideration in the PCP for either period. Ihave already concluded that Schumacher was constructively dismissed, as he wasterminated without cause and without notice. His involuntary inability to complywith the condition of the PCP ought not to be justification for the Bank indeclining the award of the bonus as part of Schumacher’s damages. If that werethe case, an employer would achieve a significant advantage by wrongfullyterminating an employee because the severance package would not have toinclude any bonus. Where the bonus was promoted as an integral part of theemployee’s cash compensation, it would be inappropriate and unfair to theemployee to be deprived of the bonus by reason of the unilateral action of theemployer. I do not agree with the position taken by the Bank on this third issue.Schumacher remains entitled to consideration of a bonus, both for the period heworked and the notice period.” [emphasis added][122] Mr. Chandran did not present any evidence to establish that the bonus “was promotedas an integral part of his compensation”. I therefore find that he has not met his burden ofproving his damages in this regard.

Page: 25[123] On the basis of the above, I award Mr. Chandran damages equivalent to fourteenmonths of his salary, with the applicable post-judgment interest.Costs[124] As the successful party, Mr. Chandran is entitled to costs.[125] Mr. Chandran has submitted a Bill of Costs on a partial indemnity basis, including GSTand disbursements of $65,833.35.[126] The Bank has not made any submissions on the reasonableness of this amount.[127] I am required to award costs that are reasonable and fair. See Boucher v. PublicAccountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.).2011 ONSC 777 (CanLII)[128] In the absence of submissions from the Bank, having regard to all of the factors set out inthe Boucher case, and the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, I find that theamount requested by Mr. Chandran is reasonable and fair. I award costs, inclusive ofdisbursements and applicable taxes in the amount of $65,833.35 to be paid by the Bank to Mr.Chandran.[129] Brief written submissions may be made with respect to the effect of any offers ofsettlement that may have been made, within fifteen (15) days of the release of these reasons.Released: April 26, 2011Pollak J.

CITATION: Chandran v. National Bank, 2011 ONSC 777COURT FILE NO.: 07-CV-343593PD2DATE: 20110426ONTARIOSUPERIOR COURT OF JUSTICEBETWEEN:Adrian Chandran2011 ONSC 777 (CanLII)Plaintiff– and –National Bank of CanadaDefendantREASONS FOR JUDGMENTPollak J.Released: April 26, 2011

QUEEN’S BENCH FOR SASKATCHEWANDate: 20110831Docket: QBG 208 of 2003Judicial Centre: ReginaBETWEEN:SERGIO COPPOLA- and -Citation: 2011 SKQB 318PLAINTIFF2011 SKQB 318 (CanLII)CAPITAL PONTIAC BUICK CADILLAC GMC LTD.DEFENDANTCounsel:Mervin C. PhillipsTimothy W. Stodalka and Megan K. Milanifor the plaintifffor the defendantJUDGMENT CHICOINE J.August 31, 2011INTRODUCTION[1] The plaintiff, Sergio Coppola (“Mr. Coppola”), brings this action against thedefendant, Capital Pontiac Buick Cadillac GMC Ltd. (“Capital Pontiac”), for unjustdismissal. In addition to loss of salary and benefits, Mr. Coppola also claims damages for

- 2 -loss of reputation and mental distress because of allegations of wrong-doing made by hisformer employer some time after he was terminated.[2] Capital Pontiac takes the position that it has provided Mr. Coppola with faircompensation upon his release from employment and specifically denies any harsh orvindictive conduct subsequent to his termination.THE ISSUES2011 SKQB 318 (CanLII)[3] The issues to be determined are whether Capital Pontiac has paid to Mr. Coppola theproper amount of pay in lieu of notice, whether Mr. Coppola has failed to mitigate hisdamages and whether Mr. Coppola is entitled to receive any additional amount by way ofaggravated damages for loss of reputation or mental distress.THE EVIDENCEEvidence on behalf of the Plaintiff[4] Mr. Coppola was 36 years of age when he was hired as a car salesperson for CapitalPontiac in Regina on August 8, 2000. He had nine years experience in the motor vehicle salesbusiness ranging from part-time salesperson work while still in High School to a one yearstint as general manager of a rural dealership. Then in 1990 and for the next 10 years he wasself-employed in two different businesses and met with some success in both. However, botheventually came to an end due to changing market conditions. He declared personalbankruptcy within a month of commencing employment at Capital Pontiac due to inability to

- 3 -meet his financial obligations on personal guarantees related to his last business venture. Hereceived his discharge from bankruptcy on September 17, 2001.[5] Mr. Coppola first discussed the possibility of joining the staff of Capital Pontiac withBruce Axelson, the President and CEO of Capital Pontiac, in the spring of 2000. Mr. Axelsonadvised Mr. Coppola that Capital Pontiac was looking to increase its staffing complement todeal with increasing sales volumes. Mr. Coppola was offered a position as Fleet AccountManager commencing August 8, 2000. As such he would report to the General SalesManager who reported directly to Mr. Axelson. Remuneration was based on a performanceformula which included a base salary (after a 90 day probation period) of $1,500.00 permonth, a per unit amount for fleet and retail sales, and an annual volume performance bonusof $2,700.00 at 180 units or $6,000.00 at 240 units. He also obtained the use of ademonstrator vehicle with a dealer plate. After the 90 day probation period, he was enrolledin the company’s group benefit plan.2011 SKQB 318 (CanLII)[6] Mr. Coppola was quite proficient as Fleet Account Manager and obtained a bronzelevel recognition from the GM Canada Fleet Managers Club for the Prairie Region for theyear 2000. In addition, Mr. Coppola was selling more and more vehicles other than fleetsales. He was also assisting younger salesmen with the closing of their deals. Mr. Coppolaproposed to Mr. Axelson a revised remuneration plan that would take into consideration anyincrease in fleet sales as well as his retail sales. Mr. Axelson offered Mr. Coppola additionalcompensation if he would also take charge of Americredit financing for six months duringthe absence of another employee. A new remuneration plan was agreed upon effectiveJanuary 1, 2001.

- 4 -[7] As it turned out, Mr. Coppola took the Americredit financing portfolio to new levels.Upon return of the other employee in July of 2001, Mr. Axelson promoted Mr. Coppola tothe position of Finance Manager in addition to retaining his responsibilities as Fleet AccountManager.[8] From August 8, 2000, to December 31, 2000, Mr. Coppola earned $16,315.66including a $250.00 per month taxable benefit for use of a vehicle.2011 SKQB 318 (CanLII)[9] From January 1, 2001, to December 31, 2001, Mr. Coppola earned $82,494.65including a $250.00 per month taxable benefit for use of a vehicle. Of this amount,$58,223.15 was earned in the last six months of the year—after his appointment as FinanceManager.[10] From January 1, 2002 to June 30, 2002, Mr. Coppola earned $77,263.08 including thetaxable benefit for use of a vehicle which had increased to $300.00 per month starting inFebruary. If Mr. Coppola had continued to be remunerated at the same rate for the balance ofthe year he would have had annual income of $154,526.16, which equates to a wage of$12,877.18 per month. Mr. Coppola testified that sales information was shared by Mr.Axelson with all of the sales people. He knows that his sales were considerably higher thanthe other two Finance Managers who also worked there. Much of his success, he stated,resulted from his ability to persuade his customers to use dealer financing, purchase life ordisability insurance, or buy extended warranties, rust proofing, paint sealant and other aftermarketproducts.

- 5 -[11] On June 28, 2002, without any indication that anything was awry, Mr. Axelson cameinto Mr. Coppola’s office and gave him a written notice that read: “It is with regrets that Iinform you that you will be LAID OFF from your current position and employment atCapital Pontiac, effective July 12, 2002.” Mr. Axelson informed Mr. Coppola that he was inthe process of reorganizing his dealership. When Mr. Coppola asked him why he would belaying off his top producer, he replied that he did it on the tenure process—the other financemanagers being longer term employees. Mr. Coppola received his Record of Employmentand a final pay cheque for $5,052.09 based on a gross payment of $8,535.76 for the twoweekperiod of notice (including the $300.00 taxable benefit for continued use of hisdemonstrator vehicle for the next two or three weeks).2011 SKQB 318 (CanLII)[12] Upon his release from employment at Capital Pontiac, Mr. Coppola contacted anumber of motor vehicle dealerships in Regina but the only job offer was from BennettDunlop. He was employed with Bennett Dunlop from August 29, 2002, to September 23,2002, for the purpose of looking into the possibility of establishing sub-prime creditdepartment for this motor vehicle dealership to sell vehicles to people with low credit ratings.Mr. David Kohonick, General Sales Manager for Bennett Dunlop, confirmed thatmanagement abandoned the project after a short time to focus on other matters. It was notbecause of any lack of effort on the part of Mr. Coppola. Mr. Coppola’s earnings at BennettDunlop during this period totalled $2,342.58.[13] After the short stint at Bennett Dunlop, Mr. Coppola decided to set up a mortgagebrokerage firm in partnership with Brian Drayton, an accountant. After he had started thisprocess Mr. Coppola was informed by Mr. Drayton that he had been advised by one of thesales staff at Capital Pontiac that he should be careful in his dealings with Mr. Coppola. This

- 6 -person claimed that Mr. Coppola had been released from his position at Capital Pontiacbecause a vehicle had gone missing. Mr. Coppola had his lawyer write a letter to Mr.Axelson inquiring about the allegation but no response was received in regard to an allegedmissing automobile. Mr. Coppola began this action for unjust dismissal in January 2003. InFebruary 2003, Mr. Coppola became aware that Capital Pontiac would allege just cause.Particulars of the allegations were set forth in a statement of defence and counterclaim servedon his counsel on April 11, 2003.2011 SKQB 318 (CanLII)[14] In the meantime, Mr. Coppola incorporated a company on December 4, 2002, for themortgage brokerage business named Quick Response Mortgage Services Ltd. Both Mr.Coppola and Brian Drayton held shares in this company through holding corporations. Amortgage brokerage licence was obtained in March 2003. Mr. Coppola testified that issuanceof the licence was delayed by the outstanding allegations made by Capital Pontiac. He had tocontinually assure his partner that the allegations were unfounded.[15] Mr. Coppola testified that he encountered hurdles in setting up the mortgagebrokerage business because of the unfounded allegations. He suspected that one of the creditunions that refused to deal with him did so because Capital Pontiac was a major customer oftheirs. However, he did not provide any concrete evidence to substantiate this suspicion.[16] In the first year of operation from April 1, 2003, to March 31, 2004, the mortgagebrokerage business had gross commissions of $38,270.00 and a net loss of $30,460.00. Mr.Coppola drew a salary $22,000.00 from the company in 2003. His only other source ofincome in 2003 was $6,195.00 from employment insurance; $5,400.00 from rental income;

- 7 -and a capital gain of $23,874.77 from the sale of a rental property. Mr. Coppola testified thathe sold the rental property in order to cover living expenses for himself and his family.[17] Mr. Coppola advised that he disclosed the allegations of dishonest or fraudulentconduct in the statement of defence and counterclaim to his partner, Mr. Drayton, and also toone of his former customers from Capital Pontiac, Ms. Gertie Mazil. The purpose ofdisclosing the allegation to Ms. Mazil was to ask her to write a letter clarifying the nature ofthe transaction that led to the allegation of a missing vehicle.2011 SKQB 318 (CanLII)[18] Mr. Coppola could not estimate the financial loss arising from the allegation ofdishonesty or fraudulent conduct but described that these allegations were emotionallydevastating. It consumed a great deal of his time and effort which he could not otherwisedevote to the new mortgage brokerage business. He found it stressful and caused sleeplessnights, especially since he did not know who else was aware of the allegations. He did notseek medical attention to deal with this stressful situation. However, he did get support fromhis siblings and also from his wife, who is a psychiatric nurse.[19] Mr. Coppola also testified that he was greatly bothered by the fact that Mr. Axelsondid not accept that Capital Pontiac had made a mistake in regards to the Gertie Mazil matteruntil the examinations for discovery in January of 2004. Even that, however, was short-livedconsolation since the amended statement of defence filed in May of 2004 which removed theallegation of dishonest or fraudulent conduct retained the allegation made in the originalstatement of defence and counterclaim that he had “engaged in actions which resulted in thetermination of his employment” from Bennett Dunlop—thereby suggesting that he wasdismissed for cause.

- 8 -[20] The mortgage brokerage business did eventually improve such that Mr. Coppolaearned net income of $46,113.37 in 2004 and $72,806.57 in 2005. Thereafter his annualincome from the mortgage brokerage business and other ventures continued to increaseexponentially and in amounts that far exceed what he was earning as Finance Manager forCapital Pontiac in 2002.2011 SKQB 318 (CanLII)[21] Mr. Drayton testified on behalf of Mr. Coppola at the trial. He described the encounterwith Tri Stewart, the then current Finance Manager at Capital Pontiac, in early October of2002 who informed him that he should be careful in his dealings with Mr. Coppola becauseMr. Coppola’s termination as an employee of Capital Pontiac resulted from the theft ormisappropriation of a vehicle. Mr. Drayton stated that he could not remember the exactwords used by Tri Stewart, but this was the impression that he was left with.[22] The information Mr. Drayton received from Mr. Stewart concerned him greatlybecause it reflected on the character and reputation of someone with whom he wascontemplating going into business. He said that Mr. Coppola was surprised when he raisedthe issue with him. He and Mr. Coppola discussed the matter at a number of subsequentmeetings. He was eventually satisfied with the explanation given to him by Mr. Coppolaabout how such a misunderstanding may have arisen in relation to Ms. Mazil’s vehicle.[23] After more due diligence, Mr. Drayton decided to continue with the mortgagebrokerage venture, starting with incorporation of Quick Response Mortgage Services onDecember 4, 2002, and thereafter with application for a mortgage brokerage licence whichwas issued on March 20, 2002. He also confirmed that the allegation made by Mr. Stewart

- 9 -may have delayed commencement of the mortgage brokerage business by three or fourmonths while he conducted further due diligence. Existence of a criminal record would haveaffected Mr. Coppola’s ability to obtain a mortgage brokerage licence.[24] A Chartered Accountant, Lorne Wirth, gave expert testimony on behalf of Mr.Coppola. His evidence was that Mr. Coppola suffered estimated lost income of $494,910.00between 2002 and 2005 as a result of the termination of his employment with CapitalPontiac. This included loss of wages for the balance of 2002 and subsequent years as well asloss of the vehicle benefit and the group health. It also included rental income and a capitalgain loss on the forced sale of a rental property. His report did not take into account all of thewage severance paid, income earned from Bennett Dunlop or employment insurancereceived. The relevance of this information will be dealt with in due course in this judgment.2011 SKQB 318 (CanLII)[25] Mr. Coppola’s spouse, Cheryl Coppola, who is a psychiatric nurse, testified about theeffect which his dismissal from Capital Pontiac had on her husband in June 2002. He wentfrom being a happy and proud breadwinner to being moody and withdrawn. He madesignificant efforts to find other employment in the vehicle sales industry. He was excitedabout getting a job with Bennett Dunlop and it was another blow when it did not work out.She recalls that he again got excited about going into business with Mr. Drayton and thenbeing down again when Mr. Drayton told him about the allegation made by Mr. Stewartconcerning a missing vehicle. These ups and downs were having an effect on his family.[26] Mrs. Coppola further testified that when the allegation showed up in the originalstatement of defence and counterclaim both she and Mr. Coppola were shocked. She claimedit was devastating to her. In addition, being accused of being a criminal was very difficult for

- 10 -her husband who took pride in his work. His outlook improved when Mr. Drayton decided tocontinue pursuing the mortgage brokerage business with him. She used her own psychiatricnursing skills as much as she could to assist Mr. Coppola to overcome the effects of thesefalse accusations.Evidence on behalf of the Defendant2011 SKQB 318 (CanLII)[27] Mr. Axelson testified that he hired Mr. Coppola in 2000 because he was eloquent andhe would fit well in his organization as a strong sales person. His first position was as FleetManager which involved sales to rental agencies, the government and large businesses. Thiswas not a management position in the sense that he supervised any other employees. Heacknowledged that Mr. Coppola was proficient in arranging financing for customers andbecame one of three Finance Managers working for him in July of 2001 after another of hisFinance Managers became ill.[28] When it was inquired of Mr. Axelson why he decided to terminate Mr. Coppola inJune of 2002, he stated that it was a business decision that he made on his own just like anyother, either to generate more income or to reduce business expense. He said that in this case,he made the decision to go back to two Business Managers from three. He took intoconsideration that the two Business Managers who had been with him longer than Mr.Coppola were loyal employees and on that basis decided to let Mr. Coppola go.[29] Mr. Axelson testified that in making the decision to keep the other Business Managershe also took into account that a few weeks earlier he had offered Mr. Coppola a position as aTeam Leader in charge of three or four sales people at the Percival Ford dealership that he

- 11 -had purchased late in 2001 and that Mr. Coppola had turned down his offer. He stated thatbecause he never tries to talk someone into a job they do not want he did not pursue thematter further with Mr. Coppola. This became a factor in which of the three BusinessMangers would be retained at Capital Pontiac, however.[30] Mr. Axelson stated that he personally delivered the written notice of termination toMr. Coppola. He advised Mr. Coppola that he was being laid off solely for the reason that hewas going back to two Business Managers. He allowed him to keep the demonstrator vehiclefor a few weeks until he could get his affairs in order.2011 SKQB 318 (CanLII)[31] Mr. Axelson denied discussing the reasons for Mr. Coppola’s lay off with any otheremployees except to inform the accounting department that he was no longer on the payroll.He specifically stated that he was not aware of discussing the issue with Tri Stewart, one ofthe team leaders on his staff. He also stated that at no time after Mr. Coppola was terminateddid he receive any call from anyone asking for a reference in regard to Mr. Coppola or askingwhy he was terminated. He did admit, however, that he took offence to the fact that in thestatement of claim it was alleged that his conduct in terminating Mr. Coppola was “harsh andvindictive”. He claims that it was only after being served with the statement of claim that heasked two other senior employees, one of the sales managers and the comptroller, toinvestigate whether there was just cause to terminate Mr. Coppola’s employment. He furtheradmitted that the allegation of “dishonest and/or fraudulent conduct” relating to Ms. Mazil’svehicle in the original statement of defence was withdrawn after the examinations fordiscovery in January, 2004. Capital Pontiac no longer alleges just cause for Mr. Coppola’sdismissal.

- 12 -[32] Mr. Axelson testified at the trial that he was unaware at the time that he terminatedMr. Coppola that the two week notice requirement set out in the provincial Labour StandardsAct for employees with less than three years service was only the minimum amount of noticefor all employees or that employees such as Mr. Coppola who occupied managementpositions would normally be entitled to considerably more notice under well establishedcommon law principles. It would therefore serve us well to begin by reviewing some of themore important court decisions which discuss the criteria for determining the period ofreasonable notice in cases such as this.2011 SKQB 318 (CanLII)Wrongful dismissalTHE LEGAL PRINCIPLES AND THEIR APPLICATION[33] Mr. Justice Iacobucci of the Supreme Court of Canada in the case Wallace v. UnitedGrain Growers Ltd. (c.o.b. Public Press), [1997] 3 S.C.R. 701; [1997] S.C.J. No. 94(QL) (atpara. 75), stated the following: “The law has long recognized the mutual right of bothemployers and employees to terminate an employment contract at any time provided thatthere are no express provisions to the contrary.” He referred to a summary of the generalcontractual principles applicable to contracts of employment penned by Mr. Justice Gonthierin Farber v. Royal Trust Co., [1997] 1 S.C.R. 846, wherein he stated (at page 858):In the context of an indeterminate employment contract, one party can resiliate thecontract unilaterally. The resiliation is considered a dismissal if it originates withthe employer and a resignation if it originates with the employee. If an employerdismisses an employee without cause, the employer must give the employeereasonable notice that the contract is about to be terminated or compensation in lieuthereof.

- 13 -[34] Stated in another way, while an employer is entitled to terminate an employee withoutcause, there is an implied term in the employee’s contract of employment that the employerwill give the employee proper notice of termination, during which the employee willcontinue to work under the terms and conditions of his contract. Alternatively, an employercan terminate an employee without cause, but without proper notice. This, however,constitutes a wrongful dismissal, in breach of the employment contract. In thesecircumstances, the employer is obligated to compensate for the breach by making a paymentto the employee in lieu of notice. The Ontario Court of Appeal explained it in this fashion inTaylor v. Brown (2004), 73 O.R. (3d) 358 (Ont. C.A.), at para. 15:2011 SKQB 318 (CanLII)Proper notice of termination is an implied term of the contract of employment;payment in lieu of notice is not. We agree with the opinion of Lambert J.A. in[Dunlop v. B.C. Hydro and Power Authority (1988), 23 C.C.E.L. 96 (B.C.C.A.)]when he states that payment in lieu of notice is seen as “an attempt to compensatefor [the employer’s] breach of the contract of employment, not as an attempt tocomply with an implied term of the contract of employment”.[35] In this case, there is no question that Mr. Coppola was terminated without cause andwithout reasonable notice. The attempt to compensate Mr. Coppola for the lack of reasonablenotice by payment of the equivalent of two weeks’ salary was totally inadequate. In legalterms, Mr. Coppola was wrongfully dismissed because he was terminated in breach of hiscontract of employment, that is, without reasonable notice. As such, it was a termination thatdid not comply with the law. It now falls to this Court to determine what the period ofreasonable notice should have been.

- 14 -Reasonable notice[36] The factors to be considered in assessing what constitutes reasonable notice aresummarized in the statement of Chief Justice McRuer of the Ontario High Court of Justice inBardal v. The Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. S.C.) at p. 145:2011 SKQB 318 (CanLII)There can be no catalogue laid down as to what is reasonable notice in particularclasses of cases. The reasonableness of the notice must be decided with reference toeach particular case, having regard to the character of the employment, the length ofservice of the servant, the age of the servant and the availability of similaremployment, having regard to the experience, training and qualifications of theservant.[37] These four factors were adopted by the Supreme Court of Canada in Machtinger v.HOJ Industries Ltd., [1992] 1 S.C.R. 986, (1992) 11 C.P.C. (3d) 140, and they were appliedby the Supreme Court of Canada in Wallace, and more recently in Honda Canada Inc. v.Keays, 2008 SCC 39, [2008] 2 S.C.R. 362. It is the approach which has been followed in amyriad of cases in this jurisdiction, including: Looman v. Superior Propane Inc. (1994), 126Sask.R. 50 (Q.B.), [1994] S.J. No. 460(QL); Wenarchuk v. Comstock Canada (1997), 160Sask.R. 119 (Q.B.), [1997] S.J. No. 608(QL); Lavallee v. Saskatoon Friendship Inn (1999),175 Sask.R. 22 (Q.B.), [1999] S.J. No. 102(QL); Nagel v. Del-Air Systems Ltd, 2001 SKQB562, 214 Sask.R. 268, [2001] S.J. No. 771 (QL) and Vettraino v. Sun Country Health Region,2007 SKQB 246, 300 Sask.R. 268.[38] In the past, when assessing the character of employment it was common to refer to theemployee’s position in the management hierarchy, such as the number of employees

- 15 -supervised by the plaintiff. In Honda, Mr. Justice Bastarache recognized the recent trend togive less consideration to the dismissed employee’s position in the hierarchy and insteadsuggested (at para. 30) that: “The particular circumstances of the individual should be theconcern of the courts in determining the appropriate period of reasonable notice. Traditionalpresumptions about the role the managerial level plays in reasonable notice can always berebutted by evidence.” He suggested (at para. 27) that what matters is experience andqualifications, in addition to the other factors mentioned in Bardal. He also stated (at para.32) that: “No one Bardal factor should be given disproportionate weight.”2011 SKQB 318 (CanLII)[39] Length of service is another factor which has often borne disproportionate weight inpast court decisions. The rule of thumb was to award one month of notice for each year ofservice—a rule which severely penalized short service employees.[40] This is an issue that was recently thoroughly canvassed in the Ontario Court of Appealdecision Love v. Acuity Investment Management Inc., 2011 ONCA 130, [2011] O.J. No. 771(QL). At trial, the plaintiff was awarded damages equivalent to five months notice. He was achartered accountant who had worked for the investment management company for two anda half years as a senior vice-president in charge of institutional investment clients. He hadacquired a small equity position in the company and expected to increase his holdings evenmore.[41] The Ontario Court of Appeal allowed the plaintiff’s appeal on the issue of the lengthof reasonable notice, finding that the trial judge had overemphasized Mr. Love’s short lengthof service, underemphasized the character of his employment, and failed to consider theavailability of similar employment. The Court of Appeal extended the period of notice uponwhich damages were to be calculated to nine months.

- 16 -[42] With regard to length of service, Mr. Justice Gouge wrote on behalf of the court (atpara. 19):While short service is undoubtedly a factor tending to reduce the appropriate lengthof notice, reference to case law in a search for length of service comparables mustbe done with great care. The risk is that while lengths of service can readily becompared with mathematical precision that is not so easily done with other relevantfactors that go into the determination of notice in each case. Dissimilar cases may betreated as requiring similar notice periods just because the lengths of the service aresimilar. The risk is that length of service will take on a disproportionate weight.2011 SKQB 318 (CanLII)[43] I will refer to four examples of cases where factors other than the relatively shortlength of service resulted in significant length of notice requirements. Three of these are fromthe Ontario Court of Appeal and the other is a recent decision of this Court.[44] In Hall v. Canadian Corporate Management Co. (1984), 4 C.C.E.L. 166, [1984] O.J.No. 61 (QL) (Ont. C.A.), the Ontario Court of Appeal considered an appeal of an award attrial of 12 months notice for a 51 year old employee who had been enticed by a friend to sellhis business in one locale and to join him as Vice-President of Merchandising and Marketingin a new venture in a different city at a substantial salary of $50,000.00 per year. He wasterminated after only 11 months. The trial judge took into account that the employee hadexpected a fairly lengthy period of employment with the new company and that it took himover a year to find new employment. The Court of Appeal decided that the 12 months noticewas too long considering that he had been employed for only 11 months and reduced thenotice period to six months.[45] In Issacs v. MHG International Ltd., 7 D.L.R. (4 th ) 570, [1984] O.J. No. 3155(QL)(Ont. C.A.), a 38 year old employee with a Bachelor of Science degree was hired as a

- 17 -purchasing agent for a company that had been retained to design and build a largepetrochemical plant at a salary of $41,000.00 per year. Less than eight months later, theproject was cancelled and the employee’s services were terminated. The trial judgedetermined that a reasonable notice of termination was nine months, having regard to thenature of the employment and the employee’s age, training and qualifications. The trial judgealso considered that the employee had been enticed from a situation of secure employment.The Ontario Court of Appeal upheld the trial judge’s decision to award damages based onnine months notice, but did state that individual members of the court would have beendisposed to fix a shorter period of six months.2011 SKQB 318 (CanLII)[46] In McNevan v. AmeriCredit Corp, 2008 ONCA 846, 305 D.L.R. (4 th ) 233, 94 O.R.(3d) 458, the plaintiff was dismissed without cause from his position as assistant vicepresidentat one of the defendant’s call centres after 13 months’ service. The trial judge tookinto account a dearth of similar employment available to the plaintiff in his chosen field ofautomotive finance. He also found that it would have been reasonable for the plaintiff toassume that his position was secure given the experience that he brought to the position andthe success he had achieved during the year he was with the company. The Ontario Court ofAppeal found that the trial judge’s award of six months’ notice, while generous, to be withinthe acceptable range given the difficulties that the plaintiff would encounter findingopportunities to match his skill and experience in a smaller urban area. The court referred toboth Hall and Issacs as examples of cases establishing the range.[47] In Vettraino this Court had occasion to consider both Hall and Issacs in the context ofan action brought by a 56 year old social worker with extensive experience in mental healthcounselling and supervision who was dismissed from a $78,000.00 per year position asDirector of Mental Health and Addiction Services for Sun Country Health Region just short

- 18 -of 18 months after assuming the position. He found comparable employment five monthsafter his dismissal. I found that while the plaintiff had not been enticed to leave secureemployment, the offer of reimbursement for relocation expenses conditional on two years’return service at the time of hire created an expectation of secure employment. This Courtawarded the plaintiff damages based on five months’ notice.[48] Having regard to the factors mentioned in Bardal and the other factors referred to insubsequent jurisprudence as noted above, I find Mr. Coppola’s situation to be as follows:2011 SKQB 318 (CanLII)• The character of employment is evidenced in the title which Mr. Coppola wasgiven upon being hired by Capital Pontiac, being Fleet Account Manager. Hisproficiency in retail sales was recognized in a new remuneration plan. A fewmonths later, Mr. Coppola took charge of the AmeriCredit financing portfolioand as a result of his success he was promoted to the position of FinanceManager in addition to retaining his position as Fleet Account Manager. Whileit may be the case that Mr. Coppola did not necessarily supervise otheremployees, he was instrumental in assisting others in closing their deals. Whenhe started with Capital Pontiac in 2000 he earned an average salary ofapproximately $3,450.00 per month. At the time of his dismissal in June of2002, his average salary was almost $12,900.00 per month. Since much of hissalary was based on commissions, there is no question that he was generatingsignificant sales for his employer, Capital Pontiac.• The length of service in this case was just shy of 23 months. Given thephenomenal success that Mr. Coppola had exhibited in managing the fleet

- 19 -sales, conducting retail sales, his handling of the AmeriCredit portfolio andbeing promoted to one of the Finance Manager positions, it would appear thatMr. Coppola had every reason to feel secure in his employment at CapitalPontiac. While the employment principles referred to above clearly establishthat an employee may be dismissed without cause and without the need for theemployer to give any reason, when an employer does proffer a reason, itshould be honest and forthright. The reason given by Mr. Axelson to Mr.Coppola that he was being dismissed because he had decided to reduce thenumber of Finance Managers from three to two does not ring true. While itmakes no difference given the employers’ right to terminate without cause itwould seem in this case that Mr. Coppola’s refusal of a transfer to a differentdealership was more likely the reason for his dismissal, though this was notcommunicated to Mr. Coppola at the time. It may also be the case that Mr.Axelson realized that he had been outwitted in compensation negotiations withMr. Coppola who was now earning almost four times his initial salary.2011 SKQB 318 (CanLII)• Mr. Coppola was 36 years of age at the time of his hiring. He brought with himnine years of experience in automotive sales and management, and he had hadsome success as a self-employed businessman. Given his success as a salesmanat Capital Pontiac, he could have anticipated remaining with the company for anumber of years. He was not close to retirement age. He was young enough toestablish a new career away from automotive sales and financing—which iswhat he eventually did.• Availability of similar employment was a problem for Mr. Coppola. While he

- 20 -did find employment at Bennett Dunlop in Regina two months after hisdismissal, that job lasted less than a month. Mr. Coppola did not lose thatposition because of anything he did or did not do. In considering whether“similar employment” was available to Mr. Coppola in the City of Regina orits environs, I also take into account that it was highly improbable that anyonewould have hired him at the same salary that he was earning at Capital Pontiacat the time of his dismissal.2011 SKQB 318 (CanLII)• Given Mr. Coppola’s experience and qualifications in automotive sales andfinancing and his ability to quickly translate his personal attributes into asuccessful sales career at Capital Pontiac within a short period of time—asevidenced by the substantial salary and commissions he was earning at thetime of his dismissal—I am inclined to place Mr. Coppola into the category ofa senior or higher-ranking employee deserving of a longer period of notice ofdismissal despite his relatively short period of employment at Capital Pontiac.[49] In these particular circumstances, and having carefully considered the precedentsreferred to herein, I find that Mr. Coppola ought to have received six months notice priortermination.Mitigation[50] It is well settled law that the onus is on the employer to establish that the employeefailed to mitigate. (See:Red Deer College v. Michaels and Finn, [1976] 2 S.C.R. 324, [1975]5 W.W.R. 575 (S.C.C.), at pp. 580 and 581.) In this case, Mr. Coppola did obtain

- 21 -employment with Bennett Dunlop for a short period of time following his dismissal fromCapital Pontiac. I am satisfied that Mr. Coppola was not dismissed from his employment withBennett Dunlop for cause. His earnings at Bennett Dunlop will be taken into account inestablishing his damages for the wrongful dismissal. I am also satisfied that Mr. Coppola didmake enquiries of other automobile dealers in Regina but was unable to find similaremployment. In any event, since the onus lies on the plaintiff in this case to prove failure tomitigate, and because no evidence was presented by the plaintiff that similar positions wouldhave been available to Mr. Coppola at similar rates of pay, I find that failure to mitigate is notan issue in this case. In my view, the steps which Mr. Coppola took within weeks of hisdismissal to establish a mortgage brokerage business with Mr. Drayton was entirelyreasonable in the circumstances given his experience in sales and financing.2011 SKQB 318 (CanLII)‘Wallace’ type damages[51] Mr. Coppola also seeks damages for mental distress caused as a result of the mannerin which he was dismissed without cause by Capital Pontiac. The law regarding the awardingof damages beyond compensation for breach of the contract for failure to give reasonablenotice was recently clarified by the Supreme Court of Canada in Honda Canada Inc. v.Keays. An overview of the state of the law was provided by Mr. Justice Bastarache. He stated(at para. 50) that the general rule, which stems from the century old British case of Addis v.Gramophone Co. [1909] A.C. 488 (H.L.), is that damages allocated in an action for wrongfuldismissal are confined to the loss suffered as a result of the employer’s failure to give notice

- 22 -and that no damages are available to the employee for the actual loss of his or her job and/orpain and distress that may have been suffered as a consequence of being terminated. This rulewas affirmed by the Supreme Court of Canada in Peso Silver Mines Ltd. (N.P.L.) v. Cropper,[1966] S.C.R. 673, at p. 684:... the damages cannot be increased by reason of the circumstances of dismissalwhether in respect of the [employee’s] wounded feelings or the prejudicial effectupon his reputation and chances of finding other employment.2011 SKQB 318 (CanLII)[52] Mr. Justice Bastarache noted that the possibility of awarding what was referred to as“aggravated damages” in an action for breach of contract was recognized by Mr. JusticeMcIntyre in Vorvis v. Insurance Corp. of British Columbia, [1989] 1 S.C.R. 1085, wherein hestated at p. 1103:... I would conclude that while aggravated damages may be awarded in actions forbreach of contract in appropriate cases, this is not a case where they should begiven. The rule long established in the Addis and [page388] Peso Silver Mines caseshas generally been applied to deny such damages, and the employer/employeerelationship (in the absence of collective agreements which involve consideration ofthe modern labour law régime) has always been one where either party couldterminate the contract of employment by due notice, and therefore the only damagewhich could arise would result from a failure to give such notice.[53] The possibility of allocating aggravated damages in wrongful dismissal cases wasnevertheless left open where the acts complained of were also independently actionable. Mr.Justice McIntyre stated at p. 1103:I would not wish to be taken as saying that aggravated damages could neverbe awarded in a case of wrongful dismissal, particularly where the acts complainedof were also independently actionable, a factor not present here. [Emphasis added]

- 23 -[54] The issue was taken up by the Supreme Court of Canada again in Wallace. Accordingto Mr. Justice Bastarache, in that decision Mr. Justice Iacobucci endorsed a strictinterpretation of the Vorvis “independently actionable wrong” approach, rejecting both animplied contractual duty of good faith and a tort of bad faith discharge. He quoted thefollowing from para 73 of Wallace:Relying upon the principles enunciated in Vorvis, supra, the Court ofAppeal held that any award of damages beyond compensation for breach of contractfor failure to give reasonable notice of termination “must be founded on a separatelyactionable course of conduct” (p. 184). Although there has been criticism of Vorvis... this is an accurate statement of the law. ... An employment contract is not one inwhich peace of mind is the very matter contracted for (see e.g. Jarvis v. SwansTours Ltd., [1973] 1 Q.B. 233 (C.A.)) and so, absent an independently actionablewrong, the foreseeability of mental distress or the fact that the parties contemplatedits occurrence is of no consequence... . [Emphasis added.]2011 SKQB 318 (CanLII)[55] Justice Bastarache notes (at para. 50) that in the subsequent Supreme Court of Canadadecision of Fidler v. Sun Life Assurance Co. Of Canada, 2006 SCC 30, [2006] 2 S.C.R. 3,Chief Justice McLachlin and Justice Abella concluded that it was no longer necessary thatthere be an independent actionable wrong before damages for mental distress can be awardedfor breach of contract, whether or not it was a “peace of mind” contract. He quotes thefollowing from their decision (at para. 49):We conclude that the “peace of mind” class of cases should not be viewed asan exception to the general rule of the non-availability of damages for mentaldistress in contract law, but rather as an application of the reasonable contemplationor foreseeability principle that applies generally to determine the availability ofdamages for breach of contract.Mr. Justice Bastarache stated that this conclusion was based on the principle, articulated inHadley v. Baxendale (1854), 9 Ex. 341, 156 E.R. 145, that damages are recoverable for a

- 24 -contractual breach if the damages are “such as may fairly and reasonably be considered eitherarising naturally ... from such breach of contract itself, or such as may reasonably besupposed to have been in the contemplation of both parties.”[56] Mr. Justice Bastarache applies the Hadley principle to contracts of employment in thefollowing manner (at paras. 56, 57 and 58):2011 SKQB 318 (CanLII)56 We must therefore begin by asking what was contemplated by the parties at thetime of the formation of the contract, or, as stated in para. 44 of Fidler: “[W]hat didthe contract promise?” The contract of employment is, by its very terms, subject tocancellation on notice or subject to payment of damages in lieu of notice withoutregard to the ordinary psychological impact of that decision. At the time the contractwas formed, there would not ordinarily be contemplation of psychological damageresulting from the dismissal since the dismissal is a clear legal possibility. Thenormal distress and hurt feelings resulting from dismissal are not compensable.57 Damages resulting from the manner of dismissal must then be available only ifthey result from the circumstances described in Wallace, namely where theemployer engages in conduct during the course of dismissal that is “unfair or is inbad faith by being, for example, untruthful, misleading or unduly insensitive” (para.98).58 ... In Wallace, the Court held employers “to an obligation of good faith and fairdealing in the manner of dismissal” (para. 95) and created the expectation that, inthe course of dismissal, employers would be “candid, reasonable, honest andforthright with their employees” (para. 98). At least since that time, then, there hasbeen expectation by both parties to the contract that employers will act in good faithin the manner of dismissal. Failure to do so can lead to foreseeable, compensabledamages. ...[57] Finally, Mr. Justice Bastarache concludes his analysis of the jurisprudence with thefollowing statement (at para. 59):

- 25 -59 ... Damages attributable to conduct in the manner of dismissal are always to beawarded under the Hadley principle. Moreover, in cases where damages areawarded, no extension of the notice period is to be used to determine the properamount to be paid. The amount is to be fixed according to the same principles and inthe same way as in all other cases dealing with moral damages. Thus, if theemployee can prove that the manner of dismissal caused mental distress that was inthe contemplation of the parties, those damages will be awarded not through anarbitrary extension of the notice period, but through an award that reflects the actualdamages. Examples of conduct in dismissal resulting in compensable damages areattacking the employee’s reputation by declarations made at the time of dismissal,misrepresentation regarding the reason for the decision, or dismissal meant todeprive the employee of a pension benefit or other right, permanent status forinstance (see also the examples in Wallace, at paras. 99-100).2011 SKQB 318 (CanLII)[58] Before proceeding to an analysis of examples of conduct in dismissal which mayresult in an award of compensation, I would first make it clear that it is not my intent only toexamine the conduct of Capital Pontiac at the moment of dismissal on June 28, 2002. I amsatisfied that the court is also entitled to consider acts of the employer before and aftertermination. This view was endorsed by the Ontario Court of Appeal in Gismondi v. Toronto(City) (2003), 64 O.R. (3d) 688; 226 D.L.R. (4 th ) 334 (Ont. C.A.), wherein Mr. JusticeRosenberg wrote (at para 23):23 ... I do not disagree with the trial judge’s view that Wallace damages are notlimited to acts of the employer at the very moment of dismissal and can inappropriate circumstances include “the employer’s conduct pre- and posttermination... and the conduct of the employer in its aftermath” but only, in myview, as a component of the manner of dismissal.[59] In addition to enumerating a number of examples of conduct in dismissal which couldgive rise to compensable damages, Mr. Justice Bastarache also suggested looking at theexamples in Wallace mentioned at paras. 99-100. Among those are the cases of Trask v.Terra Nova Motors Ltd. (1995), and Jivrag v. City of Calgary (1986), 45 Alta. L.R. (2d) 343,(Alta. Q.B.), rev’d 62 Alta. L.R. (2d) xlviii.

- 26 -[60] In Trask, the employer wrongfully accused the employee of theft of a small quantityof motor oil. He dismissed the employee for cause and proceeded to inform prospectiveemployers of this accusation. The Newfoundland Supreme Court – Court of Appeal approvedof the trial judge’s award of 18 months notice for the seven year employee, finding that themanner of dismissal was relevant in this case. The trial judge had tacked an additional ninemonths to what would normally have been a nine month award for the reason that thewrongful accusation of involvement in theft would increase the amount of time that theemployee would need to find alternate employment. In addition, the appeal court approvedthe award of $4,000.00 as damages for mental distress, finding no overlap as the extension ofnotice to a period of 18 months reflected estimated additional wages lost by the employeeand the award of $4,000.00 was for pain and suffering.2011 SKQB 318 (CanLII)[61] In Jivrag, the employee, a parking attendant with over five and a half years service,was wrongfully accused of altering the time slips and converting the money to his own use.The employer had also refused to provide a letter of reference. The trial judge determinedthat the allegation of theft was totally unsubstantiated and that the employee was wrongfullydismissed. While he would have ordinarily awarded six months pay in lieu of notice, thejudge found that the employee had suffered great mental anguish as a result of the allegationof theft and increased the award to 15 months salary in lieu of notice.[62] I am of the opinion that Mr. Coppola has established grounds for an award ofaggravated damages for mental distress resulting from the manner of his dismissal fromCapital Pontiac. I find that on June 28, 2002, when Mr. Axelson delivered the news to Mr.Coppola that he was being laid off due to reorganization of the dealership, Mr. Axelson did

- 27 -not have any information regarding any possible fraudulent conduct on the part of Mr.Coppola. I accept the evidence of Mr. Drayton that in early October 2002, he was informedby Tri Stewart, one of the Finance Managers at Capital Pontiac that Mr. Coppola’s dismissalwas as a result of the theft of a vehicle from the dealership. I do not believe Mr. Axelsonwhen he denied talking to any other employees except those in accounting or payroll aboutthe reasons for Mr. Coppola’s lay off, or that it was only after he was served with thestatement of claim on January 30, 2003, that he asked two senior employees to investigatewhether there was just cause to terminate Mr. Coppola. I am satisfied that the allegation ofthe misappropriation of the Gertie Mazil vehicle had been discussed amongst themanagement and staff of Capital Pontiac at least as early as October 2002 when Tri Stewartwarned Mr. Drayton that he should be careful in his dealings with Mr. Coppola.2011 SKQB 318 (CanLII)[63] I accept the evidence of Mr. Coppola to the effect that the accusation of dishonestand/or fraudulent conduct first raised by Mr. Stewart and confirmed in the statement ofdefence and counterclaim served on him on April 11, 2003, were emotionally devastating.These allegations were stressful and caused sleepless nights. They also consumed a great dealof time and effort trying to convince his business partner that the allegations were untrue.Mrs. Coppola confirmed that the loss of his employment at Capital Pontiac was alreadydifficult for Mr. Coppola. However, the allegation made by Mr. Stewart to Mr. Draytonconcerning a missing vehicle was “another blow” which had an effect on Mr. Coppola andhis family. She stated that both she and Mr. Coppola were “shocked” when the allegationappeared in the statement of defence and counterclaim since it accused Mr. Coppola of beinga criminal. While Mr. Coppola did not seek medical attention for the mental distress, I alsoaccept the evidence of Mrs. Coppola that she employed her own skill as a psychiatric nurse tohelp her husband overcome the effects of these false accusations. I am satisfied that the

- 28 -allegation of dishonest and/or fraudulent conduct exacerbated and prolonged the mentaldistress beyond the normal hurt feelings associated with dismissal.[64] In this regard, I find it disturbing that Mr. Axelson did not contact Ms. Mazil directlyabout the alleged misappropriation of her trade-in at a much earlier date. His attempt toconfirm the allegation by asking her to fill out a purported “Customer Survey” on March 14,2003, was disingenuous at best. However, what is completely perplexing is why thestatement of defence and counterclaim prepared on April 11, 2003, alleged that Mr. Coppolahad misappropriated Ms. Mazil’s old car when Ms. Mazil wrote on the survey form that thecar was not worth anything and that Mr. Coppola got rid of the car as a favour to her. IfCapital Pontiac had been honest and forthright with Ms. Mazil, she would have provided thesame full explanation of the transaction that she gave to Mr. Coppola on August 7, 2003(Exhibit P-4).2011 SKQB 318 (CanLII)[65] As stated, employers have an obligation of good faith and fair dealing in the mannerof dismissal. Employers must be candid, reasonable, honest and forthright with theiremployees. I find that Capital Pontiac not only failed to meet its obligations of good faith andfair dealing with Mr. Coppola, but indeed acted in a manner that was harsh and vindictiveostensibly because Mr. Coppola claimed to have been wrongfully dismissed—a claim whichwas well-founded in law. The damages which Mr. Coppola suffered as a result of the falseaccusation of dishonest and/or fraudulent conduct were clearly foreseeable and arecompensable under the Hadley principle. The attack on Mr. Coppola’s reputation and themisrepresentation regarding the reason for his dismissal are the type of conduct in dismissalwhich call for an award of damages for mental distress.

- 29 -[66] Both Mr. Coppola and Mr. Drayton testified that the allegation of dishonest and/orfraudulent conduct delayed the commencement of the mortgage brokerage business for anumber of months. However, following the dictates of the Supreme Court of Canada inHonda, damages attributable to conduct in the manner of dismissal are to be awarded notthrough an arbitrary extension of the notice period, but through an award that reflects actualdamages. Guidance in the awarding of aggravated damages for injuries suffered by reason ofpost-termination conduct can be found in other areas of the law.2011 SKQB 318 (CanLII)[67] In this regard, I refer to the comments of Mr. Justice Iacobucci in Wallace (at paras.105 to 107:105 The availability of compensation for these types of injuries has been recognizedin other areas of the law. In McCarey v. Associated Newspapers Ltd. (No.2), [1965]2 Q.B. 86 (C.A.), Pearson L.J. examined the scope of recovery in an action for libel.At pp. 104-5 he stated:Compensatory damages, in a case in which they are at large, may includeseveral different kinds of compensation to the injured plaintiff. They mayinclude not only actual pecuniary loss and anticipated pecuniary loss or anysocial disadvantages which result, or may be thought likely to result, from thewrong which has been done. They may also include the natural injury to hisfeelings -- the natural grief and distress which he may have felt at havingbeen spoken of in defamatory terms, and if there has been any kind of highhanded,oppressive, insulting or contumelious behaviour by the defendantwhich increases the mental pain and suffering caused by the defamation andmay constitute injury to the plaintiff's pride and self-confidence, those areproper elements to be taken into account in a case where the damages are atlarge.106 Pearson L.J.’s list of the elements properly compensated for in an award of thistype found favour with the Nova Scotia Supreme Court, Appeal Division inBarltrop v. Canadian Broadcasting Corp. (1978), 25 N.S.R. (2d) 637, at pp. 661-62,leave to appeal refused, [1978] 1 S.C.R. vi. Having been asked to assess damages inan action for defamation, MacKeigan C.J.N.S., writing for a unanimous court,quoted the above cited passage with approval (see also: Stumpf v. Globe HoldingsLtd. (1982), 22 Alta. L.R. (2d) 55 (Q.B.), at p. 61).

- 30 -107 In my view, there is no valid reason why the scope of compensable injuries indefamation situations should not be equally recognized in the context of wrongfuldismissal from employment. The law should be mindful of the acute vulnerability ofterminated employees and ensure their protection by encouraging proper conductand preventing all injurious losses which might flow from acts of bad faith or unfairdealing on dismissal, both tangible and intangible. I note that there may be thosewho would say that this approach imposes an onerous obligation on employers. Iwould respond simply by saying that I fail to see how it can be onerous to treatpeople fairly, reasonably, and decently at a time of trauma and despair. In my view,the reasonable person would expect such treatment. So should the law.2011 SKQB 318 (CanLII)[68] These principles were applied by Justice Grace of the Ontario Superior Court ofJustice in Pagliaroli v. Rite-Pak Produce Co., 2010 ONSC 3729, [2010] O.J. No. 3017(QL),in upholding an arbitrator’s award of $25,000.00 for aggravated damages in a constructivedismissal case. Approximately one month after his termination, the employer made a speechat a Christmas party in which he insinuated that the employee had been dismissed forcorruption and dishonesty. After referring to the above passages from Wallace, Justice Gracewrote (at para. 61):61 Those principles apply with full force to conduct that occurs after termination. Inthis case, Mr. Pagliaroli maintained that the usual “hurt feelings” which flow fromdismissal were exacerbated by a later, thinly veiled and wide-ranging attack on hischaracter. Given the circumstances, Mr. Pagliaroli was unable to respond. Thearbitrator agreed the speech went too far. While the absence of medical evidence is aconcern, there was factual support for the arbitrator's conclusion the speech causedmental distress: Francis v. Canadian Imperial Bank of Commerce, [1994] O.J. No.2657 (C.A.). While Mr. DuVernet is correct in saying the arbitrator did not label the“independent actionable wrong”, the arbitrator clearly viewed the speech asdefamatory and to use the words in Wallace “unfair dealing”: Plester v. WawanesaMutual Insurance Co., [2006] O.J. No. 2139 (C.A.). In my view, the arbitrator didnot err in awarding $25,000 on account of aggravated damages.[69] In Chapell v. Canadian Pacific Railway Co., 2010 ABQB 441, 29 Alta. L.R. (5 th ) 380,a 27 year employee was dismissed after the employer became aware that he had submitted

- 31 -expense accounts which contained duplicate items. The court found that the employee hadbeen wrongfully dismissed, accepting the employee’s explanation that the duplicates weresubmitted in error. The trial judge also held that the manner in which CPR dismissed him wasunduly insensitive and unfair. The trial judge accepted the plaintiff’s evidence of mentaldistress though it was unsupported by any medical reports. Following is an excerpt from thejudge’s decision (at para. 101 and 102):2011 SKQB 318 (CanLII)101 At trial, when asked how he felt after his dismissal, Mr. Chapell stated: “I didn'tget out of bed for I guess about three weeks. I was depressed.” I accept thisevidence. I find Mr. Chapell is a stoic individual for whom these manifestationswould be indicative of mental distress. The Defendant submitted in oral argumentthat for an employee to receive bad faith damages post-Honda Canada that theemployee must tender evidence beyond his own testimony that the mental distresssuffered went beyond the normal hurt feelings associated with the loss ofemployment. Based on the authorities provided by the Defendant to support thatproposition I agree that further evidence, for example medical reports, would be afactor to consider, however, it is not required. For example, in Simmons v. Webb(2008), 54 B.L.R. (4th) 197 (Ont. S.C.J.), bad faith damages on the principlesenunciated in Honda Canada were awarded seemingly without reliance on evidencebeyond that of the plaintiff employee. I find that there is sufficient evidence onwhich to conclude that Mr. Chapell’s distress went beyond the normal hurt feelingsassociated with dismissal and should be awarded bad faith damages.102 In the case of Simmons, a 20 year employee was abruptly fired by a letter whichinformed him of his termination and bluntly directed him to immediately remove hispersonal effects from the premises. The employer refused to return property of greatsentimental value to the employee. The Court found that the actions of the employerwere insensitive, and lacked courtesy, respect and compassion. Failing to return thetreasured property was mean-spirited, petty and insensitive. I find that thecircumstances under which Mr. Chapell was dismissed should garner bad faithdamages in the same range as the court ordered in Simmons. CPR, in the manner inwhich it dismissed Mr. Chapell, humiliated him after a long and successful career,devaluing his contribution to the company and his self-worth through aninvestigation focussed on case building against him that led to his unwarranteddismissal for cause. The utter humiliation that Mr. Chapell had to have experiencedboth directly and indirectly is similar to the behaviour that the employee in Simmonsexperienced.

- 32 -The award of bad faith damages in each of these cases was $20,000.00.[70] In this case, it appears that the allegation of dishonest and/or fraudulent conduct wasnot widely circulated. There is no doubt that a number of employees of Capital Pontiac wereinvolved in investigating possible grounds to establish just cause for Mr. Coppola’sdismissal. There is no question that Mr. Stewart warned Mr. Drayton that he should becareful in his dealings with Mr. Coppola because he had misappropriated a vehicle. There isno evidence that Mr. Axelson mentioned the alleged theft of Gertie Mazil’s vehicle to anyprospective employer or that he was ever asked for a reference from any prospectiveemployer. Mr. Coppola was obligated to inform Gertie Mazil of the allegation in order toobtain a statement from her exonerating him of any wrong-doing. Other than that, theallegation was discussed in correspondence between the parties’ solicitors and it wasmentioned in the court pleadings. Mr. Coppola informed his family and siblings about theallegation. He testified that he continually wondered who else was aware of the allegationand whether it would affect his ability to obtain a mortgage brokerage licence. Mr. Coppolaalso found it extremely frustrating that Capital Pontiac did not withdraw the allegation untilafter the examinations for discovery in January of 2004. He also was disappointed in the factthat Mr. Axelson never apologized to him for having made the false allegation in the firstplace.2011 SKQB 318 (CanLII)[71] In the circumstances, I am of the view that Mr. Coppola is entitled to a substantialaward for aggravated damages for mental distress caused by the false allegation of dishonestand/or fraudulent conduct following his wrongful dismissal from Capital Pontiac. I amsatisfied that the mental distress suffered by Mr. Coppola was comparable to that experienced

- 33 -by the plaintiffs in the above cited cases of Pagliaroli, Chapell and Simmons. I have decidedthat a reasonable award for aggravated damages in this case is $20,000.00.Punitive damages[72] Mr. Coppola has also asked for punitive damages. The purpose of such an awardwould be to punish the defendant. The principles to be considered in deciding whether anaward of punitive damages should be made are set out in this passage from Whiten v. PilotInsurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595 at para. 94, where Mr. Justice Binnieenumerated the salient points which might be included in a charge to the jury tasked withassessing punitive damages:2011 SKQB 318 (CanLII)94 ... (1) Punitive damages are very much the exception rather than the rule, (2)imposed only if there has been high-handed, malicious, arbitrary or highlyreprehensible misconduct that departs to a marked degree from ordinary standards ofdecent behaviour. (3) Where they are awarded, punitive damages should be assessedin an amount reasonably proportionate to such factors as the harm caused, thedegree of the misconduct, the relative vulnerability of the plaintiff and anyadvantage or profit gained by the defendant, (4) having regard to any other fines orpenalties suffered by the defendant for the misconduct in question. (5) Punitivedamages are generally given only where the misconduct would otherwise beunpunished or where other penalties are or are likely to be inadequate to achieve theobjectives of retribution, deterrence and denunciation. (6) Their purpose is not tocompensate the plaintiff, but (7) to give a defendant his or her just desert(retribution), to deter the defendant and others from similar misconduct in the future(deterrence), and to mark the community’s collective condemnation (denunciation)of what has happened. (8) Punitive damages are awarded only where compensatorydamages, which to some extent are punitive, are insufficient to accomplish theseobjectives, and (9) they are given in an amount that is no greater than necessary torationally accomplish their purpose. (10) While normally the state would be therecipient of any fine or penalty for misconduct, the plaintiff will keep punitivedamages as a “windfall” in addition to compensatory damages. (11) Judges andjuries in our system have usually found that moderate awards of punitive damages,which inevitably carry a stigma in the broader community, are generally sufficient.

- 34 -[73] The threshold issue is whether Capital Pontiac’s conduct in dismissal was sooutrageous that punitive damages are necessary for the purpose of deterrence, denunciationand retribution. In my view, this is not a case which calls for the imposition of punitivedamages. Significant compensatory damages have already been awarded under the headingsof pay in lieu of notice and aggravated damages. These awards are, in my opinion, adequateto achieve the objectives of retribution, deterrence and denunciation.2011 SKQB 318 (CanLII)OTHER ISSUESCosts[74] Mr. Coppola is entitled to his costs of this action to be taxed with the exception that nocosts are awarded relating to the calling of Mr. Lorne Wirth as an expert.[75] As I have previously indicated, Mr. Wirth provided opinion evidence estimating thetotal income lost by Mr. Coppola from the time of his dismissal from Capital Pontiac in 2002until he was able to again earn the same level of income in his new business venture in 2005.I am not aware of any case law emanating from any court in Canada where the damage forthe breach of the obligation to give reasonable notice is calculated in this manner. In addition,while I give little weight to Mr. Wirth’s evidence regarding the loss from the sale of a rentalproperty, the income from which Mr. Coppola used to tide himself over during his careerchange, I am also of the opinion that this is not compensable as part of aggravated damagesunder the Hadley principles as damages reasonably arising from the breach of contract or thatmay have been in contemplation of the parties.

- 35 -Pre-judgment interest[76] Mr. Coppola has claimed pre-judgment interest pursuant to The Pre-judgment InterestAct, S.S. 1984-85-86, c. P-22.2. Interest shall be payable on that portion of this judgmentwhich represents pay in lieu of notice in accordance with s. 6(2) of the Act calculated at threemonth intervals commencing June 28, 2002, (excepting that portion paid to him as severanceon July 2, 2002). Interest shall be payable in accordance with s. 6(1) of the Act on thatportion of the judgment which represents aggravated damages from January 1, 2003.2011 SKQB 318 (CanLII)Employment insurance[77] Mr. Coppola reported receiving $8,673.00 in employment insurance in 2002 and$6,195.00 in 2003. I am unable to ascertain whether all of the employment benefits receivedin these years relate to the period between his dismissal in June 2002 and his return toemployment with Quick Response Mortgage Services Ltd. The issue is pertinent because ofthe application of ss. 45 and 46 of the Employment Insurance Act, S.C. 1996, c. 23 whichstate:45. If a claimant receives benefits for a period and, under a labour arbitration awardor court judgment, or for any other reason, an employer, a trustee in bankruptcy orany other person subsequently becomes liable to pay earnings, including damagesfor wrongful dismissal or proceeds realized from the property of a bankrupt to theclaimant for the same period and pays the earnings, the claimant shall pay to theReceiver General as repayment of an overpayment of benefits an amount equal tothe benefits that would not have been paid if the earnings had been paid or payableat the time the benefits were paid.46.(1) If under a labour arbitration award or court judgment, or for any other reason,an employer, a trustee in bankruptcy or any other person becomes liable to payearnings, including damages for wrongful dismissal or proceeds realized from the

- 36 -property of a bankrupt, to a claimant for a period and has reason to believe thatbenefits have been paid to the claimant for that period, the employer or other personshall ascertain whether an amount would be repayable under section 45 if theearnings were paid to the claimant and if so shall deduct the amount from theearnings payable to the claimant and remit it to the Receiver General as repaymentof an overpayment of benefits.[78] I will leave it to counsel for the parties to make the appropriate inquiries to determineif any amount of the award relating to pay in lieu of notice is repayable to the ReceiverGeneral and who will remit any amount payable.2011 SKQB 318 (CanLII)Income tax[79] Counsel should also be aware that s. 248 of the Income Tax Act, R.S.C. c. 1 1985(5 th Supp.) defines “retiring allowance” as including an amount “in respect of a loss of anoffice or employment of a taxpayer, whether or not received as, on account of or in lieu ofpayment of, damages pursuant to an order or judgment of a competent tribunal”. Once again,I will leave it to counsel for the parties to determine whether any amount of the pay in lieu ofnotice must be remitted to the Receiver General on account of income taxes.Loss of benefits[80] Mr. Coppola had also claimed loss of employee benefits including group medicalcoverage, group insurance, dental plan and any other incidental benefits. No loss of benefitswas proved at the trial except for the $300.00 per month vehicle allowance. Mr. Axelsonallowed Mr. Coppola to continue using his demonstrator vehicle for two weeks after histermination. Mr. Coppola is entitled to recover the loss of use of a vehicle for the balance of

- 37 -the six month notice period. The value of the vehicle benefit for five and one-half months is$1,650.00.SUMMARY[81] Mr. Coppola was earning the equivalent of $154,526.16 per year or $12,877.18 permonth at the time of his dismissal. The amount of salary he would have earned during the sixmonth reasonable notice period was $77,263.08. He received the sum of $8,535.76representing two weeks’ notice pursuant to The Labour Standards Act, R.S.S. 1978, c. L-1 onJuly 2, 2002. Also to be deducted is the amount of $2,342.58 which is the amount that Mr.Coppola earned at Bennett Dunlop during the reasonable notice period. The balance payableby Capital Pontiac to Mr. Coppola as pay in lieu of notice is $66,384.74.2011 SKQB 318 (CanLII)[82] In addition, Capital Pontiac will pay to Mr. Coppola $1,650.00 for loss of the vehiclebenefit during the reasonable notice period.[83] Finally, Capital Pontiac will also pay to Mr. Coppola the sum of $20,000.00 inaggravated damages resulting from the employer’s conduct in the manner of dismissal.[84] Accordingly, Mr. Coppola will have judgment against Capital Pontiac for $88,034.74minus any amount remitted to the Receiver General as an overpayment of employmentinsurance benefits or income taxes. Interest calculated pursuant to The Pre-judgment InterestAct and as directed herein shall be added to the judgment. Mr. Coppola shall have his costs ofthis action, to be taxed, excluding costs related to the calling of the expert witness.J.G. A. Chicoine

IN THE PROVINCIAL COURT OF NOVA SCOTIACitation: R. v. Della Valle, 2011 NSPC 67Date: 14 September 2011Docket: 2202580Registry: SydneyBetween:HER MAJESTY THE QUEENvsJames Edward Della ValleLIBRARY HEADING.Charge:s. 17 Occupational Health and Safety Act of Nova ScotiaHeard:June 20 and 21 st , and September 14, 2011 at Sydney, N.SJudge:A. Peter Ross, P.C.J.Counsel:Mr. Peter Craig, Crown AttorneyMr. Tony Mozvik, Defense Attorney

SummaryFollowing concerns raised by an employee, testing was conducted on vermiculiteinsulation in attics of housing units owned and maintained by the Cape Breton IslandHousing Authority. The Defendant, who was the Occupational Health and SafetyCoordinator of CBIHA, came into possession of a written report which confirmed thepresence of asbestos in this material. The report outlined steps which ought to be takento protect both maintenance workers and occupants. The Defendant gave a copy toand discussed the report with two maintenance supervisors. He thereafter assumed theconcerns would be acted on.Six months later the matter came to the attention of the CBIHA Director. In the interim,no steps had been taken within the organization to address the concerns outlined in thereport. Remediation was subsequently undertaken.The Defendant was charged under the Occupational Health and Safety Act, s.17, withfailing to take every reasonable precaution in the circumstances to protect the healthand safety of employees and of other persons at or near the workplace. He was foundguilty after trial.The tenants were deemed to be “other persons” within the meaning of s.17Steps which the Defendant ought to have taken included bringing the matter to theattention of the Joint Occupational Health and Safety Committee, bringing the report tothe attention of the Director, and making active inquiries of the two maintenancesupervisors as to any follow-up. The Defendant’s job description and the legislativeframework were contextual factors.It is not necessary that the Crown prove, by expert medical evidence, actual risk tohealth, nor any actual resulting harm. The meaning of endangerment, and what givesrise to a duty to act, are discussed.Proof of the actus reus of general duty offences such as s.17, and the implications ofsuch proof on the defense of due diligence, are discussed.

IN THE PROVINCIAL COURT OF NOVA SCOTIACitation: R. v. Della Valle, 2011 NSPC 67Date: 14 September 2011Docket: 2202580Registry: SydneyBetween:HER MAJESTY THE QUEENvsJames Edward Della ValleDECISION.Charge:s. 17 Occupational Health and Safety Act of Nova ScotiaHeard:June 20 and 21 st , and September 14, 2011 at Sydney, N.SJudge:A. Peter Ross, P.C.J.Counsel:Mr. Peter Craig, Crown AttorneyMr. Tony Mozvik, Defense Attorney

2REASONS FOR DECISIONIntroduction[1] Mr. Della Valle was charged on July 16, 2010 with an offence under theOccupational Health and Safety Act of Nova Scotia which is alleged to have occurredbetween October 25 th , 2005 and April 6, 2006. The Information charges that “as anemployee of the Cape Breton Island Housing authority he failed to take everyreasonable precaution in the circumstances to protect the employee’s own safety andthat of other persons at or near the workplace contrary to s.17 of the OccupationalHealth and Safety Act”[2] Mr. Della Valle is one of three persons charged as a result of the discovery ofasbestos-containing vermiculite insulation in certain rental units of the Cape BretonIsland Housing Authority in 2006. Mr. Della Valle pled not guilty and the mattereventually went to trial in this court in June of 2011.[3] I have concluded that Mr. Della Valle is guilty of the offence and will set outreasons for this decision below.[4] S. 17 states that every employee, while at work, shall take every reasonableprecaution in the circumstances to protect the employee's own health and safety andthat of other persons at or near the workplace. Crown describes this as a “general dutyprovision” made necessary in regulatory legislation by the fact that the regulators cannotforesee every possible contingency.[5] Although the duty to act arises from the defendant’s employment with the CBIHA,the duty he is alleged to have breached was owed not only to other employees orworkers, but in large measure to tenants in various housing units owned and maintainedby CBIHA. This case is thus largely concerned with the possible risk to those “other

3persons at or near the workplace”. As such the case is different from most OHSviolations which come before the courts.[6] Specifically, the duty arose when Mr. Della Valle, who was employed with CBIHAas Occupational Health and Safety Coordinator, became aware of the presence ofasbestos-laden vermiculite insulation in a number of housing units operated by CBIHA.It is alleged that the measures he took were inadequate – i.e. that he ought to havetaken further precautions to protect the workers and tenants from the health risksapparently presented by this material.[7] Responsibility for health and safety at the workplace is diffuse in the sense thatno one person bears it alone. The OHS Act attempts to ensure that systems are inplace to monitor and address issues of health and safety. Others besides Mr. DellaValle have been charged with failing to discharge their s.17 duty. It is clear that anyfailings do not devolve to this defendant alone. At the same time, responsibility, evenfor systemic issues, must at some point rest on individual shoulders. The court’s task isto consider what that responsibility entailed (in the particular circumstances of this case)and then to determine whether that responsibility was exercised as the law required.The case is confined to Mr. Della Valle’s role; is not an inquiry into the broader aspectsof this highly publicized matter nor is this an adjudication on the responsibility of otherswho were charged.[8] I should also say at the outset that although the health concerns aroundasbestos-containing materials are central to an understanding of the case, the trial isnot meant to be a verdict on those concerns. Nor should it be viewed as adetermination of the actual health implications (if any) for tenants and workers in thesubject premises. Rather, the case is about the apparent risk to health and safetywhich emerged from the information at hand, and what actions a reasonable andprudent person in the defendant’s position, possessed with such knowledge, ought tohave undertaken.Facts[9] I will reproduce an Agreed Statement of Facts submitted by Crown and Defense.The defendant’s statement to investigators from the Department of Labour was alsointroduced into evidence. These were supplemented by testimony from Darrell McNeil,David Muggah, Cyril Leudey and the defendant (all of whom are mentioned in the

4agreed statement) and also by testimony from Joan McKeough who was Director ofCBIHA at the relevant time. In addition an Exhibit Book of some 21 documents wastendered. It contains various internal memos and correspondence, job descriptions,safety policies, handling practices for asbestos, etc. I will reference these as needed.[10] Agreed Statement of Facts1. In August or September, 2005, Todd Marsman and Tom Ellsworth, Cape Breton IslandHousing Authority maintenance employees, were working at #3 Rose Terrace in Sydney.Ellsworth noted some insulation material falling on him from out of the ceiling. Marsmanrecognized it as a potential health hazard from a TV program he recently watched whichreported the insulation often contained asbestos. Marsman immediately notified hissupervisor, Darrell McNeil, of his concerns. At McNeil’s request, Marsman collected asample and gave it to him for testing, placing it in a clear plastic zip-loc bag.2. On or about Oct. 4, 2005, Jamie Della Valle, CBIHA Health and Safety Coordinator,was in McNeil’s office and saw the sample and inquired about it. McNeil advised himthat it was to be tested and asked Della Valle if he would take it to David Muggah,Atlantic Indoor Air Audit Co., for that purpose. Della Valle did so.3. On or about 25 Oct. 2005, David Muggah, Atlantic Indoor Air Audit Co., advised DellaValle that the analysis results had been received. In his cautioned statement to theinvestigators, Della Valle provided the following information:a. that Muggah advised him that the sample did in fact contain asbestos;b. that Muggah advised him of the health hazards associated and precautions to betaken with vermiculite insulation containing asbestos;c. that Muggah asked where the sample had come from and inquired as to theconstruction of the unit;d. that Muggah advised him that the employees should be notified regarding thepresence of the asbestos;e. that Muggah advised him that the perimeter of the ceiling (where it abuts theunit’s concrete walls) should be sealed;f. that Muggah advised him that the attic hatches should be locked; andg. that Muggah advised him that he (Muggah) had vermiculite insulation in hisown home.4. On or about October 26, 2005, Della Valle made a copy of the Atlantic Indoor Air AuditCo. Report and hand-delivered it to McNeil at his office. Della Valle further advised inhis statement:a. that he explained the contents of the report to McNeil;

5b. that he relayed Muggah’s advice to McNeil that employees should be notified;that the ceilings would have to be sealed at their perimeter to prevent vermiculitefrom entering into the units’ living space; and that the attic hatches should belocked to limit access;c. that McNeil advised him that he (McNeil) would contact Cyril Leudey(Department of Community Services) and would advise the employees; andd. that McNeil advised him that he (Della Valle) should also provide ToddRoutledge with a copy of the Report. (Routledge is another maintenancesupervisor responsible for housing units in another district of Sydney that areidentical in design and structure to the units supervised by McNeil).5. On or about October 26, 2005, Della Valle hand-delivered a copy of the Report toRoutledge and relayed to him Muggah’s advice regarding notification of the employees,sealing the perimeter of the ceilings and locking the attic hatches.6. Despite his role as Health and Safety Coordinator, Della Valle did not report thesefindings to the CBIHA Director who was his supervisor. He also failed to advise anyother management personnel, the employees, contractor employees or the JointOccupational Health and Safety Committee (JOHSC). In addition, he did not follow upto determine if the measures recommended by Mr. Muggah were actually beingimplemented by Darrell McNeil and Todd Routledge.7. Routledge and McNeil, having been duly informed of the asbestos risk, failed to advisetheir direct supervisor(s), members of the JOHSC, CBIHA employees or contractoremployees, that a sample of vermiculite insulation taken from an attic in a housing unitcontained asbestos. Neither of them took steps to ensure that the measuresrecommended by Muggah were implemented.8. Darrell McNeil did contact Cyril Leudey, Coordinator Project Management, Departmentof Community Services, regarding this issue.9. McNeil asserted that in contacting Cyril Leudey he had fulfilled his obligation under theOccupational Health and Safety Act. He indicated that he did not take any furtheraction as he was awaiting directions from Leudey in that regard. However, in hisstatement, Leudey noted the following:a. that there is no direct reporting relationship between himself and McNeil;b. that his role was to provide technical advice to McNeil which he did;c. that nothing was said or done that would cause McNeil to believe he shouldawait further directions before taking the recommended measures to deal with thevermiculite;d. that McNeil would not require his approval prior to taking such measures; and

6e. that it was not his responsibility to ensure that CBIHA Health and Safety issueswere addressed.10. On several occasions Todd Marsman, the employee who initially reported the concern toMcNeil, inquired as to the status of the sample. McNeil responded with various differentcomments to the effect that the sample results had not been received. However, McNeilhad the sample results since October 26, 2005. Despite Marsman’s repeated inquires,McNeil never disclosed the sample results to him. Marsman did not find out until April2006 when the matter became pubic.11. On several occasions, Tom Ellsworth also asked McNeil about the results ofthe sample taken by Marsman. He also was never informed about the results of theanalysis.12. On Jan. 13, 2006, outside contractor Michael Gillis (Amblynn Electric) was advised byone of his employees, Allan MacEachern, that the Ashby Terraces might containasbestos. On this same date, Michael Gillis sent an e-mail to both Routledge andMcNeil, asking them to verify if this was true. A couple of days later, McNeil contactedGillis and advised him that a sample had been sent away and nothing had come backyet, and the sample was lost and that he didn’t know if another would be taken. Again, itis clear that McNeil had known of the test results since October 26, 2005.13. Gillis persisted in his inquiries and on March 31 st , 2006, he was provided with a copyof the analysis Atlantic Indoor Air Audit Co. Report by Todd Routledge who informedhim that he had just found it on his desk.14. Gillis stated that between Oct. 2005 and Mar. 31, 2006, he definitely hademployees working in CBIHA attics that had asbestos-containing vermiculiteinsulation.15. On April 3, 2006, the Occupational Health & Safety Division of the Department ofEnvironment & Labour was contacted by Gillis reporting that his employees had beenexposed to asbestos in various public housing units in the Sydney area managed by theCape Breton Island Housing Authority (CBIHA). He reported that after repeatedrequests he was provided with a Report that confirmed the presence of asbestos. Theinvestigation determined that both CBIHA and contracted employees worked in atticareas of provincial public housing units between Oct. 2005 and the time of Gillis’ reportto the Occupational Health and Safety Division on April 3, 2006. This was determinedby examining work orders for affected properties during this time period. The number ofwork orders generated for these properties number 515 and are as follows:a)...Ashby Terraces...227 work orders dispatchedb)...Pier Terraces.......161 work orders dispatchedc)...250 James Street....27 work orders dispatchedd)...350 Terrace Street. 78 work orders dispatched

7Contractors: Amblynn Electric...22 work orders dispatched to places where vermiculitewas known to be present.[11] After April 2006 remediation work was undertaken on 80 units, which includedsealing, air monitoring, and eventually (when roofs were replaced) removal. It goeswithout saying that this response was much too late in coming.[12] The attic spaces were not living spaces. From the defendant’s testimony itappears they were empty, windowless and relatively small, containing only theinsulation and electrical wires. From a tenant’s perspective they would seem likely andlogical places for storage.[13] The defendant appears in the foregoing script on October 4 , 2005 (par. 2) anddisappears on October 26 of the same year (par. 6). The time frame of the chargeagainst him extends through to April 6 th of the following year. It is his absence from theAgreed Statement which leads to the charge. After October 26th the defendant didnothing further. The Crown’s case is that this very inaction constitutes a breach of s.17.The defence asserts that the steps Mr. Della Valle took in October are all that shouldreasonably be expected of him.[14] Cyril Leudey was employed by the Department of Community Services tocoordinate various projects between DCS and other agencies, such as CBIHA. In thissense he was a go-between, relaying technical information and advice. He had donethis in 1999 in respect to asbestos insulation found under a few balconies on CBIHAproperties. He had virtually no recollection of a Housing Services Quarterly Meeting inJune of 2005 where the minutes state that vermiculite insulation was discussed, but notconsidered to be present in Housing Authority units. In summary, Mr. Leudey neverspoke to the defendant about this or any other safety issue during the relevant timeperiod and his evidence has little bearing on the outcome of this trial.[15] Joan McKeough testified that the CBIHA administers about 3200 rentalproperties on behalf of DCS in Cape Breton. These accommodate primarily moderateto low income families and seniors.[16] On April 4, 2006 the defendant informed Ms McKeough of a letter addressed toher dated March 31, 2006. The letter was received by fax at CBIHA. The letter wasfrom a Mr. Gillis of Amblynn Electric, a contractor doing electrical work in a CBIHA unit.An employee of this firm had evidently voiced concern to his boss in the month previousabout the presence of asbestos in the work space. The contractor came intopossession of the October 25, 2005 report from Mr. Muggah and had spoken with the

8Department of Labour. The firm advised that it would not continue with electrical repairsto 2 nd floor units and expressed concern that tenants, maintenance personnel andcontractors had not been notified of the situation.[17] Mr. Della Valle gave a statement to Department of Labour investigators, andtestified at his trial. He began to work with CBIHA as a student in 1989 in amaintenance position, and was hired as its OHS Coordinator in September of 2004. Itappears he shared the job for a few months, but took over sole responsibility in July of2005. While he was not paid at the level of top managers, the organizational chart putshim at the top level, reporting directly to the Director, Ms. McKeough. He was not, until2009, invited to attend management meetings. His is the only position to which no otherreports. On the maintenance side, by contrast, there are many levels of reporting, withproperty managers, maintenance supervisors and maintenance workers in adescending line of authority.[18] Mr. Della Valle thus occupied a unique position within the organization. His role,set out in his job description and considered in the context of the legislation, was topromote a safe and healthy workplace. While there were specific projects heundertook, and particular duties spelled out, he also bore a general responsibility forhealth and safety within the organization. It is true that he was not engaged “hands-on”with repairs and maintenance. He might only rarely attend at one of the housing units.But while this distances him from the responsibility to supervise particular jobs atspecific sites and times, it does not diminish his responsibility for health and safetymatters in the broader sense. This issue was indeed a broadly-based health and safetyissue which required a systemic response.[19] Although the defendant “reported” the Muggah letter to two of the maintenancesupervisors, MacNeil and Routledge, it is clear that he was not directly accountable tothem within the organization. With the person he did “report to”, he was conspicuouslysilent.[20] Mr. Della Valle would also have known that MacNeil and Routledge exercisedauthority over the maintenance employees, but he would know too that the concerns oftenants were not their primary responsibility and that they did not exercise exclusivesupervision over contracted employees.[21] Mr. Della Valle said that fire drills and a “return to work” program occupied mostof his time. He was updating the safety manual, which included procedures on jobhazard assessments. He attended most JOHS committee meetings, held monthly, and

9acted as a resource for them. He also met with Ms. McKeough regularly. If there was arelatively serious incident at a worksite – damage, an injury or “near-miss”, a tenant’saccident – the supervisor’s report of such would come to him for review. He in turnwould review these with Ms. McKeough who would, in his words, “sign-off” on such. Hesays he would have little to do with the implementation of follow-up measures; rather,these were undertaken by the people directly involved in maintenance.[22] The morning after Mr. Della Valle received the Muggah report (par.3 and 4. of theAgreed Statement) he made a copy and went to see Mr. MacNeil to discuss it. He toldMacNeil what Muggah had told him, and at MacNeil’s suggestion went to Routledge anddid the same. He says he was aware that MacNeil sought advice from Mr. Leudey onOctober 27 th . With this he “took for granted” that action would ensue. He did notconsider himself a manager within the organization. He believed from past practice thathe would not be involved in any decision-making on what action would be undertaken.While it appears that Mr. Della Valle felt somewhat marginalized, there is no evidencethat he was ever ignored, pushed aside, or intimidated. He kept the original of Mr.Muggah’s letter in his own files.[23] Joan McKeough confirmed that she was the defendant’s direct supervisor. Theyworked in the same building and had frequent conversations and meetings. It was herexpectation that he would have reported this matter to her “if he understood thesignificance of it.” It is difficult to see how he could not have understood the significanceof the Muggah report. Ms. McKeough also confirmed that according to policy staff wererequired to report all incidents, accidents, etc. and that the defendant would, as part ofhis job, review all such reports. While Mr. Muggah’s letter did not come forward in theusual way - it was, in other words, not a typical incident report filed in the usual form -the letter surely was tantamount to a report on an incident of extreme importance tomany people. Given the practice under which the defendant reviewed incident reportswith Ms. McKeough, it is difficult to understand why he would make an exception in thisinstance.[24] Ms. McKeough also understood that the OHS Coordinator should report knownhazards to the JOHS Committee. While the defendant did report the matter to Mr.Routledge, who happened to be management’s representative on this committee, hedid not report it at or in the context of a JOHS committee meeting.[25] Mr. MacNeil pled guilty to this same offence on May 13 th , 2011. This does notexonerate the defendant, needless to say, given the principle of shared responsibility inthe OHS Act. Nevertheless Mr. MacNeil appears willing to shoulder the blame, saying

10that “the buck stopped with me” and describing the OHS Coordinator as an “informationsource”. He confirmed that if Mr. Della Valle happened to see something untoward ona worksite he would go to one of the supervisors for corrective action, having no directauthority over the employees.[26] Mr. MacNeil says that the defendant told him to “notify his men”, and MacNeilclaims to have done this verbally at toolbox meetings where he advised the workers “notto disturb it”. He also faxed the Muggah letter off to Cyril Leudey, but did little else. Inthe months after October of 2005 it appears he put off inquiries from certain individualsabout possible asbestos contamination. When, in April, Mr. Gillis of Amblynn Electricasked him about the Muggah report MacNeil said he’d forgotten he had it. ApparentlyMr. Routledge had given the report to Mr. Gillis on March 31, 2006.[27] When questioned by investigators, Mr. Della Valle said “I never received anyissues pertaining to asbestos in vermiculite from either tool box talks, hazardassessment, worksite inspections or employee investigations all of which came to mefor review and filing” In the same statement he was asked “Did you . . . take anyindependent action regarding disseminating of the information relating to the presenceof the asbestos in the insulation, or to ensure that the measures recommended by Mr.Muggah . . . were actually carried out?” to which he replied “No I did not…I took it forgranted that action would be carried out” He then made a comparison with priorpractice with fire drill inspections whereby he would recommend action on deficienciesto supervisors and thereafter assume such recommendations were carried out.Risk / Endangerment[28] One document in the book of exhibits is a letter from Canada Mortgage andHousing Corporation to the Department of Community Services stating that CMHC hadrecently been advised by Health Canada of a “potential health due to asbestos in loosefill vermiculite insulation.” If Mr. Della Valle wished to have confirmation of thestatements made by David Muggah, such advisories were readily available to him.What constitutes risk or endangerment has been considered in other cases, but rarelycenters around medical evidence. No expert opinion is needed to show that falling off aplatform, or catching one’s arm in a machine, presents a risk to health. Here theconcept of risk is somewhat more distant from the event, both in time (any harm thatmaterializes will occur years from exposure) and in nature (it is impossible to measureactual exposure levels and predict effects on a particular individual).

11[29] Defense has pointed out the paucity of medical evidence in this trial concerningactual harm or risk. That, however, is not a fatal flaw in the Crown’s case. Persons at aworksite are expected to act in timely fashion on reliable information about possibledangers. Such risks may not materialize but nevertheless be real (nobody may actuallyget caught up in an exposed moving machine part) or a perceived risk may later turn outto be no actual risk at all (subsequent medical research debunks earlier beliefs abouthealth effects of a particular substance). For the purposes of s.17 of the OHS Act,however, these are one and the same with a case where a known risk materializes intoactual harm. The duty to act arises when there is a “potential health hazard” identifiedby an individual at a worksite, or known as a result of advice from a reliable source.Where someone in the position of the defendant has knowledge of a possible dangerfrom a credible source, this alone may precipitate a duty to take positive preventivemeasures. Whether this perceived risk is subsequently shown to be an actual, real risk– either in Court or in the broader scientific or public arena – is immaterial. This is, Ithink, a justifiable extension of the line of reasoning found in R. v. Timminco (2001) 153C.C.C. (3d) 521 and cited in R. v. Eagles [2009] N.S.J. No 520 at para 77.[30] In the case of asbestos, one is more in the realm of health than safety, in theusual sense of those words, although the two concepts overlap to a degree. The risk ismore to the long-term well being of a person. Asbestos is said to pose little risk ofimmediate harm; rather, the documents in evidence before me speak to possible longtermhealth effects which manifest long after a person has been exposed.[31] I have no expert medical evidence on the danger to human health posed byvermiculite which contains asbestos. No employee or tenant has been diagnosed withany asbestos-related illness, and hopefully none will be. More pertinent, however, iswhat the defendant was given to believe of the potential risks posed to workers andtenants. This belief came from a credible source: Mr. Muggah at Atlantic Indoor AirAudit Co. This firm had been entrusted with the analysis of the sample. Its advice aboutsteps required to minimize the risk of living and working near this “proven humancarcinogen” should have been heeded, particularly in the absence of any indication tothe contrary. Indeed, the defendant has never contended that he disbelieved ordistrusted what he was told.[32] Defense points out that there is little (if any) evidence about what workersactually did subsequent to October 2005, or how tenants behaved in regard to use ofthe attic spaces. I think, however, that it is safe to infer, from what is known of the stepstaken by the defendant, MacNeil and Routledge, that proper breathing apparatus wasnot employed, nor were the attic hatches sealed. And I do have before me directevidence that an outside contractor did work in places containing the tainted vermiculite

12without any knowledge of this and without taking any precautions respecting asbestos.Prime facie case[33] In Eagles (above) at para. 73 the judge says, referring to R. v. City of SaultSte.Marie [1978] 2 S.C.R. 1299 and R. v. Wholesale Travel Group Inc. [1991] 3 S.C.R.154, “. . . the Court observed that the government can, as a practical matter, do nomore than demonstrate that it had set reasonable standards to be met by persons in theregulated sphere and to prove beyond a reasonable doubt that there has been a breachof those standards by the regulated defendant.” At para. 80 the court indicates that “toestablish a prime facie case the Crown must prove the actus reus beyond a reasonabledoubt.” At para. 83, the court states that a review of the specific provision in issue inthat case “was required in order to ascertain whether the Crown has led some evidenceon all of the essential elements in order to establish its prime facie case.” The use ofthe term “prime facie case” coupled with “some evidence” risks confusing the Crown’sburden in a trial of a regulatory offence with the burden of proof on the Crown in apreliminary inquiry. Timminco (above)and other cases may have applied suchterminology, but I think it is best avoided.Workplace / other persons[34] Every unit containing vermiculite insulation became a “workplace” any time anemployee or contractor of CBIHA attended there to do maintenance or repairs. Tenantsoccupying such premises were then brought within the ambit of s.17 as “other persons”.While the agreed statement is not completely clear as to how many units were involvedin the 515 work orders (see par.14) it states specifically that the contractor, AmblynnElectric was dispatched to 22 sites where vermiculite was present. The statement alsonotes that CBIHA employees worked in attic areas between October 2005 and April2006. It seems safe to infer, on all the evidence, that at least some of these atticscontained vermiculite. As noted, even if an employee did not enter the attic attendanceat the housing unit visited upon it the legal definition of a “workplace” and made thetenants “other persons” deserving of protection under the OHS Act.general duty offences

13[35] A so-called general duty provision like s.17 is included in the OHS Act includedbecause it is not possible to foresee every safety-related circumstance which will arisein a workplace. It is not possible to lay out a blueprint for how every employee shouldact in every contingency. In this sense it is akin to section 100 in the Motor Vehicle Actwhich creates a positive duty to drive “in a careful and prudent manner having regard toall the circumstances” and provides an offence for not doing so. While the MVAcontains many rules about what drivers must do (or not do) in particular situations, it isnot possible to foresee all possible situations which may arise on a highway.[36] Leading cases in the Supreme Court (noted below) were largely concerned withthe mens rea requirement for regulatory offences. They made clear that the Crownneed not prove intent in the usual sense. At the same time the Supreme Courteschewed absolute liability, defining and making available in all such cases the defenceof due diligence. However, it appears that the discussion occurred with specificallydefined standards in mind. The decisions refer to a “particular event”. The discussionof proofs and burdens appears to be framed around some specific thing, defined andenshrined in regulation, which a defendant has done or omitted to do. The surroundingcircumstances, in those cases, for those charges, were foreseen and described. Anexample of this, from our jurisdiction, is Eagles (above) where the charges were “failingto ensure that a guardrail was installed at the perimeter or open side of the work areawhere a person was exposed to the hazard of falling” and “failing to ensure that a workplatform was securely fastened in place so as to prevent movement by cleating orwiring, etc.”[37] R. v. City of Sault Ste.Marie [1978] 2 S.C.R. 1299 involved the discharge ofmaterials into a waterway such as might impair the quality of the water, an offenceunder the Ontario Water Resources Commission Act. The relevant section sought toprohibit a specifically defined act; it told municipalities something they must not do.[38] R. v. Wholesale Travel Group Inc. [1991] 3 S.C.R. 154 concerned a breach of aprohibition against misleading advertising, where the company, for the purpose ofpromoting use of a product, made a representation to the public that is false ormisleading in a material respect. Again the regulation set out a certain thing that aperson or company must not do.[39] R. v. Chapin [1979] 2 S.C.R. 121 dealt with a prohibition against huntingmigratory game birds within a certain distance of a baiting station.[40] R. v. MacMillan Bloedel Ltd. 2002 BCCA 510 invoked a charge under federalfisheries legislation outlawing the deposit of a deleterious substance in water frequentedby fish.

14[41] Various other cases, cited in Eagles and elsewhere, belong to the OHS realm. InR. v. Timminco Ltd. (2001) 153 C.C.C. (3d) 521 an employer was charged with breachof a requirement to fence or guard any machine with an exposed moving part whichmight endanger someone’s safety. The regulation created a positive obligation, but itwas a specifically defined one. In a similar vein is R. v. General Scrap Iron and MetalsLtd. 2002 CarswellAlta 869 where the charge was failing to take all reasonable steps toensure that materials were contained so as to avoid a potential danger fromdislodgement. This was coupled with a more general charge of failing to ensure thehealth and safety of a worker. In R. v. Canada Brick Ltd. [2005] O.J. No. 2978 we see acharge of failing, as an employer, to take every precaution reasonable in thecircumstances for the protection of a worker at a workplace, a general duty offencesimilar to the one facing Mr. Della Valle. In Canada Brick “particulars” were also given,stipulating the specific omission which the Crown relied on, i.e. the failure to implementinterim safety measures to prevent access to the exposed moving parts of a machine(the company being in the process of completing steps to provide a guard on themachine as ordered by an inspector).[42] The foregoing is certainly a very incomplete canvass of case law, but it mayserve to contrast the duties and prohibitions, general and specific, which one finds inregulatory law. It may serve to preface what I see as an implication for proof ofregulatory offences, and for the availability of the due diligence defense, in cases wherethe defendant is charged with breach of a so-called “general duty provision” such as theone found in s.17 of Nova Scotia’s OHS Act.[43] To summarize, it seems that the Supreme Court’s formulations of strict liability,and its legal companion the due diligence defense, occurred in cases where there wasa prohibition against doing a specific thing. Cases have applied the formulation tocases where the charge was failing to carry out a positive duty, but even in these casesit appears there were particular measures - set out in other regulations, or aninspector’s order, or recognized industry standards – which ought to have been taken.Phrases such as “particular event”, “prohibited act” or “proscribed act” are employed.The charge against Mr. Della Valle admits to no such specificity.Due diligence defense[44] The due diligence defence has two branches. These are described in MacMillanBloedel, supra, at para. 47 and 48. The classic formulation, from Sault Ste. Marie, is asfollows : “The defense will be available if the accused reasonably believed in a mistakenset of facts which, if true, would render the act or omission innocent, or if he took all

15reasonable steps to avoid the particular event.” These are alternative aspects of thedefense. I will refer to them as “mistake of fact” and “all reasonable steps”. The secondof these predominates in the case law and in this sense is the more important.[45] In the general duty provision at hand, s.17 of the OHS Act, the actus reus of theoffence is the failure to take every reasonable precaution in the circumstances. TheCrown must prove the actus reus beyond a reasonable doubt. The second branch of adue diligence defense would have the defendant prove, on a balance of probabilities,that he took all reasonable steps to avoid the commission of the offence. Whether eitherburden is met is assessed on all the evidence at trial, led by both parties, regardless ofwhich party bears the legal onus. If “precautions” may be equated with “steps” and“every” to “all”, then “every reasonable precaution” equates to “all reasonable steps”.Being equivalent terms, if the Crown proves the absence of such beyond a reasonabledoubt, it is logically impossible for the Defense to establish the same proposition, on thesame evidence. In other words, if the Crown succeeds in proving the actus reus in ageneral duty provision such as s.17, which a court must first determine, any analysis ofthe “all reasonable steps” defense becomes moot and it should be unnecessary for acourt to consider it.[46] As an aside it may be noted that there are often matters which are known only toa defendant. This may invoke an evidentiary onus on the defendant to supply suchevidence at trial, if such matters are not already known through the Crown’s witnesses.[47] The Crown may, as a result, have a more difficult case “prime facie” case toprove where the offence charged is a general duty provision such as the one here. Itmust prove beyond a reasonable doubt that there were things which the defendantcould and should have done to protect health and safety that he did not do, things whicha reasonably prudent person in his position would have done. But if successful inmaking such a case, the Crown would cut the legs out from under the “all reasonablesteps” defense. As always, the Crown need not prove a mental element.[48] The “mistake of fact” aspect of due diligence may still, at least in a logical sense,be available, although it is not easy to conceive of such a situation. Perhaps if Mr. DellaValle had received subsequent credible, but mistaken, information that the HousingAuthority was actively taking appropriate measures to address the risks posed by theinsulation, such would (hypothetically) constitute a mistake of fact defense, excusing hisown failure to act.Omissions of the defendant

16[49] There is nothing wrong with what Mr. Della Valle did. The question is whetherwhat he did was sufficient compliance with s.17 of the OHS Act. After his meetings withMacNeil and Routledge the defendant assumed a passive role. In assessing what heought to have done, both his job description and the OHS Act provide important context.For ease of reference I have included some of these sections in Appendix A.[50] Defense counsel submits that Mr. Della Valle “was in the wrong place at thewrong time.” If he hadn’t happened to stop by Mr. MacNeil’s office the day the samplewas going off for analysis he wouldn’t ever have been caught up in this scenario.Knowing how Mr. MacNeil, for one, dealt with the Muggah report, it is indeed possiblethat Mr. Della Valle would never have known about the situation had he not droppedinto MacNeil’s office that day. He did not cause the problem and did not ask for it.However, in another sense, Mr. Della Valle was in the right place at the right time. Hehad an opportunity to address this issue on a number of fronts. It appears that he wouldhave chosen to give the letter only to Mr. MacNeil, and done nothing else. In thecircumstances the OHS Act demanded more.[51] One sees in the Muggah report, and it is confirmed by the actual remediationplan which eventually was put into effect, that a proper response involved notificationand advice to tenants, physical modification of the premises, use of specializedequipment, advice to employees and contractors and attendant budgetary measures.This goes well beyond the job description of any one person, maintenance supervisor orotherwise. If such steps had indeed been implemented as a result of the defendant’sconversations with MacNeil and Routledge in October, it would necessarily involvealmost the entire Housing Authority staff in one way or another. Not being aware of anysuch measures subsequent to October 2005 should have raised a concern with thedefendant and prompted follow-up with the two supervisors.[52] Defense points out that after April 2006, when an action plan was developed andimplemented, the defendant was consigned to the role of fielding questions fromconcerned tenants. While this may lend support to Mr. Della Valle’s belief that he wouldplay little part in addressing the risk, i.e. in implementing a remediation plan, it does notexplain why he should not have given wider circulation to the Muggah report in the firstplace and subsequently ensured that appropriate action of some sort was in factinstigated.[53] Steps that Mr. Della Valle should have undertaken include:A. Immediate notification of Ms. McKeough of the contents of Mr. Muggah’s reportof October 25 , 2005. Given the knowledge possessed by Mr. Della Valle, Mr.

17MacNeil, Mr. Routledge and Mr. Leudey it is astounding that Ms. McKeough waskept in the dark about this situation until April 2006.B. Following up directly with Mr. MacNeil and Mr. Routledge to determine whetherand to what extent they had acted on Mr. Muggah’s recommendationsC. Attending and reporting to one of the monthly JOHS meetings about thepresence of asbestos in the unitsD. Instigating a formal hazard assessment for any work or activity which mightinvolve an employee of CBIHA entering the attic or disturbing the insulation frombelow.[54] To this list I might add (lest he had misgivings about Mr. Muggah’s advice) thatthere was additional information publically available from Health Canada and theDepartment of Labour on how to deal with this material when found in residentialpremises.[55] There is overlap amongst these steps, needless to say. For instance, if he haddone A. then B. might have become superfluous.[56] I conclude that the Crown has proven beyond reasonable doubt that Mr. DellaValle failed to take every reasonable precaution in the circumstances to protect thehealth and safety of persons at or near the workplace. The defendant has failed toestablish a due diligence defense. He is found guilty of the offence as charged.Dated at Sydney, N.S. this 14 th day of September, 2011___________________________________Judge A. Peter RossAppendix A

182 The foundation of this Act is the Internal Responsibility System which(a) is based on the principle that(i) employers, contractors, constructors, employees and self-employed personsat a workplace, and (ii) the owner of a workplace, a supplier of goods or providerof an occupational health or safety service to a workplace or an architect orprofessional engineer, all of whom can affect the health and safety of persons atthe workplace, share the responsibility for the health and safety of persons atthe workplace;(b) assumes that the primary responsibility for creating and maintaining a safe andhealthy workplace should be that of each of these parties, to the extent of each party'sauthority and ability to do so;(c) includes a framework for participation, transfer of information and refusal of unsafework, all of which are necessary for the parties to carry out their responsibilitiespursuant to this Act and the regulations17 (1) Every employee, while at work, shall(a) take every reasonable precaution in the circumstances to protect the employee'sown health and safety and that of other persons at or near the workplace;(b) co-operate with the employer and with the employee's fellow employees to protectthe employee's own health and safety and that of other persons at or near theworkplace;(c) take every reasonable precaution in the circumstances to ensure that protectivedevices, equipment or clothing required by the employer, this Act or the regulations areused or worn;(d) consult and co-operate with the joint occupational health and safety committee,where such a committee has been established at the workplace, or the health andsafety representative, where one has been selected at the workplace;(e) co-operate with any person performing a duty or exercising a power conferred bythis Act or the regulations; and

19(f) comply with this Act and the regulations.(2) Where an employee believes that any condition, device, equipment, machine,material or thing or any aspect of the workplace is or may be dangerous to theemployee's health or safety or that of any other person at the workplace, the employeeshall(a) immediately report it to a supervisor;(b) where the matter is not remedied to the employee's satisfaction, report it to thecommittee or the representative, if any; and(c) where the matter is not remedied to the employee's satisfaction after the employeereports in accordance with clauses (a) and (b), report it to the Division. 1996, c. 7, s. 17.23 (1) A specific duty or requirement imposed by this Act or the regulations does notlimit the generality of any other duty or requirement imposed by this Act or theregulations.(2) Where a provision of this Act or the regulations imposes a duty or requirement onmore than one person, the duty or requirement is meant to be imposed primarily on theperson with the greatest degree of control over the matters that are the subject of theduty or requirement.(3) Notwithstanding subsection (2), but subject to subsection (5), where the person withthe greatest degree of control fails to comply with a duty or requirement referred to insubsection (2), the other person or persons on whom the duty or requirement lies shall,where possible, comply with the provision.31 (1) It is the function of the committee to involve employers and employees togetherin occupational health and safety in the workplace and, without restricting the generalityof the foregoing, includes(a) the co-operative identification of hazards to health and safety and effective systemsto respond to the hazards;

20(b) the co-operative auditing of compliance with health and safety requirements in theworkplace;(c) receipt, investigation and prompt disposition of matters and complaints with respectto workplace health and safety;(d) participation in inspections, inquiries and investigations concerning the occupationalhealth and safety of the employees and, in particular, participation in an inspectionreferred to in Section 50;(e) advising on individual protective devices, equipment and clothing that, complyingwith this Act and the regulations, are best adapted to the needs of the employees;(f) advising the employer regarding a policy or program required pursuant to this Act orthe regulations and making recommendations to the employer, the employees and anyperson for the improvement of the health and safety of persons at the workplace;

COURT OF APPEAL OFNEW BRUNSWICKCOMMUNICATIONS, ENERGY ANDPAPERWORKERS UNION OF CANADA,LOCAL 30APPELLANT- and - - et -IRVING PULP & PAPER, LIMITEDRESPONDENT133-10-CASYNDICAT CANADIEN DESCOMMUNICATIONS, DE L’ÉNERGIE ET DUPAPIER, SECTION LOCALE 30APPELANTLES PÂTES & PAPIER IRVING, LIMITÉEINTIMÉE2011 NBCA 58 (CanLII)Communications Energy and Paperworkers Unionof Canada, Local 30 v. Irving Pulp & Paper,Limited, 2011 NBCA 58CORAM:The Honourable Chief Justice DrapeauThe Honourable Justice TurnbullThe Honourable Justice RobertsonAppeal from a decision of the Court of Queen'sBench:September 17, 2010Syndicat canadien des communications, del’énergie et du papier, section locale 30 c. LesPâtes et Papier Irving, Limitée, 2011 NBCA 58CORAM :L’honorable juge en chef DrapeauL’honorable juge TurnbullL’honorable juge RobertsonAppel d’une décision de la Cour du Banc de laReine :Le 17 septembre 2010History of Case: Historique de la cause :Decision under appeal:UnreportedPreliminary or incidental proceedings:N/AAppeal heard:February 17 and May 17, 2011Judgment rendered:July 7, 2011Reasons for judgment by:The Honourable Justice RobertsonConcurred in by:The Honourable Chief Justice DrapeauDécision frappée d’appel :InéditeProcédures préliminaires ou accessoires :s.o.Appel entendu :Le 17 février et 17 mai 2011Jugement rendu :Le 7 juillet 2011Motifs de jugement :L’honorable juge RobertsonSouscrivent aux motifs :L’honorable juge en chef Drapeau

- 2 -The Honourable Justice TurnbullCounsel at hearing:For the appellant:David G. GauthierFor the respondent:William B. Goss, Q.C. andMelissa M. Everett WithersTHE COURTThe appeal is dismissed with costs of $5,000.L’honorable juge TurnbullAvocats à l’audience :Pour l’appelant :David G. GauthierPour l’intimée :William B. Goss, c.r., etMelissa M. Everett WithersLA COURRejette l’appel avec dépens de 5 000 $.2011 NBCA 58 (CanLII)

The judgment of the Court was delivered byROBERTSON, J.A.I. Introduction[1] The respondent, Irving Pulp & Paper, Limited, operates a kraft paper millalong the banks of the St. John River, at the point where the River empties into the Bay ofFundy. The mill is also contiguous to the “world famous” Reversing Falls and straddlesthe line which separates the West Side of the City of Saint John from its North End. In2006, Irving unilaterally adopted a workplace policy which included mandatory andrandom alcohol testing, by breathalyser, for employees holding safety sensitive positions.Randomness is achieved by having the names of the 334 prospective testees selected byan off-site computer. In any 12-month period, the computer selects 10% of the names onthe list. It is common ground the employer possesses the right to adopt policies dealingwith workplace safety provided they do not conflict with the collective agreement.Correlatively, the union has a right to challenge those policies on the ground they fail tomeet the test of reasonableness imposed under what labour lawyers have labelled theKVP rules.2011 NBCA 58 (CanLII)[2] In the present case, an Irving employee and member of the appellantunion, who occupied a safety sensitive position, was randomly tested. The test revealed ablood alcohol level of zero. Nevertheless, a policy grievance was filed challenging the“without cause” aspect of the policy. Applying a balancing of interests approach, themajority of the arbitration board determined that Irving failed to establish a need for thepolicy in terms of demonstrating the mill operations posed a sufficient risk of harm thatoutweighs an employee’s right to privacy. Specifically, the majority concluded Irving hadnot adduced sufficient evidence of prior incidents of alcohol related impaired workperformance to justify the policy’s adoption. At the same time, the majority accepted thata “lighter burden of justification” was imposed on employers engaged in the operation of“ultra-hazardous” or “ultra-dangerous” endeavours. On the facts, however, the majority

- 2 -concluded that, while the mill operation represented a “dangerous work environment”,the mill operation did not fall within the ultra-dangerous category such as a nuclear plant,an airline, a railroad, a chemical plant or a like industry. This explains why the majoritywent on to examine the evidence relating to alcohol use in the workplace. Based on theevidence adduced the majority concluded there was insufficient evidence of a “significantdegree of incremental safety risk that outweighed the employees’ privacy rights”. Thedissenting panel member characterized the workplace as “highly dangerous” and,therefore, evidence of an alcohol problem in the workplace was not a condition precedentto establishing the reasonableness of the policy. Alternatively, the dissenting memberheld Irving had adduced sufficient evidence of such a problem.2011 NBCA 58 (CanLII)[3] The application for judicial review was allowed and the majority decisionremoved into the Court of Queen’s Bench and quashed. The review decision is nowreported as 2010 NBQB 294, 367 N.B.R. (2d) 234. The application judge characterizedthe disagreement between the majority and dissenting opinions in terms of the distinctionbetween a workplace that is dangerous and one that is ultra-dangerous (e.g. nuclearreactor facility). The application judge interpreted the majority decision as holding that, ifthe workplace falls within the ultra-dangerous category, no evidence of alcohol relatedincidents in the workplace is required. However, if the workplace falls within thedangerous category, as does the Irving mill, the employer must still adduce sufficientevidence of a pre-existing alcohol problem. The application judge held it unreasonable torequire evidence demonstrating such a history once the majority concluded the kraft millrepresented a dangerous workplace where the “potential for catastrophe exists”. Applyingthe review standard of reasonableness, as outlined in Dunsmuir v. New Brunswick, 2008SCC 9, [2008] 1 S.C.R. 190, the application judge ruled the board’s decision wasunreasonable because it did not fall within the “range of possible, acceptable outcomeswhich are defensible in respect of the facts and law” (para. 47).[4] While the parties agree the application judge did not err in adopting thereview standard of reasonableness, I have not been persuaded this is so. Admittedly, onewould think that an arbitrator’s decision regarding the reasonableness of an employer’s

- 3 -policy relating to safety in the workplace is a question of fact, or mixed fact and law, forwhich judicial deference is owed in accordance with the tenets of the deference doctrineset down in Dunsmuir. However, this understanding requires reconsideration once it isrecognized the reasonableness of the policy involves a fundamental question: In whatcircumstances must an employer adduce evidence of a substance abuse problem in theworkplace in order to justify the policy’s adoption? In the present case, this question maybe restated as follows: Must an employer’s decision to adopt a policy of mandatoryrandom alcohol testing for employees holding safety sensitive positions be supported bysufficient evidence of alcohol related incidents in the workplace? In point of fact, thearbitration board went further and framed the question in terms of requiring evidencesupporting a “significant problem with alcohol-related impaired performance at theplant”.2011 NBCA 58 (CanLII)[5] In my view, the answer to the question is subject to the review standard ofcorrectness for two reasons. First, the question posed raises a pure question of law, onethat seeks to strike a reasonable balance between an employer’s legitimate interest andobligation to provide a safe workplace and the privacy and dignity interests of employeesor, in some instances, their freedom from discrimination. As such, the case raises aquestion of general importance in the law over which the arbitration board cannot assert agreater relative expertise than the courts. Indeed, some might argue that at its core thisappeal is of importance to the public at large having regard to the location of the kraftmill. Second, the arbitral jurisprudence is not always reconcilable or easily so. Often, thesame case is cited for opposing propositions. Moreover, the distinction which thearbitration board makes between dangerous and ultra dangerous workplaces is simply notpart of the arbitral framework surrounding the validity of alcohol and drug testingpolicies. The same holds true in regard to the requirement that the employer adduceevidence of a significant alcohol or drug problem in the workplace. Hence, it falls on thisCourt to provide certainty so far as the law of New Brunswick is concerned. At the sametime, I do not want to leave the impression that the arbitral jurisprudence is irrelevant tothe analysis at hand. Let me explain.

- 4 -[6] The union’s position is encapsulated in two related propositions: (1)arbitrators in Canada have overwhelmingly rejected mandatory, random andunannounced drug and alcohol testing; and (2) sufficient evidence of a pre-existing drugor alcohol problem in the workplace is a pre-condition to the enforceability of suchpolicies, unless the workplace qualifies as ultra-dangerous. Accordingly, the unionmaintains the application judge erred in setting aside the arbitration board’s decision.[7] A review of the relevant arbitral jurisprudence, leads me to conclude thatarbitrators and arbitration boards have not overwhelmingly rejected mandatory randomunannounced alcohol testing in the workplace. Admittedly, acceptance of drug testingpolicies in the workplace has met with more resistance than those aimed at alcohol testingby breathalyser. I also conclude the arbitration board erred in law in holding that anemployer must adduce sufficient evidence of an alcohol problem in the workplace, unlessthe workplace is declared to fall within the ultra-dangerous category. Having due regardto the arbitral jurisprudence, I follow the more recent cases which hold that, once aworkplace is declared “inherently dangerous”, there is no need for the employer toestablish the existence of an alcohol problem in the workplace. I acknowledge that theearlier decisions (1990s) reflect a reluctance to embrace alcohol and drug testing in theworkplace. This is particularly true in regard to drug testing, but less so with respect torandom alcohol testing because of the minimally intrusive nature of the testing procedureand because testing is restricted to employees holding safety sensitive positions.2011 NBCA 58 (CanLII)[8] In my view, the law would rest on a sounder footing if it were to recognizethat mandatory random alcohol testing in the workplace is justified once the employerestablishes the workplace operations to be inherently dangerous, thereby eliminating theneed to adduce evidence of an alcohol problem in the workplace. Having justified theadoption of the alcohol testing policy, its reasonableness will be confirmed, provided thetesting is done by breathalyser and applies only to those employees who hold safetysensitive positions. This is the point in time where the employer’s and employees’ rightsare reasonably balanced.

- 5 -II.Background – The Impugned Decisions[9] On February 1, 2006, Irving adopted a policy which mandated drug andalcohol testing for employees who hold “safety sensitive positions” as defined in thepolicy. In part, that definition reads: “Safety Sensitive Position is a position which thecompany determines has a role in the operation where impaired performance could resultin a significant incident affecting the health and safety of employees, customers,customers’ employees, the public, property or the environment.” Part V (iii)(c) of thepolicy embraces mandatory, unannounced random alcohol testing (without cause).Randomness is achieved by having the names of prospective testees (334 employees)selected by an off-site computer. In any 12-month period, the computer selects 10% ofthe names on the list of employees holding safety sensitive positions. After selection,names are not removed from the list - lest the policy lose its deterrent effect for thereminder of the year. Hence, it is possible the same name could be selected more thanonce during the 12-month period. Testing is done by a breathalyser device. A positiveresult (a blood alcohol level greater than .04%) constitutes a violation of the policy andresults in the imposition of a disciplinary measure, up to the point of employee dismissal.The proper discipline is a matter to be decided on a case by case basis. On March 13,2006, an employee holding a safety sensitive position, Percy Day, was approached andasked to submit to a breathalyser test. Mr. Day, who does not imbibe in alcoholicbeverages for religious reasons, submitted to the test because of the disciplinary measuresprescribed under the policy. As would be expected, the test read negative (0.0%). Apolicy grievance was filed and heard by an arbitration board appointed under theIndustrial Relations Act, R.S.N.B. 1973, c. I-4.2011 NBCA 58 (CanLII)[10] From the outset, it has been common ground that an employer has theunilateral right to adopt workplace rules provided they fall within the analyticalframework set out in the seminal decision of KVP Co. v. Lumber & Sawmill Workers’Union, Local 2537 (Veronneau Grievance), [1965] O.L.A.A. No. 2 (QL). That decisionholds that the enforceability of such workplace rules depends on compliance with thefollowing criteria: (1) the rule must not be inconsistent with the collective agreement; (2)

- 6 -it must be reasonable; (3) it must be clear and unequivocal; (4) it must be brought to theattention of the employee affected before the company can act on it; (5) the employeeconcerned must have been notified that breach of the rule could result in his or herdischarge if the rule were used as a foundation for discharge; and (6) the rule should havebeen consistently enforced by the company from the time it was introduced. In labour lawcircles, the six rules are universally referred to as the KVP rules. In the present case, thearbitration board had only to focus on the second rule: whether the component of thepolicy dealing with random alcohol testing was reasonable.[11] The majority of the arbitration board (hereafter the arbitration board orboard) addressed the matter of reasonableness, first against the backdrop of what was saidin Dunsmuir, second, by reference to what the learned authors Brown and Beatty havestated in their leading text Canadian Labour Arbitration, 4 th ed. looseleaf (Aurora, Ont.:Thomson Reuters Canada Limited, 2011) and, third, by reference to four decisions. Twoare court decisions: Imperial Oil Ltd. v. Communications Energy Paperworkers Union ofCanada, Local 900, [2006] O.L.A.A. No. 721 (QL), aff’d at [2008] O.J. No. 489 (QL)and at 2009 ONCA 420, [2009] O.J. No. 2037 (QL) (hereafter Nanticoke), and Entrop v.Imperial Oil Ltd., [2000] O.J. No. 2689 (C.A.) (QL) (hereafter Entrop). The remainingtwo are arbitral decisions: Re: Communication Energy and Paperworkers Union, Local770 and Imperial Oil Ltd. (unreported, May 27, 2000, Christian, Chair) and GreaterToronto Airports Authority v. Public Service Alliance of Canada, Local 0004, [2007]C.L.A.D. No. 243 (QL).2011 NBCA 58 (CanLII)[12] Based on the above jurisprudence, the arbitration board concluded that forthe employer to establish the reasonableness of its alcohol testing policy, the employerhad to “demonstrate on the evidence that the risk it appreciates and addresses by itsPolicy exists to a degree sufficient to justify the means chosen to address it”. Themajority stated that the term risk could be used to describe at least three differentsituations: (1) the inherent risk associated with the performance of a particular job orclass of jobs; (2) the risk attached to a particular enterprise, considered on its own; and(3) the risk associated with the enterprise considered as an exemplar of a highly safety

- 7 -sensitive position. The board also acknowledged jurisprudence supporting theunderstanding that an employer must lead evidence of an existing alcohol related problemin the workplace in order to succeed. However, the board opined that that understandingwas “somewhat overbroad”. It went on to hold:Evidence of risk may be available from the nature of theindustry itself. The cases recognize a lighter burden ofjustification on an employer engaged in the operation of anultra-hazardous endeavour.[13] In support of the above conclusion the arbitration board cited the seminaldecision of Canadian National Railway Co. v. National Automobile, Aerospace,Transportation and General Workers Union of Canada (CAW-Canada), [2000] C.L.A.D.No. 465 (QL) (M.G. Picher, Chair) (hereafter CN Rail); Weyerhaeuser Co. v. IndustrialWood and Allied Workers of Canada, [2004] B.C.C.A.A.A. No. 71 (QL) (hereafter citedas Weyerhaeuser I); and Dupont Canada Inc. v. Communications, Energy PaperworkersUnion of Canada, Local 28-0 (Drug and Alcohol Policy Grievance), [2002] C.L.A.D.No. 146 (QL) (hereafter Dupont Canada), (P.C. Picher, Chair). In brief, the board ruledthat to establish the validity and enforceability of the impugned testing policy, Irving hadto establish the need for the policy based on the presence of a sufficient risk of harm. Asto the evidential burden imposed on Irving, the majority recognized that the more risksensitive the industry was the easier it would be for the employer to justify its alcoholtesting policy by reference to documented instances of alcohol related incidents in theworkplace. When it came to ultra-dangerous or ultra-hazardous industries, such asairlines or nuclear reactors, it was acknowledged that evidence of a pre-existing alcoholproblem in the workplace would not be required.2011 NBCA 58 (CanLII)[14] After an extensive review of the employer’s evidence, the arbitrationboard concluded that the “operation of the plant under normal circumstances carries withit the risk that certain malfunctions could have repercussions going well beyond thesafety of the actor who caused the incident”. This lead the board to conclude that the“mill in normal operation is a dangerous work environment”. In reaching this conclusion,

- 8 -the majority relied in part on the evidence of one of Irving’s retired employees, Mr.Moorehouse, who described the mill in the following fashion: “It is heavy industry. It is akraft mill. It’s probably as close as you can get to a chemical plant. There are a lot ofchemicals”. However, the arbitration board was not prepared to accept that Irving’s kraftmill could be classified as an ultra-hazardous enterprise. The board concluded: “There isnot a sufficient case made out to put the operation of this kraft mill in the same categoryof risk as a nuclear plant, an airline, a railway or a chemical plant, or like industries”. Inlight of this evidence, the board went on to examine the evidence of a pre-existingalcohol problem in the workplace or, as the majority expressed it, evidence of alcoholrelatedincremental risk. On behalf of Irving, Mr. Moorehouse, identified eight specificalcohol related incidents of which five involved an employee showing up for work underthe influence of alcohol. The five incidents spanned 15 years: April 29, 1991, to January11, 2006. Following the policy’s adoption, no employee tested positive, nor were thereany positive tests with respect to tests administered for reasonable cause.2011 NBCA 58 (CanLII)[15] The arbitration board went on to conclude that the evidence “cannot besaid to be indicative of a significant problem with alcohol-related impaired performanceat the plant” (emphasis added). The board also went on to hold there was indirectevidence from which one could infer that the management of Irving “does not regard theincremental safety risk posed by alcohol in this plant as being high among the incumbentsin the safety sensitive positions”. The inference was drawn from the fact that the testingpolicy was limited to 10% of the 334 names of the list of employees who held safetysensitive positions. The majority reasoned that, had Irving been truly concerned with thematter of risk, it would have selected a higher percentage as did other employers asreflected in the jurisprudence.[16] The arbitration board went on to consider the fact that from the date of thepolicy’s implementation, February 1, 2006, to the date of the hearing, December 16,2008, a total of 33 months had elapsed. Yet, there had been no positive random alcoholtests at the mill and no positive tests for reasonable cause. During this periodapproximately 114 random breath tests had been administered. Of these only 17 were

- 9 -administered to members of the appellant union. Mr. Moorehouse attributed the lack ofpositive results to the deterrent effect of the policy. The board concluded that noinference favourable to Irving was justified: “Perhaps so, but on his own record evidencethe opposite could just as easily be the case, but there is nothing but a correlation. Nocasual inference favourable to the employer is available from such evidence.”[17] With respect to the matter of evidence of “alcohol related incrementalrisk”, the arbitration board ended its analysis with the following reasoning:This evidence gives a push in the direction of theconclusion that the employer belongs at the lower end ofthe scale in terms of the existence of incremental safety riskposed by alcohol use. My conclusion on the evidence,overall, is it shows a very low incremental risk of safetyconcerns based on alcohol-related impaired performance ofjob tasks at the site.2011 NBCA 58 (CanLII)[18] Next the arbitration board turned to the question of the means chosen todetect the presence of alcohol. The board admitted that a distinction had to be drawnbetween drug and alcohol testing and the latter had been treated differently and morekindly once it was recognized that the testing was by way of breathalyser. The SupremeCourt of Canada jurisprudence refers to the use of the breathalyser as minimallyintrusive: e.g., R. v. Stillman, [1997] 1 S.C.R. 607, [1997] S.C.J. No. 34 (QL).[19] The final part of the arbitration board’s analysis, with respect to thevalidity of the random alcohol testing policy, is concerned with balancing the interests ofemployer and employee. As the board stated: “What needs to be measured are thebenefits that will accrue to the employer through the application of the random alcoholtesting policy against the harm that will be done to the employee’s right to privacy.” Inthe words of the majority: “If the random alcohol testing policy is to be justified it mustbe in proportion to the employee’s right to privacy.” The board went on to conclude thatit could see little or no advantage accruing to the employer through the adoption of apolicy of random alcohol testing as Irving had failed to establish “any significant degreeof incremental safety risk attributable to employee alcohol use” in the mill in the past.

- 10 -Taken with the low testing rate of 10%, the board concluded that the policy wouldseldom if ever identify any employee with a blood alcohol concentration over .04% andtherefore there was no concrete advantage to the employer to be gained through therandom alcohol testing policy. On the other hand, the board found that because thealcohol testing was random in nature (without articulable cause) the employee’s right toprivacy was heightened. The board also found the intrusion not to be trifling and went onto conclude that the balance favoured the union/employee..[20] On the application for judicial review, the arbitration board’s decision wasset aside and the grievance dismissed. The application judge interpreted the boarddecision as requiring a history of accidents in a dangerous workplace in order to justifythe policy of random alcohol testing and that such a requirement was unreasonablebecause it effectively meant that the employer would have to wait until a catastropheoccurred before being able to take pro-active measures to prevent a recurrence. Thedistinction the board drew between a dangerous workplace and ultra-dangerous one wasfound to be unreasonable by the application judge. He opined that once the board foundthe mill to be a dangerous workplace, the only question left for the board’s considerationwas whether the employer’s policy was a proportionate response to the potential danger.Having regard to the minimally intrusive nature of the breathalyser and the fact the policyapplies only to employees who hold safety sensitive positions, the application judgeconcluded the grievance should have been dismissed.2011 NBCA 58 (CanLII)III.The Standard of Review[21] This Court is under no obligation to agree with the application judge’sdecision to accept the parties’ mutual submission that reasonableness is the properstandard of review. Moreover, having raised the issue with counsel at the appeal hearing,we are under no obligation to decide whether the application judge properly applied thatstandard to the arbitration board’s decision. As stated at the outset, this appeal involves aquestion of law. Are we to presume that it is the prerogative of individual labourarbitrators throughout the country to determine the analytical framework upon which to

- 11 -evaluate whether drug and alcohol testing policies are reasonable, even though some ofthe lead cases are the product of the judicial pen? Are we to assume that labour arbitratorsdealing with alcohol and drug testing policies can lay claim to a relative expertise notpossessed by the judiciary? I answer both questions in the negative and raise a third: Howdoes a reviewing court deal with the reality that the arbitral jurisprudence reveals whathave been described as competing analytical frameworks or tests? In my view, therecomes a point where the goal of certainty in the law must overshadow the precepts of thedeference doctrine. This is one of those cases.[22] As a general proposition, this Court has accorded deference to decisions ofthe Labour and Employment Board, individual labour arbitrators and labour arbitrationpanels involving questions of law arising from the interpretation of a collectiveagreement or the enabling legislation. Nothing that was decided in Dunsmuir, save for thenotion of jurisdictional questions, detracts from the earlier jurisprudence of this Court.Thus, I am left with the task of justifying the decision to apply the correctness standard ofreview to the arbitration board’s decision. My reasoning is not complicated. The centralquestions raised on this appeal require the decision maker to strike a proper balancebetween the right of an employer to adopt policies that promote safety in the workplace,and an employee’s right to privacy or to freedom from discrimination in those caseswhere the challenge is brought under human rights legislation. When viewed throughthese prescriptive lenses, it is only natural to ask whether arbitrators possess a relativeexpertise that supports a finding that the Legislature intended that deference would beaccorded to arbitration decisions involving drug and alcohol testing.2011 NBCA 58 (CanLII)[23] Certainly, the Supreme Court has yet to accord deference to anadministrative tribunal with respect to questions of law umbilically tied to human rightsissues: see Jones and de Villars, Principles of Administrative Law, 5 th ed. (Toronto:Carswell, 2009) at 553. Similarly, the Supreme Court has held various privacycommissioners do not have greater expertise about the meaning of certain concepts foundin their respective statutes which limit or define their authority: see Jones and De Villarsat 553, note 223. Accepting that no analogy is perfect, I see no reason why this Court

- 12 -should depart from those precedents. Indeed, if one looks to the arbitral jurisprudence,one is struck by the reliance on judicial opinions touching on the matter. The overlapreflects the general importance of the issues in the law and of the need to promoteconsistency and, hence, certainty, in the jurisprudence. Finally, I am struck by the factthat there comes a point where administrative decision makers are unable to reach aconsensus on a particular point of law, but the parties seek a solution which promotescertainty in the law, freed from the tenets of the deference doctrine. In the present case, itis evident that the arbitral jurisprudence is not consistent when it comes to providing ananswer to the central question raised on this appeal. Hence, it falls on this Court toprovide a definitive answer so far as New Brunswick is concerned. This is why I amprepared to apply the review standard of correctness. But this is not to suggest that I amabout to ignore the arbitral jurisprudence which has evolved over the last two decades.Let me explain.2011 NBCA 58 (CanLII)[24] In holding that correctness is the proper standard of review with respect tothe legal question posed, I do not want to leave the impression the arbitral jurisprudencedealing with random alcohol testing suddenly becomes irrelevant and the review courtshould embark upon a fresh analysis, immune from the principles and analyticalframeworks being applied by adjudicative tribunals. To the contrary, the arbitraljurisprudence of the last decade has gone a long way to defining what reasonablenessmeans when assessing the enforceability of alcohol and drug testing policies in theworkplace. In particular, one has to recognize the significant contributions of arbitratorssuch as Michel G. Picher. He was the arbitrator and author in the seminal CN Raildecision referred to earlier and which has been consistently cited and applied byarbitrators throughout the country. Arbitrator Picher was also the chair of the arbitrationboard and author of two decisions that wound their way through the Ontario Courts: theNanticoke and Entrop decisions, also cited above.[25] As it should happen, Arbitrator Picher has also authored a decision dealingwith a grievance filed by the union with respect to two saw-mills in New Brunswick,owned by another Irving company. The grievance involved the company’s random

- 13 -alcohol testing policy: J.D. Irving Ltd. v. Communications, Energy and Paperworkers’Union, Local 104 and 1309 (Drug and Alcohol Policy Grievance), [2002] N.B.L.A.A.No. 7 (QL). More recently, the decision of Arbitrator Margo R. Newman in NavistarCanada Inc. v. National Automobile, Aerospace, Transportation and General WorkersUnion of Canada (CAW-Canada) Local 504 (Substance Abuse Grievance), [2010]O.L.A.A. No. 227 (QL), offers a penetrating and exhaustive analysis of the jurisprudencerelevant to the issues at hand. I single out such decisions, not because they are oweddeference as of right, but because deference is earned through the production of reasonswhich move beyond the Dunsmuir requirement of rationality and intelligibility into therealm of simple persuasiveness.2011 NBCA 58 (CanLII)[26] While I have adopted the correctness standard in regard to the question oflaw posed above, there is one aspect of the arbitration board’s decision for which thereview standard of reasonableness does apply. The board held that Irving had failed toestablish a “sufficient case” that its kraft mill could be placed in the same ultra-dangerouscategory of risk such as a “nuclear plant, an airline, a railroad or a chemical plant”. In myview, the finding that a kraft mill does not fall within the same dangerous category as arailroad or chemical plant is simply “unreasonable”.[27] Finally, if I am mistaken and deference is owed to the arbitration board’sruling in regard to the need for Irving to adduce evidence of an existing alcohol or drugproblem in the workplace in order to justify its decision to adopt the random testingpolicy, I take refuge in the application judge’s analysis and application of the“reasonableness” standard of review and his reasons for setting aside the board’sdecision. In particular, I would draw attention to the judge’s analysis pertaining toinferences which the board drew from the evidence and which are not discussed in thesereasons because of the application of the correctness standard.

- 14 -IV.Issues – AnalysisA. Introduction[28] The scope of the legal issues that arise in the context of an employer’sunilateral adoption of a drug and alcohol policy is indeed broad. Not only does one haveto draw a distinction between the testing for drugs and for alcohol, one has toacknowledge that testing can be required for reasonable cause (prior to an incident oraccident) or post-incident cause (following a work related accident). There are questionsas to who is to be tested and questions whether testing can be made a pre-condition toaccess to an employer’s work site. There are cases where the employer requires testing ofa subcontractor’s employees which leads to the subcontractor adopting its own testingpolicy to ensure compliance with that of the main contractor. There are also situationswhere the policy can be challenged on grounds of discrimination should the relevantlegislation embrace drug and alcohol addiction as a disability, which in turn raises thequestion as to the scope of the employer’s duty to accommodate those with disabilities.And there are many other issues.2011 NBCA 58 (CanLII)[29] I have purposely narrowed the scope of these reasons to the considerationof the only aspect of Irving’s drug and alcohol testing policy that was challenged beforethe arbitration board: the validity of the requirement for employees in safety sensitivepositions to undergo random alcohol testing. As a matter of logic, one would think anylegal reasoning applicable to random alcohol testing would apply equally to random drugtesting. However, I acknowledge that the jurisprudence dealing with drug testing hasproven to be more problematic than cases dealing with random alcohol testing. While it istrue that testing for both substances has a deterrent effect, drug testing cannot measurepresent impairment. A positive test simply means that the employee has taken drugs inthe past. By contrast, alcohol testing is able to detect on the job impairment and minimizethe risk of impaired performance. As well, alcohol testing by breathalyser has alwaysbeen regarded as minimally intrusive when it comes to an employee’s right to privacyand freedom from unreasonable searches. Given these differences, my emphasis is on

- 15 -decisions dealing with random alcohol testing and any obiter comments dealing withalcohol testing made in the context of the validity of a drug testing policy or an aspectthereof.B. The Arguments and the Jurisprudence[30] As stated at the outset, the union’s position is encapsulated in two relatedpropositions: (1) arbitrators in Canada have overwhelmingly rejected mandatory, randomand unannounced drug and alcohol testing; and (2) sufficient evidence of a pre-existingdrug or alcohol problem in the workplace is a pre-condition to the enforceability of suchpolicies, unless the workplace qualifies as ultra-dangerous. Accordingly, the unionmaintains the application judge erred in setting aside the arbitration board’s decision onthe review standard of reasonableness.2011 NBCA 58 (CanLII)[31] The union’s assertion that arbitrators have overwhelmingly rejectedmandatory and random drug and alcohol testing is based, in part, on the Nanticokedecision where Arbitrator M.G. Picher concluded that: “As set out above, a key feature ofthe jurisprudence in the area of alcohol or drug testing in Canada is that arbitrators haveoverwhelmingly rejected mandatory, random and unannounced drug testing for allemployees in a safety sensitive workplace as being an implied right of management underthe terms of a collective agreement” (para.101) (emphasis added). The unionacknowledges that the quote refers only to random drug testing but goes on to insist thatthe quote applies equally to random alcohol testing. With great respect, I disagree andhere is why.[32] In Nanticoke, the arbitration board (M.G. Picher, Chair) was dealing witha grievance with respect to the propriety of the employer’s (Imperial Oil) policy ofrandom drug testing by the use of oral swabs for the detection of cannabis use, includingactual impairment, at its oil refinery. The policy applied to all employees and not justthose who held safety sensitive positions. Ultimately, the majority of the board upheld thegrievance and struck down this aspect of the policy. In so holding, the majority

- 16 -distinguished any analogy between testing by breathalyser and drug testing administeredby buccal swabs. In a preliminary award, the board had held that the validity of that partof the policy dealing with random alcohol testing was not arbitrable because of the failureto initiate a challenge over the 13 years it was in force (acquiescence). Applying the preDunsmuir review standard of patent unreasonableness, the application for judicial reviewwas dismissed in the Ontario Divisional Court and, in turn, that decision was upheld bythe Ontario Court of Appeal.[33] In brief, the Nanticoke decision does not support the union’s broadproposition that arbitrators in Canada have overwhelmingly rejected the policy of randomalcohol testing by breathalyser. My conclusion is supported by another Ontario decisionin which an employer’s alcohol and drug testing policy was challenged under the OntarioHuman Rights Code, R.S.O. 1990, c. H.19. The Entrop decision involved, inter alia, anemployer’s policy of random alcohol testing for employees, in safety sensitive positions,at two of its oil refineries. The policy was found to be prima facie discriminatory on thebasis of actual or perceived handicap of alcohol abuse. Applying the standard ofcorrectness to the board of inquiry’s decision, the Ontario Court of Appeal rejected theboard’s finding and held that the testing policy could qualify as a bona fide occupationalrequirement provided the sanction for an employee testing positive was tailored to theemployee’s circumstances. As to whether the policy of random alcohol testing provisionswere reasonably necessary, the Court held:2011 NBCA 58 (CanLII)Imperial Oil can legitimately take steps to deter and detectalcohol impairment among its employees in safety-sensitivejobs. Alcohol testing accomplishes this goal. Foremployees in safety-sensitive jobs, where supervision islimited or non-existent, alcohol testing is a reasonablerequirement. [para. 110][34] Neither Nanticoke nor Entrop provide us with an analytical framework ortest for determining the circumstances in which an employer is required to adduceevidence of an existing alcohol problem in the workplace with respect to those employeesholding safety sensitive positions. All that can be said with confidence is that random

- 17 -alcohol testing of employees holding safety sensitive positions within the oil refinementbusiness has been upheld so long as the testing policy imposes sanctions whichaccommodate the individual circumstances of the employee who tests positive.[35] The only New Brunswick arbitral decision dealing with random alcoholtesting in the workplace involves another Irving company with sawmills in Chipman andSussex: J.D. Irving Ltd. v. Communications, Energy and Paperworkers’ Union, Local104 and 1309. However, in that case there was no direct challenge to the justification forthe decision to implement the policy. Rather the challenge was to various aspects of thepolicy. All of the issues, but one, are irrelevant to the case at hand. The parties disagreedas to the definition of what constituted a safety sensitive position for purposes of thepolicy. The union contended that not only must the employer establish that the job, ifperformed while impaired, had the potential to cause a “catastrophic incident” affectingthe health and safety of the employees and other persons, or the environment, but alsothat the job must be one with little or no direct supervision.2011 NBCA 58 (CanLII)[36] Writing for a unanimous arbitration board, Chair M.G. Picher held thepossibility of regular and ongoing supervision of employees should not be viewed asdetermining whether their work is safety sensitive. He went on to conclude that forpurposes of drug and alcohol testing the identification of safety sensitive positions ismore usefully achieved by asking what consequences are risked if the person performinga particular kind of work does so impaired by drugs or alcohol. Hence, those employeesholding clerical positions would not qualify. Those performing tasks while impaired bydrugs or alcohol in circumstances where they pose a safety risk to themselves or others orto property or equipment fall within the classification of safety sensitive positions.[37] I can only speculate as to why the union in J.D. Irving Ltd., which is thesame union on this appeal, did not challenge the random alcohol testing policy on thesame grounds as are being argued today. Perhaps there was evidence of a pre-existingalcohol problem at the two sawmills. Alternatively, the union may have considered thearbitral jurisprudence which has upheld the random alcohol testing in the logging

- 18 -industry. The lead case appears to be Weyerhaeuser I. The precedential significance ofthis case cannot be ignored. See also Weyerhaeuser Co. v. Communications, Energy andPaperworkers Union, Local 447 (Roberto Grievance), [2006] A.G.A.A. No. 48 (QL)(Weyerhaeuser II), dealing with a policy which included post-incident drug testing andwhich policy had been adopted as a result of a large number of workplace accidents.[38] Borrowing liberally from the head note, the facts and findings inWeyerhaeuser I are as follows. The employer, a logging company, adopted acompany-wide policy dealing with issues related to substance impairment in theworkplace. The union filed a policy grievance, alleging that the policy violated thecollective agreement as it was discriminatory and unreasonable. At the hearing, theemployer sought a ruling on the union’s position that the employer was required todemonstrate that a substance abuse problem existed in the workplace in order to justifythe introduction of the policy. The employer took the position that it was entitled toimplement the policy in the absence of a proven substance abuse problem because it wasengaged in an inherently safety sensitive industry. Arbitrator C. Taylor held that theemployer did not have to prove that a substance abuse problem existed before adoptingthe policy because the company operated in a safety sensitive industry. Loggingoperations were dangerous, they took place in harsh and isolated environments, and workrelated serious injuries and fatalities were relatively high as compared to other industries.Therefore, the employer's operations constituted an industry that was inherently safetysensitive. This reality justified a high degree of caution on the part of the employerwithout the pre-condition of an extensively documented history of a substance abuseproblem in the workplace. The employer's position was upheld.2011 NBCA 58 (CanLII)[39] Weyerhaeuser I is also important because it offers a review of the relevantarbitral jurisprudence up to the date of the decision (2004). Specifically, three arbitraldecisions are fully canvassed: CN Rail, supra, Dupont Canada and Fording Coal Ltd. v.United Steelworkers of America, Local 7884, [2002] B.C.A.A.A. No. 9 (QL). The onedecision invariably cited in cases involving drug and alcohol testing is CN Rail.However, that case did not involve the validity of a policy imposing random drug and

- 19 -alcohol testing but rather with the validity of a policy imposing mandatory testing incircumstances where there is reasonable cause to believe an employee is impaired (withcause testing). The union had argued that the policy did not meet the reasonableness testbecause CN Rail had failed to establish a demonstrable need for the policy and failed toshow that alternative measures were not available to combat the problem. ArbitratorPicher expressed no difficulty in concluding that the industry with which he wasconcerned was, by its very nature, safety sensitive, thereby obviating a need todemonstrate problems of substance abuse in the workplace. He did not, however,disagree with earlier authorities holding that, for the purpose of meeting the KVP rules,there may be a burden on an employer to establish the need for a drug and alcohol testingpolicy, including whether alternative means are available to deal with the problem.However, Mr. Picher registered a caution with respect to those requirements whenconsidering safety sensitive industries. The critical passage from the CN Rail decisionreads as follows:2011 NBCA 58 (CanLII)One further theoretical concept needs to be addressed beforeturning to the specifics of CN's drug and alcohol policy onthis matter. As a number of the arbitral awards reflect, it isgenerally accepted that in analyzing the reasonableness of adrug and alcohol testing policy for the purposes of [KVP]standards, there may be a burden upon the employer to firstdemonstrate the need for such a policy, including anexamination of whether alternative means for dealing withsubstance abuse in the workplace have been exhausted.While I do not disagree with those principles, I believe anote of caution should be registered, particularly withrespect to that requirement. It seems to the Arbitrator thatthere are certain industries which by their very nature are sohighly safety sensitive as to justify a high degree of cautionon the part of an employer without first requiring anextensive history of documented problems of substanceabuse in the workplace. Few would suggest that the operatorof a nuclear generating plant must await a near meltdown, orthat an airline must produce documentation of a sufficientnumber of inebriated pilots at the controls of wide-bodyaircraft, before taking firm and forceful steps to ensure asubstance-free workplace, by a range of means that mayinclude recourse to reasonable grounds drug and alcoholtesting. The more highly risk sensitive an enterprise is, themore an employer can, in my view, justify a proactive,

- 20 -rather than a reactive, approach designed to prevent aproblem before it manifests itself. While more stringentthresholds may fairly be applied in non-safety sensitivework settings, as for example among clerical or bankemployees, boards of arbitration should be cautious beforerequiring documented near disasters as a pre-condition to avigilant and balanced policy of drug and alcohol detection inan enterprise whose normal operations pose substantial risksfor the safety of employees and the public. [para. 195][40] Based on the above passage, the arbitration board in the present casereasoned that an employer had to adduce sufficient evidence of a pre-existing alcoholproblem in the workplace in order to justify the testing policy, unless the industry inquestion fell within the category of “ultra-dangerous”, as would a nuclear plant or anairline. With great respect this interpretation of the above passage is not in keeping withwhat Arbitrator Picher actually decided. He held that, having regard to the nature of therailroad industry, it was unnecessary to prove a substance abuse problem in theworkplace. Admittedly, Arbitrator Picher went on to say that he was "also satisfied" thatthe employer had adduced sufficient evidence to justify its substance abuse policy,including drug and alcohol testing, and that the employer had taken sufficient steps toexhaust other less intrusive alternatives to deal with the problem of substance abuse in theworkplace.2011 NBCA 58 (CanLII)[41] Weyerhaeuser I also relied on Fording Coal (Arbitrator Hope) tosubstantiate the finding that proof of a substance abuse problem in the workplace is notnecessary in cases where the employer’s operations could be classified as inherentlydangerous. In the latter case, there was a challenge to the employer’s policy of reasonablecause testing for drugs and alcohol. The employer operated an open pit mine. ArbitratorHope concluded that employers were not required to establish the existence of an alcoholor drug problem in the workplace with respect to industries that are by their very naturesafety sensitive so long as the policy applied only to those who hold safety sensitivepositions. He found the mining operation qualified as inherently dangerous because of theuse of explosives, flammable, caustic and corrosive materials and chemicals. In reachinghis conclusion, Arbitrator Hope relied heavily on the CN Rail decision of Arbitrator M.G.

- 21 -Picher. See also Continental Lime Ltd. and International Brotherhood of Boilermakers,Iron Ship Builders, Blacksmiths, Forgers and Helpers, Local Lodge No. D575, (2002)105 L.A.C. (4 th ) 263, where a drug and alcohol testing policy was upheld withoutevidence of an alcohol or drug problem in the workplace and the employer operated anopen face quarry mine.[42] Weyerhaeuser I also relied on Dupont Canada (P.C. Picher, Chair). In thatcase the employer operated several plants manufacturing nylon intermediates involvingthe use of chemicals. The arbitrator rejected the union’s submission that the employer’sdrug and alcohol policy was unreasonable on the grounds the employer had failed toestablish “clear and cogent evidence” of a substantive drug or alcohol problem in theworkplace. This was true even though the workplace had a superior safety record and hadoperated for the last 10 years without a single lost-time injury on the job; no person in theplant had been found in possession of drugs or alcohol and over several decades there hadbeen no single incident or accident caused by alcohol or drug abuse. The arbitrationboard held that evidence of a pre-existing drug or alcohol problem was not necessary tojustify the policy’s adoption as the plant was an “inherently dangerous” workplace.2011 NBCA 58 (CanLII)[43] Two other arbitration decisions warrant consideration. In United Assn. OfJourneymen and Apprentices of the Plumbing and Pipefitting Industry of the UnitedStates and Canada, Local 488 v. Bantrel Constructors Co., [2007] A.G.A.A. No. 33(QL), the union challenged whether employees already working on-site at the employer’spetroleum manufacturing facility, prior to the introduction of drug and alcohol testing,had to submit to the new policy as a condition of gaining continued access. In dismissingthe grievance, the arbitration board confirmed it was not necessary to demonstrate thatthere was an actual drug and alcohol problem in the workplace before adopting policiesto enhance safety in cases where the workplace came within the highly dangerouscategory. The board also remarked that the jurisprudence revealed the evolution of twocompeting approaches: one from the West and one from the East. On the one hand, theWestern Canadian cases had permitted, for the most part, broader drug and alcoholtesting programs in workplaces which are “demonstrably safety sensitive”, alleviating

- 22 -employers of the burden of demonstrating existing drug and alcohol problems prior totesting. On the other hand, the board held the narrow approach could be found in theOntario cases such as Entrop, discussed above, and International Union of OperatingEngineers Local 793 v. Sarnia Cranes Ltd., [1999] O.L.R.D. No. 1282 (QL). The boarddecision in Bantrel was upheld on judicial review (2007 ABQB 721, [2007] A.J. No.1330 (QL)) but quashed on appeal (2009 ABCA 84, [2009] A.J. No. 216 (QL)).[44] While I might want to quibble with the interpretation placed on Entrop inBantrel Constructors Co., there is no question that Sarnia Cranes reflects the 1990sjurisprudence holding that if “mandatory universal testing” is to be justified there shouldbe evidence of a drug or alcohol problem in the workplace which cannot be combated insome less invasive way: see Provincial-American Truck Transporters and Teamstersunion, Loc. 880, Re, [1991] O.L.A.A. No. 16 (QL), and C.H. Heist Ltd. And E.C.W.U.,Loc. 848, Re, [1991] O.L.A.A. No. 48 (QL). If it were necessary to distinguish SarniaCranes, one would simply note that the case dealt, in a peripheral manner, with randomalcohol and drug testing, and also that much of the analysis was directed at the validity ofthe drug testing aspects of the policy.2011 NBCA 58 (CanLII)[45] The other arbitration decision which offers an extensive review of thearbitral jurisprudence is Navistar. In that case, the union challenged the employer'sadoption of a Substance Abuse Prevention Policy (SAPP), which included drug andalcohol testing for reasonable cause, and post-incident situations, but not random testing.The union also challenged the employer's determination that all warehouse associates, theentire bargaining unit, occupied safety sensitive positions which subjected them to thetesting provisions. The parties agreed to sever the issues raised by the union's grievanceand proceed only on the threshold issue of whether the employer's facility was a safetysensitive workplace where any drug and alcohol testing was appropriate. The workplacein issue was a warehouse and distribution facility where automotive parts were stored andshipped to various locations. The employer argued that the facility was a safety sensitiveenvironment due to the work performed by the warehouse associates operating heavydutyindustrial vehicles weighing 6,000 to 8,000 pounds. The arbitrator concluded the

- 23 -employer’s operation was not as inherently sensitive as those work environments wherethe policy was implemented without the need for evidence of a prior work-place drug oralcohol problem (railroads, mining and forestry), but that the operation in question wasfar enough along the continuum of “safety sensitive operations” that the employer wasentitled to be proactive. Resultantly, it need not prove the potential for catastrophe or theexistence of a substance abuse problem in order to justify testing. Given the employees’use of heavy machinery in the work-place, and given statutory safety obligations imposedon employers under the Occupational Health and Safety Act, S.N.B. 1983, c. O-0.2, ands. 217.1 of the Criminal Code (which expose employers to criminal responsibility forfailing to ensure employee safety by taking reasonable steps to prevent bodily harm), andin light of the contractual commitment contained in the collective agreement, the unionfailed to establish that the employer was acting in a manner inconsistent with thecollective agreement, without justification, or unreasonably when it adopted its SAPP.2011 NBCA 58 (CanLII)[46] It should not be presumed that there are no cases where the employer hasled evidence as to an existing alcohol or drug problem in the workplace with the object ofjustifying the adoption of its testing policy so as to by-pass the argument that theworkplace qualifies as an inherently dangerous operation. Communications, Energy andPaperworkers Union, Local 707 v. Suncor Energy Inc. (Alcohol and Drug PolicyGrievance), [2008] A.G.A.A. No. 55 (QL) is a case in which the employer is the ownerof mining operations in the Athabasca oil sands, located near Fort McMurray. The oilsands mining operation recovers bitumen which is then upgraded by refinery on theSuncor site. Employees work on a 24-hour, seven days a week basis, 365 days a year at aremote site unable to access the amenities available in most communities. The employerwas able to establish easily an existing alcohol and drug problem based on experienceand having regard to a provincial report dealing with substance abuse and gambling in theAlberta workplace.[47] Another decision in which evidence of an existing drug or alcoholproblem in the workplace was used to support the employer’s decision to impose randomalcohol testing is Greater Toronto Airports Authority v. Public Service Alliance of

- 24 -Canada, Local 0004, supra. Although the employer maintained that it had a right toimpose such a policy based on the “inherently dangerous” nature of its operation, thearbitrator noted that in a number of cases other arbitrators had held that such a findingwas not of itself sufficient to outweigh the privacy interests of individual employees andto support a regime of random testing. As a matter of fact, the arbitrator accepted theemployer’s evidence of an existing problem in the workplace and upheld the randomalcohol testing policy without offering an opinion as to whether a finding of “inherentworkplace dangerousness” would displace the need to adduce evidence of an existingalcohol problem in the workplace.2011 NBCA 58 (CanLII)[48] I could find relatively few cases in which an arbitrator upheld a grievancewith respect to the employer’s decision to implement random alcohol testing in theworkplace because of a failure to establish evidence of an alcohol or drug problem in theworkplace. The cases of which I am aware involved the trucking industry. But the factsof each case must be examined carefully. For example, Provincial-American TruckTransporters and Teamsters Union, Loc. 880, RE, involved truck drivers who transportedother trucks, piggy-back style, and the imposition of a policy of mandatory (but notrandom) drug testing by urine analysis. The policy was found to be unreasonable becausethe employer had failed to establish evidence of an existing alcohol or drug problem inthe workplace. A similar result was reached in Trimac Transportation Services-BulkSystems v. Transportation Communications Union, [1999] 88 L.A.C. (4 th ) 237 (ArbitratorK.M. Burkett). In that case, the arbitrator was asked to decide whether the employer’spolicy requiring all truck drivers to submit to random mandatory drug testing violated thecollective agreement. The policy was adopted in response to a US federal law requiringdrivers be tested. The union’s grievance was upheld. At the time the policy had beenadopted, there had had been no instances of impairment among drivers. Therefore,objectively speaking, there was no drug or alcohol usage problem to give rise to thereasonably held apprehension that drivers might compromise safety by reporting to workunder the influence.

- 25 -[49] The one recent decision which supports the union’s position in this case isPetro-Canada Lubricants Centre (Mississauga) v. Communications Energy andPaperworkers Union of Canada, Local 593, [2009] 186 L.A.C. (4 th ) 424 (ArbitratorKaplan). The case involved mandatory random alcohol testing. The Arbitrator determinedthat the policy was unreasonable because of the employer’s failure to adduce evidence ofan existing drug or alcohol in the workplace. In reaching that conclusion the arbitratorrelied on and quoted from the decision of M. G. Picher in Nanticoke. Regrettably thearbitrator misquoted Arbitrator Picher. Mr. Picher did not say that “arbitrators hadoverwhelmingly rejected mandatory, random, and unannounced testing of all employeesin a safety sensitive workplace…” What Mr. Picher said was that arbitrators hadoverwhelmingly rejected mandatory, random and unannounced drug testing of allemployees ...” (emphasis added). And as noted, Nanticoke dealt with random drugtesting. All of this said, the question of whether truck drivers are involved in aninherently dangerous operation remains alive and not affected by the innocentmisstatement as to what was actually said in Nanticoke. I suspect the answer depends inpart on what is being transported and the deterrent effect of the provisions of theCriminal Code dealing with impaired driving.2011 NBCA 58 (CanLII)[50] Finally, I must refer to the arbitral decision in Communications, EnergyPaperworkers Union Local 777 (May 27, 2000, T.J. Christian, Chair, unreported, onreserve, New Brunswick Law Society Library, Fredericton), where the majority upheldthe employer’s decision to adopt a policy of random alcohol testing at its Strathconarefinery based on the dangerous nature of the operations and a survey of affectedemployees with respect to alcohol and drug use by employees holding safety sensitivepositions at the refinery. This case would suggest that some evidence of a drug or alcoholproblem in the workplace is required to support the policy’s adoption. Several arbitratorswho have cited and relied on the Strathcona case have failed to appreciate that someevidence of an existing drug or alcohol problem was factored into the decision to upholdthe testing policy.

- 26 -C. Summary Observations on the Extant Jurisprudence[51] The above analysis undermines the union’s position that arbitrators inCanada have overwhelmingly rejected mandatory, random and unannounced drug andalcohol testing and that sufficient evidence of a pre-existing drug or alcohol problem inthe workplace is therefore a pre-condition to the enforceability of such policies, unlessthe workplace qualifies as ultra-dangerous. Having regard only to the arbitraljurisprudence discussed above, it is safe to conclude that, on balance, arbitrators haverejected the need to adduce such evidence in cases where the employer is able to establishthat the workplace is inherently dangerous. It is true that the early jurisprudence revealsan antipathy towards drug and alcohol testing in the workplace and, in particular, to drugtesting: e.g., Esso Petroleum Canada v. Communications, Energy & Paperworkers’Union, Local 614, [1994] B.C.A.A.A. No. 244, 56 L.A.C. (4 th ) 440 (J.D. McAlpine,Chair). Random alcohol testing, however, gained early acceptance once testing wasrestricted to employees holding safety sensitive positions and the testing would be bybreathalyser. This left for consideration the pivotal question whether the workplace inquestion fell within the “highly” or “inherently” dangerous category. Employers involvedin the production and refining of oil products or chemicals, or in the mining and forestrysectors of the economy, have been able to persuade arbitrators and arbitration panels thatsuch operations so qualify and usually without adducing evidence of an existing alcoholproblem in the workplace. By contrast, there has been a resistance to classifying truckingoperations as inherently dangerous.2011 NBCA 58 (CanLII)[52] As matter of policy, this Court must decide whether an employer is underan obligation to demonstrate sufficient evidence of an alcohol problem in the workplacebefore adopting a policy requiring mandatory random alcohol testing. In my view, thebalancing of interests approach which has developed in the arbitral jurisprudence andwhich is being applied in the context of mandatory random alcohol testing warrantsapprobation. Evidence of an existing alcohol problem in the workplace is unnecessaryonce the employer’s work environment is classified as inherently dangerous. Not only isthe object and effect of such a testing policy to protect the safety interests of those

- 27 -workers whose performance may be impaired by alcohol, but also the safety interests oftheir co-workers and the greater public. Potential damage to the employer’s property andthat of the public and the environment adds yet a further dimension to the problem andthe justification for random testing. As is evident, the true question is whether theemployer’s workplace falls within the category of inherently dangerous. It is to that issueI now turn.D. Is Irving’s kraft mill an inherently dangerous operation?[53] It has been argued that the arbitration board made a palpable andoverriding error in concluding that the kraft mill did not fall within the classification ofultra-dangerous operation. The reality is that in law there is no such classification. Hence,the question we must address is whether the mill operations can be classified asinherently dangerous. In my view, the arbitration board’s finding that the kraft paper millpresented itself as a “dangerous work environment” satisfies the test of inherentlydangerous and, therefore, Irving did not have to adduce evidence of an existing alcoholproblem in the workplace, let alone sufficient evidence of a “significant problem” in theworkplace.2011 NBCA 58 (CanLII)[54] For greater certainty, I want to focus briefly on the reality that chemicalplants and railway operations have been classified as inherently dangerous workenvironments, thereby dispensing with the need to adduce evidence of an existing alcoholproblem in the workplace in order to justify the adoption of a random alcohol testingpolicy. Yet, as noted earlier, the arbitration board held that Irving’s kraft mill could notbe equated with a railway operation or a chemical plant. In my respectful view thisfinding is unreasonable. Let me explain.[55] To the extent that a railway company, which transports goods throughoutthe country, is entitled to adopt a random alcohol testing policy without evidence of anexisting alcohol problem in the workplace, one would think that a kraft paper mill wouldprovide an equally dangerous workplace. If a railway company which transports

- 28 -hazardous materials to various workplaces is entitled to adopt a policy with respect torandom alcohol testing then it should follow that a company which uses those materialsin its operations is equally entitled to do so. Indeed, the Irving kraft mill uses hazardousmaterials such as chlorine dioxide, sulphuric acid, hydrogen peroxide, liquid and gaseousoxygen and methanol. Moreover, Irving’s employees are responsible for loading andunloading chemicals from rail cars and other types of vehicles. In short, it makes no sensethat a railway operation is entitled to adopt a policy of random alcohol testing, but thecustomer who uses the toxic chemicals in its manufacturing process is not. When thefacts are so viewed, the evidence of Irving’s witness, Mr. Moorehouse, to the effect that akraft mill is as close to a chemical plant as one can get makes eminent good sense and, aswe know, refineries and chemical plants are treated in the arbitral jurisprudence asinherently dangerous work sites.2011 NBCA 58 (CanLII)[56] The facts of the present case also reveal a kraft mill with a $350 millionpressure boiler which has a “high potential” for explosion. The potential impact on theenvironment of a major catastrophe, such as a chemical spill, has never been challenged.The intra-city location of the kraft mill and its proximity to the St. John River and Bay ofFundy would cause concern for any environmentalist. Indeed, at one point the boardaccepts that incorrect configuration of plant control systems by certain employees isnoted as having a potential for “catastrophic failures”. As stated at the outset, some mightargue that at its core this appeal is of importance to the public at large.[57] In summary, it is not difficult to support the contention that Irving’s kraftpaper mill qualifies as an inherently dangerous workplace as would a chemical plant.This is why evidence of an existing alcohol problem in the workplace was not required tosupport its policy of random alcohol testing. This is why the arbitration board’s decisioncannot stand and the application judge was correct in determining that its decision shouldbe set aside and the grievance dismissed. In the circumstances, it is unnecessary to delveinto issues dealing with the board’s perception that evidence of near disasters is requiredto justify the imposition of alcohol or drug testing policies.

- 29 -V. Disposition[58] The appeal should be dismissed. As the hearing was spread over twodays, the respondent is entitled to costs of $5,000.WE CONCUR:____________________________________J.T. ROBERTSON, J.A.2011 NBCA 58 (CanLII)___________________________________J. ERNEST DRAPEAU,CHIEF JUSTICE OF NEW BRUNSWICK____________________________________WALLACE S. TURNBULL, J.A.

IN THE COURT OF QUEEN’S BENCH OF NEW BRUNSWICKTRIAL DIVISIONJUDICIAL DISTRICT OF FREDERICTONCitation: 2011 NBQB 131Date: 20110513B E T W E E N:Docket: F-M-58-10JAMES DEREK KILLAM,Applicant;- and -2011 NBQB 131 (CanLII)FITCHCO ENTERPRISES INC.,a body corporate,Respondent;NEW BRUNSWICK HUMANRIGHTS COMMISSION,Respondent.Date of Hearing: January 5, 2011Date of Decision: May 13, 2011Before:Madam Justice J. L. ClendeningAppearances:Matthew R. Hiltz for Applicant.J. William Cabel for Respondent, Fitcho Enterprises Inc., a body corporate.Seamus Cox for Respondent, New Brunswick Human Rights Commission

1CLENDENING, J.[1] This is an Application for judicial review pursuant to Rule 69 with regardto a decision of the New Brunswick Human Rights Commission (NBHRC) declining toextend the time for the Applicant to file his complaint alleging mental disabilitydiscrimination respecting employment, contrary to section 3 of the New BrunswickHuman Rights Act, R.S.N.B, 1973, c. H-11 (the Act) as against the Respondent FitchcoEnterprises Inc (Fitchco).2011 NBQB 131 (CanLII)[2] The Applicant is James Derek Killam and the Respondent, Fitchco,operates a Canadian Tire Store, #309, in the Town of Oromocto, New Brunswick. Thegrounds relied on by Killam as set out in the Application are:a. NBHRC failed to observe principles of natural justice or proceduralfairness, or alternatively, erred in law by fettering its discretion unders.17.1(2) of the Act, supra, in that it restricted its consideration whether ornot to grant a time limit extension to the Applicant to file his Complaintsolely on the criteria enumerated in its internal policy, the “Guideline onTime Limit Extension for Complaint Initiation”;b. NBHRC erred in law by failing to apply the correct legal test with respect tothe exercise of its discretion to extend the time for filing a complaint unders.17.1(2) of the Act, supra; and,c. NBHRC erred in fact and law in finding that the Applicant failed todemonstrate “justifiable reasons beyond his control” a “bona fide” reasonfor not filing his Complaint in time.[3] Killam worked for the Canadian Tire from June 11, 2001 until April 21,2008. During that time he experienced a difficulty in controlling his temper. He spokewith Mr. Fitch, who owns Fitchco, and Mr. Fitch recommended that Killam seek medical

2assistance and remain employed. Killam claims that he sought such assistance in 2004and his doctor placed him on medication. Further, Killam stated in his affidavit that hisemployer was always aware of his condition and encouraged him to continue with hisemployment. In early April 2008, his doctor advised him to take a two week medicalleave to deal with his depression/anxiety. He met again with his doctor on April 21, 2008when he was told that he should remain off work, continue with medication, and to beexamined for possible Post Traumatic Stress Disorder (PTSD). On April 22, 2008 whenKillam met with Fitch, he was terminated because of his attitude and angry outburst.2011 NBQB 131 (CanLII)[4] In order to correctly state what Killam contends he did on leaving Fitch’soffice, paragraphs 13-20 of his affidavit are reproduced:13. After leaving the above mentioned meeting with Mr. Fitch, I went directlyto the law office of my then counsel, Lorrie Yerxa (“Mr. Yerxa”).14. I contacted NBHRC in early May of 2008 and provided a completed humanrights complaint form to Mr. Yerxa on May 28, 2008. In their letter to me,NBHRC states that the “Commission may refuse jurisdiction with respect tocomplaints filed more than one year after the alleged incident ofdiscrimination”. A copy of the correspondence, without attachments, fromNBHRC is attached as Exhibit “B”. A copy of the initial complaint whichmy wife, Lois Ann Killam, filled out and provided to Mr. Yerxa is attachedas Exhibit “C”.15. On June 4, 2008, Mr. Yerxa provided me with his legal opinion, a copy ofwhich is attached as Exhibit “D”.16. During the summer of 2008, Mr. Yerxa told both Lois Ann and I that thematter should be resolved by Christmas of 2008 and that regardless of theoutcome; I would be able to file the human rights complaint after the civil

3matter was resolved. Mr. Yerxa recommended delaying the filing of thehuman rights complaint because if we lost it would prejudice my civil suit.17. I relied on Mr. Yerxa to safeguard all my legal rights, including thepossibility of filing a human rights complaint.18. The civil litigation regarding my wrongful dismissal did not end byChristmas of 2008, in fact it is ongoing. The one year time limit for filing acomplaint under the Act, supra passed without my receiving any warningfrom Mr. Yerxa that the time limit was approaching. I am informed by mywife, Lois Ann, that Mr. Yerxa continued to represent that filing a human2011 NBQB 131 (CanLII)rights complaint was a possibility.19. Due to the lack of progress with my civil action and my human rightsviolation, on or about February 25, 2010, I sought a second opinion withrespect to my legal rights from Cox & Palmer.20. Approximately one month later, on March 24, 2010, Cox & Palmer filed ahuman rights complaint on my behalf, in which it was outlined how thecircumstances warranted NBHRC’s exercise of its discretion pursuant tos.17.1(2) of the Act, supra. A copy of this correspondence is attached asExhibit “E”.[5] On July 14, 2010 the NBHRC provided Killam’s counsel with a decisionwith regard to his time limit extension request. Jill Peters, Director of NBHRC, said:2.0 & 2.1 states:After careful consideration, the Commission’s decision was not to grant a timeextension in this matter. The Commission found that it did not meet the criteriaset out in the New Brunswick Human Rights Commission’s Guideline of TimeLimit Extension for Complaint Initiation, Human Rights Act, s 17.1.The Guideline on Time Limit Extension for Complaint Initiation at section2.0 GROUNDS FOR EXERCISE OF COMMISSION’S DISCRETION UNDER S.17.1(2)The Commission may extend the one year time limit for making a complaintunder s.17.1(1) where:

4a) there is a strong prima facie case, both in fact and law;b) there is evidence of a substantial loss or damage to thecomplainant and a clearly identifiable remedy;c) the complainant had justifiable reasons –reasons beyond his/hercontrol- for not filing the complaint within the one year timelimit; andd) the respondent will not be unduly prejudiced by the extension.2.1 INTERPRETATION2.1.1 “Justifiable reason(s) beyond his/her control” includes:i) mental or physical disability;ii) the exercise of a statutory or other applicable appeal or reviewright in a timely and appropriate fashion; oriii) other bona fide reason, as determined by the Commission.2.1.2 “Undue prejudice”, in the context of this Guideline, means an actual lossof evidentiary position as a result of the disappearance of a witness, document orother evidence.2011 NBQB 131 (CanLII)Duty of Fairness[6] Did the NBHRC comply with the principles of natural justice?[7] Mr. Killam first approached the NBHRC on May 8, 2008 by way of atelephone conversation with an employee, Johanne Bertrand. On May 12, 2008, AlineBarnette, an intake officer, wrote a letter to Mr. Killam outlining the process to follow infiling a complaint. He was also provided with everything he needed to complete thecomplaint forms. He completed the forms, but did not file it with NBHRC. He blameshis failure to file on legal advice that he received. However, in the letter provided bycounsel to Mr. Killam, it was not obvious that counsel advised Mr. Killam that he should“delay the filing of the human rights complaint because if we lost it would prejudice mycivil suit”, as Mr. Killam stated in his affidavit evidence. In fact the following is takenfrom a letter from his counsel discussing the Human Rights Complaint:With reference to the Human Rights Act, your employment wasterminated during the time you were on stress leave. There are Court cases inNew Brunswick that indicate in such a case, there is a presumption thatdisability was a factor in the termination. If you had some medical evidence oropinion of your disability being in existence at the time of your termination, thatwould help in any claim you might make to the Human Rights Commission for

5discrimination. Without medical documentation, it is very unlikely that yourclaim would succeed. And even with the medical documentation, your formeremployer might be able to overcome the presumption that disability was a factorin the termination, if your employer had evidence of other grounds.In my opinion your claim to Human Rights Commission will be adifficult one to prove. As with your potential claim under your Group InsurancePlan, I do not see any negative consequences in your making a claim to theHuman Rights Commission, and I leave it your discretion on these two fronts.Clearly, Mr. Killam’s counsel provided advice and he did not state in writing thatit would prejudice any civil claim.[8] It is settled law that a judicial review is not an appeal of a tribunal2011 NBQB 131 (CanLII)decision. In this matter I must decide if the NBHRC properly exercised its powersconferred by statute (see Nancy Chronkite v. Town of Nackawic, 2009 NBQB 110).[9] The issue before me is one of fairness. It is well stated that whenconsidering the issues of natural justice and fairness, the Court is required to examine theprocedure with no deference to the tribunal involved and to determine whether thetribunal complied with the rules of natural justice and followed the rules of proceduralfairness ( see Moreau-Bérubé v. New Brunswick (Judicial Council) [2002] SCJ No.9 atparagraph 74). Jill Peters, the Director of the New Brunswick Human RightCommission, in her affidavit detailed how the NBHRC dealt with Mr. Killam. Producedis some of her evidence:2. On May 8, 2008, the Commission received a telephone inquiry fromJames Derek Killam (hereinafter “Killam”). On May 12, 2008, theCommission sent out a letter, which among other things advised Killamthat if he wanted to file a human rights complaint in accordance withthe New Brunswick Human Rights Act (hereinafter “the Act”), he wasrequired to file his complaint in writing within one year of the alleged

6discrimination. The letter also stated that the Commission may refusejurisdiction if the complaint was filed outside the one year time limit.A copy of the letter sent to Killam is attached hereto and marked asExhibit “A”.3. Approximately one year and ten months later, on or about March 24,2010, the Commission received a Time Limit Extension (hereinafterTLE) request and a signed Complaint dated March 24, 2010 fromKillams’ legal counsel. Copies of Killam’s TLE request and a2011 NBQB 131 (CanLII)Complaint are attached hereto and marked as Exhibit “B”.4. On or about March 26, 2010, the TLE request was referred to Mr.Seamus Cox, a lawyer with the Commission, to be processed.5. I am advised by Mr. Cox and do verily believe that upon reviewing thedocumentation attached to the TLE request, Mr. Cox had questionswith respect to the TLE request. As such, Mr. Cox had a telephoneconversation with Killam’s legal counsel, wherein he explained theCommission’s process, and requested further information from Killam.6. Subsequently the Commission received a letter from Killam dated April28, 2010 providing further details related to the reason for not filing acomplaint in a timely fashion. A copy of Killam’s April 28, 2010 letteris attached hereto and marked as Exhibit “C”.7. On or about May 6, 2010, Mr. Cox contacted the respondent inKillam’s Complaint, Fitchco Enterprises Inc. (hereinafter “Fitchco”),and sent Fitchco a letter explaining the Commission’s process withattached copies of the Complaint, the TLE request, a copy of theCommission’s Guideline on Time Limit Extension for ComplaintInitiation (hereinafter “TLE Guideline” and mediation fact sheet.

7Fitchco was provided a deadline of May 25, 2010 to file a response tothe Complaint and to provide its position on the TLE request. A copyof Mr. Cox’s correspondence is attached hereto and marked as Exhibit“D”.8. On or about May 25, 2010, Killam’s legal counsel forwarded two moresubmissions to Mr. Cox. Copies of the two letters are attached togetherhereto and marked as Exhibit “E”.9. On or about May 26, 2010, Fitchco’s legal counsel left a voice mail on2011 NBQB 131 (CanLII)Mr. Cox’s phone requesting an extension to file Fitchco’s response.This was followed up by an email or or about May 27, 2010. I amadvised by Mr. Cox, and do verily believe that Mr. Cox responded toFitchco’s email and provided a new deadline of June 4, 2010.10. Subsequently the Commission received Fitchco’s written response toKillam’s Complaint and TLE request on June 1, 2010. A copy ofFitchco’s response is attached hereto and marked as Exhibit “F”.11. On June 7, 2010 the file was transferred from Mr. Cox to anotherlawyer on staff, Sarina McKinnon, who was asked to present the file tothe Commission at an upcoming meeting.[10] After considering the additional information provided by Killam andFitchco, the NBHRC denied the extension and said Killam “failed to provide sufficientinformation to indicate that he was unable to file the complaint within the prescribed timedate due to justifiable reasons beyond his control or due to a bona fide reason.”[11] In my view, the NBHRC did all that it could for Mr. Killam. Procedureswere followed and Mr. Killam was fully informed of the statutory requirements and all

8applicable guidelines. He was given extensions to provide additional information withregard to his reason for not filing a complaint in a timely fashion.[12] In this matter, the NBHRC owed Killam a duty to be fair. According tothe text, Principles of Administrative Law by Jones and de Villars (5 th Edition), at page255, “…The duty to be fair has evolved so that it now applies to every public authoritymaking an administrative decision which affects the rights, privileges or interests of anindividual…” The NBHRC’s decision affected both Killam and Fitchco and is2011 NBQB 131 (CanLII)characterized as a pre-hearing procedure (see Principles of Administrative Law, supra,page 301). By not using its discretion to allow a complaint to proceed because of a timelimit not being met obviously seriously affects Killam because it denies him the right tobe heard. Although a time limit to file a complaint is generally one of strict compliance,the guidelines pursuant to the Act allow for a saving provision as set out above inparagraph 5. NBHRC determined that Killam did not provide information in regard tojustifiable reasons beyond his control or a bonafide reason sufficient to justify not filinghis complaint within the time frame of the Act. It should be noted that Killam originallycompleted the NBHRC form on May 28, 2008 and did not file it until March 24, 2010,some 21 months later. NBHRC did have a duty to be fair to the parties. They providedparties the opportunity to provide further relevant information and gave them extensionsof time to do so. NBHRC provided Killam with decisions for not extending the time tofile a complaint. NBHRC fulfilled their duty of fairness to the parties.

9Fettering Discretion[13] Counsel for Killam contends that if NBHRC did not fail to observe therules of natural justice or procedural fairness, then it erred in law by fettering itsdiscretion under s.17.1(2) of the Act. In Principles of Administrative Law, supra, theauthor states at page 198.:...there must necessarily be some limit on the extent to which the exercise of adiscretionary power can be fettered by the adoption of an inflexible policy...2011 NBQB 131 (CanLII)On the other hand, it would be incorrect to assert that a delegate cannot adopt ageneral policy. Any administrator 94 faced with a large volume of discretionarydecisions is practically bound to adopt rough rules of thumb. This practice islegally acceptable, provided each case is individually considered on its merits....[I]f the policy had been adopted for reasons which the tribunal maylegitimately entertain, no objection could be taken to such a course. On the otherhand there are cases where a tribunal has passed a rule, or come to adetermination, not to hear any application of a particular character bywhomsoever made.[14] In the matter before me NBHRC adopted a Guideline pursuant to s.17.1(2)of the Act as set out in paragraph 5 above with clearly defined criteria. The Guidelinealso defines justifiable reasons and does not restrict itself because it includes “Other bonafide reason…” In my view, the NBHRC has adopted a policy without fettering theexercise of its discretion; it is flexible and its existence was made known to Killam. It isclear that the NBHRC did not decline or refuse to exercise its discretion, rather it didconsider all of the material put before it by both Killam and Fitchco and it indicated in itsdecision that after “careful consideration” it decided not to grant the extension. Simplyput, Killam did not provide the information to meet the criteria in either s.17.1(2) or theGuidelines. In my view this was a flexible policy which allowed NBHRC to exercise itsdiscretionary power and it did so by reviewing the relevant material filed.

10Correct Legal Test[15] Killam’s counsel contends that the NBHRC erred in law by relying on the“Policy” developed under s.17.1(2) of the Act. It is the Applicant’s contention that thecorrect legal test is “To do justice in each particular case” test which does not mandatethe late filer to provide information in regard to “reasons beyond his control”. For thisproposition Killam’s counsel cites Naderi v. Strong, 2005 NBCA 10 and refers to the2011 NBQB 131 (CanLII)“justice” test:i) balance the prejudice to each party resulting from the decision;ii)iii)whether a party intended to file within the prescribed time limit and thereason for missing that time limit; and,the determination of whether or not there is a serious issue or anarguable case for consideration by the Court.[16] According to the Guidelines for a time extension “justifiable reasonsbeyond his/her control” includes among other factors “Other bona fide reason, asdetermined by the Commission”.In my view that provides for a test that is both“flexible and organic”. It is this criterion that allows the NBHRC to be capable offulfilling its “remedial role” as pointed out by counsel for Killam.[17] The Standard of Review with regard to the Guidelines and s.17.1(2) of theAct is correctness and I find no factual basis in the information presented to point to theuse of the policy as being incorrect.

11Reasons for NBHRC decision – Reasonableness[18] According to Khanna v. Canada(Attorney General), 2008 FC576 the“exercise of the Commission’s discretionary power to extend the time limit is reviewableunder the Reasonableness Standard”. Madam Justice Mactavish was writing about theCanadian Humans Rights Commission in Khanna (supra). Mr. Justice Robertson in NewBrunswick (Department of Social Development) v. New Brunswick Human RightsCommission, 2010 NBCA 10 acknowledged some differences between the provincial2011 NBQB 131 (CanLII)versus federal statutes in regard to human rights, but he agreed that the Policy should bereviewed on the Standard of Reasonableness.[19] Killam did not present sufficient material to allow the NBHRC to properlyevaluate whether there was a strong prima facie case. He indicated that he suffers frompost traumatic stress disorder, but he did not provide an expert opinion or any medicalevidence in that regard. He also did not offer a justifiable reason for not filing thecomplaint until 10 months after the deadline. He was not advised by counsel to wait untilafter the conclusion of his court litigation. The fact is his counsel, at least in his opinionin writing, indicated there would be no problem to file with NBHRC and launch a civilsuit at the same time.[20] Killam did not demonstrate a substantial loss or damage because of theloss of disability benefits that could be addressed by NBHRC.[21] The issue of undue prejudice was not strenuously argued at the hearing soit is not possible for one to comment on whether there is an actual loss of evidentiary

12position. However, because of the ongoing law suit I doubt if the parties have lostwitnesses, documents or other evidence.Standard of Review[22] The NBHRC carefully considered the evidence submitted by Killam. Itallowed his counsel further time to submit more material. The NBHRC also gave Fitchco2011 NBQB 131 (CanLII)an opportunity to file material. In my view, it carefully considered the application for anextension of time to file and there is no evidence before me that it did in any waymisapprehend or misconstrue the material provided to it, so I find the decision not toextend the time limit a reasonable one. The decision of NBHRC meets the Standard ofReasonableness if it is transparent, intelligible and justified, and if the decision fallswithin the range of probable outcomes (see Dunsmuir supra). I find that the decisionclearly meets the Standard of Reasonableness.[23] The NBHRC complied with all statutory requirements and exercised itsdiscretion after considering all relevant factors. It treated both parties fairly.[24] The application is dismissed with costs payable by Killam to Fitchco inthe amount of $1,000.00__________________________________J. L. Clendening, J.C.Q.B.

CITATION: Mason v. Chem-Trend Limited Partnership, 2011 ONCA 344DATE: 20110503DOCKET: C52707 (M39782)COURT OF APPEAL FOR ONTARIOBETWEENDoherty, Moldaver and Feldman JJ.A.Tom MasonAppellant (Applicant)2011 ONCA 344 (CanLII)andChem-Trend Limited PartnershipRespondent (Respondent)Chris G. Paliare and Richard Stephenson, for the appellantKaren Fields and Susan Crawford, for the respondentHeard: April 13, 2011On appeal from the judgment of Justice Emile Kruzick of the Superior Court of Justicedated August 26, 2010.Feldman J.A:[1] The appellant was terminated, allegedly for cause, after 17 years of employmentwith the respondent. Wrongful dismissal litigation between the parties is ongoing. Inorder to try to quickly determine whether and to what extent he was free to compete withthe respondent, the appellant brought a separate application asking the court to declarethe restrictive covenant in his employment contract unenforceable. He was unsuccessfuland appeals to this court.

Page: 2FACTS[2] The respondent is a Michigan corporation in the business of formulating,manufacturing and selling release agents and related processing chemicals for use in thegeneral rubber, tire, polyurethane, composites, thermoplastics and die casting industriesfor customers that operate around the world. The appellant was hired in 1992 andoperated as a technical salesperson for the respondent for 17 years before his employment2011 ONCA 344 (CanLII)was terminated in July, 2009.[3] When the appellant was hired, he was required to sign the Chem-TrendConfidential Information Guide and Agreement (“CIGA”), which contains the restrictivecovenant clause that is the subject of this appeal and provides:3. I agree that if my employment is terminated for anyreason by me or by the Company, I will not, for aperiod of one year following the termination, directlyor indirectly, for my own account or as an employee oragent of any business entity, engage in any business oractivity in competition with the Company by providingservices or products to, or soliciting business from,any business entity which was a customer of theCompany during the period in which I was anemployee of the Company, or take any action that willcause the termination of the business relationshipbetween the Company and any customer, or solicit foremployment any person employed by the Company.[Emphasis added.][4] From July, 1992 to November, 1993, the appellant’s territory of responsibility wasthe province of Ontario. He then moved to the United States where he was responsible forthe states of Wisconsin, Iowa, North Dakota, South Dakota, Illinois, Nebraska, Colorado

Page: 3and Minnesota. In 2001 he returned to Canada with responsibility for the whole ofCanada as well as certain mid-Atlantic U.S. states.[5] As technical sales representative, the appellant acquired knowledge about thecompany, its products and its customers, including the Chem-Trend products that eachcustomer used and the prices it paid. As many of the clients were multi-nationalcorporations, that knowledge extended beyond the appellant’s geographical territory. He2011 ONCA 344 (CanLII)also attended annual sales and product meetings that were attended by the sales forces forspecific product or industry groups. The topics discussed included sales, sales targets,market opportunities and potential areas for business development. One area of theChem-Trend business that the appellant was not involved in was die casting.[6] The application judge accepted the appellant’s evidence that the respondent’soperations were “extremely guarded and protected”, and that consequently, he had onlycursory knowledge of both the general workings of the laboratory, the compound listsand the formulas. He also accepted that the appellant had no access to the respondent’slarge current or older customer lists.[7] Although by the time the appeal was argued, the one-year temporal limit in thenon-competition clause had expired, the court understood that the issue of theenforceability of the clause was not moot, as the parties are involved in relevant ongoinglitigation both here and in Michigan.

Page: 4REASONS OF THE APPLICATION JUDGE[8] The application judge addressed three issues in his analysis of whether therestrictive covenant was unenforceable: (1) was the restrictive covenant ambiguous?(2) was it unreasonable? (3) was there any other matter that would affect the appellant’sclaim for declaratory relief?[9] On the first issue, the application judge found that the covenant is unambiguous in2011 ONCA 344 (CanLII)its wording and that the appellant understood what he was agreeing to when he signed theoffer letter and the CIGA in 1992 when he was hired.[10] Following the Supreme Court of Canada decision in J.G. Collins InsuranceAgencies Ltd. v. Elsley Estate, [1978] 2 S.C.R. 916, the application judge looked at thecovenant in context, and considered the three factors to determine its reasonableness:geographic scope, the activity that is restricted, and the time period of the restriction. Heaccepted that because of the world-wide operations of the respondent and of many of itscustomers, it was reasonable that the covenant be broad and geographically world-wide.He further accepted that it was reasonable to restrict any activity of the appellant incompetition with the respondent because of the appellant’s access to significantinformation about the respondent’s business and his technical knowledge of the industry.Finally, he found the one-year temporal restriction to be relatively short compared toother cases. He concluded that the more onerous geographic and activity restrictions in

Page: 5this covenant were balanced out by the shorter temporal limitation to make the clause as awhole a reasonable one.[11] Although not necessary to do so, the application judge discussed the respondent’sargument that the appellant should fail because his conduct since being terminateddisqualified him on the basis of the clean hands doctrine. The impugned conduct involvedthe appellant approaching customers of the respondent and dealing with competitive2011 ONCA 344 (CanLII)products before bringing the application to determine the validity of the restrictivecovenant. The application judge concluded that: “In the end, I find Mr. Mason did bringthis application realizing the difficulty the CIGA presented for him.”ISSUES[12] Is the restrictive covenant in the employment contract between the appellant andthe respondent enforceable or unenforceable at law?ANALYSIS[13] Shafron v. KRG Insurance Brokers, [2009] 1 S.C.R. 157, is the most recentdecision of the Supreme Court where the propriety and enforceability of restrictivecovenants is discussed. The issue before the court was whether an unenforceablerestrictive covenant could be read down or modified by a court in order to make itenforceable. In the course of answering that question, the court reviewed the law onrestrictive covenants in sale and employment contracts. Rothstein J. reiterated thatalthough covenants in restraint of trade are contrary to the public policy in favour of

Page: 6trade, certain of such covenants will be upheld if they are found to be reasonable in thecircumstances. Where the covenant is found in an employment contract it will besubjected to stricter scrutiny than where it is part of the consideration for the sale of abusiness.[14] The court referred to the three-pronged test for reasonableness set out byDickson J. in Elsley, but held that before addressing that issue, the first question is2011 ONCA 344 (CanLII)whether there is ambiguity in the interpretation of the meaning of the restrictive covenantclause. Rothstein J. explained that: “[a]n ambiguous restrictive covenant will be primafacie unenforceable because the party seeking enforcement will be unable to demonstratereasonableness in the face of an ambiguity.” (para. 27). And further: “…if the covenant isambiguous, in the sense that what is prohibited is not clear as to activity, time, orgeography, it is not possible to demonstrate that it is reasonable. Thus, an ambiguousrestrictive covenant is, by definition, prima facie unreasonable and unenforceable.”(para 43).[15] In Shafron, the geographical restriction in the covenant was described as“Metropolitan City of Vancouver”. The court found that there was no legal or judicialdefinition of this location as described, and it was unclear what it meant or what theparties meant by it. This constituted an ambiguity which could not be read down orrectified. The covenant was thus prima facie unreasonable, because it was not possible todetermine the reasonableness of the covenant unless the ambiguity could be resolved. As

Page: 7a result, the restrictive covenant was held to be both ambiguous and unreasonable andwas therefore struck down.[16] This court also recently discussed the governing principles that are applicablewhen considering whether a restrictive covenant in a contract of employment isunreasonable and therefore unenforceable in H. L. Staebler Company Ltd. v. Allan(2008), 92 O.R. (3d) 107 (C.A.). They can be summarized as follows:2011 ONCA 344 (CanLII)• To be enforceable, the covenant must be “reasonable between the parties and withreference to the public interest.” (Elsley at p. 923)• The balance is between the public interest in maintaining open competition anddiscouraging restraints on trade on the one hand, and on the other hand, the right of anemployer to the protection of its trade secrets, confidential information and tradeconnections.• “The validity, or otherwise, of a restrictive covenant can be determined only upon anoverall assessment of the clause, the agreement within which it is found and all of thesurrounding circumstances.” (Elsley at p. 924)• In that context, the three factors to be considered are, 1) did the employer have aproprietary interest entitled to protection? 2) are the temporal or spatial limits toobroad? and 3) is the covenant overly broad in the activity it proscribes because itprohibits competition generally and not just solicitation of the employer’s customers?

Page: 8[17] It is convenient to reproduce again the restrictive covenant clause that is at issue inthis case:I agree that if my employment is terminated for any reason byme or by the Company, I will not, for a period of one yearfollowing the termination, directly or indirectly, for my ownaccount or as an employee or agent of any business entity,engage in any business or activity in competition with theCompany by providing services or products to, or solicitingbusiness from, any business entity which was a customer ofthe company during the period in which I was an employee ofthe Company, or take any action that will cause thetermination of the business relationship between the Companyand any customer, or solicit for employment any personemployed by the Company. [Emphasis added.]2011 ONCA 344 (CanLII)Ambiguity of the Restrictive Covenant[18] In determining whether the restrictive covenant is enforceable, the applicationjudge, following Shafron, looked first at the meaning of the clause and whether it isambiguous. He concluded that the plain words were clear, that the appellant understoodthem and therefore there was no ambiguity. I agree.[19] Although the appellant sought to characterize the practical unworkability of thecovenant as ambiguity in implementation, I prefer to consider it as part of thereasonableness inquiry.Reasonableness of the Restrictive Covenant[20] The application judge recognized that the respondent has trade secrets,confidential information and trade contacts that are entitled to protection. These includednot only product information, but information about customers’ needs and pricingarrangements with the company that give it a competitive advantage. Because of the

Page: 9world-wide nature of the business entities in issue, he found the lack of any spatial limitin the restrictive covenant to be appropriate. He also observed that the temporal limit oncompetition of one year is relatively short compared to some other covenants that havebeen upheld.[21] When dealing with what activity the appellant was restricted from, the applicationjudge noted that the respondent did not dispute that the activity restriction was very broad2011 ONCA 344 (CanLII)and included “anything that would be in competition with its business”. He accepted therespondent’s reasoning that because the appellant had been a technical salesrepresentative, his knowledge of significant product and customer information could beused against the respondent and be harmful to its business if he were allowed to competewith them. Therefore, he could not be allowed to have any dealings with the respondent’scustomers, whether he solicited them or they came to him.[22] With respect to the application judge, he erred in concluding that a completeprohibition on competing with the respondent was not an overly broad restriction on theactivity of the appellant.[23] First, when the agreement is examined as a whole, there are other clauses thatprotect the respondent. In particular, there is a separate covenant that protects tradesecrets and confidential information of the respondent:2. I will not at any time, either during or after myemployment with the Company, use or disclose toothers any trade secrets or confidential information ofthe Company, except as required in performing my

Page: 10duties for the Company or with the Company’s writtenconsent.[24] This clause contains significant protection for the company and must be intendedto work in conjunction with the restrictive covenant after the appellant is no longer anemployee of the company.[25] Second, the prohibition on dealing with businesses who may be former customersof the company, whose customer information could be very stale indeed in the case of a2011 ONCA 344 (CanLII)17-year employee, is not consistent with a one year restriction on competition, whichthen allows the employee to compete freely. If the rationale behind the one yearprohibition is that after one year the appellant’s information on the company and itsclients may no longer be current, then the prohibition on dealing with former customers iseven less justifiable.[26] Third, the appellant was part of the technical sales force for a large company, whooperated in a limited sales territory. The appellant is prohibited not just from solicitingformer customers, but from any dealing with them in competition with the respondent.He was not the president or chief financial officer, where there may be more justificationfor a broader prohibition on competition after such a highly placed employee leaves thecompany. See, for example, Elsley at pp. 925-28, in which the court held that therestrictive covenant in question was not overly broad where the employee was the generalmanager of the company and had significant personal knowledge of and influence overthe company’s customers.

Page: 11[27] Fourth, in practice, it is not possible for the appellant to know with which potentialcustomers he is prohibited from doing business. The scope of the category of customersthat the appellant is prohibited from dealing with during the one year operation of therestriction is “any business entity which was a customer of the Company during theperiod in which [he] was an employee of the Company.”[28] The appellant was an employee for 17 years. The company has world-wide2011 ONCA 344 (CanLII)operations with customers, many of which also operate in many countries. The restrictionis not limited to the appellant’s own customers over that period, but includes allcustomers of the company during that period. As the application judge found, theappellant neither knows nor has he any access to a list of all of the company’s customers,a list which is very large. Therefore, the appellant has no way to know whether anyparticular potential contact he may wish to make, either is or was during the last 17 years,a customer of the company.[29] In oral argument, counsel suggested that in practice, the appellant could contactthe company and vet with it any potential customer he was contemplating contacting, andthe company could advise if that contact is on the prohibited list, and further whether thecompany would be willing to allow him to contact the customer in any event. On furtherdiscussion, it was acknowledged that this suggestion would be unworkable for theappellant, nor is it realistic where the parties are in ongoing litigation. In any event, thereis no legal basis for it in the agreement itself.

Page: 12[30] Effectively, because the appellant cannot know which potential customers are offlimitsto him, he is prohibited for one year from dealing with any business that may havebeen a customer of the company. The restriction is therefore not only ambiguous in itspractical implementation, but effectively prohibits the appellant from competing with therespondent for one year.[31] After conducting the balancing process between the rights of the respondent to2011 ONCA 344 (CanLII)protect its trade secrets and customer information, and the public interest in free and opencompetition, in the context of the agreement as a whole and the role of the appellant inthe company as a salesman, I conclude that the complete prohibition on competition forone year is overly broad as well as unworkable in practice and makes the restrictivecovenant unreasonable and unenforceable.Clean Hands[32] The parties both addressed the “clean hands” issue in their factums, but not in oralargument. After the application was brought, the appellant moved for an order strikingout portions of affidavits filed by the respondent. The respondent resisted the ordersought on several grounds and alleged that the appellant had not come to court with“clean hands”. In an endorsement dated December 17, 2009, Gray J. found that theconduct alleged by the respondent did not disclose “any lack of clean hands on the part ofthe [appellant]”. He held that “[t]he fact that the applicant is engaging in activities thatare arguably contrary to the restrictive covenant is of no moment. If the restrictive

Page: 13covenant is invalid, the applicant is free to engage in those activities. If it is valid, therespondent has remedies” (para. 8).[33] The application judge did not appear to make a finding of “unclean hands” on thepart of the appellant. In any event, the application in this matter was not one for equitablerelief but for a declaration regarding the enforceability of the restrictive covenant.RESULT2011 ONCA 344 (CanLII)[34] I would allow the appeal and grant a declaration that the restrictive covenant isunreasonable and therefore unenforceable by the respondent. I would grant costs of theappeal to the appellant fixed at $25,000 inclusive of disbursements and HST.[35] The respondent brought a motion seeking leave to appeal the costs endorsement ofthe application judge, dated February 8, 2011, and seeking higher costs of the application.In light of the success of the appellant on the appeal, the motion is dismissed. If theparties cannot agree on the amount and disposition of the costs of the application, theymay make brief (2 pages each) written submissions to the court within two weeks ofrelease of these reasons.Signed:“K. Feldman J.A.”“I agree Doherty J.A.”“I agree M.J. Moldaver J.A.”RELEASED: “HD” MAY 3, 2011

SUPREME COURT OF NOVA SCOTIACitation: Nichol v. Royal Canadian Legion, Branch 138 Ashby, 2011 NSSC 210Between:Henry Nicholv.Date: 20110601Docket: Syd. No. 284735Registry: SydneyPlaintiff2011 NSSC 210 (CanLII)Royal Canadian Legion, Branch 138 AshbyDefendantDECISION ON COSTS, DISBURSEMENTS ANDPRE-JUDGMENT INTERESTJudge:The Honourable Justice Cindy A. BourgeoisHeard:February 8, 9, 10, April 8, 2011, in Sydney, Nova ScotiaWritten Decision: June 1, 2011Counsel:Alan Stanwick, for the plaintiffChristopher Conohan, for the defendant

Page: 2By the Court:[1] In a decision released April 12, 2011 (reported 2011 NSSC 144), the claimadvanced by the Plaintiff alleging defamation was allowed. General damages of$45,000.00 were awarded to the Plaintiff. At the conclusion of the decision, theCourt requested written submissions from Counsel in relation to costs to be2011 NSSC 210 (CanLII)awarded. Both parties have made their respective positions known to the Court.Pre-judgment Interest:[2] The Plaintiff is seeking pre-judgment interest on the general damagesawarded from the date of the cause of action to the date of the Court's decision. Itis further submitted that based upon the principles enunciated in Bush v. AirCanada (1992), 109 N.S.R. (2d) 91 (A.D.), that the Court should apply interest atthe rate of 2.5%, or alternately 3%, if inflation was not considered in quantifyingthe general damages.[3] The Court is mindful of the provisions of the Judicature Act, R.S.N.S.1989, c. 240 which mandates an award of pre-judgment interest as follows:

Page: 341. In every proceeding commenced in the Court, law andequity shall be administered therein according to the followingprovisions:(i) in any proceeding for the recovery of any debt ordamages, the Court shall include in the sum for whichjudgment is to be given interest thereon at such rate as itthinks fit for the period between the date when the causeof action arose and the date of judgment after trial orafter any subsequent appeal;2011 NSSC 210 (CanLII)[4] However, the above provision should also be read in conjunction withSection 41(k), which provides:(k) the Court in its discretion may decline to award interestunder clause (i) or may reduce the rate of interest or the periodfor which it is awarded if(i) interest is payable as of right by virtue of anagreement or otherwise by law,(ii) the claimant has not during the whole of thepre-judgment period been deprived of the use of moneynow being awarded, or(iii) the claimant has been responsible for undue delay inthe litigation.[5] In the present instance, the acts for which the Plaintiff was able tosuccessfully establish defamation occurred in September of 2003. The OriginatingNotice and Statement of Claim was filed on August 23, 2007 and subsequentlyamended on February 7, 2008. A Request for Date Assignment Conference was

Page: 4filed by the Plaintiff on June 19, 2009. By virtue of the resulting Conference, trialdates were set for September 28, 29, 30, and October 1, 2010.[6] Given the Plaintiff was seriously ill the week of the scheduled trial, thematter was adjourned and re-scheduled. It was ultimately heard over three days,February 8, 9, and 10, 2011, with brief oral submissions being heard on April 8,2011 NSSC 210 (CanLII)2011.[7] Other than the adjournment of the original trial dates due to the Plaintiffbeing ill, there was nothing before the Court, either in terms of the Court file or thenature of the evidence called at trial, which would account for this matter taking inexcess of 7 years to advance to trial. The cause of action crystallized in Septemberof 2003. There would be little time required to appropriately appreciate the natureof the Plaintiff's damages. The factual circumstances giving rise to the action werenot complex, nor difficult for the parties to ascertain in a relatively speedy fashion.The Court is aware from the evidence, that the Plaintiff was in 2006 untilmid-2007, involved along with the Defendant, in a dispute before the LabourStandards Tribunal, however, this should not have accounted for, given the natureof this case, the extent of the delay.

Page: 5[8] There is ample case authority to permit the Court to limit the amount of timefor which pre-judgment interest may be awarded ( Thomas-Canning v. Juteau(1993), 122 N.S.R. (2d) (S.C.); Terry v. Lombardo (1998), 167 N.S.R. (2d) 365(S.C.) ). I believe that in the circumstances of this case, it is appropriate to exercisemy discretion to limit the award of pre-judgment interest to 4 years. As inflation2011 NSSC 210 (CanLII)was not a factor considered in reaching the general damages awarded, anappropriate rate of interest is 3%.[9] Based on the above, the Plaintiff is entitled to pre-judgment interest in theamount of $5400.00.Costs:[10] Costs to be awarded in this matter are governed in my view by Rule 77.06(1)of the Nova Scotia Civil Procedure Rules (2009), which reads:77.06(1) Party and party costs of a proceeding must, unless ajudge orders otherwise, be fixed by the judge in accordancewith tariffs of costs and fees determined under the Costs andFees Act, a copy of which is reproduced at the end of this Rule77.

Page: 6[11] The Court sees no reason to vary from Tariff A, which both parties appear toagree is applicable. The appropriate "amount involved" is $45,000.00, and basedon the nature of the proceeding, Scale 2 should apply. Accordingly, "base" costsof $7250.00 result, with an additional $6000.00 being added, reflective of threedays of trial time.2011 NSSC 210 (CanLII)[12] The Plaintiff is entitled to costs of $13, 250.00.Disbursements:[13] In his written submissions, Counsel for the Plaintiff has claimed Court filingfees, photocopying expenses and fax charges. The Court has been providedreceipts for the filing fees, as well as two receipts from a commercial copyingprovider, which include not only the cost of photocopies, but appears to alsoinclude charges for tabs and binding services.[14] Although modest, there is little explanation as to the necessity of thephotocopying. There is no explanation as to the necessity of the faxing charges,nor supporting documentation. The Court is satisfied that it is appropriate that

Page: 7some amount be awarded for photocopy expenses, but "actual cost" is rarely foundto be appropriate (Purdy v. Morash, 2010 NSSC 362).[15] The Plaintiff shall be entitled to disbursements in the amount of $250.65comprised as follows:Filing fees $186.902011 NSSC 210 (CanLII)Law stamp $ 28.75Photocopies $ 35.00Conclusion:[16] The Plaintiff is entitled, as against the Defendant, costs of $13,250.00,prejudgment interest of $5400.00, and allowable disbursements of $250.65.J.

SUPREME COURT OF CANADACITATION: Ontario (Attorney General) v. Fraser, 2011 SCC 20 DATE: 20110429DOCKET: 32968BETWEEN:Attorney General of OntarioAppellantandMichael J. Fraser on his own behalf and on behalf of theUnited Food and Commercial Workers Union Canada,Xin Yuan Liu, Julia McGorman and Billie-Jo ChurchRespondents- and -Attorney General of Canada, Attorney General of Quebec,Attorney General of New Brunswick, Attorney General of British Columbia,Attorney General of Alberta, Ontario Federation of Agriculture,Federally Regulated Employers — Transportation and Communications,Conseil du patronat du Québec Inc., Mounted Police Members’ Legal Fund,Canadian Employers Council, Coalition of BC Businesses,British Columbia Agriculture Council, Justicia for Migrant Workers,Industrial Accident Victims Group of Ontario, Canadian Labour Congress,Canadian Police Association and Canadian Civil Liberties AssociationInterveners2011 SCC 20 (CanLII)CORAM: McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein andCromwell JJ.REASONS FOR JUDGMENT:(paras. 1 to 118):REASONS CONCURRING IN THERESULT (paras. 119 to 296):REASONS CONCURRING IN THERESULT (paras. 297 to 320):DISSENTING REASONS(paras. 321 to 369):McLachlin C.J. and LeBel J. (Binnie, Fish and Cromwell JJ.concurring)Rothstein J. (Charron J. concurring)Deschamps J.Abella J.

NOTE: This document is subject to editorial revision before its reproduction in final form in theCanada Supreme Court Reports.2011 SCC 20 (CanLII)

ONTARIO (A.G.) v. FRASERAttorney General of Ontariov.Michael J. Fraser on his own behalf and on behalf of theUnited Food and Commercial Workers Union Canada,Xin Yuan Liu, Julia McGorman and Billie-Jo ChurchAppellantRespondents2011 SCC 20 (CanLII)andAttorney General of Canada,Attorney General of Quebec,Attorney General of New Brunswick,Attorney General of British Columbia,Attorney General of Alberta,Ontario Federation of Agriculture,Federally Regulated Employers — Transportation and Communications,Conseil du patronat du Québec Inc.,Mounted Police Members’ Legal Fund,Canadian Employers Council,Coalition of BC Businesses, British Columbia Agriculture Council,Justicia for Migrant Workers, Industrial Accident Victims Group of Ontario,Canadian Labour Congress,Canadian Police Association andCanadian Civil Liberties AssociationIntervenersIndexed as: Ontario (Attorney General) v. Fraser

2011 SCC 20File No.: 32968.2009: December 17; 2011: April 29.2011 SCC 20 (CanLII)Present: McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein andCromwell JJ.ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIOConstitutional law ― Charter of Rights ― Freedom of association ― Collectivebargaining rights ― Separate labour relations legislation governing agricultural workers inOntario ― Whether s. 2(d) requires legislature to provide a particular form of collectivebargaining rights to agricultural workers, in order to secure effective exercise of associationalrights ― If so, whether legislation infringes freedom of association by failing to safeguard theexercise of collective bargaining rights ― Whether infringement justifiable ― CanadianCharter of Rights and Freedoms, ss. 1, 2(d) ― Agricultural Employees Protection Act, 2002,S.O. 2002, c. 16 ― Labour Relations Act, 1995, S.O. 1995, c. 1, Sched. A, s. 3(b.1).Constitutional law ― Charter of Rights ― Equality rights ― Separate labourrelations legislation governing agricultural workers in Ontario ― Whether the AEPA violatesworkers’ right to equality under s. 15 of the Charter by excluding workers from the protections

accorded to workers in other sector ― If so, whether infringement justifiable ― CanadianCharter of Rights and Freedoms, ss. 1, 15 ― Agricultural Employees Protection Act, 2002, S.O.2002, c. 16 ― Labour Relations Act, 1995, S.O. 1995, c. 1, Sched. A, s. 3(b.1).In 2002, the Ontario legislature enacted the Agricultural Employees Protection Act,2002 (“AEPA”) which excluded farm workers from the Labour Relations Act (“LRA”), butcrafted a separate labour relations regime for farm workers. The AEPA was a response to2011 SCC 20 (CanLII)Dunmore v. Ontario (Attorney General), 2001 SCC 94, [2001] 3 S.C.R. 1016, which found thatthe previous legislative scheme violated s. 2(d) of the Canadian Charter of Rights and Freedomsand declared it constitutionally invalid. It grants farm workers the rights to form and join anemployees’ association, to participate in its activities, to assemble, to make representations totheir employers through their association on their terms and conditions of employment, and theright to be protected against interference, coercion and discrimination in the exercise of theirrights. The employer must give an association the opportunity to make representationsrespecting terms and conditions of employment, and it must listen to those representations orread them. The AEPA tasks a tribunal with hearing and deciding disputes about the applicationof the Act.After limited efforts to use the new protections under the AEPA, a constitutionalchallenge was mounted on the basis the Act infringed farm workers’ rights under ss. 2(d) and 15of the Charter by failing to provide effective protection for the right to organize and bargaincollectively and by excluding farm workers from the protections accorded to workers in othersectors. In 2006, the Ontario Superior Court dismissed the application. The Court of Appeal

allowed the appeal and declared the AEPA to be constitutionally invalid. It rendered its decisionafter the release of Health Services and Support — Facilities Subsector Bargaining Assn. v.British Columbia, 2007 SCC 27, [2007] 2 S.C.R. 391.Held (Abella J. dissenting): The appeal should be allowed and the action dismissed.Per McLachlin C.J. and LeBel, Binnie, Fish and Cromwell JJ.: Section 2(d) of the2011 SCC 20 (CanLII)Charter protects the right to associate to achieve collective goals. This requires a process ofengagement that permits employee associations to make representations to employers, whichemployers must consider and discuss in good faith. Laws or state actions that substantiallyinterfere with the ability to achieve workplace goals through collective actions have the effect ofnegating the right of free association and therefore constitute a limit on the s. 2(d) right of freeassociation, which renders the law or action unconstitutional unless justified under s. 1 of theCharter.Bargaining activities protected by s. 2(d) in the labour relations context include goodfaith bargaining on important workplace issues. It requires both employer and employees tomeet and to bargain in good faith, in the pursuit of a common goal of peaceful and productiveaccommodation. Good faith negotiation under s. 2(d) requires the parties to meet and engage inmeaningful dialogue; it does not impose a particular process; it does not require the parties toconclude an agreement or accept any particular terms; it does not guarantee a legislated disputeresolution mechanism in the case of an impasse; and it protects only the right to a generalprocess of collective bargaining, not to a particular model of labour relations, nor to a specific

argaining method. What s. 2(d) guarantees in the labour relations context is a meaningfulprocess.The decision in Health Services follows directly from the principles enunciated inDunmore. Section 2(d), interpreted purposively and in light of Canada’s values andcommitments, protects associational collective activity in furtherance of workplace goals. Theright is not merely a paper right, but a right to a process that permits meaningful pursuit of those2011 SCC 20 (CanLII)goals. The principles within Dunmore and Health Services, represent good law, should not beoverturned and provide resolution in this appeal.The seriousness of overturning recent precedents of this Court, representing theconsidered views of firm majorities, cannot be overstated. The arguments advanced in favour ofoverturning Health Services do not meet the high threshold for reversing a precedent of thisCourt as it is grounded in precedent, consistent with Canadian values, consistent with Canada’sinternational commitments and consistent with this Court’s purposive and generousinterpretation of other Charter guarantees. Health Services was consistent with previous caseson the issue of individual and collective rights. It recognized, as did previous jurisprudence, thats. 2(d) is an individual right. It also recognized, as did previous cases, that to meaningfullyuphold this individual right, s. 2(d) may properly require legislative protection of group orcollective activities. The approach to deference to Parliament and legislatures advanced inHealth Services is also consistent with this Court’s general jurisprudence. Deference shouldinform the determination of whether a legislative scheme satisfies the requirements of theCharter, as articulated by the courts. The unworkability of Health Services has not been

established. There is no concrete evidence that the principles enunciated in Dunmore and HealthServices are unworkable or have led to intolerable results. It is premature to argue that theholding in Health Services, rendered four years ago, is unworkable in practice.The Ontario legislature is not required to provide a particular form of collectivebargaining rights to agricultural workers, in order to secure the effective exercise of theirassociational rights. In this case, the Court of Appeal has overstated the ambit of the s. 2(d)2011 SCC 20 (CanLII)right. The affirmation of the right to collective bargaining is not an affirmation of a particulartype of collective bargaining, such as the Wagner model which is dominant in Canada. Whats. 2(d) protects is the right to associate to achieve collective goals. Laws or government actionthat substantially interferes with the ability to achieve collective goals have the effect of limitingfreedom of association, by making it pointless. It is in this derivative sense that s. 2(d) protects aright to collective bargaining. Legislatures are not constitutionally required, in all cases and forall industries, to enact laws that set up a uniform model of labour relations imposing a statutoryduty to bargain in good faith, statutory recognition of the principles of exclusive majorityrepresentation and a statutory mechanism for resolving bargaining impasses and disputesregarding the interpretation or administration of collective agreements. What is protected isassociational activity, not a particular process or result.Farm workers in Ontario are entitled to meaningful processes by which they canpursue workplace goals. The right of an employees’ association to make representations to theemployer and have its views considered in good faith is a derivative right under s. 2(d) of theCharter, necessary to meaningful exercise of the right to free association. The AEPA provides a

process that satisfies this constitutional requirement. Under the AEPA, the right of employees’associations to make representations to their employers is set out in s. 5 and provides that theemployer shall listen to oral representations, and read written representations, and acknowledgehaving read them.The AEPA does not expressly refer to a requirement that the employer consideremployee representations in good faith; however, by implication, it includes such a requirement.2011 SCC 20 (CanLII)Any ambiguity in s. 5 should be resolved by interpreting it as imposing a duty on agriculturalemployers to consider employee representations in good faith, as a statute should be interpretedin a way that gives meaning and purpose to its provisions and Parliament and legislatures arepresumed to intend to comply with the Charter. There can only be one purpose for requiring theemployer to listen to or read employee representations — to assure that the employer will in factconsider the employee representations. No labour relations purpose is served merely by proforma listening or reading. To fulfill the purpose of reading or listening, the employer mustconsider the submission. Moreover, the employer must do so in good faith: consideration with aclosed mind would render listening or reading the submission pointless. Comments made in theLegislature during the debate on this legislation that the AEPA was not intended to extendcollective bargaining to agricultural workers may be understood as an affirmation that the Actdid not institute the dominant Wagner model of collective bargaining, or bring agriculturalworkers within the ambit of the LRA, not that the AEPA intended to deprive farm workers of theprotections of collective bargaining that s. 2(d) grants. The AEPA does not breach s. 2(d) of theCharter.

Section 5 of the AEPA, correctly interpreted, protects not only the right of employeesto make submissions to employers on workplace matters, but also the right to have thosesubmissions considered in good faith by the employer. It follows that s. 5 of the AEPA does notviolate s. 2(d) of the Charter. The AEPA contemplates a meaningful exercise of the right ofassociation, and provides a tribunal for the resolution of disputes. Section 11 of the AEPAspecifically empowers the Tribunal to make a determination that there has been a contravention2011 SCC 20 (CanLII)of the Act, and to grant an order or remedy with respect to that contravention. The Tribunal maybe expected to interpret its powers, in accordance with its mandate, purposively, in an effectiveand meaningful way. Labour tribunals enjoy substantial latitude when applying their constituentstatutes to the facts of a given case.It is unnecessary to consider the s. 1 arguments. The s. 15 discrimination claim, likethe s. 2(d) claim, cannot succeed. It is clear that the regime established by the AEPA does notprovide all the protections that the LRA extends to many other workers. However, a formallegislative distinction does not establish discrimination under s. 15. What s. 15 contemplates issubstantive discrimination, that impacts on individuals stereotypically or in ways that reinforceexisting prejudice and disadvantage. The AEPA provides a special labour regime for agriculturalworkers. However, on the record, it has not been established that the regime utilizes unfairstereotypes or perpetuates existing prejudice and disadvantage. Until the regime established bythe AEPA is tested, it cannot be known whether it inappropriately disadvantages farm workers.The claim is premature.

Per Charron and Rothstein JJ.: Section 2(d) protects the liberty of individuals toassociate and engage in associational activities. It protects the freedom of workers to cometogether, to form a bargaining position and to present a common and united front to theiremployers. It does not protect a right to collective bargaining nor does it impose duties onothers, such as the duty to bargain in good faith on employers. To the extent that Health Servicesconstitutionalized collective bargaining, it was not correctly decided. It should be overturned2011 SCC 20 (CanLII)thus disposing of the constitutional challenge in this case.This Court may overrule its own precedents, but it should only do so where there arecompelling reasons. The question in every case involves a balancing: Do the reasons in favourof following a precedent ― such as certainty, consistency, predictability and institutionallegitimacy ― outweigh the need to overturn a precedent that is sufficiently wrong? In this case,compelling reasons exist for overturning Health Services: the error in Health Services concernsa question of constitutional law and is not susceptible to being corrected in a lasting way by thelegislative branch; Health Services strayed significantly from other sound precedents, includingDunmore, with respect to the purpose of Charter protection for freedom of association; theconstitutionalization of collective bargaining, as envisaged in Health Services is not workablewithout other elements of modern labour legislation in place; and there has been intenseacademic criticism of Health Services.Health Services was an express break with prior decisions of this Court on s. 2(d),including Dunmore. This break came when the majority of the Court found that s. 2(d) requiredthat government legislate to facilitate collective goals which an association was formed to

pursue, rather than protecting the freedom of association itself. In Dunmore, the requirementthat government provide legislation to protect workers was anchored in the proposition thatcertain workers could not associate without government intervention. The majority in HealthServices focussed on the goals of an association and the enhancement of those goals, rather thanthe ability of the claimants to associate (which they already had done). An application of theactual holding in Dunmore would have asked only if the government substantially interfered2011 SCC 20 (CanLII)with the ability to associate.Health Services erred in concluding that s. 2(d) protects collective bargaining andobliges parties to bargain in good faith for five reasons. First, Health Services departed fromsound principles established in this Court’s precedents on the nature and scope of s. 2(d). Thepurpose of s. 2(d) is to protect individuals rather than groups per se. Health Servicesreinterpreted an individual freedom as giving rise to collective rights with no individual rightsfoundation. This reinterpretation of the scope of s. 2(d) was a departure from previousjurisprudence that is not justified by the purpose of the Charter guarantee.Second, s. 2(d) protects freedoms not rights. According to Health Services, if s. 2(d)protected only the ability of workers to make collective representations and did not impose aduty on the employer to bargain in good faith, it would fail to protect the right to collectivebargaining. This proposition transformed s. 2(d) from a freedom into a positive right byimposing an obligation to act on third parties (i.e. the employer). A right to collective bargainingis also not derivative of a freedom ― it is a standalone right created by the Court, not by theCharter. A derivative right is one that is necessary to allow individuals to exercise a

fundamental freedom. No individual employee has a right to require an employer to meet andmake a reasonable effort to arrive at an acceptable employment contract. To grant a right tocollective bargaining under s. 2(d) purportedly as derivative of the freedom of association is notconsistent with the approach taken by this Court in its derivative rights jurisprudence in relationto the Charter.Third, s. 2(d) does not empower the Court to privilege certain associations over2011 SCC 20 (CanLII)others. The Court’s earlier cases did exhibit a content-neutral approach to freedom ofassociation in the sense that they did not claim to privilege particular associations. HealthServices erred in saying that these approaches were not purposive. Health Services suggestedthat a “generic” approach to defining freedom of association is inappropriate because differentgroups must have different freedoms. However, the context that is relevant to a purposiveinterpretation of Charter freedoms is not the context of the individuals who happen to beexercising that freedom in a given case. Rather, a purposive interpretation of s. 2(d) requires thatone place freedom of association in its linguistic, philosophic and historical contexts. Theorigins of the concept, the words used to describe it, and the philosophical principles on which itrelies will define the scope of s. 2(d) protection. The extent of that protection should not changedepending on who is exercising their s. 2(d) rights. The protection of fundamental freedomsshould not involve the Court adjudicating the relative values of the way in which individualsexercise those freedoms. Just as this Court has not adjudicated the relative value of a religion orits tenets under s. 2(a) or assessed the relative value or content of a given exercise of freedom of

expression under s. 2(b), so too should this Court not privilege some associations over othersunder s. 2(d).Fourth, s. 2(d) does not afford constitutional protection to contracts. AlthoughHealth Services purported to constitutionalize the process of collective bargaining rather than itsfruits, it in fact granted constitutional protection to the collective agreements on the basis thatthey were the fruits of that process.2011 SCC 20 (CanLII)Fifth, s. 2(d) should be interpreted in such a way as to afford deference to thelegislative branch in the field of labour relations. Health Services erred in removingdecision-making power on this question from Parliament and the provincial legislatures. Whilethe courts are responsible for safeguarding the ability of individuals to do collectively that whichthey have the right to do as individuals, the judiciary is ill-equipped to engage in fineadjustments to the balance of power between labour and management in the labour relationscontext.Moreover, the reasons advanced in Health Services for extending protection tocollective bargaining under s. 2(d) ― Canadian labour history, Canada’s internationalobligations, and Charter values ― do not support conferring a constitutional right to collectivebargaining and imposing a duty on employers to engage in collective bargaining.The argument that a right to collective bargaining which includes a duty onemployers to bargain in good faith is a pre-statutory feature of Canadian labour law, made in

Health Services, contradicts established accounts of the history of labour relations in Canada andhas recently been the subject of intense academic criticism. While the duty to bargain in goodfaith may be a fundamental precept of the Wagner model of collective bargaining, it is not afundamental precept of collective bargaining as it was understood before introduction of theWagner Act or as it is still understood today in many parts of the world.Nor does international law support constitutionalizing collective bargaining rights.2011 SCC 20 (CanLII)In Health Services, the majority relied on the proposition that collective bargaining is an integralcomponent of the freedom of association under international law. The majority relied inparticular on ILO Convention No. 87. In doing so, it committed two errors. While Canada hasratified ILO Convention No. 87, that Convention deals only with freedom of association anddoes not at any point specifically discuss collective bargaining. The majority also conflated twodistinct ILO Conventions by citing Convention No. 87 but using words from Convention No. 98.Canada has not ratified Convention No. 98 and has no obligations under that Convention. Evenif Convention No. 98 were applicable to Canada, Health Services would still have erred inrelying on that Convention to constitutionalize a version of collective bargaining that includes aduty to bargain in good faith. While Convention No. 98 provides protection for a process ofcollective bargaining, it conceives of collective bargaining as being a process of “voluntarynegotiation” that is fundamentally distinct from the model of collective bargaining incorporatedin the Wagner model. Convention No. 98 does not contemplate the imposition of a duty onparties to bargain in good faith.

Nor did invoking Charter values in Health Services support constitutionalizingcollective bargaining rights. Health Services maintained that the recognition of a good faithcollective bargaining right is consistent with and promotes other Charter rights, freedoms andvalues: namely, human dignity, equality, liberty, respect for the autonomy of the person and theenhancement of democracy. A duty to bargain in good faith may achieve those ends. However,either the Charter requires something or it does not. The role of the Court is to determine what2011 SCC 20 (CanLII)the Charter requires and what it does not and then apply the requirements it finds to the casebefore it. It is not to simply promote, as much as possible, values that some subjectively thinkunderpin the Charter in a general sense. As s. 2(d) is silent on questions of economic and socialpolicy, this Court may not intervene on such matters in the absence of a legislative orconstitutional grant of authority.Finally, the majority’s approach to collective bargaining in particular and s. 2(d) ingeneral articulated in Health Services is unworkable. It extends constitutional protection to theduty to bargain in good faith without importing other aspects of the Wagner framework and bypurporting to protect the process of collective bargaining without also protecting its fruits,neither of which is tenable. For a duty to bargain in good faith not to be an illusory benefit, theremust be both a way of dealing with bargaining impasses as well as an effective remedy forpersistent breaches of a duty to bargain in good faith. The first requires that there be somedefault mechanism for resolving the dispute in case an impasse is reached — such as striking orbinding arbitration — while the second may require, in extreme circumstances, the imposition byan arbitrator of particular terms of a collective agreement. Each of these goes well beyond

protection of a mere process and results in the protection of a particular substantive outcome.The majority’s inability to separate substance and process, and the consequentconstitutionalization of collective bargaining terms demonstrates the unworkability of thedistinction between substance and process asserted in Health Services.The AEPA does not violate s. 2(d) of the Charter. By enacting the AEPA, thelegislature precisely addressed this Court’s ruling in Dunmore. The text, context and purpose of2011 SCC 20 (CanLII)the AEPA clearly demonstrates that the legislature intentionally opted not to include a duty onemployers to engage in collective bargaining with employee associations. Section 5 of the AEPAcannot be read as imposing a duty to bargain in good faith. The words of s. 5 are unambiguous:they provide employee associations the opportunity to make representations to an employer. Theonly obligation on an employer is to provide the employee association with the opportunity tomake representations and to listen if they are oral or read and acknowledge them if they arewritten. To find otherwise, would be to ignore the grammatical and ordinary meaning of thewords, and the purpose of the AEPA, and would create ambiguity where none exists. Moreover,nothing in the explicit purpose in s. 1 of the AEPA or the clear words of the Minister whointroduced the AEPA support the view that agricultural employees have a right to requireagricultural employers to engage in collective bargaining.As for the issues under s. 15, the category of agricultural worker does not rise to thelevel of an immutable (or constructively immutable) personal characteristic of the sort that wouldmerit protection against discrimination under s. 15.

Per Deschamps J.: The holding in Health Services does not have the broad scopebeing attributed to it by the majority in the case at bar. The issue here is not, whether the AEPAprovides a process that satisfies the right of an employees’ association to make representations tothe employer and have its views considered in good faith. The duty to act in good faith is partand parcel of a web of statutory components. It should not be found to be a constitutionalrequirement in the instant case. The expanded definition of freedom of association that resulted2011 SCC 20 (CanLII)from Health Services has no bearing on the protection the Ontario legislature must provide toagricultural workers.The effect of Health Services is that freedom of association includes the freedom toengage in associational activities and the ability of employees to act in common to reach sharedgoals related to workplace issues and terms of employment. This delineation of the scope offreedom of association does not entail a more expansive protection than the legislativeframework mandated by Dunmore for the agricultural workers. The AEPA complies with thisCourt’s conclusion in Dunmore and it complies with the Charter.Even though labour law provides tools that help reduce economic inequality, not allaspects of labour law are protected by the Charter. Economic equality is not an “equality right”for the purposes of s. 15 of the Charter. Dunmore was based on the notion that the Charter doesnot ordinarily oblige the government to take action to facilitate the exercise of a fundamentalfreedom. Recognition was given to the dichotomy between positive and negative rights. To getaround the general rule, a framework was established for cases in which the vulnerability of agroup justified resorting to government support.

To redress economic inequality, it would be more faithful to the design of theCharter to open the door to the recognition of more analogous grounds under s. 15. EachCharter protection should not be interpreted in a formalistic manner. Rather, if the law needs tomove away from Dunmore’s distinction between positive and negative rights, this should not beaccomplished by conflating freedom of association with the right to equality or any otherCharter right that may be asserted by a litigant. An analysis based on principles grounding the2011 SCC 20 (CanLII)protection of rights and freedoms offers a better prospect of judicial consistency than one basedon the more amorphous notion of “Canadian values”.Per Abella J. (dissenting): The AEPA violates s. 2(d) of the Charter because it doesnot protect, and was never intended to protect, collective bargaining rights. The AEPA, enactedin 2002, was the government’s good faith implementation of this Court’s 2001 decision inDunmore, which defined the scope of s. 2(d) as being the right to organize and makerepresentations. Health Services, decided in 2007, expanded that scope to include protection fora process of collective bargaining, including the duty to consult and negotiate in good faith. Theapplicable legal principles are therefore those set out in Health Services and the AEPA must beassessed against the revised constitutional standard.The AEPA has virtually no language that indicates protection for a process ofcollective bargaining. It requires only that an employer “listen” if representations are madeorally, or, if made in writing, “acknowledge” that the representations have been read. Noresponse, discussions, or negotiations are required. Moreover, when the legislation wasintroduced, the government’s intention to exclude any protection for collective bargaining rights

from the legislation was unequivocally expressed by the Minister of Agriculture and Food. Thisclarity of statutory language and legislative intent cannot be converted by the interpretive processinto a completely different scheme.For agricultural workers, the meaningful exercise of the right to collectivebargaining requires two additional components. The first is a statutory enforcement mechanismwith a mandate to resolve bargaining disputes. Since it is not a contravention of the AEPA to2011 SCC 20 (CanLII)refuse to engage in a good faith process to make reasonable efforts to arrive at a collectiveagreement, the Tribunal is without jurisdiction to grant a remedy for any violations of s. 2(d)rights. The second essential element is a requirement that the employer bargain only with therepresentative selected by a majority of the employees in the bargaining unit. This concept,known as majoritarian exclusivity, has been a central and defining principle of labour relations inCanada since 1944. Given the singular employment disadvantage of agricultural workers, theabsence of statutory protection for exclusivity effectively nullifies the ability of agriculturalworkers to have a unified and therefore more cogent voice in attempting to mitigate andameliorate their working conditions.The absence of these statutory protections cannot be justified under s. 1 of theCharter. The objectives of the rights limitation — the failure to provide agricultural workerswith the necessary statutory protections to exercise the right to bargain collectively — were toprotect the family farm and farm production/viability. The minimal impairment branch of theOakes test is determinative in this case. The complete absence of any statutory protection for aprocess of collective bargaining in the AEPA cannot be said to be minimally impairing of the

s. 2(d) right. The rights limitation is not even remotely tailored to either government objective; itis, in fact, not tailored at all. Preventing all agricultural workers from access to a process ofcollective bargaining in order to protect family farms, no matter their size or nature of theagricultural enterprise, harms the s. 2(d) right in its entirety, not minimally. It is worth notingtoo that all provinces except Alberta give agricultural workers the same collective bargainingrights as other employees. There is no evidence that this has harmed the economic viability of2011 SCC 20 (CanLII)farming in those provinces, or that the nature of farming in Ontario uniquely justifies a severelyrestrictive rights approach.Cases CitedBy McLachlin C.J. and LeBel J.Applied: Dunmore v. Ontario (Attorney General), 2001 SCC 94, [2001] 3 S.C.R.1016; Health Services and Support — Facilities Subsector Bargaining Assn. v. British Columbia,2007 SCC 27, [2007] 2 S.C.R. 391; referred to: Reference re Public Service EmployeeRelations Act (Alta.), [1987] 1 S.C.R. 313; PSAC v. Canada, [1987] 1 S.C.R. 424; RWDSU v.Saskatchewan, [1987] 1 S.C.R. 460; Professional Institute of the Public Service of Canada v.Northwest Territories (Commissioner), [1990] 2 S.C.R. 367; Delisle v. Canada (Deputy AttorneyGeneral), [1999] 2 S.C.R. 989; Ontario (Public Safety and Security) v. Criminal Lawyers’Association, 2010 SCC 23, [2010] 1 S.C.R. 815; R v. Henry, 2005 SCC 76, [2005] 3 S.C.R. 609;Haig v. Canada, [1993] 2 S.C.R. 995; Charkaoui v. Canada (Citizenship and Immigration), 2007SCC 9, [2007] 1 S.C.R. 350; Vriend v. Alberta, [1998] 1 S.C.R. 493; U.F.C.W., Local 1518 v.

KMart Canada Ltd., [1999] 2 S.C.R. 1083; Nova Scotia (Workers’ Compensation Board) v.Martin, 2003 SCC 54, [2003] 2 S.C.R. 504; R. v. Advance Cutting & Coring Ltd., 2001 SCC 70,[2001] 3 S.C.R. 209; R. v. Mannion, [1986] 2 S.C.R. 272; Slaight Communications Inc. v.Davidson, [1989] 1 S.C.R. 1038; R. v. Sharpe, 2001 SCC 2, [2001] 1 S.C.R. 45; Adams Mine,Cliffs of Canada Ltd. v. United Steelworkers of America (1982), 1 C.L.R.B.R. (N.S.) 384;Andrews v. Law Society of British Columbia, [1989] 1 S.C.R. 143; R. v. Kapp, 2008 SCC 41,2011 SCC 20 (CanLII)[2008] 2 S.C.R. 483.By Rothstein J.Applied: Dunmore v. Ontario (Attorney General), 2001 SCC 94, [2001] 3 S.C.R.1016; not followed: Health Services and Support — Facilities Subsector Bargaining Assn. v.British Columbia, 2007 SCC 27, [2007] 2 S.C.R. 391; referred to: R. v. Bernard, [1988] 2S.C.R. 833; R. v. Chaulk, [1990] 3 S.C.R. 1303; R. v. B. (K.G.), [1993] 1 S.C.R. 740; R. v.Robinson, [1996] 1 S.C.R. 683; R. v. Salituro, [1991] 3 S.C.R. 654; Hamstra (Guardian ad litemof) v. British Columbia Rugby Union, [1997] 1 S.C.R. 1092; R. v. Henry, 2005 SCC 76, [2005] 3S.C.R. 609; Queensland v. Commonwealth (1997), 139 C.L.R. 585; Planned Parenthood ofSoutheastern Pennsylvania v. Casey, 505 U.S. 833 (1992); Adarand Constructors, Inc. v. Pena,515 U.S. 200 (1995); Reference Re Public Service Employee Relations Act (Alta.), [1987] 1S.C.R. 313; PSAC v. Canada, [1987] 1 S.C.R. 424; RWDSU v. Saskatchewan, [1987] 1 S.C.R.460; Professional Institute of the Public Service of Canada v. Northwest Territories(Commissioner), [1990] 2 S.C.R. 367; Canadian Egg Marketing Agency v. Richardson, [1998] 3S.C.R. 157; Delisle v. Canada (Deputy Attorney General), [1999] 2 S.C.R. 989;

Doucet-Boudreau v. Nova Scotia (Minister of Education), 2003 SCC 62, [2003] 3 S.C.R. 3; R . v.Powley, 2003 SCC 43, [2003] 2 S.C.R. 207; Ontario (Public Safety and Security) v. CriminalLawyers’ Association, 2010 SCC 23, [2010] 1 S.C.R. 815; Canadian Broadcasting Corp. v. NewBrunswick (Attorney General), [1996] 3 S.C.R. 480; R. v. National Post, 2010 SCC 16, [2010] 1S.C.R. 477; R. v. Big M Drug Mart Ltd., [1985] 1 S.C.R. 295; Syndicat Northcrest v. Amselem,2004 SCC 47, [2004] 2 S.C.R. 551; R. v. Advance Cutting & Coring Ltd., 2001 SCC 70, [2001] 32011 SCC 20 (CanLII)S.C.R. 209; Reference re ss. 193 and 195.1(1)(c) of the Criminal Code (Man.), [1990] 1 S.C.R.1123; Lavigne v. Ontario Public Service Employees Union, [1991] 2 S.C.R. 211; Bell ExpressVuLimited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559; Royal Oak Mines Inc. v. Canada(Labour Relations Board), [1996] 1 S.C.R. 369; Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R.27; Liversidge v. Anderson, [1942] A.C. 206.By Deschamps J.Applied: Dunmore v. Ontario (Attorney General), 2001 SCC 94, [2001] 3 S.C.R.1016; discussed: Health Services and Support — Facilities Subsector Bargaining Assn. v.British Columbia, 2007 SCC 27, [2007] 2 S.C.R. 391; referred to: R. v. Advance Cutting &Coring Ltd., 2001 SCC 70, [2001] 3 S.C.R. 209; Delisle v. Canada (Deputy Attorney General),[1999] 2 S.C.R. 989; Vriend v. Alberta, [1998] 1 S.C.R. 493; Greater Vancouver TransportationAuthority v. Canadian Federation of Students — British Columbia Component, 2009 SCC 31,[2009] 2 S.C.R. 295.

By Abella J. (dissenting)Health Services and Support — Facilities Subsector Bargaining Assn. v. BritishColumbia, 2007 SCC 27, [2007] 2 S.C.R. 391; Reference re Public Service Employee RelationsAct (Alta.), [1987] 1 S.C.R. 313; PSAC v. Canada, [1987] 1 S.C.R. 424; RWDSU v.Saskatchewan, [1987] 1 S.C.R. 460; Dunmore v. Ontario (Attorney General), 2001 SCC 94,[2001] 3 S.C.R. 1016; Professional Institute of the Public Service of Canada v. Northwest2011 SCC 20 (CanLII)Territories (Commissioner), [1990] 2 S.C.R. 367; Royal Oak Mines Inc. v. Canada (LabourRelations Board), [1996] 1 S.C.R. 369; U.E.W. and DeVilbiss Ltd., [1976] 2 C.L.R.B.R. 101;Alberta v. Hutterian Brethren of Wilson Colony, 2009 SCC 37, [2009] 2 S.C.R. 567; WellingtonMushroom Farm, [1980] O.L.R.B. Rep. May 813.Statutes and Regulations CitedAct respecting labour relations, vocational training and workforce management in theconstruction industry, R.S.Q., c. R-20.Agricultural Employees Protection Act, 2002, S.O. 2002, c. 16, ss. 1, 2, 5, 7-11.Agricultural Labour Relations Act, 1994, S.O. 1994, c. 6 [rep. 1995, c. 1, s. 80], Preamble, ss. 3,10, 11.Canadian Charter of Rights and Freedoms, ss. 1, 2(a), (b), (d), 7-12, 15, 23, 32, 33.Constitution Act, 1982, ss. 35(1), 52.Industrial Relations Act, R.S.N.B. 1973, c. I-4, s. 1(5)(a).Industrial Relations and Disputes Investigation Act, S.C. 1948, c. 54.Labour Act, R.S.P.E.I. 1988, c. L-1, s. 7.

Labour Code, R.S.Q., c. C-27, s. 21.Labour Relations Act, R.S.M. 1987, c. L10, s. 1.Labour Relations Act, R.S.N.L. 1990, c. L-1, s. 2(1).Labour Relations Act, 1995, S.O. 1995, c. 1, Sched. A, ss. 3(b.1), 17.Labour Relations and Employment Statute Law Amendment Act, 1995, S.O. 1995, c. 1.Labour Relations Code, R.S.A. 2000, c. L-1, s. 4(2)(e).Labour Relations Code, R.S.B.C. 1996, c. 244, s. 1.2011 SCC 20 (CanLII)National Labor Relations Act, 49 Stat. 449 (1935) (codified as amended at 29 U.S.C. §§151-169).Trade Union Act, R.S.N.S. 1989, c. 475, s. 2(1).Trade Union Act, R.S.S. 1978, c. T-17, s. 2.Treaties and Other International InstrumentsConvention (No. 87) concerning freedom of association and protection of the right to organise,68 U.N.T.S. 17.Convention (No. 98) concerning the application of the principles of the right to organise and tobargain collectively, 96 U.N.T.S. 257.International Covenant on Civil and Political Rights, 999 U.N.T.S. 171.International Covenant on Economic, Social and Cultural Rights, 993 U.N.T.S. 3.Authors CitedAdams, George W. Canadian Labour Law, 2nd ed. Aurora, Ont.: Canada Law Book, 1993(loose-leaf updated December 2010, release 37).

Adams, Roy J. “Prospects for Labour’s Right to Bargain Collectively After B.C. HealthServices” (2009), 59 U.N.B.L.J. 85.Bandes, Susan. “The Negative Constitution: A Critique” (1989-1990), 88 Mich. L. Rev. 2271.Barak-Ussoskin, Elisheva (Elika). “Collaboration in the Tripartite System: The Right to beConsulted and the Duty to Consult”, in Armin Höland et al., eds., Employee Involvement ina Globalising World: Liber Amicorum Manfred Weiss. Berlin: BerlinerWissenschafts-Verlag, 2005, 439.Basu, Robin K. “Revolution and Aftermath: B.C. Health Services and Its Implications” (2008),42 S.C.L.R. (2d) 165.2011 SCC 20 (CanLII)Beatty, David, and Steven Kennett. “Striking Back: Fighting Words, Social Protest and PoliticalParticipation in Free and Democratic Societies” (1988), 67 Can. Bar Rev. 573.Beatty, David M. Putting the Charter to Work: Designing a Constitutional Labour Code.Kingston: McGill-Queen’s University Press, 1987.Brunelle, Christian. “La liberté d’association se porte mieux: un commentaire de l’arrêt HealthServices”, dans Conférence des juristes de l’État 2009: XVIII e Conférence. Cowansville,Qué.: Yvon Blais, 2009, 237.Cameron, Jamie. “Due Process, Collective Bargaining, and s. 2(d) of the Charter: A Commenton B.C. Health Services” (2006-2007), 13 C.L.E.L.J. 233.Cameron, Jamie. “The Labour Trilogy’s Last Rites: B.C. Health and a Constitutional Right toStrike” (2009-2010), 15 C.L.E.L.J. 297.Canada. Task Force on Labour Relations. Canadian Industrial Relations: The Report of theTask Force on Labour Relations. Ottawa: Privy Council Office, 1968.Carter, Donald D., et al. Labour Law in Canada, 5th ed. The Hague: Kluwer Law International,2002.Coutu, Michel, Laurence Léa Fontaine et Georges Marceau. Droit des rapports collectifs dutravail au Québec. Cowansville, Qué.: Yvon Blais, 2009.Dau-Schmidt, Kenneth G. “Labor Law and Industrial Peace: A Comparative Analysis of theUnited States, the United Kingdom, Germany, and Japan Under the Bargaining Model”(2000), 8 Tul. J. Int’l & Comp. L. 117.Elliot, Robin. “Developments in Constitutional Law: The 1989-90 Term” (1991), 2 S.C.L.R.(2d) 83.

Etherington, Brian. “The B.C. Health Services and Support Decision — TheConstitutionalization of a Right to Bargain Collectively in Canada: Where Did It ComeFrom and Where Will It Lead?” (2009), 30 Comp. Lab. L. & Pol’y J. 715.Fudge, Judy. “‘Labour is Not a Commodity’: The Supreme Court of Canada and the Freedomof Association” (2004), 67 Sask. L. Rev. 425.Fudge, Judy. “The Supreme Court of Canada and the Right to Bargain Collectively: TheImplications of the Health Services and Support case in Canada and Beyond” (2008), 37Indus. L.J. 25.Fudge, Judy, and Eric Tucker. Labour Before the Law: The Regulation of Workers’ CollectiveAction in Canada, 1900-1948. Don Mills, Ont.: Oxford University Press, 2001.2011 SCC 20 (CanLII)Gall, Peter A. “Freedom of Association and Trade Unions: A Double-Edged ConstitutionalSword”, in Joseph M. Weiler and Robin M. Elliot, eds., Litigating the Values of a Nation:The Canadian Charter of Rights and Freedoms. Toronto: Carswell, 1986, 245.Gernigon, Bernard, Alberto Odero, and Horacio Guido. “ILO principles concerning collectivebargaining” (2000), 139 Intern’l Lab. Rev. 33.Harris, Bruce. “Final Appellate Courts Overruling Their Own ‘Wrong’ Precedents: TheOngoing Search for Principle” (2002), 118 L.Q.R. 408.Hogg, Peter W. Constitutional Law of Canada, 5th ed. Supp., vol. 2. Scarborough, Ont.:Thomson/Carswell, 2007 (updated 2009, release 1).Hogg, Peter W., Allison A. Bushell Thornton and Wade K. Wright. “Charter DialogueRevisited — Or ‘Much Ado About Metaphors’” (2007), 45 Osgoode Hall L.J. 1.Holmes, Stephen, and Cass R. Sunstein. The Cost of Rights: Why Liberty Depends on Taxes.New York: W. W. Norton & Company, 1999.Hutchinson, Allan C., and Andrew Petter. “Private Rights/Public Wrongs: The Liberal Lie ofthe Charter” (1988), 38 U.T.L.J. 278.International Labour Conference. Committee of Experts on the Application of Conventions andRecommendations. Freedom of Association and Collective Bargaining. Geneva:International Labour Office, 1994.International Labour Office. Committee on Freedom of Association. Report No. 330. CaseNos. 2166, 2173, 2180 and 2196 “Complaints against the Government of Canadaconcerning the Province of British Columbia”, I.L.O. Official Bulletin, vol. LXXXVI,2003, Series B, No. 1.

International Labour Organisation. Constitution of the International Labour Organisation,art. 19(5)(e)(online: http://www.ilo.org/public/english/bureau/leg/amend/constitution.pdf).Langille, Brian. “The Freedom of Association Mess: How We Got into It and How We Can Getout of It” (2009), 54 McGill L.J. 177.Langille, Brian. “Why Are Canadian Judges Drafting Labour Codes – And Constitutionalizingthe Wagner Act Model?” (2009-2010), 15 C.L.E.L.J. 101.Langille, Brian A. “Can We Rely on the ILO?” (2006-2007), 13 C.L.E.L.J. 273.Laskin, Bora. “Recent Labour Legislation in Canada” (1944), 22 Can. Bar Rev. 776.2011 SCC 20 (CanLII)Macklem, Patrick. “Developments in Employment Law: The 1990-91 Term” (1992), 3 S.C.L.R.(2d) 227.Ontario. Legislative Assembly. Official Report of Debates (Hansard), No. 43A, 3rd Sess., 37thParl., October 16, 2002.Ontario. Legislative Assembly. Official Report of Debates (Hansard), No. 46A, 3rd Sess., 37thParl., October 22, 2002.Ontario. Task Force on Agricultural Labour Relations. Report to the Minister of Labour.Toronto: The Task Force, 1992.Ontario. Task Force on Agricultural Labour Relations. Second Report to the Minister ofLabour. Toronto: The Task Force, 1992.Parkes, Debra. “Precedent Unbound? Contemporary Approaches to Precedent in Canada”(2006), 32 Man. L.J. 135.Rayner, W. B. Canadian Collective Bargaining Law, 2nd ed. Markham, Ont.: LexisNexis, 2007.Sharpe, Robert J., and Kent Roach. The Charter of Rights and Freedoms, 4th ed. Toronto:Irwin Law, 2009.Sullivan, Ruth. Sullivan and Driedger on the Construction of Statutes, 4th ed. Markham, Ont.:Butterworths, 2002.Summers, Clyde W. “Exclusive Representation: A Comparative Inquiry into a ‘Unique’American Principle” (1998-1999), 20 Comp. Lab. L. & Pol’y J. 47.Tucker, Eric. “The Constitutional Right to Bargain Collectively: The Ironies of Labour Historyin the Supreme Court of Canada” (2008), 61 Labour/Le Travail 151.

Verge, Pierre. “Inclusion du droit de grève dans la liberté générale et constitutionnelled’association: justification et effets” (2009), 50 C. de D. 267.Verge, Pierre. “L’affirmation constitutionnelle de la liberté d’association: une nouvelle vie pourl’autonomie collective?” (2010), 51 C. de D. 353.Verge, Pierre. “La Cour suprême, le ‘droit’ à la négociation collective et le ‘droit’ de grève”(2006), 66 R. du B. 391.Weiler, Paul. Reconcilable Differences: New Directions in Canadian Labour Law. Toronto:Carswell, 1980.2011 SCC 20 (CanLII)APPEAL from a judgment of the Ontario Court of Appeal (Winkler C.J.O. andCronk and Watt JJ.A.), 2008 ONCA 760, 92 O.R. (3d) 481, 301 D.L.R. (4th) 335, 182 C.R.R.(2d) 109, 242 O.A.C. 252, 2009 CLLC 220-001, [2008] O.J. No. 4543 (QL), 2008 CarswellOnt6726, setting aside a decision of Farley J. (2006), 79 O.R. (3d) 219, 263 D.L.R. (4th) 425, 137C.R.R. (2d) 123, 2006 CLLC 220-009, [2006] O.J. No. 45 (QL), 2006 CarswellOnt 55. Appealallowed and action dismissed, Abella J. dissenting.Robin K. Basu and Shannon M. Chace, for the appellant.Paul J. J. Cavalluzzo and Fay C. Faraday, for the respondents.Anne M. Turley, for the intervener the Attorney General of Canada.Quebec.Michel Déom and Geneviève Lessard, for the intervener the Attorney General of

Gaétan Migneault and Michelle Brun-Coughlan, for the intervener the AttorneyGeneral of New Brunswick.Neena Sharma, for the intervener the Attorney General of British Columbia.Roderick S. Wiltshire, for the intervener the Attorney General of Alberta.2011 SCC 20 (CanLII)John D. R. Craig and Jodi Gallagher, for the intervener the Ontario Federation ofAgriculture.Roy L. Heenan and Thomas Brady, for the intervener the Federally RegulatedEmployers — Transportation and Communications.patronat du Québec Inc.Robert Dupont, Pascale Gauthier and Jean H. Lafleur, for the intervener Conseil duLegal Fund.Brad Elberg and Kelly Henriques, for the intervener the Mounted Police Members’Employers Council.Augustus G. Lilly, Q.C., and Stephen F. Penney, for the intervener the Canadian

Peter A. Gall, Q.C., Donald R. Munroe, Q.C., and Andrea L. Zwack, for theinterveners the Coalition of BC Businesses and the British Columbia Agriculture Council.Selwyn A. Pieters and Adrian A. Smith, for the interveners Justicia for MigrantWorkers and the Industrial Accident Victims Group of Ontario.Steven Barrett and Ethan Poskanzer, for the intervener the Canadian Labour2011 SCC 20 (CanLII)Congress.Association.Ian J. Roland and Michael Fenrick, for the intervener the Canadian PoliceLiberties Association.Joshua S. Phillips and Antony Singleton, for the intervener the Canadian Civil

TABLE OF CONTENTSParagraphReasons of McLachlin C.J. and LeBel J. ................................................................................1I. Introduction........................................................................................................................1II. Background........................................................................................................................5A. The Exclusion of the Farming Sector From the LRA and the Impactof Dunmore ........................................................................................................................5B. The Constitutional Challenge to the AEPA .......................................................................7III. Judicial History ................................................................................................................13A. Ontario Superior Court of Justice, 79 O.R. (3d) 219, theApplications Judge...........................................................................................................13B. The Court of Appeal, 2008 ONCA 760, 92 O.R. (3d) 481 (Winkler C.J.O. andCronk and Watt JJ.A.)......................................................................................................15IV. Analysis............................................................................................................................17A. Issues: Does the AEPA Violate Sections 2(d) and 15 of the Charter? ............................17B. Freedom of Association (Section 2(d)) ............................................................................18(1) Freedom of Association in the Labour Context: TheJurisprudential Background .......................................................................................19(a) The Early Cases ...................................................................................................19(b) Dunmore ..............................................................................................................26(c) Health Services: Its Impact..................................................................................34(d) The Issue on This Appeal .....................................................................................44(e) Response to Justice Deschamps...........................................................................49(f) Response to Justice Rothstein ..............................................................................52(i)The Caution Required in Overturning Precedent........................................56(ii) The Arguments on Jurisprudence ...............................................................61(iii) Purpose of Section 2(d): Individual Versus CollectiveRights ..........................................................................................................632011 SCC 20 (CanLII)

(iv) The Argument That Section 2(d) Is a Freedom, Not aRight............................................................................................................67(v) The Argument that Health Services PrivilegesParticular Associations................................................................................74(vi) The Argument That Health Services Gives ContractsPriority Over Statutes..................................................................................76(vii) The Argument That Health Services Removes Judicial Deference tothe Legislation.............................................................................................77(viii) The Argument of Unworkability ................................................................82(ix) The Argument on Academic Criticism.......................................................86(x) The Argument on Canadian Labour History ..............................................89(xi) The Argument on International Law...........................................................91(xii) The Argument on Charter Values ..............................................................96(xiii) Conclusion ..................................................................................................97(2) Application: Have the Respondents Established a Breach ofSection 2(d)? ..............................................................................................................98C. Section 15 of the Charter ...............................................................................................114V. Conclusion .....................................................................................................................117Reasons of Rothstein J..........................................................................................................119I. Introduction....................................................................................................................119II. When Should Precedent be Overturned? .......................................................................129III. The Explicit Break with Precedent in Health Services..................................................152A. Introduction....................................................................................................................152B. The Jurisprudential Background Prior to Health Services ...........................................157C. An Express Break With Precedent in Health Services...................................................166IV. Section 2(d) of the Charter Does Not Protect Collective Bargaining............................172A. The Collective Bargaining Right Recognized in Health Services Is InconsistentWith the Purpose of Section 2(d) ...................................................................................177(1) Section 2(d) Protects Individual Interests, Not Group Interests ..............................178(a) Individual Freedoms Versus Collective Rights..................................................1782011 SCC 20 (CanLII)

(b) Qualitative Differences Between Individuals and Associations DoNot Change the Individual Nature of Freedom of Association.......................... 181(2) Section 2(d) Protects Freedoms Rather Than Rights...............................................188(3) Section 2(d) Does Not Privilege Some Associations Over Others..........................203(4) Section 2(d) Does Not Give Constitutional Status to Contracts..............................216(5) Courts Have Afforded the Legislature Significant Deference in the Applicationof Section 2(d) to the Field of Labour Relations .....................................................219B. The Reasons Advanced in Health Services Do Not Support ConstitutionalizingCollective Bargaining Under Section 2(d) of the Charter.............................................231(1) The Continuing Validity of Past Precedents on the Scope ofSection 2(d)..............................................................................................................233(2) Canadian Labour History Does Not Support Constitutionalizing CollectiveBargaining Rights ..........................................................................................................234(3) International Law Does Not Support ConstitutionalizingCollective Bargaining Rights...................................................................................247(4) Charter Values Cannot Be Invoked to Support Constitutionalizing CollectiveBargaining Rights ....................................................................................................251C. The Approach in Health Services Is Unworkable..........................................................256(1) The Problem Of Constitutionalizing One Part of the WagnerModel .......................................................................................................................257(2) The Untenable Distinction Between Substance And Process..................................263V. The Charter Protects a Voluntary Association of Workers Whose Objectives Areto Improve Wages and Working Conditions .................................................................270VI. Summary........................................................................................................................275VII. Application to the Present Case .....................................................................................276VIII. Conclusion .....................................................................................................................296Reasons of Deschamps J.......................................................................................................297I. Interpreting Health Services ..........................................................................................298II. Approach From Dunmore..............................................................................................313Reasons of Abella J. ..............................................................................................................3212011 SCC 20 (CanLII)

Background.............................................................................................................................323Analysis...................................................................................................................................3262011 SCC 20 (CanLII)

yThe judgment of McLachlin C.J. and Binnie, LeBel, Fish and Cromwell JJ. was deliveredI. IntroductionMCLACHLIN C.J. AND JUSTICE LEBEL —[1] This appeal raises anew the issue of the constitutionality of the labour relations2011 SCC 20 (CanLII)regime that applies to farm workers in Ontario. Most Canadian provinces have brought thefarming sector under their general labour relations laws, with some exceptions and restrictions.Except for a very short period of time, Ontario has always excluded farms and farm workersfrom the application of its Labour Relations Act (currently Labour Relations Act, 1995, S.O.1995, c.1, Sched. A) (“LRA”). In the present appeal, our Court must determine whether Ontario’slatest attempt to frame a separate labour relations regime for the farming sector respects theconstitutional guarantee of freedom of association, or violates it by failing to safeguard theexercise of collective bargaining rights. The Agricultural Employees Protection Act, 2002, S.O.2002, c. 16 (“AEPA”) or (“Act”), was a response to this Court’s decision in Dunmore v. Ontario(Attorney General), 2001 SCC 94, [2001] 3 S.C.R. 1016, which found that the previouslegislative scheme violated s. 2(d) of the Canadian Charter of Rights and Freedoms.[2] We are of the view that the AEPA has not been shown to be unconstitutional.Section 2(d) of the Charter protects the right to associate to achieve collective goals. Laws orstate actions that substantially interfere with the ability to achieve workplace goals throughcollective actions have the effect of negating the right of free association and therefore constitute

a limit on the s. 2(d) right of free association, which renders the law or action unconstitutionalunless it is justified under s. 1 of the Charter. This requires a process of engagement that permitsemployee associations to make representations to employers, which employers must considerand discuss in good faith.[3] The law here at issue, the AEPA, properly interpreted, meets these requirements,and is not unconstitutional. We would therefore allow the appeal.2011 SCC 20 (CanLII)[4] Before moving to the analysis of the issues raised by the appeal, it will be useful toreview the factual background and the jurisprudential developments that gave rise to this case.II. BackgroundA. The Exclusion of the Farming Sector From the LRA and the Impact of Dunmore[5] Prior to 1994, indeed since 1943, farm workers had been excluded from the generallabour relations regime established by the LRA. In 1994, the Ontario legislature enacted theAgricultural Labour Relations Act, 1994, S.O. 1994, c. 6 (“ALRA”), which extended trade unionand collective bargaining rights to agricultural workers. A year later, the legislature repealed theALRA in its entirety and again excluded farm workers from the labour relations regime set out inthe ALRA (Labour Relations and Employment Statute Law Amendment Act, 1995, S.O. 1995, c. 1(“LRESLAA”). The LRESLAA was challenged on the basis that it infringed the guarantees offreedom of association under s. 2(d) and equality under s. 15 of the Charter. In Dunmore, a

majority of this Court found a breach of s. 2(d). It held that the claimants were substantiallyunable to organize without protective legislation, and declared the law to be unconstitutional.This had the effect of nullifying the exclusion of farm workers from the LRA, but this Courtsuspended the declaration of invalidity for 18 months. The majority concluded it was notnecessary to deal with the s. 15 challenge.[6] In response, the Ontario legislature enacted the AEPA in 2002, which came into2011 SCC 20 (CanLII)force on June 17, 2003. In brief, the AEPA excluded farm workers once again from the LRA, butcrafted a labour relations regime for farm workers in Ontario. It granted them the rights to formand join an employees’ association, to participate in its activities, to assemble, to makerepresentations to their employers through their association on their terms and conditions ofemployment, and the right to be protected against interference, coercion and discrimination inthe exercise of their rights (s. 1(2)). The employer must give an association the opportunity tomake representations respecting terms and conditions of employment, and it must listen to thoserepresentations or read them (s. 5). The AEPA tasks a tribunal, the Agriculture, Food and RuralAffairs Appeal Tribunal, with hearing and deciding disputes about the application of the Act (ss.2 and 11). After limited efforts to use the new protections of the AEPA, the respondentsmounted a constitutional challenge to its validity.B. The Constitutional Challenge to the AEPA[7] The respondents argue that three more protections are required to meet therequirements of s. 2(d) of the Charter: (1) statutory protection for majoritarian exclusivity,

meaning that each bargaining unit is represented by a single bargaining agent; (2) an LRA-typestatutory mechanism to resolve bargaining impasses and interpret collective agreements; and (3)a statutory duty to bargain in good faith. The respondents argue that the Court’s recent decisionin Health Services and Support – Facilities Subsector Bargaining Assn. v. British Columbia,2007 SCC 27, [2007] 2 S.C.R. 391, entitles them to laws offering these protections.[8] The four individual farm workers in this case (three of them respondents and an2011 SCC 20 (CanLII)affiant) worked at Rol-Land Farms Ltd., a large industrial-type mushroom farm in Kingsville,Ontario. In 2002, after this Court’s decision in Dunmore, Xin Yuan Liu and other workers atRol-Land approached the United Food and Commercial Workers Union Canada (“UFCW”) torepresent them and bargain on their behalf. By the spring of 2003, 70 percent of the workers atRol-Land had joined the union.[9] Rol-Land refused to recognize the UFCW as the employees’ representative. TheUFCW then filed an application for certification with the Ontario Labour Relations Board, underthe LRA. In the ensuing vote, the workers voted 132 to 45 in favour of certification. Theresolution of the application has been kept on hold, pending the outcome of this appeal. After thevote, the UFCW wrote to Rol-Land requesting a meeting to commence negotiations toward acontract for the workers. Rol-Land did not respond to the letter. The respondents assert that theowner of Rol-Land told a meeting of workers that the union would never be recognized (R.F., atpara. 58).

[10] The UFCW also attempted to bargain collectively on behalf of employees atPlatinum Produce, an industrial greenhouse operating in Chatham, Ontario. While the employerexpressed doubt that the UFCW could be an employees’ association under the AEPA, it gave theunion an opportunity to make brief presentations. The meeting lasted approximately 15 minutes.The employer’s position was that the company was not required to bargain with the union andthe meeting was not to be considered collective bargaining towards a collective agreement.2011 SCC 20 (CanLII)[11] The UFCW subsequently presented Platinum Produce’s counsel with a draftcollective agreement setting out proposed terms. That meeting lasted approximately fiveminutes. The employer has not responded to the proposals or to other proposed meeting dates.There have been no further meetings or communications about terms and conditions of work.[12] The respondents did not attempt to pursue remedies under the AEPA. Specifically,no recourse was made to the Tribunal set up under the Act to deal with complaints. Rather, therespondents sought a declaration that s. 3(b.1) of the LRA, which provides that the LRA does notapply to farm workers, and that the AEPA as a whole were unconstitutional. In brief, theysubmitted that these laws breached s. 2(d) of the Charter by failing to provide effectiveprotection for the right to organize and bargain collectively and violated s. 15 by excluding farmworkers from the protections accorded to workers in other sectors.III. Judicial HistoryA. Ontario Superior Court of Justice, 79 O.R. (3d) 219, the Applications Judge

[13] The chambers judge, Farley J., heard the application before the judgment of thisCourt in Health Services. He proceeded on the assumption that s. 2(d) did not protect collectivebargaining. He dismissed the application on the ground that the AEPA met the minimumconstitutional requirements necessary to protect the freedom to organize. He began by adoptingthe comments made by Shape J. at the trial level of Dunmore and finding that agriculturalworkers “are ‘poorly paid, face difficult working conditions, have low levels of skills and2011 SCC 20 (CanLII)education, low status and limited employment mobility’” (paras. 23 and 33). But he was of theview that the AEPA did not prevent them from attempting to form employees’ associations. Hestated:There is nothing in the AEPA which would prevent the UFCW or any other unionfrom attempting to organize agricultural workers into an employees’ association,recognizing that such an employees’ association would not thereby automaticallyhave the right to strike nor the right to bargain collectively. See discussion in PeterW. Hogg, Constitutional Law of Canada, looseleaf, vol. 2 (Toronto: Carswell, 1997)at p. 41-5/6 (2002). The AEPA provides that the employees’ association may makerepresentations to an employer concerning the terms and conditions of employment(s. 5 AEPA). These representations may be made by someone who is not a memberof the association (s. 5(2)) so that a “union staffer” could perform that function. Therepresentation may be made orally or in writing (s. 5(5)). One must read s. 5(6) and(7) in a purposive way in context. Thus while the employer need only give theassociation a written acknowledgment that the employer has read the writtenrepresentations (s. 5(7)), it is implicit in the making of an oral representation that therecipient is hearing the oral representations as the employer has a duty to listen andthe association speaker will have the opportunity then and there to enquire whetherthe recipient has heard the representations. As well the concept of listening andreading respectively involves the aspect of comprehending and considering therepresentations. Perhaps unfortunately there is no specific requirement that theemployer respond to the substance of the representations; however, it should benoted that this would then involve the parties in a form of collective bargaining.[para. 19]

[14] With respect to the particular statutory protections in the AEPA, Farley J. found thatthey met the minimum required standards. He found that they confer the power to organize (s.1); protection against denial of access to property (s. 7); protection against employer interferencewith trade union activity (s. 8); protection against discrimination (s. 9); protection againstintimidation and coercion (s. 10); protection against alteration of working conditions during thecertification process (ss. 9-10); protection against coercion of witnesses (s. 10); and removal of2011 SCC 20 (CanLII)Board notices (s. 10). He allowed that it would have been preferable to have mirrored theprovisions of the LRA more precisely “to eliminate possible fears” that employers might alterworking conditions to hinder associational activities (para. 18). However, he felt that the answerto these concerns lay with the Tribunal, which had not been asked to deal with the workers’complaints. He stated:If the Tribunal felt that it was for some jurisdictional reason constrained fromnegatively sanctioning such activity, then one would presume that the applicants orothers of a like mind together with the UFCW would have a strong case to bringback in this regard. One would think it better to see how the Tribunal operates infact before condemning it as powerless to deal with such abuses. This wait and seepragmatic approach is desirable with respect to possible concerns about lack oflabour relations expertise/experience on the part of the specified panel roster of theTribunal. There has been no use of the mechanics of the AEPA as to bringing a casebefore the Tribunal; the applicants stated that it would be fruitless to bring a uselessapplication before a useless Tribunal. I am of the view that this condemnation ispremature. A successful application would do one of several things: be effectivepositively as to action; or morally give the wrongdoing employer a “bloody nose”; orif truly an empty process, it would demonstrate the need for strengthening bylegislative amendment. See also Danson v. Ontario (Attorney General), [1990] 2S.C.R. 1086, … at p. 1099 … where Sopinka J. for the court stated: “This Court hasbeen vigilant to ensure that a proper factual foundation exists before measuringlegislation against the provisions of the Charter, particularly where the effects ofimpugned legislation are the subject of the attack.” [para. 18]

Farley J. also dismissed the discrimination claim brought under s. 15 of the Charter.B. The Court of Appeal, 2008 ONCA 760, 92 O.R. (3d) 481 (Winkler C.J.O. and Cronk andWatt JJ.A.)[15] The Court of Appeal allowed the appeal and declared the AEPA to beconstitutionally invalid. It rendered its decision after the judgment of our Court in HealthServices. Winkler C.J.O., for the court, held that the AEPA substantially impaired the ability of2011 SCC 20 (CanLII)agricultural workers to meaningfully exercise the right to bargain collectively, which wasprotected by s. 2(d) of the Charter. The Act protected the right to organize, and it was prematureto conclude that the statutory protections against employer intimidation were inadequate.However, it did not provide the “minimum” statutory protections required to enable agriculturalworkers to exercise their right to bargain collectively in a meaningful way, namely: “(1) astatutory duty to bargain in good faith; (2) statutory recognition of the principles of exclusivityand majoritarianism; and (3) a statutory mechanism for resolving bargaining impasses anddisputes regarding the interpretation or administration of collective agreements” (para. 80). Thecourt noted that the “primary difficulty has been that the union has been unsuccessful inengaging employers, who have no statutory duty to bargain in good faith” (para. 98). Havingfound that the AEPA infringes s. 2(d) of the Charter, the Court of Appeal considered whether theinfringement could be saved as “reasonable and demonstrably justified” under s. 1 of theCharter, and found it could not. The legislation impaired the right more than necessary, despitethe challenges facing legislators in the agricultural domain, which is a complex mix of familyfarms and larger industrial operations. It concluded that “the wholesale exclusion of agricultural

employees from a collective bargaining scheme is not adequately tailored to meet the objectiveof protecting the family farm” (para. 129).[16] The Court of Appeal ordered the government “to provide agricultural workers withsufficient protections to enable them to exercise their right to bargain collectively, in accordancewith these reasons” (para. 138). It suspended this order for 12 months to give the Legislature anopportunity to respond. The Court of Appeal dismissed the claim under s. 15 of the Charter. Its2011 SCC 20 (CanLII)judgment was appealed to this Court.IV. AnalysisA. Issues: Does the AEPA Violate Sections 2(d) and 15 of the Charter?[17] The issue is whether the failure of the Ontario government to enact a positivestatutory framework for agricultural workers modelled after the Ontario Labour Relations Actviolates s. 2(d) of the Charter in a manner that cannot be justified by s. 1. If so, the AEPA isinvalid under s. 52 of the Constitution Act, 1982, and the Ontario legislature is obliged to bringthe Act into harmony with the Charter. The respondents have also raised the issue of whether theAEPA violates their right to equality under s. 15 of the Charter. As the main question in thisappeal remains the interpretation and application of s. 2(d), we will first consider this issue andthen turn to s. 15.B. Freedom of Association (Section 2(d))

[18] In view of the conflicting approaches to the guarantee of freedom of association inthe labour context put before us, it may be useful to canvas the jurisprudence and set out theprinciples that guide the analysis of s. 2(d). The respondents’ claim largely turns on theinterpretation of our Court’s judgments in Dunmore and Health Services. The ultimate questionis whether s. 2(d), properly understood and applied, requires the Ontario legislature to provide aparticular form of collective bargaining rights to agricultural workers, in order to secure the2011 SCC 20 (CanLII)effective exercise of their associational rights. To resolve this question, we will first consider thedevelopment of this Court’s jurisprudence in this area of the law.(1) Freedom of Association in the Labour Context: The Jurisprudential Background(a) The Early Cases[19] The first set of cases to consider s. 2(d) of the Charter, known as the trilogy, wereReference re Public Service Employee Relations Act (Alta.), [1987] 1 S.C.R. 313 (the “AlbertaReference”); PSAC v. Canada, [1987] 1 S.C.R. 424; RWDSU v. Saskatchewan, [1987] 1 S.C.R.460. The majority of the Court held that s. 2(d) did not protect the right to strike, the issue in thecases. In arriving at this conclusion, members expressed a number of views on the guarantee offreedom of association.[20] McIntyre J. stated that “like most other fundamental rights”, the right to freedom ofassociation has no single purpose or value. Rather, reflecting the social nature of human beings,it protected the right to associate with others “both to satisfy [their] desire for social intercourse

and to realize common purposes” (Alberta Reference, at p. 395). In the same case, Dickson C.J.(dissenting) stated: “What freedom of association seeks to protect is not associational activitiesqua particular activities, but the freedom of individuals to interact with, support, and besupported by, their fellow humans in the varied activities in which they choose to engage”(p. 366).[21] Three of the six Justices sitting on the trilogy opined in obiter that s. 2(d) does not2011 SCC 20 (CanLII)protect collective bargaining. (Alberta Reference at p. 390, per Le Dain J., PSAC at p. 453, perMcIntyre J.) The reasons given included that collective bargaining is a “modern right”, that itsrecognition would go against the principle of judicial restraint, that s. 2(d) protects onlyindividual rights, and that s. 2(d) was not intended to protect the goals or objects of organizations(Alberta Reference at p. 391, per Le Dain J.; pp. 397 and 407 per McIntyre J.).[22] The trilogy was endorsed in Professional Institute of the Public Service of Canada v.Northwest Territories (Commissioner), [1990] 2 S.C.R. 367 (“PIPSC”). Sopinka J., stated in hisreasons which appeared to be accepted by the other judges on this point: (1) “s. 2(d) protects thefreedom to establish, belong to and maintain an association”; (2) “s. 2(d) does not protect anactivity solely on the ground that the activity is a foundational or essential purpose of anassociation”; (3) “s. 2(d) protects the exercise in association of the constitutional rights andfreedoms of individuals”; and (4) “s. 2(d) protects the exercise in association of the lawful rightsof individuals” (p. 402).

[23] Nine years later, in Delisle v. Canada (Deputy Attorney General), [1999] 2 S.C.R.989, the Court once again revisited s. 2(d). The issue was whether exclusion of RCMP membersfrom public bargaining associations, as opposed to their own association, violated s. 2(d). Themajority of the Court, per Bastarache J., held it did not, on the ground that s. 2(d) does not givethe right to belong to a particular group. Bastarache J. added that there is no general obligationfor the government to provide a particular legislative framework for employees to exercise their2011 SCC 20 (CanLII)collective rights, i.e. a different framework than already provided for RCMP members.[24] In dissent, Cory and Iacobucci JJ. pointed out that the appeal was not concerned withthe right to strike or to bargain collectively (Delisle, at para. 51). The only issue was whether thestatutory framework interfered with the right to associate with other public servants in pursuanceof their mutual interests. They were of the view that s. 2(d) was violated because the impugnedlaws in purpose and effect interfered with the formation of employee associations. They notedthat employees are a vulnerable group in our society, and their ability to form and join anemployee association is crucially linked to their economic and social well-being (paras. 67-68).[25] In summary, the early cases affirmed that the core protection of s. 2(d) focusses onthe right of individuals to act in association with others to pursue common objectives and goals.There was some suggestion (Sopinka J.’s fourth point in PIPSC) that only individual goals wereprotected. (This proposition, as we shall see, was rejected in Dunmore.) While three judges inthe trilogy expressed the view that s. 2(d) did not protect collective bargaining, the only questionat issue in those cases was whether individuals had a right to strike, and the question of collectivebargaining was not conclusively resolved by a majority of the Court.

(b) Dunmore[26] This Court’s decision in Dunmore marked a new stage in the development of s. 2(d)jurisprudence in the field of labour relations. It raised the question of whether s. 2(d) requiresthe government to provide a legislative framework which enables employees to associate toobtain workplace goals in a meaningful process.2011 SCC 20 (CanLII)[27] The Ontario legislature had repealed legislation which gave farm workers a measureof protection, leaving them entirely outside the Province’s labour relations scheme. Theevidence established that attempts to organize were persistently frustrated by employers. Thefarm workers came to court seeking protection of their basic right to associate. They sought theright to organize into employee associations. For this, they contended, they needed legislationthat endorsed their constitutional right to associate and protected them from employerinterference.[28] Bastarache J., for the majority of the Court, began the analysis in Dunmore byemphasizing the need for a purposive approach to s. 2(d) — “one which aims to protect the fullrange of associational activity contemplated by the Charter and to honour Canada’s obligationsunder international human rights law” (para. 13). After a full review of the jurisprudence, hestated:. . . the activities for which the appellants seek protection [association for thepurposes of achieving workplace goals in the labour relations context] fall squarely

within the freedom to organize, that is, the freedom to collectively embody theinterests of individual workers. [para. 30][29] Bastarache J. went on to hold that in order to realize the purposes of s. 2(d), the rightto organize must extend to “the exercise of certain collective activities, such as making majorityrepresentations to one’s employer”. He explained:2011 SCC 20 (CanLII)These activities are guaranteed by the purpose of s. 2(d), which is to promote therealization of individual potential through relations with others, and by internationallabour jurisprudence, which recognizes the inevitably collective nature of thefreedom to organize. [para. 30][30] The affirmation that s. 2(d) protection extends to collective activities that only agroup can carry out, required rejection of Sopinka J.’s fourth proposition in PIPSC, whichsuggested that s. 2(d) only protected the right to further individual goals. Bastarache J. pointedout that certain activities are, when performed by a group, “qualitatively different” from thoseactivities performed solely by an individual. He recognized that “trade unions develop needs andpriorities that are distinct from those of their members individually”. As a result “certaincollective activities must be recognized if the freedom to form and maintain an association is tohave any meaning” (Dunmore, at para. 17).[31] In the result, Bastarache J. concluded that the absence of legislative protection forfarm workers to organize in order to achieve workplace goals made meaningful association toachieve workplace goals impossible and therefore constituted a substantial interference with theright to associate guaranteed by s. 2(d) of the Charter. He found that the absence of legislative

support discredited the organizing efforts of agricultural workers and had a chilling effect ontheir constitutional right to associate. He concluded that farm workers in Ontario weresubstantially incapable of exercising their fundamental freedom to associate without a protectiveregime (para. 35). Quoting L’Heureux-Dubé J. in Delisle, Bastarache J. affirmed thatthe right to freedom of association must take into account the nature and importanceof labour associations as institutions that work for the betterment of workingconditions and the protection of the dignity and collective interests of workers in afundamental aspect of their lives: employment. [Emphasis deleted; para. 37.]2011 SCC 20 (CanLII)[32] After Dunmore, there could be no doubt that the right to associate to achieveworkplace goals in a meaningful and substantive sense is protected by the guarantee of freedomof association, and that this right extends to realization of collective, as distinct from individual,goals. Nor could there be any doubt that legislation (or the absence of a legislative framework)that makes achievement of this collective goal substantially impossible, constitutes a limit on theexercise of freedom of association. Finally, there could be no doubt that the guarantee must beinterpreted generously and purposively, in accordance with Canadian values and Canada’sinternational commitments.[33] It is worth pausing at this juncture to summarize the propositions that led themajority of the Court in Dunmore to these conclusions.! Section 2(d), interpreted purposively, guarantees freedom of associational activityin the pursuit of individual and common goals.

! The common goals protected extend to some collective bargaining activities,including the right to organize and to present submissions to the employer.! What is required is a process that permits the meaningful pursuit of these goals.No particular outcome is guaranteed. However, the legislative framework mustpermit a process that makes it possible to pursue the goals in a meaningful way.2011 SCC 20 (CanLII)! The effect of a process that renders impossible the meaningful pursuit ofcollective goals is to substantially interfere with the exercise of the right to freeassociation, in that it negates the very purpose of the association and renders iteffectively useless. This constitutes a limit under s. 2(d) which is unconstitutionalunless justified by the state under s. 1 of the Charter. (This is an application of thesettled rule that a law or government act that in purpose or effect constrainsexercise of a right constitutes a limitation for purposes of s. 1: see Irwin Toy Ltd.v. Quebec (Attorney General), [1989] 1 S.C.R. 927).! The remedy for the resultant breach of s. 2(d) is to order the state to rectify thelegislative scheme to make possible meaningful associational activity in pursuit ofcommon workplace goals.(c) Health Services: Its Impact

[34] Dunmore established that claimants must demonstrate the substantial impossibilityof exercising their freedom of association in order to compel the government to enact statutoryprotections. It did not, however, define the ambit of the right of association protected by s. 2(d)in the context of collective bargaining. Relying on Dunmore, the majority of the Court in HealthServices, per McLachlin C.J. and LeBel J., held that legislation and government actions thatrepealed existing collective agreements and substantially interfered with the possibility of2011 SCC 20 (CanLII)meaningful collective bargaining in the future constituted a limit on the s. 2(d) right of freedomof association.[35] The claimants were various unions and their members working in the health servicesindustry of British Columbia. The industry was highly unionized and had negotiated collectiveagreements regarding salaries, benefits and working conditions. The government, directly orindirectly, was the employer. The government wanted to reduce costs by changing the structureof its employees’ working arrangements in ways that would have been impermissible under theexisting collective agreements. It chose to do so, not through collective bargaining to the end ofaltering those collective agreements, but by the simple expedient of legislation. In short, thegovernment used its legislative powers to effectively nullify the collective agreements to itsbenefit, and to the detriment of its employees. The legislation not only conflicted with existingcollective agreements, but also precluded collective bargaining in the future on a number ofissues and conditions of employment. (See R. K. Basu, “Revolution and Aftermath: B.C. HealthServices and Its Implications” (2008), 42 S.C.L.R. (2d) 165, at p. 177; see also M. Coutu, L. L.Fontaine and G. Marceau, Droits des rapports collectifs du travail au Québec (2009), at p. 144.)

[36] The unions responded by bringing an action claiming that the government hadbreached s. 2(d) by legislatively interfering with freedom of association. They further claimedthat the government had done so in circumstances that could not be justified under s. 1 of theCharter. Health Services thus put directly in issue the right to collective bargaining. Theclaimants did not seek the enactment of associational protections. Rather, they asserted that s.2(d) protected a right to collective bargaining and that the government had violated the2011 SCC 20 (CanLII)constitutional guarantee of freedom of association by legislating to both overturn existingcontracts and preclude effective collective bargaining in the future. The unions lost at trial andon appeal but succeeded in this Court.[37] While Health Services concerned the actions of a government employer nullifyingcollective bargaining arrangements with unions representing its own employees, the Court restedits decision on a more general discussion of s. 2 of the Charter. Applying the principles ofinterpretation established in Dunmore, a majority of the Court held that s. 2(d) includes “aprocess of collective action to achieve workplace goals” (para. 19). This process requires theparties to meet and bargain in good faith on issues of fundamental importance in the workplace(para. 90). By legislating to undo the existing collective bargaining arrangements and byhampering future collective bargaining on important workplace issues, the British Columbiagovernment had “substantially interfered” with the s. 2(d) right of free association, and had failedto justify the resultant limitation on the exercise of the right under s. 1 of the Charter (paras. 129-161).

[38] The decision in Health Services follows directly from the principles enunciated inDunmore. Section 2(d), interpreted purposively and in light of Canada’s values andcommitments, protects associational collective activity in furtherance of workplace goals. Theright is not merely a paper right, but a right to a process that permits meaningful pursuit of thosegoals. The claimants had a right to pursue workplace goals and collective bargaining activitiesrelated to those goals. The government employer passed legislation and took actions that2011 SCC 20 (CanLII)rendered the meaningful pursuit of these goals impossible and effectively nullified the right toassociate of its employees. This constituted a limit on the exercise of s. 2(d), and was thusunconstitutional unless justified under s. 1 of the Charter.[39] While the majority decision in Health Services sits firmly within the principles theCourt had earlier set out in Dunmore, in its discussion of the s. 2(d) right the Court went on toexplain in greater detail what the government must permit in order to avoid the charge ofsubstantial interference with the s. 2(d) right in the context of collective action in pursuit ofworkplace goals. In Dunmore, Bastarache J. stated that “the effective exercise of these freedomsmay require . . . the exercise of certain collective activities, such as making majorityrepresentations to one’s employer” (para. 30).It remained uncertain what other collectiveactivities might be protected.[40] The majority of the Court in Health Services affirmed that bargaining activitiesprotected by s. 2(d) in the labour relations context include good faith bargaining on importantworkplace issues (para. 94; see also paras. 93, 130, 135). This is not limited to a mere right tomake representations to one’s employer, but requires the employer to engage in a process of

consideration and discussion to have them considered by the employer. In this sense, collectivebargaining is protected by s. 2(d). The majority stated:Thus the employees’ right to collective bargaining imposes corresponding duties onthe employer. It requires both employer and employees to meet and to bargain ingood faith, in the pursuit of a common goal of peaceful and productiveaccommodation. [para. 90]2011 SCC 20 (CanLII)[41] By way of elaboration on what constitutes good faith negotiation, the majority of theCourt stated:! Section 2(d) requires the parties to meet and engage in meaningful dialogue. Theymust avoid unnecessary delays and make a reasonable effort to arrive at anacceptable contract (paras. 98, 100 and 101);! Section 2(d) does not impose a particular process. Different situations maydemand different processes and timelines (para. 107);! Section 2(d) does not require the parties to conclude an agreement or accept anyparticular terms and does not guarantee a legislated dispute resolution mechanismin the case of an impasse (paras. 102-103);! Section 2(d) protects only “the right . . . to a general process of collectivebargaining, not to a particular model of labour relations, nor to a specificbargaining method” (para. 91).

[42] The Court in Health Services emphasized that s. 2(d) does not require a particularmodel of bargaining, nor a particular outcome. What s. 2(d) guarantees in the labour relationscontext is a meaningful process. A process which permits an employer not even to consideremployee representations is not a meaningful process. To use the language of Dunmore, it isamong those “collective activities [that] must be recognized if the freedom to form and maintainan association is to have any meaning” (para. 17). Without such a process, the purpose of2011 SCC 20 (CanLII)associating in pursuit of workplace goals would be defeated, resulting in a significant impairmentof the exercise of the right to freedom of association. One way to interfere with free associationin pursuit of workplace goals is to ban employee associations. Another way, just as effective, isto set up a system that makes it impossible to have meaningful negotiations on workplacematters. Both approaches in fact limit the exercise of the s. 2(d) associational right, and bothmust be justified under s. 1 of the Charter to avoid unconstitutionality.[43] In summary, Health Services applied the principles developed in Dunmore andexplained more fully what is required to avoid interfering with associational activity in pursuit ofworkplace goals and undermining the associational right protected by s. 2(d). Its suggestion thatthis requires a good faith process of consideration by the employer of employee representationsand of discussion with their representatives is hardly radical. It is difficult to imagine ameaningful collective process in pursuit of workplace aims that does not involve the employer atleast considering, in good faith, employee representations. The protection for collectivebargaining in the sense affirmed in Health Services is quite simply a necessary condition ofmeaningful association in the workplace context.

(d) The Issue on This Appeal[44] Against this background, we return to the issue in this case. The Court of Appealheld that Health Services constitutionalizes a full-blown Wagner system of collective bargaining,and concluded that since the AEPA did not provide such a model, absent s. 1 justification, it isunconstitutional. The court appears to have understood the affirmation of the right to collectivebargaining in Health Services as an affirmation of a particular type of collective bargaining, the2011 SCC 20 (CanLII)Wagner model which is dominant in Canada.[45] With respect, this overstates the ambit of the s. 2(d) right as described in HealthServices. First, as discussed, the majority in Health Services unequivocally stated that s. 2(d)does not guarantee a particular model of collective bargaining or a particular outcome (para. 91).[46] Second, and more fundamentally, the logic of Dunmore and Health Services is atodds with the view that s. 2(d) protects a particular kind of collective bargaining. As discussedearlier, what s. 2(d) protects is the right to associate to achieve collective goals. Laws orgovernment action that make it impossible to achieve collective goals have the effect of limitingfreedom of association, by making it pointless. It is in this derivative sense that s. 2(d) protects aright to collective bargaining: see Ontario (Public Safety and Security) v. Criminal Lawyers’Association, 2010 SCC 23, [2010] 1 S.C.R. 815 (“CLA”), where the right to access governmentinformation was held to be “a derivative right which may arise where it is a necessaryprecondition of meaningful expression on the functioning of government” (para. 30). However,no particular type of bargaining is protected. In every case, the question is whether the

impugned law or state action has the effect of making it impossible to act collectively to achieveworkplace goals.[47] It follows that Health Services does not support the view of the Ontario Court ofAppeal in this case that legislatures are constitutionally required, in all cases and for allindustries, to enact laws that set up a uniform model of labour relations imposing a statutoryduty to bargain in good faith, statutory recognition of the principles of exclusive majority2011 SCC 20 (CanLII)representation and a statutory mechanism for resolving bargaining impasses and disputesregarding the interpretation or administration of collective agreements (C.A. reasons, at para.80). What is protected is associational activity, not a particular process or result. If it is shownthat it is impossible to meaningfully exercise the right to associate due to substantial interferenceby a law (or absence of laws: see Dunmore) or by government action, a limit on the exercise ofthe s. 2(d) right is established, and the onus shifts to the state to justify the limit under s. 1 of theCharter.[48] The resolution of this appeal does not rest on stark reliance on a particularconception of collective bargaining. Rather, it requires us to return to the principles that underliethe majority rulings in Dunmore and Health Services. The question here, as it was in those cases,is whether the legislative scheme (the AEPA) renders association in pursuit of workplace goalsimpossible, thereby substantially impairing the exercise of the s. 2(d) associational right.(e) Response to Justice Deschamps

[49] Justice Deschamps adopts a narrow interpretation of the majority reasons in HealthServices, stating that they merely recognized “that freedom of association includes the freedomto engage in associational activities and the ability of employees to act in common to reachshared goals related to workplace issues and terms of employment” (para. 308). In her view, itwas unnecessary for the majority in that case to consider the duty to negotiate in good faith, andconsequently argues that the passages of the majority judgment that discussed this duty were in2011 SCC 20 (CanLII)obiter.[50] However, such a narrow interpretation of the majority reasons in Health Serviceswould not support the holding in that case. If s. 2(d) merely protected the right to act collectivelyand to make collective representations, the legislation at issue in that case would have beenconstitutional. The legislation in that case violated s. 2(d) since it undermined the ability ofworkers to engage in meaningful collective bargaining, which the majority defined as good faithnegotiations (para. 90). The majority underlined thatthe right to bargain collectively protects not just the act of making representations,but also the right of employees to have their views heard in the context of ameaningful process of consultation and discussion. This rebuts arguments made bythe respondent that the Act does not interfere with collective bargaining because itdoes not explicitly prohibit health care employees from making collectiverepresentations. While the language of the Act does not technically prohibitcollective representations to an employer, the right to collective bargaining cannot bereduced to a mere right to make representations. [Emphasis added; para. 114.]

[51] In our view, the majority decision in Health Services should be interpreted asholding what it repeatedly states: that workers have a constitutional right to make collectiverepresentations and to have their collective representations considered in good faith.(f) Response to Justice Rothstein[52] Justice Rothstein argues that Health Services represents a radical departure from2011 SCC 20 (CanLII)previous jurisprudence and was wrongly decided.[53] The central argument of our colleague is that s. 2(d) of the Charter does not protectcollective bargaining. He understands the majority decision in Health Services to haveconstitutionalized collective bargaining. That, he says, is wrong in principle, inconsistent withthe Court’s prior jurisprudence, and unworkable in practice.[54] Our colleague appears to interpret Health Services as establishing directly orindirectly a Wagner model of labour relations. The actual holding of Health Services, asdiscussed above, was more modest. Health Services affirms a derivative right to collectivebargaining, understood in the sense of a process that allows employees to make representationsand have them considered in good faith by employers, who in turn must engage in a process ofmeaningful discussion. The logic that compels this conclusion, following settled Charterjurisprudence, is that the effect of denying these rights is to render the associational processeffectively useless and hence to substantially impair the exercise of the associational rightsguaranteed by s. 2(d). No particular bargaining model is required.

[55] Rothstein J. calls for Health Services to be overturned. But his views also implyoverturning Dunmore, on which Health Services rests. Rothstein J. states that “the essence offreedom of association is that it enables individuals to do in association what they could do asindividuals (para. 197). This echoes the model of s. 2(d) adopted by the plurality in PIPSC, andrejected by Bastarache J. in Dunmore. For the reasons that follow we remain of the view thatDunmore and Health Services represent good law and should not be overruled.2011 SCC 20 (CanLII)(i) The Caution Required in Overturning Precedent[56] Our colleague correctly recognizes at the outset of his reasons that overturning aprecedent of this Court is a step not to be lightly undertaken. We would note that as weunderstand the law (see above), rejection of Health Services implies rejection of Dunmore aswell, since the two cases rest on the same fundamental logic.[57] The seriousness of overturning two recent precedents of this Court, representing theconsidered views of firm majorities, cannot be overstated. This is particularly so given theirrecent vintage. Health Services was issued only four years ago, and, when this appeal wasargued, only two years had passed.[58] Rothstein J. suggests that since Health Services deals with constitutional law, theCourt should be more willing to overturn it (paras. 141-43). In our respectful view, thisargument is not persuasive. The constitutional nature of a decision is not a primary considerationwhen deciding whether or not to overrule, but at best a final consideration in difficult cases.

Indeed, the fact that Health Services relates to a constitutional Charter right may militate infavour of upholding this past decision. As Binnie J. stated on behalf of a unanimous Court in R.v. Henry, 2005 SCC 76, [2005] 3 S.C.R. 609, “[t]he Court should be particularly careful beforereversing a precedent where the effect is to diminish Charter protection” (para. 44). JusticeRothstein’s proposed interpretation of s. 2(d) of the Charter would diminish the scope of the s.2(d) right.2011 SCC 20 (CanLII)[59] We note as well that, while the Court in this case was asked to clarify the ambit ofHealth Services, it was not asked to overrule it. British Columbia, the respondent in HealthServices, stated explicitly that it was “not here contesting this Court’s conclusion that s. 2(d)protects a process of collective bargaining” (Factum of the Attorney General of BritishColumbia, at para.18). Absent notice to the profession and interested persons, overruling HealthServices seems to us procedurally inappropriate.[60] In our view, the arguments advanced by our colleague against Health Services do notmeet the high threshold for reversing a precedent of this Court.(ii) The Arguments on Jurisprudence[61] Justice Rothstein argues that Health Services represents a marked departure fromprior jurisprudence. We do not agree.

[62] We have already discussed this jurisprudence in detail and need not repeat thediscussion here. In brief, the early cases did not consider the issue. Nothing said in them,however, negates the current state of the law, except for the fourth proposition in PIPSC, whichwas corrected in Dunmore to recognize that s. 2(d) extends to collective, as distinct fromindividual goals. Dunmore, as discussed above, established the proposition that legislativeregimes that make meaningful pursuit of workplace goals impossible significantly impair the2011 SCC 20 (CanLII)exercise of the s. 2(d) right to free expression and constitute a limit on the right which isunconstitutional unless justified by the state under s. 1. Health Services, far from being an“express break” with prior jurisprudence, is grounded in the principles earlier enunciated inDunmore.(iii) Purpose of Section 2(d): Individual Versus Collective Rights[63] Our colleague argues that the recognition of a constitutional right to collectivebargaining in Health Services is not supported by the purpose of s. 2(d), because it improperlyassigns a collective dimension to individual rights. The collective dimension of individual rightswas recognized by Dickson C.J., dissenting in Alberta Reference, stating that s. 2(d) protectsgroup activity for which activity there is “no analogy involving individuals” such as the right tobargain collectively (pp. 367-70). The Court in Dunmore modified the fourth proposition in theearlier case of PIPSC. As Bastarache J. there stated, “certain collective activities must berecognized if the freedom to form and maintain an association is to have any meaning”.

[64] Consistent with this framework, the majority decision in Health Services framed s.2(d) as an individual right (“the right of employees”, para. 87 (emphasis added)) that mayrequire the protection of group activity (see also paras. 19 and 89). The fundamental inquiry iswhether the state action would substantially impair the ability of “union members to pursueshared goals in concert” (para. 96 (emphasis added)). As in Dunmore, the majority concludedthat the realization of the individual right required a capacity to act in common, which may give2011 SCC 20 (CanLII)rise to a need to protect group activities and, as a consequence, to recognize group rights.[65] In summary, Health Services was consistent with the previous cases on the issue ofindividual and collective rights. It recognized, as did previous jurisprudence, that s. 2(d) is anindividual right. But it also recognized, as did previous cases, that to meaningfully uphold thisindividual right, s. 2(d) may properly require legislative protection of group or collectiveactivities.[66] Rothstein J. also emphasizes that “[i]ndividuals who are not members of anassociation . . . have no constitutional right to oblige their employers to bargain” (paras. 179 and187). In our view, this outcome is not anomalous. It follows logically from the fact thatcollective bargaining is a derivative right, a “necessary precondition” to the meaningful exerciseof the constitutional guarantee of freedom of association: see CLA, at para. 30. Where there is noreliance on freedom of association, there is no derivative right to require employers to bargain.(iv) The Argument That Section 2(d) Is a Freedom, Not a Right

[67] Our colleague argues that by requiring a process that allows for meaningful dialogueon workplace matters, Health Services wrongly converts a negative freedom into a positive right.This bright line between freedoms and rights, seems to us impossible to maintain. Just asfreedom of expression implies correlative rights, so may freedom of association. The freedom todo a thing, when guaranteed by the Constitution interpreted purposively, implies a right to do it.The Charter cannot be subdivided into two kinds of guarantees — freedoms and rights.2011 SCC 20 (CanLII)[68] The majority in both Dunmore and Health Services held that freedom to associatemay require the state to take positive steps. Bastarache J. in Dunmore underlined that “it may beasked whether the distinction between positive and negative state obligations ought to benuanced in the context of labour relations” (para. 20). He further noted thathistory has shown, and Canada’s legislatures have uniformly recognized, that aposture of government restraint in the area of labour relations will expose mostworkers not only to a range of unfair labour practices, but potentially to legalliability under common law inhibitions on combinations and restraint of trade. . . .In this context, it must be asked whether, in order to make the freedom to organizemeaningful, s. 2(d) of the Charter imposes a positive obligation on the state toextend protective legislation to unprotected groups. [para. 20][69] This Court has consistently rejected a rigid distinction between “positive” freedomsand “negative” rights in the Charter. For example, it recently held that s. 2(b) may require thegovernment to disclose documents to the public in order to enable meaningful discourse: CLA,at para. 37. As stated by L’Heureux-Dubé J. in Haig v. Canada, [1993] 2 S.C.R. 995:The distinctions between “freedoms” and “rights”, and between positive andnegative entitlements, are not always clearly made, nor are they always helpful. One

must not depart from the context of the purposive approach articulated by this Courtin R. v. Big M Drug Mart Ltd., [1985] 1 S.C.R. 295. Under this approach, a situationmight arise in which, in order to make a fundamental freedom meaningful, a postureof restraint would not be enough, and positive governmental action might berequired. This might, for example, take the form of legislative intervention aimed atpreventing certain conditions which muzzle expression, or ensuring public access tocertain kinds of information. [ p. 1039][70] A purposive protection of freedom of association may require the state to actpositively to protect the ability of individuals to engage in fundamentally important collective2011 SCC 20 (CanLII)activities, just as a purposive interpretation of freedom of expression may require the state todisclose documents to permit meaningful discussion.[71] With respect, we also do not agree that the structure of the Charter reflects a rigiddistinction between freedoms and rights. Rothstein J.’s reasons state that “[w]hen the Charteruses the term ‘right’, as it does in ss. 7 to 12, either a positive entitlement is introduced or a rightto be free of some restriction or prohibition (i.e. a freedom) is introduced” (para. 192).[72] In fact, many of the rights in ss. 7 to 12 do not entitle individuals to any form of stateaction. Rather these provisions guarantee a mixture of negative and positive rights. For instance,s. 9 protects “the right not to be arbitrarily detained or imprisoned” and s. 12 protects “the rightnot to be subjected to any cruel and unusual treatment or punishment”. But s. 10 also protects aright to counsel and imposes a corresponding duty on police officers to facilitate the exercise ofthis right. See also Charkaoui v. Canada (Citizenship and Immigration), 2007 SCC 9, [2007] 1S.C.R. 350, at para. 107, referring to “the s. 12 guarantee of freedom from cruel and unusualtreatment” (emphasis added).

[73] It may also be observed that Health Services does not impose constitutional dutieson private employers, but on governments as employers and parliaments and legislatures as lawmakers, in accordance with s. 32 of the Charter. Rather, the majority held that individuals havea right against the state to a process of collective bargaining in good faith, and that this rightrequires the state to impose statutory obligations on employers. As held by Cory and IacobucciJJ. in Vriend v. Alberta, [1998] 1 S.C.R. 493, one must “distinguish between ‘private activity’2011 SCC 20 (CanLII)and ‘laws that regulate private activity’. The former is not subject to the Charter, while the latterobviously is” (para. 66). If workers are incapable of exercising their right to collectivebargaining, they may only bring a Charter claim against the government and not their employer,and they must show a state action.(v) The Argument That Health Services Privileges Particular Associations[74] Our colleague argues that the effect of Health Services is to privilege someassociations over others, by interpreting s. 2(d) in a way that is not content-neutral. Broadly put,the argument appears to be that, by considering the goals of a particular association, one movesbeyond pure associational activity into a court-based selection of what goals are acceptable andwhat goals are not.[75] Yet consideration of goals cannot be avoided. One of the basic principles of Charterinterpretation is that rights must be interpreted in a purposive way — having regard for thepurposes, or goals, they serve. Thus, in the Alberta Reference, McIntyre J. described the core ofs. 2(d) protection as being association “both to satisfy [a] desire for social intercourse and to

ealize common purposes (emphasis added).” Dunmore resolved the issue, not by saying that thes. 2(d) right must be content-neutral, but by asserting that it must be interpreted in conjunctionwith Canada’s values and international human rights and labour law commitments. In our view,this is the preferable approach. A content-neutral right is too often a meaningless right.(vi) The Argument That Health Services Gives Contracts Priority Over Statutes2011 SCC 20 (CanLII)[76] Our colleague argues that Health Services gives constitutional status to contracts,privileging them over statutes. The argument is based on the view that Health Services holds thatbreach of collective agreements violates s. 2(d). In fact, as discussed above, this was not thefinding in Health Services. The majority in Health Services held that the unilateral nullificationof significant contractual terms, by the government that had entered into them or that hadoverseen their conclusion, coupled with effective denial of future collective bargaining,undermines the s. 2(d) right to associate, not that labour contracts could never be interfered withby legislation.(vii) The Argument That Health Services Removes Judicial Deference to theLegislation[77] Our colleague argues that Health Services undercuts the judicial deference courtshave paid in the past to the legislature in labour relations. We observe at the outset that thisargument rests on the premise — repeatedly rejected in Health Services — that the Court was

constitutionally enshrining the Wagner model of labour relations. In fact this is not what HealthServices held.[78] As stated in Health Services, “[i]t may well be appropriate for judges to defer tolegislatures on policy matters expressed in particular laws”. What Health Services rejected was ajudicial “no go” zone for an entire right on the ground that it may involve the courts in policymatters: creating such a Charter-free zone would “push deference too far” (para. 26). This Court2011 SCC 20 (CanLII)reached a similar conclusion in U.F.C.W., Local 1518 v. KMart Canada Ltd., [1999] 2 S.C.R.1083, at paras. 62-63.[79] The approach to deference advanced in Health Services is consistent with thisCourt’s general jurisprudence. Deference should inform the determination of whetherParliament’s scheme satisfies the requirements of the Charter, as articulated by the courts. SeeP. Macklem, “Developments in Employment Law: The 1990-91 Term” (1992), 3 S.C.L.R. (2d)227, at pp. 239-41. Conversely, the courts should not rely on deference to narrow the meaning ofCharter rights in the first place. Doing so would abdicate the courts’ duty as the “final arbitersof constitutionality in Canada” Nova Scotia (Workers’ Compensation Board) v. Martin, 2003SCC 54, [2003] 2 S.C.R. 504, at para. 31).[80] In R. v. Advance Cutting & Coring Ltd., 2001 SCC 70, [2001] 3 S.C.R. 209, thereasons of both LeBel J. and Bastarache J. (dissenting) rejected the view that deference toParliament on labour relations created a Charter-free zone of legislative action, although therewas disagreement on the scope of s. 2(d) and the application of the Charter. The reasons of

LeBel J., written on behalf of a minority of the Court in finding no violation of s. 2(d),acknowledged the existence of a jurisprudential policy of non-intervention in labour relations.However, LeBel J. also stated that “the jurisprudence of this Court has never held that labourlaws are immune to Charter review” (para. 162).[81] Rothstein J. argues that courts should consider deference to Parliament indetermining the scope of s. 2(d). This approach is inconsistent with this Court’s decision in2011 SCC 20 (CanLII)Dunmore. While Rothstein J. adopts the approach of McIntyre J. in the Alberta Reference, thisCourt has since distanced itself from this view. In Dunmore, Bastarache J. referred to McIntyreJ.’s discussion of deference under s. 1, rather than in outlining the scope of s. 2(d): para. 57; seealso Delisle, per Cory and Iacobucci JJ., dissenting; KMart Canada Ltd., at paras. 62-63, inwhich Cory J. referred to this passage from McIntyre J.’s reasons under s. 1 in a freedom ofexpression case. Deference to legislatures properly plays a part, not in defining the nature andscope of a constitutional right, but within the margin of appreciation that the Oakes analyticalprocess acknowledges, particularly at the minimal impairment stage.(viii) The Argument of Unworkability[82] Rothstein J. argues that Health Services is unworkable and therefore must beoverturned (para. 256).[83] The short answer to this argument is that unworkability has not been established.Winkler C.J.O. speculates that more will be required to make Health Services work, and

academics have weighed in with great passion, some in favour of the decision, some against it.But there is no concrete evidence that the principles enunciated in Dunmore and Health Servicesare unworkable or have led to intolerable results. It is premature to argue that the holding inHealth Services, rendered four years ago, is unworkable in practice. In Henry, in holding thisCourt’s decision in R. v. Mannion, [1986] 2 S.C.R. 272, to be unworkable 19 years after it wasdelivered, Binnie J. noted that the unworkability of that decision “only emerged over time as the2011 SCC 20 (CanLII)courts have struggled to work with the distinction between impeachment of credibility andincrimination” (para. 45).[84] Rothstein J. argues that the distinction drawn in Health Services between substantiveand procedural rights is unworkable. Again, we must disagree. In our colleague’s view, theprocedural right to collective activity under s. 2(d) would impinge on the substantive right to aconcluded collective agreement rejected in Health Services. However, substantive impact doesnot invalidate a procedural right. All procedures affect outcomes, but that does not mean that allprocedural rights are unworkable. The Charter may protect collective bargaining and not thefruits of that process.[85] Rothstein J. also suggests that more is required to transform the principles in HealthServices into a full-blown labour relations scheme. This, however, does not establishunworkability. It is not the role of this Court to specify in advance precisely which model oflabour relations the legislature should adopt. Instead, its role is to outline the boundaries withinwhich the legislature must operate, and to assess if the scheme developed by legislators satisfiesthis test.

(ix) The Argument on Academic Criticism[86] Justice Rothstein argues that academic criticism supports the view that HealthServices should be overturned. While he agrees that criticism of a judgment is not sufficient tojustify overruling it, he asserts that it is reason for the Court to “take notice”.[87] The first point to note is that the decisions that Rothstein J. relies on, the Trilogy and2011 SCC 20 (CanLII)PIPSC, were themselves the subject of intense academic criticism (see e.g. Macklem, at p. 240:“the combined effect of the Labour Trilogy and P.I.P.S. is a national embarrassment”); see alsoD. Beatty and S. Kennett, “Striking Back: Fighting Words, Social Protest and PoliticalParticipation in Free and Democratic Societies” (1988), 67 Can. Bar Rev. 573; A.C. Hutchinsonand A. Petter, “Private Rights/Public Wrongs: The Liberal Lie of the Charter” (1988), 38U.T.L.J. 278; R. Elliot, “Developments in Constitutional Law: The 1989-90 Term” (1991), 2S.C.L.R. (2d) 83). The real question is whether the academic criticism raises concerns notidentified in Health Services that would justify overruling it.[88] Moreover, as our colleague acknowledges, there was a range of opinions expressedabout the decision in Health Services. As is often the case, some commentators agree, whileothers disagree in whole or in part. A number of comments approved of the shift away from thetrilogy in favour of a broader and more contextual understanding of freedom of association: seee.g. C. Brunelle, “La liberté d’association se porte mieux: un commentaire de l’arrêt HealthServices”, in Conférence des juristes de l’État 2009 : XVIII e Conférence (2009), 237; P. Verge,“L’affirmation constitutionnelle de la liberté d’association: une nouvelle vie pour l’autonomie

collective?” (2010), 51 C. de d. 353. Indeed, some commentators fault this Court’s decision fornot going far enough in protecting collective bargaining and related issues: see e.g. P. Verge,“La Cour suprême, le ‘droit’ à la négociation collective et le ‘droit’ de grève” (2006), 66 R. du B.391; P. Verge, “Inclusion du droit de grève dans la liberté générale et constitutionnelled’association: justification et effets” (2009) 50 C. de D. 267; J. Cameron, “The LabourTrilogy’s Last Rites: B.C. Health and a Constitutional Right to Strike” (2009-2010), 152011 SCC 20 (CanLII)C.L.E.L.J. 297; and J. Cameron, “Due Process, Collective Bargaining, and s. 2(d) of the Charter:A Comment on B.C. Health Services” (2006-2007), 13 C.L.E.L.J. 233.(x) The Argument on Canadian Labour History[89] Rothstein J. takes issue with the discussion of Canadian labour history in HealthServices, pointing out that hostility to collective bargaining is part of Canadian labour lawhistory. We agree with this obvious fact, which was largely true until the Second World War,which is indeed referred to in the majority reasons in Health Services.[90] The relevant question from the perspective of interpreting s. 2(d) of the Charter isnot whether courts in the past have undermined collective bargaining, but rather whetherCanadian society’s understanding of freedom of association, viewed broadly, includes the rightto collective bargaining in the minimal sense of good faith exchanges affirmed in HealthServices. Whether that right has been consistently guaranteed by the legal system does notresolve the issue before us, the content of the s. 2(d) guarantee. Charter guarantees must be

given a generous and purposive interpretation. While the practice of courts pre-Charter mayassist in interpreting Charter guarantees, it does not freeze them forever in a pre-Charter vice.(xi) The Argument on International Law[91] Rothstein J. takes issue with the majority’s conclusion in Health Services thatinternational law supports a finding that s. 2(d) includes a right to collective bargaining.2011 SCC 20 (CanLII)[92] The majority in Health Services discussed both “Canada’s current international lawcommitments and the current state of international thought on human rights” (para. 78(underlining added)). Charter rights must be interpreted in light of Canadian values andCanada’s international and human rights commitments. In Dunmore, Bastarache J. emphasizedthe relevance of these in interpreting s. 2(d) in the context.[93] The fundamental question from the perspective of s. 2(d) is whether Canada’sinternational obligations support the view that collective bargaining is constitutionally protectedin the minimal sense discussed in Health Services. The majority in Health Services relied onthree documents that Canada has endorsed: the International Covenant on Economic, Social andCultural Rights, 993 U.N.T.S. 3, the International Covenant on Civil and Political Rights, 999U.N.T.S. 171, and the International Labour Organization’s (“ILO’s”) Convention (No. 87)concerning freedom of association and protection of the right to organise, 68 U.N.T.S. 17(“Convention No. 87”).

[94] The decision rendered by the ILO Committee on Freedom of Association (“CFA”),in the conflict between the employees of the B.C. health services and the government of BritishColumbia, concerned the very conflict that formed the factual background of the decision inHealth Services. After applying Convention 87 and noting that Canada had not ratifiedConvention (No. 98) concerning the application of the principles of the right to organise and tobargain collectively, 96 U.N.T.S. 257 (“Convention No. 98”), the CFA concluded that the action2011 SCC 20 (CanLII)of the government of British Columbia violated the employees’ right to freedom of association.It stated that the unilateral cancellation of collective agreements “may have a detrimental effecton workers’ interests in unionization, since members and potential members could consider ituseless to join an organization the main objective of which is to represent its members incollective bargaining, if the results of bargaining are constantly cancelled by law” (Report No.330 (2003), vol. LXXXVI, Series B, No. 1, at para. 304).[95] Rothstein J. argues that Convention No. 98 (which is not binding on Canada) doesnot support “a version of collective bargaining that includes a duty to bargain in good faith”(para. 249). While voluntariness is a component of the international model of collectivebargaining — as noted by the majority in Health Services (para. 77, citing B. Gernigon, A.Odero and H. Guido, “ILO principles concerning collective bargaining” (2000), 139 Int’l Lab.Rev. 33, at pp. 51-52) — the ILO Committee of Experts has not found compulsory collectivebargaining to be contrary to international norms. The 1994 Report of the Committee of Expertsdiscussed the domestic schemes that compelled employers to bargain with unions, listingCanada, and approvingly stated that such schemes illustrated “the principle that employers and

trade unions should negotiate in good faith and endeavour to reach an agreement” (Committee ofExperts on the Application of Conventions and Recommendations, Freedom of Association andCollective Bargaining (1994), at para. 243). This is precisely the general principle that HealthServices endorses.(xii) The Argument on Charter Values2011 SCC 20 (CanLII)[96] Rothstein J. argues that the majority in Health Services erred in relying on theunderlying values of the Charter when interpreting the scope of s. 2(d) rather than on the text ofthe Charter itself (paras. 252-54). We can only respond that a value-oriented approach to thebroadly worded guarantees of the Charter has been repeatedly endorsed by Charterjurisprudence over the last quarter century.(xiii) Conclusion[97] Notwithstanding the comprehensive reasons of our colleague, we conclude thatHealth Services is grounded in precedent, consistent with Canadian values, consistent withCanada’s international commitments and consistent with this Court’s purposive and generousinterpretation of other Charter guarantees. In our view, it should not be overturned.(2) Application: Have the Respondents Established a Breach of Section 2(d)?

[98] The essential question is whether the AEPA makes meaningful association to achieveworkplace goals effectively impossible, as was the case in Dunmore. If the AEPA process,viewed in terms of its effect, makes good faith resolution of workplace issues betweenemployees and their employer effectively impossible, then the exercise of the right to meaningfulassociation guaranteed by s. 2(d) of the Charter will have been limited, and the law found to beunconstitutional in the absence of justification under s. 1 of the Charter. The onus is on the farm2011 SCC 20 (CanLII)workers to establish that the AEPA interferes with their s. 2(d) right to associate in this way.[99] As discussed above, the right of an employees’ association to make representationsto the employer and have its views considered in good faith is a derivative right under s. 2(d) ofthe Charter, necessary to meaningful exercise of the right to free association. The question iswhether the AEPA provides a process that satisfies this constitutional requirement.[100] Under the AEPA, the right of employees’ associations to make representations totheir employers is set out in s. 5. The relevant sections are ss. 5(1), (5), (6) and (7):5. (1) The employer shall give an employees’ association a reasonable opportunityto make representations respecting the terms and conditions of employment of one ormore of its members who are employed by that employer.(5) The employees’ association may make the representations orally or in writing.…(6) The employer shall listen to the representations if made orally, or read them ifmade in writing.(7) If the representations are made in writing, the employer shall give theassociation a written acknowledgment that the employer has read them.

[101] Sections 5(6) and (7) are critical. They provide that the employer shall listen to oralrepresentations, and read written representations, and acknowledge having read them. They donot expressly refer to a requirement that the employer consider employee representations in goodfaith. Nor do they rule it out. By implication, they include such a requirement.[102] Three considerations lead us to conclude that any ambiguity in ss. 5(6) and (7)should be resolved by interpreting them as imposing a duty on agricultural employers to consider2011 SCC 20 (CanLII)employee representations in good faith.[103] The first consideration is the principle that a statute should be interpreted in a waythat gives meaning and purpose to its provisions. This requires us to ask what the purpose of therequirements in ss. 5(6) and (7) is. There can only be one purpose for requiring the employer tolisten to or read employee representations — to assure that the employer will in fact consider theemployee representations. No labour relations purpose is served merely by pro forma listeningor reading. To fulfill the purpose of reading or listening, the employer must consider thesubmission. Moreover, the employer must do so in good faith: consideration with a closed mindwould render listening or reading the submission pointless.[104] The second consideration is that Parliament and legislatures are presumed to intendto comply with the Charter: Slaight Communications Inc. v. Davidson, [1989] 1 S.C.R. 1038, atp. 1078, per Lamer J. (as he then was), dissenting in part; R. v. Sharpe, 2001 SCC 2, [2001] 1S.C.R. 45, at para. 33. At the time the AEPA was adopted Dunmore had pronounced that theCharter requires meaningful exercise of the right to associate in pursuit of workplace goals.

Since Health Services, it has been clear that this requires employers to consider employeerepresentations in good faith. Any ambiguity in the AEPA should be resolved accordingly.[105] The third consideration is the expressed intention of the Minister in debates on thelegislation. When introducing the legislation, she stated:The government is advised that the Supreme Court of Canada decision regardingDunmore versus Ontario obligates the government to extend legislative protectionsto agricultural workers. It obligates us to do this to ensure that employees have theright to form and join associations, as well as have the protection necessary to ensurethat the freedom of association is meaningful. The government of Ontario will meetthese obligations.2011 SCC 20 (CanLII)(Legislative Assembly of Ontario, Official Report of Debates (Hansard), No. 46, 3rdSess., 37th Parl., October 22, 2002 (emphasis added)).[106] The government must, on the words of its Minister, have intended the legislation toachieve whatever is required to ensure meaningful exercise of freedom of association. Asdiscussed above, meaningful exercise of the right to free association in the workplace contextrequires good faith consideration of employee representations. As pointed out by therespondents, the Minister also stated that the AEPA was not intended to “extend collectivebargaining to agricultural workers”. However, this may be understood as an affirmation that theAEPA did not institute the dominant Wagner model of collective bargaining, or bring agriculturalworkers within the ambit of the LRA, not that the Minister intended to deprive farm workers ofthe protections of collective bargaining that s. 2(d) grants.

[107] These considerations lead us to conclude that s. 5 of the AEPA, correctly interpreted,protects not only the right of employees to make submissions to employers on workplacematters, but also the right to have those submissions considered in good faith by the employer. Itfollows that s. 5 of the AEPA does not violate s. 2(d) of the Charter.[108] It is argued that the record thus far under the AEPA gives little reason to think thatthe AEPA process will in fact lead to good faith consideration by employers. The evidence2011 SCC 20 (CanLII)shows that the respondents attempted to engage employers in collective bargaining activities on afew occasions. On each occasion the employer ignored or rebuffed further engagement. Theemployers have refused to recognize their association and have either refused to meet andbargain with it or have not responded to the demands of the respondents.[109] This history, scant as it is, does not establish that the AEPA violates s. 2(d). Indeed,the union has not made a significant attempt to make it work. As just discussed, properlyinterpreted, it does not violate s. 2(d). Moreover, the process has not been fully explored andtested. The AEPA, as Farley J. noted, contemplates a meaningful exercise of the right ofassociation, and provides a tribunal for the resolution of disputes.[110] Farley J. expressed cautious hope that the Tribunal created by the Act would proveefficacious and that the relief claimed might be granted:One would think it better to see how the Tribunal operates in fact before condemningit as powerless to deal with such abuses. … I am of the view that this condemnationis premature. A successful application would do one of several things: be effective

positively as to action; or morally give the wrongdoing employer a “bloody nose”; orif truly an empty process, it would demonstrate the need for strengthening bylegislative amendment. [para. 18][111] Farley J. accordingly found that the complaint was premature:. . . it would seem to me to be a premature and unfair complaint that the Tribunalcharged under the AEPA with dealing with complaints — namely the Agriculture,Food and Rural Affairs Appeal Tribunal — is bereft of expertise in labour relationsgiven its bipartite composition of labour and agricultural experienced personnel.That Tribunal should be given a fair opportunity to demonstrate its ability toappropriately handle the function given to it by the AEPA. [para. 28]2011 SCC 20 (CanLII)[112] Section 11 of the AEPA specifically empowers the Tribunal to make a determinationthat there has been a contravention of the Act, and to grant an order or remedy with respect tothat contravention. The Tribunal may be expected to interpret its powers, in accordance with itsmandate, purposively, in an effective and meaningful way. Labour tribunals enjoy substantiallatitude when applying their constituent statutes to the facts of a given case. As stated by theOntario Labour Relations Board in Adams Mine, Cliffs of Canada Ltd. v. United Steelworkers ofAmerica (1982), 1 C.L.R.B.R. (N.S.) 384:The Act does not spell out each and every right and obligation of labour andmanagement. This Board is left with the task of applying the Act’s general languagein the light of an infinite variety of circumstances which may arise. A rigid schemeof regulation is avoided and flexibility is provided although all within the limitationsnecessary to effectuate the dominant purpose of the Act. [pp. 399-400][113] We conclude the AEPA does not breach s. 2(d) of the Charter. It is thereforeunnecessary to consider the s. 1 arguments that the respondents’ demands for full LRA

protections would be inappropriate because of the diverse nature of the agricultural sector,ranging from small family operations to larger commercial establishments.C. Section 15 of the Charter[114] As an alternative to their claim under s. 2(d), the respondents contend that Ontariohas violated their equality rights under s. 15 of the Charter by excluding them from the statutory2011 SCC 20 (CanLII)protections accorded to workers in other sectors. They argue that status as an agricultural workeris analogous to the enumerated grounds of discrimination in s. 15(1) because their occupation isa fundamental aspect of their identity.[115] Farley J., writing in 2006, found that the situation of farm workers had not changedappreciably since Dunmore, in 2001, where this Court wrote with sympathy of the vulnerableposition of these workers and the need for greater labour protections. The Ontario legislatureattempted to respond to the concerns expressed in Dunmore by enacting the AEPA.[116] The s. 15 discrimination claim, like the s. 2(d) claim, cannot succeed on the recordbefore us. It is clear that the regime established by the AEPA does not provide all the protectionsthat the LRA extends to many other workers. However, a formal legislative distinction does notestablish discrimination under s. 15. What s. 15 contemplates is substantive discrimination, thatimpacts on individuals stereotypically or in ways that reinforce existing prejudice anddisadvantage: Andrews v. Law Society of British Columbia, [1989] 1 S.C.R. 143; R. v. Kapp,2008 SCC 41, [2008] 2 S.C.R. 483, at para. 17. The AEPA provides a special labour regime for

agricultural workers. However, on the record before us, it has not been established that theregime utilizes unfair stereotypes or perpetuates existing prejudice and disadvantage. Until theregime established by the AEPA is tested, it cannot be known whether it inappropriatelydisadvantages farm workers. The claim is premature.V. Conclusion2011 SCC 20 (CanLII)[117] The decision that we render today is another step in the resolution of the issuessurrounding the organizational challenges faced by farm workers in Ontario. We hope that allconcerned proceed on the basis that s. 2(d) of the Charter confirms a right to collectivebargaining, defined as “a process of collective action to achieve workplace goals”, requiringengagement by both parties. Like all Charter rights, this right must be interpreted generouslyand purposively. The bottom line may be simply stated: Farm workers in Ontario are entitled tomeaningful processes by which they can pursue workplace goals.[118] We would allow the appeal and dismiss the action. We would answer theconstitutional questions as follows:1. Does the Agricultural Employees Protection Act, 2002, S.O. 2002, c. 16, infringe s. 2(d)of the Canadian Charter of Rights and Freedoms?No.2. If so, is the infringement a reasonable limit prescribed by law as can be demonstrablyjustified in a free and democratic society under s. 1 of the Canadian Charter of Rights andFreedoms?It is not necessary to answer this question.

3. Does s. 3(b.1) of the Labour Relations Act, 1995, S.O. 1995, c. 1, Sched. A, infringe s.2(d) of the Canadian Charter of Rights and Freedoms?No.4. If so, is the infringement a reasonable limit prescribed by law as can be demonstrablyjustified in a free and democratic society under s. 1 of the Canadian Charter of Rights andFreedoms?It is not necessary to answer this question.5. Does the Agricultural Employees Protection Act, 2002, S.O. 2002, c. 16, infringe s. 15 ofthe Canadian Charter of Rights and Freedoms?No.6. If so, is the infringement a reasonable limit prescribed by law as can be demonstrablyjustified in a free and democratic society under s. 1 of the Canadian Charter of Rights andFreedoms?It is not necessary to answer this question.7. Does s. 3(b.1) of the Labour Relations Act, 1995, S.O. 1995, c. 1, Sched. A, infringe s. 15of the Canadian Charter of Rights and Freedoms?No.8. If so, is the infringement a reasonable limit prescribed by law as can be demonstrablyjustified in a free and democratic society under s. 1 of the Canadian Charter of Rights andFreedoms?It is not necessary to answer this question.2011 SCC 20 (CanLII)In the circumstances, we order no costs on this appeal or in the courts below.The reasons of Rothstein and Charron JJ. were delivered byROTHSTEIN J. —I. Introduction

[119] I have had the opportunity to read the reasons of the Chief Justice and LeBel J. inthis appeal. I agree with them that the appeal should be allowed and the action dismissed.However, I disagree with their interpretation of s. 2(d) of the Canadian Charter of Rights andFreedoms with respect to collective bargaining.[120] The Chief Justice and LeBel J. have accurately set out the background, theconstitutional challenge and the judicial history in this case. While I agree with what they have2011 SCC 20 (CanLII)written in these respects, I respectfully disagree with the reasons for their decision.[121] The reasons of the Chief Justice and LeBel J. are based upon the majority decision inHealth Services and Support – Facilities Subsector Bargaining Assn. v. British Columbia, 2007SCC 27, [2007] 2 S.C.R. 391 (“Health Services”). The majority in Health Services found that s.2(d) of the Charter confers constitutional status on collective bargaining. It concluded thatcollective bargaining as protected by s. 2(d) “requires both employer and employees to meet andto bargain in good faith, in the pursuit of a common goal of peaceful and productiveaccommodation”: para. 90. It further found that the requirement to bargain in good faith imposesa duty on employers to meet with employees and make a “reasonable effort to arrive at anacceptable contract”: para. 101.[122] Following the reasons in Health Services, the Chief Justice and LeBel J. in this casesay that s. 2(d) protects a right to collective bargaining, which includes “a process of engagementthat permits employee associations to make representations to employers, which employers mustconsider and discuss in good faith” (para. 2). According to them, there is no doubt that because

of s. 2(d) employers “must engage in a process of meaningful discussion” because “the effect ofdenying these rights is to render the associational process effectively useless” (para. 54).[123] The term collective bargaining may have different meanings in other contexts,which I discuss in further detail below. For the sake of clarity, throughout these reasons, I willuse the term to refer to the entitlements and obligations that the Chief Justice and LeBel J. viewas being encompassed by s. 2(d), as quoted in paragraphs 121 and 122 above.2011 SCC 20 (CanLII)[124] I respectfully disagree with the Chief Justice and LeBel J. that collective bargainingenjoys constitutional status under the s. 2(d) freedom of association. I do not agree that s. 2(d)requires the state to impose a complex set of statutorily defined reciprocal rights and duties onemployers and workers associations, including a duty to bargain in good faith.[125] In my view, s. 2(d) protects the liberty of individuals to associate and engage inassociational activities. Therefore, s. 2(d) protects the freedom of workers to form self-directedemployee associations in an attempt to improve wages and working conditions. What s. 2(d)does not do, however, is impose duties on others, such as the duty to bargain in good faith onemployers.[126] A constitutionally imposed duty to bargain in good faith strengthens the position oforganized labour vis-à-vis employers. I express no opinion on the desirability of such anoutcome for agricultural employees in Ontario. My point is only that courts are ill-suited todetermine what is a matter of labour relations policy. Such policy decisions require a balancing

of differing interests rather than an application of legal principles. Courts do not have thenecessary expertise, or institutional capacity, to undertake a process which should involveconsulting with and receiving representations from the various interested stakeholders andcoming to an informed decision after balancing the necessary policy considerations. Thedecision to impose a duty of collective bargaining should be made by the legislature, and not bythe court.2011 SCC 20 (CanLII)[127] Since the majority reasons are an application of the findings in Health Services to thecircumstances of this appeal, the initial question that is raised is whether Health Services wascorrectly decided. As I have already suggested, and as I will explain below, I would find thatHealth Services was not correctly decided, to the extent that it constitutionalizes collectivebargaining.[128] In my opinion, overruling Health Services would dispose of the constitutionalchallenge in this case. The respondents’ (Fraser’s) argument that the Agricultural EmployeesProtection Act, 2002, S.O. 2002, c. 16 (“AEPA”) violates the Charter because it does not protecta right to collective bargaining would have no basis. I therefore turn first to the question ofwhether it would be appropriate that Health Services be overruled.II. When Should Precedent Be Overturned?[129] The authorities are abundant that this Court may overrule its own decisions, andindeed it has done so on numerous occasions: see R. v. Bernard, [1988] 2 S.C.R. 833, at p. 849,

per Dickson C.J. in dissent; R. v. Chaulk, [1990] 3 S.C.R. 1303, at p. 1353, per Lamer C.J. forthe majority; R. v. B. (K.G.), [1993] 1 S.C.R. 740; R. v. Robinson, [1996] 1 S.C.R. 683.[130] However, in order to overrule its own precedent, the Court must be satisfied, basedupon substantial reasons, that the precedent was wrongly decided. It is not appropriate simplybecause of a change in the composition of the Court that precedent should be overturned,because of the views of newly appointed judges. There must be compelling reasons to justify2011 SCC 20 (CanLII)overruling: R. v. Salituro, [1991] 3 S.C.R. 654, at p. 665; Hamstra (Guardian ad litem of) v.British Columbia Rugby Union, [1997] 1 S.C.R. 1092, at paras. 18-19; R. v. Henry, 2005 SCC76, [2005] 3 S.C.R. 609, at para. 44.[131] This Court’s most recent pronouncement on the question of overruling was in Henry.Writing for the Court, Justice Binnie first noted at para. 44 that the Court’s practice is againstdeparting from precedent unless there are compelling reasons to do so. However, he alsorecognized that “while rare, departures [from precedent] do occur”. He further noted thatconstitutional decisions, including Charter decisions, are not immutable and may be overruled,though he held that “[t]he Court should be particularly careful before reversing a precedentwhere the effect is to diminish Charter protection.”[132] The values of certainty and consistency, which are served by adherence to precedent,are important to the orderly administration of justice in a system based upon the rule of law.Therefore, judges must proceed with caution when deciding to overrule a prior decision. Thecaution and care with which a judge must approach the question of overruling was articulated

well by Gibbs J. of the High Court of Australia in Queensland v. Commonwealth (1977), 139C.L.R. 585, at p. 599:No Justice is entitled to ignore the decisions and reasoning of his predecessors, andto arrive at his own judgment as though the pages of the law reports were blank, oras though the authority of a decision did not survive beyond the rising of the Court.A Justice, unlike a legislator, cannot introduce a programme of reform which sets atnought decisions formerly made and principles formerly established. It is only afterthe most careful and respectful consideration of the earlier decision, and after givingdue weight to all the circumstances, that a Justice may give effect to his ownopinions in preference to an earlier decision of the Court.2011 SCC 20 (CanLII)[133] What the courts are doing when deciding whether to overrule a precedent is abalancing exercise between two important values: correctness and certainty. A court must askwhether it is preferable to adhere to an incorrect precedent to maintain certainty or to correct theerror. Indeed, because judicial discretion is being exercised, the courts have set down, andacademics have suggested, a plethora of criteria for courts to consider in deciding betweenupholding precedent and correcting error.[134] In Bernard, Dickson C.J. in dissent, identified four reasons for overruling an earlierprecedent, at pp. 850-61:1. Decisions that predate the Charter and fail to reflect Charter values;2. Subsequent developments in the law that undermine the validity of the precedent;

3. A prior decision that creates uncertainty contrary to the underlying values ofclarity and certainty that lie behind stare decisis;4. A prior decision that operates against the accused by expanding the scope ofcriminal liability beyond its normal limits.2011 SCC 20 (CanLII)These factors were subsequently adopted by the majority in Chaulk as a non-exhaustive list ofconsiderations relevant to deciding whether to overrule an earlier precedent: p. 1353.[135] More recently, in Henry, Binnie J. identified the following reasons for overturning anearlier precedent, at paras. 45-46:1. The prior decision departed from the purpose of a Charter provision asarticulated in an earlier precedent;2. Experience shows that the prior decision is unworkable as its application isunnecessarily complex and technical;3. The prior decision is contrary to sound principle;4. The prior decision results in unfairness.

[136] The Supreme Court of the United States has also grappled with identifying theappropriate principles governing when courts should overrule precedent. In Planned Parenthoodof Southeastern Pennsylvania v. Casey, 505 U.S. 833 (1992), O’Connor, Kennedy and Souter JJ.,writing for a majority of the Court on this point, held that when the Court considers whether tooverrule an earlier case, “its judgment is customarily informed by a series of prudential andpragmatic considerations designed to test the consistency of overruling a prior decision with the2011 SCC 20 (CanLII)ideal of the rule of law, and to gauge the respective costs of reaffirming and overruling a priorcase” (p. 854). To this end, she articulated four factors to be considered in deciding whether tooverrule precedent, at pp. 854-55:1. Has the rule proved to be intolerable because it defies workability?2. Is the rule subject to a reliance that would lend a special hardship to theconsequences of overruling and add inequity to the cost of repudiation?3. Have related principles of law developed as to have left the old rule no morethan a remnant of abandoned doctrine?4. Have facts so changed, or come to be seen so differently, as to have robbed theold rule of significant application or justification?

[137] Professor Debra Parkes has summarized eight criteria suggested by Professor B. V.Harris as follows:1. Can the precedent be distinguished?2. Was it decided per incuriam?2011 SCC 20 (CanLII)3. Is the precedent unworkable?4. Are new reasons advanced not considered in the earlier case?5. Does the law now view the precedent to be wrong?6. Do the values underlying error correction or doing justice outweigh the valuesof adherence to stare decisis?7. Would error be swiftly corrected by the legislature in non-constitutional cases?8. Are foundational principles of human and civil rights involved?See D. Parkes, “Precedent Unbound? Contemporary Approaches to Precedent inCanada” (2006), 32 Man. L.J. 135, at p. 149, citing B. V. Harris, “Final AppellateCourts Overruling Their Own ‘Wrong’ Precedents: The Ongoing Search forPrinciple” (2002), 118 L.Q.R. 408.

[138] If a precedent has overruled prior cases, two sets of precedents exist, an originalprecedent and a new precedent, although one has been overruled. In such cases it will be moreimportant to carefully scrutinize the new precedent to determine if it has strayed from soundprior decisions and whether it would be preferable to return to the original, and more sound,decisions. In Adarand Constructors, Inc. v. Pena, 515 U.S. 200 (1995), O’Connor J. confrontedthis type of situation. She stated, at p. 231:2011 SCC 20 (CanLII)Remaining true to an “intrinsically sounder” doctrine established in prior cases betterserves the values of stare decisis than would following a more recently decided caseinconsistent with the decisions that came before it; the latter course would simplycompound the recent error and would likely make the unjustified break frompreviously established doctrine complete.Thus, where there exist earlier precedents from which the precedent at issue itself departed, itmay be justifiable, based on the values underlying stare decisis, for the Court to return to theearlier precedents.[139] The criteria discussed in the above cases and articles may, depending on thecircumstances of each case, be relevant in deciding whether overruling is appropriate. However,these criteria do not represent an exhaustive list of considerations or requirements. Rather, suchcriteria function as “guidelines to assist [the] Court in exercising its discretion”: Chaulk, at p.1353, per Lamer C.J. Fundamentally, the question in every case involves a balancing: Do thereasons in favour of following a precedent — such as certainty, consistency, predictability andinstitutional legitimacy — outweigh the need to overturn a precedent that is sufficiently wrongthat it should not be upheld and perpetuated?

[140] In the case of Health Services, I am of the opinion that the following considerationsare relevant and justify overruling.[141] First, the error in Health Services concerns a question of constitutional law. Thus,not only does it go to one of the foundational principles of our legal system, but it is notsusceptible to being corrected in a lasting way by the legislative branch. While s. 33 of theCharter may allow Parliament or the legislatures to suspend, temporarily, the force of this2011 SCC 20 (CanLII)Court’s ruling, history over the last two decades demonstrates that resort to s. 33 by legislatureshas been exceedingly rare. Health Services will, if left to stand, set out abiding principles ofconstitutional law. Only the Court may correct this error in fundamental principle. As noted inPlanned Parenthood, it is “common wisdom that the rule of stare decisis is not an ‘inexorablecommand,’ and certainly it is not such in every constitutional case” (p. 854). The jurisprudenceof this Court contains similar observations. Because the Charter involves the most fundamentalprinciples underlying our law, it is particularly important that its provisions be correctlyinterpreted.[142] The Chief Justice and LeBel J. say that the constitutional nature of Health Servicesshould only be a final consideration with respect to overruling difficult cases (para. 58). In myrespectful view, and as my reasons will endeavour to demonstrate, there are no shortage ofreasons to believe that Health Services is problematic on other grounds.[143] Relying on Henry, my colleagues also warn that this Court should be wary ofoverruling Health Services because doing so might have the potential to diminish Charter

protection (para. 58, citing Henry, at para. 44). They say that this consideration “militate[s] infavour of upholding” Health Services (para. 58). However, the Court cannot be oblivious toerrors in prior decisions. When considering overruling, the Court must balance correctness andcertainty. If there is a potential diminishment arising from correcting prior error, that is a reasonto be cautious, not a reason to forego correcting prior error altogether. Arguably, as HealthServices itself strayed from prior precedent, returning to those prior precedents would promote2011 SCC 20 (CanLII)certainty. However, even if certainty would favour retaining Health Services, in this case theneed for a constitutionally correct answer is paramount.[144] Second, as I have indicated, Health Services strayed significantly from earlier soundprecedents with respect to the purpose of Charter protection for freedom of association. Theconstitutional guarantee of freedom of association is premised on the recognition that individualsmay be better able to secure their interests and achieve their goals if they may join with others intheir attempt to do so. From this, two propositions necessarily follow: (a) that s. 2(d) wasintended to secure the individual’s freedom to coordinate his or her actions with others and enjoythe benefits that flow naturally from that coordination; and (b) that s. 2(d) was not intended topromote or guarantee the outcomes for which the association was formed. The ruling in HealthServices contradicts both of these central tenets. By constitutionalizing collective bargaining,Health Services created a group right that vests in the employee association rather thanindividual workers, and confers substantive outcomes for which the association was formed. Ithas therefore moved away from the sound principles established by earlier precedents of thisCourt.

[145] Third, the constitutionalization of collective bargaining, as envisaged in HealthServices and by the Chief Justice and LeBel J. in this case, is unworkable. On a practical level,the right to collective bargaining asserted by my colleagues is not workable without otherelements of modern labour legislation in place. As Winkler C.J.O. recognized at the Court ofAppeal, if it is to be effective, the right to collective bargaining will be hard pressed to performits function without reinforcement from the other aspects of labour legislation that he identified2011 SCC 20 (CanLII)(2008 ONCA 760, 92 O.R. (3d) 481). As a matter of principle, the distinction between substanceand process on which the ruling in Health Services (and of the Chief Justice and LeBel J. in thiscase) is premised cannot be sustained. The process is itself a desirable outcome for theassociation of workers, and will result in substantive concessions by the employer. Thus, bothprinciple and practicality militate against sustaining the ruling in Health Services.[146] Fourth, there has been intense academic criticism of Health Services, including byProfessor Eric Tucker, who was himself cited by the majority in support of its decision. See B.Etherington, “The B.C. Health Services and Support Decision — The Constitutionalization of aRight to Bargain Collectively in Canada: Where Did It Come From and Where Will It Lead?”(2009), 30 Comp. Lab. L. & Pol’y J. 715, at pp. 734-39. I recognize that there is also academiccommentary agreeing with the results of Health Services, as pointed out by the Chief Justice andLeBel J. (at para. 88). The existence of such commentary is not unexpected given the highlycontentious and polarizing nature of labour relations. However, as I will explain, while someagree with the result, the academic criticism of concern here targets the reasoning of the majorityin Health Services.

[147] Even some of the authors who support the results of Health Services and who arecited by my colleagues are critical of aspects of the reasoning employed by the majority of theCourt to achieve those results. For example, Professor Jamie Cameron, in “Due Process,Collective Bargaining, and s. 2(d) of the Charter: A Comment on B.C. Health Services” (2006-2007), 13 C.L.E.L.J. 233, while supportive of the results of Health Services, criticized thedecision because “B.C. Health Services relied on a concept of entitlement that was so heavily2011 SCC 20 (CanLII)and exclusively contextualized to collective bargaining that the decision lost contact with theunderlying values which have anchored s. 2(d) since the Labour Trilogy” (p. 262; see also pp.240 and 259).[148] I reiterate that in light of such academic criticism, it is appropriate for this Court totake notice and acknowledge the errors that have been identified.[149] My colleagues say that it is “procedurally inappropriate” to overrule Health Servicesbecause none of the parties have expressly asked this Court to do so (para. 59). However, thesubstance of the arguments of the appellants and interveners supporting them are in effect aclaim that Health Services should be overruled. The appellants and interveners supporting themall say that in this case there should be no obligation on agricultural employers to engage incompulsory collective bargaining. In my opinion, it is not possible to agree that there is no suchobligation without overruling Health Services.[150] Further, as Deschamps J. observes, “an employer’s duty to bargain in good faith wasnot even raised” in Health Services (at para. 297), and while the parties in Health Services

“recognized that under most Canadian labour law statutes, employers had an obligation tobargain in good faith, the claimants were not seeking a declaration characterizing this obligationas a constitutional one” (para. 304). Despite this issue not having been raised in Health Services,the majority in that case did not find it “procedurally inappropriate” to find that “collectivebargaining imposes corresponding duties on the employer” and “requires both employer andemployees to meet and to bargain in good faith ” (para. 90).2011 SCC 20 (CanLII)[151] Lastly, while the foregoing factors all support overruling Health Services, as theChief Justice and LeBel J. point out, it is fundamental that it be demonstrated that HealthServices was decided in error. The balance of these reasons endeavour to explain why HealthServices was erroneously decided.III. The Explicit Break With Precedent In Health ServicesA. Introduction[152] Prior to explaining why Health Services erred in finding that s. 2(d) of the Charterprotects collective bargaining, I will briefly refer to Dunmore v. Ontario (Attorney General),2001 SCC 94, [2001] 3 S.C.R. 1016, which was consistent with this Court’s jurisprudence priorto Health Services on the contours of s. 2(d) in the labour law context. I do this to underline theexplicit break from that jurisprudence in Health Services. This break came when a majority ofthis Court found that s. 2(d) required that government legislate to facilitate collective goalswhich an association was formed to pursue, rather than protecting the freedom of association

itself. This finding went beyond the rule in Dunmore which mandated legislative protection onlywhere such protection was necessary to the freedom to associate.[153] The Chief Justice and LeBel J. present an alternative interpretation which suggeststhat Health Services “follows directly from the principles enunciated in Dunmore” (para. 38).With respect, I do not agree with this interpretation because it does not follow from the wordsand findings in Dunmore. In Dunmore, the requirement that government provide legislation to2011 SCC 20 (CanLII)protect workers was anchored in the proposition that certain workers could not associate withoutgovernment intervention. This concept was embodied by the idea that the lack of legislation wasa “substantial interference” to the ability to form an association (para. 25). Deschamps J.describes Dunmore as holding that agricultural workers “were substantially unable to exercisetheir constitutional right [to associate] without the support of a legislative framework” (para. 307(emphasis added)). This characterization is in line with the words of Bastarache J. who himselfnoted the distinction between forming an association and enhancing and facilitating the goals ofthat association:… a group that proves capable of associating despite its exclusion from a protectiveregime will be unable to meet the evidentiary burden required of a Charter claim. Insuch a case, inclusion in a statutory regime cannot be said to safeguard, but rather toenhance, the exercise of a fundamental freedom. [para. 39][154] Health Services, in contrast, was not focussed on ensuring that government did notinterfere with the right of individuals to form an association. Indeed the action was brought byexisting associations. Instead, the decision in Health Services centred on the purported need to

constitutionalize collective bargaining in order for the association to be “meaningful”. Themajority concluded that without a legislated right to collective bargaining, and withoutconstitutional protection of terms of the collective agreement in that case, the formation of anassociation was meaningless.[155] This sentiment was an express break from Dunmore because the majority in HealthServices focussed on the goals of an association and the enhancement of those goals, rather than2011 SCC 20 (CanLII)the ability of the claimants to associate (which they already had done). Constitutionalizingcollective bargaining therefore cannot be said to safeguard the ability to associate, but instead isconcerned with “enhanc[ing] the exercise of a fundamental freedom,” which cannot form thebasis of a Charter claim (Dunmore, at para. 39). This express break from Dunmore is found inthe reasons of the Chief Justice and LeBel J., where they suggest that providing associationalprotections in the AEPA without also enshrining good faith bargaining would “render theassociational process effectively useless” (para. 54). This break from Dunmore is alsorecognized in the reasons of my colleague Abella J., where she observes that Health Servicesresulted in “creating a completely different jurisprudential universe” from that found in theprevious “Dunmore ‘right to organize’ template” (paras. 324 and 325).[156] It is this shift from protecting what is necessary to exercise the freedom to associate,to constitutionalizing the goals of an association — that is, negotiating a collective agreement —which results in Health Services being inconsistent with the ruling in Dunmore. The majority inHealth Services found that the freedom of association is meaningless unless the government alsoimposes a duty on employers to bargain in good faith, and protects the fruits of that bargaining

process. The focus shifted in Health Services from protecting the right to associate to enhancingthe goals of the association. This was an express break from Dunmore.B. The Jurisprudential Background Prior to Health Services[157] This Court first examined the scope of the Charter’s guarantee of freedom ofassociation in a series of three cases that came to be known as the “labour law trilogy”2011 SCC 20 (CanLII)(“Trilogy”) Reference Re Public Service Employee Relations Act (Alta.), [1987] 1 S.C.R. 313(the “Alberta Reference”); PSAC v. Canada, [1987] 1 S.C.R. 424; and RWDSU v. Saskatchewan,[1987] 1 S.C.R. 460. The specific issue in those cases was whether s. 2(d) protected the right tostrike. However, the members of the Court took the opportunity to consider, at length, thepurpose and scope of the protections afforded by s. 2(d). The bulk of the substantive analysis isfound in the Alberta Reference.[158] While the Court was divided on the result in those cases, there was nonethelessagreement on a number of core principles concerning the purpose and scope of s. 2(d). Withrespect to the purpose of granting constitutional protection to freedom of association, thefollowing comment by McIntyre J. reflects a general consensus amongst the members of theCourt:While freedom of association like most other fundamental rights has no singlepurpose or value, at its core rests a rather simple proposition: the attainment ofindividual goals, through the exercise of individual rights, is generally impossiblewithout the aid and cooperation of others. “Man, as Aristotle observed, is a ‘socialanimal, formed by nature for living with others’, associating with his fellows both tosatisfy his desire for social intercourse and to realize common purposes.” [p. 395]

[159] In addition, the Court was agreed that s. 2(d) protects an individual right to enter intoan association and does not create group rights that vest in the association itself. In the words ofDickson C.J. (dissenting):What freedom of association seeks to protect is not associational activities quaparticular activities, but the freedom of individuals to interact with, support, and besupported by, their fellow humans in the varied activities in which they choose toengage. But this is not an unlimited constitutional license for all group activity. Themere fact that an activity is capable of being carried out by several people together,as well as individually, does not mean that the activity acquires constitutionalprotection from legislative prohibition or regulation. [p. 366]2011 SCC 20 (CanLII)McIntyre J. struck a similar note:In considering the constitutional position of freedom of association, it must berecognized that while it advances many group interests and, of course, cannot beexercised alone, it is nonetheless a freedom belonging to the individual and not to thegroup formed through its exercise. [p. 397][160] In Professional Institute of the Public Service of Canada v. Northwest Territories(Commissioner), [1990] 2 S.C.R. 367 (“PIPSC”), the core areas of agreement in the AlbertaReference were later summarized by Sopinka J. in a passage that has since been frequently cited:Upon considering the various judgments in the Alberta Reference, I have come tothe view that four separate propositions concerning the coverage of the s. 2(d)guarantee of freedom of association emerge from the case: first, that s. 2(d) protectsthe freedom to establish, belong to and maintain an association; second, that s. 2(d)does not protect an activity solely on the ground that the activity is a foundational oressential purpose of an association; third, that s. 2(d) protects the exercise inassociation of the constitutional rights and freedoms of individuals; and fourth, thats. 2(d) protects the exercise in association of the lawful rights of individuals. [pp.401-2]

[161] These four propositions were later endorsed by majorities of the Court in CanadianEgg Marketing Agency v. Richardson, [1998] 3 S.C.R. 157, and Delisle v. Canada (DeputyAttorney General), [1999] 2 S.C.R. 989. In the latter case, a majority of the Court ruled that s.2(d) does not entitle workers to any particular set of statutory protections for their associativeactivities, such as those providing for a right to collective bargaining.[162] The proposition that s. 2(d) does not confer a right to collective bargaining was once2011 SCC 20 (CanLII)again endorsed by a majority of the Court in Dunmore. However, in that case the Courtrecognized that Sopinka J.’s four propositions, while valid, might not exhaust the entire scope ofprotection afforded by s. 2(d) (para. 16).[163] Bastarache J. explained that the core of s. 2(d) protection is to prohibit the state frominterfering with an activity because of its associational nature. Relying on comments made byDickson C.J. in the Alberta Reference, he noted that Sopinka J.’s fourth proposition, whichprotects “the exercise in association of the lawful rights of individuals”, suffers from a potentialweakness. That proposition will, in general, serve as a useful test in determining whether thestate has targeted the associational aspect of an activity rather than the activity itself. If the statehas outlawed an activity at both the individual and the group level, it is likely that this is becausethe activity itself is deemed to be harmful or problematic. By contrast, if the state permits anindividual to engage in an activity but has outlawed the performance of that activity in concertwith others, this will generally indicate that the state has targeted the activity solely because ofits associational nature. Thus, Sopinka J.’s fourth proposition assists in isolating the true intent

or effect of a measure when determining whether it infringes a person’s freedom of association(paras. 16-18).[164] However, there may be cases in which the state has directly targeted theassociational aspects of an activity which are not captured by Sopinka J.’s fourth proposition.An activity performed on a group level may be “qualitatively” different from what an individualcan undertake in isolation, such that no direct comparison or analogy is possible. If one were to2011 SCC 20 (CanLII)interpret the fourth proposition as requiring a strict analogy between the collective activity andits individual counterpart, a state restriction on such “qualitatively” different activities would notbe considered to inhibit freedom of association and would therefore pass muster under s. 2(d).Recognizing this, Dunmore attenuated the requirement of an individual analogue. If it can bedemonstrated that a restriction on a group activity is an attack on the associational nature of theactivity, a s. 2(d) claim may yet succeed even if no direct analogy can be made between thegroup activity and a lawful individual counterpart.[165] This observation about how “qualitatively” different activities exist was aimed atexplaining why certain activities which did not have an individual analogue must be protected inorder to protect the freedom to form an association. The disposition in Dunmore turned onwhether the lack of protection for agricultural employees was a “substantial interference” to theability of workers to form an association (paras. 22-23). To suggest, in hindsight, that “[a]fterDunmore, there could be no doubt that [s. 2(d)] extends to realization of collective, as distinctfrom individual, goals” as the Chief Justice and LeBel J. say at para. 32 (emphasis added), is tosubstantially overstate the holding in Dunmore.

C. An Express Break With Precedent in Health Services[166] While the basic framework set down in the Trilogy had stood for some 20 years, theCourt decided to break with this line of precedent in Health Services. In that case, the majorityheld that s. 2(d) protects a right to collective bargaining and imposes a duty on employers tobargain in good faith. Such a right could not be accommodated within the framework set downby the Trilogy and followed in subsequent cases, and so the majority opted to overturn that line2011 SCC 20 (CanLII)of precedents altogether.[167] The overarching reason advanced for rejecting the Trilogy’s interpretation of s. 2(d)was that it reflected a “decontextualized” rather than “purposive” approach to Charterinterpretation: Health Services, at para. 30. The majority in Health Services found thatinsufficient attention had been paid to the close connection between freedom of association andlabour relations (specifically trade unionism), and that the intimate ties between the two impliedthat s. 2(d) should be held to protect a broader set of entitlements than the Trilogy’s approachcould support. Under this view, the main problem with the Trilogy’s approach was that it did notextend a right to “collective bargaining”, the protection of which was, in the majority’s view, acentral purpose of freedom of association (para. 86).[168] In extending constitutional protection to collective bargaining, the majority in HealthServices viewed this constitutional right as including an obligation on parties to bargain in goodfaith. The majority in Health Services described the protection afforded under s. 2(d) as follows,at para. 90:

. . . the state must not substantially interfere with the ability of a union to exertmeaningful influence over working conditions through a process of collectivebargaining conducted in accordance with the duty to bargain in good faith. Thus theemployees’ right to collective bargaining imposes corresponding duties on theemployer. It requires both employer and employees to meet and to bargain in goodfaith, in the pursuit of a common goal of peaceful and productive accommodation.In fact, the majority went so far as to say that “the duty to consult and negotiate in good faith” is“the fundamental precept of collective bargaining” (para. 97).2011 SCC 20 (CanLII)[169] The decision in Health Services purported to impose two limitations on this right.First, the right was said not to cover all aspects of “collective bargaining”, as that term isunderstood in the statutory labour relations regimes based upon the Wagner model that are inplace across the country. The Wagner model refers to Canadian variants of the National LaborRelations Act, 49 Stat. 449 (1935) (“Wagner Act”), which was enacted into law in the UnitedStates during the Depression. By the end of the 1930s, most Canadian provinces had passedlegislation incorporating the main objectives of the Wagner Act. The Wagner model has fourlegislative hallmarks: explicit recognition of the right of employees to belong to a trade union oftheir choice; protections against employer coercion or interference with organizing activities,known as unfair labour practices provisions; a duty upon employers to bargain in good faith withtheir employees’ unions; and a dispute resolution mechanism for resolving impasses: see G. W.Adams, Canadian Labour Law (2nd ed. (loose-leaf)), at p. 1-11.[170] Second, it was said not to be aimed at securing a particular outcome in a labourdispute, or guaranteeing access to any particular statutory scheme: see Health Services, at para.

19. Nonetheless, the majority held that the process of good faith collective bargaining demandsthat unions and employers engage with each other and “make a reasonable effort to arrive at anacceptable contract”: Health Services, at para. 101.[171] The Chief Justice and LeBel J. say that Health Services “follows directly” from thefinding in Dunmore, because the government action in that case “rendered the meaningfulpursuit of [workplace goals and collective bargaining activities] impossible and effectively2011 SCC 20 (CanLII)nullified the right to associate of its employees” (para. 38). However, as I have discussed above,this conflates two arguments. The first is that restrictions on the ability to associate, eitherdirectly or because the government interfered with an activity because of its “associationalnature”, are unconstitutional, which was the finding in Dunmore. The second is thatgovernments are required to provide legislation which enhances the ability of an existingassociation to pursue its goal of negotiating a collective agreement, which was the finding inHealth Services, but was contrary to Dunmore. As noted above, an application of the actualholding in Dunmore would have asked only if the government substantially interfered with theability to associate.IV. Section 2(d) of the Charter Does Not Protect Collective Bargaining[172] I now turn to the fundamental question in this case: namely, whether Health Serviceswas wrong to constitutionalize collective bargaining. In my respectful view, Health Serviceswas indeed wrong. The problems relating to this aspect of Health Services can be grouped intothree categories.

[173] First, the collective bargaining right recognized in Health Services is inconsistentwith the purpose of s. 2(d). As I will explain, the interpretation of s. 2(d) adopted by themajority in Health Services is unsound in principle for a number of reasons, and the correctconceptual framework for s. 2(d) is that established by the Trilogy and applied in subsequentcases. Section 2(d) does not protect a right to collective bargaining.[174] Second, the reasons advanced in Health Services for protecting collective bargaining2011 SCC 20 (CanLII)under s. 2(d) do not support that conclusion. The majority in Health Services found that thehistory of Canadian labour law, international law, and Charter values all pointed in favour ofextending the guarantee of freedom of association to include collective bargaining. While all ofthose factors support constitutional recognition of the freedom of workers to associate, they donot support the right to collective bargaining.[175] Third, the approach to collective bargaining in particular, and s. 2(d) in general,articulated in Health Services raises significant problems relating to workability. In my view, theframework established in Health Services is both inherently unstable and is a vehicle for theimposition of judicial policy preferences.[176] I now address each of these problems in turn.A. The Collective Bargaining Right Recognized in Health Services Is Inconsistent With thePurpose of Section 2(d)

[177] There are five reasons why the collective bargaining right recognized by HealthServices is inconsistent with the purpose of s. 2(d). First, the analysis in Health Servicesimproperly assigned collective dimensions to an individual right. Second, Health Servicesassigned positive obligations to the essentially negative freedom of association. Third, thereasons in Health Services replaced a content-neutral approach to s. 2(d) freedom and adopted anapproach to s. 2(d) which privileges certain associations over others. Fourth, Health Services2011 SCC 20 (CanLII)elevated contracts — collective bargaining agreements — above statutes and disrupted theordinary hierarchy of laws. Fifth, the analysis in Health Services departs from a long-standingprinciple of judicial deference in the field of labour relations.(1) Section 2(d) Protects Individual Interests, Not Group Interests(a)Individual Freedoms Versus Collective Rights[178] First, Health Services reinterpreted an individual freedom as giving rise to collectiverights with no individual rights foundation. This reinterpretation of the scope of s. 2(d) was adeparture from previous jurisprudence that is not justified by the purpose of the Charterguarantee. The series of cases beginning with the Alberta Reference established that the freedomof association is an individual freedom which is intended to prevent the government frominterfering with associations by treating groups differently than it treats individuals.[179] Health Services expanded s. 2(d) to protect collective rights which meant thatindividuals who are members of specific groups now enjoy greater constitutional rights thanthose who are not. In particular, following Health Services, workers’ associations enjoy a robust

ight to bargain because employers are constitutionally obligated to bargain with theirassociation. Individuals who are not members of an association, on the other hand, have noconstitutional right to oblige their employers to bargain.[180] While the Charter may protect certain collective rights, freedom of association doesnot fall into that category. Where a particular Charter guarantee extends greater rights to agroup than to an individual, that effect is made clear in the text of the particular guarantee. For2011 SCC 20 (CanLII)example, the right to minority language education in ss. 23(1) and 23(2) is subject to there beinga sufficient number of eligible children to warrant public expenditures on minority languageeducation (s. 23(3)). In this way, the guarantee in s. 23 is predicated on the existence of a group.Minority language educational rights thus have a “unique collective aspect even though therights are granted to individuals” Doucet-Boudreau v. Nova Scotia (Minister of Education), 2003SCC 62, [2003] 3 S.C.R. 3, at para. 28, per Iacobucci and Arbour JJ. Similarly, s. 35(1) of theConstitution Act, 1982 recognizes the “existing aboriginal and treaty rights of the aboriginalpeoples”. Treaty rights, being rights established in a treaty between a group of aboriginals andthe Crown, undoubtedly have a collective dimension to them insofar as they vest rights in aparticular group. See, for example, R. v. Powley, 2003 SCC 43, [2003] 2 S.C.R. 207, at paras.10-11. By contrast, s. 2(d) provides that “[e]veryone has . . . freedom of association”. Thislanguage supports an interpretation of s. 2(d) as an individual freedom. See P. W. Hogg,Constitutional Law of Canada (5th ed. Supp.). vol 2, at pp. 37-1 and 37-2.(b)Qualitative Differences Between Individuals and Associations Do NotChange the Individual Nature of Freedom of Association

[181] The Chief Justice and LeBel J. say that Health Services was “consistent with theprevious cases on the issue of individual and collective rights” (para. 65). I must respectfullydisagree. McIntyre J. in the Alberta Reference made the point, which is the point that I make inmy reasons, that freedom of association protects the right of groups to engage in activities thatare lawful or constitutionally protected for individuals. The reliance on a purposive approach tointerpretation advanced by the majority in Health Services opens the door to s. 2(d) being2011 SCC 20 (CanLII)interpreted as a generalized group right as opposed to an individual right, which is aninterpretation that is not consistent with this Court’s prior jurisprudence. My colleagues’reference to the interpretation of s. 2(d) advanced by Dickson C.J. in the Alberta Reference, wasnot a position accepted by the majority and, as my reasons point out, by constitutionalizing theright to bargain collectively Health Services departed from the position of the majority in thatcase.[182] As I will now explain, although in Dunmore, s. 2(d) was found to protect groupactivity that was “qualitatively” different from individual activity, s. 2(d) cannot be used to givegroups greater constitutional protection than individuals.[183] The majority in Health Services, in rejecting the view that s. 2(d) only protects thoseactivities that may be lawfully pursued on the individual level, said that Dunmore had overtakenthe notion that freedom of association applies only to activities capable of performance byindividuals. Dunmore cannot be interpreted in such a manner. In Dunmore, Bastarache J.explained that to limit s. 2(d) to activities that are performable by individuals might render futilecertain fundamental initiatives, since some collective activities may, by their very nature, be

incapable of being performed by an individual. As I explained above, in the view of BastaracheJ., certain activities are, when performed by a group, “qualitatively” different from thoseactivities performed solely by an individual, and this qualitative difference may meritconstitutional protection for the collective activity (Dunmore, at para. 17). With respect,Dunmore does not stand for the proposition that such qualitative differences open the door to thenotion of group rights entirely unconnected to individual rights.2011 SCC 20 (CanLII)[184] I accept that there may be qualitative differences between individuals acting aloneand individuals acting in concert. Professor Langille refers to the example of choir singing. SeeB. Langille, “The Freedom of Association Mess: How We Got into It and How We Can Get outof It” (2009), 54 McGill L.J. 177 (“Freedom of Association”), at p. 185. While he ultimatelybelieves that the choir metaphor should not apply to determine the scope of s. 2(d) rights, in myopinion the metaphor is apt in explaining the limited type of qualitatively different groupactivities that may be protected by s. 2(d). A group of individuals singing together in a choir canproduce musical effects, such as harmonies and counterpoint, that an individual singing alonecannot. Such effects are not just an accumulation of individual voices singing in exactly thesame way. Rather, they produce a musical effect that is fundamentally different from what a loneindividual can produce. In other words, the whole is not merely the sum of its parts. The abilityto create such effects through the coordination of individual action is one reason why freedom ofassociation is protected. I believe that Dunmore found that s. 2(d) may protect voluntarycollective activity which is “qualitatively” different from individual activity in this limited way.

[185] In my view, the question is not whether the activity is susceptible of beingperformed, in exactly the same manner, by an individual acting alone. A choir singing harmonymay produce sound that is qualitatively distinct from an individual voice, but it is nonethelessproduced by a group of individuals voluntarily singing together. One individual is free to sing inone octave, another is free to sing in another octave. A harmony may result if they choose toperform these individual activities in concert with one another. And if the state were to outlaw2011 SCC 20 (CanLII)harmony, it would be attacking the individuals’ ability to do side by side at the same time whateach may do apart. Thus, while harmony arising out of choir singing may have no directindividual analogue, a legislative attack on harmony would be an attack on the association itself,and should not be permitted under s. 2(d). Section 2(d) may recognize qualitative differencesbetween individual and group activity, without altering the individual nature of freedom ofassociation.[186] While s. 2(d) protects “qualitatively” different activities which are an emergent resultof free individual organization, it does not impose a constitutional obligation on government tocreate out of whole cloth a set of qualitative differences that make the group more powerful thanit otherwise would be, even if such differences would enhance its ability to achieve its goals.[187] Health Services did not purport to give constitutional force to a right to individuals tocompel employers to bargain in good faith with them. Individuals who are not members of anassociation have no such right. Thus, the constitutional right to compel employers to bargain ingood faith with associations must be a unique group right, not an activity emergent from anindividual right.

(2) Section 2(d) Protects Freedoms Rather Than Rights[188] Second, the majority concluded in Health Services that s. 2(d) imposes a duty tobargain in good faith. It explained this conclusion at para. 90 finding that “the employees’ rightto collective bargaining imposes corresponding duties on the employer” requiring “bothemployer and employees to meet and to bargain in good faith, in the pursuit of a common goal ofpeaceful and productive accommodation”.2011 SCC 20 (CanLII)[189] Thus, Health Services stands for the proposition that the right to collectivebargaining includes an entitlement to have “meaningful” influence over working conditions. Inother words, the right includes an assurance that a real dialogue will take place between anemployee association and the employer. Such assurance can only be provided if the employer isunder a duty to engage with representations made by the association and make a good faithattempt to bargain to pursue the goal of accommodation. In the absence of such a duty, theemployer would be free to refuse to negotiate with the employee association. Thus, according toHealth Services, if s. 2(d) protected only the ability of workers to make collective representationsand did not impose a duty on the employer to bargain in good faith, it would fail to protect theright to collective bargaining.[190] In my view, this proposition suffers from an important defect: it transforms s. 2(d)from a freedom into a “positive” right by imposing an obligation to act on third parties (i.e. theemployer). There is a difference between saying that an individual has the freedom or liberty todo something, on the one hand, and saying that he or she has the right to do it, on the other. A

person is free or at liberty when there is an absence of obstacles or impediments. Nothing furtheris required beyond this absence. However, to say that a person has a “right” is to implysomething further. It suggests that a claim can be made on someone else in order to be providedwith the object of the right.[191] It is possible to describe a freedom in terms of rights, but this may only serve to blurthe distinction between what is being protected in either case. A freedom exists to protect a2011 SCC 20 (CanLII)sphere of autonomy, an area within which the individual will encounter no obstacles. A right, onthe other hand, exists to provide an individual with a claim to some specific thing. Generally, afreedom can be described as a right only if it is recognized that the right is “negative” incharacter, that is, only if it is described as an entitlement to be free of restriction or prohibition.[192] An example of how a freedom can sometimes be described using the word “right”can be found by examining ss. 7 to 12 of the Charter. When the Charter uses the term “right”,as it does in ss. 7 to 12, either a positive entitlement is introduced, or a right to be free of somerestriction or prohibition (i.e. a freedom) is introduced. For the positive rights, an individual isgiven a right to some form of state action, e.g. to be advised of a right to counsel upon arrest.For the negative rights, the individual is given a right to be free from some form of restriction orprohibition, e.g. a right not to be arbitrarily detained or imprisoned. As discussed above, theright to be free of a restriction or a prohibition is a description that encompasses the “negative”character of the right, and is simply another way to describe a freedom.

[193] The Chief Justice and LeBel J. suggest that my reasons seek to maintain the“consistently rejected . . . rigid distinction” between freedoms and positive rights (para. 69).Referring to Ontario (Public Safety and Security) v. Criminal Lawyers’ Association, 2010 SCC23, [2010] 1 S.C.R. 815 (“CLA”), by way of analogy, they say that in some circumstances aCharter freedom, such as freedom of expression under s. 2(b), “may require the government todisclose documents to the public in order to enable meaningful discourse” (para. 69). Therefore,2011 SCC 20 (CanLII)they say s. 2(d) of the Charter “may require the state to act positively to protect the ability ofindividuals to engage in fundamentally important collective activities” (para. 70). While I wouldagree that in “exceptional circumstances” (Dunmore, at para. 21; Delisle, at para. 33) a Charterfreedom may require positive state action, I do not agree that CLA is an apt analogy.[194] Creating positive rights in exceptional circumstances does not dilute the coherence ofthe distinction between freedoms and rights. This is because those positive rights will only begranted when they are genuinely derivative of a freedom. A derivative right is one that isnecessary to allow individuals to exercise a fundamental freedom. In CLA, the right to accessgovernment information was considered to be “a derivative right which may arise where it is anecessary precondition of meaningful expression on the functioning of government” (para. 30(emphasis added)). This Court has found that a derivative right must be “inextricably tied to”(Canadian Broadcasting Corp. v. New Brunswick (Attorney General), [1996] 3 S.C.R. 480(“CBC”), at p. 496) a “necessary precondition” (Dunmore, at para. 42) and “clearly within theambit of the freedom” (CBC, at p. 496). However, the core of any derivative right is that withoutthat right individuals will not be able to exercise their Charter freedom.

[195] By its very nature, a derivative right must be necessary to the exercise of a freedom,not constitute a stand-alone right itself. Therefore the ability to exercise the freedom itself mustbe looked to in order to determine whether any proposed right is genuinely derivative. Forexample, in R. v. National Post, 2010 SCC 16, [2010] 1 S.C.R. 477, news organizations werearguing that they should have s. 2(b) protection for confidential sources. In rejecting thisargument, this Court said that this position was “built on the premise that protection of2011 SCC 20 (CanLII)confidential sources should be treated as if it were an enumerated Charter right or freedom” butthat “is not so” (National Post, at para. 38). In CBC a positive right of access to courts wassought in order to allow journalists to report on court proceedings. La Forest J., writing for theCourt, stated that “courts . . . must be open to public scrutiny and to public criticism of theiroperations” (CBC, at p. 494). Without the derivative right of access to the courts, it would beimpossible for the public (and journalists) to offer criticism in the exercise of their s. 2(b)freedom of the press.[196] In Dunmore, a right was derived from s. 2(d) which required positive governmentalaction that was “necessary for [employees] to exercise their constitutional freedom to form andmaintain associations” (para. 67 (emphasis added)).[197] A right to collective bargaining is not a derivative right in the sense in which it hasbeen recognized in CLA, CBC and Dunmore. As discussed above, the essence of freedom ofassociation is that it enables individuals to do in association what they could do as individuals.Dunmore is consistent with this principle, in the manner that I have just described. By contrast,collective bargaining is not emergent from an activity that an individual alone could do. Rather,

as described in Health Services, it imposes a duty on employers to meet with employees andmake a “reasonable effort to arrive at an acceptable contract” (para. 101). No individualemployee has a right to require an employer to meet and make a reasonable effort to arrive at anacceptable employment contract, which is the right for an employee association created byHealth Services.[198] The Chief Justice and LeBel J. say that collective bargaining is a derivative right2011 SCC 20 (CanLII)because it is a “necessary precondition” to make their choice to associate meaningful.Understood this way, compulsory collective bargaining does not enable association. Rather it isentirely concerned with enhancing the ability of employee associations, once formed, to pursuetheir goals and provide them with a more favourable bargaining position.[199] There is no reason to think that individual employees would not have the exact samedesire for a more favourable bargaining position. Every day in Canada there are individuals whoenter into employment contracts with their employers. Those individuals might also benefit iftheir employers were compelled to negotiate their employment contracts with them. However,individuals do not have a constitutionally mandated right to compel their employers to negotiateover an employment contract with them simply because no such right exists in the Charter.Because no individual has the right to compel an employer to negotiate in good faith over anemployment contract, collective bargaining is not emergent from an activity that an individualalone could do.

[200] Accordingly, a right to collective bargaining is not derivative of a freedom asdescribed in CLA, CBC and Dunmore. It is a stand-alone right created by the Court, not by theCharter.[201] Thus, to grant a right to collective bargaining under s. 2(d) purportedly as derivativeof the freedom of association would not be consistent with the approach taken by this Court in itsderivative rights jurisprudence in relation to the Charter. Such a derivative right will arise only2011 SCC 20 (CanLII)where it is a “necessary precondition” to the exercise of the freedom (CLA, at para. 30). Thiscareful approach is necessary to adhere to the distinction between Charter rights and freedomsand prevents transforming freedoms into rights.[202] Viewed in this light, it is clear that s. 2(d) is intended to protect a sphere ofindividual autonomy or liberty, and not to enhance by state action the capacity of individuals todo a particular activity more effectively or to guarantee that any particular endeavour for whichassociation might take place will succeed.(3) Section 2(d) Does Not Privilege Some Associations Over Others[203] A third error in the approach to s. 2(d) in Health Services is that it conceives of s.2(d) as privileging some associations over others. I cannot agree with an approach to s. 2(d)which requires this Court to decide which associations and associational objectives are worthy ofconstitutional protection and which are not.

[204] Health Services rejected the grounds advanced in earlier decisions for excludingcollective bargaining from the Charter’s guarantee of freedom of association on the basis thatthey did not “withstand principled scrutiny”: Health Services, at para. 22. The majority inHealth Services held that the “overarching” problem with these earlier decisions, particularly theAlberta Reference and PIPSC, was that they had pursued a “decontextualized”, as opposed to a“purposive”, approach to freedom of association that had ignored the differences between2011 SCC 20 (CanLII)organizations and treated all organizations in the same way: “Whatever the organization — be ittrade union or book club — its freedoms were treated as identical” (Health Services, at para. 30).Having decided that the objects of trade unions were meritorious of protection, the majoritydecided that the protection of trade unions’ objects required the recognition of the duty tobargain in good faith.[205] These earlier cases did indeed exhibit a content-neutral approach to freedom ofassociation in the sense that they did not claim to privilege particular associations. HealthServices erred in saying that these approaches were not purposive.[206] The purposive approach to Charter interpretation was explained by Dickson J. (as hethen was) in R. v. Big M Drug Mart Ltd., [1985] 1 S.C.R. 295 (“Big M”), at p. 344:The meaning of a right or freedom guaranteed by the Charter [is] to be ascertainedby an analysis of the purpose of such a guarantee; it [is] to be understood, in otherwords, in the light of the interests it [is] meant to protect.In my view this analysis is to be undertaken, and the purpose of the right orfreedom in question is to be sought by reference to the character and the largerobjects of the Charter itself, to the language chosen to articulate the specific right or

freedom, to the historical origins of the concepts enshrined, and where applicable, tothe meaning and purpose of the other specific rights and freedoms with which it isassociated within the text of the Charter. The interpretation should be, as thejudgment in [Hunter v. Southam Inc., [1984] 2 S.C.R. 145,] emphasizes, a generousrather than a legalistic one, aimed at fulfilling the purpose of the guarantee andsecuring for individuals the full benefit of the Charter’s protection. At the same timeit is important not to overshoot the actual purpose of the right or freedom inquestion, but to recall that the Charter was not enacted in a vacuum, and musttherefore, as this Court's decision in Law Society of Upper Canada v. Skainker, 1984CanLII 3 (S.C.C.), [1984] 1 S.C.R. 357, illustrates, be placed in its proper linguistic,philosophic and historical contexts. [Emphasis in original.]2011 SCC 20 (CanLII)[207] The kind of “context” to which the reasons in Health Services refer is very differentfrom that being discussed here. Health Services suggested that a “generic” approach to definingfreedom of association is inappropriate because different groups must have different freedoms:the needs of a book club are not the same as those of a trade union, and assuming them to beentitled to precisely the same thing under s. 2(d) would be a mistake (para. 30). However, the“context” that is relevant to a purposive interpretation of Charter freedoms is not the context ofthe individuals who happen to be exercising that freedom in a given case. Rather, a purposiveinterpretation of s. 2(d) requires that one place freedom of association in its linguistic,philosophic and historical contexts. The origins of the concept, the words used to describe it,and the philosophical principles on which it relies will define the scope of s. 2(d) protection. Theextent of that protection should not change depending on the particular factual context orcircumstances in which s. 2(d) is being applied.[208] In the Alberta Reference, both Dickson C.J. and McIntyre J. did in fact adopt apurposive approach to interpreting the Charter’s guarantee of freedom of association. (pp. 363and 393-94) It was not their failure to apply such an approach that led to the conclusion that all

associations must receive identical freedoms under s. 2(d). Rather, it was the application of thatapproach that correctly led them to recognize that a guarantee protecting a fundamental freedomto associate must be interpreted in a content-neutral fashion as between different associations.[209] The protection of fundamental freedoms should not involve the Court in adjudicatingthe relative values of the way in which individuals exercise those freedoms. Just as this Courthas not adjudicated on the relative value of a religion or its tenets under s. 2(a) or assessed the2011 SCC 20 (CanLII)relative value or content of a given exercise of freedom of expression under s. 2(b), so too shouldthis Court not privilege some associations over others under s. 2(d): Syndicat Northcrest v.Amselem, 2004 SCC 47, [2004] 2 S.C.R. 551, at para. 50.[210] Another example of a content-neutral approach can be found in Big M where thisCourt found:In my view, however, as I read the Charter, it mandates that the legislativepreservation of a Sunday day of rest should be secular, the diversity of belief andnon-belief, the diverse socio-cultural backgrounds of Canadians make itconstitutionally incompetent for the federal Parliament to provide legislativepreference for any one religion at the expense of those of another religiouspersuasion. [Emphasis added; p. 351.]Big M considered the purpose of the Charter, recognized the Christian underpinning of theimpugned law, and concluded that by imposing “a sectarian Christian ideal, the Lord’s Day Actworks a form of coercion inimical to the spirit of the Charter and the dignity of all non-

Christians” (p. 337). Dickson J.’s words in Big M expressly say that there is no constitutionalbasis to prefer one religion over others.[211] In an article critical of the Health Services decision, Professor Langille describes as“chilling” the suggestion that the Court should “weig[h] the harm of banning book clubs ascompared to banning collective bargaining and relegat[e] the former to a lower level of concern”:“Freedom of Association”, at p. 185. He goes on to state:2011 SCC 20 (CanLII)We should begin with a reminder that this is, after all, a constitution that is beinginterpreted. It is an entrenched bill of rights and freedoms. The Charter value offreedom of association is a basic one. It applies to all Canadians, and the role of theCourt is to interpret it in a principled way. There is, in my view, not one freedom ofassociation for Nova Scotia and another for Ontario, nor one for students and one fortenants, nor one for the service sector and another for the manufacturing sector. Ifthere were, this freedom would not be a matter of fundamental justice. It would be,to use the Court’s word, “contextual”. [p. 202][212] Like Professor Langille, I question whether the approach advocated in HealthServices accords with a purposive interpretation of Charter rights. In Health Services, themajority appeared to be inquiring into the purpose of an activity to see if it merits constitutionalprotection. This approach requires judges to select among a range of objects and activities on thebasis of their general “importance” to society rather than their connection to the freedom toassociate. It is inappropriate for the Court to engage in this sort of inquiry in defining the scopeof a constitutional right. It would be assessing whether, as a matter of policy, a given activitymerits constitutional protection. In my view, the purpose of s. 2(d) is to protect associationalactivity against precisely such value judgments. A “contextual” approach of the sort proposed in

Health Services would in fact be contrary to the purpose of s. 2(d) as it requires the judiciary toengage in these value judgments itself: see R. K. Basu, “Revolution and Aftermath: B.C. HealthServices and Its Implications” (2008), 42 S.C.L.R. (2d) 165, at pp. 186-87. In R. v. AdvanceCutting & Coring Ltd., 2001 SCC 70, [2001] 3 S.C.R. 209, LeBel J. recognized that such a rolewould be inappropriate for the Court and would take the Court beyond the scope of s. 2(d):If this constitutional guarantee were to apply to the widest range of associations withthe most diverse objects and activities, extending constitutional protection to alegislative creation like collective bargaining might have unforeseeableconsequences and widen the sphere of constitutional protection to undefined andunknowable activities, well beyond the proper domain of s. 2(d). [para. 180]2011 SCC 20 (CanLII)[213] My colleagues say that the “consideration of goals [of a particular association]cannot be avoided” as Charter rights “must be interpreted in a purposive way — having regardfor the purposes, or goals, they serve. They say that a “content-neutral right is too often ameaningless right” (para. 75). Based on my colleagues’ approach, meaningful freedom ofassociation requires the state to coerce employers into negotiating in good faith with employeeassociations.[214] However, as I have just discussed, their approach would require the courts to focuson the purposes of a particular association rather than the purpose of freedom of associationfound in the Charter itself. Their approach diverges from the purposive approach to Charterinterpretation explained in Big M. Rather than focussing on the linguistic, philosophic andhistorical contexts of the right itself, their approach focusses on the particular aims and goals ofthe association in question. The inquiry shifts from a consideration of the purpose and context of

the Charter, to a consideration of what activities the courts believe are normatively andsubjectively more important. The result of the approach in Health Services was that the goal ofemployee associations — imposing the obligation of collective bargaining on employers — isconstitutionally entrenched, while the goals of other associations were not. It is difficult to seehow this result can be anything other than a judicial endorsement of the importance of collectivebargaining over other unconstitutionalized associational activities.2011 SCC 20 (CanLII)[215] A content-neutral approach does not allow for constitutional protection of collectivebargaining and no constitutional protection of the aims and objects of other associations. Shortof protecting all aims and objects of associations, s. 2(d) cannot be interpreted in a fashion whichis neutral as between different associations while imposing a duty of collective bargaining onemployers and groups of employees.(4) Section 2(d) Does Not Give Constitutional Status to Contracts[216] A fourth difficulty with the collective bargaining right in Health Services is that itplaces contracts above statutes in the traditional hierarchy of laws. Although Health Servicespurported to constitutionalize the process of collective bargaining rather than its fruits, it in factgranted constitutional protection to the collective agreements on the basis that they were thefruits of that process. In Health Services, the challenged legislation had the effect of invalidatingportions of existing collective agreements and consequently “undermining the past bargainingprocesses that formed the basis for these agreements”: Health Services, at para. 113. This wasfound to violate s. 2(d) (para. 136).

[217] In response to this argument, the Chief Justice and LeBel J. write that HealthServices did not hold that “labour contracts could never be interfered with by legislation” (para.76). However, if as Health Services holds, it is unconstitutional for a statute to legislativelynullify “significant contractual terms”, then it must logically follow that those “significantcontractual terms” have been elevated above statutes. The actual effect of Health Services isquite the opposite from what my colleagues assert it to be.2011 SCC 20 (CanLII)[218] My view is consistent with that of Professor Hogg who observed that “[t]his rulingelevated collective agreements above statutes in the hierarchy of laws, and granted them virtuallythe same status as the provisions of the Charter itself”: p. 44-9. Indeed, in the Reference re ss.193 and 195.1(1)(c) of the Criminal Code (Man.), [1990] 1 S.C.R. 1123 (the “ProstitutionReference”), at p. 1171, Justice Lamer (as he then was) explicitly rejected the idea that aconstitutional guarantee safeguarding freedom of contract was included under the CanadianCharter.(5) Courts Have Afforded the Legislature Significant Deference in theApplication of Section 2(d) to the Field of Labour Relations[219] A final difficulty with the approach to s. 2(d) taken in Health Services is that itexplicitly rejected judicial deference by judges towards the legislature in labour relations.Indeed, the majority indicated that Courts had previously taken an “overbroad view” of judicialdeference: Health Services, at para. 26. While judicial deference has its limits, the generalapproach of judicial deference in the field of labour relations is well supported by precedent andis sound in principle. I am of the view that the reasons for judicial deference strongly militate

against constitutionalizing the right to collective bargaining. In my respectful opinion, themajority erred in Health Services by removing decision-making power on this question fromParliament and the provincial legislatures.[220] For nearly twenty years between the Trilogy and Health Services, a majority of thisCourt was consistently of the view that judges should defer to legislators on labour relationsmatters. As discussed by LeBel J. at paras. 156-62 of Advance Cutting & Coring, this position2011 SCC 20 (CanLII)stemmed from a recognition that the management of labour relations requires a delicate exercisein reconciling conflicting values and interests and that the political, social and economicconsiderations that this exercise raises lie largely beyond the expertise of the courts. Thisposition was also in line with history. The law of collective bargaining, as it has developed inCanada since the Depression and the Second World War, as well as union and employer conflictslike strikes and lockouts, have been subject to legislative control based on government policyrather than judicial intervention.[221] Beginning with the decisions in the labour Trilogy and continuing through PIPSC,Lavigne v. Ontario Public Service Employees Union, [1991] 2 S.C.R. 211, Delisle, and AdvanceCutting & Coring, this Court has consistently deferred to elected legislatures on issues of labourrelations. In Advance Cutting & Coring, Justice LeBel, writing for himself and Gonthier andArbour JJ., described the Court’s deferential approach as a “non-intervention policy” (para. 160).LeBel J. upheld the legislative regime at issue in the appeal:

The question at stake in this appeal should thus be left to the political process.Such a solution would be consistent with the jurisprudential attitude of the Court thatwas summarized above. It retains a balance in the application of the Charter. Itleaves the legal management of labour relations to Parliament and legislatures aswell as to the parties to labour agreements, as the majority of the Court has heldconsistently since the labour law trilogy of 1987. . . .This limited and prudentapproach to court interventions in the field of labour relations reflects a properunderstanding of the functions of courts and legislatures. [Emphasis added; para.239.]The principle of deference provides a reason for choosing a more restrained version of s. 2(d)2011 SCC 20 (CanLII)when the Court is faced with competing visions of what s. 2(d) protects.[222] My colleagues imply that my view on deference creates a “judicial ‘no go’ zone” orcreates a “Charter-free zone” for labour relations (paras. 78-80). That is not a correctunderstanding of my position. Clearly if legislatures, for example, chose to enact legislation thatpermitted discrimination in labour relations or precluded the ability to form an employeeassociation, that legislation would be subject to judicial review for being non-compliant with theCharter. In matters of labour relations, the Charter still applies. If my colleagues believe that myview on deference creates a “Charter-free zone”, they have misunderstood my reasons.[223] In my opinion, the principle of judicial deference in the field of labour relations isrooted in two underlying concerns. The first of these is that the Court is ill-equipped to carry outthe requisite balancing of interests in the labour relations context. Since McIntyre J.’s commentsin the Alberta Reference, this Court has recognized that labour relations are an “extremelysensitive subject” premised on “a political and economic compromise between organized labour— a very powerful socio-economic force — on the one hand, and the employers of labour — an

equally powerful socio-economic force — on the other”: see Alberta Reference, at p. 414, perMcIntyre J. While the courts are responsible for safeguarding the ability of individuals to docollectively that which they have the right to do as individuals, the judiciary is ill-equipped toengage in fine adjustments to the balance of power between labour and management.[224] The Chief Justice and LeBel J. write that this Court has “distanced itself” from theapproach of McIntyre J. in the Alberta Reference, and now deals with deference under s. 1, rather2011 SCC 20 (CanLII)than in outlining the scope of s. 2(d) (para. 81). With respect, I think this point is debatable.While that may have been the approach adopted by the majority in Dunmore, there are a numberof examples of this Court dealing with deference at the s. 2(d) stage of the analysis. Forexample, LeBel J. dealt with deference at the s. 2(d) stage of the analysis in Advance Cutting &Coring. Another example is Delisle, where Bastarache J. for the majority (writing on behalf ofGonthier, McLachlin (as she then was), and Major JJ.), dealt with the concept of deference underthe s. 2(d) stage of the analysis. Bastarache J. wrote that he shared the opinion of McIntyre J. inthe Alberta Reference, writing that “[f]reedom of association does not include the right toestablish a particular type of association defined in a particular statute; this kind of recognitionwould unduly limit the ability of Parliament or a provincial legislature to regulate labourrelations” (Delisle, at para. 33).[225] The second underlying concern justifying judicial deference in the area of labourrelations is that courts should avoid extending constitutional protection to a particular statutorymodel of labour relations. Different statutory models of labour relations may be appropriate indifferent socio-economic contexts, and the courts should avoid defining as a matter of

constitutional law the particular framework according to which all Canadian labour relationsmust be structured for the indefinite future. Parliament and the provincial legislatures should notbe precluded from fashioning appropriate labour relations regimes that are responsive to therelevant socio-economic contexts.[226] In Health Services, this Court departed from a long-standing course of judicialdeference in the field of labour relations. The majority intervened to adjust aspects of the2011 SCC 20 (CanLII)balance of power between unions, employers and individual employees, and, as a consequence,constitutionalized prominent features of the Wagner model under s. 2(d) of the Charter, namelycollective bargaining.[227] Although the majority insisted that it was not enshrining a particular model of labourrelations, and the Chief Justice and LeBel J. say that such a conclusion was “repeatedly rejected”(para. 77), I believe that such a conclusion is inescapable. As my colleague Deschamps J.observes, the duty to negotiate in good faith enshrined by Health Services “is one of thehallmarks of the Wagner model and that inevitably entails a number of statutory components”(para. 304). Professor Hogg writes:The majority . . . claimed that it was not constitutionalizing “a particular model oflabour relations”. But that is exactly what it was doing: North American labourrelations regimes are based on the American Wagner Act of 1935. The Wagnermodel of compulsory collective bargaining with a single union compulsorilyrepresenting all members of a bargaining unit has not been adapted outside theUnited States and Canada, and, even in the United States, compulsory arbitration orother wage-setting mechanisms often replace collective bargaining in the publicsector. Presumably, only compulsory collective bargaining on the Wagner modelwill now pass muster in Canada. The majority even claimed that the Court had been

wrong in the past to exercise “judicial restraint in interfering with governmentregulation of labour relations”. But, without any clear prescription in the Charter,there is much to be said for leaving the regulation of labour relations to electedlegislative bodies (and the sanction of the ballot box). [p. 44-8][228] As Professor Langille points out, examination of the different labour relationsregimes of the roughly 180 that compose the International Labour Organization (“ILO”), revealsa range of ways a government might choose to structure labour relations: see B. Langille, “Why2011 SCC 20 (CanLII)Are Canadian Judges Drafting Labour Codes – And Constitutionalizing the Wagner Act Model?”(2009-2010), 15 C.L.E.L.J. 101, at p. 107. By way of illustration, bargaining betweenemployers’ associations and trade unions is entirely voluntary in Germany; specifically, there isno obligation on employers’ association to bargain in good faith, as there is in North Americanlabour relations regimes: see generally K. G. Dau-Schmidt, “Labor Law and Industrial Peace: AComparative Analysis of the United States, the United Kingdom, Germany, and Japan Under theBargaining Model” (2000), 8 Tul. J. Int’l & Comp. L. 117.[229] More fundamentally, the fact that the Wagner model of collective bargaining iscurrently the dominant mode of resolving labour relations issues today does not mean that thiswill always be the case. Peter A. Gall sounded this note of caution in the early years of theCharter:Collective bargaining is extremely important in our society and has been for sometime now. But will it always be so? Can we confidently predict that 50 or even 20years from now collective bargaining will still be the primary activity of tradeunions? Or will we have adopted some other technique for setting terms andconditions of employment, such as full-scale interest arbitration or greater relianceon legislated standards. If we cannot reject this out of hand, and I do not think we

can, then we must seriously question whether collective bargaining is the kind ofactivity that warrants constitutional status. The Charter enshrines the fundamentalprinciples of individual liberty. The activities of man may change over time, butthese principles remain constant. Collective bargaining does not have this sametimeless quality, and, accordingly, we should be leery of giving constitutionalprotection under the concept of freedom of association.(“Freedom of Association and Trade Unions: A Double-Edged ConstitutionalSword”, in J. M. Weiler and R. M. Elliot, eds., Litigating the Values of a Nation: TheCanadian Charter of Rights and Freedoms (1986), 245, at p. 248)2011 SCC 20 (CanLII)[230] For these reasons, I am of the view that recognizing a constitutional right tocollective bargaining, as did Health Services, represents an imprudent departure from the courseof judicial deference.B. The Reasons Advanced in Health Services Do Not Support Constitutionalizing CollectiveBargaining Under Section 2(d) of the Charter[231] In the previous section, I pointed to five reasons why the approach to s. 2(d) adoptedin Health Services is inconsistent with both precedent and principle relating to the purpose of s.2(d). In this section, I address the reasons advanced by the majority in Health Services forproviding s. 2(d) protection to collective bargaining. As I understand Health Services, thesereasons were advanced to demonstrate that collective bargaining is a fundamental right thatjustifies it being constitutionalized. With respect, I do not think these reasons withstand scrutiny.[232] Health Services rests its conclusion that s. 2(d) of the Charter contains a right ofcollective bargaining on four propositions, which the majority outlines at para. 20:

First, a review of the s. 2(d) jurisprudence of this Court reveals that the reasonsevoked in the past for holding that the guarantee of freedom of association does notextend to collective bargaining can no longer stand. Second, an interpretation of s.2(d) that precludes collective bargaining from its ambit is inconsistent with Canada’shistoric recognition of the importance of collective bargaining to freedom ofassociation. Third, collective bargaining is an integral component of the freedom ofassociation in international law, which may inform the interpretation of Charterguarantees. Finally, interpreting s. 2(d) as including a right to collective bargaining isconsistent with, and indeed, promotes, other Charter rights, freedoms and values.[Emphasis added.]2011 SCC 20 (CanLII)In this section each of these contentions is addressed.(1) The Continuing Validity of Past Precedents on the Scope of Section 2(d)[233] I have already dealt with the substance of the first proposition in the course ofexplaining why Health Services was wrong to overrule the approach to s. 2(d) of the Charterembodied in the prior jurisprudence, and I need not discuss it further here.(2) Canadian Labour History Does Not Support ConstitutionalizingCollective Bargaining Rights[234] The second reason advanced by the majority in Health Services is that collectivebargaining has historically been recognized in Canada as an integral component of freedom ofassociation: see para. 25. The view that a right to collective bargaining which includes a duty onemployers to bargain in good faith is a pre-statutory feature of Canadian labour law contradictsestablished accounts of the history of labour relations in Canada.

[235] The labour history offered in Health Services in support of this argument isinconsistent with a number of historical accounts of the development of labour law in Canadaand has recently been the subject of intense academic criticism. See E. Tucker, “TheConstitutional Right to Bargain Collectively: The Ironies of Labour History in the SupremeCourt of Canada” (2008), 61 Labour/Le Travail; Langille, “Freedom of Association”, at pp. 191-92; and B. Etherington, at pp. 726-27. For a historical account, see, e.g., J. Fudge and E. Tucker,2011 SCC 20 (CanLII)Labour Before the Law: The Regulation of Workers’ Collective Action in Canada, 1900-1948(2001); J. Fudge, “‘Labour is Not a Commodity’: The Supreme Court of Canada and theFreedom of Association” (2004), 67 Sask. L. Rev. 425.[236] Professor Tucker, whose account of the development of labour relations was invokedin support of the judicial history in Health Services, characterizes the majority’s historical claimsas “flawed” and describes the use of his and other historians’ work as “ironic”, in the sense that itwas used “to support a narrative that is inconsistent with the interpretation of that work (withoutacknowledging that difference of view)” (p. 168). He writes that the majority’s historicalanalysis fails to support the historical proposition that it seeks to defend, “namely that‘Association for purposes of collective bargaining has long been recognized as a fundamentalCanadian right which predated the Charter’” (p. 166).[237] One of the problems in Health Services is that the term “collective bargaining” isused throughout Health Services without it being acknowledged that, from a historicalperspective, there are two meanings that can be ascribed to the term. On the one hand, the term“collective bargaining” refers to self-directed activities engaged in by workers without the

enefit of statutory enhancements or protection, i.e. workers organizing in order to attemptcollective engagement with their employer in the hopes of obtaining better pay and workingconditions. See Tucker, at p. 166.[238] On the other hand, the term is used as shorthand for a particular kind of statutorilyenabled activity. “Collective bargaining”, in the age of the Wagner model, refers to a complexpackage of reciprocal rights and duties imposed on employers and workers alike.2011 SCC 20 (CanLII)[239] The dominance of the Wagner model of labour relations in Canada has caused theterm “collective bargaining” to become virtually synonymous with a specific set of legislativelyimposed obligations, including the requirement of a duty to bargain in good faith. However,collective bargaining, in its original and most basic form, did not involve or require the existenceof statutory obligations.[240] In its decision in Health Services, the majority did not distinguish between theWagner form of collective bargaining and the non-statutory form when stating that the “right” tocollective bargaining had a long history in Canada. This is manifested in the majority’sstatement, for example, that “the duty to consult and negotiate in good faith” is “the fundamentalprecept of collective bargaining”: para. 97. While the duty to bargain in good faith may be afundamental precept of the Wagner model of collective bargaining, it is not a fundamentalprecept of the concept of collective bargaining as it was understood before introduction of theWagner Act or as it is still understood today in many parts of the world.

[241] It is true that there is a long-standing practice of Canadian workers associating forthe purpose of bargaining collectively with their employers. Likewise, it is true that at least sincethe Trade Unions Act of 1872 workers enjoyed a legal freedom to associate for the purpose ofbargaining collectively with their employers without being prosecuted or sued for simply doingso.[242] However, the legal rights of organization, which imposed duties of non-interference2011 SCC 20 (CanLII)on employers, and collective bargaining, which imposed good faith duties of negotiation onemployers, did not exist prior to their enactment in statutes.The establishment of a legal right for workers to associate for the purposes offorming a trade union, in the sense that employers are subject to a concomitant dutynot to interfere with their organizing, however, can only be traced to the freedom oftrade union association legislation passed in the 1930s, while the legal right forworkers to bargain collectively, in the sense that employers have a positive duty toparticipate in a process of good faith negotiation with their workers’ chosenrepresentatives, first appeared in British Columbia and Nova Scotia statutes enactedin 1937, but only became generalized for private sector workers in the 1940s and forpublic sector workers in the 1960s and 70s.Thus while the court is on firm historical ground when it states in paragraph 66that collective bargaining (understood here as a social practice) has long beenrecognized in Canada (in the sense that it could neither be repressed nor ignored) andthat “historically it emerges as the most significant collective activity through whichfreedom of association is expressed in the labour context,” its further claim that aprocedural right to collective bargaining has long been recognized as fundamental inCanada prior to 1982 is deeply problematic as a statement of historical fact.(Tucker, at p. 166 (emphasis in original))[243] Professor Langille also takes the position that Canada’s labour history does notreveal an acceptance by our common law courts or our legislatures of a concept of freedom of

association that included an obligation on the part of employers to engage in collectivebargaining: “Beyond any doubt, there was no duty imposed on an employer to bargain with aunion — even if, contrary to all legal indications, there was an effectively protected right tobelong to a union and to participate in a strike” (“Freedom of Association”, at p. 191).[244] Not only did courts not recognize such a bargaining right in the period before theadoption of the Wagner model in Canada, but they often issued injunctions against labour’s2011 SCC 20 (CanLII)attempts to bargain collectively. Professor Etherington writes:. . . prior to the adoption of statutes in Canada modeled on the Wagner Act, the bestour unions could hope for was a laissez-faire attitude that would allow them to usestrikes to force employers to bargain. More often than not during that period theywere even disappointed in that hope by courts that were too willing to use theirinjunctive powers at common law to prevent unions from taking collectiveeconomic action against employers to compel them to bargain collectively. In thatcontext, it may be a hollow claim to even assert that our law or society recognizedaccess to collective bargaining in any sense as a fundamental right or freedom, but itis clearly not accurate to assert that it recognized a legal right to engage in collectivebargaining that included an obligation on the part of employers also to engage inbargaining when approached by unions. [Emphasis added; p. 727.][245] The Chief Justice and LeBel J. take issue with my focus on whether, historically, theright to collective bargaining was consistently guaranteed by the legal system, noting that thequestion should instead be “whether Canadian society’s understanding of freedom ofassociation, viewed broadly, includes the right to collective bargaining in the minimal sense ofgood faith exchanges affirmed in Health Services” (para. 90 (emphasis in original)). Withrespect, this bare assertion, without any evidence or explanation as to what Canadian society’s

understanding of freedom of association actually is, does not rehabilitate the flawed historicalanalysis in Health Services.[246] In light of the consistent academic criticisms, I cannot accept the majority’s assertionin Health Services that the Wagner model statutes did not create a modern right to bargaincollectively but only “afforded it protection” (para. 25). While the legal freedom to enter intovoluntary collective negotiations may have been a fundamental freedom prior to legislation2011 SCC 20 (CanLII)based on the Wagner Act, these statutes did in fact constitute a substantial innovation over thestatus quo ante with respect to various labour rights, including the duty of employers to bargainin good faith.(3) International Law Does Not Support Constitutionalizing CollectiveBargaining Rights[247] The third proposition the majority relied on in Health Services was that collectivebargaining is an integral component of the freedom of association under international law. Themajority relied in particular on ILO Convention (No. 87) concerning freedom of association andprotection of the right to organise, 68 U.N.T.S 17 (“Convention No. 87”), in support of theposition that collective bargaining is protected under international law. In doing so, it committedtwo errors.[248] First, in discussing protection for collective bargaining under international law, themajority conflated two distinct ILO Conventions. While Canada has ratified ILO ConventionNo. 87, that Convention deals with freedom of association and does not at any point specifically

discuss collective bargaining. The majority in Health Services cites an extended passage from anarticle by B. Gernigon, A. Odero and H. Guido, “ILO principles concerning collectivebargaining” (2000), 139 Intern’l Lab. Rev. 33, to elaborate on the scope of protection forcollective bargaining under international law. However, in that article Gernigon et al. areactually discussing the scope of ILO Convention (No. 98) concerning the application of theprinciples of the right to organise and bargain collectively, 96 U.N.T.S. 257 (“Convention No.2011 SCC 20 (CanLII)98”), which deals more specifically with collective bargaining. As my colleagues acknowledge,Canada has not ratified Convention (No. 98). This means that Canada has no obligations underthat Convention as outlined in the ILO Constitution: see Constitution of the International LabourOrganisation, Art. 19(5)(e); B. A. Langille, “Can We Rely on the ILO?” (2006-2007), 13C.L.E.L.J. 273. It is therefore inappropriate to interpret the scope of Canada’s obligations on thebasis of that Convention.[249] Second, even if Convention No. 98 were applicable to Canada, the majority inHealth Services would still have erred in relying on that Convention to constitutionalize aversion of collective bargaining that includes a duty to bargain in good faith. While ConventionNo. 98 provides protection for a process of collective bargaining, it conceives of collectivebargaining as being a process of “voluntary negotiation” that is fundamentally distinct from themodel of collective bargaining incorporated in the Wagner model: see ILO Convention No. 98,Art. 4. More specifically, Convention No. 98 does not contemplate the imposition of a duty onparties to bargain in good faith: Langille, “Can We Rely on the ILO?”, at pp. 291-92. Indeed,Gernigon et al. express this point in the article relied on by the majority in Health Services:

The voluntary nature of collective bargaining is explicitly laid down in Article 4of Convention No. 98 and, according to the Committee on Freedom of Association,is “a fundamental aspect of the principles of freedom of association” (ILO, 1996a,para. 844). Thus, the obligation to promote collective bargaining excludes recourseto measures of compulsion. During the preparatory work for Convention No. 154,the Committee on collective bargaining agreed upon an interpretation of the term“promotion” (of collective bargaining) in the sense that it “should not be capable ofbeing interpreted in a manner suggesting an obligation for the State to intervene toimpose collective bargaining”, thereby allaying the fear expressed by the Employermembers that the text of the Convention could imply the obligation for the State totake compulsory measures (ILO, 1981, p. 22/6).2011 SCC 20 (CanLII)The Committee on Freedom of Association, following this line of reasoning, hasstated that nothing in Article 4 of Convention No. 98 places a duty on a governmentto enforce collective bargaining with a given organization by compulsory means, andthat such an intervention by a government would clearly alter the nature ofbargaining (ILO, 1996a, para. 846).It cannot therefore be deduced from the ILO’s Conventions on collectivebargaining that there is a formal obligation to negotiate or to achieve a result (anagreement). [Emphasis added; pp. 40-41][250] The majority in Health Services was in error when it concluded that international lawpointed to compulsory collective bargaining (paras. 69-79). My colleagues say that internationalnorms are not inconsistent with compulsory collective bargaining (para. 95). While this is true, itdoes not assist with the interpretation of s. 2(d). Many positions — including a freedom ofassociation which includes voluntary collective bargaining — are equally, if not more, consistentwith international norms. However, the majority in Health Services said more than this. It saidthat Canada’s obligations and those international norms imply compulsory collective bargainingmore than they imply voluntary associations: para. 72. With respect, international law does notsupport that conclusion.

(4) Charter Values Cannot Be Invoked to Support ConstitutionalizingCollective Bargaining Rights[251] In its fourth proposition, the majority maintained that the recognition of a good faithcollective bargaining right is consistent with and promotes other Charter rights, freedoms andvalues: namely, human dignity, equality, liberty, respect for the autonomy of the person and theenhancement of democracy: see Health Services, at para. 81. The majority said that the rightpromotes human dignity, liberty and autonomy of workers by giving them the opportunity to2011 SCC 20 (CanLII)influence the establishment of workplace rules and thereby to gain a measure of control over amajor aspect of their lives, that it enhances equality because it palliates the historical inequalitybetween employers and employees, and that it achieves a form of workplace democracy andensures the rule of law in the workplace by giving workers a voice to influence the establishmentof rules that control major aspects of their lives: see Health Services, at paras. 82-85.[252] A duty to bargain in good faith may achieve those ends. However, either the Charterrequires something or it does not. The Chief Justice and LeBel J. say that a “value-orientedapproach . . . has been repeatedly endorsed by Charter jurisprudence over the last quartercentury” (para. 96). That may be so, however this value-oriented approach is a means by whichcourts interpret the Charter — a process, as I will now explain, that must begin with the words ofthe Charter itself and must be bound by the normal constraints of legal reasoning and analysis.As Mr. Justice Robert J. Sharpe and Professor Kent Roach say, “The task of Charterinterpretation has structure and discipline. The first source is obvious — the language of theCharter itself” (The Charter of Rights and Freedoms (4th ed. 2009), at p. 59. The role of theCourt is to determine what the Charter requires and what it does not and then apply the

equirements it finds to the case before it. It is not to simply promote, as much as possible,values that some subjectively think underpin the Charter in a general sense.[253] I agree with the words of Iacobucci J. in Bell ExpressVu Limited Partnership v. Rex,2002 SCC 42, [2002] 2 S.C.R. 559, at para. 62, where he wrote “to the extent this Court hasrecognized a ‘Charter values’ interpretive principle, such principle can only receive applicationin circumstances of genuine ambiguity, i.e., where a statutory provision is subject to differing,2011 SCC 20 (CanLII)but equally plausible, interpretations”. The Court cannot employ a Charter values argument tointerpret the Charter itself so broadly that the interpretation is no longer plausible. As Dickson J.observed, “it is important not to overshoot the actual purpose of the right or freedom in question”(Big M, at para. 117). This means, as Professor Hogg says, that even though this Court hasadopted a progressive, purposive approach to interpreting the Constitution, courts are notliberated from the “normal constraints of interpretation” (p. 15-50).[254] Section 2(d) protects the freedom to associate. It does not purport to guarantee the“collective goals” (reasons of the Chief Justice and LeBel J., at para. 46) of the association onceformed. The majority’s interpretation in Health Services is not plausible because it created afree-standing right to the objectives of employee associations; it created a right which “requiresboth employer and employees to meet and to bargain in good faith, in the pursuit of a commongoal of peaceful and productive accommodation” and make a “reasonable effort to arrive at anacceptable contract” (paras. 90 and 101). To suggest that s. 2(d) protects the right to equalbargaining power with one’s employer or “a form of workplace democracy” takes it far outsideits linguistic, philosophical and historical context.

[255] I agree that one’s work is fundamental to one’s identity and well-being and thatexerting control over one’s working conditions is a desirable goal. However, even assuming thatsuch considerations militate in favour of legislative intervention to empower workers andemployee associations, the fact remains that our Constitution leaves the determination as towhether, and to what extent, such intervention is appropriate to Parliament and the provinciallegislatures. Section 2(d) is silent on such matters and this Court may not intervene into2011 SCC 20 (CanLII)questions of economic and social policy in the absence of a legislative or constitutional grant ofauthority.C. The Approach in Health Services Is Unworkable[256] Beyond Health Services’ errors as to the nature of s. 2(d) and its reasons forconstitutionalizing a duty to bargain in good faith, the collective bargaining right itself isunworkable for two reasons. First, as found by the Ontario Court of Appeal, the right tocollective bargaining imposed by Health Services is unworkable unless it is supported by at leasttwo additional elements of Wagner model collective bargaining. Second, the attempt to draw adistinction between the process of good faith bargaining and the fruits of such bargaining isunworkable, as Health Services itself demonstrates.(1) The Problem of Constitutionalizing One Part of the Wagner Model[257] In the court below in this appeal, an experienced and eminent labour lawyer and nowChief Justice of Ontario, Winkler C.J.O., took the view that a constitutional right to meaningfulcollective bargaining must extend to two additional aspects: the principle of majoritarian

exclusivity and a mechanism for resolving bargaining impasses and disputes regarding theinterpretation and administration of collective agreements. Accordingly, he ordered legislationthat would extend the missing protections to agricultural workers:If legislation is to provide for meaningful collective bargaining, it must go furtherthan simply stating the principle and must include provisions to ensure that the rightcan be realized. At minimum, the following statutory protections are required toenable agricultural workers to exercise their right to bargain collectively in ameaningful way: (1) a statutory duty to bargain in good faith; (2) statutoryrecognition of the principles of exclusivity and majoritarianism; and (3) a statutorymechanism for resolving bargaining impasses and disputes regarding theinterpretation or administration of collective agreements. [Emphasis added; para.80]2011 SCC 20 (CanLII)Abella J. in her reasons finds that a right to collective bargaining for agricultural workers mustinclude an enforcement and compliance mechanism to resolve bargaining disputes (at para. 339)and the statutory recognition of majoritarian exclusivity (at para. 343).[258] Winkler C.J.O. explained that these elements were necessary to a workable system ofgood faith collective bargaining. He justified adding the mechanism for resolving bargainingimpasses by explaining that the bargaining process would be “jeopardized” if the parties had norecourse to a dispute resolution mechanism when faced with fruitless bargaining: para. 82.[259] Indeed, when a duty is imposed on a party by law, it must be accompanied bysanctions or means of enforcement if there is non-compliance with the duty. Without sanctionsor means of enforcement, compliance with the duty would be, to all intents and purposes,

voluntary. This would hardly meet the requirement, according to the Chief Justice and LeBel J.,that collective bargaining be mandatory.[260] Winkler C.J.O. also explained that a collective bargaining process that lacks thefeature of majoritarian exclusivity would be “impractical” and lead to “chaos”:It is impractical to expect employers to engage in good faith bargaining discussionswhen confronted with a process that does not eradicate the possibility ofirreconcilable demands from multiple employee representatives, purporting tosimultaneously represent employees in the same workplace with similar jobfunctions. It is not overstating the point to say that to avoid chaos in the workplace tothe detriment of the employer and employees alike, it is essential that arepresentative organization be selected on a majoritarian basis and imbued withexclusive bargaining rights. [para. 92]2011 SCC 20 (CanLII)[261] Winkler C.J.O.’s concerns present a significant problem that the Chief Justice andLeBel J. do not address in their reasons. They limit constitutionalization to collective bargainingimposing a duty on employers to bargain in good faith. The reasons of the Chief Justice andLeBel J. provide no explanation for why Winkler C.J.O. is wrong. As the majority in Doucet-Boudreau said in discussing minority language educational rights: “A purposive approach toremedies in a Charter context gives modern vitality to the ancient maxim ubi jus, ibi remedium:where there is a right, there must be a remedy” (para. 25). I cannot agree that a right can beworkable without the imposition of an appropriate remedy.[262] The Chief Justice and LeBel J. say that “[i]t is premature to argue that the holding inHealth Services, rendered four years ago, is unworkable in practice” (para. 83). They say that it

takes time before the unworkability of a decision emerges. I disagree. Winkler C.J.O.’sconclusion that a constitutional right to meaningful collective bargaining must includeconstitutionalizing elements of the Wagner model provides strong support for the propositionthat, without these protections, compulsory collective bargaining is unworkable.(2) The Untenable Distinction Between Substance and Process2011 SCC 20 (CanLII)[263] Unworkability also arises from the majority’s instruction in Health Services toprotect the process of collective bargaining without also protecting its substantive fruits. InHealth Services, the majority posited that this distinction was entirely possible (para. 29). In myview, this distinction is unworkable because it is impossible to divorce the process of collectivebargaining from its substantive outcomes. There are three reasons.[264] First, as I have already discussed, Health Services itself did not respect thisdistinction since the majority granted constitutional protection to “significant” terms of thecollective agreements at issue in that very case. The majority found that the challenged B.C.legislation breached s. 2(d) not just by limiting future bargaining but also by invalidating existingcollective agreements and consequently undermining the past bargaining process that formed thebasis for these agreements. Therefore, the application of the collective bargaining right in HealthServices had the result of protecting the substance of those agreements.[265] Second, the duty to bargain in good faith cannot be described as only a “procedural”guarantee, as the Chief Justice and LeBel J. do in this case and as the majority did in Health

Services. Recognizing an employee association and requiring the employer to engage incollective bargaining are themselves substantive outcomes for which workers organize. In alabour context, as in other contexts, certain “procedures” are favoured because they are morelikely to produce a certain outcome.[266] The very requirement that the parties engage in collective bargaining tips theeconomic balance between parties in favour of the workers and, as such, constitutes a particular2011 SCC 20 (CanLII)outcome. Consequently, the act of engaging in the process itself constitutes a concession on thepart of the employer. Were it not so, organized labour would have little reason to demandconstitutional protection for the “right” to engage in a process of collective bargaining.[267] In addition to providing the substantive benefit of requiring employers to meet withworkers, the duty to bargain in good faith brings other, more specific substantive benefits. Asthe term is understood in Canadian labour law, the duty to bargain in good faith prohibits anemployer from flat out refusing to bargain with the union or from only going to a few cursorymeetings: G. Adams, at p. 10-122. However, it also goes much beyond that. Depending on thecircumstances, the duty to bargain in good faith can prohibit an employer from refusing toinclude or discuss the inclusion of standard industry terms in a collective agreement or,conversely, insisting on the inclusion of a term to the point of impasse: see Adams, at pp. 10-111to 10-112; Royal Oak Mines Inc. v. Canada (Labour Relations Board), [1996] 1 S.C.R. 369, atpara. 45, per Cory J. It also obligates employers to disclose material information to unions inadvance of negotiations: Adams, at pp. 10-124 to 10-128. All of these aspects of the duty to

argain in good faith change these measures and constrain the range of negotiating positionsavailable to the employer and thus have a substantive impact on the terms of employment.[268] Finally, for a duty to bargain in good faith not to be an illusory benefit, there must beboth a way of dealing with bargaining impasses as well as an effective remedy for persistentbreaches of a duty to bargain in good faith. The first requires that there be some defaultmechanism for resolving the dispute in case an impasse is reached — such as striking or binding2011 SCC 20 (CanLII)arbitration — while the second may require, in extreme circumstances, the imposition by anarbitrator of particular terms of a collective agreement: W. B. Rayner, Canadian CollectiveBargaining Law (2nd ed. 2007), at pp. 349-55. Each of these goes well beyond a mere processand results in the protection of a particular substantive outcome.[269] The majority’s inability to separate substance and process, and the consequentconstitutionalization of collective bargaining terms demonstrates the unworkability of thedistinction between substance and process asserted in Health Services. This unworkability isfurther underlined by the fact that the collective bargaining itself is an outcome for which partiesorganize and does affect substantive outcomes. For these reasons, as well as the unenforceabilityof the bare right to good faith bargaining, the ruling in Health Services is unworkable.V. The Charter Protects a Voluntary Association of Workers Whose Objectives Are to ImproveWages and Working Conditions[270] As I have explained through these reasons, I do not accept that s. 2(d) protects a rightto collective bargaining. I am, however, of the view that s. 2(d) does protect a voluntary

association of workers who wish to use their associational freedoms to come together andattempt to improve their wages and working conditions.[271] Under Canadian law, an individual is generally free to bargain with an employerover terms of employment. Because such individual bargaining is generally lawful, itnecessarily follows that the decision of individuals to band together to approach their employermust necessarily be protected. The free decisions of individuals to do in association what they2011 SCC 20 (CanLII)can lawfully do alone lies at the very heart of s. 2(d) protection, and it therefore follows that s.2(d) must protect the decision of individuals to come together, to form a bargaining position andto present a common and united front to an employer.[272] However, s. 2(d) does not provide greater legal protection to individuals acting inconcert than is afforded to individuals acting alone. While greater economic clout or politicalpower may flow from the very act of association in a way that makes the associational activity“qualitatively” different from the individual activity, the legal rights and freedoms granted toindividuals acting in association under s. 2(d) are nonetheless limited to the same rights andfreedoms afforded to individuals acting alone.[273] While s. 2(d) protects the ability of workers to come together and to organize with aview to engaging in collective bargaining with an employer, s. 2(d) does not impose anyobligation on an employer to actually negotiate with a group of employees. In the individualcase, there is generally no legal obligation on an employer to negotiate with the employee. It isentirely permissible for an employer, in the course of negotiating a new contract with an

employee, to make a “take it or leave it” offer to an employee, which the employee may thenaccept or reject. Such individual agreements are generally left to voluntary negotiation inaccordance with the law of contract, subject only to requirements set out in employmentstandards legislation and other statutes. Thus, just as an employer can decline to meet ornegotiate with an individual, so can an employer decline to meet or negotiate with a group ofemployees.2011 SCC 20 (CanLII)[274] In my view, a proper application of s. 2(d) provides protection for voluntaryassociations of workers, but such protection does not involve the constitutionalization of a dutyon employers to engage in collective bargaining. Such an approach is, in my view, consistentwith the purpose and scope of s. 2(d), the principle of judicial deference in labour relations, andCanada’s labour history and international obligations.VI. Summary[275] Given the length of these reasons thus far, I now provide a summary of the principlesdiscussed above before proceeding to apply these principles in the present case:1. This Court may overrule its own precedents, but it should only do so where thereare compelling reasons for doing so. In this case, such compelling reasons exist.Health Services involves Charter rights that are not susceptible to legislativecorrection, overruled a line of prior sound decisions, is unworkable and has beenthe subject of intense academic criticism.

2. Health Services erred for three reasons in concluding that s. 2(d) protectscollective bargaining and obliges parties to bargain in good faith:a. First, Health Services departed from sound principles established in thisCourt’s precedents on the nature and scope of s. 2(d); specifically, it departed2011 SCC 20 (CanLII)from the following five characteristics of s. 2(d):i. The purpose of s. 2(d) is to protect individuals rather than groups per se.ii.Section 2(d) protects freedoms not rights.iii. Section 2(d) does not empower the Court to privilege certain associationsover others.iv. Section 2(d) does not afford constitutional protection to contracts.v. Section 2(d) is to be interpreted in such a way as to afford deference tothe legislative branch in the field of labour relations.b. Second, the reasons advanced in Health Services for protecting collectivebargaining under s. 2(d) — Canadian labour history, Canada’s international

obligations, and Charter values — do not support conferring a constitutionalright to collective bargaining and imposing a duty on employers to engage incollective bargaining.c. Third, the majority’s approach to collective bargaining in particular and s.2(d) in general articulated in Health Services is unworkable. It extends2011 SCC 20 (CanLII)constitutional protection to the duty to bargain in good faith without importingother aspects of the Wagner framework, and by purporting to protect theprocess of collective bargaining without also protecting its fruits, neither ofwhich is tenable.3. Section 2(d) protects the ability of individuals to form associations and to do inassociation what they can lawfully do alone. Because individuals are generallyfree to bargain with their employer individually, it follows that s. 2(d) mustprotect the decision of individuals to come together, to form a bargaining positionand to present a common and united front to their employers. However, just as anemployer is not obliged to bargain with an individual employee, s. 2(d) does notoblige an employer to bargain with a group of employees.VII. Application to the Present Case[276] I agree with the conclusions of the Chief Justice and LeBel J. that the AEPA does notviolate s. 2(d) of the Charter, but for the reasons I have given. Section 2(d) does not confer a

ight of collective bargaining; nor does it impose a duty on employers to meet with employeesand “consider employee representations in good faith” (para. 104). I agree with Farley J. that theAEPA satisfies all of the concerns raised in Dunmore ((2006), 79 O.R. (3d) 219).[277] On a plain reading of the provisions of the AEPA it provides all of the protectionswhich were imposed by this Court in Dunmore, but goes no further. It does not provide any rightto collective bargaining, or other incidents of Wagner Act collective bargaining. Indeed up to2011 SCC 20 (CanLII)this point, the parties and the Courts have all proceeded on the basis that the AEPA did notinclude a duty of collective bargaining. The claimants chose to bring this case because in theirview, the AEPA did not include provisions to enforce a duty of collective bargaining onagricultural employers. Based on this Court’s ruling in Dunmore that s. 2(d) did not create aright of collective bargaining, Farley J. ruled that the AEPA did not violate the Charter. HealthServices subsequently expanded the scope of s. 2(d) to constitutionalize the right to collectivebargaining. Thus the Court of Appeal was obliged to and did find that the AEPA was no longerCharter compliant. Both of these conclusions were entirely consistent with the text of the AEPAand the parties’ understanding that the AEPA did not include a duty of collective bargaining onagricultural employers.[278] By enacting the AEPA, the legislature precisely addressed this Court’s ruling inDunmore. The text, context and purpose of the AEPA clearly demonstrate that the legislatureintentionally opted not to include a duty on employers to engage in collective bargaining withemployee associations.

[279] Nonetheless, the Chief Justice and LeBel J. say that s. 5 of the AEPA can be read asimposing a duty to bargain in good faith (para. 107), which would render the statuteconstitutional. They argue that the words of s. 5 are ambiguous and that the interpretive tools ofpurposive interpretation, the presumption of consistency with the Charter, and reference tolegislative debates lead to this conclusion. Like my colleagues Deschamps J. and Abella J., Icannot agree.2011 SCC 20 (CanLII)[280] The words of s. 5 are unambiguous. The relevant portions of s. 5 are subsections (1),(5), (6) and (7).5. (1) The employer shall given an employees’ association a reasonableopportunity to make representations respecting the terms and conditions ofemployment of one or more of its members who are employed by that employer.. . .(5) The employees’ association may make the representations orally or inwriting.(6) The employer shall listen to the representations if made orally, or read them ifmade in writing.(7) If the representations are made in writing, the employer shall give theassociation a written acknowledgment that the employer has read them.These words could not be clearer: they provide employee associations the opportunity to makerepresentations to an employer. The only obligation on an employer is to provide the employeeassociation with the opportunity to make representations and to listen if they are oral or read andacknowledge them if they are written.

[281] The words “listen to” or “read” and “give the association a written acknowledgment”are not ambiguous. This Court’s approach to statutory interpretation has long held that “thewords of an Act are to be read in their entire context and in their grammatical and ordinary senseharmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”(Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, at p. 41, citing Elmer Driedger inConstruction of Statutes (2nd ed. 1983)). To say that the words “listen to” or “read” and “give2011 SCC 20 (CanLII)the association a written acknowledgment” are ambiguous would be to ignore the grammaticaland ordinary sense of the words, and the purpose of the AEPA, and would manufactureambiguity where none exists.[282] Professor Sullivan observes that “[i]t is presumed that the ordinary meaning oflegislation is the most appropriate or ‘intended’ meaning” unless there is a reason to reject thatmeaning (Sullivan and Driedger on the Construction of Statutes (4th ed. 2002), at p. 34). AsProfessor Hogg, A. A. Bushell Thornton and W. K. Wright, write in “Charter DialogueRevisited — Or ‘Much Ado About Metaphors’” (2007), 45 Osgoode Hall L.J. 1, at p. 12:A broader general rule, requiring the courts to stretch the plausible interpretation of astatute in order to bring it into conformity with the Charter, “would wrongly upsetthe dialogic balance.” When a statute is unambiguous, courts should give effect tothe clearly expressed legislative intent, even if it leads to the conclusion that thestatute was unconstitutional and should be struck down for breach of the Charter.In this case, there is nothing in the AEPA that suggests that there is a reason to depart from theordinary and grammatical sense of the words.

[283] It is true, as my colleagues say, that the words “listen to” and “read” and “give theassociation a written acknowledgment” neither impose nor preclude a duty to bargain in goodfaith. However, this does not lead to ambiguity. A duty to bargain in good faith, as discussedabove, is a term of art in labour law that carries with it a complex series of reciprocal rights andobligations (see Adams, at pp. 10-111 to 10-112, 10-122, 10-124 to 10-128). Where good faithbargaining is protected by statute it is explicitly included: see, for example, s. 17 of the Ontario2011 SCC 20 (CanLII)Labour Relations Act, 1995, S.O. 1995, c. 1. Sched. A, which requires that parties “shall bargainin good faith and make every reasonable effort to make a collective agreement”. To simplyimply the existence of a set of statutory rights by the absence of a well-known term of artstretches the interpretive exercise beyond its breaking point.[284] The Chief Justice and LeBel J. say that “[t]here can only be one purpose forrequiring the employer to listen to or read employee representations — to assure that theemployer will in fact consider the employee representations” (para. 103). They argue that thisleads to the conclusion that s. 5 includes a duty on employers to engage in collective bargainingwith employee associations.[285] The purpose of the AEPA is set out expressly in s. 1:1. (1) The purpose of this Act is to protect the rights of agricultural employeeswhile having regard to the unique characteristics of agriculture, including, but notlimited to, its seasonal nature, its sensitivity to time and climate, the perishability ofagricultural products and the need to protect animal and plant life.(2) The following are the rights of agricultural employees referred to insubsection (1):

1. The right to form or join an employees’ association.2. The right to participate in the lawful activities of an employees’ association.3. The right to assemble.4. The right to make representations to their employers, through an employees’association, respecting the terms and conditions of their employment.5. The right to protection against interference, coercion and discrimination inthe exercise of their rights.2011 SCC 20 (CanLII)[286] Nothing in the explicit s. 1 purpose supports the view that agricultural employeeshave a right to require agricultural employers to engage in collective bargaining.[287] My colleagues ask what purpose there could be to requiring employers to listen to orread employee representations if not to respond to them. The answer is that the purpose is whatthe words say it is — to give employees the opportunity to more effectively put forward theirrepresentations by allowing them to do so collectively, rather than acting individually. Given theunique nature of the agricultural industry as recognized in s. 1, an employer is at liberty torespond or not. With respect, my colleagues interpretation of the words, “listen to” or “read” or“give the association a written acknowledgment” as including a duty on employers to engage incollective bargaining does not accord with the purpose as expressed by the plain language of theAEPA.[288] Finally, the Chief Justice and LeBel J. say that when the government of Ontariointroduced the AEPA it intended the legislation to provide protection for collective bargaining.

They base their view on a statement made by the Minister (at the time) that the Act was meant tomeet the obligations set by this Court in Dunmore. They say because the Minister used the word“meaningful” she intended that the AEPA would protect collective bargaining, as the majority ofthis Court deemed necessary in Health Services. They say this despite the fact that HealthServices had not yet been written or even argued before this Court. They say this despite anexplicit statement made by the Minister, which they quote, that stated that the AEPA was not2011 SCC 20 (CanLII)intended to “extend collective bargaining to agricultural workers”. They suggest that theMinister was only disclaiming Wagner Act collective bargaining, rather than collectivebargaining as they frame the term (para. 106).[289] As with the words of the AEPA, I read the words of the Minister plainly as presented.The comments quoted by the Chief Justice and LeBel J. indicate that the AEPA was intended tomeet the obligations in Dunmore, which did not include an obligation on employers to engage incollective bargaining. Given the absence of any requirement for collective bargaining in eitherDunmore or the AEPA the Minister’s comments support a plain reading of s. 5 as imposing onlya duty to “listen to” or “read” the representations and “give the association a writtenacknowledgment” if the representations are made in writing.[290] As the Chief Justice and LeBel J. are of the view that agricultural employers inOntario have a duty of collective bargaining, the appropriate remedy would have to be adeclaration that the AEPA is unconstitutional in its present form and expressly reading in wordsempowering the Agriculture, Food and Rural Affairs Appeal Tribunal to order employers toengage in collective bargaining. With respect, my colleagues’ approach goes beyond the normal

constraints of statutory interpretation; it amounts to an implied reading into the AEPA the duty ofcollective bargaining without declaring the Act unconstitutional. The remedial approach of theChief Justice and LeBel J. is, in my respectful view, entirely novel and unprecedented.[291] As I have explained earlier, the proper judicial approach in matters of labourrelations law is deference to the legislature. The imposition of a duty to bargain in good faith,like many other aspects of labour relations law, has the potential to reshape the economic2011 SCC 20 (CanLII)landscape of entire industries by strengthening the position of organized labour. Such anoutcome may be desirable, but the courts are not well-suited to determining whether or not it is.Decisions of this kind require a balancing of interests rather than the application of legalprinciples, and they are best made after having consulted with and receiving representations fromthe various stakeholders whose livelihoods and economic interests are likely to be affected.Courts do not have the expertise or the institutional capacity to undertake such a process and thusare not well equipped to make an informed decision. If a duty to bargain in good faith is to beimposed, it should be by the legislature and not the court.[292] The Chief Justice and LeBel J. say that the freedom to engage in a coordinatedattempt to negotiate with one’s employer is “meaningless” if it is not backed up by a reciprocalduty on the part of the employer. I cannot agree. The right to make representations inassociation is not meaningless. It is meaningful because of the increased persuasive weightcarried by collective representations rather than individual representations. Indeed politicalparties are formed on this precise premise. As Le Dain J. noted in the Alberta Reference, at p.391:

. . . the freedom to work for the establishment of an association, to belong to anassociation, to maintain it, and to participate in its lawful activity without penalty orreprisal is not to be taken for granted. . . . It is a freedom that has been suppressed invarying degrees from time to time by totalitarian regimes.[293] Canadians are accustomed to sound government and the respect for our personalliberties. For this reason, basic freedoms that are essential to the preservation of an open anddemocratic society may come to be taken for granted and their constitutional protection thought2011 SCC 20 (CanLII)of as meaningless. However, freedom, unconstrained by oppressive government, is, indeed, morethan meaningful. It is invaluable.[294] Accordingly, on the matter of s. 2(d) of the Charter, I find that I cannot agree withthe Chief Justice and LeBel J.[295] I am in agreement with the Chief Justice and LeBel J. as to their disposition of theissues under s. 15. On the record before this Court, the category of “agricultural worker” doesnot rise to the level of an immutable (or constructively immutable) personal characteristic of thesort that would merit protection against discrimination under s. 15.VIII.Conclusion[296] For these reasons, I would dispose of the constitutional questions in the same way asthe Chief Justice and LeBel J., allow the appeal and restore the judgment of Farley J.The following are the reasons delivered by

DESCHAMPS J. —[297] Canadian labour law is not static. Over the years, some of the changes in this fieldhave been reflected in judicial decisions, such as those on freedom of association under s. 2(d) ofthe Canadian Charter of Rights and Freedoms. Health Services and Support – FacilitiesSubsector Bargaining Assn. v. British Columbia, 2007 SCC 27, [2007] 2 S.C.R. 391, fed2011 SCC 20 (CanLII)expectations, but it also caused some bewilderment. More importantly, it generated anunnecessary debate about whether a duty to bargain in good faith has been imposed onemployers. I will begin by demonstrating why, in my view, the case at bar can and should beresolved on the basis of the answers this Court actually gave to the questions raised in HealthServices, in which the issue of an employer’s duty to bargain in good faith was not even raised. Iwill then briefly explain why I am of the view that the analytical framework articulated by theCourt in Dunmore v. Ontario (Attorney General), 2001 SCC 94, [2001] 3 S.C.R. 1016, should belimited to the context of that case.I. Interpreting Health Services[298] When the case at bar was heard by the Ontario Superior Court of Justice, this Court’sjudgment in Health Services had not yet been released ((2006), 79 O.R. (3d) 219). The issue putto Farley J. at that time was whether the Agricultural Employees Protection Act, 2002, S.O.2002, c. 16 (“AEPA”), was consistent with this Court’s decision in Dunmore. Health Serviceswas released after Farley J.’s judgment, but before the Court of Appeal heard the appeal in the

case at bar (2008 ONCA 760, 92 O.R. (3d) 481). As a result of comments made by the majorityin Health Services, the case proceeded down a completely different path in the Court of Appeal,where the issue was whether union exclusivity, majoritarianism and mechanisms for resolvingbargaining impasses and disputes — all parts of the “Wagner model” on which Canadian labourlaw statutes are based — were required by the Charter.[299] At first glance, the Ontario Court of Appeal’s affirmative response to this question is2011 SCC 20 (CanLII)so far removed from any conclusion reached in Health Services that it seems surprising. Afterall, the majority in Health Services made it crystal clear that no specific model of labour relationsis protected by s. 2(d) of the Charter, as they said (at para. 91): “. . . the right is to a generalprocess of collective bargaining, not to a particular model of labour relations, nor to a specificbargaining method”. By so stating, the majority of this Court were indicating that the Wagnermodel is not enshrined in the Charter. However, considering the predominance of the Wagnermodel in Canadian labour law, it is easy to see how Winkler C.J.O. reached the conclusion thatthe majority in Health Services must have been contemplating exclusivity, majoritarianism andmechanisms for resolving bargaining impasses and disputes at the same time as they discussedthe duty to bargain in good faith. In my view, the holding in Health Services does not have thebroad scope being attributed to it by the majority in the case at bar and, in particular, does notextend to imposing a duty on employers to bargain in good faith. I find that the AEPA isconsistent with this Court’s conclusion in Dunmore and would therefore allow the appeal, but fordifferent reasons than the majority.

[300] My reading of Health Services is that it represents a step forward in the recognitionof collective activities: joining individual voices through collective bargaining to achievecommon goals is protected by the Charter. In that case, I endorsed the view, which I still hold,that:(1) the constitutional right to collective bargaining concerns the protection ofthe ability of workers to engage in associational activities, and their capacity2011 SCC 20 (CanLII)to act in common to reach shared goals related to workplace issues andterms of employment;(2) the right is to a process of collective bargaining — it does not guarantee acertain substantive or economic outcome or access to any particularstatutory regime; and(3) the right places constraints on the exercise of legislative powers in respect ofthe collective bargaining process. [para. 174][301] This incremental interpretation of s. 2(d) of the Charter was sufficient to dispose ofthe questions raised in Health Services and is also sufficient to dispose of those raised in thisappeal. It leaves it up to the legislatures to make the difficult policy choices that must be made inorder to achieve economic balance in labour law. This interpretation is also consistent with therestraint courts show in resolving the issues raised by the parties before them. The approachshould not differ in cases involving constitutional interpretation.

[302] As the majority in the instant case note (at para. 80), in R. v. Advance Cutting &Coring Ltd., 2001 SCC 70, [2001] 3 S.C.R. 209, LeBel J. acknowledged the existence of ajudicial policy of non-intervention in labour relations. He made the following comment in thatcase (at para. 156):Looking back over nearly 20 years of the application of the Charter, it is clearthat this Court has been reluctant to accept that the whole field of labour relationsshould fall under the constitutional guarantee of s. 2(d). The law of collectivebargaining, as it has developed in Canada since the Depression beginning in 1929and the Second World War, as well as union and employer conflicts like strikes andlockouts, have been left largely to legislative control based on government policy.Laws restricting the choice of a bargaining agent or forbidding strikes and lockoutswere deemed not to engage the guarantee of freedom of association as such. Thesocial and economic balance between employers and their collective unionizedemployees was viewed as a question of policy making and management of sharplyconflicting interests. Thus, it was thought more appropriate to leave the resolution ofsuch conflicts and the policy choices they required to the political process.2011 SCC 20 (CanLII)Where the economic balance is concerned, I share the view expressed by LeBel J. in AdvanceCutting (at para. 257):Legislatures are entitled to a substantial, though not absolute, degree of latitudeand deference, to settle social and economic policy issues (RJR-MacDonald, at para.134, per McLachlin J.). Courts should be mindful to avoid second-guessinglegislatures on controversial and complex political choices (M. v. H., [1999] 2 S.C.R.3, at para. 79, per Cory and Iacobucci JJ.). As discussed above, the jurisprudenceacknowledges that legislative policy-making in the domain of labour relations isbetter left to the political process, as a general rule.[303] An approach to constitutional interpretation similar to the one I set out above wouldhave ensured a softer landing for Health Services. I readily acknowledge that the commentaryon that decision was not unanimous. The Chief Justice and LeBel J. refer to the authors whose

comments were mostly favourable, while Rothstein J. refers to those who were mostlyunfavourable. I disagree with the expansive approach taken by the majority in the case at bar andwith the use they make of Health Services. A more prudent approach, one that would beconsistent with this Court’s jurisprudence on s. 2(d) and with the issues the Court actuallyconsidered in that case, would be to restrict the ratio of Health Services to the questions actuallyraised and the answers actually given in that case.2011 SCC 20 (CanLII)[304] In Health Services, the claimants asked this Court to declare that the government hadinterfered with their right to unite to achieve common goals. While they recognized that undermost Canadian labour law statutes, employers had an obligation to bargain in good faith, theclaimants were not seeking a declaration characterizing this obligation as a constitutional one.Neither the British Columbia Supreme Court nor the Court of Appeal dealt with a duty onemployers to bargain in good faith, because this subject was quite simply not raised. Indeed, itwas in its legislative capacity — not as an employer — that the government had interfered withthe employee’s rights. Therefore, the majority in Health Services did not need to comment on ormake findings in respect of whether the government, as an employer, had a duty to negotiate ingood faith. There was thus no need to impose a Charter-based duty to bargain on employers. Afortiori, there was no need to import, together with this duty, the good faith element that is one ofthe hallmarks of the Wagner model and that inevitably entails a number of statutory components.I cannot therefore agree with the majority in the case at bar that Health Services imposesconstitutional duties “on governments as employers” (para. 73).

[305] All that was required by the questions raised in Health Services was a finding thatsince the employees had a constitutional right to engage in associational activities and act incommon to reach common goals, the legislature could not interfere with their right (i) byprohibiting them from addressing certain issues in the collective bargaining process; and (ii) bycancelling negotiated provisions in the agreements and thereby rendering the processmeaningless. By enacting legislation that had prohibited the negotiation of certain issues in the2011 SCC 20 (CanLII)course of Charter-protected associational activities and rendering useless the efforts expended toachieve a negotiated agreement on certain subjects, the legislature had interfered with their right.This conclusion did not depend on the employer’s being under a duty to bargain in good faith.[306] In the case at bar, the issue is similar to the one in Health Services in that it concernslegislative action, but it is not, as the Chief Justice and LeBel J. put it (at para. 99), whether the“AEPA provides a process that satisfies” “the right of an employees’ association to makerepresentations to the employer and have its views considered in good faith”. Although the rightof employees to have their views considered in good faith may well flow from certain commentsmade in Health Services, they do not flow from the issues raised in that case. The duty to act ingood faith is part and parcel of a web of statutory components. It should not be found to be aconstitutional requirement in the instant case.[307] To frame the issue in this case, the AEPA must be situated in its context. The AEPAis the response of the Ontario legislature to this Court’s decision in Dunmore. In that case,agricultural workers had been excluded from the general statutory regime and had suffered fromthe statute’s underinclusiveness. The expanded definition of “freedom of association” that

esulted from Health Services has no bearing on the protection the Ontario legislature mustprovide to agricultural workers. The reason is that Dunmore purported to impose on the Ontariolegislature an obligation to provide agricultural workers with more than what had until then beenconsidered to be included in the scope of the constitutionally protected right to associate. Indeed,the decision in Dunmore, which was consistent with Delisle v. Canada (Deputy AttorneyGeneral), [1999] 2 S.C.R. 989, at para. 10, was based on the premise that s. 2(d) “exists2011 SCC 20 (CanLII)independently of any legislative framework”. However, it was held that agricultural workersshould be afforded greater protection because they were vulnerable and were substantially unableto exercise their constitutional right without the support of a legislative framework.[308] As I explained above, in my view, the effect of Health Services is that freedom ofassociation includes the freedom to engage in associational activities and the ability ofemployees to act in common to reach shared goals related to workplace issues and terms ofemployment. This delineation of the scope of freedom of association does not entail a moreexpansive protection than the legislative framework mandated by Dunmore for the agriculturalworkers. Therefore, if the AEPA complies with Dunmore, it will necessarily comply with theCharter. To answer the question in the case at bar, there is no need to import a duty to bargain ingood faith. I cannot therefore agree with the statement of the majority in the case at bar (at para.104) that, “[s]ince Health Services, it has been clear that [a meaningful exercise of the right toassociate] requires employers to consider employee representations in good faith.”[309] I would be remiss were I not to mention that the observation of the majority inHealth Services (at para. 88) that, owing to s. 32 of the Charter, “a private employer is not

ound” by s. 2(d) seems to have been lost in the case at bar. The requirement created by themajority in the instant case (at para. 73) that the legislature “impose statutory obligations onemployers” to conduct good faith negotiations cannot be found in Health Services. As a result ofthis new requirement, Parliament and the legislatures will now, subject to justification under s. 1of the Charter, have a constitutional obligation to ensure that their Wagner-based labourlegislation includes all employees. The irony of this result is that no such obligation was sought2011 SCC 20 (CanLII)by the claimants either in Dunmore or in Health Services, the very cases on which the majoritynow rely to support their statement in this appeal.[310] If Parliament and the legislatures are required to impose, in their statutory schemes, aduty on employers to bargain in good faith, this duty will apply to all public and private sectoremployees. Dunmore, which concerned the exclusion of a group of employees who requiredassistance to exercise their constitutional right to associate, will now apply to all Canadianemployees regardless of whether they need such support to exercise their s. 2(d) right (seeDelisle). This being so, the Court will be making a policy decision in the place of Parliament andthe legislatures. I would prefer to exercise restraint in such a case.[311] Because my interpretation of Health Services is based on the questions that wereactually raised in that case and the answers the Court actually gave to those questions, I am ofthe view that in the instant case, the AEPA has not been proven to violate the employees’ right toassociate. Section 1 of the AEPA lists the rights of agricultural employees as follows: (1) theright to form or join an employees’ association; (2) the right to participate in the lawful activitiesof an employees’ association; (3) the right to assemble; (4) the right to make representations to

their employers, through an employees’ association, respecting the terms and conditions of theiremployment; and (5) the right to protection against interference, coercion and discrimination inthe exercise of their rights. Farley J. pointed out that Dunmore did not require the “legislation[to] incorporate a complete panoply of collective bargaining rights” (para. 22) and found that theimpugned legislation met the standards established in Dunmore. I agree with Farley J., and Irespectfully disagree with the Court of Appeal’s interpretation.2011 SCC 20 (CanLII)[312] Since Dunmore remains central to this appeal, I must comment briefly on theapproach taken in that case.II. Approach From Dunmore[313] In Health Services (at para. 176), I voiced concerns about the majority’s adoption ofa criterion used in Dunmore to determine whether the government had infringed a Charter right.Even though both cases are based on compelling facts, principles should not be imported fromone context into another that is not analogous to it. As I explained above, a similar unwarrantedimportation of principles can be observed in the case at bar. But there is more.[314] It is helpful to recall that, as noted by Judy Fudge, “[a]t issue in Dunmore was thetotal exclusion of agricultural workers in Ontario from any form of labour legislation thatprotected them against employer retaliation from joining and participating in a trade union. Theunion did not ask for collective bargaining rights” (“The Supreme Court of Canada and the Right

to Bargain Collectively: The Implications of the Health Services and Support case in Canada andBeyond” (2008), 37 Indus. L.J. 25, at p. 30).[315] Dunmore was obviously a difficult case. At its heart was the economic inequalitybeing suffered by agricultural workers. While labour law is to some extent always abouteconomic inequality, this issue does not occupy the forefront of every battle. Health Services wasnot primarily about economic inequality — it concerned legislative interference with both2011 SCC 20 (CanLII)existing and future collective agreements. Although economic inequality has the potential toundermine the peaceful foundations of democratic societies, economic equality is not an“equality right” for the purposes of s. 15 of the Charter. In addition, even though labour lawprovides tools that help reduce economic inequality, not all aspects of labour law are protectedby the Charter (see Health Services, at para. 19). Finally, employment status is not, at least not atthis time, regarded as an analogous ground for the purposes of s. 15 of the Charter.[316] Dunmore was based on the distinction between positive and negative rights. In myview, using this distinction as a basis for finding that s. 2(d) has been infringed involves somedifficulty. Both the commentary and the case law provide sufficient justification for exercisingcaution before adopting an approach that relies on the positive-negative distinction, particularlywhen the claim concerns state action or inaction. Stephen Holmes and Cass R. Sunstein expressthis eloquently in The Cost of Rights: Why Liberty Depends on Taxes (1999), at pp. 43-44:Individuals enjoy rights, in a legal as opposed to a moral sense, only if the wrongsthey suffer are fairly and predictably redressed by their government. This simplepoint goes a long way towards disclosing the inadequacy of the negative

ights/positive rights distinction. What it shows is that all legally enforced rights arenecessarily positive rights.. . . That is to say, personal liberty cannot be secured merely by limiting governmentinterference with freedom of action and association. No right is simply a right to beleft alone by public officials.This brings to mind Cory and Iacobucci JJ.’s response in Vriend v. Alberta, [1998] 1 S.C.R. 493,at para. 56, to an argument that was analogous to the positive-negative rights dichotomy:2011 SCC 20 (CanLII)It is said, however, that this case is different because the challenge centres on thelegislature’s failure to extend the protection of a law to a particular group of people.This position assumes that it is only a positive act rather than an omission which maybe scrutinized under the Charter. In my view, for the reasons that will follow, thereis no legal basis for drawing such a distinction.[317] Distinguishing between the freedom to exercise a right without state interference andthe right to exercise a freedom unhampered by state action or inaction diverts the discussionfrom the substance of the actual protection afforded by the Charter. In our society, governmentactivity is pervasive and unavoidable: See S. Bandes, “The Negative Constitution: A Critique”(1989-1990), 88 Mich. L. Rev. 2271, at p. 2285, and Greater Vancouver TransportationAuthority v. Canadian Federation of Students – British Columbia Component, 2009 SCC 31,[2009] 2 S.C.R. 295, at para. 34.[318] Dunmore was concerned with economic inequality. It was based on the notion thatthe Charter does not ordinarily oblige the government to take action to facilitate the exercise of afundamental freedom. Recognition was given to the dichotomy between positive and negativerights. To get around the general rule, a somewhat convoluted framework was established for

cases in which the vulnerability of a group justified resorting to government support. I agreewith B. Langille, “The Freedom of Association Mess: How We Got into It and How We Can Getout of It” (2009), 54 McGill L.J. 177, that this detour appears to have been an artifice designed tosidestep the limits placed on the recognition of analogous grounds for the purposes of s. 15.[319] To redress economic inequality, it would be more faithful to the design of theCharter to open the door to the recognition of more analogous grounds under s. 15, as2011 SCC 20 (CanLII)L’Heureux-Dubé J. proposed in Dunmore. Such an approach is preferable to relying on adistinction that does not rest on a solid foundation. This, of course, would entail a sea change inthe interpretation of s. 15 of the Charter. The majority in the instant case resist such a change,referring to “Canadian values” and to the need to take a “generous and purposive” approachwhen interpreting Charter rights (at paras. 32, 90, 92 and 97), but to ensure consistency with theapproach of the majority in Health Services (at paras. 81-96), they refer to equality in the s. 2(d)context without mentioning s. 15. My point here is not that each Charter protection should beinterpreted in a formalistic manner. Rather, it is that if the law needs to move away fromDunmore’s distinction between positive and negative rights, this should not be accomplished byconflating freedom of association with the right to equality or any other Charter right that maybe asserted by a litigant. An analysis based on principles grounding the protection of rights andfreedoms offers a better prospect of judicial consistency than one based on the more amorphousnotion of “Canadian values”.[320] For these reasons, I would allow the appeal and restore Farley J.’s judgment.

The following are the reasons delivered byABELLA J. —[321] I fully endorse the Chief Justice and LeBel J.’s discussion of Health Services andSupport — Facilities Subsector Bargaining Assn. v. British Columbia, 2007 SCC 27, [2007] 22011 SCC 20 (CanLII)S.C.R. 391. I agree with them that by including protection for the process of collectivebargaining, Health Services enhanced the scope of 2(d) of the Canadian Charter of Rights andFreedoms beyond the formalism assigned to it by this Court’s 1987 Labour Trilogy (Referencere Public Service Employee Relations Act (Alta.), [1987] 1 S.C.R. 313; PSAC v. Canada, [1987]1 S.C.R. 424; and RWDSU v. Saskatchewan, [1987] 1 S.C.R. 460). I am also in agreement withtheir criticisms of Rothstein J.’s decision to reconsider the correctness of Health Services on hisown motion, in the absence of a request from any of the parties that he do so, and without anopportunity for them to address the issue.[322] With the greatest respect, however, I do not agree that the Agricultural EmployeesProtection Act, 2002, S.O. 2002, c. 16 (“AEPA”) meets the new Health Services standard. I havegreat difficulty with stretching the interpretive process in a way that converts clear statutorylanguage and express legislative intention into a completely different scheme. The AEPA doesnot protect, and was never intended to protect, collective bargaining rights.Background

[323] The AEPA was enacted in 2002 to respond to this Court’s 2001 decision in Dunmorev. Ontario (Attorney General), 2001 SCC 94, [2001] 3 S.C.R. 1016, which held that s. 2(d)protected the right to organize. Dunmore was decided in accordance with the Labour Trilogy,the then operative s. 2(d) paradigm. The Trilogy was widely taken as standing for theproposition that s. 2(d) did not include protection for collective bargaining (ProfessionalInstitute of the Public Service of Canada v. Northwest Territories (Commissioner), [1990] 22011 SCC 20 (CanLII)S.C.R. 367). The Trilogy was not challenged in Dunmore, and Bastarache J., writing for themajority, was explicit that he was not addressing whether collective bargaining was protectedunder s. 2(d). What was protected, in his view, was the following:I conclude that at minimum the statutory freedom to organize in . . . the [LabourRelations Act, 1995, S.O. 1995, c. 1, Sched. A] ought to be extended to agriculturalworkers, along with protections judged essential to its meaningful exercise, such asfreedom to assemble, to participate in the lawful activities of the association and tomake representations, and the right to be free from interference, coercion anddiscrimination in the exercise of these freedoms. [Emphasis added; para. 67.][324] It is not surprising, therefore, that the 2002 AEPA contains no reference to aprotection which made no appearance on the constitutional stage until 2007. Or that the trialjudge’s decision in 2006 in the case before us, applied the Dunmore “right to organize” templateand found the legislation compliant with s. 2(d) (79 O.R. (3d) 219).[325] But by the time the Court of Appeal heard this case in 2008, Health Services hadbeen decided, creating a completely different jurisprudential universe. That was the new s. 2(d)

universe Winkler C.J.O. applied to the AEPA (2008 ONCA 760, 92 O.R. (3d) 481). He foundthe legislation wanting. I agree with him.Analysis[326] In granting constitutional protection to the process of collective bargaining under s.2(d), Health Services found the duty to consult and negotiate in good faith to be a “fundamental2011 SCC 20 (CanLII)precept” (para. 97). This does not guarantee that a collective agreement will be achieved, butgood faith bargaining does require that the parties meet, engage in a meaningful dialogue, andmake reasonable efforts to arrive at a collective agreement (paras. 90 and 101). Health Servicesconfirmed that this involves not only the employees’ collective right, as confirmed in Dunmore,to organize and make representations, but also a corollary duty on the part of employers tomeaningfully discuss, consult, and consider these representations:. . . the right to bargain collectively protects not just the act of makingrepresentations, but also the right of employees to have their views heard in thecontext of a meaningful process of consultation and discussion. . . . [T]he right tocollective bargaining cannot be reduced to a mere right to make representations.[Emphasis added; para. 114.](See also para. 101.)[327] This requirement of meaningful dialogic consultation has long been recognized incollective bargaining regimes: Royal Oak Mines Inc. v. Canada (Labour Relations Board),[1996] 1 S.C.R. 369, at para. 41; U.E.W. and DeVilbiss Ltd., [1976] 2 C.L.R.B.R. 101 (Ont.);George W. Adams, Canadian Labour (2nd ed. (loose-leaf)), at paras. 10-1710 and 10-1870 to

10-1920; Donald D. Carter et al., Labour Law in Canada (5th ed. 2002), at paras. 621-22;Wesley B. Rayner, Canadian Collective Bargaining Law (2nd ed. 2007), at pp. 333-34; Elisheva(Elika) Barak-Ussoskin, “Collaboration in the Tripartite System: The Right to be Consulted andthe Duty to Consult” in A. Höland et al., eds., Employee Involvement in a Globalising World:Liber Amicorum Manfred Weiss (2005), 439, at p. 445.[328] If we then turn to the relevant language of the AEPA and its description of what is2011 SCC 20 (CanLII)required of an employer, we find the following:5. (1) The employer shall give an employees’ association a reasonable opportunityto cmake representations respecting the terms and conditions of employment of oneor more of its members who are employed by that employer.. . .(5) The employees’ association may make the representations orally or in writing.(6) The employer shall listen to the representations if made orally, or read them ifmade in writing.(7) If the representations are made in writing, the employer shall give theassociation a written acknowledgment that the employer has read them.[329] The process created by these provisions is the following: an employees’ associationis entitled to make representations, either orally or in writing, about the terms and conditions ofemployment. If the representations are made orally, the employer is required to “listen” to them.If they are made in writing, the employer must “read” them and give the “employees’association” a written acknowledgment that the representations have been read. That is the full

extent of the employer’s duties — to listen, to read, and to acknowledge receipt. No response isrequired.[330] If we compare these duties under the AEPA to the linguistic markers set out inHealth Services, we find that the following language is missing in action: “negotiate”, “meet”,“good faith”, “engage”, “exchange”, “dialogue”, “consultation”, “discussions”, “consideration”,“accommodation” and “union”. Nor does the key word “bargaining” appear.2011 SCC 20 (CanLII)[331] Noting the absence in the AEPA of Health Services’ collective bargaining vocabularyis not a criticism of the government’s motives. The AEPA was the government’s good faith —and, as the trial judge found, successful — implementation of how Dunmore had defined thescope of s. 2(d) in 2001. This does not, however, assist in determining whether it complies withthe revised scope described in Health Services. The Ontario government obviously cannot beheld responsible for the redefinition of s. 2(d) that intervened between the enactment andappellate review of the AEPA, but neither can courts disregard the applicable law because of itsinfelicitous timing. Since the applicable law for s. 2(d) is now found in Health Services, theAEPA must be scrutinized for compliance with its principles. And since, on its face, nobargaining or consultation is required by the AEPA, let alone the good faith bargaining HealthServices set out as a minimal constitutional protection, the AEPA violates s. 2(d) of the Charter.[332] Not only is there clarity of language, there is also clarity of purpose. Thegovernment’s intentions to exclude collective bargaining were forthright. The then Minister of

Agriculture and Food, the Honourable Helen Johns, was unequivocal when she introduced thelegislation in confirming that the legislation included no right to collective bargaining:However, I need to make one thing very clear here. While an agricultural employeemay join an association that is a union, the proposed legislation does not extendcollective bargaining to agricultural workers.(Legislative Assembly of Ontario, Official Report of Debates (Hansard), No. 46A,October 22, 2002, at p. 2339 (emphasis added))2011 SCC 20 (CanLII)This was based on the legislative goal of complying only with the rights required by Dunmore,rights which, as the Minister correctly noted, addressed only the “right to associate”, not the“right to collectively bargain”:I’d like to say that the Supreme Court was very clear. They said that agriculturalworkers across the province had the right to associate. They did not say that they hadthe right to collectively bargain.(Legislative Assembly of Ontario, Official Report of Debates (Hansard), No. 43A,October 16, 2002, at p. 2128 (emphasis added))[333] Judging from their conduct, the parties involved in this appeal seem to have acceptedthere were no protections for the process and enforcement of collective bargaining in the AEPA.The United Food and Commercial Workers Union Canada represented workers at Rol-LandFarms Ltd. After a vote in which an overwhelming majority voted in favour of certification, theunion wrote to Rol-Land requesting a meeting to begin negotiations. The owner of Rol-LandFarms did not respond to the letter and refused to recognize the union. The same union alsorepresented employees at Platinum Produce, where the employer gave the union the opportunity

to make brief oral representations, but said it had no obligation to bargain towards a collectiveagreement. The meeting lasted 15 minutes.[334] In the years since the AEPA was enacted in 2002, there is no evidence of a singlesuccessfully negotiated collective agreement or even of any negotiations. I appreciate thatstatutory interpretation does not draw on the perceptions of the statute’s intended consumers, butwhere, as here, there is perfect harmony between statutory language, legislative intention, and2011 SCC 20 (CanLII)public perception, the usual interpretative tools are vindicated.[335] In addition to finding a violation of s. 2(d) based on the explicit failure, by text andby design, to include even a hint of a process of collective bargaining, let alone a duty to engagein meaningful and good faith efforts to arrive at a collective agreement, I also agree with WinklerC.J.O. that for agricultural workers, the absence of a statutory enforcement mechanism and ofmajoritarian exclusivity is an infringement of s. 2(d).[336] Health Services recognized that s. 2(d) of the Charter obliged the state, either asemployer or as legislator, to protect the process of collective bargaining (para. 88). The contentof that protection will of course mean different things in different contexts. The determinativequestion will inevitably be, as Bastarache J. said in Dunmore, what protections are “essential” tothe “meaningful exercise” of the right.[337] The right at issue in Dunmore was the right to organize. Bastarache J. concludedthat this required ancillary protection for the freedom to assemble, to participate in the lawful

activities of the “employees’ association” and to make representations, along with the right to befree from interference, coercion and discrimination in the exercise of those freedoms (para. 67).All of these protections found their way into the AEPA, which is why the trial judge gave it hisstamp of constitutional approval.[338] Now, as a result of Health Services, we are dealing with a right to a process of goodfaith collective bargaining and consultation. What protections are essential for the meaningful2011 SCC 20 (CanLII)exercise of this right for agriculture workers?[339] For a start, there is no point to having a right only in theory. Unless it is realizable, itis meaningless. There must therefore be an enforcement mechanism not only to resolvebargaining disputes, but to ensure compliance if and when a bargain is made.[340] At the moment, there is in fact a statutory mechanism in place for the enforcement ofthe AEPA — the Agriculture, Food and Rural Affairs Appeal Tribunal. But the fact that thisTribunal exists is, by itself, of no consequence if it cannot address the rights constitutionallyguaranteed by Health Services.[341] Section 11 of the AEPA gives the Tribunal authority to grant a remedy for acontravention of the AEPA. But it is not a contravention of the AEPA to refuse to engage in agood faith process to make reasonable efforts to arrive at a collective agreement. It is thereforenot part of the Tribunal’s mandate. No mandate, no jurisdiction; no jurisdiction, no remedy.

[342] It strikes me as fundamentally contrary to our jurisprudence to invite the Tribunal tointerpret its home statute in a way that contradicts the clear statutory language and legislativeintent. If, on the other hand, the AEPA had included the protections set out in Health Services,the Tribunal would certainly have the authority to address and remedy any bargaining disputesand would therefore comply with what is required by s. 2(d).[343] This brings us finally to whether the process of good faith bargaining for agricultural2011 SCC 20 (CanLII)workers requires that the employer bargain only with the union selected by a majority of theemployees in the bargaining unit. This is known as the principle of majoritarian exclusivity, aroutine protection in Canada’s labour laws. In the context of this case, and given the uniquevulnerability of agriculture workers, I agree with Winkler C.J.O. that statutory recognition ofsuch exclusivity is essential for them to exercise their bargaining rights meaningfully.[344] As long ago as 1944, when Labour Ministers from across Canada agreed to theprinciples which found their way into the model The Industrial Relations and DisputesInvestigation Act, S.C. 1948, c. 54, majoritarian exclusivity was a central protection. Mostprovinces quickly aligned their legislation with these principles (Adams, at paras. 1.240-1.250).[345] With the exception of specific public services and the construction industry inQuebec (An Act respecting labour relations, vocational training and workforce management inthe construction industry, R.S.Q., c. R-20), majoritarian exclusivity has remained a definingprinciple of the Canadian labour relations model (Rayner, at p. 16; Carter et al., at para. 574).

[346] The reason for the protection is grounded in common sense and the pre-1944experience. A lack of exclusivity allows an employer to promote rivalry and discord amongmultiple employee representatives in order to “divide and rule the work force”, using tactics likeengaging in direct negotiations with individual employees to undercut “the credibility of theunion . . . at the bargaining table” (Paul Weiler, Reconcilable Differences: New Directions inCanadian Labour Law (1980), at p. 126; see also Adams, at para. 3.1750).2011 SCC 20 (CanLII)[347] Rol-Land Farms, for example, unrestrained by the legal requirement to bargain onlywith one bargaining agent, sponsored its own “employee association” in direct competition withthe union that had the workers’ majority support. That is precisely the kind of conduct that BoraLaskin identified in 1944 as the flaw in Canada’s then existing labour legislation, namely that “itneither compelled employers to bargain collectively with the duly chosen representatives of theiremployees nor did it prohibit them from fostering company-dominated unions” (“Recent LabourLegislation in Canada” (1944), 22 Can. Bar Rev. 776, at p. 781). It also led Canada’s LabourMinisters that same year to include exclusivity among what were considered to be indispensibleprotections for collective bargaining rights.[348] The inevitable splintering of unified representation resulting from the absence ofstatutory protection for exclusivity is particularly undermining for particularly vulnerableemployees. Professor David M. Beatty vividly observed that agricultural workers are “amongthe most economically exploited and politically neutralized individuals in our society”:

Because they are heavily drawn from a migrant and immigrant population, theseworkers face even more serious obstacles to effective participation in the politicalprocess… Denying agricultural workers the benefits of [collective bargaining] meansthat the legal processes which enable much of the rest of our workforce to beinvolved in decision-making at the workplace in a realistic way are unavailable to thefarm workers. Thus a group of workers who are already among the least powerfulare given even less opportunity than the rest of us to participate in the formulationand application of the rules governing their working conditions.(Putting the Charter to Work: Designing a Constitutional Labour Code (1987), at p.89)2011 SCC 20 (CanLII)See also Task Force on Labour Relations, Canadian Industrial Relations: The Reportof Task Force on Labour Relations (1968) (the “Woods Report”), at p. 86.[349] These conclusions were echoed by the trial judge in Dunmore, Sharpe J., whoseobservations were endorsed in this Court by Bastarache J.:Distinguishing features of agricultural workers are their political impotence, theirlack of resources to associate without state protection and their vulnerability toreprisal by their employers; as noted by Sharpe J., agricultural workers are “poorlypaid, face difficult working conditions, have low levels of skill and education, lowstatus and limited employment mobility” . . . . [para. 41][350] The conditions of singular employment disadvantage for workers in the agriculturalsector, as the trial judge in this case acknowledged, remain operative today. Permitting multiplerepresentatives of disparate individuals or groups in such a workplace effectively nullifies theability of its workers to have a unified and therefore more cogent voice in attempting to mitigateand ameliorate their relentlessly arduous working conditions.

[351] I acknowledge that different models of labour relations exist globally, some of whichdo not recognize the principle of majoritarian exclusivity (Clyde W. Summers, “ExclusiveRepresentation: A Comparative Inquiry into a ‘Unique’ American Principle” (1998-1999), 20Comp. Lab. L. & Pol’y J. 47; Roy J. Adams, “Prospects for Labour’s Right to BargainCollectively After B.C. Health Services” (2009), 59 U.N.B.L.J. 85). These models, however,have been developed in entirely different historical contexts and systems of collective bargaining2011 SCC 20 (CanLII)and have yet to be seriously road-tested in the Canadian context outside of the constructionindustry in Quebec. This is not to say that there is no room for innovation in the modalities ofthe Canadian labour relations model. But to “innovate” by eliminating a fundamental protectionfor the most vulnerable of workers is nullification, not innovation.[352] Can the absence of these statutory protections be justified under s. 1 of the Charter?In my view they cannot.[353] Chief Justice Winkler found that the relevant objectives of the rights limitation —the failure to provide agricultural workers with the necessary statutory protections to exercise theright to bargain collectively — were “to protect the family farm and farm production/viability”(para. 122).[354] These were found by this Court to be pressing and substantial objectives in Dunmoreand are conceded to reach the necessary threshold in our case.

[355] Even assuming that there is a rational connection between at least the secondobjective and the limitation, I see the minimal impairment branch of the Oakes test as beingdeterminative. Under this step we ask whether there are “less harmful means of achieving thelegislative goal” (Alberta v. Hutterian Brethren of Wilson Colony, 2009 SCC 37, [2009] 2 S.C.R.567, at para. 53). The AEPA has an absolute exclusion of any protection for a process ofcollective bargaining: all agricultural workers, in all sectors of agriculture, no matter the size and2011 SCC 20 (CanLII)nature of the agricultural enterprise, are precluded from exercising their s. 2(d) rights. If thegovernment has impeded those rights more than is reasonably necessary to achieve its statedobjectives, then this absolute exclusion is not constitutionally justified.[356] The first governmental objective of the absolute exclusion is the protection of familyfarms. Is a one-size-fits-all exclusion responsive to protecting family farms? It seems to meclear that less harmful means than outright exclusion are readily available to achieve theobjective. Two provinces, for example, Quebec and New Brunswick, have specific exemptionsfor farms employing less than three (Labour Code, R.S.Q., c. C-27, s. 21) or five (IndustrialRelations Act, R.S.N.B. 1973, c. I-4, s. 1(5)(a)) workers.[357] It is also worth remembering that we are dealing with a highly diversified sector,only some of which consists of family farms. As Bastarache J. noted, there is an “increasingtrend . . . towards corporate farming and complex agribusiness” (Dunmore, at para. 62). Rol-Land Farms, for example, is a mushroom farm that employs between 270-300 workers. Thenature of this kind of farm, as described in Wellington Mushroom Farm, [1980] O.L.R.B. Rep.

May 813, does “not differ in any material respect from a typical manufacturing plant” (para. 29).The description in the reasons of Vice-Chairman R. O. MacDowell is telling:There is no close involvement with the family farm. The production process is notseasonal, but rather, resembles a production cycle. The labour force is neither casualnor transitory. The operation is of considerable size, employing close to 200employees in a single location with a “factory atmosphere”; and the company ismuch less economically vulnerable than many other employers to which The LabourRelations Act applies. [para. 25]2011 SCC 20 (CanLII)[358] Preventing all agricultural workers from access to a process of collective bargainingin order to protect family farms, no matter their size or character, is the antithesis of minimalimpairment. Such a limitation harms the s. 2(d) right in its entirety, not minimally.[359] The other government objective is more general — the protection of the viability offarms and agricultural production. It is instructive to consider the 1992 recommendations of theOntario government’s consultative Task Force on Agricultural Labour Relations, composed ofrepresentatives from the agricultural community, organized labour, farm workers andgovernment (Task Force on Agricultural Labour Relations, Report to the Minister of Labour(June 1992); Second Report to the Minister of Labour (November 1992)). The Task Force’srecommendations in its two reports are germane not because they should be seen as binding, butbecause they demonstrate that there are “less harmful means” than an absolute exclusion toachieve the government’s objective of protecting agricultural production and viability.

[360] The Task Force considered whether — and how — agricultural workers should beentitled to bargain collectively, given the unique characteristics of the agricultural sector. Itconcluded that “all persons employed in agriculture and horticulture” should be able to engage incollective bargaining, including those on family or smaller farms, but in accordance with aseparate labour relations scheme that is “sufficiently modified” to reflect the “particular needs”of the agricultural sector (pp. 7-8).2011 SCC 20 (CanLII)[361] The “single most critical issue” raised by farm owners before the Task Force was the“threat of work stoppage” (p. 3). In response to this and many other submissions, the Task Forcerecommended that all forms of work stoppage be prohibited and replaced by a dispute resolutionprocess that:• emphasizes the preference for negotiated settlements between the parties.• provides conciliation and mediation services to assist the parties in reaching anegotiated settlement.• provides an arbitration process for the final and binding resolution of all outstandingmatters between the parties following exhaustion of the negotiation process. [p. 10]It also recommended that there be an Agricultural Labour Relations Act, to be administered by aseparate Board (Second Report, at p. 17).[362] The government adopted these recommendations in the Agricultural LabourRelations Act, 1994, S.O. 1994, c. 6 (“ALRA”). The ALRA included protection for collective

argaining, including exclusivity, but prohibited work stoppages (ss. 3, 10 and 11). The inherentcompromise in that legislation is reflected in its preamble:It is in the public interest to extend collective bargaining rights to employees andemployers in the agriculture and horticulture industries.However, the agriculture and horticulture industries have certain uniquecharacteristics that must be considered in extending those rights. Those uniquecharacteristics include seasonal production, climate sensitivity, time sensitivity, andperishable nature of agriculture and horticulture products, and the need formaintenance of continuous processes to ensure the care and survival of animal andplant life.2011 SCC 20 (CanLII)[363] The ALRA was repealed in 1995 (c. 1, s. 80). Thereafter agricultural workers wereleft only with their pre-existing exclusion from the Ontario Labour Relations Act, 1995, creatingthe spark that ignited Dunmore.[364] And since s. 1 of the Charter directs us to compare how other democraticgovernments limit a particular right, it is also helpful to look at how other Canadian jurisdictionsdeal with agricultural workplaces. Except in Alberta, agricultural workers in every provincehave the same collective bargaining rights as other employees, including exclusivity (LabourRelations Code, R.S.B.C. 1996, c. 244, s. 1; The Trade Union Act, R.S.S. 1978, c. T-17, s. 2; TheLabour Relations Act, R.S.M. 1987, c. L10, s. 1; Labour Code (Que.), s. 21; Industrial RelationsAct (N.B.), s. 1(5)(a); Trade Union Act, R.S.N.S. 1989, c. 475, s. 2(1); Labour Act, R.S.P.E.I.1988, c. L-1, s. 7; Labour Relations Act, R.S.N.L. 1990, c. L-1, s. 2(1); Labour Relations Code,R.S.A. 2000, c. L-1, s. 4(2)(e)).

[365] Reviewing the consequences of the near-universality of extending bargaining rightsto Canadian agricultural workers, the 1992 Task Force concluded that the availability of the rightto bargain collectively in these provinces has not “had a significant negative impact on farmeconomics” (p. 3). This state of national affairs clearly does not preclude the government fromoffering a s. 1 justification unique to Ontario, but it has not, and perhaps realistically cannot,explain why Ontario’s farming interests are so different as to warrant a complete exclusion rather2011 SCC 20 (CanLII)than less intrusive means of achieving its objectives.[366] The agricultural sector undoubtedly faces significant economic challenges, but so domany others, in none of which are employees deprived of access to a process of collectivebargaining.[367] The government has therefore not justified why achieving protection for agriculturalviability and production requires so uniquely draconian a restriction on s. 2(d) rights. Thelimitation is, in fact, like its relationship to protecting family farms, not even remotely tailored tomeet the government’s objective in a less intrusive way. It is, in fact, not tailored at all. AsWinkler C.J.O. concluded:. . . the legislature made no attempt to engage in a line-drawing exercise . . . totailor a collective bargaining system that recognizes the challenges facing theagricultural sector. [para. 135][368] On the other hand, it bears repeating that the AEPA was designed before HealthServices was decided. The government could hardly be expected to tailor its legislation in

accordance with a bargaining regime it had neither a duty nor an intention to implement at thetime. Nonetheless, the fact is that Health Services intervened and changed the microscope underwhich the AEPA was scrutinized. And under the new lens, the complete absence of any statutoryprotection for a process of collective bargaining in the AEPA cannot be said to be minimallyimpairing of the s. 2(d) right.[369] I would therefore dismiss the appeal without costs.2011 SCC 20 (CanLII)

APPENDIXLabour Relations Act, 1995, S.O. 1995, c. 1, Sched. A3. This Act does not apply,(b.1) to an employee within the meaning of the AgriculturalEmployees Protection Act, 2002;...2011 SCC 20 (CanLII)Agricultural Employees Protection Act, 2002, S.O. 2002, c. 161. (1) The purpose of this Act is to protect the rights of agricultural employeeswhile having regard to the unique characteristics of agriculture, including, but notlimited to, its seasonal nature, its sensitivity to time and climate, the perishability ofagricultural products and the need to protect animal and plant life.(2) The following are the rights of agricultural employees referred to insubsection (1):1. The right to form or join an employees’ association.2. The right to participate in the lawful activities of an employees’association.3. The right to assemble.4. The right to make representations to their employers, through anemployees’ association, respecting the terms and conditions of theiremployment.5. The right to protection against interference, coercion and discrimination inthe exercise of their rights.2. (1) In this Act,...“employees’ association” means an association of employees formed for the purposeof acting in concert;

5. (1) The employer shall give an employees’ association a reasonableopportunity to make representations respecting the terms and conditions ofemployment of one or more of its members who are employed by that employer.(2) For greater certainty, an employees’ association may make its representationsthrough a person who is not a member of the association.(3) For the purposes of subsection (1), the following considerations are relevant tothe determination of whether a reasonable opportunity has been given:1. The timing of the representations relative to planting and harvesting times.2. The timing of the representations relative to concerns that may arise inrunning an agricultural operation, including, but not limited to, weather,animal health and safety and plant health.2011 SCC 20 (CanLII)3. Frequency and repetitiveness of the representations.(4) Subsection (3) shall not be interpreted as setting out a complete list of relevantconsiderations.(5) The employees’ association may make the representations orally or in writing.(6) The employer shall listen to the representations if made orally, or read them ifmade in writing.(7) If the representations are made in writing, the employer shall give theassociation a written acknowledgment that the employer has read them.…8. No employer, employers’ organization or person acting on behalf of anemployer or an employers’ organization shall interfere with the formation, selectionor administration of an employees’ association, the representation of employees by anemployees’ association or the lawful activities of an employees’ association, butnothing in this section shall be deemed to deprive an employer of the employer’sfreedom to express views so long as the employer does not use coercion, intimidation,threats, promises or undue influence.9. No employer, employers’ organization or person acting on behalf of anemployer or an employers’ organization,(a) shall refuse to employ or to continue to employ a person, or discriminateagainst a person in regard to employment or any term or condition ofemployment because the person was or is a member of an employees’association or was or is exercising any other right under this Act;

(b) shall impose any condition in a contract of employment or propose theimposition of any condition in a contract of employment that seeks to restrainan employee or a person seeking employment from becoming a member of anemployees’ association or exercising any other right under this Act; or(c) shall seek by threat of dismissal, or by any other kind of threat, or by theimposition of a pecuniary or other penalty, or by any other means to compelan employee to become or refrain from becoming or to continue to be or tocease to be a member or officer or representative of an employees’ associationor to cease to exercise any other right under this Act.10. No person, employees’ association, employers’ organization or other entityshall seek by intimidation or coercion to compel any person to become or refrain frombecoming or to continue to be or to cease to be a member of an employees’association or of an employers’ organization or to refrain from exercising any rightunder this Act or from performing any obligations under this Act.2011 SCC 20 (CanLII)18. The Labour Relations Act, 1995 does not apply to employees or employers inagriculture.…Appeal allowed and action dismissed, ABELLA J. dissenting.Solicitor for the appellant: Attorney General of Ontario, Toronto.Cornish, Toronto.Solicitors for the respondents: Cavalluzzo Hayes Shilton McIntyre &Solicitor for the intervener the Attorney General of Canada: AttorneyGeneral of Canada, Ottawa.

Solicitor for the intervener the Attorney General of Quebec: AttorneyGeneral of Quebec, Québec.Solicitor for the intervener the Attorney General of NewBrunswick: Attorney General of New Brunswick, Fredericton.Solicitor for the intervener the Attorney General of British2011 SCC 20 (CanLII)Columbia: Attorney General of British Columbia, Vancouver.Solicitor for the intervener the Attorney General of Alberta: AttorneyGeneral of Alberta, Edmonton.Solicitors for the intervener the Ontario Federation ofAgriculture: Heenan Blaikie, Toronto.Solicitors for the intervener the Federally Regulated Employers —Transportation and Communications: Heenan Blaikie, Montréal.Blaikie, Montréal.Solicitors for the intervener Conseil du patronat du Québec Inc.: HeenanSolicitors for the intervener the Mounted Police Members’ LegalFund: Heenan Blaikie, Toronto.

McKelvey, St. John’s.Solicitors for the intervener the Canadian Employers Council: StewartSolicitors for the interveners the Coalition of BC Businesses and theBritish Columbia Agriculture Council: Heenan Blaikie, Vancouver.Solicitors for the interveners Justicia for Migrant Workers and the2011 SCC 20 (CanLII)Industrial Accident Victims Group of Ontario: Pieters Law Office, Toronto.Solicitors for the intervener the Canadian Labour Congress: SackGoldblatt Mitchell, Toronto.Solicitors for the intervener the Canadian Police Association: Paliare,Roland, Rosenberg, Rothstein, Toronto.Solicitors for the intervener the Canadian Civil LibertiesAssociation: Green & Chercover, Toronto.

CLIENT UPDATELABOUR & EMPLOYMENT LAW GROUPContact usCharlottetown, Prince Edward Island65 Grafton StreetCharlottetown, PE, CanadaC1A 1K8Telephone: 902.892.2485Fax: 902.566.5283charlottetown@stewartmckelvey.comFredericton, New Brunswick600 - 77 Westmorland StreetFredericton, NB, CanadaE3B 6Z3Telephone: 506.458.1970Fax: 506.444.8974fredericton@stewartmckelvey.comHalifax, Nova ScotiaPurdy’s Wharf Tower One900 - 1959 Upper Water StreetHalifax, NS, CanadaB3J 3N2Telephone: 902.420.3200Fax: 902.420.1417halifax@stewartmckelvey.comMoncton, New BrunswickBlue Cross Centre601 - 644 Main StreetMoncton, NB, CanadaE1C 1E2Telephone: 506.853.1970Fax: 506.858.8454moncton@stewartmckelvey.comSaint John, New BrunswickBrunswick House1000 - 44 Chipman HillSaint John, NB, CanadaE2L 2A9Telephone: 506.632.1970Fax: 506.652.1989saint-john@stewartmckelvey.comSt. John’s, Newfoundland and LabradorCabot Place1100 - 100 New Gower StreetSt. John’s, NL, CanadaA1C 6K3Telephone: 709.722.4270Fax: 709.722.4565st-johns@stewartmckelvey.comONTARIO (ATTORNEY GENERAL)V. FRASEREmployers, unions, governments and courts have grappled with the implicationsof the Supreme Court of Canada decision in Health Services, which extended thefreedom of association granted in section 2(d) of the Charter to protect the processof meaningful collective bargaining. The Supreme Court of Canada consideredthe case for the first time in the very recent decision of Ontario (Attorney General)v. Fraser. The Supreme Court of Canada overturned the Ontario Court of Appealdecision and found the legislation governing agricultural workers in Ontario to beconstitutional. Health Services has been left intact, but with a dispensing of some ofthe more outlandish expectations which it has generated within the labour movement,and emphasis on the “minimal’ nature of the right afforded.FactsOntario agricultural workers enjoyed a short lived inclusion in the Ontario statutorylabour relations framework under the Agricultural Labour Relations Act (“ALRA”).When the ALRA was repealed a year after it was brought into force, the United Foodand Commercial Workers Union of Canada (“UFCW”) brought a successful challengein the Supreme Court of Canada. In the 2001 case Dunmore, the Supreme Court ofCanada held that the government had a positive duty to enact legislation that wouldprotect agricultural workers’ freedom to organize, more specifically, one that wouldenable a process whereby agricultural workers could meaningfully pursue commonworkplace goals. The Agricultural Employee Protection Act (“AEPA”) was enactedas a result. The AEPA granted new rights to agricultural workers, including the abilityto form employees’ associations who could make representations to employersregarding the workers’ terms and conditions of employment. The employer wasrequired to allow the representations to be made, and to read or listen to them.However, agricultural workers in Ontario remained excluded from the LabourRelations Act (“LRA”). As a result, the UFCW mounted a constitutional challengeagainst the AEPA in the Ontario courts seeking to have farm workers enjoy the sameability to unionize as other workers under the LRA.The Trial Division dismissed the claim on the basis that the AEPA provided theminimum requirements set out in Dunmore. Prior to the Court of Appeal decision,the Supreme Court of Canada released its decision in Health Services. The Courtof Appeal consequently allowed the appeal and agreed with UFCW that the AEPAdid not provide the protection required to enable agricultural workers to bargaincollectively in a meaningful way. The Court of Appeal held that the section 2(d) right toa process of collective bargaining required the conventional labour relations regimeprotections, namely that: each bargaining unit is represented by one bargainingagent (a principle known as majoritarian exclusivity); a statutory process for disputeresolution; and, a statutory duty to bargain in good faith. In effect, the Court of Appealconstitutionalized one particular labour relations regime – the standard Wagner Actmodel, which forms the basis for labour relations statutes in Canada. According tothe Ontario Court of Appeal, only that model would pass Charter scrutiny.

DecisionIn a decision that involved four separate judgments,the Supreme Court of Canada allowed the appealand eight out of nine justices found the AEPAconstitutionally valid.Chief Justice McLaughlin and Justice LeBel wrotethe majority decision on behalf of five justices ofthe Court. They reiterated that, pursuant to HealthServices, freedom of association protects a right toassociate to achieve collective goals. This mandatesmeaningful dialogue, but does not impose a particularprocess, does not guarantee an outcome, does notrequire that parties reach an agreement, and does notrequire government to legislate a dispute resolutionmechanism. It only protects a right to a generalprocess of good faith collective bargaining. Therefore,the Court of Appeal’s decision that legislaturesare required to legislate a Wagner Act collectivebargaining model similar to the LRA was incorrect.There is not one constitutionally-sanctioned model ofcollective bargaining. What is protected is the right tomake representations to an employer and have themconsidered in good faith, and the employer’s obligationto subsequently engage in meaningful discussion.The majority found the AEPA was constitutionally validfor three reasons. First, the majority indicated that thepurpose of the provisions that enable an employees’association to make submissions to an employer andthe concomitant obligation of the employer to hear orread such submissions, is to ensure that the employerconsiders the submissions in good faith. Otherwise,the provisions would be rendered effectively useless.Second, because Parliament and Legislatures arepresumed to comply with the Charter, any ambiguityin the AEPA has to be interpreted in accordance withthe Charter, Dunmore and Health Services. Third,the majority emphasized that it was the intention ofthe legislature when enacting the AEPA to ensurethat the freedom of association offered therein ismeaningful. Although the legislature did not intendto provide agricultural workers with the WagnerAct collective bargaining model, it did not intend todeprive them of Charter protection either. Ultimately,these three reasons constituted the basis for themajority’s decision that the AEPA protects the right ofagricultural workers to make submission to employerson workplace matters, and the right to have thosesubmissions considered in good faith. Accordingly, itwas found to be constitutionally valid.What This Case Means to YouThe most significant concern with Health Serviceswas the uncertainty it created. It has been used byunions in many ways, with varying success. By way ofexample, there have been court challenges to extendbargaining rights to new employees (Mounted PoliceAssn. of Ontario v. Canada (Attorney General), Fraser),substantive gains in collective bargaining (Old Dutch),and allegations of unfair labour practices (Plourde v.Wal-Mart Canada Corp.). While government actionthat limits collective bargaining rights will continue tobe closely scrutinized, Fraser makes two points thatare significant for employers. The first is the SupremeCourt of Canada’s emphasis on the minimal andprocedural nature of the right to collective bargaining.The second is that the Wagner Act model is not theonly model of labour relations which will pass Charterscrutiny. Both points help define the scope of HealthServices; and consequently, the ways in which thecase may be used going forward.Augustus Lilly, Q.C. (retired) and Stephen Penney ofStewart McKelvey acted for the Canadian EmployersCouncil in its intervention in Fraser.The foregoing is intended for general informationonly. If you have any questions, or for a detailed listand background of our labour and employment team,please visit www.stewartmckelvey.com.

SUPREME COURT OF NOVA SCOTIACitation: Sharecare Homes Inc. v. Cormier, 2010 NSSC 252Between:Sharecare Homes Incorporatedv.Date: 20100629Docket: Hfx. No. 308173Registry: HalifaxApplicant2010 NSSC 252 (CanLII)Catherine CormierRespondentJudge:Heard:The Honourable Associate Chief Justice Deborah K. SmithJuly 7 th , 2009 in Halifax, Nova ScotiaFinal Written By the Applicant: April 20 th , 2010Submissions: By the Respondent: April 16 th , 2010Counsel:David G. Coles, Q.C. and Rebecca L. Hiltz LeBlancfor the ApplicantLisa Richards for the Respondent

Page: 2By the Court:[1] This matter involves an application by Sharecare Homes Incorporated forjudicial review of a decision of a consensual arbitrator dated January 29 th , 2009. TheRespondent is Catherine Cormier.FACTS2010 NSSC 252 (CanLII)[2] Sharecare Homes Incorporated (hereinafter referred to as “the Company”) isin the business of running small option homes for disadvantaged individuals. SharonNordqvist, Kurt Nordqvist and the Respondent, Catherine Cormier, were allshareholders in the Company. In addition, Ms. Cormier was an employee of theCompany. In particular, she was the manager responsible for the daily operation ofthe business including the hiring of staff.[3] The Respondent was employed by the Company pursuant to the terms of aManager Employment Agreement dated March 29 th , 1999. Pursuant to the terms ofthat Agreement, Sharecare had the right to terminate Ms. Cormier’s employment forcause which was defined, inter alia, as including “any material breach of theprovisions of this agreement”. Upon such termination, Ms. Cormier was required toimmediately tender her shares in the Company and she was to receive payment forthese shares in accordance with a Buy-Sell Agreement of the same date. This latterAgreement provided a mechanism for establishing the value of her shares. Inaddition, clause 7.03 of the Buy–Sell Agreement provided that if a shareholdercommitted an act of “default” then the price to be paid for that person’s shares wouldbe reduced by 20%. “Default” was defined in the Buy-Sell Agreement to include a

Page: 3failure to observe, perform or carry out any of the obligations under the employmentcontract referred to previously.[4] In the fall of 2004 and in 2005 negotiations took place for Ms. Cormier topurchase the Nordqvists’ shares in the Company. These negotiations eventually brokedown and on October 17 th , 2005 a letter was sent from the Nordqvists’ solicitor to Ms.Cormier’s solicitor indicating that the Nordqvists now wished to purchase Ms.Cormier’s shares in the Company. It does not appear from the materials that havebeen filed that Ms. Cormier was interested in this.2010 NSSC 252 (CanLII)[5] On October 28 th , 2005 a meeting was held for Ms. Cormier to review theCompany’s financial records. A dispute arose between Ms. Nordqvist and Ms.Cormier at this meeting and it was terminated. Shortly thereafter, Ms. Cormierreceived notice of a directors’ meeting dated October 28 th , 2005. This notice indicatedthat a meeting of the Board of Directors of the Company would be held on October31 st , 2005 to discuss the performance of Ms. Cormier as an employee and to determinewhether her employment should be terminated. Ms. Cormier attended that meetingand was advised by the Nordqvists that her employment was being terminated forcause. Shortly thereafter, the Nordqvists’ solicitor wrote to Ms. Cormier’s solicitorstating “As Ms. Cormier’s employment with the Company has been terminated, ourclients intend to invoke their right to purchase her shares pursuant to Article 9 of theShareholders’ Agreement (the “Agreement”).”[6] After Ms. Cormier’s employment was terminated the Nordqvists became awareof an employment arrangement that Ms. Cormier had put in place with one of the

Page: 4Company’s employees which, they submitted, justified her termination. Theemployee in question was a Nigerian immigrant by the name of Simeon Fagbile. InMay of 2005, Ms. Cormier hired Mr. Fagbile to be a live-in caregiver at one of theCompany’s homes. One of the residents of that home was an elderly gentleman bythe name of Forrest Dorey. At the time, Mr. Dorey was 90 years of age, wasdemanding and required a great deal of care. Mr. Dorey liked Mr. Fagbile and theygot along well.2010 NSSC 252 (CanLII)[7] Shortly after Mr. Fagbile commenced his employment with the Company helearned that he was not permitted to work in Canada for a “for profit” organization andthat his employment with the small options home was in violation of the terms of hisimmigration. Mr. Fagbile reported this to Ms. Cormier. Mr. Fagbile wanted to keephis job and Ms. Cormier did not want to lose him as an employee due to his positiverelationship with Mr. Dorey. Accordingly, Ms. Cormier and Mr. Fagbile spoke withMr. Fagbile’s immigration lawyer, Mr. Gilpin, to see if there was a solution to theproblem. Mr. Gilpin advised Ms. Cormier about a live-in care worker program thatpermitted immigrants to work in Canada as caregivers provided that they wereemployed by someone other than a “for profit” business.[8] Ms. Cormier then arranged a plan to have Mr. Fagbile continue to be employedand paid by the Company but make it look like he had been hired by Mr. Dorey’sdaughter. Full details of this arrangement are set out in the arbitrator’s decision(which is appended as Schedule “A”) and will not be repeated here. Suffice it to saythat the Applicant takes the position that Ms. Cormier’s actions were illegal andfraudulent and that they put the Company in jeopardy of prosecution for serious

Page: 5offences under the Immigration and Refugee Protection Act. As indicated, theApplicant took the position that this conduct justified Ms. Cormier’s termination fromher job.[9] Ms. Cormier disputed that the Company had cause to terminate her employmentand threatened to bring an action for wrongful dismissal. Subsequently, the partiesagreed to submit the matter to arbitration.2010 NSSC 252 (CanLII)[10] John P. Merrick, Q.C. heard the case as a sole arbitrator on July 23 rd - 25 th ,2008. He had previously arbitrated the issue of the value of Ms. Cormier’s shares inthe Company pursuant to the Buy-Sell Agreement and the parties asked him toconduct a further arbitration to determine whether the Company had cause toterminate Ms. Cormier’s employment and, if not, what the appropriate remedies were.All parties agreed that if the Company had cause to terminate Ms. Cormier’semployment then the conduct which constituted cause would also constitute an act of“default” under the Buy-Sell Agreement such that the value of Ms. Cormier’s shareswould be reduced by 20%.[11] At the arbitration hearing the Company relied upon seven issues that theysubmitted constituted “cause” for Ms. Cormier’s job to be terminated. They were asfollows:(1) Ms. Cormier knowingly continued the employment of Simeon Fagbile whowas ineligible to work for Sharecare Homes Inc., from the time the worker informedMs. Cormier of his ineligibility up until receipt of a work permit obtained throughthe instrumentality of Ms. Cormier by means of misrepresentation, thus exposingSharecare Homes Inc. and its Directors to possible prosecution and penalty;

Page: 6(2) Ms. Cormier, having misrepresented to the authorities the nature of Mr.Fagbile’s employment continued his employment until Ms. Cormier’s terminationexposing Sharecare Homes Inc. and its Directors to possible prosecution andpenalties;(3) Ms. Cormier failed to “......devote the whole of her working time andattention to the business of the corporation”;(4) Ms. Cormier engaged in carrying on another business without prior writtenapproval of the Company;2010 NSSC 252 (CanLII)(5) Ms. Cormier failed to keep accurate reports and records and observedirections from the Board of Directors;(6) Ms. Cormier failed to satisfy confidential obligations;(7) Ms. Cormier was grossly insubordinate.[12] On January 29 th , 2009 the arbitrator released his decision. He reviewed eachof the allegations against Ms. Cormier in detail and concluded as follows:(1) The Company had no entitlement to terminate the employment of Ms.Cormier and in doing so was in breach of the Employment Agreement.(2) Ms. Cormier did not commit an act of default under clause 7.03 of the Buy-Sell Agreement and, accordingly, the purchase price payable in relation to Ms.Cormier’s shares was not to be reduced by 20%.(3) Ms. Cormier was entitled to the sum of $27,000.00 from the Company byway of damages for wrongful termination.(4) The Company owed Ms. Cormier a further $6,000.00 for wages due andowing.

Page: 7(5) Interest was payable on the two amounts referred to in # 3 and 4 above at arate of 5% per year (not compounded) from the date of wrongful termination untilpayment.[13] In addition, the arbitrator reserved on the issue of costs and retained jurisdictionto deal with any other issues that might arise out of the award.[14] As part of the adjudicator’s award he indicated that he was not satisfied that Ms.Cormier understood that what she was doing in relation to Mr. Fagbile was illegal.He concluded that her actions did not constitute a breach of her employment dutiesand, accordingly, did not warrant her dismissal.2010 NSSC 252 (CanLII)[15] On March 4 th , 2009 the Applicant filed a Notice for Judicial Review in theSupreme Court. In that document the Applicant states that it is seeking judicial reviewon the following grounds.(1) The arbitrator’s decision that Catherine Cormier (“Cormier”) did not knowher conduct was illegal is unreasonable and contrary to all the evidence;(2) The arbitrator made an error of law on the face of the record in concludingthat Cormier’s illegal conduct was not just cause for her dismissal;(3) The arbitrator made an error of law on the face of the record in concludingthat Cormier’s serious breach of trust was not just cause for her dismissal.[16] In the materials filed in response to the application the Respondent took theposition that the “governing legislation” precluded intervention by the courts on thegrounds relied on by the Applicant. However, both the Applicant and the Respondent

Page: 8approached the hearing and made their arguments on the basis that it was an ordinaryjudicial review. Each party proceeded with a Dunsmuir analysis (Dunsmuir v. NewBrunswick, 2008 SCC 9) with the Applicant submitting that the appropriate standardof review is correctness and the Respondent submitting that the appropriate standardof review is reasonableness.[17] Following the hearing, I brought to counsel’s attention the issue of whetherjudicial review is available with respect to a decision of a private consensualarbitrator. I referred counsel to the decisions in Ellsworth v. Ness Homes Ltd., [1999]A.J. No. 439; Knox v. Conservative Party of Canada, 2007 ABCA 295; Alaimo v. DiMaio, [2008] O.J. No. 3570 (Ont. S.C.J.); Bansal v. Stringam, 2009 ABCA 87;3Genius Corp. v. White, 2009 CarswellOnt 3454 (Ont S.C.J. (Com. List)) and InforicaInc. v. CGI Information Systems & Management Consultants Inc., 2009 ONCA 642and requested further submissions.2010 NSSC 252 (CanLII)ANALYSIS AND CONCLUSIONS[18] For reasons which follow, I have concluded that the arbitration in question isgoverned by the Nova Scotia Commercial Arbitration Act and that judicial review andcourt intervention is not available beyond the scope of that Act.[19] As indicated previously, the parties executed a Buy-Sell Agreement and aManager Employment Agreement both dated March 29 th , 1999. Clause 10.08 of theBuy-Sell Agreement contains an arbitration clause which reads:

Page: 910.08 Should there be a disagreement or a dispute between the parties hereto withrespect to this Agreement or the interpretation hereof, the same shall be referred toa single arbitrator pursuant to the Arbitration Act of Nova Scotia, and thedetermination of such arbitrator shall be final and binding upon the parties hereto.[20] There is no such arbitration clause in the Manager Employment Agreement.Nevertheless, the parties agreed to submit the issue of Ms. Cormier’s job terminationto an arbitrator to determine whether the Company had cause to terminate heremployment and, if so, the remedy that should be awarded in the circumstances.2010 NSSC 252 (CanLII)[21] At the time that the Buy-Sell Agreement and the Manager EmploymentAgreement were signed, the Commercial Arbitration Act was not in force. It came intoforce on December 3 rd , 1999 (approximately eight months after these Agreementswere executed).[22] Clause 4(1) of the Commercial Arbitration Act provides:Application of Act4 (1) This Act applies to an arbitration conducted under an arbitration agreementor authorized or required pursuant to an enactment unless(a) the application of this Act is excluded by an agreement of the parties orby law; or(b) Part II of the International Commercial Arbitration Act applies to thearbitration.(2) Where there is a conflict between this Act and another enactment thatauthorizes or requires the arbitration, the other enactment prevails.(3) This Act does not apply to an arbitration authorized or required pursuant toany of the following:(a) the Trade Union Act;(b) a collective agreement under the Trade Union Act;

Page: 10(c) any enactment set out in the regulations.(4) This Act binds Her Majesty in right of the Province. 1999, c. 5, s. 4.[23] Section 59 of the said Act provides:Applicable law[Emphasis added]59 (1) Subject to Section 4 and clause 60(1)(a), this Act applies to an arbitrationconducted under an arbitration agreement entered into before the coming into forceof this Act if the arbitration is commenced on or after the coming into force of thisAct.2010 NSSC 252 (CanLII)(2) The Arbitration Act applies to arbitrations commenced before the coming intoforce of this Act. 1999, c. 5, s. 59.[24] It appears from the information provided to the Court that counsel involved inarranging for this arbitration did not specifically agree that the arbitration would takeplace pursuant to the provisions of the Commercial Arbitration Act. Nor was there anagreement, however, that the Commercial Arbitration Act would not apply. Bothcounsel acknowledged at the hearing before me, however, that the arbitration did takeplace pursuant to an arbitration agreement (an arbitration agreement is not requiredto be in writing – see s. 7(1) of the Commercial Arbitration Act).[25] In my view, it is clear from s. 4 of the Commercial Arbitration Act that that Actpresumptively applies to an arbitration unless its application is excluded by anagreement of the parties or by law. In the case at bar, there was no agreement toexclude the Act nor is there any basis to exclude it by law. Accordingly, I am satisfied

Page: 11that the arbitration in question is governed by the provisions of the CommercialArbitration Act.[26] Interestingly, the Applicant itself appears to have recognized the applicabilityof the Commercial Arbitration Act to the circumstances of this case. In the costssubmissions filed with the arbitrator on March 20 th , 2009 the Applicant referred to andrelied on s. 56 of the Commercial Arbitration Act. Further, in the pre-hearingsubmissions filed with this Court in support of this application reference is made tos. 2 of the said Act. This indicates that the Applicant itself recognized that thearbitration took place pursuant to the provisions of that Act.2010 NSSC 252 (CanLII)[27] That takes me to the issue of whether, in the circumstances of this case, thearbitrator’s decision is subject to the public law remedy of judicial review or whetherit is only subject to review in accordance with the provisions of the CommercialArbitration Act.[28] The matter before me involves a private consensual arbitration. The Partieswere not bound by statute to proceed with arbitration and the arbitrator that theyselected was not appointed pursuant to any legislation. The parties entered into aprivate consensual agreement to resolve their dispute outside of the courts. In myview, it would be inappropriate in the circumstances of this case to proceed with ajudicial review. In particular, it would undermine the stated purpose of theCommercial Arbitration Act (that being to encourage and promote the use ofarbitration as “an alternative to court proceedings” (s. 2)). In addition, it would, in

Page: 12effect, ignore the provisions of the Act that govern and restrict court intervention inthe arbitration process.[29] In Ellsworth v. Ness Homes Ltd., supra, the applicant sought judicial review ofan arbitrator’s award respecting a dispute with a contractor over deficiencies in ahouse. The respondent made a preliminary objection that judicial review was notavailable unless the arbitrator was “under a public duty to perform a certain duty or2010 NSSC 252 (CanLII)refrain from committing a certain act” and that the Alberta Arbitration Act providedan alternate appeal procedure. Girgulis, J. stated at 13:............This is a purely consensual arbitration; it is not a case where, by statute,arbitration is compulsory or imposed upon the parties, directly or indirectly; nor isit a tribunal the members of which are appointed under provincial legislation orregulation to whom persons desiring arbitration must submit. The Arbitration Act isa convenient mode or guide for parties who wish to utilize this method of settlingtheir private disputes. The parties decide who will arbitrate and on what issues andon what procedure. They decide, generally, which sections of the Arbitration Act asvaried, or at all, will apply to their arbitration. There are only a few sections of theAct which cannot be excluded or varied by the agreement of the parties. Judicialreview procedure under the Rules and the prerogative remedies do not apply toconsensual arbitration but apply to statutory bodies or persons carrying out dutiesunder statute to whom parties must submit their dispute. Accordingly, theApplicants are not entitled to relief under the procedure of the judicial reviewrules, and certainly not to certiorari or mandamus. However, the substance of theircomplaints supporting their application for judicial review is generally the same foran application to quash, set aside or appeal an arbitrator’s award.[Emphasis added][30] While the Applicant in that case had applied for judicial review the Court wenton to consider the matter as a motion to set aside or appeal the arbitrator’s awardunder the Arbitration Act.

Page: 13[31] In Knox v. Conservative Party of Canada, supra, the Alberta Court of Appealconsidered whether a decision of a political party under its constitution was subjectto the public law remedy of judicial review or whether review by the Court of QueensBench was limited by the provisions of the Alberta Arbitration Act. The Court statedat 14:Judicial review is a feature of public law whereby the superior courts under s.96 ofthe Constitution Act 1867 engage in surveillance of lower tribunals to ensure that thefundamentals of legality and jurisdiction are respected by those tribunals. Thetribunals which are subject to judicial review are, for the most part, those which arecourt-like in their nature, or administer a function for the benefit of the public onbehalf of a level of government. Those which are empowered by legislation tosupervise and regulate a trade, profession, industry or employment, those which areempowered by legislation to supervise an element of commerce, business, finance,property or legal rights for the benefit of the public generally, or which set standardsfor the benefit of the public may also be subject to judicial review. Issues ofcontractual or property rights as between individuals or as between individuals andorganizations, are generally addressed through ordinary court processes at commonlaw, or by statute or through arbitration or alternative dispute resolution as agreedby the parties.2010 NSSC 252 (CanLII)[32] The Court continued at 20 - 21:It follows that if a tribunal is exercising powers that do not accrue to privateorganizations, and that are only vested on the tribunal by statute for the benefit of thepublic, then it is subject to judicial review. Otherwise it is a private consensualtribunal and prima facie subject only to private law remedies.An examination of the Pushpanathan test, which is used to set the standard ofjudicial review, shows that it is largely inapplicable to private consensual tribunals.The first part of the test is the existence of a privative clause, which is purely amatter of statute. The second part of the test is the expertise of the tribunal. However,where the parties have consented to a particular dispute resolution mechanism, ithardly lies in their mouths to say that the tribunal that they have selected themselves

Page: 14lacks expertise. The third factor, the intention of the statute as a whole, also does notapply to private tribunals. While analogies to each of these factors can undoubtedlybe found when the Court is asked to adjudicate on the activities of a private tribunal,the absence of any public dimension to those activities undermines the raison d’etreof the Pushpanathan test.[33] The Court in that case noted that the Chambers judge had found that the partieshad submitted their dispute to arbitration and that the Court should be reluctant tointervene in such circumstances. The court concluded at 29:2010 NSSC 252 (CanLII)..............We agree with the Appellant that once this finding was made, the chambersjudge was bound to apply the provisions of the Arbitration Act. We see nojurisdictional distinction between the two applications for judicial review. Instead oflimiting his review to the provisions of the Arbitration Act, the chambers judgeapplied an administrative law analysis in the second judicial review to the ArbitrationPanel’s decision. This was an error of law: the Court cannot modify the language ofthe Act to add grounds of review beyond those permitted in s. 37.[34] In Alaimo v. Di Maio, supra, the Court addressed the issue of whether judicialreview is available in respect of a consensual arbitrator’s decision and stated at 61 -65:The parties agreed to the appointment of the Arbitrator......They agreed to a privatedispute resolution mechanism, through the use of the Arbitrator, to resolve anyongoing issues that developed with respect to the manner in which the electionproceeded. The authority of the Arbitrator flowed from their private agreement andnot from any delegation of a statutory or public power.In my opinion, judicial review is not available where an arbitrator is proceeding onthe basis of a private agreement and is not exercising a statutory power of decision,as was the case in this instance.

Page: 15The Applicants should not be permitted to sidestep their private arrangements. Theyagreed that the Act would apply. Section 6 of the Act establishes the philosophy thata court is generally not to intervene in an arbitration conducted under that Act.Furthermore the Act contains express provisions at sections 45 and 46 regardingappeals and reviews that govern the rights of the parties.In my view, it would be inappropriate to apply judicial review in the circumstancesof this case..............The unavailability of judicial review does not, however, mean that arbitral decisionsin Ontario are not subject to judicial scrutiny. There remain rights of appeal asspecified in the Act.2010 NSSC 252 (CanLII)[35] In the case of Bansal v. Stringam, supra, the court dealt with the issue ofwhether judicial review is available in relation to a private tribunal decision and alsoexplained why labour arbitrators have traditionally been subject to judicial review.The court stated at 16 - 18:............Judicial review of decisions of private tribunals constituted by contract isordinarily impossible. Normally judicial review does not lie against privatearbitrators (subject to the statutory exceptions referred to above). The only reasonthat judicial review lies against many labor arbitrators is as follows. Ordinarily thearbitration is under a collective agreement, and the governing labor legislation inCanada usually provides that a collective agreement must provide for some meansof finally settling disputes in a binding manner outside the courts. Ninety-ninepercent of the time, that is so provided by an arbitration clause in the collectiveagreement. So the theory is that such labor arbitrators are not consensual privatetribunals, but statutory bodies. See Port Arthur Shipbuilding Co. v. Arthurs 1968CanLII 29 (S.C.C.), [1969] S.C.R. 85, 90-94.None of that applies to this employment agreement, to this Policy, or to thislegislation.Therefore, judicial review is hopeless. It is unavailable at common law andbarred several times over by legislation.

Page: 16[36] More recently, the Ontario Court of Appeal dealt with this issue in Inforica Inc.v. CGI Information Systems & Management Consultants Inc., supra. The court inthat case was interpreting the Ontario Arbitration Act and stated 14:It is clear from the structure and purpose of the Act in general, and from the wordingof s. 6 in particular, that judicial intervention in the arbitral process is to be strictlylimited to those situations contemplated by the Act. This is in keeping with themodern approach that sees arbitration as an autonomous, self-contained, selfsufficientprocess pursuant to which the parties agree to have their disputes resolvedby an arbitrator, not by the courts. As Inforica states in its factum, “arbitralproceedings are presumptively immune from judicial review and oversight.”The Actencourages parties to resort to arbitration, “require [s] them to hold to that courseonce they have agreed to do so”, and “entrenches the primacy of arbitration overjudicial proceedings.............by directing the court, generally, not to intervene”:Ontario Hydro v. Denison Mines Ltd., [1992] O.J. No. 2948 (Gen Div), Blair, J.2010 NSSC 252 (CanLII)[37] Section 6 of the Ontario Arbitration Act (referred to in Inforica, supra) isessentially the same as s. 8 of the Nova Scotia Commercial Arbitration Act.[38] The Applicant submits that these cases are not applicable in Nova Scotia in lightof the differences between the Ontario Arbitration Act, the Alberta Arbitration Actand the Nova Scotia Commercial Arbitration Act. In particular, the Applicant submitsthat the Ontario Arbitration Act and the Alberta Arbitration Act “contain an expressright of appeal ...... even where the parties’ arbitration agreement is silent on thisissue.” In Nova Scotia, however, there is no right of appeal of an arbitrator’s decisionunless the parties agree otherwise (see s. 48 of the Commercial Arbitration Act). Inthe Applicant’s most recent submissions it is stated at 18:Due to the availability of an adequate, alternate remedy, the courts of Ontario andAlberta can take a more restrictive view of the availability of judicial review thanNova Scotia courts. In Nova Scotia there is no adequate, alternate remedy, and, if

the court refuses to review the arbitrator’s decision, the parties would be left with anunreasonable arbitral decision......Page: 17[39] As a preliminary matter, I disagree with the suggestion by the Applicant that theOntario and Alberta Acts contain an “express right of appeal” from an arbitrator’saward. Section 45 of the Ontario Arbitration Act and s. 44(2) of the AlbertaArbitration Act allow a party to seek leave to appeal an award on a question of law ifan arbitration agreement does not contemplate a right of appeal. Leave will only begranted if a court is satisfied that “the importance to the parties of the matters at stakein the arbitration justifies an appeal” and that “determination of the question of lawat issue will significantly affect the rights of the parties”. This, in my view, is not aright of appeal. It is a right to seek leave to appeal on a question of law if certainprerequisites are satisfied.2010 NSSC 252 (CanLII)[40] In addition, the fact that the Nova Scotia Commercial Arbitration Act is morerestrictive than the Ontario or Alberta Acts on the issue of appeals does not, in myview, support the argument that judicial review of a private arbitrator’s award shouldbe permitted in this province. In fact, the more restrictive rights of appeal andintervention in our legislation lead me to the opposite conclusion. That is – ourlegislature intended to limit the ability of the court to intervene in a consensualarbitration and intended to restrict court intervention to those circumstances set outin the Act.[41] The purpose of the Commercial Arbitration Act is described at s. 2 as follows:Purpose of Act

2 The purpose of this Act is to revise and update the law respecting commercialarbitration and thereby encourage and promote the use of arbitration as an alternativeto court proceedings in resolving disputes between parties to a contract. 1999, c. 5,s. 2.Page: 18[42] Section 8 of the Act restricts the power of the Court to intervene in mattersgoverned by the Act and provides:Restriction on power of court to intervene8 No court may intervene in matters governed by this Act, except for thefollowing purposes as provided by this Act:2010 NSSC 252 (CanLII)(a) to assist the arbitration process;(b) to ensure that an arbitration is carried out in accordance with thearbitration agreement;(c) to prevent manifestly unfair or unequal treatment of a party to anarbitration agreement;(d) to enforce awards. 1999, c. 5, s. 8.[43] Sections 48 and 49 of the Act deal with the issue of appeals and applications toset aside an award and provide:Prerequisite to right to appeal48 (1) Unless the parties otherwise agree, there is no appeal of an award.(2) Where an arbitration agreement so provides, a party may appeal an award to the courton a question of law, on a question of fact or on a question of mixed law and fact. 1999, c.5, s. 48.Setting aside by court49 (1) On the application of a party, the court may set aside an award on any of thefollowing grounds:(a) a party entered into the arbitration agreement while under a legal incapacity;(b) the arbitration agreement is invalid or has ceased to exist;(c) the award deals with a matter in dispute that the arbitration agreement does notcover or contains a decision on a matter in dispute that is beyond the scope of theagreement;

Page: 19(d) the composition of the arbitral tribunal was not in accordance with the arbitrationagreement or, where the agreement did not deal with the matter, was not in accordancewith this Act;(e) the subject-matter of the arbitration is not capable of being the subject ofarbitration pursuant to the law of the Province;(f) the applicant was treated manifestly unfairly and unequally, was not given anopportunity to present a case or to respond to the case of another party or was notgiven proper notice of the arbitration or of the appointment of an arbitrator;(g) the procedures followed in the arbitration did not comply with this Act or thearbitration agreement;(h) an arbitrator committed a corrupt or fraudulent act or there is a reasonableapprehension of bias;(i) the award was obtained by fraud.2010 NSSC 252 (CanLII).......................[44] In my view, these provisions of the Act support the suggestion that the courtshould take a restrictive approach to judicial intervention of a consensual arbitrator’saward.[45] Further, I do not agree with the Applicant’s suggestion that in Nova Scotia thereis no adequate, alternate remedy to judicial review. Section 48 of the CommercialArbitration Act clearly allows the parties to agree to a right of appeal. If the partiesagree – an award may be appealed on a question of law, on a question of fact or on aquestion of mixed law and fact. The only prerequisite is that the parties agree to aright of appeal. In the case at bar, no such agreement was reached. That does notmean that an alternate, adequate remedy is not available in Nova Scotia. It simplymeans that this remedy was not taken advantage of in the circumstances of this case.[46] In the post hearing submissions filed on behalf of the Applicant reference wasmade to the Nova Scotia Court of Appeal decision in Ripley v. Investment DealersAssociation of Canada et al. (No. 2) (1991), 108 N.S.R. (2d) 38 (N.S.S.C. A.D.) in

Page: 20which the Court dealt, inter alia, with the issue of whether certiorari for error of lawon the face of the record was available in relation to decisions of a private body.Freeman J.A. stated at 28:.........Madam Justice Roscoe found that certiorari for error of law on the face of therecord was not available because the Business Conduct Committee panel was a nonstatutorytribunal, but that it was open to her to review the panel's proceedings forwant of jurisdiction or breach of natural justice. She relied on Chyz v. AppraisalInstitute of Canada (1985), 44 Sask. R.165, in which the Saskatchewan Court ofAppeal was considering the finding of the trial judge that "certiorari and prohibition,generally speaking, will not lie against a private body which derives its jurisdictionfrom the consent of its members banded together in a voluntary organization”. Aftera comprehensive review of the case law Tallis, J.A., found that "domestic tribunals(are) subject to the principles of natural justice and procedural fairness". Remediesincluding [sic] declaratory or injunctive relief.2010 NSSC 252 (CanLII)[47] His Lordship went on to state at 31:While prerogative writs do not lie against the panel as a domestic tribunal, itsproceedings are reviewable for want of jurisdiction or breaches of natural justice,which would include bias, as Madam Justice Roscoe found. The remedy, as inSaskatchewan, would be declaratory or injunctive relief.[48] As a preliminary matter, the Applicant submits that the Ripley decision, supra,is not binding upon me as it was decided almost 20 years ago and prior to theenactment of the Commercial Arbitration Act. In the alternative, the Applicantsubmits that if I determine that judicial review is generally not available in thecircumstances of this case, that based on Ripley, supra, the award in question is,nevertheless, reviewable if the arbitrator exceeded his jurisdiction or breached theprinciples of natural justice.

Page: 21[49] The Applicant states that in the circumstances of this case the arbitratorbreached the principles of natural justice by failing to consider or ignoring relevantevidence. It further suggests that “the arbitrator’s holdings in law were made in theabsence of any foundation in the facts in evidence”.[50] The Applicant also submits that the arbitrator’s decision was “flagrantly unjust,absurd, and contrary to common sense” ( 43 of the Applicant’s April 20 th , 2010 brieffiled with the court). The Applicant states that as a result, the arbitrator exceeded hisjurisdiction. The Applicant invites the court to overturn or set aside the arbitrator’saward based on these alleged breaches of natural justice and loss of jurisdiction.2010 NSSC 252 (CanLII)[51] In my view, the law as set out in Ripley, supra, is still valid today. That is, theprerogative writs do not lie against a non-statutory tribunal, however, its proceedingsare reviewable for want of jurisdiction and breaches of natural justice. Issues ofjurisdiction and breaches of natural justice are now codified, however, by theCommercial Arbitration Act and, in particular, s. 49 of that Act. Any relief that theApplicant may seek must be found in the provisions of the Commercial ArbitrationAct.[52] The Applicant further submits that if the court fails to intervene in thesecircumstances parties will be discouraged from seeking arbitration. This, in my view,is not a valid concern. While the Commercial Arbitration Act limits judicialintervention in relation to a consensual arbitrator’s award, the Act does permit theparties to extend the court’s involvement should they see fit. In particular, s. 48 ofthe Act allows broad rights of appeal (on questions of both law and fact or mixed law

Page: 22and fact) provided that the parties agree to these rights being available. Further, ss.8 and 49 of the Act allow court intervention on matters of process, jurisdiction andnatural justice. With these remedies being available pursuant to the Act, I am notsatisfied that the fact that judicial intervention is not available beyond the scope of theAct will discourage parties from participating in this process.[53] As indicated above, I have concluded that judicial review and court interventionin this arbitrator’s award is not available beyond the scope of the CommercialArbitration Act. In the Notice filed with the court in support of this application theApplicant sought judicial review. No relief was requested pursuant to theCommercial Arbitration Act. In particular, an appeal was not filed pursuant to s. 48of the Act nor was an application made to set aside the award pursuant to s. 49 of theAct.2010 NSSC 252 (CanLII)[54] The Respondent submits that the Applicant has failed to file an appeal in atimely manner and is no longer entitled to apply for an appeal or to set aside the awardin question. The Respondent relies on s. 50 of the Commercial Arbitration Act whichreads:Limitation Periods50(1) The following actions shall be commenced within thirty days after an appellantor applicant receives the award, correction, explanation, change or statements ofreasons on which the appeal or application is based:(a) an appeal pursuant to subsection 48(2);(b) an application to set aside an award pursuant to Section 49..............

Page: 23[55] In addition, the Respondent relies on s. 41 of the Act which provides:Effect of award41 An award made by an arbitral tribunal binds the parties unless the award is setaside or varied pursuant to Section 48 or 49. 1999, c. 5, s. 41.[56] It is not necessary for me to decide whether the Applicant can now file a noticeof appeal. It has not attempted to do so. Nor has it applied to amend the Notice filedwith the Court in support of this application. I will indicate, however, that even if anappeal or an application to set aside the award had been filed or an amendment to theprevious notice had been sought and granted, I would not allow an appeal under s. 48of the Act nor would I be prepared to set aside the award pursuant to s. 49 of the Act.2010 NSSC 252 (CanLII)[57] As indicated previously, there is no appeal of an award unless the parties agreeotherwise (s. 48(1)). There was no such agreement in this case.[58] In addition, I am not satisfied that there is an appropriate basis to set aside theaward on any of the grounds enumerated in s. 49 of the Act.[59] During the course of the proceeding the Applicant suggested that if it isdetermined that the Commercial Arbitration Act applies to this case then s. 8(c) of thesaid Act would allow the court to intervene in order “to prevent manifestly unfair orunequal treatment of a party to an arbitration agreement”. The Applicant stated “It isthe Applicant’s submission that a fundamental error in the application of the law bythe arbitrator resulting in the decision rendered represents a manifest unfairness”.[60] As indicated above, the Applicant did not apply to appeal or set aside this awardpursuant to the Commercial Arbitration Act. Even if it had done so, in my view, s.

Page: 248(c) of the Act (or s. 49(1)(f) which also refers to a party being treated unfairly orunequally) would not provide the Applicant with any relief in the circumstances ofthis case. There is nothing, in my opinion, which supports the suggestion that theApplicant was the subject of manifestly unfair or unequal treatment. With respect, itis my view that by raising this section of the Act the Applicant is attempting to dothrough the back door (s. 8(c)) that which it is unable to do through the front door (s.48).2010 NSSC 252 (CanLII)[61] The Applicant has also suggested that s. 6 of the Commercial Arbitration Actprevents the Respondent from relying on s. 48 of the said Act. In my view, thisargument also has no merit.[62] The application of Sharecare Homes Incorporated for judicial review of thedecision of John P. Merrick, Q.C. will be dismissed.COSTS[63] The Applicant has requested costs of both the arbitration and this proceeding.The Respondent seeks costs of this proceeding. As the Respondent has beensuccessful in this application she shall be awarded costs.[64] Civil Procedure Rule 77.06 applies in the circumstances of this case andprovides:Assessment of costs under tariff at end of proceeding

Page: 2577.06 (1) Party and party costs of a proceeding must, unless a judge ordersotherwise, be fixed by the judge in accordance with tariffs of costs and feesdetermined under the Costs and Fees Act, a copy of which is reproduced at the endof this Rule 77.(2) Party and party costs of an application must, unless the judge who hearsthe application orders otherwise, be assessed by the judge in accordance with TariffA as if the hearing were a trial.(3) Party and party costs of a proceeding for judicial review or an appeal tothe Supreme Court of Nova Scotia must, unless the presiding judge orders otherwise,be assessed in accordance with Tariff C.2010 NSSC 252 (CanLII)[65] In my view, costs of this proceeding should be assessed in accordance withTariff C.[66] The hearing of this matter took more than half a day but less than a full day.Tariff C provides for costs for this length of hearing in the range of $1,000.00 -$2,000.00. Tariff C also provides:For applications heard in Chambers the following guidelines shall apply:..........(3) In the exercise of discretion to award costs following an application, a Judgepresiding in Chambers, notwithstanding this Tariff C, may award costs that are justand appropriate in the circumstances of the application.(4) When an order following an application in Chambers is determinative of theentire matter at issue in the proceeding, the Judge presiding in Chambers maymultiply the maximum amounts in the range of costs set out in this Tariff C by 2, 3or 4 times, depending upon the following factors:(a)the complexity of the matter,

Page: 26(b)the importance of the matter to the parties,(c)the amount of effort involved in preparing for and conducting theapplication.[67] In my view, the factors referred to in Tariff C (4)(b) and (c) (the importance ofthe matter to the parties and the amount of effort involved in preparing for andconducting the application) are relevant in the circumstances of this case and warrantan increase in the basic Tariff.2010 NSSC 252 (CanLII)[68] On the other hand, I must consider the fact that while this is not the first timethat a Nova Scotia court has dealt with the issue of whether prerogative writs will lieagainst a non-statutory tribunal – it does appear to be the first time in this provincethat this issue has been dealt with in the context of the Nova Scotia CommercialArbitration Act.[69] Taking all matters into consideration, I have determined that the Respondentwill be awarded costs of $4,000.00 plus her reasonable disbursements as taxed oragreed. These costs shall be payable forthwith.[70] An Order shall issue accordingly.Deborah K. SmithAssociate Chief Justice

:" .. "Schedule AIN THE MATTER OF AN ARBITRATIONBETWEEN:CATHERINE CORMIER- and-CLAIMANT2010 NSSC 252 (CanLII)SHARECARE HOMES INCORPORATEDRESPONDENTARBITRATION DECISIONJanuary 29 th , 2009John P. Merrick, Sole Arbitrator

, ".­-42EXHIBITSPIClaimant's exhibit bookP2 Claimant's Supplemental exhibit bookP3 Claimant's Supplemental exhibit book #2D4 Respondents' exhibit bookD5 Package of cheques2010 NSSC 252 (CanLII)D6D7D8D9DIDDllDI2DBDI4DI5StaffPolicy handbookNotice "To All Staff"Performance Appraisal formsJennifer Allan's DiagramTV shop DiagramFindlay Notes re deficienciesCheques & cash chequesCheque StubsFolder foreign worker programDaytimer notes

., ....3OVERVIEWTheClaimant, Ms. Cormierwas a shareholder and an employeeoftheRespondent, SharecareHomesIncorporated (the "Company"). The other shareholders ofthe company were Sharon Nordqvist andKurt Nordqvist.Ms. Cormier was employed by the Company pursuant to the terms of a Manager EmploymentAgreement (the "Employment Agreement" (exhibit PI tab 3). Clause 8 ofthat agreement gave the2010 NSSC 252 (CanLII)Company the right to terminate Ms. Cormier for cause, which was defined as, inter alia, "anymaterial breach ofthe provisions ofthis agreement".There was a Buy Sell Agreement between Ms. Cormier and the Nordqvists dated March 29, 1999(exhibit PI tab 2) to which the Companywas a party. The Buy Sell Agreement provided that on thetermination ofMs. Cormier's employment with the Company, she was to sell her shares to the othershareholders (Clause 9.01). The Agreement provided a mechanism for establishing thevalue oftheshares to be sold (Clause 9.02).Clause 7.03(b)(ii) ofthe Buy Sell Agreement provided that ifMs. Cormier should commit an act of"default" then the price to be paid for her shares would be reduced by 20%. An event ofdefault isdefined in the agreement as a failure to observe, perform or carry out any ofher obligations underthe Employment Agreement.On October 31, 2005, the Company purported to terminate Ms. Cormier for cause (exhibit PI tab39). Ms. Cormier has disputed the Company had cause to terminate her employment and hasclaimed damages for wrongful dismissal. The parties have submitted to me as a sole arbitrator theissue whether the Company had cause to terminate Ms. Cormier's employment and, if not, whatremedy should be provided. In the hea.n..ng and in the subsequent sllbmissions of counsel, bothparties proceeded on the premise that the degree ofdefault that would justify a dismissal for causewould also be the degree ofdefault that would trigger the 20% reduction ofthe purchase price. The

. ...4premise on which the parties proceeded, and that I have accepted, is that ifI find the company hadcause to terminate then that same cause also triggers the 20% reduction in clause 7.03(b)(ii) oftheBuy Sell Agreement.It is my decision and award that the Company has not established cause to justify the termination ofemployment ofMs. Cormier and that the termination was wrongful. The facts and reasoning thatlead me to that conclusion are set out below.2010 NSSC 252 (CanLII)1. FACTUAL BACKGROUNDMs. Cormier and Mrs. Nordqvist have known each other for a number of years. At one point Ms.Cormier dated the brother of Mrs. Nordqvist. Ms. Cormier lived with the Nordqvists for severalmonths. They would share family occasions. Ms. Cormier testified that they were very comfortablewith each other and had no difficulty discussing things. They both spoke their minds.They had previously worked together providing education programs for the Province. Mrs.Nordqvist would organize and obtain funding for the programs and Ms. Cormier would teach them.That initiative came to an end in approximately 1993. Shortly afterwards Mrs. Nordqvist proposedto Ms. Cormier that they go into business together running small options homes. Small optionshomes are a residential alternative to a nursinghome. The Nordqvists hadpriorexperience operatingsuch units.The initial proposal made byMrs. Nordqvist was that Ms. Cormier would be a live-in worker in thesmall options home. Ms. Cormier testified that she wanted greater involvement in any suchundertaking. She did not want to repeat their earlier arrangement were she felt she did not getsufficient recognition. Mrs. Nordqvist agreed that she would have the responsibility for theday~to-daymanagementofthe homes and :Ms. Cormier and :Mrs. Nordqvist would be 50/50 partners.There was no evidence lead as to any investment that was required by any ofthe three shareholders.

....5The Companybegan business. Included in Ms. Cormier's management duties was responsibility forthe placing ofresidents and meetings with funding officials. At the beginning, she did all the buyingoffood, etc., and scheduled the work ofthe various employees.Because the units were scattered geographically with four of them being in Halifax and three inDartmouth, Ms. Cormier was required to travel between the units.Mr. Nordqvist was responsible for keeping the financial records of the company and did thebookkeeping. He dealt with the company's auditors and it was his responsibility to ensure thenecessaryinformation was given to the Province to receive the full amount ofthe funding available.:Mr. Nordqvist testified that he had evening courses in accounting and had done some propertyinvestment work and then in 1993, he helped start Sharecare Homes.2010 NSSC 252 (CanLII)At some point in 1999, Mrs. Nordqvist told Ms. Cormier each ofthem was to get only a 45% sharein the company as :Mr. Nordqvist would get 10% for his involvement. Ms. Cormier made noobjection and it was following these discussions that the various agreements dated March 29, 1999were prepared, including the Buy Sell Agreement and the Employment Agreement. The Buy SellAgreement recites that the authorized capital ofthe Companywas 100,000 common shares ofno parvalue ofwhich 450 were issued to Ms. Cormier, 450 to Mrs. Nordqvist and 100 to Mr. Nordqvist.By the time the agreements were prepared there were four properties owned by the companycontaining seven units. Each ofthe seven units had three residents for a total of21 residents. Therewas one live-in staffperson for each unit, as well as one part-time person. In total the business had14 employees.The company received per diem funding for each resident placed by the Province. The amount off l1nd 1n g 'was based on the level ofcare needed. The funding was provided by either the Departmentof Health or the Department of Community Services, depending on which Department wasresponsible for placing the resident. Residents younger than 65 were placed by the Department of

..6Community Services and residents over 65 were placed by the Department ofHealth. There was atleast one private pay.Each staff member looked after all the residents in their unit regardless of which Departmentprovided the funding. Unti12004, there was no difference in what the Department ofHealth and theDepartment of Community Services would pay. In January of 2005, the Department of Healthincreased the amount of funding for the purpose of increasing the wages of staff looking afterresidents placed by that Department. The Department ofCommunity Services did not at that timegive an equivalent increase. Ms. Cormier testified that there were only two units that had bothCommunity Services staffand Department ofHealth staffand it did not cause any problems.2010 NSSC 252 (CanLII)Ms. Cormier testified she ran the day-to-day operation ofall four properties. She had been payingthe day-to-day bills but after Mr. Nordqvist became involved she had no role in the financialmanagement other than submitting time and arranging for the payroll to be done. Ms. Cormiercontinued to write cheques for things that the residents needed.At the beginning, Ms. Cormier said that she had a company credit card and a cheque book. Shewould often write cheques for cash which was used to buy comfort needs for the residence. Shewould provide all cheque stubs to Mr. Nordqvist. At one point, this practice was changed and thecheque books were then kept in the possession ofMr. Nordqvist.One of the biggest challenges that Ms. Cormier had was finding live-in staff. There was a bigturnover. Staffing took over half of her time. She often talked to the Nordqvists about staffingmatters.Initially Ms. Cormier used space at the Company's property on Pepperell Street for her office. Shesubsequently recoIIL.'Ilended to the Nordqvists that the Company rent space in pari of premises inDartmouth known as Unit2 at that was occupied byJennifer Allan Interiors. TheNordqvists agreed.

7Subsequently the Jennifer Allan business closed its doors and Ms. Cormier moved to a space in Unit3 that was occupied by her husband's TV repair business.The Nordqvists also ran a number ofunits under the name "Share Care 2000." They had a total of13 additional units. Mr. Nordqvist descnbed Share Care 2000 as a separate business entity for hisson, Colin Nordqvist and Mrs. Nordqvist. Colin Nordqvist had no interest in the Company.Ms. Cormier testified that there had always been an assumption that at some point she would havethe opportunity to buyout the Nordqvist's shares in the Company. Consistent with that, in the fallof2004, she and the Nordqvists began discussions about Ms. Cormier and her husband, Mr. Martell,buying the shares.2010 NSSC 252 (CanLII)The Nordqvists advised that they would be prepared to sell their interest in the Company for$600,000.00. Ms. Cormier testified she did not want to agree to that amount without first lookingat the books ofthe company.Ms. Cormier testified that up to the time when the parties began to discuss a transfer ofthe businessshe had seen no financial records other than the annual financial records. There were then a seriesof attempts by Ms. Cormier to get access to the financial statements of the company which,according to her evidence, were met with limited success. Both sides engaged lawyers to assistthem.At a meeting in October, 2005 at the "Steak and Stein" restaurant the Nordqvists advised that theyhad decided not to sell the Companybut did suggest that both Ms. Cormier and Mr. Martell considerbuying the two Dartmouth properties.Ms. Cormier testified she and Mr. :M:w."tel1 gave consideration to acquiring the two properties.Because of that she continued to press for additional financial information. A meeting of Ms.Cormier, Mr. Martell and Mr. and Mrs. Nordqvist, purportedly to discuss the company's financial

..~.,8information in relation to the possible sale of the Dartmouth properties, was held on October 12that the TV shop.When the Nordqvists arrived there was small talk until Ms. Cormier asked ifthey had brought thebooks, at which point, according to Ms. Cormier and Mr. Martell, Mrs. Nordqvist became angry anda confrontationoccurredbetween Mrs. Nordqvist and Ms. Cormier. Mr. Nordqvisttold his wifetheyshould leave and they did. Mrs. Nordqvist denied the confrontation was initiated by the request forthe financial books. She testified that she became upset when she walked in and saw Companydocuments and cheques spread out on the desk in an open part ofthe shop.2010 NSSC 252 (CanLII)Shortly afterwards, the Nordqvists advised Ms. Cormier that they wanted all of the Companydocuments and books returned to the Pepperell Street location. Ms. Cormier gathered together allofthe company documents and Mr. Nordqvist picked them up.A further meeting was arranged for October 28th at the Pepperell Street location, to review theCompany's financial records in furtherance ofthe proposal to buy the two Dartmouth properties.Mr. Nordqvist was in attendance and Ms. Cormier described the atmosphere as being stiff butfriendly. She spent some time that day in the office going through the information including copiesofcheques. At some point Mr. Nordqvist received a phone call from Mrs. Nordqvist and followingthat he terminated the meeting.Shortly after that, Ms. Cormier received a notice ofmeeting ofdirectors dated October 28, 2005,calling a meeting for October 31, 2005 for the purpose ofdiscussing the performance ofCatherineCormier as an employee of the Company and to determine whether her employment should beterminated (exhibit PI tab 36).Ms. Connier attended the meeting and '.vas told by the Nordqvists that they could not work with herany longer and that her employment was terminated for cause.

9She was then given a letter dated November I, 2005 terminating her employment for cause effectiveOctober 31, 2005 (exhibit PI tab 39).2. THE DECISION TO TERMINATEMrs. Nordqvist testified that going into the October 12th meeting at the TV shop, there was nointention to terminate Ms. Cormier, but that she and herhusband had come to a decisionthat changeshad to be made.2010 NSSC 252 (CanLII)Both the Nordqvists testified that following the confrontation in the TV shop, they were concernedas to how they would be able to continue to work with Ms. Cormier. As ofthat point oftime theydid not identify any specific shortcomings in the way Ms. Cormier had been performing her duties.Even though they had made no complaints, Mr. Nordqvist testified that they were concerned abouttheir clients and they decided that it had to end.Mr. Nordqvist testified that he went to the meeting on October 28 when Ms. Cormier was to bringthe payroll records and he came with financial records ofthe company. She spentthe morning goingthrough the books and they then broke for lunch. After lunch, he came back and delivered the lettercalling for the Board meeting. Ms. Cormier asked him what that was about and he told her that shewould find out when she got there.Bythe time ofthe October 31 st Board meeting, Mrs. Nordqvist testified that she could not trust Ms.Cormier to properly perform her responsibilities in a safe manner for their residents. She said thetrust and confidentiality was broken. She referred to the ongoing communications through lawyersin the attempts made to get access to the financial statements and there was an ongoing problem withcheques being written for cash.Mr. Nordqvist testified that at the Board meeting, Ms. Cormier was told that she was fired becausethey could not work with her. They were concerned about their clients and staff.

."10Mr. Nordqvist testified that prior to Ms. Cormier's termination, there had been no discussions withher about her performance and they thought that she was a good worker.It was Mr. Nordqvist's evidence that the failure ofthe negotiations for the sale ofthe business hadnothing whatsoever to do with the decision to terminate Ms. Cormier.Ms. Cormiertestified shereceived no notice ofanydissatisfactionwith herperformance andno priorcomplaints that she was brusque or difficult to get along with. It was her evidence that there wereno other complaints as to her conduct other than the Nordqvists were concerned about her workingout ofthe TV location. Nor was she made aware of any deficiencies in her record-keeping.2010 NSSC 252 (CanLII)Ms. Cormier testified that her dismissal was devastating and humiliating.Mr. Cormier testified that she was paid $3,000.00 a month gross as ofthe date ofher termination.She was also provided with a company car and had a credit card for gas and business-relatedexpenses. No value was given for these additional employment benefits. She also testified shereceived dividends about once a year. It is my assumption her entitlement to dividends is in hercapacity as a shareholder and they do not factor into her claim for compensation for wrongfuldismissal.3. ISSUES AND SUBMISSIONSItis the position ofMs. Cormier that the Companyhad no justificationto terminate her employmentand thus there is no basis to reduce the monies due to her for the sale ofher shares.It is the position ofthe Company that Ms. Cormier breached her employment obligations in seven\vays as set out hTI its pcst=hea..."";J.llg submission.

· ,111. Ms. Cormier knowingly continued the employment ofa Simeon Fagbile who was ineligibleto work for Sharecare Homes Inc., from the time the worker informed Ms. Cormier of hisineligibility up until receipt of a work permit obtained through the instrumentality of Ms. Cormierby means ofmisrepresentation, thus exposing Sharecare Homes Inc. and its Directors to possibleprosecution and penalty;2. Ms. Cormier, having misrepresented to the authorities the nature of Mr. Fagbile'semployment continued his employment until Ms. Cormier's termination exposing Sharecare HomesInc. and its Directors to possible prosecution and penalties;2010 NSSC 252 (CanLII)3. Ms. Cormier failed to "...devote the whole ofher working time and attention to the businessofthe corporation";4. Ms. Cormier engaged in carrying on another business without prior written approval oftheCompany;5. Ms. Cormier failed to keep accurate reports and records and observe directions from theBoard ofDirectors;6. Ms. Cormier failed to satisfy confidential obligations;7. Ms. Cormier was grossly insubordinate.As a result the Company asserts that it, or the Nordqvists, are entitled to the price reduction set outin article 7.03(b)(ii) ofthe Buy Sell Agreement.I will deal with each ofthe allegations made bythe Company. For conven;ence Ihave cOtTIbined thefirst two as they are closely related.

". '. '.12The Company has acknowledged that the facts giving rise to some ofthe justifications to terminatewere not known to the Company at the time oftermination but submits that there is authority thatafter acquired knowledge can be used to justifytermination. For the purposes ofthis decision I amprepared to accept that contention.First, however, in order to assess the context and thus the significance ofher impugned conduct itis necessary to understand the nature of the relationship Ms. Cormier had with the Nordqvists andhow she carried out, and was pennitted to carry out, her employment responsibilities.2010 NSSC 252 (CanLII)4. THE NATURE OF THE RELATIONSHIPAs noted at the beginning ofthis decision, the relationship between Ms. Connier and theNordqvistspredated the undertaking ofthe Company business. Itwas more than a business relationship, it wasalso a friendship.The parties divided the responsibilities ofrunning the business and they left each other alone in thoseareas. This may have been partially due to the fact they were familiar with each other and hadexperience working together.It was Ms. Cormier's evidence that typically she would discuss business matters with one or both ofthe Nordqvists about once a week. They often talked byphone, but also mixed business discussionswith social occasions. The evidence was that while there were discussions and to some extent a flowofinfonnation, the Nordqvists did not give direction or instructions.It was Mrs. Nordqvist's testimonythat they wouldjustget together informallyto talk about whatwashappening in the business. Mrs. Nordqvist agreed that on a day-to-day basis, she never checked on~1s. Cormier. She trusted her to CWT.i out her responsibilities~

13Mr. Nordqvist testified that Ms. Connier's primary responsibility was to manage the employees.Generally, it was his evidence that the only time he met with Ms. Cormier was when he had to getsome information into the government. His evidence was that basically he left Ms. Cormier aloneto do her thing. It was his evidence that had he known details at the time, it would have been adifferent story, but at the time, he was not that interested.In summary the evidence is that Ms. Cormier was given considerable latitude in how she handledthe day-to-day affairs ofthe Company that were within her responsibilities and that both Mr. andMrs. Nordqvist were content to give her that latitude.2010 NSSC 252 (CanLII)With that context each ofthe allegations by the Company can be more accurately assessed.5. THE EMPLOYMENT OFMIl. FAGBILEIn my view, the circumstance involved with the continued employment ofMr. Fagbile is the mostserious ofthe allegations. As stated in the Company's post hearing submission, it involved arguablyillegal actions and could have exposed the Company, and its directors, to significant sanctions.It is for the respondent to prove a material breach ofMs. Cormier's employment responsibilities. Akey question is whether Ms. Connier knew that the arrangements that she had structured were illegalor did she believe them to be a permitted, or at least tolerated, arrangement to comply with theimmigration requirements. How aware Ms. Cormier was of the wrongful significance of thearrangements she put in place is a key component in assessing the nature and seriousness of heractions.In May of2005 Ms. Cormier hired Mr. Fagbile to be a live-in caregiver in one of the units in thePepperell Street property. lvlr. Fagbile was from Nigeria. At the time ofinterviewing and hiringhim, Ms. Cormier was provided with his resume and information as to his qualifications (exhibit PItabs 49 through 52). She was unaware ofany restrictions as to his ability to work for the Company

14but did acknowledge that at the time ofbiTing she would have seen the restrictions that were printedon Mr. Fagbile's Work Permit, similar to the comments shown on exhibit D4 tab 4 four pages in.She testified that she did not realize the restrictions prevented Mr. Fagbile from working for theCompany. I am satisfied that at the time ofbiTing Ms. Cormier was unaware of any problem.Mr. Fagbile was put on the Companypayroll and paid by the payroll companyused bythe Company.The unit at Pepperell Street where Mr. Fagbile worked was unusual in that two ofthe three residentswere basicallyindependent and able to look after themselves, including doing their own laundry andpreparing most oftheir own meals. The live-in caregiver only had to assist with the preparation ofsomeoftheirmeals, ensure theyhadtheirmedication, maintaintheir charts and basically ensure theywere looking after themselves. The third resident was a Mr. Dorey who, at the time, was 90 yearsold, was demanding and verbally complaining and required a lot ofcare. Most ofMr. Fagbile's timewas spent attending to Mr. Dorey.2010 NSSC 252 (CanLII)Mr. Dorey liked Mr. Fagbile and they got along well. Mr. Dorey's family met Mr. Fagbile and alsoliked him.Shortly after commencing his employment Mr. Fagbi1e went to his lawyer, a Mr. Gilpin, to obtaina Work Permit. At that point Mr. Gilpin told Mr. Fagbile that he wasn't permitted to work for a forprofit company and his employment with the Company was a violation ofthe terms under which hewas in CanadaMr. Fagbile reported this to Ms. Cormier. Mr. Fagbile wanted to keep his job and Ms. Connierwanted to keep Mr. Fagbile because ofthe good relationship he had with Mr. Dorey and his family.They both went back to Mr. Gilpin to see if there was any solution to the problem. It was Ms.Cormier's evidence that she had at least 1',:vo conversations with M..r. Gilpin. He told her about alive-in care worker program that permitted caregivers to work in Canada provided they wereemployed by someone other than a for profit business.

15Ms. Cormier decided to set up such a care worker program. She learned from Mr. Gilpin that shewould have to arrange for a contract of employment and deal with Human Resources Canada.Apparentlywithout further assistance from Mr. Gilpin, she began to deal with Human Resources (seeexhibit PI tab 54). She learned that a third party could be designated to set up the arrangements.Once a contract was signed the third party would drop out ofthe picture.She designated herself as the third party and drafted some ofthe documents to set up the program(e.g. exhibit PI tab 55).2010 NSSC 252 (CanLII)I am satisfied that it was clear to Ms. Cormier that to qualify for the program the caregiver could notbe employed or paid by the Company. She realized that it would be necessary to have Mr. Fagbilepaid through a separate payroll arrangement. In order to do that, a new business number had to begenerated for the purposes of Human Resources and Skills Development Canada. Ms. Cormierapplied for and got a new business number in her own name.Ms. Cormier also understood., apparently from either the conversations with Mr. Gilpin or with hercontacts with Human Resources, that the employer could be a member ofthe family ofthe personreceiving the care. Ms. Cormier contacted Mr. Dorey's daughter, a Mrs. Carter, to see ifshe wouldagree to be identified as the employer ofMr. Fagbile.Mrs. Carter wanted to continue to have Mr. Fagbile look after her father and agreed. Mrs. Carterrealized that while she was designated as the employer in reality that was just a designation and Mr.Fagbile would continue to be employed by the Company as he had in the past.Ms. Cormier then arranged to have Mr. Fagbile taken off the Company payroll. He was still paidbya cheque from the Companybut all remittances and deductions resulting from thepayments wereremitted using the new business number.

16The new arrangements for Mr. Fagbile were not in place until at least June and perhaps later thanthat. The permit authorizing the care worker program was not obtained until October 18, 2005. Inthe meantime, Mr. Fagbile continued to be employed. Ms. Cormier acknowledged that she knewthat it was not legal for the Company to employ Mr. Fagbile in the interim.Ms. Cormier testified that she never received any benefit from this arrangement and was doing whatshe understood was legally required to have Mr. Fagbile continued to be employed in this position.It was her evidence that she believed the arrangement was totally legal. She testified that sheunderstood from Mr. Gilpin that this arrangement was the way to get around the problem.2010 NSSC 252 (CanLII)Ms. Cormier did testify that she knew the arrangeInent only allowed Mr. Fagbile to work for Mr.Dorey. On cross examination, she had difficulty as to whether she knew that it was illegal for Mr.Fagbile to carry out other duties for the company. It was her evidence that he was doing very littlefor the other two residents.Ms. Cormier explained that there was no reference in the documents to the other two residentsbecause this was a contract solely for Mr. Dorey. While it was for his benefit as well, it was for thebenefit ofthe Company.She agreed on cross examination that Ms. Carter was not paying Mr. Fagbile's salary, and knew thatMr. Fagbile continued to work for the company. She continued to make the comments, however,that Ms. Carter was the employer.Ms. Cormier confirmed that on discovery, she had testified that there are ways to work around thesystem, but legally.Ms. Cou11.ier testified that she discussed with Mr. Gilpin the possibility of other immigrant clientsofms coming to Nova Scotia to be employed under the same type of arrangement. Nothing came

"17ofthat because of difficulties Mr. Gilpin encountered with his law finn that were unrelated to thismatter.Mr. Fagbile testified that basically his work was dealing with Mr. Dorey and providing medicationsfor the other two. He agreed that he was responsible for all three and that occasionally he preparedmeals for the other two and would ensure they were looking after themselves appropriately. Hewould also be familiar with and update their files.Prior to receiving evidence as to conversations that took place between Mr. Fagbile and Mr. Gilpin,Mr. Fagbile was given a full explanation as to the nature of privilege that might attach to thoseconversations and his ability to waive any claim for privilege or confidentiality. I was satisfied thatMr. Fagbile understood the instructions that were given to him and he testified that he was preparedto waive the privilege.2010 NSSC 252 (CanLII)Mr. Fagbile testified that a couple ofmonths after he started work for the company, Mr. Gilpin toldhim that his permit did not allow him to work for a for-profit organization. Mr. Fagbile reported thatto Ms. Cormier.' At that point, he asked Ms. Cormier to meet with Mr. Gilpin. Mr. Fagbile recalledhaving a couple ofmeetings with Mr. Gilpin and Ms. Cormier in attendance. It was his recollectionthat Mr. Gilpin raised the option of the caregiver program ifthe recipient ofthe care or their familywas the employer.Itwas Mr. Fagbile's testimony that it would have been obvious to Mr. Gilpin that Ms. Carter wouldbe shown as the employer, but the company would be paying.Mr. Fagbile did testify on cross that he understood that continuing to work for the company prior tothe new arrangement being established, was not permitted and that both he and the Company wereat risk during the summer of2005.

· .18On redirect, Mr. Fagbile testified that he understood that it was not allowed for him to work for theCompany but that his lawyer said that the new arrangement would be permitted.Mr. Fagbile testified that he understood Ms. Carter was to be his employer for the purposes ofhispaperwork but he did not think the arrangement was illegal. He was emphatic in his evidence thathe would not knowingly engage in a arrangement that might jeopardize his ability to remain inCanada and at some point bring his family to this country.2010 NSSC 252 (CanLII)Mr. Fagbile testified that after Ms. Cormier left the Company nothing changed and he continued todeal With Colin Nordqvist and no one asked him any questions.Mr. Fagbile testified that in or about October of 2005 he had a phone conversation with ColinNordqvist He had called Mr. Nordqvist to discuss the situation and at that time, he told Mr.Nordqvist that he worked for Ms. Carter. After talking to Colin Nordqvist, it was Mr. Fagbile'sevidence that he then got different cheques.Mr. Fagbile was shown exhibit PI tab 64, which was a letter written by Colin Nordqvist advisingto whom it may concern that Mr. Fagbile was employed as a full-time caregiver for a private clientin one oftheir homes. Mr. Fagbile testified that he had asked Colin Nordqvist for the letter in orderto bring his family over to Canada. Mr. Fagbile testified that Colin Nordqvist did not ask anyquestions and that the wording ofthe letter was that ofColin Nordqvist.Mr. Fagbile testified in October of 2007, he stopped working for the company because two yearswere over and he wanted to go back to school.Ms. Carteracknowledged that she was being asked to bethe employerofMr. Fagbile and understoodthat and was prepared to go along ifthat was the way to retain Mr. Fagbile to care for her father. Sherecalled no discussion about who would be paying Mr. Fagbile otherthan it was not going to be her.

,.19Ms. Carter was invited to a meeting with Mr. Gilpin, Ms. Cormier and Mr. Fagbile but did notattend.Ms. Carter was referred to exhibit D4 at tab 2 which was a July 28, 2005 communication fromHuman Resources and Skills Development Canada. It set out an explanation and requirements fora live-in caregiver. Ms. Carter testified she did not prepare the document and probably had itexplained to her at the time. She had no knowledge ofMs. Cormier setting up a separate businessnumber. At page 4 oftab 2, she identified a letter confirming that she (Ms. Carter) had appointedCatherine Cormier has her third party representative to oversee all aspects of administering the2010 NSSC 252 (CanLII)payroll on her behalf She agreed that she knew she had not hired Ms. Cormier or the Company andsigned the letter knowing that it was not factually correct but did it as this was what was required.Mr. Gilpin testified that Mr. Fagbile had come to his office to get a work permit. Itwas Mr. Fagbilethat had retained him and he was not retained by either Ms. Cormier or the Company. Mr. Gilpinadvised Mr. Fagbile thatbecause he was working for the Company, it was illegalbecause he was notallowed to work for an agency.Mr. Gilpin testified that Mr. Fagbile and Ms. Cormier came to his office and he told them that theCompanycould not be the employer, but there was discussion that Mr. Dorey could be the employer,or whether it should be Mr. Dorey's daughter.Mr. Gilpin denied any involvement in creating an artificial arrangement. It was his evidence that tothe extent he was aware of what was being set up, he understood that Mr. Fagbile was to beemployed by Mr. Dorey's family.Itwas Mr. Gilpin's understanding from the discussions that the Company was out ofthe picture. Herecalled no discussions as to who was going to pay Mr. Fagbile, just that Mr. Dorey or his daughterwas going to be the employer.

'.Mr. Gilpin never met Ms. Carter and never saw any ofthe forms.20Mr. Gilpin was referred to exhibit PI tab 55, 4th page in which was the employment letter signedby Ms. Carter. He testified he had never seen the letter.Mr. Gilpin testified that he had discussions with Ms. Cormier about possibly placing more ofhisclients under a similar kind of arrangement. Those plans never progressed because he was havingdifficulty in his own practice with his partnership.2010 NSSC 252 (CanLII)He testified that he had heard that Ms. Cormier had said that he had advised her to hire Mr. Fagbileillegally. As a result he advised both counsel that he was prepared to come to testifY at the hearing.Mr. Gilpin testified he was not aware that Mr. Fagbile was still working after his initial meeting withhim and thought that he was offwork waiting for a properpermit. He agreed that Mr. Fagbile couldnot legally work until the permit was completed.Mr. Gilpin testified that he had told Ms. Cormier that whoever was going to be the employer wouldneed a business number.On cross examination, Mr. Gilpin testified that he was never told that the Company was paying Mr.Fagbile. He never told Ms. Cormier or Mr. Fagbile that the Company could not be the employerbecause he did not know that the Company was paying. Mr. Gilpin did come to the home and sawMr. Dorey in the home.I am satisfied Mr. Gilpin did advise Ms. Connier as to the existence ofa care worker program andhow to go about setting it up. He also knew that Ms. Cormier was pursuing that option. It does notappear that he realized nothing had changed as to the employment circumstances ofMr. Fagbile orany ofthe specifics ofwhat Ms. Cormier was doing.

. .,'21I am also satisfied that there is no evidence that Ms. Cormier intentionally held back or mislead Mr.Gilpin as to how she had structured the arrangements. Mr. Gilpin never told her that what she wasdoing was not permitted because he was not aware ofwhat she was doing.Ms. Cormier testified that she discussed the arrangements she had made with Mr. Nordqvist and hehad no problems. She told him about her separate business number and that Mr. Fagbile was aforeign worker and that she had discussed the way to proceed with Mr. Fagbile's lawyer.On cross examination, Ms. Cormier acknowledged that on discovery she had testified she had notdiscussed the method ofhow to deal with Mr. Fagbile, buther testimony at the hearing was that waswrong.2010 NSSC 252 (CanLII)Ms. Cormier agreed that she never told the Nordqvists that he was illegally employed, but shetestified she was not trying to hide anything. It was her evidence that the Nordqvists knew thesituation.Ms. Cormier testified that the first remittance to Revenue Canada under the new arrangement wasby a cheque found at exhibit PI tab 59. Noted on the cheque is the notation "Business Number828927475 RPOOOI S. Fagbile:P.C.W. Pepp. St. Foreign Worker Program." Itwas herevidence thatwas written on the cheque to remind Mr. Nord.qvist about the arrangement when he received thecheque back from the bank,. It was her evidence that subsequent cheques had the same notation.Ms. Cormier testified that when she was terminated, she called Colin Nordqvist to explain Mr.Fagbile's situation. She attended a meeting with Colin at the Steak and Stein Restaurant where sheexplained to him the arrangements.In 2006 aproblem arose ~rith Revenue Canada because oft.."'Ie use of!\1s. COffi1ier t s business DlLTTIber.Ms. Cormier had to deal with Colin Nordqvist to have him get a new number, which he did. TheCompany then continued with the payment arrangements using the new number.

· ..22Mr. Nordqvist testified that each month he would see the cheques paying Mr. Fagbile. He phonedMs. Cormier to ask about the matter at the beginning of October. He had no further discussionsabout the arrangements for Mr. Fagbile.Mr. Nordqvist testified that he saw the cheque (exhibit PI tab 59, 3rd page) payable to RevenueCanada relating to Mr. Fagbile. He acknowledged he asked no questions as to what the cheque wasabout.2010 NSSC 252 (CanLII)The cheques for Mr. Fagbile remittances referenced a Tacoma Drive location.When Ms. Cormier left, Mr. Nordqvist testified that he kept writing the cheques relating to Mr.Fagbile. He made no further inquiries as to what the arrangement was all about and kept the systemin place until Mr. Fagbile left.The first awareness that Mr. Nordqvist had that there might be a problem about the employmentarrangements with Mr. Fagbile was when they were getting ready for the first arbitration in thismatter. He had brought all ofhis documents to counsel who questioned the existence ofthe separatebusiness number that had been obtained by Ms. Cormier. At that point Mr. Nordqvist thought Ms.Cormier had started a new company and that was his first concern.Mrs. Nordqvist testified that Ms. Cormier had never advised her anything about Mr. Fagbile'semployment.ColinNordqvist testified that inDecember2005, Ms. Cormiercalled himto explainthe arrangementinvolving Mr. Fagbile. They arranged to meet and, at that time, she explained how she had set upthe separate business account and how the system worked. Colin Nordqvist thought it was strangeand he asked herifit was legal and she said it had gone through Mr. Fagbile's lawyer and it was. Hedid not report back to Mr. and Mrs. Nordqvist and simply kept everything going the way it had beenestablished. He continued to put deductions in the saine account at Revenue Canada until he got a

23call from Ms. Cormier that Revenue Canada had advised that was the wrong account and that hewould have to get his own. That was ultimately straightened out and the money being held byRevenue Canada was taken out ofMs. Cormier's account and put into the Company account.Mr. Nordqvistwas directed to exhibit 1 tab 64, whichwas his letter ofFebruary 15, 2006, identifyingMr. Fagbile as being employed as a full-time caregiver for a private client. It was his evidence thatMr. Fagbile had requested the letter because he was looking for a place to live and needed incomeconfirmation. Colin Nordqvist testified he used the word "private client" as all ofthe clients oftheCompany are private clients, or he speculated that Mr. Fagbile may have asked him to use the words"private client."2010 NSSC 252 (CanLII)The arrangement put in place by Ms. Cormier apparently lasted for approximately two years. Mr.Fagbile testified that during that time, Immigration officials came to the house to see him and hisclient and it would have been obvious to them that they were in a company-owned property.I am satisfied on the evidence that Ms. Cormier knew the original arrangements between theCompany and Mr. Fagbile were not permitted. In order to "legally" have Mr. Fagbile continue toprovide his services he would have to be employed and paid by a not for profit entity. He could notcontinue to be employed and paid by the Company. Further, he would have to be employed solelyas a care giver to Mr. Dorey.I am also satisfied that Ms. Cormier knew that the arrangements she put inplace did not change thesubstance ofhis employment circumstances. While Mrs. Carter was designated as the employer shewas not the one paying for Mr. Fagbile. The Company was still the entitypaying. lam also satisfiedshe understood it was not correct to represent that Mr. Fagbile was only to look after Mr. Dorey.While his responsibilities to the other two residents were unusually light for that kind offacility, hisresponsibilities to them continued unch~nged.

• "V." . '.24The Company says that Ms. Cormier must have realized that what she was doing was illegal andexposed both she and the Company to prosecution. Further that she either intentionally did not tellthe Nordqvists it was illegal or ifshe tried to suggest that she had told them that is not credible andshe is lying.However the point that has given me the most difficulty is whether Ms. Cormier believed thearrangements were illegal or whether she believed the arrangements were acceptable to overcomea bureaucraticproblem and that such arrangements, while window dressing, were sufficientto satisfythe authorities. In her own words "Certainly, you know, there are ways of working around thesystem." In other words, did she understand that she, and the Company, were doing somethingwrong and thus subject to sanctions or was it an acceptable way ofworkL.""lg around the system.2010 NSSC 252 (CanLII)I am satisfied from observing Ms. Cormier that she had no sophisticated or informed appreciationofwhat might or might not be legally sufficient to satisfy the immigration requirements. At no timedid Mr. Gilpin, or anyone, tell her that the care worker program she was setting up did was notacceptable. Mr. Gilpin was not aware that in substance the Company was going to continue as theemployer. At the same time the fact that he did provide the option ofsuch a program may have leadMs. Cormierto an assumption that this was a matter ofmaking the arrangements look on the surfacethe way they should and as long as the paperwork showed a separate employer and a separatepaymaster that would satisfy the requirements.The fact that Ms. Cormier and Mr. Gilpindiscussed having other clients ofhis cometo Canadaunderthe same arrangements would suggest they each believed the arrangements to be acceptable,recognizing that Mr. Gilpin had a wrong understanding ofthe substance ofthe arrangements. Thefact Mr. Gilpin was prepared to have other clients do the same as Mr. Fagbile, would indicate to Ms.Cormier that Mr. Gilpin was comfortable with her arrangements, without directing her mind to

,. ."25There is also evidence that is inconsistent with Ms. Cormier knowing that the arrangements wereillegal.She reported the arrangements to Mr. Nordqvist in order that he would understand how Mr. Fagbilewas to be paid. There was no attempt by Ms. Cormier to hide or distort anything that she had done.After she was terminated she called Colin Nordqvist to explain the situation to him, again with noS'Jggestion that this was an arrangement that she should not had set up or that could be trouble ifanyone investigated.2010 NSSC 252 (CanLII)In 2006 whenRevenue Canadaraised the problem ofmonies being remitted on an incorrectbusinessnumber Ms. Cormier dealt with both Revenue Canada and Colin Nordqvist in a manner that was notevasive or misleading and consistent with her state of mind being that the arrangements wereacceptable.Ifthe arrangements were not acceptable Mr. Fagbile would be subject to having his entitlement toremain in Canadaterminated, perhaps permanently. Having observed his evidence I am satisfied hisability to remain in Canada and the opportunity to bring his family over was a very important matterfor him that he would not easily jeopardize. When he was first told that his employment with theCompanywas illegal he did not hesitate to report that to his employer, even ifit meant he might losehis employment. The fact that Mr. Fagbile did not believe there was anything wrong with thearrangements is corroborative that Ms. Cormier, who had participated in the same discussions withMr. Gilpin, had the same beliefOn the other hand both Ms. Cormier and Mr. Fagbile acknowledged they knew continuing to havehim work pending the approval ofthe program was not permitted and they were both prepared to

, ,. '.26After giving the evidence careful consideration I am not satisfied that Ms. Cormier understood shewas doing something illegal. Rather the arrangements were an artificial employment structure butin her beliefwere sufficient to satisfy the immigration requirements.Further I am satisfied she did not understand that she was doing something that her employer wouldnot want her to do. As noted below the evidence establishes that Mr. and Mrs. Nordqvist werecontent to allow Ms. Cormier considerable discretion in carrying out her employmentresponsibilities.2010 NSSC 252 (CanLII)As a result I find that Ms. Cormier's actions in employing Mr. Fagbile, setting up the employmentprogram and continuing to employhim in the interim did not constitute a breach ofher employmentresponsibilities that would entitle the Company to terminate her employment nor does it give a basisto reduce the price to be paid for her shares pursuant to clause 7.03(b)(ii).6. THE FAILURE TO DEVOTE TIME TO THE COMPANYThis allegation arises from the fact that Ms. Cormierbegan to delegate some ofher responsibilitiesand tasks to one ofthe other workers, a Ms. Bonnie Gallant.Ms. Cormiertestified that over time, her role was becoming busier. Staffing matters took more thanhalfofher time and she would often talk to Mr. Nordqvist about staffing.Ms. Gallant was originally hired to be a companion for one ofthe residents and to do on-call work.Ms. Cormier began to have Ms. Gallant to do grocery shopping. At some point she was given acredit card by the Nordqvists in her own name to buy whatever was needed. Over time herresponsibilities were increased and she gave greater assistance to Ms. Cormier.Ms. Gallant was paid as a live-in employee and for on-call work. She was never paid extra for theassistance she was rendering to Ms. Connier.

· . ,27Ms. Gallant did no scheduling or payroll and only did the designated functions she was given. Shedid pass on to the other employees the scheduling that Ms. Connier determined.It was Ms. Cormier's evidence that the Nordqvists were aware ofMs. Gallant, particularly aroundthe Pepperell Street properties, and that they would be aware ofsome ofthe things she was doing.Ms. Cormier noted that the Nordqvists had other people assisting them in running their otherproperties2010 NSSC 252 (CanLII)I am satisfied that on the evidence there was no failure on the part ofMs. Connier to devote her timeto the Company and that whatever delegation shemayhave made to Ms. Gallant was not ofany tasksthat should only have been performed by Ms. Cormier.I am also satisfied that the arrangements made byMs. Cormier in relation to Ms. Gallant were withinthe scope ofdiscretion that Ms. Cormier had, and was allowed to have, by the Company.As a result, the delegation of tasks to Ms. Gallant did not constitute a breach of her employmentresponsibilities that would entitle the Company to terminate her employment nor does it give a basisto reduce the price to be paid for her shares pursuant to clause 7.03(b)(ii).7. CARRYING ONA COMPETING BUSINESSThis allegation arose from an arrangement made by the Department ofCommunity Services to payMs. Cormier to provide companionship and care services for an individual referred to as "Ruby".Ruby had been a Department of Community Services resident in one of the Company's unitsmanaged by },,1s. Cormier. The r"VQ of them get along "\-vell. In or prior to December 1999 Rub)~moved out ofthe Company premises and into her own apartment but still needed assistance. Shewas still under the care ofthe Department. A Ms. Bethune, a care co-ordinator with the Department,

· ., ....28had been dealing with Ms. Cormier since 1995 and knew that Ruby liked Ms. Cormier. She was alsosatisfied that Ms. Cormier was responsible and always accessible. It was the evidence of Ms.Bethune that the quality ofhomes run by the Company was probably one of the highest of all thehomes she was aware o£Ms. Bethune asked Ms. Cormier ifshe would provide companionship support for Ruby. There wasno set schedule for her companionship duties, but it was a daily assessment as to Ruby's needs whichvaried. Ms. Bethune estimated the time commitment would be about three hours twice a week, butthere was no stipulation as to when the hours were to be incurred.2010 NSSC 252 (CanLII)It was Ms. Cormier's estimation that she spent about twenty-six hours a month with Ruby. Shewould often pick her up and bring Ruby with her as she travelled around the various units. Ms.Cormier testified that being a companion with Ruby, she was still on call. It might include herbringing Ruby with her when she had to go to one ofthe properties.At the end ofthe day Ms. Cormier would help cook for Ruby and clean her apartment outside ofherworking hours with the Company.Ms. Cormier testified that for providing the companionship duties for Ruby she was paid $600.00a month, which included all expenses and travel.Because the Department was a source of residents for the Company and Ms. Bethune was asignificant contact with the Department, Ms. Cormier testified that she was doing a favour for Ms.Bethune and thus was doing it for the good of the Company.The arrangement lasted from December of 1999 to April of 2002. Eventually Ruby's conditiondeteriorated and she had to be placed in a different facility,

. \. .. ~..29Ms. Cormier testified she discussed the matter with both the Nordqvists and they had no objection.She said that Mr. Nordqvist did Ms. Cormier's tax returns and would be aware of the amount ofmoneyshe was earning as Ruby's companion. Sometimes, Mr. Nordqvist would be at the homes andwould see and talk to Ruby.Mr. Nordqvist testified that his only knowledge ofRuby was that occasionally he would see her atone ofthe properties when he happened to be there. He recalls Mrs. Nordqvist telling him that Ms.Cormier was going to be taking care ofRuby. He raised no questions at the time, but did testify thatifhe had known about the commitment oftime required, he might have been concerned.2010 NSSC 252 (CanLII)Mr. Nordqvist acknowledged that he might have seen her 1999 tax returns and ifhe had, he wouldhave seen her other income from being a companion for Ruby.He knew that Ruby was often on the premises with Ms. Cormier and he knew that Ms. Cormier hadmade some arrangements, but he never looked into it.Mr. Nordqvist confirmed that there was no evidence that Ms. Cormier's arrangement with Ruby wasinterfering with how Ms. Cormier was carrying out her responsibilities.Mrs. Nordqvist testified that she was never aware of any arrangement that Ms. Cormier had inrelation to being a companion for Ruby. She testified that Ms. Cormier did not have permission todrive Ruby around in the company vehicle.Whether Ms. Cormier ever expressly told the Nordqvists that she was looking after Ruby under aformal arrangement with the Department, there was no suggestion that she was hiding the fact. Herincome from the Department wouldhavebeenknown to Mr. Nordqvist and whetherherealized whatit was he would have known she was receiving separate income. His evidence was that it did notcause him any concern.

, >30While the time commitment was significant the evidence was that Ms. Cormier was able to overlapher care ofRuby with carrying out her Company duties and performed some ofher companionshiprole outside of her working day for the Company. There was no evidence to suggest that herobligations to Ruby interfered with or negatively impacted he responsibilities to the Company.I am not satisfied that the arrangement was a breach of her employment responsibilities to theCompany. Rather I am satisfied that consistent with the Nordqvist's relationship with Ms. Cormierthey were satisfied to let her perform her responsibilities as she saw fit with considerableindependence.2010 NSSC 252 (CanLII)As a result, the arrangement whereby Ms. COroller provided companion services to Ruby did notconstitute a breach ofher employment responSibilities that would entitle the Company to terminateher employment nor does it give a basis to reduce the price to be paid for her shares pursuant toclause 7.03(b)(ii).8. FAlLURE TO KEEP REpORTSFollowing her termination, Mr. Colin Nordqvist asked his assistant, a Ms. Findlay, to go over theCompany's files and note anything that was missing. She identified 21 files with various itemsincomplete or missing (exhibit D-ll).On cross examination, Ms. Findlay acknowledged that she was not familiar with how or what fileshad been kept prior to Ms. Cormier leaving. She made Exhibit D-ll based on what they do in theShare Care 2000 units. She also acknowledged on cross that inspectors would come in from theDepartments and she had no knowledge as to whether as a result ofthose visits any deficiencies wereidentified. She agreed that while criminal checks did not appear to be in the files, she could not saythat no checks had been done at the time. She also acknowledged that there were files whereeverything seemed to be in order according to how she was reviewing the files. She only reviewed

. '...31the files relating to some ofthe staffand did not get files for others. The ones that she reviewed, shehad gotten from Colin Nordqvist.ColinNordqvist testified that there was no requirement that the Ms. Cormier had to follow the sameformat ofrecord-keeping as in his own homes.The evidence does not establishthat there was anyparticularrequirement as to the extent and formatofrecords that Ms. Cormier was to ensure were kept or that failure to do so would be considered abreach ofher employment responsibilities. Once again the evidence did establish that to a large2010 NSSC 252 (CanLII)extent Ms. Cormier was permitted to handle her side ofthe responsibilities in her own manner.AB a result, I am not satisfied that Ms. Cormier failed to keep records such that it constituted abreach of her employment responsibilities that would entitle the Company to terminate heremployment orthat would give a basis to reduce the price to bepaid for her shares pursuant to clause7.03(b)(ii).9. FAlLURE TO KEEP COMPANYRECORDS CONFIDENTIALThebasis ofthis allegation is the fact that Ms. Cormier had Company cheques and documents at theTV shop premises where they were potentially accessible by people who might be in the shop andwho would have no right to see them.Ms. Cormierhad an office at the Company location at Pepperell Street which was approximately sixbyfive which she testified was not adequate. She did work out ofthere for some years and often didwork at home onher kitchen table. As the business got busier, she needed more space. In 2002, sheasked Mr. Nordqvist if she could work using space at the unit #2 Jennifer Allan Interiors' spacelocation. They agreed and there was to be a rental paid, She had a computer and the Nordqvist's sonset it up for her at that location. Shemaintained a working area with a filing cabinet offto one side.

32The space used was in the open and not secure. The filing cabinet did have a lock and she kept thekey.The Nordqvists knew she was keeping papers at that location because four to five times, Mrs.Nordqvist and more often Mr. Nordqvist would come there for a meeting.Mr. Nordqvist agreed that in 2002, Ms. Cormier had asked ifshe could have premises inDartmouthwhere she could do interviews and Mr. Nordqvist thought that for a rental of $200.00 for space atJennifer Allan that seemed reasonable. He did not question her further although he knew that shehad a desk there and often had her briefcase there, but he denied that he had any knowledge thatrecords were kept there. The only times he visited her there, he saw the desk and briefcase. He wasonly at the Jennifer Allan location a couple oftimes, although once doing the budget for a couple2010 NSSC 252 (CanLII)ofhours.Inabout April orMayof2004Jennifer Allan Interiors closed the premises. Ms. Cormiermoved intothe unit # 3 next door which was the occupied byherhusband's TV store and repair shop. Itwas Mr.Martell's evidence that the movewas temporarywhile his wifewaited for anotherlocationto becomeavailable. The space in the TV shop that she used was an area of approximately four by eight feetwith a desk between the reception and service areas. The company never paid any rent for the spacein the TV shop.Ms. Cormier testified that immediately prior to her termination, she was working from the TV shop,but did use Pepperell Street and the other locations. Files needed to do her work were being keptat the TV location.It was Ms. Cormier's evidence that both the Nordqvists were aware that she had moved her "office"to the TV shop location. She said that she had met Mr. Nordqvist there several times on companybusiness and described a meeting in late 2004 when he was preparing a budget and they were goingover her payroll books.

. ",.'933Ms. Cormier testified that she often got faxes to and from the TV premises. Shereferred particularlyto exhibit P2 tab 1 which was a fax from Mr. Nordqvist in September of2005 addressed to the TVstore.Mr. Martell testified that he saw the Nordqvists attend on a couple of occasions at the TV store.Specifically, he testified that in the summer of2005, Mr. Nordqvist attended at the store about fourtimes to meet with Ms. Cormier. It was his evidence that Ms. Cormier would be in and out ofthestore premises often, sometimes in for an hour and sometimes for a couple ofhours.2010 NSSC 252 (CanLII)On cross examination, Mr. Martell testified that Mr. Nordqvist visited the TV shop at least on oneoccasion for an hour sitting with Ms. Cormier at her desk, and two to three other times as well. Itwas Mr. Martell's evidence that on those occasions, he was not able to hear the conversation.Mr. Nordqvist testified thatpriorto October 12, 2005, hehad no knowledge ofMs. Cormierkeepingan office at the TV shop. He did acknowledge that he had seen payroll from Ceridian and recordsaddressed to the TV shop, but he had assumed that was Ms. Cormier's department and said nothing.He had no knowledge prior to the October 12th that records were kept there.Mr. Nordqvist did not refute Ms. Cormier's evidence that he had made visits to the TV shop to talkto her about business.Mr. Nordqvist testified that he never understood that Ms. Cormier had an office in the TV shop.Mr. Nordqvist could not remember any company meetings at the TV shop, although heacknowledged that he might have dropped off company papers to Ms. Cormier at that location. Hedid know that Ms. Cormier's fax number was at the TV shop and he would sometimes call the shopto make sure she was tnere in order to send through a fax.

'.34Mr. Nordqvist acknowledged on cross that he had never told Ms. Cormier not to use the TV locationfor an office or for storing files.Mrs. Nordqvist testified that she had agreed with Ms. Cormier renting part ofthe space at JenniferAllan Interiors but when those premises were no longer available, she had assumed that Ms. Cormiermoved back to the Pepperell Street location. She would not have agreed to allow company recordsto be maintained in the TV shop space.Ms. Cormier testified that she did not need anyone's approval to move the records from the JenniferAllan location to the TV shop. She did move confidential records there and she acknowledged thather husband had access to the files. She did say that her filing cabinet was locked and she kept thekey. But sometimes when she was working there Company papers would be on the desk.2010 NSSC 252 (CanLII)There was no evidence that confidential Company documents would be left on the desk when Ms.Cormier was not there.Mr. Nordqvist testified that when they attended at the October 12th meeting at the TV shop, the firstthing he heard Mrs. Nordqvist say was "What is tbis?" He then described the confrontation thattook place and at that point, told bis wife that they should leave.It was the evidence of Mrs. Nordqvist that when she went into the TV shop she saw companycheques spread out on the desk where Ms. Cormier was sitting and that caused her concern.The circumstances and environment for Ms. Cormier's working space at the TV shop does not appearto have been significantly different than that in the Jennifer Allan Interiors' premises. At bothlocations the desk and file cabinet were in accessible areas.I am satisfied that both the Nordqvists were aware that Ms. Cormier was using space at the JenniferAllan Interiors' location and that Mr. Nordqvist, at least, would have been aware of the physical

...35environment including any lack ofsecurity. No objection was made which, again, is consistent withthe evidence that the Nordqvists were content to permit Ms. Cormier independence to carry out herfunction as she saw fit.As a result, I am satisfied that the fact Ms. Cormier transferred to the space in the TV shop and waskeeping confidential records there did not constitute a breach ofheremploymentresponsibilities thatwould entitle the Company to terminate her employment nor does it give a basis to reduce the priceto be paid for her shares pursuant to clause 7.03(b)(ii).2010 NSSC 252 (CanLII)10. INSUBORDINATIONThis refers to the confrontation that occurred at the TV shop at the meeting on October 12th.Mrs. Nordqvist testified that at the meeting at the TV shop, she walked in and saw Ms. Cormiersitting at a desk with cheque books laid out. At that point, she made the comment as to "What isthis?" At that point, Ms. Cormier stood up and the two ofthem had a confrontation face to face. Mr.Nordqvist then suggested they should leave.Ms. Cormier testified that the Nordqvists came into the TV shop and chatted in the space where shewas maintaining the office at the back ofthe store. Ms. Cormier testified that when she asked iftheyhad brought the books to look at, Mrs. Nordqvist became very angry and the meeting quicklydeteriorated into a confrontation with raised voices. While the parties respective descriptions ofwhat happened and who instigated the yelling differed, there is no doubt from the evidence that aflashpoint occurred and the parties became very hostile to each other. At one point, Ms. Cormieralleged that the Nordqvists said that ifyou get a lawyer involved, it will be the sorriest day ofyourlife.Neither Mr. Martell nor Mr. Nordqvist took any active participation in the confrontation other thanMr. Nordqvist told his wife they should leave.

· ..36Whoever may have caused the confrontation, whether it was Ms. Cormier asking for the books orMrs. Nordqvist expressing concern about cheques spread out on the desk, I am satisfied it was partlythe culmination offrustration that had developed over the preceding months during the attempts toprovide financial information to Ms. Cormier.The capacity of both Ms. Cormier and Mrs. Nordqvist at the time of the confrontation was notsimply that of employer and employee. Both were at the meeting more in their capacity as ownersand possible seller and purchaser. The meeting was called to discuss the possible sale ofpart ofthebusiness. Whatever was said was between owners and business participants. The deterioration intheir relationship was not an employer and employee matter.2010 NSSC 252 (CanLII)I am not satisfied that the incident constituted insubordination by an employee to an employer or thatit was ofthe nature to give grounds to terminate Ms. Cormier.11. Ms. CORMIER'SPRACTICEOFPAYING CASHThis related to Ms. Cormier's admitted practice of paying some staff by cash and not chequenotwithstanding the clear advice from Revenue Canada that cash payments were not to be made andthe statement ofMr. Nordqvist that the practice had to stop.Ms. Cormier testified to a long-standing practice ofmaking cash payments to employees. Part-timeemployees, or employees working extra hours or doing extra tasks often wanted to be paid in cash.She explained that was the way that business was done. Itwas her evidence that the Nordqvists wereaware ofthat. The employees who were paid cash were required to sign a declaration that they wereindependent contractors. She said that the cash payments mayor may not have shown up in thesalary expenses in the financial statements.Revenue Canada had conducted an audit in approximately 1995 at which time Ms. Cormier and theNordqvists agreed to cut back on cash payments to employees.

.'37In the year 2000, there was another audit bythe Revenue Canada and she was told that no one shouldbe paid in cash following that. From that time on, all full-time and part-time staff were put on apayroll, but some part-time staff continued to be paid cash for vacation, overtime and bonuses.Cash payments also caused problems for the Company because they could never be reflected in thebudgets that were submitted for approval by the Department and thus, funding could not be obtainedfor those payments.It was Ms. Cormier's evidence that the practice was reducing and by the time her employment hadbeen terminated, there were only a few employees getting paid by that method.2010 NSSC 252 (CanLII)While it had been agreed that theywould cutback on cash payments it was Ms. Cormier's testimonythat she still needed to make some payments in order to get staff to work and that the Nordqvistswere aware ofthat. It was her evidence that it was standard practice and the Nordqvists were doingthe same thing in their other homes.She would write out cheques to cash, give the cash to the employee and the cheques would go fromthe bank back to Mr. Nordqvist. She would normally write information on the cheques indicatingwhat they were for. She testified Mr. Nordqvist never asked for further information.Mr. Nordqvist testified that after the 2000 meeting with Revenue Canada, he told Ms. Cormier thatthey had to stop cash payments. He acknowledged that Ms. Cormier would explain that there wereproblems getting staffto work so cash payments were still required and hebelieved her and acceptedthat, so unfortunately, it continued.Mr. Nordqvist testified that as for Ms. Cormier's use ofthe cheques and practice ofusing money, shewas running the ship and knew what she was doing with the money and that they (me~ning he andhis wife) had no choice.

38On at least some occasions, Mr. Nordqvist would ask for names ofpeople getting paid cash and Ms.Cormier would tell him. It was his evidence that he could not identify from some ofthe chequeswhat the money was for. He testified that he had never seen Ms. Cormier's payroll book.When Mr. Nordqvist would ask Ms. Cormier about the cheques, she would say that the details werein the payroll book, but he never asked to see it or for any further details because Ms. Cormier wasbis partner and that was her job.Mrs. Nordqvist testified that she never looked at the cheques that were being written byMs. Cormieras that was a matter between Mr. Nordqvist and Ms. Cormier, and she trusted that they were doingtheir thing.2010 NSSC 252 (CanLII)Mrs. Nordqvist testified that they had an informal relationship with Ms. Cormier, that they werealways concerned about the cash being written because they were not able to get T4 slips to supporttheir claim, and she knew that Ms. Cormier and Mr. Nordqvist were working on it.The Company argue that the information recorded on the cheques did not accurately identify whatthe cheques were for and this was a further example ofincorrect record keeping by Ms. Cormier.The evidence did not establish that this was a practice which the Company had made clear to Ms.Cormier that it had to stop or disciplinary action would be taken. Indeed the evidence did tend toshow that to the extent that Ms. Cormier continued the practice following the Revenue Canadaaudits, that was known to the company and no efforts were made to advise Ms. Cormier to cease thepractice. No efforts were made because ofa grudging acknowledgement that they were still neededand this was an area to be looked after by Ms. Cormier.SUMMARYThe evidence shows that the Nordqvists permitted Ms. Cormier wide latitude ofdiscretion as to howto carry out her employment responsibilities. Prior to making the decision to terminate they had not

..39identified anything that she was doing as being in breach of or contrary to her employmentresponsibilities. The practice of cash payments was referred to at the time oftermination but eventhat continuing (although apparently diminishing) practice had not been considered a disciplinarymatter but more a question of doing what could be done to ultimately eradicate the practice.When the Nordqvists finally decided to terminate Ms. Cormier they did not focus on any identifiedwrongdoing other than they were no longer able to trust her and were concerned about their clients.They did not provide any warning or advice to Ms. Cormier that she was doing something wrong orfor which she might be fired. Both ofthe Nordqvists described the situation as having reached thepointwhere changes had to be made but without warningMs. Cormier ofthat they simplyterminatedher. To the extent that the Nordqvists were not aware ofthe specifics of what Ms. Cormier wasdoing it was as much the result oftheir intentional leaving Ms. Cormier to "manage" the homes inher own discretion. In some cases they knew enough to justify them enquiring further but they didnot and thus justify the conclusion that they were satisfied with what Ms. Cormier was doing.2010 NSSC 252 (CanLII)Ms. CORMIER'S ENTITLEMENT TO REMEDIESIn her submission ofJuly 17,2008, Ms. Cormier requested the following remedies:1. A declaration that theNordqvists are not entitled to withhold any amount ofthe shareprice under article 7.03(b)(ii).2. Outstanding wages due at the time oftermination in the amount of$6,000.00.3. The amount of $7,550.00 representing the Company's share of CPP benefitsregarding Ms. Cormier that were paid by Ms. Cormier on behalf of the Company.4. Unpaid vacation pay of4%.5. Damages in lieu ofnotice for 12 months at the rate of$3,375.00 per month for a totalof$40,500.00.6. Additional damages arising from the reprehensible conduct ofthe Company by wayofan extension ofthenotice period orbecausethe conduct caused hermental distress

."40that was in the contemplation of the parties. The amount claimed on this basis is$30,000.00.7. Prejudgment interest at 5%.8. Costs ofthis arbitration, the "bulk" ofthe costs to be paid on a solicitor client basis.Neither party spent much time in leading evidence or making submissions in relation to the claimfor remedies. Nevertheless my responsibility is to assess what information does exist to providewhatever remedy may be reasonably supported by the evidence.2010 NSSC 252 (CanLII)As to the claim for lost salary, there was uncontested evidence that Ms. Cormier was paid $3,000.00a month gross and had the use ofa company vehicle. There was no evidence as to the value ofthevehicle but Ms. Cormier did advance a total monthly benefit of$3,375.00 per month and that figurewas not disputed.Ms. Cormier was not only an employee but her role was integral to the operation and success ofthebusiness. She had managerial responsibilities. Her employment lasted approximately six years.There was no suggestion that she had mitigated any ofthis loss. In all the circumstances it is myfinding that she was entitled to eight months' notice oftermination and damages for lack ofnoticeat the rate of$3,375,00 for a total award under this heading of$27,000.00.There is nothing in the facts ofthis termination that would justify the conclusion ofreprehensibleconduct or unusual distress that was contemplated by the parties. I am not satisfied that thecircumstances in this case warrant either an extended period ofnotice under Wallace nor damagesfor mental distress under Honda.As for the claim for accrued wages of $6,000.00 due at the time oftermination, I have no detailsother than the assertion that is the amount due and the Company did not contest that claim.Accordingly I am satisfied on the balance ofprobabilities that such amount was owed and I awardit.

" .' .,.\1.·....l -,1'.• ,~.,.".~41The claim for CPP benefits is more difficult. Once again the only information I have is the claimand the fact it is not disputed. Nevertheless, I am not satisfied that I have enough information to besatisfied, on the balance ofprobabilities, that such an amount is correct and is owed bythe Company.I am prepared to award the amount ofinterest at 5% from the date ofbreach to the date ofpayment.Both sides have asserted a claim for costs ofthe arbitration. There was an agreement at the time ofthe submission to me that both sides would split my fees equally. That of course does not addressthe issue of an award of costs between the parties themselves.2010 NSSC 252 (CanLII)Unfortunately, neither side has given me any guidance as to the range of costs that would beappropriate in this case. The respondents have submitted that "Considerable legal expense wasincurred interms ofbriefpreparation, attendance at the hearing andthe obtaining ofcritical evidencefrom Mr. Gilpin and Ms. Carter. I will reserve jurisdiction to deal with costs and if the partiesrequire an award on the point the matter can be dealt with by conference call.Under the arrangements I have set up for payment ofmy fees as a precondition to the release ofthisaward, one party may pay the whole of the fees. In that case I will issue a supplementary awarddirecting that the paying party recover halfofthe fees from the non-paying party.In summary:1. I find that the Company had no entitlement to terminate the employment of Ms.Cormier and that in doing so it was in breach ofthe Employment Agreement.2. I find that Ms. Cormier has not committed an act ofdefault under clause 7.03 oftheBuy Sell Agreement and that the purchase price payable pursuant to that clause is notto be reduced by 20%.3. I awardthe sum of$27,000.00 against the Companyin favoUfofMs. Cormier bywayofda.1'!lages for ~rrongfhl terrni T'lat1on.4. I award the sum of $6,000.00 against the Company in favour of Ms. Cormier forwages due and owing.

, • 425. I award interest onthe two amounts above at the rate of5% peryear not compoundedfrom the date ofwrongful termination until payment.6. I will reserve jurisdiction to deal with an award ofcosts after hearing the parties.7. Ifrequired I will issue a supplementary award relating to payment ofhalfofmy fees.I will retain jurisdiction to deal with any other issues that arise out of this award.2010 NSSC 252 (CanLII)DATED at Halifax this 29th day ofJanuary, 2009.~~=~~. MERRICK '~ole Arbitrator