Judgments

Decision Information

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A-660-83
The Queen in Right of Canada as represented by Treasury Board (Applicant)
v.
Public Service Alliance of Canada (Respondent) and
Public Service Staff Relations Board (Mis -en- cause)
Court of Appeal, Heald, Urie and Ryan JJ.— Ottawa, January 15 and 31, 1985.
Public service — Exclusion of employees from bargaining unit — 260 employees given power to make binding decisions on behalf of employer in dealing formally with grievances at first level of grievance procedure — Employer seeking exclu sion of employees as persons employed in managerial or confidential capacity — No mala fides — Refusal of PSSRB to allow exclusions — Extent of PSSRB's jurisdiction with respect to review of exclusions — Public Service Staff Rela tions Act, R.S.C. 1970, c. P-35, ss. 2, 7, 99(4) (as am. by S.C. 1974-75-76, c. 67, s. 28), 100 (as am. idem, s. 29) — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28.
Judicial review — Applications to review — Public service — Exclusion of employees from bargaining unit — Employer giving 260 employees power to make binding decisions on employer's behalf in dealing officially with grievances at first level of grievance procedure — Exclusion of said employees sought as persons employed in managerial or confidential capacity — No mala fides — Refusal of PSSRB to allow exclusions — Extent of jurisdiction of PSSRB with respect to review of exclusions — Privative provisions of s. 100 of Act inapplicable as overriden by s. 28 of Federal Court Act — Public Service Staff Relations Act, R.S.C. 1970, c. P-35, ss. 2, 7, 99(4) (as am. by S.C. 1974-75-76, c. 67, s. 28), 100 (as am. idem, s. 29) — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28.
Jurisdiction — Federal Court — Appeal Division — Review of PSSRB decision on exclusion of employees from bargaining unit — Privative provisions of s. 100 of Act inapplicable as overriden by s. 28 of Federal Court Act — Public Service Staff Relations Act, R.S.C. 1970, c. P-35, ss. 2, 7, 99(4) (as am. by S.C. 1974-75-76, c. 67, s. 28), 100 (as am. idem, s. 29) — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28.
Treasury Board proposed to designate for exclusion from the bargaining unit 260 Customs Superintendents on the ground that they were persons employed in a managerial or confiden-
tial capacity within the meaning of section 2 of the Public Service Staff Relations Act. These employees had been given the power to make binding decisions on behalf of their employ er in dealing formally with grievances at the first level of the grievance procedure. The union objected to these exclusions and the matter was submitted to the Public Service Staff Relations Board which disallowed exclusion even though it found as a fact that the employer had effectively assigned to the employees the above-mentioned grievance-related respon sibilities.
This application to review is based on the argument that the Board was not empowered by Parliament to override the au thority given the employer by statute to designate persons whose decision on a grievance constitutes a level in the griev ance process. The respondent argues that if the Board did not have the jurisdiction to satisfy itself that management's deci sion was justified in a particular case, then it would be reduced to acting as a rubber stamp. The respondent also suggests that by designating such a large group of employees, the employer could circumvent and undermine the entire collective bargain ing process. For its part, the Board argues that its decisions are protected by the privative provisions of section 100 and can only be quashed by a reviewing court when they are found to be "patently unreasonable".
Held, the application should be allowed.
Parliament has entrusted the employer and not the Board with the responsibility for designating persons to act on its behalf in making binding decisions in the course of the griev ance process pursuant to paragraph (e) of the definition of "person employed in a managerial or confidential capacity" in section 2 of the Act. The Board's finding of fact that the employer had effectively assigned the duty to deal with griev ances under the Act effectively disposed of the issue between the parties and the Board should have stopped there and decided the matter in favour of the employer. The Board erred in law in examining whether management's decision was other wise justified. The word "required" in paragraph (e) of the above-mentioned definition cannot be interpreted as imposing a requirement of necessity, giving the Board jurisdiction to inquire into the need for the designation and to require a reasonable explanation by the employer for such a large increase. The definition nowhere uses the word "necessary" or similar words and the "liberal" interpretation proposed by the respondent would be contrary to section 7 of the Act. That section requires a construction of the Act which will not affect management's right to determine the organization of the Public Service and to assign duties to and classify positions therein.
There is no basis for a finding of mala fides on the part of the employer, nor did any member of the Board make one. However, such a finding in a given case could perhaps justify disallowing exclusions. The argument concerning the privative provisions of section 100 is without merit. Section 100 does not apply here because the application was brought under section 28 of the Federal Court Act under which this Court is given
jurisdiction "Notwithstanding ... the provisions of any other Act....
CASES JUDICIALLY CONSIDERED APPLIED:
The Queen v. Canadian Air Traffic Control Association, [1982] 2 F.C. 475 (C.A.).
DISTINGUISHED:
Foreign Affairs Case, No. 1 (1968), P.S.S.R.B. Reports K195; The Queen v. Professional Institute of the Public Service of Canada, [1980] 2 F.C. 295 (C.A.).
COUNSEL:
Eric Bowie, Q.C. and Harvey A. Newman for applicant.
Maurice W. Wright, Q.C. and A. J. Raven for respondent.
Ian Scott, Q.C. and John E. McCormick for mis -en-cause.
SOLICITORS:
Deputy Attorney General of Canada for applicant.
Soloway, Wright, Houston, Greenberg, O'Grady, Morin, Ottawa, for respondent. Gowling & Henderson, Toronto, for mis -en- cause.
The following are the reasons for judgment rendered in English by
HEALD J.: This is a section 28 application to review and set aside a decision rendered on May 4, 1983, by the Public Service Staff Relations Board (the Board). At all material times the respondent was the certified bargaining agent for all employees employed in levels 1 to 7 of the Pro gramme Administration Occupational Group. At the time of certification in 1968, the applicant and the respondent agreed to the designation as managerial or confidential, exclusions of some 430 persons employed in Revenue Canada, Customs and Excise. In 1974, the parties agreed to the exclusion of an additional 150 persons. These exclusions were based on paragraph (h) of the definition "employee" contained in section 2 of the Public Service Staff Relations Act, R.S.C. 1970,
c. P-35, as amended (the Act). That subsection reads:
2....
"employee" means a person employed in the Public Service, other than
(h) a person employed in a managerial or confidential capacity,
Subsequent to 1979, the applicant proposed for exclusion an additional 260 persons classified as Programme Administrators at Level 2, identified in the collective agreement as PM-2 and described by the applicant as Customs Superintendents. The basis for exclusion advanced by the applicant was that each of these individuals had been assigned the duty to deal formally on behalf of the employ er with grievances presented at the first level of the grievance procedure, and, therefore, fell within paragraph (e) of the definition of "person employed in a managerial or confidential capaci ty" in section 2 of the Act. The relevant portion of paragraph (e) reads:
2....
"person employed in a managerial or confidential capacity", means any person who
and includes any other person employed in the Public Service ... who in any case where a bargaining agent for a bargain ing unit has been certified by the Board is designated in prescribed manner by the employer, or by the Board on objection thereto by the bargaining agent, to be a person
(e) who is required by reason of his duties and responsibili ties to deal formally on behalf of the employer with a grievance presented in accordance with the grievance process provided for by this Act,
The respondent objected to all of the 260 addi tional proposed designations and, accordingly, the issue between the parties was submitted to the Board.
The majority of the Board decided that none of the additional 260 persons proposed for exclusion should be designated pursuant to paragraph (e) of the definition of "person employed in a managerial or confidential capacity" in section 2 of the Act.
The dissenting member of the Board, while tacitly agreeing with the majority view that the Board possesses jurisdiction to inquire into the "quality" of the management decision, disagreed with his colleagues on the facts, concluding that the employer had established a prima facie case, at the very least to support the bona fides of the decision to designate and that on these facts, the employer's decision was "logical, practical and consistent with the provisions and objects of the Act."
It is the applicant's position that the Board erred in law and exceeded its authority in refusing to designate the designated 260 PM-2's after finding as a fact that the employer had effectively assigned to them the duty to receive and deal formally with first level grievances and had dele gated the authority to them to make binding deci sions on the employer's behalf. This position is opposed by the respondent union which asserts that the Board has jurisdiction to determine whether or not the employees proposed for desig nation should be properly excluded from collective bargaining; that the applicant's position is tan tamount to restricting the Board's jurisdiction to acting as a "rubber stamp" in respect of the employer's decision to designate; and that the Board's position is correct in law and consistent with the Act and with Parliament's recognition of the particular expertise of the Board. Counsel for the Board submits that the question to be decided is whether the Board, hearing an objection by the bargaining agent to designations by the employer, is limited to enquiring whether the employer has duly assigned the designated employees responsi bility for grievances and designated them in the prescribed manner, or, whether the Board can also inquire as to whether the duties and responsibili ties assigned to the designated employees will, in fact, as well as in name, "require" their involve ment in the grievance process. He characterizes this issue as purely factual, i.e., do the duties and responsibilities of the designated employees require formal involvement in the grievance process.
The submission of counsel for the applicant is simple and straightforward. By referring to the definition of "person employed in a managerial or confidential capacity" (supra) contained in the Act, he observes that where, as here, a bargaining agent has been certified by the Board and where, as here, the employees have been designated by the employer in the prescribed manner and where, as here, the bargaining agent has objected to that designation, the duty of the Board is limited to the making of a factual finding on an individual basis whether or not the duties and responsibilities of each designated employee include dealing formally on behalf of the employer with a grievance. In his view, the Board was not empowered by Parlia ment, on a plain reading of the language used, to override the authority given to the employer by the statute to designate persons whose decision on a grievance constitutes the final or any level in the grievance process.
Counsel then refers to the majority reasons of the Board (Case, Vol. XXII, p. 3318) where it is stated:
8. The evidence adduced, both written and oral, in the course of this hearing satisfies the Board that the Employer has fulfilled the technical requirements of the Act and the Regulations. The Employer has effectively assigned to the subject employees the duty to receive and deal formally with grievances at the first level of the grievance procedure and has delegated authority to them to make binding decisions on behalf of the Employer particularly on such matters as scheduling of annual leave, assignment of shifts, overtime work, special and other leave, administering the disciplinary process within prescribed limits and so forth.
On the basis of this extract from the majority reasons, it is the applicant's position that the Board found as a fact and on an individual basis that each of the 260 employees proposed for exclu sion had been effectively assigned "the duty to receive and deal formally with grievances at the first level of the grievance procedure". According ly, in counsel's view, as a consequence of that finding, the Board was required by the Act to so designate each of the said employees, and in fail ing to do so, the Board erred in law.
In support of this position, applicant's counsel submits that section 7 of the Act must be read
along with subsection 99(4) [as am. by S.C. 1974- 75-76, c. 67, s. 28] of the Act to ascertain the true meaning to be given to the words used in the statute. Section 7 reads:
7. Nothing in this Act shall be construed to affect the right or authority of the employer to determine the organization of the Public Service and to assign duties to and classify positions therein.
Subsection (4) of section 99 reads: 99....
(4) For the purposes of any provision of this Act respecting grievances, the employer shall designate the person whose decision on a grievance constitutes the final or any level in the grievance process and the employer shall, in any case of doubt, by notice in writing advise any person wishing to present a grievance, or the Board, of the person whose decision thereon constitutes the final or any level in such process.
On the basis of these provisions, the applicant submits that Parliament has entrusted the employ er and not the Board with the responsibility for designating persons to act on its behalf in making binding decisions in the course of the grievance process.
I agree with that view of the matter. In my view, the definition of "person employed in a managerial or confidential capacity" supra, clearly includes those persons to whom the employer has effective ly assigned the duty to deal with grievances under the Act. In this case, as noted supra, the Board has made an affirmative finding of fact in this regard. I agree with applicant's counsel that such a finding effectively disposed of the issue between the par ties and that the Board should have stopped at that juncture and decided the matter in favour of the employer. I reach this conclusion because of the plain and unambiguous words used in the defini tion and, more particularly so, when those words are considered in the context of section 7 and subsection 99(4) of the Act supra. In taking the position that it had jurisdiction and a responsibility to satisfy itself that management's decision was justified in all the circumstances of the present case, the Board clearly erred in my view. Counsel for the respondent union submitted that the inter pretation advocated by the applicant would result in the Board's jurisdiction being restricted to acting as a rubber stamp of the employer's deci-
Sion to designate. He also suggested that through the simple expediency of designating such a large group of employees, the employer could "circum- vent and undermine the entire collective process." I do not agree. As I perceive the language used in the definition of "person employed in a managerial or confidential capacity" in section 2, the Board has the power and duty to determine, in a case where there is a certified bargaining agent, and where the employer has designated certain per sons, and where the bargaining agent has objected to that designation, whether those persons come within any of the classes described in paragraphs (c), (d), (e), (f) or (g) of the definition. In the case at bar, the relevant class is the class described in paragraph (e). Consequently, the question for decision under that paragraph is whether the per sons designated by the employer do, as a matter of fact, have the duty and responsibility to deal with grievances on behalf of the employer. As noted supra, it is apparent from the majority reasons of the Board that after considering all of the evi dence, both written and oral, it was satisfied that the employer had "effectively" assigned the duties specified in paragraph (e) to subject employees. That is not acting as a rubber stamp, in my view. At that stage, the Board had made the inquiry required of it under the statute and it should have concluded its deliberations at that juncture.
It is submitted, however, by counsel for the Board, that the word "required" should be inter preted in a wider sense, namely, in the sense that the proposed large increase in the number of griev ance officials is necessary and that the Board has jurisdiction to inquire into the need for such a designation and to require a reasonable explana tion by the employer for such a large increase. I do not accept this submission. I observe, initially, that the word "necessary" or words of similar import are not found in the definition. I would also note that such an interpretation would be directly con trary to section 7 of the Act which requires a
construction of the various provisions of the Act which will not affect management's right to deter mine "... the organization of the Public Service and to assign duties to and classify positions there in." Such a construction would arrogate to the Board a power which the section does not confer upon it.' Furthermore, I think it significant that in paragraph (g) of this same definition, 2 Parliament has seen fit to expressly empower the Board to look into, qualitatively, management's designation of any employee. Had Parliament so intended in respect of paragraph (e), it would have been a simple matter to insert similar words in that paragraph.
Counsel for the Board referred, in his memoran dum, to the Foreign Affairs Case, No. 1, a deci sion of the Board dated April 30, 1968 (P.S.S.R. Board Reports, K195, at page K204) where the Board said that the employer must show "... that there has been given to the person concerned some authority of substance to give a binding decision on his own initiative to some types of grievances." In my view, this statement by the Board does not assist counsel for the Board or the respondent in light of the specific findings of fact made by the Board at Vol. XXII, page 3318 and quoted supra. Those findings are clearly evidence of "authority of substance" to give binding decisions on that person's own initiative in respect of first level grievances. In reading the Foreign Affairs deci sion, however, I note a useful discussion of the problem facing the Board when an employee organization has challenged employer designations under subsection 99(4). At pages K199 to K200, the Board said:
' For a similar view in respect of section 79 of the Act, see The Queen v. Canadian Air Traffic Control Association, [1982] 2 F.C. 475 (C.A.), at page 485, per Urie J.
2 Paragraph (g) reads "who is not otherwise described in paragraph (c), (d), (e) or (/), but who in the opinion of the Board should not be included in a bargaining unit by reason of his duties and responsibilities to the employer". [Emphasis added.]
On a number of occasions, we invited the advocates for employee organizations who appeared before us in certification proceedings to suggest what sort of test ought to be applied by the Board in determining whether designations proposed by the Employer were proper or improper. No concrete suggestion of any sort has been forthcoming. We were generally told that the Board should look at the facts of each case and come up with some sort of an answer. Needless to say, if we were to adopt this counsel, we would be setting ourselves up as a court of appeal to consider the wisdom or lack of wisdom of the Employer in designating any person as a step in the grievance process and without offering any guidance either to the Employer or to employee organizations as to what principles ought to guide the Employer in the designation of employees. The authority of the Employer to make a designation under s. 99(4) would then be robbed of all content. If this approach to designation had been intended by Parliament, it would have vested the authority to designate in the Board itself or at least it would have provided that the authority was to be exercised under the direction and guidance of the Board. The fact is that Parliament has declared in s. 99(4) that "the employer shall designate", without any qualifying phrases.
And, again, at pages K203 to K204, the Board discusses the language used in subparagraph 2(u)(v) of the Act (the predecessor section to paragraph 2(e) which, for the purposes of the issues herein, is identical) as follows:
Let us now turn to the language of s. 2(u)(v) itself. It has been suggested that, if the Employer's position on this provision were accepted, the Board would become no more than a rubber stamp. This construction ignores the wording of the clause. It does not place a person within the managerial genus simply because the Employer states that that person has been desig nated under s. 99(4). To fall within the clause, he must be a person who is required by reason of his duties and responsibili ties to deal formally with a grievance presented in accordance with the grievance process provided by the Act. Although the Act nowhere states in expressed term what is intended by the words "to deal formally", it seems to us that it must be regarded as equivalent to the giving of a "decision" under s. 99(4).
What I understand the Board to be saying is that the person concerned must have been given real or effective authority and if he has, that is an end of the matter. Since, in the case at bar, the Board directed its mind to that question and, on the evidence, answered the question affirmatively, that should have decided the issue before the Board.
The respondent, in its original objection letter dated January 17, 1979, alleged that the employ er's action in designating the 260 employees, was
"entirely capricious and without consistent rationale". This matter was also raised by the respondent before the Board with a view to estab lishing mala fides or evidence of abuse by the employer.
However, after reviewing the evidence, I can find no basis for a finding of mala fides nor do I think it can be said that either the majority or the dissenting member of the Board made a finding of mala fides. Indeed the dissenting member, as noted supra, after a very extensive review of the evidence concluded that the employer's decision was "logical, practical and consistent with the provisions and objects of the Act." The evidence before the Board of Mr. J. P. Connell, the Deputy Minister of Revenue Canada was to the effect that the employer had conducted an extensive survey of the Branch, including an analysis of its operational needs, its managerial needs in general and specifi cally a managerial capability to deal effectively in employee-union-management relationships with all unionized personnel at the many locations. He testified further that the decision was made to establish a new position, that of Customs Superin tendent at the PM-2 level, with clearly defined duties and responsibilities. The dissenting member of the Board, in discussing the duties of the PM-2's said (Case, Vol. XXII, pages 3348-3350):
5. The Summary of Duties, which prefaces the full position description, reads as follows:
Directs the activities of a staff engaged in the application of those Acts, regulations of this and other departments and agencies which govern the movement of goods and people entering or exiting Canada;
Performs various personnel management functions in the interest of optimum utilization of staff and their development and motivation;
Participates in the operational planning of the Customs Operations activity;
Develops and maintains good and effective working relation
ships with representatives of other departments, police forces
clientele and the general public, and performs other duties. Without in any way denigrating any of the other duties and responsibilities set out in the position description I would note the following:
supervising and coordinating the activities of a staff of approximately 10, and where required a minimal number of administrative support personnel
performs various personnel management functions in the interest of optimum utilization of staff and their development and motivation
administering the Departmental disciplinary process in the manner delegated to the Superintendent by the Deputy Minister
participating formally on behalf of Management in the griev ance process.
6. The decision of the employer was to establish a new position with a "national" position description. The functions performed by the personnel of the Field Operations Branch of Customs and Excise do not vary, materially, from one end of this country to the other. There are variations in functions between airports, marine terminals and highway truck terminals, etc., but the functions do not vary whether the terminal is located at Hali- fax, Montreal, Toronto or Vancouver. If the employer had "no regard to the varying organizational structure of the Field Operations Branch" and "the Employer's action would appear to be entirely capricious and without consistent rationale," as alleged by the bargaining agent in its letter dated January 17, 1979, it was encumbent upon the bargaining agent to at least endeavour to introduce evidence to that effect. It did not do so and I would add that, to have introduced this new position in only one region with a limited number of persons proposed, would have immediately raised an issue as to the bona fides of the employer.
7. Mr. Connell further testified that, pursuant to sub-section 7(4) of the Financial Administration Act and pursuant to section 5 of the Public Service Collective Agreements (Gener- al) Implementation Order he delegated much of his authority to these customs superintendents. In his opinion, it was only logical to hold the customs superintendents accountable for the decisions they made pursuant to those delegations of authority. One way to hold them accountable was for a customs superin tendent to answer a grievance against a decision he had made, i.e., as the first step in the grievance process. Mr. Connell regarded as irrelevant whether 50 grievances or none were filed.
After reviewing the evidence of other witnesses, the dissenting member stated at page 3354:
I submit that it must be apparent from all of the foregoing that the employer did more than simply "fulfill" some "technical requirements" set out in the Act and the Regulations. No little time and money has been expended in training and developing these customs superintendents as representatives of the employ er. The bargaining agent did argue that the employer simply assigned arbitrarily to employees, whose regular duties and responsibilities did not cause them to fall within the definition of a "person employed in a managerial or confidential capaci ty," the duty to deal with grievances. The bargaining agent did so, however, in face of evidence to the contrary.
I agree with the above quoted conclusions of dis senting Board member, D. G. Pyle, since they are, in my view, supported by the evidence. Insofar as the majority of the Board is concerned, I think it clear from their reasons that their conclusion was not based on a factual finding of mala fides. The Board was clearly of the view that it had jurisdic tion to require the employer to show that the proposed addition of designated employees was "reasonably justified" (Case, Vol. XXII, page 3342), and that it had authority to inquire into the employer's proposals (Vol. XXII, page 3345). Based on the evidence in this case, the Board was not so satisfied. I leave aside for a future case where mala fides is established on the evidence, the question as to whether or not such a factual situation would affect the result.
The majority of the Board as well as counsel for the respondent in his submissions to us relied on the decision of this Court in The Queen v. Profes sional Institute of the Public Service of Canada, [1980] 2 F.C. 295 (C.A.). In my view, that deci sion does not assist the respondent. In that case the employer had claimed that a particular employee came within paragraph (a) of the definition of "person employed in a managerial or confidential capacity" because he was said to be in a position confidential to a Chief Executive Officer of a part of the Public Service. The Court decided that the Board had jurisdiction to inquire, as a factual matter, into whether a person claimed to be within paragraph (a) was, in actual fact, a member of that class. That decision, in my view, has relevance only to employees said to fall within either para graphs (a) or (b) of the definition. It has no relevance to persons falling within classes (c) to (I) because the wording of the definition clearly empowers the Board to perform a fact-finding function with respect to those classes. In the case at bar, the Board did perform that function and found the facts required of it in paragraph 8 of the reasons at page 3318. Where it erred, in my view, is that it proceeded to conduct another inquiry which it was not authorized to conduct.
Finally, it was submitted by counsel for the Board that, in any event, decisions of labour rela tions tribunals protected by a privative clause such as section 100 of this Act [as am. by S.C. 1974-75- 76, c. 67, s. 29], can only be quashed by a review ing court when they are found to be "patently unreasonable".
I do not agree that the privative clause in the Public Service Staff Relations Act (section 100) applies here. I say this because this application is brought pursuant to section 28 of the Federal Court Act [R.S.C. 1970 (2nd Supp.), c. 10]. Under that section, this Court is given its review jurisdiction "Notwithstanding ... the provisions of any other Act ...". Accordingly, in my view, the Court has jurisdiction to review and set aside a decision where inter alla, the tribunal erred in law. It is my conclusion, for the reasons stated supra that the Board erred in law in this case by misin terpreting paragraph (e) of the definition of "per- son employed in a managerial or confidential capacity" in section 2 of the Act as giving it authority to, in effect, examine the quality of management's decision. Therefore, I do not think it necessary for the Court to address this problem which might have arisen had section 100 of the Act been applicable.
For all the above reasons, I would allow the section 28 application, set aside the Board's deci sion of May 4, 1983 and refer the matter back to the Board with a direction to designate on an individual basis those persons who are required by reason of their duties and responsibilities to deal formally on behalf of the employer with a griev ance presented in accordance with the grievance process provided for by the Public Service Staff Relations Act as persons employed in a manageri al or confidential capacity.
URIE J.: I agree. RYAN J.: I agree.
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