A-1336-84
Canadian Human Rights Commission (Appellant)
v.
Julie Dalton; Canadian Pacific Airlines Limited;
Brotherhood of Railway and Airline Clerks,
System Board of Adjustment No. 435 and Bianca
Peruzza [sic] (Respondents)
INDEXED AS: DALTON V. CANADIAN HUMAN RIGHTS COMMIS
SION (F.C.A.)
Court of Appeal, Urie, Mahoney and Ryan JJ.—
Toronto, December 3; Ottawa, December 16,
1985.
Human rights — Appeal from Trial Division decision
granting declaration and injunction — Collective agreement
originally determining seniority according to age when other
factors same — Subsequent amendment providing random
selection determining factor for employees hired thereafter —
Employee filing complaint that seniority ranking according to
age constituting discrimination — Employer, Union and com
plainant reaching settlement, approved by Commission, that
seniority list be revised according to amendment — Respon
dent Dalton receiving lower ranking — Trial Judge declaring
settlement invalid for denial of natural justice in not giving
Dalton notice and opportunity to be heard before Commission
approving — Appeal allowed — Dalton's rights affected by
settlement, not by Commission's approval — Commission's
function to determine whether settlement suitably compensat
ing victim and whether obviated prohibited discriminatory
practice — Canadian Human Rights Act, S.C. 1976-77, c. 33,
ss. 3(1) (as am. by S.C. 1980-81-82-83, c. 143, s. 2), 7(b),
9(1)(c) (as am. idem, s. 4), 10(a) (as am. idem, s. 5), (b), 38.
Labour relations — Complaint filed that determination of
seniority by age constituting discrimination contrary to
Canadian Human Rights Act — Employer, Union and com
plainant reaching settlement, approved by Commission, to
retroactively revise seniority by random selection —
Renegotiation of term in collective agreement prima facie
within authority of certified bargaining agent without refer
ence to employees possibly affected — S. 136.1 of Code
prescribing Union's obligation — Union not having interest
adverse to employee — Interested in amending collective
agreement to prevent prohibited ground of discrimination in
ordering of seniority — Impossible to identify in advance
employees adversely affected — Union acting fairly and in
good faith — Canada Labour Code, R.S.C. 1970, c. L-1, s.
136.1 (as am. by S.C. 1984, c. 39, s. 28).
Judicial review — Equitable remedies — Declarations —
Employer, Union and complainant reaching settlement,
approved by Commission, to retroactively revise seniority list
— Trial Judge finding denial of natural justice in denying
employee notice and opportunity to be heard before Human
Rights Commission approving settlement — Appeal allowed
— Settlement, not Commission's approval, decision affecting
employee's rights — Trial Judge erred in considering possible
consequences of failure to comply with terms of settlement in
prosecution under s. 46 of Act — Proceeding civil in nature —
Canadian Human Rights Act, S.C. 1976-77, c. 33, s. 46.
This is an appeal from a decision of the Trial Division. A
collective agreement provided that in certain circumstances,
seniority would be determined according to age. Subsequently,
it was amended so that seniority amongst employees hired
thereafter would be determined by random selection. A com
plaint was filed that the determination of seniority by age
constituted discrimination. The employer, the Union and the
employee reached a settlement, which was approved by the
Commission, whereby the seniority lists were revised according
to the amendment. The respondent, Dalton, received a lower
seniority rating. She sought a declaration that the Commis
sion's decision as it pertained to retroactive changes in the
seniority list was invalid, an injunction restraining revision of
the seniority list, and costs. The Trial Judge allowed Dalton's
action based on a conclusion that the rules of natural justice
required that the Commission give notice and an opportunity to
be heard to Dalton before approving a settlement affecting her
seniority. It was further held that because of the sanctions
prescribed by section 46 for failure to comply with the terms of
a settlement, the settlement must be strictly construed and, so
construed, did not authorize the proposed reordering of the
seniority list.
Held, the appeal should be allowed.
The Trial Judge erred in considering the fact that section 46
of the Canadian Human Rights Act makes non-compliance an
offence to be of major significance. The proceeding was a civil
action. The clear intention of the parties was established by
undisputed, admissible, extrinsic evidence. The seniority list
was to be revised according to the Union's proposal, which was
accepted by the employer and the employee, not according to
the terms of the settlement construed literally. Furthermore, it
is the employer and the Union who are rendered liable to
penalties, not third parties like the complainant and Dalton.
The Trial Judge also erred in holding that there was a denial
of natural justice in the Commission's failure to give Dalton an
opportunity to be heard before it approved the settlement. The
Commission's approval did not affect Dalton's seniority rights,
which were affected only by the settlement. In reaching its
decision it did not have to give her an opportunity to be heard.
The Commission's only function was to determine whether the
settlement made suitable provision to compensate the complai
nant, and whether the settlement would obviate the prohibited
discriminatory practice for the future.
The Union was entitled to negotiate the amendment without
giving Dalton the opportunity to participate in the negotiations.
The only exception to this prima facie right would arise if the
Union acted in a manner that was arbitrary, discriminatory or
in bad faith contrary to section 136.1 of the Canada Labour
Code. The cases referred to, where the Union could not in good
faith represent the employees, are distinguishable. In those
cases, the Union's interests were adverse to those of the
employee. Here the Union had no interest adverse to Dalton's.
It only sought to settle with the complainant and to amend the
collective agreement so that it did not continue to stipulate a
prohibited ground of discrimination. It was impossible to identi
fy, in advance, the employees or groups that would be advanta
geously or adversely affected. The Union had represented the
employees who might be adversely affected fairly and in good
faith.
CASES JUDICIALLY CONSIDERED
DISTINGUISHED:
Hoogendoorn v. Greening Metal Products and Screening
Equipment Company et al., [1968] S.C.R. 30; Appleton
v. Eastern Provincial Airways Ltd., [1984] 1 F.C. 367
(C.A.); Re Winnipeg Police Association et al. and City of
Winnipeg et al. (1980), 110 D.L.R. (3d) 196 (Man.
C.A.).
COUNSEL:
Russell G. Juriansz and J. R. Hendry for
appellant.
George A. Lane for respondent Julie Dalton.
Katharine F. Braid for respondent CP Air.
Donald W. Muldoon for respondent The
Brotherhood of Railway and Airline Clerks,
System Board of Adjustment No. 435.
APPEARANCE:
Bianca Perruzza on her own behalf.
SOLICITORS:
General Counsel, Canadian Human Rights
Commission, Ottawa, for appellant.
Keyser/Mason/Coleman/MacTavish & Lewis,
Mississauga, Ontario, for respondent Julie
Dalton. -
Canadian Pacific Law Department, Toronto,
for respondent CP Air.
P. Michael Bolton & Assoc., Vancouver, for
respondent The Brotherhood of Railway and
Airline Clerks, System Board of Adjustment
No. 435.
RESPONDENT ON HER OWN BEHALF:
Bianca Perruzza.
The following are the reasons for judgment
rendered in English by
MAHONEY J.: This is an appeal from a decision
of the Trial Division [[1985] 1 F.C. 37] which
granted declaratory and injunctive relief in an
action brought by the respondent, Julie Dalton, in
respect of an amendment to the seniority provi
sions of the collective agreement governing her
employment by the respondent, Canadian Pacific
Airlines Limited, hereinafter "CP Air". The
amendment had been agreed upon by CP Air and
the respondent, Brotherhood of Railway and Air
line Clerks, System Board of Adjustment No. 435,
hereinafter "the Union", and approved by the
appellant, hereinafter "the Commission", pursuant
to section 38 of the Canadian Human Rights Act,
S.C. 1976-77, c. 33, ensuing upon a complaint
initiated by the respondent, Bianca Perruzza, also
an employee of CP Air. The Union, an "employee
organization" within the terms of the Act, has at
all material times been the duly certified bargain
ing agent for the bargaining unit of which both
Julie Dalton and Bianca Perruzza are members.
The provision of the collective agreement in
issue is made necessary by the fact that, following
a training course, a group of new employees are
frequently hired on the same date. The relative
seniority of the members of each group must be
determined.
When Bianca Perruzza was hired on May 4,
1981, the collective agreement provided:
7.08 In the event that more than one employee in the same
seniority classification has the same seniority date, the
employee with the longer Company service will be considered
senior and in the event of equal Company service, the older
employee will be considered senior.
A provision to like effect had been contained in
previous collective agreements applicable both
before and after the relevant provisions of the
Canadian Human Rights Act came into force on
March 1, 1978. In October, 1982, by Agreement
22, the foregoing provision was maintained and the
following added to Article 7.08:
Employees who are hired after the signing of Agreement 22
who are in the same seniority classification and who have equal
Company service will have their seniority placement deter
mined by the process of random selection.
On February 10, 1983, Bianca Perruzza filed a
complaint with the Commission that the determi
nation of her seniority, and a consequent proposed
layoff, founded on that provision constituted dis
crimination contrary to the Act. The material
provisions of the Act [as am. by S.C. 1980-81-82-
83, c. 143, ss. 2, 4, 5] are:
3. (1) For all purposes of this Act, race, national or ethnic
origin, colour, religion, age, sex, marital status, family status,
disability and conviction for which a pardon has been granted
are prohibited grounds of discrimination.
7. It is a discriminatory practice, directly or indirectly
(b) in the course of employment, to differentiate adversely in
relation to an employee,
on a prohibited ground of discrimination.
9. (1) It is a discriminatory practice for an employee organi
zation on a prohibited ground of discrimination
(c) to limit, segregate, classify or otherwise act in relation to
an individual in a way that would
(i) deprive the individual of employment opportunities, or
(ii) limit employment opportunities or otherwise adversely
affect the status of the individual,
10. It is a discriminatory practice for an employer, employee
organization or organization of employers
(a) to establish or pursue a policy or practice, or
(b) to enter into an agreement affecting recruitment, refer
ral, hiring, promotion, training, apprenticeship, transfer or
any other matter relating to employment or prospective
employment,
that deprives or tends to deprive an individual or class of
individuals of any employment opportunities on a prohibited
ground of discrimination.
The Commission began an investigation of the
complaint. Prior to the appointment of a Human
Rights Tribunal, CP Air and the Union, together
with Bianca Perruzza, agreed upon the following
settlement:
1) BRAC shall prepare in consultation with the Canadian
Human Rights Commission's Western Regional Office a
revised seniority list based on a retroactive application of
Article 7.08 contained in Agreement No. 22, and present such
a revised list to CP Air for adoption.
2) cP Air shall adopt the revised seniority list mentioned in 1),
above.
3) In the event that the revision outlined in 1) and 2) above
results in Bianca Perruzza being assigned a higher seniority
rank than the one she currently holds, CP Air and BRAC shall
jointly share the cost of compensating her for wages lost by
reason of her earlier, lower seniority.
The futility of incorporating the entirety of Article
7.08, as it stood, in the settlement is obvious. Its
first paragraph prescribed a discriminatory prac
tice. The subsequent conduct of the Union, CP Air
and the Commission is consistent only with the
intention that the settlement amend Article 7.08
retroactively to the following effect:
In the event that one or more employee in the same seniority
classification has the same seniority date, the employee with
the longer Company service will be considered senior and those
who have equal Company service will have their seniority
placement determined by the process of random selection.
The settlement was referred to, and approved by,
the Commission pursuant to section 38 of the Act.
38. (1) When, at any stage after the filing of a complaint and
before the commencement of a hearing before a Human Rights
Tribunal in respect thereof, a settlement is agreed on by the
parties, the terms of the settlement shall be referred to the
Commission for approval or rejection.
(2) If the Commission approves or rejects the terms of a
settlement referred to in subsection (1), it shall so certify and
notify the parties.
46. (1) Every person is guilty of an offence who
(a) fails to comply with the terms of any settlement of a
complaint approved and certified under section 38;
(2) A person who is guilty of an offence under subsection (1)
is liable on summary conviction
(a) if the accused is an employer, an employer association or
an employee organization, to a fine not exceeding fifty
thousand dollars; or
(b) in any other case, to a fine not exceeding five thousand
dollars.
Julie Dalton, who had been ranked number
1227 on the seniority list, was reranked number
1230 as a result of the amendment. She had been
second in a group of 11 hired May 20, 1980;
random selection placed her fifth. She sued seek
ing (a) a declaration that the Commission's deci
sion or order as it pertained to retroactive changes
in the seniority list was invalid; (b) an injunction
restraining CP Air and the Union from revising
the existing seniority list or otherwise amending it
pursuant to the Board's decision or order and (c)
costs. It is material to note that the facts herein
are entirely established by an agreed statement of
facts. No defence was filed. There was no viva
voce evidence and no issue of credibility.
The learned Trial Judge reached a number of
conclusions, not all of which are attacked in this
appeal. It is, I think, important that this Court
make clear that it is expressing no opinion as to
those and, in particular, as to the conclusion that
the amendment to the collective agreement, if
effective at all, would have been effective to alter
positions on the seniority list established prior to
March 1, 1978, when the material provisions of
the Act came into force. Neither Julie Dalton nor
Bianca Perruzza is such a person. The issue may
lie to be resolved, perhaps in proceedings before a
different tribunal, should implementation of the
amendment indeed have that effect and a person
so affected complain.
The learned Trial Judge did conclude that:
1. the rules of natural justice and fairness require that the
Commission give notice and an opportunity to be heard to Julie
Dalton before approving a settlement affecting her seniority
position and those requirements are not avoided by the fact that
the Union is Julie Dalton's bargaining agent and is not required
by its constitution to seek ratification of collective agreements
by its members.
2. because of the offences and penalties prescribed by section
46 of the Act for failure to comply with the terms of a
settlement, approved and certified under section 38, the docu
ment of settlement is to be strictly construed and, so construed,
it did not authorize the proposed reordering of the seniority list.
In the result, CP Air and the Union were enjoined
from implementing the settlement; the settlement
was declared not to authorize the reordering of the
seniority list and, in so far as it was intended to
alter Julie Dalton's seniority rights, it was declared
invalid because of the denial of notice and the
opportunity to be heard.
On the hearing of the appeal, only Julie Dalton
opposed the appellant who attacked both the above
conclusions and requested that the appeal be
allowed and the action dismissed with costs. The
Union fully supported the appellant. CP Air took
no position on the merits, requesting only that, if
the appeal were allowed, it be given 14 days to give
effect to the new seniority list. Bianca Perruzza
was present in person but declined the opportunity
to make representations.
As to the learned Trial Judge's second conclu
sion, it was noted in the reasons for judgment that
"this argument did not form part of the plaintiff's
case". Julie Dalton did not attempt to sustain it
before us. The short answer is that the proceeding
before the learned Trial Judge was a civil action.
The clear intention of the parties to the settlement
was fully established by undisputed, admissible,
extrinsic evidence. Exhibit G to the agreed state
ment of facts, the Union's proposal which was
accepted by Bianca Perruzza and CP Air and
commended by its investigator to the Commission
for its approval, was as follows:
This is to advise that the Union proposes to retroactively revise
the seniority dates for all members whose seniority was deter-
mined by age. The dates will be re-established by random
selection.
However there is to be no retroactive effect for any member as
a result of such adjustment, with the exception of Ms. Bianca
Perruzza whose layoff occurred because of her age.
The Union agrees to share the cost incurred with CP Air and
trusts this will settle the complaint.
The seniority list was in fact to be reordered
according to that proposal, not according to the
terms of settlement construed literally. The
learned Trial Judge erred in concluding that an
appreciation of the possible consequences of a
literal construction of the settlement in a criminal
prosecution ensuing upon a failure to comply with
it was relevant to its proper construction for pur
poses of this action.
I turn now to the first conclusion. The situation
confronting CP Air and the Union after Bianca
Perruzza filed her complaint was that they had
notice that the collective agreement contained a
provision which patently called for a discriminato
ry practice not just as to Bianca Perruzza but all
employees whose seniority ranking had been deter
mined by age, at least since March 1, 1978. The
seniority list had to be reordered by a formula that
did not call for a discriminatory practice. What
ever the formula to be chosen it was certain that if
any employee's position on the list were improved
the position of at least one other employee would
be adversely affected.
Renegotiation of a term in a collective agree
ment is prima facie within the authority of the
certified bargaining agent without reference to
individual employees who may be affected by the
amendment. There is an exception. In the present
case, the exception would arise if, in respect of
employees it represents, the bargaining agent did
not, in fact, or could not in the circumstances be
seen to comply with the requirements of section
136.1 of the Canada Labour Code [R.S.C. 1970,
c. L-1 (as am. by S.C. 1984, c. 39, s. 28)].
136.1 A trade union or representative of a trade union that is
the bargaining agent for a bargaining unit shall not act in a
manner that is arbitrary, discriminatory or in bad faith in the
representation of any of the employees in the unit with respect
to their rights under the collective agreement that is applicable
to them.
A leading case on the subject is Hoogendoorn v.
Greening Metal Products and Screening Equip
ment Company et al., [1968] S.C.R. 30. The facts
and conclusion are sufficiently set out in the fol
lowing passage at page 39:
The arbitration proceeding was unnecessary as between the
union and the company. Both fully understood and agreed that
the collective agreement required Hoogendoorn to execute and
deliver to the company a proper authorization form for deduc
tion of the monthly union dues being paid by members of the
union. Both the company and the union wanted him to do so.
The arbitration proceeding was not necessary to determine that
Hoogendoorn was required so to do. Both knew he was ada
mant in his refusal. The proceeding was aimed at getting rid of
Hoogendoorn as an employee because of his refusal either to
join the union or pay the dues. It cannot be said that Hoogen-
doorn was being represented by the union in the arbitration
proceeding. The union actively took a position completely
adverse to Hoogendoorn. It wanted him dismissed.
A situation similarly dealing with a bargaining
agent representing a group of employees whose
interests were completely adverse to its own was
considered by this Court in Appleton v. Eastern
Provincial Airways Ltd., [1984] 1 F.C. 367
(C.A.). In the latter case, the proceeding was a
hearing by the Canada Labour Relations Board
into allegations of failure to bargain in good faith
because, inter alia, the employer sought to give
seniority preference to replacement employees
hired during a strike over those who had struck.
Both groups of employees were represented by the
same Union.
In Re Winnipeg Police Association et al. and
City of Winnipeg et al. (1980), 110 D.L.R. (3d)
196, the Manitoba Court of Appeal dealt with a
grievance under a three-stage process: first, con
sideration by the chief of police; second, consider
ation by the city commissioners and, finally,
formal arbitration. It saw a significant distinction
between the stages and, at page 210, said:
The rules of natural justice would require adequate notice
prior to an arbitration board hearing where the issue in dispute
focused upon the rights of a particular employee or employees.
That is the import of the majority judgments in Re Hoogen-
doorn .... It seems to me, however, that there is a fundamental
difference between an arbitration hearing and the meetings
which might precede it in an attempt to resolve the dispute
prior to arbitration.
In my view, steps 1 and 2 of the grievance procedure were
intended to be informal procedures, during which the employer
and the trade union will make an earnest attempt to resolve the
grievance and thus obviate the necessity of a formal arbitration
hearing. The process of settlement implicit in steps 1 and 2 of
the grievance procedure is a process of discussion, negotiation
and co-operation, rather than a judicial or quasi-judicial
procedure.
Since a grievance could be resolved at a stage prior
to arbitration with a result adverse to a particular
employee or group of employees, the purport of
that judgment would seem clearly nevertheless to
deny them separate representation in the negotia
tions between union and employer. The Union's
obligation to Julie Dalton here is to be found only
in section 136.1 of the Code.
The bargaining agent in each of the Hoogen-
doom and Appleton cases could not, in good faith,
represent a member or an identified group of
members before a tribunal in proceedings intended
to determine their rights and/or obligations. Its
own interests were, in each case, adverse to theirs.
That was not the case here. The Union had no
interest adverse to Julie Dalton's. It had an inter
est only to settle with Bianca Perruzza and to
amend the collective agreement so that the agree
ment did not continue to stipulate a prohibited
ground of discrimination in the ordering of seniori
ty. While it was almost a mathematical certainty
that some individual employees would be adversely
affected, and others advantageously so, as a result
of any amendment adopted, none were identifi
able, either individually or as groups, in advance.
It is simply not possible to say that the Union did
not, in fact, represent in good faith the employees
who might ultimately be adversely affected as a
result of its negotiation of a new seniority clause,
nor was it possible to say, in advance, that it could
not fairly represent them.
In any event, what was pleaded and what the
learned Trial Judge has held is that the denial of
natural justice lay in the Commission's failure to
give Julie Dalton an opportunity to be heard
before it approved the settlement, not in her being
left out of the negotiating process as between CP
Air and the Union. That decision is without foun
dation unless the Commission's approval of the
settlement was a decision, independent of the set
tlement, affecting Julie Dalton's rights. In my
view, it was not such a decision. Her rights were
affected by the settlement, not by the Commis
sion's approval of it.
Without attempting to define what consider
ations the Commission might, in another case,
properly take into account in deciding whether to
approve or reject a settlement, it seems to me that,
here, its only functions were to determine whether
the settlement made suitable provision to compen
sate the complainant, Bianca Perruzza, and wheth
er it would obviate the prohibited discriminatory
practice for the future. I do not understand natural
justice to afford Julie Dalton an opportunity to be
heard on either of those questions.
Again, the Trial Judge, in deciding that notice
and an opportunity to be heard ought to have been
afforded third parties affected by the settlement,
appears to have considered the fact that section 46
makes non-compliance an offence to be of major
significance. The significance escapes me. It is CP
Air and the Union, not third parties like Julie
Dalton, who are rendered liable to penalties.
In . summary, Julie Dalton's seniority rights,
which, for purposes of this appeal, I accept to be
proprietary in nature, were adversely affected as a
result of an amendment to the collective agree
ment governing her employment. Her bargaining
agent was entitled to negotiate the amendment
without affording her the opportunity to partici
pate in the negotiations. Those rights were not
affected by the action of the Commission approv
ing the settlement providing for the amendment of
the collective agreement which, in the present case,
merely entailed the Commission determining that
the settlement made provision for compliance with
the Canadian Human Rights Act. The Commis
sion's decision did not determine Julie Dalton's
rights or obligations and it was not, in reaching the
decision to approve the settlement, obliged to
afford her an opportunity to be heard.
The trial judgment awarded costs to Julie
Dalton. The Commission asked, in its memoran
dum, that the appeal be allowed and the action be
dismissed with costs. The question of costs was not
otherwise expressly addressed. The record discloses
that neither the Union nor Bianca Perruzza
appeared or were represented at trial.
I would allow the appeal with costs to the
Commission against Julie Dalton here and below if
demanded. I would further dismiss the action and
set aside the award of costs in the Trial Division.
URIE J.: I agree.
RYAN J.: I agree.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.