A-457-02
2003 FCA 259
Victoria Sveinson (Applicant)
v.
Attorney General of Canada (Respondent)
Indexed as: Sveinson v. Canada (Attorney General) (C.A.)
Court of Appeal, Létourneau, Evans and Sharlow JJ.A. --Ottawa, June 4 and 9, 2003.
Employment Insurance -- Umpire reversing Board of Referees, holding pay equity payment awarded CHRT should be allocated for E.I. purposes to earnings of year received, not years for which paid -- Judicial review by F.C.A. -- Application denied -- Umpire did not err in concluding payment was "pay adjustment" or "retroactive pay increase" within E.I. Regulations, s. 23(1)(b) -- Irrelevant that payment made in respect of specified pay period -- Irrelevant that payment made under CHRT remedial order -- Meaning of "pay adjustment", "retroactive pay increase" considered -- Principle E.I. legislation broadly interpreted in claimant's favour here inapplicable due to F.C.A. decision in Canada (Attorney General) v. Sveinson -- CHRA not precluding application of s. 23(1)(b) to pay equity payment -- Three-year limitation period in E.I. Act, s. 52(1) not inconsistent with CHRA.
Human Rights -- Allocation of pay equity payment ordered by CHRT for employment insurance purposes -- Whether terms "pay adjustment", "retroactive pay increase" applicable to CHRT remedial order where employer found in breach of CHRA -- Due to F.C.A. decision in Canada (Attorney General) v. Sveinson, no room for argument employment insurance legislation broadly interpreted to be consistent with CHRA equality value -- CHRA not precluding application of Employment Insurance Regulations, s. 23(1)(b) to pay equity payment -- No conflict between CHRA, application of s. 23(1)(b) to payment -- Wrong to say legislation not rectifying all indirect consequences of unlawful discrimination by employer is itself inconsistent with CHRA -- Tribunal award did not deal with employment insurance consequences of lump sum payment -- CHRA not precluding application of Employment Insurance Act, s. 52(1) limitation period as inconsistent with CHRA.
Construction of Statutes -- Whether pay equity payment ordered by Canadian Human Rights Tribunal was "pay adjustment", "retroactive pay increase" within Employment Insurance Regulations, s. 23(1)(b) -- Argument meaning correction of error, bargain over pay rates, rejected on ordinary meaning of words and because interpretation requiring addition of words to statute -- Due to F.C.A. decision in Canada (Attorney General) v. Sveinson, not arguable employment insurance legislation to be given broad interpretation to favour claimant, be consistent with CHRA equality values -- Conflict not existing between CHRA, application of Regulations, s. 23(1)(b) to payment at issue -- Not arguable legislation not rectifying all indirect consequences of employment discrimination is itself inconsistent with CHRA.
This was an application for judicial review of an Umpire's decision that a pay equity payment, received pursuant to a Canadian Human Rights Tribunal (CHRT) order, should be allocated for employment insurance purposes to applicant's earnings in the year that she received the payment rather than the years in respect of which it was paid. Reversing a decision of the Board of Referees, the Umpire upheld the decision of the Canada Employment Insurance Commission that the pay equity payment had not retroactively increased applicant's insurable earnings for claim periods in 1994, 1995, 1996, 1998 and 1999. As a consequence, she was not entitled to an upward adjustment in the amount of employment insurance benefits received in those years.
Held, the application should be dismissed.
The first issue was whether the Umpire erred in concluding that the pay equity payment was a "pay adjustment" or a "retroactive pay increase" within paragraph 23(1)(b) of the Employment Insurance Regulations, which allocates such earnings proportionately over the pay period in which they are paid. The Board concluded that the payment was "remuneration" within paragraph 23(1)(a) since it was paid in respect of a specified pay period. It must have been unaware of this Court's decision in Canada (Attorney General) v. Sveinson, [2002] 2 F.C. 205 (Sveinson I) in which it was held that a payment listed in paragraph 23(1)(b) falls under that paragraph even if made in respect of a specified pay period. The Board thus erred in law and its decision was subject to review on the correctness standard. The argument was made that the terms "pay adjustment" and "retroactive pay increase" are inapplicable to a CHRT remedial order where an employer has been found in breach of the Canadian Human Rights Act (CHRA). It was suggested that "pay adjustment" refers to an adjustment made to correct an error and that a "retroactive pay increase" results from a bargain over pay rates. These interpretations had, however, to be rejected since the ordinary meaning of the words was sufficiently broad to include pay equity payments and the interpretations proposed by counsel would require the addition of words to the text of the statute. Nor was Sveinson I distinguishable on its facts. In view of this Court's reasons for judgment in that case, there was no room for operation of the principle of interpretation that employment insurance legislation should be broadly interpreted so as to favour claimants and be consistent with the equality values enshrined in the CHRA.
A second issue was whether the CHRA precluded the application of paragraph 23(1)(b) to the pay equity payment. The Court was urged to find that the failure to allocate applicant's pay equity payment to the specific pay periods to which it related undermined the purpose of the CHRA: to place the underpaid workers in the same financial position they would have been in had not the Government breached CHRA, section 11. That submission could not be accepted as it was based on the false premise that a conflict exists between the CHRA and the application of paragraph 23(1)(b) of the Regulations to the payment here at issue. What counsel's argument came down to was that legislation that does not rectify all the indirect consequences of unlawful discrimination by an employer is itself inconsistent with the CHRA. That was not the kind of inconsistency that would require otherwise valid legislation to be rendered inoperative. The Tribunal award did not purport to deal with the employment insurance consequences of the lump sum payment.
The final issue was whether the CHRA precludes the application to this case of Employment Insurance Act, subsection 52(1), which permits the Commission to reconsider a claim for benefits within three years of payment of the benefits. On this point, the argument advanced was that the three-year limitation period in the subsection ought not apply as inconsistent with the CHRA. That argument had to be rejected, there being no conflict between section 52 and the CHRA.
statutes and regulations judicially
considered
Canadian Human Rights Act, R.S.C., 1985, c. H-6, s. 11.
| Employment Insurance Act, S.C. 1996, c. 23, s. 52. |
| Employment Insurance Regulations, SOR/96-332, s. 23 (as am. by SOR/97-31, s. 12; 97-310, s. 6). |
cases judicially considered
applied:
Canada (Attorney General) v. Sveinson, [2002] 2 F.C. 205; (2002), 281 N.R. 381 (C.A.).
referred to:
Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559; (2002), 212 D.L.R. (4th) 1; [2002] 5 W.W.R. 1; 100 B.C.L.R. (3d) 1; 18 C.P.R. (4th) 289; 93 C.R.R. (2d) 189; 287 N.R. 248.
APPLICATION for judicial review of an Umpire's decision (Sveinson (In re) 2002, CUB 54429) reversing the decision of a Board of Referees and holding that pay equity payments had not retroactively increased applicant's insurable earnings during certain claim periods. Application dismissed.
appearances:
David Yazbeck for applicant.
Julia Parker for respondent.
solicitors of record:
Raven, Allen, Cameron & Ballantyne, Ottawa, for applicant.
Deputy Attorney General of Canada for respondent.
The following are the reasons for judgment rendered in English by
[1]Evans J.A.: This is an application for judicial review by Victoria Sveinson to set aside a decision of an Umpire ([In re Sveinson] (2002), CUB 54429) holding that a pay equity payment, which she received in September 2000 pursuant to an order of the Canadian Human Rights Tribunal, should be allocated for employment insurance purposes to her earnings in the year that she received the payment, not the years in respect of which it was paid.
[2]Reversing a decision of a Board of Referees, dated October 25, 2001, the Umpire upheld the Canada Employment Insurance Commission's decision that Ms. Sveinson's pay equity payment had not retroactively increased her insurable earnings for claim periods in 1994, 1995, 1996, 1998 and 1999. Consequently, she was not entitled to an upward adjustment in the amount of employment insurance benefits that she had received in those years.
| Issue 1 Did the Umpire err in law in concluding that Ms. Sveinson's pay equity payment was a "pay adjustment" or a "retroactive pay increase" within the meaning of paragraph 23(1)(b) of the Employment Insurance Regulations? |
[3]The Employment Insurance Regulations, SOR/96-332, in force when Ms. Sveinson claimed that the pay equity payment increased her insurable earnings in the years to which it related were as follows [section 23 (as am. by SOR/97-31, s. 12; 97-310, s. 6)]:
23. (1) For the purposes of section 14 of the Act, insurable earnings shall be allocated in the following manner:
(a) remuneration, including statutory holiday pay, other than the remuneration referred to in paragraph (b), paid in respect of a pay period or that remains unpaid for the reasons described in subsection 2(2) of the Insurable Earnings and Collection of Premiums Regulations shall be allocated to that pay period; and
(b) overtime pay, shift premiums, pay adjustments, retroactive pay increases, bonuses, gratuities, accumulated sick leave credits, incentive payments, cost of living allowances, separation payments, wages in lieu of notice and any other remuneration including vacation pay not paid in respect of a pay period or that remains unpaid for the reasons described in subsection 2(2) of the Insurable Earnings and Collection of Premiums Regulations, shall be allocated proportionately over the pay period in which they are paid. [Underlining added.]
[4]Counsel's first point was that the Umpire ought not to have interfered with the Board of Referees' conclusion that the pay equity payment was "remuneration" within the meaning of paragraph 23(1)(a) and not a "pay adjustment" or "retroactive pay increase" within the meaning of paragraph 23(1)(b). Characterizing a payment for the purpose of the Regulations is a question of mixed law and fact that an umpire may not disturb on appeal, in the absence of an error in the interpretation of the provision, or an unreasonable application of it to the facts.
[5]In my opinion, the Board was of the view that the pay equity payment did not fall within paragraph 23(1)(b) because it was paid in respect of a specified pay period. It stated in its reasons:
. . . [paragraph 23](1)(b) refers to pay adjustments not paid in respect of a period. In the present case, the adjustments were paid for specific pay periods going back to 1985. Therefore, the Board finds that [paragraph] 23(1)(a) should apply.
[6]However, the Board was obviously unaware of the decision of this Court in Canada (Attorney General) v. Sveinson, [2002] 2 F.C. 205 (C.A.) (Sveinson I), which had been released only a few days before the Board made its decision. In Sveinson I, the Court held that a payment listed under paragraph 23(1)(b) falls under that paragraph whether or not it was made in respect of a specified pay period.
[7]Consequently, since the Board appears to have based its decision on a view of the law that was overtaken by Sveinson I, its error was one of law and therefore subject to review for correctness. Hence, the Umpire was entitled to review the Board's decision on this issue to determine if it was correct.
[8]Counsel's second point was that the Umpire was wrong in law to characterize Ms. Sveinson's pay equity payment as a "pay adjustment" or "retroactive pay increase". He argued that these terms do not apply to payments made pursuant to a remedial order of the Canadian Human Rights Tribunal that requires an employer to pay employees the difference between the wages that they had been paid in the years 1985-1998 and the wages paid in those years to comparator groups of men performing work of equal value, following a finding that the employer was in breach of the Canadian Human Rights Act, R.S.C., 1985, c. H-6 (CHRA).
[9]Counsel submitted that the words "pay adjustment" in paragraph 23(1)(b) refer only to an adjustment to an employee's wages made as a result of an error in calculating the amount because, for example, of a clerical error, fraud or misrepresentation, not a payment made by an employer pursuant to a tribunal order to remedy gender-based wage discrimination. Similarly, he argued, a "retroactive pay increase" is the result of a bargain between employers and employees over rates of pay.
[10]Because the ordinary meaning of the words "pay adjustment" and "retroactive pay increase" is broad enough to include pay equity payments, counsel's suggested interpretation would require the addition of words in the statute to exclude them. In my opinion, there is nothing in either the text or the purpose of the provision to warrant a narrow interpretation that would require the addition of words to the statutory text.
[11]Counsel's third point was that the Court's rationale for the interpretation of paragraph 23(1)(b) adopted in Sveinson I does not apply to the facts of this case, so that the pay equity payment should not be treated as a "pay adjustment" or a "retroactive pay increase" and allocated under paragraph 23(1)(b), but is properly treated as regular remuneration under paragraph 23(1)(a).
[12]Counsel argued that in Sveinson I the Court held that the specific payments listed in paragraph 23(1)(b) fall under that provision whether or not they relate to a specific pay period, in order to avoid requiring the Commission to determine whether the employer in fact made the payment with respect to a particular period. However, he submitted, the pay stubs issued with the pay equity payments clearly tied them to specific years in the period 1985-1998. Hence, the Commission would not have the potentially onerous administrative burden of investigating the employer's pay practices in order to determine the pay period to which the payment related.
[13]I do not agree. The Court's interpretation of the scope of paragraphs 23(1)(a) and (b) in Sveinson I was based principally on the statutory language of the relevant provisions. The policy rationale simply corroborated the conclusion to which the textual analysis pointed. It did not limit the scope of the clear holding that payments of the kind described in paragraph 23(1)(b) must be allocated to the time of receipt, regardless of whether they related to a specific pay period.
[14]Finally, I would add that, in view of the clarification in Sveinson I of the scope of paragraphs 23(1)(a) and (b), there is no room for the operation of the interpretive principles that employment insurance legislation should be interpreted broadly so as to favour claimants, and that legislation should be interpreted in a manner that is consistent with the equality values enshrined in the CHRA: compare Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, at paragraph 66.
| Issue 2 Does the CHRA preclude the application of paragraph 23(1)(b) to the pay equity payment? |
[15]Counsel submitted that, even if the money paid to Ms. Sveinson in 2000 was a "pay adjustment" that would ordinarily fall within paragraph 23(1)(b), the fact that it was paid pursuant to the Tribunal's order to remedy discrimination removed it from that paragraph. The argument was as follows.
[16]The payment to Ms. Sveinson was made pursuant to an order of the Canadian Human Rights Tribunal following a finding that she, along with thousands of other members of the federal public service, had been paid less than men performing work of equal value contrary to section 11 of the CHRA. The Tribunal's order, which was implemented by an agreement of the parties, was intended to ensure that the claimants received the non-discriminatory wages that they ought to have been paid. Not to allocate Ms. Sveinson's pay equity payment to the specific pay periods to which it related undermined the purpose of the CHRA, namely, to put those who had been unlawfully underpaid in the same financial position in which they would have been if the Government had not breached section 11 of the CHRA. In support of this argument, counsel for Ms. Sveinson submitted that, unless expressly overridden, human rights legislation prevails over other legislation that is inconsistent with it.
[17]Despite counsel's able submissions, I cannot accept this argument. In my opinion, it rests on the false premise that there is a conflict between the CHRA and the application of paragraph 23(1)(b) of the Employment Insurance Regulations to the pay equity payment made to Ms. Sveinson. There is certainly no obvious inconsistency between section 11, which prohibits discriminatory conduct by employers, and the provisions of the employment insurance legislation dealing with the calculation of insurable earnings. Counsel's argument amounts, in effect, to a claim that legislation that does not rectify all the indirect consequences of unlawful discrimination by an employer is itself inconsistent with the CHRA. In my opinion, this is not the kind of inconsistency that requires otherwise valid legislation to be rendered inoperative.
[18]Further, while the Tribunal's award was no doubt intended to make the successful pay equity claimants whole by requiring the employer, the Treasury Board, to make up the discriminatory shortfall in their wages, it did not purport to deal with the employment insurance consequences of the lump sum payment.
[19]Finally, I should note that counsel for the Canada Employment Insurance Commission submitted that neither the Board of Referees nor the Umpire had jurisdiction to consider the argument that paragraph 23(1)(b) could not be applied to defeat Ms. Sveinson's claim because it conflicted with the CHRA. This is a matter, counsel submitted, within the exclusive jurisdiction of the Canadian Human Rights Commission.
[20]For the purpose of this application, I have been prepared to decide the CHRA issue raised by Ms. Sveinson on its merits. Nonetheless, I should not be taken thereby to have expressed an opinion on whether the issue ought to have been pursued as a complaint to the Canadian Human Rights Commission, rather than as an appeal to a Board of Referees.
| Issue 3 Does the Canadian Human Rights Act preclude the application to this case of subsection 52(1) of the Employment Insurance Act? |
[21]Having rejected the argument that the pay equity payments should have been allocated to the pay periods to which they related, I strictly need not consider counsel's argument that the human rights origin of the pay equity payment requires the Commission to recalculate employment insurance benefits paid more than three years ago. However, since it is so closely connected with the issue concerning the CHRA and paragraph 23(1)(b) of the Regulations, it is appropriate to deal briefly with it here.
[22]The argument is that the three-year limitation period in subsection 52(1) of the Employment Insurance Act, S.C. 1996, c. 23, does not apply because it would be inconsistent with the CHRA. Subsection 52(1) provides as follows:
52. (1) Notwithstanding section 120, but subject to subsection (5), the Commission may reconsider a claim for benefits within 36 months after the benefits have been paid or would have been payable.
[23]As I have already noted, this is essentially the same argument as that advanced with respect to paragraph 23(1)(b). In my opinion, it, too, must fail for the same reason as the submission that the CHRA prevented Ms. Sveinson's pay equity payment from falling under paragraph 23(1)(b) of the Regulations. That is, there is no conflict between section 52 and the CHRA.
[24]For these reasons, I would dismiss the application for judicial review with costs.
Létourneau J.A.: I agree.
Sharlow J.A.: I agree.