A-160-04
2005 FCA 236
Ronald Brescia, Rosa Carroll, Debra Jolicoeur and Terrence Matson (Appellants)
v.
Her Majesty the Queen in right of Canada as represented by Treasury Board and The Canadian Grain Commission (Respondents)
Indexed as: Brescia v. Canada (Treasury Board) (F.C.A.)
Federal Court of Appeal, Desjardins, Nadon and Pelletier JJ.A.--Ottawa, March 8 and June 17, 2005.
Public Service -- Labour Relations -- Appeal from Federal Court's dismissal of judicial review of rejection of appellants' grievance against Canadian Grain Commission decision placing them on unpaid off-duty status -- Appellants placed on such status following Canadian Wheat Board decision not to ship grain by rail through Thunder Bay in winter 2000 -- Appellants called back to work on basis of alphabetical order -- Public Service Employment Act (PSEA), s. 29 dealing with lay-offs, but not off-duty status -- Here, Commission not acting under PSEA as appellants' employment not terminated -- Off-duty status not lay-off, recall to work not appointment -- As off-duty status outside reach of PSEA, merit principle not applicable -- Placing of employees on off-duty status without pay falling within Treasury Board's (and its delegates, such as Commission) powers in respect of personnel management pursuant to Financial Administration Act -- Appeal dismissed (Pelletier J.A. dissenting).
This was an appeal from a decision of the Federal Court dismissing the appellants' application for judicial review of the rejection of their grievance against the Canadian Grain Commission's decision to place them on "off-duty status" without pay.
The appellants, employees at the Commission's facility in Thunder Bay, were involved in the inspection and weighing of grain shipments as they are received into the terminals and as they are loaded out from the terminals onto ships. Because the St. Lawrence Seaway is closed for shipping during the winter months, the work available for the employees depends on the rail program that is announced by the Canadian Wheat Board. The Board decided not to ship grain by rail through Thunder Bay in the winter of 2000. As a result, the Commission placed 69 of its 89 operational non-seasonal indeterminate employees on "off-duty status," but the employees retained their status as employees. Concerning the return to work of these employees, the Commission rejected the reverse order of merit process and opted to call them back on the basis of alphabetical order.
The appellants argued that the respondents have no authority under the Financial Administration Act (FAA), the Public Service Employment Act (PSEA) or the Public Service Staff Relations Act (PSSRA) to unilaterally place full-time indeterminate employees on "off-duty status" without pay.
Held (Pelletier J.A. dissenting), the appeal should be dismissed.
Per Desjardins J.A.: The principal legislative authority for staffing in the Public Service is found in the PSEA and the Public Service Employment Regulations (PSE Regulations). Appointments are to be based on selection according to the merit principle which applies, inter alia, in the context of termination of employment (lay-off) due to lack of work. The merit principle does not apply where employment is terminated in the circumstances referred to in paragraph 11(2)(g.1) of the FAA. The PSE Regulations require lay-offs to be made in the reverse order of merit. The reverse order of merit does not apply when the services of all employees in similar positions of the same occupational group and level are no longer required. The merit principle, when it is excluded, is prescribed by statute.
The PSSRA sets out, inter alia, the framework for collective bargaining in the Public Service, but excludes several matters normally subject to bargaining in the private sector, such as lay-offs.
The FAA vests a number of general powers in the Treasury Board with respect to the organization and personnel management of the public service. In the case at bar, this authority has been delegated to the Commissioner of the Canadian Grain Commission. In functioning as "employer," as defined in the PSSRA, the Treasury Board may only exercise the authority given to it by Parliament under the FAA. That authority does not extend to those matters addressed in the PSEA.
The term "off-duty status" is found nowhere in the PSEA, PSSRA and FAA. Instead, what is found is section 29 of the PSEA, which deals with lay-off. In Attorney General of Canada v. Gray, Pratte J. stated that although the expression "lay-off" does not necessarily imply a termination of employment, a public servant cannot be said to be laid off if his employment has not been terminated. And in that same case, Heald J. noted that the generally accepted definition of "lay-off" when used as a labour term is "[t]emporary, prolonged or final separation from employment as a result of lack of work." In the case at bar, the Commission did not act under section 29 of the PSEA as the appellants' employment was not terminated. They remained at all times employees of the Commission. The merit principle found in the PSEA thus did not apply since the off-duty status is not contemplated in that Act. Off-duty status is not a lay-off under the PSEA and the recall does not constitute an appointment.
The wide powers conferred on the Treasury Board and its delegates under paragraphs 7(1)(e) and 11(2)(a) of the FAA and clauses 6.01 and 25.01 of the applicable collective agreement are grants of authority which allowed the Commission to place the appellants on an off-duty status without pay. Specifically, the Treasury Board under paragraph 7(1)(e) is given authority over "personnel management in the public service of Canada, including the determination of the terms and conditions of employment of persons employed," and under paragraph 11(2)(d), it may determine and regulate the pay, the hours of work and leave, and any matters related thereto (such as, for example, the procedure followed for the release and the recall of employees in the case at bar).
Per Nadon J.A. (concurring): "Off-duty status" is a temporary lay-off that does not constitute a "lay-off" within the meaning of section 29 of the PSEA. As a result, the power to place employees on "off-duty status" falls within the powers given to Treasury Board in respect of personnel management. There was no legal basis for concluding that the order in which the appellants were recalled to work was subject to the merit principle. Because "off-duty status" is outside the reach of the PSEA, the provisions of that Act could not be relied on to support the proposition that the recall of employees is subject to the merit principle.
Per Pelletier J.A. (dissenting): The placing of employees on off-duty status does not comply with the PSE Regulations. A careful reading of subsections 29(1) and (2) of the PSEA leads to the conclusion that while cessation of employment is a consequence of lay-off, it is not a condition of lay-off. Putting employees on no-work no-pay (i.e. off-duty) status would be treated as a lay-off in any other work environment. Cessation of employment flows from subsection 29(2) once there has been a lay-off. The operation of this subsection cannot be averted by purporting to continue a laid-off employee's employment.
statutes and regulations judicially
considered
Canada Grain Act, R.S.C., 1985, c. G-10, ss. 10, 13.
| Financial Administration Act, R.S.C., 1985, c. F-11, ss. 7 (as am. by S.C. 1991, c. 24, ss. 2, 49(E); 1998, c. 14, s. 103(F)), 8, 9 (as am. by S.C. 1991, c. 24, s. 3), 10 (as am. idem, s. 50(F); 1996, c. 18, s. 4), 11 (as am. by R.S.C., 1985 (1st Supp.), c. 9, s. 22; S.C. 1992, c. 54, s. 81; 1995, c. 44, s. 51; 1996, c. 18, s. 5; 1999, c. 31, s. 101(F)), 12 (as am. by S.C. 1996, c. 18, s. 6), 13 (as am. by S.C. 1991, c. 24, s. 50(F)). |
| Public Service Employment Act, R.S.C., 1985, c. P-33, ss. 2(1) "Public Service", 5 (as am. by S.C. 1992, c. 54, s. 4), 10 (as am. idem, s. 10), 17(4)(a),(b),(c),(d), 21 (as am. idem, s. 16; 1996, c. 18, s. 15), 25, 28 (as am. by S.C. 1992, c. 54, s. 18), 29 (as am. idem, s. 19; 1995, c. 17, s. 8; 1996, c. 18, s. 16), 30 (as am. by S.C. 1992, c. 54, s. 20), 34.1 to 34.6 (as enacted idem, s. 22). |
| Public Service Employment Regulations, 1993, SOR/93-286, s. 34(1) (as am. by SOR/97-142, s. 15(F); 97-352, s. 10(E)), (3) (as am. by SOR/97-142, s. 10). |
| Public Service Staff Relations Act, R.S.C., 1985, c. P-35, ss. 2(1) "employer", 7, 57(2), 69(3) (as am. by S.C. 1992, c. 54, s. 57), 87(3) (as am. idem, s. 67), 91, Sch. I, II. |
cases judicially considered
considered:
P.S.A.C. v. Canada (Canadian Grain Commission) (1986), 5 F.T.R. 51 (F.C.T.D.) (QL); Attorney General of Canada v. Gray, [1978] 1 F.C. 808; (1977), 18 N.R. 393 (C.A.).
referred to:
Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247; (2003), 257 N.B.R. (2d) 207; 223 D.L.R. (4th) 577; 48 Admin. L.R. (3d) 33; 31 C.P.C. (5th) 1; 302 N.R. 1; 2003 SCC 20; Housen v. Nikolaisen, [2002] 2 S.C.R. 235; (2002), 211 D.L.R. (4th) 577; [2002] 7 W.W.R. 1; 219 Sask. R. 1; 10 C.C.L.T. (3d) 157; 30 M.P.L.R. (3d) 1; 286 N.R. 1; 2002 SCC 33; Lavoie v. Canada, [2000] 1 F.C. 3; (1999), 174 D.L.R. (4th) 588; 64 C.R.R. (2d) 189 (C.A.); Gingras v. Canada, [1994] 2 F.C. 734; (1994), 113 D.L.R. (4th) 295; 3 C.C.P.B. 194; 165 N.R. 101 (C.A.); Canada (Attorney General) v. Tremblay (1996), 208 N.R. 56 (F.C.A.); Atomic Energy of Canada Ltd. v. Jindal (1998), 229 N.R. 212 (F.C.A.); Tower v. M.N.R., [2004] 1 F.C.R. 183; (2003), 231 D.L.R. (4th) 318; [2003] 4 C.T.C. 263; 2003 FCA 307.
authors cited
Canada. Treasury Board Secretariat. Agreement between the Treasury Board and the Public Service Alliance of Canada. Group: Technical Services, Expiry Date: 21 June 2007.
Caron, Renée. Employment Law in the Federal Public Service, looseleaf. Aurora: Ont.: Canada Law Book, 2001.
APPEAL from a decision of the Federal Court ((2004), 247 F.T.R. 49; 2004 FC 277) dismissing the appellants' application for judicial review of the rejection of their grievance against the Canadian Grain Commission's decision to place them on off-duty status without pay. Appeal dismissed, Pelletier J.A. dissenting.
appearances:
Andrew J. Raven for appellants.
Richard E. Fader for respondents.
solicitors of record:
Raven, Allen, Cameron, Ballantyne & Yazbeck LLP, Ottawa, for appellants.
Deputy Attorney General of Canada for respondents.
The following are the reasons for judgment rendered in English by
[1]Desjardins J.A.: The appellants represent approximately 75 percent of the full-time operational employees at the Canadian Grain Commission (the Commission) facility in Thunder Bay. They filed grievances, under section 91 of the Public Service Staff Relations Act, R.S.C., 1985, c. P-35 (the PSSRA), challenging the decision of the Commission to place them and their co-workers, without the employees' consent, on "off-duty status" without pay, for a period of up to three months, beginning January 10, 2000. They request that all monies and time lost during the "off-duty" period be reinstated to them.
[2]The Commission is the federal department responsible for establishing and maintaining standards of quality for Canadian grain as well as regulating grain handling in Canada, to ensure a dependable commodity for domestic and export markets (Canada Grain Act, R.S.C., 1985, c. G-10, section 13).
[3]During the relevant time period, the Commission's Thunder Bay facility employed 105 full-time permanent, indeterminate, non-seasonal employees, of which 89 were operational employees.
[4]The tenure of employees of the Commission is in keeping with the legislative scheme governing federal public service employment. It covers indeterminate non-seasonal employees who are permanent full-time indeterminate employees employed continuously throughout the year. Among them are those who were placed on "off-duty status." The Commission also hires indeterminate seasonal employees who are permanent full-time indeterminate employees for the dates only on which the St. Lawrence Seaway is open. The Commission also hires term employees to fill in where there are increased volumes of grain being shipped through Thunder Bay.
[5]The Commission employees are involved in the inspection and weighing of grain shipments as they are received into the terminals and as they are loaded out from the terminals onto ships. In addition, employees check shipments for infestation, manage the documentation of grain shipments and conduct audits of terminal stocks.
[6]The St. Lawrence Seaway is closed for shipping in winter months (from late December to late March). As a result, work volume decreases. The work available depends on the rail program that is announced by the Canadian Wheat Board.
[7]In the fall of 1999, the Canadian Wheat Board decided not to ship grain by rail through Thunder Bay in the winter of 2000. The decision was communicated to the Commission on December 6, 1999. Effective January 10, 2000, the Commission placed 69 of its 89 operational non-seasonal indeterminate employees on "off-duty status," with an estimated return date of on or before April 3, 2000. The stated reasons for this action are found in a letter dated December 21, 1999, from J.A. Robertson, Regional Director, Industry Services, Thunder Bay, to the appellants. The letter reads (A.B., Vol. II, page 467):
Due to reduced volumes of grain expected through the port during the next three months, it has become necessary to place some employees on off-duty status. As a result of this decision, you will be placed on off-duty status beginning January 10, 2000. You will be recalled to work on or before April 3, 2000. It may be possible to provide you with some employment during this period depending on operational requirements, training and our ability to develop projects. We will endeavor to give you as much notice of recall as possible.
If you wish to utilize earned vacation or LLOT credits, you may do so, delaying the start date of your off-duty period. You should contact your supervisor as soon as possible in this regard to ensure that the Record of Employment can be completed accurately. We must know by December 31, 1999 if you plan on using leave to delay the start of the off-duty period in order to make the necessary adjustments to the pay cheque for the period of January 6 to 19. Your Record of Employment will be sent to the HRDC office unless arrangements are made with the personnel unit.
Due to the extent of the work volume reduction this winter, there are no feasible alternatives to off-duty status. We will continue to try and develop projects and reasonable training initiatives to reduce the impact of the off-duty period. If you have questions or require further clarification on the above, please contact the undersigned at 626-1400. [Emphasis in original.]
[8]The decision was taken after consultation by the Director, Industry Services, with the Commission in Winnipeg, Manitoba, who acted pursuant to delegated authority under the Financial Administration Act, R.S.C., 1985 c. F-11 (the FAA). She describes "off-duty status" as follows in her affidavit (A.B., Vol. II, page 320, at paragraph 6):
It is my understanding that off-duty status is a no-work, no-pay situation as contemplated in the collective agreements covering the affected employees. The employment relationship remains the same. Employees continue to be employed by the employer but are temporarily allocated to be not at work.
The employees were therefore "to be not at work." They were unpaid but retained their status as employees.
[9]The Commission contemplated the possibility of implementing the "off-duty status" program using the reverse order of merit (ROM) process but rejected it. The Commission's Regional Director (Thunder Bay), Jack Robertson, explained (A.B., Vol. II, page 624):
I would like to avoid going in to a ROM process as much as possible. We don't really have the time to deal with this, and I anticipate that we might have to develop one as a result of going ahead with Program Review. I would prefer to do such a thing only once, and the obvious time to do it would be after we identify the number of positions affected by program review.
[10]The temporary "off-duty status" without pay for the 69 indeterminate employees was implemented in the following manner:
- Within a couple of weeks following their "off-duty status", certain employees were called back to work for one- or two-week blocks;
- Employees were called back on the basis of alphabe-tical order;
- If an employee was not present to receive the call, the next name on the alphabetical list of employees would be contacted;
- Employees were telephoned on the Thursday or Friday preceding the Monday on which they were requested to return to work;
- Employees who had opted for a leave with income averaging to lessen the effect of the "off-duty status" were not telephoned for this work.
[11]All employees were returned to work by March 13, 2000.
[12]The consequences to the 69 indeterminate employees placed on "off-duty status" during the relevant period included the following situations:
- Unless they chose to use accumulated leave credits, the employees did not receive any income during that period;
- The employees did not accrue sick leave or annual leave benefits unless they worked and were paid for a period of at least 10 days in a month. They were not given any guarantee to that 10-day period;
- The employees were required to make payments on their share of the monthly rate for the Public Service Superannuation based on deemed salary for the first three months. Although Canada Pension Plan contributions were not required, it was acknowledged by the Commission that placements of an employee on "off-duty status" could impact on the amount of eventual benefits;
- Employees on "off-duty status" were required to pay their share for coverage of Supplementary Death Benefits in order to maintain coverage. They were required to pay their share of Disability Insurance. They would only continue to be covered under the Public Service Health Care Plan if they continued to pay the employee premiums for the first three months. If, however, "off-duty status" extended past three months, employees would be responsible for the employer's contribution as well.
[13]The appellants' grievances were eventually rejected. The Chief Commissioner, who represented the final level of their grievances, indicated in his letter dated June 18, 2002 (A.B., Vol. II, page 668):
This is in response at the final level to your grievance received February 3, 2000. Specifically your grievance states "I grieve abuse of authority on the part of the CGC in placing me on off-duty (off-pay-TIE whatever the terms at the time) as an indeterminate full-time federal employee. I have an agreement with the Treasury board and the Public Service Commission. There are otherwise designated employees, seasonal or terms for this purpose."
Off-duty status was instituted as a result of a temporary lack of work. Article 25.01 of the Technical Services collective agreement specifies that ". . . scheduled hours of work shall not be construed as guaranteeing the employee minimum or maximum hours of work."
Managing work or lack of work does not constitute abuse of authority. Your grievance is therefore denied and your corrective action "all monies and/or lost time be reinstated to me for the period of off-duty" is not granted.
[14]In a further letter of June 28, 2002, the Chief Commissioner explained (A.B., Vol. II, page 672) that the Commission's authority to place employees on "off-duty status" was derived from paragraphs 7(1)(a),(b) and (e) and paragraphs 11(2)(a) and (d) of the Financial Administration Act and the decision of Joyal J. in P.S.A.C. v. Canada (Canadian Grain Commission) (1986), 5 F.T.R. 51 (F.C.T.D.) (PSAC; FCTD).
[15]The appellants sought judicial review of the decision of the Chief Commissioner. Their applications were dismissed by the Federal Court (Brescia v. Canada (Treasury Board) (2004), 247 F.T.R. 49) for reasons identical to those given by the Chief Commissioner.
[16]Kelen J. at paragraphs 30-31 of his reasons, cited at length Joyal J.'s 1986 decision, including Joyal J.'s paragraphs 50, 53 and 71:
. . . I would find no difficulty in concluding that the general authority of the Treasury Board to manage personnel as contained in sections 5 and 7 of the Financial Administration Act includes the authority to place certain employees in the circumstances described herein on off-pay status.
. . .
I must therefore endorse the principle that the employer in its management functions may do that which is not specifically or by inference prohibited by Statute. Certain it is that the process of "off-pay status" does not do violence to either common sense or to the spirit and intent of the public statutes affecting public servants. Particularly, would the scheme appear consonant with the exercise of the general power attributed to Treasury Board in paragraph 7(1)(i) of the Financial Administration Act "to provide for such other matters . . . as the Treasury Board considers necessary for effective personnel management in the public service."
. . .
I must conclude that the scheme of "off-pay status" comes within the legislative field of authority conferred on the Treasury Board under the Financial Administration Act. I further conclude that the scheme is not in its essence a lay-off pursuant to section 29 of the Public Service Employment Act. I find also that in the absence of any prohibitory provision in the collective agreement, the scheme is not by necessary implications contrary to its terms and conditions or of a nature to do violence to the collective agreement's purposes and objects. I further find that the off-pay scheme strikes a proper balance between statutory provisions on the one hand and contractual provisions on the other, neither of them being offended by the scheme. I conclude that management's discretionary initiative to cope with short-term staff surplus or work shortage in the way intended has been exercized in a lawful manner.
[17]Kelen J., at paragraph 40 of his reasons, also relied on clauses 6.01 and 25.01 of the Agreement between the Treasury Board and the Public Service Alliance of Canada. Group: Technical Services which the Chief Commissioner had also relied on. These clauses read thus:
ARTICLE 6
MANAGERIAL RESPONSIBILITIES
6.01 Except to the extent provided herein, this agreement in no way restricts the authority of those charged with managerial responsibilities in the Public Service.
. . .
ARTICLE 25
HOURS OF WORK
. . .
25.01 An employee's scheduled hours of work shall not be construed as guaranteeing the employee minimum or maximum hours of work.
[18]The appellants appeal this decision of the Federal Court. They say that the respondents have no authority under the FAA, the Public Service Employment Act, R.S.C., 1985, c. P-33 (the PSEA) or the PSSRA to unilaterally place full-time indeterminate employees on "off-duty status" without pay.
[19]The appellants submit that the Treasury Board, or the Commission acting under delegated authority, must manage its workforce in a manner consistent with three separate Acts of Parliament, the FAA, the PSSRA and the PSEA. They refer to section 10 of the Canada Grain Act, which provides that the employees of the Commission shall be appointed in a manner authorized by law. They say that there are no provisions in the legislative scheme which contemplate the right to place employees on "off-duty status" without pay. Nowhere in these statutes or related regulations is "off-duty status" or an equivalent term defined or ever used. They submit that, if the lawful authority to "temporarily allocate employees to be not at work" exists at all, it must arise under this group of legislation by necessary implication and in a manner consistent with the general principles governing employment in the federal public service.
[20]The appellants further say that there is no statutory authority or other authority which supports the decision of the Commission to temporarily lay off employees without pay during periods of temporary shortage of work. If that authority resides anywhere, it must be found by implication in the governing provisions of the PSEA and the reverse order of merit provisions specified in the Public Service Employment Regulations, 1993, SOR/93-286 (the PSE Regulation). These provisions, however, relate to lay off situations which call for permanent separation of employment. There is, they submit, no mechanism in or under the PSEA which authorizes temporary lay-off.
The applicable standard of review
[21]The appellants and the respondents agree that the proper standard of review of the Chief Commissioner's decision is correctness. This matter, they say, is jurisdictional in nature. It involves a matter of statutory interpretation over which the Federal Court has the expertise (Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247). The decision of the motions Judge is also to be reviewed by this Court on the standard of correctness (Housen v. Nikolaisen, [2002] 2 S.C.R. 235, at paragraph 8).
ANALYSIS
Relevant statutory provisions
[22]The three key statutes which govern the present case are the FAA, the PSSRA and the PSEA, which were adopted in 1967. These three statutes are described in detail in a well-documented book by Renée Caron entitled Employment Law in the Federal Public Service (looseleaf, Aurora (Ont.): Canada Law Book, 2001). I shall use this book generously as I proceed with a global view of the relevant provisions.
The PSEA
[23]The principal legislative authority for staffing in the Public Service is found in the PSEA and the PSE Regulations.
[24]The term "Public Service" is defined in the PSEA [subsection 2(1)] as having the same meaning as in the PSSRA. The defined term "Public Service" is to be distinguished from the words "public service." The PSEA applies to that portion of the federal public service coming under Part I of Schedule I of the PSSRA to which the Treasury Board is the employer and also to that portion of the public service coming under Part II of Schedule I of the PSSRA, which comprises a list of enumerated separate employees (see Lavoie v. Canada, [2000] 1 F.C. 3 (C.A.), note 21; Gingras v. Canada, [1994] 2 F.C. 734 (C.A.), at page 753).
[25]The PSEA provides for the establishment of the Public Service Commission, whose main duty is to appoint or provide for the appointment of qualified persons to or within the Public Service in accordance with the provisions and principles of the PSEA (section 5 [as am. by S.C. 1992, c. 54, s. 4]).
[26]Appointments are to be based on selection according to merit, as determined by the Public Service Commission. The merit principle applies at the hiring stage (section 10 [as am. by S.C. 1992, c. 54, s. 10] of the PSEA), in the context of competitions for positions within the Public Service (section 21 [as am. idem, s. 16; 1996, s. 18, s. 15] of the PSEA) and in the context of termination of employment (lay-off) due to lack of work, the discontinuation of a function or the transfer of work or a function outside the Public Service (section 29 [as am. by S.C. 1992, c. 54, s. 19; 1995, c. 17, s. 8; 1996, c. 18, s. 16] of the PSEA and subsection 34(1) [as am. by SOR/97-142, s. 15(F); 97-352, s. 10(E)] of the PSE Regulations). It does not apply where employment is terminated in the circumstances referred to in paragraph 11(2)(g.1) [as am. by S.C. 1996, c. 18, s. 5] of the FAA.
[27]Lay-off is therefore a means of dealing with an employee whose services are no longer required because of lack of work (subsection 29(1) of the PSEA). Lay-off means, however, specifically the cessation of employment (subsection 29(2) of the PSEA).
[28]Section 29 reads thus:
29. (1) Where the services of an employee are no longer required by reason of lack of work, the discontinuance of a function or the transfer of work or a function outside the Public Service, otherwise than where the employment of the employee is terminated in the circumstances referred to in paragraph 11(2)(g.1) of the Financial Administration Act, the deputy head, in accordance with the regulations of the Commission, may lay off the employee.
. . .
(2) An employee ceases to be an employee when the employee is laid off pursuant to subsection (1).
[29]Subsection 34(1) of the PSE Regulations requires lay-offs to be made in the reverse order of merit. It provides the following:
Lay-offs
34. (1) Where the services of one or more employees of a part of the organization are no longer required by reason of lack of work, the discontinuance of a function or the transfer of work or a function outside the Public Service, the appropriate deputy head, subject to subsection (2), shall assess the merit of the employees employed in similar positions of the same occupational group and level in that part of the organization, and identify the employees who may be laid off in reverse order of merit, beginning with the least meritorious, and may declare those employees to be surplus employees.
. . .
[30]The reverse order of merit does not apply, as provided in subsection 34(3) [as am. by SOR/97-142, s. 10], when the services of all employees in similar positions of the same occupational group and level are no longer required:
34. . . .
(3) Subsections (1), (1.1) and (2) do not apply where the services of all employees employed in similar positions of the same occupational group and level in the same part of the organization are no longer required by reason of lack of work, the discontinuance of a function or the transfer of work or a function outside the Public Service.
[31]The PSEA contains other provisions governing the manner in which employees may be temporarily or permanently separated from employment in the public service. For example, the PSEA provides for the termination of an employee for cause during a probationary period (section 28 [as am. by S.C. 1992, c. 54, s. 18]); at the end of a term appointment (section 25); and under a leave of absence from the public service (section 30 [as am. idem, s. 20]).
[32]The merit principle, when it is excluded, is prescribed by statute (subsections 21(5) and 34.6(1) [as enacted idem, s. 22] of the PSEA (deployment)). Moreover, when priority is given, it is also specified by statute (see paragraphs 17(4)(a) to (d)).
[33]The Public Service Commission does not possess the power to make deployments (Part III.I [sections 34.1 to 34.6 (as enacted idem)] of the PSEA) nor the power to establish standards of discipline in the public service. Those powers belong to the Treasury Board (paragraphs 11(2)(f) [as am. by S.C. 1992, c. 54, s. 81] and subsection 11(4) [as am. idem] of the FAA).
The PSSRA
[34]The PSSRA sets out, among other things, the framework for collective bargaining in the Public Service. It provides a process of certification of bargaining agents, negotiation of collective agreements, and processes for enforcement of collective agreements through grievance and adjudication. The PSSRA excludes several matters normally subject to bargaining in the private sector: appointments, promotion, demotion, transfer, lay-off, superannuation, workers' compensation and classification (section 7 and subsection 57(2) of the Act).
[35]Paragraph 57(2)(b) of the PSSRA prohibits the alteration or elimination in any collective agreement of any term or condition of employment "that has been or may be established" (my emphasis) pursuant to certain Acts of Parliament enumerated in Schedule II. The PSEA is named in Schedule II.
[36]Subsection 57(2) reads:
57. . . .
(2) No collective agreement shall provide, directly or indirectly, for the alteration or elimination of any existing term or condition of employment or the establishment of any new term or condition of employment,
(a) the alteration or elimination or the establishment of which would require or have the effect of requiring the enactment or amendment of any legislation by Parliament, except for the purpose of appropriating moneys required for its implementation; or
(b) that has been or may be established pursuant to any Act specified in Schedule II. [My emphasis.]
[37]Similarly, arbitral awards and conciliatory reports may not include any of those matters which are excluded from collective bargaining (subsections 69(3) [as am. by S.C. 1992, c. 54, s. 57] and 87(3) [as am. idem, s. 67] of the PSSRA.)
[38]Where the dispute resolution mechanism for concluding a collective agreement is by way of binding arbitration, paragraph 69(3)(b) [as am. idem, s. 57] of the PSSRA provides important exclusions:
69. . . .
(3) No arbitral award shall deal with
. . .
(b) standards, procedures or processes governing the appointment, appraisal, promotion, demotion, deployment, lay-off or termination of employment, other than by way of disciplinary action, of employees; [My emphasis.]
[39]Where the dispute resolution mechanism for concluding a collective agreement is conciliation, subsection 87(3) of the PSSRA provides the same category of exclusions:
87. . . .
(3) No report of a conciliation board shall contain any recommendation concerning the standards, procedures or processes governing the appointment, appraisal, promotion, demotion, deployment, lay-off or termination of employment, other than by way of disciplinary action, of employees. [My emphasis.]
[40]The FAA establishes the Treasury Board's authority to act for the Queen's Privy Council for Canada on matters relating to the financial management of the government as well as its public service. Sections 7 to 11 [ss. 7 (as am. by S.C. 1991, c. 24, ss. 2, 49(E); 1998, c. 14, s. 103(F)), 9 (as am. by S.C. 1991, c. 24, s. 3), 10 (as am. idem, s. 50(F); 1996, c. 18, s. 4), 11 (as am. by R.S.C., 1985 (1st Supp.), c. 9, s. 22; S.C. 1992, c. 54, s. 81; 1995, c. 44, s. 51; 1996, c. 18, s. 5; 1999, c. 31, s. 101(F))] of the FAA vest a number of general powers in the Treasury Board with respect to the organization and personnel management of the public service. This authority may be delegated by Treasury Board to the deputy head of a department--the Commissioner of the Canadian Grain Commission in the case at bar.
[41]The provisions of subsection 7(1) of the FAA provide, inter alia, that:
7. (1) The Treasury Board may act for the Queen's Privy Council for Canada on all matters relating to
. . .
(b) the organization of the public service of Canada or any portion thereof, and the determination and control of establishments therein;
. . .
(e) personnel management in the public service of Canada, including the determination of the terms and conditions of employment of persons employed therein; [My emphasis.]
[42]The powers and functions of the Treasury Board are further specified in section 11 of the FAA. It should be noted first that the term "public service" is thus defined for the purposes of sections 11, 12 [as am. by S.C. 1996, c. 18, s. 6] and 13 [as am. by S.C. 1991, c. 24, s. 50(F)] of the FAA:
11. (1) In this section and sections 12 and 13,
. . .
"public service" has the meaning given the expression "Public Service" in the Public Service Staff Relations Act and includes any portion of the public service of Canada designated by the Governor in Council as part of the public service for the purposes of this section and sections 12 and 13; [My emphasis.]
[43]Subsection 11(2) of the FAA provides:
11. . . .
(2) Subject to the provisions of any enactment respecting the powers and functions of a separate employer but notwithstanding any other provision contained in any enactment, the Treasury Board may, in the exercise of its responsibilities in relation to personnel management including its responsibilities in relation to employer and employee relations in the public service, and without limiting the generality of sections 7 to 10,
(a) determine the requirements of the public service with respect to human resources and provide for the allocation and effective utilization of human resources within the public service;
. . .
(d) determine and regulate the pay to which persons employed in the public service are entitled for services rendered, the hours of work and leave of those persons and any matters related thereto;
. . .
(f) establish standards of discipline in the public service and prescribe the financial and other penalties, including termination of employment and suspension, that may be applied for breaches of discipline or misconduct, and the circumstances and manner in which and the authority by which or whom those penalties may be applied or may be varied or rescinded in whole or in part;
(g) provide for the termination of employment, or the demotion to a position at a lower maximum rate of pay, for reasons other than breaches of discipline or misconduct, of persons employed in the public service, and establishing the circumstances and manner in which and the authority by which or by whom those measures may be taken or may be varied or rescinded in whole or in part;
(g.1) provide for the termination of employment of an employee to whom an offer of employment is made as the result of the transfer of any work, undertaking or business from a portion of the public service specified in Part I of Schedule I to the Public Service Staff Relations Act to any body or corporation that is a separate employer or that is outside the public service, and establish the terms and conditions under which, the circumstances and manner in which and the authority by which or by whom that termination may be made or may be varied or rescinded in whole or in part; [My emphasis.]
[44]The authority of the Treasury Board as employer is wide but by no means absolute. Subsection 11(3) [as am. by S.C. 1991, c. 24, s. 50, Sch. II, item 4(F)] of the FAA expressly provides:
11. . . .
(3) The powers and functions of the Treasury Board in relation to any of the matters specified in subsections (2) to (2.4) do not extend to any such matter that is expressly determined, fixed, provided for, regulated or established by any Act otherwise than by the conferring of powers or functions in relation thereto on any authority or person specified in that Act, and do not include or extend to any power or function specifically conferred on, or any process of personnel selection required or authorized to be employed by, the Public Service Commission by or under the authority of the Public Service Employment Act. [My emphasis.]
[45]In functioning as "employer," as defined in subsection 2(1) of the PSSRA, the Treasury Board may only exercise the authority given to it by Parliament under the FAA. As mentioned above, that authority does not extend to those matters addressed in the PSEA. The restriction on the Treasury Board's authority is also evident in a number of provisions of the PSSRA, for example, paragraphs 57(2)(b), and 69(3)(b) and subsection 87(3).
DISCUSSION
[46]The term "off-duty status" is found nowhere in these three statutes.
[47]What is found is section 29 of the PSEA which deals with lay-off. The deputy head, in accordance with the regulations of the Commission, may lay off employees where their services are no longer required by reason of lack of work. The consequence of invoking the power of subsection 29(1) of the PSEA is that "[a]n employee ceases to be an employee when the employee is laid off pursuant to subsection (1)" (see subsection 29(2) of the PSEA).
[48]In Attorney General of Canada v. Gray, [1978] 1 F.C. 808 (C.A.), at page 811, Pratte J. stated that the expression "lay-off," in common parlance, does not necessarily imply a termination of employment. He added however that for one who is conversant with the legislation applicable to the Public Service, a public servant cannot be said to be laid off if his employment has not been terminated. Heald J., in the same case, noted at pages 812-813 that the generally accepted definition of "lay-off" when used as a labour term is "[t]emporary, prolonged or final separation from employment as a result of lack of work." The context and the specific legislation are therefore of prime importance when one must assess the meaning of the term "lay-off" (see for example Canada (Attorney General) v. Tremblay (1996), 208 N.R. 56 (F.C.A.), at paragraph 9; Atomic Energy of Canada Ltd. v. Jindal (1998), 229 N.R. 212 (F.C.A.), at paragraphs 11-12).
[49]In the case at bar, the Commission did not act under section 29 of the PSEA. The appellants were placed on off-duty status as a group, without pay, because of temporary shortage of work. Their employment was not terminated. They remained at all times employees of the Commission, which later recalled them by alphabetical order.
[50]I find that the wide powers conferred on the Treasury Board and its delegates under paragraphs 7(1)(e) and 11(2)(a) and (d) of the FAA and clauses 6.01 and 25.01 of the applicable collective agreement are grants of authority which allowed the Commission to place the appellants on an off-duty status without pay. Specifically, the Treasury Board under paragraph 7(1)(e) is given authority over "personnel management in the public service of Canada, including the determination of the terms and conditions of employment of persons employed"; under paragraph 11(2)(a), it may provide for their effective utilization; under paragraph 11(2)(d), it may determine and regulate the pay, the hours of work and leave, and any matters related thereto. These last words would cover the procedure followed for the release and the recall of employees. Morever, under the Agreement, the managerial responsibilities remain unrestricted, unless provided to the contrary. The employee is given no guarantee with regard to his minimum or maximum hours of work.
[51]In the 1986 decision of Joyal J. in P.S.A.C., at paragraph 42, the employee was assured, during the short period of March 10 to April 15, 1986, "that the actual duration of his unemployment" would "follow the equitable merit rules." No such guarantee was given to the appellants in the case at bar.
[52]Strictly speaking, the merit principle found in the PSEA does not find application since the off-duty status is not contemplated under the Act. It is not a lay-off under the PSEA and the recall does not constitute an appointment. It is difficult to accept, however, that management would find itself without guidelines to treat its employees fairly during these difficult periods. The system of recall by alphabetical order was certainly unreasonable since the same persons would consistently find themselves at the back of the line.
[53]The wide powers given to the Treasury Board should only be exercised in the spirit of the tradition of fairness reflected in numerous pieces of legislation.
CONCLUSION
[54]This appeal should be dismissed with costs.
* * *
The following are the reasons for judgment rendered in English by
[55]Nadon J.A.: I have read, in draft, the reasons which my colleague Desjardins J.A. gives for dismissing this appeal. I agree entirely with my colleague that the "off-duty status" is a temporary lay-off that does not constitute a "lay-off" within the meaning of section 29 of the Public Service Employment Act, R.S.C., 1985, c. P-33, as amended (the PSEA), and that, as a result, the power to place employees on "off-duty status" falls within the powers given to Treasury Board in respect of personnel management by reason of paragraphs 7(1)(b) and (e), 11(2)(a) and (f) of the Financial Administration Act, R.S.C., 1985, c. F-11 (the FAA).
[56]I also agree with Desjardins J.A. that the recall of the appellants could be done by alphabetical order. I come to this conclusion because, like my colleague, I am unable to find any authority to support the contrary view.
[57]Desjardins J.A., in her clear analysis of the relevant legislation, has effectively demonstrated that there is nothing in the PSEA, nor in the Public Service Staff Relations Act, R.S.C., 1985, c. P-35, that is applicable to the "off-duty status." Hence, I see no legal basis for concluding that the order in which the appellants were recalled to work was subject to the merit principle.
[58]As my colleague ably shows by her analysis of the relevant legislation, the merit principle is applicable to the appointment and the lay-off of public servants, both of which situations fall, without doubt, within the ambit of the PSEA and, hence, within the jurisdiction of the Public Service Commission.
[59]In my view, once it is conceded that the "off-duty status" is outside the reach of the PSEA, the provisions of that Act cannot be relied on to support the proposition that the recall of employees is subject to the merit principle.
[60]I therefore conclude that there is nothing to prevent the respondents from recalling the appellants to work on the basis of alphabetical order.
[61]To conclude, I wish to point out that the appellants do not argue that the merit principle was applicable to the recall. Rather, their submissions are to the effect that one of the reasons why we should not conclude as Desjardins J.A. proposes with respect to Treasury Board's authority to place the appellants on "off-duty status", is that the merit principle would be ousted . The essence of the appellants' submissions on this point appears from paragraphs 31, 35, 36, 39, 43 and 44 of their memorandum of fact and law:
Indeed, the effect of the approach asserted by the Respondents in the present case is to render illusory a full-time indeterminate employee's ability to reasonably anticipate yearly income from employment, to plan and benefit from accrued vacation and leave credits, and to rely on the overriding principle of security of tenure in accordance with merit.
. . .
There are no provisions in this legislative scheme which contemplate the right to place employees on "off-duty status" without pay. Indeed, nowhere in the FAA, PSSRA, PSEA, or related Regulations, applicable to operational employees at the Commission, is "off-duty status", or an equivalent term, defined or even used.
It is submitted that, if the lawful authority to "temporarily allocate employees to be not at work" exists at all, it must arise under this legislation by necessary implication and in a manner consistent with the general principles governing employment in the Federal Public Service.
. . .
Moreover, the PSEA establishes Parliament's intention that employment status in the Federal Public Service be governed by the principle of merit. The importance of the merit principle applies at the hiring stage, in the context of competitions for positions within the Public Service, and terminations due to a lack of work, the deletion of a function, or contracting out.
. . .
It is the case that subsection 29(2) of the PSEA contemplates a permanent severance of the employment relationship. It is submitted, however, that Parliament turned its mind to the full range of circumstances in which employees can become separated from their employment in the Public Service. This includes providing a statutory basis for the right of an employee to resign his or her employment--a right which, it is submitted, would be implied in the circumstances of private sector employers. In light of the detail of these provisions, the Appellants assert that Parliament could have provided, and deliberately chose not to provide, for standards respecting temporary suspensions from employment without pay.
Moreover, in light of the overriding importance of the principle of selection according to merit [and] the blanket jurisdiction of the Public Service Commission over matters of lay-off, the Appellants maintain that it is inconsistent to infer a reserved authority to Treasury Board to action significant temporary lay-offs on any basis deemed expedient at the time. In the present case, Treasury Board management representatives unilaterally shortened affected employees work year by one quarter and allocated return to work on the basis of alphabetical order.
[62]I would therefore dispose of the appeal in the way proposed by Desjardins J.A.
* * *
The following are the reasons for judgment rendered in English by
[63]Pelletier J.A. (dissenting): I have read the reasons of my colleagues and find that I must respectfully disagree with them.
[64]All are agreed that the Grain Commission's authority over personnel matters is derived from Treasury Board's authority under the Financial Administration Act.
[65]Treasury Board's powers do not include any power or function conferred upon the Public Service Commission (the Commission) by the Public Service Employment Act. See subsection 11(3) of the Financial Administration Act:
11. . . .
(3) The powers and functions of the Treasury Board in relation to any of the matters specified in subsection (2) to (2.4) do not extend to any such matter that is expressly determined, fixed, provided for, regulated or established by any Act otherwise than by the conferring of powers or functions in relation thereto on any authority or person specified in that Act, and do not include or extend to any power or function specifically conferred on, or any process of personnel selection required or authorized to be employed by, the Public Service Commission by or under the authority of the Public Service Employment Act. [My emphasis.]
[66]Section 29 of the Public Service Employment Act gives the Public Service Commission the power to make regulations governing the lay-off of employees for lack of work:
29. (1) Where the services of an employee are no longer required by reason of lack of work, the discontinuance of a function or the transfer of work or a function outside the Public Service, otherwise than where the employment of the employee is terminated in the circumstances referred to in paragraph 11(2)(g.1) of the Financial Administration Act, the deputy head, in accordance with the regulations of the Commission, may lay off the employee.
(2) An employee ceases to be an employee when the employee is laid off pursuant to subsection (1). [My emphasis.]
[67]It would seem to follow from this that Treasury Board cannot lay off employees for lack of work, except in accordance with the regulations made by the Public Service Commission. I believe that all are agreed that the placing of employees on off-duty status, as was done here, does not comply with the Public Service Commission regulations [i.e. the Public Service Employment Regulations].
[68]The employer says its does not have to comply with those Regulations because off-duty status does not amount to lay-off because it does not result in cessation of employment. This argument is based upon subsection 29(2), reproduced above.
[69]A careful reading of subsections 29(1) and (2) leads to the conclusion that while cessation of employment is a consequence of lay-off, it is not a condition of lay-off. Before subsection 29(2) can have any effect, there must be a lay-off. If a lay-off was, by definition, a cessation of employment, subsection 29(2) would be redundant. There is a presumption against redundancy in statutory interpretation. See Tower v. M.N.R., [2004] 1 F.C.R. 183 (C.A.), at paragraph 15. It would therefore seem to follow that a lay-off pursuant to subsection 29(1) is not a permanent cessation of employment, though subsection 29(2) makes it so.
[70]I do not think it contentious to say that in any other work environment, putting employees on no-work no-pay status would be treated as a lay-off. We have been given no reason to believe that the definition of lay-off has changed since it was briefly reviewed by Joyal J. in the predecessor to this case P.S.A.C. v. Canada (Canadian Grain Commission) (1986), 5 F.T.R. 51 (F.C.T.D.) [at paragraphs 32, 35 and 37]:
An inquiry into the meaning of the term "lay-off" is warranted. One naturally starts with the statutory definition as found in section 29 of the Public Service Employment Act. A lay-off is essentially a discharge due to lack of work or to the discontinuance of a function. According to The Concise Oxford Dictionary (7th ed. Oxford: The Clarendon Press, 1982) at page 569, it is a "discharge (temporary) owing to shortage of work". In The Oxford English Dictionary, Vol. VI, at page 130, it is "to dismiss (a workman), usually temporarily". I should note here that Oxford suggests that the word "lay-off" is of U.S. origin.
. . .
The expression "mise en disponibilité" contains in its dictionary meaning the characteristic of "temporary". Larousse Illustré, 1986, defines "disponibilité" as: "position spéciale des fonctionnaires et des officiers qui momentanément n'exercent pas leurs fonctions".
Robert & Collins French-English Dictionary at page 214 translates "disponibilité" as "a civil servant on leave of absence or temporarily freed from duty" and Harrap's in turn (at page L-13) translates lay-off as "congédier, licencier, renvoyer temporairement (des ouvriers)".
[71]The employer says that off-duty status, no-work no-pay, is not lay-off because it does not result in a termination of employment. Why does it not result in a termination of employment? Because employees continue to be eligible for work-related benefits. I do not find this persuasive. Cessation of employment flows from subsection 29(2) once there has been a lay-off. The operation of subsection 29(2) cannot be averted by purporting to continue a laid-off employee's employment. From an employee's point of view, the defining characteristic of a lay-off is being told to stay home and having to forego your pay as a result. Having the right to continue to pay premiums for benefits does not make a lay-off less a lay-off.
[72]I would therefore allow the appeal, set aside the order of the Federal Court dated February 25, 2004 [(2004), 247 F.T.R. 49], quash the decision of the Chief Commissioner of the Canadian Grain Commission in response to the appellants' grievances, and remit the matter to the Chief Commissioner with the direction that placing the appellants on off-duty status without pay is a lay-off within the meaning of subsection 29(1) of the Public Service Employment Act and can therefore only be implemented according to the Regulations made by the Public Service Commission.