A-289-77
Attorney General of Canada (Applicant)
v.
C. Gray (Respondent)
Court of Appeal, Pratte, Heald and Urie JJ.—
Ottawa, October 3 and 7, 1977.
Judicial review — Public Service — Labour relations —
Contract — "Lay-off' due to strike by other employees —
Applicability of "severance pay" provisions of collective agree
ment — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s.
28 — Public Service Employment Act, R.S.C. 1970, c. P-32, s.
29 — Public Service Staff Relations Act, R.S.C. 1970, c. P-35,
s. 91 — Public Service Terms and Conditions of Employment
Regulations, SOR/67-118, s. 2(j) — Postal Operations Group
(non-supervisory), External Mail Collection and Delivery Ser
vices, articles 30.01, 30.02, 30.03.
Respondent, a letter carrier, was "laid off" because of a
strike of other post office employees. The Public Service Staff
Relations Board upheld respondent's contention that he was
entitled to "severance pay", provided for in the collective
agreement. Applicant now makes a section 28 application
directed against the Board's decision.
Held, the appeal is allowed.
Per Pratte J.: Although "lay-off' in common parlance does
not necessarily imply a termination of employment, what is in
issue is its meaning as used in the collective agreement. Legisla
tion concerning the Public Service clearly indicates that a
public servant cannot be said to be laid off if his employment
has not been terminated. The parties to this collective agree
ment must be deemed to have been familiar with the terminolo
gy of the Public Service Employment Act. When the parties
used the term "lay-off' in the collective agreement, the Court
is entitled to presume in the absence of any indication of a
contrary intention, that they intended to refer to a termination
of employment.
Per Heald J.: "Lay-off' as used in article 30 must be
considered in context of the collective agreement as a whole
and more particularly having regard to the context of the
article in the agreement of which it forms a part. An analysis of
this article, under the heading "Severance Pay", clearly indi
cates that the parties, when intending to confer certain sever
ance pay benefits upon certain employees, intended further that
eligibility for such benefits was to be restricted to those
employees whose employment was "permanently ended".
APPLICATION for judicial review.
COUNSEL:
Peter T. Melnenly for applicant.
Maurice W. Wright, Q.C., for respondent.
SOLICITORS:
Deputy Attorney General of Canada for
applicant.
Soloway, Wright, Houston, Greenberg,
O'Grady & Morin, Ottawa, for respondent.
The following are the reasons for judgment
rendered in English by
PRATTE J.: This section 28 application is direct
ed against a decision of the Public Service Staff
Relations Board allowing a grievance which the
respondent had referred to adjudication pursuant
to section 91 of the Public Service Staff Relations
Act, R.S.C. 1970, c. P-35.'
The respondent is an employee of the Post
Office Department who works as a letter carrier in
Toronto. On October 23, 1975, he and his fellow
employees were informed by their superiors that,
as a consequence of a strike of other employees of
the Department, there was no longer any work
available for them and that they would not be paid
as long as that situation persisted. They were also
told that they would hear from the employer "as to
your return to work" and that, in the meantime,
they could apply for unemployment insurance ben
efits. The respondent remained out of work for
some five weeks during which he collected unem
ployment insurance; during that same time the
employer ceased to pay the respondent's salary,
but continued to pay contributions to the Ontario
Health Insurance Plan, Canada Pension Plan and
Public Service Superannuation. On December 3,
1975, the respondent resumed his normal duties as
a letter carrier.
It is the contention of the respondent, which was
upheld by the Board, that, as a consequence of his
"lay-off", he was entitled to the "severance pay"
It should be made clear that the jurisdiction of the Board to
make such a decision was not questioned and that, for that
reason, I need not express any opinion on that question. How
ever, I cannot help but observe that the Board does not seem, at
first sight at least, to have the power to dispose of a grievance
which has been referred to adjudication. Under section
94(2)(c) of the Act, when a grievance has been referred to
adjudication, the Board must "refer the matter to an adjudica
tor selected by [it]"; it is this adjudicator, and not the Board,
who under section 96, must dispose of the grievance.
provided for in article 30 of the applicable collec
tive agreement. That clause of the agreement
reads in part as follows:
SEVERANCE PAY
30.01 Lay-Off
An employee who has one year or more of continuous
employment and who is laid off is entitled to be paid severance
pay at the time of lay-off.
30.02 In the case of an employee who is laid off for the first
time after August 9, 1968, the amount of severance pay shall
be two (2) weeks' pay for the first and one (1) week's pay for
each succeeding completed year of continuous employment less
any period in respect of which he was granted severance pay,
retiring leave or a cash gratuity in lieu thereof by the Employ
er, but the total amount of severance pay which may be paid
under this clause shall not exceed twenty-eight (28) weeks' pay.
30.03 In the case of an employee who is laid off for a second or
subsequent time after August 9, 1968, the amount of severance
pay shall be one (1) week's pay for each completed year of
continuous employment less any period in respect of which he
was granted severance pay, retiring leave or a cash gratuity in
lieu thereof by the Employer, but the total amount of severance
pay which may be paid under this clause shall not exceed
twenty-seven (27) weeks' pay.
Article 30 also provides for the payment of sever
ance pay in case of resignation, retirement and
death.
It must first be said that when it became appar
ent that there was no work for the respondent, the
employer could have terminated his employment
under section 29 of the Public Service Employ
ment Act, R.S.C. 1970, c. P-32. 2 If this had been
done, no problem would have arisen since it is
common ground that the respondent would have
then been entitled to severance pay. However,
section 29 was not resorted to by the employer in
this case and the respondent's employment,
according to the unchallenged finding of the
Board, was not otherwise terminated. This is what
created the problem that the Board's decision
2 That provision reads as follows:
Lay- Offs
29. (1) Where the services of an employee are no longer
required because of lack of work or because of the discontinu
ance of a function, the deputy head, in accordance with regula
tions of the Commission, may lay off the employee.
(2) An employee ceases to be an employee when he is laid
off pursuant to subsection (1).
resolved in the respondent's favour: was the
respondent entitled to severance pay as a conse
quence of his "lay-off" in spite of the fact that his
employment was not terminated?
The expression "lay-off', in common parlance,
does not necessarily imply a termination of
employment. However, what is here in issue is not
the usual or even the dictionary meaning of the
expression but its meaning as used in the collective
agreement. There is no doubt 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. 3 I consider that the parties to the.
collective agreement here in question, which
relates to the condition of work of public servants,
must be deemed to have been familiar with the
terminology of the Public Service Employment
Act. Therefore, in my opinion, when they used the
expression "lay-off' in the collective agreement,
one is entitled to presume, in the absence of any
indication of a contrary intention, that they
intended to refer to a termination of employment.
Contrary to what was argued by counsel for the
respondent, I do not think that any conclusion
adverse to that opinion may be drawn from the
fact that the meaning of other words, used else
where in the agreement, is elucidated by express
references to the Public Service Employment Act. 4
(3) Notwithstanding anything in this Act, the Commission
shall, within such period and in such order as it may determine,
consider a lay-off for appointment, without competition and,
subject to sections 30 and 37, in priority to all other persons, to
any position in the Public Service for which in the opinion of
the Commission he is qualified.
(4) Notwithstanding subsection (2), a lay-off is entitled,
during such period as the Commission may determine for any
case or class of cases, to enter any competition for which he
would have been eligible had he not been laid off.
3 See section 29 of the Public Service Employment Act and
section 2(j) of the Public Service Terms and Conditions of
Employment Regulations, SOR/67-118.
° For instance, article 10.08 reads in part as follows:
10.08 A break in service shall be deemed to have occurred
and seniority shall be forfeited in cases of
(c) abandonment of position as defined in section 27 of
the Public Service Employment Act.
It was also argued by counsel for the respondent
that the reference, in articles 30.02 and 30.03, to a
lay-off as something which may occur "[a] first
time" or "a second or subsequent time" indicates
that the parties did not use the phrase "lay-off" as
necessarily implying a termination of employment.
I must confess that I do not understand that
argument because, in my view, an employee may
be laid off more than once even if the expression
"laid off" is used as connoting a termination of
employment. In my view, when the whole of article
30 is considered, it becomes clear that the parties
did not use the phrase "lay-off" in the general
sense proposed by counsel for the respondent.
First, the heading of article 30 is "Severance Pay",
a phrase which, in my opinion, connotes a termina
tion of employment; second, the other instances in
which severance pay is payable under article 30
(resignation, retirement, death) are clearly cases
of termination of employment.
For those reasons, I would grant the application
and set aside the decision of the Board.
* * *
URIE J.: I concur.
• • *
The following are the reasons for judgment
rendered in English by
HEALD J.: I have read the reasons for judgment
of my brother Pratte J. and agree both with those
reasons and with the conclusion he has reached
that subject decision of the Public Service Staff
Relations Board dated April 19, 1977, must be set
aside.
I have, likewise, reached the conclusion that, in
the circumstances of this case, article 30 does not
operate so as to entitle the respondent and the
other grievors to receive the severance pay pro
vided therein. The generally accepted definition of
"lay-off" when used as a labour term is: "Tempo-
rary, prolonged, or final separation from employ-
ment as a result of lack of work" 5 . Thus, if the
term "lay-off" could be taken in isolation and
without reference to the context of article 30, one
might well conclude that the circumstances of this
case are encompassed within that definition. How
ever, it is not, in my view, possible to adopt that
approach. "Lay-off" as used in article 30, must be
considered in the context of the collective agree
ment as a whole, and more particularly having
regard to the context of the article in the agree
ment of which it forms a part. The index to the
collective agreement describes the subject of
article 30 as "Severance Pay" and the heading
under article 30 is "Severance Pay". The designa
tion "lay-off" is one of three subheadings under
"Severance Pay". Thus, the generally accepted
meaning of "severance pay" must be considered in
order to determine to what extent, if any, the term
"lay-off" is qualified by the term "severance pay".
That term, when used as a labour term, appears to
mean: "A lump-sum payment by an employer to a
worker whose employment is permanently ended,
usually for causes beyond the worker's control." 6
[The underlining is mine.] It is accordingly clear,
in my opinion, that the parties, when intending to
confer certain severance pay benefits upon certain
employees, intended further that eligibility for
such benefits was to be restricted to those
employees whose employment was "permanently
ended". The authorities establish that, in statutory
construction, headings have a higher status than
marginal notes, they constitute an important part
of the Act itself and may be looked at as explain
ing the sections which immediately follow them.
Headings are always considered a useful pointer as
to the intention of Parliament in enacting the
immediately following sections'. I have no hesita
tion in applying those rules of statutory construc
tion to the construction of the provisions of a
collective agreement.
5 C.C.H. Canadian Limited, Canadian Labour Terms, 1975,
6th ed., (Don Mills, 1975), p. 44.
6 C.C.H. Canadian Limited, Canadian Labour Terms, 1975,
6th ed., (Don Mills, 1975), p. 69.
' See: E. A. Driedger, The Construction of Statutes,
(Toronto, 1974), pp. 112-116.
For the foregoing reasons, I have concluded that
the term "lay-off" as used in article 30 must be
interpreted in such a way as to mean a final
separation from employment. Applying that defi
nition to the facts here present, it is clear from the
record that the employment of the respondent and
the other grievors was never terminated. While
they were away from work, they continued to
receive vacation and sick leave credits, OHIP cov
erage and other benefits. To me this is a clear
indication that the relationship of employer and
employee continued to subsist. (See Case Book,
pages 41-42, 48, 59, 60, 65.)
Accordingly, on the facts here present, a "lay-
off" within the meaning of article 30 has not
occurred, and, thus, the respondent and the other
grievors have not established their entitlement to
the severance pay provided in article 30. I there
fore agree that the section 28 application should be
granted and that the decision of the Board should
be set aside.
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.