T-1292-84
Julie Dalton (Plaintiff)
v.
Canadian Human Rights Commission, Canadian
Pacific Airlines Limited, Brotherhood of Railway
and Airline Clerks, System Board of Adjustment
No. 435 and Bianca Perruzza (Defendants)
Trial Division, Reed J.—Toronto, September 21,
1984; Vancouver, October 18, 1984.
Judicial review — Equitable remedies — Declarations —
Human rights — Canadian Human Rights Commission
approving settlement pursuant to s. 38 of Act whereby Union,
Company and defendant Perruzza agreeing to revision of
seniority list — Third parties affected by reordering of list not
notified of complaint, terms of settlement, nor of approval by
Commission — Company and Union not able to retroactively
alter seniority lists without involving employees in process —
If clause concerning seniority in collective agreement void,
reasonable to characterize what happened thereafter as insti
tution of practice by Company and Union of allocation of
seniority on basis of pre-existing rules — S. 46 of Act making
non-compliance with settlement approved by Commission
criminal offence — Involvement of Commission making proce
dure of negotiation and settlement under its tutelage qualita
tively different from normal negotiations between employer
and union — Commission having flexible procedure — Mech
anism for allowing joint interests of affected third parties to be
put forward must be devised — Order to go prohibiting
Company and Union from implementing revised seniority list
pursuant to settlement approved by C.H.R.C. — Settlement
declared invalid as made without regard for natural justice
rules — Canadian Human Rights Act, S.C. 1976-77, c. 33, ss.
38, 46.
Statutes — Construction — Retrospective application of
Canadian Human Rights Act — Canadian Human Rights
Commission finding CP Air's seniority lists constituting dis
crimination based on age and approving settlement revising
seniority lists established prior to present collective agreement
— Rebuttable presumption of non-retrospectivity of statutes
— Retrospective statute "opens up closed transaction and
changes consequences, although change effective only for
future" — Here discriminatory act not completed in past —
Continual reliance on seniority list containing built-in dis
criminatory feature constituting succession or repetition of
discriminatory acts — Distinguish continuing effects of one
discriminatory act because new and different types of damage
to plaintiff on each occasion — Conduct complained of con
stituting discriminatory practice proscribed by Act — Com-
mission's action to redress situation not retrospective applica
tion of Act.
Human rights — Jurisdiction of Canadian Human Rights
Commission — Retrospective application of Canadian Human
Rights Act — Presumption of non-retrospectivity applying to
all statutes unless rebutted — Commission finding CP Air's
seniority lists constituting discrimination based on age and
approving settlement revising seniority ranking based on
retroactive application of new collective agreement — Retro
spective statute "opens up closed transaction and changes
consequences, although change effective only for future" —
Situation here not discriminatory act completed in past —
Continual reliance on seniority list containing built-in dis
criminatory feature constituting succession or repetition of
discriminatory acts — Conduct complained of constituting
discriminatory practice proscribed by Act — Commission's
action to redress situation not retrospective application of Act
— Canadian Human Rights Act, S.C. 1976-77, c. 33, ss. 3,
7(b), 9(1)(c), 10, 35, 38.
Human rights — Jurisdiction of Canadian Human Rights
Commission — Interference with vested rights — Commission
approving settlement revising seniority lists — Presumption of
non-interference with vested rights applying only when statute
ambiguous — Act not ambiguous concerning Commission's
authority to order reordering of seniority lists — Inclusion of
ss. 16, 32(7), 42(2), 48 and 65 specifically prohibiting interfer
ence with certain types of vested rights indicating Parliament
intended to leave discretion to Commission in dealing with
other non-exempt rights — Canadian Human Rights Act, S.C.
1976-77, c. 33, ss. 16, 32(7), 42(2), 48, 65.
Human rights — Canadian Human Rights Commission
approving revised seniority list — Wording of settlement not
authorizing reordering of seniority as evidenced in revised
seniority list — Settlement requiring "revised seniority list
based on a retroactive application of Article 7.08 contained in
Agreement No. 22" — Article 7.08 requiring age be used for
establishing seniority for employees hired prior to effective
date of agreement and random selection be used thereafter —
Literal wording of settlement making it meaningless — Plain
tiff not raising argument but Court bound to consider it since
s. 46 making it criminal offence to ignore terms of settlement
approved by Commission — Canadian Human Rights Act,
S.C. 1976-77, c. 33, s. 46.
CP Air accorded employees who had been hired on the same
day seniority on the basis of their birth date pursuant to a
negotiated clause of the collective agreement. The clause
changed in October 1982 so that the basis of seniority became
random selection. The defendant, Perruzza, filed a complaint
that the determination of seniority constituted discrimination
based on age. Pursuant to the Commission's investigation, the
employee, the Union and the Company reached a settlement
whereby the seniority lists were revised. The Commission
approved the settlement pursuant to section 38 of the Canadian
Human Rights Act. The plaintiff and others whose seniority
rights were affected by a reordering of the seniority list were
not given notice of the complaint, settlement, nor the Commis
sion's approval. The plaintiff, whose seniority ranking was
adversely affected by the reordering, seeks a declaration that
the Commission's approval of the reordering of the seniority
lists is invalid, and an injunction restraining the Union and the
Company from adopting the revised list. The plaintiff argues
that the Commission does not have authority to approve settle
ments which demand the reordering of seniority lists estab
lished prior to the coming into force of the relevant provisions
of the Canadian Human Rights Act. To do so is to apply the
statute retrospectively. The plaintiff also argues that seniority
rights are vested rights which cannot be dislodged by new
statutory provisions unless Parliament expressly so provides.
Finally, it is argued that the Commission cannot approve a
settlement without giving notice and an opportunity to be heard
to affected third parties.
Held, an order will issue prohibiting the implementation of
the revised seniority list. A declaration will issue stating that
the wording of the settlement does not authorize the reordering
of seniority as evidenced in the revised seniority list, and that
the settlement is invalid as having been made without due
regard for the rules of natural justice.
A retrospective statute is one which "opens up a closed
transaction and changes its consequences, although the change
is effective only for the future". The fact that a reordering of
the list will only have effect prospectively does not mean there
is no retrospective application of the statute. In this case, there
is not a discriminatory act that was completed in the past.
Every time an employment related decision is made that is
based on seniority, there is discrimination on the basis of age.
There is a succession or repetition of discriminatory acts which
constitute a discriminatory practice proscribed by the Act. The
action taken by the Commission to redress the situation cannot
be classified as a retrospective application of the Act.
The presumption of non-interference with vested rights
comes into operation only when the statute is ambiguous.
Seniority rights partake sufficiently of a quality of vested rights
to fall within this principle of statutory interpretation. How
ever, the Act is not so ambiguous on this point as to allow room
for the operation of this principle. The inclusion of sections 16,
32(7), 42(2), 48 and 65, specifically prohibiting interference
with certain types of vested rights indicates that Parliament
intended to leave to the Commission a discretion in dealing
with other non-exempt rights.
If the clause in the collective agreement relating to seniority
rights is void as contrary to public policy, the reordering of the
seniority list was the institution of a practice by the Company
and the Union of the allocation of seniority on the basis of
pre-existing rules. Thus, there was not a void permitting the
Company and the Union to reach a settlement reordering the
seniority list without notice to the plaintiff and without her
consent. Although in some circumstances unions may sign
settlements of legal claims on behalf of their membership, or
amend a collective agreement by a letter of understanding, it is
too broad a claim to assert that the Company and the Union in
the present case could retroactively alter the seniority lists
without involving the employees in the process. The absence of
a written requirement in the Union's constitution does not
mean that a ratification vote is unnecessary before a collective
agreement becomes binding. The involvement of the Commis
sion, whose approval of settlements turns them into instru
ments, the contravention of which is a criminal offence, in the
process of negotiation and settlement changes the nature of
what might otherwise be strictly a negotiation process. The
Commission has a flexible procedure. While there is no necessi
ty to listen to each person individually, some mechanism must
be devised for allowing the interests of affected third parties to
be put forward.
The settlement requires "a revised seniority list based on a
retroactive application of Article 7.08 contained in Agreement
No. 22". Article 7.08 requires that age be used for establishing
seniority for employees hired prior to the effective date (Octo-
ber 31, 1982). A retroactive application of this article would
change nothing, since age was used prior to October 31, 1982.
None of the reordering of the seniority list is required by the
terms of the settlement. To ignore this fundamental defence,
even though not pleaded by the parties, would be inappropriate.
Section 46 of the Canadian Human Rights Act makes it a
criminal offence to ignore the terms of a settlement which has
been approved by the Commission. This demands precision in
the wording of the settlement and a strict adherence to its
literal text.
CASES JUDICIALLY CONSIDERED
APPLIED:
Steel v. Union of Post Office Workers, [1978] 1
W.L.R. 64 (Employment Appeal Tribunal); Province of
Manitoba v. Manitoba Human Rights Commission, et al.
(1983), 25 Man. R. (2d) 117 (C.A.); B.C. Distillery Co.
Ltd. and Group of Seagrams Employees and Distillery,
Brewery, Winery, Soft Drink and Allied Workers Union,
Local 604, [1978] 1 Canadian LRBR 375 (B.C.L.R.B.).
CONSIDERED:
Latif v. Canadian Human Rights Commission et al.,
[1980] 1 F.C. 687 (C.A.); Quarles v. Philip Morris, Inc.,
279 F. Supp. 505 (E.D. Va., 1968); Local 189, United
Papermakers and Paperworkers, AFL-CIO, CLC v. U.S.,
416 F. 2d 980 (5th Cir., 1969); Labelle et al. v. Air
Canada (1982), 4 C.H.R.R. D/1311, Decision 266,
(C.H.R.C.); Ontario Human Rights Commission et al. v.
Borough of Etobicoke, [1982] 1 S.C.R. 202; Re Bakery
and Confectionery Workers' Int'l Union, Local 322, and
Canada Bread Co. Ltd. (1970), 22 L.A.C. 98 (Ont.
L.R.B.); Hawkesbury & District General Hospital and
CUPE, Locals 1967 and 2474; Re Renee Guerin et al.;
Re CUPE; Re Nicole Drouin et al., [1984] OLRB Rep.
February 259; Magold et al. and Int'l Brotherhood of
Boilermakers, Iron Ship Builders, Blacksmiths, Forgers
and Helpers et al., [1976] 1 Canadian LRBR 392;
McGavin Toastmaster Ltd. v. Ainscough, [1976] 1
S.C.R. 718.
REFERRED TO:
Franks v. Bowman Transportation Co., 424 U.S. 747
(5th Cir., 1976); Starey v. Graham, [1899] 1 Q.B. 406;
Nicholson v. Haldimand-Norfolk Regional Board of
Commissioners of Police, [1979] 1 S.C.R. 311;
McCarthy v. Attorney General of Canada, [1981] 1 F.C.
309 (C.A.).
COUNSEL:
George A. Lane for plaintiff.
Russell G. Juriansz for defendant Canadian
Human Rights Commission.
K. F. Braid for defendant Canadian Pacific
Airlines.
No one appearing on behalf of defendant
Brotherhood of Railway and Airline Clerks,
System Board of Adjustment No. 435, and
defendant Bianca Perruzza.
SOLICITORS:
Keyser/Mason/Coleman/McTavish & Lewis,
Mississauga, for plaintiff.
Russell G. Juriansz, General Counsel,
Canadian Human Rights Commission,
Ottawa, for defendant Canadian Human
Rights Commission.
K. F. Braid, Acting Regional Counsel,
Canadian Pacific Law Department, Toronto,
for defendant Canadian Pacific Airlines.
The following are the reasons for judgment
rendered in English by
REED J.: This case was originally thought to
involve only two issues: (1) the jurisdiction of the
Canadian Human Rights Commission to approve
settlements revising the seniority ranking of
employees on the basis that the existing arrange
ment constitutes discrimination on the basis of
age; (2) the extent to which, in such cases, the
Commission is obliged to give notice and an oppor
tunity to be heard to those individuals whose seni
ority ranking would be altered by such an order. In
the course of argument it became apparent that a
third issue was relevant: the proper interpretation
of the settlement in question in this case.
The facts are as follows: from 1960, until the
coming into force of collective agreement No. 22,
on October 31, 1982, CP Air accorded employees
who had been hired on the same day seniority on
the basis of their birth date. (Hiring a number of
employees on the same day was done to facilitate
the running of training programs given to new
employees.) This use of birth date was adopted
pursuant to a clause of the collective agreements
negotiated by the defendant, the Brotherhood of
Railway and Airline Clerks, System Board of
Adjustment No. 435 (BRAC) and the defendant
CP Air. The first such agreement was negotiated
in 1959-1960 (agreement No. 11) and the relevant
clause provided:
In the event that more than one employee in the same seniority
groups has the same seniority date, the employee with the
longer Company service will appear first on the seniority list,
and in the event of equal Company service, the older employee
will appear first on the seniority list.
This clause was essentially carried forward in all
subsequent agreements until agreement No. 22 of
October, 1982. That agreement provided (Article
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.
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.
Seniority is used to determine a number of
aspects of employment: overtime opportunities,
geographical location of job, shifts worked, dates
of vacation leave, order of lay-off.
The defendant, Bianca Perruzza, was hired on
May 4, 1981, and as the youngest member of her
group hired on that day was given the most junior
rank in seniority. She was subsequently scheduled
to be laid off in November, 1982, ahead of others
hired the same day but who were older than she
was. (She was not in fact laid off until January,
1983 because she elected to move from Toronto to
Vancouver and "bump" a more junior employee
there rather than take the November lay-off.) On
February 10, 1983, she filed a complaint with the
Human Rights Commission on the ground that the
determination of seniority and the consequent lay
off constituted discrimination on the basis of age.
Subsection 3(1) and paragraph 7(b) of the
Canadian Human Rights Act, S.C. 1976-77, c. 33
(as am. by S.C. 1980-81-82-83, c. 143, s. 2)
provide:
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.
Paragraph 9(1)(c) (as am. idem, s. 4) and section
10 (as am. idem, s. 5) are also relevant:
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 investigated the complaint pur
suant to section 35 of the Canadian Human
Rights Act and this resulted in a settlement being
agreed to by the three defendants, CP Air, BRAC
and Bianca Perruzza. The settlement provided:
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.
On April 4, 1984, the Commission approved this
settlement pursuant to section 38 of the Canadian
Human Rights Act. The Commission, the Union
and the Company all agree that the settlement
requires the reordering of the seniority list, not
only as it relates to the defendant Bianca Perruzza
(i.e. a reordering by lot as between those people
hired on the day she was hired—May 4, 1984) but
also as it relates to the seniority of all persons
hired, from time to time over the years, when age
has been used to establish seniority among persons
hired on the same day.
Neither the plaintiff nor the other employees
whose seniority would be affected by a reordering
of the seniority list were given notice of the com
plaints filed by Bianca Perruzza, of the terms of
settlement agreed to by the Union and the Com
pany, of the approval of the Commission. The
plaintiff learned of the settlement on reading an
article in the Union newspaper which carried the
title "Seniority Sweepstakes".
The plaintiff, Julie Dalton, was hired May 20,
1980. At that time, her seniority, as determined on
the basis of age, was second out of the group of
eleven employees hired that day. On the basis of
the reordering to be done, her seniority will be
changed to fifth. She claims a declaration that the
decision of the Canadian Human Rights Commis
sion approving the reordering of the seniority lists
is invalid and an injunction restraining the Union
and the Company from adopting the revised seni
ority list which has been prepared pursuant to that
decision.
While only one person is named as plaintiff in
this action, her claim is viewed as being a repre
sentative case which will equally determine the
rights of all the other employees whose seniority is
being adversely affected as a result of the decision
of the Commission.
Revision of Seniority List—Retrospective Applica
tion of the Canadian Human Rights Act?
The plaintiff's argument is that the Canadian
Human Rights Commission does not have author
ity to require, through consultation and negotia
tion, and to approve settlements which demand the
reordering of seniority lists established prior to
March 1, 1978 (the date on which the relevant
provisions of the Canadian Human Rights Act
came into force). It is argued that to do so is to
apply that statute retrospectively and to interfere
with vested rights.
The Federal Court of Appeal dealt with the
question of retrospectivity as it relates to the oper
ation of the Canadian Human Rights Act in Latif
v. Canadian Human Rights Commission et al.,
[ 1980] 1 F.C. 687. At pages 702-705, it said:
Counsel for the applicant relied on the general nature of the
legislation, as well as certain specific provisions of the Act, as
indicating clearly, in his submission, an intention that the Act
should apply retrospectively to discriminatory practices which
were completed before it came into force. I have not been
persuaded by his submissions that there is such a clear and
unambiguous expression of intention .... The fact that legisla
tion serves a generally laudable or desirable purpose is not by
itself sufficient to displace the rule against retrospective opera
tion .... The legislation in the present case is quite different in
its impact [from the Ontario The Family Law Reform Act,
1978] ... Its operation is not based on a status ... but on
conduct which is stigmatized by the legislation with results that
interfere with or overturn what were formerly lawful exercises
of freedom of contract.
In the result, I am of the view that the Act does not disclose a
clear intention that it should apply to a discriminatory practice
that occured and was completed before it came into force.
The Latif case dealt with an employee who
alleged he had been discharged from his employ
ment partly because of his religion and national
origin. The Commission refused to deal with the
complaint, the discharge having taken place before
the Act came into force.
I would first of all make some comments on the
Commission's argument that a reordering of the
seniority list is not retroactive because it does not
seek to undo all past employment decisions taken
in reliance on the seniority list. This is no doubt
true but misses the point in issue; the issue is
whether the reordering of the lists is an application
of the Canadian Human Rights Act retrospective
ly not retroactively. (See: Driedger, Construction
of Statutes, 2d ed., pages 185 ff. for an explana
tion of the difference between the retroactive and
retrospective operation of statutes.) Also the fact
that a reordering of the list will only have effect
prospectively does not mean there is no retrospec
tive application of the statute. In Driedger (supra)
at page 186 a retrospective statute is described as
one which "opens up a closed transaction and
changes its consequences, although the change is
effective only for the future." There is no doubt
that there is a good argument that that is what the
reordering of the list does in the present case.
The Commission argues, however, that in the
present case a requirement that the seniority list
be reordered prospectively cannot be seen as a
retrospective application of the Canadian Human
Rights Act because the situation which it is
designed to redress is not a discriminatory act that
was completed in the past. The Commission argues
that every time an employment related decision is
taken based on the seniority list (shift to be
worked, vacation dates, overtime opportunity)
there is discrimination on the basis of age. This, it
is argued, constitutes a dicriminatory practice pro
hibited by the Act. There is considerable force to
this argument.
I was referred to two United States cases as
support for the proposition that the application of
a statute to present incidents of discrimination is
not a retrospective application of the statute. It is
true that the two cases in question, Quarles v.
Philip Morris, Inc., 279 F. Supp. 505 (E.D. Va.,
1968), and Local 189, United Papermakers and
Paperworkers, AFL-CIO, CLC v. U.S., 416 F. 2d
980 (5th Cir., 1969), are of uncertain value in the
Canadian context. They both deal with discrimina
tion on the basis of race which carried over from
pre-1964 Civil Rights Act of 1964 [78 Stat. 241]
days. Both cases are founded squarely on the
question of the interpretation of the United States
Civil Rights Act of 1964. That Act was designed
to correct past situations; it was designed to oper
ate retrospectively; and it specifically validated
only bona fide seniority systems (that is those
founded on business necessity). In addition, both
cases deal with departmental, not company, seni
ority. Nevertheless, the approach taken by the
United States courts in those cases is useful for the
reasoning on which it is based.
Prior to the enactment of the Civil Rights Act
of 1964, it had been the practice of the defendant
companies in both of the cases cited above to
segregate their workforce into all-white and all-
negro departments. After the Act came into force
this was prohibited but negroes were still con
strained from competing on an equal basis for the
formerly "white" jobs because of departmental
seniority preference rules which were carried for
ward. In both cases the Courts found them to be
present discrimination. In the Local 189 case
(supra) the Court reasoned, at page 988:
It is not decisive therefore that a seniority system may appear
to be neutral on its face if the inevitable effect of tying the
system to the past is to cut into the employees present right not
to be discriminated against on the ground of race.
And at page 994:
When an employer adopts a system that necessarily carries
forward the incidents of discrimination into the present, his
practice constitutes on-going discrimination, unless the inci
dents are limited to those that safety and efficiency require.
Another United States case which can be referred
to is Franks v. Bowman Transportation Co., 424
U.S. 747 (5th Cir., 1976).
More significant, perhaps, is the decision in
Steel v. Union of Post Office Workers, [1978] 1
W.L.R. 64. The statute under consideration in that
case was the United Kingdom Sex Discrimination
Act 1975, Stats. U.K. 1975, c. 65. Prior to Sep-
tember 1975, postwomen were not permitted to
attain permanent status but could work only as
temporary employees. After that date this disabili
ty was removed. In March 1976, the plaintiff Steel
applied for a vacant postal walk. Her application
was refused on the ground that she lacked the
necessary seniority for the job. The job was given
to a man whose total employment was shorter, but
who had achieved permanent status earlier than
she had. (The plaintiff had been a temporary
employee from November 1961 to September
1975.) The [Employment] Appeal Tribunal hear
ing the case held, at page 67, that:
There is no doubt that the Sex Discrimination Act 1975 does
not operate retrospectively, but some acts of discrimination
may be of a continuing nature and it would seem to us to be in
accordance with the spirit of the Act if it applied as far as
possible to remove the continuing effects of past discrimination.
Also of some assistance is the Manitoba Court
of Appeal decision in Province of Manitoba v.
Manitoba Human Rights Commission, et al.
(1983), 25 Man. R. (2d) 117. That decision dealt
with The Human Rights Act of Manitoba, S.M.
1974, c. 65 and the concept of a "continuing
contravention" found therein (subsection 19(1)).
The complainant alleged that his compulsory
retirement at age 65 was a continuing contraven
tion because the effects of that Act continued in
that he was still being denied employment due to
his age. The Court held that compulsory retire
ment as of a specific date did not constitute a
"continuing contravention". It described a con
tinuing contravention, at page 121:
What emerges from all of the decisions is that a continuing
violation (or a continuing grievance, discrimination, offence or
cause of action) is one that arises from a succession (or
repetition) of separate violations (or separate acts, omissions,
discriminations, offences or actions) of the same character (or
of the same kind). That reasoning, in my view, should apply to
the notion of the "continuing contravention" under the Act. To
be a "continuing contravention", there must be a succession or
repetition of separate acts of discrimination of the same charac
ter. There must be present acts of discrimination which could
be considered as separate contraventions of the Act, and not
merely one act of discrimination which may have continuing
effects or consequences.
In my view, continual reliance, in the making of
various employment decisions from time to time,
on a seniority list which contains a built-in dis
criminatory feature, is a succession or repetition of
discriminatory acts. It differs from the continuing
effects of one discriminatory act (such as compul
sory retirement at a specific date), in that new and
different types of "damage" accrue to the plaintiff
on each occasion (less favourable shift to be
worked, earlier placement on temporary lay-off
status). In addition, one must keep in mind that
the Canadian Human Rights Act proscribes "dis-
criminatory practices". (It is not the concept of
continuing contravention as found in the Manitoba
legislation which is to be interpreted.) A practice is
defined in the Compact Version of the Oxford
English Dictionary, 1971 ed., as "the habitual
doing or carrying on of something", "a habitual
way of acting", "the doing of something contin
uously or repeatedly". I think the conduct com
plained of in this case falls within the concept of a
discriminatory practice and therefore the action
taken by the Commission to redress that situation
cannot be classified as a retrospective application
of the Act.
Revision of Seniority List—Interference with
Vested Rights?
The plaintiffs second argument is that seniority
rights are vested or established rights which are
not to be dislodged by new statutory provisions
unless Parliament expressly so provides.
First of all, it should be noted that the presump
tion that an Act not operate retrospectively and
that it not operate so as to interfere with vested
rights as two separate and distinct presumptions:
see Driedger (supra) particularly at pages 187 and
196. In addition, the presumption of non-interfer
ence with vested rights only comes into operation
when the statute is ambiguous while the presump
tion of non-retrospectivity is a prima facie pre
sumption applicable to all statutes unless rebutted.
The Commission argues that the seniority rights
in question are not vested but acquire their life at
any given time from the then existing clause in the
collective agreement; it is argued that seniority
rights are not determined by the collective agree
ment in place at the time the employee was hired.
Particular reliance is placed on the wording of
Article 7.08 of agreement No. 22 (set out above)
as support for this argument. That clause states
that age will be the deciding factor for employees
hired before agreement No. 22 came into force but
random lot will be the regime thereafter. It is
argued that if the collective agreements were only
intended to determine the seniority of those
employees hired during the life of the agreement,
then it would not have been necessary, in agree
ment No. 22, to include reference to the determin
ing of seniority on the basis of age for employees
hired prior to that agreement.
This is not compelling evidence that the rights
are not vested or established rights as that concept
is used in the principles of statutory interpretation.
It is common ground that the seniority lists estab
lished prior to 1960 when age first began to be
used as a criteria were not revised in accordance
with agreement No. 11 of 1960, even though the
seniority clause therein contained no reference to
the preservation of the list established under the
earlier systems. The list as established up to that
point was preserved as a matter of course by the
Company and the Union.
In addition, the fact that the clauses of the
collective agreement may be changed in the future
does not make them any the less established (or
acquired, or accrued) rights. Counsel for the Com
mission argued that senority ranking of all
employees could be changed through a processs of
negotiation between the Company and the Union
without agreement from the employees. I will deal
with this argument in more detail later since it is
also relevant to the question of notice. But suffice
it to say, I am not at all convinced that such a
change would be implemented without the Union
at least obtaining a ratification vote from its mem
bers. Evidence and argument respecting the au
thority of the Union was less than satisfactory.
The Union chose not to appear, even though
named as a party defendant.
It is trite to say that what constitutes a vested
right (sometimes called an accrued right, some
times an acquired right, sometimes an existing
right) is difficult of definition. I note that in
Craies on Statute Law (7th ed., 1971) at page
399, the following definition, culled from Starey v.
Graham, [1899] 1 Q.B. 406 at page 411, is found:
... some specific right which in one way or another has been
acquired by an individual and which some persons have got and
others have not.
With respect to the nature of seniority rights,
this issue was dealt with by the British Columbia
Labour Relations Board in B.C. Distillery Co. Ltd.
and Group of Seagrams Employees and Distillery,
Brewery, Winery, Soft Drink and Allied Workers
Union, Local 604, [1978] 1 Canadian LRBR 375,
at pages 381-382:
The point of seniority principle is to establish a simple,
precise, and objective standard for selecting from among the
employees seeking the same job; and thus to reduce supervisory
arbitrariness and personal favouritism in these decisions, with
the damaging impact that can have on employee morale....
These issues do produce careful bargaining by unions and
employers, and the seniority clauses in sophisticated relation
ships may take pages and pages in the collective agreement.
Legally speaking, the seniority rights of the employees rest on
this contract which the Union has negotiated. These rights
would terminate if the agreement were cancelled. And for that
reason, a union may claim the same broad authority to revise
the terms of this seniority provision as it enjoys in the negotia
tion of the general run of economic benefits.
But that claim rests on a superficial view of the nature of
seniority as a social institution. The fact of the matter is that
existing seniority clauses take on a much more compelling hue
than other contract clauses. This is a good statement for the
reasons why:
... Seniority enables an employee to acquire valuable inter
ests by his work, to capitalize his labor and obtain something
more than a day's wages for his continued production. When
seniority determines promotion rights, it gives the employee a
claim to better jobs when they become available; when
seniority determines the order of layoff, it provides the
employee a measure of insurance against unemployment.
Seniority does not guarantee that vacancies in higher rated
jobs will be filled or that any jobs will be available; but by
giving the senior employee priority when a choice is made as
to who will be promoted or who will remain employed,
seniority gives an employee an interest of substantial practi
cal value. As Professor Aaron has pointed out, 'more than
any other provision of the collective agreement ... seniority
affects the economic security of the individual covered by its
terms,' and it has understandably come to be viewed as one
of the most highly prized possessions of any employee.
Seniority may be the most valuable capital asset of an
employee of long service.
Summers and Love, "Work Sharing as an Alternative to
Layoffs by Seniority", (1976), 124 U. of Pa. L.R. 893, at p.
902.
Employees in the plant know their position on the seniority list.
They believe that they have earned that spot by their long
service. They have firm expectations that that position will
remain unaltered. Suppose then that the union and the employ
er negotiate a change in that clause, one which has the effect of
re-shuffling positions on the seniority list. How does the
adversely affected employee naturally perceive that contract
change? He believes that the parties have simply taken a
valuable asset belonging to him and given it to another
employee ....
And for these pragmatic reasons, the law simply cannot take
the attitude that because the union and the employer freely
negotiated the original seniority clauses, they are also able to
change that existing clause at will.
In my view, seniority rights partake of enough of
a quality of vested rights to fall within the princi
ple of statutory interpretation which provides that
when a statute is ambiguous as to its intended
operation, it should be interpreted so as not to
dislodge such rights.
The Commission itself, on several occasions, has
recognized that alterations to seniority ranking in
order to remedy a complaint can prejudice the
rights of third parties. In Labelle et al. v. Air
Canada (1982), 4 C.H.R.R. D/1311, Decision 266,
the Human Rights Tribunal refused to accord the
complainants seniority ranking equal to what they
would have acquired had no discrimination taken
place. The plaintiffs filed complaints with the
Commission alleging they were refused employ
ment with Air Canada on the ground of a physical
handicap which was not a bona fide occupational
requirement. The Human Rights Tribunal found
the complaint justified, ordered monetary compen
sation paid to the complainants for lost wages, but
on the subject of seniority, had this to say [at page
D/1313]:
The Tribunal recognizes the merit in issuing an order which
would place the complainant in the position which he would
have been in had it not been for the discriminatory practice.
Such an order must, however, affect the complainant and
respondent, not uninvolved third parties. We therefore accept
the submissions of Mr. Marchand and do not make any order
as to seniority.
In the present case, the Investigators' Report
referred as well to the disposition of two other
complaints (Roberge and Bennie) disposed of by
the Commission, similar to that of the defendant
Bianca Perruzza. That report reads, in part, as
follows:
Company's position
The Commission had approved settlement of an earlier similar
complaint ("Roberge v Canadian Pacific Air" [sic]) in which
retroactive revision to the relevant seniority list was not made.
Investigation Report Conclusions
The Roberge complaint should not be construed as limiting the
scope of settlement in the present case. In fact, the Roberge
case established the important principle that the Commission
was willing to intervene in revising seniority (Roberge's seniori
ty in relation to others hired on the same day was revised, albeit
not on a random basis) for purposes of obtaining an equitable
settlement.
It should be noted that the Commission decided that an
earlier complaint similar to this case (Bennie vs Canadian
Pacific Air [sic] and Bennie vs B.R.A.C.—decision rendered
September, 1983) was substantiated and redressed, even
though the remedial actions by the respondents did not include
retroactive change in seniority for the complainant or for the
other employees on the list ... It should be noted that the
Bennie case cited the Labelle and Cleaveau [sic] vs Air Canada
Tribunal decision as an additional reason in support of its
recommendation. The Tribunal considered ordering retroactive
seniority as one of the remedies available to it to rectify the
discriminatory parties [sic], but decided against it on the basis
that such an order would affect "uninvolved third parties". It is
submitted that the present case is different from the one before
the Tribunal, in that seniority per se was not the issue com
plained of in Labelle and Cleaveau [sic]. In the present case,
seniority is the central issue, rather than being an ancillary
remedy.
The fact that the Commission, on previous simi
lar occasions has refused to order a reordering of
seniority lists does not mean it does not have
authority to do so. And, on reading the Canadian
Human Rights Act, I cannot conclude that it is so
ambiguous on this point as to allow room for the
operation of the non-interference with vested
rights principle of statutory construction. The stat
ute seems to clearly contemplate that the Commis
sion should have this authority.
Subsection 42(2) of the Act provides that the
Human Rights Tribunal may not, in attempting to
reverse or compensate a complainant for a dis
criminatory practice, make an order
42. (2) ...
(a) requiring the removal of an individual from a position if
that individual accepted employment in that position in good
faith; or
(b) requiring the expulsion of an occupant from any premises
or accommodation, if that occupant obtained such premises
or accommodation in good faith.
Section 16 provides:
16. A provision of a pension or insurance fund or plan that
preserves rights acquired prior to the commencement of this
Part or that preserves pension or other benefits accrued prior to
that time does not constitute the basis for a complaint under
Part III that an employer is engaging or has engaged in a
discriminatory practice.
See also sections 32(7), 48 and 65. The inclusion
of these sections specifically prohibiting interfer
ence with certain types of vested rights indicates
that Parliament intended to leave to the Human
Rights Commission a discretion in dealing with
other non-exempt rights.
It is interesting to note that the British
Columbia Human Rights Code, R.S.B.C. 1979, c.
186, subsection 8(3) specifically exempts from its
operation schemes based on seniority. No such
specific exclusion is found in the federal Act.
I conclude that the plaintiff's argument on this
point cannot prevail.
Notice to Affected Third Parties?
The question remains whether the Commission
can approve a settlement such as that contemplat
ed in this case without giving notice and an oppor
tunity to be heard to those third parties whose
seniority rights would be affected by such a reord
ering. It should be noted that once a settlement is
approved by the Commission, section 46 of the Act
makes non-compliance with the terms of the settle
ment a criminal offence:
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;
I did not understand counsel to argue that the
Commission was not subject to the usual rules of
natural justice and administrative fairness as they
have been set out in cases such as Nicholson v.
Haldimand-Norfolk Regional Board of Commis
sioners of Police, [ 1979] 1 S.C.R. 311. Of particu
lar significance is the Federal Court of Appeal
decision- in McCarthy v. Attorney General of
Canada, [1981] 1 F.C. 309, where an employee
was held to be entitled to notice and an opportu
nity to be heard before her name was removed
from the "eligible for promotion list". I understood
the defendants' argument to be, however, that in
this case giving notice to the Union, and involving
the Union in the negotiations, was sufficient. It
was argued that the Company and the Union
could have reached the settlement reordering the
seniority list without any involvement of the Com
mission and thus could have altered plaintiff's
rights without notice to her and without her
consent.
This argument proceeds first of all on the basis
that Article 7.08 in collective agreement No. 22
was void as being contrary to public policy. Refer
ence was made to the Supreme Court decision in
Ontario Human Rights Commission et al. v. Bor
ough of Etobicoke, [1982] 1 S.C.R. 202. In that
case the Court held a compulsory retirement
clause in a collective agreement void as contrary to
public policy (at page 213). It offended The
Ontario Human Rights Code, R.S.O. 1970, c. 318.
I note The Ontario Human Rights Code is differ
ent from the Canadian Human Rights Act in that
it creates absolute offences while the federal Act
does not. I would not, however, want to say that
the difference made contracts subject to the feder
al Act any less void as contrary to public policy.
However, if the clause in question is void, I think it
reasonable to characterize what in fact happened
thereafter as the institution of a practice by the
Company and the Union (even if not pursuant to a
valid term of the collective agreement) of the
allocation of seniority on the basis of the pre-exist
ing rules. Thus, it is not enough to say, as the
Commission seems to argue, that there was, after
the coming into force of the Canadian Human
Rights Act, a void and that the seniority lists
should from that time be treated as non-existent.
The decision in Re Bakery and Confectionery
Workers' Int'l Union, Local 322, and Canada
Bread Co. Ltd. (1970), 22 L.A.C. 98 (Ont.
L.R.B.), was relied upon for the proposition that a
company and a union can amend a collective
agreement by letters of understanding exchanged
during the course of the agreement (the letters in
that case were designed to clear up an ambiguous
provision of the agreement). The Ontario Labour
Relations Board decision in Hawkesbury & Dis
trict General Hospital and CUPE, Locals 1967
and 2474; Re Renee Guerin et al.; Re CUPE; Re
Nicole Drouin et al., [1984] OLRB Rep. February
259 was relied upon for the proposition that a
union can settle a legal proceeding and thereby
bind its members. I do not doubt that in some
circumstances unions may sign settlements of legal
claims on behalf of their membership. I do not
doubt that a letter of understanding between a
union and a company may clarify an ambiguous
provision of a collective agreement and be classi
fied as an amendment to a collective agreement.
But, it seems to me too broad a claim to assert that
an application of those principles leads to the
conclusion that the Company and the Union in the
present case could retroactively alter the seniority
lists without involving the employees in the
process.
The Ontario Labour Relations Board decision in
Magold et al. and Int'l Brotherhood of Boiler-
makers, Iron Ship Builders, Blacksmiths, Forgers
and Helpers et al., [1976] 1 Canadian LRBR 392,
was relied on for the proposition that formal ratifi
cation of a collective agreement is not needed to
make a collective agreement binding on its mem
bers. And the Supreme Court decision in McGavin
Toastmaster Ltd. v. Ainscough, [1976] 1 S.C.R.
718 was relied upon for the proposition that an
employee covered by a collective agreement no
longer has individual bargaining rights or con
tracts of employment with his or her employer.
In response to the Commission's reference to
these cases, counsel for the plaintiff argued that
whatever the situation in those cases, the defend
ant Union in this case had no authority to enter
into an agreement to alter the seniority rights of
the employees without at least a ratification vote.
He contended that it was the practice of the Union
always to submit prospective collective agreements
to ratification by the membership—this fact was
not set out in the agreed statement of facts filed by
the parties. Counsel for the Commission, on the
other hand, relied on the fact that the Union's
constitution contains no express requirement that a
ratification vote be held before a collective agree
ment becomes binding. I have some difficulty in
assessing these arguments. As noted, the Union
chose not to be represented in these proceedings,
and it has been left to the Commission to argue the
rights and obligations of the Union. In any event, I
would not be prepared to conclude on the basis
solely of the absence of a written requirement in
the Union's constitution that a ratification vote
was unnecessary. That is too slim evidence in the
circumstances of this case.
Even if the Union could bind its members to
such an agreement, however, I am not convinced
that this answers the question as to what obliga
tions rest on the Commission with respect to giving
notice to third parties. (I would note in passing
that the Commission made the curious argument
that the rights of the plaintiff Julie Dalton were
not affected in this case, only the rights of the
defendant Bianca Perruzza were altered by the
settlement.) It seems to me that the involvement of
the Commission in the process of negotiation and
settlement with its persuasive powers changes the
whole nature of what might otherwise be strictly a
negotiation process between the Company and the
Union. I would note that a reordering of the
seniority list for all employees was on the agenda
for discussion by the Company and the Union in
the negotiations which led up to the October, 1982
collective agreement. It was not agreed to.
It seems to me the involvement of the Commis
sion, whose approval of settlements turns them
into instruments, the contravention of which is a
criminal offence, makes the procedure of negotia
tion and settlement under its tutelage something
qualitatively different from normal negotiations at
the bargaining table between an employer and a
union. I do not think it sufficient, then, to point to
the relationship of the Company, the Union and
the employees inter se as an answer to the Com
mission's obligation to give notice to affected third
parties.
If the Commission's position is right, then one
member of the Union, the one who files a com
plaint, (in this case Bianca Perruzza) is entitled to
make representations respecting her rights outside
the umbrella of the Union, but other members of
the Union, (in this case the plaintiff Julie Dalton)
whose rights are equally affected by a Commission
decision, are not entitled to do so. A strange result
to say the least.
The Human Rights Commission has a flexible
procedure. Providing an opportunity to be heard to
third parties affected by a decision such as the
present does not mean there is an obligation to
listen to each employee individually. But some
mechanism must be devised for allowing their joint
interests to be put forward.
Text of the Settlement Approved by the Commis
sion
It was assumed by all parties that the settlement
approved by the Commission requires, at least, a
reordering of all the seniority lists from 1960 so
that among full-time employees hired as such on
the same day seniority is allocated on a random
basis.
The reordered list, which is in evidence, and
which the plaintiff attacks, goes even further and
the Commission admits that in certain aspects it
goes beyond the Commission's jurisdiction. The
Commission notes that the list is a provisional one;
consultations with the Commission concerning its
required content were not completed when the
plaintiff instituted her action.
The reordered list goes back to 1950. The Com
mission admits that this is in error and the list
should be revised so as not to go back beyond
1960. Prior to 1960, factors other than age were
used to determine the seniority of persons hired on
the same day: the hour of the day they began
work; the marks they received in the tests adminis
tered at the end of their training programs.
The list has also been reordered in so far as it
relates to the seniority of some employees who
obtained full-time employment with CP Air by
beginning as part-time employees. The company's
policy is to offer openings for full-time employ
ment to part-time employees before seeking to fill
the positions from outside the Company. These
positions were offered to part-time employees in
order of their seniority. Thus, as among part-time
employees hired as such on the same day, positions
were offered first to the oldest person.
A part-time employee who accepted a full-time
position was integrated into the seniority list of
full-time employees by the selection of an artificial
starting date. It is not necessary to describe the
method of calculation used. Suffice it to say, be
tween two part-time employees hired as such on
the same day, one would end up with seniority as a
full-time employee ahead of the other merely
because of the earlier selection into the ranks of
full-time employment on the basis of age.
Before me, the Commission took the position
that this reordering of the seniority list was not
required by the settlement, that it would constitute
a retrospective application of the law, which the
Commission was not entitled to make. It stated
that a revision of the provisional list would be
undertaken to leave the seniority of the once part-
time employees as originally established.
Since the Commission was willing to make such
a concession, the plaintiff asked that any order I
might make at least strike down that aspect of the
list. Because of the conclusion I have come to on
the question of notice, the whole list will, of course,
be declared invalid, but I cannot forbear from
saying that I have considerable difficulty with the
Commission's position. I can find little difference
between the situation of the full-time employees
and that of the once part-time employees. In both
cases, persons obtained a position on the seniority
list in preference to their co-workers because of
their age. In both cases that preference once given
continues to give the employees advantages in the
context of their present employment. The only
difference is that in one case the employees were
all hired on the same day as full-time employees
while in the other the employees were all hired on
the same day as part-time employees. In the case
of the part-time employees, it is true the artificial
starting dates as full-time employees attributed to
them is likely to be different, one from another,
while in the case of the full-time employees the
date will be the same. But I do not see this as a
significant difference since it is ultimately the
seniority ranking which is important, not the start
ing date, artificially attributed or not.
In any event, I have an even more fundamental
problem with the text of settlement agreed upon. It
requires
... a revised seniority list based on a retroactive application of
Article 7.08 contained in Agreement No. 22 ....
Article 7.08 requires that age be used for estab
lishing seniority for employees hired prior to the
effective date of agreement No. 22 (October 31,
1982) and that random selection be used thereaf
ter. Thus, a retroactive application of this article
would change nothing since age was used prior to
October 31, 1982 in any event. This was clearly
not the intention of the parties to the agreement
but it is the result a literal reading of the words
demands. Thus none of the reordering of the seni
ority list presently being done is required by the
terms of the settlement.
This argument did not form part of the plain
tiff's case and accordingly, I have considered the
extent to which it would be appropriate for me to
interpret the settlement in accordance with the
intention of the parties, even though the strict
wording does not convey that intention. I am
particularly mindful of the fact that the literal
wording of the settlement makes it totally ineffec
tive to accomplish anything—indeed it is meaning
less. Nevertheless, it seems to me that going
beyond the literal wording, or ignoring this funda
mental defence even though not pleaded by the
parties, is inappropriate. Section 46 of the Canadi-
an Human Rights Act makes it a criminal offence
to ignore the terms of a settlement which has been
approved by the Commission. This, it seems to me,
demands precision in the wording of the settlement
and a strict adherence to its literal text.
Accordingly, an order will issue prohibiting the
Company and the Union from implementing the
revised seniority list in so far as that action is
being taken pursuant to the settlement approved
by the Human Rights Commission.
Also a declaration will issue to the effect that
the wording of the settlement does not authorize
the reordering of seniority as evidenced in the
revised seniority list and that to the extent that the
settlement was intended to alter the seniority
rights of the plaintiff Julie Dalton, it is invalid as
having been made without due regard for the rules
of natural justice.
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.