Murphy v. Halifax (City)

Murphy v. Halifax (City) Court Court of Appeal Date 1995-03-07 Citation 1995 NSCA 90 Docket CA 104443 Judge/Registrar/Adjudicator Freeman, Gerald B. (Honourable Justice) (CA); Matthews, Kenneth M., (Honourable Justice); Roscoe, Elizabeth A. (Honourable Justice) (CA) Document Type Decision Decision Content C.A. No. 104443 NOVA SCOTIA COURT OF APPEAL Cite as: Murphy v. Halifax (City), 1995 NSCA 90 Matthews, Freeman and Roscoe, JJ.A. BETWEEN: DONALD F. MURPHY ) Howard E. Crosby, Q.C. ) for the Appellant Appellant ) ) ) - and - ) ) ) John MacPherson, Esq. and ) Ian Pickard, Esq. ) for the Respondent ) THE CITY OF HALIFAX ) (Labour Standards Tribunal) ) Respondent ) ) ) Appeal Heard: ) February 6, 1995 ) ) Judgment Delivered: ) March 7, 1995 ) ) ) THE COURT: Appeal allowed and matter remitted to the Labour Relations Tribunal with costs fixed at $1,000.00 plus disbursements against The City of Halifax per reasons for judgment of Freeman, J.A.; Matthews and Roscoe, JJ.A., concurring. Freeman, J.A.: The appellant Donald F. Murphy is the former city manager of the City of Halifax whose employment was terminated by city council several months before his mandatory retirement date. He has appealed a decision of the Nova Scotia Labour Standards Tribunal which found that, despite his more than thirty years of service to the city as staff lawyer and city solicitor, only his three and a half years as city manager counted toward the ten years of service necessary to become a tenured employee under s. 71 of the Labour Standards Code, R.S.N.S. 1989, c. 246. The Tribunal found "that the Director lacks jurisdiction to proceed with his investigation of whether Mr. Murphy was dismissed contrary to Section 71 of the Code." The Director of Labour Standards had been required pursuant to s. 21(1) of the Code to investigate Mr. Murphy's complaint of wrongful dismissal under s. 71 and "endeavour to effect a settlement." Section 71 provides: "(1) Where the period of employment of an employee with an employer is ten years or more, the employer shall not discharge or suspend that employee without just cause unless that employee is a person within the meaning of person as used in clause (d), (e), (f), (g), (h) or (i) of Subsection 3 of Section 72." Remedies available to tenured employees who are wrongfully dismissed are substantial and include reinstatement; see Sobeys Stores Ltd. v. Yeomans (1989) 1 S.C.R. 238. Mr. Murphy did not fall within the ss. three exceptions. S. 77(4) provides: "Periods of employment referred to in Section 71, 72 or 73 include employment before the first day of February, 1973." The Labour Standards Code took effect February 1, 1973. Mr. Murphy was hired by the city as a staff lawyer in 1958 and never left its employ until he was dismissed by city council April 8, 1993. During that period there was obviously a common law master and servant relationship between Mr. Murphy and the city that existed independently of statute. He was promoted to city solicitor in 1966 and became acting city manager December 22, 1989. The appointment became permanent March 29, 1990. Following his dismissal he was paid his salary through to his mandatory retirement date in the fall of 1993. Under s. 2(d) of the Code " 'employee' means a person employed to do work and includes a deceased employee but does not include a teacher employed by Her Majesty, the Minister of Education, a school board as defined in clause (c) of Section 2 of the Education Act, or other employer, to teach, supervise or administer in a public school, a school established or maintained under the Education Act or in a school system." S. 2(o) of Code defines period of employment as: " . . [T]he period of time from the last hiring of an employee by an employer to his discharge by that employer and includes any period on lay-off or suspension of less than twelve consecutive months and 'employed' has a corresponding meaning." Mr. Murphy was an employee of the City of Halifax within the meaning of the Code when it came into effect. At that time, pursuant to s. 77(4), he had had some fifteen years of employment with his employer. In 1975 the concept of tenure was introduced for employees with ten or more years of service by s. 67A of the Code, the predecessor of the present s. 71. At the time s. 67A became effective Mr. Murphy had had some eighteen years of employment with the city. At that time he therefore became a tenured employee within the meaning of the Code, and he was entitled to the benefits the Code provided. There appears to have been nothing that would have thrown doubt on his status until the first regulations pursuant to the Code were introduced by Order in Council 76-1203 dated October 12, 1976. Regulation 2 was passed under the authority of Section 4(2) of the Code which states that: "The governor in council may by regulation expressly exempt the following persons from application of this Act or any Section or Sections of this Act: (a) members of named professions; (b) those who are engaged in classes of work designated in the regulations." Only two groups are specifically exempted from the application of the Code in its entirety by S. 2 of the regulations: 2(1) Domestic servants in a private home are exempted from application of the Code (2) Duly qualified practitioners or students while engaged in training for (a) Architecture; (b) Dentistry; (c) Law; (d) Medicine; (e) Chiropody; (f) Optometry; (g) Pharmacy; (h) Professional engineering; (i) Public or chartered accounting; ` (j) Psychology; (k) Surveying; (l) Veterinary Science are exempted from application of the Code." It is to be noted that s. 2(2) the Regulations does not exclude professional practitioners from the operation of the Code, it merely exempts them from its application. While this may seem a distinction without a difference, it should be noted that the legislature expressed its intention to exclude teachers from the Code in no uncertain terms by specifically not including them in the definition of employee. The Random House Dictionary of the English Language defines "exempt" as: "(v.t.) 1. To free from an obligation or liability to which others are subject; release." It follows that professional employees must be subject to the Code, and not excluded from it as teachers are excluded, in order to be exempted from its application by the regulations. Viewed narrowly, imposing an exemption is in itself an application of the Code. If Mr. Murphy was exempted from the application of the Code because he was also a member of a profession named in s. 2(2), as the respondent contends and the Tribunal found, he was exempted only to the extent that s. 2(2) was capable of exempting him. It was not asserted that s. 2(2) had retroactive or retrospective effect. It was conceded that s. 2(2) did not apply to him after he became city manager, at which time he ceased to maintain his qualifications as a legal practitioner. He was a tenured employee when he was exempted from the application of the Code on October 12, 1976. His period of employment as defined in s. 2(o) of the Code was never interrupted; he remained an employee of the city of Halifax from 1958 to 1993. But for the operation of the exemption under regulation 2(2) he would have remained a tenured employee to whom s. 67A and s. 71 of the Code applied from 1975 until he was discharged. Once the exemption was removed, s. 71 once more applied. Between October 12, 1976 and the commencement of his duties as city manager on December 22, 1989, he was a long term employee who was barred from claiming tenure only because he was blocked from access to s. 71. On the latter date the barrier was removed. Thereafter the city could not discharge him except for just cause. It is not strictly necessary to consider whether, upon the removal of the barrier created by the exemption, Mr. Murphy was entitled to count the years of service while he was subject to an exemption. He is able to count twenty-one years of service before the exemption was imposed. Only ten years are required to provide for tenure pursuant to s 71. However, this court considered an analogous situation in Scott Maritimes Limited and Labour Standards Tribunal (N.S.) and Reginald A. Conrad (Unreported--October 18, 1994.) The relevant regulation in that case was s. 2(5) which provides: "2(5) Persons engaged in work as employees under a collective agreement are exempted from application of (a) Sections 37, 38,39,40,41, 42 and 43; and (b) Sections 71, 72, 73, 74, 75, 76, 77 and 78 of the Code." Mr. Conrad was employed by Scott Maritimes from December 6, 1976, until he was discharged January 30, 1992. For the first eight years he was a member of a bargaining unit covered by a collective agreement, and therefore exempted from the application of the sections set out in regulation 2(5), which include s. 71. From March 31, 1984, until his dismissal he was a supervisory employee and therefore not exempt from the application of the listed provisions. Justice Roscoe, writing for the court, found he was entitled to count his employment during the years he was covered by the collective agreement in order to claim tenure pursuant to s. 71. She stated: "The plain meaning of s. 2(o) does not allow for reading in of exceptions. If it were the intention of the legislature to exclude any periods of service from the calculation of period of employment, it would have been easy to say so, by adding words such as 'but does not include any period of time a person was engaged in work under a collective agreement.' " The operative language of s. 2(2) is strikingly similar to that of s. 2(5). To be exempted from the application of the Code, that is, from all of the provisions of the Code, is not different in principle from being exempted from the application of specific provisions of the Code when those are the provisions relevant to the matter under consideration. I am not able to distinguish the reasoning of Justice Roscoe in Scott Maritimes and I therefore would adopt it and, if it were necessary to do so, find that the period of Mr. Murphy's employment during which he was subject to the exemption could be included in the calculation of his total period of employment. It should be made clear that, while I have referred to Mr. Murphy's period of exemption as a matter of convenience, I have not found it necessary to conclude that s. 2(2) of the regulations actually applied to him. It has not been necessary nor, indeed, possible, on the materials before the panel to consider the matter in sufficient depth to justify coming to a conclusion that could impact on the whole class of professional persons who are also employees. The professions listed in s. 2(2) of the regulations are all identifiable as such because they have governing statutes and professional associations, but perhaps a more important characteristic is that their members, when practicing their professions, customarily offer their services to the public for a fee. An employee does not serve the public in the same sense. An employee serves only his or her employer, and his or her contact with members of the public is on behalf of the employer. An employee does not claim fees from the public but instead is paid a salary by the employer. Even though associate practitioners of firms may be considered employees of the partners, they still offer their services to the public for a fee. Clear public policy considerations can be discerned for exempting practitioners of these professions from the Labour Standards Code. The rationale for excluding employees who incidentally have professional qualifications is more elusive. Even though the practitioner retains membership in a governing professional association, even though the tasks of the work day may be identical, there is a subtle but obvious distinction between a person practicing a profession and an employee working for an employer. It is the difference between a solicitor-client relationship and a master-servant relationship, each of which is clearly recognized at law. While there may be overlapping, I am doubtful that a single relationship, such as that existing between Mr. Murphy and the City of Halifax, can, in the fullest sense, be both. Such a difference may have been apparent to the Governor in Council when professions were exempted by regulation from the provisions of the Labour Standards Code. There is sufficient uncertainty to warrant a careful analysis pursuant to s. 9(5) of the Interpretation Act if such were necessary for purposes of deciding this appeal. In my view it is not. Decisions or orders of the Tribunal are subject to the provisions of s. 20 of the Code: "20 (1) If in any proceeding before the Tribunal a question arises under this Act as to whether (a) a person is an employer or an employee; (b) an employer or other person is doing or has done anything prohibited by this Act, the tribunal shall decide the question and the decision or order of the Tribunal is final and conclusive and not open to question or review except as provided by subsection (2). (2) Any party to an order or decision of the Tribunal may, within thirty days of the mailing of the order or decision, appeal to the Appeal Division of the Supreme Court of Nova Scotia on a question of law or jurisdiction. (3) The practice and procedure in relation to an appeal under subsection (2) are the same as upon an appeal from the Trial Division of the Supreme Court." In my view the question before the tribunal went well beyond the determination of whether Mr. Murphy was an employee as contemplated by s. 20(1)(a). It involved a question of law related to the jurisdiction of the Tribunal over practitioners of professions exempted by s. 2(2) of the regulations who are in other respects employees within the meaning of the Code. The limited privative provision therefore does not apply in the circumstances of this appeal. The intention of the legislature is made clear by s. 20(3) which requires that decisions of the tribunal be dealt with in the manner of appeals from the Supreme Court of Nova Scotia. I would infer from that an intention by the legislature to impose a standard of correctness. The Supreme Court of Canada considered the standard of review to be applied to a statutory tribunal not protected by a privative clause in Pezim v. British Columbia (Superintendent of Brokers, [1994] 2 S.C.R. 557) Iacobucci J., writing for the court, analyzed the applicable standard of review as follows: "B. Principles of Judicial Review From the outset, it is important to set forth certain principles of judicial review. There exist various standards of review with respect to the myriad of administrative agencies that exist in our country. The central question in ascertaining the standard of review is to determine the legislative intent in conferring jurisdiction on the administrative tribunal. In answering this question, the courts have looked at various factors. Included in the analysis is an examination of the tribunal's role or function. Also crucial is whether or not the agency's decisions are protected by a privative clause. Finally, of fundamental importance, is whether or not the question goes to the jurisdiction of the tribunal involved. Having regard to the large number of factors relevant in determining the applicable standard of review, the courts have developed a spectrum that ranges from the standard of reasonableness to that of correctness. Courts have also enunciated a principle of deference that applies not just to the facts as found by the tribunal, but also to the legal questions before the tribunal in the light of its role and expertise. At the reasonableness end of the spectrum, where deference is at its highest, are those cases where a tribunal protected by a true privative clause, is deciding a matter within its jurisdiction and where there is no statutory right of appeal. See Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227; U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R.1048, at p. 1089 (Bibeault), and Domtar Inc. v. Quebec (Commission d'appel en matière de lésions professionnelles),[1993] 2 S.C.R. 756. At the correctness end of the spectrum, where deference in terms of legal questions is at its lowest, are those cases where the issues concern the interpretation of a provision limiting the tribunal's jurisdiction (jurisdictional error) or where there is a statutory right of appeal which allows the reviewing court to substitute its opinion for that of the tribunal and where the tribunal has no greater expertise than the court on the issue in question, as for example in the area of human rights. See for example Zurich Insurance Co. v. Ontario (Human Rights Commission),[1992] 2 S.C.R. 321; Canada (Attorney General) v. Mossop,[1993] 1 S.C.R. 554, and University of British Columbia v. Berg, [1993] 2 S.C.R. 353. The case at bar falls between these two extremes. On one hand, we are dealing with a statutory right of appeal pursuant to s. 149 of the Act. On the other hand, we are dealing with an appeal from a highly specialized tribunal on an issue which arguably goes to the core of its regulatory mandate and expertise. This Court's decision in Bell Canada v. Canada (Canadian Radio‑Television and Telecommunications Commission), [1989] 1 S.C.R. 1722 (Bell Canada), is particularly helpful in deciding the present case as it dealt with a statutory right of appeal rather than an application for judicial review. Gonthier J., writing for this Court, stated the following at pp. 1745-46: 'It is trite to say that the jurisdiction of a court on appeal is much broader than the jurisdiction of a court on judicial review. In principle, a court is entitled, on appeal, to disagree with the reasoning of the lower tribunal. However, within the context of a statutory appeal from an administrative tribunal, additional consideration must be given to the principle of specialization of duties. Although an appeal tribunal has the right to disagree with the lower tribunal on issues which fall within the scope of the statutory appeal, curial deference should be given to the opinion of the lower tribunal on issues which fall squarely within its area of expertise.' Consequently, even where there is no privative clause and where there is a statutory right of appeal, the concept of the specialization of duties requires that deference be shown to decisions of specialized tribunals on matters which fall squarely within the tribunal's expertise. This point was reaffirmed in United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316 (Bradco), where Sopinka J., writing for the majority, stated the following at p. 335: '...the expertise of the tribunal is of the utmost importance in determining the intention of the legislator with respect to the degree of deference to be shown to a tribunal's decision in the absence of a full privative clause. Even where the tribunal's enabling statute provides explicitly for appellate review, as was the case in Bell Canada, supra, it has been stressed that deference should be shown by the appellate tribunal to the opinions of the specialized lower tribunal on matters squarely within its jurisdiction. On the other side of the coin, a lack of relative expertise on the part of the tribunal vis‑à‑vis the particular issue before it as compared with the reviewing court is a ground for a refusal of deference.' In my view, the pragmatic or functional approach articulated in Bibeault is also helpful in determining the standard of review applicable in this case. At p. 1088 of that decision, Beetz J., writing for the Court, stated the following: '...the Court examines not only the wording of the enactment conferring jurisdiction on the administrative tribunal, but the purpose of the statute creating the tribunal, the reason for its existence, the area of expertise of its members and the nature of the problem before the tribunal.' " In the present case the interpretation of the Labour Standards Code and the regulations made under it as they relate to the jurisdiction over employees who are practitioners of exempted professions is not a matter within the core jurisdiction of the tribunal. Rather, it is a matter of law and jurisdiction properly within the ambit of the Court of Appeal. I would decline deference to the tribunal respecting this issue and hold it to a standard of correctness, which in my view was not met for the reasons stated above. Accordingly, I would allow the appeal and remit the complaint of the appellant pursuant to s. 71 of the Labour Standards Code to the Labour Relations Tribunal with a direction to the Director of Labour Standards to proceed under s. 21 to inquire into the complaint and endeavour to effect a settlement. While this is a tribunal appeal, I would allow costs against the City of Halifax and fix them at $1,000 plus disbursements. Freeman, J.A. Concurred in: Matthews, J.A. Roscoe, J.A.