COURT FILE NO.: 30/03

DATE: 20030630

SUPERIOR COURT OF JUSTICE – ONTARIO

(Divisional Court)

RE: Haimanot Abebe et al. v. Distinctive Designs Furniture Inc., Ministry of Labour and Ontario Labour Relations Board

BEFORE: Justices Lang, Somers, Epstein

COUNSEL: Ronald Lebi, for the Applicants

Michael D. Failes, for the Respondent, Distinctive Designs

Leonard Marvy, for the Respondent Ontario Labour Relations Board

HEARD: June 19, 2003

E N D O R S E M E N T

Lang J.

The Issue

[1] These employees seek to quash a decision of the Ontario Labour Relations Board (O.L.R.B. or the Board) dismissing their application for review regarding the refusal of the employer, Distinctive Designs Furniture Inc. (Distinctive Designs) to pay holiday pay under the Employment Standards Act, R.S.O. 1990, c. E.14 (the Act).

The Facts

2The collective agreement expired on May 31, 2001. The employees notified the employer on June 29 that they elected to begin a lawful strike as of Wednesday, July 4. The employer designated July 4 as the employees’ first regularly scheduled workday after the Monday, July 2, Canada Day, public holiday. On July 4, the employer’s business was in operation. Some employees reported for work. Sixty-eight employees elected to engage in the lawful strike; the striking employees returned to work on July 12. They sought statutory holiday pay for Canada Day on the basis that their first scheduled day of work after July 2 was July 12 and that they had reported to work on that day.

3The applicant employees did not suggest in their application that the employer had attempted to manipulate the holiday pay issue by scheduling Wednesday, July 4 as their next workday instead of Tuesday, July 3. Rather, the applicants argued that their first scheduled workday after July 2, was July 12. The case before the Board turned, therefore, on whether July 4 or July 12 was their first scheduled day of work after the public holiday.

4When the employer refused them the holiday pay, the applicants complained to an employment standards officer, who dismissed their complaint. The applicants applied to the O.L.R.B. for a de novo hearing and review of that decision. The Board found that the striking employees were not entitled to statutory holiday pay because July 4, and not July 12, was their first “scheduled day of work” following Canada Day. The applicants seek judicial review to quash this decision.

The Standard of Review

5There are only three standards of judicial review for administrative decisions: correctness, reasonableness, and patent unreasonableness. Reasonableness is the appropriate standard of review of the Board’s decision interpreting the Act: United Steelworkers of America, Local 14097 v. Franks et al. (1994), 110 D.L.R. (4^th) 762 (Ont. C.A.) at pp. 765-766; Crown Cork & Seal Canada Inc. v. Halloran et al. (2002), 217 D.L.R. (4^th) 327 (Ont. C.A.).

6In Law Society of New Brunswick v. Ryan, 2003 SCC 20, [2003] S.C.J. No. 17, Iacobucci J. said, at paras. 55 and 56, that in reviewing a decision for reasonableness, the court must not ask itself whether the decision is correct because:

A decision will be unreasonable only if there is no line of analysis within the given reasons that could reasonably lead the tribunal from the evidence before it to the conclusion at which it arrived. If any of the reasons that are sufficient to support the conclusion are tenable in the sense that they can stand up to a somewhat probing examination, then the decision will not be unreasonable and a reviewing court must not interfere (see Southam, supra, at para. 56). This means that a decision may satisfy the reasonableness standard if it is supported by a tenable explanation even if this explanation is not one that the reviewing court finds compelling (see Southam, supra, at para. 79).

This does not mean that every element of the reasoning given must independently pass a test for reasonableness. The question is rather whether the reasons, taken as a whole, are tenable as support for the decision. At all times, a court applying a standard of reasonableness must assess the basic adequacy of a reasoned decision remembering that the issue under review does not compel one specific result. Moreover, a reviewing court should not seize on one or more mistakes or elements of the decision which do not affect the decision as a whole.

7On the standard of reasonableness, the applicants submit that the O.L.R.B., while expert in the area of labour relations, has no particular expertise in the area of employment standards. This is demonstrated, argues counsel, by the apparent error on the part of the Vice-Chair where she referred to the August Civic Holiday as a statutory holiday, which it is not. On the other hand, the O.L.R.B. has recognized expertise in the area of labour relations and the question at issue relates to the proper characterization of an employee’s absence from work during a lawful strike. In any event, the Supreme Court of Canada in Ryan, supra, is clear that there is not a “spectrum” of reasonableness. The only question is whether the applicants have established that the Board’s decision is not “supported by a tenable explanation.”

The Legislation

8Section 25 of the Act, obliges employers to pay employees for certain public holidays, including Canada Day, unless disqualified. An employee is disqualified, by s. 25(1)(c), from holiday pay if he or she “fails to work his or her scheduled day of work following a public holiday.”

The Interpretation

9The Supreme Court of Canada has provided interpretative guidance for this Act. The Act’s provisions should be construed in a broad and generous manner taking into consideration the context in which they appear. In Re Rizzo and Rizzo Shoes Ltd. (1998), 154 D.L.R. (4^th) 193 (S.C.C.) at 204, Iacobucci J. said:

… Elmer Driedger in Construction of Statutes, 2nd ed. (Toronto: Butterworths, 1983) best encapsulates the approach upon which I prefer to rely. He recognizes that statutory interpretation cannot be founded on the wording of the legislation alone. At p. 87 he states:

Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

Recent cases which have cited the above passage with approval include: R. v. Hydro-Québec, [1997] 1 S.C.R. 213, 151 D.L.R. (4^th) 32; Royal Bank of Canada v. Sparrow Electric Corp., [1997] 1 S.C.R. 411, 143 D.L.R. (4^th) 385; Verdun v. Toronto-Dominion Bank, [1996] 3 S.C.R. 550, 139 D.L.R. (4^th) 415; Friesen v. Canada, [1995] 3 S.C.R. 103, 127 D.L.R. (4^th) 193.

I also rely upon s. 10 of the Interpretation Act, R.S.O. 1980, c. 219, which provides that every Act "shall be deemed to be remedial" and directs that every Act shall "receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit".

Although the Court of Appeal looked to the plain meaning of the specific provisions in question in the present case, with respect, I believe that the court did not pay sufficient attention to the scheme of the ESA, its object or the intention of the legislature; nor was the context of the words in issue appropriately recognized. …

10The purpose of the Act, as articulated by the Supreme Court of Canada, is for the protection of employees who find themselves in an unequal bargaining position in relation to their employers: Machtinger v. HOJ Industries Ltd. (1992), 91 D.L.R. (4^th) 491 at 507 reversing 1988 4645 (ON CA), 55 D.L.R. (4^th) 401. Any doubt arising from the interpretation of this legislation is to be resolved in favour of the claimant: Abrahams v. Attorney-General of Canada, [1983] 1 S.C.R. 2 at p. 7, 142 D.L.R. (3d) 1. Both Rizzo, supra, and Abrahams, it is worth noting, were appeals interpreting the legislation at first instance rather than applications to judicially review a decision of the Board.

11Before the Board, the employees argued that the use of the words “fails” in the disqualification subsection implies a fault-based disqualification, which requires some kind of shortcoming on the part of the employee. Striking on July 4, rather than working, was a lawful act on the part of the employees, for which they could not be faulted. They argued that, accordingly, their first “scheduled day of work” following the holiday was July 12. To consider this argument it is necessary to look purposively at the reasons for holiday pay and for disqualification from holiday pay.

12The Ministry of Labour’s, Employment Standards Act of Ontario: Policy and Interpretation Manual, Carswell: at pp. 13-26 (the Manual) provides three rationales for an employee’s right to holiday pay, including “the payment of an entitlement earned through daily work.” Holiday pay, argue the employees, is compensation for past services performed. Public holiday pay is an employee’s “right,” an “earned benefit.” The employer, on the other hand, argues that public holidays are not negotiated between employee and employer. They are statutorily imposed. The Board, the employer submits, has not adopted public holiday pay as an “earned benefit.” Further, says the employer, a Vice-Chair is required to give effect to unambiguous wording used in the statute.

13While the purpose of section 25 is to give employees the benefit of holiday pay, the purpose of subsection 25(1)(c) is to offer protection to employers by deterring employees from “holiday stretching.” The subsection is intended to remove the benefit of holiday pay from employees who fail to come to work the day after a statutory holiday in order to extend their time away from work. This is why the provision is referred to as the “abuse clause” in the Manual. While the Act as a whole is intended to provide safeguards for the vulnerable employee in an unequal bargaining power with an employer, this particular provision serves to protect employers from employees who might unreasonably lengthen their time away from the employer’s operation.

The Reasons

14There is apparently no case law on point, although all counsel agree that employers are not entitled to pay for public holidays that fall within a strike period. Employers have always been permitted to schedule employees during a strike except for a brief period from 1992 – 1995 where this right was removed under certain conditions pursuant to the Labour Relations and Employment Statute Law Amendment Act 1992, which was repealed in 1995. All counsel also agree that an employer is at liberty to continue its operation during a strike, as did Distinctive Designs in this case. Where the employer continues its operation, it is entitled to schedule employees to work. Those employees may choose to work, as did some employees of Distinctive Designs. Other employees may choose to participate in the lawful strike, as did the applicants in this case.

15In its reasons, the Board reviewed two lines of arbitral authority arising from collective agreements. Different arbitrators arrived at different results in determining whether an employee had worked the qualifying day before or after a public holiday. Many of the cases involve situations where, on the relevant day, the employee was absent from work as the result of an action taken by the employer. Such an absence was sometimes the result of a lay-off, a suspension, or by the employer’s manipulation of work schedules during a lawful strike. The Board reviewed a number of authorities including two leading cases that arrived at different interpretations: Re Olsonite Manufacturing Ltd. (1977), 14 L.A.C. (2d) 234 (O’Shea); Re 3M Canada Inc. (1982), 4 L.A.C. (3d) 420 (Picher). Other cases were brought to our attention: Re Galco Food Products (1978), 18 L.A.C. (2d) 220 at 221 (Beck) (a lay-off case); Re United Automobile Workers, Local 252, and Canadian Trailmobile Ltd. (1966), 17 L.A.C. 189 (Arthurs) (an employee suspended by the employer); Re United Automobile Workers, Local 1607, and Comco Metal Products Ltd. (1971), 22 L.A.C. 363 at 367 (a lay-off case).

16In her reasons, the Vice-Chair specifically interpreted the provision in its context. She noted that the purpose of the provision was to deter “employees who might otherwise be so inclined from absenting themselves on one or both of those days and making a long weekend even longer.” (para. 17). She noted that arbitrators’ findings of entitlement to holiday pay were “not surprising” where the employees were absent “due to some action of the employer’s (lay-off or lockout).” From this, the Vice-Chair recognized that employees are entitled to holiday pay. They are not to be deprived of this entitlement by an action taken by the employer.

17She noted at para. 18 that there is a difference between holiday pay under the Act and holiday pay under a collective agreement. Under a collective agreement, employees are not entitled to pay “for public holidays during the period of time when no collective agreement is in effect.” She further noted that the effect of the employees’ argument was that employees on strike from August to October would be entitled to be paid for the three public holidays that fell within that timeframe. (While the Vice-Chair’s specific example is not accurate, and may demonstrate a lack of familiarity with the particulars of the Act, such a windfall would occur in the timeframe of ten weeks from December 22, which does contain three public holidays.)

18The Vice-Chair found such a result would be an “unreasonable” interpretation. Only after applying a contextual approach, did the Vice-Chair find that a “plain reading of the language” led her to conclude that July 4 was a regularly scheduled day of work. Further, the Vice-Chair recognized that her interpretation might permit an employer to manipulate work schedules prior to a strike or on recall from a strike, but went on to note that “bargaining agents are well placed to conduct themselves to avoid that outcome.” (para. 19)

19The applicants were able to ensure payment under the Act simply by choosing an appropriate date of commencement of their lawful strike. In other words, the purpose of the Act to protect employees in vulnerable positions from manipulative employers did not apply in the circumstances of this case.

20Under the applicable standard of review, we are to avoid looking at whether the Vice-Chair was correct. Reading her reasons as a whole, her decision is supported by a tenable explanation in keeping with a purposive interpretation of s. 25(1)(c) of the Act, even if it is not one that this court might find compelling. It is a reasonable decision.

21Accordingly, the application for judicial review is dismissed.

22The Board is not claiming costs. Distinctive Designs may make written submissions as to costs through the Registrar within 30 days. The applicants may make responding submissions within 20 days thereafter.

Lang J.

Somers J.

Epstein J.