Labourers' International Union of North America, Local 183 v. Torbridge Construction Ltd., 1997 CanLII 15594

[1997] OLRB REP. JULY/AUGUST 751

1633-96-U Labourers' International Union of North America, Local 183, Applicant v. Torbridge Construction Ltd., Responding Party

BEFORE: G. T Surdykowski, Vice-Chair.

APPEARANCES: E. M. Mitchell for the applicant; Joseph Liberman, Carmine Giardino and Alan Freedman for the responding party.

DECISION OF THE BOARD; July 31, 1997

I Introduction

[1]. This is a complaint under section 96 of the Labour Relations Act, 1995 in which the applicant trade union ("Local 183") alleged that the responding employer ("Torbridge") treated Manuel Lopes in a manner contrary to sections 5, 70, 72 and 76 of the Act. More specifically, Local 183 alleged that Lopes, who had been employed by Torbridge from on or about August 10, 1992, was discharged on September 13, 1995 because he had requested a wage increase and exercised, or sought to exercise, rights under the collective agreement between the parties and under the Act, and because he had refused to continue to perform certain favours for certain managerial employees of Torbridge. Local 183 further alleged that Torbridge refused to recall or re-hire Lopes for the 1996 and 1997 construction seasons for the same improper reasons. In paragraph 14 of Schedule "A" to the complaint, Local 183 submitted that Torbridge:

(a) sought to prevent persons from participating in the lawful activities of a trade union, contrary to section 5 of the Act;

(b) interfered with the formation, selection and administration of a trade union and the representation of employees by a trade union, contrary to section 65 of the Act;

(c) sought by threat of dismissal and other kinds of threats, the imposition of pecuniary and other penalties and by other means to compel employees to refrain from becoming or cease to be members of a trade union and to cease to exercise rights under the Act, contrary to section 72 of the Act;

(d) sought by intimidation and coercion to compel employees to refrain from becoming or to cease to be members of a trade union and to refrain from exercising other rights under the Act, contrary to section 76 of the Act;

(e) dismissed an employee without just cause, contrary to Article 6 of the collective agreement.

[2]. In its complaint, Local 183 requested the following relief:

(1) A declaration that the Responding Party has violated the Labour Relations Act, as set out in this complaint

(2) An order that the Responding Party cease and desist from violating the Labour Relations Act.

(3) An order that the Responding Party sign and post a notice of its violation of the Labour Relations Act, and deliver a copy of the Board's decision and the notice to each employee in the bargaining unit, at its own expense, during working hours.

(4) An order that the Responding Party immediately reinstate Manuel Lopes and reimburse him for all lost wages and benefits.

(5) Such further and other relief as may be appropriate in the circumstances.

[3]. This complaint was filed on September 4, 1996, at the same time as a referral to the Board of a grievance in the construction industry under section 133 of the Act (Board File No. 1 626-96-G) in which Local 183's pleadings were identical as those in this complaint, although the relief requested was different in that it was limited sort of relief which is typically requested in a grievance of this nature.

[4]. The complaint and grievance referral were both filed as a direct result of the settlement of a section 96 complaint by Lopes against Local 183 in which he alleged that the union had violated sections 71 and 75 of the Act, in relation to events in 1995 and 1996 involving Lopes and Torbridge (see Board decision dated June 12, 1996, unreported, in Board File No. 0577-96-U).

[5]. The complaint herein and the grievance referral came on for hearing together, before a differently constituted panel of the Board (the "Nairn panel") to deal with a motion by Torbridge requesting that the complaint and grievance be dismissed on the basis of delay. By decision dated February 14, 1997 (unreported), the Nairn panel granted the motion in part. The grievance was dismissed, but this complaint was allowed to proceed, and it eventually came before me beginning on June 9,1997.

II The Issue of Liability

[6]. In accordance with the reverse onus provisions in section 96(5) of the Act, Torbridge proceeded first. The company called three witnesses: Carmine Giardino, sole owner and president of the company; Victor Alves, a foreman; and Moses Cordeiro, also a foreman.

[7]. After the company closed its case, counsel for Torbridge advised the Board that the company conceded that there had been a violation of the Act, and that on the basis of the evidence and the agreement of the parties, Torbridge was prepared to consent to a declaration that it had breached section 76 of the Act. The parties were no more specific than that.

[8]. In the circumstances, and having regard to the evidence and representations of counsel, I take the agreement of the parties to be that part of the submissions of Local 183 in paragraph 14(d) of Schedule "A" to its complaint has been made out; that is, that Torbridge sought by intimidation and coercion to compel Lopes to refrain from exercising rights under the Act.

[9]. With respect, the responding party's concession reflects a very realistic assessment of its case. Indeed, it seems to me that Torbridge's own evidence also suggested a breach of section 72(a) of the Act. However, in this decision, I will limit myself to the declaration agreed to by the parties with respect to the question of liability, particularly since there was no suggestion that limiting the declaration in that manner to a breach of section 76 would have any effect on the remedy which can be awarded by the Board in this complaint.

III Remedial Issues

[10]. Local 183 sought the following specific remedies (in addition to the declaration as afore­said):

(1) the immediate reinstatement of Lopes to employment with Torbridge, or a direction that Lopes be re-employed by Torbridge this year, and during the next (1998) construction season, in accordance with a pattern established in that respect;

(2) damages for the lost wages or benefits Lopes would have received but for the breach of the Act by Torbridge.

[11]. Counsel for Local 183 identified the following issues in that respect:

(a) whether reinstatement is appropriate;

(b) mitigation of damages;

(c) the effect of delay on damages;

(d) quantum of damages.

In the course of argument, another issue emerged: the effect that should be given to the workers' compensation benefits received by Lopes between May 22 and October 23, 1996.

[12]. Counsel for Torbridge joined issue on the issues identified by counsel for Local 183. The company opposes reinstatement, and asserts that no damages should be awarded because of the delay in bringing the complaint and Lopes' failure to mitigate his damages. The company also asserts that the workers' compensation benefits received by Lopes should be deducted from any damages which are awarded.

[13]. (I note that it was common ground between the parties that the question of what effect, if any, delay should have is limited to the delay in bringing this complaint, and the effect that has regarding the responsibility for the damages suffered by Lopes as between Torbridge on one hand, and Local 183 and Lopes taken together on the other. Any issue of apportionment of responsibility for delay as between Local 183 and Lopes is not before the Board in this complaint.)

[14]. Lopes was the sole witness to testify with respect to the issue of remedy. It was common ground that it is appropriate for the Board to also consider the other evidence which was already before the Board to the extent that it is relevant to remedy.

(a) Reinstatement

[15]. Turning first to the issue of reinstatement, I have already noted that Torbridge opposes this remedy. However, the company concedes that reinstatement is one of the common remedies for breaches of the Act of the sort Torbridge has conceded it has committed in this case. Indeed, reinstate­ment is the usual remedy in such cases. It is the rare case in which the Board will not reinstate an employee who seeks it.

[16]. This is as it should be. As a general matter, an employee is entitled to be put into the position s/he would have been in but for the employer's breach of the Act. Where an employer has discharged an employee in violation of the Act, it is appropriate for the Board to reinstate the employee in employment, unless the employer satisfies the Board that there is a cogent reason not to do so. I am not satisfied that Torbridge has offered any such cogent reason in this case.

[17]. Peralta Foods, [1987] OLRB Rep. Sept. 1162 and Saco Fisheries Limited, [1988] OLRB Rep. Oct. 1087, both "fisheries" cases, are two of the relatively small number of cases in which the Board has declined to order reinstatement. In Peralta Foods, the Board was concerned that the employer had ceased operating, and in Saco Fisheries the Board was concerned that reinstatement would have required the employer to either put another boat to work or lay-off seven current crew members. Certainly, it is appropriate to consider whether a reinstatement order has any meaning in circumstances in which an employer has ceased operating, but, with respect, I do not think that the fact that an employee who would not otherwise have had a job in the first place may be laid off as a result of a reinstatement order is a particularly significant consideration. Nor is this a case like Environmental Abatement Services Inc., (unreported OLRB decision, file no. 1815-93-OH, August 5, 1994). Lopes' employment with Torbridge was not "transitory" in the sense which concerned the Board in that case. Indeed, that is a significant point in this complaint.

[18]. Further, the fact that under the collective agreement Torbridge was entitled to lay-off without regard to seniority, or that it was entitled not to recall Lopes is of no more assistant to the company than it was (or would have been) as a defence on the issue of liability - which is to say that it is of no assistance at all. The grievance having been dismissed, the collective agreement is not directly in issue here, and while the rights of the parties and Lopes under the collective agreement form part of the context of the complaint, the issue is not one of rights under the collective agreement, but of rights under the Labour Relations Act, 1995, which Torbridge, on its own evidence and admission, has breached.

[19]. One of the arguments put forward by Torbridge against reinstatement was to the effect that it virtually guarantee Lopes permanent employment with the company forever. Torbridge's fear is that if it is required to reinstate Lopes and then subsequently discharges him or does not recall him to work that it will be faced with another unfair labour practice complaint. That may be true, and if that happens, and if a prima facie case is made out on the pleadings, the Board will deal with the complaint as it deals with all other such complaints, including this one. Surely, an employer which has violated the Act in the manner that Torbridge has in this case cannot be heard to say that a person should be denied the usual remedy because its future conduct with respect to the employee might be viewed with suspicion. That may be true, but the employer has created the situation. Having made its bed, it must lie in it. I am not persuaded that Torbridge's fear that it may in the future be called to answer for its treatment of Lopes is a reason not to reinstate Lopes to employment.

[20]. In the result, I am not satisfied that there is any good reason not to reinstate Mr. Lopes.

[21]. However, the (agreed) fact is that Torbridge's operations will be significantly curtailed at the end of July 1997, and that the company expects to have only some eight employees working after that through to mid-September, 1997. Having regard to this, and to the pattern of Lopes' employment with Torbridge as demonstrated by the evidence, I will not require Torbridge to reinstate Lopes at this time unless it has at least 20 employees who have not yet received lay-off notices. However, if at any subsequent time in 1997, Torbridge wishes to expand its employee complement to more than 20 employees, Lopes is to be the first person to be offered the 21st position, which offer is to be made to him directly in writing, with a copy to Local 183, and which offer if made pursuant to this direction will be deemed not to be a violation of the collective agreement which has been in issue (i.e. the collective agreement between the Heavy Construction Association of Ontario and Local 183 ) or any other applicable collective agreement, as the case may be. I will deal with the question of employment in 1998 below.

(b) Damages

[22]. In the normal course, Mr. Lopes would be entitled to damages for all wages and benefits which he would have received, but for the employer's breach of the Act. This raises issues concerning how such damages are to be calculated, and whether the amount which Lopes is entitled is affected by the delay in bringing this complaint, his conduct in litigation, or the workers' compensation benefits he received in 1996.

(i) Delay

[23]. The jurisprudence demonstrates that the Board's approach to delay, whether when consider­ing whether an application or complaint should be entertained at all or when considering questions of remedy, is not a mechanical one. Each situation is examined and determined according to the merits of the particular case.

[24]. As a general matter, however, the Board recognizes that situations are not always as clear at the time that events are unfolding as they are (or appear to be) in hindsight. In some cases, it is only with the passage of time that the basis for a complaint to the Board becomes apparent. It has long been accepted that delay is inimical to labour relations, and that the speedy resolution of labour relations disputes is both a matter of public interest and in the interest of those who are directly involved (see, for example, Journal Publishing Co. of Ottawa Ltd. v. Ottawa Newspaper Guild, Local 205, OLRB et al, [1977] 1 A.C.W.S. 817 (Ontario Court of Appeal); The Corporation of the City of Mississauga, [1982] OLRB Rep. Mar. 420; Re Dhanota and U.A.W Local 1285 (1983) 1983 CanLII 1655 (ON HCJ), 42 O.R. (2d) 73, a decision of the Ontario Divisional Court dismissing an application for judicial review of the Board's decision in Sheller-Globe of Canada Limited, [19821 OLRB Rep. Jan. 113; Re United Headwear and Biltmore-Stetson (Canada) Ltd. v. National Automobile, Aerospace and Agricultural Implement Workers Union of Canada, (CAW - Canada), (1983) 1983 CanLII 1852 (ON HCJ), 41 O.R. (2d) 287; Dayco Canada Ltd. v. National Automobile, Aerospace and Agricultural Implement Workers Union of Canada (CAW - Canada), 1993 CanLII 144 (SCC), [1993] 2 S.C.R 230 (Supreme Court of Canada). But speed is not the only objective, and justice and fairness demands that someone who may be aggrieved have a reasonable opportunity to recognize that s/he may have a complaint, to formulate a position and plan of action, to seek legal advice or representation, and to actually plead and file a complaint.

[25]. Accordingly, and while there is no fixed rule, in cases which involve a loss of employment or employment opportunities, the Board has developed a one year rule of thumb. When dealing with a motion to dismiss on the basis of delay, the Board will generally not dismiss a complaint which makes out a prima facie case where the delay is measured at less than one year, unless the responding party demonstrates actual prejudice resulting from the delay, the applicant offers no satisfactory explanation for it, and the Board is satisfied that it would be unfair or otherwise inappropriate to permit the matter to proceed. On the other hand, where the delay exceeds one year, prejudice to the responding party is presumed, and the onus shifts to the applicant to provide a satisfactory explanation.

[26]. The same approach is appropriate when it comes to considering the effect of delay when it comes to remedy. Delay which may not result in a complaint being dismissed without a hearing on the merits may nevertheless affect the remedy, including the amount of or responsibility for damages to which a party or person claiming through a party might otherwise be entitled. Whether or not the delay in bringing a complaint has such an effect will depend on the circumstances of the particular case (see, for example, James N. Krall, [1993] OLRB Rep. June 39; Jeanne St. Pierre, [1986] OLRB Rep. June 883; Central Stampings Limited, [1984] OLRB Rep. Feb. 215).

[27]. In this case, the complaint was filed on September 4, 1996, less than one year after Lopes was discharged by Torbridge, and only some five months after Lopes would reasonably have expected to be recalled to work in 1996 (see paragraph 65, below).

[28]. The only prejudice which Torbridge even implicitly asserts is that the delay has increased its exposure in terms of the amount of damages which may be awarded to Lopes. This is not a particularly compelling argument in the circumstances of this case. First, that is always an effect of delay, and does not constitute the sort of prejudice which concerns the Board; namely, the ability to fairly respond to or otherwise deal with a complaint or allegation of unlawful conduct. Second, in this case, there was no suggestion that Lopes' work was unsatisfactory. Re may have had some conflict with Alves in 1994, but that did not result in any discipline or cause Torbridge not to re-hire him (albeit somewhat later) in 1995. The company could have re-hired Lopes at any time after October 23, 1996 when he was fit for work after this complaint was filed, without prejudice to its position in this case. Indeed, Torbridge could have re-hired Lopes at any time after it became aware of this complaint. In that respect, a representative of Local 183, (Leo D'Agostini) telephoned Giardino at the end of March or in early April, 1996 about it, and provided him with a copy of a letter (Exhibit #7) in which Lopes complained about the lay-off. There was a further discussion between another Local 183 representative (Roger Quinn) and Giardino in May 1996, and in mid-June 1996 the union filed the grievance. Accordingly, from as early as the end of March 1996, at approximately the time that Lopes would reasonably have expected to be recalled by the company (see below), Torbridge knew or ought to have known about Lopes' compliant about his discharge and the failure of the company to recall him in 1996. There could have been no doubt in that respect when the grievance was delivered some two and a half months before this complaint was filed. Instead, the company persisted in its position, which it is now acknowledged was a breach of the Act.

[29]. In this complaint, Local 1 83 and Lopes must be considered as a single party for the purposes of examining the delay in bringing the complaint (see paragraph 13, above), regardless of any consideration of how responsibility for any of the delay should be apportioned as between them. In that respect, I do not think that it was at all unreasonable for the applicant to take Torbridge at its word that the "lay-off' on September 13, 1995 was bonafide and due to a shortage of work and to see what developed, particularly since activity in the construction industry, especially in the heavy engineering and road sectors, generally begins to decline in the Fall, and virtually stops during the Winter, and Lopes was eligible for employment insurance benefits. It was only in the spring of 1996 that it became clear that the "lay-off' was really a discharge, and that Torbridge had no intention of re-hiring Lopes, at which time Local 183/Lopes began actively pursuing the matter, which pursuit eventually lead to this complaint being filed.

[30]. In all the circumstances, I find that the delay in filing this complaint was not unreasonable, and should not operate to reduce the damages to which Lopes is otherwise entitled.

(ii) Mitigation

[31]. There is no doubt that there is a duty to mitigate damages which applies to proceedings before the Board, whether under the Act or other Legislation under which the Board has jurisdiction. What that duty consists of is another question, however. Proceedings before the Board have to do with the enforcement of important statutory rights. They are not civil proceedings, whether for wrongful dismissal or otherwise, and the Board has long recognized that the traditional common-law notion of the duty to mitigate is a poor fit in the context of unlawful discharge proceedings in which, as I have already noted, the usual remedy includes reinstatement (RI. Walbank Manufacturing Company Limited, [1980] OLRB Rep. Dec. 1797; Beckett Elevator, [1986] OLRB Rep. Nov. 1493). Accordingly, as the Board noted in Jacmorr Manufacturing Limited, [1987] OLRB Rep. Sept. 1086, caution must be exercised when common-law concepts are applied in Board proceedings. (Indeed, the Canada Labour Relations Board appears not to automatically apply any duty to mitigate to an employee who is discharged contrary to the Canada Labour Code. However, the Canada Board will deduct any income earned during the period between discharge and reinstatement from damages. See, for example, Larose­PaquetteAutobus Inc., (1992) C.L.L.C. ¶16,064; Samuel John Snivel) (1985) 12 C.L.R.B.R. (N.S.) 97; Gerald M. Massicotte, [1980] 1 Can. L.R.B.R. 427, affd. 1980 CanLII 4324 (FCA), [1982] 1 F.C. 216 sub no/n Teamsters Union, Local 938 and Massicotte 119 D.L.R. (3d) 193 (C.A.), affd. 1982 CanLII 18 (SCC), [1982] 1 SCR 710 (S.C.C.).) In the result, statutory and policy considerations in labour relations matters create a situation in which the duty to mitigate is more moderate than that imposed by the common-law, in wrongful dismissal actions for example. In addition, as the Board also pointed out in Jacmorr, supra, at paragraph 20:

There are already powerful practical pressures on a complainant to seek alternative work. After all, he must still eat, and pay the rent, and he always faces the risk that his complaint will not succeed. It is unlikely that very many workers can really afford to remain idle for very long, awaiting a "windfall" at their employer's expense; and to the extent that he does earn income elsewhere, such sums should be deducted from any subsequent compensation award. However an employee discharged contrary to the Act is not like an employee wrongfully dismissed with no right or expectation of reinstatement. An unfair labour practice complainant need not devote his full energies to seeking permanent work elsewhere, nor must he discontinue his union activities in connection with his former workplace. He is entitled to conduct himself as if he were an employee temporarily and unlawfully put out of work, who will be returning to his job as soon as the litigation process can be completed. Of course, if he misjudges the strength of his case, he may find himself without any job or compensation at all.

[32]. In the result, there is a duty on persons who come before the Board seeking damages for a breach of the Act. However, the legal and policy considerations in labour relations proceedings are such that it is appropriate that this duty be somewhat less onerous than the common-law duty which applies in civil cases. Whether a person whose complaint is that s/he has been discharged or denied employment in breach of the Act has acted reasonably in that respect depends on the circumstances. Further, where a responding party (generally an employer) alleges the failure to mitigate, there is a heavy onus on it to show two things: that reasonable steps to mitigate were not taken; and that damages would have in fact been reduced if reasonable steps had been taken (Bond Place Hotel, [1983] OLRB Rep. Jan. 24; in a collective agreement arbitration context see Brown and Beatty, Canadian Labour Arbitration, (3rd), a loose leaf service, at 2:1412 and 3:2412; in a wrongful dismissal context a decision to the same effect in Peterson v. Labatt Breweries, (1997)1996 CanLII 1059 (BC SC), 25 C.C.E.L. (2d) 241 (B.C. Supreme Court) relying on Michaels v. Red Deer College, (1976) 1975 CanLII 15 (SCC), 57 D.L.R. (3d) 386 (Supreme Court of Canada) and Jorgenson v. Jack Cewe Ltd., (1978) 1978 CanLII 397 (BC CA), 9 B.C.L.R. 292 (B.C. Court of Appeal), (appeal the Supreme Court of Canada dismissed 1980 CanLII 177 (SCC), [1980] 1 S.C.R. 812).

[33]. In this case, Torbridge has failed to satisfy me that Lopes did not make reasonable efforts to mitigate his damages, or that he would have been successful in that respect had he done so. The question is not whether Lopes could have done more. I think he could have, but I also think he did enough.

[34]. Lopes registered with Local 183's hiring hall immediately after he was discharged by Torbridge on September 13, 1995. He could have done more in pursing employment opportunities through Local 183's hiring hall, but having regard to his reasonable albeit incorrect understanding of how the hiring hall operated, and the distance between his home in Cambridge and the hiring hall in Toronto, I cannot say he was required to do more. In addition, employment opportunities in the construction industry generally decrease in the fall so that it is difficult for construction employees to find new employment, particularly with employers with which they have no prior connection. Further, at that time it was not unreasonable for Lopes to think that he would be re-hired by Torbridge in the spring of 1996, and to do what many construction workers do (and what he had himself done previously); namely, take advantage of employment insurance benefits in the interim. When it became apparent that there was a problem with Torbridge in terms of re-employment, Lopes both stepped up his complaints to Local 183 with respect to the matter and sought and obtained further employment (with Joe's Masonry). Unfortunately, he was injured after working only four days, but he was clearly motivated to return to work as demonstrated by his efforts to find employment while he was disabled and receiving Workers' Compensation benefits, by his attempts to persuade his doctor that he was able to return to work, and by the fact that he returned the last cheque he received from the Workers' Compensation Board. On the evidence, Lopes is not a malingerer.

[35]. Lopes was not declared fit for work again until October 23, 1996, late in the construction season. Giardino's testimony to the effect that there was a lot of construction work available in 1996 was not specifically identified with the period after October 23rd, 1996, and Torbridge's records indicate that its own operations wound up earlier than they had in the pervious years.

[36]. In 1997, Lopes continued to look for work, and finally found it at Arjune Engineering & Manufacturing Limited.

[37]. In assessing the evidence and situation as a whole, I cannot ignore the fact that Local 183 appears to have been less than responsive to Lopes' concerns or complaints concerning either the termination of his employment by Torbridge on September 13, 1995, or the failure of Torbridge to recall him to work in 1996. This is apparent both on the evidence, and in the settlement, (which was not made without prejudice or without admission of liability) of Lopes' complaint against Local 183 which lead to this complaint. Consequently, I consider it likely that Local 183's records are less than an accurate reflection of Mr. Lopes contacts with its hiring hall after September 13, 1995 and in 1996, although I also think it unlikely that Lopes either telephoned or went to the hiring hall as often as he testified he recalled doing. In that respect, I do not suggest that I believe that Lopes was trying to mislead the Board, only that his recollection is not as good as he thinks. In addition, the parties agreed that internal chaos in Local 183 in February and March 1996 resulted in incomplete hiring hall records during that period.

[38]. Nevertheless, I am satisfied that Lopes did contact the hiring hall more than the three times the hiring hall records suggest. I am satisfied that he did so immediately upon being laid off by Torbridge on September 13, 1995, and several times after that in 1995. I am also satisfied that he had some, albeit infrequent, contact with the hiring hall prior to May, 1996. Re could have been more persistent in that respect, but I am satisfied that there were two major reasons why he wasn't: first, he still hoped and expected to be recalled by Torbridge; and, second, he misunderstood how the hiring hall out-of-work list is operated by Local 183. (In that latter respect, his understanding was that it operated in the way that many other construction trade unions' hiring halls operate and was not unreasonable, although he could also have made inquiries in that respect.)

[39]. Lopes was not recalled by Torbridge in 1996 and did not find other employment until May, 1996. In the result, he was unemployed, receiving employment insurance benefits from September 14, 1995 to May 13, 1996.

[40]. On May 14, 1996, Lopes began work as a bricklayer with a company called "Joe's Ma­sonry". Unfortunately, he worked only four days (May 14, 15, 17 and 21, 1996) before he was injured at work. (I note that Mr. Lopes testified that he has not been paid for those four days, but that is a matter between him and Joe's Masonry.)

[41]. The injury Lopes' suffered was a compensible one, and he received workers' compensation benefits totalling $8,396.01 between may 22 and October 23, 1996. Re received a subsequent cheque from the workers' compensation board in the amount of' $758.85, which he returned because he had been declared fit to work. Lopes continued to be unemployed until April 30, 1997, when he obtained work at Arjune Engineering & Manufacturing Inc. in Waterloo at $7.50 per hour, and where he is currently employed.

[42]. Lopes testified that he looked for work in many places, but he was able to specifically identify only seven, one of which was a temporary placement agency.

[43]. In the circumstances, I am satisfied that Lopes' attempts at mitigation were reasonable. Further, Torbridge offers nothing more than speculation when it suggests that Lopes would have been able to mitigate his damages more than he in fact did if he had done something more in that respect.

(iii) The Workers' Compensation Benefits Issue

[44]. I turn now to the question of whether the workers' compensation benefits received by Lopes between May 22, 1996 and October 23, 1996 should be deducted from the damages to which he is entitled. The parties referred me to no arbitral or Labour Board decisions on this point, and I am unaware of any. Counsel did refer me to civil cases in which the issue has been addressed. As I have already indicated, it is appropriate for the Board to be cautious in applying common law doctrines or approaches to matters in its jurisdiction. However, the fact that common-law rules or doctrines do not always fit well in labour relations matters does not mean that the way in which the Courts approach an issue cannot provide some useful guidance, particularly when it comes to matters of principle.

[45]. As might be expected, and as is the case with the issue of mitigation, the issue of what is properly deducted from an award of damages when a contract of employment is in issue has arisen in wrongful dismissal cases.

[46]. It has long been settled that earnings from employment during the "damages period" are appropriately deducted from damages. The Courts have also considered whether sickness, accident or disability benefits (which I will consider under the single category of disability benefits) under a policy paid for by the employer, unemployment insurance benefits and workers' compensation benefits should be deducted from damages.

[47]. Beginning with the principle that the purpose of damages in a wrongful dismissal action is to restore a plaintiff to the position s/he would have been in if the contract of employment had been properly performed, the courts in Ontario and British Columbia began to develop a theory that it is not appropriate to deduct the value of "collateral benefits" from damages. The doctrine of collateral benefits was initially developed in tort cases where it was determinated that justice, reasonableness and public policy required that a tortfeasor not be able to deduct from damages benefits paid to an injured person under an insurance or pension scheme devised by that person or his employer (see, for example, Boarelli v. Flannigan, [1873] 3 O.R. 69 (Ontario Court of Appeal), particularly at page 72 per Dubin JA.). It appears that this doctrine was extended to contracts cases in Jack Cewe Ltd. v. Jorgenson, 1980 CanLII 177 (SCC), [1980] 1 S.C.R. 812 (Supreme Court of Canada) where it was determined that unemployment insurance benefits are not to be deducted from damages for wrongful dismissal. This theory was also applied to disability benefits by the British Columbia Court of Appeal in Chan v. Butcher et al. (1984) II D.L.R. (4th) 233, despite the fact that the New Brunswick Court of Appeal had taken the opposite view in Bursey v. Acadia Motors Ltd., (1980) 1980 CanLII 3198 (NB CA), 35 N.B.R. (2nd) 587. Turning specifically to the question of workers' compensation benefits, in Salmni v. Greyfriar Developments Ltd., (1985) 1985 ABCA 59, 17 D.L.R. (4th) 186, the Alberta Court of Appeal held that workers' compensation benefits are payments in lieu of earnings and as such are equivalent to earnings in mitigation of loss, and should therefore be deducted from damages.

[48]. In McKay v. Camco, Inc., (1986) 1986 CanLII 2544 (ON CA), 53 O.R. (2d) 257, the Ontario Court of Appeal reversed the trial judge's decision to deduct disability benefits from an award of damages for wrongful dismissal. In doing so, the Court of Appeal appears to have equated disability benefits with workers' compensation benefits, and specifically disagreed with the decisions of the New Brunswick Court of Appeal and Alberta Court of Appeal in Bursev; supra, and Salmi, supra, respectively as follows:

Having reached this conclusion, I must respectfully disagree with the decision of the New Bruns­wick Court of Appeal in Bursev v. Acadia Motors Ltd. (1980), 1980 CanLII 3198 (NB CA), 35 N.B.R. (2d) 587, which held that sick benefits payable to a dismissed employee under a sickness and accident insurance policy paid for by the employer could be deducted from damages for wrongful dismissal. For the same reason, I cannot agree with the decision of the Alberta Court of Appeal in Salmi v. Greyfriar Developments Ltd. (1985), 1985 ABCA 59, 17 D.L.R. (4th) 186. [1985] 4 W.W.R. 463, Alta. L.R. (2d) 182, which also proceeds on the theory that disability payments made by an employer are deductible from damages for wrongful dismissal. In the passage from the court's judgment quoted by my brother Finlayson, it is stated that the disability payments made in that case to the employee by the Provincial Workers' Compensation Board could be characterized as payments by the employer because only employers contributed premiums to the board. It also is assumed that workers' compensation had been established solely for the benefit of employees.

It is not necessary in this case to decide whether this view of workers' compensation expresses the law of Ontario but I have serious doubt that it does. Workers' compensation schemes are established by provincial law and are underwritten by the resources of provincial governments. They confer benefits upon both employers and employees as Madam Justice McFadyen observed in her judg­ment at trial (1983 CanLII 1068 (AB QB), [1983] 6 W.W.R. 409, 27 Alta. L.R. (2d) 204, 1 C.C.E.L. 82) when she pointed out at p. 412: "The legislation establishing the plan precludes a damage action against the employer arising out of a work related injury." In my opinion, payments from workers' compensation boards might be compared with unemployment insurance payments which, as mentioned above, are not deductible from damages awarded for wrongful dismissal: Jack Cewe Ltd. v. Jorgenson. supra, and Peck c Levesque Plywood Ltd. (1979), 1979 CanLII 2055 (ON CA), 27 OR. (2d) 108, 105 D.L.R. (3d) 520,7 B.L.R. 250 (C.A.).

[49]. The Court of Appeal distinguished between the right to reasonable notice and the right to (in that case) disability benefits from the employer's disability insurance plan, holding that these were two separate and independent legal rights, which could not be set off against each other.

[50]. Following this lead, the Court in Warren v. Orlick Industries Ltd., (1993) 47 C.C.E.L. 198 (Ontario General Division) declined to deduct workers' compensation benefits from damages, holding that such benefits are paid as a result of injuries unrelated to dismissal from employment.

[51]. McKay, supra, has also been followed by the British Columbia Court of Appeal in, for example, Sylvester v. British Columbia, (1995) 1995 CanLII 822 (BC CA), 125 D.L.R. (4th) 541; Datardina v. Royal Trust Corp., (1995) 1995 CanLII 1538 (BC CA), 12 C.C.E.L. (2d) 86 and Bohun v. Similco Mine Ltd., (1995) 1995 CanLII 285 (BC CA), 12 C.C.E.L. (2d) 92.

[52]. That, however, is not the law now that the Supreme Court of Canada has spoken. In an unanimous decision issued on May 29, 1997 (1987 CanLII 24 (SCC), [1987] S.C.J. No. 58) in Sylvester, supra, the Supreme Court of Canada overturned the British Columbia Court of Appeal. The Supreme Court held that the fact that an employee was unable to work during the notice period is irrelevant to an assessment of damages, but that the disability benefits in that case were intended to be a substitute for income, that an employee was not entitled to receive salary and disability benefits at the same time, and that it was therefore appropriate to deduct disability benefits received from the award of damages for wrongful dismissal. The Supreme Court pointed out that in the absence of an indication that the parties indicated otherwise, an employee who is dismissed when s/he is not working but receiving disability benefits and an employee who is working when s/he is dismissed should receive equal treatment; and that deducting disability benefits would have the effect of ensuring that employees receive equal damages consisting of income they would have received had the employee worked during the notice period. The Supreme Court of Canada has therefore rejected the "two independent rights" theory put forward in McKay Supra.

[53]. The Supreme Court of Canada in Sylvester, supra, was careful to distinguish that case from the decisions involving unemployment insurance or workers' compensation benefits, on the basis that those benefits are statutory while disability benefits are contractual.

[54]. With respect, I agree with the Supreme Court of Canada's reasoning in Sylvester, supra, regarding the deduction of disability payments from damages for lost income, whether during an appropriate period of notice or otherwise. However, I respectfully see no reason to distinguish between benefits on the basis of whether they are paid pursuant to a statutory scheme or a private insurance plan. Instead, I find the Supreme Court's analysis equally applicable to the question of workers' compensation benefits.

[55]. The purpose of unemployment insurance benefits is to provide (limited) income replacement protection for persons who become unemployed through their fault of their own. Benefits are paid out of the Federal Government's consolidated revenue fund, into which both employers and employees pay premiums to help finance the scheme. Disability benefits of any short which are tied to a person's inability to work are intended to replace, sometimes only partially) the income which the person would have earned if s/he had been able to work during the disability period.

[56]. The workers' compensation system in Ontario in really a form of statutory income replace­ment insurance for employees who suffer work related partial or total temporary or permanent disabili­ties. With respect, the McKay supra, decision (see paragraph 48 above) betrays a fundamental misunderstanding of the workers' compensation system in Ontario, and incorrectly concludes that workers' compensation benefits and unemployment insurance benefits should be treated the same way when it comes to an assessment of damages. First, although Ontario's workers' compensation system is established by provincial legislation, it is not underwritten by the resources of the provincial or any other government. The benefits paid to injured workers under the Workers' Compensation Act are entirely funded by employers. Indeed, the entire workers' compensation structure is financed by contributions from employers. No funds are provided by the provincial government.

[57]. The workers compensation scheme in Ontario, which is mandatory for the majority of workers in Ontario, whether they are unionized or not, is intended to benefit both employers and employees by providing a no-fault income replacement insurance plan which largely (but not com­pletely) replaces and takes away the right of employees who suffer work related injuries or disabilities to sue in tort.

[58]. All three of these, unemployment insurance benefits, private disability benefits and workers' compensation benefits exist together. All provide income replacement benefits. Although there are some "special" benefits available under the Employment Insurance Act, (see sections 21 and 22 for example), the employment insurance scheme (still referred to by most people as the U.I. or unemploy­ment insurance scheme) is primarily intended to partially and temporarily provide income to people who have temporarily or permanently lost their jobs through no fault of their own, who are able to work. Accordingly, persons who are unable to work as a result of a disability, whether work-related or not, are not entitled to employment insurance benefits (unless they can bring themselves within the "special" provisions). Accordingly, a person who is receiving temporary total disability benefits, (as opposed to a disability pension) from the Workers' Compensation Board is disentitled from employment insurance benefits. Further, temporary partial workers' compensation benefits (but not a permanent partial disability pension) is considered to be income for Employment Insurance Act purposes.

[59]. Non-Workers' Compensation Act private disability insurance plans are intended to provide income replacement protection to persons who become disabled and unable to work for reasons which are not work related within the meaning of the Workers' Compensation Act.

[60]. It does not matter what the scheme is, or who funds it. So long as the purpose of benefits paid under the scheme is to provide income replacement, and is taxable as income (as both employment insurance and workers' compensation benefits are), it is appropriately treated in the same way as income actually earned in mitigation during the damages period for damages assessment purposes.

[61]. This does not mean that employment insurance benefits and workers' compensation benefits should be treated the same way. On the contrary, it is quite appropriate that employment insurance benefits not be deducted from damages assessed by a Court or this Board, while workers' compensation benefits are properly deducted. This is because the Employment Insurance Act contains the following provisions:

45. Return of benefits by claimant. - If a claimant receives benefits for a period and, under a labour arbitration award or court judgment, or for any other reason, an employer, a trustee in bankruptcy or any other person subsequently becomes liable to pay earnings, including damages for wrongful dismissal or proceeds realized from the property of a bankrupt, to the claimant for the same period and pays the earnings, the claimant shall pay to the Receiver General as repayment of an overpayment of benefits an amount equal to the benefits that would not have been paid if the earnings had been paid or payable at the time the benefits were paid.

46.(1) Return of benefits by employer or other person - If under a labour arbitration award or court judgment, or for any other reason, an employer, a trustee in bankruptcy or any other person becomes liable to pay earnings, including damages for wrongful dismissal or proceeds realized from the property of a bankrupt, to a claimant for a period and has reason to believe that benefits have been paid to the claimant for that period, the employer or other person shall ascertain whether an amount would be repayable under section 45 if the earnings were paid to the claimant and if so shall deduct the amount from the earnings payable to the claimant and remit it to the Receiver General as repayment of an overpayment of benefits.

(2) Return of benefits by employer - If a claimant receives benefits for a period and under a labour arbitration award or court judgement, or for any other reason, the liability of an employer to pay the claimant earnings, including damages for wrongful dismissal, for the same period is or was reduced by the amount of the benefits or by a portion of them, the employer shall remit the amount or portion to the Receiver General as repayment of an overpayment of benefits.

The Workers' Compensation Act contains no analogous provisions.

[62]. The result is that one way or the other the employment insurance benefits received during the damages period must be "recovered". It is not appropriate for these benefits to be deducted at the assessment stage because they must be "returned" subsequently. Indeed, deducting them at the damages assessment stage would not negate the statutory requirement that the benefits paid during the damages period be returned, and the "injured" person would end up returning the employment insurance benefits payments twice, and would therefore not be placed in the position s/he would have been in but for the employer's wrongful conduct, whether in breach of contract or otherwise. On the other hand, the only place where workers' compensation benefits can be taken into account or "recovered" is at the damages assessment stage. If such benefits were not deducted from damages, a wrongfully dismissed person who received workers' compensation benefits during the notice period would end up being better off than a wrongfully dismissed person who received no such benefits during the same notice period. It is only by deducting workers' compensation benefits from payments that the "injured" person is in fact placed in the position s/he would have been in but for the breach of contract or of the Labour Relations Act, 1995, as the case may be.

[63]. The question then becomes whether this approach is appropriate in proceedings before the Board. A civil action for wrongful dismissal is not the same as an unfair labour practice complaint to the Board in which an unlawful discharge is alleged. A wrongful dismissal action is based on a person's individual contract of employment, and therefore is rooted in individual rights under a private contract between the employment parties. An unfair labour practice complaint is based on public statutory rights. As a result, the proceedings are different, onuses of proof tend to be different, policy considerations are not the same, and the remedies which are available are different. In that latter respect, for example, the courts will not order specific performance of an individual contract of employment (that is, they will not reinstate an employee to employment), while reinstatement is part of the usual remedy in unfair labour practice complaints which involve a discharge. However, there are also similarities. For purposes of this case, the most significant similarity is that both the Courts and the Board will award damages. The Courts award damages on the basis that the employer breached the individual contract of employ­ment, not by discharging the person (which the employer is entitled to do, whether or not it had just or any cause, and even if none of its reasons were proper) but by failing to give reasonable notice or to pay severance in lieu thereof, and the Board will do so on the basis that the discharge itself was unlawful. The most significant head of damages in a wrongful dismissal action is usually the income the plaintiff would have earned during the notice period. Similarly, the most significant head of damages generally awarded by the Board in addition to reinstatement in an unlawful discharge case is the income which the employee would have earned but for the employer's unlawful conduct. The theories underlying the assessment of damages are somewhat different, but in both cases these damages are for lost income. That is why the doctrine of mitigation applies in both cases. It is also why, it is appropriate to deduct income replacement benefits which are received during the damages period from damages. This includes workers' compensation benefits.

[64]. Accordingly, I am satisfied that the workers' compensation benefits received by Lopes between May 22 and October 23, 1996 should be deducted from the damages to which he is otherwise entitled.

(iv) Assessment of Damages

[65]. In assessing the damages suffered by Lopes as a result of Torbridge's breach of the Act in this case, I must determine when he would have worked but for that wrongful conduct and the effect which this had. Having regard to the evidence before the Board in that respect, and particularly Torbridge's own records, I am satisfied, on a balance of probabilities, that but for Torbridge's unlawful conduct:

(a) in 199S Lopes would not have been laid off until December 8th;

(b) in 1996 Lopes would have been hired and started work on March 25th and would not have been laid off until November 15th;

(c) in 1997 Lopes would have been hired and would have started work on March 2Sth and would have been laid off when the number of construction employees employed by Torbridge fell below 20.

[66]. Lopes is therefore entitled to damages for lost income and benefits which he would otherwise have earned between September 13th and December 8, 1995, March 25th and November 15, 1996, and March 25, 1997 until the date he is either re-employed or Torbridge had less than 20 construction employees. All income which he earned (whether or not he has received it) during the damages period is to be deducted from these damages, including the amounts he earned during the four days he worked for Joe's Masonry, the income he has earned from his employment with Arjune Engineering & Manufacturing Inc., and the workers' compensation benefits he received between May 22 and October 23, 1996. (For purposes of clarity in that latter respect, Lopes is entitled to damages for the difference between what he would have earned with Torbridge and what he received from the workers' compensation board.) I note that Lopes testified that he has not been paid for the work he performed for Joe's Masonry. That is a matter between him and Joe's Masonry, and the amount he earned is nevertheless properly deducted from his damages in this complaint.

[67]. In addition, but for Torbridge's wrongful conduct, Lopes would have earned sufficient

credits to entitle him to employment insurance benefits between December 9, 1995 and March 24,

1996, and between November 16, 1996 and March 24, 1997. He is entitled to damages in that respect as well.

(v) Declarations and Orders

[68]. In the result, the Board:

(1) declares that Torbridge Construction Ltd. has violated section 76 of the Labour Relations Act, 1995;

(2) orders Torbridge Construction Ltd. to cease and desist from treating Manuel Lopes in a manner contrary to the Labour Relations Act, 1995;

(3) orders Torbridge Construction Ltd. to forthwith reinstate Manuel Lopes to employment unless it presently has fewer than 20 construction employees, in which case the company is not required to reinstatement but must conduct itself in accordance with paragraph 21 of this decision;

(4) orders Torbridge Construction Ltd. to pay to Manuel Lopes, as damages for its unlawful conduct as aforesaid, consisting of:

(a) the wages and benefits which he would have received between September 13 and December 8, 1995, and March 25 and November 15, 1996, and March 25, 1997 until the date he is either re-employed by the company or the company had less than 20 construction employees;

(b) the unemployment insurance benefits Manuel Lopes would have received between December 9, 1995 and March 24, 1996, and between November 16,

1996 and March 24, 1997;

(c) less his income from Joe's Masonry, the workers' compensation benefits he received, and his earnings from Arjune Engineering & Manufacturing Inc.

[69]. In my view, this is not a case which merits a posting or similar such ancillary relief. Local 183 is free to distribute or to publicize this decision as it considers appropriate.

[70]. I do not consider it appropriate to order Torbridge to employ Lopes in 1998. In my view, such prospective relief is not appropriate. It may be that the company will re-employ Lopes in 1998. If it does not, its decision not to do so may not be in breach of the Act. If it does breach the Act in that respect, the appropriate proceedings can be brought against the company.

[71]. Finally, I shall remain seized with this matter for the purpose of dealing with any issues or questions concerning the calculation or quantum of damages, or anything else having to do with the implementation of this decision.