Joseph Halloran v. Crown Cork and Seal Canada Inc., 2000 CanLII 12726

Ontario Labour Relations Board

3524-98-ES Joseph Halloran, Applicant v. Crown Cork and Seal Canada Inc. and Ministry of Labour, Responding Parties.

Employment Practices Branch File No. 42 002039

BEFORE: Timothy W. Sargeant, Vice-Chair.

APPEARANCES: Tim Costigan for the applicant; John Sproat and Alex Packman for the responding party; no one appearing for the Ministry of Labour.

DECISION OF THE BOARD; June 6, 2000

1. This is an appeal brought by Mr. Joseph Halloran (“Halloran”) pursuant to section 67 of the Employment Standards Act, (the “Act”) from a decision of an Employment Standards Officer not to issue an Order to Pay to Crown Cork and Seal Canada Inc. (the “Employer”)

2. The matter was heard on May 16, 2000. By agreement of the parties the issue to be determined at the hearing on May 16, 2000 was whether Mr. Halloran’s claim is statute barred in accordance with section 82 of the Act as it was at the relevant time. There is no issue that Mr. Halloran filed his claim with the Ministry on January 25, 1996.

3. The parties agreed that there was no objection to my hearing this matter.

4. Though the facts surrounding this issue are not in dispute, some background is necessary to understand the position of Mr. Halloran in this matter.

5. Mr. Halloran was a senior sales representative of the employer for approximately 31 years. (The company had been acquired by the current owner about a year prior to the termination of Mr. Halloran). By letter dated October 31, 1990 Mr. Halloran was given a letter terminating his employment. The letter outlined two options – Mr. Halloran could either choose to retire on a special unreduced early retirement (Option “A”) or elect to take a special retirement package (Option “B”). Part of the letter stated:

The above provisions are inclusive of all amounts payable under any provincial legislation or otherwise, including notice, payment in lieu of notice, severance pay and vacation pay. For your information the above provisions exceed provincial requirements.

Mr. Halloran testified that in his view, given his age, he really had little choice but to accept Option “A”. This decision was supported by a financial analyst provided by the company. Mr. Halloran testified that he trusted the company and took what they told him in the letter as being factual. As his income would be cut approximately in half, he did not want to waste any funds going to a lawyer to review the letter of termination. In his words, the company had been good to him in the past and he felt the company would have all the legal aspects in place and thus relied on what he was told in the letter.

6. Without detailing a long history in this matter, other employees represented by a union in Plants 54, 48 and 63 filed a claim with the Minister of Labour under the Act. In essence these claims submitted that with regard to Option “A” (these employees had received a similar letter as was given to Mr. Halloran) such employees were also entitled to severance pay and termination pay under the Act in addition to the special unreduced early retirement package. On July 29, 1991 Referee Haefling was appointed to hear this issue. Apparently, the parties agreed that Plant 54 would be considered as the test case. The hearing was conducted between October 28, 1991 and June 23, 1993. Mr. Haefling issued a decision on March 2, 1994 which held that the employees at plant 54 in regards to Option “A” were also entitled to termination and severance pay under the Act. On approximately July 14, 1993 it was agreed that the result in the Plant 54 decision would apply to the employees in Plants 48 and 63.

7. The above decision of Mr. Haefling was appealed to the Divisional Court which, in a decision dated November 29, 1995, upheld this decision of Mr. Haefling. Leave to Appeal was refused by the Court of Appeal in a decision dated April 4, 1996.

8. Mr. Halloran testified that he first became aware that there was an issue concerning Option “A” by reading a newspaper report sometime around March 23, 1994. He then inquired from former employees of Plant 54 and was told the issue looked like it might be favourably decided in favour of the former employees on appeal. He did nothing at the time as he felt he should await the result of the appeal to the Court. He learned, in a newspaper report dated December 2, 1995, that a decision had issued supporting the former employees. He then consulted a lawyer and his claim was filed on January 25, 1996.

9. This led to the decision of an Employment Standards Officer dated February 13, 1996 refusing to commence an investigation pursuant to section 82 of the Act. The decision was appealed and came before Referee Muir. By decision dated February 25, 1997 Referee Muir referred the matter to Referee Haefling. One of the issues to determine was whether Mr. Halloran was an employee of Plant 54. In his decision Referee Muir did note:

The alternative argument advanced by the Claimant is a different matter as it raises an entirely different legal theory that is separate and distinct from the argument respecting the application of Referee Haefling’s determination. As I understand the submission it rests upon a free standing claim of Mr. Halloran for benefits under the Act that is in no way dependent upon the Haefling determination. The difficulty that arises as a consequence is that it is on its face well out of time, hence the legal argument that is raised to avoid the consequences of section 82 of the Act. It is in that sense truly an alternative argument and in my view is not one that Referee Haefling could decide. Accordingly I will remain seised of the application as it relates to the alternative position articulated by the Claimant in the event that the Referee concludes that the Claimant was not covered by his award.

10. In a decision dated August 5, 1997 Mr. Haefling ruled that pursuant to section 58(3) of the Act, Mr. Halloran was deemed to be a Plant 54 employee and thus entitled to compensation in accordance with his earlier March 2, 1994 decision. The decision of August 5, 1997 was appealed and in a decision dated October 22, 1998 the Divisional Court quashed the August 5, 1997 decision of Mr. Haefling and remitted the matter back to Referee Muir who retained jurisdiction on the “alternative argument”. As Mr. Muir is no longer a Referee, the parties agreed that a new Referee could be appointed to hear the matter. The matter thus came before me on May 16, 2000.

11. Counsel for the applicant submitted in a reasoned and lengthy argument that on these facts the employer was estopped from utilizing the limitation period in section 82 of the Act as it then was, to defeat Mr. Halloran’s claim. In the alternative counsel for the applicant argued that Mr. Halloran’s claim is sheltered under the Plant 54 claim.

12. The essence of counsel for the applicant’s argument is based on the statement in the October 31, 1990 termination letter:

The above provisions are inclusive of all amounts payable under any provincial legislation or otherwise, including notice, payment in lieu of notice, severance pay and vacation pay. For your information the above provisions exceed provincial requirements.

Counsel submits Mr. Halloran had relied on such statements to his detriment. This statement is unqualified and did not have to be made by the employer. As the courts have determined, there is a special relationship between an employer and its employees. An employer has a duty to be candid and forthright. Obviously this employee is in an unequal position in regards to the complexity of issues surrounding a termination, as compared to the employer, a large organization. Even if the employer believed the statement to be true when made, it had a duty to inform Mr. Halloran that such statement might not be true i.e. that he might be entitled to additional benefits under the Act. Mr. Halloran was an employee with 31 years of service. Certainly by July of 1991 the employer knew that there was an issue concerning Option “A” and the interpretation of the Act. Furthermore at the time of Mr. Haefling’s decision in March of 1994 the employer knew that its interpretation had not been supported. As the courts have stated:

“when a statement or representation has been made in the bona fide belief that it is true, and the party who has made it afterwards comes to find out that it is untrue, and discovers what he should have said, he can no longer honestly keep up that silence on the subject after that has come to his knowledge, thereby allowing the other party to go on, and still more, inducing him to go on, upon a statement which was honestly made at the time when it was made, but which he has not now retracted when he has become aware that it can be no longer preserved in. The learned Lord goes on to say that would be fraud, though nowadays the Court is more reluctant to use the word fraud and would not generally use the word fraud…

I have discussed the law at some little length because the cases to which I have referred show, I think, that this doctrine is not limited to a case of contracts uberrimae fidei or to any cases in which owing to the confidential relationship there is a peculiar duty to disclosure; on the contrary, the passage which I read from Fry, J. shows quite clearly that he distinguishes this consequence as one which arises in cases in which if the party was silent, there would be no duty to disclose at all.”

See Brownlie v. Campbell et al. (1880), 5 App. Cas. 925 and With v. O'Flanagan [1936] Ch. 575, adopted in Hogar Estates Ltd. in Trust v. Shebron Holdings Ltd. et al. (1979) 1979 CanLII 1880 (ON HCJ), 25 O.R. (2d) 543 (Ont. H.C.J.); Toronto-Dominion Bank v. Leigh Instruments Ltd., [1991] O.J. No. 1787 (Ont. Div. Ct.); and Holt, Renfrew & Co. v. Henry Singer Ltd. 1982 ABCA 135, [1982] A.J. No. 726 (Alta. C.A.).

13. Counsel for the applicant submits that the employer should not be allowed to benefit from its breach to inform Mr. Halloran of the change of circumstances. The limitation period should not apply until such time as Mr. Halloran had all the relevant facts in his knowledge. Applying this principle, this application should not be barred because of this limitation period in section 82 of the Act as Mr. Halloran did file such application in a timely manner when he had all the facts in his possession. There is just no delay on the part of Mr. Halloran that should make him the victim of a limitation period.

14. In regards to the sheltering argument, counsel for the applicant contends that the employer has agreed in effect that all employees who received similar letters in plants 54, 48 and 63 should be entitled to severance and termination pay. As Mr. Halloran received exactly the same termination letter, he should be treated in the same fashion and be sheltered under the Haefling decision of March 2, 1994.

15. Counsel for the employer submits that the claim is barred by the limitation period. Clearly the matter first came to the Director’s attention in January of 1996. If money was owing it was owing in November of 1990. In accordance with section 82(2) Mr. Halloran would not be entitled to make a claim in January of 1996 for money owing in November of 1990. This is well outside the 2 year limitation period.

16. Counsel for the employer submits that no estoppel arises. There is no misrepresentation of facts in the letter of October 31, 1990. The only facts relevant to the claim are length of service and termination of employment. Certainly there is no misrepresentation on these facts. Neither is there a representation by the company that the limitation period would not be applicable.

17. Further, counsel for the employer argues that none of the cases relied on by the applicant go so far as to suggest there is a duty of the employer to notify an employee that an issue has been brought by other employees which issue the employer is resisting. At best the employer is only aware that its interpretation is not supported in March of 1994. Even assuming that there was a duty to inform Mr. Halloran of this decision (which the employer denies) by such time any claim by Mr. Halloran would be statute barred in accordance with section 82(2) of the Act. There is nothing in the case law raised by the applicant that goes so far as to state that once a limitation period has expired, it may somehow be resurrected by an estoppel argument.

18. In respect if the argument on sheltering, company counsel submitted that it is clear from the Divisional Court decision concerning the award of Mr. Haefling dated August 5, 1997 that the applicant is not a member of the group involved in the earlier Haefling decision dated March 2, 1994. Therefore, in these circumstances the applicant may not shelter under the application involved in the Haefling award dated March 2, 1994.