2014 NBCA 54, 2014 NBCA 54

COURT OF APPEAL OF COUR D’APPEL DU NEW BRUNSWICK NOUVEAU-BRUNSWICK 8-14-CA HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF NEW BRUNSWICK APPELLANT SA MAJESTÉ LA REINE DU CHEF DE LA PROVINCE DU NOUVEAU-BRUNSWICK APPELANTE - and - - et - CLAIRE LeBOUTHILLIER RESPONDENT CLAIRE LeBOUTHILLIER INTIMÉE Her Majesty the Queen in Right of the Province of New Brunswick v. LeBouthillier, 2014 NBCA 54 Sa Majest é la Reine du Chef du la Province du Nouveau-Brunswick c.

LeBouthillier, 2014 NBCA 54 CORAM: The Honourable Justice Deschênes The Honourable Justice Bell The Honourable Justice Quigg CORAM : l’honorable juge Deschênes l’honorable juge Bell l’honorable juge Quigg Appeal from a decision of the Court of Queen’s Bench: January 6, 2014 Appel d’une décision de la Cour du Banc de la Reine : Le 6 janvier 2014 History of Case: Historique de la cause : Decision under appeal: 2012 NBQB 3 Décision frappée d’appel : 2012 NBBR 3 Preliminary or incidental proceedings: N/A Procédures préliminaires ou accessoires : s.o.

Appeal heard: May 14, 2014 Appel entendu : le 14 mai 2014 Judgment rendered: August 28, 2014 Jugement rendu : le 28 août 2014

Reasons for judgment by: The Honourable Justice Deschênes Motifs de jugement : l’honorable juge Deschênes Concurred in by: The Honourable Justice Bell The Honourable Justice Quigg Souscrivent aux motifs : l’honorable juge Bell l’honorable juge Quigg Counsel at hearing: For the appellant: Michelle Brun-Coughlan For the respondent: Jean-S é bastien Th é riault Avocats à l’audience : Pour l’appelante : Michelle Brun-Coughlan Pour l’intimée : Jean-S é bastien Th é riault THE COURT The appeal is allowed and the motion judge’s decision is overturned.

The respondent’s action is dismissed on the ground that the Court of Queen’s Bench does not have jurisdiction to try it. The appellant is entitled to its costs in the amount of $2,500. English version of the Court’s reasons for judgment delivered by DESCHÊNES J.A. I. Introduction [ 1 ] Ms. LeBouthillier, a non-bargaining employee, worked as a career consultant for the Department of Social Development of the Province of New Brunswick for approximately 20 years.

She was advised on February 28, 2011, that her position had been declared redundant and eliminated for budgetary reasons effective the following March 31. [ 2 ] The parties agree that this was a “discharge” within the meaning of subsection 100.1(2) of the Public Service Labour Relations Act , R.S.N.B. 1973, c. P-25 ( PSLRA ) (an issue that we, therefore, do not have to decide), that Ms.

LeBouthillier was an “employee” within the meaning of subsection 100.1(2) and that, as such, she was entitled to present a grievance to the employer with respect to her discharge and to proceed to adjudication, if she wished. [ 3 ] It is also well settled that an adjudicator appointed pursuant to the PSLRA is an independent decision maker empowered to rule on issues of common law and to compel the production of evidence and appearance of witnesses. [ 4 ] Subsections 100.1(2) to 100.1(5), 101(1) and 101(2) are relevant and read as follows:

100.1

(2) An employee who is not included in a bargaining unit may, in the manner, form and within such time as may be prescribed, present to the employer a grievance with respect to discharge, suspension or a financial penalty. 100.1

(3) Where an employee has presented a grievance in accordance with subsection (2) and the grievance has not been dealt with to the employee’s satisfaction, the employee may refer the grievance to the Board who shall, in the manner and within such time as may be prescribed, refer the grievance to an adjudicator appointed by the Board. 100.1

(4) An adjudicator to whom a grievance has been referred in accordance with subsection (3) shall conduct a hearing and render a decision in respect of the grievance. 100.1

(5) Sections 19, 97, 98.1, 101, 108 and 111 apply mutatis mutandis to an adjudicator to whom a grievance has been referred in accordance with subsection (3) and in relation to any decision rendered by such adjudicator. […] 101

(1) Except as provided in this Act, every order, award, direction, decision, declaration or ruling of the Board, an arbitration tribunal or an adjudicator is final and shall not be questioned or reviewed in any court. 101

(2) No order shall be made or process entered, and no proceedings shall be taken in any court, whether by way of injunction, judicial review, or otherwise, to question, review, prohibit or restrain the Board, an arbitration tribunal or an adjudicator in any of its or his proceedings. 100.1

(2) Un employé qui ne fait pas

partie d’une unité de négociation peut, de la manière, au moyen de la formule et dans le délai qui peuvent être prescrits, présenter un grief à l’employeur à l’égard du congédiement, de la suspension ou d’une peine pécuniaire. 100.1

(3) Lorsqu’un employé a présenté un grief conformément au paragraphe (2) et que le grief n’a pas été traité à la satisfaction de l’employé, l’employé peut renvoyer le grief à la Commission qui doit, de la manière et dans le délai qui peuvent être prescrits, renvoyer le grief à un arbitre nommé par la Commission. 100.1

(4) Un arbitre à qui un grief a été renvoyé conformément au paragraphe (3) doit tenir une audition et rendre une décision à l’égard du grief. 100.1

(5) Les articles 19, 97, 98.1, 101, 108 et 111 s’appliquent mutatis mutandis à un arbitre à qui un grief a été renvoyé conformément au paragraphe (3) et relativement à toute décision rendue par cet arbitre. […] 101

(1) Sous réserve des dispositions contraires de la présente loi, toute ordonnance, sentence, directive, décision ou déclaration de la Commission, d’un tribunal d’arbitrage ou d’un arbitre, est définitive et ne peut être contestée devant aucun tribunal ni révisée par aucun tribunal. 101

(2) Aucune ordonnance ne peut être rendue, aucune action intentée et aucune procédure entamée devant un tribunal, par voie d’injonction, de recours en révision, ou autrement, pour contester, réviser, supprimer ou restreindre les pouvoirs de la Commission, d’un tribunal d’arbitrage ou d’un arbitre dans l’une quelconque de leurs procédures. [ 5 ] Instead of exercising her rights under subsection 100.1(2) of the PSLRA , Ms. LeBouthillier brought an action before the Court of Queen’s Bench seeking damages for wrongful dismissal.

[ 6 ] The appellant filed a motion under Rule 23.01(2)(

a) asking the Court to dismiss the action on the ground that it lacked jurisdiction. [ 7 ] The issue in this case is whether Ms. LeBouthillier was required to make her claim in accordance with the grievance and adjudication procedure prescribed by the PSLRA or whether she had the option of bringing her claim by way of an action before the Court of Queen’s Bench.

I am of the opinion that by adopting the legislative scheme for non-unionized employees who are discharged, suspended or subjected to a financial penalty, the Legislature ousted the jurisdiction of the Court of Queen’s Bench over the dispute in question, namely the discharge of the respondent. In my view, the Supreme Court ruling in Vaughan v. Canada , 2005 SCC 11 , [2005] 1 S.C.R. 146 , supports this conclusion. Moreover, the Court of Queen’s Bench adopted this approach in Munn v. New Brunswick et al., 2013 NBQB 51 , 400 N.B.R. (2d) 184 , which this Court upheld on appeal ( Munn v.

Province of New Brunswick, Moore and Collette , 2013 NBCA 43 , 405 N.B.R. (2d) 398 ) . II. The crux of the motion judge’s decision [ 8 ] The motion judge dismissed the Province’s application in a reasoned but unpublished decision. He essentially ruled that the Legislature ought to have been clearer if it wanted to deprive non-unionized employees of access to the courts to seek damages for wrongful dismissal, upon being discharged within the meaning of subsection 100.1(2) of the PSLRA .

In short, the motion judge ruled that the Court of Queen’s Bench had jurisdiction to hear this case, notwithstanding the grievance and adjudication right provided by the PSLRA when a non-unionized employee is discharged. III. Analysis [ 9 ] According to the motion judge, the legislators were required to legislate along the lines of

section 236 of the Canadian Public Service Labour Relations Act, S.C. 2003, c. 22 , in order to oust the jurisdiction of the Court of Queen’s Bench.

Section 236 provides that the federal public servant’s right to seek redress by way of grievance “is in lieu of any right of action” and the denial of the right of access to the courts applies “whether or not the employee avails himself or herself of the right to present a grievance in any particular case and whether or not the grievance could be referred to adjudication”. [ 10 ] Moreover, referring to

section 236, the motion judge also found that [TRANSLATION] “it is this Canadian law (section 236) that lies at the crux of the case-law cited by the Province of New Brunswick in support of its proposed

interpretation of subsection 100.1(2) of the New Brunswick Act ”. The motion judge was clearly referring to Vaughan , a decision cited by the appellant in support of its argument before the motion judge and before this Court. Moreover, as the appellant indicates in its submission, that decision was analyzed by this Court in Attorney General of Canada, on behalf of Correctional Service of Canada v. Robichaud and MacKinnon , 2013 NBCA 3 , 398 N.B.R. (2d) 259 . Robertson J.A. had the following to say with respect to Vaughan: […] But it is important to begin with an understanding of what was decided in that case.

In brief, the majority of the Supreme Court held that, where Parliament has created a comprehensive scheme for dealing with labour disputes, the process set out in the legislative scheme should not be compromised by permitting parallel access to the courts. However, the Court recognized a residual discretion to permit court access in cases where the grievance procedure did not allow for third-party adjudication. In other words, the courts retain a residual discretion to allow a lawsuit to proceed in cases where the legislative scheme does not provide the employee with an adequate remedy.

The Court cited the “whistle-blower” cases as falling within the residual category: see also Pleau v. Canada (Attorney General) , 1999 NSCA 159 , [1999] N.S.J. No. 448 (QL). […] The legislation then in force (the Public Service Staff Relations Act , R.S.C. 1985, c. P-35) provided for a grievance procedure that did not include third-party adjudication with respect to the denial of early retirement benefits.

Grievance decisions were insulated from judicial review by a “final and binding” clause found in the legislation and, as stated above, the applicable Act contained no equivalent to s. 236 of the Public Service Labour Relations Act . However, the employee did not grieve the denial of benefits decision and instead sued in the Federal Court. On a motion for

summary judgment, the action was struck. The majority of the Supreme Court upheld the decision to dismiss the underlying action. The Court held the privative clause was not sufficient to oust the Court’s residual discretion to intervene. While the absence of third-party adjudication may in certain circumstances impact on the court’s exercise of its residual discretion, the Court cautioned other courts from getting involved and, if they do, their involvement is limited to hearing an application for judicial review.

As noted above, the majority referred to the “whistle-blower cases” as coming within the exceptional category. In brief, the majority recognized that a public servant may have the option of going to court to resolve a dispute which is grievable but not arbitrable (i.e., not subject to third-party adjudication). The minority opinion would have allowed the action to stand on the basis of a broader principle: access to the courts is permissible in cases where there is no right to third-party adjudication and there is no express provision in the legislation precluding recourse to the courts. [paras. 7-8]

[11] The motion judge, therefore, erred in law when he implicitly held that the decision in Vaughan was anchoredin any way to

section 236 (paras. 23-27 and 38-44 of the motion judge’s reasons). To the contrary,

section 236 had not yet been enactedwhen the Supreme Court ruled in Vaughan. [12] Notwithstanding that there was no provision similar to

section 236 and that there was no recourse to a third-party adjudicator to settle the dispute, the Supreme Court in Vaughan confirmed that, subject to the availability of judicial review,“disputes falling under the Public Service Staff Relations Act [...] should be left to the specialized machinery thereby established byParliament for their resolution” (para. 1).

In brief, the Supreme Court confirmed not only that the grievance procedure is the appropriatemechanism for deciding whether or not the employee is entitled to an employment-related benefit (in this case early retirement benefits),but that although the courts may also have jurisdiction in the matter (“residual jurisdiction”), they must refrain from exercising it toallow the grievance procedure to play its part and settle the dispute. [13] In this case, non-unionized employees clearly do not have the same access to the grievance and adjudicationprocedure for all disputes arising from their employment relationship as public service employees who have the benefit of a collectiveagreement. [14] However, employees who are not included in a bargaining unit within the meaning of subsection 100.1(2) haveaccess to the grievance and adjudication procedure if they are discharged, suspended or subjected to a financial penalty.

Employees whochallenge their discharge have the opportunity to obtain an adequate remedy, namely by filing a grievance and going before anadjudicator empowered to cure procedural errors and to consider the merits of the dispute and grant the appropriate redress. [15] In short, the PSLRA creates a comprehensive and effective legislative scheme for non-unionized employeeswho are discharged, suspended or subjected to a financial penalty.

Moreover, the existence of recourse to an independent decision makerand wording that confirms the finality of the decision of an adjudicator who settles this type of dispute, allow me to find that theLegislature’s intent is to give this legislative scheme exclusive jurisdiction to settle this type of dispute, to the exclusion of the courts. [16] Accordingly, the motion judge erred in law when he held that the Court of Queen’s Bench had jurisdiction tohear a claim for damages following Ms. LeBouthillier’s discharge. [17] I would add in passing that this decision is also consistent with the decision in Munn v.

New Brunswick et al. Inthat case, Mr. Munn, an employee unionized under the same legislative scheme, filed an action against the Province of New Brunswickfor workplace harassment that had forced him to resign. Clendening J. allowed the Province’s application under Rule 23.01(2)(

a) andordered that the Notice of Action be struck on the ground that the Court of Queen’s Bench was without jurisdiction. She decided as shedid in view of the grievance and adjudication procedures available to Mr. Munn under a collective agreement and under the legislativescheme set out in the PSLRA. The Court of Appeal upheld her decision as follows: THE COURT:-- Keith Munn appeals a decision of the Court of Queen’s Bench rendered on February 5, 2013, reported at 2013 NBQB51, 400 N.B.R. (2d) 184. With that decision, the application judge applied Rule 23.01(2)(

a) of the Rules of Court and the jurisprudencereferred to in Smith v. Canada (Royal Canadian Mounted Police), 2007 NBCA 58, 316 N.B.R. (2d) 180, at para. 14. In brief she heldthat the Court of Queen’s Bench lacks the jurisdiction to entertain Mr. Munn’s action. The application judge reached this conclusionbecause the essential character of Mr. Munn’s dispute concerns his employment relationship, for which there was an alternative disputeresolution scheme prescribed by law and a collective agreement. While Mr.

Munn raises ten grounds of appeal, all ten simply challenge the application judge’s ultimate conclusion that Mr. Munn shouldhave proceeded with the available grievance process to address his work-related dispute, instead of turning to the courts.

In our opinion,the application judge did not err in concluding as she did. [paras. 1-2] [18] In my opinion, although the case deals with a unionized employee subject to a collective agreement, thereasoning in Munn applies to non-unionized employees to whom subsection 100.1(2) of the PSLRA is directed when they are discharged,suspended or subjected to a financial penalty. [19] Finally, Ms. LeBouthillier (and the motion judge, in part) relied on the decision in Thériault v. Province of NewBrunswick as represented by the Minister of Agriculture and Rural Development, 2002 NBBR 166 , 2002 NBQB 166, 250

N.B.R. (2d) 120, to support her argument in favour of an alternative mode of redress before the Court of Queen’s Bench. I would point out that in that case, the motion judge ruled that Mr. Thériault was not an “employee”, that he had not been subjected to a “financial penalty” within the meaning of subsection 100.1(2) of the PSLRA and that the provision, therefore, did not apply. She added the following, despite coming to the above conclusion: Furthermore, the plaintiff submits that if Mr.

Thériault’s claims are included under subsection 100.1(2), the wording in 100.1(2) is discretionary rather than compulsory because the word “may” rather than “shall” is used. The employee would therefore have the choice of using this procedure or not. The plaintiff argues that if the Legislature wants to exclude a superior court’s jurisdiction, it must do so explicitly and this was not done. Given the facts of this case, I am of the opinion that the wording of subsection 101.1(2) is not strong enough to exclude the inherent jurisdiction of superior courts.

For all of the foregoing reasons, I am of the opinion that the Court has jurisdiction to try the case. [paras. 35-37] [ 20 ] Of course, the closing comments of the judge in Thériault were made in obiter and without the benefit of the judgments in Vaughan , Robichaud and Munn. They do not reflect the state of the law to the extent that they are inconsistent with the decision in this case. IV.

Disposition [ 21 ] For these reasons, I would allow the appeal, overturn the motion judge’s decision and issue an order dismissing the action on the ground that the Court of Queen’s Bench does not have jurisdiction to try it, with costs in the amount of $2,500. ____________________________________ ALEXANDRE DESCHÊNES, J.C.A. ____________________________________ B. RICHARD BELL, J.C.A. _____________________________________ KATHLEEN A. QUIGG, J.C.A.