Docket: 1998 Auto Gallery 1994 Ltd. & Tom Glen Appellants (Appellants) - v. -, 2010 SKCA 156

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2010 SKCA 156 Date: 20101222 Between: Docket: 1998 Auto Gallery 1994 Ltd. & Tom Glen Appellants (Appellants) - and - Director of Labour Standards Respondent (Respondent) Before: Ottenbreit J.A. (in Chambers) Counsel: Kevin Mellor for the Appellants Barry Hornsberger, Q.C. for the Respondent Application:

From: 2010 SKQB 319 Heard: December 8, 2010 Disposition: Dismissed Written Reasons: December 22, 2010 By: The Honourable Mr. Justice Ottenbreit Ottenbreit J.A. I. Introduction [1] Auto Gallery 1994 Ltd. (“Auto Gallery”) and Tom Glen (“Glen”) seek leave to appeal the ruling of the Queen’s Bench judge whichdismissed an appeal from the decision of an adjudicator made pursuant to the Labour Standards Act, R.S.S. 1978, c. L-1 (the “Act”).

Theadjudicator’s decision upheld the ruling of The Director of Labour Standards that Auto Gallery was liable to Janine Peesker (“Peesker”)for $9,450.89 being pay in lieu of notice as provided for by ss. 43 and 44 of the Act. II. Facts and Background [2] Auto Gallery is an automobile dealership and service centre. Peesker was employed by Auto Gallery for seven years. On December3, 2008, she was working as a warranty administrator/service writer when she received a letter of termination of her employment.

Following the termination, Peesker made a complaint to the Labour Standards Branch which resulted in a wage assessment for pay inlieu of notice being issued. The wage assessment was appealed by Auto Gallery to the adjudicator. The adjudicator determined thatPeesker had not been dismissed for just cause and upheld the wage assessment. [3] Evidence at the hearing before the adjudicator indicated that Peesker received workers’ compensation benefits in the amount of$2,887.29 to compensate her for wage loss for the period December 3 to December 31, 2008.

The Workers’ Compensation Board(“WCB”) had determined that she was unable to work as a result of symptoms suffered from depression. Testimony on the hearingindicated that these benefits were the equivalent of 60% of Peesker’s expected earnings for that period. The overall effect of this paymentwould be to provide Peesker with approximately the same net income as if she had received her usual salary and paid taxes on thatsalary. Auto Gallery argued that WCB payments should be set off from the statutory payments under the Act.

The adjudicator concludedthat the WCB benefits could not be set off against the amount owing by the employer under the wage assessment. III. Decision of the Court Below [4] The matter was appealed to the Court of Queen’s Bench on the issue of the WCB set-off. After reviewing the positions taken by theparties, the Act and the case law, the Queen’s Bench justice concluded that the adjudicator did not commit an error in his

interpretationand application of the provisions of the Act, and in particular s. 44. The Queen’s Bench appeal judge determined that although theprinciples of mitigation apply to common law actions for wrongful dismissal, they do not apply to the claims of an employee pursuant toa statutory entitlement where the statute does not contain any provision for mitigation or reduction of entitlement from employment-related incomes earned during the entitlement period. The appeal of Auto Gallery and Glen was dismissed. IV.

Analysis [5] The sole issue on the proposed appeal is whether the Queen’s Bench judge erred in his analysis of whether WCB payments aredeductible from pay in lieu of notice required by the Act. The criteria for granting leave to appeal are well known and are set forth in thecase of Rothmans, Benson & Hedges Inc. v. Saskatchewan, 2002 SKCA 119 , [2002] S.J. No. 605, where Cameron J.A. stated: The power to grant leave has been taken to be a discretionary power exercisable upon a set of criteria which, on balance, must be shownby the applicant to weigh decisively in favour of leave being granted: Steier v.

University Hospital, (SK CA), [1988] 4W.W.R. 303 (Sask. C.A., per Tallis J.A. in chambers). The governing criteria may be reduced to two-each of which features a subset ofconsiderations- provided it be understood that they constitute conventional considerations rather than fixed rules, that they are casesensitive, and that their point by point reduction is not exhaustive. Generally, leave is granted or withheld on considerations of merit andimportance, as follows: First: Is the proposed appeal of sufficient merit to warrant the attention of the Court of Appeal? • Is it prima facie frivolous or vexatious?

• Is it prima facie destined to fail in any event, having regard to the nature of the issue and the scope of the right of appeal, forinstance, or the nature of the adjudicative framework, such as that pertaining to the exercise of discretionary power? • Is it apt to unduly delay the proceedings or be overcome by them and rendered moot?

Second: Is the proposed appeal of sufficient importance to the proceedings before the court, or to the field of practice or the state of thelaw, or to the administration of justice generally, to warrant determination by the Court of Appeal? • does the decision bear heavily and potentially prejudicially upon the course or outcome of the particular proceedings? • does it raise a new or controversial or unusual issue of practice? • does it raise a new or uncertain or unsettled point of law? • does it transcend the particular in its implications?

To obtain leave, Auto Gallery and Glen must demonstrate sufficient merit and sufficient importance. For the reasons set forth below, theproposed appeal is not of sufficient merit to grant leave. A. Sufficient Merit [6] Auto Gallery and Glen reiterate their arguments in the court below. They rely on an established line of cases which address thequestion of collateral benefits, beginning with Ratych v. Bloomer, (SCC), [1990] 1 S.C.R. 940 which held that an injuredparty cannot expect to recover lost wages from a tortfeasor where the former had received full salary during his absence from work.

AutoGallery and Glen also cite in support Merk v. International Association of Bridge, Structural, Ornamental and Reinforcing Ironworkers,Local Union 771, 2006 SKQB 332, [2006] 11 W.W.R. 759 where the Court of Queen’s Bench determined that WCB benefits receivedby the claimant should be deducted from an award for wrongful dismissal.

Several other cases from Saskatchewan courts and otherjurisdictions were cited for the proposition that there was a general principle that double recovery by the employee ought to be avoided.The position of the applicants summarized is that because WCB benefits may be set off from awards and common law actions forwrongful dismissal, these benefits should also be offset from a statutory entitlement to pay in lieu of notice to avoid double recovery.Auto Gallery and Glen argue that leave should be granted both on the grounds of merit and importance because there are noSaskatchewan cases dealing with this situation and because it is an opportunity to consider the interplay of the Act and WBC benefits. [7] The Director of Labour Standards argues that the statutory entitlements under s. 44 of the Act cannot be viewed as damages and thecase law cited by Auto Gallery and Glen respecting double recovery has no application to payments under the Act. [8] During argument, counsel for Auto Gallery and Glen was not able to cite to the court any cases where WCB or similar benefits werededucted from the statutory notice payments pursuant to the Act or similar statutes.

Counsel provided supplementary material after thehearing, which established that there were many cases which allowed deduction of WCB benefits from common law dismissal anddamage awards, but none which allowed the setoff of one statutory payment from another statutory payment as argued in this case. [9] The argument of Auto Gallery and Glen appears to be inconsistent with the statutory scheme and intention of the Act and theWorkers’ Compensation Act, 1979, S.S. 1979, c. W-17.1. Each provides for distinct benefits.

The Act seeks to ensure that employeesare paid all wages due to them by employers for their services. The WCB legislation establishes a scheme whereby workers who havebeen injured or disabled in the course of their employment, and their families, will receive the benefits administered by the WCB. [10] The payment in lieu of notice under the Act appears to be legally distinct from a common law action for wrongful dismissal. Thedistinction between statutory entitlements under the Act and damages for wrongful dismissal has been recognized by this Court: Meyersv. Walters Cycle Co.

Ltd., (SK CA), [1990] 5 W.W.R. 455 (Sask. C.A.) at para. 4. The hearing under the Act is notan action for breach of contract. There is no provision in the Act for deduction of any external compensation which might be work-relatedcovering the notice periods under s. 43 of the Act. [11] Given the absence of any precedent for the argued set-off, the absence of any statutory permission for a set-off, and the generalscheme and intention of the Act and the Workers’ Compensation Act, 1979, the proposed appeal of Auto Gallery and Glen is, in my view,destined for failure.

Having found insufficient merit in the proposed appeal, it is not necessary to deal with the issue of importance. [12] Accordingly, the application for leave to appeal is dismissed with costs to the Respondent.

DATED at the City of Regina, in the Province of Saskatchewan, this 22 nd day of December, A.D. 2010. “Ottenbreit J.A.” _________________ Ottenbreit J.A.