VCR Print Company Ltd. Petitioner And: British Columbia (Employment Standards Tribunal), British Columbia (Director of Employment Standards), Ken Jung, Drory Rozen v. Scott Pelly, 2003 BCSC 442

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: VCR Print Company Ltd. v. Employment Standards Tribunal et al, 2003 BCSC 442 Date: 20030325 Docket: S014615 Registry: Vancouver In the Matter of the Judicial Review Procedure Act, R.S.B.C. 1996, c. 241 And In the Matter of Decision BCEST #RD348/01, made on July 3, 2001 by the Employment Standards Tribunal pursuant to

Section 116 of the Employment Standards Act, R.S.B.C. 1996, c. 113 Between: VCR Print Company Ltd. Petitioner And: British Columbia (Employment Standards Tribunal), British Columbia (Director of Employment Standards), Ken Jung, Drory Rozen and Scott Pelly Respondents Before: The Honourable Mr. Justice S.R. Romilly Reasons for Judgment Counsel for the Petitioner P.M. Pulver Counsel for the Respondent, Employment Standards Tribunal J. MacTavish Counsel for the Respondent, Director of Employment Standards A.J. Adamic Date and Place of Hearing: February 27, 2003 Vancouver, B.C. A. NATURE OF THE APPLICATION [ 1 ] The Petitioner applies to this court for:

(

a) An order setting aside Decision BCEST #RD348/01 of the Employment Standards Tribunal dated July 3, 2001; (

b) Costs; and (

c) Such further and other relief as this Court may seem meet and just. [ 2 ] The grounds upon which this application is based are that the Employment Standards Tribunal (the "Tribunal") lost, or exceeded, its jurisdiction, or made a patently unreasonable error, when it allowed the application for consideration of the decision of the Director of Employment Standards regarding the issue of vacation pay. [ 3 ] The Petitioner seeks relief pursuant to: (

a) The Judicial Review Procedure Act , R.S.B.C. 1996, c. 241 ; (

b) Rule 10 of the Rules of Court ; (

c) Rule 57 of the Rules of Court ; and (

d) The inherent jurisdiction of this Court. [ 4 ] For the reasons stated below, the application is dismissed with costs. B. FACTUAL BACKGROUND [ 5 ] The individual Respondents Ken Jung, Scott Pelly and Drory Rozen (the "Employees" or the "Individual Respondents") were employed as commission sales representatives by the Petitioner, VCR Printing Company Ltd. (the "Employer" or "VCR Printing"). [ 6 ] The Employees had been employed by the Employer for between 7 and 11 years.

The Employees each filed a complaint (the "Complaint") with the Director of Employment Standards (the "Director") alleging that they were owed commission, unauthorized deductions from their pay, statutory holiday pay and vacation pay. The Director delegated her decision making authority under the Employment Standards Act , R.S.B.C. 1996, c. 113 (the " Act ") to Sharon Cott (the "Director’s Delegate") who issued a Determination in this matter on March 1, 2000 (the "Determination"). [ 7 ] The Director’s Delegate determined that: (

a) no commission was owing, (

b) the Employer had made improper deductions from the wages of the Employees; (

c) vacation pay had been paid at only 4% when it should have been paid at 6% (the Director’s Delegate determined that commissions earned while on vacation were not vacation pay within the meaning of the Act ); and (

d) statutory holiday pay was owing to the Employees.

[ 8 ] The Director’s Delegate ordered the Employer to pay $38,475.16. On March 24, 2000, the Employer appealed the Determination to the Tribunal (the "Appeal"). The Employer appealed the finding that it had made unauthorized deductions, failed to pay vacation pay and failed to pay statutory holiday pay. [ 9 ] The Appeal was assigned to a panel of the Tribunal consisting of a single adjudicator (the "Original Panel") who issued his decision on November 9, 2000 (the "Original Decision"). The Original Panel heard the parties by way of an oral hearing. The Original Panel made several findings: (

a) With respect to the issue of unauthorized deductions, the Original Panel held that some of the deductions found by the Director’s Delegate to be unauthorized had, in fact been authorized (specifically certain credit card charges) while others had not been. This issue was remitted to the Director’s Delegate to be calculated in light of the Panel’s findings. (

b) On the issue of statutory holiday pay the Original Panel dismissed the appeal. (

c) Finally, with respect to vacation pay, the Original Panel held that the Director’s Delegate erred by not taking into account amounts paid to the Employees for commissions generated during their absence. [ 10 ] On the basis of his decisions regarding unauthorized deductions and vacation pay the Original Panel allowed the appeal in part. [ 11 ] On January 10, 2001, the Director applied to the Tribunal seeking reconsideration of the Original Decision (the "Reconsideration Application").

The Reconsideration Application challenged the decision of the Original Panel allowing the appeal with respect to the issue of unauthorized deductions (credit card charges) and vacation pay (deducting amounts received). [ 12 ] The Reconsideration Application was assigned to a panel of the Tribunal consisting of three adjudicators (the "Reconsideration Panel"). The Reconsideration Panel heard the parties by way of written submissions. On February 2, 2001, the Employer filed a submission opposing the Reconsideration Application. On March 12, 2001, the Director replied to the Employer’s submission.

On July 3, 2001, the Reconsideration Panel issued their decision (the "Reconsideration Decision"). [ 13 ] The Reconsideration Panel allowed the application in part. It upheld the decision of the Original Panel on the issue of unauthorized deductions but overturned the decision on the issue of deducting commissions from vacation pay.

The Reconsideration Panel held as follows: [para21] The original Adjudicator held that the employees were entitled to 6% vacation pay, but that the commissions received while on vacation, should be taken into account or "credited" against the vacation pay entitlement of the employee. … [para38] In our view, the Adjudicator erred in permitting a "set off or deduction" of the commissions received by the employees while on vacation, from the vacation pay entitlement.

It is clear that an employer cannot incorporate vacation pay or statutory holiday pay within the commission structure, as an all inclusive amount … [para39] The Delegate found that commissions generated from the employee's clients, while the employee was on vacation, were wages. The Adjudicator found that commissions generated while on vacation were vacation pay. Vacation pay is calculated on the total earnings in a year - see s. 58(1)(a)(b).

In our view there is no distinction between commissions paid while an employee is on vacation, or commissions generated from the employee's clients, while that employee is on vacation. In our view the legal character of the payments made was "wages", as it is commission or money paid for work. … … [para42] We note that there is some indication that the employer believed vacation pay to be an item separate and apart from commissions because it was paying 4%.

The employer must top up the commission by paying the additional 2%, without deducting the commissions earned while on vacation. [ 14 ] Having set out the background to this application, I begin my analysis with a reference to law on the standard of review in cases like the one at bar. C. THE LAW

[ 15 ]

Section 110 of the Employment Standards Act contains a full privative clause. It states: A decision or order of the tribunal under this Act or the regulations on any matter on which it has jurisdiction is final and conclusive and is not open to question or review in any court on any grounds. [ 16 ] In Pezim v. British Columbia (Superintendent of Brokers) (1994), 1994 CanLII 103 (SCC) , 114 D.L.R. (4th) 385 (S.C.C.), the Supreme Court of Canada had an opportunity to summarize the law with respect to the principles of judicial review, and the effect of these privative clauses.

At pp. 404-5 Iacobucci J. stated: There exist various standards of review with respect to the myriad of administrative agencies that exist in our country. The central question in ascertaining the standard of review is to determine the legislative intention conferring jurisdiction on the administrative tribunal. In answering this question, the courts have looked at various factors. Included in the analysis is an examination of the tribunal's role or function. Also crucial is whether or not the agency's decisions are protected by a privative clause.

Finally, of fundamental importance, is whether or not the question goes to the jurisdiction of the tribunal involved. Having regard to the large number of factors relevant in determining the applicable standard of review, the courts have developed a spectrum that ranges from the standard of reasonableness to that of correctness. Courts have also enunciated a principle of deference that applies not just to the facts as found by the tribunal, but also to the legal questions before the tribunal in the light of its role and expertise.

At the reasonableness end of the spectrum, where deference is at its highest, are those cases where a tribunal protected by a true privative clause is deciding a matter within its jurisdiction and where there is no statutory right of appeal: see C.U.P.E., Local 963 v. New Brunswick Liquor Corp. (1979), 1979 CanLII 23 (SCC) , 97 D.L.R. (3d) 417, [1979] 2 S.C.R. 227; U.E.S., Local 298 v. Bibeault, 1988 CanLII 30 (SCC) , [1988] 2 S.C.R. 1048 at p. 1089; and Domtar Inc. v.

Quebec (Commission d'appel en matiere de lesions professionnelles) (1993), 1993 CanLII 106 (SCC) , 105 D.L.R. (4th) 385, [1993] 2 S.C.R. 756. (Some citations deleted) At the correctness end of the spectrum, where deference in terms of legal questions is at its lowest, are those cases where the issues concern the

interpretation of a provision limiting the tribunal's jurisdiction (jurisdictional error) or where there is a statutory right of appeal which allows the reviewing court to substitute its opinion for that of the tribunal and where the tribunal has no greater expertise than the court on the issue in question, as for example in the area of human rights: see, for example, Zurich Insurance Co. v. Ontario (Human Rights Commission) (1992), 1992 CanLII 67 (SCC) , 93 D.L.R. (4th) 346, [1992] 2 S.C.R. 321; Canada (Attorney-General) v.

Mossop (1993), 1993 CanLII 164 (SCC) , 100 D.L.R. (4th) 658, [1993] 1 S.C.R. 554; and University of British Columbia v. Berg (1993), 1993 CanLII 89 (SCC) , 102 D.L.R. (4th) 665, [1993] 2 S.C.R. 353. (Some citations deleted.) [ 17 ] At p. 405 Iacobucci J. emphasized the high degree of deference that should be given to specialized tribunals: [E]ven where there is no privative clause and where there is a statutory right of appeal, the concept of the specialization of duties requires that deference be shown to decisions of specialized tribunals on matters which fall squarely within the tribunal's expertise.

This point was reaffirmed in United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd. (1993), 1993 CanLII 88 (SCC) , 102 D.L.R. (4th) 402 at p. 414, [1993] 2 S.C.R. 316, 12 Admin. L.R. (2d) 165 (Bradco) , where Sopinka J., writing for the majority, stated the following: …the expertise of the tribunal is of the utmost importance in determining the intention of the legislator with respect to the degree of deference to be shown to a tribunal's decision in the absence of a full privative clause.

Even where the tribunal's enabling statute provides explicitly for appellate review, as was the case in Bell Canada , supra , it has been stressed that deference should be shown by the appellate tribunal to the opinions of the specialized lower tribunal on matters squarely within its jurisdiction. [ 18 ] The Supreme Court of Canada in Pezim also reiterated that the pragmatic or functional approach articulated in U.E.S., Local 298 v. Bibeault , 1988 CanLII 30 (SCC) , [1988] 2 S.C.R. 1048, is sometimes helpful in determining the standard of review that might be applicable in a case similar to the case at bar.

At p. 1088 of Bibeault , Beetz J., writing for the court, stated: …the Court examines not only the wording of the enactment conferring jurisdiction on the administrative tribunal, but the purpose of the statute creating the tribunal, the reason for its existence, the area of expertise of its members and the nature of the problem before the tribunal.

[ 19 ] The Supreme Court of Canada in Pushpanathan v. Canada (M.C.I.) , 1998 CanLII 778 (SCC) , [1998] 1 S.C.R. 982, again outlined the four factors which are to be addressed in undertaking a pragmatic and functional analysis: the presence or absence of a privative clause; the expertise of the Tribunal; the purpose of the Act as a whole and the provision in particular; and finally the nature of the problem before the Tribunal. [ 20 ] It is therefore necessary for me to analyze these four criteria in the context of the case at bar. i.

The Privative Clause [ 21 ] All parties to these proceedings agree that the decisions of the Tribunal are protected by a "full" privative clause. There is also not much dispute that the presence of a full privative clause is a strong indication that the Legislature intended the Court to defer to the Tribunal.

In Pushpanathan , supra, at para. 30 the following is said: …[T]he presence of a full privative clause is compelling evidence that the court ought to show deference to the Tribunal’s decision, unless other factors strongly indicate the contrary as regard to a particular determination. [ 22 ] In Lari Mitchell et al. v.

B.C. (Employment Standards Tribunal) (1998), 1998 CanLII 3983 (BC SC) , 62 B.C.L.R. (3d) 79 (B.C.S.C.), Vickers J. confirmed at para. 23 that "[s]ection 110 of the Act is a full privative clause which requires deference on the high end of the spectrum." [ 23 ] This Court has recognized in many cases that the Tribunal’s decisions enjoy the protection of a full privative clause and should only be reviewed on a standard of patent unreasonableness. See for example Daryl-Evans Mechanical Ltd. v. Dir. Employment Standards , [2002] B.C.J. No. 30 (Q.L.) (B.C.S.C.) ; Kamloops Golf and Country Club Limited v.

B.C. (E.S.T.), [2002] B.C.J. No. 2109 (Q.L.)(B.C.S.C.) ; and Godding v. B.C. (E.S.T.), [2003] B.C.J. No. 285 (B.C.S.C.) at para. 17 . [ 24 ] I now turn to the expertise of the tribunal. ii. The Expertise of the Tribunal [ 25 ] Adjudicators for the Employment Standards Tribunal are experts in the field of employment standards and in the application of the Act .

This fact was alluded to by Vickers J. in Lari Mitchell , supra , at para. 26 : There can be no doubt that tribunals under the Act must be possessed of and employ specialized expertise in the discharge of their duties … expertise in matters relating to employment standards is required by all panel members of a tribunal. See also Daryl-Evans Mechanical Ltd., supra , at para. 54. [ 26 ] This fact alone requires me to accord the tribunal a high degree of deference. iii. The Purpose of the Act as a Whole [ 27 ] In s. 2 of the Act its purposes are clearly set out: The purposes of this Act are as follows: (

a) to ensure that employees in British Columbia receive at least basic standards of compensation and conditions of employment; (

b) to promote the fair treatment of employees and employers; (

c) to encourage open communication between employers and employees; (

d) to provide fair and efficient procedures for resolving disputes over the application and

interpretation of this Act ;

(

e) to foster the development of a productive and efficient labour force that can contribute fully to the prosperity of British Columbia; (

f) to contribute in assisting employees to meet work and family responsibilities. [ 28 ] It has been said that the Act is concerned with the "delicate balancing between different constituencies" which again suggests a higher degree of deference: Daryl-Evans Mechanical Ltd., supra , at para. 55-58. [ 29 ] Furthermore, employment standards legislation contains both substantive rights as well as procedural rights, both of which are designed to support the purposes of the Act : Sobeys Stores Ltd. v. Yeomans (1989), 1989 CanLII 116 (SCC) , 57 D.L.R. (4th) 1 (S.C.C.) at pp. 30-32. [ 30 ] I am indebted to Mr.

MacTavish for providing me with the background to the promulgation of the Act . From his submissions, it would appear that in this Province, in the fall of 1995, there was a major revision to the employment standards legislation. As part of this revision, the Tribunal was created.

It came into being on November 1, 1995 with the proclamation of the new (and current) Act : Rights and Responsibilities in a Changing Workplace: A Review of Employment Standards in British Columbia , The Report of the Commissioner, Employment Standards Review 1994, Mark Thompson, Commissioner; Lari Mitchell , supra. [ 31 ] In considering appeal processes under the Act , Professor Thompson began by exploring the system of appeals under the former Act ( Employment Standards Act , S.B.C. 1980, c. 10 (as amended)).

Under the former Act , there was a limited internal review available before the Branch and a right of appeal by trial de novo to this Court. Professor Thompson found this system to be inadequate.

He found that this reliance on the Court resulted in protracted proceedings and that few lawyers and judges were sufficiently familiar with employment standards matters to effectively deal with employment standards cases. [ 32 ] In place of the old system of appeals, Professor Thompson recommended the creation of an independent tribunal comprised of experts in employment standards which would enjoy a broad appellate jurisdiction over the decisions of the Director. [ 33 ] The Legislature acceded to Professor Thompson’s recommendations and created the Tribunal, intentionally removing the role of this Court from the process and in its place created a comprehensive internal appeal mechanism. [ 34 ] Under the current Act , the Tribunal and the Director have been assigned specific complementary roles.

The Director is generally responsible for the day to day administration of the Act . The Director investigates employee complaints of alleged breaches of the Act and may also initiate investigations on her own motion. The Director also has broad remedial powers to further the purposes of the Act , including unique enforcement powers to enable her to collect wages owing to employees.

In addition to her investigative and enforcement roles under the Act , the Director is also empowered to grant variances or partial exemptions from the Act. [ 35 ] The Tribunal is an appellant body established primarily to hear appeals from the decisions of the Director. The Tribunal has broad appellant jurisdiction over the decisions of the Director and has been granted the full range of powers necessary to discharge its function. [ 36 ] Mr.

MacTavish submits that the remedial purposes of the Act ; the desire for an informal, efficient and prompt procedure; and the explicit removal of the Court from the process all suggest a high degree of deference. iv. Nature of the Problem before the Tribunal [ 37 ] Counsel for the Petitioner submits that the Reconsideration Panel issued a decision without conducting an oral hearing and that they based their decision by substituting its facts for the facts as found by the Original Panel which made the Original Decision.

He further submits that the decision of the Reconsideration Panel was based on no evidence, or evidence that was incapable of supporting the tribunal’s findings of fact. [ 38 ] In my view, the questions before the Tribunal were within the core area of expertise of the Tribunal. The issue in this case involved a decision regarding entitlement to vacation pay for commissioned sales staff. In looking at that question the Tribunal considered and attempted to balance, in light of the purposes of the Act , the interests of the parties before it.

This is the type of problem which again calls for the highest level of deference. [ 39 ] In light of the full privative clause in the Act , there is in essence a presumption that the decision is only reviewable on a standard of patent unreasonableness. It is only if the other factors strongly suggest a lower standard that one would apply. In the case at bar, not only do the other factors not suggest a lower standard, they all suggest the highest degree of deference. That is to say that the "legislature intended that the question in issue ultimately be decided by the tribunal" rather than by the Courts.

The standard of review is therefore one of patent unreasonableness: Canadian Broadcasting Corp. v. Canada (Labour Relations Board) , 1995 CanLII 148 (SCC) , [1995] 1 S.C.R. 157 at p. 179. v. Patently Unreasonable Test [ 40 ] The patently unreasonable test has been described on a number of occasions by both the Supreme Court of Canada and the British

Columbia Court of Appeal. [ 41 ] In CUPE, Local 963 v. N.B. Liquor Corp. (1979), 1979 CanLII 23 (SCC) , 97 D.L.R. (3d) 417 (S.C.C.), Dickson J., after referring to the examples of patently unreasonable error in the case of Local No. 333 v. Nipawin District Staff Nurses Association , 1973 CanLII 191 (SCC) , [1974] 1 W.W.R. 653 (S.C.C.), described the error of patent unreasonableness in the following terms at p. 425: Did the Board here so misinterpret the provisions of the Act as to embark upon an inquiry or answer a question not remitted to it? Put another way, was the Board’s

interpretation so patently unreasonable that its construction cannot be rationally supported by the relevant legislation and demands intervention by the Court upon review? [referred to in Bibeault at 191] [ 42 ] The patently unreasonable test is a severe test. The Supreme Court of Canada explained this test in its decision in Canada (A.G.) v.

P.S.A.C . , 1993 CanLII 125 (SCC) , [1993] 1 S.C.R. 941 at pp. 963-4, stating that under this test, a Court should only interfere with the decisions of a tribunal if the Court is convinced that the decision is "clearly irrational": It is said that it is difficult to know what "patently unreasonable" means. What is patently unreasonable to one judge may be eminently reasonable to another. Yet any test can only be defined by words, the building blocks of all reason. Obviously, the patently unreasonable test sets a high standard of review.

In the Shorter Oxford English Dictionary "patently", an adverb, is defined as "openly, evidently, clearly". Unreasonable" is defined as "[n]ot having the faculty of reason; irrational…. Not acting in accordance with reason or good sense". Thus, based on the dictionary definition of the words "patently unreasonable", it is apparent that if the decision of the Board reached, acting within its jurisdiction, is not clearly irrational, that is to say evidently not in accordance with reason, then it cannot be said that there was a loss of jurisdiction. This is clearly a very strict test. ...

It is not enough that the decision of the Board is wrong in the eyes of the court; it must, in order to be patently unreasonable, be found by the court to be clearly irrational. [ 43 ] In Health Sciences Association of British Columbia v.

British Columbia (I.R.C.) (1992), 1992 CanLII 373 (BC CA) , 67 B.C.L.R. (2d) 250 (B.C.C.A.) at p. 260, Southin J.A. examined the concept behind the patently unreasonable test (i.e. curial deference) in the following terms: The term "curial deference" is a way of expressing the notion that when the legislature sets up a specialized tribunal, invests it with broad powers and incorporates a privative clause into the enabling statute, it is telling the courts that it intends the tribunal to have the right, because it understands the subject-matter better than do judges, to make decisions which the judges might think to be wrong decisions. [ 44 ] The Supreme Court of Canada in Toronto Board of Education v.

O.S.S.T.F., Dist. 15 (1997), 1997 CanLII 378 (SCC) , 144 D.L.R. (4th) 385 at para. 44 , addressed the meaning of the patently unreasonable test with respect to findings of fact. If there is "no evidence" to support a finding of fact that finding will be considered patently unreasonable.

Otherwise, the Court will defer to a tribunal’s findings. [ 45 ] Having concluded that the Tribunal should be afforded a high degree of deference and that the patently unreasonable standard should apply with respect to the review of their decisions in the case at bar, I will now address the grounds of review raised by the Petitioner. D. GROUNDS OF REVIEW i.

Does an allegation that a Tribunal failed to follow its earlier decisions give rise to an independent ground of judicial review? [ 46 ] The Petitioner asserts that: "[t]he Tribunal lost or exceeded its jurisdiction and made a patently unreasonable error when it misapplied the two-stage analysis set out in the Director of Employment Standards , BCEST#D313/98, and found that the [Director] raised matters that fell within the scope of a reconsideration application." [ 47 ] In my view there is no reviewable error alleged by this ground of review.

The Tribunal publishes its decisions and strives for consistency in its decisions. Having said that, its decisions are not binding precedents. The Tribunal is not bound by the principle of stare decisis . Even if the Tribunal were to issue an inconsistent decision, that would not amount to an independent ground of judicial review: Health Sciences Association, supra, at p. 266; Domtar Inc. v.

Quebec (Commission d’appeal en matiere de lesions professionelles), 1993 CanLII 106 (SCC) , [1993] 2 S.C.R. 756 at paras. 83 and following. [ 48 ] The Tribunal was created with a broad mandate to interpret and apply the Act in a manner consistent with the remedial purposes of the Act . Its approach to exercising its jurisdiction on reconsideration has been set out in a number of cases. The fact that a panel does

not apply this test or purports to apply this test but errs in its application does not, in my view, give rise to a reviewable error unless the decision reached is patently unreasonable. The proper focus of a judicial review proceeding is whether the Tribunal has exceeded its jurisdiction. Judicial review is not an appeal to determine whether the Tribunal has correctly followed its own jurisprudence. [ 49 ]

Section 116 of the Act provides the Tribunal with a broad authority to review its decisions: 116

(1) On application under subsection (2) or on its own motion, the tribunal may (

a) reconsider any order or decision of the tribunal, and (

b) cancel or vary the order or decision or refer the matter back to the original panel.

(2) The director or a person named in a decision or order of the tribunal may make an application under this section.

(3) An application may be made only once with respect to the same order or decision. [ 50 ] The ancillary powers provided to the Tribunal under

Part 12 of the Act and the Inquiry Act , R.S.B.C. 1996, c. 224 , to determine its own practice and procedure on reconsideration confirm the broad power given the Tribunal on reconsideration. [ 51 ] This and other courts have interpreted similar provisions as providing a broad permissive authority to the tribunal in question – sometimes referred to as a plenary independent power to reconsider its prior decisions: Bakery, Confectionery and Tobacco Worker’ International Union, Local 468 v. B.C. (L.R.B.), 2000 BCSC 1325 (CanLII) , [2000] B.C.J.

No. 2153 (Q.L.) (B.C.S.C.) at para. 11 . [ 52 ] It is my view that beyond the clear wording of the Act , and the judicial support for the position of the Tribunal, it would undermine the purposes of the Act and the expert role envisioned for the Tribunal, if I were to accede to the Petitioner’s argument on this point. [ 53 ] Counsel for the Petitioner has drawn my attention to prior decisions of the Tribunal regarding the scope of reconsideration. In my view, these decisions are not a recognition by the Tribunal that it lacks jurisdiction to engage in a broader review.

Rather these decisions of the Tribunal establish when, as a matter of Tribunal policy, it will exercise its authority to reconsider a decision of an original panel. [ 54 ] There is, in my view, a fundamental distinction between a judicially imposed limitation on the Tribunal’s jurisdiction and a self- imposed guideline on when and how a discretion will be exercised. This distinction goes to the heart of judicial review proceedings.

In my view, a review of the role of the Tribunal and the purposes of the Act , along with the clear wording of the Act , support the assertion that it is the Tribunal rather than the Court which is to make that determination. ii. Did the Reconsideration Panel commit a reviewable error of fact or law? [ 55 ] I will deal with the second and third grounds of review together.

The Petitioner submits that: The Tribunal lost or exceeded its jurisdiction and made a patently unreasonable error when it ignored, misinterpreted, misstated and/or misapplied the evidence before the original Adjudicator, and found, among other things, that… [the Petition then sets out three allegedly erroneous findings]. The Tribunal lost or exceeded its jurisdiction and made a patently unreasonable error when it misapplied

Section 58 of the Employment Standards Act and the cases that interpret it. [ 56 ] As set out above, an allegation that the Tribunal has failed to follow its earlier decisions does not give rise to a reviewable error. Similarly, if it is the Employer’s assertion that the Tribunal misinterpreted a decision of this Court, that does not give rise to a reviewable error: Pacific Press Ltd. v. Vancouver-New Westminster Newspaper Guild, Local 115 (1989), 1989 CanLII 2683 (BC CA) , 34 B.C.L.R. (2d) 339 (B.C.C.A.).

a) The alleged error of fact [ 57 ] The Petitioner’s argument is, in essence, that the Reconsideration Panel made a patently unreasonable finding of fact when it

determined that commissions earned from an employee’s clients while that employee was on vacation were "wages" within the meaning of the Act . The Petitioner submits that the Tribunal erred when it did not accept what it submits were the findings of fact made by the Original Panel of the Tribunal. [ 58 ] In my view, the Reconsideration Decision turned not on facts, but on the law: the Panel’s finding that commissions were wages within the meaning of the Act . That is a matter which is squarely within the authority of the Tribunal and is only reviewable if the

interpretation is patently unreasonable. It was not. Commissions are wages within the meaning of the Act and that is what the Reconsideration Decision turned on. Even the Employer treated commissions as wages for vacation pay purposes. The Employer had been paying 4% vacation pay on all commissions earned including commissions earned from sales which occurred when the employee was on vacation.

It was only when the Employer realized that it was required to pay 6 rather than 4 percent vacation pay that it attempted to change the characterization of these payments from commissions to vacation pay. [ 59 ] In any case, the Reconsideration Panel was not bound to the facts as found by the Original Panel. As set out above, s. 116 of the Act gives the Tribunal a broad authority to review its earlier decisions. It is not bound by the findings of law or fact below. [ 60 ] The Reconsideration Panel conducted a hearing by way of written submissions. It is expressly authorized to do so under s. 107 of the Act .

The Reconsideration Panel had before it all of the material which is before this Court. It had the Determination, the appeal document, the Original Decision, the application for reconsideration, the Employer’s response to that application and the Director’s reply. There was support for all of the Tribunal’s findings of fact. [ 61 ] Implicit in the Petitioner’s argument is the assertion that the Tribunal was not entitled to consider the factual findings of the Director or the factual assertions advanced in the submissions to the Reconsideration Panel.

As set out above, the Reconsideration Panel heard the parties and was not required to hold an oral hearing. Moreover, the Petitioner’s assertion that a Reconsideration Panel is bound by the findings of the Original Panel ignores the structure of the Act , the respective roles of the Director and the Tribunal, and the nature of an appeal to the Tribunal. [ 62 ] The Petitioner argues that the findings were wrong. With respect, the question properly before this Court is not whether the Tribunal’s findings of fact were correct but rather, whether they were patently unreasonable.

In my view, there was evidence before the Reconsideration Panel to support its findings of fact and that those findings were not patently unreasonable. [ 63 ] It is, however, now important that the Director, in regard to her administration of the Act comment on a serious error of law by the Tribunal’s appeal adjudicator, which was corrected by the Tribunal in its Reconsideration Decision. If this error, concerning the payment of vacation pay to commission employees had not been corrected, it would have resulted in a reduction of statutory protections to all commission employees in this Province.

b) The alleged error of law [ 64 ] The judicial decision upon which the Reconsideration Panel based its decision was Atlas Travel Service Ltd. v. British Columbia (Director of Employment Standards) (1994), 1994 CanLII 2331 (BC SC) , 99 B.C.L.R. (2d) 37 (B.C.S.C.). Braidwood J. (as he then was) was dealing with the vacation pay provisions of the 1980 Act ( s. 36(1) (b)), which are identical, for all practical purposes, to s. 58 of the Act applicable to this review. The wage payment practice the Court was dealing with, is on all fours with the wage payment practices of the employer in this review.

Atlas Travel attempted to have the employee’s commission include vacation pay, the Court commented as follows at paras. 9-10: This argument fails on a logical basis. By the Employment Standards Act , s. 36(1) (

b) after five years of employment, an employee shall be entitled to three weeks of vacation. By the contract the travel agents signed with Atlas Travel, after two years of vacation, an employee would be entitled to three weeks of vacation. Assuming a base commission of 50 percent, the Employment Standards Act provides for 2 per cent vacation pay per week. Therefore, with 2 weeks of vacation, the employee is receiving 46 per cent commission. With 3 weeks of vacation, that commission drops down to 44 per cent.

This is an absurd result, for an employee’s "total wages" ought not to decline with seniority in order to fund a statutory obligation which rests with an employer . The Employment Standards Act sets up a scheme whereby an employer is obligated to pay an employee something in addition to their wages for annual vacations and general holidays. Section 37(1) states that the annual vacation pay shall be calculated on the employee’s total wages.

Therefore, the appellant’s attempt to have the employee’s commission include their vacation and holiday pay does not comply with the Employment Standards Act . [my emphasis] [ 65 ] The Reconsideration Panel was not, as the Petitioner alleges, exceeding its jurisdiction or making a patently unreasonable or clearly irrational decision. The Reconsideration Panel was correcting a clear error of law by the appeal adjudicator.

It would have been patently unreasonable of the Reconsideration Panel not to make this correction. [ 66 ] In Atlas , the Court notes that using an employee’s commission to satisfy the vacation pay requirements of the Act produces an "absurd result". That result, by mathematical analysis, is the more senior the employee and therefore the longer vacation they are entitled to, the lesser the rate of commission they are entitled to.

This is because the employer is satisfying the requirement to pay vacation pay under s. 58 of the Act with the employees' own commissions, and as the Court in Atlas notes at para. 10, "an employer is obligated to pay an employee something in addition to their wages for annual vacation".

[ 67 ] The position advocated for by the Petitioner produces an "absurd result". The Petitioner’s argument also ignores the caution of the courts concerning the

interpretation of employment statutes. In Rizzo & Rizzo Shoes Ltd. (Re) (1998), 1998 CanLII 837 (SCC) , 154 D.L.R. (4th) 193 (S.C.C.), the Court cautioned against an

interpretation of an employment statute which produced an absurd result: [27] In my opinion, the consequences or effects which result from the Court of Appeal’s

interpretation of ss. 40 and 40(

a) of the ESA are incompatible with both the object of the Act and with the object of the termination and severance pay provisions themselves. It is a well- established principle of statutory

interpretation that the legislature does not intend to produce absurd consequences. According to Côté , ( supra ), an

interpretation can be considered absurd if it leads to ridiculous or frivolous consequences, if it is extremely unreasonable or inequitable, if it is illogical or incoherent, or if it is incompatible with other provisions or with the object of the legislative enactment (at pp. 378-80). Sullivan echoes these comments noting that a label of absurdity can be attached to

interpretations which defeat the purpose of a statute or render some aspect of it pointless or futile (Sullivan, Construction of Statutes , supra , at p. 88). [ 68 ] Further at para. 24 in Rizzo the Court cites Machtinger v. HOJ Industries Ltd. , 1992 CanLII 102 (SCC) , [1992] 1 S.C.R. 986 and states the following: Machtinger described, at p. 1003, the object of the ESA as being the protection of "…the interests of employees by requiring employers to comply with certain minimum standards, including minimum periods of notice of termination". Accordingly, the majority concluded, at p. 1003, that "…an

interpretation of the Act which encourages employers to comply with the minimum requirements of the Act , and so extends its protection to as many employees as possible, is to be favoured over one that does not". Both Rizzo and Machtinger were adopted in this Province in British Columbia (Director of Employment Standards) v. Eland Distributors Ltd. (1996), 1996 CanLII 3025 (BC SC) , 21 B.C.L.R. (3d) 91 (B.C.S.C.) . [ 69 ] In her Determination, after examination of the employer’s payroll records, the Director found that the Petitioner had not paid vacation pay in accordance with s. 58 of the Act .

The Original Panel rejected this finding because he overlooked the judicial decision in Atlas , supra. It was reasonable and indeed essential that the Reconsideration Panel correct the error of law in the appeal decision. [ 70 ] On the evidence before the Court, as set out in the record of the decisions below, and in the context of a judicial review, the Tribunal’s decision was reasonable and rational. They did not exceed their jurisdiction by correcting a clear error of law. E. CONCLUSION [ 71 ] On the basis of the foregoing, the petition is dismissed with costs. “S.R. Romilly, J.” The Honourable Mr.

Justice S.R. Romilly