2013 ONSC 2217, 2013 ONSC 2217

CITATION : Person v. County of Grey, 2013 ONSC 2217 COURT FILE NO.: 11-065 DATE: 20130510 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: ) ) Shirley Person ) ) ) Peter T. Fallis, for the Applicant ) Applicant ) ) - and - ) ) ) The Corporation of the County of Grey ) ) ) David I. Wakely , for the Respondent ) Respondent ) ) ) ) HEARD: April 11, 2012 REASONS FOR JUDGMENT Justice Thomas A. Bielby INTRODUCTION [ 1 ] The applicant, in her fresh Notice of Application, dated October 26, 2012, seeks a declaration that the termination of her employment by the respondent violated

section 275 of the Municipal Act , 2001, S.O. chap. 25 and was therefore unlawful. [ 2 ] The applicant further seeks a declaration that her employment, therefore continues and that she is entitled to all the salary and benefits of her employment. FACTS [ 3 ] On November 22, 2010, the applicant, who was the administrator of a long- term care facility owned and operated by the

respondent, was terminated from her employment with the respondent. The dismissal was conducted by senior staff members. [ 4 ] The applicant had been hired for the position on June 13, 2003 and on August 5, 2003, her employment was authorized by by- law 4055-02. The relevant legislation at the time was The Homes for the Aged and Rest Homes Act which required that the hiring of an administrator be done by by-law. [ 5 ] The Homes of the Aged and Rest Homes Act was repealed prior to November 22, 2010. [ 6 ] The respondent’s offer of employment and the terms thereof were set out in a letter, dated June 4, 2003.

The applicant, on June 10, 2003, countersigned the letter, indicating her acceptance of the offer and its terms. [ 7 ] One of the terms stipulated that the respondent could terminate the employment without cause upon notice or such payment as is required by the Employment Standards Act . Given the length of her employment the legislation required that she receive 14.5 weeks of salary on termination. In fact, she received 6 months’ salary in lieu of reasonable notice. [ 8 ] 2010 was an election year for Ontario municipalities.

September 10, 2010 was the Nominations Day, being the last day nominations for election would be accepted. The election was held on October 25, 2010 and the new Council was inaugurated on December 7, 2010. [ 9 ] For the purposes of this ruling the period between September 10, 2010 and December 7, 2010 will be referred to as the “election period”. The termination of the applicant’s employment occurred within the election period. [ 10 ] The election period is relevant in the context of

section 275 of the Municipal Ac t. This section, under certain circumstances, prohibits municipalities from taking certain actions within that period unless the power to do so was properly delegated prior to the Nominations Day. [ 11 ] Subsection (6) of

section 275 states, “Nothing in this

section prevents any person or body exercising any authority of a municipality that is delegated to the person or body prior to nomination day for the election of a new council.” [ 12 ] One of those restricted actions was the hiring and dismissal of employees. [ 13 ] There is no dispute that on November 22, 2010 the respondent was subject to this restriction.

Accordingly, the applicant could only have been dismissed from her employment if the power to dismiss was properly delegated to those staff persons who terminated her employment. [ 14 ] The applicant was terminated by her Department Head and the Human Resources Director. The termination was confirmed shortly thereafter by the respondent’s Chief Administrative Officer. All three were senior employees of the respondent. [ 15 ] The respondent had, in 2005, adopted a Human Resources Policy Manual. The applicant was a management level employee and answered to a Department Head.

According to the Manual, the applicant could be terminated by senior staff in the manner in which she was terminated. ARGUMENT OF THE APPLICANT AND DISCUSSION THEREOF [ 16 ] Counsel for the applicant relies on

section 5 of the Municipal Act . Subsection 1 stipulates that, “The powers of a municipality shall be exercised by its council”. [ 17 ] Subsection 3 states, “A municipal power, including a municipality’s capacity, rights, powers and privileges under

section 9, shall be exercised by by-law unless the municipality is specifically authorized to do otherwise”. [ 18 ] The applicant argues that the hiring and firing of employees is a power that must be exercised by by-law unless the municipality is specifically authorized to do otherwise. [ 19 ] The applicant acknowledges that the respondent has the general power to delegate the hiring and firing of employees but argues that such delegation must be authorized by by-law and that the Human Resources Manual, under which the power to hire and fire employees was delegated, was not adopted by by-law. [ 20 ] Further, counsel for the applicant submits that the power to delegate under section 275 (6) must also be exercised by a specific by-law prior to the nomination day in each and every election. [ 21 ] Counsel for the applicant made reference to section 270 (1) of the Municipal Act which states, “A municipality shall adopt and maintain policies with respect to the following matters:…” 2. “It’s hiring of employees.” [ 22 ] In this

section and others there is no reference to the dismissal of employees. For the purposes of this application I have concluded that if a power is granted to hire an employee, by implication, the power includes the ability to dismiss an employee. It just makes common sense.

[23] Section 270 (1) of the Municipal Act requires a municipality to adopt and maintain policies with respect to the delegation of itpowers and duties. [24] The respondent, by by-law 4470-08 and 4608-09, and prior to the applicant’s dismissal, adopted a Delegation Policy’. [25] Within that policy and under the title, “Policy Statement” it states in part, “Council’s decisions are generally expressed by by-law or resolution of Council carried by a majority vote”. [26] Under the title, “Policy Requirements”, counsel for the applicant referred to paragraphs 1 and 2 which state, All delegations of Council powers duties or functions shall be effected by by- law. 2.

Unless a power, duty or function of Council has been expressly delegated by by-law all of the powers, duties and functions of Councilremain with Council. [27] Counsel for the applicant submits therefore that pursuant to the respondent’s own policy in place on November 22, 2010, theday of the applicant’s dismissal, the delegation of the power to dismiss an employee must be done by by-law. [28] As referenced above, the respondent also adopted a Human Resources Policy Manual.

The minutes of the County of GreyFinance and Personnel Committee, dated August 23, 2005, approved the Human Resources Manual and sent the matter on to council forapproval. [29] At the meeting of Council on September 6, 2005, it was moved and carried that the minutes of the Finance and PersonnelCommittee and the recommendations contained therein, “be adopted as presented and engrossed in the minutes”. [30] The Manual was adopted by council but was not adopted by by-law. [31] The applicant submits that the Human Resources Policy Manual, to be valid and enforceable, had to be adopted by by-law.

Further, since the policy was not so enacted, only the council could dismiss an employee. [32] The applicant relies on the authority of Chaperon v. Sault Ste. Marie (ON SC), [1994] O.J. No. 1602, adecision of S.D. Loukidelis J. At paragraph 54 of the decision the learned justice said, A municipal power must be exercised strictly according to the rules laid down by statute.

Where a power is stipulated to be exercisableonly by by-law, any resolution which purports to exercise that power is invalid. [33] The learned judge then goes on to refer to section 101 (1) of the Municipal Act in force at the time which is comparable tosection 5 (3) of the current Municipal Act. [34] It must be pointed out that the Human Resources Policy Manual was adopted at least three years prior to the Delegation ofPowers Policy. There is no evidence if there was a delegation policy in place in 2005.

While the Delegation Policy enacted in 2008required any delegation of powers to be done by by-law, it would not have a retroactive effect. [35] The applicant further argues that even if the Human Resources Policy Manual was properly enacted, the firing of employeesduring the Election Period was a delegated power that had to specifically be enacted prior to the Nominations Day, 2010. [36] In support of that submission, counsel for the applicant included in the exhibit book two by-laws of the County of Wellington. These by-laws were enacted specifically for the purposes of

section 275, and were in relation to the election periods after the September26, 2003 Nomination Day and after the September 10, 2010 Nomination Day. Those by-laws delegated the power to hire and dismissemployees to a specific staff member. [37] I do not find these by-laws of much assistance for what I need to decide. They only provide examples of the practise of one municipality.

It does not assist me in determining if such by-laws are legally requiredprior to each and every election period for all municipalities. [38] Included in the applicant’s factum is an argument that because the applicant was hired by by-law in accordance with the Homesfor the Aged and Rest Homes Act in effect in 2003 that the power to fire her was a legislative power which could not be delegated. Aspreviously noted the legislation was repealed before November, 2010. By that date it was no longer necessary to hire administrators oflong term care facilities by by-law.

Accordingly, it cannot be argued that a by-law would be necessary to dismiss an administrator. [39] Counsel of the applicant acknowledged that on March 22, 2011, the Finance and Personnel Committee affirmed the terminationof the applicant’s employment, effective November 22, 2010. The committee’s recommendation in this regard was adopted by Councilin its meeting of April 5, 2011.

[40] It was further acknowledged by counsel for the applicant that it was open to this Court to find that if the termination onNovember 22, 2010, was unlawful, the court could find that the termination occurred on March 22, 2011.

RESPONDENT’S ARGUMENT [41] Counsel for the respondent submitted that this is an employment law case not a municipal law case. [42] Counsel relied on the employment contract entered between the parties and that the respondent by contract had the power toterminate the applicant without cause. [43] Counsel for the respondent submits that the Human Resources Policy Manual was adopted by the appropriate committee of therespondent and was recommended to Council.

The Manual was then adopted by Council in an open and democratic fashion. [44] Counsel for the respondent submits that the Manual is and has been relied on by the respondent and has been used to hire andterminate employees since its adoption. [45]

Section 270 of the Municipal Act requires the respondent to “adopt” and maintain policies with respect to the hiring ofemployees. The

section does not specifically say the adoption of the policies needs to be done by by-law. [46] Counsel for the respondent submits that the adoption of the Human Resources Manual, from a practical standpoint, followed allthe steps necessary for the passage of a by-law. It was vetted by committee and dealt with by council as I said, democratically and in theopen.

It was submitted that Brian Mullin, the ex-mayor of the respondent, who provided an affidavit on behalf of the applicant,admitted, on his cross examination on his affidavit, that he believed the Human Resources Manual was properly enacted and that thedelegation of the power to hire and fire employees to senior staff was done properly. [47] Counsel for the respondent argued that there is absolutely no evidence to suggest that had the Policy been adopted by by-law theresult would be any different.

The argument of the applicant was described as one which relies on a technicality and is an argument ofform and not substance. [48] It is the position of the respondent that the power to hire and dismiss employees does not need to be delegated prior to theNomination Day for each election. On this point I agree with the respondent.

There is nothing in subsection 275 (6) which sets out sucha requirement and as I noted previously the Wellington County by-laws, while perhaps prudent, cannot be considered an authority on thisissue. [49] Counsel for the respondent submits that the issues raised by the applicant are now moot because the new Council affirmed theapplicant’s termination in the spring of 2011. [50] It is the submission of the respondent that a by-law is not required in matter of administrative routine or of an unimportant trifling character.

The respondent relies on a passage from The Law of Canadian Municipal Corporations, 2nd edition. I accept thatstatement and agree that a by-law is not required for every act of council. Councils often express their opinions by resolution. Therespondent categorized its adoption of the Human Resources Manual by resolution. [51] I do not consider the firing of an employee to be trivial in nature. It may very well be administrative in nature.

What theMunicipal Act does require is the adoption of policies related to the hiring of employees and the issue is, whether the policies have beenproperly enacted. [52] I accept the submissions of the respondent that the trend of the courts is to enhance the local decision making and avoid thetechnical readings of municipal powers. I agree that the courts should accord municipal powers a liberal and benevolent

interpretationand only in the clearest of cases should a municipal by-law be held to be ultra vires (114957 Canada Ltée (Spraytech, Sociétéd'arrosage) v. Hudson (Town) 2001 SCC 40 , [2001] 2 S.C.R. 241). It can be argued that the adoption of the Human ResourcesPolicy Manual by the respondent’s council should only be held invalid in the clearest of cases. [53] The respondent further submits that the Municipal Act, 2001, confers broad powers on municipal staff. [54]

Section 227 dictates that it is the role of the officers and employees to implement council’s decisions and establishadministrative practices and procedures to carry out council’s decisions and to carry out the duties council assigned by the municipality. [55] Clearly council, in adopting the Human Resources Policy Manual, made a decision and it was the duty of staff to carry out theduties assigned. [56] The respondent argues that council has the authority to discharge its statutory duties by resolution.

It was submitted that where amunicipality has taken action in the discharge of a statutory duty, the decision remains valid even if not expressed by by-law. Statutory duties can be conducted by resolution (The Law of Canadian Corporations, 2nd 3d. para. 71.4). [57] Counsel for the respondent submits that his client is under statutory obligation to appoint an administrator for every long termcare facility (under the new current legislation) and implicit in that is the power to dismiss. FURTHER ANALYSIS

[ 58 ] Given the date on which the applicant was terminated, it is clear the respondent and now this Court must have regard to

section 275 of the Municipal Act. [ 59 ] I have referenced the respondent’s policies with respect to delegation and human resources. The applicant was terminated in accordance with the latter which was adopted prior to the adoption, by by-law, of the delegation by-law. [ 60 ] I accept the hiring and termination of employees is an administrative function.

The respondent has over 800 employees and the function of hiring and dismissing employees of this number, at least to a certain level of seniority would not be a legislative function of council. [ 61 ] With respect to the termination of the applicant, the senior staff involved in the dismissal, were authorized to exercise such powers by the Policy adopted by council. [ 62 ] The only issue to decide is to determine whether in regards to

section 275 of the Municipal Act, 2001, has the power to delegate the authority to hire and dismiss employees been properly exercised despite the fact it was not adopted by by-law? [ 63 ] An extremely technical reading of the Municipal Act could lead to a conclusion that the power to dismiss employees can only be exercised by by-law and that the adoption of a Human Resources Manual Policy can only be done by by-law having regard to section 5 (3) of the Municipal Act , 2001. [ 64 ] However, I have also had regard to

section 8 of the Municipal Act which allows me to broadly interpret the powers of council in a manner to enable the respondent to govern its affairs as it considers appropriate and to enhance the municipality’s ability to respond to municipal issues. [ 65 ] The hiring and dismissal of employees clearly fall within those categories. [ 66 ] Further, I believe that the normal and day-to-day staffing issues and responsibilities are administrative in nature and I am not persuaded that, leaving aside the issue of delegation, in a modern municipal corporation, the power would not lie with senior staff, in any event. [ 67 ] At paragraph 71.6, in the text, The Law of Municipal Corporations, 2 nd edition, by Ian MacF.

Rogers, I quote, “a municipality may employ a servant without the formality of a by-law”. I accept that statement. [ 68 ]

Section 270 of the Municipal Act requires the respondent to “adopt” and maintain policies with respect to its hiring of employees. [ 69 ] The respondent, at its council meeting of September 6, 2005, adopted such a policy. Therein the power to hire and dismiss employees was delegated to senior staff. [ 70 ] The policy was in effect prior the September, 2010 Nomination Day and complied with section 275 (6).

The policy was in effect on November 22, 2010, the day the applicant was dismissed from her employment. [ 71 ] Further, the termination of the applicant was confirmed and validated by by-law in the spring of 2011 [ 72 ] These findings, in my opinion, reject a strict reading of the Municipal Act and represent an

interpretation necessary to enable the respondent to govern its affairs as it considers appropriate and to respond to its issues. [ 73 ] The intent of

section 275 is clear. It is to control the actions of what is often referred to as a lame duck council, a council that, without limitations, could take certain actions for which it will never be held accountable. [ 74 ] The delegation power set out in the Human Resources Policy Manual adopted by council in practically the same manner by which it adopts by-laws, that is, by democratic vote, in open council in my opinion complies with the intent of

section 275 and enables the respondent to govern its affairs. CONCLUSION [ 75 ] I find that that the applicant was dismissed from her employment with the respondent in accordance with the policy adopted by council and the application is dismissed. [ 76 ] If I am wrong in this conclusion I would find that the applicant was dismissed from her employment on March 22, 2011. [ 77 ] On the issue of costs, and if the parties cannot agree with respect to costs, I will accept written submission within 21 days, those submission limited to 5 pages in length. ___________________________ Justice Thomas A. Bielby Released: May 10 , 2013.

CITATION : Person v. County of Grey, 2013 ONSC 2217 COURT FILE NO.: 11-065 DATE: 20130510 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: Shirley Person Applicant - and – The Corporation of the County of Grey Respondent REASONS FOR JUDGMENT Justice Thomas A. Bielby Released: May 10 , 2013.