Federal Court of Appeal Decisions

Decision Information

Decision Content

Date: 2003 06 04

Docket: A-241-02

Neutral citation: 2003FCA248

CORAM:        DÉCARY J.A.

LINDEN J.A.

SHARLOW J.A.

BETWEEN:

                                                          DYNAMEX CANADA INC.

                                                                                                                                                       Appellant

                                                                                                                                                     (Applicant)

                                                                                 and

                                                       ADELE VICTORIA MAMONA

                                                    RANDOLPH WILLIAM HEPNER

                                                              ROBERT PHILIP CYR

                                                ATTORNEY GENERAL OF CANADA

                                                                                                                                               Respondents

                                                                                                                                              (Respondents)

                                              Heard at Winnipeg, Manitoba on April 9, 2003

                                     Judgment delivered at Ottawa, Ontario, on June 4, 2003.

REASONS FOR JUDGMENT BY:                                                                               SHARLOW J.A.

CONCURRED IN BY:                                                                                                         DÉCARY J.A.

                                                                                                                                               LINDEN J.A.


Date: 20030604

Docket: A-241-02

Neutral citation: 2003FCA248

CORAM:        DÉCARY J.A.

LINDEN J.A.

SHARLOW J.A.

BETWEEN:

                                                          DYNAMEX CANADA INC.

                                                                                                                                                       Appellant

                                                                                                                                                     (Applicant)

                                                                                 and

                                                       ADELE VICTORIA MAMONA

                                                    RANDOLPH WILLIAM HEPNER

                                                              ROBERT PHILIP CYR

                                                ATTORNEY GENERAL OF CANADA

                                                                                                                                               Respondents

                                                                                                                                              (Respondents)

                                                        REASONS FOR JUDGMENT

SHARLOW J.A.                                                                                                   


[1]                 This is an appeal from a judgment dismissing an application for judicial review of the decision of a referee under section 251.12 of the Canada Labour Code, R.S.C. 1985, c. L-2: Dynamex Canada Inc. v. Mamona (2002), 218 F.T.R. 269 (T.D.). The main issue in the appeal is whether the respondents Adele Victoria Mamona, Randolph William Hepner and Robert Philip Cyr were employees of the appellant Dynamex Canada Inc. from 1997 to 1999 (or, in the case of Mr. Cyr, to October 15, 1998).

[2]                 The statute

[3]                 The provisions of the Canada Labour Code that are most relevant to this appeal are as follows:

166. In this Part, ...

166. Les définitions qui suivent s'appliquent à la présente partie. ...

"employer" means any person who employs one or more employees; ...

« employeur » Personne employant un ou plusieurs employés. ...

"inspector" means any person designated as an inspector under section 249; ...

« inspecteur » Personne désignée à ce titre conformément à l'article 249. ...

                         ...

                         ...

249. (1) The Minister may designate any person as an inspector for the purposes of this Part.

249. (1) Le ministre peut désigner quiconque à titre d'inspecteur pour l'application de la présente partie.

(2) For the purposes of this Part and the regulations, an inspector may

(2) Pour l'application de la présente partie et de ses règlements, l'inspecteur peut :

(a) inspect and examine all books, payrolls and other records of an employer that relate to the wages, hours of work or conditions of employment affecting any employee;

a) examiner les livres, feuilles de paie et autres documents de l'employeur ayant trait au salaire, à la durée du travail ou aux conditions d'emploi de tout employé;

(b) take extracts from or make copies of any entry in the books, payrolls and other records mentioned in paragraph (a);

b) reproduire ces documents en tout ou en partie;

(c) require any employer to make or furnish full and correct statements, either orally or in writing, in such form as may be required, respecting the wages paid to all or any of his employees, and the hours of work and conditions of their employment;

c) obliger l'employeur à fournir des renseignements complets et exacts, oralement ou par écrit et en la forme demandée, sur les salaires payés à tous ses employés ou à l'un d'entre eux, sur la durée de leur travail et sur leurs conditions d'emploi;

(d) require an employee to make full disclosure, production and delivery to the inspector of all records, documents, statements, writings, books, papers, extracts therefrom or copies thereof or of other information, either orally or in writing, that are in the possession or under the control of the employee and that in any way relate to the wages, hours of work or conditions of his employment; and ...

d) obliger l'employé à lui communiquer les documents -- ou leurs copies -- ainsi que les autres renseignements oraux ou écrits en sa possession ou son pouvoir qui, de quelque façon, ont trait à son salaire, à la durée de son travail ou aux conditions de son emploi; ...

                         ...

                         ...

251.1 (1) Where an inspector finds that an employer has not paid an employee wages or other amounts to which the employee is entitled under this Part, the inspector may issue a written payment order to the employer, or, subject to section 251.18, to a director of a corporation referred to in that section, ordering the employer or director to pay the amount in question, and the inspector shall send a copy of any such payment order to the employee at the employee's latest known address.

251.1 (1) L'inspecteur qui constate que l'employeur n'a pas versé à l'employé le salaire ou une autre indemnité auxquels celui-ci a droit sous le régime de la présente partie peut ordonner par écrit à l'employeur ou, sous réserve de l'article 251.18, à un administrateur d'une personne morale visé à cet article de verser le salaire ou l'indemnité en question; il est alors tenu de faire parvenir une copie de l'ordre de paiement à l'employé à la dernière adresse connue de celui-ci.

(2) Where an inspector concludes that a complaint of non-payment of wages or other amounts to which an employee is entitled under this Part is unfounded, the inspector shall so notify the complainant in writing.

(2) L'inspecteur qui conclut à l'absence de fondement d'une plainte portant que l'employeur n'a pas versé à l'employé le salaire ou une autre indemnité auxquels celui-ci a droit sous le régime de la présente partie avise le plaignant par écrit de sa conclusion.

                         ...

                         ...

251.11 (1) A person who is affected by a payment order or a notice of unfounded complaint may appeal the inspector's decision to the Minister, in writing, within fifteen days after service of the order, the copy of the order, or the notice.

251.11 (1) Toute personne concernée par un ordre de paiement ou un avis de plainte non fondée peut, par écrit, interjeter appel de la décision de l'inspecteur auprès du ministre dans les quinze jours suivant la signification de l'ordre ou de sa copie, ou de l'avis.

                         ...

                         ...

251.12 (1) On receipt of an appeal, the Minister shall appoint any person that the Minister considers appropriate as a referee to hear and adjudicate on the appeal, and shall provide that person with

(a) the payment order or the notice of unfounded complaint; and

(b) the document that the appellant has submitted to the Minister under subsection 251.11(1).

251.12 (1) Le ministre, saisi d'un appel, désigne en qualité d'arbitre la personne qu'il juge qualifiée pour entendre et trancher l'appel et lui transmet l'ordre de paiement ou l'avis de plainte non fondée ainsi que le document que l'appelant a fait parvenir au ministre en vertu du paragraphe 251.11(1).

(2) A referee to whom an appeal has been referred by the Minister

(2) Dans le cadre des appels que lui transmet le ministre, l'arbitre peut :

(a) may summon and enforce the attendance of witnesses and compel them to give oral or written evidence on oath and to produce such documents and things as the referee deems necessary to deciding the appeal;

a) convoquer des témoins et les contraindre à comparaître et à déposer sous serment, oralement ou par écrit, ainsi qu'à produire les documents et les pièces qu'il estime nécessaires pour lui permettre de rendre sa décision;

(b) may administer oaths and solemn affirmations;

b) faire prêter serment et recevoir des affirmations solennelles;

(c) may receive and accept such evidence and information on oath, affidavit or otherwise as the referee sees fit, whether or not admissible in a court of law;

c) accepter sous serment, par voie d'affidavit ou sous une autre forme, tous témoignages et renseignements qu'à son appréciation il juge indiqués, qu'ils soient admissibles ou non en justice;

(d) may determine the procedure to be followed, but shall give full opportunity to the parties to the appeal to present evidence and make submissions to the referee, and shall consider the information relating to the appeal; and

d) fixer lui-même sa procédure, sous réserve de la double obligation de donner à chaque partie toute possibilité de lui présenter des éléments de preuve et des observations, d'une part, et de tenir compte de l'information contenue dans le dossier, d'autre part;

(e) may make a party to the appeal any person who, or any group that, in the referee's opinion, has substantially the same interest as one of the parties and could be affected by the decision.

e) accorder le statut de partie à toute personne ou tout groupe qui, à son avis, a essentiellement les mêmes intérêts qu'une des parties et pourrait être concerné par la décision.

                         ...

                         ...

(4) The referee may make any order that is necessary to give effect to the referee's decision and, without limiting the generality of the foregoing, the referee may, by order,

(4) L'arbitre peut rendre toutes les ordonnances nécessaires à la mise en oeuvre de sa décision et peut notamment, par ordonnance :

(a) confirm, rescind or vary, in whole or in part, the payment order or the notice of unfounded complaint;

a) confirmer, annuler ou modifier -- en totalité ou en partie -- un ordre de paiement ou un avis de plainte non fondée;

(b) direct payment to any specified person of any money held in trust by the Receiver General that relates to the appeal; and

b) ordonner le versement, à la personne qu'il désigne, de la somme consignée auprès du receveur général du Canada;

(c) award costs in the proceedings.

c) adjuger les dépens.

(5) The referee shall send a copy of the decision, and of the reasons therefor, to each party to the appeal and to the Minister.

(5) L'arbitre transmet une copie de sa décision sur un appel, motifs à l'appui, à chaque partie ainsi qu'au ministre.

(6) The referee's order is final and shall not be questioned or reviewed in any court.

(6) Les ordonnances de l'arbitre sont définitives et non susceptibles de recours judiciaires.

(7) No order shall be made, process entered or proceeding taken in any court, whether by way of injunction, certiorari, prohibition, quo warranto or otherwise, to question, review, prohibit or restrain a referee in any proceedings of the referee under this section.

(7) Il n'est admis aucun recours ou décision judiciaire -- notamment par voie d'injonction, de certiorari, de prohibition ou de quo warranto -- visant à contester, réviser, empêcher ou limiter l'action d'un arbitre exercée dans le cadre du présent article.

[4]                 The following provisions of the Federal Court Act, R.S.C. 1985, c. F-7, are also relevant:

2. (1) In this Act,

2. (1) Les définitions qui suivent s'appliquent à la présente loi.

                         ...

                         ...

"federal board, commission or other tribunal" means any body or any person or persons having, exercising or purporting to exercise jurisdiction or powers conferred by or under an Act of Parliament ...

« office fédéral » Conseil, bureau, commission ou autre organisme, ou personne ou groupe de personnes, ayant, exerçant ou censé exercer une compétence ou des pouvoirs prévus par une loi fédérale ...

                         ...

                         ...

18. (1) Subject to section 28, the Trial Division has exclusive original jurisdiction

18. (1) Sous réserve de l'article 28, la Section de première instance a compétence exclusive, en première instance, pour_:

(a) to issue an injunction, writ of certiorari, writ of prohibition, writ of mandamus or writ of quo warranto, or grant declaratory relief, against any federal board, commission or other tribunal; and

a) décerner une injonction, un bref de certiorari, de mandamus, de prohibition ou de quo warranto, ou pour rendre un jugement déclaratoire contre tout office fédéral;

(b) to hear and determine any application or other proceeding for relief in the nature of relief contemplated by paragraph (a), including any proceeding brought against the Attorney General of Canada, to obtain relief against a federal board, commission or other tribunal.

b) connaître de toute demande de réparation de la nature visée par l'alinéa a), et notamment de toute procédure engagée contre le procureur général du Canada afin d'obtenir réparation de la part d'un office fédéral.

                         ...

                         ...

(3) The remedies provided for in subsections (1) and (2) may be obtained only on an application for judicial review made under section 18.1.

(3) Les recours prévus aux paragraphes (1) ou (2) sont exercés par présentation d'une demande de contrôle judiciaire.

18.1 (1) An application for judicial review may be made by the Attorney General of Canada or by anyone directly affected by the matter in respect of which relief is sought. ...

18.1 (1) Une demande de contrôle judiciaire peut être présentée par le procureur général du Canada ou par quiconque est directement touché par l'objet de la demande.

                         ...

                         ...

(3) On an application for judicial review, the Trial Division may

(3) Sur présentation d'une demande de contrôle judiciaire, la Section de première instance peut_:

(a) order a federal board, commission or other tribunal to do any act or thing it has unlawfully failed or refused to do or has unreasonably delayed in doing; or

a) ordonner à l'office fédéral en cause d'accomplir tout acte qu'il a illégalement omis ou refusé d'accomplir ou don't il a retardé l'exécution de manière déraisonnable;

(b) declare invalid or unlawful, or quash, set aside or set aside and refer back for determination in accordance with such directions as it considers to be appropriate, prohibit or restrain, a decision, order, act or proceeding of a federal board, commission or other tribunal.

b) déclarer nul ou illégal, ou annuler, ou infirmer et renvoyer pour jugement conformément aux instructions qu'elle estime appropriées, ou prohiber ou encore restreindre toute décision, ordonnance, procédure ou tout autre acte de l'office fédéral.

(4) The Trial Division may grant relief under subsection (3) if it is satisfied that the federal board, commission or other tribunal

(4) Les mesures prévues au paragraphe (3) sont prises par la Section de première instance si elle est convaincue que l'office fédéral, selon le cas_:

(a) acted without jurisdiction, acted beyond its jurisdiction or refused to exercise its jurisdiction;

a) a agi sans compétence, outrepassé celle-ci ou refusé de l'exercer;

(b) failed to observe a principle of natural justice, procedural fairness or other procedure that it was required by law to observe;

b) n'a pas observé un principe de justice naturelle ou d'équité procédurale ou toute autre procédure qu'il était légalement tenu de respecter;

(c) erred in law in making a decision or an order, whether or not the error appears on the face of the record;

c) a rendu une décision ou une ordonnance entachée d'une erreur de droit, que celle-ci soit manifeste ou non au vu du dossier;

(d) based its decision or order on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it;

d) a rendu une décision ou une ordonnance fondée sur une conclusion de fait erronée, tirée de façon abusive ou arbitraire ou sans tenir compte des éléments don't il dispose;

(e) acted, or failed to act, by reason of fraud or perjured evidence; or

e) a agi ou omis d'agir en raison d'une fraude ou de faux témoignages;

(f) acted in any other way that was contrary to law.

f) a agi de toute autre façon contraire à la loi.

                         ...

                         ...

27. (1) An appeal lies to the Federal Court of Appeal from any ... final judgment ... of the Trial Division.

27. (1) Il peut être interjeté appel, devant la Cour d'appel fédérale, des décisions suivantes de la Section de première instance_ ...

                         ...

                         ...

52.    The Federal Court of Appeal may

52.    La Cour d'appel peut_:

                         ...

                         ...

(b) in the case of an appeal from the Trial Division,

b) dans le cas d'un appel d'une décision de la Section de première instance_:

(I) dismiss the appeal or give the judgment and award the process or other proceedings that the Trial Division should have given or awarded,

(I) soit rejeter l'appel ou rendre le jugement que la Section de première instance aurait dû rendre et prendre toutes mesures d'exécution ou autres que celle-ci aurait dû prendre,

(ii) in its discretion, order a new trial, if the ends of justice seem to require it, or

(ii) soit, à son appréciation, ordonner un nouveau procès, si l'intérêt de la justice paraît l'exiger,

(iii) make a declaration as to the conclusions that the Trial Division should have reached on the issues decided by it and refer the matter back for a continuance of the trial on the issues that remain to be determined in the light of that declaration ...

(iii) soit énoncer, dans une déclaration, les conclusions auxquelles la Section de première instance aurait dû arriver sur les points qu'elle a tranchés et lui renvoyer l'affaire pour poursuite de l'instruction, à la lumière de cette déclaration, sur les points en suspens; ...

Facts

[5]                 The facts are fully stated in the referee's decision and are not in dispute. For the purposes of this appeal, only a summary is required.

[6]                 During the relevant periods, the claimants provided courier, messenger and delivery services, each pursuant to his or her own contract with Dynamex (or Zipper Courier Service Ltd., a company that Dynamex acquired in 1996; the two companies are treated as one for purposes of this case). The dates of the contracts were, in the case of Ms. Mamona, April 30, 1980, in the case of Mr. Cyr, March 1, 1990, and in the case of Mr. Hepner, November 16, 1990.


[7]                 The claimants' contracts were not identical, and were changed from time to time. However, they had many common features, including a statement that the complainant was an independent contractor.

[8]                 The contracts required the claimants to wear uniforms they leased from Dynamex. They were to provide their own vehicles, which they were to maintain in good working order, licensed, insured, and in a neat and presentable condition, all at their own cost. They were required to display Dynamex logos and trademarks on their vehicles at their own cost. They were to display no other advertisements on their vehicles except with the consent of Dynamex, which reserved the right to withhold its consent unreasonably and arbitrarily. The claimants were responsible for all cargo losses and were required to contribute to a claim fund or obtain insurance in that regard. They were required to lease a mobile radio unit from Dynamex. The customers were those of Dynamex. The claimants were paid a commission based on the amounts invoiced to the customers. Dynamex bore the risk of non-payment by its customers, but it deducted a percentage from the claimants' commissions for "bad debts".    The claimants were required to be bonded at their own cost. They were required to use waybills, manifest and other forms supplied by Dynamex. The contracts had no set term and could be terminated by either party on written notice. Dynamex promised to act fairly but reserved the right to allocate work as it saw fit among all drivers.


[9]                 The evidence of the claimants established that they owned or leased their own vehicles, which were painted in colours directed by Dynamex and displayed Dynamex logs. The claimants were expected to be available between 8 a.m. and 6 p.m. daily, except weekends and statutory holidays, but generally they were given vacation time when asked for. They worked a combination of regularly scheduled runs and ad hoc assignments, except for Mr. Cyr who, during the latter part of the relevant period was assigned full time to make deliveries for a single customer of Dynamex. The claimants generally could set their own priorities for deliveries, subject to specific instructions from Dynamex as to customer needs. They were free to refuse deliveries, and sometimes did so, without negative consequences.

[10]            Ms. Mamona and Mr. Cyr believed that they were not allowed to work for anyone else while their contracts with Dynamex were in force. Ms. Mamona's contract is silent on the point. Her contract does, however, contain a restrictive covenant that would preclude her from participating in any courier or delivery business in Winnipeg if her contract were terminated. There are restrictive covenants in the contracts of Mr. Hepner and Mr. Cyr also, but they are not as onerous. Only Mr. Cyr's contract precluded him, during the term of his agreement, from being a party to "any other agreement of a similar nature with any other corporation, partnership, firm or individual".


[11]            All of the claimants filed their income tax returns on the basis that they were self-employed, and claimed vehicle expenses as deductions. Dynamex took no deductions for income tax, employment insurance premiums or Canada Pension Plan contributions, but took deductions to cover payments to the Workers Compensation Board, mobile radio lease payments, bonding costs, cargo insurance and uniform rental, as applicable. There is some evidence that the claimants were content with their income tax status, as it meant less deductions from their remuneration than if they were employees.

[12]            An official of Revenue Canada rendered an opinion dated June 16, 1998 that for purposes of the Employment Insurance Act, S.C. 1996, c. 23, and the Canada Pension Plan, R.S.C. 1985, c. C-8, Mr. Cyr should be treated as self-employed. The record does not disclose the evidence upon which the Revenue Canada official relied in reaching that conclusion. The opinion could have been challenged, ultimately to the Tax Court of Canada, and then could have been further challenged in an application for judicial review to this Court. However, it appears that no appeal was ever commenced.

[13]            Mr. Hepner had for a short time in 1997 provided the services of two additional drivers to Dynamex, using trucks he provided. There was also evidence that the claimants would be permitted to provide a substitute driver. Dynamex reserved the right to approve any substitutes but apparently had seldom or never done so.


[14]            Dynamex sometimes took disciplinary action, in the form of reprimands, in relation to certain behaviour that was considered to be unacceptable. Mr. Cyr was once fired, but he returned after a time.

[15]            In 1998, the Canadian Union of Postal Workers were certified as the bargaining agent for Dynamex's owner/drivers. The claimants would be included in the bargaining unit (except Mr. Cyr who, as I understand it, no longer works for Dynamex). At some point during the process that led to certification, the claimants decided to assert a claim for vacation pay and holiday pay, on the basis that they were employees and not independent contractors. They filed complaints under Part III of the Canada Labour Code.

[16]            The complaints were investigated by an inspector appointed under subsection 249(1) of the Canada Labour Code. The inspector concluded that the complaints were well founded and, on June 15, 1999, she issued a payment order pursuant to section 251.1(1) for each complainant.

[17]            Dynamex submitted an appeal pursuant to section 251.11(1) after paying the amounts in dispute to the Minister as required by subsection 251.11(2), to be held in trust pending the resolution of the appeal. A referee was appointed under section 251.12 to deal with the appeal. He heard evidence and submissions over three days in 2000 and, on August 9, 2000, rendered a decision pursuant to subsection 251.12(4) confirming the payment order and ordering the amounts held in trust to be paid to the claimants.


[18]            The application of Dynamex for judicial review of the referee's decision was dismissed by a judge of the Trial Division. Dynamex has appealed that decision to this Court. The main issue in the appeal before the referee, as well as in the judicial review and in this appeal, is whether the claimants were employees of Dynamex during the relevant periods.

Powers of Inspector

[19]            As a preliminary matter, I will dispose of a red herring in the submissions of Dynamex. I refer to the arguments of Dynamex relating to the authority of the inspector to make a determination as to whether or not the claimants were employees of Dynamex. It was the task of the referee and the referee alone to determine whether the inspector erred and, if an error was found, to fashion an appropriate remedy under section 251.12; see Bissett v. Canada (Minister of Labour) (T.D.), [1995] 3 F.C. 762.

Standard of Review


[20]            The determination of the appropriate standard of review must be considered in every case involving judicial review. If a reviewing judge errs in choosing or applying the standard of review, the appellate court must conduct its own review based on the correct standard (see Dr. Q. v. College of Physicians and Surgeons of British Columbia, 2003 SCC 19, at paragraphs 43 and 44). In this case the reviewing judge concluded that the referee's decision should be reviewed on the standard of patent unreasonableness. The position of the claimants and the Attorney General is that the reviewing judge applied the appropriate standard of review.

[21]            Dynamex does not agree. In the written submissions of Dynamex on the standard of review, Dynamex appeared to be arguing that the referee had no authority at all to determine whether the claimants were employees of Dynamex. At the hearing, counsel for Dynamex explained that Dynamex was not taking that position. Rather, the position of Dynamex is that the referee's determination that the claimants were employees should be reviewed on the standard of correctness, because that issue is jurisdictional in nature. In other words, Dynamex argues that the referee had no jurisdiction to consider the complaints unless he was correct when he concluded that the claimants were employees of Dynamex. Dynamex submits that on this point, this case cannot be distinguished from U.E.S. Local 298 v. Bibeault, [1988] 2 S.C.R. 1048.


[22]            The facts in Bibeault were as follows. A company whose employees were represented by a certain union had a janitorial service contract with a school board. The school board terminated the contract and awarded a new contract to a different company whose employees were represented by a rival union. The union representing the employees of the company whose contract was terminated sought to displace the rival union by arguing that the new contractor was bound by the existing collective agreement, for which it was the certified bargaining agent. Its position depended upon the application of section 45 of the Labour Code, R.S.Q. c. C-27, which in turn depended upon whether the cancellation of the old contract and the award of the new contract was "the alienation or operation by another in whole or in part of any undertaking" ( « l'aliénation ou la concession totale ou partielle d'une enterprise » ). A labour commissioner agreed with the applicant union, as did the Labour Court. However, the Superior Court and the Court of Appeal of Quebec disagreed. The union was granted leave to appeal to the Supreme Court of Canada.

[23]            Beetz J., writing for the Court, concluded that the legislator did not intend to make the application of section 45 subject to a determination by a labour commissioner. Rather, section 45 was intended to apply automatically in any case where there was a transaction that came within the quoted words, in which case the labour commissioner was required simply to recognize the fact that section 45 applied. A labour commissioner could, if called upon, resolve disputes arising from the application of section 45 but he could not, by deciding incorrectly that section 45 applied, grant rights or impose obligations on parties in circumstances not contemplated by section 45. Using today's terminology, the determination of the labour commissioner that section 45 applied was reviewed on the standard of correctness.


[24]            The authority of Bibeault on the narrow point involving section 45 of the Quebec Labour Code has been diminished by subsequent events. Decisions of the kind considered in Bibeault are now to be reviewed on the standard of patent unreasonableness: Ivanhoe Inc. v. United Food and Commercial Workers, Local 500, [2001] 2 S.C.R. 565. At the risk of oversimplifying a complex history, which is fully described in Ivanhoe, I will mention only two reasons for the change. First, the Quebec Labour Code was amended in 1990 specifically to authorize the labour commissioner to determine the applicability of section 45. Second, the labour commissioners had, since 1990, developed an extensive and specialized body of jurisprudence on the issue.

[25]            However, Bibeault remains authority for the broad proposition that the pragmatic and functional approach may lead to the conclusion that a tribunal is not empowered to adopt a statutory interpretation that is wrong in law. A recent example is found in Barrie Public Utilities v. Canadian Cable Television Assn., 2003 SCC 28. In that case the pragmatic and functional approach led Gonthier J., writing for the majority, to apply the standard of correctness to an issue of statutory interpretation.

[26]            However, merely characterizing an issue as legal or jurisdictional does not mean that the standard of review must be correctness (see Dr. Q., supra, at paragraph 25). This is explained as follows by Evans J.A. in Piedmont Airlines, Inc. v. United Steel Workers of America, Transportation Communications Amalgamated Local 1976, 2003 FCA 154, [2003] F.C.J. No. 479, at paragraphs 23 to 25 (most citations omitted):


[23]      In view of the pragmatic and functional approach that, for some time, courts in Canada have taken for determining the standard of review, this argument puts the conclusionary cart before the analytical horse. A question is not reviewable on a standard of correctness because, in some abstract sense, it is jurisdictional. As used in administrative law, the concept of jurisdiction has little, if any, value as an analytical tool for determining legislative intent with respect to the provisions in an agency's enabling statute that the agency must interpret correctly if its decision is to withstand judicial review. [...]

[24]      Whether or not a statutory provision in dispute is "jurisdictional", in the sense that the agency must interpret it correctly, is generally determined by the pragmatic and functional analysis that must be conducted to decide the appropriate standard of review. If that analysis leads to the conclusion that the reviewing court is at least as well placed as the agency to interpret the statutory provision in dispute, and that the agency's interpretation is therefore entitled to no deference, the provision may be labelled "jurisdictional".

[25]      Nonetheless, the "jurisdictional" nature of a question appears still to have some relevance to determining the standard of review. Thus, in Chieu v. Canada (Minister of Citizenship and Immigration) [2002 SCC 3, [2002] 1 S.C.R. 84], the Court said that the meaning of the words in a discretion-conferring provision in an agency's constating statute was a jurisdictional question, and that this was one of the considerations to be taken into account under the "nature of the question in dispute factor" in the pragmatic and functional analysis.

[27]            With that in mind, I turn to the pragmatic and functional analysis mentioned in Bibeault and more fully developed in Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982. The object of the analysis is to determine the degree to which Parliament intended the challenged decision to be subject to judicial scrutiny. I will consider the four factors from Pushpanathan in this order (1) the purpose of the legislation and the provisions in issue, (2) the nature of the problem, (3) the expertise of the tribunal relative to that of the reviewing court, and (4) the presence or absence of a private clause or statutory right of appeal.

(1) The purpose of the legislation and the provision in issue


[28]            The claimants and the Attorney General argue that the purpose of the Canada Labour Code is to protect the rights and interests of workers, employees, trade unions and the general public. In support of that proposition, they refer to the following excerpts from the preamble:

WHEREAS there is a long tradition in Canada of labour legislation and policy designed for the promotion of the common well-being through ... the constructive settlement of disputes;

Attendu_:

qu'il est depuis longtemps dans la tradition canadienne que la législation et la politique du travail soient conçues de façon à favoriser le bien-être de tous par l'encouragement ... du règlement positif des différends;

                         ...

                         ...

AND WHEREAS the Parliament of Canada desires to continue and extend its support to labour and management ... in ensuring a just share of the fruits of progress to all;

que le Parlement du Canada désire continuer et accentuer son appui aux efforts conjugués des travailleurs et du patronat ... en assurant à tous une juste part des fruits du progrès,

[29]            I do not disagree with the proposition asserted by the claimants and the Attorney General, but it seems to me that their reliance on the provisions quoted above is misplaced. The Canada Labour Code consists of three discrete parts. Part I deals with industrial relations. It establishes the Canada Industrial Relations Board as a tribunal with the authority to make a broad range decisions relating to collective bargaining. Part II deals with occupational health and safety. Part III (section 166 to section 267) deals with employment standards, including minimum standards for wages, vacations and holidays for employees. Only Part III is relevant to this case.


[30]            The preamble from which the quoted passages were taken appears in the Canada Labour Code after sections 1 and 2 (entitled "Short Title" and "Interpretation", respectively), and after the title "Part I". That indicates that the preamble is not intended to state the purpose of the entire Canada Labour Code, but only Part I. In other words, the preamble is an expression by Parliament of the value of collective bargaining and constructive dispute resolution in the context of industrial relations. That becomes more clear when the first and fourth preambles, from which the claimants and the Attorney General produced the excerpts quoted above, are read in their entirety (my emphasis):

WHEREAS there is a long tradition in Canada of labour legislation and policy designed for the promotion of the common well-being through the encouragement of free collective bargaining and the constructive settlement of disputes;

Attendu_:

qu'il est depuis longtemps dans la tradition canadienne que la législation et la politique du travail soient conçues de façon à favoriser le bien-être de tous par l'encouragement de la pratique des libres négociations collectives et du règlement positif des différends;

                         ...

                         ...

AND WHEREAS the Parliament of Canada desires to continue and extend its support to labour and management in their cooperative efforts to develop good relations and constructive collective bargaining practices, and deems the development of good industrial relations to be in the best interests of Canada in ensuring a just share of the fruits of progress to all;

que le Parlement du Canada désire continuer et accentuer son appui aux efforts conjugués des travailleurs et du patronat pour établir de bonnes relations et des méthodes de règlement positif des différends, et qu'il estime que l'établissement de bonnes relations du travail sert l'intérêt véritable du Canada en assurant à tous une juste part des fruits du progrès,


[31]            There is no preamble to Part III, so its object must be inferred from its content. A review of Part III as a whole indicates that it falls into the category of labour standards legislation. A useful statement of the purpose of such legislation appears in the Canadian Labour Law Reporter (CCH Canadian Limited) at ¶ 5105 (page 6205):

The terms and conditions of employment were once considered a private matter, properly left to the determination of the employee, employer and the marketplace. However, by the early 1900s, exploitation in the workplace resulting in widespread worker unrest prompted the passage of labour welfare legislation such as minimum wage laws.

Today, all jurisdictions in Canada, whether federal, provincial or territorial, have in place labour standards legislation providing not only for minimum wages but also for minimum age of employment, maximum hours of work, overtime pay rates, entitlement to annual paid vacation, statutory holidays, leaves of absence and protection on termination of employment.

Labour standards legislation is designed to do two things. First, it provides protection to the individual worker, and second, it creates certainty in the labour market by requiring basic employment practices. The legislation requires that all employers establish employment conditions that meet at least the minimum standards set out in the legislation.

[32]            This statement aptly describes the main purposes of Part III. A review of Part III also discloses another objective, which is to facilitate the efficient resolution of disputes arising from its provisions. That is done by providing tools to aid the settlement of disputes by agreement, and by providing recourse to designated officials.


[33]            A number of provisions are aimed at the objective of efficient dispute resolution. For example, a person designated as an "inspector" under section 249 may assist in the settlement of wrongful dismissal claims and make a report to the Minister if no settlement can be reached (section 241), investigate a complaint from an employee who claims not to have been paid wages or other amounts payable under the Canada Labour Code (section 251.1), or conduct an employee vote under section 172.1 (work schedules) or section 195(2) (substituted holidays). In the event of a termination of the employment of a large group of employees, an inspector may monitor and assist in the establishment of a joint planning committee, and observe its proceedings (section 222). An inspector who has reason to believe that an employer is engaged or has engaged in a discriminatory practice is empowered to make a discrimination complaint under the Canadian Human Rights Act (section 182).

[34]            Arbitrators, adjudicators and referees also have work to do under Part III of the Canada Labour Code. An arbitrator may assist a joint planning committee in the event of a group termination (section 224). An adjudicator may determine the merits of a wrongful dismissal complaint and order a remedy (section 242). Or, as happened in this case, a referee may deal with an appeal to the Minister of the decision of an inspector relating to a complaint of unpaid wages or other amounts payable under Part III (section 251.1).

[35]            In summary, the object of Part III of the Canada Labour Code is to protect individual workers and create certainty in the labour market by providing minimum labour standards and mechanisms for the efficient resolution of disputes arising from its provisions.

(2) The nature of the problem


[36]            The referee in this case was faced with the argument of Dynamex that the claimants were not employees of Dynamex. Unless the claimants were employees of Dynamex, they were not entitled to vacation pay or holiday pay under Part III of the Canada Labour Code, and they had no entitlement to any remedy the referee could grant. In that sense, the determination of the status of the claimants as employees was a question upon which the jurisdiction of the referee to grant a remedy under section 251.12 depended. It is, in the language of Bibeault, a "jurisdictional" question.

[37]            In the context of Part III of the Canada Labour Code, the determination of the status of the claimants as employees is a question with three aspects. The first aspect is whether the word "employee" in Part III of the Canada Labour Code bears its ordinary common law meaning or some special meaning arising from context of Part III. I characterize that as a question of statutory interpretation, a question of law analogous to the issue in Barrie Public Utilities, supra. As discussed in more detail below, the referee concluded that the word "employee" was to be given its ordinary common law meaning. As no one has challenged the decision of the referee on that point, I need not consider what standard of review ought to be applied.

[38]            The second and third aspects of the referee's decision are challenged. The second aspect is the identification of the principles to be applied in determining whether the claimants were employees of Dynamex, a question of law. The third aspect is the application of those principles to the facts of the case, a question of mixed fact and law.

(3) The expertise of the tribunal


[39]            The point of considering the expertise of the tribunal is to compare the expertise of the tribunal to the expertise of the Court in relation to the issue under appeal. The Canada Labour Code is silent as to the qualifications required of referees, except that a referee must a person that the Minister considers appropriate. It appears from C.U.P.E. v. Ontario (Minister of Labour), 2003 SCC 29, that the Minister has an obligation to ensure that referees have the requisite capacity, knowledge, experience and skill to perform his or her statutory obligations. I presume, there being no evidence to the contrary, that the Minister has fulfilled his obligations in that regard, and I also presume that referees generally have more expertise in matters of labour standards than this Court. That would suggest that they are owed deference in a decision as to the specific entitlement of an employee to a remedy under Part III of the Canada Labour Code, even if the decision involves a question of statutory interpretation of the referee's home legislation.

[40]            United Steelworkers of America, Local 14097 v. Franks (Div. Ct.) (1990), 75 O.R. (2d) 382 is an example of a situation where the courts will defer to a referee on a question of statutory interpretation. In that case, a referee appointed under the Employment Standards Act, R.S.O. 1980, c. 137, was dealing with a problem involving the interpretation of these provisions:

40a. (1a) Where

(a) fifty or more employees have their employment terminated by an employer in a period of six months or less and the terminations are caused by the permanent discontinuance of all or part of the business of the employer at an establishment ...

the employer shall pay severance pay to each employee whose employment has been terminated and who has been employed by the employer for five or more years

Subsection 40a(3) specified the categories of employees who were not entitled to severance pay. Among those not entitled were:

(f) an employee who is employed under an arrangement whereby the employee may elect to work or not when requested to do so.

The issue before the referee was whether a person who was not entitled to severance pay because of paragraph 40(a3)(f) should nevertheless be included in determining, for purposes of subsection 40a(1a), how many employees had their employment terminated. The Court found that the appropriate standard of review was reasonableness, and the decision was allowed to stand. This, in my view, is a classic case of a tribunal interpreting its home legislation.

[41]            By contrast, there is less reason to conclude that a referee is more expert than the Court in determining a broader question of law which is of a kind that can be expected to come before a court in other contexts. Many Canadian courts are called upon to identify the common law principles to be applied in determining whether a particular relationship is one of employment, and to apply those principles to specific facts. The reason for that is explained as follows by Robertson J.A.:


Commentators agree that the task of determining whether or not a particular working relationship constitutes "employment" is of central importance in Canadian law. This is because classification as an employee is a gateway to numerous statutory benefits, both federal and provincial, that remain unavailable to the independent contractor.

(paragraph 3, Joey's Delivery Service v. New Brunswick (Workplace Health, Safety and Compensation Commission), [2001] N.B.J. No. 222 (N.B.C.A.), leave to appeal dismissed, [2001] S.C.C.A. No. 425). See also 671122 Ontario Limited v. Sagaz Industries Canada Inc., [2001] 2 S.C.R. 983, per Major J., writing for the Court at paragraph 36.

[42]            For example, the determination of the status of persons as employees or independent contractors using the common law tests arises in ordinary court proceedings in the context of a claim for damages for wrongful dismissal or any number of other claims an employee might make against an employer. It arises in the ordinary courts in a tort claim against an employer for the acts of its employee (see, for example, Sagaz, supra). It also arises in appeals to the Tax Court of Canada under the Income Tax Act, R.S.C. 1985 (5th Supp.) c. 1, the Employment Insurance Act, or the Canada Pension Plan, or in disputes relating to the status of a taxpayer under an international tax convention (see, for example, Wolf v. Canada (C.A.), [2002] 4 F.C. 396). The jurisprudence of the Tax Court contains hundreds of cases where the status of a person as an employee or independent contractor is the central issue. Challenges to those decisions are determined in this Court upon an appeal or an application for judicial review, depending upon the procedure in the Tax Court for the particular question.


[43]            The expertise involved in deciding questions of employment status on common law principles is shared by many courts and tribunals. Referees appointed under section 251.12 of the Canada Labour Code can make no claim to special expertise in determining such questions.

(4) The presence or absence of a privative clause or statutory right of appeal

[44]            The decision of a referee under subsection 251.12(4) is not subject to appeal, and they are protected by two privative clauses in subsection 251.12(6) and (7) (quoted above). Generally, this would point to a high degree of deference.

Conclusion on standard of review

[45]            In my view, the determination of the referee as to the common law principles applicable to the determination of the status of a person as an employee should be reviewed on the standard of correctness. I reach that conclusion, despite the privative clauses, because it is a question of law of a kind that is normally considered by the courts, and is not a question that engages the special expertise of a referee. However, the manner in which those principles are applied to the facts, which is a question of mixed law and fact, should be reviewed on the standard of reasonableness. Thus, if the referee's reasons disclose no error of law, and the conclusion is reasonably supportable on the record after a somewhat probing examination, the decision will stand.

Review of the decision


[46]            The claimants argued before the referee that, in the context of Part III, the determination of their status as "employee" should not be limited to a consideration of the established common law principles. Specifically, the claimants argued that a person who meets the definition of "dependent contractor" in Part I of the Canada Labour Code, and is thus an "employee" for purposes of Part I, should be considered to be an "employee" for purposes of Part III as well.

[47]            As indicated above, this presented the referee with a problem of statutory interpretation, and he dealt with it as such. He referred first to paragraph (c) of the definition of "dependent contractor" in section 3 (in Part I), which reads as follows:

3. In this Part ...

3. Les définitions qui suivent s'appliquent à la présente partie. ...

"dependent contractor" means ...

« entrepreneur dépendant » Selon le cas : ...

(c) any other person who, whether or not employed under a contract of employment, performs work or services for another person on such terms and conditions that they are, in relation to that other person, in a position of economic dependence on, and under an obligation to perform duties for, that other person.

c) la personne qui exécute, qu'elle soit employée ou non en vertu d'un contrat de travail, un ouvrage ou des services pour le compte d'une autre personne selon des modalités telles qu'elle est placée sous la dépendance économique de cette dernière et dans l'obligation d'accomplir des tâches pour elle.

[48]            The referee then rejected the claimants' argument. His reason for doing so is stated as follows at page 24 of his decision:


If I were to adopt that position, that would be a conversation stopper since the Respondents in the present case [the claimants] clearly do fall within subsection (c) of that definition. However, I am of the view that Part III of the Canada Labour Code must stand on its own; it has a totally different purpose from that of Part I. It follows that a finding, made by the Canada Labour Relations Board on April 24th, 1998, to the effect that the Respondents are 'dependent contractors' is only of marginal help to me in deciding the present reference.

Economic dependence, in the absence of a statutory definition such as is cited above, does not, of itself, convert an independent contractor into an employee.

[49]            Thus, the referee concluded that a person is an employee for purposes of Part III only if he or she is an employee under common law principles. This aspect of the referee's decision has not been challenged, and in any event it seems to me to be correct. The referee went on to identify the applicable common law principles as those set out in Wiebe Door Services Ltd. v. M.N.R., [1986] 3 F.C. 553 (C.A.), Imperial Taxi Brandon (1983) Ltd. v. Hutchison (1987), 46 D.L.R. (4th) 310 (Man C.A.) and numerous other cases, and to apply them to the facts of the case. His findings of fact were not challenged. In my view, his analysis of the relevant common law principles discloses no error of law. Therefore, the only remaining issue is whether the referee's application of the principles to the facts was reasonable.


[50]            Dynamex argues that the referee was wrong and also patently unreasonable in the way he applied the principles to the facts of the case. I do not agree. The referee recognized that some facts favoured the conclusion that the claimants were employees, and some facts favoured the opposite conclusion. He concluded that, on balance, the claimants were employees. At that stage of the analysis, the referee was engaged in determining a question of mixed fact and law, and his decision should stand if it is reasonably supported by the evidence. In my view, it is reasonable and should not be disturbed.

[51]            I do not propose to comment on every point upon which Dynamex relied to support its submissions that the referee's decision should be quashed. I will, however, mention what seems to me that strongest challenge, which is based on the fact that the claimants were parties to contracts in which they were characterized as independent contractors, and that they had taken advantage of that status in income tax matters. The referee recognized that inconsistency in the claimants' positions, and dealt with it in the following terms (page 48 of his reasons):

I remain troubled by the fact that, in arriving at the conclusion (as I now do) that the Respondents were employees for the purposes of Part III of the Code, I am allowing them to 'run with the hare and hunt with the hounds', since they all freely admit that they were fully aware that their contracts designated them as independent contractors and that, indeed, they were quite content with that category since it meant fewer deductions at source from their paycheques. Nonetheless, I must base my decision on the facts as I find them and, in the cases now under review, the scales come down on the side of employment rather than entrepreneurship. The effect of my present ruling upon other payroll deduction questions is not within the mandate of this reference.


[52]            The referee recognized, correctly in my view, that in determining whether a person is an employee or an independent contractor, the terminology used in his or her contract is not determinative (see Sagaz, supra, at paragraph 49). Such a contractual term cannot prevail if the evidence of the actual relationship between the parties points to the opposite conclusion, as the referee found to be the situation in this case. The referee also recognized that a person whose employment status is ambiguous may well find it advantageous to take inconsistent positions in different proceedings. That is relevant but not by itself determinative of which of the two inconsistent positions is correct in fact and law.

[53]            Having concluded that there is no basis for interfering with the decision of the referee that the claimants were employees of Dynamex during the relevant periods, it remains only to mention one further argument made by Dynamex as to the quantification of its liability for vacation pay and holiday pay. Dynamex points out that the referee simply ordered the payment to the claimants of the amounts held in trust, without dealing with the argument of Dynamex the inspector had erroneously calculated those amounts based on 100% of the remuneration paid to the claimants. Dynamex argues that the amounts should have been reduced to reflect deductions from their remuneration for operating expenses. I fail to discern any legal or rational basis for this argument, and I see no point in returning these matters to the referee to reconsider it.


[54]            Although the reviewing judge did not apply the appropriate standard of review, he reached the correct conclusion when he dismissed the application for judicial review. I would dismiss this appeal with costs to all respondents except the Attorney General of Canada (for whom costs were not sought).

                                                                                                                                            (s) "K. Sharlow"          

J.A.

I agree

"Robert Décary" J.A.

I agree

"A.M. Linden" J.A.


                                                    FEDERAL COURT OF APPEAL

                              NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                    A-241-02

STYLE OF CAUSE: Dynamex Canada Inc. v. Adele Victoria Mamona, Randolph William Hepner, Robert Philip Cyr, Attorney General of Canada

PLACE OF HEARING:         Winnipeg, Manitoba

DATE OF HEARING:                       April 9, 2003

REASONS FOR JUDGMENT : Sharlow J.A.

CONCURRED IN BY:                          Décary J.A.

Linden J.A.

DATED:                                                 June 4, 2003

APPEARANCES:

Mr. Guy Dussaul                                                                                                   FOR THE APPELLANT

Québec, Québec

Mr. Mel Myers                                                                                                FOR THE RESPONDENTS

Winnipeg, Manitoba                                                                                            MAMONA & HEPPNER

Mr. Robert Philip Cyr                                                                                          ON HIS OWN BEHALF

Winnipeg, Manitoba

Mr. Sid Restall                                                                                                   FOR THE RESPONDENT

Winnipeg, Manitoba                                                                  ATTORNEY GENERAL OF CANADA


SOLICITORS OF RECORD:

Flynn, Rivard                                                                                                         FOR THE APPELLANT

Québec, Québec

Myers Weinberg                                                                                            FOR THE RESPONDENTS

Winnipeg, Manitoba                                                                                            MAMONA & HEPPNER

Mr. Robert Philip Cyr                                                                                          ON HIS OWN BEHALF

Winnipeg, Manitoba

Mr. Morris Rosenberg                                                                                      FOR THE RESPONDENT

Deputy Attorney General of Canada                                        ATTORNEY GENERAL OF CANADA


                                                                                                                                            Date: 20030604

                                                                                                                                        Docket: A-241-02

OTTAWA, ONTARIO, June 4, 2003

CORAM:        DÉCARY J.A.

LINDEN J.A.

SHARLOW J.A.

BETWEEN:

                                                          DYNAMEX CANADA INC.

                                                                                                                                                       Appellant

                                                                                                                                                     (Applicant)

                                                                                 and

                                                       ADELE VICTORIA MAMONA

                                                    RANDOLPH WILLIAM HEPNER

                                                              ROBERT PHILIP CYR

                                                ATTORNEY GENERAL OF CANADA

                                                                                                                                               Respondents

                                                                                                                                              (Respondents)

                                                                        JUDGMENT

The appeal is dismissed with costs to all respondents except the Attorney General of Canada, whom did not seek costs.

                                                                                                                                       (s) "Robert Décary"          

J.A.

 You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.