\In the Matter of a Complaint of Alleged Unjust dismissal and a Wage Recovery Appeal under Part III of the Canada labour Code
Darcy B. Coonfer, Complainant and Orca Airways Ltd., Respondent
Ib S. Petersen Adjud.
Judgment: February 4, 2014
Docket: YM2707-9489, YM2727-3316
Counsel: Andrew Naysmith, for Orca Airways Ltd.
Ib S. Petersen Adjud.:
1 By letter dated May 10, 2013, I was appointed by the Minister of Labour to hear and adjudicate the unjust dismissal complaint and the appeal of a Notice of Unfounded Complaint, dated December 27, 2012, filed by Coonfer under the Canada Labour Code, R.S.C. 1985, c. L-2 (the ”Code”).
2 This preliminary decision arises out of an application by Coonfer for production of Orca’s 2011 financial statements prior to the commencement of the hearing.
Issue
3 The issues before me are:
- whether I have the power to order pre-hearing production of documents; and, if I do,
- whether I should order the 2011 financial statement produced.
Background
4 From the Complaint Registration form in the wage recovery appeal, it appears that Coonfer was employed with Orca Airways Ltd. (”Orca”) between January 2010 and early February 2012. Orca initially employed Coonfer as Chief Pilot. From July 15, 2011, his job title was Operations manager. Coonfer alleged that Orca failed to pay wages, a percentage of the profit for 2011. On January 16, 2012, he wrote a resignation letter to Orca, to be effective 21 days later. Orca says that Coonfer resigned. Coonfer says he was constructively dismissed and filed an unjust dismissal complaint with Labour Canada seeking severance.
5 A Labour Canada inspector conducted an investigation into the wage claim and issued, as mentioned, a Notice of Unfounded Complaint, dated December 27, 2012. In the Notice, she noted that she had been unable to resolve the dispute regarding the terms and conditions of employment “and the veracity of the documents purporting to be copies of the employment contacts.” She also noted that she was unable to determine the quantum of the bonus alleged to be payable because Orca “refused to provide a copy or details of the company’s financial statements for 2011.”
6 The parties disagree on material facts, and it appears that there is some animosity between the parties. I emphasize that I make no finding of facts on the merits of the wage recovery appeal and unjust dismissal complaint before me.
Submissions
7 Coonfer applies for production of Orca’s 2011 financial statements. He says that he is entitled to a base salary and 4% of the profit under his contract of employment. Since his compensation is based on a percentage of the profit, it follows that he is entitled to the 2011 financial statements. He notes, as well, that the 2010 financial statements were disclosed to him.
8 Naysmith responds that Coonfer now works for a competitor and that his new employer, therefore, will “inherently” have access to the “financial workings” of Orca. He also submits that Orca have used monthly “internal” financial statements in the past, and that it was never intended that the year end audited financial statements be used for the determination of profit sharing.
9 In reply, Coonfer denies that he works for a competitor. He also says that the monthly “internal” financial statements were not used by Orca when he worked there. He reiterates that the contract entitlement of 4% of the “total annual profits of Orca Airways Ltd.” cannot be determined without the financial statements.
Analysis and Decision
10 As noted above, there are two matters before me: a wage recovery appeal and an unjust dismissal complaint.
11 As an unjust dismissal adjudicator under Section 242(2) of the Code, I have the following powers:
(2) An adjudicator to whom a complaint has been referred under subsection (1)
. . .
(b) shall determine the procedure to be followed, but shall give full opportunity to the parties to the complaint to present evidence and make submissions to the adjudicator and shall consider the information relating to the complaint; and
(c) has, in relation to any complaint before the adjudicator, the powers conferred on the Canada Industrial Relations Board, in relation to any proceeding before the Board, under paragraphs 16(a), (b) and (c).
12 Section 16 (a), (b) and (c) of the Code provides:
- The Board has, in relation to any proceeding before it, power
(a) to 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 Board deems requisite to the full investigation and consideration of any matter within its jurisdiction that is before the Board in the proceeding;
(b) to administer oaths and solemn affirmations;
(c] to receive and accept such evidence and information on oath, affidavit or otherwise as the Board in its discretion sees fit, whether admissible in a court of law or not;
13 Section 251.12(2) of the Code sets out the powers of a wage recovery referee. For the present purposes, those powers are similar to those that may be exercised by an unjust dismissal adjudicator.
14 In Employment Law in Canada (Barnacle et al., Ontario: LexisNexis, 4th ed., 2005 – (loose leaf)), the learned authors note that the power of unjust dismissal adjudicators to order pre-hearing production of documents has been a controversial issue.
15 In Iny-Somberg v. Laurentian Bank of Canada [[1999] C.L.A.D. No. 526 (Can. Arb.)] (October 6, 1999, unreported], the complainant applied, among others, for pre-hearing production the documents upon which the employer intended to rely on at the hearing. Adjudicator Dumoulin granted the application for production of “reliance documents.” The learned adjudicator noted:
14 For a Complainant who has been dismissed, her rights to procedural fairness and to a fair hearing encompass the right to prepare and present a full defense to the grounds invoked by the Employer for her dismissal. For a Complainant, whose career and very future are at stake, her right to prepare a full defense entails, in my view, the right to have sufficient time in advance of the hearing to examine and consider the documentary evidence upon which the Employer intends to rely at the hearing. This is especially true in the case of a Complainant who cannot afford legal representation. For any Complainant, sufficient time in advance of the hearing to examine the documentary evidence which the Employer intends to produce would avoid any unfair surprises at the hearing and would alleviate the necessity for an adjournment which might otherwise be required to review documents introduced for the first time at the hearing. More significantly, such prehearing production would avoid adjournments that arise from the need to call unanticipated witnesses or documentary evidence in response to documents produced for the first time at the hearing.
15 It is not sufficient to simply say that an adjournment will protect the Complainant’s – or for that matter, the Employer’s right to a fair hearing. Adjournments to allow the examination of documents never before seen or the calling of additional unanticipated evidence most often result in an extra half-day, full day or days of hearings. The adjudication process is then stretched out months longer in the effort to find additional common dates. This costs the parties extra and unnecessary time and money in the form of legal fees, time away from work, other related expenses such as transportation or travel, as well as increased potential liability for the Employer and an increased period of possible unemployment for the Complainant. The principles of procedural fairness and audi alteram partem are not being respected where unnecessary surprises and delays take place at the hearing when they could have easily been avoided beforehand by the production and exchange of documents in advance of the hearing. The conducting of hearings by quasi-judicial tribunals, which originated as a supposedly more expeditious process than a lawsuit, has become, in too many instances, a very long, drawn-out and prohibitively expensive process. It is a process in which the financially weaker party is, in all probability, tempted to make more concessions in order to limit the damage caused by unnecessary delay. This is not procedural fairness.
16 An order for the production of documents upon which the parties intend to rely at a hearing does not, on its face, cause any unfair prejudice.
17 In summary, under sub-section 242 (1) [sic] of the Canada Labour Code, an adjudicator has, in the discharge of his function to “hear and adjudicate on the complaint”, the power and the authority to ensure during the pre-hearing process that the principles of procedural fairness and audi alteram partem are preserved. The adjudicator may order the production of documents in advance of the hearing as part of the exercise of this power and authority.
16 A few adjudicators have followed this approach. In OChiese First Nation and Strawberry, Re [2002 CarswellNat 6216 (Can.Adjud.(CLC Part III))]) (January 30, 2002, unreported (McFetridge)), the adjudicator concluded that section 242(2)(b) allows for the procedure to be determined and as a condition of that procedure, an adjudicator must ensure that the parties have the full opportunity to give evidence and to make submission. In his opinion, procedural fairness includes the power to grant pre-hearing disclosure. In Gagne v. Canadian Imperial Bank of Commerce [(2001), 11 C.C.E.L. (3d) 251 (Can.Adjud.(CLC Part III))], the adjudicator adopted a similar approach.
17 However, most adjudicators have declined pre-hearing production of documents (see also Barnacle et al., para. 17.193). It does not appear from my review of the case law that the approach in Iny-Somberg has had much traction among adjudicators. In Bisceglia v. Greater Toronto Airports Authority [[2001] C.L.A.D. No. 235 (Can.Adjud.(CLC Part III))], (May 16, 2001, unreported, (Gorsky), the adjudicator lamented the lack of the jurisdiction to make an order for pre-hearing production of documents:
- Although I have arrived at such a conclusion, I am of the view that the present state of the law is unsatisfactory and represents a potential hindrance to a fair adjudication of the issues between parties. The existence of jurisdiction to order either of the two forms of pre-hearing discovery sought, that exist in other administrative forums, has served the salutary purpose of enabling parties to come to a hearing with the necessary knowledge to enable them to present their positions in the best way possible, can assist in resolving certain factual issues, and may provide basis for pursuing settlement discussions.
I agree with Arbitrator Gorsky’s comments.
18 First, sub-section 242(2)(b), which authorizes the adjudicator to
”…determine the procedure to be followed…,” has generally been interpreted as applying exclusively to what happens during the adjudication hearing itself, not beforehand (Barnacle et al., para. 17.193). In Canadian Pacific Air Lines Ltd. v. C.A.L.P.A., [1993] S.C.J. No. 114, [1993] 3 S.C.R. 724 (S.C.C.), the Supreme Court of Canada concluded that section 118(a) [now section 16(a)] (at p. 735-7):
The power at issue is limited by the words of s. 118(a). They do not provide for a power to compel the production of documents, per se; this power does not stand alone. Rather, the section empowers the Board to require that certain persons attend and to compel them to give evidence, whether it be oral or written, and to produce documents or other things which the Board deems requisite in the circumstances. Those activities are not expressed to be in the alternative, but are outlined as part of one single process. The process is initiated by the summoning and enforced attendance of witnesses, and it is in relation to those persons — witnesses summoned — that the power of the Board to compel the production of documents is conferred. This power must of necessity be exercised with regard to specific individuals, as it is attached to the summoning and testifying of witnesses. The section also requires that those persons give their evidence on oath. The reference to persons summoned to give oral and written evidence on oath is part of the limits on the exercise of the power.
This empowering provision is distinct from all but one other provision in s. 118…. Together with the other paragraphs of s. 118, para. (f) does allow the Board to examine a wide variety of sources for the purposes of fulfilling its duties, but does not expand the scope of the power provided for in s. 118(a). The structure of the provision limits the exercise of the power of compulsion to the context of a formal hearing.
19 Second, section 16(f.1) provides specifically that the Canada Industrial Relations Board, but not an unjust dismissal adjudicator, has the power to order pre-hearing production of documents:
(f.1) to compel, at any stage of a proceeding, any person to provide information or produce the documents and things that may be relevant to a matter before it, after providing the parties the opportunity to make representations;
20 Moreover, Barnacle et al. notes that this power was expressly legislated in order to reverse a Supreme Court of Canada ruling in Canadian Pacific Air Lines Ltd. Accordingly, “adjudicators have applied the exclusio iunius rule of construction and have concluded that they do not have the jurisdiction to order pre-hearing disclosure of evidence”. The learned authors also note, correctly, in my view, that this represents unsound policy and practice (Barnacle et al., para. 17.193).
21 All the same, as a statutory decision-maker I only have the powers Parliament has seen fit to grant me. In my view, therefore, I do not, regrettably, have the power to grant pre-hearing production of documents. Coonfer’s application for pre-hearing production of Orca’s 2011 financial statements must therefore be denied.
22 However, once a hearing has commenced, an adjudicator can order the production of documents. In determining whether or not to make an order to produce documents, the following principles apply (Barnacle et al., para. 17.193):
- Requests for production are not automatic and must be assessed in each case.
- The information requested must be arguably relevant to the issue to be decided.
- The request must be sufficiently particularized so that the person on whom it is served can readily determine the nature of the request, the documents sought, the relevant time-frame and the content.
- The production must not be in the nature of a fishing expedition; that is, the production must assist the complainant in uncovering something to support its existing case.
- The applicant must demonstrate a probative nexus between its position in the dispute and the material being requested.
- The prejudicial aspect of introducing the evidence must not outweigh the probative value of the evidence itself, regardless of any possible “confidential” aspect of the document.
23 Section 166 defines “wages” broadly for the purposes of Part III of the Code as follows:
”wages” includes every form of remuneration for work performed but does not include tips and other gratuities;”
24 There does not appear to be any dispute between the parties as to the entitlement to a percentage of the profit. The employment contract refers to 4% of the “total annual profits” of Orca, whatever that means. In my view, therefore, the 2011 financial statement is relevant with respect to the determination of “wages” under the Code. Based on the submissions before me, but for my lack of jurisdiction, I would have ordered the financial statements produced. Coonfer may make an application once the hearing has commenced.
25 I appreciate Orca’s concern with respect to confidentiality and use of the financial statements. Any production order can be subject to conditions, for example, that they may be used in these proceedings only and that any copy produced be returned to Orca at the completion of these proceedings and any appeal.
26 An unjust dismissal adjudicator has the authority to award legal costs in certain circumstances (see Banca Nazionale del Lavoro of Canada Ltd. v. Lee-Shanok (1988), 87 N.R. 178 (Fed. C.A.); Bank of Nova Scotia v. Fraser, [2001] F.C.J. No. 1404, 12 C.C.E.L. (3d) 1 (Fed. C.A.)). As well, the Code expressly provides that a wage recovery referee has the power to award costs in the proceedings (section 251.12(4)(a)).
27 Regardless of my conclusion on the law, that I lack jurisdiction to compel the production of the financial statements, it is nevertheless my preference that the parties voluntarily exchange relevant documents prior to the hearing, including documents upon which they intend to rely in the hearing. It is important to remember that the disclosure cuts both ways. As indicated by the adjudicator in Iny-Somberg, there are considerable advantages to both parties, not just basic fairness, which is important, but also efficiency in the hearing process, and allowing the parties to prepare properly for the hearing.
28 As I am without jurisdiction to order pre-hearing production of documents, I am of the view that the most fair and practical manner to ensure a fair and efficient hearing, is to convene the hearing in this matter for one half day in the near future.
Decision
I make the following orders:
- Coonfer’s application for pre-hearing production of Orca’s 2011 financial statements is denied.
- The parties are directed to contact my office to set dates to convene the hearing.