CANADIAN CASES ON EMPLOYMENT LAW Third Series/Troisi`eme s´erie Recueil de jurisprudence canadienne en droit du travail

VOLUME 88 (Cited 88 C.C.E.L. (3d))

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CARSWELL, A DIVISION OF THOMSON REUTERS CANADA LIMITED One Corporate Plaza Customer Relations 2075 Kennedy Road Toronto 1-416-609-3800 Toronto, Ontario Elsewhere in Canada/U.S. 1-800-387-5164 M1T 3V4 Fax 1-416-298-5082 www.carswell.com E-mail www.carswell.com/email CARSWELL EDITORIAL STAFF/REDACTION´ DE CARSWELL Jeffrey D. Mitchell, B.A., M.A. Director, Editorial Production and Manufacturing / Directeur, service d’´edition et de production Catherine Bennett, B.A., LL.B., LL.M. Product Development Manager Julia Fischer, B.A.(HON.), LL.B. Sharon Yale, LL.B., M.A. Acting Supervisor, Legal Writing Supervisor, Legal Writing Mike MacInnes, B.A.(HON.), LL.B. Lisa Rao, B.SC., LL.B. Lead Legal Writer Senior Legal Writer Jocelyn Cleary, B.A.(HON.), LL.B. Stephanie Hanna, B.A., M.A., LL.B. Legal Writer Legal Writer Chauncey Glass, B.A., LL.B. Martin-Fran¸cois Parent, LL.B., Legal Writer LL.M., DEA (PARIS II) Bilingual Legal Writer Melissa Dubien Content Editor Ault v. Canada (Attorney General) 161

[Indexed as: Ault v. Canada (Attorney General)] Margaret Ault, Robert Collier, Robert C. Temple, Rod Shepherd, Richard Findlay, David Luck, Lucie Nobert, Marie-France Dufour, Bryan Armstrong (Plaintiffs / Respondents) and Attorney General of Canada (Defendant / Appellant / Respondent by way of cross appeal) and Sylvain Parent, Welton Parent Inc., Loba Limited and Raymond Jemus (Third Parties / Respondents / Appellants by way of cross- appeal) David Luck (Plaintiff / Appellant / Respondent by way of cross- appeal) and Attorney General of Canada (Defendant / Respondent / Appellant by way of cross-appeal) Ontario Court of Appeal Dennis O’Connor A.C.J.O., J.C. MacPherson, E.A. Cronk JJ.A. Heard: January 25-26, 2011 Judgment: February 28, 2011 Docket: CA C49464, C49446, 2011 ONCA 147 William McDowell, Monique Jilesen, Elizabeth Richards, Emily Graham for At- torney General of Canada Dougald Brown for Respondents in C49464, Appellant in C49446 Howard Yegendorf, Marcia Green, Stephanie Lewis for Third Party Respondents Torts –––– Fraud and misrepresentation — Negligent misrepresentation (Hedley Byrne principle) — Nature and extent of duty of care — General principles –––– Third parties W Inc. and P recruited people to resign from their employment with public service, join L Ltd., and transfer their pension monies to L Ltd.’s pension plan — Public servants, including eight plaintiffs, joined L Ltd. to gain this tax-deferred pension transfer under reciprocal transfer agreement (RTA) — Crown became suspicious as to legitimacy of arrangement — After plaintiffs commenced employment with L Ltd., they learned that transfers to pension plan had been suspended and that RCMP and CRA were investigat- ing — Pension plan was revoked, and plaintiffs’ pension monies were not transferred — At trial, judge awarded damages for negligent misrepresentation to seven of eight plain- tiffs, but not to L — L appealed trial decision — Crown also brought appeal, claiming that trial judge erred in finding that it owed plaintiffs duty of care, among other relief — L’s appeal dismissed — Crown’s appeal allowed in part — Crown had duty of care to provide information to plaintiffs about known significant risk associated with category of such RTAs — Crown was not only employer of plaintiffs, but also administrator of pen- sion plan of which all plaintiffs were members as federal government employees — It was plaintiffs’ status as employees in federal public service that grounded crown’s duty of care. 162 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

Torts –––– Fraud and misrepresentation — Negligent misrepresentation (Hedley Byrne principle) — Detrimental reliance –––– Third party L Ltd. hired public servants, including plaintiffs who resigned to gain tax-deferred pension transfer to L Ltd.’s pension plan under reciprocal transfer agreement with Crown — Crown became suspicious as to legitimacy of arrangement, particularly as to whether public servants became L Ltd.’s employees — Crown did not disclose suspicions or RCMP investigation to third parties or to plaintiffs considering resignation — Plaintiffs resigned to join L Ltd. — Crown sus- pended pension transfers, laid fraud charges against third parties, and de-registered L Ltd.’s pension plan — At trial, judge awarded damages for negligent misrepresentation to seven of eight plaintiffs, but not to L — L appealed trial decision — Crown also brought appeal, claiming that trial judge erred in finding that it made misrepresentations that were relied on by plaintiffs, among other relief — L’s appeal dismissed — Crown’s appeal al- lowed in part — Crown did make negligent misrepresentations that were relied on by plaintiffs — There was nothing in trial judge’s reasoning or in rest of analysis on misrep- resentation and reliance issues that could have fairly attracted label of “palpable and overriding error” — Plaintiffs clearly relied on advice of professional people in govern- ment whom they trusted, and their reliance was entirely reasonable. Torts –––– Negligence — Causation — Foreseeability and remoteness –––– Third par- ties W Inc. and P recruited people to resign from their employment with public service, join L Ltd., and transfer their pension monies to L Ltd.’s pension plan — Public servants, including eight plaintiffs, joined L Ltd. to gain this tax-deferred pension transfer under reciprocal transfer agreement — Crown became suspicious as to legitimacy of arrange- ment — After plaintiffs commenced employment with L Ltd., they learned that transfers to pension plan had been suspended, and that RCMP and CRA were investigating — Pension plan was revoked, and plaintiffs’ pension monies were not transferred — At trial, judge awarded damages for negligent misrepresentation to seven of eight plaintiffs, but not to L — L appealed trial decision — Crown also brought appeal, claiming that trial judge erred in finding that its negligent misrepresentations caused damages, among other relief — L’s appeal dismissed — Crown’s appeal allowed in part — Crown did cause plaintiff’s damages — But for crown’s negligent misrepresentations, plaintiffs would not have incurred damages awarded — Losses that gave rise to damage awards were reasona- bly foreseeable to crown — Trial judge found reliance and had ample evidence to support her finding — Fact that P also made misrepresentations to plaintiffs did not negate crown’s liability. Torts –––– Negligence — Contributory negligence — Apportionment of liability — Miscellaneous –––– Third party L Ltd. hired public servants, including plaintiffs who re- signed to gain tax-deferred pension transfer to L Ltd.’s pension plan under reciprocal transfer agreement with Crown — Crown became suspicious as to legitimacy of arrange- ment, particularly as to whether public servants became L Ltd.’s employees — Crown did not disclose suspicions or RCMP investigation to third parties or to plaintiffs consid- ering resignation — Plaintiffs resigned to join L Ltd. — Crown suspended pension trans- fers, laid fraud charges against third parties, and de-registered L Ltd.’s pension plan — At trial, judge awarded damages for negligent misrepresentation to seven of eight plain- tiffs, but not to L — L appealed trial decision — Crown also brought appeal, claiming, among other relief, that apportionment of liability was incorrect — L’s appeal dis- Ault v. Canada (Attorney General) 163 missed — Crown’s appeal allowed in part — Trial judge’s apportionment of liability could not stand — Re-apportionment of liability resulted in assignment of 60 per cent fault to crown and 40 per cent fault to third parties — There was almost exact quantita- tive parity in acts of crown and third parties — Trial judge’s findings of fact compelled conclusion that third parties’ fiduciary duties arose before plaintiffs joined L Ltd.’s pen- sion plan — Trial judge’s errors led to flawed assessment of third parties’ blameworthy conduct and, in turn, to inappropriate reduction in their degree of fault. Pensions –––– Administration of pension plans — Administrators, trustees and cus- todians — Fiduciary duties — Liabilities for breach –––– Third parties W Inc. and P recruited people to resign from their employment with public service, join L Ltd., and transfer their pension monies to L Ltd.’s pension plan — Public servants, including eight plaintiffs, joined L Ltd. to gain this tax-deferred pension transfer under reciprocal transfer agreement — Crown became suspicious as to legitimacy of arrangement — After plain- tiffs commenced employment with L Ltd., they learned that transfers to pension plan had been suspended, and that RCMP and CRA were investigating — Pension plan was re- voked and plaintiffs’ pension monies were not transferred — At trial, judge awarded damages for negligent misrepresentation to seven of eight plaintiffs, but not to L — L appealed trial decision — Crown also brought appeal, claiming, among other relief, that third parties had fiduciary duties towards plaintiffs — L’s appeal dismissed — Crown’s appeal allowed in part — Prior to plaintiffs joining L Ltd.’s pension plan, relationship between plaintiffs and third parties fell within rubric of fiduciary obligation — Third par- ties breached their fiduciary duties to plaintiffs — Plaintiffs sought advice from W Inc. and P, in their capacities as consulting actuaries, before resigning from public service — P’s knowledge of circumstances under which their advice was sought, coupled with his and W Inc.’s inherent duties of loyalty as professional actuaries, created at least implied undertaking that they would act in plaintiffs’ best interests — Third parties failed to dis- close information to plaintiffs that was material to their decisions whether to resign and transfer pension monies. Civil practice and procedure –––– Costs — Appeals as to costs — General princi- ples –––– Third parties W Inc. and P recruited people to resign from their employment with public service, join L Ltd., and transfer their pension monies to L Ltd.’s pension plan — Public servants, including eight plaintiffs, joined L Ltd. to gain this tax-deferred pension transfer under reciprocal transfer agreement — Crown became suspicious as to legitimacy of arrangement — After plaintiffs commenced employment with L Ltd., they learned that transfers to pension plan had been suspended and that RCMP and CRA were investigating — Pension plan was revoked and plaintiffs’ pension monies were not trans- ferred — At trial, judge awarded damages for negligent misrepresentation to seven of eight plaintiffs, but not to L — L appealed trial decision — Crown also brought appeal, claiming costs of trial decision, among other relief — L’s appeal dismissed — Crown’s appeal allowed in part — There was no basis for interfering with trial judge’s costs dispo- sition — Trial judge’s discretionary costs award in third party actions was not plainly wrong — Crown’s allegations of fraud were not found at trial — There was no error in trial judge’s consideration of factors bearing on role of crown in conduct of litigation. 164 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

Torts –––– Fraud and misrepresentation — Remedies — Damages — Assessment of damages — Negligent misrepresentation –––– Third party L Ltd. hired public servants, including plaintiffs who resigned to gain tax-deferred pension transfer to L Ltd.’s pension plan under reciprocal transfer agreement with Crown — Crown became suspicious as to legitimacy of arrangement, particularly as to whether public servants became L Ltd.’s employees — Crown did not disclose suspicions or RCMP investigation to third parties or to plaintiffs considering resignation — Plaintiffs resigned to join L Ltd. — Crown sus- pended pension transfers, laid fraud charges against third parties, and de-registered L Ltd.’s pension plan — At trial, judge awarded damages for negligent misrepresentation to seven of eight plaintiffs, but not to L — Both crown and L appealed trial decision — Crown’s appeal allowed in part — L’s appeal dismissed — There was no reason why award of damages in L’s favour should not take into account any pension gain he realized as result of his early resignation — L’s salary loss claim was so factually connected to anticipated pension gain, that it was entirely appropriate for trial judge to decline to award damages without evidence relating to potential pension gain. Cases considered: B. (K.L.) v. British Columbia (2003), 2003 CarswellBC 2405, 2003 CarswellBC 2406, 2003 SCC 51, 309 N.R. 306, [2003] 2 S.C.R. 403, 18 B.C.L.R. (4th) 1, 44 R.F.L. (5th) 245, 187 B.C.A.C. 42, 307 W.A.C. 42, 38 C.P.C. (5th) 199, [2003] R.R.A. 1065, 230 D.L.R. (4th) 513, [2003] 11 W.W.R. 203, 19 C.C.L.T. (3d) 66, 2004 C.L.L.C. 210-014, REJB 2003-48042, (sub nom. K.L.B. v. British Columbia) [2003] S.C.J. No. 51 (S.C.C.) — considered Gauthier v. Canada (Attorney General) (2000), 2000 CarswellNB 128, 225 N.B.R. (2d) 211, 578 A.P.R. 211, 185 D.L.R. (4th) 660, 23 C.C.P.B. 275, [2000] N.B.J. No. 143 (N.B. C.A.) — followed Hamilton v. Open Window Bakery Ltd. (2003), 2004 SCC 9, 316 N.R. 265, 235 D.L.R. (4th) 193, 2003 CarswellOnt 5591, 2003 CarswellOnt 5592, 2004 C.L.L.C. 210-025, 184 O.A.C. 209, [2004] 1 S.C.R. 303, 70 O.R. (3d) 255 (note), 40 B.L.R. (3d) 1, [2003] S.C.J. No. 72, REJB 2004-54076 (S.C.C.) — followed Hanke v. Resurfice Corp. (2007), 69 Alta. L.R. (4th) 1, 404 A.R. 333, 394 W.A.C. 333, 2007 CarswellAlta 130, 2007 CarswellAlta 131, 2007 SCC 7, [2007] 4 W.W.R. 1, 45 C.C.L.T. (3d) 1, 278 D.L.R. (4th) 643, [2007] R.R.A. 1, 357 N.R. 175, [2007] 1 S.C.R. 333, [2007] S.C.J. No. 7 (S.C.C.) — followed Hembruff v. Ontario (Municipal Employees Retirement Board) (2005), 260 D.L.R. (4th) 161, 203 O.A.C. 234, 78 O.R. (3d) 561, 2005 C.E.B. & P.G.R. 8170, 48 C.C.P.B. 214, 2005 CarswellOnt 5646, [2005] O.J. No. 4667 (Ont. C.A.) — considered Hembruff v. Ontario (Municipal Employees Retirement Board) (2006), 2006 CarswellOnt 2359, 2006 CarswellOnt 2360, 223 O.A.C. 396 (note), 354 N.R. 399 (note), [2006] S.C.C.A. No. 3 (S.C.C.) — referred to Hodgkinson v. Simms (1994), 57 C.P.R. (3d) 1, 5 E.T.R. (2d) 1, [1994] 3 S.C.R. 377, 95 D.T.C. 5135, 97 B.C.L.R. (2d) 1, 117 D.L.R. (4th) 161, 171 N.R. 245, 1994 Car- swellBC 438, 1994 CarswellBC 1245, [1994] 9 W.W.R. 609, 49 B.C.A.C. 1, 80 W.A.C. 1, 22 C.C.L.T. (2d) 1, 16 B.L.R. (2d) 1, 6 C.C.L.S. 1, [1994] S.C.J. No. 84, EYB 1994-67089 (S.C.C.) — followed Ault v. Canada (Attorney General) 165

Ingles v. Tutkaluk Construction Ltd. (2000), 183 D.L.R. (4th) 193, 2000 CarswellOnt 447, 2000 CarswellOnt 448, 2000 SCC 12, 251 N.R. 63, 46 O.R. (3d) 736 (headnote only), 8 M.P.L.R. (3d) 1, 49 C.C.L.T. (2d) 1, 1 C.L.R. (3d) 1, 130 O.A.C. 201, [2000] 1 S.C.R. 298, [2000] S.C.J. No. 13 (S.C.C.) — followed International Corona Resources Ltd. v. LAC Minerals Ltd. (1989), 44 B.L.R. 1, 35 E.T.R. 1, (sub nom. LAC Minerals Ltd. v. International Corona Resources Ltd.) 69 O.R. (2d) 287, (sub nom. LAC Minerals Ltd. v. International Corona Resources Ltd.) 61 D.L.R. (4th) 14, 101 N.R. 239, 36 O.A.C. 57, (sub nom. LAC Minerals Ltd. v. International Corona Resources Ltd.) [1989] 2 S.C.R. 574, 6 R.P.R. (2d) 1, (sub nom. LAC Minerals Ltd. v. International Corona Resources Ltd.) 26 C.P.R. (3d) 97, 1989 CarswellOnt 126, 1989 CarswellOnt 965, [1989] S.C.J. No. 83, EYB 1989- 67469 (S.C.C.) — considered Kerr v. Danier Leather Inc. (2005), 205 O.A.C. 313, 2005 CarswellOnt 7296, 261 D.L.R. (4th) 400, 11 B.L.R. (4th) 1, 77 O.R. (3d) 321, [2005] O.J. No. 5388 (Ont. C.A.) — considered Kerr v. Danier Leather Inc. (2007), 2007 SCC 44, 2007 CarswellOnt 6445, 2007 Cars- wellOnt 6446, 87 O.R. (3d) 398 (note), 36 B.L.R. (4th) 95, 231 O.A.C. 348, 286 D.L.R. (4th) 601, [2007] S.C.J. No. 44, [2007] 2 S.C.R. 331, 48 C.P.C. (6th) 205, 368 N.R. 204 (S.C.C.) — referred to Lloyd’s Bank v. Bundy (1974), [1975] Q.B. 326, [1974] 3 All E.R. 757, [1974] 2 Lloyd’s Rep. 366, [1974] 3 W.L.R. 501, 118 Sol. Jo. 714 (Eng. C.A.) — followed Martin v. Listowel Memorial Hospital (2000), 2000 CarswellOnt 3839, 138 O.A.C. 77, 192 D.L.R. (4th) 250, 48 C.P.C. (4th) 195, 51 O.R. (3d) 384, [2000] O.J. No. 4015 (Ont. C.A.) — followed NBD Bank, Canada v. Dofasco Inc. (1999), 1999 CarswellOnt 4077, 1 B.L.R. (3d) 1, 181 D.L.R. (4th) 37, 46 O.R. (3d) 514, 47 C.C.L.T. (2d) 213, 127 O.A.C. 338, 15 C.B.R. (4th) 67, [1999] O.J. No. 4749 (Ont. C.A.) — considered NBD Bank, Canada v. Dofasco Inc. (2000), 2000 CarswellOnt 1164, 2000 CarswellOnt 1165, 135 O.A.C. 195, 254 N.R. 400 (note), [2000] S.C.C.A. No. 96 (S.C.C.) — referred to Norberg v. Wynrib (1992), [1992] 4 W.W.R. 577, [1992] 2 S.C.R. 226, 92 D.L.R. (4th) 449, 12 C.C.L.T. (2d) 1, 9 B.C.A.C. 1, 19 W.A.C. 1, 138 N.R. 81, 68 B.C.L.R. (2d) 29, 1992 CarswellBC 907, 1992 CarswellBC 155, [1992] R.R.A. 668, [1992] S.C.J. No. 60, EYB 1992-67036 (S.C.C.) — considered Perez v. Galambos (2009), 97 B.C.L.R. (4th) 1, [2009] 12 W.W.R. 193, (sub nom. Galambos v. Perez) [2009] 3 S.C.R. 247, 394 N.R. 209, 70 C.C.L.T. (3d) 167, 312 D.L.R. (4th) 220, 276 B.C.A.C. 272, 468 W.A.C. 272, 2009 CarswellBC 2787, 2009 CarswellBC 2788, 2009 SCC 48, [2009] S.C.J. No. 48 (S.C.C.) — followed Queen v. Cognos Inc. (1993), 1993 CarswellOnt 801, 1993 CarswellOnt 972, 45 C.C.E.L. 153, 93 C.L.L.C. 14,019, 99 D.L.R. (4th) 626, 60 O.A.C. 1, 14 C.C.L.T. (2d) 113, [1993] 1 S.C.R. 87, 147 N.R. 169, EYB 1993-67486, [1993] S.C.J. No. 3 (S.C.C.) — followed Rainbow Industrial Caterers Ltd. v. Canadian National Railway (1991), 8 C.C.L.T. (2d) 225, 59 B.C.L.R. (2d) 129, [1991] 6 W.W.R. 385, 84 D.L.R. (4th) 291, 126 N.R. 354, 3 B.C.A.C. 1, 7 W.A.C. 1, [1991] 3 S.C.R. 3, 1991 CarswellBC 921, 1991 Car- 166 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

swellBC 214, 1991 SCC 27, [1991] R.R.A. 850, EYB 1991-67052, [1991] S.C.J. No. 67 (S.C.C.) — considered Statutes considered: Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) Generally — referred to

APPEAL by Crown from decision reported at Ault v. Canada (Attorney General) (2008), 80 C.C.P.B. 1, 2008 CarswellOnt 9415 (Ont. S.C.J.); APPEAL by plaintiff L from deci- sion reported at Ault v. Canada (Attorney General) (2008), 80 C.C.P.B. 1, 2008 Carswell- Ont 9415 (Ont. S.C.J.).

Per curiam: Overview 1 Following a 39-day trial, the trial judge awarded damages for negligent mis- representation to seven of the eight plaintiffs who had sued the federal govern- ment, excluding David Luck. The Attorney General of Canada (the “AGC”) and Mr. Luck both appeal from that decision.

Background 2 The events giving rise to this litigation occurred more than a decade ago. 3 Prior to October 15, 2000, one option for transferring pension monies be- tween the Public Service Superannuation Plan (the “PSSP”) and private pension plans was by means of a reciprocal transfer agreement (“RTA”). Treasury Board Secretariat (“TBS”), the administrative arm of the Treasury Board, was respon- sible for negotiating such pension portability agreements with “approved” em- ployers with valid private pension plans. One advantage of transferring monies pursuant to a RTA was that, in some cases, the transfer value was higher than it might otherwise have been (two times contributions plus interest). 4 One of the 300 or so RTAs at the time was the Loba RTA. It was the brainchild of Sylvain Parent, an actuary and pension consultant. Mr. Parent was the principal actuary of Welton Parent Inc. (formerly known as Welton Beauchamp Parent Inc. (“WBP”)), an actuarial firm with a pension consulting focus. Leading up to the October 15, 2000 deadline for transferring monies pur- suant to a RTA, Mr. Parent and WBP actively recruited federal public servants to join Loba Limited (“Loba”) on the basis that it would be financially advanta- geous from a pension perspective. They attracted significant interest in Loba and some 120 public servants, including the plaintiffs, joined the consulting com- pany. Mr. Parent was the President of Loba and owned both it and WBP through a personal holding company. 5 The idea was that federal employees would resign from their employment with the public service, join Loba, and transfer their pension monies to the Loba Ault v. Canada (Attorney General) Per curiam 167

pension plan (the “Loba Plan”). The employees would remain with Loba only as long as it took to have their pension monies transferred. Once that happened, they would quit Loba and transfer their monies out of the Loba Plan, which was structured to permit cash payouts. 6 While TBS had negotiated the Loba RTA, it had concerns about the legiti- macy of the Loba pension scheme. For instance, it was concerned about the pay- out of pension monies in cash and, further, that the Loba Plan might not meet all requirements for registration under the Income Tax Act, R.S.C. 1985, c. 1. 7 As a result of concerns about the Loba arrangements, TBS put a hold on transfers to the Loba Plan during the summer of 2000. The plaintiffs were not made aware of the hold. 8 While the hold was eventually lifted, TBS officials continued to have con- cerns about the validity of the Loba Plan, which they communicated to the Can- ada Revenue Agency (the “CRA”). The CRA shared its concerns about the Loba Plan and other similar plans. 9 In particular, the CRA set out its concerns in writing in a letter to TBS dated September 7, 2000 (the “TBS Letter”) and in a second similar letter to Loba and WBP dated September 15, 2000 (the “Parent Letter”). The CRA intended that the TBS and Parent Letters be distributed to all those interested in RTAs so that they would be aware of the risks and could make an informed choice about their pension funds. The CRA asked TBS officials and Mr. Parent to distribute the letters setting out its concerns. 10 For various reasons, the TBS and Parent Letters were not broadly distributed as intended and requested by the CRA. The eight plaintiffs in this case did not receive copies of either letter and were not informed of most of the information contained in the letters. 11 In the meantime, various government communications advised employees that if they applied by the October 15th RTA deadline, their monies would be transferred to the private pension plans designated by them. There was no men- tion in any of these communications of any risks associated with the transfer of pension monies pursuant to a RTA and, in particular, the Loba RTA. 12 In this case, some time after they had quit the public service and commenced employment with Loba, the plaintiffs learned that transfers to the Loba Plan had been suspended, that the RCMP was investigating Loba and Mr. Parent, and that the CRA was investigating the Loba Plan. 13 In 2003, the CRA filed a Notice of Intent to Revoke the Loba Plan, and the Federal Court of Appeal upheld that decision: 2004 D.T.C. 6680 (F.C.A.). Mr. Parent’s subsequent attempt to have the Loba Plan re-registered was unsuccess- ful: 2009 D.T.C. 5033 (F.C.A.). 168 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

14 As a result of the revocation, the plaintiffs’ pension monies were not trans- ferred to the Loba Plan. 15 The plaintiffs (except for Mr. Luck who did not claim any pension losses) sued the AGC, claiming the difference between: (1) the benefits (salary, pen- sion, severance pay, health coverage, life insurance coverage) they would have received between the date of resignation from the public service and the date they likely would have retired from the public service had they not joined Loba; and (2) the benefits (earnings, pension, etc.) they actually received over the same period. All earned less after leaving the public service than they would have earned had they remained in the public service until their retirement date. They also lost certain benefits available to public servants. 16 The AGC in turn brought third party actions against Loba, Mr. Parent, and WBP (collectively, the “Loba Parties”) for negligent misrepresentation and breach of fiduciary duty.

Trial Judge’s Reasons 17 The trial judge concluded that the AGC was liable for negligent misrepre- sentation. The core of the trial judge’s findings against the AGC was: 1) the AGC owed duties of care to the plaintiffs as employer and pension plan administrator; 2) the AGC made explicit, implied and omitted representations regarding the availability of the Loba RTA as a legitimate pension portability op- tion, which representations were misleading: a) there were explicit representations relating to the existence, legal- ity and accessibility of the Loba RTA; b) there was an implied representation that the government had sat- isfied itself that “approved” employers with RTAs with the gov- ernment, including Loba, were legitimate employers and that the government was unaware of any circumstances that raised serious doubts as to whether a transfer could be made under the Loba RTA; and c) there was an omitted representation in the failure to advise the plaintiffs that there was a significant identifiable risk that the CRA would deregister the Loba Plan. 3) the key negligence was the failure to distribute the TBS Letter from the CRA detailing the CRA’s concerns about pension transfers from the gov- ernment to entities like Loba, or a failure to distribute the information in the TBS Letter, to the plaintiffs; 4) the plaintiffs reasonably relied on the AGC’s representations; and Ault v. Canada (Attorney General) Per curiam 169

5) the explicit, implied and omitted representations caused the plaintiffs’ loss of government and pension income. 18 The trial judge held that the Loba Parties were also liable to the plaintiffs for negligent misrepresentation, as well as for breach of fiduciary duty. Her central findings in relation to the Loba Parties were: 1) the Loba Parties owed duties of care to the plaintiffs; 2) the Loba Parties did not owe fiduciary duties to the plaintiffs prior to their joining the Loba Plan, but did so thereafter; 3) the Loba Parties made negligent misrepresentations to the plaintiffs; 4) the key negligent misrepresentation was the failure to provide the plain- tiffs with the TBS and Parent Letters or the information contained in the letters; 5) the failure in 4) also amounted to a breach of fiduciary duties on the part of the Loba Parties; 6) in addition, the Loba Parties withheld information about the Loba Plan beginning in January 2001 in further breach of their fiduciary duties. 19 Having concluded that both the AGC and the Loba Parties were liable to the plaintiffs, the trial judge apportioned liability as between them at 80 per cent for the AGC and 20 per cent for the Loba Parties. 20 In the result, the AGC was ordered to pay damages to the plaintiffs as follows: Margaret Ault $124,961.00 Robert Collier $355,860.00 Robert C. Temple $235,663.00 Rod Shepherd $615,947.00 Richard Findlay $586,205.00 Lucie Nobert $468,022.00 Bryan Armstrong $446,143.00 21 The trial judge also ordered that the Loba Parties were jointly and severally liable to the AGC for contribution and indemnity in respect of the AGC’s dam- ages in the following amounts: Margaret Ault $24,992.20 Robert Collier $71,172.00 Robert C. Temple $47,132.60 Rod Shepherd $123,189.40 Richard Findlay $117,241.00 Lucie Nobert $93,604.40 170 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

Bryan Armstrong $89,228.60 22 The eighth plaintiff in the action was David Luck. As noted, he advanced a claim for lost salary but made no pension loss claim. He did not lead evidence about the capitalized value of his pension benefits. The trial judge observed (correctly, as it turns out) that it was possible that the capitalized value of the actual pension he received would be greater than the capitalized value of the pension he would have received had he remained in the public service until his anticipated retirement date. In these circumstances, the trial judge determined that, although Mr. Luck had suffered a proven loss of $108,525 relating to his loss of salary and severance pay (which the trial judge would have reduced by 10 per cent for contributory negligence), his failure to lead evidence about his pension situation disentitled him to damages because he “chose to leave out a piece of the puzzle.” In her view, it was necessary to look at the “net impact” of the financial ramifications of Mr. Luck’s resignation. Thus, as a material eviden- tial gap existed, Mr. Luck’s damages claim failed. 23 The trial judge awarded costs to the plaintiffs totalling $708,399 and, by analogy to the damages apportionment, she ordered that the Loba Parties were jointly and severally liable to the AGC for contribution and indemnity in the amount of $139,675 in respect of these costs. 24 The trial judge ordered that Mr. Luck pay costs of $20,000 to the AGC. 25 In the third party actions, the trial judge ordered that the Loba Parties pay the AGC costs of $100,000.

Issues on Appeal 26 The AGC raises five issues on the main appeal: 1) Did the trial judge err in finding that the AGC owed the plaintiffs a duty of care? 2) Did the trial judge err in finding that the AGC had breached the duty by making an untrue, inaccurate or misleading representation that was rea- sonably relied on by the plaintiffs? 3) Did the trial judge err in finding that the AGC had caused the plaintiffs’ losses? 4) Did the trial judge err in her apportionment of liability as between the AGC and the Loba Parties? 5) Did the trial judge err in failing to award the AGC its total partial indem- nity costs against the Loba Parties in the third party actions? 27 The Loba Parties cross-appealed the costs ruling of the trial judge in the third party actions. They sought to set aside the $100,000 costs award made against them and to replace it with an order that the AGC pay them substantial Ault v. Canada (Attorney General) Per curiam 171

indemnity costs of $592,861. The Loba Parties abandoned their cross-appeal at the appeal hearing. 28 Mr. Luck appeals the trial judge’s dismissal of his damages claim on the basis that the trial judge erred by linking his inferred “pension gain” to his proven salary loss. The AGC cross-appeals, asking among other things that any damages awarded reflect Mr. Luck’s contributory negligence. 29 At the appeal hearing, the court did not call on the plaintiffs to respond to issues 1, 2 and 3.

The AGC’S Appeal (1) Duty of care 30 The existence of a duty of care is the first of five requirements set out in Queen v. Cognos Inc., [1993] 1 S.C.R. 87 (S.C.C.), at para. 33, for establishing negligent misrepresentation. 31 The trial judge concluded that the Treasury Board, as employer and as pen- sion plan administrator, owed a duty of care to the plaintiffs. The AGC submits that the trial judge erred in reaching this conclusion for two reasons: first, she failed to respect the distinct and separate statutory responsibilities of the Trea- sury Board, as employer and plan administrator, and the CRA, as the regulator of pension plans under the Income Tax Act; and second, she erroneously deter- mined that the duty being alleged in this case fell within a recognized category or an analogous one. We do not accept these submissions. 32 On the first point, the trial judge was very careful in the way she described the locus within the federal government for the potential duty of care in this case — it was the Treasury Board, as employer and plan administrator, the Su- perannuation Directorate, which was responsible for the actual administration of the PSSP, and compensation advisors within the employing departments, who were responsible for advising employees regarding superannuation matters. She said (at para. 611): Public servants such as Charko, Gravelle and Macpherson working at the Pensions Division [of TBS], Soucoup and Swan working at the Superannua- tion Directorate [of Public Works and Government Services Canada] and the compensation advisors working in the employing departments and agencies, ought reasonably to have foreseen that public servants, such as the Plaintiffs, considering exercising their right as members of the PSSP to take advantage of [a] RTA would rely on their representations regarding the existence, legal- ity and accessibility of that RTA. I also find that reliance on those represen- tations by public servants in the Plaintiffs’ position, in the particular circum- stances of these cases, was reasonable. I conclude that Charko, Gravelle, Macpherson, Soucoup, Swan, the compensation advisors in the departments and agencies, and those to whom all of these individuals reported, had an 172 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

obligation to be mindful of the Plaintiffs’ interests in going about their re- sponsibilities as the Plaintiffs’ employer and as administrator of the Plain- tiffs’ pension plan. 33 It is true that other branches of the government, including the CRA, and other government-related entities, such as the RCMP, were involved in various ways in assessing, investigating and regulating the RTA program. However, the plaintiffs’ claim — about money they alleged they had unfairly lost — was against their employer and their pension plan administrator. As explained by the trial judge (at para. 627): What is being suggested [by the plaintiffs] is that, where the Pensions Divi- sion, that is charged with overseeing the RTAs entered into by the Treasury Board for the benefit of PSSP members, has specific knowledge of a signifi- cant risk associated with a category of such RTAs, the Treasury Board owes a duty of care to public servants whom it knows to be considering an RTA to advise them of the existence of that risk. 34 On the second point, the AGC submits that there is no established duty in law on an employer to provide information about the viability of a prospective new employer’s (Loba’s) pension plan. 35 This misses the point that the entire RTA program was created by the federal government and that the federal government had created an internal apparatus, anchored in TBS and fleshed out with pension divisions and compensation advi- sors, that was deeply involved in administering the program. Any step taken by an employee towards transferring his or her pension monies pursuant to a RTA with a new employer had an immediate impact on the employee’s status as a federal public servant (gone), salary (gone), and pension (transferred). Accord- ingly, it was the plaintiffs’ longstanding and current status as employees in the federal public service — not their potential new employment with a different employer — that grounds the duty of care. 36 The government was not only the employer of the plaintiffs. It was also the administrator of the PSSP of which all the plaintiffs were members as federal government employees. As this court said in Hembruff v. Ontario (Municipal Employees Retirement Board) (2005), 78 O.R. (3d) 561 (Ont. C.A.), at paras. 66 and 67, leave to appeal refused, [2006] S.C.C.A. No. 3 (S.C.C.), there is a spe- cial relationship between the administrator of a pension plan and the members of the plan and, as a result, the administrator has an obligation to be mindful of plan members’ interests when administering the plan. In these circumstances, framing a duty of care in terms of providing information to employees and plan members about a known “significant risk associated with a category of such RTAs” fits comfortably within the description of the duty of care in the pension case law. There is nothing novel about the duty of care found by the trial judge in this case. Ault v. Canada (Attorney General) Per curiam 173

(2) Misrepresentation and reliance 37 The trial judge concluded that “the explicit, implied and omitted representa- tions of the federal Crown to the Plaintiffs regarding the availability of the Loba RTA as a legitimate option for them to consider were misleading.” The AGC contends that the trial judge erred in reaching this conclusion because what the employees were told by various representatives of the government including, especially, their compensation advisors, was accurate and, with respect to omis- sions, there was no obligation to provide the information. 38 We do not accept this submission. Whether or not a statement or implied statement is a misrepresentation is a finding of fact that depends on the trial judge’s assessment of the evidence and inferences drawn from the evidence: see Kerr v. Danier Leather Inc. (2005), 77 O.R. (3d) 321 (Ont. C.A.), at para. 139, aff’d Kerr v. Danier Leather Inc., [2007] 2 S.C.R. 331 (S.C.C.). Such a finding should not be disturbed unless there is a palpable and overriding error in the trial judge’s assessment of the evidence: see NBD Bank, Canada v. Dofasco Inc. (1999), 46 O.R. (3d) 514 (Ont. C.A.), at para. 85, leave to appeal refused, [2000] S.C.C.A. No. 96 (S.C.C.). 39 In our view, the evidence marshalled by the trial judge to support her conclu- sion of misrepresentation was very strong indeed. Although there were many facets to this evidence, we would mention just one by way of illustration, namely, the disconnect between what senior TBS administrators knew in the months running up to the October 15, 2000 cutoff date for RTAs about the sig- nificant risks associated with transfers to the Loba Plan and the ignorance of the lower level compensation advisors — the people who actually met with and as- sisted the employees — about those risks. As explained by the trial judge (at para. 668): In cross-examination, Charko acknowledged that he expected that the infor- mation provided to the Plaintiffs by compensation advisors would be “com- plete”. All of the compensation advisors who dealt with the Plaintiffs were operating on the incorrect premise that the Loba RTA was a routine arrange- ment and transfer payments would occur in the normal course under the Loba RTA. Since they were unaware that the Treasury Board had previously put the Loba transfers on hold and that the Treasury Board was in possession of information that could result in its again putting the transfers on hold or suspending them indefinitely, the compensation advisors were not in a posi- tion to advise the Plaintiffs of the existence of these risks. In essence, they were not in a position to provide the Plaintiffs with the relevant information they needed in order to make an informed decision relating to their pension options. Had the compensation advisors been aware of the existence of Trea- sury Board concerns and of the earlier hold on transfers, at the very least, they could have advised the Plaintiffs to make further inquiries of the Trea- sury Board before submitting their resignations from the public service. That was not done. 174 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

40 There is nothing in this reasoning or in the rest of the trial judge’s analysis on the misrepresentation issue that could fairly attract the label ‘palpable and overriding error’. 41 The same analysis and conclusion is apposite with respect to the AGC’s as- sertion that the plaintiffs did not reasonably rely on the information that they received from the AGC’s compensation advisors. Again, the standard of review of this issue is palpable and overriding error. Again, the trial judge dealt com- prehensively with the evidence, including, importantly, providing an individual assessment of the evidence relating to reliance for each employee. She expressed her conclusion in this fashion (at para. 868): The substance of the evidence of each Plaintiff was that he or she had relied on the written and/or oral communications from government representatives in concluding that a transfer of pension entitlements from the PSSP to the Loba pension plan pursuant to the Loba RTA was a routine matter, assuming the Plaintiff resigned from the public service, became employed with Loba and submitted an Appendix B before October 15, 2000. I interpret the Plain- tiffs’ evidence as being that they relied on the written and/or oral communi- cations from government representatives in concluding that the government was not aware of circumstances that created a significant risk that the Loba pension plan would be de-registered and transfers under the Loba RTA would never occur. I also accept the evidence of all of them that, had they been made aware that a significant risk existed that a transfer of their pension entitlement into the Loba pension plan might not occur, this would have im- pacted their decision to leave the public service to join Loba. 42 Again, our conclusion is that there is nothing in the trial judge’s analysis on the reliance issue that could fairly attract the label ‘palpable and overriding er- ror’. The employees clearly relied on the advice of professional people in the government whom they trusted and, as found by the trial judge, their reliance was entirely reasonable.

(3) Causation 43 The AGC argues that the trial judge erred in finding that the AGC’s negli- gent misrepresentations caused the damages she awarded. We disagree. 44 The basic test for determining causation in cases of negligence is the “but for” test. The plaintiff bears the burden of showing that “but for” the negligent act or omission of the defendant the injury or harm would not have occurred. 45 The “but for” test recognizes that compensation for negligent conduct should only be made where there is a substantial connection between the injury and the defendant’s conduct: Hanke v. Resurfice Corp., [2007] 1 S.C.R. 333 (S.C.C.), at para. 23. In assessing the issue of “substantial connection”, courts consider whether the damages claimed were a reasonably foreseeable result of the defen- dant’s negligence. In cases where there is not a substantial connection between Ault v. Canada (Attorney General) Per curiam 175

the damages and the negligence, the damages are said to be too remote for recovery. 46 The trial judge found as a fact that had the AGC advised the plaintiffs prior to their resignations from the public service of the significant risks that were identified by the CRA as being associated with Loba-type arrangements, the plaintiffs would not have resigned from the public service to join Loba. The trial judge went on to conclude that it was the act of leaving the public service to join Loba that resulted in the damages because the plaintiffs’ employment with Loba did not provide them with the same salary and other benefits as those to which they would have been entitled had they continued in the public service. 47 Each of the plaintiffs testified to the facts as found by the trial judge. We see no basis to interfere with these findings. Thus, it can be said that “but for” the AGC’s negligent misrepresentations, the plaintiffs would not have incurred the damages awarded. 48 The AGC argues, however, that the damages awarded by the trial judge for the loss of salaries and benefits are not substantially connected to the AGC’s negligent misrepresentations and are, therefore, not compensable. The AGC makes three arguments in this regard. 49 First, the AGC argues that the damages were not reasonably foreseeable to the AGC. The AGC had no way of knowing whether the plaintiffs would earn more or less at their Loba jobs. That being the case, the AGC could not have reasonably foreseen the damages claimed. 50 The trial judge addressed this issue squarely. She pointed out that a senior TBS official, Ann Gravelle, realized that if public servants resigned to join Loba and transfers were indefinitely suspended under the Loba RTA, the public ser- vants risked incurring precisely the type of losses that they claimed in this case. Gravelle, who was one of the principal TBS actors on this file, foresaw exactly the situation that ensued and led to the plaintiffs’ damages. In our view, the losses that give rise to the damage awards were reasonably foreseeable to the AGC. 51 Second, the AGC argues that it did not induce the plaintiffs to leave their public service employment and that the lack of any inducement weighs against a finding of causation. While evidence of an inducement may be strong evidence to support a finding of causation, it is not essential. In a case of negligent mis- representation, a plaintiff need prove only that he or she relied on the misrepre- sentation in taking the course of action that led to the damage. 52 In this case, the trial judge found reliance and had ample evidence to support her finding. 53 Finally, the AGC argues that the Loba Parties’ misrepresentations met the “but for” test and that had it not been for those misrepresentations, the plaintiffs 176 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

would not have left the public service. The fact that Mr. Parent, the principal of Loba, also made misrepresentations to the plaintiffs does not negate the AGC’s liability. The trial judge found that the plaintiffs relied on the AGC’s misrepre- sentations and that those misrepresentations were a cause of the loss. It is not the law that a particular defendant’s negligent misrepresentation must be the sole cause of the plaintiff’s loss. There can be more than one substantial cause. It is sufficient that the plaintiff relied on the defendant’s statements to his or her detriment: NBD Bank, at para. 78. Indeed, when there is more than one tortious cause, the court may apportion liability among tortfeasors.

(4) Apportionment of liability 54 The AGC argues that the trial judge failed to properly assess the apportion- ment of liability. It contends that the Loba Parties’ negligence was the largest cause, by far, of the plaintiffs’ damages and that the trial judge’s 80:20 appor- tionment in favour of the Loba Parties should be reversed, so that the Loba Par- ties are held 80 per cent liable and the AGC’s proportionate fault is reduced to 20 per cent. 55 In support of this argument, the AGC attacks the trial judge’s apportionment on several bases. Among other matters, it submits that the trial judge erred by concluding that the Loba Parties owed no fiduciary duties to the plaintiffs before the date on which the plaintiffs became members of the Loba Plan. It also main- tains that when assigning degrees of fault to the AGC and the Loba Parties, the trial judge failed to consider the Loba Parties’ fiduciary duties and their breaches of those duties. Finally, the AGC contends that the trial judge’s apportionment of liability does not properly reflect her own description of the nature and extent of the Loba Parties’ blameworthy acts with respect to the plaintiffs. These er- rors, the AGC says, led to the failure to assign to the Loba Parties a degree of responsibility that accurately reflects their blameworthy conduct. 56 The test for appellate interference with a trial judge’s apportionment of lia- bility is an exacting one: “The apportionment of liability is primarily a matter within the province of the trial judge. Appellate courts should not interfere with the trial judge’s apportionment unless there is demonstrable error in the trial judge’s appreciation of the facts or applicable legal principles (citations omitted)”: Ingles v. Tutkaluk Construction Ltd., [2000] 1 S.C.R. 298 (S.C.C.), at para. 57. See also Martin v. Listowel Memorial Hospital (2000), 51 O.R. (3d) 384 (Ont. C.A.), at para. 20. A similar deferential standard applies to a trial judge’s conclusion that a fiduciary duty did not exist on the specific facts of a given case. Absent an error of law or a palpable and overriding error of fact, such a finding must be upheld on appeal: Perez v. Galambos, [2009] 3 S.C.R. 247 (S.C.C.), at para. 49. Ault v. Canada (Attorney General) Per curiam 177

57 In this case, we are satisfied that these high thresholds for interference with the trial judge’s apportionment and her fiduciary finding have been met. In our view, the trial judge erred by concluding that the Loba Parties owed fiduciary duties to the plaintiffs only after the plaintiffs became members of the Loba Plan. She further erred by failing to properly account in her apportionment anal- ysis for the fiduciary duties owed and breached by the Loba Parties. Finally, the trial judge erred by apportioning liability in a way that is fundamentally incon- sistent with her own description of the blameworthy conduct of the parties. These errors displace the deference that ordinarily would be accorded to the trial judge’s apportionment. They resulted in a material understatement of the Loba Parties’ degree of fault. Accordingly, the trial judge’s apportionment of liability cannot stand.

(a) Trial Judge’s consideration of the Loba Parties’ fiduciary duties 58 The trial judge held that, in their roles as the administrator and third party administrator of the Loba Plan, the Loba Parties owed fiduciary duties to the plaintiffs from the date when the plaintiffs became members of the Loba Plan. The latest date on which any of the plaintiffs joined the Loba Plan was October 14, 2000, the day prior to the cutoff date for transfers of pension funds under the Loba RTA. The trial judge rejected the AGC’s contention that the Loba Parties owed fiduciary duties to the plaintiffs before the plaintiffs joined the Loba Plan. 59 The trial judge also held that Mr. Parent and WBP, as consulting actuaries, owed additional duties to the plaintiffs based on the professional and ethical standards for actuaries prescribed in the Rules of Professional Conduct promul- gated by the Canadian Institute of Actuaries (the “CIA”), the regulator of actua- ries in Ontario. The trial judge concluded that these additional obligations gave rise to ordinary tort law, rather than fiduciary, duties of care to the plaintiffs. 60 The trial judge did not refer explicitly to the Loba Parties’ fiduciary duties in her apportionment analysis. However, contrary to the AGC’s submission, we think that she did so implicitly when she said in her apportionment reasons (at para. 1313): I have found that the most significant negligent misrepresentation made by Parent, Loba and WBP was their failure to advise the Plaintiffs ... about the contents of [the TBS and Parent Letters]. As the Loba pension plan adminis- trator or third party administrator, and as an actuary, Parent had a profes- sional duty to disclose this information. Parent let his own wishful thinking and certainty about the legitimacy of the Loba arrangements get in the way of his obligation to make full disclosure to the Loba pension plan members. He put the financial interests of himself, Loba and WBP ahead of those of the Plaintiffs ... in not disclosing this information. 61 The trial judge had earlier found that the Loba Parties’ deliberate non-disclo- sure of the TBS and Parent Letters or the information contained in them was a 178 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

breach of their fiduciary duties. Thus, while the trial judge did not use the label “fiduciary duty” in her apportionment analysis, it is implicit in the above-quoted passage from her reasons that she took account of those fiduciary duties that she concluded were owed by the Loba Parties to the plaintiffs. 62 However, for the purpose of her assessment of the Loba Parties’ proportion- ate degree of responsibility, the trial judge’s consideration of the Loba Parties’ breaches of fiduciary duty was confined to their conduct from the date that the plaintiffs joined the Loba Plan. 63 This is confirmed by the trial judge’s comments, set out above. In those comments, the trial judge referred both to the Loba Parties’ role as the adminis- trator or third party administrator of the Loba Plan, and to Mr. Parent’s role as an actuary. On the trial judge’s findings, the former role gave rise to fiduciary duties after the plaintiffs became members of the Loba Plan, while Mr. Parent’s role as an actuary in relation to the plaintiffs was not fiduciary in nature. Further, the non-disclosure emphasized by the trial judge was described by her as the obligation to make full disclosure “to the Loba pension plan members”.

(b) Errors in the trial judge’s fiduciary analysis 64 In our view, the trial judge erred in her fiduciary analysis by holding that the Loba Parties owed no fiduciary duties to the plaintiffs before the plaintiffs joined the Loba Plan. This error, in turn, led the trial judge to inappropriately narrow her consideration of the extent and significance of the Loba Parties’ breaches of their fiduciary duties for the purpose of apportionment of liability. We say this for the following reasons. 65 First, the trial judge’s finding regarding the date on which the Loba Parties’ fiduciary duties first commenced conflicts with her own factual findings con- cerning the nature of the relationship between the parties and the circumstances surrounding that relationship prior to the plaintiffs joining the Loba Plan. The trial judge found that: (1) Mr. Parent held himself out to the plaintiffs as being an actuary and pen- sion expert; (2) during his interactions with the plaintiffs, Mr. Parent acted in a variety of different capacities, including as a consulting actuary with expertise in pension matters, “when he advised [the plaintiffs] about their entitlement under the PSSP, their potential entitlement under the Loba [Plan], and the options available to the Plaintiffs to realize that value after it arrived in the Loba [Plan]”; (3) Mr. Parent was also functioning as principal of WBP, “the consulting actuary to the Plaintiffs”; Ault v. Canada (Attorney General) Per curiam 179

(4) Mr. Parent knew that the plaintiffs looked to him and to WBP “for infor- mation about their pension entitlements because he was an actuary” (em- phasis in original); (5) Mr. Parent realized that the plaintiffs “would place trust in the informa- tion he provided in great measure because he was a professional actuary subject to professional obligations”; (6) the plaintiffs provided personal and confidential information to Mr. Par- ent and WBP during their pre-October 15, 2000 consultations with them, including information “about their family situations, their incomes, their positions and their goals for the future”, which none of the plaintiffs would have shared with Mr. Parent “unless they believed that [he] was under a duty to use that information for their benefit”. In addition, when Mr. Parent “was explaining employment opportunities at Loba” to each plaintiff (i.e. in his consultations with the plaintiffs prior to their resigna- tions from the public service), Mr. Parent knew each plaintiff’s age, years of service with the public service, position, income level and retire- ment plans (emphasis added); (7) Mr. Parent knew that each plaintiff considered their pension funds with the PSSP as “one of his or her most significant assets” and that each plaintiff “would be relying heavily on what he told them about Loba, the Loba [Plan] and the Loba RTA in deciding whether to leave the public service and join Loba” (emphasis added); (8) Mr. Parent was also aware that the plaintiffs “were being asked to make a very significant decision about their future in a short time frame” and that they had “minimal opportunity to gather information relevant to that decision” and “very little opportunity to consult any other professionals concerning the Loba option”; (9) the subject matter being dealt with by Mr. Parent in his role as a consult- ing actuary was very complex; (10) Mr. Parent realized the limits of the plaintiffs’ knowledge regarding pen- sions. The plaintiffs did not have the skills to verify the numbers or the options outlined by Mr. Parent; (11) as far as the plaintiffs and Mr. Parent were aware, no one had as much expertise about the Loba Plan as Mr. Parent did; (12) given their limited pension knowledge and “the complexity of the subject matter and its inaccessibility to the average person”, the plaintiffs were vulnerable; (13) Mr. Parent realized that the plaintiffs “were looking to him for relevant information to inform their decision whether or not to leave the public service and join Loba” (emphasis added); and 180 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

(14) had the plaintiffs been made aware that “a significant risk existed that a transfer of their pension entitlement into the Loba pension plan might not occur”, this “would have impacted their decision to leave the public ser- vice to join Loba”. In particular, had the plaintiffs been told of the infor- mation in the TBS and Parent Letters, the plaintiffs would not have de- cided to leave the public service to join Loba and, therefore, would not have suffered any damages. 66 The trial judge was entitled to make these findings on the evidence before her and they are not challenged on appeal. These findings concern the nature of the relationship between the parties and the circumstances surrounding that rela- tionship prior to the date on which the plaintiffs joined the Loba Plan. They reflect elements of trust, reliance, confidence and vulnerability in the relation- ship and dealings between the parties during the plaintiffs’ pre-October 15, 2000 consultations with the Loba Parties. As we will elaborate, these relational fea- tures underlie the notion of a fiduciary duty. See International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574 (S.C.C.). In our view, these findings compel the conclusion that the Loba Parties’ fiduciary duties arose before the plaintiffs joined the Loba Plan. 67 We also note that, at the relevant times, Mr. Parent owned both Loba and WBP through his personal holding company. He served as Loba’s President and the representative of the Loba Parties in their dealings with the plaintiffs before they joined the Loba Plan. The trial judge found that Mr. Parent was the di- recting mind of Loba’s and WBP’s operations and their agent during his consul- tations with the plaintiffs. It was Mr. Parent who met or spoke to all the plain- tiffs “to explain what their relationship would be with Loba and what benefits they could receive under the Loba RTA and Loba pension plan”. It was also Mr. Parent who “answered the Plaintiffs’ questions about the Loba arrangements — both before and after they joined Loba”. 68 On these facts, the trial judge concluded that, like Mr. Parent personally, Loba owed duties of care to the plaintiffs. We agree. Moreover, in the circum- stances that obtained here, Loba is fixed with the consequences of Mr. Parent’s and WBP’s breaches of their fiduciary duties. 69 There is a second difficulty with the trial judge’s fiduciary analysis. Al- though the trial judge relied on many of the findings described above to support her conclusion that the Loba Parties owed duties of care to the plaintiffs prior to the date on which they joined the Loba Plan — duties that she found attracted a “high” standard of care — she held that these duties were not impressed with fiduciary obligations. This conclusion is at odds with the applicable jurispru- dence regarding the distinctions between the fiduciary obligation and the ordi- nary tort law duty of care. While these duties may sometimes overlap, they re- Ault v. Canada (Attorney General) Per curiam 181

main conceptually and functionally unique: see Norberg v. Wynrib, [1992] 2 S.C.R. 226 (S.C.C.), at p. 272. 70 In Hodgkinson v. Simms, [1994] 3 S.C.R. 377 (S.C.C.), at p. 404, the Su- preme Court endorsed the following description of the fiduciary principle, set out in Lloyd’s Bank v. Bundy (1974), [1975] Q.B. 326 (Eng. C.A.), at p. 341: Such cases tend to arise where someone relies on the guidance or advice of another, where the other is aware of that reliance and where the person upon whom reliance is placed obtains, or may well obtain, a benefit from the transaction or has some other interest in it being concluded. In addition, there must, of course, be shown to exist a vital element ... referred to as confidentiality. 71 The Supreme Court also indicated at p. 405: [T]he fiduciary duty may properly be understood as but one of a species of a more generalized duty by which the law seeks to protect vulnerable people in transactions with others ... the concept of vulnerability ... is an important indicium of [the existence of a fiduciary relationship]. 72 In this context, Hodgkinson holds at p. 405: [W]hile both negligent misrepresentation and breach of fiduciary duty arise in reliance-based relationships, the presence of loyalty, trust and confidence distinguishes the fiduciary relationship from a relationship that simply gives rise to tortious liability. Thus, while a fiduciary obligation carries with it a duty of skill and competence, the special elements of trust, loyalty and confi- dentiality that obtain in a fiduciary relationship give rise to a corresponding duty of loyalty. [Emphasis added.] 73 Ultimately, the trial judge appears to have rejected the notion that the Loba Parties owed fiduciary duties to the plaintiffs before they joined the Loba Plan on the basis of three main factors (at para. 958): (1) Mr. Parent had minimal interaction with each of the plaintiffs in his role as consulting actuary; (2) the plaintiffs sought information from Mr. Parent based on an actua- rial analysis. They did not seek or obtain advice or recommendations “in a broader sense”; and (3) the plaintiffs were aware that due to Mr. Parent’s obligations to WBP and Loba, he had other interests and “divided loyalties”. 74 In our opinion, the trial judge’s emphasis on these factors was misplaced. We note first, the duration and frequency of Mr. Parent’s contacts with the plaintiffs before they joined the Loba Plan, while part of the context of their dealings, is not determinative of the existence of fiduciary obligations. Fiduciary law focuses on relationships. It is the nature of the relationship at issue as well 182 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

as the surrounding circumstances that give rise to fiduciary duties. See Galambos, at para. 70; LAC Minerals Ltd., at p. 648. 75 Further, and significantly, although the trial judge framed the scope of Mr. Parent’s consulting services narrowly in the above-mentioned part of her rea- sons, this is inconsistent with her other findings that cast the services provided to the plaintiffs prior to their resignations from the public service in considerably broader language. For example, the trial judge elsewhere held that Mr. Parent (and therefore also WBP and Loba) advised the plaintiffs before they quit the public service and joined Loba about: (1) their entitlements under the PSSP; (2) their potential entitlements under the Loba Plan; (3) the available options to real- ize value after their funds arrived in the Loba Plan; and (4) their employment opportunities at Loba. 76 The trial judge also held that the plaintiffs trusted and relied on the informa- tion and advice provided by the Loba Parties, including in respect of their deci- sions “whether to leave the public service and join Loba”. These findings impli- cate the plaintiffs’ dependency on the Loba Parties and their vulnerability from the outset of the parties’ consultations. 77 Finally, the fact that the plaintiffs knew that Mr. Parent was not acting as a completely independent actuary does not answer the question whether the Loba Parties were fiduciaries. Mr. Parent failed to fully disclose the nature of the Loba Parties’ conflicting interests in the Loba pension plan arrangements, in- cluding his own “divided loyalties”, to the plaintiffs. Further, as the trial judge herself observed, a duty of loyalty is “inherent to any professional relationship”, including that of an actuary and his or her client. 78 When the trial judge’s findings about the relationship between the parties prior to the date on which the plaintiffs joined the Loba Plan are viewed as a whole, they strongly militate in favour of the conclusion that the Loba Parties’ fiduciary duties arose before that date. The relationship of trust and confidence between the parties began when the plaintiffs approached Mr. Parent and dis- closed highly personal and confidential information to him in reliance, to his knowledge, on his qualifications and expertise as an actuary and pension expert who was providing professional actuarial and pension-related services about a complex subject matter that was beyond the plaintiffs’ own experience and eval- uative skills. 79 Finally, the trial judge’s fiduciary analysis is also problematic in that it un- dermines and minimizes Mr. Parent’s and WBP’s obligations as actuaries whose professional conduct is regulated by the standards set by the CIA, their self- regulating body. 80 As we have said, the trial judge found that Mr. Parent owed the plaintiffs a duty of care in accordance with the CIA Rules of Professional Conduct that bind Ault v. Canada (Attorney General) Per curiam 183

actuaries in Ontario. She also held that WBP, “as the actuarial firm for whom Mr. Parent worked, owed the same duty of care” to the plaintiffs. 81 The evidence at trial established that the applicable CIA Rules oblige actua- ries, among other things, to refrain from any professional conduct involving misrepresentation and to make “full and timely disclosure” to a client of “the sources of all direct or indirect compensation that the member or the member’s firm has received or may receive” in relation to a professional services assignment. 82 The trial judge considered Mr. Parent’s and WBP’s obligations to the plain- tiffs under the CIA Rules in the context of determining whether they owed an ordinary duty of care to the plaintiffs. Later in her reasons, she also acknowl- edged that their obligations under the CIA Rules was a factor supporting the conclusion that they were in a fiduciary relationship with the plaintiffs “when providing them with a financial analysis relating to their pension entitlement under the PSSP and the possibilities under the Loba RTA”. 83 The trial judge went on to conclude, however, that this factor was overborne by other considerations, including: (1) since the plaintiffs did not have any pre- existing relationship with Mr. Parent, “there was no expectation that he would feel loyalty toward them, aside from the loyalty inherent in any professional relationship” (emphasis added); (2) the plaintiffs did not obtain advice from Mr. Parent about what they should do and Mr. Parent made it clear that he was sim- ply providing the plaintiffs with a financial analysis for their use; and (3) none of the plaintiffs gave Mr. Parent discretion to act on his or her behalf. In this fashion, the trial judge discounted the import of Mr. Parent’s and WBP’s profes- sional obligations under the CIA Rules. In so doing, the trial judge erred. 84 We have already discussed the trial judge’s conflicting findings about the scope of the professional services provided by the Loba Parties. To repeat, based on her factual findings as a whole, we are unable to accept that Mr. Parent and WBP played the limited role set out in paragraphs 75 and 85, above. On the totality of the trial judge’s findings, they were not mere passive conduits of fi- nancial information in their consultations with the plaintiffs before the plaintiffs resigned from the public service. 85 Nor does the absence of a specific grant of discretionary agency authority or power to the Loba Parties in respect of the plaintiffs and their interests dispose of the question of whether the Loba Parties’ relationship with the plaintiffs was fiduciary from the outset. As indicated by the Supreme Court in Galambos, at paras. 83-84, while “[i]t is fundamental to the existence of any fiduciary obliga- tion that the fiduciary has a discretionary power to affect the other party’s legal or practical interests”, that power “may be quite broadly defined”. It may arise, for instance, “in particular situations such as the professional advisory relation- ship addressed in Hodgkinson, by the beneficiary entrusting the fiduciary with 184 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

information or seeking advice in circumstances that confer a source of power: see, e.g., LAC Minerals Ltd. and Hodgkinson”. This case involves a professional advisory relationship in which, under conditions of trust, reliance and vulnera- bility, personal and confidential information was communicated by the plaintiffs for the purpose of obtaining actuarial and pension-related advice on a complex subject matter. 86 We appreciate that the standards of professional conduct set by a self-regu- lating body, like the CIA, are not dispositive of whether the professional obliga- tions owed under those standards are fiduciary in nature. However, they “are of guiding importance in determining the nature of the duties flowing from a par- ticular professional relationship”: Hodgkinson, at p. 425. As with lawyers and accountants, the standards of responsibility set by the self-regulating body of the actuarial profession are intended to protect the public interest and safeguard the independence of the profession and its credibility with the public: see Hodgkin- son, at p. 425, in the context of the accounting profession. Viewed in this man- ner, the CIA standards of conduct for actuaries engage obligations of loyalty, honesty and fair dealing. 87 In this case, the plaintiffs sought advice from Mr. Parent and WBP in their capacities as consulting actuaries before the plaintiffs resigned from the public service. The AGC argues that in light of Mr. Parent’s and WBP’s positions as consulting actuaries, their professional obligations under the CIA Rules, and the specific circumstances surrounding the relationship between the plaintiffs and the Loba Parties as found by the trial judge, there was an implied undertaking by the Loba Parties that they would act in the plaintiffs’ best interests, thereby trig- gering fiduciary duties: see Galambos, at paras. 76-77 and 79. 88 We agree. Mr. Parent’s knowledge of the circumstances under which the Loba Parties’ advice was sought, coupled with Mr. Parent’s and WBP’s inherent duties of loyalty as professional actuaries and the fact that highly personal and confidential information was communicated to the Loba Parties by the plaintiffs, created, at least, an implied undertaking that the Loba Parties would act in the plaintiffs’ best interests. The trial judge’s findings that the relationship between the parties was imbued with elements of trust, reliance and confidence and that the plaintiffs were vulnerable, reinforce the conclusion that the Loba Parties were fiduciaries from the outset. These considerations are entitled to great weight in determining whether fiduciary obligations were in play prior to the plaintiffs joining the Loba Plan. 89 All these factors are powerful markers of a fiduciary relationship. In all the circumstances, we conclude that, on the trial judge’s own findings, the relation- ship between the plaintiffs and the Loba Parties prior to the plaintiffs joining the Loba Plan fell within the rubric of the fiduciary obligation. Ault v. Canada (Attorney General) Per curiam 185

(c) Breaches of fiduciary duties 90 It remains to consider whether the Loba Parties breached the fiduciary duties that they owed to the plaintiffs prior to the plaintiffs joining the Loba Plan. Ac- cepting the trial judge’s findings, this clearly occurred. The trial judge found that the Loba Parties breached their duty of care to the plaintiffs when they failed to share the CRA’s concerns about the Loba pension arrangements with the plain- tiffs as soon as they became aware of them. Knowledge of those concerns was brought home to the Loba Parties on their receipt of the TBS and Parent Letters in September 2000. 91 The trial judge further found that Mr. Parent consciously decided not to share this information with the plaintiffs “in order to protect his ‘pension porta- bility business’”. In other words, he deliberately put his own personal and finan- cial interests ahead of those of the plaintiffs in order to profit financially. This conduct is antithetical to the duties of a fiduciary. 92 Mr. Parent’s non-disclosure did not end there. The trial judge also held that he failed to tell the plaintiffs of the Loba Parties’ personal financial interests in the Loba pension arrangements, including in particular, Mr. Parent’s intent to ultimately arrange for the balance of the surplus in the Loba Plan to be paid out for the benefit of persons other than the plaintiffs. In addition, the Loba Parties were to be paid substantial fees from the Loba Plan itself. Not surprisingly, Mr. Parent was unable to say that these intended fees would constitute a prudent use of the trust funds comprising the Loba Plan. 93 Thus, the Loba Parties failed to disclose information to the plaintiffs that was material to the plaintiffs’ decisions whether to resign from the public ser- vice and transfer their pension monies to the Loba Plan, at the precise time when the information would have been most relevant and valuable to the plaintiffs. This was a serious and obvious breach by the Loba Parties of their fiduciary duties to the plaintiffs.

(d) Conclusion regarding fiduciary duties 94 In apportioning liability between the AGC and the Loba Parties, the trial judge was mindful of certain of the Loba Parties’ blameworthy conduct prior to the date on which the plaintiffs resigned from the public service and joined the Loba Plan. However, the trial judge evaluated the significance of that conduct for apportionment purposes on the basis that the Loba Parties’ offending con- duct constituted breaches of their ordinary tort law, rather than fiduciary, duties owed to the plaintiffs. 95 But the distinction in the nature of the Loba Parties’ duties is significant. It is not merely a question of appropriate nomenclature. In contrast to the wrongs involved in the breaches of their tort law duties, the wrongs occasioned by the 186 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

Loba Parties’ breaches of their fiduciary duties involved damage to the relation- ships of trust and confidence established with the plaintiffs. 96 It was therefore essential that the trial judge factor “the full and fair conse- quences” of the Loba Parties’ breaches of their fiduciary duties into her appor- tionment analysis: see Norberg, at p. 274, per L’Heureux-Dub´e and McLachlin JJ., (in dissent but not on this point). This did not occur. Instead, by failng to do so, the trial judge undertook an unduly narrow assessment of the Loba Parties’ culpability.

(e) Nature and extent of the parties’ blameworthy acts 97 The AGC contends that the trial judge’s 80:20 apportionment of liability does not properly reflect her own description of the nature and extent of the Loba Parties’ blameworthy acts with respect to the plaintiffs. 98 We agree. In her reasons on the apportionment issue, the trial judge carefully set out the culpable acts and omissions of both the AGC and the Loba Parties. In our view, there is a real parity, both quantitatively and qualitatively, in her two lists of factors. It is true that, with respect to some factors, the trial judge finds certain ameliorating circumstances that “soften” the Loba Parties’ culpability. However, read as a whole, the trial judge’s reasons on apportionment support a very modest differentiation in the apportionment of liability in favour of the Loba Parties. In this context, her ultimate apportionment at 80:20 favouring the Loba Parties comes as a jarring conclusion at the end of reasons documenting similar misconduct by the AGC and the Loba Parties, both in number and in nature. 99 Quantitatively, by our count the trial judge found that there were 12 factors that pointed to the blameworthiness of the AGC: • The AGC put into place the RTA option for departing public servants. • The AGC advertised the availability of the RTA option to the Compen- sation Community in the run-up to the October 15, 2000 deadline. • The AGC issued no warnings to the Compensation Community regard- ing factors that could limit a public servant’s access to a RTA or regard- ing potential risks associated with relying on a RTA. • At all times, the AGC identified Loba as an approved employer even though, as of May 2000, it had serious concerns about the validity of the Loba RTA. • By early October 2000, the AGC knew that the RCMP was collecting undercover evidence for the purpose of laying criminal charges. • By August 30, 2000, the AGC understood that Loba was receiving a 10 per cent commission for processing a transfer under the Loba RTA, which called into question its validity. Ault v. Canada (Attorney General) Per curiam 187

• The AGC’s culpability was augmented by its status as the plaintiffs’ long-term employer. • The AGC’s culpability was augmented by its status as the plaintiffs’ long-term pension administrator. • The various actors within the AGC colluded by keeping highly relevant information from the plaintiffs. • The various actors within the AGC colluded by keeping highly relevant information from the Loba Parties. • After November 16, 2000, the AGC consciously withheld relevant infor- mation from the plaintiffs that might have assisted them in mitigating their losses. • When the plaintiffs finally asked to revoke their applications for a trans- fer to the Loba RTA, the AGC tried to impose a totally unreasonable Release and Indemnification Agreement. 100 Turning to the Loba Parties, by our count the trial judge found that there were 13 factors that pointed to the blameworthiness of the Loba Parties: • The Loba Parties conceptualized the Loba RTA. • The Loba Parties aggressively advertised and marketed the Loba RTA. • The Loba Parties received a 10 per cent commission for processing a transfer under the Loba RTA, which called into question its validity. • The Loba Parties knew that the AGC did not approve of the way the RTAs were being used by consulting companies. • The Loba Parties knew that the AGC had cancelled similar RTAs due to policy concerns on the part of the AGC. • The Loba Parties knew that the AGC was highly skeptical about its ar- rangement and was keeping a close eye on them. • The Loba Parties did not adequately convey to the plaintiffs the fragility of the Loba employer/employee relationship, which was a critical pre- condition of transferring funds into the Loba RTA. • The Loba Parties did not adequately explain to the plaintiffs the chain of events that resulted in a hold being placed on transfers under the Loba RTA in the summer of 2000. • The Loba Parties did not inform the plaintiffs that the letter they would receive from the AGC in the summer of 2000 was an extraordinary mea- sure on its part in monitoring RTAs. • The Loba Parties’ culpability was augmented by its status as a pension plan administrator. 188 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

• The Loba Parties’ culpability was augmented by Mr. Parent’s status as an actuary, with a professional duty to disclose relevant information. • The Loba Parties’ culpability was augmented by Mr. Parent putting his personal financial interests and the Loba Parties’ financial interests ahead of those of the plaintiffs. • After October 15, 2000, the Loba Parties did not advise the plaintiffs about the hold the AGC had placed on transfers under the Loba RTA. 101 These lists from the trial judge’s description of the blameworthy acts of the AGC and the Loba Parties lead to an obvious conclusion — there is an almost exact quantitative parity in those acts. 102 Qualitatively, it strikes us that there is also a genuine parity in the trial judge’s description of the misconduct of both parties. Put simply, she was highly critical of both the AGC and the Loba Parties. For example, the trial judge casti- gated the AGC for engaging in an “intentional deception” that was “particularly egregious”. However, she also criticized Mr. Parent who “put the financial inter- ests of himself, Loba and WBP ahead of those of the plaintiffs.” We do not see a qualitative difference in these descriptions of the parties’ blameworthy acts. 103 There is, however, one difference in the trial judge’s treatment of the AGC and the Loba Parties in the apportionment of liability section of her reasons. In the case of the Loba Parties, the trial judge went on to address several considera- tions that she regarded as ameliorating their degree of culpability, ultimately concluding that their blameworthiness was lessened because they had a “reduced appreciation of the risks” associated with the Loba pension arrangements. In our view, these factors justified the reduction of the Loba Parties’ degree of fault below 50 per cent. However, in light of the quantitative and qualitative parity in her description of the blameworthy acts of both parties set out above, the ame- liorating factors favouring the Loba Parties are far removed from supporting a reduction of their liability to only 20 per cent.

(f) Adjusted apportionment of liability 104 The trial judge’s errors that we have described led to a flawed assessment of the Loba Parties’ blameworthy conduct and, in turn, to an inappropriate reduc- tion in their degree of fault. This necessitates adjustment of the trial judge’s apportionment. 105 In particular, recalibration of the trial judge’s apportionment is required to properly reflect her own assessment of the nature and extent of the Loba Parties’ culpability. On this ground alone, the trial judge’s 80:20 apportionment must be revisited. 106 In addition, the apportionment of liability must take full account of the Loba Parties’ serious and ongoing breaches of their fiduciary duties. We recognize Ault v. Canada (Attorney General) Per curiam 189

that these breaches do not entitle the plaintiffs to greater damages per se than those to which they would be entitled for the Loba Parties’ breaches of their ordinary tort duties. However, equity will intervene to supplement common law causes of action where, as here, a defendant’s wrongful conduct evinces breach of trust and the promotion of the defendant’s own or others’ interests at the ex- pense of those of the plaintiff: see B. (K.L.) v. British Columbia, [2003] 2 S.C.R. 403 (S.C.C.), at paras. 48-49. 107 In all the circumstances, we conclude that a fair and reasonable adjustment to the trial judge’s apportionment of liability results in the assignment of 60 per cent fault to the AGC and 40 per cent fault to the Loba Parties. We trust that the parties are positioned to adjust the damages payable to the plaintiffs, and the Loba Parties’ liability to the AGC for contribution and indemnity and for part of the plaintiffs’ costs, in light of this adjusted apportionment of fault.

(5) AGC’s costs appeal 108 The AGC argues that the trial judge erred in failing to award the AGC its total partial indemnity costs against the Loba Parties in the third party actions. This argument may be dealt with summarily. 109 The determination of costs is a matter of judicial discretion. The circum- stances in which an appellate court can interfere with a trial judge’s exercise of that discretion are strictly limited: absent an error in principle or unless the costs award is plainly wrong, appellate intervention is precluded: see Hamilton v. Open Window Bakery Ltd. (2003), [2004] 1 S.C.R. 303 (S.C.C.), at para. 27; Martin, at para. 84. 110 The trial judge concluded that it was inappropriate to follow the normal rule that ‘costs follow the event’ in the third party actions. In the result, she held that the Loba Parties should be liable for $100,000 of the AGC’s $250,722 partial indemnity costs in those actions. We see no basis for interfering with this costs disposition. 111 The AGC’s relevant pleadings contain allegations that impugn the integrity and honesty of Mr. Parent and assertions of wrongdoing analogous to fraud against the Loba Parties. Given the AGC’s pleadings, it was open to the trial judge to consider the issue of unproven fraud allegations in her costs assess- ment. On her findings, those allegations were not established at trial. Serious allegations of this kind, if unproven, attract serious costs consequences: see Hamilton, at para. 26. On this ground alone, the trial judge was justified in de- parting from the normal ‘costs follow the event’ rule in the third party actions. 112 Nor do we see any error in principle in the trial judge’s consideration of factors bearing on the role of the AGC in the conduct of the litigation. This, too, was a proper consideration in the determination of costs. 190 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

113 Finally, we are not persuaded that the trial judge’s discretionary costs award in the third party actions is plainly wrong. 114 Accordingly, the AGC’s costs challenge in the third party actions fails.

David Luck’s Appeal 115 The trial judge determined that Mr. Luck left his employment with the pub- lic service in reliance on the negligent misrepresentations of the AGC. It is ac- cepted that he suffered a loss in salary and benefits. As already noted, the trial judge dismissed Mr. Luck’s claim for damages because he had not led evidence about the possible increase in the value of his pension entitlement arising from his resignation from the public service at a date prior to the date on which he would have resigned or retired had the AGC not made the negligent misrepresentations. 116 The trial judge noted that Mr. Luck had the onus of proving his damages. She also pointed out that in some situations receipt of a lesser pension for a longer period will yield a greater present value than receipt of a higher pension that starts at a later point in time. She concluded that Mr. Luck may have real- ized a pension gain from his early resignation and that his failure to lead evi- dence about his pension situation meant that she could not conclude that he had suffered any net loss as a result of his resignation. 117 Mr. Luck argues that the trial judge erred in concluding that the amount of any pension gain should be deducted from his salary loss. He argues, in circum- stances such as those in this case, a court should make an award for a salary loss without examining whether the conduct triggered by the negligent misrepresen- tations resulted in a gain in the value of a pension. We do not accept this argument. 118 Damages in cases of negligent misrepresentation are based on the restitution principle. A successful plaintiff in a negligent misrepresentation case is entitled to be put in the position he or she would have been had the misrepresentation not been made: Rainbow Industrial Caterers Ltd. v. Canadian National Railway, [1991] 3 S.C.R. 3 (S.C.C.). As Professor Fridman notes in his text The Law of Torts in Canada, “[a]n award of compensatory damages is based on the actual loss incurred by the plaintiff as closely as that can be calculated”: 3d ed. (To- ronto: Carswell, 2010), at p. 476. 119 The effect of Mr. Luck’s argument is that the court in awarding damages should take into account only the negative impact of the negligent misrepresen- tation, but not any benefit or gain flowing from it. In our view, that approach does not make sense on the facts of this case. 120 Mr. Luck’s reliance on the AGC’s negligent misrepresentations was based on an anticipated gain in the value of his pension. His decision to resign from the public service, which led to his salary and benefit losses, was inextricably Ault v. Canada (Attorney General) Per curiam 191

linked to his expectation that he would receive a gain in the value of his pension and the belief that the gain would more than offset any loss. Mr. Luck’s expecta- tion of a pension gain was no doubt based in large part on an expectation that his pension funds would be transferred to the Loba Plan under the Loba RTA. That did not happen. However, even though the transaction was not completed as anticipated, there was a possibility that Mr. Luck would realize an increase in the capitalized value of his pension. 121 In these circumstances, we see no reason why an award of damages in Mr. Luck’s favour should not take into account any pension gain he realized as a result of his early resignation. Indeed, Mr. Luck accepts that had he realized the full amount of the anticipated pension gain, as would have been the case if the funds had been transferred under the Loba RTA, he would have had no claim for loss of salary and other benefits. 122 In Gauthier v. Canada (Attorney General) (2000), 185 D.L.R. (4th) 660 (N.B. C.A.), the New Brunswick Court of Appeal took a similar approach to the one we adopt in this case. Mr. Gauthier’s claim was based on a negligent mis- representation that led to an early resignation and a loss of salary. As a result of his premature resignation, Mr. Gauthier received a gain in his pension benefits. The New Brunswick Court of Appeal held that the defendant was entitled to a credit for the amount of the pension gain in computing Mr. Gauthier’s pecuniary loss. In calculating the loss, the court took into account the “negative financial repercussions” as well as the “positive effects” in his financial situation”: p. 672. 123 Mr. Luck argues that this court should take guidance from the jurisprudence in wrongful dismissal cases. He says that the wrongful dismissal cases hold that when assessing damages, courts should not deduct a pension gain from the sal- ary that would have been paid during the notice period. The AGC disagrees that the wrongful dismissal cases, at least at the appellate level, have gone that far. 124 We do not find it necessary to resolve the disagreement with respect to the wrongful dismissal jurisprudence. Whatever the situation is in wrongful dismis- sal cases, we are satisfied that on the facts of this case, the salary loss claim is so factually connected to an anticipated pension gain, that it was entirely appropri- ate for the judge to decline to award damages without evidence relating to the potential pension gain. Thus, we would dismiss the appeal. In light of this con- clusion, it is unnecessary to deal with the AGC’s cross appeal.

Disposition 125 The AGC’s appeal is therefore allowed, in part, to accord with these reasons. Mr. Luck’s appeal is dismissed, as is the AGC’s cross-appeal in that proceeding. In light of our disposition of these appeals, the AGC shall deliver its brief writ- ten submissions concerning costs in respect of the main appeal and Mr. Luck’s appeal to the Registrar of this court within 14 days from the date hereof. The 192 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d) respondents in the main appeal and the appellant in Mr. Luck’s appeal shall deliver their brief written responding costs submissions within 14 days thereafter. Crown’s appeal allowed in part; L’s appeal dismissed.

[Indexed as: Simmons v. Webb] Lawrence John Simmons and Anchordale Holdings Limited, Plaintiffs (Appellants) and Christian J. Hamber and Harrison Pensa LLP, Defendants (Respondents in Appeal) Ontario Court of Appeal S.T. Goudge, E.A. Cronk, Robert P. Armstrong JJ.A. Heard: September 7, 2010 Judgment: January 7, 2011 Docket: CA C49924, 2011 ONCA 7 C.F. MacKewn, for Appellants Russell M. Raikes, for Respondents Professions and occupations –––– Barristers and solicitors — Relationship with cli- ent — Miscellaneous –––– S held shares in his company personally and through holding company, A — A was shown as creditor of company — S decided to file for personal bankruptcy and wanted to give up his shares because he did not want his own financial difficulties to compromise position of young people in firm — S’ shares were purchased for cancellation, he resigned as director and debt owed by corporation to A was converted into special non-voting shares — Company’s solicitor, H, prepared paperwork — Fol- lowing dispute, S was terminated from company — S brought action against H for breach of duty of care on ground that H did not recommend that he receive independent legal advice nor did he discuss alternatives — Action was dismissed — Trial judge held that there never was any agreement to restore S’ position after he was discharged from bank- ruptcy — H drafted documents to effect corporate transactions and took pains to ensure that all present read and understood content, and consequences on what was to be signed — S appealed — Appeal dismissed — S clearly wanted to give up shares prior to filing for bankruptcy — Transaction may have prima facie appeared to be adverse in in- terest, but position of S and A must be viewed in context presented to H — H accepted advice of W that shares in company had no value and accepted advice that A debt had no substance; he was entitled to rely on that information — There was nothing to suggest to H that either S or A were giving up anything of value or that S did not fully appreciate what he was doing. Simmons v. Webb Robert P. Armstrong J.A. 193

Cases considered by Robert P. Armstrong J.A.: Davey v. Woolley, Hames, Dale & Dingwall (1982), 1982 CarswellOnt 844, 35 O.R. (2d) 599, 133 D.L.R. (3d) 647 (Ont. C.A.) — distinguished Simmons v. Webb (2010), 2010 CarswellOnt 6689, 2010 ONCA 584, 85 C.C.E.L. (3d) 69, 74 B.L.R. (4th) 9 (Ont. C.A.) — referred to Statutes considered: Fraudulent Conveyances Act, R.S.O. 1990, c. F.29 Generally — referred to

APPEAL by former employee and shareholder from judgment reported at Simmons v. Webb (2008), [2008] O.J. No. 5249, 84 C.C.E.L. (3d) 196, 2008 CarswellOnt 7874, 54 B.L.R. (4th) 197 (Ont. S.C.J.), dismissing action for solicitor’s negligence.

Robert P. Armstrong J.A.:

1 The appellants appeal the dismissal of their action for solicitor’s negligence. 2 Christian Hamber, a partner of the law firm of Harrison Pensa LLP, was retained to do the necessary legal work in connection with two commercial transactions involving the appellants and the L. J. Simmons Group Ltd. (“the Simmons Group). The appellants assert that Mr. Hamber should have recom- mended that they receive independent legal advice and that he should have dis- cussed alternatives to the proposed transactions. 3 For the reasons that follow, I would dismiss the appeal.

Background 4 John Simmons and his personal holding company, Anchordale Holdings Ltd., were shareholders of the Simmons Group. The two other shareholders of the Simmons Group were Walter Webb and Daniel Van Houtte. 5 Anchordale was also shown on the financial statements of the Simmons Group as a creditor in the amount of $54,389 (later reduced to $44,389). There was some question as to the origin of this debt. However, the chartered account- ant for the Simmons Group testified that he assumed the origin of the debt was not one of substance as it was a reflection of excess dividends that had been declared but not paid. 6 The Simmons Group was engaged in the real estate brokerage and appraisal business. 7 As a result of the precarious personal financial position of Mr. Simmons, he decided to declare personal bankruptcy. This led to a discussion among Messrs. Simmons, Webb and Van Houtte as to the future of the Simmons Group. A decision was made by these three principal shareholders that Mr. Simmons and Anchordale would surrender their shares in the Simmons Group. In respect of 194 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

the Anchordale debt, there had been earlier discussions with the Simmons Group’s accountant about getting the debt off the books of the company to im- prove its position in obtaining bank financing. The evidence was that if the debt was removed from the books of the company, a note to the financial statements, which cast a negative light on the financial position of the Simmons Group, could also be removed. These discussions ultimately led to a proposal that the Anchordale debt would be converted to a class of preference shares that were not retractable, but redeemable at the option of the corporation. 8 As a result, Messrs. Simmons, Webb and Van Houtte agreed to proceed with the surrender of the shares and the conversion of the debt. The trustee in bank- ruptcy testified that if neither the shares nor the debt had any economic value, they would not be assets, which would be of interest to the bankrupt estate. He testified that he gave that opinion to Mr. Simmons. Mr. Simmons testified that he was content to give up his shares in the Simmons Group because he did not want his own financial difficulties to compromise the position of the young peo- ple in the firm. 9 The documentation for the transactions was prepared by Mr. Hamber who was the solicitor to the Simmons Group. He was also the solicitor to Anchordale. Mr. Simmons testified that it was Mr. Webb’s responsibility to re- tain and instruct lawyers for anything to do with the affairs of the Simmons Group. Mr. Webb retained Mr. Hamber and his law firm, Harrison Pensa LLP, in respect of the transactions. 10 The transactions were closed on September 14, 1998 with Messrs. Simmons, Webb and Van Houtte at Mr. Hamber’s law firm. Mr. Hamber reviewed all of the documentation to be signed that day. He asked if there were any questions and there were none. As the three individuals were about to sign the documents, Mr. Simmons, according to Mr. Hamber, asked “So, what am I signing?” Both Mr. Webb and Mr. Van Houtte, according to Mr. Hamber, expressed some exas- peration. Mr. Simmons testified that he had simply asked, “What are my op- tions?” and Mr. Van Houtte replied, “That will depend on events in the future.” According to Mr. Simmons, he received assurances from Mr. Webb that his shares would be restored after he was discharged from bankruptcy. Mr. Webb and Mr. Van Houtte both denied that there were any such assurances given. The trial judge concluded that, “[t]he overwhelming weight of the evidence compels the conclusion that there was never any agreement to restore Simmons’ position.” 11 Mr. Hamber testified that after Mr. Simmons’s confusion, he asked the par- ties if they needed to discuss matters any further. Mr. Hamber did not recall if and to what extent they discussed matters further, but shortly thereafter, he asked if they wanted to proceed with the signing. They indicated that they did. Simmons v. Webb Robert P. Armstrong J.A. 195

The documents were signed and Mr. Simmons read each document before he signed it. He testified that he read and understood what it was that he signed. 12 The trial judge accepted the evidence of Mr. Hamber as to what transpired at the meeting. 13 On December 4, 1998, Mr. Simmons made a voluntary assignment in bank- ruptcy. In the statement of affairs signed by Mr. Simmons, at the time of his assignment in bankruptcy, he stated that in October 1998, he had transferred his shares in the Simmons Group to other shareholders. He further stated those shares had no value and that he received no money in exchange. Mr. Simmons did not advise the trustee that upon discharge from bankruptcy, he would be restored as a shareholder of the Simmons Group. There was no discussion with the trustee about any restoration of the debt owed to Anchordale after his dis- charge from bankruptcy. 14 Some seven years later, after a dispute with Messrs. Webb and Van Houtte over appraisal fees, and after Mr. Simmons had been terminated from his em- ployment by the Simmons Group, he commenced this action against Mr. Hamber and his law firm for solicitor’s negligence. 15 The essence of the claim against Mr. Hamber and his law firm is found in paragraph 5 of the Statement of Claim: Prior to the bankruptcy of the plaintiff Simmons, the defendant Hamber or- ganized the legal services necessary in a transaction which had the net effect of denuding Simmons of any interest in Simmons Group and converting the indebtedness of Simmons Group to Anchordale from a debt position to ... non-voting, non-participating preference shares which were not retractable thereby emasculating the indebtedness apparently owed by Simmons Group to Anchordale. In acting the defendant Hamber and the defendant firm acted for all parties involved, Simmons and Anchordale not being independently represented and not being fully protected. 16 Mr. Hamber was the solicitor of both the Simmons Group and Anchordale for at least a couple of years prior to 1998. All of his instructions related to the two companies came from Mr. Webb, whom he understood to be the manager of the Simmons Group, and responsible for giving instructions to lawyers and ac- countants. The accountant for the Simmons Group, Richard Ferris, told Mr. Hamber that the Anchordale debt was a bogus debt that had no real substance and was causing difficulty for the company in obtaining financing. 17 Mr. Hamber was made aware that Mr. Simmons was contemplating a volun- tary assignment in bankruptcy. For this reason, he satisfied himself that the pro- posed transactions did not run afoul of the applicable bankruptcy legislation and the Fraudulent Conveyances Act, R.S.O. 1990, c. F.29. 196 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

18 Nil value was attributed to the shares of the Simmons Group on the advice of Mr. Webb and Mr. Ferris. This valuation was consistent with previous share transactions that Mr. Hamber acted on in 1996. 19 Mr. Hamber did not recommend to Mr. Simmons that he seek independent legal advice in respect of these transactions. When asked, “Why not?” he re- plied: A. I didn’t think it was necessary. He struck me as a sophisticated business person who had been through previous restructurings as I could see from my review of the various minute books. He seemed to indicate he knew what he was signing and it didn’t seem necessary. 20 In respect of whether Mr. Hamber advised Mr. Simmons that the share trans- action was necessary, the following exchange took place: Q. Did you advise Mr. Simmons that there was no need to transfer these common shares because they had no value? A. No, the parties had agreed to implement the transaction in a certain way, and I saw my role as fulfilling their request. 21 In respect of Anchordale, Mr. Hamber said that he dealt with Mr. Webb, whom he considered the designate of Mr. Simmons. Mr. Hamber was pressed in cross-examination on this issue: Q. Did you feel any obligation to advise Anchordale as a corporation directly, or Mr. Simmons as the sole controlling shareholder directly, that this transaction conceivably could have an adverse effect upon them? A. That would have been completely inconsistent with the pattern with which I was retained by Anchordale. I was instructed through Mr. Webb. 22 The trial judge dismissed the action against Mr. Hamber and his law firm and in doing so said: I find that these claims are entirely lacking in merit. Whether or not Hamber owed a duty of care to Simmons and Anchordale, he discharged his obliga- tions in a proper, prudent, responsible and highly professional manner. Hamber acted on the instructions that he was given by Webb, the representa- tive of the corporation who had the requisite authority. Hamber indepen- dently confirmed that his instruc-tions were not contrary to the law. He drafted the documents to effect the corporate transactions. At the meeting of September 14, 1998, he took pains to ensure that all present read and under- stood the content and consequences of what was to be signed. He reported in a prompt and responsible fashion to the designated representative of the corporation. Christian Hamber acted throughout with competence and professionalism. While no expert evidence was adduced on the standard of care in this con- Simmons v. Webb Robert P. Armstrong J.A. 197

text, I am hard pressed to imagine what else Mr. Hamber might have done in the proper discharge of his duties.

The Action Against Mr. Webb, Mr. Van Houtte, and the Simmons Group 23 Mr. Simmons and Anchordale commenced a separate action against Mr. Webb, Mr. Van Houtte and the Simmons Group to set aside the transactions. He included a claim for wrongful dismissal. The action was tried by the same trial judge and at the same time as the solicitor’s negligence action. The trial judge dismissed the claims to set aside the transactions but awarded significant dam- ages to Mr. Simmons for wrongful dismissal. 24 An appeal in respect of the damages awarded in the wrongful dismissal ac- tion was taken by the defendants in that action and was heard at the same time as this appeal. The wrongful dismissal appeal resulted in a modest reduction of the award of damages. See Simmons v. Webb, 2010 ONCA 584 (Ont. C.A.), re- leased September 13, 2010.

This Appeal 25 This appeal raises the following issues: (i) Did Mr. Hamber err in failing to recommend that the appellants receive independent legal advice? (ii) Did Mr. Hamber have a duty to discuss with Mr. Simmons and Anchordale alternatives to these trans-actions? (iii) If Mr. Hamber and his law firm breached their duty, is there any evi- dence of damages?

(i) Did Mr. Hamber err in failing to recommend that the appellants receive independent legal advice? 26 The appellants rely on subrule 2.04(3) of the Rules of Professional Conduct of the Law Society of Upper Canada which provides: A lawyer shall not act or continue to act in a matter when there is or is likely to be a conflicting interest unless, after disclosure adequate to make an in- formed decision, the client or prospective client consents. The commentary to subrule 2.04(3) contains the following statement: While subrule 2.04(3) does not require that a lawyer advise the client to ob- tain independent legal advice about the conflicting interest, in some cases, especially those in which the client is not sophisticated or is vulnerable, the lawyer should recommend such advice to ensure that the client’s consent is informed, genuine, and uncoerced. 27 The appellants also rely on the judgment of this court in Davey v. Woolley, Hames, Dale & Dingwall (1982), 35 O.R. (2d) 599 (Ont. C.A.). The case at bar 198 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

is very different from Davey. In Davey, the agreement in question was extremely complex and required a high degree of sophisticated legal advice. The vendor and purchaser in Davey were both clients of the law firm and a senior partner of the firm had a personal interest in the transaction. It is clear that Davey needed independent legal advice on the facts of that case. Wilson J.A., writing for the court in Davey at page 602, provided a useful statement of the relationship be- tween a solicitor and his/her client: A solicitor is in a fiduciary relationship to his client and must avoid situa- tions where he has or potentially may develop a conflict of interest: see Boardman et al. v. Phipps, [1967] 2 A.C. 46, [1966] 3 All E.R. 721 at 756. This is not confined to situations where his client’s interests and his own are in conflict although it of course covers that situation. It also precludes him from acting for two clients adverse in interest unless, having been fully in- formed of the conflict and understanding its implications, they have agreed in advance to his doing so. 28 I do not take from either subrule 2.04(3) of the Rules of Professional Con- duct or the judgment of this court in Davey that in the circumstances of this case, there was an obligation on Mr. Hamber to recommend to Mr. Simmons that he obtain independent legal advice. It might well have been preferable that he make such a recommendation out of an abundance of caution, but his failure to do so in these circumstances does not constitute a breach of his fiduciary duty or negligence. 29 While Mr. Simmons and Anchordale were giving up their shares in the Sim- mons Group, it was clearly something that Mr. Simmons wanted to do prior to his filing for bankruptcy. Mr. Hamber took his instructions from Mr. Webb (the designate of Mr. Simmons), which was consistent with his previous practice. He was made aware of the intention of Mr. Simmons to make an assignment in bankruptcy and satisfied himself that the transactions were not in conflict with the applicable bankruptcy legislation and the Fraudulent Conveyances Act. No issue has been taken either here or below with Mr. Hamber’s conclusions in that regard. 30 On their face, the transactions suggest that Mr. Simmons and Anchordale were adverse in interest to Messrs. Webb and Van Houtte. However, the posi- tion of Mr. Simmons and Anchordale must be viewed in the context presented to Mr. Hamber. Mr. Hamber accepted the advice of Mr. Webb that the shares in the Simmons Group had no value. He accepted the advice of both Mr. Webb and Mr. Ferris that the Anchordale debt had no substance. Mr. Hamber was entitled to rely on that information. There was nothing to suggest to Mr. Hamber that either Mr. Simmons or Anchordale were giving up anything of value or that Mr. Simmons did not fully appreciate what he was doing. Indeed, he was of the view that Mr. Simmons was a sophisticated businessman who had been through previ- Simmons v. Webb Robert P. Armstrong J.A. 199

ous share restructurings, who wanted these simple transactions to proceed and who understood the documents he was signing.

(ii) Did Mr. Hamber have a duty to discuss with Mr. Simmons and Anchordale alternatives to these transactions? 31 The appellants submit that Mr. Hamber should have advised them that the transactions were unnecessary since the underlying assets had no value. In para- graph 6 of the statement of claim, the appellants alleged: In the course of the transaction[s], alternative steps potentially available to the plaintiffs to restructure the holdings in such a way as to transfer the assets to persons in whom they had confidence for their protection were neither discussed, canvassed, nor proffered by the solicitor as a result of which the solicitor and the law firm failed in their duty to the plaintiffs. 32 While the submission on appeal changed slightly from the position taken in the statement of claim, both positions appear to be rooted in Mr. Simmons’s claim that there was an agreement to return the assets to him and Anchordale after his discharge from bankruptcy. As indicated above, Mr. Hamber was not aware of any such agreement and the trial judge found that there was none. If there had been such an agreement that may well have raised additional legal and ethical issues but that was not the case. 33 Mr. Hamber did not breach his duty to Mr. Simmons and Anchordale by failing to discuss alternatives to these transactions.

(iii) If Mr. Hamber and his law firm breached their duty, is there any evidence of damages? 34 The principal relief sought in this appeal is an award of damages in an amount to be assessed by way of a reference. 35 At the time these transactions were executed, the evidence is that the Sim- mons Group shares had no value and that the Anchordale debt was not one of substance. At the time of trial, there was no evidence led to suggest that the situation had changed in respect of any of the underlying assets involved in the transactions. 36 In my view, therefore, even if it could be said that Mr. Hamber breached some duty to Mr. Simmons and Anchordale — a proposition that I reject — the plaintiffs have failed to establish a basis upon which the court could order damages. 200 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

Disposition 37 For the above reasons, I would dismiss the appeal. I would award the re- spondents their costs of the appeal on a partial indemnity basis fixed in the amount of $12,500 including disbursements and applicable taxes. Appeal dismissed.

S.T. Goudge J.A.:

I agree

E.A. Cronk J.A.:

I agree Bennett v. Cunningham 201

[Indexed as: Bennett v. Cunningham] DAWN MARIE BENNETT (Plaintiff / Appellant) and KAREN ROSALEE CUNNINGHAM (Defendant / Respondent) Ontario Superior Court of Justice (Divisional Court) Hackland R.S.J., Harvison Young, Whitaker JJ. Heard: October 18, 2010 Judgment: January 19, 2011* Docket: Brampton DC-07-0026-ML, 2011 ONSC 28 William R. Gale, Nikolay Y. Chsherbinin for Plaintiff / Appellant Kenneth Alexander for Defendant / Respondent Labour and employment law –––– Employment law — Termination and dismissal — Termination of employment by employer — What constituting just cause — Mis- conduct — Insubordination –––– Plaintiff employee worked as associate in defendant employer’s law office — Employee was unsatisfied with employer’s efforts to address her concerns regarding office resources and time docket entries — Employee gave em- ployer strongly worded letter, suggesting employer was disorganized, incompetent, and dishonest and negligent with respect to docketing issues — Employer terminated em- ployee’s employment — Employee unsuccessfully brought action seeking damages for wrongful dismissal — Trial judge found employer had just cause to terminate employ- ment without notice — Trial judge held content and tone of letter was insolent and con- stituted serious misconduct — Employee appealed trial judge’s decision that employee was lawfully dismissed from her employment for just cause — Appeal allowed — Trial judgment varied — Employee was awarded damages in lieu of notice in amount of $17,065 — Trial judge committed overriding and palpable error in failing to discuss con- text in which he found letter was sufficiently insolent to justify summary dismissal — Letter was harshly worded, but was private communication between employee and em- ployer, and focused solely on office administrative issues — Letter, in light of contents and circumstances, did not make continuance of employment relationship impossible. Cases considered by Hackland R.S.J.: Dowling v. Ontario (Workplace Safety & Insurance Board) (2004), 2004 CarswellOnt 4923, 246 D.L.R. (4th) 65, 192 O.A.C. 126, 37 C.C.E.L. (3d) 182, 2005 C.L.L.C. 210-002, [2004] O.J. No. 4812 (Ont. C.A.) — considered Henry v. Foxco Ltd. (2004), 31 C.C.E.L. (3d) 72, (sub nom. Henry v. Fox Ford) 269 N.B.R. (2d) 63, (sub nom. Henry v. Fox Ford) 707 A.P.R. 63, 2005 C.L.L.C. 210- 036, 2004 NBCA 22, 2004 CarswellNB 127, 2004 CarswellNB 128, [2004] N.B.J. No. 109 (N.B. C.A.) — referred to

*Additional reasons at Bennett v. Cunningham (2011), 2011 ONSC 1364, 2011 Carswell- Ont 1633 (Ont. Div. Ct.). 202 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

McKinley v. BC Tel (2001), 9 C.C.E.L. (3d) 167, 200 D.L.R. (4th) 385, 91 B.C.L.R. (3d) 1, 2001 C.L.L.C. 210-027, [2001] 8 W.W.R. 199, 153 B.C.A.C. 161, 251 W.A.C. 161, 271 N.R. 16, [2001] 2 S.C.R. 161, 2001 SCC 38, 2001 CarswellBC 1335, 2001 CarswellBC 1336, [2001] S.C.J. No. 40, REJB 2001-24834 (S.C.C.) — considered UBS Securities Canada Inc. v. Sands Brothers Canada Ltd. (2009), 95 O.R. (3d) 93, 2009 CarswellOnt 2082, 2009 ONCA 328, 248 O.A.C. 146, 58 B.L.R. (4th) 60, [2009] O.J. No. 1606 (Ont. C.A.) — referred to Statutes considered: Courts of Justice Act, R.S.O. 1990, c. C.43 Generally — referred to

APPEAL by plaintiff employee from judgment reported at Bennett v. Cunningham (2006), 2006 C.L.L.C. 210-049, 55 C.C.E.L. (3d) 304, 2006 CarswellOnt 6909, [2006] O.T.C. 1033, [2006] O.J. No. 4446 (Ont. S.C.J.), finding that employee was lawfully dismissed from her employment for just cause by her employer.

Hackland R.S.J.: Overview 1 The issue on this appeal is whether the trial judge erred in his finding that the appellant Dawn Marie Bennett (Ms. Bennett) was lawfully dismissed from her employment for just cause by her employer, the respondent Karen Rosalee Cunningham (Ms. Cunningham). 2 Ms. Bennett worked for Ms. Cunningham, as a junior lawyer in her law of- fice for a 6 month period from July 8, 2002 to January 10, 2003. Ms. Bennett was summarily dismissed primarily because of a strongly worded letter dated December 21, 2002 which she wrote to Ms. Cunningham. The letter complained of certain administrative problems in her job and contained a sentence which read “As my income depends solely on my billable hours docketed and col- lected, the monetary gain to you is both dishonest and negligent”. 3 Before this Court there is no challenge to the trial judge’s findings that (1) Ms. Bennett was an employee and not an independent contractor; (2) that the contract of employment accordingly contained an implied obligation to termi- nate only upon reasonable notice, in the absence of just cause and (3) that the reasonable notice period was 4 months. The parties also do not challenge the trial judge’s finding that the damages incurred by Ms. Bennett referable to the notice period, net of mitigating income, were $17,065.00 and in addition she was owed income of $18,545.73 for unpaid fees billed and collected for the pe- riod prior to her termination. Bennett v. Cunningham Hackland R.S.J. 203

The Facts 4 Ms. Bennett received her call to the bar in 2001. Prior to working for Ms. Cunningham, her entire working experience as a lawyer consisted of a 9 month contract to work in a law office to replace a lawyer on maternity leave. Ms. Bennett had been out of work for 5 months before she secured the position in Ms. Cunningham’s office. 5 The trial judge concisely summarized the events leading up to the point at which Ms. Bennett delivered the offending letter to her employer, as follows: 3 [Ms. Bennett] applied to Ms. Cunningham for the position of junior associate lawyer to practice in civil litigation. Ms. Cunningham in- terviewed her on July 4, 2002, and offered her the position. 4 They discussed two schemes of remuneration. On July 8, 2002, Ms. Bennett accepted the offer to work and elected to be remunerated under the first scheme. Ms. Bennett was to be paid 50% of all fees billed and collected. She would receive advances on commission at the rate of $38,000 per year. Ms. Bennett would be responsible for the payment of standard employee deductions, her Law Society fees and liability insurance premiums. 5 Ms. Bennett began work on July 1, 2002. During her first morning of work, Ms. Cunningham presented her with a written agreement specifying the terms of the position. The written agreement con- tained a number of provisions that had not been discussed during either the interview or the subsequent telephone conversation when Ms. Bennett accepted the position. Ms. Bennett signed the agreement. 6 Ms. Bennett immediately assumed responsibility for a number of files, the majority of which were family law cases, an area in which she had little experience. The office was busy. Ms. Bennett worked long hours from Monday to Friday, and often on weekends. She be- came concerned that Ms. Cunningham was not providing her with the tools she required to do her work. Her concerns focused on the paucity of office resources available to her and the inadequacy of the technology in place. 7 Ms. Bennett prepared a proposed business plan to address those concerns. She met with Ms. Cunningham in mid-August 2002 to dis- cuss them. In addition to office resource and technology issues, Ms. Bennett expressed concern that she had been asked to sign a written agreement relating to her position on such short notice, particularly when there had been no mention of a written agreement during the interview or at the time of the job offer. 8 In response Ms. Bennett’s concerns, Ms. Cunningham had the staff attend at the office on a Saturday after her meeting with Ms. Ben- nett. They identified and listed the files assigned to Ms. Bennett. Ms. 204 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

Cunningham invested in voice mail and software known as Amicus Attorney. She also adopted Ms. Bennett’s suggestion that each file contain a sub-folder for lawyer’s notes. 9 Prior to the introduction of the Amicus Attorney software, Ms. Ben- nett had submitted handwritten dockets for the time spent on all files she worked on. The receptionist was responsible for entering the dockets into the office computer for file and billing purposes. The receptionist retired suddenly about August 22, 2002, and was not re- placed until September 1, 2002. 10 Ms. Cunningham met with Ms. Bennett on the evening of Novem- ber 5, 2002. Ms. Bennett expressed concern that, while her share of fees billed was about $26,500, only $2,650 had been collected. She was also concerned about whether all her time dockets had been en- tered. A subsequent comparison of the handwritten documents with the computer records for her files confirmed that 42.8 hours of her docketed time had not been entered in the computer. 11 The two lawyers met again on December 16, 2002. Ms. Bennett remained concerned. The gap between fees billed and collected had increased; after five months, the advances paid to Ms. Bennett ex- ceeded her share of fees collected by about $10,000. She asked Ms. Cunningham for a legal assistant. Ms. Cunningham told her that if she wanted one, she would have to bear the cost from her commis- sion income. 12 Prior to this meeting, Ms. Bennett had pulled some accounts ren- dered and discovered a number of instances where time she had docketed had been credited to Ms. Cunningham. When she learned of this, Ms. Cunningham told Ms. Bennett that these errors would be corrected upon receipt of copies of the accounts where such errors had occurred. 13 Ms. Bennett met with Ms. Cunningham on Saturday morning, De- cember 21, 2002, just prior to Ms. Cunningham leaving on a Christ- mas vacation. She handed Ms. Cunningham a four-page letter dated December 21, 2002, which documented nine areas of concern. She also sent her a copy by registered mail. In the letter, Ms. Bennett made a number of statements that Ms. Cunningham claimed were untrue. Under the heading “Docketing System”, Ms. Bennett ac- cused Ms. Cunningham of being dishonest and negligent. The letter contained other comments suggesting that Ms. Cunningham was dis- organized and incompetent. 6 Much of the trial and of the trial judge’s reasons were directed to the issue of whether Ms. Bennett was an employee or an independent contractor. As noted, Ms. Bennett was successful on this issue, the court holding that she was either an employee or in an intermediate category and in any event entitled to reasona- ble notice of termination, in the absence of just cause for dismissal. Bennett v. Cunningham Hackland R.S.J. 205

7 On the issue of cause for dismissal, the trial judge held that there was just cause based on Ms. Bennett’s December 21, 2002 letter to Ms. Cunningham, which suggested that Ms. Cunningham was, in the trial judge’s words, “disorga- nized, incompetent and dishonest with respect to docketing issues”. 8 Before this Court, Ms. Bennett submits that the trial judge erred in finding just cause for dismissal in view of the absence of any discussion with Ms. Ben- nett following receipt of the letter, the lack of any prior discipline, and, most importantly, the failure of the trial judge to apply the contextual approach to the determination of whether just cause existed, as required by the Supreme Court of Canada in McKinley v. BC Tel, [2001] 2 S.C.R. 161 (S.C.C.) and by the On- tario Court of Appeal in Dowling v. Ontario (Workplace Safety & Insurance Board) (2004), 246 D.L.R. (4th) 65 (Ont. C.A.). 9 I agree with the appellant Ms. Bennett’s submission that there was an ab- sence of the required contextual analysis concerning the cause for dismissal in this case and that such an analysis would have led to the finding that her letter of December 21, 2002 did not warrant dismissal for cause. I would allow the ap- peal for the reasons explained below.

Analysis 10 The first issue is the applicable standard of review of the trial judge’s deci- sion. I accept the submission of the respondent Ms. Cunningham that a finding of just cause for dismissal is primarily a determination of fact, or at best, a ques- tion of mixed fact and law. In either case, it is well settled that a trial judge’s determination of such issues is entitled to substantial deference and indeed an appellate court may revise the decision made at first instance only in the event of an overriding and palpable error, see UBS Securities Canada Inc. v. Sands Brothers Canada Ltd. (2009), 95 O.R. (3d) 93 (Ont. C.A.) at paras. 57 and 61. 11 I am of the opinion that a failure to apply a contextual approach to a determi- nation of just cause for dismissal, as mandated by the Supreme Court of Canada in McIntyre, is an error of principle and constitutes an overriding and palpable error justifying appellate intervention, see Henry v. Foxco Ltd. (2004), 31 C.C.E.L. (3d) 72 (N.B. C.A.). 12 Care must be taken however, not to embark on a re-evaluation of the evi- dence or a reassessment of issues of credibility. With these restrictions in mind, I review the trial judge’s findings on the issue of just cause. 13 The trial judge correctly stated that the onus is on an employer to justify the summary dismissal of an employee. He found that the incident that gave rise to 206 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

the summary dismissal was Ms. Bennett’s 4 page letter to Ms. Cunningham dated December 21, 2002. He characterized the letter as follows: The overall tone of the letter was anything but courteous. It was critical. It was accusatory. It was disrespectful. The letter suggested that Ms. Cunning- ham was disorganized, incompetent, dishonest and negligent. 14 In argument of this appeal, respondent’s counsel particularly emphasized the “dishonest and negligent” reference in paragraph 3 of the December 21, 2002 letter, which I quote: 3. DOCKETING SYSTEM – Many of the dockets that were entered by hand were credited to your dockets instead of my dockets. There has been no attempt on your part to reconcile these problems despite my repeated and numerous requests. As my income depends solely on my billable hours docketed and collected, the monetary gain to you is both dishonest and negligent. I have no control over the dock- eting system. It is your system. As a result of your flawed docketing system you have gained income that should be attributed to me. I need an accurate reconciliation of the docketing system to reflect my dockets. (my underlining) 15 While the trial judge did not focus specifically on the “dishonest and negli- gent” reference in the 4 page letter, he concluded that the letter constituted “in- solence”. The trial judge’s explanation of “insolence” was the following: 34 In an employment relationship context, insolence has been de- scribed as derisive, contemptuous or abusive language or conduct directed by an employee at his/her employer. Generally, two or more instances of insolence are required to justify summary dismissal. However, a single incident of insolence will justify summary dismis- sal if the employer and employee are no longer capable of maintain- ing a working relationship. And at paragraph 43 the trial judge stated: 43 I find that the contents and tone of the letter constituted serious mis- conduct on the part of Ms. Bennett. The insolence was not reconcila- ble with maintaining the employment relationship. 16 The trial judge found that the letter was highly critical of the operations in the law office and of Ms. Cunningham’s integrity. He stated that the comments and accusations in the letter undermined the confidence Ms. Cunningham had in Ms. Bennett and destroyed the employment relationship. 17 On my review of the letter, the ‘dishonest and negligent’ reference, which appears only once in this lengthy letter, is the only expression which could rea- sonably be considered insolent by the trial judge’s definition. The balance of the 4 page letter was in part highly critical, but not insolent. Ms. Bennett did charac- terize some aspects of the office problems as “unacceptable” which is a strong Bennett v. Cunningham Hackland R.S.J. 207

but hardly an offensive term. On the other hand, she used the words “please” or “kindly” to preface each one of her requests. 18 The trial judge did not refer to the governing decisions in McKinley or Dow- ling and no reference is made to the need for a contextual approach to the issue of termination for cause. 19 In McKinley, the Supreme Court of Canada prescribed an analytical frame- work and a two-step test, termed a “contextual approach”, for a trial court to follow when deciding whether an employer had just cause to dismiss an em- ployee “owing in large measure, to the court’s deep concern over the power imbalance in the employment relationship and the unique nature of the employ- ment contract”. The importance of this balance is better understood by consider- ing the sense of identity and self-worth individuals frequently derive from their employment. By the “contextual approach” the Supreme Court of Canada re- quires a trial court to consider not just whether an employee may be found guilty of misconduct giving rise to just cause dismissal, but also whether the nature and the degree of the misconduct warranted the employee’s summary dismissal. 20 Since McKinley, the courts are required to apply the contextual approach to all just cause cases and not just those involving allegations of dishonesty, as was alleged in McKinley. In Dowling v. Ontario (Workplace Safety & Insurance Board), the court held that the application of the contextual standard required: (a) determining the nature and extent of the misconduct; (b) considering the surrounding circumstances; and (c) deciding whether dismissal is warranted, i.e. proportional. 21 In fairness to the trial judge, he looked at the context of this letter in one important respect. After reviewing the evidence and concluding that Ms. Ben- nett’s administrative complaints in her letter were overstated or unjustified to a considerable extent, he stated (at paragraph 41), “The relationship between law- yers practicing in the same law office is fundamentally based on confidence, respect and trust”. 22 I agree with the trial judge’s characterization of the professional environ- ment required in a law office. Insolence or a lack of civility in general has the tendency to undermine professional relationships. It is this important message which the Law Society, the Advocates Society and other legal organizations in this jurisdiction have attempted to promote. On the other hand, when the issue as here is dismissal for cause, a lawyer working in a law office or other profes- sional environment is entitled to have her conduct evaluated in light of the full context of the relevant circumstances. As in other employment relationships, there remains a power imbalance and there is a strong policy interest in encour- aging open and frank discussion between employer and employee of workplace issues. 208 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

23 Apart from the trial judge’s assessment of the letter and his observation con- cerning the law office environment, there was no discussion of the context in which he found the letter to constitute sufficient insolence to justify summary dismissal. Significantly, he failed to give any weight to the closing sentence of Ms. Bennett’s letter, which said: I would like to work together with you to resolve these issues. Kindly contact me so that we may work together to make this arrangement a successful one for both of us. 24 A careful contextual analysis of this case was required. As to the letter in question, while harshly worded, it was a private written communication between employee and employer focused solely on office administrative issues. It was not disclosed to third parties, nor was it intended to be. On the evidence the employer was not embarrassed, nor caused financial loss. The employer’s ability to manage and command the respect of staff or clients was not compromised. 25 The content of this lengthy letter was important. It addressed administrative issues relating to Ms. Bennett’s docketing requirements and compensation ar- rangements, which were matters of legitimate and pressing importance to her. The points raised were follow ups to 2 previous office meetings and discussions. The paragraph headings in the letter illustrate the legitimate subject matter of the issues Ms. Bennett raised. They were: 1. EMPLOYMENT CONTRACT 2. CLIENT FILE RESPONSIBILITY 3. DOCKETING SYSTEM 4. BILLING SYSTEM 5. CLIENT ACCOUNTS 6. LEGAL ASSISTANT 7. FILING SYSTEM 8. REMUNERATION 9. PAYMENT OF REMUNERATION 26 Ms. Bennett was, to the employer’s knowledge, struggling in her practice. On the existing accounting data Ms. Bennett perceived herself to be getting into a serious financial situation given her lack of collected billings in relation to the commission draw for which she was accountable and in relation to pending Law Society and insurance premiums, soon to be due and payable by her. There had been real and legitimate technology and accounting problems in the office which Ms. Cunningham had recognized, but as the trial judge found, significant steps to remedy these problems had been taken. Ms. Bennett honestly but, on the trial judge’s analysis, mistakenly felt these to be serious continuing problems that compromised her professional practice. Significantly, the trial judge did not Bennett v. Cunningham Hackland R.S.J. 209

make any finding of dishonesty or bad faith against Ms. Bennett on these or any other issues. 27 Further, as the trial judge noted, Ms. Bennett was working very long hours and lacked experience in family law. He stated that Ms. Bennett “professed frus- tration and worry about her ability to pay pending bills”, although he did not find this to be objectively reasonable nor an excuse for writing the letter. The trial judge did not explain why this single incident or the lack of any prior or progressive discipline should not mitigate the situation. The trial judge accepted Ms. Cunningham’s conclusion that after considering the implications of the let- ter, she could no longer have a working relationship with Ms. Bennett. 28 Respectfully however, the question was not whether Ms. Cunningham’s con- clusion was reasonable, because as employer she had the right to terminate the employment of Ms. Bennett with reasonable advance notice or severance pay in lieu of notice, if she had lost confidence in her. The question was whether this letter, in light of the contents as a whole and considered in the light of all the circumstances, made the continuance of the employment relationship impossible or destroyed that relationship. In my opinion, this should have been answered in the negative in all of the circumstances and in the spirit of Ms. Bennett’s con- cluding statement in the letter that she wished to “resolve these issues” in order to achieve a successful working relationship. 29 Ms. Bennett also advances an alternative argument, which is that if her letter amounted to just cause for dismissal, such cause was condoned by Ms. Cunning- ham because she was permitted to continue to work at the law office and serve the firm’s clients for a period of 11 working days following the delivery of the letter. I do not accept this submission. The question of whether misconduct has been condoned so as to be no longer capable of constituting just cause for dis- missal is a question of fact. In addition, this argument was not commented on by the trial judge. I see no overriding or palpable error in the trial judge not giving effect to this argument. In any event, the timing of the delivery of the letter, Ms. Cunningham’s departure on vacation and the firm’s continuing responsibility to its clients, adequately explain why Ms. Cunningham allowed Ms. Bennett to re- main for these additional working days after she received the offending letter. I am of the opinion that there was no condonation here. 30 However, I would view Ms. Bennett’s continuation on staff for this 11 day period, and discharging professional services to the firm’s clients, as an addi- tional contextual factor supporting the conclusion that Ms. Bennett’s intemper- ate letter did not create a situation in which the trust required in this employment context should be viewed as irreparably destroyed. 31 In summary, I am of the opinion that the appeal must be allowed and the trial judgment varied to allow the appellant Ms. Bennett’s claim for damages in lieu 210 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

of reasonable notice of termination, in the sum of $17,065, together with pre- judgment interest pursuant to the Courts of Justice Act. 32 If the appellant wishes to seek costs of this appeal, she may provide concise written submissions to this Court within 30 days of the release of these reasons. The respondent may respond within 30 days of the receipt of the appellant’s submission. Appeal allowed; trial judgment varied.

[Indexed as: Vilven v. Air Canada] Air Canada Pilots Association (Applicant) and Robert Neil Kelly, George Vilven, Canadian Human Rights Commission, and Air Canada (Respondents) Air Canada (Applicant) and Robert Neil Kelly, George Vilven, Canadian Human Rights Commission, and Air Canada Pilots Association (Respondents) Federal Court Anne Mactavish J. Heard: November 22-24, 2010 Judgment: February 3, 2011 Docket: T-1615-09, T-1606-09, 2011 FC 120 Mr. Bruce Laughton for Applicant, Air Canada Pilots Association Mr. Raymond D. Hall, Mr. David Baker for Respondents, Robert Neil Kelly, George Vilven Mr. Daniel Poulin for Respondent, Canadian Human Rights Commission Mr. Gavin MacKenzie, Ms Christianna Scott for Respondent, Air Canada Judges and courts –––– Stare decisis — Decisions of Supreme Court of Canada — Effect on lower courts –––– Paragraph 15(1)(c) of Canadian Human Rights Act allows employer to terminate individual’s employment if that person has reached “normal age of retirement” for those working in similar positions — Complainant pilots were forced to retire at 60 in accordance with mandatory retirement provisions in pension plan and col- lective agreement — Canadian Human Rights Tribunal dismissed complaints, finding that 60 was normal age of retirement for persons working in similar positions, and that s. 15(1)(c) of Act did not contravene s. 15(1) of Canadian Charter of Rights and Free- doms — On judicial review, court held s. 15(1)(c) of Act violated s. 15(1) of Charter, and remitted matter to tribunal for determination regarding s. 1 of Charter — Tribunal held that s. 15(1)(c) of Act was not saved under s. 1 of Charter, and that it was not established Vilven v. Air Canada 211 that retirement of pilots at 60 constituted bona fide occupational requirement — Union and employer brought applications for judicial review — Union’s application dismissed and employer’s granted in part — Tribunal’s decision on Charter issue was correct — There were four reasons why certain Supreme Court of Canada decision regarding mandatory retirement, and its companion cases, did not dictate result of s. 1 Charter anal- ysis in this case — First reason was significant differences between legislative provisions in issue — Second was fact that Supreme Court of Canada decision in issue did not pur- port to be final word on subject of mandatory retirement for all time — Third was differ- ences in evidentiary records, and fourth was public policy developments that occurred since that Supreme Court of Canada decision. Human rights –––– Constitutional issues — Application of Charter –––– Paragraph 15(1)(c) of Canadian Human Rights Act allows employer to terminate individual’s em- ployment if that person has reached “normal age of retirement” for those working in similar positions — Complainant pilots were forced to retire at 60 in accordance with mandatory retirement provisions in pension plan and collective agreement — Canadian Human Rights Tribunal dismissed complaints, finding that 60 was normal age of retire- ment for persons working in similar positions, and that s. 15(1)(c) of Act did not contra- vene s. 15(1) of Canadian Charter of Rights and Freedoms — On judicial review, court held s. 15(1)(c) of Act violated s. 15(1) of Charter, and remitted matter to tribunal for determination regarding s. 1 of Charter — Tribunal held, inter alia, that s. 15(1)(c) of Act was not saved under s. 1 of Charter — Union and employer brought applications for judi- cial review — Union’s application dismissed and employer’s granted in part on other grounds — Tribunal’s decision on Charter issue was correct — To extent that s. 15(1)(c) of Act eliminated legal barrier to mandatory retirement, it was rationally connected to legislative objective, which was still pressing and substantial, of preserving socially de- sirable employment regimes — Tribunal was correct in finding union and employer did not establish that older workers’ Charter rights were minimally impaired by s. 15(1)(c) of Act — Tribunal was correct in finding that benefits that accrued from s. 15(1)(c) of Act were outweighed by its deleterious effects, when measured by values underlying Charter. Human rights –––– What constitutes discrimination — Age — Mandatory retire- ment — Airline pilots –––– Paragraph 15(1)(c) of Canadian Human Rights Act allows employer to terminate individual’s employment if that person has reached “normal age of retirement” for those working in similar positions — Complainant pilots were forced to retire at 60 in accordance with mandatory retirement provisions in pension plan and col- lective agreement — Canadian Human Rights Tribunal dismissed complaints, finding that 60 was normal age of retirement for persons working in similar positions, and that s. 15(1)(c) of Act did not contravene s. 15(1) of Canadian Charter of Rights and Free- doms — On judicial review, court held s. 15(1)(c) of Act violated s. 15(1) of Charter, and remitted matter to tribunal for determination regarding s. 1 of Charter — Tribunal held s. 15(1)(c) of Act was not saved under s. 1 of Charter, and that it was not established that retirement at 60 was bona fide occupational requirement (BFOR) — Union and employer brought applications for judicial review — Union’s application dismissed and employer’s granted in part — Tribunal’s decision on Charter issue was correct — To extent that s. 15(1)(c) of Act eliminated legal barrier to mandatory retirement, it was rationally con- nected to legislative objective, still pressing and substantial, of preserving socially desira- 212 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d) ble employment regimes — Tribunal correctly found union and employer did not estab- lish that older workers’ Charter rights were minimally impaired by s. 15(1)(c) of Act — Tribunal correctly found that benefits that accrued from s. 15(1)(c) of Act were out- weighed by its deleterious effects, when measured by values underlying Charter — There were number of errors in tribunal’s BFOR analysis as it related to post-November 2006 period, rendering this aspect of decision unreasonable. Labour and employment law –––– Labour law — Discipline and termination — Re- tirement — Age discrimination –––– Paragraph 15(1)(c) of Canadian Human Rights Act allows employer to terminate individual’s employment if that person has reached “normal age of retirement” for those working in similar positions — Complainant pilots were forced to retire at 60 in accordance with mandatory retirement provisions in pension plan and collective agreement — Canadian Human Rights Tribunal dismissed complaints, finding that 60 was normal age of retirement for persons working in similar positions, and that s. 15(1)(c) of Act did not contravene s. 15(1) of Canadian Charter of Rights and Freedoms — On judicial review, court held s. 15(1)(c) of Act violated s. 15(1) of Charter, and remitted matter to tribunal for determination regarding s. 1 of Charter — Tribunal held s. 15(1)(c) of Act was not saved under s. 1 of Charter, and that it was not established that retirement at 60 was bona fide occupational requirement (BFOR) — Union and em- ployer brought applications for judicial review — Union’s application dismissed and em- ployer’s granted in part — Tribunal’s decision on Charter issue was correct — To extent that s. 15(1)(c) of Act eliminated legal barrier to mandatory retirement, it was rationally connected to legislative objective, still pressing and substantial, of preserving socially desirable employment regimes — Tribunal correctly found union and employer did not establish that older workers’ Charter rights were minimally impaired by s. 15(1)(c) of Act — Tribunal correctly found that benefits that accrued from s. 15(1)(c) of Act were outweighed by its deleterious effects, when measured by values underlying Charter — There were number of errors in tribunal’s BFOR analysis as it related to post-November 2006 period, rendering this aspect of decision unreasonable. Human rights –––– Statutory exemptions — Occupational requirement –––– Com- plainant pilots were forced to retire at 60 in accordance with mandatory retirement provi- sions in pension plan and collective agreement — Canadian Human Rights Tribunal dis- missed complaints, finding 60 was “normal age of retirement” for persons working in similar positions, as contemplated by s. 15(1)(c) of Canadian Human Rights Act, and s. 15(1)(c) of Act did not contravene s. 15(1) of Canadian Charter of Rights and Free- doms — On judicial review, court held s. 15(1)(c) of Act violated s. 15(1) of Charter, and remitted matter to tribunal for determination regarding s. 1 of Charter — Tribunal held s. 15(1)(c) of Act was not saved under s. 1 of Charter, and that it was not established retire- ment at 60 was bona fide occupational requirement (BFOR) — Union and employer brought applications for judicial review — Union’s application dismissed and employer’s granted in part — With respect to BFOR, interpretation of s. 15(2) of Act, in which tribu- nal held that in assessing whether employer could accommodate pilots over age 60 it could look at matters other than health, safety and cost, was unreasonable — Tribunal’s finding with respect to BFOR issue as it related to period before November 2006 was reasonable — There were number of errors in tribunal’s BFOR analysis as it related to period after November 2006, when International Civil Aviation Organization standards Vilven v. Air Canada 213 were amended — Tribunal’s BFOR analysis was not reasonable as it related to em- ployer’s ability to accommodate pilots over age of 60 after November 2006 — As to tri- bunal’s statement that complainants conceded first two elements of relevant test were satisfied, no such concession was apparently made by complainants or interested party. Constitutional law –––– Charter of Rights and Freedoms — Nature of remedies under Charter — General principles –––– Complainant pilots were forced to retire at 60 in accordance with mandatory retirement provisions in pension plan and collective agreement — Canadian Human Rights Tribunal dismissed complaints, finding 60 was “normal age of retirement” for persons working in similar positions, as contemplated by s. 15(1)(c) of Canadian Human Rights Act, and that s. 15(1)(c) of Act did not contravene s. 15(1) of Canadian Charter of Rights and Freedoms — On judicial review, court held s. 15(1)(c) of Act violated s. 15(1) of Charter, and remitted matter to tribunal for determina- tion regarding s. 1 of Charter — Tribunal held, inter alia, s. 15(1)(c) of Act was not saved under s. 1 of Charter — Union and employer brought applications for judicial review — Union’s application dismissed and employer’s granted in part — Tribunal’s decision on Charter issue was correct — Declaration sought in last-minute motion by complainants that s. 15(1)(c) of Act was inconsistent with Charter and of no force and effect by opera- tion of s. 52(1) of Charter was not granted — Assuming such constitutional remedy could ever be granted to responding party on application for judicial review such as this, it was not appropriate here — What complainants were really trying to do was to mount collat- eral attack on remedial decision not before court — Attorneys general could not reasona- bly have anticipated complainants would be seeking general declaration of invalidity with respect to s. 15(1)(c) of Act — General declaration of invalidity could potentially have widespread implications for many federally-regulated workplaces — Had attorneys gen- eral been aware such relief was being sought by complainants, it could have affected their decisions whether to participate in proceeding. Statutes –––– Interpretation — Construction — Rules — Implied exclusion of one by explicit mention of another (expressio unius est exclusio alterius). Statutes –––– Interpretation — Construction — Miscellaneous. Cases considered by Anne Mactavish J.: Assn. of Justices of Peace of Ontario v. Ontario (Attorney General) (2008), 2008 Cars- wellOnt 3190, 67 C.C.E.L. (3d) 56, 292 D.L.R. (4th) 623, 2009 C.L.L.C. 230-008, 92 O.R. (3d) 16, 173 C.R.R. (2d) 1, [2008] O.J. No. 2131 (Ont. S.C.J.) — considered Bedford v. Canada (Attorney General) (2010), 2010 CarswellOnt 7249, 2010 ONSC 4264, 102 O.R. (3d) 321, 262 C.C.C. (3d) 129, 217 C.R.R. (2d) 1, [2010] O.J. No. 4057 (Ont. S.C.J.) — considered British Columbia (Public Service Employee Relations Commission) v. B.C.G.E.U. (1999), (sub nom. Public Service Employee Relations Commission (B.C.) v. British Columbia Government & Service Employees’ Union) 127 B.C.A.C. 161, (sub nom. Public Service Employee Relations Commission (B.C.) v. British Columbia Government & Service Employees’ Union) 207 W.A.C. 161, 35 C.H.R.R. D/257, 46 C.C.E.L. (2d) 206, (sub nom. British Columbia (Public Service Employee Relations Commission) v. BCGSEU) [1999] 3 S.C.R. 3, (sub nom. British Columbia (Public Service Employee Relations Commission) v. B.C.G.S.E.U.) 68 C.R.R. (2d) 1, 7 B.H.R.C. 437, (sub nom. 214 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

Public Service Employee Relations Commission (B.C.) v. British Columbia Government & Service Employees’ Union) 244 N.R. 145, (sub nom. British Columbia Government & Service Employees’ Union v. Public Service Employee Relations Commission) 99 C.L.L.C. 230-028, [1999] 10 W.W.R. 1, 66 B.C.L.R. (3d) 253, (sub nom. British Columbia (Public Service Employee Relations Commission) v. B.C.G.S.E.U.) 176 D.L.R. (4th) 1, 1999 CarswellBC 1907, 1999 CarswellBC 1908, [1999] S.C.J. No. 46 (S.C.C.) — followed British Columbia (Superintendent of Motor Vehicles) v. British Columbia (Council of Human Rights) (1999), 1999 CarswellBC 2730, 1999 CarswellBC 2731, [2000] 1 W.W.R. 565, 131 B.C.A.C. 280, 214 W.A.C. 280, [1999] 3 S.C.R. 868, 70 B.C.L.R. (3d) 215, 47 M.V.R. (3d) 167, 249 N.R. 45, 181 D.L.R. (4th) 385, 36 C.H.R.R. D/129, [1999] S.C.J. No. 73 (S.C.C.) — considered Brossard (Ville) c. Qu´ebec (Commission des droits de la personne) (1988), [1988] 2 S.C.R. 279, 1988 CarswellQue 154, 1988 CarswellQue 154F, 88 C.L.L.C. 17,031, 18 Q.A.C. 164, 53 D.L.R. (4th) 609, 88 N.R. 321, 10 C.H.R.R. D/5515, EYB 1988- 67869, [1988] S.C.J. No. 79 (S.C.C.) — referred to Brown v. Canada (National Capital Commission) (2009), 2009 CarswellNat 2931, 2009 FCA 273, 2009 CarswellNat 4968, 2009 CAF 273, (sub nom. National Capital Commission v. Brown) 394 N.R. 348, [2009] F.C.J. No. 1196 (F.C.A.) — referred to Canada (Human Rights Commission) v. Taylor (1990), 75 D.L.R. (4th) 577, [1990] 3 S.C.R. 892, 3 C.R.R. (2d) 116, (sub nom. Taylor v. Canada (Human Rights Commis- sion)) 117 N.R. 191, 13 C.H.R.R. D/435, 1990 CarswellNat 742, 1990 CarswellNat 1030, [1990] S.C.J. No. 129, EYB 1990-67250 (S.C.C.) — considered Celgene Corp. v. Canada (Attorney General) (2011), 2011 CarswellNat 34, 2011 Car- swellNat 35, 2011 SCC 1, 89 C.P.R. (4th) 1 (S.C.C.) — referred to Central Alberta Dairy Pool v. Alberta (Human Rights Commission) (1990), 33 C.C.E.L. 1, [1990] 2 S.C.R. 489, 113 N.R. 161, 12 C.H.R.R. D/417, [1990] 6 W.W.R. 193, 90 C.L.L.C. 17,025, 76 Alta. L.R. (2d) 97, 72 D.L.R. (4th) 417, 111 A.R. 241, 1990 CarswellAlta 149, 1990 CarswellAlta 656, EYB 1990-66937, [1990] S.C.J. No. 80 (S.C.C.) — considered Cepeda-Gutierrez v. Canada (Minister of Citizenship & Immigration) (1998), 157 F.T.R. 35, 1998 CarswellNat 1981, [1998] A.C.F. No. 1425, [1998] F.C.J. No. 1425 (Fed. T.D.) — referred to CKY-TV v. C.E.P., Local 816 (2008), 2008 CarswellMan 313, 175 L.A.C. (4th) 29, [2008] L.V.I. 3782-2, [2008] C.L.A.D. No. 92 (Man. Arb. Bd.) — considered CKY-TV v. C.E.P., Local 816 (2009), 246 Man. R. (2d) 100, 2009 CarswellMan 468, 2009 MBQB 252, 2009 C.L.L.C. 230-036, [2010] 1 W.W.R. 493, 187 L.A.C. (4th) 257, [2009] M.J. No. 336, [1986] S.C.J. No. 70 (Man. Q.B.) — referred to Consolidated Fastfrate Inc. v. Western Canada Council of Teamsters (2009), 203 C.R.R. (2d) 247, [2009] Alta. L.R.B.R. 396, [2009] 3 S.C.R. 407, 2009 CarswellAlta 1891, 2009 CarswellAlta 1892, 2009 SCC 53, 470 W.A.C. 50, 469 A.R. 50, 14 Alta. L.R. (5th) 203, [2010] 1 W.W.R. 1, D.T.E. 2009T-847, 94 Admin. L.R. (4th) 1, 2010 C.L.L.C. 220-001, 395 N.R. 276, 313 D.L.R. (4th) 285, 81 C.C.E.L. (3d) 163 (S.C.C.) — referred to Cooper v. Canada (Human Rights Commission) (1996), 1996 CarswellNat 1693, 1996 CarswellNat 1694, 40 C.R.R. (2d) 81, (sub nom. Bell v. Canada (Human Rights Vilven v. Air Canada 215

Commission)) 140 D.L.R. (4th) 193, [1996] 3 S.C.R. 854, 204 N.R. 1, 27 C.H.R.R. D/173, 43 Admin. L.R. (2d) 155, 26 C.C.E.L. (2d) 1, EYB 1996-67303, [1996] S.C.J. No. 115 (S.C.C.) — considered Douglas/Kwantlen Faculty Assn. v. Douglas College (1990), (sub nom. Douglas College v. Douglas/Kwantlen Faculty Assn.) 52 B.C.L.R. (2d) 68, (sub nom. Douglas College v. Douglas/Kwantlen Faculty Assn.) 77 D.L.R. (4th) 94, (sub nom. Douglas College v. Douglas/Kwantlen Faculty Assn.) 13 C.H.R.R. D/403, (sub nom. Douglas College v. Douglas/Kwantlen Faculty Assn.) 50 Admin. L.R. 69, (sub nom. Douglas College v. Douglas/Kwantlen Faculty Assn.) 2 C.R.R. (2d) 157, (sub nom. Douglas College v. Douglas/Kwantlen Faculty Assn.) 91 C.L.L.C. 17,002, (sub nom. Douglas College v. Douglas/Kwantlen Faculty Assn.) [1990] 3 S.C.R. 570, (sub nom. Douglas College v. Douglas/Kwantlen Faculty Assn.) [1991] 1 W.W.R. 643, (sub nom. Douglas College v. Douglas/Kwantlen Faculty Assn.) 118 N.R. 340, 1990 CarswellBC 278, 1990 Car- swellBC 766, [1990] S.C.J. No. 124, EYB 1990-67026 (S.C.C.) — distinguished Edwards v. Canada (Attorney General) (1929), (sub nom. Reference re s. 24 of the Constitution Act, 1867) [1929] 3 W.W.R. 479, 1929 CarswellNat 2, [1930] A.C. 124, [1930] 1 D.L.R. 98 (Canada P.C.) — referred to Eldridge v. British Columbia (Attorney General) (1997), 151 D.L.R. (4th) 577, 1997 Car- swellBC 1939, 1997 CarswellBC 1940, [1998] 1 W.W.R. 50, 218 N.R. 161, 96 B.C.A.C. 81, 155 W.A.C. 81, 46 C.R.R. (2d) 189, 3 B.H.R.C. 137, [1997] 3 S.C.R. 624, 38 B.C.L.R. (3d) 1, [1997] S.C.J. No. 86 (S.C.C.) — considered Greater Vancouver (Regional District) v. G.V.R.D.E.U. (2001), (sub nom. G.V.R.D. Employees’ Union v. Greater Vancouver Regional District) 87 C.R.R. (2d) 1, 2001 CarswellBC 2555, 2001 BCCA 435, (sub nom. Greater Vancouver Regional District Employees’ Union v. Greater Vancouver Regional District) 2002 C.L.L.C. 230-002, (sub nom. G.V.R.D.E.U. v. Greater Vancouver Regional District) 206 D.L.R. (4th) 220, (sub nom. Greater Vancouver Regional District Employees’ Union v. Greater Vancouver (Regional District)) 158 B.C.A.C. 231, (sub nom. Greater Vancouver Regional District Employees’ Union v. Greater Vancouver (Regional District)) 258 W.A.C. 231, 43 Admin. L.R. (3d) 12, [2001] B.C.J. No. 2026 (B.C. C.A.) — considered Gwala v. Canada (Minister of Citizenship & Immigration) (1999), 167 F.T.R. 157 (note), 1999 CarswellNat 2035, 1999 CarswellNat 908, 3 Imm. L.R. (3d) 26, 68 C.R.R. (2d) 48, 242 N.R. 173, [1999] 3 F.C. 404, [1999] F.C.J. No. 792 (Fed. C.A.) — referred to Harper v. Canada (Attorney General) (2004), 2004 CarswellAlta 646, 2004 CarswellAlta 647, 2004 SCC 33, 27 Alta. L.R. (4th) 1, [2004] 8 W.W.R. 1, 348 A.R. 201, 321 W.A.C. 201, [2004] 1 S.C.R. 827, 320 N.R. 49, 239 D.L.R. (4th) 193, 119 C.R.R. (2d) 84, [2004] S.C.J. No. 28, REJB 2004-61915 (S.C.C.) — referred to Harrison v. University of British Columbia (1990), 1990 CarswellBC 764, (sub nom. Connell v. University of British Columbia) 120 N.R. 1, 1990 CarswellBC 279, (sub nom. Connell v. University of British Columbia) 91 C.L.L.C. 17,001, 52 B.C.L.R. (2d) 105, [1991] 1 W.W.R. 681, 77 D.L.R. (4th) 55, [1990] 3 S.C.R. 451, 13 C.H.R.R. D/317, 2 C.R.R. (2d) 193, EYB 1990-68599, [1990] S.C.J. No. 123 (S.C.C.) — distinguished Hassan v. Canada (Minister of Employment & Immigration) (1992), 147 N.R. 317, 1992 CarswellNat 562, [1992] F.C.J. No. 946 (Fed. C.A.) — referred to 216 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

Health Services & Support-Facilities Subsector Bargaining Assn. v. British Columbia (2007), 2007 C.L.L.C. 220-035, 363 N.R. 226, 400 W.A.C. 1, [2007] 7 W.W.R. 191, D.T.E. 2007T-507, 65 B.C.L.R. (4th) 201, 283 D.L.R. (4th) 40, 137 C.L.R.B.R. (2d) 166, 242 B.C.A.C. 1, 164 L.A.C. (4th) 1, 157 C.R.R. 21, 2007 SCC 27, 2007 Car- swellBC 1289, 2007 CarswellBC 1290, [2007] 2 S.C.R. 391, [2007] S.C.J. No. 27 (S.C.C.) — referred to Hutchinson v. British Columbia (Ministry of Health) (2004), (sub nom. Hutchinson v. British Columbia (Ministry of Health) (No. 4)) 49 C.H.R.R. D/348, 2004 BCHRT 58, 2004 CarswellBC 3529 (B.C. Human Rights Trib.) — referred to Hutterian Brethren of Wilson Colony v. Alberta (2009), (sub nom. Alberta v. Hutterian Brethren of Wilson Colony) 194 C.R.R. (2d) 12, 2009 CarswellAlta 1094, 2009 CarswellAlta 1095, 2009 SCC 37, 310 D.L.R. (4th) 193, (sub nom. Alberta v. Hutterian Brethren of Wilson County) [2009] 2 S.C.R. 567, 9 Alta. L.R. (5th) 1, 81 M.V.R. (5th) 1, 390 N.R. 202, [2009] 9 W.W.R. 189, 462 W.A.C. 1, 460 A.R. 1, [2009] S.C.J. No. 37 (S.C.C.) — considered Irwin Toy Ltd. c. Qu´ebec (Procureur g´en´eral) (1989), 94 N.R. 167, (sub nom. Irwin Toy Ltd. v. Quebec (Attorney General)) [1989] 1 S.C.R. 927, 58 D.L.R. (4th) 577, 24 Q.A.C. 2, 25 C.P.R. (3d) 417, 39 C.R.R. 193, 1989 CarswellQue 115F, 1989 Car- swellQue 115, EYB 1989-67798, [1989] S.C.J. No. 36 (S.C.C.) — referred to Khosa v. Canada (Minister of Citizenship & Immigration) (2009), 82 Admin. L.R. (4th) 1, 2009 SCC 12, 2009 CarswellNat 434, 2009 CarswellNat 435, 304 D.L.R. (4th) 1, 77 Imm. L.R. (3d) 1, 385 N.R. 206, (sub nom. Canada (Citizenship & Immigration) v. Khosa) [2009] 1 S.C.R. 339, [2009] S.C.J. No. 12 (S.C.C.) — followed League for Human Rights of B’Nai Brith Canada v. R. (2010), 93 Imm. L.R. (3d) 1, 2010 CarswellNat 4299, 2010 FCA 307, 2010 CarswellNat 5655, 2010 CAF 307, (sub nom. League for Human Rights of B’Nai Brith Canada v. Canada (Attorney Gen- eral)) 409 N.R. 298, [2010] F.C.J. No. 1424 (F.C.A.) — referred to Leeson v. University of Regina (2007), 301 Sask. R. 316, 2007 CarswellSask 472, 2007 SKQB 252, [2007] S.J. No. 453 (Sask. Q.B.) — considered Martin v. Nova Scotia (Workers’ Compensation Board) (2003), 2003 CarswellNS 360, 2003 CarswellNS 361, 2003 SCC 54, (sub nom. Workers’ Compensation Board (N.S.) v. Martin) 217 N.S.R. (2d) 301, (sub nom. Workers’ Compensation Board (N.S.) v. Martin) 683 A.P.R. 301, 310 N.R. 22, (sub nom. Nova Scotia (Workers’ Compensation Board) v. Martin) [2003] 2 S.C.R. 504, 110 C.R.R. (2d) 233, (sub nom. Nova Scotia (Workers’ Compensation Board) v. Martin) 231 D.L.R. (4th) 385, 28 C.C.E.L. (3d) 1, 4 Admin. L.R. (4th) 1, REJB 2003-48214, [2003] S.C.J. No. 54 (S.C.C.) — considered McKinney v. University of Guelph (1990), 91 C.L.L.C. 17,004, 2 O.R. (3d) 319 (note), 13 C.H.R.R. D/171, [1990] 3 S.C.R. 229, 2 C.R.R. (2d) 1, 45 O.A.C. 1, 118 N.R. 1, 76 D.L.R. (4th) 545, 1990 CarswellOnt 1019F, 1990 CarswellOnt 1019, [1990] S.C.J. No. 122, EYB 1990-67618 (S.C.C.) — distinguished Moktari v. Canada (Minister of Citizenship & Immigration) (1999), 1999 CarswellNat 2522, 70 C.R.R. (2d) 133, 1999 CarswellNat 3045, [2000] 2 F.C. 341, 249 N.R. 385, 12 Imm. L.R. (3d) 12, [1999] F.C.J. No. 1864 (Fed. C.A.) — referred to New Brunswick (Board of Management) v. Dunsmuir (2008), 372 N.R. 1, 69 Admin. L.R. (4th) 1, 69 Imm. L.R. (3d) 1, (sub nom. Dunsmuir v. New Brunswick) [2008] 1 Vilven v. Air Canada 217

S.C.R. 190, 844 A.P.R. 1, (sub nom. Dunsmuir v. New Brunswick) 2008 C.L.L.C. 220-020, D.T.E. 2008T-223, 329 N.B.R. (2d) 1, (sub nom. Dunsmuir v. New Bruns- wick) 170 L.A.C. (4th) 1, (sub nom. Dunsmuir v. New Brunswick) 291 D.L.R. (4th) 577, 2008 CarswellNB 124, 2008 CarswellNB 125, 2008 SCC 9, 64 C.C.E.L. (3d) 1, (sub nom. Dunsmuir v. New Brunswick) 95 L.C.R. 65, [2008] S.C.J. No. 9, [2008] A.C.S. No. 9 (S.C.C.) — followed Newfoundland (Treasury Board) v. N.A.P.E. (2004), (sub nom. NAPE v. Newfoundland) 2004 C.L.L.C. 230-035, (sub nom. Newfoundland (Treasury Board) v. Newfoundland Association of Public Employees) 326 N.R. 25 (Eng.), (sub nom. Newfoundland (Treasury Board) v. Newfoundland Association of Public Employees) 326 N.R. 25 (Fr.), (sub nom. Newfoundland (Treasury Board) v. Newfoundland Association of Public Employees) 242 Nfld. & P.E.I.R. 113, (sub nom. Newfoundland (Treasury Board) v. Newfoundland Association of Public Employees) 719 A.P.R. 113, [2004] 3 S.C.R. 381, 2004 SCC 66, 2004 CarswellNfld 322, 2004 CarswellNfld 323, 244 D.L.R. (4th) 294, 24 Admin. L.R. (4th) 201, 125 C.R.R. (2d) 4, REJB 2004-72119 (S.C.C.) — considered Ontario (Human Rights Commission) v. Etobicoke (Borough) (1982), 1982 CarswellOnt 730, [1982] 1 S.C.R. 202, 40 N.R. 159, 82 C.L.L.C. 17,005, 132 D.L.R. (3d) 14, 3 C.H.R.R. D/781, 1982 CarswellOnt 730F, [1982] S.C.J. No. 2 (S.C.C.) — considered Potash Corp. of Saskatchewan Inc. v. Scott (2008), 68 C.C.P.B. 1, (sub nom. New Brunswick v. Potash Corp. of Saskatchewan) 2008 C.L.L.C. 230-028, 332 N.B.R. (2d) 341, 852 A.P.R. 341, (sub nom. New Brunswick (Human Rights Commission) v. Potash Corporation of Saskatchewan Inc.) 175 C.R.R. (2d) 94, (sub nom. New Brunswick (Human Rights Commission) v. Potash Corporation of Saskatchewan Inc.) [2008] 2 S.C.R. 604, (sub nom. New Brunswick (Human Rights Commission) v. Potash Corp. of Saskatchewan Inc.) 63 C.H.R.R. D/311, 2008 CarswellNB 344, 2008 CarswellNB 345, 2008 SCC 45, 75 Admin. L.R. (4th) 159, 377 N.R. 91, 295 D.L.R. (4th) 1, [2008] S.C.J. No. 46 (S.C.C.) — considered R. c. Advance Cutting & Coring Ltd. (2001), (sub nom. R. v. Advance Cutting & Coring Ltd.) 276 N.R. 1, (sub nom. R. v. Advance Cutting & Coring Ltd.) 205 D.L.R. (4th) 385, 2001 SCC 70, 2001 CarswellQue 2199, 2001 CarswellQue 2200, (sub nom. R. v. Advance Cutting & Coring Ltd.) 87 C.R.R. (2d) 189, (sub nom. R. v. Advance Cutting & Coring Ltd.) 2002 C.L.L.C. 220-006, [2001] 3 S.C.R. 209, (sub nom. R. v. Advance Cutting & Coring Ltd.) 76 C.L.R.B.R. (2d) 1, [2001] S.C.J. No. 68, REJB 2001-26223 (S.C.C.) — referred to R. v. Bryan (2007), 359 N.R. 1, 45 C.R. (6th) 102, 237 B.C.A.C. 33, 392 W.A.C. 33, [2007] 1 S.C.R. 527, 2007 SCC 12, 2007 CarswellBC 533, 2007 CarswellBC 534, 276 D.L.R. (4th) 513, 217 C.C.C. (3d) 97, [2007] 5 W.W.R. 1, 153 C.R.R. (2d) 316, 72 B.C.L.R. (4th) 199, [2007] S.C.J. No. 12 (S.C.C.) — referred to R. v. Oakes (1986), [1986] 1 S.C.R. 103, 26 D.L.R. (4th) 200, 65 N.R. 87, 14 O.A.C. 335, 24 C.C.C. (3d) 321, 50 C.R. (3d) 1, 19 C.R.R. 308, 53 O.R. (2d) 719, 1986 Carswell- Ont 95, 1986 CarswellOnt 1001, [1986] S.C.J. No. 7, EYB 1986-67556 (S.C.C.) — followed R. v. Videoflicks Ltd. (1986), 1986 CarswellOnt 1012, 87 C.L.L.C. 14,001, (sub nom. R. v. Edwards Books & Art Ltd.) [1986] 2 S.C.R. 713, 35 D.L.R. (4th) 1, 71 N.R. 161, 218 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

19 O.A.C. 239, 30 C.C.C. (3d) 385, 55 C.R. (3d) 193, 28 C.R.R. 1, 58 O.R. (2d) 442 (note), 1986 CarswellOnt 141, EYB 1986-67595 (S.C.C.) — considered Reference re Public Service Employee Relations Act (Alberta) (1987), (sub nom. A.U.P.E. v. Alberta (Attorney General)) 28 C.R.R. 305, [1987] D.L.Q. 225, 1987 CarswellAlta 580, 1987 CarswellAlta 705, 87 C.L.L.C. 14,021, [1987] 1 S.C.R. 313, 38 D.L.R. (4th) 161, (sub nom. Reference re Compulsory Arbitration) 74 N.R. 99, [1987] 3 W.W.R. 577, 51 Alta. L.R. (2d) 97, 78 A.R. 1, EYB 1987-66907, [1987] S.C.J. No. 10 (S.C.C.) — considered Renaud v. Central Okanagan School District No. 23 (1992), (sub nom. Central Okanagan School District No. 23 v. Renaud) [1992] 2 S.C.R. 970, (sub nom. Renaud v. Board of Education of Central Okanagan No. 23) 13 B.C.A.C. 245, [1992] 6 W.W.R. 193, (sub nom. Central Okanagan School District No. 23 v. Renaud) 95 D.L.R. (4th) 577, (sub nom. Renaud v. Board of Education of Central Okanagan No. 23) 24 W.A.C. 245, (sub nom. Central Okanagan School District No. 23 v. Renaud) 92 C.L.L.C. 17,032, 141 N.R. 185, 71 B.C.L.R. (2d) 145, 1992 CarswellBC 257, 16 C.H.R.R. D/425, 1992 CarswellBC 910, [1992] S.C.J. No. 75, EYB 1992-67039 (S.C.C.) — considered RJR-Macdonald Inc. c. Canada (Procureur g´en´eral) (1995), (sub nom. RJR-MacDonald Inc. v. Canada (Attorney General)) 127 D.L.R. (4th) 1, (sub nom. RJR-MacDonald Inc. v. Canada (Attorney General)) [1995] 3 S.C.R. 199, 1995 CarswellQue 119, (sub nom. RJR-MacDonald Inc. v. Canada (Attorney General)) 100 C.C.C. (3d) 449, (sub nom. RJR-MacDonald Inc. v. Canada (Attorney General)) 62 C.P.R. (3d) 417, (sub nom. RJR-MacDonald Inc. v. Canada (Attorney General)) 31 C.R.R. (2d) 189, (sub nom. RJR-MacDonald Inc. c. Canada (Procureur g´en´eral)) 187 N.R. 1, 1995 CarswellQue 119F, EYB 1995-67815, [1995] S.C.J. No. 68 (S.C.C.) — considered Stoffman v. Vancouver General Hospital (1990), 1990 CarswellBC 277, 1990 Car- swellBC 765, (sub nom. Vancouver General Hospital v. Stoffman) 91 C.L.L.C. 17,003, (sub nom. Vancouver General Hospital v. Stoffman) [1991] 1 W.W.R. 577, 52 B.C.L.R. (2d) 1, [1990] 3 S.C.R. 483, 13 C.H.R.R. D/337, 76 D.L.R. (4th) 700, 118 N.R. 241, 2 C.R.R. (2d) 215, [1990] S.C.J. No. 125 (S.C.C.) — distinguished Syndicat des employ´e-e-s de techniques professionnelles & de bureau d’Hydro-Qu´ebec, section 2000 (SCFP-FTQ) c. Corbeil (2008), (sub nom. Hydro-Qu´ebec v. Syndicat des employ´e-e-s de techniques professionnelles) 2008 C.L.L.C. 230-027, (sub nom. Syndicat des Employ´e-e-s de Techniques Professionelles & de Bureau d’Hydro- Qu´ebec, Section Locale 2000 v. Hyrdro-Qu´ebec) 294 D.L.R. (4th) 407, (sub nom. Syndicat des Employ´e-e-s de Techniques Professionelles & de Bureau d’Hydro- Qu´ebec, Section Locale 2000 v. Hyrdro-Qu´ebec) 174 L.A.C. (4th) 1, (sub nom. Hydro-Qu´ebec c. Syndicat des employ´e-e-s de techniques professionnelles et de bureau d’Hydro-Qu´ebec, section locale 2000 (SCFP-FTQ)) [2008] 2 S.C.R. 561, (sub nom. Hydro-Qu´ebec v. Syndicat des employ´e-e-s de techniques professionelles et de bureau d’Hydro-Qu´ebec, section locale 2000 (SCFP-FTQ)) 63 C.H.R.R. D/301, 2008 CarswellQue 6436, 2008 CarswellQue 6437, 2008 SCC 43, (sub nom. SCFTP-FTQ v. Hydro Qu´ebec) 377 N.R. 137, (sub nom. Hydro-Qu´ebec v. Syndicat des employees de techniques professionnelles et de bureau d’Hydro-Qu´ebec, section locale 2000 (SCFP-FTQ)) 174 C.R.R. (2d) 165 (S.C.C.) — considered Vilven v. Air Canada 219

Syndicat des employ´ees & employ´es professionnels-les & de bureau - local 434 (FTQ) c. Gagnon (2005), 2005 CarswellQue 4783, EYB 2005-92821, [2005] J.Q. No. 9368 (Que. S.C.) — considered Syndicat des employ´es de l’Hˆopital g´en´eral de Montr´eal c. Sexton (2007), 2007 Carswell- Que 110, 2007 CarswellQue 111, 2007 SCC 4, (sub nom. Syndicat des Employ´es de l’Hˆopital G´en´eral de Montr´eal v. Centre Universitaire de Sant´e McGill) 277 D.L.R. (4th) 577, (sub nom. CUSM c. Syndicat des Employ´es de L’HGM) [2007] 1 S.C.R. 161, (sub nom. Syndicat des employ´es de l’Hˆopital g´en´eral de Montr´eal v. Centre Universitaire de Sant´e McGill) 159 L.A.C. (4th) 1, (sub nom. McGill Univesity Health Centre v. Syndicat des employ´es de L’Hˆopital g´en´eral de Montr´eal) 59 C.H.R.R. D/259, (sub nom. McGill University Health Centre v. Syndicat des employ´es de l’Hˆopital g´en´eral de Montr´eal) 2007 C.L.L.C. 230-006, (sub nom. McGill University Health Centre (Montreal General Hospital) v. Syndicat des employ´es de l’Hˆopital g´en´eral de Montr´eal)) 356 N.R. 177, [2007] S.C.J. No. 4 (S.C.C.) — considered T´etreault-Gadoury v. Canada (Employment & Immigration Commission) (1991), 4 C.R.R. (2d) 12, 36 C.C.E.L. 117, 50 Admin. L.R. 1, 126 N.R. 1, 81 D.L.R. (4th) 358, (sub nom. Canada (Employment & Immigration Commission) v. T´etreault-Gadoury) [1991] 2 S.C.R. 22, 91 C.L.L.C. 14,023, 1991 CarswellNat 829, 1991 CarswellNat 346, [1991] S.C.J. No. 41, EYB 1991-67264 (S.C.C.) — considered Thomson Newspapers Co. v. Canada (Attorney General) (1998), 159 D.L.R. (4th) 385, 1998 CarswellOnt 1981, 1998 CarswellOnt 1982, 51 C.R.R. (2d) 189, 226 N.R. 1, 38 O.R. (3d) 735 (headnote only), 109 O.A.C. 201, [1998] 1 S.C.R. 877, 5 B.H.R.C. 567, [1998] S.C.J. No. 44 (S.C.C.) — considered University of Alberta v. Alberta (Human Rights Commission) (1992), (sub nom. Dickason v. University of Alberta) 4 Alta. L.R. (3d) 193, (sub nom. Dickason v. University of Alberta) 127 A.R. 241, (sub nom. Dickason v. University of Alberta) [1992] 2 S.C.R. 1103, (sub nom. Dickason v. University of Alberta) [1992] 6 W.W.R. 385, (sub nom. Dickason v. University of Alberta) 92 C.L.L.C. 17,033, (sub nom. Dickason v. University of Alberta) 141 N.R. 1, (sub nom. Dickason v. University of Alberta) 11 C.R.R. (2d) 1, (sub nom. Dickason v. University of Alberta) 95 D.L.R. (4th) 439, (sub nom. Dickason v. University of Alberta) 20 W.A.C. 241, 1992 CarswellAlta 119, 17 C.H.R.R. D/87, 1992 CarswellAlta 471, EYB 1992-66874, (sub nom. Dickason v. University of Alberta) [1992] S.C.J. No. 76 (S.C.C.) — considered Vilven v. Air Canada (2007), D.T.E. 2007T-967, 2007 TCDP 36, [2007] R.J.D.T. 1939, 2008 C.L.L.C. 230-011, 2007 CarswellNat 4249, 2007 CarswellNat 4250, 2007 CHRT 36, 61 C.H.R.R. D/149, [2007] D.C.D.P. No. 36, [2007] C.H.R.D. No. 36 (Can. Human Rights Trib.) — referred to Vilven v. Air Canada (2009), 2009 C.L.L.C. 230-019, 74 C.C.E.L. (3d) 1, [2010] 2 F.C.R. 189, 2009 CarswellNat 996, 344 F.T.R. 104 (Eng.), 2009 FC 367, 2009 Car- swellNat 3245, 2009 CF 367, [2009] F.C.J. No. 475 (F.C.) — referred to Vilven v. Air Canada (2009), 77 C.C.E.L. (3d) 128, 2009 TCDP 24, 2009 CarswellNat 5863, 2010 C.L.L.C. 230-011, 2009 CHRT 24, 2009 CarswellNat 2849 (Can. Human Rights Trib.) — referred to Wakeford v. Canada (Attorney General) (2001), 81 C.R.R. (2d) 342, 2001 CarswellOnt 352, [2001] O.J. No. 390 (Ont. S.C.J.) — considered 220 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

Wakeford v. Canada (Attorney General) (2001), 2001 CarswellOnt 4368, 156 O.A.C. 385 (Ont. C.A.) — referred to Wakeford v. Canada (Attorney General) (2002), 300 N.R. 197 (note), 2002 CarswellOnt 1097, 2002 CarswellOnt 1098, 169 O.A.C. 196 (note), [2002] S.C.C.A. No. 72 (S.C.C.) — referred to Zurich Insurance Co. v. Ontario (Human Rights Commission) (1992), 39 M.V.R. (2d) 1, (sub nom. Ontario (Human Rights Commission) v. Zurich Insurance Co.) [1992] I.L.R. 1-2848, (sub nom. Ontario (Human Rights Commission) v. Zurich Insurance Co.) 138 N.R. 1, 93 D.L.R. (4th) 346, [1992] 2 S.C.R. 321, 16 C.H.R.R. D/255, 12 C.C.L.I. (2d) 206, (sub nom. Ontario (Human Rights Commission) v. Zurich Insurance Co.) 55 O.A.C. 81, 1992 CarswellOnt 25, 9 O.R. (3d) 224 (note), 1992 CarswellOnt 994, [1992] S.C.J. No. 63, EYB 1992-67537 (S.C.C.) — considered Statutes considered: Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11 Generally — referred to s. 1 — referred to s. 15 — referred to s. 15(1) — considered Canadian Human Rights Act, R.S.C. 1985, c. H-6 Generally — referred to s. 3(1) — referred to s. 7 — referred to s. 9 — referred to s. 10 — referred to s. 15(1)(a) — considered s. 15(1)(c) — considered s. 15(2) — considered s. 48.3(10) [en. R.S.C. 1985, c. 31 (1st Supp.), s. 65] — referred to s. 50(1) — referred to s. 50(2) — referred to s. 51 — considered Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), c. 11, reprinted R.S.C. 1985, App. II, No. 44 s. 52 — referred to s. 52(1) — considered Federal Courts Act, R.S.C. 1985, c. F-7 s. 18.1 [en. 1990, c. 8, s. 5] — referred to s. 18.1(3) [en. 1990, c. 8, s. 5] — considered s. 18.1(4) [en. 1990, c. 8, s. 5] — considered s. 57 — referred to Human Rights Code, S.B.C. 1984, c. 22 Generally — referred to s. 1 “age” — considered Vilven v. Air Canada Anne Mactavish J. 221

Human Rights Code, R.S.N.B. 1973, c. H-11 Generally — referred to Human Rights Code, 1981, S.O. 1981, c. 53 s. 9 — considered s. 9(a) — considered Individual’s Rights Protection Act, R.S.A. 1980, c. I-2 Generally — referred to s. 11.1 [en. 1980, c. 27, s. 7] — considered Ontario Human Rights Code, R.S.O. 1970, c. 318 Generally — referred to Saskatchewan Human Rights Code, S.S. 1979, c. S-24.1 Generally — referred to Treaties considered: Convention on International Civil Aviation, 1944, C.T.S. 1944/36; 15 U.N.T.S. 295 Generally — referred to

APPLICATIONS by union and employer for judicial review of decision reported at Vilven v. Air Canada (2009), 77 C.C.E.L. (3d) 128, 2009 TCDP 24, 2009 CarswellNat 5863, 2010 C.L.L.C. 230-011, 2009 CHRT 24, 2009 CarswellNat 2849 (Can. Human Rights Trib.) concerning s. 15(1)(c) of Canadian Human Rights Act and mandatory re- tirement provisions in pension plan and collective agreement.

Anne Mactavish J.: I. Introduction 1 Paragraph 15(1)(c) of the Canadian Human Rights Act, R.S., 1985, c. H-6, [CHRA] allows an employer to terminate the employment of an individual if that person has reached the “normal age of retirement” for those working in similar positions. 2 This Court has previously found that paragraph 15(1)(c) of the Act violates subsection 15(1) of the Canadian Charter of Rights and Freedoms, Part 1 of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982 c.11, as it denies the equal protection and equal benefit of the law to workers over the normal age of retirement for similar positions. In so doing, paragraph 15(1)(c) has the effect of perpetuating the group disadvantage and prejudice faced by older workers by promoting the stereotypical view that older workers are less capable, or less deserving of recognition or value as human beings or as members of Canadian society: see Vilven v. Air Canada (2009), [2010] 2 F.C.R. 189, [2009] F.C.J. No. 475 (F.C.), at paras. 9 and 337-339 (“.Vilven #1”). 3 These reasons pertain to two applications for judicial review of a subsequent decision of the Canadian Human Rights Tribunal which found that paragraph 15(1)(c) is not a reasonable limit justifiable in a free and democratic society as contemplated by section 1 of the Charter. One application is brought by Air 222 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

Canada and the other by the Air Canada Pilots Association (or “ACPA”), the bargaining agent for Air Canada pilots. The applications were consolidated by order of this Court. 4 For the reasons that follow, I find that the Tribunal’s decision on the Charter issue was correct. As a result, ACPA’s application, which only raises the Char- ter issue, will be dismissed. 5 Also at issue in Air Canada’s application for judicial review is whether the Tribunal’s finding that Air Canada had failed to demonstrate that age was a bona fide occupational requirement for its pilots was reasonable. I have con- cluded that the Tribunal erred in its analysis of the bona fide occupational re- quirement issue as it related to the period after November of 2006. Conse- quently, Air Canada’s application for judicial review will be granted in part. 6 What is not in issue in these proceedings is any question relating to pilot safety. The fitness of individual pilots to fly is determined not by Air Canada, but by Transport Canada as part of its pilot licensing regime. If, after an individ- ualized assessment, Transport Canada determines that an individual is no longer fit to fly, then that individual’s pilot’s license will not be renewed.

II. Background 7 In order to provide a context for these reasons, I will provide a brief sum- mary of the facts, which is largely taken from my decision in Vilven #1.

A. Mandatory Retirement at Air Canada 8 Mandatory retirement for pilots at Air Canada was initially a company pol- icy. Since 1957, the Air Canada pension plan has identified 60 as the compul- sory retirement age for pilots. As of the early 1980’s, provisions mandating re- tirement at age 60 have been included in the collective agreement in force between Air Canada and its pilots’ union. ACPA began representing Air Canada pilots in 1995. 9 Shortly before the commencement of the initial Tribunal hearing of Messrs. Vilven and Kelly’s human rights complaints, ACPA held a referendum on the mandatory retirement issue. Seventy-five percent of ACPA members voted in favour of retaining mandatory retirement for Air Canada pilots.

B. George Vilven’s Career 10 George Vilven was hired by Air Canada in May of 1986. Over the ensuing years, he was able to use his seniority to bid on a succession of higher status and higher paying positions on increasingly larger aircraft. In his last position with Air Canada, Mr. Vilven was flying as a First Officer on Airbus 340 aircraft. Vilven v. Air Canada Anne Mactavish J. 223

11 Mr. Vilven turned 60 on August 30, 2003. In accordance with the mandatory retirement age provisions of the Air Canada/ACPA collective agreement and the Air Canada pilot pension plan, he was required to retire on the first day of the month following his 60th birthday. 12 There is no suggestion that there were any performance problems or medical fitness issues with respect to Mr. Vilven. Indeed, it is common ground that the only reason for the termination of his employment was the application of the mandatory retirement provisions of the Air Canada/ACPA collective agreement and the Air Canada pilot pension plan, which is incorporated by reference into the collective agreement. 13 Based upon his years of service with Air Canada and his pre-Air Canada military service (which are included as years of service for the purpose of Air Canada’s pension plan), Mr. Vilven is entitled to receive substantial pension be- nefits until his death. 14 After leaving Air Canada, Mr. Vilven was able to continue his career in avi- ation. He flew with Flair Airlines from April of 2005 until May of 2006, when he quit flying in order to prepare for his Tribunal hearing. At the time of the original Tribunal hearing, Mr. Vilven continued to hold a valid Canadian Air Transport Pilot’s License.

C. Robert Neil Kelly’s Career 15 Robert Neil Kelly was hired by Air Canada in September of 1972. At the time of his retirement from Air Canada, he was flying as the Captain and Pilot- in-command of Airbus 340’s. 16 The term “Pilot-in-command” should not be confused with that of “Cap- tain”. Pilot positions at Air Canada include Captains, First Officers and Relief Pilots. The International Standards on Personnel Licensing promulgated by the International Civil Aviation Organization (or “ICAO”), the United Nations or- ganization charged with fostering civil aviation safety, requires that one pilot on each flight be designated as the Pilot-in-command of the flight: see the Conven- tion on International Civil Aviation: Annex 1 - International Standards and Rec- ommended Practices - Personnel Licensing (Chicago Convention), 7 December 1944, 15 UNTS 295 (entered into force 4 April 1947), see Annex I (Personnel Licensing, 10th ed., 2006). Although the Captain of an aircraft is ordinarily the Pilot-in-command, this is not necessarily always the case. 17 Mr. Kelly turned 60 on April 30, 2005, and was forced to retire from Air Canada on May 1, 2005. As was the case with Mr. Vilven, there was no issue as to Mr. Kelly’s capacity to fly safely, and the parties acknowledge that the only reason for the termination of his employment was the application of the mandatory retirement provisions found in the governing pension plan and col- lective agreement. 224 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

18 Like Mr. Vilven, Mr. Kelly is entitled to receive substantial pension benefits for the rest of his life. 19 Mr. Kelly was also able to continue his flying career after leaving Air Can- ada. He initially worked on contract as a First Officer with Skyservice Airlines. At the time of the original Tribunal hearing, he was working for Skyservice as a Captain and Pilot-in-command, flying routes, including international routes, on Boeing 757’s.

III. The Human Rights Complaints 20 Mr. Vilven filed his complaint against Air Canada with the Canadian Human Rights Commission in August of 2004. His complaint asserted that by forcing him to retire at age 60, Air Canada violated sections 7 and 10 of the CHRA. The full text of the relevant statutory provisions is attached as an appendix to these reasons. 21 Mr. Kelly’s human rights complaint was filed on March 31, 2006 and was brought against both Air Canada and ACPA. His complaint alleged discrimina- tion on the basis of age, contrary to the provisions of sections 7, 9 and 10 of the Act. 22 Both complaints were referred to the Canadian Human Rights Tribunal by the Commission, and the two cases were heard and decided together. 23 In the course of the parties’ oral submissions, I was advised that the Tribunal has now held a hearing in relation to 68 additional complaints brought by former Air Canada pilots who were forced to retire against their will. The Tribunal cur- rently has its decision with respect to that case under reserve. I was also advised that there is another “large group” of former Air Canada pilots whose human rights complaints have been referred to the Tribunal by the Canadian Human Rights Commission, and still another “large group” of former Air Canada pilots who have age discrimination complaints pending before the Commission.

IV. Procedural History 24 In order to put the issues into context, it is necessary to understand the pro- cedural history giving rise to the applications currently before the Court. 25 The original hearing into Messrs. Vilven and Kelly’s complaints took place in 2007. ACPA was granted “interested party” status before the Tribunal in rela- tion to Mr. Vilven’s complaint. The Tribunal also granted interested party status to the “Fly Past 60 Coalition”, a group of current and former Air Canada pilots who are united in their goal of eliminating mandatory retirement at Air Canada. 26 In advance of the Tribunal hearing, the Fly Past 60 Coalition served a Notice of Constitutional Question on the federal and provincial Attorneys General, ad- vising that the constitutionality of paragraph 15(1)(c) of the CHRA was in issue Vilven v. Air Canada Anne Mactavish J. 225

in the proceeding. As was noted earlier, paragraph 15(1)(c) of the Act provides that it is not a discriminatory practice if an individual’s employment is termi- nated “because that individual has reached the normal age of retirement for em- ployees working in positions similar to the position of that individual”. 27 In a decision rendered in August of 2007, the Tribunal dismissed Messrs. Vilven and Kelly’s human rights complaints: Vilven v. Air Canada, 2007 CHRT 36 (Can. Human Rights Trib.) (Tribunal decision #1). The Tribunal found that 60 was the normal age of retirement for persons working in similar positions, and further found that paragraph 15(1)(c) of the Act did not contravene subsec- tion 15(1) of the Charter. Because of its finding on the section 15 Charter issue, the Tribunal did not have to decide whether paragraph 15(1)(c) of the CHRA could be justified under section 1 of the Charter. 28 On judicial review, I found that although there were errors in the Tribunal’s analysis, the finding that 60 was the normal age of retirement for individuals employed in positions similar to those occupied by Messrs. Vilven and Kelly prior to their retirement was reasonable: Vilven #1 at para. 174. 29 However, as noted earlier, I concluded that paragraph 15(1)(c) of the Act violated subsection 15(1) of the Charter, as it denies the equal protection and equal benefit of the law to workers over the normal age of retirement for similar positions. Consequently, I quashed the Tribunal’s decision as it related to the Charter issue, and remitted the matter to the Tribunal for it to determine whether paragraph 15(1)(c) of the Act could be demonstrably justified as a reasonable limit in a free and democratic society: Vilven #1, at para. 340. 30 In the event that the Tribunal determined that paragraph 15(1)(c) of the CHRA was not saved under section 1 of the Charter, I directed that it address the merits of Messrs. Vilven and Kelly’s human rights complaints. This would re- quire the Tribunal to consider Air Canada’s argument that requiring that all of its pilots be younger than 60 constituted a bona fide occupational requirement within the meaning of paragraph 15(1)(a) of the CHRA: Vilven #1, at para. 341.

V. The Tribunal’s Second Decision 31 In August of 2009, the Tribunal issued a second decision with respect to Messrs. Vilven and Kelly’s human rights complaints: Vilven v. Air Canada, 2009 CHRT 24 (Can. Human Rights Trib.) (Tribunal decision #2). 32 In assessing whether paragraph 15(1)(c) of the CHRA was saved under sec- tion 1 of the Charter, the Tribunal applied the test articulated by the Supreme Court of Canada in R. v. Oakes, [1986] 1 S.C.R. 103, [1986] S.C.J. No. 7 (S.C.C.). The Oakes test requires that two criteria be satisfied: the objective of the law must relate to a societal concern that is “pressing and substantial”, and the means used to attain the objective must be “proportional”. 226 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

33 The Tribunal noted that in order to be proportional, the measures selected “must be rationally connected to the objective and should impair as little as pos- sible the right or freedom in question. It also requires that there be proportional- ity between the objectives and the effects”: Tribunal decision #2 at para. 12, citing Oakes at para. 70. 34 The Tribunal recognized that in cases such as McKinney v. University of Guelph, [1990] 3 S.C.R. 229, [1990] S.C.J. No. 122 (S.C.C.), and Harrison v. University of British Columbia, [1990] 3 S.C.R. 451, [1990] S.C.J. No. 123 (S.C.C.), the Supreme Court of Canada had found that provisions in the Ontario and British Columbia human rights codes limiting the protection of the legisla- tion to those under 65 were reasonable limitations within the meaning of section 1 of the Charter. 35 The Tribunal also noted that the majority judgment in McKinney accorded a high degree of deference to the Legislature, as the issue of mandatory retirement involved a complex balancing of competing interests upon which expert opinion was divided. The Tribunal went on, however, to observe that several more re- cent decisions had determined that the social and economic context had changed sufficiently since McKinney and Harrison were decided as to render those deci- sions no longer applicable to present day circumstances: Tribunal decision #2, at paras. 18 and 19. 36 The Tribunal compared the factual and social context of this case to that which was before the Supreme Court in McKinney, finding that the evidence before it demonstrated that mandatory retirement was no longer as prevalent as it had been when McKinney was decided. At the time of the hearing, only three provinces allowed for the imposition of mandatory retirement. In all of the other provinces, mandatory retirement was either prohibited, or was permitted only where it was based on a bona fide occupational requirement or bona fide pen- sion or retirement plan: Tribunal decision #2, at paras. 26 and 27. 37 The Tribunal observed that the abolition of mandatory retirement in these provinces had not spelled the end of deferred compensation, pension and benefit schemes, and seniority arrangements: Tribunal decision #2, at paras. 29 and 34. The Tribunal also noted that the expert evidence before it called into question the concerns identified by the Supreme Court in McKinney as to the potential negative consequences that could flow from the abolition of mandatory retire- ment for matters such as pension plans and deferred compensation schemes. Consequently, the Tribunal concluded that paragraph 15(1)(c) of the CHRA could not be justified under any of the elements of the Oakes test. 38 It was thus necessary for the Tribunal to go on to consider whether Air Can- ada and ACPA had demonstrated that mandatory retirement at 60 constituted a bona fide occupational requirement for Air Canada pilots. Vilven v. Air Canada Anne Mactavish J. 227

39 In answering this question, the Tribunal applied the test established by the Supreme Court in British Columbia (Public Service Employee Relations Commission) v. B.C.G.E.U. (Meiorin Grievance), [1999] 3 S.C.R. 3, [1999] S.C.J. No. 46 (S.C.C.) at para. 54. 40 According to the Tribunal, neither Messrs. Vilven and Kelly nor the Com- mission disputed that the first two components of the Meiorin test had been sat- isfied: that is, that the mandatory retirement provisions of the Air Canada pen- sion plan and the Air Canada/ACPA collective agreement had been adopted for a purpose that was rationally connected to the performance of the job, and that the provisions had been adopted in the honest and good faith belief that they were necessary to the fulfillment of a legitimate work-related purpose. 41 The “real issue” for the Tribunal was whether Messrs. Vilven and Kelly could be accommodated without causing undue hardship to Air Canada and/or ACPA: Tribunal decision #2, at paras. 82-83. 42 After examining the evidence adduced by the applicants in this regard, the Tribunal found that neither Air Canada nor ACPA had established that the re- tirement of Air Canada pilots at age 60 constituted a bona fide occupational requirement. Consequently, Messrs. Vilven and Kelly’s human rights com- plaints were deemed to have been substantiated, and the Tribunal retained juris- diction to deal with the issue of remedy.

VI. Issues 43 There are two issues on these applications for judicial review. The first is whether the Tribunal erred in finding that paragraph 15(1)(c) of the CHRA is not a reasonable limit justifiable in a free and democratic society within the meaning of section 1 of the Charter. 44 The second issue is whether the Tribunal erred in determining that Air Can- ada had not established that the mandatory retirement age provisions of the Air Canada Pension Plan and the Air Canada/ACPA collective agreement consti- tuted a bona fide occupational requirement.

VII. Standard of Review 45 Messrs. Vilven and Kelly, Air Canada and ACPA all agree that the Tribu- nal’s finding as to whether paragraph 15(1)(c) of the CHRA is saved by section 1 of the Charter is reviewable against the standard of correctness. The Commis- sion takes no position on the Charter issue. 46 I agree that correctness is the appropriate standard with respect to this aspect of the Tribunal’s decision. Charter questions must be decided consistently and correctly: see New Brunswick (Board of Management) v. Dunsmuir, 2008 SCC 9 at paras. 58 and 163, [2008] S.C.J. No. 9 (S.C.C.); Martin v. Nova Scotia (Workers’ Compensation Board), 2003 SCC 54, [2003] 2 S.C.R. 504 (S.C.C.) at 228 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

para. 32. That said, purely factual findings made by the Tribunal in the course of its constitutional analysis are entitled to deference: see, for example, Consolidated Fastfrate Inc. v. Western Canada Council of Teamsters, 2009 SCC 53, [2009] 3 S.C.R. 407 (S.C.C.), at para. 26. 47 Messrs. Vilven and Kelly, the Commission and Air Canada also agree that the Tribunal’s finding as to whether Air Canada had established a bona fide occupational requirement defence is reviewable on the reasonableness standard. ACPA takes no position on the bona fide occupational requirement issue. 48 I agree that reasonableness is the applicable standard of review with respect to this aspect of the Tribunal’s decision. The question of whether a bona fide occupational requirement defence has been made out in a particular case is a question of mixed fact and law, requiring the Tribunal to apply its enabling leg- islation to the facts before it. Such a finding attracts judicial deference: Brown v. Canada (National Capital Commission), 2009 FCA 273, [2009] F.C.J. No. 1196 (F.C.A.), at para. 5. 49 In applying the reasonableness standard, the Court must consider the justifi- cation, transparency and intelligibility of the decision-making process, and whether the decision falls within the range of possible acceptable outcomes which are defensible in light of the facts and the law: see Dunsmuir, at para. 47, and Khosa v. Canada (Minister of Citizenship & Immigration), 2009 SCC 12, [2009] 1 S.C.R. 339 (S.C.C.), at para. 59.

VIII. Is Paragraph 15(1)(c) of the Canadian Human Rights Act a Reasonable Limit in a Free and Democratic Society? 50 Before examining this issue, it should be noted that ACPA served a Notice of Constitutional Question on the Federal and Provincial Attorneys General pur- suant to the provisions of section 57 of the Federal Courts Act, R.S., 1985, c. F- 7, advising that the constitutional validity of paragraph 15(1)(c) of the CHRA is in issue in these applications. None of the Attorneys General have elected to participate in these proceedings. 51 There is no question that the Canadian Human Rights Tribunal has the power to decide Charter questions, as the CHRA statutorily empowers the Tri- bunal to decide questions of law: see subsection 50(2), and Martin v. Nova Scotia (Workers’ Compensation Board), above, at para. 3. 52 The parties agree that the onus of justifying the limitation on Messrs. Vilven and Kelly’s equality rights rests on Air Canada and ACPA: see Stoffman v. Vancouver General Hospital, [1990] 3 S.C.R. 483, [1990] S.C.J. No. 125 (S.C.C.), at para. 50. The standard of proof under section 1 of the Charter is the ordinary civil standard, that is, the balance of probabilities: Oakes, at para. 67. Vilven v. Air Canada Anne Mactavish J. 229

53 There is also no dispute that the Oakes test applied by the Tribunal in decid- ing whether paragraph 15(1)(c) of the CHRA can be justified under section 1 of the Charter is the appropriate test.

A. The Supreme Court of Canada’s Mandatory Retirement Jurisprudence 54 The issue of mandatory retirement has been considered by the Supreme Court of Canada on a number of occasions in the last 30 years. Before applying the Oakes test to the facts of this case, and in order to put that discussion into context, it is helpful to start by looking at what the Supreme Court has said on the subject.

i) Ontario (Human Rights Commission) v. Etobicoke (Borough) 55 Mandatory retirement first came before the Supreme Court in the early 1980’s in Ontario (Human Rights Commission) v. Etobicoke (Borough), [1982] 1 S.C.R. 202, [1982] S.C.J. No. 2 (S.C.C.). The appellants in that case were firemen employed by the Borough of Etobicoke. Each had filed a complaint under the Ontario Human Rights Code, R.S.O. 1970, c. 318, because he had been forced to retire at age 60 pursuant to the collective agreement governing the terms of his employment. 56 The Ontario Human Rights Code provided that the prohibition on age dis- crimination did not apply in cases where age could be shown to be a bona fide occupational requirement for the position in question. A human rights Board of Inquiry determined that the municipality had not established the existence of a bona fide occupational requirement for its firefighters. That decision was over- turned by the Ontario Divisional Court, and the Divisional Court’s decision was subsequently confirmed by the Ontario Court of Appeal. 57 In restoring the decision of the Board of Inquiry, the Supreme Court found that the evidence adduced by the employer failed to establish that being under 60 was a bona fide occupational requirement. The Court observed that everyone ages chronologically at the same rate, but that individuals may age in a “func- tional sense” at very different and largely unpredictable rates. The Court went on to observe that in cases where the employer’s concern is one of productivity rather than safety, “it may be difficult, if not impossible, to demonstrate that a mandatory retirement at a fixed age, without regard to individual capacity, may be validly imposed under the Code”: at p. 209. 58 The Court rejected the employer’s argument that the mandatory retirement age at issue should be considered to be a bona fide occupational requirement as it had been agreed to as part of a collective agreement: at p. 212. As the Code had been enacted for the benefit of both the community at large and of its indivi- dual members, the Supreme Court was of the view that its protection could not be waived or varied by private contract: at pp. 213-213. 230 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

ii) McKinney v. University of Guelph 59 The issue of mandatory retirement was back before the Supreme Court in the early 1990’s in a series of cases brought under section 15 of the Charter: McKinney; Harrison; Stoffman; Douglas/Kwantlen Faculty Assn. v. Douglas College, [1990] S.C.J. No. 124, [1990] 3 S.C.R. 570 (S.C.C.). 60 The judgments in all four cases were rendered at the same time, with McKin- ney as the lead decision. Air Canada and ACPA argue that McKinney was bind- ing on the Tribunal, and should have dictated a finding by the Tribunal that paragraph 15(1)(c) of the CHRA was saved by section 1 of the Charter. By fail- ing to follow McKinney, the applicants say that the Tribunal erred in law. In light of this argument, it is necessary to examine the Court’s reasoning in Mc- Kinney in some detail. 61 The appellants in McKinney were university professors at four Ontario uni- versities who were forced to retire at age 65, in accordance with the universities’ mandatory retirement policies. As in the present case, the professors were una- ble to seek recourse under human rights legislation, because subsection 9(a) of the Ontario Human Rights Code, 1981, S.O. 1981, c. 53, limited the protection against age discrimination in employment afforded by the Code to those be- tween the ages of 18 and 65. 62 The majority judgment held that universities do not form part of “govern- ment”, and that the reach of the Charter is limited to government action. How- ever, the Court went on in obiter to examine the universities’ retirement policies on the assumption that the universities were government actors, finding them to be justifiable. 63 Insofar as the constitutionality of subsection 9(a) of the Ontario Human Rights Code was concerned, the Supreme Court was unanimous in finding that the statutory provision in issue violated subsection 15(1) of the Charter, as it deprived individuals of a benefit under the Code on the basis of an enumerated ground. The Court was, however, divided on the question of whether the provi- sion was justifiable under section 1 of the Charter. 64 Justice La Forest wrote the majority judgment, with Chief Justice Dickson and Justice Gonthier concurring. Justices Cory and Sopinka each wrote separate reasons, concurring in the result. Justices Wilson and L’Heureux-Dub´e each wrote dissenting judgments disagreeing with the majority as to whether subsec- tion 9(a) of the Code could be justified under section 1. 65 Justice La Forest began by reviewing the history and role of mandatory re- tirement in Canada. He observed that by 1970, public and private pension plans had been established to provide income security after the age of 65 and that as of 1990, mandatory retirement was “part of the very fabric of the organization of the labour market in this country”: at para. 84. Vilven v. Air Canada Anne Mactavish J. 231

66 The objectives of the legislation were described by Justice La Forest as be- ing an effort to balance the Legislature’s concern for denying protection beyond age 65 against the fear that such a change could result in delayed retirement and delayed benefits for older workers. Concern was also expressed as to the poten- tial impact that a change would have for labour markets and pensions. In Justice La Forest’s view, these objectives were pressing and substantial. 67 The majority also found that subsection 9(a) of the Code was rationally con- nected to these objectives. In this regard, Justice La Forest observed that “there is nothing irrational in a system that permits those in the private sector to deter- mine for themselves the age of retirement suitable to a particular area of activ- ity”: at para. 101. 68 In relation to the issue of minimal impairment, Justice La Forest noted that where the Legislature was faced with competing socio-economic theories and social science evidence, it was entitled to choose between them and to proceed cautiously in effecting change. The question for the Court was whether the gov- ernment had a reasonable basis for concluding that the legislation impaired the relevant right as little as possible, in light of the government’s pressing and sub- stantial objectives: at para. 123, emphasis added. 69 In addressing this question, Justice La Forest described the issue of mandatory retirement as being a complex socio-economic one, which involved “the basic and interconnected rules of the workplace throughout the whole of our society”: at para. 96. He explained that mandatory retirement was part of “a complex, interrelated, lifetime contractual arrangement involving something like deferred compensation”, particularly in union-organized workplaces, where “se- niority serves as something of a functional equivalent to tenure”: at para. 108. 70 Justice La Forest further observed that the ramifications that the abolition of mandatory retirement would have for the organization of the workplace, and for society in general, were things that could not readily be measured: at para. 104. 71 Finally, Justice La Forest found that there was proportionality between the effects of subsection 9(a) of the Code on the guaranteed right, and the objectives of the provision. He observed that a Legislature is not obliged to deal with all aspects of a problem at once, and that it should be permitted to take incremental measures in relation to issues such as mandatory retirement: at para. 129. 72 Justices Cory and Sopinka agreed in their concurring reasons that subsection 9(a) of the Code was saved under section 1 of the Charter. 73 In contrast, Justice Wilson observed that subsection 9(a) of the Code did not only allow for mandatory retirement; it also permitted age discrimination in the employment context in all its forms for those over the age of 65. As a conse- quence, she was of the view that the rational connection branch of the Oakes test had not been met: at para. 350. 232 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

74 More importantly for our purposes, Justice Wilson found that the legislation did not meet the minimal impairment component of the Oakes test. She noted that older workers would suffer disproportionately greater hardship as a result of the infringement of their equality rights. She also observed that women are neg- atively affected by mandatory retirement, as they often have interrupted work histories as a result of their having assumed childcare responsibilities, with the resultant loss of pensionable earnings: at paras. 351-353. 75 Justice Wilson recognized that mandatory retirement requirements are often the product of collective bargaining. However, she also observed that even if it were acceptable for citizens to bargain away their fundamental human rights in exchange for economic gain, the fact was that the majority of working people in Ontario did not have access to such beneficial contractual arrangements: at para. 352. 76 Justice L’Heureux-Dub´e agreed with Justice Wilson that subsection 9(a) of the Code could not be justified under section 1 of the Charter. She found that there was no convincing evidence that mandatory retirement was intimately re- lated to the tenure system. In her view, the value of tenure was threatened, not by the aging process, but by the incompetence of individual workers. Discrepan- cies between the physical and intellectual abilities of older workers versus younger workers were compensated for by older workers’ increased experience and wisdom, as well as the skills they had acquired over time. Consequently she found there to be no pressing and substantial objective addressed by the Univer- sities’ mandatory retirement policy: at paras. 389-393. 77 Justice L’Heureux-Dub´e was further of the view that the means chosen by the Legislature were too intrusive. Individuals over 65 were excluded from the protection of the Code solely because of their age, without regard to their indivi- dual circumstances. She noted that the adverse effects of mandatory retirement are most painfully felt by the poor, and that women are particularly negatively affected as they are less likely to have accumulated adequate pensions: at paras. 398-399. 78 In the absence of a reasonable justification for a legislative scheme permit- ting compulsory retirement at age 65, Justice L’Heureux-Dub´e would have struck out subsection 9(a) of the Code in its entirety as unconstitutional. 79 At the same time that it rendered judgment in McKinney, the Supreme Court of Canada also released its decisions in the three companion cases of Harrison, Stoffman and Douglas College. As these cases relied heavily on the reasoning in McKinney, I will refer to each of them only briefly.

iii) Harrison v. University of British Columbia 80 Harrison involved a challenge to the University of British Columbia’s mandatory retirement policy. There was also a challenge to the constitutionality Vilven v. Air Canada Anne Mactavish J. 233

of the definition of “age” in section 1 of the British Columbia Human Rights Act, S.B.C. 1984, c. 22, which limited the protection of the Act to those between the ages of 45 and 65. 81 The majority decision held that because the facts, issues and constitutional questions in Harrison were similar to those considered in McKinney, Harrison was governed by that case. As a consequence, Harrison adds little to the analy- sis. However, it does bear noting that Justices Wilson and L’Heureux-Dub´e once again dissented on the section 1 issue.

iv) Douglas/Kwantlen Faculty Assn. v. Douglas College 82 The appeal in Douglas College involved another challenge to a mandatory retirement provision in a collective agreement. The case was disposed of on ju- risdictional grounds, the question being whether the arbitrator had jurisdiction to decide Charter issues. The Court determined that the arbitrator did indeed have jurisdiction to decide Charter issues. However, as the arbitrator had not consid- ered whether the breach of section 15 of the Charter was justified under section 1 of the Charter, the Court did not deal with this question.

v) Stoffman v. Vancouver General Hospital 83 Stoffman involved a challenge brought by doctors with admitting privileges at the Vancouver General Hospital. A hospital Medical Staff Regulation stipu- lated that doctors had to retire at the age of 65, unless they were able to demon- strate that they could offer something unique to the hospital. 84 The doctors were not hospital employees, and thus did not benefit from the protection against age-based employment discrimination provided by the British Columbia Human Rights Act. The Supreme Court found that the doctors were also unable to claim the protection of the Charter, as hospitals were not part of government. 85 Even if the Charter had applied, the majority would have found that the discriminatory mandatory retirement Regulation would have been saved by sec- tion 1 for the reasons given in McKinney. Justices Wilson, L’Heureux-Dub´e and Cory dissented.

vi) University of Alberta v. Alberta (Human Rights Commission) [Hereinafter Dickason] 86 Two years after rendering its decisions in McKinney and its companion cases, the issue of mandatory retirement in the university setting was back before the Supreme Court in University of Alberta v. Alberta (Human Rights Commission), [1992] 2 S.C.R. 1103, [1992] S.C.J. No. 76 (S.C.C.). 87 The issue in Dickason was whether McKinney fully decided “whether a mandatory retirement policy in a private employment setting can be justified 234 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

pursuant to the provisions of s. 11.1 of the IRPA [Individual’s Rights Protection Act, R.S.A. 1980, c. I-2]?”: at para. 33. Once again, the majority and dissenting judgments revealed deep divisions within the Supreme Court on this issue. 88 As in McKinney, the appellant in Dickason was a tenured professor who was forced to retire at age 65, in accordance with a clause in her collective agree- ment. Dr. Dickason filed a complaint with the Alberta Human Rights Commis- sion alleging that the mandatory retirement provision of the collective agreement violated the IRPA. 89 Unlike the Ontario and British Columbia human rights legislation at issue in McKinney and Harrison, the IRPA did not limit its protection against age-based employment discrimination to those under the age of 65. Rather, section 11.1 of the Individual’s Rights Protection Act prohibited such discrimination unless an employer could demonstrate that it was “reasonable and justifiable in the cir- cumstances”. Dr. Dickason did not challenge the constitutional validity of sec- tion 11.1 under the Charter, but rather the university’s claim that the mandatory retirement requirement in issue was reasonable and justifiable. 90 In rejecting Dr. Dickason’s appeal from the dismissal of her human rights complaint, Justice Cory (writing for a majority including Justices La Forest, Gonthier and Iacobucci), discussed the difference between the rights conferred by human rights legislation and those conferred by the Charter. He noted that human rights legislation is aimed at regulating the action of private individuals, whereas the Charter’s goal is to regulate government action: at para. 18. 91 As a consequence, although the decision in McKinney provided guidance, Justice Cory held that it did not determine the outcome of Dr. Dickason’s case, as no deference was owed to the policy choices of the university as a private institution: at para. 22. 92 While recognizing that parties may not generally contract out of human rights statutes, Justice Cory noted that the mandatory retirement provision at is- sue was arrived at through the collective bargaining process. In his view, this could provide evidence of the reasonableness of a practice which appeared on its face to be discriminatory: at para. 39. 93 With this in mind, Justice Cory examined whether the objectives of promot- ing tenure, academic renewal, planning and resource management, and retire- ment with dignity justified the placing of age limits on the substantive rights to equal treatment: at para. 33. The evidence regarding the role of mandatory re- tirement in this context was very similar to that which was before the Court in McKinney, and the majority concluded that the mandatory retirement policy was reasonable and justifiable. 94 Justices L’Heureux-Dub´e and McLachlin dissented, finding the university’s mandatory retirement policy to be neither reasonable nor justifiable. Given that parties generally cannot contract out of human rights legislation, the dissenting Vilven v. Air Canada Anne Mactavish J. 235

judges were of the view that the fact that the mandatory retirement requirement was found in a collective agreement was not evidence of the reasonableness of the discriminatory practice in Dr. Dickason’s case. While accepting that this could be a factor to consider in exceptional circumstances, the collective agree- ment would nevertheless have to be carefully scrutinized in order to ensure that it was truly freely negotiated, and did not discriminate unfairly against a minor- ity of the union membership: at para. 118. 95 Justice Sopinka concurred with Justices L’Heureux-Dub´e and McLachlin, holding that Dr. Dickason’s appeal should be allowed on the basis that the Board of Inquiry had found only a weak connection between the University’s objective and its mandatory retirement policy. The Board had also found that there were other, more reasonable ways for the University to achieve its objectives, and that no valid reason for disturbing these factual findings had been demonstrated.

vii) Potash Corp. of Saskatchewan Inc. v. Scott 96 As will be discussed below, there have been calls in recent years for the Supreme Court of Canada to revisit the issue of mandatory retirement. This was explicitly recognized by the Court itself in Potash Corp. of Saskatchewan Inc. v. Scott, 2008 SCC 45, [2008] 2 S.C.R. 604 (S.C.C.). 97 The Supreme Court left the door open for a reconsideration of mandatory retirement in the appropriate case: at para. 4. However, the facts of the Potash case did not present the proper opportunity for such a reconsideration, as no constitutional challenge had been made to the relevant provision of the New Brunswick Human Rights Code, R.S.N.B. 1973, c. H-11.

B. Why the Supreme Court’s Decision in McKinney does not Determine the Result of this Case 98 Air Canada and ACPA argue that the Supreme Court’s decision in McKin- ney was binding on the Tribunal, and, as such, should have dictated a finding that paragraph 15(1)(c) of the CHRA was saved by section 1 of the Charter. According to Air Canada and ACPA, there are no factual or evidentiary differ- ences in this case that are sufficiently material as to justify a different conclusion on the section 1 issue. 99 The applicants contend that the only real change that had taken place be- tween the time of the Supreme Court’s decision in McKinney and the hearing before the Tribunal in this case was that mandatory retirement had been abol- ished in Ontario, a development that occurred after the termination of Messrs. Vilven and Kelly’s employment with Air Canada. This single development did not, in the applicants’ view, permit the Tribunal to refuse to follow McKinney. 100 Our legal system operates on the principle of stare decisis. That is, in the interest of providing certainty to the law, decisions of appellate courts are bind- 236 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

ing on trial courts and should ordinarily be followed in cases involving similar facts. 101 While recognizing that Supreme Court of Canada decisions are unquestiona- bly binding on both the Tribunal and on this Court, there are four reasons why the Supreme Court’s decisions in McKinney and its companion cases should not dictate the result of this case. These are: 1. The significant differences between the legislative provisions in issue; 2. The clear indication in McKinney that the Supreme Court did not intend that the decision be the final word on the subject of mandatory retirement for all time; 3. The differences in the evidentiary records that were before the Supreme Court and the Tribunal; and 4. The developments in public policy that have occurred since Mc- Kinney was decided. 102 Each of these reasons will be discussed in turn.

i) The Differences Between the Legislative Provisions 103 While there are similarities between paragraph 15(1)(c) of the CHRA and the provisions of the Ontario and British Columbia human rights legislation that were at issue in McKinney and Harrison, there are also significant differences in the legislation. 104 The Ontario Human Rights Code provision under consideration in McKin- ney contained a general prohibition against age discrimination in employment. “Age” was defined in section 9 of the Code as being “an age that is eighteen years or more and less than sixty-five years”. As a result, those over the age of 65 did not enjoy the protection of the Code. 105 The provision of the British Columbia Human Rights Act at issue in Harri- son defined “age” as being “an age of 45 years or more and less than 65 years”, with a similar result. 106 There are undoubtedly similarities between these provisions and paragraph 15(1)(c) of the CHRA, which provides that: 15. (1) It is not a discriminatory 15. (1) Ne constituent pas des ac- practice if tes discriminatoires: ...... Vilven v. Air Canada Anne Mactavish J. 237

(c) an individual’s employment is c) le fait de mettre fin a` l’emploi terminated because that individual d’une personne en appliquant la has reached the normal age of re- r`egle de l’ˆage de la retraite en tirement for employees working in vigueur pour ce genre d’emploi ... positions similar to the position of that individual ... 107 None of these legislative provisions mandate retirement at a specified age. All are permissive provisions which limit the protection offered by relevant leg- islation in the employment context. 108 ACPA and Air Canada submit that paragraph 15(1)(c) of the CHRA is more readily defensible, as it is narrower than section 9 of the Ontario Human Rights Code. As Justice Wilson observed in her dissenting judgment in McKinney, sec- tion 9 of the Code permits all forms of workplace age discrimination against those over 65, and not just their mandatory retirement: at para. 350. In contrast, the exception created by paragraph 15(1)(c) of the CHRA relates only to the issue of mandatory retirement. 109 I agree that in this respect, paragraph 15(1)(c) of the CHRA is narrower than section 9 of the Ontario Human Rights Code. However, there are other signifi- cant differences between paragraph 15(1)(c) of the CHRA, and the provisions of the Ontario and British Columbia human rights legislation that were in issue in McKinney and Harrison that have a bearing on whether paragraph 15(1)(c) is saved by section 1 of the Charter. 110 First of all, the legislative history and objectives of each provision is differ- ent. Justice La Forest discussed the legislative history and objectives of section 9 of the Ontario Human Rights Code in McKinney. While noting that concern had been expressed by legislators for not affording protection in the employment sector to those over 65, in the end, “other considerations predominated”. These included “the potential for delayed retirement and delayed benefits, as well as the effect on hiring and personnel practices, and the impact on youth unemploy- ment”: at para. 94. 111 In contrast, when the CHRA was before Parliament, Minister of Justice Ron Basford and Assistant Deputy Minister Barry Strayer testified that the intent of paragraph 15(1)(c) was to leave the issue of a mandatory retirement age in the private sector to be negotiated between employers and employees: see Vilven #1 at paras. 159-161 and 243-247. 112 Moreover, in both the Ontario and British Columbia human rights legisla- tion, the provincial Legislatures specifically identified the age at which the pro- tection afforded by the law should cease being available to employees. Parlia- ment did not make such a policy choice in enacting paragraph 15(1)(c). Rather, it elected to delegate the choice of age at which employees will cease to enjoy 238 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

the protection of the CHRA to employers employing a particular class of workers. 113 That is, it is employers who will decide what the “normal age of retirement” will be for various types of positions. This decision may be arrived at through the collective bargaining process, or may result from the unilateral imposition of employer retirement policies. In practice, paragraph 15(1)(c) of the CHRA ap- plies primarily to private sector employers, as the federal government abolished mandatory retirement for its employees in the 1980’s. 114 There is another difference between the legislation at issue in this case and that at issue in McKinney. In McKinney, the Supreme Court identified 65 as the “normal age of retirement” in Canadian society: at para. 106. Thus the legisla- tive provisions at issue in both McKinney and Harrison conformed to this socie- tal norm. In contrast, paragraph 15(1)(c) of the CHRA permits the imposition of retirement on employees at an age below 65, so long as it accords with the “nor- mal age of retirement” for a particular type of position. 115 The younger the mandatory age of retirement, the greater the adverse effects will be for those who have been unable to accumulate sufficient financial re- sources or pensionable earnings prior to being compelled to retire. The labour economists testifying before the Tribunal agreed that this group will be dispro- portionately made up of women and immigrants. 116 Further, as I observed in Vilven #1, paragraph 15(1)(c) of the CHRA is an unusual provision to find in human rights legislation, in that it allows for feder- ally-regulated employers to discriminate against their employees on the basis of age, as long as that discrimination is pervasive within a particular industry: at para. 1. 117 The delegation of the choice of the permissible mandatory retirement age to private sector industry players has another consequence for federally-regulated employees - one not felt by those working in either Ontario or British Columbia at the time that McKinney and Harrison were decided. 118 That is, employees in both Ontario and British Columbia could readily have discovered the age at which they would cease to enjoy the protection of the relevant provincial human rights legislation. In contrast, paragraph 15(1)(c) of the CHRA does not clearly inform employees of their rights. The uncertainty and practical difficulties that the wording of paragraph 15(1)(c) creates are illus- trated by the facts of this case. 119 In order to understand his or her rights, a federally-regulated employee would have to know which positions were “similar to the position of that indivi- dual”. This would require the employee to properly identify the appropriate comparator group. This is not an easy task, even for legally-trained individuals familiar with human rights principles. Vilven v. Air Canada Anne Mactavish J. 239

120 Indeed, in this case, the Tribunal determined that the appropriate comparator group for the purposes of the paragraph 15(1)(c) analysis was “pilots who fly with regularly scheduled, international flights with [...] major international air- lines”: see Tribunal decision #1 at para. 55. 121 On judicial review, I concluded that the Tribunal had erred in principle in coming to this conclusion, with the result that its choice of comparator was un- reasonable. I found that the proper comparator should be “pilots working for Canadian airlines who fly aircraft of varying sizes and types, transporting pas- sengers to both domestic and international destinations, through Canadian and foreign airspace”: Vilven #1, at para. 112. 122 Even if the individual was able to properly identify the appropriate compara- tor group, and to identify which positions were similar to his or her own job, the employee would then have to assemble the necessary information as to the num- ber of individuals occupying similar positions with other employers. The indivi- dual would also have to be able to find out what the retirement policies were governing these other employees. This would be necessary to determine whether there was a “normal age of retirement” for these types of positions, and what that age was. 123 Numerical information as to the number of individuals employed in specific positions is often highly sensitive proprietary information that may not be read- ily accessible to employees of other companies. Indeed, there was evidence before the Tribunal in this case as to the difficulties that Messrs. Vilven and Kelly encountered in trying to gather this type of information from Air Canada’s competitors. By the time the case came before the Tribunal, the record in this regard was still not complete. 124 There is a further consideration that distinguishes paragraph 15(1)(c) of the CHRA from the provisions of the Ontario and British Columbia human rights legislation at issue in McKinney and Harrison. That is, the upper age limit on the protection against age discrimination specified in the provincial legislation ap- plied equally to all employees working in the province in question. In contrast, the age limit contemplated by paragraph 15(1)(c) of the CHRA may vary from industry to industry and from position to position. 125 Moreover, unlike the provincial legislation at issue in McKinney and Harri- son, paragraph 15(1)(c) of the CHRA permits a single dominant player within an industry to effectively set the normal age of retirement for the entire industry. Once again, this distinguishing feature is illustrated by the facts of this case. 126 Other Canadian airlines do not require that their pilots retire at age 60. At the time that Messrs. Vilven and Kelly were forced to retire from Air Canada, sev- eral Canadian airlines allowed their pilots to fly until they were 65, and one had no mandatory retirement policy whatsoever: Vilven #1, at para. 173. 240 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

127 However, Air Canada occupies a dominant position within the Canadian air- line industry, employing the majority of pilots flying aircraft of varying sizes and types, transporting passengers to both domestic and international destina- tions through Canadian and foreign airspace. As a result, Air Canada (with ACPA) is able to set the industry norm, and can effectively determine the ‘nor- mal age of retirement’ for all Canadian pilots for the purposes of paragraph 15(1)(c) of the Act: see Vilven #1, at para. 171. 128 In other words, paragraph 15(1)(c) of the Act allows Air Canada and ACPA’s own discriminatory conduct to provide them with a defence to Messrs. Vilven and Kelly’s human rights complaints: see Vilven #1, at para. 313. 129 None of these issues were considered by the Supreme Court in McKinney and Harrison in determining whether the legislation at issue in those cases was demonstrably justifiable under section 1 of the Charter. The differences between the provisions of the Ontario and British Columbia human rights legislation and paragraph 15(1)(c) of the Canadian Human Rights Act are sufficiently material as to justify the finding that the Supreme Court’s decision in McKinney should not automatically dictate the result of a section 1 Charter analysis in this case.

ii) McKinney did not Purport to be the Final Word on the Subject of Mandatory Retirement 130 The second reason for concluding that McKinney does not dictate the result in this case is that the majority decision in McKinney did not purport to be the final word on the subject of mandatory retirement for all time. 131 The constitution is a “living tree capable of growth and expansion within its natural limits”. The result of this is that constitutional rights are subject to changing judicial interpretations over time: see Edwards v. Canada (Attorney General) (1929), [1930] A.C. 124 (Canada P.C.) at p. 136, per Lord Sankey. 132 However, as the Ontario Superior Court observed in Bedford v. Canada (Attorney General), 2010 ONSC 4264, [2010] O.J. No. 4057 (Ont. S.C.J.), while the Supreme Court of Canada has the power to revisit its earlier decisions, “lower courts must only do so in very limited circumstances”: at para. 78. 133 As to what those limited circumstances may be, the Court in Bedford quoted comments in Wakeford v. Canada (Attorney General) (2001), 81 C.R.R. (2d) 342, [2001] O.J. No. 390 (Ont. S.C.J.), aff’d (2001), 156 O.A.C. 385 (Ont. C.A.), leave to appeal to S.C.C. refused, [2002] S.C.C.A. No. 72 (S.C.C.). There, Justice Swinton stated that where a decision of the Supreme Court is squarely on point, “there must be some indication - either in the facts pleaded or in the decisions of the Supreme Court - that the prior decision may be open for reconsideration...: at para.14. 134 As was explained earlier, I am not persuaded that McKinney and the other Supreme Court mandatory retirement jurisprudence is “squarely on point”. In Vilven v. Air Canada Anne Mactavish J. 241

any event, the Supreme Court clearly indicated in McKinney that it did not in- tend that its judgment on the section 1 issue be the final word on the subject. 135 Justice La Forest observed that “the ramifications of mandatory retirement on the organization of the workplace and its impact on society generally are not matters capable of precise measurement”. He went on to state that “the effect of its removal by judicial fiat is even less certain”. He noted that decisions made in relation to such matters “must inevitably be the product of a mix of conjecture, fragmentary knowledge, general experience and knowledge of the needs, aspira- tions and resources of society, and other components”: all quotes from McKin- ney at para. 104. 136 In discussing the expert evidence provided by labour economists with re- spect to the potential consequences of abolishing mandatory retirement, Justice La Forest observed that mandatory retirement could not be looked at in isola- tion, and that, according to the experts, “the repercussions of abolishing mandatory retirement would be felt ‘in all dimensions of the personnel function: hiring, training, dismissals, monitoring and evaluation, and compensation’”: at para. 109. Consequently, Justice La Forest stated that “it should not be alto- gether surprising that the Legislature opted for a cautious approach to the mat- ter”: at para. 112. 137 However, in the very next paragraph, Justice La Forest went on to note that mandatory retirement had been abolished in a number of jurisdictions, albeit by legislative choice rather than judicial fiat, and that the apprehended effects had not resulted. He observed that “we do not really know what the ramifications of these new schemes will be and the evidence is that it will be some 15 to 20 years before a reliable analysis can be made”: at para. 113, emphasis added. 138 Thus, Justice La Forest’s statement that he was “not prepared to say that the course adopted by the Legislature [...] is not one that reasonably balances the competing social demands which our society must address” was specifically made in the social and historical context of the early 1990’s: at para. 123. He clearly left the issue open for revisitation in the future, when reliable evidence became available as to what actually happened when mandatory retirement was abolished. 139 Where earlier Supreme Court decisions can and should be revisited, “such revisitations must necessarily commence at the trial court level”: Leeson v. University of Regina, 2007 SKQB 252, 301 Sask. R. 316 (Sask. Q.B.), at para. 9. 140 This case thus falls within the exceptional circumstances discussed in Wake- ford. It was open to the Tribunal to revisit the issue of mandatory retirement as it related to paragraph 15(1)(c) of the Canadian Human Rights Act, in light of more recent evidence. 242 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

141 This then takes us to the third distinguishing feature of this case, which is the differences in the evidentiary records that were before the Supreme Court in McKinney and the Tribunal in this case.

iii) The Differences in the Evidentiary Records 142 Supreme Court jurisprudence may also be revisited where there are “new facts that may have called into question the basis for the Supreme Court deci- sion”: see Bedford, at para. 80. 143 In Leeson, the Court considered when it is appropriate for a lower court to revisit the decisions of a higher court. It is noteworthy that this discussion took place in relation to a Charter challenge brought by university professors to a provision of The Saskatchewan Human Rights Code, S.S.1979, c. S-24.1, limit- ing the protection against age discrimination provided by the Code to those under 65. This was essentially the issue that was before the Supreme Court of Canada in McKinney. 144 The Court addressed the professors’ argument that the social, political and economic assumptions underlying the McKinney decision were no longer valid. In this regard, the Court stated that “When such change is alleged, and there are at least some facts alleged which support such change, it is not appropriate to prevent the matter from proceeding on the basis of stare decisis”: Leeson, at para. 9. The Court went on, however, to dismiss the professors’ Charter chal- lenge on other grounds. 145 It has now been some 18 years since McKinney was decided, and approxi- mately 24 years since the evidentiary record would have been assembled in that case. The Supreme Court did not know what the ramifications of abolishing mandatory retirement would be when it decided McKinney. As will be discussed further on in these reasons, there is now expert evidence available as to the im- pact that the abolition of mandatory retirement has actually had for traditional labour market structures, including deferred compensation and pension schemes, seniority and tenure systems, and so on. 146 Consequently, I am satisfied that there are new facts available which call into question the factual underpinning of the Supreme Court’s decision in McKinney.

iv) The New Developments in Public Policy 147 Bedford also stated that Supreme Court jurisprudence could be revisited where there were “new developments in public policy ... that may have called into question the basis for the Supreme Court decision”: at para. 80. 148 There have been developments in both public policy and non-Charter human rights jurisprudence that further call into question the basis for the Supreme Court decisions in McKinney and related cases. Vilven v. Air Canada Anne Mactavish J. 243

149 Numerous studies have been carried out since McKinney with respect to the effects of abolishing mandatory retirement in Canada. Indeed, the author of the majority decision in McKinney - Justice La Forest himself - examined the issue in his role as Chair of the Canadian Human Rights Act Review Panel. This Panel recommended 10 years ago that there should no longer be blanket exemp- tions for mandatory retirement policies in the Canadian Human Rights Act: see the Report of the Canadian Human Rights Act Review Panel, Promoting Equal- ity: A New Vision, (Ottawa: Canadian Human Rights Act Review Panel, June 2000), at p.119. 150 While recognizing that further study was required in order to develop alter- natives to mandatory retirement, the Report of the Canadian Human Rights Act Review Panel emphasized that such studies should keep equality issues in mind. Significantly, the Report says that “Employers should not be able to justify forc- ing someone to retire simply because this has been the normal age of retirement for similar jobs” (emphasis added). According to the authors, “This is a very arbitrary approach that incorporates the types of historical assumptions that human rights legislation is supposed to eliminate”: at p.121. 151 The Report does accept that mandatory retirement may be justified in certain workplaces, citing the Canadian Forces as an example. However, it recommends that “In the absence of blanket mandatory retirement defences in the Act, the government should require employers to justify their mandatory retirement poli- cies with a bona fide occupational requirement”: at pp.120-121. 152 The Report of the Canadian Human Rights Act Review Panel reflects the fact that societal attitudes towards age discrimination have evolved since Mc- Kinney was decided. As the Ontario Superior Court observed in Assn. of Justices of Peace of Ontario v. Ontario (Attorney General) (2008), 92 O.R. (3d) 16, [2008] O.J. No. 2131 (Ont. S.C.J.), (“Justices of the Peace”), “society’s under- standing of age discrimination, prohibited by the Charter, has evolved to the extent that practices considered acceptable 20 years ago are now prohibited”: at para. 177. 153 In addition, post-McKinney Supreme Court of Canada human rights jurispru- dence in the non-Charter context has reinforced the need for employers to avoid generalized assumptions as to the capacity of individual employees. 154 That is, in Meiorin, cited above, and British Columbia (Superintendent of Motor Vehicles) v. British Columbia (Council of Human Rights), [1999] 3 S.C.R. 868, [1999] S.C.J. No. 73 (S.C.C.) (“Grismer”), the Supreme Court re- stated the test for discrimination, and imported the duty to accommodate into cases of direct discrimination under human rights codes. 155 In so doing, the Court emphasized the need for individualized assessments, in order to avoid stereotyping based upon proscribed grounds. In this regard, the Court stated that employers “must accommodate factors relating to the unique 244 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

capabilities and inherent worth and dignity of every individual, up to the point of undue hardship”: Meiorin at para. 62. 156 These circumstances further support the view that the Supreme Court’s deci- sion in McKinney should not dictate the result of a section 1 Charter analysis in this case.

v) Other Post-McKinney Mandatory Retirement Jurisprudence 157 Before leaving this issue, I would note that my conclusion that the Supreme Court’s decisions in McKinney and its companion cases do not require a finding that paragraph 15(1)(c) of the CHRA is saved by section 1 of the Charter is reinforced by a review of several lower court post-McKinney decisions. 158 These cases deal either with the constitutional validity of mandatory retire- ment policies or of legislation, and, in one case, deal specifically with the consti- tutional validity of paragraph 15(1)(c) of the Canadian Human Rights Act itself. In each of these cases, superior or appellate Courts in three different provinces have concluded that the contextual assumptions upon which the Supreme Court’s decision in McKinney was founded are no longer valid.

a) Greater Vancouver (Regional District) v. G.V.R.D.E.U. 159 The first of these decisions is the judgment of the British Columbia Court of Appeal in Greater Vancouver (Regional District) v. G.V.R.D.E.U., 2001 BCCA 435, 206 D.L.R. (4th) 220 (B.C. C.A.). This case did not involve a Charter chal- lenge to human rights legislation, but rather the review of an arbitrator’s deci- sion striking down an employer’s mandatory retirement policy. 160 In dismissing the employer’s appeal, the Court held that the mandatory re- tirement policy was discriminatory, and that the employer had not met its burden of establishing that the policy was justified under section 1 of the Charter. In coming to this conclusion, the Court was not persuaded that McKinney and sub- sequent decisions had decided that “all mandatory retirement policies in the pub- lic sector are saved under s.1 of the Charter simply because they do not contra- vene relevant provincial human rights legislation”: Greater Vancouver, at para. 120. 161 Of particular significance are the comments in Greater Vancouver with re- spect to the ongoing relevance of the McKinney decision. In this regard, the Court observed that McKinney was not intended to be a final determination of the mandatory retirement question, and that, as I have noted earlier, there were intimations in the reasons of the majority that the issue should be revisited in the future: at para. 28. 162 The majority decision in Greater Vancouver goes on to observe that “Since it is now 11 years since McKinney was decided, and since the issue of mandatory retirement is one of considerable importance and concern in our soci- Vilven v. Air Canada Anne Mactavish J. 245

ety, I respectfully suggest that the time for revisiting the issue is upon us”: at para. 28. 163 Under the heading “Time for Reconsideration”, the majority in Greater Van- couver conclude with the following cri de coeur urging the Supreme Court of Canada to reconsider the issue of mandatory retirement: Eleven years have now passed since McKinney was decided. The demographics of the workplace have changed considerably, not only with respect to the university community, but also in the workplace at large. At least two other countries, Australia and New Zealand have abolished mandatory retirement. Recent studies have been done on the effect of abol- ishing mandatory retirement in Canada and elsewhere. (See, for example, The Report of the Canadian Human Rights Act Review Panel [...] and On- tario Human Rights Commission, Time for Action: Advancing Human Rights for Older Ontarians (Toronto: Queen’s Printer for Ontario, 28 June 2001). The extent to which mandatory retirement policies impact on other equality rights, and on the mobility of the workforce, have become prominent social issues. The social and legislative facts now available may well cast doubt on the extent to which the courts should defer to legislative decisions made over a decade ago. The issue is certainly one of national importance.

b) Assn. of Justices of the Peace of Ontario v. Ontario (Attorney General) 164 Seven years later, the Ontario Superior Court was called upon to consider a constitutional challenge to legislation requiring that Justices of the Peace retire at age 70, rather than age 75, as is the case for judges: Justices of the Peace, above. 165 To the extent that much of the decision focuses on mandatory retirement as it relates to judicial independence, the decision is not directly on point. That said, the Court goes through a detailed discussion of the “striking change” that had taken place in Ontario with respect to mandatory retirement since the time that McKinney was decided, in both legislation and public attitudes: see paras. 33-45. The Court observed that where mandatory retirement had once been gen- erally accepted as a social norm, “it is now the exception, applicable to only a select few occupations for which it is viewed as necessary”: at para. 33. 166 After reviewing various studies and legislative initiatives advocating the ab- olition of mandatory retirement in Ontario, the Court concluded its analysis by observing that since McKinney was decided, “there has been a sea change in the attitude to mandatory retirement in Ontario, led by the efforts of the [Ontario Human Rights] Commission”. This attitudinal change had culminated in legisla- tive reform, with the Ontario Legislature having recognized that “mandatory re- tirement is a serious form of age discrimination”, leading to its abolition in both the public and private sectors in that province: at para. 45. 246 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

c) CKY-TV v. C.E.P., Local 816 167 The most recent and most directly relevant cases are a pair of decisions ren- dered first by a labour arbitrator, and then by the Manitoba Court of Queen’s Bench, expressly dealing with the constitutionality of paragraph 15(1)(c) of the CHRA. Both decisions conclude that paragraph 15(1)(c) violates subsection 15(1) of the Charter and that it is not saved by section 1. 168 CKY-TV v. C.E.P., Local 816 (Kenny Grievance), [2008] C.L.A.D. No. 92 (Man. Arb. Bd.) is the arbitral decision dealing with the mandatory retirement of a maintenance technician with CKY-TV at age 65 in accordance with a com- pany policy. The employee’s union grieved the termination of his employment, also challenging the constitutionality of paragraph 15(1)(c) of the CHRA. 169 In concluding that paragraph 15(1)(c) violated subsection 15(1) of the Char- ter and was not saved by section 1, Arbitrator Peltz found that the Supreme Court had proceeded on the basis of contextual assumptions in McKinney, which assumptions were no longer valid in light of the expert evidence before him. 170 The arbitrator’s section 1 analysis turned on the issue of minimal impair- ment, with the arbitrator concluding that the evidence before him did not estab- lish that “there is a reasonable basis for believing that the employment regime of pensions, job security, good wages and reasonable benefits requires the mainte- nance of mandatory retirement at age 65 or a predominant age”: at para. 216. 171 The arbitrator’s decision was subsequently confirmed by the Manitoba Court of Queen’s Bench: see CKY-TV v. C.E.P., Local 816, 2009 MBQB 252, [2009] M.J. No. 336 (Man. Q.B.). The Court agreed with the arbitrator that the em- ployer had not satisfied the minimal impairment component of the Oakes test, in light of the evidence in the record regarding current social and economic conditions. 172 The Court observed that the operation of paragraph 15(1)(c) was not limited to situations where unions or employees had negotiated or agreed to mandatory retirement at any particular age. Rather, the exception to the prohibition on age discrimination created by paragraph 15(1)(c) went “far beyond limiting the dis- criminatory practice to those situations where contracts are truly negotiated”: at para. 32. 173 Indeed, the Court found that paragraph 15(1)(c) “purports to permit an em- ployer to terminate a person’s employment simply by establishing or proving a ‘normal age of retirement’ for workers in similar positions”. As a consequence, the Court was satisfied that the arbitrator’s conclusion on the issue of minimal impairment was correct: at para. 32. Vilven v. Air Canada Anne Mactavish J. 247

d) Cooper v. Canada (Human Rights Commission) 174 Before leaving this issue, there is one other post-McKinney decision that bears comment. This is the decision of the Supreme Court in Cooper v. Canada (Human Rights Commission), [1996] S.C.J. No. 115 (S.C.C.) (“Bell and Cooper”). 175 Bell and Cooper is not technically a mandatory retirement decision, inas- much as the issue before the Supreme Court was whether either the Canadian Human Rights Commission or the Tribunal had jurisdiction to consider the con- stitutional validity of a provision of the CHRA. 176 What is noteworthy, however, is that the statutory provision at issue in Bell and Cooper was paragraph 15(1)(c) of the Act, and that the case arose in the context of human rights complaints brought by two former Canadian Airlines pilots. Messrs. Bell and Cooper alleged that they had been the victims of age discrimination when they were forced to retire from Canadian Airlines at the age of 60, in accordance with the provisions of their collective agreement. 177 The human rights complaints were investigated by the Commission, and the investigator found that 60 was the normal age of retirement for airline pilots. However, before a decision could be made by the Commission with respect to the complaints, the Supreme Court released its decision in McKinney. The Com- mission subsequently advised the complainants that a Tribunal inquiry into their complaints was not warranted, and that the Commission was bound by McKinney. 178 As noted earlier, the issue that ultimately came before the Supreme Court was a jurisdictional one. The majority of the Court found that neither the Com- mission nor the Tribunal had the jurisdiction to consider the constitutional valid- ity of paragraph 15(1)(c) of the CHRA. Consequently, the majority did not ad- dress the significance of McKinney for Messrs. Bell and Cooper’s human rights complaints. 179 In their dissenting judgment, Justices McLachlin and L’Heureux-Dub´e found that both the Commission and the Tribunal had the power to consider whether the Charter rendered the normal age of retirement defence invalid. 180 More importantly for the purposes of this case, the dissenting judges rejected the airline’s argument that McKinney provided a complete answer to Messrs. Bell and Cooper’s human rights complaints. They noted that “Everyone agrees that the issue of whether a section of the Canadian Human Rights Act has been invalidated by s. 15 of the Charter and s. 52 of the Constitution Act, 1982 is an important issue for the appellants and for Canadians generally”: at para. 69. 181 Justices McLachlin and L’Heureux-Dub´e did not accept the airline’s conten- tion that because McKinney held that age 65 was the normal age of retirement for the university professors, it necessarily followed that a statute providing for 248 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

retirement at the normal age for the occupation in question must also be saved under section 1. 182 According to the dissenting judges, “this argument oversimplifies the pro- cess envisaged under s. 1 of the Charter”. They stated that “Even if one were to accept the doubtful submission that the conclusion that the infringement in Mc- Kinney was justified under s. 1 of the Charter solely on the ground that this was the normal age of retirement, one cannot conclude that that factor alone would suffice in all cases to justify an infringement of s. 15”: at para. 106. 183 Justices McLachlin and L’Heureux-Dub´e held that section 1 “is about much more than what is usual or ‘normal’”. They were of the view that a usual prac- tice “may be unjustifiable, having regard to the egregiousness of the infringe- ment or the insubstantiality of the objective alleged to support it”. As a result, each case had to be examined in light of its own circumstances: at para. 106. 184 Consequently, the dissenting judges found that the Commission had erred in concluding that McKinney presented a complete answer to Messrs. Bell and Cooper’s human rights complaints. 185 It is thus clear that for at least two judges of the Supreme Court, the decision in McKinney does not provide a complete answer to a challenge to the constitu- tional validity of paragraph 15(1)(c) of the CHRA.

C. Is Paragraph 15(1)(c) of the CHRA Justifiable Under Section 1 of the Charter? 186 Having thus determined that McKinney does not provide a complete answer to Messrs. Vilven and Kelly’s Charter challenge, the question for this Court is whether the Tribunal’s finding that paragraph 15(1)(c) of the CHRA is not saved by section 1 of the Charter is correct.

i) The Section 1 Analytical Framework 187 As was previously noted, the parties agree that the Oakes test should be ap- plied by the Court in determining whether paragraph 15(1)(c) of the CHRA is saved by section 1 of the Charter. In order to satisfy this test, Air Canada and ACPA must demonstrate that: (1) the objective of the legislation is pressing and substantial; and that (2) the impairment of the right is proportional to the importance of the objective in that (a) the means chosen are rationally connected to the legisla- tive objective; (b) the means chosen impairs the Charter right minimally or “as little as possible”; and Vilven v. Air Canada Anne Mactavish J. 249

(c) there is a proportionality between any deleterious effects of the legislation and its salutary objective, so that the at- tainment of the legislative goal is not outweighed by the abridgment of the right in question. See Oakes at paras. 69 and 70. See also R. v. Videoflicks Ltd., [1986] 2 S.C.R. 713, [1986] S.C.J. No. 70 (S.C.C.); RJR-Macdonald Inc. c. Canada (Procureur g´en´eral), [1995] 3 S.C.R. 199, [1995] S.C.J. No. 68 (S.C.C.); Irwin Toy Ltd. c. Qu´ebec (Procureur g´en´eral), [1989] 1 S.C.R. 927, [1989] S.C.J. No. 36 (S.C.C.). 188 The starting point of a section 1 inquiry is to identify the objectives of the law, in order to determine whether these objectives are sufficiently important as to warrant the limitation of a constitutional right: see Stoffman, above, at para. 50. 189 In order to identify the objectives of the law, the Court must examine the nature of the social problem that the legislation addresses. The context of the impugned legislation “is also important in order to determine the type of proof which a court can demand of the legislator to justify its measures under section 1”: see Thomson Newspapers Co. v. Canada (Attorney General), [1998] 1 S.C.R. 877, [1998] S.C.J. No. 44 (S.C.C.), at paras. 87 and 88. As the Supreme Court observed in Eldridge v. British Columbia (Attorney General), [1997] 3 S.C.R. 624, [1997] S.C.J. No. 86 (S.C.C.), “where the legislation under consid- eration involves the balancing of competing interests and matters of social pol- icy, the Oakes test should be applied flexibly, and not formally or mechanisti- cally”: at para. 85. 190 The Supreme Court also observed in Eldridge that the application of the Oakes test “requires close attention to the context in which the impugned legis- lation operates”: at para. 85. 191 Relevant contextual factors may include the nature of the harm addressed, the vulnerability of the group protected, subjective fear and apprehension of harm, and the nature and importance of the infringed activity: see R. v. Bryan, 2007 SCC 12, [2007] 1 S.C.R. 527 (S.C.C.), at para. 10. See also Thomson Newspapers Co., and Harper v. Canada (Attorney General), 2004 SCC 33, [2004] 1 S.C.R. 827 (S.C.C.). 192 Although this Charter challenge arises in the context of the forced retire- ment of two Air Canada pilots, I agree with the parties that my section 1 analysis should not be restricted to this context. Messrs. Vilven and Kelly were not de- nied the protection of the CHRA because they were airline pilots working for Air Canada, but because they had reached the “normal age of retirement” for similar positions, as contemplated by paragraph 15(1)(c) of the CHRA. 193 As the Supreme Court observed in McKinney, to limit a section 1 analysis to the specific factual context in which the challenge arises would be inconsistent 250 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

with the Oakes test, which requires a consideration of whether the measures adopted have been carefully designed to achieve the objective in question. Para- graph 15(1)(c) of the CHRA is not restricted to the airline industry, and while evidence relating to the specific situation of Air Canada pilots may “serve as an example to demonstrate the reasonableness of the objectives, it must not be con- fused with those objectives”: McKinney, at para. 91. 194 With these principles in mind, I now turn to consider paragraph 15(1)(c) of the CHRA in light of the Oakes test.

ii) What are the Objectives of Paragraph 15(1)(c) of the CHRA? 195 The first element of the Oakes test requires the Court to identify the objec- tives of the legislative provision in question. I identified the objectives of para- graph 15(1)(c) of the Canadian Human Rights Act in Vilven #1 in the following terms: [243] The Tribunal described the purpose of paragraph 15(1)(c) of the Cana- dian Human Rights Act as being “to strike a balance between the need for protection against age discrimination and the desirability of those in the workplace to bargain for and organize their own terms of employment ...”: at para. 98. [244] The Tribunal’s description of the purpose of the provision is accurate, as far as it goes. A more fulsome description of the purpose of the impugned legislation was provided by the arbitrator in the CKY-TV case cited earlier. In this regard, the arbitrator observed that the legislative objective underlying paragraph 15(1)(c) of the Act “was to protect a longstanding employment regime”. [245] Referring to the comments of Minister Basford cited earlier in these reasons, the arbitrator noted that the Minister had made reference to the “‘many complex social and economic factors’ involved in mandatory retire- ment”, leading the arbitrator to conclude that “the government’s stated pref- erence was to continue the traditional approach whereby the issue in the pri- vate sector was addressed between employers and employees”: CKY-TV, at para.. 210. [246] The arbitrator further held that the objective of paragraph 15(1)(c) of the Act was to allow for the continuation of a socially desirable employment regime, which included pensions, job security, wages and benefits. This was to be achieved by allowing mandatory retirement “if the age matched the predominant age for the position”: CKY-TV, at para.. 211. [247] It is clear from the statements made by Minister Basford and Assistant Deputy Minister Strayer at the time that the Canadian Human Rights Act was enacted that paragraph 15(1)(c) of the Act was intended to create an excep- tion to the quasi-constitutional rights otherwise provided by the Act, so as to allow for the negotiation of mandatory retirement arrangements between em- Vilven v. Air Canada Anne Mactavish J. 251

ployers and employees, particularly through the collective bargaining process. 196 No appeal was taken from my decision in Vilven #1, and ACPA and Air Canada do not now take issue with my characterization of Parliament’s objec- tives in enacting paragraph 15(1)(c) of the CHRA. Rather, their argument is that the Tribunal erred by failing to find that these objectives were pressing and substantial.

iii) Are The Objectives of Paragraph 15(1)(c) of the CHRA Pressing and Substantial? 197 The Tribunal found that Parliament’s objectives in enacting paragraph 15(1)(c) of the CHRA were neither pressing nor substantial, as the alternatives to mandatory retirement used in other jurisdictions preserve the benefits of current labour market structures, such as deferred compensation and pension schemes, without discriminating on the basis of age. In light of this, the Tribunal asked how the goal of permitting freedom of contract could be sufficiently important as to justify overriding a constitutional right: Tribunal decision #2, at para. 45. 198 The Tribunal further found that the link between mandatory retirement and the benefits traditionally associated with it was not as strong as was once be- lieved: at para. 47. As these benefits could be achieved without mandatory re- tirement, the Tribunal held that it was “difficult to see how permitting it to be negotiated in the workplace is important enough to warrant the violation of equality rights that was identified by the Federal Court in the present case”: at para. 49. 199 Having regard to the aging of the workforce, and the fact that many individ- uals want or need to continue working, the Tribunal concluded that preventing, rather than permitting, age discrimination after the normal age of retirement has become a pressing and substantial need in society: at para. 48. 200 In my view, the Tribunal erred by conflating elements of the proportionality analysis with its assessment of whether Parliament’s objectives in enacting para- graph 15(1)(c) of the CHRA were pressing and substantial. 201 I have previously found that the objective of paragraph 15(1)(c) was to per- mit the negotiation of mandatory retirement arrangements between employers and employees, particularly through the collective bargaining process, so as to allow for the preservation of socially desirable employment regimes which in- clude matters such as pensions, job security, wages and benefits. Such an objec- tive continues to be a pressing and substantial one in our society. Indeed, I note that this point was conceded by the union in CKY-TV. 202 The means chosen by Parliament to achieve this objective was the enactment of the permissive provision in the CHRA that allows mandatory retirement where the retirement age matches the “normal age of retirement” for similar po- 252 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

sitions. Whether the means chosen to attain the objectives of paragraph 15(1)(c) can still be shown to be rationally connected to the preservation of socially de- sirable employment regimes in light of current social science evidence is another question altogether, one that properly forms part of the proportionality analysis. 203 Similarly, the aging of the workforce and the fact that many individuals may want or need to continue working are matters that should properly form part of the minimal impairment analysis. These matters also factor into the assessment of whether there is proportionality between the deleterious effects of the legisla- tion and its salutary objectives. 204 Having concluded that Parliament’s objectives in enacting paragraph 15(1)(c) of the CHRA are still pressing and substantial, it remains to be deter- mined whether the means employed by Parliament to achieve this objective are proportional, having regard to the remaining elements of the Oakes test.

iv) The Proportionality Component of the Oakes Test 205 Once the objectives of the legislation in issue have been identified and are determined to be pressing and substantial, the impugned law is then subjected to the proportionality test. This assesses whether the means chosen by Parliament to achieve its objectives are proportional or appropriate to the ends. Context in- fuses every aspect of this component of the Oakes test: Health Services & Support-Facilities Subsector Bargaining Assn. v. British Columbia, 2007 SCC 27, [2007] S.C.J. No. 27 (S.C.C.), at para. 195. 206 At this stage of the analysis, the objectives of the legislation are to be bal- anced against “the nature of the right it violates, the extent of the infringement and the degree to which the limitation furthers other rights or policies of impor- tance in a free and democratic society”: Stoffman, at para. 50, per Justice Wilson dissenting, but not on this point. 207 Put another way, the task for the Court at this stage of the inquiry is to deter- mine whether impugned legislation is “carefully designed, or rationally con- nected, to the objective”. Legislation “must impair the right in issue as little as possible”, and the effect of the legislation “must not so severely trench on indi- vidual or group rights that the legislative objective, albeit important, is neverthe- less outweighed by the abridgment of rights”: see R. v. Edwards Books, above, at para.117.

v) Rational Connection 208 The first question, then, is whether there is a rational connection between the legislative objective and the provision in the CHRA that permits mandatory re- tirement at the “normal age of retirement” for similar positions. 209 As Chief Justice Dickson observed in Canada (Human Rights Commission) v. Taylor, [1990] 3 S.C.R. 892, [1990] S.C.J. No. 129 (S.C.C.), “... as long as the Vilven v. Air Canada Anne Mactavish J. 253

challenged provision can be said to further in a general way an important gov- ernment aim it cannot be seen as irrational”: at para. 56, emphasis added. 210 Justice Wilson observed in her dissenting opinion in Stoffman that the ra- tional connection element of the proportionality test is meant to “engage the Court in an examination of whether government is proceeding logically in the pursuit of its aims”. She noted that “all the rational connection branch of s. 1 requires is a demonstration that there is some logical connection, however slight, between the objective and the means by which it is sought to be achieved” [em- phasis added]. She did, however, go on to note that “the quality and extent of the connection becomes crucial” in relation to the last two elements of the Oakes test: all quotes at para.118. 211 The Supreme Court has recently stated that the party invoking section 1 of the Charter must show that it is “reasonable to suppose that the limit may fur- ther the goal, not that it will do so.”: Hutterian Brethren of Wilson Colony v. Alberta, 2009 SCC 37, [2009] 2 S.C.R. 567 (S.C.C.), at para. 48, emphasis added. 212 In this case, the Tribunal noted my observation in Vilven #1 that the ‘normal age of retirement’ rule in paragraph 15(1)(c) allows a dominant player in an industry to set the mandatory retirement age for the entire industry. According to the Tribunal, the result is that employees in smaller companies, who have not negotiated mandatory retirement in exchange for wage and pension benefits, could still be subject to the mandatory retirement age set by the dominant indus- try player: at paras. 54-56. 213 The Tribunal concluded that the ‘normal age of retirement’ criterion was not rationally connected to the goal of allowing for negotiated mandatory retire- ment, as it permitted mandatory retirement to be imposed upon workers without negotiation, as long as the retirement age corresponded to the industry norm. 214 Keeping in mind Chief Justice Dickson’s admonition in Taylor that a legisla- tive provision cannot be seen to be irrational as long as it can be said to further an important government aim in a general way, I am satisfied that there is in- deed a logical connection between paragraph 15(1)(c) of the CHRA and the objectives that it seeks to accomplish. I note that my conclusion in this regard is consistent with the finding of the Manitoba Court of Queen’s Bench in CKY-TV: at para. 27. 215 Moreover, it is clear that in at least some workplaces, mandatory retirement is negotiated through the collective bargaining process in exchange for wage, pension, and other benefits. To the extent that paragraph 15(1)(c) eliminates a legal barrier to mandatory retirement, it is rationally connected to the legislative objective of preserving socially desirable employment regimes that are benefi- cial to both employers and employees. 254 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

216 As the Tribunal noted, there is a real question as to the extent to which mandatory retirement is a necessary and integral part of such labour market structures. However, the fact that mandatory retirement may not be essential to the preservation of socially desirable employment regimes does not mean that paragraph 15(1)(c) of the CHRA fails the rational connection test, as mandatory retirement is logically connected to the maintenance of such schemes: see Mc- Kinney, at para. 63. 217 As was noted earlier, the connection between impugned legislation and its objectives need only be slight. The quality and extent of the connection are rele- vant, and indeed crucial considerations, but the place for such considerations to be taken into account is in relation to the second and third elements of the Oakes proportionality test, to which I now turn.

vi) Minimal Impairment 218 The next stage of the Oakes analysis requires the Court to examine whether paragraph 15(1)(c) of the CHRA impairs the Charter rights of workers over the normal age of retirement for their type of position minimally or “as little as possible”: R. v. Edwards Books, above, at para. 117.

a) The Applicable Legal Principles 219 As the Supreme Court observed in Health Services and Support, the contex- tual factors relevant to a particular case affect the overall degree of deference to be afforded to the government in determining whether the legislative measures in issue are demonstrably justified: at para. 195. Greater deference should be shown to Parliament where the Court is examining a legislative provision that attempts to strike a balance between the claims of competing groups on the basis of conflicting social science evidence, as opposed to cases involving a contest between an individual and the State: see Irwin Toy Ltd., above, at para. 79 and RJR-Macdonald, above, at para. 135. 220 When dealing with such polycentric issues, “considerable flexibility must be accorded to the government to choose between various alternatives”: T´etreault- Gadoury v. Canada (Employment & Immigration Commission), [1991] 2 S.C.R. 22, [1991] S.C.J. No. 41 (S.C.C.), at para. 47. This is especially so when dealing with policy issues in the field of labour relations, which are generally best left to the political process: R. c. Advance Cutting & Coring Ltd., 2001 SCC 70, [2001] 3 S.C.R. 209 (S.C.C.), at para. 257. 221 As the Supreme Court observed in McKinney, the question under the relaxed minimal impairment test articulated in Irwin Toy Ltd. is “whether the govern- ment had a reasonable basis for concluding that it impaired the relevant right as little as possible given the government’s pressing and substantial objectives”: at para. 68, emphasis added. Vilven v. Air Canada Anne Mactavish J. 255

222 This does not “absolve the judiciary of its constitutional obligation to scruti- nize legislative action to ensure reasonable compliance with constitutional stan- dards”. It does, however, require that the reviewing court utilize greater circum- spection in such cases: McKinney, at para. 104. 223 The question of minimal impairment, once decided, is not necessarily cast in stone for all time. Rather, it must be assessed in the context of the current social and historical context: see McKinney, at para. 123. 224 As the British Columbia Court of Appeal observed in Greater Vancouver, the Legislature may have had limited facts at its disposal, such that no legislative deference will be appropriate. Alternatively, the Court may be presented with arguments that were not considered by the Legislature in making its policy choices: at para. 84. 225 Thus the question for this Court is whether, in light of the evidence before it, the Tribunal was correct in finding that Air Canada and ACPA had failed to demonstrate that the government continued to have a reasonable basis for con- cluding that paragraph 15(1)(c) of the CHRA interferes as little as possible with the equality rights of workers over the normal age of retirement, having regard to the government’s pressing and substantial objectives: see the arbitrator’s deci- sion in CKYTV at para. 216, and the Manitoba Court of Queen’s Bench decision at para. 31.

b) The Tribunal’s Findings with Respect to the Minimal Impairment Issue 226 The Tribunal found that paragraph 15(1)(c) did not minimally impair older workers’ equality rights as far less intrusive options could be, and are used, rather than simply allowing for mandatory retirement. These other legislative options include bona fide occupational requirement and bona fide retirement or pension plan justifications. According to the Tribunal, the use of these types of less intrusive measures have not caused the collapse of employee pension and benefit schemes in the jurisdictions where they were in effect. The Tribunal did, however, find that a more carefully tailored provision might satisfy the minimal impairment component of the Oakes test: Tribunal decision #2, at paras. 57-64.

c) Air Canada and ACPA’s Arguments with Respect to Minimal Impairment 227 Air Canada and ACPA submit that the Tribunal erred by requiring that the government select the least intrusive possible option, rather than one that fell within a range of reasonable options. They say that the Supreme Court had al- ready determined in McKinney and Harrison that limiting the availability of mandatory retirement to cases where age could be shown to be a bona fide occu- pational requirement could not satisfy the objectives of similar provisions in On- tario and British Columbia human rights legislation. 256 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

228 The applicants further submit that the fact that other jurisdictions may have adopted different approaches to the issue of mandatory retirement simply shows that some provincial legislatures have struck a different balance in relation to a complex set of competing values: citing McKinney, at para. 123. 229 The task of the Tribunal was not, the applicants say, to step into the shoes of Parliament, and reweigh the pros and cons of mandatory retirement in light of the available social science evidence. Rather, the question for the Tribunal was whether the government had a reasonable basis for concluding that the im- pugned legislation impaired the relevant right as little as possible, having regard to the government’s pressing and substantial objectives: citing McKinney, at para.112, and Irwin Toy Ltd., at para. 81. 230 The applicants contend that the Tribunal also erred by failing to give due consideration to the existence of the collective agreement freely negotiated be- tween Air Canada and ACPA. They point out that the Supreme Court recog- nized in Dickason that collective agreements authorizing mandatory retirement can represent carefully constructed, fairly negotiated bargains between employer and employees, which can be indicative of the reasonableness of the practice. 231 Air Canada and ACPA point out that in Health Services and Support, the Supreme Court affirmed that values such as human dignity, equality, liberty, respect for the autonomy of the person and the enhancement of democracy are all complemented and promoted by collective bargaining: at para. 81. 232 The applicants contend that the Tribunal disregarded the benefits conferred by the collective agreement and the fact that the agreement reflected Charter values, including dignity of the individual. The Tribunal also failed to properly consider the fact that the collective agreement provided evidence of the reasona- bleness of the mandatory retirement policy. 233 Instead, the applicants say that the Tribunal approached its minimal impair- ment analysis as if it had a free hand in directing what Parliament’s choices should have been. In so doing, the Tribunal disregarded the admonition of the Supreme Court in McKinney that decision-makers should not lightly use the Charter to second-guess legislative decisions as to how quickly it should pro- ceed in moving forward toward the ideal of equality: citing McKinney, at para. 131.

d) The Expert Evidence 234 As the Supreme Court observed in Newfoundland (Treasury Board) v. N.A.P.E., 2004 SCC 66, [2004] 3 S.C.R. 381 (S.C.C.), the evidence led in sup- port of a section 1 justification will be very important to the outcome where the Court is dealing with matters that require close attention to context: at para. 55. 235 I will therefore start my analysis by examining the evidence that was before the Tribunal in relation to the minimal impairment issue. This primarily took the Vilven v. Air Canada Anne Mactavish J. 257

form of expert evidence from labour economists led by Air Canada and the Commission with respect to the justification for mandatory retirement. Neither side contested the expertise of the opposing witness in labour economics, specif- ically the economic theory underlying mandatory retirement. ACPA and Messrs. Vilven and Kelly chose not to lead any expert evidence on this issue. 236 Air Canada’s expert was Dr. H. Lorne Carmichael, a Professor of Economics at Queen’s University. Dr. Carmichael holds a PhD in Economics from Stanford University, and chairs the undergraduate studies program at Queen’s. Dr. Carmi- chael has written extensively on labour market institutions, and has also edited several leading economics journals. 237 The Commission’s expert was Dr. Jonathan Kesselman. Dr. Kesselman is a professor in the Public Policy Program at Simon Fraser University, and holds a Canada Research Chair in Public Finance. He has worked and published in the field for many years, and has also edited several leading journals in the field of public policy and taxation. 238 In order to put the evidence of the experts into context, it is helpful to start by recalling some of the key findings in the majority decision in McKinney with respect to the issue of minimal impairment. 239 Justice La Forest observed that by 1990, roughly 50% of the Canadian work force held positions that were subject to mandatory retirement, and that approxi- mately two-thirds of collective agreements provided for mandatory retirement at the age of 65: at para. 83. Sixty-five had become the “normal” age of retirement in Canada, and had become “part of the very fabric of the organization of the labour market in this country”: at para. 84. Mandatory retirement had profound implications for the structuring of pension plans, for fairness and security of tenure in the workplace, and for work opportunities for others. 240 Justice La Forest acknowledged that age had not been historically recog- nized as an unacceptable ground of discrimination, although he recognized that there had been “a profound alteration in society’s view of age discrimination in recent years and, in consequence, of mandatory retirement”: at paras. 85-86. 241 In finding that the Legislature had a reasonable basis for concluding that subsection 9(a) of the Code impaired older workers’ right to equality as little as possible, Justice La Forest characterized the issue of mandatory retirement as “a complex socio-economic problem that involves the basic and interconnected rules of the workplace throughout the whole of our society”: at para. 96. Mandatory retirement is part of “a complex, interrelated, lifetime contractual ar- rangement involving something like deferred compensation”, particularly in union-organized workplaces, where “seniority serves as something of a func- tional equivalent to tenure”: at para. 108. 242 Justice La Forest observed that the ramifications that abolishing mandatory retirement would have for the organization of the workplace, and for society in 258 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

general, were things that could not readily be measured: at para. 104. He antici- pated, however, that evidence as to the actual impact of the abolition of mandatory retirement would be available in 15-20 years, in light of the fact that by 1990, mandatory retirement had been abolished in several provinces: at para. 113. 243 The evidence of the labour economists in this case was given with the bene- fit of two decades of experience as to the impact that the abolition of mandatory retirement in Canada has actually had for organization of the workplace, includ- ing its impact on matters such as deferred compensation and seniority, pension and benefit schemes. This evidence seriously calls into question the assumption underlying the majority decision in McKinney that mandatory retirement is inex- tricably linked to the preservation of these beneficial employment regimes. 244 According to Dr. Kesselman, the real-world experience in the jurisdictions where mandatory retirement has been abolished for some time has shown that the abolition of mandatory retirement has not, in fact, led to the end of such beneficial workplace arrangements. None of the adverse consequences that have traditionally been expected to flow from the abolition of mandatory retirement have actually materialized in jurisdictions such as Manitoba and Quebec, where mandatory retirement was abolished many years ago. 245 Dr. Kesselman explained that one of the principal justifications for mandatory retirement has traditionally been that it allows for older employees to benefit from deferred compensation. Deferred compensation is the practice of paying workers less than their productivity would warrant in the earlier years of their employment, and more than their productivity would justify in the employ- ees’ later years. As part of such arrangements, most deferred compensation sys- tems (including Air Canada’s) provide pensions and other post-retirement bene- fits, the value of which increase with years of service. 246 Deferred compensation systems benefit both employers and employees. Em- ployees’ earnings rise over time. This promotes loyalty, as workers will want to stay with their employer for a long time in the expectation of rich salary and pension benefits down the road. This in turn encourages employers to invest in employee training, in the knowledge that employees will be around long enough to allow the employers to reap the rewards of their investment. 247 Another traditional justification for mandatory retirement is that the exis- tence of a fixed mandatory retirement age allows employers to plan for em- ployee turn-over, and frees up positions for younger workers. It avoids the need for close and potentially demeaning performance monitoring for employees whose productivity may have declined with age. It also imposes a cap on the number of years in which an older employee’s pay can exceed his or her produc- tivity, thereby encouraging more efficient agreements. Vilven v. Air Canada Anne Mactavish J. 259

248 Dr. Kesselman says that there are three flaws in the traditional justification for mandatory retirement. 249 The first flaw is that it assumes that agreements allowing for mandatory re- tirement are consensual arrangements between contracting parties. Dr. Kes- selman says that in actual fact, most mandatory retirement provisions have their source in collective agreements rather than individual employment contracts. This allows the will of the majority to trump the equality rights of individual employees who may need or want to continue working after the mandatory age of retirement. 250 Dr. Kesselman’s thesis is borne out by the facts of this case. That is, 25% of Air Canada pilots supported the abolition of mandatory retirement in the refer- endum carried out by ACPA shortly before the Tribunal hearing. Nevertheless, the mandatory retirement provision was retained in the Air Canada/ACPA col- lective agreement in accordance with the wishes of the majority. 251 Dr. Kesselman confirmed Justice L’Heureux-Dub´e’s observation in McKin- ney that the group of employees who will want and need to continue working will be disproportionately made up of women who may have entered the workforce late, or who may have taken time away from the paid workforce be- cause of family responsibilities. Recent immigrants will also be disproportion- ately negatively affected by mandatory retirement policies because of their late entry into the Canadian workforce. Both groups may be unable to accumulate the necessary pensionable earnings as to allow them to retire with the financial security available to others. 252 Dr. Kesselman points out that people who want or need to continue working will also face difficulties obtaining alternate employment after their forced re- tirement because of societal attitudes towards older workers, and because it may be uneconomical for new employers to provide them with the necessary training. These negative financial consequences may be all the more severe for women, because of their longer life expectancy. 253 According to Dr. Kesselman, the second flaw in the traditional justification for mandatory retirement relates to the benefits that it purportedly confers on both employers and employees. 254 Mandatory retirement is said to benefit younger workers because it frees up jobs. However, Dr. Kesselman points out that Canada is currently facing a shortage of skilled workers. As a consequence, the economy would actually ben- efit from experienced older workers being encouraged to continue working. 255 Moreover, Dr. Kesselman says that experience has shown that the number of workers who would actually continue working is relatively small. Unconstrained by mandatory retirement policies, two-thirds of employees still choose to retire before age 65, with the average age of retirement being 61. Empirical research 260 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

suggests that there would be little effect on job creation for younger workers if mandatory retirement were abolished. 256 As for the benefit of avoiding potentially demeaning performance monitor- ing for those employees whose productivity may have declined with age, Dr. Kesselman observes that there is no evidence that ability or productivity ab- ruptly declines at a specific age. He points out, somewhat ironically, that the mean age of the judges deciding McKinney was 65 years of age, and that several of the judges were over that age. 257 Experience and reliability can compensate for declining abilities, says Dr. Kesselman. Moreover, employees whose abilities are in fact declining will be the ones most likely to choose voluntary retirement. 258 Dr. Kesselman also points out that employers already need to have reliable performance monitoring systems in place, and that such systems are all the more necessary for workers who have many years in the workforce ahead of them. More importantly, he notes that there is no evidence that costly new perform- ance monitoring systems have in fact been implemented in jurisdictions that have abolished mandatory retirement. 259 Dr. Kesselman says that mandatory retirement is not essential to the mainte- nance of deferred compensation schemes, given the evidence indicating that few workers would actually choose to continue working. If three to ten percent of employees over 65 were to continue working for an additional three years, the average length of a career would only rise by one to four months - hardly enough to upset deferred compensation schemes. 260 Dr. Kesselman also questions the premise that deferred compensation pro- vides a useful incentive for employers to invest in training their employees at the beginning of their careers, allowing employers to benefit from that investment over the career of the individual. He notes that the more rapid obsolescence of skills in today’s workplace means that employee training has become an ongo- ing process. 261 The third flaw in the traditional economic analysis of mandatory retirement identified by Dr. Kesselman is that it fails to consider the cost that compulsory mandatory retirement imposes on the rest of society. 262 Older employees forced to leave their employment pay less in income and other taxes. Some begin drawing public pension benefits earlier than they might otherwise have done, and fewer benefits get clawed-back through the tax sys- tem. The decrease in tax revenues and increase in public pension claims will impose a bigger drain on systems already under strain as the population ages. In this regard, Dr. Kesselman notes that while only 7.6% of the Canadian popula- tion was over 65 in the mid-1960s, they made up 12% of the population by 2004 and are projected to make up 23% of the population by 2030. Vilven v. Air Canada Anne Mactavish J. 261

263 Other costs to the public purse include increased demands on the health-care system by employees who have lost their private, work-related supplemental in- surance coverage, and by individuals whose loss of employment results in them qualifying for means-based benefits. Dr. Kesselman also points to research indi- cating that physical and mental inactivity can contribute to a variety of health problems, imposing a further strain on the public purse. 264 Dr. Kesselman says that to the extent that mandatory retirement decreases tax revenues and increases public expenditures, it will put upward pressure on income tax rates for Canadians. These pressures will increasingly be felt as baby-boomers leave the workforce. The aging of the workforce combined with increasing life expectancies means that mandatory retirement will have a much greater adverse impact on the economy in the future than it has in the past. 265 Dr. Kesselman identifies several ways in which compensation, pension and employee benefit plans can be modified so as to allow for the continued employ- ment of older workers. These include eliminating long term disability insurance for employees over the age of 65 and reducing coverage for employer-paid life insurance. 266 Dr. Kesselman says that “the case for allowing [compulsory mandatory re- tirement] to continue is based on economic analysis that presumes markets al- ways produce desirable results”: Johnathan R. Kesselman, “Mandatory Retire- ment and Older Workers: Encouraging Longer Working Lives” (2004) 200 C.D. Howe Institute Commentary 1, at p. 18. This presumption, he says, was accepted by the Supreme Court of Canada in McKinney, which found age discrimination in the form of mandatory retirement to be justifiable on the grounds of its as- serted economic benefits. 267 However, Dr. Kesselman observes that market forces once perpetuated dis- crimination on the basis of sex and race in hiring and compensation practices. Indeed, it was not so long ago that married women in Canada were forced out of the workplace by market pressures in order to free up positions for men. As Dr. Kesselman points out, it is no different to say that older workers should be com- pelled to leave the workforce to create positions for younger workers. 268 The burden is, of course, on Air Canada and ACPA to demonstrate that para- graph 15(1)(c) of the CHRA is a reasonable limit in a free and democratic soci- ety, and that the government continues to have a reasonable basis for believing that it impairs the Charter rights of workers over the normal age of retirement for their type of position “minimally” or “as little as possible”. With this in mind, it is necessary to examine what Dr. Carmichael had to say about the eco- nomic theory justifying the continued perpetuation of mandatory retirement for federally-regulated employees. 269 Dr. Carmichael describes mandatory retirement as an institution that has evolved in labour markets where employees - often represented by strong unions 262 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

- have been free to negotiate their own employment conditions with employers. These negotiations result in arrangements that are beneficial to both sides, par- ticularly when viewed over the entire life-cycle of individual careers. 270 The benefits that Dr. Carmichael says flow from labour market structures that include mandatory retirement are many of the same advantages identified by the Supreme Court of Canada in McKinney. As these have already been dis- cussed at some length earlier in these reasons, I will review Dr. Carmichael’s evidence on this point somewhat briefly. 271 Dr. Carmichael says that mandatory retirement is an integral part of the overall package of benefits and obligations that comprise the employment rela- tionship. This package includes seniority and deferred compensation systems, whereby employees are able to earn higher wages, receive better employment security and opportunities and better pensions over time. Mandatory retirement opens up job opportunities for younger workers, facilitates planning by both em- ployers and employees, allows for less stringent monitoring of older workers, and allows employees to leave the workforce with dignity. According to Dr. Carmichael, mandatory retirement is the quid pro quo for these benefits, and that the interdependence of mandatory retirement and deferred compensation schemes “is evident from the data”. 272 Insofar as the aging of the population is concerned, Dr. Carmichael says that older workers do not necessarily have to leave the workforce after being forced to retire from their jobs. Workers may find alternate employment, and may even be able to continue working for their former employer under renegotiated condi- tions that better reflect the workers’ current productivity. 273 While recognizing that mandatory retirement can have an adverse differen- tial impact on women and immigrants, Dr. Carmichael says that good public policy requires that the effects of an institution be evaluated for all of the groups affected, and that some balance be maintained. 274 The groups that would benefit most from the abolition of mandatory retire- ment are older workers who have already benefited from the seniority system. According to Dr. Carmichael, this group is predominately made up of men from the baby boom generation, many of whom do not need the money. Those who would lose out would be younger men and women, as well as those who entered the workforce later in life. According to Dr. Carmichael, there are better ways to address the plight of this latter group, such as financial support and the recogni- tion of foreign credentials for immigrants. 275 Dr. Carmichael agrees with Dr. Kesselman that abolishing mandatory retire- ment will not have a major impact on the average age of retirement in the econ- omy as a whole, as most individuals will choose to retire at the same age as would otherwise have been imposed upon them. It could, however, have a more Vilven v. Air Canada Anne Mactavish J. 263

significant impact in relation to airline pilots, given their high rate of pay and significant level of job satisfaction. 276 Dr. Carmichael also agrees with Dr. Kesselman that the costs associated with the elimination of mandatory retirement would be “relatively small”: tran- script, at p.1524. 277 It was evident from the cross-examination of Dr. Carmichael that the philo- sophical underpinning of his opinion is his belief that mandatory retirement is something that is “freely negotiated” by knowledgeable individuals. Indeed, Dr. Carmichael stated that he “would always support something that had been freely negotiated”: transcript, at p.1537. 278 Dr. Carmichael conceded that an agreement between two groups could cause hardship to third parties, and that society may legitimately refuse to enforce such agreements. However, he says that no third parties are hurt when an employer and a union negotiate a collective agreement that involves mandatory retirement. Workers enter into arrangements that positively affect their own future compen- sation and job security, and their welfare has to be judged over the entire life- cycle of their careers: Carmichael Report, at pp. 8-10. 279 However, as was noted earlier, Dr. Carmichael acknowledged that mandatory retirement can indeed have an adverse differential impact on women and immigrants, whose interests may be “lost in the mix”: transcript at p. 1573. He believes that may be the strongest argument advanced against mandatory retirement. At the same time, he states that “it is not clear that it discriminates against women as a group”: Carmichael Report at pp.1 and 13. 280 With this understanding of the expert evidence, I turn now to the application of the minimal impairment test.

e) The Application of the Minimal Impairment Test 281 I recognize at the outset that significant deference is to be shown to Parlia- ment where the Court is examining a legislative provision that attempts to strike a balance between the claims of competing groups on the basis of potentially conflicting social science evidence. That said, as was noted earlier, this defer- ence does not absolve the Court of its constitutional obligation to scrutinize leg- islative action to ensure reasonable compliance with Charter standards. 282 As the Supreme Court observed in RJR-Macdonald, “Deference must not be carried to the point of relieving the government of the burden which the Charter places upon it of demonstrating that the limits it has imposed on guaranteed rights are reasonable and justifiable”: at para. 136. 283 While Chief Justice McLachlin recognized the role of Parliament to choose the appropriate response to social problems, she nevertheless went on in RJR- Macdonald to observe that it was the role of the courts to determine whether 264 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

Parliament’s choice fell within the limiting framework of the Constitution. In this regard she cautioned that “To carry judicial deference to the point of ac- cepting Parliament’s view simply on the basis that the problem is serious and the solution difficult, would be to diminish the role of the courts in the constitutional process and to weaken the structure of rights upon which our constitution and our nation is founded”: at para. 136. 284 The question, then, is whether the government continues to have a reasona- ble basis for concluding that paragraph 15(1)(c) of the CHRA minimally impairs the rights of workers over the normal age of retirement for their positions. 285 ACPA and Air Canada argue that this is indeed the case, particularly in light of the fact that since McKinney was decided, the Supreme Court has itself recog- nized the importance of collective bargaining and its role as a Charter value. 286 While acknowledging the importance of collective bargaining as a Charter value, it must also be recognized that paragraph 15(1)(c) of the CHRA does not permit mandatory retirement at a specific age to be imposed only in cases where it has been freely negotiated, either as a term in an individual’s employment contract, or through the collective bargaining process. Indeed, as long as the age selected by an employer conforms to the “normal age of retirement” for a partic- ular class of positions, paragraph 15(1)(c) permits employers to unilaterally im- pose mandatory retirement on unwilling employees. 287 It is true mandatory retirement is often a feature of unionized workplaces, and can be negotiated through the collective bargaining process in exchange for benefits such as good pensions and employment security. However, it must also be recognized that a significant number of federally-regulated employers (such as the entire banking industry) are not unionized. 288 Moreover, even in cases such as this one, where the mandatory retirement provision in the Air Canada/ACPA collective agreement was freely negotiated between an employer and a strong union, it can nevertheless be imposed on the one-quarter of ACPA members who voted against the preservation of mandatory retirement. This was referred to by Dr. Carmichael as the “tyranny of the major- ity” argument. 289 Dr. Carmichael says that this “is a strange argument, given that all of our valued democratic institutions are based on the idea that collective decisions should be guided by the wishes of the majority”: Carmichael report, at page12. 290 While this is unquestionably true in many contexts, it is nevertheless a basic principle of Canadian law that the fundamental human rights of individuals can- not be compromised simply because a majority may not believe them to be wor- thy of recognition. 291 If it were otherwise, there would be no obligation on an employer to accom- modate an employee whose religious beliefs precluded work on Saturdays, if the Vilven v. Air Canada Anne Mactavish J. 265

majority of the individual’s co-workers were unwilling to accept any modifica- tions to their own work schedules so as to allow for the accommodation of the individual: see Central Alberta Dairy Pool v. Alberta (Human Rights Commis- sion), [1990] 2 S.C.R. 489, [1990] S.C.J. No. 80 (S.C.C.). 292 Nor would there be any obligation on the government to provide sign-lan- guage interpretation for deaf patients dealing with health-care providers, if the majority of taxpayers did not believe that such services should be paid out of the public purse: see Eldridge, above. 293 As the British Columbia Court of Appeal observed in Greater Vancouver, the problem with according too much deference to the demands of organized labour in examining a section 1 justification for a breach of section 15 equality rights is that collective bargaining may “focus on majority rule, rather than on the protection of minority rights”: at para. 83. 294 The Court went on in Greater Vancouver to note that not every provision of a collective agreement will necessarily protect minority rights. The Court ob- served that “little credence” would be given to legislative or labour preferences “if the groups subjected to discriminatory treatment were women or ethnic mi- norities”. Why, then, the Court asks, “should the courts give credence to these views where the group discriminated against is the elderly and where the sole basis of discrimination is that they are elderly?”: at para. 83. 295 As Justice Cory observed in Dickason, a collective agreement can provide evidence of the reasonableness of a practice which appears on its face to be discriminatory. He went on to qualify this statement, however, by noting that not only would it have to be shown that the agreement was indeed freely negotiated, but also that it did not discriminate unfairly against individuals on the basis of a proscribed ground: at para. 39. 296 Moreover, as Justices L’Heureux-Dub´e and McLachlin noted in Bell and Cooper, the involvement of unions in determining what will be a “normal age of retirement” does not automatically guarantee that it is justifiable. They observed that “there may be many reasons why a union does not take up a particular cause. The concern may be of interest only to a minority of its members, or the union may have other more important issues on the bargaining table”: at para.107. 297 In this case, Dr. Carmichael and Dr. Kesselman agree that mandatory retire- ment provisions in collective agreements such as that between Air Canada and ACPA have an adverse differential impact on both women and immigrants. Dr. Carmichael suggests that rather than limiting the freedom of employers and em- ployees to negotiate mandatory retirement, programs could be designed to com- pensate these groups for the financial disadvantages resulting from forced retire- ment. However, as the Tribunal observed, not only is it questionable whether financial aid would provide a sufficient degree of income security, more impor- 266 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

tantly, Dr. Carmichael’s suggestion “does not address, and indeed may even ex- acerbate the loss of dignity and pride that flows from being unemployed”: Tribu- nal decision #2, at para. 69. 298 By the time the Tribunal heard Messrs. Vilven and Kelly’s human rights complaints, mandatory retirement had been abolished in the Province of Ontario, and several other provinces only allowed for compulsory retirement at a speci- fied age in cases where employers could demonstrate that it was based on bona fide retirement or pension plans, or bona fide occupational requirements. As a consequence, mandatory retirement is no longer as integral to the organization of the Canadian labour market as it was in 1990, when McKinney was decided. 299 Air Canada and ACPA argue that the fact that mandatory retirement had been abolished in Ontario should not have been considered by the Tribunal, as it occurred in 2006 - after the termination of Messrs. Vilven and Kelly’s employ- ment with Air Canada. According to the applicants, the question of whether or not paragraph 15(1)(c) of the CHRA is a reasonable limit in a free and demo- cratic society should have been assessed as of 2003 and 2005. 300 The ongoing constitutional validity of legislation is surely a matter best de- termined on the basis of up-to-date evidence. As the Supreme Court observed in Irwin Toy Ltd., above, once the legislative objective has been characterized, “the government surely can and should draw upon the best evidence currently availa- ble” to prove that this original objective remains pressing and substantial: at para. 66. One can infer from this that this “best evidence” standard could be used in the minimal impairment and proportionality stages of the Oakes test as well: see Matthew Taylor and Mahmud Jamal, The Charter of Rights in Litiga- tion: Direction from the Supreme Court of Canada, loose-leaf (Aurora: Canada Law Book, 1990) s. 6:12, p. 6-78. 301 This view is borne out when one examines the way in which social science evidence has been treated by the Supreme Court in section 1 cases. For example, the professor in Dickason was forced to retire on June 30, 1985. However, the Supreme Court considered journal articles from 1986 and 1988 in its decision. Similarly, the professors in McKinney were forced to retire in 1985 and 1986, but the Court considered several journal articles from 1987 to 1989 in assessing the constitutionality of the legislation. 302 Moreover, the Supreme Court held in McKinney that the issue of minimal impairment must be assessed in the context of the current social and historical context: at para. 123. 303 Even if I am wrong in this regard, and the Tribunal should not have consid- ered the after-the-fact abolition of mandatory retirement in Ontario, the evidence adduced by Air Canada and ACPA simply did not establish that the negative consequences for employment regimes apprehended by the Supreme Court in its Vilven v. Air Canada Anne Mactavish J. 267

mandatory retirement jurisprudence have materialized in the other Canadian ju- risdictions where mandatory retirement has long been abolished. 304 Dr. Kesselman says that experience in the years since McKinney has shown that the abolition of mandatory retirement has not had any demonstrable nega- tive impact on beneficial workplace arrangements such as deferred compensa- tion and pension schemes, seniority systems and the like. This leads him to con- clude that mandatory retirement is not in fact integral to the preservation of these labour market structures in the way that it was understood to be at the time that McKinney was decided. 305 Dr. Carmichael takes issue with this conclusion, arguing that “it is evident from the data” that mandatory retirement is indeed integrally connected to bene- ficial employment regimes. The data that he cites to support his view is found in a 1981 American study entitled “Mandatory Retirement Study: Final Report (Washington: Urban Institute, 1981), and in a Canadian study by Gunderson and Pesando entitled “The Case for Allowing Mandatory Retirement”, (1988) 14 Ca- nadian Public Policy, at pp. 32-39. 306 Although I have not been provided with the actual studies relied upon by Dr. Carmichael, the studies do not appear to have been based upon long-term, real- life experience. I say this because, according to Dr. Carmichael’s own report, the American study was carried out before mandatory retirement was abolished in the United States. The Canadian study was published in 1988 - before the deci- sion of the Supreme Court of Canada in McKinney, and before reliable evidence was available as to the actual, non-speculative and non-theoretical consequences of the abolition of mandatory retirement in Canada. 307 Indeed, in McKinney, the Supreme Court relied heavily on work by Gunder- son and Pesando in coming to the conclusion that the permissive legislative pro- vision at issue in that case was saved by section 1 of the Charter. However, as was discussed earlier in these reasons, the Court was clearly troubled by the fact that reliable evidence regarding the actual impact that the abolition of mandatory retirement had in fact had for deferred compensation and other beneficial em- ployment regimes was not yet available. 308 Dr. Kesselman’s evidence thus calls into question a major underlying pre- mise of Dr. Carmichael’s evidence - namely that mandatory retirement is an integral part of traditional labour market structures that include seniority sys- tems, deferred compensation and pension schemes and the like, and is essential to the preservation of these arrangements for the benefit of employees and em- ployers alike. 309 We now have long-term, real-life experience in Canadian jurisdictions where mandatory retirement has been abolished. This experience goes back more that 25 years in the cases of Manitoba and Qu´ebec. Thus the actual impact of the abolition of mandatory retirement in these jurisdictions could be evaluated, and 268 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

evidence adduced as to the consequences that the abolition of mandatory retire- ment has actually had for matters such as seniority systems, deferred compensa- tion and pension schemes. 310 Dr. Carmichael did not identify any significant negative consequences that have actually come to pass in those jurisdictions where mandatory retirement has been prohibited for some time. Indeed, he appeared to concede in cross- examination that mandatory retirement is not essential to the maintenance of mutually advantageous labour market structures: see transcript, at p.1556. 311 The onus is on ACPA and Air Canada to demonstrate that Parliament contin- ues to have a reasonable basis for believing that paragraph 15(1)(c) minimally impairs the rights of those affected by it. One would have thought that if there was current empirical evidence available to demonstrate the negative effects that the abolition of mandatory retirement has in fact had for beneficial workplace arrangements, it would have been put before the Tribunal by the applicants in order to show that mandatory retirement is indeed integral to the preservation of these labour market structures. It was not. 312 It was also evident from Dr. Carmichael’s testimony that his opinion was based upon his belief that older workers have already enjoyed their share of the benefits associated with employment arrangements involving seniority and de- ferred compensation systems. In his view, the concern should be for younger workers. He testified that “I don’t think the baby-boomers need any more bene- fits, they have done extremely well. I think we should be more concerned about the people who follow behind them and how they are going to do”: transcript, at p.1542. 313 I would first note that there has been no suggestion that “younger workers” constitute a historically disadvantaged group who are being targeted by the leg- islation. Moreover, the Supreme Court held in McKinney that the plight of younger workers was a matter that should not be accorded a central role in the debate on mandatory retirement: at para.102. 314 Justice La Forest observed that if a free and democratic society’s values in- clude respect for the inherent dignity of the individual and a commitment to social justice and equality, then forcing older workers to retire in order to free up positions for younger workers would itself be discriminatory. This is because “it assumes that the continued employment of some individuals is less important to those individuals, and of less value to society at large, than is the employment of other individuals, solely on the basis of age”: McKinney, at para. 97. 315 Furthermore, Dr. Carmichael himself conceded that the abolition of mandatory retirement would not significantly change the age at which most indi- viduals would choose to retire, and that it would have little impact on the aver- age age of retirement in the economy as a whole. As a result, the number of Vilven v. Air Canada Anne Mactavish J. 269

employment opportunities for younger workers would not be greatly affected by the abolition of mandatory retirement. 316 I do accept Dr. Carmichael’s point that a higher than average percentage of Air Canada pilots may wish to continue working, given their high rate of pay and significant level of job satisfaction. I also recognize that there are some unique features of Air Canada pilot positions - particularly with respect to the steepness of the wage curve and the extent to which the positions are in demand. 317 However, what is at issue here is not a Charter challenge to the mandatory retirement provisions of the Air Canada pension plan and the Air Canada/ACPA collective agreement, but rather a challenge to the permissive provision of the CHRA that allows for the promulgation of such arrangements. Indeed, Air Can- ada and ACPA agree that the Court’s section 1 analysis should not be limited to the specific context of Air Canada pilots. 318 Air Canada and ACPA argue that the fact that most people would not change their behaviour and choose to retire at an older age if mandatory retirement was no longer permitted means that only a few people are actually negatively af- fected by paragraph 15(1)(c) of the CHRA. With respect, in examining the issue of minimal impairment, it is the quality of the impact on the Charter rights of older workers that is in issue, and not the number of older workers who would otherwise have wished to continue working. 319 Dr. Carmichael also testified before the arbitrator in CKY-TV. The arbitrator described his evidence in that case as providing “a coherent defence of mandatory retirement”. The arbitrator noted that “the employment life cycle and the regime of pensions, security and favourable compensation were seen for many years as an integrated whole”, and that mandatory retirement assisted em- ployers in managing salary expenses and planning their financial obligations: at para. 217. This was the view espoused by the Supreme Court at the time that McKinney was decided. 320 However, as the arbitrator observed, Dr. Carmichael’s position is sound, “but only on the premise that mandatory retirement is necessary to the realiza- tion of all the foregoing”: at para. 217. As was explained earlier in these reasons, the evidence in this case does not establish that mandatory retirement is in fact an integral and necessary part of traditional labour market structures, as was previously believed. Nor does it demonstrate that employment regimes that in- clude seniority, pension, deferred compensation and the like have been nega- tively affected in the Canadian jurisdictions in which mandatory retirement has been prohibited for many years. 321 In Thomson Newspapers Co. v. Canada (Attorney General), [1998] 1 S.C.R. 877 (S.C.C.), the Supreme Court stated that the minimal impairment test is in- tended to determine whether there is an efficiency between the infringing mea- sure and the justified purpose. The question at this stage of the analysis is 270 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

whether the impugned provision infringes the relevant Charter rights to the min- imum extent possible, while still fulfilling the justified purpose: at para. 124. 322 If permitting the negotiation of mandatory retirement is not necessary in or- der to maintain the longstanding and beneficial employment regimes described by Dr. Carmichael and discussed by the Supreme Court in McKinney, there is little efficiency between the infringing measure and the justified purpose, and the legislation does not fulfill that purpose. Thus it cannot be said that older workers’ Charter rights are minimally impaired by the legislation.

f) Conclusion on the Minimal Impairment Issue 323 While accepting that the government is entitled to a significant degree of deference in legislating in this area, the evidence before the Tribunal did not demonstrate that the government continues to have reasonable basis for conclud- ing that allowing parties to negotiate mandatory retirement arrangements is nec- essary for the achievement of the objectives of paragraph 15(1)(c) of the CHRA, to the extent that these objectives relate to the preservation of mutually-benefi- cial labour market structures. 324 Consequently, I find that the Tribunal was correct in finding that ACPA and Air Canada have not established that older workers’ Charter rights are mini- mally impaired by paragraph 15(1)(c) of the Canadian Human Rights Act. Par- liament’s objectives can be attained without impairing the Charter rights of workers over the normal age of retirement to the extent permitted by paragraph 15(1)(c) of the CHRA. 325 Before leaving this issue, I would note that I do accept that there could po- tentially be specific employment situations where mandatory retirement could be demonstrably necessary for the maintenance of a particular negotiated pack- age of rights and benefits. As the arbitrator observed in CKY-TV, “A more care- fully tailored version of section 15(1)(c), which limited the exception to those kinds of circumstances, might pass the section 1 test”: at para. 218. That is, however, an issue for another day. 326 In light of my conclusion with respect to the minimal impairment issue, it is not necessary to examine the Tribunal’s finding with respect to the proportional- ity between the effects of paragraph 15(1)(c) of the CHRA and the objectives of the legislation. I will do so, however, in case a reviewing Court takes a different view of the minimal impairment issue.

vii) Proportionality between the Effects of the Legislation and its Objectives 327 In R. v. Edwards Books, the Supreme Court described this final element of the proportionality component of the Oakes test as requiring the Court to deter- mine whether the effects of the legislation “so severely trench on individual or Vilven v. Air Canada Anne Mactavish J. 271

group rights that the legislative objective, albeit important, is nevertheless out- weighed by the abridgment of rights”: at para.117. 328 There was criticism of this formulation, which was viewed by some as sim- ply duplicating what had already been accomplished through the first two ele- ments of the proportionality analysis. More recent Supreme Court jurisprudence has reformulated this component of the Oakes test so as “to give it a distinct scope and function”: see Thomson Newspapers, at paras.123-124. 329 The Supreme Court observed in Thomson Newspapers that the focus of the first two steps of the Oakes proportionality analysis “is not the relationship be- tween the measures and the Charter right in question, but rather the relationship between the ends of the legislation and the means employed”. In contrast, this last stage of the proportionality analysis allows the Court to “assess, in light of the practical and contextual details which are elucidated in the first and second stages, whether the benefits which accrue from the limitation are proportional to its deleterious effects as measured by the values underlying the Charter”: at para.125. 330 This analysis involves many of the same considerations that were discussed in connection with the issue of minimal impairment, albeit through the lens de- scribed in Thomson Newspapers.: see McKinney, at para. 126. 331 The Tribunal found that allowing the negotiation of mandatory retirement in the workplace provides “a powerful bargaining chip” for unions and employees. It allows them to negotiate “a number of important benefits including deferred compensation, the equitable distribution of benefits and job advancement oppor- tunities”. According to the Tribunal, mandatory retirement also “allows employ- ers to plan for the flow of labour into a workplace, to manage wage bills and to plan their financial obligations: Tribunal decision #2, at para. 66. 332 At the same time, the Tribunal found that depriving individuals over the nor- mal age of retirement of the protection of the CHRA produced significant delete- rious effects that outweighed the benefits generated by paragraph 15(1)(c) of the CHRA: Tribunal decision #2, at paras. 65-70. 333 The Tribunal noted that Dr. Kesselman and Dr. Carmichael agreed that mandatory retirement had a particularly negative impact on people who needed to work past the normal age of retirement - a group predominantly made up of women and immigrants. These individuals face considerable hardship when they are forced to retire, as they have not had the time to accumulate significant pen- sion benefits. They may also face significant difficulties finding alternate em- ployment that fully utilizes their skills and experience. This results in “a heavy personal and financial blow to the individual”: see Tribunal decision #2, at para. 68. 334 The Tribunal rejected Dr. Carmichael’s claim that it would be better to cre- ate programs to compensate these individuals for the financial disadvantages 272 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

that result from mandatory retirement, rather than eliminating the freedom to negotiate mandatory retirement. As was noted earlier, the Tribunal questioned whether financial aid would provide a sufficient degree of income security. Moreover, Dr. Carmichael’s proposal did not address and could even exacerbate the loss of dignity and pride that flows from being unemployed: Tribunal deci- sion #2, at para. 69. 335 Paragraph 15(1)(c) of the CHRA has the effect of depriving individuals of legal redress for the harm suffered when they are forced to retire at the “normal age of retirement”. In the Tribunal’s view, the negative effects of depriving indi- viduals of the protection of a quasi-constitutional statute outweighed the positive benefits associated with paragraph 15(1)(c) of the Act: Tribunal decision #2, at para.70. 336 The Tribunal concluded its Charter analysis by observing that “perhaps one of the most disturbing aspects of this provision was the one first noted by the Court in Vilven [#1]: it allows employers to discriminate against their employees on the basis of age so long as that discrimination is pervasive in the industry”: at para. 70. 337 The Tribunal was correct in its assessment of the proportionality issue. 338 The focus of the analysis at this stage of the inquiry is on whether the salu- tary benefits of the impugned legislation outweigh its deleterious effects. The Tribunal described the benefits of paragraph 15(1)(c) of the CHRA for both em- ployers and employees. Some of these benefits are enjoyed by employees throughout the life-cycle of their employment. 339 It has not, however, been established that such beneficial employment re- gimes require that parties be free to negotiate employment terms that include mandatory retirement in order for such regimes to continue. Indeed, the evi- dence before the Tribunal clearly demonstrated that the benefits of such regimes have continued in jurisdictions where mandatory retirement has been eliminated. 340 In the absence of evidence that any of the benefits associated with traditional labour market structures have been lost in provinces that have abolished mandatory retirement, how can it be said that the benefits associated with per- mitting mandatory retirement outweigh its deleterious effects? 341 It is also important to have regard to the nature of the interest affected, in assessing whether the salutary benefits of paragraph 15(1)(c) outweigh its dele- terious effects. For individuals over the normal age of retirement, the interest at stake is the ability of the individual to continue working in the career of his or her choice. As I said in Vilven #1, “the importance of this interest cannot be overstated”, as “Canadian jurisprudence is replete with references to the crucial role that employment plays in the dignity and self-worth of the individual”: at para. 293. Vilven v. Air Canada Anne Mactavish J. 273

342 For example, in Reference re Public Service Employee Relations Act (Al- berta), [1987] 1 S.C.R. 313, [1987] S.C.J. No. 10 (S.C.C.), the Supreme Court of Canada stated that “Work is one of the most fundamental aspects in a per- son’s life, providing the individual with a means of financial support and, as importantly, a contributory role in society”: at para. 91. 343 Indeed, the majority in McKinney observed that “In a work-oriented society, work is inextricably tied to the individual’s self-identity and self-worth”: at para. 93. With this in mind, Justice La Forest went on to draw a link between mandatory retirement and the loss of an individual’s self-worth, identity and emotional well-being, stating that “Mandatory retirement takes this away, on the basis of a personal characteristic attributed to an individual solely because of his association with a group”: McKinney, at para. 52. 344 There are other deleterious effects associated with paragraph 15(1)(c) of the CHRA. Unlike the situation facing the Supreme Court in McKinney and Harri- son, Parliament has not itself chosen what the appropriate age of retirement should be for federally-regulated employees. Instead, it has left it to private par- ties to decide what the “normal age of retirement” should be for specific types of positions. As was explained earlier, this can create uncertainty as to the scope of employees’ rights under the CHRA, as it may be very difficult for an individual to ascertain exactly what the normal age of retirement is for his or her particular type of position. 345 There is no doubt that collective bargaining is itself a Charter value, and that this is a consideration that must be weighed in the mix. However, while a mandatory age of retirement may be freely negotiated in some cases through the collective bargaining process in exchange for other employment benefits, para- graph 15(1)(c) of the CHRA does not require that this be so. 346 Moreover, paragraph 15(1)(c) does not just permit the unilateral imposition of mandatory retirement by employers on unwilling employees, it also allows for the dominant player in an industry to set the industry norm. In other words, paragraph 15(1)(c) allows a single private sector employer to determine the ex- tent of the quasi-constitutional rights of an entire class of federally-regulated employees. 347 Air Canada and ACPA argue that a company’s role as a dominant industry player is not cast in stone for all time, and that the “normal age of retirement” may change as companies come and go. While this may be true, it also under- mines one of the claimed salutary effects of paragraph 15(1)(c) of the CHRA - namely the certainty that a fixed retirement age provides to employers, allowing them to plan for the flow of labour, and to manage wages and other financial obligations. 274 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

348 Also troubling is the fact that even in industries that are not dominated by a single player, age-based discrimination is permitted by paragraph 15(1)(c) of the CHRA, as long as that discrimination is pervasive within an industry. 349 As a result, the Tribunal was correct in finding that the benefits that accrue from paragraph 15(1)(c) of the CHRA are outweighed by its deleterious effects, when measured by the values underlying the Charter.

viii) Conclusion on the Charter Issue 350 I found in Vilven #1 that paragraph 15(1)(c) of the CHRA violates subsection 15(1) of the Charter, as it denies the equal protection and equal benefit of the law to workers over the normal age of retirement for similar positions. 351 For the reasons given in this case, I find that the Tribunal was correct in concluding that Air Canada and ACPA had not satisfied the onus on them to demonstrate that paragraph 15(1)(c) of the CHRA is saved under section 1 of the Charter. Air Canada and ACPA have not shown that the broadly-worded excep- tion to the otherwise discriminatory practice of mandatory retirement contained in paragraph 15(1)(c) of the CHRA is a reasonable limit justifiable in a free and democratic society.

IX. Is Age a Bona Fide Occupational Requirement for Air Canada Pilots? 352 Having concluded that paragraph 15(1)(c) of the CHRA does not provide Air Canada and ACPA with a defence to Messrs. Vilven and Kelly’s human rights complaints, the next question is whether the Tribunal’s finding that Air Canada had not established that being under 60 was a bona fide occupational require- ment for its pilots was reasonable.

A. Legal Principles Governing Bona Fide Occupational Requirements 353 Paragraph 15(1)(a) of the CHRA provides that it is not a discriminatory prac- tice if “any refusal, exclusion, expulsion, suspension, limitation, specification or preference in relation to any employment is established by an employer to be based on a bona fide occupational requirement”. 354 The test to be applied for determining whether an employer has established a bona fide occupational requirement is that articulated by the Supreme Court of Canada in Meiorin, above, at para. 54. 355 That is, an employer must establish on a balance of probabilities that: (1) The employer adopted the standard for a purpose rationally con- nected to the performance of the job; (2) The employer adopted the particular standard in an honest and good faith belief that it was necessary to the fulfillment of that legitimate work-related purpose; and Vilven v. Air Canada Anne Mactavish J. 275

(3) The standard is reasonably necessary to the accomplishment of that legitimate work-related purpose. To show that the standard is reasonably necessary, it must be demonstrated that it is impossible to accommodate individual employees sharing the characteristics of the claimant without imposing undue hardship upon the employer. 356 The first and second steps of the Meiorin test require an assessment of the legitimacy of the standard’s general purpose, and the employer’s intent in adopt- ing it. This is to ensure that, when viewed both objectively and subjectively, the standard does not have a discriminatory foundation. The third element of the Meiorin test involves the determination of whether the standard is required to accomplish a legitimate purpose, and whether the employer can accommodate the complainant without suffering undue hardship: Syndicat des employ´es de l’Hˆopital g´en´eral de Montr´eal c. Sexton, 2007 SCC 4, [2007] 1 S.C.R. 161 (S.C.C.) [Hereinafter McGill Univesity Health Centre], at para.14. 357 As the Supreme Court of Canada observed in Syndicat des employ´e-e-s de techniques professionnelles & de bureau d’Hydro-Qu´ebec, section 2000 (SCFP- FTQ) c. Corbeil, 2008 SCC 43, [2008] 2 S.C.R. 561 (S.C.C.) [Hereinafter Hydro-Qu´ebec], the use of the word “impossible” in connection with the third element of the Meiorin test had led to a certain amount of confusion. The Court clarified that what is required is “not proof that it is impossible to integrate an employee who does not meet a standard, but proof of undue hardship, which can take as many forms as there are circumstances”: at para.12. 358 As to the scope of the duty to accommodate, the Supreme Court stated that “The employer does not have a duty to change working conditions in a funda- mental way, but does have a duty, if it can do so without undue hardship, to arrange the employee’s workplace or duties to enable the employee to do his or her work: Hydro-Qu´ebec, at para.16.

B. The Tribunal’s Decision 359 Because Canada is a signatory to the Chicago Convention, Air Canada is governed by the standards and recommended practices developed by ICAO. 360 Air Canada’s position before the Tribunal was that it could not accommo- date pilots over the age of 60 without experiencing undue hardship in light of the constraints imposed on it by the ICAO standards governing international flights. According to Air Canada, being able to fly lawfully over foreign countries is an integral part of the pilot job at Air Canada. 361 ACPA submitted that the abolition of the mandatory retirement provision in the Air Canada pension plan and the Air Canada/ACPA collective agreement would cause undue hardship to its members as it would limit the number of positions available to pilots under 60 years of age and would dilute their senior- 276 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

ity. It would, moreover, interfere with the ability of younger pilots to plan for their retirement, which would in turn have a negative effect on pilot morale. 362 Prior to November of 2006, ICAO’s standards stipulated that Pilots-in-com- mand over the age of 60 could not fly internationally. There was, however, no mandatory upper age limit for First Officers, although ICAO recommended that individuals over the age of 60 not be permitted to copilot aircraft engaged in international air transport operations. 363 The ICAO standards were amended on November 23, 2006. As of that date, ICAO’s rules provided that Pilots-in-command under the age of 65 could fly internationally, as long as one of the pilots in a multi-pilot crew was under 60 (known as the “over/under rule”). ICAO also recommended, but did not require, that First Officers cease commercial flying after reaching age 65. 364 The Tribunal found that there was no bar to Mr. Vilven flying internationally as an over-60 First Officer under the pre-November 2006 ICAO standards, and that Air Canada had not offered any evidence to show that allowing him to do so would cause it any undue hardship. 365 While accepting that Mr. Kelly could not have flown as a Captain/Pilot-in- command between the time that he turned 60 in 2005 and November of 2006, the Tribunal found that there was no reason why he could not have continued to fly for Air Canada as a First Officer. 366 Consequently, the Tribunal found that Air Canada and ACPA had not estab- lished a bona fide occupational requirement defence for their discriminatory conduct in relation to either Mr. Vilven or Mr. Kelly during the period up to November of 2006. 367 Air Canada’s evidence on the issue of undue hardship concentrated on the period after November of 2006 and came primarily from Captain Steven Duke. Captain Duke is a “Six Sigma Black Belt for Flight Operations” at Air Canada, a management position that he had held since 2006. Six Sigma is a business im- provement process adopted by Air Canada. The description of Captain Duke as a “Black Belt” recognizes his expertise in this process. 368 The focus of Captain Duke’s evidence was on the impact that having pilots over the age of 60 would have for Air Canada’s operations - particularly as it related to the issue of pilot scheduling - in light of Air Canada’s international obligations. 369 According to Captain Duke, the requirements of the over/under rule meant Air Canada could only accommodate a very limited number of potentially re- stricted pilots before pilot scheduling would become unworkable. “Potentially restricted pilots” were described by the Tribunal as Captains over 60 and under 65 and First Officers over 60. Vilven v. Air Canada Anne Mactavish J. 277

370 The Tribunal accepted that Air Canada could not schedule Pilots-in-com- mand over 65 years of age to fly internationally, as this would prevent Air Can- ada from flying many of its international routes: Tribunal decision #2, at para.100. 371 However, the Tribunal found that there were numerous deficiencies in Cap- tain Duke’s evidence with respect to the scheduling difficulties that would result if Air Canada were required to accommodate pilots over the age of 60 who were not flying as Pilots-in-command. This led the Tribunal to conclude that Captain Duke’s evidence was not sufficient to establish undue hardship to Air Canada: Tribunal decision #2 at para.122. 372 Insofar ACPA was concerned, the Tribunal examined the issue of hardship to the union in light of the principles articulated by the Supreme Court in Renaud v. Central Okanagan School District No. 23, [1992] 2 S.C.R. 970, [1992] S.C.J. No. 75 (S.C.C.). The Tribunal had particular regard for the effect that accommodative measures would have had on other ACPA members. 373 The Tribunal found that there was no evidence to show that a delay in the career progression and salary increases of younger pilots would cause substan- tial interference with the rights of these employees: Tribunal decision #2, at para.140. According to the Tribunal, forcibly retiring older workers in order to make way for younger workers would itself be discriminatory, as it assumed that the continued employment of older individuals is less important to those individ- uals and of less value to society at large than the continued employment of younger individuals. 374 Seniority at Air Canada determines, amongst other things, the equipment that a pilot will fly on and the schedule that he or she will receive. The Tribunal did not accept ACPA’s argument that accommodating over-60 pilots would di- lute the seniority rights of under-60 pilots, particularly with respect to schedul- ing, while giving the seniority rights of over-60 pilots full measure, all to the detriment of pilot morale. 375 The Tribunal found that there may be ways to address the scheduling problems that would potentially arise from the implementation of the over/under rule. For example, the Tribunal said that rather than requiring under-60 First Officers to accommodate the over-60 Captains, ACPA and Air Canada could agree that in the event of a scheduling problem, over-60 Captains would be re- quired to bid into positions where they could be accommodated: Tribunal deci- sion #2, at para. 149. 376 The Tribunal also found that ACPA had failed to establish that the level of disruption and the inevitable prospect of interference with other employees’ rights that would result from the removal of the mandatory retirement provision in the collective agreement constituted an undue hardship. ACPA has not chal- 278 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

lenged the Tribunal’s bona fide occupational requirement finding in its applica- tion for judicial review.

C. The Significance of the ICAO Standards 377 To properly understand Air Canada’s position on the bona fide occupational requirement issue, and in order to put Captain Duke’s evidence into context, it is first necessary to consider the significance of the changes to the ICAO standards that occurred after the termination of Messrs. Vilven and Kelly’s employment. 378 It will be recalled that as of November, 2006, ICAO’s “over/under rule” per- mitted Pilots-in-command between the ages of 60 and 65 to continue to fly inter- nationally, but only if one of the other pilots in a multi-pilot crew is under 60. 379 The ICAO standards only apply to international flights. However, the vast majority of Air Canada flights have an international aspect to them. In fact, 86% of Air Canada flights are either to an international destination, or pass through foreign (primarily American) airspace, en route to a Canadian destination. Be- tween 20 and 25% of the remaining 14% of Air Canada flights have an Ameri- can airport as an alternate airport where planes are to land if, for example, weather precludes landing at the regularly-scheduled Canadian airport. 380 The consequences of failing to comply with the over/under rule could poten- tially be severe for Air Canada, as contracting States may ground aircraft and deny entry into their airspace to any aircraft flown by pilots who do not meet ICAO standards.

D. Timing and the Duty to Accommodate 381 The first question for the Court to consider is when the issues of accommo- dation and undue hardship had to be assessed in relation to Messrs. Vilven and Kelly’s human rights complaints. 382 In some cases, it will not be appropriate to simply examine the situation as of the date of the termination of an individual’s employment. For example, where an employee is dismissed because of health-related absenteeism, the em- ployer’s claim of undue hardship must be assessed globally, taking the entire situation leading up to the termination into account: see Hydro-Qu´ebec, at para. 21. 383 In this case, Messrs. Vilven and Kelly had no need of any accommodation until such time as they reached the age of 60, at which point, their employment was terminated in accordance with the mandatory retirement provisions of the Air Canada pension plan and the Air Canada/ACPA collective agreement. I agree with Air Canada that in these circumstances, the issue of accommodation must first be assessed as of the date of termination. In the case of Mr. Vilven, this was 2003. In Mr. Kelly’s case, it was 2005. Vilven v. Air Canada Anne Mactavish J. 279

384 I also agree with Air Canada that having regard to the systemic nature of Messrs. Vilven and Kelly’s human rights complaints and the fact that the poten- tial invalidation of the mandatory retirement provisions in the Air Canada Pen- sion Plan and the Air Canada/ACPA collective agreement would affect other Air Canada pilots, it was also appropriate for the Tribunal to examine the issue of undue hardship on a going-forward basis, taking into account the subsequent changes to the ICAO standards. 385 Such a forward-looking examination was also necessitated by the fact that Messrs. Vilven and Kelly were seeking reinstatement into the positions that they would have held, had they not been required to retire at age 60.

E. Factors to Consider in Relation to the Issue of Accommodation 386 Subsection 15(2) of the CHRA provides that in order to establish the exis- tence of a bona fide occupational requirement or justification, “it must be estab- lished that accommodation of the needs of an individual or a class of individuals affected would impose undue hardship on the person who would have to accom- modate those needs, considering health, safety and cost”. [emphasis added]. 387 In assessing whether Air Canada could accommodate pilots over the age of 60, the Tribunal determined that it could look at matters other than health, safety and cost. The Tribunal observed that in Meiorin, the Supreme Court indicated that the factors to be considered in determining whether accommodation im- poses undue hardship are not entrenched, unless they are expressly included or excluded by statute: Tribunal decision #2, at para. 78, citing Meiorin, at para. 63. 388 The Tribunal further observed that in McGill University Health Centre, above, the Supreme Court emphasized that the factors that will support a finding of undue hardship should be applied with flexibility and common sense. The Court identified the cost of the possible accommodation, employee morale and mobility, interference with other employees’ rights, and disruption of the collec- tive agreement as examples of factors that may be considered: Tribunal decision #2, at paras. 79 and 80, citing McGill University Health Centre, at para. 15. 389 This was of particular significance as it related to the Tribunal’s analysis of the undue hardship arguments advanced by ACPA, which were largely based upon the impact on the rights of other employees that would result from the accommodation of over-60 pilots. As mentioned earlier, ACPA has not chal- lenged the Tribunal’s bona fide occupational requirement finding. 390 The undue hardship evidence adduced by Air Canada related primarily to operational considerations that would affect the company’s costs. However, other forms of hardship were also identified by the company, primarily the im- pact that accommodating pilots over 60 would have on the seniority rights of other Air Canada employees. The question thus arises as to whether the Tribunal 280 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

was statutorily limited to considering the factors of health, safety and cost in assessing whether a bona fide occupational requirement defence had been established. 391 I recognize that in determining that it could look at matters other than health, safety and cost, the Tribunal was interpreting its enabling statute and was deal- ing with the scope of the duty to accommodate - a matter squarely within the Tribunal’s expertise. As a result, its interpretation of subsection 15(2) of the CHRA is entitled to deference: see Celgene Corp. v. Canada (Attorney General), 2011 SCC 1 (S.C.C.), at para. 34. Nevertheless, I am satisfied that the Tribunal’s interpretation of this provision was unreasonable. 392 It is true that the Supreme Court has identified matters such as employee morale and mobility, interference with other employees’ rights, and disruption of the collective agreement as factors that may be considered in relation to the question of accommodation. The McGill University Health Centre decision re- lied upon by the Tribunal is an example of this. This was not, however, a deci- sion under the CHRA, and did not involve a statutory provision such as subsec- tion 15(2). 393 As the Tribunal itself noted, the Supreme Court stated in Meiorin that the factors to be considered in determining whether accommodation imposes undue hardship “are not entrenched, unless they are expressly included or excluded by statute”: at para. 63, emphasis added. In this case, Parliament has chosen to spe- cifically identify the matters that may be taken into account by the Tribunal in an accommodation analysis: see Russel Zinn, The Law of Human Rights in Can- ada: Practice and Procedure, loose-leaf, (Aurora: Canada Law Book, 1996) at s. 14:60:2. 394 Moreover, there are two different interpretative principles that were not ad- dressed by the Tribunal, both of which suggest that the factors identified in sub- section 15(2) of the Canadian Human Rights Act should be read as an exhaus- tive list. These are the principle of expressio unius est exclusio alterius; and the approach that is to be taken in interpreting human rights statutes. 395 The “expressio unius est exclusio alterius” maxim refers to a general princi- ple of statutory interpretation which suggests that to express one thing is to ex- clude another: see Ruth Sullivan, Sullivan on the Construction of Statutes, 5th ed. (Markham: LexisNexis, 2008) at p. 244. 396 That is, the failure of Parliament to mention a thing in a list will give rise to the inference that it was deliberately excluded. As Professor Sullivan says, “The force of the implication depends on the strength and legitimacy of the expecta- tion of express reference. The better the reason for anticipating express reference to a thing, the more telling the silence of the legislature”: at p. 244. 397 In this case, a substantial body of Supreme Court jurisprudence had devel- oped well before the addition of subsection 15(2) to the CHRA in 1998, with Vilven v. Air Canada Anne Mactavish J. 281

respect to the nature and scope of the duty to accommodate and the factors to be considered in assessing whether that duty had been fulfilled: see, for example, Central Alberta Dairy Pool, and Renaud, both previously cited. Parliament would thus have been well aware that factors such as impact on employee mo- rale and interference with the rights of other employees had been identified as relevant considerations in an accommodation analysis. 398 Nevertheless, in enacting subsection 15(2) of the CHRA, Parliament did not say that the Tribunal was to consider matters “such as” or “including” health, safety and cost, but chose instead to specifically identify the factors to be con- sidered in relation to the question of accommodation as being these three spe- cific matters. These circumstances give rise to a strong inference that Parliament intended the list set out in subsection 15(2) of the CHRA to be an exhaustive one. 399 My conclusion that subsection 15(2) of the Canadian Human Rights Act should be interpreted as limiting the factors to be taken into account in an ac- commodation analysis to health, safety and cost is reinforced when the issue is examined in light of the principles to be applied when interpreting human rights legislation. 400 That is, while the quasi-constitutional rights conferred by human rights leg- islation are to be broadly interpreted, this is not so with respect to the defences provided in the human rights statute in question. Defences to the exercise of those rights are to be interpreted narrowly: see Brossard (Ville) c. Qu´ebec (Commission des droits de la personne), [1988] 2 S.C.R. 279, [1988] S.C.J. No. 79 (S.C.C.) at para. 56, and Dickason, at para. 17. 401 As Justice Sopinka observed in Zurich Insurance Co. v. Ontario (Human Rights Commission), [1992] 2 S.C.R. 321, [1992] S.C.J. No. 63 (S.C.C.), human rights legislation is often “...the final refuge of the disadvantaged and the disen- franchised”. He went on to observe that “As the last protection of the most vul- nerable members of society, exceptions to such legislation should be narrowly construed ...”: at para.18. 402 That is not to say that matters such as employee morale and mobility, inter- ference with other employees’ rights, and disruption of a collective agreement could never be relevant in a claim under the CHRA. Rather, my interpretation of the legislation simply means that in order to be taken into account in an accom- modation analysis, these matters must be of a sufficient gravity as to have a demonstrable impact on the operations of an employer in a way that relates to health, safety or cost. 403 Before leaving this matter, I would acknowledge that the Superior Court of Qu´ebec came to a different conclusion in relation to this question in Syndicat des employ´ees & employ´es professionnels-les & de bureau - local 434 (FTQ) c. Gagnon, [2005] J.Q. No. 9368 (Que. S.C.), at para. 39. There, the Court stated 282 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

that the list contained in paragraph 15(2) of the CHRA was descriptive, rather than limiting. However, no reasons were provided for this conclusion, and I must respectfully disagree with it. 404 Although I have found that the Tribunal erred in its interpretation of subsec- tion 15(2) of the CHRA, as will be explained further on in these reasons, the determinative issue on the bona fide occupational requirement issue is the Tribu- nal’s treatment of the evidence regarding cost-related operational matters affect- ing the Air Canada’s ability to accommodate over-60 pilots in the post-Novem- ber, 2006 period. Before going there, however, the Court must first consider the reasonableness of the Tribunal’s bona fide occupational requirement finding as it relates to the pre-November, 2006 period.

F. Accommodation in the Pre-November 2006 Period 405 The next question, then, is whether the Tribunal’s finding that Air Canada had not established the existence of a bona fide occupational requirement de- fence for its discriminatory conduct vis-`a-vis Messrs. Vilven and Kelly during the period prior to the changes to the ICAO standards in November of 2006 was reasonable. 406 The primary thrust of Air Canada’s argument as it related to the bona fide occupational requirement issue was that the Tribunal misunderstood and mis- characterized the evidence put forward by Captain Duke, and ignored important portions of that evidence. 407 Captain Duke’s evidence focused primarily on the operational and schedul- ing difficulties that Air Canada would encounter if mandatory retirement was abolished, in light of the post-2006 ICAO standards. Air Canada made only brief submissions to the Court with respect to the Tribunal’s bona fide occupational requirement finding regarding the period before November of 2006.

i) The Accommodation of Mr. Vilven in the Pre-November 2006 Period 408 The burden is on the employer to produce concrete evidence to establish undue hardship: see Hutchinson v. British Columbia (Ministry of Health) (2004), 49 C.H.R.R. D/348, 2004 BCHRT 58 (B.C. Human Rights Trib.), at paras. 69 and 230, and Grismer, above, at para. 41. 409 The Tribunal found that Air Canada had not offered any evidence to show that allowing Mr. Vilven to continue flying as a First Officer after he turned 60 would have caused it any undue hardship in the pre-November 2006 period. Air Canada says that the Tribunal erred in this regard by only considering the situa- tion of Mr. Vilven in its undue hardship analysis. 410 By looking only at whether Mr. Vilven could have been accommodated, Air Canada says that the Tribunal asked itself the wrong question, given that what the complainants were seeking was the invalidation of the mandatory retirement Vilven v. Air Canada Anne Mactavish J. 283

requirement for all Air Canada pilots. Air Canada submits that the Meiorin test required the Tribunal to determine whether it would have been possible for Air Canada to accommodate not just the individual complainant, but all employees sharing the characteristics of the complainant, without imposing undue hardship upon the employer. 411 Air Canada had, however, conceded before the Tribunal that nothing in the ICAO standards in effect at the time that Mr. Vilven was forced to retire from Air Canada in 2003 prevented over-60 First Officers from flying international flights: transcript, at p. 2170. 412 Indeed, Air Canada could not point to any evidence in the record that would suggest that the answer would have been any different, depending on whether the Tribunal was considering Air Canada’s ability to accommodate Mr. Vilven alone, or all over-60 First Officers in the period prior to November of 2006. Consequently, any error that the Tribunal may have committed in this regard was not material to the result. 413 Given that the ICAO standards did not impose any mandatory restrictions on the ability of over-60 First Officers to continue flying, it follows that Mr. Vilven and other over-60 First Officers continued to be able to satisfy the requirements of their jobs, as long as they were able to meet Transport Canada’s licensing requirements. 414 As a result, the Tribunal’s finding of liability on the part of Air Canada for the termination of Mr. Vilven’s employment was reasonable. The reasonable- ness of the Tribunal’s findings with respect to the ability of Air Canada to con- tinue to accommodate Mr. Vilven and other over-60 First Officers after the com- ing into force of the new ICAO standards in November of 2006 will be addressed further on in these reasons.

ii) The Accommodation of Mr. Kelly in the Pre-November 2006 Period 415 The Tribunal found that although Mr. Kelly could not have continued to fly as a Captain/Pilot-in-command after he turned 60 in 2005, there was no reason why he could not have continued to fly internationally for Air Canada as a First Officer. The Tribunal noted that Air Canada did not consider or offer such ac- commodation to Mr. Kelly, nor did ACPA make any efforts to seek such an accommodation for Mr. Kelly as it was required to do. 416 As was the case with Mr. Vilven, Air Canada says that the Tribunal erred by only looking at whether Mr. Kelly could have been accommodated, rather than considering whether all over-60 Captains could have been accommodated by Air Canada. 417 Where accommodation is required, the obligation is not on the employee to originate a solution. It is the employer who will be in the best position to deter- 284 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

mine how the complainant can be accommodated without undue interference in the operation of the employer’s business: see Renaud, above, at para. 44. 418 As the Supreme Court observed in the Hydro-Qu´ebec case, an employer has the duty to arrange the employee’s workplace or duties so as to enable the em- ployee to do his or her work, if it can do so without undue hardship: at para. 16. 419 Where an employer has initiated an accommodation proposal that is reasona- ble and which would, if implemented, fulfill the duty to accommodate, the com- plainant has a duty to facilitate the implementation of the proposal. If the em- ployee fails to take reasonable steps causing the employer’s proposal to founder, the employee’s human rights complaint will be dismissed: Renaud, at para. 44. 420 While the pre-2006 ICAO standards restricted the capacity in which Mr. Kelly could have continued to fly for Air Canada once he turned 60, there was no licensing or operational restriction that would have prevented him from using his considerable seniority to bid into pilot positions other than that of Cap- tain/pilot-in-command, such as a First Officer position. 421 Thus, as of the date of the termination of Mr. Kelly’s employment in 2005, there was no legal impediment, other than the mandatory retirement provisions of the Air Canada pension plan and the Air Canada/ACPA collective agreement, that would have precluded him from remaining employed as a pilot with Air Canada. 422 Meiorin imposes both procedural and substantive obligations on employers when dealing with discriminatory employment standards. One important ques- tion to be considered in determining whether these obligations have been satis- fied is whether the employer has investigated alternative approaches that do not have a discriminatory effect. Another important question is whether there are different ways to perform the job, while still accomplishing the employer’s legit- imate work-related purpose: see Meiorin, at paras. 65-66. 423 That is, it will be incumbent on an employer to show that it had considered and reasonably rejected all viable forms of accommodation: see Grismer, at para. 42. 424 The evidence before the Tribunal was that Air Canada never considered whether it was possible to accommodate its over-60 Captains, including Mr. Kelly. 425 We do not know whether flying as a First Officer would have been an ac- ceptable alternative for Mr. Kelly. He may well have been willing to start flying as a First Officer after he turned 60, if the alternative was that he would have lost his job. We do not know for sure, however, because Mr. Kelly was never given that option. Indeed, no accommodation proposal was ever forthcoming from Air Canada. Vilven v. Air Canada Anne Mactavish J. 285

426 Air Canada had an obligation to arrange its employees’ duties so as to enable them to do their work, if it could do so without undue hardship. Air Canada did not establish that allowing Mr. Kelly to have continued his pilot career with Air Canada, albeit in a different capacity, would have caused undue hardship to the company in the period leading up to November of 2006. 427 Moreover, as was the case with Mr. Vilven, Air Canada has not pointed to concrete evidence to show that the answer would have been different, if the Tri- bunal had considered Air Canada’s ability to accommodate all over-60 Captains in the period prior to November of 2006. Consequently, the Tribunal’s finding of liability for the termination of Mr. Kelly’s employment in 2005 was reasonable. 428 The next issue, then, is the reasonableness of the Tribunal’s findings with respect to the ability of Air Canada to continue to accommodate over-60 pilots after the coming into force of the new ICAO standards in November of 2006.

G. Accommodation in the Post-November 2006 Period 429 As was noted earlier, Air Canada says that the Tribunal misunderstood and mischaracterized the evidence put forward by Captain Duke in support of its undue hardship argument. Air Canada also contends that the Tribunal ignored important portions of Captain Duke’s evidence as to the operational and sched- uling difficulties that would result if Air Canada were required to accommodate pilots over the age of 60. According to counsel for Air Canada, it is “wholly unsatisfactory that such an important issue be resolved on the basis of reasons that are flawed, unreasonable and inadequate”. 430 As will be explained further on in these reasons, Messrs. Vilven and Kelly also take the position that the Tribunal erred in its assessment of the bona fide occupational requirement issue, although they say that it ultimately got to the right result, albeit for the wrong reasons.

i) The Tribunal’s Treatment of Captain Duke’s Evidence 431 The Tribunal recognized that Air Canada’s ability to accommodate pilots over the age of 60 was “more problematic” under the post-November 2006 ICAO standards: Tribunal decision #2, at para. 95. 432 Captain Duke’s evidence focused on the impact that the elimination of mandatory retirement would have in relation to several different aspects of Air Canada’s operations. One of the issues that he addressed was the uncertainty that could result with respect to the hiring and training of pilots if mandatory retirement were abolished at Air Canada. Captain Duke explained that it takes the company about three months to schedule and train a pilot. As most Air Can- ada pilots now wait until they reach 60 to retire, this allows Air Canada to pre- dict its staffing and training needs with a relative degree of certainty. 286 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

433 Captain Duke testified that if mandatory retirement were abolished at Air Canada, the airline could be caught short if an over-60 pilot suddenly decided to retire, as nothing in the collective agreement requires pilots to give advance no- tice of when they intend to retire. According to Captain Duke, an unanticipated retirement could have a serious impact on the company’s operations. 434 Captain Duke conceded that this would not be an issue if Air Canada and ACPA were to agree to a requirement that pilots give a year’s advance notice of their intention to retire, or if the Tribunal were to make such an order. While observing that such a requirement could potentially be difficult to enforce as it is hard to force someone to work if they do not want to, Captain Duke acknowl- edged that economic incentives could be created to encourage the giving of timely notice. 435 Air Canada does not take issue with this assertion, but says that the Tribunal erred in failing to order that such a provision be included in the Air Can- ada/ACPA collective agreement. I am not persuaded that the Tribunal erred as alleged. 436 As noted above, Captain Duke’s evidence was that a notice requirement could either be imposed by the Tribunal, or could be negotiated by Air Canada and ACPA. The Tribunal observed that the burden was on Air Canada and ACPA to demonstrate that the renegotiation of the collective agreement would constitute undue hardship, and that it was not sufficient to merely assert that this is so without producing evidence to back it up. The Tribunal went on to note that Captain Duke had testified that, with some cooperation from the union, the nec- essary changes to the workplace rules could indeed be made. 437 The Tribunal was clearly satisfied that this was a matter that could be worked out between Air Canada and ACPA. As the Tribunal observed, Captain Duke himself had testified that “We are being pushed into a new world here and we are going together in this, so we have to make it work for everyone”: tran- script, at p. 1438. 438 The Tribunal went on to note that “Presumably as a co-respondent and prompted by the Tribunal’s decision, Air Canada would be motivated to cooper- ate in this process: see Tribunal decision #2, at paras. 153-154. As a matter of law, ACPA would also have an obligation to “make it work”: see Renaud, above. 439 The Tribunal accepted Captain Duke’s evidence on a second point, namely that the post-November 2006 ICAO standards prevented Air Canada from using Captains over the age of 65 on its international flights. I do not understand Messrs. Vilven and Kelly to dispute this finding. 440 The Tribunal did not address Captain Duke’s evidence as it related to Air Canada’s ability to have Captains over the age of 65 fly purely domestic routes, as Messrs. Vilven and Kelly had each indicated that they wanted to continue Vilven v. Air Canada Anne Mactavish J. 287

flying internationally. No issue was taken with respect to this point by Air Canada. 441 The major focus of Captain Duke’s evidence, and of the Tribunal’s analysis, was on the ability of Air Canada to accommodate Captains and First Officers over the age of 60, in light of impact of the over/under rule on seniority and scheduling. 442 Captain Duke presented demographic evidence that showed that within five years of the abolition of mandatory retirement at Air Canada, a very substantial percentage of Air Canada pilots would be over the age of 60, assuming that all of them continued working: see slides 60-68 of Captain Duke’s PowerPoint presentation. 443 Captain Duke says that Air Canada could only accommodate a very limited number of potentially restricted pilots (Captains over 60 but under 65, and First Officers over 60) before pilot scheduling would become unworkable because of the over/under rule. 444 To demonstrate the difficulties that Air Canada would encounter if it were required to accommodate over-60 pilots, Captain Duke ran a series of experi- ments examining the scheduling consequences of having various percentages of A-340 Captains and First Officers being over the age of 60 in Vancouver and Toronto. 445 He found that a schedule could be arrived at if 10% of A-340 Captains and First Officers in Vancouver were over 60. It would, however, result in a number of First Officers’ seniority not being respected, with some pilots receiving mate- rially lower quality monthly schedules, including being placed on reserve sched- ules rather than fixed flying schedules. Moreover, the utility of these pilots in providing reserve coverage would be diminished by the fact that potentially re- stricted pilots could not replace a First Officer if the Captain on an international flight was over 60. 446 No pilot schedule could be generated if the percentage of potentially re- stricted Captains in Vancouver was increased to 20%, and the percentage of po- tentially restricted First Officers was increased to 11%. This is because there simply would not be enough unrestricted pilots available to fly with the re- stricted pilots. 447 Captain Duke’s Toronto experiments demonstrated that no solution was pos- sible if more than 30% of A-340 Captains and First Officers were potentially restricted. Similarly, no schedule could be generated if more than 20% of Cap- tains and 40% of First Officers were potentially restricted. 448 According to Captain Duke, additional pilots would have to be hired by Air Canada to ensure that all flights could be properly staffed. At the same time, the airline would have to continue paying the over-60 pilots whose services could 288 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

not be used. The quality of the schedules generated for some pilots would also be negatively affected. 449 The Tribunal identified several deficiencies in Captain Duke’s evidence, which led the Tribunal to conclude that the evidence was not sufficient to estab- lish undue hardship to Air Canada: Tribunal decision #2, at para.122. There are, however, a number of problems with the Tribunal’s treatment of Captain Duke’s evidence. 450 For example, Captain Duke stated that although a scheduling solution could be found if only 10% of Vancouver pilots were “potentially restricted”, it would have resulted in some First Officers receiving materially lower quality monthly schedules. 451 The Tribunal noted that “There is no evidence as to the actual number of restricted pilots included in the 10% cohort”: Tribunal decision #2, at para.122. However, Captain Duke’s experiment did not require consideration of the actual number of over-60 Captains and First Officers in Vancouver at the time. The purpose of the experiment was to determine whether a flight schedule could be produced if 10% of each group was potentially restricted. 452 The Tribunal discounted Captain Duke’s evidence on this point on the basis that he had not explained how he had arrived at these conclusions: Tribunal de- cision #2, at para. 124. In actual fact, Captain Duke had explained that he had used Air Canada’s normal scheduling software, identified certain pilots as re- stricted under the ICAO standards, and then tried to generate hypothetical sched- ules in the same way that Air Canada currently generates real monthly sched- ules: transcript, at pp. 1409-1411. 453 The Tribunal also found that there was “no evidence as to what is a materi- ally lower quality schedule or why this is so”: Tribunal decision #2, at para. 125. However, Captain Duke had explained in his testimony that a “materially lower quality schedule” was one where senior pilots were awarded the reserve (or “on- call”) duty that would typically be awarded to more junior pilots, as opposed to a fixed, scheduled block of flying: transcript, at pp.1397-98 and 1410-1411, and slides 16-19 of Captain Duke’s PowerPoint presentation. 454 Captain Duke explained that seniority determines the quality of the schedule that a pilot can obtain. More senior pilots can work fewer days in a month (po- tentially as few as eight) and can avoid working on weekends. Examples of ac- tual pilot schedules of varying qualities (reflecting varying levels of seniority) were provided to the Tribunal. 455 It is true that a tribunal is not required to refer to every piece of evidence in the record, and will be presumed to have considered all of the evidence that is before it: see, for example, Hassan v. Canada (Minister of Employment & Immi- gration), [1992] F.C.J. No. 946, 147 N.R. 317 (Fed. C.A.). That said, the more important the evidence that is not specifically mentioned and analyzed in the Vilven v. Air Canada Anne Mactavish J. 289

tribunal’s reasons, the more willing a court may be to infer that the tribunal made an erroneous finding of fact without regard to the evidence: see Cepeda- Gutierrez v. Canada (Minister of Citizenship & Immigration), [1998] F.C.J. No. 1425, 157 F.T.R. 35 (Fed. T.D.), at paras.14-17. 456 Captain Duke’s evidence was central to Air Canada’s bona fide occupational requirement defence. Moreover, this is not merely a situation where the Tribunal failed to specifically refer to evidence contrary to its findings. Rather, the Tribu- nal stated quite categorically that there was “no evidence” on these points, giv- ing rise to the inescapable inference that important portions of Captain Duke’s evidence were overlooked. 457 The Tribunal stated that “no explanation” had been provided for why it was that a schedule could not be generated when the Vancouver experiment shifted to 20% of Captains and 11% of First Officers being potentially restricted: Tribu- nal decision #2, at para.127. However, Captain Duke explained why a schedule could not be generated in these circumstances: see transcript, at pp.1411-1417. It was open to the Tribunal to reject this explanation, but its statement that “no explanation” had been provided once again suggests that the evidence on this point was overlooked. 458 The Tribunal also found that the evidence was “lacking” as to the potential cost that would be incurred by Air Canada if it were required to hire at least one additional pilot while continuing to pay reserve pilots whose services could not be utilized: Tribunal decision #2, at para. 126. 459 However, Air Canada had actually provided detailed evidence as to the cost of hiring additional pilots in order to ensure that its reserve requirements were met. Captain Duke testified that the average salary and benefits for an Air Can- ada pilot is $177,000 per year. Mr. Harlan Clarke, the Manager, Labour Rela- tions at Air Canada, explained the pay system and pay rates for Air Canada pilots under the terms of the Air Canada/ACPA collective agreement. Mr. Clarke also testified that reserve pilots are guaranteed a minimum payment of 71 hours of pay per month. 460 No explanation was provided by the Tribunal as to why this evidence was “lacking”. Thus this element of the Tribunal’s decision thus lacks the trans- parency and accountability required of a reasonable decision. 461 While agreeing that there were problems with the Tribunal’s analysis, Messrs. Vilven and Kelly urge me to find that its overall conclusion that a bona fide occupational requirement defence had not been made out by Air Canada was reasonable. They say that all of the logistical and scheduling problems iden- tified by Captain Duke could be eliminated if Air Canada simply required that all over-60 pilots work as First Officers. If there were no over-60 Cap- tains/Pilots-in-command, Messrs. Vilven and Kelly say that the over/under rule would never come into play. 290 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

462 The difficulty with this argument is that the Tribunal did not offer it as a reason for rejecting Air Canada’s bona fide occupational requirement defence. It did touch on possible changes that could be made to the duties of Cap- tains/Pilots-in-command in order to address the scheduling problems that could result from accommodating over-60 pilots, but did so in the context of its undue hardship analysis as it related to ACPA: Tribunal decision #2, at paras.148-151. 463 In reviewing a decision against the reasonableness standard, it is not the role of a reviewing Court to find facts, to reweigh them, or to substitute its decision for that of the Tribunal: see League for Human Rights of B’Nai Brith Canada v. R., 2010 FCA 307, [2010] F.C.J. No. 1424 (F.C.A.), at para. 85. See also Khosa v. Canada (Minister of Citizenship & Immigration), 2009 SCC 12, [2009] 1 S.C.R. 339 (S.C.C.), at para. 59. 464 For these reasons, I find that the Tribunal’s bona fide occupational require- ment analysis was not reasonable as it related to Air Canada’s ability to accom- modate pilots over the age of 60 after November of 2006. Consequently, this aspect of the Tribunal’s decision will be set aside. 465 Before leaving the bona fide occupational requirement issue, there is one further matter that must be addressed, and that is a further error in the Tribunal’s analysis identified by Messrs. Vilven and Kelly.

ii) The Tribunal’s Finding Regarding the First Two Elements of the Meiorin Test 466 Messrs. Vilven and Kelly take issue with the Tribunal’s statement that they had conceded that the first two requirements of the Meiorin test had been satis- fied: see Tribunal decision #2, at para. 82. They contend they never conceded that the mandatory retirement provision of the Air Canada/ACPA collective agreement had been adopted for a rational purpose connected with the perform- ance of the job, in the honest and good faith belief that it was necessary to the fulfillment of this work-related objective. Indeed, Messrs. Vilven and Kelly have advanced a number of arguments before this Court as to why the first two elements of the Meiorin test had not been satisfied by Air Canada. 467 A review of the record discloses that a concession with respect to the first two elements of the Meiorin test was made before the Tribunal by counsel for the Canadian Human Rights Commission: transcript, at p.1984. No such conces- sion appears to have been made by either Mr. Vilven or Mr. Kelly, or by the interested party, the Fly Past 60 Coalition. 468 Complainants and the Commission have separate party status before the Tri- bunal: see subsection 50(1) of the CHRA. Interested party status may also be granted to third parties by the Tribunal: subsection 48.3(10). The Commission does not represent the interests of complainants before the Tribunal. Rather, the Commission is statutorily mandated to take such position before the Tribunal as, Vilven v. Air Canada Anne Mactavish J. 291

“in its opinion, is in the public interest having regard to the nature of the com- plaint”: section 51. As a result, concessions made by the Commission are not binding on either the complainants or on interested parties. 469 I have already found that the Tribunal’s finding with respect to the bona fide occupational requirement issue as it related to the period before November of 2006 was reasonable. Consequently, any error on the part of the Tribunal with respect to the first two elements of the Meiorin test is immaterial as it relates to that time frame. 470 However, I have found that there were a number of errors in the Tribunal’s bona fide occupational requirement analysis as it related to the post-November 2006 period, rendering this aspect of the Tribunal’s decision unreasonable. 471 As a result, the question of whether being under 60 was a bona fide occupa- tional requirement for Air Canada pilots after November of 2006 will be remit- ted to the same panel of the Tribunal, with the direction that the issue must be examined in light of all three elements of the Meiorin test.

X. Remedy 472 There is a dispute between the parties as to the remedy that should be granted by the Court, in the event that I were to uphold the Tribunal’s decision in relation to the Charter question, as I have in fact done. 473 Shortly before the hearing of these applications for judicial review, Messrs. Vilven and Kelly brought a motion for leave to amend their memorandum of fact and law. They sought to include a request for a declaration that paragraph 15(1)(c) of the CHRA is inconsistent with the Charter and is of no force and effect by operation of subsection 52(1) of the Constitution Act, 1982. 474 Messrs. Vilven and Kelly say that since the commencement of the human rights proceedings, they have sought an order directing Air Canada to cease ap- plying the mandatory retirement provisions of the pension plan and collective agreement to all Air Canada pilots. 475 It is evident from the affidavit sworn in support of the motion that the impe- tus for the respondents’ last-minute motion was a further decision of the Tribu- nal dealing with the issue of the remedies that were to be granted to Messrs. Vilven and Kelly. This decision was issued a couple of weeks before the com- mencement of the hearing of these applications. 476 In its most recent decision, the Tribunal refused to order Air Canada and ACPA to cease applying the mandatory retirement provisions of the collective agreement and Air Canada pension plan to all Air Canada pilots. In the Tribu- nal’s view, Messrs. Vilven and Kelly were seeking to have the remedies granted by the Tribunal extend beyond their own individual complaints. 292 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

477 Citing the decision of the Supreme Court of Canada in Martin v. Nova Scotia (Workers’ Compensation Board), above, the Tribunal observed that it did not have the power to make a general declaration of legislative invalidity. In the Tribunal’s view, the appropriate remedy was for it to rescind the termination of Messrs. Vilven and Kelly’s employment by ordering Air Canada to cease apply- ing the mandatory retirement provisions of the pension plan to them. The Tribu- nal further ordered that the discriminatory practice be redressed by directing Air Canada to reinstate Messrs. Vilven and Kelly. 478 Air Canada and ACPA oppose the motion on the basis that, as respondents to applications for judicial review, Messrs. Vilven and Kelly are not entitled to the declaratory relief that they are seeking. According to the applicants, if Messrs. Vilven and Kelly are successful in defending the applications, the only remedy available to the Court under section 18.1 of the Federal Courts Act is to dismiss the applications. 479 The constitutional remedies available to administrative tribunals (including the Canadian Human Rights Tribunal) are limited. Tribunals do not have the power to grant general declarations of invalidity. A determination by a tribunal that a provision of its enabling statute is invalid pursuant to the Charter will not be binding on future decision-makers: see Martin v. Nova Scotia (Workers’ Compensation Board), at para. 31. 480 This Court clearly possesses the jurisdiction to hear constitutional challenges in the context of applications for judicial review, and to grant declaratory relief in that regard: see Moktari v. Canada (Minister of Citizenship & Immigration), [2000] 2 F.C. 341, [1999] F.C.J. No. 1864 (Fed. C.A.), and Gwala v. Canada (Minister of Citizenship & Immigration), [1999] 3 F.C. 404, [1999] F.C.J. No. 792 (Fed. C.A.). It should be noted, however, that in both of these cases it was the applicant who was seeking the declaratory relief. 481 The Court’s power to grant declaratory relief is predicated upon there first being a finding that the tribunal in question erred in one of the ways identified in section 18.1(4) of the Federal Courts Act. This provision states that the Federal Court may grant relief (including declaratory relief) if it is satisfied that the fed- eral board, commission or other tribunal erred. 482 I have concluded that the Tribunal did not err in finding that paragraph 15(1)(c) of the CHRA is not saved by section 1 of the Charter. Consequently, the remedial powers conferred on the Court by subsection 18.1(3) of the Federal Courts Act are not engaged. The proper remedy is for the Court to dismiss Air Canada and ACPA’s applications for judicial review insofar as they relate to the Charter issue. 483 Messrs. Vilven and Kelly argue that despite the wording of section 18.1 of the Federal Courts Act, this Court nevertheless has the power to grant a general declaration of invalidity with respect to paragraph 15(1)(c) of the CHRA under Vilven v. Air Canada Anne Mactavish J. 293

subsection 52(1) of the Charter. Subsection 52(1) states that “The Constitution of Canada is the supreme law of Canada, and any law that is inconsistent with the provisions of the Constitution is, to the extent of the inconsistency, of no force or effect.” They have not, however, identified a single case where declara- tory relief, whether constitutional or otherwise, has been granted to a respondent on an application for judicial review. 484 Assuming, without deciding, that such a constitutional remedy could ever be granted to a responding party on an application for judicial review such as this, there are two reasons why I do not think it appropriate to do so here. 485 The first is that what Messrs. Vilven and Kelly are really trying is to do is to mount a collateral attack on the Tribunal’s remedial decision. That decision is not before me. If the respondents are not content with the remedies that were granted by the Tribunal, it is open to them to seek judicial review of the Tribu- nal’s remedial decision. 486 The second reason that I would decline to grant such relief is that although the federal and provincial Attorneys General would have been aware that consti- tutional validity of paragraph 15(1)(c) of the CHRA was at issue in this proceed- ing by virtue of the Notice of Constitutional Question served by ACPA, this Notice was served in the context of applications for judicial review brought by ACPA and Air Canada, and not by Messrs. Vilven and Kelly. 487 In these circumstances, I do not believe that the Attorneys General could reasonably have anticipated that Messrs. Vilven and Kelly would be seeking a general declaration of invalidity with respect to paragraph 15(1)(c) of the CHRA. This is especially so in light of the fact that there was no reference to such relief being sought in Messrs. Vilven and Kelly’s memorandum of fact and law. 488 A general declaration of invalidity could potentially have widespread impli- cations for many federally-regulated workplaces. Had the Attorneys General been aware that such relief was being sought by the respondents, it could well have affected their decisions as to whether or not to participate in this proceed- ing. It is entirely possible that one or more Attorneys General may have wished to make submissions, either with respect to the constitutional validity of the leg- islation generally, or as to whether any declaratory order should provide for a period of suspension and what that period should be. 489 In the absence of any claim of prejudice on the part of Air Canada and ACPA resulting from the lateness of the motion, I would grant leave to Messrs. Vilven and Kelly to amend their memorandum of fact and law to seek declara- tory relief. However, for the reasons given, I decline to grant the relief sought by the amendment. 294 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

XI. Conclusion 490 For these reasons I have concluded that the finding of the Canadian Human Rights Tribunal that paragraph 15(1)(c) of the CHRA is not a reasonable limit demonstrably justifiable in a free and democratic society as contemplated by section 1 of the Charter was correct. Consequently, ACPA’s application for ju- dicial review is dismissed in its entirety. Air Canada’s application for judicial review is also dismissed, as it relates to the Charter issue. 491 The Tribunal’s finding that Air Canada had not established that being under the age of 60 was a bona fide occupational requirement for its airline pilots at the time that Messrs. Vilven and Kelly’s employment was terminated in 2003 and 2005 respectively was reasonable. However, the Tribunal’s finding that Air Canada had not established that age was a bona fide occupational requirement for its pilots in light of the post-November 2006 ICAO standards was not reasonable. 492 As result, Air Canada’s application for judicial review as it relates to the bona fide occupational requirement issue will be allowed in part. The question of whether Air Canada has established that age was a bona fide occupational requirement for its airline pilots after November of 2006 is remitted to the same panel of the Tribunal, if available, for re-determination on the basis of the ex- isting record, in light of all three elements of the Meiorin test.

XII. Costs 493 As success in this matter was divided, each party should bear its own costs.

Judgment THIS COURT ORDERS AND ADJUDGES that: 1. ACPA’s application for judicial review is dismissed. 2. Air Canada’s application for judicial review is dismissed, as it relates to the section 1 Charter issue. 3. Air Canada’s application for judicial review is granted, in part, as it re- lates to the Tribunal’s finding that Air Canada had not demonstrated that age was a bona fide occupational requirement for its pilots. 4. The question of whether age was a bona fide occupational requirement for Air Canada pilots after November of 2006 is remitted to the same panel of the Tribunal, if available, for re-determination in accordance with these reasons, on the basis of the existing record. 5. Each party shall bear their own costs. Union’s application dismissed; employer’s application granted in part. Vilven v. Air Canada Anne Mactavish J. 295

Appendix

Canadian Human Rights Act, R.S.C. 1985, c.H-6 3. (1) For all purposes of this Act, 3. (1) Pour l’application de la the prohibited grounds of discrimi- pr´esente loi, les motifs de distinc- nation are race, national or ethnic tion illicite sont ceux qui sont origin, colour, religion, age, sex, fond´es sur la race, l’origine na- sexual orientation, marital status, tionale ou ethnique, la couleur, la family status, disability and con- religion, l’ˆage, le sexe, viction for which a pardon has l’orientation sexuelle, l’´etat matri- been granted. monial, la situation de famille, l’´etat de personne graci´ee ou la d´eficience. 7. It is a discriminatory practice, 7. Constitue un acte dis- directly or indirectly, criminatoire, s’il est fond´e sur un motif de distinction illicite, le fait, par des moyens directs ou in- directs: (a) to refuse to employ or contin- (a) de refuser d’employer ou de ue to employ any individual, or continuer d’employer un individu; (b) in the course of employment, (b) de le d´efavoriser en cours to differentiate adversely in rela- d’emploi. tion to an employee, on a prohib- ited ground of discrimination. 9. (1) It is a discriminatory prac- 9. (1) Constitue un acte dis- tice for an employee organization criminatoire, s’il est fond´e sur un on a prohibited ground of discrim- motif de distinction illicite, le fait, ination pour une organisation syndicale: (a) to exclude an individual from (a) d’empˆecher l’adh´esion pleine full membership in the organiza- et enti`ere d’un individu; tion; (b) to expel or suspend a member (b) d’expulser ou de suspendre un of the organization; or adh´erent; 296 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

(c) to limit, segregate, classify or (c) d’´etablir, a` l’endroit d’un ad- otherwise act in relation to an in- h´erent ou d’un individu a` l’´egard dividual in a way that would de- de qui elle a des obligations aux prive the individual of termes d’une convention collec- employment opportunities, or limit tive, que celui-ci fasse ou non par- employment opportunities or oth- tie de l’organisation, des erwise adversely affect the status restrictions, des diff´erences ou des of the individual, where the indi- cat´egories ou de prendre toutes vidual is a member of the organi- autres mesures susceptibles soit de zation or where any of the le priver de ses chances d’emploi obligations of the organization ou d’avancement, soit de limiter pursuant to a collective agreement ses chances d’emploi ou relate to the individual. d’avancement, ou, d’une fa¸con g´en´erale, de nuire a` sa situation. (2) Notwithstanding subsection (2) Ne constitue pas un acte dis- (1), it is not a discriminatory prac- criminatoire au sens du paragraphe tice for an employee organization (1) le fait pour une organisation to exclude, expel or suspend an syndicale d’empˆecher une adh´e- individual from membership in the sion ou d’expulser ou de suspen- organization because that indivi- dre un adh´erent en appliquant la dual has reached the normal age r`egle de l’ˆage normal de la retraite of retirement for individuals work- en vigueur pour le genre de poste ing in positions similar to the po- occup´e par l’individu concern´e. sition of that individual. 10. It is a discriminatory practice 10. Constitue un acte dis- for an employer, employee organi- criminatoire, s’il est fond´e sur un zation or employer organization motif de distinction illicite et s’il est susceptible d’annihiler les chances d’emploi ou d’avancement d’un individu ou d’une cat´egorie d’individus, le fait, pour l’employeur, l’association patronale ou l’organisation syndicale: (a) to establish or pursue a policy (a) de fixer ou d’appliquer des or practice, or lignes de conduite; Vilven v. Air Canada Anne Mactavish J. 297

(b) to enter into an agreement af- (b) de conclure des ententes fecting recruitment, referral, hir- touchant le recrutement, les mises ing, promotion, training, en rapport, l’engagement, les pro- apprenticeship, transfer or any motions, la formation, other matter relating to employ- l’apprentissage, les mutations ou ment or prospective employment, tout autre aspect d’un emploi pr´e- that deprives or tends to deprive sent ou eventuel.´ an individual or class of individu- als of any employment opportuni- ties on a prohibited ground of discrimination. 15. (1) It is not a discriminatory 15. (1) Ne constituent pas des ac- practice if tes discriminatoires: (a) any refusal, exclusion, expul- (a) les refus, exclusions, expul- sion, suspension, limitation, speci- sions, suspensions, restrictions, fication or preference in relation conditions ou pr´ef´erences de to any employment is established l’employeur qui d´emontre qu’ils by an employer to be based on a d´ecoulent d’exigences profession- bona fide occupational require- nelles justifi´ees; ment; [...] [...] (c) an individual’s employment is (c) le fait de mettre fin a` l’emploi terminated because that individual d’une personne en appliquant la has reached the normal age of re- r`egle de l’ˆage de la retraite en tirement for employees working in vigueur pour ce genre d’emploi; positions similar to the position of that individual; [...] [...] (2) For any practice mentioned in (2) Les faits pr´evus a` l’alin´ea paragraph (1)(a) to be considered (1)a) sont des exigences profes- to be based on a bona fide occu- sionnelles justifi´ees ou un motif pational requirement and for any justifiable, au sens de l’alin´ea practice mentioned in paragraph (1)g), s’il est d´emontr´e que les (1)(g) to be considered to have a mesures destin´ees a` r´epondre aux bona fide justification, it must be besoins d’une personne ou d’une established that accommodation of cat´egorie de personnes vis´ees con- the needs of an individual or a stituent, pour la personne qui doit class of individuals affected would les prendre, une contrainte exces- impose undue hardship on the per- sive en mati`ere de coˆuts, de sant´e son who would have to accommo- et de s´ecurit´e. date those needs, considering health, safety and cost. 298 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

Canadian Charter of Rights and Freedoms, 1982, R.S.C. 1985, App. II, No. 44, Schedule B. 1. The Canadian Charter of Rights 1. La Charte canadienne des droits and Freedoms guarantees the et libert´es garantit les droits et rights and freedoms set out in it libert´es qui y sont enonc´´ es. Ils ne subject only to such reasonable peuvent etreˆ restreints que par une limits prescribed by law as can be r`egle de droit, dans des limites qui demonstrably justified in a free soient raisonnables et dont la jus- and democratic society. tification puisse se d´emontrer dans le cadre d’une soci´et´e libre et d´emocratique. 15. (1) Every individual is equal 15. 1) La loi ne fait acception de before and under the law and has personne et s’applique egalement´ the right to the equal protectiona ` tous, et tous ont droit a` la mˆeme and equal benefit of the law with- protection et au mˆeme b´en´efice de out discrimination and, in particu- la loi, ind´ependamment de toute lar, without discrimination based discrimination, notamment des on race, national or ethnic origin, discriminations fond´ees sur la colour, religion, sex, age or race, l’origine nationale ou mental or physical disability. ethnique, la couleur, la religion, le sexe, l’ˆage ou les d´eficiences mentales ou physiques. Royal Laser Corp. v. Rivas 299

[Indexed as: Royal Laser Corp. v. Rivas] Royal Laser Corp. (Plaintiff) and Ruben Rivas and 1452939 Ontario Limited (Defendants) and Cassels, Brock & Blackwell LLP (Proposed Defendant/Third-Party) and Stikeman Elliott (Proposed Defendant/Third-party) Ontario Superior Court of Justice Marrocco J. Heard: January 27, 2011 Judgment: February 15, 2011* Docket: CV-09-370448, 2011 ONSC 1026 P. James Zibarras, Kevin D. Toyne for Plaintiff Kimberly Boara Alexander for Defendants W.E. Pepall, J. Squire for Cassels, Brock & Blackwell LLP Helder Travassos, Megan Marrie for Stikeman Elliott LLP Civil practice and procedure –––– Parties — Adding or substituting parties — Ad- ding party on own motion –––– L and R founded V Inc. — They entered into manage- ment shareholders’ agreement (MSA) in which L received nine percent of common shares — MSA also gave R option to compel L to sell his shares for one dollar to R if L was fired for just cause; if he was fired without just cause purchase price of his shares would be much higher — L was fired and R relied upon MSA and purchased shares for one dollar; he represented himself and his company 145 Ltd. as one hundred percent owners of V Inc. — L brought action against R and V Inc. — While action was pending, R and 145 Ltd. sold shares in V Inc. to R Corp. — Action was allowed; judge found that L was dismissed without just cause — MSA also permitted L to participate in any sale of shares by R; trial judge found that L was deprived of nine percent of proceeds from R Corp. — In response to trial judge’s decision, R Corp. sued R and 145 Ltd. for breach of contract alleging that R never bought back L’s shares as he had represented and this resulted in damages — R Corp. brought motion seeking leave to amend its statement of claim to add V Inc. as plaintiff as well as law firm C and law firm S; C represented R Corp. when it purchased shares of V Inc. and S acted for R and 145 Ltd. in share sale transaction — Motion granted in part — It was not pleaded that law firm S advised R, 145 Ltd. or V Inc. that its claim to have fired L for cause was virtually certain to suc- ceed — It was not pleaded that S failed to advise that L could be entitled to participate in sale of shares to R Corp. — It was not pleaded that law firm C ever advised R Corp. that R’s purported purchase of L’s shares for one dollar was effective at law if allegation of

*Additional reasons at Royal Laser Corp. v. Rivas (2011), 2011 CarswellOnt 1484, 2011 ONSC 1461 (Ont. S.C.J.) and Royal Laser Corp. v. Rivas (2011), 2011 ONSC 2742, 2011 CarswellOnt 2924 (Ont. S.C.J.). 300 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

termination for cause failed — Amended claim was no claim at all; all that was pleaded was that R Corp. thought R and 145 Ltd. owned one hundred percent of V Inc. which was just as true as it was false — Leave to add law firms refused; leave to add V Inc. as plaintiff was unopposed and therefore motion granted. Labour and employment law –––– Employment law — Termination and dismissal — Notice — Entitlement. Cases considered by Marrocco J.: Link v. Venture Steel Inc. (2008), 2009 C.L.L.C. 210-013, 2008 CarswellOnt 7102, 70 C.C.E.L. (3d) 114 (Ont. S.C.J.) — considered Link v. Venture Steel Inc. (2010), 2010 C.L.L.C. 210-017, 2010 CarswellOnt 1049, 2010 ONCA 144, 259 O.A.C. 199, 79 C.C.E.L. (3d) 201, 69 B.L.R. (4th) 161 (Ont. C.A.) — referred to Magill v. Expedia Canada Corp. (2010), 2010 ONSC 5247, 2010 CarswellOnt 7160 (Ont. S.C.J.) — considered Mazzuca v. Silvercreek Pharmacy Ltd. (2001), 2001 CarswellOnt 4133, 207 D.L.R. (4th) 492, 152 O.A.C. 201, 56 O.R. (3d) 768, 15 C.P.C. (5th) 235, [2001] O.J. No. 4567 (Ont. C.A.) — referred to Statutes considered: Limitations Act, 2002, S.O. 2002, c. 24, Sched. B Generally — referred to Rules considered: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 R. 5.04 — considered R. 5.04(2) — considered R. 26.01 — considered

MOTION by plaintiff seeking leave to amend its statement of claim to add parties.

Marrocco J.: The Plaintiff’s Motion to add Cassels, Brock & Blackwell and Stikeman Elliott LLP as Defendants 1 Royal Laser Corp. brought this motion seeking leave to amend its Statement of Claim to add the following three parties: Venture Steel Inc. as a plaintiff and Cassels Brock Blackwell LLP and Stikeman Elliott LLP as defendants. 2 Cassels Brock Blackwell LLP (“Cassels”) and Stikeman Elliott LLP (“Stike- man”) filed considerable affidavit evidence in support of their opposition to this motion, arguing that the evidence should inform the discretion that I have under Rule 5.04 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”). I have not relied on this evidence because, to do so, would have embedded me too deeply in the facts of this matter at this point in the proceedings. Lack of reference to the material filed should not be interpreted as a rejection of the Royal Laser Corp. v. Rivas Marrocco J. 301

affidavit evidence through which it was offered. I have, however, considered the decisions of this court in Link v. Venture Steel Inc. (2008), 70 C.C.E.L. (3d) 114 (Ont. S.C.J.) (available on CanLII), aff’d, in part, 2010 ONCA 144 (Ont. C.A.) [Link].

Background 3 William Link and Ruben Rivas founded a company known as Venture Steel Inc. in the fall of 1996. The company prospered and, by 2005, had sales of $335 million with approximately 200 employees. In June 2004, Ruben Rivas entered into a Management Shareholders’ Agreement (“MSA”) with Mr. Link and five other management shareholders, pursuant to which, among other things, Mr. Link received nine per cent of the common shares of Venture Steel Inc. 4 On February 21, 2005, Ruben Rivas, who owned or controlled ninety-one per cent of Venture Steel Inc., purported to fire William Link for just cause. The 2004 MSA gave Mr. Rivas the option to compel William Link to sell his shares to Mr. Rivas under a variety of circumstances. Specifically, the MSA provided that, if William Link was fired for just cause, Mr. Rivas could compel Mr. Link to sell his nine per cent common shareholdings to Mr. Rivas for one dollar. The MSA also provided that Mr. Rivas could compel Mr. Link to sell his shares, if Mr. Link’s employment was terminated without just cause. The price for Mr. Link’s common shares in that situation was considerably higher. 5 After firing Mr. Link, Ruben Rivas, claiming to have relied upon the “termi- nation for the just cause” term in the MSA, purported to purchase Mr. Link’s shares for one dollar. Thereafter, he represented himself and his company, 1452939 Ontario Limited (“145 Ontario”), as owners of one-hundred per cent of Venture Steel Inc. Venture Steel Inc., on the instructions of Mr. Rivas, cancelled all of Mr. Link’s shares, with the result that Mr. Rivas was shown on the corpo- rate records of Venture Steel Inc. as the owner of one-hundred per cent of its issued and outstanding common shares. 6 Not surprisingly, William Link sued Ruben Rivas and Venture Steel Inc. 7 While Mr. Link’s lawsuit was pending, Ruben Rivas and 145 Ontario sold their purported one-hundred per cent shareholding of Venture Steel Inc. to Royal Laser Corp. for $43.5 million. The sale of Venture Steel Inc. closed on April 30, 2006. 8 As part of the sale process, Ruben Rivas and Royal Laser Corporation at- tempted to quantify the risk posed by the Link litigation to Ruben Rivas and Venture Steel Inc., who were the two defendants in that action. They agreed that Ruben Rivas would pay the first $1.4 million of any settlement or award granted to Mr. Link and that any excess over $1.4 million would be paid by Venture Steel Inc. 302 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

9 Mr. Link’s lawsuit against Venture Steel Inc. went to trial and, on November 14, 2008, in a decision released by this court, Mr. Link was successful in the litigation against Venture Steel Inc. Mr. Link’s action against Ruben Rivas was dismissed without costs. 10 Specifically, a judge of this court found that Mr. Link was dismissed without just cause. The judge found that Mr. Link was entitled to twelve months’ notice and that, in lieu of notice, he was entitled to twelve months’ pay. Consistent with this finding, the trial judge found that Mr. Link was not dismissed at law from his position until February 20, 2006; that is twelve months after his unjusti- fied termination. 11 The trial judge’s determination that Mr. Link was fired without just cause was central to his calculation of the damages to which Mr. Link was entitled from Venture Steel Inc. 12 As indicated earlier, the 2004 MSA contained provisions which provided the pricing conditions for the purchase of Mr. Link’s shares by Mr. Rivas, if Mr. Link was dismissed without cause. When these provisions were applied to Mr. Link, it was clear that Mr. Rivas would not have completed the purchase of Mr. Link’s shares by April 30, 2006. April 30, 2006 is an important date because, as indicated earlier, it was on that date that Royal Laser Corp. purchased for $43.5 million one-hundred per cent of the shares of Venture Steel Inc., which Ruben Rivas represented were owned by himself and 145 Ontario (see: para. 57 of the decision of the trial judge). 13 The MSA also contained a clause which permitted Mr. Link to participate proportionally in any sale of shares by Mr. Rivas. Accordingly, the trial judge found that, by cancelling his shares, Venture Steel Inc. had caused Mr. Link to be deprived of nine per cent of $43.5 million. Therefore, Venture Steel Inc. was ordered by the trial judge to pay nine per cent of $43.5 million to Mr. Link as part of the damages awarded to him. There were some minor adjustments to this payment which are not relevant on this motion. The trial judge determined that Mr. Link should be paid approximately $3.2 million by Venture Steel Inc. to compensate him for what Royal Laser Corp. would have paid him for his shares. 14 It is not necessary for me to describe the other damage calculations in the trial judge’s decision. It is sufficient to say that Venture Steel Inc. had to pay Mr. Link approximately $5 million, of which the first $1.4 million was to be paid by Mr. Rivas. 15 In response to the trial judge’s decision in the Link litigation matter, Royal Laser Corp. did two things. First, it sued Ruben Rivas and 145 Ontario for breach of contract. In its Statement of Claim, it alleged that the breach was occa- sioned by the fact that Ruben Rivas never actually bought back Mr. Link’s shares in Venture Steel Inc., as he had represented to Royal Laser Corp. Further, the Statement of Claim alleged that this false representation had resulted in dam- Royal Laser Corp. v. Rivas Marrocco J. 303

ages of $3.9 million to Royal Laser Corp. The second thing Royal Laser Corp. did was unsuccessfully appeal the trial judge’s decision. 16 The action against Ruben Rivas and 145 Ontario did not, for all practical purposes, proceed while the appeal of the Link decision was pending. By March 2010, Royal Laser Corp.’s appeal had been dismissed and it began to pursue the civil action against Ruben Rivas and 145 Ontario in earnest. 17 Ruben Rivas and 145 Ontario defended against the Royal Laser Corp. claim. In its defence, Ruben Rivas and 145 Ontario took the position that, prior to clos- ing the share sale to Royal Laser Corp., they had made full disclosure of all facts concerning the Link litigation which, at that time (April 30, 2006), was still before the courts. Specifically, they claimed to have accurately described the outstanding litigation and to have made available to Royal Laser Corp. all materials in their possession concerning the Link litigation. They also took the position that their purported transfer of one-hundred per cent of the shares of Venture Steel Inc. was qualified by the disclosure of the fact that Mr. Link claimed to be a nine per cent shareholder. 18 The defendants took the position that they negotiated the risk posed by the Link litigation with the plaintiff and, in the result, agreed to provide a $1.4 mil- lion indemnification against the outcome of that litigation. Finally, the defend- ants took the position that they had provided the $1.4 million required by the indemnification and, therefore, had honored their agreement with Royal Laser Corp. 19 Cassels and Stikeman wish to advance, as one of their defences, the provi- sions of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. The parties have agreed that any Limitations Act defence will be pleaded and I will, accordingly, not consider the Limitations Act when deciding this motion.

Analysis 20 Rules 5.04(2) and 26.01 provide as follows: 5.04(2) At any stage of a proceeding the court may by order add, delete, or substitute a party or correct the name of a party incorrectly named, on such terms as are just, unless prejudice would result that could not be compen- sated for by costs or an adjournment. [Emphasis added] ... 26.01 On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment. 21 Both rules 26.01 and 5.04(2) have as a prerequisite that the proposed amend- ment or change in the parties must not give rise to prejudice that cannot be com- pensated by costs or an adjournment. However, rule 26.01 is mandatory as it provides that, if the prerequisite is met, the amendment “shall” be allowed. In 304 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

contrast, the language of rule 5.04(2) is discretionary, as it provides that, if the prerequisite is met, the relief sought “may” be granted (see: Mazzuca v. Silvercreek Pharmacy Ltd. (2001), 56 O.R. (3d) 768 (Ont. C.A.)). 22 In Magill v. Expedia Canada Corp., 2010 ONSC 5247 (Ont. S.C.J.) at para. 38, Perell J. explained further: On a motion to amend a pleading, the court does not examine the factual merits of the proposed amendments or the moving party’s motives for seek- ing the amendment, but it does examine whether as a matter of law, the amendment raises a tenable claim or defence and whether the proposed amendment has been properly pleaded in the sense of complying with the rules that govern pleadings: Plante v. Industrial Alliance Life Insurance Co., [2003] O.J. No. 3034 (Master); Andersen Consulting Ltd. v. Canada (Attorney General), [2001] O.J. No. 3576 (C.A.) at para. 37; Jack v. Canada (Attorney General), [2004] O.J. No. 3294 (S.C.J.). If an amendment would violate the rules of pleading, or if it raises an issue that would not constitute a reasonable cause of action, the amendment should not be allowed: Mastercraft Group Inc. v. Confederation Trust Co., [1997] O.J. No. 3451 (Gen. Div.) at para. 7. 23 In other words, the court retains a residual discretion to refuse an amend- ment to add a party if the proposed amendment fails to meet a basic threshold of legal soundness - the proposed amendment must be tenable at law. 24 Royal Laser Corp., in this motion, seeks to amend its claim against Ruben Rivas and 145 Ontario by adding Venture Steel Inc. as a plaintiff and Stikeman and Cassels as defendants. Cassels represented Royal Laser Corp. when it pur- chased the shares of Venture Steel Inc. from Ruben Rivas and 145 Ontario. Stikeman acted for Ruben Rivas, 145 Ontario and two other persons, the ven- dors in the share sale transaction. 25 The amended Statement of Claim alleges that the particular breaches of duty were that the “lawyer defendants” advised Royal Laser Corp. that the remaining management shareholders, after Mr. Link was allegedly terminated for cause, owned one-hundred per cent of Venture Steel Inc. Royal Laser Corp. claims that it and Venture Steel Inc. relied on Cassels and Stikeman to assess and advise whether Mr. Link’s shares had been bought back. Royal Laser Corp. and Ven- ture Steel Inc. complain that Cassels and Stikeman should have told them that Venture Steel Inc. did not own Mr. Link’s shares when the sale transaction closed on April 30, 2006. 26 The plaintiff wishes to add Venture Steel Inc. as a plaintiff. Venture Steel Inc. was not a party to the April 30, 2006 Share Purchase Agreement (“SPA”). That agreement was entered into by Ruben Rivas, 145 Ontario and two other persons as Vendors and Royal Laser Corp. as Purchaser. Stikeman did not act for Venture Steel Inc. with respect to the negotiation and preparation of the Royal Laser Corp. v. Rivas Marrocco J. 305

April 30, 2006 SPA. It acted for Ruben Rivas, 145 Ontario and the other two persons who were the Vendors pursuant to that agreement.

Tenability of the Claims 27 There is no dispute about the fact that Mr. Rivas could only exercise his option to purchase all of Mr. Link’s shares for one dollar, if Mr. Link was fired for just cause. Once there was a determination that Mr. Link had not been fired for just cause, the purported one dollar purchase of his shares would be ineffec- tive at law. If the purported purchase of Mr. Link’s shares for one dollar was ineffective at law, then he would have been entitled to be shown on the corpo- rate records of Venture Steel Inc. as a nine per cent common share owner. In circumstances where one-hundred per cent of the company was worth $43.5 mil- lion, which was obvious to everyone involved in the April 30, 2006 sale to Royal Laser Corp., then Mr. Link would be, subject to adjustments, entitled to nine per cent of that amount. 28 It is not pleaded that Stikeman advised Ruben Rivas, 145 Ontario or Venture Steel Inc. to the contrary, nor could it be, because such advice would have been utterly nonsensical. It has not been pleaded that Stikeman, at any point, advised Ruben Rivas, 145 Ontario or Venture Steel Inc. that its claim to have fired Mr. Link for cause was virtually certain to succeed. 29 It is not pleaded that Stikeman failed to advise Ruben Rivas, 145 Ontario or Venture Steel Inc. that, if Mr. Link was a shareholder in April 2006, he was entitled, pursuant to the MSA, to proportionately participate in the sale of shares to Royal Laser Corp. 30 Venture Steel Inc. was not represented by Stikeman or Cassels in the April 30, 2006 share transaction. Cassels acted for Royal Laser Corp., the Purchaser of the shares of Venture Steel Inc., and Stikeman acted for the Vendors of those shares. 31 It is not pleaded that Stikeman acted for Venture Steel Inc. in the Link litiga- tion. They did not. Venture Steel Inc. was represented by the firm of Teplitsky Colson in that litigation. 32 Mr. Rivas could always deliver one-hundred per cent of the shares in Ven- ture Steel Inc. to Royal Laser Corporation. Mr. Rivas could always exercise his option to purchase all of Mr. Link’s shares, if he agreed to sell Venture Steel Inc. It was only a question of how much it was going to cost him to acquire Mr. Link’s shares. Indeed, in his action against Venture Steel Inc., Mr. Link sought and was awarded damages for being wrongfully-deprived of his shareholding. He did not seek nor did he obtain a declaration that he remained a shareholder. 33 Similarly, it has not been pleaded that Cassels ever advised Royal Laser Corp. that Mr. Rivas’ purported purchase of Mr. Link’s shares for one dollar was effective at law if the allegation of termination for cause failed. It has not 306 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

been pleaded that Cassels ever advised Royal Laser Corp. that Venture Steel Inc.’s just cause claim was virtually certain to succeed. 34 It has not been pleaded that Cassels ever advised Royal Laser Corp. that the appropriate notice period was unlikely to be set at twelve months. In this regard, according to the trial judge in the Link litigation, Venture Steel Inc. suggested, at trial in 2008 before this litigation was commenced, that seven months’ was an appropriate notice period in the absence of just cause (see: Link, supra, at para. 36). I refer to the seven months’ notice period simply because it was suggested by counsel for Venture Steel Inc. (not Cassels or Stikeman) and in order to ob- serve that, even if it was an appropriate period of notice, pursuant to the MSA, final payment to Mr. Link for his shares would not have been required until April 2006. In such a situation, the MSA provided that Mr. Link would be enti- tled to proportionately participate in the sale of the shares of Venture Steel Inc. to Royal Laser Corp. Mr. Link, in other words, would still have been entitled to nine per cent of the $43.5 million purchase price. 35 It has not been pleaded that Cassels failed to advise Royal Laser Corporation about the existence or legal effect of the “Piggyback Rights” in the MSA, which permitted Mr. Link to proportionately participate in the sale of Mr. Rivas’ shares. These rights are set out in the MSA at paragraph 3.4(1). It has not been pleaded that Royal Laser Corp. did not know about this paragraph. 36 The proposed amended claim refers to the same share purchase by Royal Laser Corp. as Royal Laser Corp.’s claim against Ruben Rivas and 145 Ontario. It would not be inconvenient for a judge to consider the proposed claim when considering the merits of the breach of contract action. At the same time, it is also true that neither Stikeman nor Cassels is required as a party in order to enable Royal Laser Corp. to pursue its breach of contract claim against Ruben Rivas and 145 Ontario. 37 Financially, what occurred is relatively straightforward. Mr. Rivas was paid $43.5 million for one-hundred per cent of the shares of Venture Steel Inc. As a result of the trial judge’s decision in Link, supra, Mr. Link was entitled, pursuant to the provisions of the MSA, to sell nine per cent of Venture Steel Inc. to Royal Laser Corp. Mr. Link was unable to do that because Mr. Rivas and Venture Steel Inc. wrongfully claimed to have purchased his nine per cent shareholding for one dollar and Venture Steel Inc. wrongfully cancelled Mr. Link’s shares. Accordingly, Venture Steel Inc. had to pay Mr. Link for the damage which it had caused him; in other words, nine per cent of $43.5 million. Consistent with this conclusion, the Court of Appeal added to the trial judge’s order an order that Link be required to surrender his common shares to Venture upon payment of the damages awarded in respect of those shares (see: Link, supra, at para. 65). 38 Thus, in the result, Royal Laser Corp. paid $43.5 million for one-hundred per cent of the common shares of Venture Steel Inc.; Royal Laser Corp. received Royal Laser Corp. v. Rivas Marrocco J. 307

one-hundred per cent of the common shares of Venture Steel Inc. Venture Steel Inc. had to compensate Mr. Link for, among other things, the damage to him as a result of its wrongful cancellation of the shares. 39 It has not been pleaded that Cassels or Stikeman ever advised Royal Laser Corp. or Venture Steel Inc. that this was not a risk posed by the Link litigation. 40 After considering these circumstances, I have decided that the amended claim is simply no claim at all. All that has been pleaded is that Royal Laser Corp. thought Mr. Rivas and 145 Ontario owned one-hundred per cent of Ven- ture Steel Inc. — an assertion which is just as true as it is false. 41 The trial judge, in Link, supra, did observe that the one dollar share purchase was never actually completed. However, this observation played no part in his decision because he found that Mr. Link’s employment had been terminated without just cause and that his shares could not have been purchased for one dollar. 42 Leave to add Stikeman is refused. Leave to add Cassels is refused. The plaintiff’s motion in this regard is dismissed with costs. 43 Leave to add Venture Steel Inc. as a plaintiff was unopposed and that motion is granted.

The defendants’ motion to issue a third-party claim against Cassels Brock Blackwell LLP and Stikeman Elliott LLP 44 The defendants brought this motion which is opposed by Cassels and Stikeman. 45 The parties have agreed that issues related to the Limitations Act will be pleaded and, as a result, this court is not being asked to consider the Limitations Act on this motion. 46 Cassels did not act for the defendants. The defendants have not pleaded any facts which would entitle them to contribution and indemnity from Cassels. 47 The defendants have also taken the position that Cassels is a necessary party because it was an active participant in the share purchase transaction. Presuma- bly, the same could be said of Stikeman. The relevant evidence that lawyers in either firm are permitted by law to give in this matter can be obtained from them as witnesses. 48 The defendants’ motion to issue a third-party claim against Cassels is re- fused with costs. 49 Stikeman acted for the defendants. The defendants promised Royal Laser Corp. one-hundred per cent of the common shares of Venture Steel Inc. for $43.5 million. It is not disputed that Royal Laser Corp. received one-hundred per cent of the common shares of Venture Steel Inc. The cancellation of Mr. Link’s shares by Venture Steel Inc. was not unwound or reversed. The defend- 308 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

ants cannot complain that they did not deliver one-hundred per cent of the com- mon shares of Venture Steel Inc. 50 The defendants have not pleaded with any specificity that any information was withheld from or misrepresented to Royal Laser Corp by Stikeman. Given that the plaintiff and the defendants have exchanged pleadings, it is not unrea- sonable to insist that the cause for complaint in this regard be articulable. 51 It has been pleaded that Stikeman was responsible for protecting the defend- ants’ interests. This is undoubtedly correct. What has not been pleaded are facts, which, if proven to be true, demonstrate that the defendants’ interests were not protected. 52 The plaintiff’s intention to amend the statement of claim to claim damages for misrepresentation and unjust enrichment does not affect my decision. 53 The defendants’ motion to issue a third-party claim against Stikeman is re- fused with costs.

Conclusion 54 Leave to add Stikeman is refused. Leave to add Cassels is refused. The plaintiff’s motion in this regard is dismissed with costs. 55 Leave to add Venture Steel Inc. as a plaintiff was unopposed and that motion is granted. 56 The defendants’ motion to issue third-party claims against Cassels and Stike- man is dismissed with costs. 57 If the parties and Cassels and Stikeman cannot agree on the quantum of costs, brief written submissions may be made. Motion granted in part. Cann v. Rona Ontario Inc. 309

[Indexed as: Cann v. Rona Ontario Inc.] Jonathan Cann (Applicant) and Rona Ontario Inc. (Respondent) Jonathan Cann (Applicant) and Rona Ontario Incorporated, Rona Incorporated and Noble Trade Incorporated (Respondents) Ontario Human Rights Tribunal Naomi Overend V-Chair Judgment: February 14, 2011 Docket: 2009-02981-I, 2010-06826-I, 2011 HRTO 303 None given Human rights –––– Practice and procedure — Commissions and boards of in- quiry — General principles –––– Consolidation — Employee claimed discrimination based on disability, as well as reprisals contrary to Human Rights Code — Employee brought another claim based on disability in hiring — Hearing held regarding consolida- tion — Proceedings to be consolidated — Overlapping issues of fact and law existed — Multiplicity of proceedings to be avoided — Parties supported consolidation. Cases considered by Naomi Overend V-Chair: Cann v. Rona Ontario Inc. (2011), 2011 HRTO 163 (Ont. Human Rights Trib.) — re- ferred to Lattey v. Canadian Pacific Railway (2002), 2002 CarswellNat 5691, 2002 CarswellNat 5692 (Can. Human Rights Trib.) — followed Persaud v. Toronto District School Board (2008), 2008 HRTO 25 (Ont. Human Rights Trib.) — considered Statutes considered: Human Rights Code, R.S.O. 1990, c. H.19 Generally — referred to

HEARING regarding consolidation of complaints under Human Rights Code.

Naomi Overend V-Chair:

1 The purpose of this Interim Decision is to determine whether these two Ap- plications should be consolidated and to determine the respondents’ request for particulars with respect to the 2009 Application. 2 The applicant filed an Application on July 27, 2009 (the 2009 Application), alleging discrimination in employment on the basis of disability and reprisal contrary to the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”). The 2009 Application concerns the treatment leading up to and includ- ing his termination from employment on July 19, 2009. 310 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

3 The applicant filed a second Application on September 13, 2010 (the 2010 Application), alleging discrimination in employment on the basis of disability and reprisal contrary to the Code against Rona Ontario Incorporated, Rona In- corporated and Noble Trade Incorporated (collectively “the corporate respon- dents”). The 2010 Application concerns an alleged failure to offer him an inter- view or hire him in four separate job competitions. 4 In a previous Interim Decision, 2011 HRTO 163 (Ont. Human Rights Trib.), the Tribunal sought submissions from the parties on consolidation. Both the ap- plicant and respondents advised the Tribunal that they supported consolidation of these matters. 5 Rule 1.7(d) of the Tribunal’s Rules of Procedure states that, in order to pro- vide for the fair, just and expeditious resolution of any matter before it, the Tri- bunal may consolidate or hear Applications together. 6 In Persaud v. Toronto District School Board, 2008 HRTO 25 (Ont. Human Rights Trib.), the Tribunal adopted the decision of the Canadian Human Rights Tribunal in Lattey v. Canadian Pacific Railway [2002 CarswellNat 5691 (Can. Human Rights Trib.)], 2002 CanLII 45928, which set out the factors that should be considered in deciding whether to consolidate or hear proceedings together: (a) The public interest in avoiding a multiplicity of proceedings, in- cluding considerations of expense, delay, the convenience of the witnesses, reducing the need for the repetition of evidence, and the risk of inconsistent results; (b) The potential prejudice to the respondents that could result from a single hearing, including the lengthening of the hearing for each respondent as issues unique to the other respondent are dealt with, and the potential for confusion that may result from the in- troduction of evidence that may not relate to the allegations spe- cifically involving one respondent or the other; and (c) Whether there are common issues of fact or law. 7 There are clearly common and overlapping issues of fact and law, and a public interest in avoiding a multiplicity of proceedings. Moreover, the parties support consolidation of the Applications. For these reasons, the Tribunal orders these Applications consolidated. 8 As noted above, the respondents brought a Request for Order During Pro- ceedings (Form 10) in which they sought particulars concerning certain speci- fied allegations in the 2009 Application. The applicant did not respond to this Request and the time for doing so has now passed. 9 The Tribunal concurs that the particulars requested by the respondents in paragraph 3 of their Form 10 are appropriate, given that this matter is now pro- ceeding to hearing. To the extent that the applicant is able to provide the particu- Crompton v. Fairlane Performance Management Inc. 311

lars requested, he shall do so within four weeks of the date of this Interim Decision. 10 I am not seized of this matter. Order accordingly.

[Indexed as: Crompton v. Fairlane Performance Management Inc.] Elizabeth Crompton (Applicant) and Fairlane Performance Management Inc. (Respondent) Ontario Human Rights Tribunal Sherry Liang V-Chair Judgment: February 9, 2011 Docket: 2009-03674-I, 2011 HRTO 274 None given Human rights –––– Practice and procedure — Commissions and boards of in- quiry — General principles –––– Request for deferral pending completion of concurrent legal proceeding — Applicant employee’s employment was terminated — Employee al- leged termination was due to her disability — Respondent employer alleged termination was due to misconduct — Employee made claim for employment insurance (EI) bene- fits — Board of Referees found employer’s allegations of misconduct were substantiated and did not grant EI benefits — Employee appealed board’s decision to umpire — Ap- peal to umpire had not yet been heard — Employee concurrently brought application under s. 34 of Human Rights Code alleging discrimination in her termination — Em- ployer made request to defer employee’s application to human rights tribunal pending completion of employee’s appeal to umpire — Request granted — To avoid duplication of legal proceedings, application was deferred pending completion of appeal to umpire — There was significant overlap between facts and issues in human rights application and those that would be considered by umpire — Appeal to umpire would determine whether assertions of misconduct were substantiated. Public law –––– Social programs — Employment insurance — Entitlement to bene- fits — Misconduct — Miscellaneous –––– Denial of benefits — Appeal to umpire — Deferral of human rights tribunal proceeding pending completion of appeal — Applicant employee’s employment was terminated — Employee alleged termination was due to her disability — Respondent employer alleged termination was due to misconduct — Em- ployee made claim for employment insurance (EI) benefits — Board of Referees found employer’s allegations of misconduct were substantiated and did not grant EI benefits — Employee appealed board’s decision to umpire — Appeal to umpire had not yet been heard — Employee concurrently brought application under s. 34 of Human Rights Code 312 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

alleging discrimination in her termination — Employer made request to defer employee’s application to human rights tribunal pending completion of employee’s appeal to um- pire — Request granted — To avoid duplication of legal proceedings, application was de- ferred pending completion of appeal to umpire — There was significant overlap between facts and issues in human rights application and those that would be considered by um- pire — Appeal to umpire would determine whether assertions of misconduct were substantiated. Labour and employment law –––– Employment law — Termination and dismissal — Termination of employment by employer — What constituting just cause — Mis- conduct — Miscellaneous –––– Allegation of employer discrimination in terminating employment — Applicant employee’s employment was terminated — Employee alleged termination was due to her disability — Respondent employer alleged termination was due to misconduct — Employee made claim for employment insurance (EI) benefits — Board of Referees found employer’s allegations of misconduct were substantiated and did not grant EI benefits — Employee appealed board’s decision to umpire — Appeal to umpire had not yet been heard — Employee concurrently brought application under s. 34 of Human Rights Code alleging discrimination in her termination — Employer made re- quest to defer employee’s application to human rights tribunal pending completion of employee’s appeal to umpire — Request granted — To avoid duplication of legal pro- ceedings, application was deferred pending completion of appeal to umpire — There was significant overlap between facts and issues in human rights application and those that would be considered by umpire — Appeal to umpire would determine whether assertions of misconduct were substantiated. Cases considered by Sherry Liang V-Chair: Calabria v. DTZ Barnicke (2008), 2008 HRTO 411 (Ont. Human Rights Trib.) — considered Crompton v. Fairlane Performance Management Inc. (2010), 2010 HRTO 2391 (Ont. Human Rights Trib.) — referred to Statutes considered: Human Rights Code, R.S.O. 1990, c. H.19 s. 34 — referred to s. 45 — referred to s. 45.1 [en. 2006, c. 30, s. 5] — referred to

REQUEST by respondent employer for deferral of employee’s application alleging dis- crimination in termination of employee’s employment.

Sherry Liang V-Chair:

1 This is an Application filed on September 18, 2009 under section 34 of Part IV of the Human Rights Code, R.S.O. 1990, c. H.19 as amended (the “Code”). 2 By Interim Decision dated December 1, 2010, 2010 HRTO 2391 (Ont. Human Rights Trib.), the Tribunal denied a Request to dismiss the Application Crompton v. Fairlane Performance Management Inc. Sherry Liang V-Chair 313

under section 45.1 of the Code. The Tribunal also requested the submissions of the parties on whether it is appropriate to defer the Application pending comple- tion of the applicant’s appeal to the Umpire from the decision of a Board of Referees. 3 The respondent has made written submissions in support of deferral. The applicant has not filed submissions. 4 The applicant alleges, among other things, that her employment was termi- nated in September 2008 at least in part because of a disability. The respondent states that the termination of her employment was based on the applicant’s mis- conduct in the workplace. 5 The applicant made a claim for Employment Insurance benefits. In its deci- sion, the Board of Referees found the allegations of misconduct substantiated and allowed the appeal from the initial decision to grant the applicant El bene- fits. The applicant has appealed the Board of Referees decision to the Umpire. A hearing date was originally scheduled for July 7, 2010, then for October 13, 2010. On November 1, 2010, the Umpire issued a decision that the appeal is “peremptorily adjourned to another date” and that there would be “no further adjournment, except for serious reasons”.

Decision 6 Section 45 of the Code provides that the Tribunal may defer an application in accordance with the Tribunal’s Rules of Procedure. Rule 14.1 of the Tribu- nal’s Rules provides that the Tribunal may defer consideration of an Applica- tion, on such terms as it may determine, on its own initiative or at the request of any party. The Tribunal will consider, in light of the particular circumstances of each case, whether deferral is the most fair, just and expeditious way of proceed- ing with the Application. 7 In Calabria v. DTZ Barnicke, 2008 HRTO 411 (Ont. Human Rights Trib.), the Tribunal stated: Deferral of an application ensures that proceedings dealing with the same issues do not run concurrently, thereby raising the possibility of inconsistent decisions on facts or law. Some of the factors that may be relevant in decid- ing whether to defer consideration of an application before the Tribunal are the subject matter of the other proceeding, the nature of the other proceeding, the types of remedies available in the other proceeding, and whether it would be fair overall to the parties to defer, having regard to the status of each proceeding and the steps that have been taken to pursue them. 8 In the case before me, it is evident that there is a significant overlap between the facts and issues in this Application and those that will be considered by the Umpire. The applicant claims that her dismissal and the respondent’s actions leading to her dismissal were discriminatory in that they were based at least in 314 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

part on her disability. The respondent alleges that her employment was termi- nated for misconduct, allegations which the applicant describes as spurious. At the very least, the appeal to the Umpire will result in a determination of whether the assertions of misconduct are substantiated. 9 In these circumstances, to avoid duplication of legal proceedings with the attendant risk of inconsistent findings, the Tribunal will defer this Application pending the completion of the appeal to the Umpire. The Tribunal directs the parties’ attention to Rules 14.3 and 14.4 which outline the procedure by which the Application may be brought back on after the conclusion of that process. 10 I am not seized of this matter. Request granted. Rock v. Toronto Community Housing Corp. 315

[Indexed as: Rock v. Toronto Community Housing Corp.] Edmund Rock (Applicant) and Toronto Community Housing Corporation (Respondent) Ontario Human Rights Tribunal Sherry Liang V-Chair Judgment: February 10, 2011 Docket: 2010-06661-I, 2011 HRTO 284 None given Labour and employment law –––– Labour law — Labour arbitrations — Jurisdic- tion of arbitration board — Source — Collective agreement –––– Human rights com- plaint — Complainant was terminated from employment — Complainant claimed that he was discriminated against on basis of race and disability at employment — Complain- ant’s union filed grievance on his behalf challenging termination; grievance was not set- tled during grievance process and was referred to arbitration with hearing set at future date — Complainant filed application for order pursuant to s. 34 of Ontario Human Rights Code — Respondent employer filed response in which it requested that tribunal defer application pending completion of arbitration process — Application deferred — Sole jurisdiction to deal with human rights does not rest with tribunal to exclusion of labour arbitrator — Supreme Court of Canada affirmed that grievance arbitrators have not only power but also responsibility to implement and enforce substantive rights and obligations of human rights and other employment related statuses as if they were part of collective agreement — It was apparent that there was substantial overlap between facts and issues covered by application and those in grievance; in both central issue was termi- nation and reasons for it — Arbitration process was already underway; deferral was therefore appropriate. Human rights –––– Practice and procedure — Commissions and boards of in- quiry — Adjournment –––– Complainant was terminated from employment — Com- plainant claimed that he was discriminated against on basis of race and disability at em- ployment — Complainant’s union filed grievance on his behalf challenging termination; grievance was not settled during grievance process and was referred to arbitration with hearing set at future date — Complainant filed application for order pursuant to s. 34 of Ontario Human Rights Code — Respondent employer filed response in which it re- quested that tribunal defer application pending completion of arbitration process — Ap- plication deferred — Sole jurisdiction to deal with human rights does not rest with tribu- nal to exclusion of labour arbitrator — Supreme Court of Canada affirmed that grievance arbitrators have not only power but also responsibility to implement and enforce substan- tive rights and obligations of human rights and other employment related statuses as if they were part of collective agreement — It was apparent that there was substantial over- lap between facts and issues covered by application and those in grievance; in both cen- 316 CANADIAN CASES ON EMPLOYMENT LAW 88 C.C.E.L. (3d)

tral issue was termination and reasons for it — Arbitration process was already under- way; deferral was therefore appropriate. Cases considered by Sherry Liang V-Chair: Parry Sound (District) Welfare Administration Board v. O.P.S.E.U., Local 324 (2003), 2003 CarswellOnt 3500, 2003 CarswellOnt 3501, 2003 SCC 42, (sub nom. Social Services Administration Board (Parry Sound) v. Ontario Public Service Employees Union, Local 324) 308 N.R. 271, (sub nom. Social Services Administration Board (Parry Sound District) v. Ontario Public Service Employees Union, Local 324) 177 O.A.C. 235, 47 C.H.R.R. D/182, (sub nom. Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324) [2003] 2 S.C.R. 157, 31 C.C.E.L. (3d) 1, 2003 C.L.L.C. 220-062, (sub nom. Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324) 230 D.L.R. (4th) 257, 7 Admin. L.R. (4th) 177, REJB 2003-47356, [2003] S.C.J. No. 42 (S.C.C.) — referred to Statutes considered: Human Rights Code, R.S.O. 1990, c. H.19 s. 34 — pursuant to

APPLICATION by complainant employee for order pursuant to s. 34 of Ontario Human Rights Code.

Sherry Liang V-Chair:

1 This is an Application filed on August 25, 2010 under section 34 of Part IV of the Human Rights Code, R.S.O. 1990, c. H.19 as amended, (the “Code”). 2 The applicant alleges discrimination in employment on the grounds of race and disability. His employment was terminated on December 21, 2009. The ap- plicant is represented in his employment relations by the Ontario Public Service Employees’ Union, Local 529 which has filed a grievance on his behalf chal- lenging the termination. The grievance was not settled during the grievance pro- cess and has been referred to arbitration. A hearing date was initially scheduled for February 25, 2011, and it appears that it will continue in June 2011. 3 The respondent filed a Response in which it requests that the Tribunal defer the Application pending the completion of the arbitration process. 4 The applicant opposes deferral of the Application, stating that there is no information suggesting that the arbitration will deal with the issues of discrimi- nation based on disability and race. He also states that while the Tribunal is empowered to deal with injury to one’s dignity, a labour arbitrator is not, and that the sole jurisdiction of dealing with human rights violations rests with the Tribunal. Rock v. Toronto Community Housing Corp. Sherry Liang V-Chair 317

Decision 5 The applicant is not correct that the sole jurisdiction to deal with human rights issues rests with the Tribunal, to the exclusion of a labour arbitrator. The Supreme Court of Canada has affirmed that grievance arbitrators have not only the power but also the responsibility to implement and enforce the substantive rights and obligations of human rights and other employment-related statutes as if they were part of the collective agreement (Parry Sound (District) Welfare Administration Board v. O.P.S.E.U., Local 324, 2003 SCC 42 (S.C.C.)). 6 The Supreme Court thus confirmed that human rights tribunals are not the only decision-makers that can decide human rights claims. Where the parties are already engaged in a concurrent legal proceeding in which they are raising the same human rights issues before a decision-making body with the authority to make determinations about those issues, the orderly administration of justice favours deferral to the other proceeding. In such a scenario, the Tribunal’s nor- mal approach is to defer to the other proceeding. 7 Even where there is not a complete overlap of issues, the Tribunal may defer an application where there is a risk that concurrent proceedings will lead to in- consistent decisions on facts or law. Some of the factors that may be relevant in deciding whether to defer consideration of an application before the Tribunal are the subject matter of the other proceeding, the nature of the other proceeding, the type of remedies available in the other proceeding, and whether it would be fair overall to the parties to defer, having regard to the status of each proceeding and the steps that have been taken to pursue them. 8 In this case, while it may not be clear to what extent all of the issues raised in the Application will be part of the case put before the labour arbitrator, it is apparent that there is substantial overlap between the facts and issues covered by the Application and those referred to in the grievance. In both, the central issue is the termination of the applicant’s employment and the reasons for that termi- nation. The arbitration process is also underway. In these circumstances, I am satisfied that deferral is appropriate. 9 The Application will therefore be deferred pending the completion of the arbitration proceeding. The Tribunal directs the parties’ attention to Rules 14.3 and 14.4 which outline the process by which the Application may be brought back on after the arbitration has been concluded. 10 I am not seized of this matter. Application deferred.