A forestry company (“International”) was unsuccessful on an application for judicial review from a decision of the BC Human Rights Tribunal (“Tribunal”) that a voluntary severance agreement (“Agreement”) ratified by the forestry workers union discriminated against non-active employees because active employees were offered severance pay under the Agreement, whereas non-active employees were not

24. April 2007 0

Administrative law – Decisions of administrative tribunals – Human Rights Tribunal – Human rights complaints – Discrimination – Disability –  Employment law – Severance pay – Labour law – Collective agreements – Judicial review – Evidence – Jurisdiction – Standard of review – Correctness

International Forest Products Ltd. v. Sandhu, [2007] B.C.J. No. 289, British Columbia Supreme Court, February 13, 2007, Cole J.

International operated a sawmill at Fraser Mills. Production at the sawmill ceased in August 2001, with a planer mill and kilns continuing in operation but requiring only 60-70 employees on a two-shift basis. The Agreement provided severance payments to all employees in the event of full closure of the sawmill. Senior active employees were given the option of choosing to continue to work at Fraser Mills at the remaining planer/kilns positions, or to take the voluntary severance pay offered.

Active employees with insufficient seniority were entitled to the offer of voluntary severance pay.

Non-active employees were not offered the voluntary severance pay under the Agreement.

The complainants/respondents (“Complainants”) were non-active employees at the time of ratification of the Agreement because they were on Workers’ Compensation or other long-term disability benefits and unable to work by reason of physical or mental disability. The majority of the Complainants had been terminated by International for non-acceptable absenteeism. The Complainants filed a Human Rights complaint alleging discrimination on the basis that no severance pay was offered to them. The Complainants did not allege that the termination of their employment was a breach of the Human Rights Code.

At the Tribunal hearing, no viva voce evidence was called by either party, with the result that the Tribunal was left to rely on a Statement of Agreed Facts that “fell short of the factual foundation necessary for a thorough examination of the issues raised in the complaint.”

The standard of review was determined by the Administrative Tribunals Act (“ATA”). There is no privative clause in respect of the Tribunal’s decision, so the standard of review pursuant to s.59 of the ATA was correctness on all issues except those of discretion, findings of fact and application of common law rules of natural justice and fairness, with the proviso that the court not set aside a finding of fact unless there is “no evidence to support it or if, in light of all the evidence, the finding is otherwise unreasonable.” Findings of fact are subject to a reasonableness standard of review. Questions of mixed fact and law were subject to a correctness review.

International argued that the Tribunal erred in law and exceeded its jurisdiction in determining that the Agreement was made to compensate employees for their years of service. The Court held that this was a finding of fact, and determined that the Tribunal’s finding was correct, and the conclusion about the Agreement’s purpose was reasonable. The Court also suggested that the significance of the Agreement’s purpose had been overstated, and that perhaps a better question would have been “Who does and does not benefit from the severance offer?”

International also argued that the Tribunal made findings of fact in circumstances where there was no evidence to support them, and which, in light of the evidence, were unreasonable.

The Court held that the Tribunal’s conclusion that use of the term “active employment” in the Agreement was inherently discriminatory and would impact the complainants’ dignity was an unreasonable finding made without evidence. However, the Court found that the error was not significant, because it would not effect the Tribunal’s overall findings, which was reasonable, that employees were required to be able-bodied in order to enjoy the severance payments under the Agreement.

International argued that the Tribunal erred in its analysis of the criteria required to establish a prima facie case of discrimination by misidentifying the appropriate comparator group as all individuals employed by Interfor, where another possible comparator group would have been the group of employees who would be terminated due to partial closure.

The Court dismissed this ground of review, finding that the Tribunal’s determination that the denial of the option to choose severance amounted to adverse treatment was correct, and the comparator group of all employees was correct, given that the Agreement concerned all employees.

The Tribunal’s conclusion that International breached the Human Rights Code and discriminated against the complainants on the basis of disability by denying them access to the Agreement was held to be correct. International’s petition for judicial review was dismissed.

To stay current with the new case law and emerging legal issues in this area, subscribe here.