Flieger v. New Brunswick

The appellants joined the New Brunswick Highway Patrol in 1981 as constables. By 1988, both held the rank of sergeant. In July of that year, the province announced its decision to disband the patrol and the duties of the patrol were contracted out to the RCMP. On December 21, 1988, the appellants received formal notice of lay-off. These notices cited s. 26 of the Civil Service Act and s. 9(1)(b) of N.B. Reg. 84-229 and stated that the appellants' services would no longer be required as of February 8, 1989 as a result of the discontinuance and disbandment of the New Brunswick Highway Patrol. The appellants continued to receive their full salary until April of 1989. The province of New Brunswick offered them alternative employment with the public service of New Brunswick as corrections officers and the appellants accepted this offer. As well for one year beginning in April of 1989, they received the sum of $5,000 over and above the regular salary for corrections officers.

The appellants brought separate actions, which were tried together, claiming damages for wrongful dismissal. It was their position that since the duties formerly carried out by the Highway Patrol were now being performed by members of the RCMP, pursuant to a contract with the province, there was not a "discontinuance of a function" as that term is used in s. 26. Accordingly, the appellants claimed that they should have received reasonable notice when they were laid off rather than the 30 days notice that was required to be given by provincial regulation in the event of a discontinuance of function. The trial judge found that there was a "discontinuance of a function" and dismissed their claims: (1991), 117 N.B.R. (2d) 239, 295 A.P.R. 239. This decision was upheld by the Court of Appeal for New Brunswick: (1991), 125 N.B.R. (2d) 228, 316 A.P.R. 228, 87 D.L.R. (4th) 191.

Court of Queen's Bench

Stevenson J. noted that there was no "lack of work" as the duties were now being performed by another police force. However, relying upon several decisions of the Federal Court which had considered similarly worded federal legislation, he held that there had been a "discontinuance of a function" and dismissed the claims. He held that the appellants' common law rights to notice had been abolished by the provincial legislation (the Civil Service Act) which authorized the lay-offs.

Court of Appeal

Stratton C.J.N.B. noted that there was no question of a "lack of work" since the work continued to be done although by another police force. For him the primary question was whether there had been a "discontinuance of a function". He distinguished Canada (Attorney General) v. Public Service Alliance of Canada, [1991] 1 F.C. 428 (C.A.), later affirmed on appeal to the Supreme Court of Canada, [1993] 1 S.C.R. 941 ("PSAC"). He did so on the basis that PSAC turned on the question of whether there had been a breach of a collective agreement while there was no collective agreement in this case.

He held that the word "function" in the Civil Service Act referred to the holder of an office. The appellants who held the office of sergeant in the Highway Patrol, ceased to hold that office once the Patrol was disbanded. There was therefore a "discontinuance of a function". To hold otherwise, would, in his opinion, unduly restrict employers in planning their affairs.

In any event, he was of the view that the appellants had received reasonable notice. He observed that they had been given compensation ($5,000) and had accepted alternate employment in corrections services. In these circumstances he found that they had been adequately compensated.

Hoyt J.A. (as he then was), in dissent, expressed the view that there had not been a "discontinuance of a function" within the meaning of the Act. He agreed with the remarks of Mahoney J.A. in PSAC concerning the impact of contracting out. He thought that these remarks, although made in the context of a case which was considering a collective agreement, were applicable because (at p. 246 N.B.R.):

... they correctly point out that when the work that was formerly being performed by the laid off employee is still being performed, although on a contract basis, there cannot be said to be a discontinuance of that employee's function.

In the view of Hoyt J.A., as a result of the provisions of s. 20 of the Civil Service Act, the common law rules apply. He would have remitted the case to the trial judge for an assessment of the damages arising for failure to give reasonable notice.

Civil Service Act, S.N.B. 1984, c. C-5.1

20 Subject to the provisions of this Act or any other Act, termination of the employment of a deputy head or an employee shall be governed by the ordinary rules of contract.

26(1) When the services of an employee are no longer required because of lack of work or because of the discontinuance of a function, the deputy head, in accordance with regulations made by the Board, may lay off the employee.

26(2) An employee ceases to be an employee when he is laid off pursuant to subsection (1).

26(3) Notwithstanding anything in this Act, an employee who has been laid off may be placed by the Secretary of the Board on those eligibility lists for which in the opinion of the Secretary of the Board the employee is qualified.

26(4) Notwithstanding subsection (2), an employee who is laid off is entitled during such period as the Secretary of the Board may determine for any case or class of cases, to enter any closed competition for which he would have been eligible had he not been laid off.

Board of Management General Regulation - Civil Service Act, N.B. Reg. 84-229

9(1) When the services of an employee are no longer required because of lack of work or because of the discontinuance of a function, the deputy head shall

(a) before the employee is laid off, consider the qualifications and work performance of the employee and determine whether or not the employee could be retained on staff in another appropriate position within his department; and

(b) if the employee cannot be retained in another appropriate position in the department, give the employee and the Secretary of the Board thirty days notice that the services of the employee are no longer required.

Public Service Labour Relations Act, R.S.N.B. 1973, c. P-25

6(2) Subject to paragraph 102(3)(a), nothing in this Act affects the right of the employer to engage private contractors or contract work out for any purpose whatsoever.

63(2) No collective agreement shall provide, directly or indirectly, for the alteration or elimination of any existing term or condition of employment or the establishment of any new term or condition of employment,

(a) the alteration or elimination of which or the establishment of which, as the case may be, would require or have the effect of requiring the enactment or amendment of any legislation by the Legislature, except for the purpose of appropriating money required for its implementation, or

(b) that has been or may be, as the case may be, established pursuant to any Act specified in the Second Schedule.

(a) Discontinuance of Function

The first issue to be resolved is whether the decision by the province to contract out highway patrol functions to the RCMP constituted a "discontinuance of a function". Neither the New Brunswick Civil Service Act nor its regulations define this term. As a result it may be helpful to see if any satisfactory definition of this term has evolved in the case law. The same phrase "discontinuance of a function" appears in the Public Service Employment Act , R.S.C., 1985, c. P-33, s. 29(1) , and the Canada Labour Code , R.S.C., 1985, c. L-2, s. 242(3.1) , and the courts have considered the meaning of the phrase as it is used in those Acts. A review of this case law demonstrates that there are two different approaches: one based on the notion of an "office" and the other on "activities".

In Transport Guilbault Inc. v. Scott, an unreported decision of the Federal Court of Appeal, No. A-618-85, May 21, 1986 (leave to appeal refused, January 29, 1987, [1987] 1 S.C.R. xiii), Pratte J.A. wrote at p. 2:

The discontinuance of a function within the meaning of s. 61.5(3)(a) [of the Canada Labour Code (now s. 242(3.1))] is discontinuance of a function within a given employer's business. Such discontinuance may result from a decision made by the employer to give work done till then by its employees to a contractor. Provided that decision is genuine and there is nothing artificial about it, s. 61.5(3)(a) cannot be interpreted otherwise without unduly limiting the employer's freedom to plan and organize its business as it wishes.

This case is one of the few that deals specifically with contracting out. A key phrase within this judgment is "within an employer's business". The implication is that it is not necessary that the function cease to be performed altogether, but that within its business the employer had terminated that particular function.

Gonthier v. Canada (1986), 77 N.R. 386 (F.C.A.), is of somewhat limited application since it deals more with the question of what constitutes a "lack of work" than "discontinuance of a function". In that case the employees were language teachers who were laid off due to budget constraints. No other employees were engaged to do their jobs nor was their work contracted out. Instead, the remaining employees in the branch assumed a greater proportion of the same tasks which they were already required to perform and the entire Language Training Branch had to reduce its activities. The Federal Court of Appeal held that in these circumstances there was a valid lay-off due to a "lack of work".

In Mudarth v. Canada (Minister of Public Works), [1989] 3 F.C. 371 (T.D.), the plaintiff had furnished secretarial services to a specific project team composed of engineers and architects. Her position was terminated and the work that she had been doing was parcelled out to what amounted to a secretarial pool. No other secretary was engaged to perform the duties she had performed nor was there a position created elsewhere so that another secretary would undertake her duties. In fact, faced with budget cuts, the head of the special team decided to discontinue the plaintiff's job in order to provide an extra "person-year" which would permit the hiring of another architect or engineer. The court held that this constituted a "discontinuance of a function". The defendant employer argued that the function related to the employee herself. Once the tasks done by her had been redistributed to others, then in the defendant's submission, her "function" no longer existed. In determining the meaning to be given to "function" the trial judge looked at a number of dictionary definitions and the case law. Addy J., whose reasons were adopted by the Court of Appeal (1990), 113 N.R. 159, then stated (at p. 378):

To give effect to the argument of the plaintiff regarding the meaning to be attributed to the word function would preclude the Government from abolishing any position and discharging the employee unless some part of the tasks or work performed by that employee was completely discontinued and no longer performed by any other person or group in the Civil Service. This would of course greatly preclude reorganization of the departments and branches of the service by the redistribution of tasks and would, to a large extent, paralyse any updating of the administrative procedures. Such a radical interpretation of subsection 29(1) of the Public Service Employment Act is not at all required in order to give full effect to the scheme and spirit of the legislation. The Act, of course, does encroach on and limit the general powers of management which are given to the Government of Canada and its various departments but the encroachment should be limited to the extent required to give effect to its objects and provisions.

The approach taken in Mudarth relates the word "function" to the "office" held by the plaintiff. Her office consisted of the bundle of tasks and responsibilities which had been undertaken and performed by her as a secretary. This bundle of tasks was no longer being performed. Thus her office had ceased to exist and there was accordingly a "discontinuance of a function".

One decision of the Federal Court Trial Division is particularly helpful. In Coulombe v. The Queen, F.C.T.D., No. T-390-84, April 5, 1984, unreported, the plaintiff was the Registrar and Executive Director of the Canada Labour Relations Board. While there was disagreement between the parties as to why the position held by the plaintiff was abolished, it was common ground that the activities that he had performed were transferred to the directors of the six regions across Canada and to the Chairman. The court held that this constituted a "discontinuance of a function".

In coming to this conclusion Cattanach J. defined function in this way (at p. 5):

Function is the act of performing and is defined as the kind of action belonging to the holder of an office, hence the function is the performance of the duties of that office. By the performance of the duties of an office the holder thereof can be said to fulfil his function. Functions are therefore the powers and duties of an office.

Thus it seems to me that when the functions of an office are transferred elsewhere in the course of a reorganization and the office is abolished while the functions are continued the function of the holder of the office is discontinued from which it follows that the services of an employee who held that office are no longer required because of the discontinuance of the function formerly performed by him....

It should be noted that in Coulombe the activities that had been undertaken by the plaintiff were parcelled out among a number of people within the organization. No single person continued to undertake the entire group of activities that had formerly been performed by the plaintiff. While each of the activities continued to be done, the categorization of them as done by one person, that is the "office" that the plaintiff had carried out, had indeed been discontinued. Therefore, the court found that the "function" of the plaintiff had been discontinued.

The dictionary definitions add little as they permit an approach to function which is either "office" based or "activities" based. The specialized law dictionaries offer the following definitions of "function":

In Black's Law Dictionary (6th ed. 1990), "function" is defined as:

The nature and proper action of anything; activity appropriate to any business or profession.... Office; duty; fulfillment of a definite end or set of ends by the correct adjustment of means. The occupation of an office. By the performance of its duties, the officer is said to fill his function....

Similarly, The Dictionary of Canadian Law (1991), defines "function" as follows:

n. 1. An object, power or duty or group of them.... 4. Employment; carrying out an office.

The definitions offered by more general dictionaries are no more helpful. The Concise Oxford Dictionary (8th ed. 1990), defines "function" as:

n. 1 a an activity proper to a person or institution. b a mode of action or activity by which a thing fulfils its purpose. c an official or professional duty; an employment, profession, or calling.... 4 ... v. intr. fulfil a function, operate;

The Random House Dictionary of the English Language (2nd ed. 1987), defines "function" as:

n. 1. the kind of action or activity proper to a person, thing, or institution; the purpose for which something is designed or exists; role. ... v.i. 8. to perform a specified action or activity; work; operate: The computer isn't functioning now.... 9. to have or exercise a function; serve: ...

How then should "discontinuance of a function" be defined? "Discontinuance" obviously refers to the termination of something that is termed a function. A "function" must be the "office" that is to say the bundle of responsibilities, duties and activities that are carried out by a particular employee or group of employees.

It is this definition of "function", in the sense of "office" which best comports with the environment of the work place. The very word "employment" indicates the existence of an employee and an employer. A term such as "function" or "office" must have a meaning for both these parties. For example, a person may have the "office" of plant superintendent. A person functioning as a plant superintendent carries out a regime or set of activities and duties that forms the office of plant superintendent. Both the employer and the employee understand what is required in order to perform or to carry out that particular office. Similarly the "office" of secretary or punch press operator carries with it a particular set of activities and duties. A particular bundle of skills is required to perform the duties and activities required by each of these offices. Once again both the employer and employee will know exactly what is required to perform the activities of the particular office.

Therefore, a "discontinuance of a function" will occur when that set of activities which form an office is no longer carried out as a result of a decision of an employer acting in good faith. For example, if a particular set of activities is merely handed over in its entirely to another person, or, if the activity or duty is simply given a new and different title so as to fit another job description then there would be no "discontinuance of a function". On the other hand, if the activities that form part of the set or bundle are divided among other people such as occurred in Mudarth, supra, there would be a "discontinuance of a function". Similarly, if the responsibilities are decentralized, as happened in Coulombe, supra, there would also be a "discontinuance of a function".

(b) Application of these Definitions to the Facts of this Case

The appellants carried out the set of activities and duties of highway patrolmen in the New Brunswick Highway Patrol. When the New Brunswick Highway Patrol was disbanded, the "function" or "office" of New Brunswick Highway Patrolman ceased to exist. Obviously, the province could not abandon the policing of highways. New Brunswick quite properly contracted out this activity to the RCMP. This the province was specifically permitted to do pursuant to the provisions of s. 6(2) of the Public Service Labour Relations Act. The province was entitled to contract with the RCMP to perform whatever activities were necessary in order to patrol the highway. The manner in which these activities were carried out would be determined by the RCMP subject to whatever conditions were imposed by the province as the terms of its contract.

Thereafter, the patrol work would be done by RCMP officers in RCMP vehicles, using RCMP equipment. From the moment it began to perform its contractual duties the RCMP would be responsible for all that this police work entailed. It would be the RCMP that would be responsible for the hiring, training, discipline and promotion of officers. It would be the RCMP that would fix their place of work and hours of work, their pay and pensions, provide the necessary equipment and arrange for its maintenance. It would be the RCMP that would be obliged to provide all that was required to comply with the terms of the contract. The way in which the patrolling was carried out might well be different from the methods followed by the New Brunswick Highway Patrol. Yet the province no doubt determined that it would be preferable, and in its best interests, to have the RCMP carry out the patrolling of the highways. This decision may have been reached for a number of valid reasons. Certainly the bona fides of the decision is not challenged.

The decision of the province to terminate its own highway patrol and enter into a contract with the RCMP to provide the service was a legitimate management decision. That decision terminated the "office" of the New Brunswick Highway Patrol personnel. It meant that the "function", that is to say the set of duties and activities, of the appellants as sergeants in New Brunswick Highway Patrol had been discontinued. Their office had ceased to exist.

It was vigorously argued on behalf of the appellants that this Court's recent decision in PSAC, supra, indicates that the contracting out of the work performed by employees cannot constitute a "discontinuance of a function". I cannot accept that argument. That decision is simply not applicable to the case at bar. First, I would observe that in PSAC it was specifically noted that some instances of contracting out would legitimately constitute a "discontinuance of a function". At page 974 I stated:

Section 29 will undoubtedly apply to some instances of contracting out. However, in the present case the so-called contracted employees engaged in exactly the same work, on the same premises, with the same equipment, and carried out the very same instructions as had the indeterminate employees prior to the contracting out. The only change was that the new employer was now the contractor rather than the Public Service. This, in my opinion cannot, constitute a discontinuance of function. This however does not mean that there could not be cases of contracting out that would legitimately comprise a discontinuance of function and which would therefore permit lay-offs under s. 29. [Emphasis added.]

It is to be seen that the facts are very different from the contracting out which occurred in the case at bar. Here the RCMP could perform the contract duties in any manner which it deemed to be appropriate pursuant to the directions and orders of their senior officers. The RCMP would use its own personnel, vehicles and equipment. More importantly, in PSAC there had not been a termination of the very "office" or "function" as occurred in this case with the disbandment of the New Brunswick Highway Patrol.

Secondly, and perhaps most importantly, in PSAC there was a specific provision in the collective agreement that placed certain duties and obligations on the employer in circumstances where there was a contracting out of work. It was the failure to comply with these duties and obligations contained in the collective agreement that determined the result in the case. At page 975 the following appears:

What must be remembered is that in this case the Policy imposes an obligation on the employer in the event of contracting out. This obligation was correctly articulated by the Board:

The employer had an obligation under the Policy to review and when possible terminate contracting out arrangements in order to ensure the continued employment of indeterminate employees within the Public Service. (Emphasis added.)

In my opinion the Board's finding that the employer failed to carry out this obligation in the instant case can certainly not be characterized as patently unreasonable.

In the case at bar there is no such obligation resting upon the employer. Thus the very factor that determined the result in the PSAC case is not present here. Indeed I would observe that s. 63(2) of the Public Service Labour Relations Act of New Brunswick specifically prohibits a collective agreement from derogating from the 30 days notice requirement set out in s. 9(1) of N.B. Reg. 84-229. The PSAC case is therefore readily distinguishable and certainly not determinative of this case.

In conclusion, there was a bona fide decision by the employer province to disband the Highway Patrol. This decision resulted in the discontinuance of the function of the appellants as sergeants in the Patrol. It remains to be determined what notice ought to have been given to the appellants upon the termination of their employment.

(c) Notice upon Termination of Employment

On this aspect of the case the appellants rely upon the dissenting reasons of Hoyt J.A. In essence it was his view that s. 26 of the Civil Service Act did not take away an employee's right to have his or her termination governed by the ordinary rules of contract as provided by s. 20 of the same Act. In his view, it followed that the appellants were entitled to reasonable notice of the termination of their contract of employment.

Unfortunately, I cannot agree with this position. Section 20 provides as follows:

20 Subject to the provisions of this Act or any other Act, termination of the employment of a deputy head or an employee shall be governed by the ordinary rules of contract.

It will be noted that the section provides that it is "[s]ubject to the provisions of this Act ...". Section 26(1) of the Act reads as follows:

26(1) When the services of an employee are no longer required because of lack of work or because of the discontinuance of a function, the deputy head, in accordance with regulations made by the Board, may lay off the employee.

Section 9(1) of N.B. Reg. 84-229 passed pursuant to the Civil Service Act reads:

9(1) When the services of an employee are no longer required because of lack of work or because of the discontinuance of a function, the deputy head shall

...

(b) if the employee cannot be retained in another appropriate position in the department, give the employee and the Secretary of the Board thirty days notice that the services of the employee are no longer required.

Thus it can be seen that s. 20 makes it clear that it is subject to the provisions of s. 26 of the Act. Section 9(1) of the regulations passed pursuant to the Act indicates that when the services of an employee are no longer required because of the discontinuance of a function then the 30 days notice is all that the employer is required to give the employee. This is in effect a condition of the employment of the civil servant by the province of New Brunswick. By that condition of employment the employees need not be given anything more than 30 days notice.

It seems unduly harsh that a loyal, able and dedicated civil servant of many years standing can be dismissed with but 30 days notice. The consequences of such short notice for a long serving employee whether police sergeant or deputy minister could well be distressing to say the least.

The inequity is compounded by the provision that a collective bargaining agreement cannot by its terms vary the 30 days notice requirement. Yet this is valid legislation. There is no Charter right to reasonable notice of termination of employment. Indeed at common law servants of the Crown held office at pleasure with the result that they could be terminated without notice. It follows that the appellants were not entitled to more than 30 days notice.

Despite the harshness of the statutory provision it should be observed that the appellants were treated with fairness. They were aware that their jobs would disappear some months before they received the formal 30 days notice of termination. They were offered and accepted jobs as corrections officers and received $5,000 over and above their pay as corrections officers.