J. 2002 SKQB 508 Q.B. A.D. 2002 No. 1264 J.C. S. IN THE QUEEN'S BENCH JUDICIAL CENTRE OF SASKATOON BETWEEN: FOUR STAR MANAGEMENT LTD. o/a TREATS AT THE UNIVERSITY OF SASKATCHEWAN and CANADIAN UNION OF PUBLIC EMPLOYEES LOCAL 1975 and THE SASKATCHEWAN LABOUR RELATIONS BOARD RESPONDENT L.F. Seiferling, Q.C. for the applicant A.R. Engel for the respondent, CUPE W.R. Pelton, Q.C. for the respondent Board JUDGMENT KYLE J. December 12, 2002 [1] This is a motion for judicial review of the decision of the Saskatchewan Labour Relations Board ("the Board"). The Board awarded a wage increase to employees of Four Star Management Ltd., operators of certain food services at the University of Saskatchewan, Saskatoon. The wage increase was part of first collective bargaining agreement concluded by the Board after the normal bargaining between the parties had failed. The governing legislative provision is s. 26.5 of The Trade Union Act, R.S.S. 1978, c. T-17 ("the Act"). Under that provision the Board determined it would conduct hearing to conclude all the outstanding terms of the first contract. It required the employer to list the issues in dispute and after those issues were defined the hearing took place. Wage issues were before the Board. The employer had advised the Board that it was not "prepared to make the agreement retroactive". [2] Following the decision of the Board which concluded contract with wage increase which the employer says would increase the wage costs by 31 percent, the employer refused to sign contract or to implement it and sought clarification of the retroactivity of the wage rates. The Board ruled on that point favouring the union and making the wage increases fully retroactive as regards the employees in service at the time of the Board order, and also in respect of those who had left the employ of the employer during the two year term of the contract prior to the Board's order. As the employees were university students whose term was normally rather brief, this latter concern was of more than usual importance. [3] By its notice of motion the employer seeks an order setting aside the orders of the Board upon the grounds that their decisions are patently unreasonable in that the employer could not afford the wage increases and further because retroactivity would not have been a feature of a replicated contract. The motion claimed that the Board denied the parties natural justice and procedural fairness in respect of the wage retroactivity to employees who had left the employ before the contract was concluded by order of the Board. [4] Appellate courts are unanimous in instructing the reviewing courts to show deference to the expertise of the Board because of its experience in the field, an experience which probably exceeds that of the reviewing judge. That said, if the reviewing court is to have any function at all it must be able to assess the decision by some standard. If it finds the decision unreasonable, then it considers whether that level of error reaches the patently unreasonable level. [5] In this case the Board undertook to replicate first collective bargaining agreement which the parties might have reached had bargaining succeeded. It was required by statute to do so within 45 days. The Board concluded the contract in 14 months, not 45 days. By the time it released its decision the two year term of the contract which it concluded had only three and one-half months to go. [6] Faced with an employer which had lost money consistently in all but one of the years of its operation, an employer which had not paid its owners/operators any salaries for the long hours which they put in, it imposed salary increase which, with attendant "perks", required 31 percent raise in the labour costs of the failing business. Upon further application by the union it ordered that the salary increase would be retroactive for the full two year period and would apply to all of the many student employees who had come and gone during the two year period. [7] In so doing it purported to replicate the contract which the parties would have reached had the collective bargaining process succeeded. It noted that the employer had consistently refused to increase wages because of its precarious financial situation and then proceeded to impose an increase which the employer says it would not have agreed to due to the low bargaining power of the workers. The employer had consistently taken the position that it was prepared to accept strike rather than raise wages above the minimum wage level, which it eventually paid. This preference was specifically rejected by the Board in favour of imposing what it described as "quite modest increase". [8] It is true that in seeking to replicate the contract which the parties would have made it is necessary to mandate compromise. Where it not so, the replication process would only perpetuate the intransigence which brought the matter to deadlock. Once it undertakes to mandate compromise, it is almost certain that one of the parties will see the result as unreasonable. In this case the employer sees it that way and as the above comments may imply, so do I. The issue then becomes was it patently unreasonable. [9] To be patently unreasonable it must be "clearly irrational" (Federal Court of Appeal) "outrageous, absurd, ridiculous, so beyond the bounds of reason as to amount to a 'fraud on the law or deliberate refusal to comply with it'" (Cameron J.A., Saskatchewan Court of Appeal). The Supreme Court of Canada in Southam Inc. et al. v. Director of Investigation and Research, 1997 CanLII 385 (SCC), [1997] S.C.R. 748 held per Iacobucci J. "The difference between 'unreasonable' and 'patently unreasonable' lies in the immediacy or obviousness of the defect if the defect is apparent on the face of the tribunal's reasons then the tribunal's decision is patently unreasonable but if it takes some significant searching or testing to find the defect, then the decision is unreasonable but not patently unreasonable". [10] I do not think that the errors made here have been so severe or so obvious as to meet the standard of patently unreasonable as defined by the courts and, accordingly, I find that the motion fails on that point. [11] The question of whether the Board breached natural justice and procedural fairness by awarding retroactive wages depends on whether the issue of retroactivity was one of the points of dispute between the parties. Had the Board complied with the 45 day limit, the retroactivity issue would have been much less important than it later became. The employer had mentioned retroactivity as an issue in letter to the Board prior to the hearing and, of course, retroactivity was quite unimportant had the employer's refusal to increase wages prevailed. I find, therefore, that to set aside the entire process because the retroactivity issue was not front and centre in the preliminary discussions and arguments would seem to be contrary to curial deference and to reason. Had the raise in pay not been retroactive it would, in light of the late decision, have been rather meaningless. The decision to allow the graduated employees to receive their back pay is not, I think, of sufficient import to justify a finding of breach of natural justice. [12] This leaves for the consideration of the court whether the disregard for the 45 day period designated by the legislation deprives the Board of its jurisdiction. It is argued that the right to conclude first contract was limited to the 45 days and that the right of the Board to do so ended with the 45 day period. [13] Among the authorities cited by the Union were Bernauer v. Royal Bank of Canada, [1994] S.J. No. 154 QL (Sask. Q.B.) and Regina (City) v. Newell Smelski Ltd. (1996), 1996 CanLII 5084 (SK CA), 152 Sask. R. 44 (Sask. C.A.). In the Bernauer case, Walker J., in the course of an exhaustive review of the law, stated: 10 Consideration must be given to the entire statute, its nature, its object and the consequence which would result from construing the part in question as imperative or directory. The language of statute, however imperative in form, may be deemed directory whenever legislative purpose can best be carried out by so doing and the legislative intent does not, without more, require an imperative construction. Whether statute is imperative or directory depends on whether the thing directed to be done is of the essence of the thing required or is mere matter of form as, for example, where the directions of statute are given merely with view to the proper, ordinary and prompt conduct of business or where the provision is designed to secure order, system and despatch in proceedings. 11 As general rule, statutes relating to remedies and procedure are liberally construed with view to the effective administration of justice. However, statutes which take away, change, or diminish fundamental rights or statutory remedies for rights unknown to the common law, and statutes which provide new and extraordinary remedies must be construed strictly, both as to the cases embraced within their terms and as to the methods to be pursued. But the doctrine that statute creating rights which were unknown at common law or equity is to be strictly construed is meant to preserve the substantial rights of those against whom the remedy offered by the statute is directed and not otherwise. It was never meant to be applied as pitfall to the unwary, in good faith pursuing the path marked by the statute, or as point from which an adversary can overwhelm him for an immaterial misstep. [14] In the second case cited above, the Saskatchewan Court of Appeal on timeliness issue, stated: [36] But not every failure to observe statutory requirements of procedural nature carries with it such effects. If the legislature does not expressly provide for the effect of imperfect compliance or non-compliance with requirement of this nature, the matter becomes one of implication, having regard for the subject matter of the enactment; the purposes of the requirement; the prejudice caused by the failure; the potential consequences of finding of nullity; and so on. [37] There is great deal of authority for this. By way of example, involving imperfect compliance with time requirement, we might refer to Secretary of State v. Langridge, [1991] All E.R. 591 (C.A.) at p. 595. There Balcombe L.J. drew upon de Smith's Judicial Review of Administrative Action (4th ed., 1980), at pages 142-143, in addressing the principles at work: When Parliament prescribes the manner or form in which duty is to be performed or power exercised, it seldom lays down what will be the legal consequences of failure to observe its prescriptions. The court must therefore formulate their own criteria for determining whether the procedural rules are to be regarded as mandatory, in which case disobedience will render void or voidable what has been done, or as directory, in which case disobedience will be treated as an irregularity not affecting the validity of what has been done (though in some cases it has been said that there must be "substantial compliance" with the statutory provisions if the deviation is to be excused as mere irregularity). Judges have often stressed the impracticability of specifying exact rules for the assignment of procedural provision to the appropriate category. The whole scope and purpose of the enactment must be considered, and one must stress "the importance of the provision that has been disregarded, and the relation of that provision to the general object intended to be secured by the Act". In assessing the importance of the provision, particular regard may be had to its significance as protection of individual rights, the relative value that is normally attached to the rights that may be adversely affected by the decision, and the importance of the procedural requirement in the overall administrative scheme established by the statute. Furthermore, much may depend upon the particular circumstances of the case in hand. Although "nullification is the natural and usual consequence of disobedience," breach of procedural or formal rules is likely to be treated as mere irregularity if the departure from the terms of the Act is of trivial nature, or if no substantial prejudice has been suffered by those for whose benefit the requirements were introduced, or if serious public inconvenience would be caused by holding them to be mandatory, or if the court is for any reason disinclined to interfere with the act or decision that is impugned. [15] It will appear to reader of precedents in this area that courts are reluctant to enforce time limits and will, as rule, find that legislatures do not intend time limit to be used as final determinant of rights. However, the comments from de Smith to the effect that there must be "substantial compliance" with the statutory provisions if the deviation is to be excused as mere irregularity, must be considered here, where 45 day limit has been exceeded by ten-fold extension with the effect that the two year contract imposed was almost over by the time it was concluded. [16] The test of "substantial compliance" would, assume, involve consideration of the purpose of the time limit and the probability of prejudice which might arise from failure to comply. In the present case the employer is merchant. His products are presumably priced in such way as to reflect in part the labour costs involved in delivering them to the public. The importance of a wage increase, retroactive and rather substantial if viewed as a percentage, would seem to be prejudicial. [17] As noted by Walker J., supra, the mandatory directory decision is to be based in part on public duties as compared to private rights. Those conferring private rights are, in general, imperative. In this case, the rights affected are private rights and so the scales tip in favour of the imperative. am not prepared to hold that minor deviation from the 45 day limit would deprive the Board of its jurisdiction especially, as here, where the employer was not overly concerned with the time issue at the initial stage. However, to have delayed the conclusion of the contract from June of 2000 until September 18, 2001, contract which was to expire on December 31, 2001, would seem excessive. Walker J. noted that an imperative enactment must be obeyed or fulfilled exactly while directory enactment must be obeyed or fulfilled substantially. Even accepting that the 45 day limit is directory, the Board's actions fall well short of substantial compliance. [18] The Board, in its decision of April 24, 2002, seemed to be unaware or dismissive of its obligation under the Act to conclude the contract within 45 days. While it had chastised the employer for its failure to file list of issues as required by that section, it held [17] Just as there is no magic or design in how long it may take parties to forge an agreement through collective bargaining, ratify and actually sign that agreement, there is no magic in the date that an application to the Board will be heard and decision issued. It is dependent on number of contingencies including general application of first-in-first-out rule to the hearing of applications, availability of the parties, their counsel and of panel members, Board administrative and clerical resources, previous commitments, and intervening priorities, to name few. It would be unsound to base entitlement to retroactive benefits on the serendipitous signing of collective agreement or the signing of Board decision imposing one. [19] note, however, that at no time was the "over 45 days" issue raised in the proceedings before the Board, as has been noted by the union. The employer sought and obtained an adjournment of the hearing in April of 2000 which effectively made compliance with the 45 day limit impossible. The motion which brought this matter before the court for review does not raise the issue and it only came up in the briefs and in the argument before the court at the hearing of the motion. [20] The two year contract has expired, the business has been sold, and to elevate this issue to the point where a rehearing would be required would seem counter productive. Had it been an issue duly raised and argued before the Board, however, it would not have been easily ignored either by the Board or by this Court on review. [21] Accordingly, the motion is dismissed.
A motion for judicial review of a Labour Relations Board decision awarding a retroactive wage increase to employees. The food services operators, alleging a denial of natural justice and procedural fairness, sought to have the orders set aside on the grounds the decisions were patently unreasonable in that the employer could not afford the wage increases and because retroactivity would not have been a feature of a replicated contract. HELD: The motion was dismissed.  1)In undertaking to replicate a collective bargaining agreement that the parties might have reached, the LRB concluded the contract in 14 months by which time the two year term contract had only three and one-half months to go. The two year contract has now expired and the business has been sold. To elevate this issue to a point where a rehearing would be required would seem counterproductive. 2)The LRB's actions fell well short of substantial compliance with the 45 day limit for review. However at no time was the 'over 45 days' issue raised in the proceedings before the Board. The test of 'substantial compliance' would involve a consideration of the purpose of the 45 day time limit and the probability of prejudice which might arise from a failure to comply. The importance of a retroactive wage increase, which was substantial if viewed as a percentage, would seem prejudicial, even accepting the 45 day limit is directory. The employer sought and obtained an adjournment of the hearing in April which effectively made compliance with the 45 day limit impossible as the employees left once they graduated from their university courses. 3)The errors were not so severe or so obvious as to meet the standard of patently unreasonable as defined by the courts (ie. clearly irrational (Federal Court of Appeal), outrageous, absurd, ridiculous, so beyond the bound of reason as to amount to fraud on the law or deliberate refusal to comply with it (Southam)). 4)The decision to allow employees, who had graduated and left their employment to receive back pay, was not of sufficient import to justify a finding of breach of natural justice. Whether the Board breached natural justice and procedural fairness by awarding retroactive wages depends on whether the issue was one of the points of dispute between the parties. To set aside the entire process because the retroactivity issue was not front and centre in the preliminary discussions would seem contrary to reason and curial deference. Had the raise in pay not been retroactive it would, in light of the late decision, been rather meaningless.