A-685-79
P. R. Andrews (Appellant)
v.
G. Gail Brent, Public Service Staff Relations
Board and Attorney General of Canada (Respond-
ents)
Court of Appeal, Thurlow C.J., Urie and Ryan
JJ.—Ottawa, May 16 and 28, 1980.
Public Service — Labour relations — Appeal from Trial
Division decision granting prohibition to prevent Adjudicator
from hearing matter — Appellant involved in an accident
resulting in damages to a Crown vehicle — Investigation
determined that appellant's negligence was sole cause of acci
dent, and a portion of damages was demanded from appellant
pursuant to statute — Treasury Board recommended set-off
against appellant's salary, whereupon appellant filed a griev
ance without success, and then referred matter to adjudication
— Adjudicator found that she had jurisdiction, but Trial
Judge held that she did not — Whether employer's action to
recover portion of loss was disciplinary action resulting in a
financial penalty within the meaning of s. 91(1)(b) of the
Public Service Staff Relations Act — Public Service Staff
Relations Act, R.S.C. 1970, c. P-35, ss. 90, 91(1)(b) — Finan
cial Administration Act, R.S.C. 1970, c. F-10, ss. 6, 95(1) —
National Defence Claims Order, 1970, SOR/70-427, ss. 11, 12,
13, 15, 16(3), 17(1)(b),(2) — Federal Court Act, R.S.C. 1970
(2nd Supp.), c. 10, s. 18.
A motor vehicle owned by the Crown and operated by
appellant in the course of employment was involved in an
accident resulting in damage to the vehicle. Following the
accident, an investigation conducted in the absence of appel
lant, determined that appellant's negligence constituted sole
cause of accident. Appellant was served with a demand for
reimbursement and to show cause why the amount claimed
should not be deducted from his salary pursuant to the Nation
al Defence Claims Order, 1970. Upon appellant's refusal to
make the restitution, the Deputy Attorney General found that
appellant was indebted to the Crown within the meaning of
subsection 95(1) of the Financial Administration Act, and
Treasury Board recommended that the amount owing be set off
against appellant's salary. Appellant thereafter presented a
grievance without success, and then referred the grievance to
adjudication. The Adjudicator held that the action complained
of fell within section 91 of the Public Service Staff Relations
Act, and that she had jurisdiction to hear the matter. The Trial
Judge found that the Adjudicator did not have jurisdiction, and
granted a writ of prohibition prohibiting her from considering
the matter. The question is whether the action complained of
resulted in a financial penalty.
Held, the appeal is dismissed. The case is one in which the
Crown has invoked a statutory administrative procedure for the
assertion of a civil claim for an amount for which Crown
officials consider that an employee, as a result of his negli
gence, has become liable to the Crown at law and for recovery
of such claim by deduction from the employee's pay. Such an
amount when ascertained in accordance with the procedure, is
not a penalty. It is not a punishment. It is simply an amount
which the Crown claims is owing. The appellant's ultimate
liability for the amount is still in contention. It will be deter
mined only when it has been determined by a Court of com
petent jurisdiction either in an action brought by the Crown to
recover its loss or in an action by appellant to recover his pay.
Such action does not result in a financial penalty or in a penalty
of any sort. Counsel for the appellant stressed the nature and
purpose of the statute and invited the Court to interpret it
broadly so as to afford the appellant the right to have the
disputed subject matter heard by the Adjudicator. The kind of
case that falls under paragraph 91(1)(b) is one of punitive
action in respect of infractions of the rules governing the work
of the employee. In enacting section 91 Parliament has not
committed the decision of disputes as to such liabilities to
adjudicators under the Act but has left them for determination
by the regular courts of law having jurisdiction in such matters.
United Electrical, Radio & Machine Workers, Local 524,
re Canadian General Electric Co., Ltd. 5 Lab. Arb. Cas.
1939, referred to. Attorney General of Canada v. Grégoire
[1978] 2 F.C. 11, referred to.
APPEAL.
COUNSEL:
M. W. Wright, Q.C. for appellant.
B. R. Evernden for respondents.
SOLICITORS:
Soloway, Wright, Houston, Greenberg,
O'Grady, Morin, Ottawa, for appellant.
Deputy Attorney General of Canada for
respondents.
The following are the reasons for judgment
rendered in English by
THURLOW C.J.: The issue in this appeal is
whether the action taken on behalf of the Crown
to recover a portion of a loss sustained by reason of
the appellant's negligence in the performance of
duties of his employment as a servant of the
Crown was "disciplinary action resulting in ... a
financial penalty" within the meaning of para
graph 91(1)(b) of the Public Service Staff Rela-
tions Act, R.S.C. 1970, c. P-35. ' If so, it was open
to the appellant to refer his grievance in respect of
such action to adjudication. 2 The Adjudicator held
that the action was disciplinary action resulting in
a financial penalty and upheld her jurisdiction but
on an application under section 18 of the Federal
Court Act, R.S.C. 1970 (2nd Supp.), c. 10 the
Trial Division held otherwise and granted
prohibition. 3 The present proceeding is an appeal
from that judgment.
The action in question taken by the employer
arose out of an incident in which a motor vehicle
owned by the Crown and operated by the appel
lant, in the course of his employment in the
Department of National Defence, was involved in
an accident resulting in damage to the vehicle
estimated at $1,357.29.
At the material time there was in effect a
National Defence Claims Order, 1970, 4 made by
the Treasury Board under section 6 of the Finan
cial Administration Act, R.S.C. 1970, c. F-10.
The Order provided a procedure for dealing
administratively with claims for damages against
the Crown and claims by the Crown against offi
cers and men of the armed services and against
public servants employed in the Department of
National Defence both when such claims arose
outside and when they arose within their employ
ment. In the case of claims by the Crown the
procedure leads to a demand for reimbursement of
the whole or some portion of the loss sustained.
The order included the following:
1 91. (1) Where an employee has presented a grievance up to
and including the final level in the grievance process with
respect to
(a) the interpretation or application in respect of him of a
provision of a collective agreement or an arbitral award, or
(b) disciplinary action resulting in discharge, suspension or a
financial penalty,
and his grievance has not been dealt with to his satisfaction, he
may refer the grievance to adjudication.
2 A contention raised in the appellant's memorandum that
the Adjudicator had jurisdiction under paragraph 91(1)(a) was
abandoned at the hearing.
3 [1980] 1 F.C. 833.
4 SOR/70-427.
CLAIMS AGAINST PUBLIC SERVANTS AND OFFICERS AND MEN
WITHIN EMPLOYMENT
15. Where an opinion is given by an authority referred to in
section 12 that
(a) the Crown has a claim against a public servant or an
officer or man resulting from
(i) the death of or injury to a public servant or an officer
or man, or
(ii) in the case of a public servant, the loss of or damage to
public property under the control or administration of the
Department,
(b) the claim arose by reason of an incident involving negli
gence on the part of the public servant or the officer or man
while acting within the scope of his duties or employment,
and
(c) his negligence was not of a minor character,
a demand for payment shall be made and enforced on the
public servant or the officer or man in the same manner, the
same ratio and to the same extent, having regard to the amount
involved, as a demand for reimbursement under Part V.
With respect to the opinion and demand referred
to, sections 11, 12 and 13 provided:
Opinion
11. An opinion shall be obtained in respect of any claim by
the Crown referred to in subsection 10(2), as to
(a) whether there is a legal claim by the Crown;
(b) whether the Crown is legally entitled to recover the full
amount of damages suffered by it; and
(c) where the opinion obtained in respect of paragraph (b) is
in the negative, the amount of damages to which the Crown
is legally entitled, having regard to the amount claimed and
the apportionment of fault, if any, on the part of any person
who may have been involved.
Authority to Give Opinion
12. An opinion referred to in section 11 shall be given
(a) by a local authority
(i) where the amount of damages involved does not exceed
one thousand dollars, or
(ii) where more than one claim arises out of the same
incident and the amount of damages involved does not
exceed two thousand dollars;
(b) by the Judge Advocate General,
(i) where the amount of damages involved does not exceed
five thousand dollars, or
(ii) where more than one claim arises out of the same
incident and the amount of damages involved does not
exceed eight thousand dollars; or
(c) by the Deputy Attorney General of Canada, where the
amount of damages involved exceeds the limits set out in
paragraph (b).
Demand for Payment
13. (1) Where an opinion is given that the Crown has a legal
claim, a demand for payment shall be made by the Department
in an amount that is not less than the amount to which the
Crown is legally entitled.
(2) Where a payment referred to in subsection (1) is not
made within a reasonable time, the matter shall be referred for
further action to the Judge Advocate General, or the Deputy
Attorney General of Canada, whichever is appropriate.
Under Part V the provision for reimbursement
in the case of damage exceeding $500 arising from
negligence by a public servant in the operation of a
motor vehicle was $125 or one-fifth of the amount
involved whichever was greater but not exceeding
$250. Subsection 16(2) then provided that the
Treasury Board might prescribe in a particular
case that either a reduced amount or no amount be
demanded. Subsection 16(3) provided:
16....
(3) A demand for reimbursement under this section shall be
made and enforced as follows:
(a) a written demand shall be sent to the public servant or
the officer or man by the appropriate administrative author
ity, including, if applicable a statement of the reasons why
his negligence is considered not to be of a minor character;
(b) where a public servant fails to arrange for payment
within thirty days, the matter shall, unless otherwise ordered
by the Minister, be referred to the Deputy Attorney General
of Canada for advice as to what steps should be taken to
enforce payment;
(c) where the demand is made on an officer or man, the
demand shall require him to show cause, within seven days
after he receives it, why his pay account should not be
subject to a deduction in the amount of the demand;
In Part VI section 17 provided:
17. (1) Where circumstances arise resulting in
(b) loss of or damage to public property under the control or
administration of the Department,
the officer in command or in charge of the unit or defence
establishment concerned shall cause an immediate investigation
to be made.
(2) An investigation referred to in subsection (1) shall be
made in such manner as the Judge Advocate General may, by
general or specific instructions, direct and may be conducted
conjointly with any investigation required by regulations made
under the National Defence Act.
It is common ground that following the accident
a formal investigation, at which the appellant was
not present or called upon to give evidence, was
conducted by the office of the Director of Law
Claims in the Judge Advocate General's office
culminating in the report of Lieutenant-Colonel
Murphy, Director of Law Claims, who concluded
that the conduct of the appellant in the operation
of the vehicle amounted to "negligence not of a
minor character" and that such negligence con
stituted the sole cause of the accident. As a result
of this opinion, the appellant was served with a
demand for reimbursement in the amount of $250
pursuant to section 16 (supra) allegedly for contri
bution for the damages sustained by Her Majesty
as a result of the accident. The demand also called
upon the appellant to show cause why the amount
claimed should not be deducted from his salary.
The appellant replied to the demand by two
letters in which he challenged the findings con
tained in Lieutenant-Colonel Murphy's report. He
also complained that he had not been a party to
the investigation conducted by the Judge Advocate
General's office and requested that a formal hear
ing be convened to investigate the whole situation.
Notwithstanding the appellant's reply and re
quest the Director of Law Claims confirmed the
findings of the investigation report and requested
the appellant to make voluntary restitution in the
amount of $250. As the appellant did not agree to
make the restitution, a determination was sought
from the Deputy Attorney General as to whether
the appellant was indebted within the meaning of
subsection 95(1) of the Financial Administration
Act in the said amount. In due course the Deputy
Attorney General expressed the opinion that on
the basis of the information submitted to him the
appellant was indebted to the Crown in the
amount of $250 within the meaning of subsection
95(1) of the Financial Administration Act and the
Treasury Board thereupon recommended that the
$250 be set off against the appellant's salary.
The appellant thereafter presented a grievance
under section 90 of the Public Service Staff Rela
tions Act complaining of "the demand for reim
bursement levied against me" and after exhausting
the grievance procedure without success referred
his grievance to adjudication under section 91 of
that Act. As phrased, the grievance makes no
suggestion that the action complained of was "dis-
ciplinary action resulting in ... a financial penal
ty" but in a letter which accompanied the refer
ence to adjudication it is stated that: "The present
grievance relates to discipline."' Notice was there
upon given that the employer would object to the
jurisdiction of the Adjudicator on the ground that
there was no disciplinary action taken against the
appellant by the employer and that the grievance
was not subject to adjudication under section 91 of
the Public Service Staff Relations Act. It was
after holding a hearing in respect of that objection
that the Adjudicator concluded that the action of
the employer fell within the wording of section 91
and that she had jurisdiction.
During the material time there was in existence
a National Defence Code of Employee Discipline
which defined certain offences, including negligent
performance of duty and prescribed limits of pun
ishment therefor including suspension and dis
charge but not pecuniary penalties as such. It is
common ground that in the present instance these
provisions, which were made under the authority
of the Financial Administration Act, were not
invoked against the appellant.
The basis of the learned Adjudicator's decision,
as I read it, is her finding (page 44 of the case)
that the claim for $250 to be deducted from the
salary of the appellant was a disciplinary action
because it was taken in response to some alleged
"voluntary malfeasance" on the part of the appel
lant and that such action resulted in a financial
penalty (the assessment of $250) within the mean
ing of paragraph 91(1)(b) of the Public Service
Staff Relations Act.
The learned Trial Judge however in granting
prohibition held that the action of the employer
was not disciplinary and that such action did not
result in a pecuniary penalty but was merely a
5 No question was raised in the Trial Division or on the
appeal as to whether it was open to the appellant to present the
complaint to the Adjudicator as being one in respect of discipli
nary action.
proceeding to recover a debt owed by the
appellant.
In my view, the simplest approach to the ques
tion is to determine first whether the action com
plained of resulted in "a financial penalty". The
expression "disciplinary action resulting in ... a
financial penalty" is plainly narrower than simply
"action resulting in a financial penalty" and if the
answer to the question posed is negative that is the
end of the matter. I place no importance on the
fact that procedure under the National Defence
Code of Employee Discipline was not initiated or
invoked. Had it been invoked and had it resulted in
suspension or discharge or some lesser punishment
plainly there would be a case of disciplinary
action. But I would also look upon it as discipli
nary action if what was imposed after the inquiry
made in this instance had been a suspension or
discharge, however inappropriate such an award as
a result of such a procedure might have been.
However, nothing like that has occurred in the
present instance. As I see it, the case is one in
which the Crown has invoked a statutory adminis
trative procedure for the assertion of a civil claim
for an amount for which Crown officials consider
that an employee, as a result of his negligence, has
become liable to the Crown at law and for recov
ery of such claim by deduction from the
employee's pay. Such an amount when ascertained
in accordance with the procedure, in my opinion, is
not a penalty. It is in no relevant sense a punish
ment. It simply is an amount which the Crown
claims is owing and which the Crown is about to
recover by deduction from the employee's pay in
accordance with statutory regulations which must
be regarded as forming part of the conditions on
which the employee has been employed. From the
point of view of the Crown it is a summary way of
recovering what the Crown claims the employee is
liable to pay but no more summary than what any
employee might expect from an employer whose
property has been damaged and who has been
informed to his own satisfaction that the employee
has caused the damage by negligence in the
performance of his duties. Here what has occurred
is that the employee has been given notice of the
claim, of the reasons therefor and the amount
claimed, and he has been called upon to show
cause in writing why the amount should not be
deducted from his pay. He was further warned
that failing a satisfactory answer steps would be
taken to deduct the amount from his pay. The
appellant replied challenging the procedure fol
lowed but therein raised nothing that would show
that he was not responsible for the Crown's loss.
The matter was then referred to the Deputy Attor
ney General for an opinion and subsequently
deduction of the amount from the appellant's pay
was authorized by the Treasury Board. Nothing in
this procedure, as I see it, determines the appel
lant's ultimate liability for the amount. It is still in
contention. And it will still be in contention if and
when the amount is deducted. The appellant's
liability to pay the amount will be determined,
assuming there is never any agreement on it, only
when it has been determined by a Court of com
petent jurisdiction either in an action brought by
the Crown to recover its loss or in an action by the
appellant to recover his pay. In my view, such
action does not result in a financial penalty or in a
penalty of any sort.
The distinction between action of this kind and
the imposition of a financial penalty was recog
nized in United Electrical, Radio & Machine
Workers, Local 524, re Canadian General Electric
Co., Ltd. 6 , where Bora Laskin, the Chairman (as
he then was) said:
It is important to recognize the difference between discipline
involving a sanction which does not represent compensation or
recoupment for loss suffered by the Company, and compensato
ry measures that are designed to offset a loss caused by an
employee. In the latter category are decisions of some Boards of
Arbitration that have upheld an employer's right to require
piece-workers to repair their careless work on their own time.
An employee's defaults in connection with his work may, of
course, offer an employer the choice of imposing discipline in a
non-compensatory sense or requiring the employee to redeem
the situation by money damages or reparation. Whether an
employer can discipline in a punitive sense and also seek
compensation is a question that this Board does not find it
necessary to answer in this case.
6 5 Lab. Arb. Cas. 1939, at page 1942.
The distinction also appears to be implicit in the
reasoning of this Court in Attorney General of
Canada v. Grégoire 7 where Jackett C.J. said:
One thing is clear. -There is no question of the respondent
having failed to account for money or other securities that
came into his possession. Furthermore, it does not appear that
the levy made on the respondent was based on a claim for
alleged negligence in the performance of his duties. Indeed, the
facts as found by the Adjudicator would seem to make it
unlikely that there could be any such claim.
Counsel for the appellant stressed the nature
and purpose of the statute and invited the Court to
interpret it broadly so as to afford the appellant
the right to have the disputed subject matter heard
by the Adjudicator. In a doubtful case that
approach or attitude might conceivably lead to a
result favourable to a grievor but I do not think
that even the desirability (if it is desirable) of a
minor dispute such as this being dealt with by an
Adjudicator rather than by procedure in a court of
competent jurisdiction can be permitted to expand
what appear from the wording to be the limits of a
grievor's right to refer a dispute to adjudication
and of the Adjudicator's jurisdiction to deal with
the grievance.
The limits of the right of the employee to refer
to adjudication are confined to complaints
respecting:
(a) the interpretation or application in respect of
him of a provision of a collective agreement or
an arbitral award; and
(b) the disciplining of employees for infractions
of the rules of their employment where such
disciplinary action results in discharge, suspen
sion or a financial penalty.
In cases that fall under (a), what is involved will
be the grievor's rights under the collective agree
ment or arbitral award. Consistently with the
objects of the statute as a whole, disputes as to
such rights are apt subject matter for the special
tribunals provided for by the Act for the resolution
of disputes arising on collective agreements and
arbitral awards.
The kind of case that falls under (b), in my
opinion is one of punitive action in respect of
infractions of the rules governing the work of the
7 [1978] 2 F.C. 11, at page 12.
employee. Such a case is also apt subject matter
for the special tribunals.
Both classes of subject matter are broad in their
scope. But broad as they are they do not appear to
me to embrace or to be intended to embrace
disputes as to a liability of an employee to the
Crown alleged to have been incurred by the
employee as a result of his actions either in the
course of his employment or outside the course of
such employment. It appears to me that in enact
ing section 91 Parliament has not committed the
decision of disputes as to such liabilities to
adjudicators under the Act but has left them for
determination by the regular courts of law having
jurisdiction in such matters. The present, in my
view, is such a case.
I would dismiss the appeal with costs.
* * *
URIE J.: I concur.
* * *
RYAN J.: I concur.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.