Law Times

LaW TIMeS • OCTOBeR 26, 2015 Page 7 www.lawtimesnews.com COMMENT New government a chance to fix long-troubled judicial selection process hroughout the recent federal election campaign and early in his victory speech, Justin Trudeau invoked Sir Wilfrid Laurier and his "sunny ways" as he con- trasted his own open and optimistic approach with that of the Conservative leader. Of course, he's well to seek to channel Laurier, our only prime min- ister to win four successive elections between 1896 and 1908 before losing on his fifth try in 1911. It's not Laurier's political feats I wish to examine today but rather his approach to judicial appointments. Are there les- sons Trudeau might take from his idol's record? While Trudeau enters power with a bench filled with nine years of Harper appointments and a Supreme Court with only two judges not named by him, Lau- rier's challenge was even greater. In 1896, the Liberals had been in power for only five years in the three decades since Con- federation, leaving most of the Canadian bench filled with Conservative appoin- tees. Sir John A. Macdonald was under strong pressure to reward only supporters, one of whom admonished Laurier that "if we go out of our own party to bestow the prizes in our gift, we are simply courting a repetition of the disaster which befell our party [in 1878] because of [prime minister Alexander] Mackenzie's neglect to recog- nize the just claims of its members." There were some 256 vacancies in s. 96 courts during the Laurier years, 105 in the county courts, and 151 in all courts above that level. At the trial level, especially in county court appointments, patronage seemed to be the overriding consideration. But at the appellate level and when it came to naming chief justices, Laurier's practice diverged quite a bit from his predecessor's. He was will- ing to promote sitting judges, usually the most senior one on a given court, even though they were almost invariably Macdonald appointees when he could have para- chuted in loyal supporters directly from the bar or politics. Sometimes he did the latter, most no- tably in the case of his justice minister, Charles Fitzpatrick, whom he named chief justice of Canada in 1906. But in a significant number of cases, Laurier was willing to promote a sitting judge appointed by the Conservatives. That weakening of the grip of patronage was a significant step at the time and one the new government should emulate at all levels of the court hierarchy. Religion and ethnicity were also important factors in the calculus of ap- pointment. Laurier named the first French-Canadian chief justice of Can- ada, Sir Henri-Elzéar Taschereau, in 1902. There wouldn't be another until Thibaudeau Rinfret's appointment in 1944. Trudeau will likely fol- low the convention, begun with Rinfret's elevation, of rotating the chief justiceship between anglophone and the Quebec judges. Thus, it's likely that the succes- sor to Chief Justice Beverley McLachlin will come from among the Quebec judges. Laurier also achieved an equal balance of Catholics and Protestants on the Su- preme Court with the ap- pointment of T.W. Anglin in 1909 (the court had only six members at the time). But he achieved that balance at the ex- pense of ethnicity: two of the Catholics were of Irish background and only one was French-Canadian, leaving the Su- preme Court with only one French-Ca- nadian judge until 1918. Laurier didn't promote a prominent Acadian judge to be chief justice of New Brunswick. In Ontario, Laurier increased Catholic rep- resentation by only one on the superior courts and appointed no francophones above the level of the county court. His record on that front was rather timid but he was ever conscious of the possibility of an anglophone backlash. Trudeau will be facing a similar cal- culus with gender, visible minority and aboriginal status, and possibly disability rather than religion as prominent factors. While the Conservative government's percentage of female appointments re- covered toward the end of his time in office after an initial decline, the num- bers of successful visible minority and aboriginal candidates remained dismal. Expect a Trudeau government to take the diversity of the Canadian bench seri- ously. The biggest challenge won't be in English Canada, as in Laurier's day, but in Quebec where visible minority judges are virtually non-existent. Everywhere in Canada, there will be calls for more aboriginal lawyers to join the bench. But the biggest issue facing the new government on the judicial front is re- placing the broken judicial selection process. If not via a full-f ledged royal commission, some kind of arm's-length process seems to be necessary to advise the government on the creation of a more transparent and legitimate way of naming s. 96 judges. With the Charter of Rights and Freedoms now in its fourth decade, the courts have more power to alter Canadian life than many parlia- mentary committees. Judgeships should no longer be prizes in the gift of the gov- ernment. But it will take more than Lau- rier's sunny ways to illuminate the way toward that much-needed reform. LT Philip Girard is a legal historian and professor at Osgoode Hall Law School. He's also associate editor at the Osgoode Society for Canadian Legal History. His e-mail ad- dress is pgirard@osgoode.yorku.ca. Carpenter a reminder about the perils of termination provisions hile we often see employ- ment contracts that con- tain termination provi- sions that purport to limit employees' entitlements upon dismissal to the statutory minimums mandated by the Employment Standards Act, the lan- guage used to achieve that objective is of- ten susceptible to legal interpretation. A case in point is Carpenter v. Brains II Canada Inc., in which Justice David Stin- son considered whether a termination clause that exempted the employer from paying anything other than salary was an attempt to contract out of the Employ- ment Standards Act. Patricia Carpenter, the plaintiff in Car- penter, had worked for NexInnovations Inc. from September 1996 to October 2007. In 2007, NexInnovations was the subject of creditor protection proceedings under the Companies' Creditors Arrangement Act. As a result, various parts of its business went to separate purchasers. The defen- dant, Brains II Canada, purchased some of NexInnovations' assets. Following the ac- quisition, Carpenter continued to work for the company until July 2014. She served in a similar capacity at the same location and earned the same salary. In May 2014, Car- penter learned the company was terminat- ing her employment without cause as of July 23, 2014, and received eight weeks' working notice. At the end of her working notice, she also received 17.9 weeks of severance pay. Displeased, the 54-year-old Carpenter brought a summary judgment motion seeking common law wrongful dismissal damages. Brains II Canada defended, ar- guing that her signed employment con- tract had eliminated her right to do so. Predictably, Carpenter retorted that the termination provision was unenforceable because it offended the statutory prohi- bition found in s. 5(1) of the act against contracting out of that statute. The termination clause limited Carpenter's entitle- ments at dismissal to "salary in lieu of notice. . . . This includes all your entitlements to both termination pay and severance pay . . . as well any outstanding vacation or statutory holiday pay. . . . You will not be entitled to any other compensation." Carpenter argued the termi- nation clause was unenforceable because it exempted the compa- ny from paying anything other than salary without mentioning or obliging it to pay either the non-salary components of her remuneration package or continue her benefits during the notice period. Stinson agreed that the termination clause provided Carpenter with less than her minimum entitlements under the act. Relying on the Divisional Court's judg- ment in Miller v. A.B.M. Canada Inc., he ex- plained that Carpenter's employment con- tract discussed remuneration and benefits separately from her salary. However, the ter- mination provision referenced only her en- titlement to salary in lieu of notice without any mention of paying benefits should the employer not provide notice of dismissal, a scenario contemplated by s. 61(1) of the act. As such, it amounted to a waiver of Carpen- ter's rights under paragraph 61(1)(b) of the act that requires employers to continue all benefits during the statutory notice period. Curiously, the court observed that Car- penter was "given eight weeks notice, during which time (presumably) her benefits con- tinued." Therefore, Brains II Canada tech- nically did comply with all of its statutory obligations during the notice period. How- ever, that's not a legal test. In Wright v. The Young and Rubicam Group of Companies (Wunderman) and subsequently in Stevens and Sifton Properties Ltd., the court made it clear that the key issue isn't whether the employer acted in compliance with the act but whether the language of the termination provision complies with it. I pause to caution that there's currently conf licting ju- risprudence regarding whether a termination provision must meet statutory minimums at all times or at the time of termina- tion only (see, for example, Ford v. Keegan). In considering Carpenter's common law entitlements, Stinson had to decide what was the correct measure of her length of service given Brains II Canada's acquisition of NexInnovations' assets and continuation of her employment. Carpenter argued it should start from September 1996 because Brains II Canada purportedly ac- quired NexInnovations as a going concern and, therefore, became a successor employer under the act. In response, Brains II Canada argued that her common law entitlement should follow the premise that she became its employee in October 2007. In this debate, Stinson sided with the employer. He explained that despite the fact that Carpenter had continued to perform much of the same functions in the same sur- roundings as she previously had, the compa- ny had acquired only "some of the assets" of NexInnovations and had hired "only some of the former employees." Consequently, the company couldn't have continued to operate as NexInnovations had. Moreover, the evidence revealed that Carpenter's em- ployment with Brains II Canada consisted of the following steps: the insolvency of NexInnovations; the subsequent termina- tion of her employment by that company; her hiring on a temporary basis by a chief restructuring officer appointed under the restructuring proceeding; the termination of that temporary employment; and, signifi- cantly, that Brains II Canada had informed her that it wouldn't be honouring any prior severance entitlements save for the purposes of calculating her entitlements under the act. Consequently, Stinson awarded Carpen- ter damages for wrongful dismissal based on eight months' reasonable notice. In light of her previous salary of $45,000, the quan- tum of damages fell within the monetary ju- risdiction of the Small Claims Court, which could have eliminated her right to recover costs. Stinson, however, refused to exercise his discretion not to award costs. Having noted that the matter raised complex ques- tions of law, he awarded $9,000 in costs. Carpenter serves as a reminder that while termination provisions act as a valuable tool permitting employers to exercise control over employees' entitlements upon dismiss- al, the case law makes it clear that they often involve uncertainty and, as such, require le- gal precision and foresight. The court would interpret a reference to the word "salary" within a termination provision as denot- ing an employee's base salary only. Failure to specify the employee's entitlements to benefits and other non-salary components could render the termination provision un- enforceable, thereby exposing employers to the golden smelter of common law. Perhaps, the time is ripe for employers to take a closer look at their existing employ- ment contracts to make sure that the termi- nation provisions comply with the technical legal requirements and continue to meet their corporate objectives. LT Nikolay Chsherbinin is an employment lawyer at Chsherbinin Litigation and author of The Law of Inducement in Canadian Employment Law published by Carswell, a Thomson Reuters Business. He's available at 416-907-2587, nc@nclaw.ca or nclaw.ca. T That's History Philip Girard W Labour Pains Nikolay Chsherbinin

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