Abdoulrab et al. v. Labour Relations Board (Ont.) et al., 2009 ONCA 491

• Judge: Simmons, Blair and Juriansz, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: January 27, 2009
• Jurisdiction: Ontario
• Citations: 2009 ONCA 491;(2009), 251 O.A.C. 28 (CA)

Abdoulrab v. LRB (2009), 251 O.A.C. 28 (CA)

MLB headnote and full text

Temp. Cite: [2009] O.A.C. TBEd. JN.073

Abdurahman Abdoulrab, Jospehine Andres, Muoi Au, Ha To Banh, Clint Butts, Emerien Charles, Thuc My Chau, Lin Heung Cheng, Mildred Chichioco, Jui Fang Chung, Hoa Xao Dang, Khuven Thi Dang, Thai Quoc Dang, Quy Doan Dang, Kim Anh Dang, Danilo Dapapa, Tu Co Dat, Miguel De Luna, Donette Defreitas, Hue Mai Diec, Ha To Diep, Joanna Dimopoulos, Quand Duc Duong, Dianne Ellis, Michael Estores, Nouri Fayaz, Xiao Ming Feng, Sean Fitzpatrick, Tan Yne Fong, Seng Tsai Fou, Bimbo Frigillana, Zhu Ping Gao, Alberto Gapo, Victor Garcia, Mesfin Gebre, So Sang Giang, Reynaldo Guiyab, Edward Gysai, Mohammed Hakimi, Truyet Hoang, Quang Thuy Hoang, Em Huynh, Hien Huynh, Lye Jan Jew, Harshika Kapadia, Karamjit Kaur, Mai Tue La, Tan Phuoc Lam, Hoa Lao, Thu Van Le, Chu Chen Liang, Ngoc Boi Lieu, Letien Luong, Tien Duong Luu, Hung Phat Ly, Yen Thoai Mac, Emer Millado, Ssarobjen Mistry, Saeed Mohammed, Kin Siu Mooc, Janet Murray, Lai Ha Ng, Lincheung Ng, Bay Duc Ngo, Tu Van Nguyen, Kwame Obeng, Leonardo Pasi, Antonio Pascua, Lanque Phan, Paul Poku, Vasugy Rajakantham, William Ribeiro, Yat Wing Shum, Prematie Singh, Kamal Singh, Debra Slater, Kuan Su, Heng Tac Tan, Mui Tan, Ky Tang, Kim Tran Thai, Nam Van Tan, Duc Tran, Hien Duc Tran, Quang Van Trang, Nu Trinh, Myvan Truong, Arthur Unciano, Errol Venida, Gloria Vieveen, Dinh Lac Vuong, Hao Vuong, Yuk Kay Wong, Tian Sheng Wu, Nagendran Yogendran, Lye Jan Lew, Hoa Gan Tran, Nu Chau Le, Kelly Cook, Edward Gysai, Bay Duc Ngo, Nu Chau Le, Mesfin Gebre (appellants) v. Ontario Labour Relations Board, Novaquest Finishing Inc., Catelectric Inc., 4064186 Ontario Inc. & Ontario (Ministry of Labour - Director of Employment Standards)

(respondents)

(C48942; 2009 ONCA 491)

Indexed As: Abdoulrab et al. v. Labour Relations Board (Ont.) et al.

Ontario Court of Appeal

Simmons, Blair and Juriansz, JJ.A.

June 18, 2009.

Summary:

Lund purchased Catelectric-Dip Corp. (Cat-Dip) through a numbered corporation (4064186 Canada Inc. (Canada 406)) that owned Novaquest Finishing Inc. Cat-Dip experienced financial difficulties. It gave notice to its employees advising them that they were either terminated or their employment with Cat-Dip could continue, but at a lower wage rate. Cat-Dip filed for bankruptcy. Lund later incorporated a new company (Cat Inc.) and repurchased Cat-Dip's assets. Several employees filed claims with the Ministry of Labour's Employment Standards Branch for their termination and severance pay, alleging that the remaining Lund companies were related employers. An Employment Standards Officer determined that Canada 406, Novaquest, and Cat Inc. were related employers to Cat-Dip pursuant to s. 4 of the Employment Standards Act. An order to pay was made against the three companies. The Ontario Labour Relations Board set aside the officer's decision. Novaquest, Canada 406 and Cat-Dip were related for the purposes of s. 4(1)(a) of the Act, as they had common management, ownership and financial control. The Board concluded that there was no evidence that the insolvency of Cat-Dip was caused or affected by its relationship with Canada 406 and Novaquest. Therefore, the test in s. 4(1)(b) had not been met and they could not be treated as one employer. The employees applied for judicial review.

The Ontario Divisional Court, in a decision reported at 228 O.A.C. 88, dismissed the application. The employees appealed.

The Ontario Court of Appeal dismissed the appeal.

Master and Servant - Topic 8307

Employment and labour standards - General - Interpretation of legislation - Lund purchased Catelectric-Dip Corp. (Cat-Dip) through a numbered corporation (4064186 Canada Inc. (Canada 406)) that owned Novaquest Finishing Inc. - Cat-Dip experienced financial difficulties - It gave notice to its employees advising them that they were either terminated or their employment with Cat-Dip could continue, but at a lower wage rate - Cat-Dip filed for bankruptcy - Lund later incorporated a new company (Cat Inc.) and repurchased Cat-Dip's assets - Several employees filed claims with the Ministry of Labour's Employment Standards Branch for their termination and severance pay, alleging that the remaining Lund companies were related employers - An Employment Standards Officer determined that Canada 406, Novaquest, and Cat Inc. were related employers to Cat-Dip pursuant to s. 4 of the Employment Standards Act - An order to pay was made against the three companies - The Ontario Labour Relations Board set aside the officer's decision - Novaquest, Canada 406 and Cat-Dip were related for the purposes of s. 4(1)(a) of the Act, as they had common management, ownership and financial control - The Board concluded that there was no evidence that the insolvency of Cat-Dip was caused or affected by its relationship with Canada 406 and Novaquest - Therefore, the test in s. 4(1)(b) had not been met and they could not be treated as one employer - The employees applied for judicial review - The Ontario Divisional Court dismissed the application - The Board's decision was reasonable - The employees appealed, arguing that the Divisional Court erred in concluding that the Board's interpretation and application of s. 4 of the Act was reasonable without first determining the correct interpretation of the section - The Ontario Court of Appeal dismissed the appeal - Section 119(14) of the Act was a statutory instruction of the legislature to the courts to leave the primary responsibility for the interpretation of the Act to the Board, a specialized expert tribunal - The legislature had mandated that the courts not overturn a decision of the Board concerning the interpretation of the Act unless it was unreasonable - This legislative scheme, which stipulated judicial review on the standard of reasonableness, precluded the Divisional Court from determining what, in its view, would be the correct interpretation of s. 4 of the Act in its review of the Board's decision - See paragraphs 39 to 47.

Master and Servant - Topic 8344.2

Employment and labour standards - Jurisdiction and powers of director, tribunal, referees or officers - Judicial review - Standard of review - [See Master and Servant - Topic 8307 and Master and Servant - Topic 8354 ].

Master and Servant - Topic 8354

Employment and labour standards - Jurisdiction and powers of director, tribunal, referees or officers - Power to treat related parties as "employer" - Lund purchased Catelectric-Dip Corp. (Cat-Dip) through a numbered corporation (4064186 Canada Inc. (Canada 406)) that owned Novaquest Finishing Inc. - Cat-Dip experienced financial difficulties - It gave notice to its employees advising them that they were either terminated or their employment with Cat-Dip could continue, but at a lower wage rate - Cat-Dip filed for bankruptcy - Lund later incorporated a new company (Cat Inc.) and repurchased Cat-Dip's assets - Several employees filed claims with the Ministry of Labour's Employment Standards Branch for their termination and severance pay, alleging that the remaining Lund companies were related employers - An Employment Standards Officer determined that Canada 406, Novaquest, and Cat Inc. were related employers to Cat-Dip pursuant to s. 4 of the Employment Standards Act - An order to pay was made against the three companies - The Ontario Labour Relations Board set aside the officer's decision - Novaquest, Canada 406 and Cat-Dip were related for the purposes of s. 4(1)(a) of the Act, as they had common management, ownership and financial control - The Board concluded that there was no evidence that the insolvency of Cat-Dip was caused or affected by its relationship with Canada 406 and Novaquest - Therefore, the test in s. 4(1)(b) had not been met and they could not be treated as one employer - The employees applied for judicial review - The Ontario Divisional Court dismissed the application - The Board's decision was reasonable - The employees appealed - The Ontario Court of Appeal dismissed the appeal - The finding of fact that Cat-Dip's relatedness to Novaquest and to Canada 406 supported the company, rather than consuming assets that might otherwise been available to meet Cat-Dip's employment standards obligations, was a justifiable and intelligible basis supporting the Board's conclusion that the relatedness did not have the effect of defeating the intent and purpose of the Act - The reasoning of the Board was transparent - The intent and purpose of the Act did not guarantee that employees would be paid their severance and termination pay entitlements in the event of the employer's bankruptcy - See paragraphs 57 to 73.

Cases Noticed:

Ryan v. Law Society of New Brunswick, [2003] 1 S.C.R. 247; 302 N.R. 1; 257 N.B.R.(2d) 207; 674 A.P.R. 207; 2003 SCC 20, refd to. [para. 43].

New Brunswick (Board of Management) v. Dunsmuir, [2008] 1 S.C.R. 190; 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [para. 44].

Timberland Ford Inc., Re, [2004] O.E.S.A.D. No. 917 (Lab. Bd.), refd to. [para. 54].

Victorian Order of Nurses, Re, [2004] O.E.S.A.D. No. 1403 (Lab. Bd.), refd to. [para. 55, footnote 2].

Queensway Roadhouse Ltd., Re, [2004] O.E.S.A.D. No. 761 (Lab. Bd.), refd to. [para. 55, footnote 2].

Northland Superior Supply Co., Re, [2004] O.E.S.A.D. No. 307 (Lab. Bd.), refd to. [para. 55, footnote 2].

Cameron Motorsports Inc., Re, [2004] O.E.S.A.D. No. 830 (Lab. Bd.), refd to. [para. 55, footnote 2].

IEP Ltd., Re, [2005] O.E.S.A.D. No. 1220 (Lab. Bd.), refd to. [para. 55, footnote 2].

PlateSpin Canada Inc., Re, [2005] O.E.S.A.D. No. 33 (Lab. Bd.), refd to. [para. 55, footnote 2].

Winter (Mark) & Associates Inc., Re, [2005] O.E.S.A.D. No. 1308 (Lab. Bd.), refd to. [para. 55, footnote 2].

Graphite Specialty Products Ltd., Re, [2009] O.E.S.A.D. No. 153 (Lab. Bd.), refd to. [para. 55, footnote 2].

Machtinger v. HOJ Industries Ltd. - see Lefebvre v. HOJ Industries Ltd.; Machtinger v. HOJ Industries Ltd.

Lefebvre v. HOJ Industries Ltd.; Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986; 136 N.R. 40; 53 O.A.C. 200, refd to. [para. 58].

Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re, [1998] 1 S.C.R. 27; 221 N.R. 241; 106 O.A.C. 1, refd to. [para. 59].

Carillon Decorative Products Inc. v. Mellon et al. (2004), 188 O.A.C. 312; 71 O.R.(3d) 500 (Div. Ct.), refd to. [para. 67].

Statutes Noticed:

Employment Standards Act, S.O. 2000, c. 41, sect. 4(1) [para. 16].

Counsel:

Ron Franklin and Avvy Go, for the appellants;

Brian Blumenthal and Judy L. Chan, for the respondent, Director of Employment Standards (Ministry of Labour);

Clifton Prophet and Brent Arnold, for the respondents, Novaquest Finishing Inc., Catelectric Inc., and 4064186 Ontario Inc.;

Voy Stelmaszynski, for the respondent, Ontario Labour Relations Board.

This appeal was heard on January 27, 2009, by Simmons, Blair and Juriansz, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Juriansz, J.A., on June 18, 2009.