C.A. No. 122955
NOVA SCOTIA COURT OF APPEAL
Cite as: Conrad v. Scott Maritimes Ltd., 1996 NSCA 130
Chipman, Bateman and Flinn, JJ.A.
BETWEEN: )
)
REGINALD A. CONRAD ) Bruce T. MacIntosh, Q.C.
) for the Appellant
Appellant )
)
- and - )
)
SCOTT MARITIMES LIMITED ) Eric B. Durnford, Q.C.
) for the Respondent
Respondent )
)
)
)
) Appeal Heard:
) May 21, 1996
)
)
)
) Judgment Delivered:
) June 14, 1996
THE COURT: The appeal is dismissed with costs in the amount of $2,000.00, plus disbursements as per reasons for judgment of Chipman, J.A.; Bateman and Flinn, JJ.A., concurring.
CHIPMAN, J.A.:
This is an appeal on questions of law from a decision of the Labour Standards Tribunal established under the Labour Standards Code, R.S., c. 246. By its decision, the Tribunal dismissed the appellant's appeal from the dismissal by the Director of Labour Standards of his complaint that he was discharged by the respondent without just cause contrary to s. 71 of the Code.
The respondent operates a pulp mill at Abercrombie Point, Pictou County, Nova Scotia. It is a body corporate, wholly owned by Scott Paper Company of Philadelphia.
The appellant was a maintenance supervisor employed for 15 years by the respondent prior to his termination on January 30, 1992.
In November, 1991, Scott Paper decided to undertake a corporate restructuring on a worldwide basis with a goal to reduce its worldwide work force of about 38,000 by 10%. Specifically, this was to be achieved by effecting a 25% reduction of the administrative (salaried) ranks of the work force. This restructuring program was a departure from a previously announced program of attrition to one of forced reduction. Representatives of the respondent attended at Scott Paper's offices in Philadelphia for instructions respecting its implementation. Following directives from Scott Paper, three senior management representatives of the respondent undertook a confidential review and ranking of 100 of the respondent's non-unionized salaried employees with a view to effecting the programmed reduction of the work force. This ranking was done on a strictly confidential basis without the knowledge of the employees involved. The ranking system placed emphasis on the employees' ability to respond to future job requirements
of the restructured organization.
By November 26, 1991, the ranking of 100 employees was completed. The appellant stood 99th out of these, and 19th out of 19 within the maintenance department. There were about 350 hourly rated (union) and about 103 salaried (non-union) personnel.
On January 30, 1992, 28 salaried employees were terminated, 21 through enhanced early retirement packages and seven, including the appellant, through involuntary termination. Thirteen others out of 57 in Canadian Timberlands Division were terminated. The appellant was offered a severance package. He was the only one out of 41 terminated employees not to accept the package offered.
Notwithstanding an intimation that 45 unionized employees would also be terminated, none ever was.
The respondent advised the appellant that his termination was on the grounds of economic necessity. There was no suggestion that his job performance was unsatisfactory.
The appellant filed a complaint with the Director of Labour Standards on March 4, 1992 on the ground that the respondent had breached s. 71 of the Code. By letter dated February 25, 1993, the Director served notice on the appellant of his dismissal of the complaint, having found that s. 71 of the Code had been complied with. The appellant was advised that he could appeal directly to the Tribunal and this the appellant did on March 10, 1993.
The Tribunal conducted a lengthy hearing occupying 17 days over a period from February 7, 1994 to February 9, 1995. By its decision dated November 7, 1995, the Tribunal dismissed the appeal.
The appellant's appeal and the respondent's response thereto centred around s. 71(1) and s. 72(1) and (3)(d) of the Code:
71 (1) Where the period of employment of an employee with an employer is ten years or more, the employer shall not discharge or suspend that employee without just cause unless that employee is a person within the meaning of person as used in clause (d), (e), (f), (g), (h) or (i) of subsection (3) of Section 72.
. . .
72 (1) Subject to subsection (3) and Section 71, an employer shall not discharge, suspend or lay off an employee, unless the employee has been guilty of wilful misconduct or disobedience or neglect of duty that has not been condoned by the employer, without having given at least
. . .
(d) eight weeks' notice in writing to the person if his period of employment is ten years or more.
. . .
(3) Subsections (1) and (2) do not apply to
. . .
(d) a person who is discharged or laid off for any reason beyond the control of the employer including complete or partial destruction of plant, destruction or breakdown of machinery or equipment, unavailability of supplies and materials, cancellation, suspension or inability to obtain orders for the products of the employer, fire, explosion, accident, labour disputes, weather conditions and actions of any governmental authority, if the employer has exercised due diligence to foresee and avoid the cause of discharge or lay-off;
The Tribunal made the following findings:
Scott Maritimes Limited is a wholly owned subsidiary of Scott Paper Company and operates a pulp mill at Abercrombie, Nova Scotia.
Scott Maritimes Limited essentially produces only one type of pulp. Ninety-five percent of its pulp is purchased within the Scott group of companies. The remaining five percent of pulp is sold on the open market.
Scott Maritimes Limited started operations in 1967 and over the years was profitable and paid those profits to the parent Scott Paper Company. In return, Scott Paper Company made substantial capital investments in Scott Maritimes Limited.
In the late 1980's, Scott Maritimes Limited reflected on its future in light of changes taking place within the pulp industry and determined that major emphasis had to be placed on reducing costs if Scott was to remain competitive in a world market for pulp.
A major concern for Scott Maritimes was whether Scott Paper Company would agree to invest $127,000,000.00 in capital investment to replace the aging Recovery Boiler. The existing Recovery Boiler had already exceeded its life expectancy of twenty-five years. If the Recovery Boiler failed the plant would close.
Scott Maritimes Limited was also concerned that the company would be held liable for treatment costs of effluent at Boat Harbour.
Scott Maritimes Limited became concerned that the substantial capital investment required from Scott Paper Company might not be readily available. Major changes were taking place in the pulp industry. These changes included a trend towards elemental chlorine free pulp production, the emergence of recycled fibre, increased production capacity of Scott Maritime Limited's competitors and substantial increases in Scott Maritimes Limited own inventories of pulp. By 1991 Scott Maritimes Limited reached an all time high inventory of thirty five thousand tons of pulp. In the past, inventory had ranged from a few tons to five thousand tons. In 1988 and 1989 the price of pulp peaked. However, by the end of 1991, the price of one hundred percent softwood pulp had dropped from a peak of $830.00 (US) per ton in 1990 to $500.00 (US) per ton.
By 1990, Scott Maritimes Limited had concluded that cost reduction had to be their primary strategy. Scott Maritime Limited management had concluded that in order to obtain the capital investment needed to stay in business the company had to become a good quality low cost producer.
In 1990, a five-year business plan for cost reduction was set in place to cover the period 1991 to 1995. Details of efforts by Scott Maritimes Limited to reduce costs between 1989 and 1993 are contained in Exhibit RA, Tab 10, but included reductions in inventories other than pulp, reductions in person hours and non replacement of 38 hourly personnel, and the sale of various operations.
By 1991, despite all of Scott Maritimes Limited's efforts, the company was convinced that more substantial permanent reductions in personnel were necessary if the plant was to survive. The company's fears were heightened when Scott Paper Company ranked Scott Maritimes Limited a category "B" plant making it less favourable for capital investment.
On January 23, 1992, Scott Paper Company announced it was reducing its workforce worldwide by ten percent. Scott Maritimes Limited decided it was necessary to terminate forty-one employees of whom twenty-eight worked in the mill and thirteen for Canadian Timberlands Division. Twenty-six terminations were by retirement and fifteen were actual dismissals. Scott Maritimes Limited testified that although the announcement by Scott Paper Company allowed them new options in handling the termination, the decision to terminate would have been taken regardless of the decision by Scott Paper Company to achieve a ten percent reduction in the labour force worldwide.
All of the forty-one terminations were from the salaried workforce. Leading up to the termination of the forty-one employees, Scott Maritimes Limited followed a process under which it conducted an analysis of future work that needed to be done and then attempted to assess the capabilities of existing salaried employees to match what Scott Maritimes Limited considered to be the right employees with the work to be done.
Each employee was rated under the following headings: 1. Demonstrated Job Skills Needed for the Work Ahead; 2. Versatility/Growth Potential; and, 3. Scott Service. However, the decisive category was demonstrated job skills with little emphasis placed on years of service.
The Complainant, Reginald Conrad was ranked 99th out of the 100 salaried personnel who were rated and 19th out of 19 in the maintenance department.
On January 30, 1992, the Respondent, Scott Maritimes Limited, terminated the employment of Mr. Conrad. The letter of termination stated the reason for the termination was serious and negative economic factors which resulted in the need for the company to permanently restructure its workforce. During the course of the hearing Scott Maritimes Limited witnesses described the termination as a non-disciplinary termination.
During 1990, three new maintenance supervisors were hired by Scott Maritimes Limited to do the same job as Mr. Conrad. Based on the rating system these three new employees were kept on while Mr. Conrad was terminated.
The Tribunal then referred to s. 71 of the Code and the definitions of "discharge" and "lay-off" contained in s. 2(c) and (i):
2 In this Act,
. . .
(c) "discharge" means a termination of employment by an employer other than a lay-off or suspension;
. . .
(i) "lay-off" means temporary or indefinite termination of employment because of lack of work and includes a temporary, indefinite or permanent termination of employment because of the elimination of a position, and "laid off" has a corresponding meaning;
The Tribunal found that the appellant's discharge was "a non-disciplinary termination". The Tribunal considered that two issues arose.
The first issue was whether s. 71 of the Code applied. The Tribunal held that it did not, because the appellant's termination was a lay-off related to lack of work.
The second issue was whether s. 72(3)(d) of the Code applied in any event. The Tribunal held that it did, saying:
The Tribunal is satisfied that in this case the cause of the termination was the need to reduce costs to remain a viable company. The Tribunal finds that the Company exercised due diligence to avoid the cause of discharge or lay-off, by attempting other methods of cost reduction first. However, in the end, company management decided that if the company was to remain viable it was necessary to reduce its workforce. Having determined that the company exercised due diligence to avoid the cause of "lay off", the inquiry must end there. There is no duty on the company to exercise due diligence to avoid the particular discharge or lay off of Mr. Conrad by laying off someone else. There is no seniority rights under the Labour Standards Code.
The Tribunal therefore dismissed the appellant's complaint.
The scope of an appeal from a decision of the Tribunal is limited by s. 20 of the Code:
20 (1) If in any proceeding before the Tribunal a question arises under this Act as to whether
(a) a person is an employer or employee;
(b) an employer or other person is doing or has done anything prohibited by this Act,
the Tribunal shall decide the question and the decision or order of the Tribunal is final and conclusive and not open to question or review except as provided by subsection (2).
(2) Any party to an order or decision of the Tribunal may, within thirty days of the mailing of the order or decision, appeal to the Nova Scotia Court of Appeal on a question of law or jurisdiction
The appellant raises two issues: (1) that the Tribunal erred in law in finding that the appellant was laid-off within the meaning of that term in the Code thereby rendering s. 71 inapplicable; and (2) that the Tribunal erred in finding that the appellant came within s. 72(3)(d) of the Code. If this appeal is to prevail, the appellant must succeed on both of these issues. In my view, it is not necessary to deal with the first issue because I have concluded that the appellant's argument that the Tribunal erred in finding that he fell within s. 72(3)(d) of the Code should not succeed.
There was extensive argument before us dealing with the standard of review on an appeal from a decision of the Tribunal. Generally, it is appropriate to keep in mind what the Supreme Court of Canada said in Pezim v. British Columbia Superintendent of Brokers, [1994] 2 S.C.R. 557 at pp. 590-91:
Having regard to the large number of factors relevant in determining the applicable standard of review, the courts have developed a spectrum that ranges from the standard of reasonableness to that of correctness. Courts have also enunciated a principle of deference that applies not just to the facts as found by the Tribunal, but also to the legal questions before the Tribunal in light of its role and expertise. At the reasonableness end of the spectrum, where deference is at its highest, are those cases where a Tribunal protected by a true privative clause, is deciding a matter within its jurisdiction and where there is no statutory right of appeal . . .
At the correctness end of the spectrum, where deference in terms of legal questions is at its lowest, are those cases where the issues concern the interpretation of a provision limiting the Tribunal's jurisdiction (jurisdictional error) or where there is a statutory right of appeal which allows the reviewing court to substitute its opinion for that of the Tribunal and where the Tribunal has no greater expertise than the Court on the issue in question, as for example in the area of human rights.
With respect to the protection afforded the Tribunal's decisions on other than points of law, the degree of protection is high. In Ben's Limited v. Decker et al. (1995), 142 N.S.R. (2d) 371, Hallett, J.A. speaking for this Court said at p. 375:
The law is clear the Tribunal must be correct in its interpretation of the relevant provisions of the Code and while deference is shown to decisions of specialized Tribunals even on questions of law, the degree of deference to be accorded a Tribunal will vary.
In my opinion, the Tribunal is not as specialized a Tribunal as the Securities Commission whose decision was subject to review in Pezim v. British Columbia Securities Commission. That Commission was given by statute an important policy role and was clearly involved in a very specialized and technical field. It is for this reason that deference should be shown to the decisions of such a Commission. On the other hand, the Tribunal is more specialized than a Human Rights Commission. The Tribunal's function is more analogous to that of a labour relations board. However, as a general rule, the decisions of Labour Relations Boards are protected by full privative clauses; that is the case in this province (see Trade Union Act R.S.N.S. 1989, c. 475, Section 19(1)). The Tribunal is not so protected. Its decisions are subject to appeal for errors of law or jurisdiction. It is clear that the Legislature intended that the Tribunal be subject to a much broader scope of review of an appellate court than the Labour Relations Board.
The general standard of review of the decision of administrative tribunals is summarized by Cory, J. in The Attorney General of Canada v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941 at pp. 961-962:
In summary, the courts have an important role to play in reviewing the decisions of specialized administrative tribunals. Indeed, judicial review has a constitutional foundation. See Crevier v. Attorney General of Quebec, [1981] 2 S.C.R. 220. In undertaking the review courts must ensure first that the board has acted within its jurisdiction by following the rules of procedural fairness, second, that it acted within the bounds of the jurisdiction conferred upon it by its empowering statute, and third, that the decision it reached when acting within its jurisdiction was not patently unreasonable. On this last issue, courts should accord substantial deference to administrative tribunals, particularly when composed of experts operating in a sensitive area.
Specifically, with respect to findings of fact by the Tribunal, this Court in Crossman v. Labour Stds. Tribunal (N.S.) (1991), 109 N.S.R. (2d) 274, dealt with when a review of findings of fact could become a question of law within s. 20 of the Code. Clarke, C.J.N.S. speaking for the Court said at p. 277:
This means first, that an appeal is not a new trial. It is not for this Court to hear the evidence all over again and render a fresh decision as though the Tribunal never existed or had no jurisdiction. It means second, that the decision of the Tribunal on whether CanStone has "done anything prohibited by (the) Act" is a "question" to be decided by the Tribunal whose decision is "final and conclusive" unless by subsection (2) it has committed an error on a question of law.
In this instance, the issues are essentially questions of fact to be determined by the Tribunal. In such a situation the law is settled that where the enabling legislation gives the Tribunal the authority to make final and conclusive decisions of fact, the issue on appeal only becomes a question of law where there is no evidence before the tribunal which can support the findings it has made.
Thus whether or not there is any evidence at all to support the conclusion of a court or tribunal is a question of law which an appeal court is free to determine. See Children's Aid Society v. Maguire (1975), 32 N.S.R. (2d) 1 (N.S.C.A.) at pp. 8-9; Regina v. Crosby (1960), 129 C.C.C. 214 (N.S.C.A.) at p. 215.
In Halifax Developments Limited v. Sutton (1995), 142 N.S.R. (2d) 264, this Court found that the Tribunal had misdirected itself in law. Freeman, J.A. said at p. 267:
The determination of what constitutes a lay-off or a discharge involves interpretation of the Labour Standards Code and jurisprudence and is a question of law to which the standard of correctness applies. Whether a particular set of circumstances is a lay-off or a discharge is a question of fact within the core jurisdiction of the Tribunal. The standard of review of factual findings by the Tribunal involves a high degree of deference and Tribunal decisions on issues of fact will be interfered with only when they are patently unreasonable.
The Tribunal's findings at issue are, to the extent that they are findings of fact, largely insulated by the provisions of s. 20(1) of the Code. They can be set aside if there is no evidence to support them or if they are patently unreasonable. If the Tribunal erred in law in the process of reaching its ultimate conclusions, this Court has a broad power of review. Even on a question of law, curial deference must be shown. In Scott Maritimes Limited v. Labour Standards Tribunal (N.S.) (1994), 135 N.S.R. 58, Roscoe, J.A. said speaking for this Court said at p. 63:
In my view the Labour Standards Tribunal is a specialized tribunal in matters of determining, among other things, the length of employment and although the issue in this case is a question of law, curial deference should be shown to the decision of the tribunal. It should not be overturned on appeal unless its interpretation of the Code can be found to be incorrect.
The appellant attacks the Tribunal's finding that he came within s. 72(3)(d) of the Code on two broad bases. First, he argues that the Tribunal erred in law in the inferences it drew from the facts found by it in coming to the ultimate conclusions that the termination was for a reason beyond the control of the respondent, and that the respondent exercised due diligence. Second, the appellant contends that such findings were patently unreasonable.
ERROR IN LAW IN THE DRAWING OF INFERENCES:
The appellant refers to the following passage in the decision of Denning, L.J., as he then was, in British Launderers' Research Association v. Borough of Hendon Rating Authority, [1949] 1 K.B. 462 at p. 471:
. . . On this point it is important to distinguish between primary facts and the conclusions from them. Primary facts are facts which are observed by witnesses and proved by oral testimony or facts proved by the production of a thing itself, such as original documents. Their determination is essentially a question of fact for the tribunal of fact, and the only question of law that can arise on them is whether there was any evidence to support the finding. The conclusions from primary facts are, however, inferences deduced by a process of reasoning from them. If, and in so far as, those conclusions can as well be drawn by a layman (properly instructed on the law) as by a lawyer, they are conclusions of fact for the tribunal of fact; and the only questions of law which can arise on them are whether there was a proper direction in point of law; and whether the conclusion is one which could reasonably be drawn from the primary facts; ... If, and in so far, however, as the correct conclusion to be drawn from primary facts requires, for its correctness, determination by a trained lawyer - as, for instance, because it involves the interpretation of documents or because the law and the facts cannot be separated, or because the law on the point cannot properly be understood or applied except by a trained lawyer - the conclusion is a conclusion of law on which an appellate tribunal is as competent to form an opinion as the tribunal of first instance.
On this branch of the argument, the appellant is driven to showing that the Tribunal made an error of law in the drawing of inferences in the course of reaching its conclusions. The meaning of the words "any reason beyond the control of the employer . . ." and "due diligence to foresee and avoid the cause of the discharge or lay-off" is a question of law. Whether a particular set of circumstances falls within these terms are questions of fact within the core jurisdiction of the Tribunal. See Sutton, supra. In Gould v. Yukon Order of Pioneers, Dawson Lodge No. 1 et al. (1996) 194 N.R. 81, L'Heureux-Dubé, J. dissenting said at p. 154:
The absence of any right of appeal on questions of fact is of great significance, given the essentially factual nature of the impugned findings of the Board. My colleague Iacobucci, J., points out that the Board's factual findings are not based on viva voce evidence, and concludes that the deference owed to the Board's findings is "significantly attenuated" (para. 4). In reality, however, where an appeal is limited to questions of law, it is well-established that an appellate court has no power to overturn findings of fact unless they are so unreasonable that the Board must have misdirected itself as to the law. This principle applies regardless of whether the findings are based on viva voce or documentary evidence. It applies even if the findings are inferred from primary facts not in dispute: Edwards v. Bairstow, [1956] A.C. 14 (H.L.), and R. v. Lampard, [1968] 2 O.R. 470 (C.A.), at p. 477. The case cited by Iacobucci J. in support of his argument has no application here, since the right of appeal in that case was not restricted to questions of law: Workmen's Compensation Board v. Greer, [1975] 1 S.C.R. 347; 1 N.R. 99; 7 N.B.R. (2d) 171.
The appellant, in support of his argument that the Tribunal erred in law in failing to draw correct inferences, places emphasis on s. 71 of the Code. He says tenure rights are thereby created. For convenience of reference, I will adopt the term "tenured employee" to describe an employee who comes within s. 71 of the Code. The appellant says that the Tribunal erred in finding that the respondent exercised due diligence to avoid the cause of the discharge. It erred in saying that the inquiry must end there. It erred in saying that there was no duty on the respondent to exercise due diligence to avoid the discharge or lay-off of the appellant by laying off someone else. The appellant's position is that the tenure rights created by s. 71 of the Code must be given meaning and recognition. Due diligence requires that the employer take steps to avoid the cause of discharge of a tenured employee by taking other steps first, including the discharge of non-tenured employees.
In my opinion, there is nothing in the Code which requires the employer in the exercise of due diligence to ensure, in any cost saving exercise necessitated by a reason beyond the employer's control, that other employees are terminated before a tenured employee is terminated. If such cause necessitates reduction in the work force, there is no requirement that a tenured worker be the last to go. Section 71(1) clearly states that it does not apply to an employee within the meaning of person as used in s. 72(3)(d). There are no seniority rights under this section of the Code. In Ben's Limited v. Decker et al, supra, Hallett, J.A. said at p. 380:
In my opinion s. 71(1) requires an employer to exercise due diligence to foresee and avoid the cause of a discharge or lay-off of an employee. In this case the cause would appear to have been the need to reduce costs to remain a viable company. This was apparently caused by increased competition in the bread business. The Tribunal was required to determine if this underlying cause was beyond the control of the employer, not whether the employer could have, in the exercise of due diligence, found a place for the employee in the employer's operations.
In my opinion, it is a matter for the Tribunal in each case to determine if the underlying cause of the discharge was beyond the control of the employer. This will be a judgment call by the Tribunal having regard to the evidence before it and the application of its expertise in dealing with such matters. I am not prepared to read into the statute an obligation on the Tribunal to require, as a matter of law, that a tenured employee be the last to go when reasons beyond the control of the employer necessitate terminating employment.
It is a matter for the Tribunal in each case to determine whether a ranking of employees on their right or best fit for the work to be done is a genuine response to a reason beyond the employer's control causing lay offs to be necessitated, or whether it is merely a disguised weeding out process of marginal or less productive employees.
I agree with the respondent's submission that the exercise of the duty of due diligence must be examined in each case. The Tribunal had before it all of the evidence, to which I have already made reference, supporting a strong requirement for cost cutting. Other methods, including attrition of employees, were not found to be sufficient. The respondent did not react by simply terminating the appellant. The appellant's termination was but one of a number from a significant group of employees.
Nor am I prepared to impose any other specific restraint or directive upon the Tribunal such as the appellant's suggested duty to forewarn or consult with tenured employees as a mandatory component of the employer's due diligence.
When the Tribunal finds facts and draws inferences therefrom leading to the conclusion of due diligence, it is not something that requires legal training. The words of s. 72(3)(d) are not technical. Legal skills are not required to understand them or apply them. Rather, they are best applied by a body with the expertise of the Tribunal. Therefore, it will be very difficult to find fault with the fact finding process which leads to a determination of due diligence pursuant to s. 72(3)(d) of the Code. As Hallett, J.A. said in Ben's Limited, supra, at p. 375, the Tribunal is more specialized than a Human Rights Commission. Its function is more analogous to that of a Labour Relations Board. On fact finding matters, it enjoys the protection of a full privative clause.
We have seen that even on a question of law curial deference should be shown.
In Scott Maritimes Limited v. Labour Standards Tribunal (N.S.), supra, Roscoe, J.A. noted that the members of the Tribunal in this very matter have significant expertise at p. 62:
It is interesting to note that the three members of the tribunal who heard the Conrad complaint in 1994 are the same panel who heard the Sobeys v. Yeomans matter in 1984. That the panel has expertise in matters related to the Code cannot be seriously questioned . . .
In his able argument, counsel for the appellant has failed to point to any error of law by the Tribunal either in the finding of the primary facts or in the drawing of the necessary inferences to arrive at its final conclusion as mandated by the Code. I would reject this ground of appeal.
PATENTLY UNREASONABLE FINDINGS:
Having found no errors of law, I believe that in order to demonstrate that the decision is patently unreasonable, the appellant is driven to show that there was no evidence before the Tribunal which could support its ultimate findings, or that these findings were patently unreasonable in the face of the evidence in the record.
Appellant's counsel contended that these findings are not supported in the face of the undisputed evidence in the record. Counsel submitted that the conclusions reached by the Tribunal did not necessitate credibility findings. He submitted that the respondent's own evidence clearly fails to establish its case. He invited us to examine the record to test this assertion. I have done so, but solely to determine whether or not there was evidence on which the Tribunal could reach the key conclusions or whether the findings, viewed as a whole, were patently unreasonable.
We must avoid the temptation to enter into a re-trial of the issues before the Tribunal.
A program of substantial and permanent cost reductions had been in place at the respondent's mill since 1988. This was in response to concerns respecting the worldwide competitive marketplace in which it was involved and a need to obtain additional capital from Scott Paper for its aging mill. While profits were made in 1991 and 1992, they were relatively unimportant in comparison with the problems of capital shortage. Scott Paper was in 1991 heavily in debt which it was trying to reduce by selling off nonstrategic businesses and taking other measures to reduce expenditure. In 1990 and 1991, pulp prices dropped sharply. Inventories were reduced. Person hours were reduced through attrition and the sale of various operations. Attrition in the salaried (non-union) work force had simply not occurred, whereas in the hourly (union) group there was substantial attrition.
In support of his case that the findings of fact were not supported by the evidence, the appellant refers to the testimony and exhibits led and entered by the respondent in the record. He refers to a number of concessions made by the respondent's witnesses in the course of cross-examination. While a review of the record reveals that the appellant scored points with these witnesses and forced them to retreat to some degree, the totality of their evidence at the end of the day was still sufficient to warrant the Tribunal coming to the conclusions: (a) that the respondent was faced with a crisis arising out of worldwide competition in the pulp and paper industry, a substantial capital problem and the problem of an aging plant, and (b) that due diligence was exercised by the respondent to avoid the cause of the termination.
Specifically, in December 1990, Scott Paper initiated a business improvement plan to cut costs and by late 1991 they broadened and accelerated the plan, including the goal of 10% reduction in the worldwide work force. The respondent initiated a five year business plan in November 1990 aimed at reducing manufacturing costs. It was facing the need for fresh capital for its aging plant. It had to have a good quality cost cutting program if it hoped to attract additional capital from Scott Paper. A number of efficiencies were put in place and reduction of the work force was to be obtained through attrition and work place redesign. By late 1991 because of the recession and foreign competition, pulp prices declined. It was necessary to accelerate the five year business plan. There had been no attrition in the salaried work force comparable to that of the hourly force. The hourly force in terms of person hours had been reduced by 67,000 between 1988 and 1991, with a further projected reduction of 18,000 hours in 1992 and 25,000 hours in 1993, for a total hourly work force reduction of approximately 55 person years. It was necessary to terminate 41 salaried employees as part of the general strategy. The choice of the appellant's layoff arose from the fact that he was the least suited for the work needed to meet the objective of greater efficiency in the future. The due diligence found by the Tribunal to avoid the cause of the appellant's termination consisted of the other cost cutting operations it had embarked upon first, including attrition of the hourly work force, challenging poor performance and other operating economies at the plant.
The respondent's exhibit R.A. Tab 10 summarizes the many actions taken by it to reduce costs. The witnesses called on the respondent's behalf spoke of these actions taken between 1989 and 1992.
It was the appellant's position before the Tribunal and in this Court that the real motivation in terminating him was a desire to bring along fresh new blood in its company and get rid of deadwood. The Tribunal therefore had to decide whether the termination was caused by a need imposed upon the appellant to control costs or whether it was merely a disguised housecleaning. If it was not the former, it was either the latter or some other unjustifiable cause having regard to the provisions of ss. 71 and 72 of the Code. The appellant testified before the Tribunal. The respondent had not, as part of its case, made any attempt to characterize the appellant as incompetent. However, the appellant's testimony raised the issue of his worth comparative to other employees who were not terminated. He attacked the selection process. He raised questions of good faith of the respondent in its dealings with him. His counsel's presentation to the Tribunal invited the conclusion that the termination was motivated by corporate greed, dictated by head office. The appellant's counsel submits that the respondent had embarked upon a plan of "survival of the fittest".
The Tribunal rejected the appellant's position and accepted that of the respondent. It had ample evidence to support the conclusions it reached. As a fact finding Tribunal, it enjoyed enormous advantages over this Court in making the judgment that it did. I have concluded that it made no error in its ultimate finding that the appellant fell within the provisions of s. 72(3)(d) of the Code.
I would dismiss the appeal with costs which I would fix at $2,000.00, plus disbursements.
Chipman, J.A.
Concurred in:
Bateman, J.A.
Flinn, J.A.