A-532-90
Andrée Ménard and Michel Ouellette (Applicants)
v .
Her Majesty the Queen (Respondent)
INDEXED AS: MENARD V. CANADA (CA.)
Court of Appeal, Pratte, Hugessen and Desjardins
JJ.A.—Ottawa, March 25 and July 10, 1992.
Civil Code — Unionized federal public servants in Quebec
working extra hours, paid at overtime rates — Overtime, rates
paid in error as not provided for by collective agreement —
Whether employer entitled to recover overpayment — Employ
ees pleading promissory estoppel — Ouellette having accepted
promotion only on promise of continued overtime hours,
Ménard having given up rest days and vacation — Estoppel
requiring reliance to detriment — No detriment in Ouellette's
case — Common law doctrine of estoppel not applying to
cause of action arising in Quebec — Fin de non-recevoir not
identical to estoppel — Unjust enrichment civilist doctrine
applicable to facts of case — Five elements of action in unjust
enrichment (gain by one party, loss by other, relationship
between gain and loss, absence of lawful justification, lack of
other remedy at law) met as to Ménard.
Public Service — Labour relations — Nurses in penitentiary
working outside usual hours, being paid at overtime rates —
Employer subsequently discovering overtime payments made
under erroneous interpretation of collective agreement —
Recovering overpayments pursuant to Financial Administra
tion Act, s. 155 by deductions from salaries — Arbitrator
rejecting grievances — Whether arbitrator having jurisdiction
to hear grievances based on promissory estoppel — Dispute
arising out of misinterpretation in first instance of collective
agreement — Application of agreement source of alleged
estoppel — Whether common law doctrine of estoppel applica
ble to cause of action arising in Quebec — Application
allowed, as to one of two applicants, on basis of unjust enrich
ment.
This was a section 28 application for judicial review of an
arbitrator's decision rejecting the applicants' grievances. The
applicants were nurses, working for the Correctional Service
of Canada in its institution at Cowansville. They were union-
ized, and their conditions of work were governed by a collec
tive agreement. The practice at the institution was to treat as
overtime any work done outside an employee's usual working
hours, including pause days and vacation. At the end of 1987,
the employer realized that this practice was based upon an
erroneous interpretation of the collective agreement, and that
many of the hours paid at overtime rates should not have been.
The applicants had, in 1986 and 1987, performed work outside
their normal working hours and had received overtime pay.
The employer notified the applicants that they had been over
paid, Mr. Ouellette to the extent of 128 hours and Ms. Ménard
to the extent of 35 hours. The employer proceeded to recover
the money by deducting it from the employees' current sala
ries. The employees' representative agreed that the overtime
payments were not called for by the collective agreement, but
argued that the employer, having induced the applicants to
work extra hours, is estopped from reclaiming the overpay-
ment. In the case of Mr. Ouellette, he was offered a supervi
sory job which would not ordinarily have entailed any over
time; and he accepted it on the understanding that he would
continue to carry out overtime work as a nurse, to about the
same number of hours as before. Ms. Ménard was called back
to work on her rest days and during vacation, and agreed to
give up her time off on the understanding that she would get
either time-and-a-half or double-time.
The arbitrator held that the recovery of the overpayments
was lawful under the Financial Administration Act.
Held (Pratte LA. dissenting), the application should be
allowed as to the applicant, Ménard but dismissed as to Ouel-
lette.
Per Hugessen J.A.: Section 92 of the Public Service Staff
Relations Act confers upon an arbitrator authority to hear
grievances involving the interpretation or application of a col
lective agreement. The source of the instant dispute was a
mutual misinterpretation of the collective agreement. The
actions of the employer said to create an estoppel were actions
exactly in the application of the agreement, and a conflict as to
the legal consequences of those actions necessarily lies within
the jurisdiction of the arbitrator. Estoppel requires not just reli
ance on the promise, but detriment on the part of the promisee.
When Mr. Ouellette accepted the promotion to Chief of Health,
he was promised the opportunity to work overtime, and
received it. There was no detriment to him in taking the new
position, whatever the rate of pay for those extra hours. Ms.
Ménard did suffer detriment in giving up her days off, which
she would not have done if she was to be paid only at the regu
lar rate. She might be able to invoke estoppel, except that the
common law doctrine of estoppel, argued by both parties, is
not part of the law applicable to the case. The cause of action
arose in the province of Quebec, and the general law applica-
ble is civil law. Although the expression "estoppel" is often
used in civilist writings, the concept is not identical to the fin
de non-recevoir, and the common law vocabulary is to be
avoided as being misleading. Ms. Ménard's action against the
employer is better framed in unjust enrichment, a concept
which is solidly established in civilist doctrine and case law.
There are five elements required for an action in unjust enrich
ment. There must be enrichment of one party, deprivation of
another, a causal link between the two, a lack of juridical justi
fication for the enrichment, and no other remedy for the person
deprived. Here, the employer has gained extra work from Ms.
Ménard, she has been deprived of her rest days, and the gain
and detriment arise out of the same event. The parties acted out
a mutual error of law, negating the cause for the employee's
agreement. No other remedy is available.
Per Pratte J.A. (dissenting): The arbitrator was without
jurisdiction to hear the grievances of the applicants. Subsection
92(1) of the Act empowers the adjudicator to hear grievances
based on the interpretation or application of the collective
agreement, and that jurisdiction is limited to a determination
whether the employer has violated the collective agreement. In
reclaiming the overpayments made to the applicants, the
employer was not applying the terms of the collective agree
ment, but the general law on the recovery of moneys paid in
error. The applicants acknowledge that the collective agree
ment did not entitle them to receive the sums in question. Even
assuming that the representations and promises made by the
employer disentitled it to recover the moneys paid, this argu
ment has nothing to do with the collective agreement it was the
function of the arbitrator to interpret and apply.
This matter arose in Quebec, where the civil law recognizes
the contractual validity of a simple promise, without the neces
sity that the promisee furnish a consideration. Since the doc
trine of promissory estoppel is a gloss on the common law
requirement for consideration, it can have no bearing on a mat
ter arising out of offers made and accepted in Quebec.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Code du travail, R.S.Q. 1977, c. C-27.
Federal Court Act, R.S.C., 1985, c. F-7, s. 28.
Financial Administration Act, R.S.C., 1985, c. F-11, s.
155(3).
Public Service Staff Relations Act, R.S.C., 1985, c. P-35,
ss. 92, 93.
CASES JUDICIALLY CONSIDERED
APPLIED:
National Bank of Canada (Canadian National Bank) v.
Soucisse et al., [1981] 2 S.C.R. 339; (1981), 43 N.R. 283.
REFERRED TO:
Sinyor Spinners of Canada Ltd. c. Leeson Corp., [1976]
C.A. 395; (1976), 29 C.P.R. (2d) 71 (Qué.); Cerundolo c.
Val-Barette (Corp. mun. de), [1986] R.D.I. 796; (1986), 9
Q.A.C. 96 (C.A. Qué.); Syndicat national des travailleurs
des pâtes et papiers de Port-Alfred c. Lippé, [1990] R.D.J.
124 (C.A. Qué.); Canada (Attorney General) v. Public
Service Alliance of Canada, [1991] 1 S.C.R. 614; (1991),
80 D.L.R. (4th) 520; 48 Admin. L.R. 161; 91 CLLC
14,017; 123 N.R. 161.
AUTHORS CITED
Baudouin, Jean-Louis. Les obligations, Montréal: Presses
de l'université de Montréal, 1970.
D'Aoust, Claude et Dubé, L. L'estoppel et les taches en
jurisprudence arbitrale, Montréal: École de relations
industrielles, Université de Montréal, 1990.
APPLICATION for judicial review of a decision of
an arbitrator appointed under the Public Service Staff
Relations Act, holding applicants disentitled to over
time pay. Application allowed as to one of two appli
cants.
COUNSEL:
Catherine H. MacLean for applicants.
Dora Benbaruk and Harvey A. Newman for
respondent.
SOLICITORS:
Nelligan/Power, Ottawa, for applicants.
Deputy Attorney General of Canada for respon
dent.
The following is the English version of the reasons
for judgment rendered by
HUGESSEN J.A.:
Introduction
The applicants attack a decision by an adjudicator
appointed pursuant to sections 92 and 93 of the Pub
lic Service Staff Relations Act. 1 The applicants' griev
ances concerned claims for overtime made by them
in 1986 and 1987. However, the grievances them-
R.S.C., 1985, c. P-35.
selves were not filed until December 1988 and
referred to adjudication in November 1989. The rea
son for this unusual delay is important and has conse
quences for the legal position of the parties.
Facts
In 1986 and 1987, at the time the two applicants
originally made their claims for overtime, they were
accepted by the employer. It was common ground
that at the time the employer had for some time given
the collective agreement a misinterpretation by which
an employee who agreed to do overtime was always
paid at time-and-a-half or double-time, depending on
the circumstances. The parties are now agreed in say
ing that this interpretation is not in keeping with the
wording of the collective agreement, which only
gives increased rates in certain specific circum
stances.
The two applicants are nurses and work at Cowans-
ville, Quebec in a Correctional Service of Canada
institution. During 1986 and 1987 the applicant
Ménard was called by the employer while she was on
statutory leave and on annual vacation and asked to
return to work; she was offered pay, as the case may
be, at time-and-a-half or double-time depending on
the circumstances. She accepted these offers and
worked on a number of her days of leave, for which
she was paid at the agreed rate.
In 1988, two years later, the employer realized that
the interpretation it had previously given the collec
tive agreement was in error. This is how the
employer explained its action in the reply it gave the
employee at the third level of the grievance process:
[TRANSLATION] It has been determined from an administrative
inquiry that, as the result of an improper application of your
collective agreement regarding the payment of overtime, you
were overpaid between June '86 and September '87 pay
equivalent to 35.5 hours of work at the basic rate.
This being so, the employer has no choice but to recover the
overpayment.
Contrary to your allegation, the employer's decision is in no
way illegal as it is based on section 156(3) of the Financial
Administration Act.
Your grievance is accordingly dismissed. [Appeal Book, at
page 4.]
In the case of the applicant Ouellette, the situation
is a bit different. He is ordinarily required to work a
lot of overtime. During the summer of 1986, the
employer asked him to act as "health chief' tempora
rily. Apparently, there was very little scope for over
time in performing the duties of this position.
Mr. Ouellette accordingly concluded an agreement
with his employer that he agreed to perform the
duties of "health chief' on condition that he could
still work overtime as a regular nurse as in the past.
According to the employee it was also agreed that
this work would be paid for at time-and-a-half or
double-time according to the circumstances, and this
was done.
Here again, the employer realized two years later
that part of the payment made to Mr. Ouellette was
above the rates provided for in the collective agree
ment. The employee, for his part, objected to the
employer's attempt to recover the "overpayment".
The employer's response at the third level of the
grievance process explains the handling of the mat
ter:
[TRANSLATION] It has been determined from an administrative
inquiry that, as the result of an improper application of your
collective agreement regarding the payment of overtime, you
were overpaid between June '86 and September '87 pay
equivalent to 128 hours of work at the basic rate.
This being so, the employer has no choice but to recover the
overpayment.
Contrary to your allegation, the employer's decision is in no
way illegal as it is based on section 156(3) of the Financial
Administration Act.
Your grievance is accordingly dismissed. [Appeal Book, at
page 11.]
Grievances
Before the adjudicator the applicants relied on the
principle of estoppel, a common law principle that a
party who by his words or actions induces another
party to act to his detriment cannot then change his
position and go back on his word, thus profiting from
the error caused by himself.
The adjudicator dismissed the grievances: hence
the appeal at bar.
Adjudicator's jurisdiction
In this Court the respondent argued that the adjudi
cator lacked jurisdiction to hear the applicants' griev
ances, and that the Court can therefore only dismiss
the section 28 [Federal Court Act, R.S.C., 1985, c.
F-7] application.
The adjudicator's jurisdiction is based on sec
tion 92 of the Public Service Staff Relations Act,
which limits the cases which can be the subject of a
grievance by an employee to claims originating in:
92....
(a) the interpretation or application in respect of the
employee of a provision of a collective agreement or an
arbitral award, or
(b) disciplinary action resulting in discharge, suspension or
a financial penalty,...
The respondent argued that the applicants now
admit that the collective agreement does not entitle
them to pay at time-and-a-half or double-time every
time they are required to work outside their regular
working hours or during their leave periods. That
being so, there is no further dispute as to the interpre
tation or application of the agreement and the appli
cants' remedy must lie elsewhere than in the griev
ance procedure and reference to adjudication.
With respect for the contrary view, I cannot accept
this argument. The very source of the dispute
between the parties is this erroneous interpretation
given by the parties to the agreement, and its
"improper application" to the applicants' case (the
expression is that used by the employer itself in its
reply to the grievances, quoted above). Had it not
been for this interpretation the applicants would
never have made claims for overtime, those claims
would never have been paid and the employer would
therefore never have tried to obtain reimbursement.
Since it is the attempt at recovery which led to the
grievances, there is a direct cause-and-effect relation-
ship between them and the interpretation and applica
tion of the collective agreement.
To put it another way, the applicants' contentions
are based on the principle of estoppel, that is on the
argument that by its words and deeds the employer
induced them to act to their detriment. However, the
words and deeds in question relate only to the inter
pretation and application of the collective agreement,
and a dispute as to their consequences necessarily
falls within the jurisdiction of the adjudication tribu
nal.
Further, the whole structure of labour relations
law, in both the public , and private sectors, tends to
favour recourse to arbitration and to discourage ques
tions of employer-employee relations from coming
before the ordinary courts of law. In my opinion it is
simply inconceivable that the instant case, involving
relations between an employer and its unionized
employees, who are governed by a collective agree
ment, should come . before any other tribunal than the
one specifically designated for the purpose by the
Act.
Adjudicator's decision on applicants' claims as made
As I have already said, the applicants based their
grievances on the principle of estoppel. In his deci
sion, the adjudicator rejected this argument as fol
lows:
[TRANSLATION] With regard to estoppel, there is no evidence
that the employer made a promise or commitment concerning
the amount to be paid. The commitment was simply that
Mr. Ouellette could work overtime. [Appeal Book, at page
174, reverse.]
It will at once be noted that the adjudicator says
not a word regarding Ms. Ménard's claim, though her
position is quite different. I will return to this below.
Counsel for the applicants argued that as to
Mr. Ouellette's claim the conclusion is quite simply
wrong and that the adjudicator failed to take account
of the employer's actions, which at law are just as
capable of constituting a promise or undertaking as
words are.
Personally, I do not think it is essential to examine
this problem any further as it seems to me that even
assuming that counsel is right, an essential part of
estoppel, namely the detriment, is lacking in the case
of Mr. Ouellette.
It will be recalled that all Mr. Ouellette did as a
consequence of the employer's alleged promise was
agree to be appointed to the position of "health chief"
on an acting basis. The evidence does not show (and
it is in any case very unlikely) that the salary attached
to that position was less than the one Mr. Ouellette
was receiving in his regular position. The objection
raised by the employee to the proposed acting
appointment was that the new position gave him less
opportunity for doing overtime. The employer then
promised him that he could do as much overtime in
the future as in the past, and it kept to that promise.
Whether the employer did or did not at the same time
promise that the overtime would still be paid for at
the time-and-a-half or double-time rate changes abso
lutely nothing, because Mr. Ouellette did not in any
way act to his detriment in relying on such a promise.
Before the alleged promise, Mr. Ouellette was work
ing as a full-time male nurse and was doing a lot of
overtime for which he was paid at a rate to which he
now admits he was not entitled. After the promise, he
accepted the "health chief" appointment but contin
ued doing overtime for approximately the same num
ber of hours a month at exactly the same rate. He
therefore did not lose anything in comparison with
his previous position. As the detriment, an essential
component of estoppel, was absent, the adjudicator
was right to dismiss his claim.
In Ms. Ménard's case, however, the situation is
different. In her case the evidence is clear and uncon-
tradicted that she agreed to give up her days of statu
tory leave and annual vacation solely because the
employer promised her pay at the time-and-a-half or
double-time rate.
The adjudicator failed to give a summary of the
gist of Ms. Ménard's evidence and this Court author
ized that the case be amended to add an affidavit
from someone who was present at the hearing before
the adjudicator. The substance of this affidavit, which
was not contradicted or objected to by the respon
dent, is as follows:
7. [TRANSLATION] During Miss Ménard's examination-in-chief,
she mentioned that when she was called and asked to return to
work during her vacation time, leave time or statutory leave,
she was always told the number of hours' overtime to be done.
Additionally, she was told that the hourly rate for this overtime
would be time-and-a-half or double-time.
8. Miss Ménard also testified during her examination-in-chief
that she had worked at Cowansville since February 1983 and
that the practice regarding call-back procedure as well as com
pensation for overtime existed at that time, and she actually
thought they had existed before she held the job.
9. Miss Ménard also testified in her examination-in-chief that
she would not have accepted the employer's call-back if she
had been told she would have to work at the basic rate, not the
overtime rate.
10. Miss Ménard also testified in her examination-in-chief that
she relied on the employer's promise to pay for the overtime, a
promise which was made during the telephone calls asking her
to return to work. She indicated that she would not otherwise
have returned.
11. In her cross-examination, Miss Ménard testified that she
did not dispute the interpretation made by the employer of the
provisions contained in the collective agreement regarding
compensation for overtime. What she was objecting to was the
retroactive application of this interpretation when she was spe
cifically told at the time of the call-back that she would be paid
at the overtime rate and she agreed to work on that condition.
[Appeal Book, Appendix, at page 2.]
The respondent did not argue in this Court that the
collective agreement entitled her to require an
employee to work against his or her wishes outside
the regular working hours. The collective agreement
itself contains no express provision to this effect.
Overtime was accordingly voluntary and it is this fact
that clearly distinguishes the cases of the two appli
cants.
It will be recalled that Mr. Ouellette wanted to do
overtime and that it was the employer's promise that
he would not be deprived of the opportunity of doing
so which caused him to accept his new position. In
Ms. Ménard's case, however, she was called back to
work during her periods of statutory leave or vaca
tion and would not have agreed to return but for the
employer's promise that she would be paid at the
time-and-a-half or double-time rate. This then is the
detriment which, as I noted above, is of the very
essence of the principle of estoppel.
The injury done to Ms. Ménard does not lie in the
fact that she did work for which she was not entitled
to be paid except under the very terms of the collec
tive agreement, terms which we now know are differ
ent from what the parties thought they were at the
time. Instead, it is that the employee did work which
she was not obliged to do and which she would ordi
narily not have wanted to do. She only agreed to do it
against her wishes in reliance on the employer's
promise that she would be paid at the higher rates.
Accordingly, I conclude that on the basis of the
claim as made before him and in this Court, the adju
dicator made an error of law and that he should have
allowed Ms. Ménard's grievance and given her the
benefit of the principle of estoppel.
Application of principle of estoppel in Quebec
However, a point of law of vital importance arises
here, though it seems to have completely escaped the
parties, their counsel and the adjudicator.
The entire dispute between the parties arose in
Quebec. To the extent that the relations between the
parties are not governed'by the collective agreement
or by the Public Service Staff Relations Act they are
subject to the civil law of Quebec. The principle of
estoppel derives from the common law.
How does this affect the very basis of the appli
cants' claim?
In my opinion, there are two possible answers to
this question.
The fin de non-recevoir
To begin with, although the principle of estoppel is
not part of our civil law, it bears a close resemblance
to several aspects of the civil law concept of the fin
de non-recevoir. This is what Beetz J. said about it,
speaking for the Supreme Court:
There is nonetheless no question that fens de non-recevoir do
exist in Quebec civil law and are sometimes confused with
estoppel, despite the warning of Mignault J. in Grace and
Company v. Perras [(1921), 62 S.C.R. 166], at p. 172:
... I venture to observe that the doctrine of estoppel as it
exists in England and common law provinces of the Domin
ion is no part of the law of the Province of Quebec. This,
however, does not mean that in many cases where a person
is held to be estopped in England, he would not be held lia
ble in the Province of Quebec. Article 1730 of the civil code
is an example of what, in England, is referable to the princi
ple of estoppel, and where a person has by his representation
induced another to alter his position to his prejudice, liability
in Quebec could be predicated under articles 1053 and fol
lowing of the civil code. Whether such liability could be
relied on as a defence to an action, in order to avoid what
has been called a "circuit d'actions," is a proposition which,
were it necessary to discuss it here, could no doubt be sup
ported on the authority of Pothier. May I merely add, with
all due deference, that the use of such a word as "estoppel,"
coming as it does from another system of law, should be
avoided in Quebec cases as possibly involving the recogni
tion of a doctrine which, as it exists today, is not a part of
the law administered in the Province of Quebec. 2
Like the Supreme Court, the Quebec Court of
Appeal 3 and the arbitration tribunals sitting pursuant
to the Quebec Labour Code [R.S.Q. 1977, c. C-27] 4
have often adopted and applied the principle of estop-
pel under the guise of a fin de non-recevoir.
It is therefore not impossible to maintain that the
employer's conduct, in promising Ms. Ménard addi
tional pay if she would agree to give up her vacation
and statutory leave, is under Quebec law a fin de non-
recevoir the effect of which is to bar the employer
from now trying to recover the benefits it conferred
on its employee (the higher rate of pay) while retain
2 National Bank of Canada (Canadian National Bank) v.
Soucisse et al., [1981] 2 S.C.R. 339, at pp. 360-361.
3 See Sinyor Spinners of Canada Ltd. c. Leeson Corp.,
[1976] C.A. 395 (Qué.); Cerundolo c. Val-Barette (Corp. mun.
de), [1986] R.D.I. 796 (C.A. Qué.); Syndicat national des tra-
vailleurs des pâtes et papiers de Port-Alfred c. Lippé, [1990]
R.D.J. 124 (C.A. Qué.).
4 See Claude D'Aoust and Louise Dubé, L'estoppel et les
laches en jurisprudence arbitrale, École de relations indus-
trielles, Université de Montréal, 1990; especially at pp. 155 to
166.
ing for itself the consideration it received (the non-
compulsory work during the vacation periods).
Unjust enrichment
However, there is another way of looking at the
problem which I find to be clearly preferable because
it is a purely civil law approach.
The facts of the case at bar lend themselves
extraordinarily well to application of the concept of
unjust enrichment or the action de in rem verso. This
concept is now firmly implanted in both Quebec legal
theory and case law. 5
Five conditions are generally recognized as being
essential for an action to lie: enrichment of the
debtor, impoverishment of the creditor, a connection
between the two, the absence of legal justification
and the absence of any remedy at law.
All these conditions are met in the facts of the case
at bar so far as Ms. Ménard's claim is concerned. She
was impoverished because she lost the benefit of her
days of statutory leave and vacation when she was
under no obligation whatever to return to work. On
its part, the employer was enriched because it
received the benefit of its employee's labour, labour
which it had no right to require of her. The connec
tion between the two is obvious.
As to the absence of justification, we now know
that the rate of pay promised the employee by the
employer was not consistent with that stated in the
collective agreement: the two parties acted under a
mutual error of law. That error, which by definition
amounts to the denial or the absence of a cause in the
legal sense, is at the very source of both the enrich
ment of the one and the impoverishment of the other.
The error, as such, clearly cannot give rise to rights:
the employees who did overtime are not entitled to be
paid at any rate other than that specified in the agree
ment. However, that same error can establish beyond
any doubt the absence of any legal justification for
Ms. Ménard giving up her days off and for the
employer benefiting therefrom.
5 See as to this in general Jean-Louis Baudouin, Les obliga
tions, Nos. 410 to 436.
Finally, no other remedy is possible in the circum
stances.
Conclusion
I therefore conclude that Ms. Ménard's claim,
whether seen from the standpoint of common law
estoppel or that of civil law unjust enrichment, is
valid in both cases. The adjudicator erred in dis
missing it.
I would allow the section 28 application, set aside
the adjudicator's decision as to Ms. Ménard's claim
and refer the matter back to the adjudicator to be
again decided by him on the basis that this claim is
valid.
Desjardins J.A.: I concur.
* * *
The following is the English version of the reasons
for judgment rendered by
PRATTE J.A. (dissenting): The applicants are asking
the Court to set aside pursuant to section 28 of the
Federal Court Act a decision of an adjudicator pursu
ant to the Public Service Staff Relations Act which
dismissed the grievances filed by them.
The applicant Ouellette is a male nurse; the appli
cant Ménard is a female nurse. They are both Public
Service employees and work in Cowansville, prov
ince of Quebec, in a Correctional Service of Canada
institution. At the time in question their working con
ditions were covered by the collective agreement
made on July 9, 1986 between the Treasury Board
and the Professional Institute of the Public Service of
Canada.
It appears that the Correctional Service officials
realized in late 1987 that nurses working at the
Cowansville institution had been paid at a higher rate
than that provided for in the collective agreement for
hours of work done during their vacation or days of
leave. As the result of a mistake in interpreting the
agreement, all these hours of work were apparently
treated as overtime when they were not. A check was
made followed by calculations of the amounts each
employee had received between June 1986 and Sep-
tember 1987 over and above what he or she was enti
tled to under the collective agreement, and claims
were sent to those who had been overpaid. Accord
ingly, on November 9, 1988 Michel Ouellette
received a notice informing him he had been over
paid for the equivalent of 128 hours of work at the
regular rate, for which he would have to reimburse
the employer; on the same day, a claim for reim
bursement of the equivalent of 35 hours of work was
made to Andrée Ménard. After receiving these
notices the applicants, as required by the notices they
had been given, made the necessary arrangements
with their superiors for the reimbursement of these
amounts, and on December 14, 1988 each of them
filed a grievance objecting to the employer's decision
to require reimbursement of the amounts which they
had been paid by mistake.
The case was sent to adjudication and the evidence
before the adjudicator apparently disclosed the fol
lowing:
1. Since 1982 the practice in Cowansville had been to
pay for the work done by nurses during their days of
leave or vacation at time-and-a-half for the first day
and double-time thereafter; work during days of
leave and vacation was treated as voluntary for the
nurses (although it appears that under the agreement
it was compulsory); when a nurse was called back to
work the practice was he or she would be told by
telephone whether the payment would be at time-and-
a-half or at double-time.
2. The applicant Ouellette had always done a good
deal of overtime during his vacation and days of
leave; in 1986 he was asked if he would agree to fill
the position of "health chief' on an acting basis; as
the incumbent of this position ordinarily did not do
overtime, Ouellette only agreed to accept the duties
after receiving an assurance from his head of section
that he would continue to do overtime as before.
3. Each time the applicant Willard was called back to
work during her leave or vacation, she was told the
amount of pay she would be receiving and she would
not have agreed to be called back to work if she had
known she would be paid at the regular rate.
Before the adjudicator, the applicants adduced the
principle of promissory estoppel, contending that
after encouraging them to work during their vacation
and leave by telling them that they would be paid
time-and-a-half or double-time, the employer could
not then maintain that they were not entitled to such
pay. Counsel for the employer relied simply on sec
tion 155(3) of the Financial Administration Act
[R.S.C., 1985, c. F-11], which authorizes the
Receiver General to "recover any over-payment
made out of the Consolidated Revenue Fund on
account of salary, wages, pay or pay and allowances
out of any sum of money that may be due or payable
by Her Majesty in right of Canada to the person to
whom the over-payment was made."
The adjudicator dismissed the grievances on
grounds which he stated concisely as follows:
[TRANSLATION] Subsection 155(3) of the Financial Adminis
tration Act states that the Receiver General, i.e. the employer,
may recover any overpayment made out of the Consolidated
Revenue Fund on account of salary, wages, pay or pay and
allowances. The employer has discretion either to exercise or
not to exercise its recovery authority. If it chooses to do so, it
cannot be prevented from proceeding, unless it is proved that
the employer specifically agreed to reduce its authority through
the collective agreement. This is not the case here.
With regard to estoppel, there is no evidence that the
employer made a promise or commitment concerning the
amount to be paid. The commitment was simply that
Mr. Ouellette could work overtime.
The employer therefore had the right to recover the overpay-
ment and the grievances are therefore dismissed.
7t is not in dispute that, in accordance with a recent
ruling by the Supreme Court, 6 an adjudicator's deci
sion can only be revised if he has exceeded his juris
diction or has erroneously exercised it in a patently
unreasonable manner. The applicants did not argue
that the adjudicator had infringed any rule setting the
limits of his powers; instead, they maintained that he
had made patently unreasonable errors, first, by
6 Canada (Attorney General) v. Public Service Alliance of
Canada, [1991] 1 S.C.R. 614.
assuming that there could be promissory estoppel in
the absence of an express commitment, verbal or in
writing, by the employer, and second, by not taking
into account the uncontradicted evidence that nurses
called back to work during their days of leave or
vacation were always told what pay they would be
receiving if they agreed to return to work.
In my opinion, these arguments by the applicants
must be dismissed because even if the adjudicator
had not made the errors alleged, he should still have
dismissed the applicants' grievances on the ground
that he had no jurisdiction to rule on the arguments
submitted by them.
I should note here that under section 2 of the Pub
lic Service Staff Relations Act, a collective agreement
is an "agreement in writing" and under subsection
92(1) of that Act, a grievance cannot be referred to
adjudication unless it is a grievance of an employee
concerning
92....
(a) the interpretation or application in respect of the
employee of a provision of a collective agreement or an
arbitral award, or
(b) disciplinary action resulting in discharge, suspension or
a financial penalty,...
Clearly, the applicants' grievances did not relate to
disciplinary action and so they must have had to do
with the interpretation or application of the collective
agreement governing their working conditions. A
grievance involves interpretation of the agreement
when the employee alleges that the employer has
given a clause of the agreement a meaning that it
does not have; it involves application of the agree
ment when the employee maintains that the employer
was wrong to believe in the existence of facts which,
if they had existed, would have justified the applica
tion of a clause of the agreement the meaning of
which is not in dispute. In both cases, the employee is
alleging that the employer infringed the agreement.
An adjudicator's jurisdiction is accordingly limited to
determining whether the employer infringed the col
lective agreement as the employee contends.
What was the applicants' grievance in the case at
bar? They complained that the respondent had
required them to reimburse money which they had
been paid by mistake in addition to the money pro
vided for in the collective agreement. In making this
claim, the respondent was not applying the collective
agreement: she was simply applying the rules of the
ordinary law regarding the reimbursement of a pay
ment which she said had been made by mistake. The
only case in which this claim could have been a
breach of the agreement is where the money claimed
had in fact been paid in accordance with the agree
ment: in such a case, the respondent would have used
the rules of the ordinary law to deprive the applicants
of a benefit conferred on them by the collective
agreement. However, that was not the position of the
applicants, who admitted that the collective agree
ment did not entitle them to receive the money in
question. Their only argument was that the respon
dent could not claim reimbursement of this money
because of the representations and promises made to
them to encourage them to work during their vacation
and days of leave. Even if we assume, as the appli
cants alleged, that these promises and representations
had the effect of either requiring the respondent to
pay more than was provided for in the agreement or
of preventing her from claiming reimbursement of
what she had wrongly paid, the fact remains that
these are arguments that have nothing to do with the
collective agreement which the adjudicator was
responsible for interpreting and applying. Even if the
adjudicator had accepted these arguments, he could
not have concluded that the collective agreement had
been misinterpreted or wrongly applied; accordingly,
he could not allow the grievances.
I would dismiss the application.
I would add a word to explain why I did not think
it proper to discuss the theory of promissory estoppel.
The case arose in the province of Quebec where the
civil law, unlike the common law, recognizes the
validity of a mere contractual promise without the
recipient having to give any consideration for the
promise. As promissory estoppel is only an allevia
tion by the courts of the traditional common law rule
relating to consideration, there is no need to mention
it in a case involving promises made and accepted in
Quebec.
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.