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Judge declines to award special costs in case where unionized employee sued employer in court

The BC Supreme Court judge in Johnston v. Surrey (City), 2009 BCSC 1520, refused to award special costs in a case where a unionized employee filed a lawsuit in court against his employer alleging constructive dismissal.

Background

The long term employee filed a lawsuit in spring 2008 against the defendant employer (and a named individual) alleging that he was constructively dismissed.

Upon receipt of the Statement of Claim, the employer advised the employee of its position that:

  1. the circumstances giving rise to the constructive dismissal - a layoff -  occurred in 1995 and 1996 and thus were time barred by the limitation period set out in the BC Limitation Act; and
  2. the employee was a unionized employee and therefore the claim was not within the jurisdiction of the court.

The employee further requested that the Claim be withdrawn failing which the employer would bring an application to strike the Claim pursuant to Rule 19(24) and seek special costs

During the subsequent negotiations, the employee agreed to discontinue its court action on the employer's desired terms, except in relation to the employer's terms around costs.  Specifically, the employer had advised that it would it waive its application for special costs
if the employee signed a release of claims against the employer and its employees, past and present, as well as the union and its representatives.

The employee would not agree to this release as he wished to file a duty of fair representation complaint against his union under section 12 of the BC Labour Relations Code.

The employer eventually brought its application to have the Claim struck and for special costs.

Court's Decision

The court agreed that it did not have jurisdiction to deal with the dispute as it arose from the collective agreement.

However, the court declined to award special costs against the employee, given that the employer had insisted that the employee sign a release of claims that not only covered it, but that also the union and its representatives and obliged the employee to dismiss all claims against the union and its representatives.

In such circumstances, the court concluded that it could not find that the employee had displayed reprehensible conduct deserving of reproof or rebuke, as required in the test out by the BC Court of Appeal in Garcia v. Crestbrook Forest industries [1994] 9 B.C.L.R. (3d)
242
.

The court then took it one step further by awarding costs of the application to the employee in the amount of $390 inclusive of disbursement.

Comment

As noted in the decision, the Supreme Court of Canada established in Weber v. Ontario Hydro [1995] 2 S.C.R. 929 and New Brunswick v. O'Leary , [1995] 2 S.C.R. 967, that the courts do not have jurisdiction to deal with matters that arise out of the interpretation, application, administration or alleged violation of a collective agreement. Rather, labour arbitrators have exclusive jurisdiction over such matters.  

Special costs are awarded under section 57(3) of the Rules of Court.