Author: Jesse Dunning, Lawyer

The Perils Of Parallel Proceedings:  Issue Estoppel In The Employment Context

In British Columbia, It is relatively common for dismissed employees to pursue claims against employers in a variety of venues, including the Employment Standards Branch, WorkSafeBC, the Civil Resolutions Tribunal, the Human Rights Tribunal, and both the Provincial and Supreme Courts of British Columbia.  Frequently these proceedings are started at the same time and run parallel to each other.

What both employees and employers do not always appreciate, however, is that findings made in one venue can critically impact findings in other venues, through the doctrine of issue estoppel.

The potential impact of issue estoppel is amply demonstrated in the recent decision of the Human Rights Tribunal in Christensen v Save-A-Lot Holdings Corp. (No. 2), 2021 BCHRT 91.

Christensen involved a case where the complainants were employees at a car dealership who, along with their father (the manager of the dealership), had been terminated by their employer.  The termination led to a number of proceedings, including a complaint before the Employment Standards Branch, a complaint before the Human Rights Tribunal, and an action in Supreme Court of BC by the employer against the complainants and their parents.  At the time the HRT decision was rendered, the complainants’ claims had succeeded before the ESB and been unsuccessfully appeal by the employer at the Employment Standards Tribunal, in a decision indexed as Save-A-Lot Holdings Corp., 2020 BCEST 140.  The HRT claim and fraud action were still unresolved.

The ESB had made a number of findings as to the complainants’ employment status, termination and rate-of-pay which the complainants argued were binding on the HRT.  A key finding before the ESB was that the complainants were employees who had been terminated without cause. The employer wished to take the position before the HRT--contrary to the findings of the ESB/EST--that the complainants were not bona fide employees.

In Christensen, the HRT chose to apply the doctrine of issue estoppel, foreclosing the employer from advancing the defense they wished to argue at the hearing, and demonstrating the significant impact that findings in one venue can have over parallel proceedings through the doctrine of issue estoppel.

The Doctrine of Issue Estoppel

Issue estoppel is a legal doctrine whereby a party is prevented or ‘estopped’ from arguing in one proceeding against a finding made in an earlier proceeding.

At its heart, issue estoppel is concerned with preserving the integrity of the judicial system by preventing inconsistent findings between judicial and administrative bodies when they are adjudicating similar matters between the same parties.  The principle justification is that if multiple judicial or quasi-judicial bodies consider the same matter and come to opposing conclusions, it creates an obvious contradiction that both harms confidence in the judicial process and works significant injustice against the parties to the proceedings.

In the leading case of Danyluk v Ainsworth Technologies Inc., 2001 SCC 44, the Supreme Court of Canada set out three questions that must be answered in the affirmative in order for the doctrine of issue estoppel to apply:

• Was the same question decided?
• Was the judicial decision said to create the estoppel final?
• Were the parties the same in both proceedings?

Even if these conditions are met, issue estoppel is not automatically applied to the proceeding, as a tribunal or court can decline to apply issue estoppel in appropriate circumstances. The Court in Danyluk found that the following non-exhaustive list of factors should be considered when applying the doctrine of issue estoppel to findings made by administrative bodies:

• The wording of the statue from which the power to issue the administrative order derives;
• the purpose of the legislation;
• the availability of an appeal;
• the safeguards available to the parties in the administrative procedure;
• the expertise of the administrative decision maker;
• the circumstances giving rise to the prior administrative proceedings; and
• Potential injustice.

The key and overriding factor is potential injustice.  In Christensen, the HRT found that it would be unjust to force the complainants to re-litigate their employment status when the Respondents had already unsuccessfully argued the issue before the ESB/EST, and where the Respondents had failed to raise the issue before the HRT prior to the application.

In practice, the most common reason that a court will find injustice in applying issue estoppel is where the process leading to the decision in the prior proceeding is fundamentally flawed, or where the stakes and the purpose of the processes in question diverge significantly.

In Danyluk, the Court found that issue estoppel should not apply, as the administrative tribunal in that case had failed to give the plaintiff an opportunity to meet the employer’s case.

In Penner v Niagara (Regional Police Services Board), 2013 SCC 19, the Supreme Court of Canada declined to apply issue estoppel, finding that the purposes, processes and stakes of a complaint under the Police Services Act were so different from those of the plaintiff’s civil action that it would be unjust to apply issue estoppel.

Takeaways

Both employees and employers should understand that findings made before a tribunal or court can have a significant impact on parallel proceedings.  In order to reduce the risk of unwelcome findings, parties should ensure that their positions are consistent between proceedings, and carefully consider the impact of failing to fully advance their case in each proceeding.  On the other hand, parties should be aware of the significant benefits to a favourable finding in an earlier proceeding, and consider early applications on the applicability of issue estoppel, as success on such an application may simplify or entirely resolve their dispute, saving both time and legal fees.

Note to Readers: This is not legal advice. If you are looking for legal advice or have any questions regarding how this holiday affects employers and employees in BC, please contact the Employment & Labour Group.

Jesse Dunning is a dedicated litigator, whose areas of practice include employment/human rights law, estate litigation, and general litigation.  As part of his employment law practice, Jesse assists both businesses and employees with terminations, employment contracts, discrimination complaints and all manner of other employment issues. If you have any questions or wish to learn more about Jesse, click here.

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