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Client Update: Supreme Court of Canada confirms that international organization enjoys immunity from wrongful dismissal suit commenced by senior employee

In a decision that will largely be of interest to international organizations that have been granted some type of immunity in Canada, the Supreme Court of Canada (SCC) has confirmed that international organizations enjoy immunity with respect to wrongful dismissal suits launched by senior employees in Canadian courts: Amaratunga v. Northwest Atlantic Fisheries Organization (NAFO), 2013 SCC 66.

John Shanks, a partner and member of Stewart McKelvey’s Litigation group and Rick Dunlop, a partner and member of Stewart McKelvey’s Labour & Employment group successfully represented NAFO at the SCC and the Nova Scotia Court of Appeal.

A. The Policy Rationale for International Organization Immunity
NAFO, an international organization, enjoys immunity pursuant to an Immunity Order, under the Foreign Missions and International Organizations Act (“FMIO Act“). The Immunity Order, among other things, provides that NAFO enjoys immunity from Canadian law “to such extent as may be required for the performance of its functions.” Although the interpretation of the Immunity Order’s language played a predominant role in the SCC’s decision, the SCC made clear that there was a compelling policy rationale for international organization immunity, which will inform the interpretation of grants of immunity to other international organizations:

In the case of international organizations, unlike that of states, the prevailing view at present is that no rule of customary international law confers immunity on them. International organizations derive their existence from treaties, and the same holds true for their rights to immunities… Such an organization must operate on the territory of a foreign state and through individuals who have nationality and is therefore vulnerable to interference, since it possesses neither territory nor a population of its own… This reality makes immunity essential to the efficient and independent functioning of international organizations. It also shapes the immunities and privileges that are granted to international organizations. Such immunities and privileges are created through a complex interplay of international agreements and the national law of host states.

International organizations that have been granted some type of immunity under the FMIO Act, but do not necessarily have the same wording as the NAFO Immunity Order, can take some comfort that their grants of immunity will likely be interpreted broadly based upon the following SCC statement that is broken out into bullet points:

  • “Thus, Parliament’s objective in enacting the FMIO Act was, where international organizations are concerned, to modernize the rules respecting the immunities and privileges it could grant them.”
  • “This was done both to reflect recent trends in international law and to make Canada an attractive location for such organizations to establish headquarters or offices. To limit the immunity granted in s. 3(1) as narrowly as the appellant proposes would run counter to Parliament’s objectives of modernization, flexibility and respect for the independence of international organizations hosted by Canada.”
  • “It bears repeating at this point that immunity is essential to the efficient functioning of international organizations. Without immunity, an international organization would be vulnerable to intrusions into its operations and agenda by the host state and that state’s courts.”

The SCC dismissed all arguments claiming that NAFO should not enjoy immunity because the Appellant “was left without a forum to air his grievances and without a remedy.” The SCC said that “it is an inevitable result of a grant of immunity that certain parties will be left without legal recourse, and this is a “policy choice implicit” in the [FMIO]…”

B. Limits to International Organization Immunity
There are limits to the immunity that international organizations will enjoy in the labour and employment sphere:

1. Immunity May Not Apply to All Employees
As is evident from the following statement, broken out into bullet points, the decision confirms that immunity will apply to those holding senior positions in the international organization. The decision was less definitive as to whether immunity will apply to those employees holding lower level positions:

  • “The appellant was the Deputy Executive Secretary of NAFO, the second-in-command in the Secretariat.”
  • “He directly supervised other staff and was responsible for the scientific aspect of NAFO’s mission. That alone would be sufficient to conclude that immunity is required in this case in order for NAFO to perform its functions.”
  • “NAFO must have the power to manage its employees, especially those in senior positions, if it is to perform its functions efficiently.”
  • “To allow employment-related claims of senior officials to proceed in Canadian courts would constitute undue interference with NAFO’s autonomy in performing its functions and would amount to submitting its managerial operations to the oversight of its host state’s institutions.”

The pleadings (or context in which litigation is commenced) may also play a role in the determination of the application of immunity. In its decision, the SCC referred to the Appellant’s Statement of Claim which alleges that the Deputy Executive Secretary “engaged in improper management practices” and claimed punitive damages. The SCC was satisfied that as a result of such pleadings that the Appellant was “asking the Nova Scotia Supreme Court to pass judgment on NAFO’s management of its employees… [which would] constitute interference with NAFO’s internal management, which goes directly to its autonomy.”

2. Immunity Will Not Apply to Contracts of Employment
The SCC did permit the Appellant’s claim for monies owed under the NAFO Staff Rules. These Staff Rules provided for a separation indemnity. The SCC reasoned that enforcement of the Staff Rules “would not amount to submitting NAFO’s managerial operations to the oversight of Canadian courts.”

Accordingly, international organizations should anticipate that they will not enjoy immunity from any contractual obligation that may have been created by way of employment contract or workplace policies that speaks to, among other things, severance entitlements.

  1. Principles in favour of immunity may extend to non-employment related matters
    While this decision involved a claim for wrongful dismissal, the principles adopted by the SCC and the wording of most grants of immunity from Canadian law are not confined to the area of employment relationships. In assessing the potential impact which a grant of immunity may have upon a claim against an international organization, the SCC has confirmed that the wording of the grant of immunity, interpreted through the broader context of international law, will govern whether a claim can be advanced. In the case of the grant of immunity provided to NAFO the reasoning of the SCC can be used to suggest immunity from a wide range of legal claims which if advanced could restrict NAFO’s functioning.

The foregoing is intended for general information only and is not intended as legal advice. For further information on this case, please contact Rick Dunlop or John Shanks.

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