Prerogative in Private and Public Employment
Douglas Stanley *
It has often been noted that there is a difference between public
and private employment. It is my contention that all the differences
frequently cited are but manifestations of one essential difference.
That difference is that, though there are elements of contract and
status in each, in private employment the contractual element
predominates, while in public employment status predominates.
One appreciates the full significance of this fact when an attempt
is made to trace the history of management’s right to direct
its employees and the development of what is often referred to
as management prerogatives. If management does exercise some
inherent authority in unchartered areas, that authority can only come
from the exercise of some power or contractual right over employees.
In the private sector, management exercises contractual rights over
employees but in some instances also exercises a power over em-
ployees that has no relationship to the contractual arrangement
between the employer and his employee. On the other hand, in public
employment, the essence of the relationship resides in the exercise
of power inherent in the public employer, with the caveat that there
may be contractual or legislative limitations on the exercise of this
power.
Private Employment
The modern law of private employment has evolved as a result
of the changing human relationships brought on by the development
of a class of freemen, as distinct from serfs, and the Industrial Revo-
lution.’ The modem, legal concept of employment was a result of
applying contract doctrine to the older relationship of master and
servant.2 This relationship developed out of serfdom and status
rather than contract 3 and some aspects of status remained in the
Faculty of Law, University of New Brunswick.
See Carrothers, Collective Bargaining Law in Canada (1965); Fridman,
The Modern Law of Employment (1963); Selznick, Law, Society and Industrial
fustice (1969), 121-137; Wedderburn, The Worker and the Law (1965), ch. 5.
2 See Selznick, supra, f.n.1, 122-137.
3 See Fridman, supra, f.n.1, 30.
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PREROGATIVE IN EMPLOYMENT
evolution from serfdom to master-servant. Thus, though the parties
contract in the ordinary sense on some matters such as wages, a great
many terms and conditions are implied by law rather than set by
mutual agreement The essence of the relationship is captured by
Selznick, where he states that:
The old law of master-servant looked to the household as a model and
saw in its just governance the foundations of an orderly society. The
household model made sense in an overwhelmingly agricultural economy
where hired labour, largely permanent, supplemented the work of the
family members and all were subject to the authority and tutelage of
the father-manager. The model also fit the early pattern of work and
training among skilled artisans. In this setting, the relation of master and
servant was highly diffuse and paternalistic. Work was carried out in the
house of the master or in a small shop nearby. The workman lived as a
member of the household and often remained for life with the same
master. It was against this background that the law of master-servant
developed.5
As the theory of employment evolved, a “contract” of service was
said to arise whenever one person agreed to serve another.6 There
were attached to this relationship certain legal attributes, the most
important being the right of the master to command and the obliga-
tion of the servant to obey.1 This attribute has continued in the mo-
dern contract of employment and has become the touchstone of man-
agerial prerogative. “ITihere can be no employment relationship with-
out a power to command and a duty to obey, that is without this
element of subordination in which lawyers rightly see the hallmark
of the ‘contract of employment’ “.”
If the relationship in law is one of contract, then management
has only those rights agreed upon by the parties to the contract. Thus
in theoretical terms management can be said to be exercising its
contractual rights in cases where it discharges or disciplines an
employee. All this, however, assumes that the parties are free to
bargain and contract from more or less equal positions of strength.
This is, of course, not always the situation in the employer-employee
relationship. Management’s ability to act in an arbitrary manner
stems not from its contractual rights but from its position of relative
economic strength. Management has power. The fact that the em-
4 See Selznick, supra, f.n.1, 123; Selznick likens the relationship to that of
marriage, which may be entered into voluntarily but whose character is fixed
by the law.
5 Selznick, supra, fn.1, 123.
0 Fridman, supra, f.n.1, 17.
7 See Yewens v. Noakes (1880), 6 Q.B.D. 530; R. v. Negus (1873), L.J.M.C. 62;
8 Kahn-Freund, Labour and the Law (1972), 9.
Simmons v. Heath Laundry Co., [1910] 1 K.B. 543.
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ployer-employee relationship has been put into contractual terms,
however, disguises that power. When management exercises its
power in discharging, suspending, fining or otherwise acting against
the interests of its employee, it is often under the guise of a right in
contract, when in fact there was never any question of the employee’s
ability to bargain over the exercise of that right. Consequently man-
agement, in the private sector, has come to assume a great many
rights over employees to be management prerogatives, exercisable
at will.
The right to discharge has been described as the principal source
of the employer’s power over his employee.” At common law, the
discharge of an employee was possible in two instances: where there
was just cause an employee could be discharged summarily; where
there was no cause he could be discharged on proper notice. Both
situations arise from an exercise of contractual rights real or implied,
not from any inherent right to discipline an employee although, to be
sure, the motive for discharge may be a desire to discipline in the
punitive sense of that word. It is not uncommon for discharge to be
referred to as the ultimate disciplinary sanction.’? It is submitted,
however, that this is misleading insofar as motives are not a pertinent
factor in the analysis of the exercise of contractual rights.
Earlier texts and cases suggest that at one time it was justifiable
to discipline (or chastise, as it was then called) an apprentice, who
stood in a relationship similar to that of a hired servant.” Wedder-
burn suggests that this was because of the quasi-parental nature of
the relationship 2 and such an explanation is in keeping with its
historic development. In 1906 Smith was able to write in his text on
master-servant that “notwithstanding passages which may be found
in books apparently to the contrary, no master would be justified in
even moderately chastising a hired servant of full age for dereliction
of his duty”. 13 Carrothers writes as follows:
There does not appear to be any common law authority for the proposition
that an employer has power to discipline an employee. Such powers at
best emanated from the old law of master-servant when the relationship
was considered to be one of domestic relations; even then the power
seems to have been confined to the power of a master over an infant
apprentice.’ 4
0 Blades, Employment at Will v. Individual Freedom; On Limiting the
Abusive Exercise of Employer Power, (1967) 67 Colum.L.Rev. 1404, 1405.
10 See Hepple & O’Higgins, Individual Employment Law (1971), 105.
11 Cooper and Wood, Outlines of Industrial Law 5th ed. (1966).
12 Wedderburn, supra, f.n.1, 75.
13 Smith, Master Servant 4th ed. (1886), 122.
14 Carrothers, Labour Arbitration in Canada (1961), 86.
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PREROGATIVE IN EMPLOYMENT
However, it is apparent from history that masters were in the habit
of disciplining their servants by various means, including corporal
punishment, 15 and that the habit lingered on.
The relationship of master-servant being contractual, the master,
at law, has no greater rights or remedies than are granted by law or
the contract. In fact, however, it would appear that masters did
impose a variety of disciplinary sanctions on servants who in most
cases, because of their relatively weak position, acquiesced in the
penalty. These penalties might range from overt fines, suspensions,
demotions or transfers to the less obvious withholding of bonuses,
awards and other advantages. From the beginnings of industrializ-
ation, the position of the servant and employee has been one of
economic dependence. 6 This dependence made the employee vulner-
able to extra-legal sanctions. This vulnerability to management’s
disciplinary action provided the impetus for legislative intervention
in the employment relationship. Thus the employee’s plight has been
alleviated somewhat by collective bargaining, which seeks to regulate
the disciplinary function rather than deny it, and, to a lesser extent,
by Labour Standards legislation. The hallmark of the relationship,
however, is still contract.
Public Employment
An understanding of management prerogative in public employ-
ment and the position of the public employee in Canada requires an
examination of the executive power of the government in relation to
its employees. The Civil Service as such is not a formally recognized
institution in the Canadian Constitution. The public employee is not
an employee of the legislative branch of government but rather of
the executive. 7 Inasmuch as Canada’s institutions have been modeled
on those of Great Britain it is necessary to look to the origins of the
public service in that country. Just as the modern private sector
employer-employee relationship has its historic roots in the master-
‘5 See Macaulay, I History of England, 424, where he states that 17th
century masters well born and bred were in the habit of beating their
servants; see also Bendix, Work and Authority in Industry (1956), ch. 2
passim.
16 See Kahn-Freund, supra, f.n.8, Introduction; Berle, Power (1969); Drucker,
The New Society (1950), ch. 8; Galbraith, American Capitalism 2d. ed., 114,
where he states that “because of his comparative immobility, the individual
worker has long been vulnerable to private economic power”; Blades, supra,
f.n.9, 1404; Woods, Ostry, and Zaidi, Labour Policy and Labour Economics in
Canada (1973), 498.
i7 Lyon and Atkey (eds.), Canadian Constitutional Law in a Modern Perspec-
tive (1970), 218; Hodgetts, The Canadian Public Service 1867-1970 (1973), 56-57.
McGILL LAW JOURNAL
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servant household model, so also does the public employment re-
lationship. The British Public Service can be viewed, in an historic
perspective, as an extension of the royal household and thus, insofar
as the executive branch is an extension of the monarchy, the focus
of direction and responsibility for the public service is a matter of
royal or executive prerogative.
Prerogatives of the Crown are preserved in Canada by the B.N.A.
Act. Sections nine and eleven provide that “[tihe executive govern-
ment and authority of and over Canada is hereby declared to continue
and be vested in The Queen” and that “[t]here shall be a Council to
aid and advise in the Government of Canada, to be styled the Queen’s
Privy Council for Canada”. Section 12 provides that all power,
authority and functions previously exercised by the Imperial Parlia-
ment or various provincial legislatures is to vest in and be exercisable
by the Governor General in conjunction with the Queen’s Privy
Council for Canada, until altered by the Parliament of Canada.
Further, section 131 specifically provides that:
Until the Parliament of Canada otherwise provides, the Governor General
in Concil may from time to time appoint such officers as the Governor
General in Council deems necessary or proper for the effectual Execution
of this Act.
The exercise of executive power in the federal government rests
on the royal prerogative as modified by constitutional practice and
legislation. 8 Thus the power to hire and direct the public service
resides in the executive, subject to its being restricted by Parliament.
Hodgetts divides the manner in which Parliament is capable of
restricting the executive in relation to the public service into three
categories. 10 First, it may limit the form of the service. He points out
that Parliament has, with the exception of the Privy Council Office,
statutorily created or recognized all the departments of government
and that it is unlikely that any new department would now be
created without statutory approval. Parliament has not, however,
gone very far in detailing the organization of the departments created
by statute. Indeed they are exceedingly brief, and apart from restrict-
ing patronage through the Civil Service Acti 9
a and extending col-
lective bargaining through the Public Service Staff Relations Act,19b
Parliament has shown little inclination to involvement in the detail
of administration. Second, it may assign duties and functions.
18 See Cheffins, The Constitutional Process in Canada (1969), ch. 4; Mallory,
The Structure of Canadian Government (1971), 137.
19 See Hodgetts, supra, f.n.17, 58.
i9a S.C. 1960-61, c.57.
10b R.S.C. 1970, c.P-35.
1974]
PREROGATIVE IN EMPLOYMENT
Though this power must reside in Parliament, Hodgetts points out
that the exercise of the power by Parliament is an administrative
impossibility and that it must delegate broad responsibility to the
executive. The third category of Parliamentary restriction is in the
area of managerial authority. Again, Hodgetts points out that though
Parliament in theory can exercise ultimate authority, managerial
authority is delegated to or assumed by the executive. Through the
provisions of the Financial Administration Act 20 the Treasury Board2 l
is granted wide powers in establishing the terms and conditions of
employment in the public service22 Thus those powers in relation to
employees which rested on the royal prerogative may be exercised
by the executive branch of the Canadian government subject to
parliamentary restrictions. The legitimacy of the use of prerogative
power by the executive is said to lie in the fact that the source of
their power (as distinct from their authority) is political and de-
pendent on support in the House of Commons. Thus, if it is a part of
the Crown prerogative to dismiss employees at will, the executive
branch of the Canadian Government can, subject to restrictions
placed on it by the legislature, dismiss employees at will. The exercise
of the power is made legitimate by the support the executive has in
the House of Commons. However, it is important to recognize that
all this is subject to the will of the populace expressed through
Parliament. Thus Dr Saul J. Frankel, an authority on the Canadian
Public Service, was able to say that:
The people as sovereign may… hold their civil servants in virtual
bondage –
recruit them by conscription and maintain them in monastic
isolation; or they may grant them the right of association, provide
channels for mutual consultation, and even, if they will, accept as binding
the recommendations of a tribunal which owes its existence to the
sovereign’s caprice.2 4
The question then in examining managerial prerogatives in the
public service is, as Arthurs puts it, “whether or not the legislature
2 o Financial Administration Act, R.S.C. 1970, c.F-10.
21 For a history of the development of the Treasury Board see White and
Strick, Policy, Politics and the Treasury Board in Canadian Government (1970).
22 The Public Service Staff Relations Act, supra, f.n.19b, provides that the
Treasury Board rather than the Civil Service Commission is the bargaining
agent of the employer. The Civil Service Commission (or Public Service Com-
mission as it was renamed in 1967)
is more properly seen as an agent of
Parliament.
23See Cheffins, supra, f.n.18, ch. 2.
24 Frankel, Staff Relations in the Civil Service (1962), 13; the statement also
appears in Frankel, Staff Relations in the Public Service; The Ghost of
Sovereigny, (1959) 2 Can.Pub.Admin. 65, 67; the statement is cited and ap-
proved by Arthurs, Collective Bargaining by Public Employees in Canada: Five
Models (1971), 12.
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wished to preserve or abandon government’s traditional freedom of
unilateral action”, 5 and not simply one of unalterable prerogatives.
The terms and conditions of Crown employment in Canada are
established pursuant to legislative authority by the Treasury Board.
The Financial Administration Act establishes the Treasury Board,
which acts for the Queen’s Privy Council for Canada on all matters
relating to, inter alia, “personnel management in the public service,
including the determination of terms and conditions of employment
of persons employed therein”.2a The Treasury Board’s powers with
respect to the exercise of its responsibility in relation to personnel
management are extremely broad. They are set out in section 7 of
the Act and include the power to determine manpower requirements,
train, classify, determine pay and hours, establish standards of disci-
pline, establish standards for working conditions and other terms
and conditions of employment not specifically enumerated. Sub-
section (2) of section 7 provides that the Treasury Board may dele-
gate the exercise of any of these powers to a deputy minister or the
chief executive officer of any portion of the public service.
The exact legal nature of the Crown-servant relationship has
never been unquestionably established. The courts have not been
hesitant in finding a contract of employment to exist where a contract
document exists26 and there can be no doubt that the Crown has the
capacity to enter into an employment contract.27 In other instances,
however, particularly in the case of holders of civil service positions,
there is hesitation in finding a contractual relationship, real or
implied. In a recent British case, Inland Revenue Commissioners v.
Hambrook,28 a claim for damages for loss of services was disallowed,
partly on the basis that the relationship of master-servant did not
exist between the Crown and its employee. Lord Goddard said in that
case that “[a]n established civil servant, whatever his grade, is more
properly described as an officer in the civil employment of Her
Majesty…1._2
1 And further, after discussing the authorities that
favour a contractual relationship:
2 5 Arthurs, supra, f.n.24, 11; see also Mallory, The Structure of Canadian
Government, supra, f.n.8, 155-163.
215aR.S.C. 1970, c.F-10, s.5(1)(e).
2 6 See Dunn v. The Queen, [1896] 1 Q.B. 116.
27Mitchell, The Contracts of Public Authorities (1964).
28 1Inland Revenue Commissioners v. Hambrook, [19563 1 All E.R. 807.
20 Ibid., 810 per Lord Goddard.
1974]
PREROGATIVE IN EMPLOYMENT
It is I think fair to say that the trend of their Lordships’ opinion seem
to be that in the absence of some special term, such as engagement for
a definitely expressed period, there is not a contractual relationship. 30
There is some question about whether a contractual relationship
exists between the Crown and its servants. One is not able to present
thorough and reasoned arguments reconciling all the judicial opin-
ions.3′
In contrast to this uncertainty it can be said that the primary
aspects of the private employment relationship definitely arise out
of contract, though the rights and duties of each are not exclusively
determined by contract. We have seen, for instance, that Labour
Standards legislation prescribes minimum wages, hours of work,
standards of safety, vacations, compensation for loss of work through
accident and even security against loss of employment. The legislation
does derogate from the scope of the contractual relationship and
private employment has to this extent been aptly described as moving
from contract to status 2 Though this legislation seldom applies to
the Crown-servant relationship, that relationship is even more over-
shadowed by statute. The civil servant is more dependent on special
statutory provisions that establish his rights and duties in relation
to the Crown employer. His very position may be dependent solely on
statute. Arthurs has written of a new status emerging in the em-
ployment relationship, that of “industrial citizenship”. He uses the
term to describe the condition of the employee increasingly governed
by public and private legislation. The term is most apt when applied
30 Ibid., 811.
3
1 Richardson, Incidents of the Crown Servant Relationship, (1955) 33 Can.
Bar Rev. 424 holds that a contract exists between the Crown and its em-
ployees; Wade and Phillips, Constitutional Law 7th ed. (1965) say the question
is open; de Smith, Administrative and Constitutional Law 2d ed. (1968) also
considers the question to be open; as does Wedderburn, supra, f.n.1; Cooper
and Wood, supra, f.n.11 say a contract exists; Blair, The Civil Servant –
A
Status Relationship, (1958) 21 M.L.R. 265 states a contract does not exist;
Mitchell, The Contracts of Public Authorities (1954) does not find it necessary
to decide the point; Fridman, supra, f.n.1 says that the Crown has the capacity
to enter into contracts of employment but that such contracts do not bind
the Crown in the same way and to the same extent as a similar contract of
employment would bind any other person; Hepple and O’Higgins, Public
Employee Trade Unionism in the United Kingdom (1971) accept Richardson’s
view; Webber, Some Recent Developments in the Law of Master Servant, (1960)
13 Current Legal Problems 112, 121 says “[t]he position of a Crown servant
is one of status rather than of contract”.
3 2 Dicey, Lectures on Relationships Between Law and Opinion in England
in the 19th Century (1926); Arthurs, Developing Industrial Citizenship, (1969)
45 Can. Bar Rev. 786.
3 Arthurs, supra, f.n.32.
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to the public servant, whose position is one of status and whose
terms and conditions of work are not generally a matter of contract.
Leo Blair is the most ardent advocate of the status position of
the public employee.34 He acknowledges the difficulty of determining
what a “status” is, but goes on to note that it is a legal condition
involving at least three essential attributes. Those attributes are:
first, “a significant degree of public or social interest in the existence
of the condition; second, the condition must be legally relevant in a
substantial and general manner; third, the conditions must be such
that it can be conferred or withdrawn only by means of some inter-
vention by the state”.3 5 A superficial consideration of these requisites
is sufficient to show that there is nothing in them to prevent public
employment from being considered a condition of status, and that
the legal position is more one of status than contract.
Blair argues that it is much less confusing to look at the relation-
ship as one of status rather than contract:
… the contract approach has confused the real issues because of the need
… to import into the contract terms like “unilateral”, “unenforceable”
and “implied term” and so on. These subterfuges would be rendered unne-
cessary by acceptance of a status relationship; this would make it easier to
appreciate the true importance of “the law of the civil service” which is not
contractual but legislative in effect 3
One appreciates the full weight of what Blair is saying when one
reads in one of the more recent books on the British Public Service
that:
The balance of authority is now, however, clearly in favour of the view
that there is a contract… . The contract is subject to an implied term
that the civil servant is dismissable at any time at the will of the Crown,
with or without notice as the Crown wills. In consequence no compen-
sation can be recovered by a civil servant for wrongful dismissal. 7
Though the question of status or contract is not clearly decided
in the cases, Canadian and English case law has established several
important principles with respect to Crown employment and the
prerogative power of the Crown in relation to employees38 These
cases enunciate that employment by the Crown is at pleasure; that
34 See Blair, The Civil Servant – Political Reality and Legal Myth, (1958)
Pub. L. 32; Blair, The Civil Servant – A Status Relationship, (1958) 21 M.L.R.
265; Blair, The Crown Servant Relationship, (1955) 33 Can. Bar Rev. 1108.
35 Blair, The Civil Servant – A Status Relationship, supra, f.n.34, 265-66.
36 Ibid., 274.
37 Hepple and O’Higgins, supra, f.n.31, 24-25.
38See Clarke v. A.-G. Ont. (1965), 54 D.L.R. (2d) 577; Zamulinski v. The Queen
(1957), 10 D.L.R. (2d) 685.
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PREROGATIVE IN EMPLOYMENT
this precept may only be impaired by statute;3 9 that purported agree-
ments and rules concerning procedure on dismissal and other terms
of employment are without legal effect if they are not statutory; 40
that an employee of the Crown has no legally enforceable right to
continued employment by the Crown in the absence of a statutory
security of tenure.41 The conceptual basis for all these findings put
forward by those who maintain the relationship is contractual is
that, by reason of public policy, the Crown should not be bound to
employ its servants otherwise than at pleasure. The intrusion of
public policy into the Crown-servant relationship has had a much
more debilitating effect in terms of the employee’s security than it
has ever had in the private employment relationship. Public policy
has dictated that the Crown be as free as possible from the
fetters of a contractual relationship. It extended so far as to say
that the salary of a public officer is not assignable by him; 42 it has
moved a court to find, where a civil servant sought to collect a
statutory pension, that:
There is no express contract to pay or provide on retirement of the public
officer any sum certain, or any retiring allowance, and I think there is no
such contract to be implied from his employment in the civil service.43
Those who maintain that there is a contract between the Crown
and its servants must imply public policy terms in the contract of
employment,44 which, as we have seen, robs the contract of any
efficacy whatsoever. The necessity of implying a public policy clause
in a “contract” is in fact questionable when we recognize in the
Crown employer sufficient prerogative powers to avoid the undue
restriction of contract.
In attempting to explain the public employment relationship in
terms of contract certain terms must be implied in the contract to
accommodate the Crown’s prerogative. Insofar as the doctrine of
public policy is used to support and perpetuate those prerogatives,
one must examine the origins of the doctrine to find what real
purpose it serves. The public policy doctrine was initially infinitely
sensible in the context in which it arose. Public policy, however, is a
39 Dunn v. The Queen, supra, f.n.26; De Dohse v. The Queen (1897), 66 L.J.Q.B.
422; Shenton v. Smith, [1895] A.C. 229; Gould v. Stewart, [1896] A.C. 575.
40 Terrel v. Secretary of State, [1953) 2 Q.B. 482; Rodwell v. Thomas, [1944]
1 K.B. 596; Shenton v. Smith, supra, f.n.39; Dunn v. The Queen, supra, f.n.26.
41 Terrel v. Secretary of State, supra, f.n.40; Shenton v. Smith, supra, f.n.39;
Dunn v. The Queen, supra, f.n.26.
42 Powell v. The King (1905), 9 Ex. C.R. 364.
4 3 Balderson v. The Queen (1897), 6 Ex. C.R. 8; see also Matton v. The Queen
(1897), 5 Ex. C.R. 401.
44 See Richardson, supra, f.n.31.
McGILL LAW JOURNAL
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concept which is capable of changing over time and it is when the
public policy enunciated in eighteenth century cases gives rise to
implied terms in a modern employment relationship that it appears
absurd.
The belief that public policy dictated that Crown employees be
dismissable at will originated at a time when people in public service
did not have jobs, were not employed by the Crown, but held office.
Blackstone, in his Commentaries, considered offices to be property,
incorporeal hereditaments which could be held in fee simple, fee
tail, life or a term of years, just as estates in land.45 Writing on the
holders of judicial office, McIlwain states that:
The grant of an office, in medieval England was, in effect, the same as
a grant of land: it conferred on the grantee an estate in the office, and
(usually more important) in its emoluments. In both lands and office the
rights vesting in the grantee were, of course, strictly determined by the
terms of the grant, unless some rule of law supervened.46
Just as in a grant of property, the grantor of an office could impose
limitations on the grant. Thus grants of office from the King were
sometimes “during pleasure” but more often were “during good
behaviour”. Through the eighteenth century it seems that little prac-
tical distinction was drawn between these two grants 4 7 In either
case the law implied a condition that the office holder should perform
his duties properly. If not, he could be removed by scire facies. In
a scire facies proceeding it was incumbent on the court to determine
the issue of proper performance, the burden being on the Crown.48
Thus the earlier cases deal with the discharge and suspension
of Crown servants from offices which were considered to be property.
Such a concept is alien to the modern concept of employment. The
cases are significant in that they demonstrate that at one time the
Crown could grant offices in perpetuity or for a term of years. Fur-
ther, they show that the relationship established by the grant of such
an office might be terminated or suspended in circumstances where
the grantee cannot carry out his duties under the office. The practical
result of this is similar to that obtained by the doctrine of fund-
amental breach in employment contracts where the employee is
45 Blackstone, II Commentaries, 36.
40 McIlwain, The Tenure of English Judges, Constitutionalism and the
Changing World, 295; as quoted by Logan, A Civil Servant and his Pay, (1945)
61 L.Q.R. 240, 249.
47 Cohen, The Growth of British Civil Service, 36.
48 The reason why the Crown bore the burden probably relates to the real
property concept that a man could not derogate from or frustrate his grant
to the prejudice of the grantee.
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PREROGATIVE IN EMPLOYMENT
incapable of performing his part of the contract.4 9 The cases also
illustrate how the concept of public policy came to -intrude on the
Crown-servant relationship.
A property interest in an office gives a great deal of security.
Security, however, was thought to entail some undesirable features,
particularly in the case of a judicial office. Thus in Sir Georg
Renyl’s case5″ it was held that since his office was a judicial one it
could not be granted for a term of years because such a grant might
fall into a stranger as executor or assignee of Renyl. Other cases
followed and developed this principle, 1 establishing that the public
interest imposes limitations on grants of office from the Crown.12
The question of suspension from an office granted by the Crown
was dealt with at an equally early time in Slingsby’s case.53 Slingsby
was master of the Mint, an office granted for life, but was suspended
from his duties by the Crown. The court decided that the Crown was
bound to continue his salary, by reason of the grant of office, but
that it would be “strange to deny the King that liberty which every
subject hath, to refuse the service of any man whom he doth not
like”. Thus Slingsby was properly suspended.5 4 The case is illustrative
of a common law right of suspension from service apart from any
49 See Mitchell, The Contracts of Public Authorities (1954), 34, and at 32,
where he cites Coke as saying:
If an office either in the grant of the King, or a subject which concerns
the administration, proceeding or execution of justice or the King’s
revenue, or the commonwealth or the interest, benefit or safety of the
subject or the like, if these or any of them be granted to a man that is
unexpert and hath no skill or science to exercise or execute the same
the grant is merely void, and the party disabled by law and incapable
to take the same pro commodo regis et populi for only men of skill,
knowledge, and ability to exercise the same are capable of the same
to serve the King and his people.
5ORenyl’s case (1612), 9 Co.Rep. 95A; 77 E.R. 871.
51 Meade v. Lenthall (1640), Cro. Car. 587, 79 E.R. 1104; Progers v. Frazier
(1681), 2 Show. K.B. 171, 89 E.R. 868; see Mitchell, supra, f.n.49, 52.
52 The public interest in maintaining an independent judiciary is today
preserved by legislation which provides for the appointment to be “during
good behaviour”. See Cheffins, supra, f.n.18, ch. 5.
53Slingsby’s case (1680), 3 Swans. 178; 36 E.R. 821.
54 One must note the similarity between this result and that arrived at in
Thompson v. City of Windsor (1938), 35 O.W.N. 117, where the employer
was bound contractually to pay wages but was free to dismiss the employee
from the performance of his duties. In Slingsby’s case the Crown was not
bound by contract but by its grant of office, a species of property. Though
conceptually different, in reality the right to suspend (though wages were
paid) had the same effect.
McGILL LAW JOURNAL
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question of dismissal,” at a time when a position in the public service
was one of property and an office a matter of status.
The case of Smyth v. Lathamr56 represents a turning point from the
medieval concept of an office as property to the modern concept of
Crown employment. The plaintiff had been a paymaster for thirteen
years. He was appointed under the provisions of a statute which
stated that it was expedient that permanent regulations be estab-
lished in relation to payment, etc., of Treasury bills and that therefore
the Commissioners of the Treasury might appoint those persons to
be paymasters whom they think fit. The plaintiff argued that this
was a remedial statute and should be interpreted liberally. He
contended that to give full effect to the statute it must be assumed
that the appointment was for life. Alternatively, he said that his
written appointment was a deed poll which passed a freehold in
the office of paymaster and, insofar as there were no words of
limitation contained therein, it was an estate for life. In short, he
would have had the matter determined as if the office were property,
according to the principles enunciated in cases dealing with grants of
property. There was no suggestion in the argument that the relation-
ship was one of contract or that either party was relying on con-
tractual rights or obligations as determining the relationship.
Tindal,C.J. was quick to dispel any illusions that the office was
property, and made a distinction between the older office granted
by the Crown and the modern statutory position created by Par-
liament:
As the office of a paymaster of exchequer bills is not an ancient common
law office, of which the duration and the appointment are governed by an-
cient usage, but is an office of modern origin, and not made the subject of
legislative enactment until the statute above referred to, the question as
to duration and tenure is no other than an inquiry into the meaning and
intention of the statute itself.5 7
The officer’s position was not to be determined by principles of
property or contract, which was not even suggested, but by statute.
His position was one of status, to be determined by the terms of
the statute. Tindal,C.J. found that the object of the Act could not be
that a certain number of officers be permanently appointed but that
there “should at all times be a number adequate and sufficient,
and not more than adequate and sufficient, for the regular payment
of the bills which might be outstanding at any particular time” 7
a
55 See Richardson, supra, f.n.31, 440.
50 (1833), 9 Bing. 692; 131 E.R. 773.
$7 Ibid., 777 per Tindal,C.J.
M7aIbid., 778.
1974]
PREROGATIVE IN EMPLOYMENT
The object of the Act could not be put into effect if the Commis-
sioners have the power to appoint but not to remove.8 He therefore
found that appointment under the statute could be during pleasure
only and not for life. It must be stressed that Tindal,C.J. was simply
interpreting the statute and attempting, by the use of rules of
statutory interpretation, to determine what the statute said about
the term of office. He was not suggesting an implied term of em-
ployment or propounding a rule of the Crown’s prerogative.
Since the efficient operation of the civil service is often put
forward as justification for the principle that the civil servant is
dismissable at will, the following statement of Tindal,C.J. is worthy
of note:
… it would seem to be an unreasonable construction of the act, to hold,
that if ten paymasters had been appointed when ten were necessary, and
from a change of circumstances one alone was sufficient to perform all the
duties, yet that the commissioners of the treasury have no power of
removing the nine, but must still retain the full number….59
This interpretation
is reasonable and indeed necessary for the
efficient operation of the civil service. However, the principle of
dismissal at pleasure without notice where the relationship is one
of status appears harsh in view of the reasonable notice doctrine
that developed in the private contractual employment relationship.
The later cases dealing with the Crown-servant relationship are
a conceptual nightmare. Some problems have arisen from a failure
to draw an adequate distinction between the civil and military
servants of the Crown, others from the introduction of new argu-
ments to justify principles that would better have been laid to rest.
The concept of dismissibility at pleasure originated in cases
dealing with military service. However, the need for strict discipline
and the general nature of military service require a consideration of
different values than are present in the Crown-civil servant rela-
tionship 0 Thus it was decided in Macdonald v. Steele’
that His
Majesty’s pleasure supersedes all inquiry since he has absolute
direction and command of the army. In Re Poe6 Denman,C.J. refused
58 The rule of construction that the power to appoint includes the power
to dismiss is legislatively enacted in the Canadian Interpretation Act, R.S.C.
1970, c.1-23, and has been adopted by most of the provinces.
59 Smyth v. Latham, supra, f.n.56, 779.
60 See Mitchell, supra, f.n.49, 36; Richardson, supra, f.n.31, 425-6; Logan,
supra, f.n.46, 242-244.
61 See Mitchell, supra, f.n.49.
6′ 2 Macdonald v. Steele (1792), Peake 233; 170 E.R. 140.
63 Re Poe (1833), 5 B. & Ad. 681; 110 E.R. 942.
McGILL LAW JOURNAL
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to grant a writ of prohibition against a dismissal from the army
imposed by a court marshal, recognizing the Crown’s absolute right
to dismiss military personnel. Lastly, in Re Tuffnell6l MalinsV.C.
said, “It would be a most injurious thing to the public service if the
Crown had not the power, which we know it has … of saying to any
naval or military officer misconducting himself… that the Crown
has no longer occasion for his services”1. 6 4a
The concept of dismissibility at pleasure enunciated in the mili-
tary cases was introduced into cases dealing with civil employment
as well. In De Dohse v. The Queen,65 a military service case, Brett,J.
held that it was a rule applicable to all service under the Crown. The
case went to the Court of Appeal, where it was held that a contract
for seven years service, such as was relied on by the plaintiff, was
against public policy and could not be validly made by the Crown; in
an obiter opinion in the House of Lords, Lords Herschell and
Halsbury concurred in the view that a seven year appointment would
be contrary to public policy. This opinion was considered binding
and followed in Shenton v. Smith66 and Dunn v. The Queen,67 two
cases on civil employment. In Shenton v. Smith Lord Hobhouse, in
delivering judgment for the Privy Council, stated that:
Unless in special cases where it is otherwise provided servants of the
Crown hold their office during the pleasure of the Crown; not by virtue
of any special prerogative of the Crown, but because such are the terms
of their engagement, as is well understood throughout the public service.68
Insofar as he would appear to base his finding on an implied term
of service, his judgment has been criticized and the suggestion made
that his comment “unless otherwise provided” refers only to the
possibility of a statutory limitation. 9 However, it has been pointed
out that Lord Hobhouse did refer to the absence of any special
contract and did contemplate the possibility of regulations under
the statute in question being incorporated as conditions of service.7
1
In Dunn v. The Queen, again following Shenton v. Smith and De
Dohse, Lords Esher and Herschell held that only statutes can limit
the absolute power of the Crown to dismiss.
64 [1876] 3 Ch.D. 164.
a Ibid., 172 per MallinsV.C.
65 De Dohse v. The Queen, supra, f.n.39.
6 Shenton v. Smith, supra, f.n.39.
07Dunn v. The Queen, supra, f.n.26.
68 Shenton v. Smith, supra, f.n.39, 234-235 per Lord Hobhouse.
69 See Robertson, Proceedings Against the Crown (1908), 358.
7o See Shenton v. Smith, supra, f.n.39, 233 per Lord Hobhouse; see also
Mitchell, supra, f.n.49, 38.
1974]
PREROGATIVE IN EMPLOYMENT
A more recent and significant decision on point is Reilly v. The
King,71 a case that went to the Privy Council from the Supreme
Court of Canada.72 Reilly, a Quebec lawyer, had been appointed by
letters patent under the Great Seal of Canada to the Federal Appeal
Board for a period of three years, later extended another five.
Subsequently, but prior to the expiration of this term, the office was
abolished by statute. Reilly brought an action for damages by peti-
tion of right. McLean,J. in the Exchequer Court seemed to indicate
that there cannot be in public office a contractual relationship
regarding salary or a term of employment on the one hand and a
duty to serve faithfully on the otherY3 Mr. Justice Orde of the
Supreme Court held that the relationship might be contractual but
that, if so, the contract must be subject to an implied term that the
Crown can dismiss at pleasure. The ratio decidendi in all three courts
would seem to be that when further performance of a contract, if
one exists, becomes impossible by legislation, then the contract is
discharged and will not support an action for breach.
Though they are obiter, the words of Lord Atkin are significant
in that they have been relied on in at least one or two subsequent
cases as modifying the principle of dismissibility, and by one writer
as establishing that civil servants have a contractual relationship
with the Crown 7 4 (though this latter proposition seems questiona-
ble). Lord Atkin outlines Justice Orde’s contention that a contract
exists and that a term is implied in that contract on dismissibility,
and states that:
Their Lordships are not prepared to accede to this view of the contract,
if contract there be. If the terms of appointment definitely prescribe a
term and expressly provide for a power to determine “for cause” it appears
necessarily to follow that any implication of a power to dismiss at
pleasure is excludedY5
and further:
So far as the rights and obligations of the Crown and the holder of the
office rested on statute, the office was abolished and there was no
statutory provision made for holders of the office so abolished. So far as
the rights and obligations rested on contract, further performance of the
contract had been made by statute impossible, and the contract was
discharged.7 6
He also indicates that no distinction is to be made between the
modern grant of an office and other service. Further, he says that
71 Reilly v. The King, [1934] 1 D.L.R. 434.
72 Reilly v. The King, [19321 3 D.L.R. 529 (S.C.C.).
73 Reilly v. The King, [1932] Ex. C.R. 14.
74Richardson, supra, f.n.31, 425.
75Reilly v. The King, supra, f.n.71, 436 per Lord Atkin.
76 Ibid., 437.
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were an implied term, such as suggested in this case, to prevail, it
would defeat the security given to judicial and quasi-judicial offices
whose appointments are during good behaviour, thus undermining
the concept of an independent judiciary.
Several authorities have held that Lord Atkin’s argument holds
true whether the limitation on the right to dismiss is found in
statute or contract, i.e., whether the “term of appointment” or
limitation to “dismissal for cause” is found in statute or contract. 77
This question was considered in Canada in Genois v. The King,78
where a fireman was employed for seven months but was summarily
dismissed before the expiration of that period. Angers,J. was of
the opinion, following Lord Atkin, that a contract could exclude
the implication of a provision for dismissibility but held that the
provision in the contract for seven months employment did not
exclude the implication that it could only be excluded by a just
cause provision. This is questionable and has been criticized.79 If
we accept that the position is one of status the situation is some-
what different. Where the terminability of the Crown employee is
expressed in statute, as it is in Canada, it is unnecessary to imply
a term on dismissability. In Zamalinski v. The Queen,80 a dismissed
civil servant sought, by Petition of Right, a declaration that he
was still an employee, that his dismissal was improper and damages
for being deprived of a hearing. Thorson,P. described the Canadian
position as follows:
In Canada, the right of the Crown to dismiss persons employed in the Civil
Service of Canada is statutory and it is not necessary to consider its source
or whether it is a term imported into the contract of employment of the
civil servant or whether considerations of public policy demands its un-
impaired maintenance.81
Crown servants in Canada have been subject to terms and con-
ditions of employment established by statute since 1868.82 The terms
used in that and subsequent statutes and the extent to which an
employee in the Public Service is governed by statute would seem
to be incompatable with the notion of a contractual obligation
between the Crown and its employees.
These statutory rules present a problem to the advocate of the
contractual position. Richardson makes a very persuasive argument
77See Richardson, supra, f.n.31; Mitchell, supra, f.n.49, 44.
78 Genois v. The King, [1937] Ex. C.R. 176.
70 Mitchell, supra, f.n.49, 46.
8oZamulinski v. The Queen, supra, f.n.38.
81 Ibid., 694 per Thorson,P.
82 Civil Service Act, S.C. 1868, c.34.
1974]
PREROGATIVE IN EMPLOYMENT
for the existence of a contract between the Crown and its employees,
and, in doing so, it is incumbent on him to show the relationship
between that contract and those terms and conditions of employment
promulgated in statute or regulations made under statute by the
executive. He would hold that all those terms unilaterally promul-
gated by the employer become terms of the contract binding both
the Crown and the civil servant, thus requiring an explanation of
how this can be so with regulations made after the employment is
entered into.8 The utility of trying to force the Crown-servant re-
lationship into the contractual mould, already strained in the private
sector by trying to accommodate the reality of the private employer’s
prerogative powers with the doctrine of mutuality, is questionable.
Blair, Richardson’s critic, comes up with a much more realistic
appraisal of the relationship between any contract that might exist
and the terms and conditions of work promulgated by statute:
It is true that it is by entering into a contract of service with the Crown
that a civil servant is brought within the scope of any relevant statutory
provisions. Nevertheless, it is submitted that it is untrue to say that “the
statute is simply an offer that certain provisions will give rights to those
persons who bring themselves within its scope”….Is it not rather the
case that the statute lays down certain rights and obligations which are
then incumbent upon the parties to the contract in question? The legal
incidents thus arising derive from the legislation itself; certainly the
contract must be made before the statutory provisions can affect the
parties, but the contract is often completely powerless to vary the statutory
rights. Thus the contract, while it creates the conditions in which the pro-
visions of the statute will take effect, does not create the rights them-
selves. 84
Commenting on non-statutory regulation of the terms and conditions
of work he further states, quoting Richardson again:
“… neither party is directly and contractually bound by the regulations,
which constitute mere statements of policy, but, if either party does not
observe their terms or if the Crown changes its ‘policy’, the Crown may
exercise its power of dismissal at pleasure or the servant may resign
immediately … ” (p. 432). Thus the British civil servant knows that his
employment in the civil service will be circumscribed by regulations –
which may alter from time to time; but he appreciates that he may
resign if he feels unable to accept the regulations or that he may be
dismissed if he fails to obey them. This does not, of course, mean that
there is no “law” of the British civil service. I can do no better than quote
Professor W.A. Robson on this point:
The fact that there is very little legislation or case law dealing with
the civil service does not necessarily mean that there is no law and
practice of the civil service. There is such a thing as customary
83 Richardson, supra, f.n.31, 432.
84 Blair, The Crown Servant Relationship, supra, f.n.34, 1111.
McGILL LAW JOURNAL
[Vol. 20
administrative law; and I contend that there is a considerable body
of customary administrative law and practice regulating the civil
service. By this I mean a pattern of conduct regulating the relations
between the Crown and its servants, involving obligations which are
clearly formulated and regularly followed by all concerned. Such a
pattern of conduct can give rise to rights and duties which are
effectively recognized and observed by the administrative authorities
concerned even though they are not enforceable in the courts of
law [“Administrative Law”, in Campion (ed.), British Government
Since 1918 (1950) p. 97 ….85
It is submitted then that although there may be a contract of
employment between the Crown and its servants, all the incidents
of the relationship are a matter of status, not contract. Management’s
prerogative in the public service is statutory in nature or a residual
executive power not altered by Parliament.
Summary
It must be admitted that there is a prerogative of management
in Crown employment. It is, however, generically different from the
prerogative that has developed in the private sector. In a sense the
exercise of the Crown prerogative in relation to its employees is more
legitimate than the exercise of the private sector management
prerogative; it is a residuary power remaining in the Crown, un-
restricted by Parliament.”0 This prerogative should not be associated
with public policy and implied contractual terms since these are
explanations for prerogative powers in a contractual analysis of
Crown employment. A conclusive case has not been made for Crown
employment being in all cases or in all respects a contractual relation-
ship. It is also confusing to relate the Crown prerogative, a constitu-
tionally recognized power, to public policy, which originated on a
completely different basis. Public policy as it was properly articu-
lated in relation to Crown employment was that Crown employees
were not holders of office for life and were dismissable. Subsequent-
ly, or consequently, it was recognized by statute that the civil servant
in Canada is terminable at will. The real question in relation to the
later cases
is, does public policy further dictate that a public
servant be dismissable without notice, or that he may not recover
his pay? These questions have not yet been adequately dealt with
by the courts.
However, given the peculiar prerogative of management in the
public service and the employee’s position of status, this is not to
85Ibid., 1110. (Italics deleted).
86 See Cheffins, supra, f.n.18, 93.
19741
PREROGATIVE IN EMPLOYMENT
say that the use of arbitrary power will not be restricted. Arthurs’
“industrial citizen”, subject to statutory terms and conditions of
work not of his own making, was not an oppressed employee. The
emerging status Arthurs described was rather one capable of en-
hancing the employment relationship. That status is one to which are
attached rights and duties analogous to the rights and duties of citi-
zenship generally. 7 Those rights which Arthurs sees being protected
by industrial citizenship are reflections of changed public policies. 88
He goes on to show that these rights have developed within the
system itself through Labour Relations Boards and arbitration,
through specialized tribunals and not the courts. 9 Thus we find the
terms and conditions of the status of public employees, long neglected
by the common law, being regularized by distinctive legislation.
Further, this legislation incorporates to varying degrees collective
bargaining such as has been used in the private sector to relieve the
employee from the arbitrary exercise of management prerogatives
that stemmed from the exercise of power. Such power has an effect
similar to, but is generically different from, the prerogative power
that resides in the Crown employer.
87 Arthurs, supra, f.n.24, 787.
88 Ibid., 789.
89 Ibid., 813.
