Docket:
T-2279-12
Citation: 2014 FC 165
Ottawa, Ontario, February 20, 2014
PRESENT: The Honourable Mr. Justice Rennie
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BETWEEN:
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DEBORAH HAIRE, HARJINDER DHESY, FANNY JANG, RICHARD MALONE, RANDY
ZURIN, NELLY NG, CHELLIAH VENUGOPAL, ANNA YU, ANNA MICHIELI, ANDY HENDERSON,
PAMELA CHEUNG, HELEN YI, YULIA HIDAJAT
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Applicants
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and
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CANADA REVENUE AGENCY
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Respondent
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REASONS FOR JUDGMENT AND JUDGMENT
OVERVIEW
[1]
In consequence of an internal staffing recourse
decision, the applicants were placed into a pool of candidates eligible for
promotion. All were ultimately promoted to more senior auditing positions in
the Canadian Revenue Agency (the Agency). In the ordinary course, this would
not prompt a judicial review application. In the unusual circumstances of this
case, however, the applicants say that they would have been appointed earlier,
but for the Agency’s earlier error in disqualifying them from the competitive
process.
[2]
I conclude in favour of the applicants. The recourse
decision should be remitted for reconsideration because it lacks a reasonable
explanation for the denial of retroactive compensation in light of the late
appointment of the applicants.
BACKGROUND
[3]
In 2007 the thirteen applicants in this judicial
review application were eliminated from a tiered selection process for
appointment to a pool of candidates at the AU-04 (auditor) level. The
selection process was “tiered” in that applicants would progress through
various screens by completing competency exams in order to reach the final
tier: the pool of candidates eligible for appointment.
[4]
The applicants commenced judicial review
proceedings to set aside the decision, and on June 20, 2011, in Ahmad v
Canada Revenue Agency, 2011 FC 954, Justice David Near (now of the Court of
Appeal), found that the internal recourse procedure given to the excluded
candidates breached various components of procedural fairness, including an
opportunity to be heard and a duty to give reasons. The recourse decision was
quashed and the matter remitted to the Agency for reconsideration.
[5]
As a consequence of that decision, on April 2,
2012, the Chief of Appeals advised that the applicants would be reassessed. A
sample of the Response to Request for Decision Review sent to the applicants
reads:
As
a result of this finding of arbitrary treatment, your PoTC will be reassessed
as originally submitted by a different group of Technical Competency Assessors,
with consideration given to the concern noted in the Decision Review process.
[6]
I note that the Agency’s commitment was to
review the candidates’ applications “as originally submitted.”
[7]
On April 15, 2012 (roughly two years after the
date they say they would have been appointed to a position), the applicants
were appointed to a pool of candidates qualified for placement to an AU-04
position. The letter of offer read, in part:
Since
you now meet all assessment standards established for the AU-04 positions
associated with selection process 2007-6368-ONT-1213-3268, you have now been
found qualified and are eligible for placement consideration. You will be
notified of any placement decisions in a separate communication, at a later
date.
[8]
The applicants seek to set this decision aside.
The applicants say that, but for the flawed selection process, they would have
been not only qualified, but would have been appointed to the AU-04 position
years earlier. Now, however, they must wait until an AU-04 position becomes
available, and must then be ranked high enough within the pool of qualified
applicants to be appointed.
[9]
Put in terms of judicial review, the applicants
say that the failure to appoint them to a position, retroactive to the date on
which all other successful candidates were appointed, renders the decision
unreasonable because the corrective action is unresponsive to their grievance.
ANALYSIS
Standard of
Review
[10]
The first step in assessing the standard of
review is “ascertain[ing] whether the jurisprudence has already determined in a
satisfactory manner the degree of deference to be accorded with regard to a
particular category of question”: Dunsmuir v New Brunswick, 2008 SCC 9
at para 62, [2008] 1 S.C.R. 190.
[11]
The nature and extent of the recourse remedy
offered to the applicants – a retroactive appointment decision – is a
discretionary decision to be assessed on a standard of reasonableness. The
decision of the Court of Appeal in Macklai v Canada Revenue Agency, 2011
FCA 49 at para 7 makes this clear.
The Decision is
Unreasonable
Denying
Retroactive Compensation without an Explanation is Unreasonable
[12]
Retroactive compensation is central to the meaningfulness
of the remedy in question because the principal harm suffered is a delay in
appointment. Consequently, the denial of retroactive compensation without an
adequate explanation for that denial is unreasonable.
[13]
It is unreasonable for the Agency to provide, without
justification, a remedy that is not responsive to the substance of the
applicants’ complaint. As the Supreme Court held in Dunsmuir at para 47:
“reasonableness is concerned mostly with the existence of justification,
transparency and intelligibility within the decision-making process. But it is
also concerned with whether the decision falls within a range of possible,
acceptable outcomes which are defensible in respect of the facts and law”.
Justice Jocelyne Gagné, with reference to that same passage in Dunsmuir,
held that a “final level grievance decision” that is “not responsive to the
applicant's claim and does not provide him with any meaningful remedy” is
unreasonable: Backx v Canada (Canada Food Inspection Agency), 2013 FC
139 at para 24. For these applicants, without a justifiable, transparent, and
intelligible explanation for denying retroactive appointment, the decision is
unreasonable.
[14]
A review of the facts in Backx is in
order to provide substance to what a “meaningful” and “responsive” remedy looks
like. In that case, the Canadian Food Inspection Agency (CFIA) held a
competition to staff a Veterinarian-in-Charge position within the Meat Hygiene
stream. Dr. Backx did not apply for this job because his job experience and
his interests did not relate to Meat Hygiene. However, the CFIA subsequently
used the Eligibility List generated in that competition to staff a veterinarian
vacancy relating to Animal Health. Backx grieved. The CFIA denied the
applicant’s grievance. This decision was quashed on judicial review before
this Court and the matter was referred back for re-determination: Backx v Canada (Canadian Food Inspection Agency), 2010 FC 480. Justice John O’Keefe of this
Court found that the decision-maker failed to address the lack of similarity in
the positions, which was the applicant’s primary ground for his grievance, and
held that the CFIA’s decision did not display the required justification,
transparency and intelligibility in the decision-making process.
[15]
A new final level decision-maker was appointed
to hear the Backx grievance. This time, the applicant’s grievance was
allowed but the CFIA refused to grant the remedy sought by Dr. Backx, finding
that “the appointment made to the Animal Health District Office was valid and
could not be revoked.” Rather, the CFIA offered the applicant the opportunity
to be assessed against the requirements in an ongoing selection process which
was intended to create a pool of qualified candidates who would be eligible for
vacancies as they arose.
[16]
In considering the reasonableness of the
decision, Gagné J ruled:
The
applicant’s arguments with this respect are well-founded. As per Dunsmuir,
above, at para 47, a review for reasonableness “inquires into the qualities
that make a decision reasonable, referring to both the process of articulating
the reasons and the outcome” and these qualities include “the existence of
justification, transparency and intelligibility within the decision-making
process.” I agree with the applicant that the outcome of the final level
grievance decision is unreasonable, notably because it is not responsive to the
applicant’s claim and does not provide him with any meaningful remedy.
There
is nothing to suggest that the CFIA’s offer remedied the applicant’s loss of
opportunity in any way, nor that the CFIA took reasonable steps to provide the
applicant’s with a suitable remedy in his particular circumstances. Although
it is open to the CFIA to choose how to remedy the loss suffered by the
applicant as it sees fit, it must do so in a reasonable and meaningful manner
(emphasis added).
[Emphasis
added]
[17]
The remedy granted by the Agency, like that in Backx,
is not responsive to the applicants’ concerns. The recourse decision and
appointment letters are silent on the question of retroactivity, in
circumstances where the applicants would have been appointed earlier. Not all
administrative action or discretionary decisions must be accompanied by reasons,
and, if reasons are required, they need not necessarily be exacting and
elaborate. However, they must, at a minimum, indicate that the decision-maker
has turned his or her mind to relevant considerations. In this context, the
failure to address the question of retroactivity is fatal to its reasonableness.
The decision is therefore set aside, and the respondent directed to reconsider
its decision in light of these reasons. The Court will not prescribe the
nature of the remedy save to say that the reasons must address the rationale
for not making the appointments retroactive, and that those reasons must be
consistent with the Agency’s human resources policy framework which extols the
virtues of transparency and fairness.
Denied Retroactive Compensation had
to be Explained because the Applicants would have been Promoted Earlier
[18]
My conclusion above with respect to reasonableness
is linked to the fact that the applicants would have been appointed earlier had
they not been improperly disqualified. This fact distinguishes the case at
hand from previous cases in which appointments without retroactive pay have
been found to be reasonable.
[19]
For example, in Macklai, Nadon JA held
that it was reasonable for the Agency to appoint Macklai without retroactive pay
because he might not have been appointed earlier. However, Macklai is
distinguishable from the set of facts before me in two respects.
[20]
First, in Macklai, the Court of Appeal
reiterates, on three occasions in the course of a succinct judgment, the complete
absence of an evidentiary foundation with respect to the probability of an
earlier appointment. Nadon JA opines, with respect to the probability of
Macklai’s earlier appointment, that there was “absolutely no evidence” (besides
the appellant’s later appointment) supporting the claim (at para 3), that “no
evidence was adduced” sufficiently comparing Macklai to the other candidates
(at para 5), and that “[o]n the record before us, there is simply no way for us
to reach a conclusion on this point” (at para 6). Implicit in these statements
is that the decision might have been unreasonable if there had been evidence establishing
the likelihood of Macklai’s earlier appointment.
[21]
Second, and more importantly, the Court of
Appeal’s primary basis for dismissing Macklai’s appeal was that he might not
have been appointed earlier (see paras 5-7). The disputed hiring decision
involved four eligible candidates vying for three positions. As a consequence,
it was certain that one candidate would be denied an appointment and the Court
of Appeal heard no evidence in support or in opposition to whether that
candidate would have been Macklai. Retroactivity was not needed for a
meaningful remedy in Macklai because there was no evidence supporting
the claim that he would have been appointed earlier in the first place.
[22]
Neither of these points from Macklai apply
to the case before me. In this case, there was an abundance of evidence
regarding the probability of an earlier appointment for the applicants. In
fact, a majority of the appellant’s argument and evidence centred on this. As I
explain below, all of the applicants would have been appointed earlier but for
the Agency’s errors in the staffing process.
The
Applicants would have been Promoted Earlier
[23]
I find that on a balance of probabilities, all 13
of the applicants would have been promoted on January 26, 2009 (the Offer
Date). Further, it is certain that all of the applicants would have been
promoted by, at the latest, April 1, 2010.
[24]
In support of this conclusion, I note that the
Agency’s letter of offer stated that “all candidates in the qualified pool
established for this selection process are receiving a letter of offer.” Justice
Near held, it will be remembered, that they had been unfairly excluded from the
pool. The fact that “all candidates in the qualified pool” were offered
positions demonstrates that possessing the relevant qualifications was sufficient
for an appointment. That alone suggests that, had the applicants been fairly
assessed, they too would have received offers of appointment.
[25]
This preliminary observation aside, even
adopting a worst case scenario set of assumptions for the applicants,
their appointment on the Offer Date was, on a balance of probabilities, more
than likely. To establish the worst case scenario, assume that the Agency
ideally wanted to appoint 79 auditors and that in a ranking of the eligible
candidates the applicants all ranked at the bottom. Even with these two highly
prejudicial assumptions (neither of which is borne out in the evidence), it is
still likely that the applicants would have been appointed on the Offer Date.
[26]
First, there is no doubt that seven of the
applicants would have been appointed on the Offer Date. The Agency sent its
offer to 79 candidates and only 72 accepted. Therefore, a minimum of 7 of the
13 applicants would have been selected to fill the 79 spots initially sought
out by the Agency. I note parenthetically, that restricting the number of
certainly successful applicants to 7 is predicated on the prejudicial
assumptions that the Agency was only willing to hire exactly 79 auditors and
not one more, and that the applicants all ranked at the bottom.
[27]
Second, even if the ideal number of appointments
was only 79, to appoint fewer candidates than were qualified would have forced
the Agency to undergo a cumbersome ranking process which it would otherwise
avoid by appointing all qualified candidates. The ranking would have been
cumbersome because the qualification exams were pass/fail and could therefore
not be used as an objective metric for comparing candidates. The affidavit
evidence of the applicants indicates that the Agency wanted to avoid this time
consuming and unproductive process of ranking such a large pool of eligible
candidates. As a consequence, even if appointing an additional 6 candidates
marginally exceeded the demand for work available to auditors, it would have
still been significantly easier on management to simply appoint the additional 6
auditors. No evidence or argument was raised to the contrary on this point by
the respondents.
[28]
I merely elaborate on these worst case scenario
assumptions to bolster the factual conclusion that all of the applicants would
have been appointed on the Offer Date. To be clear, there is no evidentiary foundation
supporting the assumption that the applicants would have ranked at the bottom. Further,
it is unsound, for the reasons the Agency itself expressed, to assume that the Agency
only wished to appoint exactly 79 auditors. The exercise of ranking 79
candidates, and justifying that ranking to exclude 6, was highly problematic. As
I observed at the outset, the recipients of the offer (“all candidates in the
qualified pool”) suggest that the agency wanted to exhaust the pool of
qualified candidates.
[29]
In any event, lest there be any doubt in the
matter, an additional 18 AU-04 positions in the International Tax area were to
be staffed in a parallel process. The Agency committed to staff those
positions “using existing pools” and stated that appointments would have been
effective on April 1, 2010. The affidavit evidence establishes that there were
no other existing pools in either relevant region (Headquarters or Ontario) from which appointments could be made. Consequently, even in the worst case
scenario (only 79 spots, applicants all ranked last) and with the added
assumption that the Agency would have been willing to perform a cumbersome
ranking, the remaining 6 applicants would have certainly been appointed by
April 1, 2010, given the 18 additional positions in the International Tax area.
[30]
In sum, far from being a case where there was
little to no evidence about whether the applicants might or might not have been
promoted, these applicants would have been placed into the pool earlier but for
their exclusion. In the worst case scenario, at least 7 of the applicants
would have been promoted by the Offer Date, and the remaining applicants would
have been promoted by April 1, 2010. Given the financial and career
consequences of this, the issue of date of appointment was a highly pertinent
consideration in the recourse review.
Arguments to
the Contrary
[31]
Two arguments advanced by the respondent need to
be addressed. The first is that the applicants are seeking damages by way of
judicial review and therefore the application should be dismissed. This is
manifestly not the case. In their Notice of Application the applicants seek:
An
Order remitting the matter to a different representative of the Canada Revenue
Agency for a new decision on corrective measures […].
[32]
Secondly, arguments based on Canada (Attorney General) v TeleZone Inc., 2010 SCC 62, [2010] 3 S.C.R. 585 are
irrelevant distractions. To the extent that reference is made by the
applicants to losses, they simply inform the nature and the extent of the
reasons required to meet the Dunsmuir criteria of transparency,
justification and intelligibility. If the applicants seek damages, they are
free to commence an action in this Court which has jurisdiction to hear such a
claim.
[33]
This, in turn leads to the principle ground on
which the respondent seeks to fit the decision into the Dunsmuir
criteria. The respondent focuses on the letter of August 15, 2012 and in
particular the word “now” in the paragraph, which I repeat:
Since
you now meet all assessment standards established for the AU-04
positions associated with selection process 2007-6368-ONT-1213-3268, you have now
been found qualified and are eligible for placement consideration. You will be
notified of any placement decisions in a separate communication, at a later
date. [Emphasis added]
[34]
The essence of the respondent’s argument is that
since the applicants only passed the third and final phase of assessment on
August 15, 2012, they can only be appointed as of that date. The rationale for
the decision, it is argued, lies in the word “now.”
[35]
This is not a compelling rationale. It is an
obvious statement of fact which belies the context behind the applicants’
“late” qualification. The reason why the applicants were only able to
demonstrate that they met the assessment standards “now” was because they had
been unfairly precluded from doing so earlier. The competency exams were
written as each candidate progressed through the various tiers of the selection
process. Failing to qualify for the final pool because of not writing an exam
which corresponds to a tier in the selection process from which you have been
wrongfully denied access to is not a rational basis for denying retroactive
compensation. It is not disputed that the applicants were only placed into the
AU-04 pool following the recourse and reassessment directed by the decision of
Justice Near. There is nothing in the letter or recourse decision which
suggests, that the decision-maker turned his or her mind to the question of
retroactivity, which was integral to the applicants.
[36]
There is an inherent tension in public law
between the requirement that remedies be effective and the discretion of
decision-makers to choose between a range of reasonable remedies. The Court
will not prescribe the precise nature of the remedy, save to say that any
remedy should take into account three points: First, the Dunsmuir
criteria are directed to the provision of explanations and rationale, not
conclusions. Second, for the Agency’s decision to deny retroactive appointment
to cross the Dunsmuir threshold (if that is in fact the decision it
takes), it would have to justify that decision in light of the Agency’s human resources
policy commitment to transparency and fairness. Third, the decision should
consider what is appropriate corrective action assuming that the applicants and
their applications as “originally submitted” were accorded the procedural
fairness to which they where entitled.
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