SUPREME
COURT OF CANADA
Between:
David
Dunsmuir
Appellant
v.
Her
Majesty the Queen in Right of the Province of New Brunswick
as
represented by Board of Management
Respondent
Coram: McLachlin
C.J. and Bastarache, Binnie, LeBel, Deschamps, Fish, Abella, Charron and
Rothstein JJ.
Joint
Reasons for Judgment:
(paras. 1 to 118)
Concurring
Reasons:
(paras. 119 to 157)
Concurring
Reasons:
(paras. 158 to 173)
|
Bastarache and LeBel JJ. (McLachlin C.J.
and Fish and Abella JJ. concurring)
Binnie J.
Deschamps J. (Charron and Rothstein JJ.
concurring)
|
______________________________
Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190, 2008 SCC 9
David Dunsmuir Appellant
v.
Her Majesty
the Queen in Right of the Province of
New Brunswick as represented by Board of Management Respondent
Indexed as: Dunsmuir v.
New Brunswick
Neutral citation: 2008 SCC 9.
File No.: 31459.
2007: May 15; 2008: March 7.
Present: McLachlin C.J. and Bastarache, Binnie,
LeBel, Deschamps, Fish, Abella, Charron and Rothstein JJ.
on appeal from the court of appeal for new brunswick
Administrative law — Judicial review — Standard of
review — Proper approach to judicial review of administrative decision makers —
Whether judicial review should include only two standards: correctness and
reasonableness.
Administrative law — Judicial review — Standard of
review — Employee holding office “at pleasure” in provincial civil service
dismissed without alleged cause with four months’ pay in lieu of notice —
Adjudicator interpreting enabling statute as conferring jurisdiction to
determine whether discharge was in fact for cause — Adjudicator holding
employer breached duty of procedural fairness and ordering reinstatement —
Whether standard of reasonableness applicable to adjudicator’s decision on
statutory interpretation issue — Public Service Labour Relations Act, R.S.N.B.
1973, c. P‑25, ss. 97(2.1), 100.1(5) — Civil Service Act,
S.N.B. 1984, c. C‑5.1, s. 20.
Administrative law — Natural justice — Procedural
fairness — Dismissal of public office holders — Employee holding office “at
pleasure” in provincial civil service dismissed without alleged cause with four
months’ pay in lieu of notice — Employee not informed of reasons for
termination or provided with opportunity to respond — Whether employee entitled
to procedural fairness — Proper approach to dismissal of public employees.
D was employed by the Department of Justice for the
Province of New Brunswick. He held a position under the Civil Service Act
and was an office holder “at pleasure”. His probationary period was extended
twice and the employer reprimanded him on three separate occasions during the
course of his employment. On the third occasion, a formal letter of reprimand
was sent to D warning him that his failure to improve his performance would
result in further disciplinary action up to and including dismissal. While
preparing for a meeting to discuss D’s performance review the employer
concluded that D was not right for the job. A formal letter of termination was
delivered to D’s lawyer the next day. Cause for the termination was explicitly
not alleged and D was given four months’ pay in lieu of notice.
D commenced the grievance process under s. 100.1 of
the Public Service Labour Relations Act (“PSLRA”), alleging that
the reasons for the employer’s dissatisfaction were not made known, that he did
not receive a reasonable opportunity to respond to the concerns, that the
employer’s actions in terminating him were without notice, due process or procedural
fairness, and that the length of the notice period was inadequate. The
grievance was denied and then referred to adjudication. A preliminary issue of
statutory interpretation arose as to whether, where dismissal was with notice
or pay in lieu thereof, the adjudicator was authorized to determine the reasons
underlying the province’s decision to terminate. The adjudicator held that the
referential incorporation of s. 97(2.1) of the PSLRA into
s. 100.1(5) of that Act meant that he could determine whether D had been
discharged or otherwise disciplined for cause. Ultimately, the adjudicator
made no finding as to whether the discharge was or was not for cause. In his
decision on the merits, he found that the termination letter effected
termination with pay in lieu of notice and that the termination was not
disciplinary. As D’s employment was hybrid in character, the adjudicator held
that D was entitled to and did not receive procedural fairness in the
employer’s decision to terminate his employment. He declared that the
termination was void ab initio and ordered D reinstated as of the date
of dismissal, adding that in the event that his reinstatement order was quashed
on judicial review, he would find the appropriate notice period to be eight
months.
On judicial review, the Court of Queen’s Bench applied
the correctness standard and quashed the adjudicator’s preliminary decision,
concluding that the adjudicator did not have jurisdiction to inquire into the
reasons for the termination, and that his authority was limited to determining
whether the notice period was reasonable. On the merits, the court found that
D had received procedural fairness by virtue of the grievance hearing before
the adjudicator. Concluding that the adjudicator’s decision did not stand up
to review on a reasonableness simpliciter standard, the court quashed
the reinstatement order but upheld the adjudicator’s provisional award of eight
months’ notice. The Court of Appeal held that the proper standard with respect
to the interpretation of the adjudicator’s authority under the PSLRA was
reasonableness simpliciter, not correctness, and that the adjudicator’s
decision was unreasonable. It found that where the employer elects to dismiss
with notice or pay in lieu of notice, s. 97(2.1) of the PSLRA does
not apply and the employee may only grieve the length of the notice period. It
agreed with the reviewing judge that D’s right to procedural fairness had not
been breached.
Held: The
appeal should be dismissed.
Per McLachlin C.J.
and Bastarache, LeBel, Fish and Abella JJ.: Despite its clear, stable
constitutional foundations, the system of judicial review in Canada has proven
to be difficult to implement. It is necessary to reconsider both the number
and definitions of the various standards of review, and the analytical process
employed to determine which standard applies in a given situation.
Notwithstanding the theoretical differences between the standards of patent
unreasonableness and reasonableness simpliciter, any actual difference
between them in terms of their operation appears to be illusory. There ought
to be only two standards of review: correctness and reasonableness. [32] [34]
[41]
When applying the correctness standard in respect of
jurisdictional and some other questions of law, a reviewing court will not show
deference to the decision maker’s reasoning process; it will rather undertake
its own analysis of the question and decide whether it agrees with the
determination of the decision maker; if not, the court will substitute its own
view and provide the correct answer. A court conducting a review for
reasonableness inquires into the qualities that make a decision reasonable.
Reasonableness is concerned mostly with the existence of justification,
transparency and intelligibility within the decision‑making process and
with whether the decision falls within a range of possible, acceptable outcomes
which are defensible in respect of the facts and the law. It is a deferential
standard which requires respect for the legislative choices to leave some
matters in the hands of administrative decision makers, for the processes and
determinations that draw on particular expertise and experiences, and for the
different roles of the courts and administrative bodies within the Canadian
constitutional system. [47‑50]
An exhaustive analysis is not required in every case to
determine the proper standard of review. Courts must first ascertain whether
the jurisprudence has already determined in a satisfactory manner the degree of
deference to be accorded to a decision maker with regard to a particular category
of question. If the inquiry proves unfruitful, courts must analyze the factors
making it possible to identify the proper standard of review. The existence of
a privative clause is a strong indication of review pursuant to the
reasonableness standard, since it is evidence of Parliament or a legislature’s
intent that an administrative decision maker be given greater deference and
that interference by reviewing courts be minimized. It is not, however,
determinative. Where the question is one of fact, discretion or policy, or
where the legal issue is intertwined with and cannot be readily separated from
the factual issue, deference will usually apply automatically. Deference will
usually result where a decision maker is interpreting its own statute or statutes
closely connected to its function, with which it will have particular
familiarity. While deference may also be warranted where an administrative
decision maker has developed particular expertise in the application of a
general common law or civil law rule in relation to a specific statutory
context, a question of law that is of central importance to the legal system as
a whole and outside the specialized area of expertise of the administrative
decision maker will always attract a correctness standard. So will a true
question of vires, a question regarding the jurisdictional lines between
two or more competing specialized tribunals, and a constitutional question
regarding the division of powers between Parliament and the provinces in the Constitution
Act, 1867 . [52‑62]
The standard of reasonableness applied on the issue of
statutory interpretation. While the question of whether the combined effect of
ss. 97(2.1) and 100.1 of the PSLRA permits the adjudicator to
inquire into the employer’s reason for dismissing an employee with notice or
pay in lieu of notice is a question of law, it is not one that is of central
importance to the legal system and outside the specialized expertise of the
adjudicator, who was in fact interpreting his enabling statute. Furthermore,
s. 101(1) of the PSLRA includes a full privative clause, and the
nature of the regime favours the standard of reasonableness. Here, the
adjudicator’s interpretation of the law was unreasonable and his decision does
not fall within the range of acceptable outcomes that are defensible in respect
of the facts and the law. The employment relationship between the parties in
this case was governed by private law. The combined effect of ss. 97(2.1)
and 100.1 of the PSLRA cannot, on any reasonable interpretation, remove
the employer’s right, under the ordinary rules of contract, to discharge an
employee with reasonable notice or pay in lieu thereof without asserting
cause. By giving the PSLRA an interpretation that allowed him to
inquire into the reasons for discharge, the adjudicator adopted a reasoning
process that was fundamentally inconsistent with the employment contract and,
thus, fatally flawed. [66‑75]
On the merits, D was not entitled to procedural
fairness. Where a public employee is employed under a contract of employment,
regardless of his or her status as a public office holder, the applicable law
governing his or her dismissal is the law of contract, not general principles
arising out of public law. Where a dismissal decision is properly within the
public authority’s powers and is taken pursuant to a contract of employment,
there is no compelling public law purpose for imposing a duty of fairness. The
principles expressed in Knight v. Indian Head School Division No. 19 in
relation to the general duty of fairness owed by public authorities when making
decisions that affect the rights, privileges or interests of individuals are
valid and important. However, to the extent that Knight ignored the
important effect of a contract of employment, it should not be followed. In
the case at bar, D was a contractual employee in addition to being a public
office holder. Section 20 of the Civil Service Act provided that
as a civil servant he could only be dismissed in accordance with the ordinary
rules of contract. To consider a public law duty of fairness issue where such
a duty exists falls squarely within the adjudicator’s task to resolve a
grievance. Where, as here, the relationship is contractual, it was unnecessary
to consider any public law duty of procedural fairness. By imposing procedural
fairness requirements on the respondent over and above its contractual
obligations and ordering the full “reinstatement” of D, the adjudicator erred
and his decision was therefore correctly struck down. [76‑78] [81] [84]
[106] [114] [117]
Per Binnie J.: The
majority reasons for setting aside the adjudicator ruling were generally agreed
with, however the call of the majority to re‑evaluate the pragmatic and
functional test and to re‑assess “the structure and characteristics of
the system of judicial review as a whole” and to develop a principled framework
that is “more coherent and workable” invites a broader reappraisal. Judicial
review is an idea that has lately become unduly burdened with law office
metaphysics. Litigants find the court’s attention focussed not on their
complaints, or the government’s response, but on lengthy and arcane discussions
of something they are told is the pragmatic and functional test. The Court
should at least (i) establish some presumptive rules and (ii) get the parties
away from arguing about the tests and back to arguing about the substantive
merits of their case. [119-122] [133] [145]
The distinction between “patent unreasonableness” and
reasonableness simpliciter is now to be abandoned. The repeated
attempts to explain the difference between the two, was in hindsight,
unproductive and distracting. However, a broad reappraisal of the system of
judicial review should explicitly address not only administrative tribunals but
issues related to other types of administrative bodies and statutory decision
makers including mid‑level bureaucrats and, for that matter,
Ministers. If logic and language cannot capture the distinction in one
context, it must equally be deficient elsewhere in the field of judicial
review. [121‑123] [134-135] [140]
It should be presumed that the standard of review of an
administrative outcome on grounds of substance is reasonableness. In
accordance with the ordinary rules of litigation, it should also be presumed
that the decision under review is reasonable until the applicant shows
otherwise. An applicant urging the non‑deferential “correctness” standard
should be required to demonstrate that the decision rests on an error in the
determination of a legal issue not confided (or which constitutionally could
not be confided) to the administrative decision maker to decide, whether in
relation to jurisdiction or the general law. The logic of the constitutional
limitation is obvious. If the limitation did not exist, the government could
transfer the work of the courts to administrative bodies that are not
independent of the executive and by statute immunize the decisions of these
bodies from effective judicial review. Questions of law outside the
administrative decision maker’s home statute and closely related rules or
statutes which require his or her expertise should also be reviewable on a
“correctness” standard whether or not it meets the majority’s additional
requirement that it be “of central importance to the legal system as a whole”.
The standard of correctness should also apply to the requirements of
“procedural fairness”, which will vary with the type of decision maker and the
type of decision under review. Nobody should have his or her rights, interests
or privileges adversely dealt with by an unjust process. [127‑129] [146‑147]
On the other hand when the application for judicial
review challenges the substantive outcome of an administrative action, the
judge is invited to cross the line into second‑guessing matters that lie
within the function of the administrator. This is controversial because it is
not immediately obvious why a judge’s view of the reasonableness of an
administrative policy or the exercise of an administrative discretion should be
preferred to that of the administrator to whom Parliament or a legislature has
allocated the decision, unless there is a full statutory right of appeal to the
courts, or it is otherwise indicated in the conferring legislation that a
“correctness” standard is intended. [130]
Abandonment of the distinction between reasonableness simpliciter
and patent unreasonableness has important implications. The two different
standards addressed not merely “the magnitude or the immediacy of the defect”
in the administrative decision but recognized that different administrative
decisions command different degrees of deference, depending on who is deciding
what. [135]
“Contextualizing” a single standard of “reasonableness”
review will shift the courtroom debate from choosing between two standards of
reasonableness that each represented a different level of deference to a debate
within a single standard of reasonableness to determine the appropriate level
of deference. [139]
Thus a single “reasonableness” standard will now
necessarily incorporate both the degree of deference owed to the decision maker
formerly reflected in the distinction between patent unreasonableness and
reasonableness simpliciter, and an assessment of the range of options
reasonably open to the decision maker in the circumstances. The judge’s role
is to identify the outer boundaries of reasonable outcomes within which the
administrative decision maker is free to choose. [141] [149]
A single “reasonableness” standard is a big tent that
will have to accommodate a lot of variables that inform and limit a court’s
review of the outcome of administrative decision making. “Contextualizing” the
reasonableness standard will require a reviewing court to consider the precise
nature and function of the decision maker including its expertise, the terms
and objectives of the governing statute (or common law) conferring the power of
decision including the existence of a privative clause and the nature of the
issue being decided. Careful consideration of these matters will reveal the
extent of the discretion conferred. In some cases the court will have to
recognize that the decision maker was required to strike a proper balance (or
achieve proportionality) between the adverse impact of a decision on the rights
and interests of the applicant or others directly affected weighed against the
public purpose which is sought to be advanced. In each case careful
consideration will have to be given to the reasons given for the decision.
This list of “contextual” considerations is non‑exhaustive. A reviewing
court ought to recognize throughout the exercise that fundamentally the
“reasonableness” of the administrative outcome is an issue given to another
forum to decide. [144] [151‑155]
Per Deschamps, Charron
and Rothstein JJ.: Any review starts with the identification of the questions
at issue as questions of law, questions of fact or questions of mixed fact and
law. In the adjudicative context, decisions on questions of fact, whether
undergoing appellate review or administrative law review, always attract
deference. When there is a privative clause, deference is owed to the
administrative body that interprets the legal rules it was created to interpret
and apply. If the body oversteps its delegated powers, if it is asked to
interpret laws in respect of which it does not have expertise or if Parliament
or a legislature has provided for a statutory right of review, deference is not
owed to the decision maker. Finally, when considering a question of mixed fact
and law, a reviewing court should show an adjudicator the same deference as an
appeal court would show a lower court. [158‑164]
Here, the employer’s common law right to dismiss without
cause was the starting point of the analysis. Since the adjudicator does not
have specific expertise in interpreting the common law, the reviewing court can
proceed to its own interpretation of the applicable rules and determine whether
the adjudicator could enquire into the cause of the dismissal. The applicable
standard of review is correctness. The distinction between the common law
rules of employment and the statutory rules applicable to a unionized employee
is essential if s. 97(2.1) of the PSLRA is to be applied mutatis
mutandis to the case of a non‑unionized employee as required by
s. 100.1(5) of the PSLRA. The adjudicator’s failure to inform
himself of this crucial difference led him to look for a cause for the
dismissal, which was not relevant. Even if deference had been owed to the
adjudicator, his interpretation could not have stood. Employment security is
so fundamental to an employment relationship that it could not have been
granted by the legislature by providing only that the PSLRA was to apply
mutatis mutandis to non‑unionized employees. [168‑171]
Cases Cited
By Bastarache and LeBel JJ.
Referred to: Chalmers
(Dr. Everett) Hospital v. Mills (1989), 102 N.B.R. (2d) 1; Knight v.
Indian Head School Division No. 19, [1990] 1 S.C.R. 653; Alberta
Union of Provincial Employees v. Lethbridge Community College, [2004] 1
S.C.R. 727, 2004 SCC 28; Crevier v. Attorney General of Quebec, [1981] 2
S.C.R. 220; Dr. Q v. College of Physicians and Surgeons of British Columbia,
[2003] 1 S.C.R. 226, 2003 SCC 19; Executors of the Woodward Estate v.
Minister of Finance, [1973] S.C.R. 120; U.E.S., Local 298 v. Bibeault,
[1988] 2 S.C.R. 1048; Baker v. Canada (Minister of Citizenship and
Immigration), [1999] 2 S.C.R. 817; Suresh v. Canada (Minister of
Citizenship and Immigration), [2002] 1 S.C.R. 3, 2002 SCC 1; Mount Sinai
Hospital Center v. Quebec (Minister of Health and Social Services), [2001]
2 S.C.R. 281, 2001 SCC 41; C.U.P.E. v. Ontario (Minister of Labour),
[2003] 1 S.C.R. 539, 2003 SCC 29; Chamberlain v. Surrey School District
No. 36, [2002] 4 S.C.R. 710, 2002 SCC 86; Canadian Union of Public
Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227; Canada
(Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R.
748; Pushpanathan v. Canada (Minister of Citizenship and Immigration),
[1998] 1 S.C.R. 982; Toronto (City) v. C.U.P.E., Local 79, [2003] 3
S.C.R. 77, 2003 SCC 63; Law Society of New Brunswick v. Ryan, [2003] 1
S.C.R. 247, 2003 SCC 20; Council of Canadians with Disabilities v. Via Rail
Canada Inc., [2007] 1 S.C.R. 650, 2007 SCC 15; Voice Construction Ltd.
v. Construction & General Workers’ Union, Local 92, [2004] 1 S.C.R.
609, 2004 SCC 23; Canada (Attorney General) v. Mossop, [1993] 1 S.C.R.
554; Canadian Broadcasting Corp. v. Canada (Labour Relations Board),
[1995] 1 S.C.R. 157; Toronto (City) Board of Education v. O.S.S.T.F.,
District 15, [1997] 1 S.C.R. 487; McLeod v. Egan, [1975] 1 S.C.R.
517; Cartaway Resources Corp. (Re), [2004] 1 S.C.R. 672, 2004 SCC 26; Westcoast
Energy Inc. v. Canada (National Energy Board), [1998] 1 S.C.R. 322; Nova
Scotia (Workers’ Compensation Board) v. Martin, [2003] 2 S.C.R. 504, 2003
SCC 54; United Taxi Drivers’ Fellowship of Southern Alberta v. Calgary
(City), [2004] 1 S.C.R. 485, 2004 SCC 19; Regina Police Assn. Inc. v.
Regina (City) Board of Police Commissioners, [2000] 1 S.C.R. 360, 2000 SCC
14; Quebec (Commission des droits de la personne et des droits de la
jeunesse) v. Quebec (Attorney General), [2004] 2 S.C.R. 185, 2004 SCC 39; Canada
Safeway Ltd. v. RWDSU, Local 454, [1998] 1 S.C.R. 1079; Moreau‑Bérubé
v. New Brunswick (Judicial Council), [2002] 1 S.C.R. 249, 2002 SCC 11; Ridge
v. Baldwin, [1963] 2 All E.R. 66; Nicholson v. Haldimand‑Norfolk
Regional Board of Commissioners of Police, [1979] 1 S.C.R. 311; Martineau
v. Matsqui Institution Disciplinary Board, [1980] 1 S.C.R. 602; Kane v.
Board of Governors of the University of British Columbia, [1980] 1 S.C.R.
1105; Attorney General of Canada v. Inuit Tapirisat of Canada, [1980] 2
S.C.R. 735; Cardinal v. Director of Kent Institution, [1985] 2 S.C.R.
643; Reglin v. Creston (Town) (2004), 34 C.C.E.L. (3d) 123, 2004 BCSC
790; Gismondi v. Toronto (City) (2003), 64 O.R. (3d) 688; Seshia v.
Health Sciences Centre (2001), 160 Man. R. (2d) 41, 2001 MBCA 151; Rosen
v. Saskatoon District Health Board (2001), 202 D.L.R. (4th) 35, 2001 SKCA
83; Hanis v. Teevan (1998), 111 O.A.C. 91; Gerrard v.
Sackville (Town) (1992), 124 N.B.R. (2d) 70; Malloch v. Aberdeen Corp.,
[1971] 2 All E.R. 1278; Hughes v. Moncton (City) (1990), 111 N.B.R. (2d)
184, aff’d (1991), 118 N.B.R. (2d) 306; Rosen v. Saskatoon District Health
Board, [2000] 4 W.W.R. 606, 2000 SKQB 40; Wells v. Newfoundland,
[1999] 3 S.C.R. 199; School District No. 5 (Southeast Kootenay) and
B.C.T.F. (Yellowaga) (Re) (2000), 94 L.A.C. (4th) 56; Wallace v. United
Grain Growers Ltd., [1997] 3 S.C.R. 701.
By Binnie J.
Referred to: Canadian
Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979]
2 S.C.R. 227; Cooper v. Wandsworth Board of Works (1863), 14 C.B. (N.S.)
180, 143 E.R. 414; Ocean Port Hotel Ltd. v. British Columbia (General
Manager, Liquor Control and Licensing Branch), [2001] 2 S.C.R. 781, 2001
SCC 52; U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048; Associated
Provincial Picture Houses Ltd. v. Wednesbury Corp., [1947] 2 All E.R. 680; Baker
v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817; Mount
Sinai Hospital Center v. Quebec (Minister of Health and Social Services),
[2001] 2 S.C.R. 281, 2001 SCC 41; Idziak v. Canada (Minister of Justice),
[1992] 3 S.C.R. 631; Suresh v. Canada (Minister of Citizenship and
Immigration), [2002] 1 S.C.R. 3, 2002 SCC 1; Operation Dismantle Inc. v.
The Queen, [1985] 1 S.C.R. 441; Attorney General of Canada v. Inuit
Tapirisat of Canada, [1980] 2 S.C.R. 735; Westcoast Energy Inc. v.
Canada (National Energy Board), [1998] 1 S.C.R. 322; Law Society of New
Brunswick v. Ryan, [2003] 1 S.C.R. 247, 2003 SCC 20; Moreau‑Bérubé
v. New Brunswick (Judicial Council), [2002] 1 S.C.R. 249, 2002 SCC 11; C.U.P.E.
v. Ontario (Minister of Labour), [2003] 1 S.C.R. 539, 2003 SCC 29; Roncarelli
v. Duplessis, [1959] S.C.R. 121.
By Deschamps J.
Referred to: H.L. v.
Canada (Attorney General), [2005] 1 S.C.R. 401,
2005 SCC 25; Toronto (City) v. C.U.P.E., Local 79, [2003] 3 S.C.R. 77,
2003 SCC 63.
Statutes and Regulations Cited
Civil Service Act,
S.N.B. 1984, c. C‑5.1, s. 20.
Constitution Act, 1867,
ss. 96 to 101 .
Employment Standards Act, S.N.B. 1982, c. E‑7.2.
Extradition Act,
R.S.C. 1985, c. E‑23.
Human Rights Act,
R.S.N.B. 1973, c. H‑11.
Interpretation Act,
R.S.C. 1985, c. I‑21, s. 23(1) .
Interpretation Act,
R.S.N.B. 1973, c. I‑13, s. 20.
Public Service Labour Relations
Act, R.S.N.B. 1973, c. P‑25,
ss. 92(1), 97, 97(2.1) [ad. 1990, c. 30, s. 35], 100.1 [idem,
s. 40], 101(1) [idem, s. 41], (2) [idem].
Authors Cited
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appointment”.
Brown, Donald J. M., and John M.
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Cromwell, Thomas A. “Appellate Review: Policy
and Pragmatism”. In 2006 Pitblado Lectures, Appellate Courts: Policy, Law
and Practice. Winnipeg: Fort Garry, 2006, V‑1.
de Smith, Stanley A. Judicial Review of
Administrative Action, 5th ed. By Lord Woolf and Jeffrey Jowell.
London: Sweet & Maxwell, 1995.
Dyzenhaus, David. “The Politics of Deference:
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Mullan, David J. Administrative Law.
Toronto: Irwin Law, 2001.
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Mullan, David J. “Establishing the Standard of
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Sossin, Lorne, and Colleen M. Flood, “The
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Law, 8th ed. by Sir William Wade and Christopher Forsyth. New York:
Oxford University Press, 2000.
APPEAL from a judgment of the New Brunswick Court of
Appeal (Turnbull, Daigle and Robertson JJ.A.) (2006), 297 N.B.R. (2d) 151,
265 D.L.R. (4th) 609, 44 Admin. L.R. (4th) 92, 48 C.C.E.L. (3d) 196, 2006 CLLC
¶220‑030, [2006] N.B.J. No. 118 (QL), 2006 CarswellNB 155, 2006 NBCA
27, affirming a judgment of Rideout J. (2005), 293 N.B.R. (2d) 5, 43
C.C.E.L. (3d) 205, [2005] N.B.J. No. 327 (QL), 2005 CarswellNB 444, 2005
NBQB 270, quashing a preliminary ruling and quashing in part an award made by
an adjudicator. Appeal dismissed.
J. Gordon Petrie,
Q.C., and Clarence L. Bennett, for the appellant.
C. Clyde Spinney,
Q.C., and Keith P. Mullin, for the respondent.
The judgment of McLachlin C.J. and Bastarache, LeBel,
Fish and Abella JJ. was delivered by
Bastarache and LeBel
JJ. —
I. Introduction
[1]
This appeal calls on the Court to consider, once again, the
troubling question of the approach to be taken in judicial review of decisions
of administrative tribunals. The recent history of judicial review in Canada
has been marked by ebbs and flows of deference, confounding tests and new words
for old problems, but no solutions that provide real guidance for litigants,
counsel, administrative decision makers or judicial review judges. The time
has arrived for a reassessment of the question.
A. Facts
[2]
The appellant, David Dunsmuir, was employed by the Department of
Justice for the Province of New Brunswick. His employment began on February
25, 2002, as a Legal Officer in the Fredericton Court Services Branch. The
appellant was placed on an initial six-month probationary term. On March 14,
2002, by Order‑in‑Council, he was appointed to the offices of Clerk
of the Court of Queen’s Bench, Trial Division, Administrator of the Court of
Queen’s Bench, Family Division, and Clerk of the Probate Court of New
Brunswick, all for the Judicial District of Fredericton.
[3]
The employment relationship was not perfect. The appellant’s
probationary period was extended twice, to the maximum 12 months. At the end
of each probationary period, the appellant was given a performance review. The
first such review, which occurred in August 2002, identified four specific
areas for improvement. The second review, three months later, cited the same
four areas for development, but noted improvements in two. At the end of the
third probationary period, the Regional Director of Court Services noted that
the appellant had met all expectations and his employment was continued on a
permanent basis.
[4]
The employer reprimanded the appellant on three separate
occasions during the course of his employment. The first incident occurred in
July 2002. The appellant had sent an email to the Chief Justice of the Court
of Queen’s Bench objecting to a request that had been made by the judge of the
Fredericton Judicial District for the preparation of a practice directive. The
Regional Director issued a reprimand letter to the appellant, explaining that
the means he had used to raise his concerns were inappropriate and exhibited
serious error in judgment. In the event that a similar concern arose in the
future, he was directed to discuss the matter first with the Registrar or the
Regional Director. The letter warned that failure to comply would lead to
additional disciplinary measures and, if necessary, to dismissal.
[5]
A second disciplinary measure occurred when, in April 2004, it
came to the attention of the Assistant Deputy Minister that the appellant was
being advertised as a lecturer at legal seminars offered in the private
sector. The appellant had inquired previously into the possibility of doing
legal work outside his employment. In February 2004, the Assistant Deputy
Minister had informed him that lawyers in the public service should not
practise law in the private sector. A month later, the appellant wrote a
letter to the Law Society of New Brunswick stating that his participation as a
non-remunerated lecturer had been vetted by his employer, who had voiced no
objection. On June 3, 2004, the Assistant Deputy Minister issued to the
appellant written notice of a one-day suspension with pay regarding the
incident. The letter also referred to issues regarding the appellant’s work
performance, including complaints from unnamed staff, lawyers and members of
the public regarding his difficulties with timeliness and organization. This
second letter concluded with the statement that “[f]uture occurrences of this
nature and failure to develop more efficient organized work habits will result
in disciplinary action up to and including dismissal.”
[6]
Third, on July 21, 2004, the Regional Director wrote a formal
letter of reprimand to the appellant regarding three alleged incidents relating
to his job performance. This letter, too, concluded with a warning that the
appellant’s failure to improve his organization and timeliness would result in
further disciplinary action up to and including dismissal. The appellant
responded to the letter by informing the Regional Director that he would be
seeking legal advice and, until that time, would not meet with her to discuss
the matter further.
[7]
A review of the appellant’s work performance had been due in
April 2004 but did not take place. The appellant met with the Regional Director
on a couple of occasions to discuss backlogs and organizational problems.
Complaints were relayed to her by staff but they were not documented and it is
unknown how many complaints there had been. The Regional Director notified the
appellant on August 11, 2004, that his performance review was overdue and would
occur by August 20. A meeting had been arranged for August 19 between the
appellant, the Regional Director, the Assistant Deputy Minister and counsel for
the appellant and the employer. While preparing for that meeting, the Regional
Director and the Assistant Deputy Minister concluded that the appellant was not
right for the job. The scheduled meeting was cancelled and a termination
notice was faxed to the appellant. A formal letter of termination from the
Deputy Minister was delivered to the appellant’s lawyer the next day. The
letter terminated the appellant’s employment with the Province of New
Brunswick, effective December 31, 2004. It read, in relevant part:
I regret to
advise you that I have come to the conclusion that your particular skill set
does not meet the needs of your employer in your current position, and that it
is advisable to terminate your employment on reasonable notice, pursuant to
section 20 of the Civil Service Act. You are accordingly hereby advised
that your employment with the Province of New Brunswick will terminate on
December 31, 2004. Cause for termination is not alleged.
To aid in your
search for other employment, you are not required to report to work during the
notice period and your salary will be continued until the date indicated or for
such shorter period as you require either to find a job with equivalent
remuneration, or you commence self‑employment.
. . .
In the
circumstances, we would request that you avoid returning to the workplace until
your departure has been announced to staff, and until you have returned your
keys and government identification to your supervisor, Ms. Laundry as well as
any other property of the employer still in your possession . . . .
[8]
On February 3, 2005, the appellant was removed from his statutory
offices by order of the Lieutenant-Governor in Council.
[9]
The appellant commenced the grievance process under s. 100.1 of
the Public Service Labour Relations Act, R.S.N.B. 1973, c. P-25 (“PSLRA”;
see Appendix), by letter to the Deputy Minister on September 1, 2004. That
provision grants non-unionized employees of the provincial public service the
right to file a grievance with respect to a “discharge, suspension or a
financial penalty” (s. 100.1(2)). The appellant asserted several grounds of
complaint in his grievance letter, in particular, that the reasons for the
employer’s dissatisfaction were not made known; that he did not receive a
reasonable opportunity to respond to the employer’s concerns; that the
employer’s actions in terminating him were without notice, due process or
procedural fairness; and that the length of the notice period was inadequate.
The grievance was denied. The appellant then gave notice that he would refer
the grievance to adjudication under the PSLRA. The adjudicator was
selected by agreement of the parties and appointed by the Labour and Employment
Board.
[10]
The adjudication hearing was convened and counsel for the
appellant produced as evidence a volume of 169 documents. Counsel for the
respondent objected to the inclusion of almost half of the documents. The
objection was made on the ground that the documents were irrelevant since the
appellant’s dismissal was not disciplinary but rather was a termination on
reasonable notice. The preliminary issue therefore arose of whether, where
dismissal was with notice or pay in lieu thereof, the adjudicator was authorized
to assess the reasons underlying the province’s decision to terminate.
Following his preliminary ruling on that issue, the adjudicator heard and
decided the merits of the grievance.
B. Decisions
of the Adjudicator
(1) Preliminary Ruling (January 10, 2005)
[11]
The adjudicator began his preliminary ruling by considering s.
97(2.1) of the PSLRA. He reasoned that because the appellant was not
included in a bargaining unit and there was no collective agreement or arbitral
award, the section ought to be interpreted to mean that where an adjudicator
determines that an employee has been discharged for cause, the adjudicator may
substitute another penalty for the discharge as seems just and reasonable in
the circumstances. The adjudicator considered and relied on the decision of
the New Brunswick Court of Appeal in Chalmers (Dr. Everett) Hospital v. Mills
(1989), 102 N.B.R. (2d) 1.
[12]
Turning to s. 100.1 of the PSLRA, he noted the referential
incorporation of s. 97 in s. 100.1(5). He stated that such incorporation
“necessarily means that an adjudicator has jurisdiction to make the determination
described in s. 97(2.1), i.e. that an employee has been discharged or otherwise
disciplined for cause” (p. 5). The adjudicator noted that an employee to whom
s. 20 of the Civil Service Act, S.N.B. 1984, c. C-5.1 (see Appendix),
applies may be discharged for cause, with reasonable notice or with pay in lieu
of reasonable notice. He concluded by holding that an employer cannot avoid an
inquiry into its real reasons for dismissing an employee by stating that cause
is not alleged. Rather, a grieving employee is entitled to an adjudication as
to whether a discharge purportedly with notice or pay in lieu thereof was in
fact for cause. He therefore held that he had jurisdiction to make such a
determination.
(2) Ruling on the Merits (February 16, 2005)
[13]
In his decision on the merits, released shortly thereafter, the
adjudicator found that the termination letter of August 19 effected termination
with pay in lieu of notice. The employer did not allege cause. Inquiring into
the reasons for dismissal the adjudicator was satisfied that, on his view of
the evidence, the termination was not disciplinary. Rather, the decision to
terminate was based on the employer’s concerns about the appellant’s work
performance and his suitability for the positions he held.
[14]
The adjudicator then considered the appellant’s claim that he was
dismissed without procedural fairness in that the employer did not inform him
of the reasons for its dissatisfaction and did not give him an opportunity to
respond. The adjudicator placed some responsibility on the employer for
cancelling the performance review scheduled for August 19. He also opined that
the employer was not so much dissatisfied with the appellant’s quality of work
as with his lack of organization.
[15]
The adjudicator’s decision relied on Knight v. Indian Head
School Division No. 19, [1990] 1 S.C.R. 653, for the relevant legal
principles regarding the right of “at pleasure” office holders to procedural
fairness. As the appellant’s employment was “hybrid in character” (para. 53) _ he was both a Legal Officer under
the Civil Service Act and, as Clerk, an office holder “at pleasure” _ the adjudicator held that the
appellant was entitled to procedural fairness in the employer’s decision to
terminate his employment. He declared that the termination was void ab
initio and ordered the appellant reinstated as of August 19, 2004, the date
of dismissal.
[16]
The adjudicator added that in the event that his reinstatement
order was quashed on judicial review, he would find the appropriate notice
period to be eight months.
C. Judicial
History
(1) Court of Queen’s Bench of New Brunswick (2005), 293 N.B.R. (2d)
5, 2005 NBQB 270
[17]
The Province of New Brunswick applied for judicial review of the
adjudicator’s decision on numerous grounds. In particular, it argued that the
adjudicator had exceeded his jurisdiction in his preliminary ruling by holding
that he was authorized to determine whether the termination was in fact for
cause. The Province further argued that the adjudicator had acted incorrectly
or unreasonably in deciding the procedural fairness issue. The application was
heard by Rideout J.
[18]
The reviewing judge applied a pragmatic and functional analysis,
considering the presence of a full privative clause in the PSLRA, the
relative expertise of adjudicators appointed under the PSLRA, the
purposes of ss. 97(2.1) and 100.1 of the PSLRA as well as s. 20 of the Civil
Service Act, and the nature of the question as one of statutory
interpretation. He concluded that the correctness standard of review applied
and that the court need not show curial deference to the decision of an
adjudicator regarding the interpretation of those statutory provisions.
[19]
Regarding the preliminary ruling, the reviewing judge noted that
the appellant was employed “at pleasure” and fell under s. 20 of the Civil
Service Act. In his view, the adjudicator had overlooked the effects of s.
20 and had mistakenly given ss. 97(2.1) and 100.1 of the PSLRA a
substantive, rather than procedural, interpretation. Those sections are
procedural in nature. They provide an employee with a right to grieve his or
her dismissal and set out the steps that must be followed to pursue a
grievance. The adjudicator is bound to apply the contractual provisions as
they exist and has no authority to change those provisions. Thus, in cases in
which s. 20 of the Civil Service Act applies, the adjudicator must apply
the ordinary rules of contract. The reviewing judge held that the adjudicator
had erred in removing the words “and the collective agreement or arbitral award
does not contain a specific penalty for the infraction that resulted in the
employee being discharged or otherwise disciplined” from s. 97(2.1). Those
words limit s. 97(2.1) to employees who are not employed “at pleasure”. In the
view of the reviewing judge, the adjudicator did not have jurisdiction to
inquire into the reasons for the termination. His authority was limited to
determining whether the notice period was reasonable. Having found that the
adjudicator had exceeded his jurisdiction, the reviewing judge quashed his
preliminary ruling.
[20]
With respect to the adjudicator’s award on the merits, the
reviewing judge commented that some aspects of the decision are factual in
nature and should be reviewed on a patent unreasonableness standard, while
other aspects involve questions of mixed fact and law which are subject to a
reasonableness simpliciter standard. The reviewing judge agreed with
the Province that the adjudicator’s reasons do not stand up to a “somewhat
probing examination” (para. 76). The reviewing judge held that the
adjudicator’s award of reinstatement could not stand as he was not empowered by
the PSLRA to make Lieutenant-Governor in Council appointments. In
addition, by concluding that the decision was void ab initio owing to a
lack of procedural fairness, the adjudicator failed to consider the doctrine of
adequate alternative remedy. The appellant received procedural fairness by
virtue of the grievance hearing before the adjudicator. The adjudicator had
provisionally increased the notice period to eight months _ that provided an adequate alternative
remedy. Concluding that the adjudicator’s decision did not stand up to review
on a reasonableness simpliciter standard, the reviewing judge quashed
the reinstatement order but upheld the adjudicator’s provisional award of eight
months’ notice.
(2) Court of Appeal of New Brunswick (2006), 297 N.B.R. (2d) 151,
2006 NBCA 27
[21]
The appellant appealed the decision of the reviewing judge. The
Court of Appeal, Robertson J.A. writing, held that the proper standard with
respect to the interpretation of the adjudicator’s authority under the PSLRA was
reasonableness simpliciter and that the reviewing judge had erred in
adopting the correctness standard. The court reached that conclusion by
proceeding through a pragmatic and functional analysis, placing particular
emphasis on the presence of a full privative clause in the PSLRA and the
relative expertise of an adjudicator in the labour relations and employment
context. The court also relied on the decision of this Court in Alberta
Union of Provincial Employees v. Lethbridge Community College, [2004] 1
S.C.R. 727, 2004 SCC 28. However, the court noted that the adjudicator’s
interpretation of the Mills decision warranted no deference and that
“correctness is the proper review standard when it comes to the interpretation
and application of caselaw” (para. 17).
[22]
Applying the reasonableness simpliciter standard, the
court held that the adjudicator’s decision was unreasonable. Robertson J.A.
began by considering s. 20 of the Civil Service Act and noted that under
the ordinary rules of contract, an employer holds the right to dismiss an
employee with cause or with reasonable notice or with pay in lieu of notice.
Section 20 of the Civil Service Act limits the Crown’s common law right
to dismiss its employees without cause or notice. Robertson J.A. reasoned that
s. 97(2.1) of the PSLRA applies in principle to non-unionized
employees, but that it is only where an employee has been discharged or
disciplined for cause that an adjudicator may substitute such other
penalty as seems just and reasonable in the circumstances. Where the employer
elects to dismiss with notice or pay in lieu of notice, however,
s. 97(2.1) does not apply. In such circumstances, the employee may only
grieve the length of the notice period. The only exception is where the
employee alleges that the decision to terminate was based on a prohibited
ground of discrimination.
[23]
On the issue of procedural fairness, the court found that the
appellant exercised his right to grieve, and thus a finding that the duty of
fairness had been breached was without legal foundation. The court dismissed
the appeal.
II. Issues
[24]
At issue, firstly is the approach to be taken in the judicial
review of a decision of a particular adjudicative tribunal which was seized of
a grievance filed by the appellant after his employment was terminated. This
appeal gives us the opportunity to re-examine the foundations of judicial
review and the standards of review applicable in various situations.
[25]
The second issue involves examining whether the appellant who
held an office “at pleasure” in the civil service of New Brunswick, had the
right to procedural fairness in the employer’s decision to terminate him. On
this occasion, we will reassess the rule that has found formal expression in Knight.
[26]
The two types of judicial review, on the merits and on the
process, are therefore engaged in this case. Our review of the system will
therefore be comprehensive, which is preferable since a holistic approach is
needed when considering fundamental principles.
III. Issue
1: Review of the Adjudicator’s Statutory Interpretation Determination
A. Judicial
Review
[27]
As a matter of constitutional law, judicial review is intimately
connected with the preservation of the rule of law. It is essentially that
constitutional foundation which explains the purpose of judicial review and
guides its function and operation. Judicial review seeks to address an
underlying tension between the rule of law and the foundational democratic
principle, which finds an expression in the initiatives of Parliament and
legislatures to create various administrative bodies and endow them with broad
powers. Courts, while exercising their constitutional functions of judicial
review, must be sensitive not only to the need to uphold the rule of law, but
also to the necessity of avoiding undue interference with the discharge of
administrative functions in respect of the matters delegated to administrative
bodies by Parliament and legislatures.
[28]
By virtue of the rule of law principle, all exercises of public
authority must find their source in law. All decision-making powers have legal
limits, derived from the enabling statute itself, the common or civil law or
the Constitution. Judicial review is the means by which the courts supervise
those who exercise statutory powers, to ensure that they do not overstep their
legal authority. The function of judicial review is therefore to ensure the
legality, the reasonableness and the fairness of the administrative process and
its outcomes.
[29]
Administrative powers are exercised by decision makers according
to statutory regimes that are themselves confined. A decision maker may not
exercise authority not specifically assigned to him or her. By acting in the
absence of legal authority, the decision maker transgresses the principle of
the rule of law. Thus, when a reviewing court considers the scope of a
decision-making power or the jurisdiction conferred by a statute, the standard
of review analysis strives to determine what authority was intended to be given
to the body in relation to the subject matter. This is done within the context
of the courts’ constitutional duty to ensure that public authorities do not
overreach their lawful powers: Crevier v. Attorney General of Quebec,
[1981] 2 S.C.R. 220, at p. 234; also Dr. Q v. College of Physicians and
Surgeons of British Columbia, [2003] 1 S.C.R. 226, 2003 SCC 19, at para.
21.
[30]
In addition to the role judicial review plays in upholding the
rule of law, it also performs an important constitutional function in
maintaining legislative supremacy. As noted by Justice Thomas Cromwell, “the
rule of law is affirmed by assuring that the courts have the final say on the
jurisdictional limits of a tribunal’s authority; second, legislative supremacy
is affirmed by adopting the principle that the concept of jurisdiction should
be narrowly circumscribed and defined according to the intent of the
legislature in a contextual and purposeful way; third, legislative supremacy is
affirmed and the court-centric conception of the rule of law is reined in by
acknowledging that the courts do not have a monopoly on deciding all questions
of law” (“Appellate Review: Policy and Pragmatism”, in 2006 Isaac Pitblado
Lectures, Appellate Courts: Policy, Law and Practice, V-1, at p.
V-12). In essence, the rule of law is maintained because the courts have the
last word on jurisdiction, and legislative supremacy is assured because
determining the applicable standard of review is accomplished by establishing
legislative intent.
[31]
The legislative branch of government cannot remove the
judiciary’s power to review actions and decisions of administrative bodies for
compliance with the constitutional capacities of the government. Even a
privative clause, which provides a strong indication of legislative intent,
cannot be determinative in this respect (Executors of the Woodward Estate v.
Minister of Finance, [1973] S.C.R. 120, at p. 127). The inherent power of
superior courts to review administrative action and ensure that it does not
exceed its jurisdiction stems from the judicature provisions in ss. 96 to 101
of the Constitution Act, 1867 : Crevier. As noted by Beetz J. in U.E.S.,
Local 298 v. Bibeault, [1988] 2 S.C.R. 1048, at p. 1090, “[t]he role of the
superior courts in maintaining the rule of law is so important that it is given
constitutional protection”. In short, judicial review is constitutionally
guaranteed in Canada, particularly with regard to the definition and
enforcement of jurisdictional limits. As Laskin C.J. explained in Crevier:
Where . . . questions of law have been specifically covered in
a privative enactment, this Court, as in Farrah, has not hesitated to
recognize this limitation on judicial review as serving the interests of an
express legislative policy to protect decisions of adjudicative agencies from
external correction. Thus, it has, in my opinion, balanced the competing
interests of a provincial Legislature in its enactment of substantively valid
legislation and of the courts as ultimate interpreters of the British North
America Act and s. 96 thereof. The same considerations do not, however,
apply to issues of jurisdiction which are not far removed from issues of
constitutionality. It cannot be left to a provincial statutory tribunal, in
the face of s. 96 , to determine the limits of its own jurisdiction without
appeal or review. [pp. 237-38]
See also D. J.
Mullan, Administrative Law (2001), at p. 50.
[32]
Despite the clear, stable constitutional foundations of the
system of judicial review, the operation of judicial review in Canada has been
in a constant state of evolution over the years, as courts have attempted to
devise approaches to judicial review that are both theoretically sound and
effective in practice. Despite efforts to refine and clarify it, the present
system has proven to be difficult to implement. The time has arrived to
re-examine the Canadian approach to judicial review of administrative decisions
and develop a principled framework that is more coherent and workable.
[33]
Although the instant appeal deals with the particular problem of
judicial review of the decisions of an adjudicative tribunal, these reasons
will address first and foremost the structure and characteristics of the system
of judicial review as a whole. In the wake of Baker v. Canada (Minister of
Citizenship and Immigration), [1999] 2 S.C.R. 817, Suresh v. Canada
(Minister of Citizenship and Immigration), [2002] 1 S.C.R. 3, 2002 SCC 1, Mount
Sinai Hospital Center v. Quebec (Minister of Health and Social Services),
[2001] 2 S.C.R. 281, 2001 SCC 41, and C.U.P.E. v. Ontario (Minister of
Labour), [2003] 1 S.C.R. 539, 2003 SCC 29, it has become apparent that the
present system must be simplified. The comments of LeBel J. in Chamberlain
v. Surrey School District No. 36, [2002] 4 S.C.R. 710, 2002 SCC 86, at
paras. 190 and 195, questioning the applicability of the “pragmatic and
functional approach” to the decisions and actions of all kinds of
administrative actors, illustrated the need for change.
B. Reconsidering
the Standards of Judicial Review
[34]
The current approach to judicial review involves three standards
of review, which range from correctness, where no deference is shown, to patent
unreasonableness, which is most deferential to the decision maker, the standard
of reasonableness simpliciter lying, theoretically, in the middle. In
our view, it is necessary to reconsider both the number and definitions of the
various standards of review, and the analytical process employed to determine
which standard applies in a given situation. We conclude that there ought to
be two standards of review _
correctness and reasonableness.
[35]
The existing system of judicial review has its roots in several
landmark decisions beginning in the late 1970s in which this Court developed
the theory of substantive review to be applied to determinations of law, and
determinations of fact and of mixed law and fact made by administrative
tribunals. In Canadian Union of Public Employees, Local 963 v. New
Brunswick Liquor Corp., [1979] 2 S.C.R. 227 (“CUPE”), Dickson J.
introduced the idea that, depending on the legal and administrative contexts, a
specialized administrative tribunal with particular expertise, which has been
given the protection of a privative clause, if acting within its jurisdiction,
could provide an interpretation of its enabling legislation that would be
allowed to stand unless “so patently unreasonable that its construction cannot
be rationally supported by the relevant legislation and demands intervention by
the court upon review” (p. 237). Prior to CUPE, judicial review
followed the “preliminary question doctrine”, which inquired into whether a
tribunal had erred in determining the scope of its jurisdiction. By simply
branding an issue as “jurisdictional”, courts could replace a decision of the
tribunal with one they preferred, often at the expense of a legislative
intention that the matter lie in the hands of the administrative tribunal. CUPE
marked a significant turning point in the approach of courts to judicial
review, most notably in Dickson J.’s warning that courts “should not be alert
to brand as jurisdictional, and therefore subject to broader curial review,
that which may be doubtfully so” (p. 233). Dickson J.’s policy of judicial
respect for administrative decision making marked the beginning of the modern
era of Canadian administrative law.
[36]
CUPE did not do away with correctness review altogether
and in Bibeault, the Court affirmed that there are still questions on
which a tribunal must be correct. As Beetz J. explained, “the
jurisdiction conferred on administrative tribunals and other bodies created by
statute is limited, and . . . such a tribunal cannot by a misinterpretation
of an enactment assume a power not given to it by the legislator” (p. 1086). Bibeault
introduced the concept of a “pragmatic and functional analysis” to determine
the jurisdiction of a tribunal, abandoning the “preliminary question” theory.
In arriving at the appropriate standard of review, courts were to consider a
number of factors including the wording of the provision conferring
jurisdiction on the tribunal, the purpose of the enabling statute, the reason
for the existence of the tribunal, the expertise of its members, and the nature
of the problem (p. 1088). The new approach would put “renewed emphasis on the
superintending and reforming function of the superior courts” (p. 1090). The
“pragmatic and functional analysis”, as it came to be known, was later expanded
to determine the appropriate degree of deference in respect of various forms of
administrative decision making.
[37]
In Canada (Director of Investigation and Research) v. Southam
Inc., [1997] 1 S.C.R. 748, a third standard of review was introduced into
Canadian administrative law. The legislative context of that case, which
provided a statutory right of appeal from the decision of a specialized
tribunal, suggested that none of the existing standards was entirely satisfactory.
As a result, the reasonableness simpliciter standard was introduced. It
asks whether the tribunal’s decision was reasonable. If so, the decision
should stand; if not, it must fall. In Southam, Iacobucci J. described
an unreasonable decision as one that “is not supported by any reasons that can
stand up to a somewhat probing examination” (para. 56) and explained that the
difference between patent unreasonableness and reasonableness simpliciter
is the “immediacy” or “obviousness” of the defect in the tribunal’s decision
(para. 57). The defect will appear on the face of a patently unreasonable
decision, but where the decision is merely unreasonable, it will take a
searching review to find the defect.
[38]
The three standards of review have since remained in Canadian
administrative law, the approach to determining the appropriate standard of
review having been refined in Pushpanathan v. Canada (Minister of
Citizenship and Immigration), [1998] 1 S.C.R. 982.
[39]
The operation of three standards of review has not been without
practical and theoretical difficulties, neither has it been free of criticism.
One major problem lies in distinguishing between the patent unreasonableness
standard and the reasonableness simpliciter standard. The difficulty in
distinguishing between those standards contributes to the problem of choosing
the right standard of review. An even greater problem lies in the application
of the patent unreasonableness standard, which at times seems to require
parties to accept an unreasonable decision.
[40]
The definitions of the patent unreasonableness standard that
arise from the case law tend to focus on the magnitude of the defect and on the
immediacy of the defect (see Toronto (City) v. C.U.P.E., Local 79,
[2003] 3 S.C.R. 77, 2003 SCC 63, at para. 78, per LeBel J.). Those two
hallmarks of review under the patent unreasonableness standard have been used
consistently in the jurisprudence to distinguish it from review under the
standard of reasonableness simpliciter. As it had become clear that,
after Southam, lower courts were struggling with the conceptual
distinction between patent unreasonableness and reasonableness simpliciter,
Iacobucci J., writing for the Court in Law Society of New Brunswick v.
Ryan, [2003] 1 S.C.R. 247, 2003 SCC 20, attempted to bring some clarity to
the issue. He explained the different operations of the two deferential
standards as follows, at paras. 52-53:
[A] patently
unreasonable defect, once identified, can be explained simply and easily, leaving
no real possibility of doubting that the decision is defective. A patently
unreasonable decision has been described as “clearly irrational” or “evidently
not in accordance with reason” . . . . A decision that is patently
unreasonable is so flawed that no amount of curial deference can justify
letting it stand.
A decision may be unreasonable without being patently
unreasonable when the defect in the decision is less obvious and might only be
discovered after “significant searching or testing” (Southam, supra,
at para. 57). Explaining the defect may require a detailed exposition to show
that there are no lines of reasoning supporting the decision which could
reasonably lead that tribunal to reach the decision it did.
[41]
As discussed by LeBel J. at length in Toronto (City) v.
C.U.P.E., notwithstanding the increased clarity that Ryan brought to
the issue and the theoretical differences between the standards of patent
unreasonableness and reasonableness simpliciter, a review of the cases
reveals that any actual difference between them in terms of their operation
appears to be illusory (see also the comments of Abella J. in Council of
Canadians with Disabilities v. Via Rail Canada Inc., [2007] 1 S.C.R. 650,
2007 SCC 15, at paras. 101‑3). Indeed, even this Court divided when
attempting to determine whether a particular decision was “patently
unreasonable”, although this should have been self-evident under the existing
test (see C.U.P.E. v. Ontario (Minister of Labour)). This result is
explained by the fact that both standards are based on the idea that there
might be multiple valid interpretations of a statutory provision or answers to
a legal dispute and that courts ought not to interfere where the tribunal’s
decision is rationally supported. Looking to either the magnitude or the
immediacy of the defect in the tribunal’s decision provides no meaningful way
in practice of distinguishing between a patently unreasonable and an
unreasonable decision. As Mullan has explained:
[T]o maintain
a position that it is only the “clearly irrational” that will cross the
threshold of patent unreasonableness while irrationality simpliciter
will not is to make a nonsense of the law. Attaching the adjective “clearly”
to irrational is surely a tautology. Like “uniqueness”, irrationality either
exists or it does not. There cannot be shades of irrationality.
See D. J.
Mullan, “Recent Developments in Standard of Review”, in Canadian Bar
Association (Ontario), Taking the Tribunal to Court: A Practical Guide for
Administrative Law Practitioners (2000), at p. 25.
[42]
Moreover, even if one could conceive of a situation in which a
clearly or highly irrational decision were distinguishable from a merely
irrational decision, it would be unpalatable to require parties to accept an
irrational decision simply because, on a deferential standard, the
irrationality of the decision is not clear enough. It is also
inconsistent with the rule of law to retain an irrational decision. As LeBel
J. explained in his concurring reasons in Toronto (City) v. C.U.P.E., at
para. 108:
In the end, the essential question remains the same under both
standards: was the decision of the adjudicator taken in accordance with
reason? Where the answer is no, for instance because the legislation in
question cannot rationally support the adjudicator’s interpretation, the error
will invalidate the decision, regardless of whether the standard applied is
reasonableness simpliciter or patent unreasonableness . . . .
See also Voice
Construction Ltd. v. Construction & General Workers’ Union, Local 92,
[2004] 1 S.C.R. 609, 2004 SCC 23, at paras. 40-41, per LeBel J.
C. Two
Standards of Review
[43]
The Court has moved from a highly formalistic, artificial
“jurisdiction” test that could easily be manipulated, to a highly contextual
“functional” test that provides great flexibility but little real on-the-ground
guidance, and offers too many standards of review. What is needed is a test
that offers guidance, is not formalistic or artificial, and permits review
where justice requires it, but not otherwise. A simpler test is needed.
(1) Defining the Concepts of Reasonabless and Correctness
[44]
As explained above, the patent unreasonableness standard was
developed many years prior to the introduction of the reasonableness simpliciter
standard in Southam. The intermediate standard was developed to respond
to what the Court viewed as problems in the operation of judicial review in
Canada, particularly the perceived all-or-nothing approach to deference, and in
order to create a more finely calibrated system of judicial review (see also L.
Sossin and C. M. Flood, “The Contextual Turn: Iacobucci’s Legacy and the
Standard of Review in Administrative Law” (2007), 57 U.T.L.J. 581).
However, the analytical problems that arise in trying to apply the different
standards undercut any conceptual usefulness created by the inherently greater
flexibility of having multiple standards of review. Though we are of the view
that the three-standard model is too difficult to apply to justify its
retention, now, several years after Southam, we believe that it would be
a step backwards to simply remove the reasonableness simpliciter
standard and revert to pre-Southam law. As we see it, the problems that
Southam attempted to remedy with the introduction of the intermediate
standard are best addressed not by three standards of review, but by two
standards, defined appropriately.
[45]
We therefore conclude that the two variants of reasonableness
review should be collapsed into a single form of “reasonableness” review. The
result is a system of judicial review comprising two standards _ correctness and reasonableness. But
the revised system cannot be expected to be simpler and more workable unless
the concepts it employs are clearly defined.
[46]
What does this revised reasonableness standard mean?
Reasonableness is one of the most widely used and yet most complex legal
concepts. In any area of the law we turn our attention to, we find ourselves
dealing with the reasonable, reasonableness or rationality. But what is a
reasonable decision? How are reviewing courts to identify an unreasonable
decision in the context of administrative law and, especially, of judicial
review?
[47]
Reasonableness is a deferential standard animated by the
principle that underlies the development of the two previous standards of
reasonableness: certain questions that come before administrative tribunals do
not lend themselves to one specific, particular result. Instead, they may give
rise to a number of possible, reasonable conclusions. Tribunals have a margin
of appreciation within the range of acceptable and rational solutions. A court
conducting a review for reasonableness inquires into the qualities that make a
decision reasonable, referring both to the process of articulating the reasons
and to outcomes. In judicial review, 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.
[48]
The move towards a single reasonableness standard does not pave
the way for a more intrusive review by courts and does not represent a return
to pre-Southam formalism. In this respect, the concept of deference, so
central to judicial review in administrative law, has perhaps been
insufficiently explored in the case law. What does deference mean in this
context? Deference is both an attitude of the court and a requirement of the
law of judicial review. It does not mean that courts are subservient to the
determinations of decision makers, or that courts must show blind reverence to
their interpretations, or that they may be content to pay lip service to the
concept of reasonableness review while in fact imposing their own view.
Rather, deference imports respect for the decision-making process of
adjudicative bodies with regard to both the facts and the law. The notion of
deference “is rooted in part in a respect for governmental decisions to create
administrative bodies with delegated powers” (Canada (Attorney General) v.
Mossop, [1993] 1 S.C.R. 554, at p. 596, per L’Heureux-Dubé J.,
dissenting). We agree with David Dyzenhaus where he states that the concept of
“deference as respect” requires of the courts “not submission but a respectful
attention to the reasons offered or which could be offered in support of a
decision”: “The Politics of Deference: Judicial Review and Democracy”, in M.
Taggart, ed., The Province of Administrative Law (1997), 279, at p. 286
(quoted with approval in Baker, at para. 65, per L’Heureux-Dubé
J.; Ryan, at para. 49).
[49]
Deference in the context of the reasonableness standard therefore
implies that courts will give due consideration to the determinations of
decision makers. As Mullan explains, a policy of deference “recognizes the
reality that, in many instances, those working day to day in the implementation
of frequently complex administrative schemes have or will develop a
considerable degree of expertise or field sensitivity to the imperatives and
nuances of the legislative regime”: D. J. Mullan, “Establishing the Standard of
Review: The Struggle for Complexity?” (2004), 17 C.J.A.L.P. 59, at p.
93. In short, deference requires respect for the legislative choices to leave some
matters in the hands of administrative decision makers, for the processes and
determinations that draw on particular expertise and experiences, and for the
different roles of the courts and administrative bodies within the Canadian
constitutional system.
[50]
As important as it is that courts have a proper understanding of
reasonableness review as a deferential standard, it is also without question
that the standard of correctness must be maintained in respect of
jurisdictional and some other questions of law. This promotes just decisions
and avoids inconsistent and unauthorized application of law. When applying the
correctness standard, a reviewing court will not show deference to the decision
maker’s reasoning process; it will rather undertake its own analysis of the
question. The analysis will bring the court to decide whether it agrees with
the determination of the decision maker; if not, the court will substitute its
own view and provide the correct answer. From the outset, the court must ask
whether the tribunal’s decision was correct.
(2) Determining the Appropriate Standard of Review
[51]
Having dealt with the nature of the standards of review, we now
turn our attention to the method for selecting the appropriate standard in
individual cases. As we will now demonstrate, questions of fact, discretion
and policy as well as questions where the legal issues cannot be easily
separated from the factual issues generally attract a standard of
reasonableness while many legal issues attract a standard of correctness. Some
legal issues, however, attract the more deferential standard of reasonableness.
[52]
The existence of a privative or preclusive clause gives rise to a
strong indication of review pursuant to the reasonableness standard. This
conclusion is appropriate because a privative clause is evidence of Parliament
or a legislature’s intent that an administrative decision maker be given
greater deference and that interference by reviewing courts be minimized. This
does not mean, however, that the presence of a privative clause is
determinative. The rule of law requires that the constitutional role of
superior courts be preserved and, as indicated above, neither Parliament nor
any legislature can completely remove the courts’ power to review the actions
and decisions of administrative bodies. This power is constitutionally
protected. Judicial review is necessary to ensure that the privative clause is
read in its appropriate statutory context and that administrative bodies do not
exceed their jurisdiction.
[53]
Where the question is one of fact, discretion or policy,
deference will usually apply automatically (Mossop, at pp. 599-600;
Dr. Q, at para. 29; Suresh, at paras. 29-30). We believe
that the same standard must apply to the review of questions where the legal
and factual issues are intertwined with and cannot be readily separated.
[54]
Guidance with regard to the questions that will be reviewed on a
reasonableness standard can be found in the existing case law. Deference will
usually result where a tribunal is interpreting its own statute or statutes
closely connected to its function, with which it will have particular
familiarity: Canadian Broadcasting Corp. v. Canada (Labour Relations Board),
[1995] 1 S.C.R. 157, at para. 48; Toronto (City) Board of Education v.
O.S.S.T.F., District 15, [1997] 1 S.C.R. 487, at para. 39. Deference may
also be warranted where an administrative tribunal has developed particular
expertise in the application of a general common law or civil law rule in relation
to a specific statutory context: Toronto (City) v. C.U.P.E., at para.
72. Adjudication in labour law remains a good example of the relevance of this
approach. The case law has moved away considerably from the strict position
evidenced in McLeod v. Egan, [1975] 1 S.C.R. 517, where it was held that
an administrative decision maker will always risk having its interpretation of
an external statute set aside upon judicial review.
[55]
A consideration of the following factors will lead to the
conclusion that the decision maker should be given deference and a
reasonableness test applied:
_ A
privative clause: this is a statutory direction from Parliament or a
legislature indicating the need for deference.
_ A
discrete and special administrative regime in which the decision maker has
special expertise (labour relations for instance).
_ The
nature of the question of law. A question of law that is of “central importance
to the legal system . . . and outside the . . . specialized
area of expertise” of the administrative decision maker will always attract a
correctness standard (Toronto (City) v. C.U.P.E., at para. 62). On the
other hand, a question of law that does not rise to this level may be
compatible with a reasonableness standard where the two above factors so
indicate.
[56]
If these factors, considered together, point to a standard of
reasonableness, the decision maker’s decision must be approached with deference
in the sense of respect discussed earlier in these reasons. There is nothing
unprincipled in the fact that some questions of law will be decided on the
basis of reasonableness. It simply means giving the adjudicator’s decision
appropriate deference in deciding whether a decision should be upheld, bearing
in mind the factors indicated.
[57]
An exhaustive review is not required in every case to determine
the proper standard of review. Here again, existing jurisprudence may be
helpful in identifying some of the questions that generally fall to be
determined according to the correctness standard (Cartaway Resources Corp.
(Re), [2004] 1 S.C.R. 672, 2004 SCC 26). This simply means that the
analysis required is already deemed to have been performed and need not be
repeated.
[58]
For example, correctness review has been found to apply to
constitutional questions regarding the division of powers between Parliament
and the provinces in the Constitution Act, 1867 : Westcoast Energy
Inc. v. Canada (National Energy Board), [1998] 1 S.C.R. 322. Such
questions, as well as other constitutional issues, are necessarily subject to
correctness review because of the unique role of s. 96 courts as
interpreters of the Constitution: Nova Scotia (Workers’ Compensation Board)
v. Martin, [2003] 2 S.C.R. 504, 2003 SCC 54; Mullan, Administrative Law,
at p. 60.
[59]
Administrative bodies must also be correct in their
determinations of true questions of jurisdiction or vires. We mention
true questions of vires to distance ourselves from the extended
definitions adopted before CUPE. It is important here to take a robust
view of jurisdiction. We neither wish nor intend to return to the
jurisdiction/preliminary question doctrine that plagued the jurisprudence in this
area for many years. “Jurisdiction” is intended in the narrow sense of whether
or not the tribunal had the authority to make the inquiry. In other words,
true jurisdiction questions arise where the tribunal must explicitly determine
whether its statutory grant of power gives it the authority to decide a
particular matter. The tribunal must interpret the grant of authority correctly
or its action will be found to be ultra vires or to constitute a
wrongful decline of jurisdiction: D. J. M. Brown and J. M. Evans, Judicial
Review of Administrative Action in Canada (loose‑leaf), at pp. 14-3
to 14-6. An example may be found in United Taxi Drivers’ Fellowship of
Southern Alberta v. Calgary (City), [2004] 1 S.C.R. 485, 2004 SCC 19. In
that case, the issue was whether the City of Calgary was authorized under the
relevant municipal acts to enact bylaws limiting the number of taxi plate
licences (para. 5, per Bastarache J.). That case involved the
decision-making powers of a municipality and exemplifies a true question of
jurisdiction or vires. These questions will be narrow. We reiterate
the caution of Dickson J. in CUPE that reviewing judges must not brand
as jurisdictional issues that are doubtfully so.
[60]
As mentioned earlier, courts must also continue to substitute
their own view of the correct answer where the question at issue is one of
general law “that is both of central importance to the legal system as a whole
and outside the adjudicator’s specialized area of expertise” (Toronto (City)
v. C.U.P.E., at para. 62, per LeBel J.). Because of their impact on
the administration of justice as a whole, such questions require uniform and
consistent answers. Such was the case in Toronto (City) v. C.U.P.E.,
which dealt with complex common law rules and conflicting jurisprudence on the
doctrines of res judicata and abuse of process _ issues that are at the heart of the administration of
justice (see para. 15, per Arbour J.).
[61]
Questions regarding the jurisdictional lines between two or more
competing specialized tribunals have also been subject to review on a
correctness basis: Regina Police Assn. Inc. v. Regina (City) Board of Police
Commissioners, [2000] 1 S.C.R. 360, 2000 SCC 14; Quebec (Commission des
droits de la personne et des droits de la jeunesse) v. Quebec (Attorney
General), [2004] 2 S.C.R. 185, 2004 SCC 39.
[62]
In summary, the process of judicial review involves two steps.
First, courts ascertain 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. Second, where the first inquiry proves
unfruitful, courts must proceed to an analysis of the factors making it possible
to identify the proper standard of review.
[63]
The existing approach to determining the appropriate standard of
review has commonly been referred to as “pragmatic and functional”. That name
is unimportant. Reviewing courts must not get fixated on the label at the
expense of a proper understanding of what the inquiry actually entails.
Because the phrase “pragmatic and functional approach” may have misguided
courts in the past, we prefer to refer simply to the “standard of review
analysis” in the future.
[64]
The analysis must be contextual. As mentioned above, it is
dependent on the application of a number of relevant factors, including: (1)
the presence or absence of a privative clause; (2) the purpose of the tribunal
as determined by interpretation of enabling legislation; (3) the nature of the
question at issue, and; (4) the expertise of the tribunal. In many cases, it
will not be necessary to consider all of the factors, as some of them may be
determinative in the application of the reasonableness standard in a specific
case.
D. Application
[65]
Returning to the instant appeal and bearing in mind the foregoing
discussion, we must determine the standard of review applicable to the
adjudicator’s interpretation of the PSLRA, in particular ss. 97(2.1) and
100.1, and s. 20 of the Civil Service Act. That standard of review must
then be applied to the adjudicator’s decision. In order to determine the
applicable standard, we will now examine the factors relevant to the standard
of review analysis.
(1) Proper Standard of Review on the Statutory Interpretation Issue
[66]
The specific question on this front is whether the combined
effect of s. 97(2.1) and s. 100.1 of the PSLRA permits the
adjudicator to inquire into the employer’s reason for dismissing an employee
with notice or pay in lieu of notice. This is a question of law. The question
to be answered is therefore whether in light of the privative clause, the
regime under which the adjudicator acted, and the nature of the question of law
involved, a standard of correctness should apply.
[67]
The adjudicator was appointed and empowered under the PSLRA;
s. 101(1) of that statute contains a full privative clause, stating in no
uncertain terms that “every order, award, direction, decision, declaration or
ruling of . . . an adjudicator is final and shall not be questioned or reviewed
in any court”. Section 101(2) adds that “[n]o order shall be made or process
entered, and no proceedings shall be taken in any court, whether by way of
injunction, judicial review, or otherwise, to question, review, prohibit or
restrain . . . an adjudicator in any of its or his proceedings.” The inclusion
of a full privative clause in the PSLRA gives rise to a strong indication
that the reasonableness standard of review will apply.
[68]
The nature of the regime also favours the standard of
reasonableness. This Court has often recognized the relative expertise of
labour arbitrators in the interpretation of collective agreements, and
counselled that the review of their decisions should be approached with
deference: CUPE, at pp. 235-36; Canada Safeway Ltd. v. RWDSU, Local
454, [1998] 1 S.C.R. 1079, at para. 58; Voice Construction, at para.
22. The adjudicator in this case was, in fact, interpreting his enabling
statute. Although the adjudicator was appointed on an ad hoc basis, he
was selected by the mutual agreement of the parties and, at an institutional
level, adjudicators acting under the PSLRA can be presumed to hold
relative expertise in the interpretation of the legislation that gives them
their mandate, as well as related legislation that they might often encounter
in the course of their functions. See Alberta Union of Provincial Employees
v. Lethbridge Community College. This factor also suggests a
reasonableness standard of review.
[69]
The legislative purpose confirms this view of the regime. The PSLRA
establishes a time- and cost-effective method of resolving employment
disputes. It provides an alternative to judicial determination. Section 100.1
of the PSLRA defines the adjudicator’s powers in deciding a dispute, but
it also provides remedial protection for employees who are not unionized. The
remedial nature of s. 100.1 and its provision for timely and binding
settlements of disputes also imply that a reasonableness review is appropriate.
[70]
Finally, the nature of the legal question at issue is not one
that is of central importance to the legal system and outside the specialized
expertise of the adjudicator. This also suggests that the standard of
reasonableness should apply.
[71]
Considering the privative clause, the nature of the regime, and
the nature of the question of law here at issue, we conclude that the
appropriate standard is reasonableness. We must now apply that standard to the
issue considered by the adjudicator in his preliminary ruling.
(2) Was the Adjudicator’s Interpretation Unreasonable?
[72]
While we are required to give deference to the determination of
the adjudicator, considering the decision in the preliminary ruling as a whole,
we are unable to accept that it reaches the standard of reasonableness. The
reasoning process of the adjudicator was deeply flawed. It relied on and led
to a construction of the statute that fell outside the range of admissible
statutory interpretations.
[73]
The adjudicator considered the New Brunswick Court of Appeal
decision in Chalmers (Dr. Everett) Hospital v. Mills as well as
amendments made to the PSLRA in 1990 (S.N.B. 1990, c. 30). Under the former
version of the Act, an employee could grieve “with respect to . . .
disciplinary action resulting in discharge, suspension or a financial penalty”
(s. 92(1)). The amended legislation grants the right to grieve “with
respect to discharge, suspension or a financial penalty” (PSLRA, s.
100.1(2)). The adjudicator reasoned that the referential incorporation of s.
97(2.1) in s. 100.1(5) “necessarily means that an adjudicator has jurisdiction
to make the determination described in subsection 97(2.1), i.e. that an
employee has been discharged or otherwise disciplined for cause” (p. 5).
He further stated that an employer “cannot avoid an inquiry into its real
reasons for a discharge, or exclude resort to subsection 97(2.1), by simply
stating that cause is not alleged” (ibid. (emphasis added)). The
adjudicator concluded that he could determine whether a discharge purportedly
with notice or pay in lieu of notice was in reality for cause.
[74]
The interpretation of the law is always contextual. The law does
not operate in a vacuum. The adjudicator was required to take into account the
legal context in which he was to apply the law. The employment relationship
between the parties in this case was governed by private law. The contractual
terms of employment could not reasonably be ignored. That is made clear by s.
20 of the Civil Service Act. Under the ordinary rules of contract, the
employer is entitled to discharge an employee for cause, with notice or with
pay in lieu of notice. Where the employer chooses to exercise its right to
discharge with reasonable notice or pay in lieu thereof, the employer is not
required to assert cause for discharge. The grievance process cannot have the
effect of changing the terms of the contract of employment. The respondent
chose to exercise its right to terminate without alleging cause in this case.
By giving the PSLRA an interpretation that allowed him to inquire into
the reasons for discharge where the employer had the right not to provide _ or even have _ such reasons, the adjudicator adopted a reasoning
process that was fundamentally inconsistent with the employment contract and,
thus, fatally flawed. For this reason, the decision does not fall within the
range of acceptable outcomes that are defensible in respect of the facts and
the law.
[75]
The decision of the adjudicator treated the appellant, a
non-unionized employee, as a unionized employee. His interpretation of the PSLRA,
which permits an adjudicator to inquire into the reasons for discharge where
notice is given and, under s. 97(2.1), substitute a penalty that he or she
determines just and reasonable in the circumstances, creates a requirement that
the employer show cause before dismissal. There can be no justification for
this; no reasonable interpretation can lead to that result. Section 100.1(5)
incorporates s. 97(2.1) by reference into the determination of grievances
brought by non-unionized employees. The employees subject to the PSLRA
are usually unionized and the terms of their employment are determined by
collective agreement; s. 97(2.1) explicitly refers to the collective
agreement context. Section 100.1(5) referentially incorporates s. 97(2.1)
mutatis mutandis into the non-collective agreement context so that
non-unionized employees who are discharged for cause and without notice
have the right to grieve the discharge and have the adjudicator substitute
another penalty as seems just and reasonable in the circumstances. Therefore,
the combined effect of s. 97(2.1) and s. 100.1 cannot, on any reasonable
interpretation, remove the employer’s right under contract law to discharge an
employee with reasonable notice or pay in lieu of notice.
[76]
The interpretation of the adjudicator was simply unreasonable in
the context of the legislative wording and the larger labour context in which
it is embedded. It must be set aside. Nevertheless, it must be acknowledged
that his interpretation of the PSLRA was ultimately inconsequential to
the overall determination of the grievance, since the adjudicator made no
finding as to whether the discharge was or was not, in fact, for cause. The
decision on the merits, which resulted in an order that the appellant be
reinstated, instead turned on the adjudicator’s decision on a separate issue _ whether the appellant was entitled
to and, if so, received procedural fairness with regard to the employer’s
decision to terminate his employment. This issue is discrete and isolated from
the statutory interpretation issue, and it raises very different
considerations.
IV. Issue 2:
Review of the Adjudicator’s Procedural Fairness Determination
[77]
Procedural fairness has many faces. It is at issue where an
administrative body may have prescribed rules of procedure that have been
breached. It is also concerned with general principles involving the right to
answer and defence where one’s rights are affected. In this case, the
appellant raised in his grievance letter that the reasons for the employer’s
dissatisfaction were not specified and that he did not have a reasonable
opportunity to respond to the employer’s concerns. There was, in his view,
lack of due process and a breach of procedural fairness.
[78]
The procedural fairness issue was dealt with only briefly by the
Court of Appeal. Robertson J.A. mentioned at the end of his reasons that a duty
of fairness did not arise in this case since the appellant had been terminated
with notice and had exercised his right to grieve. Before this Court, however,
the appellant argued that he was entitled to procedural fairness as a result of
this Court’s jurisprudence. Although ultimately we do not agree with the
appellant, his contention raises important issues that need to be examined more
fully.
A. Duty of
Fairness
[79]
Procedural fairness is a cornerstone of modern Canadian
administrative law. Public decision makers are required to act fairly in coming
to decisions that affect the rights, privileges or interests of an individual.
Thus stated the principle is easy to grasp. It is not, however, always easy to
apply. As has been noted many times, “the concept of procedural fairness is
eminently variable and its content is to be decided in the specific context of
each case” (Knight, at p. 682; Baker, at para. 21; Moreau‑Bérubé
v. New Brunswick (Judicial Council), [2002] 1 S.C.R. 249, 2002 SCC 11, at
paras. 74‑75).
[80]
This case raises the issue of the extent to which a duty of
fairness applies to the dismissal of a public employee pursuant to a contract
of employment. The grievance adjudicator concluded that the appellant had been
denied procedural fairness because he had not been granted a hearing by the
employer before being dismissed with four months’ pay in lieu of notice. This
conclusion was said to flow from this Court’s decision in Knight, where
it was held that the holder of an office “at pleasure” was entitled to be given
the reasons for his or her dismissal and an opportunity to be heard before
being dismissed (p. 683).
[81]
We are of the view that the principles established in Knight
relating to the applicability of a duty of fairness in the context of public
employment merit reconsideration. While the majority opinion in Knight properly
recognized the important place of a general duty of fairness in administrative
law, in our opinion, it incorrectly analyzed the effects of a contract of employment
on such a duty. The majority in Knight proceeded on the premise that a
duty of fairness based on public law applied unless expressly excluded by the
employment contract or the statute (p. 681), without consideration of the terms
of the contract with regard to fairness issues. It also upheld the distinction
between office holders and contractual employees for procedural fairness
purposes (pp. 670-76). In our view, what matters is the nature of the
employment relationship between the public employee and the public employer.
Where a public employee is employed under a contract of employment, regardless
of his or her status as a public office holder, the applicable law governing
his or her dismissal is the law of contract, not general principles arising out
of public law. What Knight truly stands for is the principle that there
is always a recourse available where the employee is an office holder and the
applicable law leaves him or her without any protection whatsoever when
dismissed.
[82]
This conclusion does not detract from the general duty of
fairness owed by administrative decision makers. Rather it acknowledges that in
the specific context of dismissal from public employment, disputes should be
viewed through the lens of contract law rather than public law.
[83]
In order to understand why a reconsideration of Knight is
warranted, it is necessary to review the development of the duty of fairness in
Canadian administrative law. As we shall see, its development in the public employment
context was intimately related to the distinction between public office holders
and contractual employees, a distinction which, in our view, has become
increasingly difficult to maintain both in principle and in practice.
(1) The Preliminary Issue of Jurisdiction
[84]
Before dealing with the scope of the duty of fairness in this
case, a word should be said about the respondent’s preliminary objection to the
jurisdiction of the adjudicator under the PSLRA to consider procedural
fairness. The respondent argues that allowing adjudicators to consider
procedural fairness risks granting them the inherent powers of a court. We
disagree. We can see nothing problematic with a grievance adjudicator
considering a public law duty of fairness issue where such a duty exists. It
falls squarely within the adjudicator’s task to resolve a grievance. However,
as will be explained below, the proper approach is to first identify the nature
of the employment relationship and the applicable law. Where, as here, the
relationship is contractual, a public law duty of fairness is not engaged and
therefore should play no role in resolving the grievance.
(2) The Development of the Duty of Fairness in Canadian Public Law
[85]
In Canada, the modern concept of procedural fairness in
administrative law was inspired by the House of Lords’ landmark decision in Ridge
v. Baldwin, [1963] 2 All E.R. 66, a case which involved the summary
dismissal of the chief constable of Brighton. The House of Lords declared the
chief constable’s dismissal a nullity on the grounds that the administrative
body which had dismissed him had failed to provide the reasons for his
dismissal or to accord him an opportunity to be heard in violation of the rules
of natural justice. Central to the reasoning in the case was Lord Reid’s
distinction between (i) master‑servant relationships (i.e. contractual
employment), (ii) offices held “at pleasure”, and (iii) offices where there
must be cause for dismissal, which included the chief constable’s position. According
to Lord Reid, only the last category of persons was entitled to procedural
fairness in relation to their dismissal since both contractual employees and
office holders employed “at pleasure” could be dismissed without reason (p.
72). As the authors Wade and Forsyth note that, after a period of retreat from
imposing procedural fairness requirements on administrative decision makers, Ridge
v. Baldwin “marked an important change of judicial policy, indicating that
natural justice was restored to favour and would be applied on a wide basis”
(W. Wade and C. Forsyth, Administrative Law (8th ed. 2000), at p.
438).
[86]
The principles established by Ridge v. Baldwin were
followed by this Court in Nicholson v. Haldimand‑Norfolk Regional
Board of Commissioners of Police, [1979] 1 S.C.R. 311. Nicholson,
like its U.K. predecessor, marked the return to a less rigid approach to
natural justice in Canada (see Brown and Evans, at pp. 7‑5 to 7‑9).
Nicholson concerned the summary dismissal of a probationary police
officer by a regional board of police commissioners. Laskin C.J., for the
majority, at p. 328, declared the dismissal void on the ground that the officer
fell into Lord Reid’s third category and was therefore entitled to the same
procedural protections as in Ridge v. Baldwin.
[87]
Although Ridge v. Baldwin and Nicholson were
concerned with procedural fairness in the context of the dismissal of public
office holders, the concept of fairness was quickly extended to other types of
administrative decisions (see e.g. Martineau v. Matsqui Institution
Disciplinary Board, [1980] 1 S.C.R. 602; Kane v. Board of Governors of
the University of British Columbia, [1980] 1 S.C.R. 1105; Attorney
General of Canada v. Inuit Tapirisat of Canada, [1980] 2 S.C.R. 735). In
Cardinal v. Director of Kent Institution, [1985] 2 S.C.R. 643, Le Dain J.
stated that the duty of fairness was a general principle of law applicable to
all public authorities:
This Court has affirmed that there is, as a general common law principle,
a duty of procedural fairness lying on every public authority making an
administrative decision which is not of a legislative nature and which affects
the rights, privileges or interests of an individual . . . . [p. 653]
(See also Baker, at para. 20.)
[88]
In Knight, the Court relied on the statement of Le Dain J.
in Cardinal v. Director of Kent Institution that the existence of a
general duty to act fairly will depend on “(i) the nature of the decision to be
made by the administrative body; (ii) the relationship existing between that
body and the individual; and (iii) the effect of that decision on the
individual’s rights” (Knight, at p. 669).
[89]
The dispute in Knight centred on whether a board of
education had failed to accord procedural fairness when it dismissed a director
of education with three months’ notice pursuant to his contract of employment.
The main issue was whether the director’s employment relationship with the
school board was one that attracted a public law duty of fairness. L’Heureux‑Dubé
J., for the majority, held that it did attract such a duty on the ground that
the director’s position had a “strong ‘statutory flavour’” and could thus be
qualified as a public office (p. 672). In doing so, she specifically recognized
that, contrary to Lord Reid’s holding in Ridge v. Baldwin, holders of an
office “at pleasure”, were also entitled to procedural fairness before being
dismissed (pp. 673‑74). The fact that the director’s written contract of
employment specifically provided that he could be dismissed with three months’
notice was held not to be enough to displace a public law duty to act fairly
(p. 681).
[90]
From these foundational cases, procedural fairness has grown to
become a central principle of Canadian administrative law. Its overarching
purpose is not difficult to discern: administrative decision makers, in the
exercise of public powers, should act fairly in coming to decisions that affect
the interests of individuals. In other words, “[t]he observance of fair
procedures is central to the notion of the ‘just’ exercise of power” (Brown and
Evans, at p. 7‑3). What is less clear, however, is whether this purpose
is served by imposing public law procedural fairness requirements on public
bodies in the exercise of their contractual rights as employers.
(3) Procedural Fairness in the Public Employment Context
[91]
Ridge v. Baldwin and Nicholson established that a
public employee’s right to procedural fairness depended on his or her status as
an office holder. While Knight extended a duty of fairness to office
holders during pleasure, it nevertheless upheld the distinction between office
holders and contractual employees as an important criterion in establishing
whether a duty of fairness was owed. Courts have continued to rely on this
distinction, either extending or denying procedural protections depending on
the characterization of the public employee’s legal status as an office holder
or contractual employee (see e.g. Reglin v. Creston (Town) (2004), 34
C.C.E.L. (3d) 123, 2004 BCSC 790; Gismondi v. Toronto (City) (2003), 64
O.R. (3d) 688 (C.A.); Seshia v. Health Sciences Centre (2001), 160 Man.
R. (2d) 41, 2001 MBCA 151; Rosen v. Saskatoon District Health Board (2001),
202 D.L.R. (4th) 35, 2001 SKCA 83; Hanis v. Teevan (1998), 111
O.A.C. 91; Gerrard v. Sackville (Town) (1992), 124 N.B.R. (2d) 70
(C.A.)).
[92]
In practice, a clear distinction between office holders and
contractual employees has been difficult to maintain:
Although the law makes such a sharp distinction between office and
service in theory, in practice it may be difficult to tell which is which. For
tax purposes “office” has long been defined as a “subsisting, permanent
substantive position which has an existence independent of the person who fills
it”, but for the purposes of natural justice the test may not be the same. Nor
need an office necessarily be statutory, although nearly all public offices of
importance in administrative law are statutory. A statutory public authority
may have many employees who are in law merely its servants, and others of
higher grades who are office-holders.
(Wade and Forsyth, at pp. 532-33)
[93]
Lord Wilberforce noted that attempting to separate office holders
from contractual employees
involves the
risk of a compartmental approach which, although convenient as a solvent, may
lead to narrower distinctions than are appropriate to the broader issues of
administrative law. A comparative list of situations in which persons have been
held entitled or not entitled to a hearing, or to observation of rules of
natural justice, according to the master and servant test, looks illogical and
even bizarre.
(Malloch v. Aberdeen Corp., [1971] 2 All E.R. 1278 (H.L.), at p.
1294)
[94]
There is no reason to think that the distinction has been easier
to apply in Canada. In Knight, as has been noted, the majority judgment
relied on whether the public employee’s position had a “strong ‘statutory
flavour’” (p. 672), but as Brown and Evans observe, “there is no simple test
for determining whether there is a sufficiently strong ‘statutory flavour’ to a
job for it to be classified as an ‘office’” (p. 7-19). This has led to
uncertainty as to whether procedural fairness attaches to particular
positions. For instance, there are conflicting decisions on whether the
position of a “middle manager” in a municipality is sufficiently important to
attract a duty of fairness (compare Gismondi, at para. 53, and Hughes
v. Moncton (City) (1990), 111 N.B.R. (2d) 184 (Q.B.), aff’d (1991), 118
N.B.R. (2d) 306 (C.A.)). Similarly, physicians working in the public health
system may or may not be entitled to a duty of fairness (compare Seshia
and Rosen v. Saskatoon District Health Board, [2000] 4 W.W.R. 606, 2000
SKQB 40).
[95]
Further complicating the distinction is the fact that public
employment is for the most part now viewed as a regular contractual employment
relationship. The traditional position at common law was that public servants
were literally “servants of the Crown” and could therefore be dismissed at
will. However, it is now recognized that most public employees are employed on
a contractual basis: Wells v. Newfoundland, [1999] 3 S.C.R. 199.
[96]
Wells concerned the dismissal without compensation of a
public office holder whose position had been abolished by statute. The Court
held that, while Wells’ position was created by statute, his employment
relationship with the Crown was contractual and therefore he was entitled to be
compensated for breach of contract according to ordinary private law
principles. Indeed, Wells recognized that most civil servants and public
officers are employed under contracts of employment, either as members of
unions bound by collective agreements or as non‑unionized employees under
individual contracts of employment (paras. 20‑21 and 29‑32). Only
certain officers, like ministers of the Crown and “others who fulfill
constitutionally defined state roles”, do not have a contractual relationship
with the Crown, since the terms of their positions cannot be modified by
agreement (Wells, at paras. 29‑32).
[97]
The effect of Wells, as Professors Hogg and Monahan note,
is that
[t]he
government’s common law relationship with its employees will now be governed,
for the most part, by the general law of contract, in the same way as private
employment relationships. This does not mean that governments cannot provide
for a right to terminate employment contracts at pleasure. However, if the
government wishes to have such a right, it must either contract for it or make
provision (expressly or by necessary implication) by way of statute.
(P. W. Hogg and P. J. Monahan, Liability of the Crown (3rd ed.
2000), at p. 240)
The important
point for our purposes is that Wells confirmed that most public office
holders have a contractual employment relationship. Of course, office holders’ positions
will also often be governed by statute and regulations, but the essence of the
employment relationship is still contractual. In this context, attempting to
make a clear distinction between office holders and contractual employees for
the purposes of procedural fairness becomes even more difficult.
[98]
If the distinction has become difficult to maintain in practice,
it is also increasingly hard to justify in principle. There would appear to be
three main reasons for distinguishing between office holders and contractual
employees and for extending procedural fairness protections only to the former,
all of which, in our view, are problematic.
[99]
First, historically, offices were viewed as a form of property,
and thus could be recovered by the office holder who was removed contrary to
the principles of natural justice. Employees who were dismissed in breach of
their contract, however, could only sue for damages, since specific performance
is not generally available for contracts for personal service (Wade and
Forsyth, at pp. 531‑32). This conception of public office has long since
faded from our law: public offices are no longer treated as a form of private
property.
[100]
A second and more persuasive reason for the distinction is that
dismissal from public office involves the exercise of delegated statutory power
and should therefore be subject to public law controls like any other
administrative decision (Knight, at p. 675; Malloch, at p. 1293,
per Lord Wilberforce). In contrast, the dismissal of a contractual employee
only implicates a public authority’s private law rights as an employer.
[101]
A third reason is that, unlike contractual employees, office
holders did not typically benefit from contractual rights protecting them from
summary discharge. This was true of the public office holders in Ridge v.
Baldwin and Nicholson. Indeed, in both cases the statutory language
purported to authorize dismissal without notice. The holders of an office “at
pleasure” were in an even more tenuous position since by definition they could
be dismissed without notice and without reason (Nicholson, at p.
323; Black’s Law Dictionary (8th ed. 2004), at p. 1192 “pleasure
appointment”). Because of this relative insecurity it was seen to be desirable
to impose minimal procedural requirements in order to ensure that office
holders were not deprived of their positions arbitrarily (Nicholson, at
pp. 322-23; Knight, at pp. 674-75; Wade and Forsyth, at
pp. 536-37).
[102]
In our view, the existence of a contract of employment, not the
public employee’s status as an office holder, is the crucial consideration.
Where a public office holder is employed under a contract of employment the
justifications for imposing a public law duty of fairness with respect to his
or her dismissal lose much of their force.
[103]
Where the employment relationship is contractual, it becomes
difficult to see how a public employer is acting any differently in dismissing
a public office holder and a contractual employee. In both cases, it would seem
that the public employer is merely exercising its private law rights as an
employer. For instance, in Knight, the director’s position was
terminated by a resolution passed by the board of education pursuant to
statute, but it was done in accordance with the contract of employment, which
provided for dismissal on three months’ notice. Similarly, the appellant in
this case was dismissed pursuant to s. 20 of the New Brunswick Civil Service
Act, but that section provides that the ordinary rules of contract govern
dismissal. He could therefore only be dismissed for just cause or on reasonable
notice, and any failure to do so would give rise to a right to damages. In
seeking to end the employment relationship with four months’ pay in lieu of
notice, the respondent was acting no differently than any other employer at
common law. In Wells, Major J. noted that public employment had all of
the features of a contractual relationship:
A common‑sense view of what it means to work for
the government suggests that these relationships have all the hallmarks of
contract. There are negotiations leading to agreement and employment. This
gives rise to enforceable obligations on both sides. The Crown is acting
much as an ordinary citizen would, engaging in mutually beneficial commercial
relations with individual and corporate actors. Although the Crown may
have statutory guidelines, the result is still a contract of employment.
[Emphasis added; para. 22.]
If the Crown is
acting as any other private actor would in hiring its employees, then it
follows that the dismissal of its employees should be viewed in the same way.
[104]
Furthermore, while public law is rightly concerned with
preventing the arbitrary exercise of delegated powers, the good faith exercise
of the contractual rights of an employer, such as the right to end the
employment relationship on reasonable notice, cannot be qualified as arbitrary.
Where the terms of the employment contract were explicitly agreed to, it will
be assumed that procedural fairness was dealt with by the parties (see, for
example, in the context of collective agreements: School District No. 5
(Southeast Kootenay) and B.C.T.F. (Yellowaga) (Re) (2000), 94 L.A.C. (4th)
56). If, however, the contract of employment is silent, the fundamental terms
will be supplied by the common law or the civil law, in which case dismissal
may only be for just cause or on reasonable notice.
[105]
In the context of this appeal, it must be emphasized that
dismissal with reasonable notice is not unfair per se. An
employer’s right to terminate the employment relationship with due notice is
simply the counterpart to the employee’s right to quit with due notice (G.
England, Employment Law in Canada (4th ed. (loose‑leaf)), at para.
13.3). It is a well-established principle of the common law that, unless
otherwise provided, both parties to an employment contract may end the
relationship without alleging cause so long as they provide adequate notice. An
employer’s right to terminate on reasonable notice must be exercised within the
framework of an employer’s general obligations of good faith and fair dealing: Wallace
v. United Grain Growers Ltd., [1997] 3 S.C.R. 701, at para. 95. But the
good faith exercise of a common law contractual right to dismiss with notice
does not give rise to concerns about the illegitimate exercise of public power.
Moreover, as will be discussed below, where public employers do act in bad
faith or engage in unfair dealing, the private law provides a more appropriate
form of relief and there is no reason that they should be treated differently
than private sector employers who engage in similar conduct.
[106]
Of course, a public authority must abide by any statutory
restrictions on the exercise of its discretion as an employer, regardless of
the terms of an employment contract, and failure to do so may give rise to a
public law remedy. A public authority cannot contract out of its statutory
duties. But where a dismissal decision is properly within the public
authority’s powers and is taken pursuant to a contract of employment, there is
no compelling public law purpose for imposing a duty of fairness.
[107]
Nor is the protection of office holders a justification for
imposing a duty of fairness when the employee is protected from wrongful
dismissal by contract. The appellant’s situation provides a good illustration
of why this is so. As an office holder, the appellant was employed “at
pleasure”, and could therefore be terminated without notice or reason (Interpretation
Act, R.S.N.B. 1973, c. I‑13, s. 20). However, he was also a civil
servant and, pursuant to s. 20 of the Civil Service Act, his dismissal
was governed by the ordinary rules of contract. If his employer had dismissed
him without notice and without cause he would have been entitled to claim
damages for breach of contract. Even if he was dismissed with notice, it was
open to him to challenge the length of notice or amount of pay in lieu of
notice given. On the facts, the respondent gave the appellant four months’
worth of pay in lieu of notice, which he was successful in having increased to
eight months before the grievance adjudicator.
[108]
It is true that the remedy of reinstatement is not available for
breach of contract at common law. In this regard, it might be argued that
contractual remedies, on their own, offer insufficient protection to office
holders (see de Smith, Woolf & Jowell: Judicial Review of Administrative
Action (5th ed. 1995), at p. 187). However, it must be kept in mind that
breach of a public law duty of fairness also does not lead to full
reinstatement. The effect of a breach of procedural fairness is to render the
dismissal decision void ab initio (Ridge v. Baldwin, at p.
81). Accordingly, the employment is deemed to have never ceased and the office
holder is entitled to unpaid wages and benefits from the date of the dismissal
to the date of judgment (see England, at para. 17.224). However, an employer is
free to follow the correct procedure and dismiss the office holder again. A
breach of the duty of fairness simply requires that the dismissal decision be
retaken. It therefore is incorrect to equate it to reinstatement (see Malloch,
at p. 1284).
[109]
In addition, a public law remedy can lead to unfairness. The
amount of unpaid wages and benefits an office holder is entitled to will be a
function of the length of time the judicial process has taken to wend its way
to a final resolution rather than criteria related to the employee’s situation.
Furthermore, in principle, there is no duty to mitigate since unpaid wages are
not technically damages. As a result, an employee may recoup much more than he
or she actually lost (see England, at para. 17.224).
[110]
In contrast, the private law offers a more principled and fair
remedy. The length of notice or amount of pay in lieu of notice an employee is
entitled to depends on a number of factors including length of service, age,
experience and the availability of alternative employment (see Wallace,
at paras. 81 ff.). The notice period may be increased if it is established that
the employer acted in bad faith or engaged in unfair dealing when acting to
dismiss the employee (Wallace, at para. 95). These considerations aim at
ensuring that dismissed employees are afforded some measure of protection while
looking for new employment.
[111]
It is important to note as well that the appellant, as a public
employee employed under a contract of employment, also had access to all of the
same statutory and common law protections that surround private sector
employment. He was protected from dismissal on the basis of a prohibited ground
of discrimination under the Human Rights Act, R.S.N.B. 1973, c. H‑11.
His employer was bound to respect the norms laid down by the Employment
Standards Act, S.N.B. 1982, c. E‑7.2. As has already been mentioned,
if his dismissal had been in bad faith or he had been subject to unfair
dealing, it would have been open to him to argue for an extension of the notice
period pursuant to the principles laid down in Wallace. In short, the
appellant was not without legal protections or remedies in the face of his
dismissal.
(4) The Proper Approach to the Dismissal of Public Employees
[112]
In our view, the distinction between office holder and
contractual employee for the purposes of a public law duty of fairness is
problematic and should be done away with. The distinction is difficult to apply
in practice and does not correspond with the justifications for imposing public
law procedural fairness requirements. What is important in assessing the
actions of a public employer in relation to its employees is the nature of the
employment relationship. Where the relationship is contractual, it should be
viewed as any other private law employment relationship regardless of an
employee’s status as an office holder.
[113]
The starting point, therefore, in any analysis, should be to
determine the nature of the employment relationship with the public authority.
Following Wells, it is assumed that most public employment relationships
are contractual. Where this is the case, disputes relating to dismissal should
be resolved according to the express or implied terms of the contract of
employment and any applicable statutes and regulations, without regard for
whether the employee is an office holder. A public authority which dismisses an
employee pursuant to a contract of employment should not be subject to any
additional public law duty of fairness. Where the dismissal results in a breach
of contract, the public employee will have access to ordinary contractual
remedies.
[114]
The principles expressed in Knight in relation to the
general duty of fairness owed by public authorities when making decisions that
affect the rights, privileges or interests of individuals are valid and
important. However, to the extent that the majority decision in Knight
ignored the important effect of a contract of employment, it should not be
followed. Where a public employee is protected from wrongful dismissal by
contract, his or her remedy should be in private law, not in public law.
[115]
The dismissal of a public employee should therefore generally be
viewed as a typical employment law dispute. However, there may be occasions
where a public law duty of fairness will still apply. We can envision two such
situations at present. The first occurs where a public employee is not, in
fact, protected by a contract of employment. This will be the case with judges,
ministers of the Crown and others who “fulfill constitutionally defined state
roles” (Wells, at para. 31). It may also be that the terms of
appointment of some public office holders expressly provide for summary
dismissal or, at the very least, are silent on the matter, in which case the
office holders may be deemed to hold office “at pleasure” (see e.g. New
Brunswick Interpretation Act, s. 20; Interpretation Act, R.S.C.
1985, c. I‑21, s. 23(1) ). Because an employee in this situation is truly
subject to the will of the Crown, procedural fairness is required to ensure
that public power is not exercised capriciously.
[116]
A second situation occurs when a duty of fairness flows by
necessary implication from a statutory power governing the employment
relationship. In Malloch, the applicable statute provided that dismissal
of a teacher could only take place if the teacher was given three weeks’ notice
of the motion to dismiss. The House of Lords found that this necessarily
implied a right for the teacher to make representations at the meeting where
the dismissal motion was being considered. Otherwise, there would have been
little reason for Parliament to have provided for the notice procedure in the
first place (p. 1282). Whether and what type of procedural requirements
result from a particular statutory power will of course depend on the specific
wording at issue and will vary with the context (Knight, at p. 682).
B. Conclusion
[117]
In this case, the appellant was a contractual employee of the
respondent in addition to being a public office holder. Section 20 of the Civil
Service Act provided that, as a civil servant, he could only be dismissed
in accordance with the ordinary rules of contract. In these circumstances it
was unnecessary to consider any public law duty of procedural fairness. The
respondent was fully within its rights to dismiss the appellant with pay in
lieu of notice without affording him a hearing. The respondent dismissed the
appellant with four months’ pay in lieu of notice. The appellant was successful
in increasing this amount to eight months. The appellant was protected by
contract and was able to obtain contractual remedies in relation to his
dismissal. By imposing procedural fairness requirements on the respondent over
and above its contractual obligations and ordering the full “reinstatement” of
the appellant, the adjudicator erred in his application of the duty of fairness
and his decision was therefore correctly struck down by the Court of Queen’s
Bench.
V. Disposition
[118]
We would dismiss the appeal. There will be no order for costs in
this Court as the respondent is not requesting them.
The following are the reasons delivered by
[119]
Binnie J. — I agree with my colleagues that the appellant’s former employment
relationship with the respondent is governed by contract. The respondent chose
to exercise its right to terminate the employment without alleging cause. The
adjudicator adopted an unreasonable interpretation of s. 20 of the Civil
Service Act, S.N.B. 1984, c. C-5.1, and of ss. 97(2.1) and 100.1 of the Public
Service Labour Relations Act, R.S.N.B. 1973, c. P-25. The appellant was a
non-unionized employee whose job was terminated in accordance with contract
law. Public law principles of procedural fairness were not applicable in the
circumstances. These conclusions are enough to dispose of the appeal.
[120]
However, my colleagues Bastarache and LeBel JJ. are embarked on a
more ambitious mission, stating that:
Although the instant appeal deals with the particular problem of
judicial review of the decisions of an adjudicative tribunal, these reasons
will address first and foremost the structure and characteristics of the
system of judicial review as a whole.
.
. .
. . . The time has arrived to re-examine the Canadian
approach to judicial review of administrative decisions and develop a
principled framework that is more coherent and workable. [Emphasis added;
paras. 33 and 32.]
[121]
The need for such a re-examination is widely recognized, but in
the end my colleagues’ reasons for judgment do not deal with the “system as a
whole”. They focus on administrative tribunals. In that context, they reduce
the applicable standards of review from three to two (“correctness” and
“reasonableness”), but retain the pragmatic and functional analysis, although
now it is to be called the “standard of review analysis” (para. 63). A
broader reappraisal is called for. Changing the name of the old pragmatic and
functional test represents a limited advance, but as the poet says:
What’s in a
name? that which we call a rose
By any other
name would smell as sweet;
(Romeo and Juliet, Act II, Scene ii)
[122]
I am emboldened by my colleagues’ insistence that “a holistic
approach is needed when considering fundamental principles” (para. 26) to
express the following views. Judicial review is an idea that has lately become
unduly burdened with law office metaphysics. We are concerned with substance
not nomenclature. The words themselves are unobjectionable. The dreaded
reference to “functional” can simply be taken to mean that generally speaking
courts have the last word on what they consider the correct decision on
legal matters (because deciding legal issues is their “function”), while
administrators should generally have the last word within their
function, which is to decide administrative matters. The word “pragmatic” not
only signals a distaste for formalism but recognizes that a conceptually tidy
division of functions has to be tempered by practical considerations: for
example, a labour board is better placed than the courts to interpret the
intricacies of provisions in a labour statute governing replacement of union
workers; see e.g. Canadian Union of Public Employees, Local 963 v. New
Brunswick Liquor Corp., [1979] 2 S.C.R. 227.
[123]
Parliament or a provincial legislature is often well advised to
allocate an administrative decision to someone other than a judge. The judge
is on the outside of the administration looking in. The legislators are
entitled to put their trust in the viewpoint of the designated decision maker
(particularly as to what constitutes a reasonable outcome), not only in the
case of the administrative tribunals of principal concern to my colleagues but
(taking a “holistic approach”) also in the case of a minister, a board, a
public servant, a commission, an elected council or other administrative bodies
and statutory decision makers. In the absence of a full statutory right of
appeal, the court ought generally to respect the exercise of the administrative
discretion, particularly in the face of a privative clause.
[124]
On the other hand, a court is right to insist that its
view of the correct opinion (i.e. the “correctness” standard of review) is
accepted on questions concerning the Constitution, the common law, and the
interpretation of a statute other than the administrator’s enabling statute
(the “home statute”) or a rule or statute closely connected with it; see
generally D. J. M. Brown and J. M. Evans, Judicial Review of Administrative
Action in Canada (loose-leaf), at para. 14:2210.
[125]
Thus the law (or, more grandly, the “rule of law”) sets the
boundaries of potential administrative action. It is sometimes said by judges
that an administrator acting within his or her discretion “has the right to be
wrong”. This reflects an unduly court-centred view of the universe. A
disagreement between the court and an administrator does not necessarily mean
that the administrator is wrong.
A. Limits on
the Allocation of Decision Making
[126]
It should not be difficult in the course of judicial review to
identify legal questions requiring disposition by a judge. There are three
basic legal limits on the allocation of administrative discretion.
[127]
Firstly, the Constitution restricts the legislator’s ability to
allocate issues to administrative bodies which s. 96 of the Constitution
Act, 1867 has allocated to the courts. The logic of the constitutional
limitation is obvious. If the limitation did not exist, the government could
transfer the work of the courts to administrative bodies that are not
independent of the executive and by statute immunize the decisions of these
bodies from effective judicial review. The country would still possess an
independent judiciary, but the courts would not be available to citizens whose
rights or interests are trapped in the administration.
[128]
Secondly, administrative action must be founded on statutory or
prerogative (i.e. common law) powers . This too is a simple idea. No one can
exercise a power they do not possess. Whether or not the power (or
jurisdiction) exists is a question of law for the courts to determine, just as
it is for the courts (not the administrators) to have the final word on
questions of general law that may be relevant to the resolution of an
administrative issue. The instances where this Court has deferred to an
administrator’s conclusion of law outside his or her home statute, or a
statute “intimately” connected thereto, are exceptional. We should say so.
Instead, my colleagues say the court’s view of the law will prevail
where the question at issue is one of general law “that is both of
central importance to the legal system as a whole and outside the adjudicator’s
specialized area of expertise”. [para. 60]
It is, with
respect, a distraction to unleash a debate in the reviewing judge’s courtroom
about whether or not a particular question of law is “of central importance to
the legal system as a whole”. It should be sufficient to frame a rule
exempting from the correctness standard the provisions of the home statute and
closely related statutes which require the expertise of the administrative
decision maker (as in the labour board example). Apart from that exception, we
should prefer clarity to needless complexity and hold that the last word on
questions of general law should be left to judges.
[129]
Thirdly, a fair procedure is said to be the handmaiden of
justice. Accordingly, procedural limits are placed on administrative bodies by
statute and the common law. These include the requirements of “procedural
fairness”, which will vary with the type of decision maker and the type of
decision under review. On such matters, as well, the courts have the final
say. The need for such procedural safeguards is obvious. Nobody should have
his or her rights, interests or privileges adversely dealt with by an unjust
process. Nor is such an unjust intent to be attributed easily to legislators.
Hansard is full of expressions of concern by Ministers and Members of
Parliament regarding the fairness of proposed legislative provisions. There is
a dated hauteur about judicial pronouncements such as that the “justice
of the common law will supply the omission of the legislature” (Cooper v.
Wandsworth Board of Works (1863), 14 C.B. (N.S.) 180, 143 E.R. 414 (C.P.),
at p. 420). Generally speaking, legislators and judges in this country are
working with a common set of basic legal and constitutional values. They share
a belief in the rule of law. Constitutional considerations aside, however,
statutory protections can nevertheless be repealed and common law protections can
be modified by statute, as was demonstrated in Ocean Port Hotel Ltd. v.
British Columbia (General Manager, Liquor Control and Licensing Branch),
[2001] 2 S.C.R. 781, 2001 SCC 52.
B. Reasonableness
of Outcome
[130]
At this point, judicial review shifts gears. When the applicant
for judicial review challenges the substantive outcome of an
administrative action, the judge is invited to cross the line into
second-guessing matters that lie within the function of the administrator.
This is controversial because it is not immediately obvious why a judge’s view
of the reasonableness of an administrative policy or the exercise of an
administrative discretion should be preferred to that of the administrator to
whom Parliament or a legislature has allocated the decision, unless there is a
full statutory right of appeal to the courts, or it is otherwise indicated in
the conferring legislation that a “correctness” standard is intended.
[131]
In U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048,
Beetz J. adopted the view that “[t]o a large extent judicial review of
administrative action is a specialized branch of statutory interpretation” (p.
1087 (emphasis deleted)). Judicial intervention in administrative decisions on
grounds of substance (in the absence of a constitutional challenge) has been
based on presumed legislative intent in a line of cases from Associated
Provincial Picture Houses Ltd. v. Wednesbury Corp., [1947] 2 All E.R. 680
(C.A.) (“you may have something so absurd that no sensible person could ever
dream that it lay within the powers of the authority” (p. 683)) to Canadian
Union of Public Employees, Local 963 v. New Brunswick Liquor Corp. (“was
the Board’s interpretation so patently unreasonable that its construction
cannot be rationally supported by the relevant legislation . . . ?” (p. 237)).
More recent examples are Baker v. Canada (Minister of Citizenship and
Immigration), [1999] 2 S.C.R. 817 (para. 53), and Mount Sinai Hospital
Center v. Quebec (Minister of Health and Social Services), [2001] 2 S.C.R.
281, 2001 SCC 41 (paras. 60-61). Judicial review proceeds on the justified
presumption that legislators do not intend results that depart from reasonable
standards.
C. The Need
to Reappraise the Approach to Judicial Review
[132]
The present difficulty, it seems, does not lie in the component
parts of judicial review, most of which are well entrenched in decades of case
law, but in the current methodology for putting those component parts into
action. There is afoot in the legal profession a desire for clearer guidance
than is provided by lists of principles, factors and spectrums. It must be
recognized, of course, that complexity is inherent in all legal principles that
must address the vast range of administrative decision making. The objection is
that our present “pragmatic and functional” approach is more complicated than
is required by the subject matter.
[133]
People who feel victimized or unjustly dealt with by the
apparatus of government, and who have no recourse to an administrative appeal,
should have access to an independent judge through a procedure that is quick
and relatively inexpensive. Like much litigation these days, however, judicial
review is burdened with undue cost and delay. Litigants understandably
hesitate to go to court to seek redress for a perceived administrative
injustice if their lawyers cannot predict with confidence even what standard of
review will be applied. The disposition of the case may well turn on
the choice of standard of review. If litigants do take the plunge, they may
find the court’s attention focussed not on their complaints, or the
government’s response, but on lengthy and arcane discussions of something they
are told is the pragmatic and functional test. Every hour of a lawyer’s
preparation and court time devoted to unproductive “lawyer’s talk” poses a
significant cost to the applicant. If the challenge is unsuccessful, the
unhappy applicant may also face a substantial bill of costs from the successful
government agency. A victory before the reviewing court may be overturned on
appeal because the wrong “standard of review” was selected. A small business
denied a licence or a professional person who wants to challenge disciplinary
action should be able to seek judicial review without betting the store or the
house on the outcome. Thus, in my view, the law of judicial review should be
pruned of some of its unduly subtle, unproductive, or esoteric features.
D. Standards
of Review
[134]
My colleagues conclude that three standards of review should be
reduced to two standards of review. I agree that this simplification will
avoid some of the arcane debates about the point at which “unreasonableness”
becomes “patent unreasonableness”. However, in my view the repercussions of
their position go well beyond administrative tribunals. My colleagues
conclude, and I agree:
Looking to either the magnitude or the immediacy of the defect in the
tribunal’s decision provides no meaningful way in practice of distinguishing
between a patently unreasonable and an unreasonable decision. [para. 41]
More broadly,
they declare that “the analytical problems that arise in trying to apply the
different standards undercut any conceptual usefulness created by the
inherently greater flexibility of having multiple standards of review” (para.
44), and “any actual difference between them in terms of their operation
appears to be illusory” (para. 41). A test which is incoherent when applied to
administrative tribunals does not gain in coherence or logic when applied to
other administrative decision makers such as mid-level bureaucrats or, for that
matter, Ministers. If logic and language cannot capture the distinction in one
context, it must equally be deficient elsewhere in the field of judicial
review. I therefore proceed on the basis that the distinction between “patent
unreasonableness” and “reasonableness simpliciter” has been declared by
the Court to be abandoned. I propose at this point to examine what I see as
some of the implications of this abandonment.
E. Degrees
of Deference
[135]
The distinction between reasonableness simpliciter and
patent unreasonableness was not directed merely to “the magnitude or the
immediacy of the defect” in the administrative decision (para. 41). The
distinction also recognized that different administrative decisions command
different degrees of deference, depending on who is deciding what.
[136]
A minister making decisions under the Extradition Act,
R.S.C. 1985, c. E-23, to surrender a fugitive, for example, is said to be “at
the extreme legislative end of the continuum of administrative decision-making”
(Idziak v. Canada (Minister of Justice), [1992] 3 S.C.R. 631, at p.
659). On the other hand, a ministerial delegate making a deportation decision
according to ministerial guidelines was accorded considerably less deference in
Baker (where the “reasonableness simpliciter” standard was
applied). The difference does not lie only in the judge’s view of the
perceived immediacy of the defect in the administrative decision. In Suresh
v. Canada (Minister of Citizenship and Immigration), [2002] 1 S.C.R. 3,
2002 SCC 1, a unanimous Court adopted the caution in the context of
counter-terrorism measures that “[i]f the people are to accept the consequences
of such decisions, they must be made by persons whom the people have elected
and whom they can remove” (para. 33). Administrative decision makers
generally command respect more for their expertise than for their prominence in
the administrative food chain. Far more numerous are the lesser officials who
reside in the bowels and recesses of government departments adjudicating
pension benefits or the granting or withholding of licences, or municipal
boards poring over budgets or allocating costs of local improvements. Then
there are the Cabinet and Ministers of the Crown who make broad decisions of
public policy such as testing cruise missiles, Operation Dismantle Inc. v.
The Queen, [1985] 1 S.C.R. 441, or policy decisions arising out of
decisions of major administrative tribunals, as in Attorney General of
Canada v. Inuit Tapirisat of Canada, [1980] 2 S.C.R. 735, at p. 753,
where the Court said: “The very nature of the body must be taken into account
in assessing the technique of review which has been adopted by the Governor in
Council.”
[137]
Of course, the degree of deference also depends on the nature and
content of the question. An adjudicative tribunal called on to approve
pipelines based on “public convenience and necessity” (Westcoast Energy Inc.
v. Canada (National Energy Board), [1998] 1 S.C.R. 322) or simply to take a
decision in the “public interest” is necessarily accorded more room to
manoeuvre than is a professional body, given the task of determining an
appropriate sanction for a member’s misconduct (Law Society of New Brunswick
v. Ryan, [2003] 1 S.C.R. 247, 2003 SCC 20).
[138]
In our recent jurisprudence, the “nature of the question” before
the decision maker has been considered as one of a number of elements to be
considered in choosing amongst the various standards of review. At this point,
however, I believe it plays a more important role in terms of substantive
review. It helps to define the range of reasonable outcomes within which the
administrator is authorized to choose.
[139]
The judicial sensitivity to different levels of respect (or
deference) required in different situations is quite legitimate.
“Contextualizing” a single standard of review will shift the debate (slightly)
from choosing between two standards of reasonableness that each
represent a different level of deference to a debate within a single
standard of reasonableness to determine the appropriate level of deference. In
practice, the result of today’s decision may be like the bold innovations of a
traffic engineer that in the end do no more than shift rush hour congestion
from one road intersection to another without any overall saving to motorists
in time or expense.
[140]
That said, I agree that the repeated attempts to define and
explain the difference between reasonableness simpliciter and “patent”
unreasonableness can be seen with the benefit of hindsight to be unproductive
and distracting. Nevertheless, the underlying issue of degrees of deference
(which the two standards were designed to address) remains.
[141]
Historically, our law recognized “patent” unreasonableness before
it recognized what became known as reasonableness simpliciter. The
adjective “patent” initially underscored the level of respect that was due to
the designated decision maker, and signalled the narrow authority of the courts
to interfere with a particular administrative outcome on substantive
grounds. The reasonableness simpliciter standard was added at a later
date to recognize a reduced level of deference. Reducing three standards of
review to two standards of review does not alter the reality that at the high
end “patent” unreasonableness (in the sense of manifestly indefensible) was not
a bad description of the hurdle an applicant had to get over to have an
administrative decision quashed on a ground of substance. The danger of
labelling the most “deferential” standard as “reasonableness” is that it may be
taken (wrongly) as an invitation to reviewing judges not simply to identify the
usual issues, such as whether irrelevant matters were taken into consideration,
or relevant matters were not taken into consideration, but to reweigh the input
that resulted in the administrator’s decision as if it were the judge’s view of
“reasonableness” that counts. At this point, the judge’s role is to identify
the outer boundaries of reasonable outcomes within which the administrative
decision maker is free to choose.
F. Multiple
Aspects of Administrative Decisions
[142]
Mention should be made of a further feature that also reflects
the complexity of the subject matter of judicial review. An applicant may
advance several grounds for quashing an administrative decision. He or she may
contend that the decision maker has misinterpreted the general law. He or she
may argue, in the alternative, that even if the decision maker got the general
law straight (an issue on which the court’s view of what is correct will
prevail), the decision maker did not properly apply it to the facts (an issue
on which the decision maker is entitled to deference). In a challenge under
the Canadian Charter of Rights and Freedoms to a surrender for
extradition, for example, the minister will have to comply with the Court’s
view of Charter principles (the “correctness” standard), but if he or
she correctly appreciates the applicable law, the court will properly recognize
a wide discretion in the application of those principles to the particular
facts. The same approach is taken to less exalted decision makers (Moreau-Bérubé
v. New Brunswick (Judicial Council), [2002] 1 S.C.R. 249, 2002 SCC 11). In
the jargon of the judicial review bar, this is known as “segmentation”.
G. The
Existence of a Privative Clause
[143]
The existence of a privative clause is currently subsumed within
the “pragmatic and functional” test as one factor amongst others to be
considered in determining the appropriate standard of review, where it supports
the choice of the patent unreasonableness standard. A single standard of
“reasonableness” cannot mean that the degree of deference is unaffected by the
existence of a suitably worded privative clause. It is certainly a
relevant contextual circumstance that helps to calibrate the intrusiveness of a
court’s review. It signals the level of respect that must be shown. Chief
Justice Laskin during argument once memorably condemned the quashing of a
labour board decision protected by a strong privative clause, by saying “what’s
wrong with these people [the judges], can’t they read?” A system of judicial
review based on the rule of law ought not to treat a privative clause as conclusive,
but it is more than just another “factor” in the hopper of pragmatism and
functionality. Its existence should presumptively foreclose judicial review on
the basis of outcome on substantive grounds unless the applicant can
show that the clause, properly interpreted, permits it or there is some legal
reason why it cannot be given effect.
H. A Broader
Reappraisal
[144]
“Reasonableness” is a big tent that will have to accommodate a
lot of variables that inform and limit a court’s review of the outcome of administrative
decision making.
[145]
The theory of our recent case law has been that once the
appropriate standard of review is selected, it is a fairly straightforward
matter to apply it. In practice, the criteria for selection among “reasonableness”
standards of review proved to be undefinable and their application
unpredictable. The present incarnation of the “standard of review” analysis
requires a threshold debate about the four factors (non-exhaustive) which
critics say too often leads to unnecessary delay, uncertainty and costs as
arguments rage before the court about balancing expertise against the “real”
nature of the question before the administrator, or whether the existence of a
privative clause trumps the larger statutory purpose, and so on. And this is
all mere preparation for the argument about the actual substance of the
case. While a measure of uncertainty is inherent in the subject matter and
unavoidable in litigation (otherwise there wouldn’t be any), we should at least
(i) establish some presumptive rules and (ii) get the parties away from arguing
about the tests and back to arguing about the substantive merits of their case.
[146]
The going-in presumption should be that the standard of review of
any administrative outcome on grounds of substance is not correctness but
reasonableness (“contextually” applied). The fact that the legislature
designated someone other than the court as the decision maker calls for
deference to (or judicial respect for) the outcome, absent a broad statutory
right of appeal. Administrative decisions generally call for the exercise of
discretion. Everybody recognizes in such cases that there is no single
“correct” outcome. It should also be presumed, in accordance with the ordinary
rules of litigation, that the decision under review is reasonable until
the applicant shows otherwise.
[147]
An applicant urging the non-deferential “correctness” standard
should be required to demonstrate that the decision under review rests on an
error in the determination of a legal issue not confided (or which
constitutionally could not be confided) to the administrative decision
maker to decide, whether in relation to jurisdiction or the general law.
Labour arbitrators, as in this case, command deference on legal matters within
their enabling statute or on legal matters intimately connected thereto.
[148]
When, then, should a decision be deemed “unreasonable”? My
colleagues suggest a test of irrationality (para. 46), but the editors
of de Smith point out that “many decisions which fall foul of
[unreasonableness] have been coldly rational” (de Smith, Woolf & Jowell:
Judicial Review of Administrative Action (5th ed. 1995), at para. 13-003).
A decision meeting this description by this Court is C.U.P.E. v. Ontario
(Minister of Labour), [2003] 1 S.C.R. 539, 2003 SCC 29, where the
Minister’s appointment of retired judges with little experience in labour
matters to chair “interest” arbitrations (as opposed to “grievance”
arbitrations) between hospitals and hospital workers was “coldly rational” in
terms of the Minister’s own agenda, but was held by a majority of this Court to
be patently unreasonable in terms of the history, object and purpose of the
authorizing legislation. He had not used the appointment power for the purposes
for which the legislature had conferred it.
[149]
Reasonableness rather than rationality has been the traditional
standard and, properly interpreted, it works. That said, a single
“reasonableness” standard will now necessarily incorporate both the
degree of deference formerly reflected in the distinction between patent
unreasonableness and reasonableness simpliciter, and an
assessment of the range of options reasonably open to the decision maker in the
circumstances, in light of the reasons given for the decision. Any reappraisal
of our approach to judicial review should, I think, explicitly recognize these
different dimensions to the “reasonableness” standard.
I. Judging
“Reasonableness”
[150]
I agree with my colleagues that “reasonableness” depends on the
context. It must be calibrated to fit the circumstances. A driving speed that
is “reasonable” when motoring along a four-lane interprovincial highway is not
“reasonable” when driving along an inner city street. The standard (“reasonableness”)
stays the same, but the reasonableness assessment will vary with the relevant
circumstances.
[151]
This, of course, is the nub of the difficulty. My colleagues
write:
In judicial review, 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. [para. 47]
I agree with
this summary but what is required, with respect, is a more easily applied
framework into which the judicial review court and litigants can plug in the
relevant context. No one doubts that in order to overturn an administrative outcome
on grounds of substance (i.e. leaving aside errors of fairness or law which lie
within the supervising “function” of the courts), the reviewing court must be
satisfied that the outcome was outside the scope of reasonable responses open
to the decision maker under its grant of authority, usually a statute.
“[T]here is always a perspective”, observed Rand J., “within which a statute is
intended [by the legislature] to operate”: Roncarelli v. Duplessis,
[1959] S.C.R. 121, at p. 140. How is that “perspective” to be ascertained?
The reviewing judge will obviously want to consider the precise nature and
function of the decision maker including its expertise, the terms and
objectives of the governing statute (or common law) conferring the power of decision,
including the existence of a privative clause and the nature of the issue being
decided. Careful consideration of these matters will reveal the extent of the
discretion conferred, for example, the extent to which the decision formulates
or implements broad public policy. In such cases, the range of permissible
considerations will obviously be much broader than where the decision to be
made is more narrowly circumscribed, e.g., whether a particular claimant is
entitled to a disability benefit under governmental social programs. In some
cases, the court will have to recognize that the decision maker was required to
strike a proper balance (or achieve proportionality) between the adverse impact
of a decision on the rights and interests of the applicant or others directly
affected weighed against the public purpose which is sought to be advanced. In
each case, careful consideration will have to be given to the reasons given for
the decision. To this list, of course, may be added as many “contextual” considerations
as the court considers relevant and material.
[152]
Some of these indicia were included from the outset in the
pragmatic and functional test itself (see Bibeault, at p. 1088). The
problem, however, is that under Bibeault, and the cases that followed
it, these indicia were used to choose among the different standards of review,
which were themselves considered more or less fixed. In Law Society of New
Brunswick v. Ryan, for example, the Court rejected the argument that
“it is sometimes appropriate to apply the reasonableness standard more
deferentially and sometimes less deferentially depending on the circumstances”
(para. 43). It seems to me that collapsing everything beyond “correctness”
into a single “reasonableness” standard will require a reviewing court to do
exactly that.
[153]
The Court’s adoption in this case of a single “reasonableness”
standard that covers both the degree of deference assessment and the reviewing
court’s evaluation, in light of the appropriate degree of deference, of whether
the decision falls within a range of reasonable administrative choices will
require a reviewing court to juggle a number of variables that are necessarily
to be considered together. Asking courts to have regard to more than one
variable is not asking too much, in my opinion. In other disciplines, data are
routinely plotted simultaneously along both an X axis and a Y
axis, without traumatizing the participants.
[154]
It is not as though we lack guidance in the decided cases. Much
has been written by various courts about deference and reasonableness in the
particular contexts of different administrative situations. Leaving aside the
“pragmatic and functional” test, we have ample precedents to show when it is
(or is not) appropriate for a court to intervene in the outcome of an
administrative decision. The problem is that courts have lately felt obliged
to devote too much time to multi-part threshold tests instead of focussing on
the who, what, why and wherefor of the litigant’s complaint on its merits.
[155]
That having been said, a reviewing court ought to recognize
throughout the exercise that fundamentally the “reasonableness” of the outcome
is an issue given to others to decide. The exercise of discretion is an
important part of administrative decision making. Adoption of a single
“reasonableness” standard should not be seen by potential litigants as a
lowering of the bar to judicial intervention.
J. Application
to This Case
[156]
Labour arbitrators often have to juggle different statutory
provisions in disposing of a grievance. The courts have generally attached
great importance to their expertise in keeping labour peace. In this case, the
adjudicator was dealing with his “home statute” plus other statutes intimately
linked to public sector relations in New Brunswick. He was working on his
“home turf”, and the legislature has made clear in the privative clause that it
intended the adjudicator to determine the outcome of the appellant’s
grievance. In this field, quick and cheap justice (capped by finality)
advances the achievement of the legislative scheme. Recourse to judicial
review is discouraged. I would therefore apply a reasonableness standard to the
adjudicator’s interpretation of his “home turf” statutory framework.
[157]
Once under the flag of reasonableness, however, the salient
question before the adjudicator in this case was essentially legal in nature,
as reflected in the reasons he gave for his decision. He was not called on to
implement public policy; nor was there a lot of discretion in dealing with a
non-unionized employee. The basic facts were not in dispute. He was disposing
of a lis which he believed to be governed by the legislation. He was
right to be conscious of the impact of his decision on the appellant, but he
stretched the law too far in coming to his rescue. I therefore join with my
colleagues in dismissing the appeal.
The reasons of Deschamps, Charron and Rothstein JJ. were delivered by
[158]
Deschamps J. — The
law of judicial review of administrative action not only requires repairs, it
needs to be cleared of superfluous discussions and processes. This area of the
law can be simplified by examining the substance of the work courts are
called upon to do when reviewing any case, whether it be in the context of
administrative or of appellate review. Any review starts with the
identification of the questions at issue as questions of law, questions of fact
or questions of mixed fact and law. Very little else needs to be done in order
to determine whether deference needs to be shown to an administrative body.
[159]
By virtue of the Constitution, superior courts are the only
courts that possess inherent jurisdiction. They are responsible both for
applying the laws enacted by Parliament and the legislatures and for insuring
that statutory bodies respect their legal boundaries. Parliament and the
legislatures cannot totally exclude judicial oversight without overstepping the
division between legislative or executive powers and judicial powers. Superior
courts are, in the end, the protectors of the integrity of the rule of law and
the justice system. Judicial review of administrative action is rooted in these
fundamental principles and its boundaries are largely informed by the roles of
the respective branches of government.
[160]
The judicial review of administrative action has, over the past
20 years, been viewed as involving a preliminary analysis of whether deference
is owed to an administrative body based on four factors: (1) the nature of the
question, (2) the presence or absence of a privative clause, (3) the expertise
of the administrative decision maker and (4) the object of the statute. The
process of answering this preliminary question has become more complex than the
determination of the substantive questions the court is called upon to
resolve. In my view, the analysis can be made plainer if the focus is placed
on the issues the parties need to have adjudicated rather than on the nature of
the judicial review process itself. By focusing first on “the nature of the
question”, to use what has become familiar parlance, it will become apparent
that all four factors need not be considered in every case and that the
judicial review of administrative action is often not distinguishable from the
appellate review of court decisions.
[161]
Questions before the courts have consistently been identified as
either questions of fact, questions of law or questions of mixed fact and law.
Whether undergoing appellate review or administrative law review, decisions on
questions of fact always attract deference. The use of different terminology —
“palpable and overriding error” versus “unreasonable decision” — does not
change the substance of the review. Indeed, in the context of appellate review
of court decisions, this Court has recognized that these expressions as well as
others all encapsulate the same principle of deference with respect to a trial
judge’s findings of fact: H.L. v. Canada (Attorney General), [2005] 1
S.C.R. 401, 2005 SCC 25, at paras. 55-56. Therefore, when the issue is limited
to questions of fact, there is no need to enquire into any other factor in
order to determine that deference is owed to an administrative decision maker.
[162]
Questions of law, by contrast, require more thorough scrutiny
when deference is evaluated, and the particular context of administrative
decision making can make judicial review different than appellate review.
Although superior courts have a core expertise to interpret questions of law,
Parliament or a legislature may have provided that the decision of an
administrative body is protected from judicial review by a privative clause.
When an administrative body is created to interpret and apply certain legal
rules, it develops specific expertise in exercising its jurisdiction and has a
more comprehensive view of those rules. Where there is a privative clause,
Parliament or a legislature’s intent to leave the final decision to that body
cannot be doubted and deference is usually owed to the body.
[163]
However, privative clauses cannot totally shield an
administrative body from review. Parliament, or a legislature, cannot have
intended that the body would be protected were it to overstep its delegated
powers. Moreover, if such a body is asked to interpret laws in respect of which
it does not have expertise, the constitutional responsibility of the superior
courts as guardians of the rule of law compels them to insure that laws falling
outside an administrative body’s core expertise are interpreted correctly. This
reduced deference insures that laws of general application, such as the
Constitution, the common law and the Civil Code, are interpreted
correctly and consistently. Consistency of the law is of prime societal
importance. Finally, deference is not owed on questions of law where
Parliament or a legislature has provided for a statutory right of review on
such questions.
[164]
The category of questions of mixed fact and law should be limited
to cases in which the determination of a legal issue is inextricably
intertwined with the determination of facts. Often, an administrative body will
first identify the rule and then apply it. Identifying the contours and the
content of a legal rule are questions of law. Applying the rule, however, is a
question of mixed fact and law. When considering a question of mixed fact and
law, a reviewing court should show an adjudicator the same deference as an
appeal court would show a lower court.
[165]
In addition, Parliament or a legislature may confer a
discretionary power on an administrative body. Since the case at bar does not
concern a discretionary power, it will suffice for the purposes of these
reasons to note that, in any analysis, deference is owed to an exercise of
discretion unless the body has exceeded its mandate.
[166]
In summary, in the adjudicative context, the same deference is
owed in respect of questions of fact and questions of mixed fact and law on
administrative review as on an appeal from a court decision. A decision on a
question of law will also attract deference, provided it concerns the
interpretation of the enabling statute and provided there is no right of
review.
[167]
I would be remiss were I to disregard the difficulty inherent in
any exercise of deference. In Toronto (City) v. C.U.P.E., Local 79,
[2003] 3 S.C.R. 77, 2003 SCC 63, LeBel J. explained why a distinction between
the standards of patent unreasonableness and unreasonableness simpliciter is
untenable. I agree. The problem with the definitions resides in attempts by
the courts to enclose the concept of reasonableness in a formula fitting all
cases. No matter how this Court defines this concept, any context considered by
a reviewing court will, more often than not, look more like a rainbow than a
black and white situation. One cannot change this reality. I use the word
“deference” to define the contours of reasonableness because it describes the
attitude adopted towards the decision maker. The word “reasonableness” concerns
the decision. However, neither the concept of reasonableness nor that of
deference is particular to the field of administrative law. These concepts are
also found in the context of criminal and civil appellate review of court
decisions. Yet, the exercise of the judicial supervisory role in those fields
has not given rise to the complexities encountered in administrative law. The
process of stepping back and taking an ex post facto look at the
decision to determine whether there is an error justifying intervention should
not be more complex in the administrative law context than in the criminal and
civil law contexts.
[168]
In the case at bar, the adjudicator was asked to adjudicate the
grievance of a non-unionized employee. This meant that he had to identify the
rules governing the contract. Identifying those rules is a question of law.
Section 20 of the Civil Service Act, S.N.B. 1984, c. C‑5.1,
incorporates the rules of the common law, which accordingly become the starting
point of the analysis. The adjudicator had to decide whether those rules had
been ousted by the Public Service Labour Relations Act, R.S.N.B. 1973,
c. P‑25 (“PSLRA”), as applied, mutatis mutandis, to
the case of a non-unionized employee (ss. 97(2.1), 100.1(2) and 100.1(5)). The
common law rules relating to the dismissal of an employee differ completely
from the ones provided for in the PSLRA that the adjudicator is
regularly required to interpret. Since the common law, not the adjudicator’s
enabling statute, is the starting point of the analysis, and since the
adjudicator does not have specific expertise in interpreting the common law,
the reviewing court does not have to defer to his decision on the basis of
expertise. This leads me to conclude that the reviewing court can proceed to
its own interpretation of the rules applicable to the non-unionized employee’s
contract of employment and determine whether the adjudicator could enquire into
the cause of the dismissal. The applicable standard of review is correctness.
[169]
It is clear from the adjudicator’s reasoning that he did not even
consider the common law rules. He said:
An employee to whom section 20 of the Civil Service Act and
section 100.1 of the PSLR Act apply may be discharged for cause, with
reasonable notice or with severance pay in lieu of reasonable notice. A
discharge for cause may be for disciplinary or non-disciplinary reasons. [p. 5]
[170]
The employer’s common law right to dismiss without cause is not
alluded to in this key passage of the decision. Unlike a unionized employee, a
non-unionized employee does not have employment security. His or her employment
may be terminated without cause. The corollary of the employer’s right to
dismiss without cause is the employee’s right to reasonable notice or to compensation
in lieu of notice. The distinction between the common law rules of employment
and the statutory rules applicable to a unionized employee is therefore
essential if s. 97(2.1) is to be applied mutatis mutandis to the case of
a non-unionized employee as required by s. 100.1(5). The adjudicator’s failure
to inform himself of this crucial difference led him to look for a cause, which
was not relevant in the context of a dismissal without cause. In a case
involving dismissal without cause, only the amount of the compensation or the
length of the notice is relevant. In a case involving dismissal for cause, the
employer takes the position that no compensation or notice is owed to the
employee. This was not such a case. In the case at bar, the adjudicator’s role
was limited to evaluating the length of the notice. He erred in interpreting s.
97(2.1) in a vacuum. He overlooked the common law rules, misinterpreted s.
100.1(5) and applied s. 97(2.1) literally to the case of a non-unionized
employee.
[171]
This case is one where, even if deference had been owed to the
adjudicator, his interpretation could not have stood. The legislature could not
have intended to grant employment security to non‑unionized employees
while providing only that the PSLRA was to apply mutatis mutandis.
This right is so fundamental to an employment relationship that it could not
have been granted in so indirect and obscure a manner.
[172]
In this case, the Court has been given both an opportunity and
the responsibility to simplify and clarify the law of judicial review of
administrative action. The judicial review of administrative action need not be
a complex area of law in itself. Every day, reviewing courts decide cases
raising multiple questions, some of fact, some of mixed fact and law and some
purely of law; in various contexts, the first two of these types of questions
tend to require deference, while the third often does not. Reviewing courts are
already amply equipped to resolve such questions and do not need a specialized
analytical toolbox in order to review administrative decisions.
[173]
On the issue of natural justice, I agree with my colleagues. On
the result, I agree that the appeal should be dismissed.
APPENDIX
Relevant Statutory Provisions
Civil Service Act,
S.N.B. 1984, c. C-5.1
20 Subject to the provisions of
this Act or any other Act, termination of the employment of a deputy head or an
employee shall be governed by the ordinary rules of contract.
Public
Service Labour Relations Act, R.S.N.B. 1973, c. P-25
92(1) Where an employee has
presented a grievance up to and including the final level in the grievance
process with respect to
(a) the interpretation or
application in respect of him of a provision of a collective agreement or an
arbitral award, or
(b) disciplinary action
resulting in discharge, suspension or a financial penalty,
and his grievance has not been dealt
with to his satisfaction, he may, subject to subsection (2), refer the
grievance to adjudication.
Public
Service Labour Relations Act, R.S.N.B. 1973, c. P-25, as amended
97(2.1) Where an adjudicator
determines that an employee has been discharged or otherwise disciplined by the
employer for cause and the collective agreement or arbitral award does not
contain a specific penalty for the infraction that resulted in the employee
being discharged or otherwise disciplined, the adjudicator may substitute such
other penalty for the discharge or discipline as to the adjudicator seems just
and reasonable in all the circumstances.
. . .
100.1(2) An employee who is not
included in a bargaining unit may, in the manner, form and within such time as
may be prescribed, present to the employer a grievance with respect to
discharge, suspension or a financial penalty.
100.1(3) Where an employee has
presented a grievance in accordance with subsection (2) and the grievance has
not been dealt with to the employee’s satisfaction, the employee may refer the
grievance to the Board who shall, in the manner and within such time as may be
prescribed, refer the grievance to an adjudicator appointed by the Board.
.
. .
100.1(5) Sections 19, 97, 98.1,
101 , 108 and 111 apply mutatis mutandis to an adjudicator to whom a
grievance has been referred in accordance with subsection (3) and in relation
to any decision rendered by such adjudicator.
.
. .
101(1) Except as provided in
this Act, every order, award, direction, decision, declaration or ruling of the
Board, an arbitration tribunal or an adjudicator is final and shall not be
questioned or reviewed in any court.
101(2) No order shall be made or process entered, and no
proceedings shall be taken in any court, whether by way of injunction, judicial
review, or otherwise, to question, review, prohibit or restrain the Board, an
arbitration tribunal or an adjudicator in any of its or his proceedings.
Appeal dismissed.
Solicitors for the appellant: Stewart McKelvey,
Fredericton.
Solicitor for the respondent: Attorney General of New
Brunswick, Fredericton.