Canada: The Court As Tie-Breaker: Atomic Energy And How "Persistent Discord" Begets A Correctness Standard Of Review

In its recent decision in Wilson v. Atomic Energy of Canada Limited, 2015 FCA 17, the Federal Court of Appeal held that the rule of law can require the Court to apply a correctness standard of review to administrative decisions concerning the interpretation of the governing statute in certain cases, such as where adjudicators have long held conflicting interpretations of a particular provision.

Acknowledging that a labour adjudicator's interpretation of a labour statute would be typically subject to a reasonableness review, the Court held that, where adjudicators have disagreed on a point of statutory interpretation for many years, the court must use the correctness standard to "act as a tie-breaker" and "determine the legal point once and for all".

The Court proceeded to determine the substantive issue, holding that a dismissal from employment without cause is not necessarily an "unjust dismissal" under the Canada Labour Code (for more on this finding from a labour law context, see our firm's earlier post in the Ontario Employment Advisor blog, here).

In addition to these important findings, the Court's consideration of the prematurity doctrine further highlights the role of "public law values" in administrative decision-making, and how the values that underlie common law rules can also be used to formulate rational exceptions to those rules.

Background

In Atomic Energy, the Federal Court of Appeal considered the Federal Court's judicial review of an adjudicator's decision under s. 240 of the Canada Labour Code, RSC 1985, c L-2 (the "Code"). The Respondent, Atomic Energy, had dismissed the Appellant's employment without cause and paid him six months' severance. At issue was whether the Appellant employee's dismissal without cause was "unjust" within the meaning of s. 240.

Importantly, prior to Atomic Energy, adjudicators' decisions interpreting s. 240 exhibited two competing views about its proper interpretation: some adjudicators held that the Code forbids an employer from dismissing an employee without just cause, while others held that dismissals without cause are not automatically "unjust" dismissals.

The adjudicator in this case agreed with the Appellant employee, holding that, as a matter of statutory interpretation, the Code only permitted dismissals for cause and, as such, dismissals without cause were necessarily unjust.

Having made that decision, the adjudicator adjourned the hearing, directed the parties to discuss a remedy, and noted that if they did not settle the issue themselves he would conduct a hearing to determine what, if any, remedy was warranted. The Respondent promptly sought judicial review of the adjudicator's decision on the meaning of s. 240, and the adjudicator adjourned the remedies hearing until the judicial review was finally decided.

Rejecting the Appellant's argument that the judicial review was premature, the Federal Court held that the adjudicator's decision interpreting s. 240 was unreasonable, and remitted the matter back to the adjudicator.

The Appellant appealed the Federal Court's decisions on both the prematurity issue and the reasonableness of the decision.

Justice Stratas, writing for the Court, dismissed the appeal.

Standard of review of the statutory interpretation question

The issue before the adjudicator was a question of statutory interpretation, namely, whether s. 240 of the Code, which speaks to "unjust" dismissals, permits dismissals without cause.

The Court clarified that, pursuant to Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36, its role was to assess whether the Federal Court had selected the appropriate standard of review and ensure that such standard was properly applied. The Federal Court had adopted a standard of reasonableness and the parties had agreed that this was the appropriate standard of review. However, the Federal Court of Appeal noted that the choice of standard of review is a question of law and, as a result, it was not bound by the parties' agreement.

The Court acknowledged, first and foremost, that administrative decision-makers' interpretations of provisions in their home statute are normally subject to review on a standard of reasonableness. However, it held that this was an unusual case, as adjudicators acting under the Code had disagreed for a long time on whether s. 240 permits without cause dismissals.

To determine the appropriate standard of review in circumstances where adjudicators disagree on the interpretation of their home statute, the Court turned to the constitutional values articulated in Dunsmuir as underlying our law of judicial review – Parliamentary supremacy and the overriding principle of the rule of law – and the tension between the two in the case at bar:

"In this case, it is true that Parliament has vested jurisdiction in adjudicators under the Code to decide questions of statutory interpretation, such as the question before us. However, on the statutory interpretation issue before us, the current state of adjudicators' jurisprudence is one of persistent discord. Adjudicators on one side do not consider themselves bound by the holdings on the other side. As a result, for some time now, the answer to the question whether the Code permits dismissals on a without cause basis has depended on the identity of the adjudicator. Draw one adjudicator and one interpretation will be applied; draw another and the opposite interpretation will be applied. Under the rule of law, the meaning of a law should not differ according to the identity of the decision-maker. [Emphasis added]

The Court recognized that, in some cases, it could be expected that different panels of administrative decision-makers would sort out any disagreement on statutory interpretation through the development of tribunal jurisprudence or institutional discussions, before continuing:

"However, here, we are not dealing with initial discord on a point of statutory interpretation at the administrative level. Instead, we are dealing with persistent discord that has existed for many years. Further, because no one adjudicator binds another and because adjudicators operate independently and not within an institutional umbrella such as a tribunal, there is no prospect that the discord will be eliminated. There is every expectation that adjudicators, acting individually, will continue to disagree on this point, perhaps forever.

As a result, at a conceptual level, the rule of law concern predominates in this case and warrants this Court intervening to end the discord and determine the legal point once and for all. We have to act as a tie-breaker. [Emphasis added]

The Court also considered the presumption stated in Dunsmuir that the standard of review is correctness for a question of law of "central importance to the legal system", whose "impact on the administration of justice as a whole" is such that it "require[s] uniform and consistent answers". In such cases, the court must provide its view of the correct answer to decide the matter.

Interestingly, the Court held that the outcome would have been the same even if the standard of review had been reasonableness, since little deference would have been owed to the expertise of the decision-maker given that the statutory interpretation question involved little specialized labour insight.

Ultimately, noting that the common law permits dismissals without cause, and that the legislature is presumed not to depart from the prevailing common law unless it expresses its intention to do so with "irresistible clearness", the Court upheld the Federal Court's decision that the adjudicator's view that the Code did not permit without cause dismissals was unreasonable. However, the Court declined to clarify the meaning of "unjust", holding that "It is for Parliament's chosen decision-makers in this specialized field – the adjudicators – to develop the jurisprudence concerning the meaning of "unjust" on an acceptable and defensible basis..."

Prematurity and an exception to the general rule

The Federal Court did not accept the Appellant's argument that the Respondent's application for judicial review should be rejected on the basis of prematurity (since the adjudicator had not finally decided the matter, having adjourned the issue of remedy). The Federal Court of Appeal found no grounds to set aside the Federal Court's exercise of discretion on this issue, and thus upheld its rejection of the doctrine of prematurity in this case.

The doctrine of prematurity in administrative law1. provides that parties can proceed to the courts only after all adequate remedial recourses in the administrative process have been exhausted. The rationale for the rule was explained in Canada (Border Services Agency) v. C.B. Powell Ltd., 2010 FCA 61, at para 32:

"[The general rule against premature judicial review] prevents fragmentation of the administrative process and piecemeal court proceedings, eliminates the large costs and delays associated with premature forays to court and avoids the waste associated with hearing an interlocutory judicial review when the applicant for judicial review may succeed at the end of the administrative process anyway.

The Court observed that these reasons were grounded in "public law values": principles inherent in administrative law, which include the rule of law; principles of good administration; the democratic principle; and the separation of powers. The doctrine of prematurity, the Court held, reflects the value of good administration, by encouraging cost savings, efficiencies, and allowing administrative expertise to be fully brought to bear before involving reviewing courts, as well as the value of the democratic principle, by vesting elected legislators with the primary responsibility of decision-making (via adjudicators), rather than the judiciary.

Given the weight of these values, the Court noted that exceptions to the general rule against premature judicial reviews are "most rare". However, the circumstances of this case were unusual: the adjudicator had adjourned while the judicial review was ongoing, in light of the legal point for which review was sought which had "festered for many years and [had] divided adjudicators into two schools of thought". Although judicial review might delay this particular case, it permitted the Court to settle this "nagging legal point" once and for all.

With these circumstances in mind, the rationale underlying the general rule against premature judicial review did not preclude judicial review here; rather, those same reasons actually supported the Court's decision to proceed with the judicial review when it did.

Case Information
Wilson v. Atomic Energy of Canada Limited, 2015 FCA 17
Docket: A-312-13
Date of Decision: January 22, 2015

Footnote

1. Sometimes referred to as "the doctrine of exhaustion", "the doctrine of adequate alternative remedies", or "the rule against fragmentation of administrative proceedings", among others.

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