Canada: It May Not Be Over Yet: The Supreme Court Of Canada May Have Just Made It Easier To Appeal Decisions Of Employment Tribunals

A recent decision by the Supreme Court of Canada may make it easier for employees and employers to appeal decisions of administrative agencies to the courts. From a human resources perspective, such agencies include labour boards, labour arbitrators, human rights tribunals, pay equity tribunals and employment standards adjudicators.

Imagine that you have an employee who files a human rights complaint claiming he was denied a promotion because of his race. Your company fights the case before the human rights tribunal and wins. Before you can even start your celebration, the employee appeals the decision to the courts.

You thought the decision was final and that the matter was put to rest. Now you have these questions:

  • I thought we weren't in court; how can they appeal to a court now?

  • Is the employee likely to win in court?

  • How will the court decide whether the tribunal came to the right conclusion?

  • Should a court be able to overturn the decision of the human rights tribunal?

  • How can a judge, who deals with all kinds of matters, such as contract disputes, divorces or criminal prosecutions, be in a better position to decide whether the employee's human rights were violated?

  • Shouldn't the human rights tribunal members, who have years of expertise in human rights law, be in the best position to decide?

These are the questions that have for some time plagued courts and lawyers in "administrative law," the body of case law that governs the activities of administrative agencies. According to traditional thinking, courts are in the best position to decide questions of general law and specialized administrative agencies are in the best position to decide factual questions and specific legal issues related to their area of expertise.

For example, an employee alleges that he or she was sexually harassed by a supervisor. The case goes before a human rights tribunal. All the members of the human rights tribunal hearing the case must have several years of experience in human rights law. In this case, the tribunal is probably in a better position than a court to decide whether the employee was sexually harassed.

In contrast, take the example of an employee who alleges that his or her employer violated a term of the employment agreement, such as a stock option plan. In this case, a court is arguably in as good or a better position to decide whether a breach of contract occurred than a tribunal, because the courts are experienced in interpreting contracts.

The following factors have been applied to determine the extent to which a court should intervene in an administrative tribunal's decision:

  1. whether the law governing the tribunal expressly provides a right of appeal to a court;

  2. the purpose of the administrative agency (e.g., is the primary purpose to educate the public or to resolve disputes?);

  3. the nature of the question at issue; and

  4. the expertise of the administrative agency.

Until recently, courts used these four factors to decide which of three "standards of review" should be applied to the decisions of administrative tribunals. To state it simply:

  1. If the court was in the best position to decide the question at issue, then the decision of the administrative agency had to be "correct" for the court to uphold the decision. This is a high standard — the administrative agency cannot afford to be wrong.

  2. If the administrative tribunal was in a better position to decide the question at issue, then the decision of the administrative tribunal had to be "reasonable" for the court to uphold the decision. In other words, the decision of the administrative tribunal did not have to be correct; it just had to be a "reasonable" one out of a range of possible options.

  3. If the administrative tribunal was in the best position to decide the question at issue, then the decision of the administrative tribunal had to be "patently unreasonable" for the court to strike it down. In other words, the court deferred to the expertise of the administrative tribunal and would only strike down the decision if no reasonable person would have come to the conclusion the tribunal did.

And Then There Were Two...

The recent decision by the Supreme Court of Canada changes this. In Dunsmuir v. New Brunswick, the court eliminated the "patently unreasonable" standard of review. From now on, decisions of administrative tribunals will be reviewed to determine simply whether they are "correct" or "reasonable."

How Does This Impact You?

While the practical outcome of this decision remains to be seen, there is speculation that lower courts may see this change as a reason to give less deference to administrative agencies. A court no longer has to find that the administrative tribunal's decision was "patently unreasonable" to intervene and reverse a decision.

The bad news? Employees who were unsuccessful before an administrative tribunal may be more likely to give their case "another kick at the can." The good news? In the same manner, employers who were unsuccessful before an administrative tribunal may also benefit from having a greater right to take the tribunal's decision to court for review.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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