Issue #42: May 22, 2022
Judicial precedents, nuances in reasonableness review, procedural fairness and substance
Canada (Attorney General) v National Police Federation, 2022 FCA 80 (May 13, 2022)
Category: Application of the reasonableness standard (judicial precedent).
Context: This is a decision of the Federal Public Sector Labour Relations and Employment Board (the Board). The Board found that the employer had violated a “statutory freeze” contained in the Federal Public Sector Labour Relations Act. The legislation imposes a freeze on the terms and conditions of employment in cases where (1) an application for certification has been made and (2) a notice to bargain has been given [1]. The theory behind these statutory freezes “prevents employers from unilaterally altering the terms and conditions” of employment in these circumstances, while simultaneously supporting the duty to recognize a union and bargain in good faith [1,3]. The Board found that the employer’s decision to change employee eligibility for promotion once the freeze had already begun violated the legislation. The employer, before the FCA, argued that the Board’s decision was unreasonable because it is at odds with a decision of the Supreme Court of Canada (United Food and Commercial Workers, Local 503 v Wal-Mart Canada Corp, 2014 SCC 45).
Issue: Is the decision unreasonable because it failed to account for the precedent?
Holding: The decision is reasonable.
Analysis: This is an interesting decision summarizing the role of precedent as a contextual constraint under the Vavilov framework. It specifically addresses how a binding precedent constrains an administrative decision. As the case shows, Vavilov does not prescribe a bright-line rule.
First, the employer argued that a failure to follow a judicial precedent (as opposed to an administrative precedent, see Vavilov at para 131-132) “must necessarily result in an administrative decision being set aside” [46]. As much as I find this argument theoretically attractive—and as much as at least one court has seemed to even accept this line of thinking— it is not supported by Vavilov (see Girard v Canada (Attorney General), 2022 FC 578 at para 59). Vavilov expressly says an administrator can depart from judicial precedent, but it must have “regard” to that precedent and “explain why a different interpretation is preferable by, for example, explaining why the court’s interpretation does not work in the administrative context…” (Vavilov, at paras 112-113). This is consistent with the “culture of justification” Vavilov endorsed. Accordingly, the Court here says that the focus must be on the reasons given by the decision-maker for interpreting or declining to follow a precedent [54]. This is the right statement of the law.
On the merits of the Board’s interpretation of Wal-Mart, and as a preliminary matter, the Court noted that significant deference attaches to the Board [84]. It highlighted the expertise of the Board, the privative clause in the legislation, and the conclusion that “courts in this country have consistently held that decisions of this nature cannot be lightly interfered with” [85]. In my view, this is too quick a conclusion if it is meant as a general statement. The extent of deference owed in a particular case is a function of Vavilov’s contextual constraints. In labour decisions, these constraints may bind less tightly, depending on the question at issue. But this conclusion should not be advanced presumptively at the outset in respect of all questions before all labour boards. It will depend on an analysis of the constraints in a particular case, and the reasons of the decision-maker in addressing those constraints. On this front, labour boards should be treated no differently than any other board.
However, on the merits themselves, the Court’s conclusion is amply supported and the Board’s reasons here seem fine. Here, the Board’s interpretation of Wal-Mart “squarely conforms to the labour precedents decided both before and after Wal-Mart” [90]. In other words, the Board clearly addressed Wal-Mart and came up with a plausible interpretation of it. Additionally, so-called “freeze cases” are “inherently factual in nature” in that a change in employment terms and conditions must be assessed against the law and the facts in a particular case [96]. Where, as here, the Board’s reasons were fulsome, supported by internal precedent, and the interpretation of the judicial precedent is reasonable, there is no basis to interfere.
Interestingly, the FCA wholly rejects an attempt by Justice Grammond in the Federal Court to formalize the process for determining whether and how a precedent is binding: see Service d’administration PCR Ltee v Reyes, 2020 FC 659. This was basically a checklist approach to the issue. I think the Court rightly rejects this attempt as “overly Cartesian” [52]. Even if I do not think the Vavilov approach to this issue is theoretically attractive, it is the law, and it is easy to state. There is no need to complicate it any further, and so the FCA here comes forth with some common sense.
Canada (Attorney General) v Hull, 2022 FCA 82 (May 13, 2022)
Category: Application of the reasonableness standard (judicial precedent).
Context: This is an application for judicial review of a decision of the Appeal Division of the Social Security Tribunal. The Appeal Division concluded, as a factual matter, that Hull had elected to receive standard parental employment insurance benefits rather than extended parent employment insurance benefits. This was despite the fact that Hull “selected the option of [extended benefits] on the application form…” [1]. In this conclusion, the Appeal Division upheld the General Division’s conclusion that the term “elect” in the relevant provision of the Employment Insurance Act meant what a person intended to elect rather than what they indicated in their application form [3].
Issue: Is the Appeal Division’s decision reasonable?
Holding: No.
Analysis: There are two issues of reasonableness here: a failure to follow judicial precedent (Karval v Canada (Attorney General), 2021 FC 395), and a failure of interpretation.
The Court concludes that the Appeal Division’s decision is unreasonable because it did not follow a binding precedent in which the same provision has been interpreted [33]. Query how this statement stands with the above case, National Police Federation. National Police Federation convincingly interprets Vavilov to say that administrative reasoning around the precedent matters, and a departure from precedent automatically makes the decision unreasonable. In other words, the mere fact that the decision is contrary to a judicial precedent will not necessarily be fatal.
Here, it appears that the Appeal Division discussed Karval and applied it, though the Court finds that the reliance on Karval is “misplaced” [31].
The problem seems to be that Karval simply did not say what the Appeal Division said it did, or otherwise that it just wasn’t relevant.
Perhaps this is a different problem than simply stating that an administrator choosing not to follow a precedent is automatically unreasonable. Distinguishing these two situations may make sense of any difference between National Police Federation and Hull. So, maybe there are two cases. Case #1 is National Police Federation, where the decision-maker correctly interprets the precedent and distinguishes it or applies it accordingly. In that case, the Court assesses the reasoning offered. Case #2 is Hull, where the decision-maker failed to even properly interpret the precedent’s relevance to the case. In such a case, any reasoning based on the improper interpretation is not relevant—the decision-maker has proceeded on the wrong foot to begin with. While this seems attractive, it also divides Vavilov’s analysis into two parts, complicating things, and this seems contrary to the whole point of Vavilov. On my part, this requires more thought!
The Court concludes that the interplay of text, context, and purpose here leaves only one reasonable result [42]. The Appeal Division’s conclusion (upholding the General Division) arguably read-in to the legislation an ability for a claimant to elect differently than what the form actually states. But such an interpretation seems to run counter to the ordinary meaning of the term “elect” [45-47], and the purpose of the provisions to ensure certainty for all involved [59]. Focusing on intention rather than the actual act of election does not promote certainty and most importantly, it is inconsistent with the statutory text.
RothLochston BEL Ltd v USW, Local 6480, 2022 NLSC 83 (May 17, 2022)
Category: Application of reasonableness standard
Context: This is a judicial review of a labour arbitrator decision. The arbitrator concluded that RothLochston’s termination of an employee for “knowingly violating” a safety rule did not pass muster because the employee had not actually violated the rule “knowingly.”
Issue: Is the arbitral decision reasonable?
Holding: Yes.
Analysis: For our purposes, I will put aside the somewhat specific issue whether the reasonableness standard should actually be applied here (the Court says that RothLochston “sought judicial review” under a provision of the Arbitration Act that allows for an award to be “set aside” [28]).
The arbitrator apparently defined “knowingly” as “meaning a deliberate or intentional violation of the [safety rule]” on a subjective basis [34]. RothLochston argued that this was an error; instead, the arbitrator should have considered an interpretation of “knowingly…that included imputation of knowledge” [36]. But the Court found no fault with this. The term “knowingly violated” comes from RothLochston’s employment policy—and so this is different from a case where there is dispute over a “legal test” or a statutory term [49, 55]. Especially where, as here, it was not clear that RothLochston even raised an alternative interpretation before the arbitrator [57-58], this is a case where a deferential standard makes sense and was properly applied by the judicial review court.
Sigma Risk Management Inc v Canada (Attorney General), 2022 FCA 88 (May 18, 2022)
Category: Application of the reasonableness standard
Context: Sigma’s application before the Canadian International Trade Tribunal (the CITT) was rejected by the CITT because the complaint was filed by Sigma beyond the deadline prescribed by section 6 of the Canadian International Trade Procurement Inquiry Regulations.
Issue: What is the standard of review on the lateness issue?
Holding: The standard is reasonableness.
Analysis: A neat little case that shows the relevance of characterizing administrative law issues for standard of review purposes. Sigma argued that the standard of review here was correctness because the issue of lateness is a procedural fairness concern. Specifically, Sigma said that the clock should have only started running once Sigma had been notified of its right to file a complaint. On first blush, this issue might sound like one of procedural fairness, having to do with notice.
But fundamentally the question is one of interpretation: Sigma’s argument is “an attack on the reasonableness of the Tribunal’s application of its home statute” [4]. The alternative interpretation suggested by Sigma might lead to an interpretation that is more respectful of procedural rights. But fundamentally, the challenge is to the Tribunal’s understanding of a statutory provision, which on Vavilov’s terms, attracts the presumption of reasonableness.
Telus Communications Inc. v. Vidéotron Ltée, 2022 FC 726 (May 17, 2022)
Category: Application of the reasonableness standard (materiality)
Context: A delegate of the Minister of Industry concluded that Videotron was eligible to bid on set-aside spectrum in a telecommunications spectrum auction for Western Canada. Spectrum is a special word for “electromagnetic waves of various frequencies” which is controlled and managed by the Minister of Industry as a public good, under broad authority conferred by the Radiocommunication Act. As the Court noted, “[t]he spectrum in question is critical for the development of 5G network techology” [1]. Telus challenged the decision permitting Videotron to bid on the spectrum auction.
The process for the decision is described in detail in the FC decision, but see the below paragraph:
As I have noted, the Framework allowed for an iterative process, where the bidder would submit information, ISED could request corrections or additional information, and could perform the requisite verifications to ensure compliance with eligibility criteria. Prospective bidders would be informed of whether they had been found eligible within the prescribed period. This iterative process, including the post-submission verifications, should come as no surprise to Auction participants: not only being spelled out in the Framework, at paras 435, 437, but also indicated on the set-aside eligibility form [108].
Issue: Is the decision reasonable?
Holding: Yes.
Analysis: On the substantive merits, Telus specifically argued that a government subdelegate’s use of certain terms in one of the forms involved in the iterative process was “confusing, ambiguous, and unintelligible [125-126], and that these and other “errors” show that no acceptable line of reasoning was employed.
Here, Telus’ arguments were basically directed towards the form in which the decision took, which in part is due to the iterative process employed in this type of polycentric decision-making. In my view, the Court rightly rejected these arguments. As the Court says, these are wholly “superficial shortcomings” which do not undermine or contradict the entire record produced in this case [129, 135]. The materiality requirement in Vavilov, along with the basic idea that a decision must be assessed in its entirety, means that a decision with “errors” like this should be reasonable, even despite those minor missteps.
Disclaimer: Nothing in the SEAR is legal advice. The SEAR is not designed to be comprehensive. It is designed to collect some cases that I believe are interesting to practitioners and students, and to provide my quick thoughts. Not all of the cases presented are fully analyzed ie) I’ve selected the most relevant issues in some of the cases. Please complement the SEAR with your own research and study. Any mistakes are my own.
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