Dunsmuir: Clarification of Judicial Review Standards?

During a visit to Ottawa last Tuesday, I sat in on the Supreme Court of Canada’s (“SCC”) hearing of Dunsmuir v. New Brunswick (Board of Management), 2006 NBCA 27 (CanLII). Although this case centers around whether non-unionized civil service employees may be dismissed with reasonable notice or pay in the absence of cause, there could also be implications for judicial review standards because this case deals with an appeal of a judicial review of an adjudicator’s decision.

In August 2004, Mr. Dunsmuir, an employee of New Brunswick’s Department of Justice, was terminated and given four and a half months pay in lieu of notice. Despite the fact that Mr. Dunsmuir had been reprimanded on three separate occasions prior to his dismissal, his termination letter did not explicitly outline his dismissal as disciplinary and was thus, ‘without cause.’ During the grievance hearing initiated by Mr. Dunsmuir, the province argued that, based on their employment contract, it had the right to terminate Mr. Dunsmuir’s employment in this manner, and that it was not necessary for them to have just cause in their dismissal. The adjudicator, however, ruled against the province, and decided that Mr. Dunsmuir had been denied procedural fairness because he did not have the opportunity to answer for the actual reasons for which he thought his employment was terminated. He ordered that Mr. Dunsmuir be reinstated.

Upon judicial review, the Court of Queen’s Bench used a ‘correctness’ review standard and determined that the adjudicator’s jurisdiction was limited to determining the reasonableness of the notice period. Accordingly, the adjudicator was in error when he reinstated Mr. Dunsmuir. On appeal, the Court of Appeal, using the four contextual factors summarized in Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 SCR 982 [Pushpanathan], settled on a more deferential ‘reasonableness’ standard. Nevertheless, it was found that

“once the Province elects to terminate an employment with notice, the argument that the jurisdiction of the adjudicator is limited to assessing the reasonableness of the notice period seems unassailable.” (para 26)

The Court of Appeal showed much deference to the decision-making power of the province outlined in the employment contract, saying that

it makes no sense that an employer who possesses the legal right to terminate an employee with notice can be forced into an adjudicative hearing in which the employer is cross-examined as to the true reasons for the issuance of a notice terminating the employment. (para 27)

Indeed, at the SCC hearing, this very same concern was echoed by many of the justices, i.e., that if this appeal is allowed, the very right of employers to contract with their employees may be detrimentally affected, to the extent that civil service employers will be mired in adjudicative hearings from disgruntled non-unionized employees that are seeking unjustified recompense for their dismissals.

With regards to the standard of review question, the SCC justices seemed ready to accept the proposition that there is much complexity as to the determination of the appropriate standard of review. In response to Charron J.’s question of how a more simplified approach might look, counsel for Mr. Dunsmuir suggested that when there is a privity clause (as there is in this case), a great deal of deference should be accorded to the adjudicator. He suggested that deference should be accorded unless the decision was “clearly irrational,” so as to achieve the intended efficiencies for which the administrative bodies were created.

Though it is difficult to foresee the outcome based on oral arguments alone, it seems at least plausible that the SCC is concerned with the complexity in this area of administrative law. It’ll be interesting to see if the SCC will take this opportunity to elucidate or clarify the pragmatic and functional approach given in Pushpanathan, so that judicial review standards may be more consistent.