“Persistent Discord” and the Standard of Review in Dismissal Cases: Wilson v Atomic Energy
In Wilson v Atomic Energy of Canada Limited, 2015 FCA 17 [Wilson], released January 22, 2015, the Federal Court of Appeal (“FCA”) dismissed an appeal relating to a dismissal from employment under the Canada Labour Code, RSC 1985, c L-2 [CLA]. This judgment covers a broad range of administrative law issues, clarifying the permissibility of dismissal without cause and indicating the standard of review to be used when addressing cases with persistent discord in adjudicator opinions.
The appellant, John Wilson, was employed for over 4 years with AECL, receiving many promotions during his employment. On November 16, 2009, his employment was terminated on a without cause basis. AECL offered him a severance package of roughly six months pay for full and final release. The appellant did not sign the release and instead filed a complaint of unjust dismissal under section 240 of the CLA. He remained on AECL’s payroll and in the end received the full amount of the severance package that had been offered to him. An adjudicator was appointed to address Mr. Wilson’s complaint.
Both parties agreed on two “preliminary questions” to be decided by the arbitrator on the basis of an agreed-upon statement of facts. Firstly, as a matter of statutory interpretation, could AECL lawfully terminate the appellant’s employment on a “without cause” basis and, if so, whether the severance package paid gave rise to a “just dismissal.”
The adjudicator decided in favour of the appellant, “that as a matter of statutory interpretation AECL could not terminate the appellant on a without cause basis, pay him severance, and have the complaint dismissed” (para 18). After reaching this conclusion, the adjudicator decided to adjourn before holding a hearing on determining a remedy, allowing the parties to discuss and attempt to come to an agreed upon settlement.
At this point, AECL brought an application for judicial review to the Federal Court, “alleging that the adjudicator’s decision, one of statutory interpretation, was unreasonable” (para 20). In response, the appellant argued that the application for judicial review should be dismissed on grounds of prematurity and that the adjudicator had correctly interpreted the CLA.
The adjudicator was not stayed pending the judicial review, and could have continued the proceedings to hold a hearing determining remedies. However, “after consulting with the parties, he chose not to” (para 21). The FCC rejected the appellant’s prematurity objection and disagreed with the adjudicator’s interpretation of the CLC, quashing the decision as unreasonable. Mr. Wilson appealed on both issues to the FCA.
The FCA Decision
The FCA agreed with the FCC’s judgment to reject the appellant’s objections and quash the adjudicator’s decision. In doing so, Stratas J.A. outlined several important points relating to judicial review and the nature of the CLA.
For the prematurity objection, the FCA was reviewing a decision made by the FCC, not the adjudicator. Therefore, the standard of review was the one set out in Housen v Nikolaisen,  2 SCR 235. Legal issues are to be decided on a correctness standard and factual issues are only to be set aside on the basis of palpable and overriding error.
The general rule against prematurity is set out in Canada (Border Services Agency) v CB Powell Ltd, 2010 FCA 61 [Powell]: “parties can proceed to the court system only after all adequate remedial recourses in the administrative process have been exhausted” (Powell, para 21). The rationales behind the general rule are grounded in “public law values,” which include the rule of law, principles of good administration, the democratic principle, and the separation of powers. The general rule against premature judicial review reflects the principle of good administration by encouraging efficiency and cost savings, and the democratic principle in respecting the fact that elected legislators have chosen to vest responsibility of decision-making in the adjudicators, not in the judiciary.
Exceptions to the general rule are rare, and the recognized exceptions are cases “where the public law values do not sound loudly in the particular circumstances, the public law values are offset by competing public law values, or both” (para 33). In the present case, the adjudicator likely found the break in the proceedings to be natural and practical. He was not stopping the hearing in the middle of the merits phase of the proceedings, as was the case in Powell, but bifurcated the merits and the remedy.
The adjudicator’s decisions “to adjourn and to remain adjourned while judicial review was on-going were discretionary procedural choices suffused by factual policy appreciation that deserve respect” (Wilson, para 38). The adjudicator in the present case “had many defensible reasons based on policy and fact for acting as he did” (para 38). The FCA concluded that “the rationales underlying the general rules against premature judicial reviews do not sound loudly here. In fact, they support it” (para 40).
Standard of Review
This part of the appeal examined the Federal Court’s review of the adjudicator’s decision, as opposed to an examination of the FCC’s own original decision. The standard of review would be that in Agraira v Canada (Public Safety and Emergency Preparedness),  2 SCR 559, where the FCA must determine whether the FCC correctly chose the appropriate standard of review, and whether it was properly applied.
The central legal issue in this case concerned statutory interpretation, whether or not the CLA permits dismissals on a without cause basis. The FCC chose to review the decision on the standard of reasonableness; that the adjudicator’s decision must fall within an acceptable and defensible range based on the facts and the law. This standard is typical when assessing a labour adjudicator’s interpretation of a provision in a labour statute. However, the FCA was not convinced that reasonableness was the proper standard for this case.
The FCA used Dunsmuir v New Brunswick,  1 SCR 190 [Dunsmuir], to determine the appropriate standard of review, both conceptually and by way of presumptive rule. Conceptually, there are two constitutional principles that underlie the law of judicial review: Parliamentary supremacy and the rule of law. Parliament has vested jurisdiction in adjudicators under the CLA, however “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” (Wilson, para 52). This means that an answer to whether the CLA permits without-cause dismissals depends upon the identity of the deciding adjudicator. This violates the rule of law, where “the meaning of a law should not differ according to the identity of the decision-maker” (para 52).
While in some situations, tribunals can work out differing opinions through development of their jurisprudence over time without interference by the courts, this case deals with “persistent discord that has existed for many years…[with] no prospect that the discord will be eliminated” (para 54). In order to curtail the possibility of adjudicators continuing to disagree, perhaps indefinitely, the FCA acted as a tiebreaker. Therefore, “at a conceptual level, the rule of law concern predominated in this case and warrants [the FCA] intervening to end the discord and determine the legal point once and for all” (para 55).
The second means to reach a decision is by way of presumptive rule, which states that where a question of law is one of “central importance to the legal system” and is outside the “specialized area of expertise” of the administrative decision-maker, correctness is presumed to be the standard of review (Dunsmuir, para 55). Legal questions of central importance are those whose “impact on the administration of justice as a whole” is such that they “require uniform and consistent answers” (para 60).
In the present case, “the specialized expertise of adjudicators has not led to one acceptable answer on the statutory interpretation issue” (Wilson, para 57). The divided camps of opinion created a “persistent discord” that was unlikely to correct itself over time, forcing rule of law concerns to take priority and therefore making correctness the appropriate standard of review.
Merits of the Statutory Interpretation Question
The FCA concluded, “a dismissal without cause is not automatically ‘unjust’ under Part III of the CLA. An adjudicator must examine the circumstances of the particular case to see whether the dismissal is unjust” (para 62). In reaching this conclusion, the FCA looked to the relationship between the common law of employment and Part III of the CLA to see whether they can coexist. At common law, “an employee dismissed without cause but given reasonable notice is not wrongfully dismissed” (para 63). In the CLA, subsection 242(3) empowers an adjudicator to “consider whether the dismissal of the person who made the complaint was unjust” and sets out possible remedies.
A legislator is presumed not to depart from prevailing common law unless they do so by way of explicit language or necessary implication. This is not the case here, as the CLA “was enacted against the backdrop of the common law and does not explicitly oust it in this respect,” and there “is nothing in the Code or in its purpose that suggest that Parliament was … trying to place unionized and non-unionized employees in the same position: protected from being dismissed without cause” (para 67). If Parliament had such an intention, there was nothing stopping them from stating so explicitly.
Instead, the CLA introduces remedies previously unavailable as under the common law. These are not “evidence of a sea-change in the meaning of what constitutes an unjust dismissal” (para 72), but simply an intention to offer employees remedies over and above those available under common law.
While Stratas J.A. was careful to explain just how unusual the circumstances of this case were, there may be some unease in determining when exactly a reviewing court may intervene to displace existing definitions with their own interpretation of a tribunal or adjudicator’s home statute. While the FCA distinguished between those situations where there is only “initial stages of discord” as opposed to “persistent discord,” there is no concrete basis upon which to differentiate the two. If the rule of law does “require uniform and consistent answers” in our legal system’s operation, surely there must be more definitive rules to designate when the judiciary may tamper with administrators’ Parliamentary-imposed decision making powers.
Another concern may be in the definition of “unjust.” The FCA states that”‘unjust” as used in the CLA is not the same as the concept of dismissal for “just cause” under the collective agreement. Instead, “‘unjust’ is a term that sits alongside and gathers much, if not all, of its meaning from well-established common law and arbitral cases concerning dismissal … It is for … the adjudicators to develop the jurisprudence concerning the meaning of ‘unjust’ on an acceptable and defensible basis” (para 100).
Assessing and replacing much of adjudicator developed law and stopping short of confirming the definition upon which the analysis hinges may be deferential, but is also ambiguous. While this judgment clarifies that without cause dismissals are not automatically unjust, it leaves open the standard against which adjudicators’ must use their discretion to analyze the circumstances of each case.