Northern Exposure

Appealing Employment Tribunal Decisions May Be Easier

McCarthy Tetrault

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.

In Canada, and from an HR perspective, such agencies include labor boards, labor arbitrators, human rights tribunals, pay equity tribunals, and employment standards adjudicators.

Imagine an employee files a human rights complaint. The employee claims that he was denied a promotion because of his race. Imagine that your company fights the case before the human rights tribunal . . . and wins!! Imagine that before you can even put down your celebratory cocktail(s), the employee appeals the decision to the courts.

You thought the decision was final and that the matter was put to rest. In a panic, you immediately call your labor and employment lawyer and ask:

  • 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, like 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 right tribunal members who have years of expertise in human rights law be in the best position to decide?
  • And, of course, what is this going to cost me?

These are the questions that have plagued courts and lawyers for some time in “administrative law,” the body of case law that governs the activities of administrative agencies.

Traditional thinking is that 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 specialized legal issues related to their specialty.

For example, an employee alleges that a supervisor sexually harassed him or her. The case goes before the 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 the 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 better position to decide whether a breach of contract occurred than a tribunal because the courts are accustomed to interpreting contracts.

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

  • whether the law governing the tribunal expressly provides a right of appeal to a court;
  • the purpose of the administrative agency (for example, is the primary purpose to educate the public or to resolve disputes?);
  • the nature of the question at issue; and
  • the expertise of the administrative agency.

And then there were two
Until recently, Canadian courts used those four factors to decide which of three “standards of review” should be applied to the decisions of administrative tribunals: (1) “correctness,” (2) “reasonableness,” or (3) “patent unreasonableness.”

The courts would look at the four factors to decide whether they should be more ready to intervene based on the “correctness” standard; more reluctant to intervene based on the “reasonableness” standard, or most reluctant to intervene based on the “patent unreasonableness” standard.

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 it remains to be seen what the practical outcome of this decision will be, there is speculation that lower courts may see this change as a reason to give less deference to administrative agencies. Indeed, 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 it “another kick at the can” as the standard to overturn such a decision may now not be as high.

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 to be reviewed.

So put down your glasses and pick up your pens (and your Canadian lawyer will grab his or her robe). It may be time to go to court!