Canada (Attorney General) v. Zalys

Canada (Attorney General) v. Zalys
Court (s) Database
Federal Court of Appeal Decisions
Date
2020-04-28
Neutral citation
2020 FCA 81
File numbers
A-406-18
Notes
Digest
Decision Content
Date: 20200428
Docket: A-406-18
Citation: 2020 FCA 81
CORAM:
BOIVIN J.A.
GLEASON J.A.
RIVOALEN J.A.
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Appellant
and
ALLAN BRADLEY ZALYS
Respondent
Heard at Vancouver, British Columbia, on January 15, 2020.
Judgment delivered at Ottawa, Ontario, on April 28, 2020.
REASONS FOR JUDGMENT BY:
BOIVIN J.A.
CONCURRED IN BY:
RIVOALEN J.A.
DISSENTING REASONS BY:
GLEASON J.A.
Date: 20200428
Docket: A-406-18
Citation: 2020 FCA 81
CORAM:
BOIVIN J.A.
GLEASON J.A.
RIVOALEN J.A.
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Appellant
and
ALLAN BRADLEY ZALYS
Respondent
REASONS FOR JUDGMENT
BOIVIN J.A.
[1] I have had the benefit of reading the reasons drafted by my colleague, Gleason J.A. I agree with the facts as she has set out, as well as her conclusion that the style of cause should be amended as the appellant requests. However, and with respect, I am unable to agree with her that the appeal should be allowed only in part with costs to the respondent.
[2] The appellant appeals from the judgment of the Federal Court in Zalys v. Canada (Royal Mounted Police), 2018 FC 1122, 298 A.C.W.S. (3d) 863, which granted the respondent’s application for judicial review of the June 8, 2017 decision of a Level II Adjudicator (the Adjudicator) appointed under the Royal Canadian Mounted Police Act, R.S.C. 1985, c. R-10 (as it read prior to November 28, 2014). The Adjudicator denied the respondent’s grievance in which he sought to have service pay included in the lump sum payout of annual leave he received when he retired from the RCMP. The respondent then sought judicial review before the Federal Court. The Federal Court found that the Adjudicator’s decision was unreasonable and remitted the matter back with directions for the Adjudicator to “adopt an interpretation upholding the [respondent’s] position” (Federal Court’s Reasons at paras. 26, 69-70).
[3] For the following reasons, I would allow the appeal with costs, set aside the judgment of the Federal Court, dismiss the application for judicial review, and restore the decision of the Adjudicator.
[4] On an appeal of a judicial review decision, as stated by my colleague, our Court must determine whether the Federal Court appropriately selected and properly applied the standard of review: Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36, [2013] 2 S.C.R. 559 at paragraphs 45-47; Canada Revenue Agency v. Telfer, 2009 FCA 23, 386 N.R. 212 at paragraph 18. The standard of review in this application for judicial review is reasonableness. Our Court must therefore focus on the decision of the Adjudicator and determine whether, in reviewing it, the Federal Court identified reasonableness as the standard of review and applied it correctly.
[5] In assessing the Adjudicator’s decision, I am guided by the Supreme Court’s teachings in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, 441 D.L.R. (4th) 1 [Vavilov]. When the Court determines that the applicable standard is reasonableness, the Court “must consider the outcome of the administrative decision in light of its underlying rationale in order to ensure that the decision as a whole is transparent, intelligible and justified” (Vavilov at para. 15). While the majority reasons in Vavilov describe reasonableness review as “robust”, they also reiterate that it involves deference. Reasonableness review “finds its starting point in the principle of judicial restraint and demonstrates a respect for the distinct role of administrative decision makers” and is “meant to ensure that courts intervene in administrative matters only where it is truly necessary […] to safeguard the legality, rationality and fairness of the administrative process” (Vavilov at paras. 12-13). The reasons themselves need “not include all the arguments, statutory provisions, jurisprudence or other details the reviewing judge would have preferred” (Vavilov at para. 91, citing Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board), 2011 SCC 62, [2011] 3 S.C.R. 708 at para. 16). What distinguishes reasonableness review from correctness review is the court’s focus on the administrative decision and the justification offered for it, “not on the conclusion the court itself would have reached in the administrative decision maker’s place” (Vavilov at paras. 15, 83). It is, furthermore, only appropriate to quash a decision on the reasonableness standard where “any shortcomings or flaws relied on by the party challenging the decision are sufficiently central or significant to render the decision unreasonable” (Vavilov at para. 100).
[6] Turning to the substance of the Adjudicator’s decision before us, I am of the view that it is reasonable. Although it would have been preferable for the Adjudicator to acknowledge the definition of “allowance” in finding that service pay was an “allowance” that is excluded from the definition of “salary”, this alleged shortcoming, on its own, does not justify finding that the decision is unreasonable as a whole. Not only does the record demonstrate that the definition of “allowance” was not central to the respondent’s submissions at the administrative stage, but it is, more importantly, not determinative of the matter. Whether service pay is considered to be an “allowance” that is excluded from the definition of “salary” or not, the Adjudicator was still required to address the effect of the term “substantive” in section 7.1 of the RCMP’s Administration Manual. The Adjudicator did just that, making other findings that are independent from the notion that service pay is an “allowance” and that justify her ultimate conclusion that the respondent did not demonstrate that the payout he received was inconsistent with the relevant legislation and policies.
[7] Indeed, on the basis of the record that was before her, the Adjudicator appropriately observed that “[t]he crux of the dispute” concerned the definition of “substantive salary” in section 7.1 of Chapter 19.1 of the RCMP’s Administration Manual and signalled her focus on this chapter, which pertains to annual leave (Adjudicator’s Reasons at paras. 38, 55, 61). Instead of relying on her finding that service pay was an “allowance”, the Adjudicator went on to address the impact of the word “substantive” in section 7.1. In circumstances where “substantive salary” was not defined in the applicable policy manuals or enabling legislation at the relevant time, she reasonably concluded that the term “substantive” had a restrictive connotation and “denote[d] a basic salary void of any other form of compensation” (Adjudicator’s Reasons at paras. 62, 64-65; Appeal Book, vol. II at pp. 345, 471, 489).
[8] The Adjudicator was also responsive to the respondent’s argument that excluding service pay from “substantive salary” in section 7.1 of Chapter 19.1 of the RCMP’s Administration Manual created an inequity. She disagreed with his contention for two reasons. First, she found that retiring members could choose to receive service pay by taking their remaining leave as vacation prior to retiring, or they could choose to receive their annual leave in a lump sum payout without service pay (Adjudicator’s Reasons at paras. 66, 68-69, 73). Second, she considered how members in the officer cadre of the RCMP receive payouts of annual leave when their annual leave exceeds their carry-over entitlement, according to the RCMP’s Administration Manual. She noted that in the provisions she consulted, “substantive” denoted “that the payout must be based on the member’s base salary, void of any allowances or other forms of compensation” and suggested that excluding service pay from “substantive salary” in section 7.1 would allow for a consistent application of annual leave payout policy for serving and retiring members (Adjudicator’s Reasons at paras. 70-71, 73).
[9] Furthermore, the Adjudicator provided a coherent and intelligible explanation for why service pay is not tied to annual leave, but to a member’s bi-weekly salary instead, which a discharged member no longer receives (Adjudicator’s Reasons at paras. 67-68).
[10] None of these additional findings depend on the notion that service pay is an “allowance”. Instead, they demonstrate an appropriate analysis of section 7.1 of the RCMP’s Administration Manual in context, leading to a transparent, intelligible, and justifiable conclusion that the payout of annual leave the respondent received was appropriately calculated to exclude service pay in accordance with the relevant legislation and policies.
[11] Unlike my colleague, I also remain unconvinced that the Adjudicator was required to explicitly address, in her reasons, an amendment to the RCMP’s National Compensation Manual subsequent to the respondent’s retirement regarding service pay. This omission is relatively insignificant because the amendment does not clearly militate in favour of the respondent’s position, any assertion regarding the motivation for this amendment, on the basis of the record, is speculative, and the amendment does not detract from the soundness of the Adjudicator’s analysis of section 7.1 of the RCMP’s Administration Manual that led her to conclude that service pay was excluded from “substantive salary” at the relevant time. In my opinion, finding that the Adjudicator was required to explicitly address the amendment in her reasons runs counter to the observation of the majority in Vavilov at paragraph 128 that:
Reviewing courts cannot expect administrative decision makers to “respond to every argument or line of possible analysis” (Newfoundland Nurses, at para. 25), or to “make an explicit finding on each constituent element, however subordinate, leading to its final conclusion” (para 16). To impose such expectations would have a paralyzing effect on the proper functioning of administrative bodies and would needlessly compromise important values such as efficiency and access to justice. […]
[12] In addition, I find that the record does not support the contention that the respondent noted the difference in wording between section 7.1 of Chapter 19.1 of the RCMP’s Administration Manual and sections 6.1.1 and 6.2.2, which address payout of annual leave to RCMP members in the officer cadre, at the administrative stage of this matter. While the respondent raised arguments about the difference in wording between these provisions before this Court, there was no reference to sections 6.1.1 and 6.2.2 in the respondent’s submissions at the administrative stage. By raising this argument before this Court, the respondent is in fact attempting to reargue his case.
[13] Finally, the Adjudicator’s finding that the respondent bore the burden of establishing his claim was reasonable. It accords with past practice of RCMP adjudicators and the record does not suggest that the appellant failed to provide information to which only it had access (See e.g. Marsh v. Zaccardelli, 2006 FC 1466, 305 F.T.R. 303 at para. 59).
[14] Applying the teachings of Vavilov to the present case, the Adjudicator’s decision is reasonable and her reasons demonstrate as much. More specifically, her reasons explain that the term “substantive salary” in section 7.1 of Chapter 19.1 of the RCMP’s Administration Manual, undefined in the relevant RCMP policies, does not include service pay because: the word “substantive” denotes the “essential part of the salary”, not a salary that includes allowances or other forms of compensation; service pay is tied to the receipt of a member’s salary, not to annual leave; retiring members can choose the option upon retiring that allows them to receive service pay if they want it; and compensation in addition to base salary, such as service pay, is not paid out to active members when they receive a lump sum payout of annual leave that exceeds their carry-over entitlement (Adjudicator’s Reasons at paras. 63-64, 67-68, 71).
[15] For its part, the Federal Court correctly identified the applicable standard of review as reasonableness (Federal Court’s Reasons at para. 13). However, it conducted its own analysis of how the relevant provisions of the RCMP’s Administration Manual and National Compensation Manual should be interpreted (Federal Court’s Reasons at paras. 27-37, 39, 45-50). Consequently, it was insufficiently deferential and clearly engaged in a disguised correctness review, erroneously focused on its own interpretation of the RCMP’s policy manuals, and compared that interpretation to that of the Adjudicator, using its own interpretation as a “yardstick to measure what the [Adjudicator] did” (Delios v. Canada (Attorney General), 2015 FCA 117, 472 N.R. 171 at para. 28; See also Canada (Attorney General) v. Heffel Gallery Limited, 2019 FCA 82, [2019] 3 F.C.R. 81at para. 49).
[16] For the foregoing reasons, I would allow the appeal in full, set aside the judgment of the Federal Court dated November 8, 2018 in file T-1635-17 (2018 FC 1122), dismiss the respondent’s application for judicial review, and restore the decision of the Adjudicator dated June 8, 2017. I would grant costs to the appellant in the agreed-upon amount of $5,300.00, and I would also amend the style of cause in the manner the appellant has requested. The style of cause on this document and on the judgment of this Court in file A-406-18 reflect this proposed amendment.
“Richard Boivin”
J.A.
“I agree.
Marianne Rivoalen J.A.”
GLEASON J.A. (Dissenting)
[17] The appellant appeals from the judgment of the Federal Court in Zalys v. The Royal Canadian Mounted Police et al., 2018 FC 1122, in which the Federal Court (per Annis, J.) granted an application for judicial review of the June 8, 2017 decision of a Level II Adjudicator appointed under the Royal Canadian Mounted Police Act, R.S.C. 1985, c. R-10 (as it read prior to November 28, 2014) (the RCMP Act). In that decision, the Adjudicator denied the respondent’s grievance seeking service pay on the accrued annual leave that the Royal Canadian Mounted Police (RCMP) paid out to him as a lump sum when he retired from the Force. The appellant also requests that the style of cause in this appeal be amended to name as the appellant the Attorney General of Canada, as opposed to the RCMP, P. Lebrun and Supt. Jennie Latham.
[18] For the reasons that follow, I would amend the style of cause in the way the appellant requests and would allow the appeal, but only to the extent of varying a portion of the order made by the Federal Court. As I would accordingly conclude that the respondent has been substantially successful in this appeal, I would grant him costs, fixed in the all-inclusive agreed-upon amount of $4,700.00.
I. The Proper Appellant
[19] Turning first to the request to amend the style of cause, in an application for judicial review seeking to set aside a decision of an adjudicator under the RCMP Act, the proper respondent is the Attorney General of Canada. Thus, the Attorney General of Canada should be substituted as the appellant in this appeal.
[20] Rules 303(1) and (2) of the Federal Courts Rules, SOR/98-106, provide as follows regarding respondents to judicial review applications:
303 (1) Subject to subsection (2), an applicant shall name as a respondent every person
303 (1) Sous réserve du paragraphe (2), le demandeur désigne à titre de défendeur :
(a) directly affected by the order sought in the application, other than a tribunal in respect of which the application is brought; or
a) toute personne directement touchée par l’ordonnance recherchée, autre que l’office fédéral visé par la demande;
(b) required to be named as a party under an Act of Parliament pursuant to which the application is brought.
b) toute autre personne qui doit être désignée à titre de partie aux termes de la loi fédérale ou de ses textes d’application qui prévoient ou autorisent la présentation de la demande.
(2) Where in an application for judicial review there are no persons that can be named under subsection (1), the applicant shall name the Attorney General of Canada as a respondent.
(2) Dans une demande de contrôle judiciaire, si aucun défendeur n’est désigné en application du paragraphe (1), le demandeur désigne le procureur général du Canada à ce titre.
[21] P. Lebrun was the RCMP’s National Compensation Services representative, who made submissions to the Adjudicator, and Supt. Jennie Latham was the Adjudicator, who rendered the decision under review, acting as the delegate of the Commissioner of the RCMP pursuant to subsections 5(2) and 32(1) of the RCMP Act. Neither are proper respondents to an application for judicial review.
[22] Rule 303(1)(a) prohibits naming the decision-maker whose decision is being reviewed as a respondent to a judicial review application, and an individual who made representations before the Adjudicator or who acted on behalf of an employer in the grievance process is not directly affected by an order sought in a judicial review application and thus should not be named as a respondent under Rule 303(1)(a). Thus, neither P. Lebrun nor Supt. Jennie Latham should have been named as respondents and should therefore be removed as appellants.
[23] The propriety of naming the RCMP as a respondent is perhaps less clear-cut. There are many cases where the RCMP has been named as a respondent in judicial review applications seeking to challenge a decision made by an adjudicator under the RCMP Act (see, for example, Marsh v. Zaccardelli, 2006 FC 1466, 305 F.T.R. 303 (naming RCMP Commissioner Zaccardelli, the RCMP, and the Attorney General of Canada as respondents); Smiley v. Royal Canadian Mounted Police, 2007 FC 29, 155 A.C.W.S. (3d) 202 (naming the RCMP as respondent); Lee v. Canada (Royal Canadian Mounted Police) (2000), 184 F.T.R. 74, [2000] F.C.J. No. 887 (QL) (F.C.T.D.) (naming Her Majesty the Queen (Royal Canadian Mounted Police) and RCMP Commissioner Murray as respondents)). However, the issue of how the respondent should be named appears not to have been raised in these cases and, accordingly, the style of cause was set by the parties in their pleadings and not questioned before the Court.
[24] While the RCMP is undoubtedly affected by the order sought in this application, subsection 23(1) of the Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, Part II prohibits naming the RCMP as the respondent. That subsection provides:
Proceedings against the Crown may be taken in the name of the Attorney General of Canada or, in the case of an agency of the Crown against which proceedings are by an Act of Parliament authorized to be taken in the name of the agency, in the name of that agency.
Les poursuites visant l’État peuvent être exercées contre le procureur général du Canada ou, lorsqu’elles visent un organisme mandataire de l’État, contre cet organisme si la législation fédérale le permet.
[25] There is nothing in the RCMP Act or other legislation that authorizes the taking of proceedings like the present against the RCMP in its name. As this Court noted at paragraph 38 in Gingras v. Canada (1994), 113 D.L.R. (4th) 295, 165 N.R. 101 (Fed. C.A.), the RCMP is a division of the federal public administration and is a “department” within the meaning of section 2 and Schedule I.1 of the Financial Administration Act, R.S.C. 1985, c. F-11. This Court has held that government departments do not have legal personalities separate from the Crown (Canada (Office of the Information Commissioner) v. Calian Ltd., 2017 FCA 135, 414 D.L.R. (4th) 165, at para. 63). It follows that as departments are not separate legal entities, they are not appropriately named as respondents in a judicial review application, unless legislation directs otherwise (see for example, Enniss v. Canada (Human Rights Commission), [1995] F.C.J. No. 1593 (QL), 104 F.T.R. 145 (F.C.T.D.) at paras. 7-9; and Gravel v. Canada (Attorney General), 2011 FC 832, 393 F.T.R. 219 at para. 6). Similar reasoning applies to the RCMP.
[26] Because the RCMP ought not have been named as a respondent, Rule 303(2) of the Federal Courts Rules provides that the Attorney General of Canada should have been named as the respondent in the Federal Court. The style of cause should therefore be amended to substitute the Attorney General of Canada as the appellant before this Court.
II. Background
[27] Turning to the merits of this appeal, it is useful to next briefly review the relevant background to the respondent’s grievance. The respondent was a regular member of the RCMP. At the time of his retirement, he had 37 years of service with the Force and held the rank of staff sergeant, a non-commissioned officer rank within the RCMP.
[28] When employed, the respondent was entitled to paid annual leave and to service pay. The latter is an amount paid to entitled RCMP members on each bi-weekly pay cheque and is based on their length of service. At the time of his retirement, the respondent was receiving service pay at the maximum rate of 10.5% of his staff sergeant’s salary.
[29] When the respondent decided to retire in 2012, he had accumulated 1,398 hours of annual leave that he had not been able to use during his career. The RCMP offered the respondent the option of either taking the leave and postponing his retirement date until after his leave credits were exhausted or retiring and electing to be paid out the unused annual leave in a lump sum. The respondent elected the latter option. Had the respondent instead chosen to remain on the payroll, the RCMP would have paid him service pay for each hour of annual leave he took.
[30] Following the respondent’s retirement and discharge from the Force, the RCMP paid him the value of his accumulated annual leave credits, but did not add an amount for service pay on the annual leave. Had it done so, the gross amount of the lump sum payment would have been increased by $7,257.01.
[31] The RCMP’s Administration and National Compensation Manuals set out the terms and conditions of service for RCMP members. The key provision in this appeal is section 7.1 in chapter 19.1 of the Administration Manual, which provided as follows at the relevant time:
7. Payout of Annual Leave on Discharge/Death
7.1 When a member is discharged from the RCMP or dies, the member or his/her estate will be paid an amount equal to the number of days of earned but unused annual leave to the member’s credit, calculated at his/her substantive salary on the date of discharge or death.
[emphasis added]
[32] The terms “substantive salary” and “substantive” are not defined in either Manual. However, as the respondent notes, the term “substantive” is a term of art used in the Federal Public Service to denote the permanent position to which the employee has been appointed, as opposed to an acting assignment, as was noted by this Court in Sinclair v. Canada (Treasury Board) (1991), 137 N.R. 345, 92 C.L.L.C. 14,008 (Fed. C.A.) [Sinclair] and Attorney General of Canada v. Dupuis (1991), 137 N.R. 349, 30 A.C.W.S. (3d) 1009 (Fed. C.A.) [Dupuis].
[33] The RCMP’s National Compensation Manual, at the relevant time, provided in the “Definitions” section that the term “salary” means “an annual rate of pay; not an allowance or any other compensation […]” [emphasis added].
[34] In addition, the National Compensation Manual, at the time of the respondent’s retirement, contained the following definitions within the “Definitions” section which are of relevance to this appeal:
Allowance – the remuneration payable in respect of a position, by reason of duties of a special nature, or for duties that the employee is required to perform in addition to his/her regular duties.
[emphasis added]
Compensation – the pay and non-pay remuneration provided to an employee for services rendered, and includes, but is not limited to: salary and other compensation, e.g. performance awards; pension and insurance benefits; paid time off; various allowances, e.g. senior constable provisional allowance, service pay, bilingual bonus; and, compensation for the costs of serving in difficult environments […]
[emphasis added]
Daily rate of pay – a salary divided by 260.88, which is the average number of working days in a year […]
Premium pay – a non-pensionable sum of money paid in addition to salary.
Remuneration – pay and/or allowances.
[35] The RCMP’s Administration Manual at the relevant time also contained provisions governing the payout of annual leave to commissioned officers prior to retirement. The relevant portions of these provisions in chapter 19.1 stated:
6.1 On Mar. 31, a member in the officer cadre whose annual leave bank exceeds his/her yearly annual leave entitlement will be automatically paid the excess leave credits to a maximum of one year’s entitlement.
6.1.1 The payout [of annual leave credits] is calculated using the member’s base substantive salary in effect on Mar. 31 of the current leave year. This does not include performance awards or allowances.
6.2 With the approval of his/her supervisor, a member in the officer cadre can cash out his/her earned but unused annual leave credits at any time during the leave year.
[…]
6.2.2 The voluntary payout [of annual leave credits] is calculated using the member’s base substantive salary in effect on Mar. 31 of the previous leave year. This does not include performance awards or allowances.
[emphasis added]
[36] Finally, section 7.2 of chapter 19.1 of the RCMP’s Administration Manual provided at the relevant time:
7.2 If the termination of employment is for reasons other than a medical discharge or death, when unearned annual leave credits have already been used by the member, the employer will recover an amount equivalent to the unearned annual leave credits from any monies owed to the member, calculated at the member’s substantive salary on the date of discharge.
[37] The respondent filed a grievance in which he sought, among other things, payment of the disputed service pay. At the time, the RCMP Act and the Commissioner’s Standing Orders (Grievances), SOR/2003-181 (CSO (Grievances)) provided for a two-level grievance process, where second level hearings were conducted on a de novo basis, pursuant to subsections 31(1) and 32(1) of the RCMP Act and sections 13 and 17 of the CSO (Grievances). As is more fully discussed below, the respondent advanced before the grievance adjudicators some – but not all – of the arguments he made before this Court regarding the import of the foregoing provisions in the two RCMP Manuals.
III. The Decision of the Level II Adjudicator
[38] As the Level II Adjudicator proceeded on a de novo basis, albeit based on the written submissions made at both levels of the grievance procedure, it is only necessary to review the Level II Adjudicator’s decision. Before her, the respondent pursued only the request for service pay on the payout of his annual leave credits. (His original grievance had sought additional relief.) The Adjudicator denied the grievance, finding that the RCMP’s decision to exclude service pay on the lump sum payout was not inconsistent with legislation or applicable RCMP and Treasury Board policies.
[39] The Adjudicator commenced her analysis at paragraph 54 by noting that, pursuant to Part III of the RCMP Act, a grievor “is required to present evidence capable of supporting the facts alleged in order to satisfy the Adjudicator, on a balance of probabilities, of the merit of the grievance”.
[40] She continued by stating that the crux of the dispute related to the definition of “substantive salary” as used in section 7.1 of the RCMP’s Administration Manual and centred on whether that term includes allowances. The Adjudicator noted that the definitions of “salary” and “compensation”, contained in the RCMP’s National Compensation Manual, were helpful. She stated that the definition of “salary” excludes allowances and that the “compensation” definition makes it clear that service pay is a form of allowance. From this, she reasoned that service pay was not salary.
[41] She then queried whether this conclusion was impacted by the use of the word “substantive” in section 7.1 of the Administration Manual. In answering this query, the Adjudicator turned to the Oxford Dictionary definition of “substantive” and relied on the meaning of “having separate and independent existence”. She reasoned that, when so used as an adjective, the term “substantive” suggests a restrictive connotation, rather than a broadening of the noun it describes. She went on to give the example of the term’s being used to describe a rank or position, where it relates to a permanent as opposed to a temporary position, akin to an acting role. She continued by stating at paragraph 64 that the term relates to one’s basic right and, if “assigned the same relationship to salary, substantive can only denote the essential part of the salary or the base salary, rather than one that is dependent on the amount of allowances attributed to each individual employee”.
[42] The Adjudicator went on to dismiss the respondent’s argument that this interpretation resulted in inequitable treatment as compared to the treatment offered to those who elect to take their accrued leave as vacation, stating at paragraph 73 that, “[t]he choices provided are not offered as equitable options, but rather as options for individual consideration”.
[43] The Adjudicator finally noted that her interpretation was consistent with the treatment afforded to members in the officer cadre under articles 6.1.1 and 6.2.2 of chapter 19.1 of the Administration Manual, which expressly provide that payouts of accrued annual leave are based on the individual’s base salary and therefore exclude service pay.
[44] As a consequence, the Adjudicator denied the respondent’s grievance.
IV. The Federal Court’s Decision
[45] The Federal Court intervened, finding the Adjudicator’s decision unreasonable, and remitted the grievance for redetermination in accordance with prescriptive directions regarding the meaning to be attributed to the relevant provisions in the RCMP’s Manuals. The Federal Court found that the Adjudicator’s decision was unreasonable for several reasons.
[46] First, the Federal Court held that the Adjudicator unreasonably placed the onus on the respondent to demonstrate that the impugned payment violated the applicable legislation or policies. The Federal Court found that it was rather the RCMP that bore the burden of clearly explaining to members how the relevant policies operated.
[47] Second, the Federal Court held that the Adjudicator’s contextual interpretation of “substantive salary” in section 7.1 of chapter 19.1 of the Administration Manual was unreasonable as the Adjudicator failed to consider and reconcile articles 6.1.1 and 6.2.2 of that same chapter, which used the term “base substantive salary”. The absence of the word “base” in section 7.1 was a matter that, according to the Federal Court, the Adjudicator was required to address as the provisions, when read together, more reasonably support a conclusion opposite to the one reached by the Adjudicator.
[48] Third, the Federal Court held that the Adjudicator unreasonably relied on a dictionary definition of the term “substantive” and failed to consider what that term means in the context of the public service and statutes governing the RCMP, where the term “substantive” denotes a member’s permanent, as opposed to a temporary, position.
[49] Fourth, the Federal Court found the Adjudicator’s interpretation unreasonable as it results in an unfair disparity of treatment, that was especially troubling for members who died and who could not elect to use their accrued annual leave and were thus were denied the opportunity of electing to be paid service pay on the annual leave.
[50] Finally, the Federal Court held that the RCMP had failed in its duty to inform members that they would not be paid service pay if they elected the lump sum payout option and this failure meant that the grievance had to be allowed.
[51] The Federal Court accordingly set aside the Adjudicator’s decision and remitted the respondent’s grievance to the Level II Adjudicator, with a direction at paragraph 70 that the Adjudicator was:
[…] to declare that the term ‘substantive salary’ in section 7.1 of Chapter 19.1 of the [National Compensation Manual] or [Administration Manual] includes the accumulated service pay allowance, based on the permanent position rather than any temporary position of the member payable on the date of member’s death or discharge.
V. Issues
[52] With this background in mind, I turn now to the various arguments made by the parties.
[53] Both agree that the applicable standard of review is reasonableness. They also concur that the approach to be taken by this Court on appeal of a judicial review decision of the Federal Court is as set out in Agraira v. Canada (Minister of Public Safety and Emergency Preparedness), 2013 SCC 36, [2013] 2 S.C.R. 559 (Agraira). They more specifically agree that Agraira remains undisturbed by the recent decision of the Supreme Court of Canada in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, 441 D.L.R. (4th) 1 (Vavilov), where that Court set out a somewhat revamped paradigm for review of administrative decisions.
[54] In accordance with Agraira, an appellate court in an application for judicial review is required to step into the shoes of the court below and determine whether it selected the appropriate standard of review and whether it applied that standard correctly. Thus, in effect, on appeal, the appellate court is required to re-conduct the judicial review analysis.
[55] The parties part company on how the Federal Court applied the reasonableness analysis.
[56] The appellant asserts that the Federal Court was far too interventionist and, in effect, engaged in correctness as opposed to reasonableness review, which is inappropriate as the Supreme Court of Canada recently underscored in Vavilov at paragraph 83.
[57] The appellant more specifically submits that the Adjudicator’s decision is reasonable because it offers a logically coherent and reasonable interpretation of the relevant provisions in the RCMP’s Manuals. The appellant says in this regard that the Adjudicator reasonably (and indeed correctly) determined that service pay was an “allowance” due to its being listed as an example of an “allowance” in the definition of “compensation” contained in the National Compensation Manual. And, as “salary” is defined in that same Manual as including “pay”, but as excluding “allowances”, it was open to the Adjudicator to conclude that service pay does not form part of salary and therefore is not to be paid out under section 7.1 of chapter 19.1 of the Administration Manual.
[58] The appellant continues by submitting that, in the absence of a definition of “substantive” in either Manual, it was reasonable for the Adjudicator to look to dictionary definitions and that the dictionary meaning selected by the Adjudicator is reasonable and provides support for her conclusion.
[59] The appellant further contends that there is nothing unfair in the manner in which the RCMP approached these issues as those who elect to take their accrued annual leave may be called in to work and thus are entitled to service pay whereas those who elect to be paid a lump sum, or who die while in service, are not so available. Likewise, according to the appellant, there is nothing untoward in those who have borrowed leave credits and who leave the Force before earning them not being required to repay their service pay under section 7.2.2 of chapter 19.1 of the Administration Manual as such individuals were on call and thus entitled to service pay when they took time off before they earned the entitlement to vacation pay. In short, according to the appellant, service pay in all instances is tied to being in service and on call.
[60] Finally, the appellant says that the Adjudicator’s reliance on the articles 6.1.1 and 6.2.2 in chapter 19.1 of the Administration Manual was reasonable as similar treatment is afforded to commissioned officers who take payouts of their accrued leave. The appellant adds that it was not necessary for the Adjudicator to have commented on the use of the term “base substantive salary” in these paragraphs.
[61] The respondent, on the other hand, asserts that the Adjudicator’s decision was unreasonable, although for somewhat different reasons from those offered by the Federal Court.
[62] According to the respondent, the Supreme Court of Canada in Vavilov has invited a more invasive approach to reasonableness review than has previously been applied, directing that such review should be “robust” (Vavilov at paragraphs 12-13, 67, 72). The respondent further says that the Supreme Court in Vavilov outlines two ways in which a decision, for which reasons are offered by the administrative decision-maker, might be unreasonable. As the majority of the Supreme Court noted at paragraph 101 of Vavilov, on one hand, there might be “a failure of rationality internal to the reasoning process”. On the other hand, the decision might be “in some respect untenable in light of the relevant factual and legal constraints that bear on it”.
[63] The respondent says that the Adjudicator’s decision in the instant case runs afoul of the second of the two as it ignores the relevant case law and interpretive principles that the Adjudicator was bound to apply. On the latter point, the respondent asserts that principles of contractual interpretation are akin to rules of statutory interpretation and submits that, in Vavilov, at paragraph 120, the Supreme Court of Canada directs reviewing courts to determine whether the administrative decision-maker’s interpretation is “consistent with the text, context and purpose of the provision”. The respondent also points to paragraph 111 in Vavilov, where the Supreme Court stated that, “[w]here a relationship is governed by private law, it would be unreasonable for a decision maker to ignore that law in adjudicating parties’ rights within that relationship”. From the foregoing, the respondent says that this Court, in reviewing the Adjudicator’s decision post-Vavilov, must determine whether she appropriately applied the relevant rules of contractual interpretation in considering the meaning of section 7.1 of chapter 19.1 of the RCMP’s Administration Manual. This, in effect, invites us to engage in something akin to correctness review.
[64] The respondent submits that the Adjudicator did not appropriately apply the relevant rules of contractual interpretation for several reasons.
[65] First, according to the respondent, the Adjudicator failed to follow the applicable case law and ignored the relevant context in turning to dictionary definitions for the term “substantive”. The respondent submits that, under a proper interpretation, the term “substantive” means merely the salary applicable to a member’s full-time position and that the term is irrelevant to the inquiry concerning whether the term “salary” as used in section 7.1 includes service pay.
[66] Second, according to the respondent, the Adjudicator failed to apply the rule against redundancy. The respondent says that such rule required the Adjudicator to look to the difference in wording between articles 6.1.1 and 6.2.2 versus section 7.1 of chapter 19.1 of the Administration Manual. The respondent further submits that the absence of the word “base” in section 7.1 meant that “substantive salary” for payout purposes is something other than a former member’s base substantive salary, i.e., it must include his or her base salary plus service pay.
[67] Third, the respondent says that the Adjudicator failed to apply the rule of contractual interpretation that mandates that a