Divisional Court Improperly Applied Reasonableness Standard by Mischaracterizing Tribunal Decision: Imperial Oil Limited v. Haseeb, 2023 ONCA 364

Facts

H was an international student studying in Canada. At the relevant time, he was neither a Canadian citizen, nor a permanent resident. Upon graduation, H was entitled to a postgraduate work permit (“PGWP”) that would enable him to legally work full-time, anywhere in Canada, for any employer, for up to three years. H applied for a job with IO to commence after his graduation. IO had a hiring policy that required permanent eligibility to work in Canada, established either by Canadian citizenship or permanent residency. H was the top candidate and IO offered him the job, conditional upon him providing proof that he satisfied the requirement of permanent eligibility to work in Canada. After H disclosed that he was not a Canadian citizen or permanent resident, IO rescinded the job offer.

H applied to the Human Rights Tribunal of Ontario, alleging discrimination on the prohibited ground of citizenship. The Tribunal ruled in H’s favour and awarded him over $120,000 in damages. It concluded that IO discriminated against H on the basis of citizenship by imposing an employment condition that excluded PGWP-holders, who were all non-citizens. IO brought an application for judicial review before the Divisional Court. A majority of the Divisional Court found that the Tribunal decision was unreasonable and that the claim of discrimination based on citizenship had not been established. The majority stated that the Tribunal conflated citizenship with permanent residency and created a new ground of discrimination based on permanent residency that was not protected by the Ontario Human Rights Code. A dissenting judge concluded that the Tribunal decision was reasonable and would have dismissed the application. H appealed the decision to the Court of Appeal.

Decision

Appeal allowed (van Rensburg, Sossin and Copeland JJA) The Tribunal was reasonable to conclude that IO’s hiring policy discriminated on the basis of citizenship. The policy denied employment only to non-citizens (PGWP-holders). The fact that one sub-group of non-citizens, permanent residents, were also able to be hired does not insulate it from being discriminatory. The exception for permanent residents only makes the policy partially discriminatory, which is still prohibited under the legislation and the relevant jurisprudence. Even though not all non-citizens were excluded, the excluded group consisted solely of non-citizens.

The majority of the Divisional Court incorrectly applied the reasonableness standard in overturning the Tribunal decision. The majority committed three principal errors in its application of reasonableness review. First, the majority did not take as a starting point respectful attention to the reasons of the Tribunal. Instead, the majority conducted the analysis of whether the policy was discriminatory from scratch. This error was evident from the majority’s large focus on hypothetical scenarios of non-citizens without the legal right to work in Canada, which did not arise from the Tribunal’s analysis or the record before it. Second, the majority mischaracterized the reasons of the Tribunal. They characterized the Tribunal as creating a new protected ground based on permanent residency, and then found that conclusion to be unreasonable. But that was not the basis on which the Tribunal decided the case. Mischaracterizing the Tribunal’s reasons is antithetical to respectful attention to the reasons. Third, the majority failed to account for well-established principles of human rights jurisprudence. This included that partial discrimination is still discrimination and potential hardship to an employer is only relevant to defences once prima facie discrimination is established. At its core, the reasons of the Divisional Court majority were driven by a floodgates concern that any non-citizen anywhere in the world could make a claim for employment discrimination. This concern was unfounded because the case only addressed a narrow group of non-citizens: those with PGWPs and therefore fully entitled to work anywhere in Canada. IO is not entitled to raise a defence under s. 16(1) of the Code because it did not raise it before the Tribunal and cannot raise it for the first time on judicial review. IO’s decision not to raise the defence was clearly tactical as it thought the defence would undermine its primary arguments. The Tribunal was not unreasonable for failing to provide detailed reasons for rejecting a defence that IO never raised before it.

Commentary

The Court of Appeal’s unanimous decision in this case is a forceful defence of focussing on the reasons of the decision-maker in reasonableness review. The Court’s criticism of the majority of the Divisional Court for undertaking a de novo assessment of the issue in the case is a perennial complaint (and ground of appeal). Courts that are supposed to be conducting reasonableness review oftenstart with their own interpretation of the statutory provisions at issue, which is improper. Post-Vavilov, there can be no legitimate dispute that such an approach is inconsistent with reasonableness review, which must begin with “respectful attention” to the reasons of the decision-maker.[1] The Court of Appeal forcefully reaffirmed this principle.

Interestingly, Copeland JA commented that, given the reasonableness standard of review, she was “cautious about elaborating on the interpretation of s. 5 of the Code beyond the reasons given by the tribunal” (para. 118). Nevertheless, she went on to analyze the statutory interpretation given that it was the first time that the Court addressed employment discrimination on the basis of citizenship. While the Court of Appeal was right to emphasize how reasonableness review is focussed on the reasons of the tribunal, these comments suggest that a court upholding a decision under reasonableness review should do little more than recite the reasons given and label them reasonable. Such an approach does not properly recognize the role of courts in ensuring that decisions of administrative bodies are justified and justifiable. This will almost invariably involve testing the reasons given by the tribunal against the constraints that operate on the decision, including the text, context, and purpose of the relevant legislative provisions. This is ultimately what the Court of Appeal did in this case, by considering the Tribunal’s reasons alongside the statute and human rights jurisprudence. Such an approach benefits the accountability of administrative bodies, even when the issue is not one of first instance for the courts (as it was in this case).

The Court of Appeal also noted that mischaracterizing a tribunal’s reasons is fundamentally incompatible with reasonableness review and the requirement of paying ‘respectful attention’ to the reasons. While this proposition is not necessarily contentious on its face, there is perhaps a fine line between mischaracterizing what a tribunal decided and appropriately recognizing the unstated implications or essential effects of a tribunal’s decision. Here, the majority of the Divisional Court overstepped that line by characterizing the Tribunal decision as recognizing a new protected category for people without Canadian permanent residency status. Going forward, courts – and litigants challenging administrative decisions – should take care in how they characterize the reasons of the decision-maker.

Finally, the Court of Appeal declined to even consider the application of a statutory defence where the party did not advance the defence before the tribunal for tactical reasons. As a result, litigants must be very careful about choosing not to advance a potentially available defence at first instance, as that will preclude them from raising it on judicial review. As part of this consideration, parties should also confirm whether the tribunal permits alternative arguments that might be inconsistent with a primary argument. 

Reprinted with permission from the Stockwoods Administrative and Regulatory Law Case Review - Newsletter Issue No. 36.

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