Judgments

[1996] 2 F.C. 798

A-543-94 (T-2120-93)

Attorney General of Canada (Appellant) (Respondent)

v.

Lily Kampman (Respondent) (Applicant)

Indexed as: Kampman v. Canada (Treasury Board) (C.A.)

Court of Appeal, Marceau, Linden and Robertson JJ.A.—Ottawa, January 30 and April 1, 1996.

Public service — Termination of employment — Appeal from F.C.T.D. decision dismissing application for judicial review of P.S.C.A.B. decision — Respondent’s position as registered nurse at penitentiary requiring enhanced reliability status — Status revoked for failure to report relationship with parolee — Release from Public Service recommended by deputy head under PSEA, s. 31 — Appeal Board upholding recommendation — Revocation of status prerogative of deputy head, not true administrative decision — Right to procedural fairness protected by s. 31 through internal grievance.

Penitentiaries — Respondent registered nurse at maximum security penitentiary — Position requiring enhanced reliability status — Deputy head revoking status for failure to disclose relationship with parolee — Recommending release from Public Service under PSEA, s. 31 — Revocation of status preliminary decision with no permanent consequence — S. 31 providing adequate system of control over deputy head’s decision — Duty of fairness met.

Administrative law — Judicial Review — Nurse at penitentiary released from Public Service after deputy head revoking —enhanced reliability status— for failure to disclose relationship with offender on parole — Nurse unsuccessful before PSEA Appeal Board — Trial Judge remitting to Board as to whether fairness accorded — Whether duty of fairness and, if so, whether any breach cured by adequate alternative remedy — Standard of review to be applied by Board in considering status revocation — Status revocation prerogative of deputy head — Status revocation distinguished from revocation of licence required to exercise activity — Status revocation not true administrative decision having permanent consequences — Rules of fairness, natural justice applicable to manner in which recommendation for release dealt with — In any event, audi alteram partem principle complied with through internal grievance procedure — Right to procedural fairness protected by PSEA, s. 31.

This was an appeal from a Trial Division decision dismissing an application for judicial review of a decision of the Public Service Commission Appeal Board except with respect to one aspect of that decision. The respondent was appointed, in December 1989, as a registered nurse in a maximum security penitentiary in British Columbia. That position required an “enhanced reliability status”. Some time after her appointment, the respondent entered into a relationship with an offender while he was on parole and failed to report this situation to her superiors contrary to section 19 of the governing Code of Discipline of the Correctional Service of Canada. Accordingly, the deputy head revoked the respondent’s enhanced reliability status and made a recommendation to the Public Service Commission that she be released from the Public Service, in accordance with section 31 of the Public Service Employment Act, as she, without the required status, was incapable of performing the duties of her position. The respondent filed a grievance against the revocation of her status and this was joined to the grievance she had previously filed against the disciplinary suspension imposed on her by Correctional Services Canada on the basis of the same facts. Both grievances were rejected by the Commissioner. The respondent appealed the deputy head’s decision to an appeal board established under the PSEA, but was unsuccessful. On judicial review, Strayer J. allowed the application but referred the matter back to the Appeal Board for a determination as to whether the respondent was accorded fairness in the process leading up to the decision to revoke her enhanced reliability status. This appeal raised the issue of whether a duty of fairness can arise in the context of a recommendation to release under section 31 of the PSEA, and if so, whether any breach of that duty was cured subsequently by the availability of an adequate alternative remedy.

Held (Robertson J.A. dissenting), the appeal should be allowed.

Per Marceau J.A.: The enhanced reliability status is an attestation that, in the subjective opinion of the deputy head of the institution, a high degree of confidence or reliance may be placed on the individual involved. The revocation of that status is a prerogative of the deputy head and merely reflects a change in that opinion, a loss of confidence in the employee’s reliability. There is a fundamental difference between the revocation of the enhanced reliability status initially attributed to an employee before he takes up a job and the revocation of a licence or permit required to exercise an activity. In the latter case, the decision has a life of its own as it effects an immediate and permanent prohibition from exercising the activity. In the former case, the revocation has no permanent consequence since the deputy head has no authority to release the employee. In one case, the decision is final; in the other, the so-called decision is merely preliminary. The decision by the deputy head to revoke the respondent’s status was not a true administrative decision standing by itself, with permanent consequences directly attached to it. Rather, it was a recommendation for release based on the fact that the deputy head has formed the opinion that the employee no longer demonstrates the degree of reliability required of the holder of the position. It is with respect to the manner in which such recommendation will be treated that the rules, not only of fairness, but of natural justice, should come into play, and that is what section 31 required. The law had established, in section 31, an adequate system of control over the decision of a deputy head, in so far as control over the valid formation of a subjective opinion is possible. The Court would not be justified in going beyond the will of Parliament by imposing on the decision to make the recommendation procedural requirements aimed at giving, in effect, redundant protection. The essential obligations attached to the audi alteram partem principle were fully satisfied through the internal grievance procedure made available to the respondent and used by her with the assistance of her representative. The Motions Judge could not fault the Appeal Board for having failed to consider the fairness of the deputy head’s decision when the right to procedural fairness was fully protected by section 31 of the Public Service Employment Act and satisfied by the inquiry and hearing held by the Public Service Commission Appeal Board.

Per Robertson J.A. (dissenting): The decision to revoke the respondent’s enhanced reliability status was integral to the recommendation to release her from the Public Service, and accordingly could be reviewed by the Appeal Board under section 31 of the PSEA. The deputy head was under a duty to act fairly in both cases for three reasons. First, this conclusion meets the tripartite test laid down by the Supreme Court of Canada that a duty of fairness exists where (i) a decision is of a final and specific nature, whether administrative, judicial or quasi-judicial, (ii) the relationship is that of employer-employee, and (iii) the decision has as significant and important an effect on the employee as a decision to terminate. Second, the need for procedural safeguards is acknowledged and addressed in the employer’s guidelines governing enhanced reliability status. Under the Government Security Policy, individuals must be given the reasons why they have been denied reliability status. If an applicant has the right to be heard before a decision to refuse to grant enhanced reliability status is made, a fortiori the duty of fairness mandates that an employee have an opportunity to be heard before such status is revoked. Third, the duty to act fairly in the context of a decision to release under section 31 of the Act has been implicitly recognized in two decisions of this Court.

As a subsidiary issue, the case at bar could not be distinguished from the Supreme Court case law on the basis that the deputy head’s decision to recommend the respondent’s release from the Public Service was not a “final” decision. A decision does not have to be final in order for a duty of fairness to attach. A duty to act fairly can arise where the power to recommend or advise holds the potential for significantly adverse consequences for the person concerned. The other subsidiary issue pertained to the scope of the duty of fairness. Generally speaking, the scope of the duty entails at a minimum providing the person affected an adequate opportunity of knowing the case that must be met, of answering it and putting forward the party’s own position. The duty of fairness must exist in the context of a recommendation to release simply because the overriding purpose of procedural safeguards is to ensure that decisions that have a profound and significant effect are made on an informed basis. In order to ensure that the revocation decision is made in an informed fashion, the minimum requirements of fairness are full disclosure and an opportunity to be heard.

There are two procedural avenues that could be found to constitute an adequate alternative remedy for a breach of procedural fairness: the appeal procedure under section 31 of the PSEA, and the grievance procedure under section 91 of the Public Service Staff Relations Act. An adequate alternative remedy exists if the decision under attack is subject to review by an independant, superior body that is not bound or restricted by a previous finding, and that body is empowered to respond effectively to the breach of fairness. The Appeal Board’s powers of review are not de novo; it can only accept or reject the recommendation before it. Having determined that the decision to revoke the respondent’s enhanced reliability status was based on the existence of an undisclosed relationship, it did not look any further into the fairness of the investigative process. Although the Appeal Board is a superior body, its powers of review and redress are so limited that recourse to it does not constitute an adequate alternative remedy. In order to be viewed as an adequate alternative remedy, it would have to be established that the grievance process under section 91 of the Public Service Staff Relations Act afforded the respondent sufficient disclosure of the case she had to meet and provided her an opportunity to respond effectively. The appellant has not established that the respondent received adequate disclosure of the basis for the deputy head’s decision during the grievance process, such as the contents of the two investigative reports. Neither the appeal procedure provided for in the PSEA nor the grievance procedure under section 91 of the PSSRA provided an adequate alternative remedy.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Canadian Security Intelligence Service Act, R.S.C., 1985, c. C-23.

Financial Administration Act, R.S.C., 1985, c. F-11.

Public Service Employment Act, R.S.C., 1985, c. P-33, s. 31.

Public Service Staff Relations Act, R.S.C. 1970, c. P-35.

Public Service Staff Relations Act, R.S.C., 1985, c. P-35, ss. 91, 92.

CASES JUDICIALLY CONSIDERED

CONSIDERED:

Kampman and Treasury Board (Solicitor General- Correctional Service Canada), [1992] C.P.S.S.R.B. No. 4 (QL); Kampman v. Canada (1993), 151 N.R. 181 (F.C.A.); Ahmad v. Public Service Commission, [1974] 2 F.C. 644 (1974), 51 D.L.R. (3d) 470; 6 N.R. 287 (C.A.); Canada Employment and Immigration Commission v. Lewis, [1986] 1 F.C. 70 (1985), 8 C.C.E.L. 53; 60 N.R. 14 (C.A.); leave to appeal to S.C.C. refused [1985] 2 S.C.R. viii; Dansereau v. Canada (Public Service Appeal Board), [1991] 1 F.C. 444 (1990), 91 CLLC 14,010; 122 N.R. 122 (C.A.); Clare v. Canada (Attorney General), [1993] 1 F.C. 641 (1993), 100 D.L.R. (4th) 400; 93 CLLC 14,025; 149 N.R. 303 (C.A.); Knight v. Indian Head School Division No. 19, [1990] 1 S.C.R. 653; (1990), 69 D.L.R. (4th) 489; [1990] 3 W.W.R. 289; 83 Sask. R. 81; 43 Admin. L.R. 157; 30 C.C.E.L. 237; 90 CLLC 14,010; 106 N.R. 17; Desjardins v. Bouchard, [1983] 2 F.C. 641 (1982), 7 D.L.R. (4th) 644; 11 C.C.C. (3d) 167; 51 N.R. 204 (C.A.); Martineau v. Matsqui Institution Disciplinary Board, [1980] 1 S.C.R. 602; (1979), 106 D.L.R. (3d) 385; 50 C.C.C. (2d) 353; 13 C.R. (3d) 1; 15 C.R. (3d) 315; 30 N.R. 119; Selvarajan v Race Relations Board, [1976] 1 All E.R. 12 (C.A.); Harelkin v. University of Regina, [1979] 2 S.C.R. 561; (1979), 96 D.L.R. (3d) 14; [1979] 3 W.W.R. 676; 26 N.R. 364.

REFERRED TO:

Dickinson v. Department of National Revenue (Taxation), [1987] ABD [8-1] 162 (P.S.C.A.B.); Munro (Re) (1993), 105 D.L.R. (4th) 342; [1993] 7 W.W.R. 484; 15 Admin. L.R. (2d) 307; 113 Sask. R. 169; 52 W.A.C. 169 (Sask. C.A.); Abel et al. and Advisory Review Board et al., (Re) (1979), 24 O.R. (2d) 279; 97 D.L.R. (3d) 304; 46 C.C.C. (2d) 342 (Div. Ct.); affd (1980), 31 O.R. (2d) 520; 119 D.L.R. (3d) 101; 56 C.C.C. (2d) 153 (C.A.); Syndicat des employés de production du Québec et de l’Acadie v. Canada (Canadian Human Rights Commission), [1989] 2 S.C.R. 879; (1989), 62 D.L.R. (4th) 385; 100 N.R. 241; Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police, [1979] 1 S.C.R. 311; (1978), 88 D.L.R. (3d) 671; 78 CLLC 14,181; 23 N.R. 410; Mooring v. Canada (National Parole Board), [1996] 1 S.C.R. 75; Singh et al. v. Minister of Employment and Immigration, [1985] 1 S.C.R. 177; (1985), 17 D.L.R. (4th) 422; 12 Admin. L.R. 137; 14 C.R.R. 13; 58 N.R. 1; Thomson v. Canada (Deputy Minister of Agriculture), [1992] 1 S.C.R. 385; (1992), 89 D.L.R. (4th) 218; 3 Admin. L.R. (2d) 242; 133 N.R. 345; Irvine v. Canada (Restrictive Trade Practices Commission), [1987] 1 S.C.R. 181; (1987), 41 D.L.R. (4th) 429; 24 Admin. L.R. 91; 74 N.R. 33; Polten and Governing Council of the University of Toronto et al., Re (1975), 8 O.R. (2d) 749; 59 D.L.R. (3d) 197 (Div. Ct.); Hitchcock v. New Brunswick (Deputy Solicitor General) (1988), 93 N.B.R. (2d) 294 (Q.B.T.D.); Callahan v. Newfoundland (Minister of Social Services) et al. (1993), 113 Nfld. & P.E.I.R. 1 (S.C.T.D.).

AUTHORS CITED

Evans, J. M., ed. de Smith’s Judicial Review of Administrative Action, 4th ed. London: Stevens & Sons, 1980.

Treasury Board Manual. Information and Administration Management Component: Security. Ottawa: Treasury Board of Canada.

Wade, H. W. R. Administrative Law, 6th ed. Oxford: Clarendon Press, 1988.

APPEAL from a Trial Division decision ([1995] 1 F.C. 306 dismissing an application for judicial review of a decision of the Public Service Commission Appeal Board made under section 31 of the Public Service Employment Act, but referring the matter back to the Board for further consideration of a particular aspect. Appeal allowed.

COUNSEL:

Mylène Bouzigon for appellant (respondent).

Sean T. McGee for respondent (applicant).

SOLICITORS:

Deputy Attorney General of Canada for appellant (respondent).

Nelligan Power, Ottawa, for respondent (applicant).

The following are the reasons for judgment rendered in English by

Marceau J.A.: This appeal is from a decision[1] of the Motions Judge in the Trial Division who, on an application for judicial review of a decision of the Public Service Commission Appeal Board (the Appeal Board) made pursuant to section 31 of the Public Service Employment Act,[2] dismissed the application except with respect to one aspect and referred the matter back to the Board for further consideration of that particular aspect. A review of the factual and procedural context in which the Board’s decision was rendered will make the nature of this particular aspect abundantly clear.

The respondent was appointed to a position in the Public Service as a registered nurse at Kent Institution, a maximum security penitentiary in British Columbia, effective December 4, 1989. It had been specified to her that the position carried the requirement of an “enhanced reliability status”. By letter dated April 18, 1991, the respondent was notified by the Deputy Commissioner (Pacific) for Correctional Services Canada that, as a result of new information, he had reviewed her enhanced reliability status and had formed the opinion that her entry into a relationship with an offender while he was on parole and, particularly, her failure to report this to the Correctional Service, had rendered her unreliable in terms of controlling sensitive Government of Canada information and assets to which she had access; he had, therefore, revoked her status and now saw no alternative but to make a recommendation to the Public Service Commission that she be released from the Public Service, in accordance with section 31 of the Public Service Employment Act, as she, without the required status, was incapable of performing the duties of her position. The letter ended by reminding the respondent that she had the right to challenge the revocation of her status through the departmental grievance procedure in accordance with sections 91 and 92 of the Public Service Staff Relations Act.[3]

The respondent without delay filed a grievance against the revocation of her status by the deputy head which was joined to the grievance she had already filed against the disciplinary suspension which had been imposed on her by Correctional Services Canada on the basis of the same facts. She made her representations, in writing and orally, as provided by the departmental grievance procedure, acting with the support of her bargaining agent, the Professional Institute of the Public Service, but both grievances were finally rejected by the Commissioner. She referred the revocation to an adjudicator pursuant to section 92 of the Public Service Staff Relations Act, but the Adjudicator decided that a revocation of enhanced reliability status was not adjudicable under that provision as it was not in the nature of a disciplinary matter but, rather, was “part and parcel with the Deputy Head’s recommendation under section 31(1) of the Public Service Employment Act” [Kampman and Treasury Board (Solicitor General-Correctional Service Canada), [1992] C.P.S.S.R.B. No. 4 (QL), at page 99]. Her application for judicial review of the Adjudicator’s decision was dismissed by this Court.

The Deputy Commissioner, now free to give effect to his decision officially, made his recommendation to the Public Service Commission that the respondent be released from the Public Service, in accordance with section 31 of the Public Service Employment Act. The respondent immediately availed herself of her right of appeal against the recommendation, a right provided by the same section. This section 31 is no longer in force, having been repealed in 1993, but it was then applicable and read as follows:

31. (1) Where an employee, in the opinion of the deputy head, is incompetent in performing the duties of the position the employee occupies or is incapable of performing those duties and should be appointed to a position at a lower maximum rate of pay, or released, the deputy head may recommend to the Commission that the employee be so appointed or released, in which case the deputy head shall give notice in writing to the employee of the recommendation.

(2) Within such period after receiving a notice under subsection (1) as the Commission prescribes, the employee may appeal against the recommendation of the deputy head to a board established by the Commission to conduct an inquiry at which the employee and the deputy head, or their representatives, shall be given an opportunity to be heard.

(3) The Commission, on being notified of the decision of the board on the inquiry into a recommendation conducted pursuant to subsection (2), shall, in accordance with the decision,

(a) notify the deputy head concerned that the recommendation will not be acted on; or

(b) appoint the employee to a position at a lower maximum rate of pay, or release the employee.

(4) If no appeal is made against a recommendation of a deputy head under subsection (1), the Commission may take such action with regard to the recommendation as the Commission sees fit.

(5) The Commission may release an employee pursuant to a recommendation under this section and the employee thereupon ceases to be an employee.[4]

The Appeal Board established by the Commission came to its decision following an inquiry held in the absence of the respondent herself, her representative’s request for an adjournment of the hearing set down for that purpose having been refused on the basis that her presence was not required. The Board’s decision was set aside by this Court for reasons that, I think, are worth reproducing in view of the analysis that I will suggest hereinafter:

In our view, the applicant was denied natural justice. The Supreme Court of Canada, in Kane v. Board of Governors of the University of British Columbia, [1980] 1 S.C.R. 1105; 31 N.R. 214, makes it clear that a high standard of justice is required in a case of this kind. Dickson J. (as he then was) put it as follows, at page 1113:

“A high standard of justice is required when the right to continue in one’s profession or employment is at stake. Abbott v. Sullivan, [1952] 1 K.B. 189, at p. 198; Russell v. Duke of Norfolk, supra, at p. 119. A disciplinary suspension can have grave and permanent consequences upon a professional career.”

The denial of natural justice in the present case emerges from the fact that the applicant was not afforded an opportunity to be present at the hearing so as to testify on her own behalf. It is not for this Court to speculate whether her testimony would have advanced her case for, as was laid down by the Supreme Court of Canada in Cardinal and Oswald v. Kent Institution, Director of, [1985] 2 S.C.R. 643; 63 N.R. 353, the denial of a right of a fair hearing itself renders a decision invalid. This principle is found in the following words of LeDain, J., at page 661:

“… I find it necessary to affirm that the denial of a right to a fair hearing must always render a decision invalid, whether or not it may appear to a reviewing court that the hearing would likely have resulted in a different decision. The right to a fair hearing must be regarded as an independent, unqualified right which finds its essential justification in the sense of procedural justice which any person affected by an administrative decision is entitled to have. It is not for a court to deny that right and sense of justice on the basis of speculation as to what the result might have been had there been a hearing.”

For these reasons, we are of the view that the failure to accord the applicant natural justice rendered the Appeal Board’s decision unlawful.”[5]

The Appeal Board proceeded therefore to a new hearing in the presence of the respondent and her representative and handed down a second decision. The Chairman delivered careful reasons in support of that second decision. He started by stating that the question he had to answer, as he understood it, was whether the deputy head could conclude, on the basis of the information before him, that the respondent was incapable of performing her duties. Then, considering that the question so defined could not be severed from the issue of why the respondent’s enhanced reliability status was revoked, he found that the procedure followed by the deputy head in revoking the status was relevant to his inquiry to the extent that it concerned the accuracy of the information on which the recommendation was made. The Board concluded, finally, that it was open to the deputy head, on the uncontested evidence before him, to become convinced that the respondent was incapable of performing the duties of her position and, therefore, that his recommendation had to be acted upon. This is the decision that was being reviewed by the Trial Division Judge whose order is now under appeal.

The Motions Judge had no difficulty agreeing with the Chairman that “a person who is performing a job which requires enhanced reliability status and who loses that status through her own misconduct may be said to be incapable of continuing to fill her post”.[6] Thus, the case was definitely one falling under subsection 31(1) of the Public Service Employment Act. The learned Judge also had no difficulty agreeing with the Chairman that the Appeal Board “can review the decision taken by the deputy head, as part of his decision to recommend dismissal, that the employee is incapable because in his view she is no longer entitled to enhanced reliability status”.[7] The difficult issue for the Motions Judge was the standard of review that should be applied by the Appeal Board in considering the revocation of that status.

Referring to the case of Ahmad v. Public Service Commission, [1974] 2 F.C. 644(C.A.), the Motions Judge noted this Court’s observation that whether a person is incompetent (which was the basis of the recommendation in that case) is a matter of opinion which should be accepted by the Board unless: (i) some specific statutory or other legal direction has been overlooked; (ii) there is indication that the opinion was not formed honestly; or (iii) in the words of Jackett C.J. [at page 647], the Board has before it “material that satisfied it, as a matter of fact, that the deputy head was wrong in forming the opinion”, a phrase interpreted to mean evidence that the facts on which the deputy head had formed his opinion were incorrect. These were, in his view, clear grounds of review that were applicable in the case at bar, since a recommendation based on incapacity cannot be treated differently than one based on incompetence, but the Board did not err in finding that none actually applied: no legal direction had been overlooked, good faith was obvious, and the facts upon which the deputy head based his decision were uncontested. There was, however, in the learned Judge’s view, a fourth ground that the Appeal Board should have considered, a ground not mentioned in Ahmad because not yet recognized at that time in the case law. This fourth ground was whether the deputy head, in coming to the conclusion that the employee no longer deserved enhanced reliability status and was therefore incapable of performing her duties, had followed a procedure that could satisfy the requirements of fairness. The Appeal Board had not considered this fourth ground, so the matter, concluded the Motions Judge, had to be referred back to the Board to allow it “to consider properly the procedure followed by the deputy head in revoking the applicant’s enhanced reliability status”.[8]

It must be noted at the outset that this conclusion of the Motions Judge, which was simply reproduced in his formal judgment, is not, on a first reading, without some difficulty of understanding and implementation. A court cannot, on judicial review, return a matter to a tribunal without setting aside the decision under review, since the tribunal, being functus, could neither change its initial decision nor add to it a second one. This, however, was, no doubt, a mere slip, and the disposition must be understood as the setting aside of the decision being reviewed on the ground that the tribunal had failed to consider all of the proper grounds of review.

The conclusion of the Trial Division Judge being so clarified, I must, with respect, express my disagreement with it, a disagreement which essentially comes from the fact that I do not see and characterize the revocation of a so-called enhanced reliability status in the same manner as he does. I will try to explain myself as briefly as possible.

The Treasury Board Manual, which the Treasury Board, as employer and general manager for the Public Service, issued pursuant to its authority under the Financial Administration Act,[9] contains, as I understand it, directives, instructions, guidelines or procedures to be used by employees in administering or carrying out operational programs or activities of a government institution. One component of the Manual, related to Information and Administrative Management, addresses security. It contains the security policy of the Government of Canada and the operational standards for the safeguarding and protection of sensitive information and assets. The Manual sets out the measures to be applied in carrying out the policy and the deputy heads are responsible for the implementation of these measures. The information and assets to which an employee in the Public Service may have access are said to be in one of three possible categories. The information or assets may be “designated”, a designation made by the deputy head who has control over them on the basis that their unauthorized use or disclosure could reasonably be expected to cause injury to interests other than national security. The information may, for reasons of national security, be “classified” as “confidential”, “secret” or “top secret”. Finally, the information or assets may be neither “classified” nor “designated”. Three types of personnel screening assessments are established to be applied to future or existing employees according to the category of information or assets to which they may have access in the execution of their duties. While basic reliability is to be expected of any employee, enhanced reliability is required of anyone whose duties may put him or her in contact with designated information or assets, and a security clearance is the rule for anyone who may see classified information. It is before an individual is offered a position that the assessment or checks must be made to ensure that he or she satisfies the standard required, but it may happen that, in the course of employment, new information leads the deputy head to form the opinion that the conclusion of the initial screening should be revised.

On reading the Manual, one cannot but realize that there is a fundamental difference between a security assessment on the basis of which a security clearance is granted and a reliability check which leads to a so-called basic or enhanced reliability status. A security clearance concerns the individual’s loyalty to Canada; its denial or revocation, which can only be based on objective facts, must be reviewed by the Security Intelligence Review Committee, established by the Canadian Security Intelligence Service Act,[10] in consultation with the Privy Council; it can be acted upon only by the Governor General in Council who has retained the power to suspend or dismiss any person employed in the public service for security reasons. By contrast, a reliability assessment is the responsibility of the institution concerned and a so-called enhanced reliability status is essentially an attestation that, in the subjective opinion of the deputy head of the institution, a high degree of confidence or reliance may be placed on the individual involved. The revocation of that status in the case of an employee is a prerogative of the deputy head and merely reflects a change in that opinion, a loss of confidence in the employee’s reliability.

Having in mind one of the arguments raised, I will add that there is also, it seems to me, a fundamental difference between the revocation of the enhanced reliability status initially attributed to an employee before he or she takes up a job and the revocation of a licence or a permit required to exercise an activity. In the latter case, the decision has a life of its own as it effects an immediate and permanent prohibition from exercising the activity. In the former case, while it will immediately prevent the employee from having access to designated material, the revocation has no permanent consequence since the deputy head has no authority to release the employee. In one case, the decision is final; in the other, the so-called decision is merely preliminary.

In fact, the decision by the deputy head to revoke the status of an employee is essentially a decision to give effect to his or her loss of confidence by recommending release to the authority empowered to appoint to or dismiss from within the public service, the Public Service Commission. This, at the time the facts of the present case occurred, could only bring into play section 31 of the Public Service Employment Act, as it then was. It is true that one is not immediately inclined to equate a question of reliability with one of competence or capability, but I do not see any difficulty in doing so, and it hardly can be otherwise since section 31 was, at the time, the only avenue available to a deputy head, in the circumstances of the case, to give effect to his loss of confidence. This was the position taken by Adjudicator Brown in declining jurisdiction under section 92 of the Public Service Staff Relations Act, on the basis, as we have seen, that the revocation of the status and the consequences which flow therefrom were “part and parcel with the Deputy Head’s recommendation under section 31(1) of the Public Service Employment Act” and this is the position taken by the Appeal Board and accepted by the Motions Judge in the present case.

What we have, therefore, is not a true administrative decision standing by itself, with permanent consequences directly attached to it. Rather, we have a recommendation for release based on the fact that the deputy head has formed the opinion that the employee no longer demonstrates the degree of reliability required of the holder of the position the employee now occupies. It is the manner in which such recommendation will be treated that the rules, not only of fairness, but of natural justice, should come into play, which is exactly what section 31 required, as this Court so forcefully repeated in the judgment quoted above.

In my view, the law had established, in section 31, an adequate system of control over the decision of a deputy head, in so far as control over the valid formation of a subjective opinion is possible, as set out in the Ahmad decision. The Court would not be justified in going beyond the will of Parliament by imposing on the decision to make the recommendation procedural requirements aimed at giving, in effect, redundant protection.

In any event, even if I had been led to accept the view that the deputy head was legally bound to respect a duty of fairness, that is to say, a duty to give the employee an opportunity to state her case before officially withdrawing his confidence and recommending release, I would have remained in respectful disagreement with the disposition of the Motions Judge. This is so because I am of the view that the essential obligations attached to the audi alteram partem principle were fully satisfied through the internal grievance procedure made available to the respondent and used by her with the assistance of her representative. Indeed, if the matter were referred back to the deputy head for fulfilment of his duty to act fairly, what else could he do but simply go through a hearing no different from, although less independent than, those which took place at the various stages of the departmental grievance procedure. It is true that the review process triggered by this grievance procedure is an internal one only, but one should not confuse a party’s right to be heard before a final decision affecting his or her rights is made with a right to appeal this decision to an independent body or higher authority.[11]

It is my opinion, therefore, that the learned Motions Judge could not fault the Appeal Board for having failed to consider the fairness of the deputy head’s decision when the right to procedural fairness was fully protected by section 31 of the Public Service Employment Act and satisfied by the inquiry and hearing held by the Public Service Commission Appeal Board.

I would allow the appeal, set aside the decision of the Motions Judge and reinstate the decision of the Public Service Commission Appeal Board made on July 22, 1993.

This, I believe, is not a case for costs.

Linden J.A.: I agree.

* * *

The following are the reasons for judgment rendered in English by

Robertson J.A. (dissenting)

I—INTRODUCTION

The true significance of this administrative law case is partially revealed in its tortuous past. This marks the fourth occasion on which the Court has been asked to adjudicate on issues stemming from the respondent’s release from the Public Service. The respondent, a registered nurse employed at one of Canada’s penal institutions, entered into a relationship with one of the inmates which she failed to disclose to her superiors contrary to the rules of employment. In response, the Deputy Commissioner (Pacific) (the deputy head) revoked the respondent’s “enhanced reliability status”, without which the respondent could no longer retain her position as nurse. The deputy head then took the next logical step and recommended the respondent’s release from the Public Service, as provided for in section 31 of the Public Service Employment Act , R.S.C., 1985, c. P-33 (the PSEA), on the basis that she was no longer capable of performing her job. At the relevant time that section read as follows:

31. (1) Where an employee, in the opinion of the deputy head, is incompetent in performing the duties of the position the employee occupies or is incapable of performing those duties and should be appointed to a position at a lower maximum rate of pay, or released, the deputy head may recommend to the Commission that the employee be so appointed or released, in which case the deputy head shall give notice in writing to the employee of the recommendation.

(2) Within such period after receiving a notice under subsection (1) as the Commission prescribes, the employee may appeal against the recommendation of the deputy head to a board established by the Commission to conduct an inquiry at which the employee and the deputy head, or their representatives, shall be given an opportunity to be heard.

The respondent appealed the deputy head’s decision to an appeal board established under the PSEA, but was unsuccessful. On judicial review, the Trial Judge, Strayer J. (as he then was) allowed the application to the extent that the matter was remitted to the Appeal Board for a determination as to whether the respondent was accorded fairness in the process leading up to the decision to revoke the respondent’s enhanced reliability status (now reported at [1995] 1 F.C. 306(hereinafter reasons)). Of the various issues raised in this appeal, two are of fundamental significance in the area of public employment law. Does a duty of fairness arise, and if so, was any breach cured subsequently by the availability of an adequate alternative remedy?

I have had the advantage of reading in draft the reasons of my colleague Marceau J.A. He concludes that no duty of fairness arises in the circumstances of this case, and in the alternative, finds that an adequate alternative remedy exists. With great respect, I cannot agree. In my opinion such a duty does exist, and neither section 31 of the PSEA nor the grievance procedure followed under section 91 of the Public Service Staff Relations Act, R.S.C., 1985, c. P-35 can be classified as adequate remedies. I begin with the facts leading up to this appeal.

II—FACTS AND DECISIONS BELOW

The respondent, a registered nurse, obtained employment with the Kent Institution in British Columbia effective December 4, 1989. To obtain that position the respondent had to secure enhanced reliability status, which she did. Such status simply means that a person has “been reliable in previous employment and is honest and trustworthy” (Appeal Book, at page 50). In reaching this conclusion, the authorized officer charged with carrying out the check must certify “that … in his or her judgment, the risks attached to employing or contracting with the individual are acceptable” (Appeal Book, at page 53).

On December 13, 1990 an inmate named Robert Moorehead was released from the Kent Institution on parole. Sometime shortly thereafter, the respondent and Moorehead entered into a relationship of some sort. Moorehead was subsequently arrested and charged with certain sexual offences involving another woman, and was returned to the same prison. The respondent, as the only nurse on duty at the time, participated in his readmission process. At no time did she advise her superiors of her relationship with the inmate (reasons, at page 310).

The inmate, however, was quick to bring the relationship to the attention of the prison authorities. Shortly after his reincarceration, Moorehead told the authorities that he and the respondent were intimately involved (Appeal Book, at page 75) and that the respondent had been involved with other inmates as well (Appeal Book, at page 94). It seems that Moorehead wanted the respondent to testify in his up-coming trial that they had a normal sexual relationship because he was charged with a sexual assault offence (Appeal Book, at page 75). The respondent consistently denied Moorehead’s allegations while maintaining that they were merely acquaintances (Appeal Book, at page 455).

Two investigative reports were submitted to the Deputy Warden following Moorehead’s revelation. In the course of both investigations witnesses from outside the Public Service were interviewed. The first report undermines the respondent’s story without necessarily validating the self-serving story of Moorehead. The second investigation disclosed a somewhat different portrayal of the nature of the relationship (see Appeal Book, at pages 75-80 and 90-96). However, both reports contained the conclusion that a relationship of some kind existed and that it had not been disclosed.

The Warden of Kent Institution determined that the respondent’s undisclosed relationship with the inmate was a violation of section 19 of the governing Code of Discipline, Correctional Service of Canada, Commissioner’s Directive 060 of January 1, 1987 (Appeal Book, at page 111) which reads:

19. An employee has committed a major infraction, normally warranting a suspension without pay or discharge, if he/she:

…

e.   enters into a relationship not in the line of duty or not approved by one’s authorized superior with an offender, ex-offender or the offender’s friends or relatives. [Emphasis added.]

The respondent was accordingly subject to disciplinary action and suspended without pay for 30 consecutive shifts. On April 8, 1991 she filed a grievance against her suspension. On the basis of the same facts, the deputy head advised the respondent by letter dated April 18, 1991 that, effective immediately, he was removing her enhanced reliability status on the ground that by entering into an undisclosed relationship she had proved herself to be unreliable. As the respondent could not perform her duties without such status, the deputy head recommended her release from the Public Service pursuant to section 31 of the PSEA. The deputy head advised the respondent that she could grieve the revocation of her status pursuant to section 91 of the Public Service Staff Relations Act, and could appeal the recommendation for release under section 31 of the PSEA (Appeal Book, at pages 13-14). The respondent pursued each of these options concurrently. She also, on April 29, 1991, asked for a review by the Security Intelligence Review Committee of the revocation of her status. By letter dated May 8, 1991, the Committee refused on the basis that its jurisdiction is restricted to security clearance issues (Appeal Book, at page 458).

In accordance with the process established under section 91 of the Public Service Staff Relations Act, the respondent filed a grievance against the revocation of her status, which was joined to the grievance of her suspension. Because this grievance related to a reliability check, in accordance with the Government Security Policy it went automatically to the final stage of the grievance process established under the Public Service Staff Relations Act and the governing Collective Agreement (Appeal Book, at page 59). At the final stage, the grievor can make written and oral submissions to the Commissioner, Correctional Service Canada (the Commissioner). The Commissioner denied the grievance. The respondent then sought adjudication of both issues pursuant to section 92 of the Public Service Staff Relations Act. Before the Adjudicator the employer argued that the relationship between the respondent and the inmate was of a sustained and personal nature. In a decision dated January 10, 1992, the Adjudicator denied her grievance with respect to the disciplinary suspension, and found himself to be without jurisdiction regarding the decision to revoke the respondent’s reliability status (Kampman and Treasury Board (Solicitor General-Correctional Service Canada), P.S.S.R.B. File numbers 166-2-21656 and 166-2-21771, January 10, 1992 [[1992] C.P.S.S.R.B. No. 4 (QL)]). The respondent sought judicial review of the Adjudicator’s decision. The application was dismissed by this Court without reasons (see A-84-92, January 21, 1993, (F.C.A.)).

On April 26, 1991, the respondent requested an appeal to the Public Service Commission Appeal Board of the deputy head’s recommendation for her release from the Public Service, pursuant to section 31 of the PSEA. Before the first Appeal Board, the employer characterized the relationship as “dating” (Appeal Book, at page 278). The respondent was unable to be present at the first Appeal Board hearing due to illness. The Appeal Board denied her request for an adjournment on the basis that, as she was represented by counsel, her presence was not required. By order dated November 1, 1991 the Appeal Board denied the respondent’s appeal. The respondent sought judicial review of this decision as well. This application was allowed by this Court on the basis that to proceed with the hearing in the respondent’s absence was a breach of natural justice. The Appeal Board’s decision was set aside, and the matter was referred back to the Appeal Board for a resumption of the hearing in the presence of the respondent (see (1993), 151 N.R. 181 (F.C.A.)).

The Appeal Board convened a second hearing at which the respondent was present. Before this second Appeal Board, the employer did not characterize the nature of the relationship at all. The Appeal Board outlined the issue as being whether “the conclusion arrived at by the deputy head that the [employee] is incapable of performing her duties as a nurse in an institution was one that was open to [the deputy head] to make on the basis of the information before him” (Appeal Book, at page 643). The Appeal Board then determined that this issue could not be severed from the issue of why the employee’s enhanced reliability status was revoked. However, it found that the scope of its jurisdiction was restricted to a review of whether the procedure followed by the deputy head in reaching the revocation decision brought the accuracy or reliability of the information on which the decision was based into question. The Appeal Board found that the decision was based on two conclusions: a relationship existed, and the employee did not disclose it to her supervisor. Accordingly the Appeal Board found that the information on which the deputy head based his decision was reliable, notwithstanding the fact that the respondent was not given an opportunity to be heard prior to the decision to revoke the reliability status being made by the deputy head (Appeal Book, at pages 643-644). The Appeal Board went on to conclude that the loss of the enhanced reliability status rendered the employee incapable of performing her duties within the meaning of section 31 of the PSEA, as that status was a requirement of her position (Appeal Book, at page 646).

The respondent applied for judicial review of the above decision. The Trial Judge addressed four issues: (1) whether incapacity within the meaning of subsection 31(1) of the PSEA can arise from the loss of enhanced reliability status when that status is a condition of employment; (2) If yes, can an appeal board hearing an appeal under that provision review the decision to revoke status as part of the review of the recommendation to release from the Public Service? (3) If yes, what is the applicable standard of review of the revocation decision? and (4) Does the employee have a right to be warned and given an opportunity to correct her conduct before the status is revoked?

On the first issue the Trial Judge found that the enhanced reliability status is a “qualification like any other”, the loss of which can render an employee incapable within the meaning of section 31 (reasons, at page 316). Given this conclusion, the Trial Judge addressed the second issue as to whether the Appeal Board has jurisdiction to review the revocation decision as part of its review of the decision to recommend dismissal. He determined that the Appeal Board possesses the requisite jurisdiction. The Trial Judge held that the Appeal Board must review the decision that the employee is no longer qualified to hold enhanced reliability status because that is the basis for the allegation that she is incapable (reasons, at page 317). On the third issue, the Trial Judge found that in light of recent Supreme Court jurisprudence, the scope of the Appeal Board’s powers of review must be adapted by adding an additional criterion to those established in Ahmad v. Public Service Commission , [1974] 2 F.C. 644(C.A.).

I pause here to note that Ahmad is the leading case on the review jurisdiction of an appeal board established under section 31 of the PSEA. In that case, this Court determined that such jurisdiction was restricted to determining whether (i) the decision-maker failed to apply properly a statutory or other legal direction; (ii) there is proof that the decision-maker acted in bad faith; or (iii) the Appeal Board was satisfied, on the basis of the material before it, that as a matter of fact the decision-maker was wrong in making the impugned decision (at page 647). In the absence of one of the above findings, an appeal board cannot interfere with the decision before it.

In light of more recent Supreme Court jurisprudence, the Trial Judge found that the Appeal Board must also examine whether the duty of fairness was met in the deputy head’s decision-making process. The learned Trial Judge concluded that the Appeal Board erred in law by not addressing whether the deputy head breached the duty of fairness, and determined that the matter must be referred back to the Appeal Board for reconsideration on that aspect (reasons, at page 321). Although he explicitly refused to decide whether the duty was breached in this case (at page 321), the Trial Judge did conclude that the deputy head’s decision to revoke the respondent’s enhanced reliability status was made “without any notice to her that this was in contemplation and without her having any opportunity to make submissions with respect to his decision” (at page 312).

With respect to the fourth and final issue before him, the Trial Judge determined that there was no duty to warn on the facts of this case as the deputy head’s opinion was based on one serious instance of poor judgment, as opposed to a pattern of poor judgment. Also, unlike the facts in Dansereau v. Canada (Public Service Appeal Board), [1991] 1 F.C. 444(C.A.) and Clare v. Canada (Attorney General), [1993] 1 F.C. 641(C.A.), which established a duty to warn and to refer respectively in the case of long-term employees, the respondent had been employed for a relatively short time.

By order dated September 15, 1994, the Trial Judge dismissed the application for judicial review and referred the matter back to the Appeal Board for reconsideration of whether the duty of fairness had been met.

III—ISSUES

The appellant employer raises two issues in this appeal. The first is whether the decision to revoke an employee’s enhanced reliability status is immune from review by the Appeal Board under section 31 of the PSEA. The appellant submits that a revocation decision is distinct from a recommendation to release, and that only the latter is subject to review by an appeal board. The former can only be attacked by way of judicial review before the Trial Division. The second issue relates to whether the respondent’s recourse to the internal grievance procedures prescribed by section 91 of the Public Service Staff Relations Act served to rectify or cure any breach. This issue assumes of course that a duty exists at law and that it was breached.

In my opinion, the manner in which the parties have pursued the issues in this appeal is problematic. Their assessment of the relevant issues is too restrictive. To begin with, if we reject the appellant’s first argument, as does Marceau J.A., and as did the Trial Judge, then we must address the fundamental question of whether a duty of fairness can arise in the context of a recommendation to release under section 31 of the PSEA. The parties have assumed that it can, and that it does arise in this case. On the other hand, my colleague Marceau J.A. says no such duty is owed. With respect, it is my position that, on the facts of this case, the deputy head was under a duty to act fairly in reaching his decision to revoke the respondent’s enhanced reliability status, and therefore, in arriving at his recommendation to release her from the Public Service.

There is a second issue which the parties have failed to acknowledge. Arguably, a breach of the duty of fairness can be cured by the availability of an alternative remedy deemed adequate in law. The parties have focused their arguments regarding alternative remedies on the grievance procedure followed. However, it is also necessary to determine whether an appeal to the Appeal Board appointed under section 31 of the PSEA provides such a remedy. The parties seem to have assumed that it does not, probably because an appeal board does not have de novo jurisdiction to review the decision of the deputy head. As discussed below, my colleague, Marceau J.A., is of the view that “the right to procedural fairness was fully protected by section 31 of the Public Service Employment Act and satisfied by the inquiry and hearing held by the Public Service Commission Appeal Board” (at pages 16-17 of his reasons).

Against this backdrop, there are three issues that require consideration: (i) Is the revocation decision immune from review by the Appeal Board under section 31 of the PSEA? (ii) If not, does the employer owe a duty of fairness to the respondent? (iii) Assuming that such a duty arises and that it has been breached, does an adequate alternative remedy exist either under section 31 of the PSEA or under section 91 of the Public Service Staff Relations Act? I shall deal with each of these questions as required.

IV—REVIEWABILITY OF THE REVOCATION

The appellant employer maintains that the deputy head arrived at two decisions: the decision to revoke the respondent’s enhanced reliability status, and the decision to recommend her release from the Public Service. The former relates solely to the maintenance and protection of designated and classified information and assets (e.g. drugs) within the institution. The latter is driven by the fact that an employee no longer possesses the qualifications necessary to perform his or her duties. Accordingly, the appellant submits that only the latter decision is reviewable by the Appeal Board under section 31 of the PSEA. The respondent submits that there is, in essence, only one decision, namely that the deputy head has changed his opinion of the degree of confidence that he has in the reliability of the employee. Accordingly, both components of the decision must be found to be reviewable by the Appeal Board.

Marceau J.A. agrees with the respondent’s characterization of the revocation decision, as did Strayer J. and the Appeal Board. With respect to this issue I am in complete agreement with Marceau J.A. for the reasons which he offers. In short, the decision to revoke the respondent’s enhanced reliability status is integral to the recommendation to release her from the Public Service, and accordingly can be reviewed by the Appeal Board under section 31 of the PSEA. It remains to be decided whether a duty of fairness arises.

V—A DUTY TO ACT FAIRLY

It is axiomatic that a duty to act fairly does not arise in the making of all decisions rendered in the public law context. Its existence is dependant on the specific context of the case, as is the ambit or scope of that duty. In my opinion, such a duty arises in this case. That conclusion is supported on three bases: (i) it meets the tripartite test laid down by the Supreme Court of Canada; (ii) it is consistent with the employer’s guidelines governing enhanced reliability status; and (iii) it is consistent with two decisions of this Court where a duty of fairness in the context of section 31 of the PSEA has been recognized, Dansereau, supra and Clare, supra.

1)         Supreme Court Jurisprudence

I turn first to the Supreme Court jurisprudence on the existence of a duty to act fairly. The criteria for determining whether a duty of fairness exists in the context of a termination of employment are set out in Knight v. Indian Head School Division No. 19, [1990] 1 S.C.R. 653. The respondent, Knight, was employed as director of education by the appellant Board. The terms of his contract allowed for either party to terminate the employment relationship upon three months’ notice, provided the employee was given a fair hearing and investigation. During negotiations for the renewal of the respondent’s employment the parties were unable to reach an agreement. The Board wanted to extend the contract for one year only, whereas the respondent sought a three-year term. The Board therefore passed a resolution to terminate the respondent’s employment and to give him three months’ notice. The respondent brought an action based in part on his entitlement to procedural fairness. The majority of the Supreme Court found that he was entitled to such fairness, but that the duty had been met. The respondent was aware of the Board’s reasons for giving notice, and he had been given an opportunity to be heard before the Board reached its decision.

The majority reasons in Knight make clear that a duty of fairness does not always arise. At page 669, L’Heureux-Dubé J. enunciates a tripartite test for determining whether such a duty exists in a given case:

The existence of a general duty to act fairly will depend on the consideration of three factors: (i) the nature of the decision to be made by the administrative body; (ii) the relationship existing between that body and the individual; and (iii) the effect of that decision on the individual’s rights. This Court has stated in Cardinal v. Director of Kent Institution, supra, that whenever those three elements are to be found, there is a general duty to act fairly on a public decision-making body….

The policy behind this conclusion is that where statutorily conferred powers, whether discretionary or not, are used, the public has an interest in ensuring that they are used properly and legitimately (at page 675).

L’Heureux-Dubé J. concludes that where a decision is (i) of a final and specific nature, whether administrative, judicial or quasi-judicial, and (ii) the relationship is employer/employee (even if the office is held at pleasure), and (iii) the decision in question has as significant and important an effect on the employee as a decision to terminate, a duty of fairness exists (at pages 669-677). Applying this analytical framework, she finds that fairness was owed on the facts of the case before her.

In my view, there is nothing in the facts of the case at bar that distinguish it from the analysis in Knight. The deputy head’s decision to revoke the respondent’s enhanced reliability status and to recommend her release for incapacity on that basis is a specific decision directed at the termination of her employment. The relationship is clearly one of employer and employee, and the impact of the decision on the respondent is profound. The deputy head’s assessment of the employee’s reliability was a matter of personal opinion based on the results of the investigation into the employee’s conduct. The decision was not the result of personal knowledge on the part of the deputy head, nor was it the result of information gathered exclusively within the work sphere. The investigators had to talk to persons who were not within the Public Service, and they had to make what are essentially findings of credibility, as opposed to merely a finding of incapacity or incompetence.

2)         Employer’s Guidelines—Government Security Policy

The need for procedural safeguards is also clearly acknowledged and addressed in the employer’s guidelines governing enhanced reliability status. The Government Security Policy [Treasury Board Manual. Information and Administrative Management Component: Security] states that prior to the grant or denial of enhanced reliability status, “all persons subject to personnel screening are [to be] treated in a fair and unbiased manner” (Appeal Book, at page 28). It also mandates that [Chapter 2-4, at page 13]:

2.7 …

In arriving at a reliability screening decision, officials are expected to provide a fair and objective assessment which represents the rights of the individual. Individuals must be given an opportunity to explain adverse information before a decision is reached. Unless the information is exemptible under the Privacy Act, individuals must be given the reasons why they have been denied reliability status. [Emphasis in original.]

If an applicant has the right to be heard before a decision to refuse to grant enhanced reliability status is made, then a fortiorari, it follows that the duty of fairness mandates that an employee have an opportunity to be heard, be it through written or oral submissions, before such status is revoked. This conclusion is consistent with the decision of this Court in Desjardins v. Bouchard, [1983] 2 F.C. 641(C.A.), where Pratte J.A. addresses the duty of fairness in the context of a decision to revoke a pardon (at page 651):

… the revocation of a pardon seems to me more fraught with consequences for the person concerned than a mere refusal to grant an application for a pardon. In the first case, the person will be deprived of rights, while in the second, he will be denied a privilege. Secondly, while the power to grant a pardon is purely discretionary, this is not true of the power of revocation, which can only be exercised in the circumstances set forth in section 7. It would seem fair that a pardon should not be revoked without first giving the person concerned an opportunity to refute the existence of the facts on which the authority in question will rely on exercising the power of revocation. [Emphasis added.]

In my view, the above rationale is equally applicable to the revocation of enhanced reliability status. If one is entitled to be heard before being denied such status, then one must be entitled to be heard, and to know the case that must be met, before being stripped of such status.

3)         Federal Court Jurisprudence

Finally, the duty to act fairly in the context of a decision to release under section 31 of the PSEA has been implicitly recognized in two decisions of this Court, Dansereau, supra and Clare, supra. In Dansereau, the employee had, for several years, been a firefighter and captain at Dorval Airport. In the space of one month he was given three poor performance ratings, purporting to cover a three-year period. The employee had been given no prior warning that his performance was inadequate. On the basis of these appraisals, the department recommended the employee’s dismissal. The recommendation to dismiss was eventually accepted by an appeal board. The majority of this Court found that, barring unusual or urgent circumstances, a long-term employee is entitled to a warning before being dismissed for incompetence. Although this case was argued principally on the basis of bad faith, as opposed to fairness, Décary J.A., writing for the majority adopted in general the analysis in Dickinson v. Department of National Revenue (Taxation), [1987] ABD [8-1] 162 (P.S.C.A.B.) that “the concept of warning an employee of the consequences of continued unacceptable performance is more than a formality or a courtesy to be extended only to employees who are well-liked; it is elementary fairness.” (Dansereau, at page 457, emphasis added.)

A second decision in which this Court acknowledged the existence of a duty of fairness in this context is Clare, supra. The employee’s job performance was unsatisfactory due to family problems and work-related stress. He had asked his employer repeatedly to refer him for assistance under the Employee Assistance Program, but, in spite of the fact that the employer’s own Manual imposed a duty to refer employees suffering from health or behavioral problems to counselling, the employer did not do so. Writing for a unanimous Court, I determined that there was, on the facts of this case, a duty to refer the employee to the available counselling services upon his request. I explicitly related this duty to the dictates of fairness (at page 661).

As phrased by Dickson J. (as he then was) in Martineau v. Matsqui Institution Disciplinary Board, [1980] 1 S.C.R. 602, at page 631: “In the final analysis, the simple question to be answered is this: Did the tribunal on the facts of the particular case act fairly toward the person claiming to be aggrieved? It seems to me that this is the underlying question which the courts have sought to answer in all the cases dealing with natural justice and with fairness.”

4)         Subsidiary Issues

Before turning to the issue of adequate alternative remedies, there are two subsidiary issues to be addressed. The first is whether the case at bar can be distinguished from Knight on the basis that the deputy head’s decision to recommend the respondent’s release from the Public Service was not a “final” decision. In my view it cannot. There is much jurisprudence to the effect that a decision does not have to be final in order for a duty of fairness to attach. As expressed by H. W. R. Wade in Administrative Law, 6th ed. (Oxford: Clarendon Press, 1988) at pages 570-571, the power to recommend can also import the duty to be fair:

Natural justice is concerned with the exercise of power, that is to say, with acts or orders which produce legal results and in some way alter someone’s legal position to his disadvantage. But preliminary steps, which in themselves may not involve immediate legal consequences, may lead to acts or orders which do so. In this case the protection of fair procedure may be needed throughout, and the successive steps must be considered not only separately but also as a whole. The question must always be whether, looking at the statutory procedure as a whole, each separate step is fair to persons affected.

…

In general, however, the courts are favourable to the observance of natural justice in the making of preliminary investigations and reports which may lead to serious legal consequences to some person. [Emphasis added; footnotes omitted.]

In short, where the power to recommend or advise holds the potential for significantly adverse consequences for the person concerned, as herein, it is clear that a duty to act fairly can arise: see Munro (Re) (1993), 105 D.L.R. (4th) 342 (Sask. C.A.); Abel et al. and Advisory Review Board et al., (Re) (1979), 24 O.R. (2d) 279 (Div. Ct.), affd (1980), 31 O.R. (2d) 520 (C.A.); and J. M. Evans, ed., de Smith’s Judicial Review of Administrative Action, 4th ed. (London: Stevens and Sons, 1980) at pages 233-237.

The other subsidiary issue that must be addressed pertains not to the existence of the duty, but to its scope. In my view, a distinction must be drawn between the question of whether a duty exists and the question of what an existing duty entails. A determination of the scope of the duty owed is important for two reasons: (i) it is the basis on which one evaluates whether an adequate alternative remedy for a breach of the duty exists, and (ii) it cannot be presumed that the duty of fairness can only be satisfied by way of an oral hearing. A hearing is by far the safest procedure, and the one least likely to be challenged successfully, but the opportunity to be heard may, in some circumstances, be satisfied, for example, by the submission of written representations. In other cases, such as Dansereau and Clare, one is not even dealing with the question of a hearing. There is a continuum of requirements of the duty of fairness depending on the context and circumstances of any one case: see Syndicat des employés de production du Québec et de l’Acadie v. Canada (Canadian Human Rights Commission), [1989] 2 S.C.R. 879, at pages 895-896; Knight, supra, at page 682; Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police, [1979] 1 S.C.R. 311, at pages 326-327; Mooring v. Canada (National Parole Board), [1996] 1 S.C.R. 75; Singh et al. v. Minister of Employment and Immigration, [1985] 1 S.C.R. 177, at page 196; and Thomson v. Canada (Deputy Minister of Agriculture), [1992] 1 S.C.R. 385, at page 402.

Generally speaking, the scope of the duty entails at a minimum providing the person affected “an adequate opportunity of knowing the case that must be met, of answering it and putting forward the party’s own position” (Thomson , supra, at page 402, per Cory J. for the majority). As discussed above, this minimum standard is reflected in the Government Security Policy which requires that before enhanced reliability status is denied, an applicant must be told why, and be given an opportunity to respond to the facts on which the decision is pre-mised.

The Trial Judge’s findings, as discussed above, reflect this approach to the scope of the duty owed. Although he explicitly refrains from making a finding as to whether or not the duty of fairness has been breached in this case (reasons, at page 321), his findings implicitly lead to that conclusion: the respondent had no notice that the revocation of her enhanced reliability status was possible, nor that she could be released from the Public Service. She was not given an opportunity to make submissions, nor was she interviewed or consulted before the deputy head reached his decision to revoke (at pages 312 and 321).

At this point, I would like to acknowledge that the duty of fairness in the context of section 31 the PSEA does not automatically require the deputy head to grant an employee an oral hearing before forming a recommendation to release. In a typical section 31 case, the duty of fairness is inherently met by the employer following the prescribed review and performance evaluation procedures. However, in a non-typical case, such as one involving a recommendation to revoke enhanced reliability status, which is based on an investigative process, the scope of the duty owed may require additional procedural safeguards not part of the standard process. Each case, or each type of case, must, in accordance with the jurisprudence of the Supreme Court, be assessed on the basis of its own particular circumstances.

The reason the duty of fairness must exist in the context of a recommendation to release is simple: the overriding purpose of procedural safeguards is to ensure that decisions that have a profound and significant effect are made on an informed basis. In my opinion, the procedures necessary to achieve these goals in the context of a recommendation based on an investigation are clearly different than those necessary to achieve these goals in the context of a recommendation based on a series of unsatisfactory job performance evaluations (incompetence) or a self-evident inability to perform the requisite job tasks (incapacity).

In a typical recommendation to release for incompetence the duty of fairness is inherently met and the recommendation is inherently informed. The recommendation is based on a history of documented evaluation reports which serve as a warning to the employee that improvement in his or her job performance is necessary. The employee receives the performance evaluations over time, has the opportunity to respond to them, and has the opportunity to improve his or her performance as required. As a result, there can be little question that the deputy head’s recommendation is informed, or that the employee has been treated fairly. Procedural safeguards and fairness are inherent in a typical incapacity case as well. The illness or disability causing the incapacity is self-evident. Either the employee can or cannot perform his or her employment duties. It is not, therefore, that no duty of fairness exists in the typical case under section 31 of the PSEA, but that the duty is inherently met by the existing safeguards.

However, the circumstances of the case at bar are not typical. The deputy head’s recommendation to release was based on the results of an investigative process, and not on an evaluation of essentially indisputable evidence. The existence of a relationship of some sort is not at issue in this case, but the conflict as to the true nature and depth of the relationship was never resolved as a matter of fact. The inmate alleged that the relationship was a sexual one, and the investigative reports suggest that possibility as well. This information was the only evidence before the deputy head when he made his decision to revoke the respondent’s enhanced reliability status, and therefore formed the foundation for that decision. As a result, his failure to provide the respondent with disclosure of the case against her and to afford her an opportunity to refute the allegations of a sexual relationship takes on a critical import. Certainly the respondent’s reliability would be less questionable in the deputy head’s eyes were the relationship in issue classified as a benign acquaintanceship, as opposed to one of sustained intimacy. It would also help explain why the relationship was not reported.

Lord Denning addressed the existence and scope of a duty of fairness in such a context in a statement endorsed by our own Supreme Court in the minority reasons of Dickson J. (as he then was) in Martineau, supra, at page 624, and in the reasons of Estey J. for the Court in Irvine v. Canada (Restrictive Trade Practices Commission), [1987] 1 S.C.R. 181, at page 217. In Selvarajan v Race Relations Board, [1976] 1 All E.R. 12 (C.A.), at page 19, Lord Denning stated:

The fundamental rule is that, if a person may be subjected to pains or penalties, or be exposed to prosecution or proceedings, or deprived of remedies or redress, or in some such way adversely affected by the investigation and report, then he should be told the case made against him and be afforded a fair opportunity of answering it. [Emphasis added.]

In sum, it is the investigative basis for the factual underpinning of the deputy head’s decision to revoke the respondent’s enhanced reliability that broadens the scope of the duty of fairness owed in the circumstances of this case. In order to ensure that the revocation decision is made in an informed fashion, the minimum requirements of fairness are full disclosure and an opportunity to be heard.

In conclusion on this point, and on the facts of this case, a duty of fairness was owed. That being said, the next issue to be addressed is whether there is an adequate alternative remedy available and whether it is capable of rectifying any breach of the fairness duty.

VI—ADEQUATE ALTERNATIVE REMEDY

There are two procedural avenues that could be found to constitute an adequate alternative remedy for a breach of procedural fairness: the appeal procedure under section 31 of the PSEA, and the grievance procedure under section 91 of the Public Service Staff Relations Act.

In order to evaluate whether these procedures do in fact remedy a potential breach we must look to the jurisprudence relating to adequate alternative remedies. The starting point of my analysis is Harelkin v. University of Regina, [1979] 2 S.C.R. 561. This case involved a student at the University of Regina who was ordered by the University authorities to discontinue his studies. The committee charged with hearing and deciding the case against the student heard only one side, the University’s, and decided adversely to the student. The student did not know the case against him, nor was he afforded an opportunity to correct or contradict any statement prejudicial to his position. The student later applied to the courts for the prerogative remedies of certiorari and mandamus. Beetz J. for the majority of the Supreme Court found at page 585 that the University committee decision was not a nullity, despite the breach of fairness, but that it was voidable at the insistence of the student and remained appealable until quashed by a superior court or set aside by the senate. He found that several factors must be considered in deciding whether the student’s right of appeal to the senate committee was an adequate alternative remedy capable of rectifying the breach: the procedure on appeal, the composition of the appellate body, its powers and the manner in which they are exercised, as well as the burden of a previous finding, expeditiousness and costs (at page 588).

At page 582 of his reasons, Beetz J. quotes Weatherston J. of the Ontario Divisional Court in Polten and Governing Council of the University of Toronto et al., Re (1975), 8 O.R. (2d) 749, at page 768 to the effect that, “if the final appeal is in effect a new trial, and not an appeal in the ordinary sense, I do not see why any want of natural justice in the intermediate appeals is not cured.”

In sum, the majority found that the right to appeal to the senate committee afforded the student with an adequate alternative remedy because it involved an appeal to a superior body with de novo jurisdiction, the student would not have the burden of mitigating the previous adverse finding against him, and the senate was “equipped with the means to remedy all injustices” (Harelkin, at page 592).

The requisite elements of an adequate alternative remedy were explored by this Court in Canada Employment and Immigration Commission v. Lewis, [1986] 1 F.C. 70(C.A.), (leave to appeal to the Supreme Court denied [1985] 2 S.C.R. viii). Mr. Lewis was an immigration officer interviewed in the course of an investigation into an incident involving an alleged assault on an immigration detainee. When interviewed, the officer had not been informed of the complaint made against him. He was under the impression that the investigation was concerned with the conduct of another officer involved in the incident. The employer argued that even if there had been a breach of the duty of fairness, the officer should not receive prerogative relief as he had not sought adjudication pursuant to the Public Service Staff Relations Act [R.S.C. 1970, c. P-35]. The employer viewed the adjudication procedure as an available adequate alternative remedy.

In Lewis, the majority determined that the adjudication stage of the grievance process was an adequate alternative remedy because: (i) the adjudication procedure requires the decision to be made by an independent third party; (ii) the parties could have witnesses summoned to testify on their behalf; and (iii) the employer is obliged to take the action required by the decision of the adjudicator (at page 98). As a result, the majority refused to grant the officer prerogative relief: see also Hitchcock v. New Brunswick (Deputy Solicitor General) (1988), 93 N.B.R. (2d) 294 (Q.B.T.D.); and Callahan v. Newfoundland (Minister of Social Services) et al. (1993), 113 Nfld.& P.E.I.R. 1 (S.C.T.D.).

In summary, if the decision under attack is subject to review by an independent, superior body that is not bound or restricted by a previous finding, and that body is empowered to respond effectively to the breach of fairness, then an adequate alternative remedy exists. In my opinion, as will be seen below, there is one exception to the requirement that the review be made by an independent superior body: a de novo review by the original decision-maker can also serve to rectify any prior breach of fairness. I turn now to whether, on the facts of this case, an adequate alternative remedy exists.

The first process to be examined is the right of appeal to the Public Service Appeal Board under section 31 of the PSEA. The parties did not advance arguments on this point, and seem to have assumed that the Appeal Board was not an adequate remedy. However, Marceau J.A. at pages 16, 17 of his reasons finds any right to procedural fairness that may exist was “fully protected by section 31 of the Public Service Employment Act and satisfied by the inquiry and hearing held by the Public Service Commission Appeal Board”. With respect, I cannot agree. Under the reasoning in Ahmad, the Appeal Board’s powers of review are not de novo. It can only accept or reject the recommendation before it, and the Appeal Board must accept it unless (i) there was a failure to apply properly a statutory or other legal direction; (ii) there is proof of bad faith; or (iii) the Appeal Board is satisfied, on the basis of the material before it, that as a matter of fact the deputy head was wrong in forming the impugned opinion (at page 647). The Appeal Board in the instant case found that its powers of review were restricted to determining whether the procedure followed by the deputy head in arriving at his decision to revoke the respondent’s enhanced reliability status raised doubts about the accuracy or reliability of the information on which the decision was based. Having determined that the decision was based on the existence of an undisclosed relationship, it did not look any further into the fairness of the investigative process. As a result, although the Appeal Board is a superior body, its powers of review and redress are so limited that, in my view, it is not an adequate alternative remedy.

The second potential alternative remedy is the grievance procedure pursued by the respondent under section 91 of the Public Service Staff Relations Act. It is trite to note that the adjudication level of the grievance procedure under section 92 of the Public Service Staff Relations Act is not, in the circumstances of this case, an adequate alternative remedy as the Adjudicator found that he did not have jurisdiction to address the decision to revoke the employee’s enhanced reliability status. However, it is the contention of the appellant, and the finding of Marceau J.A., that the internal review process of the grievance procedure suffices to cure any procedural defect in the initial decision to revoke the respondent’s enhanced reliability status. With respect, the evidence does not support such a conclusion.

In the case at bar, the record does not disclose what the grievance process entailed. The respondent’s union representative was given an opportunity to present some sort of submissions to the Commissioner, but there is no indication as to whether the respondent received sufficient disclosure of the case against her. Nor do we know what scope she was afforded in her presentations (Appeal Book, at page 100). I do not think we can simply assume that she was given all necessary information, nor that she was accorded an adequate opportunity to respond before the Commissioner arrived at his decision to deny the respondent’s grievance. Given the importance of the nature of the relationship between the respondent and the inmate in the decision-making process, in order to be viewed as an adequate alternative remedy, it must be established that the grievance process afforded the respondent sufficient disclosure of the case she had to meet and provided her with the opportunity to respond effectively. Only then can the Commissioner be considered to have arrived at an informed decision. Some evidence is required, in my view, to support a contention that a particular process meets the requirements of an adequate alternative remedy before this Court can conclude that the breach of fairness has been cured. We are not to proceed on faith in such matters. In my view, the appellant has not established that the respondent received adequate disclosure of the basis for the deputy head’s decision during the grievance process, such as the contents of the two investigative reports. Of course sufficient disclosure does not necessarily import full or complete disclosure.

Clearly, then, the appeal procedure provided for in the PSEA is not an adequate alternative remedy. Nor has it been established that the grievance procedure under section 91 of the Public Service Staff Relations Act would have rectified the breach.

VII—CONCLUSION

The appeal should be dismissed with costs.

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