Administrative agencies are generally entitled to develop policies.
Doing so assists agencies in discharging their statutory mandates in a coherent
and consistent manner. Those who come into contact with agencies also benefit:
it ought to be easier to predict the application of a general rule than the
exercise of discretion.
From the Court of Appeal of Saskatchewan comes a reminder that the power
to develop policies is not unlimited. In particular, policies must be
consistent with the statutory provisions they purport to implement.
The sad story in Campbell v Workers' Compensation Board involved
a young engineering student who was engaged as a sailing instructor during the
summer. A horrible accident saw him lose a hand. He sought to sue a variety of
individuals and entities. These individuals and entities responded that,
pursuant to the province’s Workers’Compensation Act, the injury was suffered as a result of a workplace
accident and the student’s only recourse was to the Workers’ Compensation
Board. The student disagreed, arguing that he was not employed under a “contract
of service” and, in the alternative, that the profession of sailing instructor
was not subject to the Act.
The alternative argument was based on regulations passed by the
Lieutenant Governor in Council in the exercise of a power to enact regulations
excluding certain professions from the scope of the Act. Pursuant to the Workers’Compensation Act Exclusion Regulations, “sports professionals, sports
instructors, players and coaches” are excluded. A simple argument was presented
by the student: I was a sports instructor, which is a profession to which the Act does not apply, and thus I can
pursue my claims against the individuals and entities I consider to be
responsible for my injury.
However, a large roadblock to this argument had been mounted
by the Workers’ Compensation Board, in the form of a policy entitled “To
establish guidelines for the coverage of Sports Professionals, Sports
Instructors, Players and Coaches”. In relevant part, the policy provided as
follows:
1. All sports players are considered exempt under the Act.2. Coaches and instructors of professional sports organizations are considered exempt under the Act.3. All other coaches or sports instructors who derive earnings from coaching or instructing are required to register subject to the requirements of the act. However, coaches or instructors are not covered for injuries sustained while participating as a player/competitor in a sporting event.
Given that the student was not working for a professional body, the Board concluded,
he was not part of an excluded profession. An application to the Board for
compensation was his only recourse.
The Court of Appeal, reversing the first instance judge,
held in favour of the student. In determining whether the policy was
permissible, the Court applied a standard of review of reasonableness. Although
there was some attraction to characterizing the issue as one of jurisdiction
(given that the Board was determining the scope of its powers under the Act), the Court was not persuaded that
it ought to apply a standard of correctness: “[to] the extent to which the
Board’s interpretation of the regulation appears to step over the line
separating legitimate interpretation and imposition of independent policy, this
would, in my view, speak to the reasonableness of the Board’s interpretation,
rather than to an error of jurisdiction” (para. 56).
Nonetheless, the Board’s interpretation, as expressed in its
policy, was unreasonable, for essentially two reasons. First, the introduction
of a categorical exclusion of instructors and coaches working for professional organizations ran counter
to the plain language of the regulation. Second, by excluding a sector from the
scope of the Act, the Board had
effectively usurped the role of the Lieutenant Governor in Council. As Smith
J.A. explained:
[65] Thus,
in my respectful view, if the Board’s policy statement was intended as an
interpretation of s. 3(y) of the Exclusion Regulations it is not an
interpretation that can be reasonably supported by the wording of the
regulation and the principles of statutory interpretation. To limit the
exclusion of “sports instructors and coaches” provided by the regulation to
those sports instructors and coaches employed by an organization established
with the intent of making a profit from the playing of a sport is a significant
departure from the plain grammatical meaning of the exclusion as enacted. In so
limiting the interpretation of the exclusion, the Board has in effect
substituted its own policy for that of the Lieutenant Governor in Council. In
fact, the Board’s confusion of its role as interpreter of the regulation with
that of policy maker is evident in its conclusions. All sports players
are deemed to be exempt from the Act, whether or not they play for a
“professional sports organization” within the limited definition of the policy.
Coaches and sports instructors not employed by such an organization are not
exempt from the Act unless they are injured while participating as a
player/competitor in a sporting event. These fine distinctions and refinements
are ultimately far removed from the relatively straight-forward meaning of the
regulation.
This conclusion recalls that of the Supreme Court of the United States in National Labor Relations Board v Kentucky River Community Care, where an individual
decision (rather than a policy) had the effect of introducing a categorical
exclusion which went beyond the scope of the empowering legislation.
One aspect of Smith J.A.’s conclusion is
troubling. In applying the standard of review of reasonableness, the Court
relied heavily on principles of statutory interpretation. This temptation ought
to be avoided. First, as a matter of doctrine, these principles aid a court in
determining the correct interpretation
of a statutory provision. They do not assist in a determination of
reasonableness. To use the principles of statutory interpretation to determine
reasonableness risks usurping deference and imposing a standard of correctness.
Second, as a matter of policy, to impose the principles of statutory
interpretation on administrative decision-makers risks judicializing the
administrative process. If administrative decision-makers are to be held to a
judicial standard, the advantages of speed and efficiency they enjoy may be
eroded. Rather than concentrating on the application of its expertise and flexible
procedures to achieve its statutory mandate, the Board and those who appear
before it may be bogged down in an expensive morass of legal argument. Ultimately,
if the legislature had intended for the courts to determine the correct meaning
of the regulations or the Act pursuant
to the principles of statutory interpretation, it could have vested the power
of decision in them, rather than the Board.
In the Court’s defence, applying a
standard of review of reasonableness to an interpretation of statutory
provisions (in legislation or a regulation) is a tricky business. A court finds
itself saying ‘So far, and no further’ is reasonable. It is inevitable that the
principles of statutory interpretation will be relevant to determining whether
statutory language has been stretched beyond breaking point. What is
impermissible is for a court to use the principles of statutory interpretation
as a starting point and then measuring the decision-maker’s conclusion against
them. To be fair to the Court of Appeal, the passage quoted above
focuses on the stretching of the language and objects of the Act, a stretching for which the Board
was apparently unable to offer a cogent rationale. If an explanation could not
be offered for a departure from the language and objects of the Act, the Court was right in holding the
policy to be unreasonable.
The Court also concluded that the student's right to procedural fairness was breached, by virtue of the Board's refusal to hold an oral hearing. There were facts in dispute between the student and the employer. Before reaching conclusions adverse to the student on the factual dispute, the Board should have heard him out. All the more so because it had earlier made a commitment to holding an oral hearing if certain issues needed to be expanded upon by the parties. Given the legitimate expectation of an oral hearing and the nature of the factual determination, an oral hearing should have been held. Failing to do so was a breach of procedural fairness.
