In the post-Vavilov world, can an adjudicator fail to consider or address an argument made by a party and still make a reasonable decision? The Federal Court of Appeal (“FCA”) recently tackled this question in Canada (Attorney General) v Zalys (“Zalys”), and the answer is… it depends.
In Zalys, the respondent, a retired member of the Royal Canadian Mounted Police (“RCMP”), had filed a grievance seeking to have service pay included in the lump sum payout of annual leave he received on his retirement. The grievance was denied by a Level II Adjudicator appointed under the Royal Canadian Mounted Police Act. The respondent sought judicial review before the Federal Court, which found the adjudicator’s decision to be unreasonable and remitted the matter back with directions to adopt an interpretation upholding the respondent’s position. The Attorney General appealed.
The adjudicator’s decision was premised on a conclusion that service pay is an “allowance”, and that “allowances” are excluded from “salary” and “substantive salary” pursuant to the RCMP’s Administration Manual. In coming to that conclusion, the adjudicator did not reference the definition of “allowance” contained in the RCMP’s National Compensation Manual, which definition supported the respondent’s position.
The FCA held that the adjudicator’s decision was reasonable and allowed the appeal in full. In the majority’s view, the adjudicator’s reasons provided a coherent and intelligible explanation for her conclusions. Citing the guidance in Vavilov that “Reviewing courts cannot expect administrative decision makers to ‘respond to every argument or line of possible analysis’ […], or to ‘make an explicit finding on each constituent element, however subordinate, leading to its final conclusion’”, the Court stated that the definition of “allowance” was not central to the respondent’s submissions at the administrative stage and not determinative of the matter, such that the adjudicator’s omissions were not so significant that they rendered the decision unreasonable.
In dissent, Justice Gleason viewed the determination that service pay is an “allowance” as a key point in the adjudicator’s chain of reasoning. By failing to address the “allowance” definition, which favoured a conclusion opposite to that reached by the adjudicator, she left a “meaningful gap” in her reasons. The adjudicator’s failure to grapple with these arguments “call[ed] into question whether the decision maker was actually alert and sensitive to [these particular issues]”, and engaged the finding in Vavilov that “[w]here a decision maker’s rationale for an essential element of the decision is not addressed in the reasons and cannot be inferred from the record, the decision will generally fail to meet the requisite standard of justification, transparency and intelligibility.” As a result, Justice Gleason would have found the adjudicator’s decision unreasonable.
The differing views of the majority and dissent in this case highlight an area of uncertainty that arises from Vavilov. While the Court in Zalys agreed that an adjudicator’s failure to address a central or significant argument can cause the ultimate decision to be unreasonable, it diverged on whether the argument at issue was sufficiently central or significant for its absence to render the underlying decision unreasonable. This will ultimately be a matter of perspective, as is demonstrated in Zalys. Despite the Supreme Court’s comments in Vavilov that adjudicators need not address every argument presented, in the wake of Zalys, it may be prudent for adjudicators to err on the side of inclusion, lest an omitted argument be viewed as sufficiently central to make the decision unreasonable.
 2020 FCA 81.
 Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 at para 128 [citation omitted].
 Ibid at paras 98, 128.