Canadian federal court rejects judicial review of Canadian ombudsperson

A recent Federal Court case considered whether it could review living wage recommendations made by an independent ombudsperson for a Canadian retailer sourcing from Bangladesh. The Court confirmed it could not review those recommendations. This case highlights a growing trend aimed at ensuring Canadian companies take greater responsibility for working conditions and wages in their global supply chains.

In its recent decision, United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (United Steelworkers) v. Mark’s Work Wearhouse Ltd.¹, the Federal Court of Canada rejected the United Steelworkers (USW) and the Canadian Labour Congress (CLC)’s application, which challenged the Canadian Ombudsperson for Responsible Enterprise (CORE)’s Final Report examining and offering recommendations on living wage practices by a Canadian retail company and its parent corporation, in Bangladesh (the Respondents). The reason for the Court’s decision was that the Final Report (defined below) was advisory only and did not affect legal rights, impose obligations, or cause prejudicial effects.

This decision is important because it clarifies the limits of judicial review on advisory bodies like CORE. While complainants may seek judicial review of alleged human rights abuses, unless the administrative decision has a direct legal impact, courts will generally not intervene.

Although such reports from advisory bodies may not directly alter legal rights or impose enforceable consequences, they often shape expectations among stakeholders, influence reputational risk by shaping the way organizations are viewed by the public and influencing the confidence and trust of stakeholders, and can serve as catalysts for voluntary improvements in corporate policies and practices.

At KPMG Law, we support organizations by helping them interpret international standards, develop and update their policies, prepare for regulatory changes, and offer guidance so they can respond to advisory recommendations and adopt best practices in responsible business conduct.

Established in April 2019 through Order in Council (OIC) 2019-1323, CORE is tasked with reviewing allegations of human rights abuses by Canadian companies operating abroad, specifically in the garment, mining, and oil and gas sectors. CORE’s Operating Procedures are triggered when a complaint is filed, a review is initiated, or where informal mediation is requested. The 2019 OIC prohibits CORE from creating new standards on responsible business conduct and thus its authority is limited to providing recommendations rather than imposing binding outcomes.

On November 21, 2022, the Applicants filed a complaint, alleging that the Respondents relied on suppliers in Bangladesh who fail to pay workers (mainly women) a living wage. The Applicants requested CORE to investigate this alleged failure and determine if these suppliers were engaging in human rights abuse. The Applicants requested CORE to make recommendations to the Respondents, including: that a living wage be paid to everyone within the Respondents’ supply chains, amending policies, and issuing a formal apology.

CORE deemed the complaint admissible and proceeded with an independent investigation. It issued the Final Report on October 2, 2024, which (i) detailed CORE’s fact-finding activities, (ii) addressed issues set out in CORE’s initial Assessment Report, and (iii) provided seven recommendations directed at both the Minister of International Trade and Canadian companies sourcing abroad (the Final Report). CORE did not make definitive statements on the right to a living wage, meaning it did not set any final or authoritative conclusions about the existence or scope of such a right. Particularly, CORE recognized the International Labour Organization (ILO) as the appropriate authority for setting international labour standards, and creating CORE’s own criteria or delivering definitive conclusions would duplicate the ILO's work. This would also violate CORE's mandate, which prohibits setting new standards for responsible business conduct.

The Applicants sought judicial review of the Final Report under subsection 18(1) of the Federal Courts Act.² In their submissions, the Applicants argued they had public interest standing³ and that the Final Report was subject to judicial review on the basis that it fell within the court’s authority to examine and issue a decision on it. They further argued that the public nature of the CORE’s Final Report should make it reviewable, suggesting decisions with significant public impact can warrant judicial scrutiny.⁴They contended that CORE had narrowly interpreted its mandate, relied on irrelevant information regarding the ILO’s mandate, and failed to provide adequate reasons for its findings.

The Respondents maintained that the Final Report was not a decision subject to judicial review. Alternatively, they argued that CORE’s administrative decision was reasonable and that the relief sought by the Applicants was beyond the scope of judicial review.

The central question was whether CORE’s Final Report constituted a decision subject to judicial review. The Court reiterated the principle that not all administrative actions are reviewable and that judicial review is only available for decisions that directly affect legal rights, impose legal obligations, or cause prejudicial effects. The Court stated that the key issue was not the public nature of the Final Report, but whether it had legal consequences.

Since the Applicants’ complaint was received and reviewed, and CORE’s mandate is limited to recommendations without the power to compel action or create new standards, the Final Report did not qualify for judicial review. Particularly, the Court found the Final Report did not have any legal effect or consequences as it did not affect legal rights, impose legal obligations, or cause prejudicial effects.

As such, the application for judicial review was dismissed, and costs were awarded to the Respondents.