The Federal Court ordered Guy Dufort to step aside today as the arbitrator in the Canada Post dispute and directed Labour Minister Lisa Raitt to pick someone else.

The Canadian Union of Postal Workers had applied to the court for a judicial review of Dufort's appointment, arguing there were reasonable grounds of bias. Now Judge Danièle Tremblay-Lamer has agreed and granted the review.

After he was appointed by Raitt in March, Dufort disclosed to the union that he had been a prosecutor for Canada Post during the pay equity dispute from 1998 to 2003 and that he had been involved with the Conservative Party of Canada until 2010.

Dufort was president of the Quebec wing of the Progressive Conservative Party from 1994 to 1999 and when it merged with the Conservative Party of Canada in 2003, he was involved in writing the party's new constitution, according to the court decision. He also ran as a candidate three times.

CUPW says it didn't know about Dufort's ties to Canada Post and to the Conservatives when it agreed that his name could be included on a list of possible arbitrators. When he told them about those ties, the union requested that he recuse himself. He refused, and CUPW brought the matter to court. The union requested that Dufort be removed because of his political history and prior work with Canada Post.

The decision issued Wednesday says "a reasonable and sensible person might worry that the arbitrator is biased because of these two reasons."

To help make its case that Dufort was an inappropriate choice, the union used Dufort's Facebook page, saying that Conservative party groups were listed as "activities and interests" and that Raitt and Steven Fletcher, who is minister of state for transport in 2011, were both listed as "friends." Canada Post falls under Fletcher's portfolio. Those references on Dufort's Facebook page were removed in May.

Union says process is 'flawed'

The court ordered Dufort to recuse himself, and Raitt must now find a replacement.

Raitt's office said she is currently reviewing the decision and that it wouldn't be appropriate to comment further. Raitt did say however, that the government acted in the best interest of Canadians when it introduced the bill that ordered postal workers back to work.

The union welcomed the court's decision and sees it as a victory in the battle over back-to-work legislation.

"This decision shows that we have been right to oppose this flawed process," said Denis Lemelin, CUPW's national president. "The government is not getting it right."

"Forced settlements do not work," said Lemelin. "We want to be proactive and obtain a fair deal for our members."

Canada Post wasn't happy with the latest development in the case.

"Today's decision represents another disappointing delay in achieving a new collective agreement," spokesman Jon Hamilton said. "Canada Post remains respectful of the arbitration process and is prepared to participate when it begins."

He added that with declining mail volumes and increasing labour costs, it is "imperative" that a new collective agreement be reached.

The court decision was only made available in French. The court said translation would create a delay and that would be "unacceptable in the circumstances, as well as a prejudice to the parties implicated in the file."

This is the second arbitrator rejected by the union since back-to-work legislation was passed by Parliament in June 2011. About 48,000 workers were locked out after 12 days of rotating strikes. Mail delivery ground to a halt across the country and so did work on Parliament Hill as other business was set aside so the legislation could be debated around the clock. The bill imposed a four-year contract on the workers, specified pay increases, and ordered outstanding issues to be settled by arbitration.

The first arbitrator, Justice Coulter Arthur Anthony Osborne, eventually stepped down after the union complained that he wasn't bilingual and didn't have enough experience in labour relations. It brought its complaint to court and won in January, but by that time Osborne had already quit.