The Camrose Police Service dismissed Const. Jeffrey MacDonald in July 2012 after he pleaded guilty to misconduct for lying about attending a training course.
MacDonald challenged his firing and the review board overturned the dismissal, noting that he was being treated for depression when the offence occurred.
The Camrose Police Service appealed the board's decision.
The Alberta Court of Appeal has now thrown out the board's ruling that overturned MacDonald's dismissal.
The Appeal Court says the board must consider whether someone who has admitted to deceit, and who has a record of disciplinary convictions, can function effectively as a police officer.