Date: 20010807
Docket: T-639-00
Neutral Citation: 2001 FCT 863
BETWEEN:
BANK OF MONTREAL
Applicant
- and -
EDITHA CHUANICO
Respondent
REASONS FOR ORDER AND ORDER
BLAIS J.
[1] This is an application for judicial review of the decision of Ms. Ruth Hartman, (the "Adjudicator"), dated February 29, 2000, which decision was rendered under Part III, Division XIV of the Canada Labour Code.
[2] The Adjudicator concluded that the applicant was unjustly dismissed and ordered the respondent reinstated to employment with the applicant, and in addition, ordered the payment of compensation to the respondent. The applicant has complied with the reinstatement order, but seeks judicial review with respect to the Adjudicator's order for payment of eight months' salary from January to August, 1999.
FACTS
[3] The respondent was employed by the applicant since 1988. Her job title was Personal Loans Manager and for seven months she had supervisory duties. In June, 1992, she was transferred to the First Canadian branch as a Category 28, Financial Services Manager, assisting bank employees with loans and mortgages.
[4] On April 1, 1998, she became a Category 20, Financial Services Manager with discretionary lending limits. She reported to Team Leader, Ms. Sousa up until July 3, 1998. In June 1998, the Manager of Sales, Ms. Kirkwood needed someone to fill a position vacated on another team. The respondent was persuaded by Ms. Sousa and Ms. Kirkwood on June 25, 1998 that this move, described as a lateral move would afford her new opportunities. The respondent eventually agreed.
[5] From July 21, 1998, the respondent found her work life stressful for various reasons. Some of her stress in this period was also due to a possible disruption in her home life. Due to her situation, the respondent also wanted to work closer to her home in Scarborough to be more accessible in case of emergency to her two teenage children.
[6] On August 24, 1998, the respondent answered to a job posted for a Scarborough location of the Bank. Two days later, she met with her new Team Leader for a performance review and "out of professional courtesy" told her about the job application.
[7] On August 27, 1998, the respondent received a call from the Scarborough branch expressing interest in her application. Ms. Kirkwood and her Team Leader later came to her office and told her that there was no point in her going on an interview at the new location because there was no way that Ms. Kirkwood would release her because of the time factor.
[8] On August 28, 1998, the respondent went home with a migraine, took Tylenol and slept until 3:00 p.m. She kept the Scarborough branch appointment at 4:00 p.m., explaining she was off sick with a migraine. She gave them Ms. Kirkwood's number and told them there was a question about her being released.
[9] Ms. Kirkwood told the Scarborough branch that the respondent would not be released. The meeting with Ms. Kirkwood and the Team Leader the following week resulted in an agreement to release the respondent in January 1999, based on nine months from her April 1, 1998, promotion.
[10] The respondent went in to work on Sunday, September 6, 1998 to organize boxes still unpacked and prioritize work to be done on files pending. She called in sick with a migraine on the next workday, Tuesday, September 8, 1998, and did not return to work thereafter for medical reasons.
[11] Ms. Kirkwood called the respondent on September 11, 1998 to ask for a doctor's note for absence over three days and to offer a short term income protection benefits form. Ms. Kirkwood telephoned payroll the following week and instructed them to withhold the salary due for deposit. The salary was deposited on September 18, 1998, but the hold was put through on September 23, 1998. The respondent's salary was deducted from her account and sums taken out of her savings account.
[12] After September 4, 1998, the respondent was effectively without pay while being given ultimatums about her options.
[13] The respondent hired the services of a legal counsel to handle her termination package. The respondent's legal counsel wrote a first letter to Ms. Kirkwood dated November 5, 1998. He subsequently sent two more letters dated November 27 and December 9, 1998 to Ms. Kirkwood and Ms. Scott, Human Resources consultant, respectively.
[14] Pursuant to Mr. Tom W. Case's affidavit, Ms. Scott offered the respondent verbally, through her legal counsel, re-employment with the applicant effective January 11, 1999.
[15] Pursuant to Mr. Tom W. Case's affidavit, Ms. Scott testified at the hearing before the Adjudicator that the respondent's legal counsel agreed verbally to all of the terms that were ultimately set out in the January 8, 1999 correspondence from Ms. Scott to the respondent.
[16] Pursuant to Mr. Tom W. Case's affidavit, Ms. Scott further testified that on January 7, 1999, she contacted the respondent's legal counsel to confirm that January 11, 1999 was still an acceptable date for the respondent to return to work. The respondent's legal counsel advised that he would re-confirm the date with his client. He called Ms. Scott later on January 7, 1999 to advise that he no longer represented the respondent.
[17] Pursuant to Mr. Tom W. Case's affidavit, Ms. Scott testified that she prepared the letter dated January 8, 1999 and had same couriered to the respondent to determine whether or not the respondent was returning to work on January 11, 1999. The respondent did not return to work.
ISSUES
[18] 1. Did the Adjudicator err in law in failing to find that the respondent failed to mitigate her damages by not accepting the applicant's offer of re-employment as set out in correspondence dated January 8, 1999, or in failing to render a decision either way with respect to this issue?
2. Did the Adjudicator err in law in failing to find that a settlement agreement had been reached between the applicant and legal counsel for the respondent, or in failing to render a decision either way with respect to this issue?
ANALYSIS
1. Did the Adjudicator err in law in failing to find that the respondent failed to mitigate her damages by not accepting the applicant's offer of re-employment as set out in correspondence dated January 8, 1999, or in failing to render a decision either way with respect to this issue?
Standard of Review
[19] In Gauthier v.Bank of Canada (2000), 5 C.C.E.L. (3d) 169 (F.C.T.D.), Lemieux J. held:
As we can see, Parliament has in fact, in section 243 of the Code, provided a privative clause covering the decisions of an adjudicator in the context of a complaint filed under section 240. Thus it goes without saying that this Court, in the context of judicial review of such decisions, must act with great circumspection and deference.
Furthermore, I share the opinion of Heald J.A. in Aziz v. Telesat Canada (1995), 104 F.T.R. 267 (F.C.A.), who, following an analysis of the relevant case law, correctly summarized the applicable standards of review in the case of decisions rendered by an adjudicator:
To summarize, the relevant jurisprudence clearly establishes that the standard of review relating to errors of fact and law is the high or strict test of patent unreasonableness. It also establishes that the lower standard of correctness applies where the errors relate to provisions defining the jurisdiction of an adjudicator. [Emphasis added]
[20] The applicant contends that the offer made to the respondent was reasonable and that the Adjudicator erred in failing to find that the respondent failed to mitigate her damages by not accepting the applicant's offer of re-employment or in failing to render a decision either way with respect to this issue.
[21] In Remedies in Labour, Employment and Human Rights Law, J.T. Casey, ed., (Toronto: Carswell loose leaf), it was stated on the issue of mitigation, at pages 5-20:
The basic qualifying factor regarding compensation si that the aggrieved party must act reasonably to mitigate their losses. Mitigation requires that the dismissed employee seek out alternative employment that is reasonably similar in nature, remuneration, and status.
[22] In Dimitrick v. Brink's Canada Ltd., [1999] C.L.A.D. No. 441, Adjudicator Mole stated:
In general, a dismissed employee has an obligation to lessen his damages by accepting a reasonable offer of new employment. The question is whether the offers made to Dimitrick by Brink's were reasonable, in all the circumstances.
[23] It is clear that the issue of mitigation of damages following dismissal is relevant to the evaluation of damages. On this issue, the Adjudicator in the case at bar stated at page 17:
Regarding mitigation, I am aware that after her termination, Ms Chuanico obtained the services of a lawyer and that this resulted in negotiations between the lawyer and the Bank. At some point on or after December 28, 1998, the lawyer's retainer was ended on January 8, 1999, Ms. Chuanico was contacted by Ms. Scott by letter as follows:
We understand that you are no longer represented ... As such, we would like to confirm directly with you the details discussed with [your then lawyer] with respect to the offer of continued employment with Bank of Montreal.
We are pleased to offer you the position of Loan Support Officer in the Sales and Service Support Centre at First Canadian Place (FCP). You would be placed on a grade 30, with a compa-ratio [sic] of 87%, resulting in an annual salary of $35,400. You will note that this is consistent with your grade and salary at the time of your departure from the Bank. Your RISR status would be maintained, and all previously-held lending limits would be reinstated. In this role, you would be reporting to [M.H...]
The period from October 21, 1998, to the date of your return, would be administered as an unpaid leave of absence.
In discussions with [your then lawyer], it was noted that your preference was to extend the start date of your return to work to Monday, January 11,1999. If you do not intend to report to work on this date, please advise the undersigned directly.
Instead Ms Chuanico brought this complaint on January 19, 1999. In her testimony, she stated she was not able to return to work until late December, 1998 for medical reasons and from the above, it may be assumed that January 11 was a preferred return date. Ms. Chuanico's explanation for declining the offer varied. She thought she would be able to choose the position; she was worried about the effect of the leave of absence on her seniority, and benefits; she was afraid that she would be red-circled or unable to advance. She also testified that since August, 1999, she has not looked for work.
[24] The Adjudicator then proceeded to order the respondent reinstated and eight months salary to be paid to the respondent to reflect the period she made herself available for employment, January to August, 1999.
[25] I agree with the applicant, that an offer of re-employment is relevant to the issue of mitigation of damages and that the reasonableness of such an offer should be examined by an Adjudicator.
[26] Regarding the obligation to accept an offer of employment, in Peterson v. Electro Sonic Inc., [2000] O.J. No. 1418 (O.S.C.J.), although not a decision under the Canadian Labour Code, it was explained:
It is necessary to deal with the Plaintiff's unwillingness to accept the Defendant's offer of employment. The principles relating to mitigation of damages in an employment context are set out in Waddams, Law of Damages, loose-leaf ed., Canada Law Book 1998, at page 15-10:
"In cases where the plaintiff has been wrongfully dismissed, it has frequently been held that the plaintiff need not accept what amounts to an offer of demotion from the defaulting employer. Often in such cases the plaintiff in accepting the offer would suffer the humiliation of a loss of status, or be compelled to work with fellow employees with whom there had been quarrels, or would have to abandon a legal right to complain of the employer's wrongful act."
The leading case in this jurisdiction on the issue is Misfud v. Macmillan Bathurst Inc. (1989), 28 C.C.E.L., 228 (C.A.). McKinlay J.A., speaking for the court in that case, at page 238 said:
"The fact that the transfer to a new position may constitute in law a constructive dismissal does not eliminate the obligation of the employee to look at the new position offered and evaluate it as a means of mitigating damages. In all cases, comparison should be made to the contractual entitlement of the employer to give reasonable notice and leave the employee in his current position while a search is made for alternative employment."
She went on to note:
"Where the salary offered is the same, where the working conditions are not substantially different or the work demeaning, and where the personal relationships involved are not acrimonious ..., it is reasonable to expect the employee to accept the position offered in mitigation of damages during a reasonable notice position, or until he finds acceptable employment elsewhere."
[27] Both parties agreed that there was a job offer made on or around January 7, 1999.
[28] Nevertheless, we should remember that that offer was made ten days before the respondent decided to file a complaint under the Canada Labour Code.
[29] It appears from the decision of the Adjudicator, that this offer was made in the context of settlement discussions between the parties.
[30] There is no evidence that the applicant has reiterated the job offer to the respondent after January 19, 1999.
[31] The job offer of January 8, 1999 was examined and assessed by the Adjudicator in her decision (page 31).
[32] It is also clear from the decision (page 31) that the job offer, prior to the complaint was taken into consideration by the Adjudicator as she was entitled to make a decision on that.
[33] In my view, the Adjudicator has not made a mistake in considering that the respondent had no obligation to accept the job offer that was not substantially similar to her former job.
2. Did the Adjudicator err in law in failing to find that a settlement agreement had been reached between the applicant and legal counsel for the respondent, or in failing to render a decision either way with respect to this issue?
[34] The applicant submits that the Adjudicator erred in failing to find that a settlement agreement had been reached between the Bank and legal counsel for the respondent.
[35] In National Bank of Canada v. Canada (Minister of Labour), [1997] 3 F.C. 727 (F.C.T.D.), appeal dismissed [1998] F.C.J. No. 872, Rothstein J. had to interpret subsection 168(1) of the Canada Labour Code, R.S.C. 1985, L-2 and decided whether a settlement reached between an employer and an employee upon the dismissal of the employee does not prevent the laying of a complaint for wrongful dismissal by that employee under section 240 of the Code. Rothstein J. concluded:
The Bank then argues that, because of the settlement agreement and release, the appropriate recourse for Ms. Paris is through the civil courts if she wishes to challenge the validity or enforce ability of the agreement she made with the Bank prior to the complaint and that the adjudicator does not have jurisdiction to pronounce on the validity of the agreement. The Bank relies on subsection 246(1) which preserves civil remedies for employees.
I thing the Bank is correct in asserting that an adjudicator does not have jurisdiction to pronounce on the validity of a settlement agreement between employees and employer. The adjudicator's jurisdiction is only conferred by statute and the statute in this case only empowers the adjudicator to consider whether a dismissal is unjust.
However, the question of the validity of any settlement agreement does not arise before the adjudicator and the adjudicator has no need to address that question. Under subsection 168(1), the adjudicator carries out his or her duties irrespective of whether an agreement exists between employee and employer. The adjudicator only decides whether an employee was unjustly dismissed and, if so, the appropriate remedy. If the adjudicator finds the employee was non unjustly dismissed, that is the end of the matter. If the adjudicator finds the employee was unjustly dismissed, the adjudicator may go on to require the employer to compensate the employee, reinstate the employee or provide other relief that is equitable.
In the context of remedy, it is quite within the power of the adjudicator to have regard to the existence of a settlement agreement as a factual consideration and indeed, the adjudicator must do so. It will properly have a bearing on the relief which the adjudicator may award under subsection 242(4). For example, if the adjudicator were to conclude that Ms. Paris was unjustly dismissed and was entitled to an amount in excess of that provided under the settlement agreement, the adjudicator could order the Bank to pay such excess amount. On the other hand, if the adjudicator concluded that the amount received by Ms. Paris under the settlement agreement equalled or exceeded the amount the adjudicator would have ordered under subsection 242(4), no award would be made, by reason of section 168. The amount considered appropriate under Division XIV would not be more favourable to the employee than the amount under the contract and the contract would govern, notwithstanding that Ms. Paris had made a complaint under the Code.
[36] The Adjudicator had the benefit to hear witnesses and to assess the facts and the witness' credibility.
[37] We do not have an affidavit of Ms. Scott but an affidavit of Mr. Tom W. Case who signed an affidavit mentioning that he was present during Ms. Scott's testimony and quoting elements or excerpts from Ms. Scott's testimony. In my view, this is a very curious way to bring evidence to the Court. Obviously, Mr. Case is not the best witness to testify on what Ms. Scott has said; Ms. Scott is the witness that could testify on what she said, unfortunately, we do not have the benefit to read an affidavit of Ms. Scott.
[38] Nevertheless, the affidavit of Mr. Case tries to establish that there was an agreement between the bank and the legal counsel for the respondent.
[39] I have carefully reviewed the documents in the file and it is obvious that the applicant failed to convince the Adjudicator that there was an existing agreement, it also failed to convince this Court.
[40] I consider that the fact that the respondent's lawyer was fired on January 8, 1999 and the wording of the letter of Ms. Scott dated January 8, 1999, demonstrate that even if there were negotiations, there was no agreement and I cannot conclude that the Adjudicator has made an error; she made a decision with the evidence provided by the parties.
[41] I have no hesitation to conclude that the applicant failed to convince the Court that the Adjudicator made a reviewable error that justifies this Court's intervention.
[42] Therefore, this application for judicial review is dismissed.
Pierre Blais
Judge
OTTAWA, ONTARIO
August 7, 2001
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