Date: 20090918
Docket: T-351-08
Citation: 2009 FC 933
Ottawa, Ontario, September 18,
2009
PRESENT: The Honourable Mr. Justice O'Keefe
BETWEEN:
LI
MIN ("AMANDA") WU
Applicant
and
ROYAL
BANK OF CANADA
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
O’KEEFE J.
[1]
This is an
application in respect of the decision of an adjudicator (“the adjudicator”),
appointed by the Federal Minister of Labour, under Division XIV of Part III of
the Canada Labour Code 3, R.S. Can. 1985, c. L-2, dated February 1,
2008. The decision dismissed the applicant’s complaint against the respondent
for unjust dismissal.
[2]
The
applicant makes application for:
1. An order quashing the decision which
dismissed the complaint of the applicant against the respondent for unjust
dismissal;
2. An Order referring the applicant’s complaint
with directions, to an adjudicator under Division XIV of Part III of the Code,
for a new determination; and
3. Any other order that this honourable
Court considers appropriate; and
4. Costs of this proceeding.
Background
[3]
Ms. Li Min Wu’s (the applicant) first language is
Mandarin; she was born in China. She was immediately employed when she
came to Canada first with H&R Block and JP Morgan
Chase. The applicant had multiple accounts with the respondent and had become a
client of the respondent soon after she came to Canada.
[4]
The applicant was
hired as a customer care agent in the respondent’s Visa centre on May 9, 2005.
After one year, the applicant became a Credit Adjudication Agent. When she was
initially offered employment, she was asked by the respondent to sign a
disclosure and consent for pre-employment screening. As a term of her offer of
employment, she was to read, acknowledge and comply with the “Code of Conduct”
(Code) of the respondent. Her employment came with the benefit of staff banking
privileges including no fees on transfers between accounts.
[5]
The applicant
received six weeks of initial training including a test on the Code in which
she scored 30 points out of a possible 33. All employees of the respondent are
required to complete the Code eLearning Program every one to two years.
Sections of the Code with a double asterisk signify violations that result in
immediate dismissal. One of these violations is “misappropriation”. One form of
misappropriation can be described as “kiting”.
[6]
The applicant stated
in her testimony that she remembered the Code as part of the package on her
first day of employment but was not sure she read it or paid attention to it. She
also did not recall receiving any training regarding kiting, misappropriation
or fraud during her employment. She stated that there was little mention of the
Code during her employment, thought it was mentioned at least briefly in her
quarterly performance evaluations.
[7]
The respondent acknowledged
that the applicant was a good employee.
[8]
As part of the
applicant’s duties as a Credit Adjudication Agent, the applicant had a
familiarity with cardholder credit limits. There is a “buffer zone” or “pad” of
usually 5 to 10% but sometimes even 100% by which cardholders can exceed their
credit limits. The “buffer zone” is determined by a number of factors referred
to as TRIADS and includes, credit rating, debt to asset ratio, income, account
history, and history of dealings with the bank.
[9]
The applicant and her
husband had a number of accounts with the respondent including a Royal Credit
Line (RCL) which was secured against their home.
[10]
In 2005, the
applicant was approved for a Platinum Visa card with the respondent. The
initial credit limit was $14,500 but it was raised in 2006 to $29,500. The
applicant states that she saw the July 2003 cardholder agreement when she
received the card, instead of the November 2005 cardholder agreement. This was noted
because the credit limit under the November 2005 cardholder agreement is “the
maximum amount which we will allow you to charge to your Visa account to cover
purchases, cash advances, interest and fees”. The agreement also provided that
the respondent may allow the amount you owe to exceed your credit limit by
authorizing transactions in excess of your credit limit. The agreement also
stated that the respondent may refuse to authorize transactions that exceed a
client’s credit limit, require payment, and charge an over limit fee. The
agreement permits the respondent to take money out of client’s other accounts
to pay the amounts owed on the card and the agreement also proscribed making
payments “in excess of your credit limit unless the amount you owe at the time
of payment is more than your specified limit”. The 2003 cardholder agreement
does not have this limitation.
[11]
On June 22, 2006 the respondent’s
Enterprise Anti-Money Laundering and Terrorism Unit (“EAMLAT”) advised the
respondent’s Corporate Investigations Services (CIS) that the applicant had
been advancing large amounts from her 1.9% Visa account to her RCL which
carried a variable interest rate. EAMLAT stated that funds “go in circles
through her accounts to save interest”.
[12]
CIS assigned an
investigator to conduct an investigation. The investigator assigned a CIS
analyst to review the accounts since January 2006. The investigator prepared a
spreadsheet which showed the movement of funds between the applicant’s staff
account, Visa account and RCL.
[13]
The investigation
revealed the following pattern of transactions. On May 29, June 1, June 8, June
12, June 15, June 22, June 27 of 2006, the applicant did similar actions: the
applicant would deposit three handwritten Visa cheques in amounts that were
anywhere from $25,000 to $39,500 into her staff account totaling anywhere from
$84,500 to $110,500 (the cheques were deposited through an automated banking
machine (ATM) sequentially and were substantially in excess of the credit limit
on the Visa account; the cheques would then clear the Visa account anywhere
from three to seven days later; in the mean time the applicant would transfer
the cheque amounts from her staff account into her RCL account reducing the
outstanding balance and as such, interest paid to the respondent; finally the
applicant would transfer large funds into her Visa account.
[14]
The respondent contends
that the transactions constituted kiting, contrary to the respondent’s Code.
[15]
The investigator
noted that the applicant was depositing handwritten Visa cheques into her staff
account drawn on her Visa. Handwritten cheques, as opposed to pre-printed
account numbers, delay clearance by several days because they go through a key
punching process in Toronto. The transfers, on the other hand, were
conducted quickly, generally by way of electronic transfer.
[16]
The use of the Visa
cheques are governed by the cardholder agreement. The cheques also have a
disclosure statement attached to the cheques which stated that Visa cheques may
not be used to pay any RBC Visa accounts and if a Visa cheque exceeds Visa
accounts’ available credit, it will be declined.
[17]
On June 28, 2006, the
respondent restrained the applicant’s accounts. When the cheques settled, the
applicant had a credit balance of $55,272.49 on her Visa card and a debit
balance in the staff account of $74,664.40. The respondent used the credit
balance to offset the negative balance in the staff account, leaving a debit in
the staff account of $19,391.91 which was paid off by the applicant on July 19,
2006.
[18]
On July 10, 2006 the
investigator arranged a meeting with the applicant and the applicant’s
superior, Mr. Calabrese at the Visa centre where the applicant worked. The
applicant was very upset during this interview and particularly that the
investigator had come to her place of work. The applicant signed a form
acknowledging that she had been explained certain rights during the meeting and
that she was free to leave at any time.
[19]
The applicant was
told she was being investigated for misappropriation and kiting. She said that
she had never heard of those terms but readily acknowledged that she had been
transferring funds between accounts to save interest. The applicant stated that
she was taking money from her Visa account but was always paying it back, that
this had nothing to do with her work, and that the respondent allowed her to do
it by making the funds available. She stated that if she should not be transferring
funds then she would stop doing it.
[20]
After the interview,
the applicant was suspended. On July 12, 2006 the respondent’s Advisory
Services Group (ASG) recommended termination of the applicant’s employment
because: the transfers were methodical and calculated, the transfers were in
excess of the authorized credit limit, the applicant utilized cheques and ATMs
to take advantage of the time delay in clearing cheques, that as an employee,
the applicant had knowledge of the banking system, that the applicant gained a
financial benefit of approximately $14 a day, and the transactions placed the
bank in a position of risk. The respondent terminated the applicant that day
stating that it had lost confidence in her “honesty and integrity” and that she
had failed to provide a satisfactory explanation for her transactions.
[21]
On March 19, 2007 an
adjudicator, Ib S. Petersen, was appointed by the Federal Minister of Labour to
hear a complaint by the applicant that she was unjustly dismissed by the
respondent on July 12, 2006.
[22]
The issue in the
hearing was whether the respondent had just cause for the termination of the
applicant for kiting or misappropriation of funds and if not, what remedies the
applicant was entitled to for wrongful dismissal.
Adjudicator’s Decision
[23]
The adjudicator found
that there were serious credibility issues throughout the applicant’s
testimony. The applicant’s claim to have limited awareness of the Code, kiting
and misappropriation was seen as implausible given that there were many
instances where she would have come across these concepts and guidelines in the
course of her employment. The lack of awareness was also problematic as the
applicant had passed a test on the Code scoring 30 out of 33 marks and one of
the questions answered correctly asked what constituted kiting. He also found
it difficult to accept the applicant’s testimony that she read the portions of
the Code involving stock trading and conflict of interest but did not read
about misappropriation and kiting because “it did not relate to her”. Finally,
the adjudicator noted that the applicant is bright and ambitious, transitioning
from China as an immigrant to immediate employment
and when she worked for the respondent she scored highly on her exams. Her
answers were contradictory to these observations.
[24]
In regards to the
merits of the complaint, the adjudicator found that the applicant’s work for
the respondent cannot be so easily separated from her relationship as a client.
The adjudicator looked to DS v. ReMax United Ltd., [1992] NJ No. 157 for
the premise that an employer’s ability to discipline depends on whether conduct
is work related, whether it detrimentally affects the employer’s business, or
renders the employee unable to properly discharge employment obligations. The
adjudicator then identified the question as whether the applicant’s conduct, in
the circumstances, is cause for discipline. He noted that the applicant’s job
offer, disclosure and consent form make reference to compliance with the Code
which was signed by her as well as quarterly job evaluations which were also
signed by the applicant. The adjudicator rejected the argument that the
applicant can rely on her ignorance of the Code as a consequence. Even if the
applicant was not aware of the contents of the Code, it was her duty to read
and comply with it.
[25]
The adjudicator then
turned to the issue of just cause and used the test adopted in Kelowna
Flightcraft Air Charter Ltd. v. Kmet, [1998] F.C.J. No. 740 (F.C.T.D.) in
the non-union context:
First,
has the employee given just and reasonable cause for some form of discipline by
the employer? If so, was the employer’s decision to dismiss the employee an
excessive response in all of the circumstances of the case? Finally, if the
arbitrator does consider discharge excessive, what alternative measure should
be substituted as just and equitable?
[26]
The adjudicator found
that the applicant was not kiting as defined in the Code or the RBC’s intranet
as those definitions included transferring funds between financial institutions.
However, in the adjudicator’s view, the conduct nevertheless constituted kiting
insofar as she misappropriated bank funds to her own benefit which reduced the
amount owed to the bank. To do this, the applicant manipulated the “bank float”
and falsely inflated the balances of her Visa and staff accounts.
[27]
The transactions were
conduct warranting discipline. The cheques the applicant wrote were far in
excess of the buffer zone normally allowed cardholders over their approved
credit limit. As a Visa employee and customer care agent, the applicant would
have been aware of credit limits. Further, the transactions constituted
misappropriation.
[28]
The applicant’s
argument that her conduct was unintentional was also rejected. While the
adjudicator found that she may not have had the intent to commit a “criminal
wrong”, her conduct was “planned, deliberate, repetitive, and calculated” and
“aimed at manipulating accounts to save interest”. The adjudicator went further
as to suggest that there may have been a fraudulent intention when the
applicant deposited three envelopes with three cheques in the same ATM on the
same occasion.
[29]
The adjudicator then
turned to the question of whether termination was excessive. The adjudicator
noted that the respondent’s Code states that misappropriation or kiting “would
most likely result in immediate dismissal” but stated that he is not bound by
the respondent’s view in this regard.
[30]
McKinley v. BC Tel, [2001] 2 S.C.R. 161, guided the
adjudicator on whether dismissal was excessive. The adjudicator also noted that
the circumstances of the dismissal must be considered including:
1. the seriousness of the
offence;
2. the
premeditated and repetitive nature of the offence;
3. the
employee’s length of service and discipline record;
4. failure
of earlier discipline to correct the problem;
5. consistency
of the employer’s discharge policy.
[31]
The adjudicator
concluded that termination was not excessive in all the circumstances. In the
adjudicator’s view the applicant’s misconduct was serious. He also found that
it was “premeditated, repetitive, deliberate, calculated and occurred over a
long period of time…”. He also found that she obtained a benefit from the
transactions. He considered that she was a “…good and dedicated employee with a
discipline free record…”, but noted that dismissal for her actions was
consistent with the respondent’s policies, and that she had not been singled
out. Finally, he found troubling the applicant’s “continued failure to
appreciate the nature of her conduct and to take any responsibility for it.
[The applicant] continued to deny that she had engaged in any wrongdoing and,
instead, blamed the bank for ‘allowing’ her to do what she did”.
Issues
[32]
The
applicant submitted the following issues for consideration:
1. Did the adjudicator act without
jurisdiction by upholding the termination of the applicant:
(a) for non-work related
conduct;
(b) contrary to the
respondent’s policies, practices, and guidelines for discipline.
2. Did the adjudicator fail to observe
the principles of natural justice or procedural fairness by:
(a) upholding the dismissal
of the applicant, who is a person of Asian descent, whose
place of origin was China, and whose first language was not English, by
treating the applicant’s dismissal differentially based on those
grounds, in contrast to comparable discipline in
similar circumstances give to employees who
are persons of Asian descent, whose place of origin was China, and whose
first language was not English;
(b) failing to provide an
interpreter;
(c) failing to allow the
applicant, while under cross-examination to consult with her
counsel before the document entered into evidence as Exhibit 7 which counsel
had not seen before, and about whether the applicant’s statements that
she did not want to work for the respondent constituted a withdrawal of reinstatement
as a remedy sought; and
(d) failing to allow the
applicant time to compose herself and to seek counsel about
whether the applicant’s statements that she did not want to work for the
respondent constituted a withdrawal of reinstatement as a remedy sought.
3. The adjudicator erred in law in
making the decision or order, whether or not the error appeared on
the face of the record, contrary to paragraph 18.1(4)(c) of the Federal Courts
Act, R.S. Can. 1985, c. F-7 (the Act) including by upholding the dismissal
of the applicant:
(a) despite the applicant
having a clean disciplinary record, with no previous warnings
or discipline regarding the applicant’s conduct;
(b) for conduct implicitly or
expressly approved by the respondent or its representatives,
by which approval and actions the respondent is estopped from
disciplining or dismissing the applicant;
(c) when the applicant was
induced into the alleged misconduct by actions or representations
of the respondent or its representatives;
(d) when the respondent did
not suffer damages due to the applicant’s actions; and
(e) based on errors of law on
the meaning of kiting and misappropriation.
4. Based on its decision or order on an
erroneous finding of fact that it made in a perverse or capricious manner
without regard to the material before it, contrary to s. 18.1(4)(d) of the
Act, including by upholding the dismissal of the applicant:
(a) despite the applicant
having a clean disciplinary record, with no previous warnings
or discipline regarding the applicant’s conduct;
(b) for conduct implicitly or
expressly approved by the respondent or its representatives,
by which approval and actions the respondent is estopped from
disciplining or dismissing the applicant;
(c) when the applicant was
induced into the alleged misconduct by actions or representations
of the respondent or its representatives;
(d) when the respondent did
not suffer damages due to the applicant’s actions;
(e) based on mixed errors of
law and fact on the meaning of kiting and misappropriation;
and
(f) based on erroneous
findings of fact including on the applicant’s reasons for the
transactions, the cost to the respondent of the applicant’s transactions, the respondent’s
Code of Conduct and its cheque holding policy, the overdraft limits
on the applicant’s accounts, the applicant’s knowledge of the respondent’s
Code of Conduct and its cheque holding policy.
[33]
I would
rephrase the issues as follows:
1. What is the appropriate standard of
review?
2. Did the adjudicator have
jurisdiction?
3. Did the adjudicator breach procedural
fairness?
4. Did the adjudicator err in upholding
the dismissal of the applicant?
Applicant’s Submissions
[34]
The applicant had a
clean disciplinary record with no previous warnings or discipline regarding the
applicant’s conduct. The respondent’s representations or actions induced the
applicant into the alleged misconduct. As a result, the respondent is estopped
from disciplining or dismissing the applicant. As well, the decision to uphold
the dismissal of the applicant was based on erroneous findings of fact regarding
the applicant’s reasons for the transactions, the respondent’s Code and its
cheque holding policy, the overdraft limits on the applicant’s accounts and the
applicant’s knowledge of the respondent’s Code of Conduct. Further, errors of
law based on the meaning of kiting and misappropriation were the basis of the
adjudicator’s decision. The applicant felt that the use of her Visa and
accounts was governed by her client relationship with the Bank rather than that
of an employee. Her conduct had nothing to do with her employment. Finally, the
respondent did not suffer damages as a result of the applicant’s conduct.
[35]
The adjudicator
unreasonably accepted the spreadsheet submitted by the respondent by the
investigator, Mr. Montgomery. The adjudicator accepted that there was a $14 per
day loss without illustrating how this conclusion could be made.
[36]
The manner in which the
applicant was terminated was never properly addressed by the adjudicator. The
applicant was denied counsel and the right to leave the interview room on two
separate occasions.
[37]
The applicant also
takes issues with the manner in which her self-represented status was handled
by the adjudicator. The adjudicator did not appreciate the challenges for the
applicant in this regard even though Wagg v. Canada, [2003] F.C.J. No.
1115, states that “(t)here is authority to the effect that a trial judge who is
faced with an unrepresented litigant has an obligation to direct that
litigant’s attention to salient points of law and procedure.”
[38]
The applicant was a
dedicated and honest employee. She was terminated shortly after the first
indication she had that she was suspected of impropriety. The applicant finds
it unreasonable that the adjudicator found that her actions were intentional
because she performed the action of moving money around in her accounts to save
interest. The adjudicator was unreasonable to find that she may not have had a
“criminal motivation” but at the same time find her actions worthy of the most
severe form of discipline available to the respondent.
[39]
The applicant submits
that there were mitigating factors in relation to the misconduct. The applicant’s
training on the matters which led to her termination was not sufficient, she
received no warnings, she was a dedicated and proud employee, she sought to
remedy the alleged misconduct and she was forthright and honest about the
activity at all times. The adjudicator gave no weight to any of these factors
and his analysis was unreasonabley one-sided.
Respondent’s Submissions
The Standard of Review
[40]
The
standard of review is reasonableness (see Dunsmuir v. New Brunswick, [2008] 1
S.C.R. 190). Decisions
of an adjudicator made pursuant to the Canada Labour Code R.S.C. 1985 c.
L-2 (the Code) are given the highest degree of deference by the courts. The
privative clause in the Code indicates that the particular expertise of
adjudicators is not to be ignored and courts have responded accordingly (North
v. West Region Child and Family Services Inc., 2005 FC 1366 at paragraph 16
and Kelowna Flightcraft Air Charter v. Kmet, [1998] 149 F.T.R. 246).
Courts are not to reweigh evidence. As long as there was evidence on the record
that supports the adjudicator’s conclusions, the Court should not intervene on
judicial review.
Transactions Linked to Employment
[41]
The
adjudicator correctly concluded that the applicant’s actions with her personal
accounts could not be separated from her employment. The applicant took
advantage of her knowledge with respect to the time required for a cheque to
clear to act in her own financial interest and contrary to the Bank’s interest.
There was a clear nexus between the conduct and the employment relationship.
[42]
A
cornerstone running through the respondent’s Code of Conduct is trust and the
requirement to avoid actions that may bring “honesty, integrity, or
trustworthiness” into question. In M. v. Royal Bank of Canada, [2000] C.L.A. D. No. 149 at
paragraph 56 and Fawson v. Bank of Montreal, [1996] C.L.A.D. No. 527,
adjudicators have upheld decisions to terminate bank employees for conduct related
to their own personal banking.
[43]
The
applicant was not “entitled” to make the transactions she made. The fraud
detection system flagged the applicant’s transactions which were in violation
of the November 2005 Visa agreement.
Dismissal Contrary to Policy
[44]
The
dismissal was not as the applicant suggests contrary to the respondent’s own policy.
The Code of Conduct included the sections identified with a double asterisk
which identified grounds for immediate dismissal. The adjudicator’s findings of
fact here are entitled to significant deference.
Procedural Fairness
[45]
The
respondent submits that if the applicant felt that she was not being afforded
procedural fairness, she was obligated to raise the issue as soon as
“reasonably possible”. Counsel for the applicant did not raise any concerns
that the applicant was “being subject to differential treatment on the basis of
her race or ancestry” by the respondent or the adjudicator. Therefore, the
respondent finds no basis for judicial review based on a lack of procedural
fairness. Notwithstanding, there is no basis for an allegation of bias. There
was no evidence that the applicant was treated differently by her employer and
the adjudicator found in his decision that there was sufficient evidence to
conclude that the applicant understood the proceedings as well as the rules and
policies established by the respondent related to her employment with the bank.
[46]
There is
also no basis for judicial review based on a lack of language interpretation
for the applicant. The applicant did not raise the issue during the hearing and
there was no evidence to support that assistance was needed for the applicant.
[47]
Finally,
the respondent submits that a duty of fairness was not breached in relation to
an adjournment for the applicant. The applicant was given an adjournment
earlier in the hearing when it was sought by her counsel.
Decision to Uphold Dismissal Reasonable
[48]
In respect
to the adjudicator’s decision to uphold the dismissal of the applicant, the
respondent submits that there was no error in fact and law.
[49]
Progressive
discipline by the respondent is appropriate where the employment relationship
can “viably subsist” (see Cowan v. Royal Bank of Canada, [2003] C.L.A.D.
No. 292 (Blaxland)). A banking employer must feel that there has been
acceptance of responsibility but also behaviour that indicates that the dishonesty
or breach of trust will not happen again (see Ivanore v. Canadian Imperial
Bank of Commerce (1983) 3 C.C.E.L. 26).
[50]
The
adjudicator did not ignore the length of service and previous good record of
employment of the applicant. These factors however, did not outweigh the
seriousness of the transactions and the applicant’s failure to appreciate the
seriousness of her misconduct. Balancing factors such as these is a task within
the expertise and jurisdiction of the adjudicator.
[51]
Honesty and
integrity are essential for banking employees. Cowan above, states that
“[d]ishonesty amongst bank employees would generally warrant more severe
discipline than, for example, kiting done by a warehouseman in the
supermarket…”. The basis for this is the trust relationship that banks have
with their employees.
[52]
The
respondent points out that labour arbitrators have generally upheld dismissal
for misappropriation including kiting.
Credibility
[53]
The
credibility findings of the adjudicator related to the applicant’s knowledge of
the Code of Conduct were also reasonable. The respondent submits that a
reasonable assessment of the evidence led the adjudicator to conclude that the
applicant lacked credibility when she claimed that she had limited knowledge of
the Code of Conduct.
Transactions Approved by Bank
[54]
The
transactions were not implicitly or explicitly allowed by the bank and they
were flagged by the fraud department as a result. The manner in which the
applicant transferred funds - by using personal touch banking with handwritten
cheques deposited separately - is another indication that the bank would not
condone these transactions.
[55]
The
applicant is inconsistent in her explanations of the transactions. During
testimony, on one hand, she stated that she was taking advantage of a
“loophole” in the system when she discovered that she could transfer Visa funds
to inflate the balance on her line of credit. On the other hand, the applicant
claims that her conduct was encouraged or approved by the respondent.
[56]
The
applicant’s assertion that the funds were available to her in her bank account
after transferring from her Visa account is not unlike depositing an empty
envelope into a personal banking machine and then claiming a deposit of $500.
The bank approved the transaction at the time but would later find that the
funds were not deposited and as such, not available. Similarly, funds were
showing available prior to her Visa cheques clearing but the applicant’s funds
were in excess of her Visa credit limit.
[57]
The
respondent does not accept that the transactions were not improper because the
applicant had actual assets, such as her mortgage, that could have covered the
Visa amount. This argument is irrelevant because the money available to the
applicant is not a deposit but funds loaned by the bank on terms that she would
pay interest.
Misappropriation and Kiting
[58]
The
respondent states that the adjudicator’s finding that the applicant had
misappropriated funds is crucial to the decision. The adjudicator concluded
that although the applicant’s transactions did not constitute “kiting” in the
Code of Conduct as it did not involve two or more financial institutions, it
nevertheless constituted misappropriation under the Code of Conduct and as
defined in Black’s Law Dictionary. Black’s Law Dictionary has been applied by
courts and adjudicators and relying on it was not unreasonable (see Lifemax
Natural Foods Ltd. (Trustee of) v. Sahota, [2003] O.J. No. 5016).
[59]
The
adjudicator concluded that the transactions took advantage of time delays required
for cheques to clear. These findings led the adjudicator to conclude that funds
were misappropriated as defined by Black’s Law Dictionary. Further, the
adjudicator concluded that although the transactions were not between two or
more financial institutions, it nevertheless constituted kiting because kiting
does not “require depositing cheques at different institutions”. This was not
unreasonable submits the respondent.
Blameworthiness
[60]
The
respondent disagrees with the applicant’s submission regarding her
blameworthiness. Separately depositing three envelopes with Visa cheques at the
same location was an indication that the applicant knew the transactions were
not allowed by the bank.
[61]
The
respondent then turned to the jurisprudence on termination and whether the
dismissal was excessive. The conclusions of the adjudicator in this regard were
not one-sided and he properly balanced the factors as in McKinley above.
[62]
The
respondent is not required to establish that there were actual damages for a
dismissal to be reasonable. The important issue is that her actions violated
the high standards of honesty and integrity required of employees in the
banking industry.
[63]
The
adjudicator’s findings on credibility were based on carefully considered
evidence including the applicant’s testimony. These findings are at the heart
of an adjudicator’s role and as such, the court should be reticent to
interfere. It was reasonable for the adjudicator not to accept the applicant’s
explanations that she did not read the information on kiting and
misappropriation and that her successful answer on the test regarding kiting
was a fluke. Further, other arbitral decisions have not accepted ignorance of a
Code of Conduct that an employee is required to know as a defence for actions outside
of the Code of Conduct.
Alleged Factual Errors
[64]
The
factual errors alleged are not serious to the extent that paragraph 18.1(4)(d)
of the Act requires. The Court should not reweigh evidence.
[65]
The
applicant submitted that the adjudicator made errors based on a reliance on the
investigator’s spreadsheet. The respondent submitted that the adjudicator did
not rely solely on the spreadsheet and considered all of the banking documents.
The timelines of the applicant’s transactions as found by the adjudicator were
correct. The adjudicator did not make an unreasonable finding on the dollar number
of loss incurred by the bank. While the adjudicator made mention of the bank’s
investigator’s estimation of loss at $14 per day, he did not base his decision
on it.
Analysis and Decision
[66]
Issue
1
What is the appropriate standard of review?
The
issues before me are mainly questions of fact or questions of law and fact save
for the question of procedural fairness. The question of jurisdiction is
generally a question of law; however, the manner in which the applicant is
referring to jurisdiction in her submissions is a question of fact and law. The
remaining issues address how the adjudicator considered and assessed the
evidence before him. Factual findings are to be reviewed in accordance with Dunsmuir
above, as well as paragraph 18.1(4)(d) of the Act which provides this Court
may grant relief where an erroneous finding of fact was made in a perverse or
capricious manner or without regard to the material before it. Findings of fact
command the highest degree of deference from the Court (see Canadian Union of Public Employees, Local 301 v. Montreal (City), [1997] 1 S.C.R. 793).
[67]
Dunsmuir above, provides the approach to be taken
with regard to the standard of review. First, I must determine whether the
jurisprudence has already determined the degree of deference required for the
question before me. If it does not, then I am required to conduct a contextual
analysis to determine the appropriate standard.
[68]
In Bank of Nova Scotia v. Fraser, [2000] F.C.J. No. 773, Mr. Justice
Campbell found that the standard
of review is that of patent unreasonableness noting
the existence of a strong privative clause in section 243 of the Code.
[69]
Dunsmuir above, collapsed the standards of
reasonableness simpliciter and patent unreasonableness into a single
standard of reasonableness. Therefore, patent unreasonableness, as the standard
determined to apply before Dunsmuir above, will now be considered to be
a reasonableness standard.
[70]
Reasonableness is concerned mostly with the existence of
justification, transparency and intelligibility
within the decision making process. It is also concerned with whether the
decision falls within a range of possible, acceptable outcomes which are
defensible in respect of the facts and law (Dunsmuir
above).
Procedural Fairness Issues
[71]
Issue
2
Did the
adjudicator have jurisdiction?
As I mentioned above, the issues the applicant
raises are not jurisdictional questions under subsection 18.1(4) of the Act.
The adjudicator had jurisdiction to hear the complaint as an appointee of the
Federal Minister of Labour. In Syndicat des Employes de Production du Quebec
v. Canada (Labour Relations Board), [1984] 2 S.C.R. 412, the Supreme Court of
Canada stated that jurisdictional error applies to excesses of power whether
committed at the outset of the hearing, during the hearing, or at the
conclusion of the hearing in the orders made by the tribunal.
[72]
I can only
conclude that there was no jurisdictional error on the part of the adjudicator.
The questions regarding non-work related conduct and the respondent’s policies
are central to the expertise given to the adjudicator tasked with decision
making by the Canada Labour Code.
[73]
I would
therefore not allow the judicial review on this ground.
[74]
Issue
3
Did the adjudicator breach
procedural fairness?
There are a number
of procedural fairness questions the applicant raises. In the written
submissions, the applicant stated that she was treated differentially because
she is Asian, originally from China and her first language was
not English. Counsel arguing before me noted that the written submissions had
been completed by different counsel and that he wished to focus on the aspects
of the applicant’s background as outlined below.
[75]
The
respondent argued that the applicant provided no evidence of differential
treatment and as such, there was no basis for this argument. Further, the
respondent stated that if the applicant is alleging bias, then it was incumbent
upon the applicant to raise this issue before the decision was released.
[76]
An
analysis of procedural fairness is only concerned with issues of fairness in
relation to the administrative decision. Matters raised by the applicant
regarding her treatment during the respondent’s investigation and the manner of
her termination are more appropriately raised in the McKinley test which
I consider in Issue 4.
[77]
I agree
with the respondent and therefore do not see a basis for finding that the
applicant was not afforded procedural fairness at the administrative hearing
stage. I also agree with the respondent that there is no evidence in the
decision to suggest differential treatment or bias and that the applicant
should have raised this issue before the adjudicator.
[78]
The applicant
also argued that she should have been provided an interpreter. However, absent
some evidence that assistance is needed, there is no positive obligation on a
tribunal to inform an individual of her right to an interpreter during a
proceeding (see Garcia v. Canada (Attorney General), [2001] F.C.J. No. 1001). Garcia also
notes, however, that the Supreme Court of Canada in R v. Tran, [1994] 2 S.C.R. 951 was not
unequivocal in attributing rights to an interpreter in the criminal sphere
noting that there could be “future consideration whether different rules should
be developed in other situations” such as administrative tribunals. However,
the Federal Court of Appeal in Garcia, intelligibly guided this issue
and I am not persuaded that this case is markedly different on the facts. In Garcia,
the applicant was found to have “proceeded in English in each step on the way
to the Board hearing without mentioning any language difficulties”. This case
was no different. There was no indication that the applicant required an
interpreter and she did not request one. I therefore do not find that the
hearing lacked procedural fairness in this regard.
[79]
The
applicant raised the issue that having to disclose her notes during her cross-examination
was a breach of procedural fairness. Frustrating the applicant further, the
adjudicator failed to allow the applicant time to compose herself and to speak
to her counsel regarding the applicant’s statement in the notes.
[80]
The respondent
replied that it is a well established principle that counsel cannot speak to a
client undergoing cross-examination save for consent of the Court or opposing
counsel. Therefore, there was no breach of any procedural right. Further, the
applicant’s counsel had the opportunity to address the information that came to
light in the note being entered into evidence in the applicant’s re-direct or
closing submissions by the applicant’s counsel.
[81]
I concur with
the respondent in respect to these matters. The applicant’s notes were admitted
into evidence as ordered by the adjudicator and the applicant’s counsel had the
opportunity to respond to the request for production by the respondent before
hand. This is consistent with the rules of evidence. Closing submissions
provided an opportunity for counsel to address the information in these notes.
[82]
With respect
to the adjudicator’s denial of an adjournment, Wagg v. Canada, [2003]
F.C.J. No. 1115 is informative. Paragraph 19 states:
“[i]t is trite law that the decision as to whether to grant an
adjournment is a discretionary decision, which must be made fairly (see Pierre
v. Minister of Manpower & Immigration, [1978] 2 F.C. 849, at p. 851,
cited with approval in Prassad v. Canada (MEI), [1989] 1 S.C.R.
560, at para. 17). There is no presumption that everyone is entitled to an
adjournment. The Court will not interfere in the refusal to grant an
adjournment unless there are exceptional circumstances (see Siloch v. Canada,
[1993] F.C.J. No. 10 (F.C.A.)).
[83]
I do not find
that there were exceptional circumstances rendering the adjudicator’s decision
to proceed reviewable. It was not as if the adjudicator was against granting
adjournments. An adjournment had been granted for the applicant earlier in the
hearing. In this case, the adjudicator felt it was not warranted and this was a
decision he was entitled to make. There was no breach of procedural fairness in
this regard.
[84]
The applicant
submits that there is a duty of a judge or adjudicator to direct the unrepresented
litigant’s attention to salient points of law and procedure (Wagg above).
I did not find this to be the overriding premise gleaned from this case. Wagg
above, involved an applicant who alleged that the judge coerced him into
signing a consent to judgment and failed to grant him an adjournment and as
such, the procedures in the case lacked fairness and adherence with principles
of natural justice. In any case, the applicant does not argue that the
adjudicator did not direct her to law or procedure but that the adjudicator did
not ensure that she was represented.
[85]
The applicant also
stated that she was precluded from procedural fairness when the adjudicator
indicated that she could not seek an adjournment to find counsel.
[86]
The Wagg
decision states in part, at paragraph 36:
The
burden of dealing with unrepresented litigants falls most heavily on trial
courts. Courts of appeal should be careful not to make this task even more
difficult by being overly critical of attempts to assist the litigants and to
move the process along. The trial judge's overarching responsibility is to ensure
that the trial or hearing is fair. If, after taking into account the whole of
the circumstances, the reviewing court is satisfied that the trial was fair, it
ought not to intervene simply because the trial judge departed from the
standards of perfection at one point or another…
[87]
In the dissent
in Wagg above, Mr. Justice Isaac notes that the matter before him was
not a case “of a litigant who simply underestimated the complexity of his
case”.
[88]
However,
it appears that this was what happened with the applicant in this case and as
such, she hired counsel ten days before the hearing. She submits, however, that
the damage had already been done.
[89]
I can appreciate
that the applicant may have felt disadvantaged by not having representation.
However, the choice as to whether she hired counsel was hers to make. The
adjudicator did not err by not ensuring that the applicant was properly represented.
I can also appreciate the relative resources and power imbalance that present
with a complaint filed against a large bank.
[90]
I will
not allow judicial review on the basis of a breach of procedural fairness for
the reasons above.
[91]
Issue 4
Did the
adjudicator err in upholding the dismissal of the applicant?
The
applicant raised a number of issues and delineates them as errors of law and
errors of fact. I have joined these issues as questions of fact and questions
of fact and law as they fall under issues that are reviewed on the standard of
reasonableness.
[92]
The
adjudicator begins his decision with his findings on credibility. I will begin
my analysis here because it underscores each of the issues that have been
raised by the applicant in regards to the preservation of her dismissal by the
adjudicator.
[93]
The
adjudicator states that he found serious credibility issues with respect to the
applicant’s testimony. First, the adjudicator stated that the applicant’s
testimony on her knowledge of kiting and misappropriation was implausible and
inconsistent. He suggested that her responses to the investigator at the
initial interview could have been attributed to the surprise of the interview
and the intimidating nature of it. He could not reconcile, however, the
inconsistencies and explanations she provided during the hearing.
[94]
The
applicant questions such a stern conclusion on her testimony when she points
out many inconsistencies in the respondent’s witnesses were not mentioned by
the adjudicator. The respondent states that the adjudicator’s conclusions came
well within what was reasonable.
[95]
It is well
settled law that the assessment of a witness’ credibility is, as the respondent
submitted, “at the very heart of an adjudicator’s role as trier of fact”. I
find that the adjudicator supported his findings with reasonable explanations.
For example, he found that the applicant’s explanation on having knowledge of
kiting and misappropriation were unbelievable given her access to this
information in her initial training and the Code of Conduct. I have not had the
benefit of hearing the testimony first hand and have no grounds to intervene.
[96]
I now turn
to the error in fact alleged by the applicant.
[97]
The applicant does not
dispute the facts but the interpretation of the facts by the adjudicator.
[98]
One, the Code of Conduct was
misinterpreted in two respects. It was unreasonable for the adjudicator to
conclude that the applicant was aware of the Code of Conduct. The respondent
offered no evidence that the applicant received training beyond her initial
training or specifically on kiting or misappropriation. What’s more, the Code
of Conduct does not encapsulate the transactions she conducted in its
definition of “kiting” and “misappropriation”.
[99]
Two, the adjudicator erroneously
relied on the $14 a day loss indicated by the investigator who later admitted
that the calculations were done by someone else, Lawrence Kwai, and the manner
of arriving at that figure was never disclosed by the respondent. There were no
losses according to the applicant because there were always funds to cover the
accounts.
[100]
Three, the
adjudicator faulted the applicant with transactions that were “implicitly or
expressly” approved by the respondent and she was induced into the alleged
misconduct. Further, the
applicant argued that there were contradictions in the investigators evidence and errors. I am
of the view that the findings on fact by the adjudicator were not in error. As
I mentioned above, findings of fact attract the highest deference (see Dunsmuir
above).
[101]
The
findings on kiting and misappropriation were reasonable. Although kiting was
defined in the Code of Conduct as transactions that extended beyond one banking
institution, I find that it was reasonable for the adjudicator to conclude that
the transactions completed by the applicant were nevertheless misappropriation.
Misappropriation was defined broadly under the Code and included kiting.
Reliance upon Black’s Law Dictionary to further enunciate misappropriation was
not misplaced and as the respondent points out, is often used in jurisprudence
to delineate legal concepts.
[102]
Further,
the definition of kiting in the Code makes mention of transactions that are
conducted between more than one financial institution, which was not done here,
but also mentions that kiting involves using the time delay required for a
cheque to clear.
[103]
I also do
not find it unreasonable that the adjudicator found that the applicant must
have been aware that she was exceeding the “buffer zone” beyond her credit
limit in her transactions as a Visa employee. This includes the applicant’s
claim that she was not aware that the November 2005 Visa agreement prohibits
overpayment unlike her July 2003 agreement. Again, it was reasonable to
conclude that as a Visa agent, the applicant would have been aware of the
provisions in these agreements.
[104]
The
adjudicator’s conclusion in regard to the applicant’s knowledge of the Visa
agreements and nature of misappropriation led him to conclude that the
transactions of the applicant, “had no valid bona fide purpose or
reason”. Particularly salient for the adjudicator was the fact that “[k]ey to
the understanding of the transactions is that the transfer of funds from the
Visa account were by way of handwritten cheques, deposited via ATM, taking
between four and six days to clear” and the transfer of funds back to the
respective accounts, instantaneous as they were conducted “online”.
[105]
The
adjudicator stated that this was akin to ATM deposits of empty envelopes. The
conclusion that this constituted misappropriation followed.
[106]
The
adjudicator reiterated some of the text of the hearing in which these issues
are canvassed. I cannot second guess these findings and am precluded from doing
so by law. I am of the view that the adjudicator offered a detailed examination
of the transactions and why they fit within the definition of misappropriation.
[107]
The
further submissions by the applicant regarding errors of fact in regards to the
calculated loss to the bank were considered. However, I agree with the
respondent in that the $14 a day cited by the adjudicator was not material to
his ultimate decision. The adjudicator stated that the amount of interest owed
to the Bank was reduced “by some amount, according to the Bank, $14.00 a day”.
This does not suggest to me that the adjudicator relied on the exact figure but
on the premise that the transactions were conducted to save interest and by
doing so, the bank lost interest. This is an intelligible conclusion.
[108]
Finally, I
am of the view that the applicant’s argument that the bank incited her to commit
the transactions lacks merit. The applicant may have been able to do the
transactions but this does not suggest that they were condoned by the bank. The
adjudicator found that the Code of Conduct, RBC Intranet and Visa agreement all
suggested that the manner of these transactions were in contradictions with bank
policy.
[109] I now turn to one of the main thrusts of
the applicant’s argument, particularly in oral submissions before me. The
applicant argued that dismissal was excessive and that a contextual approach as
required in McKinley above, was not truly applied.
[110] The applicant argued a number of
mitigating factors against dismissal were ignored by the adjudicator,
unreasonably considered and/or given inadequate weight to the extent of being
in error.
[111] The applicant first argued that the
adjudicator committed an error of fact and law in upholding the dismissal of
the applicant despite the applicant’s clean disciplinary record, with no
previous warnings or discipline regarding the applicant’s conduct. She received
no warnings about her conduct. Further, she attempted to remedy the alleged misconduct
and was forthright and honest with the respondent about her activity.
[112] Other mitigating circumstances argued by
the applicant are that she was new to Canadian culture and did not realize that
she was doing something wrong. The applicant stated that she had found a way to
save interest but she always had funds that were fully secured to cover the
debts in the transactions. And, ultimately the applicant did not do anything
illegal which would constitute just cause for the termination of her employment.
As well, the applicant submitted that there was no loss to the Bank.
[113] The applicant also does not want the
manner in which she was dismissed to be inconsequential. She was brought into
an interview with an ex-police officer. As mentioned above, the applicant had a
different regard of police authority coming from China
and as such, the meeting was particularly distressing for her. The applicant
feels that she should have been given the opportunity to leave as she had
requested twice. The investigator’s lack of response to her request for a
lawyer was “clear oversight on his part”, as he said in his testimony, but a
mistake that should not have gone unnoticed by the adjudicator.
[114] Her request for counsel should also not
have gone unheeded. The explanation by the investigator, Mr. Montgomery, that
he mistakenly brought an outdated form to the interview that did not have as a
“bullet” the right to contact legal counsel was a mistake that he had not made
before but on this occasion did, goes further to her overall harsh treatment
and oversights that should have warranted consideration by the adjudicator.
Further, the mitigating factors were turned into factors that were used against
her by the adjudicator. The applicant submits that the adjudicator’s one sided
analysis was patently unreasonable.
[115] The applicant never concealed the fact
that she was transferring funds between her Royal Bank accounts. However, the
adjudicator stated that the applicant failed to “appreciate the nature of her
conduct” and instead blamed the respondent for ““allowing” her to do what she
did”.
[116] The balancing of the factors is as the
respondent submitted, “a task that is squarely within the expertise and
jurisdiction of the adjudicator” (see Green v. Canada (Treasury Board), [2000] F.C.J. No. 379 (C.A.)). I do not
find that the adjudicator ignored the applicant’s good work record. Further,
the adjudicator may not have found the conduct of the initial interview germane
to the issues before him. On the other findings, it was clear that the adjudicator
disagreed with the applicant and as such, they were not considered to be
mitigating factors to weigh against dismissal. The regard this Court must have
for the balancing of factors has been made clear by the Federal Court of Appeal
in Green above:
13 It is equally clear that the
adjudicator did not accept that the length or quality of Mr. Green's work
record outweighed the egregiousness of the abandonment of his post for 35
minutes. The weighing and balancing of opposing considerations is a task that
is squarely within the expertise and jurisdiction of the adjudicator. Her
treatment of Mr. Green's employment record discloses no error that warranted
intervention by the Judge.
Therefore there is no error in this
respect.
[117] According to the applicant, the
adjudicator’s decision failed to address the principle of proportionality as
set out in McKinley above. The Supreme Court of Canada states that when
dealing with issues of employee honesty, a contextual approach must be applied:
something, according to the applicant, that the adjudicator failed to do.
[118] The most persuasive of the arguments
before me submitted by the applicant was that the adjudicator erred in not
finding that dismissal was excessive in this case.
[119] The adjudicator noted that he was
referred to a number of cases but chose two in particular to guide his
analysis. First, the adjudicator looked at Fawson v. Bank of Montreal,
[1996] CLAD No. 527 (Demont) for the proposition that a loss of trust in a bank
employee is significant because of the “handling of customer funds and those
the bank uses for profitable purposes”. In Fawson above, the standard is
a strict one and allows for little deviation from standards of honesty and
integrity. In the adjudicator’s view, the conduct of the applicant caused the bank
to lose its confidence in her honesty and integrity as an employee.
[120]
Second, the
adjudicator looked at Banque Laurentienne du Canada (1994), 40 LAC (4th)
No. 342 (Frumkin), as submitted by the applicant. In Banque Laurentienne
above, an employee had improperly obtained a few days credit in her account by
depositing a cheque in the amount of $320, into an ATM, in anticipation that
she would be depositing a cheque to cover those funds within days. The
adjudicator noted that in that case, the employee had a relatively long service
record and she did not have a clear intent to deprive the bank of funds.
However, the adjudicator found that in this case, the applicant’s actions were
far more egregious:
In my view, Ms. Wu’s misconduct was very
serious. Unlike the circumstances in Banque Laurentienne, Ms. Wu’s misconduct
was premeditated, repetitive, deliberate, calculated, and occurred over a long
period of time, several months, in fact. There is also no question that she
obtained a benefit from her circulation of funds, according to the Bank
approximately $14.00 per day. It cannot be characterized as a “momentary and
emotional aberration.” While Ms. Wu for all intents and purposes was a good and
dedicated employee with a discipline free record, she was also a short-term
employee. The dismissal of Ms. Wu is consistent with the Bank’s policies, and
there is nothing to suggest that she was singled out for any special or harsh
treatment. In this context I also consider Ms. Wu’s continued failure to appreciate
the nature of her conduct and to take responsibility for it. Ms. Wu continued
to deny that she had engaged in any wrongdoing and, instead, blamed the Bank
for “allowing” her to do what she did. In short, I am unable to conclude that
termination was excessive in all of the circumstances.
[121]
In my
view, the conclusions of the adjudicator were such that termination seemed the
only outcome. My concern is that the adjudicator’s evaluation of the misconduct
of the applicant may have gone too far given the circumstances of the impugned
transactions. As he stated, “Ms. Wu’s misconduct was premeditated, repetitive,
deliberate, calculated, and occurred over a long period of time, several
months, in fact.” It is true that the applicant would have thought about the
transactions before she conducted them and that they would have been deliberate
but I fail to see how any transactions would have been conducted otherwise. The
tenor of this statement implies that she was shady or fraudulent in her intent,
which the adjudicator claimed himself was not the case. There was no criminal
mind and the applicant was clearly taken aback by the allegations and resulting
dismissal.
[122]
Further,
the adjudicator made much of the applicant’s lack of contrition regarding the
transactions. While this has been a factor in jurisprudence, it is not an easy
issue to gauge. The expectation of “taking responsibility for one’s actions” is
complicated when the applicant felt that she had a legal basis for challenging
her dismissal and felt her treatment unfair.
[123]
The
applicant’s counsel argued that the respondent may have an internal policy that
such conduct warrants dismissal but the “law of the land” demands that the bank
not unilaterally opt out of McKinley considerations. I am in agreement.
[124]
As stated
in McKinley above, and the adjudicator’s decision, dishonest misconduct
no longer provides automatic cause for dismissal. The question, according to McKinley
above, is whether the employment relationship can continue to exist.
[125] I will first deal with the case law
submitted on this issue by the respondent. I will not address the tribunal
decisions but note that the cases put forward indicated the importance of the
trust relationship between employer and employee and the stricter standards and
more harsher punishments that flowed from a breach of trust in these
circumstances.
[126] The decision of Lepire v. National
Bank of Canada, [2004] F.C.J. No. 1886 as cited by the respondent states
the importance of the relationship between banks and their employees. However,
the facts of the case are much different. Lepire above, involved a 31
year service employee who breached the code of ethics of the bank by granting a
loan to her mother and breaching policy by later opening an account with her
husband. The adjudicator overturned the dismissal and noted that the employee
had not committed theft or embezzlement or serious fraud. Mr. Justice Blais
overturned the adjudicator’s decision noting that the facts involved a conflict
of interest which was especially troublesome for an employee holding a position
in a bank. Mr. Justice Blais states:
15 A careful reading of the
adjudicator's decision leads us to conclude that he based himself essentially
on the decision of the Supreme Court of Canada in McKinley v. BC Tel, [2001]
2 S.C.R. 161.
16
It
appears that in the McKinley decision, supra, the Supreme Court
spelled out the circumstances in which an employer would be entitled to
summarily dismiss an employee because of the latter's dishonest conduct.
17
It
is my unequivocal opinion that this decision must be distinguished from the
present case because it is much too restrictive and inapplicable. It seems to
me that an employee's dishonesty, irrespective of the employee's level in
relation to his employer, must be treated differently from that of an employee
who would knowingly put himself in a conflict of interest situation, which is
the situation in this case.
[127] This is a trial level decision and as
such, I am not bound by it. In any case, the facts are dissimilar. I now turn
to McKinley above, and the most salient aspects of the decision to the
case at bar:
Applicable
Standard for Assessing Whether and in What Circumstances Dishonesty Provides
Just Cause
48 In light of the foregoing analysis,
I am of the view that whether an employer is justified in dismissing an
employee on the grounds of dishonesty is a question that requires an assessment
of the context of the alleged misconduct. More specifically, the test is
whether the employee's dishonesty gave rise to a breakdown in the employment
relationship. This test can be expressed in different ways. One could say, for
example, that just cause for dismissal exists where the dishonesty violates an
essential condition of the employment contract, breaches the faith inherent to
the work relationship, or is fundamentally or directly inconsistent with the
employee's obligations to his or her employer.
49
In
accordance with this test, a trial judge must instruct the jury to determine:
(1) whether the evidence established the employee's deceitful conduct on a
balance of probabilities; and (2) if so, whether the nature and degree of the
dishonesty warranted dismissal. In my view, the second branch of this test does
not blend questions of fact and law. Rather, assessing the seriousness of the
misconduct requires the facts established at trial to be carefully considered
and balanced. As such, it is a factual inquiry for the jury to undertake.
.
. .
53
Underlying the approach I propose is the principle of
proportionality. An effective balance must be struck between the severity of an
employee's misconduct and the sanction imposed. The importance of this balance
is better understood by considering the sense of identity and self-worth
individuals frequently derive from their employment, a concept that was
explored in Reference Re Public Service Employee Relations Act (Alta.), [1987]
1 S.C.R. 313, where Dickson C.J. (writing in dissent) stated at p. 368:
Work is one of the most fundamental
aspects in a person's life, providing the individual with a means of financial
support and, as importantly, a contributory role in society. A person's
employment is an essential component of his or her sense of identity,
self-worth and emotional well-being.
This
passage was subsequently cited with approval by this Court in Machtinger v.
HOJ Industries Ltd., [1992] 1 S.C.R. 986, at p. 1002, and in Wallace,
supra, at para. 95. In Wallace, the majority added to this notion
by stating that not only is work itself fundamental to an individual's
identity, but "the manner in which employment can be terminated is equally
important".
. . .
57
Based
on the foregoing considerations, I favour an analytical framework that examines
each case on its own particular facts and circumstances, and considers the
nature and seriousness of the dishonesty in order to assess whether it is
reconcilable with sustaining the employment relationship. Such an approach
mitigates the possibility that an employee will be unduly punished by the
strict application of an unequivocal rule that equates all forms of dishonest
behaviour with just cause for dismissal. At the same time, it would properly
emphasize that dishonesty going to the core of the employment relationship
carries the potential to warrant dismissal for just cause.
[128] I am obliged to give deference to the
adjudicator’s finding of fact and credibility. He concluded that the applicant
was dishonest and knew that the transactions were against the Code of Conduct
and against her Visa agreement, particularly the 2005 agreement. He also
concluded that she would have known that her transactions exceeded the buffer
zone allowed credit card holders over the credit limits proscribed. I also find
the adjudicator’s findings on kiting and misappropriation as having been
encompassed by the Code of Conduct as reasonable.
[129] The facts in this case are also that the
applicant was dismissed based on conduct related to her personal banking
accounts. She did not steal, embezzle or commit fraud. The adjudicator
acknowledged that she did not have a criminal intent.
[130] I reiterate the statement in McKinley
above, about proportionality. Mr. Justice Iacobucci states in part at paragraph
53:
Underlying
the approach I propose is the principle of proportionality. An effective
balance must be struck between the severity of an employee's misconduct and the
sanction imposed.
[131] I find that there was no proportionality
shown in the dismissal of the applicant or the adjudicator’s evaluation of it.
I acknowledge that both respondent and adjudicator saw the employer-employee
relationship as irretrievably broken but I do not find this conclusion
reasonable. The fact that the activities in question occurred after work hours
and in the applicant’s capacity as a customer, should have been considered a
mitigating factor. What’s more, the applicant was given no warnings and no
suspensions or other punishment. Nor was there any conclusive evidence of any
significant loss or risk to the bank; only its estimate that it lost $14 a day.
Nor did the respondent seem to have a consistent definition of what it viewed
as kiting. These mitigating factors, together with the respondent’s treatment
of the applicant during the investigation and the applicant’s vulnerable state
cannot be ignored. Yet there does not seem to be any mention or consideration
of these aspects in the adjudicator’s ultimate decision. Instead of looking at
any of the mitigating factors, he emphasized the applicant’s lack of remorse,
which as stated above, was an unfair consideration since the applicant was
simply attempting to defend the case against her.
[132] As the applicant noted, “work is one of
the most fundamental aspects of one’s life”. This dismissal was clearly
traumatic for the applicant and from the initial meeting with the investigator and
her supervisor, the “unequal bargaining power” of the employer-employee
relationship governed.
[133]
Because of the nature
of the proportionality analysis, the decision by the arbitrator was not
justified and I do not find that it “falls within a range of possible,
acceptable outcomes which are defensible in respect of the facts and law” as in
Dunsmuir above, and in light of McKinley’s guidance on dismissal
and proportionality. The proportionality analysis was not complete.
[134]
I therefore allow the
judicial review on this ground.
[135]
The application for
judicial review is therefore allowed and the matter is referred to a different
adjudicator for redetermination.
[136]
The applicant shall
have her costs of the application.
JUDGMENT
[137] IT IS ORDERED
that:
1. The application for
judicial review is allowed and the matter is referred to a different
adjudicator for redetermination.
2. The applicant shall
have her costs of the application.
“John
A. O’Keefe”
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