Date: 20110620
Docket: T‑599‑10
Citation: 2011 FC 728
[UNREVISED ENGLISH CERTIFIED TRANSLATION]
Ottawa, Ontario, June 20, 2011
PRESENT: The Honourable Mr. Justice Scott
BETWEEN:
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6245820 CANADA INC.
and 3903214 CANADA INC.
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Applicants
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and
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MARIO PERRELLA
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Respondent
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REASONS FOR
JUDGMENT AND JUDGMENT
A.
INTRODUCTION
[1]
This is an application
for judicial review of a decision by Mark Abramowitz in his capacity as an
adjudicator appointed under section 242 of the Canada Labour Code,
RSC 1985, c L‑2, made under subsection 18.1(1) of the Federal
Courts Act, RSC 1985, c F‑7, by two Canadian companies, 6245820
Canada Inc. and 3903215 Canada Inc. (the applicants).
B.
FACTS
[2]
The applicants belong
to the GT Group, a group of family businesses operating in the transport,
warehousing and container repair industries. Mario Perrella (the respondent)
worked for the GT Group as Fleet Manager. His duties consisted of hiring,
supervising, appraising, disciplining and managing the work of some twenty
employees for the applicants. When he was dismissed in 2009, the respondent was
63 years old and had worked for the GT Group for nearly 29 years. In
January 2009, the respondent gave notice of his intention to retire at
65 years of age, upon which the applicants allegedly hired someone to take
his place.
[3]
On February 19,
2009, the GT Group’s chief executive officer, Donato Terrigno, allegedly
learned that a potential tire supplier considered that it could not do business
with the GT Group because all purchases had to be made through the applicant,
who demanded kickbacks. Mr. Terrigno then asked the GT Group’s general
manager, John Gillanders, to investigate those allegations.
[4]
According to the
applicants, on February 20, 2009, Mr. Gillanders informed the
respondent that he was conducting an investigation and requested his
cooperation. On February 25, 2009, the respondent allegedly stated that he
was resigning and turned in his keys and pass. According to the respondent, he had
been confronted and unfairly accused of having stolen large sums of money. On
the other hand, the applicants submit that the respondent resigned of his own
accord, at the earliest opportunity.
[5]
The applicants further
submit that the respondent requested to be given his Record of Employment on
February 27, 2009. However, on March 2, 2009, the respondent reported
for work. He was then reminded that he had very recently resigned.
[6]
The applicants allege
that when the employment relationship ended, the respondent was a manager under
subsection 167(3) of the Canada Labour Code. Therefore,
Division XIV of the Canada Labour Code (“Unjust Dismissal”) does
not apply in this case.
[7]
On April 6, 2009,
the respondent filed an unjust dismissal complaint against the applicants under
the Canada Labour Code.
C.
IMPUGNED DECISION
[8]
The applicants filed
preliminary objections, which were decided by the adjudicator in a preliminary decision.
First, the adjudicator dismissed the objection that he lacked jurisdiction to
hear the respondent’s complaint because the respondent was a manager under
subsection 167(3) of the Canada Labour Code. The adjudicator also
dismissed the applicants’ objection that the respondent had voluntarily
resigned from his employment and had not been dismissed.
[9]
In his award on the
dismissal, the adjudicator found that the respondent should be penalized only
for having appropriated property that did not belong to him, that is, a ladder
worth approximately $300. He made an order directing the applicants to
suspend the respondent without pay for three months, since he determined that
the respondent had been unjustly dismissed.
D.
RELEVANT LEGISLATION
[10]
See the appendix
(Appendix ”A”) for the relevant sections of the Canada Labour Code.
E.
ISSUES AND APPROPRIATE
STANDARD OF REVIEW
[11]
The issues at stake may
be summarized as follows:
1.
Did the adjudicator err
in concluding that the respondent was not a “manager” under
subsection 167(3) of the Canada Labour Code?
2.
Did the adjudicator err
in concluding that the respondent had not resigned from his position?
3.
Was it unreasonable for
the adjudicator to decide that the dismissal was unjust?
4.
In his award on the
dismissal, did the adjudicator breach the rules of natural justice by refusing
to allow the applicants to adduce the respondent’s disciplinary file as
evidence?
[12]
Regarding the first
issue, the applicants contend that the decision in Msuya v Sundance Balloons
International Ltd, 2006 FC 321 at paragraph 20 [Msuya], applies
in this case. That decision states that the standard of review to be applied to
the interpretation of the definition of “manager” is one of correctness. More
recently, however, Justice Luc Martineau of this Court clarified in Canadian
Imperial Bank of Commerce v Torre, 2010 FC 105 at paragraphs 9 and 10
[Torre], that this is a mixed question of fact and of law and that the
reasonableness standard ought to be applied. The Court agrees with Justice
Martineau’s interpretation and is applying it in this case.
[13]
The appropriate
standard of review for the second issue is also that of reasonableness (Baldrey
v H & R Transport Ltd, 2005 FCA 151 at paragraph 11 [Baldrey]).
[14]
The reasonableness
standard of review applies to the third issue in accordance with
section 243 of the Canada Labour Code and Royal Bank of Canada v
Wu, 2010 FCA 144 at paragraph 4.
[15]
The correctness
standard applies to issues of procedural fairness (Khosa v Canada (Minister
of Citizenship and Immigration), 2009 SCC 12 at paragraph 43).
F.
ANALYSIS
(a) “Manager”
Relevant law
[16]
The word “manager” used
in subsection 167(3) of the Canada Labour Code is not defined in
the legislation. In Torre (above), Justice Martineau quite rightly
stated that this non‑application must be [translation] “restrictively interpreted”
(paragraph 15). Myusa (above), at paragraph 23, establishes
that the applicable criteria for determining whether a person is a manger under
the Canada Labour Code are significant autonomy, discretion, and
authority in conducting the employer’s business—in this case, as regards the
respondent.
Applicant’s submissions
[17]
The applicants point to
the adjudicator’s conclusions that the respondent’s title was “Fleet Manager”
and that he had 19 persons under his direct supervision, could hire the employees
under his supervision and authorize overtime pay. In addition, management
consulted him to establish the amounts of the bonuses to be paid to the
employees under his supervision, and he appraised and imposed discipline on
those same employees and recommended that they be dismissed, depending on the
case. Last, the respondent set vacation times, negotiated prices for and sales
of used equipment belonging to the applicants (subject to Mr. Danny’s or
Guiseppe Terrigno’s approval) and made decisions regarding repairs to or the
towing or changing of tractors on the road. Bill payments, however, had to be
approved by the president or the chief executive officer.
[18]
In their record, the
applicants rely on Canadian Imperial Bank of Commerce v Bateman, [1991]
3 FC 586 at pages 48‑61) [Bateman] and Leontsini c Business
Express Inc, 1997 CanLII 5981 at pages 62‑68) [Leontsini]
in contending that an employee’s decision‑making authority need not be
absolute for him or her to meet the definition of manager. In fact, it suffices
for the employee to be someone [translation]
“whose primary responsibility is in fact to manage . . . whether that
person is at the upper or lower end of the management chain” (Leontsini at
pages 64‑65). The applicants also contend that although the
adjudicator in this case referred to Bateman and Leontsini, he failed
to apply the principles at all. The applicants submit that the adjudicator
instead focused on the fact that many of the respondent’s decisions were
subject to his superiors’ approval (see paragraphs 23, 26 and 30 of the
preliminary decision, Applicants’ Record at pages 32‑33).
[19]
The applicants also
argue that the respondent had considerable autonomy and could discipline and
suspend his employees and that, even if he technically did not have the
authority to dismiss them, his recommendations in that regard were always
followed and implemented. His wage conditions were better than those of the
general manager. The applicants contend that the adjudicator erred in giving
more weight to the fact that some of the applicant’s decisions had to be
approved by upper management. They submit that it is paradoxical for the
adjudicator to have found, in his preliminary decision, that the respondent did
not have the necessary authority to bind the applicants on important matters and
then, in his award on the dismissal, to have excused a number of the criticisms
levelled against the respondent by reason of the considerable autonomy (“carte
blanche”) the respondent was given. (Applicants’ Record at page 54.)
[20]
The applicants contend
that the adjudicator made no mention of several pieces of uncontradicted
evidence that are broadly relevant to the issue, which confirm that the
respondent had the autonomy referred to in Myusa (above).
Respondent’s submissions
[21]
The respondent submits
that the adjudicator reviewed all of the applicable case law, relying on, among
others, Ferris v Big Freight Systems Inc, [2008] CLAD No 58 at
paragraph 12, and Myusa (above), two decisions referred to by the
applicants. The respondent also contends that the applicants, in relying only
on Myusa and not Torre as regards the appropriate standard of
review, are in fact asking the Court to rehear the case rather than consider
whether the adjudicator’s decision was reasonable.
[22]
The respondent contends
that the adjudicator clearly took Bateman and Leontsini into
account, since he referred to them at paragraphs 15 and 16 of his
decision. The adjudicator also referred to Laderoute v Air Canada (Technical
Services), [2008] CLAD No 144, in his decision, which, according to
the applicant, clearly shows that the adjudicator had a firm grasp of the
principles applicable in this case.
[23]
The respondent refers
to Greyeyes v Ahtahkakoop Cree Nation, [2003] CLAD No 205 at
paragraph 11 [Greyeyes], in which it is stated that the definition
of “manager” for the purposes of subsection 167(3) is narrower than the
definition set out in subsection 3(1) of the Canada Labour Code. The
following is written in Greyeyes:
. . .
However, the policy of section 240 of the Canada Labour Code, as
described earlier in this award, is to protect vulnerable workers with
insufficient economic power to protect themselves, and the category of
vulnerable employees will often include lower and middle echelon managers who
do not form part of the directing will of the organisation. Therefore, it seems
to me that the test for “manager” for the purpose of section 240 is
intended to be narrower than that for “managerial functions” under
section 3(1).
The respondent submits that the applicants are trying to apply a much
broader definition to the notion of “manager”, which corresponds to
subsection 3(1) and is not applicable in this case.
[24]
The respondent contends
that the applicants are using the respondent’s supervisory, hiring and
managerial authority as a basis to attack the adjudicator’s decision. The
adjudicator took those factors into consideration at paragraphs 22 and
following of his decision, but nontheless concluded that the respondent was not
a “manager”. The respondent submits that the following excerpt from Justice
Martineau’s decision in Torre applies in this case:
[30] On the
other hand, an analysis of the impugned decision clearly shows that the
adjudicator considered the arguments submitted by the applicant. He merely did
not accept them. Contrary to the applicant’s allegation to the effect that the
adjudicator’s reasons are questionable, they are not perverse or made in a
capricious manner. . . .
[31] Without
expressing any opinion on this point, the conclusion to the effect that the
respondent was a “manager” was undoubtedly a possible outcome . . . .
However, this conclusion was certainly not the only one within the “range of
possible acceptable outcomes which are defensible in respect of the facts and
law”, as other adjudicators in the past may have dismissed objections similar
to the ones made by the applicant . . .
[25]
The respondent also
submits that although management of the applicants followed his advice on
operational issues related to managing the vehicle fleet, that fact alone does
not make him a manager. To that effect, the respondent quotes from Greyeyes at
paragraph 16:
Nevertheless,
the bare fact that an employee’s judgment is generally relied on, and his or
her recommendations are generally adopted, by virtue of that employee’s
professional expertise, does not in and of itself necessarily make that person “manager”.
. . .
Analysis
[26]
This Court is in full
agreement with the principles set out in Torre; consequently, the Court
cannot substitute its own conclusion for the one reached by the adjudicator. In
this case, the adjudicator did not err in his analysis. The excerpt from Torre
referred to by the respondent applies, and the adjudicator’s conclusion “was
undoubtedly a possible outcome” given the evidence in the record. It is
undisputed that many of the respondent’s decisions had to receive his superiors’
approval. Even if he had some autonomy in carrying out his daily work, this did
not make the respondent a “manager” of the company for the purposes of
subsection 167(3) of the Canada Labour Code.
[27]
The applicants have
failed to show any error in this part of the adjudicator’s analysis that would
warrant intervention by this Court. It is not for the Court to reconduct the
analysis and substitute its own conclusions.
(b) Did the respondent
resign from his position?
Relevant law
[28]
In Baldrey
(above), the Federal Court of Appeal stated the following at paragraph 9
with regard to the approach adjudicators must take in circumstances similar to
those in this case:
It is generally
agreed among Arbitrators and Adjudicators that the first task in determining
whether an employee has resigned from her employment is to determine whether it
was the intention of the employee in question. In short, it must be determined
whether the employee actually intended to voluntarily sever the employment
relationship. As has been made clear in the leading and often quoted decision
of Professor J. Finkelman K.C. in Re Anchor Cap and Closure Corporation of
Canada, Ltd., l L.A.C. 222, the act of resigning from employment includes
both a subjective intention to leave one’s job and some objective conduct which
manifests an attempt to put that intention into effect. In the Anchor Cap
case, the Arbitrator stated:
The act of
quitting a job has in it a subjective as well as an objective element. An
employee who wishes to leave the employ of the company must first resolve to do
so and he must then do something to carry his resolution into effect. That something
may consist of notice, . . . or it may consist of conduct, such as
taking another job inconsistent with his remaining in the employ of the
company.
[29]
The adjudicator in Baldrey
further states:
The general
approach to the issue of resignation from employment adopted by Arbitrators and
Adjudicators arises from the commonsense recognition that words spoken in haste,
high emotion or anger may not express the true intentions of the employee and
that, often enough, such words are spoken to “let off steam” or out of the
enormous frustration of the moment. Words arising from such situations do not
necessarily express any real intention to sever the employment relationship.
Applicants’
submissions
[30]
The applicants contend
that the adjudicator erred regarding the timeline of events surrounding the
alleged dismissal. The applicant did not leave his workplace on February 20,
2009, when he was informed of the investigation (preliminary decision,
paragraph 36), but on February 25, 2009, when he turned in his keys
and pass. The telephone conversation between the respondent and
Mr. Gillanders occurred on February 27, 2009, not on
February 25, 2009, contrary to what the adjudicator stated
(paragraph 38). The internal email dated February 25, 2009,
announcing the respondent’s departure was therefore sent to the employees
before the telephone conversation, not afterwards (paragraph 39). Furthermore,
contrary to the adjudicator’s assertion, the respondent never reported to the
applicants’ offices on February 27, 2009, to obtain the documentation
related to his departure, but instead asked for the documents during the
telephone conversation held on that date.
[31]
The timeline of events
not contradicted by the respondent is allegedly the following. On February 20,
2009, the respondent was informed that an investigation was underway. On
February 25, he tendered his resignation, turned in his keys, pass and
cellphone and left his workplace. That same day, Mr. Gillanders sent the
employees an internal email announcing the respondent’s resignation. On
February 27, during a telephone conversation between the respondent and
Mr. Gillanders (reproduced at pages 21‑23 of the preliminary decision),
the respondent asked to be sent his Record of Employment. On March 2, the
respondent reported back to work.
[32]
The respondents contend
that, as shown by the timeline of events, the applicant clearly resigned on
February 25, 2009. He is alleged to have taken specific action: he turned
in his keys, pass and cellular telephone and then asked for his Record of
Employment. What is more, he was absent from work between February 25 and
March 2. According to the applicants, these actions objectively confirm
the respondent’s intention to leave his job.
[33]
The applicants submit
that in confusing the dates on which the applicant took those specific actions,
the adjudicator reached a conclusion that is clearly wrong and unreasonable.
Respondent’s submissions
[34]
The respondent contends
that the adjudicator’s errors regarding the chronology of events do not make
his conclusions unreasonable. The respondent submits that the fact that the
internal email was sent bare moments after his departure shows singular, even
revealing haste by the applicants. The respondent states that the error regarding
the circumstances surrounding his request for the Record of Employment on
February 27, made over the telephone rather than in person, is minor.
[35]
The respondent further
submits that the adjudicator’s conclusion at paragraphs 42–45 shows that
the adjudicator properly understood the nature of the events which took place
over those few days. The respondent contends that he left his workplace on
February 25, after having faced unfounded criticisms and accusations,
because he no longer felt appreciated by the applicants. On February 26,
he stayed at home hoping to receive a telephone call from the applicants. The
respondent also submits that, when he spoke with Mr. Gillanders on
February 27, Mr. Gillanders did not make any mention of the email
sent to the employees announcing the respondent’s departure.
[36]
The respondent contends
that it is impossible to conclude that he intended to resign.
Analysis
[37]
There is no question
that the adjudicator confused the dates in his analysis of the timeline of
events. This does not necessarily mean that the adjudicator’s decision is
unreasonable. It makes no difference whether the respondent requested his
Record of Employment by telephone or in person.
[38]
The Court does not
agree with the respondent’s submission that it is impossible to conclude he had
the subjective intention to resign; the Court is of the opinion that the
respondent’s actions could support such a conclusion. He stated his intention
to resign, turned in his pass and other tangible work‑related items and
then failed to report for work for two or three days. He also asked for his
Record of Employment. However, it is admittedly possible to draw other conclusions
from the sequence of these events. The one drawn by the adjudicator is
therefore not unreasonable. The Federal Court of Appeal reminds us that an
adjudicator must consider the possibility that an employee’s actions in leaving
his or her workplace may result from momentary anger, not a firm intention to
resign from the employment.
[39]
In this case, although
the Court would not necessarily have reached the same conclusion as the one
arrived at by the adjudicator, his conclusion falls within the range of
possible outcomes, even conclusions, which he could reasonably draw from the
sequence of events. The adjudicator clearly explained how he arrived at his
conclusion and the factors he relied on. The applicants have failed to show
that there was a material error of fact that prevented the adjudicator from
reaching such a conclusion.
(c) Is the decision
reasonable?
Applicants’ submissions
(i) Stolen
ladder
[40]
The applicants submit
that the adjudicator, in his proportionality analysis of the appropriate penalty
for the theft of the ladder, considered only the mitigating factors (the low
value of the ladder, the applicant’s unblemished record, his age and his years
of service) and not the aggravating factors (the nature of the position held by
the applicant and his admission of having lied when confronted about the
ladder). The applicants contend that such factors are indispensible when it
comes to determining whether or not the relationship of trust was broken. The
applicants note that there is evidence that the respondent lied when he was
asked about the ladder (Applicants’ Record, Volume II at pages 391–92).
[41]
The applicants refer to
National Bank of Canada v Lepire, 2004 FC 1555 [Lepire], in which
the Court found that it was reasonable to expect more from an employee holding
an important position (paragraph 14). The applicants submit that the
respondent’s duties in this case mean that he was required to maintain as
strong a relationship of trust as in the banking industry. They quote the
following excerpt from Lepire (in which reference is made to Adjudicator
Du Mesnil in Banque Nationale du Canada c Salvant, DTE 96T‑1126,
page 23) and submit that this decision should apply in the case at bar:
[translation]
The result, therefore, is that in the banking industry especially
and above all, the relationship of trust between employer and employee must
always exist, not be undermined in the least and, if there is a breach or break
in this relationship of trust, this breach, this break, as the cases show, may
be considered a just cause of dismissal. The loss of confidence, which has the
immediate effect of ending the relationship of trust, results in most cases
from the attitude, deeds and actions, reluctance, lack of frankness, in the
employee’s conduct.
[42]
The applicants submit
that the adjudicator’s analysis of the highly aggravating circumstances is not
only unreasonable, but non‑existent.
(ii) Kickbacks
[43]
The applicants note
that the adjudicator accepted that Pneus SP had paid the respondent
approximately $2,000 in cash over the course of 2007‑2008 to obtain scrap
tires belonging to the applicants. The respondent testified having given this
amount to the applicants’ president, Mr. Terrigno, who denies having
received the money. The adjudicator applied a “principle of interpretation”
according to which, in assessing witnesses’ credibility, the adjudicator must
give credit to a positive statement in preference to a negative one. He
therefore concluded that the respondent’s testimony had to prevail (in
accordance with Lefeunteum v Beaudoin (1897), 28 SCR 89). The applicants
emphasize that this “principle” was strongly criticized by the Supreme Court of
Canada in World Marine & General Insurance Company Ltd v Léger,
[1951] 3 DLR 263, at pages 109‑122 of the Applicants’ Record. They
further contend that it is established in the case law that this “principle”
only applies when two witnesses are equally credible. The applicants submit
that at no point did the adjudicator analyze the two witnesses’ credibility.
[44]
The applicants also
submit that the adjudicator erred in failing to take into account the way the
respondent’s testimony evolved as the hearing progressed (for example, in
saying that there had been no cash payment in the transaction for the scrap tires
but then admitting that it had been a cash purchase and that money had been
given to him; he also changed his testimony regarding the number of times he
took fuel from the employer’s pump).
[45]
The applicants submit
that if the adjudicator had analyzed the two witnesses’ credibility, it is
clear that he would have had to prefer Mr. Terrigno’s testimony and find
that the respondent had indeed received kickbacks. According to them, this
error warrants the intervention of this Court.
[46]
The applicants further
contend that the adjudicator erred in fact in concluding that Mr. Marois,
president of Pneus SP, had told Mr. Terrigno in June 2008 that Pneus
SP was no longer interested in purchasing the scrap tires. The applicants
emphasize the importance of this statement, which relates to Mr. Terrigno’s
alleged knowledge of the “arrangement” (and therefore that he was aware that
the respondent was receiving money from Pneus SP for the scrap tires). The
applicants point to the fact that, in his testimony, Mr. Marois stated
having met with Mr. Terrigno only once, in June 2009, after the
respondent had left, not in June 2008, and testified that there was no
arrangement (Applicants’ Record, Volume VI, at pages 1200‑1201,
1210‑11). They contend that, at the hearing, Mr. Marois acknowledged
that an arrangement had been in place although the applicants had not been
parties to or even aware of it. The adjudicator’s conclusion was therefore
extraneous to the evidence before him.
[47]
Last, the applicants
contend that the adjudicator erred in criticizing them for having failed to
keep an inventory of the scrap tires sold and to perform forensic accounting
before asserting that there had been kickbacks. According to the applicants,
this criticism is unreasonable in light of the testimonies of the respondent and
Mr. Marois at the hearing, when they confirmed that there were no invoices
and that the tire inventory system, managed by the respondent, was in utter
shambles. According to them, these statements are important evidence of the
secrecy of the arrangement.
Respondent’s submissions
(i) Ladder
[48]
The respondent submits
that Lepire can be distinguished from the case at bar because of the
paragraphs below, which read as follows:
[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 (S.C.C.).
[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.
[49]
The respondent notes
that, in Lepire, it was a matter of a repeat transgression, which is not
the case here. He also notes that the adjudicator instead relied on McKinley.
[50]
The respondent contends
that there was no need for the adjudicator to reiterate all of the evidence, or
even make a decision free of mistakes (Colistro v BMO Bank of Montreal,
2008 FCA 154 at paragraph 8). He submits that the circumstances
surrounding the ladder’s disappearance were properly understood and analyzed in
the reasons for the adjudicator’s decision. Although another outcome is
possible, there is no error warranting judicial review. The respondent quotes
from the decision of Justice de Montigny in Defence Construction Canada Ltd
v Girard, 2005 FC 1177:
[49] The
applicant certainly attempted to persuade the adjudicator, with adjudication
awards in support, that theft of time by an employee was always punished by
dismissal. However, the adjudicator explained clearly why he did not feel
obligated to follow these decisions in this case (lack of specific information
on time absent, respondent’s state of health, vulnerability in the face of his
immediate supervisor, lengthy service record and competence of the employee,
condemnation of the employee without giving him an opportunity to explain
himself).
[50] Furthermore,
the Supreme Court clearly held, in McKinley v. British Columbia Telephone,
supra, that it is the responsibility of the trier of fact to determine
whether a dishonest act constitutes a valid cause for dismissal, taking into
consideration all of the circumstances. To quote the Court, “An effective
balance must be struck between the severity of an employee’s misconduct and the
sanction imposed” (para. 53).
(ii) Kickbacks
[51]
The respondent notes,
first, that the adjudicator took into account the applicants’ attempt to use
the applicant’s testimony and find contradictions or inconsistencies within it,
and that he concluded, at paragraph 39, that the evidence did not support
the applicants’ allegations in this regard.
[52]
The respondent is
questioning Mr. Terrigno’s credibility. He also notes that the adjudicator
had the advantage of hearing the parties’ testimonies at first hand for
five days and contends that the adjudicator’s decision falls within the
parameters acceptable in such matters.
[53]
The respondent contends
that the applicants failed to meet their burden of proof, and to prove the
theft. It was therefore open to the adjudicator to criticize them. The
respondent contends that, in fact, Mr. Marois’ testimony instead supports
the finding by the adjudicator.
Analysis
(i) Ladder
[54]
Regarding the theft of
the ladder, the Court agrees with the respondent that the Lepire decision
is distinguishable from the case at bar. Contrary to what the applicants
contend, a breach of trust in the management of a vehicle fleet can be distinguished
from a breach of trust in the banking sector, especially since the case in Lepire
concerned a repeated instance of misconduct and a conflict of interest.
[55]
The Court is of the
opinion that the adjudicator’s conclusion that the theft of the ladder did not
justify the respondent’s dismissal was reasonable in the circumstances. As in Girard,
referred to by the respondent, the adjudicator in this case clearly
distinguished the case at bar from decisions to the contrary. Each situation
turns on its specific facts and merits a reasonable analysis, and the
applicants have failed to show any error in the adjudicator’s analysis that
warrants the intervention of this Court. The adjudicator did not have to refer
to every piece of evidence, as, moreover, was established in Colistro.
(ii) Kickbacks
[56]
The Court acknowledges
that the adjudicator erred in applying a principle criticized by the Supreme
Court. The applicants are correct in submitting that this is a significant
shortcoming, since the adjudicator did not analyze the respective credibility
of the witnesses before him. It is unacceptable to prefer one person’s
testimony over another’s simply because the respondent testified, in the
affirmative, having given cash and Mr. Terrigno denied having received
that money. Accepting the respondent’s testimony because he said “yes” whereas
his employer said “no” is a major error tainting the adjudicator’s analysis of
the kickbacks.
[57]
The applicants quite
rightly point out the adjudicator’s significant error regarding the date of the
meeting between Messrs. Marois and Terrigno. As a result, he incorrectly
deduced that Mr. Terrigno was aware of the kickback payment arrangement in
June 2008, that is, before the complaint and the investigation that began
in February 2009. There is no evidence in the file that provided a basis
for the adjudicator to draw such a conclusion. This error goes to the very
heart of the dispute, that is, whether the applicants were aware that the respondent
was taking money for the scrap tires when they dismissed him. It is therefore
open to this Court to intervene in the decision made on August 19, 2010.
(d) Natural justice
Applicants’ arguments
[58]
The applicants submit
that the adjudicator states, in his analysis of the proportionality of the
penalty for the theft of the ladder, having taken into account the amount at
stake, the respondent’s age, his seniority and his spotless disciplinary
record. The applicants note that, however, at the hearing, they tried to file
in evidence three written disciplinary warnings given to the respondent between
2005 and 2007 (Applicants’ Record, Volume II, pages 279‑83). The
adjudicator refused the filing on the ground that the notices were irrelevant
to the dispute he was hearing. The applicants contend that this refusal by the
adjudicator is a breach of procedural fairness and a violation of the rules of
natural justice.
[59]
The applicants refer to
Université du Québec à Trois‑Rivières v Larocque, [1993] 1 S.C.R. 471 [Larocque] in which the Supreme Court dismissed the same line of
reasoning by an arbitrator. The arbitrator had thus failed to observe the audi
alteram partem rule.
Respondent’s submissions
[60]
The respondent argues
that, under paragraph 242(2)(b) of the Canada Labour Code,
adjudicators are masters of their own procedures and that the principle of the
relevance of evidence is the rule (Jennings v Shaw Cablesystems Ltd,
2003 FC 1206). According to the respondent, the three letters at issue are not
disciplinary warnings; instead, they address his incompetence. He contends that
situation in this case is entirely different from the one in Larocque. According
to the respondent, the reference to his clean record refers to his disciplinary
record, not his administrative record (which contained the warning notices at
issue). The respondent states that the matter of his incompetence was never
alleged as a ground for the dismissal, so it was open to the adjudicator to
disregard the letters.
[61]
In the alternative, the
respondent contends that, even if the Court finds that the principles of
natural justice were breached, the refusal had no bearing on the adjudicator’s
decision, and is therefore one of the limited exceptions in which “notwithstanding
the breach, the outcome on the merits would not have been any different” (B.R.E.S.T.
Transportation Ltd c Noon, 2009 FC 630 at paragraph 9).
Analysis
[62]
Upon reading the
letters concerned, the Court notes that they are not reprimands for
incompetence but, instead, as the applicants submit, disciplinary warnings. These
pieces of evidence should have been admitted to allow the applicants to show
that the respondent’s record was not spotless. The adjudicator’s conclusion on
the proportionality of the penalty for theft of the ladder could certainly have
been different.
[63]
The Court acknowledges
that the adjudicator violated procedural fairness in refusing to admit the
disciplinary warnings into evidence while relying on the respondent’s
purportedly spotless disciplinary file. This breach of the rules of procedural
fairness is a second ground for allowing the application for judicial review of
the adjudicator’s decision dated August 19, 2010.
JUDGMENT
THIS COURT’S JUDGMENT IS that
1.
For the above reasons,
the Court allows the application for judicial review of the adjudicator’s
decision dated August 19, 2010;
2. The Court dismisses
the application for judicial review of the decision dated March 23, 2010;
3. The Court refers the
decision dated August 19, 2010, back for redetermination by a different
adjudicator.
Without costs against the
respondent.
“André F.J. Scott”
Certified true
translation
Sarah Burns
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