Date: 20071031
Docket: T-657-07
Citation: 2007 FC 1130
Ottawa,
Ontario, October 31, 2007
Present:
The Honourable Madam Justice Tremblay-Lamer
BETWEEN:
NATIONAL
BANK OF CANADA
Applicant
and
MONIQUE
LAJOIE
Respondent
REASONS FOR JUDGMENT AND
JUDGMENT
Introduction
[1]
This is an
application for judicial review of a decision by the Arbitration Tribunal
established under section 242 of the Canada Labour Code, where
the adjudicator decided that the respondent had been unjustly dismissed by her
employer, the National Bank of Canada.
[2]
The
statement of facts is largely based on the affidavits filed by the applicant in
support of its application, which are contradicted in part by the respondent in
her affidavit.
[3]
However,
the overall situation may be summarized as follows.
Summary of facts surrounding the
dismissal
[4]
The
applicant hired the respondent on February 7, 1967. She was Director of
financial services at the Bank’s branch in Brossard at the time of her
dismissal on April 13, 2005.
[5]
The
respondent was on sick leave from December 12, 2001 to September 30, 2002.
[6]
After she
returned to work and in her last 40 months, the respondent received annual
performance evaluations bearing the words “partially satisfactory”.
Specifically, the employer reported complaints from seven clients; unfavourable
remarks by members of the banking team were also noted therein. Moreover, the
employer criticized her for being unprofessional on a number of occasions,
including a messy office, an aggressive tone, discussing her personal affairs
with clients, negative criticism about the Bank in the hallways, frequent
tardiness adversely affecting customer service and finally problems in terms of
the quality of her work. The performance assessment dated May 21, 2003, covering
the period from November 1, 2002 to April 30, 2003, also noted that Ms.
Lajoie’s quantitative performance in sales and business development was very
weak.
[7]
To address
these behavioural problems, the respondent’s supervisors followed a corrective
plan. Between April 30, 2003 and April 13, 2005, the respondent was subject to
the measures contained in the Bank’s corrective policy, composed of four
levels: (1) verbal warning from the employer, (2) written reminder from the
employer and a plan of action, (3) written reminder and reflection period with
a written undertaking from the employee to rectify her inadequate conduct and
(4) dismissal.
[8]
According
to the applicant, the efforts to rectify the respondent’s conduct were
unsuccessful in modifying her professional conduct, which led to her dismissal
on April 13, 2005.
[9]
In a
decision dated March 19, 2007, the adjudicator determined that applicant
had unjustly dismissed the respondent. The adjudicator ordered the applicant to
pay the respondent the salary lost since the date of her dismissal, to
withdraw the dismissal reference from her record and replace it with a
reference to her retirement, to pay all the legal fees of Ms. Lajoie’s
counsel incurred as a result of the arbitration.
[10]
The errors
accepted by the Court primarily involve the breach of the rules of natural
justice as well as errors in law. These errors are sufficient to justify the
intervention of this Court without it being necessary to decide on the errors
of fact where there are inconsistent elements.
Issues
[11]
1.
The standard of review.
2.
The
breach of the rules of natural justice.
3.
The
interpretation and application of the doctrine of culminating incident.
4.
The
employer’s burden of proof.
5.
The
assessment of the evidence.
6.
The
remedies awarded.
Analysis
1. The standard of review
[12]
It has
been consistently decided in the case law that a breach of the principles of
procedural fairness does not give rise to the application of the pragmatic and
functional analysis (see Sketchley v. Attorney General of Canada, [2006]
3 F.C.R. 392, [2005] F.C.J. No. 2056 (F.C.A.) (QL), at
paragraph 46; Moreau-Bérubé v. Nouveau-Brunswick (Judicial Council), [2002]
1 S.C.R. 249. The decision-maker’s obligation in a specific context will
be determined in accordance with the factors established in Baker v. Canada
(Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817, [1999]
S.C.J. No. 39 (QL). The courts must determine whether the
decision-maker respected the obligation of procedural fairness in the
circumstances of the matter. No deference is necessary.
[13]
In terms
of the merits of the adjudicator’s decision, the Federal Court of Appeal
applied the pragmatic and functional approach in H & R Transport Ltd. v.
Baldrey, [2005] FCA 151, [2005] F.C.J. No. 729 (QL), at
paragraphs 4-8 and determined that the appropriate standard of review for
decisions made by adjudicators in matters of unjust dismissal varies according
to the nature of the issue raised. When the issue pertains to determining the
appropriate common law principles in matters of unjust dismissal, the
correctness standard applies. However, when the issue involves errors of
fact, the appropriate standard is that of patent unreasonableness.
[14]
The
applicant submits that following the Supreme Court of Canada’s decision in Council of Canadians with Disabilities v. Via Rail
Canada Inc., [2007] S.C.R. No. 15, the unreasonableness standard must
be applied to errors of fact made by the adjudicator.
[15]
In this
regard, I adopt the comments made by Madam Justice Abella in this decision,
explaining the conceptual challenge of delineating the difference between what
is patently unreasonable and what is unreasonable since both concepts speak to
whether a tribunal’s decision is demonstrably unreasonable, that is, such a
marked departure from what is rational as to be unsustainable. She also states:
103 But whatever label is
used to describe the requisite standard of reasonableness, a reviewing court
should defer where “the reasons, taken as a whole, are tenable as support for
the decision” (Ryan, at para. 56) or “where ... the
decision of that tribunal [could] be sustained on a reasonable interpretation
of the facts or of the law” (National Corn Growers Assn. v.
Canada (Import Tribunal), [1990] 2 S.C.R. 1324, at pp. 1369-70, per
Gonthier J.) The “immediacy or obviousness” to a reviewing court of a defective
strand in the analysis is not, in the face of the inevitable subjectivity
involved, a reliable guide to whether a given decision is untenable or
evidences an unreasonable interpretation of the facts or law.
2. Natural justice
a. Evidence gathered
outside the hearing.
[16]
The
applicant submits that the adjudicator breached the rules of natural justice in
basing his decision on evidence gathered outside the hearing. In fact, at
paragraph 191 of the decision, the adjudicator refers to a conversation that he
had with Ms. Racine, the manager of the respondent, Ms. Lajoie,
outside the hearing. He explained:
[translation]
Finally, it is important that we talk
about the retirement. It is true that Ms. Racine did not talk about it in
her testimony. She spoke to me and it was entirely by chance that she pointed
out to me that Ms. Lajoie could retire, after I remarked on my surprise at
a dismissal after 38 years of service. It was outside the hearing while it was
the opposite for Ms. Pelletier and Ms. Proulx, while that statement
was made at the hearing.
[17]
The
applicant’s counsel points out that he had no knowledge of this conversation
before reading the decision. Further, contrary to what the adjudicator submits,
Ms. Pelletier and Ms. Proulx state in their affidavits that they did
not testify before him that Ms. Lajoie could retire.
[19]
As author
Yves Ouellette explains in Les tribunaux administratifs au Canada, Procédure
et preuve, Montréal, Les éditions Thémis, 1997, at page 305:
[translation]
It is repugnant to fairness that an
administrative tribunal would base its decision on information that is secret
or that is obtained outside the proceeding, without the knowledge of one party,
as this party would then be deprived of the opportunity to contradict. Unless
the organization is expressly authorized by law to proceed ex parte –
which is exceptional or generally subject to the consent of the parties –
specific information must not be received in the record in the absence of the
parties. In effect, a decision-maker must not take the initiative to carry out
a personal and private investigation in a matter before him, through for
example a secret or private conversation with a witness, a party or his agent.
In short, an administrative tribunal obtains information by receiving evidence
in the context of the hearing and with complete transparency. However, it must
be pointed out that the judicial reviewer will generally not intervene unless
the information received or obtained outside the hearing has caused prejudice,
unlike trivial information.
[20]
In this
case, the information obtained was not trivial since the adjudicator relied on
this evidence to order the applicant to retire Ms. Lajoie. The applicant
did not have the opportunity to make its submissions on this point, which
created a prejudice for it. There was therefore a breach of the rules of
natural justice on this point.
b. The failure to
consider relevant and critical evidence.
[21]
The
applicant also argues that the adjudicator breached the rules of natural
justice in refusing to consider relevant and critical evidence.
[22]
The
adjudicator’s obligation to take into account all of the relevant evidence is
provided under paragraph 242(2)(b) of the Canada Labour Code,
which states:
Powers of the adjudicator
(2) An
adjudicator to whom a complaint has been referred under subsection (1):
(b) shall determine the
procedure to be followed, but shall give full opportunity to the parties to the
complaint to present evidence and make submissions to the adjudicator and shall
consider the information relating to the complaint; and
[Emphasis added.]
[23]
Even
though this is not automatic, it is true that in certain cases the failure to
consider relevant evidence could have such an impact on the fairness of the
proceeding that we have no choice but to find that there has been a breach of
natural justice, Université du Québec à Trois-Rivière v. Laroque,
[1993] 1 S.C.R. 471, at page 491.
[24]
In this
case, the adjudicator completely rejected the evidence of the existence of
different complaints by the clients of the Bank against Ms. Lajoie, [translation] “since it was hearsay and even
more so because this employee had 38 years of service.”
[25]
First, the
fact that the respondent was a long-time employee cannot be a ground for
rejecting this critical evidence. Secondly, the adjudicator incorrectly
interpreted the notion of hearsay by confusing the existence of complaints that
are not hearsay with the basis of these complaints. The applicant received the
complaints, and the applicant had witnesses testify in that regard. The
evidence to the effect that seven of the Bank’s clients had complained of Ms.
Lajoie’s conduct was therefore undisputed. This fact was significant and
relevant since it was the primary cause for dismissal.
[26]
In regard
to the facts that gave rise to the complaints, the adjudicator could certainly
take into account the fact that it was hearsay. However, he did not have the
obligation to dismiss the evidence on this ground if it was relevant and there
was no blatant breach of natural justice. In fact, administrative tribunals
“are not bound by the strict rules of evidence applicable in criminal or civil
courts; they may, therefore, receive and accept hearsay evidence” Canada
(Attorney General) v. Mills, [1984] F.C.J. No. 917. In this
matter, the Federal Court of Appeal identified situations where hearsay
evidence would not be acceptable, for example in cases where the respondent has
not been informed of the evidence and as a result has not had the opportunity
to refute this evidence or proceed with a cross-examination.
[27]
I also
note that Ms. Lajoie admitted that three of the seven complaints were
founded. Even though she later denied her admissions, the adjudicator should
have taken them into account to assess her credibility.
[28]
It is my
opinion that this evidence had such an impact on the fairness of the proceeding
that I find that there was a breach of natural justice. This omission of
relevant facts also amounted to an error of law justifying the intervention of
the Court, Denis Lemieux, le contrôle judiciaire de l’action
gouvernementale, Publication CCH/ EMP 2. 961. Having dealt with
this issue under this heading, it need not be discussed again later on.
c. The adjudicator’s
bias
[29]
It is
settled law that the question that must be asked in the context of analyzing
the existence of bias or a reasonable apprehension of bias is: “what would an
informed person, viewing the matter realistically and practically – and having
thought the matter through – conclude” (Committee for Justice and Liberty v.
Canada (National Energy Board), [1978] 1 S.C.R. 369 (QL), at
paragraph 40).
[30]
After
carefully reviewing the adjudicator’s decision, I acknowledge that he useful
very colourful language establishing a certain bias vis-à-vis the applicant. It
is true that this attitude could have tainted his decision but I am not certain
that it meets the high burden for establishing the reasonable fear of bias.
Whatever the case, I need not make a finding since the decision is set aside
for other reasons and the matter will not be heard by the same adjudicator.
3. The
interpretation and application of the doctrine of culminating incident.
[31]
The
applicant contends that the adjudicator failed to consider the legal notion of
the culminating incident. According to this principle, an employer is justified
in proceeding with a dismissal following repeated wrongful acts even if the
ultimate act prompting the decision to be made does not amount to a serious
fault. In my opinion the applicant is correct on this point for the following
reasons.
[32]
According
to subsection 242(3) of the Code, the adjudicator is mandated to determine
whether the dismissal is unjust. In the context of this analysis, he may take
into account considerations like the seriousness of the immediate offence,
whether the negative conduct was repetitive, the history of the years of
service and employment record, whether the employer had previous unsuccessful
attempts of more moderate disciplinary measures, and finally whether the
employee appears to have been the subject of arbitrary and harsh treatment or
whether her discharge is in accord with the consistent policies of the employer
(Wm. Scott. and Co. (1977), 1 Can. LRBR 1, Wm. Scott & Co. (Re),
[1976] B.C.L.R.B.D. No. 98 (QL), at paragraph 14. This is a
non-exhaustive list of the factors which may be relevant in analyzing the facts
and deciding whether a dismissal is unjust, Kelowna Flightcraft Air Charter
Ltd. v. Kmet, [1998] F.C.J. No. 740 (QL), at
paragraph 19).
[33]
In
assessing negative and repetitive conduct, the doctrine of “the culminating
incident” was elaborated to assess in what circumstances it is appropriate for
the employer to take disciplinary history into account. The authors Donald J.M.
Brown and David M. Beatty, Canadian Labour Arbitration, Vol. 1 (The Cartwright
Group: Ontario, 2007), p. 7-143, explain:
. . . where an employee
has engaged in some final, culminating act of misconduct or course of conduct
for which some disciplinary sanction may be imposed, it is entirely proper for
the employer to consider a checkered and blameworthy employment record in
determining the sanction that is appropriate for that final incident. . . .
[34]
In this
case, the adjudicator noted the letter dated February 11, 2005, corresponding
to a “level 3” corrective warning giving the respondent until April 8 to
improve her performance. He did not mention however the fact that following a
client’s complaint, she called the client back to “tell him off”, which she had
done in the past with another client. This element was the culminating factor
leading to Ms. Lajoie’s dismissal and ought to have been considered by the
adjudicator.
4. The burden of proof
[35]
The
applicant argues that the adjudicator erred in interpreting the burden of proof
necessary in requiring a serious fault.
[36]
Pursuant
to sections 240 et seq. of the Code, the employer is bound to establish
that the dismissal was not unjust, i.e. that it was based on just and
sufficient cause. Therefore, there need not be a serious fault before the
employer’s can justifiably terminate the employment, Canadian Imperial Bank
of Commerce v. Boisvert, [1986] 2 F.C. 431 (QL), at paragraph 9.
[37]
In this
case, the adjudicator states at paragraph 192 that [translation] ”When an employee has had many
years of service, the employer must attempt to organize a proper departure for
her, despite everything, unless there is a serious fault” [Emphasis
added.]. He therefore misunderstood the burden of proof to be met by the
employer, which did not have to establish a serious fault to justify the
termination of employment.
5. The assessment of the evidence
[38]
The
applicant also identified several errors in the assessment of the evidence
before the adjudicator, which explains the numerous affidavits that she filed
in support of her application for judicial review, since the hearing before the
adjudicator was not recorded. Several errors bear on key factors, like
Ms. Lajoie’s admissions and the clients’ complaints. However,
Ms. Lajoie’s affidavit contradicts some of these factors. It is therefore
difficult for me to address them. However, as I stated above, the errors in law
identified as well as the breach of the rules of natural justice justify
setting aside the decision.
6. The remedies awarded
[39]
During the
pleadings before the adjudicator, counsel had jointly requested that he retain
his jurisdiction on the appropriate remedies, which was granted. Despite this,
the adjudicator decided to order the Bank to pay the respondent the salary lost
since Ms. Lajoie’s dismissal and to strike from the respondent’s record or
elsewhere the reference to the dismissal to replace it with a reference to
retirement.
[40]
In my
opinion, although the adjudicator had jurisdiction to award the relief, he had
to hear the parties’ submissions before deciding on this issue. Such an
omission amounts to a breach of the duty to act fairly.
[41]
I also
find that the adjudicator erred when he ordered the Bank to pay the
respondent’s legal fees. The case law is clear on this point. The reimbursement
of legal fees is justified only in exceptional circumstances (Banca
Nazionale Del Lavoro of Canada Ltd. v. Lee-Shanok, [1988]
F.C.J. No. 594 (QL)). In this matter, the Federal Court of Appeal
stated that there must be some degree of reprehensible conduct. In this case,
the adjudicator did not give any reason for his decision to order legal costs.
In the absence of exceptional circumstances, he was not justified in making
such an order.
[42]
For these
reasons, this application for judicial review is allowed. The adjudicator’s
decision dated March 19, 2007, regarding the unjust dismissal is set aside and
the remedies awarded as a result of this decision are accordingly set aside.
[43]
The
applicant suggests that I also reject the complaint filed by the respondent,
thereby substituting my decision for that of an adjudicator. I do not think
that I have such a power. In Bande indienne de Lac La Ronge v. Laliberté, [2000]
F.C.J. No. 640 (QL), the Federal Court of Appeal points out that the
Court seized with the judicial review of the adjudicator’s decision does not
have the authority to make the decision that the adjudicator should have made.
The matter will therefore be referred to another adjudicator for rehearing.
With costs.
JUDGMENT
THE COURT ORDERS that the application for judicial
review be allowed. The adjudicator’s decision is set aside as regards the
unjust dismissal as well as the relief granted as a result of this decision. The
matter is referred for redetermination before another adjudicator.
Danièle Tremblay-Lamer
Certified true translation
Kelley A. Harvey, BCL,
LLB
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