Date:
20130612
Docket:
T-1086-12
Citation:
2013 FC 642
[UNREVISED ENGLISH CERTIFIED
TRANSLATION]
Montréal,
Quebec, June 12, 2013
PRESENT: The
Honourable Mr. Justice Martineau
BETWEEN:
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NATIONAL BANK OF
CANADA
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Applicant
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and
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DORIS LAVOIE
and
LINE GAGNON
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Respondents
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REASONS
FOR JUDGMENT AND JUDGMENT
[1]
The
National Bank of Canada (employer) asked that an arbitral award allowing the complaints
of unjust dismissal of Doris Lavoie and Line Gagnon (complainants) be set aside.
The impugned decision was rendered on May 7, 2012, by an adjudicator appointed
under Part III of the Canada Labour Code, RSC 1985, c L-2 (Code).
[2]
Finding
that the complainants had committed the acts alleged against them and that punishment
was warranted, but that the disciplinary action taken by the employer was
excessive, the adjudicator set aside the dismissals and replaced them with one-month
suspensions without pay, in addition to ordering the complainants’ reinstatement
and compensation, hence this application for judicial review.
[3]
The
appointed adjudicator’s discretion to award [translation]
“any appropriate remedy”, when he found that the dismissal was unjust, was not
seriously challenged and results from the law (paragraph 242(4) of the
Code). It should be recalled that the finality of such an order, not subject to
appeal, is guaranteed by a broad privative clause (section 243 of the
Code).
[4]
To
start, it should be noted that this case does not raise any new principle of
law and that the parties agree that the legality of the impugned decision must
be reviewed on a reasonableness standard (Bank of Montreal v Payne, 2012
FC 431, at para 19 to 21). It is concerned mostly with the existence of
justification, transparency and intelligibility within the decision-making
process and with whether the decision falls within a range of possible,
acceptable outcomes which are defensible in respect of the facts and law (Dunsmuir
v New Brunswick, 2008 SCC 9, at para 47 (Dunsmuir)).
[5]
Normally
when an adjudicator must determine whether an employer has good and sufficient
cause for dismissing an employee, case law has established that three issues
may arise (Heustis v New Brunswick (Electric Power Commission),
[1979] 2 S.C.R. 768, at p 772). First, did the employee commit the impugned act? Second,
did this act warrant a disciplinary action by the employer? Third, if so, was
the act serious enough to warrant the dismissal?
[6]
Dismissing
an employee is the ultimate punishment. Generally, the employer must comply
with the principles of progressive discipline (King v Canada (Attorney
General), 2012 FC 488, aff’d 2013 FCA 131). Thus, an employee who has been
warned or suspended will have the chance to change any wrongful conduct. Of
course, there are exceptions to progressive discipline. The adjudicator must
assess the seriousness of the misconduct in the context of the existing
circumstances and the employee’s seniority and past performance as being
relevant factors.
[7]
The
seriousness of the misconduct may give cause for termination when the
relationship of trust has been irrevocably broken, case law favouring the
adoption of a contextual approach, particularly in matters of dishonesty. There
is nothing automatic and an effective balance must be struck between the seriousness
of the misconduct and the punishment imposed (McKinley v BC Tel, [2001]
2 SCR 161, at paras 48 to 57).
[8]
In
the banking world, particular importance is placed on the integrity of staff
and on respect for general guidelines and codes of conduct, a reflection of the
maintenance of public confidence. In this regard, the relationship of trust
between the employer and employee, like the banking institution and its
clients, is crucial (Lepire v National Bank of Canada, 2004 FC 1555; Deschênes
v Canadian Imperial Bank of Commerce, 2009 FC 799, aff’d 2011 FCA 216).
[9]
Nonetheless,
not all breaches to a code of conduct warrant dismissal. It all depends on the
circumstances. The adjudicator may consider the seriousness or repetition of
the breach as an aggravating factor. Moreover, he could also consider the
employer’s good faith and any other mitigating factor. For example, one may
rely on the employer’s past knowledge or tolerance. Each case must be examined
individually. The context and the environment may vary considerably from one
employer to another.
[10]
A
brief overview of the evidence is required before analyzing the impugned
decision and the main grounds for review raised by the employer. There are no
transcripts of the hearings. However, the parties filed before the Court affidavits
detailing the general content of testimony heard at the hearing and the
evidence and written submissions that were submitted at adjudication.
[11]
At
the time of their suspension with pay, then their dismissal, the complainants
each had more than 30 years of service. They had no disciplinary record and
always had satisfactory job performance and positive evaluations. The
complainants then worked at the exchange office on Saint-Jean Street in Québec,
one as customer service officer (more than 10 years) and the other as Senior
Head (more than 15 years). This is a bank branch unlike others; essentially, it
has a small counter where passers-by, tourists and surrounding businesses can
exchange currency with customer service representatives. Even more important,
the survival of the exchange office depends on being profitable, in other
words, on the volume of daily transactions. Moreover, it competes with several
other exchange offices operating in this popular tourist area of Old Québec.
[12]
During
their last year of service, the complainants had four immediate supervisors
including Edith Maltais, Director, Client Services, who began working in
May 2009. An internal investigation at the currency exchange was initiated
following the [translation] “complaint”
from a work colleague, Marcelle Charest, who met with Ms. Maltais in
July 2009. Ms. Charest explained that she was [translation] “sick of it” and that she was [translation] “tired of getting slapped
on the hand”. She complained of the complainants’ behaviour and of some
security practices. Until then, the complainants had considerable autonomy and
the complete trust of their supervisors. Moreover, no complaints were ever received
from clients. Ms. Maltais then supervised the exchange office from her
office located at the bank branch at 150 René-Lévesque Boulevard in Québec.
[13]
An
investigator working for the employer met separately with the three employees
concerned on August 12, 13 and 19, 2009, and collected [translation] “statutory declarations”. On
August 20, 2009, the complainants were advised by Ms. Maltais that
they were dismissed [translation] “for
reasons of which you are aware and that have been discussed with you”. Written
reasons for the dismissal were not provided to the complainants, but before the
arbitrator, the employer cited that the relationship of trust had been
irrevocably broken to justify its decision to terminate the employment of the
complainants (and of their work colleague who, however, does not dispute the
dismissal).
[14]
In
fact, the employer criticizes the complainants of having committed, over
several years, various breaches to the code of conduct and the standard
operating practices, which is, according to a witness for the employer, the [translation] “the law of the Bank”. In
the written argumentation submitted by the adjudicator’s employer, the
criticisms of the complainants are set out in four categories: security,
exchange rate, pricing and breaches to integrity and misrepresentations. During
the hearing of this application for judicial review, counsel for the employer
explained to the Court that these breaches are not all of the same seriousness
and do not all affect the complainants’ integrity, whether considered
separately or cumulatively, the employer was entitled to dismiss the complainants.
[15]
In
addition to submitting before the adjudicator the statutory declarations of the
three employees concerned collected by the investigator and various pieces of
documentary evidence, the employer also had the manager who made the decision
testify. In short, the employer argued that the combinations to the bank safes
and the branch key were mismanaged; there were repeated breaches in relation to
the division of cash and to the foreign exchange transaction statements; non-compliance
with the exchange rate in force and the billing of unjustified transaction fees;
and finally non-compliance of the procedure for declaring the differences in
tally, even [translation] “falsification
of documents” according to the manager. The employer insisted on the seriousness
of the misconduct and on its intentional, repeated and systemic nature, arguing
that in this case the principle of progressive discipline is not applicable.
[16]
For
their part, the complainants, who also testified at the hearing, do not see the
situation the same way. There are no grounds for dismissal—at most suspension. The
complainants minimized the so-called seriousness of the alleged breaches and, as
applicable, their repetitive nature—for example, whether they relate to
security or commissions paid to guides during a short period of time. Although
they recognize that some practices are non-compliant, management still had
taken appropriate security measures and had helped them to adjust their course.
The main problem is the lack of guidance. The complainants explained to the adjudicator
that they were always left to themselves; that they did not act dishonestly; that
the acts committed did not cause any harm to the employer and can be explained
by the specific constraints of the exchange office, while they regularly informed
their bosses of the exchange rates and that the transaction tapes were sent
every day to the administrative centre. In short, their supervisors were perfectly
aware of the situation and did nothing for years.
[17]
For
the complainants, their integrity and honesty is not at issue. These are [translation] “errors”, while the acts
that are alleged against them were committed in good faith and in the bank’s
interest. For example, they explained [translation]:
“In banking language, we call a fictitious transaction a transaction that resulted
from a clerical error and that would be used to balance the accounts. This
transaction was neither dishonest nor fraudulent and allowed them to balance
the accounts, while waiting for the missing piece to be found.” Moreover, during
the meeting of August 19, 2009, the investigator told complainant Lavoie: [translation] “there was no theft, no
fraud … small discrepancies …”. In addition, their immediate supervisor, Claude
Sauvageau, had been made aware at the time (2003 or 2004) that, for months,
they had [translation] “collected
… the commissions that the guides had negotiated with their clients”, a practice
that had stopped shortly afterward. In short, the complainants argued that
their dismissal is unjust and constitutes a disproportionate measure under the
circumstances.
[18]
In
the impugned decision, the adjudicator found that the complainants [translation] “violated the code of
conduct and the standard operating practices in performing their work”, but following
his analysis of all the evidence, he does [translation]
“not believe that the relationship of trust was irrevocably broken between the
employer and the complainants”. This finding of fact seems to rely on a body of
contextual elements drawn from the evidence in the record. According to the
adjudicator, the employer either had prior knowledge of the alleged breaches
and did not act at that time—which, incidentally, affirms the very detailed affidavit
of the complainants who related their testimony at the hearing—or was able to
lead the complainants to mistakenly believe that everything was fine and that
they could continue to act in this manner. This is a case where the employer showed
negligence.
[19]
In
particular, the adjudicator considered that the complainants did not have
sufficient guidance. For example, concerning the exchange rate policy, the
adjudicator found it [translation]
“surprising, to say the least, that the complainants’ practice, which existed
for a long time and was never concealed, was not discovered much earlier by the
employer during its inspections”. The adjudicator also noted that [translation] “if verifications had been
made regularly as expected, none of this would have happened. The complainants
would have been advised if they had made errors and corrected them”. In
passing, according to the evidence in the record, it seems that the employer
was already aware of the various security problems of the exchange office if
this fact was not expressly mentioned in the adjudicator’s analysis.
[20]
The
adjudicator pointed out that the complainants [translation]
“were left to themselves, without supervision… managed the exchange office so
that it would function” and that they [translation]
“tried to make the exchange office profitable, to increase the volume of
transactions”. In fact, the adjudicator found in its decision that the
complainants [translation] “did
not act to rob the bank and accumulate wealth” and that they [translation] “acted thinking that they
could act differently from the standard operating practices so as to make their
lives easier and increase the exchange office’s volume of transactions”. Even
if the complainants violated certain rules, the adjudicator rejected the
employer’s argument that it could dismiss the complainants because the
relationship of trust was irrevocably broken. This is a case where progressive
discipline applies.
[21]
In
short—I summarize the essential elements of his reasoning—the adjudicator did not
see in the complainants’ practices [translation]
“fraudulent” or “dishonest” behaviour as the employer claims. Otherwise, he
would have expressly noted it in his decision and would have confirmed their
dismissal. Further, the adjudicator took the trouble to describe the breaches
in question as [translation] “management
decisions that were not theirs to make” or that [translation] “differed from the standards determined by the
employer”, hence the necessity for punishment—even if the relationship of trust
had not been irrevocably broken.
[22]
In
the adjudicator’s view, the complainants did indeed act improperly, but their
dismissal was a disproportionate measure in the circumstances, given that there
was negligence by the employer, that the complainants did not act with a
dishonest purpose or to accumulate wealth and that they had wrongly presumed
that the employer supported their ways of doing things to maintain the exchange
office’s good performance. In the circumstances, the adjudicator found that
one-month suspensions without pay were sufficient. It ordered the employer to
reinstate the complainants and compensate them from any loss incurred, where
appropriate.
[23]
Saying
that he was dissatisfied not only with the remedy—a one-month suspension
without pay was not the appropriate disciplinary action but the complainants’ outright
dismissal was—but also with the sufficiency of the adjudicator’s reasons, the
employer now asks the Court to intervene. The employer repeated before me the
thrust of the argument that was rejected by the adjudicator, starting with the
claim that [translation] “the
relationship of trust was broken”. The employer submits that the complainants’ practices
[translation] “unquestionably
constitute dishonest behaviour”, while [translation]
“only the dismissal can strike a balance between the seriousness of the
breaches and the appropriate punishment”.
[24]
In
addition, the employer claimed before me that the adjudicator erred in finding
that the complainants’ breaches did not cause financial losses. In fact, the
employer said that he submitted clear and uncontradicted documentary evidence on
this topic (which the complainants deny). The employer also disputed the
adjudicator’s finding that he was negligent in the supervision and guidance of
the complainants. In any case, although this lack of supervision could be a
mitigating factor, this factor alone should not have the importance that the
adjudicator gave it in this matter, especially considering the banking context.
Therefore, the adjudicator’s finding is unreasonable.
[25]
I
must dismiss the employer’s claims. In doing so, I agree in substance with the main
reasons for dismissal developed by the complainants in their written memorandum
and that were repeated in a general manner for their counsel at the hearing.
[26]
I
repeat: according to the employer’s claim, the adjudicator did not have any
other choice here than to find that the relationship of trust had been
irrevocably broken. In sum, the employer asked me to reassess the evidence and simply
set aside the impugned decision without referring the matter back to another adjudicator,
because dismissal is the only alternative here. Thus, we see that the employer criticizes
the merit of some of the adjudicator’s findings of fact and the weight that he
could have given to certain relevant facts.
[27]
If
there is only one acceptable outcome, dismissal, this like saying that the standard
of correctness should guide our analysis. However, it is clear that the
standard of reasonableness should be applied in this case. Moreover, the Supreme
Court teaches that the reasons for the impugned decision must be reviewed as a
whole and in context, while the reviewing court may, if it deems it necessary, review
the record to assess the reasonableness of the outcome: Newfoundland and
Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board), 2011
SCC 62, [2011] 3 S.C.R. 708 at paras 9 and 15 (Newfoundland); Construction
Labour Relations v. Driver Iron Inc., 2012 SCC 65, at para 3. That is
what the Court humbly attempted to do.
[28]
In
this case, the intelligibility of the reasons and the transparency of the decision-making
process are not a problem. The impugned decision includes some 39 pages; after
a summary of the evidence (pages 2 to 30) and the arguments of the parties
(pages 30 to 32) are the general reasoning and the main findings of the
adjudicator (pages 32 to 38). The adjudicator explained well why the dismissal
was unjustified. His reasoning relies on the evidence in the record. In this
case, we cannot find that there is only one acceptable outcome in this matter.
[29]
It
was exclusively up to the adjudicator to consider the issues surrounding the
dismissal, which had been the subject of considerable discussion by the
parties. Needless to say, the adjudicator spent nine days hearing the witnesses
and the lawyers’ submissions. He considered all of the evidence in the record
and, as an expert, he is presumed to know the general principles in disciplinary
matters. The appointed adjudicator chose the option that appeared the most reasonable
in the circumstances, considering the evidence in the record and the relevant factors.
He is thus better placed than the Court to determine whether the relationship
of trust was broken and whether the dismissal was an exaggerated measure in the
circumstances. The fact that the adjudicator may have neglected to mention in
his analysis evidence, an argument, a statutory provision or a precedent is not
sufficient to invalidate the impugned decision. In fact, a decision-maker is
not required to make an explicit finding on each constituent element, however subordinate,
leading to his final conclusion (Newfoundland at para 16).
[30]
In
my view, there is no serious reason to warrant the Court’s intervention in this
case. I repeat, this is not an appeal but a judicial review. Even if the Court
does not necessarily agree with the final outcome, the decision-making process
is not tainted with any fundamental error. Having closely read the reasons of
the impugned decision in light of the evidence in the record, I am of the view
that the adjudicator did not ignore the principles drawn from case law. Even if
another adjudicator may have arrived at a different outcome, I cannot find that
the general reasoning of the appointed adjudicator is arbitrary, capricious or
unreasonable or that his findings cannot be supported by the evidence.
[31]
In
closing, the appointed adjudicator’s overturning of the dismissals (including
their replacement by suspensions without pay) was thus an acceptable outcome in
respect of the law and the evidence in the record. Counsel for the respondents
stated during her oral reply that since this application for judicial review was
filed, the employer closed the exchange office on Saint-Jean Street. Since the issue
of reinstatement was not raised by the employer and that the issue of a future
closure of the exchange office was not specifically brought to the adjudicator’s
attention, I do not have to consider this element, which is subsequent to the
impugned decision.
[32]
For
these reasons, this application for judicial review, which is unfounded in this
case, must be dismissed by the Court.
[33]
Given
the outcome, the costs will be awarded to the respondents.
JUDGMENT
THE
COURT ORDERS AND ADJUDGES that the application for judicial review is
dismissed with costs.
“Luc Martineau”
Certified true
translation
Catherine Jones,
Translator
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