Toronto, Ontario, November 2, 2005
PRESENT: THE HONOURABLE MADAM JUSTICE HENEGHAN
BETWEEN:
and
REASONS FOR ORDER AND ORDER
[1] The Royal Bank of Canada (the "Applicant") seeks judicial review of the decision of Mr. Brian Noonan, sitting as an Adjudicator (the "Adjudicator") appointed pursuant to section 242 of the Canada Labour Code, R.S.C. 1985, c. L-2, as amended (the "Labour Code"). In that decision, the Adjudicator determined that the Applicant had unjustly dismissed Ms. Darlene Siu (the "Respondent") from her employment and ordered the Applicant to pay damages for loss of income
and emotional distress, as well as pre-judgment interest and costs. Further, the Adjudicator ordered the Applicant to provide a letter of reference for the Respondent, outlining her thirty years of service and omitting any reference to her dismissal.
[2] The decision was communicated to the parties on July 8, 2004. The Applicant issued its Notice of Application on August 6, 2004, seeking the following relief:
1. An Order quashing the Decision;
An Order dismissing the complaint or, in the alternative, referring the matter back for re-determination by another adjudicator, in accordance with such directions as the Court considers to be appropriate in the circumstances of this case, to determine whether the Respondent's dismissal by the Bank was justified in the circumstances, and in particular, whether the Respondent (a) improperly accepted gifts in violation of the Bank's Code of Conduct; and (b) provided untruthful and evasive explanations concerning those transactions;
2. In the further alternative, an Order quashing the award of damages for emotional distress or, in the alternative, reducing damages for emotional distress;
3. In the further alternative, an Order quashing the award of damages for vacation pay or, in the alternative, reducing damages for vacation pay; and
4. Costs, pursuant to Rule 400 of the Federal Court Rules, 1998.
BACKGROUND
[3] The Applicant is a chartered bank, constituted under the laws of Canada with branches across the country, including a branch in Comox, British Columbia. The Respondent was a Customer Service Representative/Cash Control Officer, known colloquially as a bank teller, at the Comox branch. As the result of a complaint made between February and April 17, 2003, the Respondent was called for an interview with Area Manager, Ms. Jane Black and Mr. Paul E. Crowther, a member of the Corporate Investigation Services on April 17, 2004. The Respondent signed an "Acknowledgment of Rights" form, dated April 17, 2003.
[4] The Respondent was questioned by Mr. Crowther about the history of her relationship with Mr. Allan Birchall, a customer of the Applicant, including the receipt of gifts from him and her involvement with his banking transactions. The Respondent waived, by signing the Acknowledgment of Rights form, her right to have a representative attend with her.
[5] The Applicant also described the history and nature of her relationship with Mr. Birchall. She had met him and his wife some four or five years before, that is 1998-1999. She was invited to lunch at their home and went there a few times. Following the death of his wife in 2001, the Applicant continued to visit Mr. Birchall and had lunch with him in his home nearly every working day, over two years. This amounts to between 400 and 500 visits over the two year period.
[6] The Applicant said that Mr. Birchall had spoken of giving her a monthly gift in appreciation for her visits. At the interview the Applicant said that Mr. Birchall had raised this subject about a year to eighteen months before. Initially, Mr. Birchall spoke of leaving the gift in his Will. The Applicant said that she told Mr. Birchall that she was not visiting him for money but to keep him company. She also said that she told him that she was unsure if she could accept such a gift. She
read the Code of conduct and concluded that the gift had nothing to do with her employment with the Applicant and that it was not "bank related".
[7] The Applicant, in the interview, also said that she had consulted other employees about the propriety of accepting a monetary gift and that together with her co-employees, she had consulted the Code of Conduct. She said that she did not consult her manager. The Applicant received a cheque dated February 3, 2003 in the amount of $5,000 and negotiated the cheque on February 3, 2003, depositing it in her account.
[8] During the interview, the Applicant was also questioned about the receipt of other gifts from Mr. Birchall. She acknowledged receipt of discarded clothing and old jewellery, as well as a glass ornament which she subsequently returned. She also said that she had given Mr. Birchall gifts at Christmas, such as CDs. She did not address the subject of two other cheques, each in the amount of $200, dated July 7, 2001 and October 18, 2002, until Mr. Crowther asked about them. The Applicant said that the first cheque was a birthday gift and the second, for Christmas. The Applicant said that she did not receive all cash gifts from Mr. Birchall.
[9] The Applicant was also asked about banking transactions that she did for both Mr. Birchall and family members. She used to bring money to Mr. Birchall at his home and then get the signed withdrawal slips, as well as taking cheques from him to be cashed at the Bank and then bring the
money to him. The Applicant acknowledged that her actions in processing cheques and deposits for her son was contrary to banking policy.
[10] At the end of the interview, the Applicant dismissed the Respondent from her employment, effective immediately. The Applicant cited two grounds for the dismissal, the first relating to the improper acceptance of gifts by the Respondent, contrary to and in violation of the Applicant's Code of Conduct, and the second ground relating to the manner of the Respondent's answers during the interview. The Applicant found the Respondent to be untruthful and evasive. The dismissal was confirmed in a letter dated April 25, 2003.
[11] The Respondent filed a complaint pursuant to Part III of the Labour Code, on June 30, 2003, alleging that she had been unjustly dismissed. In her complaint, the Respondent outlined the history of her relationship with Mr. Birchall and the circumstances concerning the monetary gifts.
[12] The complaint proceeded to a hearing before the Adjudicator in Campbell River, British Columbia. A number of witnesses testified, including the Respondent, the customer, a nephew of the customer, Ms. Lachappelle and Ms. Barb Bonneville, a Human Resources Advisor with the Applicant. Exhibits entered at the hearing included a transcript of the interview that was conducted on April 17, 2003, copies of the cheques that were accepted by the Respondent, and a copy of the Applicant's Code of Conduct.
[13] The Adjudicator decided that the Respondent has been unjustly dismissed and awarded damages. He found that the Respondent had approached three senior employees at the Comox branch of the Royal Bank, with whom she discussed the propriety of accepting the $5,000 gift from Mr. Birchall. The Respondent had not approached her manager and the Adjudicator characterized this as an "unwise" choice on her part, justifying a 20% reduction in her award of damages. The Adjudicator found that the bank's customer had been a most impressive witness and specifically made the finding that the Respondent had been a credible witness. He did not make adverse credibility findings in respect of other witnesses but in his reasons, singled out both Mr. Birchall and the Respondent for particular mention.
[14] The Adjudicator made no specific finding with respect to the Code of Conduct but concluded, generally, that the Applicant had unjustly dismissed the Respondent.
OVERVIEW OF SUBMISSIONS
i) The Applicant
[15] The Applicant raised a procedural matter, that is an alleged breach of procedural fairness flowing from the failure of the Adjudicator to permit re-examination of a witness, that is Ms. Teri Lachappelle. Counsel for the Applicant had asked this witness whether she had told the Respondent that the Code of Conduct did not apply to tellers. Ms. Lachappelle answered in the negative. Counsel for the Respondent then asked Ms. Lachappelle if she thought that certain Articles, that is Articles 11 and 12, were confusing and the witness gave a positive answer. The Adjudicator did not permit counsel for the Applicant to re-examine on this point.
[16] The Applicant argues that this amounts to a breach of procedural fairness in the conduct of the hearing and argues that this is an error reviewable on the right of patent unreasonableness, relying in this regard on the decision in Air Canada v. Davis (1994), 72 F.T.R. 283 (T.D.).
[17] The Applicant further submits that this error was compounded by the Adjudicator's reliance on Ms. Lachappelle's answer in cross-examination. At paragraph 10 of the decision, he held as follows:
I fully accept the uncontradicted evidence of Ms. Siu that she and her confidants immediately senior to her, the staff members which as stated above, she consistently turned to and relied upon for day to day advice and assistance, found that the provisions on page 11 of the Code of Conduct were at best confusing.
[18] The Applicant also argues that the Adjudicator made erroneous findings of fact, in a perverse or capricious manner or without regard to the material before him. In particular, the Applicant submits that the Adjudicator's finding that Mr. Birchall was entirely credible was perverse, in the face of clear and uncontradicted evidence to the contrary. Where the evidence of two witnesses directly conflicts, both cannot be found to be "entirely credible".
[19] In this case, the evidence given by the Respondent and Mr. Birchall was in direct conflict on a number of occasions during the course of the hearing. For example, Mr. Birchall testified that he filled out the $5,000 cheque, whereas the Respondent's evidence was that she filled it out for him. Mr. Birchall also testified that it was his idea to write the June 2003 letter in support of the Respondent and that the letter was written in his own words. However, the Respondent gave evidence that she requested the letter, having received advice from a lawyer, and that she prepared the letter which Mr. Birchall subsequently signed.
[20] As well, the Applicant argues that there was clear evidence that Mr. Birchall's testimony was tailored specifically to assist the Respondent. At one point during the hearing, according to notes of counsel, Mr. Birchall responded to counsel for the Respondent in the following terms:
Did you not get satisfaction out of my last reply; give me what you want and I'll try to get to your satisfaction.
[21] The Applicant also argues that there were conflicts between the evidence of the Respondent and Ms. Lachappelle. The Respondent testified that Ms. Lachappelle had advised her that the Code of Conduct did not apply to tellers. However, Ms. Lachappelle did not give any such evidence. The Applicant submits the Adjudicator failed to give any consideration to this contradiction in the evidence, in his decision.
[22] The Applicant further argues that the Respondent's evidence is called into question as a result of her answers given to the bank's investigator during the April 17, 2003 interview. Specifically, the Respondent said that the $5,000 cheque was the only gift she had received from
Mr. Birchall, however, when confronted clear evidence to the contrary, she admitted that there were other cheques, as well as other items, that she had received from him.
[23] In view of these considerations, the Applicant argues that the Adjudicator's findings of fact with respect to the credibility of the Respondent were clearly erroneous and made without regard to the material before him. This error goes not only to the credibility finding but also to the Adjudicator's determination that the grounds of dismissal, based on the Respondent's dishonesty and evasiveness, were unfounded.
[24] Next, the Applicant argues that the Adjudicator committed a reviewable error in his assessment of the evidence of Noreen Galeazzi. At paragraph 9 of his decision, the Adjudicator found as follows:
Her testimony was that she first approached Noreen Galeazi [sic] and they together studied the Code of Conduct and concluded that although it was not clear, it did not appear to apply to the present situation because the gift was in a personal and not banking context. However Ms. Galeazi [sic] suggested that Ms. Siu should get further opinions.
[25] The Applicant submits that the Adjudicator's finding was made in a perverse or capricious manner since there was no evidence presented at the hearing to support such a finding. The evidence of Noreen Galeazzi was contained in an agreed statement of facts. That statement of facts is silent as to whether the Respondent and Ms. Galeazzi had studied the Code of Conduct and drew
any such conclusions regarding its application. Further, no such evidence was adduced in the Respondent's evidence, either in direct or cross-examination.
[26] Third, with respect to the Code of Conduct, the Applicant submits that the Adjudicator's finding that the Respondent and her confidants found it to be confusing was made in a perverse and capricious manner, and without regard to the evidence before him. The Respondent testified that Ms. Lachappelle told her that the Code of Conduct did not apply to tellers. However, the Respondent did not give evidence that any other employee had so advised her. Further, the Respondent's evidence on this issue was clearly contradicted by the evidence of Ms. Lachappelle. The Applicant argued that, in his reasons, the Adjudicator suggests that more than one staff member advised the Respondent that the Code of Conduct did not apply to tellers but the Respondent's evidence is to the effect that only Ms. Lachappelle made such a statement.
[27] Further, the Applicant submits that it was patently unreasonable for the Adjudicator to accept that proposition despite the evidence that the Respondent was given a copy of the Code of Conduct annually and had to sign a form acknowledging that she had read it. The Applicant argues that there was no evidence submitted to indicate that the Code of Conduct did not apply to the Respondent.
[28] Fourth, the Applicant notes that the Adjudicator commented that the Bank's interview of the Respondent was akin to a "police interrogation calculated to trip up a criminal rather than an employee of thirty years ... Ms. Siu was given no time to prepare herself for the barrage of questions during the two hours of intense cross-examination."
[29] The Applicant submits that the transcript of the interview was entered as an exhibit at the hearing before the Adjudicator and a careful reading shows that the interview was of an entirely appropriate nature, lasting approximately one hour and 15 minutes. The Respondent was asked direct and straightforward questions. Further, the Respondent was asked if she had reviewed the Acknowledgement of Rights form and was clear about it, and the purpose of the interview. She agreed that she had read it and she did understand the nature and purpose of the interview. At the hearing before the Adjudicator, the Respondent testified that she was presented with an Acknowledgement of Rights form, which she had signed and that she must have been aware that she was free to terminate the interview at any time.
[30] The Applicant argues that the Adjudicator erred in law by failing to address a central legal question, specifically, whether the Respondent=s conduct in accepting the $5,000 cash gift from Mr. Birchall was a breach of the Code of Conduct. Applying the pragmatic and functional approach to sections 240-243 of the Labour Code, the Applicant submits that the courts have consistently applied a standard of patent unreasonableness to matters arising within the jurisdiction of an adjudicator, including the question of "the existence of good and sufficient cause of dismissal"; see Air Canada, supra and Rogers Cablesystems Limited v. Roe (2000), 4 C.C.E.L. (3d) 170 (F.C.T.D.).
[31] In the present case, the Adjudicator failed to provide an interpretation of the Code of Conduct and did not rule as to whether there had been a breach as a result of the Respondent's actions. Rather, he found that the Respondent and her co-workers found the provisions of the Code of Conduct to be confusing and that such provisions generally did not apply to bank tellers. In this regard, the Adjudicator held as follows:
If the Bank hopes to rely on documents such as this to justify the termination of employees, particularly long tenured employees, then it must be sure that the employee is not only familiar with the document but knows and understands its content and impact; this would almost certainly entail workshops or training sessions. It is submitted that handing out a copy annually and instructing the employee to read it will not relieve the burden particularly if the potential result of a demonstrated failure to understand it is dismissal.
[32] The Applicant submits that the wording of the Code of Conduct is clear on its face. The relevant provision of that Code states as follows:
** • You may supply or accept modest gifts, favours, entertainment or services provided they:
- do not consist of cash, bonds, or negotiable securities
[33] The Applicant argues that the Code of Conduct has been interpreted and applied in a number of decisions which were argued before the Adjudicator. It has been found to form part of the conditions of employment of Royal Bank employees, pursuant to the decision in Alleyne v. Royal Bank of Canada, [1998] C.L.A.D. No. 804. The Applicant further submits that numerous adjudicators have concluded that the Bank's practice of providing the Code of Conduct to its employees on an annual basis and requiring their acknowledgment of receipt and review of the Code of Conduct is sufficient that employees are familiar with its content; see M. v. Royal Bank of Canada, [2000] C.L.A.D. No. 149; Cowan v. Royal Bank of Canada, [2003] C.L.A.D. No. 292; Alleyne, supra; Evans v. Royal Bank of Canada, [1996] C.L.A.D. No. 1125; and Hallingham v. Royal Bank of Canada, [1995] C.L.A.D. No. 535.
[34] The Applicant argues that the Adjudicator's decision addresses only the Respondent's alleged understanding of the Code of Conduct and provides no interpretation of the document. The Applicant argues that this was precisely the question before the Adjudicator and that the Adjudicator committed a reviewable error when he confined his analysis to the Respondent's subjective state of mind, rather than considering whether she had breached the Code.
[35] Next, the Applicant submits that the Adjudicator erred by failing to address whether the Respondent was justified in failing to consult the Code of Conduct in respect of the two $200 cheques and the implications of such a failure to his assessment of her credibility. On her own evidence, the Respondent did not consult the Code of Conduct or her co-workers with regard to accepting the two $200 cash payments. Further, during her interview with the Bank's investigator, the Respondent denied that she had received any other cheques or money from Mr. Birchall until she was presented with evidence of those payments.
[36] The Applicant submits that the Adjudicator did not consider the Respondent's actions with respect to these cheques in determining whether she had been unjustly dismissed and rather, focused
on her actions in accepting the $5,000 cheque. The Applicant submits that this constitutes an error of law.
[37] The Applicant argues that the Adjudicator, having found that the Respondent breached her duty as an employee in failing to consult with her manager, erred in law by failing to apply this breach to the question of whether she had been unjustly dismissed by the Bank. Rather, the Adjudicator applied this breach solely in relation to the question of quantum of damages and found as follows:
On Ms. Siu's own evidence, she admitted that she did not follow up on the suggestion by one of her confidants that she consult with the Manager. This may have been unwise in retrospect, but it is not unreasonable to conclude that by this time she considered that discussion on the matter had been exhausted. However, this failure must be considered in assessing damages.
[38] The Applicant submits that the Respondent was responsible for being aware of the terms of the Code of Conduct and that Code clearly advises employees to consult their managers or the key contacts listed if they are uncertain about a course of action. The Applicant argues that the Respondent's disregard for the clear wording of the Code of Conduct and of the advice of her co-worker, whom she trusted to give her advice, was clearly a breach of Code of Conduct which in and of itself was sufficient to justify her dismissal. Consequently, the Applicant argues that the Adjudicator's position to reduce the quantum of damages by 20%, rather than uphold the termination, was patently unreasonable.
[39] The Applicant further argued that the Adjudicator erred in law in awarding damages for emotional distress to the Respondent in the amount of $8,000, in the absence of evidence establishing the elements of emotional distress and without any medical evidence. In addressing this lack of evidence, the Adjudicator wrote as follows:
Counsel for the Bank has argued that I require professional medical evidence substantiating this amount. Such evidence was not available to the hearing. I feel that Ms. Siu's evidence is adequate and I do not feel that corroborating medical evidence is necessary because of the short term nature of the health problems which occurred.
[40] Similarly, the Applicant argues that the Adjudicator erred in law in awarding damages for vacation pay in the absence of evidence of loss or expense associated with the lost vacation benefits or a demonstration that the Respondent actually lost the opportunity to take vacation during the severance period. The only evidence submitted at the hearing was that the Respondent had received five weeks of vacation with the Bank and at her new place of employment, she received two weeks.
RESPONDENT'S SUBMISSIONS
[41] The Respondent argued that, given the presence of a privative clause in section 243 of the Labour Code, the decision of the Adjudicator is subject to review on a very high standard, that is the standard of patent unreasonableness. Relying on Kelowna Flightcraft Air Charter Ltd. v. Kmet (1998), 149 F.T.R. 246 (T.D.), the Respondent submits that this standard means that the decision should stand unless it cannot be rationally supported by enabling legislation and justice requires the intervention of the Court. The standard of patent unreasonableness is a very strict test, as discussed in Canada (Attorney General) v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941 and Paccar of Canada Ltd. v. Canadian Association of Industrial Mechanical and Allied Workers, Local 14 et al (1989), 62 D.L.R. (4th) 437 (S.C.C.).
[42] In response to the Applicant's argument concerning a breach of procedural fairness flowing from the Adjudicator's refusal of re-examination, the Respondent argued that Ms. Lachappelle was called as a rebuttal witness on a very limited basis. As well, the concern raised by the Applicant relates to the evidence that was not significant to the Adjudicator's decision.
[43] As a preliminary matter, the Respondent notes the inherent difficulties in assessing the Adjudicator's findings of fact in this case, where there is no available transcript. The Respondent recognizes that notes prepared by counsel for the Applicant during the hearing are available but says that this evidence is understandably cryptic and difficult for anyone other than the author to interpret.
[44] With respect to the Adjudicator's findings of credibility, the Respondent submits that a great degree of deference is to be granted in this regard. As the trier of fact, the decision-maker is in the best position to assess the credibility of a witness' testimony; see Housen v. Nikolaisen, [2002] 2 S.C.R. 235. The Respondent argues that the contradictions between the evidence of Mr. Birchall and the Respondent at the hearing, relied upon by the Applicant, are matters of detail which do not impact upon the real issues before the Adjudicator. She argues that what was crucial to the Adjudicator's determination was why Mr. Birchall made the gift and whether he sought any banking advantage as a result of that gift.
[45] The Respondent argues that minor variations in the specific evidence of one of her colleagues, that is Ms. Lachappelle, does not detract from the Adjudicator's generalized conclusion that she spoke to three of her colleagues and arrived at a conclusion that the Code of Conduct did not apply to bank tellers. Further, in response to the Applicant's arguments concerning the investigator's interview with the Respondent, it is submitted that the Adjudicator specifically commented on that evidence in his reasons. He described the circumstances of the interview, including the fact that the Respondent had not been given time to prepare herself. He found that rather than being dishonest in her answers, the Respondent was confused and bewildered and did her best to be truthful in a stressful experience.
[46] As for the evidence of Noreen Galeazzi, the Respondent argues that no one testified that she and Ms. Galeazzi studied the Code of Conduct together. The evidence is clear that the Respondent spoke with Ms. Galeazzi about her receipt of the $5,000 cheque. She argues that if the Adjudicator erred in naming Ms. Galeazzi, instead of another of her colleagues, this is insufficient to lead to the conclusion that his general findings of fact were made in a perverse or capricious manner.
[47] The Respondent argues that the interpretation of the Adjudicator that the Respondent and her colleagues concluded that the provisions of the Code of Conduct did not apply to bank tellers was confined to receipt of "business gifts". She submits that there was no suggestion made that the entire Code of Conduct did not apply to bank tellers. Furthermore, she argues that whatever determination was made by her and her colleagues with respect to the applicability of those provisions of the Code of Conduct does not determine the real question before the Adjudicator, whether her dismissal was unjust.
[48] Next, with respect to the investigatory interview, the Respondent submits that on the basis of her testimony before the Adjudicator, as recorded in note form by Applicant's counsel, she confirmed her state of mind during the investigator's interview. Consequently, the Adjudicator was free to make the findings that he did relative to the Bank's interview process.
[49] The Respondent submits that the ultimate question before the Adjudicator was whether her termination was unjust, not whether there was a breach of the Code of Conduct. The Adjudicator considered the history of the Respondent's employment with the Applicant, the circumstances surrounding the gift, the ambiguity of the Code of Conduct and the Bank's reaction, and concluded that the termination was unjust. The Respondent argued that the Adjudicator's decision is not deficient nor was it made without jurisdiction, simply because he did not expressly state whether there was a breach of the Code of Conduct.
[50] As for her acceptance of the two $200 cheques without consulting the Code of Conduct, the
Respondent argues that it is obvious that the Adjudicator did not find the circumstances surrounding acceptance of these gifts sufficient to justify her termination.
[51] The Respondent submits that the Adjudicator's decision to reduce her award by 20%, on the basis of contributory fault was not patently unreasonable. The jurisprudence supports the entitlement of an Adjudicator to reduce damages to reflect the degree to which an employee is partially at fault in the events leading up to dismissal; see Hollett v. Air Atlantic Ltd., [1994] C.L.A.D. No. 668.
[52] As for the damages awarded for emotional distress, the Respondent argues that the Adjudicator found that her dismissal was "precipitous". He found that the dismissal and the circumstances of the interrogation gave rise to a claim for emotional distress. The Respondent argues that this finding is consistent with the principles set out in the authorities to which the Adjudicator was directed during the hearing, that is Wallace v. United Grain Growers Ltd. (1997), 3 S.C.R. 701 and Zorn-Smith v. Bank of Montreal (2003), 31 C.C.E.L. (3d) 267 (Ont. S.C.).
[53] The Respondent further submits that it is well established that an Adjudicator can award compensation for losses that would not be available at common law, within its concept of the
reasonable notice period. The approach taken by the Adjudicator is consistent with the "make whole" objectives of section 242(4) of the Labour Code, and is not patently unreasonable.
ANALYSIS
i) Standard of Review
[54] Section 243 of the Labour Code provides a privative clause covering the decisions of an adjudicator in the context of a complaint filed under section 240. In the context of judicial review of such decisions, a reviewing court must act with great deference. Section 243 provides as follows:
| 243. (1) (1) Every order of an adjudicator appointed under subsection 242(1) is final and shall not be questioned or reviewed in any court. (2) No order shall be made, process entered or proceeding taken in any court, whether by way of injunction, certiorari, prohibition, quo warranto or otherwise, to question, review, prohibit or restrain an adjudicator in any proceedings of the adjudicator under section 242. |
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243. (1) Les ordonnances de l'arbitre désigné en vertu du paragraphe 242(1) sont définitives et non susceptibles de recours judiciaires. (2) Il n'est admis aucun recours ou décision judiciaire C notamment par voie d'injonction, de certiorari, de prohibition ou de quo warranto C visant à contester, réviser, empêcher ou limiter l'action d'un arbitre exercée dans le cadre de l'article 242. |
[55] If the Adjudicator fairly and without proven bias or proven apprehension of bias, operates within the four corners of section 242 and particularly subsection 242(3.1) and (4), he is complying with the will of Parliament. Section 243 of the Labour Code, requires that a decision of an adjudicator, despite any minor errors of procedure, fact and law, short of patent unreasonableness, shall not be disturbed upon judicial review. In Aziz v. Telesat Canada (1995), 104 F.T.R. 267 (F.C.A.), Heald J.A. at paragraph 19 summarized the applicable standards of review in respect of decisions rendered by an Adjudicator, following analysis of the relevant jurisprudence in that regard:
To summarize, the relevant jurisprudence clearly establishes that the standard of review relating to errors of fact and law is the high or strict test of patent unreasonableness. It also establishes that the lower standard of correctness applies where the errors relate to provisions defining the jurisdiction of an adjudicator.
[56] Paragraph 242(2)(b) of the Labour Code, states that an adjudicator shall determine the procedure to be followed but shall give full opportunity to the parties to present evidence and make submissions. Section 16 of the Labour Code, is relevant and provides as follows:
| 16. The Board has, in relation to any proceeding before it, power (a) to summon and enforce the attendance of witnesses and compel them to give oral or written evidence on oath and to produce such documents and things as the Board deems requisite to the full investigation and consideration of any matter within its jurisdiction that is before the Board in the proceeding; (a.1) to order pre-hearing procedures, including pre-hearing conferences that are held in private, and direct the times, dates and places of the hearings for those procedures; (a.2) to order that a hearing or a pre-hearing conference be conducted using a means of telecommunication that permits the parties and the Board to communicate with each other simultaneously; (b) to administer oaths and solemn affirmations; (c) to receive and accept such evidence and information on oath, affidavit or otherwise as the Board in its discretion sees fit, whether admissible in a court of law or not; [...] (f.1) to compel, at any stage of a proceeding, any person to provide information or produce the documents and things that may be relevant to a matter before it, after providing the parties the opportunity to make representations; |
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16. Le Conseil peut, dans le cadre de toute affaire dont il connaît_: a) convoquer des témoins et les contraindre à comparaître et à déposer sous serment, oralement ou par écrit, ainsi qu'à produire les documents et pièces qu'il estime nécessaires pour mener à bien ses enquêtes et examens sur les questions de sa compétence; a.1) ordonner des procédures préparatoires, notamment la tenue de conférences préparatoires à huis clos, et en fixer les date, heure et lieu; a.2) ordonner l'utilisation des moyens de télécommunication qui permettent aux parties et au Conseil de communiquer les uns avec les autres simultanément lors des audiences et des conférences préparatoires; b) faire prêter serment et recevoir des affirmations solennelles; c) accepter sous serment, par voie d'affidavit ou sous une autre forme, tous témoignages et renseignements qu'à son appréciation, il juge indiqués, qu'ils soient admissibles ou non en justice; [...] f.1) obliger, en tout état de cause, toute personne à fournir les renseignements ou à produire les documents ou pièces qui peuvent être liés à une question dont il est saisi, après avoir donné aux parties la possibilité de présenter des arguments; [...] |
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[57] In this case, the Adjudicator allowed the Applicant to call Ms. Lachappelle as a rebuttal witness, on a very limited ground, after the completion of the Respondent's case. Although the Adjudicator had a discretion whether to allow the calling of rebuttal evidence, having exercised that discretion, the Adjudicator ought to have allowed the Applicant to address a matter that was raised in cross-examination of Ms. Lachappelle in the context of the rebuttal evidence. The Adjudicator permitted the Respondent to raise the question of confusion in respect of the Code of Conduct in cross-examining Ms. Lachappelle after she gave her rebuttal evidence. This was a new issue arising from cross-examination and in my opinion, the Adjudicator's refusal to permit re-examination on that point amounts to a breach of the rules of natural justice.
[58] In Noel, supra, the Court held that inadmissible evidence that was improperly elicited in cross-examination may be subject to re-examination. Similarly, in other labour arbitration jurisdictions, it has been held that a refusal to permit cross-examination or the exclusion of admissible and relevant evidence will provide grounds for review and may result in an order quashing the award if a substantial injustice has resulted therefrom; see Girvin and Consumers' Gas Co. (Re) (1973), 40 D.L.R. (3d) 509 (Ont. Div. Ct.) and Ottawa Newspaper Guild, Local 205 and Ottawa Citizen (Re) (1965), 55 D.L.R. (2d) 26 (Ont. H.C.J.).
[59] The Respondent argued that even if the Adjudicator had improperly exercised his discretion in this regard and that the Applicant should have been permitted to re-examine on the evidence arising from the rebuttal cross-examination of Ms. Lachappelle, the ultimate decision did not turn on the evidence that the Bank Code of Conduct was confusing. In reply, the Applicant argued that the Adjudicator's error was compounded by his reliance upon Ms. Lachappelle's answer, in the reasons for his decision.
[60] In his decision, the Adjudicator made the following comments:
I fully accept the uncontradicted evidence of Ms. Siu that she and her confidants immediately senior to her, the staff members which as stated above, she consistently turned to and relied upon for day to day advice and assistance, found that the provisions on page 11 of the Code of Conduct were at best confusing. They concluded that the provisions generally did not apply to tellers or Cash Control Officers as they were not in a position to grant customers advantage in deposit interest rates, loans, or other such discretionary matters.
...
I find that the Bank failed both Ms. Siu and its customer, Mr. Birchall. It failed Ms. Siu by not properly training her as to the propriety of receiving gifts [...]
Counsel for Ms. Siu suggested, tongue in cheek, that understanding the Code of Conduct would be helped if the reader was a big city downtown lawyer. I don't entirely disagree with him. If the Bank hopes to rely on documents such as this to justify the termination of employees, particularly long tenured employees, then it must be sure that the employee is not only familiar with the document but knows and understands its content and impact; this would almost certainly entail workshops or training sessions.
[61] It appears from these paragraphs that much of the Adjudicator's decision turned on whether the Bank's employees were properly informed as to the contents of the Code of Conduct. In the absence of a transcript of the evidence presented at the hearing, it is difficult to assess the extent of the evidence which was relied upon by the Adjudicator in arriving at his conclusion that the Code of Conduct was confusing. What is clear, however, is that on cross-examination, Ms. Lachappelle stated this point directly. The Applicant was not given the opportunity to re-examine her on this
statement, which appears to have been greatly relied upon by the Adjudicator in reaching his ultimate conclusion.
[62] Accordingly, while I accept that the Adjudicator has significant discretion with respect to the procedural aspect of the hearing, I am persuaded by the Applicant's argument that his refusal to permit re-examination on a point not arising prior to the cross-examination, upon which he clearly relied, amounted to a denial of procedural fairness. However, I will continue to address other grounds advanced by the Applicant in this application for judicial review.
[63] As noted above, the Applicant argued that certain critical findings of fact made by the Adjudicator were perverse and capricious and made without regard to the material before him. Noting in particular, his findings with respect to the credibility of Mr. Birchall and the Respondent. Where credibility is an issue, the courts have held that the Adjudicator is in the best position to assess credibility; see Simard v. Transport Aerien Royal (1996), 112 F.T.R. 64 (T.D.). Further, a court would have to conclude that the Tribunal made a palpable and overriding error before intervening with factual findings or determinations of credibility; see Vantage Contracting Inc. v. Marcil (2004), 27 Alta. L.R. (4th) 262 (Alta. Q.B.).
[64] The Applicant has noted that the Adjudicator's acceptance of both testimony of Mr.Birchall and of the Respondent, as uncontradicted, is not supported by the evidence. The Applicant has referred to a number of instances where the testimony of the Respondent was conflicting and inconsistent with that of Mr. Birchall. The Respondent, in turn, submits that such contradictions are matters of detail which did not ultimately impact upon the real issues before the Adjudicator and further, that the Adjudicator should be given deference in determinations of credibility.
[65] The assessment of evidence and witnesses is at the very heart of the Adjudicator's role. This Court grants considerable deference to an Adjudicator's decision on such matters. In light of the highly discretionary standard of review and in the absence of a transcript of the hearing before the Adjudicator, it is difficult to assess whether the credibility findings were patently unreasonable.
[66] However, I would observe that the Adjudicator has not even acknowledged in his decision that there were instances of contradiction between the testimony of these two witnesses. This silence is troubling. Likewise, as regards the contradiction between the evidence of Ms. Lachappelle and the Respondent, the Adjudicator appears to have accepted the evidence of the Respondent as credible, without giving any explanation for disregarding the testimony of Ms. Lachappelle to the effect that she did not advise the Respondent that the relevant provisions of the Code of Conduct do not apply to bank tellers. Finally, no real challenge was advanced about the veracity of notes taken by counsel, in lieu of a transcript.
[67] The Applicant has argued that the Adjudicator's error with respect to his assessment of the Respondent's credibility is key to his assessment of one of the grounds upon which the Respondent was dismissed, that is on the basis of her dishonesty and evasiveness. I further note that the Adjudicator relied upon his conclusion that the Respondent was advised by senior employees of the bank that the relevant provisions of the Code of Conduct do not apply to bank tellers.
[68] In these circumstances, despite the considerable deference owed to the Adjudicator with respect to his credibility findings, I conclude that it was patently unreasonable that he did not address the contradictory evidence before him and further, that he failed to provide reasons in clear and unmistakable terms, for preferring one version of events over another. Specifically, I find it to be unreasonable for the Adjudicator not to have acknowledged that Ms. Lachappelle testified that she did not tell the Respondent that the Code of Conduct was inapplicable to bank tellers.
[69] That conclusion ties in with the most serious aspect of the Adjudicator's decision, that is his failure to answer central legal questions. The Adjudicator was seized with the task of reviewing the Bank's termination of the Respondent, in order to determine whether she had been unjustly dismissed. With respect to the concept of unjust dismissal in the Labour Code, supra, the Federal Court of Appeal discussed an Adjudicator's mandate with respect to a dismissal, in Bell Canada v. Hallé (1989), 99 N.R. 149 (F.C.A.), at paragraph 10 as follows:
The question presented to him was whether the respondent had been unjustly dismissed. In order to answer this, he first had to consider the nature, sufficiency and merits of the reasons for dismissal. Accordingly, in the case at bar the adjudicator should have considered whether the applicant had any basis for complaint about the respondent's performance and whether this provided grounds for dismissal. If the adjudicator had answered these questions in the affirmative, he should then have considered whether the procedure leading to dismissal of the employee was fair.
[70] In the present case, there were two reasons for the dismissal: first, the Bank's belief that the Respondent had improperly accepted gifts in violation of the Bank's Code of Conduct and secondly, what the Bank deemed to be her untruthful and evasive explanations concerning those transactions. Consequently, the Adjudicator was mandated with reviewing whether the Applicant had any basis for complaint vis-à-vis the Respondent's actions and whether this provided sufficient grounds for dismissal. Only after reaching a positive answer to these questions should the Adjudicator proceed to consider whether the procedure leading to the dismissal of the Respondent was there.
[71] The first question is whether the Respondent's acceptance of the $5,000 gift from Mr. Birchall was in breach of the Code of Conduct. In my opinion, the Applicant is correct when it submits that apart from including the relevant sections of the Bank's Code of Conduct in his decision, the Adjudicator makes no further reference to the specific provisions of this policy. The Respondent's dismissal was fundamentally about her receipt of gifts and the Bank's policy on this issue is clearly set out in the Code of Conduct. The Adjudicator's decision shows that he accepted the Respondent's explanation that she and Ms. Lachappelle found the Code of Conduct to be confusing. However, he made no clear finding that the Respondent's acceptance of the $5,000 cheque amounted to a breach of the Bank's Code of Conduct.
[72] Rather, the Adjudicator proceeded to discuss whether the Bank's decision to terminate the Respondent's employment was appropriate, in the circumstances, and concluded that lesser
remedies would have been available, including rescinding the gifts. The Adjudicator implicitly found that the Bank failed to properly train its employees relative to the Code of Conduct.
[73] In light of the analytical approach discussed in Hallé, supra, the Adjudicator should have first made a clear finding as to whether the Respondent's acceptance of the $5,000 gift amounted to a breach of the Code. The relevant provisions of that document are marked with two asterisks. This is an indication to employees that a breach of these particular conditions would most likely result in termination. I am of the opinion that the Respondent's termination is fundamentally based upon the receipt of gifts which, in the Bank's opinion, is contrary to the Code of Conduct. The Respondent argues that the ultimate determination to be made by the Adjudicator was whether her termination was just, not simply whether there had been a breach of the Code of Conduct.
[74] It is clear from his reasons that the Adjudicator preferred the testimony of the Respondent over that of Ms. Lachappelle, although he did not provide clear reasons for that preference. The Adjudicator made no finding as to whether the Code of Conduct did not in fact apply to bank tellers. He made no finding whether the Respondent had incorrectly interpreted the applicability of those provisions relating to the acceptance of gifts.
[75] The applicable standard of review with respect to the Adjudicator's analysis of the Code of Conduct is patent unreasonableness. Since he failed to address a fundamental issue, that is whether the Respondent's acceptance of the $5,000 gift amounted to a breach of the Code of Conduct, I conclude that the Adjudicator's decision was patently unreasonable. There is clear support in the jurisprudence for the conclusion that an Adjudicator makes a patently unreasonable decision by failing to answer the question before him or her; see Fraser v. Canada (Public Service Staff Relations Board), [1985] 2 S.C.R. 455. This decision is relevant, in my opinion, even though it was made in the context of labour arbitration in the Public Service.
[76] This failure on the part of the Adjudicator, together with the other errors as noted above, leads me to conclude that the cumulative effect of these errors justifies judicial intervention in this matter.
[77] Similarly, I conclude that the Adjudicator erred in his disposition of the issues regarding the Respondent's acceptance of two $200 cheques. He failed to ask and decide the question whether acceptance of these gifts amounted to a breach of the Bank's Code of Conduct.
[78] In light of my conclusion on these points, it is unnecessary to address the Adjudicator's conclusion that the Respondent's impugned actions, arising from her failure to consult with her manager, justified a reduction of her damages by 20%. Likewise, it is unnecessary to address the issue of damages.
[79] In the result, this application for judicial review is allowed, the Adjudicator's decision is quashed and the matter is remitted for determination before a different adjudicator. Although the Applicant sought an order dismissing the Respondent's complaint, no authority was cited in support of that proposition and I decline to grant such remedy.
[80] If the parties cannot agree on the question of costs, submissions may be made.
ORDER
The application for judicial review is allowed, the decision of the Adjudicator is quashed and the matter is remitted for redetermination before a different adjudicator. If the parties cannot agree on the question of costs, submissions may be made.
"E. Heneghan"
Judge
FEDERAL COURT
Names of Counsel and Solicitors of Record
DOCKET: T-1439-04
STYLE OF CAUSE: ROYAL BANK OF CANADA
Applicants
and
DARLENE SIU
Respondent
PLACE OF HEARING: VANCOUVER, BRITISH COLUMBIA
DATE OF HEARING: MAY 2, 2005
REASONS FOR ORDER
AND ORDER BY: HENEGHAN J.
DATED: NOVEMBER 2, 2005
APPEARANCES BY:
Howard Ehrlich
Ena Ackerman FOR THE APPLICANT
William E. Knutson, Q.C. FOR THE RESPONDENT
SOLICITORS OF RECORD:
Bull Housser & Tupper
Barristers & Solicitors
Vancouver, B.C. FOR THE APPLICANT
Shapiro Hankinson & Knutson
Barristers & Solicitors
Vancouver, B.C. FOR THE RESPONDENT