A recent decision of the BC Supreme Court went in favour of an employee who was terminated by her employer for alleged conflict of interest and breaches of policy. The court determined that there was a lack of clarity, training and consistency in its policies and procedures, and a flawed investigation: Ogden v. CIBC.
Ms. Ogden immigrated to Canada in 2000. She learned English and earned a business degree from Royal Roads University. She went to work with CIBC and built up a portfolio of $233 million working with Chinese clients. She was consistently a top performer.
In the middle of one night in 2010, in an urgent situation, she accepted a wire transfer of funds from China to her personal account and then completed the transfer to the client’s account the next day. There was nothing hidden, no personal benefit to Ms. Ogden, and it was done as the only way to get the funds necessary to avoid the collapse of a house purchase by the client . Apart from the funds being routed through Ms. Ogden’s personal account, the process of getting money from China was consistent with bank practice.
The wire transfer incident came to light some six months later. Ms. Ogden was forthcoming about what she had done. The court found that Ms. Ogden had simply made an error in judgment and that the employer did not give her a full opportunity to explain.
Ms. Ogden was terminated for just cause. The employer relied on a few previous incidents for which it had given a final warning after the wire transfer incident. The court concluded the wire transfer incident could not establish a final incident for cumulative cause, as it preceded the final warning Ms. Ogden had received.
The employer also relied on its conflict of interest policy with respect to the wire transfer. The court decided that there was no breach of the conflict of interest policy and stated:
Where the employee’s conduct is the result of an honest mistake, an error in judgment, or the result of a lack of training, the courts have stopped short again and again from finding that cause – in such circumstances – is warranted.
Intention here is key. Knowing that the transaction was wrong is what connects the conduct to a trust issue. Absent intention, the result is someone who exercised her judgment and made the wrong call.
The court found that Ms. Ogden’s career in financial services was ruined and that she suffered emotional harm. It cited “cavalier, insensitive and reckless” conduct by the employer in its investigation and resulting termination of Ms. Ogden and ordered damages for breach of contract and aggravated damages to be assessed in another trial.
The issue of changes to post-retirement benefits, such as health and welfare benefits provided to employees, is an issue that has arisen for employers trying to reduce costs. Our colleagues in Ontario have published a useful post regarding a recent Supreme Court of Canada decision which we link to here.
The BC Human Rights Tribunal has the power to order costs in favour of an employer. It uses this power very infrequently, but it is an important deterrent to frivolous complaints and helps to protect the integrity of the process. We discussed the use of costs in an earlier post.
Without an occasional cost award against complainants, employers face the prospect of having expensive wins while the complainant faces no risk except loss of their time and personal effort. The situation is exacerbated when the complainant has legal representation through legal aid. The situation is unfair to employers who face a frivolous claim they can’t afford to fight in the short term, but can’t afford not to fight for the sake of the long term. It is also one of the factors that influence the perception of some employers that BC’s human rights system does not provide a level playing field.
The benefits of the occasional cost award against a complainant is best illustrated by looking at a jurisdiction where it cannot happen. That is the situation discussed in a recent post by our colleagues in Ontario. In Ontario there is no deterent against frivolous or vexatious complaints as the Tribunal has no jurisdiction to make any award against a malicious complainant. There, employers have to pin their hope on passage of a private member’s bill to grant the Tribunal the power to award costs.
Everybody knows by now that the B.C. Teachers’ Federation has been awarded $2 million plus costs against the B.C. Government related to the dispute over class sizes. The B.C. Supreme Court ruled that the government simply duplicated previous legislation that had been declared unconstitutional. The court had harsh words for the government, essentially finding that the government ignored the court’s previous orders and that it had tried to provoke a strike by the teachers, supporting the court’s $2 million damage award, and likely a few hundred thousand in costs to be paid.
The cost to the public purse is bad enough but there are other aspects of the decision that may have longer and more important effects on employers. This takes us into the relatively esoteric area of freedom of association under the Charter of Rights and Freedoms, which includes several cases where unions are attempting to turn collective bargaining and strike action into constitutionally guaranteed fundamental freedoms.
We have touched on these issues in a previous post and in material you can find on our website here. The significance of this latest decision may be in its interpretation of the government’s duty to consult before legislating. The earlier cases suggested that government could legislate to limit public sector bargaining rights after consultation about alternatives with the affected unions. The B.C. Teachers’ Federation decision suggests that this will not be sufficient, that there must be a mechanism in the new legislation for “an employees’ association to make representations to the employer and have its views considered in good faith” (emphasis in the original at paragraph 66.) It may also mean that the government has less legislative freedom when it is not technically the employer (as with the teachers) than when it is legislating with respect to its own employees.
This decision may not have an immediate and direct impact on private sector employers, but it all goes into the mix of how broadly the freedom of association rights under the Charter may be interpreted, which is something of interest to all employers.
If you are going to lay off older workers while hiring younger ones in the same category, you better have a good explanation. That’s essentially what the BC Human Rights Tribunal said in Price and Top Line Roofing Ltd., 2013 BCHRT 306. The Complainant, Paul Price, was a journeyman working for the Respondent Top Line. He was one of the two oldest journeymen employed at Top Line. Both were laid off in July, 2012. A few months before this, however, Top Line had hired a journeyman in his 40s and two young journeymen apprentices.
Top Line said Price was laid off because of a shortage of work, lack of speed, and poor motivation and attitude. Price denied performance and motivation issues, and said they had never been raised with him.
Neither party was represented, and the Tribunal noted that Top Line failed to disclose relevant documentation that would have supported its allegations, such as time sheets showing his hours at work compared to those of other employees. The Tribunal also drew an adverse inference because a Top Line representative present at the hearing, who was said to have had input on Price’s termination, did not testify.
The Tribunal concluded that, since 3 younger journeymen employees were hired a few months before the two most senior were terminated, it could infer that age was a factor in the termination of Price’s employment. She found that “the circumstances require an explanation” and that the evidence led by Top Line was not sufficient for her to conclude that performance issues were the cause of Price’s layoff.
More generally, the Tribunal member noted that aging and the lack of capacity to perform certain work can be inextricably linked, and if job performance is the issue, an employer must treat the older employee with the same respect accorded to all employees, by giving notice of the job performance problems and an opportunity to meet the workplace standard.
This case is a reminder that employers must have a compelling rationale for the termination of employees when age may be perceived as a factor. A consistent and rigorous performance management program for all employees will help protect employers where performance problems arise with older employees, especially where fair and documented processes are followed.
For those who may be interested, McCarthy Tétrault has just launched its eleventh blog, Canadian Class Actions Monitor, at http://www.canadianclassactionsmonitor.com. The blog provides the firm’s views on class actions across Canada in sectors including securities, financial services, product liability, competition, healthcare and other areas of business. It also comments on the impact of class actions on Canadian businesses and the legal landscape, and shares our insights on specific class actions in Canada, related developments and cross-border influences.
Please visit the blog!
Media outlets are reporting that the B.C. Criminal Justice Branch is declining to pursue charges against the Burns Lake Sawmill owner following a workplace explosion two years ago that resulted in the deaths of two workers. Crown counsel cited the inadmissibility of significant portions of the investigation report prepared by WorkSafeBC after the incident, based on the likelihood of Charter-rights violations. Crown counsel concluded that certain evidence collected by WorkSafeBC would likely be found inadmissible, and result in the charges being dismissed. Crown counsel’s concerns stemmed from the lack of search warrants and the failure to instruct a company official of the right to remain silent when questioned.
For more, see: http://www.vancouversun.com/news/WorkSafeBC+review+investigation+process/9384397/story.html#ixzz2qRs248bQ
In response, WorkSafeBC has pledged to review its investigatory procedures, and is considering the implementation of a parallel investigative procedure in cases where there is potential for criminal prosecution.
See more here.
This is an important development for employers and employees who may unknowingly be subject to criminal prosecution as a result of a WorkSafeBC safety inspection. In these circumstances, it is only right that employers and employees have the same Charter protections as in any other criminal or quasi-criminal case.
We will be sure to keep you up-to-date concerning WorkSafeBC’s revised investigation procedures.
In Kelly v. University of British Columbia (No. 4), 2013 BCHRT 302, the B.C. Human Rights Tribunal awarded the complainant, Dr. Carl Kelly, $75,000 in damages for injury to dignity. This is more than double the previous highest award of $35,000, set in Senyk v. WFG Agency Network (B.C.) Inc., 2008 BCHRT 376.
Dr. Kelly was a medical school graduate who had been diagnosed with ADHD and a non-verbal learning disability. Between November 2005 and August 2007, Dr. Kelly experienced significant difficulties integrating with and passing his residency program rotations. He continuously consulted a psychiatrist and numerous other specialists during the 21 months he tried to satisfy the program requirements.
Though UBC made attempts to accommodate him, Dr. Kelly continued to perform below expectations in many of his rotations. In August 2007, after further medical assessments, UBC decided that Dr. Kelly was unsuitable for the program and discharged him with two months’ severance pay.
The Tribunal found UBC’s actions to be discrimination in employment and in the provision of services customarily available to the public.
In making the award for injury to dignity, the Tribunal noted the following bases:
- the effect of UBC’s decision to terminate on Dr. Kelly’s ability to fulfill his lifelong dream of practicing medicine;
- the humiliation and embarrassment Dr. Kelly experienced when he was forced to seek employment in medicine-related fields;
- the significant impact of UBC’s decision on his personal life;
- that Dr. Kelly was in an particularly vulnerable position as a student and a medical resident suffering from a disability; and
- that he consistently cooperated with UBC’s requests for medical information.
Damage awards for injury to dignity at the Tribunal are rarely above the $20,000 mark, and this decision represents a significant increase that will likely have the effect of raising the average awards for injury to dignity in the future. The case is also a good reminder that the Tribunal focuses on the individual impacts in determining damages for injury to dignity.
We are delighted to share that McCarthy Tétrault’s Canadian Appeals Monitor blog has received a 2013 Clawbie (Canadian Law Blog Award) in the Practice Group Blog category, for its overall excellence in covering Canada’s appellate courts and cases.
Canadian Appeals Monitor is one of McCarthy Tétrault’s 10 blogs covering a variety of practice areas. The Clawbies highlight in particular “This Week at the SCC” as “a strong regular contribution” that “really does take a national firm to pull off.”
We are also very proud of our partner Barry Sookman, whose eponymous Barry Sookman blog was a runner-up in the Clawbies’ Legal Technology category. Barry is the former co-chair of McCarthy Tétrault’s Technology Group and former head of its Intellectual Property Group, and is one of Canada’s foremost authorities in information technology and intellectual property law. He uses his blog to share his views on a wide range of copyright, Internet and information technology issues.
We look forward to more great blogging in 2014!
As usual, our colleagues in other areas of practice are raising issues that may be of interest to employers in BC. Here are three from this month:
BC’s Low Carbon Fuel Standard – This could affect your business in BC.
Foreign Judgment Enforcement in Canada – If your business is operating outside Canada, you need to understand the reach of the law of those other countries.
Privacy Law Changes in Europe – Might these ideas find their way to Canada?