Accounting for Law
Employment & Labour

Adjudicator denies reinstatement and costs to winning employee

By Barry B. Fisher

In Weed v. Royal Bank of Canada (2017 CarswellNat 343) Adjudicator Michelle Somers heard an unjust dismissal case for 14 days, with nine witnesses and ”voluminous” documentary evidence.

Having found that Mr. Weed was unjustly dismissed, the adjudicator declined to order reinstatement for the following reasons:

Reinstatement

196. It is well-established that s. 242 of the Code gives the Adjudicator broad powers of compensation, including reinstatement “Where an employee has been dismissed unjustly, there is a presumption in favour of reinstatement unless there is clear evidence to the contrary”: Pecoskie and Atomic Energy of Canada Ltd., 2015 CarswellNat 5573. The test whether there is a relationship of trust between the employer and employee is an objective one.

197. Counsel for RBC submitted that reinstatement would not be appropriate, while Counsel for Weed went no further than to acknowledge that I have the right to consider it In an October, 2014, email, Weed told a prospective employer that he was going through the Labour Board so he could have his position back with RBC but that he was sure that was a bad idea.

198. Weed believes that his role as a financial planner is to serve the best interests of his clients. He believes, apparently sincerely, that his employer’s emphasis on sales conflicts with those interests. RBC had shifted its business emphasis during Weed’s employment towards a drive to increase sales of its products, and I conclude that Weed either had difficulty or refused to accept this shift Prior to the onboarding of Leblanc as his manager, he had a clean record. Indeed, he was a very good performer. There may or may not have been insufficient training in the new business model.

199. These factors are not sufficient to excuse some of the decisions that Weed made during his employment As the Adjudicator said in Farrell v Royal Bank of Canada [1998] CLAD. No. 793, “My conclusion that the Bank did not meet the just cause standard in dismissing Farrell should not be understood as a vindication of her work performance in that regard.” [para. 144]

200. Although he did say to Leblanc and in his Decision-Making Exercise that he would change his conduct to be more in line with his employer’s standards, Weed did not acknowledge at the hearing that his conduct at the very least contravened his employer’s compliance standards, nor that he was in any way responsible for the breakdown in his relationship with his employer. That makes his prospects for a happy future with RBC dim. My lack of confidence is exacerbated by his avowal at the hearing that as between the bank’s standards and his own estimation of his client’s needs, he would disregard standards set by his employer.

201. I agree with RBC that the relationship between it and Weed has been irreparably damaged, and that reinstatement is not a feasible remedy.

The adjudicator instead awarded him compensation in the sum of $230,000 which covered the period of time from his dismissal to the date of the award, a period of 35 months less mitigation income plus a 15 per cent reduction for what the adjudicator thought was poor mitigation efforts.

In awarding costs the adjudicator properly stated that:

It has now been established that an Adjudicator appointed under the Code has the jurisdiction to award costs. The leading case is Banca Nazionale del Lavoro of Canada Ltd. V Lee-Shanok [1988] F.C.J. 594, 1988 CarswellNat 254 (FCA). Stone J.A. determined the scope of the Adjudicator’s jurisdiction under s. 61.5(9)(c) of the Code [now s. 242(4)(c)]:

“I have no difficulty in reading it, with its broad reference to granting relief that is “equitable to require the employer to do in order to remedy or counteract any consequence of the dismissal”, as including the power to award costs. The difficulty I have is in viewing an award of compensation, gained at some considerable expense to a complainant in terms of legal costs, as having the effect of making him whole. Legal costs incurred would effectively reduce compensation for lost remuneration, while their allowance would appear to remedy or, at least, to counteract a consequence of the dismissal.” [para. 25]

The adjudicator then went to refuse to award costs to the winning Weed with the following rationale.

212. Counsel for Weed suggested that half of solicitor-client costs would be appropriate. However, I am going to adopt the reasoning in Pecoskie, supra. In that case, the Complainant was Executive Assistant to the Vice-President of Finance. She sent 35 emails that were “confidential and privileged” to her husband, who was a Project Leader in the same company. It was alleged she had also sent him emails that insulted and derided other managers and colleagues. Although her performance had previously been assessed in glowing terms, the company bypassed progressive discipline and dismissed her on the basis she had committed “a serious breach of trust, confidentiality and respectful workplace practices.” Adjudicator Clarke examined the emails in detail. They were largely related to issues that assisted her husband in his role at the company. A few said distasteful things about her manager and alleged that a colleague was not truthful. No one saw them but her husband. The Adjudicator determined that although she had violated the rules of the workplace, her actions were not sufficiently serious to warrant summary dismissal. Nevertheless, the Adjudicator made no costs award because the complainant could not be considered blameless.

213. Counsel for RBC submitted that no costs should be awarded given Weed’s conduct at the hearing. While I would not go so far as to say he made allegations that were proven to be false, I have already determined that that Weed has much to answer for in this matter, and I therefore decline to award costs.

This is a particularly troubling comment and result. The adjudicator seems to apply an exceeding high standard for a winning party to get costs, in that they apparently must be “blameless,” a standard which most of us would fail.

Although I am not usually the one to quote the New Testament, I am reminded of what Jesus said in John 8, v 7. ESV:

“Let him who is without sin among you be the first to throw a stone at her.”

Let us do some math. The adjudicator awarded $230,000.

Out of that amount, he will have to pay his lawyer for a 14-day hearing and all the preparation. His lawyer was Richard Gilborn Q.C. Say a senior member of the bar in Calgary is charging his client $500/hour or $4,000 a day for an eight-hour day. Further assume that for every day of hearing there are about two days of preparation.

That makes for a bill of 14 x 3 = 42 days x $4,000/day = $168,000

The award was $230,000. After paying his lawyer he is left with $62,000. Assume a conservative tax rate of 33 per cent, he is left with $40,920.

Is that a just result when one actually wins a case?

Read More at Barry Fisher’s Employment Law Blog

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