A-1418-84
Canadian Imperial Bank of Commerce (Appli-
cant)
v.
Marc Boisvert, in his capacity as an adjudicator
sitting pursuant to the provisions of section 61.5
of the Canada Labour Code and Jacqueline
Chayer (Respondents)
INDEXED AS: CANADIAN IMPERIAL BANK OF COMMERCE V.
BOISVERT
Court of Appeal, Marceau, MacGuigan and
Lacombe JJ.—Montreal, January 27; Ottawa,
April 3, 1986.
Labour relations — Unjust dismissal — Application to
review Adjudicator's decision dismissal unjustified — Bank
dismissing employee upon arrest of common law spouse for
robberies of Bank — Adjudicator ordering Bank to pay
indemnity equivalent to lost salary — Parties previously
agreeing that only validity of complaint to be considered —
Application allowed — Failure to hear parties on question of
remedies infringing audi alteram partem rule — Adjudicator
erred in holding just cause for dismissal requiring respondent
to commit illegal act — Any act incompatible with due or
faithful discharge of duty to master sufficient — Marriage or
cohabitation with particular person, in some fact situations,
creating just cause for dismissal — Nature and requirements
of employment making continued cohabitation with robber
incompatible with duties — Bank also having right to dismiss
under contract of employment as employee undertaking to
avoid conduct prejudicial to interests and reputation of Bank
— Administrative dismissal and conflict of interest discussed
— Canada Labour Code, R.S.C. 1970, c. L-1, s. 61.5 (as
enacted by S.C. 1977-78, c. 27, s. 21; as am. by S.C. 1980-81-
82-83, c. 47, s. 27; 1984, c. 39, s. 11), 122(1) (as am. by S.C.
1977-78, c. 27, s. 43).
Judicial review — Applications to review — Labour rela
tions — Application to review Adjudicator's decision dismissal
unjustified — Employee dismissed from managerial position
at Bank upon arrest of common law spouse for bank robberies
— Application allowed — Decision of adjudicator pursuant to
s. 61.5 of Code subject to s. 28 review, despite privative clause
of s. 61.5(10) — Federal Court Act, R.S.C. 1970 (2nd Supp.),
c. 10, s. 28 — Canada Labour Code, R.S.C. 1970, c. L-1, s.
61.5(10) (as enacted by S.C. 1977-78, c. 27, s. 21).
This is an application to review an Adjudicator's decision
that the respondent Chayer's dismissal was unjustified. The
Bank dismissed Chayer from a managerial position at a Mon-
treal branch upon the arrest of her common law husband for
two robberies at the same branch of the Bank in St. Lambert.
Chayer complained pursuant to section 61.5 of the Canada
Labour Code. The Adjudicator directed the Bank to pay its
former employee an indemnity equivalent to her lost salary,
although at the outset the parties agreed that only the question
of whether the complaint was valid would be considered. The
Adjudicator started from the premise that "just cause" in
section 61.5 "necessarily implies that the employee is personal
ly responsible". He then summarized the testimony to show
that there was no evidence that the complainant gave the man
she was living with confidential information regarding security
measures. He held that there could not be a conflict of interest
without a specific wrongful act by the employee, and the mere
fact of living with someone did not constitute such an act. The
Adjudicator dismissed the suggestion that this was an adminis
trative dismissal, since a dismissal is administrative only in very
special circumstances, which raise a question as to either the
employee's physical ability to perform his work or his
incompetence.
Held, the application should be allowed.
Per Marceau J.: The Adjudicator's reasoning is invalid
because it is based on a false premise. Section 61.5 altered the
right of dismissal to preclude arbitrary action by the employer
and to ensure continuity of employment. Only a right of "just"
dismissal now exists, and this means dismissal based on an
objective, real and substantial cause, independent of caprice,
convenience or purely personal disputes, entailing action taken
exclusively to ensure the effective operation of the business.
Going beyond that, as the Adjudicator did, is wrong. Although
it is difficult to justify dismissal under section 61.5, it can still
be done outside cases of incompetence or disability or serious
misconduct on the part of the employee.
If the section 61.5 remedy were available only in cases of
disciplinary dismissals, the Adjudicator's proposition, that any
dismissal not based on a wrongful act by the employee is
unjust, would be irrefutable. A person cannot be disciplined for
anything other than an act committed by that person himself.
However, since its inclusion in the Code, section 61.5 has been
resorted to by employees laid off on grounds other than discipli
nary ones. An "administrative dismissal" is a non-disciplinary
one which may be justified by the employer on the basis of the
employee's incompetence or physical or mental disability, and a
"conflict of interests" has long been advanced as a reason for
dismissal. It is well established that any unilateral termination
by an employer of the contract of employment, except a lay-off
for redundancy, falls within section 61.5.
The justification relied upon by the Bank met the require
ments of section 61.5 although the situation here was not one of
conflict of interest. That concept was applicable to cases in
which an employee engages in activities which are external and
parallel to those he performs as part of his job, and which
conflict with the latter. However, an employee may lose a
characteristic or attribute which might reasonably be regarded
as necessary for carrying out the employment, resulting in a
loss of confidence by the employer such that ordinary employ-
er-employee relations could not continue.
The question of whether the Bank should have paid some
compensation in lieu of prior notice, is not relevant in an action
based on section 61.5 of the Code.
Per MacGuigan J. (Lacombe J. concurring): There is a
preliminary issue as to the effect of the privative clause in
subsection 61.5(10) of the Canada Labour Code. In light of
subsection 122(1) no decision of the Canada Labour Relations
Board is reviewable by the Court except under paragraph
28(1)(a) of the Federal Court Act for failings with respect to
natural justice, excess of jurisdiction or refusal to exercise
jurisdiction. The respondents argued that the privative clause in
subsection 61.5(10) might extend to adjudicators the same
freedom from review under paragraphs 28(1)(b) and (c) that
the Board possesses. This issue was decided to the contrary in
Pioneer Grain Co. Ltd. v. Kraus, [1981] 2 F.C. 815 (C.A.).
The Adjudicator erred in law with respect to the remedy
awarded. Corporation Dicom v. Petit, judgment dated Novem-
ber 21, 1984, Federal Court, Appeal Division, A-413-84, not
yet reported, held that an adjudicator who failed to hear the
parties on the question of remedies infringed the audi alteram
partem rule of natural justice. The Adjudicator here fell into
the same trap. For this lapse alone, the matter must be returned
to the Adjudicator.
It was stated in Pearce v. Foster (1886), 17 Q.B.D. 536
(C.A.) that "where a person has entered into the position of
servant, if he does anything incompatible with the due or
faithful discharge of his duty to his master, the latter has the
right to dismiss him". Actual prejudice to the employer need
not be proved. Potential harm is sufficient. It is irrelevant
whether the facts of the case fall within the ordinary limits of
conflict of interest, since incompatibility with the respondent's
duties to her employer will suffice.
The law can be summarized in the following principle:
marriage or cohabitation with a particular person can, in some
fact situations, create a just cause for dismissal; whether it does
will depend on a close analysis of the whole fact situation and
especially of the nature and requirements of the particular
employment.
The Adjudicator erred in his opinion that just cause for
dismissal requires the respondent to herself have committed an
act that is illegal or contrary to law. Such a test would
eliminate many conflict of interest situations. The true test of
an employee's misconduct is whether the acts of the employee
are "incompatible with the due or faithful discharge of his duty
to his master".
On the facts, the employer Bank receives valuables for
safe-keeping, which it must go to extreme pains to protect from
theft. By February 1980 the complainant's continued cohabita
tion with a convicted robber placed her in a situation of
incompatibility with her duties to her employer. The nature of
her common law spouse's illegal activities constituted a stand
ing threat to all financial institutions. As a key employee, the
complainant had direct knowledge of her own Bank's security
arrangements and indirect knowledge of those of other banks.
In such a close association she might even unwittingly let slip a
detail helpful to an alert criminal mind. His criminality must
be deemed to have been clearly visible to the complainant. She
betrayed her duty to her employer by continuing to associate
with such a criminal. Nothing more is required for incompati
bility with the interests of her employer. Under the contract of
employment, the complainant undertook to act with honesty
and loyalty and to avoid conduct prejudicial to the interests and
reputation of the Bank. In these circumstances, the Bank also
had, under the contract, a right to terminate her employment
without notice.
CASES JUDICIALLY CONSIDERED
APPLIED:
Pioneer Grain Co. Ltd. v. Kraus, [1981] 2 F.C. 815
(C.A.); Corporation Dicom v. Petit, judgment dated
November 21, 1984, Federal Court, Appeal Division,
A-413-84, not yet reported; Pearce v. Foster (1886), 17
Q.B.D. 536 (C.A.); Bursey v. Acadia Motors Ltd.
(1980), 28 N.B.R. (2d) 361 (Q.B.); var'd (1982), 35
N.B.R. (2d) 587 (C.A.); Clouston & Co., Ld. v. Corry,
[1906] A.C. 122 (P.C.).
CONSIDERED:
R. v. Arthurs, Ex p. Port Arthur Shipbuilding Co.,
[1967] 2 O.R. 49; 62 D.L.R. (2d) 342 (Ont. C.A.); Re
Granby (Ville de) and Fraternité des Policiers de Granby
Inc. (1981), 3 L.A.C. (3d) 443; Foot v. Eastern Counties
Timber Co. Ltd., [1972] 1 I.R.L.R. 83 (Brit. Ind. Trib.);
Skyrail Oceanic Ltd. v. Coleman, [1980] I.C.R. 596
(Brit. Empt. App. Trib.); rev'd [1981] I.C.R. 864 (C.A.);
Caldwell et al. v. Stuart et al., [1984] 2 S.C.R. 603;
Cindy Bosi v. Township of Michipicoten and K.P. Zurby
(1983), 4 C.H.R.R. D/1252 (Bd. of Inq.).
REFERRED TO:
Empey v. Coastal Towing Co. Ltd., [1977] 1 W.W.R.
673 (B.C.S.C.); Tozer v. Hutchison (1869), 12 N.B.R.
540 (C.A.); Federal Supply and Cold Storage Co. of
South Africa v. Angehrn & Piel (1910), 80 L.J.P.C. 1.
COUNSEL:
Louis P. Bélanger for applicant.
André Aumais for respondent Jacqueline
Chayer.
SOLICITORS:
Stikeman, Elliott, Montreal, for applicant.
Gurman, Marcovitch & Aumais, Montreal,
for respondent Jacqueline Chayer.
The following is the English version of the
reasons for judgment rendered by
MARCEAU J.: This application is to review an
adjudicator's decision pursuant to section 61.5 of
the Canada Labour Code [R.S.C. 1970, c. L-1, as
enacted by S.C. 1977-78, c. 27, s. 21; as am. by
S.C. 1980-81-82-83, c. 47, s. 27; 1984, c. 39, s.
11], the section which Parliament adopted in 1978
to provide protection for non-unionized employees
in undertakings under its jurisdiction against the
possibility of unjust dismissal, similar to the provi
sion always included by unionized employees in
their collective agreements. The section (which I
prefer to reproduce as an appendix because of its
length, especially as there is no need to know all its
provisions for these purposes) provides that on a
complaint by an employee who "considers his dis
missal to be unjust" the Minister, if mediation by
an inspector is unsuccessful, may appoint an
adjudicator who, if he considers that the complaint
is valid, will consider and impose one or more
remedies which seem appropriate to him, including
reinstatement. The chief difficulty, but also the
special importance of the application before the
Court, is that in my opinion the answer to it
requires the Court to take a position on some of
the less well-explored and more ill-defined aspects
of the new recourse, an exception to the ordinary
law, provided by this action for unjust dismissal
under section 61.5 of the Canada Labour Code.
The facts underlying the case are somewhat
unusual but not really complicated. On February
8, 1980 five people, wearing head masks and
armed, burst into a branch of the appellant Bank,
used violence to subdue its occupants, seized some
cash and fled. This was the second armed robbery
at the same branch of the Bank in the space of
three weeks, and the employees were able to recog
nize the same robbers as on the first occasion, led
by the same leader. The new information, taken
with that already obtained, served to confirm the
suspicions of the police officers who were sum
moned regarding one Régis Beaulieu, a repeat
offender, whose record already included two rob
beries. The police decided to act on their suspi-
cions and went at once to the residence of the
suspect, which had already been located. Their
intuition proved to be correct: when they burst into
the apartment Beaulieu and his four accomplices
were in the process of dividing the spoils of their
robbery, and the weapons and other items they had
used were only partly hidden. The five men were
naturally arrested and all eventually pleaded
guilty. During their investigation, however, the
police realized that the apartment in which Beau-
lieu lived and where he was apprehended was in
fact also the apartment of Jacqueline Chayer, his
common law wife with whom he had been cohabit
ing for several years, and that this Jacqueline
Chayer was a managerial employee of the Bank,
where she worked as an accountant in one of the
branches. Three days later, Jacqueline Chayer's
superiors told her that she could not continue
working for the Bank and that she was forthwith
dismissed. Those are the facts: we may now look at
the proceedings.
Protesting her innocence and refusing to submit
passively to her employer's reaction, Jacqueline
Chayer decided to make use of the new remedy
introduced in 1978 by the provisions of section
61.5 of the Labour Code. She filed a complaint
with an inspector, stating that she considered that
she had been unjustly dismissed. The inspector not
surprisingly failed in his mediation and the Minis
ter quickly had to appoint an adjudicator to hear
and dispose of the complaint. At the hearing the
Bank called a long series of witnesses, including
three security experts, to establish that in view of
its great vulnerability to armed robbery it could
not keep as a managerial employee—meaning an
employee who was at all times aware of all the
ramifications of the security system at branches of
the Bank—the common law wife of an apparently
hardened bank robber who was also the leader of a
gang. It maintained that a conflict of interests
existed which justified it in unilaterally terminat
ing the contract of employment. The Adjudicator
was not impressed by this argument: at the close of
the hearing he found the dismissal to be totally
unjustified and directed the Bank to pay its former
employee an indemnity equivalent to the salary she
would have earned during the sixteen months
which had elapsed if she had not been laid off,
adding that he did not also order her to be rein
stated simply because the complainant herself had
not requested it. There is no doubt, since the
judgment of this Court in Pioneer Grain Co. Ltd.
v. Kraus, [1981] 2 F.C. 815 (C.A.), that the
decision of an adjudicator pursuant to section 61.5
of the Labour Code continues to be subject to the
full powers of review of section 28, despite the
privative clause of subsection 61.5(10). The Bank
accordingly lost no time in filing the application at
bar to review and set aside the Adjudicator's
decision.
Naturally, the validity of the Adjudicator's deci
sion must be determined on the basis of the rea
sons which he gave to explain his approach and to
support his findings. These reasons are very exten
sive, occupying over forty pages, but I think that to
assess their content and be in a position to discuss
them it will suffice if one knows them in outline
and sees clearly the very simple reasoning they
contain. The Adjudicator started from the premise
that "just cause" in section 61.5 of the Canada
Labour Code "necessarily implies that the
employee is personally responsible", and that the
best definition that can be given is that applied in
an earlier case, R. v. Arthurs, Ex p. Port Arthur
Shipbuilding Co., [1967] 2 O.R. 49; 62 D.L.R.
(2d) 342 (Ont. C.A.) [at page 55 O.R.; 348
D.L.R.] (per Schroeder J.A.), and stated as
follows:
If an employee has been guilty of serious misconduct, habitu
al neglect of duty, incompetence, or conduct incompatible with
his duties, or prejudicial to the employer's business, or if he has
been guilty of wilful disobedience to the employer's orders in a
matter of substance, the law recognizes the employer's right
summarily to dismiss the delinquant employee.
The Adjudicator then proceeded to summarize the
testimony to show that it provided no evidence that
the complainant gave the man she was living with
confidential information regarding security meas
ures: the Bank therefore could not, he said, charge
her with participating in the robberies. It also
could not, the Adjudicator continued, talk of a
conflict of interests, as it is not possible to talk of a
conflict of interests without a specific wrongful act
by the employee, an act which "can be regarded as
misconduct, as a wrongful act", and the mere fact
that the complainant lived with the man, whom
she loved and wanted to help, did not constitute
such an act. Ascribing any blame whatever to her
would be to make the wrongful act of the man she
was living with her own, and to "establish as
dogma the principle that one person is responsible
for the wrongful act of another". Finally, the
Adjudicator dismissed the suggestion that this was
an administrative dismissal, since he said that a
dismissal "is said to be administrative in very
special circumstances, circumstances which raise a
question as to either the employee's physical abili
ty to perform his work or his imcompetence", and
nothing of the kind was suggested here. Having
thus dismissed all the arguments of the Bank, the
Adjudicator had no difficulty concluding that the
dismissal had been a flagrant injustice and should
be compensated for in full.
I should mention, incidentally, that in deciding
on the scope of the remedies to be imposed the
Adjudicator forgot the agreement reached at the
outset, and accepted by him, that only the question
of whether the complaint was valid would be con
sidered to begin with, and that of proper compen
sation, if it arose, would be subject of a subsequent
hearing. To the extent that it imposed the payment
of an indemnity, therefore, the decision was not
rendered in strict compliance with the rules of
natural justice (Corporation Dicom v. Petit, judg
ment dated November 21, 1984, Federal Court,
Appeal Division, A-413-84, not yet reported; leave
to appeal denied: [1985] 1 S.C.R. vii): in this
respect it cannot stand. However, for the moment
this Court is concerned with its findings as to the
validity of the complaint.
Thus, in explaining his approach the Adjudica
tor did dismiss the possibility of applying to the
facts of the cast at bar concepts such as "conflict
of interests" and "administrative dismissal", but
he dealt with these points, incidentally and as a
supplementary aspect, because he was required to
do so by the argument of the Bank. The real basis
of the position he adopted is contained entirely in
his initial proposition, namely that apart from
cases of physical or mental disability any dismissal
of an employee not based on a reprehensible and
wrongful act committed by the employee is unjust
within the meaning of section 61.5 of the Code and
so subject to penalty. Is this proposition of law a
valid one? If it is, then the reasoning is unassail
able and the conclusion drawn from it by the
Adjudicator can only be upheld, for all that
remains is to weigh the evidence, with which this
Court is not concerned. Further, I do not think
that the Bank was ever so naive as to think that it
could show the respondent had revealed the secu
rity measures in effect at its branches or had
otherwise contributed to commission of the robber
ies (in any case, it should then have taken action in
the criminal courts), and I take it that no one
would suggest for a moment that the fact of living
with a criminal is in itself a reprehensible act. On
the other hand, if this initial legal proposition of
the Adjudicator is not valid then the reasoning is
in error and cannot as such support the conclusion.
That is therefore the major question raised by this
appeal.
It is commonplace that the introduction of the
remedy pursuant to section 61.5 of the Code in
1978 was a very major step in the transformation
undergone by labour law applicable to federal
undertakings since the time it was still founded on
purely liberal concepts based on the theory of
freedom of contract. Certainly the employer's
right to terminate the contract of an employee was
already far from being unfettered (prior notice,
severance pay) and the common law courts no
longer hesitated to apply the theory of abuse of
right to penalize the excessive use of the right of
dismissal by an employer. However, once the sec
tion 61.5 remedy was in place it was no longer
possible, as it had been formerly, to treat the right
of dismissal as being of the very essence of an
indefinite contract of employment; it also was no
longer possible to speak of freedom of contract in
this connection, as the new legislation was said to
be a matter of public policy' and as such unaffect
ed by the language of the contract of employment.
1 As a consequence of subsection 28(1) [as am. by S.C.
1977-78, c. 27, s. 3], applicable to all the provisions of Part III
of the Code (which includes section 61.6); the subsection reads:
28. (1) This Part and all regulations made under this Part
apply notwithstanding any other law or any custom, contract or
arrangement, but nothing in this Part shall be construed as
affecting any rights or benefits of an employee under any law,
custom, contract or arrangement that are more favourable to
him than his rights or benefits under this Part.
Even more dramatic was the fact that not only
could the employer no longer consider terminating
its employee's contract at will, it might even in
future be compelled to have an employee it did not
want. Any unjustly dismissed employee (unless a
member of management within the meaning of
subsection 27(4)) now had a means of ensuring
reinstatement in his or her employment in addition
to full monetary compensation. The Act did not
define the concept of unjust dismissal, but it was
one not unknown to the ordinary courts of law and,
it was undoubtedly argued, could be defined in
practice. (See the comments of I. Christie in his
bookEmployment Law in Canada, Toronto, But-
terworths, 1980, pages 379 et seq and of C. G.
Simmons in his paper The Experience of the
Unjust Dismissal Section, under Section 61.5 in
The Canada Labour Code 1978-1981, published
by the Industrial Relations Centre of Queen's
University, Kingston in 1981,)
As can be seen, the Adjudicator's initial proposi
tion, the validity of which is at issue, takes a firm
position on the content of this concept of unjust
dismissal referred to in section 61.5. In his view,
any dismissal not based on a reprehensible and
wrongful act by the employee is unjust. If the
section 61.5 remedy were only available in cases of
disciplinary dismissals—as might at first sight be
inferred from the use of the word "dismissal",
which in current usage suggests initially (as does
the French word "congédiement") the idea of a
penalty, of being thrown out—the Adjudicator's
proposition would be prima facie irrefutable. A
person cannot be disciplined and punished for
anything other than an act committed by that
person himself and attributable to him. However,
it is clear that practice and precedent have never
seen it in this way. Since its inclusion in the Code,
the section 61.5 remedy has been used by
employees laid off on grounds other than discipli
nary ones. The concepts of administrative dismis
sal and conflict of interests discussed in the
Adjudicator's decision were developed specifically
in relation to complaints by employees dismissed
on grounds other than disciplinary ones. As I
understand the decisions of the adjudicators, an
"administrative dismissal" is a non-disciplinary
dismissal which may be justified by the employer
on the basis, among other things, of the employee's
incompetence or physical or mental disability, and
a "conflict of interests" has long been recognized
and advanced as a reason for dismissal. I think it is
now well established that any unilateral termina
tion by an employer of the contract of employment
binding him to his employee falls within section
61.5, the only exception being the lay-off of
employees who have become redundant, which is
expressly covered earlier in the Code. The full
meaning of the Adjudicator's proposition can thus
be seen: aside from cases of incompetence and
disability, the fact that there has been no personal
wrongful act by an employee (which in his opinion
is even implicit in the concept of a conflict of
interests) will suffice to make a dismissal wrongful
and unjust. This is a proposition to which I cannot
subscribe.
I find nothing in the Act to suggest that, by
creating the section 61.5 remedy, Parliament
intended to give an employee with one year's ser
vice a right over his employment so absolute that it
can almost be regarded as a right of ownership
(since he can have himself reinstated), and the
effect of which would be not only security of
employment but the quasi-abolition of the employ
er's rights and freedoms. I have no hesitation in
saying that the new section 61.5 remedy left far
behind it the traditional common law remedy and
its abuse of right doctrine. The very right of
dismissal has been completely altered to preclude
arbitrary action by the employer and to ensure
continuity of employment. Only a right of "just"
dismissal now exists, and this certainly means
dismissal based on an objective, real and substan
tial cause, independent of caprice, convenience or
purely personal disputes, entailing action taken
exclusively to ensure the effective operation of the
business; but I feel that going beyond that, as the
Adjudicator did, is in the present state of the law
without foundation and erroneous. It is undoubted
ly a very difficult matter to justify dismissal under
section 61.5, but in my view this can still be done
outside cases of incompetence or disability or seri
ous misconduct on the part of the employee.
Accordingly, the reasoning on the basis of which
the Adjudicator refused to recognize that the dis
missal could have been justified in the circum
stances seems to me to be invalid because it is
based on a false premise. It is true that his conclu
sion might, in spite of everything, be the right one,
and that in fact the justification relied on by the
Bank could in itself be inconsistent with the
requirements of section 61.5. The Adjudicator's
error would then be without significance. How
ever, I do not think that is the case. The Bank
showed with the aid of expert testimony the prob
lems which continuing the respondent's contract of
employment would have caused for it and the risk
that doing so represented for such an institution.
The Adjudicator did recognize the validity of this
evidence, but his approach to the matter prevented
him from considering it. "I understand", he wrote
at the end of his decision (page 37), "the problems
which the Bank may face ... but .. . these prob
lems must be dealt with by the Bank if it had
nothing with which to charge the complainant." In
my opinion the justification relied on by the Bank
met the requirements of section 61.5. I do not see
how it is possible to speak of a conflict of interests,
as suggested by counsel for the Bank in their effort
to bring their case within a recognized classifica
tion. I think it is better to reserve the concept of a
conflict of interests for a situation in which an
employee engages in activities which are external
and parallel to those he performs as part of his job,
and which conflict or compete with the latter.
However, I think one can speak of the loss by the
employee of a characteristic or attribute which
might reasonably be regarded as necessary for
carrying out the employment, resulting in a loss of
confidence by the employer such that ordinary
employer-employee relations could not continue. I
think it is clear from reading the Adjudicator's
observations on the testimony heard that if his
interpretation of the law had been what I regard as
the right one, he would undoubtedly have recog
nized that the objective, real and substantial cause
required by section 61.5 was in fact present, and I
do not think there is any need to return the case to
him just to determine whether my impression is
correct in this regard.
In my view this finding is conclusive. I know
that it might well be said that, even if valid
grounds existed for terminating the contract, the
Bank should have paid some compensation in lieu
of prior notice. That is a question which might
arise in a common law action based on the theory
of abuse of right, or even on the respondent's
contract of employment providing for three
months' prior notice in the event of termination by
the Bank without "good and sufficient reason" (a
phrase which, connected expressly with the idea of
prejudicial conduct, might be interpreted in the
sense of fault—the contract is set out in the appeal
record at pages 412 and 413). However, in an
action like the one at bar based on section 61.5 of
the Code, this question does not appear to be
relevant as the powers of the Adjudicator to
impose a penalty only exist in so far as he can
determine that the dismissal itself was unjustified.
I therefore consider that the Court should allow
the application at bar and set aside the decision of
the Adjudicator, and that it should refer the
matter back to be again decided by him on the
basis that the applicant had a good reason for
terminating the respondent's employment, and
that therefore the dismissal of the latter in the
circumstances was not unjust within the meaning
of section 61.5 of the Code.
Appendix
UNJUST DISMISSAL
61.5 (1) Subject to subsections (2) and (3), any person
(a) who has completed twelve consecutive months of contin
uous employment by an employer, and
(b) who is not a member of a group of employees subject to a
collective agreement
may make a complaint in writing to an inspector if he has been
dismissed and if he considers his dismissal to be unjust.
(2) Subject to subsection (2.1), a complaint under subsection
(1) shall be made within ninety days from the date on which
the person making the complaint was dismissed.
(2.1) Where the Minister is satisfied that
(a) a person referred to in subsection (1) made, within the
time referred to in subsection (2), a complaint in writing
referred to in subsection (1) to a government official believed
by the person to have authority to deal with the complaint,
and
(b) the government official in fact had no authority to deal
with the complaint,
the Minister may extend the time referred to in subsection (2)
for the making of the complaint under this section.
(3) No complaint shall be considered by an adjudicator
under subsection (8) in respect of a person where
(a) the person has been laid off because of lack of work or
because of the discontinuance of a function; or
(b) a procedure for redress has been provided elsewhere in or
under this or any other Act of Parliament.
(4) Where an employer dismisses a person described in
subsection (1), the person who was dismissed or any inspector
may make a request in writing to the employer to provide him
with a written statement giving the reasons for the dismissal,
and any employer who receives such a request shall provide the
person who made the request with such a statement within
fifteen days after the request is made.
(5) On receipt of a complaint made under subsection (1), an
inspector shall endeavour to assist the parties to the complaint
to settle the complaint or cause another inspector to do so, and,
where the complaint is not settled within such period as the
inspector endeavouring to assist the parties considers to be
reasonable in the circumstances, the inspector so endeavouring
shall, on the written request of the person who made the
complaint that the complaint be referred to an adjudicator
under subsection (6),
(a) report to the Minister that he has not succeeded in
assisting the parties in settling the complaint; and
(b) deliver to the Minister the complaint made under subsec
tion (1), any written statement giving the reasons for the
dismissal provided pursuant to subsection (4) and any other
statements or documents he has that relate to the complaint.
(6) The Minister may, on receipt of a report pursuant to
subsection (5), appoint any person he considers appropriate as
an adjudicator to hear and adjudicate upon the complaint in
respect of which the report was made, and refer the complaint
to the adjudicator along with any written statement giving the
reasons for the dismissal provided pursuant to subsection (4).
(7) An adjudicator to whom a complaint has been referred
under subsection (6)
(a) shall consider the complaint within such time as the
Governor in Council may by regulation prescribe;
(b) shall determine his own procedure, but shall give full
opportunity to the parties to the complaint to present evi
dence and make submissions to him and shall consider the
information relating to the complaint referred to him under
subsection (6); and
(c) has, in relation to any complaint before him, the powers
conferred on the Canada Labour Relations Board, in relation
to any proceeding before the Board, by paragraphs 118(a),
(b) and (c).
(8) An adjudicator to whom a complaint has been referred
under subsection (6) shall consider whether the dismissal of the
person who made the complaint was unjust and shall render a
decision thereon and send a copy of the decision with the
reasons therefor to each party and to the Minister.
(9) Where an adjudicator decides pursuant to subsection (8)
that a person has been unjustly dismissed, he may, by order,
require the employer who dismissed him to
(a) pay the person compensation not exceeding the amount
of money that is equivalent to the remuneration that would,
but for the dismissal, have been paid by the employer to the
person;
(b) reinstate the person in his employ; and
(c) do any other like thing that it is equitable to require the
employer to do in order to remedy or counteract any conse
quence of the dismissal.
(10) Every order of an adjudicator appointed under subsec
tion (6) is final and shall not be questioned or reviewed in any
court.
(11) 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 of his proceedings
under this section.
(12) Any person affected by an order of an adjudicator under
subsection (9), or the Minister on the request of any such
person, may, after fourteen days from the date on which the
order is made, or the date provided in it for compliance,
whichever is the later date, file in the Federal Court of Canada
a copy of the order, exclusive of the reasons therefor.
(13) On filing in the Federal Court of Canada under subsec
tion (12), an order of an adjudicator shall be registered in the
Court and, when registered, has the same force and effect, and
all proceedings may be taken thereon, as if the order were a
judgment obtained in that Court.
(13.1) The Governor in Council may make regulations for
the purposes of this Division defining the absences 'from
employment that shall be deemed not to have interrupted
continuity of employment.
(14) No civil remedy of an employee against his employer is
suspended or affected by this section.
(15) Section 45 applies for the purposes of this Division.
* * *
The following is the English version of the
reasons for judgment rendered by
MACGUIGAN J.: This is a section 28 application
to review and set aside a decision of a grievance
adjudication tribunal ("the tribunal" or "the
Adjudicator") pursuant to the Canada Labour
Code. The Adjudicator held that a bank did not
have the right to dismiss a managerial employee
who was cohabiting with someone involved in ille
gal activity contrary to the interests of the bank.
The respondent Jacqueline Chayer ("the
respondent") was hired by the Canadian Imperial
Bank of Commerce ("the applicant" or "the
Bank") in 1974. At the time of her dismissal on
February 11, 1980 she was a managerial employee
of the Bank, specifically an assistant administra
tion supervisor in a Montréal branch of the Bank.
The respondent met Régis Beaulieu in 1976 and
began cohabiting with him in November of that
year. In April 1977 Beaulieu and the respondent
became engaged. Their common domicile was
interrupted for seventeen months: while Beaulieu
served a term in prison, from May 1978 to March
1979, the respondent returned to her parents'
home and did not resume cohabiting with him
until October 1979. However, the respondent con
tinued visiting Beaulieu while he was in prison.
Beaulieu's past was, to say the least, a che
quered one: he was sentenced to ten months in
prison for robbery committed on July 12, 1977 at a
"Chicken Villa", and was also sentenced to seven
days in prison for having eight marijuana ciga
rettes in his possession on November 4, 1977; he
was charged with having committed robbery on
November 15, 1979 in a Steinberg supermarket,
and was released on this charge at the preliminary
inquiry for lack of evidence; at the time the
respondent was dismissed, he had also been
charged with a third robbery committed on
November 23, 1979. The respondent furnished bail
for Beaulieu and he was released; after the
respondent was dismissed in spring 1980, Beaulieu
was found guilty of the third robbery and sen
tenced to fifteen months in prison.
In early 1980 two robberies occurred at the
same branch of the Bank in St. Lambert, two
weeks apart. Each time more than $6,000 was
taken. In the first robbery on January 25, 1980
two Bank employees were wounded by shots from
a sawed-off shotgun.
Some seven to eight minutes after the second
robbery was committed on February 8, 1980, the
police broke into the respondent's residence. They
proceeded to arrest five suspects, including Beau-
lieu, and to seize a revolver and a sawed-off shot
gun. At the time of their arrest, the suspects were
counting the money which they were about to
divide. The respondent was told of the day's events
by two policemen when she returned to her
apartment.
On February 11, 1980 the Bank demanded that
the respondent resign, or she would be dismissed.
The respondent rejected this ultimatum and was
dismissed at once. The respondent filed a com
plaint for unjust dismissal on March 7, 1980 with
the federal Department of Labour, pursuant to
subsection 61.5(1) of the Canada Labour Code.
The complaint was referred to adjudication by the
Minister of Labour pursuant to subsection 61.5(6)
of the said Code. It is this decision by the
Adjudicator, Mr. Boisvert, which is the subject of
the application to review and set aside now before
the Court.
The decision by the Adjudicator was as follows:
I must thus consider whether the Complainant's dismissal
was 'lust or unjust, and in so doing, I must ask myself what may
constitute a just cause for dismissal within the meaning of the
statute.
The concept of "just cause"
The concept of "just cause" is clearly defined by Professor
Palmer in his work entitled Collective Arbitration in Canada,
in which he tells us that "just cause" implies the necessity of
the employee's individual responsibility. He has the following to
say on this subject:
Central to the theory of just cause is the view that employees
can only be disciplined or discharged for their own shortcom
ings; an employer cannot make "examples" of employees by
picking persons at random or, failing to find a specific culprit
in a group of employees disciplining all of them.
As it is often difficult for an employer to determine culpabili
ty with any accuracy, one can appreciate that this concept is
often disregarded by them. However, such difficulty does not
provide an excuse for an employer to avoid this stricture:
employees who cannot be differentiated on a factual basis,
cannot be differentiated in relation to discipline, even if this
means wrong-doers go free. Thus, if a group produces poor
work, the whole group cannot be disciplined, individual
responsibility must be ascertained.
What this means is that labour law, like criminal law,
enshrines the notion that an individual is not responsible for the
actions of others. The following comments of Mr Jacques
Fortin, in his Traité de droit criminel, therefore applies, in my
opinion, to Canadian labour law:
Both common law and Canadian law recognize the principle
of imputing the offending act to the individual. Thus, crimi
nal responsibility is attributed to a person only for an act
which he himself commits. The common law rule is set out in
a judgment dating from 1730:
It is a point not to be disputed but that in criminal cases
the principal is not answerable for the act of his deputy, as
he is in civil cases; they must each answer for their own
acts and stand or fall for their behavior.
I consider that in labour law, the complainant can be held
responsible only for her own acts, and not for acts that she did
not commit, acts committed by third parties. Just cause thus
necessarily implies a personal action by the employee.
In this regard, I agree with the definition of just cause cited
by the Complainant, a definition provided by the Ontario Court
of Appeal in R C Arthurs, which reads as follows:
If an employee has been guilty of serious misconduct, habitu
al neglect of duty, incompetence, or conduct incompatible
with his duties, or prejudicial to the employer's business, or
has been guilty of wilfull disobedience to the employer's
orders in a matter of substance, the law recognizes the
employer's right summarily to dismiss the delinquent
employee.
I intend to begin by analysing the evidence in order to
discover whether it shows that the Complainant personally
committed an act of some sort which would justify her
dismissal.
Analysis of the evidence
The evidence shows that the Complainant was an administra
tive employee who, like any other employee in the bank, knew
about the security measures to counter robberies, which accord
ing to the testimony of experts are the main security concern of
any bank. However, while the evidence shows that the Com
plainant was hired in 1974, it does not show that during her
period of employment, she ever informed anyone of one or more
of the security measures known to her, which would surely have
constituted an offence calling for punishment.
The evidence shows, then, that Beaulieu, in February 1980,
had been sentenced only once for a robbery, and that he had a
case pending before the courts. It does not show that the
Complainant participated in these various offences in any
manner. And I would point out that it was not until the spring
of 1980 that Beaulieu was sentenced for the armed robbery of
November 29, 1979, that is, after the Complainant was dis
missed by the Respondent.
The evidence shows that Beaulieu committed two robberies
in a branch of the Bank of Commerce, one toward the end of
January and the other on February 8, 1980. It does not show
that the Complainant was aware of these robberies prior to
Beaulieu's arrest at the apartment which the couple shared. In
short, with respect for the contrary opinion, the evidence does
not show that in February 1980, the Complainant was living
with an habitual bank robber, but rather with someone who
had suddenly begun to rob banks, unbeknownst to the Complai
nant. I see absolutely nothing that the Complainant did up to
that point that would constitute a wrongful act.
While the Bank was entitled to require of the Complainant a
relationship of absolute confidence in security matters, no
evidence was presented to the effect that she did anything to
make herself unworthy of this confidence.
Can it be held that the way in which Beaulieu committed his
robberies indicates that the Complainant gave him, even unin
tentionally, confidential information security measures?
I should state at the outset that it is true, as the Respondent
maintains, that the degree of evidence required in labour law is
not the same as in criminal law, and that the preponderance of
the evidence is - sufficient to prove the allegations that it has
made against the Complainant. But this does not mean that the
Respondent can be satisfied with suspicions. In labour law,
evidence is evidence and a suspicion is a suspicion. In labour
law, as in criminal law, a thousand suspicions can never consti
tute valid evidence.
The Bank has presented evidence before me on the manner in
which Beaulieu committed his crimes, but with respect for the
contrary opinion, nothing conclusive can be drawn from this
evidence to show that the Complainant even unintentionally
gave him confidential information. The evidence cannot cause a
logical mind to conclude reasonably that the Complainant gave
Beaulieu, even unintentionally, any indication whatsoever as to
the security measures in use at the Bank.
Thus, I truly cannot seriously deduce that the Complainant
must have told Beaulieu that the branches were equipped with
cameras from the mere fact that the latter committed a robbery
in disguise. Nor can I deduce that she told him that the
employees had instructions not to resist in the event of robbery,
from the mere fact that Beaulieu fired shots. Nor can I deduce
that she gave him confidential information from the mere fact
that he attacked a branch which had never before been robbed,
or again from the mere fact that he did not linger over the
timed locks. All this information may have been acquired by
looking over the premises in advance. While they may arouse
certain suspicions with respect to the Complainant, they cannot
constitute evidence worthy of the name, linking the Complai
nant in any manner whatsoever to the planning of these crimes.
Nor can I draw any conclusion from the fact that during the
robbery, Beaulieu remained at the door of the manager's office,
that is, in a place where he could keep an eye on a control box
signaling that the alarm had been set off, which constituted a
means of determining when he should take flight. Witness
Pierre Hainault, manager of the Bank's security department,
states that this was a circumstance peculiar to this branch—a
particular circumstance about which the Complainant would
not normally have known and which she could not therefore
have communicated to Beaulieu.
In addition, I certainly cannot take account of the fact that
the Complainant borrowed $1,000.00 from the Bank during the
holiday season in 1979, in order to uphold seriously the argu
ment that she needed money and that this was a reason why she
must have helped Beaulieu.
Finally, even if I give credence to the testimony of Captain
Lambert, who states that Beaulieu told Detective Salvas that
"Jacqueline told me to watch out, that I was being followed by
the police", I cannot deduce solely from these words, reported
out of their context, that the Complainant was giving her
support to Beaulieu's reprehensible actions. These words are as
consistent with the Complainant advising Beaulieu that he
ought to behave properly as with her advising him to take more
care in committing his theft.
While the evidence tells me that the Complainant may have
given confidential information to Beaulieu (and several factors
listed by the witness Forgues applied to her), the same evidence
does not enable me to conclude that she actually provided such
information, even unintentionally. The evidence thus does not
point to any wrongful act on the part of the Complainant.
Can I conclude that the relationship of confidence between
the Bank and the Complainant was broken because of the
existence of a conflict of interest?
The Bank is surely aware of the flimsiness of its argument,
since it argues lastly, not that the Complainant committed a
particular offence—that she disclosed, even unintentionally,
confidential information to her living partner—but rather that
she was in a conflict of interest situation merely because she
was living with Beaulieu. It argues that the mere fact that an
employee lives with someone who has committed a robbery
places him in a situation in which he breaks the bond of
confidence that binds him to his employer, without it being
necessary to prove a specific instance of wrongdoing.
With respect for this opinion, it cannot be accepted. A
conflict of interest can arise only from a specific action taken
by an employee, an action which in itself may be considered as
an instance of misconduct or wrongdoing on his part. It cannot,
however, arise in the absence of an action on the part of an
employee. It cannot arise from the action of a third party. This,
moreover, is how Brown and Beatty define conflict of interest:
There are certain other forms of misconduct which, if proper
ly proven, have been found to evidence a lack of trustworthi
ness for which an employee may properly be disciplined or
discharged. Thus, the unauthorized removal or use of an
employer's confidential documents, where it is only reason
able for the employee to assume the documents were confi
dential, has been held by arbitrators to be dishonest conduct
for which some discipline may properly be invoked. So too,
where an employee accepts moneys from contractors with
whom his employer does business, or purchases goods, at
wholesale prices for his own personal use by using the
company's name, he may be liable to disciplinary sanctions.
At the root of any conflict of interest, there is thus a
wrongful act which an employee must have taken in relation to
his employer. In the case before me, however much I sought the
wrongful act, I was unable to find it. I cannot maintain that the
Complainant's remaining with Beaulieu after his imprisonment
in 1979 was a wrongful act, since she loved him and wanted to
help him; this would deny the Complainant the right to lead,
outside of work, the emotional life that seemed right to her; it
would also deny that an individual who has served a prison
term, and who has thus paid his debt to society, is entitled to
resume a normal life.
Furthermore, to accept the Respondent's line of argument
could lead to absurd situations. If it is true that the Complai
nant was aware of the Bank's security measures, and if she
must be considered to be in a conflict of interest merely because
she lived with an individual who had previously been found
guilty of armed robbery, it would be necessary to apply the
same reasoning to another employee whose son committed a
robbery, and in that case, why not the employee whose cousin
or close friend did so? This would amount to enshrining the
principle of responsibility for the wrongdoing of others.
Moreover, if this line of argument were to be accepted with
respect to robbery, why should it not be extended to other
crimes, such as fraud, breaking and entering, etc? And why
should it not apply to businesses and other institutions which
also have confidential security measures, such as a jewelry
business, for example? Clearly, such a line of reasoning could
easily lead to inequity and injustice for an employee who,
without any wrongdoing on his part, has friends or relatives
who commit crimes.
Thus, if the Complainant did not commit any wrongful act,
she cannot be in conflict of interest, merely because her living
partner committed a wrongful act.
The Respondent has compared the Complainant's situation
with that of a magistrate who cannot sit in a case involving one
of his former clients, not because he would be biased, but
because there is a possibility that he would be so. The compari
son is a clever one, but it does not hold up under scrutiny.
While it is true that a magistrate cannot sit in a case involving
one of his relatives or former clients, this is because to do so
would constitute misconduct on his part. Case law and statu
tory law have established the principle that a magistrate cannot
sit in such cases, not because justice will not be done, but
because justice must be seen to be done. It is the fact of
disobeying this rule of conduct which, for a magistrate, consti
tutes misconduct. However, in the present case, the Complai
nant committed no act that was unlawful or contrary to the law
by remaining with Beaulieu, the man she loved. She perhaps
put herself in a situation in which she could more easily commit
a wrongful act by disclosing security measures known to her,
but she did not commit a wrongful act if she did not disclose
them.
While the Respondent is right in arguing, as the Court of
Appeal recalled in Control Data Canada Limitée v Jean-Paul
Lalancette, that the individual contract of employment is based
on the relationship of confidence which must exist between
employer and employee, and also in arguing that an employer
may rid itself of an employee in whom it no longer has
confidence, it is nevertheless necessary for the alleged severance
of the bond of confidence to be based on legal and acceptable
reasons, and on the actual actions of the employee. However, in
the present case, the severance of the relationship of employ
ment is based, not on the actions of the Complainant, but on
those of the Complainant's living partner, and this severance is
in my opinion unlawful. In short, the relationship of confidence
that must exist between an employee and his employer must not
be broken because of a mere whim on the employer's part;
rather, any such severance must be based on an act or omission
on the part of the employee.
The Respondent argues, however, that it would be unrealistic
and unreasonable for me to rescind the Complainant's dismis-
sal, since the Bank is entitled to refuse to employ someone who
is aware of its security measures and who lives with an
individual who commits robberies. While a bank may refuse to
hire someone who, in its opinion, represents a risk to its
security, and while its right to refuse to hire is subject to no
limitation, this is not the case where it wishes to dismiss an
employee who enjoys the protection provided by statute. In the
latter case, the bank's right is limited by the requirement of
"just cause" for dismissal, and the Bank has failed to show
"just cause".
I understand the problems that the Bank may encounter in
being obliged to continue to employ an employee whose hus
band or living partner has committed a robbery. But these
problems are the price that must be paid in order to prevent
dismissal from being an arbitrary matter. The Bank must
endure these problems if it has no case against the
Complainant.
Since the Complainant was unjustly dismissed, I must there
fore determine what measures I consider just to compensate the
harm caused her.
Corrective action sought
It is subsection (9) of section 61.5 of the Canada Labour
Code which determines what order I can make against an
employer in the event of unjust dismissal. This subsection reads
as follows:
(9) Where an adjudicator decides pursuant to subsection (8)
that a person has been unjustly dismissed, he may, by order,
require the employer who dismissed him to
(a) pay the person compensation not exceeding the amount
of money that is equivalent to the remuneration that would,
but for the dismissal, have been paid by the employer to the
person;
(b) reinstate the person in his employ; and
(c) do any other like thing that is equitable to require the
employer to do in order to remedy or counteract any conse
quence of the dismissal.
I wish to state immediately that if the Complainant had
asked to be reinstated in her position, I would have granted her
request. Indeed, the only reason why I am not ordering rein
statement is that such an action was not requested.
However, the Complainant was treated unjustly, and it
would not be equitable for her to suffer any monetary loss
because of the dismissal. Considering the injustice done to her,
I therefore consider it necessary to order the Employer to
compensate her fully for any loss of remuneration resulting
from her unjust dismissal, and accordingly to provide for the
obligation for the Bank to pay her damages equal to the
remuneration of which she was deprived from the date of her
dismissal until August 12, 1981.
Accordingly, I uphold the Complainant's complaint;
I find that she was dismissed without just and sufficient
cause;
I rescind the dismissal;
I order the Employer to compensate her for the remuneration
she lost, from the date of her dismissal until August 12, 1981
(date agreed upon by the parties, by consent, as representing
the end of any quantum), with deductions of course being made
for any amounts of money that she earned from another
employer during the same period, the whole bearing interest at
the legal rate;
and with the consent of the parties, I reserve my jurisdiction
to rule on any difficulty in determining the compensation
provided for in the preceding paragraph.
The applicable legislation is contained in the
Canada Labour Code, as follows:
UNJUST DISMISSAL
61.5 (1) Subject to subsections (2) and (3), any person
(a) who has completed twelve consecutive months of contin
uous employment by an employer, and
(b) who is not a member of a group of employees subject to a
collective agreement
may make a complaint in writing to an inspector if he has been
dismissed and if he considers his dismissal to be unjust.
(5) On receipt of a complaint made under subsection (1), an
inspector shall endeavour to assist the parties to the complaint
to settle the complaint or cause another inspector to do so, and,
where the complaint is not settled within such period as the
inspector endeavouring to assist the parties considers to be
reasonable in the circumstances, the inspector so endeavouring
shall, on the written request of the person who made the
complaint that the complaint be referred to an adjudicator
under subsection (6),
(a) report to the Minister that he has not succeeded in
assisting the parties in settling the complaint; and
(b) deliver to the Minister the complaint made under subsec
tion (1), any written statement giving the reasons for the
dismissal provided pursuant to subsection (4) and any other
statements or documents he has that relate to the complaint.
(6) The Minister may, on receipt of a report pursuant to
subsection (5), appoint any person he considers appropriate as
an adjudicator to hear and adjudicate upon the complaint in
respect of which the report was made, and refer the complaint
to the adjudicator along with any written statement giving the
reasons for the dismissal provided pursuant to subsection (4).
(7) An adjudicator to whom a complaint has been referred
under subsection (6)
(a) shall consider the complaint within such time as the
Governor in Council may by regulation prescribe;
(b) shall determine his own procedure, but shall give full
opportunity to the parties to the complaint to present evi
dence and make submissions to him and shall consider the
information relating to the complaint referred to him under
subsection (6); and
(c) has, in relation to any complaint before him, the powers
conferred upon the Canada Labour Relations Board, in
relation to any proceeding before the Board, by paragraphs
118(a), (b) and (c).
(8) An adjudicator to whom a complaint has been referred
under subsection (6) shall consider whether the dismissal of the
person who made the complaint was unjust and shall render a
decision thereon and send a copy of the decision with the
reasons therefor to each party and to the Minister.
(9) Where an adjudicator decides pursuant to subsection (8)
that a person has been unjustly dismissed, he may, by order,
require the employer who dismissed him to
(a) pay the person compensation not exceeding the amount
of money that is equivalent to the remuneration that would,
but for the dismissal, have been paid by the employer to the
person;
(b) reinstate the person in his employ; and
(e) do any other like thing that it is equitable to require the
employer to do in order to remedy or counteract any conse
quence of the dismissal.
(10) Every order of an adjudicator appointed under subsec
tion (6) is final and shall not be questioned or reviewed in any
court.
122. (1) Subject to this Part, every order or decision of the
Board is final and shall not be questioned or reviewed in any
court, except in accordance with paragraph 28(1)(a) of the
Federal Court Act.
The power of this Court to review and set aside
is contained in subsection 28(1) of the Federal
Court Act [R.S.C. 1970 (2nd Supp.), c. 10], which
reads as follows:
28. (1) Notwithstanding section 18 or the provisions of any
other Act, the Court of Appeal has jurisdiction to hear and
determine an application to review and set aside a decision or
order, other than a decision or order of an administrative
nature not required by law to be made on a judicial or
quasi-judicial basis, made by or in the course of proceedings
before a federal board, commission or other tribunal, upon the
ground that the board, commission or tribunal
(a) failed to observe a principle of natural justice or other
wise acted beyond or refused to exercise its jurisdiction;
(b) erred in law in making its decision or order, whether or
not the error appears on the face of the record; or
(e) based its decision or order on an erroneous finding of fact
that it made in a perverse or capricious manner or without
regard for the material before it.
There is a preliminary issue as to the effect of
the privative clause in subsection 61.5(10) of the
Canada Labour Code. Clearly, in the light of
subsection 122(1) [as am. by S.C. 1977-78, c. 27,
s. 43] of the Code, no decision of the Canada
Labour Relations Board itself is reviewable by this
Court except under paragraph 28(1)(a) of the
Federal Court Act for failings with respect to
natural justice, excess of jurisdiction or refusal to
exercise it. However, the respondents raised the
question of whether the privative clause in subsec
tion 61.5(10) of the Code might extend to
adjudicators at least the same freedom from
review under paragraphs 28(1)(b) and (c) that the
Board possesses. This issue has already been decid
ed to the contrary by this Court in Pioneer Grain
Co. Ltd. v. Kraus, [1981] 2 F.C. 815 (C.A.).
It is immediately evident that the Adjudicator
erred in law with respect to the remedy awarded.
In Corporation Dicom v. Petit, No. A-413-84, this
Court held on November 21, 1984 that an
adjudicator who failed to hear the parties on the
question of remedies infringed the audi alteram
partem rule of natural justice, and that the matter
had therefore to be returned to him on this issue.
In the case at bar as well, the Adjudicator fell into
the same trap: despite his explicit acknowledgment
during the hearing of an agreement for further
argument on remedies, if necessary after his deter
mination of the substantive question (Appeal
Book, volume III, page 384), he proceeded to
award the remedy in his initial decision, namely
eighteen months' salary, less what the respondent
earned in alternative employment during the same
period. For this important lapse alone, the matter
must be returned to the Adjudicator.
On the substantive issue, the contract, which
was entered into on July 22, 1974 and ratified
anew by the respondent on September 13, 1976,
was as follows:
In consideration of my being hired by the Canadian Imperial
Bank of Commerce (the "Bank"), I do hereby solemnly pro
mise, undertake and agree:
1. to act with honesty and loyalty ....
2. to preserve the most absolute secrecy regarding all the
operations and affairs of the Bank ... .
8. that my employment may be terminated:
(d) by the Bank at any time during or after my probation,
without prior notice or salary in view thereof, for any good
and sufficient reason including, but without limiting the
generality of the foregoing, conduct prejudicial to the inter
ests and reputation of the Bank ....
The contractual provision in clause 8(d) author
izes the dismissal without notice of an employee
whose conduct is prejudicial to the interests and
reputation of the Bank. The question of whether
the respondent's conduct was prejudicial to the
interests and reputation of the applicant is very
similar to the larger question raised by the facts,
namely whether the dimissal was for just cause
and as such not subject to proceedings under sec
tion 61.5 of the Code. It will be useful to examine
these two questions together.
The general principle as to the misconduct that
will constitute just cause for dismissal was well
stated by Lord Esher in Pearce v. Foster (1886),
17 Q.B.D. 536 (C.A.), at page 539:
The rule of law is, that where a person has entered into the
position of servant, if he does anything incompatible with the
due or faithful discharge of his duty to his master, the latter
has a right to dismiss him. The relation of master and servant
implies necessarily that the servant shall be in a position to
perform his duty duly and faithfully, and if by his own act he
prevents himself from doing so, the master may dismiss
him .... What circumstances will put a servant into the posi
tion of not being able to perform, in a due manner, his duties,
or of not being able to perform his duty in a faithful manner, it
is impossible to enumerate. Innumerable circumstances have
actually occurred which fall within that proposition, and innu
merable other circumstances which never have yet occurred,
will occur, which also will fall within the proposition.
Actual prejudice to the employer need not be
proved. Potential harm is sufficient: Empey v.
Coastal Towing Co. Ltd., [1977] 1 W.W.R. 673
(B.C.S.C.); Tozer v. Hutchison (1869), 12 N.B.R.
540 (C.A.). As it was put by Meldrum J. in
Bursey v. Acadia Motors Ltd. (1980), 28 N.B.R.
(2d) 361 (Q.B.), at page 369, varied in another
respect on appeal (1982), 35 N.B.R. (2d) 587
(C.A.):
There is no evidence that defendant was in any way harmed
by the potential conflict of interest. Nevertheless, in conflict of
interest situations, the rule of Caesar's wife applies. It must not
only be pure, it must be seen to be pure.
It is irrelevant that the employee's conduct was
designed to protect only his own interest and not
intended to injure that of his employer: Federal
Supply and Cold Storage Co. of South Africa v.
Angehrn & Piel (1910), 80 L.J.P.C. 1; Empey v.
Coastal Towing Co. Ltd., supra.
In its argument the Bank invited this Court to
conclude that the facts in the record showed that
there was a conflict of interests between the
respondent and the Bank. I feel that such a conclu
sion is too restrictive: the only question raised by
the case at bar is whether, to use the words of
Lord Esher, supra, "he does anything incompat
ible with the due or faithful discharge of his duty
to his master", and there are an incalculable
number of situations which can establish such
incompatibility. It is irrelevant whether the facts
of the case at bar fall within the ordinary limits of
conflict of interests, since incompatibility with the
respondent's duties to her employer will suffice.
Most of the applicable precedents are decisions
by adjudicators. In Re Granby (Ville de) and
Fraternité des Policiers de Granby Inc. (1981), 3
L.A.C. (3d) 443, an Adjudicator held that a disci
plinary suspension was justified in circumstances
in which a police officer had become involved in a
social relationship with a woman who was the
object of criminal charges in respect of which the
grievor would in all likelihood serve as a principal
witness for the prosecution. The Adjudicator left
open the question whether in other circumstances
a police officer's associating with a person who has
a criminal record would constitute conduct incom
patible with his position.
A decision by the British Industrial Tribunal
dismissing a clerk's complaint of unjust dismissal
is even more in point: Foot v. Eastern Counties
Timber Co. Ltd., [ 1972] 1 I.R.L.R. 83. The
employer carried on the business of an electrical
contractor and the complainant handled pay and
billing. The employer dismissed the complainant
with two weeks' salary, in lieu of notice, when it
learned that the complainant's husband had just
opened an electrical business a short distance
away. The Tribunal recognized that it was not
good business for an employer to retain in its
service the wife of a competitor who would have
access to confidential information about her
employer's business. According to the Industrial
Tribunal, this situation of conflict was a good
reason for the dismissal of the complainant and
she therefore had not been unjustly dismissed. The
British Employment Appeal Tribunal came to the
same conclusion in Skyrail Oceanic Ltd. v. Cole-
man, [1980] I.C.R. 596 (set aside by the Court of
Appeal on other grounds: [1981] I.C.R. 864), in
which the employer had dismissed a ticket agent
working for a travel agency solely on the ground
that the employee had just married a man who had
the same job with a rival travel agency.
Can cohabitation between man and woman ever
constitute just cause for dismissal in Canada? The
Supreme Court of Canada had to consider a simi
lar issue recently in Caldwell et al. v. Stuart et al.,
[1984] 2 S.C.R. 603. A Catholic teacher in a
Catholic school was not rehired for the following
school year because she had married a divorced
man in a civil ceremony contrary to Catholic
teaching. Because the matter arose as an allega
tion of discrimination based on material status and
religion under provincial human rights legislation,
the question was not whether the employee was
dismissed for just cause but rather whether she
had lost a bona fide qualification in respect of her
occupation. McIntyre J. wrote for the Court (at
pages 624-625):
It is my opinion that objectively viewed, having in mind the
special nature and objectives of the school, the requirement of
religious conformance including the acceptance and observance
of the Church's rules regarding marriage is reasonably neces
sary to assure the achievement of the objects of the school. It is
my view ... that the requirement of conformance constitutes a
bona fide qualification in respect of the occupation of a Cathol
ic teacher employed in a Catholic school, the absence of which
will deprive her of the protection ... of the Human Rights
Code.
Although this decision does not in terms define
just cause for dismissal to include a marriage
relationship, it does have the effect of legitimizing
dismissal for that reason on the special facts there
in. In fact, McIntyre J. commented on the overlap
(at page 622):
It could be that in many cases, the same conduct or characteris
tic of an employee will both constitute reasonable cause for
dismissal and have the effect of depriving the employee of a
bona fide qualification. To that extent the two concepts may
overlap....
In Cindy Bosi v. Township of Michipicoten and
K.P. Zurby (1983), 4 C.H.R.R. D/1252, where a
married woman was refused employment as an
account clerk with a municipality because her
husband was also employed by the municipality as
a police officer, Professor Martin L. Friedland,
sitting as a board of inquiry, held that there was
such substantial potential conflict of interest as to
constitute marital status a bona fide occupational
qualification and requirement, even if marital
status as a prohibited ground of discrimination
were taken to include not just marriage but mar
riage to a particular person.
In my view the law can therefore be summarized
in the following principle: marriage or cohabita
tion with a particular person can, in some fact
situations, create a just cause for dismissal; wheth
er it does will depend on a close analysis of the
whole fact situation and especially of the nature
and requirements of the particular employment.
Turning to the facts of the instant case, I would
agree, without deciding the point, that the
Adjudicator was correct in finding that the notion
of just cause implies the necessity of personal
responsibility on the part of the employee:
I consider that in labour law, the complainant can be held
responsible only for her own acts, and not for acts that she did
not commit, acts committed by third parties. Just cause thus
necessarily implies a personal action by the employee.
However, he went on to find that there was no
imputable "act or negligence" on the part of the
employee:
At the root of any conflict of interest, there is thus a
wrongful act which an employee must have taken in relation to
his employer. In the case before me, however much I sought the
wrongful act, I was unable to find it. I cannot maintain that the
Complainant's remaining with Beaulieu after his imprisonment
in 1979 was a wrongful act, since she loved him and wanted to
help him; this would deny the Complainant the right to lead,
outside of work, the emotional life that seemed right to her; it
would also deny that an individual who has served a prison
term, and who has thus paid his debt to society, is entitled to
resume a normal life.
However in the present case, the Complainant committed no
act that was unlawful or contrary to the law by remaining with
Beaulieu, the man she loved. She perhaps put herself in a
situation in which she could more easily commit a wrongful act
by disclosing security measures known to her, but she did not
commit a wrongful act if she did not disclose them. [My
emphasis.]
It is clear from this passage that the Adjudica
tor had an entirely mistaken view of the law. In his
opinion, for just cause for dismissal to exist the
respondent would have had herself to commit an
act that is illegal or contrary to law. If that were
the test, that would eliminate many conflict of
interests situations. The true test of an employee's
misconduct, however, is that stated by Lord Esher,
supra: it applies to acts of the employee which are
"incompatible with the due or faithful discharge of
his duty to his master".
On the facts here, the employer is a Bank, and
as such receives by way of deposit sums of money
and other valuables for safe-keeping, which it must
therefore go to extreme pains to protect from theft.
The employee, who as an accountant is familiar
with all of the Bank's security measures, takes up
in November 1976 with a man who commits a
robbery in July 1977. During his incarceration
from May 1, 1978 to March 1, 1979, she comforts
him in prison. Perhaps she has second thoughts
about remaining with him, because it is more than
eight months after his release before they resume
cohabitation on October 19, 1979. Less than a
month later, he is charged with robbery from
Steinberg's on November 15, though he is released
for want of evidence at his preliminary hearing on
December 6. He is subsequently charged with the
commission of another robbery on November 29,
for which she acts as guarantor for his bail (and
for which he was convicted in April 1980).
To top it all off, he then commits two armed
robberies against another branch of her own Bank
on January 25 and February 8, 1980. After the
second robbery he is surprised by the police in
their joint apartment dividing up his ill-gotten
gains with his co-perpetrators. In addition to the
money, the police find arms and ammunition.
Whether or not the respondent knew in advance
of the robberies against her own Bank (and the
Adjudicator has found that there is no evidence
that she did), Beaulieu's use of their joint premises
as a centre of operations would indicate that he
was making small attempt to keep her uninvolved.
In any event, at least by February 1980, her
continued cohabitation with Beaulieu placed her in
a situation of incompatibility with her duties to her
employer. Even if never carried out against her
own Bank, Beaulieu's illegal activities were of such
a nature as to constitute a standing threat to all
financial institutions, her own included. As a key
employee, she had direct knowledge of her own
Bank's security arrangements and indirect knowl
edge of those of other banks. In such a close
association she might even unwittingly let slip a
detail helpful to an alert criminal mind.
The Adjudicator's interpretation that Beaulieu
was until 1980 a rehabilitated criminal ("who has
served a prison term, and who has thus paid his
debt to society") who then suddenly turned from
Dr. Jekyll into Mr. Hyde ("who had suddenly
begun to rob banks") is simply not credible. His
criminality must be deemed to have been clearly
visible to her and it was only the Adjudicator's
idée fixe that misconduct requires an act contrary
to law on the employee's part that prevented him
from seeing the situation as it was. She betrayed
her duty to her employer by continuing to associ
ate with a person so apparently dedicated to play
ing Robin Hood for his own benefit. Nothing more
is required for incompatibility with the interests of
her employer.
This conclusion is above all established by the
respondent's obligations under the contract of
employment itself: according to Lord James of
Hereford in Clouston & Co., Ld. v. Corry, [1906]
A.C. 122 (P.C.), at page 129:
... misconduct inconsistent with the fulfilment of the express
or implied conditions of service will justify dismissal.
In the case at bar, she undertook to act with
honesty and loyalty and to avoid any conduct
prejudicial to the interests and reputation of the
Bank. We have already seen that her conduct was
prejudicial to the interests of the Bank; that it was
prejudicial to the Bank's reputation requires no
proof. In these circumstances the Bank also had,
under the contract, a right to terminate her
employment without notice.
The events in this case took place before the
advent of the Canadian Charter of Rights and
Freedoms [being Part I of the Constitution Act,
1982, Schedule B, Canada Act 1982, 1982, c. 11
(U.K.)] and the respondent made no argument
based on freedom of association under paragraph
1(a) of the Canadian Bill of Rights [R.S.C. 1970,
Appendix III].
I would therefore grant the application, set aside
the decision of the Adjudicator and refer the
matter back to the Adjudicator on the basis that,
by placing herself in a situation of incompatibility
with the interests of her employer, the respondent
had provided just cause for her dismissal without
notice.
LACOMBE J.: I concur.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.