The principled review is discussed above.

Review Both Sides

The issue of reinstatement was reviewed by the Federal Court of Appeal in ¹ The employer had failed to renew the teaching contract of the complainant. The unjust dismissal complaint succeeded although reinstatement was denied.

The first level review of Campbell J. reviewed the decision of Atomic Energy and concluded that the adjudicator was required to weight the merits of the reinstatement request from both sides. This decision remitted the remedy question back to the adjudicator for an analysis of all considerations for and against reinstatement, and to include an evaluation of the nature of the relationship between the parties.

The adjudicator did so and denied reinstatement in these words:

weighing ... all considerations for and against an award of reinstatement [of Ms. Chalifoux], including an evaluation of the nature of the relationship between [Ms. Chalifoux] and [the Driftpile First Nation] on the record as it exists, as directed by Justice Campbell, I decline to direct the Driftpile First Nation to reinstate Ms. Chalifoux. But I order the Driftpile First Nation to pay $750 to Ms. Chalifoux for legal costs incurred in this phase of the proceedings.

The reference to the Atomic Energy case was important. Two decisions were provided. Letourneau J.A., in concurring reasons, saw reinstatement as the presumptive right. Marceau J.A. saw reinstatement as one alternative remedy to which no presumptive right attached. Strayer J.A. concurred with Marceau J.A.

The first review of the second no reinstatement decision of Gibson J. noted, however, that the adjudicator was ordered by the Federal Court to complete the pro’s and cons of reinstatement. The resultant decision, he stated, was thin, but sufficed.

FCA Sets Aside Remedy of Reinstatement

The Federal Court of Appeal reviewed allegations of just cause and the remedy allowed by the adjudicator in its decision. [/efn_note] Payne v Bank of Montreal FCA Feb 2013; First review FC April 2012 ]/efn_note]

Mark Payne had been the manager of the bank branch in Woodstock, Ontario. The events leading to his dismissal for just cause centered on a sexual relationship he had with his assistant branch manager.

The adjudicator had found no cause for dismissal and ordered his reinstatement. On first review, this award was considered as unreasonable and set aside. The Federal Court of Appeal reversed, finding that the liability decision was reasonable but that the remedy of reinstatement was not. The case was remitted to a second adjudicator to determine remedy.

Prior to his termination, Payne had been placed on suspension, pending an investigation into his alleged abusive behaviour. As a consequence of this review, he was given a step 3 corrective action notice, this being the most serious of such actions. He was also deprived of his annual bonus and transferred to a smaller branch to receive peer coaching from the present manager. His grade was reduced, but not his salary.

A second investigation followed due a complaint of stalking. He initially denied the prior personal relationship, was suspended again with pay, after which he admitted the sexual relationship. He was placed on an unpaid leave. This relationship had continued during the period of his corrective action, as referenced above. It was also agreed that he had shared the details of the prior investigation to his intimate friend when he was instructed to tell no one.

The adjudicator had found that the breach of confidentiality and the initial lie to the investigators were not “overly serious”, yet warranting some degree of discipline.

As to the sexual relationship, he found that this was “consensual” and only one employee or no members of the local community were aware of it. Further, he examined the Bank’s anti-harassment policy which was not violated as there had been no abuse of his role as manager, nor threats or promises of advantage. The initial denial was a breach of honesty required by the manual. He concluded that the Bank suffered no harm.

The issue considered by the arbitrator was whether this conduct, inclusive of the breach of confidentiality, the lies and the affair were sufficiently grave to allow for termination, in the absence of progressive discipline. He found no cause for dismissal for these reasons:

1. The relationship was consensual, even though he was her supervisor;
2. Little or no harm resulted;
3. A suspension may well have succeeded to allow Payne the chance to reflect and repair.

Payne was given a 4 month suspension and reinstated.

The first review found this decision unreasonable. The Court of Appeal disagreed with this conclusion on liability but did revise the remedy to exclude reinstatement.

FCA Sets Aside Finding of Reinstatement

A decision of the Federal Court of Appeal in 2014 , is a rare example of the Federal Court setting aside an adjudicator’s decision on the issue of just cause, or more acutely, in this instance, of no just cause. ²

The employer had argued just cause for dismissal for the two employees in this complaint. Findings of misconduct were made, which were determined to be insufficient to dismiss the complaints. An order was made to allow for a one month suspension plus reinstatement with lost compensation.

1. The findings of wrongdoing included (1) violations of the Bank Act and the code of ethics of the employer, which (2) conduct was deserving of punishment and (3) the employer was negligent in its supervision. ³

The issue before the first reviewing court and the Court of Appeal was whether termination for just cause was the proper decision, and hence, was it reasonable? This Court found it was not.

A summary of the adjudicative view was stated as follows in the appellate court:

It seems to me that one must read the adjudicator’s reasons as expressing, at least implicitly, the opinion that regardless of the seriousness of the respondents’ actions, the appellant’s negligence with respect to its duty to supervise and its failure to regularly monitor the activities performed by the respondents at the exchange office, are sufficient to excuse, in large part, the respondents’ actions and breaches.

Further, the adjudicator failed to ask the right questions, namely:

Did the respondents’ breaches go to the core of the employment relationship? Did the breaches, or any of these breaches, violate an essential condition of their employment contracts? Did the breaches, when considered as a whole, breach the faith inherent to their work relationship or were they fundamentally or directly inconsistent with their obligations as employees? The adjudicator failed to reply to any of these questions.

The conclusion reached that the relationship of trust had not been irrevocably broken was not supported by the evidence. The decision was found to have been unreasonable.

Even given these findings, the Court of Appeal refused to substitute its judgment for that of an adjudicator on this issue. The case was remitted to a new adjudicator for its determination.

This was so, even though such a decision may be made:

 First, as pointed out by the judge at paragraph 10 of his reasons, we do not have the advantage of a transcript of the testimonies, which would allow us to properly understand and assess the case made before the adjudicator. Second, the evidence before us stems solely from the affidavits filed to « reconstruct » the evidence that was filed before the adjudicator. In these circumstances, it does not seem wise to substitute our decision for a decision that is rightfully an adjudicator’s to make. Third, I am not satisfied that there is only one possible outcome in the present matter, namely, the respondents’ dismissal. It will be up to the adjudicator appointed to the case to determine whether, in the light of the seriousness of the respondents’ acts and breaches alleged by the appellant, the relationship of trust has been irrevocably broken.

FCA Sets Aside Reinstatement

This result also followed in a decision of the Federal Court in December of 2012. ⁴ The adjudicator had awarded reinstatement in a not for cause dismissal. On the issue of remedy, the Bank had shown evidence that the employee’ conduct led to potential losses of $59,000 and $47,000 and actual losses of $7,500. He found for reinstatement even though  “her faults are significant and her record will travel with her to the next BMO posting.”

The Federal Court found this order to have been “incredible, indefensible, and manifestly unintelligible”.