Canadian Employment Law Today

CASE IN POINT: Wrongful Dismissal 4 Canadian HR Reporter, a Thomson Reuters business 2014 CIBC wrongfully dismissed fi nancial advisor in bad faith: Court Bank's sketchy discipline decisions and poor investigation of alleged misconduct led to bad faith dismissal BY JEFFREY R. SMITH T HE CANADIAN Imperial Bank of Commerce (CIBC) wrongfully dismissed a fi nancial advisor when it failed to properly investigate her misconduct and used past events for which she shouldn't have been dis- ciplined against her, the British Colum- bia Supreme Court has ruled. Guiyun Ogden, 41, was a licensed fi - nancial advisor for CIBC in Vancouver. Ogden moved to Canada from China in 2000 and, after joining CIBC in 2004, built a portfolio of high-end clients, spe- cializing in people who immigrated from China. She received positive perfor- mance reviews and won several awards. In March 2008, Ogden received a warning letter for some of the loan appli- cations she worked on. CIBC said some of the loan documents were signed in the wrong places, some didn't properly ver- ify income and some weren't sent to the retail back offi ce when they should have been. Additionally, CIBC claimed Ogden reduced the loan rates on personal lines of credit after funding. However, when it presented these examples of misconduct to Ogden, the documents themselves weren't shown to her. Ogden denied she was responsible for the issues with the documents, as her fi nancial services associate incorrectly signed them. She also claimed CIBC's instructions on income verifi cation were always changing and weren't clear, which CIBC's national director of risk con- fi rmed were "somewhat confusing." CIBC later determined it was branch practice to hold income records at the branch rather than send them to the re- tail back offi ce — other employees had done the same as Ogden but were not disciplined. As far as the loan rate reductions, Og- den explained she received a manager's level override or approval for them and they only accounted for fi ve per cent of her loans. Without such approval, she couldn't have reduced the rate. Ogden had learned from other fi nancial advisors this was a common practice. Employee protested warning letter Ogden protested the warning letter be- cause she didn't feel she was guilty of misconduct. She told her general manag- er and the associate vice-president of the business unit she was concerned about the letter and worried it could negatively impact her future as a fi nancial advisor. e vice-president assured Ogden the letter wouldn't impact anything in the fu- ture and she should "let it go," so Ogden dropped her protest. In January 2010, CIBC's corporate se- curity learned Ogden had been receiv- ing clothing from a long-term client who owned a clothing factory in China for about six years. Ogden's supervisor and the vice-president of the business unit determined Ogden had shown a "lapse of judgment" by accepting the clothing as a gift, but agreed it was a misunderstand- ing that didn't violate CIBC policy or its code of conduct and there was no confl ict of interest requiring discipline. However, this wasn't passed on to the corporate se- curity investigator, who considered the incident a breach of the code of conduct. In August 2010, CIBC increased the interest rates on its staff loans. Ogden's fi nancial services associate, who was in Ogden's portfolio, wanted to convert her staff loan to a mortgage to get a lower in- terest rate. Ogden was too busy to take care of it, so she told her associate to get someone else to help her. e associate came back to Ogden a few days later with the application, so Ogden reviewed the information to ensure its accuracy and submitted the application. However, unbeknownst to Ogden, the associate had input the data herself, which was contrary to a CIBC policy pro- hibiting employees from processing their own personal transactions. Ogden signed the document as the lender and another employee signed it as the reviewer. Nei- ther realized the associate had fi lled the application out herself. e mortgage application was fl agged as inappropriate conduct by the back offi ce mortgage department. However, CIBC let the transaction proceed and the loan was converted to a mortgage. On Sept. 27, Ogden received a fi nal warning letter for failing to avoid a situa- tion "involving an actual or apparent con- fl ict of interest" by having the associate on her portfolio and submitting a trans- action in which the associate had entered her own data. e letter indicated failure to follow procedures in the future would result in termination without notice. Devastated and upset, Ogden asked her general manager why she received the warning letter, and she was told it was because she should have known her associate input her own data. Ogden ar- WHEN EMPLOYERS become aware of potential breaches of policy, they have reason to be concerned and to take action. This is particularly true for employers with a high responsibility to the public and high standards of trust and professionalism for employees, such as fi nancial institutions. However, regardless of how high those standards are, misconduct must be legitimate and proven to warrant discipline or dismissal. The difference between a good and bad investigation into misconduct can start with the approach — is it an impartial effort to determine what happened, or is it an attempt to simply prove allegations? If it's the latter, there is a risk of painting the facts in a biased way. And pursuing a biased investigation can lead not only to wrongful dismissal, but also bad-faith damages. Even if the employer is a bank. BACKGROUND The employee dropped her protest of the warning letter after she was assured the letter wouldn't impact her in the future.

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