A Federal Court has dismissed an application for judicial review filed by a former manager of business operations at Scotiabank who claimed procedural unfairness and bias in her dismissal complaint.
Justice Tsimberis ruled that the adjudicator’s decision, including findings on the appropriate remedy for her unjust dismissal, was reasonable and without legal error.
R.L., a former Manager of Business Operations for Scotiabank’s Digital Channels, was dismissed without cause in January 2018 after more than 11 years with the bank. Following her termination, she filed a complaint under section 240 of the Canada Labour Code, alleging unjust dismissal, and pursued compensation for lost income and other entitlements.
The case primarily revolved around the issue of appropriate compensation for the unjust dismissal, with Scotiabank conceding that the dismissal was without cause. The bank had offered a settlement, including reinstatement to her previous role and recognition of her years of service for the purposes of pension and benefits, but R.L. rejected the offer, citing concerns about seniority and the impact on future severance entitlements.
R.L.’s legal team argued that the adjudicator showed bias by admitting a settlement offer as evidence, which they claimed violated settlement privilege, and by raising new legal issues during the proceedings. These concerns formed the basis of her motion for judicial review.
However, Justice Tsimberis dismissed these arguments, ruling that the adjudicator had broad discretion under the Labour Code to consider the settlement offer. The Court emphasized that adjudicators have the authority to accept evidence, even if it would not typically be admissible in a court of law, under section 16(c) of the Code.
“The evidence of an offer of re-employment is undoubtedly relevant to the quantum of damages that an adjudicator might award for loss of income, since compensation is awarded only in respect of losses the fired employee suffered in spite of having acted reasonably to mitigate them,” the adjudicator stated in the final ruling.
One of the central points of contention was whether R.L. had a duty to mitigate her losses by accepting Scotiabank’s offer to reinstate her in 2018. Scotiabank argued that by rejecting the offer, she failed to take reasonable steps to mitigate her financial losses, thereby disqualifying her from further compensation.
The adjudicator agreed with Scotiabank, concluding that R.L. should have accepted the offer of reinstatement. Under the Supreme Court’s decision in Evans v Teamsters Local Union No. 31, the test for mitigation is whether a reasonable person would have accepted the reinstatement offer under similar conditions. The adjudicator found that Scotiabank’s offer would have reinstated R.L. with identical working conditions, except for her seniority, and the personal relationships involved were not acrimonious.
“I am not prepared to hold that the working conditions offered to the complainant on September 21, 2018, were ‘substantially different’ from her previous working conditions,” the adjudicator noted, adding that any reasonable person in (her) situation would have accepted the offer to mitigate losses.
R.L. had raised concerns that accepting the offer would reset her employment start date to November 2018, potentially limiting her future severance and unjust dismissal rights. The court acknowledged that under the Labour Code, employees must complete 12 months of continuous employment to file an unjust dismissal complaint, meaning R.L. would have been vulnerable to dismissal within the first year of her reinstatement without legal recourse. However, the court found that this risk did not outweigh her duty to mitigate her losses.
“If this argument were accepted, the duty to mitigate would be rendered completely meaningless in every case of a dismissed employee offered reinstatement,” the ruling said.
R.L. also argued that the settlement offer’s inclusion of a release, which waived her right to file future complaints related to the initial dismissal, was unfair. However, the court noted that such a release is standard practice in settlement agreements to ensure finality and that it would not have prevented R.L. from filing complaints on unrelated future matters.
Ultimately, the Court ruled that her failure to accept the settlement offer and mitigate her losses meant she was not entitled to additional compensation beyond what Scotiabank had already provided. The adjudicator’s decision was upheld, and R.L.’s application for judicial review was dismissed without costs.
Justice Tsimberis concluded, “The applicant having failed to identify a reviewable error in the final decision, including any violation of procedural fairness arising from the adjudicator’s conduct or the interim decisions, I dismiss this application for judicial review.”
The court declined to award costs against R.L., citing the procedural complexity of the case and its impact on both parties.
For more information, see Lopez v. Bank of Nova Scotia, 2024 FC 1372 (CanLII).
