Federal Court rules against placing employees in a Catch-22 situation

Sandra Sigouin burst into tears when her boss at National Bank fired her a couple of years ago for making a mistake that cost the bank nearly $1-million.

"I cried a lot," Ms. Sigouin recalled from her home in Longueuil, Que. "I still remember the day they told me."

Ms. Sigouin had worked at a Montreal branch for 20 years, earning less than $40,000 annually. She loved the place and had just been promoted to the special loans department when she was let go. She'd been given the post even though she lacked the proper qualifications and training.

The new job didn't go well. Ms. Sigouin made so many mistakes the bank warned her in writing that if she didn't shape up she would be dismissed. She asked to take courses and promised to improve.

But when she failed to renew a letter of credit in January, 2006, resulting in an $850,000 hit for the bank, she was fired and given three months severance. She'd been in the department for six months.

Ms. Sigouin was stunned. She filed a wrongful dismissal complaint under the Canada Labour Code, which covers federally regulated employers such as banks, railways, telecommunications companies, Crown agencies and airlines. An adjudicator upheld the dismissal and said the bank followed proper procedure.

She appealed to the Federal Court of Canada. In a decision made public Tuesday, Judge Yves de Montigny ruled that the adjudicator's decision was unreasonable because it did not take into account Ms. Sigouin's unblemished 20-year employment record.

The bank should have considered finding her another job, the judge said in ordering the case back to the adjudicator for a rehearing.

"It is worth considering what message would be given to employees if [the court did not intervene]" the judge said. "An employer could then allow an employee who did not have the necessary qualifications to attain promotion and subsequently dismiss him or her.

"In these circumstances, it would be understandable that few employees would take the risk of applying for a promotion in the certain knowledge that their dismissal could follow if they were not up to the situation."

National Bank is appealing the ruling, and bank officials declined comment.

Irving Gaul, Ms. Sigouin's lawyer, said the ruling could set a precedent for thousands of federally regulated employees.

Until now, he said, adjudicators have dealt more with procedural issues and not the fairness of an employer's actions. "This question [of fairness]has never been clearly written in a judgment," he said.

Toronto labour lawyer Norman Grosman said the Federal Court rarely intervenes in adjudicators' decisions because the Canada Labour Code gives them wide latitude.

"Adjudicators do have to pay attention to the direction that comes from the Federal Court because that's the avenue of review for their decision," he said.

Janice Rubin, a labour lawyer in Toronto, said many judges have started taking a broader approach to wrongful-dismissal cases since a Supreme Court decision in 2001, which ruled that firing should only be used in cases of serious misconduct.

"Just because an employer does all of the right things, through its disciplinary process, doesn't mean automatically there's termination for cause," Ms. Rubin said.

Ms. Sigouin has found another job, but she isn't giving up her fight.

"I just want compensation for the 20 years that I gave 200 per cent every day of my life for them," she said. "I gave all that I had for the bank and that's the way that they thank me?"