No clear resignation but plenty of insubordination

B.C. credit union manager’s behaviour means employer off hook for reasonable notice
By Jeffrey R. Smith
|Canadian HR Reporter|Last Updated: 07/19/2011

A British Columbia credit union branch manager did not resign after disputes with management, but her insubordinate behaviour provided just cause for dismissal, the B.C. Supreme Court has ruled.

Sukhwinder Grewal was hired as a teller for Khalsa Credit Union (KCU) in Surrey, B.C., in 1989. She became manager of a Vancouver branch in 1999.

A review of procedures at the branch in 2000 found Grewal had breached KCU’s policies and procedures, so KCU warned her in writing her conduct was unacceptable and if she failed to comply with its policies in the future, she would face disciplinary measures including termination. Grewal was then reassigned to a smaller branch in Abbotsford, B.C.

In December 2001, Grewal was appointed manager of KCU’s largest branch in Surrey. She worked there until October 2003, when she was transferred back to Abbotsford. Grewal wasn’t happy, as she had received positive performance reviews, but accepted the transfer.

Job performance issues

Despite Grewal’s good reviews, KCU’s CEO had issues with certain aspects of her work, such as not ensuring staff wore name tags, failing to hold regular staff meetings and not advising head office of an investigator from the Financial Institutions Commission (FICOM) visiting her branch.

Grewal felt the criticism was unwarranted and defended herself, which the CEO considered insubordinate and disrespectful. Grewal also accused officials of invading her privacy by verifying her personal information with staff and trying to obtain her licence plate number. She felt the CEO was “out to get her.”

When the CEO asked for evidence of her accusations and the name of the official who requested her licence plate number, Grewal declined to respond.

In March 2005, Grewal sent a letter to the CEO, drafted by her lawyer and copied to the CEO’s secretary, which suggested ways KCU could improve its practices. The letter said she would be willing to let the invasion of her privacy drop but trust and respect from management needed to improve. The CEO considered the letter insubordination and a challenge to his authority. He again asked for proof of her accusations, but none were forthcoming.

In June 2005, the CEO learned Grewal’s mortgage with KCU had been renewed prior to its expiry without penalty. The early renewal was due to a data entry error but Grewal, as branch manager, should have caught it. The CEO believed Grewal personally benefited from the error by obtaining a mortgage below the market rate.

Before the CEO had a chance to discuss the mortgage with Grewal, she went on disability leave until August 2006. He contacted her several times to discuss her mortgage but Grewal didn’t respond.

Once Grewal returned to work, she met with KCU executives on Aug. 31, 2006, and explained she didn’t know about the mortgage error. However, she didn’t answer questions about conflicting dates on her renewal notices nor which employees processed the renewal.

During Grewal’s leave, KCU applied to be released from FICOM supervision, which had been in effect since 1999. During the hearing, Grewal’s mortgage irregularities and name came up. When she learned of this, her legal counsel sent a letter to KCU dated Sept. 1, 2006, demanding a written apology for “this untrue accusation of a mortgage scandal” and “making baseless allegations of performance failures in her job.”

The letter also demanded KCU refrain from such bad faith conduct in the future and send copies of the apology to KCU’s board of directors as well as the deputy superintendent of credit unions and trusts. The letter also threatened to take legal action if there was no apology.

KCU told Grewal her continued insubordination, culminating with the threat of legal action, severed the employment relationship and she had effectively resigned from her job. Grewal claimed she was willing to continue her employment and had been wrongfully dismissed.

No clear resignation but there was insubordination

Grewal did not end the employment relationship, found the court. She had just returned from her leave and had not indicated she intended to resign, it said. Her letter didn’t contain an express resignation and she indicated afterwards she wanted to continue working at KCU. As a result, KCU terminated her employment, found the court.

However, Grewal’s conduct constituted just cause, it said. Her accusations and failure to follow KCU’s procedures and policies showed a pattern of insubordination that was cause for discipline and the Sept. 1 letter “tips the balance” towards dismissal, said the court.

The letter outlined unproven accusations of privacy invasion and bad faith by the CEO. The fact the letter was sent to the board of directors and credit union regulator also showed Grewal intended to damage the CEO’s reputation and it would be difficult for KCU to retain her as a branch manager, said the court.

“The letter was obviously intended to do serious damage to (the CEO),” said the court. “The criticism was disrespectful in tone and language and was irreconcilable with Ms. Grewal’s continued employment.”

For more information see:

Grewal v. Khalsa Credit Union, 2011 CarswellBC 1214 (B.C. S.C.).

Jeffrey R. Smith is the editor of Canadian Employment Law Today. For more information, visit www.employmentlawtoday.com.

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