Employee didn’t resign but insubordinate accusations were serious enough to warrant just cause for dismissal: Court
Giving just cause instead of quitting
When there is strife between an employee and management, this can lead to an unworkable situation that may end the employment relationship. If the relationship ends, there can be further dispute over who actually ended it —did the employee resign or did the employer fire her?
The bar is set high for proving a resignation and in many cases, though the employer may have accepted a resignation, there actually wasn’t one. If it turns out to be a termination, the employer is on the hook for pay in lieu of reasonable notice. But even if the employer is the one who terminated the employment, it may be that the employee was the one who made the employment relationship unworkable and gave the employer just cause for dismissal.
A British Columbia credit union branch manager did not resign her position after disputes with management but the credit union had just cause for dismissal, the B.C. Supreme Court has ruled.
Sukhwinder Grewal was hired as a teller for the Surrey, B.C., branch of Khalsa Credit Union (KCU), a credit union used mainly by Sikhs in B.C., in 1989. The following year, Grewal was transferred to a branch in Vancouver, where she moved up through various positions and became branch manager in 1999.
However, problems arose with Grewal’s performance. In May 2000, an employee contacted the interim CEO with concerns about Grewal’s work and the CEO initiated a review of procedures at the branch. The review found Grewal had breached KCU’s policies and procedures, so KCU warned her in writing that her conduct was unacceptable. She was told she would get another chance to show she could do the job but if she failed to comply with KCU’s policies in the future she would face disciplinary measures, including termination. Grewal was then reassigned to a smaller branch in Abbotsford, B.C., which was considered a demotion.
In December 2001, Grewal was appointed manager of KCU’s largest branch back in Surrey, which also shared a building with KCU’s headquarters. She worked there until October 2003, when she was transferred back to Abbotsford.
Grewal wasn’t happy with the Abbotsford transfer as she believed she was doing a good job in Surrey, evidenced by the fact the Surrey branch’s financial results improved while she was there and she received positive performance reviews. However, she accepted the transfer and the Abbotsford branch’s results also improved during her tenure as branch manager.
Job performance issues
Despite her good performance reviews both in Surrey and in Abbotsford, KCU’s CEO wrote to her several times about his concerns with certain aspects of her work, including:
•The failure of staff to wear nametags
•Giving preferred rates on some loans
•Failure to spin locks at the end of the day
•Failure to advise the head office of a search warrant conducted at her branch
•Late attendance
•Failure to have regular staff meetings
•Failure to inform head office of an investigator from the Financial Institutions Commission (FICOM) at her branch.
Grewal was upset at what she felt was unwarranted criticism and defended herself when concerns were raised, which the CEO often considered to be insubordinate and disrespectful. She also accused KCU 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” and he was trying to build a case against her.
The CEO didn’t respond to Grewal’s accusations and in January 2005, she contacted him again about a phone call that was made to her husband’s cellphone that apparently came from KCU’s Surrey branch. Her cellphone bill was mailed to the Surrey branch so KCU could pay the first $80 of it and she believed someone had checked her entire bill, which had her husband’s number on it.
The CEO asked for evidence of her accusations, such as the bill with Grewal’s husband’s number and the name of the official who requested her licence plate number. Grewal did not supply any of this information but redirected her phone bill to her home. KCU indicated it would not pay part of each bill without it coming directly to the office.
On March 11, 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 insubordinate and a challenge to his authority. He again asked for proof of her accusations, which she didn’t provide.
On April 22, 2005, Grewal arrived late to a management meeting and she also talked with another manager during the meeting. The CEO later informed her that her conduct at the meeting was unprofessional and warned her not to repeat it. Grewal denied her conduct was disruptive.
In June 2005, the CEO became aware that Grewal’s mortgage with KCU had been renewed prior to its expiry with no penalty. The early renewal was due to an error when the mortgage was inputted, but Grewal, the branch manager at the time, should have caught the error. The CEO believed Grewal had received a personal benefit from the error by obtaining a mortgage below the market rate.
Before he had a chance to discuss the mortgage with Grewal, she went on disability leave, from October 2005 to August 2006. He contacted her several times during her leave to discuss the issues regarding her mortgage but Grewal didn’t respond.
Meetings and threats of legal action
After Grewal returned to work, she met with KCU executives on Aug. 31, 2006, and explained she didn’t know about the error in her mortgage documentation. She didn’t answer questions about conflicting dates on her renewal notices or which employees processed the renewal.
Grewal learned that during her leave, KCU had applied to be released from FICOM supervision, which it had been under since 1999. During the hearing, the issue of her mortgage irregularities came up and her name appeared. Her counsel sent a letter to KCU on Sept. 1 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 and the deputy superintendent of credit unions and trusts. The letter concluded with a threat to take legal action if there was no apology.
The letter was the last straw for KCU, which responded with a letter of its own indicating Grewal’s continued insubordination, culminated with the threat of legal action, severed the employment relationship. Grewal claimed she was willing to continue her employment and had been wrongfully dismissed.
The court found that Grewal did not end the employment relationship. She had just returned from her leave and had at no time indicated she intended to resign. Her Sept. 1 letter didn’t contain an express resignation and she indicated afterwards that she wanted to continue working for KCU. As a result, KCU terminated Grewal’s employment, said the court.
However, the court found Grewal’s conduct constituted just cause for her termination. Her letters of accusation and her failure to follow KCU’s procedures and policies was a pattern of insubordination that was cause for discipline and the Sept. 1 letter “tips the balance” towards dismissal.
The letter outlined unproven accusations of privacy invasion and bad faith on the part of the CEO. The fact that the letter was sent to the board of directors and credit union regulator also demonstrated the intent of the letter, said the court, and it would be difficult for KCU to retain the confidence and trust needed for her to continue as a branch manager.
“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.”
The court found Grewal did not resign from her position but KCU had just cause to dismiss her due to insubordination. See Grewal v. Khalsa Credit Union, 2011 CarswellBC 1214 (B.C. S.C.).
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Grewal’s letter to the CEO
Selected text from the letter to Khalsa Credit Union’s CEO from Sukhwnider Grewal’s legal counsel, which was copied to the board of directors and the deputy superintendent of credit unions and trusts:
