Employee claimed it was common practice to borrow funds informally from local businessman and repay them with employer’s resources
An Alberta First Nations band had just cause to terminate its public works manager for using the band’s resources to repay an informal loan with a local store owner, despite the manager’s claims it was common practice, an adjudicator has ruled.
Neal Potts was foreman in the public works department of the Samson Cree Nation, a First Nations band near Maskwacis, Alta. He was hired in 1975 and was responsible for a crew of 10 heavy equipment operators and truck drivers. The crew hauled material such as sand, gravel, and dirt, maintained roads, and picked up waste. As foreman, Potts’ job was to conduct morning safety meetings, assign tasks to the crew, and check on jobs in the field to ensure things were getting done. He also informed the public works manager of the crew's daily and weekly progress on various jobs.
Potts had received verbal warnings in the past, but records of this weren’t kept. A new public works manager who started in 2015 gave him a verbal warning about a failure to follow direction and spoke to him about not properly reporting his activities and playing cards with his crew during work hours. This led to a 10-day suspension on Aug. 12, 2015, and a discipline letter stating that “any further misconduct after the suspension will be termination without any reasonable severance notice.”
Three months later, in November 2015, the public works manager received a text from a Samson Creek band member asking why public works trucks were delivering material off Samson Cree lands to a grocery store nearby. The manager asked Potts about it and Potts replied, “I told you it was before your time and I will leave it at that.” Potts also said the store owner had given the staff $2,000 — he sometimes advanced money to the Samson Cree Nation through the band office with five per cent interest and helped cash cheques that were approved by the nation’s financial department but weren’t processed in time — to attend a retreat and they were paying him back with 10 loads of sand and gravel.
The manager contacted a council member, who asked the ombudsman to conduct an investigation. The ombudsman interviewed Potts, who described the arrangement with the store owner and said he had “done it for years.” Potts also claimed previous managers had been aware of such arrangements. However, the investigation determined that Potts breached the Samson Cree Nation employment policy — Samson Cree Nation wasn’t in the business of selling material and disposal of any such material required written authorization from the band administrator and approval from the chief and council. Employee bonuses and travel reimbursements also had to be approved. The supervisor, band administrator, director, and chairman decided to terminate Potts’ employment for the unauthorized sale of material and provision of bonuses to staff effective Feb. 3, 2016. Potts’ earlier suspension factored into the decision to terminate him.
Potts filed a complaint of unjust dismissal under the Canada Labour Code, claiming the arrangement he made with the store owner was a common one the store owner had with the Samson Cree Nation and other departments and individuals regularly received money from the store owner. Potts said he had the right to take the loan on behalf of the nation and “other people do it” without official documents condoning the practice. He claimed he was singled out for discipline and discriminated against because his family had dealings with the ombudsman’s family — and he had not received any warnings about his job performance before his 10-day suspension in August 2015.
The adjudicator found Potts was guilty of serious misconduct, as he admitted to taking the loan on behalf of the public works department, failed to answer his manager’s questions about it and misappropriated the nation’s goods. As for any bias on the part of the ombudsman during the investigation, Potts didn’t raise any objections at the time of the investigation and didn’t see any evidence of bias in the investigation’s findings, the adjudicator said.
The adjudicator also found that while Potts had been spoken to about playing cards at work, these weren’t formal warnings and couldn't be counted towards progressive discipline. However, the 10-day suspension was a clear warning that Potts needed to improve and the nation made it clear his employment would be in jeopardy with further misconduct.
The adjudicator agreed that Potts’ actions in taking the loan from the store owner for expenses related to a staff retreat exceeded his authority, but didn’t necessarily warrant termination. However, Potts exacerbated his misconduct when he used Samson Cree Nation goods to repay the loan without trying to make requests through proper channels. The adjudicator found that Potts breached his fiduciary responsibility to the nation as the acting manager in the public works department and it made no difference whether it was a common practice in dealings with the store owner, said the adjudicator.
“(Potts’) use of public works employees, equipment and the misappropriation of materials may have significant consequences to the reputation, relationships and funding arrangements of the nations,” the adjudicator said. “I accept the (nation’s) evidence that Mr. Potts’ actions created a potential liability for the nation and are egregious in the extreme.”
The adjudicator determined there was just cause for the termination of Potts’ employment based in the significance of his misconduct and his previous suspension. See Potts and Samson Cree Nation, Re, 2017 CarswellNat 7306 (Can. Lab. Code Adj.).
