CUB 43755
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IN THE MATTER of the EMPLOYMENT INSURANCE ACT
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IN THE MATTER of a claim by
CATHERINE WARGA
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IN THE MATTER of an appeal to an Umpire by the claimant from a decision by
the Board of Referees given on March 31, 1998, at New Westminster, B.C.
DECISION
ROULEAU, J.
This is an appeal by the claimant from a decision of the Board of Referees which held that the she was not entitled to benefits as she lost her employment by reason of her own misconduct.
Ms. Warga filed an application for benefits on October 23, 1997, indicating that she had been fired from her job as store manager with Pantorama Ind. Inc. The claimant advised the Commission that her employer had been dissatisfied with her performance as manager and offered her a demotion to assistant manager for $20, 000.00 less in salary per year. Although she accepted the position, Ms. Warga informed her employer that she would be taking legal action against it for constructive dismissal and this was the reason she had been fired.
The Commission contacted the employer who initially stated that the claimant was fired on August 22, 1997, because she informed them that she would be proceeding with a lawsuit relating to her demotion from her retail manager's position (exhibits 5 and 6). The employer's legal counsel advised the Commission that Pantorama was dissatisfied with the claimant's performance as a manager. She had been issued several warning letters in this regard but when there was no improvement Ms. Warga was offered a position as an assistant manager. Counsel confirmed that the claimant accepted the new position on the condition that she would be suing the employer for wrongful dismissal and this led to her dismissal (exhibit 9).
Based on this information, the Commission concluded that the facts did not support a finding of misconduct since the claimant's work performance could not be viewed as ill-intentioned actions but rather that she was not performing her job to the employer's satisfaction. In addition, the Commission did not regard the launching of legal proceedings by the claimant to be an act of misconduct. Although that decision may have created an unpleasant working relationship, it too was not considered by the Commission, to be an ill-intentioned act. The Commission therefore allowed the claim for benefit pursuant to subsection 30(1) of the Employment Insurance Act.
The employer appealed to a Board of Referees arguing that the claimant had in fact lost her employment because of misconduct. In its submissions to the Board (exhibit 14.1), the employer states that:
Ms. Warga's performance as a store manager, despite repeated warnings, enormous assistance and every opportunity to improve, was simply terrible. This exceedingly poor performance over a period of two years cannot be explained by mere incompetence or inexperience. 'The only explanation is that Ms. Warga was unwilling to take the steps necessary to changer her performance. The poor performance was the result of a poor attitude rather than simple incompetence.
The Board of Referees allowed the employer's appeal, stating its reasons as follows:
The claimant was employed as a store manager of a Retail Store after working for the company in their office having worked herself up the position of payroll supervisor. Her total years service with the company was 23 years to August 21 1997. In May 1995 she accepted the position of store manager at her request. Starting September Ist 1995, she received eight letters expressing increasing concern about her performance as a manager and about infractions of the company policy (Ex. 14.21- 14.34). The company viewed her conduct of such a serious nature that she was given one week's suspension from April 17, 1997 to April 23, 1997 (Ex. 14.31).
In the written and oral presentations the claimant was advised that she had the option of being dismissed for cause or accepting a junior management position with a decrease in salary from $45, 000.00 to $25, 000.00 per annum. From the evidence presented the impression was that because she was a long service employee she was to be given the opportunity to rehabilitate her management skills under close supervision.
The employer stated that this offer was made subject to her agreement to not follow through on her threat of litigation (Ex. 14.34, Ex. 20.6).
The claimant stated orally and in writing that all the concerns expressed by the employer had been dealt with in personal interviews with her supervisor. 'There is no documentation that she responded in writing to any of the issues raised in the letters sent to her regarding her performance.
New information was received from the employer (Ex. 20.1 to 20.6) and the claimant (Ex. 21.1 to 21.4). All were considered.
In CUB 34892 and 37306 poor performance is considered good reason for dismissal and considered misconduct. There was ample evidence to show the claimant knew the expectations of the employer and had failed to change her work habits to reflect a desire to live up to them.
Considering all the evidence presented, the Board finds that the claimant was properly dismissed for misconduct.
The claimant now appeals to an Umpire on the grounds that the Board based its decision on an erroneous finding of fact that it made in a perverse or capricious manner or without regard to the material before it.
I am allowing the claimant's appeal for the following reasons.
Pursuant to sections 29 and 30 of the Employment Insurance Act a claimant who loses her employment by reason of her own misconduct is subject to a disqualification from benefits. Although the term "misconduct" is not defined in the legislation, the jurisprudence has established that it requires a mental element of wilfulness or conduct so reckless as to approach wilfulness. Whether the conduct of an employee which results in the loss of her employment constitutes "misconduct" depends largely on the circumstances of each individual case. There must be clear, strong and unequivocal evidence that a claimant was dismissed for misconduct before the Board of Referees can make such a finding. Furthermore, the fact an employer has dismissed an employee for what it believes to be good cause does not necessarily mean that misconduct, for the purposes of the Employment Insurance Act, has been established.
The onus lies on either the Commission or the employer to establish that the loss of employment by a claimant was by reason of her own misconduct. In order to discharge that onus, the Board of Referees must be satisfied that the misconduct was the reason for the dismissal and not merely the excuse for it. This is a factual determination to be made after weighing all of the evidence. In Meunier v. Canada Employment & Immigration Commission (1996), 208 N.R. 377, the Federal Court of Appeal made the following comments with respect to misconduct cases:
It is settled that the misconduct referred to in s. 28(1) "is not a mere breach by the employee of any duty related to his employment; it is a breach of such scope that its author could normally foresee that it would be likely to result in his dismissal". (Canada v. Langlois, A-94-95, February 21, 1996, unreported, F.C.A.). It is also settled that the burden is on the Commission to prove, on the balance of probabilities that the s. 28 conditions have been fulfilled (Choiniere v. Commission de l'emploi et de l'immigration du Canada, A-471-95, May 28, 1996, unreported, F.C.A.). And lastly, it is settled that "an objective assessment [is] needed sufficient to say that misconduct was in fact the cause of the loss of employment (Choiniere), that an employer's mere assurance that it believes the conduct in question is misconduct will not be sufficient (Fakhari v. Canada (Attorney General (1996), 197 N.R. 300 (F.C.A.)) and that "[f]or a board of referees to conclude that there was misconduct by an employee, it must have before it sufficiently detailed evidence for it to be able, first, to know how the employee behaved, and second, to decide whether such behaviour was reprehensible" (Joseph v. Canada Employment and Immigration Commission, A-636-85, March 11, 1986, unreported, F.C.A.).
(emphasis added)
Here, the employer maintains that the claimant was dismissed because of her poor performance as store manager. It maintains that her incompetence with respect to her management duties was wilful or the result of an unwillingness on her part to improve and therefore constitutes misconduct.
However, after considering the arguments of the parties at the hearing before me and reviewing all of the material in the record, including submissions made by both the employer and the claimant, it is clear that the true reason for Ms. Warga's dismissal was that she had commenced, and intended to proceed with, a constructive dismissal action against her employer. Indeed, when the employer was first asked by the Commission why the claimant had been dismissed, two representatives of the employer stated unequivocally that it was because she was continuing her lawsuit against the company (exhibits 5 and 6). This was subsequently confirmed by the employer's solicitor who advised the Commission on November 7, 1997, that the claimant was dismissed as a result of the lawsuit (exhibit 9).
It was not until after the employer had been notified by the Commission that Ms. Warga was entitled to benefits that it changed its position, alleging that she had actually been dismissed because of misconduct, namely, her poor performance as sales manager, her failure to meet sales quotas and her unwillingness to improve.
Under the circumstances, the only reasonable conclusion is that the claimant's alleged misconduct was not the genuine reason for her dismissal but was "merely the excuse" for it. The evidence is clear that she was dismissed because of the constructive dismissal action she had commenced against her employer.
In any event, the types of complaints which the employer had with respect to the claimant do not constitute misconduct. It may well be that Ms. Warga was not capable of a managing a store in the manner expected by her employer insofar as she was unable to meet sales quotas. There is no evidence however, that her poor performance was wilful or intentional. Inaptitude for sales or management do not constitute misconduct.
Finally, the employer's allegation of misconduct can hardly be taken seriously in light of the fact that it did not dismiss the claimant for poor management but instead offered her a position as assistant manager in the hopes that she would receive more training and learn how to be a better manager. By doing so, Pantorama Industries demonstrated that it was more than willing to keep Ms. Warga, a long-time employee, in its employ despite her inability to be a successful store manager. It was not until the constructive dismissal lawsuit became an issue between the claimant and her employer, that she was fired altogether.
I am satisfied therefore, that the Board of Referees erred in law and in fact in finding that the claimant lost her employment by reason of her own misconduct.
For these reasons, its decision is set aside and the claimant's appeal is allowed.
"P ROULEAU"
UMPIRE
OTTAWA, Ontario
January 25, 1999