Conseil des Innus de Pessamit v. Riverin

Conseil des Innus de Pessamit v. Riverin
Court (s) Database
Federal Court Decisions
Date
2017-10-19
Neutral citation
2017 FC 934
File numbers
T-1122-16
Notes
A correction was made on December 22, 2017
Decision Content
Date: 20171019
Docket: T-1122-16
Citation: 2017 FC 934
[ENGLISH TRANSLATION]
Ottawa, Ontario, October 19, 2017
PRESENT: The Honourable Mr. Justice Annis
BETWEEN:
LE CONSEIL DES INNUS DE PESSAMIT
Applicant
and
YAN RIVERIN
Respondent
JUDGMENT AND REASONS
I. Introduction [1] This is an application for judicial review under subsection 18.1(1) of the Federal Courts Act, RSC (1985), c. F-7, of a decision on June 8, 2016, by Bruno Leclerc, acting as an adjudicator in an appeal by the applicant under Division XIV of Part III of the Canada Labour Code, RSC 1985, c. L-2 [the Code].
II. The facts [2] The applicant [the Conseil or the employer] is a council within the meaning of the Indian Act, RSC 1985, c. I-5. Its mission is to protect and manage the interests of the Innu First Nation of Pessamit, whose lands are located to the east of Baie Comeau, Quebec.
[3] The Conseil consists of a Chief and six councillors elected for two years. At the relevant time, the First Nation’s administrative structure consisted of General Directorate that reported directly to the Conseil, and ten sectoral branches that reported in turn to the General Directorate. One of the sectoral branches was economic affairs and natural resources. Decisions adopted by a majority of the Conseil were assigned to the General Directorate to be carried out.
[4] At the time of his termination, the respondent [Mr. Riverin or the respondent] had been Director of Economic Affairs and Natural Resources with the Conseil since 2009. The mandate of the Economic Affairs Branch included the promotion and oversight of the First Nation’s economic activities both on its lands and on the ancestral lands known as Nistassinan. The Branch was also responsible for managing outfitters located on Conseil lands.
[5] From August 2002 to August 2012, Raphaël Picard was the Chief of the First Nation. The economic situation deteriorated under his mandate. Moreover, in January 2008, based on requirements from the Department of Indian Affairs, a co-manager was appointed to handle the organization’s finances. No expenditures could be made without his approval.
[6] In 2011, corrective measures were taken. The number of employees and the length of the work week were reduced. Jean-Marie Vollant was the acting head of the General Directorate since 2010.
[7] On December 8, 2011, Mr. Riverin became a shareholder, director, and president of Uapats, a company operating in the silviculture industry in Nistassinan with the Conseil’s economic partners.
[8] On May 3, 2012, Mr. Riverin represented the Conseil at a tripartite meeting with Résolu and Uapats. At that meeting, the parties discussed an agreement between Résolu and Uapats for silviculture work on Pessamit land and Uapat’s use of the outfitter to house its workers. Mr. Riverin had disclosed his interests in Uapats to some members of the Conseil prior to that meeting, but at least one member present, Adélard Benjamin, was unaware of it.
[9] In June 2012, the Conseil approved the agreement between Résolu and Uapats, and Uapats began its activities. It was only then that Mr. Benjamin was advised of a potential conflict of interest. The situation was accepted because it allowed for the tacit employment of several members of the community, without a formal decision or minutes from the meeting of the Conseil in which the decision was made.
[10] On August 17, 2012, following an election, René Simon became Chief of the First Nation and there were several changes within the Conseil. Jean-Claude Vollant became the head of the General Directorate in September 2012, replacing Jean-Marie Vollant.
[11] Following the election in August 2012, Mr. Riverin took steps to disclose his potential conflict of interest to the new Conseil. No investigation or formal action was taken in response to the disclosure.
[12] Following the election, Chief Simon adopted policies and restrictive measures to improve transparency within the administration and eliminate conflicts of interest. All branches at the time, including Mr. Riverin’s, were advised of this. During that same period, the First Nation’s administration was restructured, leading to the elimination of five branches and the merger of five sectors, including economic affairs and natural resources.
[13] Between November 21 and December 18, 2012, relations between Mr. Riverin and the Director General were tense. At the time, the Director General advised Mr. Riverin that some of his duties would be taken from him. On December 6, Mr. Riverin advised the Director General that he was in a situation of psychological harassment. However, it seems that, following a long meeting on December 18, 2012, Mr. Riverin and the Director General were able to come to an agreement.
[14] On December 10, 2012, the Conseil received a complaint regarding Mr. Riverin’s potential conflict of interest. In January 2013, the Conseil asked the General Directorate to begin an investigation into the matter.
[15] The Director General was unable to obtain information about Mr. Riverin’s potential conflict of interest. On February 12, 2013, he formally called Mr. Riverin to a meeting the next day to submit any relevant documentation and information to him.
[16] In a letter dated February 13, 2013, Mr. Riverin refused to follow up on the Director General’s request without written explanations clarifying the mandate and legal basis cited to investigate the affairs of a private company. He indicated that, if those explanations were not provided, he would bring his requests before the Conseil. That letter also called upon the General Directorate to cease the psychological harassment that he claimed to be facing since the discussions on December 6, 2012.
[17] On February 21, 2013, the General Directorate received a document showing that Mr. Riverin was a shareholder, director, and president of Uapats.
[18] On March 11, 2013, Mr. Riverin obtained a doctor’s note prescribing one month off work. The next day, he filed a harassment complaint against the General Directorate with the Commission de santé et sécurité au travail [CSST].
[19] On March 14, 2013, the General Directorate sent the Chief and the Conseil a preliminary report regarding Mr. Riverin’s conduct. That report proposed two possible recommendations:
[translation]
The first is to offer Mr. Riverin the opportunity to remain within the organization in a different role and with lower-level responsibilities compared to his current ones in exchange for him giving up his activities or interests in the company UAPATS PESSAMIT. The disciplinary measure applied would be demotion. However, the risk with that option is tacit recognition that an apparent or real conflict of interest could be acceptable to the organization and that that could be interpreted as setting a precedent.
The second option is more draconian. It consists of applying the harshest disciplinary measure, termination for good and sufficient cause. Clearly, in the specific case of Mr. Riverin and insofar as a real conflict can be demonstrated, it is the only possibility based on the public interest. Of course, it can always be done based on the principles of natural justice.
[20] According to the applicant, those recommendations could not be approved at that time by a resolution of the Conseil as the Conseil was unable to rule on the matter because certain elected members abstained for personal reasons that were in no way related to the merits of the issue of Mr. Riverin’s conflict of interest.
[21] On April 4, 2013, the complaint of psychological harassment was dismissed in its entirety. On July 15, 2013, Mr. Riverin resumed his duties.
[22] In the spring of 2014, the Conseil asked Mr. Riverin to give the keys of one of his outfitters to one of his subordinates. According to Mr. Riverin, he did not have the keys.
[23] In May 2014, Mr. Riverin filed his candidacy as chief of the Conseil. On August 17, 2014, a new Conseil was elected and Mr. Riverin was defeated by Chief Simon.
[24] In September 2014, the Director General asked Mr. Riverin to give the keys of one of his outfitters to the Conseil’s territorial agents, but Mr. Riverin refused to do so.
[25] On October 21, 2014, the Conseil adopted the following resolution:
[translation]
Following a presentation by the Director General and explanations from Kenneth Gauthier [the Conseil’s lawyer] regarding the matter of Yan Riverin, the Conseil decided to approve the recommendation resulting from that process.
The Director General having followed all steps in the employment policy and having advised the person in question of his failures, Mr. Yan Riverin did not take steps to correct his conduct. Despite numerous warnings regarding his failures, meetings with Mr. Riverin, and repeated requests to comply with instructions, the situation has not changed.
The Conseil authorizes the Director General to terminate Yan Riverin’s employment as Director of Economic Development, effective October 31, 2014.
[26] On October 30, 2014, the Conseil sent Mr. Riverin a notice of termination citing the following grounds:
[translation]
(a) You are a shareholder and director or officer of the company 9255-3601 Québec Inc., operating under the name Uapats Pessamit.
(b) That corporation, of which you have control, does business in areas in which the Conseil plays a key role, which places you in a conflict of interest.
(c) Despite several clear and formal requests, you have categorically refused to provide your immediate superior with information regarding your activities within that company and activities involving that company.
(d) You have been insubordinate toward your immediate superior by refusing to follow instructions that he has given you.
(e) You have been insubordinate on numerous occasions, particularly in directly addressing the Conseil des Innus de Pessamit without following the line of authority.
(f) You have breached orders and instructions from your immediate superior.
(g) You filed a complaint against your immediate superior in bad faith, maliciously, and without justification.
(h) You refused and/or failed to apply policies and/or directions indicated by your immediate superior.
(i) You were repeatedly absent from your work and your duties without reasonable justification.
(j) You refused to do your work by not submitting various DIAND reports and annual budgets, thus forcing other members of the Conseil or the organization to do your work.
(k) You refused to give the keys to the facilities of an outfitter owned by the Conseil to the territorial agents despite numerous requests for such from the Conseil’s Director General.
(l) Your attitude, your conduct, and your activities that are incompatible with your duties are not consistent with the directions that the Conseil des Innus de Pessamit intends to take regarding Economic Affairs.
(m) Certain situations described above had already been reported by previous Directors, but you did not change your conduct or attitudes.
[27] Mr. Riverin filed a complaint for unjust dismissal under section 240 of the Code.
[28] On June 8, 2016, Bruno Leclerc found that Mr. Riverin’s dismissal was unjust within the meaning of the Code and that he was entitled to be reinstated to his position.
III. Impugned decision [29] In his decision, Mr. Leclerc began by dismissing the Conseil’s preliminary argument that Mr. Riverin cannot benefit from the provisions of Division XIV of the Code, as they do not apply to employees who are directors, and the adjudicator therefore does not have jurisdiction to hear the unjust dismissal complaint. That conclusion was not challenged in this application for judicial review.
[30] The adjudicator examined the grounds cited in the notice of termination on October 30, 2014 and began his analysis by describing the burden on the Conseil:
[translation]
The many facts alleged in letter P-4, if proven, can justify the complainant’s termination. Under the rule of law, the person seeking to invoke a right—in this case the right to termination the complainant’s employment—must prove the facts that support their claims.
[31] The adjudicator then summarized the testimonies, the documentary evidence and the observations by the parties. In summarizing the Conseil’s observations at paragraphs 135 to 138 of his reasons, the adjudicator described the Conseil’s functions without referring to economic development, but mentioned that there is a contractual relationship between the Conseil and Uapats, that Mr. Riverin had no decision-making power, and that Mr. Riverin had disclosed his interests to the Conseil in 2010. He then stated the following at paragraph 145:
[translation]
And, on this matter of the breach of his obligations, as with the allegation of conflict of interest, I agree with the arguments by counsel for the complainant.
[32] The adjudicator concluded his decision with a very brief four-paragraph analysis in which he concluded that the Conseil followed an inadequate procedure in dismissing Mr. Riverin. Based on arguments by Mr. Riverin regarding the allegations of conflict of interest and the issue of breach of his obligations, He added that the alleged acts of insubordination were in fact an attempt by Mr. Riverin to have his rights respected. Finally, he concluded that Mr. Riverin’s employment was brought into question in 2012 under a false pretext and that he had been terminated in bad faith for political reasons.
IV. Relevant law [33] Mr. Riverin filed a complaint for unjust dismissal under subsection 240(1) of the Code:
Complaint to inspector for unjust dismissal
Plainte
240 (1) Subject to subsections (2) and 242(3.1), any person
240 (1) Sous réserve des paragraphes (2) et 242(3.1), toute personne qui se croit injustement congédiée peut déposer une plainte écrite auprès d’un inspecteur si :
(a) who has completed twelve consecutive months of continuous employment by an employer, and
a) d’une part, elle travaille sans interruption depuis au moins douze mois pour le même employeur;
(b) who is not a member of a group of employees subject to a collective agreement, may make a complaint in writing to an inspector if the employee has been dismissed and considers the dismissal to be unjust.
b) d’autre part, elle ne fait pas partie d’un groupe d’employés régis par une convention collective.
V. Issues [34] The only issue is whether the adjudicator’s decision is reasonable.
VI. Standard of review [35] The standard of review regarding the adjudicator’s findings of fact are set out in subsection 18.1(4) of the Federal Courts Act, RSC 1970, c. F-7: was the adjudicator’s decision based on an erroneous finding of fact, made in a perverse or capricious manner or without regard for the material available to him? That standard requires a high degree of deference.
[36] The adjudicator’s application of the legal criteria applicable to unjust dismissal is a mixed question of fact and law. We can thus assume that, as part of the review, we must seek to determine whether the adjudicator’s decision was unreasonable. Moreover, the presence of a strong privative clause in section 243 of the Code also indicates that the standard of reasonableness must be applied and that a high degree of deference must be shown to the expertise of the adjudicator (see Colistro v BMO Bank of Montreal, 2008 FCA 154, at para 6, and Canadian Imperial Bank of Commerce v Torre, 2010 FC 105, at para 7).
VII. Parties’ submissions [37] The Conseil argued that a review of the decision shows that the adjudicator never conducted a true analysis of the reasons for termination, i.e. the existence of a conflict of interest and insubordination. The adjudicator gave no consideration to the important facts raised by the Conseil in support of its reasons for termination and conducted a partial analysis. Moreover, the adjudicator’s decision was unreasonable because he failed to consider the relevant context. The decision was also unreasonable because the adjudicator did not address the allegations of insubordination. Finally, the adjudicator exceeded his jurisdiction by reviewing a resolution adopted by the Conseil instead of analyzing the reasons for termination cited by the Conseil.
[38] For his part, Mr. Riverin submitted that the adjudicator reasonably analyzed the merits of the relevant evidence regarding the allegations of conflict of interest and insubordination and that the Court must show deference to his expertise. Moreover, the adjudicator had the jurisdiction to analyze the legality of the decision made in the resolution by the Conseil.
VIII. Analysis [39] The allegations against Mr. Riverin are, in my opinion, related primarily to the central issue of his conflict of interest with Uapats, but are categorized as follows: those related to the alleged conflict of interest and those related to his insubordination.
[40] The allegations contained in the termination letter regarding the conflict of interest with the Conseil are as follows:
[translation]
Our client indicates that you are Director of Economic Development for Pessamit.
[…]
(a) You are a shareholder and director or officer of the company 9255-3601 Québec Inc., operating under the name Uapats Pessamit.
(b) That corporation, of which you have control, does business in areas in which the Conseil plays a key role, which puts you in a conflict of interest.
[…]
1) Your attitude, your conduct and your activities that are incompatible with your duties are not consistent with the directions that the Conseil des Innus de Pessamit intends to take regarding Economic Affairs.
[Emphasis added]
[41] The allegations regarding insubordination relevant to the issue of conflict of interest are as follows:
[translation]
(c) Despite several clear and formal requests, you have categorically refused to provide your immediate superior with information regarding your activities within that company and activities involving that company.
[…]
(e) You have been insubordinate on numerous occasions, particularly in directly addressing the Conseil des Innus de Pessamit without following the line of authority.
[…]
g) You filed a complaint against your immediate superior in bad faith, maliciously, and without justification.
[…]
k) You refused to give the keys to the facilities of an outfitter owned by the Conseil to the territorial agents despite numerous requests for such from the Conseil’s Director General.
[42] Paragraphs (c), (e) and (g) address Mr. Riverin’s conduct in the spring of 2013, particularly the issue of whether he acted maliciously to hinder the investigation aimed at determining whether he was in a conflict of interest with the Conseil. The allegation in paragraph (k) is related to Mr. Riverin’s refusal to turn over the keys to the Conseil’s outfitter in September 2014. Uapats was using the outfitter to house its workers when they were working on Pessamit lands. Those allegations must not be confused with the ones related directly to the conflict of interest, but they are relevant to the allegations of insubordination in relation to the conflict of interest.
[43] My analysis will first examine the reasonableness of the adjudicator’s reasons regarding Mr. Riverin’s termination. I will then examine whether the decision to dismiss Mr. Riverin was flawed or made in bad faith.
A. The adjudicator’s analysis of the allegations of conflict of interest were unreasonable (1) Introduction [44] Regarding the conflict of interest in question in this case, I am of the opinion that the adjudicator incorrectly interpreted the law. The key issue is whether the employee’s private interests were incompatible with his duty to his employer. To determine whether there is such a conflict of interest, the objective context of the employment must be examined without considering the employee’s alleged misconduct. To distinguish that type of conflict of interest from the one involving misconduct by the employee, I refer to the first conflict of interest as situational, as opposed to a disciplinary or wrongful conflict of interest. In my opinion, the adjudicator did not understand or properly analyze the allegations by the Conseil that it had to terminate Mr. Riverin, as he was in a conflict of interest with the Conseil, but instead considered that the case was solely related to discipline.
[45] My analysis will be structured as follows. I will first examine the law regarding situational conflicts of interest, beginning with the jurisprudence cited by Mr. Riverin before the adjudicator. I will then lay out the reasoning behind my conclusion that the adjudicator misunderstood the relevant principles and instead conducted an analysis that was not relevant to conflictual irreconcilable interests. I will conclude by examining the evidence that was not examined by the adjudicator: first, Mr. Riverin’s disclosure of his conflict of interest to the members of the previous Conseil; and secondly, the inability to reach a decision in that regard prior to the election of a new Conseil in the fall of 2014.
(2) The Conseil argued that the respondent was in an irreconcilable conflict of interest. [46] The adjudicator’s reasons describing the Conseil’s observations are not detailed, but the adjudicator nonetheless indicated that the Conseil cited the Federal Court of Appeal decision in Canadian Imperial Bank of Commerce v Boisvert, [1986] 2 FC 431 (FCA) [Boisvert]. In that case, the Court quashed the adjudicator’s decision because he had concluded that all terminations for “just cause” under the Code require a certain degree of fault or wrongful conduct by the employee. The decision also set out certain principles applicable to irreconcilable situational conflicts of interest.
[47] Writing for the majority in Boisvert, McGuigan J. did not subscribe to the proposition that there must be a wrongful act for an unjust dismissal due to conflict of interest to be just under the Code. He concluded that such a requirement would make the definition of conflict of interest too restrictive. I quote paragraphs 28 and 35 of Boisvert regarding these points:
[28] In its argument, the Bank invited this Court to conclude that the facts in the record showed that there was a conflict of interest between the respondent and the Bank. I feel that such a conclusion is too restrictive: the only question raised by the case at bar is whether, to use the words of Lord Esher, supra, “he does anything incompatible with the due or faithful discharge of his duty to his master”, and there are an incalculable number of situations which can establish such incompatibility. t is irrelevant whether the facts of the case at bar fall within the ordinary limits of conflict of interests, since incompatibility with the respondent’s duties to her employer will suffice.
[…]
[35] It is clear from this passage that the Adjudicator had an entirely mistaken view of the law. In his opinion, for just cause for dismissal to exist the respondent would have had herself to commit an act that is illegal or contrary to law. If that were the test, that would eliminate many conflict of interest situations. The true test of an employee’s misconduct, however, is that stated by Lord Esher, supra: it applies to acts of the employee which are “incompatible with the due or faithful discharge of his duty to his master”
[Emphasis added]
[48] I understand that, when the court referred to the “ordinary limits of a conflict of interests” in paragraph 28, it had in mind situations involving a wrongful act. In Boisvert, no fault was assigned to the employee of the bank because she had a spouse who had committed several bank robberies.
[49] In Boisvert, the Court described the other relevant factors regarding conflicts of interest as follows at paragraph 27:
[27] […] Actual prejudice to the employer need not be proved. Potential harm is sufficient: Empey v Coastal Towing Co. Ltd., [1977] 1 W.W.R. 673 (B.C.S.C.); Tozer v Hutchinson (1869), 12 N.B.R. 540 (C.A. W.-B.). As it was put by Meldrum J. in Bursey v Acadia Motors Ltd. (1979), 28 N.B.R. (2d) 361, at page 370, varied in another respect on appeal (1982), 35 N.B.R. (2d) 587):
There is no evidence that defendant was in any way harmed by the potential conflict of interest. Nevertheless, in conflict of interest situations, the rule of Caesar’s wife applies. It must not only be pure, it must be seen to be pure.
It is irrelevant that the employee’s conduct was designed to protect only his own interest and not intended to injure that of his employer: Federal Supply and Cold Storage Co. of South Africa v. Anghrn & Piel (1910), 80 LJPC 1; Empey v Coastal Towing Co. Ltd., supra.
[50] In other words, the potential or apparent incompatibility between the employee’s interests and those of the employer is enough to show the existence of a conflict of interest. On the other hand, a situational conflict of interest does not require any wrongdoing or concern regarding the employee’s honesty.
[51] In his reasons, the adjudicator also referred to the decision by the Commission des relations du travail du Québec in Bergeron c Agence métropolitaine de transport, 2007 QCCRT 482 [Bergeron]. That decision provides a complete description of a situational conflict of interest, as well as a detailed analysis of the facts in a situation in which the employee was not accused of any misconduct.
[52] However, the adjudicator did not use that decision to clarify the principles related to situational conflicts of interest or as a model for analyzing such cases. He instead cited it, regarding the issue of determining the adjudicator’s jurisdiction regarding an executive, to show a situation in which an employee had no decision-making power. In fact, in Bergeron, the employee was in a situational conflict of interest even though he had no decision-making power, which supports the Court’s finding that the adjudicator misunderstood the nature of the conflict of interest before him.
[53] Bergeron sets forth the guiding principles applicable to situational conflicts of interest and adopts the following passage from Ville de Montréal c Syndicat des fonctionnaires municipaux de Montréal (AZ-85142046), in which the adjudicator described the irreconcilable conflict of interest as follows:
[translation]
A conflict of interest is a situation in which a person can or is required to choose between two interests.
Those two interests can be their own or that of their employer, or the interest of a friend or person they wish to serve and the interest of the person they must serve.
With such a definition, there is no need for the person to have to choose between two interests, but simply to be in a position to choose.
[54] After hearing the arguments related to situational conflicts of interest and having cited related jurisprudence, the adjudicator had to correctly apply the guiding principles and consider the relevant facts in his analysis.
(3) The adjudicator did not examine the issue of conflict of interest in the public sector. [55] As Director of Economic Affairs and Natural Resources, Mr. Riverin held a key public sector position in his community. Conflicts of interest in the public sector often raise issues of situational conflicts of interest. That context does not seem to have been examined by the adjudicator.
[56] The Conseil’s policy expressly refers to the need to avoid conflicts of interest, as indicated in paragraph 2.2.4 of the Conseil’s employment policies:
[translation]
Obligation to avoid conflicts of interest:
A conflict of interest is a situation in which an employee has enough personal interest that it overrides, or could override, the public interest under which the employee exercises his or her duties.
The concept of conflict of interest is a very broad one. Indeed, for there to be a conflict of interest, there need simply be a potential situation of conflict, a real possibility that the personal interest, whether monetary or moral, is preferred over the public interest.
When in a situation in which they believe they are likely in a conflict of interest, employees must advise their superiors so the appropriate measures to be taken can be determined.
[Emphasis added]
[57] First, the obligation of advising the employer of conflicts of interest is a relevant consideration that was not examined by the adjudicator when he analyzed Mr. Riverin’s refusal to provide information regarding his potential conflict of interest when the Director General asked him to do so in February 2013.
[58] Moreover, the Conseil’s policies seem to be similar to those set out on pages 132 to 134 of René Dussault and Louis Borgeat’s Administrative Law: A Treatise (2nd edition):
(b) Conflict of interest
Generally, conflict of interest may be defined as “a situation in which a public employee has a private or personal interest sufficient to influence or appear to influence the objective exercise of his official duties”.
[Note: The footnote related to this statement describes in detail the basis for non-disciplinary conflicts of interest based on the general principle of incompatible interests as follows:
The Personnel Management Manual, supra, note 143, vol. 1, c. 3, p. 1, defines conflict of interest as follows: “Actual or potential conflicts of interest can be defined as situations when employees’ personal affairs or interests clash or appear to clash with their official duties and responsibilities, or which could affect their judgement to act in the best interests of the public service”.]
Conflict of interest arises primarily in three types of situations: when public servants are responsible for contracts, loans or government grants and may thereby derive financial benefit; when they make use of their decision-making power or influence to the advantage of groups or persons with whom he or she has a relationship of a business, friendly or family nature; and where they may use information to which they have privileged access due to their employment for their personal advantage.
[…]
The second type of conflict, which may lead to exercise of undue influence, is of extreme gravity, given the extent of the repercussions it may have on all levels of the Administration, and especially on the decision-making process. In this situation, which violates the fundamental rule of natural justice, nemo judex in sua causa, the public servant cannot avoid being biased in his decision.
[Note: The footnote related to the first sentence of this paragraph gives the following relevant example of undue influence over a decision-making process:
The author cites by way of example the case of an employee who has an interest in the business of a corporation or public agency (such as a municipality or school board) and who may influence the government’s decision on an application for loans, grants, or other benefits advantages that corporation or agency may make.]
The third type of conflict of interest concerns the use of confidential information obtained by the public servant in the performance of his duties. “Misappropriation” of information for the benefit of private interests is explicitly prohibited in both jurisdictions.
[Notes omitted]
[59] As we will see later in more detail, the adjudicator did not examine or apply these guiding principles in his analysis of the respondent’s situation as a public servant. According to the adjudicator, conflicts of interest seem instead to refer to situations in which an employee competes with the employer, which is not at all relevant to the issues before us.
(4) The adjudicator misinterpreted and incorrectly applied the law regarding conflicts of interest. [60] At paragraphs 135 to 137 of his decision, the adjudicator indicated that he agreed with the respondent’s observations regarding both the law regarding conflicts of interest and the application of that law to the facts of the case. Consequently, the analysis consists primarily of stating and confirming the employee’s observations in that regard.
[61] I am of the opinion that, in his analysis, the adjudicator misinterpreted and incorrectly applied the law regarding conflicts of interest and committed the following unreasonable errors in concluding that there was no conflict of interest:
a) The adjudicator relied on the lack of competition between the Conseil and the respondent’s corporation.
b) The adjudicator did not describe the relevant interests of the Conseil.
c) The adjudicator relied on the fact that the respondent had no decision-making power.
d) The adjudicator relied on the lack of a contractual relationship between the Conseil and the respondent’s corporation.
e) The adjudicator relied on the respondent’s disclosure of his interests in Uapats to the Conseil in 2010.
a) The adjudicator relied on the lack of competition between the Conseil and the respondent’s corporation. [62] I find that the adjudicator committed an error by focusing on irrelevant issues related to the employee’s obligation to avoid competing with the employer or unduly favouring his personal interests over those of the employer.
[63] That error can be seen in the adjudicator’s finding in paragraph 135 of his decision, where he cites one of his own decisions, Premier aviation centre de révision inc c Barbeau, 2008 CanLII 50524, in which he quoted a work by Robert P. Gagnon on labour law that described the law applicable to conflicts of interest as follows:
[translation]
[135] Was Mr. Riverin in a conflict of interest? First, counsel referred me to paragraphs [51] and [52] of my decision on August 25, 2008, in Premier aviation centre de révision inc. and Yves Barbeau in which, addressing this issue from a loyalty standpoint, I wrote:
[51] Robert P. Gagnon, in his work Le droit du travail du Québec, wrote the following regarding the duty of loyalty:
114 –Loyalty – Employee works for an employer in exchange for pay. That fact and the good faith that article 12375 of the CCQ requires in their conduct naturally require honesty and loyalty to the employer and his or her business. The degree of the duty of loyalty will vary based on the nature of the duties and responsibilities assigned to the employees, with those who have management responsibilities within the company or who are key employees being held to a greater duty, similar to the duty of mandatories to their mandator. In all cases, employees’ conduct must not be dishonest toward their employer or harm the employer’s reputation without valid reason. Similarly, they must avoid any conflict of interest, particularly by favouring a competitor of their employer or unduly personally benefiting from their employment, to the employer’s detriment.
Subject to that and if there is no non-competition clause, the employer cannot prohibit them from holding another job. Employees are also not prohibited, in principle, from preparing to eventually carrying on the same activity as their employer, either for another employer or on their own account, or from using the knowledge and experience acquired during their employment. However, they must abstain from any aggressive conduct against their employer’s interests while employed by the employer and, in some regards, even after leaving their job.
[52] As indicated by this author, noting prevents employees from eventually carrying on the same activity as their employer or using the knowledge and experience acquired during their employment, even through the training they received. They must, however, avoid conflicts of interest and situations that could lead them to compete directly or indirectly with their employer in the same line of business while still employed by the employer. Those are, in my opinion, the rules and guidelines that were presented to me by counsel for the parties and in reading the work by Mr. Gagnon.”
[Notes omitted, emphasis added]
[64] At paragraph 136 of his reasons, the adjudicator pursues his analysis as follows, emphasizing the lack of competition between the respondent and the Conseil:
And, as his colleague stated in his arguments, the Conseil is not a commercial or industrial business, while Uapats is a business whose main activity is silviculture. How can those two entities compete?
[65] As has already been mentioned, the passage from Mr. Gagnon’s work addresses general principles related to labour law and, indeed, the two passages cited above are the only references to the issue of conflict of interest in his entire decision. Those two short paragraphs only refer to circumstances in which employees are competing with their employer or are benefiting from their position to the detriment of their employer.
[66] As a public servant, Mr. Riverin was in a conflict of interest, but not competing with the Conseil. The conflict of interest instead stems from the incompatibility of his private interests and his duties as a senior executive within the Conseil. As a public service employee of the Conseil, he is subject to all three of the situations that can give rise to a conflict of interest in the public sector, as identified by Dussault and Borgeat, and the adjudicator did not examine any of them.
[67] First, as a third-party provider of services under the contractual relationship between Résolu and the Conseil, Uapats benefited financially from the respondent’s position by carrying on forestry activities in Pessamit. Those arrangements were entered into on May 3, 2012, at a tripartite meeting involving the Conseil, Résolu (formerly Abitibi‑Bowater), and Uapats. The respondent was at that meeting as a representative of the Conseil and had not disclosed his interests in Uapats.
[68] The respondent’s situation also raises concerns regarding an apparent and potential conflict of interest related to the second and third types of conflict identified by Dussault and Borgeat for public servants. The respondent held a position as a senior executive within the Conseil, which gave him direct access to confidential information and expertise regarding the Conseil’s potential or ongoing economic development projects. His duties also allowed him to make recommendations and influence decisions related to economic development and the exploitation of natural resources that could have an impact on Uapats’ activities and from which it could benefit. Moreover, as is seen in the complaint that the Conseil received in December 2012, the conflict of interest is obvious to members of the community, who found that the senior official responsible for economic development and the exploitation of natural resources was also president of a corporation carrying on activities in one of main resources sectors on their lands.
b) The adjudicator did not describe the relevant interests of the Conseil. [69] The adjudicator failed to recognize that the promotion and development of economic activities related to Pessamit resources were among the duties and interests of the Conseil, which acted on behalf of the community. At paragraph 136 of his reasons, citing testimony by Jean‑Claude Vollant, the former Director General (not to be confused with Jean‑Marie Vollant, who replaced him), the adjudicator listed the following duties of the Conseil:
[translation]
1. Protect and safeguard the interests of members of the community;
2. Promote traditional and cultural values; and
3. Provide services to the public.
[70] Given the issues in this case, the Court finds it hard to understand how the adjudicator could fail to consider the important role that the Conseil played on behalf of the community in promoting economic development and the exploitation of resources. I find that we must take judicial notice that communities in Canada place great importance on promoting their economic development. Clearly, that is also true for the Conseil. It was made up of