Executive Summary: Key Legal and Evidentiary Issues

• Judicial review centered on whether an adjudicator erred in handling an unjust dismissal complaint under the Canada Labour Code.

• Procedural fairness and bias allegations were raised due to the adjudicator's conduct and interventions during the process.

• Admissibility of a settlement offer as evidence challenged under settlement privilege and administrative discretion.

• The employee’s failure to mitigate damages by rejecting reinstatement was pivotal to the adjudicator’s ruling.

• Applicant argued reinstatement terms diminished her legal rights under the Code and common law.

• Court upheld the adjudicator’s discretion and found no reviewable errors in any of the interim or final decisions.

Facts and outcome of the case

Background and employment termination

Rosana Lopez, the applicant, was employed by the Bank of Nova Scotia (Scotiabank) for over 11 years when her employment was terminated without cause on January 16, 2018. She held the title of Manager, Business Operations, Digital Channels. Scotiabank offered her a severance package contingent on signing a release, which she refused. Nevertheless, the bank paid her 10 months’ salary and benefits in accordance with its obligations.

Lopez subsequently filed two complaints. The first was an unjust dismissal complaint under section 240 of the Canada Labour Code, and the second was a discrimination complaint with the Canadian Human Rights Commission (CHRC), alleging that her dismissal was connected to a prior disability leave. The CHRC declined to proceed, directing the matter to the Labour Code mechanism.

Settlement offers and rejection

In September 2018, Scotiabank offered to reinstate Ms. Lopez, recognizing her original hire date only for pension and benefits but not for severance calculations. She rejected the offer due to concerns that it would compromise her future severance entitlements, preclude legal recourse under the Code for one year, and require her to sign a release.

Adjudicator appointment and decisions

Michael Bendel was appointed as adjudicator in March 2019. Scotiabank conceded the dismissal was unjust, shifting the proceeding to focus solely on remedy. Multiple interim decisions followed, involving issues such as bias, admissibility of settlement offers, and whether the adjudicator should recuse himself. Lopez returned to work provisionally in 2021 pending final adjudication.

The adjudicator ultimately admitted the unmarked settlement offer into evidence under section 16(c) of the Canada Labour Code, which permits adjudicators to consider otherwise inadmissible evidence. He concluded Lopez had a duty to mitigate her losses and had failed to do so by rejecting a reasonable reinstatement offer. Accordingly, the adjudicator denied her claim for additional damages covering the period between her dismissal and reinstatement.

Judicial review and court ruling

Lopez sought judicial review in the Federal Court, challenging the final and interim decisions on grounds of bias, procedural unfairness, and legal errors. She also argued that the settlement offer’s terms infringed on her statutory and common law rights.

Justice Tsimberis dismissed the application for judicial review. The Court found that the adjudicator had acted within his discretion, reasonably assessed procedural and evidentiary matters, and applied established legal principles. Importantly, the adjudicator’s refusal to recuse himself and his reliance on Supreme Court precedent regarding mitigation obligations were deemed appropriate.

Outcome and costs

The Bank of Nova Scotia was the successful party. Although it sought $5,763 in costs, the Court declined to award any costs against Ms. Lopez, citing the protracted and taxing nature of the proceedings. As such, the application was dismissed with no costs awarded.