FPSLREB Decisions

[1]   On March 1, 2001, Brian Kelly, a Correctional Officer (CX-01) at Kingston Penitentiary (KP), was suspended without pay pending an investigation into alleged misconduct (Exhibit E-21). Following the investigation, Mr. Kelly was discharged as stated in a letter to him signed by the Warden, Monty Bourke (Exhibit E-23).

[2]   The letter of discharge was dated March 20, 2001 and reads:

This is further to the disciplinary investigation commissioned to review allegations of infractions of the Correctional Service of Canada's Standards of Professional Conduct and the Code of Discipline. The matter has now been investigated and the final report was provided to you on March 14, 2001. You were given the opportunity to review the disciplinary report prior to the disciplinary hearing on March 16, 2001. During this hearing, you denied all allegations of misconduct once again.

Based on the evidence gathered, you were involved in several acts of very serious misconduct. You have had inappropriate relations with an inmate. You requested a loan from an inmate for the purpose of financing a property. You met with a friend of the inmate to discuss details of the financing arrangement and to view properties. You were aware that the proposed financing arrangement involved your participation in money laundering with an inmate. In addition, the inmate made personal calls to you and received personal calls from you using a cellular telephone. You failed to report that the inmate had unauthorized access to a cellular telephone.

I have carefully reviewed all facts and circumstances, and based on all available information, I have concluded that you have violated the Correctional Service of Canada's Code of Discipline and Standards of Professional Conduct. You have failed to responsibly discharge your duties, you have had an inappropriate relationship with an inmate and you have attempted to use your position in the Correctional Service of Canada for personal advantage.

In reaching my decision, I have given all due consideration to your employment record and to your denial of all allegations of misconduct. Given the nature and gravity of your misconduct, I can only conclude that the bond of trust that is fundamental to the employment relationship has been irrevocably broken. Moreover, the behaviour that you have demonstrated is grossly incompatible with the conduct expected of a Correctional Officer of the Correctional Service of Canada.

Accordingly, by virtue of the authority vested in me under Section 11(2) of the Financial Administration Act as well as the authority delegated to me by the Commissioner, you are hereby advised that your employment with the Correctional Service of Canada is terminated effective March 01, 2001 at 1600 hours.

You are entitled to present a grievance against this action in accordance with your Collective Agreement.

[3]   The grievor submitted a grievance against his indefinite suspension and a grievance against the termination of his employment. These grievances were referred to adjudication on September 12, 2001. I heard from six witnesses. Twenty-three exhibits were filed by the employer, and four exhibits were filed by the grievor. A request was made, and granted, for the exclusion of witnesses.

[4]   Up to the commencement of the hearing, Mr. Kelly had continually denied his participation in the events as described by the employer. This changed when Mr. Kelly's counsel stated that the facts, as alleged by the employer, would not be denied. However, the grievor would advance an explanation as to why he had done what he had done and why he had denied the allegations up to this point in time.

Background

[5]   In December 1997, Monty Bourke became the Warden at KP. Shortly after his arrival, Mr. Bourke became aware of allegations of corruption concerning correctional officers at KP. As a result, a request was made to the Royal Canadian Mounted Police (RCMP) to conduct a covert operation, dubbed "Project O Correct", to determine the veracity of these allegations. The parties in this hearing agreed that the information detailed in a previous decision I rendered, Chénier 2002 PSSRB 40 (166-2-30887 and 30888), with respect to "Project O Correct" would apply to this decision.

[6]   At an early stage in "Project O Correct" the police force felt they needed someone inside KP to provide them with information about alleged corrupt correctional officers. The Institutional Preventative Security Officer (IPSO), Rick Rogers, was asked to identify someone who could act as an agent informer for the police, and eventually an inmate was selected. This inmate agent has been referred to in the Chénier decision (supra) as Agent 2, and I will continue that trend. On March 31, 2000, a document tilted "Letter of Acknowledgement" was drawn up between Agent 2 and the police stating that Agent 2 would assist in the police investigation (Exhibit E-7).

[7]   Agent 2 was a very high profile inmate. There was no dispute that extraordinary security measures were taken to ensure Agent 2's safety due, at least in part, to the fact he was about to testify for the Crown in a trial concerning alleged mob figures. It was also stated that Agent 2 was incarcerated because he was a triple murderer.

[8]   As part of "Project O Correct" Mr. Bourke authorized the introduction of a cell phone into KP. Normally, a cell phone would be considered as "contraband" due to the fact its use could jeopardize the security of the institution. However, in this case the police forces involved in the covert operation were working with Agent 2 and felt it advisable to give the inmate agent a cell phone.

[9]   Jeff McCann, a Sergeant with the Ontario Provincial Police, was the primary investigator in "Project O Correct", and was responsible for handling Agent 2. This meant all information provided by Agent 2 would end up being given to Sergeant McCann, either directly or indirectly.

[10]   On April 6, 2000, Agent 2 contacted Sergeant McCann to say that a correctional officer by the name of Dave Perkins was going to be travelling to Montreal to purchase cocaine. Mr. Perkins was one of the targets of the covert operation from the outset and is now deceased. Sergeant McCann ordered surveillance to be placed on Mr. Perkins, and this was done by some 10 police officers from special operations. They followed Mr. Perkins to Montreal; then while returning to his home in Kingston, he was observed stopping off at Mr. Kelly's home in Brockville.

[11]   Mr. Kelly stated that he was surprised to see Mr. Perkins at his place, as he did not know Mr. Perkins very well at that time. The house Mr. Kelly was living in was an expensive home but he was only renting it, having signed a one-year lease from March 1, 2000 to March 1, 2001. Mr. Kelly said that Mr. Perkins stopped by to look at the house and Mr. Kelly estimated the visit lasted 15-30 minutes at the most, but Sergeant McCann said the visit lasted some two hours.

[12]   Sometime within the next two weeks Mr. Kelly met Mr. Perkins again, in the parking lot at KP, and Mr. Perkins said he had heard that Mr. Kelly was interested in purchasing a home. Since Mr. Perkins was in the process of securing a mortgage himself at that time, he said Mr. Kelly could contact him about the financing if he needed to.

[13]   Unbeknownst to Mr. Kelly, Mr. Perkins in fact had been arranging the financing of a house between himself and Agent 2. The police had been able to have Agent 2 give the impression that he had lots of money, obtained through selling cocaine and he wanted to launder it.

[14]   Mr. Kelly stated that Mr. Perkins approached him three or four times within the following two weeks, continually asking about financing the purchase of a home. Mr. Kelly told Mr. Perkins he was not interested in buying at that time but Mr. Perkins continued to push the subject about financing. Finally, in one conversation, Mr. Perkins told Mr. Kelly that the financing was through an inmate at 1% below the prime rate. Mr. Kelly asked who the inmate was but Mr. Perkins would not say. However, he did tell Mr. Kelly that four other staff members were getting mortgages through this particular inmate.

[15]   Mr. Kelly asked who the staff members were that were getting mortgages through the inmate, and Mr. Perkins replied he did not know. Mr. Kelly testified he informed Mr. Perkins he was interested in securing the financing. When asked by his counsel why he said he was interested, Mr. Kelly replied: "I wanted to find out who the offender was who was securing these mortgages."

[16]   The next event of significance took place on July 13, 2000 when Mr. Kelly was asked to escort Agent 2 outside the hospital area where he was being held, for a cigarette.  While there, Mr. Kelly testified Agent 2 raised the subject of financing a mortgage, and Mr. Kelly told Agent 2 he was interested.

[17]   When asked by his counsel why he told Agent 2 he was interested in obtaining financing, Mr. Kelly replied he was trying to find out who the inmate was who was offering the financing so he could report it. He testified: "At this time it was information gathering". Mr. Kelly testified he was also trying to find out the names of the other staff members involved.

[18]   After Agent 2 and Mr. Kelly met on July 13, 2000 Agent 2 informed Sergeant McCann that Mr. Kelly had approached him saying he was interested in purchasing a home and would require financing; according to Agent 2, Mr. Kelly asked if Agent 2 was interested. Sergeant McCann stated that Agent 2 had not been asked to target Mr. Kelly.

[19]   Sergeant McCann instructed Agent 2 to tell Mr. Kelly to bring in some house listings if the subject of financing the mortgage arose again.

[20]   On July 24, 2000, Mr. Kelly received a telephone call at his residence and he recognized the caller as Agent 2. During the conversation he could hear Mr. Perkins in the background, and thought the call was being made on Mr. Perkins' cell phone. The conversation was brief, and Mr. Kelly testified he thought it related to his interest in securing a mortgage.

[21]   Sergeant McCann stated that Agent 2 contacted him on July 27, 2000 to say that Mr. Perkins had visited him in his cell and had given him Mr. Kelly's home phone number, and indicated Mr. Kelly had asked that Agent 2 contact hiM. Consequently, Agent 2 contacted Mr. Kelly, as described above, and discussed the house purchase. Agent 2 stated that Mr. Kelly indicated he was still thinking about it and had some reluctance to proceed.

[22]   Sergeant McCann identified Exhibits E-9 and E-10 as a record of incoming and outgoing calls to Agent 2's cellular phone. Exhibit E-8 shows the phone numbers for Agent 2, Mr. Kelly and others involved in this case. These exhibits indicate a call was made on July 27 from Agent 2's cell phone to Mr. Kelly's residence and the call lasted approximately six minutes.

[23]   By the end of July 2000, Mr. Kelly testified that he knew that Mr. Perkins was "dirty" and that Agent 2 was involved. He did not know the names of the other officers involved, so he decided to visit Agent 2 in his cell to attempt to gather information on these other correctional officers. On July 27 or 28, 2000, Mr. Kelly went to the hospital area where Agent 2 was being held and asked about the other correctional officers involved.

[24]   Agent 2 evaded the questions, and so Mr. Kelly told him he was going to report him to the IPSO or his Correctional Supervisor. Mr. Kelly said Agent 2 "freaked out", and swore at him, then threatened his wife and son, mentioning the name of the city his son lived in. His son did not reside with him at that time. Agent 2 also said to Mr. Kelly that he had the warden, the IPSO and the police in his back pocket. In cross-examination Mr. Kelly said this exchange was not loud enough for other officers who worked nearby to hear.

[25]   When asked by his counsel what his reaction was to this outburst, Mr. Kelly said he was upset, angry and fearful. He went home that evening and reflected on what had taken place, speaking to his wife about it but omitting any mention of the threats that were uttered.

[26]   Mr. Kelly felt that perhaps the warden and the IPSO were somehow involved with Agent 2 and he also knew Agent 2 could not carry out the threats himself as he was incarcerated. Someone on the outside would be needed to carry out this threat and Mr. Kelly knew that Agent 2 had mob connections.

[27]   It took Mr. Kelly a few days to figure out what to do, but when Agent 2 contacted Mr. Kelly at his home and asked him to meet a friend from the outside, a friend referred to as Agent 2's right hand man by the name of John, Mr. Kelly decided to meet this individual.

[28]   This meeting had been set up by Sergeant McCann. It was set for August 19, 2000 and undercover agent Doug Casey of the RCMP was to play the part of John Hollis, a friend of Agent 2.

[29]   Agent 2 told Mr. Kelly he would organize the meeting and Mr. Kelly said he agreed to the meeting in an attempt to discover more information about this person named John. This additional information would be available from a visitor's report.

[30]   On August 17, 2000, Agent 2 was instructed to call Mr. Kelly at his home to make sure the meeting on August 19, 2000 was still "a go". Agent 2 left a message on Mr. Kelly's answering machine, and Mr. Kelly contacted Agent 2 by phone later that day (see Exhibit E-10), saying the house he had been interested in had been sold but there were others available and he would give Agent 2 the listings.

[31]   The next day Mr. Kelly gave Agent 2 a copy of a listing for a home he was interested in (Exhibit E-1). The meeting for August 19, 2000 with "John" was confirmed.

[32]   Mr. Casey testified he went to KP on August 19, 2000 as planned and signed in as John Hollis. He was met by the IPSO, Rick Rogers, and escorted to a boardroom next to Mr. Rogers' office. He waited there for the arrival of Agent 2 and Mr. Kelly.

[33]   Mr. Rogers contacted Mr. Kelly and advised him that Agent 2 had a visitor; consequently, Agent 2 would have to be escorted to the boardrooM. Mr. Kelly offered to do so, and he brought Agent 2 to the meeting.

[34]   Mr. Rogers asked Mr. Kelly to "monitor" the meeting, which meant he was to stay in an office across from the boardroom and maintain visual contact with the two individuals in the boardroom.

[35]   The meeting was both video and audio taped and a transcript of the audio portion was introduced upon consent (Exhibit E-3).

[36]   Mr. Kelly testified he was still trying to gather information on "John Hollis" so he went into the meeting room where Agent 2 and undercover agent Casey were.

[37]   In the meeting Agent 2 showed three pieces of paper containing the listing for two different houses that he had received from Mr. Kelly (Exhibit E-1). Both Messrs. Casey and Kelly testified there was a discussion about the loan being "dirty money", having been derived from the proceeds from selling cocaine. It would be loaned to Mr. Kelly at a 1% interest rate, which was even better than the interest rate correctional officer Perkins had quoted.

[38]   Mr. Casey said he told Mr. Kelly that some time would be needed to put the money together, as they were talking about loaning some $180,000, and in the interim Mr. Casey and Mr. Kelly would visit the houses listed for sale when Mr. Kelly's shift ended.

[39]   Mr. Kelly made arrangements to meet Mr. Casey at a local gas station later that day. The meeting ended and Mr. Kelly escorted Mr. Casey out of KP.

[40]   Upon leaving the Penitentiary Mr. Casey advised Sergeant McCann as to what was happening and surveillance was put on Mr. Casey to ensure his safety.

[41]   Shortly after noon on August 19, Mr. Kelly showed up at the gas station as planned and told Mr. Casey to follow him home in his vehicle as he wanted to change out of his uniform, and he would make arrangements for visiting the homes. The conversation between Messrs. Kelly and Casey was recorded and the transcript is found at Exhibit E–3, beginning on page 9. Mr. Casey confirmed the accuracy of the transcript. The transcript confirms Mr. Kelly told Mr. Casey he could follow him home.

[42]   At Mr. Kelly's residence, Mr. Casey waited in his vehicle while Mr. Kelly changed clothes. Then they proceeded, in Mr. Casey's vehicle, to view the houses on the listing. They arrived at the first house and were only able to view the outside, which they did. They proceeded to the second home and, again, were only able to view it from the outside. Mr. Kelly said he would arrange for a view inside.

[43]   Following this they drove back to Mr. Kelly's house, during which Mr. Casey said Mr. Kelly spoke of his son and they had a general conversation about his family.

[44]   Mr. Casey next spoke to Mr. Kelly on September 20, 2000 at which time Mr. Kelly said he had found the house he wanted to buy and suggested they view it. Mr. Casey said he would have the money together the following week, and they left it at that.

[45]   Sergeant McCann testified that he wanted Mr. Casey to stall for time, which he was doing. Ultimately, the police decided not to have Mr. Casey deliver any money to Mr. Kelly. On October 30, 2000 Agent 2 gave Sergeant McCann a house listing (Exhibit E–15) which he claimed he had received from Mr. Kelly.

[46]   In December 2000 Agent 2 was transferred out of KP, and any documents in his cell pertaining to "Project O Correct" were removed and retained. One such document was an "Agreement of Purchase and Sale" concerning Mr. Kelly's purchase of the home shown in Exhibit E-15. The purchase date was November 27, 2000 (Exhibit E-16). Mr. Kelly had secured financing elsewhere.

[47]   Mr. Kelly said he had to go through with his plan to feign interest in purchasing a house in order to obtain information on the other officers who allegedly had secured mortgages from Agent 2.

[48]   Mr. Kelly had heard in September or October 2000, from fellow correctional officer Dave Perkins, that the mortgages for Mr. Perkins and the other correctional officers were to be finalized in December 2000 or January 2001. The mortgages were going through a lawyer in Toronto, and Mr. Perkins gave Mr. Kelly the lawyer's name and phone number. The plan formulated by Mr. Kelly was to have his own lawyer get a subpoena and secure the names of the officers involved from the Toronto lawyer. However, in order to do this Mr. Kelly felt he had to actually purchase a home, which he did in November.

[49]   All of these plans came to an abrupt halt when, on or about January 1, 2001, Mr. Kelly heard that Mr. Perkins had committed suicide. There was a rumour at KP that it may have been murder rather than suicide. Mr. Kelly decided at that point not to say anything to anyone about the financing events out of fear for the safety of his family and himself.

[50]   On March 1, 2001, Sergeant McCann interviewed Mr. Kelly as part of "Project O Correct". The interview was taped and a transcript was introduced as Exhibit E–17. Sergeant McCann told Mr. Kelly that he might be charged with breach of trust contrary to the criminal code, as well as money laundering. During the course of the interview Mr. Kelly continually denied any and all involvement with Agent 2; as well, Mr. Kelly denied visiting property with the undercover agent.

[51]   The Warden at KP, Mr. Bourke, was made aware as early as July 2000 that Mr. Kelly was under investigation for attempting to secure a loan from an inmate, and he was also made aware an undercover agent was involved. In February 2001, the RCMP told Mr. Bourke they had evidence to show Mr. Kelly tried to secure a loan from an inmate.

[52]   In addition to information on Mr. Kelly, Mr. Bourke was given information on other alleged inappropriate actions of other correctional officers and he took time to review all of this information before deciding on what course of action he would take.

[53]   On March 1, 2001, Mr. Bourke suspended Mr. Kelly without pay, pending an investigation into the allegations (Exhibit E-21).

[54]   On March 6, 2001, Mr. Kelly was interviewed by Correctional Service Canada investigators concerning his role in the attempt to obtain financing of the property through an inmate. Accompanying Mr. Kelly at this interview was his lawyer, Mr. Mancini. Mr. Kelly again denied asking an offender for a loan or calling an offender on his cell phone. He also denied meeting an offender and his friend in a conference room at KP (see Exhibit E–22).

[55]   A disciplinary hearing was scheduled for March 16, 2001 and once again Mr. Mancini accompanied Mr. Kelly. Again, Mr. Kelly denied the allegations and said he had made a statement to the fact-finding investigation (Exhibit E-22) denying all knowledge of the allegations.

[56]   Mr. Bourke considered all of the information, including the grievor's career record of no discipline, five years of service, the seriousness of the allegations including the fact such action was contrary to the Code of Discipline (Exhibit E–18) and the Standards of Professional Conduct (Exhibit E-19) and determined that termination was the only course of action he could take. On March 20, 2001 Mr. Kelly was given his letter of termination (Exhibit E-23).

[57]   With the benefit of hindsight Mr. Kelly testified he would not do the same thing again. Instead, he would report the matter rather than try to get the information himself. He thought investigating the matter himself would enhance the possibilities of securing an IPSO job in the future, but now he recognizes there was some misjudgement on his part that should attract discipline, but not termination.

[58]   In cross-examination Mr. Kelly said getting a loan from an inmate is "very serious", and he also said he would not feel comfortable working with someone who had attempted to get a loan from an inmate because the officer would be "dirty". However, in his case, he was trying to gather information.

[59]   A character witness, Gary Sauvé, testified about his relationship with his brother-in-law Mr. Kelly. Mr. Sauvé is a police investigator with the RCMP and has known Mr. Kelly for about the past three years. He testified they meet about every two weeks for family gatherings, but he only learned about the termination of his brother-in-law's employment the week before this hearing. He said he has no reason to disbelieve Mr. Kelly.

[60]   Mr. Kelly did not tell his brother-in-law about his investigation while he was conducting it because he wanted to gather information and a threat had been made against his family.

Arguments

For the Employer

[61]   This is a grievance against the termination of the employment of a 39–year–old grievor with five years of service and a discipline-free record. The employer bears the burden to prove its allegations on the basis of clear, cogent and convincing evidence.

[62]   The grounds for termination relate to the inappropriate relationship Mr. Kelly had with an inmate. He requested a loan from the inmate in order to finance property. He met with the inmate and an undercover agent who posed as the inmate's friend and discussed the loan at a 1% interest rate. Mr. Kelly knew the action was money laundering.

[63]   In addition to these allegations, Mr. Kelly failed to seize the cell phone from Agent 2, which he should have done, knowing it was considered to be contraband.

[64]   This is an unusual case in that the grievor had previously denied all of these allegations at every opportunity, including on two different occasions when he was accompanied by legal counsel, Mr. Mancini. It was only at the adjudication hearing that the grievor admitted the allegations. The fact he lied at every opportunity supports the Warden's view that the bond of trust has been broken.

[65]   The grievor has advanced what is termed a "positive defence" and as such the grievor bears the onus of proving it (see Evidence and Procedure in Canadian Labour Arbitration, by Messrs. Gorsky et al., p. 9-25). However, here, the defence is so contradictory as to be fallacious.

[66]   On a preponderance of probabilities, the grievor's story simply cannot be believed. It is a courthouse conversion. On three different occasions, even with legal representation, the grievor did not come clean. He says he continued to fear Agent 2 but surely if the defence were true it would have been told prior to the adjudication hearing.

[67]   Mr. Kelly met the undercover agent believing he was a friend of Agent 2 and, inexplicably, took him back to his home. At that point in time supposedly Agent 2 had made his threat against Mr. Kelly and his family; yet he invited the friend back to his home while he changed out of his uniforM. If he truly feared him, would it be likely he would invite him to his home?

[68]   In the interview with Sergeant McCann, Mr Kelly was given numerous opportunities to state the truth; yet he continually lied to the police (see Exhibit E–17).

[69]   The fact he purchased a home in November illustrates the fact he did indeed want the property. He claimed he was information gathering, but this shows otherwise.

[70]   After Mr. Kelly told Agent 2 he would report him, Mr. Kelly said Agent 2 threatened hiM. Mr. Kelly then acted out of fear; however, he did not tell the other officers on duty that he had just been threatened. He did not tell the Warden or the IPSO because he feared they were "dirty". He did not go to the police because he did not know whom he could trust. He did not even tell his brother-in-law who was called as a character witness for hiM. All of this is highly improbable.

[71]   He was so afraid yet he took the associate back to his house! If he truly felt he and his family were in jeopardy he would have taken measures to deal with it.

[72]   Counsel referred to the following cases: Faryna v. Chorny [1952] 2 D.L.R. 354; Fauteux v. Treasury Board (Solicitor General Canada - Correctional Service) (Board file 166–2–26211); Francis v. Treasury Board (Solicitor General - Correctional Service Canada) (Board file 166–2–24111); Matthews v. Treasury Board (Revenue Canada - Customs & Excise) (Board file 166–2–20753).

For the Grievor

[73]   In this situation there was an attempt to do a covert criminal investigation and the employer has transferred it to a labour law dispute. This causes many problems. If the employer thinks an employee has engaged in criminal misconduct, the employer cannot prosecute hiM. Instead, the employer must relate the misconduct to the Code of Discipline.

[74]   The employer has the burden to show it has proven the allegations. The allegations here are of a criminal nature; consequently, the employer must also show the intent of the employee and link it to the wrong doing.

[75]   The employer decided to suspend and terminate Mr. Kelly's employment for his alleged involvement in money laundering (see Exhibit E-23). This is the same allegation Sergeant McCann made when he interviewed Mr. Kelly on March 1, 2001 which might lead to a criminal charge (see Exhibit E–17, page 2).

[76]   Warden Bourke testified the only evidence the employer had on which it could act was that gathered by "Project O Correct". Therefore, for the employer to prove its case, it has to prove intent. For a criminal case to succeed, intent must be proven. The allegations in this case are criminal in nature; therefore, intent must be shown here.

[77]   The key question is whether Mr. Kelly can be believed. If not, the decision will be necessarily short. However, the employer has to establish Mr. Kelly's state of mind, and any doubt should be resolved in favour of Mr. Kelly.

[78]   Few of the facts in this case are contradictory. What is ironic, however, is that Mr. Kelly testified he believed the threats from Agent 2 were real. The employer relied upon Agent 2 for accurate information, and acted upon it. Now, however, when Mr. Kelly states he believed Agent 2 the employer replies it does not make sense.

[79]   Mr. Kelly stated he was approached by Mr. Perkins about financing. The employer's case indicates Agent 2 said otherwise, and the employer believed Agent 2. There has been no testimony from Agent 2, so the employer is relying on hearsay.

[80]   The employer's conduct in this case must also be taken into account, particularly in terms of entrapment. The principles set out by the courts concerning guidelines to be followed for entrapment should be adhered to. In Mack v. The Queen ([1988] 2 S.C.R. page 903) the Supreme Court of Canada states at page 904:

The following factors may be considered in determining if the police have gone furtherthan providing an opportunity:

. . .

(9)  The existence of any threats, implied or express, made to the accused by the police or their agents.

[81]   Mr. Kelly testified he received threats from a police agent (Agent 2), and this has not been contradicted so it must be accepted as a proven fact.

[82]   There was no contradiction with respect to the events that took place at the meeting of August 19, 2000. The testimony of undercover officer Casey was correct.

[83]   It was the IPSO, Mr. Rogers, who made the decision that Mr. Kelly would escort Agent 2 from his holding cell to the meeting. On the facts it was clear that Mr. Rogers and Agent 2 had a special relationship; therefore, it was not unreasonable to conclude Mr. Rogers was part of the plot. When Mr. Kelly was told by Agent 2 that he had the IPSO in his back pocket, it made sense to Mr. Kelly.

[84]   With respect to the cell phone, no one reported the use of a cell phone by Agent 2; accordingly, this charge should be quashed on the basis of equity alone.

[85]   The deed of sale for the house Mr. Kelly actually purchased should attract no blame as Mr. Kelly was under the impression the whole thing would be rendered void because the money was "dirty". He was under the mistaken belief that, because the money was derived from the proceeds of crime, the deal would be cancelled.

[86]   The deeds of sale were supposed to go through in December or January and Mr. Kelly's plan was to have his lawyer secure these documents. It may not have been the best of plans, but this is not an issue here.

[87]   Mr. Kelly testified he was trying to investigate wrong doing. In doing so he received a threat, and knew it could be carried out. He was told by Agent 2 that the Warden, the IPSO and the police were in Agent 2's back pocket. Mr. Kelly could not report this to the police because he did not know who Agent 2 had on his side.

[88]   The next event was the death of Mr. Perkins. It was widely known that Mr. Perkins had a special relationship with Agent 2, and the rumour at KP was that Mr. Perkins was murdered. This was probably Mr. Kelly's highest point of fear.

[89]   The burden of proof the employer must bear is intrinsically linked to intent. Mr. Kelly had no intent of a criminal nature.

[90]   Mr. Bourke agreed that prior to the spring of 2000, there was no hint of suspicion against Mr. Kelly. His record was clear; no discipline had ever been levied against him prior to this incident and no criminal charges have been made against him.

[91]   If some discipline is warranted the mitigating factors should be taken into account to reduce the penalty.

[92]   Counsel submitted the following material for consideration: Canadian Criminal Law, Carswell Editions, 4^th edition; Mack v. The Queen (supra); Labour Arbitration Yearbook: Kaplan, Jack and Gunderson; Leadbetter v. Treasury Board (Solicitor General Canada - Correctional Service) (Board file 166-2-28705)

Reply

[93]   The standard to be met here is on the basis of clear and cogent evidence. There is no requirement to prove intent. It is up to the grievor to prove his positive defence.

[94]   There was no entrapment of Mr. Kelly. In fact, Mr. Kelly tried to entrap others. Mr. Kelly said he received his information from Mr. Perkins and went to Agent 2 on his own. Mr. Perkins was not acting for the employer. In any event, this case is about a correctional officer attempting to negotiate a loan at 1% and laundering money.

[95]   The fact no criminal charges were ever laid is not relevant.

Reasons for Decision

[96]   Mr. Kelly's employment has been terminated for reasons explained in the letter to him dated March 20, 2001 and cited at the introduction to this written decision (Exhibit E–23).

[97]   The burden rests with the employer to prove these allegations, on the basis of clear, cogent and convincing evidence. Up to the adjudication hearing, Mr. Kelly repeatedly denied these allegations including, on more than one occasion, when he was accompanied by Mr. Mancini, his legal counsel.

[98]   At the adjudication hearing, Mr. Kelly changed his story and admitted the basic facts as alleged by the employer. In doing so, in my view this satisfies the burden that the employer has in proving the allegations. We heard from the undercover agent, Mr. Casey, that a meeting between Agent 2, Mr. Kelly and Mr. Casey took place on August 19, 2000, during which time a discussion relating to the issue of financing a loan to Mr. Kelly at 1% interest rate, and money laundering, took place. Mr. Kelly admitted this was discussed. The only question, in my mind, that needs to be resolved is do I believe Mr. Kelly's version as to why this took place.

[99]   As counsel for the employer has pointed out, correctly I believe, Mr. Kelly has now advanced what is termed a "positive defence". As the authors state in their text Evidence and Procedure in Canadian Labour Arbitration (supra) at page 925:

The party asserting a positive defence has the onus to prove that defence.

[100]   The mere fact the grievor had denied the employer's allegations up to the time of the hearing, then advanced his "positive defence" is not, I believe, reason in and of itself to reject this defence. Rather, I must look at the grievor's claim and determine its veracity on a balance of probabilities in light of all the evidence adduced before me.

[101]   One of the leading cases on issues of credibility is the decision of the British Columbia Court of Appeal in Faryna v. Chorny, (supra). At page 357 of his decision, Justice O'Halloran states:

In short, the real test of the truth of the story of a witness in such a case must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions.

[102]   Mr. Kelly stated that he received information from fellow officer Dave Perkins that Agent 2 was making loans to other correctional officers. During his evidence-in-chief Mr. Kelly stated he would not want to work with an officer who was taking a loan from an offender because that officer would be "dirty". Mr. Kelly clearly recognizes the wrong doing of such action and it was his concern regarding this wrong doing which he says prompted him to operate what can best be described as a one-man sting operation. He was going to root out the wrong doing of some fellow correctional officers.

[103]   How did he go about doing this? He says he confronted Agent 2 towards the end of July 2000 and asked him who the other correctional officers were who were involved in the mortgage financing. Mr. Kelly said Agent 2 evaded the question, so Mr. Kelly told Agent 2 he would report it. This caused Agent 2 to swear at Mr. Kelly and issue threats towards his wife and son. At that point, Mr. Kelly claims he became fearful.

[104]   Why did Mr. Kelly simply not leave the area and report the fact Agent 2 was financing mortgages to other correctional officers? He tried to get the officers names but was not successful. Instead, he told Agent 2 he was going to report him.

[105]   Mr. Kelly said he became particularly fearful when Agent 2 mentioned the name of the city where Mr. Kelly's young son lived. Then, when Agent 2 added he had the Warden, IPSO and police in his back pocket, Mr. Kelly stated he did not know what to do. After pondering it for a few days, Mr. Kelly decided to carry out his own undercover operation. When Agent 2 called Mr. Kelly at home asking him to meet someone he called his "right hand man", Mr. Kelly agreed.

[106]   Mr. Kelly testified he was fearful. He feared for the safety of his family, but did not go to the police because Agent 2 said he had the police in his back pocket. However, what I find to be beyond belief is that he would not tell his brother-in-law about these threats. His brother-in-law, Mr. Sauvé, gave character evidence on Mr. Kelly's behalf. Mr. Sauvé was a 17-year veteran of the RCMP and had known Mr. Kelly for the past three years, which puts it well before the issuance of the threats from Agent 2.

[107]   If Mr. Kelly was fearful for his family and did not know who to go to in the local police force, surely there could be no question that Mr. Sauvé could have been confided in. Mr. Sauvé testified that he would meet with Mr. Kelly about every two weeks, at family gatherings. There were plenty of occasions when Mr. Kelly could have pulled Mr. Sauvé aside and confided in hiM. He did not.

[108]   Then there was the meeting on August 19, 2000 inside KP with the undercover agent, Mr. Kelly and Agent 2. Mr. Kelly said he wanted to gather information on this right hand man of Agent 2 because any threats of harm issued by Agent 2 would have to be organized or carried out by someone on the outside. So Mr. Kelly testified that he decided to gather information on someone who could do harm to his family.

[109]   After the meeting concluded, Mr. Kelly agreed to meet Mr. Casey (the undercover agent) at the local gas station. Unbeknownst to Mr. Kelly, the conversation in Mr. Casey's vehicle was taped. The transcript shows it was Mr. Kelly who suggested Mr. Casey follow him home (Exhibit E-3, page 9).

[110]   Mr. Kelly was inviting someone whom he believed was Agent 2's right hand man, the person who might do harm to his family, back to his home. Counsel for the employer says this is hard to believe, and I find I must concur.

[111]   However, it does not end there. While driving around together looking at homes, Mr. Kelly talked about the garage his father owns (Exhibit E–3, page 33). Then, when Mr Casey asked where his father lives, Mr. Kelly replied "between Belleville and Tweed" (Exhibit E–3, page 44). For someone who is fearful for his family's safety it seems more than passing strange that Mr. Kelly would reveal this.

[112]   What is even more bizarre, I find, is Mr. Kelly's discussion of his six-year old son (Exhibit E–3, pages 33 and 34). Mr. Kelly testified that he was fearful when Agent 2 stated the city his son was in, which was not Mr. Kelly's place of residence; yet here he is discussing his six-year old son with someone he believed to be Agent 2's right hand man. I agree with counsel for the employer that it hardly seems likely an individual, fearful for his six-year old son's personal safety, would enter into a somewhat lengthy discussion about him with the person who might cause the havoc.

[113]   Next, Mr. Kelly was interviewed by Sergeant McCann. In the 71 pages of transcript from that interview (Exhibit E-17), Mr. Kelly never mentioned his own undercover operation. One would think when the police said that Mr. Kelly may be charged with breach of trust "contrary to section 122 of the criminal code as well as money laundering contrary to section 462.31 of the criminal code" (page 2) that would be a good time to relate the story. Instead, Mr. Kelly denied any involvement. Obviously as a peace officer Mr. Kelly would be well aware of the extremely serious nature of the allegations; yet he does not admit doing anything.

[114]   Faced with a suspension from Warden Bourke, Mr. Kelly continued to deny wrong doing. The same occurred with the fact-finding investigation, where Mr. Kelly's own written statement (Exhibit E-22) says "I never asked an offender for a loan to purchase a home". When faced with losing one's job, knowingly lying about the circumstances is foolhardy, to say the least.

[115]   Why continually lie about the events? Mr. Kelly said he was too fearful to relate his story, but that does not explain why he felt he needed to lie. Why not simply state he could not reveal why he undertook his actions? Why not stay silent? Why lie? In my view there was no credible reason offered as to why Mr. Kelly denied all involvement in the financing scheme.

[116]   The issue of not reporting the use of a cell phone is also alleged by the employer. The evidence (Exhibit E-10) indicated Mr. Kelly called Agent 2 on August 17, 2000 on the cell phone Agent 2 had been provided with. Counsel for the grievor said this allegation should be dismissed on the basis of equity, as no one else reported the use of a cell phone by Agent 2. I was not made aware of any situation where another officer called Agent 2 on his cell phone and therefore these circumstances are unique. Mr. Kelly should have reported this, and he did not. The employer's allegation has been proven, in my view.

[117]   When one examines the entire facts of this case it simply strains credibility to believe Mr. Kelly. The employer has discharged its burden of proof insofar as the allegation of requesting a loan from an inmate is concerned, as well as meeting with a friend of the inmate to discuss details of the financing arrangements which would involve participating in money laundering. This clearly constitutes an inappropriate relationship for a correctional officer to have with an inmate. The grievor has failed to meet his burden of proof in advancing his positive defence, as far as I am concerned.

[118]   The grievor's counsel stated that because the allegations are criminal in nature, the intent of the grievor must be proven. I do not agree that in a labour relations hearing, proof must be on parwith that of a criminal court; however, in this case I believe the evidence indicates the grievor intended to secure a personal loan from Agent 2, and Mr. Kelly has admitted knowing this action would involve money laundering.

[119]   Counsel for the grievor also stated that Mr. Kelly was entrapped by Agent 2, and this should be considered in my deliberations. Mr. Kelly's own evidence was that he was approached by Mr. Perkins, so I do not believe the defence of entrapment has been proven, even if I were to believe this aspect of Mr. Kelly's testimony.

[120]   Was termination of the grievor's employment justified in the circumstances? What was telling here in my view was Mr. Kelly's own testimony that he could not work with a correctional officer who was trying to secure a loan from an offender because the officer would be "dirty". Given Mr. Kelly's relatively limited seniority, I find, in spite of a discipline-free record, the termination of his employment is warranted in this case. His misconduct was serious and, indeed, incompatible with his duties as a correctional officer. I am satisfied that the bond of trust between the grievor and his employer has been irreparably broken.

[121]   For all of the above reasons, the grievances are hereby denied.

Joseph W. Potter,
Vice-Chairperson

OTTAWA, August 15, 2002.