FPSLREB Decisions

Heard at Montreal, Quebec,
April 17 and 18, November 7 to 9 and 27 to 30, and December 12 and 13, 2012,
July 3 to 5, 16, and 17 and September 10 to 13, 2013,
and February 25 and 26, 2014.
(PSLREB Translation)

REASONS FOR DECISION

I. Individual grievances referred to adjudication

1        On July 28, 2010, Nick Iammarrone (“the grievor”) referred two grievances to adjudication under paragraph 209(1)(b) of the Public Service Labour Relations Act (S.C. 2003, c. 22, s. 2; PSLRA) against his employer, the Canada Revenue Agency (“the Agency”).

2        In the first grievance, the grievor challenged his suspension without pay pending an investigation on April 7, 2009 (PSLRB File No. 566-34-4182).

3        In the second grievance, the grievor challenged his termination on November 10, 2009 (PSLRB File No. 566-34-4181).That grievance initially raised discrimination issues against the Agency.However, he withdrew them at the beginning of the hearing, and therefore, they are not analyzed in this decision.

4        At the hearing, the Agency reiterated its preliminary objection that I did not have jurisdiction to hear the suspension pending an investigation grievance because essentially that suspension was administrative in nature, not disciplinary. The grievor indicated that not only did I have jurisdiction to hear the suspension grievance due to its disciplinary nature but also that that issue had to be resolved separately from the termination grievance, regardless of the outcome of that grievance.

5        I decided that this decision would deal with both the suspension pending an investigation grievance and the termination grievance.

6        On November 1, 2014, the Public Service Labour Relations and Employment Board Act (S.C. 2013, c. 40, s. 365) was proclaimed into force (SI/2014-84), creating the Public Service Labour Relations and Employment Board (“the new Board”) to replace the former Public Service Labour Relations Board (“the former Board”) as well as the former Public Service Staffing Tribunal. On the same day, the consequential and transitional amendments contained in sections 366 to 466 of the Economic Action Plan 2013 Act, No. 2 (S.C. 2013, c. 40) also came into force (SI/2014-84). Pursuant to section 396 of the Economic Action Plan 2013 Act, No. 2, an adjudicator seized of a grievance before November 1, 2014, continues to exercise the powers set out in the PSLRA as that Act read immediately before that day.

II. Summary of the evidence

7        During this case’s 21 hearing days, the parties presented a vast amount of documentary and testimonial evidence and submitted 78 supporting documents, with attachments.

8        The Agency, which bore the burden of proof, called the following to testify: Patrice Chouinard, André Faribault, Scott Graham, Kirby Joseph, Serge Kutukian, and Pierre Léveillé.

9        The grievor called the following to testify: Richard Cossette, Joseph Oliverio, Romano Fratarcangelli, Mohammed Ataya, Suzanne Pelletier, and himself.

10        Given the position the grievor held, some evidence that the parties presented at the hearing contained personal and confidential information about Canadian taxpayers that are not parties to the dispute.

11        The legal obligation to protect the confidentiality and integrity of taxpayer information arises from the Income Tax Act (R.S.C. 1985, c. 1 (5th supp.)). Under that Act, an employee may disclose confidential taxpayer information to the taxpayer but may not disclose it to a third party without the taxpayer’s written consent, except as that Act permits. Subsections 241(1) and (4.1) of that Act read as follows:

241 (1) Except as authorized by this section, no official or other representative of a government entity shall

(a) knowingly provide, or knowingly allow to be provided, to any person any taxpayer information;

(b) knowingly allow any person to have access to any taxpayer information; or

(c) knowingly use any taxpayer information otherwise than in the course of the administration or enforcement of this Act, the Canada Pension Plan, the Unemployment Insurance Act or the Employment Insurance Act or for the purpose for which it was provided under this section.

…

(4.1) The person who presides at a legal proceeding relating to the supervision, evaluation or discipline of an authorized person may order such measures as are necessary to ensure that taxpayer information is not used or provided to any person for any purpose not relating to that proceeding, including

(a) holding a hearing in camera;

(b) banning the publication of the information;

(c) concealing the identity of the taxpayer to whom the information relates; and

(d) sealing the records of the proceeding.

…

12        The parties jointly asked that I not disclose information protected under that Act and that I speak about the different situations described in the evidence without revealing taxpayers’ names or other personal information.Similarly, the parties asked that certain taxpayer information evidence be sealed.

13        To determine the merits of the request, I reviewed the parameters that have become known as the “Dagenais/Mentuck” test.The hearings of quasi-judicial tribunals are usually public, and so are the documents on file, including exhibits that the parties adduced.However, under certain circumstances, the tribunal may impose access restrictions on exhibits adduced as evidence if it is determined that the need to protect another important right must take precedence over the open court principle.The Supreme Court of Canada reformulated the Dagenais/Mentuck test in Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41. At paragraph 53, the Court stated that a confidentiality order under Rule 151 of the Federal Courts Rules, (SOR/98-106), can be issued only if the following are met:

…

(a) such an order is necessary in order to prevent a serious risk to an important interest, including a commercial interest, in the context of litigation because reasonably alternative measures will not prevent the risk; and

(b) the salutary effects of the confidentiality order, including the effects on the right of civil litigants to a fair trial, outweigh its deleterious effects, including the effects on the right to free expression, which in this context includes the public interest in open and accessible court proceedings.

14        A few years later, the Court ruled that the Dagenais/Mentuck test applied to all discretionary decisions that limit the right to information during judicial proceedings (see Vancouver Sun (Re), 2004 SCC 43). Recently, at paragraph 13 of Canadian Broadcasting Corp. v. The Queen, 2011 SCC 3, the Court confirmed that “[t]he analytical approach developed in Dagenais and Mentuck applies to all discretionary decisions that affect the openness of proceedings.”It must be noted that I heard no arguments in support of the public interest in the transparency of the proceedings in this case.

15        It is apparent that some evidence in this case contains personal and confidential information gathered as part of the taxpayer’s obligation to file tax returns under the Income Tax Act since taxpayers are required to disclose that information.I agree that protecting information that could identify taxpayers is an important interest for Canadian society: maintaining the public trust in the integrity of Canada’s tax system and ensuring tax compliance on behalf of governments across Canada, to contribute to Canadians’ economic and social well-being.I also agree that in the context of the hearing in this case, public access to information that identifies taxpayers could seriously compromise that interest and that a sealing order is necessary to prevent that risk.

16        Although it is clear that some evidence containing information identifying Canadian taxpayers is essential to rendering a decision on the merits of this case, my opinion is that the salutary effects of an order to seal that information outweigh the deleterious effects to open and accessible quasi-judicial proceedings. In the circumstances, I feel that it is more important to protect the information in question than the public right to access it.Consequently, the following evidence containing personal and confidential information about Canadian taxpayers who are not parties to this dispute and that identifies them is sealed. Therefore, Exhibits E-7, E-8, E-15, E-25, E-26, E-37, E-38, E-39, E-40, E-41, E-42, E-52, E-53, E-54, E-55, E-56, E-57, E-59, F-3, and F-5 are sealed.I informed the parties at the hearing that their request was accepted.

A. The Agency’s evidence

1. Mr. Chouinard

17        At the time of his testimony, Mr. Chouinard was retired. Before that, he had a long career in the federal public service. During the period in question, from April 2008 to March 2012, he held a position with the Agency as the director of the Montreal Tax Services Office (“the TSO”). He had replaced Carole Gouin in that position. Six assistant directors reported to Mr. Chouinard while he was in that position.

18        Mr. Chouinard briefly described the Montreal TSO’s mandate, which consists essentially of administering tax programs in six divisions: audit, enforcement, revenue collection and client services, appeals, scientific research and experimental development, and the Quebec Regional Call Centre.

19        Mr. Chouinard briefly described the main activities of an AU-03 auditor position, which the grievor held during the period in question. He referred me to the job description for that position (Exhibit E-4). Essentially, the grievor’s duties consisted of auditing corporate tax returns, individually or as part of a team, to ensure compliance with the provisions of the Income Tax Act, the Excise Tax Act (R.S.C. 1985, c. E-15), and other legislation that the Agency enforces.

20        Mr. Chouinard testified that the grievor worked on a small- and medium-enterprise (SME) audit team and that he reported to his team leader, Mr. Fratarcangelli, who in turn reported to the manager responsible for that team, Mr. Oliverio. Thus, the grievor was called on to audit income tax returns of companies with sales figures ranging from $15 to $400 million per year, as well as those of their shareholders. Mr. Chouinard also confirmed that the grievor worked for a time in the training subdivision in a position that consisted of providing technical support to new Agency employees.

21        On his arrival at the Montreal TSO in April 2008, Mr. Chouinard was advised that an internal investigation had already begun into some of the grievor’s acts and that the grievor had been on sick leave since late December 2007.

22        Mr. Chouinard then inquired about the incidents that led to that internal investigation. He learned of the following facts:

a.   A police operation conducted by the Royal Canadian Mounted Police (RCMP) in November 2006, known as “Project Colisée”, targeted certain activities of the Mafia and organized crime in the Montreal area.

b.   After that police operation, his predecessor, Ms. Gouin, asked that an audit trail be conducted to identify Agency employees who had accessed the tax information of the taxpayers that Project Colisée had targeted.

c.   A list of Agency employees who had accessed the files of those taxpayers was prepared, and the grievor’s name was on that list.

d.   Ms. Gouin then requested an internal investigation to shed light on why the grievor had accessed those taxpayer’s files.

23        Later, in April 2007, those events led to an audit of the grievor’s accesses to the Agency’s computer systems between 2003 and 2008 to verify whether they had been part of his workload. According to Mr. Chouinard, the Agency’s policies clearly state that auditors can access only the files of taxpayers assigned to them to fulfil audit purposes or to validate information about a taxpayer linked to the one being audited. Thus, accessing the Agency’s system must be linked to a file that was assigned to the auditor and that is part of his or her workload.

24        Mr. Chouinard testified that the initial mandate of the investigation targeting the grievor was expanded in May 2008 after information was obtained under a search warrant granted to the RCMP about the business files of a taxpayer, which I will refer to as “Corporation X” throughout this decision because identifying it would not be relevant or necessary to support the reasons for my decision. After a request was made to locate electronic files in 2007, Corporation X’s tax files were found in the grievor’s work filing cabinet, without valid justification from him, according to Mr. Chouinard.The files were still in his possession at the time of the search.Consequently, Mr. Chouinard expanded the mandate of the investigation targeting the grievor to verify any ties between Corporation X and the grievor and to find out why those files, which were not part of his workload during the period in question, were still in his filing cabinet.

25        The grievor audited Corporation X for the 2002-2003 fiscal year. He completed his audit in February 2005. According to Mr. Chouinard, it was contrary to Agency practices and directives to keep a taxpayer’s physical files in his filing cabinet or work area two years after completing an audit, which raised several concerns.

26        Mr. Chouinard also mentioned that a file entitled “Nick”, containing a telephone number that corresponded to the grievor, was found in Corporation X’s business files. That file was about Corporation X delivering and installing granite kitchen counters to the grievor’s personal residence in October 2005. Mr. Chouinard asked that the mandate of the investigation into the grievor be expanded to include that element.

27        The grievor returned to work on March 23, 2009, after a sick leave of nearly 15 months. Based on the information the investigator from the Agency’s Internal Affairs Section provided to him about certain facts gathered during the internal investigation, Mr. Chouinard suspended the grievor without pay for an indeterminate period as of April 7, 2009. The suspension letter stated the following:

[Translation]

…

Certain information that has been brought to our attention leads us to believe that you might have breached the [Agency’s] code of ethics and conduct. Consequently, management has requested an internal investigation.

As an auditor, and as indicated in the code of ethics and conduct, you are expected to act with integrity when carrying out your work. Given your duties and the link between them and the circumstances of this investigation, I decided to suspend you for an indeterminate period. The suspension without pay will begin today and will remain in effect until I receive the full internal investigation report.

If any other offences come to light during the investigation, they will be handled accordingly. During your indeterminate suspension, you will not be authorized to access the employer’s premises unless I call you in.

You will be informed of the investigation’s results no later than June 30, 2009, at which time you will have an opportunity to meet with the employer and provide your comments.

…

28        Mr. Chouinard acknowledged that it was an extended absence for the grievor, that he had still not interviewed him with respect to the facts raised during the internal investigation, and that certain relevant information still needed validating. Still, he preferred to suspend the grievor pending the results of the internal investigation, to protect Agency assets and personal and confidential taxpayer information and to maintain the public trust.According to him, it would have been difficult or even impossible to assign the grievor to duties that did not require accessing personal and confidential taxpayer files or information.Although he did not feel that he could impose a disciplinary measure against the grievor at that time, his opinion was that an administrative suspension was warranted.

29        On July 2, 2009, having yet to receive the investigation report, Mr. Chouinard advised the grievor that he was extending the suspension without pay to September 8, 2009.

30        Mr. Chouinard testified that the final investigation report (Exhibit E-7) by Mr. Léveillé of the Agency’s Internal Affairs Section was submitted to Monique Leclair, the assistant commissioner for the Quebec Region at that time, on July 17, 2009. He then gave a copy of that 34-page detailed report to the grievor and his bargaining agent representative. That report drew the following three conclusions:

[Translation]

…

The information obtained during this investigation revealed that Nick Iammarrone, auditor, Small and Medium Enterprises, Montreal TSO, made unauthorized accesses to the tax information of thousands of taxpayers, including of … , [Corporation X], his tenants … and … , his neighbours, … and … , his spouse, … and people close to him, in breach of the [Agency’s] Code of Ethics and Conduct.

And the information obtained during this investigation revealed that Nick Iammarrone placed himself in a conflict of interest when he hired [Corporation X] to install a kitchen counter at his home a few months after completing the audit, while he had the file in his possession, which was a breach of the [Agency’s] Conflict of Interest Code and Guidelines. It must be noted that Nick Iammarrone chose to not provide proof of payment for that work and that the sale does not appear in [Corporation X’s] books.

The information obtained in this investigation also reveals that Nick Iammarrone had 99 unacceptable files on his hard drives, including 58 pornographic images, 28 unauthorized programs, including several used to generate lottery numbers, and four unacceptable emails, in breach of the Agency’s Electronic Networks’ Usage Policy.

…

31        After reviewing the investigation report (Exhibit E-7), Mr. Chouinard met with the grievor twice, on September 11, 2009, and October 5, 2009, to gather his comments. Those meetings took place at the offices of the grievor’s bargaining agent and in the presence of a union representative. No evidence was submitted to me as to the reasons for the delay between receiving the investigation report on July 17, 2009, and the first meeting with the grievor, on September 11, 2009.

32        Mr. Chouinard stated that he was not satisfied with the grievor’s comments at those meetings. He went ahead with terminating the grievor on November 10, 2009. The grounds he provided in the termination letter included the following:

…

• Subsequent to your tax audit of [Company X] in October 2005, that company delivered a kitchen counter valued at approximately $3,500 to your home. You were unable to submit an invoice, a statement of account, proof of payment or even proof of bank withdrawal to demonstrate payment for the goods that you claim to have paid for in cash. Nor was there any record of a corresponding invoice or payment in the records of [Company X].

Under the circumstances, I conclude that you placed yourself in a serious conflict of interest. This contravention of the ethics rules constitutes a major offence that is clearly inconsistent with the Conflict of Interest Code and Guidelines of the Canada Revenue Agency.

• · A review of your audit of [Company X], which I requested from an expert auditor, clearly demonstrated that you were indolent and lax in your review. Your explanations that you performed the audit to the best of your ability with a view to protecting the Agency’s interests do not seem well-founded or credible.

• You used the Agency’s computer systems to access tax information regarding several taxpayers when such access was not required for your work. You provided me with credible explanations regarding some accesses that have not been explained in the internal investigation report. However, no legitimate reason was given for many other consultations using the Agency computer systems. Also noted were several dozen instances of accessing tax information regarding individuals manifestly linked to organized crime. You also accessed tax information regarding personal acquaintances. I therefore conclude that you committed gross misconduct by accessing tax information regarding a large number of taxpayers without valid reason.
• You used the Agency’s equipment and electronic network to download and use more than twenty (20) software packages intended primarily for personal use. You also saved and distributed pornographic images using an Agency computer. An analysis of documents saved to the computer’s hard drive identified 58 pornographic images. The Agency’s policy in this regard is clear and you were aware of it. You clearly made unacceptable use of the Agency’s equipment and computer network.
• You vandalized a senior manager’s vehicle parked in indoor parking at a CRA building. At the disciplinary hearing, you acknowledged this and explained that it was an act of frustration regarding a personal situation and that you did not know that the vehicle was owned by a manager with the Agency. Regardless of the circumstances surrounding these actions, they constituted illegal and unacceptable behaviour.

…

[The crossed-out allegations were dropped at the hearing.]

33        At the start of the hearing, the Agency indicated that it would no longer use two parts of that letter and that it wished to withdraw the following passages: (1), “Also noted were several dozen instances of accessing tax information regarding individuals manifestly linked to organized crime”, and (2), “and distributed”.

34        When questioned about his dissatisfaction with the grievor’s comments during the two meetings with him, Mr. Chouinard provided some clarification.

35        As for the granite kitchen counters issue, Mr. Chouinard stated that the grievor did not deny that Corporation X delivered them to and installed them in his personal residence approximately six months after he completed auditing the company. He also did not deny that the counters were valued at $3600. When Mr. Chouinard asked him to provide proof of payment for the counters, the grievor replied that he did not have the invoice and that he had paid in cash using the money his children had received as Christmas gifts. He added that he kept that money at his family home and that he gave the sum to Corporation X’s accountant without obtaining any proof of payment in return. In cross-examination, Mr. Chouinard remembered that the grievor had mentioned that the cash used to pay for the counters might also have been from lottery winnings. The grievor also told him that he decided to do business with Corporation X because that taxpayer’s principal shareholder was the cousin of an Agency employee, and thus, he thought he could obtain a better price for the counters.

36        Mr. Chouinard stated that he was simply not satisfied with those explanations. According to him, it was inconceivable for the grievor, who was an experienced Agency auditor, to not be able to provide an invoice or proof of payment for the alleged purchase of the kitchen counters that, after all, were from a taxpayer for which he had just recently completed a tax audit. He added that the tax files of the taxpayer in question were still physically in the grievor’s work area and that he had recently accessed them electronically several times. And Corporation X’s accounting books did not contain any mention of a sale, invoice, or payment about delivering and installing the kitchen counters.

37        According to Mr. Chouinard, that type of behaviour raised two types of breaches of the Agency’s Code of Ethics and Conduct (Exhibit E-13). First, it contravened the gifts, hospitality, and other benefits provisions (Exhibit E-13). Second, it contravened the Code’s conflict-of-interest provisions (Exhibit E-13). The provisions in question read as follows:

[Translation]

…

(d) Gifts, Hospitality, and Other Benefits

It is your responsibility to decline any gift, hospitality, or other benefit offered to you that could influence your judgement or call into question your integrity or that of [the Agency].

To follow current public and commercial practices, you can accept incidental gifts, such as mugs or pens (less than $25), hospitality related to [the Agency’s] activities that is consistent with the rules (less than $50), and other benefits of a modest value, such as a speaker’s fee or gifts of thanks from foreign visitors (less than $50), on condition that they meet all the following criteria:

· it is not a prohibited personal gift (e.g., cash or equivalent, tickets to major sporting or entertainment events, alcohol, cigarettes or related merchandise, the solicitation of gifts for personal benefit for an organizational activity, such as a sports tournament (unless it is a charitable activity authorized by [the Agency]), or anything else prohibited by Canadian law; an employee may not confer a direct benefit or favour on the person or organization (or is perceived as not being able to) or influence a desired decision by the person giving the gift (or is perceived as not being able to); an independent third party concludes that the employee acted in an objective and impartial manner; and if all those criteria are met, that the value of the gift or hospitality corresponds to the situation and complies with the standards of prudence in the public service. Note: It is a serious issue if you accept a gift, hospitality, or other benefit that does not meet the criteria, including the maximum monetary value. If you accept it, you must immediately report it to your manager in writing. Your manager will inform the delegated manager, who will provide an opinion on what to do. All such cases will be reported to the director, labour relations, Human Resources branch.

See your manager if you are offered a gift or benefits (hospitality or other) or if you expect such an offer.

…

(i)  Conflict of interest

As an employee, you are in a conflict of interest every time personal interests or ties or external assets hinder your ability to make decisions with integrity and honesty in the best interests of [the Agency] and the public service. Thus, you must behave in a manner that will not harm or potentially harm [the Agency].

You must avoid situations that could lead to a real, potential, or perceived conflict of interest, as that is one of your conditions of employment. You must not use your position to influence [Agency] procedures or bypass them for your personal benefit or that of your family, friends, colleagues, or any other person. For example, you must not accept offers or attempts to offer personal benefits by clients or other public servants. Similarly, members of a board of selection should not be closely related to any of the candidates or have any other ties that could hinder their ability to provide an impartial evaluation.

…

[Emphasis in the original]

38        Mr. Chouinard also referred to the objectives of the Agency’s Gifts, Hospitality, and Other Benefits Policy (Exhibit E-14), which read as follows:

Objectives

• Preserve the integrity of [the Agency] by ensuring that practices concerning the acceptance, treatment or refusal of gifts, hospitality and other benefits by employees of the [the Agency] are and are seen to be above any suspicion.
• Ensure that the objectivity and impartiality of employees are not compromised or legitimately questioned.
• Respect the integrity of partnerships with businesses, professional associations, other levels of government, Canadians in general, and organizations in other countries.

39        Mr. Chouinard’s second reason was about the audit the grievor conducted, which Mr. Chouinard qualified as careless and lax. In that sense, Mr. Chouinard stated that he asked Mr. Joseph, an auditor whom he considered specialized, to review the grievor’s audit of Corporation X. In his report, Mr. Joseph indicated that a lack of certain normal audit procedures, such as a detailed audit plan and comments on potential adjustments deemed immaterial, led him to conclude that the grievor had been rather careless in carrying out his duties. Mr. Chouinard fully approved that conclusion, even after seeking explanations and comments from the grievor. According to Mr. Chouinard, the Corporation X audit contained significant gaps, particularly the lack of an audit plan, a lack of a validation of the taxpayer’s revenues, and accepting the shareholders’ revenues and expenses statement that the corporation’s accountant had prepared and signed, which is not expected from an experienced auditor at the AU-03 level. In cross-examination, Mr. Chouinard acknowledged that he did not feel the need to validate Mr. Joseph’s conclusions with a team leader or supervisor at the Montreal TSO and that he preferred to rely on the content and conclusions in Mr. Joseph’s report.

40        The third reason Mr. Chouinard cited was unauthorized access. According to him, the grievor allegedly told him that his team leader sometimes asked him to search for files that should have potentially been audited using the Agency’s Audit Report Generator On Line (ARGO). Although Mr. Chouinard was willing to accept that explanation for a certain number of accesses, it could not apply to a large number. Consequently, the grievor could not provide a credible explanation for his many accesses, such as when he accessed Corporation X’s files more than 40 times between February 2005 and June 2007, when he had already completed its audit and was doing business with it. In cross-examination, Mr. Chouinard acknowledged that although an auditor must sometimes expand an audit’s parameters by accessing tax files or additional tax information to validate certain information, he stated that such accesses should be documented and justified, either on working papers or in a work plan, to establish a link between the access and the workload. Otherwise, the access is not justified.

41        Mr. Chouinard stated that he was equally unsatisfied with the grievor’s explanations about the need to access his own tax file in addition to those of his tenants, his spouse, and his neighbours. The curiosity to know more about those individuals, as the grievor put forward, did not justify such a breach, according to him. And an Agency policy prohibits employees from accessing their personal tax information and that of their family members.

42        The fourth reason Mr. Chouinard cited in the termination letter was the grievor downloading unauthorized software and pornographic images onto his laptop and H drive. Mr. Chouinard referred to information revealed in Mr. Léveillé’s investigation report (Exhibit E-7) and indicated that the grievor never denied those downloads but that he tried to minimize the seriousness of his actions by alleging that they had happened several years before they were discovered and that the software and images were no longer used or viewed.

43        Mr. Chouinard referred me to some examples of incorrect use listed in the Monitoring of the Electronic Networks’ Usage Directive (Exhibit E-20), specifically the following:

[Translation]

…

Examples of incorrect usage

Here are examples of actions considered violations of this policy, which may result in disciplinary measures, in accordance with the discipline policy and guidelines. This is not a comprehensive list.

Examples of the unacceptable use of the Agency’s electronic network include, among other things, activities aimed at obtaining, storing, transmitting, or participating in the following:

a. Chain letters, pyramid schemes, offensive material or material depicting pornography, nudity, profane language, violence, or sexual content.

…

Examples of unacceptable activities related to the Agency’s electronic network that could result in storage burdens or congestion, compromise security, or contravene another policy include, among other things, the following:

…

f.   Installing, storing, using, modifying, or transmitting games, unauthorized software, script files, or batch files.

…

44        According to him, only software that the Agency provides and installs on its employees’ computers or laptops is authorized. Software designed to generate lottery combinations is certainly not authorized. On that point, Mr. Chouinard also referred me to the Monitoring of the Electronic Networks’ Usage Policy (Exhibit E-21), the Electronic Network Policy Guidelines (Exhibit E-22), and the Agency’s Code of Ethics and Conduct (Exhibit E-13) in support of his position that in no way does the Agency authorize such conduct.

45        The fifth reason Mr. Chouinard cited was vandalizing a manager’s car. He explained that the grievor did not deny his act, that he claimed that he did it out of personal frustration, and that he eventually paid the cost to repair the vehicle. Mr. Chouinard added that the grievor provided no details of the source of his frustration. Finally, he noted that still, the grievor committed an illegal and unacceptable act in the workplace. However, Mr. Chouinard stated that he retained that reason more as an aggravating factor.

46        In conclusion, Mr. Chouinard indicated that he had no choice other than terminating the grievor due to the seriousness of his actions and his numerous breaches of the Agency’s Code of Ethics and Conduct (Exhibit E-13) and many of its policies and directives. According to Mr. Chouinard, the relationship of trust was irreparably broken. Thus, termination was the appropriate disciplinary measure under the circumstances.

2. Mr. Faribault

47        Mr. Faribault is an investigator with the Criminal Investigations Program (CIP), which is part of the Agency’s Enforcement Division. His duties consist essentially of conducting criminal investigations into taxpayers that the Agency suspects of having committed tax fraud and submitting his investigations’ results to the Public Prosecution Service of Canada.

48        Mr. Faribault testified that the Corporation X file was transferred to the CIP in April 2008 for investigation and that search warrants were obtained to conduct a search of the premises of Corporation X and its accountants and of the residences of its shareholders.

49        Nearly 100 boxes of documents were seized during those searches. Mr. Faribault conducted the inventory of those documents and discovered the file entitled “Nick”. He corroborated Mr. Chouinard’s testimony that that file was related to delivering and installing granite kitchen counters worth $3600 before taxes by Corporation X at the grievor’s personal residence on October 5, 2005.

50        Mr. Faribault also testified that he verified Corporation X’s accounting books and hard drives. He added that although an accounting entry showed Corporation X’s purchase of the counters from a supplier as an expense, there was no entry indicating the receipt of a payment from the grievor as income.

51        Mr. Faribault submitted that information to his group leader in about late September 2008. In cross-examination, he indicated that he was shocked by the documents’ contents. He knew the grievor well because he had worked with him in the past and had a lot of respect for him. He did not understand why the grievor would put himself in such a situation, knowing that he had recently audited Corporation X for 2002 and 2003.

3. Mr. Graham

52        Mr. Graham is a senior investigator with the Internal Investigations Section of the Agency’s Internal Affairs and Fraud Prevention Division. During the period in question, specifically in February 2009, he was an electronic network monitoring officer with the Agency. His duties consisted essentially of ensuring that Agency employees respected the Monitoring of the Electronic Networks’ Usage Policy (Exhibit E-21), stopping the spread of inappropriate content on the Internet or the Agency’s intranet, and monitoring the use of unauthorized software, the incorrect use of the Agency’s computer systems, and employees’ unauthorized access of the Agency’s systems.

53        On February 3, 2009, his manager asked him to check the grievor’s use of the electronic network following a request from the Internal Affairs and Fraud Prevention Division, which was conducting an investigation at that time about the grievor. That check was related primarily to the grievor’s personal hard drive (“H drive”) and his messaging account (“emails”).

54        Mr. Graham prepared two reports containing a long list of unauthorized software, images, or content found on the grievor’s H drive, including software for generating lottery numbers, QuickTax software for preparing personal income tax returns, and pornographic, erotic, obscene, or sexual videos and images. Those reports were submitted to the Internal Affairs and Fraud Prevention Division.

55        According to Mr. Graham, the software, videos, and images listed in those reports were in no way related to the grievor’s work, were unauthorized and unacceptable, and contravened both the Agency’s Monitoring of the Electronic Networks’ Usage Policy (Exhibit E-21), introduced in September 2006, and its predecessor.

56        In cross-examination, Mr. Graham confirmed that before 2008, it had been possible for employees to download unauthorized software on their work computers since no restrictions prohibited them from doing so or required them to consult Information Technology Services first. After 2008, several barriers or restrictions were implemented to preclude such user downloads. He also clarified that although the dates associated with some of the software or images might be long in the past, such as a program dated July 29, 1994, it does not mean that the software or image in question was not used or viewed several times after that since the network does not record that information. Consequently, even if the grievor used software or viewed an image or video in 2008, the date associated with that software or that image still remained July 29, 1994, the date it was introduced to the network. And Mr. Graham acknowledged that the list of unauthorized software and unacceptable images that he prepared contained duplicates because some of the software or images were found in different folders.

4. Mr. Joseph

57        According to Mr. Joseph’s résumé, since March 2007, he has held a senior program and research officer position in the Compliance Programs Branch at the Agency’s headquarters. From 2000 to 2007, he held an auditor position with the Agency. First, he was an AU-01 auditor from 2000 to 2003; then, he was an AU-02 auditor from 2003 to 2007. He was promoted to an AU-03 auditor position in 2007 before becoming a senior program officer in March 2007.

58        In July 2007, the Internal Investigations Section of the Agency’s Internal Affairs and Fraud Prevention Division asked Mr. Joseph to conduct a review of the grievor’s Corporation X audit for 2002 and 2003. A full report of his review was prepared and submitted to the Internal Affairs Division on September 6, 2007.

59        The Agency asked me to qualify Mr. Joseph as an expert witness, to which the grievor objected. After reviewing Mr. Joseph’s résumé, considering his responses in cross-examination about his expertise, and applying the tests in R v. Mohan, [1994] 2 SCR 9, I refused to qualify him as an expert witness. In my opinion, although I did not doubt the relevance of his testimony or the fact that it could have helped me, I believe that I am able to formulate a judgement without him being qualified as an expert. And although no exclusion rules applied in this case, I am fully aware that the witness is an Agency employee and that his services were not retained as an independent consultant but instead as part of his Agency duties. In addition, neither his résumé nor his responses in cross-examination about his expertise demonstrated that he had sufficient qualifications to be named as an expert witness in these proceedings. Among other things, I note that Mr. Joseph has not authored any publications, has not received any specialized training, and does not have any professional designation relevant to the topic of the proposed testimony.

60        However, I allowed Mr. Joseph to relate the facts of the work he was asked to do and to explain the conclusions he drew from his review of the grievor’s Corporation X audit.

61        Mr. Joseph indicated that the grievor was asked to conduct a general review of Corporation X’s expenses for 2002 and 2003. According to him, the grievor’s audit contained several defects. First, he reproached the grievor for adjusting only two expense items without providing an analysis of their validity. No indication in the file led him to believe that Corporation X’s transactions were meticulously analyzed to determine if the proposed expenses were personal or if they were incurred for business purposes.

62        Second, Mr. Joseph reproached the grievor for not questioning the market value determination of the Corporation X shares when the principal shareholder’s shares were sold to other shareholders, one of whom was the principal shareholder’s spouse. He also reproached the grievor for accepting a draft of the taxpayer’s net worth without any questions, when he knew that the taxpayer’s accountant had prepared it and that the data the accountant provided was probably underestimated.

63        Mr. Joseph also reproached the grievor for not commenting on any of the other expenses that he reviewed and for not providing any comparative analysis of the other expense items that were not adjusted.

64        Mr. Joseph indicated that although Corporation X was the subject of an earlier audit, for 1998 and 1999, the grievor’s audit made no mention of it, and nothing led Mr. Joseph to believe that the grievor had inquired about the past adjustments or had compared the adjustments from the two files. According to him, the grievor simply did not appreciate the elevated risk associated with Corporation X during his audit.

65        Mr. Joseph also commented on the number of hours the grievor attributed to the audit, i.e., 139. According to him, the methods the grievor used in his limited review did not justify such a high number of hours. In his opinion, an appropriate audit under the circumstances would have justified at most 85 to 100 hours of work.

66        Mr. Joseph concluded that the grievor acted carelessly in the Corporation X audit. The lack of certain normal audit procedures, such as an audit plan and detailed working papers, and the lack of comments on the potential adjustments deemed immaterial led him to that conclusion.

67        In cross-examination, Mr. Joseph confirmed that it was the first time he was asked to conduct such a review and that reviewing audits that other Agency auditors conducted was uncommon.

68        He acknowledged that he did not consult the grievor or any other auditor or team leader at the Montreal TSO as part of his review. He also confirmed that he did not personally consult the Corporation X audit file for 1998 and 1999 or any past audits of the grievor or his colleagues.

69        Mr. Joseph also acknowledged that the grievor’s working papers about the “[translation] Meals, Entertainment, Advertising, and Promotion” expense item contained the following comment:

All Visa statements were examined for the … taxation year and all restaurant expenses as well as golf dues and golf related expenses were noted. This was done in order to determine if the add backs [sic] related to club dues and to restaurant expenses were properly done. All statements were also examined for any personal expenses.

70        Finally, Mr. Joseph acknowledged that it was possible that the grievor had questioned certain expenses or the Corporation X shares’ market value verbally, without putting that information in his working papers.

5. Mr. Kutukian

71        Mr. Kutukian is a senior programs and liaison officer in the Agency’s Workload Development Section. He provided an overview of the different computer systems and programs the Agency uses to store taxpayers’ personal and tax information and to make it available to certain employees. Among other things, he reviewed the different search engines, the different ways to access that information, who has access to what, what was on certain screens, the type of information provided by the many options available on those screens, etc. He explained that every time an auditor accesses the different Agency systems or screens a trail is left that allows the Agency to identify access by its auditors based on the type of access used.

72        Although I appreciated Mr. Kutukian’s testimony, and although it helped me better understand the Agency’s search engines and the different acronyms associated with different screens, I chose not to reiterate all his testimony since the facts he related were not directly linked to the grievor’s alleged acts and were not relevant or necessary to support the reasons for my decision.

6. Mr. Léveillé

73        Mr. Léveillé is a senior investigator with the Internal Investigations Section of the Agency’s Internal Affairs and Fraud Prevention Division. He explained that after the “Project Colisée” police operation in November 2006, which led to several arrests and searches, the Montreal TSO’s director, Ms. Gouin, requested an audit trail to identify Agency employees who had accessed the tax information of certain taxpayers targeted by that police operation. The grievor was identified as being one such employee. When Mr. Chouinard took over from Ms. Gouin, he asked the Internal Affairs Section to conduct an investigation to shed light on the circumstances of the grievor’s access to multiple taxpayers’ tax information, including that of Corporation X. Mr. Léveillé conducted that investigation and submitted his report on July 17, 2009 (Exhibit E-7). His report’s conclusions are cited at paragraph 30 of this decision.

74        Mr. Léveillé interviewed the grievor twice, on January 25, 2008, and on April 16, 2009. He explained that the delay occurred between the two interviews because the grievor went on sick leave for a long time after the first one. The information gathered during those interviews is reflected in Mr. Léveillé’s handwritten notes (Exhibit E-54) and in his final report (Exhibit E-7). Among other things, that information reveals that although the grievor completed an average of 5 audit files per year in his AU-03 auditor duties, he had viewed 19 863 screens for 6128 different accounts between January 2003 and January 2008, a period of 5 years, which suggested that he had accessed an average of 245 different taxpayer accounts for each audit.

75        Mr. Léveillé indicated that the grievor also used Option T 5787 times; it is used to find a taxpayer for whom the name or address is known but not the social insurance number (SIN). According to Mr. Léveillé and several other employees questioned about it, the number and frequency of the grievor’s accesses was not normal or justified. In April 2008, Mr. Léveillé asked the grievor’s team leader, Mr. Oliverio, to comment on the validity of the grievor’s accesses of 73 taxpayers’ tax information. According to Mr. Oliverio, 69 of the 73 accounts the grievor accessed did not seem related to his workload. In cross-examination, Mr. Léveillé acknowledged that he did not question the grievor about those 73 accesses.

76        The information gathered in Mr. Léveillé’s investigation also revealed that among other things, the grievor had accessed Corporation X’s tax information several times after he had completed auditing it, that several such accesses had been done when he was doing business with Corporation X for a kitchen counter install at his personal residence, that he had accessed Corporation X’s shareholders’ tax information two years after he had completed auditing it, and that he had still had the tax files of Corporation X and its principal shareholder in his filing cabinet two years after his audit ended. According to Mr. Léveillé, those accesses were unauthorized and were contrary to policies and the Agency’s Electronic Network Policy Guidelines (Exhibit E-22). The grievor did not provide Mr. Léveillé with any explanations of those accesses, except that they might have been part of a performance evaluation. According to Mr. Léveillé, that explanation was not very likely if the large number of accesses and taxpayers involved were considered. And the grievor’s team leader, Mr. Fratarcangelli, did not remember asking him or any other Agency employee to access a taxpayer’s tax information, once an audit was completed, for the purposes of a performance evaluation, including information about Corporation X. When interviewed, Mr. Oliverio indicated that Agency employees should not keep taxpayer files at their desks or in their filing cabinets once an audit is completed.

77        Mr. Léveillé also indicated that the grievor had used Option T to access his own tax information and that of two of his neighbours, his tenants, and his spouse. Once again, Mr. Léveillé reiterated that those were unauthorized accesses and were contrary to Agency policies and that the grievor had not provided him with any explanation for them. He added that the grievor confirmed to him that he was familiar with the Agency’s Code of Ethics and Conduct (Exhibit E-13) and was aware that Agency employees did not have permission to access their personal information or that of their families, friends, or neighbours.

78        Mr. Léveillé also related discussions he had with the grievor about the kitchen counters that Corporation X delivered to him and installed in October 2005. The grievor told him that he paid the principal shareholder at Corporation X’s offices in cash without obtaining an invoice or proof of payment. He did not remember the source of the money used for the payment but stated that it might have been money that his children received as gifts and that he kept in the house. The grievor also told him that he decided to do business with Corporation X because the taxpayer’s principal shareholder was the cousin of a work colleague (an auditor at the Montreal TSO), and he thought that therefore, he could obtain a good price. Mr. Léveillé interviewed the grievor’s manager, Mr. Oliverio, who stated that it is inappropriate for an Agency auditor responsible for auditing a taxpayer to do business with that same taxpayer during the audit and that it would be just as inappropriate for the auditor to do business with the taxpayer while the taxpayer’s files were in the auditor’s desk or filing cabinet.

79        In an earlier investigation report, dated March 24, 2009, Mr. Léveillé concluded that the grievor had deliberately damaged a vehicle owned by an Agency employee, causing damages estimated at $419. The incident occurred on November 15, 2007. The grievor eventually admitted to doing it on January 16, 2008, during the ensuing investigation.

B. The grievor’s evidence

1. Mr. Cossette

80        Mr. Cossette is an SME audit team leader at the Agency’s Montreal TSO. He testified that he was the team leader of the auditor who had conducted the earlier Corporation X audit for 1998 and 1999. He provided a summary of the steps that auditor took during that audit. Mr. Cossette indicated that the auditor in question advised the grievor to pay particular attention to Corporation X’s expenses and to those of its principal shareholder.

81        Mr. Cossette also indicated that files to be audited are not assigned by the team leader but instead by the Workload Section, which is responsible for identifying the risk and non-compliance of certain taxpayers and, after a team leader requests files, for assigning files to auditors at different levels based on the files’ complexity or the identified risks.

82        Mr. Cossette specified that although he was the grievor’s team leader for a short time, from fall 2000 to summer 2001, he was not the grievor’s team leader when the grievor audited Corporation X for 2002 and 2003 and was in no way involved in that audit. He added that neither Mr. Joseph nor Mr. Chouinard consulted him about that audit.

83        Mr. Cossette testified briefly about Agency auditors possibly accessing third-party tax information during an audit but did not clearly indicate the types or numbers of accesses that a team leader could consider normal or justifiable.

84        In cross-examination, Mr. Cossette acknowledged that in light of the events around the Corporation X audit for 1998 and 1999, the company was a high-risk taxpayer. He added that a later audit of that taxpayer would require more vigilance than usual. When questioned about the grievor’s decision to limit his audit to two expense items, to not question in detail the nature of the expenses claimed under those items, and to not verify the expense item for Corporation X’s materials purchase, Mr. Cossette replied rather ambiguously, first conceding that the expense item for the materials purchase should have been verified given the results of the taxpayer’s earlier audit. However, he added later in his testimony that an auditor must make choices because audits have deadlines and that the expense items the grievor selected reflected rather minor amounts.

2. Mr. Oliverio

85        Mr. Oliverio is a tax advisor in the private sector. He worked for the Agency from 1985 to December 2010 and during the period in question was an MG-06 manager. Team leaders reported to him.

86        In his testimony, he confirmed that an AU-03 auditor, like the grievor, is normally required to complete five audits per year.

87        Mr. Oliverio reiterated some of Mr. Cossette’s observations about the practices for assigning files at the Montreal TSO. I do not feel the need to repeat that part of his testimony in full since the Agency made no allegations about whether assigning the Corporation X file to the grievor had been appropriate.

88        According to Mr. Oliverio, all auditors’ accesses to the different Agency programs and search engines must be related to their workloads. For example, he indicated that a typical audit could lead an auditor to access the tax information of a taxpayer’s shareholders, a corporation operated by the taxpayer, a corporation with business ties to the taxpayer, or a third party that does business with the taxpayer. He added that although an auditor should be able to justify every access, it could be difficult if several years pass between an access and a request to justify it. Since 2009, team leaders and managers have had to verify their auditors’ accesses each month, to avoid that difficulty. However, that policy was not in place during the period at issue.

89        Mr. Oliverio indicated that never met with or talked to Mr. Joseph and that he did not review his report.

90        When questioned about the working papers the grievor prepared about the two expense items that he verified in his Corporation X audit, Mr. Oliverio agreed that the grievor could have provided more detailed working papers and that he could have looked more closely at the nature of those expenses. However, as had Mr. Cossette, he reminded me that the amounts were rather minor.

91        In April 2008, Mr. Léveillé asked him to review 73 of the grievor’s accesses to determine if they were related to his workload. According to Mr. Oliverio, after reviewing the taxpayers and the shareholders of those taxpayers that the grievor had audited, he concluded that 69 of the 73 accounts the grievor accessed did not seem related to his workload. According to him, the search was too simple and required certain follow-ups. However, I note that neither Mr. Oliverio’s interview notes (Exhibit E-57) nor the results of his research (Exhibit E-55) mentioned such a need or the type of follow-up to which he referred.

92        In cross-examination, Mr. Oliverio confirmed what he had told Mr. Léveillé in April 2008, namely, it was inappropriate for an Agency auditor responsible for auditing a taxpayer to do business with that same taxpayer during the audit and that it would be just as inappropriate for the auditor to do business with the taxpayer while the taxpayer’s files were in the auditor’s desk or filing cabinet. He also acknowledged that while it was probably inappropriate for the grievor to accept an invitation from Corporation X’s principal shareholder to join him in a private Bell Centre box for a Montreal Canadiens game paid for by the Corporation, other employees from the Montreal TSO did the same during the period in question. Photos of the event in question (Exhibit E-51) from December 2005 show a party atmosphere with Corporation X shareholders and seven employees of the Montreal TSO, including the grievor, Mr. Oliverio, and Mr. Fratarcangelli.

93        Mr. Oliverio also stated that he was surprised to learn that the grievor had accessed the accounts of Corporation X and its principal shareholder several times after completing the audit of that taxpayer. According to him, it was certainly uncommon behaviour.

94        Mr. Oliverio also stated that he was surprised to learn that the grievor verified only two Corporation X expense items during his audit, given the taxpayer’s audit history. According to him, it would have been useful to verify the expense items that were the subject of certain adjustments in the older audit for 1998 and 1999, particularly the subcontracting and office expense items. He also mentioned that the grievor’s Corporation X audit did not seem to justify 139 hours of work.

95        Finally, Mr. Oliverio confirmed that auditors should always leave a trail of third parties that they check during an audit, which could ultimately explain certain potentially questionable accesses. He added that not all auditors at the Montreal TSO adhered to that practice during the period at issue.

3. Mr. Fratarcangelli

96        Mr. Fratarcangelli worked at the Agency from 1976 to June 2008. During the period at issue, he was a team leader in the SME Audit Section. He indicated that he had once been the grievor’s team leader but did not specify when or for how long.

97        The process for assigning files at the Montreal TSO that Mr. Fratarcangelli described differed considerably from what Mr. Cossette and Mr. Oliverio described in their testimonies. Although according to the official Agency procedure, team leaders should contact the Workload Section to assign files to auditors on their teams, Mr. Fratarcangelli did not always follow that procedure. He had his own method; i.e., he accessed the Agency’s ARGO system himself, identified files with audit potential, printed a summary list of certain potential files, and assigned the files to the auditors on his team. In effect, in that way he assigned Corporation X’s file to the grievor himself. Mr. Fratarcangelli suggested that on a few occasions, he had asked the grievor to help him identify files that could be subject to a tax audit. According to him, that required certain accesses to the files of taxpayers and their shareholders. However, he did not specify when, how often, or how many times he requested that of the grievor.

98        Mr. Fratarcangelli indicated that he was satisfied with the grievor’s audit of Corporation X for 2002 and 2003. According to him, the minimal amounts that appeared in the grievor’s working papers did not require any additional questions from him.

99        As for the kitchen counters, Mr. Fratarcangelli confirmed that the grievor informally mentioned to him that he wanted to do business with a taxpayer that he had recently audited. The grievor did not give him the taxpayer’s name, and Mr. Fratarcangelli did not ask for it. He indicated that he advised the grievor to avoid doing business with a taxpayer that he had just audited, but that if it was impossible to obtain such counters from another source, he did not see any problem with proceeding with the transaction if the audit was complete and if the grievor ensured that he paid market value for the counters.

100        When questioned about the merits of that approach, Mr. Fratarcangelli acknowledged that it would have been preferable had the grievor provided him with the name of the taxpayer involved in the transaction so that they could both have ensured that the taxpayer’s files were not assigned to the grievor in the future, whether for a subsequent audit or for some kind of follow-up.

101        Mr. Fratarcangelli indicated that Mr. Léveillé did not question him about the kitchen counters and that Mr. Joseph did not consult him about the review of the grievor’s Corporation X audit.

102        Mr. Fratarcangelli confirmed his presence in the Bell Centre box in December 2005. However, he emphasized that the grievor did not tell him at that time that the taxpayer that was paying for the evening was the same one that had recently delivered and installed kitchen counters at his home. As for the appropriateness or inappropriateness of accepting the invitation and benefitting from an evening of hockey at the Bell Centre at Corporation X’s expense, Mr. Fratarcangelli did not see it as a big deal.

103        When questioned about the grievor’s access to the tax information of Corporation X and its shareholders after the audit file was closed, Mr. Fratarcangelli acknowledged that some follow-ups are required following an audit and that nothing seemed to justify such follow-ups in this case, particularly not at the frequency noted.

104        When questioned about the fact that the grievor kept the Corporation X files in his filing cabinet for two years after completing that taxpayer’s audit, Mr. Fratarcangelli confirmed that Agency procedures state that physical files must be returned to the Workload Section once an audit is completed but that not all auditors follow those procedures. Once again, he did not provide any clarification of that rather vague statement.

4. Mr. Ataya

105        Mr. Ataya owns two convenience stores in Montreal, including one the grievor has visited daily since 2003. According to Mr. Ataya, the grievor buys several types of lottery tickets each day totalling $20 to $30. He wins money 2 or 3 times a month, in amounts ranging from $75 to $500, except for once when he won $105 000.

106        Mr. Ataya specified that convenience stores can pay out prizes of less than $600 but that any greater amount must be claimed at a Loto-Québec office.

5. Ms. Pelletier

107        Ms. Pelletier retired from the public service in January 2013. Before that, she had been a technical support analyst for 20 years, which is an entry-level position, classified CS-01 (Computer Systems Group).

108        As part of her duties, Ms. Pelletier updated and replaced Agency employees’ computers, including laptops. According to her, replacements occurred every four years. It must be noted that she did not confirm personally updating or replacing the grievor’s laptop.

109        Ms. Pelletier stated that before 2001-2002, Agency employees could download software to their personal computers since the operating systems installed in 1998, including Windows 95, imposed few restrictions. Since then, the new operating system has imposed several restrictions. So it is practically impossible for an employee to personally download software on an Agency computer. She specified in cross-examination that the fact that it was possible for Agency employees to personally download software before 2001-2002 did not mean that doing so was authorized. She confirmed that although Agency employees can make minimal personal use of their computers, the Agency’s Electronic Network Policy Directives (Exhibit E-22) and Monitoring of the Electronic Networks’ Usage Policy (Exhibit E-21) prohibit storing or downloading pornographic or nude images as well as software for generating lottery numbers.

110        As for the QuickTax software, Ms. Pelletier indicated that until 2004, Agency employees were authorized to use and even personally download that software to their computers. The Agency then asked employees to no longer download that software to their work computers.

111        Ms. Pelletier explained that when she replaced a laptop, she had to save the contents of the hard drive (C drive) by temporarily transferring it to the employee’s repository (H drive) on the Agency’s network. She specified that she did not check the contents of the employee’s hard drive to determine what was and was not authorized or appropriate. However, she sometimes noticed the presence of photos or images on employees’ C or H drives. If she noticed a large number of photos that took up a lot of space on an employee’s drive, she would ask the employee to remove them, and in more problematic cases, she would raise the matter with her managers. When questioned about whether the images on the grievor’s C and H drives took up a lot of space, she replied that the images in question took up very little space — in fact, a minimal amount.

6. The grievor

112        The grievor indicated that he began his career with the Agency in 1988. At that time, he held an AU-01 auditor position. At the time of his termination, he held an AU-03 auditor position. In 2002, while holding an AU-02 auditor position, he agreed to be on a training team. Although he continued to work as an auditor in the SME section, he also acted as a technical advisor for certain new employees at the Montreal TSO. Those employees normally had to complete between 15 and 20 audit files per year.

113        The grievor indicated that at no time did he ask to conduct the Corporation X audit and that he did not know the company or its shareholders before conducting that audit in 2004.

114        The grievor described his audit process and added that it usually included meetings at the taxpayer’s offices or those of its accountants. He also described what he usually checked at the offices of the company being audited, indicating that working papers reflected the checks that were made and the proposed adjustments. However, some time later in his testimony he suggested that he did not prepare working papers unless a change or adjustment was being proposed. In cross-examination, he acknowledged that according to the [Agency’s] Income Tax Audit Manual (Exhibit E-36), working papers must explain the different aspects and elements that the auditor checked, even if no adjustments are required, and must demonstrate that the different significant risk areas were checked. However, he added that not all auditors at the Montreal TSO followed that practice or that not all team leaders required it. It must be noted that this alleged deviation from the Agency’s audit manual was in no way corroborated by the testimonial evidence from the other witnesses or by the documentary evidence.

115        The grievor confirmed that once audits are completed, auditors must submit the physical files used in the audit to their team leaders, along with their audit reports, which the team leaders must approve.

116        According to the grievor, his performance never raised the slightest problem. He pointed out that even in his performance evaluation for September 2004 to August 2005, he exceeded his manager’s expectations.

117        The grievor also confirmed that he was on sick leave from December 2007 to March 2009. No documentary or corroborative evidence was adduced about that leave.

a. Use of the Agency-provided computer

118        The Agency provided the grievor with a laptop that he could use both at his workstation and on the road or at home. According to him, the Agency’s Computer Systems Group carried out updates and provided him with a new laptop every four years. Between 1995 and 2007, he used three different laptops.

119        The grievor confirmed that any use of the laptop, including accessing the Agency’s different programs and search engines, had to be related to his duties. When questioned about what could lead him to access different types of taxpayer information, the grievor indicated that he was primarily required to make that access as part of his audits, which could explain accessing information about a company, its shareholders, the shareholders’ spouses, corporations related to the company, and third parties doing business with the company. He added that he sometimes accessed such information when acting as a technical advisor or helping his team leader, Mr. Fratarcangelli, identify at-risk files and things to be checked in the ARGO system. However, the grievor did not specify when, how often, or how many times he acted as a technical advisor or provided support for identifying at-risk files. That portion of his testimony remained somewhat vague.

120        The grievor indicated that although he had been reproached for making many unauthorized accesses and although several lists of such accesses appear in Mr. Léveillé’s investigation report (Exhibit E-7), neither Mr. Léveillé nor Mr. Chouinard gave him an opportunity to review or comment on those lists, particularly the one Mr. Oliverio reviewed. However, the grievor did not deny being questioned about the accesses to his personal information and that of his spouse, his tenants, his neighbours, and Corporation X and its shareholders after he had completed auditing that corporation. As for those accesses, the grievor claimed that with the exception of the access of information about Corporation X and its shareholders, they were done just by chance while he was testing a new research method involving postal codes. He provided no clarification of that work method. As for accessing his neighbours’ tax information, the grievor did not deny accessing several Agency screens to determine their income sources, including their employers’ names. As justification, he indicated that at that time, he had doubts about his neighbours’ lifestyle and the source of their income but did not provide any clarification of the basis of those doubts, apart from the fact that he rarely saw them leave home and that, by nature, he was unusually curious about others’ affairs. I noted that during his interview with Mr. Léveillé, the grievor stated that he did not know why he accessed his neighbour’s tax information. He indicated that he was not familiar with Agency Form T133B, entitled “Informant Lead”, which is used when a taxpayer wishes to report to the Agency suspect behaviour or information about another taxpayer. According to the adduced evidence, nothing seems to preclude an Agency employee from acting as an informant. However, the grievor seemed familiar with Form T133, a similar tool for an Agency employee to make a denunciation. He indicated that he would have filled out a Form T133 had the result of his personal research into his neighbours raised legitimate suspicions.

121        According to the grievor, the Agency tolerated a certain amount of personal use of the laptop. He confirmed that he had installed software to generate lottery numbers without consulting the Agency’s computer technicians and that he had used that software daily for personal purposes until 2002 or 2003, when he bought a personal computer for himself. That software, particularly the one entitled “Banco”, generated winning sequences of lottery numbers. According to a confirmation of the grievor’s winnings from 2002 to 2010 provided by Loto-Quebec, he apparently won $294 451.15 during that period (Exhibit F-13). That figure does not reflect the many prizes of less than $600 that he claimed directly at Mr. Ataya’s convenience store during the same period (Exhibit F-14).The grievor indicated that he kept at home the prizes Mr. Ataya paid him in cash. The grievor specified that he was never reproached for installing such software on his laptop during the many updates that the Agency’s computer technicians made during the years before it was discovered.

b. Pornographic images

122        The grievor testified that the images were found on his laptop and eventually on his H drive because of updates made after his brother visited his home in 2001 or 2002. His brother allegedly inserted a diskette containing the images in question on the grievor’s laptop so that they could look at them together. According to the grievor, after they looked at them, he accidentally hit the “save” command when he simply wanted to take the diskette out of his laptop. According to him, that explains why the images were on his laptop. He added that it was the only time that he had viewed the images and that he never showed or distributed them to anyone.

123        In cross-examination, the grievor was referred to a letter that he sent to the Agency’s commissioner on February 26, 2010, after his termination. In it, the grievor mentioned the following: “[translation] The pornographic images found on my computer came from internal Agency emails.”

124        The grievor acknowledged that possessing such images and installing software for generating lottery numbers on an Agency computer were in no way related to his work and that such use was considered illegal and unacceptable under several internal Agency policies. He did not deny that those actions contravened several Agency policies.

c. The Corporation X audit

125        The grievor indicated that in August 2004, Mr. Fratarcangelli asked him to audit Company X for 2002 and 2003. As was his habit, he first reviewed Corporation X’s physical files and then made certain customary checks, including of all cheques that the corporation issued or endorsed during that period. He was aware that the company had been audited before, for 1998 and 1999, and he had access to those files. He then checked some of the company’s expense items and proposed a few adjustments, including for golf expenses totalling $4267, restaurant expenses totalling $6935, and vehicle rental expenses totalling $1800. He admitted that he did not provide details demonstrating how he checked each expense appearing on Corporation X’s Visa statement because he had already disallowed a percentage of those expenses, and the amounts claimed were minimal and did not justify a more in-depth analysis. He added that the fact that his working papers mentioned only two expense items did not mean that he did not check the other expense items since his practice was to not prepare such sheets when no adjustment was required. That alleged practice at the Montreal TSO is contrary to the Agency’s audit manual (Exhibit E-36) and, as indicated at paragraph 114, was in no way corroborated.

126        The grievor indicated that he remitted his audit report and the physical files for Corporation X to Mr. Fratarcangelli and that he approved the grievor’s report. When questioned about the fact that the files were still in his filing cabinet two years after the audit ended, he indicated that he asked that the files in question be returned to him in July 2005 after Mr. Fratarcangelli mentioned to him that he “[translation] would like to see 2004” for Corporation X. The grievor did not provide any details about the meaning of Mr. Fratarcangelli’s alleged statement (“see 2004”). Once again, it must be noted that Mr. Fratarcangelli in no way corroborated that fact in his testimony.

127        The grievor also explained that he accessed the tax information of Corporation X and its shareholders more than once after completing the company audit for the same reason, i.e., because Mr. Fratarcangelli wanted to “see 2004” for that taxpayer. The grievor explained that he simply tried to determine whether the taxpayer had filed an income tax return for 2004. He indicated that he did not receive any further instructions from Mr. Fratarcangelli about that taxpayer.

128        In cross-examination, the grievor was referred to the notes from his January 25, 2008, interview with the investigator, Mr. Léveillé (Exhibit E-54), which indicate that he had no reason to access Corporation X’s tax information after completing the audit, i.e., after February 2005, apart from needs related to his performance evaluation. The grievor confirmed that he continued his interview with Mr. Léveillé on April 16, 2009, and that he had the opportunity to reread the interview notes and propose necessary changes.

d. The kitchen counters

129        The grievor indicated that he decided to do business with Corporation X for installing kitchen counters at his home despite the fact that it was a taxpayer that he had recently audited because he was having difficulty matching the colour of the counters with that of the existing flooring. Corporation X in no way specialized in installing kitchen counters and did not sell them. Through Corporation X, a kitchen counters supplier was located, and the grievor and Corporation X reached an agreement to install them. The agreed amounts are detailed in a document adduced in evidence that indicates the following:

$2500.00 (to purchase the counters from the supplier)

$600.00 (labour for installing the counters)

$500.00 (labour for installing a backsplash)

__________

Total: $3600.00

130        The grievor indicated that he paid the total amount of $3600 in cash. I note that the purchase order from the kitchen counters supplier indicates an amount of $2500, plus taxes. However, the document detailing the agreement makes no mention of taxes. Similarly, the labour amounts do not mention any applicable taxes.

131        As for the fact that he dealt with a taxpayer that he had recently audited, the grievor stated that he first consulted his team leader, Mr. Fratarcangelli, to obtain his opinion and that he had told the grievor that he did not see any problem because the audit was completed and it was a small amount. The grievor did not provide the name of the taxpayer in question to Mr. Fratarcangelli and did not mention that he had the taxpayer’s physical files in his filing cabinet and that he was following up on that taxpayer, including accessing tax information of the taxpayer and its shareholders. I note that between the end of the Corporation X audit and the kitchen counters’ installation, the grievor accessed tax information about Corporation X 9 times and viewed 29 screens.

132        When questioned about the kitchen counters payment and the source of that cash, the grievor affirmed that he made a first payment of $1000 in cash when the counters were installed on October 5, 2005, that he made a second payment of $1000 in November or early December 2005 at Corporation X’s offices, and that he made a third and final payment of $1600 in cash in about late December 2005 at Corporation X’s offices. He added that the first two payments came from his lottery winnings and that the third payment was from cash that his children had received as Christmas gifts, which he kept in the house. He also indicated that he never asked for or received any proof of payment from Corporation X. I note that in his interview with Mr. Léveillé, the grievor could not remember precisely the source of the money used to pay for the kitchen counters.

133        In cross-examination, the grievor was again referred to his February 26, 2010, letter to the Agency’s commissioner, sent four months after his termination. In it, the grievor indicated the following “[translation] I purchased them and paid cash in several payments of 500 to 800 dollars each.” I note that payments of $500 would have required at least 7 different payments and that payments of $800 would have required at least 5.

e. Evening at the Bell Centre

134        The grievor indicated that a colleague asked him if he wanted to go to a Montreal Canadiens hockey game in December 2005 in a Bell Centre box along with other colleagues. During the Corporation X audit, the grievor learned that that colleague was the cousin of the company’s primary shareholder. The grievor replied that he would go to the game. He did not question the costs associated with the event. When he arrived in the box, he stated that he was surprised to see Corporation X’s primary shareholder. He knew him because he had recently audited the company and had just dealt with him for the purchase and installation of his kitchen counters. Despite his surprise, the grievor remained in the box until the end of the game. Corporation X’s principal shareholder paid the costs associated with the box, including for food served during the evening.

135        When asked if he would have gone to the box had he known that Corporation X’s main shareholder would be there and would be paying for the cost of the evening, the grievor replied, “[translation] Maybe not.”

f. Act of vandalism

136        The grievor did not deny damaging an Agency manager’s vehicle in an Agency parking lot. He indicated that he did not know that the vehicle belonged to the manager in question and that he has always regretted doing it. In his February 26, 2010, letter to the Agency’s commissioner, the grievor mentioned that he paid for the damage caused to the vehicle in question and suggested that mental health problems contributed to his act, which he qualified as impulsive. However, I note that he did not raise such problems during his testimony and that no medical evidence was submitted at the hearing to support that claim.

III. Summary of the arguments

A. For the Agency

1. The suspension

137        The Agency submitted that the jurisdiction of adjudicators and the issues that can be referred to adjudication are limited and prescribed by section 209 of the PSLRA, which reads as follows:

209 (1) An employee may refer to adjudication an individual grievance that has been presented up to and including the final level in the grievance process and that has not been dealt with to the employee’s satisfaction if the grievance is related to

(a) the interpretation or application in respect of the employee of a provision of a collective agreement or an arbitral award;

(b) a disciplinary action resulting in termination, demotion, suspension or financial penalty;

(c) in the case of an employee in the core public administration,

(i) demotion or termination under paragraph 12(1)(d) of the Financial Administration Act for unsatisfactory performance or under paragraph 12(1)(e) of that Act for any other reason that does not relate to a breach of discipline or misconduct,

(ii) deployment under the Public Service Employment Act without the employee’s consent where consent is required;

(d) in the case of an employee of a separate agency designated under subsection (3), demotion or termination for any reason that does not relate to a breach of discipline or misconduct.

…

138        The Agency maintained that although the suspension without pay could have had a prejudicial effect on the grievor, it was not aimed at correcting misconduct by punishing him in some way and therefore cannot be considered disciplinary. According to the Agency, it was instead an administrative measure aimed at removing the grievor from the workplace, to investigate serious allegations against him and to not compromise taxpayer information and assets or jeopardize the public trust in the Agency.

139        The Agency pointed out that Mr. Chouinard’s concerns were legitimate and that they justified suspending the grievor without pay pending the investigation into the allegations against him and until he had an opportunity to explain himself. The suspension’s length was not unreasonable, according to the Agency, when considering the scope and complexity of Mr. Léveillé’s investigation, the availability of the parties to meet to review the different things that the investigation and Mr. Joseph’s review raised, and the time needed to determine whether a disciplinary measure was required under the circumstances and if so, which one.

140        According to the Agency, the grievor did not meet the burden of demonstrating that Mr. Chouinard’s decision to suspend him constituted a disguised disciplinary measure meant to punish misconduct or a breach of discipline.

141        In support of its arguments, the Agency referred me to, among other cases, Canada (Attorney General) v. Frazee, 2007 FC 1176, Braun v. Deputy Head (Royal Canadian Mounted Police), 2010 PSLRB 63, and Synowski v. Treasury Board (Department of Health), 2007 PSLRB 6.

2. The termination

142        The Agency submitted that each of the three main reasons cited in its termination letter, i.e., (1), the breach of the Agency’s Code of Ethics and Conduct (Exhibit E-13) and conflict of interest guidelines (kitchen counters), (2) the careless audit of Corporation X, and (3) the unauthorized accesses, justified such a measure being taken.

a. Conflict of interest (kitchen counters)

143        According to the Agency, the grievor did not challenge most of the facts of this issue, including the following:

- The grievor did business with a taxpayer that he had audited a few months before.

- He had that taxpayer deliver and install granite kitchen counters in his home on October 5, 2005.

- While he was doing business with Corporation X and it was installing the kitchen counters, he physically possessed all the company’s tax files.

- Using the Agency’s computer systems, he accessed tax information about Corporation X and its shareholders before, during, and after the kitchen counter installation, even though the company’s audit was completed in February 2005.

- He provided no documentary or corroborative evidence demonstrating the payment for the kitchen counters.

144        The Agency submitted that the only relevant fact the grievor challenged was about the alleged payment for the kitchen counters. According to the Agency, the grievor submitted no documentary evidence of the payment and gave no corroborating testimony about it. The only explanation he presented was his allegation that he had made the payment in cash. The Agency asked me to not assign any credibility to his testimony on that point mainly because it contained significant inconsistencies. The Agency referred me to the different versions the grievor provided about the number of payments and the amount of each one.

145        According to the Agency, the only plausible conclusion is that the grievor did not pay for the kitchen counters delivered and installed by Corporation X, a company that he had recently audited and the files of which were in his work filing cabinet at the time of that delivery. The Agency added that the grievor continued to access Corporation X’s tax information during and after the counters’ delivery.

146        The Agency pointed out that those acts breached both the Agency’s Code of Ethics and Conduct (Exhibit E-13) and its Gifts, Hospitality, and other Benefits Policy (Exhibit E-14) and that they were serious misconduct. The Agency claimed that the first ground for termination was demonstrated and that it justified terminating the grievor.

b. Careless audit

147        The Agency submitted that the facts revealed in the earlier Corporation X audit, i.e., of 1998 and 1999, were grounds for the grievor doing a more thorough audit. Instead, according to the Agency, he was seemingly content with simply conducting a careless audit.

148        The Agency reminded me of Messrs. Cossette’s and Oliverio’s testimonies in which they acknowledged that they personally would have been more vigilant given the taxpayer’s history and that they would have checked more expense items, including subcontracting expenses and materials purchases.

149        The Agency maintained that the grievor’s explanation that he checked other expense items but did not document the stages of those checks on working papers could not be retained because it went against the Agency’s audit manual, which requires the opposite.

150        According to the Agency, the many mistakes raised in Mr. Joseph’s report lead to the conclusion that the grievor’s audit was careless and that he voluntarily turned a blind eye during it.

151        The Agency argued that that second ground for termination was demonstrated, that it represented serious misconduct, and that it justified the grievor’s termination.

c. Unauthorized access

152        As for accessing many Canadian taxpayers’ tax information, the Agency pointed out that the grievor’s accesses had not been authorized and that the explanations he provided were unlikely and implausible. It added that the fact that he regularly and repeatedly used Option T, which is used when an auditor does not have a taxpayer’s SIN or business number, was revealing as to the true motivation behind his accesses. According to the Agency, the grievor’s comments about the fact that by his very nature, he considered himself unusually curious about others’ affairs, must be kept in mind.

153        The Agency maintained that it has a duty to protect Canadian taxpayers’ tax information. It added that it cannot tolerate its auditors accessing the tax information of taxpayers who are not part of their workload just because they have a doubt or to satisfy their curiosity. The Agency also maintained that it cannot tolerate its employees accessing their personal information or that of their family members or acquaintances. The Agency reminded me that one of its related policies explicitly provides for the possibility of terminating an employee who does not follow those rules.

154        According to the Agency, it is unnecessary to demonstrate that all the grievor’s alleged accesses were unauthorized since the fact that they were about his spouse, his tenants, and his neighbours was enough to justify terminating him.

d. Inappropriate use of the Agency’s equipment and network

155        The Agency reminded me that the grievor did not deny installing unauthorized software, including some to generate lottery numbers, and to saving pornographic images on his laptop. Nor did he deny using that unauthorized software or viewing the pornographic images in question. Finally, according to the Agency, he did not deny breaching several Agency policies.

156        According to the Agency, the grievor did not assume any responsibility for those acts, and he reproached the Agency for not noticing the software and images earlier, particularly during the many updates to his laptop.

157        As for the pornographic images, the Agency pointed out that the grievor’s explanation about how the images were saved was simply not credible, for two reasons. First, he provided two completely different versions, and second, his claim that he accidentally hit the “save” command is unlikely since more than one step must be followed to save a document or an image on a personal computer.

158        The Agency maintained that the grievor’s actions breached its Code of Ethics and Conduct (Exhibit E-13), its Monitoring of the Electronic Networks’ Usage Policy (Exhibit E-21), its Electronic Network Policy Guidelines (Exhibit E-22), and its Manual On Access to the Internet and the Agency’s Intranet (Exhibit E-31).

159        The Agency argued that although those breaches, when considered individually, would not justify a termination, the cumulative effect of them and the other grounds would.

e. Act of vandalism

160        The Agency reminded me that in his testimony, the grievor did not deny the facts of this incident. According to the Agency, it was clearly established that the grievor vandalized a manager’s car in an Agency parking lot on November 15, 2007.

161        The Agency pointed out that therefore it was perfectly reasonable to consider the grievor’s conduct in question as an aggravating factor that reinforced the justification of his termination.

3. Conclusion

162        The Agency argued that the grievor’s actions were deliberate and planned, that he provided inconsistent and incoherent explanations, that he knew what constituted a conflict of interest given his many years of service, that he did not acknowledge his errors, and that his position required a high level of trust. Consequently, the most severe measure, i.e., termination, could be imposed. In support of that proposal, the Agency referred me to, among other cases, Shaver v. Deputy Head (Department of Human Resources and Skills Development), 2011 PSLRB 43, Pagé v. Deputy Head (Service Canada), 2009 PSLRB 26, Narayan v. Canada Revenue Agency, 2009 PSLRB 40, and Oliver v. Canada Customs and Revenue Agency, 2003 PSSRB 43.

B. For the grievor

1. The suspension

163        The grievor submitted that the Agency failed its duty of procedural fairness by failing to inform him of the real grounds for his suspension when he was advised of it on April 7, 2009.

164        According to the grievor, the Agency suspended him without any written report, and therefore, it could not adequately assess the need to suspend him without pay.

165        In support of the positions put forward in his suspension without pay arguments, the grievor referred me to Baptiste v. Deputy Head (Correctional Service of Canada), 2011 PSLRB 127.

2. The termination

a. Act of vandalism

166        The grievor reminded me that although the termination letter dated November 10, 2009, clearly indicated that the act of vandalism was a ground for his termination, Mr. Chouinard stated in his testimony that he had retained that ground only as an aggravating factor.

b. Inappropriate use of the Agency’s electronic network

167        As for the pornographic images, the grievor reminded me that although the Agency had withdrawn the issue of “[translation] distributing” the images at the start of the hearing, nevertheless, it was considered in the decision to terminate him.

168        According to the grievor, those images were downloaded by mistake and were viewed only once.

169        As for the unauthorized software, the grievor pointed out that it took up very little space on the Agency’s network, that he had never received a warning about using it, and that he stopped using it after 2002-2003, when he purchased his own computer.

c. Unauthorized access to the Agency’s systems

170        As for accessing his personal file and those of his spouse and tenants, the grievor reminded me that he used only Option T, an option that reveals only the names, addresses, and SINs of taxpayers. According to him, the conclusion that he accessed his personal information and that of people related to him was unfounded.

171        As for accessing his neighbours’ information, the grievor submitted that his doubts about their lifestyle justified that access, that he acted on a reflex shared by many experienced Agency auditors, that it was a very brief check of their incomes, and that he did it solely to ensure compliance with the Income Tax Act.

172        As for the access alleged as being unrelated to his workload, the grievor maintained that the evidence established that such access could be justified by one of the following three explanations:

a. During his audits, he accessed not only the primary and secondary files but also information about third parties and related persons.

b. His use of the ARGO system, when helping Mr. Fratarcangelli identify at-risk files, led him to access several taxpayers’ files.

c. His work as a trainer and technical advisor also led him to access the files of taxpayers who were not part of his workload.

173        The grievor added that the Agency was content to simply compare the accesses to the primary and secondary files assigned to him without asking him about his accesses or giving him an opportunity to explain them.

d. Careless audit

174        The grievor argued that the work methods he used in his Corporation X audit were no different from those that he normally used on other files. He added that he was not in the habit of preparing working papers for expense items that did not require adjusting, that he was able to have the taxpayer and its representative accept his draft assessment, that the past audit of that taxpayer required nearly twice as much time as he was given to complete his audit, and that two of his managers had reviewed and approved his audit report.

175        He added that Mr. Joseph’s review was needless and was not credible and that Mr. Joseph failed to consult the Montreal TSO’s managers and learn about internal practices and directives in effect there.

e. Conflict of interest (kitchen counters)

176        The grievor pointed out that the evidence demonstrated that he had obtained his team leader’s approval before doing business with Corporation X and that he had paid for the kitchen counters in cash. According to him, the documents seized from Corporation X’s offices about delivering and installing the counters (Exhibit E-8), the invoice for the backsplash tiles, paid in cash (Exhibit F-1), and the fact that he had substantial lottery winnings in cash unequivocally supported his explanations about paying for the counters. Thus, the Agency could not conclude that he had breached its policies or its Code of Ethics and Conduct (Exhibit E-13) in light of the adduced evidence.

3. Conclusion

177        The grievor submitted that the fact that several things supporting the reasons alleged at the time of the termination were withdrawn at the start of the hearing, without any evidence being submitted about their respective importance in the Agency’s decision, justifies rescinding the termination.

178        He added that the Agency did not discharge its burden of proof with respect to the evidence and grounds that were maintained. He also stated that it relied on botched, misleading, and carelessly prepared reports. According to him, the Agency did not demonstrate that on a balance of probabilities, he committed the acts of which he was accused or that they justified imposing a corrective measure. In fact, the grievor did not suggest a lesser corrective measure than what the Agency imposed, suggesting that he was not guilty of any breach of conduct and that no disciplinary measure was needed under the circumstances.

179        In support of the positions put forward in his termination arguments, the grievor referred me to F.H. v. McDougall, 2008 SCC 53, Wallace v. United Grain Growers Ltd.,[1997] 3 S.C.R. 701, Kulczycki v. Aéroports de Montréal, PSSRB File No. 166-02-25766 (19950816), Bellavance v. Treasury Board (Human Resources Development Canada), PSSRB File Nos. 166-02-28380 and 218381 (19990205), Emsley v. Treasury Board (National Defence), PSSRB File Nos. 166-02-19905 and 20998 (19910726), and Flynn v. Treasury Board (Environment Canada), PSSRB File No. 166-02-23369 (19930209).

IV. Reasons

A. The termination

180        In this case, the Agency essentially terminated the grievor’s employment for five reasons, as follows:

a. because he placed himself in a conflict of interest by accepting a gift, in this case granite kitchen counters worth $3600, from a taxpayer that he had just audited;

b. because he conducted a careless audit;

c. because he accessed the Agency’s systems without authorization;

d. because he used the Agency’s electronic equipment and network inappropriately; and

e. because he committed an act of vandalism against an Agency manager.

181        According to the usual approach, I must analyze this termination case first by determining whether misconduct led to a disciplinary measure. If the answer to that first question is in the affirmative, then I must determine whether termination was an excessive measure in the circumstances. If the answer to that second question is also in the affirmative, I must finally determine what measure could have been imposed other than termination.

182        In my opinion, the fact that the Agency withdrew certain parts of the termination letter dated November 10, 2009, specifically the reference to accessing the tax information of individuals clearly related to organized crime in the third ground and the reference to distributing pornographic images in the fourth ground, is irrelevant under the circumstances. The fact that the Agency felt the need to withdraw those items, regardless of the reasons, and that it chose to proceed with the hearing while maintaining its position based on the remaining elements and grounds did not constitute a procedural defect that would invalidate the disciplinary measure. As I indicated earlier, the burden of proof rested on the Agency to demonstrate the facts justifying the grievor’s termination on a balance of probabilities, by presenting clear, coherent, and convincing evidence. One ground alone can be enough to justify a termination, and the fact that the Agency was unable to prove one or more elements or grounds cited to terminate the grievor’s employment was not necessarily fatal to its position.

183        Therefore, I propose to examine each ground listed in the termination letter of November 10, 2009, to determine if the grievor’s conduct gave rise to a disciplinary measure.

1. Conflict of interest (kitchen counters)

184        A priori, I cannot ignore the fact that the grievor held a position with a high degree of responsibility and trust. As a responsible employer, the Agency is not only entitled to expect a very high level of integrity and ethics from its AU-02 and AU-03 auditors, but also, it has a mandate and responsibility to. That is in part why the Agency’s Gifts, Hospitality, and other Benefits Policy (Exhibit E-14) and its Code of Ethics and Conduct (Exhibit E-13) contain provisions that specifically address gifts, hospitality, and other benefits as well as potential or apparent conflicts of interest. Clearly, a personal gift worth more than $50 from a taxpayer is strictly prohibited by those policies, unless accepting such a benefit is immediately reported in writing and is approved by the Agency’s senior management. Without such policies, it would be difficult, or even impossible, to preserve the Agency’s integrity.

185        Thus, it is important to determine whether the kitchen counters being delivered to and installed in the grievor’s personal residence represented a gift prohibited by the Agency’s policies. The fact that the value of the goods in question was more than $50 is not in question as the evidence demonstrated that it was $3600. Regardless of whether or not it was appropriate to do business with Corporation X, the issue in this case is whether the grievor in fact received a gift or whether he paid for the kitchen counters. He testified that he obtained authorization from his manager in advance to do business with Corporation X and that he paid the amount of $3600 for the kitchen counters. A serious assessment of all the evidence does not support that conclusion. In my opinion, the grievor’s testimony on the payment for the kitchen counters and on his manager’s approval is improbable and quite simply not credible.

186        First, as an experienced Agency auditor, the grievor was familiar with such transactions. He had doubts about the wisdom of doing business with Corporation X, since he felt the need to raise the matter with his manager. So, it is difficult to conceive that he paid cash for the counters in several instalments without ensuring that he obtained receipts or proof of payment. The evidence clearly established that the amount he claimed he paid, $3600, was from a list detailing the amounts owed for the materials and labour costs (Exhibit E-8), which indicates no amount for the applicable taxes. It is also difficult to ignore the fact that that transaction and the grievor’s payments were not accounted for in Corporation X’s books. In fact, no document was entered into evidence indicating that he made a payment for the counters.

187        Second, the grievor provided several different versions. Many significant inconsistencies were noted about the source of the cash and the number of payments. According to him, the evidence about his lottery winnings confirmed that he could easily pay for the purchase in cash. However, that statement raises more questions than it provides explanations. The evidence demonstrated that because of his lottery winnings, the grievor had substantial amounts of cash during the period in question (over $5000 between September 26, 2005, and October 20, 2005; Exhibits F-13 and F-14). Consequently, depending on the version I accept, why pay for a $3600 purchase in five payments of between $500 and $800 or three payments of between $1000 and $1600? The evidence also demonstrated that the grievor received additional lottery winnings of $3700 in December 2005 (Exhibits F-13 and F-14). Yet, he claimed that he used his children’s Christmas money to make the third payment. I also note that if I accept one of his versions, then that third payment would have been made at Corporation X’s offices. Thus, there was no reason he could not have withdrawn the necessary funds from his bank account on the way to the taxpayer’s offices. He never alleged or insinuated that he did not have the financial means to make the last payment of $1600 for the kitchen counters and that therefore he had to use his children’s money to pay his creditors.

188        Third, the grievor did not convince me that his team leader clearly and unequivocally approved his actions. He did not disclose the taxpayer’s name in question, he did not disclose the fact that he still had the taxpayer’s files and those of its shareholders in his filing cabinet, he did not disclose to Mr. Fratarcangelli that the Bell Centre box was for paid by the taxpayer who had provided and installed the kitchen counters (apparently preferring to continue concealing the taxpayer’s identity), he did not establish that he could not do business with another company in the Montreal area, he did not consult Mr. Fratarcangelli before accessing the tax information of Corporation X and its shareholders (24 times) after the counters were delivered to ensure that it was still appropriate given the specific circumstances of the transaction, and he did not provide proof of payment to his team leader or provide tangible evidence that he had paid for the kitchen counters. If it is true that Mr. Fratarcangelli wanted the grievor to conduct certain follow-ups about Corporation X after the audit was completed in February 2005, which the evidence did not clearly establish, and given that Mr. Fratarcangelli did not seem opposed to buying the kitchen counters if the grievor paid their market value and had completed his audit, it was essential that the grievor remind him that he was asked to follow-up on that same taxpayer and that he would need to take back the taxpayer’s physical files and continue to access its tax information for an undetermined amount of time. In the circumstances, in my opinion, the lack of disclosure raises questions about the nature of Mr. Fratarcangelli’s expressed or implied consent and cannot justify or validate the grievor’s conduct. In my opinion, the grievor’s attempt to convince me that he sought and obtained authorization in advance from management to do business with Corporation X was not credible and was dishonest.

189        I also note that the grievor agreed to attend a Montreal Canadiens hockey game in a Bell Centre box that was paid for by the taxpayer that he had just audited and whose tax files were still in his filing cabinet and that he continued to access that taxpayer’s tax information. Finally, if I accept the grievor’s final version about the payment terms, he still owed money to the taxpayer at the time of the Bell Centre event.

190        My opinion is that the grievor’s testimony on the payment for the kitchen counters and the approval from his manager was not consistent with the balance of probabilities that a practical and informed individual would immediately recognize as being reasonable under the circumstances of this case. Therefore, I agree that the Agency’s conclusion that the grievor did not pay for the delivery and installation of the kitchen counters is founded, that it was a serious breach of conduct that contravened its policies and code of ethics,and that it justified a severe disciplinary measure.

2. Careless audit

191        The Agency had the burden of demonstrating that misconduct or some breach occurred that justified imposing a disciplinary measure. However, when a grievor presents an argument justifying a misconduct or breach, such as the fact that auditors at the Montreal TSO did not use the work methods set out in the Agency’s audit manual and that the team leaders at that TSO tolerated that type of deviation, the grievor must then discharge that burden of proof, which was not done in this case. No credible documentary or testimonial evidence was presented to me that corroborated such a deviation from the audit manual.

192        Despite that fact, I cannot ignore the fact that Mr. Joseph did not usually review audits that other Agency auditors carried out, that it was the first time he was asked to conduct such a review, that he did not consult the grievor or any other auditor or team leader at the Montreal TSO during his review, that he did not personally consult the audit file for Corporation X for 1998 and 1999 or any of the grievor’s past audits, and that the grievor’s working papers contained a note that he had examined the taxpayer’s Visa statements to determine if the expenses were allowed or if they represented personal expenses. Therefore, it seems difficult to me in the circumstances to conclude that the grievor’s audit of Corporation X for 2002 and 2003 was careless. And even if I were to reach that conclusion, it would be reasonable to assume that it was a first careless audit in 22 years of Agency service since the Agency adduced no evidence to the contrary. In addition, no link was established between the allegedly careless act and any benefit that the grievor might have received in exchange. Therefore, it seems unreasonable to me to consider that ground to justify terminating the grievor.

193        Without necessarily concluding that the Corporation X audit was careless, it is difficult to qualify it as detailed, precise, or thorough. On one hand, it seems to me difficult to reconcile the grievor’s approach in that audit and the fact that he made 19 863 accesses to the accounts of 6128 different taxpayers while auditing at most 25 files between 2003 and 2008. On the other hand, a careless audit, which does not necessarily mean malicious intent, in my opinion did not justify the termination and should not be held against the grievor in the circumstances, particularly when the work methods an auditor uses are the same as usual and the work performance has always been deemed adequate. Had the evidence demonstrated that the work methods the grievor used had differed from those used by his colleagues or in his past audits, I might have concluded otherwise, but that was not what was demonstrated in this case. In the circumstances, it was a performance matter, nothing more.

194        Therefore, I conclude that the Corporation X audit, which the Agency qualified as careless, did not constitute misconduct leading to a disciplinary measure.

3. Unauthorized access to the Agency’s systems

195        A priori, I find it difficult to accept that the grievor’s thousands of accesses to thousands of taxpayers’ tax information between 2003 and 2008 can be justified or explained on the basis that he was sometimes asked to access such accounts when acting as a technical advisor or when occasionally helping Mr. Fratarcangelli identify at-risk files in the ARGO system. The fact that the grievor did not specify when, how often, or how many times he did so certainly contributes to that difficulty. It is also difficult to conceive that an auditor who is asked to conduct a limited number of audits per year would not have special authorization to allow greater access to the Agency’s systems as part of those additional duties. At least no evidence of such was presented to me. I also note that the two performance evaluations filed as evidence do not specifically mention those alleged additional duties (Exhibits F-10 and F-11).

196        Although I question the legitimacy of all those accesses and the grievor’s rather vague explanations, I am still not convinced that all those accesses were unauthorized, with the exception of a few that I will consider later. In my opinion, it would have been appropriate and fairer for the Agency to have given the grievor an opportunity to review the lists of unauthorized accesses during the investigation or before his termination. As he suggested, it seems plausible that the Agency was content to simply compare those accesses to the primary and secondary files assigned to him without considering the possibility that they might have been justified by his use of the ARGO system when helping Mr. Fratarcangelli identify at-risk files or in his duties as a trainer and technical advisor. It would also have been useful for the Agency to present me with a comparative analysis of the grievor’s accesses and those of other AU-03 auditors at the Montreal TSO or even of Mr. Fratarcangelli during the same period.

197        That said, I have no difficulty concluding that some of the accesses were unauthorized and inappropriate. Even if I were ready to accept that the vast majority of the grievor’s thousands of accesses between 2003 and 2008 were due to his workload, nonetheless, the fact remains that he did not deny accessing his personal tax information or that of his spouse, his tenants, his neighbours, and Corporation X and its shareholders after he had completed auditing that corporation. Nor did he provide a credible explanation in that sense. Those many accesses of taxpayer accounts were in no way related to his workload, were unauthorized, and clearly breached the Agency’s policies and directives.

198        The grievor attempted to justify his access to his account, his spouse’s, and his tenants’ by suggesting that he had done so randomly while experimenting with a new work method involving postal codes. He emphasized that he accessed only Option T, which provides no personal information. I do not find that explanation convincing for three reasons: (1), no documentary or corroborative evidence was submitted about that alleged new work method, and the grievor gave that explanation for the first time at the hearing; (2), the Agency’s Guide to the RAPID System for Benefit Programs Officers and Client Service Officers (Exhibit E-46) clearly states that Option T must be used only in an auditor’s work, which was clearly not done in this case; and (3), contrary to the grievor’s allegation, Option T includes personal information such as taxpayers’ telephone numbers and SINs. Clearly, a taxpayer’s SIN is highly confidential personal information. The grievor was in no way entitled to consult his tenants’ SINs since they were not and could not have been related to his workload. In addition, his tenants were entitled to expect that the Agency would protect the confidentiality of that information.

199        The grievor’s explanations justifying his access of his neighbours’ tax information was even less convincing or consistent. In his arguments, he explained his access by the fact that he had had doubts about his neighbours’ lifestyles. In that sense, he pointed out that he found it strange that they never seemed to leave home; he questioned their income source, and he was, by nature, unusually curious about others’ affairs. Furthermore, none of the many witnesses corroborated his allegation that several Agency auditors did the same. Once again, he was in no way entitled to consult his neighbours’ tax information, including their incomes, income sources, and employers’ names since that was not part of his workload. On one hand, the Agency’s policies expressly prohibit such conduct. On the other hand, the taxpayers in question were entitled to expect that the Agency would protect the confidentiality of their personal information. As for the grievor’s allegation that he did so solely to ensure compliance with the Income Tax Act, it is difficult to reconcile that argument with the fact that he did not seem concerned by the fact that the amounts attributed to delivering and installing his kitchen counters (Exhibit E-8), particularly for the labour, did not include any references to or mentions of the applicable taxes.

200        According to the grievor, Corporation X’s files were still in his filing cabinet two years after the end of his audit because Mr. Fratarcangelli told him that he “[translation] wanted to see 2004” for that taxpayer. He provided the same explanation for accessing the tax information of Corporation X and its shareholders on several occasions after completing the audit. That explanation is simply not credible. First, Mr. Fratarcangelli, who testified at the hearing, did not corroborate it. The grievor did not even ask him that very relevant question. Second, the grievor provided no clarification about the meaning of the alleged comment (“see 2004”). No evidence demonstrated that Mr. Fratarcangelli asked the grievor to obtain the taxpayer’s physical files and regularly access its tax information after he completed the taxpayer’s audit or that he asked the grievor to conduct a subsequent audit of the taxpayer or conduct any follow-up. The grievor’s explanations on that access are improbable and not credible. An assessment of all the evidence convinced me that he was never asked to conduct any follow-up with respect to Corporation X and its shareholders and that his numerous accesses to their tax information were inappropriate, unauthorized, and contrary to the Agency’s policies and directives.

201        In my opinion, those acts adversely affected the Canadian tax system and constituted a serious breach of conduct that justified a severe disciplinary measure.

4. Inappropriate use of the Agency’s electronic equipment and network

202        It is important to remember that the grievor did not deny the Agency’s allegations against him and that he admitted to contravening its policies and directives. Instead, he offered explanations aimed at minimizing the scope and impact of his acts.

203        As for the pornographic images, the grievor testified that they were on his laptop, and possibly on his H drive, because of updates, after his brother visited his home in 2001 or 2002. His brother allegedly inserted a diskette containing the images in question on the grievor’s laptop so they could look at them together. According to the grievor, after they looked at the images, he accidentally hit the “save” command when trying to take the diskette out of his laptop. According to him, that is why the images were on his laptop. He added that it was the only time he viewed the images and that he never showed or distributed them to anyone. I find it difficult to assign a high level of credibility to his testimony on this point for two reasons. First, in his detailed letter of February 26, 2010, to the Agency’s commissioner, the grievor provided a completely different explanation. Second, I take judicial notice that more than one step is required to initially save a document, image, or file to a personal computer. First, the “save” option must be selected. Then, the folder to save it in must be determined. Finally, a name or title is assigned to the document. Thus, I assign no credibility to the grievor’s testimony about downloading and viewing those images.

204        All the evidence revealed instead that the grievor knowingly downloaded those images to his Agency laptop, that the images then ended up on the Agency’s electronic network, that he viewed them, that he and Agency employees who had access to that drive could have viewed them at any time, and that his acts were clearly breached the Agency’s policies.

205        As for the unauthorized software applications, although they took up little space on the Agency’s network, and the grievor never received a warning about installing or using them and stopped using them in 2002 or 2003, nevertheless, Agency policies prohibited downloading them.

206        In my opinion, the grievor’s inappropriate use of the Agency’s electronic equipment and network constituted misconduct that would lead to a minimal disciplinary measure. However, given the grievor’s other breaches of conduct, those acts can easily be considered aggravating factors.

5. Act of vandalism

207        The grievor did not deny vandalizing an Agency manager’s vehicle in an Agency parking lot. That conduct was unbecoming of a member of the public service, and it cannot be tolerated. In my opinion, it could have resulted in a disciplinary measure, but the Agency chose instead to consider it an aggravating factor.

208        In my opinion, the Agency was completely entitled to consider that action an aggravating factor when deciding the appropriate disciplinary measure in the circumstances.

6. Conclusion

A. The termination

209        As I already indicated, the grievor held a position with a high degree of responsibility, the duties of which included auditing businesses with elevated incomes and accessing personal and confidential tax information. The position also involved a high degree of trust. The Agency is entitled to expect its AU-03 auditors to demonstrate a very high level of integrity and ethics.

210        All the evidence demonstrated that the grievor’s acts constituted a serious breach of conduct that broke the relationship of trust. He knowingly breached the Agency’s policies and refused to acknowledge any responsibility for the majority of his alleged acts, despite considerable evidence demonstrating flagrant breaches. Therefore, a severe measure had to be imposed in this case, and in my opinion, termination was unquestionably the applicable disciplinary measure, even though the Agency was unable to prove certain elements or grounds that led to it. Nevertheless, I feel that the other alleged and proven offences are serious enough on their own to warrant termination. The grievor’s dishonest and inappropriate acts were fundamentally incompatible with the obligations of an AU-03 Agency auditor. His refusal to acknowledge any responsibility, other than for the pornographic images and the act of vandalism, and his careless attitude about the impact of his actions on his work as a tax auditor make it impossible to re-establish the trust required in an employment relationship.

211        I must also emphasize that the parties submitted about 20 decisions in support of their arguments. Although there were sometimes similarities between the cited jurisprudence and this case, they are distinct cases in which the context and facts often differ. Although I consulted those decisions and have sometimes applied some of their general principles, I did not believe it would be useful or necessary to refer to them.

212        I find that the Agency established that the grievor’s conduct justified a disciplinary measure, particularly given the fact that he placed himself in a conflict of interest by accepting a gift worth $3600 from a taxpayer, that he carried out unauthorized accesses of the Agency’s systems, and that he used the Agency’s electronic equipment and networks inappropriately, and I consider that position justified in the circumstances.

213        I conclude that termination was not an excessive measure in the circumstances of this case since the grievor’s conduct clearly broke the relationship of trust. Given that conclusion, I do not need to identify an alternative remedy to what the Agency imposed.

214        The grievor’s termination grievance must be dismissed.

B. The suspension

215        An adjudicator does not have jurisdiction to hear a grievance about a suspension pending an investigation if the evidence reveals that the suspension was administrative in nature, not disciplinary. The law is clear on that point.

216        In the circumstances, in my opinion, it is appropriate to deal with this issue separately from the termination grievance, despite the results of that grievance.

217        In that sense, the evidence demonstrated that Mr. Chouinard could not terminate the grievor in April 2009 but that he was faced with serious allegations that could have compromised the security of taxpayers’ tax information and jeopardized the public trust in the Agency. He needed to obtain additional facts and information, including the conclusions of the internal investigation and the review by Mr. Joseph, as well as explanations from the grievor, before making a final decision about the employment relationship. It was entirely reasonable to assume that a long suspension without pay or a termination could be imposed if the allegations proved true. Therefore, suspending the grievor from his duties without pay during the investigation was reasonable under the circumstances. And the grievor did not present any evidence suggesting that the Agency deliberately or indifferently prolonged the duration of the investigation.

218        I am convinced that Mr. Chouinard did not intend to punish the grievor when he imposed the suspension without pay pending the investigation and that it was not disciplinary but administrative instead. In my opinion, Mr. Chouinard had legitimate grounds to do what he did, and he acted in good faith.

219        I share the Agency’s stance that the grievor did not discharge the burden of demonstrating that Mr. Chouinard’s decision to suspend him pending an investigation constituted a disguised disciplinary measure to punish a breach of discipline or misconduct. In fact, no evidence was presented in that sense.

220        Since I concluded that the grievor’s suspension pending the investigation was administrative and not disciplinary, I conclude that the grievance filed against that suspension does not fall under the parameters of section 209 of the PSLRA and that it must be dismissed for lack of jurisdiction.

221        For all of the above reasons, I make the following order:

V. Order

222        The grievor’s grievances are dismissed.

223        I order files 566-34-4181 and 566-34-4182 closed.

March 11, 2016.

PSLREB Translation