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HomeMy WebLinkAbout1992-0829.Belisowski.94-03-21 .~!J l.f ONTARIO EMPLOYES DE LA COURONNE 'I; CROWN EMPLOYEES DE L'ONTARIO 1111 GRIEVANCE COMMISSION DE . SETTLEMENT REG~EMENT BOARD DES GRIEFS 180 DUNDAS STREET WEST SUITE 2100 TORONTO ONTARIO. M5G lZ8 TELEPHONEITEUipHONE (~76) 326-1388 180 RUE DUNDAS OUEST BUREAU 2100 TORONTO ,(ONTARIO) M5G lZ8 FACSIMILE ITELECOPIE (416) 326-1396 8~9/92 \ IN THE MATTER OF AN ARBITRATION Under THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT Before THE GRIEVANCE SETTLEMENT BOARD BETWEEN OPSEU (Belisowski) Grievor - and - The Crown in Right of ontario (Ministry of Financial Institutions) Employer BEFORE B. Fisher Vice-Chairperson P Klym Member M O'Toole Member FOR THE G. Le~b GRIEVOR Grievance Officer ontario Public Service Employees Union ( FOR THE S Patterson EMPLOYER Counsel Legal Services Branch Management Board Secretariat HEARING March 26, 1993 september '23, 29, 1993 \ \ ">- '- \ .t~ ~ .' - 2 - This is a discipline case involving a written warning At first, the Employer imposed a one day suspension; however, they I later reduced it to a mere written warning The Grievor was employed at the ontario Insurance Commission ( as a Principal Examiner His job was to perform the annual review on a number of insurance companies, including the 1991 review for a company called the York Fire and Casualty Insurance Company ( "York Fire" ) The purpose of this review was to determine compliance with the Insurance Act and its regulations TQe essence of the Employer's position was that the Grievor failed to discover $170,000\ 00 of "related party transactions," which was part of his duties as a Principal Examiner The Grievor reported to the Employer that he had in fact looked at the relevant documents, which the Employer asserts disclosed the questionable related party transactions By reporting that he had in fact looked at the relevant documents but not picked up the problem, the Employer asserts that either the Grievor (a) did not review the records and therefore lied in his report, or \ (b) reviewed the records in a negligent fashion ~ In either case, the Employer asserts that discipline was appropriate ;~l ! Ii: \ - 3 - \ Having reviewed all the evidence, certain facts become clear 1 It was part of the Grievor's job to report on related party transactions 2 In fact, the Grievor discovered numerous third party transactions on the York Fire file and duly reported them 3 He did not find at least three (3) related party transactions 4 The evidence of those tqree unreported related party transactions was available to the Grievor at the time he did his review and was' contained in the papers and documents he said he did review 5 The Grievor was well aware that York Fire was a problem case; in fact, he had recommended in March of 1992 that York Fire be prosecuted as he felt that the owners were "looting" the company 6 When the Grievor was assigned the field examination for the York Fire review, he asked for three examiners to be assigned for four weeks His supervisor, Mr Persaud, '- ,.... , .1 - 4 - "- considered the request, but denied it as he felt it was not necessary and because of the Ministry's lack of available resources at the time. 7 In his field notes of the York Fire review (Ex 18), the Grievor noted a related party transaction of $120,000 00 relating to "Additional Management Fees to C I G " However, in his Final Examination Report he failed to mention this particular related party transaction This was one of the transactions he was disciplined for failing to put in the Final Examination Report 8 The Grievor produced an Interim Examination Report on September 23, 1991, in which he listed among those items completed, "related parties " 9 Once this Interim Report had 'been completed, Mr Persaud asked the Grievor to return to York Fire to carry out a I special examination on related party transactions 10 The Grievor did return to York Fire for another four or five days to complete his review His field notes indicate that he reviewed the relevant transactions with C I G , a reiated company to York Fire These notes make no mention of the $120,000 00 in management fees ., ( r~ - 5 - previously reported by the Grievor (see note 7), but did report another $50,000 00 in management fees between these companies 11 On October 23, 1993, the Grievor then prepared his Final Examination Report on York Fire. In this r~port, he referred to the fact that he reviewed the records of C I G He also listed in a schedule those specific related party transactions which he discovered He did not list the two transactions with C I G (the ) $120,000 00 and the $50,000 00 payments for management fees) , although his field notes clearly indicate he was aware of these transactions before writing the Final Examination Report Nowhere in this report did the Grievor indicate that he was unable to properly complete the report que to a shortage of time, additional personnel or other resources The Grievor never told Mr Persaud that he was unable to complete the task properly due to lack of time or resources 12 Based on the Grievor's Final Examination Report and a hearing called by the Commissioner of Insurance, York Fire ultimately did repay those improper amounts I identified by the Grievor; however, they did not pay the I ~ ~ ~~ j - 6 - $170,000 00 which the Grievor did not identify in his Final Examination Report 13 Subsequent to the hearing before the Commissioner of Insurance, the auditing firm of Coopers & Lybrand < reviewed the applicable records and identified the $170,000 00 in related party transactions that the Grievor had failed to put in his Final Examination Report 14 When Mr Persaud ?aw this Coopers & Lybrand Report, it was the first time that he became aware of the missed ( related pa~ty transactions When he asked the Grievor why he had not referred to these amounts in his Final Examination Report, the Grievor said that he should not be blamed for missing "small amounts" when he had found over $3 8 million in improper transactions 15 A review of the Grievor's time dockets showed that in 1991, the Grievor spent 72 working days on the York Fire matter 16 Subsequent to the discovery of the $170,000 00 in unreported related party transactions, Mr Persaud I ~. - 7 - reviewed the documents which the Grievor claimed to have reviewed and easily found the questionable transactions " 17 In his testimony, the Grievor admitted that he knew of the $170,000 00 related party transaction, but did not pursue it ~s it was a low priority item and he simply did not get around to it It is clear from the evidence, especially the Grievor's own field notes, that he did review the C I G records and in fact was aware of the two questionable related party transactions It is also clear that he failed to include them in his Final Examination Report, the result of which was that the Commission was unable to ! recover those monies from C I G so they could be repaid to York i Fire Therefore, I find that the Grievor did not lie in his report when he said he reviewed the C I G records; however, his failure to include his complete findings in the Final Examination Report was clearly negligent. The Grievor's excuse, of insufficient staffing carries no weight for two reasons First, he in fact did find the transactions} thus, no additional help was needed on this point Second, he did not qualify his Final Examination Report in any fashion by saying that it was incomplete due to not having enough time or resources to properly complete the task j t' ,- 1" '- '\ - .8 - The Grievor's second excuse, that $170,000 00 was too small a problem to concern himself with, illustrates a. very questionable attitude towards his job responsibilities It strikes this Board that $170,000 00 is certainly not an amount of money that is trivial or insignificant In any event, the Union presented no evidence to show that the Grievor was permitted to ignore transactions of that magnitude and we therefore find that it was part of his job to find and pursue issues of this nature, even if there is only "a mere $170,000 00" in question As a written warning is the lowest form of formal discipline, there is no issue as to mitigation of the penalty The grievance is therefor dismissed Dated at Toronto this 21st day of March , 1994 BARRY B FISHER - Vice Chair ~ Addendum attached. - Union_ Me!l\ber , ~ 1- Q~ , . O'TOOLE - Employer Member ~ I ^ - \ GSB 0829/92 ONTARIO PUBLIC SERVICE EMPLOYEES UNION (BELISOWSKI) ADDENDUM OF UNION NOMINEE I agree that the grievor can be faulted for his failure to record in his final report that he did not have enough time to thoroughly review all the related party transactions The testimony before us was that, while doing the final investigation, he received a call for Mr Persaud telling him to wrap up the examination by the following day Unfortunately, because of the omission of this caveat from his final report, his supervisors assumed that they had complete .. information regarding the related party transactions They apparently felt some embarassment later when the auditing firm identified this 170,000 in related party transactions and thi~ discipline resulted I would point out that the one failure of the grievor regarding completeness of his final report contrasts with the diligence he showed in alerting his supervisors to the problems at York Fire and in his pursuit of the problems. As early as March 6, 1991 he flagged the service irregUlarities found at York Fire and recommended that the superintendent take immediate regulatory measures and that the ontario Securities commission be informed Mr Persaud testified that, when a Company fails to satisfy minimum assets requirements, the superintendent is obliged to bring this to the attention of the Commission and this could give rise to a Commission hearing From the evidence before us, ft appears to me that, rather than following this course, the Deputy Superintendent and the Superintendent kept giving extensions to the Company and this extra time resulted in further irregularties in related party transactions In the end, some blame had to be assessed. The grievor was identified because it could be shown that he had made an error or omission in his report Perhaps, in future the grievor should cover himself by ensuring that he make clear in writing in his reports, the fact that he did not have sufficient time to complete all matters required, if he should feel this to be the situation. P Klym PtLr- -~ ~~