Worker had prior breach of code of conduct
The Canadian Industrial Relations Board has upheld the dismissal of a Bank of Montreal (BMO) worker who manipulated referrals for her own gain – the worker’s second breach of the bank’s code of conduct in less than two years.
The worker was hired by BMO in 2012 and she eventually became a financial planner (FP) within the specialized sales group at a branch in Montreal. In that role, she reported to the vice-president, financial planning.
In 2017, the worker received a disciplinary warning for breaching the banks’ code of conduct and policies. The warning was for processing a withdrawal from a GIC investment for a colleague’s aunt at the request of the colleague, without validating the proper, legal documents and carrying out due diligence. The warning stated that “under no circumstance will conduct as outlined above or anything similar be tolerated.”
In May 2019, BMO’s regional vice-president, financial planning, for Eastern Canada found irregularities at the worker’s branch. The data showed an abnormally high number of referrals to a single product, BMO InvestorLine. He suspected that the worker was profiting from a scheme involving financial services managers (FSMs) to manipulate sales statistics of client referrals for BMO InvestorLine accounts.
Internal investigation
The worker denied using invalid referral practices, but on May 15, BMO’s investigative and security services department launched an investigation into referral practices at the branch. The investigator interviewed the worker two months later, after which BMO placed the worker on administrative leave with pay for the balance of the investigation.
After the investigator told her the reason for the interview, the worker said that she had met with all her clients, sometimes with a personal banker with whom she was collaborating, and she coded the personal bankers on InvestorLine accounts. She said that she saw no issues with coding a referral to the personal banker if they had helped her, even if they hadn’t spoken to the client.
The worker acknowledged that she knew that, when in doubt about the eligibility of a referral, she was to ask her boss for assistance.
The investigator determined that the worker asked colleagues who were personal bankers to create referrals for clients whom they had never met. She also made unwarranted referrals to colleagues and one colleague coded the opening of all InvestorLine accounts to the worker, even when the worker was absent. As a result, the worker’s entire sales volume from InvestorLine came from referrals from three FSMs at her branch and she never performed a single sales process herself with clients in her portfolio.
In addition, the worker inappropriately used BMO’s computer systems to inappropriately access her personal banking profile and her sister’s file without a business reason.
Investigation found misconduct
On July 26, the investigator presented his findings to the regional vice-president, who then consulted BMO’s HR and labour relations departments. The report was sent to the labour relations and HR departments, as well as the business unit.
After considering the nature of the misconduct and the worker’s prior disciplinary warning, BMO decided to terminate the worker’s employment for knowingly breaching BMO’s policies and procedures and code of conduct, effective Aug. 8. The termination letter indicated that she manipulated the client referral systems, accepted that some of her colleagues did the same to inflate her productivity results, and wasn’t fully forthcoming in the investigation interview.
The following week, the worker’s lawyer sent a letter to BMO alleging psychological harassment by the worker’s boss. BMO replied that it wanted to investigated the allegations and asked if the worker would be available to provide her version of the facts. It also sent the worker’s termination letter.
The worker’s lawyer responded with an accusation that that the termination was a reprisal for the harassment complaint. The worker filed a complaint of unjust dismissal, alleging that the internal investigation was mishandled, the decision to dismiss her was made without her version of the facts, and BMO dismissed her as a reprisal for filing a psychological harassment complaint against her boss.
The board noted that in the banking sector, the bond of trust between the institution and clients was crucial, so bank employees were held to a high standard of conduct and banks had to act promptly and firmly to breaches of policies and codes of conduct.
Code of conduct
BMO’s code of conduct stipulated that FPs were compensated only for transactions for which they followed the sale process and not client referrals that were “strictly reactive” – for which there was no need to set up a profile for the client to understand their financial situation, meaning the FP had to meet with the client and identify their financial potential in order to determine any compensation for a transaction.
FPs were also required to “comply with the strictest ethical standards.”
At the hearing, the worker admitted that she had had the opportunity to present her version of the facts to the investigator during the interview and that she “probably” could have added some elements had she wanted to. She also said that she had accessed her sister’s bank account through the employee portal instead of the client portal.
In addition, the worker said that she didn’t raise any issues with her boss at the investigation interview.
Given the evidence from the investigator and the worker’s admissions, the board found that the worker did have the opportunity to share her side of the story, and it was likely that she saw her colleagues’ statements in the investigation that would allow her to respond to them. The board found that the investigation process was carried out properly and fairly and the worker was “less than honest” in her participation.
Reasonable investigation
The board also found that the investigation’s findings were reasonable and the evidence pointed to the worker “knowingly and systematically” receiving unwarranted referrals that led to unwarranted financial benefits from BMO. In addition, the findings that the worker accessed the accounts of her and her sister through the employee portal were substantiated by the worker herself.
As for the reprisal allegation, the board noted that the evidence indicated that the worker’s boss was not involved in the investigation or the decision to dismiss the worker, and the worker’s harassment complaint and reprisal allegations were communicated to BMO after the investigation had already been launched in response to the regional vice-president’s concerns. As a result, there was no causal relationship between the worker’s complaints and BMO’s investigation and dismissal decision, said the board.
The board determined that the worker’s misconduct was significant, as FPs were investment experts that hold professional licenses and work autonomously. They must follow strict rules. The worker breached these rules and the high level of trust required for her to do her job, and she received financial benefits for it, said the board.
The board added that the misconduct was repeated numerous times and was her second breach of the code of conduct in 18 months. She should have been aware that her employment was at risk with a second breach, said the board.
The board determined that termination was appropriate and dismissed the complaint. See Kubicki and Bank of Montreal, Re, 2022 CIRB 1048.
