There is a long line of wrongful dismissal decisions that have held that bank employees are to be held to a higher standard of trust than other employees – a level of trust akin to that normally applied to fiduciaries. The practical implication of this jurisprudence is that an employee working for a financial institution is more likely to be terminated for cause for an act of misconduct in situations that would have only justified a lesser form of discipline, such as a warning letter, if the employee had worked in a different industry.
For the reasons set out below, your intrepid employment lawyer will argue that bank employees should not automatically be held to a higher standard of trust that employees working in other industries.
An recent example of a decision that has found that financial sector employees are to a higher standard is Steel v. Coast Capital Savings Credit Union, 2013 BCSC 527, (affr’d) 2015 BCCA 127 where the trial judge wrote at para. 24:
A relationship of trust has been found to be particularly critical in the banking industry where employees are held to a higher standard of trust than employees in other commercial or industrial undertakings.
Similarly, in Rowe v. Royal Bank of Canada (1991), 1991 CanLII 912 the trial judge expressed the view at para. 54 that: “Banking is a business where caution is the norm and where trust and confidence by the employer in the employee are essential.”
This reasoning behind these decisions has not gone unchallenged. For example, although the British Columbia Court of Appeal upheld the finding of cause in Coast Capital Savings, Mr. Justice Donald, writing in dissent, wrote at para. 13:
This leads me to the standard of trust vis-à-vis financial institutions. It would appear that the judge found the misconduct to be more egregious because of this element and so it affected the balance. In my view, unless the impugned behaviour involves money or the affairs of a client, the fact that an employer is a bank or a credit union is irrelevant. Every business organization large enough to have an IT department is entitled to impose reasonable rules for confidentiality and privacy. The standard of trust is not elevated simply because the business is financial in nature. In the instant case, the matter was an internal administrative issue: parking spots. The integrity and probity of the respondent as a credit union could not have been compromised by the appellant’s actions.
Significantly, the conclusion that bank employees are automatically held to a higher level of trust also appears to conflict with the Supreme Court of Canada’s decision in Royal Bank of Canada v. W. Got Associates Electric Ltd.,  3 SCR 408, 1999 CanLII 714 (SCC)
In W. Got the Supreme Court of Canada reviewed the decision of the trial judge to order RBC to pay $100,000 in punitive damages because RBC had misled a Master by tendering a misleading affidavit in support of an ex parte motion. The trial judge, in support of the decision to award punitive damages, had written at para. 170 of the trial decision:
The major chartered banks are not a collectivity of retailers responsible only to their shareholders for the maximization of profits. They are looked to by the citizenry as honest, trustworthy, law-abiding leaders of the business community. The citizenry expects the ethics of the chartered banks to be above reproach and above what might be the dictates of “the bottom line”. Any shocking failure on the part of any of these banks to meet those expectations may be expected not only to harm those directly affected by such conduct, but to cause cynicism and distrust on the part of present or potential borrowers, depositors and shareholders. Bad faith and law-breaking by a major chartered bank cannot but damage the fabric of Canada’s banking system and hence the country’s potential for prosperity and economic well-being.
Although the Supreme Court of Canada upheld the award of punitive damages against RBC it rejected the trial judge’s conclusion that “courts are entitled to expect honest behaviour from the major chartered banks”. Instead, the Court wrote:“we would not endorse the suggestion that the bank could be subjected to a higher standard of scrutiny than the average commercial litigant because of its privileged condition in Canadian society.”[emphasis added] (see paras. 27 and 28)
The language used by the trial judge that was rejected by the Supreme Court of Canada in W. Got could have easily been the closing submissions of a lawyer representing a Canadian bank at a wrongful dismissal trial arguing that the bank has cause to terminate the employee.
It is fundamentally inconsistent to hold bank employees to a higher standard of trust than employees working in other industries when the law does not hold Canada’s financial intuitions to a higher standard than other commercial enterprises.