The City of Nanaimo, a medium sized BC community of 170,000 residents employed Victor Mema as its CFO for 3 years from 2015 to 2018 when he was dismissed for cause related to misuse of the City’s credit cards. Mema was a Black person from Zimbabwe.   5 years after his termination the Chair of the Human Rights Tribunal found his race was a factor in his termination and awarded him lost wages of $583,413.40 (after deducting some portion for mitigation!), $50,000 as compensation for injury to dignity, feelings and self-respect, $10,150.04 for expenses and post judgment interest.

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The decision represents in my view a marked departure from the usual findings of a violation of the Code that all employers, especially municipal and public sector employers should note.

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Decision - Mema v City of Nanaimo

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The decision is 107 pages and delves into the facts in great detail.  But the City would have known from the first 5 pages of the Award that it was in trouble.
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The Tribunal spends the first 4 pages analyzing the concept of anti-Black racism:

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[6] This case alleges anti-Black racism in a predominantly White workplace, in which Mr. Mema was one of very few Black employees. The social context of anti-Black racism in Canada is a critical element. I take notice that, as Mr. Mema submits in argument, “Black people can be treated adversely in the workplace because of a conscious or unconscious stereotype of Black people being criminals, dishonest, of questionable moral character or poor.”

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It concludes in the opening section:

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[12] Ultimately, I have applied the above in my consideration of whether the evidence as a whole could support an inference that, on a balance of probabilities, Mr. Mema’s protected characteristics factored into the City’s suspension and termination of his employment.

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Evidence and Findings of Fact

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It is not possible to review in any detail in this article the extensive analysis of the facts and findings of the Tribunal that span almost 70 pages and indeed it is difficult to fully summarize the various findings. Although the findings are important the focus of this article is the legal analysis of discrimination under the Code. Anyone who wants to really understand the impact of this decision should take the time to read the section on “EVIDENCE AND FINDINGS OF FACT” pages 9 through 76. We will summarize the key findings as follows

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All employees who had use of corporate credit cards (referred to as P-cards) were required to sign a P-Card Agreement which prohibited personal use.  The P-Card Agreement included the following provisions:

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3. I understand that under no circumstances will I use the [P-card] to make personal purchases. Failure to do so could be considered as misappropriation of City funds. Failure to comply with this Agreement may result in either revocation of my user privileges or other corrective action, up to and including termination of my employment.

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4. I agree that should I violate the terms of this Agreement and use the [P-card] for personal use or gain, that I will reimburse the City for all incurred charges and any fees related to the collection of those charges

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The Tribunal found however that:

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[44] In practice, however, some personal use of P-cards was accepted. Where someone used their P-card for personal expenses, they were expected to indicate that expense as personal on their P-card statement and reimburse the City. There were no guidelines for the timelines for such repayment, but most people repaid promptly.

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Mr. Mema in his role as CFO had to approve other employees’ P-Card expenses.  He noticed that some employees would indicate personal expenses and would reimburse the City promptly.  Notwithstanding his role as CFO Mr. Mema concluded that the City condoned this practice and therefore he used his P-Card for personal use.  He knew the practice had to be updated as it clearly was not good practice but concluded that while “it may not have been good practice it was the practice at the City.  Notwithstanding his conclusion it was a bad practice he took no steps to amend the policy when he became CFO.
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However unlike other employees Mr. Mema did not repay his personal expenses promptly.  Unfortunately, the CAO who herself had a dispute with the City simply approved Mr. Mema’s personal expenses and sent them to the finance staff for processing.
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This then became a major problem for employees in the finance department as Mr. Mema continued to rack up large amounts of personal expenses and would not repay them.
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The decision outlines the serious problems at the City at the time.  By 2016 the acrimony between the CAO and the Mayor had escalated to the point where the City paid $10,000 for the CAO to get her own legal advice regarding:

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alleged defamation, bullying, harassment and discrimination by the Mayor and a Councillor, after Council’s directing them to “work collaboratively and respectfully” with Ms. Samra [the CAO]”

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Fast forward to the point where certain staff in the finance department make formal complaints about what they saw as abuse by Mr. Mema and the CAO of the P-Card policy.  The City engaged auditors to review the P-Card practices and filed its Report.
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The finance staff filed a Serious Misconduct Report regarding Mr. Mema.  Broadly the allegations were:
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1. Mr. Mema began using his P-card for personal purchases in March 2016;

2. Since then, in total, he made 70 personal transactions totaling $14,148.97;

3. He was aware that the cardholder agreement prohibits personal use of the Pcard;

4. Mr. Mema’s personal use of the P-card meets the definition of “serious misconduct” because it constitutes “unauthorized and inappropriate use of the City’s assets”,

5. In September 2017, DD and Ms. Mercer reported Mr. Mema’s use of the P-card to the City’s regular auditors, under s. 172 of the Community Charter;

6. Repeated attempts were made to have the funds repaid;

7. Mr. Mema issued a cheque to the City that was ultimately returned NSF;

8. On February 17, 2017, “the City of Nanaimo began a $500 biweekly payroll garnishment to begin to repay the amount owing”;

9. Around the same time, the City of Nanaimo began to pay Mr. Mema $600 per month as a “vehicle allowance”. Ms. Slater alleged that the CFO position requires very little travel for business, and that she did not have any details on how this was authorized;

10. All of Mr. Mema’s P-card statements were approved by Ms. Samra;

11. Ms. Samra disciplined Ms. Mercer and DD when they brought Mr. Mema’s personal P-card purchases to her attention;

12. Ms. Slater was concerned that Mr. Mema and Ms. Samra were using their “management override capabilities” to authorize payments and expenditures for each other. Ms. Slater noted the $16,922.50 payment to Ms. Samra on for the Samra Legal Invoices and another amount for the 2017 bonus payment to Mr. Mema; and

13. Mr. Mema requested that Mr. Mloyi be granted access to the banking system

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Mr. Mema was first suspended and then ultimately terminated.   A key problem at the City were numerous leaks of confidential information to the media.  Mr. Mema first found out about the Misconduct Report when a radio reporter contacted him asking about his suspension.

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Legal Analysis

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The Tribunal summarizes the applicable law of discrimination under the Code:

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[281] In a human rights complaint, the burden to establish that discrimination has taken place rests with the complainant. It is not up to the respondent to prove that they did not discriminate: Heyman v. Saunders (No. 2), 2010 BCHRT 88, at para. 6. A complainant is required to prove a case of discrimination on a balance of probabilities. If the complainant is successful in establishing a case of discrimination, the burden shifts to the respondent to justify its conduct. If the complainant fails to prove a case of discrimination, then there is no breach of the Code…
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[282]  In order to establish a case of discrimination, Mr. Mema must prove that he experienced an adverse impact regarding his employment and that his ancestry, place of origin, race or colour was a factor in that adverse impact: Moore v. British Columbia (Education), 2012 SCC 61, para. 33. There does not need to be an intention or motivation to discriminate: s. 2 of the Code. One’s protected characteristics need not be the sole or even the overriding factor in the adverse impact experienced; they need only be a factor…
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[283]  In this case, there is no dispute that Mr. Mema has the protected characteristics under which he filed this complaint. He is Black and was born in Zimbabwe. There is also no dispute that he suffered an adverse impact when he was suspended and later terminated from his employment, following the filing of the Misconduct Report.

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What makes this case interesting and scary for employers is the analysis the Tribunal considered in finding discrimination in this case:

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[284] The issue I must decide is whether there is a connection between Mr. Mema’s protected characteristics and the City’s suspension and termination of his employment. This is a question of fact for the Tribunal to decide after a review of all of the evidence: Stewart v. Elk Valley Coal Corp., 2017 SCC 30 at para. 5. Aside from the perceptions of the witnesses including City Councillors and employees, there is no direct evidence that Mr. Mema’s protected characteristics were a factor in the City’s decisions. Rather, this is a connection that can only be made from drawing an inference. [emphasis added]

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The Tribunal rejected what it said was the City’s arguments that there was no evidence of any connection between the decision to terminate and any prohibited ground.  It stated:

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[288] To the extent the City is arguing that discrimination can only be established by direct evidence, this approach is inconsistent with the prevailing jurisprudence, specifically in respect of race-based discrimination. In fact, the jurisprudence is express in highlighting that such discrimination is often proven precisely from drawing inferences. The Tribunal made this point in Kennedy, developing it further in Radek v. Henderson Development (Canada), 2005 BCHRT 302 [Radek]. In Radek, the Tribunal acknowledged that discrimination will more often be proved by circumstantial evidence and inference; and that subtle unconscious beliefs, biases and prejudices usually inform racial stereotyping, which can be inferred from circumstantial evidence.

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[289]  This Tribunal has more recently articulated the approach to be taken in the context of race discrimination in Campbell v. Vancouver Police Board (No. 4), 2019 BCHRT 275 [Campbell] and Francis. I adopt the Tribunal’s statements in Campbell at paras. 102 – 105, regarding the subtle, pernicious nature of racial discrimination, with most racial discrimination complaints turning on an inference. There, the Tribunal said that (at para. 103): an inference of discrimination may arise “where the evidence offered in support of it renders such an inference more probable than the other possible inferences or hypotheses”: Vestad v. Seashell Ventures Inc., 2001 BCHRT 38 at para. 44; Abbott at para. 31. In this case, the question is whether an inference of discrimination is more likely than the VPB’s explanation for the officers’ conduct. In making this assessment, it is not necessary that the officers’ conduct be consistent only with the allegation of discrimination and not any other rational explanation…

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[291]  I similarly adopt this Tribunal’s approach in Francis at paras 284 – 289, as cited by Mr. Mema, where the Tribunal emphasized the importance of a contextual approach to race discrimination, noting that several contextual factors informed the analysis of the inferences that could be drawn from the facts in that case. As the Tribunal explained at para. 284: Establishing what constitutes a reasonably objective observer in the context of race discrimination cases is challenging. There are "no bright lines" in cases where discrimination must be proven by circumstantial evidence, and these cases are often "difficult" and "nuanced"… A contextual examination of all relevant circumstances is often required to identify the "subtle scent of discrimination"… For example, one such contextual circumstance is any historical disadvantage experienced by the group: Mezghrani v. Canada Youth Orange Network Inc. (CYONI) (No. 2), 2006 BCHRT 60 [CHRR Doc. 06-066], para. 28

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The Tribunal concludes:

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[293] In sum, as stated earlier in this decision, I have applied the recognition by courts and human rights Tribunals of pervasive stereotypes of Black men in my consideration of the issue before me. That issue is whether the evidence as a whole could support an inference that, on a balance of probabilities, Mr. Mema’s protected characteristics factored into the City’s suspension and termination of his employment.

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In rejecting all the City’s arguments including the fact that their CFO had engaged in serious financial misconduct that there was no evidence to support a finding of discrimination, the Tribunal comments:

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[295] The City argues that there was no differential treatment of Mr. Mema because “any CFO in a similar position and engaging in such serious misconduct would have been terminated from employment in February, 2017; and, if not then, in October, 2017.” Evidence of differential treatment is not necessary, and in any event, this argument relies on a hypothetical. The issue before me is not whether the City treated Mr. Mema as it would have any other hypothetical CFO in the same situation, but whether his protected characteristics were a factor in how the City did treat him.

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[296]  The City then argues that there is no evidence that the February or October reporting of the P-card issues by finance staff, or Ms. Mercer’s flagging it to the auditors were “triggered by racist motives”. However, “motive” and intentions are not required to establish discrimination under the Code, as s. 2 of the Code makes plain. Further, it disregards the reality that racial stereotypes may operate subconsciously, as this Tribunal recognized in Campbell and Francis. [Emphasis added]

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Despite what appeared to be a strong argument by the City of a “non discriminatory explanation” for the suspension and termination the Tribunal found:

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[298] Ultimately, for the reasons set out below, I am satisfied on a balance of probabilities that – however subconsciously – pernicious stereotypes of a Black man as less honest or trustworthy factored into the Misconduct Report, and as such there is a connection between the Misconduct Report and Mr. Mema’s protected characteristics. The City’s reliance on the discriminatory Misconduct Report tainted its decisions to suspend and terminate Mr. Mema’s  employment, rendering it discriminatory. I am thus satisfied on a balance of probabilities that the City breached the Code when it suspended then terminated Mr. Mema’s employment. [Emphasis added]

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Remedies

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As noted, the Tribunal found that an award of $50,000 for hurt feelings, injury to dignity and self respect. Mr. Mema had asked for $75,000.

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The really interesting finding is the wage loss.  The Tribunal found that Mr. Mema tried to mitigate his damages.  However despite a finding of discrimination that resulted in his lost employment the Tribunal was not satisfied that Mr. Mema’s difficulties in finding reemployment arose solely from the discrimination by the City and therefore the City was not responsible for all the loss from the time from the termination to the time of the hearing, ie the normal award [a claim of $777,884.54].  Why did the Tribunal find that not all the loss in remaining unemployed lay at the feet of the City?
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[385] However, on a balance of probabilities, I am not satisfied that Mr. Mema’s difficulties in finding reemployment arise solely from the discrimination or that that awarding compensation for all lost wages between the time of the termination and the hearing would be an appropriate exercise of my discretion under s. 37(2)(d)(ii).

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[386]  I am satisfied that publicly available information about the matter with Sechelt contributed to his difficulties in finding reemployment. In my view, that situation would reasonably raise questions for a prospective employer about Mr. Mema’s judgment.

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[387] I note that Mr. Mema recalled in his evidence, one prospective employer asked him, “have you Googled yourself?”, presumably referring to the various media articles. I understand this to relate not only to the publicity surrounding his employment with the City, but also his employment with Sechelt. I have not considered the media coverage of the situation at the City. Regardless of the events at the City, the City’s witnesses testified that they came across publicly available material highlighting Mr. Mema’s having used his corporate credit card for 105 personal purchases while employed by Sechelt. Further, the article referenced Sechelt’s having had to pursue him through the courts to seek repayment. It is reasonable to expect this information would have a chilling effect for prospective employers. The article was put into evidence. There is no dispute about that.

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[388] For the reasons set out above, I have reduced the wage loss award sought by a quarter, resulting in a final award of $583,413.40. In my view, this appropriately accounts for the fact that Mr. Mema’s loss of employment was discriminatory, while also accounting for the fact that not all of the wages lost by Mr. Mema fall at the feet of the City for its breach of the Code. It accounts for the fact that some of the information in the public domain related to his alleged conduct while at Sechelt more likely than not played a role in prospective employers’ reticence to hire him and his difficulties in finding reemployment.

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Interesting that this probative evidence of the same issue of misconduct at his previous employer did not factor into the accepting the City’s defense but did factor in to reducing the claim by almost $200,000.
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Finally it is important to note (and a little bit scary) that the Tribunal made no award for future loss as none was sought by the complainant.

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TAKEAWAYS

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The decision is simply too complicated to summarize all the findings. The Tribunal appears to be more readily able to reject the City’s evidence in favour of Mr. Mema’s evidence ignoring the onus that rested on Mr. Mema to prove the discrimination ie the connection between his termination and his protected ground.  And as noted it makes this extraordinary finding based on assumed stereotypical unconscious prejudices against Black men. While acknowledging the deeply rooted history of discrimination faced by the Black community, it's crucial to underscore that, in these cases, it is crucial for the tribunals to adhere to the established legal tests to maintain the integrity of the process and avoid opening the floodgates.

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But the reality is that with legal fees the cost to the City could well exceed $1 million. The same findings could be made of a small municipality say of 10,000 as each case is an individual assessment—it only takes one employee to have a human rights complaint.  How would the citizens of a small community handle payment of a $1 million award plus legal fees especially when most in BC are suffering from horrendous destruction and costs fighting forest fires?

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In my view the decision of the Tribunal here fails to provide proportionality in its analysis and conclusions.  Further I think public sector employers are easy targets for employees to file human rights complaints.  But how long can public employers bear these costs?  The answer might have to be amendments to the Code to limit such awards and more clearly define what is needed to prove discrimination.

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Finally this award highlights the significant procedural problems that now exist at the Tribunal.  The delay in processing complaints has become epidemic.  For example in a recent case the alleged discrimination took place in December 2020; the Complaint was filed at the very end of the one year limitation period Dember 2021 and the Tribunal first notified the Employer that the complaint had been filed in May 2023 some 32 months after the events alleged to constitute discrimination.

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Here there was almost a 5 year gap from the termination to the award and the potential wage loss was exacerbated due to the Tribunal’s inefficient process to conduct a proper formal hearing.

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I acknowledge that the Government has stepped up with further financial support and the Tribunal is doing everything it can to resolve the backlog and increase the efficiency of the system. Yet fixing the problem will likely take years.  In the meantime employers large and small pay the price.

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NOTE the City advises that it will be filing an appeal by way of a Judicial Review—watch this space.

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Mike Weiler & Chris Drinovz

August 23, 2023

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Note to Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter please contact one of our group members. We communicate all these updates to our clients and readers on our Employer Resources Portal and through monthly Newsletters.