March 28, 2019 3:32 pm

COMMENTARY: Justin Trudeau’s handling of the Jody Wilson-Raybould matter likely wouldn’t fly in the corporate world

Asked about whether he believes Jody Wilson-Raybould and Jane Philpott should speak up in the House of Commons if they have "anything more to say" on the SNC-Lavalin affair, Prime Minister Justin Trudeau said it was up to the ministers to make that decision.

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In understanding the politics of the Justin Trudeau/Jody Wilson-Raybould saga, it is useful to stand back and ask, what would happen if these were employees rather than elected officials? How would this play out in the employment law/corporate world?

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The closest corporate analogy would be that of a chief executive arm-twisting the company’s chief financial officer to change a report or recommendation. The same principle would apply if the CEO pressured any executive with an independent oversight function respecting a company’s affairs, such as risk, compliance and internal and outside actuaries and auditors.

What happens in the workplace when that occurs? There is no question that, sometimes, a CEO considers it in the company’s interest for the CFO to write a report showing the CEO or the company in a better light. The CEO might have a personal interest in changing the CFO’s recommendation, such as helping that CEO keep the job, earn a bigger bonus or receive stock options. Or the CEO may have no such personal interest and simply disagree with the CFO.

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In the Trudeau/Wilson-Raybould saga, the PM stated that saving SNC-Lavalin from criminal prosecution would help his own re-election bid as MP for the Montreal riding of Papineau and would assist the Quebec provincial Liberals in their own election.

Let me be clear. The conduct of the PM in constantly pressuring the AG to remove SNC-Lavalin from the criminal process to civil remediation is, in my view, obstruction of justice and therefore criminal. And any criminal conduct by a CEO (or any employee, whether it be Minister of Finance Bill Morneau, the Clerk of the Privy Council or a PMO staffer) is cause for discharge. In employment law, the more senior the position, the more likely dishonest or disreputable conduct will be found to be cause for discharge.

But a CEO pressuring a CFO, depending upon the circumstances, will not generally be criminal. And, for the sake of this analysis, I will assume that it was not.

Notwithstanding that, it remains a cause for discharge.

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According to Richard Leblanc, professor of governance, law and ethics at York University, a CEO pressuring the CFO, or anyone with independent oversight, to move off of their independent judgment, so as to change their recommendation, report or decision, should be fired by the board of directors. Any good board, he tells me, would not hesitate to fire that CEO and a good CEO with a strong board would therefore never put undue pressure on those who are supposed to have independent judgment.

“Because there is so much gatekeeping now — the external and internal auditors and the CFO — there would not be very many areas where any pressure by a CEO to a CFO would be viewed as proper,” Leblanc says.

A CEO who has any concerns might speak up, but if the CFO’s opinion doesn’t change, a CEO would back off right away, Leblanc says. “The notion of repeated and sustained pressure, over multiple meetings and months, simply would never occur in any professional board. The CFO would go right to the audit committee to complain and the CEO would be disciplined or fired by the board.”

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As Leblanc sees it, Wilson-Raybould was arguably retaliated against with her demotion to the veteran’s affairs portfolio from her position as justice minister and attorney general. Leblanc says such retaliation is highly unlikely to occur in any good company.

“The CEO would be immediately fired for any retaliation,” LeBlanc explains. “Good boards also oversee codes of conduct that address undue pressure. A breach of the code is grounds for discipline or firing.”

Of course, in the PM’s case, there is no enforceable code of conduct, no gatekeeping, no enforceable audit committee, no oversights and the chief civil servant, Michael Wernick, who was supposed to be the non-partisan adult in the room, came out as a shill for the Liberal Party and the PM, attempting to provide him partisan cover, rather than oversight. He should have been fired for that stunning breach of his duty of independence and non-partisanship.

I was shocked when I heard the sometimes maudlin testimony of this civil servant, duty-bound to objectivity, replete with references to citizens being shot in the election year, foreign interference in the upcoming election campaign, the “vomitorium” of social media, praise for Carolyn Bennett and other distractions, evasions and obfuscation. And then Trudeau chimed in, advising Canadians to listen to Wernick. It appeared that he was repaying Trudeau for appointing him. Wernick should have been the very first to be fired or resign, as he has.

READ MORE: Privy Council Clerk Michael Wernick retiring amid questions over his role in SNC-Lavalin affair

Why is there so little protection in the political world compared to the systems of governance and transparency that have evolved in the corporate world? Should there not be more protection rather than less?

The fact that the conduct is, at the least, arguably criminal, makes the cause for discharge even more clear.

There is no ability to fire a prime minister, other than in a general election or a vote of the party. It is possible that the caucus could make life untenable and thereby force a leader to step down.

But the personal risks to caucus members are too serious to make that likely. The PM determines cabinet positions and committee appointments for caucus members. He can also decide whether to permit that member to run for the Liberal Party in the upcoming election or even remove that person from the party immediately, despite that member’s expressed interest in running again. So a caucus revolt is not a viable remedy. But no other mechanisms exist.

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Given his position as finance minister, the same legal repercussions of dismissal for cause would befall Morneau as Trudeau. What about the PMO and Morneau’s staff, who were also pressuring Raybould-Wilson and her chief of staff? Is following orders sufficient to avoid the gravamen of their offence? Generally, it would be, but if the conduct was found to be criminal, it would be cause for their discharge as well.

It is otherwise for Gerald Butts, who resigned while the matter remained academic. Given his senior position, his impropriety would also be cause for his dismissal from the PMO, regardless of whether it was technically criminal.

There should be a royal commission, led by a judge or retired judge, to make findings as to what has occurred in this case. Its mandate should include making governance recommendations, at least as protective as those governing Canadian corporations, to ensure that such a debacle never recurs.

Employment lawyer Howard Levitt is senior partner of Levitt LLP.

@HowardLevittLaw

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