Many unions are incorporated under federal or provincial not-for-profit corporate legislation. That legislation contains rules that unions need to navigate, particularly when dealing with a board member who has behaved inappropriately.
The British Columbia Supreme Court recently dealt with some of these issues in George v. The B.C. Wildlife Federation, which sheds light on the rights of a board of directors to deal with a director who has acted inappropriately in the course of his or her duties.
In that case, the Vice-President of the B.C. Wildlife Federation (BCWF) sent inappropriate emails to at least two staff members. After an initial investigation, the Board of Directors wrote to the Vice-President directing him to cease and desist from such conduct, and instructed him not to discuss the matter with any BCWF staff, including the staff members who received the emails. Further investigation revealed that one staff member may or may not have welcomed the emails. The Board of Directors concluded that the emails were inappropriate, even if not unwelcome; the Board of Directors was also concerned that the Vice-President continued to speak with that employee and refused to acknowledge that his emails were inappropriate.
The Board of Directors therefore resolved to suspend the Vice-President for a period of three months – which happened to coincide with the remainder of his term.
The Vice-President applied to the British Columbia Supreme Court, alleging that his suspension was tantamount to a removal from office. The relevance of calling it a “removal from office” was that legislation governing not-for-profit societies in British Columbia – like most not-for-profit legislation – prohibits the removal of a director unless by special resolution. The Vice-President argued that his suspension was not imposed after a special resolution and, therefore, violated BC’s Society Act .
The BC Supreme Court disagreed. The Court distinguished earlier cases that were critical of suspensions of not-for-profit board members from office, pointing out that – unlike in those other cases – this suspension was not motivated by a political vendetta or other inappropriate motives. The suspension was, instead, bona fide and in the best interests of the BCWF. Therefore, the suspension was not improper and was not tantamount to a removal from office.
The decision in George v. The B.C. Wildlife Federation is useful for unions in the context of administering their internal affairs. Specifically, it shows that a board may suspend a director so long as the suspension is done in good faith.
In addition to corporate legislation, some labour laws also regulate the internal decision-making of unions. The federal Public Service Labour Relations Act, for example, prohibits an employee organization from taking disciplinary action against an “employee” in a discriminatory manner. A suspension from the board of directors of a union governed by similar legislation would still be reviewed by a labour board; however, a bona fide suspension is not a violation of corporate legislation where that union has also chosen to become incorporated.
Given the context in which incorporated unions operate, this case is a useful authority for the proposition that a union does not violate not-for-profit legislation by suspending a director, so long as that suspension is bona fide and in the best interests of the union.