Politician Resignations and Personal Liability for By-Election Costs - LawNow Magazine

Politician Resignations and Personal Liability for By-Election Costs

Employment Law Column

“I look forward to working with and representing you.”   – Premier Jim Prentice, January 1, 2015

“My contribution to public life has come to an end.”   –Premier Jim Prentice, May 5, 2015 within minutes of being elected as an MLA

Introduction

Several months ago, this employment column discussed the law of employees quitting their jobs.  Then on May 5, 2015, the Premier of Alberta announced he was quitting a four-year job as a Member of Alberta’s Legislative Assembly (MLA), which he actively sought and which voters had just given to him.  Admittedly in the context of the lack of his party’s success, he peremptorily proclaimed that his “contribution to public life has come to an end” even before all the votes were counted.  A few days later, he confessed the MLA job suddenly reduced him a mere “distraction” in the legislature.

Four months earlier the MLA wrote to his constituents, “I am very proud to serve as the Member of the Legislative Assembly for Calgary-Foothills.”  What changed between January 2015 and May 2015?  The first election came with the collateral perk of premiership and the latter, well, a mere opposition member.  If the premiership was a condition precedent to accepting the job in May, he did not tell those employing him.

There may be political, social and personal reasons why one would refuse to take up a position one publicly expressed a strong desire to attain right up through the decision process.  Nevertheless, this is an unusually hasty bolt for the exits.  If the premiership was a condition precedent to accepting the job in May, he did not tell those employing him. As far as deliberate quitting of a political office goes (as distinct from being unable to perform the job), it may be a world record, or even unprecedented.

A taxpayer advocacy group quickly called for the former Premier to pay for the approximately $250,000 for the cost of the upcoming by-election that this unilateral personal decision has triggered.  That argument was mostly advanced on moral grounds.

This article considers various legal grounds for a resigning member’s personal liability for triggering by-election costs.

Peremptory Resignation

How bad was this instant resignation?  Well, consider that some 30,000 people on a corporate search committee was looking to hire their next leader.  Five candidates, after much effort on their part, emerged as the short list.  All five ceaselessly endeavoured to win over the hearts and minds of the engaged, but admittedly unwieldy, search committee.  Each candidate for the job had a dedicated team of supporters who worked tirelessly.  They sought to contact and convince every one of the 30,000 search committee members.  It was an arduous hiring and interviewing process over 28 days and it cost the company about $250,000.

The final choice was not unanimous by any means.  There was support for each of the five candidates.  But one stood out as promising more than the others.  He attracted the support of 40% of the committee, not a majority but still more than any other candidate.  The committee sent regrets and told the other four candidates they would not be hired.  At the press conference, just as the company was about to introduce its new leader, that individual strode across the stage and announced he would not take the job after all.  The company would be leaderless for the next six months during which the entire process would have to be repeated.  For this particular company, this will be the third, formal, gruelling hiring process for the leader in the same year.

Indeed, Premier Prentice quit his new job faster than the applicable legislation could envision. The Election Act does stipulate costs which must be paid by candidates for recounts and petitions relating to controverted elections.  It does not assign the costs of an unnecessary by-election to the person who caused it. Sections 138 and 139 of the Alberta Election Act – not that Prentice was a studious devotee to that particular legislation – presume that candidates will wait out the official declaration of being elected and the appeal period, before they resign.  Since the Premier disclaimed his right to become an MLA prior to that, his election was declared void.  That is to say, as if it did not happen.

What a waste of public resources wrought by one individual’s personal decision!

Contractual Damages

One legal basis upon which to recover the by-election costs would be contract.  However, it really cannot be said that there was a contract here between political candidates and the regulatory authorities who fund the election.  And even if there was, it is not obvious that a peremptory resignation was a breach.

It could be argued that there is an implied contract between the candidate and the state that pays for elections.  Moreover, the candidate who resigns immediately can expect to know the substantial financial implications of that unilateral decision.  Reasonable foreseeability and direct causation are present.  Having to pay by-election costs would operate as a disincentive against voiding elections.  Viewed another way, it might encourage “conditional” candidates like Prentice (who will only accept the job if they win governing power) to be transparent to voters about that fact during the campaign.

Statutory Regulation

The Election Act does stipulate costs which must be paid by candidates for recounts and petitions relating to controverted elections.  It does not assign the costs of an unnecessary by-election to the person who caused it. The Act creates numerous corrupt practices for which candidates may be fined or disqualified, but peremptory resignations are not in this category of misbehaviour.

Tort Theory

The actions of a candidate who peremptorily resigns could be grounded in intentional tort or negligence due to the direct relationship between the candidate’s personal decision and the cost imposed on the Crown and ultimately on taxpayers.  This would be analogous to the candidate deliberately or carelessly destroying public property worth about $250,000.  The Crown and taxpayers might search for a method to recover that.

Employee and Employer Model

This argument would be that an elected candidate is equivalent to an employee.  One might see this as a four-year fixed term employment whereby any voluntary, discretionary quitting before that term concludes is a breach.  Or, viewed more generously, one can quit the job but only with reasonable notice to the employer, in this case the constituency.  Without reasonable notice, the quitter could be successfully sued for wrongful resignation.

Under section 58 of Alberta’s Employment Standards Code employees must give at least a one-week notice of termination if the employee has been employed at least three months.  If re-election is considered a new hiring, the candidate has not yet been employed three months.

This statutory notice period is the legal minimum.  The parties would not have limited themselves to this minimum notice.  At common law, in many circumstances, employees must furnish the employer with more notice of quitting, called reasonable notice.

MLAs are difficult and expensive to replace.  The nature of the work, experience, the seniority of the worker and the availability of replacements establish what reasonable notice ought to be given.  In the 1992 Tree Savers International Ltd. v. Savoy case, although the employee had provided the two-week minimum period of notice, the Alberta Court of Appeal found that 18 months (or $146,200 in lieu) was appropriate reasonable notice.

The Ontario Court of Appeal in 2012 in the case of GasTOPS Ltd. v. Forsyth ordered four employees to pay nearly $20 million in damages to the employer for several defaults, including quitting without reasonable notice, which was determined to be 10 to 12 months.

Equity

Several equitable obligations come to mind, such as estoppel, detrimental reliance and constructive trust, upon which to base an action for recovery of by-election costs.  One of the more tantalizing conceptions is to characterize a newly minted MLA as a fiduciary imposed with the legal duty to act honestly, in good faith and strictly in the best interests of the beneficiaries of this relationship (versus his own personal interests).  The elements of the relationship – the fiduciary’s unilateral discretion and power affecting the interests of vulnerable beneficiaries – are present.  Part of the voter compensation could be indemnity of the by-election costs.

Political Campaigns Not Legally Equivalent to Employee Recruitment

These are some of the potential, if not somewhat fanciful and contrived, grounds for legal recovery of by-election costs occasioned by peremptory resignations.  The most formidable practical challenge is that the law historically does not readily interfere with democratic processes. Former Premier Prentice wrote to me and his other 30,000 electors in January: “[i]t is important to me to continue to hear from you.  Your insights, concerns, issues or comments are welcomed.”  Four months later, not so much. Judges do not view campaign promises as binding legal contracts.  An elected MLA is unlikely to be viewed as an employee, in the traditional sense, of anyone.  Democratic and electoral processes are not captives of common law and equity.

Another limitation is identifying the aggrieved party in such cases.  The Crown and the Legislative Assembly are non-partisan.  Through electoral regulation, they seek to advance free and informed voting, fair play in elections, access to the ballot box and the overall flourishing of democracy itself.  Legal pursuit of costs against a newly elected MLA for resigning immediately risks appearing petty, vindictive and partisan.

Conclusion

Former Premier Prentice wrote to me and his other 30,000 electors in January: “[i]t is important to me to continue to hear from you.  Your insights, concerns, issues or comments are welcomed.”  Four months later, not so much.

Employers are reluctant to pursue former employees who leave them in a lurch or who fail to be transparent with their intentions and conditions during the hiring process.  Ultimately, in politics as in employment, reputation is the only issue left standing.

Authors:

Peter Bowal
Peter Bowal
Peter Bowal is a Professor of Law at the Haskayne School of Business, University of Calgary in Calgary, Alberta.
 


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