Guidance on Conflict of Interest and Inappropriate Preferential Treatment

Introduction

The Employment and Social Development Canada (ESDC) Code of Conduct is a guide for employees to help them identify what is considered professional conduct. On the subject of conflict of interest in relation to inappropriate preferential treatment, additional clarity has been requested on the issue of inappropriate preferential treatment to family or friends.

Definition of Conflict of Interest

The reference points are:

Appendix D of the Policy on People Management defines conflict of interest as “a situation, whether real, apparent or potential, in which the person employed has private interests that could influence the performance of their official duties and responsibilities or in which the person employed uses their office for personal gain.”

Section 2 (c) of the ESDC Code of Conduct, the public sector value of Integrity, states that public servants shall serve the public interest by “never using their official roles to inappropriately obtain an advantage for themselves or to advantage or disadvantage others, and; taking all possible steps to prevent and resolve any real, apparent or potential conflicts of interest between their official responsibilities and their private affairs in favour of the public interest.”

Section 4 (b) defines a conflict of interest as “a situation in which the public servant has private interests that could improperly influence the performance of his or her official duties and responsibilities or in which the public servant uses his or her office for personal gain.”

The Code of conduct classifies conflict of interest into three types:

  1. A real conflict of interest exists at the present time.
  2. An apparent, or an appearance of or perceived, conflict of interest could be perceived by a reasonable person (a hypothetical member of the public who is reasonably well informed) to exist, whether or not it is the case.
  3. A potential conflict of interest could reasonably be foreseen to happen or exist in the future.

Employees are expected to take as much care to avoid the appearance of conflict of interest as they must to avoid an actual or potential conflict of interest. In situations where it may be difficult to clearly determine the type of conflict of interest, the three types are regarded as equally significant. Treasury Board Secretariat has stated: “Experience has shown, for example, that public servants or their supervisors may expend an inordinate amount of time and energy endeavouring to determine if a given fact situation constitutes an "apparent conflict of interest" or a "real conflict of interest". Given the equivalent significance of the types of conflict of interest in the Code (including the measures to prevent them, methods of compliance, and consequences for breach of the rules), the effort to make a definitive classification may be counterproductive and unnecessary. It would be more productive in such situations to devote the effort towards preventing or resolving a conflict of interest

  • whether apparent or real
  • rather than to making a definitive classification.

Preventing and Resolving Conflicts of Interest

Employees are expected to take steps to prevent conflict of interest situations from occurring, and if a conflict of interest situation does occur, employees are expected to resolve them in the public interest.

One of the expected behaviours under the public sector value of Integrity is that public servants must never use their official roles to inappropriately obtain an advantage for themselves or to advantage or disadvantage others. The ESDC Code of Conduct elaborates:
“You are responsible for demonstrating objectivity and impartiality in the exercise of your duties and in your decision-making, whether related to staffing, financial awards or penalties to external parties, transfer payments, program operations or any other exercise of responsibility. This means that you are prohibited from granting preferential treatment or advantages to family, friends or any other person or entity. You are not to offer extraordinary assistance to any entity or persons already dealing with the government without the knowledge and support of your supervisor. You also are not to disadvantage any entity or persons dealing with the government because of personal antagonism or bias. Providing information that is publicly accessible is not considered preferential treatment (e.g. an information brochure that is posted on the departmental website).”

The key prohibition is in granting preferential treatment, and this prohibition applies not just to family and friends, but to any other person or entity as well. As such, it is not a conflict of interest for an ESDC employee to:

  • process a benefit claim that has been assigned to them by a supervisor or manager; or
  • process a benefit claim or serve a family member, relative, or friend, if there is no evidence that the employee bestowed an inappropriate advantage or disadvantage.

Identifying Conflicts of Interest

To determine the presence of a conflict of interest, it is important to identify and establish three elements:

  • The involvement of an ESDC employee;
  • A private interest or personal gain for the ESDC employee, and;
  • A public interest that is in contrast to the private interest or personal gain. For the purposes of this guidance document, it is in the public interest for an ESDC employee to demonstrate objectivity and impartiality when exercising their official duties and making decisions, and it is against the public interest to grant preferential treatment or advantages to family, friends or any other person or entity.

Guiding Questions

The Office of Values and Ethics considers the answers to the following questions for determining whether a situation could constitute a breach of the public sector Value of Integrity due to an ESDC employee’s use of their official role to inappropriately obtain an advantage for themselves or to advantage or disadvantage others:

  • Did the ESDC employee exercise their official authority or use their official role or title to obtain personal gain, or to provide an advantage or disadvantage to any entity or person? If yes, can the personal gain or advantage or disadvantage to others be clearly identified or defined? Note that the fact that an employee has a relationship with the person or entity is not sufficient to establish a conflict of interest situation. A personal gain or advantage or disadvantage to others must be identified in order to state that an employee was in a conflict of interest situation.
  • If the employee rendered an official decision, or was part of the decision-making process, can it be demonstrated that the final decision bestowed an inappropriate advantage or disadvantage to others, and can the result represent a significant departure from normal practice or other decisions involving the same or similar factors?
  • Did the ESDC employee disadvantage someone because of their personal antagonism or bias?
  • Did the ESDC employee inform or consult with their supervisor or manager about the situation? Was the employee authorized by, or received permission or direction from, their supervisor or manager to proceed with the situation?
  • Did the ESDC employee disclose departmental information that is not publicly available?
  • Did the ESDC employee access a client’s personal (protected) information without the client’s consent or without a work-related rationale?
  • Was there a work-related rationale that would justify the ESDC employee’s actions?
  • What steps did the employee take to prevent, or mitigate, the conflict of interest situation from occurring?
  • Was the employee aware of the expected behaviours, or could it be demonstrated that the employee was expected to have reasonably known the expected behaviours, and still made a choice to breach them?

Guidance on Conflict of Interest and Inappropriate Preferential Treatment - FAQ

  • Q1: Is it an offence to provide an excellent level of service to clients? I am worried that if I provide excellent service to a client and they happen to also be a family member, that I would be accused of providing inappropriate preferential treatment to a family member.

    With regards to departmental employees who occupy positions that interact directly with clients, the “level of service” is an important factor in determining whether an employee is in a conflict of interest and if inappropriate preferential treatment was provided. It is important to clarify this factor for employees who have to determine the line between delivering excellent service and providing inappropriate preferential treatment. This line can be defined by establishing the intersection between two factors:

    1. the relationship between the employee and the client, and
    2. the service provided by the employee to the client. To clarify:
    • If “personalized” or service “above and beyond” what any client can expect is provided to a family member or relative or close friend, and there is no further rationale to indicate that this kind of service can be justified in the public interest (consider the answers from the list of guiding questions above), then such a situation could be considered inappropriate preferential treatment that is a conflict of interest, whether real, apparent or potential.
    • if “personalized” or service “above and beyond” what any client can expect is being provided by an employee to a client (including a family member or relative or close friend); and if it can be demonstrated that the employee generally provides that level of service to the clients that they serve, and there is no additional indication that the employee is in a real, apparent or potential conflict of interest, then the situation should be considered good performance by the employee. Excellence in service, in these situations, should be encouraged and not seen as unfavourable behaviour.
    • if a service was provided by an employee to a family member or relative or close friend, and the service was at a normal level (i.e. within the acceptable service standard) that a client can expect, and there is no further indication that the employee is in a conflict of interest, then the situation should be considered acceptable and the employee is not in a conflict of interest. This situation could occur more frequently in smaller communities with smaller ESDC or Service Canada offices where the employee encounters clients that they are familiar with and where they may not readily have the option of referring the client to another employee colleague. That said, the employee is still expected to follow their program rules or procedures with regards to mitigating the conflict of interest risk; this could mean that the employee informs their supervisor/manager of the situation in order for the supervisor/manager to take the necessary steps to mitigate the risk; including, but not limited to, monitoring or reviewing the transaction or reassigning the file to another employee.
    • It is important to note that the size (volume of employees) of an office does not determine the presence, or absence, of conflict of interest, but it can affect the options available to the employee in mitigating conflict of interest risk. Generally speaking, the larger the office and complement of colleagues who are available to provide the same function, the more options available to mitigate the risk such as, but not limited to: referring the file to a colleague or another employee; having the transaction or file reviewed or processed by a more senior colleague or business expertise advisor or supervisor or manager (within the same office or in another office), and/or; obtaining the supervisor or manager’s support or permission to proceed.
  • Q2: Please explain the difference between granting inappropriate preferential treatment and serving family members or friends.

    The ESDC Code of Conduct states: “You are prohibited from granting preferential treatment or advantages to family, friends or any other person or entity. You are not to offer extraordinary assistance to any entity or persons already dealing with the government without the knowledge and support of your supervisor. You also are not to disadvantage any entity or persons dealing with the government because of personal antagonism or bias.”

    The key prohibition is in granting preferential treatment, and this prohibition applies not just to family and friends, but to any other person or entity as well. As such, it is not a conflict of interest for an ESDC employee to:

    • process a benefit claim that has been assigned to them by a supervisor or manager, or;
    • process a benefit claim or serve a family member, relative, or friend, if there is no evidence that the employee bestowed an inappropriate advantage or disadvantage.
  • Q3: Employees have been advised that they are prohibited from accessing and viewing clients’ personal or protected information in departmental databases, why does this still occur?

    With regards to the inappropriate access and viewing of personal or protected client information in our systems databases (e.g. Employment Insurance system, Canada Pension Plan and Old Age Security system), employees are not permitted to access and view such information unless:

    • the access and viewing is permitted under federal privacy laws;
    • the access and viewing is required as part of their work or their assigned workload;
    • the access and viewing was supported or approved by their supervisor or manager.
    • Employees are not permitted to access and view a client’s personal or protected information out of their own curiosity (in this instance, feeding ones curiosity will be considered a personal gain and not work-related).
  • Q4: Can I access my own personal information within our departmental databases? And does this include my own information in PeopleSoft?

    With regards to employees who access and view their own personal and protected information in ESDC’s systems databases (e.g. Employment Insurance system, Canada Pension Plan and Old Age Security system), it is important to note that Canada’s two federal privacy laws (Privacy Act and Personal Information Protection and Electronic Documents Act) give people a right to access their personal information held by the department. That said, these laws also prescribe how anyone, including ESDC employees, can ask for or access their personal information by submitting a request in writing. An employee, who fails to request access in writing, yet accesses and views their personal and protected information in ESDC’s systems database, would be violating the requirement for submitting their request in writing. The gravity of the two violations, inappropriate access to personal/protected information and failure to request access in writing, are different.

    With regards to employees accessing their own personal information in PeopleSoft (where we input our leave requests) and Phoenix (where we view our salary information), these systems have been expressly designed and implemented for employees to access and use for their leave or compensation; it is not a violation to access these systems for their personal information. That said, accessing these systems to view other employee’s personal or protected information, without a work- related rationale or authorization, would be a violation of privacy.