ONTARIO SUPERIOR COURT AWARDS $100,000
IN PUNITIVE DAMAGES FOR EMPLOYER’S FAILURE
TO HONESTLY PERFORM EMPLOYMENT
CONTRACT
December 9, 2015
Number 1536
Dishonesty
Trumps Length of
Service . . . . . . . . . . . . .
— Jed Blackburn, Cassels Brock & Blackwell LLP. © Cassels Brock & Blackwell LLP.
Reproduced with permission.
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Progress of
Legislation
Alberta . . . . . . . . . . . . .
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Nova Scotia . . . . . . . .
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Ontario . . . . . . . . . . . . .
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Saskatchewan . . . . . .
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Recent Cases . . . . . .
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The Economy . . . . . .
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When an employment relationship deteriorates, an employer can be tempted to terminate
an employee for cause especially where the employee would otherwise be entitled to a
substantial payment upon termination. However, a recent decision of the Ontario Superior
Court of Justice highlights the risks to employers if they rely on unfounded allegations in
an attempt to justify a termination for cause and avoid their contractual notice
obligations.
Background
In Gordon v. Altus Group, 2015 ONSC 5663, the plaintiff employee was hired by the
defendant employer in November 2008 as part of an asset purchase transaction in which
the defendant purchased assets of the plaintiff’s company. The purchase price was a
multi-million dollar sum with an adjustment to be made in February 2010 based upon the
performance of the business. As part of the deal, the plaintiff was hired for a three year
term with provisions for renewal.
As the adjustment date approached, a dispute arose as to the performance of the
company. The plaintiff (through his company) triggered an arbitration clause to resolve the
dispute. Shortly thereafter the defendant terminated the plaintiff’s employment and took
the position that he was fired for cause and therefore not entitled to the termination
payments under his employment contract. The defendant alleged it had cause to
terminate the plaintiff’s employment and that the working relationship could not be
maintained due to the following:
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The plaintiff was unproductive and very unpleasant;
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The plaintiff talked of senior personnel in very derogatory terms; and
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The plaintiff used excessive profanity.
After the termination, the defendant further alleged that the plaintiff had breached the
defendant’s conflict of interest policy by failing to disclose lending money to a company
with which the defendant was doing business, and that the plaintiff continued to employ
another employee after she had been charged with fraud and misled the defendant about
the fraud charges.
LABOUR NOTES
Findings
Justice B. Glass held that the defendant did not have cause to terminate the plaintiff’s employment. Specifically, Justice
Glass found that the complaints regarding the plaintiff’s conduct and profanity were exaggerated by the defendant after
the fact in an attempt to justify the dismissal. Notably, there was no written record of these concerns nor reprimand
given to the plaintiff despite an employment handbook requiring that progressive discipline be exercised.
Similarly, Justice Glass held that the conflict of interest allegation was yet another example of the defendant “puffing up
complaints to justify its peremptory dismissal” and that the employee had in fact disclosed the issue in accordance with
the defendant’s policy.
Finally, Justice Glass found that the allegations regarding the criminal fraud charges against the plaintiff’s employee were
a red herring since the employee had resigned within three weeks of the commencement of her employment and there
was no evidence of any harm to the defendant.
In assessing damages, Justice Glass held that the plaintiff was entitled to approximately ten months’ notice of
termination in accordance with his employment contract, which amounted to $168,845.00. Justice Glass also found that
the defendant’s requirement that the plaintiff comply with his two year non-competition clause effectively prevented the
plaintiff from mitigating.
Most significantly, Justice Glass went on to hold that the plaintiff was entitled to an additional award of punitive
damages as a result of the defendant’s outrageous conduct and decision to ignore its contractual obligations as the
arbitration approached. As a result of the defendant’s failure to honestly perform the employment contract, Justice Glass
awarded punitive damages in the amount of $100,000.00 to sanction the defendant for its “harsh treatment” and
“terrible conduct.”
Takeaways
This decision serves as a useful reminder to employers that, even where the employment relationship has soured,
termination for cause is very difficult to establish and must be based upon demonstrable employee misconduct.
Attempting to justify a termination for cause based on unfounded allegations in order to avoid notice obligations may be
sanctioned by the court through substantial punitive damages awards.
Here are a few key takeaways for employers:
1. Employers can rely on employee misconduct discovered after a dismissal to support a termination for cause (i.e.,
after acquired cause), but the alleged misconduct must be serious and not exaggerated by the employer in an
attempt to avoid notice obligations;
2. A record of progressive discipline will almost always be required to uphold a termination for cause (apart from
conduct justifying immediate dismissal, such as theft). Where an employment handbook requires progressive
discipline and it is not followed, this will generally be fatal to the position that a termination was for cause;
3. Broad-ranging non-competition clauses can actually increase the liability of employers if they prevent employees
from mitigating, thereby requiring the employers to fully compensate employees for their common law or
contractual notice periods; and
4. Employers should carefully consider the employment provisions and dispute resolution mechanisms in any asset or
share purchase transaction to ensure they are properly protected if an employment relationship deteriorates. In this
case, the combination of a substantial price adjustment, a lengthy arbitration process, and the plaintiff’s three year
term of employment appear to have accelerated the deterioration of the employment relationship and motivated
the defendant to abruptly terminate the plaintiff without compensation. Consideration of these issues during the
negotiation of the purchase agreement may have allowed the defendant to avoid litigation altogether, not to
mention the very substantial punitive damages award it received.
For further information regarding this matter, please contact Jed Blackburn or other members of Cassels Brock &
Blackwell’s Employment and Labour Group.
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LABOUR NOTES
3
DISHONESTY TRUMPS LENGTH OF SERVICE
— James D. Kondopulos and Julie A. Menten of Roper Greyell LLP—Employment and Labour Lawyers. This article originally
appeared in the October 30th issue of The Lawyers Weekly, a LexisNexis Canada publication, and is reproduced with
permission.
A recent labour arbitration award has reinforced the importance of honesty in industries where trust is an essential
component of the employment relationship. In such industries, any form of dishonesty can justify the discharge of even a
long-term employee.
In Sobeys West Inc. v. UFCW Local 1518 (Cahoon Grievance), [2015] B.C.C.A.A.A. No. 36, the grievor, a unionized, parttime clerk at a Safeway store in British Columbia, was discharged when he applied for and took an educational leave
under false pretences. He had 34 years of seniority.
For several years, the grievor had reduced his employment status to part-time while working full-time with another
employer on the Alberta oil sands. He was able to accomplish this feat by taking advantage of the generous leave
provisions in the parties’ collective agreement; this resulted in him not attending work from 2012.
In the summer of 2013, the grievor had exhausted all leave entitlements available to him, with the exception of an
educational leave which was conditional on attendance at an accredited educational institution. After he provided proof
of registration at a British Columbia college, the grievor’s application for educational leave was granted from September
1, 2013 to September 1, 2014. It was made clear to the grievor that he was expected to comply in all respects with the
conditions of the leave and that his compliance would be monitored.
In January 2014, the employer wrote to the grievor and requested proof of attendance at school. Surprisingly, the grievor
responded he had withdrawn from all classes because of a September 2013 eye surgery. The employer requested more
information, warning the grievor it would conclude he had taken the leave under false pretences should he not provide
fulsome answers. The manner in which the grievor responded to the employer’s questions was evasive and nonresponsive. His employment was terminated for just cause.
At the arbitration hearing, the employer argued the grievor had been deceitful when applying for and taking the
educational leave: his sole motive for the misconduct was to keep his full-time job in Alberta. The employer said the
grievor had a positive duty to immediately inform it when his circumstances changed; failure to do so was dishonest.
Termination for cause was the only viable option as trust was vitally important in the employer’s business, the retail food
industry.
The union denied that the grievor had a positive duty to inform, noting the employer had provided no authority on the
point. The grievor had fully intended to attend classes in British Columbia and had only withdrawn because of his eye
surgery. The grievor’s oral testimony was that apart from six weeks of leave for his surgery and recovery, he had
continued to work full-time for his Alberta employer. While the grievor admitted at the hearing that he had been
dishonest when he told the employer he had attended classes before withdrawing, he repeatedly insisted that he had
done nothing wrong and accordingly had no reason to apologize.
Arbitrator John Sanderson concluded that the grievor’s testimony was unreliable. It was improbable the grievor had
intended to attend classes in British Columbia when he worked full-time in Alberta. The arbitrator found that the grievor
had deliberately not informed the employer when he withdrew from classes in order to keep his Alberta job. The grievor
continued to deceive the employer when he provided false and misleading answers to its questions.
Of special note, the arbitrator agreed with the employer that the grievor owed it a duty of good faith and a duty to act
honestly and responsibly. This included a positive obligation to inform the employer when he no longer met the
conditions of his leave.
This holding is significant because many categories of leave, including sick leave, are conditional. Intentionally failing to
inform one’s employer of a change in circumstances can constitute dishonesty and result in termination of employment,
regardless of whether the leave involves any monetary benefit.
LABOUR NOTES
4
In arguing that the grievor should be reinstated to employment, the union focused on his lengthy service of 3.5 decades
as a significant mitigating factor. The union highlighted that by all accounts the grievor was a good employee. The
employer responded that long service cuts both ways; a senior employee ought to have known better.
Arbitrator Sanderson held that the grievor’s long service may have saved his job in another employment context but not
in an industry such as the employer’s, where trust is paramount. The arbitrator rejected the union’s argument that the
major concern in the retail food industry is theft and not other forms of dishonesty. He was clear that in industries which
require a high degree of trust, dishonesty in all its forms is damaging to the employment relationship.
The grievor’s insistence that he had no reason to apologize was the nail in the coffin. Arbitrator Sanderson found no
reasonable basis upon which to order reinstatement and held, “The grievor’s behaviour and conduct has been most
unfortunate. He has ignored his duty to his employer to act in good faith rather than in his own self-interest. The
responsibility for his actions lie solely with him.”
James D. Kondopulos is a founding member and partner (practising through a law corporation) of Vancouver-based
employment and labour law boutique, Roper Greyell LLP. He has been named by Lexpert as one of Canada’s leading
lawyers under 40, and has been recognized by his peers as a leading lawyer in employment and labour law and listed in
Best Lawyers International, Canada. James can be reached by e-mail at jkondopulos@ropergreyell.com. For more
information about his practice and Roper Greyell, please visit www.ropergreyell.com.
Julie A. Menten is an associate lawyer with the Vancouver-based employment and labour law boutique of Roper Greyell
LLP, where she has gained experience in all areas of employment, labour, and workplace human rights law. Prior to joining
Roper Greyell, Julie clerked at the BC Court of Appeal. She can be reached by email at jmenten@ropergreyell.com. For
more information about Julie and Roper Greyell, visit www.ropergreyell.com.
PROGRESS OF LEGISLATION
Alberta Proposes To Add Gender Identity and Gender Expression as
Prohibited Grounds of Discrimination
On November 19, 2015, the Government of Alberta introduced Bill 7, the Alberta Human Rights Amendment Act, 2015. If
passed, Bill 7 will amend the Alberta Human Rights Act to expressly include “gender identity” and “gender expression” as
prohibited grounds of discrimination.
Alberta Proposes To Extend Application of Employment and Labour
Legislation to Farm and Ranch Workers
Bill 6, the Enhanced Protection for Farm and Ranch Workers Act, was introduced on November 17, 2015. If passed, Bill 6
will repeal a number of provisions that currently exclude certain farm and ranch workers from application of the
Employment Standards Code, the Labour Relations, Code, the Occupational Health and Safety Act, and the Workers’
Compensation Regulation.
Nova Scotia Introduces Bills that Would Amend Leaves of Absence and
Reprisal Provisions of Labour Standards Code
Nova Scotia recently introduced two Bills that would amend the Nova Scotia Labour Standards Code.
Bill 127, An Act to Amend Chapter 246 of the Revised Statutes, 1989, the Labour Standards Code, was introduced on
November 19, 2015 and received second reading on November 20. If passed, Bill 127 would amend the provisions
related to bereavement leave and compassionate care leave.
LABOUR NOTES
Currently, Nova Scotia employees are entitled to unpaid leave of either one day or up to three days upon the death of
certain family members. Bill 127 would increase this entitlement to up to five days’ unpaid leave upon the death of the
employee’s spouse, parent, guardian, child, ward, grandparent, grandchild, sister, brother, mother-in-law, father-in-law,
son-in-law, daughter-in-law, sister-in-law, or brother-in-law.
Bill 127 would also increase an employee’s entitlement to unpaid compassionate care leave from eight weeks to a
maximum of 28 weeks, and would allow an employee to end and restart the leave during the 52 weeks following its
commencement.
If passed, the amendments in Bill 127 would come into force on January 3, 2016.
Bill 128, An Act to Amend Chapter 246 of the Revised Statutes, 1989, the Labour Standards Code, which received first
reading on November 19, 2015 and second reading on November 24, proposes to clarify and enhance the protections
against reprisal under the Labour Standards Code. If passed, the current protections against reprisal would be expanded to
prohibit discharge, layoff, suspension, intimidation, penalty, discipline or discrimination of any employee who has:
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made, or assisted another person to make, a complaint;
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initiated, or helped initiate, an inquiry, investigation, or proceeding;
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participated, or is about to participate, or who the employer believes will participate, in any proceeding;
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made, or is about to make, an inquiry about that person’s or another person’s rights;
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made, or is about to make, any statement or provide information to the Director of Labour Standards or an officer;
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asked or required an employer to comply with the Act and the regulations; and
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taken, or will take, a leave of absence that the person was entitled to or will become entitled to take.
If passed, Bill 128 would come into force on Royal Assent.
Ontario Bill Would Amend Labour Relations Act, 1995
Bill 144, the Budget Measures Act, 2015, which was introduced on November 18, 2015, contains provisions that would
amend the Labour Relations Act, 1995 with respect to the deemed abandonment of certain bargaining rights.
If passed, new provisions would provide that the Lieutenant Governor in Council may, by regulation, “deem bargaining
rights held by an employee bargaining agency and its affiliated bargaining agents created as a result of the Sarnia
Working Agreement to be abandoned with respect to the employer.” Additional rights and obligations that apply with
respect to relevant parties could also be imposed.
Saskatchewan Passes New Essential Services Legislation
Bill 183, The Saskatchewan Employment (Essential Services) Amendment Act, 2015 (the “Act”), which will integrate new
essential services provisions into Saskatchewan’s labour law framework, received Royal Assent on November 19, 2015 and
will come into force on proclamation. The Act will replace Saskatchewan’s current essential services legislation, which was
declared unconstitutional by the Supreme Court of Canada in Saskatchewan Federation of Labour v. Saskatchewan, 2015
CLLC ¶ 220-014.
In addition to the essential services framework, the Act also includes amendments to the Occupational Health and Safety
section of The Saskatchewan Employment Act (Part III), including provisions relating to the Workplace Hazardous
Materials Information System.
For a more detailed discussion of the Act, see Labour Notes issue No. 1534, dated November 9, 2015.
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LABOUR NOTES
6
RECENT CASES
Termination of Employee for Alleged Dishonesty Was Not Warranted
Supreme Court of British Columbia, July 7, 2015
Kal Tire Ltd. (“Kal Tire”) purchased the Sears Canada location where Dhatt worked as an automotive mechanic. He was
retained by Kal Tire, and was given a welcome employment package. Kal Tire subsequently decided to move to a new
location. During the relocation of equipment, Dhatt asked whether he could take a battery charger home. Dhatt was told
that it was garbage, and, believing that he had permission, he took the battery charger home. Once all of the equipment
and materials that could be used had been moved to the new location, the remaining items were set aside to be moved
to other Kal Tire locations, recycled, or thrown out. Dhatt removed a pole that he understood to be garbage. His
supervisor showed up while Dhatt was removing the pole, and nothing was said to him at that time. On his next day of
work, Dhatt was asked about the battery charger, which he admitted to taking home. Dhatt was issued a two-day
suspension for the removal of the battery charger. When senior management was informed of Dhatt’s behaviour, he was
terminated for dishonest behaviour. Dhatt brought an action for wrongful dismissal.
The action was allowed. Dhatt did not act dishonestly when he removed the pole and the battery charger. He believed
the items that he took were regarded as garbage by Kal Tire, and he had no intention to steal. Dhatt asked the person
supervising the move about the battery charger, and was informed that it was not on the list to be moved anywhere.
Dhatt did not attempt to hide his actions in taking the pole, and informed his supervisor of what he was doing. There
was insufficient evidence that Dhatt’s actions were intentionally dishonest or that he lied to his supervisor, and there was
not just cause for termination. Even if he had been intentionally dishonest, the nature and seriousness of the alleged
dishonest conduct did not undermine the employment relationship. Termination was not warranted in the circumstances,
given that Dhatt admitted to what he had taken, the items had very little value, he had a clean employment record, and
he was allowed to remove the pole after being seen by the supervisor. Dhatt was given credit for his years of past
service with Sears in determining reasonable notice. Therefore, using a period of continuous employment of 23 years,
Dhatt was entitled to 21 months’ reasonable notice. After termination, Dhatt received treatment for substance abuse and
depression, and was entitled to $55,000 for the loss of long-term disability benefits. Since the conduct of Kal Tire was
unfair and in bad faith, Dhatt was also awarded $25,000 for aggravated damages.
Dhatt v. Kal Tire Ltd., 2015 CLLC ¶ 210-057
Employee Who Attempted To Reconsider His Resignation Was
Constructively Dismissed
Supreme Court of Newfoundland and Labrador, Trial Division, July 17, 2015
Evans worked for Avalon Ford Sales (1996) Limited (“Avalon”) for 12 years as a commercial fleet manager. Evans took
responsibility for a mistake where a van was delivered directly to the customer prior to Avalon receiving payment. There
was a contentious meeting with management, where Evans admitted to the mistake and took responsibility for ensuring
it did not happen again. Evans was upset following the meeting, and was concerned and confused about how
management had responded to the incident. He experienced significant stress symptoms throughout the rest of the day.
At the end of the day, Evans turned in his keys and cell-phone, and told his employer “I’m done”. The next day Evans
called Avalon to discuss the events of the day before, although his call was not returned. Believing that Evans was leaving
to go to a competitor, Evans’ manager was upset. When Evans eventually met up with his manager, the meeting was
short and unproductive. Evans brought an action for wrongful dismissal.
The action was allowed. Evans’ relationship with Avalon was subject to an implied duty of good faith and fair dealings,
along with a general duty of good faith contractual performance. There was no change of duties, or substantial increase
in volume of business that could constitute a fundamental alteration of an essential term of Evans’ contract warranting a
finding of constructive dismissal. The action and intention of Evans was to resign, although the decision was made while
he was under significant stress. A few days after indicating that he wanted to resign, Evans obtained a note from his
doctor to support short-term disability benefits and met with his manager. As a result, his resignation was not
unequivocal. In the alternative, Evans attempted to reconsider his resignation by obtaining a doctor’s note for medical
LABOUR NOTES
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leave. He made every attempt to clarify his situation after indicating that he wanted to resign, and Avalon did not take
adequate steps to determine Evans’ situation. Even if Evans had resigned, the implied term of good faith and fair dealings
applicable to both parties required Avalon to give Evans time to reconsider. Since it was not a voluntary resignation,
Evans was constructively dismissed. There was an implied term and condition of Evans’ employment that he was entitled
to a one-third share of any incentive received from Ford Motor Company of Canada under a program intended to benefit
the “dealership team”. He was entitled to one-third of the $81,600 incentive program, along with 12 months’ reasonable
notice, calculated at $46,201.87. There was no basis for an award of moral or punitive damages.
Evans v. Avalon Ford Sales (1996) Ltd., 2015 CLLC ¶ 210-058
Court Sets Aside Labour Relations Board’s Decision that Employer’s
Communications During Bargaining Process Were Permissible
Queen’s Bench for Saskatchewan, July 17, 2015
The Service Employees International Union-West (“SEIU”), the Saskatchewan Government and General Employees’ Union
(“SGEU”), and the Canadian Union of Public Employees were involved in protracted negotiations for a new collective
agreement for health care workers in the province. The Saskatchewan Association of Health Organizations (“SAHO”) was
the bargaining agent for regional health authorities. The unions bargained individually with SAHO on a number of issues,
prior to bargaining collectively. SAHO engaged in extensive use of electronic and print media during collective bargaining
to convey its message to the public. In addition, SAHO communicated directly with bargaining unit employees through
its website, its posters and tent cards in the workplace, and individual letters to health care workers. After the unions and
SAHO reached agreements, the unions brought unfair labour practice applications claiming that SAHO had intimidated,
threatened, or coerced employees, attempted to bargain directly with employees, and failed to bargain in good faith. The
Saskatchewan Labour Relations Board (the “Board”) found that the majority of the communications were not
intimidating, coercive, or threatening to employees. One exception found by the Board was a communication by SAHO
dealing with retroactive pay, which was misleading and a serious misrepresentation of the facts. The Board also found
that there was no attempt to bargain directly with employees and no failure to bargain in good faith (see 2014 CLLC
¶ 220-035). SEIU and SGEU brought an application for judicial review.
The application for judicial review was allowed, the decision of the Board that dismissed the unfair labour practice
complaints was set aside, and those matters were sent for reconsideration. It was unreasonable for the Board to fail to
undergo an analysis of whether the various messages delivered by SAHO qualified as fact or opinion, as this was central
to the issues between the parties. Paragraph 11(1)(a) of The Trade Union Act allowed employees to receive information
from employers without being interfered with, coerced, or intimidated. It was unreasonable for the Board to find that
interference with an employee in the exercise of his or her rights required an intention to compromise or expropriate the
employee’s free will, since a person could be interfered with or intimidated without their free will being compromised or
expropriated. The Board did not offer any definition of when the appropriate threshold would be met, or whether it was
a subjective or objective test. The Board concluded that a “majority of the content” of SAHO’s communications would
not have been seen as intimidating, coercive, or threatening, although it did not indicate which messages were in the
“minority”; nor did it contextualize individual messages as required by prior Board jurisprudence. The Board found that
paragraph 11(1)(b) related only to the protection of unions as an independent legal entity, and simply because views and
opinions of an employer might make the union’s job more difficult did not amount to a violation of the section. This was
not unreasonable, although it was unclear whether such employer conduct would ever result in an unfair labour practice.
Under paragraph 11(1)(c), the Board had concluded that SAHO’s approach to bargaining did not amount to a failure to
bargain collectively. However, since SAHO’s communications were intended to begin prior to the union meeting with its
members, and went beyond communicating facts and opinions to employees, it was unreasonable for the Board to
uphold SAHO’s direct communications with employees prior to the union having an opportunity to consider the
proposals. The Board was required to determine whether or not a substantive remedy should be awarded for its finding
of an unfair labour practice.
SEIU-West v. Saskatchewan Association of Health Organizations, 2015 CLLC ¶ 220-055
LABOUR NOTES
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Arbitration Award Ordering Removal of Erroneous Language from
Collective Agreement Was Reasonable, But Order To Draft New Language
Was Set Aside
Ontario Divisional Court, July 27, 2015
The Amalgamated Transit Union, Local 1587 (the “union”) was the bargaining agent for a unit of employees of Metrolinx,
which was a successor employer to GO Transit. The recognition clause between GO Transit and the union excluded office
and technical staff (“O/T staff”). When GO Transit moved from being run at the municipal level to the provincial level,
the union was granted certification with respect to all employees in the bargaining unit, with certain exceptions set out
by the Labour Relations Board, but these exceptions did not include O/T staff. As a result, O/T staff members were
included as part of the bargaining unit and a new collective agreement included O/T staff. When the next round of
bargaining occurred, GO Transit used an earlier recognition clause, which excluded O/T staff, and the union signed off on
it. When the union subsequently realized that the O/T staff were excluded, it filed a policy grievance. The arbitration
award found that the bargaining unit presumptively included all O/T staff. Metrolinx brought an application for judicial
review.
The application for judicial review was allowed, in part. Using a reasonableness standard of review of the arbitrator’s
application of the doctrine of rectification, it was reasonable for the arbitrator to conclude that there had been a prior
agreement to include O/T staff in the bargaining unit, and, by mistake, the language of the subsequent collective
agreement excluded the O/T staff. The issue of whether to exclude O/T staff was not bargained between the parties, and
the parties continued terms from past agreements unless such issues were raised in bargaining. It would be
unconscionable to allow Metrolinx to rely on a past mistake, given that the error was not brought to the attention of the
union at the time it was made. It was reasonable for the arbitration award to order the removal of the exclusionary
language from the collective agreement. However, the award went on to order the parties to include all O/T staff,
“whether or not their positions are listed in Schedules A1 or A2”, which was unreasonable. The arbitration award had
found that the parties did not agree on an all employee unit, and the doctrine of rectification required the party seeking
rectification to demonstrate the precise form of the language on which the parties agreed. Therefore, the part of the
award ordering the parties to agree on new language reflecting an employee unit including all O/T staff was set aside.
Metrolinx v. ATU Local 1587, 2015 CLLC ¶ 220-056
Court of Appeal Affirms that Personal Information of Grievors Can Be
Published Without Consent
British Columbia Court of Appeal, August 12, 2015
The United Food and Commercial Workers Union, Local 1518 (the “union”) brought a grievance on behalf of a truck
driver dismissed for improperly signing company invoices. The arbitrator reinstated the grievor with a suspension and
one-year transfer. The union also argued that the Personal Information Protection Act (“PIPA”) precluded arbitrators from
including the personal information of grievors or witnesses in arbitration awards without express consent from those
individuals. The arbitrator found that PIPA did not apply in this situation for four alternate reasons: the “open court
principle” applied to the arbitration award; the Administrative Tribunals Act (“ATA”), which did not prevent tribunals from
disclosing personal information pursuant to the Freedom of Information and Protection of Privacy Act, applied to
arbitrators; a labour arbitrator was not an “organization” within the meaning of PIPA; and the consent requirements of
PIPA did not apply. The Labour Relations Board (the “Board”) determined it had jurisdiction and upheld the privacy award
(see 2014 CLLC ¶ 220-042). On reconsideration, the Board concluded that the PIPA issue was the “basis” of the award,
that the privacy award was a discrete matter of interpretation of general law, and granted leave. The Board found the
decision should be reviewed by the Court of Appeal.
The appeal was dismissed. The Court of Appeal had jurisdiction to hear the appeal under section 100 of the Labour
Relations Code. The privacy award by the arbitrator was a stand-alone issue dealing with the interpretation of PIPA,
distinct from the dismissal. The issue was novel, it was purely a question of statutory interpretation, and did not raise a
LABOUR NOTES
9
question concerning a principle of labour relations. Arbitrators were not exempt from the application of PIPA under the
relevant sections of the ATA, and since arbitrators were independent of the Board they were an “organization” subject to
PIPA. An arbitrator was authorized by law to resolve disputes brought by unions or employers, and was implicitly
authorized to receive and collect personal information without consent. The disclosure of that information was permitted
for the purpose of the arbitration if required or authorized by law. An arbitration board was required to file an issued
award with the director, including “the reasons for the decision”, and permitted the inclusion of personal information for
the purposes of the parties understanding the reasons for the conclusion. Consent was not required for personal
information to be released to the public in the form of an arbitration board’s reasons for an award, and PIPA did not
affect the collection, use, or disclosure of personal information in the course of a labour arbitration.
UFCW, Local 1518 v. Sunrise Poultry Processors, 2015 CLLC ¶ 220-057
Court of Appeal Upholds Tribunal’s Finding that Employer’s Drug Policy
Was Not Discriminatory
Court of Appeal of Alberta, June 30, 2015
Elk Valley Coal Corporation (“Elk Valley”) had an alcohol and drug policy stating that employees could seek rehabilitation
without reprisal prior to a work-related accident, but discipline or termination could not be avoided if help was only
sought after an accident occurred. Stewart was involved in a vehicle collision on the work site and, after undergoing a
drug test, he was terminated for testing positive for consumption of cocaine. Stewart admitted to the regular use of
crack cocaine on his days off, and he came to realize after the accident that he had a problem and that he was addicted
to cocaine at the time of the accident. Stewart filed a human rights complaint, alleging that he was fired on account of
his addiction. The Alberta Human Rights Tribunal (“Tribunal”) found no prima facie case of discrimination. According to
the Tribunal, Stewart was not terminated because of his addiction or dependency; rather, he was terminated for breach
of Elk Valley’s drug and alcohol policy. An appeal was dismissed (see 2014 CLLC ¶ 230-012). The chambers judge agreed
with the Tribunal that the manner in which Elk Valley dealt with Stewart did not constitute discrimination, although it
disagreed as to whether, if there had been prima facie discrimination on the basis of disability, Elk Valley’s policy and
practice was accommodation to the point of undue hardship. Bish, a union official, appealed on behalf of Stewart, and Elk
Valley appealed the finding that it did not accommodate to the point of undue hardship.
The appeal was dismissed. Stewart’s denial that he was an addict caused him to believe that he had nothing to report
under the policy, and made him think he did not need treatment. The Tribunal erred in finding that Stewart was an
“individual with a disability” who could reasonably be expected to comply with the policy by seeking treatment prior to
the accident. Using a standard of review of correctness, the Court of Appeal dismissed Stewart’s claim that his disability
was a factor in the breach of the policy because he was under the influence of drugs when the incident occurred. Elk
Valley’s drug and alcohol policy did not distinguish between employees with or without a disability. Instead, it
distinguished between people who broke the policy and people who did not. The existence of a disability was not a
factor leading to the adverse impact. With respect to the issue of accommodation, the chambers judge found the
Tribunal’s decision to be unreasonable, since an employer policy that accommodated employees with drug dependencies
still required a specific employee to appreciate that he or she had a drug dependency to take advantage of the
ameliorative and remedial aspect of the policy. This finding undermined the Tribunal’s finding that, in a highly safety
sensitive position, there was an obligation on the employee to indicate to his employer that he needed accommodation.
It was reasonable to find that Elk Valley had accommodated to the point of undue hardship.
A dissent would have allowed the appeal, finding that both the Tribunal and the chambers judge erred in finding that a
prima facie case of discrimination had not been made out, and that the Tribunal erred in finding that Elk Valley had
accommodated to the point of undue hardship.
Bish v. Elk Valley Coal Corporation, 2015 CLLC ¶ 230-046
LABOUR NOTES
10
Employee Who Relinquished His Right To Reinstatement Was Disqualified
From Receiving Employment Insurance Benefits
Federal Court of Appeal, July 17, 2015
Thibodeau worked as a caretaker for the Office municipal d’habitation de Trois-Rivières (the “employer”). Thibodeau was
terminated after admitting to making an unauthorized connection on two occasions. His application for benefits was
denied, as the Employment Insurance Commission found that he had lost his employment as a result of his misconduct.
The Board of Referees dismissed an appeal. Thibodeau filed a complaint with his union, alleging he was not properly
represented at his dismissal. An agreement between Thibodeau, his union, and the employer substituted a three-week
suspension without pay for his dismissal. Thibodeau relinquished his right to reinstatement, and was given a payment of
$2,000. Thibodeau filed a request for a new hearing before the Board of Referees, citing the agreement as a “new fact”.
The appeal was allowed, and Thibodeau’s disentitlement to benefits was limited to the duration of his suspension. An
appeal was allowed by the Appeal Division. Thibodeau brought an application for judicial review.
The application for judicial review was dismissed. The agreement was a new fact, since it was reached after the Board of
Referees’ first decision. Since Thibodeau relinquished the right to be reinstated under the terms of the agreement, the
Board of Referees should have considered whether he was disqualified from receiving benefits in any event. Thibodeau
had the burden of establishing that he was entitled to benefits, namely by demonstrating that the relinquishment of his
right to reinstatement was attributable to something other than the $2,000 payment he received “for relinquishing his
right to reinstatement”. The only result was a determination that Thibodeau was disqualified from receiving benefits for
voluntarily leaving his employment. Regardless, the Appeal Division’s conclusion that the agreement did not have the
effect of changing the sanction, and did not allow the Board of Referees to vary the original decision, was reasonable.
The Appeal Division was entitled to rescind the second decision and uphold the original one.
Thibodeau v. Canada (AG), 2015 CLLC ¶ 240-001
THE ECONOMY
The statistics below provide a convenient overview of the latest Consumer Price Index (CPI) and other economic and
labour indicators of interest. Do you need detailed CPI figures for all of Canada, individual provinces, regional cities, or
specific goods and services (e.g., housing, food, and transportation)? If so, you can find the detailed CPI figures in the
“Consumer Price Index” tab division of Volume 1 at ¶ 26 et seq.
Cost of Living — Up
The Consumer Price Index figure for October 2015 on the 2002 = 100 time base, was 127.2, up 1.0% from the October
2014 figure of 125.9. On a monthly basis, the October 2015 percentage figure was up 0.1% from September 2015. On
the 1992 = 100 time base, the October 2015 All-Items figure was 151.4.
Industrial Production — Up
The preliminary, seasonally adjusted figure of industrial production for the month of August 2015, in chained 2007
dollars, was estimated at $356,055 million, up 0.5% from the revised August 2014 figure of $354,425 million.
Weekly Earnings — Up
In August 2015, the average weekly earnings (including overtime), seasonally adjusted at the industrial aggregate level
were $947.12, up 0.8% from $939.54 in August 2014, according to a preliminary estimate based on a sample survey of
reporting units.
LABOUR NOTES
Unemployment — Down
For October 2015, the seasonally adjusted number of unemployed persons totalled 1,352,300, down 12,200 from
September 2015, with an unemployment rate of 7.0% of an active labour force of 19,374,800. The employment level in
October 2015 was 18,022,500.
Work Stoppages — Down
For major collective bargaining agreements (those with 500 or more employees) in September 2015, there were 51,921
person days lost from 58 work stoppages. For September 2014, there were 654,980 person days lost from 75 work
stoppages.
11
LABOUR NOTES
12
LABOUR NOTES
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LABOURNOTES