Report from the Chair
By Amy Gough Farnworth
Writing this note at the beginning of December, I am pleased to report on another highly successful annual joint conference, held in Ottawa with both the National Administrative Law Section and the National Privacy Law Section.
Compensation in lieu of reinstatement: A deviation from DeHavilland
By Andrew Zabrovsky
In an interesting supplementary decision following an award granting compensation in lieu of reinstatement, an Ontario arbitrator strongly repudiated several of the well accepted and long propagated concepts which have been applied to this remedy.
Three strikes, you’re out: how many steps must an employer take in successfully implementing progressive discipline?
By Brad Proctor
It is a question employers commonly ask of their legal counsel: “How many warnings must be given before an employee can be terminated?” The often frustrating answer is, "It depends."
What is sufficient to warrant dismissal for incompetence without prior warning?
By Katrina Edgerton-McGhan and Christie Lee
The vast majority of cases regarding employee incompetence involve habitually underperforming employees subject to progressive discipline. The courts have held, however, that an employee can be dismissed for incompetence without warning.
At the intersection of discipline, human rights, and privacy: The strange case of Dr. Gabor Lukacs
By Andrew Langille
Progressive discipline can be a thorny issue fraught with pitfalls at the best of times. What happens when a case appears on your desk that doesn’t fall into traditional categories, and is already embroiled in litigation in multiple forums?
Damages in lieu of reinstatement: Not a stealth remedy
By Andrea Frisby
Damages in lieu of reinstatement is a "rare and exceptional" discretionary remedy, available to arbitrators when the arbitrator concludes that an employer’s decision to discharge a unionized employee was excessive, and the employment relationship between the parties is incapable of being restored.
Implementing discipline? Watch out for these complicating facts
By Kevin Robinson
I learned early in my career that when I receive a telephone call from an employer who just wants a “quick and dirty” opinion on the appropriate level of discipline to impose in a certain set of circumstances that there is no such thing as a good “quick and dirty” opinion.
Case Update: Some flexibility for employers in applying progressive discipline policies?
By Koml Kandola
A recent decision under Part III of the Canada Labour Code illustrates that in certain circumstances, an employer may impose a disciplinary response not expressly set out in its progressive discipline policy.
Report from the Chair
By Amy R. Gough Farnworth
Greetings L & E Section members from coast to coast to coast!
Writing this note at the beginning of December, I am pleased to report on another highly successful annual joint conference, held in Ottawa with both the National Administrative Law Section and the National Privacy Law Section. Credit must be extended to our Section representatives on the steering committee for this event – Katherine Ford of Sherrard Kuzz LLP in Toronto, Ontario and Len Polsky, of MacPherson Leslie and Tyerman, LLP in Calgary, Alberta – a thousand bouquets for a job well done!
Those of you who were in attendance will have your own highlights, but many registrants noted their deep pleasure in experiencing what has now become a “tradition” – the “fireside chat” with a “Supreme.” This year, our fearless Past Chair, Pierre Moreau, sat down for an interview with Madam Justice Louise Charron. She imparted some great wisdom, including a tip for “work/life balance,” on the importance of finding a way to “clear your mind,” since often you simply cannot clear your desk.
Mark your calendars for next year’s event on November 25 and 26, 2011 where we promise to continue to provide quality PD with the assistance of the National Administrative Law Section.
While in Ottawa in November, the Section Executive held a very successful meeting with labour specialists from the federal Department of Justice. An in-depth canvassing of significant cases for 2010 in the federal context was of keen interest and debate (see cases). Presentations were also given by federal Department of Justice specialists dealing with international labour agreements and the International Labour Organization (ILO).
The National Section Executive also met with the Canada Industrial Relations Board (CIRB) Chair, Ms. Elizabeth MacPherson. Ms. MacPherson advised that consultations are underway to examine procedural adjustments for the CIRB, some of which may result in amendments to the CIRB regulations. It was reported that a formal consultation document is anticipated to be released for comment in the spring of 2011. The Executive will be calling upon members of the Section for input once we receive this document in order to consider making formal comment and suggestions through the CBA to the CIRB.
Following the Conference, Section Executive conducted a very productive in-person meeting in Ottawa. There are many Section initiatives underway for year ahead – watch for developments in future reports from the Chair and on the Section website.
Compensation in lieu of reinstatement: A deviation from DeHavilland
By Andrew Zabrovsky
In recent years, the concept of compensation in lieu of reinstatement has gained some traction as an alternative remedy for arbitrators navigating difficult employer-employee relationships in the unionized setting. They have recognized that compensation in lieu is an exceptional remedy that is to be used sparingly. Nonetheless arbitrators have developed a body of case law on this issue which provides clarity regarding when compensation in lieu is appropriate, the rationale behind its use and the calculus employed to determine the level of compensation commensurate with the cessation of a unionized employment relationship.
In Hendrickson Spring (Stratford Operations) v. United Steel Workers of America, Local 8773 (Ewaniuk Grievance), a supplementary decision following an award granting compensation in lieu of reinstatement, Arbitrator Solomatenko took a magnifying glass to this body of case law, and strongly repudiated several of the well accepted and long propagated concepts which have been applied to this remedy.
This article provides a review of the jurisprudence in this area as it existed prior to the Hendrickson Spring decision, and examines how this decision may alter the manner in which arbitrators think about compensation in lieu of reinstatement.
Click here to read the full article
Andrew Zabrovsky is an associate practicing in the Toronto office of Hicks Morley Hamilton Stewart Storie LLP
Three strikes, you’re out: How many steps must an employer take in successfully implementing progressive discipline?
By Brad Proctor
A commonly asked question by employers of their legal counsel is, “how many warnings must be given before an employee can be terminated?”
The often frustrating answer is, "It depends." The reason for the perceived lack of clarity in this answer is that a number of factors must be taken into consideration in determining the necessary number of steps in progressive discipline, including: the nature of the offense; the employee’s length of service/seniority; the employee’s disciplinary record; any applicable mitigating factors; and the employee’s rehabilitative potential.
This commentary will review recent cases where progressive discipline has been applied in light of the foregoing factors, in situations of:
- Insufficient progressive discipline;
- The classic ‘three-strike’ progressive discipline; and
- Due to lack of rehabilitative potential, progressive discipline was not needed.
(1) Insufficient progressive
Discipline Cases where employers have applied insufficient or flawed progressive discipline are too numerable to mention. One recent example is from the decision of a federal adjudicator under the Canada Labour Code in Phantom Freightlines Ltd. v. Gosse, [2009] C.L.A.D. No. 154 where the adjudicator noted:
“The Employer relied on other incidents of insubordination leading up to the present incident and took the position that the culmination of incidents was sufficient cause to terminate employment. [...] There was insufficient evidence to establish that the prior incidents of insubordination were communicated to the Employee or that the Employer had warned the Employee of the possibility that termination for just cause could result if there were further incidents of insubordination.”
In addition to failing to adequately warn employees, employers often provide too many warnings or impose discipline that is not progressive in nature. In both situations, employers risk a finding that they have not sufficiently warned employees of the consequences of repeated misconduct or have condoned the unwanted behaviour.
(2) The classic ‘three-strike’ progressive discipline
Consistent with the title of this commentary, employers often ask whether the classic “three-strikes, you’re out” is sufficient to successfully uphold a termination. The answer depends upon the nature of the misconduct in question. For example, three-step progressive discipline may be successful for insubordination; however, for more minor misconduct (i.e. tardiness, minor quality issues, etc.), three-step progressive discipline may be too aggressive. The key is to ensure that the disciplinary penalty imposed is consistent with the underlying misconduct and applied in a progressive manner. In other words, an employer’s progressive discipline is flawed where it imposes verbal, written warnings and suspensions sporadically in a non-progressive manner.
In Haley Industries Ltd. v. United Steelworkers, Local 4820, [2009] O.L.A.A. No. 155 (McCarroll Grievance), the arbitrator determined that the employer's classic “three-strike” approach to progressive discipline was sufficient.
In this case, the employee worked as an inspector in an engine parts casting plant. The employee's first suspension arose when he failed to attend work despite his supervisor’s refusal to grant him his requested leave. The second suspension arose when the employee harassed a supervisor. The “third strike” and culminating incident arose when the employee read a confidential letter on his supervisor's desk when he had specifically been told not to.
Despite the employee's ten years of seniority, the arbitrator held that the employer’s application of progressive discipline and assessment of the employee’s lack of future rehabilitative potential justified the discharge in noting as follows:
“... In my view, it was not unreasonable for the Company to conclude that progressive discipline would not have the effect of correcting the grievor's attitude towards supervision and its policies. [...] There is scant evidence before me on which to conclude that the penalty imposed by the Company should or ought to be reduced.”
(3) Due to lack of rehabilitative potential, progressive discipline was not needed
Where misconduct is so serious that it completely destroys the possibility of any future viable employment relationship, arbitrators, tribunals and courts have routinely held that termination may be justified in the first instance. Such forms of misconduct often relate to theft, assault, harassment, drug-related offenses and otherwise.
However, there are also situations where less serious misconduct can result in termination absent the application of progressive discipline where it is found that applying progressive discipline would be futile.
In Siemens Fossil Power Generation v. CAW, Local 504, [2010] O.L.A.A. No. 288 (Barber Grievance), the employee worked as a machine operator and was terminated for incidents of absenteeism not related to any illness or disability.
When questioned about the underlying reasons for his absence, the employee told his supervisor that he did not foresee any improvement. The basis of the union's grievance was that the employee had not been afforded the benefit of progressive discipline, and in fact had no prior discipline at all until his discharge. Furthermore, the union argued that the fact that his previous attendance issues, having been unaddressed, lulled the employee into a false sense of security.
The arbitrator's conclusion with respect to the company's failure to apply progressive discipline was as follows:
“In my view this is one of the rare cases where progressive discipline would have been an exercise in futility, Mr. Barber defiantly declared that the Company couldn't expect improved attendance in future and that he would put his own business interests before the Company's. He showed no remorse at the time, nor at the hearing."
Concluding remarks
In applying progressive discipline, employers should keep the following principles at the forefront of any decision-making:
- Ensure that discipline is clear, progressive and expressly warns of the consequences of repeated occurrences of misconduct;
- Avoid “lulling employees into a false sense of security” by using disciplinary threats that are not followed through, or providing too many warnings; and
- Dispense with progressive discipline where there is strong evidence of (a) serious misconduct that has completely destroyed the viability of an ongoing employment relationship, or (b) no rehabilitative potential in the particular employee.
Brad Proctor is a partner in the Halifax office of McInnes Cooper.
What is sufficient to warrant dismissal for incompetence without prior warning?
By Katrina Edgerton-McGhan and Christie Lee
The vast majority of cases regarding employee incompetence involve habitually underperforming employees subject to progressive discipline. Usually dismissing an employee for just cause because of incompetence requires the employer to show:
- The level of job performance that it required and that the level required was communicated to the employee.
- That it gave suitable instruction to the employee to enable him to meet the standard.
- That the employee was incapable of meeting the standard.
- That there had been a warning to the employee that failure to meet the standard would result in his dismissal.
The courts have held, however, that an employee can be dismissed for incompetence without warning.
Click here to read the full article
Katrina Edgerton-McGhan is a lawyer and Christie Lee is a student-at-law at Scott Hall LLP in Calgary.
At the intersection of discipline, human rights, and privacy: The strange case of Dr. Gabor Lukacs
By Andrew Langille
Progressive discipline can be a thorny issue fraught with pitfalls at the best of times, but what happens when a case appears on your desk that doesn’t fall into traditional categories and is already embroiled in litigation in multiple forums. A situation has arisen at the University of Manitoba (“the university”), which stands at the intersection of labour, privacy, human rights, and administrative law.
Dr. Gabor Lukacs, a young professor in the Department of Mathematics, is the central player in this matter and is currently serving a three-month suspension without pay due to his objections about the manner university administrators handled a request for accommodations from a Ph.D. student who had been diagnosed with extreme exam anxiety.
Background facts
In March 2009 the student failed the candidacy examination for the second time. This would normally require a student to withdraw from the program. On June 26, 2009 the student filed an appeal with John Doering, the Dean of the Faculty of Graduate Studies, requesting accommodation for his disability. On July 16, 2009, Doering granted the request.
What followed were discussions between Doering and Dr. Joseph Williams, Acting Chair of the department, about what form the accommodations will take. Dr. Williams suggested that the student be given double time to write the exam and that it be staggered over two days, Doering countered that an oral exam should be given to the student. No agreement was reached and on September 29, 2009, Doering announced he was waiving the requirement that the student pass any sort of examination.
Prior to this, Lukacs had been not privy to any information relating to the student’s request for accommodations. On October 29, 2009, Lukacs was elected to a committee overseeing graduate studies in math. Lukacs was briefed on the matter and over November and December challenged Doering’s jurisdiction and decisions regarding the appeal and accommodations through various avenues, arguing that internal regulations required that an internal panel decide the student’s appeal.
The university disciplined Lukacs on December 15, 2009, for allegedly violating the student’s privacy and engaging in harassment. The university demanded that Lukacs cease pursuing the matter any further. Later the University of Manitoba Faculty Association responded by filing a grievance.
From January to August 2010, Lukacs was on leave. In late August the department became aware that the student hadn’t completed all of the requisite coursework normally required for a Ph.D. to be awarded. In a meeting on August 30, 2010, Doering took the position that the student shouldn’t have to complete any further coursework and that previous undergraduate coursework should be upgraded to the graduate level to satisfy any outstanding requirements. Subsequent to this meeting, Doering approved the upgrade, which cleared the way for the student to graduate.
Lukacs returns
Lukacs returned from leave in September and continued to challenge the decisions, but was rebuffed by various internal decision makers. On September 23, 2010, Lukacs filed an application for judicial review with the Court of Queen’s Bench of Manitoba requesting an injunction to block the university from granting a Ph.D to the students and various other remedies.
On October 6, 2010, Lukacs received a letter from Dr. David Barnard, President of the University of Manitoba, which stated he was being suspended for three months without pay due to: violating the “University’s policies on FIPPA and PHIA in your September 21 2010 submission to the Alumni Association; in your September 23 2010 Notice of Application filed in the Court of Queen’s Bench; and in your 27 September 2010 Affidavit filed in support of your Application”; for being “insubordinate in continuing to reference a student’s personal and personal health information contrary to the instructions given to you by your Dean; and for having “engaged in a pattern of behavior” which the “University considers to be harassment”.
The faculty association has filed a grievance over the suspension with dates scheduled for arbitration early next summer; additionally, Lukacs’ Application will be argued early next year with a hearing scheduled for January 20, 2011. On November 29, 2010, Lukacs was summoned for a meeting with Dr. Barnard and was told to shut down his website which was publishing materials about the case due to the university’s concerns that this was harassment of the student.
What can we learn from this situation?
Internal disputes can quickly devolve into nightmare scenarios where employees are pleading their case to the court of public opinion and onto the Internet to build support. With the rise of communications technology, organizations need to understand the need to guard their online reputation closely, engage in counter messaging, and pursue litigation if necessary.
Stories highly critical of the university’s handling of this matter have appeared in Maclean’s, the National Post, and various other publications. Lukacs seems to be receiving overwhelming support from the media, students, and academics around the world. This seems to be a situation where while the university may well win the various legal battles it may lose the larger war with Lukacs having framed the discourse surrounding the situation.
This case highlights the need within organizations to: strictly control access to and compartmentalize confidential information; ensure that employees receive extensive training about the implications arising from human rights codes and statutes governing privacy; have explicit policies governing privacy and human rights that address both substantive and procedural consideration; engage in proactive management of sensitive situations; ensure that managers develop well rounded conflict resolution skills; and respond to legitimate concerns about administrative power from employees.
Overall, as lawyers we need to provide proactive strategic advice when it comes to progressive discipline, but there is a need to remind clients to ensure internal policies, training, and decision making processes are reviewed and updated frequently to respond to wider developments in the law, technology, and society. Failing to do so will open the door to situations like the one described in this article.
Andrew Langille is a Toronto-based lawyer and is currently an LL.M. student at Osgoode Hall Law School. He writes the Youth & Work Blog about workplace issues facing youth. He can be contacted at andrewlangille@gmail.com or at 416-525-1082.
Damages in lieu of reinstatement: Not a stealth remedy
By Andrea Frisby
Damages in lieu of reinstatement is a “rare and exceptional,” discretionary remedy, available to arbitrators when the arbitrator concludes that an employer’s decision to discharge a unionized employee was excessive, but the employment relationship between the parties is incapable of being restored.
Since 2009, the British Columbia Labour Relations Board ("Board") has considered an award of damages in lieu of reinstatement in only two decisions. In both cases, the union challenged an award of damages on the basis that the arbitrator making the award had failed to accord the parties a fair hearing. The result of the decisions is that while an award of damages remains within the discretion of the arbitrator, the arbitrator may only exercise the discretion on the submissions of the parties. The discretion does not extend to making an award of damages unilaterally.
In Westfair Foods Ltd. v. United Food and Commercial Workers’ Union, Local 247, [2009] B.C.C.A.A.A. No. 36 (Westfair Foods), the union challenged the scope of the arbitrator’s exercise of his discretion to award damages in the absence of submissions. In the case, the employer accused a supermarket cashier of dishonesty. After a long grievance and discipline process, the employer dismissed the cashier. The union grieved the dismissal and the grievance proceeded to arbitration. The arbitrator found that the dismissal was excessive. However, he awarded damages in lieu of reinstatement because he found that the relationship between the parties was “shot” and “incapable of being rebuilt”. The arbitrator's findings and award were based on his observations at the hearing since neither party had made submissions regarding damages.
The union challenged the award before the Board, on the basis that the arbitrator had denied the cashier a fair hearing by imposing an award of damages without submissions.
The Board held that the arbitrator had over-extended his discretion by awarding damages in lieu of reinstatement without receiving submissions from the parties. It held that before an arbitrator exercises his or her discretion to award damages, he or she must receive submissions on that particular remedy from the parties. If the parties had not done so during the hearing, the arbitrator should give notice to the parties and receive submissions before making a decision. In the result, the Board set aside the award and remitted the matter to the arbitrator for reconsideration of the remedy.
By contrast, in British Columbia (Ministry of Public Safety) v. British Columbia Government and Service Employees’ Union, BCLRB No. B225/2009, the Board upheld an award of damages in lieu of reinstatement, finding that the parties had been accorded a fair hearing. In that case, a corrections officer, working in a supervisory role, set up an unauthorized email account and sent email tips from work to the media. After a lengthy investigation, the employer discovered the source and dismissed the corrections officer. The union grieved the dismissal. At the subsequent arbitration, the arbitrator held that the dismissal was excessive but that the circumstances were not sufficiently extreme to award damages in lieu of reinstatement. The arbitrator stated that demotion of the corrections officer would be a possible remedy. Since neither party had made any submissions on the specific remedy considered, the arbitrator requested additional submissions before making his order.
After a further hearing on the issue of remedies, the arbitrator reviewed the corrections officer’s behaviour in light of the traditional factors to be considered in awarding damages in lieu of reinstatement. In an apparent about-face from the first hearing, the arbitrator concluded that the employment relationship was incapable of being restored. He then exercised his discretion to award damages in lieu of reinstatement.
The union challenged the award of damages before the Board, arguing that having first decided that reinstatement was an appropriate remedy, the arbitrator could not change his mind on hearing further submissions. The Board disagreed and upheld the award. The Board held that while in the first hearing, the arbitrator had discussed a range of possible remedies and considered reinstating with demotion, the arbitrator nonetheless retained his full discretion to order damages in lieu after hearing the parties’ further submissions on the proposed remedy. Since the parties had had a full hearing on the issue of remedies, the Board upheld the decision.
The decisions illustrate that the exercise of the arbitrator’s discretion to award this remedy is tied to the parties’ rights to have a fair hearing, and to the remedies sought by the parties. Having identified the kind of exceptional circumstances that might warrant an award of damages in lieu, the arbitrator must seek submissions from the parties on the remedy before making such an award. The arbitrator should not surprise the parties with an award of damages in lieu of reinstatement without their submissions; it is not a stealth remedy.
Andrea Frisby is a lawyer at Valkyrie Law Group LLP.
Implementing discipline? Watch out for these complicating facts
By Kevin Robinson
I learned early in my career that when I receive a telephone call from an employer who just wants a “quick and dirty” opinion on the appropriate level of discipline to impose in a certain set of circumstances that there is no such thing as a good “quick and dirty” opinion.
While I think clients have suspected that I have simply tried to keep them on the phone in order to increase my bill, but I assure that it is not. Each decision on termination must take into account the particular and unique factors of every individual case.
The purpose of this article is to identify two significant types of circumstances in which you will want to be more careful when asking questions and advising your clients regarding the implementation of discipline. The intent is to provide very practical observations concerning how to identify these circumstances, and suggestions for how to help your client from falling into the pitfalls that can arise in these more complicated circumstances.
Attendance
There are a wide variety of scenarios which can complicate matters when attempting to manage attendance.
Before an employer can commence any attendance management process, which ultimately is likely to include discipline should the attendance issues continue, one must ensure that the absences counted against an employee can in fact be held against them. That is, to the extent that an absence is protected by statute or a workplace policy, an employer likely cannot rely on that absence in support of an attendance management process.
For example, most federally regulated employees have protection for sick leave under the provisions of the Canada Labour Code.
Most provincial employment standards statutes provide protection for days off work due to a variety of reasons, including sick days, compassionate care, emergency leave, bereavement, jury duty, and others. One must be scrupulous in ensuring that none of those protected absences are included in the decision to manage attendance; in the event that one or more is included, it may very well taint the entire process.
A client recently noted that one of its employees ensured that he/she took each and every paid sick day available to him/her every year; no more, no less. The employer (probably fairly) assumed that the employee was taking advantage of the policy and was intentionally taking days off when he/she was not in fact sick. The employer wanted to speak to the employee about this concern with a view to suggesting that they were acting, to some degree, in an inappropriate fashion.
However, where an employer has offered to pay someone for a certain number of sick days then I am of the view that that reflects an implicit understanding that the employee may very well take each of those days. Therefore, before considering discipline for attendance, one must be sure that the days for which the employee is being disciplined do not have protection under statute or policy unless the employer has good evidence that the employee has been untruthful about the reason for his or her absence.
Finally, attendance problems in many cases are linked to difficulties which might have protections under the relevant human rights legislation.
For example, an alcoholic who is habitually late; a single parent who takes more days off than most because the children cannot attend day care when they are sick; the person who sometimes doesn’t call in when they are off because they are suffering from depression. It is important to be aware of the potential for these types of explanations for absences and it is in most cases a good practice to have the employer ask the necessary questions before embarking on an attendance management process in order to allow the employee to explain their absences so that the employer has the opportunity to determine if accommodation might be necessary. While some employers resist because they are concerned about what they might find out, I suggest that one would prefer to have the information at that time, rather than finding out at an arbitration or upon receipt of a human rights complaint.
Avoiding perception of reprisal
Consider a worker who, after years of bad behaviour, is finally going to be managed properly but before the supervisor can schedule the discipline meeting, the worker gets hurt at work and is off work for 2 weeks. Consider an employee who has just brought a legitimate harassment complaint against her supervisor but then screams at her assistant. Consider a salesperson who has just announced that he is taking a parental leave commencing in 4 weeks just before he was about to be demoted for consistently failing to meet sales targets.
In each of these cases, it may very well be that the intention and facts behind the discipline are objectively legitimate. However, where an employee has protection from a policy or a statute which states that they are not to be subject to any reprisal for exercising their rights, it can be difficult to avoid the perception that the discipline is in fact related.
Unfortunately, the best way to avoid that perception is to allow time to pass and create a temporal gap between the personal circumstances (e.g. announcing a parental leave) and the imposition of a discipline. That may not be practical, and that may not be the best decision for the client from a human resources perspective. Where one cannot separate the events temporally, then exercise greater caution and ensure (a) the matter has been properly investigated and there is confidence in the evidence underpinning the discipline; and (b) the discipline imposed can be objectively justified from a legal perspective, and based on the client’s own past practices.
Finally, this is an additional reason why we should be encouraging our employer clients to ensure that they document their decision-making processes in a scrupulous fashion; a series of emails or notes which prove that the discussion around imposing discipline commenced days or weeks before the accident, or harassment complaint, or the announcement of a leave, will be very useful documents to introduce at an arbitration adjudicating a union’s grievance which alleges that the discipline was in fact a reprisal.
Conclusion
The circumstances described above can make a relatively straightforward situation rather complicated. However, asking the right questions and taking the additional steps necessary in those complicated circumstances will usually avoid the problems which could result if one were to give a client the “quick and dirty” opinion they asked for.
Kevin Robinson is a lawyer at Bernardi Human Resource Law in Mississauga, Ont.
Case Update: Some flexibility for employers in applying progressive discipline policies?
By Koml Kandola
A recent decision under Part III of the Canada Labour Code may bring some level of flexibility for employers when applying progressive discipline policies and specifically, to allow an employer to impose a disciplinary response not expressly referenced in the progressive discipline policy itself.
In Williams v. Cowichan Tribes, November 6, 2010 (Orr, Adj.), the employee commenced employment with Cowichan Tribes in April 1998 as a clerk in the Finance Department. As of May 2007, she held the position of payroll supervisor. The payroll supervisor position had access to, among other things, confidential employee and payroll information.
On October 16, 2009, the employer imposed a disciplinary demotion on Ms. Williams, demoting her from her supervisor position back to the previously held clerk position. The demotion also involved a reduction in pay of approximately 16%.
The factual circumstances leading up to the demotion are complex and relate to matters beyond the topic addressed in this paper. In brief, in the employer’s view, Ms. Williams had made use of confidential information about another employee, gained solely through her position as payroll supervisor, to attempt to receive a personal gain from Chief and Council. She also engaged in a vitriolic and unwarranted verbal attack against her supervisor in front of Chief and Council. The employer viewed this conduct as a serious breach of trust, particularly given the nature of the employee’s position and the sensitive nature of the information to which she had access. While Ms. Williams had relatively long service, she also had two prior warnings for unprofessional behaviour in the workplace. Accordingly, the employer concluded that she should no longer be permitted to occupy the supervisory position as it was a position of trust, and that a disciplinary demotion to her previous position was justified.
The employee filed a complaint under Part III of the Canada Labour Code alleging that the demotion constituted constructive dismissal and hence an unjust dismissal.
A hearing was held before an adjudicator. At the hearing, Ms. Williams argued, among other things, that Cowichan Tribes did not have a right to demote her. In particular, she relied upon the employer’s Human Resources Policy Manual, which governed the terms and conditions of employment of employees. The Manual included a progressive discipline procedure, which contemplated a verbal warning, written warning, 5 day suspension and ultimately termination. However, the provision also expressly provided that these were guidelines only, and that the employer reserved the right to vary the procedure up to and including dismissal.
The Manual also expressly identified various types of misconduct that constituted just cause for termination. Two of those enumerated examples were: use of confidential information gained in the course of employment for personal gain, and use of one’s position for personal gain.
The employer argued that the employee’s misconduct fell within these two examples and, as a result, if the misconduct was sufficiently serious to warrant summary dismissal, a disciplinary demotion was a fortiori also a justified response, even if demotion was not expressly identified as a disciplinary response under the progressive discipline policy.
The adjudicator agreed with the employer, finding that “it is clear that outright dismissal was a viable option. If so, a lesser discipline of demotion and re-assignment must be included in the forms of discipline contemplated in the employment contract”.
The adjudicator went on to consider whether the demotion constituted constructive dismissal and if so, whether the dismissal was unjust. The adjudicator concluded that while the demotion amounted to a constructive dismissal, it was not unjust – the misconduct was so egregious as to warrant immediate dismissal.
What can employers take from this case? In the writer’s view, this case gives employers some flexibility in choosing a disciplinary response to misconduct, and in certain circumstances, supports an employer’s ability to impose a disciplinary response that is not expressly identified as such in the progressive discipline policy. As the adjudicator noted in his decision, given the employee’s long service, the employer was concerned about the validity of an outright termination. Looking at the disciplinary options expressly referred to in the progressive discipline policy, the employee had already received two warnings, and the next step, i.e. suspension, would not have addressed the breach of trust that occurred or removed the possibility of such a breach happening again. Accordingly, the employer concluded that a response less than termination but significant enough to remedy the breach of trust was required, and hence concluded that a disciplinary demotion out of the payroll supervisor position was justified.
In short, this case supports the fact that a measured disciplinary response that considers all of the relevant factors can be upheld even where the response is not expressly set out as such in the progressive discipline policy.
Koml Kandola is a lawyer in the Vancouver office of Heenan Blaikie LLP
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