January 21, 2009
Previously published on December 17, 2008
A recent decision of an Ontario court reminds us about the ability of a union and a company to specify in their collective agreement what the penalty will be for certain employee misconduct. The case involved a municipal transit system. The collective agreement had a long list of behaviours that "shall conclusively be deemed to be sufficient cause for the dismissal of an Employee". The relevant misconduct in this particular case was "accidents through carelessness, negligence or disregard of ordinary safety precautions". An employee had been fired due to an accident and had filed a grievance. The case went to arbitration under a clause that said "nothing herein contained shall prevent an Employee from taking a discharge case through the Grievance procedure to determine whether or not the act complained of was committed". Despite the clear language specifying the penalty, the arbitrator decided that he could interfere and substitute a lesser penalty because the conduct was not "flagrant" enough. A panel of 3 judges in the Divisional Court disagreed and overturned the arbitration decision because the conclusion was "unreasonable and legally incorrect". It was the view of the court that the arbitrator's decision was an unauthorized amendment to the collective agreement. Further, the arbitrator had ignored the statutory provision, which is present as well in other jurisdictions (e.g., s. 142(2) of the Alberta Labour Relations Code), that only gives arbitrators the power to substitute penalties when there is not a "specific penalty" for an infraction. The decision is a good reminder that unions and employers can effectively predetermine penalties for misconduct they agree is intolerable, without having to worry about later legal challenges and ramifications. Under the pressure of the duty of fair representation, many grievances are carried to arbitration by trade unions when the union would rather agree that just cause exists. In contrast, this case highlights one method to jointly settle these agreements on a proactive basis.
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