Wrongful Dismissal and Association Employees

Wrongful Dismissal and Associations

Can members of staff associations sue their empl0yers for wrongful dismissal?  According to the B.C. Court of Appeal, the answer is no if there is a valid employment agreement in place and a recognized association.

In the case of Ferrari v. University of British Columbia, the employee had been an Asset and Material Management Supervisor, working for the University of British Columbia.  At the time he was promoted to this supervisory position, he signed an employment agreement.  The agreement included a term that the employee must become a member of the AAPS (Association of Administrative and Professional Staff), which would be the bargaining agent for certain managerial level employees.  AAPS had grievance and arbitration agreements in place with UBC.

In 2010, Mr. Ferrari’s employment was terminated, allegedly for just cause as a result of “fraudulent use and sale of University vehicles.”  Mr. Ferrari denied these allegations and contacted AAPS to file a grievance.  AAPS decided that it would not proceed with a grievance or take the matter to arbitration.  AAPS felt that there was no reasonable prospect of success.  Mr. Ferrari was therefore left without a remedy.  So he filed a wrongful dismissal lawsuit against UBC in the B.C. Supreme Court.

B.C. Supreme Court Decision

UBC brought a motion to stay the proceedings, which would effectively terminate Mr. Ferrari’s lawsuit.  UBC was successful.  The B.C. court held that there was a valid arbitration agreement in place, and Mr. Ferrari was stuck with it even if the association (AAPS) did not take the matter through the process.  The court recognized that since the association was not actually a union, Mr. Ferrari could not complaint to the Labour Relations Board about unfair representation.  Nevertheless, the B.C. court stayed the action and noted that Mr. Ferrari would have the option of bringing a lawsuit against the association for failing in its duty to represent or for breach of fiduciary duty.  The court did not comment on the likelihood of success of either of these types of actions, which would probably be very slim.

B.C. Court of Appeal

Mr. Ferrari appealed to the B.C. Court of Appeal.  He argued that he should not have been treated as a “party” to an arbitration agreement since he had no control over the process and his case was never taken to arbitration.  He also argued that it would run counter to the interests of justice to deny him any kind of remedy.

The Court of Appeal dismissed the appeal for the following reasons:

1.  It held that Mr. Ferrari was a party to the arbitration agreement since his employment agreement incorporated the arbitration agreement by reference.  In other words, this was similar to the situation involving a collective agreement in a unionized context.  Mr. Ferrari had turned over all of his rights of representation to AAPS when he signed the employment agreement.  Ouch!.

2.  While the Court of Appeal speculated that there may be a deficiency int he AAPS by-laws, that would be a matter between Mr. Ferrari and AAPS and would not involve UBC.  In other words, Mr. Ferrari was stuck with the arbitration clause even though AAPS decided not to take the case to arbitration.  The B.C. Court of Appeal reviewed numerous cases in this area, primarily in the unionized context, and concluded that an employee who is represented by an exclusive bargaining unit in this type of situation is simply out of luck if the association will not proceed.  The only remedy is a claim for unfair representation against the association, where the employee must prove that the association has acted in a manner that is “arbitrary, discriminatory or in bad faith.”    Here is the court’s conclusion on this point:

“By accepting employment in an AAPS position, Mr. Ferrari agreed to appoint AAPS his exclusive bargaining agent with the power to decide whether to advance, settle or arbitrate grievances….”

and

“As between Mr. Ferrari and AAPS, it may well be that the Association’s bylaws are inadequate to ensure the necessary scrutiny of the decision not to proceed with his grievance.  However, that is not an issue that arises between Mr. Ferrari and UBC such that Mr. Ferrari should cease to be bound by the arbitration clause.”

Finally the court concluded that “it is well recognized in the history of labour relations that the model of exclusive representation of employees by their association or union carries with it a correlative transfer of authority over the grievance process subject only to the association’s duty of fair representation.”

Conclusion:

This case illustrates the problems with the “exclusive jurisdiction model” of labour relations in Canada in unionized workplaces.  When the union or association is supportive of the employee, the employee has a chance to be reinstated and is provided with representation at no charge.  This can be great and it can sometimes provide a much better remedy than an employee would have had under Canadian common law.

If, however, the union or association chooses not to proceed with a grievance, the employee is left without any real remedy.

The argument that an employee has the alternative of suing the association for “failure to represent” or for “breach of fiduciary duty” is quite unconvincing.  Employees have a very low rate of success in these types of cases, whether at common law or brought as “unfair representation” cases in labour boards across the country.  More often than not, these types of proceedings simply cause the dismissed employee to incur legal fees without getting anywhere.

A dismissed employee should have the right to file a wrongful dismissal lawsuit if the union or association will not proceed or if the employee would prefer this approach.  Given the huge significance of a person’s employment, people should have the right to fight a dismissal decision and to decide how far they wish to go in that fight.  There are many countries in the world in which unionization does not deprive employees of the right to advance their case, even without union backing.

Employers argue that this subjects them to the potential of a multiplicity of proceedings.  While that is true, the Canadian legal system has cost sanctions for lawsuits that are unsuccessful.  There is a balance here between the employer’s right to avoid inconvenience and the fact that employee is left without a remedy when dismissed from a long service position.

Unions and associations also oppose this approach, since they wish to have exclusive control over the bargaining process, relations with the employer and their own costs.  But if the union is not obligated to take the case forward and will not permit the employee to take it forward, this exclusive jurisdiction is useless to some employees, at a time when they most need this support and representation.

The B.C. Court of Appeal decision likely reflects the law as it exists in Canada today.  But maybe it is time for the Supreme Court to revisit this matter and look at other alternatives to “exclusive representation,” particularly in situations involving employees left without real remedies.

Ontario Div. Ct. Overturns Whacky Arbitration Decision: No Return to Work for Exhibitionist

The Ontario Divisional Court has overturned a controversial arbitration decision.  In January 2013, an arbitrator ordered an exhibitionist Transportation Enforcement Officer back to work after he had been criminally convicted of committing indecent acts in public.  The grievor had been conditionally discharged of his criminal counts.  We wrote about the decision here.

The officer had been arrested for masturbating in public near a girls’ school.  He was discharged by his employer for just cause.  The case went to arbitration and the arbitrator, Loretta Mikus, somehow concluded that the officer would not be impeded from performing his duties, despite that fact that he had been convicted and conditionally discharged of these counts of public indecency.   The grievor had only been with the MTO at the time for approximately two years.

Not surprisingly, the Crown brought an application for judicial review.  In a decision released on December 10, 2013 in Ontario (Transportation) v. OPSEU (2013 ONSC 7227), a three judge panel of the Ontario Divisional Court unanimously overturned the arbitrator’s decision.

The Divisional Court disagreed with a number of the key findings of the arbitrator and quashed the decision for several reasons:

1.  The arbitrator had incorrectly misstated the likelihood of the grievor re-offending.  The Divisional Court cited the evidence of Dr. Dickey (actual name) that the long term prognosis was “at least a moderate risk of re-offence.”  The arbitrator had downplayed this risk;

2.  The Divisional Court held that the grievor’s conduct would clearly damage the employer’s reputation and the arbitrator had diminished this factor;

3.  It was unreasonable for the arbitrator to conclude that the grievor could perform his duties satisfactorily as he would be required to give credible evidence in court.  His ability to do this would be significantly compromised.

4.  There was evidence that other employees would be reluctant or unwilling to work with the grievor if he was reinstated.  The Divisional Court noted that it would be perfectly understandable that female employees would be reluctant to work with this grievor.

5.  The arbitrator improperly diminished the seriousness of the criminal charges that the grievor had faced and the conduct for which he had been charged.

6.  The arbitrator understated the effect on workplace morale and the knowledge of the other employees of the events in question.

In a scathing attack on the arbitrator’s decision, the Divisional Court had this to say in summary:

“…the Board unreasonably diminished the Millhaven criteria, erroneously interpreted or ignored relevant evidence, and understated the importance of the grievor’s conduct in the context of his work as a TEO.  This led the Board to unreasonably conclude that termination was not appropriate.”

Accordingly, the Divisional Court overturned the arbitrator’s decision and upheld the MTO decision to discharge the grievor for just cause.

While it is generally quite difficult to review an arbitrator’s decision successfully in the labour context, this case demonstrates that whacky decisions can be overturned.  As the Divisional Court concluded, it would be unreasonable for the Ontario Ministry of Transportation to be expected to continue to employ an inspection officer who might, at any time, hand out something other than tickets and fines.

It would now be up to the union to decide whether to try and have this case appealed to the Ontario Court of Appeal.  It seems that the likelihood of success would be quite minimal, given the cogent and detailed reasons of the Divisional Court.

 

 

 

 

 

 

Crown Employee Performing Indecent Acts: Ordered Back to Work

When is off-duty conduct considered “just cause” for termination of employment?  This was the question that an arbitrator of the Ontario Grievance Settlement Board recently answered.  The case, Ontario Public Service Employees Union (Richard) and The Crown in right of Ontario (Ministry of Transportation) (GSB#2010-2164), illustrates the high level of misconduct that unionized employers must demonstrate in order to uphold the dismissal of an employee.

In this case, a Transportation Enforcement Officer was convicted of two counts of Performing Indecent Acts.  The employee was dismissed for just cause.  The dismissed two-year employee was caught masturbating in public, on an outdoor trail in the Welland area, near a girls’ school.  Two young girls witnessed the incidents and were “traumatized.”  The grievor was not on duty at the time and was not in uniform…in fact, apparently, he was not actually wearing anything.

At the time of his arrest, and at the hearing of this matter, the grievor maintained that he harboured some animosity towards women and towards his ex-girlfriend in particular.  He was not able to provide any genuine reassurance that this conduct would not continue.  He admitted to ten previous incidents of performing indecent acts, but he had only be charged with four counts and was only convicted on two of these charges.  The grievor, of course, would be regularly required to work with women in his job, including co-employees, police officers and members of the public.  He argued that he should be reinstated and that the employer’s decision to fire for just cause should be overturned.

Arbitrator Loretta Mikus noted that the grievor chose an area that was near a girls’ school and would likely encounter young girls.  However, she found that there was no evidence that he actually assaulted anyone or that he was in possession of any kind of child pornography.  Apparently, he was acting alone at the time he was caught in the act, red-handed.  Moreover, neither the public, nor the employee’s co-workers knew about the case, which was not publicized widely.

At his criminal trial, the grievor was given a conditional discharge of his criminal convictions with a three year probation, including a condition that he stay off of any recreational waterway trails.  The arbitrator held that these acts were at the “lesser” end of acts attracting criminal sanction and that the probationary restrictions would not impede the grievor from being able to perform the duties of his job.

Ultimately, the arbitrator ordered that the grievor be returned to work without back pay.  The grievor had been first suspended in 2008 and had been on a paid leave of absence until the time of his criminal trial in 2010.  After pleading guilty, he was placed on a leave without pay by his employer for almost three years.  As a result of the arbitrator’s award, he has now been ordered back to work without any of the three years’ back pay.

Counsel for the Ministry argued that this kind of case might be quite distasteful for most members of the public who would have thought that this kind of off-duty conduct would be incompatible with the duties and responsibilities of an Enforcement Officer who is required to enforce and uphold the law.  However, the arbitrator felt that the grievor deserved a “second chance” even though he had only been with the Ministry for approximately two years.  This conduct was not “just cause.”

It remains to be seen whether the Ministry will seek judicial review of the decision.  To date, it is probably fortunate for the grievor that the case has not had nearly as much public exposure as his private parts.

 

 

 

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