Last chance agreements can be a last resort for employers

By Lorna Harris
|Canadian HR Reporter|Last Updated: 07/21/2003

An employee is chronically late, gets into fights with other employees, is rude to customers or clients, or perhaps steals from his employer. What is more, there is little understanding of, or remorse, shown for these improprieties.

How can an employer deal with the continued misbehaviour of a long-standing employee especially one covered by a collective agreement without having to go through costly and time-consuming arbitration?

The solution is often a Last Chance Agreement (LCA). These agreements are used in cases of long-term employees who have been warned time and again about unacceptable work habits and are on the verge of termination. To avoid costs of what could be a lengthy arbitration hearing, both the employer and union often agree to initiate an LCA, which will stipulate that the employee remain employed as long as the employee agrees to certain clearly defined standards of behaviour.

Because an LCA is, in fact, the last chance for the employee to improve performance it needs to be worded very carefully. In the case where the misbehaviour may be due to an underlying disability (for example, alcoholism), the employer must be especially sure to acknowledge the duty to accommodate the employee’s disability up to undue hardship. It must also set out definite strategies and expectations for the employee to follow in order to deal with a disability (for example, joining a rehabilitation program for substance abuse).

An LCA can be drawn up only after repeated written warnings have been given to the employee. Unless there is a clear and compelling reason not to uphold the agreements — usually knowledge of facts or circumstances that are not available to the parties at the time of signing — arbitrators rarely overrule them.

An LCA is a useful tool for responding to workplace misbehaviour, but like a marriage, is not to be entered into lightly, as the following Ontario Labour Board ruling makes abundantly clear.

In this case, a bus operator with nearly 24 years of seniority grieved his discharge from work. The employer relied on an LCA that had been signed 17 months earlier and which followed on the heels of a lengthy disciplinary record. The employee had accumulated 28 warnings and suspensions over 13 years.

One of the first points of contention concerned the wording of the LCA. The employer held that the document was clear and the union argued that it was ambiguous. The union’s representative had wanted to include the adjective “legitimate” before “complaints” when the parties had drawn up the original agreement. However, the employer had refused because it doubted that they could agree on what a legitimate complaint consisted of.

The employer assured the union that it would conduct normal investigations of all complaints and would not act on frivolous complaints, in other words, those that could not be attributed to a named complainant. If the employee’s tally of attributable complaints averaged more than the number for all employees over the subsequent 24 months, he would be terminated with no further recourse. The grievor also agreed to take a refresher course in operator training, to adhere to his schedule and to accept a six-day suspension.

All remedial efforts proved to be futile, and within just 10 days of signing the LCA, the operator received a complaint that he had turned left on a red light and cut off an approaching vehicle — the first of the 17 complaints that would be filed against him within 17 months of agreeing to the LCA (a rate that was at least four times greater than the average of his peers in the same period). The complaints chiefly concerned either his driving habits (seven) or his rudeness to customers (10).

On one occasion, a complainant stated that the operator, who was “driving like a maniac,” hit a snow bank because he was pouring himself a cup of coffee and hit another snow bank after losing control. An 80-year-old passenger reported that he had refused to tell her where her destination stop was, saying he didn’t look at street signs or as he put it, “things that don’t move.”

The union argued that the complaint-taker was “out to get” the grievor; that the complaints should be given little weight because none of the passengers and investigators were called to testify personally; and that while the grievor admitted to signing the LCA, his actions were excusable since they were those of a “desperate man.” In addition, the union argued that he had improved his driving habits and his attendance and that the complaints were mainly petty.

The arbitrator disagreed. She did not accept the argument that the transit authority’s complaint-taker had a negative prejudice against the driver as her job was merely to write down the details of the occurrences and not to confirm the identities of the drivers or the details of the incidences. The arbitrator stated that having to subpoena all the complainants and inspectors was both impractical and unpalatable, especially since the grievor admitted to being involved in 13 of the complaints. Nor did she find that the complaints about customer service were trivial. She cited several examples that were particularly egregious. In one instance, the employee drove past an elderly woman standing three or four feet away from a drifted-in bus stop during a snowstorm. The LCA was upheld.

If nothing else, this case underscores the need to have precise agreement wording, assiduous followup and accurate reporting of that followup. It also indicates the great lengths employers will sometimes go in order to give employees the opportunity to change when their conduct is continually beyond the pale.

For more information: An arbitration between the Hamilton Street Railway Company and the Amalgamated Transit Union Local 107, before P. Knopf – Sole Arbitrator. Dated November 16, 2000 published in CLV Arbitration Report LVI3158-1.

Lorna Harris is the assistant editor of CHRR’s companion publication CLV Reports, a newsletter that reports on collective bargaining and other issues in labour relations. She can be reached at (416) 298-5141 ext. 2617 or by e-mail at lorna.harris@carswell.com.

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