Last-chance agreement not end of story (Legal View)

British Columbia worker with addiction issues relapsed – but not while on the job and he self-disclosed the problem
By Jeffrey Smith
|Canadian HR Reporter|Last Updated: 12/01/2014

A British Columbia company discriminated against an employee when it terminated him for breaching a last-chance agreement after he failed an alcohol test, an arbitrator has ruled.

The 57-year-old worker, referred to as GH in the judgment, was a cook and deckhand for Seaspan, a marine transportation company based in North Vancouver. His duties included maintenance and safety on tugs, usually for two- to three-week trips. He was hired in 2003.

GH had a history of alcohol and drug abuse beginning in his childhood and continuing into adulthood. He also used prescription medication and experimented with harder drugs, resulting in depression, paranoia, reduced self-esteem and suicidal thoughts.

In 2005, GH became involved in attempts to establish an abstinence-based addiction treatment program at Seaspan. He promoted the program and, when faced with resistance from workers who thought it was a way to get rid of employees, he self-disclosed his addiction and entered the treatment program.

When GH was released from the program, he signed a return-to-work agreement where he agreed to abstain from drugs and alcohol for 24 months and granted Seaspan the right to demand testing if it suspected he was impaired. If GH breached the agreement, his employment would be “automatically reviewed.”

GH also signed a “contingency-monitored recovery agreement,” that stipulated an appointed monitor would administer random urine tests at least once per month for two years, and GH had to go to Alcoholics Anonymous and Narcotics Anonymous meetings. A treatment plan for his depression was also included.

GH successfully completed the two-year period without testing positive for alcohol or drugs. However, in May 2009, GH told Seaspan he had suffered a relapse. He didn’t have to attend a residential treatment program but he was put on a two-year monitoring and counselling program with a psychologist and meetings.

Worker suffered relapses

In February 2010, GH contracted pneumonia and his depression worsened. He self-medicated with marijuana cookies and tested positive for drugs on March 1. A few months later, in June, his doctor cleared him to return to work in his safety-sensitive deckhand job and he signed another monitoring agreement committing him to abstaining from alcohol and drugs, attending support group meetings, going to anger management counselling and undergoing random urine or blood tests, for a period of two years.

However, at a New Year’s Eve party, GH unwittingly ate cookies and cakes containing marijuana. He immediately reported to his monitor and tested positive for marijuana.

A doctor concluded GH was “treatment-resistant” and, therefore, unfit for a safety-sensitive job. GH was relieved of his duties while Seaspan considered other positions for him. The union filed a grievance.

In October 2011, they came up with a mediated settlement agreement that specified an independent medical assessment to determine if GH was fit for safety-sensitive work. 

If not, the company would place him in another job. If he was, he would be subject to a two-year monitoring agreement requiring abstinence from alcohol and drugs and random testing. Any positive test or breach of the agreement would result in immediate termination.

The agreement also stated it “satisfies the duty of the employer to accommodate to the point of undue hardship.”

The independent medical assessment indicated GH must completely abstain from drugs and alcohol and participate indefinitely in a recovery program, but if he complied, the prognosis was for a “sustained recovery and successful return to work.”

GH subsequently signed a return-to-work agreement for 27 months until January 2014, in which he had to maintain abstinence from drugs and alcohol, attend support meetings with a sponsor, undertake 12-step programs and participate in “rigorous medical monitoring.” 

Eventually, he would be placed back in his deckhand position. If he breached the agreement, “immediate termination” would be the result.

GH complied with the agreement without event until March 2013, when he suffered a knee injury at work. He was off work until July, during which time he continued with alcohol and drug testing.

On Aug. 13, GH was on a two-week assignment when he was told a test he did on Aug. 1 had come back positive. However, Seaspan had trouble finding a replacement so it let him work for another couple of days.

Once he was back, GH was told he would be kept on the payroll until the results from his “B” sample were confirmed. The sample also came back positive and GH’s employment was terminated for breaching the terms of the October 2011 settlement agreement.

Termination grieved

The union grieved the termination, arguing it was discrimination based on disability and contrary to the Canadian Human Rights Act.

The arbitrator noted the provision in the settlement agreement that stated automatic termination would be the result of GH breaching it made it a last-chance agreement. Though not part of collective agreements, the general view is that last-chance agreements “should be given contractual force unless there are strong and compelling reasons not do to so,” said the arbitrator.

However, last-chance agreements are subject to human rights legislation, making the agreement’s statement it fulfilled Seaspan’s duty to accommodate irrelevant, said the arbitrator.

GH’s drug and alcohol addiction constituted a disability — a fact acknowledged by Seaspan by mentioning the duty to accommodate in the settlement agreement, said the arbitrator. 

GH’s termination because of his relapse was adverse treatment related to that disability, and the primary reason was his addiction — establishing prima facie discrimination.

The arbitrator examined the requirements for determining whether prima facie discrimination was a bona fide occupational requirement:

•The purpose of Seaspan’s substance abuse policy was a drug- and alcohol-free workplace which, given safety-sensitive positions such as a deckhand, was rationally connected to the job.

•The policy was designed to provide guidance and treatment for those with addictions and establish means to test and monitor employees in safety-sensitive positions, and was adopted in “an honest and good faith belief that these requirements are necessary for legitimate work-related purposes.”

•GH relapsed four times in the previous four years, with Seaspan accommodating GH on three of those occasions. 

 “I conclude that four relapses in four years (since 2006, five relapses in seven years), in a safety-sensitive position, has satisfied the employer’s duty to accommodate to the point of undue hardship,” said the arbitrator.

“An additional factor in my analysis of the duty to accommodate to the point of undue hardship has been the settlement/last-chance agreement wherein all parties came to a similar conclusion.”

However, in GH’s favour, there was no evidence he used drugs or alcohol at work and he self-disclosed each time he relapsed.

After receiving treatment for his depression, GH was given medical clearance that he would be able to return to work despite his disability. The settlement agreement allowed that if it was determined GH could not return to work in a safety-sensitive job, another position could be found for him. 

Since the possibility of a non-safety-sensitive position was raised, the duty to accommodate would necessitate exploring such options, said the arbitrator.

Considering GH self-disclosed all his relapses, he was being treated for his depression as well as his addiction and his relapses were off-duty without any actual workplace misconduct, the arbitrator found it wouldn’t be undue hardship for GH to be placed in a non-safety-sensitive position.

The arbitrator also pointed out the policy encouraging workers to self-disclose addictions and encouraging their recovery along with workplace safety would be put at risk if GH’s conduct resulted in “immediate termination.”

Seaspan was ordered to reinstate GH to a non-safety-sensitive position, with no compensation for lost wages. Seaspan was entitled to require an additional independent medical examination to determine GH’s fitness for work and have GH sign another return-to-work agreement with the same terms as the previous one.

For more information see:

•Seaspan ULC and ILWU Canada, Local 400 (H. (G.)), Re, 2014 CarswellNat 4087 (Can. Arb.).

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective. He can be reached at or visit for more information.

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