A number of workers employed by a waste management company who were on modified duties due to medical restrictions were informed that their jobs were being eliminated.
Individually summoned to meetings attended by representatives from management, human resources and the union, the workers were presented with a letter that was read aloud to them.
The letter informed the workers that the layoffs were permanent and outlined a support package based on their entitlements under the Employment Standards Act. The letter included an offer of severance. The letter stipulated that the offer was made “without prejudice or precedent.” The workers were told that a cheque for the severance owed to them would be mailed. However, they were not asked to sign a release or any other document indicating that they were surrendering any claim in order to receive payment.
Escorted from the premises
Following the meetings, the workers were told to clean out their lockers. They were then escorted from the premises.
Before an Arbitrator, the employer took the position that the letter presented to the employees contained a clear offer of severance in satisfaction of any grievance that may have arisen as a result of the terminations. By cashing the cheques the two workers had clearly indicated their acceptance of the severance offer, the employer said. This understanding was further buttressed, in the employer’s view, by the fact that the union representative had been overheard to tell the workers that they should accept the offer unless they were dissatisfied with it, in which case they were advised not to cash the severance cheque.
The union argued that the so-called settlement offer was nothing of the kind but rather a notice of termination. There were no negotiations. The terminations were a done deal and any advice by the union representative to either cash or not cash the cheques did not turn the letter into a formal offer to resolve any outstanding claims, the union said.
No negotiations
There was no negotiation, the Arbitrator agreed. The workers were informed of their permanent layoff, they were told a severance cheque would be sent to them and then they were ushered out the door. The workers were not asked to sign anything the Arbitrator said and, “nothing in the letter indicates that the payment of money was conditional on the employees giving up their right to grieve.”
If the letter was deficient in that regard, neither was there any evidence to suggest that anyone on behalf of the employer told the workers verbally that they should not cash the cheques unless they were willing to give up their right to grieve. The union representative may have hinted that conditionality might be part of the offer but, the Arbitrator said, the union representative “was not representing the Employer and only the Employer could make the payment of severance conditional on the grievors giving up their right to grieve.”
There was nothing in the letter warning the workers about the consequences of cashing the cheques, the Arbitrator said: “The suggestion in the letter that the grievors may consult with legal or financial counsel confirms that they would have the opportunity to challenge the sufficiency of the severance payment, but not that they must refrain from accepting the monies provided while making that challenge … In this case, the evidence does not establish that the employees were required to treat the payment as conditional on their acceptance of their termination.” The Arbitrator ruled that the grievances could proceed to arbitration.
