Having signed up for an early retirement package, some 50 mine workers were informed two weeks after the application deadline that the deal was off.
The union grieved arguing that in rescinding the offer, the company was guilty of negligent misrepresentation and its actions constituted an unfair application of management rights.
In particular, the union pointed to language in the company’s written offer that committed it to presenting the union with a maximum number of employees who would be allowed to retire under the plan. In the end, no number was presented and no employees were permitted to retire. This constituted a breach of the company’s obligations under the agreement, the union said.
No guarantees
The employer maintained that all its communications with respect to the retirement offer made it clear that there were no guarantees and that determinations about the numbers able to retire would be based on the operational needs of the company. Following a needs analysis, the company came to the conclusion that it was not in a position to permit early retirements. The fact that the union did not like the result did not impugn the process or the results of the assessment, the company said. While the union’s disappointment was understandable, it was not actionable.
The arbitrator agreed. “There can be no question that the Union and its members had significant expectations that a number of its members would benefit from the proposal. However, individual expectations do not create mutually binding obligations …”
At no time did the company give any indication as to how many workers might be permitted to retire. Moreover, the language in the schedules attached to the offer made it explicit that there were no guarantees for employees who indicated a desire to participate in the program — subsequent approval to participate in the plan was required.
The arbitrator rejected the union’s argument that the company had acted in bad faith or in a manner that was arbitrary. The suggestion that the company came up with the number zero simply to avoid any discussions about its obligations with respect to the early retirement plan were not supported by the evidence, the arbitrator said.
Expectations not obligations
While acknowledging the unfortunate turn of events, the arbitrator found no evidence of bad faith:
“I must agree that the results of this process have been unfortunate in light of the expectations of certain bargaining unit members and that of the union executive. However … based on the evidence provided … those expectations cannot be extended and converted into legal obligations on the part of the Company. The Union endorsed the proposal since it clearly was a good proposal for anyone who was accepted under it but at the end of the day … no one was permitted to receive its potential benefits. If the membership is dissatisfied with its Union leadership in those circumstances then those members are seriously misadvised. There can be no question that the Union at all times acted in the best interests of its members and bears no responsibility for expectations dashed. The Union did act in the best interests of its members and the final result reflects a determination by management of its operational needs and the application of the specific language of the proposal made. There is no proper evidence before me to support any inference or speculations that anything was done in bad faith by anyone.”
The grievance was dismissed.
