Misconduct on a last chance agreement

Language of agreement is key

Brian Johnston

Question: Can a last-chance agreement stipulate that any type of further misconduct will result in dismissal, or does the misconduct leading to dismissal have to be related to that leading to the last-chance agreement?

Answer: Yes. The terms of a Last Chance Agreement (LCA) must be clear so that it is easy to identify when there has been a contravention. Where the LCA stipulates the types of misconduct that will lead to dismissal, termination for such misconduct will likely be upheld, whether or not related to the behaviour leading to the LCA.

However, where the wording about the misconduct which will lead to termination is vague, an arbitrator may interpret this as intended only to apply to misconduct related to the behaviour leading to the LCA.

In Potash Corporation of Saskatchewan (Allan Division) and United Steel Workers, Local 7689, , an LCA was put in place for an employee with alcohol addiction. It stipulated that the employee was required to abstain from both alcohol and illegal drug use, and if he did not, his employment would be terminated. When the employee tested positive for marijuana, the employer terminated employment.

The union argued the termination should be overturned because drug use was not related to the purpose of the LCA, which was to address the employee’s alcohol addiction.

The arbitrator held that the terms of the LCA were clear and specific, and noted that both union and employee had agreed to termination of employment for illegal drug use. Recognizing that the agreement only occurred as an alternative to termination, the arbitrator said that the union and employee could have refused to sign if they believed the terms were too harsh, and pursued a termination grievance instead. The breach of the LCA was significant misconduct, warranting termination.

The arbitrator noted that while there are exceptional cases where a termination may be found to be excessive, in this case “given the lead up to the (LCA) and the understanding of the parties, it is not justifiable to go behind the terms of the agreement.”

Contrast this with the finding in Luscar Ltd. v. I.U.O.E., Local 115, where the arbitrator interpreted the more general wording that “any further misconduct” meant only misconduct related to the original behaviour that led to the employee’s last chance.

In Luscar, a last chance letter had been given to the employee after aggressive and threatening behaviour towards colleagues. It stated that “any further misconduct will result in termination of your employment.”

The employee was terminated after failing to use his safety glasses, a breach of company policy.

Although the employer argued the term “any further misconduct” was intended to mean misconduct of any type, the arbitrator interpreted the words as “any further similar misconduct.” The arbitrator found dismissal for the safety infringement was not justified based on the last chance language.

Obviously, the key to an enforceable LCA is that the parties agree on what misconduct will result in dismissal, and that the LCA sets this out clearly.

For more information see:

Potash Corporation of Saskatchewan (Allan Division) and United Steel Workers, Local 7689 (Dec. 17, 2013), D. Ish – Arb. (Sask. Arb.).
Luscar Ltd. v. I.U.O.E., Local 115, 2001 CarswellBC 3617 (B.C. Arb.).

Brian Johnston, Q.C., is a partner with Stewart McKelvey in Halifax. He can be reached at (902) 420-3374 or bjohnston@stewartmckelvey.com.

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