Substituting remedy for reinstatement

Supreme Court of Canada decision confirms arbitration boards can award damages in exceptional cases

Arbitrators have the power to award damages in lieu of reinstatement in exceptional cases, according to a recent decision by the Supreme Court of Canada.

“As a general rule, where a grievor’s collective agreement rights have been violated, reinstatement of the grievor to her previous position will normally be ordered,” wrote Justice Frank Iacobucci on behalf of the court. “Departure from this position should only occur where the arbitration board’s findings reflect concerns that the employment relationship is no longer viable.”

In A.U.P.E. v. Lethbridge Community College, the Supreme Court of Canada found a decision by an arbitration board to award Sylvia Babin four months’ notice in lieu of reinstatement was appropriate.

The college hired Babin, a member of the Alberta Union of Public Employees (AUPE), as a scheduling co-ordinator in 1995 but dismissed her two years later on the grounds her work was incomplete and she failed to meet deadlines. Babin and the union grieved the dismissal, alleging it was without just cause in contravention of the collective agreement.

The arbitration board, constituted under the terms of the collective agreement, found while Babin’s job performance was substandard, her poor performance stemmed from insufficient qualifications and training. Accordingly she was dismissed because of a “non-culpable” deficiency.

The board also found the employer failed to provide her with adequate warning about her performance and did not comply with the criteria established in Edith Cavell Private Hospital v. H.E.U. Local 180 for dismissal of an employee on grounds of a non-culpable deficiency. (For more on Edith Cavell and the criteria, see sidebar at the bottom of this page.)

The board determined it had jurisdiction under Alberta’s Labour Relations Code to substitute remedy for reinstatement. Because there had been a legitimate re-organization of the workplace, Babin’s position no longer existed. It rejected the possibility of ordering the college to make efforts to find another position because that would neither guarantee her employment nor provide a lasting solution.

Applying common-law principles of damages in cases of wrongful dismissal, it concluded that four months’ pay would sufficiently compensate Babin for being terminated without just cause. It also reasoned that Babin was unable to handle the duties and responsibilities of the position, and would not have been able to improve her performance or lengthen her employment to any significant extent even with prior warnings.

Babin and the union appealed the board’s decision. The Alberta Court of Queen’s Bench said Babin was precluded from seeking judicial review of the board’s decision because she accepted payment of the arbitration award. Babin and the union appealed that ruling.

The Alberta Court of Appeal ruled Babin had not clearly indicated she had accepted the money in lieu of judicial review. It ordered the college to reinstate Babin because the criteria as outlined in the Edith Cavell case had not been met and, as such, the only remedy available to the arbitration board was to reinstate her. The college appealed that decision and the case went to the Supreme Court of Canada.

Writing for the Supreme Court, Justice Iacobucci said the board’s decision to provide notice in lieu of reinstatement was reasonable. He said the criteria outlined in Edith Cavell, by themselves, do not determine the framework for analysis.

“The purpose of the (Alberta Labour Relations Code) is to facilitate arbitral dispute resolution, and the content of the legislative scheme provides for arbitrators to do so,” said Iacobucci. “There is no practical reason why arbitrators ought to be stripped of remedial jurisdiction when confronted by labour disputes that turn on a distinction between culpable and non-culpable behaviour.”

In this case, the board recognized Babin had been dismissed without cause, contrary to the terms of the collective agreement, and was thus owed compensation, he said.

“The arbitration board took due account of all the circumstances before it and reached a reasonable conclusion as to the continued viability of the employment relationship,” said Iacobucci. “This decision fell well within the bounds of arbitral jurisprudence requiring a finding of exceptional circumstances prior to substitution of remedy.”

For more information see:

A.U.P.E. v. Lethbridge Community College, 2004 CarswellAlta 533, 2004 CarswellAlta 534, 2004 SCC 28 (S.C.C.)

The Edith Cavell requirements

Prior to dismissal of an employee on the grounds of a non-culpable deficiency, under the criteria set out in Edith Cavell, an employer must:

•define the level of job performance required;

•communicate that standard to the employee;

•provide reasonable supervision and instruction and allow the employee a reasonable time to reach the standard;

•establish an inability on the part of the employee to reach the requisite standard to an extent rendering the individual incapable of performing the job and that reasonable efforts were taken to find alternative employment within the competence of the employee; and

•provide reasonable warnings to the employee to convey that a failure to meet the standard could result in dismissal.

For more information see:

Edith Cavell Private Hospital v. H.E.U. Local 180, 6 L.A.C. (3d) 229 (B.C. Arb. Bd.)

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