Friday, 8 August 2014

When Arbitrators "Get It Wrong": Judicial Review as a Remedy

Section 48 of the Labour Relations Act provides that all collective agreements in Ontario must provide for "final and binding settlement by arbitration, without stoppage of work, of all differences between the parties arising from the interpretation, application, administration or alleged violation of the agreement".  As a result, the courts will generally show considerable deference to the decisions of labour arbitrators.  But what about those instances where the decision of an arbitrator seems to fly in the face of reason?  A couple of recent decisions from the courts indicate that deference only goes so far.

The decision of the Alberta Court of Appeal in Telus Communications Inc. v Telecommunications Workers Union offers an example of just such a case.  The grievor was a service technician for Telus.  He had asked to use vacation to participate in a slo-pitch tournament.  His request was denied, but the employee called in sick for the day, stating that he could not come in "due to unforeseen circumstances".  His manager attended the ball park, and witnessed the grievor pitching in a game.  When confronted, the grievor said that he awoke that day with severe diarrhea, but that he was able to attend the tournament, just to watch.  Upon further questioning, he admitted that he was playing (only pitching, not batting or running the bases), and stated that he felt he could manage his condition at the ball park, but could not have attended customers' homes.  The employer terminated the grievor, and the union filed a grievance.  At arbitration, the Arbitrator acknowledged that the grievor had twice lied to the company during the investigation meeting, and that he had planned to play in the ball tournament despite not being given the day off.  However, the Arbitrator ultimately decided that the company had "over-reacted" and substituted a one-month suspension for the discharge.

On judicial review, the Chambers Judge found that the Arbitrator's decision was subject to a standard of "reasonableness", but that the decision could not stand.  The Judge ruled that the Arbitrator had failed to properly weigh the evidence and that his conclusion that an employee could be too sick to work, but could still pitch in a baseball game, "defies logic and common sense".  Moreover, the Arbitrator's decision that discipline was only warranted where the employer could establish that the employee's absence actually affected customer service was unreasonable.  Rather than sending the matter back to the Arbitrator or a different arbitrator, the Chambers Judge ruled that the only reasonable conclusion available was that the grievor lied about being sick, and that his termination was justified.  In the result, the Arbitrator's award was quashed, and the discharge was upheld.

The Alberta Court of Appeal found that the Judge was "correct" that "the arbitrator's decision was not within the range of possible outcomes defensible in respect of the facts and law".  The Court also agreed that where sending the matter back for re-hearing "would serve no useful purpose", it is open to a reviewing court to quash the decision and uphold the termination.  Accordingly, the appeal was dismissed.

The result in Professional Institute of the Public Service of Canada v. Communications, Energy and Paperworkers’ Union of Canada, Local 3011 was similar.  The grievor was a mail room clerk who engaged in a pattern of sexual harassment and sexual assault of a contract employee who cleaned the offices where the grievor worked.  The grievor had grabbed the complainants buttocks on several occasions, and had tried to kiss the complainant in an elevator, over her objections.  The employer investigated the complaint and found that the grievor had, in fact, engaged in sexual harassment and assault of the cleaner.  He admitted the behaviour, but claimed that the complainant had consented.  The employer discharged the grievor for cause.  At arbitration, Arbitrator Weatherill found as a fact that the grievor engaged in 'sexual banter' with the cleaners and that he occasionally grabbed one cleaner's buttocks, and noted that the grievor had previously been asked not to do so.  Acknowledging that the grievor's behaviour was "improper", the Arbitrator nonetheless pointed out that the grievor had ceased harassing one cleaner when she showed him her fist, and that the primary complainant had indicated in her testimony that she did not want the grievor discharged.  He, therefore, concluded that the grievor's actions were not at the severe end of the spectrum of sexual harassment, and substituted a "lengthy period of suspension" for the discharge.

The employer applied for judicial review, and the Divisional Court had to consider whether the Arbitrator's decision was "reasonable".  The Court recognized that not every case of sexual harassment or assault may demand discharge, but found that the grievor had harassed at least two of the cleaners and that he displayed no remorse or insight into his behaviour.  The grievor had offered a form of "apology" to the complainant that demonstrated no awareness of the impropriety of his actions and no commitment to not engage in similar behaviour in the future.  The Court found that the Arbitrator had placed significant weight on two irrelevant considerations (i.e., the fact that the grievor desisted after one cleaner showed him her fist, and that the complainant did not want him to be discharged), and reached a conclusion that was not "defensible in light of the facts and the law". In the result, the Court set aside the award as to penalty and upheld the termination of the grievor.

While it is not everyday that the courts will intervene in the decisions of arbitrators (or other statutory decision-makers), these decisions demonstrate that where those decisions threaten the function of the administrative tribunal system, the courts will step in.  Employers are well-advised to carefully review arbitral decisions, particularly in cases of serious misconduct where termination is not upheld.  If the punishment does not seem to fit the crime, the courts may be called upon to remedy the outcome, and without the necessity of a re-hearing.

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Has your organization received an arbitral award that seems to defy common sense?  Feel free to contact Lance Ceaser to obtain advice and guidance.

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