Supreme Court Release Important Labour Law Decision
On April 29, 2004, the Supreme Court of Canada released its decision in the appeal of the judgment of the Alberta Court of Appeal. This is an important case as it addresses the questions of election and whether an arbitrator has the remedial auhority to order monetary damages, rather than reinstatement.
What happened in this case is that the Board of Arbitration found that the grievor's job performance was substandard and that her poor performance stemmed from insufficient qualifications and training. The Board found that the poor performance was not the result of willful neglect of duty or lack of effort by the grievor and that she was dismissed for non-culpable deficiency. The Board would have reinstated the grievor to her position but for the fact that it no longer existed. So, the Board ordered that the employer pay her damages equivalent to 4 months pay in lieu of reinstatement. The employer paid the money and the employee cashed the cheque.
The Union then filed an application for judicial review of the award and argued that she should have been reinstated. The employer said, hold on a minute, she cashed the cheque and, implicitly, accepted the award so she can't now turn around and judicially review it. Besides, it's entirely appropriate for an arbitrator to award damages in lieu of reinstatement.
The application for judicial review went to a Chambers Court Judge who dismissed it. This was appealed to the Court of Appeal who overturned the decision and reinstated the grievor. The employer appealed this decision to the Supreme Court of Canada.
The Court allowed the appeal. In so doing, the Court said reaffirmed that an arbitrator has broad remedial authority and said that:
"Given the object of the legislation and its overall purpose, 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 conduct, and a finding of cause thereafter."
With respect to the ability to substitute damages for reinstatement, the Court had this to say:
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. Departure from this position should only occur where the arbitration board's findings reflect concerns that the employment relationship is no longer viable. In making this determination, the arbitrator is entitled to consider all of the circumstances relevant to fashioning a lasting and final solution to the parties' dispute. In this case, the board did not act in an unreasonable manner by substituting an award for reinstatement. It properly considered the whole of the circumstances and reached a reasonable conclusion as to the continued viability of the employment relationship.
This is a very important case for employers as it opens an argument that an employee ought to be kept out of the workplace rather than reinstated. This is often a more palatable option to the employer (after all, it's only money).