Court of Appeal Downplays Importance of Candour at Arbitration

October 23, 2012

Yellow Pages Group Company dismissed the grievor, a sales consultant with 20 years of unblemished service, on the basis that he had abandoned his position because medical documentation supporting his work absence was two days late. The Company had clearly warned the grievor that if he failed to provide the medical documentation on time, he would be dismissed.

At arbitration, the Union’s grievance was dismissed. The Arbitrator held that the Company had just cause to terminate the grievor-he was clearly warned that he had to provide the medical documentation on time and the consequences for failing to do so were made clear. The grievor provided no explanation for his failure to deliver the documents, and his lack of candour at the hearing demonstrated an inability to re-integrate into the workforce. While the termination of a 20 year employee with no previous discipline was severe, the Arbitrator found that he had no justifiable reason for interfering with the employer’s decision.

The Union’s Application for Judicial Review was dismissed by the Divisional Court, but the Union’s appeal to the Ontario Court of Appeal was upheld.  In a unanimous decision, the Court quashed the Arbitrator’s decision and ordered the matter to be returned to a new arbitrator for a fresh hearing.

The Court of Appeal held that the Divisional Court erred in two respects:  1) it did not consider whether the termination was proportional; and 2) it relied on the Arbitrator’s finding regarding the grievor’s lack of candour.

Relying on the Supreme Court of Canada’s decision in McKinley v. BC Tel, the Court of Appeal held that the principle of proportionality is the key focus in determining whether an employee’s dismissal is justified. In the view of the Court of Appeal, the Divisional Court failed to examine whether the Arbitrator’s reasons demonstrated a consideration of the matter contextually-in particular, whether there was balance between the nature and seriousness of the grievor’s misconduct and the severity of the sanction. With respect to the lack of candour at the arbitration hearing, the Court held:

In this case, the relevant conduct is limited to Mr. Ferreira’s failure to comply, without explanation, with the time-line Yellow Pages imposed on him to provide further medical information.  The concerns the Arbitrator expressed about Mr. Ferreira’s lack of candour in the arbitration process are not relevant to this analysis as any dishonesty on Mr. Ferreira’s part at that stage played no part in Yellow Pages’ decision to terminate his employment.

The Court of Appeal’s decision is disappointing. While there is nothing new about an arbitrator considering discipline in context, the Court’s position regarding candour at a hearing is new. Post termination conduct does not affect whether just cause for discharge exists, but Arbitrators have consistently considered grievors’ conduct during the hearing in deciding whether to exercise their discretion to mitigate the penalty imposed by the employer. The Court of Appeal’s statement that there was no evidence on the record to support a finding that the grievor’s dishonesty would interfere with his ability to reintegrate into the workplace is inconsistent with this well-established arbitral principle. Ironically, it is inconsistent with the very contextual analysis that the Court of Appeal espouses.


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