Author: Howard Levitt
Publication: National Post
Ashocking $500,000 award, by a labour relations arbitrator against the Greater Toronto Airport Authority, for a $50,000-a-year employee, has stunned employers.
The arbitrator, Owen Shime, justified this massive award by citing the breach of an invented “mental security” provision supposedly implied in every collective agreement. “In my view, one of the main purposes of a collective agreement is to provide employees with “psychological benefit” and “mental security” in being gainfully employed,” he said, adding that “the object of the collective agreement to both secure a psychological benefit and also mental security was within the reasonable contemplation of the parties and mental distress damages arising from the breach are recoverable.”
In the many collective agreements I have conducted in 30 years of practice, I have yet to meet an employer who contemplated the “object of the collective agreement” to be either “psychological benefit” or “mental security” for its employees. No surprise then that unionized employees greeted this award with delight and employers with incredulity. The GTAA is seeking judicial review.
Like many employers, it faced a costly absenteeism problem, which it was trying to limit through an attendance-monitoring program. The grievor, a fleet co-ordinator, had taken a four-week leave after surgery. Because of her relationship with another employee under scrutiny for false sick leave, she was placed under observation. Her partner was fired for sick leave fraud.
After obtaining videotape evidence of the grievor, while on leave, establishing mobility inconsistent with her claim of being unable to work, she was asked if could return to work in an accommodated role. She returned one week early, but instead of discussing accommodation, the GTAA asked her to report with her union representative to a meeting two days later, purportedly to discuss what work she could perform.
During that meeting, the GTAA asked questions regarding her physical limitations and addressed inconsistencies based on its videotaped evidence. She was suspended and subsequently terminated for being absent from work dishonestly.
The arbitrator found that the GTAA ignored supporting evidence and failed to consult medical experts to support its view of the grievor’s dishonesty relating to her condition. He took into account the GTAA’s knowledge she had suffered post-traumatic stress caused by physical and sexual abuse from her then husband that could be retriggered by being terminated and labelled as dishonest. The grievor was subsequently re-employed, at $20,000 a year.
The arbitrator awarded her $400,000 for loss of past and future income, a sum equivalent to eight years of her salary and benefits, from the date of termination to the date of what would have been early retirement. In addition, there were punitive damages and damages for mental distress of $50,000 each, highly unusual in a union arbitration case.
Obliging employers to safeguard an employee’s “mental security” supposedly existent, although not in words, in every collective agreement, exposes employers to potentially crippling liability. If this decision stands, employers will be liable for the consequences of a breach of “mental security,” the basis and limits of which are as yet unascertained. From now on, difficult management decisions will habitually be met by the boilerplate allegation and accompanying grievance that affected employees’ “mental security” has been breached. A whirlwhind of new grievances has just been opened. And if the union doesn’t take the case, new complaints will be made to the labour board against the union.
The arbitrator’s decision is a caution to employers not to too hastily investigate suspected fraudulent sick leave claims, especially of long-service employees.
It veers into uncharted territory. It is not merely the award for mental security but the provision of damages to retirement. It equates a collective agreement to a security blanket, providing coverage from the cradle of hiring to retirement, and imposes on employers a positive obligation of trust and confidence relative to their employees. This effectively binds the employer to act in the best interests of its employees in an undetermined myriad of respects.
Such a finding means mental distress damages are foreseeable and recoverable whenever a breach of the collective agreement relating to “security of employment” can be shown. It is an open invitation to a deluge of new mental distress claims.
Unless this decision is overturned, employers are cautioned to do the following:
-Act with great circumspection before terminating unionized employees for cause;
-Follow the terms of the collective agreement scrupulously;
-Conduct investigations thoroughly;
-Seek expert advice whenever necessary to support your conclusions;
-Consider references, relocation counselling, continued EAP assistance, psychologocal counselling, job search assistance and other services to ensure employees’ mental equanimity is minimally impaired.
Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers. He practises employment law in eight provinces and is author of The Law of Hiring in Canada, soon to be released.