An arbitrator who upholds a grievance can reinstate the employee, or order the employer to pay the employee damages.
In a 2018 arbitration case, Arbitrator Surdykowksi decided how to calculate damages for an employee who was not reinstated.
Dr. Bernard was a tenured professor in the History Department at Lakehead University (the “University”). Beginning in 2012, the University announced a new joint position for an employee who was to be shared between the History Department and the Women’s Studies Department. Dr. Bernard filed a complaint about the joint hiring committee processes and opposed the hiring of this joint employee. He also complained of harassment and discrimination, stating that the Women’s Studies Department had a bias against him because of his gender. After escalating disciplinary measures and an investigation, the University terminated Mr. Bernard’s employment in 2013. Mr. Bernard was 58 years old at the time.
The Lakehead University Faculty Association filed several grievances on Dr. Bernard’s behalf, claiming that none of the disciplinary measures imposed were justified and that Dr. Bernard’s employment should be reinstated.
At issue in this arbitration were the several disciplinary measures that started in 2012 which included counselling, a 1-day suspension, a 5-day suspension, and the termination of Dr. Bernard’s employment.
Arbitrator Surdykowksi found that a 1-day suspension was not entirely justified but ordered the University to pay $1000 for failure to properly investigate Dr. Bernard’s human rights complaint. The arbitrator upheld Dr. Bernard’s 5-day suspension but found that termination of his employment was an excessive disciplinary measure.
He reasoned that terminating Dr. Bernard’s employment would be “double punishment” for the same misconduct which could have been the basis for his 1-day suspension. In the alternative, he found that the University may have had just cause for disciplining Dr. Bernard, but it did not have just cause for termination.
Why was Reinstatement Inappropriate?
An arbitrator’s broad authority to fashion an appropriate remedy includes the power to award damages in lieu of reinstatement when the employment relationship is no longer viable. In order to find that reinstatement is not an appropriate remedy, where the employer cannot prove just cause for termination, the onus is on the employer to establish that the employee’s workplace behaviour was so bad that it poisoned the workplace. This is generally a difficult burden for the employer to meet. The employer can also show that it is more probable than not that the employee’s behaviour may poison the workplace if the employee was reinstated.
In determining an appropriate remedy, the arbitrator considered Dr. Bernard’s entire history at the University and concluded that the poisoned quality of the workplace was manifest. He discussed Dr. Bernard’s persistent and often inappropriate conduct dating back to at least 2007. Dr. Bernard often denied engaging in any inappropriate behavior and blamed others instead. He noted Dr. Bernard’s obsession with discrimination and how he asserted it whenever things did not go his way.
Arbitrator Surdykowksi found that it would be impossible to reinstate Dr. Bernard as the employment relationship has been damaged beyond repair, stating that “[i]t is patently obvious that that the grievor does not trust University Administration or Human Resources, and that the University does not trust him.”
Approaches to Calculating Damages in Lieu of Reinstatement
Arbitrator Surdykowski summarized his view of the jurisprudence dealing with the calculation of damages in lieu of reinstatement by splitting the jurisprudence into two schools of thought:
- Common Law Wrongful Dismissal Approach – This is the same approach as the Courts adopt in wrongful dismissal cases. This approach assumes that a wrongfully dismissed employee is entitled to recover his or her damages based on approximately one month of wages and benefits for each year of service, subject to a maximum that reflects that time it should take to mitigate his or her losses.
- Fixed Term Approach – Assumes that an employee with a collective agreement will generally continue to work for the employer until retirement, subject to certain contingencies. So, damages using this approach are based on the value of the wages and benefits the employee would have earned from the date of discharge all the way up to the expected date of retirement.
The University argued that the first approach should apply so that Dr. Bernard would be awarded wages and benefits based on three weeks per year of service plus any actual benefit expenses which would have been covered under the collective agreement during that period. The Arbitrator disagreed.
Which Approach to Use?
Answering this question is where confusion and complexity lies. Arbitrator Surdykowksi reviewed numerous cases and concluded that the the fixed term approach was the correct one to apply as it is more “principled.” However, this approach has not always been applied in such a way. For instance, contingencies that will reduce the amount of damages have been applied using unreliable estimates rather than an objective measure. In fact, Arbitrator Surdykowksi shared that Mr. Bernard’s case is the only one he is aware of where the parties retained actuarial personnel to substantiate their identified contingencies. Despite such weaknesses in the fixed term approach, Arbitrator Surdykowksi believed that applying the common law wrongful dismissal approach was incorrect.
Not everyone agrees with Arbitrator Surdykowksi as the wrongful dismissal approach is easier to apply and continues to thrive. Further, with the elimination of mandatory retirement, it is difficult to determine when an employee intended to “retire.”
Accordingly, it is difficult to predict which approach an arbitrator will adopt. To find out which approach to quantifying damages in lieu of reinstatement may apply in your case, contact an employment lawyer.