By: Jeremy Schwartz
The Ontario Court of Appeal (ONCA) has quashed an arbitration award which upheld a just cause termination. The Arbitrator found the employer had just cause to terminate an employee when his physician delivered a medical note late. Employers may take guidance from the decision when dealing with unionized and non-unionized employees.
Mr. Ferreira’s Termination
Mr. Ferreira was a unionized, 20-year employee of Yellow Pages Group Company (YPGC), who had an unblemished record. Earlier in 2009 Mr. Ferreira went off on medical leave and applied for short-term disability benefits. His doctor completed an initial questionnaire, which Mr. Ferreira faxed personally to YPGC’s group benefits provider (Insurer) to commence the claim. The Insurer requested further information to determine eligibility, which his doctor failed to provide promptly. The Insurer denied the claim on the basis of insufficient medical evidence, but advised that it would reconsider should medical evidence substantiating the claim be submitted by no later than March 3, 2009.
Upon learning that Mr. Ferreira’s claim had been denied, YPGC wrote to Mr. Ferreira instructing him to either return to work or provide medical evidence to substantiate his absence. The letter also warned, “We hope that you understand the critical nature of this matter and that you will govern yourself accordingly.”
Immediately on receiving the letter Mr. Ferreira contacted YPGC. YPGC’s human resources consultant advised him that if he failed to substantiate his absence by delivering the required medical information by March 3, his employment would be terminated. Mr. Ferreira attended at his physician on February 25 and his doctor completed the required form on March 2. Unfortunately, his doctor sent the form by regular mail instead of by facsimile or courier and so it was not received until several days later.
On March 5, YPGC informed Mr. Ferreira that his employment was terminated for abandonment. Mr. Ferreira immediately faxed in a copy of the form, but YPGC refused to overturn its decision. The Union grieved.
The Arbitrator’s Decision
Relying on earlier jurisprudence, the Arbitrator found that Mr. Ferreira had an obligation to attend work or to justify his absence, and in the latter case to provide up-to-date and timely medical evidence to substantiate his absence. He held that “…the grievor knew he was to fulfill his obligation to keep the Company informed of his condition and he failed to do so for reasons that are unexplained. It was open to the Company to discipline him and it chose to impose the discipline he had been warned of.” The Arbitrator found that Mr. Ferreira had, effectively at his own peril, left the timely delivery of the document in the hands of his doctor.
As such, and despite his 20 years of unblemished service, the Arbitrator upheld the termination for cause. The Arbitrator also found, without significant discussion, that Mr. Ferreira was “not entirely candid in his evidence”, and that “[s]uch conduct strikes at the ability of the grievor to successfully reintegrate into the workforce.” On that basis he refused to mitigate the penalty.
Significantly, although there is reference to a “deemed termination” provision (which is not recited but which, presumably, dealt with certain forms of absence without leave), that provision was apparently inapplicable in the circumstances. The case turns on whether just cause for termination was established. Had the deemed termination provision been applicable (assuming it was properly worded), YPGC may not have been required to establish just cause. The termination would have been an administrative matter, subject only to the Ontario Human Rights Code but not subject to mitigation.
The Divisional Court’s Decision
The Union applied for judicial review of the Arbitrator’s decision. The Divisional Court held that the Arbitrator’s decision was within the range of reasonable outcomes available to the Arbitrator and so dismissed the application. The Divisional Court was not unanimous in this result, with one judge issuing a dissenting opinion.
The Ontario Court of Appeal’s Decision
The ONCA allowed the appeal of the Divisional Court’s ruling, quashed the Arbitrator’s decision and ordered the matter returned to a new arbitrator for a fresh determination of the appropriate penalty. The ONCA found that the Divisional Court erred in two respects:
“ First, they failed to examine whether the arbitrator’s reasons demonstrate that he considered the matter contextually and balanced the nature and seriousness of Mr. Ferreira’s misconduct with the severity of the sanction imposed – a sanction that terminated a previously unblemished 20-year employment relationship. Second, with respect, the majority was wrong to rely on the arbitrator’s finding that Mr. Ferreira was less than completely honest in his conduct within the arbitration proceedings. As I have indicated, this factor was irrelevant to Yellow Pages’ decision to terminate Mr. Ferreira’s employment and could not provide retroactive justification for that decision.”
Essentially, the ONCA held that although there was cause for discipline, the Arbitrator’s decision was not reasonable because termination for just cause was not a reasonable possible outcome in the circumstances.
Lessons for Employers
Employers must be cautious and pragmatic when asserting that an employee has abandoned employment, or asserting just cause for termination, when an employee has failed to meet an employer-imposed deadline to substantiate a medical leave. Where an employee misses the deadline, the reasons must be considered in context with the impact on the organization and in all the relevant circumstances.
However, as noted above, where a unionized employee is subject to a collective agreement that provides a “deemed termination” occurs in such circumstances, the employer may not be obliged to prove just cause at all. To determine whether such a provision is worded so as to achieve this result, employers are strongly encouraged to obtain legal advice.