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Arbitrator rules against GTAA in favour of employee

caneIn a decision released on February 12, 2010, an arbitrator appointed pursuant to the Canada Labour Relations Act ordered the Greater Toronto Airports Authority (GTAA) to pay an aggrieved employee more than $500,000 in general damages, $50,000 a year for lost income, and $50,000 damages for mental distress and punitive damages. Quite hefty! But why?

The employee was a 47-year-old fleet coordinator working at Toronto’s Pearson Airport. She had been employed with the airport authority for approximately 23 years. She sustained an injury at work, and her doctor indicated that she should be off work for a period of time. During her absence, the GTAA hired an investigation company to follow the employee to determine whether or not she was, in fact, disabled. The investigators observed the employee engaging in a variety of activities, including shopping, driving and carrying groceries. The surveillance reports also highlighted the fact that she was observed walking with a “severe limp in her right leg”.

Upon the employee’s return to work, she was required to attend a meeting, at the conclusion of which she was suspended. Her employment was terminated five days later. She filed a complaint with the Federal Labour Relations Board.

At the hearing before the Board, the GTAA took the position that the employee had wrongfully claimed sick-leave benefits, and that therefore it was within its rights to terminate her. In rejecting the GTAA’s position, the arbitrator found that the employee was an “honest and diligent employee who at no time malingered or attempted to wrongfully obtain sick benefits.” The arbitrator found that the GTAA’s conduct throughout was “unreasonable and [taken] in bad faith.” The arbitrator found that the GTAA had concerns about a co-worker with whom the employer associated, and on that basis terminated her employment. Finally, he also found that the GTAA failed to independently assess the employee’s situation and, “condemned her by association”. He also found that the GTAA ignored the employee”s lengthy and exemplary service. It was this behaviour which the arbitrator felt was both unreasonable and constituted bad faith.

In making the significant award that he did, the arbitrator stated “employees are not like tissues to be used up and then thrown out at a whim into a bin of low-level employment or unemployment.” The arbitrator concluded that the GTAA’s conduct was also a violation of the collective agreement. He referred to case law which supported the right of the arbitrator to grant significant damages for such intentional breaches of a collective agreement.

The arbitrator referred to a series of English cases that he felt imposed duties of trust on both employees and employers. These cases imposed an obligation on employers to refrain from acting in manner that is calculated to destroy or seriously damage the relationship of confidence and trust between employer and employee. The arbitrator also referred to the leading Supreme Court of Canada case of Whiten v. Pilot Insurance for the principle that substantial punitive damages could be awarded in breach of contract actions. The arbitrator concluded that it was within his jurisdiction to award damages for mental distress. He found that the conduct of the GTAA “has an added dimension that goes beyond mistreatment of the Grievor [i.e., the employee]; the GTAA’s failure to deal with the Grievor in a responsible manner stripped the collective agreement of any meaning.” He found the airport authority’s conduct to be high-handed, malicious and arbitrary, and even if the employee had been guilty of some offence, it was clearly a first offence and the employer should have considered some disciplinary action other than dismissal.

Given his findings with respect to the conduct of the GTAA, the arbitrator found that a significant award was required in order to deter the airport authority and similar employers from exploiting employees in this manner. He concluded that the treatment which the employee received from her employer entitled her to punitive damages in the amount of $50,000.

The arbitrator also considered whether the employee was entitled to compensation for past economic loss. The employee had been denied her compensation and benefits from the time of her termination until the date of the arbitration. The arbitrator ordered the employer to pay this amount to the employee, less mitigation earnings.

In addition, the arbitrator also ordered compensation for the employee’s future loss of income, including her loss of seniority, increase in holiday entitlement, and pension benefits which would have accrued over the life of her employment with the GTAA.

The decision is consistent with a number of other court decision that have made it clear that the courts and other judicial bodies will take a dim view of such high-handed and callous treatment of employees. Employers would be well-advised to consider carefully how they deal with discipline and dismissal among their employees, and to take into account the individual characteristics of each employee. Counsel should always be consulted prior to taking any step of discipline or dismissal whether in a unionized or non-unionized setting.

Greater Toronto Airports Authority v. Public Service Alliance Canada, Local 0004 (Feb. 12, 2010), O.B. Shime — Arb. (Ont. Arb. Bd.) (in PDF)

Earl Altman
Garfinkle, Biderman LLP

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Earl Altman

Legal consultant at EA Consulting
Earl Altman was a partner at Garfinkle, Biderman and now heads his own consulting firm. Earl has practiced commercial and employment litigation. Earl’s practice focuses on employment disputes, including acting for employees and employers in wrongful dismissal claims, and in breach of contract and breach of fiduciary duty claims. Read more
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