Canadian Employment Law Today

STUART McKELVEY HALIFAX Have a question for our experts? Email Jeffrey.R.Smith@thomsonreuters.com Canadian HR Reporter, a Thomson Reuters business 2016 2 | February 3, 2016 with Brian Johnston Ask an Expert Answer: Yes. e terms of a Last Chance Agreement (LCA) must be clear so that it is easy to identify when there has been a contravention. Where the LCA stipulates the types of misconduct that will lead to dismissal, termination for such misconduct will likely be upheld, whether or not related to the behaviour leading to the LCA. However, where the wording about the misconduct which will lead to termination is vague, an arbitrator may interpret this as intended only to apply to misconduct related to the behaviour leading to the LCA. In Potash Corporation of Saskatchewan (Allan Division) and United Steel Workers, Local 7689, , an LCA was put in place for an employee with alcohol addiction. It stipu- lated that the employee was required to ab- stain from both alcohol and illegal drug use, and if he did not, his employment would be terminated. When the employee tested posi- tive for marijuana, the employer terminated employment. e union argued the termination should be overturned because drug use was not related to the purpose of the LCA, which was to address the employee's alcohol ad- diction. e arbitrator held that the terms of the LCA were clear and specific, and noted that both union and employee had agreed to ter- mination of employment for illegal drug use. Recognizing that the agreement only oc- curred as an alternative to termination, the arbitrator said that the union and employee could have refused to sign if they believed the terms were too harsh, and pursued a ter- mination grievance instead. e breach of the LCA was significant misconduct, war- ranting termination. e arbitrator noted that while there are exceptional cases where a termination may be found to be excessive, in this case "given the lead up to the (LCA) and the understand- ing of the parties, it is not justifiable to go be- hind the terms of the agreement." Contrast this with the finding in Luscar Ltd. v. I.U.O.E., Local 115, where the arbitra- tor interpreted the more general wording that "any further misconduct" meant only misconduct related to the original behaviour that led to the employee's last chance. In Luscar, a last chance letter had been given to the employee after aggressive and threatening behaviour towards col- leagues. It stated that "any further miscon- duct will result in termination of your em- ployment." e employee was terminated after failing to use his safety glasses, a breach of company policy. Although the employer argued the term "any further misconduct" was intended to mean misconduct of any type, the arbitrator interpreted the words as "any further similar misconduct." e arbitrator found dismissal for the safety infringement was not justified based on the last chance language. Obviously, the key to an enforceable LCA is that the parties agree on what misconduct will result in dismissal, and that the LCA sets this out clearly. Have a question for our experts? Email Jeffrey.R.Smith@thomsonreuters.com Continuance of employment Question: If an employee is dismissed, receives her entitlement to pay in lieu of notice, and then successfully applies for a different position with the same employer before what would be the notice period is up, does the employee's previous service have to be counted? Answer: As with almost all employment law litigation, the cases are fact specific; there- fore the answer is "maybe." In this question, the employee is still in receipt of pay in lieu of notice when hired for a different position by the same employer. Courts generally say that short breaks in service do not automatically amount to a break in continuous service. For example, in Beach v. IKON Office Solutions, Ltd., an employee who had two breaks — one of 14 months in 1970-1971 and one of 16 months in 1982-1983 — were not significant enough in the context of his overall years of employ- ment — approximately 31 years — to con- stitute a break in service for the purpose of determining reasonable notice. Notably, the court said: "With respect to the implications of a break in service, it is common ground that an employer may in certain circumstances be found to have explicitly recognized that a returning employee is to be treated as hav- ing maintained continuous employment," said the court in Beach. "Where there is no express term in the re-employment contract dealing with the issue, the question is wheth- er the employer has effectively recognized continuity of service." e court found the employee was given more than the starting vacation entitlement when he was hired after the second break and given the maximum vacation entitle- ment four years later — an entitlement nor- mally given to employees with 15 years of service. In addition, the employee was given service pins and other recognition for a pe- riod of service dating to before his rehiring. "Recently, in Vist v. Best eratronics Ltd., the Ontario Supreme Court of Justice con- cluded that a short gap in service did not break service because the rehire contract failed to address 'length of service for pur- poses of termination.' us, if an employer does not expressly tell an employee on rehire that it will not recognize prior service; it may not be able to rely on a break in service at a future date, especially where the break is of short duration," said the court. Some employment standards legislation will also play a role in determining whether there has been a break in service that severs the employment relationship for the purpose of employment standards. For example, s. 77 of the Nova Scotia Labour Standards Code provides: "(3) Successive periods of employment of a person by an employer constitute one period of employment, except for succes- sive periods of employment more than thirteen weeks apart in which case the last employment constitutes the period of employment for the purposes of Sections 71, 72 and 73 [notice sections]." e short answer is "maybe." It depends on the facts of each case. e question is best answered when there is an express contract at point of hire limiting future liability for termination as discussed in Beach v. IKON and Vist v. Best eratronics Ltd. For more information see: • Potash Corporation of Saskatchewan (Al- lan Division) and United Steel Workers, Local 7689 (Dec. 17, 2013), D. Ish – Arb. (Sask. Arb.). • Luscar Ltd. v. I.U.O.E., Local 115, 2001 CarswellBC 3617 (B.C. Arb.). • Beach v. IKON Office Solutions Ltd., 1999 CarswellBC 1482 (B.C. S.C.). • Vist v. Best eratronics Ltd., 2014 Car- swellOnt 7189 (Ont. S.C.J.). Brian Johnston, Q.C., is a partner with Stew- art McKelvey in Halifax. He can be reached at (902) 420-3374 or bjohnston@stewart- mckelvey.com. Misconduct on a last chance agreement Question: Can a last-chance agreement stipulate that any type of further misconduct will result in dismissal, or does the misconduct leading to dismissal have to be related to that leading to the last-chance agreement?

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