Basic “Work for Pay” Bargain at the Core of the Employment Relationship

March 2018

Corporation of the Township of Langley -and- Canadian Union of Public Employees, Local 403, BCLRB No. B117/2017 (leave for reconsideration denied in No. B151/2017) is part of a series of decisions addressing alleged discrimination against a number of employees who were dismissed from employment due to non-culpable absenteeism. The case wended its way from arbitration proceedings, to the B.C. Court of Appeal, and ultimately to the B.C. Labour Relations Board (the “Board”) between 2015 and 2017.  The Board remitted the matter to the initial arbitrator in late 2017 so the saga continues but, as outlined below, the most recent Board decision provides significant guidance to the arbitrator.

The grieving former employees were all in receipt of long-term disability (LTD) benefits and considered permanently disabled with no prospect of returning to work at the time of dismissal. The employees had all been permanently disabled for longer than any other such employees although their total time away from work varied.  The employer decided to terminate their employment in order to save the ongoing costs of non-disability related benefits they continued to receive.  The terminations of employment did not impact the former employees’ continued receipt of LTD benefits.

The matter commenced with a February 2015 decision of Arbitrator David McPhillips that the terminations were discriminatory. The arbitrator concluded in particular that the employer’s decision to dismiss these employees was arbitrary or taken in bad faith because the decision was not based on any pre-existing policy or standard.  The arbitrator ordered that the grievors be reinstated to their employment and made whole.

The employer applied to the Board for review of the arbitration award under section 99 of the B.C. Labour Relations Code (the “Code”), and also sought to set aside the award before the B.C. Court of Appeal as being contrary to general human rights law pursuant to section 100 of the Code.   The section 99 process was held in abeyance pending a decision by the Court of Appeal.  This dual appeal process is very common in British Columbia given the notoriously complex divide between the Board’s jurisdiction to consider whether an arbitration award is contrary to the law and policy of the Code, and the Court of Appeal’s jurisdiction to consider whether an arbitration award is at odds with the general law.

The Court of Appeal decided that it did not have jurisdiction to review Arbitrator McPhillips’ award: see 2017 BCCA 1.  It expressly commented, however, that it is not discriminatory to dismiss an employee who is unable to “work for pay” – that being the fundamental bargain in the employment relationship – provided the duty to accommodate has been discharged.  The Court of Appeal further noted that the duty to accommodate is discharged when the employee is unable to work for the foreseeable future.

The matter then proceeded to the Board for completion of the employer’s application for review: see BCLRB No. B117/2017. The Board found that the undisputed evidence demonstrated the employer chose to dismiss the three employees because they had been off work and on LTD the longest.  The Board set aside the award and remitted the matter to arbitration based on the lack of evidence or reasoning to support the arbitrator’s findings that the timing of the terminations was “random” and the termination process was “arbitrary”.  The Board also confirmed that “work for pay” is a legitimate workplace standard that is consistent with Code principles, and that “it is not bad faith or discriminatory to terminate an employee for non-culpable absenteeism in order to avoid future potential obligations or to discontinue an ongoing obligation to pay non-disability related benefits”.  The Board sent the matter back to Arbitrator McPhillips to consider the grievance afresh and in a manner consistent with the general law set out by the Court of Appeal and the labour relations principles set out by the Board, including the principle that “work for pay” is a legitimate workplace standard and the fundamental bargain of any employment relationship.

The union’s application for reconsideration of BCLRB No. B117/2017 was denied: see No. B151/2017.  The matter is now back before Arbitrator McPhillips so readers should stay tuned in 2018 for what is hoped to be the final chapter of the case.

Takeaway Points

The Court of Appeal and Board decisions reinforce long-understood principles regarding the basic “work for pay” bargain at the core of an employment relationship. However, it is important for employers to remember that arbitrators will support termination of employment for non-culpable absenteeism only when the evidence shows that:  (a) the employee’s absenteeism is unacceptable; (b) there is no prospect of the employee’s attendance improving to an acceptable level in the future; and (c) the termination will not interfere with the absent employee’s entitlement to disability-related benefits.

Provided the above criteria are met, employers also optimize their ability to defend decisions to dismiss disabled employees for non-culpable absenteeism by establishing and consistently applying policies and practices for doing so.