GSB#2009-2047

UNION#2009-0376-0018

IN THE MATTER OF AN ARBITRATION

Under

THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT

Before

THE GRIEVANCE SETTLEMENT BOARD

BETWEEN

Ontario Public Service Employees Union (Moore)

Union

• and -

The Crown in Right of Ontario (Liquor Control Board of Ontario)

Employer

BEFORE

Randi H. Abramsky

Vice-Chair

FOR THE UNION

Tim Hannigan Ryder Wright Blair & Holmes LLP Barristers and Solicitors

FOR THE EMPLOYER

Justin Diggle Liquor Control Board of Ontario Counsel

HEARING

September 12, 2011.

Decision

1On August 11, 2011, I issued a Decision which determined that the Employer “did not sustain its onus of establishing just cause for the termination of Ms. Moore.” It also determined that the Union had not established that the grievor had been discriminated against on the basis of her age, or that she had been harassed by her manager or Employer, as alleged in her grievance and particulars. The issue of remedy in regard to the grievor’s termination was left to the parties. The parties, however, were unable to resolve the remedial issues and those issues were brought before me.

Facts

2The remedial situation in this case is somewhat unusual because although the Employer is willing to accept the reinstatement of the grievor, along with back pay (subject to mitigation issues), it is the grievor who does not want to return to work for the LCBO. Since her termination, she has relocated to British Columbia where her son resides, and she has no trust in the Employer. She continues to believe that the Employer’s actions, culminating in her termination, were the result of ongoing harassment and bad faith by management. Consequently, she seeks monetary damages in relation to her termination of employment. Specifically, she seeks the following:

1. Back pay (including overtime, premiums, statutory holidays, etc.) from the date of termination (August 27, 2009) to the date of the Decision on the merits (August 11, 2011).

2. Damages in lieu of reinstatement – the loss of her job, at the rate of 2 months per year of service (approximately 7 years). Plus a 25% gross-up for loss of fringe benefits.

3. Entitlements under the Ontario Employment Standards Act.

4. Interest, per the Courts of Justice Act.

5. Damages - $250,000 in punitive damages, and $150,000 to put her in a “make whole” situation.

6. Restoration of pension.

Position of the Parties

The Union

3The Union, in its submissions, recognizes that this case solely involves the remedy flowing in a termination case, where it was determined that the Employer failed to sustain its onus. The allegations concerning discrimination, harassment and bad faith by management were dismissed.

4In support of its position that a grievor may receive both back pay and damages in lieu of reinstatement (future economic loss), the Union cites to Re Greater Toronto Airport Authority and Public Service Alliance Canada, Local 0004 (C.B. Grievance) (2010), 191 L.A.C. (4th) 371 (Shime), affirmed in relevant part, 2011 ONSC 487, [2011] O.J. No. 358 (Ont. Div. Ct.). In that case, the Divisional Court determined that, under the “unique circumstances” of that case, it was reasonable for the arbitrator to “look both forward and backward in determining the damages to compensate the grievor for loss of income…” (par.93). The Union acknowledges that the GTAA case is distinguishable, but submits that the decision establishes that both back pay and future economic loss may be awarded in order to make a grievor whole.

5The Union also submits that the GTAA case establishes that damages for mental distress and punitive damages may be awarded in a termination case. It contends that, from the grievor’s perspective, she suffered significant mental distress and loss as a result of her termination, and the allegations of theft which led to it as well as her arrest. In a statement she made at the remedial hearing (which was not under oath or subject to cross-examination), Ms. Moore stated that she has “lost everything” as a result of her termination – all of her security and hopes for the future. She had planned to downsize her home so she could buy back pension credits and retire in 2014 – with a paid-for home and a small pension. Then, “all this” occurred. She is 65 years old and worked all her life, since age 14, and she wanted to retire with respect, and self-respect. She can never forget being arrested, hand-cuffed and finger-printed – because of the LCBO’s allegations. She wants her “life back” and to be “made whole” for what she went through as a result of the LCBO’s wrongful termination.

6In terms of damages in lieu of reinstatement, the Union cites to Re NAV Canada and I.B.E.W., Local 2228 (Coulter)(2004), 2004 CanLII 94784 (CA LA), 131 L.A.C. (4th) 429 (Kuttner) where the arbitrator awarded 1.5 months per year of service, a 15% gross-up for fringe benefits, entitlements under Canada Labour Code, and interest; Re Toronto (Metropolitan) and Canadian Union of Public employees, Local 29 (Dalton)(2001), 2001 CanLII 62110 (ON LA), 99 L.A.C. (4th)1(Simmons), where the arbitrator awarded 1.25 months per year of service as a retiring allowance, 15% for loss of benefits plus interest; Re Cameco Corporation and United Steel Workers of America, Local 8914 (2008), 2008 SKQB 499, 179 L.A.C.(4th) 97 (Sask. Q.B.), which upheld an arbitrator’s award of 2 months per year of service and 25% top up for benefits under the collective agreement (including overtime); and Re OBLEU(Massa) and LCBO(2000), GSB No. 2033/97 (Abramsky), where it was determined that the grievor was entitled to one month’s wages per year of seniority, 15% for loss of fringe benefits, and any entitlements due him under the Ontario Employment Standards Act.

7The Union submits that the remedy in this case should put the grievor in the place she would have been but for the improper termination of her employment. That includes all of her losses – her job, her home, her pension and her plan to retire in 2014.

The Employer

8The Employer submits that the grievor is not entitled to most of the compensation or damages that she claims. It asserts that she is entitled to either reinstatement with back pay (subject to mitigation) or damages in lieu of reinstatement, but not both. It submits that with the exception of Re GTAA, supra, arbitrators have rejected claims that have sought both, citing Re Rideau Gardens Inc. and Service Employees International Union, Local 1 (Jasmine Grievance)[2010] O.L.A.A. No. 47 (Starkman) and Re NAV Canada, supra. The Employer also asserts that awarding both back pay and damages in lieu of reinstatement is conceptually inconsistent.

9The Employer also contends that the situation in Re GTTA, supra, was completely different than this case, where the grievor’s claims of harassment and discrimination were found to be unsupported. It argues that the “unique circumstances” that existed there simply do not apply to this matter.

10The Employer further submits that the majority of awards awarding damages in lieu of reinstatement fall in the one-month per year of service level – not the higher levels of 1.25 or 1.5 or 2 months per year, cited by the Union. In support it cites to Re OBLEU (Massa) and LCBO, supra; Re Hendrickson Spring (Stratford Operations) and United Steel Workers of America, Local 8773 (Ewaniuk Grievance) (2009), 191 L.A.C. (4th ) 116 (Solomatenko); Re De Havilland Inc. and National Automobile, Aerospace, Transportation and General Workers Union of Canada, Local 112 (Mayer Grievance) (1999), 1999 CanLII 35895 (ON LA), 83 L.A.C. (4th) 157 (Rayner); Re North American Mining Inc. and I.U.O.E., Local 955 (Dow Grievance) [2010] A.G.A.A. No. 73 (Power).

11The Employer also contends that there is no basis to award punitive damages or damages for mental distress – even assuming that there is jurisdiction to do so. It submits that the requisite elements required for such damages are not present in this case, citing the Divisional Court’s decision in Re GTAA and PSAC, Local 0004, supra, as well as Re Rideau Gardens Inc., supra; Re Cassellholme Home for the Aged and CUPE, Local 146 (Morabito Grievance) (2007), 2007 CanLII 6896 (ON LA), 159 L.A.C. (4th) 251 (Slotnick); Re North American Mining Inc., supra.

12The Employer challenges some of the grievor’s claims concerning her losses, asserting that it had been her intention, well before her termination, to retire before 2014 and relocate to British Columbia. It also submits that she chose not to participate in the pension plan while she was employed at the LCBO. It further contends that the consequences that flow from a termination (such as the need to sell a home, financial difficulties, etc.) are not compensable. In support, the Employer cites to Re North American Mining Inc., supra and Re Ontario Hydro and Society of Ontario Hydro Professional and Administrative Employees (Novotny Grievance) (1998), 1998 CanLII 30056 (ON LA), 73 L.A.C. (4th) 277 (Samuels).

13Similarly, the Employer asserts that the costs associated with the grievor re-establishing herself in British Columbia are also not compensable. In support, it cites to Re NAV Canada, supra, where a request for a training allowance as part of a make whole remedy was denied.

Reasons for Decision

14As noted, this case presents an unusual remedial situation because it is the grievor who asserts that the working relationship is no longer viable and does not want to return to work for the LCBO. It is not a situation where the Board has determined that the employment relationship is no longer viable, or the Employer claims that – but the grievor herself. In part, her decision is based on her belief – unchanged by the Decision in this matter on the merits - that she is the victim of an ongoing pattern of harassment and discrimination by management, and in part, on her desire to relocate to British Columbia where her son resides.

15The Employer, in my view, could insist that the grievor be ordered to be reinstated with back pay and benefits – subject to mitigation – and then resign if she so elects. It has chosen not to so insist, and to accept that the grievor may be awarded damages in lieu of reinstatement. It asserts, however, that the grievor is not entitled to both back pay and damages in lieu as the Union claims.

16Having considered the case law presented by the parties, I conclude that it would not be appropriate to order both back pay and damages in lieu of reinstatement in this matter. In my view, the situation in Re GTTA, supra, is completely distinguishable. There, the arbitrator found that the employer acted in bad faith in the manner of dismissal, which caused the breakdown of a viable employment relationship. In this case, I dismissed the grievor’s claims of harassment, discrimination and bad faith. There is no finding that the employment relationship is no longer viable based on the Employer’s conduct.

17In addition, in contrast to the situation in Re GTTA, the grievor could be reinstated – perhaps not to the same store and manager, but to another one. There is, therefore, no basis to conclude, as did the Divisional Court at par. 93 that “[b]ut for the employer’s egregious conduct, the grievor would have been reinstated with substantial back pay, and she would likely have continued to work, at least until early retirement.” In this case, the grievor, if she so chose, could return to work and continue to work until her retirement. It is her choice not to do so.

18Further, with the exception of Re GTTA, supra, which was based on the “unique circumstances” of that case, arbitrator’s have rejected claims for both back pay and damages in lieu of reinstatement. In Re NAV Canada, supra at par. 26, the arbitrator specifically rejected the view that there was to be compensation for lost wages for the period between the date of dismissal and the award and damages in lieu of reinstatement as of the date of the award to compensate the grievor for loss of his rights under the collective agreement. He stated that “the fact of the matter is that my award is for damages in lieu of reinstatement and absent an order of reinstatement there is simply no retroactive back pay owing whatsoever.” Likewise in Re Toronto (Metropolitan) and CUPE, Local 79 (Dalton), supra at par. 20, the arbitrator concluded:

The remedy is to compensate the grievor an amount of money representing, as closely as possible, the monetary value for his loss of employment. That remedy represents, in large measure, the loss of value of the collective agreement. It does not represent an ongoing loss from the time of termination which would normally require mitigation.

19In this case, because the grievor has determined that reinstatement is not an option for her, there is “simply no retroactive back pay owing….” The issue thus becomes the “amount of money representing, as closely as possible, the monetary value for [her] loss of employment” and “is premised on the economic value of being a member of a bargaining unit under the protective umbrella of the collective agreement.” (Par. 28) As explained by Arbitrator Kuttner at par. 27, these include both quantifiable benefits, such as overtime and premium pay benefits, sick leave, disability and health care benefits, and non-economic benefits such as seniority. I would also include the “just cause” provision and the grievance arbitration provisions. As stated by Arbitrator Rayner in Re De Havilland, supra at par. 14: “It is for loss of that protection and those benefits that compensation is awarded.”

20Based on the case law, the quantum is based on the grievor’s years of service. Ms. Moore began her employment with the LCBO in October 2002 and was terminated on August 27, 2009 – so she had just under seven years of employment. The case law varies, however, in terms of the value attached – from 1 to 2 months’ wages per year of service. In Re OBLEU (Massa), supra, a decision issued in 2000, I followed the case of Re De Havilland Inc. supra, from 1999, which awarded one month’s wages for every year of seniority. In the majority of cases cited to me, the arbitrators have also adopted the one month per year of service calculation, while others have adopted a higher level – 1.25, 1.5 and even 2 months. Many of these decisions, including my own, have determined the value without explicit reasoning. One exception is in Re Cameco Corporation, supra at p. 105, where the arbitrator decided that two months’ salary for every year of service was appropriate because “the loss of an employee’s Collective Bargaining benefits is significant and the compensatory damages ought to reflect that.”

21A number of arbitrators have also considered the grievor’s age, prospects for employment and educational background. Re Cassellholme Home for the Aged, supra; Re Canvil, supra; Re NAV Canada, supra; Re De Havilland Inc., supra. In this case, those factors favour a higher level of compensation. Although there is, as the Employer asserts, “some merit in promoting consistency in calculating payments to grievor’s in lieu of reinstatement…”, each case must be considered on its own facts. Re Rideau Gardens Inc., supra at par. 11. Consequently, I conclude that, under specific facts of this case, a calculation of 1.25 months per year of service is an appropriate level of compensation.

22In determining a month’s “wages”, I conclude that the average monthly pay received by the grievor in the time prior to her termination should be used as the calculation, which would include overtime and any premium payments. Re North American Mining, supra at par. 18. I also find it appropriate to “round up” her service to seven years.

23The grievor is also entitled to a “top-up” for loss of fringe and other economic benefits under the collective agreement. There appears to be, with limited exception, a standard of 15% for this in the case law. Re OBLEU (Massa), supra. She is also entitled to interest, per the Courts of Justice Act.

24The grievor is also entitled to any applicable statutory benefits arising under the Ontario Employment Standards Act. This is because the payment of damages in lieu of reinstatement is based on the loss of her rights under the collective agreement, which is different than her rights under that statute. Re De Havilland, supra; Re NAV Canada, supra; Re OBLEU (Massa), supra.

25In terms of the other forms of damages claimed by Ms. Moore – punitive and compensatory damages to make her “whole” - I conclude, with great respect to her strong views on the matter, that they are not appropriate to award in this case. The Supreme Court of Canada has recognized that the loss of one’s job is a “traumatic event.” Re Wallace v. United Grain Growers Ltd. 1997 CanLII 332 (SCC), [1997] 3 S.C.R. 701, at p. 742. There is no question that Ms. Moore suffered because of the allegations of theft, her arrest, and her termination. Her future plans were thrown into disarray. Her security, self-respect and financial situation deteriorated significantly. The LCBO’s claims against her, however, were not completely unfounded – the video evidence established that product that had not been paid for by customers left the store while Ms. Moore was the cashier. What the Employer did not establish was that those events were intentional as opposed to careless. On the evidence presented, there was no finding of bad faith by the Employer.

26Consequently, although Ms. Moore has suffered losses as a consequence of her termination, Canadian law does not recognize as compensable the adverse secondary effects of her termination. As stated by the British Columbia Supreme Court in Re Schatroph v. Preston Chevrolet Oldsmobile Cadillac Ltd. [2003] B.C.J. No. 398, at par. 80, quoted in Re North American Mining Inc., supra at par.9:

Any fired employee is rocked by having been fired. Most fired employees are left with a financial desert before them. Many fired employees are in the throes of a matrimonial break-up. Many fired employees are part-time single parents facing an uncertain future. If Canadian law recognized as compensable the adverse secondary effects on any plaintiff who is wrongfully dismissed then the plaintiff in the case at bar would have a case. But Canadian law does not. …

27In Re North American Mining Inc., supra, the grievor, who had been improperly discharged, sought damages for mental distress. His wife testified about the stress arising out of the dismissal at a time when alternative employment was virtually impossible to find and that the family went through a financial crisis that resulted in a foreclosure action being commenced. The arbitrator found “no basis on the facts before me for a mental distress claim.” (Par. 9). Similarly, damage claims were also denied in Re Rideau Gardens Inc., supra. Education and training allowances, debt reimbursement incurred as a result of the termination and damages for pain and suffering were denied in Re Cassellholme Home for the Aged, supra as well as in Re NAV Canada, supra. In Re Canvil, a division of Mueller Canada Ltd. and I.A.M.A.W., Lodge 1547 (Stone Grievance) (2006), 2006 CanLII 93341 (ON LA), 152 L.A.C. (4th) 378 (Marcotte), the arbitrator found that he had no jurisdiction to award punitive or aggravated damages.

28Consequently, the law simply does not recognize as compensable the losses claimed by Ms. Moore in this case. The Board need not, therefore, determine whether or not these losses occurred since many are disputed by the Employer.

29Similarly, the loss alleged by the grievor on the sale of her home, and the cost to purchase a comparable home in British Columbia are not compensable as a result of her termination under the facts of the case. Re Ontario Hydro, supra. Likewise, the evidence was that Ms. Moore had opted not to participate in the pension plan while employed by the LCBO. She therefore can make no claim regarding pension benefits, despite her assertion that she had planned to “buy back” pension credits.

4. Conclusion

30For the reasons set forth above, I conclude that Ms. Moore is entitled to the following remedy in lieu of reinstatement:

1. The grievor is entitled to 1.25 month’s wages (including overtime and premium payments) per year of service, which is rounded-up to 7 years.

2. She is entitled to 15% top-up for fringe and other economic benefits.

3. She is entitled to any applicable entitlements under the Ontario Employment Standards Act.

4. She is entitled to interest, per the Courts of Justice Act.

5. All other requests for compensation and damages are denied.

6. I shall remain seized in regard to the interpretation and implementation of this Decision.