CITATION: Ontario Power Generation v. The Society of United Professionals, 2020 ONSC 7824
DIVISIONAL COURT FILE NO.: 065/20
DATE: 20201230XX
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Swinton, Penny and Favreau JJ.
BETWEEN:
Ontario Power Generation
Applicant
– and –
The Society of United Professionals
Respondent
Frank Cesario and Dianne E. Jozefacki, for the Applicant
Paul J.J. Cavalluzzo and Balraj Dosanjh, for the Respondent
HEARD by videoconference at Toronto: July 16, 2020
Penny and Favreau JJ.
Overview
[1] Ontario Power Generation (“OPG”) seeks to judicially review an Arbitration Award made by Arbitrator Larry Steinberg on January 6, 2020. In his Award, the Arbitrator reinstated the grievor, referred to as John Doe, to his employment after OPG terminated him for “inappropriate behaviour” and being dishonest during a sexual harassment investigation. The Arbitrator substituted the dismissal with a 30-day suspension and conditions. One of the conditions is that OPG is entitled to terminate the grievor if other allegations of sexual harassment are made within 24 months after the grievor’s reinstatement and that any arbitrator dealing with such a termination would not have the jurisdiction to decide anything other than whether sexual harassment had occurred.
[2] OPG argues that the Arbitrator failed to have sufficient regard to the seriousness of the grievor’s conduct and that he improperly downplayed the impact of sexual harassment. OPG also argues that the Arbitrator did not have the authority to bind subsequent arbitrators in the event of another sexual harassment case involving the grievor.
[3] The respondent, The Society of United Professionals (the “Society”), argues that the penalty imposed by the Arbitrator fell within his discretion and was supported by the evidence. In particular, the Society argues that, while OPG initially terminated the grievor for being untruthful during the investigation, it has now improperly shifted its emphasis to the issue of sexual harassment.
[4] For the reasons below, we find that the Arbitrator’s conclusion that dismissal of the grievor was not warranted in the circumstances of this case was reasonable. He carefully reviewed the evidence and made findings of fact specific to the circumstances of this case. However, we agree with OPG that the Arbitrator did not have the jurisdiction to bind future arbitrators. Given that automatic termination for future findings of sexual harassment was a key aspect of the Arbitrator’s penalty, his finding with respect to penalty was unreasonable. The application for judicial review is granted, the award respecting remedy is set aside and the matter is remitted back to the Arbitrator to determine the appropriate penalty.
Background
Interactions between the grievor and the complainant
[5] At the relevant time, the grievor was employed by OPG as a Project Lead for over five years. He was 33 years old.
[6] The complainant was a 20 year old engineering student, working as a summer student at OPG. She did not report to the grievor, nor was she supervised by him.
[7] The grievor and the complainant met at a training session in mid-May 2017. After they spoke a few times during the session, the grievor placed his phone number in the complainant’s phone and offered to drive her to work if she ever asked. Over the next few weeks, they exchanged text messages and developed a friendly relationship.
[8] The interactions that led to the complaint began in the second half of June 2017 and include the following:
a. On June 21, 2017, the grievor told the complainant that he had feelings for her and that his girlfriend gave him permission to go on a date with her. The complainant told him that she was not comfortable with this and only wanted to be friends.
b. On June 23, 2017, the grievor passed the complainant’s desk and tickled her foot. The complainant later texted the grievor saying that this was “extremely uncool”, later saying that she was “just teasing” him.
c. On June 25, 2017, the complainant told the grievor that she was dating someone and that he should “respect that”.
d. On June 26, 2017, the grievor touched or at least reached toward the complainant’s foot again. The complainant communicated her annoyance to the grievor and told another employee.
e. On June 28 and 29, the grievor and the complainant had a lengthy text message exchange about the nature of their relationship. The grievor first wrote that he did not want to be “just friends”, but later wrote that he would “be fine with just friends”. The complainant expressed frustration with his persistence given that she had “already told [him] to stop saying flirty things”. The grievor and the complainant then agreed that their relationship would just be friendship and nothing more.
f. On July 17, 2017, the complainant asked the grievor to pick her up at the airport. They then had a conversation at the complainant’s home where she told the grievor she had previously had a relationship with a woman. The grievor asked the complainant some questions about the relationship but the complainant answered that she was not comfortable responding. The grievor later texted the complainant saying that he was surprised that a “churchy girl” who believed certain things were “immoral” would have such a relationship.
g. On July 19, 2017, the grievor invited the complainant to a fireworks display the next evening. The complainant suggested that they ask other people to join them, but the grievor responded that he did not wish to have “all those people” with them. Ultimately, they did not attend the fireworks display.
Complaint, investigation and the grievor’s termination
[9] On July 20, 2019, the complainant spoke to a human resources representative at OPG about the issues she was having with the grievor. The complainant was told to document her concerns and to stop responding to the grievor’s texts. OPG notified the Society, after which the grievor was instructed to have no further contact with the complainant.
[10] OPG did not investigate and adjudicate the complainant’s concerns under its Harassment Procedure. Rather it decided to address her concerns in an informal process, by informing the grievor that his behaviour had been inappropriate. OPG held three disciplinary interviews with the grievor on August 2, August 8 and September 22, 2017. During that process, OPG refused to provide the grievor with particulars about the complainant’s allegations or a copy of her written statement. The grievor denied many of the complainant’s allegations and her characterization of the events.
[11] On August 22, 2017, the grievor was assigned to work from home after OPG found that he had not been honest during the disciplinary meetings. When the grievor was told about this decision, he was asked to provide his Blackberry. When reviewing the Blackberry, OPG found that the grievor had erased all data.
[12] On October 11, 2017, OPG wrote to the grievor to advise him that his employment was terminated. The grounds OPG provided for termination included “inappropriate behaviour” toward the complainant, the grievor’s dishonesty in responding to questions during the investigation process and erasing all data from his Blackberry.
[13] The Society filed a grievance respecting the termination. The grievance was referred to arbitration.
Arbitration award
[14] The arbitration hearing took place over 10 days between April 2018 and September 2019.
[15] OPG’s position on the arbitration was that the grievor’s conduct warranted termination for three reasons: his “inappropriate behaviour” with the complainant, his lack of candour and failure to recognize that his behaviour was inappropriate during the investigation process and the wiping of his Blackberry. OPG’s evidence during the arbitration was that, initially when it started the investigation, it intended to interview the grievor and, once he acknowledged the conduct, impose some discipline on him. However, after the investigation was completed, OPG decided that termination was warranted, given that the grievor did not acknowledge his misconduct and he erased the data from his Blackberry.
[16] The Society’s position on the arbitration was that there was no misconduct on the grievor’s part. The grievor and the complainant had a friendly relationship that included banter. Up to the series of texts in the June 27-28 period, the grievor was trying to explore the complainant’s interest in a romantic relationship. Once the complainant made it clear that she was not interested in a romantic relationship, the grievor’s attempts ended. The Society also argued that the investigation was procedurally unfair. An early document from the investigation suggested that OPG had made its mind up about the grievor’s conduct without first interviewing him. In addition, at the time of the interview, the grievor’s lack of candor could be explained by the fact that OPG did not share the complaint with the grievor and he therefore was not aware of the specific allegations against him.
[17] The Arbitrator released the 57-page Arbitration Award on January 6, 2020.
[18] The Arbitrator thoroughly reviewed the evidence presented by the parties and addressed the three areas of alleged misconduct raised by OPG:
a. With respect to the interactions with the complainant, the Arbitrator accepted the distinction proposed by the Society between the period before June 27-28 and the period after that time. With respect to the period before, he found “the grievor did engage in inappropriate behaviour which he knew or should have known was inappropriate and unwelcome”. He found that after June 27-28, “the grievor respected the boundaries set by the complainant and only crossed the line on the last occasion but was perceptive enough to realize that the complainant was uncomfortable and did not pursue the matter”.
b. With respect to the grievor’s behaviour during the interviews, the arbitrator found that the grievor’s answers were at times dishonest and that the grievor did not show any insight that trying to pursue a romantic relationship with a summer student thirteen years his junior was inappropriate. However, he found that the investigation process was flawed, which explained in part the grievor’s behaviour. Specifically, the Arbitrator found that “[t]he employer did not approach the process with an open mind”, and instead accepted the allegations in the complaint at “face value”. He also found that OPG did not disclose the totality of the allegations made by the complainant as recorded in her statement. The Arbitrator found that this had an impact on how the grievor answered questions.
c. The Arbitrator found that the grievor’s decision to wipe the Blackberry “showed poor judgement”.
[19] The Arbitrator concluded that all three areas of misconduct warranted some discipline. He then went on to consider whether termination was appropriate. The Arbitrator ultimately concluded that termination was not warranted in this case because the sexual harassment fell at the lower end of the spectrum and was in the nature of “sexual annoyance”, and because the misconduct during the investigation was partially mitigated by OPG’s flawed investigation.
[20] Based on these findings, the Arbitrator ordered that the grievor be reinstated to his position, subject to a 30-day suspension and to the following conditions:
a. First, for 24 months after the grievor returns to work, if it is alleged that he engaged in sexual harassment, the employer can terminate the grievor’s employment. If the termination is referred to arbitration, the jurisdiction of the arbitrator will be limited to determining whether sexual harassment occurred and h/she shall not have the jurisdiction to reduce the penalty.
b. Second, prior to returning to work the grievor shall successfully complete a course or seminar selected by the employer regarding sexual harassment in the workplace. A copy of this award shall be provided to person(s) conducting the training.
Standard of review
[21] There is no dispute between the parties that the applicable standard of review is reasonableness.
[22] Pursuant to the Supreme Court of Canada’s decision in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, the guiding principles for deciding whether a decision is reasonable include the following:
a. Reasonableness is concerned with justification, transparency and intelligibility. A decision is unreasonable if it is internally incoherent or if it is untenable having regard to the relevant factual and legal constraints.
b. The party challenging the decision has the burden of showing that it is unreasonable. A court should not set aside a decision based on minor flaws or peripheral shortcomings. To justify a finding of unreasonableness, the flaws or shortcomings must be sufficiently central or significant to the merits of the decision.
c. The role of the court is to review the decision and not to decide the issue afresh. The focus of the reasonableness inquiry is therefore on the decision making process and the outcome.
d. It is not the role of a reviewing court to re-weigh the evidence and make factual findings. Absent exceptional circumstances, a reviewing court should not interfere with a tribunal’s factual findings.
Arbitrator’s jurisdiction over penalties
[23] Section 48(17) of the Labour Relations Act, 1995, S.O. 1995, c.1, Sch. A, gives an arbitrator broad discretion to substitute a remedy in circumstances where an employer has discharged or disciplined an employee:
Where an arbitrator or arbitration board determines that an employee has been discharged or otherwise disciplined by an employer for cause and the collective agreement does not contain a specific penalty for the infraction that is the subject-matter of the arbitration, the arbitrator or arbitration board may substitute such other penalty for the discharge or discipline as to the arbitrator or arbitration board seems just and reasonable in all the circumstances.
Analysis
[24] OPG argues that the penalty imposed by the Arbitrator was unreasonable and specifically challenges the Arbitrator’s finding that termination was not appropriate in the circumstances of this case. While OPG raises a number of issues, they can generally be categorized as follows:
a. The Arbitrator’s approach to the issue of sexual harassment was unreasonable; and
b. The Arbitrator had no authority to limit the jurisdiction of an arbitrator dealing with future allegations of sexual harassment against the grievor.
[25] For the reasons below, we find that the Arbitrator’s decision that termination was not appropriate in this case is reasonable. However, we agree that the penalty imposed by the Arbitrator was unreasonable because he did not have the authority to impose the restriction he did on a subsequent arbitrator.
The Arbitrator’s approach to the issue of sexual harassment was reasonable
[26] OPG argues that the Arbitrator failed to treat the issue of sexual harassment with sufficient seriousness. In particular, it argues that the finding that the grievor’s conduct amounted to “sexual annoyance” draws on outdated views of sexual harassment and had the effect of minimizing the grievor’s conduct.
[27] We do not accept this argument. Looking at the Arbitrator’s chain of reasoning as a whole, it is evident that he sought to identify where the grievor’s behaviour falls on a spectrum of sexual harassment for the purpose of determining whether it warranted termination or some lesser penalty.
[28] In referring to “sexual annoyance”, the Arbitrator was relying on a text by Professor Aggarwal, Sexual Harassment in the Workplace, which was referred to by the Supreme Court of Canada in Janzen v. Platy Enterprises Ltd., [1989] 1 S.C.R. 1252, and relied on in other arbitral decisions dealing with sexual harassment, including Innophos Canada Inc. v. United Steelworkers, Local 6304, 2016 CarswellOnt 8165 and Ottawa (City) v. Ottawa-Carleton Public Employees’ Union, Local 503. The Arbitrator relied on the following quote from Aggarwal’s textbook:
“Sexual harassment” is defined in a variety of ways in a variety of contexts. It is a focus of concern under both Human Rights legislation and Occupational Health and Safety legislation. It is generally understood that the term is not limited to sexual assault, or to requests for sexual favours made to employees by those with power over their employment. It includes behaviour sometimes categorized as “sexual annoyance:
…descriptions of “sexual harassment” appear to indicate that such behaviour can be divided into two categories: sexual coercion and sexual annoyance…
Sexual annoyance, the second type of sexual harassment, is sexually related conduct that is hostile, intimidating, or offensive to the employee, but nonetheless has no direct link to any tangible job benefit or harm. Rather, this annoying conduct creates a bothersome work environment and effectively makes the worker’s willingness to endure that environment a term or condition of employment.
This second category contains two subgroups. Sometimes an employee is subjected to persistent requests for sexual favours and persistently refuses. Although that refusal does not cause any loss in job benefits, the very persistence of the demands creates an offensive work environment, which the employee should not be compelled to endure. The second subgroup encompasses all other conduct of a sexual nature that demeans or humiliates the person addressed and in that way also creates an offensive work environment. This includes sexual taunts, lewd or provocative comments and gestures, and sexually offensive sexual contact.
In summary, sexual harassment can manifest itself both physically and psychologically. In its milder form it may be confined to verbal innuendoes and inappropriate affectional gestures. Sexual harassment can, however, escalate to extreme behaviour amounting to attempted or actual rape.
(Aggarwal and Gupta, Sexual Harassment in the Workplace (Toronto, Butterworths, 3rd edition, 2000), p.14)
[29] The Arbitrator went on to quote from the arbitral decision in Ottawa (City) above, where Arbitrator Burkett distinguished between cases of “sexual annoyance” and “sexual coercion” for the purpose of discussing appropriate remedies. Cases of sexual coercion always warrant termination but cases of sexual annoyance, except where the conduct is particularly persistent and offensive, do not warrant automatic termination.
[30] Based on these principles and his findings of fact, the Arbitrator went on to find that, in this case, the grievor’s behaviour fell into the category of “sexual annoyance”. He reasoned as follows:
The grievor’s inappropriate behaviour with the complainant falls into the category of sexual annoyance. It did not have “any tangible job benefit or harm”. The complainant did not report to the grievor. He was not responsible for supervising her work. He was not asked or expected to take part in evaluating her work. He had no influence on her current or future employment prospects with the employer.
The offensive behaviour consisted of saying “flirty” or romantic things, possibly the tickling incidents and inviting the complainant to the fire works display. Save and except for this behaviour, the complainant enjoyed her friendship with the grievor. This would seem to fall squarely within what the authors of the book quoted above refer to as sexual harassment in its “milder form” – “verbal innuendoes and inappropriate affectional gestures”.
[31] The Arbitrator then went on to consider aggravating and mitigating factors.
[32] With respect to the aggravating factors, he found that, until the hearing, the grievor showed little insight and did not acknowledge that his behaviour was inappropriate. Even at the hearing, the grievor continued to try to justify his behaviour and saw himself as the victim. He is also a short service employee.
[33] The Arbitrator viewed the “mitigating factors” as including the grievor’s clean disciplinary record, that the complainant “acknowledged that she wasn’t as clear or firm as she could have been in drawing the boundary”, that the complainant continued to voluntarily take rides, have lunch and text with the grievor during the relevant time and that “after the complainant and the grievor had their intense relationship-defining encounter on June 28-29, the grievor respected the boundaries set by the complainant”.
[34] The Arbitrator found that another mitigating factor was that OPG did not initially treat the complainant’s allegation as worthy of discipline and proceeded by its informal process. Rather, the termination was largely based on OPG’s view that the grievor was dishonest during the investigation.
[35] Ultimately, the Arbitrator stated that termination was “not the only appropriate remedy in this case”. He acknowledged that OPG’s argument about the grievor’s lack of accountability and whether the grievor can be trusted not to repeat his behaviour is a “serious issue”. He went on to conclude:
After considering the evidence as a whole and noting that the grievor did modify his behaviour in the post June 28-29, I am of the opinion that termination of employment is not the only appropriate remedy and that a period of suspension and reinstatement with conditions can provide the necessary assurance that the grievor will not repeat his misconduct.
[36] The term “sexual annoyance” may not be the best choice of words to describe the grievor’s behaviour. It resonates as downplaying the seriousness and impact of sexual harassment. However, the Arbitrator’s use of the expression on its own does not make the decision unreasonable. It is evident from the Arbitrator’s reasoning as a whole that he viewed the grievor’s conduct as serious, but placed it on a spectrum to determine whether termination was an appropriate remedy in this case. Based on his factual findings, and his weighing of the aggravating and mitigating factors, he determined that termination was not appropriate in this case.
[37] OPG relies on the Alberta Court of Appeal’s decision in Calgary (City) v. Canadian Union of Public Employees Local 37, 2019 ABCA 388, to argue that the use of the terms “sexual annoyance” and “sexual coercion” in Aggarwal’s text are out of date because they improperly categorize different forms of sexual harassment and place undue emphasis on the impact of the behaviour on the victim rather than on the conduct of the harasser. There is merit to this position in general terms. However, it does not make the Arbitrator’s reasoning in this case unreasonable. The Calgary (City) decision involved an incident of sexual assault that the arbitrator characterized as “sexual annoyance” because an assault was perpetrated by a co-worker and the complainant did not provide evidence of a significant impact from the assault. The Alberta Court of Appeal found that, in that case, Aggarwal’s categories led the arbitrator “astray”, and prevented her from recognizing the seriousness of the conduct at issue. That is not the case here. There was no assault. It is clear that the Arbitrator used the term “sexual annoyance” to locate the grievor’s acts of sexual harassment on a spectrum of conduct. As reviewed above, he did not unduly minimize the conduct at issue here. The term “sexual annoyance” may be out of date and ripe for review, but its use in this case does not make the decision unreasonable.
[38] It is also noteworthy that OPG recast the approach it took to the case on the application for judicial review from the approach taken at the arbitration. As mentioned above, at the time the allegations surfaced, OPG did not intend to terminate the grievor but only decided to do so after he denied the allegations during the interviews and wiped his Blackberry. At the hearing of the arbitration, again OPG was not relying solely on the sexual harassment to argue that termination was appropriate, but, rather, argued that the grievor breached its trust in his response to the investigation and that, in combination, all the circumstances of the case warranted termination. If we were to accept OPG’s arguments on this application, all findings of sexual harassment, regardless of the nature of the conduct, would warrant termination. This cannot be the case. Ultimately, it is up to the arbitrator to consider the specific conduct in each case and decide whether termination or a lesser penalty is appropriate in the circumstances.
[39] As held by this Court in Professional Institute of the Public Service of Canada v. Communications, Energy and Paperworkers’ Union of Canada, Local 3011, 2013 ONSC 2725, at para. 21, another case relied on by OPG, “not every case of sexual harassment or assault demands a discharge. There are cases where it is appropriate to substitute a lesser penalty, particularly where the conduct falls on the less serious end of the continuum and the grievor has demonstrated remorse for his behaviour.” In that case, the Divisional Court quashed an arbitration award on the basis that the arbitrator did not treat an ongoing pattern of sexual harassment with sufficient seriousness. However, the circumstances in that case are very different from here. In Professional Institute, the grievor’s sexual harassment of several women had been ongoing for five years and the grievor had not changed his behaviour despite many warnings. This is not the case here.
[40] OPG also argues that the Arbitrator improperly broke the grievor’s conduct into two periods. This was based on his finding of fact that the grievor’s behaviour changed after the June 27-28 text exchanges. As held in Vavilov, the Court will only interfere with the factual findings of an arbitrator in exceptional circumstances. There are no such circumstances here. These findings were open to the arbitrator.
[41] OPG also argues that the Arbitrator improperly considered the complainant’s failure to set what he referred to as “clear boundaries” as a mitigating factor. As reviewed above, the Arbitrator found that the grievor’s conduct was inappropriate and that it amounted to sexual harassment. He did not rely on the complainant’s behaviour to excuse the grievor’s conduct but only for the purpose of assessing its seriousness in the circumstances of this case.
[42] Ultimately, the Arbitrator made his own findings about the seriousness of the sexual harassment, finding that it was worthy of discipline but not serious enough to warrant termination. He found that OPG’s conduct of the investigation mitigated the grievor’s dishonesty and lack of insight. He agreed that wiping the Blackberry showed poor judgement. Taking all of these factors into consideration, he found that termination was not just and reasonable in the circumstances. The Arbitrator’s chain of reasoning was based on his factual findings, and was justified, transparent and coherent.
The Arbitrator did not have the authority to limit the jurisdiction of a subsequent arbitrator
[43] OPG argues that the Arbitrator did not have the jurisdiction to impose the first condition on the grievor’s reinstatement, and therefore, the penalty was unreasonable. The specific wording at issue is as follows:
First, for 24 months after the grievor returns to work, if it is alleged that he engaged in sexual harassment, the employer can terminate the grievor’s employment. If the termination is referred to arbitration, the jurisdiction of the arbitrator will be limited to determining whether sexual harassment occurred and h/she shall not have the jurisdiction to reduce the penalty. (emphasis added)
[44] OPG argues that, because this condition was an important part of his justification for not terminating the grievor, the outcome itself is unreasonable without it.
[45] The Society argues that orders of this nature are commonplace and cites two arbitral decisions and a decision of the Court of Appeal for Ontario, Great Atlantic & Pacific Co. of Canada v. UFCW, Locals 175 & 633 (1984), 49 O.R. (2d) 66, in support of the Arbitrator’s jurisdiction to impose the first condition. The Society also analogizes the Arbitrator’s first condition to a “last chance” agreement, which is enforceable.
[46] We agree that the Arbitrator’s imposition of the second condition was unreasonable. He never addressed his authority to impose this condition and there is no legislative authority to do so. Accordingly, including the second condition as part of the penalty does not fall within the range of reasonable outcomes. However, as addressed in the remedy section below, this does not mean that termination is the only appropriate outcome.
[47] Section 48(17) of the Labour Relations Act provides arbitrators with the express power to substitute a penalty that is deemed just and reasonable, subject only to specific language in the collective agreement which would limit this power.
[48] Section 48(18) of the Act sets out all of the parties whom an arbitrator can bind with his or her decision. Nowhere in this provision, nor anywhere else in the Act, is an arbitrator or arbitration board granted the power to bind another arbitrator with his or her decision.
[49] The combined effect of these sections of the Act is that an arbitrator does not have the ability to restrict a future arbitrator’s power to substitute a penalty imposed on a grievor by his or her employer. The exercise of such power would infringe on the future arbitrator’s powers under section 48(17). Such an award, purporting to bind a future arbitrator, also exceeds the authority conferred upon the current arbitrator under section 48(18).
[50] Nothing in the parties’ collective agreement alters the effect of sections 48(17) and (18). Indeed, the collective agreement, in article 16.7(i) tends to support this analysis. This article provides that the arbitrator shall have “the power to settle or decide such matters as are referred to him/her in a fair and equitable manner, and the arbitrator’s decision shall be final and binding”. And no arbitrator has “the power to amend or terminate this Agreement, policies or procedures”.
[51] The decision of the Court of Appeal in Great Atlantic & Pacific relied on by the Society is distinguishable on an important ground. Great Atlantic & Pacific involved the grievance of a dismissal for theft. The arbitrator found that dismissal was unduly harsh and ordered reinstatement subject to a number of conditions. These conditions included that the union and the grievor agree in writing that, should the grievor be found guilty of dishonest behaviour in the future, “they shall accept whatever penalty the company deems to be appropriate and not argue for the substitution of a lesser penalty.” Although the union and the grievor did agree to this, the Divisional Court concluded that this condition was beyond the jurisdiction of an arbitrator under what is now section 48(17) of the Act.
[52] The Court of Appeal disagreed. The union and the grievor were, in that case, prepared to waive their rights and give their written promise not to grieve the penalty if the circumstances covered by the condition occurred. The Court of Appeal found that the union and the individual member can always waive their rights and undertake in a particular case not to proceed to arbitration. That agreement does not, in such cases, bind the hands of a future arbitrator because the matter never reaches a future arbitrator’s hands in so far as the agreed disciplinary measure is concerned. Neither the union nor the member are under any statutory or collective agreement compulsion to proceed to grieve or to arbitrate if they determine (or agree) not to do so.
[53] Thus, the essential basis for the Court of Appeal’s finding was that both the union and the grievor had agreed to waive what would otherwise have been their right to grieve and proceed to arbitration from a future dismissal if the impugned conduct were to be repeated. There is no such agreement here.
[54] The same point may be made about the Society’s analogy to “last chance” agreements. What makes this type of arrangement operative and enforceable is the “agreement”. Without an agreement that the issue of remedy will not be disputed at arbitration, the future arbitrator’s jurisdiction under section 48(17) cannot be constrained.
[55] It is true that the two arbitral decisions referred to by the Society, MSSC Canada (Chatham) and Unifor, Local 127 (C.A.) and Strongco Inc. v. CAW-Canada, Local 252, 2010 CarswellOnt 10489, imposed conditions which, in substance, are similar to the first condition here. However, as is the case here, in neither of these decisions is there any discussion of the legal or jurisdictional basis for the imposition of the condition. Nor were these conditions subject to judicial review. Accordingly, we do not find these arbitral decisions to be of much assistance in analysing the jurisdictional question raised by the employer in this case.
[56] The Society was unaware of any arbitral case where a grievance over dismissal returned to a future arbitrator following the alleged breach of a condition like the first condition here. The Society’s submission, that it would be unlikely to prosecute a grievance in such circumstances, is, in our view, cold comfort to the employer in this case.
[57] It is evident that the first condition was key to the Arbitrator’s decision that termination was not the necessary outcome in the case. As reviewed above, the Arbitrator found, as an aggravating factor, that the grievor persistently failed to acknowledge the inappropriateness of his conduct and demonstrated little insight into how his actions fell below acceptable standards of behaviour. The Arbitrator found that the grievor continued to try to justify his behaviour and, even at the hearing, “continues to believe that he is the victim”. On the basis of these findings the Arbitrator agreed with the employer that the grievor’s lack of accountability and the impact that lack of accountability had on whether the grievor could be trusted not to repeat his misconduct was “a serious issue.” The Arbitrator nevertheless concluded that “termination of employment is not the only appropriate remedy and that a period of suspension and reinstatement with conditions can provide the necessary assurance that the grievor will not repeat his misconduct” (emphasis added). In the circumstances, it can reasonably be inferred that the first condition was one of the critical foundations, if not the central feature, of the Arbitrator’s decision on penalty.
[58] Accordingly, given that the first condition is unenforceable, we find that the penalty imposed by the Arbitrator is unreasonable.
Remedy
[59] This is not a case where it is “obvious” what the outcome of the arbitration process should be in the absence of the first condition: Vavilov, paras. 139-142.
[60] If the first condition is severed, the force and intent of the penalty is lost. However, given our finding above on the reasonableness of the Arbitrator’s conclusion that termination was not the appropriate penalty, we cannot substitute termination for the penalty imposed by the Arbitrator.
[61] The issue of penalty should therefore go back to the Arbitrator to decide.
[62] Given that the Society did not take issue with the first condition, it may be that crafting a condition similar to the one in Great Atlantic & Pacific or using remedial techniques such as “last chance” agreements are available in this case. If so, the intent of the penalty could be preserved without the jurisdictional issue.
[63] If not, there are a number of variables operating within the Arbitrator’s ultimate penalty, of which the first condition, although important, is only one. These variables include, to name only the most obvious: whether suspension remains the correct remedy in the absence of the first condition; the length of the suspension; and, whether the suspension and the period up to the completion of the re-training should be with or without pay.
[64] But these are not matters for this Court to decide. It will be up to the Arbitrator to decide what penalty should be imposed in light of our finding that he had no authority to impose the first condition.
Conclusion
[65] For these reasons, the application for judicial review is granted and we order that the issue of penalty be remitted back to the Arbitrator for re-hearing on the issue of penalty in accordance with the guidance provided in these reasons.
[66] As agreed between the parties, OPG is entitled to costs in the amount of $9,000.
Penny J.
Favreau J.
I agree _______________________________
Swinton J.
Released: December 30, 2020
CITATION: Ontario Power Generation v. The Society of United Professionals, 2020 ONSC 7824
DIVISIONAL COURT FILE NO.: 065/20
DATE: 20201230
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Swinton, Penny and Favreau JJ.
BETWEEN:
Ontario Power Generation
Applicant
– and –
The Society of United Professionals
Respondent
REASONS FOR JUDGMENT
PENNY and FAVREAU JJ.
Released: December 30, 2020