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Ontario Court Rules That Arbitrators Have Jurisdiction To Award Aggravated and Punitive Damages
December 9, 2004

The Ontario Divisional Court recently ruled that labour arbitrators have the jurisdiction to award aggravated and punitive damages. In OPSEU and Seneca College of Applied Arts and Technology et al, the Court overturned an award in which the arbitration board concluded that it lacked jurisdiction to consider the grievor’s claims for aggravated and punitive damages.

The grievor had been dismissed for allegedly sending a number of anti-Semitic letters to a college administrator. The arbitration board allowed the grievance and ordered the grievor reinstated with full back-pay.

The union also claimed aggravated and punitive damages, based upon allegations of defamation, loss of dignity, and injury to personal feelings. The union alleged that the college’s conduct in terminating the grievor had been egregious and was motivated by bad faith, malice and anti-union animus.

The arbitration board concluded that it did not have jurisdiction to address the union’s defamation claim, or to award aggravated or punitive damages flowing from that allegation, because the collective agreement did not expressly prohibit such conduct. The union applied for judicial review of this part of the award.

On judicial review, the Ontario Court held that the arbitration board had jurisdiction to consider the union’s claims because they arose out of the grievor’s dismissal. Relying on the Supreme Court of Canada decision in Weber v. Ontario Hydro (1995), 125 D.L.R. (4th) 583 (SCC), the Court concluded that the collective agreement inferentially covered all claims pertaining to the grievor’s dismissal, including the claims for aggravated and punitive damages.

The Court remitted the aggravated and punitive damage claims to the arbitration board to determine whether such damages should be awarded in the circumstances.

OPSEU and Seneca College of Applied Arts and Technology et al., Ontario Superior Court of Justice, Docket No. 385/02, November 1, 2004.