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Termination of Employees on LTD Discriminatory
February 7, 2012

The BC Court of Appeal recently upheld an arbitrator’s decision that an employer improperly discriminated against a group of disabled employees when it terminated their employment to avoid paying severance under the permanent closure provisions of the collective agreement.

The seven grievors were all in receipt of long term disability payments, and had been unable to work for varying periods of time. A year before the permanent partial closure language of the collective agreement would have been triggered, the employer sent a letter to each grievor requesting medical evidence as to when they might return to work. The letter said that the grievor’s employment would be terminated if no information was received in 16 days. None of the grievors responded to the letter. The union filed a policy grievance alleging that the employer discriminated against the grievors by purporting to terminate them for non-culpable absenteeism in order to avoid paying severance that would be owed to them under the permanent partial closure language.

With the exception of one grievor, the arbitrator found that the employees were terminated for non-culpable excessive absenteeism. As the employer knew when the letters were sent that a permanent partial closure was possible, the arbitrator concluded that the termination letters were motivated by the likelihood that severance pay would become due under the collective agreement. On this basis, the arbitrator determined that terminations were discriminatory. She further found that the employer had failed to justify its conduct.

The employer appealed the award to the BC Court of Appeal arguing the arbitrator erred in finding the grievors had suffered any adverse treatment and further erred by finding the grievors’ disabilities were a factor in this adverse treatment. The Court dismissed the employer’s appeal, concluding that the arbitrator’s findings were reasonable based on the evidence before her. In particular, the grievors did suffer adverse treatment, as the terminations cause them to be denied severance pay. Further, it was not unreasonable for the arbitrator to conclude that the employer’s motive for termination was “the desire to avoid paying severance to disabled employees.”

The Court was not asked to review the arbitrator’s analysis on whether the employer justified its conduct as a bona fide occupational requirement.

Accordingly, the Court noted that the dismissal of the appeal ought not to be taken as an endorsement of the arbitrator’s conclusions on that issue.

West Fraser Mills Ltd. v. United Steelworkers of America, 2012 BCCA 50