HRMA Trade Show Speakers Corner May 2, Bullet-Proofing a Last Chance Agreement. Denny Kells IllnessandAbsenteeism.com

Transcription

1 HRMA Trade Show Speakers Corner May 2, 2013 Bullet-Proofing a Last Chance Agreement Denny Kells IllnessandAbsenteeism.com Good Morning. I m Denny Kells, and I m very pleased that you were able to join me this morning. By way of introduction, I am the author of Illness and Absenteeism. Its a comprehensive manual that I have written for employers, unions, and those presenting cases on behalf of either party. During my 29 years of practicing Labour law with Thompson Dorfman Sweatman LLP in Winnipeg, I came to see, time and time again, that the law dealing with workplace illness and absenteeism was fraught with confusion. I decided then that I would develop a manual that would clear up that confusion and provide solid answers to the many unanswered questions. My thinking was that if all parties had a common understanding of the law, then much needless litigation could be avoided, and that would in turn greatly reduce related human and monetary costs. Before I begin I want to mention that the manual, on display at our booth, is available as an annual subscription. The manual is supported by a monthly update that is designed to keep everything current. This update is available only to subscribers. To receive complimentary copies of our newsletter, an electronic copy of this presentation, and an excerpt from the manual that sets forth the supporting law, you can deposit your business card in the box by the front. If you don t have a business card with your address, just fill in the form that I handed out and drop it in the box. Any information that you provide will not be shared. 1

2 A complimentary subscription to our monthly newsletter is also available at our web site: To give you a taste of what you will find in the manual, I am going to speak to you today about the enforceability of last chance agreements. Can you bullet proof them? or Are you just wasting your time by attempting to do so? I expect that most of you will have some familiarity with last chance agreements. By definition, a last chance agreement is just that. A problematic employee is being given one last chance. Conditions of employment are laid out with the understanding that a breach of those conditions will justify the employee s dismissal for cause. How do you create a last chance agreement that is enforceable? What is the difference between agreements involving underlying human rights issues and those that deal solely with blameworthy behaviour such as bullying, or carelessness, or insubordination? When might an arbitrator give an addicted employee one more chance after a single relapse despite a last chance agreement? Last chance agreements generally arise in one of two contexts. First there are those agreements that address behaviour that is not attributable to a disability or other protected ground: Examples of this category would be last chance agreements involving entirely blameworthy behaviour such as theft; sexual harassment, bullying, carelessness, insubordination, blameworthy absenteeism, and failure to call in as required. In these cases, a last chance agreement will almost always prevail. Why do arbitrators typically uphold such agreements? The rationale was well articulated in a 1998 decision of the British Columbia Labour Relations Board, in a case known as Heather Steele: There are sound labour relations reasons for arbitrators to consider the terms of a last chance agreement. If an arbitrator disregarded the agreement in considering a subsequent termination, employers would be hesitant to enter such agreements. Without the benefit of this type of reinstatement option, unions may find it harder to gain reinstatement for a member. The union would be forced to litigate the matter, with the potential of losing, or deciding not to pursue the 2

3 grievance at all based on a reasonable assessment of the merits. Neither of the latter two options provide an attractive remedy for a grievor. In appropriate circumstances, last chance agreements provide an employee with the opportunity to maintain employment. While an arbitrator retains jurisdiction in the face of a last chance agreement, the arbitral law recognizes that an arbitrator should only interfere with a last chance agreement where there are strong and compelling reasons to do so. That rarely happens in the absence of human rights considerations. That then takes us to the second category of last chance agreements; that is those that address behaviour that is, at least in part, attributable to a protected ground under human rights legislation. And the most problematic in that regard are agreements dealing with addicted or mentally ill employees. You can t contract out of your Code obligations, but you can draft your agreement in a way that will enhance its enforceability. An employee who later attempts to attack this type of agreement bears the onus of establishing a) that she is suffering from a disability and b) that the disability caused or contributed to the conduct giving rise to the termination. If she fails to do so, the duty to accommodate does not arise, and there is no need to justify the agreement from a human rights perspective. Where the employee has established those two elements, the employer must then justify its position by establishing that it had accommodated the employee to the point of undue hardship. By way of an aside, the test is not whether the employer could have done more to accommodate the employee, for as one arbitrator has stated: There is always something more that could be done for a person in distress. There is always the hope that one more try or one more treatment will turn a situation around. But the Human Rights Code does not demand that disabled employees be given every conceivable 3

4 opportunity. It demands that the employee be accommodated to the point of undue hardship by the employer. Now, consider a case where the grieving employee is an alcoholic whose termination could be said to be attributable, in some measure, to her alcoholism. If there has been insufficient accommodation, the employer will have no defence to the allegation of discrimination. The discipline will be set aside and the employee will, in all likelihood, be reinstated. Now, consider that same case, with the only difference being that the employer had provided accommodation, to the point of undue hardship, either prior to or as a consequence of the reinstatement of the employee pursuant to a last chance agreement. Would further accommodation be required following a breach of the last chance agreement? That may depend on whether the further breach involved a fundamental or ancillary term of the last chance agreement. Fundamental and Ancillary Obligations The biggest mistake that parties usually make when drafting a last chance agreement is to fail to distinguish between fundamental and ancillary provisions. A single breach of a fundamental provision will likely justify termination under the agreement, while that will not normally be the case with an ancillary provision. Fundamental provisions address the underlying disability. Included are clauses dealing with abstinence, with treatment, with testing, and with the consequences that flow from a breach of such provisions. These clauses relate to treatment of the individual s underlying disability, and as such, are generally considered to be non-discriminatory. They will almost always be enforceable where the employee had been accommodated to the point of undue hardship. Ancillary provisions establish performance obligations that are not essential to the treatment of the disability. They are generally more stringent than those imposed on the general employee population, and for the most part, are not, in a material sense, realistically tied to the treatment, rehabilitation and monitoring of the employee s addiction. 4

5 Examples of provisions that fall within the ancillary category include provisions addressing - Any absence from work and/or reporting late without reasons acceptable to the employer; - A requirement to maintain a level of attendance equal to or better than the average of the other plant employees; - Any incident of unacceptable performance; and - A failure to provide a medical certificate in a timely fashion. In the case of a breach of an ancillary provision, it has been said that it is a question of assessing the seriousness of the breach and the degree of culpability involved. In such cases, an arbitrator may conclude that it is unduly harsh to terminate the employee for a lack of diligence with respect to such a term. Considering a breach in the context of undue hardship, a fundamental breach will be more likely to lead to the conclusion that further accommodation would constitute an undue hardship, whereas it may take more than one breach of an ancillary term to lead to that same conclusion. Drafting the Last Chance Agreement A last chance agreement should contain a number of essential terms. I intend to comment on both the fundamental/ancillary issue and the nature of other clauses that will enhance the enforceability of the agreement. Many are self explanatory, while others require some elaboration. Much of that elaboration can be found in the chapter excerpt that I will forward to those who provide their address. Every agreement must be tailored to the particular fact situation, and all aspects of that agreement must be consistent, one with the other. That doesn t mean that you need to start from scratch, for that rarely works. An example of a well-drafted agreement is set forth in an appendix in the 5

6 manual, and other good examples can be found in arbitral decisions dealing with last chance agreements. Any of these agreements can be modified to provide for different consequences dependent on the nature of the breach. If you expect that the agreement might be litigated at some point, then now is the time to run it by your lawyer for her comment. My comments on the essential provisions of a last chance agreement will be brief: 1. Parties to the agreement: The agreement should be executed by all three parties. 2. Circumstances Giving Rise to the Agreement: The agreement should recite the basis for its creation. Where possible, the reinstatement should be structured as a conditional reinstatement, where the employer s original decision to terminate was justified, with the parties then agreeing to reinstate the employee on the conditions set forth in the agreement. 3. Identification of the Disability Being Accommodated: The agreement should identify the nature of the underlying condition that is being accommodated. Where the reinstatement does not flow from a disability, the agreement should state that the parties acknowledge, based on representations made by the employee, that she is not suffering from a disability that requires accommodation. 4. Recitation of All Accommodation Extended to the Employee: The agreement should detail all efforts that were made to accommodate the employee during the entire period of disability. It should state that all have agreed that it would constitute an undue hardship if the employer were required to extend any additional accommodation beyond the last chance reinstatement. 5. Term of the Agreement: Absent extenuating circumstances, the agreement should be limited to a defined period, with that generally being two years. It is important that provision be made to extend the term by periods not worked. 6

7 6. Limited right to arbitration: The agreement should provide that the arbitrator s jurisdiction to consider a grievance alleging a breach is to be limited to a determination of whether one or more conditions of the agreement were breached. 7. Recognition of fundamental versus ancillary obligations. The fundamental obligations or provisions will include i) Treatment provisions: enrollment and successful completion of treatment program(s); attendance at regular support group meetings, with detailed requirements to substantiate fulfillment of the treatment and attendance obligations; a requirement to take all medications as prescribed; and a consent to have persons involved in the employee s treatment provide reports on request to confirm compliance. ii) iii) iv) Requirement for abstinence. Such a term has been considered by most arbitrators to be entirely justified despite the fact that experts routinely testify that relapses are almost inevitable during the early stages of treatment. It has been said that anything less than total abstinence would enable the employee s addiction. Unannounced testing protocol: The protocol should permit the employer to test at any time and without any reason or cause. It should minimize the possibility of interference with test sampling. It should also constitute an irrevocable consent for the test results to be relayed to the employer. Failure to comply with the protocol should be deemed to amount to a positive test for any prohibited substance. Consequences of a breach: Generally, a breach of a fundamental provision should result in termination. Where all parties are not prepared to agree that a single breach of the abstinence requirement will lead to termination, the agreement might be drafted to permit the employee to undertake additional specified treatment (perhaps at her cost) on the first occasion of a self-reported relapse. The report of relapse should be immediate and should be made 7

8 simultaneously to the union, the employer and the treating physician. The agreement should provide that a failure to immediately report such a breach, or a second relapse, whether reported or not, will justify the employee s termination. In this regard, a distinction can be made between failing to maintain sobriety (over which an employee may have only tenuous control), and failing to self report a breach of the agreement. The failure to self report is generally seen as something that was within the employee s control, and as such, is a question of honesty rather than addiction. A breach of an ancillary provision should be considered in an escalating fashion, with each breach being factored into the employer s decision to bring the employment to an end. The clause might provide, for instance, that a breach of such a provision would obligate the parties to meet to consider the circumstances of the breach, and, where appropriate, explore other reasonable supports that might be extended to the employee. It could provide that a further breach of any of these obligations would constitute an undisputed failure on the part of the employee to fulfill her obligations as they relate to the duty to accommodate, and as such, would enable the employer to terminate her employment under the agreement. 8. Attendance requirements: Where the absenteeism is attributable to a disability, the overall level of absenteeism must have risen to the point where continuation of employment would lead to an undue hardship. This is an area that can be fraught with uncertainty, and given my time constraints, I will have to leave it to you to consider this element based on the material set forth in my distribution. I hope that I have been able to provide you with a better understanding of what it will take to uphold a last-chance agreement that addresses issues that fall within the human rights realm. 8

9 Thanks for having listened so attentively. Please feel free to drop by our booth and gain an appreciation of the scope of the loose leaf manual. I will be available to answer any questions that you might have. In addition, please feel free to visit us at Chapter 7 of our manual, addressing issues relating to the provision of medical certificates, is available on the web site. Included is an extensive checklist of Factors to Review When Considering a Direction to Provide Medical Information. Thanks again. 9