When Settlement Negotiations Violate The Labour Code

In a recent decision (available exclusively in French), the Tribunal administratif du travail (the "Tribunal") ordered the employer to pay an employee $5,000 in moral damages and $15,000 in punitive damages. The Tribunal concluded that the employer's imposition of a seemingly disproportionate sanction on an employee may have had the effect of exerting undue pressure or a form of blackmail to compel the employee to accept a settlement, so the employee would not file a grievance, thus contravening section14 of the Labour Code (the "Code").

The Facts

The employee held the position of lead lineworker for the employer since 2009. On August15, 2021, while on call for the weekend, he drove to meet a friend using a work truck. The truck is typically made available by the employer in order to provide swift responses in case of an emergency. The employer tolerates employees using the truck for personal travel during on-call shifts.

On September20, the employee was summoned to a meeting with two investigators and his foreman. He was informed that he was the subject of a citizen's complaint in which he was accused of having used the employer's truck, on August15, for personal travel while impaired. Following this meeting, the employee was suspended without pay for the purpose of an investigation.

A few days later, the employer learned that the individual who had filed the complaint had a bad relationship with the employee's friend. Given the absence of any real evidence, according to the union representative, he asked that the employee be reinstated during the investigation. When the employer refused, the employee filed a grievance contesting the suspension.

Around October25, the employer informed the union that the suspension would last oneyear with the possibility of reducing it to fourmonths if the employee waives his right to file a grievance. Upon investigation, the employer admitted that it did not have any tangible evidence of the use of prohibited substances or alcohol or of impaired driving and that [translation] "the only grounds for reprimend related to the misuse of the employer's vehicle, the damage to the organization's image and the lack of cooperation in the investigation." The employee refused the offer and filed a grievance contesting the suspension.

On January18, the employer revised the suspension to four months, alleging new evidence without specifying what it was. The employee ultimately resumed his duties, but filed a complaint under section14 of the Code.

Decision of the Tribunal

In this case, the subject of the complaint are the actions taken by the employer's representatives to persuade the employee to waive his right to file a grievance. Insofar as the parties are in a negotiation process to settle a dispute or potential dispute, the request to waive the right to grieve does not constitute a constraint prohibited by the Code.

However, the Tribunal was of the opinion that if the requirement to waive the right to file a grievance constitutes blackmail or undue pressure, it could amount to interference with an employee's freedom to exercise its union rights and thus a violation of section14 of the Code.

Consequently, since the initial one-yearsanction imposed on the employee seemed excessive and the employer was unable to offer any plausible explanation connecting the sanction and the misconduct, the Tribunal concluded that this kind of disproportionate response constituted undue pressure, a form of intimidation or a tactic to compel the employee to accept a settlement for a lesser sanction that he could not later grieve.

In the Tribunal's view, the employer's proposed agreement was therefore not part of a simple negotiation aimed at settling the dispute and avoiding arbitration. The purpose was to put pressure on the employee, in the form of blackmail and/or intimidation, to prevent him from exercising a right set out in the Code, thereby violating section14.

In the end, the Tribunal ordered the employer to pay $5,000 for the damage to the employee's reputation and the interference with his right to associate and $15,000 in punitive damages.

Takeaway

This decision is a reminder that an employer may negotiate a settlement with a waiver to filing a grievance so long as it is part of a sincere negotiation process aimed at settling a grievance or avoiding litigation. In principle, such negotiation is not prohibited by the Code. However, the excessive severity of a sanction must not be used to compel an employee to accept a less severe sanction, as this could be considered a form of intimidation or blackmail.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.