Beyond Testing: Responding to Drugs or Alcohol in the Workplace with Due Diligence in the Mix

By Jamie Jurczak, Peter Mueller on 2015/08/10



When one thinks about the issue of drugs and alcohol in the workplace, especially in an occupational health and safety context, one’s mind is likely to drift to the Supreme Court of Canada’s decision in Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper Ltd.[2] addressing random drug and alcohol testing policies unilaterally imposed by employers on employees. In its decision, the SCC acknowledges that in the world of labour law arbitrators have developed a body of jurisprudence that ultimately requires a balanced approach to deciding whether an employer can or cannot test. As intoxicating as it is, the legal discussion surrounding testing is just the chaser to the mixture of legal issues that can arise when an employer responds to the positive result of an employee’s drug or alcohol test, or is otherwise made aware of an employee’s use of or impairment by drugs or alcohol.

Ultimately, knowledge of an employee’s drug or alcohol use (whether that knowledge is obtained through testing or otherwise) will typically require an employer to take some kind of job action towards the employee, given due diligence obligations imposed under occupational health and safety legislation to ensure the safety of workers at work.  Given the stringent obligations imposed on employers in light of OHS legislation, all too often employers jump immediately to termination without considering the other labour relations issues that arise.  This paper will explore the cocktail of issues that an employer must weigh when considering its due diligence obligations in light of the knowledge of employee drug or alcohol use.

Due diligence through discipline – the safety justification

In order to protect itself and demonstrate due diligence upon learning of an employee’s drug or alcohol use in the workplace, an employer must take some steps to indicate that not only does it not condone such use, and but also to try to protect other employees (and possibly the public, depending on the nature of the work) from dangerous situations that could arise in the future if the employee attended work under the influence and subsequently caused an accident as a result of his or her being in an impaired state.  Some form of discipline is, therefore, the most obvious form of demonstrating due diligence.  To the extent that an employer has a drug or alcohol use policy that has been violated by the circumstances of the employee’s drug or alcohol use, discipline will also be required to prove due diligence in the event of a future incident, as enforcement of safety policies is a key component of proving due diligence.

While the safety obligations of employers tend to justify some form of discipline in the circumstances of an employee’s use/abuse of drugs or alcohol in the workplace, jumping immediately to termination of the employee may not be the most advisable course of action.  While there is no doubt that termination of the employee would alleviate any future safety concerns in terms of the employee posing a danger in the workplace, the reality is that other labour relations jurisprudence around the determination of appropriate discipline of an employee do not suddenly disappear when the basis for discipline is drug or alcohol use in the workplace.

The court’s commentary in Halifax (Regional Municipality) v. Canadian Union of Public Employees, Local 108, [2013] N.S.J. No. 263[3] provides a useful starting point for considering the limits on employers’ discretion in responding to safety concerns that may arise due to drugs or alcohol in the workplace. In Halifax, the Nova Scotia Supreme Court was called upon to review an arbitrator’s decision to reinstate an employee who had been suspended and ultimately terminated. The Employee, a labourer in the Halifax Streets Department, was sitting in a city truck when approached by a supervisor who claimed to smell marijuana from the vehicle. An hour later, the Employee refused to take a drug test when asked by the Employer and in so doing, admitted to being a recreational user of marijuana. A suspension was issued pending further investigation and eventually the Employee was terminated after he was referred to a Substance Abuse Professional and refused to answer questions relating to his off-duty drug use.

The Employer had a substance abuse policy in place which authorized testing in the event that a supervisor has reasonable cause to suspect that an employee used drugs or alcohol based on specific observations, including use of such a substance, erratic behavior, uncoordinated walking, or changes in speech patterns. The Court reviewed the Arbitrator’s decision, noting it found that the evidence of drug use or impairment to be weak. The Court held that the Arbitrator’s reasons could support two conclusions: the Employer had not established that the Employee was impaired and lacked evidence to support the need for a drug test as per its own policy. The Employer argued that the Arbitrator’s decision to reinstate the Employee was not reasonable on the basis that arbitrators must defer to decisions by an employer that seek to secure a safe workplace. The Court, in rejecting the argument, stated that the Occupational Health and Safety Act[4] does nothing to detract from the right of the Employee to not be dismissed without just cause and the burden on the Employer to prove just cause as set out in the collective agreement governing the parties. In the words of the Court: “The municipality cannot dismiss Mr. Jeffrey just because it has safety concerns about him.”[5]

Ultimately, responsibilities imposed upon employers under health and safety legislation including the maintenance of a safe workplace and establishing due diligence in the face of a health and safety prosecution cannot alone trump other legal obligations arising from statutes, common law and collective agreements with respect to just cause dismissal and accommodation obligations where drug or alcohol addiction is present.

What about discipline for off-duty drug or alcohol use?

By its very nature, the use of drugs or alcohol by an employee while off-duty has the potential to impact upon his or her ability to carry out duties in the workplace in a safe manner. While the use is off-duty, intoxication or impairment could continue on to a time an employee enters the workplace, and obviously could pose a live safety risk while on-duty.  It engages the possibility of testing and potential suspension or discipline. However, the argument that employee behavior that occurs exclusively outside of the physical space of the workplace ought not to be a trigger for employer responses, including testing and discipline, continues to be a live issue when it comes to drug and alcohol use.

In Canadian Union of Public Employees Local No. 38 v. Calgary (City) (Nieckar Grievance)[6], the grievors were off-duty as they travelled from Alberta to Manitoba where they were to attend a conference as representatives of the City of Calgary. While driving on the highway, the grievors consumed beer and, as a result, were suspended for one week. The Employer had a substance abuse policy in place that, amongst other things, prohibited the use or possession of alcoholic beverages by employees while engaged in “City business”. The policy explicitly defined “City business” as including an activity undertaken on behalf of the City whether on City premises or not. The Arbitrator considered that the act of travelling to the conference could not be separated from attendance at the conference, and therefore the grievors engaged in an activity on behalf of the City while drinking and driving on the highway. However, before dismissing the grievance, the Arbitrator went on to address the argument by the Employer that even if the policy had not been in place, there would have been sufficient grounds for discipline. In the absence of the policy defining “City business”, the Arbitrator held that the grievors’ activity would be characterized as “off-duty”. As such, the City would have had to establish that the grievors’ conduct affected its legitimate business interests in relation to at least one of the following:

  • Harm to the City’s reputation;
  • The grievors unable to perform their duties satisfactorily;
  • Other employees refused, were reluctant, or were unable to work with the grievors;
  • There was a serious breach of the Criminal Code injuring the general reputation of the City and its employees;
  • The City would have difficulty in efficiently managing and directing its operations.[7]

The Arbitrator concluded that the City had not proved any impact on its legitimate business interests and therefore, had the policy not been in place, its ability to impose discipline would have been severely hampered.

This decision serves as a reminder that an employer’s safety concerns arising from an employee’s off-duty conduct can be addressed through some form of discipline if the factual context includes either a policy that clearly encompasses what might otherwise be considered “off-duty” or, absent such a policy, evidence relating to some negative impact on the employer’s legitimate business interest. The utility of having such a policy in place is heavily emphasized in this case given the suggested outcome if the policy had not existed.

Another manner in which an employer may respond to off-duty drug or alcohol use that does not necessarily lead to intoxication or impairment at the workplace is addressed in Suncor Energy Inc. v. Communications, Energy and Paperworkers Union, Local 707 (Pearson Grievance).[8] In that case, the employer had an oil mining operation in which the grievor, a 25-year employee, worked in a safety-sensitive position. Through a newspaper article, the employer became aware that the grievor had been charged with possession of marijuana and psilocybin. The employer suspended the grievor on a non-disciplinary basis while it assessed whether the news story had adversely affected its reputation. The decision to suspend was grieved which resulted in a mediated settlement. The parties signed an agreement in which the grievor consented to being tested for drugs and alcohol for 2 years in the event of his being involved in any accident on the work site. 7 months after his return to work, the grievor backed a truck into a parked vehicle causing minor damage. Pursuant to the agreement and without any evidence of impairment, the employer had the grievor tested which showed the presence of marijuana metabolites. The grievor admitted to puffing 2 to 3 joints a day on his days off and denied every smoking at work or immediately coming to work. The employer terminated the grievor.

The Arbitrator, in deciding whether the positive test justified terminating the grievor, acknowledged the employer’s position that it was responsible for exercising due diligence in order to maintain a safe workplace. The Arbitrator held that the employer’s concern was legitimate given the safety-sensitive nature of the grievor’s position, the legal obligations on the employer to keep a safe workplace, and the practical difficulties in assessing reasonably when a person is impaired by marijuana. Even though the result of the test could not answer questions as to whether the grievor was impaired at work, how much marijuana he had used, or when he had used it, the Arbitrator characterized the issue raised by the employer as one about safety and trust before ultimately dismissing the grievance. In the end, the employer was able to respond to conduct that was completely off-duty by eventually entering into an agreement, signed by the employee, to incident-based testing. The agreement and the nature of the tests meant that the employee was put on notice that discipline would ensue should a positive test result, a result that had nothing to do with impairment and could feasibly reflect what would have otherwise been the use of drugs while off-duty.

These are only but two examples from an endless list of cases that consider whether off-duty conduct ought to trigger an employer response.

The impact and effectiveness of Drug and Alcohol policies

Evident from the City of Calgary case cited above, a Drug and Alcohol policy can be an essential ingredient for employers when it comes to discipline for drug and alcohol use –both in the workplace, or outside the workplace proper, in a way that impacts the workplace.  Drug and alcohol policies are also a key ingredient for employers when it comes to proving due diligence as it relates to drugs and alcohol in the workplace.  Having a written policy that contemplates discipline (up to and including dismissal), training employees on that policy, and enforcing that policy in the event of a breach are not only key elements of proving due diligence in the face of an incident.

The City of Calgary case is but one example of how the existence of a policy can impact discipline (which may in turn impact due diligence).

Another example can be found in Lafarge Canada Inc. v. International Brotherhood of Boilermakers, Local Lodge D331 (Treutler Grievance)[9], the Grievor, a six-year employee, was a quarry operator who had been scheduled to operate a 65-tonne quarry truck shortly after the start of his morning shift at 7 a.m. Prior to operating the truck, witnesses observed the Grievor acting in an insolent manner and, after an investigation by the Employer, the Grievor admitted to having consumed alcohol up to 2 a.m. that same morning and had intended to operate a truck. The Grievor was tested twice at approximately 11:15 a.m. and blew .057 and .054 milligrams of alcohol per 100 milliliters of blood. The results of the tests were in violation of the Employer’s Drug and Alcohol Policy which sets out the “maximum level of acceptance” of less than .04 milligrams. Expert evidence before the Arbitrator established that the Grievor’s blood alcohol level at 7 a.m. would have been greater than .08 and that the Grievor had had more to drink than he had previously disclosed to his Employer. Ultimately, the Employer terminated the Grievor for insubordination and, more relevant for our purposes, being intoxicated in the workplace and intending to drive the truck which would have put his and his co-workers’ safety at risk.

In challenging the Employer’s decision to terminate, the Union argued that the Employer had not discharged its burden to make the Grievor aware that discipline could arise from a breach of the Policy. The Employer argued in response that it could have done nothing more to bring the Policy, which expressly contemplated discipline up to and including termination in case of a breach, to the Grievor’s attention. The Arbitrator was unimpressed with the position taken by the Union and adopted the reasoning in Purolator-Courier Ltd. and Teamsters in which it was held that it is not a defense for a grievor that he received a Policy but did not choose to read it.[10] After scolding the Grievor’s cavalier attitude of indifference with respect to the Policy, the Arbitrator held that the Policy itself was not a pre-requisite for the Employer to support disciplining the Grievor. Therefore any argument as to the Grievor’s lack of awareness of the Policy could not be successful.

The Arbitrator concluded that the Employer had just cause to terminate the Grievor. While the Union was acknowledged for its vigour in fulfilling its duty to represent the Grievor, it was noted that unions share the responsibility along with employers to ensure a safe workplace. The Arbitrator went on and stated:

It would be very surprising, in my view, if the Union and its members did not share the concern of the Company about the probable dangerous situation which would have been created had the grievor not been prevented from carrying out his intention to operate the quarry truck in the safety sensitive environment at the Plant. It is not difficult to imagine the repercussions the Company would have faced if it failed to deal with the risk and a serious accident had occurred.[11]

While the employer in Lafarge would have been able to uphold its decision to terminate even in the absence of its drug and alcohol policy, the utility of such policies should not be overlooked.

While the introduction of drug and alcohol policies in the workplace have the potential to be effective in disciplining or discharging employees so as to maintain a safe workplace, as with any workplace policy, they have the potential to be challenged, thereby threatening the potential for their effectiveness.  In the labour law context, the decision in Re Lumber & Sawmill Workers’ Union, Local 2537 and KVP Co. Ltd.[12] has set the law in terms of unilaterally imposed employer policies and rules. The requisites to imposing such a rule or policy are as follows:

  1. It must not be inconsistent with the collective agreement;
  2. It must not be unreasonable;
  3. It must be clear and unequivocal;
  4. It must be brought to the attention of the employee affected before the company can act on it.
  5. The employee concerned must have been notified that a breach of such rule could result in his discharge if the rule is used as a foundation for discharge.
  6. Such rule should have been consistently enforced by the company from the time it was introduced.

The effect of the rule was also described:

  1. If the breach of the rule is the foundation for the discharge of an employee such rule is not binding upon the board of arbitration dealing with the grievance, except to the extent that the action of the company in discharging the grievor, finds acceptance in the view of the arbitration board as to what is reasonable or just cause;
  2. In other words, the rule itself cannot determine the issue facing an arbitration board dealing with the question as to whether or not the discharge was for just cause because the very issue before such a board may require it to pass upon the reasonableness of the rule or upon other facts which may affect the validity of the rule itself;
  3. The rights of the employees under the collective agreement cannot be impaired or diminished by such a rule but only by agreement of the parties.[13]

The reasonableness of the implementation of the policy in light of the KVP principles is only one aspect of the reasonableness challenge a drug and alcohol policy could face.

Entrop v. Imperial Oil Limited[14] created an important distinction between random drug and alcohol testing on the basis that a positive drug test does not necessarily demonstrate present impairment due to drugs, while a positive breathalyzer reading does demonstrate present impairment due to alcohol.  In light of this reasoning, drug and alcohol policies have been challenged on the basis of the fact that they do not test for present impairment.  This occurred in Canadian National Railway Co. v. National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW-Canada).[15] The employer’s drug and alcohol policy prohibited the presence of illegal drugs and alcohol in employees’ bodies while on duty, and stated that an employee in a risk-sensitive position would be automatically discharged upon violating the policy.  The Arbitrator held this to be unreasonable, as a positive drug test would not in itself be conclusive as to impairment and therefore alone could not constitute just cause for dismissal, a standard for dismissal required by and agreed to in the governing collective agreement.

Not surprisingly, however, there are cases that go each way on the topic.  With the decision of the Alberta Court of Appeal in Alberta (Human Rights and Citizenship Commission) v. Kellogg Brown & Root (Canada) Company[16], which dealt with pre-employment drug testing and an arguably very specific fact situation, there is some support for the safety justification argument that presence of drugs in an employee’s system make them a safety risk.

Recall the reasoning in Kellogg that was used to distinguish it from Entrop:

The evidence disclosed that the effects of casual use of cannabis sometimes linger for several days after its use. Some of the lingering effects raise concerns regarding the user’s ability to function in a safety challenged environment. The purpose of the policy is to reduce workplace accidents by prohibiting workplace impairment. There is a clear connection between the policy, as it applies to recreational users of cannabis, and its purpose. The policy is directed at actual effects suffered by recreational cannabis users, not perceived effects suffered by cannabis addicts. Although there is no doubt overlap between  effects of casual use and use by addicts, that does not mean there is a mistaken perception that the casual user is an addict. To the extent that this conclusion is at odds with the decision of the Ontario Court of Appeal in Entrop v. Imperial Oil Ltd., we decline to follow that decision.

Although it might be argued that this analysis really deals with the issue of bona fide occupational requirement we conclude that it also has a role to play in whether a workplace policy is discriminatory under the Act. The Act prohibits certain, but not all, treatment based on human characteristics as discriminatory. The jurisprudence has extended the prohibited grounds to include instances where an employer incorrectly perceives that an employee has a prescribed disability. In this case KBR’s policy does not perceive Chiasson to be an addict. Rather it perceives that persons who use drugs at all are a safety risk in an already dangerous workplace.

…As we have already stated the evidence established that effects of cannabis use lingers for days particularly given that the concentration of active ingredients is now many times higher than it was in the past. Given these concerns the policy’s effects are not misdirected in their application…

We see this case as no different than that of a trucking or taxi company which has a policy requiring its employees to refrain from the use of alcohol for some time before the employee drives one of the employer’s vehicles. Such a policy does not mean that the company perceives all its drivers to be alcoholics. Rather, assuming it is aimed at safety, the policy perceives that any level of alcohol in a driver’s blood reduces his or her ability to operate the employer’s vehicles safely. This is a legitimate presumption. Its goal is laudable since carnage on the highways is a leading, but often ignored, cause of death nearing epidemic proportions. Extending human rights protections to situations resulting in placing the lives of others at risk flies in the face of logic.[17]

Ultimately, with the introduction of the Kellogg case into the mix, the issue of testing where the result may not show present impairment, and subsequent discipline as a result, has led to far more litigation than one could even begin to address in this paper, and therefore, it is simply important to remember that there are cases on both sides of the issue.

Where the focus is on present impairment, the issue of reasonableness may become less of an issue as far as the policy is concerned.  For example, in Toronto Transit Commission v. Amalgamated Transit Union, Local 113 (Jabar Grievance)[18], the collective agreement in that case expressly provided that the employer could discharge an employee for being impaired while on duty by reason of an intoxicating beverage. The grievor had consumed four beers prior to arriving at work impaired resulting in the grievor’s termination. The Arbitrator held that she was bound by the specific penalty clause in the collective agreement and therefore had no authority to intervene and substitute the termination for a lesser penalty.

Of course reasonableness is not the only issue.  While a policy may withstand the reasonableness test, there are cases indicating that the existence of a policy may not restrict the arbitrator’s ability to substitute a lesser penalty. In McDonnell Douglas Canada Ltd. and CAW, Loc. 1967, Re[19], the Arbitrator concluded that the employer had made out a prima facie case that two grievors had breached a plant rule that did not allow “…possessing, drinking, eating, using or being under the influence of habit-forming drugs or alcoholic beverages on Company premises at any time”.[20] The Arbitrator noted that the employer had an obligation to enforce rules regarding safety in light of its operations as an aircraft component manufacturer. Furthermore, the grievors had not admitted any wrongdoing and their conduct was seen by the Arbitrator as a very serious offence. However, mitigating circumstances were found given that the grievors had 10 and 4 years seniority respectively, and both had unblemished disciplinary records. In balancing the severity of the offence with the length of satisfactory service, the Arbitrator ordered that the grievors be reinstated without pay, benefits or accumulated seniority for the suspension period. The end effect was a 7-month suspension for both grievors.

In considering whether drug and alcohol policies could override an arbitrator’s discretionary jurisdiction to consider mitigating circumstances that may warrant a lesser penalty than termination, the Arbitrator in McDonnell stated, as is often the case, that “each case must be decided on its merits”.[21]

The Arbitrator in Saskatchewan Telecommunications v. Communications, Energy and Paperworkers Union of Canada (Nokonechny Grievance)[22] provided some commentary as it relates to an arbitrator’s discretionary jurisdiction to consider the reasonableness of an employer’s penalty in the context of a breach of a drug and alcohol policy.  In this case, the only issue was whether the employer had just and reasonable cause to terminate the grievors who had been drinking while driving on-duty in a company truck. An accident resulted, though no injuries were sustained and the grievors were up front about their use of alcohol. The Union acknowledged that the employer had just and reasonable cause to discipline the grievors as their conduct had been in breach of the employer’s Alcohol Use Policy and the Code of Business Conduct, but took issue with the employer’s decision to terminate. The Arbitrator, referring to Steel Equipment Co. Ltd. and U.S.W.A., Local 3257[23], listed the factors that have been held relevant in determining whether a penalty is just and reasonable:

  1. The previous good record of the grievor;
  2. The long service of the grievor;
  3. Whether or not the incident was an isolated incident in the employment history of the grievor;
  4. Provocation;
  5. Whether the offence was committed on the spur of the moment as a result of a momentary aberration, due to strong emotional impulses, or whether the offence was premeditated;
  6. Whether the penalty imposed has created a special economic hardship for the grievor in the light of his or her particular circumstances;
  7. Evidence that the company rules of conduct, either unwritten or posted, have not been uniformly enforced, thus constituting a form of discrimination;
  8. Circumstances negativing intent, e.g. likelihood that grievor misunderstood the nature or intent of an order given to him or her, and as a result disobeyed it;
  9. The seriousness of the offence in terms of company policy and company obligations;
  10. Any other circumstances which the board should properly take into consideration[24]

From a review of this list, and the balance of the decision, it is evident that no special considerations appear to be applied in the context of breach of a drug and alcohol policy as compared to any other policy that an employer has put in place.  In substituting the terminations for four-month suspensions without pay, the Arbitrator went through each of the factors. The grievors were outstanding employees, having received work-related awards. They’d been employed for 11 and 12 years, respectively. The incident was considered isolated relative to their work history, there was no provocation, and the consumption of alcohol had not been premeditated but instead involved an impromptu visit with an acquaintance and drinking liquor was not the purpose of that visit. While the employer did have policies discouraging such behavior, the Arbitrator found that the enforcement of such policies had been inconsistent given that 22 previous incidents of discipline had involved suspensions ranging from 3 days to two weeks. There had been only one termination, and that had resulted in a reinstatement pursuant to grievance proceedings. On this issue, the Arbitrator concluded:

Simply put, to terminate the grievors and then turn around and hand out short-term suspensions for subsequent alcohol-related incidents is not uniform enforcement of the rules. It is unfair and draconian relative to the recent comparables.[25]

That is not to say that applying the usual arbitral considerations will not result in a favourable decision for an employer attempting to terminate an employee for breach of a drug and alcohol policy, if the total of the facts and circumstances warrant.  For example, a 27-year employee with a clean disciplinary record was observed smoking marijuana on the employer’s premises and was consequently terminated in Interlake Acquisition Corp. v. Independent Paperworkers of Canada, Local 124 (Clark Grievance)[26]. A policy posted in the workplace and distributed to employees read: “arriving at work under the influence of alcohol on company premises, or otherwise reporting to work in a manner unfit to perform duties is a serious offence, and will lead to immediate discharge.”[27] The Arbitrator found that the grievor held a safety-sensitive position as a Shipper which involved driving a lift and fork truck. Despite the grievor’s long work history and clean disciplinary record, the Arbitrator held that discharge was appropriate and justified given that it was addressing a serious offence contrary to the employer’s rules and that it had a deterrent effect.

Some policies may set out different criteria to trigger discipline rather than a positive drug or alcohol test, intoxication or impairment, which may give rise to different disciplinary considerations when it comes to enforcement. In Bosal Canada Inc. v. National Aerospace, Transportation and General Workers Union of Canada (CAW-Canada) Local 1837 (Storey Grievance)[28], the employer’s policy prohibited employees from reporting or returning to work “bearing the smell of an alcoholic beverage…”.[29] A supervisor reported that the grievor, a 5 year employee responsible for punching holes into muffler units and without a disciplinary record, had the smell of alcohol on his breath. The employer responded by issuing a 1-day suspension to the grievor for violating the policy. The Union argued before the Arbitrator that the policy was not reasonable because the smell of alcohol does not necessarily imply impairment. In dismissing the grievance, the Arbitrator acknowledged that it can be difficult for employers to detect impairment. As such, the decision to implement a “bright line rule” which avoids future debates about whether an employee was impaired or not was reasonable. After upholding the policy, the Arbitrator accepted that suspension was appropriate given that the grievor was made of aware that he would be immediately removed from service, the policy sought to promote health and safety in the workplace and had not itself been grieved by the Union, and the “bright line rule” had been applied consistently in the past.

Bosal can be contrasted to Cami Automotive Inc. and CAW, Loc. 88, Re[30] where a grievor arrived to work allegedly “smelling like a brewery” and was consequently suspended for the balance of his shift. As the only policy in place in the workplace related to attendance, the Union argued that it was unfair to discipline an employee for breaching a standard of conduct not communicated to him. The Arbitrator removed the sanction, indicating that discipline had not been warranted because the employer had not tested the grievor and impairment had not been proven. The contrast with Bosal demonstrates the potential utility of having a clear, consistently applied policy in relation to drug and alcohol use.

As one can imagine, there are as many examples of cases considering the enforceability and reasonableness of drug and alcohol polices as there are choices of whisky at a Scottish Pub – and referring back to the Arbitrator in McDonnell, each case will be decided on its own facts.

Last Chance Agreements

A last chance agreement (LCA) is yet another element that can be added to the due diligence mix.  LCA’s may be entered into by mutual agreement between an employer, union and grievor as a means to settle a grievance and in order for an employer to meet its obligations to accommodate a grievor’s disability to the point of undue hardship. LCAs may also be imposed by an arbitrator when ordering the reinstatement of a terminated grievor.

As its name indicates, an LCA gives the employee one more chance to change their ways. It provides for reinstatement of the dismissed employee and maintenance of their job on the condition that, in the future, they comply with strict rules or standards of conduct, such as maintaining compliance with a drug or alcohol policy, or not attending work impaired – whatever the conduct or breach that led the employer to take action.

While employers might argue that an LCA reduces their ability to prove due diligence, as it ultimately requires them to return a worker they otherwise believe to be unsafe as a result of drug or alcohol use to the workplace, the reality is that an LCA is recognized as an effective ingredient in maintaining safety in the workplace as it relates to drug or alcohol use or impairment on-site, and in fact may be a strong ingredient.  This is because the conditions in an LCA, if not held to be unreasonable, can give rise to very powerful tools for an employer.  For example, they may prohibit an employee from using drugs or alcohol at all, and any breach could result in termination without any further chances.  Some agreements provide that, if the employee is dismissed for non-compliance with a condition of the agreement, the employee is barred from filing a grievance. Others, for example, allow for a grievance to be filed but restrict the arbitrator’s mandate to determining only whether the employee breached a condition of the agreement, thus denying the arbitrator’s jurisdiction to substitute a lesser penalty for the dismissal.

For example, in Telus v. Telecommunications Workers Union (H.S. Grievance)[31], the grievor had previously been terminated due to job misconduct which included sleeping on the job, leaving work early without permission, and engaging in non-company work while on-duty. A grievance ensued, during which the employer became aware of the grievor’s cocaine addiction. In order to accommodate the grievor, the employer reinstated the grievor who was subject to an LCA. The LCA required that the grievor attend a treatment program and abstain, both at and away from the workplace, from using alcohol and any other psychoactive drug unless prescribed. The term of the agreement was 2 years, and a breach was described as sufficient cause for discipline up to and including dismissal. The parties also agreed that there would be no recourse to the grievance procedure in the event of termination pursuant to the LCA. Sometime later, the grievor admitted in meeting to the employer that he had relapsed and had smoked crack cocaine. The grievor was terminated pursuant to the LCA and the grievance that resulted was dismissed as the Arbitrator held that there was no jurisdiction to change the penalty given the terms of the LCA.

The key ingredient to an effective and useful LCA is ensuring it is reasonable.  Generally, LCA’s must satisfy certain requirements in order to be found reasonable:

  • They should include a requirement for the employee to participate in an employer sanctioned treatment or counseling program, with reports on status and prognosis provided as are reasonable in the circumstances;
  •  They should provide for specific performance criteria (attendance, reporting), which is measurable.  However this criteria should not create an obligation on the employee to meet standards higher than those to which other employees are held;
  • They should contain a period of time during which the employee must meet its terms and change their conduct, or over-come their alcoholism or drug use.  Indefinite LCA’s tend not to meet the reasonableness test in the fact of a challenge.  The time frame should be lengthy enough to justify the effort and allow for rehabilitation, but not so onerous that the employee’s status essentially becomes forever “probationary”.
  • They should clearly and specifically list the “triggering” criteria that will lead to sanctions if the employee should fail to comply.

Several of the reasonableness hallmarks were addressed in the Telus case above, as well as in the following cases.

In Quintette Operating Corp. And United Steelworkers of America, Local 9113[32], an employee, who was a blaster at the employer’s mining operations was dismissed due to failure to follow the terms of an agreement related to his admitted addiction to alcohol and drugs.  In July 1995, the grievor used cocaine while on duty.  A drug screen test revealed a cocaine concentration 240 times greater than the 0.3 mg/l cut-off to indicate impairment, and given the grievor’s employment duties and the serious safety related considerations, the grievor’s transgressions viewed by the employer as one demanding an urgent response.  However, the grievor admitted to longstanding dependency on drugs and alcohol, and ultimately, the employer union and grievor reached an LCA due to the grievor’s sincere resolve to address his personal problems.  The terms of the agreement stated the following conditions:

  1. The grievor had to contract with the Assessment and Referral Service (ARS) and successfully complete a treatment program.  A failure to complete the program could lead to termination;
  2.  The grievor was to provide a written statement from his physician indicating that he was fit to return to work;
  3. Upon return to work, there was to be total abstinence on the part of the grievor from the use of narcotics, and a failure to do so would result in his immediate termination;
  4.  A similar re-occurrence would result in immediate termination;
  5.  The agreement was not grievable.

Following the implementation of the LCA, the grievor entered into a contract with ARS but continued to use drugs and alcohol and failed to cooperate with the coordinator of the service.  He was terminated as a result, and grieved.  The Arbitrator held:

The grievor’s alcoholism and drug dependency resulted in an unacceptable standard of conduct and work performance. His use of cocaine while on duty and drug-induced impairment created a safety risk and resulted in the loss of the Grievor’s blast certificate…the Employer’s response, as it had been on previous occasions, was to encourage the Grievor to seek assistance and to offer to him the opportunity to enter a rehabilitation program. Thus, the Employer treated the Grievor’s dependency as an illness and fulfilled its duty of reasonable accommodation.[33]

The Arbitrator held that the grievor was in breach of his LCA when he failed to complete the recovery program, and that ultimately the employer had discharged its onus to establish that it had just cause for dismissing the grievor on the basis of the breached LCA.

In Thunder Bay (City) v. Amalgamated Transit Union, Local 966 (Korppi Grievance), [34] the Arbitrator considered the requirement in an LCA for an employee to undergo random drug and alcohol testing.  In 2008, the grievor tested positive for alcohol and illegal drugs in the workplace.  The grievor had returned to work after a lengthy absence and entered into a LCA, having previously advised the employer he was taken steps towards treating his addition.  The terms of his LCA stated:

  1. Mr. Korppi will be put on a leave of absence without pay for a period of up to six (6) months for the purposes of attending a recognized Drug and Alcohol Treatment program
  2.  Prior to returning to work Mr. Korppi must provide the Corporation with written confirmation of participation and successful completion of a recognized Drug and Alcohol Treatment program, as well as aftercare program recommendations.
  3. Following treatment Mr. Korppi must provide the Corporation with a doctor’s note that identifies that he is fit to return to work, along with a return to work date.
  4. Mr. Korppi must attend work regularly, and in a condition fit to perform his duties in a safe and competent manner.
  5. Mr. Korppi will not commence work until he has reported to the supervisor or designate in person each day, until his supervisor advises him that this is no longer required.
  6. Mr. Korppi must submit to his Supervisor, on a bi-weekly basis, confirmation of his attendance at any Physician or Counselor recommended aftercare program, counseling sessions or support groups.
  7. Mr. Korppi will undergo random urine, blood tests or such other tests (example liver enzyme test) capable of detecting the use of alcohol or drugs prior to returning to work and, thereafter, at the request of the Corporation and for a period of time that will be determined by the Corporation of The City of Thunder Bay.
  8. Mr. Korppi’s failure to enter a treatment program and regularly attend the recommended aftercare programs or failure to abstain from use of alcohol and/or drugs after this date or failure to abide by any other condition of continued employment shall result in Mr. Korppi’s immediate termination of employment.
  9. There is no redress for wages or opportunities that were lost as a result of Mr. Korppi’s leave of absence without pay.[35]

The grievor submitted to random testing on one occasion, and returned a test that was negative; however, he subsequently refused another test a couple of months later, and was terminated as a result.

The Arbitrator held that given the grievor’s disability, the requirement that he undergo random drug and alcohol testing was bona fide and reasonable, since a relapse on his part properly presented a safety risk to at least himself and co-workers, even if he is restricted from driving vehicles on city streets.  His refusal was a breach of the LCA, and the employer therefore had just cause to discharge the grievor under the terms of the LCA.

All of these cases also address the employer’s duty to accommodate to the point of undue hardship when an employee’s drug or alcohol use is a product of addiction.  Evident from the cases reviewed above, LCAs that are entered into as part of the accommodation and due diligence process must be – and can be crafted in such a manner so as to trigger discipline, including termination, in the event of a relapse, whether on or off duty.  While the human rights considerations are beyond the scope of this paper, they are nonetheless important considerations to keep in mind when crafting an LCA.

Perhaps the most delicate issue when it comes to LCA’s is the implementation of an automatic dismissal clause where an employee fails to comply with the terms of an LCA.  Arbitrators have held that where an LCA purports to deny disabled employees the opportunity to challenge before an arbitrator the reasonableness of the employer’s decision to terminate them, or denies the opportunity to challenge whether there was in fact a breach of the agreement, an automatic termination clause may be held to be invalid.[36]  That said, there are numerous cases, including the Telus, Quintette and Thunder Bay (City) cases discussed above, indicating the inclusion of a clause waiving entitlement to grievance did not preclude the LCA’s from being upheld, even in the accommodation context.[37]  Of course, those clauses did not prevent the grievances from being filed either.  In that regard, numerous arbitration decisions have confirmed that arbitrators have jurisdiction to review LCA’s in the contest of determining whether an employer has met its statutory duty of doing everything reasonable to accommodate the needs of a disabled employee to the point of undue hardship.[38]

However, where an arbitrator has found that an employer has met its statutory obligations regarding accommodation to the point of undue hardship, an employer’s decision to terminate pursuant to an LCA will likely be confirmed, so long as the agreement has been negotiated in good faith and otherwise appears reasonable in the circumstances, recognizing that there are labour relations policy reasons for enforcing the LCA.[39]  These considerations were aptly summarized by the Arbitrator in Thunder Bay (City) and A.T.U., Local 966 (Korppi Grievance):

In Re Norbord Industries, supra, the employee was discharged under the terms of a last-chance agreement which provided for the specific disciplinary penalty of discharge should the employee breach its provision. He did so and the employer dismissed him. Relevant for our purposes, arbitrator Carrier, at para. 29, cites with approval Re Ault Foods Ltd. and Teamsters Union, Loc. 647 (1992), 24 L.A.C. (4th) 404 (McLaren), p.409:

… Thus, the absolute last chance tripartite agreement should determine the issue. It is particularly important when an employee makes a bargain such as was done here that they be held to it.

… It is always correct for the parties to resolve matters, arbitrators must be prepared to uphold the agreements of the parties, and not then subject them to further arbitral review, leading to a situation where it never ends, or where the parties will never reach an agreement.

And further, at p. 411:

If arbitrators are to interfere with the parties’ arrangements … they should do so only when the policy language supporting the actions of the company, the union and the Grievor at the time of entering the agreement are outweighed by specific factors or circumstances arising thereafter which involve the need to protect and further the interests of the Grievor over those of either the union or the company. This arbitrator agrees … that it would not be promoting and encouraging sound industrial relations to interfere in such arrangements where those facts are not present. In order to encourage the parties to resolve matters, arbitrators must be prepared to uphold the agreement the parties entered into which are not the result of arbitration even though they are subject to further arbitral review as is this agreement.[40]


A positive test or some other confirmation of drug or alcohol use at work (or in a way that could impact work) is just the beginning of an employer’s responsibility to ensure that due diligence is accomplished in keeping a safe and healthy workplace. However, a positive test or other discovery is not a license to enact the most severe of penalties in all cases. The cases reviewed above demonstrate that employers must also bear in mind the onus on them to establish that there is just cause for discipline and for terminating an employee if so desired. Consideration should also be taken of any mitigating factors that may be present that might encourage an arbitrator to exercise his or her discretion in favour of a lesser penalty. Policies and LCAs can be effective in helping clear the legal hurdles faced by employers who have disciplinary decisions challenged through the grievance process, however they are themselves subject to challenge and therefore cannot always provide absolute certainty as to the outcome of a hearing.

[1] I am grateful for the invaluable assistance of Peter Mueller, articling student-at-law, in the preparation of this paper, and would be remiss if I did not acknowledge his extensive research and written contributions.

[2] Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper Ltd., 2013 SCC 34 (CanLII).

[3] Halifax (Regional Municipality) v. Canadian Union of Public Employees, Local 108, [2013] N.S.J. No. 263

[4] Occupational Health and Safety Act, S.N.S. 1996, c. 7

[5] Supra note 3, at para 33.

[6] Canadian Union of Public Employees Local No. 38 v. Calgary (City) (Nieckar Grievance), [2004] A.G.A.A. No. 70.

[7] Ibid., at para 28.

[8] Suncor Energy Inc. v. Communications, Energy and Paperworkers Union, Local 707 (Pearson Grievance), [2004] A.G.A.A. No. 35.

[9] Lafarge Canada Inc. v. International Brotherhood of Boilermakers, Local Lodge D331 (Treutler Grievance), [2012] A.G.A.A. No. 4.

[10] Purolator Courier Ltd. and Teamsters, Local 938 (Lafee), 166 L.A.C. (4th) 54 at p. 57.

[11] Supra note 9, at para 172.

[12] Re Lumber & Sawmill Workers’ Union, Local 2537 and KVP Co. Ltd., (1965) 16 L.A.C. 73.

[13] Ibid, at para 34.

[14] Entrop v. Imperial Oil Limited, 2000 CanLII 16800 (ON CA)

[15] Canadian National Railway Co. v. National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW-Canada), [2000] C.L.A.D. No. 465.

[16] Alberta (Human Rights and Citizenship Commission) v. Kellogg Brown & Root (Canada) Company, 2007 ABCA 426 (CanLII)

[17]Ibid., at paras 33-36.

[18] Toronto Transit Commission v. Amalgamated Transit Union, Local 113 (Jabar Grievance), [2012] O.L.A.A. No. 271.

[19] McDonnell Douglas Canada Ltd. and CAW, Loc. 1967, Re, [1990] O.L.A.A. No. 105.

[20] Ibid., at para 1.

[21] Ibid., at para 32.

[22] Saskatchewan Telecommunications v. Communications, Energy and Paperworkers Union of Canada (Nokonechny Grievance), [2011] S.L.A.A. No. 18.

[23] Steel Equipment Co. Ltd. and U.S.W.A., Local 3257 (1964), 14 L.A.C. 356.

[24] Supra note 22, at para 96.

[25] Supra note 22, at para 125.

[26] Interlake Acquisition Corp. v. independent Paperworkers of Canada, Local 124 (Clark Grievance), [2004] O.L.A.A. No. 402.

[27] Ibid., at para 3.

[28] Bosal Canada Inc. v. National Aerospace, Transportation and General Workers Union of Canada (CAW-Canada) Local 1837 (Storey Grievance), [2005] O.L.A.A. No. 204.

[29] Ibid., at para 7.

[30] Cami Automotive Inc. and CAW, Loc. 88, Re, [1990] O.L.A.A. No. 71, 12 L.A.C. (4th) 30.

[31] Telus v. Telecommunications Workers Union (H.S. Grievance), [2007] C.L.A.D. No. 289.

[32] Quintette Operating Corp. And United Steelworkers of America, Local 9113, [1996] B.C.C.A.A.A. No. 130

[33] Ibid., at para 34

[34] Thunder Bay (City) v. Amalgamated Transit Union, Local 966 (Korppi Grievance) (2011), 212 L.A.C. (4th) 414

[35] Ibid, at para 1.

[36] See Brown and Beatty, Labour Arbitration (4th Edition) at section 7:6122 Last Chance Agreements (hereinafter “Brown and Beatty”) and specifically cases cited at footnote 5 therein.

[37] Ibid., and specifically cases cited at footnotes 4, 5 and 10 therein; Telus supra note 31, Quintette supra note 32, Thunder Bay (City) supra note 34.

[38] Brown and Beatty, supra note 36, and specifically cases cited at footnotes 4 and 10 therein.

[39] See Syndicat des Employés de l’Hôpital Général de Montréal v. Centre Universitaire de Santé McGill, [2007] 1 S.C.R. 161, 277 D.L.R. (4th) 577 and Thunder Bay (City) (2011), 212 L.A.C. (4th) 414; Telus, supra note 31 at para 156; and generally Brown and Beatty, supra note 36 and specifically cases cited at footnotes 2, 3 and 11 therein.

[40] Thunder Bay (City), supra note 34 at para. 54

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