Unionized employees terminated for cause from their jobs can – and often do – ask their unions to grieve the termination. A termination for cause means the employer has grounds (cause) to terminate the employee. This is different from a termination without cause.
After filing the grievance, an arbitration process tests the grounds (cause) for termination. The Collective Agreement in force usually sets out the number of arbitrators, timelines, opportunity for mediation, exchange of documents and other procedures the arbitration will follow.
Every arbitration is different. But today it still looks much like regular civil litigation in the courts and generally takes a lot of time to complete. Few arbitrations wrap up within a year of the termination. The arbitration can even take several years to complete where there is more than one arbitrator, procedural wrangling or a long indulgence to write the decision.
So, is the fired worker still an employee after the termination until the end of arbitration?
We will call this limbo period the “interregnum”.
Why is Interregnum Status Essential to Know?
Everyone wants to know what personal status they hold, as a matter of identity. We want to know whether we are a citizen, a manager, a member, a parent, a party to a lawsuit, a spouse or an employee.
Employment is a formal legal status. Many laws confer rights and benefits based on this status alone. For example, treatment under some legislation – such as employment insurance, taxation, human rights, employment standards, occupational health and safety, health care, privacy and workers’ compensation – depends on employment status.
Common law and contractual rights and obligations are also impacted. Is one bound by post-employment obligations such as desisting from competition, solicitation and employer disparagement? Can one claim the corporate pension and other group benefits during the interregnum?
If a subordinate asks you for a reference, can you state in that reference that you are still employed at the same organization with the same job title? When someone asks you socially what you are doing, is it honest to say that you are employed? If you apply for another job during the interregnum, can you accurately represent that you are currently employed in that job (despite having been terminated)?
The employer also needs to know your status during the interregnum as it will want to keep its records current. A significant suite of rights and obligations characterize employment. Employers have a very limited legal relationship with ex-employees, and vice versa. Former employers do not continue to control terminated employees.
Individual Contract of Employment versus Collective Agreement
Approximately 70% of all Canadian workers are non-unionized. Their legal status when terminated for cause is clear: they are no longer employees from the moment of termination. The employer’s termination decision is final and the worker has no right to review by an arbitrator.
The fired worker can still negotiate a settlement if the former employer is willing, as a way to avoid litigation and mutually end the matter. Frequently, fired workers, usually with the help of a lawyer, negotiate small paid notice periods and change of the reason for termination (to resignation or lay off).
Or the fired worker may sue for wrongful dismissal to challenge the factual grounds for cause. If the worker wins in court (sometimes years after the firing), the judge usually orders compensatory damages (money). Reinstatement is rare.
In any event, the firing completely severs employments not governed by a Collective Agreement.
The question posed by this article, of employee status during the interregnum, therefore, only presents itself in a unionized workplace.
Determination Based On Collective Agreement and Facts
The first place to turn is the language of the Collective Agreement that covers the employee. What does it say, if anything, about the worker’s interregnum status? A sample Collective Agreement reads as follows:
Where an Arbitration Board has been established, the staff member shall retain his or her appointment and the applicable salary and benefits unless and until the earlier of:
a) the Arbitration Board determines that the staff member be dismissed and the Board of Directors act upon such decision, and
b) one year following the termination decision.(emphasis added)
Several observations flow from this provision. There is a short break in employment between the termination and establishing the arbitration board, although that period would likely not exceed a few months. Not only does the fired worker remain an employee for the lesser of a year or until the arbitration decision is rendered, but that fired employee also receives full pay and benefits throughout that time. In Collective Agreements that favour employees, pay and benefits sometimes continue until the arbitral decision has been issued.
The word “benefits” may need clarification. To what benefits does it refer? Can the employer withhold any benefits? The language above sets no restrictions and a reasonable interpretation would embrace all benefits the employee previously enjoyed (such as general pay raises, expense allowances, career development opportunities and access to software and an office).
If the job continues through the interregnum, pay and benefits should naturally follow, even without saying they do. This is why Collective Agreements also generally say that the employer can suspend (with or without pay/benefits) the fired worker until the arbitration is complete. This is a new leave or suspension after termination, and most Collective Agreements require new independent reasons for that. Usually this relief “of duties” does not also revoke “privileges”. It may be challenging to enforce one’s Collective Agreement rights during the interregnum, but the arbitration hearing can address any breaches and a request for remedies.
In the absence of Collective Agreement direction on interregnum status, the post-termination actions of the employer will speak loudly. Listing the fired worker on the directory of employees, keeping the position open, and retaining the fired worker’s office, phone number and email account all contribute to the impression that the employer considers the fired worker to enjoy an implicit ongoing relationship during the interregnum, even if on leave or suspended. Employer controls over the worker in some way, such as expressly declaring a suspension or leave (employers do not issue suspensions to strangers) and regulating speech or actions, imply an employment relationship.
Once employers fire employees, they usually seek to limit the fired worker’s access to the worksite, servers, customers and other employees for operational morale and security reasons. Normally, they strenuously deny that the fired worker retains any kind of employee status for what could be a few years while the grievance arbitration on cause plays out.
The status issue is more pertinent for the fired worker who is otherwise powerless throughout the arbitral interregnum. The possibility of reinstatement and back pay further complicate the matter.
Overall, the Collective Agreement determines the worker’s interregnum status. To the extent it is silent on the issue, the employer’s actions and attempts to exercise any form of control over the fired worker may be telling.
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The information in this article was correct at time of publishing. The law may have changed since then.
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