Legal News

last chance agreement lives up to its name

A BC award by Dalton Larson upheld the decision of NorskeSkog Canada (Crofton Division) to terminate an employee who had breached a condition of the ‘last-chance’ agreement he had entered into with his employer. The employee was a cocaine addict, and had, following the employer’s concern that he was missing too much work due to his failed attempts to seek treatment for his addiction, checked himself into a treatment centre on an indefinite basis. At that point, the company required him to sign a ‘last chance’ agreement, which laid out a number of terms typical in such arrangements, terms dealing with treatment, testing, disclosure, and future work performance. The agreement stipulated that should the employee violate any of the terms of the agreement, he would be terminated.

The employee had been in the program for almost two months when a company representative called to inquire about the employee’s progress, and more specifically, how soon he would be able to return to work. The company’s representative was concerned that, should the employee remain off the job much longer, he would qualify for long-term disability benefits, thereby increasing the amount of time before he could resume working. The company representative told the employee’s counsellors that he would be fired if he had not returned to work by a certain date, a date which was about one week before he was to have fully completed the program. The employee was informed of this ultimatum by his counsellors and it was decided that he be placed in an accelerated program and be transferred to a treatment halfway-house, in order that he be able to resume working while still receiving supervision and treatment . Residence in the halfway house was considered to be an extension of the residential treatment he had been receiving, and came with a number of conditions, including a strict curfew.

Upon his return to work, the employee, union representatives and representatives of the company reviewed the last-chance agreement with the employee. All parties agreed that the agreement was in full force and effect.

Roughly three weeks after having resumed working, the employee broke the curfew of the halfway house in order to deal with a personal matter. This breach was discovered, and the employee was discharged from the treatment program. The company was informed of this fact. Upon receiving this information, the company terminated the employee, alleging that he breached a term of the last-chance agreement, namely that he seek and obtain treatment for his addiction. The company maintained that the employee’s failure to complete the treatment program, meant that he breached a fundamental term in the last-chance agreement.

The union alleged that the company, by pressuring the early release of the employee from the residential treatment centre had engaged in provocation sufficient to invalidate the last-chance agreement. The arbitrator rejected this argument, stating that there was no evidence to indicate that the company did anything to induce the counsellors to do anything that was against their best judgments with respect to the treatment of the employee.

The arbitrator also rejected the union argument that the employer had failed its duty to accommodate to the point of undue hardship, stating that absent strong compelling reasons to the contrary, ‘last chance’ agreements should be viewed as an agreement between the parties that the employer had already accommodated the employee to the point of undue hardship.

The arbitrator held that the last-chance agreement in this instance was very specific with respect to seeking and obtaining treatment, and that the employee’s placement in the halfway house did not signal that his treatment had been successfully completed, but rather that it should be considered an extension of his residential treatment. Consequently, his expulsion from the treatment program while at the halfway house must be considered a failure to complete the treatment program required by the last-chance agreement. Thus, even though the employee had resumed working in a satisfactory manner, the fact that he breached a fundamental term of the last chance agreement justified the employer’s decision to terminate him.

(click here for full text of the judgment)