SHP 713







Canadian Pacific Railway  Company

(the “Company”)




Unifor and its Local 101R

(the “Union”)


Re: The dismissal of John Veldhoen (the “Grievor”)



Arbitrator:                              William D. McFetridge Q.C.


Appearances for the Company:


Brianne Sly              Director, Labour Relations

Denise Burke           Manager, Labour Relations

Mike Moran              Manager, Labour Relations

Jake Roemer            Manager, Alyth Mechanical Car Shop


Appearances for the Union:


Brian Stevens           National Director, Rail

Tom Murphy              President, Unifor Local 101R

Ray Lawson              Vice President, Pacific Region

John Veldhoen          Grievor


A hearing into this matter was held in Calgary, Alberta on January 17 and 25, 2014.




1.        At the outset the parties agreed that I was properly appointed and had jurisdiction over the issues in dispute in this grievance. The requirement of Rule 29.6 that my decision be rendered within 30 calendar days was waived on condition that any award of back-pay cannot include a period which is more than 30 days following the conclusion of the hearing.


2.        The central issue in the grievance is whether the Company had cause to dismiss Mr. Veldhoen from his employment. The Company accepted the burden of proof based on the civil standard of a balance of probabilities. The Company acknowledged that the grievor was a long term employee who was covered by the Collective Agreement.


3.         The Union provided an Exparte Statement of Issue:




On March 20, 2013, Mr. Veldhoen was called into work for overtime as part of a crew to re-rail a derailed freight car in the Alyth yard in Calgary Alberta. Following a job briefing, co-worker Mr. Gumienny called the manager and alleged Mr. Veldhoen was under the influence of alcohol.


Mr. Veldhoen was removed from service without pay and following a company investigation, was dismissed on April 11, 2013.


The union contends that the investigation was not fair and impartial and that the assessment of discipline was without just cause, contrary to the provisions of Rule 28, and any other Rule in Agreement 101.


The union requests Mr. Veldhoen be returned to work immediately, that all notes, memos and statements be removed from his record and that he made whole in all respects including but not limited to lost wages, benefits, pension and vacation credits and CCS.


Additionally, the union requests that CP Rail pay to Mr. Veldhoen damages that are commensurate with the deliberate, unjust and egregious treatment by CP Rail.


The Company disagrees and denies the Union’s request.


4.            The Company raised a preliminary objection to the Union’s Exparte Statement of Issue.  According to the Company the Union’s allegation that the investigation was not fair and impartial should be removed on the basis that the Union failed to provide pertinent details as required by Rule 28.8:


28.8              The Regional Vice-President of the Union may within twenty-eight (28) calendar days from the signing of the no-resolve form in Rule 28.7, submit the grievance in writing to the Area Manager or equivalent Company officer outlining all pertinent details and the date of the grievance. Within twenty-one (21) calendar days of receipt of the grievance the Area Manager or equivalent Company officer and the Regional Vice President of the Union shall enter into and have concluded formal consultation pertaining to the grievance. (emphasis added)


5.            The Union alleges that neither the grievor nor the Union were provided with a copy of Glenn Wheatcroft’s statement at the time of the grievor’s investigative interview. The Union alleged that this is contrary to the express language of Rule 28.2 which requires that the Company provide the employee and his authorized union representative with “all available evidence to be used in the investigation”.


6.            The grievance and the Union’s allegation concerning the fairness and impartiality of the investigation are based on Rule 28:


28.1      No employee shall be disciplined or discharged until he/she has had a fair and impartial investigation and his/her responsibility established. An employee maybe held out of service pending investigation up to five working days, which can be extended by agreement with Regional Union Representative. Employees shall not be held out of service unnecessarily.


28.2      Except as otherwise provided in this rule, when an investigation is to be held, the employee and his/her duly authorized representative will be given at least two days notice of the investigation and will be notified of the time, place and subject matter of such investigation. The notice will be in writing, when practicable. This shall not be construed to mean that the proper officer of the Company, who may be on the ground when the cause of such investigation occurs, shall be prevented from holding an immediate investigation.

The notification shall be accompanied with all available evidence to be used in the investigation. This will not prevent the Company from introducing further evidence should evidence come to the attention of the Company subsequent to the notification process above. If the evidence comes to light before commencement of the investigation, every effort will be made to advise the employee and/or the accredited representative of the Union of the evidence. Furthermore, should any new facts come to light during the course of the investigation, such facts will be investigated and, if necessary, placed into evidence during the course f the investigation.


When employees are required to make statements on matters affecting the Agreement, Company working rules or compensation, a duly authorized representative of the employee shall be present.


Copies of statements, stenographic reports and all other evidence taken shall be furnished to the employee, and, if present, to his /her authorized representative. (emphasis added)


7.            The Union provided numerous arbitral authorities Interpreting this Collective Agreement where the Company’s failure to meet its obligations under Rule 28.2 has been grounds to declare discipline void ab initio for want of procedural fairness.


8.            The evidence on this issue was less that comprehensive although I take note of the fact that it may not be possible for the Union to know what evidence was not provided. A failure by the Company to provide “all available evidence” may be difficult or impossible to discover until later in the proceedings. This could interfere with the Union’s ability to provide the Company with “all pertinent details” in accordance with Rule 28.8.


9.            It seems to me that the legitimate concerns raised by the Company could be addressed by an adjournment if the Union does not disclose the pertinent details of its allegations. This would avoid the prejudice of being taken by surprise and allow the Company to prepare a proper defence. Here there was no request for an adjournment however it is unnecessary for me to make a determination on the Union’s allegations of procedural unfairness. The case can be decided on its merits, independently of whether the investigation was fair and impartial and I believe the parties interests are better served by dealing with the real issue.





10.         At the time of his dismissal Mr. Veldhoen was 54 years of age and had more than 36 years of service with the Company. He had announced his intention to retire when he became eligible for a full pension at age 55.  He was approximately 9 months away from retirement.


11.         He is a journeyman Carman (Railcar Mechanic) and the senior Pettibone operator. The Pettibone is a large mobile crane (87,000 lb) which can travel by road or rail and is used to re-rail locomotives and freight cars following a derailment.


12.         He also held a Rule 6 Supplementary Service position as a Pettibone and chase truck operator. This entitled him to be called on emergency calls and wrecking service work. This was a source of substantial overtime.


13.         On Tuesday, March 19, 2013, the day before the incident that led to his dismissal, the grievor had a long day dealing with a derailment east of Lake Louise, AB. It took over 12 hours to complete the work and the crew did not return to the Alyth Yard until 23:30 hours.


14.         The next day, Wednesday March 20, 2013, he reported to work for his regular shift at 07:00 hours. He completed his shift at 15:00 and went directly home.  He logged into his computer and responded to some work related emails. He consumed one Bowman Lager beer, had a nap and joined his wife for supper at about 17:15. He had another Bowman Lager with his meal and then watched TV with his wife.


15.         A little over 2 hours later, at 19:45, he received a call from Supervisor Jake Roemer asking him to come in to re-rail a freight car at Ogden yard. He accepted the call and, as he lives nearby, arrived at the Alyth Yard by 20:10. He changed and began reconfiguring the Pettibone to travel by road to the Ogden Yard. There are approximately 25 steps in the procedure to move the boom and reconfigure the Pettibone.


16.         Shortly thereafter, co-workers Rick Gumienny and Glenn Wheatcroft arrived. They were the next most senior Supplementary Service employees available. Mr. Gumienny asked the grievor if he needed help reconfiguring the Pettibone and the grievor indicated that he did not. They had a discussion as to who would drive the Pettibone and the grievor, as the senior operator, indicated that he would. Mr. Gumienny was to follow in the chase truck. The grievor and Mr. Wheatcroft finished preparing the Pettibone and left together at approximately 20:30 – 20:45. Mr. Wheatcroft was beside him in the cab when the grievor drove the Pettibone approximately 10 km on city streets to the derailment site at the Ogden Yard.


17.         During their discussion at the Pettibone garage, Mr. Gumienny smelled alcohol on the grievor’s breath. He observed that he was “kind of fidgeting and looked to be in a rush”. After the grievor and Mr. Wheatcroft departed, Mr. Gumienny telephoned Supervisor Roemer and informed him that the grievor smelled of alcohol and was acting fidgety.


18.         When the grievor arrived at Ogden Yard, Supervisor Roemer asked him if he had consumed any alcohol prior to reporting for work. The grievor responded that he had two beers several hours ago.


19.         Supervisor Roemer could smell alcohol on the grievor’s breath and advised him that he was being held out of service pending an investigation. He made arrangements for him to be taken by Supervisor Kris Babuk for a substance test.


20.         The grievor believed that he was capable of performing his duties safely and effectively and did not object to taking a substance test as he expected it would exonerate him. Approximately 20 minutes later at 21:20, Supervisor Babuk transported the grievor back to Alyth Yard where they met Trainmaster (Supervisor) Wayne Crow.


21.         At about 22:00, Supervisor Crow and the grievor left in Supervisor Crow’s pick-up for the Drivers Check facility. Drivers Check performs substance tests for the Company. Supervisor Crow called ahead and heard a recorded message indicating no one could come to the phone because they were busy with another client. The message did not disclose that the facility was closed. When they arrived at about 22:30, the facility was closed and it took about 40 minutes for Supervisor Crow to reach a Driver Check representative.


22.         The Drivers Check representative indicated that there was no one to perform the tests but he would get someone to come in. At 23:45 the Drivers Check representative advised Supervisor Crow that he had been unable find anyone to do the tests but would continue to look. At 00:06 hours, the Drivers Check representative advised Supervisor Crow that there was no qualified technician available. Supervisor Crow called Supervisor Babuk with this information and returned with the grievor to the Alyth Yard.


23.         Supervisor Babuk immediately contacted the CP Police and spoke to Constable Utigard. Constable Utigard indicated that given the lengthy delay in getting the grievor tested, there was no point in testing him at this time. Supervisors Babuk and Crow drove the grievor home at about 1:00.


24.         Although the smell alcohol on the grievor’s breath was noticed by a number of persons, only Mr. Gumienny reported any unusual behaviour. He said the grievor was “kind of fidgeting and looked to be in a rush.” None of the witnesses, including Mr. Gumienny, observed any of the classic signs of impairment such as slurred speech, glassy and bloodshot eyes, unsteadiness on his feet or erratic driving.


25.         Supervisor Roemer indicated “…while speaking with John (the grievor) I did sense a strong odor of alcohol coming from his breath, but did not observe any other signs the he may have been unfit for duty.” Although Supervisor Roemer reported that Mr. Gumienny had observed “erratic” behaviour that was not a word Mr. Gumienny used and appears to be Mr. Roemer’s interpretation of Mr. Gumienny’s statement that the grievor was “kind of fidgeting and looked to be in a rush.”


26.         Supervisor Babuk told the investigator: “During the drive back I could smell alcohol in the cab of the truck coming from John. John’s behavior appeared to be normal and I did not sense any slurred words or notice other signs relating to alcohol consumption”.


27.         Supervisor Crow’s statement indicates that the odor of alcohol was on the grievor’s breath but he made no mention of behavior indicative of impairment.


28.         Mr. Wheatcroft assisted the grievor to prepare the Pettibone and drove in it with him from the Alyth Yard to the Ogden Yard. He did not notice the smell of alcohol, did not observe any unusual behaviour and indicated that the grievor performed as usual and appeared to be fit for duty.


29.          Mr. Wheatcroft was subjected to close questioning by the investigator:


Q23     Were you in an enclosed space during this time or did you have the windows open?


A23     Window open which is usual. John Veldhoen usually has the window open a little for a breeze.    


Q24     During this time did you notice anything out of the ordinary for Mr. Veldhoen including his actions, his odor, and anything out of the ordinary?


A24     No I did not.


Q25     Are you aware that 3 supervisors, and 1 fellow employee smelled the odor of alcohol on Mr. Veldhoen on March 20, 2013.

A25     I am aware of that now.


Q26     Knowing that the odor of alcohol was noted by them do you now in reflection remember anything out of the ordinary for Mr. Veldhoen including his actions, and his odor, during your interactions with Mr. Veldhoen on March 20, 2013?


A26     No, he performed as usual, drove as usual, our talk was minimal I did not notice any slurred words or anything else. He drove the Pettibone as usual and I have ridden with a lot of operators and they are all good drivers.


Q27     So you are saying that you did not smell the odor of alcohol on Mr. Veldhoen on March 20, 2013?


A27     That is correct.


Q28   In your opinion from your observations do you feel                                    that Mr. Veldhoen was fit for duty on March 20, 2013?


 A28  Yes I do.


30.         The grievor was held out of service from March 20 until April 11, 2013. He was called in for an investigative interview on March 27 and on April 11, 2013 he was notified that he was dismissed for the following reasons:


“For your gross negligence as evidenced by you consuming alcohol while subject to duty on March 20th, 2013, a violation of Rule 6.11 of the CAW Local 101 Collective Agreement and a violation of OHS Policy 5100 – Drug And Alcohol Policy and accepting a Rule 6 Supplementary Service call to duty as a Safety Sensitive employee at Alyth, Railcar Facility.”



31.         Company Argument:


a)   The grievor held a Supplementary Service role and was therefore required, at all times, to be able to report for duty within one hour of being called;


b)   On March 20, 2013 the grievor accepted a Supplementary Service assignment after having consumed alcohol. He reported for duty smelling of alcohol and displaying “erratic behaviour”;


c)   The Company had reasonable grounds to remove the grievor from service and send him for For Cause substance testing ;


d)   Although substance testing could not be conducted, the totality of the evidence established that the grievor had reported for work with the smell of alcohol on his breath and that the smell of alcohol persisted for several hours after he reported fro duty;


e)   The Company conducted an investigation and obtained further information concerning the grievor’s condition when he reported for duty;


f)     The grievor admitted that when he reported for duty, he was tired having had only about 5 hours rest the previous night and that he had consumed two bottles of beer since coming off shift at 15:00;


g)   Based on the observations of three managers and one co-worker, the Company concluded that the strong odor of alcohol indicated that the grievor must have consumed more alcohol than he admits;



h)   The Company concluded that the grievor had reported for work under the influence of alcohol in direct violation of OHS 5100 Alcohol & Drug Policy;


i)     The fact that the Company was unable to arrange a substance test does not render the decision to terminate his employment null and void, the Company had the  evidence of three managers and a co-worker to justify the imposition of discipline;


j)      On the issue of whether the Company had grounds to require the Grievor to undergo for cause substance testing, the Company argued that the smell of alcohol and the report of abnormal behavior constituted reasonable cause to question his condition and fitness for work and demand that he undergo drug and alcohol testing.


32.                 Union Argument:


a)   The grievor was not “subject to duty” on March 20, 2013 when, after completing his regular shift, he consumed alcohol between 15:00 and 17:30;


b)   Rule 6.11 requires Supplementary Service employees to be available for call and able to report for duty within one hour. The standard which must be met is fitness for duty within one hour and there was no evidence that on March 20, 2013 the grievor was not fit for duty when he reported for work;


c)   The grievor did not violate Rule 6.11, when he reported for duty at 20:20 he had not consumed alcohol during the preceding 2 ˝ hours;


d)   the Company’s Drug and Alcohol Policy, OHS Policy 5100, is not part of the Collective Agreement and to the extent that it purports to require Supplementary Service employees to abstain from consumption of alcohol while away from the worksite between shifts, cannot be the basis for discipline;


e)   the Company did not have reasonable and probable cause to require the grievor to submit to breath and urinalysis tests and that in directing the grievor to do so failed to meet the requirements of  OHS 5100 section 3.2.2 For Cause Testing.




33.         Leaving aside the allegation of “gross negligence,” I will deal first with the charge that the grievor committed a violation of Rule 6.11 by consuming alcohol while subject to duty. Supplementary Service Employees who are subject to Rule 6.11 must  be available for call and able to report for duty within one hour. (emphasis added)


34.         Available for call means that the employee must be reachable, and not too far away to report for duty within one hour. The grievor met the availability requirement simply by carrying and answering his Company supplied cell phone and being within one hour from the workplace.


35.         The other requirement of Rule 6.11 is to be “able to report for duty”. This demands a level fitness which would be negated by impairment due to alcohol or drugs. The issue here is whether the grievor was fit for duty when he reported for work on March 20, 2013.


36.         The evidence as to the grievor’s fitness for duty is difficult to reconcile with the Company’s decision to terminate his employment. The only evidence that the grievor might be unfit for duty was the smell of alcohol and his admission that he had consumed two bottles of beer between 15:00 and 17:30. The grievor testified that his last drink was consumed more than 2 ˝ hours before he reported for work.


37.         Mr. Gumienny’s observation that he was “kind of fidgeting and looked to be in a rush getting the Pettibone ready to leave” is not an indication that the grievor was impaired or unfit for duty. This is especially so in light of the evidence of four other witnesses, including three supervisors, who observed the grievor at various times throughout the evening and saw no abnormal behavior or conduct indicative of impairment.


38.         Supervisor Roemer smelled alcohol but did not observe any other signs that the grievor was unfit for duty. Supervisor Babuk indicated that the grievor’s behavior appeared to be normal. He stated that he did not notice any slurred words or other signs relating to alcohol consumption. Supervisor Crow smelled alcohol but did not mention any behavior indicative of impairment. Mr. Wheatcroft indicated that the grievor performed as usual, drove as usual and he did not notice any slurred words or anything else to suggest that he was unfit to perform his duties. In his opinion the Grievor was fit for duty.


39.         During the investigation Mr. Gumienny was asked: “In your   opinion from your observations do you feel Mr. Veldhoen was fit for duty on March 20, 2013?  His answer was “visually yes”. I take this qualified resonse to mean that the grievor smelled like he might be unfit for duty but did not look like he was unfit for duty.


40.         Mr. Gumienny’s opportunity to observe the grievor was brief, he spoke with him while the grievor was reconfiguring the Pettibone. He asked the grievor if he needed help, the grievor declined his offer and indicated he’d drive the Pettibone. Mr. Gumienny then left to get the chase truck ready.


41.         Supervisor Babuk, Mr Wheatcroft  and Supervisor Crow each had a better opportunity to observe the grievor than either Mr. Gumienny or Supervisor Roemer. Supervisor Babuk drove with the grievor from the Ogden Yard to the Alyth Yard in his pick-up truck.  Mr. Wheatcroft observed him while he reconfigured the Pettibone and then drove with him over to the Ogden Yard. Supervisor Crow was with the grievor in the enclosed cab of a pick up truck for approximately 2 ˝ hours from 22:00 until about 00:30 while they waited for someone to administer the substance test.


42.         Mr. Gumienny’s evidence does not establish that the grievor was unfit for duty. Mr. Gumienny indicated that the grievor did not look like he was unfit for duty. Mr. Gumienny observation that he was “kind of fidgeting and in a rush”, even in combination with the smell of alcohol this does not lead to a conclusion that the grievor was impaired or otherwise unfit for duty. He’d worked overtime the day before and was now back at work again after a full days work. It would be reasonable to conclude that he was in a rush to finish the work and go home to bed. 


43.         The smell of alcohol and the equivocal observation of one witness out of five does not satisfy the Company’s obligation to prove, on a balance of probabilities, that the grievor was unfit for duty on March 20, 2013. The Company has not shown that the grievor violated Rule 6.11.


44.         In addition to the requirements Rule 6.11of the Collective Agreement, the Company relied on Policy OHS 5100 - Drug and Alcohol Procedures, which it claims were also violated as grounds for dismissal. The relevant section is set out below:


2.1 Standards to be Met:  All employees must report for work in a condition that enables them to safely and effectively perform their duties. To minimize the risk of unsafe and/or unsatisfactory performance due to the use or after-effects of alcohol and drugs, including  medications, as well as any mood altering substances that can impact performance, employees are expected to comply with the following standards and to report fit and remain fit for work as scheduled.


2.1.2 Alcohol

The following are prohibited while on Company premises and worksites with the exceptions noted below:

-         The consumption, possession, distribution, offering or sale of beverage alcohol

-         The consumption of any product containing alcohol (including beverage alcohol) during working hours, on duty (including during breaks), on call or on scheduled call for all persons occupying Safety Critical and Safety Sensitive positions and for all employees when they are directly affecting or involved in Operations or are present at an Operations site.

-         To be in control of a CP vehicle or moving equipment, either on or off duty, while under the influence of alcohol including the after-effects of such use. (emphasis added)


45.         It is a longstanding principle of labour relations that a Company cannot unilaterally enforce rules if they conflict with the terms of the Collective Agreement. (see KVP Co. v. Sawmill Workers’ Union, Local 2537, 16 L.A.C. 73, [1965] O.L.A.A. No,. 2 (QL). Drug and Alcohol Policy OHS 5100 prohibits employees who directly affect or are involved in Operations or are present at an Operations site, from consuming any product containing alcohol, not just during working hours and when they are on duty (including during breaks) but also when on call or on scheduled call. Although it is not clear that Supplementary Service Employees would be covered by the policy as there appears to be a distinction between being “on call” or “on scheduled call” and being “available for call.”  However, if they must comply, it is doubtful that they could ever consume a product that contains alcohol and must abstain from alcohol at all times. This is a higher standard than Rule 6.11 which only requires Supplementary Service employees to be available for call and fit for duty within one hour of being called. 


46.          In Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd. 2013 SCC 34 (CanLII), 2013 SCC 34, SCJ No. 34 (QL) at para 24 – 25 the SCC endorsed the principles set out in KVP:


The scope of management’s unilateral rule-making authority under a collective agreement is persuasively set out in Re Lumber & Sawmill Workers’ Union, Local 2537, and KVP Co. (1965), 16 L.A.C. 73 (Robinson). The heart of the “KVP test”, which is generally applied by arbitrators, is that any rule or policy unilaterally imposed by an employer and not subsequently agreed to by the union, must be consistent with the collective agreement and be reasonable (Donald J.M. Brown and Davis M. Beatty, Canadian Labour Arbitration (4th ed. (loose leaf)), vol. 1 at topic 4:1520).


The KVP test has also been applied by the courts. Tarnopolsky J.A. launched the judicial endorsement of KVP in Metropolitan Toronto (Municipality) v. C.U.P.E. 1990 CanLII 6974 (ON CA), (1990), 74 O.R. (2d) 239 (C.A.) leave to appeal refused, [1990] 2 S.C.R. ix, concluding that the “weight of authority and common sense” supported the principal that “all company rules with disciplinary consequences must be reasonable” (pp. 257 – 58) (emphasis in original). In other words:


The Employer cannot, by exercising its management functions, issue unreasonable rules and then discipline employees for failure to follow them. Such discipline would simply be without reasonable cause. To permit such action would be to invite subversion of the reasonable cause clause.


47.         In its notice of dismissal (Form 104), the Company included as grounds for dismissal, his “consumption of alcohol while subject to duty on March 20, 2013” which it alleged was “a violation of OHS Policy 5100 – Drug and Alcohol Policy”.  The OHS Policy 5100 is a unilateral rule imposed by the Company and not agreed to by the Union. It is not consistent with the Collective Agreement as it purports to raise the standard required of Supplementary Service Employees from “fitness for duty” to what amounts to “total abstinence”. Total abstinence is not the standard that the parties agreed to in the Collective Agreement, it is not reasonable and cannot be the basis for discipline.


48.         Rule 6.12 and more specifically OHS Policy 5100 at 2.1.6 contemplates the possibility that an employee, not on call, might receive a request to perform unscheduled services after consuming alcohol. In such circumstance it is the responsibility of the employee to decline the work if his ability to perform the duties is impaired by drugs or alcohol. There was uncontested evidence that Supplementary Service Employees who have consumed alcohol while off duty and then receives a call, can refuse the assignment without fear of discipline if he believes he is unfit for duty.


49.         The termination notice (Form 104) includes, as grounds for dismissal, that the grievor consumed alcohol while “subject to duty. ” The Union argued that the when the grievor received the call he was not “subject to duty”. The Union drew a distinction between being “available for call” and being “subject to duty”. The Union pointed out that OHS 5100 Alcohol & Drug Procedures does not refer to being “available for call” and in 2.1.2 uses the words “on call” or “on scheduled call” and argued that these too are concepts which are different from being “available for call”.


50.         According to the Union, “subject to duty”, “on call” and “on scheduled call” are concepts which have no application to employees under this Collective Agreement. The Union indicated that they apply only to employees working under Canadian Rail Operating Rules (CROR) - Rule G. The distinction is that Rule 6.11 Supplementary Service Employees must be available and report for duty within one hour, whereas employees subject to Rule G who are  “subject to duty”, “on call” or “on scheduled call”, must be immediately available to report for duty and receive pay while they await the call. The Union argued that it was common ground that the grievor was not subject to CROR – Rule G and there was no evidence that contradicted this position.


51.         The words “subject to duty” and “on call” appear in OHS 5100 but not in Rule 6.11. Based on my finding that the grievor met the requirements of Rule 6.11 and that a violation of OHS 5100 could not, without more, be the basis for discipline, it is unnecessary for me to make any further findings on this issue.


52.         The Company provided no evidence to support its allegation of “gross negligence” and made no effort to pursue this allegation during the hearing.


53.         The Union took issue with the Company’s decision to require the Grievor submit to a substance test on the basis that there was no justification to do so. I reject the Union’s argument, the smell of alcohol and the grievor’s admission that he had had consumed two beers was a reasonable basis for the Company to require him to submit to testing. Although the grievor did not have a choice, he testified that he believed that a substance test would exonerate him. He consented to the testing and was fully co-operative.


54.         Failure to administer a substance test is not necessarily fatal to a finding that an employee is unfit for duty. There are numerous cases where employees have been found to be unfit for duty without testing results. These decisions were based on evidence of behaviour consistent with impairment: slurred speech, glassy and bloodshot eyes, unsteadiness on their feet or erratic driving. What is required is reliable evidence that the employee is impaired or otherwise unfit for duty.  Apart from the smell of alcohol, here there was no reliable evidence that the grievor’s ability to perform his duties was impaired or that he was unfit for duty.


55.         The grievance is allowed.




56.         The grievor is entitled to be reinstated immediately, without loss of seniority and with full compensation for all wages, overtime and benefits lost since he was taken out of service on March 20, 2012. He is also entitled to all pension contributions or adjustments necessary to put him into the position he would have been in had he worked as a full time employee since March 20, 2013. He is entitled to interest on the amounts payable in accordance with the rates set out in the applicable legislation. All reference to this incident is to be removed from his record.


57.         The Union argued that the Company’s conduct provided grounds for an award of general damages. According to the Union the Company’s decision to dismiss the grievor was a reckless exercise of management authority motivated by bad faith. 


58.         The grievor was a 36 year employee with a clean disciplinary record (he had one “caution” on his record 15 years ago), who had announced his intention to take early retirement when he became eligible in approximately 9 months. The Company had no factual evidence of impairment and no evidence to support its allegations that he was unfit for duty when he reported for work on March 20, 2013.


59.         The consequences of termination for cause at any stage in an employee’s career can be devastating however termination for cause after a successful career spanning 36 years results in exceptional hardship. As Dickson C.J. noted in Reference Re Public Service Employee Relations Act (Alta.), 1987 CanLII 88 (SCC), [1987] 1 S.C.R. 313, at p. 368:  

Work is one of the most fundamental aspects in a person's life, providing the individual with a means of financial support and, as importantly, a contributory role in society.  A person's employment is an essential component of his or her sense of identity, self-worth and emotional well-being. 

60.         The Company is a sophisticated employer with decades of experience in labour relations and must be presumed to be aware of the consequences of summary dismissal to an employee who has spent his entire working life with the Company and the destructive effect that such a decision would have on the employee’s financial security, sense of identity, self-worth and emotional well being.


61.         Suddenly and without warning the grievor lost his reputation, his contributory role in society, his ability to support his family and his goal of early retirement. To be eligible for an unreduced pension for purposes of early retirement, an employee must be in active employment. The grievor had achieved the required “formula 85” but was nine months short of age 55 and was therefore not yet eligible for early retirement. His dismissal also meant the loss the right to an unreduced pension prior to age 65.


62.         Upon being terminated, the grievor was advised that he could commence his pension as early as May 1, 2013 however the monthly benefit was roughly 50% less than the pension benefit he had been advised he would receive when he became eligible for early retire in approximately 9 months.


63.         Even if there had been credible evidence that the grievor was unfit for duty, (which there was not), the Company could not justify his dismissal without taking into consideration other factors which bear on the appropriateness of such a severe penalty.  When imposing discipline an employer must take account the context of the misconduct, which in this case, would include the previous good record of the grievor, the long service of the grievor, the fact that the offence was an isolated incident in the grievor’s employment history and that the penalty would create a special economic hardship. (See McKinley v. B.C. Tel, 2001 SCC 38 (CanLII), 2001 SCC 38, [2001] S.C.J. No. 40 (QL) and the cases quoted therein). The Company does not appear to have considered or properly considered these relevant factors in determining the discipline to be imposed.


64.         On the evidence before me, I find it difficult to understand how the Company could possibly believe it had grounds to dismiss the grievor. He was a long service employee with a clear disciplinary record who had announced his intention to take earlier retirement. The Company had the benefit of a thorough investigation during which all available witnesses were closely questioned. The investigation established that apart from the smell of alcohol there was no evidence that the grievor was unfit for duty. Four of five witnesses, including three supervisors, saw no behavior which was indicative of impairment and the other witness conceded that the grievor didn’t look like he was unfit for duty.


65.         The Union argued that the Company had deliberately created a “culture of fear” to intimidate the grievor and other employees to “voluntarily” leave the Company. This would fulfill the Company goals to reduce the workforce and change the culture. In support of this argument, the Union provided correspondence from the Company to employees facing disciplinary action who were offered the opportunity to leave the Company voluntarily rather than face discipline or discharge. The Union also provided excerpts from newspaper stories, interviews and speeches by CP President Hunter Harrison which confirm the validity of the “culture of fear” allegations, aggressive staff reduction program and intention to change the culture of the Company.


66.         The Union argued that the Company’s conduct was deliberate, unfair and insensitive and that the Company was aware that it would cause the grievor mental distress. The Company’s conduct did cause the Grievor mental distress well beyond the normal hurt feelings associated with a dismissal. 


67.         According to the Union the Company knew or ought to have known that it did not have grounds to discharge the grievor but proceeded despite the lack of evidence. Such conduct warrants an award of “bad faith damages” to deter the Company from future misconduct in the administration of the collective agreement. It seeks general damages in the amount of $5000 to compensate the grievor for the deliberate misconduct of the Company.


68.         Weber v. Ontario Hydro, 1995 CanLII 108 (SCC), [1995] 2 S.C.R. 929, established that arbitrators have the power to redress express or implied violations of the collective agreement including, in the proper case, damages for mental distress.


69.         The principles governing damages attributable to bad faith in the manner of dismissal were addressed Honda Canada Inc. v. Keays  2008 SCC 39 (CanLII), [2008] 2 S.C.R. 362, 2008 SCC 39 where Justice Bastarache, for the majority stated at para. 57 – 60:   

           [57] Damages resulting from the manner of dismissal must then be available only if they result from the circumstances described in Wallace, namely where the employer engages in conduct during the course of dismissal that is “unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive” (para. 98).

[58] The application of Fidler makes it unnecessary to pursue an extended analysis of the scope of any implied duty of good faith in an employment contract.  Fidler provides that “as long as the promise in relation to state of mind is a part of the bargain in the reasonable contemplation of the contracting parties, mental distress damages arising from its breach are recoverable” (para. 48). In Wallace, the Court held employers “to an obligation of good faith and fair dealing in the manner of dismissal” (para. 95) and created the expectation that, in the course of dismissal, employers would be “candid, reasonable, honest and forthright with their employees” (para. 98). At least since that time, then, there has been expectation by both parties to the contract that employers will act in good faith in the manner of dismissal. Failure to do so can lead to foreseeable, compensable damages.  As aforementioned, this Court recognized as much in Fidler itself, where we noted that the principle in Hadley “explains why an extended period of notice may have been awarded upon wrongful dismissal in employment law” (para. 54). (emphasis added)

[59] To be perfectly clear, I will conclude this analysis of our jurisprudence by saying that there is no reason to retain the distinction between “true aggravated damages” resulting from a separate cause of action and moral damages resulting from conduct in the manner of termination. Damages attributable to conduct in the manner of dismissal are always to be awarded under the Hadley principle.  Moreover, in cases where damages are awarded, no extension of the notice period is to be used to determine the proper amount to be paid. The amount is to be fixed according to the same principles and in the same way as in all other cases dealing with moral damages. Thus, if the employee can prove that the manner of dismissal caused mental distress that was in the contemplation of the parties, those damages will be awarded not through an arbitrary extension of the notice period, but through an award that reflects the actual damages. Examples of conduct in dismissal resulting in compensable damages are attacking the employee’s reputation by declarations made at the time of dismissal, misrepresentation regarding the reason for the decision, or dismissal meant to deprive the employee of a pension benefit or other right, permanent status for instance (see also the examples in Wallace, at paras. 99‑100). 

 [60] In light of the above discussion, the confusion between damages for conduct in dismissal and punitive damages is unsurprising, given that both have to do with conduct at the time of dismissal. It is important to emphasize here that the fundamental nature of damages for conduct in dismissal must be retained. This means that the award of damages for psychological injury in this context is still intended to be compensatory. The Court must avoid the pitfall of double‑compensation or double‑punishment that has been exemplified by this case.


70.         Was the Company’s conduct in the manner of termination “candid, reasonable, honest and forthright” consistent with its “obligation of good faith and fair dealing”?  It was not.


71.         The Company’s conduct fell below the required standard because it ignored the findings of its own investigation and in particular, disregarded the evidence of three supervisors who did not report that the grievor was unfit for duty.


72.         I concede that in evaluating the evidence gathered during an investigation there maybe conflicting evidence and it is open to management to give weight to some evidence and disregard other evidence. The Company may reasonably believe that certain witnesses were in a better position to observe events or that certain witnesses were biased or untruthful. A rational evaluation which resulted in the rejection of some evidence would not be inconsistent with the obligation of good faith and fair dealing.


73.         Here however, the Company dismissed the grievor without any reasonable basis to do so. This was not a situation where there was some evidence which, if believed, would support such a decision. There was no evidence that the grievor’s conduct or demeanor showed that he was unfit for duty. The smell of alcohol and the observation of one of five witnesses that he was “kind of fidgeting and in a rush” falls so far short of the mark. It does not meet reasonable standards of honesty and good faith. Furthermore, even this evidence was diluted by the admission that the grievor did not appear to be unfit for duty.


74.         The Company’s conduct was not consistent with its “obligation of good faith and fair dealing” because it dismissed the grievor exclusively on the basis of the odor of alcohol.  It failed to obtain the substance tests and had no other supporting evidence. The company disregarded the evidence of its own investigation and cannot be seen as fair and reasonable.


75.         Unlike Mr. Keays in Honda v. Keays (supra) the grievor had the protection of a collective agreement and enjoyed the peace of mind which accompanies job security.  His employment couldn’t be terminated without cause on notice or pay in lieu of notice. 


76.         I have no doubt that the grievor suffered distress and injury beyond the usual hurt feelings associated with the loss of a job.  He had served the company for 36 years and had announced his intention to retire. He felt secure in his job and reasonably believed that he need not fear arbitrary or capricious discharge or discipline. He took pride in his work as an important part of the team that was called in for emergency work involving wrecks and derailments. He knew others relied on him. He was humiliated and disgraced by the Company’s unfounded allegations of gross negligence that he had consumed alcohol contrary to his obligations as a Supplementary Service employee.


77.         Perhaps inevitably, the reasons for his dismissal became known to his co-workers and also to prospective employers who were already aware of his circumstances when he contacted them in his attempts to secure alternative employment. His wife has a medical condition and telling her that he’d been discharged for cause resulted in severe emotional distress. Since his termination in March, 2013 he has been without income and benefits. He has struggled to pay his wife’s monthly medical expenses and was unable to keep current with his rent. He was distraught when he learned that due to his dismissal, he was no longer eligible for early retirement benefits and the pension he now desperately needed was reduced by half. He was embarrassed and humiliated and in tears when co-workers brought his family a Christmas hamper.


78.         The Company’s disregard for its obligations of good faith and fairness in the termination of the grievor’s employment caused him mental distress severe enough to warrant an award of bad faith damages which I assess at $5000.


79.         The amount of damages awarded depends on the seriousness and severity of the injury suffered. Expert evidence, including medical reports, would be a useful aide in the assessment of damages. However, expert evidence is not a requirement and damages can be determined through other means, including the credible testimony of the claimant. An award of $5000 is substantially less than the amount awarded by the Courts in a number of recent cases where there was little or no medical evidence to support a finding of mental distress. (see Chappell v. Canadian Pacific Railway Company, 2010 ABQB 441 (CanLII), 2010 ABQB 441 - $20,000; Simmons v. Webb 2008 CanLII 67908 (ON SC), (2008), 54 B.L.R. (4th) 197 (Ont. S.C.) - $20,000 ; Coopola v. Capital Pontiac, Buick, Cadillac, GMC, 2011 SKQB 318 (CanLII), 2011, SKQB 318 - $25,000)


80.         It may be worth mentioning that the newspaper articles and excerpts from interviews and speeches of Company President Hunter Harrison regarding his plans to for the Company played no part in this decision. The Company is entitled to reduce staff and change the culture provided it does so honestly and in good faith and in compliance with the Collective Agreement.


81.         In summary the grievor is entitled to:


-         immediate reinstatement  without loss of seniority and with full compensation for all wages, overtime and benefits lost since he was taken out of service on March 20, 2013;

-         all pension contributions or adjustments necessary to put him into the position he would have been in had he not been dismissed and had continued to work since March 20, 2013;

-          interest on the above amounts payable in accordance with the rates set out in the applicable legislation;

-         the above amount payable will subject to required statutory deductions however the Company will co-operate with the grievor’s reasonable tax planning directives;

-         damages for mental distress in the amount of $5000;

-         all reference to this incident is to be removed from the grievor’s record.


82.         I shall retain jurisdiction with respect to matters arising in the implementation of this award.


Dated at Calgary, Alberta this 24 day of February, 2014.




                                                      William D. McFetridge Q.C.