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  • authored by Members for Democracy
  • published Tue, Nov 11, 2003

Understanding Last Chance Agreements

Workers who have been fired from their jobs and are grieving their dismissal may hear the phrase "last chance agreement" (or LCA), used by their union representatives during discussions about possible settlement of their grievance. Union representatives sometimes recommend that a member accept or pursue an LCA where they feel that the member's chances of getting reinstated at an arbitration hearing are slim. LCA's come with pro's and con's and it's important that workers understand what those are before leaping headlong into one of these deals.

The "up" side of signing an LCA is that it will get the worker reinstated. The LCA gets the worker back to work quickly and avoids the risk of having an arbitrator uphold the firing. The downside of an LCA is that it makes it very easy for the employer to fire the worker again and, if that happens, makes it very difficult for the worker to seek reinstatement through the grievance and arbitration procedure. Many LCA's severely limit a worker's right to file further grievances (if he or she is fired again) or have those grievances heard and decided in a way that takes into account all the relevant considerations.

Signing an LCA means that you understand and agree with its provisions. There is no going back at a later date and saying that you didn't know what you were signing or that you did not anticipate the real impact of the LCA on you. About the only way you could backpedal on an LCA is to establish that you were somehow mentally impaired at the time you signed it and so, didn't know what you were getting into and you don't really want to go there unless it's true. Your union's signature can and, if push comes to shove, will be construed as an acknowledgement that you can be treated differently than other workers.

A last chance agreement is a written agreement between the union and the employer (often the worker involved is required to sign off as well) giving a worker who has been accused of engaging in some kind of serious misconduct, one last chance to keep his/her job.

Last chance agreements are common in cases involving discharge for alcohol or drug abuse, workplace misconduct like harassment, fighting or insubordination but have also been known to turn up in cases of innocent absenteeism, unsatisfactory work performance or repeatedly violation of workplace rules.

LCA's typically provide for the reinstatement of a worker on certain strict conditions and state that the worker will be terminated if s/he breaches any of those conditions. The worker may, for example, have to agree to stop drinking, submit to random or periodic drug testing, meet specific production quotas or maintain a certain level of attendance. In the event that the worker resumes using alcohol or drugs or fails to meet production quotas or is absent or late, he or she will be fired. If that happens, a typical LCA will say something like:

"In the event that the dismissal becomes the subject of a grievance it is agreed that an arbitrator's jurisdiction will be limited to determining whether or not the Grievor breached this agreement [the LCA]. In the event that an arbitrator finds the Grievor in breach of [the LCA], the arbitrator shall have no power to alter or vary the discipline imposed by the employer."

Another common variation of this kind of clause is even more vague but means exactly the same thing:

"The parties agree that in the event of a breach of this agreement, an arbitrator's jurisdiction shall be limited only to making a finding of fact (a finding that something did or did not happen). Should a finding of fact be made, the arbitrator shall have no authority to modify or vary the discipline imposed by the employer."

What do these long and wordy clauses mean?

Suppose that after returning to work, the worker is fired again and grieves his or her dismissal and the union takes the grievance to arbitration. The arbitrator will not have the power to decide whether the employer had "just cause" for the dismissal. The arbitrator will only have the power to decide whether or not the worker breached the LCA. If the arbitrator finds that the worker breached the LCA, the firing stands.

This differs drastically from the powers that arbitrators have when dealing with dismissal grievances. Arbitration hearings into grievances about discipline and dismissal are often an uphill battle for the employer. This is because, in these kinds of grievances, the employer has the onus (or burden) of proof. In order to win the case, the employer has to clear three hurdles. The employer has to prove that:

  1. The alleged misconduct actually happened.
  2. The misconduct was culpable (blameworthy), and
  3. The punishment fit the crime.

Hurdles (2) and (3) are really important to workers who have been dismissed (or otherwise whacked with some sort of disciplinary penalty). Not all workplace "offenses" are culpable. Innocent absenteeism is probably the best example of this. If a worker is off work frequently because of illness, that's not culpable absenteeism. The worker is sick and has no control over the illness. It is very difficult to dismiss workers who are off due to innocent absenteeism for this reason. Culpability issues can also arise in other situations. Workers dismissed for poor performance may sometimes have a defense if they were denied proper training, tools or equipment, given arbitrary standards or impossible quotas to meet or otherwise put in a position where it was impossible for them to do their job to the employer's satisfaction.

A word to the wise: A lot of workplace misconduct is considered culpable. Incidents of fighting, theft, harassment, insubordination, failure to follow rules will more than likely be found to be culpable. The reason for this is that it's difficult to claim that these kinds of activities (if you've actually been engaging in them) are beyond your control. Also, absences due to the illness of someone other than the worker him or herself (i.e., family members) are considered culpable. If the employer has cleared hurdle #1 (proved the misconduct happened), clearing the second hurdle could be fairly easy. That's why the third hurdle (did the punishment fit the crime) is really important for workers.

Arbitrators have a lot of discretion to modify penalties imposed by employers even where they do find that the worker engaged in culpable misconduct. They consider a wide range of factors in determining whether the penalty fits. This is especially so in dismissal cases. Arbitrators consider the seriousness of the offense itself, the worker's past disciplinary record (the official record that shows disciplinary notices and suspension), the worker's age and length of service, the circumstances surrounding the incident, how others who have committed similar offenses have been treated and the potential for a reoccurrence of the incident or behaviour if the worker is reinstated.

Employers have a tough row to hoe in discipline cases. Most workers, unless they have done something very serious or have a lengthy history of discipline, have pretty good odds of being reinstated. This is why LCA's must be approached with caution. If an arbitrator finds that the employer went too far in dismissing the worker, reinstatement may carry some lesser penalty (a warning letter or suspension) but rarely are the kinds of conditions found in LCA's imposed by arbitrators. So unless the worker's situation is really bleak, he or she will probably come out better in an arbitration hearing than they will in an LCA.

A worker needs to carefully consider an LCA because, once he or she signs on the dotted line, their employer will not have to clear hurdles (2) and (3) if the worker is fired again. If a worker who is brought back to work under a LCA is subsequently fired, all that the arbitrator will determine is whether what the employer is alleging actually happened (did the worker resume drinking, use drugs, report for work late, fail to meet production standards and so on). If the arbitrator concludes that the answer is yes, then the dismissal stands. The arbitrator does not have "jurisdiction" to consider mitigating circumstances, blameworthiness or the appropriateness of the penalty. The union and the employer have restricted his or her ability to do that with the LCA. The chances of a dismissal being upheld under a LCA are, therefore, much greater.

Considering a last chance agreement? Before signing on the bottom line:

  1. How strong is your case? How likely is the employer to be able to prove that you did what they're accusing you of? If you're guilty, is your conduct going to be found to be culpable or non-culpable? What's the likelihood that you'll win your case if you go to arbitration? If you lose, will the penalty of dismissal be found to be excessive? You need to get good advice on your situation and you also need to be objective. If you have a long record of discipline, and have already been suspended for similar conduct or have done something very serious, your chances of getting your job back through arbitration may not be that great. Maybe a LCA is a good option for you.
  2. When working out the details of a last chance agreement make sure that the agreement is clear and precise. Keep all the terms of the last chance agreement focused on the specific problem that led to the discharge. Stay away from language that will allow the employer to fire you for anything else.
  3. The agreement should be clear and precise about the length of the LCA. It simply would be unfair for a union and an employer to hold a member to a lifetime sentence, however much money it might save in an arbitration case. The LCA should have an expiry date after some reasonable period.
  4. The LCA should spell out exactly what standards you will be expected to meet. All parties - and that includes you - must know exactly how your compliance with the agreement will be assessed.
  5. The employer should be obliged to act reasonably. Will any incident of absenteeism be grounds for immediate dismissal? What if you are genuinely sick or get hit by a bus? The LCA should stipulate the kind of absences that will get you fired. If you are required to contact a certain person in the event of an absence, the agreement should spell out who that person is and how the contact is to be made.
  6. If you are involved in drug or alcohol rehabilitation, or are recovering from a medical condition, the employer should acknowledge that you will require accommodation during this period. You need to know, however, that even though substance dependency is considered a handicap under human rights legislation, arbitrators don't have a lot of compassion for substance abusers. "Accommodation" means that your employer will be expected to grant you time off to get treatment but doesn't mean that your employer will be expected to put up with relapses. Most workers only get one shot at rehab from an arbitrator. If you need help dealing with drug or alcohol addiction - get it.
  7. If training will be required to enable you to perform your job at a certain level, the LCA should set out what training will be provided and when. All too often, these agreements are signed, things fall through cracks, managers don't live up to their commitments and workers are left to fall flat on their faces.
  8. It is vitally important that an agreement not limit your ability to grieve a subsequent discharge if you breach some other rule not associated to the LCA. Arbitrators tend to interpret last chance agreements strictly so it is very important that your union write up the LCA correctly. If you are unsure of the legality of an LCA, take a copy to your own lawyer and ask for an opinion.
  9. The LCA must be written and adopted in good faith by both the union and management to fulfill a specific goal or purpose. No last change agreement can be written so as to take away a member's legislated rights. More specifically, neither employers nor unions can contract out of human rights legislation. A last-chance agreement that requires the abandonment of a right conferred by a human rights statute or is tainted by an inequitable term may well be unenforceable.

    If you suffer from a medical condition and are periodically absent from work because of that condition, your employer can't just fire you for that, even if you've signed an LCA that says you will be fired for any future absenteeism. (Well, they can fire you but you've got a good defense for your absence and a good argument that the LCA is unenforceable: Because your human rights legislation requires your employer to accommodate you, as you are a disabled worker). Your employer doesn't have to accommodate you forever but they must show that they have exhausted all reasonable efforts to accommodate you up to the point of undue hardship. This is tough for employers to prove, especially for larger employers. "Undue hardship" has been defined by some Canadian human rights agencies as the point at which the business is in danger of going under.
  10. Understanding and interpreting last chance agreements can be complex and should best be left to outside legal professionals or to an arbitrator. While a LCA may be a good option for you, you don't want to get stuck with something that will almost guarantee you a boot out the door in the not too distant future. Nor do you want to give yourself up to unfair treatment just because doing so will save your union and your employer a day or two at arbitration. The impact of an LCA on you can be significant. How it is interpreted and applied can also make a big difference in your life. Depending on how an LCA is worded, you could be fired for very insignificant things - things that would not even get your coworkers a slap on the wrist. You should get legal advice about the LCA and how best to structure it to protect the your interests before signing off. If you are not comfortable with the advice you're getting from your union rep, get independent advice from a lawyer who is familiar with this area of the law. It's really important to understand that once you sign off on a LCA, you are legally bound by its terms. There is no going back and saying that you didn't really understand the implications.

  11. Once you sign on the dotted line, make it work. Don't play fast and loose or give the employer a reason to fire you. If you are concerned that you may have breached the agreement, talk to your union representative immediately and ask how you can best protect your interests.

What if it's management that is proposing an LCA to resolve your grievance? This sometimes happens and all the same considerations should apply. It may also mean that management has become aware that its case isn't so rock solid. If that's the case, you probably don't need a last chance. You need your job back because they took it from you without just cause.

Given the severe consequences for the worker in the event of a breach of the agreement, last chance agreements should be approached with caution and should not be entered into unless a worker has truly run out of other options.

Here's a good example of what can happen what can happen when a worker agrees to an LCA that is too broad. It didn't take long for the second firing to take place. The worker's union declined to grieve his dismissal (on the basis that they weren't likely to win because the of wording of the LCA). The duty of fair representation complaint he filed was dismissed because the LCA gave his union an excuse for not fighting for him.

The LCA that you'll find in this arbitration decision is quite long and detailed. It contains a clause, however, that takes away the worker's right to grieve if he's fired and makes a vague statement that he can "dispute the facts" if he's dismissed.

Should the Grievor fail to comply with any of the conditions set out in these Minutes of Settlement, the Grievor's employment with the Employer shall be deemed terminated immediately and the Grievor shall not have the right to grieve his discharge or otherwise challenge his termination, other than to dispute the facts upon which the termination is based;

He did grieve his subsequent termination. Read the decision and see what it got him. He got hung by his LCA even with his union on his side.

Here's a somewhat shorter last chance agreement which specifically allows for the worker to grievance any future discipline or dismissal. This LCA doesn't contain any restriction on the arbitrator.

More about LCA's.

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