Part V: Dispute Resolution: What Happens When There’s a Conflict? – Understanding Employment Disputes in Alberta

Welcome back to our comprehensive guide on understanding your employment in Canada. In this fifth part, we delve into what happens when disputes arise in the workplace. Whether it’s a disagreement over contract terms, wrongful termination, or discrimination, understanding the dispute resolution process is crucial.

1. Understanding Employment Disputes

Employment disputes can occur for various reasons, including but not limited to:

Breach of Contract: When either the employer or the employee fails to uphold the terms of the employment contract. This can include issues such as non-payment of agreed-upon wages, failure to provide promised benefits, or violation of work conditions.

Wrongful Termination: When an employee is dismissed without just cause or without proper notice. This can involve situations where the employer did not follow proper procedures, lacked a valid reason for termination, or failed to provide adequate notice or severance pay.

Discrimination and Harassment: When an employee faces unfair treatment based on race, gender, age, disability, or other protected characteristics. This can include harassment, unequal pay, denial of promotion, or other discriminatory practices.

Wage and Hour Disputes: Disagreements over unpaid wages, overtime pay, or working hours. This can involve disputes over the calculation of hours worked, failure to pay overtime, or discrepancies in pay rates.

Understanding the nature of the dispute is the first step in determining the appropriate resolution method.

2. Methods for Dispute Resolution in Employment Law

There are several methods to resolve employment disputes in Canada. The choice of method can depend on the nature of the dispute, the parties involved, and the desired outcome.

Negotiation is often the first step in resolving a dispute. It involves direct communication between the parties to reach a mutually acceptable agreement without the involvement of third parties. Effective negotiation can prevent the escalation of conflicts and preserve working relationships Alison Wood Brooks in his book[1] described Negotiation as an interpersonal skill that involves managing your own emotions and that of the other party. Ordinarily, you should be observant of the other party’s emotions and not be afraid to exert dominance.

Advantages of Negotiation:

Negotiation offers several key advantages when resolving employment disputes. First and foremost, negotiation allows both parties to have direct control over the outcome. Unlike mediation or arbitration, where a third party may influence the decision, negotiation keeps the power in the hands of the employer and the employee.

Additionally, negotiation can be a much quicker way to resolve disputes compared to more formal methods like litigation. It eliminates the lengthy processes associated with court cases, allowing for a more immediate resolution.

Cost-effectiveness is another significant advantage of negotiation. By avoiding the formal dispute resolution methods, both parties save on the legal fees and other associated costs that come with mediation, arbitration, or litigation.

Lastly, negotiation offers flexibility. The solutions can be tailored to meet the specific needs of both parties, allowing for creative and customized outcomes that might not be possible through more rigid legal processes.

Negotiation can be an effective method for resolving employment disputes, benefiting both parties with a fair, quick, and cost-effective solution.

Mediation and Arbitration

Mediation is a voluntary process where a neutral third party, the mediator, helps both parties reach a mutually acceptable resolution. It’s less formal than litigation and can be quicker and less expensive. The mediator does not make a decision but facilitates communication and negotiation between the parties. Research has shown that private parties in Canada are increasingly adopting mediation as an alternative to the traditional court system to solve private conflicts.[1]

Advantages of Mediation:

Mediation offers several key advantages that make it an attractive option for resolving employment disputes.

Confidentiality: One of the main benefits of mediation is that the sessions are private and confidential. Unlike court proceedings, which are part of the public record, what is discussed in mediation stays between the parties and the mediator. This ensures that sensitive information is kept confidential and can encourage open and honest communication. Control: In mediation, the parties retain control over the outcome and the terms of the agreement. The mediator facilitates the discussion and helps guide the parties towards a resolution, but it is the parties themselves who decide the final terms. This control allows for more satisfactory and mutually agreeable solutions.

Preservation of Relationships: Mediation can help maintain positive working relationships by fostering collaborative problem-solving. Because the process is less adversarial than litigation, it can reduce tension and conflict, making it easier for the parties to continue working together or part on better terms.

Flexibility: The mediation process is flexible and can be tailored to the specific needs of the parties involved. Unlike the rigid procedures of court cases, mediation sessions can be scheduled at convenient times, and the discussions can focus on the issues that are most important to the parties. This flexibility allows for creative solutions that may not be possible in a formal legal setting.

Mediation can provide a more amicable, efficient, and effective way to resolve employment disputes compared to traditional litigation.

Arbitration involves a neutral third party, the arbitrator, who listens to both sides and makes a binding decision. It’s more formal than mediation but still generally quicker and less costly than going to court. Arbitration can be mandatory if stipulated in the employment contract.

Arbitration is generally regulated by statutes in Canada. Every Province has its own locally enacted arbitration legislation. For instance, Section 2 of the Arbitration Act[1] of Alberta indicates that the Act will apply to an arbitration conducted under an arbitration agreement, unless an agreement between the parties excludes its application.

Advantages of Arbitration:

Arbitration offers several notable advantages for resolving employment disputes, making it a preferred choice in many cases.

Binding Decision: One of the primary benefits of arbitration is that the arbitrator’s decision is final and enforceable. Once the arbitrator has made a ruling, both parties are legally bound to comply with it, providing a clear and definitive resolution to the dispute.

Confidentiality: Arbitration proceedings are private, ensuring that the details of the dispute and the final decision remain confidential. This privacy can be crucial for protecting the reputation of both parties and for encouraging a candid discussion of the issues involved.

Expertise: Arbitrators often have specialized knowledge in employment law, which can be a significant advantage. Their expertise allows them to understand the complexities of the case better and make more informed decisions. This specialized knowledge can lead to fairer and more appropriate outcomes.

Efficiency: The arbitration process is typically faster than litigation. Court cases can drag on for months or even years, but arbitration can usually be completed in a much shorter time frame. This efficiency helps reduce the stress and financial burden associated with prolonged disputes and allows both parties to move forward more quickly.

By providing a binding, confidential, expert-led, and efficient resolution process, arbitration stands out as an effective method for resolving disputes.

Litigation

Litigation involves taking the dispute to court, where a judge (and sometimes a jury) will make a binding decision. This method is usually used for more serious disputes or when other methods fail. Litigation can be lengthy, costly, and public, but it may be necessary to enforce legal rights or when significant compensation is sought.

Advantages of Litigation:

Litigation offers several significant advantages when resolving employment disputes. One of the main benefits of litigation is that the decision is made by a judge and is enforceable by law. This provides a sense of finality and legal authority to the resolution, ensuring that the ruling is respected and adhered to by both parties.

Court decisions are part of the public record, which can set precedents for future cases. This aspect of litigation contributes to the development of employment law and provides guidance for similar disputes in the future. The public nature of court decisions also promotes transparency and accountability.

In litigation, both parties have the right to be represented by lawyers, which helps ensure that their rights are protected. Legal representation can provide expert advice, help navigate the complexities of the legal system, and advocate effectively on behalf of the parties involved. This professional support can be crucial in achieving a fair and just outcome.

Although litigation can be expensive and lengthy, it provides a robust framework for resolving disputes. Furthermore, successful litigation cases become precedents, meaning they serve as legal authority for resolving similar cases in the future.

On key advantage of litigation is the use of precedents to sway the court to your side in making a case for the client. As an award-winning employment law firm, Osuji & Smith Lawyers has successfully represented several clients in litigation matters, which have now become precedents.

For example:

In Wisser v. CEM International Management Consultants Ltd [ Wisser][1], the primary issue in this case was whether the severance pay given to James Wisser upon his termination was adequate. Mr. Wisser argued that his severance should be based on his entire 7½ years of service, including his time as an independent contractor. CEM contended that he was only entitled to severance based on his final 3½ years of employment.

The Court of Queen’s Bench of Alberta, under the judgment of Honourable Madam Justice M.H. Hollins, rendered the following decision:

Pay and Damages: The court determined that James Wisser should have received ten months’ notice of termination rather than the four weeks he was given.

Damages Calculation: Damages were calculated based on ten months’ salary and benefits, amounting to $114,400. After deducting the $10,579.59 severance already paid to him and the $9,279.99 he earned from subsequent employment during the notice period, the net damages awarded to Mr. Wisser totaled $92,620.01.

In Oostlander v. Cervus Equipment Corporation [Oostlander][1],Steven Oostlander was wrongfully dismissed by Cervus Equipment Corporation after 36 years of employment. Cervus initially gave him 16 months’ notice of termination, but as the termination date approached, they extended his employment without further discussion. Eventually, Oostlander was given one month’s notice in June 2020. He rejected a subsequent offer to work in Brooks, 50 km away, citing the impracticality of the commute and his wife’s employment in Bassano.

The trial judge found that Oostlander’s refusal to accept the job offer in Brooks was reasonable due to the long daily commute and his wife’s employment in Bassano. Cervus argued that Oostlander did not properly mitigate his damages because he did not apply for a job at a local tire store. However, it was determined that Oostlander was not qualified for that position. The trial judge concluded that Oostlander had reasonably attempted to support himself post-termination through casual employment.

Deduction of CERB Benefits: At trial, the Canadian Emergency Response Benefit (CERB) payments received by Oostlander during the COVID-19 pandemic were deducted from his damages award. Oostlander cross-appealed, arguing that CERB benefits should not be deducted from his damages.

Court of Appeal Decision: The Court of Appeal found no error in the trial judge’s assessment of Oostlander’s mitigation efforts. However, the Court identified mathematical errors in the damages calculation. The court determined that the damages should be calculated for 24 months, not 25 months as initially awarded. Additionally, the vacation pay should be based on Oostlander’s 2019 salary instead of his 2018 salary. These errors were corrected, resulting in an award of damages for 23 months plus one month of working notice.

CERB Benefits Decision: The Court of Appeal agreed with Oostlander’s cross-appeal, following the precedent set in Yates v. Langley Motor Sport Centre Ltd. According to this precedent, CERB benefits should not be deducted from wrongful dismissal damages. This decision aligns with broader policy considerations, ensuring that employers do not benefit from income support programs designed to assist employees.

Final Judgment: The appeal was allowed to the extent of adjusting the damages award to correct the identified errors. The cross-appeal was also allowed, meaning CERB benefits were excluded from the deductions. As the largely successful party, Oostlander was awarded costs.

These cases, among others, highlight the legal authority of litigation and the role of precedent in shaping future decisions. The precedents set in cases like Wisser and Oostlander will be used in future matters, demonstrating the significant impact of litigation in employment law.

3. Legal Remedies and Compensations for Breaches

When an employment dispute results in a finding of wrongdoing, various legal remedies and compensations may be awarded:

Reinstatement: The employee may be reinstated to their former position, especially in cases of wrongful termination. Pay in lieu of reinstatement is an option utilised when the relationship has broken down irreparably.
Compensatory Damages: These include lost wages, benefits, and other financial losses suffered due to the breach. This can also cover future losses if the employee is unable to find similar employment.
Punitive Damages: In cases of severe misconduct, additional damages may be awarded to punish the employer and deter future wrongdoing.
Injunctions: Court orders that require a party to do or refrain from doing specific acts, such as stopping discriminatory practices.
Declaratory Relief: A legal determination of the parties’ rights and obligations without awarding damages, providing clarity on legal positions.

These legal remedies and compensations are designed to address the harm caused by the breach, restore the employee’s position as closely as possible to what it would have been without the breach, and to ensure that justice is served.

Employment disputes in Alberta can be challenging, but knowing your options for resolution can make the process more manageable. Whether through negotiation, mediation, arbitration, or litigation, there are mechanisms in place to address and resolve conflicts. Always consider seeking legal advice to understand the best course of action for your specific situation.

Stay tuned for the final part of our guide and do not hesitate to Contact Us if you need professional employment law legal assistance in Calgary, Alberta, Canada!

References:

[1] Alison Brooks, “Emotion and the Art of Negotiation”, (December 2015), online: Harvard Business Review <https://hbr.org/2015/12/emotion-and-the-art-of-negotiation>.

[2] Reinhard Ellger, “Mediation in Canada: One Goal—Different Approaches to Mediation in a State with Federal and Provincial Jurisdictions” (2012) academicoupcom, online: <https://academic.oup.com/book/34838/chapter-abstract/297787850?redirectedFrom=fulltext&login=true#no-access-message>.

[3] RSA 2000, c A-43

[4] 2022 ABQB 414

[5] 2023 ABCA 13

Author: Christie Eze