$500,000 Arbitration Award to be Reviewed

In our Summer 2010 newsletter, we reported on an award of Arbitrator Owen Shime, in which he ordered the Greater Toronto Airports Authority (GTAA) to pay over $500,000 in damages for bad faith conduct in the termination of a PSAC employee for suspected abuse of sick leave. This unprecedented award included: damages for past and future loss of income until the date the employee would likely have retired, mental distress, pain and suffering damages, and punitive damages.

The GTAA applied for judicial review of this decision and, earlier this year, the Divisional Court released its decision. The Court found that the arbitrator’s award was reasonable, with two exceptions. The Court accordingly allowed the application in part and referred the award back to Arbitrator Shime to review the two questionable elements of his decision:

1. the Court found that the employee’s claim of pain and suffering was not supported by the evidence, and that this claim had been improperly combined with the mental distress damages. The Court therefore required the arbitrator to break down the global $50,000 he had attributed to mental distress, pain and suffering; and

2. the Court also ordered the arbitrator to reconsider the punitive damage award, finding that the arbitrator had failed to identify a requisite independent actionable wrong on which to base the award.

While the GTAA had requested that the matter be reconsidered by a different arbitrator, the Court found that, given the already protracted process, it would be impractical for another arbitrator to re-hear the case in its entirety.

Bird Richard will continue to keep readers apprised of the status of this case.