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Labor Relations News Update January 9, 2014

Today’s Labor Updates:

Canada: Terminating employees for cause: lessons from the health care sector

France: Tactic Raises Fear for France


Canada: Terminating employees for cause: lessons from the health care sector

Fasken Martineau LLP Ian M. Campbell December 23 2013

Even when an employee is found to have engaged in serious misconduct, it seems to be increasingly difficult to justify termination for cause. Decision makers will consider many extenuating circumstances to justify ordering compensation in lieu of notice or reinstatement. This trend is aptly demonstrated in a series of recent decisions in the health care sector. Even terminations for patient/resident abuse are sometimes overturned.

Recent Examples

Physical Abuse of Patient

In the recent case of Saskatchewan Association of Health Organizations Representing the Prince Albert Parkland Health Region v Canadian Union of Public Employees, Local 4777 (PDF), a licenced practical nurse was found to have entered a paraplegic patient’s room uninvited. Despite the fact the team caring for the patient had the situation under control, the nurse grabbed the patient’s raised arm and pinned it to the bed forcefully. The nurse told the patient that he was stronger than him. He then threatened to tie the patient down and call security.

Arbitrator William Hood acknowledged that the nurse’s actions were demeaning and disrespectful. It constituted patient abuse. But the employer’s decision to terminate the nurse was nonetheless found to be excessive. A ten day suspension was ordered instead.

Non-Physical Patient Abuse

In the case of Gateway Haven Home for the Aged v CAW Local 2458 (PDF), an Ontario arbitration decision, a staff member was found to have continuously badgered and been aggressive with a frail 91-year-old, female resident. The resident suffered from diabetes and dementia. On an occasion when the resident was constipated, the employee called her lazy and made her stay on the toilet. The employee wouldn’t help the resident return to her bed.  Another staff member eventually had to intervene.

Another complaint about the same employee was lodged. A fellow staff member reported seeing the employee using loud and aggressive tones with another resident who suffered from dementia. That resident was told to “hurry up”. The employee then grabbed the resident’s purse and a book from her walker and slammed them down on a table.

The employee was then terminated.

Arbitrator Paula Knopf determined that the continuous badgering and over-anxious treatment of these residents constituted abuse. But she still decided that termination was not warranted. In support of this conclusion, the arbitrator cited the following mitigating factors: the employee’s 19 years of service, the absence of harm to the residents involved, the spontaneous nature of the events, the employee’s lack of malice, and the “mild to moderate” nature of the abuse.

Lessons for Employers

These cases are but two examples of a trend that sees employers in the health care sector sometimes being overturned when strictly enforcing zero-tolerance patient abuse policies.  Such decisions seem to dilute the effectiveness of efforts to address and prevent patient and resident abuse. Some forms of abuse are treated as less serious than others. Instead of holding employee caregivers to high standards of accountability, some of these decisions seem to downplay the seriousness of unacceptable behavior.

This is a trend that does not seem isolated to the health care sector. It is seen, to varying degrees, across both the public and private sectors in Canada. Employers need to be aware of the high threshold that must be met in order to successfully establish just cause to terminate.

Before making the decision to terminate an employee for cause, employers must investigate thoroughly. Consider whether it has been made clear to employees that the conduct in question is a termination offence. It is also important to consider all of the relevant circumstances, including potential mitigating factors such as those discussed above.


France: Tactic Raises Fear for France

PARIS — Negotiations broke down last weekend at a Goodyear tire factory scheduled for closing in northern France, so employees resorted to a brazen tactic: They kidnapped the bosses.

On Tuesday, union leaders and hundreds of employees were holding two senior executives captive, threatening to detain them until the company agreed to pay out “huge amounts of money” to nearly 1,200 workers about to lose their jobs.

The men were released later in the afternoon only after police intervened.

While this standoff was short-lived, the revival of the boss-napping tactic, a sort of guerrilla theater that was used several years ago at a number of multinational companies’ French operations, is unlikely to allay the concerns of multinationals about France as a place to do business. As a debate resurfaces over whether France is in danger of becoming the next sick man of Europe, the Goodyear factory has become one of the most potent symbols of the challenges companies face in France.

“This happened because workers were desperate,” said Jean-Paul Fitoussi, a professor of economics at the Institut d’Études Politiques de Paris. “But it is still an act that will underline the perception that it’s difficult to do business in France.”

Tension at the Goodyear plant flared last year after the chief executive of an American tire company, Titan International, touched off a furor in France by colorfully rejecting a government appeal to step in and buy the plant.

“How stupid do you think we are?” Maurice M. Taylor Jr., the head of Titan, responded in a letter to Arnaud Montebourg, the country’s industry minister.

Mr. Taylor, who had wanted to buy some of the operation, said he had had numerous confrontations with unions over the plant’s workers, whom he described as loafers of minimal productivity.

Once he withdrew, there was no other buyer, and the factory was eventually earmarked for closing, meaning the loss of all 1,173 jobs.

France’s rigid labor market and the influence that labor unions hold over the workplace has long been a source of aggravation to employers. The country’s 3,200-page labor code embodied what the government acknowledged was a “cult of regulation” that choked business. Procedures for shedding workers when economic conditions deteriorate are often lengthy and expensive, and businesses pay high taxes to help fund France’s social welfare system. For an employee earning 1,200 euros a month, for instance, employers pay an additional €1,000 in tax and pension costs.

Despite the regulations, France remains one of the Continent’s top destinations for foreign direct investment. But conscious of the stigma, the country’s Socialist president, François Hollande, took steps last year to enhance the business environment after a report commissioned by his government urged him to administer a “competitiveness shock” needed to avoid long-term industrial decline.

Mr. Hollande pushed through a series of changes to French labor laws, including making it easier for companies to fire workers or reduce their pay and work hours in an economic downturn. He also introduced €20 billion, or $27 billion, worth of tax breaks for businesses.

Still, the imminent closing of the Goodyear factory, the latest in a series of mass layoffs at large companies across France, underscored the economic consequences for workers in a country that is grappling with a high — and climbing — unemployment rate. The country is on the verge of slipping into a second recession in two years. While other big economies in Europe are showing at least glimmers of growth, France’s appears to be heading in the opposite direction.

Unions at the Goodyear plant had been demanding higher-than-usual severance packages of €80,000, or about $110,000, plus €2,500 for each year worked. “It will take years for these workers to find new jobs, and the older ones will have almost no chance,” said Professor Fitoussi.

While boss-nappings have taken place in other countries — workers at a medical device factory in China held the American owner for nearly a week last year before he met their wage demands — the tactic has become associated with France.

In 2009, French employees took executives of Caterpillar hostage temporarily when talks over revamping the company’s operation broke down. Workers trapped François-Henri Pinault, the chief executive of Kering, the group that owns Gucci and was then known as PPR, in his car that same year. Bosses at 3M and Sony were also held against their will in an attempt to get bigger severance packages.

Before they were released, the two executives — Bernard Glesser, the director of human resources at the Amiens plant, and Michel Dheilly, the director of production — were filmed by journalists and spoke with their families. They appeared mostly at ease, smiling and consulting their cellphones. But as workers milled about and occasionally shouted at them, the executives were not casually accepting their situation.

“When we are kept against our will and forced to submit to humiliations and insults, we are not being well treated,” Mr. Glesser said in a video posted on the French business news site BFM.

Goodyear said it would not negotiate with the unions while they held its executives, but it may not have a lot of leeway. While Goodyear’s French tire factory was not as profitable as operations elsewhere, French courts tend to assess a company’s plans to close based on overall group performance. For the nine months ended Sept. 30, Goodyear had net income of $372 million.

France’s high court has ruled that if a company is flagging, “if you’re making money on an international level for that particular activity, then that should be taken into consideration in order to see if downsizing is justified,” said Laurent Guardelli, a partner at Field Fisher Waterhouse in Paris who specializes in French employment law.

Boss-napping is considered a hard-line negotiating tactic, and often the police do not intervene immediately so as not to aggravate the situation, Mr. Guardelli said.

Although criminal charges could still be issued in the Goodyear case, Mr. Guardelli said that “judges are reluctant to impose severe sanctions, because they also take into account that people have been going through some hard times, and that these are more of an act of desperation rather than a voluntary violent act of abduction.”

The future of the plant is hazy. Late last year, Mr. Montebourg, then the country’s industry minister, again reached out to Mr. Taylor, the industrialist who is nicknamed “the Grizz” by Wall Street analysts for his abrasive negotiating and management style. But Mr. Taylor has so far not made a firm commitment, and Goodyear recently began issuing layoff notices.

Late Monday, Mr. Taylor said he was appalled by the latest vigilante action at the factory, in which workers rolled giant farm-tractor wheels in to block the doors to the room where the managers were being held.

“In the United States, we call this a kidnapping,” he told Europe 1 Radio. “These people would be arrested and prosecuted. This is a very serious crime, you would risk life imprisonment. But in France, your government does nothing — it’s crazy.”

Among the public, however, there is a certain sympathy with workers who see their livelihoods eroded.

“We must acknowledge that the life of these people is going to stop,” Pierre Laurent, the national secretary of the French Communist Party, told the radio station RTL. “We’re talking about families with children, people who won’t have any more revenue, and older people who will never find new work, ” he said. “They have enriched the country, they have worked for France. We can’t just throw them outside with nothing.”


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