Demotions: not an appropriate disciplinary sanction for an employee’s misconduct

In a recent arbitral decision,[1] it was decided that when the time came to impose a disciplinary measure on an employee, the employee’s demotion to lesser duties was not an appropriate sanction. This is mainly because demotions have a permanent nature and cannot be modulated to fit the degree of fault of the employee.

First, let’s go back to the facts of this case opposing the City of Montreal and the Firefighters Association of Montreal. In 2007, the firefighters and the City were in negotiations to renew the collective agreement which had expired at the end of 2006. When negotiations come to a halt, the firefighters showed their discontent, including one incident in which the two plaintiffs, a captain and a lieutenant, took their team to the Lasalle Borough City Hall to walk around the building with masks on their faces. The employer accused the plaintiffs of having engaged in conduct prejudicial to good order and discipline, to have been negligent in performing their functions and to have used a vehicle without permission, in contravention with the provisions of the regulation manuals, the disciplinary code as well as the directives from the City of Montreal and the Firefighting Service. The captain and the lieutenant were suspended for a period of 30 and 15 days respectively. They were also demoted and transferred to simple firefighter positions in two different stations. Following these sanctions, the two employees filed grievances challenging their suspension and demotion.

In his decision, the arbitrator upheld the suspension ruling because, in his view, the two employees had acted negligently or intentionally. The fault of the captain, in particular, was serious because he violated his duties as an officer, which include precisely a duty to prevent such events.

However, the demotions were deemed unfair and cancelled by the arbitrator. The evidence submitted by the employer, mostly in the form of notices to the employees, reported a series of disciplinary faults, but no mention was made of the inability of the firefighters to assume a position of command. The arbitrator explains the difference between a disciplinary measure and an administrative measure:

A disciplinary measure is intended to punish misconduct by an employee, while an administrative measure is intended to remedy the inability to occupy a position. When fault and inability coexist, the employer can use the two measures simultaneously.

In this case, we must decide whether the demotion of the plaintiffs, subsequent to the fault which has earned them a suspension, is to remedy  their inability to hold a position of command. In other words, we must determine if their fault is a demonstration of their inability to hold a position of command.

With respect, the proof submitted does not support this conclusion.

For us to conclude otherwise, the City had to demonstrate that when it took its decision, it believed that the claimants did not have the capacity to assume their position of command because of the faults they had committed.

[our translation of paragraphs 138 to 141]

In disciplinary matters, a demotion does not constitute an appropriate sanction. A disciplinary sanction aims to bring the employee to realize the nature and scope of his fault. The idea is to give a chance to the employee to change his behavior, hence the importance that the sanction be proportionate to his fault.  Because a demotion has a permanent nature, it cannot be subject to modulation. Therefore, it can only be used by the employer if the incompetence of the employee has been found. In this case, it is clear that the intention of the employer was to impose a two-fold disciplinary sanction, consisting of a suspension and a demotion, which is not acceptable.

According to the arbitrator, discharges are the only exception to this rule when the employer is authorized to impose a radical and permanent sanction because of the serious nature of the misconduct. In this case, the fault must be important enough that it has broken the bond of trust between the employer and the employee. In all other cases, disciplinary sanctions must be proportional to the misconduct of the employee.

This decision follows the principle according to which a demotion is generally recognized as a non disciplinary measure. Accordingly, because it can’t be evaluated according to the degree of fault, that it has an undetermined term and that it infringes the principle of seniority, demotions are usually not considered a disciplinary measure, unless expressly provided for in the collective agreement. In practice, if an arbitrator does recognize a demotion as a disciplinary or mixed sanction, he will be able to diminish its permanent effect by imposing conditions, such as a term.[2]

In collaboration with Ana Gray Richardson-Bachand, student at Ogilvy Renault LLP.

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[1] Montréal (Ville de) and Association des pompiers de Montréal (July 7, 2010), D.T.E. 2010T-696, AZ-50665770 (T.A.), Mtre. François Hamelin, arbitrator.

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[2] See: Bernier L. and al., Les mesures disciplinaires et non disciplinaires dans les rapports collectifs de travail, 2^nd edition, Cowansville, Yvon Blais, 2009, at paras. 2.207 to 2.209.