An Ontario arbitrator has upheld the dismissal of an employee who breached a Last Chance Agreement (“LCA”) by failing to provide timely medical documentation for an unauthorized absence. The decision shows that an employee’s deliberate non-compliance with a clear, final warning can amount to “wilful misconduct” disqualifying them from termination and severance pay under the Employment Standards Act, 2000 [ESA].

Background

In United Food and Commercial Workers Union, Local 175 & 633 v Cargill Limited (Dunlop) [Cargill], a butcher challenged his dismissal from a beef processing facility in Guelph, Ontario. The employee was terminated for breaching a Last Chance Agreement (“LCA”).

The LCA followed repeated concerns about the employee’s attendance and honesty. In 2021, he took an approved vacation to El Salvador and was due back on December 30 but did not return until April 2022, citing expired residency documentation. The employer determined that he had planned a later return and acted dishonestly. Rather than terminate his employment, the employer issued a “final notice” LCA to the employee.

The LCA required strict compliance with workplace rules and attendance expectations, stating that any further unauthorized absence within 24 months would result in immediate termination, and that an arbitrator would have no jurisdiction to alter the penalty.

Over the following year, the employee had several questionable absences. In April and June 2023, he missed work without initially providing medical documentation; however, he only received warnings. His supervisor explicitly warned him that he had “no more chances” and must provide a doctor’s note for any further absences.

Despite this warning, in July 2023, the employee missed work again, citing illness but failing to provide a timely medical note. As a result, the employer terminated his employment under the LCA’s zero-tolerance clause. Months later, in September 2023, he produced a retroactive doctor’s note referencing a chronic medical condition; however, by then, the termination had already been implemented.

Decision

The arbitrator upheld the termination, finding that the LCA had been breached and that he lacked jurisdiction to modify the penalty. The arbitrator rejected the union’s various arguments, as follows:

1. Discrimination

The union argued the LCA was applied in a discriminatory manner given the employee’s chronic medical condition. The arbitrator disagreed, finding no evidence that the condition had prevented him from promptly obtaining a medical note. The arbitrator found that the termination stemmed from non-compliance with the employer’s policies, not disability.

2. Lack of Clarity

The union claimed the LCA was ambiguous and that earlier leniency had “lulled” the employee into a “false sense of security”. The arbitrator found the LCA “crystal clear” and noted the employee’s admission that he had not read it carefully. The arbitrator further found that any confusion was “cured” by the supervisor’s explicit warning, and that from that point, the LCA’s strict terms applied.

3. Wilful Misconduct

The union argued, in the alternative, that even if a breach of the LCA had occurred, the employee’s conduct did not meet the ESA’s high threshold for “wilful misconduct”. If accepted, this argument would have entitled the employee to statutory termination and severance pay.

The arbitrator squarely rejected this claim. He found that the employee’s repeated failure to provide a medical note—despite explicit and repeated warnings—was a deliberate act of non-compliance constituting wilful misconduct under the ESA.

Finding no ambiguity or exceptional circumstances, the arbitrator dismissed the grievance and upheld the dismissal, disqualifying the employee from both statutory termination and severance pay.

Takeaways for Employers

Disregard of Clear, Final Warning Can Constitute Wilful Misconduct: The Cargill decision shows that when an employee knowingly disregards a clear and final warning, their conduct can meet the high threshold for “wilful misconduct” under the ESA, thus disentitling them from statutory termination and severance pay. While not necessarily binding in the non-union context, this decision may be persuasive to courts and should give employers some measure of confidence that a dismissal for cause can be justified where an employee deliberately ignores explicit and final directions.

Distinguish Disability from Misconduct: The decision also confirms that while employers have a duty to accommodate disabilities, discipline may still be justified where an employee fails to meet clear procedural requirements—such as providing timely medical documentation—so long as that failure is not caused by the disability itself. In such cases, the discipline is based on the employee’s non-compliance with procedure, not on the disability itself.

Consistency and Caution in Enforcement: While flexibility and compassion are important, inconsistency can undermine the enforceability of an LCA or performance improvement plan. While the employer in Cargill narrowly avoided that risk by issuing a final explicit warning before termination, employers should avoid “mulligans” under LCAs unless the employee is clearly warned that future breaches will trigger enforcement.

This blog is provided as an information service and summary of workplace legal issues.

This information is not intended as legal advice.