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There are many factors to account for when considering this alternative to the over-burdened justice system

By Jack Zwicker


It is probably just as well that many formal employment contracts contain arbitration clauses. Given the shortage of superior court judges and lack of funding in Canada’s largest cities, the timelines for civil litigation can easily run five years before actions reach trial. In the meantime, legal costs mount for both sides, together with the uncertainty of not having a decision.

For employers and employees who need a quicker resolution of their disputes, private arbitration provides an alternative option. However, it is not sufficient for employers and employees merely to state that they will arbitrate any disputes. They need to go further and specifically provide a number of arbitration procedures if they want to avoid conflict after starting the process. Not doing so can result in one side or the other launching motions to a justice of the Superior Court for direction. Where the parties leave procedural gaps, it is a motions court judge who has the task of filling in those gaps.

For example, if the arbitration provision in the employment contract does not specify the number of arbitrators, under provincial arbitration law, a single arbitrator will preside. Should the parties be more comfortable with multiple arbitrators, as unusual as this might be in these circumstances, they need to provide for this. In selecting an arbitrator, the parties will want to ensure that the person they name is familiar with employment law. As is the case with judges, arbitrators have different practice backgrounds. Familiarity with customary employment industry practices and wrongful dismissal law are important.

Beyond these provisions, employers and employees will need to address a host of other issues, usually at a preliminary meeting of counsel and the arbitrator. It is at this meeting that procedures from beginning to end are scheduled. For example, if the parties seek a summary arbitral process, they will have to address the extent to which each party is required to produce relevant documents. Whereas the Rules of Civil Procedure of the governing jurisdiction permit broad based document production, one of the fundamental goals of arbitration is creation of a custom-tailored process that stresses quality over quantity. Not every document exchanged between parties is absolutely vital to the outcome. Parties are best advised to agree to a document production protocol that allows both sides to tell the written portion of their story without tossing unnecessary documents into the hopper.

Unlike the court requirement for delivery of detailed affidavits of documents that act as a chronological check-list of the parties’ documents, provincial arbitration laws contain no such requirement. The choice to deliver this particular affidavit lies with the parties. If the parties are time and cost conscious, they will want to agree to avoid delivering affidavits knowing that their lawyers will need to create books of documents that are tabbed and chronologically numbered in any event.

Another procedural issue that the parties will need to confront is whether or not to conduct formal examinations for discovery before a certified court reporter. If the circumstances are such that the written paper trail is full of gaps and a significant part of the evidence will be based on oral testimony, examinations will be necessary. However, assuming that both parties have documented their positions, formal examinations may not be required. It is vital that the employment contract address this issue as well.

Perhaps the single most important procedural issue which entails the greatest cost is the hearing process. If the parties want to follow standard courtroom trial procedure, the Plaintiff and any of their witnesses would testify first and be cross-examined, leaving the Defendant and their witnesses to follow similarly. However, the parties do not have to proceed this way. They could agree to each deliver an affidavit that sets out every critical piece of evidence supported by any relevant documents, followed by cross-examination. The point is that the parties get to choose the specific procedures that suit their needs without being forced to participate in an exercise of overkill. By agreeing to a streamlined set of procedures, the arbitration moves more quickly, more efficiently and less expensively.

Although it would be unusual, parties could agree to a “no hearing” arbitration. Under provincial arbitration law, hearings are the exception, not the rule. A “no hearing” wrongful dismissal arbitration might make sense if the parties’ documents categorically answer the question of wrongful dismissal versus resignation, and also provides all of the required evidence regarding quantum of damages. Where the parties want to keep the timeline for a decision to the absolute minimum, they can also provide that there are to be no appeals. They might also agree upon an oral arbitrator’s award instead of a formal, written award. Generally, most parties prefer a written award.

From time to time, arbitrations that should be completed within a year or less run past that and cost the parties more in legal fees, arbitrators fees and disbursements. Where this happens, it is often because the parties have chosen not to agree to a complete procedural protocol, leaving it to a motions court judge to fill in contested gaps. The time and cost of these motions serves to delay the hearing which defeats the most important purposes of arbitration; namely brevity and cost effectiveness. The parties and their lawyers are well advised to commit to procedural protocols at the very outset that move them to early completion and to closure.


Jack Zwicker is a lawyer and arbitrator with Zwicker Dispute Resolutions.



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