Punitive Damages and Arbitration
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Provincial labour legislation sets out the powers of arbitrators and arbitration panels. For example, they have the ability to subpoena witnesses, call evidence, and order a remedy in a number of areas. An arbitrator can order that the party in breach of the collective agreement pay compensation to the aggrieved party in order to make them "whole." For example, suppose that an employee has been unjustly terminated and has been off work for two months. The arbitrator can order that the employer pay the employee for the two months of back wages and benefits.
However, in BC, arbitrators do not have the ability to award punitive damages (over and above the amount of compensation needed to put the aggrieved person in the position as if the collective agreement had not been breached). In a 500-word paragraph, consider both the pros and cons of an arbitrator having the ability to award extra damages (i.e., damages to "teach the employer a lesson"). Do you think that an arbitrator should be able to award these types of damages?
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Awarding Punitive Damages in Arbitration is discussed in the solution.
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Awarding Punitive Damages in Arbitration
Before considering why the extension of over-reaching abilities of arbitrators should be warranted, we would have to look at the role that arbitrators and mediators have. These types of ADR (Alternate Dispute Resolutions) are often less expensive than a trial and offer an "intermediary" position to assist in the facilitation of a conflict between organizations and employees and reach a mutually beneficial solution.
Additionally, arbitrators are not considered judges, which limit their ability to impose fines or award punitive damages. As mentioned above, an arbitrator is supposed to be a facilitator between two parties to reach to a mutually agreeable and beneficial solution, while a judge can impose punitive damages (with certain caps) depending upon the party at breach.
A potential negative consequence of awarding these type ...
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