Previously printed in the LexisNexis Labour Notes Newsletter.
In a preliminary decision, a B.C. arbitrator confirmed his authority to award damages for an employer's breach of the provisions of B.C.'s Personal Information Protection Act ("PIPA") relating to the collection and use of employee personal information.
In March 2016, Zellstoff Celgar Limited Partnership ("Zellstoff") installed a swipe-card system known as the Site Accountability System ("SAS") at its mill site. The SAS recorded when individual employees entered and left the site. At the time it was installed, Zellstoff informed employees that the purpose of the SAS was safety-related and, more particularly, to collect and provide information as to who was present at the mill site in the event of an emergency requiring evacuation. Zellstoff, however, later acknowledged that it intended to eventually use the SAS for time-management purposes, including recording employee's hours for attendance, payroll and attendance management.
Following the installation of the SAS, Zellstoff discharged three employees, Mike Negreiff, Mark Frauley and Richard Brewer, from employment for time theft based in part on information from the SAS.
Negrieff's discharge grievance proceeded to arbitration first. In Zellstoff Celgar Ltd. v. Public and Private Workers of Canada, Local 1,  B.C.C.A.A.A. No. 28 (Blasina), Arbitrator Blasina held that the information from the SAS was inadmissible evidence because Zellstoff had failed to advise employees that their times of entering or exiting the mill site would be collected and could or would be used in support of discipline or discharge (the "Blasina Award").
In a subsequent arbitration involving the other two discharged employees, Arbitrator Sims declined to admit the SAS information into evidence on the basis that the issue had already been decided in the Blasina Award.
Zellstoff later provided the union with notice of the collection and possible uses of information from the SAS.
On February 23, 2017, the union filed a policy grievance seeking damages for Zellstoff's breach of PIPA when it failed to notify employees that the information it collected through its swipe-card system could be used to support discipline or discharge.
While Zellstoff accepted that an arbitrator has jurisdiction to hear a grievance which involves a breach of PIPA, it objected to arbitral jurisdiction to award damages based on a mere finding of a breach of the legislation.
Zellstoff relied on section 57 of PIPA to argue that an arbitrator could only award damages for actual harm if the Commissioner had already made a finding of breach of privacy. Section 57(1) of the legislation states: "If the commissioner has made an order under this Act against an organization and the order has become final as a result of there being no further right of appeal, an individual affected by the order has a cause of action against the organization for damages for actual harm that the individual has suffered as a result of the breach by the organization of obligations under this Act."
Zellstoff further argued that because of section 3(5) of PIPA - the section which states, "If a provision of this Act is inconsistent or in conflict with a provision of another enactment, the provision of this Act prevails unless another Act expressly provides that the other enactment, or a provision of it, applies despite this Act" - section 89(g) of the B.C. Labour Relations Code could not be read as providing an arbitrator the authority to make an order for damages for a PIPA violation as this would be inconsistent with section 57(1). According to Zellstoff, section 3(5) of PIPA provided the Commissioner with exclusive jurisdiction to make an order for which damages may be awarded.
Arbitrator Pekeles dismissed Zellstoff's arguments, finding that he had the jurisdiction under section 89 of the Code to enforce substantive rights and obligations under PIPA and this included the authority to award damages. He reasoned:
Following the reasoning of the [Supreme Court of Canada] in Parry Sound, I have the power and responsibility to enforce the substantive rights and obligations set out in sections 13(3) and 16(3) of PIPA as if they were part of the parties' collective agreement .
... [M]y authority to award damages for breach of PIPA arises from my authority under the Code, because it is as if there has been a breach of the collective agreement under the reasoning of the Courts in Parry Sound and Viterra.
For the same reasons, Arbitrator Pekeles rejected Zellstoff's argument that an inquiry and order by the Commissioner was required before damages could be awarded. He held that his jurisdiction as an arbitrator was not removed by sections 3(5) and 57 of PIPA.
In the result, Arbitrator Pekeles dismissed Zellstoff's preliminary objection and ordered that a hearing proceed with evidence as to the nature and seriousness of the harm caused by Zellstoff's breach of PIPA.
This case serves as a good reminder to employers to make sure they collect and use swipe-card data or, for that matter, any data about an identifiable individual used for the purpose of managing or terminating the employment relationship in compliance with the privacy protections set out in PIPA. The legislation requires that employers provide prior notification to employees if they intend to collect and use personal information, including employee personal information, for purposes of discipline.
This case also highlights the very serious consequences which can flow from an employer's failure to comply with its substantive obligations under PIPA. These include the exclusion of relevant evidence at arbitration and an award for damages where there is evidence of actual harm as a result of the employer's breach.
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