This case deals with the question of when a hospital can be “estopped” from backing away from representations made regarding the seniority and service of employees in a contracting out.

The Hospital in this case had contracted out sterilization services to a third-party contractor, Steripro. A number of hospital employees decided to transfer to Steripro after the Hospital had advised the Union in a meeting that employees transferring to Steripro would maintain their Hospital service and seniority for a period of four years from the date of transfer. The Hospital then terminated its contract with Steripro before the four­year period had elapsed, and three of the transferred employees returned to the Hospital. However, the employees were not given credit for their past service and seniority as the Hospital had indicated.

The Union grieved the Hospital’s failure to recognize the returned employees’ service and seniority under Article 9.07 of the Collective Agreement and as an estoppel. The Union’s Article 9.07 grievance was dismissed in an earlier award dated September 14, 2015. This December 2016 award addressed the Union’s estoppel argument.

​The Board of Arbitration, chaired by Russell Goodfellow, allowed the grievance, holding that the Hospital was from backing away from the representations that it had made. It found that the elements of an estoppel had been made out: the parties have a collective bargaining relationship, the Hospital had made a clear representation by which it intended to be bound, and the Union and the returning employees relied on that representation to their detriment. In the result, the Hospital was ordered to credit the three returning employees with their previously accumulated seniority and service with the Hospital.

This case is yet another installment in the Steripro-related litigation that has been supported by OCHU in recent years. More broadly, it serves as an important reminder to hospitals contemplating contracting out arrangements of the special vulnerability of affected employees and the importance of clear communication on matters as critical as seniority.