Toronto Transit Commission v. Amalgamated Transit Union, Local 113 2012 ONSC 3175
Damages - Mitigation - General principles - Duty to mitigate
A Toronto Transit Commission (TTC) station collector, provided Metropasses to nine customers (valued at $108 each) and, in error, credited their bank accounts instead of debiting them when they paid with debit cards. The result of these transactions was a loss to the TTC in the amount of approximately $1,744. The station collector was suspended for four days without pay and agreed to repay the loss through payroll deductions of $100. The TTC took the position that the station collector should repay this money as it constituted a “shortage” within Article V, Section 11 of the collective agreement. The union referred the matter to arbitration, alleging that the discipline was unjust and that the payment by the station collector was inappropriate. The arbitrator found that the station collector had been negligent and reckless, and that the four day suspension was warranted. The arbitrator also agreed that the loss was subject to a provision in the collective agreement that required employees to “repay to the Commission any shortages” in their funds, and agreed that the loss in issue was a “shortage” within the meaning of Article V, Section 11. However, he held that the TTC could not recover any of the loss from the station collector on the basis that the TTC had failed to mitigate the loss suffered. The TTC applied for judicial review on the ground that the arbitrator erred in applying mitigation principles to bar the TTC from recovering the shortage of funds.
The Ontario Divisional Court allowed the application and quashed the award insofar as the arbitrator ordered the TTC to repay the monies paid by the station collector on account of the shortage.