When Last Chance Truly Means Last Chance: Arbitrator Upholds Termination Over Unauthorized Absence
Date: October 2, 2025
In United Food and Commercial Workers Union, Local 175 & 633 v Cargill Limited (Dunlop), Arbitrator John Martelli upheld the termination of an employee who breached a Last Chance Agreement (LCA) by failing to provide timely medical documentation.
The arbitrator found the employee’s single-day absence constituted both an unauthorized absence under the LCA and wilful misconduct under the Employment Standards Act, 2000 (ESA), given his deliberate choice not to obtain a readily available doctor’s note despite knowing his job depended on it.
Background
Jose Lozano, a butcher in Cargill’s Fabrication Department, found himself subject to a 24-month LCA in April 2022 following an extended unauthorized absence. Mr. Lozano had failed to return from an approved vacation to El Salvador on the originally scheduled date, remaining out of country for over three months due to an expired permanent residency card. Investigation further revealed he had deliberately booked a return flight for four days after the originally scheduled return-to-work date, which the employer characterized as material dishonesty.
Rather than termination, Cargill offered Mr. Lozano a second chance through an LCA which stipulated “zero tolerance for any violation of the attendance management program” during the subsequent 24 months. The LCA specified that “any unauthorized absences will warrant termination” and explicitly removed the arbitrator of jurisdiction to substitute a lesser penalty if breached:
… It is acknowledged by all parties that this Agreement represents a final notice to the Employee that their employment is in jeopardy and a last opportunity for the Employee to redeem himself as an Employee of the Employer.
… There will be zero tolerance for any violation of the attendance management program during the first twenty-four (24) months of active employment following the date of him to return to active employment. Any unauthorized absences will warrant termination.
… The Employee, the Employer and the Union agree that breach of any of the above conditions by the Employee shall result in immediate termination of the Employee’s employment, in the event of an arbitration respecting such termination, it is agreed that:
(a) The Arbitrator shall have no jurisdiction to substitute a different penalty if a breach of any of the above conditions have been committed;
(b) That the Employer has fulfilled its duty of reasonable accommodation under the Ontario Human Rights Code and the Union shall not argue for any further accommodation of the Employee by the Employer; and
(c) That the only issue that may be arbitrated is whether there has been non-compliance with, or a breach of, any terms of the Agreement.
Pattern of Non-Compliance
Following the LCA’s execution, Mr. Lozano had further undocumented absences. On April 10, 2023, he was absent for two days without initially providing medical documentation. Supervisor Thomas Bieniarz met with Mr. Lozano and his union steward on April 20, 2023 to issue an Attendance Coaching Notice. While Supervisor Bieniarz coded these absences as “excused,” he specifically warned Mr. Lozano that he must provide documentation for any future sick leave absences.
Two months later Mr. Lozano was again absent without providing documentation, this time after exhausting his ESA sick days. Following that unexcused absence, Mr. Lozano was issued another Attendance Coaching Notice by General Foreman Rob Furlong. Crucially, General Foreman Furlong delivered what he called “one more mulligan,” warning Mr. Lozano he “absolutely has no more chances” and must bring a medical note for any sick time. Mr. Lozano promised “it would not happen again.”
The Final Absence and Termination
Less than a month later, on July 17, 2023, Mr. Lozano failed to report for work. Upon returning the next day, he submitted an absence form stating he “was feeling sick” but provided no medical documentation. After a week passed without any supporting documentation being submitted, Cargill terminated Mr. Lozano’s employment for violating the LCA, specifically citing the agreement’s zero tolerance provision for attendance violations.
The union filed a grievance the same day. However, it was not until almost 4 months later that the union provided the employer with doctors’ notes, dated September 20 and 22 respectively, indicating that Mr. Lozano suffered from benign prostatic hypertrophy, a chronic condition which could cause sleep disruption due to frequent urination during the night. The union argued that Mr. Lozano’s inability to attend work was due to a lack of sleep caused by his medical condition. Notably, this reason differed from the one Mr. Lozano provided on his absence form, where he stated that he was “feeling sick.”
The Union’s Position
The union argued the termination was discriminatory, contending that since the absence was caused by his medical condition, the termination was linked to the protected ground of disability. The union submitted that parties cannot contract out of human rights obligations and that the employee was entitled to accommodation.
The union further claimed that the employer’s conduct—allowing previous absences without documentation—created ambiguity and “lulled” the employee into a false sense of security. The union argued this lack of clarity constituted a “strong and compelling reason” to intervene despite the LCA’s language.
The union sought Mr. Lozano’s reinstatement with back pay. Alternatively, the union argued that even if a breach occurred, the employee’s conduct did not meet the high bar for “wilful misconduct” under the ESA, therefore entitling Mr. Lozano to severance pay.
The Arbitrator’s Analysis
With respect to the discrimination argument, Arbitrator Martelli found no causal connection between Mr. Lozano’s medical condition and his failure to obtain timely medical documentation. The evidence showed that Mr. Lozano’s family physician could have provided a note within days had he sought one. The termination was for the procedural failure to provide documentation, not for the disability-related absence itself.
While Arbitrator Martelli acknowledged that Supervisor Bieniarz’s initial leniency in April 2023 may have caused some confusion, he held that General Foreman Furlong’s unequivocal warning in June 2023 cured any false sense of security. That final warning made it “crystal-clear” that the employee had “absolutely no more chances” and reinforced the strict terms of the LCA.
Moreover, Arbitrator Martelli found that the Mr. Lozano’s conduct did constitute wilful misconduct as per O. Reg. 288/01 under the ESA. Mr. Lozano’s failure to secure a medical note “was deliberate and intentional” despite knowing “it was vital that he get one,” underscoring that Mr. Lozano’s conscious disregard of the final warning constituted serious misconduct, disentitling him to statutory severance pay.
Notably, Arbitrator Martelli emphasized that credibility concerns undermined Mr. Lozano’s case. Mr. Lozano’s testimony—that he believed the 24-month LCA lasted only one year and was unaware of documentation requirements— was found to be “self-serving” and contradictory to not only evidence provided by the union, but by his own testimony about what Mr. Dennis told him after signing the LCA on April 13, 2022:
“Brian pulled me aside and told me to be very careful. Even one day, or even late, you must provide proof, or they will fire me.”
In dismissing the grievance, Arbitrator Martelli stressed that his jurisdiction was limited by the LCA to determining, on a balance of probabilities, whether a breach had occurred, not whether the employer had “just cause” for termination.
Key Takeaways
A Clear Warning Can Cure Past Leniency
While inconsistent enforcement can undermine an LCA, employers can correct course. A clear, direct, and final warning that explicitly states the LCA’s terms will be strictly enforced going forward can reset expectations and prevent employees from being “lulled” into a false sense of security.
Distinguish Between the Absence and the Reporting Obligation
A termination can be upheld for an employee’s failure to comply with attendance reporting policies (such as providing a doctor’s note), even if the underlying absence is legitimate. The misconduct is the failure to follow procedure, not the absence itself.
Deliberate Disregard Can Amount to Wilful Misconduct
An employee’s intentional choice to ignore a clear and final warning, knowing the serious consequences of doing so, can meet the high bar for wilful misconduct depending on the circumstances. Where this occurs, an employer will be protected from liability for statutory termination and severance pay.
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