A recent Ontario arbitration case shows how far a Last Chance Agreement (LCA) can go — and how binding it really is once signed.
What Happened
In United Food and Commercial Workers Union, Local 175 & 633 v. Cargill Limited (October 2025), a long-term employee with a history of attendance issues had already received multiple warnings and suspensions. In 2021, the company and union entered into a Last Chance Agreement (LCA) — a final, written understanding that the employee’s job would be terminated if any further attendance violations occurred.
Despite this, the employee missed several shifts in 2023 without proper notice or documentation. The employer, citing breach of the LCA, terminated his employment. The union filed a grievance, arguing the company acted too harshly and failed to consider mitigating factors.
What Is a Last Chance Agreement?
An LCA is a formal written deal between an employer and an employee (and often the union), that allows an employee to return to work instead of being fired, but only if they follow specific conditions. Any violation typically results in automatic termination, and arbitrators rarely intervene unless the agreement is unclear or the employer acts unfairly.
In this case, the LCA stated that for 24 months of active employment, the employee must not have any unauthorized absences and must follow the company’s attendance rules. Even a single unexcused day off or failing to provide medical documentation could result in termination.
What Happened Next
- During 2023, the employee had absences and issues with sick-day documentation.
- On July 17, 2023, the employee was absent and did not provide supporting medical documentation at the time.
- That absence was considered “unexcused” under the attendance rules, and because of the zero-tolerance clause in the LCA, the employer terminated his employment on that basis.
- The Union grieved the termination. They argued, among other points, that:
- The LCA was unclear.
- There was a medical condition (benign prostatic hypertrophy), i.e. a possible disability/health basis for the absences.
- There had been inconsistent enforcement, namely previous absences without documentation had been allowed, that may have lulled the employee into thinking that documentation for single-day absences wasn’t strictly required.
- The LCA was unclear.
The employer’s counter: the language of the LCA was very clear. It had been explained. The employee was aware that even a single day without proof could lead to termination. The employer argued that the absence without documentation was a valid breach of the LCA and that their hands were tied by the strict terms.
The Decision
- The arbitrator found the LCA had been breached. The absence without timely documentation on July 17, 2023, violated the LCA’s attendance-documentation requirement.
- He held that the LCA’s terms were clear, that the employee had been warned, and that he understood the obligations.
- He also found that there were no “strong & compelling reasons” to override the LCA’s penalty provisions (i.e., no basis to substitute a lesser penalty under the agreement).
- He ruled that the conduct amounted to wilful misconduct under Ontario’s Employment Standards Act and related jurisprudence.
- The grievance was dismissed and the termination was upheld.
Key Lessons for Employers
Here’s what employers should take away from this case if they’re running a business with employees and attendance and documentation policies:
| Lesson | Why It Matters |
| Last Chance Agreements (LCAs) Work — If You Draft Them Clearly | This case shows that a well-documented LCA with clear language (e.g., “zero tolerance … any unauthorized absences will warrant termination”) can be enforceable, even against a long-term employee. |
| Make Sure Employees Understand What They Sign | It helps that the employee signed the LCA, that management and union representatives explained it, and that the duration (24 months) was referred to more than once. If it’s ambiguous, arbitrators may side with employees. |
| Strict Enforcement & Warnings Matter | The employer warned the employee several times. There was direct communication that no more chances would be given. This strengthened their ability to enforce termination under the LCA. |
| Documentation Rules Should Be Reasonable & Clear | Requiring medical notes/documentation for absences is common, but employers must ensure their policy is communicated, documented, and consistently enforced. Ambiguity or inconsistency opens risk for the employer. |
| Beware “Disability/Health Condition” Arguments | The Union tried to argue the medical condition (benign prostatic hypertrophy) was a disability and warranted additional leeway. But the arbitrator found no evidence that the condition prevented the employee from obtaining timely documentation, so the claim wasn’t accepted as an excuse. Employers should balance compassion with their policies, but ensure that they document all assessments and requests. |
| Don’t Rely on “We’ll Be Lenient Sometimes” Mixed Messages | The Union argued that earlier leniency (or inconsistent follow-up) could have lulled the employee into misunderstanding that it was their final chance. Employers must ensure that any informal tolerance doesn’t contradict strict policy enforcement. |
| Use LCAs Judiciously | LCAs are a powerful tool, but only when used with care: they must be clearly drafted, fairly explained, consistently enforced, and have proper documentation of warnings, meetings, and signatures. Otherwise, the employer risks arbitration challenges. |
Final Word
This case reminds employers that Last Chance Agreements can be a powerful tool — but only when drafted carefully and applied consistently. They provide a structured, fair way to balance compassion with accountability.
