The limits of residual management rights to layoff under collective agreement language

In 2026 CanLII 47391 (BC LA) | Okanagan College v Okanagan College Faculty Association | CanLII, Arbitrator Gregory issued an interim award addressing the Association’s grievance challenging the College’s 2025 decision to lay off three Arts faculty members and to change the employment conditions of 14 other faculty members.

The College attributed the workforce changes that led to the layoffs to the 2024 Federal Government budget cuts, which reduced international student enrolment in Arts and Business and created a deficit in the College’s 2025-2026 budget. The College maintained that it had residual management rights to conduct the layoffs in response to these budget cuts and decrease in enrollment. Residual management rights exist when a collective agreement is silent on an issue.

The Association argued that the College could not lay off continuing faculty for any reason other than the specific circumstances set out in Articles 33 and 34 of the collective agreement, which permitted layoffs only in cases of program redundancy, reduction, or financial exigency.

In upholding the grievance, Arbitrator Gregory considered the extrinsic evidence of the parties’ negotiating history related to Articles 33 and 34, including a letter from the College President in 2016 where the College indicated that going forward it would only follow collective agreement language when laying off faculty. 

Arbitrator Gregory concluded that program redundancy, program reduction, or financial exigency are the only permissible reasons for the layoff of continuing faculty and that there is no residual management right to layoff for other reasons. The three laid-off employees were ordered to be returned to their employment with the College. The interim decision does not include any discussion regarding the voluntary packages accepted by the fourteen other faculty members.

What do you need to know?

Institutions facing enrolment declines or financial challenges should review the workforce-reduction provisions in their collective agreement to determine whether the language specifies the conditions that trigger a layoff and whether there is a residual management right to enforce layoffs in additional circumstances.