HomeMy WebLinkAboutP-2013-1036.Kaine.14-07-11 DecisionPublic Service
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P-2013-1036
IN THE MATTER OF AN ARBITRATION
Under
THE PUBLIC SERVICE ACT
Before
THE PUBLIC SERVICE GRIEVANCE BOARD
BETWEEN
Candace Kaine Complainant
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The Crown in Right of Ontario
(Ministry of Children and Youth Services) Employer
BEFORE Kathleen O’Neil Interim Chair
FOR THE
COMPLAINANT
Candace Kaine
FOR THE EMPLOYER Peter Dailleboust
Ministry of Government Services
Legal Services Branch
Counsel
SUBMISSIONS April 17, 2014
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Decision
[1] This decision deals with preliminary objections made by the employer, asking for the
dismissal of the grievance of Candace Kaine, a Probation Manager employed in the
Ministry of Children and Youth Services. The primary basis for the objection is that the
complaint relates to pay for performance, a matter outside the Board’s jurisdiction. The
complainant asks that the matter be allowed to proceed as a breach of terms and conditions
of employment in respect of Managers’ wages, and unfairly applying a method of
compensation administration that differs from other employees in the public service.
[2] Further to the employer’s request and Ms. Kaine's agreement, the Board directed that the
matter be heard by way of written submissions. The Board received detailed submissions
in response to that direction.
Does this Decision Apply to a Group?
[3] About the same time Ms. Kaine filed her complaint with the employer, several other
managers in her area filed similar or identical complaints as well. The Deputy Minister’s
designee met with a group of them on June 5, 2013 to address the grievances, and a
common response to the complaint was issued to Ms. Kaine and six other managers. Ms.
Kaine was not satisfied with that response, and advanced her complaint to this Board. She
signed it individually, but noted in it that all managers were affected by the Pay for
Performance compensation package. She did not refer to it as a group grievance or assert
that she represented anyone but herself.
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[4] In reply to the employer’s written motion, Ms. Kaine made submissions entitled “P-2013-
1036 Kaine (and eight others) vs. MCYS” and made a number of references to a group of
managers. She identified the others in the group by name and as Probation Managers and
Assistant Probation Managers in the Ministry of Children and Youth Services, Eastern
Region. The Board had received individual complaints from six of those, which were
similar or identical to Ms. Kaine’s. Each of those had been advised that their complaints
would be put in abeyance pending the outcome of her complaint.
[5] When employer counsel received Ms. Kaine’s written submissions, he objected that Ms.
Kaine was attempting to expand her individual complaint into a group complaint, which in
the employer’s view was not a proper expansion at that point in the process. It continues to
be the employer’s position that the complaint before me only pertains to Ms. Kaine and her
individual complaint.
[6] In support of the employer’s position that the matter before me is an individual complaint
filed by Ms. Kaine, counsel notes that Ms. Kaine’s original complaint does not include any
additional names or signatures of other applicants, and that the employer did not have a list
of complainants that Ms. Kaine claimed to represent. As to the fact that the Ministry’s
response to her complaint was addressed to Ms. Kaine and six other managers, counsel
states that this was an exercise in efficiency by the employer as the response related to
similar complaints. At the same time, counsel stresses that this was not an agreement by
the employer to consolidate all the similar complaints forwarded to the Board. The
employer submits that the matter should not be considered a group complaint at this stage,
given the lack of evidence that the other managers had consented to this hearing or the
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form of this hearing, and that the preliminary objections it had made were specific to Ms.
Kaine’s case. Therefore, the Employer has not had an opportunity to put forth any
preliminary objections that may be applicable to any additional complainants.
[7] In any event, counsel submitted that the employer was satisfied to reserve its right to raise
any additional preliminary motions should the Board take jurisdiction over Ms. Kaine’s
individual compliant or in the event it decided that the matter was indeed a group
complaint. Those additional motions were said to include issues as to improper notice,
timeliness and mootness.
[8] When it became clear to the Board that there was a dispute as to whether there was a group
complaint, and if so who was in the group, the Board contacted the other named managers,
forwarding the employer’s submissions and advising that it did not have any record of
complaints from two of the individuals named as members of the group. Ms. Kaine
responded clarifying her view of her role, in light of the identically worded complaints. She
stated that she never claimed to represent anyone other than herself, but was willing to be
the “face” of the group who had submitted the same complaint, and had been treated as a
group by the employer in the complaint stage.
[9] Most of the named members of the group responded, affirming that they had been kept
informed of the process of the matter, consenting to Ms. Kaine’s acting as their
representative and saying they wanted to be part of the common or group grievance.
Another wrote indicating that he had faxed a Form 1 advancing his complaint to the Board
around the time the others did, to which the Registrar responded, letting him know that the
Board had not received it. He indicated he would attempt to obtain a fax confirmation, but
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to date, the Board has not heard further. The Board received no reply from the last of the
named group.
[10] In reply, employer counsel reiterated its position as to the points outlined above, and added
that the employer was not aware of any procedural mechanism within the Public Service of
Ontario Act to file group complaints.
[11] In response to the above situation, in is appropriate to start by noting that it is true that there
is no explicit reference to group complaints in the legislation or regulations governing the
Board’s procedures. They are neither prescribed nor prohibited. However, there are many
examples in the Board’s case law of complaints that were filed together by more than one
complainant, or were filed separately with similar wording or issues and heard together,
with various combinations of representation and spokespeople. On many occasions,
especially when the matter is identified at the outset as a group grievance, and the
complaint is signed by all members of the intended group, there has been no issue raised.
This is particularly so where both sides see potential economies of time, effort and money
by grouping the same or similar issues. The individuals with the right to complain to the
Board are not represented by unions who provide representation for grievances, and it is
very common for complainants to represent themselves and/or colleagues rather than retain
counsel, with the accompanying expense. The Board’s Rule 6(a) provides that a
complainant may present his or her complaint personally or may be represented by a
representative, and Rule 20 provides that the Board may consolidate or hear cases at the
same time or immediately one after the other when the complaints have a question of law
or fact in common. The combination of these provisions and the practicalities of many
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group situations have meant that group complaints or groups of complainants are not
uncommon at the Board. Nonetheless, issues have arisen from time to time as to the
composition of a group, or who is the spokesperson or representative, which are dealt with
on a case by case basis.
[12] In the circumstances of this case, the employer proceeded on the basis that the matter
before me was an individual grievance, and formulated its objections on that basis.
Further, not all the members of the group have been in communication with the Board, and
those whose complaints were received by the Board were advised that their complaints
would remain in abeyance until Ms. Kaine’s was dealt with. One option is to consider this
decision as applying to those who wrote consenting to Ms. Kaine’s representation, albeit
part way through the process. Although the Board is not aware of any prejudice to either
side that would flow from such an option, it appears that the better option, as it is the most
straightforward, is to continue in the vein in which all the matters were originally handled,
i.e. render a decision on Ms. Kaine’s complaint first, and then deal with those held in
abeyance. In the result, this decision is directed at Ms. Kaine’s individual complaint, and
the others will be dealt with after issuance of this decision.
The Background Context of the Complaint
[13] This complaint, as with many others filed with the Board from complainants across the
province, disputes certain aspects of managerial compensation for the fiscal year
2011/2012. This was a year in which restraint measures froze wages for non-bargaining
unit employees at 2011 levels, and pay for performance was not paid out as managers had
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come to expect. The complaint now before me characterizes the change as unfair and
incompatible with values of the Ontario Public Service which would ensure that the
compensation process is fair, equitable and transparent. This complaint addresses the same
compensation provisions as a recently issued decision, Smith et. al and the Crown in Right
of Ontario (Ministry of Community Safety and Correctional Services, PSGB# P-2012-4155,
dated July 9, 2014. The factual background, in the portion applicable to this case, was set
out in that decision as follows:
As employees excluded from collective bargaining, [the complainants] are covered by the
Management Compensation Plan (MCP), which is set by a combination of directives issued
by Management Board of Cabinet and government-wide compensation policies consistent
with them, rather than by collective negotiations as is the case for members of bargaining
units. For several years prior to 2012, employees such as the complainants have been able to
increase their compensation by only one route: a favourable pay for performance rating from
their superiors. Those ratings were translated, according to annually set policy, into a range
of percentage increases. A zero percentage rating was reserved for those with problematic
performance ratings, and a person who “met all” the performance expectations, for example,
received an increase in each of the years leading up to this complaint. That changed in
2011/2012 because of fiscal restraint, when the range of performance awards was set at 0%,
basically freezing wages, regardless of whether performance was worrisome or wonderful. In
the policy dated September 28, 2012 which describes this, one reads that performance pay for
the 2011-12 year is set at zero percent for non-bargaining unit Ontario Public Service
employees, and that “the earnings of non-bargaining unit employees, who were eligible for
performance pay, are to remain at 2011 levels.”
The focus of this complaint is what appeared to some as an exception to the general wage
freeze. Despite the general lack of increases, some members of the Management
Compensation Plan received lump sum payments in the end of 2012, while others did not, and
it is this difference that the complainants are seeking to remedy. The employer sees the lump
sum payments as a way to ensure that the managers who received them did not experience a
decline in their basic annual earnings, while the complainants see them as an arbitrary
favouring of the group of employees already at the maximum in 2011, by giving them a
payment which was unavailable to others. The payments were provided on December 20,
2012 and were equal to the amount of lump sum performance awards paid in 2011.
…
In order to understand this preliminary dispute, and before discussing the relevant legal
framework below, it is necessary to go back to how the pay for performance plan was
structured just prior to the restraint measures of fiscal year 2011/2012. Jobs covered by the
Management Compensation Plan are compensated according to a wage grid, with a minimum
and a maximum of yearly wages, through which employees could move by means of their
performance-related awards, rather than by length of service, or across-the-board increases.
Once any such movement brought the employee to the maximum of the pay grid, any
remaining entitlement to a pay for performance award for those in the “outstanding” and
“fully effective” categories was paid out in a lump sum payment, rather than a corresponding
additional increase in base salary. For example, if members of the Management
Compensation Plan close to the maximum of the pay grid, received a performance award of
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3%, whatever portion of that increase was necessary to bring them to the maximum would be
“used up” in a salary increase, and the remainder would be paid out in a lump sum. So, if it
took 1% of the 3% award to get to the maximum of the pay grid, that employee’s annual
wages would be increased by 1%, and then he or she would receive a 2% lump sum award
that was not rolled into the annual salary rate. For purposes of this award, the sum of the
salary determined by the grid maximum and the amount of the lump sum, if any, will be
referred to as an employee’s “basic annual earnings”. That basic scheme remains in place in
the policies relating to pay for performance, but with the percentage set at zero for the fiscal
year 2011/2012, no one moved on the grid for that fiscal year.
The employer’s view of the lump sum payments paid for the fiscal year 2011/12 is that, rather
than representing an increase in compensation denied to others, it was a payment to prevent a
decrease as compared to the year before for those who were eligible to receive it. This is
explained in the relevant policy referred to above:
For employees who were at the maximum of their salary range on April 1, 2011, the
application of the 0% performance pay may result in a reduction of their earnings in
2012 from the 2011 level.
A reduction in earnings occurs when an employee’s earnings (comprised of
annualized base salary and variable re-earnable incentive payment) for the fiscal year
starting April 1, 2012 are less than their annualized salary for the fiscal year starting
April 1, 2011.
In these instances, the employees may be eligible to receive a payment to maintain
their earnings at their previous year’s level.
…
The amount of the payment is an amount up to the variable re-earnable incentive
payment in respect of the 2010-2011 performance cycle.
The payment does not alter the employee‘s annual base salary or salary-based
benefits and is not included in pensionable earnings calculations.
Employees who received a base salary adjustment, but not a variable re-earnable
incentive payment in respect of the 2010-11 performance cycle are not eligible for a
payment.
A Variable Re-earnable Incentive Payment is defined in the same policy as follows:
Performance related payment, paid as a lump sum, to employees at the maximum of
their salary range. The payment of a variable re-earnable incentive does not alter the
employee’s annual base salary or salary based benefits and is not included in
pensionable earnings calculations.
The policy also provides an exception to the receipt of the payment in cases where an
employee is not performing at an acceptable level or the employee is/has been subject
to disciplinary measures in the previous fiscal year.
[14] The complainant’s view is that the changes described above represent a violation of her
terms and conditions of employment, which she details as follows in her complaint dated
July 5, 2013:
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#1 I grieve that the employer has violated the terms and conditions of my employment under
the Public Service Act of Ontario by unfairly applying a method of compensation administration
that differs from other employees in the Ontario Public Service (OPS).
#2 And further, that the employer has failed to adhere to the Statement of Ethical Principles
whereby OPS values are actively recognized and supported to ensure that the compensation
process is fair, equitable and transparent.
#3 This complaint concerns the employer’s failure to honour the employment contract for
the entire MCP category by changing the method of compensation for the fiscal year 2011-2012
without notice and after the end of the period.
#4 And further, that there has been no communication from the employer about Pay for
Performance, which has been part of the MCP category compensation package (terms of
employment) since 2008, for the fiscal year 2012-2013 (now past) and the current fiscal year,
2013-2014.
.
[15] As remedy for the above complaint, the complainant writes:
That MCP compensation is adjusted to reflect a merit increase for 2011-2012 similar to
other public service sectors, specifically AMAPCEO.
That a decision be communicated regarding management compensation for the fiscal
year 2012-2013, as there has been no indication of whether or not there will be Pay for
Performance for the year immediately past. In addition, that all managers be advised of
the compensation model that will be used for fiscal year 2013-2014.
That MCP salary levels be increased across the board since this category has not had an
increase since 2008. This is tantamount to a wage freeze for the past five years.
That all managers be able to move through the salary grid, whether this is through Pay
for Performance or through annual merit increases.
That and all retroactive payments for Pay for Performance be paid out immediately to all
affected managers.
Submissions of the Parties
[16] Employer counsel begins his objection by referring to the undisputed fact that the authority
to set or amend Public Servant (including management) compensation in the OPS rests
with the Management Board of Cabinet in accordance with section 33(2) of the Public
Service of Ontario Act, 2006 (PSOA). The various directives and policies supporting the
disputed compensation package are in evidence, including the Management Compensation
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Plan Pay for Performance Operating Policy and the Management Compensation Plan Pay
for Performance Operating Procedures. Undisputed provisions of these policies provide
that the decision on the MCP Pay for Performance Grid for the performance cycle year will
be made following the end of the performance cycle year, and that performance awards
may or may not be approved for any performance year.
[17] It is the employer’s position that the regulation set out below provides that the
compensation denied or provided to an employee for performance is outside of the Board’s
jurisdiction, and that the complaint should be dismissed on that basis. Further, the alleged
breaches set out above relate to the employer’s method of compensation administration and
since there is no other compensation structure for non-bargaining unit employees to move
through their salary range other than Pay for Performance, then this complaint cannot be
about anything other than Pay for Performance, in the employer’s view.
[18] The complainant responds to the objection by referring to the introduction to the
Management Compensation Plan (MCP) Pay for Performance Operating Policy which
states: "The Pay for Performance Operating Policy supports the objective of being a
performance focused organization with salary movement based on performance. MCP
employees progress through their salary ranges solely based on performance through their
pay for performance award". In the complainant’s view, this 2008 policy continues to
constitute a term or condition of her employment, including its statement that excellence in
employee performance is rewarded. Further, it states that OPS values are actively
recognized and supported to ensure the process is fair, equitable and transparent and
employee awards are linked to on-the-job performance results. The complainant states that
despite the fact that managers have continued to receive performance ratings on an annual
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basis, the employer has failed to honour the MCP Pay for Performance Operating Policy by
failing to allow an opportunity for those managers not at the top of their pay grid to move
through the grid as other employees within the Ontario Public Service, such as those
represented by OPSEU [Ontario Public Services Employees Union] and AMAPCEO
[Association of Management, Administrative and Professional Crown Employees of
Ontario] have done during the same time period. Further, managers at the top of their pay
grid have been awarded arbitrary "lump sum" awards that apparently have no relation to
their performance over the previous year.
[19] The complainant asserts that managers have never been advised of a decision to
discontinue Pay for Performance as outlined in 2008 and that, as such, it remains part of the
managers' compensation package. To illustrate this point, the complainant cites information
given to a manager who left the OPSEU bargaining unit to become a permanent manager
after 2008, who signed a form that states the following:
For Management employees, Pay for Performance has replaced merits. Every
12 month period commencing April 1of each year, employees may receive
their pay for performance. Employees who have reached the maximum of their
salary range will be eligible for a lump sum bonus based on performance.
[20] Acknowledging that the performance rating for an individual manager cannot be the
subject of a complaint or grievance, the complainant takes the position that the employer
has breached its contractual obligations by failing to honour the agreement that is currently
in place to allow managers to move through their salary grid based on performance ratings.
Despite ratings of "Outstanding" or "Fully Effective" within a performance cycle, these
managers have been frozen at their current salary level over the past two fiscal years and
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possibly the most recent fiscal year, which ended March 31, 2014. The complainant
characterizes this as unacceptable and discriminatory.
[21] In support of this position, the complainant refers to an Ontario Ministry of Labour
decision, Non-union Staff of the City of Toronto and the City of Toronto ; Claim #s
70063991-1, etc., a decision of Employment Standards Officer Rick Richards, dated March
21, 2011, concerning pay for performance for the City of Toronto non-bargaining unit
employees. In that decision, it was found that there is an expectation that employees
receive notice of a substantial change in terms and conditions of their employment,
especially one concerning merit pay and compensation. The complainant quotes a
spokesperson for the employees who had brought the complaint resolved by that decision,
to the effect that the affected employees worked for a full year on the understanding that
this pay was part of their compensation, and that the award simply confirms that “if you
promise to pay people for their work, then you've got to keep the promise.”
[22] The complainant states that no such notice has been received to date announcing awards
solely for those at the top of their salary grid, nor has there been any attempt by the
employer to replace the current compensation plan, which includes Pay for Performance,
with something more equitable and transparent. She states that the group of managers from
her Ministry who submitted a grievance in April 2013 are very disheartened by the
treatment received at the hands of the employer, firmly believing that this needs to be
remedied by the Public Service Grievance Board.
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[23] In reply to the Applicant’s submissions, employer counsel emphasizes that that the Pay for
Performance Directive did not change in 2012. Essential to the employer’s position is the
fact that the pay for performance policy and procedures, which are still in place, both
contemplate that the award for performance may be set at 0% in any given performance
year. The pay for performance awards for all performance categories in 2011-2012
performance cycle were set at 0%.
[24] In addition to the employer’s position that the Board does not have the jurisdiction to hear
complaints about the compensation provided or denied as a result of an employee’s
performance rating, the employer stresses that the pay provisions laid out in both the
OPSEU and AMAPCEO Collective Agreements do not apply to Ms. Kaine as she is not
represented by either bargaining agent. Further, the enforcement of terms and conditions of
collective agreements not applicable to managers is also beyond the jurisdiction of the
Board.
[25] In response to Ms. Kaine’s submission to the effect that pay for performance for 2011-2012
was “discontinued” and was not communicated to staff, counsel submits that pay for
performance was not discontinued for 2011-2012. Rather, the performance award for all
performance ratings was set at 0% in line with the authority provided in the relevant
directive.
[26] In respect of the complainant’s reliance on the City of Toronto decision, cited above,
counsel notes that Section 3(4) of the Employment Standards Act, 2000 sets out the
provisions in the Act that apply to the Crown. Part V of that Act, which contains the wages
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provisions on which the City of Toronto case was decided, does not apply to the Crown. As
such, counsel submits that the decision provides no guidance on the issues before the
Board.
[27] In support of his argument employer counsel relies on the following case law:
Gary Sumner et al and the Crown in Right of Ontario (Ministry of Health and Long-term
Care), PSGB# P-2006-1143 etc., (O’Neil); Robert Younger and the Crown in Right of
Ontario (Ministry of the Environment), PSGB# P-2006-2458, (O’Neil); Anthony Hill et al
and the Crown in Right of Ontario (Ministry of Community Safety and Correctional
Services), PSGB# P-2004-3699, (O’Neil); Garratt et al and the Crown in Right of
Ontario (Ministry of Health and Long-term Care) P-2003-1670, (O’Neil); Tyrrell et al
and the Crown in Right of Ontario (Ministry of Community Safety and Correctional
Services, PSGB# P-2003-2687 etc., (Carter); Berenbaum and the Crown in Right of
Ontario (Ministry Labour), PSGB# P-2007-0407(O’Neil) and Lori St. Amant and the
Crown in Right of Ontario (Ministry of Community Safety and Correctional Services),
PSGB# P-2012-0601, (Carter).
Excerpt from regulation 378/07
[28] The following excerpt from regulation 378/07 under The Public Service of Ontario Act,
2006 is most pertinent to this preliminary issue:
Complaint about a working condition or a term of employment
4. (1) Subject to subsection (2), a public servant who is aggrieved about a working
condition or about a term of his or her employment may file a complaint about the
working condition or the term of employment with the Public Service Grievance Board,
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(a) if the public servant is eligible under sections 5 and 7 to file such a complaint;
(b) if the public servant gives notice in accordance with section 8 of his or her proposal
to file the complaint; and
(c) if the public servant complies with the filing requirements set out in section 10. O.
Reg. 378/07, s. 4 (1).
(2) The following matters cannot be the subject of a complaint about a working
condition or about a term of employment:
1. The term or duration of the public servant’s appointment to employment by the
Crown.
2. The assignment of the public servant to a particular class of position.
3. A dismissal without cause under subsection 38 (1) of the Act or a matter
relating to such a dismissal.
4. The evaluation of a public servant’s performance or the method of evaluating
his or her performance.
5. The compensation provided or denied to a public servant as a result of the
evaluation of his or her performance. O. Reg. 378/07, s. 4 (2).
[the bolded paragraph is the focus of the employer’s objection]
Considerations and Conclusions
[29] As noted in the recent Smith decision cited above, there have been various aspects of the
employer’s move to merit-based compensation over the last several years which have
generated complaints resolved by decisions cited above. These include: retroactive
recharacterization of lump sums as progress on the grid (Sumner and Pedder), failure to
take into account a retroactive reclassification in the implementation of the pay for
performance policy (Berenbaum), cap on the number of employees who could receive an
“exceeds” rating, failures to follow the policy in regards to evaluation of performance,
failure to recognize employees who participated in a labor disruption by not awarding
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“exceeds all” ratings, the creation of pay inequities between pay classes (Tyrell), and
failure to conduct a performance evaluation in the manner expected, or with the anticipated
results (Younger), for instance. The Board has consistently found under the regulations in
place since 1990, that it did not have jurisdiction over complaints about the process of
evaluation or its fruits in terms of either the level of the performance evaluation or the
compensation granted or denied in relation to performance.
[30] Looking at the subject matter of the complaint now before me, it is very clear that the
central event complained of is denial of pay for performance. The provisions that the
complainant claims were not honoured are all about pay for performance. Having carefully
reviewed the complaint and the written submissions, I am persuaded that the substance of
the complaint is that she did not receive pay that was based on performance in the fiscal
year 2011-12. Such aspects of the complaint are clearly not within the Board’s jurisdiction
as they pertain to compensation denied in respect of the complainant’s performance, a
subject matter specifically excluded by the regulation set out above.
[31] As well, the claims for remedy are nearly all requests that the Board set different terms and
conditions of employment than are part of the complainant’s current employment contract.
The Board has no authority to set terms and conditions of employment; it can only order
the enforcement of already existing ones. Therefore, the claims that MCP compensation be
adjusted to reflect a merit increase similar to AMAPCEO, that salary levels be increased
across the Board and that all managers be able to move through the salary grid, are all
remedies that the Board is without the authority to award, as they would require it to
establish new terms of the managers’ employment contract. As well, similar to the
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situation in the Hill decision, cited above, there is no term or condition of employment in
evidence establishing any required link between the complainant’s compensation and that
of those of any member of a bargaining unit.
[32] The remedial requests that Management communicate the terms and conditions of
compensation for 2012-13 and 2013- 2014 are not by themselves outside the jurisdiction of
the Board. However, they flow from a complaint whose subject matter is the denial of pay
for performance, and as such, are inextricably linked to a complaint over which the Board
lacks jurisdiction. Moreover, there are no provisions of the managers’ contract in the
material before me which establish that the employer must communicate at a certain time,
or in a certain way. To the extent that the complaint is that the employer did not
communicate the zero-percentage pay-for-performance rating until after the performance
cycle, the policies in evidence contain explicit provisions that any performance awards will
be announced after the performance cycle in question. Therefore, even if the Board had
jurisdiction over the subject matter of the complaint, i.e. the denial of pay for performance,
there is no viable case on the basis that the employer did not announce the level of
performance awards in advance.
[33] The issue about notice is linked to the allegations concerning the OPS values of
transparency. As the Board wrote in response to a similar theme in the Smith complaint:
Although it may be that specific communication earlier on might have given the complainants
better understanding of the lump sum payments, and allayed concerns expressed in this
complaint, there is nothing in the material before me that establishes a viable complaint of a
violation of a specific term or condition of employment as to transparency, or specific amount of
notice. As to the fact that the employer set the performance percentage at 0% after the
performance year, the facts do not establish a viable case of a breach of the policy in this respect.
The complainants had notice, in the longer standing pay for performance policy of the employer’s
practice of setting the level of the performance award, if any, after the performance cycle, even if
their attention was not specifically drawn to it before the compensation freeze at issue in this
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decision. More generally, as in the Garratt decision, cited above, the allegations concerning
transparency and fair and equitable treatment concerning wages are inseparable from the elements
of the complaint which essentially ask the Board to set different terms and conditions of
employment. I am not persuaded that they make out a viable allegation that is within the Board’s
remedial authority.
[34] I have also separately considered the allegation based on policy provisions, such as in the
Statement of Ethical Principles, to the effect that OPS values are supported to ensure that
the compensation process is fair, equitable and transparent. Although such policy
statements are not outside the Board’s jurisdiction, in this case they, too, are inextricably
linked to the central complaint before me, which is that the employer denied pay for
performance, and are also asking for the setting of different terms and conditions of
employment as to the compensation process, which is not within the Board’s power to do.
The link between the central subject of denial of pay for performance and the claims for
fairness and transparency is made very clear in the following passage from the
complainant’s submissions:
We assert that the employer has never, either verbally or in writing, communicated a decision
that there would be a change in management compensation subsequent to the announcement
in 2008 that a Pay for Performance compensation model would be implemented. This failure
on the part of the employer to honour the terms of the employment contract for managers in
the MCP category over the past two years and during the current fiscal year has been unfair
and inequitable and has lacked transparency.
[35] As noted above, the complainant relies on the City of Toronto decision, cited above, stating
that the managers have continued to fulfill the expectations set out by the employer on an
annual basis and have been, in effect, denied wages already earned as part of their contract
and that this violates conditions of employment as set by the employer. The complainant
also states that there is an expectation that employees receive notice of a substantial change
in terms and conditions of their employment, especially one concerning merit pay and
compensation. The complainant states that no such notice has been received to date
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announcing the continuing entitlement to bonuses solely for current and former staff
already at the max of their salary grid. The reference to “earned wages” is a reference to the
requirement in Part V of The Employment Standards Act that the employer pay earned
wages, which was the basis of the City of Toronto decision. The reference to bonuses
solely for those at the maximum of the grid was also the focus of the Smith complaint.
These themes were addressed in the Smith decision, cited above, as follows:
I have also carefully considered the viability of the claim that the complainants had a
legitimate expectation that they would be paid pay for performance or that they would
receive reasonable notice if they were not going to receive it. Reference was made in this
respect to the City of Toronto decision, cited above. Quite apart from the undisputed fact
that Part V of The Employment Standards Act, relied on as the basis of that decision, does
not bind the Crown, I find the facts of that case sufficiently different that the decision
lends little support to the complainants’ case. The findings of fact included that the
employer, by way of a vote at City Council, had authorized the payments in question, and
then tried to withdraw them after the employees’ right to them had vested. In this case,
there is no evidence that the payments sought had been authorized for those who were not
at the maximum of the grid in 2011. As well, although there is little doubt that the pay for
performance policy is a term and condition of employment of the complainants, just as it
was for the non-union City employees, there is nothing in the City of Toronto decision
that indicates that part of the City’s policy was an express provision that the levels of pay
for performance could be set at 0% in any year. No doubt, the fact that performance
awards had been made in all recent years distracted from employees’ concentration on
the part of the policy that allowed the employer to refrain from approving performance
awards for any given performance cycle. Most basically though, there is no exemption in
The Employment Standards Act from the consideration of complaints related to pay for
performance as there is in this Board’s governing regulation.
[36] In other words, it is true that Pay for Performance is a term and condition of managers’
employment, but is one which the regulation removes from the complaints which the Board
has the power to consider or remedy. In any event, the Pay for Performance policies
include explicit provisions that awards may not be granted in any given year, and that the
amount of any award will be set after the performance cycle. Therefore, although the pay
for performance policy is no doubt intended to help motivate managers to perform well, in
the form currently in evidence, it does not guarantee any payment in any given
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performance cycle, and explicitly provides that the level of any payment will be set
retroactively.
[37] Ms. Kaine made references in her material to the payments authorized for those already at
the maximum of the grid as arbitrary and discriminatory. Similar claims about arbitrariness
were dealt with in the Smith decision as follows at paras. 39 :
The undisputed fact is that failure to pay any such lump sum payments flows
from the decision to set the performance pay awards at 0% for 2011/2012, and to
freeze the basic annual earnings of MCP employees at the level they had reached
in 2011. Further, and despite the complainants’ characterization of the lump sum
payments as arbitrary, it is also undisputed that the lump sum payments
maintained the annual earnings of those who were at the maximum of the pay
grid in 2011 at the level they had achieved as a result of the application of pay for
performance levels for the fiscal year 2010/2011. Thus, the uncontested facts
establish that the compensation policy for 2011/2012 treats both sets of
employees the same in terms of leaving them all at the level of basic annual
earnings they had achieved in 2011. For those who were at the maximum of the
pay grid in 2011, the 2012 payment served to maintain their level of basic annual
earnings, rather than limiting them to the maximum of the pay grid, with no
additional remuneration, which the policy defines as a decrease in annual
earnings.
[38] As well, the Board found in Smith, in remarks that are equally applicable here, that there
was nothing in the material about the lump sums paid in 2012 that established any viable
claim of discrimination on any prohibited ground. Further, the policy provisions in
evidence do not require that all employees be treated the same. The undisputed pay
provisions create differences based on many factors such as classification and service. As
in Smith, the complainant does not argue that all jobs should be paid the same, regardless of
qualifications, responsibilities, etc., although that might accord with some people’s idea of
equality. Moreover, the remedy requested for the complainant’s claim that the 2012 lump
sum payment to those at the maximum of the grid in 2011 is discriminatory would, once
again, require the Board to create a new condition of employment, rather than enforce a
pre-existing one. The Board does not have the authority to do so.
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* * *
[39] For all of the above reasons, the Board finds that the complaint must be dismissed as
beyond its jurisdiction as it relates to the denial of pay for performance and in respect of its
claims for the setting of new terms and conditions of employment.
Dated at Toronto, Ontario this 11th day of July 2014
Kathleen G. O’Neil, Interim Chair