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HomeMy WebLinkAboutRichard 14-02-23Between: in the Matter of an Arbitration Pursuant to the Ontario Labour Relations Act, 1996 KAYMAR REHABILITATION INC. (the Employer) WrIi RE ONTARIO PUBLIC SERVICE EMPLOYEES UNION ON BEHALF OF ITS LOCAL 452 (the Employer) Re: Grievance of Candice Richard - OPSEU # 2014-0452-0001 HOOPP Pension Contributions AWARD Paula Knopf - Arbitrator APPERANCES: For the Employer: Stephen Bird, Counsel For the Union: Andrew Reeson, Counsel The hearing of this matter was held in Kingston, Ontario on February 4, 2015. This grievance concerns a matter of contract interpretation filed to determine the Employer's responsibility with regard to pension contributions for casual employees. The Healthcare of Ontario Pension Plan (HOOPP) and Pension Benefits Act of Ontario require that employers make corresponding contributions for employees who are enrolled in this Plan. The issue in this case is whether the Employer is required to make the HOOPP contribution on behalf of the Grievor, who is a casual employee, and to pay her the full 14% "in lieu of benefits" together with her hourly wage. The facts giving rise to the grievance are not in dispute • The Grievor accepted an offer of employment as a casual employee in September 2007. Because of her status, she has been paid 14% "in lieu of all benefits" in addition to her hourly wages. In the autumn of 2008, she became eligible to join the Healthcare of Ontario Pension Plan (HOOPP). In November 2008, she received a package from the Employer containing the forms that would allow her to elect to join HOOPP. She completed those forms in the Spring of 2009. In April of 2009, she received confirmation from HOOPP that she was enrolled as of March 27, 2009. Since that time, the Employer has been deducting her contributions to HOOPP from her bi-weekly pay. • Up until November 15, 2013, the Employer was making a corresponding contribution to HOOPP on behalf of the Grievor. • On December 11, 2013, the Grievor received a memo from the Employer advising that all contributions to HOOPP were ceasing. • The Employer stopped deducting the Grievor's and making its own contributions to HOOPP as of November 15, 2013. • On January 6, 2014, the Grievor filed the grievance that is the subject of this Award. The Union's complaint is that the Employer has failed to make the appropriate contributions to HOOPP since November 2013 on behalf of the Grievor. 1 The relevant provisions of the Collective Agreement are: Articie 2 - Definitions Article 2.04 A "casual employee" is any employee who does not meet either of the definitions in 2.02 and 2.03 [`regular full-time' and `regular part-time employee'], and without limiting the generality of the foregoing, shall also be deemed to include an employee who is temporarily filling a position where the incumbent is on authorized leave of absence or who is employed on a casual basis to meet the demand for services in excess of the capacity of the existing staff complement. Article 14 - Conditions of Employment Article 14.03 It is a condition of employment for regular full-time and regular part-time employees to enroll in such group plans as HOOPP Pension Plan in accordance with the regulations of the plans. Article 22 - Benefits 22.01(a) All employees as a condition of employment will join the Hospitals of Ontario Pension Plan in accordance with the terms and provisions of the Plan. Article 23 - Salaries and Allowances Article 23.03(b) All casual employees shall be placed at level 1 of the salary scales.... upon hire and shall progress on the basis of one increment for each 1680 hours worked. In addition to their hourly rate, they will be paid 14% in lieu of all benefits. Article 25 - Casual Employees 25.01 This Collective Agreement applies, as written, to casual employees as defined in Article 2.04, save and except the following Articles:.. . [several listed provisions, plus] .. ARTICLE 22: Benefit Plans The Submissions of the Parties The Submissions of the Union The Union argued that the Grievor has been entitled to be enrolled in HOOPP at all the relevant times and to also receive her 14% in lieu of benefits. Counsel for E the Union submitted that the following questions should be asked with regard to the interpretation of the words "in lieu of all benefits" in Article 23.03(b): 1. Does "all benefits" include the HOOPP? 2. If it does, does the term contemplate the apportioning of specific benefits in the Collective Agreement? 3. Does the Collective Agreement provide the authority to deduct the cost of the Employer's share of HOOPP contributions from the 14% "in lieu" payment? The Union asserts that a casual employee is entitled to the 14% in lieu payment as well as the Employer's contribution to HOOPP. It was submitted that nothing in the Collective Agreement allows for the apportionment of the "in lieu" payments and/or the deduction of the Employer's contributions to HOOPP from the 14% calculation. This interpretation was said to be in line with the following authorities and consistent with the notion that the "in lieu" payment was never intended to be a precise equivalent to the cost of benefits for full-time employees: Alexandra Marine & General Hospital and Ontario Nurses Union, (1990) 17 L.A.C. (4th) 270 (Devlin); Kingston, Frontenac, Lennox and Addington Health Unit, and CUPS, Local 3175, Unreported decision of Jane Emrich, August 2, 1990; Glebe Centre for the Aged and CUPS, Local 3302, Unreported decision of Dana Randall, January 4, 2011. Counsel for the Union addressed the following case, saying it is distinguishable because of the fact that its decision turned on language that is different than the wording in the case at hand: Peel (Regional Municipality) (c.o.b. Vera M. Davis Community Care Centre) and U.F.C.W, Local 175, [1999] O. L.A.A. No. 272 (Solomatenko). By way of remedy, the Union asked for a declaration that the Employer has violated the Collective Agreement, that the Employer be required to pay both its own and the Grievor's contributions to HOOPP since November 2013, and to pay any interest and/or penalties assessed by HOOPP for the late payments. 3 The Submissions of the Employer The Employer submitted that this case can and should be decided on the wording of this Collective Agreement. It was stressed that nothing in this Collective Agreement suggests that this Employer has agreed to make any contributions to HOOPP on behalf of casual employees. Further, it was emphasized that nothing in this Collective Agreement even gives the casual employees the right to opt into HOOPP. Further, it was argued that while the Employer is required to make contributions to HOOPP on behalf of full-time and part-time employees by virtue of Article 14.03, casual employees are exempted from that provision and from receipt of any "benefits" because of the language of Article 25. The Employer acknowledged that arbitrators have prohibited employers from deducting a percentage amount from an "in lieu" payment to cover off the cost of the Employer's HOOPP contribution. However, this Employer argued that what distinguishes this Collective Agreement from the cases cited by the Union is that this Employer is objecting to the payment of both the 14% in lieu of benefits, as well as the cost of the Employer contribution to HOOPP when a casual employee decides to opt into the Plan. The Employer suggests that since HOOPP requires an Employer to make a contribution on behalf of an enrolled employee, that specific amount should be "set off' from the 14% in lieu payment or the Employer should not be required to make the contribution at all. The Employer urged me to adopt the dissent of the Employer nominee in the case of Alexandra Marine & General Hospital and Ontario Nurses Union, supra, and to follow the reasoning in Peel (Regional Municipality) (c.o.b. Vera M. Davis Community Care Centre) and U. F. C. W., Local 175, supra. The Decision In order to resolve this case, it is helpful to examine the context of this problem and to see how it has been addressed in similar circumstances. In Alexandra 4 Marine & General Hospital and Ontario Nurses Union, supra, Arbitrator Devlin was dealing with language that specified that the pension plan was included in the "in lieu of fringe benefits", and it had been negotiated before part-time employees were eligible to participate in HOOPP. When part-time employees became eligible to opt into HOOPP, their employer deducted the amount of the employer's contribution to HOOPP from the percentage in lieu. Arbitrator Devlin concluded: ... the percentage in lieu is not specified as a reimbursement for the benefits provided to full-time nurses but is a payment "in lieu of or instead of those benefits. Moreover, Article 18 [compensation] does not specify a particular amount or portion of the percentage in lieu which is attributable to pension. This is not altogether surprising because in the absence of part-time nurses having a statutory right to join the pension plan, there was no necessity for the parties to quantify the portion of the percentage in lieu which is referable to pension. Nevertheless, the agreement makes no provision for the deduction from the percentage in lieu and, in the board's view, there is nothing in the collective agreement which would authorize the unilateral deduction of the full amount of the employer's contribution to HOOPP from the percentage in lieu of fringe benefits and the redirection of this amount to the plan. [p.279] The dissent in that case was written by the Employer Nominee Winkler (as he then was), stating that, "... in the case of the pension.... the hospital ought not to be required to `pay twice' in the form of percentage in lieu and HOOPP", [p.282]. In Kingston, Frontenac, Lennox and Addington Health Unit, and CUPS, Local 3975, supra, Arbitrator Emrich was dealing with language that specifically acknowledged that casual employees could opt into the pension plan. The Union grieved when the Employer indicated that it would reduce the percentage in lieu of "all benefits" by 5.5% for all eligible casual employees who chose to opt into the pension plan. Arbitrator Emrich concluded that the percentage in lieu could not be "disassembled or forfeited" by a casual employee's choice to participate in the pension because the language regarding the option to join the plan was not linked to the percentage in lieu of benefits clause and there was no language 5 authorizing a deduction to correspond with the employer's contribution to the Plan. Further, in the absence of any agreement about how the percentage in lieu should be apportioned among benefits or how they would be costed, it was held that the parties could not have intended the phrase "all benefits" to include the value of a pension benefit for casual employees. This reasoning was adopted in the case of Glebe Centre for the Aged and CUPS, Local 3302, supra. A different approach was taken in Peel (Regional Municipality) (c.o.b. Vera M. Davis Community Care Centre) and U. F. C. W., Local 975, supra. This was another situation where the employer deducted its portion of pension contributions for part-time employees out of the payment in lieu of "all fringe benefits." However, that collective agreement also provided that when an employee transferred from full-time to part-time status, s/he could opt to remain in the pension plan but have the employer's contribution deducted from the part- time percentage in lieu, or s/he could withdraw from the pension plan, in which event s/he would be terminated as a full-time employee and re -hired as a part- time employee. Relying upon that language, Arbitrator Solomatenko concluded that the words "in lieu of meant "instead of, or in substitution of', but "not both." Further, it was decided that nothing in the contract suggested that it was mandatory to provide both the payment in lieu plus the value of the pension contribution. It is very clear that these conclusions were based firmly on the specific language of that collective agreement. It was said that the clause dealing with the change in status from full-time to part-time status was the "strongest' or "direct evidence" that the "payment in lieu" included the employer's portion of the pension contributions and that part-time employees who opted into the pension plan should not get both the full amount of the "in lieu" payment and also have the employer pay its portion of contributions to the plan, [see paragraphs 28-29]. In the case at hand, the Collective Agreement does not indicate that HOOPP or the pension is included in the percentage in lieu. Nor does the Collective 0 Agreement say anywhere that the Employer is required to make any contributions to HOOPP on behalf of casual employees. Indeed, while Articles 14.03 and 22.03 indicate that full-time and part-time employees must enroll in HOOPP, casual employees are not required to join and they are exempted from the "Benefit Plans" provision in Article 22 that does include a reference to HOOPP. Therefore, it is understandable why the Employer contends that nothing in this Collective Agreement signals the clear intention that this Employer would be obligated to contribute to a casual employee's HOOPP account. However, it is common ground that the HOOPP regulations and applicable statute require employers to make contributions for eligible employees and that casual employees have become eligible for enrollment in HOOPP. This is akin to the situation in Alexandra Marine & General Hospital and Ontario Nurses Union, supra, where the parties were dealing with the administration of language that had been drafted before it was even contemplated that part-time or casual employees would be eligible for enrollment. Nevertheless, the Employer was held to be responsible for the HOOPP contribution as well as the full "in lieu" payment. In the case at hand, the parties to this Collective Agreement have had language that has been in place for some time and the Grievor's enrollment as a casual employee and contributor to HOOPP pre -dates the term of this Collective Agreement - July 1, 2010 - June 30, 2013. At no time have the parties changed the language dealing with "in lieu" payments or adjustment of the percentage for those casual employees who opt into HOOPP. Therefore, one has to start with the premise that this language was adopted and maintained in the context of casual employees' becoming eligible to participate in HOOPP. That eligibility brings with it the employer's obligation to make corresponding contributions. This means that even though the Collective Agreement does not specify that casual employees can "opt into" HOOPP, they must be deemed to have that option in terms of the contract's administration. 7 The question then becomes what is the effect of the Employer's obligation to make contributions to HOOPP for casuals who opt into the Plan upon Article 23.03(b)? The answer to that lies in the meaning of "in lieu of all benefits." According to the Alexandra Marine & General Hospital and Ontario Nurses Union line of cases, the percentage in lieu is a payment "instead" of benefits, not an exact replacement for benefits that are available to employees with a different or higher status. Even the Peel (Regional Municipality) (c.o.b. Vera M. Davis Community Care Centre) and U. F. C, W., Local 175 case found that "payment in lieu" is a payment being made "in place of, or in substitution of something else," [para 24]. While that case also said that this meant "one or the other, not both," that was largely because of the specific wording of the contract, as explained above. All the other cases that are cited above affirm that an employer may be held to be responsible for the HOOPP contributions and the full percentage in lieu, unless something in the Collective Agreement signals a way to hive off the cost of the HOOPP contribution from the percentage amount. In the case at hand, the parties to this Collective Agreement may not have specifically addressed the situation of a casual employee opting into HOOPP. But HOOPP allows for this. Further, this Collective Agreement has nothing in it that specifies a particular amount or portion of the percentage in lieu that is attributable to a pension benefit or connected to a pension benefit. This is consistent with the notion recognized in the decision of Arbitrator Stanley in 71 Participating Hospitals and OPSEU and its Participating Locals, February 9, 1990, cited in Kingston, Frontenac, Lennox and Addington Health Unit, and COPE, Local 3175: We do not agree that the percentage in lieu is necessarily intended as an accurate reflection of the precise cost of benefits to full-time employees. The percentage in lieu idea in bargaining is to compensate part-time employees for the benefits they do not receive and to put costs on the employer to discourage the use of part-time employment, or to at least remove the savings incentive to the employer to use part-time employment.... . While some unions may have agreed that a portion of the in lieu payment is attributable to the pensions this union does not. .... In simple terms since the in lieu payment was not assembled that way it cannot be disassembled in that way. This Employer has not intended to impose an arbitrary deduction from the 14% in lieu payment mandated by Article 23.03(b). All this Employer wants to do is to off -set the amount it is required to contribute into HOOPP for a casual employee who opts into the Plan. This is a principled approach and is consistent with the notion that the Employer should not be required to "pay twice" for a benefit. However, since casuals are exempted from Article 22 "Benefits" and are entitled to both the 14% "in lieu of all benefits" and statutorily entitled to enroll in HOOPP, it must be concluded that this Collective Agreement has to be administered to facilitate the enrollment. Further, as Arbitrator Stanley explained in the citation above, the in lieu payment cannot be equated precisely with the cost of the benefits available to full-time employees, nor can the value of the pension be apportioned unless so specified. It is true that this Employer can calculate the exact amount of the contribution that applies to each casual employee, but there is still nothing in the Collective Agreement that provides the authority to deduct the cost of the Employer's share from the 14% in lieu payment. Instead, we have a Collective Agreement that obligates this Employer to make that 14% in lieu payment to casuals and a pension scheme that requires employers to make specified contributions to casual employees' HOOPP accounts. This may seem like "paying twice" for "all benefits", however, it is simply an extra cost that was not factored in. Further, while the Employer has suggested that a simple deduction of the cost of the pension contribution for a casual employee from the 14% would address the "paying twice" issue, that also does not necessarily follow. Employers' required contributions to HOOPP relate to the Plan as a whole and do equate to each member's individual account, [HOOPP Plan Text, s.14.31. Therefore, even deducting the amount that this Employer is paying in relation to the Grievor or another casual employee from his/her 14% "in lieu" payment would not necessarily equate with the value or the cost of the benefit for an individual. So again, is it difficult, if not impossible, to accept that this is a 11 situation where there is a particular amount or portion of the percentage in lieu that can be attributable to HOOPP. Similarly, there is nothing in the Collective Agreement that authorizes the deduction of the full amount of the Employer's contribution to HOOPP for any individual employee from the percentage in lieu of fringe benefits. Finally, it must be remembered that this Collective Agreement has been renegotiated several times since casual employees have become eligible to opt into HOOPP. However, the parties have not changed the language of 25.03(b) or made any adjustments to the percentage in lieu for those who opt in. Therefore, it must be concluded that there is nothing to signal any intention to reduce the percentage amount in light of the altered situation, as has been done in other collective agreements, as set out above. Whether this Employer's obligation to pay the HOOPP contribution for causal employees who opt into the Plan as well as the 14% makes labour relations sense, the scheme and costs of the parties' collective bargaining relationship is a matter for them to deal with in bargaining. It is open to the parties to adopt different formulations of these provisions, as set out in the cases they cited or in other collective agreements where the issue of "set off' of the employer contributions to pension plans is specifically addressed. However, with the existing language of this Collective Agreement, it must be concluded that the Collective Agreement does not provide the authority to deduct the cost of the Employer's share of HOOPP contributions from the 14% "in lieu" payment. I declare that the Employer has violated the Collective Agreement by the way it has administered Article 23.03(b) since November 2013. Accordingly, the Employer is required to resume remittances and its contributions on behalf of the Grievor into HOOPP. Further, the Grievor is to be put into the position she would have been, but for the Employer's error. Therefore, the Employer is not required to pay the Grievor's portion of past contributions. However, for any 10 amount or period that the Grievor "buys back" into the Plan, the Employer shall pay its corresponding past contributions that are owing and any penalties or interest accruing as a result of the interruption in payments. 1 remain seized with regard to implementation of this Award, should the parties require further assistance. Dated at Toronto this 23rd day of February, 2015 Paula Knopf - Arbitrator 11