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HomeMy WebLinkAbout2014-0658.Union.15-03-03 DecisionCrown Employees Grievance Settlement Board Suite 600 180 Dundas St. West Toronto, Ontario M5G 1Z8 Tel. (416) 326-1388 Fax (416) 326-1396 Commission de règlement des griefs des employés de la Couronne Bureau 600 180, rue Dundas Ouest Toronto (Ontario) M5G 1Z8 Tél. : (416) 326-1388 Téléc. : (416) 326-1396 GSB#2014-0658 IN THE MATTER OF AN ARBITRATION Under THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT Before THE GRIEVANCE SETTLEMENT BOARD BETWEEN Association of Management, Administrative and Professional Crown Employees of Ontario (Union) Association - and - The Crown in Right of Ontario (Treasury Board Secretariat) Employer BEFORE Nimal Dissanayake Vice-Chair FOR THE UNION Marisa Pollock Sack Goldblatt Mitchell Counsel FOR THE EMPLOYER Jonathan Rabinovitch Treasury Board Secretariat Legal Services Branch Counsel Peter Dailleboust Treasury Board Secretariat Legal Services Branch Counsel HEARING January 20, February 13, 2015 - 2 - Decision [1] AMAPCEO has filed an Association dispute dated April 24, 2014 alleging a violation of article 45.1 of the collective agreement. [2] The term of the relevant collective agreement is from April 1, 2012 to March 31, 2014. Article 45.1, under the title “Merit Pay’, sets out a number of provisions “For employees in AMAPCEO classifications who are not at the maximum of their salary range”. Article 45.2, under the title “Pay for performance Bonus”, sets out a number of other provisions, “For employees in AMAPCEO classifications who are at the maximum of their salary range”. [3] Article 44 is titled “salary”. Article 44.1 provides that “Effective April 1, 2012, the salary rates in effect on March 31, 2012, shall remain in effect, and are set out in Salary Schedule A”. Article 44.2 provides that “Effective October 1, 2013, the salary rates set out in Salary Schedule A shall be replaced by Classification Levels and Salary Ranges Schedule B”. [4] The merit pay provisions are as following: 45.1.1 Effective until March 31, 2013, a merit increase for a twelve (12) month work cycle coinciding with the employee’s anniversary date shall be processed in an amount of 0-5% of his or her salary at the discretion of the Employer. An employee’s merit increase for satisfactory performance shall be three and a half percent (3.5%) of his or her salary. 45.1.2 Effective April 1, 2013, a merit increase for a twelve (12) month work cycle coinciding with the employee’s anniversary date shall be processed in an amount of 0-5% of his or her salary at the discretion of the Employer. An employee’s merit increase for satisfactory performance shall be three percent (3%0 of his or her salary. 45.1.3 Where an employee’s performance rating results in a merit increase that will cause his or her salary to exceed the maximum salary for his or her classification, the amount of the merit increase in excess of the maximum salary will be paid out as a lump sum bonus. Such lump sum bonus will not increase the employee’s base salary for any purpose. [5] The Pay for Performance Bonus provisions include the following: 45.2.1 Effective up to March 31st, 2013, for employees who were at the salary maximum on March 31, pay for performance bonuses will be processed on March 31st, 2013 based on performance for the previous fiscal year. . . . 45.2.6 An employee must have earned the maximum salary for his or her classification for at least twelve (12) months in order to be eligible for a full pay for - 3 - performance bonus. The performance bonus for an employee who has been earning the maximum salary for less than twelve (12) months will be pro-rated. 45.3.3 Effective April 1, 2013, there shall be no entitlement to a pay for performance bonus for any employee. [6] The evidence is that in 2004 in a letter of understanding the parties agreed to discuss the possibility of a new job classification/evaluation system. By subsequent memoranda of agreement they agreed on the processes for the completion of the project, including the negotiation of the rates and salaries, and any other monetary consequences of the implementation of the new job evaluation and classification system. [7] The process culminated with the signing of a Memorandum of Agreement on the implementation of the new job evaluation system (“the MOA”) on October 18, 2012. It is agreed that the MOA became part of the 2012-2014 collective agreement between the parties. In it the parties agreed on a number of terms “with respect to the implementation of a new job evaluation/classification system”, including the following: 1. The classification levels and salary ranges outline in appendix A are the new classification levels and salary ranges for the Job Evaluation/Classification system and shall be set out in the collective agreement. Upon implementation of the new job evaluation/classification system on October 1, 2013, these classification levels and salary ranges shall replace the existing classifications in Schedule 1 of the 2009-2012 collective agreement at pp. 120-127, and the corresponding salary schedule, at pp. 158-164 of that collective agreement . . . 5. Date of Implementation The date of implementation of the new classification levels and salary ranges resulting from implementation of the new Job Evaluation/Classification system shall be effective October 1, 2013. . . . 10. Pay Administration The following Pay Administration rules pertain only to employees moving from the old job classification system into the new job evaluation/classification system and have no application to other reclassifications under the collective agreement. (a) An employee whose current salary is below the minimum of the new range for his/her position will be moved to the new minimum effective the date of implementation. (b) An employee whose current salary is above the new minimum and below or equal to the new maximum of the new salary range for his/her position will move into the new salary range at his/her current salary effective the date of implementation. - 4 - (c) An employee whose current salary is above the maximum of the new salary range for his/her position shall maintain his/her current salary until the maximum of the new salary range exceeds their salary, at which time he or she may progress in the new range in accordance with Article 45. For clarity the employee will not be entitled to receive across the board increases, if any, while his/her salary is above the new maximum of the new salary range. (d) The anniversary date of an employee covered by this paragraph shall remain unaffected by the movement to the new level. (e) For clarity, Article 19 shall not apply to the movement in this paragraph. The Dispute [8] The dispute relates to a number of employees who were at the maximum of their salary range leading up to the implementation date of the MOA, October 1, 2013. With the implementation of the MOA effective October 1, 2013, they moved from the salary schedule A in the collective agreement to the new salary schedule B which had higher maximums. As a result, as of that date they were no longer at the maximum of the salary range for their classifications. The parties agree that as of October 1, 2013, the employees became eligible for a merit increase because they were now “not at the maximum of their salary range” as contemplated in article 45.1 of the collective agreement. However, they disagree on the amount of merit increase entitlement. The Submissions [9] AMAPCEO argues that each employee became eligible for a merit increase on his/her anniversary date. Counsel submits that under article 45.1.1 the merit increase entitlement is stated to be, “for a twelve (12) month work cycle coinciding with the employee’s anniversary date”. Therefore, the employee is entitled to a merit increase calculated on the basis of a 12 month period. However, the employer calculated the increase only from October 1, 2013 when the employees moved from schedule A to schedule B and as a result were no longer at the maximum of the salary range. As a result their merit pay was based on 6 months and not 12 months as required in article 45.1.1. The employer did not take into account the period April 1 to October 1, 2013. [10] Counsel submitted that based on a plain reading of article 45.1.1 the employer is not entitled to prorate merit increases. She submitted that a reading of the collective agreement as a whole further supports AMAPCEO’s position that the employer is not entitled to prorate merit increases. She argued that there is no provision bargained in the collective agreement to allow prorating of merit increases. However, in other contexts the parties have explicitly provided for prorating. She cited articled 45.2.6 (see, supra para. 5) which explicitly provides for prorating of pay for performance where an employee has been earning the maximum salary for less than twelve - 5 - months. Counsel argued that it is apparent that the parties had put their minds to prorating. With regard to Pay of Performance, which she described as the “close cousin” of merit increases, they provided for prorating where the employee met the eligibility criteria for less than the full twelve month period. They chose not to do so with regard to merit increases. She argued that the employer was attempting to add language to the merit increase provision which was not negotiated. Counsel argued that the MOA at para: 10(a) to (d) sets out the consequences of the implementation of the new system. They could have set out language for prorating of merit increases as they did for pay for performance. They have chosen not to. [11] As further examples of the parties providing for prorating where they wanted, counsel referred to article PT4.1 (Isolation pay under article 43 shall be prorated based on the proportion of part-time employee’s weekly hours to normal hours of work); Article 6.1.1 (A part-time employee shall earn a prorated portion of vacation credits based on ratio of weekly hours to full-time employment); Article FXT 5.1 (A part-time fixed term employee shall earn a prorated portion of attendance credits based on ratio of weekly hours of work to full-time employment. Counsel argued that the employer in any event cannot argue that from April 1 to October 1, 2013 the employees were at the maximum of the salary range. She pointed out that article 44.2 explicitly provides that effective October 1, 2013 salary schedule A shall be replaced by schedule B. Therefore, as of October 1, 2013, salary schedule A was no longer in existence. The only salary schedule in existence was schedule B. The status employees held under the old regime ended effective October 1, 2013. The employer was not entitled to rely on a salary schedule or employee status which were non-existent and longer part of the collective agreement. [12] Counsel pointed out that as of April 1, 2013 there was no longer any entitlement for pay for performance (article 45.3.3). She further pointed out as per article 44.1 there was in effect an agreement that there would be no across the board pay increase in the first year of the collective agreement. Therefore, the only gain for employees was the movement from their existing classifications to a new classification system which put them into classifications with higher maximums. Counsel argued that the employer was in effect penalizing the employees as a result of the new job evaluation/classification system, by limiting their next merit increase to 50 percent of what they would have otherwise received. AMAPCEO counsel submitted that in order to uphold the employer’s interpretation the Board would have to amend article 45.1.1 to read, “for employees not at the maximum for the entire twelve month work cycle”. The parties included language to that effect in the pay for performance provision, but not for merit increases. The Board would be exceeding its jurisdiction if it were to add language not negotiated by the parties. - 6 - [13] Counsel for the employer argued that in the period April 1 to October 1, 2013, the employees were at the maximum of their salary range. Therefore, they were clearly not eligible for merit increases. As employees at the maximum of the salary range, any monetary entitlement they would have had was for pay for performance. However, by virtue of article 45.3.3, effective April 1, 2013, they were no longer entitled to pay for performance. In other words, they were not entitled to either merit increases or pay for performance as of April 1, 2013. Eligibility for merit increases arose only on October 1, 2013 when employees moved to the Salary Schedule B. Employer counsel reasoned that effective October 1, 2013, employees who were not eligible for merit increases, suddenly became eligible because effective that day they were no longer at their salary maximum. Therefore, on April 1, 2014 they were entitled to a merit increase based only on the period during which they had eligibility, that is October 1, 2013 to April 1, 2014. It was submitted that article 45.3.3 is a specific provision which must prevail over any general provisions in the collective agreement. [14] Counsel argued that the Association was in effect asking the Board to ignore the clear agreement reached between the parties that the new system will be implemented effective October 1, 2013. It wants the system to be implemented 6 months earlier on April 1, 2013. It was submitted that in order to uphold the dispute the Board has to do that. It was submitted that if the parties intended that the new system would apply retroactively they could and would have stated that. They have not done that. Counsel submitted that the parties negotiated a whole package. Having agreed to the package, AMAPCEO was now attempting to “cherry pick” only the good parts, and wants to ignore that the right to pay for performance was bargained away. Counsel relied on case law standing for the proposition that clear and explicit language is required to claim a monetary benefit. To the contrary, there is crystal clear language in article 45.3.3 that there is no entitlement to pay for performance effective April 1, 2013. [15] Employer counsel submitted that AMAPCEO is attempting to circumvent what it had bargained away in article 45.3.3 by in effect moving the implementation date from October 1 to April 1, 2013. It wants the Board to proceed on the basis that the salary ranges resulting from the new system took effect, and therefore the employees were no longer at maximum salary levels effective April 1, 2003. However, in fact they were at their maximums until October 1, 2013, when the existing system was replaced by the new classification system and the new salary ranges. - 7 - [16] In reply, counsel for AMAPCEO pointed out that the “specific” provision the employer relies upon as prevailing over article 45.1.1 is article 45.3.3. However it simply has no application because it is about pay for performance. AMAPCEO agrees that effective April 1, 2013 employees have no entitlement to pay for performance. It is not claiming pay for performance for these employees after that date. It is relying on the plain wording of article 45.1.1 to claim merit increases for a 12 month work cycle. [17] Counsel argued that AMAPCEO was not attempting to read out article 45.3.3 or any other provision of the agreement. On the contrary, the employer was attempting to read in to article 45.1.1 a qualification that an employee has to be in the new classification for twelve months to be eligible for the merit increase on the basis of a twelve month work cycle as stipulated. The employer states that if an employee had been in the classification for a period of less than twelve months, the entitlement to merit increase is prorated based on that period. While the parties negotiated language for such prorating in relation to pay for performance, and other entitlements, there is no such language for prorating of merit increases. The employer is urging the Board to infer language which the parties had not negotiated. Citing case law, she argued that the Board ought not make such inference. CONCLUSION [18] Having regard to AMAPCEO’s acceptance that effective April 1, 2013 there is no entitlement to pay for performance, and that it is not making any claim for pay for performance in this dispute, article 45.3.3 is of no relevance. The disposition of the dispute turns on the interpretation of article 45.1.1. [19] In interpreting any provision of a collective agreement, the task is to ascertain the intention of the parties. In carrying out that task the Board must be primarily guided by the language the parties have used to express their intention. The Board must assume that the parties intended what they have stated by the use of the particular language. Effect must be given to the plain and ordinary meaning of the language used, unless that would lead to an absurdity or inconsistency with other provisions of the collective agreement. Therefore, the particular provision must be read, not in isolation, but in the context of the rest of the collective agreement. An interpretation which is in harmony with the collective agreement as a whole must be preferred over one which creates inconsistency and conflict. - 8 - [20] With those principles in mind, I turn to the language in article 45.1.1. first it is to be noted that the merit increase provided for is said to be “in an amount of 0-5% of his or her salary at the discretion of the employer”. As to the quantum, the merit increase is stated to be “for a (12) month work cycle coinciding with the employee’s anniversary date.” Since it is common ground that the anniversary date for all employees was April 1st, the twelve month work cycle contemplated has to be April 1st to April 1st the following year. That is the result of a plain reading of article 45.1.1. [21] The employer, however, relies on the preamble to article 45.1, which is to the effect that it applies to “employees in AMAPCEO classifications who are not at the maximum of their salary range”. The employer’s position is that these employees were “not at the maximum of their salary range only for 6 months of the 12 month work cycle. Until October 1, 2013 when the new salary ranges became effective, they were at the maximum of their salary range as per salary schedule A. Therefore, the argument goes, the entitlement to merit increase has to be based only on the six month period after October 1, 2013. [22] Applying the principles of collective agreement interpretation reviewed above, the Board prefers the interpretation of article 45.1.1 advocated by AMAPCEO. There is no dispute between the parties that the employees in question are entitled to merit increases under that article. The dispute is only about the amount. AMAPCEO interprets article 45.1.1 as entitling employees to merit increases based on the “twelve month work cycle” stipulated. The employer takes the position that the entitlement is limited only to the period of time during which the employees were “not at the maximum of their salary range”. [23] In the Board’s view, once the employees became eligible for merit increases with the implementation of the new salary schedule on October 1, 2013, they met the requirement that they were “employees in AMAPCEO classifications who are not at the maximum of their salary range”. Once there is entitlement, there is nothing in the collective agreement that imposes any variation of the amount of entitlement based on the period during which a particular employee was or was not at the maximum of his or her salary range. [24] The law is settled that there must be clear language to support a claim for a monetary benefit. The Board finds that the language in article 45.1.1 is clear that employees meeting the requirement “not at the maximum of their salary range” are entitled to merit increases based on a twelve month work cycle. When the employer was assessing merit increase entitlement on - 9 - October 1, 2013, these employees met that condition. Therefore, article 45.1.1 applied. There is nothing in article 45.1.1, or any other provision in the collective agreement that provides for prorating of the entitlement. [25] In Re Ontario Power Generation [2012] CanL11 81971 (Surdikowski) at para. 21, the arbitrator wrote that “Bowdens Media Monitoring Ltd similarly stands for the proposition that proration of a monetary benefit requires clear collective agreement language”. In Re Bowdens Monitoring limited, unreported decision dated June 10, 2004 (Saltman), the collective agreement provided for a payment of $ 200.00 to employees in the bargaining unit in the event of the discontinuance of a bonus plan. The employer took the position that the payment should be prorated for part-time employees and part-time and full-time employees hired partway through the calendar year. At p. 5, arbitrator Saltman wrote: On its face, Article 23.04 provides for the payment of at least $ 200.00 to members of the bargaining unit in the event the bonus plan is discontinued. Members of the bargaining unit are defined in Article 2.01 as “all full-time and regular part-time employees” of the Company, with certain exceptions not material to this case. As there is no provision in the collective agreement for proration of the $200.00 payment for part-time employees or for either full-time or part-time employees who became members of the bargaining unit during the 2003 calendar year, I am compelled to conclude that the payment must be made in full to all employees who were members of the bargaining unit in the 2003 calendar year irrespective of their hours of work or when they became employed. [26] In Re Corporation of the City of Simcoe, [2009] CanL11 10982 (Knopf) at p. 10 the arbitrator wrote: We must begin with the Collective Agreement. The language is clear. Full-time employees are promised a Uniform Allowance of $ 150.00 if they are required to wear a uniform. There are no other conditions upon the entitlement. Nothing in the Collective Agreement gives the Employer the right to pro-rate that allowance. While the parties do tie some entitlements to hours worked (see Article 39.03, 32.02 and 18.01 (a)), they have not done this with the Uniform Allowance. Restrictions or reductions to compensation entitlements must be strictly indicated in the Collective Agreement. If no restrictive language is found, it can only be concluded that no reductions were intended; see Federated Co-operatives Ltd. and Miscellaneous Employees Teamsters, Local 987, supra. There is nothing in this Collective Agreement that supports the Employer’s practice of reducing or pro-rating the Uniform Allowance. [27] Employer counsel submitted that this dispute is not about “prorating”. Rather it is about entitlement of employees to merit increases. He submitted that article 45.1 is clear that merit increases are “for employees not at the maximum of their salary range”. These employees did not meet that criterion until October 1, 2013, and therefore, were not entitled to merit increases for any period prior to that date. - 10 - [28] Whether one labels the dispute as one about entitlement or prorating is of no significance or assistance. The issue is whether or not employees must be below the maximum of their salary range for the full twelve month period, in order to be entitled to merit pay for the twelve month work cycle contemplated in article 45.1.1. The Board finds that the manner in which the parties have crafted language in relation to merit increases, as compared to pay for performance is very revealing of their intention. Article 45.2 stipulates that pay for performance is for employees “who are at the maximum of their salary range”. The corresponding provision for merit increases, Article 45.1 states that merit increases are for employees “who are not at the maximum of their salary range”. It is apparent that the preambles are worded identically, except that the former speaks of employees “at” their maximums, while the latter refers to employees “not at” their maximums. [29] Then the parties deal with merit increases in articles 45.1.1 to 45.1.3, and pay for performance is addressed in articles 45.2.1 to 45.2.3. In article 45.1.1 merit increases are stated to be “for a twelve month work cycle coinciding with the employee’s anniversary date”. Article 45.1.2 provides that effective April 1, 2013, a merit increase “for a twelve month work cycle coinciding with the employees anniversary date shall be processed”. [30] Article 45.2.1 provides for processing of pay for performance “based on performance for the previous fiscal year”, which it is agreed runs from April 1 to April 1. Thus it is also to be based on a twelve month period. However, the parties in the case of pay for performance have made specific provision as to what ought to happen where an employee is not at the maximum of his/her salary for the entire twelve month period. Article 45.2.6 states that an employee must have earned the maximum salary for at least twelve month to be eligible for “a full” pay for performance. The article goes on to provide that the pay for performance for an employee who has been earning the maximum for less than twelve months will be pro-rated. [31] The different treatment by the parties of the two types of payments based on performance, and set out in consecutive articles is striking. It must be deemed that the difference in language was intentional. In both concepts the entitlement is based on a twelve month period. In one, pay for performance, the parties explicitly provide that to be eligible for full payment the employee must have met the “at the maximum” condition for the full twelve month period. If not, the payment is to be prorated. In contrast, in relation to merit increases there is no condition attached that to be eligible for full payment based on the twelve month work cycle, the employee must have earned below the maximum salary for the full twelve month period. Nor is there any stipulation that the - 11 - entitlement is to be prorated or reduced in any way where the employee was below the maximum salary for less than twelve months. [32] The Board concludes that AMAPCEO’s interpretation of article 45.1.1 is much more consistent with other provisions of the collective agreement which explicitly provide for prorating of entitlements, particularly article 45.2.6. The reasonable inference is that if the parties intended that the entitlement for merit increases also ought to be reduced in proportion to the period during which an employee was not at the maximum salary, they would have stipulated that. [33] The Board concludes that the employer violated the collective agreement by limiting the merit increase entitlement to less than the twelve month work cycle provided for in article 45.1.1. The employees are, therefore, entitled to be made whole for any losses resulting from the violation. It is so ordered. [34] The Board remains seized in the event there is any disagreement in implementing its decision. Dated at Toronto, Ontario this 3rd day of March 2015. Nimal Dissanayake, Vice-Chair