HomeMy WebLinkAbout1988-0188.Massey.95-12-18~,o~ .; ~;~ '~'~"'r: :~ .?:;::-:?~'i" ;- ONTARIO EMPL 0 Y~-S DE LA COURONNE
~ :,,,., =,.. : ,.~.~.~::..,. ?.,. CROWN EMPLOYEE$ DEL'ONTARIO
'~ GRIEVANCE C,OMMISSION DE
~ l SETTLEMENT REGLEMENT
BOARD DES GRIEFS
180 DUNDAS STREET WEST, SUITE 27~, TORONTO, ONTAR~. MSG ~Z8 TE~PHONE/T~L~PHONE: .(476) 326- ~38~
t80, RUE DUNDAS OUEST, ~UREAU 21~, TORONTO (ONTARIO). MSG 1Z8 FAC$1M!~E/T~L~COP~E .' (4~6) 326-~9~
· GSB # 188/88
OPSEU # 88A922 '~
" IN .THE 'MATTER OF AN ARBITRATION
Under
T~E CROWN EMPLOYEES COLLECTIVE BARGAINING ACT
Before
TME GRIEVANCE SETTLEMENT BOARD '
BETWEEN
OPSEU (Massey)
Grievor
The.Crown'in Right of Ontario
(Ministry of Transportation) .~
Employer
BEFORE M. Keller Vice-Chairperson
M. Lyons Member
FOR THE G. Leeb
GRIEVOR Grievance Officer
Ontario Public Service Employees Union
FOR T~E S. Patterson
EMPLOYER Counsel
Legal services Branch
Management Board Secretariat
~EARING October 2, 1995
November 1, 1995'
DECISION
In June 1991 the parties entered into a Memorandum of Settlement in
which the employer agreed that the grievers were improperly
classified as Safety Instruction Officer 2. The employer agreed to
create a new Classification. It further agreed
"...to pay interest on the retroactive wages owed to the
grievors as a result of the reclassification from
November 1, 1986 as per the Hallowell House Limited
formula (1980) OLRB Rep. Jan. 35).
The Memorandum of Settlement was made an Order of the Board on July
10, 1991.
On October 8, 1993 the Union wrote to the Registrar of the
Grievance Settlement .Board alleging that the employer had not
properly calculated interest, seeking an arbitration hearing as
soon as possible. This panel was ultimately convened to deal with
the issue.
This dispute arises from the manner in which the employer has
calculated inter6st. Their calculation was done differently
depending on whether they were calculating interest prior to the
date the Civil Service. Commission implemented the new class
standard (April 24, 1991) or after. That date is known as' the
C.S.C. date. With respect to the pre-C.S.C, date, the employer
calculates interest on the basis of 1/2 interest (non-compounded)
on. the principle sum owed for each calendar year. According to
their calculations the amount owing is $1,781.22. They calculate
full interest' on the same amount since the C.S.C. date, or
$6,225.80.
Put another way, the employer has not accrued the money owing year
by year in its'calculation of interest.~ So, if $100 is owed for
1986 and a further $100 for 1987, it pays interest on the $100 for
1986 oniy. in 1986-but not 'in any subsequent year. Similarly the
sum of $100 owed for 1987 would attract interest in that Year only.
The union's ~calculation is based on an accrual~of ~sums owed. By
that is meant that the $100 owed in 1986 is also owed every year
thereafter until paid.- Interest is therefore paid on that sum each
year until it is~pai~. The same is true of the Principal amount
owed in 1987 and subsequent years. Their calculation Would produce
pre-C.S.C, interest of approximatel'y $8,000.
A second issue arises with respect to the affect the C.S.C. date
has on the payment of interest. Effectively, the employer does not
pay interest on money accruing from the C.S.C. date, only on money
accruing prior to it. The union says interest is owed on all
monies owed, whether pre or post C.S C. date, until the actual
implementation date.
The Board heard evidence with respect to an alleged agreement of.
the parties with respect to how interest would be Paid. The
employer adduced the evidence in support of an estoppel argument it
develOped. We do not need to deal with this issue as the date of
the alleged agreement post-dates 'the Order of the BOard in this
matter and can have no .affect on how this matter is determined by
the Board.
The union argues that the purpose. Of ordering interes~ is to put
employees in the position they would have been if they had had the
use of the money of which 'they were deprived. The employer's
formula, it submits, does not accomplish that objective.
In dealing with the pre/post C.S.C. date issue it was argued that
there is nothing magic about that date. Nothing changes until the
new rate is.actually implemented. The employer continues to have
use and ~ont~ol over the money until then.
The employer argues, first, that this Board is bound by the
decision in Anqus (203/84, September 9, 1991, Slone) which, it is
suggested determined how the Hallowell House formula must be
applied. That interpretation, it is suggested, supports the
employer's interpretation in this case.
The employer then dealt with the Hallowell House formula. It
argued, first, that the parties of their own volition have not
applied it strictly and therefore it can not be argued that it
should be strictly applied. I't is then submitted that it can't be
strictly applied because it refers to the establishment of the
interest rate from the date of filing of the grievance. Where
there are multiple griev0rs and different grievance dates it
ensures that Hallowell House can't be applied as designed.
In.dealing With the C.S.C. date, the employer agrees that there is
not magic to it, just that by usage and convention it has always
been so. If the Hallowell House formula is to be applied, the date
chosen by the union, however, doesn't apply either. The union, it
was submitted, has no right to cherry pick. The appropriate date
has to be the date of implementation as that is the only date at
which the quantum can be fixed.
In dealing with the pre/post C.S.C. date issue, we find that the
C.$.C. date has no application to the determination of interest.
The purpose of paying interest is to make the grievors whole.
Application of 'the C.S.C. date does not accomplish that and,
therefore, unless specifically provided for can't be the last day
on which interest is to be paid. That date will be determined
below. The Anqus decision referred to earlier equally' has no
application in the instant case. That decision dealt with the
question of compound interest. This decision deals with the issue
of interest accrual.
In looking at both the union's and the employer's ~interest
calculation~we note that neither is done in accordance with the
Hailowell House formula. Neither, as a resUlt, can be adopted by
the Board.
What then, can we accept?
Practice Note 13 of the Ontario Lab6ur Relations Board sets Out how
the Hallowell House formula is to be applied:
PRAt..'TI(3E NOTE NO. 1.%
$¢pt~mh.c 8, 1981).
· AWARDING OF INTE~T
I, The Board seated in R~io Shack, [1979J OL~ ~p~ D~c. 12~0 a~
page- 1255 ~ar a d~ision aw~din~ b~k-pay or compunet, tiaa in the farm of
damag~ ".,-. sho~d be ~ fully comp~m~to~ ~ possible aug.
could bear ~t~rest." .The Bo~d sub~qucndr determined in Hal~weH
-' ;[uu~e Limited, [19~] OL~ R~9. J~. 35, that i~ ntde~ to fully com~n,
sate a compl~uant or grievor Ior m~nem~ [osse~ attribUtable to a ~5ola~on
of ~e ~b~t ReN~iom ,1~, i~t~re~t w~l namely be awarde~ on ~ ..
mone~' com~emaaon ordered by the B~rd.
2. The form~a which may be used in'calculating the.interest p&vable On
a wage claim i~ .set out by the Board in the following tei'm~ in tt~Ilo'a, ell
ltou.sa Limia¢4 at page a,~:.
a... the Board had concluded that a calculation of intereat on the
Board's monetary aw~,rds should be carri~fl, out m follows:
Firstly, t'akin~ into account all L'u:tors, including )he duty to mitigate,
ms,ss the wagu portion.of the com~nsati~n award; secondly, divide it
/n haft; lmtly, apply th~ appropriat~ annual interest r-re prorated to
rdlect the proportion ale the year represented by the compensation
award."
rate ~.~ determined a.nd published by thc Baak of Camada in the Bani of
Canada R~ieul for the month in which the coml~laint wgz filed with the
Board, The Board in ttallow~ll tleu,~t Limited used th~ follo~ng a.~ an
example o~ the appl. tcdrion of the formul.'r
"The Board determines 'that an.employee has bean wrongfully
charged, Tho Board% award marks four months from ~e time of dis-
charge. Over ~gt four-mohth ~riod' the ~o~11~ of wages, tang Jato
~count mi6ga~cn, is e/mblhh~ w be $3,~,~. Th~ ~d~u~ ra~ pu~ ·
llsk, d in ~e Bank of Ca.da R~ du~ng the mo~ ~e com~l~nt
w~ filed is 12 per cent. Th~ ~r~t would ~ cEc~a~ed by dis~ng
· dj~ted m g four-mon~ ~od, ~at i~ 12 per cent m~tipli~t by
4t12~. Th~ re~l~ng interest ~en i: $1,5~.~ m~ipticd by 12 per
cent w,ltiplied by ~/12~, or $60.~."
4. Iffowever, for example, where Interest ts awarded on a non-wage
it there L~ no need to cLiwde thc lu/ilb sam in half to reflect the gradual
~c~u~ of loss ~ ,~tb w~s.
~. A copy of th~ Bani ~/Ca.~d~iew con~tn[ng the monthly Drime
rate ~ oa file ~ fl~e Board. Pa~s may ob~in :he Bask of C~
interest r~e a~fl r~aaest from ~e ~trd or I~ Labour Rela~ons Of~ce~.
6. Th~ Board in dt c~es has &~&etion E aw~dia~ inter~t. Integer
may not ~ aw~d~d, or the ra~¢ of i~i~t ~ be a~plie~ ~o &n awed may
iacrem, ed or decrca~d by the Buard~nding on the circulates ~f each
c~, However, uEeaa ~e Bo~d s~ca~y dctevmine~ otherw~e, ~terest
aw~ded by thc Bo~d h to be c~ated, Mong the ~es ~op~d ~ the
In the instant case the parties agreed, and the Board ordered that
interest be paid in accordance with that formula. So that's what
must be done. Any agreements, real or purported that the parties
might have had prior to this hearing to deviate from or amend the
formula is irrelevant to our determination. Our role is to
determine how the formula applies to the precise facts in the
instant cas~. The calculations given to us by'the parties are of
no moment unless they accurately reflect the application of the
formula.
The firSt determination to make is the period to which the formula
'will be applied. The commencement date is November 3, 1986, a date
'both parties, seem to accept. The last date to which interest
applies must be the day prior to the implementation of new rates
(i.e.) November '21, 199'3. Any other date is artificial and'
reflects neither the formula nor its purpose to pay interest on
money gr~e~°rs were denied.
We must then "assess the wage portion Of the compensation award".
That must be done as follows: determine the amount actually earned.
by an employee as Wages for the period (X). Establish the amount
the employee would have.-earned as wages during the whole of the
relevant period as. if the new wages had been in effect (Y).
Subtract X from Y. (i.e.)'The amount actually earned is deducted
from the amount that shall have been earned. That establishes the
amounts employees were deprived and on which' interest is due (Z).
That full amount is then divided by two (2).
Then, establish the rate of interest. As is~indicated in Practice
Note 13, this part of the formula may be increased or decreased by
the Board depending on the circumstances of each case. In the
instant case the Board orders that the interest be established by
averaging the prime rates of the Bank of Canada on November 3, 1986
and then each six month period thareafter.with the last prime rate
being that in effect the day prior to implementation.
The average r'ate of interest calculated in this fashion is to be
applied to the amount (Z) established above adjusted to the whole
of the period as shown in paragraph 3 of Practice Note 13 (i.e.)
multiply (Z) by the number of months from November 3, 1986 to
November 21~, 1993 divided by 12.
These calculations are to be made, .and the appropriate sums of
money are to be paid forthwith.
The Board remains seized to deal with any issue arising from this
decision.
Nepean, this ~8~ day of December, 1995. ~..~~
M.B_~.Keller, Vice-Chairperson
I concur I~.~J~-~'- _
ar~ Roberts, Member
I concur -.. {~-/.~,,-/'~'''
Mr. Michael/Lyons, Member -