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HomeMy WebLinkAboutHolt Group 01-08-24IN THE MATTER OF AN ARBITRATION BETWEEN: SENECA COLLEGE AND ONTARIO PUBLIC SERVICE EMPLOYEES UNION, LOCAL 561 AND IN THE MATTER OF A GROUP GRIEVANCE OPSEU FILE NO. 00A481 BOARD OF ARBITRATION: MAUREEN K. SALTMAN, CHAIR JACQUELINE G. CAMPBELL, COLLEGE NOMINEE PAMELA MUNT-MADILL, UNION NOMINEE APPEARANCES: FOR THE COLLEGE: CHRISTOPHER G. RIGGS FOR THE UNION: GEORGE RICHARDS INTERIM AWARD This case involves a group grievance complaining about a rule prohibiting employees from accepting gratuities (or tips) following the introduction of a policy proscribing tipping. The grievance also claims that the College improperly retained gratuities under a previous policy allowing for tipping. At the outset of the hearing, the College raised a preliminary objection to the Board's jurisdiction in this matter. By agreement of the parties, the hearing was confined to that objection. The following facts were stipulated for the purposes of deciding the preliminary objection: The College operates a facility called Eaton Hall Inn and Conference Centre ("Eaton Hall"), which provides meeting facilities, overnight accommodation and a restaurant. Although, at one time, the College offered courses in hospitality, it no longer does so, and Eaton Hall, which was once a "learning laboratory", is now a commercial operation, which generates revenue for the College. The Grievors are employed as wait staff at Eaton Hall. Until the beginning of 1999 (or thereabouts), it was the College's policy that there would be no gratuities charged or accepted at Eaton Hall. In or around February, 1999, the College changed its policy to allow for gratuities. However, there was some dispute as to the scope of that policy. The Union 2 claimed the policy was intended to apply to tips left by customers in the restaurant either in cash or added to credit cards invoices ("table tips"), and to gratuities collected by the College on contracts with groups holding functions at Eaton Hall ("function contracts"). The College, on the other hand, claimed that the policy was intended to apply only to table tips. Although the College agreed that these tips, which have been collected and placed into a special fund, are owing to employees, as of the date of the hearing, they had not been distributed. Moreover, no agreement had been reached as to how this fund, which totals approximately $11,000, was to be distributed. During the period from February, 1999 to March, 2000, the College utilised function contracts, which included the following statement: "All rates and prices quoted above are subject to applicable taxes. Gratuities are included in all applicable pricing." Nevertheless, there was never any payout of gratuities collected pursuant to function contracts and the College disputed that the policy applied to these gratuities or that they belonged to the employees. In March, 2000, the College decided to revert to its previous policy proscribing the payment or acceptance of gratuities at Eaton Hall. Pursuant to this decision, function contracts were changed to read: "Due to the educational nature of our facility, Eaton Hall does not charge or accept gratuities." Moreover, at a Union - College Committee on March 27th, employees were advised of the College's decision to revert to its previous policy respecting gratuities. Employees were further advised that, in future, table tips would be turned over to management and that employees found accepting such tips would be subject to discipline. In light of this advice, on April 7th, a group of Eaton Hall employees filed the grievance which is the subject of this arbitration. The grievance appears to encompass two separate allegations: (1) that, in the period between February, 1999 and March, 2000, when there was a policy allowing for tipping, the College failed to distribute gratuities to the employees of Eaton Hall; and (2) that, following discontinuance of the policy allowing for tipping in March, 2000, the College promulgated a rule prohibiting employees from accepting tips. With respect to both allegations, the College submitted that the Board derives its jurisdiction from the collective agreement and, as there is nothing in the agreement dealing with gratuities, the Board has no jurisdiction to deal with the matter. The Union submitted that Eaton Hall is a commercial restaurant operation; that, in such an operation, tipping is expected; that tipping is a transaction between the customer and the employee and, accordingly, is not one in respect of which the College has the right to make policy or promulgate rules. The Union further submitted that as the rule proscribing the acceptance of gratuities has disciplinary consequences, the Board has jurisdiction to determine the reasonableness of the rule without requiring employees to risk discipline by breaching the rule. 4 With respect to the policy allowing for tipping, the Union submitted that gratuities were collected in trust for the employees and that failure to transmit these gratuities to the employees constituted theft. Alternatively, the Union submitted that failure to transmit these gratuities resulted in the imposition of a financial penalty on those employees for whose benefit the gratuities were collected. The Union further submitted that, having promulgated a policy allowing for the payment of gratuities, the College is estopped from discontinuing the policy, particularly as the Union relied on this policy to its detriment and was not advised of its discontinuance until it was too late to submit a bargaining proposal that the policy be continued. In fact, there was even some suggestion that there was an agreement between the parties to pay gratuities. The College submitted, in reply, that tipping forms part of the employment relationship and is, therefore, a matter in respect of which the College can make policy and promulgate rules. The College further submitted that, although the Board has jurisdiction to determine the reasonableness of a rule with potentially disciplinary consequences (here, that an employee accepting tips would be subject to discipline), that rule is premised on a policy proscribing tipping, which is inarbitrable. With respect to the policy allowing for tipping, the College submitted that (1) the facts do not support the conclusion that a trust was created in favour of the affected employees; or (2) by retaining tips, a financial penalty was imposed upon these employees that was tantamount to discipline. It was further submitted that it was the College's decision to allow for tipping; there was no agreement between the parties with respect to the matter. Moreover, the decision to allow for tipping was taken after the last collective agreement came into effect and was withdrawn prior to the expiry of that agreement. Accordingly, there can be no claim of detrimental reliance. But even if there were detrimental reliance, the College maintained that the Union had ample opportunity to submit a bargaining proposal to continue the policy of tipping. Decision Although, in general terms, tipping is a transaction between a customer and an employee, in this case, tipping took place at Eaton Hall, a facility operated by the College, and so has some connection to the employment relationship. As such, it is a matter in respect of which the College is entitled to make policy and promulgate rules. It seems clear, however, that the Board's jurisdiction is circumscribed by the provisions of the collective agreement. In this case, there is nothing in the collective agreement dealing with the matter of tipping. Nevertheless, it has been held that a board of arbitration has jurisdiction to determine the reasonableness of a rule with disciplinary consequences without requiring an employee to risk discipline by breaching the rule: see Metropofitan Toronto (Municipafity) v. C.U.P.E. (1987), 62 O.R.(2d)636 (Div. Ct.); revd (1990), 6 69 D.L.R.(4th) 268, 74 O.R.(2d)239, 39 O.A.C. 82 (C.A.); leave to appeal to S.C.C. refused 72 D.L.R.(4th)vii, 120 N.R. 192n, 41 O.A.C 268n. In this case, the rule at issue is one which provides that employees accepting gratuities will be subject to discipline. This rule is premised on a policy which prohibits tipping. Unlike the rule, that policy does not have disciplinary consequences. Moreover, as there is no reference to tipping anywhere in the collective agreement, the Board has no jurisdiction to review the policy. With respect to the period prior to March, 2000, the Union maintained that gratuities were collected on behalf of the employees and that failure to remit these gratuities was tantamount to theft of these funds. Whether or not the Union is correct in its submission, this is also not a matter in respect of which the Board has jurisdiction. Although the College promulgated a policy allowing for tipping, to the extent that tips were improperly retained, it was not pursuant to the policy. Therefore, although there may be liability on the part of the College, it does not involve the exercise of management rights under the collective agreement in circumstances where the agreement is silent with respect to the matter. The Union further submitted that the retention of tips resulted in the imposition of a financial penalty on the affected employees. Even if the retention of funds pursuant to an arrangement outside the collective agreement could constitute a financial penalty, this does not mean that the employees were disciplined. Although some actions (such as suspensions) are, by their very nature, disciplinary, other actions must be examined both with respect to their intent and their effect. In this case, there was no indication of an intention to discipline. Moreover, there was no indication that the retention of tips has had any effect on the employees' disciplinary records. In these circumstances, there is no basis upon which to conclude that the employees were disciplined. Accordingly, the Board's jurisdiction is not invoked. Nevertheless, the College has indicated its intention to distribute table tips (but not gratuities collected under function contracts). As of the date of the hearing, however, no such distribution had been made. The Union further submitted that, having promulgated a policy allowing for the payment of gratuities, the College is estopped from discontinuing the policy. In fact, the Union suggested that the policy came about as a result of an agreement between the parties. For its part, the College disputed that there was any such agreement. In any event, there was no agreement in writing and the Board has no jurisdiction with respect to the enforcement of oral agreements. Accordingly, the matter must be decided on the basis of estoppel. Estoppel is an equitable doctrine which applies where one party to a contract (in this case, a collective agreement) has, by its words or conduct, made a representation to the other, which was intended to affect the legal relations between them and to be acted upon accordingly. VVhere the other party acts on that representation to its detriment, the party that made the representation will not be permitted to revert to its previous legal relations as if the representation had never been made: see Combe v. Combe [1951] 1 All E.R. 767 (C.A.). In this case, the Union suggested that the College was estopped from discontinuing the policy allowing for tipping. However, there is nothing in the collective agreement dealing with the matter and no indication that, by introducing the policy and allowing for its continuance for just over a year, the College intended to affect legal relations in the sense of creating an enforceable right. For instance, this is not a case in which the policy was in effect prior to the last set of negotiations and the College represented in negotiations that the practice would continue and, therefore, there was no need for the Union to put forward a proposal ensuring its continuance. Rather, the policy was introduced after the last collective agreement came into effect and was discontinued some five months prior to its expiry. Moreover, it was not demonstrated that the Union made an effort to introduce a proposal to ensure the continuance of the policy, but that it was too late in the bargaining process to do so. In these circumstances, there would seem to have been no detrimental reliance on the part of the Union (such as foregoing a bargaining opportunity), which would have prevented the College from terminating the policy on notice. Accordingly, for all of the above reasons, the Board finds that it has jurisdiction to review the rule imposing disciplinary consequences upon employees accepting tips. However, the Board has no jurisdiction with respect to the retention of tips pursuant to a previous policy under which tipping was allowed. With regard to this matter, the employees must seek their remedy elsewhere. The Board will remain seised in the event the Union wishes a determination regarding the disciplinary rule. DATED AT TORONTO, this 24th day of August, 2001. Chair "1 concur - Jacclueline G. Campbell" College Nominee "1 dissent - see dissent attached" Union Nominee DISSENT With all due respect, I disagree with the Majority's decision. I do not agree that the only aspect of the employer's actions which the Board has jurisdiction to review is the reasonableness of the employer's policy against individual employees collecting their own tips. I would have found that this Board has jurisdiction to review all aspects of Management's actions in withholding employees' tips. I disagree with the Majority's conclusion that the institution of a tipping policy during the term of a Collective Agreement is within Management's prerogative pursuant to the Management's Rights Clause. The institution of a policy which affects the compensation package of members of the Bargaining Unit during the term of a Collective Agreement is, in my view, a matter which requires the consent of the bargaining agent. Once such a change to the employees' compensation package has been made on the agreement of the parties, any difference arising with regard to the interpretation of that agreement can be enforced via Arbitration. However, even if the Majority is correct and this is a legitimate exercise of the Management's rights, I still believe a review is legitimate. Current arbitral jurisprudence suggests that an exercise of Management's rights may be reviewed by a Board of Arbitration if the exercise of those rights affects the rights of a bargaining unit member found in another provision of the Collective Agreement. Although this Collective Agreement does not contain specific language regarding tipping; the tips do constitute an aspect of the employees' compensation package. On this basis, therefore, I believe this Board has the right to review Management's actions in withholding the employees' tips. Furthermore, under the circumstances, the Union has clearly met the threshold of showing that Management has acted in bad faith and potentially illegally in retaining tips which clearly were understood by the customers to be intended for the employees and not for the utilization of the employer. I also disagree with the Majority's conclusion that the withholding of the tips cannot be understood as a disciplinary action. The withholding of this money clearly imposes a significant penalty on those employees affected. Requests were made both prior to and at the Arbitration hearing for the employer to remit these monies in which they had no legitimate business or proprietal interest. Despite this, absolutely no reasons or justifications for the employer's actions were offered. In these circumstances, it is fully justifiable to impute to the employer a disciplinary motive. Therefore, I believe the Board has jurisdiction to review Management's actions on the basis of assessing the justness of these disciplinary sanctions. Finally, I believe it is both counter-intuitive and contrary to good industrial relations practice to compel employees in an organized workplace to seek redress for compensation owing via the Civil Courts. In a collective bargaining situation, employees do not have the right to enter into individual contracts with their employers about the terms and conditions of their employment. Those rights must be established through the collective bargaining process. It is within the employment context that the rights of these employees to the tip money arises and, in a collective bargaining relationship, an Arbitrator, rather than a Civil Court, should deal with these matters. In conclusion, I would have found that this Board has jurisdiction to review all aspects of Management's actions in withholding the employees' gratuities. CHAIR'S ADDENDUM Although the dissent suggests that the introduction of a policy allowing for tipping requires the consent of the Bargaining Agent, there was no evidence of an agreement between the parties, which the Board has jurisdiction to enforce. In any event, the grievance does not complain about the introduction, but rather about the discontinuance, of the policy. Moreover, although the dissent makes reference to bad faith and potential illegality in relation to the retention of tips, in order for the Board to assume jurisdiction, it must be established that the dispute comes within the ambit of the collective agreement. As indicated previously, in this case, the agreement makes no reference to tipping. Maureen K. 8altman