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HomeMy WebLinkAbout1989-1478.Gibson.00-10-18ONTARIO EMPLOYÉS DE LA COURONNE CROWN EMPLOYEES DE L’ONTARIO GRIEVANCE COMMISSION DE SETTLEMENT RÈGLEMENT BOARD DES GRIEFS 180 DUNDAS STREET WEST, SUITE 600, TORONTO ON M5G 1Z8 TELEPHONE/TÉLEPHONE,(416) 326-1388 180, RUE DUNDAS OUEST BUREAU 600, TORONTO (ON) M5G IZ8 FACSIMILE/TELECOPIE:(416) 326-1396 GSB #1478/89 OPSEU #89E768 IN THE MATTER OF AN ARBITRATION Under THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT Before THE GRIEVANCE SETTLEMENT BOARD BETWEEN Ontario Public Service Employees Union (Paul Gibson) Grievor - and - The Crown in Right of Ontario (Ministry of Solicitor General and Correctional Services) Employer BEFORE Susan D. Kaufman Vice Chair Pamela Munt-Madill Member Jacqueline G. Campbell Member FOR THE Alick Ryder, Q.C., Counsel GRIEVOR Ryder Wright Blair & Doyle Barristers & Solicitors FOR THE Sunil Kapur, Counsel EMPLOYER McCarthy Tétrault Barristers and Solicitors June 14, 1995; August 15, 16 & 17, 1995; September 1, 1995; HEARING January 8, 1996; February 6, 1998; April 1, 1998; May 4, 1998; January 21, 2000; February 10, 2000. 2 Decision In our Interim Decision of July 28, 1999, we determined that we had jurisdiction to decide an appropriate remedy for the grievor and reserved on that determination, for the reasons stated therein. We received the Workplace Safety and Insurance Appeals Tribunal (WSIAT) Decision (No. 1052/94) pertaining to the grievor’s claim/appeal [cited in Quicklaw as [1999] O.W.S.I.A.T.D. No. 1220] after our Interim Decision had been issued. The WSIAT Decision allowed Mr. Gibson’s appeal in part, stating that it was “satisfied that the worker’s exposure to named substances in the workplace did represent a significant contributing factor in the development of a permanent respiratory impairment”. It referred Mr. Gibson back to the Workplace Safety & Insurance Board (WS&IB) for an “assessment of the degree of his entitlement to benefits for permanent impairment”. Subsequently, a Claims Adjudicator of the WS&IB advised Mr. Gibson, in writing, “a zero per cent pension is recommended for respiratory impairment”. We have considered these decisions and the further submissions of the parties given on February 10, 2000. Over ten years have passed since the grievor was unjustly dismissed. We are of the view that it is no longer appropriate for this panel to defer to the WS&IB or to the WSIAT before determining a remedy in these proceedings. Mr. Gibson was unjustly dismissed on October 20, 1989 while suffering the ill effects on his health of the poor air quality engendered by the duct cleaning in the workplace. Some time in 1991, after the Wilson panel determined that he had been unjustly dismissed, his status as employee was reconfirmed, and his claim for long term disability benefits (LTIP) was honoured by the group insurer retroactively to October 25, 1990. Thus, as a result of the wrongful dismissal, Mr. Gibson received neither his wages nor LTIP benefits from October 20, 1989 to October 25, 1990. 3 The usual remedy for unjust dismissal is reinstatement or, if reinstatement is not possible, damages in lieu of the wages the employee would have earned had s/he not been dismissed. As the grievor’s retirement date was reached on January 31, 1994, reinstatement is not possible. In seeking an appropriate remedy, the function of this Board is not to punish the employer, but rather, to address the losses incurred by the grievor as a result of the unjust dismissal. Often, the amount of compensation in such cases will not be perfect, and will not place the grievor is precisely the economic position he would have been in, but for the action or inaction of the employer. This is such a case. We are unanimously of the view that Mr. Gibson is entitled to receive, as damages for having been wrongfully dismissed on October 20, 1989, his wages as a Maintenance Mechanic 3 for the period from October 20, 1989 to October 25, 1990, as well as the Custodial Responsibility Allowance to which he would have been entitled had he not been dismissed. The evidence did not disclose that the grievor ever became sufficiently recovered from his multiple medical conditions to return to work after October 25, 1990. We are therefore unanimously of the view that the grievor’s claim for a “top- up” of the LTIP benefits he received from October 25, 1990 to January 31, 1994, to the level of the wages and Custodial Responsibility Allowance he would have earned if he had been able to work, cannot succeed and it is dismissed. The grievor claimed an adjustment to his Ontario Public Service (OPS) pension and his Canada Pension Plan (CPP) pension to reflect his full wages from October 20, 1989 to January 31, 1994, or a one-time payment to reflect his loss in this regard. While we have not awarded the grievor compensation for the period from October 25, 1990 to January 31, 1994, we acknowledge that the loss of wages and Custodial Responsibility Allowance for the period from October 20, 1989 to October 25, 1990, for which we have ordered him fully compensated, diminished his entitlement under the OPS plan and the CPP as of January 31, 1994. This loss 4 was a foreseeable consequence of the loss of wages for that period, arising from the unjust dismissal. The grievor is entitled to be compensated for it. We therefore direct to the employer to provide the grievor an adjustment to his OPS pension and CPP entitlement to reflect his receipt of full wages and Custodial Responsibility Allowance for the period from October 20, 1989 to October 25, 1990, or a one-time payment to reflect this loss. The grievor claimed interest on the amounts awarded. The employer originally asserted that any interest awarded should be subject to a deduction, owing to the delay in the employer’s receipt of the Walkinshaw report. The information with respect to when the employer received that report was ambiguous at best. In the course of cross-examining Dr. Walkinshaw, Ms. Nikolich advised the panel that she would advise us as to when she received the report. However, the panel was not informed subsequently of the date she received it. The parties agreed that Dr. Walkinshaw’s report dated February, 1994 (Ex. 1, Tab 1) is the same in content as his final report dated May 11, 1994. Supt. Fajertag said that he received the report from Mr. Nikolich in early June, 1995. The evidence did not establish a reason for the delay in Supt. Fajertag receiving the report Accordingly, in all the circumstances, we are unable which can be attributed to the union. to conclude that the employer should be allowed a deduction against any interest owing on compensation. In view of the approximately ten years that has passed since the grievor experienced the losses for which he seeks compensation, we conclude that the “rough and ready” approach to the calculation of interest in Hallowell House Ltd. and S.E.I.U., Loc. 183, [1980] O.L.R.B. Rep. Jan. 35 (Picher) is unsuitable to the circumstances of this case. th In Canadian Broadcasting Corp. and N.R.P.A. (1995), 45 L.A.C. (4) 444 (Burkett), payment had not been made from “March 26, 1989 to April … 1993”, a period of 4 years. Compound interest, as opposed to annual interest was awarded, for the following reasons: 5 I start by confirming that I am not acting under nor bound by the Courts of Justice Act. I take my jurisdiction from the collective agreement and from the Canada Labour Code, R.S.C. 1985, c. L-2. In this regard I have a remedial power to respond to any breach of the collective agreement with the objective of making the aggrieved party/person whole. Collective agreements, which contain freely negotiated terms and conditions of employment, are the underpinning of the statutorily sanctioned system of labour relations in this jurisdiction. It is only by providing full and effective remedies to breaches of a collective agreement that this system of labour relations can be made to function as parliament intended. It is for this reason that an aggrieved party/person is compensated for any losses occasioned by a breach of a collective agreement and, in the more recent past, has received interest on the compensation owing. In Re Canada Post Corp. and C.U.P.W. (retroactivity implementation), November 19, 1992 (Burkett), I discussed the awarding of interest in the following terms: The requirement to pay interest is not triggered by employer recalcitrance. Rather it is triggered by the remedial objective of making the aggrieved party whole. The corporation has had the use of this money from the date as of which it was required to be paid to the aggrieved employees and, conversely, these employees have suffered the loss of this money from the date as of which it was required to have been paid. The difficulties posed in interpreting the collective agreement, while giving rise to the issues in dispute, do not in some way lessen the effect of a finding of a breach nor should the interpretative difficulties cause an arbitrator to do other than attempt to make the aggrieved party whole. It is not open to the party that has breached the collective agreement to argue that even though it has been found to have violated the collective agreement the grievors should not be made whole because the collective agreement was difficult to interpret or apply. The objective must always be to make the aggrieved party/person whole regardless of whether or not the breach can be characterized as a breach of trust or otherwise egregious. Against this backdrop, I turn to the question of whether the interest in this case, where payment was not made for a period of years, should be simple interest or compound interest. In this regard I am drawn to the analysis of Lord Denning M.R. in Wallersteiner v. Moir (No. 2), [1975] 1 All E.R. 849 (as referred to in Brock v. Cole, supra). The learned judge reasoned as follows [at p. 856]: … in equity interest is awarded whenever a wrongdoer deprives a company of money which it needs for use in its business. It is plain that the company should be compensated for the loss thereby occasioned to 6 it. Mere replacement of the money --- years later --- is by no means adequate compensation, especially in the days of inflation. The company should be compensated by the award of interest … But the question arises: should it be simple interest or compound interest? On general principles I think it should be presumed that the company (had it not been deprived of the money) would have made the most beneficial use open to it … Alternatively, it should be presumed that the wrongdoer made the most beneficial use of it. But, whichever it is, in order to give adequate compensation, the money should be replaced at interest with yearly rests i.e. compound interest. I can see no reason why I should not apply the same reasoning. The corporation breached the collective agreement which, even assuming that it was unaware at the time, had the effect of depriving the grievors of the payments required under their respective contracts. … Applying the rationale of Lord Denning M.R. in Wallersteiner, supra, to the objective of making the grievor(s) whole I am compelled to clarify my initial award to the extent of directing that compound interest be paid on the amount owing … We find the above reasoning compelling and applicable to the circumstances of this case, where the delay in compensating the grievor has been much longer. The grievor has been entitled to compensation for his loss commencing in October, 1989 and the employer has had the benefit of those amounts since then, a period of over 10 years. Compounding the interest payable to the grievor will more closely approximate making the grievor “whole” in these circumstances than the method of calculation used in Hallowell House, supra. We agree with the union’s position that the rate of interest applicable to the amounts owing to the grievor is the 1989 annual average of 13.5 per cent under the Courts of Justice Act, and direct the employer to pay interest at that rate, compounded annually, from October 20, 1989, on all amounts awarded in lieu of compensation to the date of payment. As agreed by the parties, following the principle in Grinius, 1495/89, the grievor is entitled to be compensated by the employer for any additional income taxes imposed on him as a result of receiving a lump sum in lieu of salary-type benefits in the year of receipt . 7 At page 14 in Grinius, supra, Arbitrator Fisher stated “… any such payment in itself will be taxable income”, and that payment must be grossed up by the employer, so that the total amount is sufficient to compensate the grievor for any tax differential arising from payment of a lump sum. If the amendments to the Income Tax Act and regulations alluded to by the parties avoid imposing upon the grievor the tax differential for which we have directed the employer to compensate the grievor, the employer will of course not be required to compensate the grievor for an expense which he does not incur. The balance of the grievor’s claims are dismissed. In summary, then, we have awarded the following, flowing from the unjust dismissal of the grievor on October 20, 1989: 1. The employer is directed to pay the grievor his wages as a Maintenance Mechanic 3 for the period from October 20, 1989 to October 25, 1990, and the Custodial Responsibility Allowance to which he would have been entitled for that period had he not been dismissed. 2. The grievor’s claim for a “top-up” of the LTD benefits he received from October 25, 1990 to January 31, 1994, to the level of the wages and Custodial Responsibility Allowance he would have earned if he had been able to work, is dismissed. 3. The employer is directed to provide the grievor an adjustment to his OPS pension and CPP entitlement to reflect his receipt of full wages and Custodial Responsibility Allowance for the period from October 20, 1989 to October 25, 1990, or a one-time payment to reflect this loss. 4. We direct the employer to pay interest at the rate of 13.5%, compounded annually, from October 20, 1989, on all amounts awarded in lieu of compensation to the date of payment and from January 31, 1994 on all 8 amounts payable for the adjustment of his OPS pension and CPP entitlement, to the date of payment. 5. Following the principle in Grinius, 1495/89, the employer is directed to compensate the grievor for any additional income taxes imposed on him (if any) as a result of receiving a lump sum in lieu of salary-type benefits in the year of receipt . we direct that the amount payable pursuant to paragraph 1 In addition to the foregoing, and the interest payable thereon pursuant to paragraph 4 be paid to the grievor within two months of the date of issuance of this Decision. We direct that the amount payable pursuant to paragraph 3 of this Decision be determined and the interest payable thereon pursuant to paragraph 4 of this Decision be paid to the grievor within four months of the date of issuance of this Decision. We direct that the amount (if any) payable pursuant to paragraph 5 be determined within 12 months of the date of issuance of this Decision, and paid within two months of the date of determination or within 12 months of the date of issuance of this Decision, whichever is earlier, failing which the employer is directed to pay interest on the amount at the rate of 13.5% per year. Further, in the event that the grievor ultimately receives compensation from WS&IB, the parties may seek the further assistance of this panel as to whether the employer is entitled to any recovery from same, if they are unable to agree. The panel will remain seised regarding the implementation of this Decision. In conclusion, we note that this has been an unusually difficult case, the various hearings of which took place over a period of 10 years before differently composed panels by various counsel. The issues have been numerous and complex and the evidence and submissions reflected that complexity. It must be acknowledged that this case has been a trying and 9 frustrating experience for the grievor, and we trust that the parties will implement this decision at the earliest possible date. We congratulate counsel on their thorough and always professional presentations and thank both counsel and the grievor for their patience in awaiting this Decision. th Dated at Toronto, this 18 day of October , 2000. Susan D. Kaufman, Vice-Chair. I concur Pamela Munt-Madill, Member I concur Jacqueline G. Campbell, Member