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HomeMy WebLinkAbout1992-0294.Kerr.93-11-23~' - __ ONTARIO EMPLOYI~S DE LA COURONNE CROWN EMPLOYEES DE L 'ONTARIO ~ - GRIEVANCE 'C,OMMISSION DE 'SETTLEMENT REGLEMENT- BOARD DES GRIEFS 180 DUNDAS STREET WEST, SUITE2100, TORONTO, ONTARIO. M5G 1Z8 TELEPHONE/TELEPHONE: (416) 326-1388 180. RUE DUNDAS OUEST. BUREAU 2100, TORONTO (ONTARIO). M5G 1Z8 ' FACStMILE/T~L~COPIE : {416) 326-1396 294/92, 295/92 IN THE MATTER OF AN ARBITRATION, Under · THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT Before THE GRIEVANCE SETTLEMENT BOARD BETWEEN OPSEU (Kerr) Grievor - and - The Crown in Right of Ontario (Ministry of Correctional Services) Employer BEFORE B. Kirkwood. Vice-Chairperson P. Klym Member M. O'Toole Member FOR THE A. Ryder GRIEVOR Counsel Ryder, Whitaker, Wright & Chapman Barristers & Solicitors FOR THE D. Strang EMPLOYER Counsel Legal Services Branch Management Board Secretariat HE~RING September 29, 1993 t · Page ~2 DECISION The facts are not in dispute. The only issue between the parties is what interest rate is to be applied to the grievor's settlement. The grievor was employed at Birtch Correctional Centre as a Correctional Officer. He then changed the nature of his employment at the institution to work in maintenance. Although the grievor Was .no longer a Correctional Officer, he was required to -take custody of inmates and therefore was entitled to a Custodial Responsibility AlloWance ("CRA") which was added to .his salarY. On January 29, 1985, while he was employed, he went on LTIP. While the grievor was on LTIP, the employer was obliged to make a pension contribution based 'upon 'the grievor's salary. Be%ween January 29, 1985 and April 30, 1992, the employer based its contribution on that portion of the grievor's salary that did not include ~the CRA. The grievor ~grieved on March 4,. 1992, claiming that the employer.'s contribution ought to have been based on his salary and the CRA. The parties resolved the issue in favour of the grievor and entered into Minutes of Settlement. Both parties agreed in the Minutes of Settlement, that the interest, rate is to be determined according to the formula used in the Service Employees' International Union, Local 183, and Hallowell House Limited January,21. 1980, (P. Picher) ("Hall0well House") award. The Minutes of Settlement state: 5. The employer shall pay the grievor Harold Kerr interest to be calculated according to the formula set out in the Ontario LabOur Relations Board decision Hallowell House on the monies paid under paragraph 4. above.- Page 3 Paragraphs 33 to 36 of the Hallowell House decision set out the process that the Board applied in calculating the interest rate. The decision states: 33. Considering all needs, the Board concludes that one of the rough and ready approaches highlighted in Jefford v. Gee is most suitable. For its' ease of calculation, flexibility and basic accuracy, therefore, the Board has concluded that a calculation of interest on the Board's monetary awards should be carried out as follows: firstly, taking into account all factors, including the duty to mitigate, assess the wage portion of. the compensation award; secondly, divide it by half; lastly, apply the appropriate annual interest rate pro-rated to ..reflect the proportion of the year represented by the compensation'award. 34. Regarding the rate of interest to be applied, the Board, consistent with the general approach taken in section 38(3)(a) of The Judicature-Act, has determined that the annual interest rate should be'the'prime rate as determined and published by the Bank of Canada in the Bank. of Canada-Review for the month 'in which the complaint was filed with the Board.' This'rate. will be available upon request through the Board's offices and' Labour Relations OfficerS. 35. For the ~purpose of clarity, we supply the following example. The Board determines that an employee has been wrongfully discharged.. The Board's award marks four. months.from the time.of discharge.' .Over that four-month periOd the total- loss of wages, taking .into account'. mitigation, is established to be $3,000.00. ~he prime rate published in the Bank of Canada Review.during the' month the' complaint Was filed is 12 per cent. The interest would.be calculated by dividing $3,000.00 in half and applying the 1'2 per cent annual interest rate adjusted to.a four-month Period, that is 12 per cent multiplied by 4/12ths. The resulting interest 'tHen is $1,50.0.00 multiplied 12 percent, multiplied by 4/12th or $6'0.00. Employer's counsel argues that the role of the board is to determine the'interest rate according to the Hallowell House decision and not to decide what would be the appropriate'rate if the matter was a new issue for the Board to decide. Employer's Page 4 counsel argues that according to the formula used in the Hallowell House decision, the interest rate is to be determined' by the month in which the grievance was filed. He argues that the formula was clarified by the example set out in-paragraph 35 of the decision, which example supported the employer's interpretation. Union' s counsel argues that the employer ' s interpretation ignores the meaning of "appropriate" in the phrase "apply the appropriate (my emphasis) annual interest rate prow rated to reflect the proportion of the y. ear represented by the compensation award". He argues that "appropriate" will not in all cases' be reflected by the date .on which the complaint was filed. Union's counsel argues that while the appropriate rate of interest in the Hallowe11 House decision was from the date of the filing of the grievance as the grievance-would have been filed shortly after the dismissal and therefore-reflected the period of damages, in the ca~e before us, the damages commenced welI before the filing of {he grievance and-therefore the appropriate interest rate should be the average interest rate for the period of compensation. This interpretation~ he argues, is consistent with purpose of interest, which is to make the aggrieved person whole. Accordingly, Union's counsel argues that the "appropriate" interest rate in this case is the average interest rate as determined by the Bank of Canada in the Bank of Canada Review pursuant to the Courts of Justice Act, formerly The Judicature Act, for the period from January 29, 1985 to April 30, 1992, the period of compensation. Union's counsel claims that '11% is the applicable rate and the Employer's counsel claims 6.7% is 'the applicable rate. Neither cOunsel considered the accuracy of the specific percentage relied upon by other counsel, but argued over the principle to be applied. Page 5 . We are not being 'asked to determine the approPriate interest rate in the circumstances of this ·case, ~but rather we are being .asked to interpret the-Hallowell HouSe deCision as required bY the Minutes .of Settlement entered into by the parties-, The Hallowell House decision was a wrongful dismissal action in which the BOard fOund that the .employer wrongfully dismissed the complainant for anti-union animus. As tPart of the remedy the BOard awarded the complainant .her lost wages and benefits and interest. Vige-chairperSon Picher on behalf of the Board,. recogniSed that awarding interest.on lost. wages was'an attempt to make the aggrieved person whole and to compensate that person for the loss of use of the money.. However, she recogniSed that there is more .than'one way of calculating .interest and some ways would more accurately make an aggrieved person whole. After balancing some of the.more accurate ways of calculating interest 'against the need of parties to have a method which was easily understood and readily administered, the Board Set out the formula · for calculating interest in paragraphs 33 to 35. There are seVeral underlyingpremises upon' which vice~ · Chairperson.Picher relies upon .in making .·her decision which · <assists us in interpreting and applying the.decision. The first is ~hat there is nothing.in the award that leads us to interpret the award to find that different itypes of claims were to be treated differently. On the cohtrary, the method of calculating interest set out in the formula was to be 'applicable not only to the complainant's case, but t° all c°mplaintspreceding before the Ontario Labour ·Relations Board. 'The formula was to apply t° claims covering both'long and short periods.of time and was for general application and therefore was· to be applied to all kinds of claims. ~ Secondly, to maximize the benefits to the claimants, and to minimize the cOsts they would otherwise encounter vice' Page 6 chairperson Picher set out the formula, and gave an example how the formula was to be applied. The formula, that the Vice-chair used .was not a perfect solution, as she concludes that it is a "rough and ready" approach. Instead of choosing the most accurate reflection of the total damages encountered by a complainant, she selected a method which was "basically accurate", easily understood, and readily administered. Finally, as Vice-Chairperson Picher was seeking to provide a formula Which would not only assist the complainant before the board but to assist other parties coming before the Board, she could not .set an' interest rate that would always be applicable, as even bank rates vary. We interpret "appropriate" as referred to by the Union to refer to and mean the particular interest rate that is applicable to each case that would vary,' depending upon the time the complaint was filed. The appropriateness of the rate depends upon the particular time the grievance is filed. To-construe -appropriate" as fitting or correct or as a more accurate reflection of damages in the context of each complaint, which would _be the affect of the Union's interpretation, would lead tO'parties incurring further costs in resolving what they mutually considered the "appropriate" method and rate in the context of the facts-of eaCh particular case. The acceptance of the Union's interpretation would defeat the purpose of the formula, which was to provide a clear and concise direction to parties in calculating interest, while recognising that the result may not be the most accurate reflection of. make an aggrieved person whole. We cannot interpret the Hallowell House .decision and "appropriate" in the manner suggested by the Union, as we do not find any support for the Union's interpretation in the Hallow~ll HOuse decision. To accept the Union's interpretation of the page 7 Hallowell House decision, would also require us to ignore part of the definition of the annual interest rate as set out. in paragraph 34.- The Board defined the annual inferest rate as the ."prime rate. o.fOr the month in which the complaint was filed.." In summary, the issue before us was not to determine what rate,.of interest would make the griever whole, or what we might have determined had the issue been before us, but to apply the formula as set out in paragraphs 33 to 35 of' the Hallowell House decision. We take this formula to 'be based upon the prime rate as determined by the Bank of Canada and published in the Bank of Canada Review for the month in'which the grievance was filed -and not the average-rate of interest for the period of compensation. Therefore this grievance is dismissed, Dated at North York, this 23 day of NOvember, 1993o Belinda A. Kirkwood, Vice-Chairperson P~te~ Ki~~~ Member Michael O'Toole, Member