Loading...
HomeMy WebLinkAbout2016-0619.Association.17-04-10 Decision Crown 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#2016-0619 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 (Association) Association - and - The Crown in Right of Ontario (Treasury Board Secretariat) Employer BEFORE Nimal Dissanayake Vice-Chair FOR THE ASSOCIATION Steven Barrett Goldblatt Partners LLP Counsel Christine Davies Goldblatt Partners LLP Counsel FOR THE EMPLOYER Paul Meier Treasury Board Secretariat Legal Services Branch Counsel HEARING March 27, 2017 - 2 - Decision [1] The Board is seized with an Association dispute dated March 22, 2016. It pertains to the appropriate adjustment of the employees’ LTIP benefit entitlement for the calendar year 2014. On agreement, the parties also put before the Board an individual dispute dated April 16, 2015, filed by employee, Ms. Catherine Mahon-Stambula, which in substance raises the same issues as the Association dispute. While I was not asked to specifically deal with the individual grievance, the parties were hopeful that the decision on the Association grievance would lead to a resolution of that. [2] This is strictly an interpretation case. The material facts are not in dispute. Submissions were made based on those facts and documents filed. For purposes of this dispute, it suffices to note that disabled bargaining unit employees who are eligible for LTIP under the Great-West policy receive a monthly payment equal to 66 2/3 of regular wages. The evidence is that LTIP payments predate the first collective agreement between the Crown and AMAPCEO which had a term 1998 to 2001. Prior to that, effective January 1, 1972, the employer had provided for LTIP benefits with annual increases of specified amounts based on when an employee commenced receiving LTIP benefits. [3] Effective December 31, 1993, however, the employer implemented a change, whereby the LTIP was increased by up to 2% on an annual basis, based on the Ontario Consumer Price Index (“CPI”). In other words, LTIP increases were indexed to the increase in the Ontario CPI up to a maximum of 2%. This regime of indexing LTIP increases to the CPI was in effect at the time the first collective agreement between these parties was concluded. It included article 36.2 which read: Effective December 31, 1993 and annually thereafter, the total monthly payment of LTIP under the Plan shall be increased by up to 2% based on the average annual increase in the Ontario Consumer Price Index (CPI) as published by Statistics Canada each January. - 3 - [4] Article 36.2 in that form continued in successive collective agreements bearing terms of April 21, 2001 to March 31, 2004; April, 2004 to March 31, 2006; and the Memorandum of Agreement 2007 to 2009. [5] The next significant change occurred in the collective agreement April 1, 2009 to March 31, 2012. A second paragraph was added to Article 36.2. At this point Article 36.2 read: 36.2 A. Effective December 31, 1993 and annually thereafter, the total monthly payment of LTIP under the Plan shall be increased by up to 2% based on the average annual increase in the Ontario Consumer Price Index (CP) as published by Statistics Canada each January. B. Effective January, 2010 and annually thereafter, the total monthly payment of LTIP under the Plan shall be increased by up to 2.5% based on the average annual increase in the Ontario Consumer Price Index (CPI) as published by Statistics Canada each January. (Letters A and B added to paragraphs for ease of reference) [6] Article 36.2 with these two paragraphs was repeated in the April 1, 2012 to March 31, 2014 collective agreement. However, in the April 1, 2014 to March 31, 2018 collective agreement, (current collective agreement) Article 36.2 was amended again to read as follows: 36.2 A. Effective January 1, 2010 until December 31, 2014 the total monthly payment of LTIP under the Plan shall be increased by up to 2.5% based on the average annual increase in the Ontario Consumer Price Index (CPI) as published by Statistics Canada each January. B. Effective January 1, 2015, and thereafter, the total monthly LTIP benefit payment under the plan shall be adjusted by an increase equal to those provided for under Article 44. (Letters A and B added to paragraphs for ease of reference) [7] It is apparent that in the current collective agreement, the former para. B is continued as para. A, and a new para. B is added. The significant change is that “effective January 1, 2015 and thereafter”, LTIP payments are no longer to be indexed to the annual increase in the Ontario CPI. Instead, it is to be indexed to - 4 - the wage increase in the collective agreement for active employees as set out in Article 44. [8] The proper interpretation and application of the LTIP increase for 2014 under Article 36.2 of the current collective agreement is in dispute between the parties. It is AMAPCEO’s position that for 2014 the LTIP increase should continue to be based on the increase in the Ontario CPI. That increase for 2014, according to AMAPCEO, should have been 2.4% based on the increase in the CPI for 2014 over 2013. This 2.4% increase would be reflected only in the 2015 LTIP benefit payments because the CPI data for 2014 would not be available from Statistics Canada until mid-January 2015. The employer`s position is that the LTIP increase for 2014 is indexed to the wage increase for active employees under Article 44, which it says was zero percent. Association Submissions [9] Counsel for AMAPCEO submitted that para. A of Article 36.2 explicitly provides for an increase by up to 2.5% “based on the average annual increase in the Ontario Consumer Price Index as published by Statistics Canada each January”. It is clear that the data on increase in the CPI published by Statistics Canada “each January” has to relate to the previous year. The data published in January 2015, would reflect the increase in the CPI in 2014 over 2013. Once the CPI increase is known in January 2015, an increase based on that, up to a maximum of 2.5%, is to be applied to the monthly LTIP payments made to employees in 2015. [10] Counsel reviewed the manner in which LTIP increases were applied by the employer since 1993, when LTIP increases were indexed to the CPI. He pointed out that each January, the employer obtained data from Statistics Canada on the increase in the CPI for the previous calendar year. Based on that CPI increase, and subject to the maximum specified in the collective agreement, an increase in the LTIP payment was implemented for each month in the ensuing year. For example, in January 2014 Statistics Canada had published that in the year 2013 - 5 - the CPI had increased by 1% over the year 2012. Based on that information, the LTIP entitlement for each month in the year 2013 was increased by 1%. Counsel submitted that this practice was in compliance with para. A of article 36.2, and had been followed by the employer consistently. Counsel submitted that it is critical to remember that the data published “each January” sets out the average CPI increase in the previous year. However, because the information about that CPI increase is not available until “next January”, the resulting increase in the LTIP for a calendar year can only be implemented in the following year. [11] Counsel emphasized that para. A of Article 36.2 is explicit and clear that indexing to the CPI, up to a maximum of 2.5% is to be in place effective January 1, 2010 “until December 31, 2014”. The new regime of indexing LTIP increases to wage increases under para. B is explicitly stated to be “Effective January 1, 2015”. He conceded that therefore, in calculating the LTIP increase for 2015, the CPI would be irrelevant. The increase would be based on the wage increase for active employees under Article 44. However, that new regime of indexing LTIP increases to wage increases would have no application for the year 2014. Until December 31, 2014, employees are entitled to LTIP increases based on the CPI increase. Then “Effective” January 1, 2015, on a go forward basis, LTIP increases would be tied to wage increases. [12] AMAPCEO counsel referred to the Memorandum of Settlement dated August 3, 2014, which resulted in the current collective agreement. The changes made to the LTIP language were illustrated in the MOS as follows: Effective December 31, 1993 and annually thereafter, the total monthly payment of LTIP under the Plan shall be increased by up to 2% based on the average annual increase in the Ontario Consumer Price Index (CPI) as published by Statistics Canada each January. Effective January 1, 2010 until December 31, 2014 and annually hereafter the total monthly payment of LTIP under the Plan shall be increased by up to 2.5% based on the average annual increase in the Ontario Consumer Price Index (CPI) as published by Statistics Canada each January. - 6 - Effective January 2015, and thereafter, the total monthly LTIP benefit payment under the plan shall be adjusted by an increase equal to those provided for under Article 44. (Strike outs and bold original) The words shown to be struck out were deleted. Language added is shown in bold. Counsel pointed out that the parties completely deleted para. A of the previous collective agreement. The former para. B was amended by deleting the words “and annually thereafter”, and adding the words “until December 31, 2014”. The amended second paragraph became the first paragraph (designated as “A” in this decision) in the new collective agreement, and a new second paragraph (designated as “B” in this decision) was added. That new paragraph reads, “Effective January 1, 2015, and thereafter the total monthly LTIP benefit payment under the plan shall be adjusted by an increase equal to those provided for under Article 44”. (emphasis by counsel) [13] Counsel pointed out that the parties deleted the former para. A because it was spent, and therefore redundant. He argued that if the employer is correct that CPI indexing did not apply for the year 2014, the former para. B also would have been redundant, and the parties would have deleted it also. However, they did not do so. To the contrary they retained that paragraph with amendments. They deleted the words, “and annually thereafter” because the CPI indexing was to continue only until a specific date, i.e. December 31, 2014 and would not recur annually. They explicitly provided the end date for CPI indexing by adding the words “until December 31, 2014”. Counsel submitted that the explicit provision in the new para. A of the collective agreement that monthly LTIP payments will be increased based on CPI indexing “Effective January 1, 2010 until December 31, 2014” could not be any clearer. The employer’s interpretation gives no meaning to that language, and instead ignores that language altogether. - 7 - Employer Submissions [14] Employer counsel submitted that Article 36.2 of the current collective agreement provides for two regimes for increases in LTIP. The old regime is dealt with in para. A, and is stated to be effective from January 1, 2010 to December 21, 2014. Under this old regime, LTIP increases are based on increases in the CPI. Para. B of Article 36.2 provides for a new regime, wherein LTIP increases are tied, not to the CPI, but to wage increases under Article 44 of the collective agreement. He argued that para. B is clear that “Effective January 1, 2015 and thereafter” LTIP increases are based on wage increases. This clear language must be given effects to. After January 1, 2015, LTIP increases are no longer to be based on increases in the CPI. Counsel argued that the Association’s claim that 2015 monthly LTIP payments include an increase based on CPI indexing ignores the explicit language in para. B. [15] Employer counsel relied on the following authorities: Lanosh-Medad Family Trust (Trustee of) v. Versatech, (1999) Carswell Ont 3147 (Ont. Superior Ct. of Justice) (“Re Lanosh-Medad”); Re Lee, GSB 2013-2311 (Herlich); Re AMAPCEO and Treasury Board Secretariat, GSB 2015-1394 (Dissanayake). [16] In Re Lanosh-Medad (supra), the court was required to interpret, inter alia, the word “effective” in the exchangeable share valuation provision of an Exchange Agreement. The court reviewed the definitions of the word “effective” in several dictionaries. Re Lee (supra) was cited for the proposition that the parties may, by clear and specific agreement, make modifications to a benefits policy. In AMAPCEO and TBS (supra), the Board at para. 14, cited with approval, an excerpt from the award in Re Ontario Power Generation as follows: [14] It is trite to state that the fundamental object in construing the terms of a collective agreement is to discover the intention of the parties who agreed to it. The parties referred to the summary of the cannons of collective agreement interpretation arbitrators - 8 - utilize in achieving that objective, set out in Re Ontario Power Generation 2012 Carswell Ont. 16996 (Surdykowski) as follows: 17. The fundamental rule of collective agreement interpretation is that the words used must be given their plain and ordinary meaning unless it is clear from the structure of the provision read in context that a different or special meaning is intended, or the plain and ordinary meaning result would be illegal or absurd. All words must be given meaning, different words are presumed to have different meanings and specific provisions prevail over general provisions. Both the words that are there and the words that are not there are significant. 18. Although as a matter of general principle collective agreements must be interpreted in a manner which preserves the spirit and intent of the collective agreement, it is the words that the parties have agreed to use to express their intention which are of primary importance. The parties to a collective agreement are presumed to say what they mean and mean what they say. Allegedly missing words or terms cannot be implied under the guise of interpretation unless it is absolutely essential to the clear mutually intended operation of the collective agreement, or to make the collective agreement consistent with legislation which the parties cannot contract out of. Although much has been written about purpose, fairness, internal anomalies, administrative cost or feasibility, and what “should be”, such considerations only come into play when the language is truly ambiguous and the arbitrator must apply established labour relations principles in order to choose between two or more equally plausible interpretations. The rights arbitrator’s task is to determine what the collective agreement provides or requires, not what he or either party thinks it should say. If the language is sufficiently clear it must be applied as written regardless of any associated costs or administrative difficulties, or any apparent fairness of the effect on either party or the bargaining unit employees. … 20. More to the point is the decision in Golden Giant Mine [[2004] O.L.A.A. No. 600 (Ont. Arb.)] which is representative of the line of arbitral authority which stands for the proposition that entitlement to a monetary benefit must be derived from clear collective agreement language, and that such an entitlement cannot be inferred or implied. … - 9 - Association Reply Submissions [17] Counsel submitted that the employer has not provided any explanation for the existence of the explicit language that “Effective January 1, 2010 until December 31, 2014”, LTIP increases are to be based on CPI increases. Established cannons of interpretation require that those explicit words must be given some meaning. The employer has not suggested what other meaning is conveyed by those words. The employer simply ignores those words. [18] Counsel argued that AMAPCEO on the other hand has not attempted to ignore or read out the language in para. B of article 36.2 that “Effective January 1, 2015 and thereafter” LTIP increases would be based on wage increases in article 44. It accepts that as a result of that language, calculation of LTIP increases for 2015 would be based on wage increases. Para. B means that CPI indexing does not continue beyond December 31, 2014. Counsel submitted that its interpretation, which gives meaning to both paragraphs of article 36.2 should be preferred over the employer’s interpretation, which completely ignores, and gives no meaning, to the clear language in para. A of the article. Conclusion [19] The cannons of interpretation in Re AMAPCEO and TBS (supra) and the proposition for which Re Lee (supra) was cited are not in dispute. The dictionary definitions of “effective” in Re Lanosh-Medad (supra) are of no assistance or relevance because as the Court states at para. 45, the parties are free to agree upon and specify in the agreement an effective date “other than the one which would normally apply”. In Article 36.2 the parties have provided specific effective dates for CPI indexing and for indexing to wage increases. The dispute is about the application of these specified effective dates in the transition from the CPI indexing regime to the wage indexing regime. [20] I have reviewed the relevant cannons of interpretation referred to by the parties. The most fundamental rule in interpreting a collective agreement is that the object must be to discover the intention of the parties. It is also well established - 10 - that words, phrases or clauses in a provision must not be read in isolation. To the contrary, they must be read in the context of the whole provision, and indeed the whole agreement. Moreover, provisions must be read together. (Dufferin Peel Catholic District School Board, (2012), 226 L.A.C. (4th) 283 (Davie) at p. 308). [21] The employer in this case focuses solely on the words in para. B to the effect “Effective January 1, 2015 and thereafter” LTIP increases would be based on wage increases. If paragraph B was the only provision relating to LTIP increases, that would have been appropriate. However, Article 36.2 consists of two paragraphs. Paragraph B ought not be read in isolation. Employer counsel offered no explanation for the existence of the language in para A to the effect, “Effective January 1, 2010 until December 31, 2014” LTIP increases will be based on increase in the CPI. Those are very clear words, and it must be presumed that the parties meant what they said. An attempt must be made to give meaning to those words, instead of treating them as merely superfluous verbiage. [22] In the Board’s view, the two paragraphs in Article 36.2 can easily be read harmoniously with each other to ascertain the intention of the parties. As amply demonstrated by the undisputed facts, the CPI data for a particular calendar year is available to the employer only in January of the following year. Therefore, any increase for that calendar year based on CPI data may only be implemented on the payments in the year following. The evidence is that this is exactly how LTIP increases were implemented year after year preceding the change in the current collective agreement from indexing to CPI increases to indexing to wage increases. AMAPCEO’s interpretation gives meaning to both paragraphs of Article 36.2. As stipulated in para. A, LTIP increases based on CPI increase continued “until December 31, 2014”. Then as stipulated in para B, “effective January 1, 2015”, the new indexing system comes into operation, when calculating the LTIP increase for the 2015 calendar year. - 11 - [23] The Board acknowledges the arbitral principle that clear language is required to support a claim for a monetary benefit. In the Board’s view, there is no ambiguity in Article 36.2. Both paragraphs have clear language and can be read harmoniously with each other, and consistently with the manner in which CPI based increases have always been understood and applied by the parties. [24] The Board therefore concludes that LTIP payments in the year 2015 must be based on the CPI increase for 2014 that would have been published in January of 2015. The Association grievance is upheld. The Board remains seized in the event the parties have any disagreement in the implementation of this decision. Dated at Toronto, Ontario this 10th day of April 2017. Nimal Dissanayake, Vice-Chair