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HomeMy WebLinkAbout1995-0148.Levere.03-03-13 Decision Crown Employees Commission de ~~ Grievance Settlement reglement des griefs Board des employes de la Couronne ~-,... Suite 600 Bureau 600 Ontario 180 Dundas Sl. West 180 rue Dundas Ouest Toronto Ontario M5G 1Z8 Toronto (Ontario) M5G 1Z8 Tel. (416) 326-1388 Tel. (416) 326-1388 Fax (416) 326-1396 Telec. (416) 326-1396 GSB# 0148/95 UNION# 95C469 IN THE MATTER OF AN ARBITRATION Under THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT Before THE GRIEVANCE SETTLEMENT BOARD BETWEEN Ontano PublIc ServIce Employees Umon (Levere) Grievor - and - The Crown In RIght of Ontano (Mimstry of TransportatIOn) Employer BEFORE Richard Brown Vice-Chair FOR THE UNION RobIn Gordon Gnevance Officer Ontano PublIc ServIce Employees Umon FOR THE EMPLOYER Kelly Burke Semor Counsel Management Board Secretanat HEARING March 2, 2003 2 DECISION Doug Levere was employed by the MmIstry of TransportatIOn m Ottawa as a corndor management officer from late 1987 untIl early 1989 He and a number of other employees gneved the classIficatIOn of that posItIOn On July 17, 1989, wlule the classIficatIOn gnevance was pendmg, Mr Levere was promoted to the then hIgher paymgJob ofutIhty technIcian also m Ottawa. A decIsIOn of the Gnevance Settlement Board, dated January 5, 1990, held the posItIOn of corndor management officer was Improperly classIfied. The ensumg reclassIficatIOn resulted m that Job bemg paid at a hIgher level than Mr Levere's new posItIOn ofutIhty technIcian EffectIve February 1, 1994, utIhty technIcian was m turn reclassIfied to the same pay level as corndor management officer As a result of the reclassIficatIOn of the posItIOn of corndor management officer, Mr Levere receIved a retroactIve wage mcrease for the penod commencmg January 23, 1989 and endmg when he left that Job approxImately SIX months later In tlus gnevance, dated Apn118, 1994, he contends he should have contmued to be paid accordmg to the new pay scale for corndor management officer untIl the pomt m tIme when Ius rate of pay as a utIhty technIcian caught up wIth the rate he would have receIved If he had remamed as a corndor management officer I The general prmcIples to be apphed m awardmg compensatIOn for breach of a collectIve agreement are succmctly summanzed m Brown and Beatty, Canadzan Labour Arbltratzon, at 2 1410 Thus, the basIc purpose of an award of damages IS to put the aggneved party m the same posItIOn he or she would have been m had there been no breach of the collectIve agreement ThIS general prmcIple IS subject to three basIc quahfymg factors In the first place, the loss must not be too remote, that IS, It must be "reasonably foreseeable" Secondly, the aggneved party must act reasonably to mItIgate Ius loss Fmally, the loss must be certam and not speculatIve 3 The only Issue m tlus case IS one of foreseeabIhty or remoteness The breach of contract IS the Improper classIficatIOn of the Job of corndor management officer The employer concedes the gnevor would not have changed Jobs IfhIS old Job had been properly classIfied from the outset If he had remamed as a corndor management officer, he would have been paid accordmg to the new hIgher scale for that Job after July 17, 1989 CompensatIOn m the amount of the dIfference between what he earned as a utIhty technIcian and what he would have earned as a corndor management officer would put hIm m the posItIOn he would have occupIed but for the breach However, the employer contends such compensatIOn should be denIed because the loss suffered by the gnevor IS too remote a consequence of the breach of contract F our decIsIOns of tlus board dealmg wIth remoteness or foreseeabIhty were cIted by counsel The UnIon rehes upon two decIsIOns awardmg compensatIOn OPSEU (Meeks) andMlnzstry of Natural Resources, FIle No 1429/88, decIsIOn dated February 20, 1991 (Sloan), and OPSEU (Grznzus) and Mlnzstry ofCltlzenshlp, FIle No 1495/95, decIsIOn dated July 24, 1995 (FIsher) In Meeks, the employer cancelled the gnevor's vacatIOn m vIOlatIOn of the collectIve agreement Havmg planned to harvest a hay crop on Ius fann wlule on vacatIOn, he sought compensatIOn for losses suffered as a result of the harvest bemg delayed. On the subject of remoteness, VIce-Chair Sloan wrote The basIc test for remoteness of damages was artIculated m the case of Hadley v Baxendale (1854) 9 Exch 341 (H.L) The test IS two pronged. 1 Where no specIal cIrcumstances are communIcated Would a reasonable person foresee at the tune of entenng mto the contract that loss of the type occasIOned mIght occur upon a breach? 2 Where specIal cIrcumstances are communIcated. Would a reasonable person, havmg knowledge of the special CIrcumstances eXIstmg at the tIme of the contract, foresee the type of loss suffered? 4 WhIle Hadley IS obvIOusly stIll good law, and some of the general statements made therem are qUIte helpful, one should not lose sIght of the fact that the case Itself mvolved a commercIal contract to do one thmg dehver a broken mIll shaft for repair The analogy to an employee m the Ontano Pubhc ServIce governed by a collectIve agreement negotIated by others on hIS behalf IS questIOnable It IS not fair to suggest the Umon and the Employer representatIves negotIatmg a collectIve agreement had to have specIfically contemplated tlus type of occurrence Nor m the context of the ongomg, broad employee-employer relatIOnslup must the analysIs be confined to the tune of entenng mto the agreement In our VIew, It IS proper to look to the knowledge possessed by local representatIves of the Employer at or before the tune ofbreach--I e when the gnevor's vacatIOn was demed. (pages 14 and 15) Notmg local managers knew "vacatIOns were used to augment hIS [1 e the gnevor's] hvelihood by workmg on the fann" (page 15), VIce-Chair Sloan awarded compensatIOn for loss, wIth the management nommee on the panel dIssentmg The gnevor m Grznzus was remstated by thIS board, wIth a thIrty-day suspensIOn, some years after bemg dIscharged. The back wages receIved by hun upon remstatement were taxed at a much hIgher rate than would have been apphed to the same amount of mcome spread over more than one year Concludmg the extra tax habIhty was a reasonably foreseeable consequence of the gnevor's Improper dIsmIssal, VIce-Chair FIsher wrote Although It IS certamly unusual for there to be a four year gap between the date of dIscharge and the date of remstatement, It IS qUIte reasonably foreseeable to expect that the date of dIscharge and the date of remstatement would span two calendar years, thus two tax pen ods The Issue of reasonable foreseeabIhty (or remoteness of damages as It IS sometImes called) relates not to the quantum of damages but to the head or type of damages Therefore, If It IS reasonably foreseeable at the tIme of the Improper dIscharge that the gnevor, If remstated wIth back pay at a later tune m another tax year, would suffer damages due to the mcreased tax burden, then It matters not whether the actual delay IS four years mstead of two (page 11) The employer rehes upon two decIsIOns denymg compensatIOn OPSEU (Sysluk) and Mlnzstry 0.( Natural Resources, FIle No, 195/89, decIsIOn dated August 7, 1990 5 (Keller), and OPSEU (Tzlden) and Mlnzstry ofMunzclpal Alfazrs and Houszng, FIle No 2109/95, decIsIOn dated January 17,2000 (DIssanayake) In Sysluk, the employer's vIOlatIOn of the collectIve agreement depnved the gnevor of almost eIght month's of work m 1989 HIS entItlement to wages for thIS penod was acknowledged by management m 1990 The receIpt of such money m 1990, rather than 1989, apparently gave nse to a claim for compensatIOn to offset an mcreased tax lIabIlIty for 1990 VIce-Chair Keller described the Issue as follows HIS [1 e the gnevor' s] maXImum allowable penSIOn contributIOn m 1990 was reduced because of the events of the prevIOUS year and he therefore wIll pay a greater amount of mcome tax He seeks compensatIOn for the addItIonal taxes paid resultmg from hIS mabIlIty to contribute the maXImum RRSP amount (pages 1 and 2) ThIS cryptIc passage appears to be based upon the tacIt premIse that the maXImum RRSP contnbutIOn, whIch may be sheltered from tax m any partIcular year, IS determmed by the contributor's mcome m the prevIOUS year For thIS reason, shIftmg some of the gnevor's mcome from 1989 to 1990 reduced the maXImum contributIOn he could make for 1990 He was reqUIred to pay more tax for that year than would have been owmg If hIS maXImum contributIOn had not been reduced and he had decIded to contribute the maXImum permItted. Contendmg tlus tax loss was too remote to be recoverable, the employer cIted two decIsIOns of the Ontano HIgh Court dealIng wIth wrongfully dIsmIssed employees, who had wIthdrawn funds from theIr RRSPs to cover lIvmg employees, and denymg them compensatIOn for losses resultmg from such wIthdrawals WIth these decIsIOns m mmd and speakmg for a unammous panel, Mr Keller concluded the tax loss suffered by the gnevor "IS entIrely too remote to be consIdered part of what has been customanly understood to be a make-whole award" (page 3) The gnevor m Tzlden sought compensatIOn for losses allegedly mcurred whIle laid off m contraventIOn of the collectIve agreement VIce-Chair DIssanayake described the alleged losses as follows 6 In order to find the reqUIred famIly mcome, the gnevor wIthdrew some funds from Ius RRSP In addItIon, he sold some stocks m Ius mvestment portfoho The umon states It wIll prove that as a result of wIthdrawmg the RRSP funds, there was a pennanent reductIOn m the gnevor's RRSP account and further that he suffered adverse tax consequences He sImIlarly claims that by selhng hIS stocks at the tIme he dId, the gnevor suffered losses (paragraph 14) After revIewmg a senes of decIsIOns deahng wIth analogous Issues, mcludmg Sysluk, Mr DIssanayake wrote I agree wIth the prevIOUS decIsIOns that losses resultmg from personal decIsIOns wIth regard to a RRSP or stocks are too remote and are not recoverable As thIS Board held m Sysluk, the "make whole" prmcIpal of remedy does not make such losses recoverable (paragraph 32) II The mstant case IS dIstmgUIshable from the two cIted by umon counsel where the loss at Issue flowed dIrectly from a breach of contract wIthout any mtervenmg actIOn on the part of the aggneved employee The gnevor m Meeks dId nothmg after hIS vacatIOn was Improperly cancelled to cause the delay m harvestmg hIS crop Nor dId the gnevor m Grznzus do anytlung after bemg wrongfully fired to mcrease Ius tax habIhty In both of these cases, compensatIOn was awarded for a loss resultmg exclusIvely from the employer's breach of contract In contrast, Mr Levere's loss of mcome was caused by the combmatIOn of the employer's erroneous classIficatIOn of one Job and the gnevor's subsequent conduct m applymg for another Mr Levere's contributmg role m bnngmg about hIS loss ofmcome makes thIS case analogous to the two cIted by counsel for the employer In Sysluk, the gnevor's tax loss arose from the conjUnctIOn of the employer's wrongful wIthholdmg of work, whIch lowered hIS RRSP contnbutIOn hmIt, and hIS ongomg desIre to make the maXImum pennIssible RRSP contributIOn The tax and mvestment losses m Tzlden were caused by 7 management laymg off the gnevor, m contraventIOn of the agreement, combmed wIth Ius subsequent RRSP wIthdrawals and stock transactIOns Followmg the approach taken m Sysluk and Tzlden, I conclude Mr Levere IS not entItled to compensatIOn because hIS loss IS too remote a consequence of the employer's breach of contract The outcome would be no dIfferent If the dutIes of Ius old Job were substantIally snndar to the dutIes of Ius new Job, as alleged by the umon Dated at Toronto thIS 13th day of March 2003 ~ / ./...~ RIchard Brown VIce-Chair