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HomeMy WebLinkAbout1999-1087.Weaver and Warsi.01-05-18 Order ~M~ om~o EMPU) YES DE L4 COURONNE ~~~ ~U;:~::~~E DE L ONTARIO ~~... SETTLEMENT COMMISSION DE REGLEMENT 'Il~1I'" BOARD DES GRIEFS Ontano 180 DUNDAS STREET WEST SUITE 600 TORONTO ON M5G 128 TELEPHONElTELEPHONE. (416) 326-1388 180 RUE DUNDAS OUEST BUREAU 600 TORONTO (ON) M5G 128 FACSIMILElTELECOPIE. (416) 326-1396 GSB#1087/99, 0362/00 UNION#99B881,00B200 IN THE MATTER OF AN ARBITRATION Under THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT Before THE GRIEVANCE SETTLEMENT BOARD Between. OntarIo Pubhc ServIce Employees' U mon (Weaver and WarsI) Grievor - and - The Crown In RIght of OntarIo (MmIstry of Fmance) Employer Before: Owen V Gray Vice-Chair For the Grievor- Don Martm GrIevance Officer OntarIo Pubhc ServIce Employees' Umon For the Employer- Andrew Baker Counsel Management Board SecretarIat Hearing. May 15, 2001 2 ORDER [1] ArtIcle 51 of the current (1999 2001) and prevIOUS (1994 1998) collectIVe agreements provIdes for a Supplemental Unemployment Benefit Plan that tops up parentalleave benefits ("EI parentalleave benefits) for whIch an employee IS elIgIble under the Emplov ment Insurance "4ct. I For each of the first two weeks of the leave (durmg whIch no EI parentalleave benefits are payable) the Plan reqUIres that the employer pay an elIgtble employee an amount equal to 9'3 per cent of hIS or her regular weekly rate of pay at the tIme the leave commenced (ArtIcle 51 52(a)) Durmg each subsequent week, up to ten, the Plan reqUIres payment of the clIfference between 9'3 per cent of the employee s regular pay and the sum of the weekly EI benefits the employee IS elIgtble to receIVe and any other earnmgs receIVed by the employee (ArtIcle 51 52(b)) [2] Mr WarsI took a parental leave m 1999 For a ten week period durmg that leave he receIVed EI parentalleave benefits and top-up payments under Ar tlcle 51 of the current collectIVe agreement totallmg 9'3 per cent of hIS regular weekly rate of pay Mr Weaver took a parentalleave m 1998 For a ten week pe 1 The relevant provunonR are theRe f)1 f) 1 An employee who IS entItled to parental leave and who provIdes the Eln ployer wIth proof that he or she IS m receIpt of employment msurance bene- fits pursuant to the Employment Insurance Act, (Canada) shall be pmd an al lowance m accordance wIth the Supplementary Unemployment Benefit Plan. f)1 f).2 In respect of the penod of parental leave, payments made accordmg 10 the Supplementary Unemployment Benefit Plan wIll consIst ofthe followmg' (a) for the fin,t two (2) week8, payment8 eqmvalent to mnety-three percent (93%) of the actual weekly rate of pay for hl8 or her cla88lficatlOn, whIch he or she was recelvmg on the last day worked pnor to the commence- ment of the leave, whIch 8hall al80 mclude hl8 or her progre881On on the wage gnd and any negotIated or amended wage rates for hIS or her clas slficatlOn as they are Implemented, (b) up to a maXImum of ten (10) addltlOnal weeks, payments eqmvalent to the dIfference between the 8um of the weekly EI benefit8 the employee 18 ehglble to receIve and any other earnmg8 receIved by the employee, and mnety three percent (93%) of the actual weekly rate of pay for hIS or her classlficatlOn, whIch he or she was recelvmg on the last day worked pnor to the commencement of the leave, whIch shall also mclude hIS or her progresslOn on the wage gnd and any negotIated or amended wage rates for hl8 or her cla88lficatlOn a8 they are Implemented, '3 nod durmg that leave he receIVed EI IXlrental leave benefitR and top up pay mentR under ArtIcle 51 of the preVIOUR collectIVe agreement totallmg 9'3 per cent ofhIR regular weekly rate of pay ['3] SectIOn 145 of the Emplovment Insllrance Act, commonly mferred to aR the claw back prOVIRIOn, reqmreR repayment of a portIOn of any employment mRurance benefitR receIVed m a taxatIOn year If the reCIpIent R mcome for that taxatIOn year exceedR a defined threRhold ThIR IR applIeR to all benefitR under the Act, not JURt parental leave benefitR The amount of the claw back IR '30 per cent of the leRRer of two amountR the amount of all EI benefitR receIVed m the taxatIOn year and the amount by whIch the reCIpIent R mcome for that taxatIOn year exceeded the threRhold. That amount IR payable by Apnl '30 of the followmg year The claw back IR calculated on the reCIpIent R mcome tax return for the year m queRtIOn, and IR taken mto account on that form m determmmg the net amount owed to or by the reCIpIent [4] MeRRrR Weaver and WarRI are Semor Tax AuchtorR Each of them earned m exceRR of the threRhold Rpeclfied by the claw back provIRIOn In the year In whIch he took hIR parentalleave Each waR oblIged to repay $12'3900 m the year followmg hIR parental leave Each clmmR that, aR a reRult, the employer waR oblIged to relmburRe hIm that amount purRuant to ArtIcle 51 of the applIcable collectIVe agreement [5] ArtIcle 51 doeR not expreRRly addreRR the conRequenceR of the Rtatutory claw back. The argument for the gnevorR IR that the Rtatutory claw back reduced the total EI parentalleave benefitR each waR elIgIble to receIVe m reRpect of the weekR of parentalleave arreI, RO retroRpectIVely mcreaRed the total amount that the employer waR oblIged to pay by way of top up under the language of ArtIcle 51 m order to enRure that the employee had receIVed a full 9'3 percent of hIR regular wageR m reRpect of thoRe weekR The argument for the employer IR that the formula m ArtIcle 51 only oblIged It to top up the benefitR that the employee waR entItled to receIVe at the tIme of the leave and that It waR not oblIged to ret roactIVely compenRate the employee for the RubRequent claw back conRe 4 quenceR of hIR or her hIgher mcome any more than It would be oblIged to provIde a RubRequent adJuRtment to redreRR the greater mcome tax that the employee R hIgher mcome ultImately attractR [6] For a number of yearR the partleR collectIVe agreementR have provIded for top-up of EI pregnancy leave benefitR on a formula RubRtantmlly Rlmllar to the one m ArtIcle 51 9'3 percent of regular pay for the firRt two weeb, then for up to 15 weekR the chfference between the Rum of the weekly EI benefitR the employee IR elIgIble to receIVe and any other earnmgR receIVed by the employee and 9'3 percent of the employee R regular pay The IRRue raIRed m theRe gnev anceR waR raIRed by the umon m Dotzenroth 1167/85 (ForbeR RobertR) wIth re Rpect to the pregnancy leave benefit top-up provIRIOnR of the collectIVe agreement that waR me ffect m 1984 [7] The gnevor m Dotzenroth had receIVed pregnancy leave benefitR under the then Unemployment InRurance Act and top up under the collectIVe agree ment She later had had to pay back a portIOn of thoRe UI benefitR purRuant to the claw back prOVIRIOn of that Act She gneved that the employer waR oblIged to relmburRe the clawed back amount In a decIRIOn dated January 18 1988 the Board dIRmIRRed the gnevance for the followmg reaRonR The entIre debate hmges on the meanmg to be ascribed to the phrase m Arn cle 49 3 2 (b) the U I C benefits the employee IS eh~hle to reCeIve (em phasIs added) Put shortly IS ehgibihty deternuned at the tUlle of actual payment or at the end of the taxatIOn year? The unIOn maIntaIns that the level of ehgibihty can only be determmed after all tax ramIficatIOns have been taken Into account We reject thIS VIew On ItS face the language IS clear ArtIcle 49 3 2 (b) speaks of the U I.C benefits the employee .lli ehgible to receIve not the benefits she willllltlllHltely proveehgible to h.wLereceIved. The Employer IS requIred to supplement an employee s U I.C benefits plus any other source of Income to maIntaIn the 93% salary level. Income tax ramIficatIOns are not the Employer s responsibihty Havmg receIved the 93% salary how the recIlnent protects that Income IS up to her Just as If she had receIved 100% salary The Employer cannot be expected to assume the role of a tax shelter One must take the UnIOn s argument to ItS logIcal conclusIOn. Assume that an employee m a low salary range takes matermty leave and avails herself of the SUB plan. Her yearly wage mcludmg the 17 weeks at 93% salary does not exceed $33 15000 However m the taxatIOn year m whIch she takes the 5 matermty leave she receIves a wInclfallIn the form of a $20 000 InherItance whIch puts her Income over $33 15000 Consequently she IS assessed pursu ant to ArtIcle 142 of the Unemployment Insurance Act By the Umon slIghts the Employer would be lIable for the sum of the assessment. ThIs surely can not be the pI an s purpose (emphasIs m the ongmal) [8] The Board S decIsIOn m Dotzenroth was not JuchcIally revIewed. The sItua tIOn It addressed was not an obscure one Then, as now more than a few mem- bers of the bargammg umt were and are paId at rates at whIch the claw back prOVISIOn mIght be expected have an effect when those members take pregnancy or parental leaves Smce the Dotzenroth decIsIOn was Issued, the partIes have negotIated four succeSSIve collectIVe agreements wIthout makmg any change to eIther the pregnancy leave or the parentalleave prOVISIOns that would affect the apphcablhty of the Dotzenroth decIsIOn. [9] In Re Labatt Brewl11.g Co Ltd And Brewery Worhers' [Tn1On, Local 300 (1983) 5 L.A.C (3d) 164 (Larson) a B C arbItratIOn board concluded that a Supplemental Unemployment Benefit Plan provIded for m a collectIVe agree ment to top-up UI benefits durmg lay-offs obhged the employer to reImburse workers for repayments under the claw back prOVISIOns of the UI legIslatIOn, whIch had been added to that legIslatIOn m 1979 after the SUB Plan m ques tIOn was negotIated In commg to that conclusIOn, the board adopted the reason mg m an unreported award m Re Ford Motor Co of Canada Ltd And Interna- tlonal [luon, CA W (decIsIOn dated November 30 1981 Palmer) Interestmgly the board m the Labatt case added that the employer would not be hable for amounts reqmred to be paId by an employee due to Income from sources other than the employer [10] In Kathleen O'Selll Cole and Treasury Board, Pubhc ServIce Staff Rela tIOns Board, FIle No 166 2 17880 (1988) the Pubhc ServIce Staff RelatIOns Board ("PSSRB") consIdered the same Issue under a collectIVe agreement preg nancy leave prOVISIOn substantIally SImIlar to the one m Issue m Dotzenroth. There the umon rehed on "4dnenne Duff and Treasury Board Pubhc ServIce 6 Staff RelatIOnR Board, FIle No 166-2 17'3'30 m whIch another panel of the PSSRB had concluded that the employer waR lIable for the amount clawed back. The employer cIted the Dotzenroth decIRIOn. The PSSRB choRe to follow ItR own earlIer decIRIOn, adoptmg the reaRomng m that decIRIOn. The Federal Court of Appeal dIRmIRRed an applIcatIOn for Juchcml reVIeW of the PSSRB'R O'Selll Cole decIRIOn ([1989] F C J No 802) concludmg that DespIte the ambIgUIty of the language of sectIOn 17 03(C) of the apphca ble CollectIve Agreement we thmk It IS clear that the partIes mtended that employees who were ehgible for matermty benefits under sectIOn '30 of the Unemployment Insurance Act should have then salanes topped up to 93% of then basIc pay dunng fifteen weeks of then pregnancy It was clearly not the mtentIOn that the claw back prOVISIOns of Part VII of the Unemploy ment Insurance Act should, operate so as to depnve some employees of the full amount of the benefit that the employer had agreed to pay them. That be- mg so the mterpretatIOn gIven by the Pubhc ServIce Staff RelatIOns Board to the CollectIve Agreement was not unreasonable and thIS Court should not m terfere wIth It [11] The umon doeR not RuggeRt that the Dotzenroth decIRIOn can be dIRtm- gmRhed on the baRIR of any chfference between the collectIVe agreement and Rtatutory proVIRIOnR It addreRRed and the collectIVe agreement and Rtatutory prOVIRIOnR relevant to the gnevanceR before me It argueR that the panel that de clded Dotzenroth mIRtakenly charactenzed the claw-back aR an mcome tax Hav mg regard to that error and the reaRomng m the pnvate Rector and federal pub- lIc Rector awardR on the IRRue the umon mVlteR me to conclude that the Dotzen roth decIRIOn waR wrong and rule m the gnevorR favour [12] In hIR May '3 1988 decIRIOn m Blahe 1276/87 (Shlme) the Board R then Chair Raid that one panel of the Board Rhould not refuRe to follow another R decI RIOn on the Rame pOInt or IRRue unleRR there are exceptIOnal ClrcumRtanceR He Raid thIR exceptIOnal clrcumRtanceR reqmrement waR a Rtncter Rtandard than the one uRually applIed by ad hoc arbltratorR namely that they wIll not depart from earlIer decIRIOnR In matterR between the Rame partIeR unleRR Ruch decIRIOnR are mamfeRtly m error The employer relIeR on Blahe here The umon R repreRen tatIVe cIted a number of (~SB decIRIOnR that he RuggeRted demonRtrated a retreat 7 from the notIon III Blahe that the Rtandard to be applIed IR more Rtnct than the mamfeRt error teRt [13] The queRtlOn whether Dotzenroth Rhould be followed III lIght of the Blahe doctrIlle waR ItRelf addreRRed by another VIce-Chair of thIR Board III a dIRpute between the employer and AMAPCEO about a RubRtantIally Rlmllar parental leave prOVIRlOn III theIr collectIVe agreement "4M"4PCEO (ShH Sud) and The Crown 1n R1.ght of Ontano (Mullstrv of the Enl11.ronment), 0888/00 AbramRky One of the IRRueR there waR whether Rome chfferenceR III collectIVe agreement language warranted a chfferent reRult The Board obRerved (at p 11 and 12) that The cbfference between IS elIgible to receIve and receIvmg for the week IS not a matenal chfference It does not on ItS face Inchcate as counsel for the ASSOCIatIOn urges that It refers to what an employee receIves at the end of the day after any repayment IS made Although that IS one possible mterpr e- tatIOn, the one proposed bv counsel for the Emplover - that It refers to the benefits receIved bv the employee dunng the week of parental leave - IS equally plausible Consequently I conclude that the chfferences In the collectIve agreement Ian guage are not matenal and that Dotzenroth IS chrectlv on pomt. It deter mIned the key Issue In chspute - when the calculatIOn IS to be made - at the tune of the leave or at the end of the taxatIOn year Accorchnglv thIS IS not a strmghtforward contract InterpretatIOn case Instead, because Dotzenroth IS cbrectlv on pOInt the Issue IS whether there are exceptIOnal CIrcumstances whIch warrant a departure from that decIsIOn. [14] The Board alRo dealt m Sud (at pp 12 1 '3) wIth the argument that the ref erenceR m the Dotzenroth decIRlOn to mcome tax ramlficatlOnR and tax RhelterR betray a mIRunderRtandmg of the claw back that warrantR departure from ItR concluRlOnR The ASSOCIatIOn contends that m adchtIOn to the language chfferences the reasonmg of the Board m Dotzenroth IS plmnlv mIsgUIded because the claw back prOVISIOn has nothIng to do wIth Income tax ramIficatIOns It asserts that the claw back IS a return of employment Insurance benefits not an m come tax, and that the Board clearly nllsunderstood the sItuatIOn when It stated that mcome tax ramrl'icatIOns are not the Emplover s responsibilIty and thus rendenng the decIsIOn mvalId. I agree that the language of the Board s decIsIOn seems to confuse the L'l- sue but there IS a tax element mvolved wIth the claw back of E I benefits That IS because the claw back requIrement IS based on an employee s net Income - not gross Income and an employee does have some control over theIr net mcome For example m Mr Sud s case If he had the abilIty to put 8 $8 200 00 mto RRSP contributIOns he would have been below the claw back net mcome of $4875000 If he had umon dues child care expenses or atten dant care expenses or a busIness Investment loss or movIng expenses or made support payments or had any other pernnssible deductIOns hIS net m come would have been affected. To thIS extent the Boarcl's conclusIOn that [h]avmg receIved the 93% salary how the recIpIent protects that mcome IS up to her makes some sense Moreover a faIr readmg of the Board s decIsIOn m Dotzenroth IS that It decIded that the gnevor s statutory oblIgatIOns T. e the claw back reqUIre- ment was not the Emplover s responsibilIty Havmg paId the 93% durmg the parental leave the Emplover IS not responsible for any further payment due to the employee s statutory oblIgatIOns under the Employment Insurance Act Just as It IS not responsible for an employee s oblIgatIOn to pay Income taxes on wages earned. That IS the same Issue as In the present matter Although the language that Dotzenroth panel used to explam Its reasomng IS less careful than It could have been, I agree wIth VICE ChaIr Abramsky that what Dotzenroth decIded was that the employer s oblIgatIOn was only to top up the benefits receIVable at the tIme of the leave not to later adjust for payments the employee mIght later be reqUIred by statute to make as a consequence of the employee s level of mcome from all sources and receIpt of UI benefits of all kmds durmg a partIcular year [15] In Slid VIce-ChaIr Abramsky saId she would have preferred the reason mg m Dllff, O'Selll Cole and Labatt If the matter had been one of first Impres SIOn, but that the reqUIrements of Blahe constramed her to follow Dotzenroth The pnmarv chfficultv that I have wIth Dotzenroth IS that the purpose of the prOVISIOn - to maIntaIn an employee on leave at 93% of theIr regular pay through a combmatIOn of E I. benefits and payments bv the Emplover - IS not fulfilled because of the subsequent claw back of E I benefits Overall, I do prefer the reasomng of the federal cases m Duff and O'VeTll-Cole as well as the arbItratIOn board m Labatt But that IS precIsely the kmd of sItuatIOn Blahe seeks to avoHl - persuadmg one panel of the Board that another panel was In error In thIS case gIven the long-stanchng GSB Junsprudence under Dotzenroth the reqUIrements of Blahe clearer language IS requIred to achIeve the result the Ass ocaatIOn seeks As set out m Blahe supra, the onus of establIshmg exceptIOnal CIrcum stances IS on the party seekIng reVIew In thIS case the ASSOCIatIOn. For the above-stated reasons I cannot conclude that exceptIOnal arcumstances were establIshed, partIcularly SInce the Board noted that It was a standard stncter than manIfest error Although I may well have been persuaded to reach a drlferent result were thIS an Issue of first ImpreSSIOn, as a "Ice-ChaIr of the Gnevance Settlement Board I must abHle bv a decIsIOn of the Board m the absence of exceptIOnal CITcumstances The decIsIOn of the Board m 9 Dotzenroth IS chrectlv on pomt and In the absence of exceptIOnal CIrcum stances controls thIS chspute [16] The queRtIOn whether a prOVIRIOn lIke ArtIcle 51 5 2(b) makeR an employer lIable for the amount of the Rtatutory claw-back IR one about whIch the language m queRtIOn mIght be Raid to be ambIguouR aR the Federal Court of Appeal (lId m O'Selll-Cole ReRolvmg the ambIgUIty mvolveR drawmg mferenceR about the 1Il tentIOnR of the partIeR from the wordR they uRed m theIr agreement On the one hand, the purpORe of Ruch a prOVIRIOn ReemR to be to mamtam an employee on leave at 9'3% of her/hIR regular pay and the claw back ReemR to defeat that pur pORe If the employer IR not reqUIred to relmburRe It On the other hand, no one would mfer from the formula that the employer waR reqUIred to adJuRt ItR pay mentR RO that the amount receIVed by the employee after Rtatutory deductIOnR IR 9'3% percent of what he or Rhe receIVed weekly after deductIOnR before gomg on leave Nor would anyone mfer that eIther the employer or the employee waR re qUIred to make retroRpectIVe adJuRtmg paymentR to the other m the followmg year to enRure that the employee R net after tax mcome referable to the weekR of leave waR 9'3% of what It waR m a regular week prior to the leave [17] The claw-back IR not mcome tax m the uRual RenRe It IR a payment that the employee becomeR lIable to make by reaRon ofhIR or her receIpt ofbenefitR aR well aR hIR or her mcome level. In Rome waYR It lookR lIke a retroRpectIVe recalCll latIOn of benefitR a perRpectIVe from whIch one mIght conclude that the partleR mtended a correRponclIng recalculatIOn of the employer R top-up In Rome waYR It lookR lIke a tax on mcome a perRpectIVe from whIch the OppoRlte concluRIOn would more lIkely be drawn. The amount of the claw back may be affected by the receIpt of mcome otherwIRe than from the employer by expenReR other than ex penReR relatmg to employment by that employer by chOIceR the employee makeR about Rheltermg mcome RO aR to reduce and/or defer mcome tax, and by receIpt of EI benefitR other than thoRe that the employer haR agreed to top-up TheRe fea tureR of the claw back comphcate the drawmg of an mference about what the partIeR mtended wIth reRpect to the effect of the claw back on the toppmg-up of parentalleave benefitR An mference that the partleR mtended that the employer 10 relmburRe a claw back mIght not be comfortably drawn wIthout alRo mferrmg exceptIOnR to take care of Rome of theRe complexltIeR aR the Labatt award dem- onRtrateR The more elaborate the mference becomeR the more chfficult It IR to ]URtlfy It aR mere mterpretatIOn of the language m queRtIOn. [18] SometlmeR there IR more than one ratIOnally defenRlble anRwer to a queR tIOn of firRt ImpreRRIOn concernmg the mterpretatIOn or applIcatIOn of a prOVIRIOn of a collectIVe agreement Once Ruch a queRtIOn haR been anRwered m a ratIOn ally defenRlble manner at arbItratIOn, mamtammg conRIRtency wIth that earlIer anRwer becomeR an Important conRlderatIOn when In Relectlng from among rea Ronable anRwerR to the Rame queRtIOn m a future arbItratIOn between the Rame partIeR [19] The decIRIOn m Blahe aRRertR that conRIRtency mURt be gIVen even greater weIght when dIRputeR between the partleR are reRolved by a Rmgle Rtatutory tn bunal functIOnmg through chfferently conRtItuted panelR than It would otherwIRe be If the partleR dIRputeR were bemg reRolved by arbltratorR or arbItratIOn boardR appomted on an ad hoc baRIR I agree wIth that VIew for the reaRonR Ret out m Blahe I do not thmk It IR neceRRary m thIR caRe to explore m detail the content of the mamfeRt error and exceptIOnal ClrcumRtanceR teRtR aR pro pounded m the vanOUR decIRIOnR cIted by the partIeR It IR enough to Ray that conRIRtency wIth prevIOuR decIRIOnR of thIR Board IR a very Important conRldera tIOn m proceedmgR before the Board. [20] ThIR doeR not mean, aR the umon RuggeRted m argument, that the partIeR may be Rtuck wIth a 'bad decIRIOn forever The partleR have the opportumty to renegotiate theIr collectIVe agreement penochcally They can change the lan- guage on whIch a 'bad decIRIOn waR baRed, to make It clear that they mtend a chfferent reRult When the partleR have had that opportumty and no Ruch change IR made conRIRtency wIth the earlIer decIRIOn IR an even more compellmg conRld eratIOn when mterpretmg the unchanged language 11 [21] Dotzenroth addreRRed RubRtantIally the Rame queRtlOn now before me The anRwer It gave waR ratIOnally defenRlble It waR not RubJected to Juchcml reVIew The language It mterpreted haR not been matenally changed m the 4 roundR of collectIVe bargammg that have taken place Rmce the decIRIOn waR releaRed. Whatever I mIght have concluded had thIR been a queRtlOn of firRt ImpreRRlOn, the proper reRponRe In theRe clrcumRtanceR IR to Interpret the prOVIRlOn m queR tlOn m a manner conRIRtent wIth the decIRlOn m Dotzenroth [22] Accordmgly I find that the employer waR not oblIged under the current or the preVlOUR collectIVe agreement to relmburRe the amountR that the gnevorR were oblIged to pay under the claw back prOVIRlOn of the Emplovment Insllr once "4ct TheRe gnevanceR are therefore dIRmIRRed Dated at Toronto thIR 18th day of May 2001 ~( Owen V Gray VIce-Chair