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HomeMy WebLinkAboutUnion 17-08-25IN THE MATTER OF AN ARBITRATION BETWEEN: ONTARIO SHORES (the “Employer”) - and - ONTARIO PUBLIC SERVICE EMPLOYEES UNION (the “Union”) Re: OPSEU Policy Grievance – Interpretation of Memorandum of Settlement and Consent Award OPSEU #2011-0331-0037; OPSEU File #8837 A W A R D Paula Knopf - Arbitrator Counsel: For the Employer: Craig Rix For the Union: Chris Bryden The Award is based on Written Submissions. 1 In July of 2011, the parties entered into a Memorandum of Settlement concerning the allocation of overtime. The Memorandum of Settlement became the basis of a Consent Award issued by me on July 28, 2011, wherein I remained seized with implementation. An issue of interpretation has since arisen and the parties have brought it back to me for determination based on written submissions. Their dispute is about whether the Memorandum of Settlement survived the expiry of the Collective Agreement that was in force at the time the Consent Award was issued. The Union‟s position is that the parties intended the Memorandum of Settlement to cease to have effect after the expiry of the 2009- 2014 Collective Agreement. The Employer‟s position is that they intended the Memorandum of Settlement to continue to bind them into successive agreements. To their credit, the parties have presented their submissions on the basis of the following Stipulated Facts: 1. Ontario Shores (the “Hospital” or “Employer”) is a public hospital located in Whitby, Ontario, Canada, providing a range of specialized assessment and treatment services to those living with complex and serious mental illness. 2. The Ontario Public Service Employees Union (“OPSEU” or the “Union”) holds bargaining rights in respect of three (3) bargaining units at the Hospital – Registered Nurses, Paramedical/Professional, and an Office, Clerical, Service and Maintenance unit. 3. The parties have a mature bargaining relationship and have entered into several successive Collective Agreements over a number of years. 4. The Union filed a policy grievance dated March 15, 2011 asserting that the Hospital had breached, inter alia, Article 35.03(b) “by distributing OT on the basis of seniority and not „equalization‟ (fair & e quitable distribution)…”. This policy grievance was but one of many other individual grievances pertaining to overtime filed in and around this time. 5. That grievance was subsequently assigned the OPSEU Grievance #2011-0331-0037 (the “Grievance”). 6. The Grievance was filed under the parties‟ 2009 -2014 Collective Agreement. 2 7. Article 35.03(b) of the 2009-2014 Collective Agreement provided: “In the assignment of overtime, the Centre agrees to develop methods of distributing overtime that are fair and equita ble after having ensured that all its operational requirements are met. Straight time hours will be offered to Part-time and casual staff before full-time employees shall be offered overtime. Full-time employees shall be offered overtime prior to the offer of overtime to the part-time or casual employees.” 8. The language of Article 35.03(b) was identical in predecessor Collective Agreements between these parties. 9. The Grievance was referred to Arbitration and the parties agreed to appoint Arbitrator Paula Knopf as sole Arbitrator. 10. The parties met July 28, 2011 to make efforts to resolve the Grievance. 11. The parties entered into a Memorandum of Settlement to resolve the grievance. 12. The Minutes of Settlement [were] subsequently issued as a Consent Award by Arbitrator Knopf. 13. The MOS and Award set out a process regarding the manner in which overtime hours would be allocated and the remedy sought in the event an employee is not provided an overtime opportunity in acco rdance with the process set out. 14. The Award provided, at paragraph 6 (mirroring the language at paragraph 6 of the Memorandum of Settlement): “The provisions of this Award shall operate for the term of the Collective Agreement. The parties may agree to change the process at any time. Should management wish to change the process, it may only do so after the Collective Agreement has expired and only after having provided the Union with 12 weeks’ notice”. [Emphasis added] 15. Arbitrator Knopf remained seized with respect to the implementation of the Award/Minutes of Settlement (see paragraph 7). 16. The 2009-2014 Collective Agreement expired March 31, 2014. 3 17. OPSEU provided notice to bargain a renewal Collective Agreement by way of correspondence dated January 22, 2014. 18. Although the Collective Agreement expired, the parties continued to operate as if its terms were still in effect. For example, dues continued to be deducted and grievances continued to be processed. 19. During bargaining for a renewal agreement in 2014, the Union advised the Employer at the bargaining table that it (the Union) took the position that, pursuant to paragraph 6 of the MOS/Award, the MOS/Award expired with the 2009-2014 Collective Agreement and did not bind the parties thereafter. At the same time as it advised the Employer of its position regarding the status of the MOS/Award, the union tabled alternative overtime distribution language. 20. The Hospital disagreed, and took the view that the MOS/Award survived the expiry of the Collective Agreement. 21. Beginning in February, 2015, a number of individual overtime grievances were filed. 22. Those grievances have been referred to arbitration and are proceeding separately. 23. As noted above, the Hospital continued to take the view that the MOS and Award were binding on the parties after the expiration of the 2009 -2014 Collective Agreement. 24. The parties continued bargaining in early 2015 but were unable to conclude a Collective Agreement and a number of remaining items were referred to Interest Arbitration. 25. The Interest Arbitration Board was Chaired by Arbitrator Larry Steinberg and hearings took place on or around April 21 and 22, 2015. 26. The Steinberg Board rendered its Interest Arbitration Award on or around May 4, 2015. 27. No changes were made to the Collective Agreement language regarding the allocation of overtime, including Article 35.03(b), which remained in identical form. 28. The parties‟ April 1, 2014 to March 31, 2017 Co llective Agreement [was filed as an exhibit]. 4 29. These facts are agreed to solely for the purposes of this determination and are without prejudice to any other matter. The relevant provisions of the Collective Agreement are as follows: 5.01 The Union recognizes that the management of the operations and the direction of the employees are fixed exclusively with the Centre and shall remain solely with the Centre and without restricting the generality of the foregoing it is the exclusive function of the Centre to: … (d) determine all work schedules, the kind and location of equipment to be used, methods to be used, the location and number of employees required from time to time, the services to be performed, the standards of performance of all employees, work assignments, the hours of work and all other rights and responsibilities of management not specifically modified elsewhere in this Agreement; … (f) Not withstanding the above, the Employer shall not exercise these rights in an arbitrary, discriminatory or bad faith manner. Article 35.03(b) In the assignment of overtime, the Centre agrees to develop methods of distributing overtime that are fair and equitable after having ensured that all its operational requirements are met. Straight time hours will be offered to Part-time and casual staff before full- time employees shall be offered overtime. Full-time employees shall be offered overtime prior to the offer of overtime to the part-time or casual employees. [Emphasis added]. Article 44 This Agreement shall be binding and shall remain in effect from April 1, 2009 – March 31, 2014 and shall continue in force from year-to-year thereafter unless notice of intention to revise or terminate the agreement is given in writing by either party to the other party within the period of 90 (ninety) days and 30 (thirty) days prior to the expiry of this agreement. 5 The Submissions of the Parties The Submissions of the Union The Union asserted that the Memorandum of Settlement is “explicit and clear on its face” by saying “it shall operate for the term of the Collective Agreement”. The Union submitted that if the parties wanted it to survive the expiration of the 2009- 2014 Collective Agreement, they would have said so expressly. Accordingly, the Union takes the position that other than having effect during the statutory freeze period, the Memorandum of Settlement terminated when the Collective Agreement expired. The Union submitted that when the 2009-2014 Collective Agreement expired, there was at the very least some possibility that those terms and conditions of employment would become “frozen” during the applicable statutory freeze, thereby preventing the Employer from modifying any terms and conditions of employment without the Union‟s consent. The Union asserted that the Memorandum of Settlement provided the Employer with the Union‟s pre-emptive consent to modify those terms and conditions during the statutory freeze period provided the following requirements were satisfied: 1) The overtime allocation system spelled out in the Memorandum of Settlement had to remain in place for the remaining term of the 2009-2014 Collective Agreement, and; 2) The Employer could only cancel it thereafter, and only after providing the Union with 12 weeks‟ notice. (The overtime allocation system set out in the Memorandum of Settlement operated on a six-week cycle, therefore, 12 weeks‟ notice would in effect give the Union two “cycles” worth of notice.) The Union explained that the intent of the parties was to provide them with “some labour relations peace” on this issue during the term of the Collective Agreement, and to ensure that the overtime allocation system was given a fair trial period 6 until the parties went into bargaining, at which time the issue could be revisited and discussed. The Union acknowledged that the Memorandum of Settlement gave the Employer the latitude to modify the overtime allocation system after the Collective Agreement expired, so long as the Union was given 12 weeks ‟ notice of any modification. However, the Union argued that the Memorandum of Settlement is “clear” that it would only operate “for the term of the Collective Agreement”. It was submitted that this interpretation reconciles the first and third sentences of paragraph 6 without doing any “violence” to either of those sentences. The Union submitted that Employer‟s interpretation would effectively delete or read out the first sentence of paragraph 6. OPSEU argued that by giving its notice to bargain, the Collective Agreement came to an end and did not automatically renew pursuant to Article 44. However, it was acknowledged that the parties continued to operate as if its terms were still in effect and “frozen” by statute. The resolution of the new collective agreement through interest arbitration included its operation beginning no earlier than April 1, 2014. It was conceded that until the Interest Arbitration Board issued its decision on May 4, 2015, the parties continued to behave and conduct their labour relations as if the 2009-2014 Collective Agreement remained in force. Therefore, the Union asserts that when the Interest Board issued its decision, a new collective agreement came into effect and the statutory freeze came to end. As a result, the Union argued that any terms from the Memorandum of Settlement that were “frozen” ceased to bind the parties. In support of this, the Union relies on the Hospital Labour Disputes Arbitration Act (“HLDAA”), s. 13; Bradburn v. Wentworth Arms Hotel Ltd., (1978), 94 D.L.R. (3d) 161 (SCC) [“Bradburn”], at paras. 16 and 24; Rigby v. I.B.E.W., 1972 CarswellOnt 591, [1972] O.L.R.B. Rep. 174 [“Rigby”], at para. 3; Mohawk Hospital Services 1993 CarswellOnt 1437, [1993] O.L.R.B. Rep. 873, at para. 22; Windsor-Essex County 7 Real Estate Board, 1996 CarswellOnt 6134, 55 L.A.C. (4th) 18 (Watters), at para. 29. The Union asserted that it is reasonable to conclude that the parties were aware that it may take many months after the expiration of their 2009 -2014 Collective Agreement before their renewal agreement was resolved, given the practices in this sector. It was said that this is why the parties agreed that the Memorandum of Settlement would last for the duration of the Collective Agreement, and to the extent it became a “frozen” term and condition of employment, the Employer could modify the overtime allocation system provided that the Collective Agreement had expired and provided it gave the Union 12 weeks‟ notice. The Union seeks a declaration that the Memorandum of Settlement and Consent Award ceased to be operative after the Collective Agreement expired, subject to any statutory freeze period that maintained any applicable terms and conditions of employment. The Submissions of the Employer The Employer‟s position is that the Memorandum of Settlement survived the expiry and subsequent renegotiation of the parties‟ 2009 -2014 Collective Agreement, and continues in force today. The Employer pointed out that the Memorandum of Settlement was agreed upon in response to a grievance challenging the method that the Employer had been using to allocate overtime. The Employer submitted that the Memorandum of Settlement limited management‟s right to determine the process of overtime allocation by adopting an agreed-upon process that the parties considered to represent a fair and equitable distribution of overtime. In exchange, OPSEU agreed to limit the challenges that could be made to decisions made under the agreed-upon process and to the types of remedies that could be sought. 8 The Employer stressed that their Memorandum of Settlement contains a review period of six months “to ensure that the process was meeting the objectives of Article 35.03(b)” and an agreement to amend the process at any time, including at the time of this review period. The Employer submitted that within that context, the parties‟ intention should be understood as follows: (a) The Agreement would remain in effect throughout the term of the existing Collective Agreement. (b) At any time, the parties could agree to change the process that they had agreed upon. (c) After the expiry of the Collective Agreement, the Minutes of Settlement and the process that it established would continue in effect, but the Employer could only change the agreed -upon process by providing 12 weeks‟ notice to the Union. The Employer argued that the first and second sentences in paragraph 6 ensure that the terms of the Memorandum of Settlement would operate throughout the term of the 2009-2014 Collective Agreement, unless the parties mutually agreed to change them. It was stressed that the final sentence of paragraph 6 with the words “after the Collective Agreement has expired” make it “clear” that the parties intended that the terms of the Award continue beyond the expiry of the Collective Agreement. Further, the Employer argued that there is no express restriction in paragraph 6 to the freeze period only. It was suggested that there would have been no need to include the third sentence of paragraph 6 if the intention had been simply to extend the Minutes of Settlement into the freeze period. In response to the cases cited by the Union, the Employer argued that they all dealt with different language than the Memorandum of Settlement in this case and, unlike the parties‟ Memorandum of Settlement, they contained nothing that suggested terms surviving the Collective Agreement. The Employer placed great weight on the fact that the parties did not renegotiate the provisions of Article 35.03(b) during their most recent round of collective bargaining, nor did Arbitrator Steinberg amend the language in his interest 9 arbitration award. The Employer relies upon the decision in Family and Children’s Services of Lanark, Leeds and Grenville [2016 CarswellOnt 18170] to submit that one party cannot unilaterally give notice to end a mutually agreed - upon agreement unless it explicitly provides for such notice. The Employer suggested that when the Union was unsuccessful in securing change during negotiations through its proposed amendment to Article 35.03(b), the Memorandum of Settlement therefore continued to bind the parties according to its terms. The Employer also referred to Canadian Labour Law (Adams), para. 10.1340. As a result, the Employer asked for a declaration that the parties continue to be bound by the terms of the Memorandum of Settlement. The Union’s Reply Submissions The Union‟s response to the Employer‟s submissions was to emphasize that the Union continues to desire an overtime allocation system that is “fair and equitable”. The problem now is that the Union believes that the process set out in the Minutes of Settlement fails to achieve that goal. Further, the Union asserted that it was not the parties‟ intention to carry the Memorandum of Settlement forward into the freeze; instead, it was for the Memorandum of Settlement to “operate for the term of the Collective Agreement”. It was argued that the final sentence of paragraph 6 represents the parties‟ acknowledgement that the Memorandum of Settlement‟s overtime allocation process might carry on into a freeze period either as a result of the freeze, or due to simple administrative convenience prior to a renewal agreement coming into force. It was also suggested that the parties agreed to give the Employer some latitude to modify or change the overtime allocation system during the freeze without running the risk of an unfair labour practice complaint to the Ontario Labour Relations Board. 10 Addressing the Employer‟s reference to Family and Children's Services of Lanark, Leeds and Grenville, supra, and agreeing that there is a “rebuttable presumption” that settlements survive the expiry of a collective agreement unless they expressly provide otherwise, the Union argued that the presumption has been rebutted by paragraph 6 of the Memorandum of Settlement by expressly providing that the Memorandum of Settlement would operate for the term of the Collective Agreement and no further. The Decision The parties have referred this dispute to me because I was seized with implementation of their Memorandum of Settlement and issued the Consent Award that it contemplated. The irony of the task is that they are asking me to discern their “intentions” from the language they crafted in good faith to alleviate discontent about overtime allocations. If any “intention” is clear, it is that the parties believed that the process they adopted would address both the operational needs and the needs of bargaining unit members. They also included a mechanism to review and amend the process if its implementation revealed the need for any other changes. That language was carefully designed in a mediation/arbitration session, with skilled counsel and sophisticated, responsible parties. It is a shame that the simple words in paragraph 6 have led to this dispute. The analysis and answer that follows is the result of the application of the rules of contract interpretation, with the help of the submissions and case law provided. Both parties made reference to the decision of Arbitrator Goodfellow in Family and Children’s Services of Lanark, Leeds and Grenville, supra. That case also dealt with the issue of whether a memorandum of settlement was in force at a critical time. Arbitrator Goodfellow ably summarized the applicable principles: 11 . . . . .agreements reached by parties during the currency of a collective agreement (whether in settlement of a grievance or a potential grievance, or whether understood as “interpreting” or “adding to” the collective agreement) bind the parties unless and until altered by mutual agreement; it is not that they will expire, or can be brought to an end, unilaterally, on notice, effective with the expiry of the prevailing collective agreement. This presumption is supported by the basic legal principle that there can be only one collective agreement and, most importantly, by collective bargaining practice. In this province at least, collective bargaining is about change, not continuity, with the assumption being that all previous terms will continue unless amended, not that they will cease unless renewed. Second, the terms of a mutually negotiated agreement cannot be brought to an end unilaterally, on “notice”, unless the agreement expressly provides for it. I accept and adopt this reasoning. It follows therefore that there is a presumption that a memorandum of settlement will continue to bind the parties. This presumption can be refuted by language that specifies the duration or life of the agreement or when the conditions for modification, as spelled out in the agreement, are met. Therefore, it is the words of the Memorandum of Settlement that are critical in determining its duration and effect. The wording of paragraph 6 is unlike the wording in any of the cases cited by the parties. However, those cases provide helpful acknowledgement and insights into the prolonged nature of contract resolution under the Hospital Labour Disputes Arbitration Act; see Mohawk Hospital Services, supra. They also explain the continuation of a memorandum of settlement into the statutory freeze period, see Windsor-Essex County Real Estate Board and SEIU, supra. The parties‟ submissions focus on the interplay of the first and last sentences of paragraph 6. Some of the basic rules of contract interpretation require that all the words must be given their plain and ordinary meaning and that they cannot be interpreted in such a way that would lead to an absurd result. It is also important to read the words in context. While the Collective Agreement provides that overtime shall be allocated in a “fair and equitable manner”, the parties 12 decided to enter into a Memorandum of Settlement that would specify how the Employer would administer an agreed-upon overtime assignment model. In other words, they reached agreement on what they considered to be a “fair and equitable” process at that time. They crafted a detailed set of steps and agreed that the process would begin October 3, 2011. They also agreed to review the process six months after its implementation “to evaluate the objectives” of achieving a “fair and equitable distribution” of overtime. The stipulated facts do not contain any information about the results of the review process. However, the facts do reveal that several grievances have arisen that can only be addressed once the question of the duration of the Memorandum of Settlement is resolved. This Memorandum of Settlement does address duration. It specifies that the Agreement “shall operate for the term of the collective agreement.” Although the parties do not agree about why, the parties‟ submissions essentially agree that the Memorandum‟s terms continued to operate during the “freeze” period before the renewal Collective Agreement came into effect. So they agree that the Memorandum of Settlement continued to operate or apply during the freeze period. The Memorandum of Settlement also provided for two ways to change the allocation of overtime: “The parties may agree to change the process at any time.” and “Should management wish to change the process, it may only do so after the collective agreement has expired and only after having provided the Union with 12 weeks‟ notice.” [emphasis added] Therefore, the agreement to have the new overtime allocation process in place was certainly made to last for the term of the Collective Agreement and freeze period. As the parties‟ submissions acknowledged, this was done to give the process a chance. It also fettered the Employer‟s ability to change the process during the term of the Collective Agreement and the freeze period. Further, the second sentence makes it clear that the parties could change the agreed-upon 13 process “at any time”. Therefore, the process could be changed after the “expiry” of the Collective Agreement, during the freeze period. Accordingly, notwithstanding the first sentence of paragraph 6, the parties agreed that they could change or even abandon their newly crafted process during the term of their Collective Agreement and even after its expiry. Presumably, such changes could have been the outcome of the review and evaluation process, especially given the length of time it takes for contracts to be resolved in the Hospital sector. What then is the effect of the last sentence in paragraph 6? If the words are given their plain meaning, that last sentence must be read as a further restriction on management‟s ability to change the process outlined in the Memorandum of Settlement. Management is restricted to only making any unilateral changes “after the collective agreement has expired” and only after giving the Union 12 weeks‟ notice. Management could not make any unilateral changes during the operation of the Collective Agreement in force when the Memorandum was signed. If the Memorandum of Settlement expired with the previous Collective Agreement and had no effect “after” that, there would be no purpose to specifying how management could make changes “after” the Collective Agreement expired. Management rights would simply revert to the Collective Agreement‟s sole requirement that management allocate overtime on a “fair and equitable basis”. In that scenario, the Union would have no direct say in what process would be implemented to achieve that result unless management again invited the Union to engage in a design process. In other words, the last sentence of paragraph 6 and the phrase “after the collective agreement has expired” can only have meaning if the Memorandum of Settlement was designed to operate after the Collective Agreement expired. Further, there is nothing in the Memorandum of Settlement to suggest that it ceases to operate after the freeze period is over. So if the terms are applicable during the freeze, they must continue to operate because nothing was done to bring about another change. 14 Accordingly, I must conclude that the Memorandum of Settlement remained in effect after the renewal Collective Agreement came into force. Management cannot change the process unless it complies with paragraph 6‟s prescriptions with regard to notice and also complies with Article 35.03(b). That remains as a fetter to management rights. The Memorandum of Settlement does allow for changes “at any time” where the parties agree. That is consistent with the normal operation and administration of collective agreement language. For all these reasons, I declare that the parties continue to be bound by the terms of the Memorandum of Settlement. Dated at Toronto this 25th day of August 2017 _____________________________ Paula Knopf - Arbitrator Generated by CamScanner