HomeMy WebLinkAboutBrazier et al 19-05-15IN THE MATTER OF An Arbitration pursuant to the Ontario Labour Relations
Act, 1995
BETWEEN:
ONTARIO PUBLIC SERVICE EMPLOYEES UNION
and
COMMUNITY LIVING TILLSONBURG
(the "Union")
(the "Employer")
AWARD
RE:
DATE AND LOCATION OF HEARING:
SOLE ARBITRATOR:
APPEARANCES FOR THE UNION:
Grievances of T. Deleebeeck, H Brazier, &
S. Ross (dated Oct. 18, 2017
March 29, 2019, Ingersoll
Brian Etherington
Charlotte Calon, Counsel
Teressa DeLeebeek, Grievor
Heather Brazier, Grievor
Sandra Ross, Grievor
APPEARANCES FOR THE EMPLOYER: Tim Price, Counsel
Ms Marni Stefan, Manager of Human
Resources for Community Living
AWARD
Introduction
This award deals with three grievances filed on October 18/17. The grievances
allege that the Employer violated the collective agreement by not compensating them for
"allegedly accrued" vacation pay credits at their pre-layoff classification rate up to the
date when they commenced work in a lower wage classification following a layoff. The
narrow issue raised by the facts of this case is whether or not the three grievors, all of
whom bumped into a lower wage classification position as a result of a layoff by the
employer, were entitled under the provisions of articles 15 (layoff) and 19 (vacation) to
vacation pay accrual at their pre layoff wage rate up to the date of the move to the new
position when that vacation had not been credited to them at the date of the change of
position because it was prior to their anniversary date.
At the outset of the hearing the parties reached an agreed statement of facts (ASF)
and agreed to make argument on the basis of the ASF and a number of exhibits submitted
on consent. The ASF is incorporated into the award below, without the attachments
referred to in the text. Those attachments are all included in exhibit 3 under the tab
numbers referred to in the ASF.
AGREED STATEMENT OF FACTS
Overview
In 2017, Community Living announced that it would be closing two of its
early childhood education programs, resulting in layoffs.
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2.The grievors were each laid-off according to the terms of Article 15 of the
Collective Agreement. They each subsequently accepted the opportunity
provided by Community Living to displace an employee at a lower
classification in accordance with Article 15.03.
3.The grievors' displacements were effected in September, 2017.
4.Community Living agreed to pay-out the difference between the rate of
pay of the grievors' pre- and post-displacement positions with respect to
their banked vacation time, float time, and overtime up to the date of
displacement. For clarity, the time banks were not paid-out in their entirety.
Instead, the grievors were paid amounts equivalent to the difference
between, on the one hand, the value of the time in the time banks at the
pre-displacement rate of pay—i.e. the pay at which that time had been
earned—and on the other hand, the value of that time at the post-
displacement rate of pay.
5.On the other hand, Community Living denied the grievors' requests to be
paid out what they claim to be their accruing vacation ("allegedly accruing
vacation") for the period between their anniversary dates and dates of
displacement on the basis that vacation is not an entitlement until it is
credited at an employee's anniversary date. For clarity, Community
Living's position is that vacation was not accruing in the period between
the grievors' anniversary dates and their displacement dates.
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6.The issue on this grievance is whether or not the Collective Agreement
entitled the grievors to their allegedly accruing vacation pay at the hourly
rate at which it was earned in circumstances where they had been laid off
and elected to exercise their displacement rights to accept lower rated
positions.
A. Heather Brazier
7.Heather Brazier is a Registered Early Childhood Educator ("RECE") who
has been employed by Community Living since January 1991. She was
first hired as a casual employee, but has been in a full-time position since
March 5, 1991, which is her anniversary date.
8.Heather held the position of fulltime Team Leader in the Early Learning
Program from around March 2005, to September 8, 2017, at which time
she was earning $25.45 per hour.
9.In a letter dated July 17, 2017, Marni Stefan, Manager of Human
Resources for Community Living, notified Heather that she was being laid-
off from her fulltime position as a Team Leader effective September 8,
2017, as a result of the closure of the Early Learning Program. A copy of
this letter is attached as Tab 1 to this ASF.
10.The letter provided Heather with the following employment options:
1.Displace a FT RECE at the Tillsonburg Children's Centre. Article 15.03
will be in effect.
2.Accept an offer to buy out your employment contract. We are able to
offer you 26 weeks of wage continuance at you current rate of pay
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excluding wage enhancement. You may also use your banked vacation
time prior to the 26 week wage continuance and receive a payout for
your vacation accrual between Oct 17, 2016 and your last day worked.
Your extended health care benefits will continue for the duration of your
wage continuance with the exception of long term disability. Also, we will
continue to contribute 4% to your Group RSP and will waive the
mandatory 2% employee deduction. Finally, during this 26 week period
you will not be eligible for other employee benefits such as vacation pay,
public holiday pay, float pay or sick pay.
3.Accept a lump sum payout equivalent to 26 weeks' pay, including
payouts for unused time off banks, vacation accrual, excluding sick time.
11.In a letter to Ms. Stefan, dated July 21, 2017, Heather confirmed her
choice to exercise her displacement rights under Article 15.03 of the
Collective Agreement (Option 1), accepting the full-time (65-80 hours)
RECE position at the Tillsonburg Children's Centre. The RECE position is
a lower rated classification than Team Leader, and at that time, paid
$21.71 per hour. A copy of this letter is attached as Tab 2 to this ASF.
12.In this letter, Heather also requested that she be paid out the difference
between the hourly rates of the two positions in respect of her vacation,
float, and sick time up to the date of her displacement, September 8,
2017.
13.In a letter dated August 4, 2017, Ms. Stefan advised Heather of the terms
of her displacement, as follows:
1.You will return to the Tillsonburg Children's Centre as a Full Time 65-80
hours RECE effective September 11, 2017. You will receive your notice
of schedule as per the collective agreement.
2.All banked vacation, float and overtime hours remaining after September
8, 2017 will be calculated. You will be paid out the difference between
your Team Leader rate and the RECE rate. Thereafter you will be paid at
the RECE rate for any time used. You will receive a copy of our
calculations prior to the payout on September 22, 2017.
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3, You will have displacement rights under Article 15,03 until September 7,
2019.
14.A copy of this letter is attached as Tab 3 to this ASF.
15.In a letter dated August 30, 2017, Ms. Stefan detailed the amounts that
Heather would be paid out for vacation time, float time, and overtime. The
amounts were calculated as the difference in the hourly rates between the
Team Leader and RECE positions, totalling $389.90. A copy of this letter
is attached as Tab 4.
16.In an email sent to Ms. Stefan on September 12, 2017, Heather identified
an error in the amount of hours attributed to her vacation bank (she should
have been attributed 88 hours, not 80). Heather also asked whether she
would receive the value of the vacation that she had been allegedly
accruing between her anniversary date (March 5, 2017) and the date of
her displacement (September 8, 2017). A copy of this email is attached
as Tab 5 to this ASF.
17.In a letter dated September 22, 2017, Ms. Stefan updated the vacation
bank 88 hours. A copy of that letter is attached as Tab 6 to this ASF.
18.In an email of the same date September 22, 2017, Ms. Stefan indicated
that the value of Heather's allegedly accruing vacation at the Team Leader
rate would not be paid out to her like her banked vacation time had. A
copy of this email is attached as Tab 7 to this ASF.
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19.In a letter dated October 10, 2017, Sue Roloson, Manager of Licensed
Childcare Programs, again denied Heather's request to be paid for the
value of her allegedly accruing vacation to the date of her displacement.
The letter indicated that the basis for this denial is the fact that the
allegedly accruing vacation was not available to Heather until 2018. A
copy of this letter is attached as Tab 8 to this ASF.
20.The Union filed Grievance 2017-0161-0001 in respect of this denial.
21.If the Union is successful on this grievance, the parties agree that the
value of Heather's grievance is $ 464.50.
B. Sandra Ross
22.Sandra Ross is a RECE who has been employed by Community Living
since February 5, 2005.
23.She held the position of fulltime RECE position in the Children's Centre at
the Livingston Centre from around March, 2013, to September 9, 2017, a
which time she was earning $21.71 per hour and her anniversary date was
July 1.
24.In a letter dated August 2, 2017, Ms. Stefan notified Sandra that she was
being displaced from her fulltime RECE position effective September 11,
2017, as a result of the closure of layoffs flowing from the closure of the
Children's Centre and Early Learning Program. A copy of this letter is
attached as Tab 9 to this ASE.
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25. The letter provided Sandra with the following employment options:
1.Accept an offer to buy out your employment contract. We are able to
offer you 12 weeks of wage continuance at your current rate of pay
excluding wage enhancement. You may also choose to use your banked
vacation time, banked over time and float time prior to the 12 week wage
continuance and receive a payout for your vacation accrual between July
1, 2017 and your last day worked, September 8, 2017. Your extended
health care benefits will continue for the duration of your wage
continuance with the exception of long term disability. Also, we will
continue to contribute 4% to your Group RSP and will waive the
mandatory 2% employee deduction. Finally, during the time you are
using your banked and accured vacation as well as the 12 week period
you will not be eligible for other employee benefits such as vacation pay,
public holiday pay, float pay or sick pay. Article 15.03 would not apply.
2.Accept a lump sum payout equivalent to 12 weeks' pay, including
payouts for unused time off banks, vacation accrual, excluding sick time.
Article 15.03 would not apply.
3.Decline the above offers and await results of your displacement. Article
15.03 would apply.
26. Sandra chose Option 3, to forego the severance offers and await the
results of her displacement. A copy of a letter dated August 4, 2017, from
Sandra to Ms. Stefan is attached as Tab 10 to this ASF.
27. In a letter dated September 1, 2017, Ms. Stefan notified Sandra that she
had been displaced to a lower paying part-time (up to 64 hour) Classroom
Assistant position, which also required Sandra to pay $56.32 per day to
maintain her extended health care benefits. At that time, the hourly rate of
pay for a Classroom Assistant was $19.80. The letter also provided that
Sandra would be paid out "all accrued banks" at the higher hourly rate of
her Head Teacher position. A copy of this letter is attached as Tab 11 to
this ASF.
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28.In a letter dated October 10, 2017, Ms. Roloson confirmed that Sandra,
like Heather, would only be paid out for the value of the time available to
her as at the date of her displacement, including credited ("banked")
vacation time, float time, and overtime. The value of this time was
calculated as the difference in the hourly rates between Sandra's former
full-time RECE position and her Classroom Assistant position, totalling
$244.48. The letter set out the calculations for the same. A copy of this
letter is included as Tab 12 to this ASF.
29.The letter indicated that Community Living would not pay Sandra the value
of her allegedly accruing vacation for the period between her anniversary
date (July 1, 2017) and the date of her displacement (September 9, 2017),
as it would not be available to her until her next anniversary date (July 1,
2018),
30.Sandra was not paid out the value of her allegedly accruing vacation and
the Union filed Grievance 2017-0161-0002.
31 If the Union is successful on this grievance, the parties agree that the
value of Sandra's grievance is $ 74.49
C. Teressa De LeeBeeck
32. Teressa De LeeBeeck is a RECE who has been employed by Community
Living since May 24, 2004.
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33.Teressa held the position of fulltime Classroom Assistant in the Early
Learning Program at St. Joseph's School from around May, 2016, to
September 8, 2017, at which time she was earning $19.80 per hour and
her anniversary date was July 1.
34.In a letter dated July 17, 2017, Marni Stefan, Manager of Human
Resources for Community Living, notified Teressa that she was being laid-
off from her fulltime position as a Classroom Assistant effective
September 8, 2017, as a result of the closure of the Early Learning
Program. Ms. Stefan noted that Community Living would be "providing
employment options to all displaced staff in order of seniority". A copy of
this letter is attached as Tab 13 to this ASF.
35.In a letter dated July 24, 2017, Ms. Stefan advised Teressa of her
employment options, which were as follows:
1.Accept an offer to buy out your employment contract. We are able to
offer you 13 weeks of wage continuance at your current rate of pay
excluding wage enhancement. You may also use your banked vacation
time prior to the 13 week wage continuance and receive a payout for
your vacation accrual between July 1, 2017 and your last day worked.
Your extended health care benefits will continue for the duration of your
wage continuance with the exception of long term disability. Also, we will
continue to contribute 4% to your Group RSP and will waive the
mandatory 2% employee deduction. Finally, during this 13 week period
you will not be eligible for other employee benefits such as vacation pay,
public holiday pay, float pay or sick pay. Article 15.03 would not apply.
2.Accept a lump sum payout equivalent to 13 weeks' pay, including
payouts for unused time off banks, vacation accrual, excluding sick time.
Article 15.03 would not apply.
3.Accept a transfer to a full time sleep night position with Adult Services.
This will allow you to maintain your Group RSP's, full benefits and
vacation entitlements. Article 15,03 will apply.
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4. Decline all above offers and await results of your displacement.
36. A copy of this letter is attached as Tab 14 to this ASF.
37. Teressa chose to exercise her displacement rights (Option 3), and agreed
to be displaced to the full-time Sleep-Night position with Adult Services, a
classification which is in part lower paying than Classroom Assistant. At
that time, the Sleep-Night position paid $21.02 per waking hour (which
comprises 41% of hours worked) and minimum wage per resting hour
(which comprises 59% of hours worked).
38. Teressa requested that she be paid out the difference between the hourly
rates of the two positions in respect of her vacation, float, and sick time up
to the date of her displacement, September 8, 2017.
39. In a letter dated August 30, 2017, Ms. Stefan advised Teressa of the
terms of her displacement, as follows:
1.You will begin orientating in Adult Services on Tuesday September 12,
2017 and will begin your first rotation on Friday September 15, 2017.
2.As you are remaining in a full time position, your extended health care
benefits, GRSP employer contributions and accrued sick and vacation
times will remain accruing at your prorated hours.
3.All credits will be carried over to your position. Credits earned will be paid
at the applicable rate for the Job you are doing.
4.Displacement rights are in effect until September 10, 2019.
40. A copy of this letter is attached as Tab 15 to this ASF.
41. In a letter dated October 10, 2017, Wendy Marve, Manager of Support
Teams for Community Living, confirmed that Teressa would only be paid
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out for the value of the time available to her as at the date of her
displacement, including credited vacation time, float time, and overtime.
The value of this time was calculated as the difference in the hourly rates
between the Classroom Assistant and Sleep-Night positions, totalling
$430.52. The letter sets out the calculations for the same. A copy of this
letter is included as Tab 16 to this ASF.
42.The letter indicates that Community Living would not pay Teresa the value
of her allegedly accruing vacation for the period between her anniversary
date (July 1, 2017) and the date of her displacement (September 9, 2017),
as it would not be available to her until her next anniversary date (July 1,
2018).
43.Teressa was not paid out the value of her allegedly accruing vacation and
the Union filed Grievance 2017-0161-0003.
44.If the Union is successful on this grievance, the parties agree that the
value of her grievance is $ 162.14.
Relevant Provisions of the Collective Agreement
ARTICLE 15- LAYOFF, DISPLACING AND RECALL
15.01
Layoff
15.02 Should layoffs become necessary, the Employer shall notify the Union and
the employees affected as soon as reasonably possible and in any case at least one
month in advance of the lay-off
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The Employer and the Union shall meet and attempt to find methods of
minimizing the effects of such lay-offs. If an agreement is reached as a result of
such meeting, it shall be reduced to written form and executed by the parties.
Failure to comply with the terms of any such agreement may become the subject
matter of a grievance.
15.03 Displacing
An employee who is laid off will be given the opportunity of displacing an
employee within the same classification at the least senior position first. If there is
no lesser senior position in that classification, the senior employee will then move
to the next lower classification and displace the least senior position, provided the
senior employee has the skills, ability and qualifications to perform the job. All
displaced employees will have the same opportunity to displace as outlined above.
An employee who, as a result of exercising displacement rights, is moved to a
lower rated position, shall be paid at the pay rate that is closest to the rate of pay
she was earning prior to the move. If the Employer proposes to hire into the
higher rated classification in the two years next following displacement of the
employee from that higher rated classification, the employee earlier displaced
shall first be offered the higher rated position, before it is posted, and without a
job competition. This offer shall only be required to be made one (1) time in the
two (2) year period.
15.04 Recall.
a)The Employer, upon rehiring, agrees to do so in order of seniority,
provided that the eligible employee has the qualifications for the position which is
vacant. The Employer also agrees to rehire employees from the recall list who are
properly qualified for the available pos_itions, before hiring from the open
market.
b)The employee recalled and reinstated to her foimer position shall receive
the appropriate rate of pay for that position at the time of recall. Any employee
recalled and reinstated to any other position will receive the appropriate rate of
pay for such position at the time of recall.
ARTICLE 16- SICK LEAVE AND BENEFITS
16.01 a) All non-probationary full-time and part-time employees covered by this
Agreement shall be eligible for a credit of one (1) "prorated" day accumulated in
hours for each month of actual at work service with the Employer. Sick leave
credits are granted subject to the conditions set forth in this Article. Sick leave
shall be cumulative to a ceiling of sixty (60) prorated days accumulated in hours.
1'3
Sick leave shall not be accumulated when an employee is absent for a period in
excess of thirty (30) consecutive days on Workers Compensation, or Leave of
Absence, or maternity/parental leave unless otherwise specified in this Collective
Agreement.
b) For the purposes of this Agreement, a "prorated" day is a day the length of
which in hours is that percentage of eight that the number of hours worked by that
employee in a biweekly period is of eighty.
16.03 If a full-time or part-time employee is laid off for whatever reason and
returns to work, she shall not receive sick leave credit for the period of such
absence.
ARTICLE 19 —ANNUAL VACATION
19.01
(a)Full and Part-time employees regularly scheduled to work in excess of 48
hours bi-weekly will be entitled to annual vacation and vacation pay based on
length of continuous service as set out below.
Vacation credits shall not be accumulated when an employee is absent for a
period in excess of thirty (30) consecutive days on Workers' Compensation, Sick
Leave or Leave of Absence unless otherwise specified in this Collective
Agreement.
(b)Casual employees and part-time employees regularly scheduled to work
no more than 48 hours bi-weekly shall receive four (4) percent vacation pay paid
on the regular biweekly pay cheque and shall not be entitled to any other
provision of this article.
Casual employees shall establish a promotion date upon promotion to a full-time
or part-time regularly scheduled position. Vacation credits will thereafter be
credited on the employee's promotion date. The employee will be credited with 10
"prorated" vacation days after one year in-the full-time position as per Article
19.02.
19.02 (a) Length of Vacation:
1 year anniversary date 10 "prorated" working days
2 year anniversary date up to and including
4 year anniversary date 15 "prorated" working days per year
5 year anniversary date up to and including
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9 year anniversary date. , 20 "prorated" working days per year.
10 year anniversary date up to and including
19 year anniversary date 25 "prorated" working days per year.
20 year anniversary date and each anniversary date following , .
30 "prorated" working days per year.
(b)"Prorated" vacation days will be credited on the employee's anniversary date.
"Prorated" vacation days will be recorded in hours. Vacation hours will be
subtracted as they are taken.
All employees will have the option of being paid out wages for five (5) pro-rated
vacation days, after the employee's two (2) year anniversary date. •
(c)The employee must request full shifts as vacation.
19.03 For the purpose of recording vacations:
a)For an employee hired from a part-time position or an employee hired
directly into a full-time position, the vacation period. shall be from the anniversary
date of employment (date of hire).
b)For casual employees promoted into a part-time or full-time position, the
vacation period shall be from the promotion date.
19.04 Any employee with less than one (1) year of service at the time his/her
employment is terminated shall, notwithstanding anything to the contrary herein,
be entitled to vacation pay in accordance with the Employment Standards Act.
19.05 Vacation will be taken within the twelve (12) month period after the
vacation is credited. The employee shall have the option of carrying over one
week into the subsequent vacation year or of being paid out (5) pro-rated vacation
days, to be paid on the next pay period after notice by the employee is given as
long as the Employer has been given three (3) months notice.
ARTICLE 21 -HOURS OF WORK
21.01 a) A full-time employee is an employee who is regularly scheduled to work
between 65 and 80 hours in a two (2) week period.
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21.06 When a full-time or part-time employee moves to another position or
separate salary level, the time owing to her will be compensated in the following
way: (time off)
a)Time owing must be taken prior to commencing her new position or salary
level at the rate in which it was earned in the previous position.
b)If management requests an immediate move to the new position or salary
level, the employee will be allowed paid time owing from the previous position at
her new salary scale or position or previous salary scale or position whichever is
higher.
c)If an employee selects to defer time owing when leaving a position or
salary level she will be paid at the rate which is the lower of the two.
Argument
Union
The Union began its submission by noting that although the primary issue was the
proper interpretation and application of article 19 concerning vacation, article 15 was
quite relevant to the interpretation of article 19. It noted that the Employer had taken the
position that there was no vacation entitlement at all until vacation time was credited to
an employee on his or her anniversary date. The Union submitted that this was a far too
restrictive interpretation of article 19.
The Union argued that article 19 contemplates that vacation is in fact accruing
between the employee's last anniversary date and the date on which she is terminated or
transferred to a lower position. In the Union's view, in the circumstances faced by the
three grievors, they are entitled to their vacation pay at the rate that applied at the date of
their displacement. It submitted that article 19 contemplates that vacation pay is being
earned over time and on a prorated basis on a proper interpretation of article 19,
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In putting forward its interpretation of Article 19 the Union relied on well
accepted principles of arbitral interpretation as set out in Brown and Beatty, Canadian
Labour Arbitration, Fourth Ed., at pars. 4:2000 tO 4:2153. Those principles include: that
the fundamental object of collective agreement interpretation is to discover the intention
of the parties who agreed to it and that the parties are assumed to have intended what they
have said in the express provisions of the agreement; the implication of a collective
agreement term is limited to situations where it is necessary on occasion to give effect to
the collective agreement, and where both parties would have agreed to its insertion
without hesitation; when faced with the choice between two linguistically permissible
interpretations, arbitrators are guided by the purpose of the particular provision, the
reasonableness of each possible interpretation, administrative feasibility, and whether one
of the possible interpretations would give rise to anomalies; in searching for the parties'
intention with respect to a provision of an agreement the language should be given its
plain ordinary meaning, unless to do so would lead to some absurdity or inconsistency
with the rest of the collective agreement or unless the context reveals the words were
used in some other sense; in construing a collective agreement it should be presumed that
all of the words were intended to have some meaning and that they were not intended to
be in conflict; to the extent the only permissible meaning leads to conflict, such conflicts
can be resolved by resort to other presumptions such as the specific should prevail over a
general provision, and a clear expression of intention is required to confer a financial
benefit; headings within the collective agreement may be referred to in order to explain
the section or sections that fall under them; a preamble may also be used as a guide to
interpretation of the agreement although it has no independent validity as the source of
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rights and cannot override any provision of the agreement; and general purpose clauses
are seen in much the same light, notwithstanding that they do exist as substantive
provisions of the agreement; language in the collective agreement should be read and
construed in the context of the sentence, section and the agreement as a whole, resulting
in a contextual interpretation of the language.
The Union also asked me to take note that in the context of labour law vacation is
recognized as being unique in nature as a fringe benefit in that it is viewed as being part
of a compensation package or total earnings for service. In support of this argument the
Union provided me with arbitral authority in support of the principle that such a benefit is
not to be taken away or reduced except by express provision of the collective agreement.
The Union also pointed to the language of article 15.02 and 15.03 as having
particular significance in the interpretation of article 19. Article 15.02 provides that the
Employer and Union will meet and attempt to find methods of minimizing the effects of
such layoffs when they occur. It argued that this was consistent with the principle that
vacation entitlement should not be reduced except by express provision. Similarly, the
language of article 15.03 provided that where an employee as a result of exercising
displacement rights is moved to a lower-rated position, she shall be paid at the pay rate
that is closest to the pay she was earning prior to the move. The Union submitted that
both of these clauses contemplate that in the unique circumstances of a layoff, the
Employer will do what it can to mitigate the harm to employees who were affected
detrimentally by the layoff.
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The Union then turned to the specific language of article 19.01 and article 19.02.
Article 19.01 (a) indicates that full-time employees are entitled to an "annual vacation
and vacation pay" based on length of continuous service. The Union noted that the
concepts of vacation pay and vacation time are treated as two separate benefits arising
from length of service. Both article 19.01 and article 19.02, setting out the length of
vacation days to be earned based on years of service, indicated that it is the employee's
continuous service that sets the level at which they get vacation and this indicates the
level for both the time component of vacation and the monetary component. Thus the
level of continuous service sets the degree of entitlement for each employee. The Union
also noted that the second paragraph of article 19.01 (a) shows that the parties
contemplated expressly that vacation credits were being accumulated over time. It does
this by indicating the vacation credits shall not be accumulated when an employee is
absent for a period in excess of 30 days for certain specified reasons. It contends that this
language supports the view that vacation credits are being accumulated as time passes
throughout the year between anniversary dates.
The Union also relied on the fact that all three grievors, when they were offered
several different options in response to the layoff, were expressly offered a severance
option that included vacation pay accrual up to the date of severance in addition to
banked vacation time. The Union argues that this was evidence that the Employer
understood article 19 to mean that vacation accrues over time even if not credited for use
in terms of time off until they reached their anniversary date. In further support of this
argument the Union noted that it is well understood in labour relations that vacation has
two components, both time off and money and that these two things are divisible. At
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issue here is vacation pay and entitlement for the period in question not the time off
Vacation pay is understood as a form of wages owed to the employee for service
rendered, and it accrues as the employee works.
In the context of a termination, an employer is required in making severance
payments to provide the terminated employee with a vacation pay entitlement in the
amount that has accrued as of the date of termination. The Union noted that this was
reflected in severance offers made to the 3 grievors and is provided for in the
Employment Standards Act as well.
The Union provided arbitral authority for the principle that vacation entitlement
cannot be limited or reduced in the absence of express language requiring such reduction
(Solo Basic Ltd. and LA.M, Local 1168 (1976) 11 LAC (2d) 328 (Beck)). That decision
dealt with the entitlement of laid off employees to receive vacation pay in accordance
with the provisions of the agreement that applied to employees with one year or more
service as of June 30th , Although the laid off employees had the necessary one year of
service prior to layoff the Employer took the position that because they were on layoff on
June 30`" they were not entitled to receive vacation pay under that article but only entitled
to the 4% vacation pay provided for employees with less than one year service. In
upholding the grievance the board recognized a general arbitral principle that "absent
such specific terms in a collective agreement which cut down or reduce the entitlement to
vacation pay, such terms will not be read in or interpreted out of a collective agreement
that provides for vacation pay based on service." The board in Sob also pointed to the
decision of Arbitrator Weatherill in Ekco Canada Lt. and UAW, Local 124 (1970), 22
LAC 220, as a particularly strong case in support of this principle. The collective
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agreement therein required an employee to be "on the payroll as of May 30f1b, to be
eligible "for vacation" An employee was laid off from April to July. The company took
the view that not only was he not eligible for vacation time but that he was only entitled
to vacation pay as required under the ESA, not the vacation pay provided for in the
agreement for someone with his years of service. The board in that case held that
although the grievor was not entitled to vacation time as per the agreement because they
were laid off on May 30th, vacation pay was an independent benefit and that express
wording concerning disentitlement to vacation pay would be required to deprive
employees of vacation pay that had been earned. The leading decision of Arbitrator
Johnston in Northern Electric Co. Ltd and UAW, Local 1530 (1974), 6 LAC (2d) 181, is
also relied on by the Union as strong authority in support of this general principle
concerning vacation and vacation pay entitlements.
The Union submits that the language of article 19.01(a) provides that vacation pay
is based on length of service and the parties have turned their minds to cases where the
vacation credits will not accrue in paragraph 2 of that article. But the Union submits that
there is no express language to specifically exclude or reduce an employee's earned
vacation pay entitlement where they are subsequent transfen-ed to a lower paying
classification due to the exercise of displacement rights under the collective agreement.
In further support of its argument the Union relied on Printing Specialties &
Paper Products Union, Local 466 & Corrugated Paper Box Co. (1955) 6 LAC 102
(Laskin, Chair). The Union argued this decision is supportive of its submission in two
respects. First it indicates that it there is a well accepted distinction between the concepts
of vacation time and vacation pay as two independent benefits and any attempt to use an
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anniversary date for degree of vacation time entitlement as a cut-off or qualifying date for
vacation pay is to fail to recognize that distinction. Second, it recognizes that vacation
pay is earned from day to day of continuous service and there can be little dispute that a
person is entitled to such pay unless the agreement prescribes a condition precedent that
is unfulfilled. Thus in the case itself the fact that a number of employees were terminated
prior to reaching their anniversary date for another year of vacation entitlement, did not
deprive them of entitlement to vacation pay accrued from their last anniversary date to
the date of their termination under the formula set out it the vacation clause. The Union
submitted that the same reasoning should apply here to the grievors' vacation pay
entitlement up to the date of their displacement into a lower classification despite the fact
they did not reach their next anniversary date prior to the transfer.
In terms of remedy the Union seeks a declaration concerning the proper
interpretation of the article 19 and it application to the circumstances of this case. It also
requested an order that the Employer be required to pay to the grievors the amounts
indicated at paragraphs 21, 31 and 44 of the ASF as the shortfalls resulting from the
Employer's failure to provide them with vacation pay in accordance with article 19 of the
collective agreement.
EnTloyer
The central point of the Employer's argument is the contention that under the
proper interpretation of article 19, any rights to vacation pay or vacation time are
inchoate or floating and undefined rights until they reach their anniversary date. It noted
that the three grievors all had more than one year of service so each of them had an
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anniversary date at which time their entitlements to vacation time and vacation pay would
solidify. The Employer further noted that its contention for the significance of the
anniversary date is not undermined by the reference in article 19.02 to "prorated"
vacation days being credited to the employee on the employee's anniversary date because
the term "prorated" is defined in article 16.01(b) as being a day for which the length in
hours is determined based on the number of hours the employed worked in a two week
period as compared to 80 hours. Thus it was not a reference to a rate being determined
by the length of time worked in a classification since their last anniversary date.
Thus the Employer contends that there is no vacation pay entitlement for the
grievors to rely on to support their claim for vacation pay differential unless and until
they reach their next anniversary date. The Employer submitted that this argument is
supported by the fact that under the language of article 19 if an employee had an
anniversary date of January 1st and she then used all of her vacation entitlement by May
1st she would not be entitled to tap into vacation credits for the next year or vacation pay
for the next year if she wanted to take more vacation in the fall of that same year, prior to
reaching her next anniversary date. It noted that this point is made clear by the language
of article 19.05 which allows for a limited carry over of unused vacation time to a
subsequent year but does not allow for vacation time to be taken prior to reaching the
anniversary date at which it is credited. In short, they cannot be taken prospectively.
The Employer argued that this language, focussed as it is on anniversary date,
should also govern vacation pay entitlement where an employee moves from one job
classification rate to another between one anniversary date and the next. Thus again if an
employee's anniversary date is on January 1.st and on July 1 they are moved to another
lower paid job classification, then on the next January 1st , when vacation credits go into
the employee's bank, the employee is only to be paid the vacation pay at the rate of pay
they are earning on the anniversary date. The Employer submitted that this result might
be different if the collective agreement (as some do) had a vacation clause that provided
for vacation time being earned at a rate of I or 1,5 days per month. In such cases the
Employer submitted, there would be a basis for an argument of vacation time and pay
accruing monthly and requiring that vacation pay be altered based on classification rate
that applied in the month in which vacation time was credited, It submits that the
omission of such a provision in this agreement should be seen as meaningful for the
interpretation of the clause and lead me to find that the Union claim to reach backwards
to a rate of pay that no longer applies on the anniversary date is an overreach.
The Employer further argued that the Union's interpretation would constitute a
double-edged sword that would undermine an employee's vacation rights under article 19
of an employee who was promoted midway through the year to a higher wage
classification. It submitted that if the Union interpretation were accepted then the
promoted employee could not be paid vacation pay at the higher rate despite the fact they
were at the higher rate on their next anniversary date because the pay would have to be
based on the lower classification rate for the first half of the year of time for which the
vacation was credited.
The Employer also contended that its argument concerning vacation rights
accruing only on the anniversary date and not prior to that point is not undermined by the
language of paragraph 2 of article 19.01(a). It submitted that this clause only serves to
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allow the parties to identify the amount by which vacation credits should be reduced if an
employee is absent for periods longer than 30 consecutive days for specified reasons.
The Employer then distinguished the authorities submitted by the Union. It noted
that Sala, supra, dealt with the issue of whether employees on a layoff continue to be
employees entitled to vacation benefits, and that is not an issue here. It argued that all of
the cases submitted by the Union are based on unique facts and the language of their
particular agreement and should not be relied on for general principles of arbitral
treatment of vacation benefits.
The Employer submitted that my task was to attempt to apply the language of the
parties' agreement to circumstances that the parties simply did not contemplate in their
language. Thus this is a case of first instance for the parties and in the Employer's view
there really in nothing in article 15.03 to deal with this issue when a displacement occurs
as a result of a layoff. It noted that the parties have a typical arbitration clause in article
10.02 that prohibits an arbitrator from amending the agreement or substituting a new
provision for an existing one. The Employer submits that the Union interpretation as put
forward is an attempt to get the arbitrator to do just that.
The Employer also submitted that the terms of paragraph 2, (the buyout option) of
the employer letter setting out options to the three grievors facing layoff should not be
read as an admission by the Employer that vacation pay in fact accrues throughout the
year in the months prior to the anniversary date, as argued by the Union. It noted that this
paragraph sets out an option of teiiiiinating employment in consideration for certain
payments offered as incentives to make that option attractive. It does not amount to an
25
interpretation or application of the agreement provisions concerning vacation entitlement
for those employees who choose to exercise their rights to continue their employment
with the Employer. The Employer submitted that its understanding of the meaning and
application of the provisions of the agreement concerning vacation for continuing
employees were clearly set out in its letter to Ms Brazier of Oct. 10/17 in response to her
request for a payout of vacation time accrued at the time of layoff (exh 3, tab 8). That
letter refused such payment on the basis that it was a request to be paid out for vacation
time not available to the grievor until 2018.
Finally, the Employer submitted that the fact the ESA requires an employer to pay
out accrued vacation pay based on service rendered up to the point of teii iination in the
case of an employee termination does not impact on the application of language in the
agreement to the circumstances of employees who, despite a layoff notice, are able to
exercise rights under the agreement to continue their employment.
Union Reply
In reply to the suggestion that the Union was asking me to read into the agreement
a new clause that did not exist, the Union acknowledged that this case involved an
exercise in interpretation in a unique circumstance that was not specifically addressed by
the agreement. However, it pointed me to the language of Article 15.02 in which the
parties did direct their minds to the circumstances of layoff and agreed that the Employer
would do what it could to minimize the effects of layoffs, in terms of dealing with
circumstances not specifically addressed by the agreement. It further submitted that the
spirit of article 15.02 is further reflected in the wording of article 15.03 concerning the
26
manner in which the exercise of displacement rights would be carried out so as to
minimize the hall iful effects of displacement.
In response to the Employer argument that the Union's position on these
grievances could result in harmful consequences for the vacation entitlement of
employees who are moved to a higher classification between anniversary dates, the
Union offered two points. First it submitted that the language of article 15.03 concerning
displacement as a result of a layoff does not appear to contemplate employees being able
to move into higher classifications as a result of displacement. As such it does not appear
to allow for promotion by displacement in a layoff situation. Second it pointed to article
21.06 dealing with overtime, which states in paragraph (b) that where the Employer
requests an immediate move to another position or separate salary level the employee
will be provided with paid time owing from her previous position at the higher rate of her
new salary scale or her previous salary scale. It notes that although this provision deals
with a different aspect of compensation, it shows a preference by these parties to preserve
any entitlement to compensation that has been earned at the time of transfer to a new
position.
Finally, the Union argued that it would be the wrong result to require that
employees who have been affected detrimentally by a lay off and have exercised their
displacement rights to choose to remain with the Employer by moving to a lower rated
position would then also have to give up the value of their accrued vacation pay. It noted
that if they had chosen the severance option they would have received their accrued
vacation pay at the rate at which it had accrued. Also had they actually gone on layoff
they would have received their vacation benefits at the rate at which they were earned
27
when they were recalled. It submitted that an interpretation of the vacation language that
singled out the loyal employee who stays on and exercises displacement rights to move
into a lower position as losing the benefit of the vacation pay at the higher rate at which it
was earned would be the wrong result in the circumstances. The Union noted that it was
seeking, in addition to a declaration, an order for a lump sum payment for the difference
in rates of vacation pay for the time spent in the higher rated position prior to
displacement.
Decision
After careful consideration of the submissions of the parties, the provisions of the
collective agreement, and the arbitral authority provided by the parties, I have decided
that the three grievances before me must be upheld. Therefore a declaration and order for
compensation as requested by the Union will be issued (see below). My reasons for
upholding the grievances are as follows.
First, I note that both parties appeared to acknowledge that the language of the
vacation provisions of this collective agreement do not directly or expressly address the
specific circumstances of the case before me. Thus, in carrying out my obligation to
construe the relevant terms of the agreement it is my object to discover the intention of
the parties by reading their words in their entire context, in their grammatical and
ordinary sense, harmoniously with the scheme of the agreement and its object (see Brown
and Beatty, supra, at par. 4:2100).
I am in agreement with the Union's submission that the plain ordinary meaning of
the language of the relevant provisions of the collective agreement, when considered in
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the light of the context of other provisions of the agreement, the relevant arbitral
jurisprudence on the nature of vacation time and vacation pay entitlements, and the
provisions of the Employment Standards Act concerning vacation pay entitlements for
terminated employees, supports the view that entitlement to vacation pay is intended to
be a component part of an employee's overall compensation package to be earned and
accrued on the basis of continuous service for the employer.
Looking first at the plain ordinary meaning of the language at issue, I begin with
the wording of article 19.01(a).
Full and Part-time employees regularly scheduled to work in excess of 48 hours
bi-weelcly will be entitled to annual vacation and vacation pay based on length of
continuous service as set out below. (emphasis added)
Vacation credits shall not be accumulated when an employee is absent for a
period in excess of thirty (30) consecutive days on Workers' Compensation, Sick
Leave or Leave of Absence unless otherwise specified in this Collective
Agreement.
The wording of the first paragraph is consistent with recognition by the parties
that vacation time and vacation pay are two separable benefits or forms of compensation
that are earned by employees by the length of their continuous service with the employer.
I note here that this recognition by the parties of vacation time or "vacation days" as a
separable benefit from "vacation pay" is reinforced or repeated in other provisions of the
section dealing with vacation. Thus art. 19.02 (b) states "Prorated vacation days will be
credited on the employee's anniversary date" and also states that "prorated vacation days
will be recorded in hours." However, article 19.04 provides:
Any employee with less than one (1) year of service at the time his/her
employment is terminated shall, notwithstanding anything to the contrary herein,
be entitled to vacation pay in accordance with the Employment Standards Act.
29
This understanding of vacation time and vacation pay as two related but separable
components of the employee's compensation package is consistent with the broader
context of arbitral consensus on the nature of vacation pay and vacation time as reflected
in the authorities provided by the Union (see in particular the Sola, supra decision and
other cases referred to therein). Thus when the language of article 19.01 (a) is interpreted
in the context of the entire section on annual vacation and the broader arbitral context in
which it was negotiated, it is my view that the parties understood and intended the
vacation benefit to be comprised of two related but separable components (vacation time
or days and vacation pay) of the compensation package for each employee, and that the
extent of each component of the benefit was to be based on the length of continuous
service. Further it is my view that, when given its plain ordinary meaning, the wording
of the second paragraph of art. 19.01(a) is consistent with the parties' having the intention
that the vacation pay benefit, as a vacation 'credit' and a component of the overall
compensation package, is a part of the compensation package that is earned and
accumulated on a day to day basis during an employee's service with the employer,
subject to the specific exceptions for absences of 30 days or more for reasons specified in
that sub article. This interpretation of the meaning of article 19.01(a) is further supported
by the wording of article 19,04 (referred to above), and the provisions of section 38 of the
Employment Standards Act.' Both the collective agreement context and the statutory
S. 38 If an employee's employment ends at a time when vacation pay has accrued with respect to the
employee, the employer shall pay the vacation pay that has accrued to the employee in accordance with
subsection 11(5). Employment Standards Act, 2000, S.O. 2000, c. 41. I note that this provision of the
ESA is also deemed to be incorporated into the collective agreement by virtue of the SCC ruling in Parry
Sound (District) Social Services Administration Board v. 0.P.S.E.U., Local 324, [2003] 2 S.C.R. 157, 2003
SCC 42.
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context under which that agreement was negotiated reflect an understanding of vacation
pay as a component of overall compensation earned by length of continuous service with
the employer and accrued as that service is rendered.
I note as well that the only express provision calling for a reduction of vacation
pay or non-accrual of vacation pay as it is earned by continuous service is the second
paragraph of 19.01(a) referred to above. This is significant because the arbitral
authorities provided support the Union position that there is arbitral consensus in support
of the following principles stated by Arbitrator Johnston in Northern Electric Co. Ltd.
and UAW, Local 1530 (1974), 6 LAC (2d) 181. That decision first noted that vacation
pay is a fringe benefit and part of the total wage structure contemplated by the collective
agreement. It recognized that the parties could agree to express provisions for reduction
in vacation entitlements, including vacation pay, in specific circumstances, such as
absences due to certain causes. However, it concluded that in the absence of such
specific terms in a collective agreement that cut down or reduce vacation pay
entitlements, such terms will not be implied into a collective agreement that provides for
vacation pay based on service (at pages 183-184, cited in Sola, supra at pages 330-31).
These same principles are adopted in Ekco Canada Ltd. and UAW Local 124 (1970), 22
LAC 220 (Weatherill). That case in my view is particularly relevant to the circumstances
of the grievances before me, in that although it was found that the grievor was not on the
payroll due to layoff on the date specified in the agreement for entitlement to vacation
time, the arbitrator held that he was entitled to vacation pay as an independent benefit
earned by length of service in the absence of clear express wording to deny him that
benefit as part of his compensation package. Similarly in the case before me, while
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vacation time could not be credited or taken until the anniversary date of the grievors,
that did not negate the grievors' entitlement to vacation pay as an independent benefit
being earned and accumulated as part of their compensation package at the applicable
rates for the job classifications they occupied during the twelve months between
anniversary dates.
The Employer argued that the language of the first paragraph of article 19.02 (b)
and article 19.05 was sufficient to deny the grievors' entitlement to vacation pay at the
rate of the job classification in which they were employed prior to their displacement to a
lower rated position. However, in my view these provisions simply state that "vacation
days" will be credited on the "employee's anniversary date" and make it clear that
vacation days or time cannot be taken until the twelve month period after the vacation is
credited. They make it clear that once an employee uses all of her vacation time for a
given year they cannot take any additional days until they reach their next anniversary
date. However, these provisions do not address the pay rate at which vacation pay is
earned or accumulated. Nor do they attempt to expressly limit or reduce the rate of
vacation pay as a component of an employee's wage package for services rendered to the
wage rate they are being paid at their anniversary date. In my view, in the absence of
any such express provision limiting or reducing the classification rate on which vacation
pay is to be calculated, vacation pay (as a component of the employee's overall
compensation for service rendered) should be calculated and paid based on the
classification rate for the position (or positions) that were occupied during the 12 month
period in which the vacation pay is earned as a component of the employee's
compensation package. While the wording of article 19.02(b) dictates that vacation pay
32
is not to be credited to the employee until she reaches her anniversary date, it does not
expressly curtail, limit or attempt to retroactively reduce the employee's overall rate of
compensation by limiting the calculation of vacation to the classification rate occupied by
the employee on the anniversary date. Thus in keeping with the arbitral principles
recognized in So/a, Northern Electric Co. and Ecko, supra, the vacation pay of the
grievors must be viewed as having been earned and accumulated at the classification rate
that applied to their employment when the vacation pay entitlement was being earned and
accumulated as a component of their compensation package. However, of course such
vacation pay is not due or payable until the employee reaches her anniversary date, or is
terminated in the case of a termination (under the limitations stated in 19.02(b), 19.04 and
s,38 of the ESA).
In my view, although the Employer's proposed interpretation may be
grammatically plausible, it is inconsistent with the parties' intention to view vacation pay
as a benefit earned by length of service that is to form part of the employee's total
compensation package. To give effect to the Employer's argument on the impact of the
language of article 19.02(b) would be to permit the retroactive reduction of an
employee's compensation package for the period in which they were employed in a
higher paid job classification because they ended up being displaced into a lower paid
position as a consequence of a layoff. The unfairness of such a retroactive change to
rates of compensation is perhaps best illustrated by the example of an employee who is
displaced into the lower rated classification a day or two prior to their anniversary date.
While it may be permissible to have collective agreement provisions that have such a
retroactive effect to the detriment of an employee's compensation, provisions having
3'3
such an effect should not be inferred or implied in the absence of clear and express
language dictating such a result.
am somewhat in agreement with the Union submission that the language
adopted by the parties in articles 15.02, 15.03 and 15.04 should be viewed as part of the
collective agreement context and be read as supporting a general agreement by the parties
that they will do what they can to find methods to minimize the effects of layoffs on
affected employees. However, I note that this argument can not be given too much force
in light of the fact that article 15.02 only refers to the parties having a meeting to try to
find such methods and mandates that if they come to an agreement on such methods they
shall reduce it to writing and such an agreement can become the basis for a grievance.
Thus, if the language of the vacation provisions failed to indicate an intention by the
parties to provide for vacation pay as an independent benefit that formed a component of
an employee's overall compensation package that was earned and accumulated by
continuous service, the language of the cited sections of article 15 could not overcome
such a deficit in the absence of an agreement by the parties.
The Employer submitted that a finding in favour of the Union's proposed
interpretation could result in unintended and unfavourable consequences for employees
who for some reason found themselves transferred into a higher paid job classification
between anniversary dates, in that it would require that they not receive vacation pay
based solely on the higher paid position they occupied on their subsequent anniversary
date. While the interpretation I have given to the relevant provisions of article 19 may
well result in some reduction in vacation pay for upwardly mobile employees as
compared to the Employer's proposed interpretation, I have decided that this argument
34
should not negate the plain meaning of the language used in article 19 for several reasons,
First, it is my obligation to interpret and apply the language of the agreement based on
the factual context of the grievance before me and arguments based on the possible
application of that interpretation to hypothetical situations should not be given great sway
unless it can be shown that the proposed interpretation that flows from the language used
by the parties would lead to some absurdity or inconsistency with the rest of the
agreement. The hypothetical put forward by the Employer, that an employee who moves
to a higher position between anniversary dates would have their vacation pay calculated
based on classification rates for the positions they occupied during the 12 month period in
which the vacation pay was earned and accumulated as part of their total compensation
package, does not appear to lead to an absurd or unfair result, nor was it immediately
obvious that it would contradict other parts of the agreement. Indeed it would appear to
be quite reasonable and consistent with the parties' understanding of vacation pay as a
benefit earned by continuous service that forms part of the employee's overall
compensation. As well, the Union noted that the layoff provisions do not appear to allow
for upward movement in the exercise of displacement rights as a result of layoff, meaning
that such cases are much less likely to occur. In addition the Union noted that there may
be other provisions of the agreement that apply to protect the rights of employees to the
higher rate of compensation in the case of an upward transfer for other reasons. For those
reasons I am reluctant to say anything more about the potential application of this award
to hypothetical cases involving a transfer to a higher paid classification between
anniversary dates.
35
For all the foregoing reasons I have decided that the three grievances before me
must be upheld. It is hereby declared that the Employer violated the provisions of article
19 by failing to calculate the vacation pay owing to the three grievors based on the
classification rates and pay received for the positions that they occupied (both pre and
post displacement) during the 12 month period in which the vacation pay was earned and
accumulated as a component of the employee's compensation package. However, such
vacation pay was not due or payable until the employee reached her anniversary date as
required by the language of article 19.02. It is also ordered that the Employer shall pay
each of the grievors the amount stipulated as owing to them in paragraphs 21, 31 and 44
as the shortfall in vacation pay they experienced as a result of the Employer's violation of
article 19.
I shall remain seized to deal with any issues arising concerning the
implementation of this award. I wish to thank counsel for their efficient and effective
presentation of this case.
Signed in Guelph, this 15th day of May, 2019.
Brian Etherington
Arbitrator
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