HomeMy WebLinkAboutP-2017-3151.Tremblay et al.20-07-21 Decision
Public Service
Grievance Board
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Toronto, Ontario M5G 1Z8
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Commission des
griefs de la fonction
publique
Bureau 600
180, rue Dundas Ouest
Toronto (Ontario) M5G 1Z8
Tél. : (416) 326-1388
Téléc. : (416) 326-1396
PSGB# P-2017-3151; P-2017-3253; P-2017-3254; P-2017-3346; P-2017-3348;
P-2017-3349; P-2017-3350; P-2017-3732; P-2017-3733; P-2017-3734; P-2017-3735;
P-2017-3794; P-2017-3795
IN THE MATTER OF AN ARBITRATION
Under
THE PUBLIC SERVICE OF ONTARIO ACT
Before
THE PUBLIC SERVICE GRIEVANCE BOARD
BETWEEN
Tremblay et al Complainant
- and -
The Crown in Right of Ontario
(Ministry of Natural Resources and Forestry) Employer
BEFORE Andrew Tremayne Vice Chair
FOR THE
COMPLAINANT
Eric Tremblay
FOR THE EMPLOYER
SUBMISSIONS
Thomas Ayers
Treasury Board Secretariat
Legal Services Branch
Counsel
Written submissions completed:
June 12, 2020
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Decision
[1] This decision deals with 13 complaints, each filed by a senior manager in the
Aviation Services Section of the Ministry of Natural Resources and Forestry. The
complainants say that a salary allowance, which they have been receiving since 2014
and which they allege is a term and condition of their employment, was improperly
removed by their employer in late 2017. The employer disagrees, arguing that it was
within its rights to issue Management Board of Cabinet Directive 33-66, titled Directive for
the Creation of Classes of Position, Salary Ranges, Remuneration and Transition for
Middle Managers, which incorporated the complainants’ salary allowances into their base
salaries. The employer further argues that the complainants have not identified a term or
condition of their employment that has been breached and that the removal of the salary
allowances (as it has been described by the complainants) does not amount to a breach
of their terms and conditions of employment.
[2] The employer raised two preliminary objections to the Board’s jurisdiction to hear
and determine these complaints. The first objection was about the timeliness of the
complaints, and the Board dismissed that objection in a decision dated February 4, 2020:
Tremblay et al. v. Ontario (Ministry of Natural Resources and Forestry), 2020 CanLII
20407 (ON PSGB). Following the release of that decision, the parties agreed that the
Board would rule on the employer’s second preliminary objection based on written
submissions. The Board dismissed the employer’s second preliminary objection, which
was that the complaints were, in essence, classification grievances, in a decision dated
July 9, 2020.
[3] When the parties agreed that the employer’s second preliminary objection would be
argued in writing, they also agreed that they would exchange written submissions on the
merits of the complaints. After carefully reviewing the evidence and the parties’
submissions, the Board finds that the employer breached the complainants’ terms and
conditions of employment for the reasons set out below.
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Background to the Complaints
[4] In 2014, the complainants started to receive a special salary allowance, which the
employer introduced because Aviation Services was experiencing a retention and
recruitment problem. [Note: the complainants who were hired after 2014 started to
receive the salary allowance effective their individual dates of hire.] They were paid the
salary allowance over and above the normal salary that applied to their classification.
The details are set out in Management Board of Cabinet Directive 33-51 under the Public
Service of Ontario Act, 2006, titled Directive for the Creation of Salary Allowances and
Related Payments (dated January 27, 2014).
[5] According to documents created by the employer, a salary allowance is an approved
pensionable amount paid in addition to an employee’s basic salary rate and under certain
conditions. It is paid bi-weekly and is subject to all deductions, including pension
contributions. It is included in calculating benefits but not included in transactions arising
from a change in status (e.g. promotion) and not included in pay for performance
calculations.
[6] In late 2018, the employer implemented the Management Job Evaluation Project
(MJEP). The main objective of MJEP is to standardize job descriptions for managers
who are in similar roles across the Ontario Public Service (OPS). MJEP was
implemented along with a new compensation plan for managers, which reduced the total
number of classification levels and salary ranges. The overall effect was a complete
reconstruction of the compensation system for managers, including the complainants.
The details are set out in Management Board of Cabinet Directive 33-66 under the Public
Service of Ontario Act, 2006, titled Directive for the Creation of Classes of Position,
Salary Ranges, Remuneration and Transition for Middle Managers (dated November 15,
2016, and reissued on September 12, 2017, and March 20, 2018).
[7] In practical terms, MJEP was used to determine the classification level of all
managerial positions in the new system. Managers were then assigned to a new “class
of position,” each of which has a salary range. A manager’s “pre-MJEP” salary was used
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to determine their placement on the new salary ranges, and rules for pay administration
were devised and set out in Directive 33-66 to assist with the placement. For example, if
a manager’s “pre-MJEP” salary was below the minimum of the salary range in effect for
the manager’s new class of position, the manager would be placed at the minimum of the
new class of position; if the “pre-MJEP” salary were greater than the maximum of the
salary range for the manager’s new class of position, the manager’s salary would not
increase until the maximum caught up to the manager’s salary.
[8] Directive 33-66 also says that if a manager received a salary allowance pursuant to
Directive 33-51, it was to be included in the “pre-MJEP” salary, effectively rolling it into a
manager’s base salary. Going forward, the manager would no longer be eligible for a
salary allowance. This provision is of particular relevance to the complainants, because
they had been receiving a salary allowance since 2014 (or, if they were hired after that
date, effective their individual dates of hire). Moreover, the salary allowance was always
paid in addition to their regular salary and was shown as a separate “line item” on the
complainants’ biweekly pay stub.
[9] While Directive 33-51 was not rescinded, Directive 33-66 says that it prevails in the
event of any conflict between the two:
Conflict
10) In the event of a conflict between this Directive and MBC
Directive 33-51 or any policy, procedure or directive issued by
Management Board of Cabinet or the Public Service Commission
regarding reclassification or assignment applicable to public servants set
out in Schedules 1 and 2, this Directive prevails.
(Directive 33-66, November 15 ,2016)
[10] The complainants frame their position as follows: the employer improperly
“removed” their salary allowance, contrary to their terms and conditions of employment.
They argue that by including the amount of salary allowance in the calculation of the “pre-
MJEP” salary, the employer’s new compensation system has worked to their financial
disadvantage. Instead, the employer ought to have transitioned them to the new system
without consideration of the salary allowance, then placed them in the appropriate salary
range based solely on their base salary. The salary allowance should be added to their
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total compensation at the end, argue the complainants, as it was before MJEP was
implemented.
Statutory Framework
[11] It is useful to briefly review the Board’s statutory framework to place the parties’
submissions in context. The Board only has the powers granted by the Public Service of
Ontario Act, 2006 and the regulations made under that legislation, notably Regulation
378/07, which states as follows:
4. (1) Subject to subsection (2), a public servant who is aggrieved
about a working condition or about a term of his or her employment
may file a complaint about the working condition or the term of
employment with the Public Service Grievance Board,
. . . .
[emphasis added]
The threshold issue between the parties is therefore whether the salary allowance is “a
working condition or . . . term of [the complainants’] employment” to which the
complainants were entitled. The next issue is whether it was improper for the employer
to remove the salary allowance (or, perhaps described more accurately, to no longer treat
the salary allowance as a separate and distinct component of the complainants’ total
compensation). Finally, if the facts disclose a breach of the complainants’ terms and
conditions of employment, the Board must address the issue of whether it can provide a
remedy, and if so, in what form. The complainants bear the onus of demonstrating that
there was a breach of the terms and conditions of their employment.
[12] A review of the Board’s case law in this area shows how the Board has interpreted
and applied this aspect of its statutory mandate. In Ransome v. Ontario (Ministry of
Health and Long-Term Care), PSGB# 2005-2314 (2006), the complainant’s main concern
was that other managers, who were promoted after he was, were being paid more than
him. This was because the employer’s Pay on Assignment policy provided for a
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minimum 3% increase on promotion, and managers who were promoted out of the
bargaining unit after the complainant had received significant wage increases, which
resulted in a higher “entrance salary.” The managerial ranks, on the other hand, had
received smaller increases, so this produced a gap between the complainant and his co-
workers. Although there was abundant evidence of employer policies and directives that
spoke of consistency, fairness, and equity, the Board found that there was no specific
language that entitled the complainant to what he was claiming, which was not to be paid
less than others promoted after him. The Board concluded that the complaint could not
succeed, and in the final paragraph of its decision, said this:
[T]he employer is entitled to set the terms of employment for managers in light
of its estimation of what is required to retain sufficient competent staff, and the
Board is not entitled to “remedy” a situation unless it finds a breach of an
established term or condition or employment, or a sufficient basis to conclude
that the employer conduct is arbitrary, in bad faith, or discriminatory in the
sense of based on some illegal ground.
(Ransome, page 8)
[13] In reaching this conclusion, the Board set out its analysis and made several
important observations:
The issue is primarily a question of contract law. The Board must answer the
question: Is it a term or condition of the grievor’s contract with the employer
that he should be paid the additional money he claims? It is clear that there is
no specific provision which the grievor has identified that would entitle him to
the significant wage increases he claims. His grievance is rooted instead in the
general statements in the employer policy and guidelines about fairness and
equity, which for the purposes of this motion will be assumed to form part of the
grievor’s contract of employment. However, they are general statements of
intention, with no promise to the grievor that sufficiently addresses his claim.
(Ransome, page 6)
. . . .
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Especially in the managerial setting, where contracts of employment are not
collective, but individual, it is not enough to say that it is fair or would be more
fair if a grievor was paid more, or not less, than some other employee. In order
to succeed, a grievance must show that the difference is improper, either
because it offends a specific term or condition of employment, or some more
general principle of law.
(Ransome, page 7)
. . . .
What he argues is that there should be a term or condition of his employment
that would ensure he was paid better than those promoted or hired later. This
is a complaint about the absence of a term or condition of employment of the
kind he would like, rather than a request to remedy a breach of an identifiable
existing term or condition of his employment. The facts before me simply do
not form a sufficient basis for such an argument to succeed. What the grievor is
claiming would be tantamount to creating a term or condition of employment,
rather than awarding a remedy for the breach of an existing term or condition of
employment.
(Ransome, page 7)
[14] In another case involving a similar issue, (D’Intino v. Ontario (Ministry of Community
Safety and Correctional Services), 2017 CanLII 47392 (ON PSGB)) the Board found that
while general policy statements created expectations supporting the result that the
complainant was seeking, specific limitations in the policies that applied to him meant that
he had been paid correctly. See also Rotondo v. Ontario (Ministry of Community and
Social Services), 2017 CanLII 39681, where the Board found that the employer’s policies
had been applied correctly, even though their successive application to the complainant
left him with a salary that was less than some of his colleagues. The Board dismissed
both of these complaints.
[15] The Board’s decision in Hill et al. v. Ontario (Ministry of Community Safety and
Correctional Services), 2006 CanLII 30740 (ON PSGB), involved an issue similar to
Ransome. The complainants had been promoted out of the bargaining unit, and they
argued that the employer had promised, but failed, to maintain their wages at an ongoing
rate of 3% above the salary maximum of the classification of the employees who reported
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to them. The employer argued that there was no breach of any term or condition of the
complainants’ employment. The Board framed the issue as follows:
As noted at the outset of this decision, the issue to be determined is whether
there is a term or condition of the grievors’ employment entitling them to an
ongoing 3% differential above the Correctional Officer rate, or that of their
direct reports. This is essentially a question of contract law. Is it part of the
grievors’ contract of employment that their salary should always be 3% above
that of the correctional officers they supervise? In order to be successful in this
case, the grievors must show that the employer offered and agreed to that
provision.
(Hill et al. page 10)
[16] The Board found that while there were policies that spoke to an initial differential of
3% upon promotion, the documents said nothing about a commitment to maintain that
differential on an ongoing basis. Other statements that had been made by
representatives of the employer were found to be ambiguous and overall did not support
the complainant’s position. The Board considered this evidence and said the following:
As well, if one looks for the interpretation of the different formulations in
evidence which gives as harmonious a reading as possible, of them all, read
together, the evidence does not support a finding that the employer offered and
agreed to an ongoing differential of 3% over the maximum of the CO2 salary
grid, which is what the grievors claim. Rather, it seems more likely that the
offers being made referred to treatment on promotion, rather than an ongoing
differential with salary increases triggered by increases bargained with the
union.
(Hill et al. page 13)
The Board found that its authority was limited to enforcing existing terms and conditions
of employment and that there was no enforceable promise of an ongoing differential of
3% over the bargaining unit pay rates.
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[17] In MacDonald et al. v. Ontario (Ministry of Community Safety and Correctional
Services) PSGB# 2012-4718 et al. (2014), a group of Operational Managers raised two
issues: salary compression with Correctional Officers, and salary inequity as compared to
retired Operational Managers who had been rehired on contract. As in Ransome and
Hill, the remedy sought for the salary compression was an across the board increase to
reinstate a 3% difference between the top-level Correctional Officers and the bottom level
Operational Managers. An additional increase was sought to bring the complainants’
compensation to the same level as the rehired retired managers. The employer asked
the Board to dismiss the complaints without a hearing on the merits because the Board
did not have the authority to issue remedial orders of that kind. That is, even if all of the
facts asserted by the complainants were true and could be proven, there was no prima
facie or viable case of a breach of a term or condition of employment that the Board could
remedy, argued the employer.
[18] The Board found that there was no evidence of any policy, legislation, practice, or
other term or condition of employment which provided for the complainants to be paid in
the manner sought and that was in force at the relevant time. The complainants had
relied on a 2003 statement by the Deputy Minister that all institutional managers should
be compensated 3% above their direct reports as well as two intervening temporary
compression wage adjustments, and the Board found no evidence that these were still in
effect several years later. In doing so, the Board reviewed its test for whether there had
been a breach of a term or condition of employment:
[17] As noted in earlier decisions of this Board, in order for the Board to be able to
award a remedy to a complainant, there must first be an existing term or
condition of employment related to the facts complained of, something that is
part of the complainant’s contract of employment. This is something more than
a belief that something is unfair, no matter how deeply held. Secondly, there
must be a breach of that term or condition of employment, and thirdly, there
must be a link between that breach and a remedy that the Board is empowered
to give.
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Parties’ Submissions
[19] The complainants submit that the salary allowance formed part of the terms and
conditions of their employment. The combination of the supporting documentation,
including written offers of employment, plus the clear and well-defined descriptions of the
salary allowance that can be found in the employer’s documents, clearly demonstrate that
the salary allowance was intended by the employer to form part of the terms and
conditions of their employment, the complainants argue.
[20] The salary allowance was also meant to be permanent. If it was not, then the
employer would have placed a sunset clause on the allowance as a condition to ensure
that there would be no recourse should the employer decide to rescind it at a future date.
No sunset clause was in place or implied, submit the complainants.
[21] The fact that the salary allowance was separated in every possible way and was
excluded from various calculations that were tied to the base salary (such as overtime)
shows that the allowance was a measure that was intended to be tied to their positions
and to permanently reside with those positions. Even the complainants’ pay stubs show
that the allowance was a separate item, they submit.
[22] The reason for the separation is simple, argue the complainants. If for some reason,
the incumbent was no longer able to satisfy Transport Canada of their ability to hold the
position, they would be removed from their position and simply revert to a manager at
their pay level and forfeit the salary allowance. For example, if a Chief Pilot does not
pass their regular aviation medical examination, they can no longer hold that position or
pilot an aircraft. If an Engineer loses their license, they would be unable to hold one of
the required positions in maintenance. The employer would then be obligated to
accommodate that individual at their regular wage minus the allowance tied to the
position. In other words, receipt of the allowance was conditional on the managers’ ability
to continue to hold one of the key positions.
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[23] The employer started paying the complainants a salary allowance because Aviation
Services was experiencing a retention and recruitment problem. The details are set out
in Management Board of Cabinet Directive 33-51 under the PSOA 2006, titled Directive
for the Creation of Salary Allowances and Related Payments (dated January 27, 2014).
Schedule 1 of the Directive lists the relevant position titles and salary allowance amounts:
Salary Allowances A1P, A2P, AJP, A4P, A5P (Ministry of Natural
Resources Aviation Services Management)
Effective April 1, 2014, a public servant who is employed in the Ministry
of Natural Resources, Aviation Services and who occupies a position in
the Management Compensation Plan as listed below, shall be paid in
addition to his/her regular salary the following, per annum:
Salary
Allowance
Position Title Salary Allowance
Amount
A1P Operations Manager
(Federally regulated position)
$9,444
A2P Chief Pilot (Rotary & Fixed
Wing) (Federally regulated
position)
$10,901
A3P Senior Pilot $10,171
A4P Chief of Aircraft Maintenance
Engineer
(Federally regulated position)
$10,901
A5P Senior Air Maintenance
Engineer
$8,867
[24] Concerning correspondence from the employer that sets out the attributes of the
salary allowance and how it would apply to the complainants, Mr. Tremblay pointed to
several emails he received before he was hired. In the first email, the Operations
Manager of Aviation Services asks an HR Advisor to describe how the salary allowance
works:
Hi Sean,
Can you please confirm the information that Amy has provided on how the
salary allowance works. Can you provide a salary that Eric would be at as the
chief pilot with 5 percent added to his salary and allowance. Can you also
advise what level of approval would be required to approve this increase in
salary?
Thanks
Bob
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The reply is as follows:
Hi Bob,
Amy is correct that the 5% promotional increase is separate from the salary
allowance. So with the 5% added to his current salary then he would start in
the Chief rotary Wing Pilot (TEN20) at $90,860.
The salary allowance of $10, 901 is in addition to the employee’s regular
salary, per annum, in accordance with certain conditions as specified in the
terms of the allowance.
They are applied to an employee’s bi-weekly salary.
Salary allowances are:
• Subject to all deductions (e.g, pension contributions) including any pay
reductions occurring as a result of unpaid leave or reduced pay,
• Included in calculating benefits (e.g. termination payments and insured
beneflts],
• Not included in the calculation of premium payments (e.g, overtime
during an emergency), in the event that premium payments apply to this
group,
• Not included in transactions arising from a change in status (e.g.
promotion),
• Not included in the calculation of performance pay.
Mike can approve the 5% promotional increase
Hope this helps.
Regards,
Sean
Mr. Tremblay was copied on these emails, and he says he took this information into
account when he decided to accept the job offer from the employer, which followed soon
after.
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[25] On May 26, 2014, Mr. Tremblay received a letter offering him the position of Chief
Rotary Wing Pilot with the Ministry of Natural Resources. The portion of the letter that is
relevant to the complaints reads as follows:
Your start date is May 26, 2014. This position is full-time at 36.25 hours per
week and is classified at the TEN20-A2P – Engineering & Surv Supp TM 20
level, in the Ontario Public Service (OPS). Your position is part of the
Management Compensation Plan (MCP) group. The current salary range for
this classification is $84-363.00 - $105,200.00 per year and your starting salary
will be [redacted] per year plus the annual salary allowance A2P of $10,901.00
paid biweekly. You may be eligible for Pay for Performance on April 1, 2015 to
allow for further salary progression. Eligibility for salary progression is based on
performance in the position and subject to salary administration provisions in
the Management Compensation Plan group.
The letter is signed by the Operations Manager of Aviation Services, and Mr. Tremblay
signed and dated a copy beneath the statement “I have read, understood and accepted
the terms and conditions of employment as outlined above,” which appears at its end.
[26] The complainants submit that these documents show that the biweekly payment of
an annual salary allowance that was separate from their regular or base salary was a
term and condition of their employment. The salary allowance was not an abstract
promise or a vague expectation. It was a “black and white” component of their total
compensation package that was offered to them and which they accepted. The employer
used the salary allowance to attract and retain individuals who could qualify for and hold
positions with unique requirements under Federal Law, most of which are found in
Transport Canada regulations. Compensation is at the core of any employment
agreement, argue the complainants, and it forms the foundation of the terms and
conditions of work. The complainants agreed to provide their services to the employer in
exchange for a total compensation package, and the employer is now attempting to
exempt itself from the terms and conditions that were agreed to.
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[27] On November 7, 2017, Mr. Tremblay and many of the complainants participated in a
conference call led by their Director to learn about MJEP. There were about 150 people
from their division listening in on the call from many different locations. At the end of the
call, he and the other Aviation Managers were asked to stay while others left. They were
given a 2 page handout titled "Key Messages for Management Pilots and Aviation
Maintenance Positions in Receipt of Salary Allowance." The Director told them to read
the handout, and that if they had any questions, they should contact HR. Mr. Tremblay
did so, and he was told that more information would be forthcoming.
[28] Next, Mr. Tremblay received an email dated November 15, 2017, advising him of the
classification outcome for his position based on MJEP. He was told that his new
classification was M09 and he was told his salary range for two periods: from April 1,
2017 to September 30, 2017; and October 1, 2017 to March 31, 2018. The email also
said the following:
Salary and Classification information will begin to be reflected in WIN on
November 13th under the "Job Information" tab. Classification and
compensation changes are anticipated to begin on November 30th. However,
there will be some exceptions. Employees with more complex position/salary
histories will be processed in subsequent pay periods.
[29] The email had some additional information for employees who were receiving a
salary allowance:
For those employees in receipt of a salary allowance
You may be aware that, since 2014, salary allowances were provided to certain
management pilot and aviation maintenance positions, Treasury Board
Secretariat was directed to eliminate salary allowances when implementing
MJEP.
To accomplish this, the annual value of the salary allowance will be added to
the base salary of employees who were receiving the allowance, prior to the
employees being placed in the salary range for their new MJEP classification
level.
Because employees in this group have a more complex salary scenario, your
pay will be processed for a pay period after November 30.
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If you have any questions, you are encouraged to speak with your director and
to visit the MJEP website for more information.
The MJEP Team
Job Evaluation Initiatives Branch
HR Service Delivery Division
[30] Mr. Tremblay says some of the information in the email was different than what he
had been told on November 7, 2017 conference call and in other presentations,
specifically that there were now "exceptions" and that the dates when the changes were
supposed to be visible in WIN no longer applied to employees with "more complex"
situations.
[31] Mr. Tremblay says that after November 16, 2017, he checked WIN every day to see
if anything had changed. He understood that the other complainants were doing so as
well. The first time he saw a change was on December 12, 2017, because this was the
day when he saw changes to his WIN account. On that day, he saw his pay stub for the
December 28, 2017 payday, and it was clear that his compensation had changed. Before
that date, the amount of his salary allowance had been shown beside a line that read
“Salary Allow Chief Pilot,” and his base pay was shown beside a line that read “Regular
Pay.” On his pay stub for the December 28, 2017 payday, the line for “Salary Allow Chief
Pilot” said “0.00” and the bi-weekly amount for the salary allowance had been added to
the “Regular Pay” line.
[32] Post-MJEP, adding the salary allowance to their base salary has changed their total
compensation, the complainants say. They submit that this has led or will lead to the
following for some or all of them: pay freezes for up to five years, ineligibility for in-range
salary increases, and/or ineligibility for base salary adjustments. The salary compression
issue that the salary allowance was designed to address has returned, they argue.
[33] It is the employer’s position that the Board cannot conclude that the provision of a
salary allowance, as a separate and distinct item from the employee’s base salary, was a
16
separate term or condition of the complainants’ employment. The employer submits that
neither the offer letter nor Directive 33-51 constituted a representation that the salary
allowance would continue as a separate payment to the complainants in perpetuity.
There was no offer of such a term from the employer, and there was no acceptance of
such a term. As a result, there is no identifiable term or condition that the complainants
can point to that was breached by the employer.
[34] Under the PSOA 2006, Management Board of Cabinet can create and set directives
that determine salary ranges, wage ranges, and other remuneration for public servants
appointed by the Public Service Commission. Accordingly, the PSOA 2006 grants the
Management Board the ability to determine pay - whether by granting it, denying it, or
altering it - for public servants. The complainants became members of the Management
Compensation Plan when they accepted their new positions, and they became subject to
future directives from Management Board which would apply to their compensation. This
alone should be sufficient for the Board to find that the complaints must fail, submits the
employer.
[35] It is equally valid that changes to compensation are a regular occurrence for public
servants in managerial positions, the employer submits. There are also numerous
examples of this in the Board’s jurisprudence, where managers have filed complaints
about these measures, including wage freezes and the denial of pay for performance.
There is no reasonable way to conclude that the complainants were not aware of the
compensation practices in the OPS.
[36] The employer ensured that the total compensation package provided to each
complainant did not decrease as a result of Directive 33-66. The complainants allege
that they suffered a loss, but the complainants have not experienced any reduction in
compensation. Instead, some of the complainants have simply not been provided with
the same opportunity for progression that they expected they might have in the future.
The new compensation calculations for the complainants were applied consistently,
17
equitably, and following Directive 33-66, and the complainants were protected from any
reduction in their compensation, argues the employer.
[37] The complainants appear to object to the employer’s ability to make changes under
Management Board directives, even though an earlier directive was required to provide
them with their original salary allowances. There is no way to conclude that the
complainants did not know, or should not have known, that a future directive could
otherwise alter the salary allowance. Furthermore, the employer submits, even if the
complainants did not have this knowledge, the complainants could not create terms or
conditions of their employment through a lack of understanding of applicable policies and
processes.
[38] The complainants object to the fact that their salary now includes the salary
allowance, as opposed to the salary allowance being considered separate from their base
salaries. However, what they allege to be a term or condition of employment in their offer
letter was never represented to be a permanent term or condition of employment that
required the employer to calculate this as a separate compensation item for the duration
of their employment with the OPS.
[39] Instead, the employer made a change to the administration of the salary allowance,
in accordance with a Management Board of Cabinet directive issued pursuant to the
PSOA 2006, which did not breach any identified term or condition of employment, the
employer argues.
[40] Finally, the precise language of the offer letter states that the salary allowance is
linked to the fact that the complainant “is classified at the TEN20-A2P – Engineering &
Surv Supp TM 20 level.” The letter states, “the annual salary allowance A2P of
$10,901.00 paid biweekly.” The language is unequivocal that the salary allowance
applies to A2P payment group, submits the employer.
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[41] This is further supported by Schedule 1 of Directive 33-51, the heading of which is
“Salary Allowances A1P, A2P, A3P, A4P, A5P”, again clearly linking the salary
allowances to the A2P code. It is also reflected in the chart, which sets the separate
salary allowance for each of those five classifications. The complainants have not
pointed to any document that indicates that this payment classification was a separate
and unalterable term of employment, the employer argues. Accordingly, it is entirely
logical that when the employees were provided new classifications in the M-class (M07,
M08, M09, etc.), the salary allowance under the old payment classifications no longer
applied in the same manner.
[42] For this reason, argues the employer, the complainants cannot be entitled to a term
or condition of employment if the provision for granting that alleged term or condition of
employment (i.e. the A2P classification) does not exist anymore. The complainants knew
from their offer letter that salary allowance arose from them being “at A2P.” Accordingly,
the salary allowance was no longer applicable upon the implementation of MJEP.
[43] Turning to the Board’s case law, the employer submits that while the Board has
been clear that it has the jurisdiction to enforce existing terms and conditions of
employment, it cannot create new terms or conditions of employment. It has no authority
to set wages or compensation. Referring to Ransome and MacDonald, the employer
notes that the Board has said that it cannot remedy a complainant’s feelings of unfairness
or unhappiness, however genuine those feelings are.
[44] In Hill et al., the Board concluded that the complainants’ compensation was
consistent with the employer’s policies on compensation and that the policies did not
provide the specific language to establish the difference that the complainants were
seeking. Furthermore, the Board noted that statements needed to be clear and
unequivocal to establish an ongoing term or condition of employment-related to
compensation.
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[45] The complainants have attempted to frame the issue as one where it was the
employer’s obligation to indicate in 2014 that it may make changes to the compensation
structure in 2017, argues the employer. They appear to be arguing that the burden fell on
the employer to indicate at that time that it may make a future change. They further seem
to be arguing that the failure to do so created an ongoing obligation. However, as the
above case law indicates, without specific language in the terms or conditions of
employment that prohibits the employer’s ability to make such a change, the Board must
find that such changes are not breaches of any terms or conditions of employment, and
the complainants cannot meet their onus.
[46] Mr. Tremblay has described his hiring process into the Chief Rotary Wing Pilot
position as a “negotiation” where he received a “promise” regarding his salary allowance.
However, the employer argues, while the documents show that he was inquiring about
various pay provisions at the time of his hiring, they do not disclose any statement
wherein the employer stated that the salary allowance, and the separate calculation of his
salary allowance from his base salary, was a permanent component of his compensation
package, nor any promise that the salary allowance would remain in its current form for
the duration of his employment in that position. In fact, the documents demonstrate that
all of the complainants were paid appropriately in accordance with the applicable directive
at the time. There is no indication that anything improper occurred.
[47] The employer submits that as a result of MJEP, the salary allowance was
incorporated into the complainants’ salaries, and they were all placed appropriately within
the salary range, with the addition of that equivalent compensation amount on top of their
salary under MJEP. The complainants were initially granted a separate salary allowance
pursuant to a directive; however, this was later modified through a subsequent directive.
[48] The Board has unequivocally found that the employer is entitled to make a variety of
changes to the implementation and calculation of payment provisions, argues the
employer. The Board has also repeatedly found that the employer is entitled to make
these changes retroactively, as opposed to only prospectively. In this case, the
employer’s position is that the complainants have not, and cannot, point to a specific term
20
or condition of employment in the documents that entitles them to be paid a specific
salary allowance, in addition to and separate from their base salary in perpetuity, and that
the employer is precluded from issuing future directives that may affect their employment.
Analysis
[49] As stated above, the Board only has the powers granted by the Public Service of
Ontario Act and the regulations made under that legislation, notably Regulation 378/07.
When dealing with the phrase “working condition or . . . term of . . . employment” in
subsection 4.(1) of that Regulation, the Board will interpret and enforce existing terms
and conditions of employment; however, the Board has been very clear that it is not able
to create new terms and conditions of employment. More specifically, the Board will not
uphold a complaint if a term or condition of employment applies to other employees but
not to a complainant. Nor will the Board craft and apply terms and conditions of
employment from vague, abstract, or ambiguous policy statements. The Board will also
not revive or extend the application of temporary or remedial terms and conditions that
have long since expired. In short, the Board can and will only intervene where there is an
alleged breach or violation of an existing term or condition of employment.
[50] This principle was stated clearly by Vice-Chair O’Neill in Ransome:
The issue is primarily a question of contract law. The Board must answer the
question: Is it a term or condition of the grievor’s contract with the employer
that he should be paid the additional money he claims?
(Ransome, page 6)
. . . .
Especially in the managerial setting, where contracts of employment are not
collective, but individual, it is not enough to say that it is fair or would be more
fair if a grievor was paid more, or not less, than some other employee. In order
to succeed, a grievance must show that the difference is improper, either
because it offends a specific term or condition of employment, or some more
general principle of law.
(Ransome, page 8)
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[51] More recently, in MacDonald et al., supra, Vice-Chair O’Neill set out the test for
whether there has been a breach of a term or condition of employment:
[17] As noted in earlier decisions of this Board, in order for the Board to be able to
award a remedy to a complainant, there must first be an existing term or
condition of employment related to the facts complained of, something that is
part of the complainant’s contract of employment. This is something more than
a belief that something is unfair, no matter how deeply held. Secondly, there
must be a breach of that term or condition of employment, and thirdly, there
must be a link between that breach and a remedy that the Board is empowered
to give.
[52] The history of the salary allowance is central to the complaints and to how the senior
managers came to be employed in Aviation Services. The employer introduced the
salary allowance in response to a serious retention and recruitment problem in Aviation
Services. In the words of one of the employer’s documents, the allowances are “targeted
compensation adjustments to address critical compensation issues” for certain positions
in Aviation Services that have a variety of unique requirements – unique at least in the
Management Compensation Plan group. Many of the requirements are set by Transport
Canada, who must “approve” most of the complainants to act in their positions. The
managers must also ensure ongoing compliance with six separate Transport Canada
operating certificates, among many other duties and responsibilities.
[53] The salary allowance is different from an employee’s regular salary. It is an
approved pensionable amount, included in calculating benefits but excluded from pay for
performance calculations. It is also a fixed amount that is paid in addition to the
employee’s regular salary. This means that it is isolated from changes to the employee’s
salary and that it is not “in the picture” for classifying the complainants’ positions on the
employer’s salary ranges, a point which the employer made clear in the complainants’
hiring letters. The employer designed the salary allowance so that it would be attractive
to the complainants because the employer needed to address “critical compensation
issues” and respond to a retention and recruitment problem. It is clear from the facts of
22
this case that the employer was successful: it attracted and retained the complainants,
which solved the employer’s problem in Aviation Services.
[54] The source of the salary allowance was not a vague, abstract, or ambiguous policy
statement. The complainants did not think, believe, or wish that it should apply to them;
the salary allowance did apply to them because the employer told them so in more than
one document. The facts before the Board are very different from those presented in
previous cases, where the complainant was either asking for terms and conditions that
applied to others be applied to them, or asking the Board to fashion better terms and
conditions out of whole cloth. In some cases, for example where pay for performance
was set at 0%, the Board found that an annual (and sometimes retroactive) review was
implicit in the existing terms and conditions of employment. In none of those cases did
the Board ever find that there had been a unilateral change in the terms and conditions of
a complainant’s individual contract of employment, as is the case here. The decisions
relied upon by the employer in support of its position are therefore readily distinguished.
[55] As members of the Management Compensation Plan group, the complainants are
not eligible to participate in collective bargaining, so their terms and conditions of
employment are set by individual contracts of employment. The basic premise underlying
the individual contract of employment is that it continues as long as both parties agree.
The mutual consent of the employer and the employee are required to form and, if
desired, to vary the terms of the contract. It is clear from the evidence before the Board
in this matter that the terms and conditions of the contracts of employment between the
individual complainants and the employer come from a number of different sources: the
hiring letters, statutory provisions (including the limited ability to file a complaint before
the Board), employer policies, and directives issued by Management Board. The terms
and conditions are, therefore, a blend of provisions that apply to the entire Management
Compensation Plan group as well as other provisions that apply only to a very small
subset of this group, including the complainants.
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[56] This case must be viewed within the context of these general legal principles. The
employer made offers of employment to the complainants, and the salary allowance was
one of the provisions of those offers. When the complainants accepted these offers, the
salary allowance became one of the terms and conditions of their employment. Individual
contracts (13, to be precise) were formed: one between each of the complainants and the
employer. The salary allowance, as designed by the employer, formed part of each of
those individual contracts and it attached to the position rather than the classification. As
a result, the salary allowance became “a working condition or . . . term of [the
complainants’] employment” to which the complainants were entitled.
[57] The employer devotes a substantial portion of its written submissions to show that it
has the authority to issue directives that change the terms and conditions of employment
for members of the Management Compensation Plan group, and therefore the
complainants. The employer also provided many examples of when it has done this,
often using the mechanism of the “pay freeze” or some variation thereof. Neither of these
principles was ever in doubt. It is equally clear, however, that when the employer chose
to change the terms and conditions of employment for the complainants by removing the
salary allowance, the employer did so unilaterally and without their consent. In
contractual terms, this amounted to a change to a material term and condition of the
individual employment agreements between the complaints and the employer. Using the
mechanism of Directive 33-66 to impose its will did not alter the legal consequences of
the employer’s actions: the employer unilaterally changed a material term and condition
of the bargain that it had struck with the complainants.
[58] It is also worth noting that there is no evidence before the Board that Directive 33-51
has ever been rescinded, either by Directive 33-66 or otherwise. Rather, Directive 33-66
states that it prevails in the event of a conflict between it and Directive 33-51 (or any other
relevant policy, procedure or directive). While this is by no means determinative of the
issues before the Board, it does suggest that Directive 33-51, with its listing of the salary
allowances that applied to the complainants as listed under their position titles, still exists,
despite the fact that the employer has chosen to no longer apply it to the complainants.
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[59] In its submissions, the employer argues that it never said the salary allowance was
“a separate and unalterable term of employment”. Moreover, the complainants were
never told that the salary allowance was permanent, or that the employer would pay the
salary allowance in perpetuity. In other words, argues the employer, it never promised
that it would not change the salary allowance, or remove it, or simply take the amount
and blend it in with the base salary, such that it would lose the very attributes that were
designed to make it attractive to the complainants in the first place. While this is true, it is
equally valid that the employer never made those promises about any other aspect of the
individual contracts of employment between itself and the complainants. By this
reasoning, the employer could have issued a directive reducing the complainants’ base
salaries by 50% or cancelling the complainants’ benefit coverage, and still argue that it
was free to do so because it had never promised that it would not. The general legal
principles outlined above lead to the unmistakable conclusion that the rights and
obligations of the parties render this proposition unsustainable.
[60] I turn briefly to the employer’s argument that by incorporating the salary allowance
into the complainants’ “pre-MJEP” salaries, they were all placed appropriately within the
salary range and have experienced no loss. The complainants submit that the removal of
the salary allowance has led or will lead to the following for some or all of them: pay
freezes for up to five years, ineligibility for in-range salary increases, and/or ineligibility for
base salary adjustments. The salary compression issue that the salary allowance was
designed to address has returned, they argue. The changes to the complainants’ total
compensation resulting from the incorporation of the salary allowance into their “pre-
MJEP” salaries will affect each of the complainants differently, and some of the changes
may not take place for some time. Nevertheless, these are all reductions to the
complainants’ total compensation that were unilaterally introduced by the employer
without the complainants’ consent. The changes introduced by the employer are no less
material because the complainants may not experience the full effects of them for some
time. Unilateral changes by an employer to the notice provisions of an employment
contract are no less material simply because they do not “kick in” until the end of the
employment relationship.
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[61] In this case, the complainants have registered their unequivocal rejection of the
employer’s changes to their terms and conditions of employment. They filed timely
complaints under the PSOA, 2006. The employer has continued to allow the
complainants to work. It has not told them that if they refuse to work under the terms of
Directive 33-66, their employment will be terminated. Nevertheless, the salary allowance
is “a working condition or . . . term of [the complainants’] employment” to which the
complainants were entitled. The employer removed the salary allowance (that is, it
refused to continue to treat the salary allowance as a separate and distinct component of
the complainants’ total compensation) when it implemented Directive 33-66. The
employer did so unilaterally and without the consent of the complainants, and this
amounted to a breach of the contract of employment by the employer, which was
improper.
[62] Finally, the Board must address the issue of whether it appropriate for it to provide a
remedy, and if so, in what form. In the decisions summarized above, the Board has said
that it does not have the power to create or impose new terms and conditions of
employment. The Board is nevertheless able to find that the removal of the salary
allowance from the complainants was a breach of their terms and conditions of
employment, that this was improper, and the Board so finds.
[63] In its written submissions, the employer proposed that the Board remit the matter to
the parties to determine an appropriate remedy and to make appropriate calculations to
compensate each of the complainants for the losses that they have incurred to date. In
addition, the employer may be able to offer solutions, other than simply restoring the
salary allowance, that would remedy its breach and be acceptable to the complainants
going forward.
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Disposition
[64] For the reasons set out above, the Board finds that the terms of Directive 33-66
breached the complainants’ terms and conditions of employment.
[65] With respect to remedy, the matter is remitted back to the parties to resolve. In the
event that the parties are unable to do so within 60 days of the date of this award, or such
other time as they may agree in writing, the parties may make submissions on the
appropriate remedy. In the alternative, the parties may at any time jointly request the
Board’s assistance in mediating an appropriate remedy to the matter.
[66] I remain seized.
Dated at Toronto, Ontario this 21st day of July, 2020.
“Andrew Tremayne”
_______________________
Andrew Tremayne, Vice-Chair