HomeMy WebLinkAbout2004-3720.Fowler.10-05-14 Decision
Commission de
Crown Employees
Grievance Settlement
règlement des griefs
Board
des employés de la
Couronne
Suite 600 Bureau 600
180 Dundas St. West 180, rue Dundas Ouest
Toronto, Ontario M5G 1Z8 Toronto (Ontario) M5G 1Z8
Tel. (416) 326-1388 Tél. : (416) 326-1388
Fax (416) 326-1396 Téléc. : (416) 326-1396
GSB#2004-3720, 2004-3721
UNION#2005-0453-0001, 2005-0453-00027
IN THE MATTER OF AN ARBITRATION
Under
THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT
Before
THE GRIEVANCE SETTLEMENT BOARD
BETWEEN
Ontario Public Service Employees Union
(Fowler/Geneau)
Union
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The Crown in Right of Ontario
(St. Lawrence Parks Commission)
Employer
BEFOREVice-Chair
Bram Herlich
FOR THE UNION
Richard Blair
Ryder Wright Blair & Holmes LLP
Barristers and Solicitors
FOR THE EMPLOYER
Susan Munn
Ministry of Government Services
Counsel
HEARING
March 25, 2010, April 12, 2010.
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Decision
[1]This case involves an alleged breach of the terms of a Memorandum of Settlement
(?MOS?) entered into by the parties on October 11, 2005. That settlement provided, among other
things, that:
The employer agrees that the grievors [i.e. Messrs. Geneau and Fowler] will be
considered for future restorative work of the sawmill and related equipment?
[2]Between September 2008 and May 2009 restorative work of the kind contemplated by
the parties? agreement was performed by the employer. None of this work was assigned to the
grievors, who assert that the employer?s actions ? or perhaps put more properly, inactions ?
constitute a failure to abide by the terms of the settlement.
[3]No viva voce evidence was called. Instead, each of the parties filed their own recitation
of the facts they saw as relevant to their respective positions. The union?s document focused on
(the extremely limited) communication regarding the work assignment in question and on the
grievors? abilities to perform it. The employer?s asserted facts related primarily to the manner in
which it determined to assign the work in question ? it was contracted out. The parties also
agreed to file some relevant documents, including the contract entered into between the employer
and the successful contractor as well as a series of invoices resulting from the work performed as
a consequence of that contract.
[4]As there were no significant inconsistencies between these two statements of fact and as
neither party contested the facts set out in the other?s statement, these facts, while perhaps not
strictly attaining the status of ?agreed facts? are, at least, undisputed facts, which may be the
functional equivalent of agreed facts and which (subject to some slight modifications) I have
taken to be true for the purposes of this decision.
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The facts presented by the union are as follows:
Fatsc concerning the grievors bringing the issue to the employer?s attention:
Fatsc regarding the grievors? ability to perform the work in question:
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The facts presented by the employer are the following:
EMPLOYER?S FACTS
?
1.On or around May 2008, Mr. Filliol planned some raceway repairs in the sawmill
at Upper Canada Village. He decided at that time that the best way to do the
raceway repairs was to contract out the complete project to Hutchinson Home
Renovations.
2.In reaching his decision to contract out the entire project to Hutchinson Home
Renovations, Mr. Filliol based his decision on a number of factors.
3.The first factor that Mr. Filliol considered was the volume of work that had to be
completed. He determined that the scope of the raceway repair project as a whole
was very large and could not be completed before Upper Canada Village reopened
in May 2009 unless he contracted out the work.
4.The second factor that Mr. Filliol considered was the time required to do the work
that had to be completed. Mr. Filliol determined that it was necessary for a large
amount of preparation work to be completed during the summer and early fall of
2008 in order to allow raceway repairs to be completed before Upper Canada
Village reopened in May 2009. He determined that the preparation work that had
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to be completed during the summer and early fall of 2008 included cutting
approximately 120 pieces for the raceway, assembling each frame out of 4 of the
cut pieces, tagging the frame in order to identify it for assembly later, taking the
frame apart, and storing the pieces of the frame.
5.The third factor that Mr. Filliol considered was the knowledge necessary to have
the work completed as required. Mr. Filliol considered the fact that that
Hutchinson Home Renovations had done work on the sawmill turbine and
wooden chute connected to the raceway at Upper Canada Village in 2004 and
2005. Mr. Filliol also considered the fact that he thought it would be easier if
those who completed the restoration work had also completed the preparation
work during the summer and early fall of 2008 as well as the demolition work.
For example, Mr. Filliol considered the fact that when frames are taken apart,
measurements must be taken and the location of pieces had to be recorded. Mr.
Filliol determined that if the individual who takes the frame apart while doing the
preparation work also assembles the frame later on in the process, then all of this
knowledge would not have to be transferred and the work on the sawmill could be
done more efficiently. As further example, Mr. Filliol also considered the fact that
when the sawmill demolition took place, the ?key ways?, or pieces of wood
between the liner and the concrete retaining wall, had to be identified and saved.
Mr. Filliol ultimately determined that the raceway could be repaired more
efficiently if the same people who had completed the preparation work and
demolition work also reassembled the frames later in the process.
6.Mr. Filliol considered all of these factors and reached the determination that the
raceway repair project should be contracted out to Hutchinson Home
Renovations.
7.Hutchinson Home Renovations performed work on the raceway repair project
between September 9, 2008 and September 19, 2008 and between November 24,
2008 and May 22, 2009. The Service Contract and Invoices related to this work
are attached as Appendix A.
8.The Grievors have been employed on Group 3 seasonal contracts in the past. Mr.
Geneau?s Group 3 seasonal contract typically runs from the last week in April to
the end of October. Mr. Fowler?s Group 3 seasonal contract typically runs from
early May to the middle of October.
The Positions of the Parties
[5]The positions of the parties are relatively straightforward, both with respect to liability
and remedy.
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[6]The union notes that there is no dispute that the work in question was of the type
contemplated by the MOS and that the grievors possessed the ability to perform it. But there is
nothing in the evidence or in the employer?s asserted facts or submissions which suggests that it
ever turned its mind to a consideration of any possibility whatsoever of the grievors performing
(some or all of) the work. Indeed, there is simply nothing in the evidence, facts or submissions
which suggests that the employer even ever made any pretence of engaging in the type of
consideration required by the terms of the MOS. There can thus be no question that the employer
has failed to discharge its obligation under the MOS.
[7]The question of the appropriate remedy is only slightly more complex from the union?s
perspective.
[8]A number of cases were pointed to where arbitrators (including this Board) have not
shrunk from fashioning remedies in circumstances where the remedial response may not be as
obvious as the breach (see, for example, Community Nursing Home v. Ontario Nurses?
Association[2008] O.L.A.A. No. 233 (M. Newman) application for judicial review dismissed,
2010 ONSC 1296, in which the Board of Arbitration declared that layoffs effected by the
employer were void ab initio where the employer had failed to engage in consultation with the
union as required by the collective agreement; and The Queen in right of Ontario v. Grievance
th
) 1, a decision of the Divisional Court upholding a
Settlement Board et al. (2005), 137 L.A.C. (4
decision of this Board which had awarded a blanket remedy of damages for all affected
employees whose seniority had not been properly recognized following a divestment). Any
remedy, the union urges, must address the callous disregard the employer exhibited in respect of
its obligations under the MOS. While it may now be impossible to divine or otherwise
determine with absolute precision what would have happened had the employer, as it was
obligated to have done, considered the grievors in the context of the work to be performed, any
such lack of clarity is the direct result of the employer?s dereliction, something from which it
ought not to be entitled to obtain any benefit. And while it concedes that the Board may fashion
other, perhaps less generous, remedial responses, the presumptive remedy in this case is to award
the grievors damages equal to the wages they would have earned had the work been assigned to
them.
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[9]For its part, the employer asserts that there has been no breach of the MOS ? the
employer assessed the nature of the work to be done and, taking relevant and reasonable factors
into consideration, determined that the best way to have the work done was to contract out the
entire project. (I pause to note that while the union does not concede the propriety of the
contracting out ? indeed, the entire issue of contracting out, perhaps even including the facts of
the instant case ? is part of a much larger adjudicative process between the parties, the issue of
contracting out, per se, is not part of the instant decision ? we are concerned with whether or not
the employer has breached the terms of the MOS specific to these two grievors.)
[10]The employer emphasizes the fact that the obligation created by the MOS is merely to
consider the grievors ? it does not provide any guarantee that the work for which they are to be
considered will be assigned to them. Neither does it create any right of first refusal. And further,
the MOS does not require the employer to structure its work in a fashion that will guarantee or
even maximize the likelihood that it will be assigned to the grievors.
[11]In the instant case, the employer considered a number of relevant factors, i.e. the volume
and complexity of the work, the timing (some of the work had to be performed in the summer
and early fall of 2008 and the entire project was to be completed prior to the commencement of
the next season in May 2009), the expertise and experience of the contractor ultimately selected
(it had done previous similar related work for the employer), and the desirability of having the
same crew do all of the work in its various phases (including demolition, preparation and
installation).
[12]Having taken all of these factors into consideration, the employer made a reasoned
determination that the best fashion to have the work performed was to contract out the entire
project to a single source, which is what it did.
[13]The employer acknowledges that it has an obligation, in the appropriate circumstances, to
consider the grievors. However, it also has the right to determine what work is to be performed
and how that work is to be structured, both with respect to its timing and manpower
requirements. Those determinations in the present case excluded the grievors ? as the employer
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put it, because it had determined to contract out the work (based on the factors set out) ?the
grievors did not make the short list?.
[14]In the alternative, the employer submits that even if some technical breach of the MOS
can be established, no remedy beyond a declaration ought to issue. In that respect reliance was
placed on decisions of the Ontario Court of Appeal in Eastwalsh Homes v. Anatal Developments
Ltd.(1993), 12 O.R. (3d) 675 and the Supreme Court of Canada in Kinkel v. Hyman [1939]
S.C.R. 364. These cases deal with the sometimes elusive task of fashioning a remedy for lost
opportunity.
[15]In the Kinkel case the remedial response was restricted to nominal damages. The court
observed that there was ?no authority?justifying any court in awarding any more than a nominal
sum as damages for the loss of a mere chance of possible benefit except upon evidence proving
that there was some reasonable probability of the plaintiff realizing there from an advantage of
some real substantial monetary value.? In that case the plaintiff?s only chance of realizing any
advantage from the lost opportunity depended upon ?the extremely doubtful ratification? (of a
transaction effected, without authority, by the defendants) by a majority of the shareholders of a
company that was not a party in the case. As the court determined that there was no evidence
upon which any finding could be made that such a vote was reasonably probable, it restricted the
more generous response of the Court of Appeal to nominal damages.
[16]In the Eastwalshcase, a land developer was found to have breached its contractual
obligation to a builder by failing to use its best efforts to secure registration of a subdivision by a
date specified in the parties? agreement to purchase and sell land lots. The failure to obtain the
contemplated registration resulted in the termination of the agreement. The builder sued the
developer for specific performance or damages. However, while the court had no difficulty
concluding the developer had breached its contractual obligations, it was unable to conclude that
breach resulted in any substantial loss because there were numerous other factors (outside the
direct control of the defendant) which led the court to conclude that there was no evidence that
the plan could have been successfully registered within the required time frame even if that
registration had been diligently pursued by the defendant. Accordingly, the court concluded that
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the opportunity the plaintiff lost was too insubstantial to justify anything more than nominal
damages.
[17]Relying on these cases, the employer asks me to conclude that there is simply no
reasonable possibility that the grievors, even had they been fully and properly considered in the
fashion advocated by the union and required by the MOS, would have been assigned (some or
all) of the work in question. The factors considered by Mr. Filliol, as outlined earlier, would
simply have resulted in a decision no different from the one the employer the made. On that basis
and even if there is a technical breach of the MOS, any remedy ought to be restricted to a
declaration.
Decision
[18]I have no hesitation whatsoever in concluding that the employer failed to discharge its
obligations under the MOS. There is no evidence whatsoever, indeed not even any meaningful
submission that the employer ever considered the grievors in its decision about how to perform
the required work. Neither the employer?s facts nor its submissions make any such explicit
claim. Rather, the employer effectively submits that its determination regarding the manner in
which the work was to be performed made any consideration of the grievors unnecessary. The
employer was, however, under an obligation to consider the grievors to possibly perform some or
all of the work in question. And while it may be true that a consideration of the grievors may not
have changed the ultimate result, that is a matter which goes to remedy and not one which
excuses it from its contractual obligation to consider them. It did not. It never turned its mind to
any possibility of the grievors performing some or all of the work. Not only did the grievors, as
the employer put it, ?not make the short list?, they did not make it to anylist at any stage in the
process. The employer did not fulfil its obligation under the terms of the MOS.
[19]The question of remedy is more complicated. Even here, however, the lack of salient
evidence from the employer, in a circumstance where there is no dispute that the grievors were
able and (subject to a qualification which follows) available to do the work, is problematic to its
case. The parties should not be faulted for engaging in a process which, through their fact
statements rather than viva voce evidence, undoubtedly served to expedite these proceedings. I
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find it curious, however, that just as there was no employer assertion that it had considered the
grievors (part of the liability issue), neither was there any assertion in its facts that Mr. Filliol?s
ultimate conclusion would have remained unchanged even had he considered the grievors (part
of the remedial issue). It may be that any such assertion would have been challenged by the
union, perhaps necessitating Mr. Filliol?s testimony and cross-examination which may (or not)
have resulted in a fuller evidentiary basis for the position the employer now advances. But the
parties, for whatever reason, chose not to proceed in that fashion.
[20]The result is that, to the extent I may need to consider what would have likely happened
had the employer considered the grievors as it was obligated to do, I am left with two competing
visions. The employer asks me to conclude, based on the same factors which determined the
improper decision-making process it followed, that the result would have been the same. The
union, on the other hand, submits that any uncertainty in divining or otherwise attempting to
ascertain what would have happened is a result of the employer?s breach. It points to little more
than the fact that the work was of the type contemplated by the MOS, the grievors were capable
of performing it and the employer was bound by an obligation to consider them. The
presumptive remedy in that case is to award the grievors damages equal to the wages they would
have earned had the work been assigned to them.
[21]I agree with the employer (and, in fairness, the union did not really argue otherwise) that
the terms of the MOS did not provide any guarantee of the work in question to the grievors. And
that is why the remedy in this case is not one which is to compensate them for the loss of the
work, per se. What the grievors lost was an opportunity to be considered for the work in
question. The value of that loss is what they are to be compensated for. Compensation for that
loss does not depend upon their assignment being a certainty but for the breach. And by the
same token, that loss may still be assigned some value even in a circumstance where the
opportunity may not have resulted in an assignment of the work.
[22]The cases relied upon by the employer are quite instructive in this regard. They
demonstrate that the award of any damages flows from a two-step process.First, there must be a
breach which results in the loss of opportunity and second, the opportunity which was lost must
have given rise to some reasonable probability of the securing of some advantage. In the two
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cases cited by the employer, the award of damages was nominal only, because the courts
concluded that there was no evidence upon which any finding could be made that such a result
was reasonably probable (in the Kinkelcase) and because the evidence compelled the conclusion
that notwithstanding the breach, the benefit linked to the lost opportunity could not have been
realized (in Eastwalsh). If I were drawn to a similar conclusion in the instant case, I might well
restrict any remedy to a declaration with nominal damages.
[23]I also find it instructive, however, that in both of the cited judicial decisions, the obstacles
to the realization of the opportunities in question were external to the parties to the litigation (in
the one case realization was dependent upon the acts of shareholders to a company not party to
the litigation and, in the other, upon the determinations of at least one local authority also not a
party to the litigation in question). In our case, there were no contingencies outside the control
of the parties to the litigation. And the conclusion urged upon me by the employer that there was
no reasonable prospect of the grievors receiving the work assignment in question even had they
been properly considered is one which may well be suspect when one considers its self-serving
nature in the context of the lack of direct supporting evidence.
[24]There are other aspects of the court cases, in particular the Eastwalsh case which I find
helpful. The Court of Appeal observed:
?where it is clear that the breach of contract caused loss to the plaintiff, but it is very
difficult to quantify that loss, the difficulty in assessing damages is not a basis for refusal to
make an award in the plaintiff?s favour. One of the frequent difficulties in assessing damages is
that the plaintiff is unable to prove loss of a definite benefit but only the ?chance? of receiving a
benefit had the contract been performed. In those circumstances, rather than refusing to award
damages the courts have attempted to estimate the value of the lost chance and awarded damages
on a proportionate basis.
The court went on to provide a pithy and instructive summary of its approach to the
quantification of damages for lost opportunity:
In short, in assessing damages the court must discount the value of the chance by
the improbability of its occurrence.
That is my task in the instant case.
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[25]The employer showed utter indifference to its contractual obligation to consider the
grievors. Having done so, it now urges me to conclude that the result would have been no
different had it complied with those obligations. That may be true. I cannot know for certain,
principally because the employer never performed the exercise required by the MOS and,
secondarily, because it proffered no direct evidence to compel such a conclusion. On the other
hand, the grievors were able and available to do the work in question and had a contractual right
to be considered for the assignment. In those circumstances, I am unable to conclude that there
is no reasonable prospect that the work would have been assigned to the grievors had they been
considered for it in the manner contracted by the parties. On the contrary, I am satisfied that
there is at least some reasonable prospect that the work would have been assigned to them.
However, I also accept that there is a (perhaps even greater) reasonable prospect that the work
would not have been assigned to them. It is not necessary (or possible) for me to positively
conclude (on whatever standard) that the work would have been assigned to them. They are
being compensated for the lost opportunity and not for the loss of work per se. In all of the
circumstances (including the fact that there is a reasonable prospect that none of the work would
have been assigned to the grievors), I am of the view that it is appropriate to discount the full
maximum value of the lost opportunity by a factor of 75%.
[26]I have adverted to a modification required with respect to the grievors? availability to do
the work. Although the union?s facts initially asserted that the work was performed during the
months of November 2008 to May 2009, the invoices that were filed demonstrate and the union
accepted that the work commenced as early as September 2008 and continued into May 2009.
As a result there were times (at both the start and end of that period) that fell within the tourist
season and during which the grievors were at work. The union readily conceded that the
grievors were not entitled to seek any monetary remedy during any of the periods of time that
they were otherwise already at work for the employer. Subject to that qualification, the grievors
are entitled to be paid, as damages for the employer?s breach of the MOS, an amount equal to
25% of the wages they would have earned had the relevant work been assigned to them during
the relevant periods.
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[27]I will leave it to the parties to agree to the precise calculation of the damages owing as a
result of my award and I will remain seized in the event they encounter any difficulties in that
regard or in respect of any issue that may arise concerning the application or implementation of
the terms of my award herein.
th
Dated at Toronto this 14 day of May 2010.
Bram Herlich, Vice-Chair