HomeMy WebLinkAboutGagliardi et al 22-10-04IN THE MATTER OF AN ARBITRATION
B E T W E E N:
MUNICIPAL PROPERTY ASSESSMENT CORPORATION
(“MPAC” or “the Employer”)
- and -
ONTARIO PUBLIC SERVICE EMPLOYEES UNION
(“the Union”)
AWARD
Before: Mark Wright, Arbitrator
Re: Grievance re LOU #1 (Gagliardi et al)
Appearances
For the Employer:
John Saunders, Counsel
Edward Broderick, Director, Employee Relations and Programs
Elyse Cowan, Manager, Employee Relations
For the Union:
Ed Holmes, Counsel
Allison Vanek, Grievance Officer, OPSEU
David Lynch, Union Rep
Hearing Dates: July 15 and September 7, 2022
Introduction
1. This award deals with eleven grievances arising either directly from the implementation
of an award between the parties released by Arbitrator Howe on December 6, 2018, which dealt
with grievances arising in 2016 (the “2016 Award”), or indirectly because of payments
subsequently made by the Employer to employees who were not themselves covered by the
2016 Award.
2. For the reasons set out below, I find I lack the jurisdiction to deal with one of the
grievances, and the other ten grievances I dismiss.
Background
3. The Employer is the Municipal Property Assessment Corporation (“MPAC” or “the
Employer”), a Crown Corporation that performs property assessments. The Ontario Public
Service Employees Union (“the Union”), represents a bargaining unit of employees who perform
property assessment functions.
4. The 2016 Award was upheld by the Divisional Court in a decision dated December 18,
2019. The Divisional Court’s summary of the factual background to the case provides a useful
background for understanding the context in which the present grievances arise:
Factual Background
The Transfer that Took Place on December 31, 1998
[7] OPAC, the precursor to MPAC, was a Crown corporation that performed
property assessment functions. The people who performed those functions
were employees at the Ministry of Finance. Employees at the Ministry of
Finance were considered either classified or unclassified workers.
[8] Classified workers were permanent employees and were part of the Ontario
Public Service ("OPS") bargaining unit with OPSEU. Under the old OPS collective
agreement, classified employees were entitled to receive the enhanced
severance payment. The benefit was equal to one week per year of service
beyond five years of service up to a maximum of 26 weeks.
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[9] Unclassified employees were workers who were employed through individual
employment contracts that ran from one specified date to another. They were
also governed by the OPS collective agreement, but had limited rights under that
agreement and no job security. The agreement contained provisions governing
the conversion of unclassified employees to classified employees, a conversion
that would then entitle an employee to all of the benefits under the agreement,
including the enhanced severance payment.
[10] On December 31, 1998 the Ministry of Finance employees who were performing
property assessment services for OPAC became direct employees of OPAC, which
was subsequently renamed MPAC (I will refer to the post-transfer-date employer
as MPAC in these reasons). As a result of the transfer, 381 unclassified Ministry
of Finance employees (including the three grievors who benefited from the 2016
Award) became "temporary" employees of MPAC and 1200 classified Ministry of
Finance employees became "non- temporary" employees of MPAC. All of the
transferred employees became members of the OPSEU bargaining unit.
LOU #l
[11] During the transfer of employees from the Ministry of Finance to MPAC, MPAC
and OPSEU entered into LOU #1, which formed part of their collective
agreement. LOU #1 provides:
This will confirm that full-time employees who accepted employment
with MPAC at the time of the transfer, December 31, 1998... will receive a
special compensation entitlement equal to one (1) week per year
of combined service with OPS and MPAC to a maximum of twenty-six (26)
weeks ending January 1, 2016...
[12] The original LOU #1 provided that the payout of the enhanced severance payment
was to occur on termination or death. The payout date was subsequently amended
by agreement to January 1, 2016.
The 2001 Award
[13] In March of 2001 MPAC and OPSEU asked a Board of Arbitration (the "Board")
chaired by Arbitrator Howe to determine whether unclassified Ministry of Finance
employees who became temporary employees of MPAC on December 31, 1998
and whose contracts would expire "through the effluxion of time" were entitled
to the enhanced severance payment under LOU #1. OPSEU argued that they
were, as they were full-time employees. MPAC submitted that they were not,
because the collective agreement contains specific clauses dealing with the
entitlements of unclassified or temporary employees and the enhanced
severance entitlement was not one of them.
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[14] The Board concluded that the enhanced severance payment provided for in LOU
#1 was a "benefit" within the meaning of Article 5.02 of the collective
agreement between the parties. Article 5.02 provided that "[t]emporary
employees shall receive 10 percent of base wages in lieu of holidays, vacations
and benefits and in lieu of pay therefor" (emphasis added). Thus, Article 5.02
ousted the right of temporary employees to receive the enhanced severance
payment.
. . .
2016 Award
[16] After January 1, 2016, MPAC calculated and distributed the enhanced
severance payments to the employees it determined entitled to receive it.
Forty employees filed grievances contesting MPAC's approach to the
compensation entitlement and arguing that they were entitled to the
enhanced severance payment. Twenty-one grievances came formally before
Arbitrator Howe, who partially allowed three of those grievances. The three
partially successful grievors had been previously employed by the Ministry
of Finance as unclassified employees, became employed by MPAC on
December 31, 1998 as temporary employees, and subsequently obtained
non-temporary positions at MPAC.
[17] In the 2016 Award the Arbitrator found that the question of whether such
employees were entitled to the enhanced severance payment had not been
decided in the 2001 Award. More specifically, that Award did not address
whether an employee who was temporary on December 31, 1998 and
subsequently became non-temporary could accumulate credit toward the
enhanced severance payment under LOU #1.
[18] In the 2016 Award, the Arbitrator followed his reasoning in the 2001 Award
and re-affirmed that employees were not entitled to the enhancement for
the period in which they were temporary employees, because that
entitlement was ousted by Article 5.02 (now Article 6.02). Arbitrator Howe
went on to find that all three of the grievors were entitled to accrue
entitlement to the special enhancement when they became non-temporary
employees, because they were no longer receiving the payments in Article
6.02.
5. One of the grievances before me, that of Mr. Jeff Leedale, was also one of the twenty-one
grievances put before Arbitrator Howe in the 2016 Award. However, the Union and Mr. Leedale
submit that Arbitrator Howe failed to rule on the grievance. The claim before me is the same
claim that was made before Arbitrator Howe: Mr. Leedale claims that his years of combined
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service for the purpose of compensation under LOU #1 (“the LOU”) should have included the
time he spent working as a temporary employee on a contract basis in 1992 and 1993.
6. The other ten grievances are claims for interest made by ten employees to whom MPAC
paid out certain monies based on Arbitrator Howe’s analysis in the 2016 Award, even though
none of the ten had grieved that they were entitled to the payments. The 2016 Award was
released by Arbitrator Howe on December 6, 2018, but MPAC did not make any payments to
affected employees until after release of the Divisional Court’s decision on December 18, 2019.
The employees who originally filed grievances claiming entitlement to payments pursuant to the
LOU (“the Original Merit Grievors”), were paid on February 1, 2020. On agreement of the parties,
the Original Merit Grievors were paid interest on the amounts they were paid from the release
of the 2016 Award on December 6, 2018, until the date of payment, February 1, 2020. A group
of employees filed grievances seeking entitlement to payments pursuant to the LOU after the
2016 Award was released but, in all but one case, before the release of the Divisional Court
decision (“the Subsequent Merit Grievors”). The Subsequent Merit Grievors were paid out on
March 6, 2020. None of the Subsequent Merit Grievors were paid interest on the amounts they
received, nor did any of them file grievances seeking such payment. On March 20, 2020, MPAC
paid out monies to fifty-four employees based on the reasoning in the 2016 Award even though
none of those employees had filed grievances seeking entitlement to such payments (“the Non-
Grievors”). MPAC did not include any interest on the payments made to the Non-Grievors. Ten
of the Non-Grievors filed grievances seeking payment of interest from the date of release of the
2016 Award until the date they were paid, March 20, 2020 (“the Interest Grievors”). These ten
grievances are before me.
Submissions of the Parties
7. The Union argues on Mr. Leedale’s behalf that his time spent working as a temporary
employee on contract in 1992 and 1993 should have been included in calculating his years of
combined service for compensation under the LOU. If that time had been included in the
calculation, his years of combined service would have been increased by 1.417 years. The Union
acknowledges that this is the very argument that was made on Mr. Leedale’s behalf before
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Arbitrator Howe but submits that the Arbitrator did not expressly rule on Mr. Leedale’s grievance
in the 2016 Award.
8. On behalf of the ten Interest Grievors, the Union argues that they are merely seeking
compensation for the funds that they would have had if the Employer had made its payments to
them when the 2016 Award was released. This is not a penalty, the Union submits, it is
compensation. The Union suggests that my jurisdiction to award interest arises from the
grievances, as well as from section 48 of the Labour Relations Act, 1995, and article 11.31 of the
collective agreement.
9. The Employer argues I have no jurisdiction to consider Mr. Leedale’s grievance as it was
heard and decided by Arbitrator Howe in the 2016 Award. In the alternative, it submits that if I
do have jurisdiction to consider Mr. Leedale’s grievance, finding for Mr. Leedale would be
inconsistent with Arbitrator Howe’s decision. In the 2016 Award, the Leedale grievance was
linked to the Arbitrator’s analysis in the David Taylor grievance. Arbitrator Howe found that Mr.
Taylor was not entitled to include any unclassified or temporary service time working on contract
in calculating compensation entitlement under the LOU. In the Employer’s submission, to find
for Mr. Leedale would necessarily be inconsistent with Arbitrator Howe’s finding in Mr. Taylor’s
case.
10. With respect to the Interest Grievors, the Employer argues it had no legal obligation to
pay them anything since none of them ever filed a grievance seeking entitlement to
compensation under the LOU, and the period in which a timely grievance seeking entitlement
could have been filed has long passed. The payments made to the Interest Grievors on March
20, 2020, were not insubstantial; the range was between $16,000 and $26,000. However, the
payments were gratuitous, and so there can be no interest payments outstanding. The Employer
notes that only the Original Merit Grievors were paid interest, and that was on agreement of the
parties. None of the other groups were paid interest, including the Subsequent Merit Grievors
who had filed grievances seeking entitlement to compensation under the LOU. The Employer
also suggests that article 11.31 of the collective agreement, which deals with how interest should
be calculated when awarded by an arbitrator or Board of Arbitration, does not easily apply in this
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case, since all but two of the grievances were filed after the payment had already been made.
The other two grievances were filed two days before the payment was made and so, the
Employer submits, any interest owing would be de minimis. The Employer concludes that I
should not award interest to the Interest Grievors.
11. The Employer relies on the Ontario Labour Relations Board decision in I.B.E.W., Electrical
Power Systems Construction Council of Ontario v. Electrical Power Systems Construction Assn.
[1991] O.L.R.B. Rep. 1311 as authority for the proposition that the equitable jurisdiction to award
interest only arises once a breach of the collective agreement has been found.
The Decision
12. I find that I am without jurisdiction to rule on Mr. Leedale’s grievance as it was heard and
decided by Arbitrator Howe in the 2016 Award. Arbitrator Howe was seized of 21 grievances,
although, in total, 40 related grievances had been filed. The parties hoped that the Arbitrator’s
award in the 21 grievances would also resolve the outstanding issues in the remaining 19 cases.1
The parties selected certain grievances from amongst the 21 to highlight the issues in dispute.
Arbitrator Howe described the agreed upon litigation process at the outset of the award:
Counsel agreed to argue the issues on the basis of facts stipulated during the
course of their submissions, and exhibits entered into evidence on the
agreement of counsel. Those facts pertain to examples provided by certain
grievances selected from the 21 grievances that are currently before me in these
proceedings.
13. Consistent with the described approach, the Arbitrator outlined the facts of the various
grievances that the parties had highlighted. The first individual grievance described was that of
David Taylor. The issue in Mr. Taylor’s case was whether time he had spent as an unclassified
employee working on a contract basis for the Ministry of Finance should have been included in
the calculation of the compensation to which he was entitled under the LOU. Arbitrator Howe’s
characterization of the grievance extends over two pages of the award.2 Immediately following
1 Municipal Property Assessment Corporation and Ontario Public Service Employees Union, unreported Decision of
Arbitrator Robert D. Howe dated December 6, 2018, p. 5.
2 Municipal Property Assessment Corporation, supra, pp. 6-8.
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the Taylor grievance, the Arbitrator characterized the grievance of Jeff Leedale in a single
paragraph:
Mr. Leedale's grievance is similar to that of Mr. Taylor. The compensation that he
received under the LOU was calculated on the basis of 19.5 years of combined
service with the MOF and OPAC/MPAC. He claims that it should have included the
periods in 1992 and 1993 during which he worked for OPAC/MPAC on a contract
basis as a temporary employee. Accordingly, he seeks to have it calculated on the
basis of 20.917 years of combined service.
It is clear from the quoted paragraph that the issue in the Leedale grievance is the same as the
issue in the Taylor grievance; namely, should the time each grievor spent at the Ministry of
Finance working on contract basis as an unclassified employee have been included in the
calculation of the compensation to which each were entitled under the LOU.
14. The award reflects that Union counsel conflated the two grievances for the purpose of
argument:
There is no dispute that Mr. Taylor and Mr. Leedale were full-time employees
entitled to receive special compensation under the LOU. The dispute regarding
those two grievors is what is to be included in the calculation of that
compensation.
15. It appears from the award that when Employer counsel addressed the issued raised in the
two grievances, he only made mention of Mr. Taylor.3 However, he clearly had not forgotten
about Mr. Leedale’s grievance as he distinguished the grievances of Mr. Taylor and Mr. Leedale
from the other grievances before the Arbitrator:
As is the case with all of the grievors except Mr. Taylor and Mr. Leedale, Mr. Shea is
not entitled to any special compensation under the LOU because he was an
unclassified employee of the MOF who came over to OPAC/MPAC on December 31,
1998, as a temporary employee. [emphasis added]
3 Municipal Property Assessment Corporation, supra, p. 19.
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16. When the Arbitrator decided the issue raised in the two grievances, he focussed on Mr.
Taylor’s case and made no separate mention of Mr. Leedale’s grievance.4 However, in dismissing
Mr. Taylor’s grievance I conclude the Arbitrator implicitly dismissed Mr. Leedale’s grievance, as
the issue in each case was the same, and the two grievances were conflated in argument by both
Union and Employer counsel. Given the process the parties had agreed upon at the outset to use
some but not all of the grievances before the Arbitrator to highlight the issues in dispute between
the parties, the 2016 Award should be read as dismissing the grievances of both Mr. Taylor and
Mr. Leedale.
17. If, however, I were wrong in that conclusion, and I did have jurisdiction to hear and decide
Mr. Leedale’s case, I would follow Arbitrator Howe and dismiss the grievance for the same
reasons that Mr. Taylor’s grievance was dismissed. To find otherwise would be inconsistent with
the 2016 Award. In argument before me, Union counsel conceded that if I were to find for Mr.
Leedale, that finding would “not be entirely consistent” with Arbitrator Howe’s ruling in the
Taylor case. He also conceded that the argument he was making before me was the exact same
argument he had made on Mr. Leedale’s behalf before Arbitrator Howe. I am not persuaded that
Arbitrator Howe was manifestly wrong when he decided against Mr. Taylor; to the contrary, I
find his analysis persuasive. If I did have jurisdiction in Mr. Leedale’s grievance, I would dismiss
the case, consistent with Arbitrator Howe’s ruling in Mr. Taylor’s grievance, which I believe was
correctly decided.
18. Turning to the ten grievances filed by the Interest Grievors, I find those grievances lack
legal foundation. To establish a claim for interest back to the date that the 2016 award was
released, a grievor would have to show that he or she had a legal entitlement to payment under
that award. But none of the Interest Grievors were legally entitled to payment from the date of
release of the 2016 Award because none of them had sought to enforce such a claim by filing a
grievance, and the window for filing a timely grievance seeking entitlement had long since shut.
The Interest Grievors received gratuitous payments of not insubstantial amounts of money on
March 20, 2020. The Employer was under no legal obligation to pay anything to any of them.
4 Municipal Property Assessment Corporation, supra, pp. 29-31.
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The Employer paid them because it concluded it was the right thing to do, given that they were
in the same position as employees who had filed legally successful claims for payment. The
Employer had no outstanding debt to the Interest Grievors, none of them had a legally
enforceable claim under the 2016 Award, so none of them has a claim for interest.
19. I find support for this conclusion in the Ontario Labour Relations Board’s decision in
Electrical Power Systems Construction Assn, supra. In that case, the Employer had discovered an
error in the way travel allowance had been calculated going back six years to the 1984 collective
agreement. It rectified the error upon discovery, paying the affected employees corrected
amounts of travel allowance. The union then filed a grievance on behalf of all affected members
seeking interest payments on the amounts paid. In dismissing the grievance, the Board held as
follows:
11. However, the case before us involves a grievance filed after the amounts of
money payable under the collective agreement had been paid. There is no dispute
over those facts. Thus, in very simple terms, there was no breach of the collective
agreement at the time that the grievances were filed. The union alleges in its
argument that payment of the principal amounts does not compensate the
individuals fully for the amount of the travel allowances because they were
deprived of the use of the money and are thus entitled to the interest to make
them "whole" under the collective agreement. This argument of the union derives
from the principles in the cases cited above which say that the purposes of an
award of compensation are to make the employees whole in terms of their
collective agreement.
12. However, every case in which a board of arbitration has awarded interest has
been founded upon the initial finding that a breach of the collective agreement
has occurred. The equitable jurisdiction to award interest arises out of the
jurisdiction to make a remedial award. That equitable jurisdiction does not come
to life unless and until a violation of the collective agreement has been found. On
the facts at hand, we can find no violation of Article 11 in that at the time of the
grievance, and indeed at the time of the hearing, all the monies payable under the
wording of that section had been paid. Hence, there is no equitable jurisdiction
remaining in us to award interest upon those principle amounts. [sic]
20. Two of the Interest Grievors filed their grievances on March 18, 2020, two days before
payment to them was made on March 20, 2020. I agree with the Employer’s submissions that
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any interest outstanding from the date those grievances were filed to the payment two days later
would be de minimis. Moreover, for reasons explained by the Board in Electrical Power Systems
Construction Assn, supra,5 even if I had the equitable jurisdiction to award interest to those two
Interest Grievors, I would decline to do so in all of the circumstances of the case, given that
neither of them filed a grievance seeking entitlement to payment under the LOU.
21. I also agree with the Employer’s argument that the grievances of the Interest Grievors do
not fit within the ambit of article 11.31 of the collective agreement. That article presupposes
that a grievance has been filed seeking a monetary remedy upon which a claim for interest can
be based. It then outlines how pre- and post-judgment interest is to be calculated:
11.31 Interest
Where the arbitrator or Board of Arbitration awards interest, interest shall be payable as
follows:
a) for the period commencing twenty (20) days prior to the date the grievance was filed
until the decision:
(i) interest shall be calculated at the quarterly prime rates, set by the Bank of
Canada, averaged yearly for that period.
(ii) interest will be paid on all amounts owing, except where compensation is
payable for back pay or any other amount that accrues over time, interest
shall be calculated on one half of the compensation.
b) for the period from the date of the decision until the compensation and/or damages
is paid, interest shall be payable on all amounts owing, payable at the prime rate set
by the Bank of Canada, for the quarter before the decision.
None of the Interest Grievors filed a grievance for a monetary remedy upon which a separate
claim for interest could be based.
22. For all the foregoing reasons, the ten grievances filed by the Interest Grievors are
dismissed.
5 Electrical Power Systems Construction Assn, supra, para. 13.
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Conclusion
23. To recapitulate, I make the following findings:
(i) I lack the jurisdiction to deal with the grievance of Jeff Leedale, as it was heard and
decided in the 2016 Award of Arbitrator Howe;
(ii) The ten grievances of the Interest Grievors are dismissed.
Dated at Toronto this 4th day of October, 2022.
Mark Wright—Arbitrator