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HomeMy WebLinkAbout1981-0526.Szalonczay.82-08-04IN THE MATTER OF AN ARBITRATION Under THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT Before THE GRlEVANCE SETTLEMENT BOARD Between: Before: For the Griever: For the Employer: H.3. Laing, Counsel Crown Law Office Ministry of the Attorney General Hearin% June 23,19X2 OPSEU (Leslie Szalonczay) and Grievor The Crown in Right of Ontario (Ministry of Transportation and Communications) Employer J.R.S. Prichard - Vice-Chairman W. Walsh - Member A.G. Stapleton - Member R. Anand, Counsel Cameron, Brewin & Scott AWARD This is a complicated case. The griever, Mr. Szalonczay, alleges that the employer has failed to pay him the appropriate salary increases for his position for 1980 and 1981. The grievorjs e,mpl?yed as a Clerk 6 General (Bargaining Unit) with the Ministry of Transportation and Communications. ,,>‘.. .;:: The complexity of the case derives from the fact that, at a minimum, its resolution turns upon a reconciliation of: (1) three separate collective agreements, (2) a prior decision of this Board kalonczay, 443/80 (McLaren)) (hereinafter referred to as the “McLaren awaid’?, (3) the negotiating history between the parties, (4) the subtleties and difficulties associated with periodic retroactive expansions of the bargaining unit to include classifications of employees not covered by the collective agreement at the time it was negotiated, and (5) the doctrine of estoppel. In this award we have tried. to reduce the facts and issues to their essentials prior to considering their legal implications. Below we have set out a chronology of the relevant events. It lists the events in the order in which they in fact occurred. However, the chronology must be read carefully since various events ~were given retroactive effect by the parties with the result that the actual chronology . . -3- differs from the chronology of events for purposes of applying. certain provisions of the collective agreement. Chronology of Actual Events 1. December 31, 1978 2. January~ 1, 1979 3. June, 1979 4. July 1, 1979 5. January, 1980 The grievor is 3 ~Clerk 5 within the bargaining unit. The grievor receives a salary increase as a Clerk 5 pursuant to the 1979 collective agreement based on his December 31, 1978 salary. The union and the employer agree to add a new classification to the collective agreement known as Clerk 6 General. This decision is retro- active to April I, 1979. This category does not appear in the 1979 agreement itself since the agreement had been signed in April 1979. As a result there is no specific reference to the Clerk 6 category in the agreement and it does not appear in the 1979 salary rate grid attached as an appendix to the 1979 agreement. The griever receives a second salary increase as a Clerk 5 pursuant to the 1979 collective agreement based on his December 31, 1978 salary. The employer decides to reclassify the postion in which the grievor works from Clerk 5 to Clerk 6 General. This deci- sion is retroactive to March 1, 1979. As a result the grievor notionally was (1) a Clerk 5 within the bargaining unit from January I - February 28, 1979, (2) a Clerk 6 General outside the bar- gaining unit from March I - March 31, 1979 and (3) a Clerk 6 General within the bargaining unit and covered by the 1979 collective agreement from April 1 - December 31,1979. The wage rate to be . 8. April II; 19S1 The 1981 collective agreement is signed. It continues to make specific reference to the Clerk 6 General classification in the salary rate grid. The agreement is retroactive to January I, 1981. The grievoi is paid in accordance with the rate on the grid. 9. June 23,1981 The “McLaren award” on the “1979 griev- ance” is released. In its decision the Board holds that the grievor was entitled to the July I, 1979 wage increase. As a result the Board awarded the griever compensation for the period July I - December 31, 1979 reflecting the higher salary which he should have been paid. In that same decision the Board stated that its decision would not affect the griever’s salary rate for 1980 since that rate is specifically set out in the appendix to the 1980 collective I .’ 6. April lb, 1980 The 1980 collective agreement is signed. It makes specific reference to the Clerk 6 General classification by including in the appendix a salary rate grid for Clerk 6 General. The agreement is retroactive to January I, 1980. The griever is paid in accordance with the rate on the grid. 7. May, 1980 The grievor files a grievance alleging that he had been improperly denied the July , 1979 salary increase provided for all employees covered by the 1979.. collective agreement. That is, he claimed that he should have received an increase on July 1, 1979 since he was notionally under that collective agree- ment at that time because his reclassi- fication as a Clerk 6 General and sub- sequent inclusion within the bargaining unit had occurred in March and April of 1979. This grievance is hereinafter referred to as the “1979 grievance”. .? -4- ..,. paid to the Clerk 6 General classi- fication as of April 1,1979 ,was determined by agreement between the employer and the union. i,- agreement. However, the issue of the griever’s 19SO rate was not before the McLaren Board and was not argued before that Board. Counsel in the case before us agreed tnat any comments in the McLaren award con- cerning 1980 were purely obiter dicta. Furthermore the evidence before the McLaren Board was not the same as the evidence before us. 10. August II, 1981 The grievor files a grievance alleging that the employer.had failed to pay him the appropriate salary increases for his position for 1980 and 1981. This is. the grievance before us. Hereinafter it is referred to as the “1980/81 grievance”. In essence, the grievor alleges that the 1980 and 1981 salary increases should be calculated from the base salary which the McLaren award decided he should have been receiving on December 31, 1979. The salary increases he in fact received in 1980 and 1981 were taken. from the salary rate grid appendices to the 1980 and 1981 collective agreements. These rates ignored the effect of the McLaren award since they were both negotiated prior to the release of the 1McLaren award. They were calculated without reference to the July 1,1979 increase which the LMcLaren Board con- cluded the grievor was entitled to. The competing positions of the employer and the union cannot be fully appreciated without reference to the particular structure of ~the collective agreements between the parties. While there are differences in wording among the 1979, 1980 and 1981 agreements, they all follow the same basic structure. Furthermore, the evidence showed that they were all negotiated in essentially the same way. The agreements consist of two parts. The first part, which is two pages in length, sets out a formula by which salaries for all persons -6- falling within the Clerical Services Category will be set. Thk category includes as many as 20 separate classifications covering approximately 10,000 employees. In each of the agreements, the formula provided for a two-stage salary increase. The 1979 agreement provided: Salaries (a) Effective January 1,1979, an increase of $5.50 per week to all classiications in this category based on’ the salary rates in effect on December 31.1978, plus an increase of 3.4%. (b) Effective July 1,1979, a further increase of 3% to alI dassificatims in this category based on the salary rates in effect on December 31,197s. (c) Rates of pay for &ll classifications, resulting from the application of the increases set out in (a) and (b) above, are attached as Appendix A. The 1980 agreement provided: (a) Effective January 1,1980, an increase of ten UO) dollars per week to ail clarsifications in this category based upon the salary rates in effect on December 31,1979. (b) Effective April 1,1980, a further increase of five (5) percent to all cla.ssificatiMls in this category based upon the salary rates in effect on March 31,l980. The 1981 agreement provided: Salaries: (a) Effective January 1,1981, an increase of nine percent (9%) to all classiications in this category, based on the salary rates in effect on December 31,198O. I ~. - -7- (b) Effective May 1,1981, a further increase of $12.35 per week to all classifications in the titegory. (3 Rates q$ pay for all classifications, resulting from &. application of the increases set wt in ’ (a) and (b) above, are attached as Appendix A. The second part of each of the collective agreements consists of an’- appendix entitled “Clerical Services Category - Revised Compensation Rates”. The appendix includes a grid of salary rates for each classification in the bargaining unit at the time the agreement was negotiated. For each classification the grid includes the “old rate” (i.e. the salary for each step within the classification on the day immediately prior to the effective date of the new agreement) and the new salaries applicable at different points during the life of the~new agreement. The evidence demonstrated that this grid was calculated by the employer and verified by the union after the salary increase formula (the first part of the agreement) had been agreed to by the parties. This occurred during the ratification procedure and prior to the actual signing of the actual agreement. In essence, the evidence showed that the parties negotiated the percentage and dollar salary increases for the Clerical Services Category on the basis of a weighted average of the rates for all classifications and then simply mechanically applied the agreed upon formula to alI of the existing rates. The formula was agreed upon without reference to any particular classifications. Furthermore, during the 1980 and 1981 negotiations no specific reference was made by either party to the Clerk 6 General classification in general or the griever’s situation in -8- The evidence also demonstrated that in those cases where the parties agreed retroactively to include a new classification of employees in the bargaining unit who were previously excluded, the parties would agree to a wage rate level effective as of the date of inclusion. Furthermore, for the duration of the year in which these employees were newly included within the coverage of the collective agreement, they received salary increases calculated exclusively by reference to the formula partof the collective agreement. No reference could be made to the salary grids in the appendices in these situations, of course, since the agreement and the appendices were prepared and agreed to prior to the decision to .include the particular classification within the scope of the agreement; Thus, the formula could be and was applied since it referred to “all classifications” within the coverage of the agreement even though no reference could be .-.. found in the appendices to the particular classification. While this would appear to be the ‘.general practice of the parties, it was not followed in 1979 with respect to the newly - included Clerk 6 General classification in that they were not granted the July I, 1979 increase called for by the formula portion of the 1979 agreement. There was, of course, no reference to the Clerk 6 General classification in the appendix to the 1979 agreement. The employer’s failure to grant the July I, 1979 increase led to the griever’s 1979 grievance which was subsequently upheld in the McLaren decision. At the same time, it should be noted that -9- the grievor came within the scope of the collective agree’ment retroactively, since ttie decision to reclassify his particular position did not occur until January, 1980. In this context, the competing positions of the employer and the union concerning the 1980/81 grievance can be briefly stated. The employer’s position is straightforward. The employer states that the only way to determine the griever’s salary for 1980 and 1981 is to refer to the appendices to the 1980 and 1981 agreements. These appendices set out a salary for the griever’s classification, Clerk 6 General. This salary reflects the agreement of the parties as to the salary rate for a Clerk 6 General in each of the respective years. The grievor, as a Clerk 6 General, must be paid this amount. To do otherwise would violate the collective agreement. Therefore, since the grievor was paid at these rates in 1980’ and 1981, his grievance must be dismissed. It should be noted that on the employer’s approach, the McLaren award is irrelevant. It dealt with the griever’s salary in 1979 and nothing more. In 1979 there was no salary set out in the appendix for the Clerk 6 General classification. Thus, rightly or wrongly, the McLaren award used the formula portion of the agreement to calculate the griever’s 1979 salary. However, in the 1980 and 1981 agreements there is a specific salary set out in the appendices. Therefore, for these years there is no need to refer to the formula portion of the agreements and neither the reasoning nor the result of the McLaren case can influence or be substituted for these explicitly stated rates for 1980 and 1981. - 10 - The union’s’ position is almost as straightforward as the employer%. It concentrates on the formula part of the collective agreement in each year. That was the .basis of the griever’s 1979 grievance which the .McLaren award upheld: the employer had failed to apply the formula in the 1979 agreement which called for a July I, 1979 increase. The McLaren award said that the formula should have been applied. Therefore the griever’s 1979 year-end salary should have been higher than it was thought to be by the employer at the time. The’ employer applied the 1980 formula to the griever’s actual 1979 year-end salary, a salary which was subsequently found by the McLaren award to have been the wrong salary. As a result the, griever’s 1980 salary was also wrong and when the 1981 formula was applied to the 1980 year-end, it was again applied to an incorrect year-end salary. Thus the 1981 salary was also incorrect. In other words, the union’s position is that the employer introduced an error into the calculation of the grievor’s salary by failing to grant the July I, 1979 increase and then perpetuated that error in 1980 and. 1981 by applying the formula increases in those years to an incorrect base. The core of the problem, however, was the July I, 1979 error. This error was only confirmed in June, 1981 ‘with the release of the McLaren award. Thus, the union argues, the employer must now redo the 1980 and 1981 calculations taking account of the correct 1979 year-end salary for the grievor. On this view of the case, unlike the employer’s view, the McLaren award is of direct relevance tom the grievance,before us. - 11 - Before going further, we wish to state that we haves considered and accepted the McLaren award as correctly decided with respect to the ., -L. 1979 grievance. Neither counsel argued that it was not, although counsel for thee employer understandably did not express enthusiasm for the reasoning or outcome. Since the McLaren award is central to at least one view of this case, we have appended a copy of it to our award, thus making it part of our award. Both the employer’s and the union’s positions are plausible. Each relies on the collective agreement as the source of the griever’s salary for 1980 and 1981. The employer asserts that the correct approach is to rely on the appendix portion of each collective agreement to find the correct salary. The union asserts that the correct approach is to rely on the formula portion of each collective agreement to calculate the cdiiW salary. The difficulty is that the two approaches lead to different numbers. Determining the correct approach is a matter of properly interpreting the collective agreements. In putting the issue this way, we are implicitly rejecting one of the employer’s submissions. The employer suggested that if we were to do other than rely upon the salary rates in the appendices to the 1980 and 1981 agreements, we would be ignoring and violating the collective agreement. That submission, however, mis-characterizes the union’s position and prejudges the issue of interpretation. That is, the union also bases its claim on the salary rates provided for by the collective agreement but - 12- reads the collective agreement differently. The union argues that where .the application of the formula part of the agreement produces a salary rate different’from that stated in the appendix, the formula provision must be made paramount to resolve the inconsistency. Thus, the union is not asking that the grievor be awarded a salary different from that called for by the collective agreement. Rather, it simply urges upon us a different reading of the collective agreement than that suggested by the employer. Thus, our task is not to choose between applying and not applying the collective agreement to the circumstances of the grievor, but rather to apply the collective agreement properly to the circumstances of the grievor. In order to do that task - to apply the collective agreement. - we must choose the correct interpretation of the collective agreement since the parties have offered competing interpretations. It is to that task that we now turn. -: An appropriate point to start is the McLaren award. In that case the Board was also faced with a problem .of interpretation and application of the collective agreement as the parties offered competing interpretations. The employer and the union agreed that the source of the increase, if any, was the formula part of the 1979 agreement since the appendix made no reference to the newly created Clerk 6 General classification. The employer argued that since the July 1, 1979 increase called for by the formula for “all classifications in this category” (namely the Clerical Services Category) was to be applied to the “salary rates in effect on December 31, 1978” and since there was no such rate in the previous year’s agreement (because there ~8s no such classification), then . . - 13- there must be no increase. In contrast, the union argued that the phrase “salary rates in effect on December 31, 1978H should, in the circumstances, be taken to mean the salary rate paid to Clerk 6 Generals on December 31, 1978 even though they were not at that time within the scope of the bargaining unit and their salary rate was not included in the appendix to the 1978 agreement. After considering the matter, the McLaren award preferred the union’s interpretation and awarded the increase. The Board stated that neither party could stand on a literal interpretation of the collective agreement as there was a “gap” in the agreement which required the Board to find the interpretation which would most closely satisfy the meaning and intent of the agreement. The gap was caused by an event which neither of the parties could have known of at the time the 1979 agreement was negotiated - the decision to bring the Clerk 6 General within the bargaining unit on a retroactive basis. The essential point .however, is that the McLaren award was called on to interpret the collective agreement in its application to a situation which was not known to the parties at the time the agreement was, signed. Similarly, our task is to interpret the 1980 and 1981 agreements which were signed and negotiated prior to knowing the outcome of a critical event: the release of the McLaren award ,in response to the 1979. grievance. It was issued on June 23, 1981, over two months after the 1981 agreement had been signed. The interpretation problem we face, - 14 - therefore, is whether to rely on the formula found in the 1980 and 1981 agreement as applied to the IMcLaren - determined 1979 year-end salary (as the union urges) or to rely on the salary rates set out in the grid’in the appendices even though these rates were calculated by the parties prior to learning the outcome of the 1979 grievance and prior to knowing the grievor’s correct 1979 year-end salary (as the employer urges). One source of assistance in choosing between the competing interpretations is to look to the effect each’would have on the griever’s salary. If one interpretation leads to an effect that would appear to be inconsistent with tne intent of the parties, that effect would suggest that the alternative interpretation is more likely to reflect the true agreement of the parties. The employer prepared an exhibit which permits us to determine the effect of its interpretation of the collective agreement. By using the formula portions of the collective agreement we are able to determine approximately the effect of the union’s interpretation. Below, we have set out the non-merit weekly dollar increases the grievor would receive under the two interpretations of the agreement starting with the griever’s correct 1979 year-end salary as determined by the McLaren award. - 15- ~._ L Date of Increase Employer’s Interpretation Union’s Interpretation January I,1980 $ .I2 $10.00 April I, 1980 17.65 18.14 January I, 1981 33.36 34.29 LMay 1, 1981 12.35 12.35 It can be seen from this table that the two interpretations lead to almost identical increases at all times except January !; 1980. The May 1, 1981 increases are identical while the differences in the AprilI, 1980 and January 1, 1981 increases under the two interpretations are less than a dollar apart. The difference arises from the fact that these are percentage increases and the percentage is being applied to slightly different amounts. The critical difference occurs on January I, 1980. On the union’s interpretation, the grievor would receive a $10. increase while the employer’s interpretation leads to an increase of only -12 cents. The context of these two different conclusions is that the collective agreement- for 1980 provides “effective January I, 1980, an increase of ten (10) dollars per week to all classification in this category”. The union’s interpretation would give full effect to this provision. The employer’s would virtually eliminate it, reducing the increase for the grievor to 12 cents from 10 dollars per week, while aII other employees in all other classifications in the Clerical Services Category would receive the $10. increase. The reason for the difference is that the employer is’applying the $10. formula increase to the salary rate for December 31, 1979 prior to taking into . - 16- account the effect of the iMcLaren award. Since that award resulted in an increase of $9.88 a week for the period July I, 1979 to December 31, 1979, the employer’s method of applying the January I, 1980, $10. increase leads to an effective increase of only 12 cents. That is not an impossible result but it does not-strike us a likely one. It does not seem likely that the parties intended to single out the Clerk 6 classification for an effective increase of only 12 cents over the correct 1979 year-end salary while the approximately 10,000 other employees in the Clerical Services Category were receiving a $10. increase. There is no doubt that the parties could have agreed. to such ,a result. The employer and the union as certified representative of all the employees in the bargaining unit are free to agree to differential increases for different classifications. That is their legal authority. But the evidence indicates that in 1979 through 1981 they never discussed the possibility of differential increases and that each year they negotiated the level of increases without reference to any particular classifications. There are only two pieces of evidence that could possibly suggest a contrary intention. The first are the salary rates set out in the grid in the appendices to the 1980 and 1981 agreements. Normally such evidence would be compelling. However, in the peculiar circumstances of this case we find that it is not for a number of reasons. . - 17- First, the evidence was clear that these rates were never negotiated or considered on a classification basis. Rather, the-rates in the appendices were generated by mechanically applying the agreed upon formula to the rates that the employer was paying on December 31, 1979. As we have said above, the rate used by the employer for Clerk 6 General was in error as determined by the McLaren award. Thus the rates in the 1980 appendix merely reflect a mechanical mathematical calculation and not an intention to give the ,Clerk 6 General classification a, dramatically smaller increase on January I, 1980. Second, the McLaren award was not available to the parties until after the 1980 and 1981 agreements were reached. Thus it is difficult to believe that the parties intended to nullify its effect beyond 1979 before they knew of its content., There was certainly no evidence that would suggest such an intention. Third, the evidence demonstrated that in various situations where the appendices have not included rates for a particular classification or where the appendices have included a-mathematical error, the formula has been used as the source of the correct rates. While there is not a direct analogy between those situations and the one before us, they do add force to the proposition that when the- formula and the appendix are in conflict, the formula should be made paramount. Fourth, to give effect to the salary rates specified in the appendices as opposed to those reached by application of the formula would be to give effect to a result which was never discussed or openly contemplated by the parties during.negotiations ” as opposed to a result which would fit the pattern applicable to all other members of the bargaining unit, a pattern which would reflect tne -IS- bargaining unit wide negotiating practices. The second piece of evidence which might support the employer’s position is the wording used. in the formula itself. That is, the employer suggested that the wording of the formula in both the 1980.and 1981 agreements necessarily made the outcome of the McLaren award irrelevant to the grievor’s 1980 and 1981 salary entitlement. The argument is as follows. The formula in the 1980 agreement provides for “an increase of ten (IO) dollars per week to all classifications in the category based upon the salary rates in effect on December 31, 1979”. Similarly, the 1981 agreement provides for “an increase of nine percent... based on the salary rates in effect on December 31, 19SO”. What are the “salary rates in effect on...“? The employer argues that they must be the rates found in the appendix to the previous year’s agreement. Thus the reference in the 1980 ~. agreement to the rates “in effect on December 31, 1979” must mean the rate that was in fact being paid on that date. Similarly,.the reference in the 1981 agreement to the “rates in effect on December 31, 1980” must be the rates found in the appendix to the 1980 agreement. Thus even if the 1979 rate was the wrong rate (as determined by the McLaren award) and even if this error was perpetuated by the mechanical application of the formula prior to the release of the McLaren award, the employer argues that these rates must prevail. We do not find this interpretation of the 1980 and 1981 agreements persuasive. A similar argument was offered by the employer in ‘. the 1979 grievance but rejected in the ;McLaren award. We reject it also. The language simply does not dictate the result suggested by the employer. .While the language is open to that interpretation, it is equally open to the union’s whereby “rates” mean the rates found by the McLaren award to be the correct ones.~ Thus, faced with this ambiguous language, we are forced back to a consideration of the parties’ intent, a consideration which favours the union’s interpretation. As a result, we find that the union’s interpretation of the 1980 and 1981 agreements correctly reflects the language of the agreement and the intentions of the parties. Both parties argued that the doctrine of estoppel favoured their positions. The union argued that the employer was estoppedfrom denying the formula method of salary calculation even in the face of contrary figures in the appendix. While we have reached the same result as a matter of interpretation, we have not relied on estoppel in doing so. We did not find the evident&y basis necessary for such an argument. The employer argue.d that the union was estopped from denying the correctness of the rates set out in the 1980 and 1981 appendices because the union had had the opportunity to verify these appendices prior to the date on which the agreements were signed. From the date of signing forward, the employer argued that the union is estopped from basing a salary claim on any foundation other than the appendices themselves. In our opinion, this estoppel argument must also fail. The evidence does not support the - 20 - proposition that the union promised at any stage to be bound by the appendix to the exclusion of the remainder of the agreement. Rather, the union agreed to the collective agreement in its entirety including the appendices and to be bound by the proper interpretation of that agreement. Thus the union’s verification and ratification of the entire agreement simply forces us back to the central issue: the proper interpretation of the collective agreement. In this context the appendices are a part of the agreement which must be read and interpreted along with the remainder of the agreement, and it is this. task of interpretation that we have addressed throughout this decision. ,In the result, we find that the grievance must succeed. The proper interpretation of the collective agreement requires that section 2(a) of the formula in the 1980 agreement be applied to the 1979 year-end salary that the McLaren award determined to be the griever’s correct salary. The remainder of the 1980 formula and the 1981 formuIa must also be applied on this corrected basis. Before concluding this award, we wish to comment briefly on its possible impact on other employees in the Clerk 6 category. The actual impact, if any, will have to be determined by another panel of this Board in response to grievances, if any, by other employees. We have no desire to attempt to usurp the task of that other panel. However, it was acknowledged during the hearing before us that there was at least the possibility of such grievances. We were advised that no employee apart Z ‘: 21 - from the grievor grieved the failure of the employer to award the July 1, 1979 increase. Similarly, no other employee grieved the’1980 and 1981 increases. It would appear to us, therefore, that it would be a mistake to assume that our decision in this case automatically creates either a retrospective or prospective entitlement in favour of other persons in the 1 Clerk 6 General classification. Considerations of waiver, estoppel, lathes, and other doctrines may present hurdles not present in the case ,before us. However, we hasten to add that these issues are not before us and we do not purport to have considered or decided them. We opened this decision by describing the case as complicated. It was made a good deal less so by the excellence of both counsel and we thank them for their able assistance. We will remain seized to deal with any dispute as to the amount of compensation owed to the grievor. DATED at Toronto this 4th,day of August, 1982. , Attach. J.R.S. Prichard Vice Chairman W. Walsh Member A.C. Stapleton Member