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HomeMy WebLinkAbout1984-0241.DeNapoli.94-03-03EMPLOYESDELA CO”RONNE DEL’ONTARIO COMM,SS,ON DE RiGLEMENT DES GRIEFS IN THE MATTER OF AN ARBITRATION under THE CRONN EMPLOYEES COLLECTIVE BARGAINING ACT BefOr THE GRIEVANCE SETTLEMENT BOARD OPSEU (D8NapOli) Griever - and - The Crown in Right of Ontario (Ministry of Health) EUlplOy8r BEFORE: FOR THE' mJION FOR THE EHPLOYER B. Fisher Vice-Chairperson S. Hennessy Member D. Olsen Member N. Roland Barristers & Solicitors J. Zarudny Counsel Crown Law Office Civil Ministry of the Attorney General June 11, 1993 1 In a previous award, this Board awarded compensation retroactive to 20 days prior to the date of the grievance, (February 4, 1983). At that time the issue of interest was not decided as the parties specifically asked that the Board remained seized of the issue. The principal amount has now been paid however the issue of interest is sttll unresolved. It was the Ministry’s position that no interest should be awarded because in three other cases involving OHIP billing clerks (w 240/84 (Verity), Patars 241/84 (Jolliffe) and Ashley 343/85 (Emerich), interest was not provided. Only the Peters case (decided in 1987) explains why no Interest was awarded. Vice Chair Jolliffe, stated at page 61 and 62, ‘Counsel for the Union has requerled the award of interest on the amounts payable lo the Grievers since November, 1982. We have given the request careful consideration. II is true Iha! this Board has awarded inlerest where deemed appropriate in a number 01 disciplinary cases and the Division Court has recenliy upheld the power IO do so In R. v. O.P.S.E.U. and the Grievance Setllemenl Board ll’hibert 81 all as yet unreported, applying Section 19 of the Crown Employees Collective Bargaining Acl. 7bis, however, is a classikdion case, not a disciplinary mailer. It appears to US that in classifying the Gfievon incorrectly the Employer was not proceeding in an arbitrary or discriminalory manner, but upon its underslanding 01 Ihe application and interpretation traditionally given 10 the clerical series standards In these circumstances, and consistent with previous decisions of this Board, such as m, supra, we are no! persuaded that this is a case in which intaresl should be awarded. Neverlheless. if for any reason, payment is not made to any griever on or before May 1, 1987, Ihe amount due shall bear interest thereatler al the cumulative rate of one per cent per month. In our opinion, this case represents the older line of cases where interest was seen as the 2 exception rather than the rule. These cases viewed the award of interest as a punitive measure. However the more recent line of cases sees interest as conipensatory rather than punitive. In m 1563/85 (Kates), the Vice Chair has this to say at page 12 about the Peters line of cases: ‘We hold an entirely dilferenl opinion with respect lo the grievers’s en1i1lemen1 lo interest with respect lo the amount payable as compensation. No.parly queslioned the Board’s jurisdiction lo award inleresl (see: Re The Pueen in Rioht of Ontario and Ontario Public Service Emolovees Union et al. (1986) 57 OR (26) 641 (DIV CT) at p. 649). Nonetheless, it was suggested by the employer, relying on & OPSEU (Susan Peters et al) and Crown in Riaht 01 Onlario (ministrv 01 Health 241/84 decision dated March 5, 1987 (Jollille) that our discretion ought lo be limited in awarding interest lo disciplinary cases wherd the employee’s penally at \, arbitration has been reversed or otherwise moditied. The implication that the employer drew from the Peters Case SuggeSlRd that the awarding of “interest’ was inappropriate to successful classification grievances because the necessary - ‘punitive’ element was absent relative lo the employer’s alleged infraction. Accordingly, the arbitrator writes at p. 61: Counsel for the union has requested Ihe award 01 interest on Ihe amounts payable IO the Grievors since November 1982. We have given the request careful consideration. It is true that this Board has awarded interest where deemed appropriate in a number ot disciplinary cases and the Division Court has recently upheld the power lo do so in R. O.P.S.E.U. and The Grievance Selllemenl Board (Thibert et all. as yet unreported, applying Section 19 of the Crown Employees Collective Bargaining Act. This, however, is a classification case, not a disciplinary matter. II appears lo us that in classifying the grievors incorrectly the Employer was not proceeding in an arbitrary or discriminatory manner, but upon its understanding 01 the application and interpretation traditionally given lo the clerical series standards. In these circumstances, and consistent with previous decisions of this Board, such as m. supra, we are not persuaded that this is a case in which interest should be awarded. Nevertheless, il lor any reason, payment~is no1 made lo any grievor on or before May I, 1987, the amount due shall bear interest therealter al the cumulative rate of one per cent per month. With the ulmosl respecl to Ihe foregoing we are not of lhe view that the arbitrator in the Peter’s Case has applied the appropriate lest in.resolving whether or no1 lo exercise his discretion in lavour of awarding interest. It appears.!0 us that the appropriate standard lo be applied In resolving to award interest (as suggested at the hearing) is whether ‘the grievors will be made whole’ for any losses they have incurred as a result 01 the employer’s mistaken application or interpretation of the collective agreement. Moreover, lhe employer’s abberadon whether it arises at arbitration in the context 01 a disciplinary penally that has been reversed or modified an/or in the context ol an adverse contractual ruling is of, no consequence. Nor is it necessarily relevanl in any decision lo the awarding of 3 inleresl whether the employer’s breach of the collective agreement represented a m mistake or otherwise. The significant question lo be asked in the exercise of the arbitrator’s discretion to award interest is whether the aggrieved employees subject lo their responsibility to miligale have endured a linancial prejudice as a result of the employer’s mistake. In this regard the Board relies upon Re Pacilic Western Airlines Ltd. and Canadian Airline Emolwee’s Association (1982) 7 LAC (36) 348 (Larson) at p. 347: As for the claim for interest on all sums awardad, we are 01 the view that Air Canada case represents the slate 01 the law in this respect on matters falling within lederal (urisdiction. In that case, the board, In following Re Polymer Corp. and Oil, Chemical 8 Atomic Workers Int’l Union, Local 16-14 (1962), 33 D.LR. (23d) 124, la LAX. (Zd) 204% (19621 S.C.R. 338 sub no. lmbleau et al v. Laskin et al, 62 C.LLC. para. 15,406. held that the remedial authority interest in arbitration boards includes the power to award interest as damages. The board slated, and we agree, that an award of interest is not punitive. II is a simple application of the principle that a prlevor is to be put back inlo the positlon that he/she would have been in had the lerminalion not occurred An award of Interest does not constitule a disreaard ot the leoitimacy ot the Issue between Ihe oartles. Rather. al leasl notionaM durino lime that is reouired lo orocess the disoule, the partv who has breached the colleclive aareemenl, albeit that it has acted in aood faith. has had the use of moneY that it would not otherwise have had an the party who was wronned was deorived 01 il. In limes 01 htah inflation interest must be reaarded as a sianilicant factor 01 comoensalion without which restitution Is impossible. We wholeheartedly agree with the Boner case and therefore will award interest in this matter. As to the calculation of interest there are three periods we have to consider: a) Februarv 4. 1983 to December 31. 1985 This is the period beginning with the date 20 days prior to the filing of the grievance and ending with the date the classification ceased to exist. b) From Januarv 1. 1986 to date the principal amount of the award was Paid. 4 cl From the date of the DrinciDal amount of the award was paid until Davment of the outstanding interest. In dealing with the first period, counsel for the Union says that interest should be awarded in keeping with a decision of Martin Teplitsky dated February 7, 1991 with respect to the Office Administration Group Grievances. In that award Mr. Teplitsky varied the usual Hollowell House formula to provide that one-half the usual rate applies for the current year of a continuing payment, but that in the subsequent years the interest owing on the amount should be a full rate as there is~no continuing periodic payment with respect to that year’s payment. This presumably compensates the individual more fairly where there is a long period of retroactive periodic payments. For instance in Mr. Teplitsky’s case the time frame was over 4years of continuing In our case the relevant period is almost 3 years of continuing payments. Although the Board understands the logic of Islr. Teplitsky’s award, we feel that the traditional Hallowell House approach is more appropriate. The Union’s claim for compound interest is not awarded, as we prefer the simple interest rule as found in the Courts of Justice Act, Sections 127-130. . As to the rate of interest, there has been large variation in rates since 1983. Based on the’ average annual rate In Tables 1 and 2 In Section 128 of the Courts of Justice Act, the Board has determined that a fair rate is 10%. Thus, applying the Hollowell House principle, Interest for this first period of February 4,1983 to December 31, 1985 is to be calculated on the basis of 5% of the wages owing for that period. Thus if the total wages owing for that period are $100, interest would be payable as follows: $100x.05-365 x 1060 = $14.52 (number of days between February 4, 1983 and December 31, 1985 = 1060) For the second period, being January 1,1988 to the date of payment of the principal amount of the award (assume for argument sake this was December 31, 1992) the calculation would be as follows: $100 x .l x 6 =$60.00 For the third period, the grievots are entitled to interest on the unpaid interest until that Interest is actually paid. Assume that the Interest owing Is paid on August 1,1993, the calculation would be as follows: t74.52 x .l - 365 x 213 = S4.35 6 The interest owing therefore would be as follow: $14.52 + $60.00 + $4.35 = $78.87 In the ~unlikely event that there is any problem in implementing this award, the Board will remain seized in order to deal with those issues. Dated this 3rd day of March, 19q4. $$&flSHER : VICE CHAIRPERSON S.R. HENNESSY - ’ UNION MEMBER D.P. OLSEN . EMPLOYER MEMBER