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HomeMy WebLinkAbout1988-0188.Massey.95-12-18~,o~ .; ~;~ '~'~"'r: :~ .?:;::-:?~'i" ;- ONTARIO EMPL 0 Y~-S DE LA COURONNE ~ :,,,., =,.. : ,.~.~.~::..,. ?.,. CROWN EMPLOYEE$ DEL'ONTARIO '~ GRIEVANCE C,OMMISSION DE ~ l SETTLEMENT REGLEMENT BOARD DES GRIEFS 180 DUNDAS STREET WEST, SUITE 27~, TORONTO, ONTAR~. MSG ~Z8 TE~PHONE/T~L~PHONE: .(476) 326- ~38~ t80, RUE DUNDAS OUEST, ~UREAU 21~, TORONTO (ONTARIO). MSG 1Z8 FAC$1M!~E/T~L~COP~E .' (4~6) 326-~9~ · GSB # 188/88 OPSEU # 88A922 '~ " IN .THE 'MATTER OF AN ARBITRATION Under T~E CROWN EMPLOYEES COLLECTIVE BARGAINING ACT Before TME GRIEVANCE SETTLEMENT BOARD ' BETWEEN OPSEU (Massey) Grievor The.Crown'in Right of Ontario (Ministry of Transportation) .~ Employer BEFORE M. Keller Vice-Chairperson M. Lyons Member FOR THE G. Leeb GRIEVOR Grievance Officer Ontario Public Service Employees Union FOR T~E S. Patterson EMPLOYER Counsel Legal services Branch Management Board Secretariat ~EARING October 2, 1995 November 1, 1995' DECISION In June 1991 the parties entered into a Memorandum of Settlement in which the employer agreed that the grievers were improperly classified as Safety Instruction Officer 2. The employer agreed to create a new Classification. It further agreed "...to pay interest on the retroactive wages owed to the grievors as a result of the reclassification from November 1, 1986 as per the Hallowell House Limited formula (1980) OLRB Rep. Jan. 35). The Memorandum of Settlement was made an Order of the Board on July 10, 1991. On October 8, 1993 the Union wrote to the Registrar of the Grievance Settlement .Board alleging that the employer had not properly calculated interest, seeking an arbitration hearing as soon as possible. This panel was ultimately convened to deal with the issue. This dispute arises from the manner in which the employer has calculated inter6st. Their calculation was done differently depending on whether they were calculating interest prior to the date the Civil Service. Commission implemented the new class standard (April 24, 1991) or after. That date is known as' the C.S.C. date. With respect to the pre-C.S.C, date, the employer calculates interest on the basis of 1/2 interest (non-compounded) on. the principle sum owed for each calendar year. According to their calculations the amount owing is $1,781.22. They calculate full interest' on the same amount since the C.S.C. date, or $6,225.80. Put another way, the employer has not accrued the money owing year by year in its'calculation of interest.~ So, if $100 is owed for 1986 and a further $100 for 1987, it pays interest on the $100 for 1986 oniy. in 1986-but not 'in any subsequent year. Similarly the sum of $100 owed for 1987 would attract interest in that Year only. The union's ~calculation is based on an accrual~of ~sums owed. By that is meant that the $100 owed in 1986 is also owed every year thereafter until paid.- Interest is therefore paid on that sum each year until it is~pai~. The same is true of the Principal amount owed in 1987 and subsequent years. Their calculation Would produce pre-C.S.C, interest of approximatel'y $8,000. A second issue arises with respect to the affect the C.S.C. date has on the payment of interest. Effectively, the employer does not pay interest on money accruing from the C.S.C. date, only on money accruing prior to it. The union says interest is owed on all monies owed, whether pre or post C.S C. date, until the actual implementation date. The Board heard evidence with respect to an alleged agreement of. the parties with respect to how interest would be Paid. The employer adduced the evidence in support of an estoppel argument it develOped. We do not need to deal with this issue as the date of the alleged agreement post-dates 'the Order of the BOard in this matter and can have no .affect on how this matter is determined by the Board. The union argues that the purpose. Of ordering interes~ is to put employees in the position they would have been if they had had the use of the money of which 'they were deprived. The employer's formula, it submits, does not accomplish that objective. In dealing with the pre/post C.S.C. date issue it was argued that there is nothing magic about that date. Nothing changes until the new rate is.actually implemented. The employer continues to have use and ~ont~ol over the money until then. The employer argues, first, that this Board is bound by the decision in Anqus (203/84, September 9, 1991, Slone) which, it is suggested determined how the Hallowell House formula must be applied. That interpretation, it is suggested, supports the employer's interpretation in this case. The employer then dealt with the Hallowell House formula. It argued, first, that the parties of their own volition have not applied it strictly and therefore it can not be argued that it should be strictly applied. I't is then submitted that it can't be strictly applied because it refers to the establishment of the interest rate from the date of filing of the grievance. Where there are multiple griev0rs and different grievance dates it ensures that Hallowell House can't be applied as designed. In.dealing With the C.S.C. date, the employer agrees that there is not magic to it, just that by usage and convention it has always been so. If the Hallowell House formula is to be applied, the date chosen by the union, however, doesn't apply either. The union, it was submitted, has no right to cherry pick. The appropriate date has to be the date of implementation as that is the only date at which the quantum can be fixed. In dealing with the pre/post C.S.C. date issue, we find that the C.$.C. date has no application to the determination of interest. The purpose of paying interest is to make the grievors whole. Application of 'the C.S.C. date does not accomplish that and, therefore, unless specifically provided for can't be the last day on which interest is to be paid. That date will be determined below. The Anqus decision referred to earlier equally' has no application in the instant case. That decision dealt with the question of compound interest. This decision deals with the issue of interest accrual. In looking at both the union's and the employer's ~interest calculation~we note that neither is done in accordance with the Hailowell House formula. Neither, as a resUlt, can be adopted by the Board. What then, can we accept? Practice Note 13 of the Ontario Lab6ur Relations Board sets Out how the Hallowell House formula is to be applied: PRAt..'TI(3E NOTE NO. 1.% $¢pt~mh.c 8, 1981). · AWARDING OF INTE~T I, The Board seated in R~io Shack, [1979J OL~ ~p~ D~c. 12~0 a~ page- 1255 ~ar a d~ision aw~din~ b~k-pay or compunet, tiaa in the farm of damag~ ".,-. sho~d be ~ fully comp~m~to~ ~ possible aug. could bear ~t~rest." .The Bo~d sub~qucndr determined in Hal~weH -' ;[uu~e Limited, [19~] OL~ R~9. J~. 35, that i~ ntde~ to fully com~n, sate a compl~uant or grievor Ior m~nem~ [osse~ attribUtable to a ~5ola~on of ~e ~b~t ReN~iom ,1~, i~t~re~t w~l namely be awarde~ on ~ .. mone~' com~emaaon ordered by the B~rd. 2. The form~a which may be used in'calculating the.interest p&vable On a wage claim i~ .set out by the Board in the following tei'm~ in tt~Ilo'a, ell ltou.sa Limia¢4 at page a,~:. a... the Board had concluded that a calculation of intereat on the Board's monetary aw~,rds should be carri~fl, out m follows: Firstly, t'akin~ into account all L'u:tors, including )he duty to mitigate, ms,ss the wagu portion.of the com~nsati~n award; secondly, divide it /n haft; lmtly, apply th~ appropriat~ annual interest r-re prorated to rdlect the proportion ale the year represented by the compensation award." rate ~.~ determined a.nd published by thc Baak of Camada in the Bani of Canada R~ieul for the month in which the coml~laint wgz filed with the Board, The Board in ttallow~ll tleu,~t Limited used th~ follo~ng a.~ an example o~ the appl. tcdrion of the formul.'r "The Board determines 'that an.employee has bean wrongfully charged, Tho Board% award marks four months from ~e time of dis- charge. Over ~gt four-mohth ~riod' the ~o~11~ of wages, tang Jato ~count mi6ga~cn, is e/mblhh~ w be $3,~,~. Th~ ~d~u~ ra~ pu~ · llsk, d in ~e Bank of Ca.da R~ du~ng the mo~ ~e com~l~nt w~ filed is 12 per cent. Th~ ~r~t would ~ cEc~a~ed by dis~ng · dj~ted m g four-mon~ ~od, ~at i~ 12 per cent m~tipli~t by 4t12~. Th~ re~l~ng interest ~en i: $1,5~.~ m~ipticd by 12 per cent w,ltiplied by ~/12~, or $60.~." 4. Iffowever, for example, where Interest ts awarded on a non-wage it there L~ no need to cLiwde thc lu/ilb sam in half to reflect the gradual ~c~u~ of loss ~ ,~tb w~s. ~. A copy of th~ Bani ~/Ca.~d~iew con~tn[ng the monthly Drime rate ~ oa file ~ fl~e Board. Pa~s may ob~in :he Bask of C~ interest r~e a~fl r~aaest from ~e ~trd or I~ Labour Rela~ons Of~ce~. 6. Th~ Board in dt c~es has &~&etion E aw~dia~ inter~t. Integer may not ~ aw~d~d, or the ra~¢ of i~i~t ~ be a~plie~ ~o &n awed may iacrem, ed or decrca~d by the Buard~nding on the circulates ~f each c~, However, uEeaa ~e Bo~d s~ca~y dctevmine~ otherw~e, ~terest aw~ded by thc Bo~d h to be c~ated, Mong the ~es ~op~d ~ the In the instant case the parties agreed, and the Board ordered that interest be paid in accordance with that formula. So that's what must be done. Any agreements, real or purported that the parties might have had prior to this hearing to deviate from or amend the formula is irrelevant to our determination. Our role is to determine how the formula applies to the precise facts in the instant cas~. The calculations given to us by'the parties are of no moment unless they accurately reflect the application of the formula. The firSt determination to make is the period to which the formula 'will be applied. The commencement date is November 3, 1986, a date 'both parties, seem to accept. The last date to which interest applies must be the day prior to the implementation of new rates (i.e.) November '21, 199'3. Any other date is artificial and' reflects neither the formula nor its purpose to pay interest on money gr~e~°rs were denied. We must then "assess the wage portion Of the compensation award". That must be done as follows: determine the amount actually earned. by an employee as Wages for the period (X). Establish the amount the employee would have.-earned as wages during the whole of the relevant period as. if the new wages had been in effect (Y). Subtract X from Y. (i.e.)'The amount actually earned is deducted from the amount that shall have been earned. That establishes the amounts employees were deprived and on which' interest is due (Z). That full amount is then divided by two (2). Then, establish the rate of interest. As is~indicated in Practice Note 13, this part of the formula may be increased or decreased by the Board depending on the circumstances of each case. In the instant case the Board orders that the interest be established by averaging the prime rates of the Bank of Canada on November 3, 1986 and then each six month period thareafter.with the last prime rate being that in effect the day prior to implementation. The average r'ate of interest calculated in this fashion is to be applied to the amount (Z) established above adjusted to the whole of the period as shown in paragraph 3 of Practice Note 13 (i.e.) multiply (Z) by the number of months from November 3, 1986 to November 21~, 1993 divided by 12. These calculations are to be made, .and the appropriate sums of money are to be paid forthwith. The Board remains seized to deal with any issue arising from this decision. Nepean, this ~8~ day of December, 1995. ~..~~ M.B_~.Keller, Vice-Chairperson I concur I~.~J~-~'- _  ar~ Roberts, Member I concur -.. {~-/.~,,-/'~''' Mr. Michael/Lyons, Member -