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HomeMy WebLinkAbout1989-1077.Taylor.90-05-16 ', ONTA RIO EMPLOYES DE LA COURONNE  CF~O WN EMPLO YEE~ DE L'ONTA~'O GRIEVANCE CQMMISSlON DE SETTLEMENT REGLEMENT , ~'~ BOARD DES GRIEFS ?: 18o DUNDAS STREET WEST, TORONTO, ONTARIO, MSG IZ~ - SUITE 2100 TELEPHONE/T~J.~PHOAtE 1'80, RUE DUNDAS oLtEST, TORONTO, (ONTARIO) M5G '~Z8- ~UREAU 2'~O0 (416)5g$-0688 1077/89 IN THE HATTER OF AN ARBITRATION Under THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT Before THE GRIEVANCE SETTLENENT BOARD BETWEEN: OPSEU (Taylor) Grievor - and - The Crown in Right of Ontario (Ministry of Correctional Services) Employer - and - BEFORE: J.W. samuels Vice-Chairperson G. Majesky Member I. Cowan Member FOR THE K. Whitaker GRIEVOR: Counsel Ryder, whitaker, Wright and Chapman Barristers & Solicitors FOE THE J. Saunders EMPLOYER: Counsel Hicks Morley Hamilton Stewart Storie Barristers & Solicitors HEARING: March 28, 1990 Some time ago, the grievor received an overpayment of salary. The Ministry is now making deductions from her salary cheques in order to recapture the amount overpaid. The grievor claims that the Ministry should be estopped from reclaiming the money, because representations were made to her that the excess payments were proper, and, relying on these representations, the grievor made various financial expenditures and commitments. The grievor has been employed by the Ministry since 1979. By 1985, she had risen to a Secretary 4 position, which was excluded from the bargaining unit. Then, in 1985, this position was discontinued. The grievor applied for a posted position as a Probation and Parole Secretary in the Cambridge Probation Office and was successful. This position was classified as Secretary 3. The grievor commenced in the job on May 12, I986. The grievor was informed that her salary would be red-circled at the Secretary 4 level, and that she would not receive merit increments, until the Secretary 3 salary reached her red-circled level, at which time she would receive the appropriate salary as a Secretary 3. In September 1987, the grievor received a large retroactive payment in her pay cheque. She was very surprised and immediately phoned the Ministry's payroll office in Toronto to say that there must have been some mistake. The clerk on the other end of the line went away for a moment to check on things and returned to tell the grievor that there had been no mistake. The money was the grievor's. In fact, we now know that there had been a mistake. Through a clerical error, the grievor was being treated as if she was entitled to salary at the OAG 8 level (Secretary 4 had become OAG 8 by this time), and the payroll office gave her a retroactive payment for all of 1987 and thereafter paid the grievor as if she was an OAG 8 (the Secretary 3 level had been converted by this time to OAG 6). 3 In mid-March 1989, Mr. R. Dawson, the Ministry's Director of Human Resources Management, wrote to the grievor to inform her of the error and to claim back $3357.18. After some correspondence concerning the terms of repayment, the Ministry commenced deducting $43.04 per weekly pay cheque. The gfievor's position in the correspondence was that she was unable to meet these payments, preferring to pay back $20 per pay cheque. In her grievance, the grievor claims that she should not have to pay back anything. The law in this situation is fairly clear. Where money is paid because of a mistake of fact, generally the receiver must repay the money, either because this is the equitable thing to do, or because there is considered to be an implied promise to repay. However, where the receiver has materially changed her circumstances as a result of the receipt of the money, so that it would be inequitable to force restitution, this obligation to repay may be relieved. The authorities in this area were reviewed extensively by the Supreme Court of Canada in Rural Municipality of Storthoaks v. Mobil Oil Canada Ltd. (1975), 55 DLR (3d) 1. And for an example of the application of the Storthoaks principles in a context similar to ours, see Re Ottawa Board of Education and Federation of Women Teachers' Associations (1986), 25 LAC (3d) 146 (P. Picher), In our case, the grievor argues that she has materially altered her circumstances in reliance on the Ministry's payments to her and their assurance that the monies were properly.paid. In particular, she says that she and her husband (an OPP officer) took on three significant obligations and made a significant RRSP contribution, which they would not have done if they'd known that the Ministry would 'reclaim over $3000. Firstly, in 1988, she and her husband, together with another couple, arranged to have a device patented and assumed a mutual obligation to pay legal fees of I IIIIII I 4 $5000. Secondly, in early 1989, she and her husband traded in an old car for a newer one, and assumed a loan of $6000 payable over more than three years. Thirdly, in February 1989, she and her husband purchased an above ground pool for $3650 and borrowed money to pay for it. Fourthly, her husband made a $1000 spousal RRSP contribution in February 1989. Then, in March 1989, the Ministry informed her that her pay cheque had been too hrge for some time. Her pay cheque would now be reduced to the proper amount, and she would have to repay the overpayment of over $3000 by payroll deduction. In our view, coming when it did, just after the assumption by the grievor and her husband of two loans (for the car and the pool) which depended on her continuing to earn what her pay cheque was showing up until then, this announcement by the Ministry was pretty hard on the grievor and her family. It was not possible to simply mm the clock back and return to the old car and a pool-less backyard. The grievor did try to cancel the pool contract and, when this failed, she made inquiries about selling the pool, but these too came to naught. In these circumstances, it was inequitable for the Ministry to demand $43 from each pay cheque. The grievor's offer of $20 per cheque was reasonable. Bearing in mind that the grievor will have had the use of the Ministry's money interest-free for some years, we will not order any return of monies to the grievor, but we will order that, henceforth, the Ministry can deduct no more than $20 from each of her bi-weekly pay cheques until the money which was overpaid has all been repaid to the Ministry, with no interest. 5 We will retain our jurisdiction to determine any further matters relating to this situation, in the event that the parties are unable to agree on all the details of the repayment plan. Done at London, Ontario, this 16th day of t~ay ,1990. ~,.' I. Cowan, Member