HomeMy WebLinkAbout1991-1410.Schneider.92-03-31 ONTARIO EM'PLOY~$ DE LA COURONNE
CROWN EMPLOYEE$ DE L 'ONTARIO
GRIEVANCE C,OMMISSION DE
SETTLEMENT REGLEMENT
BOARD DES GRIEFS
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1410/91
IN THE ~TER OF~ ~,BITI~TZON ''
gn~e~
THE CRO~ EHPLOYEE8 COLLECTIVE BP, R~INXN~ ~CT
Before
THE ~RXEV~CE SETT~E~
BETWEEN .
CUPE (Schneider)
Grievor
The Crown in Right of Ontario
(Ministry of Housing)
Employer
BEPORE: J. Roberts Vice-Chairperson
J. Carruthers Member
D. Clark Member
FOR THE R. Carnovale
GRIEVOR National Representative
CUPE 767 ·
FOR THE K. Billings
EMPLOYER Counsel
Miller, Thomson
Barristers & Solicitors
HEARING: December 17, 1991
AW ,A~D
This is an interesting contract interpretation case. At the
end of January, 1991, the grievor, aged.62, ceased employment with
the Metropolitan Toronto Housing Authority and elected to receive
a deferred 'pension under the Public Service Pension Act, R.S.O.
1987, c. 73. At the time he ceased employment, the grievor had a
total of 204 days of accumulated sick leave credits; however, the
· final payment attributable to his accumulated credits was for only
half of his total, 102 days.
The grievor protested to the Housing Authority, claiming that
under Article 19.05 of the Collective Agreement he was entitled to
its maximum payout of 180 days. The Housing Authority responded
that he was not entitled to the benefit of Article 19.05 because he
had not "retired" within the meaning of that provision. His case,
the Housing Authority said, was governed by Article 19.06 of the
Collective Agreement, which provided for a payout of only 6ne-half
of his accumulated sick leave credits.
Dissatisfied with this response', the grievor sought the
assistance of the Union and on February 6, 1991 he filed the
grievance leading to the present proceeding. For reasons, which
follow, .it is the conclusion of the Board that this grievance
cannot succeed and so must be dismissed.~
II.
Articles 19.05 and 19.06 of the Collective Agreement read as
follows:
19.05 There shall be paid to the representative of every
employee who dies while in the service of-the
Employer or to an employee who retires in
accordance with the terms of the Pension Plan, an
amount equal to his accumulated sick leave credits
up to a maximum of 180 days.
19.06 Upon severance of employment of any employe~.with
five ~5) or more years service, for any reason
other than discharge for cause, 'there shall be a
paid amount equal to one half of the employee's
accumulated sick leave credits up to a maximum of
160 days.
The application of Article 19.05 -- Qhich gives a far more generous
payout of accumulated sick leave benefits than Article 19.06 -- is
expressly restricted to "an employee who retires in accordance with
the terms of the Pension Plan."
It was common ground between the parties that the "Pension
Plan" referred to in Article 19.05 was described in two statutes:
(1) the'Public Service Superannuation Act, R.S.O. 1980, c. 419 (the
Superannuation Act); and (2) the Public Service Pension Act, RoS.O.
1987, c. 73 (the Pension Act). The Pension Act amended and
3
supplanted the former as of January 1, 1987; however, it expressly
continued the applicability of the Superannuation Act for service
Rrior to that date. See the Pension Act, ss. 3, 12 and 14 (1).
Articles 19.05 and 19.06 of the Collective Agreement pre-da~ed
by many years the Pension Act. After the Pension Act went into
effect, they were not amended in any way that would be germane to
this arbitration. In particular, Article 19.05 remained restricted
to "an employee who retires in accordance with the terms of the
Pension Plan."
Under the Superannuation Act, there were three ways in which
an employee could "retire" and receive and unreduce~ pension --'or
in the words of the Act, "a superannuation allowance". These were
set-forth in s. 11 of the Act, as follows:
11. (1) Subject to ~ubsection (4), every contributor who,
(a) has attained the age of sixty-five year~; and
(b) has contributed to.the Fund in respect of a
period of ten or more years,
is entitled to a superannuation allowance upon his
retirement. R.S.O. 1970, c. 387, s. 11 (1); 1975,
c. 73, $. 5 (1).
(2) Subject to subsection (4), every contributor who,
(a) has attained the age of sixty years; and
(b) has contributed to the Fund in respect of a
period of twenty or more years,
is entitled to a superannuatioh allowance upon his
retirement. R.S.O. 1970, c. 387, s. 11 (2); 1975,
c. 73., s. 5 (2).
(3) Subject to subsection (4}, every contributor who,
(a) ceases to be employed in the public service
after the 30th.day of November, 1971; and.
(b) has credit in the Fund for a number of years
· of service that, when added to his age on the
date he ceases to be employed in the public
service, totals at least ninety years,
is entitled to a superannuation allowance upon his
retirement. 1971 (2nd Sess.), c. 10, s. 3; 1974, c.
37, So 6; 1975, c. 73, s. 5 (3).
An employee could receive a superannuation allowance upon
retirement at age 65 after ten or more years of pensionable service
(the 65-10 rule); (2) retirement at age 60 after twenty or more
years (the 60-20 rule) ; or (3) retirement at less than age 60 if
the total of the .employee's age plus pensionable service was at
'least ninety years (the 90 year rule).
The Pension Act, however, did not repeat the "retirement'~
language of s. ll of the Superannuation Act. Section 15 of
Schedule I of the Pension Act retained the 65-10, the 60-20, and 90
year rules, but expressed them as follows:
15 - (1) Every member who has twenty-four or more moHths of
continuous members in the Plan or has two or more
years of credit in the Plan and who ceases to be a
member of the Plan on or after attaining sixty-five
years of age is entitled to a pension computed in
accordance with the Plan, except that, if the
member has less than ten years of continuous
membership and has credit in the Plan for less. than
ten years,~ the pension shall be computed only on
his or her.'credit in the-Plan for employment or
service after the 31st day of December, 1986.
(2) Every member who has at least twenty years of
credit in the Plan and who ceased to be a member of
the Plan or after attaining sixty years of age is
entitled to a pension computed in accordance with
the Plan.
(3) Every member who has credit in the Plan for a
period of time that, when added to the member's age
on the date the member ceases to be a member of the
Plan totals at least ninety years is entitled to a'
pension computed in accordance with the. Plan.
Essentially, reference to retirement as a trigqerinq event was
replaced by reference to cessation of membership in the Plan.
It seems likely that this change in language resulted from the
adoption in the Pension Act of a more liberal pension Scheme,
designed to permit, inter alia, younger employees leaving for jobs
in e.g., the private sector, to-retain the pension benefits
attributable to their years of pensionable service with the
government. In line with this, th~ qualifying period for pension
benefits was dropped from ten to two years and virtually all
reference to "retirement" as a precondition to eligibility was
eliminated. See. ss. 11,, 15, & 16 of'Schedule i of the Act.
Mr. Nuno de Lima, the Benefits Coordinator for the Ministry of
Housing for more than twenty years, testified that both before and~
after the introduction of the Pension Act, it had been the
consistent policy and practice of the Ministry to restrict
application of Article 19.05 to-%hose employees qualifying for an
unreduced pension under the 65-10, 60-20,- or 90 year rules
6
expressed in the Superannuation Act. Before the advent of the
Pension Act, he said, it was understood that in restricting Article
19.05 to "an employee who retires in accordance with the terms of
the Pension Plan", the parties intended to restrict the benefit of
its more generous payou~ to thos~ employees who qualified for
unreduced pensions under the three specific circumstances of
retirement described in s. 11 of the Superannuation Act. Ail other
employees received the more modest payout established.in Article
19.06. In his experience, he said, this interpretation was never
challenged by' the Union.
When asked why he did not chaDge the Mi~istry's policy after
the Pension Act, -SchedUle I, s. 15, eliminated all reference to
retirement in, inter alia, its formulation of ~he 65-10~ 60-20 and
90 year rules, Mr. de Lima responded that in spite of the change in
the statutory language, the parties did not address in negotiations
making any change to the "retirement" wording of Article 19.05 of
the Collective Agreement. He was aware of this, he testified,
because he was involved in contract negotiations as part of the
management'team, and had specific responsibility in the area of
policy matters affecting the Housing Authority.
Because the parties had not turned their attention to whether
the prior practice should change, he said, the Ministry continued
to adhere to. it. Since the grievor did not qualify .for an
unreduced pension under any of the three rules that were
historically applied, he added, the grievor could therefore, only
receive the more modest payment established in Article 19.06.
III.
Counsel for the Uni6n submitted that the evidence of prior
practice and negotiating history given by Mr. de Lima was
irrelevant and should be disregarded by the Board. In his
submission, the reference to "Pension P~an" in Ar%icl~ 19.05 was
unambiguous. It had to be interpreted as that provided by the only
statute currently in existence, the Pension Act, and consequently,
the meaning of "retirement in accordance' with ... the Pension
Plan", under Article 19.05, had to be derived solely from within
the four-corners of the statute.
Th~s meant, in the submission of counsel for the union, that
"retirement" under Article 19.05 had to be equated with the term,
"ceases to be a member of the Plan" as used im the Pension Act.
He directed the attention of the Board to section 15 of Schedule I
of the Pension Act, supra, in which this.phrase seemed to have been
used instead of "retirement" to define eligibility for unreduced
pension under the 65-10, 60-20 and ninety-year rules. He also
directed the attention of t~e Board to several other provisions of
the Pension Act that likewise appeared to substitute the phrase
"ceases to be a member of the Plan", or similar words, for the word
"retirement" or the phrase "ceases to be employed" in the
Superannuation Act. In light of this, it was submitted, the only
8
way in which to reconCile Article 19.05 of the Collective Agreement
with the Pension Act was to read its reference to "an employee who
retires in accordance with ... the Pension Plan," as meaning an
employee "who ceases to be a member of the Plan" under the Pension
Act. The grievor, it was submitted, was just such an employee.
Counsel for the Housing Authority, however, submitted that the
most relevant evidence to be .considered was that of Mr. de Lima.
This, it was submitted, represented unchallenged and uncontradicted
evidence that the benefit of Article 19.05 of the Collective
Agreement was always intended by the parties to be restricted to
those employees who qualified to receive full pension under the~65-
10, 60-20, or ninety-year rules. This intention, it was submitted,
was not. shown to have been changed by virtue of the enactment of
'the Pension Act. Accordingly, it was submitted, it was not open to
the Union to chalienge in this grievance the established policy
regarding the administration of Article 19.05 and 19.06 of the
Collective Agreement. Any change in their administration, counsel
submitted, would have to be accomplished in negotiations.
IV.
As counsel for the Union recognized, in order to accept the
submission of the Union~upon the meaning of the retirement language
of Article 19.05 of the Collective Agreement, i~ would be necessary
to conclude that the retirement language of Article 19.05 of the
9
Collective Agreement was unambiguous, hence rendering irrelevant
under the Parol Evidence Rule the evidence proffered by the Housing
Authority of prior practice and negotiating history. We do not,
however, find this to be the case.
It appears to the Board that the reference to retirement in
Article 19.05 of the Collective Agreement was ambiguous both before
and after the enactment of the Pension Act. We note that even when
{he Superannuation Act held sway, there were at least two possible
constructions of the phrase "employee who retires in accordance
with ... the Pension Plan": It might have been construed as
embracing (1). all retirees, whether receiving less than full
pension under section 18 ' of the Superannuat£on Act or full
Section 18 of the Act reads as follows:
18. Where a contributor who,
(a) has attained the age of sixty-five years
retires and is not entitled to a
superannuation allowance or annuity; or
(b) is found by the Board to be unable to perform
his or her duties by reason of mental or
physical incapacity and whose service is
terminated in circumstances under which he or.
she is not entitled to a disability allowance
or annuity; or
(c) has contributed to· the Fund in respect of a
period of less than ten years dies leaving a
widow or Qidower or a child or children under
the age of eighteen years,
twice the amount of his or her contributions under
section 7, witih interest th'ereon, together with
all other moneys paid into the Fund that entitle
him br her to credit in the Fund, with ihterest
thereon, shall be paid to him or her in monthly
pension under the 65-10, 60-20 or ninety-year rul'es of section 11
of that Act;..or (2) only those retirees retiring with full pension
under section 11 of the Act. As Mr. de Lima testified, this
· ambiguity was resolved in favour of the latter interpretation, and
since at least July 1977, when he commenced employment as the
Benefits Co-ordinator .for the Ministry of Housing, .it was the
consistent and unchallenged practise to limit the benefit of
Article 19.05 to those employees retiring with full pension under
the rules established in section 11 of the Superannuation Act.
The Board'does not regard the change in language effected by
the Pens'ion Act to have changed this interpretation. The relevant
wording of Article 19.05 remained precisely the same~ According to
Mr. de Lima, in negotiations subsequent to the enactment Of the
Pension Act, neither party addressed the question of making any
change to its wording. The upshot of this is that the Board is
persuaded that neither party wished to depart from the longstanding
and undoubtedly open and notorious practis9 of restrictiDg the
benefit of Article 19.05 to those retiring with full pension.
Unless it can be said that the independent action of the
legislature in amending its pension statute automatically amended
the mutuaI intention of the parties, as expressed in Article 19.05
installments or otherwise as he or she directs or
to his widow or her widower or child or children,
as the case may be. 1971. (2nd Sess.), c. 10, s. 7;
1975, c. 73.s.8.
11
and the longstanding ~prior practise, we cannot see how the
submission of the union could be sustained. This, in the opinion
of the Board, would be a doubtful proposition.
Moreover, even if this were possible, there appears to be
nothing within the four corners of the Pension Act to effect any
change in the prior restriction of the benefit of Article-19.05 to
those employees who retire or, in the langauge of section 15 of the
Pension Act, cease to be members of the Plan, with entitlement to
full pension. Like section 11 of the Superannuation Act, section
15 of' the Pension Act effectively restricts entitlement to full
pension to those satisfying the 65-10, 60-20 or ninety-year rules.
These rules es'~entially .did not change. They Lwere retained. It
'seems to the Board that, if anything,, their retention would
indicate to the parties that no change Was necessary to their prior
practise under Article 19.05 of the Collective Agreement, which
depended upon application of these rules.
Accordingly, it must be concluded that it was proper for the
Housing Authority to continue restricting the benefit of the mo~e
generous payout of Article 19.05 of the Collective Agreement to
those employees who were entitled to a full pension under ~he 65-
10, 60-20 or ninety-year rules expressed in section 15 of the
Pension Act. Since it was common ground between the parties that
the grievor, was not entitled to a.full pension under any of these
rules, the Housing Authority was correct in concluding that he was
12
not entitled to the benefit of the payout of.accumulated sick leave
credits under Article 19.05 but instead was subject to the
provisions of Article 19.06, which limitod his payout to 102 days.
In light of the above, 'the grievance must be dismiss'ed.
DATED at London, Ontario, this 3[st day of Ma£¢h, 1992.
· R. J. Robert~, Vice-Chairperson
D. Clark, E~ployer Member