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HomeMy WebLinkAbout1994-2444BALL99_03_24 O/lffARKJ EMPLOYES DE LA COURONNE CROWN EMPLOYEES DE L'O/lffARKJ 1111 GRIEVANCE COMMISSION DE , SETTLEMENT REGLEMENT BOARD DES GRIEFS 180 DUNDAS STREET WEST SUITE 600, TORONTO ON M5G 1Z8 TELEPHONE/TELEPHONE (416) 326-1388 180, RUE DUNDAS OUEST BUREAU 600, TORONTO (ON) M5G 1Z8 FACS/MILEITELECOPIE (416) 326-13!XJ GSB #2444/94 OPSEU #95B316 IN THE MATTER OF AN ARBITRATION Under THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT Before THE GRIEVANCE SETTLEMENT BOARD BETWEEN OntarIO PublIc ServIce Employees Umon (Don Ball) Grievor - and - The Crown m Right of Ontano (Mimstry of MumcIpal Affairs and HOUSIng) Employer BEFORE Nimal V Dlssanayake V Ice-Chair FOR THE Andrew M. Pmto GRIEVOR Counsel FOR THE Lucy S lraco EMPLOYER Counsel, Legal ServIces Branch Management Board Secretariat HEARING March 2, 1999 2 DECISION The grievor, Mr Donald Ball, retired from the Ontario Public Service on January 31, 1993, at the age of 53 years, taking advantage of an Early Retirement Enhancement Program offered by the employer In a grievance dated November 29, 1994, he grieved as follows I grieve I was wilfully misled by the employer into retiring from OPS Ministry of Housing on January 31, 1993 The employer neglected to inform me that effective November 4, 1992 the Ontario Pension Board's Adjudications Committee made a decision to remove the maximum pensionable service credit capped at 35 years The grievor had been employed in the Ontario Public Service approximately 35 years and was in the position of Building Code Advisor at the Ontario Buildings Branch of the Ministry of Housing, when on July 30, 1992 he received a letter from the employer This letter announced an Early Retirement Enhancement Program which was to run from July 1, 1992 to March 31, 1994 Any employee meeting the 60/20 or 90 factor provisions of the Public Service Pension Plan was eligible to take advantage of the program, which offered an enhanced severance package equivalent to one month's salary for each year the employee was under the age of 65 years The letter stated that if Mr Ball had any questions about the program or wished to confirm his eligibility, he may contact a Benefits Coordinator The grievor met with Benefits Coordinator Ms Sharon Amin Ms Amin advised Mr Ball that he would reach the 90 factor in mid-January 1993 3 and that at that time he would be eligible for the program Using a work-sheet, Ms Amin estimated what payments Mr Ball may expect under the program The grievor, who had been the Local Union President, was aware at the time that the service credit for the pension plan was capped at 35 years He realized that he would have to work for 35 years and 8 months (till January 1993) to be eligible for the enhanced package, but that his pension will be based on only 35 years serVlce Ms Amin estimated that based on his current salary of $ 60,000 00 per annum, he would receive an annual pension of $ 42,000 00 Ms Amin sent the work- sheet estimate she had prepared to the Ontario Pension Board for confirmation of the amounts Subsequently he was provided a copy of the work-sheet approved and confirmed by that Board Armed with this information, the grievor had to decide whether or not he should retire early under the program He realized that if he retired In January 1993, he would receive $ 18,000 00 per year less than his current salary of $ 60,000 00 However, he considered the fact that if he remained employed, he would lose the enhanced severance payment of $ 54,000 00 and also would have to continue to make contributions to the pension plan Overall, he calculated that by continuing to work he would only earn about $ 8,000 00 more than as a pensioner He considered the early retirement program quite attractive in the circumstances, and on October 14, 1992 made his election to take advantage of it 4 Following his retirement on January 31, 1993, the grievor received enhanced pay of some $ 54,000 00 in a lump sum, and started to recelve pension payments based on the maximum 35 years service, even though he actually had 35 years and 8 months of service in the Ontario Public Service The grievor had no concerns until he received the following letter dated November 3, 1994 from the Ontario Pension Board Re PENSIONABLE SERVICE CREDIT IN EXCESS OF 35 YEARS You terminated your membership in the Public Service Pension Plan ("Plan" ) on January 31, 1993 As of February 1, 1993, you began receiving a basic monthly pension payment of $ 3,395 08 that was calculated using your pensionable service credit which was capped at 35 years We are pleased to advise you that effective January 1, 1992, the Plan's maximum pensionable service credit limit on 35 years has been removed The removal is the result of the Board's Adjudication Committee's November 4, 1992 decision As a result of this decision, we have recalculated your pension amount to reflect your additional pensionable service credit entitlement Specifically, your additional pensionable service credit totals 35 years 8 months and your basic monthly pension has been increased by $ 64 67 effective February 1, 1993 Therefore, your revised basic monthly pension amount is $ 3,459 75 Every January, beginnlng with the year after you start to receive a pension, your pension will be adjusted for the increase in the cost of living The adjustment will reflect the increase in the cost of living in Canada (as measured by the Consumer Price Index) It will be calculated using the average of the Consumer Price Index for the two 12 month periods ending the preceding September Further to our January 20, 1994 letter, the above revised basic monthly pension amount is increased 5 by $ 60 26, therefore, your new total pension is $ 3,520 01 Your November 1994 pension payment will reflect the increase to your gross pension amount The total amount of retroactive payment due to you is $ 1,369 37 and it will be included in your November 1994 payment Re-employment earnings exceeding $ 4,737 39 per calendar quarter will result in a reduction to your monthly pension payment in the next calendar quarter You must report re-employment earnings to the Plan Administrator If you have any questions, please contact our Client Services unit at the telephone numbers listed below On the same date, the Ontario Pension Board sent the following letter to the Ministry, with copy to Mr Ball RE DONALD A BALL Amended Pension Adjustment Amount for the Taxation Years - 1992, 1993 Pensionable Service Credit in Excess of 35 years Effective January 1, 1992, the Public Service Pension Plan's maximum pensionable service credit limit of 35 years has been removed The removal is the result of the Ontario Pension Board's Adjudication Committee's November 4, 1992 decision This former member terminated Plan membership on January 31, 1993 with the pensionable service credit capped at 35 years The Board has subsequently recalculated the former member's pension amount to reflect the additional pensionable service credit entitlement We believe that your present system disregards any pensionable service credit in excess of 35 years when computing Pension Adjustment amounts As a result, the Pension adj ustment reported for the 1992 and 1993 taxation years have to be amended to reflect the additional benefit accrued in that year We are providing you with the following information and requesting its inclusion in your recalculation of the former member's Pension Adjustment amount for the 1992 and 1993 taxation years The member now has additional 6 pensionable service credit in the Plan for the following period of employment June 12, 1992 - January 31, 1993 The amount of pensionable service credit accrued during the above period is 8 months Please contact me, should you require further information The grievor testified that as a result of the removal of the service cap retroactive to January 1, 19.92, his additional 8 months of service beyond 35 years, was given credit for pension calculation He received $ 1,369 37 In retroactive pay and his monthly pension amount increased by $ 60 26 The grievor testified that these letters indicated to him that as early as November 1992 the cap on the service credit under the Public Service Pension Plan had been removed as a result of the Committee's decision He felt that the employer had kept that information secret Had he been aware that the cap had been removed, he would have worked at least till he was 60 years old and assessed the situation at that time He agreed under cross-examination that had he done that he would not have received the enhanced severance pay of $ 54,000 00, because that program was available only until March 1994 The Ontario Pension Board Adjudication Committee decision dated November 4, 1992 relied on by the union was filed in evidence It was apparent that the grievor had believed that this Committee decision had 7 the result of removing the 35 year cap Howeve r , during final submissions union counsel conceded, and I find, that the Committee decision did not have that legal result The Committee was adjudicating an individual case filed by a pensioner The Committee noted that Order- In-Council 3298/91 required that the Ontario Public Service Pension Plan comply with the new Income Tax Act after December 31, 1991 It observed that the 35 year cap was still in force and that this may conflict with the Income Tax Act In its decision, it was held that "If the Board accepts the contributions without providing a benefit, it is in breach of the Income Tax Act Therefore, the Board must provide pension benefits in excess of 35 years of credit in the Plan" It is not clear whether this decision was binding on the Board as far as the individual pensioner in the case was concerned However, there is no doubt that the decision did not have the result of amending Schedule I of the Public Service Pension Act, by removing the cap That occurred only on October 12, 1994, when Order-In-Council 2776/94 was passed While the Committee decision may have been the catalyst, the cap was removed only when the Schedule was amended by the Order-In-Council on October 12, 1994 Recognizing that the cap had not legally been removed at the time the grievor made his election, the union's allegation was to the effect that at the time, the employer knew or ought to have known that the cap would have to be removed at some point in the future in order to bring the pension plan into conformity with the Income Tax Act The union submits 8 that the employer was negligent in failing to provide that information , to the grievor, who was making a significant election on retirement Counsel for the union conceded that the employer had no obligation to inform employees of all possible changes in the law which may affect their employment related decisions In this regard he drew a distinction between "serious" and "trivial" situations As an example of the latter, he cited a proposed amendment to the Human Rights Code In his view, that would be a trivial situation, and the employer had no obligation to bring to the attention of an employee that the proposed amendment may affect an employment decision the employee was about to make He submitted that the employer ought to have known that the cap on service credit for pensions had to come off because it was contrary to the Income Tax Act In his view, that was a serious situation, and the employer owed a duty of care to the grievor, to bring that information to his attention Counsel conceded that the union was not claiming that the employer had violated any particular provision of the collective agreement Nevertheless, he submitted that by failing to inform, the employer had committed a tort, i e negligence Citing the judgment of the Supreme Court of Canada in Weber v Ontario Hydro, (1995) 125 D L R ( 4 th) 583, he took the position that the Board should infer from the collective agreement that the employer owed a duty of care to provide information regarding pension entitlement Although the collective agreement makes 9 no reference to pensions, it does provide for employment benefits According to counsel, this allows the Board to find that the collective agreement was breached as a result of the employer's negligence The employer denies that it had acted negligently Counsel points out that the cap was not removed until the passage of the Order-In- Council in October 1994 Until then, the employer as well as the Ontario Pension Board was bound by the law as contained in Schedule I as it existed There was no evidence that the employer had information any time prlor to the grievor's election that the cap will be removed In fact, the Committee's decision itself notes that the Pension Board could bring the Pension Plan into conformity with the Income Tax Act, without removing the cap, i e by not accepting contributions from employees beyond 35 years Thus, there was no certainty that the cap would be removed Counsel submits that in any event this grievance is inarbitrable since it does not arise out of the collective agreement Weber v Ontario Hydro in her view, was distinguishable - Under the Crown Employees Collective Bargaining Act, s 19 (1) , to be arbitrable before this Board, a dispute between the parties must be a difference between them "arising from the interpretation, application, administration or alleged contravention of the (collective) agreement " This language is identical to the language of section 45(1) of the Labour 10 Relations Act, considered in Weber v Ontario Hydro In finding that the dispute in that case was arbitrable before an arbitrator, McLachlin J at p 608 wrote as follows [72] Article 2 2 of the collective agreement extends the grievance procedure to "any allegation that an employee has been subjected to unfair treatment or any dispute arising out of the content of this Agreement " The dispute In this case arose out of the content of the agreement Items 13 0 of Part A of the agreement provides that the "benefits of the Ontario Hydro Sick Leave Plan shall be considered as part of this Agreement" It further provides that the provisions of the plan "are not an automatic right of an employee and the administration of this plan and all decisions regarding the appropriateness or degree of its application shall be vested solely In Ontario Hydro" This language brings the medical plan and Hydro's decisions concerning it expressly within the purview of the collective agreement Under the plan, Hydro had the right to decide what benefits the employee would receive, subject to the employee's right to grieve the decision In the course of making such a decision, Hydro is alleged to have acted improperly That allegation would appear to fall within the phrase "unfair treatment or any dispute arising out of the content of [the] Agreement" within art 2 2 [73 ] I conclude that the wide language of art 2 2 of the agreement, combined with item 13 0, covers the conduct alleged against Hydro Hydro's alleged actions were directly elated to a process which is expressly subject to the grievance procedure While aspects of the alleged conduct may arguably have extended beyond what the parties contemplated, this does not alter the essential character of the conduct In short, the difference between the parties relates to the "administration of the agreement" within s 45 (1) of the Labour Relations Act There, the court found a clear nexus between the dispute and the collective agreement through article 2 2 of the collective agreement and item 13 0 which provided that "the benefits of the Ontario Hydro Sick 11 Leave Plan shall be considered as part of this agreement" Thus there was a direct nexus between the Sick Leave Plan and the collective agreement There is no comparable provision in the collective agreement between these parties, which make benefits under the Ontario Public Service Pension Plan part of it On the contrary, the benefits and the penslon plan are governed by specific legislation, the Public Service Pension Act and regulations thereunder The only assertion the union made was that the collective agreement deals with "employment benefits" This in the Board's view does not bring the present dispute within the purview of the collective agreement The collective agreement deals with specific employment benefits Pensions are not one of the benefits so dealt with There is nothing in this collective agreement, unlike the collective agreement in Weber v Ontario Hydro, which makes the Pension Plan or the benefits thereunder, part of it or related to it In the circumstances, the Board finds that this grievance is not arbitrable before this Board, and is therefore -gismissed Dated this24iliday of March 1999 at Hamilton, Ontario, ~g~---~ - ~ Nimal V Dissanayake Vice-Chair