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HomeMy WebLinkAbout1995-2109.Tilden.00-01-17 Decision i\~AFLI EUEL 'E LA .'E rill'f EUE L "TE.c E L i\~AFLI GRIEVANCE COMMISSION DE -- SETTLEMENT REGLEMENT BOARD DES GRIEFS 180 DUNDAS STREET WEST SUITE 600 TORONTO ON M5G 128 TELEPHONBTELEPHON~ (416) 326-1388 180 RUE DUNDAS OUEST BUREAU 600, TORONTO (ON) M5G 128 FACSIMILBTELECOPIE. (416) 326-1396 GSB # 2109/95 2110/95 2111/95 2112/95 OPSEU # 96D046 96D047 96D048 96D049 IN THE MATTER OF AN ARBITRATION Under THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT Before THE GRIEVANCE SElTLEMENT BOARD BElWEEN Ontano Pubhc ServIce Employees Umon (Tilden) Grievor - and - The Crown m Right of Ontano (Mimsm of MumcIpal Affairs and Housmg) Emplover BEFORE Nimal DISSanayake Vice Charr FOR THE Ahcl Ryder GRIEVOR Counsel Ryder Wnght, Blair & Doyle Barnsters & SohcItors FOR THE LIane Brossard EMPLOYER Counsel, Legal ServIces Branch Management Board Secretariat HEARING Januan 6 2000 2 DECISION The Board issued its decision on this matter on October 19, 1998 The Board was reconvened at the partie s. reque s t to deal with several disputes the parties had with regard to remedial lssues At the hearing on January 6, 2000, the parties agreed to make submissions on the union.s claim for damages under two particular heads and get a rul ing, before dealing with other outstanding disputes This decision deals with those lssues Aqqravated damaqes In its decision dated October 19, 1998, the Board had concluded that the employer had contravened the collective agreement in the manner it laid off the grlevor and subsequently applied the collective agreement with regard to surplus rights and job security The unlon, inter alia, claims aggravated damages on the grounds that this was not merely a failure to properly apply the collective agreement, but a bad faith attempt by the employer to harm the grlevor The unlon sought to lead evidence to establish bad faith and make submissions that aggravated damages were warranted In the circumstances 3 The employer denies any bad faith It further argues that even if the allegations of bad faith alleged are established, the Board lacks jurisdiction to award aggravated damages in this particular case As a preliminary matter, however, it lS the employer-s position that at this stage the Board is in any event functus officio with regard to an allegation of bad faith This decision deals with the -functus officio- argument At p 41 of its decision the Board summarized its conclusion as follows In support of the grlevance the unlon targeted a number of positions in different classifications, as positions the grlevor had entitlement to be either assigned to or displace into Having reviewed the evidence the Board has concluded that (1 ) The grlevor was entitled to have been assigned to one of the ORC vacancies which were filled through a competition (2 ) The grlevor had the qualifications and was entitled to displace the incumbent of a CP I position, who had less seniority than the grlevor By failing to accord these entitlements to the grlevor, the employer contravened the collective agreement At pp 41-42 the Board went on to deal with the remedy as follows 4 Remedy The evidence lS that under the redeployment process under article 20, the employer first exhausted any assignment opportunities before turning to consider displacement rights Therefore, had the employer complied with the collective agreement, the grlevor would have been assigned to one of the ORC positions Therefore the appropriate remedy lS to direct that the employer appoint the grlevor to that position retroactively to the time when he should have been assigned and to compensate him for all losses The Board so directs Of course, glven the passage of time and the restructuring that has gone on within the ministry In that time, it lS open to the parties, if they can so aqree, to devise a remedy of their own as an alternative to the remedy ordered by the Board The Board remalns seized with jurisdiction In the event the parties have any disagreement relating to the remedy In a nutshell, the dispute lS as to whether the Board.s retention of jurisdiction at the end of its award, included jurisdiction to deal with the union .S present allegation of bad faith The Board notes that In his openlng statement, Mr Ryder mentioned several times that the employer had acted in bad faith towards the grlevor This lS consistent with the fact that one of the four grlevances before the Board specifically made an 5 allegation of bad faith At p 3 of its award, the Board described the grlevances before it as follows The four grievances before the Board are as follows (A) a grlevance dated November 10, 1995 alleging that the gr i evor.s position was abolished in bad faith and In violation of articles A and 24 (B) a grlevance dated November 16, 1995 alleging that the employer breached article 24 21 14 by failing to include a performance reVlew as part of the gr ievor.s employee portfolio and thereby denied the grlevor an opportunity for placement In another position (C) a grlevance dated November 16, 1995 alleging (1 ) Improper layoff (2 ) Failure to apply article 24 rights In a full and timely manner (3 ) Denial of the right to bump into positions occupied by employees with less seniority (4 ) Discrimination against the grievor because of his union activities and his exerClse of rights under the collective agreement (D) a grlevance dated November 16, 1995 claiming that the grlevor was denied his right to a guaranteed job offer pursuant to article 24 17 1 Grievance (A) above clearly makes an allegation of bad faith However, immediately after describing the grlevances as set out above, at pp 3-4 the Board wrote as follows On the second day of hearing unlon counsel advised that he would not be relying on bad faith and discrimination as an independent cause of action, but would be relying on that evidence only 6 In support of the allegation that the gr i evor.s substantive rights under the collective agreement were violated Therefore, the unlon has In effect abandoned the grlevance (A) above The allegation that the employer had discriminated because of the grievor.s unlon activity and exerClse of collective agreement rights was also not pursued during final submissions In any event, the Board finds that the evidence before it does not substantiate any discrimination on the grounds of a prohibited ground nor any ill-will or bad faith on the part of the employer either In its decision to abolish and declare the grievor.s position surplus or In the manner it applied the surplus and job security rights under the collective agreement subsequently Therefore, this arbitration lS about whether the employer correctly applied the gr i evo r.s collective agreement rights The Board, having made a finding that the unlon had In effect abandoned the grlevance In which he alleged bad faith, also finds that .In any event the evidence before it does not substantiate any ill-will or bad faith on the part of the employer either In its decision to abolish and declare the gr i evo r.s position surplus or In the manner it applied the surplus and job security rights under the collective agreement subsequently. Clearly, based on the evidence that was adduced, the Board has already made a determination on the lssue of bad faith The union .S present endeavour would In effect be an attempt to have the Board reverse its decision by leading additional evidence on bad faith at this stage 7 In the present case the union did not at any time purport to reserve a right to call further evidence to establish its allegation of bad faith Nor did the Board intend to reserve jurisdiction In that regard If it had so intended, it would have been extremely strange for the Board to make a finding that there was no bad faith In its decision the Board determined the employer-s liability It awarded a specific remedy for the violations found It retained jurisdiction only .in the event the parties have any disagreement relating to the remedy. , l e the remedy it had ordered in its decision The attempt at this stage lS to lead evidence relating to further employer conduct and liability, and not to determine the extent of the remedy ordered The Board no longer has jurisdiction In that regard For the foregoing reasons, I uphold the employer-s objection to the Board.s jurisdiction to deal with the union.s claim for aggravated damages because the Board lS functus officio Damaqes for losses resultinq from liquidation of stock portfolio and RRSP 8 The unlon claims that upon the loss of the grievor-s employment, the family lncome of the grlevor was significantly reduced In order to find the required family lncome, the grievor withdrew some funds from his RRSP In addition, he sold some stocks he had In his investment portfolio The unlon states that it will prove that as a result of withdrawing the RRSP funds, there was a permanent reduction in the gr ievor-s RRSP account and further that he suffered adverse lncome tax consequences He similarly claims that by selling his stocks at the time he did, the grlevor suffered losses Counsel agrees that the test lS one of reasonable foreseeability He draws a parallel between foreseeability and the prudence of the grievops decision to withdraw funds form his RRSP and sell his stocks He submits that the employer lS entitled to expect that the grlevor would act prudently In addressing the financial problems posed as a result of his layoff As long as the grievor-s actions were prudent, they must be deemed to fall within the range of foreseeability for purposes of recovery of damages Counsel submitted that the prudence of what the grlevor did may only be understood In the factual context as a whole Without accepting the facts, the employer was content to argue the issue of recoverability on the union-s verSlon of facts 9 The pertinent facts, assumed solely for the purposes of this argument, are as follows The grlevor is married with a son ( 13 years) and daughter (10 years) He owned the family residence and also owned 3 rental properties The rental lncome from the 3 properties was approximately equal to the rental expenses including mortgages He had a RRSP and 2 stock portfolios, one of which was for his children According to the unlon, prlor to his layoff on November 15, 1995, the grievor-s annual household lncome was approximately $ 88,000 00, consisting of his salary of approximately $ 62,000 00, a net payment of $ 15,000-16,000 he received as a result of a grlevance settlement and his wi f e-s salary of $ 35,460 00 In the years 1996, 1997 and 1998 in the period between his layoff and his reinstatement, the grievor-s family lncome consisted of his wife-s salary and income from the grievor-s self- employment as a consulting Landscape Architect Since his self- employment lncome averaged a negative $ 3,567 00 per year, that left his family with an annual lncome of approximately $ 31,900 00 Thus, according to the unlon, as a result of the 10 gr i evo r.s layoff, the family lncome fell from $ 88,000 00 to $ 31,900 00 per year Counsel urges the Board to consider the prudence of the gr i evo r.s decision to withdraw funds from his RRSP and to sell some of his stocks, In light of this factual context The grlevor registered with the Unemployment Insurance Commission, and did a serlOUS job search fulfilling his duty to mitigate He started his own business as a consultant in the field of his expertise When it still left a significant shortfall In the family lncome, he decided first to sell the riskiest of his assets, the stocks Next he withdrew from his RRSP Counsel takes the position that the evidence will be that the grlevor was not In a position to obtain any bank loans, because as an unemployed person his credit rating was unfavourable In any event, without a job, the grlevor was not willing to lncur debts Counsel submits that it was very reasonable for the grievor to first turn to the stocks and RRSP rather than selling his rental properties The rentals provided him tax advantages Further real estate lS not very liquid and it can take a long time before any funds are actually realized by a sale 11 The employer-s position lS that even if all of the facts asserted by the unlon are established, no damages are recoverable with respect to these losses Counsel.s position was that any such loss lS too remote and not within the realm of reasonable foreseeability and further that the loss lS merely speculative Counsel submitted a number of decisions In support of her assertion that losses resulting from personal decisions by an employee unrelated to employment are not recoverable The parties appear to be agreed on two basic principles First, they agree that the purpose of damages lS as set out In the following passage from Re Canadian Johns Manville Co Ltd , (1971 ) 22 LAC 396 (Weiler) at pp 397-8 Stated In the abstract, the relevant principle lS quite clear The purpose of damages for breach of contract lS not to punish but to compensate, and the function of compensation lS to place the aggrieved party In a monetary position as near as possible to that in which he would have been had the contact been performed Second, the parties agree that, to be recoverable, the loss claimed must not be too remote, that l s, it must be reasonably foreseeable See Re Sheridan Colleqe of Applied Arts & Technoloqy, (1998) , 75 LAC (4 tll) 201 (Schiff) 12 Thus the dispute boils down to whether the loss claimed here was reasonably foreseeable or too remote, and whether loss was merely speculative There was no dispute that the legal principles that govern the rights of recovery by an employee who is unjustly discharged also apply to an employee improperly laid-off It has been held that a discharged employee lS not limited to claiming damages for loss of his salary and wages Thus In Lawson v Dominion Securities Corp , (1977) 2 A C W S 259, the Ontario Court of Appeal stated The recovery of lost lncome lS not limited to salary In this case the appellant conceded that the penslon plan benefits should also be included Carey v F Drexel Co Ltd , [1974J 4 W W R 492 exemplifies the rule that other lncome items should be admitted including contractual profit-sharing, a share-purchase option, and many fringe benefits such as a company car, club membership, pens lon, disability and medical plans Other cases have allowed compensation for lost commlSSlon, money paid on piece-work, tips, rent-free residence, board and lodging, luncheon vouchers, and the like McGregor on Damages (13th edition) para 885 at 595 However, discretionary items such as bonus or profit distribution are not normally allowed Bardal v Globe & Ma~l (Th e) r [1960] OWN 253 Employer counsel pointed out that all of the losses stated to be recoverable in Lawson are directly related to employment 13 and not relating to personal assets or investments of the employee In addition, the Board was provided with a number of decisions where the claims pertained to losses from transactions of a personal nature which the employee engaged In as a result of his loss of employment In Re Canada Post Corporation, (1989) 6 LAC (4 tll) 232 (T A B Jolliffe) , the grlevor had claimed, Inter alia, that as a result of her discharge it became necessary for her to cash In approximately $ 3,000 00 worth of RRSP contributions to pay for a holiday she had taken prior to her discharge, and that this had left her In a taxable position with respect to those funds which she would not have otherwise incurred It was submitted on her behalf that it was reasonably foreseeable that when terminated the grlevor might well find herself In a situation where she would have to use her RRSP contributions, and that accordingly damages should be awarded to cover the tax consequences of taking the $ 3,000 00 into personal lncome The employer took the position that the loss was both speculative and not a foreseeable consequence of the discharge At p 241 the Board held that the loss In question -does not meet the foreseeability test and should not be considered a heading of damages - 14 In Allen v Tandy Electronics Ltd , (1983 ) 2 C C E L the Ontario Supreme Court upheld a civil action for wrongful dismissal The plaintiff claimed, inter alia, damages for losses resulting from his withdrawal of some RRSP funds to cover living expenses At p 146, Cromarty J held as follows The plaintiff has also claimed damages because he withdrew from a number of R R S P funds a substantial sum to provide him with money with which to live while he had no salary The claim lS for the taxes on the collapsing of those funds In my opinion, it lS only a prepayment of taxes which would eventually have to be paid and there lS some loss of benefits and interest on tax free accumulations, but they are sufficiently remote that I do not think they can be allowed In McKim v Atlantic Motors Ltd , (1985) 12 C C E L 18, the Nova Scotia Supreme Court had allowed an action for wrongful dismissal The plaintiff had moved from New Brunswick to Nova Scotia In order to accept the employment from which he was terminated, and had purchased a house His claim included recovery of carrYlng charges on the house during the notice period, as well as the capital loss resulting from the sale of the house In denying damages for the capital loss, the Court at p 20 held While having little difficulty In holding that carrYlng charges with regard to the newly purchased home during the period of reasonable notice are 15 damages flowing from the breach of contract and therefore properly allowable, I have grave doubts that any capital loss lS also recoverable as flowing from the breach of the employment contract Whether this employee purchased or rented a home In the new area of employment was solely at his own option or choice It had nothing to do with his employment per se The only decision from this Board, filed as authority was Re Sysiuk, 195/89 (Keller) , an unanlmous decision by the panel The lssue In dispute was set out as follows The parties are unable to agree on whether the grlevor lS to be compensated for his inability to make the maximum allowable pension contribution In other words, his maXlmum allowable penSlon contribution In 1990 lS reduced because of events the prevlous year and he therefore will pay a greater amount of lncome tax He seeks compensation for the additional taxes paid resulting from his inability to contribute the maximum RRSP amount The argument on behalf of the grlevor lS that the grlevor lS entitled to be -made whole- That means that he would have, but for the action of the employer, been able to make full penSlon contributions thus galnlng the maXlmum tax advantage He requlres compensation to be put into the position he would have been prior to the actions of the employer The employer characterizes the lssue as one of remoteness of damages Counsel agrees with the -make-whole- principle but submits that the compensation sought by the grlevor was not reasonably within the contemplation of the parties and thus too remote 16 The Board referred to Allen v Tandy Electronics Ltd , ( supra) and also noted that in Kilby v Oxford Warehousinq Ltd , 1 C C E C 217 (High Court of Justice) .a claim for loss of investment lncome on the collapse of an R R S P was disallowed In the case of a wrongful dismissal because that item of damage was not within the contemplation of the parties when the employment contract was entered into . The Board went on to hold Although neither case lS on all fours with the instant case, they clearly lend support to the proposition of the employer with regard to the claim of the grlevor The Board does not take issue with the notion of making the grlevor whole However, there lS no principle that does not have some limitations In our Vlew the nature of the compensation sought by the grlevor lS entirely too remote to be considered part of what has been customarily understood to be a make-whole award and its payment lS not ordered by the Board To the extent that this was the lssue to determined, the grlevance lS denied The Board noted that the facts In Re Sysiuk were not on all fours with the court cases cited therein, yet held that the principle was applicable In contrast, the facts In the instant case are very similar, if not identical, to the facts In Re Canada Post Corporation (supra) and Allen v Tandy Electronics Ltd , (supra) Faced with these cases, as well as this Board.s 17 own decision In Re Sysiuk, unlon counsel did not attempt to distinguish the facts of this case He nevertheless submitted that I ought not follow the result in those cases Counsel took the position that unlike at the time those cases were decided, In the present day most educated white-collar workers contribute to a RRSP It lS also not uncommon for such employees to own some stocks as an investment Therefore, it was reasonable for the employer to expect that the grlevor would own such assets and that he may have to turn to those when his lncome from employment ceased In other words, counsel.s position was that while this kind of loss may not have been reasonably foreseeable In the past, that was no longer the case The Board agrees that the prudence of the employee action lS one of many factors relevant to the lssue of foreseeability But prudence alone does not necessarily make such action reasonably foreseeable The Board cannot agree with the temporal distinction drawn by the unlon Most of the prlor decisions under consideration were decided In 1989 The employer conduct that resulted in the claimed losses occurred in 1995, a mere SlX years after those decisions There lS simply no basis to conclude that In that period there has been such a dramatic change In what may be reasonably foreseeable, as 18 counsel suggests The Board cannot take -judicial notice- , or otherwise conclude that most educated white-collar full-time employees In the civil service who contribute to a pension plan through employment, also contribute to a RRSP and own a portfolio of stocks I agree with the preVlOUS decisions that losses resulting from personal decisions with regard to a RRSP or stocks are too remote and are not recoverable As this Board held in Re Sysiuk, the -make whole- principle of remedy does not make such losses recoverable While that lS sufficient to dispose of this lssue, I also agree with employer counsel that the claimed loss with regard to the sale of stocks lS entirely speculative The Board cannot . . how expert state with degree of certainty lmaglne any can any what the future would have held for those stocks, had the grlevor not sold them at the time he did Would their value have appreciated, depreciated or remained unchanged? One can only speculate on the answer I heard no explanation from the unlon why the emp10yer-s argument In this regard was not meritorious It follows that the union -s claim for damages under these heads fail 19 The Board will reconvene as scheduled to deal with any other disputes between the parties on the remedy pursuant to the Board.s ini tial award Dated this 17th day of January 2000 at Hamilton, Ontario ~~ ":'11-- ... - . ~~ ~. ~~~ : --' _--:t~ --~~ Nimal V Dissanayake Vice-Chairperson